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Invested Assets and Investment Income (Tables)
 12 Months Ended
Dec. 31, 2020
Text block [abstract]  
Schedule of Carrying Values and Fair Values of Invested Assets
(a) Carrying values and fair values of invested assets
 
As at December 31, 2020
 FVTPL
(1)
  AFS
(2)
  Other
(3)
  Total carrying
value
(4)
  Total fair
value
(5)
 
Cash and short-term securities
(6)
 
$
2,079
 
 
$
18,314
 
 
$
5,774
 
 
$
26,167
 
 
$
26,167
 
Debt securities
(7)
                    
Canadian government and agency
 
 
20,667
 
 
 
4,548
 
 
 
–
 
 
 
25,215
 
 
 
25,215
 
U.S. government and agency
 
 
11,449
 
 
 
19,787
 
 
 
–
 
 
 
31,236
 
 
 
31,236
 
Other government and agency
 
 
19,732
 
 
 
4,613
 
 
 
–
 
 
 
24,345
 
 
 
24,345
 
Corporate
 
 
128,297
 
 
 
6,566
 
 
 
–
 
 
 
134,863
 
 
 
134,863
 
Mortgage/asset-backed securities
 
 
2,916
 
 
 
149
 
 
 
–
 
 
 
3,065
 
 
 
3,065
 
Public equities
(8)
 
 
22,071
 
 
 
1,651
 
 
 
–
 
 
 
23,722
 
 
 
23,722
 
Mortgages
 
 
–
 
 
 
–
 
 
 
50,207
 
 
 
50,207
 
 
 
54,230
 
Private placements
 
 
–
 
 
 
–
 
 
 
40,756
 
 
 
40,756
 
 
 
47,890
 
Policy loans
 
 
–
 
 
 
–
 
 
 
6,398
 
 
 
6,398
 
 
 
6,398
 
Loans to Bank clients
 
 
–
 
 
 
–
 
 
 
1,976
 
 
 
1,976
 
 
 
1,982
 
Real estate
                    
Own use property
(
9
)
 
 
–
 
 
 
–
 
 
 
1,850
 
 
 
1,850
 
 
 
3,017
 
Investment property
 
 
–
 
 
 
–
 
 
 
10,982
 
 
 
10,982
 
 
 
10,982
 
Other invested assets
                    
Alternative long-duration assets
(
10
),(1
1
)
 
 
16,183
 
 
 
88
 
 
 
9,901
 
 
 
26,172
 
 
 
27,029
 
Various other
(1
2
)
 
 
145
 
 
 
–
 
 
 
3,878
 
 
 
4,023
 
 
 
4,023
 
Total invested assets
 
$
223,539
 
 
$
55,716
 
 
$
131,722
 
 
$
410,977
 
 
$
424,164
 
      
As at December
 31, 2019
 FVTPL
(1)
  AFS
(2)
  Other
(3)
  Total carrying
value
(4)
  Total fair
value
(5)
 
Cash and short-term securities
(6)
 $1,859  $13,084  $5,357  $20,300  $20,300 
Debt securities
(7)
                    
Canadian government and agency
  18,582   4,779   –   23,361   23,361 
U.S. government and agency
  11,031   17,221   –   28,252   28,252 
Other government and agency
  17,383   4,360   –   21,743   21,743 
Corporate
  116,044   5,285   –   121,329   121,329 
Mortgage/asset-backed securities
  3,267   170   –   3,437   3,437 
Public equities
(8)

  20,060   2,791   –   22,851   22,851 
Mortgages
  –   –   49,376   49,376   51,450 
Private placements
  –   –   37,979   37,979   41,743 
Policy loans
  –   –   6,471   6,471   6,471 
Loans to Bank clients
  –   –   1,740   1,740   1,742 
Real estate
                    
Own use property
(9)
  –   –   1,926   1,926   3,275 
Investment property
  –   –   11,002   11,002   11,002 
Other invested assets
                    
Alternative long-duration assets
(10),(11)
  15,252   99   9,492   24,843   25,622 
Various other
(12)
  149   –   3,768   3,917   3,918 
Total invested assets
 $  203,627  $  47,789  $  127,111  $  378,527  $  386,496 
 
