Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on the Condensed Consolidated Statements of Financial Position at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows:

Level 1: Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.

Level 2: Assets and liabilities whose values are based on the following:

(a)Quoted prices for similar assets or liabilities in active markets;

(b)Quoted prices for identical or similar assets or liabilities in markets that are not active; or

(c)Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the assets and liabilities.

The availability of observable inputs varies by instrument. In situations where fair value is based on internally developed pricing models or inputs that are

unobservable in the market, the determination of fair value requires more judgment. The degree of judgment exercised by the Company in determining fair value is typically greatest for instruments categorized in Level 3. In many instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments.

The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance that assets and liabilities are appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. For fair values received from third parties or internally estimated, the Company’s processes and controls are designed to ensure that the valuation methodologies are appropriate and consistently applied, the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers or brokers or derived from internal models. The Company performs procedures to understand and assess the methodologies, processes and controls of

valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third-party valuation sources for selected securities. The Company performs ongoing price validation procedures such as back-testing of actual sales, which corroborate the various inputs used in internal models to market observable data. When fair value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions.

The Company has two types of situations where investments are classified as Level 3 in the fair value hierarchy:

(1)Specific inputs significant to the fair value estimation models are not market observable. This primarily occurs in the Company’s use of broker quotes to value certain securities where the inputs have not been corroborated to be market observable, and the use of valuation models that use significant non-market observable inputs.

(2)Quotes continue to be received from independent third-party valuation service providers and all significant inputs are market observable; however, there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity such that the degree of market observability has declined to a point where categorization as a Level 3 measurement is considered appropriate. The indicators considered in determining whether a significant decrease in the volume and level of activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, the level of credit spreads over historical levels, applicable bid-ask spreads, and price consensus among market participants and other pricing sources.

Certain assets are not carried at fair value on a recurring basis, including mortgage loans, bank loans, agent loans and policy loans and are only included in the fair value hierarchy disclosure when the individual investment is reported at fair value.

In determining fair value, the Company principally uses the market approach which generally utilizes market transaction data for the same or similar instruments. To a lesser extent, the Company uses the income approach which involves determining fair values from discounted cash flow methodologies. For the majority of Level 2 and Level 3 valuations, a combination of the market and income approaches is used.

Summary of significant inputs and valuation techniques for Level 2 and Level 3 assets and liabilities measured at fair value on a recurring basis

Level 2 measurements

•Fixed income securities:

U.S. government and agencies, municipal, corporate - public and foreign government: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads.

Corporate - privately placed: Privately placed are valued using a discounted cash flow model that is widely accepted in the financial services industry and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data. The primary inputs to the discounted cash flow model include an interest rate yield curve, as well as published credit spreads for similar assets in markets that are not active that incorporate the credit quality and industry sector of the issuer.

Corporate - privately placed also includes redeemable preferred stock that are valued using quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, underlying stock prices and credit spreads.

ABS and MBS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, collateral performance and credit spreads. Certain ABS are valued based on non-binding broker quotes whose inputs have been corroborated to be market observable. Residential MBS include prepayment speeds as a primary input for valuation.

•Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that are not active.

•Short-term: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads.

•Other investments: Free-standing exchange listed derivatives that are not actively traded are valued based on quoted prices for identical instruments in markets that are not active.

Over-the-counter (“OTC”) derivatives, including interest rate swaps, foreign currency swaps, total return swaps, foreign exchange forward contracts, certain options and certain credit default swaps, are valued using models that rely on inputs such as interest rate yield curves, implied volatilities, index price levels, currency rates, and credit spreads that are observable for substantially the full term of the contract. The valuation techniques underlying the models are widely accepted in the financial

services industry and do not involve significant judgment.

•Assets held for sale: Comprise U.S. government and agencies, municipal, corporate, foreign government, ABS and MBS fixed income securities, equity securities, short-term investments and other investments. The valuation is based on the respective asset type as described above.

•Liabilities held for sale: Comprise other liabilities, mainly free-standing exchange listed derivatives, that are not actively traded and are valued based on quoted prices for identical instruments in markets that are not active.