(1)
FVTPL classification was elected for securities backing insurance contract liabilities to substantially reduce any accounting mismatch arising from changes in the fair value of these assets and changes in the value of the related insurance contract liabilities. If this election had not been made and instead the AFS classification was selected, there would be an accounting mismatch because changes in insurance contract liabilities are recognized in net income rather than in OCI.
(2)
Securities that are designated as AFS are not actively traded by the Company, but sales do occur as circumstances warrant. Such sales result in a reclassification of any accumulated unrealized gain (loss) in AOCI to net income as a realized gain (loss). 
(3)
Primarily includes assets classified as loans and carried at amortized cost, own use properties, investment properties, equity method accounted investments, oil and gas investments, and leveraged leases. Refer to note 1(e) for further details regarding accounting policy. 
(4)
Fixed income invested assets above include debt securities, mortgages, private placements and approximately
 $246 (2019 – $179)
 
of other invested assets, which primarily have contractual cash flows that qualify as Solely Payment of Principal and Interest (“SPPI”). Fixed income invested assets which do not have SPPI qualifying cash flows as at December 31, 2020 include debt securities, private placements and other invested assets with fair values of
$94, $211 and $380, respectively (2019 – $98, $257 and $373). The change in the fair value of these invested assets during the year was $44 (2019 – $71).
(5)
The methodologies used in determining fair values of invested assets are described in note 1(c) and note 3(g).  
(6)
Includes short-term securities with maturities of less than one year at acquisition amounting to $7,062 (2019 – $3,806), cash equivalents with maturities of less than 90 days at acquisition amounting to $13,331 (2019 – $11,136) and cash of $5,774 (2019 – $5,358).
(7)
Debt securities include securities which were acquired with maturities of less than one year and less than 90 days of $1,971 and $129, respectively (2019 – $537 and $69).
(8)
Includes $229 (2019 – $12) of public equities that are managed in conjunction with the Company’s alternative long duration asset (“ALDA”) strategy. 
(9)
Includes accumulated depreciation of $376 (2019 – $414).
(10)
Includes investments in private equity of
 $7,954, infrastructure of $9,127, oil and gas of $2,296, timber and agriculture of $4,819 and various other invested assets of $1,976 (2019 – $6,396, $8,854, $3,245, $4,669 and $1,679, respectively). In 2019, a group of investments in hydro-electric power of $418 was sold.
(11)
In 2019, the Company sold $1,112 of North American Private Equity investments to Manulife Private Equity Partners, L.P, a
closed-end
pooled fund of funds. The Company provides management services to the fund.
(12)
Includes $3,371 (2019 – $3,371) of leveraged leases. Refer to note 1(e) regarding accounting policy.
Schedule of Other Invested Assets Include Investments in Associates and Joint Ventures Accounted Using Equity Method
(b) Equity method accounted invested assets
Other invested assets include investments in associates and joint ventures which are accounted for using the equity method of accounting as presented in the following table.
 
  
2020
     2019 
As at December 31,
 Carrying
value		  % of total     Carrying
value		  % of total 
Leveraged leases
 
$
3,371
 
 
 
40
 
     $3,371   43 
Timber and agriculture
 
 
694
 
 
 
8
 
      668   9 
Real estate
 
 
1,187
 
 
 
14
 
      1,031   13 
Other
 
 
3,222
 
 
 
38
 
      2,716   35 
Total
 
$
  8,474
 
 
 
100
 
     $  7,786   100 
The Company’s share of profit and dividends from these investments for the year ended December 31, 2020 were $315 and $2, respectively (2019 – $369 and $2).
Schedule of Investment Income
(c) Investment income
 
For the year ended December 31, 2020
 FVTPL  AFS  Other
(1)
  Total 
Cash and short-term securities
                
Interest income
 
$
24
 
 
$
145
 
 
$
–
 
 
$
169
 
Gains (losses)
(2)
 
 
(24
) 
 
 
(112
) 
 
 
–
 
 
 
(136
) 
Debt securities
                
Interest income
 
 
5,805
 
 
 
692
 
 
 
–
 
 
 
6,497
 
Gains (losses)
(2)
 
 
10,739
 
 
 
2,785
 
 
 
–
 
 
 
13,524
 
Impairment loss, net
 
 
(113
) 
 
 
(6
) 
 
 
–
 
 
 
(119
) 
Public equities
                
Dividend income
 
 
517
 
 
 
38
 
 
 
–
 
 
 
555
 
Gains (losses)
(2)
 
 
2,020
 
 
 
21
 
 
 
–
 
 
 
2,041
 
Impairment loss, net
 
 
–
 
 
 
(54
) 
 
 
–
 
 
 
(54
) 
Mortgages
                
Interest income
 
 
–
 
 
 
–
 
 
 
1,837
 
 
 
1,837
 
Gains (losses)
(2)
 
 
–
 
 
 
–
 
 
 
86
 
 
 
86
 
Provision, net
 
 
–
 
 
 
–
 
 
 
(18
) 
 
 
(18
) 
Private placements
                
Interest income
 
 
–
 
 
 
–
 
 
 
1,883
 
 
 
1,883
 
Gains (losses)
(2)
 
 
–
 
 
 
–
 
 
 
(18
) 
 
 
(18
) 
Impairment loss, net
 
 
–
 
 
 
–
 
 
 
(88
) 
 
 
(88
) 
Policy loans
 
 
–
 
 
 
–
 
 
 
390
 
 
 
390
 
Loans to Bank clients
                
Interest income
 
 
–
 
 
 
–
 
 
 
72
 
 
 
72
 
Provision, net
 
 
–
 
 
 
–
 
 
 
(2
) 
 
 
(2
) 
Real estate
                
Rental income, net of depreciation
(3)
 
 
–
 
 
 
–
 
 
 
468
 
 
 
468
 
Gains (losses)
(2)
 
 
–
 
 
 
–
 
 
 
(18
) 
 
 
(18
) 
Derivatives
                
Interest income, net
 
 
924
 
 
 
–
 
 
 
(31
) 
 
 
893
 
Gains (losses)
(2)
 
 
6,501
 
 
 
–
 
 
 
28
 
 
 
6,529
 
Other invested assets
                
Interest income
 
 
–
 
 
 
–
 
 
 
72
 
 
 
72
 
Oil and gas, timber, agriculture and other income
 
 
–
 
 
 
–
 
 
 
1,435
 
 
 
1,435
 
Gains (losses)
(2)
 
 
(210
) 
 
 
1
 
 
 
32
 
 
 
(177
) 
Impairment loss, net
 
 
(9
) 
 
 
(16
) 
 
 
(396
) 
 
 
(421
) 
Total investment income
 
$
26,174
 
 
$
3,494
 
 
$
5,732
 
 
$
35,400
 
Investment income
                
Interest income
 
$
6,753
 
 
$
837
 
 
$
4,223
 
 
$
11,813
 
Dividend, rental and other income
 
 
517
 
 
 
38
 
 
 
1,903
 
 
 
2,458
 
Impairments, provisions and recoveries, net
 
 
(123
) 
 
 
(76
) 
 
 
(504
) 
 
 
(703
) 
Other
 
 
241
 
 
 
2,685
 
 
 
(61
) 
 
 
2,865
 
 
 
 
7,388
 
 
 
3,484
 
 
 
5,561
 
 
 
16,433
 
Realized and unrealized gains (losses) on assets supporting insurance and investment contract liabilities and on macro equity hedges
                
Debt securities
 
 
10,747
 
 
 
1
 
 
 
–
 
 
 
10,748
 
Public equities
 
 
1,908
 
 
 
9
 
 
 
–
 
 
 
1,917
 
Mortgages
 
 
–
 
 
 
–
 
 
 
86
 
 
 
86
 
Private placements
 
 
–
 
 
 
–
 
 
 
(47
) 
 
 
(47
) 
Real estate
 
 
–
 
 
 
–
 
 
 
1
 
 
 
1
 
Other invested assets
 
 
(318
) 
 
 
–
 
 
 
103
 
 
 
(215
) 
Derivatives, including macro equity hedging program
 
 
6,449
 
 
 
–
 
 
 
28
 
 
 
6,477
 
 
 
 
18,786
 
 
 
10
 
 
 
171
 
 
 
18,967
 
Total investment income
 
$
  26,174
 
 
$
  3,494
 
 
$
  5,732
 
 
$
  35,400
 
 
For the year ended December 31, 2019 FVTPL  AFS  Other
(1)
  Total 
Cash and short-term securities
                