Level 3 measurements

•Fixed income securities:

Municipal: Comprise municipal bonds that are not rated by third-party credit rating agencies. The primary inputs to the valuation of these municipal bonds include quoted prices for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements, contractual cash flows, benchmark yields and credit spreads. Also included are municipal bonds valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable and municipal bonds in default valued based on the present value of expected cash flows.

Corporate - public and privately placed, ABS and MBS: Primarily valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. Other inputs for corporate fixed income securities include an interest rate yield curve, as well as published credit spreads for similar assets that incorporate the credit quality and industry sector of the issuer.

•Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements.

•Short-term: For certain short-term investments, amortized cost is used as the best estimate of fair value.

•Other investments: Certain OTC derivatives, such as interest rate caps, certain credit default swaps

and certain options (including swaptions), are valued using models that are widely accepted in the financial services industry. These are categorized as Level 3 as a result of the significance of non-market observable inputs such as volatility. Other primary inputs include interest rate yield curves and credit spreads, and quoted prices for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements.

•Assets held for sale: Comprise municipal, corporate, ABS and MBS fixed income securities and equity securities. The valuation is based on the respective asset type as described above.

•Liabilities held for sale: Comprise derivatives embedded in certain life and annuity contracts which are valued internally using models widely accepted in the financial services industry that determine a single best estimate of fair value for the embedded derivatives within a block of contractholder liabilities. The models primarily use stochastically determined cash flows based on the contractual elements of embedded derivatives, projected option cost and applicable market data, such as interest rate yield curves and equity index volatility assumptions. These are categorized as Level 3 as a result of the significance of non-market observable inputs.

Assets measured at fair value on a non-recurring basis

Long-lived assets to be disposed of by sale, including real estate, are written down to fair value less costs to sell.

Investments excluded from the fair value hierarchy

Limited partnerships carried at fair value, which do not have readily determinable fair values, use NAV provided by the investees and are excluded from the fair value hierarchy. These investments are generally not redeemable by the investees and generally cannot be sold without approval of the general partner. The Company receives distributions of income and proceeds from the liquidation of the underlying assets of the investees, which usually takes place in years 4-9 of the typical contractual life of 10-12 years. As of June 30, 2021, the Company has commitments to invest $268 million in these limited partnership interests.


Assets and liabilities measured at fair value
	June 30, 2021
($ in millions)	Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Counterparty and cash collateral netting			Total
Assets
Fixed income securities:
U.S. government and agencies	$	4,739		$	36		$	—					$	4,775
Municipal	—			7,631			18						7,649
Corporate - public	—			18,497			20						18,517
Corporate - privately placed	—			9,677			84						9,761
Foreign government	—			1,006			—						1,006
ABS	—			1,056			10						1,066
MBS	—			28			23						51
Total fixed income securities	4,739			37,931			155						42,825
Equity securities	2,248			406			405						3,059
Short-term investments	3,515			2,001			—						5,516
Other investments	—			61			3			$	(14)		50


Assets held for sale	5,984			25,888			164			(5)			32,031
Total recurring basis assets	16,486			66,287			727			(19)			83,481
Non-recurring basis	—			—			42						42
Total assets at fair value	$	16,486		$	66,287		$	769		$	(19)		$	83,523
% of total assets at fair value	19.7		%	79.4		%	0.9		%	—		%	100.0		%

Investments reported at NAV													1,483
Assets held for sale at NAV													518
Total													$	85,524
Liabilities

Other liabilities	$	—		$	(36)		$	—		$	13		$	(23)
Liabilities held for sale	—			(115)			(490)			3			(602)
Total recurring basis liabilities	—			(151)			(490)			16			(625)

Total liabilities at fair value	$	—		$	(151)		$	(490)		$	16		$	(625)
% of total liabilities at fair value	—		%	24.2		%	78.4		%	(2.6)		%	100.0		%