Interest income
 $32  $281  $–  $313 
Gains (losses)
(2)
  11   (29)   –   (18) 
Debt securities
                
Interest income
  5,557   783   –   6,340 
Gains (losses)
(2)
  11,525   472   –   11,997 
Recovery (impairment loss), net
  (9)   1   –   (8) 
Public equities
                
Dividend income
  551   69   –   620 
Gains (losses)
(2)
  3,079   109   –   3,188 
Impairment loss, net
  –   (24)   –   (24) 
Mortgages
                
Interest income
  –   –   1,951   1,951 
Gains (losses)
(2)
  –   –   26   26 
Provision, net
  –   –   31   31 
Private placements
                
Interest income
  –   –   1,782   1,782 
Gains (losses)
(2)
  –   –   (62)   (62) 
Impairment loss, net
  –   –   (35)   (35) 
Policy loans
  –   –   391   391 
Loans to Bank clients
                
Interest income
  –   –   87   87 
Provision, net
  –   –   (1)   (1) 
Real estate
                
Rental income, net of depreciation
(3)
  –   –   505   505 
Gains (losses)
(2)
  –   –   508   508 
Derivatives
                
Interest income, net
  579   –   (24)   555 
Gains (losses)
(2)
  2,653   –   (6)   2,647 
Other invested assets
                
Interest income
  –   –   69   69 
Oil and gas, timber, agriculture and other income
  –   –   1,862   1,862 
Gains (losses)
(2)
  742   (1)   35   776 
Recovery, net

  –   –   93   93 
Total investment income
 $  24,720  $    1,661  $    7,212  $  33,593 
Investment income
                
Interest income
 $6,168  $1,064  $4,256  $11,488 
Dividend, rental and other income
  552   69   2,367   2,988 
Impairments, provisions and recoveries, net
  (9)   (23)   88   56 
Other
  265   539   57   861 
 
  6,976   1,649   6,768   15,393 
Realized and unrealized gains (losses) on assets supporting insurance and investment contract liabilities and on macro equity hedges
                
Debt securities
  11,521   7   –   11,528 
Public equities
  2,865   5   –   2,870 
Mortgages
  –   –   26   26 
Private placements
  –   –   (62)   (62) 
Real estate
  –   –   514   514 
Other invested assets
  776   –   (28)   748 
Derivatives, including macro equity hedging program
  2,582   –   (6)   2,576 
 
  17,744   12   444   18,200 
Total investment income
 $24,720  $1,661  $7,212  $33,593 
 
(1)
Primarily includes investment income on loans carried at amortized cost, own use properties, investment properties, derivative and hedging instruments in cash flow hedging relationships, equity method accounted investments, oil and gas investments, and leveraged leases.
(2)
Includes net realized and unrealized gains (losses) for financial instruments at FVTPL, real estate investment properties, and other invested assets measured at fair value. Also includes net realized gains (losses) for financial instruments at AFS and other invested assets carried at amortized cost.
(3)
Rental income from investment properties is net of direct operating expenses.
Summary of Total Investment Expenses
The following table presents total investment expenses.
 
For the years ended December 31,
 
2020
  2019 
Related to invested assets
 
$
649
 
 $617 
Related to segregated, mutual and other funds
 
 
1,138
 
  1,131 
Total investment expenses
 
$
  1,787
 
 $  1,748 
Summary of Rental Income and Direct Operating Expenses of Investment Properties
The following table presents the rental income and direct operating expenses of investment properties.
 
For the years ended December 31,
 
2020
  2019 
Rental income from investment properties
 
$
874
 
 $864 
Direct operating expenses of rental investment properties
 
 
  (491
) 
  (464) 
Total
 
$
383
 
 $  400 
Summary of Securitized Assets and Secured Borrowing Liabilities
Securitized assets and secured borrowing liabilities
 
As at December
 31, 2020		  Securitized assets     
Securitization program  Securitized
mortgages		   Restricted cash and
short-term securities		   Total   Secured borrowing
liabilities
(2)
 
HELOC securitization
(1)
  
$
2,356
 
  
$
–
 
  
$
2,356
 
  
$
2,250
 
CMB securitization
  
 
2,273
 
  
 
–
 
  
 
2,273
 
  
 