Assets and liabilities measured at fair value
	December 31, 2020
($ in millions)	Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Counterparty and cash collateral netting			Total
Assets
Fixed income securities:
U.S. government and agencies	$	2,061		$	45		$	—					$	2,106
Municipal	—			7,562			17						7,579
Corporate - public	—			21,885			67						21,952
Corporate - privately placed	—			9,002			63						9,065
Foreign government	—			958			—						958
ABS	—			794			52						846
MBS	—			32			27						59
Total fixed income securities	2,061			40,278			226						42,565
Equity securities	2,468			396			304						3,168
Short-term investments	6,549			223			35						6,807
Other investments	—			29			—			$	(9)		20

Other assets	1			—			—						1
Assets held for sale	6,488			23,103			267			(6)			29,852
Total recurring basis assets	17,567			64,029			832			(15)			82,413

Total assets at fair value	$	17,567		$	64,029		$	832		$	(15)		$	82,413
% of total assets at fair value	21.3		%	77.7		%	1.0		%	—		%	100.0		%

Investments reported at NAV													1,062
Assets held for sale at NAV													762
Total													$	84,237
Liabilities

Other liabilities	$	—		$	(34)		$	—		$	18		$	(16)
Liabilities held for sale	—			(119)			(516)			9			(626)
Total recurring basis liabilities	—			(153)			(516)			27			(642)

Total liabilities at fair value	$	—		$	(153)		$	(516)		$	27		$	(642)
% of total liabilities at fair value	—		%	23.8		%	80.4		%	(4.2)		%	100.0		%

Quantitative information about the significant unobservable inputs used in Level 3 fair value measurements (1)

($ in millions)

Fair value

Valuation
technique

Unobservable
input

Range

Weighted
average

June 30, 2021

Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options

(466)

Stochastic cash flow model

Projected option cost

1.0 - 4.2%

2.87%

December 31, 2020

Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options

(483)

Stochastic cash flow model

Projected option cost

1.0 - 4.2%

2.80%

(1)These were included in the liabilities held for sale as of June 30, 2021 and December 31, 2020.

The embedded derivatives are equity-indexed and forward starting options in certain life and annuity products that provide customers with interest crediting rates based on the performance of the S&P 500. If the projected option cost increased (decreased), it would result in a higher (lower) liability fair value.

As of June 30, 2021 and December 31, 2020, Level 3 fair value measurements of fixed income securities total $155 million and $226 million, respectively, and include $43 million and $69 million, respectively, of securities valued based on non-binding broker quotes where the inputs have not been corroborated to be

market observable and $16 million and $18 million, respectively, of municipal fixed income securities that are not rated by third-party credit rating agencies. As the Company does not develop the Level 3 fair value unobservable inputs for these fixed income securities, they are not included in the table above. However, an increase (decrease) in credit spreads for fixed income securities valued based on non-binding broker quotes would result in a lower (higher) fair value, and an increase (decrease) in the credit rating of municipal bonds that are not rated by third-party credit rating agencies would result in a higher (lower) fair value.


Rollforward of Level 3 assets and liabilities held at fair value during the three month period ended June 30, 2021
	Balance as of March 31, 2021		Total gains (losses) included in:				Transfers				Transfers to (from) held for sale										Balance as of June 30, 2021
($ in millions)			Net income		OCI		Into Level 3		Out of Level 3				Purchases		Sales		Issues		Settlements
Assets
Fixed income securities:

Municipal	$	18	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	18
Corporate - public	43		—		1		—		(3)		—		—		(21)		—		—		20
Corporate - privately placed	105		—		2		—		(27)		1		23		(20)		—		—		84
ABS	79		—		—		—		(25)		—		—		(4)		—		(40)		10
MBS	23		—		—		—		—		—		—		—		—		—		23



Total fixed income securities	268		—		3		—		(55)		1		23		(45)		—		(40)		155
Equity securities	410		8		—		—		—		8		6		(27)		—		—		405
Short-term investments	—		—		—		—		—		—		—		—		—		—		—
Other investments	3		—		—		—		—		—		—		—		—		—		3

Assets held for sale	170		1		—		—		—		(9)		7		(3)		—		(2)		164
Total recurring Level 3 assets	851		9		3		—		(55)		—		36		(75)		—		(42)		727
Liabilities