2,332
 
Total
  
$
4,629
 
  
$
–
 
  
$
4,629
 
  
$
4,582
 
   
As at December
 31, 2019
  Securitized assets     
Securitization program  Securitized
mortgages		   Restricted cash and
short-term securities		   Total   Secured borrowing
liabilities
(2)
 
HELOC securitization
(1)
  $2,285   $8   $2,293   $  2,250 
CMB securitization
   1,620    –    1,620    1,632 
Total
  $  3,905   $  8   $  3,913   $  3,882 
 
(1)
Manulife Bank, a subsidiary, securitizes a portion of its HELOC receivables through Platinum Canadian Mortgage Trust (“PCMT”), and Platinum Canadian Mortgage Trust II (“PCMT II”). PCMT funds the purchase of the
co-ownership
interests from Manulife Bank by issuing term notes collateralized by an underlying pool of CMHC insured HELOCs to institutional investors. PCMT II funds the purchase of the
co-ownership
interests from Manulife Bank by issuing term notes collateralized by an underlying pool of uninsured HELOCs to institutional investors. The restricted cash balance for the HELOC securitization reflects a cash reserve fund established in relation to the transactions. The reserve will be drawn upon only in the event of insufficient cash flows from the underlying HELOCs to satisfy the secured borrowing liability.
(2)
Secured borrowing liabilities primarily comprise of Series
2011-1
notes with a floating rate which are expected to mature on December 15, 2021, and the Series
2016-1
notes with a floating rate which are expected to mature on May 15, 2022. Manulife Bank also securitizes insured amortizing mortgages under the National Housing Act Mortgage-Backed Securities (“NHA MBS”) program sponsored by CMHC. Manulife Bank participates in CMB programs by selling NHA MBS securities to Canada Housing Trust (“CHT”), as a source of fixed rate funding.
Summary of Invested Assets and Segregated Funds Net Assets, Measured at Fair Value
The following table presents the fair values of invested assets and segregated funds net assets measured at fair value categorized by the fair value hierarchy.
 
As at December
 31, 2020		 Total fair value  Level 1  Level 2  Level 3 
Cash and short-term securities
                
FVTPL
 
$
2,079
 
 
$
–
 
 
$
2,079
 
 
$
–
 
AFS
 
 
18,314
 
 
 
–
 
 
 
18,314
 
 
 
–
 
Other
 
 
5,774
 
 
 
5,774
 
 
 
–
 
 
 
–
 
Debt securities
                
FVTPL
                
Canadian government and agency
 
 
20,667
 
 
 
–
 
 
 
20,667
 
 
 
–
 
U.S. government and agency
 
 
11,449
 
 
 
–
 
 
 
11,449
 
 
 
–
 
Other government and agency
 
 
19,732
 
 
 
–
 
 
 
19,732
 
 
 
–
 
Corporate
 
 
128,297
 
 
 
–
 
 
 
127,787
 
 
 
510
 
Residential mortgage-backed securities
 
 
9
 
 
 
–
 
 
 
9
 
 
 
–
 
Commercial mortgage-backed securities
 
 
1,172
 
 
 
–
 
 
 
1,172
 
 
 
–
 
Other asset-backed securities
 
 
1,735
 
 
 
–
 
 
 
1,690
 
 
 
45
 
AFS
                
Canadian government and agency
 
 
4,548
 
 
 
–
 
 
 
4,548
 
 
 
–
 
U.S. government and agency
 
 
19,787
 
 
 
–
 
 
 
19,787
 
 
 
–
 
Other government and agency
 
 
4,613
 
 
 
–
 
 
 
4,613
 
 
 
–
 
Corporate
 
 
6,566
 
 
 
–
 
 
 
6,563
 
 
 
3
 
Residential mortgage-backed securities
 
 
1
 
 
 
–
 
 
 
1
 
 
 
–
 
Commercial mortgage-backed securities
 
 
93
 
 
 
–
 
 
 
93
 
 
 
–
 
Other asset-backed securities
 
 
55
 
 
 
–
 
 
 
55
 
 
 
–
 
Public equities
                
FVTPL
 
 
22,071
 
 
 
22,071
 
 
 
–
 
 
 
–
 
AFS
 
 
1,651
 
 
 
1,651
 
 
 
–
 
 
 
–
 
Real estate – investment property
(1)
 
 
10,982
 
 
 
–
 
 
 
–
 
 
 
10,982
 
Other invested assets
(2)
 
 
19,149
 
 
 
100
 
 
 
–
 
 
 
19,049
 
Segregated funds net assets
(3)
 
 
367,436
 
 
 
327,437
 
 
 
35,797
 
 
 
4,202
 
Total
 
$
666,180
 
 
$
357,033
 
 
$
274,356
 
 
$
34,791
 
     
As at December
 31, 2019
 Total fair value  Level 1  Level 2  Level 3 
Cash and short-term securities
                
FVTPL
 $1,859  $–  $1,859  $– 
AFS
  13,084   –   13,084   – 
Other
  5,357   5,357   –   – 
Debt securities
                
FVTPL
                
Canadian government and agency
  18,582   –   18,582   – 
U.S. government and agency
  11,031   –   11,031   – 
Other government and agency
  17,383   –   17,383   – 
Corporate
  116,044   –   115,411   633 
Residential mortgage-backed securities
  13   –   13   – 
Commercial mortgage-backed securities
  1,271   –   1,271   – 
Other asset-backed securities
  1,983   –   1,983   – 
AFS
                
Canadian government and agency
  4,779   –   4,779   – 
U.S. government and agency
  17,221   –   17,221   – 
Other government and agency
  4,360   –   4,360   – 
Corporate
  5,285   –   5,270   15 
Residential mortgage-backed securities
  1   –   1   – 
Commercial mortgage-backed securities
  102   –   102   – 
Other asset-backed securities
  67   –   67   – 
Public equities
                
FVTPL
  20,060   20,060   –   – 
AFS
  2,791   2,788   3   – 
Real estate – investment property
(1)
  11,002   –   –   11,002 
Other invested assets
(2)
  18,194   91   –   18,103 
Segregated funds net assets
(3)
  343,108   303,567   35,029   4,512 
Total
 $  613,577  $   331,863  $  247,449  $  34,265 
 
(1)
For investment properties, the significant unobservable inputs are capitalization rates (ranging from 2.75% to 8.50% during the year and ranging from 2.75% to 8.75% during 2019) and terminal capitalization rates (ranging from 3.25% to 9.25% during the year and ranging from 3.80% to 9.25% during 2019). Holding other factors constant, a lower capitalization or terminal capitalization rate will tend to increase the fair value of an investment property. Changes in fair value based on variations in unobservable inputs generally cannot be extrapolated because the relationship between the directional changes of each input is not usually linear.
(2)
Other invested assets measured at fair value are held primarily in infrastructure and timber sectors. The significant inputs used in the valuation of the Company’s infrastructure investments are primarily future distributable cash flows, terminal values and discount rates. Holding other factors constant, an increase to future distributable cash flows or terminal values would tend to increase the fair value of an infrastructure investment, while an increase in the discount rate would have the opposite effect. Discount rates during the year ranged from 7.00% to 15.6% (2019 – ranged from 7.00% to 16.5%). Disclosure of distributable cash flow and terminal value ranges are not meaningful given the disparity in estimates by project. The significant inputs used in the valuation of the Company’s investments in timberland are timber prices and discount rates. Holding other factors constant, an increase to timber prices would tend to increase the fair value of a timberland investment, while an increase in the discount rates would have the opposite effect. Discount rates during the year ranged from 5.0% to 7.0% (2019 – ranged from 5.0% to 7.0%). A range of prices for timber is not meaningful as the market price depends on factors such as property location and proximity to markets and export yards.
(3)
Segregated funds net assets are measured at fair value. The Company’s Level 3 segregated funds assets are predominantly in investment properties and timberland properties valued as described above.
Summary of Fair Values and the Fair Value Hierarchy
The following table presents fair value of invested assets not measured at fair value by the fair value hierarchy.
 