Liabilities held for sale	(463)		(24)		—		—		—		—		—		—		(8)		5		(490)
Total recurring Level 3 liabilities	$	(463)	$	(24)	$	—	$	—	$	—	$	—	$	—	$	—	$	(8)	$	5	$	(490)


Rollforward of Level 3 assets and liabilities held at fair value during the six month period ended June 30, 2021
	Balance as of December 31, 2020		Total gains (losses) included in:				Transfers				Transfers to (from) held for sale										Balance as of June 30, 2021
($ in millions)			Net income		OCI		Into Level 3		Out of Level 3				Purchases		Sales		Issues		Settlements
Assets
Fixed income securities:

Municipal	$	17	$	—	$	1	$	—	$	—	$	—	$	3	$	—	$	—	$	(3)	$	18
Corporate - public	67		—		(2)		—		—		(6)		14		(53)		—		—		20
Corporate - privately placed	63		1		—		10		—		14		16		(20)		—		—		84
ABS	52		—		—		—		(32)		—		34		(4)		—		(40)		10
MBS	27		—		—		—		—		—		—		(4)		—		—		23

Total fixed income securities	226		1		(1)		10		(32)		8		67		(81)		—		(43)		155
Equity securities	304		25		—		—		—		100		10		(34)		—		—		405
Short-term investments	35		—		—		—		—		—		—		—		—		(35)		—
Other investments	—		—		—		—		—		—		3		—		—		—		3

Assets held for sale	267		1		1		3		(1)		(108)		11		(7)		—		(3)		164
Total recurring Level 3 assets	832		27		—		13		(33)		—		91		(122)		—		(81)		727
Liabilities

Liabilities held for sale	(516)		31		—		—		—		—		—		—		(16)		11		(490)
Total recurring Level 3 liabilities	$	(516)	$	31	$	—	$	—	$	—	$	—	$	—	$	—	$	(16)	$	11	$	(490)


Rollforward of Level 3 assets and liabilities held at fair value during the three month period ended June 30, 2020
	Balance as of March 31, 2020		Total gains (losses) included in:				Transfers												Balance as of June 30, 2020
($ in millions)			Net income		OCI		Into Level 3		Out of Level 3		Purchases		Sales		Issues		Settlements
Assets
Fixed income securities:

Municipal	$	19	$	—	$	—	$	—	$	—	$	7	$	—	$	—	$	—	$	26
Corporate - public	36		—		(8)		—		—		15		—		—		—		43
Corporate - privately placed	33		—		—		—		—		21		(2)		—		—		52
ABS	32		2		(2)		43		(25)		5		(10)		—		—		45
MBS	35		—		—		—		—		10		(1)		—		—		44

Total fixed income securities	155		2		(10)		43		(25)		58		(13)		—		—		210
Equity securities	239		5		—		—		—		29		—		—		—		273
Short-term investments	50		—		—		—		(40)		—		—		—		—		10


Assets held for sale	233		9		(3)		26		—		25		(8)		—		(1)		281
Total recurring Level 3 assets	677		16		(13)		69		(65)		112		(21)		—		(1)		774
Liabilities

Liabilities held for sale	(417)		(69)		—		—		—		—		—		(7)		5		(488)
Total recurring Level 3 liabilities	$	(417)	$	(69)	$	—	$	—	$	—	$	—	$	—	$	(7)	$	5	$	(488)


Rollforward of Level 3 assets and liabilities held at fair value during the six months period ended June 30, 2020
	Balance as of December 31, 2019		Total gains (losses) included in:				Transfers												Balance as of June 30, 2020
($ in millions)			Net income		OCI		Into Level 3		Out of Level 3		Purchases		Sales		Issues		Settlements
Assets
Fixed income securities:

Municipal	$	22	$	—	$	(1)	$	—	$	—	$	7	$	(1)	$	—	$	(1)	$	26
Corporate - public	36		—		(8)		—		—		15		—		—		—		43
Corporate - privately placed	32		—		(1)		—		—		23		(2)		—		—		52
ABS	49		—		(2)		55		(49)		19		—		—		(27)		45
MBS	35		—		—		—		—		10		(1)		—		—		44