As at December
 31, 2020		 
Carrying
value
  Fair value  Level 1  Level 2  Level 3 
Mortgages
(1)
 
$
50,207
 
 
$
54,230
 
 
$
–
 
 
$
–
 
 
$
54,230
 
Private placements
(2)
 
 
40,756
 
 
 
47,890
 
 
 
–
 
 
 
41,398
 
 
 
6,492
 
Policy loans
(3)
 
 
6,398
 
 
 
6,398
 
 
 
–
 
 
 
6,398
 
 
 
–
 
Loans to Bank clients
(4)
 
 
1,976
 
 
 
1,982
 
 
 
–
 
 
 
1,982
 
 
 
–
 
Real estate–own use property
(5)
 
 
1,850
 
 
 
3,017
 
 
 
–
 
 
 
–
 
 
 
3,017
 
Other invested assets
(6)
 
 
11,046
 
 
 
11,903
 
 
 
128
 
 
 
–
 
 
 
11,775
 
Total invested assets disclosed at fair value
 
$
112,233
 
 
$
125,420
 
 
$
128
 
 
$
49,778
 
 
$
75,514
 
      
As at December 31, 2019 
Carrying
value
  Fair value  Level 1  Level 2  Level 3 
Mortgages
(1)
 $49,376  $51,450  $–  $–  $51,450 
Private placements
(2)
  37,979   41,743   –   36,234   5,509 
Policy loans
(3)
  6,471   6,471   –   6,471   – 
Loans to Bank clients
(4)
  1,740   1,742   –   1,742   – 
Real estate–own use property
(5)
  1,926   3,275   –   –   3,275 
Other invested assets
(6)
  10,566   11,346   165   –   11,181 
Total invested assets disclosed at fair value
 $  108,058  $  116,027  $  165  $  44,447  $  71,415 
 
(1)
Fair value of commercial mortgages is determined through an internal valuation methodology using both observable and unobservable inputs. Unobservable inputs include credit assumptions and liquidity spread adjustments. Fair value of fixed-rate residential mortgages is determined using the discounted cash flow method. Inputs used for valuation are primarily comprised of prevailing interest rates and prepayment rates, if applicable. Fair value of variable-rate residential mortgages is assumed to be their carrying value.
(2)
Fair value of private placements is determined through an internal valuation methodology using both observable and unobservable inputs. Unobservable inputs include credit assumptions and liquidity spread adjustments. Private placements are classified within Level 2 unless the liquidity adjustment constitutes a significant price impact, in which case the securities are classified as Level 3.
(3)
Fair value of policy loans is equal to their unpaid principal balances.
(4)
Fair value of fixed-rate loans to Bank clients is determined using the discounted cash flow method. Inputs used for valuation are primarily comprised of current interest rates. Fair value of variable-rate loans is assumed to be their carrying value.
(5)
Fair value of own use real estate and the fair value hierarchy are determined in accordance with the methodologies described for real estate – investment property in note 1.
(6)
Primarily include leveraged leases, oil and gas properties and equity method accounted other invested assets. Fair value of leveraged leases is disclosed at their carrying values as fair value is not routinely calculated on these investments. Fair value for oil and gas properties is determined using external appraisals based on discounted cash flow methodology. Inputs used in valuation are primarily comprised of forecasted price curves, planned production, as well as capital expenditures, and operating costs. Fair value of equity method accounted other invested assets is determined using a variety of valuation techniques including discounted cash flows and market comparable approaches. Inputs vary based on the specific investment.
Summary of Invested Assets and Segregated Funds Net Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3)
The following table presents a roll forward for invested assets, derivatives and segregated funds net assets measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2020 and 2019.
 
For the year ended
December 31, 2020
 Balance,
January 1,
2020		  Total
gains
(losses)
included
in net
income
(1)
  Total
gains
(losses)
included
in AOCI
(2)
  Purchases  Sales  Settlements  
Transfer
in
(3),(4)
  

Transfer
out
(3),(4)
  Currency
movement		  Balance,
December 31,
2020		  Change in
unrealized
gains
(losses) on
assets still
held		 
Debt securities
                                            
FVTPL
                                            
Corporate
 
$
633
 
 
$
4
 
 
$
–
 
 
$
54
 
 
$
(272
) 
 
$
(1
) 
 
$
151
 
 
$
(50
) 
 
$
(9
) 
 
$
510
 
 
$
105
 
Other securitized assets
  
– 
 
 
 
(8)
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
(1)
 
 
 
55
 
 
 
–
 
 
 
(1)
 
 
 
45
 
 
 
– 
 
AFS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
15
 
 
 
(6
) 
 
 
2
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
5
 
 
 
(13
) 
 
 
–
 
 
 
3
 
 
 