Total fixed income securities	174		—		(12)		55		(49)		74		(4)		—		(28)		210
Equity securities	255		(12)		—		—		—		30		—		—		—		273
Short-term investments	25		—		—		—		(25)		10		—		—		—		10


Assets held for sale	284		(3)		(3)		25		(25)		26		(18)		—		(5)		281
Total recurring Level 3 assets	738		(15)		(15)		80		(99)		140		(22)		—		(33)		774
Liabilities

Liabilities held for sale	(462)		(21)		—		—		—		—		—		(15)		10		(488)
Total recurring Level 3 liabilities	$	(462)	$	(21)	$	—	$	—	$	—	$	—	$	—	$	(15)	$	10	$	(488)


Total Level 3 gains (losses) included in net income
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2021		2020		2021		2020
Net investment income	$	(5)	$	—	$	(6)	$	(14)
Realized capital gains (losses)	13		7		32		2

Transfers into Level 3 during the three and six months ended June 30, 2021 and 2020 included situations where a quote was not provided by the Company’s independent third-party valuation service provider and as a result the price was stale or had been replaced with a broker quote where the inputs had not been corroborated to be market observable resulting in the security being classified as Level 3.

Transfers out of Level 3 during the three and six months ended June 30, 2021 and 2020 included situations where a broker quote was used in the prior period and a quote became available from the Company’s independent third-party valuation service provider in the current period. A quote utilizing the new pricing source was not available as of the prior period, and any gains or losses related to the change in valuation source for individual securities were not significant.


Valuation changes included in net income and OCI for Level 3 assets and liabilities held as of June 30,
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Assets
Fixed income securities:

Corporate - public	$	—	$	—	$	—	$	—
Corporate - privately placed	—		—		—		—


Total fixed income securities	—		—		—		—
Equity securities	$	5	$	5	$	22	$	(12)


Assets held for sale	1		8		1		(4)
Total recurring Level 3 assets	$	6	$	13	$	23	$	(16)
Liabilities

Liabilities held for sale	$	(24)	$	(69)	$	31	$	(21)
Total recurring Level 3 liabilities	(24)		(69)		31		(21)
Total included in net income	$	(18)	$	(56)	$	54	$	(37)

Components of net income
Net investment income	$	(5)	$	—	$	(6)	$	(14)
Realized capital gains (losses)	10		5		28		2
Total included in net income	$	5	$	5	$	22	$	(12)

Assets
Municipal	$	—	$	—	$	1	$	(1)
Corporate - public	1		(7)		(2)		(7)
Corporate - privately placed	2		—		—		(1)
ABS	—		(3)		—		(2)
Assets held for sale	—		(2)		1		(2)

Changes in unrealized net capital gains and losses reported in OCI	$	3	$	(12)	$	—	$	(13)


Financial instruments not carried at fair value
($ in millions)		June 30, 2021				December 31, 2020
Financial assets	Fair value level	Amortized cost, net		Fair value		Amortized cost, net		Fair value
Mortgage loans	Level 3	$	786	$	831	$	746	$	792
Bank loans	Level 3	1,584		1,606		772		803
Agent loans	Level 3	581		583		—		—
Assets held for sale	Level 3	3,039		3,239		4,206		4,440

Financial liabilities	Fair value level	Carrying value (1)		Fair value		Carrying value (1)		Fair value
Contractholder funds on investment contracts	Level 3	$	20	$	20	$	—	$	—
Long-term debt	Level 2	7,996		9,311		7,825		9,489
Liability for collateral	Level 2	1,495		1,495		914		914
Liabilities held for sale (2)	Level 3	7,475		8,489		8,130		9,424

(1)Represents the amounts reported on the Condensed Consolidated Statements of Financial Position.

(2)Includes certain liabilities for collateral measured at Level 2 fair value as of June 30, 2021 and December 31, 2020.