–
 
Real estate – investment property
 
 
11,002
 
 
 
(255
) 
 
 
–
 
 
 
572
 
 
 
(318
) 
 
 
–
 
 
 
47
 
 
 
–
 
 
 
(66
) 
 
 
10,982
 
 
 
(300
) 
Other invested assets
 
 
18,103
 
 
 
(401
) 
 
 
(49
) 
 
 
3,162
 
 
 
(1,076
) 
 
 
(638
) 
 
 
92
 
 
 
(3
) 
 
 
(141
) 
 
 
19,049
 
 
 
(902
) 
Total invested assets
 
 
29,753
 
 
 
(666
) 
 
 
(47
) 
 
 
3,788
 
 
 
(1,666
) 
 
 
(640
) 
 
 
350
 
 
 
(66
) 
 
 
(217
) 
 
 
30,589
 
 
 
(1,097
) 
Derivatives
 
 
1,456
 
 
 
2,953
 
 
 
(18
) 
 
 
12
 
 
 
–
 
 
 
(1,165
) 
 
 
–
 
 
 
342
 
 
 
(137
) 
 
 
3,443
 
 
 
   2,033
 
Segregated funds net assets
 
 
4,512
 
 
 
(6
) 
 
 
–
 
 
 
(84
) 
 
 
(149
) 
 
 
(26
) 
 
 
2
 
 
 
(3
) 
 
 
(44
) 
 
 
4,202
 
 
 
45
 
Total
 
$
  35,721
 
 
$
  2,281
 
 
$
  (65
) 
 
$
  3,716
 
 
$
  (1,815
) 
 
$
  (1,831
) 
 
$
  352
 
 
$
  273
 
 
$
  (398
) 
 
$
  38,234
 
 
$
981
 
 
For the year ended
December 31, 2019		 Balance,
January 1,
2019		  Total
gains
(losses)
included
in net
income
(1)
  Total
gains
(losses)
included
in AOCI
(2)
  Purchases  Sales  Settlements  
Transfer
in
(3),(4)
  

Transfer
out
(3),(4)
  Currency
movement		  Balance,
December 31,
2019		  Change in
unrealized
gains
(losses)
on assets
still held		 
Debt securities
                                            
FVTPL
                                            
Other government & agency
 $180  $1  $–  $16  $(18)  $–  $–  $(178)  $(1)  $–  $– 
Corporate
  784   35   –   43   (88)   (18)   514   (604)   (33)   633   47 
Residential mortgage-backed securities
  7   –   –   –   (1)   –   –   (6)   –   –   – 
AFS
                                            
Other government & agency
  37   1   –   5   (12)   –   –   (31)   –   –   – 
Corporate
  122   1   –   13   (21)   (4)   –   (94)   (2)   15   – 
Commercial mortgage-backed securities
  –   –   –   37   –   –   –   (37)   –   –   – 
Public equities
                                            
FVTPL
  3   1,739   –   –   (1,679)   –   –   –   (63)   –   1,510 
Real estate – investment property
  10,761   506   –   440   (457)   –   15   –   (263)   11,002   468 
Other invested assets
  17,562   (1,028)   2   3,401   (144)   (1,031)   2   –   (661)   18,103   (923) 
Total invested assets
  29,456   1,255   2   3,955   (2,420)   (1,053)   531   (950)   (1,023)   29,753   1,102 
Derivatives
  106   1,884   44   42   –   (685)   135   (34)   (36)   1,456   1,423 
Segregated funds net assets
  4,447       148   –   193   (140)   (30)   –   –   (106)   4,512   111 
Total
 $  34,009  $  3,287  $  46  $  4,190  $  (2,560)  $  (1,768)  $  666  $  (984)  $  (1,165)  $  35,721  $  2,636 
 
(1)
These amounts are included in net investment income on the Consolidated Statements of Income except for the amount related to segregated funds net assets, where the amount is recorded in changes in segregated funds net assets, refer to note 22.
(2)
These amounts are included in AOCI on the Consolidated Statements of Financial Position.
(3)
The Company uses fair values of the assets at the beginning of the year for assets transferred into and out of Level 3 except for derivatives, refer to footnote 4 below.
(4)
For derivatives transfer into or out of Level 3, the Company uses fair value at the end of the year and at the beginning of the year, respectively.