Investments

12 Months Ended

Dec. 31, 2015

Investments, Debt and Equity Securities [Abstract]

Investments

8. Investments

See Note 10 for information about the fair value hierarchy for investments and the related valuation methodologies.

Investment Risks and Uncertainties

Investments are exposed to the following primary sources of risk: credit, interest rate, liquidity, market valuation, currency and real estate risk. The financial statement risks, stemming from such investment risks, are those associated with the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition of impairments, the recognition of income on certain investments and the potential consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented within the consolidated financial statements.

The determination of valuation allowances and impairments is highly subjective and is based upon periodic evaluations and assessments of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available.

The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, asset-backed securities (“ABS”), certain structured investment transactions and FVO and trading securities) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned.

Fixed Maturity and Equity Securities AFS

Fixed Maturity and Equity Securities AFS by Sector

The following table presents the fixed maturity and equity securities AFS by sector. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities and non-redeemable preferred stock is reported within equity securities. Included within fixed maturity securities are structured securities including RMBS, ABS and commercial mortgage-backed securities (“CMBS”).

	December 31, 2015											December 31, 2014
	Cost or Amortized Cost		Gross Unrealized							Estimated Fair Value		Cost or Amortized Cost		Gross Unrealized							Estimated Fair Value
			Gains		Temporary Losses		OTTI Losses							Gains		Temporary Losses		OTTI Losses
										(In millions)
Fixed maturity securities
U.S. corporate	$	96,466	$	6,583	$	2,255	$	—		$	100,794	$	96,235	$	10,343	$	624	$	—		$	105,954
U.S. Treasury and agency	56,499		5,373		226		—			61,646		54,654		6,892		30		—			61,516
Foreign corporate	56,003		3,019		1,822		2			57,198		57,695		4,651		664		7			61,675
Foreign government	45,451		5,269		221		—			50,499		47,327		5,500		161		—			52,666
RMBS	37,914		1,366		424		59			38,797		38,064		2,102		214		106			39,846
State and political subdivision	13,723		1,795		67		10			15,441		12,922		2,291		26		—			15,187
ABS	14,498		131		229		6			14,394		14,121		240		112		—			14,249
CMBS (1)	12,410		347		125		(1		)	12,633		13,762		615		46		(1		)	14,332
Total fixed maturity securities	$	332,964	$	23,883	$	5,369	$	76		$	351,402	$	334,780	$	32,634	$	1,877	$	112		$	365,425
Equity securities
Common stock	$	1,962	$	397	$	107	$	—		$	2,252	$	1,990	$	554	$	28	$	—		$	2,516
Non-redeemable preferred stock	1,035		85		51		—			1,069		1,086		68		39		—			1,115
Total equity securities	$	2,997	$	482	$	158	$	—		$	3,321	$	3,076	$	622	$	67	$	—		$	3,631

______________

(1) The noncredit loss component of OTTI losses for CMBS was in an unrealized gain position of $1 million at both December 31, 2015 and 2014, due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “— Net Unrealized Investment Gains (Losses).”

The Company held non-income producing fixed maturity securities with an estimated fair value of $54 million and $64 million with unrealized gains (losses) of $12 million and $28 million at December 31, 2015 and 2014, respectively.

Methodology for Amortization of Premium and Accretion of Discount on Structured Securities

Amortization of premium and accretion of discount on structured securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for single class and multi-class mortgage-backed and ABS are estimated using inputs obtained from third-party specialists and based on management’s knowledge of the current market. For credit-sensitive mortgage-backed and ABS and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other mortgage-backed and ABS, the effective yield is recalculated on a retrospective basis.

Maturities of Fixed Maturity Securities

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at December 31, 2015:

	Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years Through Ten Years		Due After Ten Years		Structured Securities		Total Fixed Maturity Securities
	(In millions)
Amortized cost	$	13,109	$	74,554	$	71,590	$	108,889	$	64,822	$	332,964
Estimated fair value	$	13,130	$	77,398	$	74,364	$	120,686	$	65,824	$	351,402

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. Structured securities (RMBS, ABS and CMBS) are shown separately, as they are not due at a single maturity.

Continuous Gross Unrealized Losses for Fixed Maturity and Equity Securities AFS by Sector

The following table presents the estimated fair value and gross unrealized losses of fixed maturity and equity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position.

	December 31, 2015								December 31, 2014
	Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(In millions, except number of securities)
Fixed maturity securities
U.S. corporate	$	27,526	$	1,629	$	3,762	$	626	$	11,389	$	331	$	4,658	$	293
U.S. Treasury and agency	19,628		222		298		4		8,927		12		1,314		18
Foreign corporate	14,447		911		5,251		913		9,410		505		2,074		166
Foreign government	3,530		166		429		55		1,085		80		630		81
RMBS	13,467		287		2,431		196		4,180		92		2,534		228
State and political subdivision	1,618		55		168		22		83		1		297		25
ABS	7,329		124		2,823		111		4,456		57		1,440		55
CMBS	4,876		81		637		43		1,268		23		934		22
Total fixed maturity securities	$	92,421	$	3,475	$	15,799	$	1,970	$	40,798	$	1,101	$	13,881	$	888
Equity securities
Common stock	$	203	$	105	$	20	$	2	$	111	$	28	$	1	$	—
Non-redeemable preferred stock	79		2		200		49		67		2		192		37
Total equity securities	$	282	$	107	$	220	$	51	$	178	$	30	$	193	$	37
Total number of securities in an unrealized loss position	6,366				1,489				3,153				1,435

Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities

Evaluation and Measurement Methodologies

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the estimated fair value has been below cost or amortized cost; (ii) the potential for impairments when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry sector or sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the potential for impairments where the issuer, series of issuers or industry has suffered a catastrophic loss or has exhausted natural resources; (vi) with respect to fixed maturity securities, whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers; (vii) with respect to structured securities, changes in forecasted cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security; (viii) the potential for impairments due to weakening of foreign currencies on non-functional currency denominated fixed maturity securities that are near maturity; and (ix) other subjective factors, including concentrations and information obtained from regulators and rating agencies.

The methodology and significant inputs used to determine the amount of credit loss on fixed maturity securities are as follows:

• The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security prior to impairment.

• When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall impairment evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management’s best estimates of likely scenario-based outcomes after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the issuer by rating agencies.

• Additional considerations are made when assessing the unique features that apply to certain structured securities including, but not limited to: the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, and the payment priority within the tranche structure of the security.

• When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government securities and state and political subdivision securities, the estimated fair value is considered the recovery value when available information does not indicate that another value is more appropriate. When information is identified that indicates a recovery value other than estimated fair value, management considers in the determination of recovery value the same considerations utilized in its overall impairment evaluation process as described above, as well as any private and public sector programs to restructure such securities.

With respect to securities that have attributes of debt and equity (perpetual hybrid securities), consideration is given in the OTTI analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities, with an unrealized loss, regardless of credit rating, have deferred any dividend payments. When an OTTI loss has occurred, the OTTI loss is the entire difference between the perpetual hybrid security’s cost and its estimated fair value with a corresponding charge to earnings.

The cost or amortized cost of fixed maturity and equity securities is adjusted for OTTI in the period in which the determination is made. The Company does not change the revised cost basis for subsequent recoveries in value.

In periods subsequent to the recognition of OTTI on a fixed maturity security, the Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis is accreted over the remaining term of the fixed maturity security in a prospective manner based on the amount and timing of estimated future cash flows.

Current Period Evaluation

Based on the Company’s current evaluation of its AFS securities in an unrealized loss position in accordance with its impairment policy, and the Company’s current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company concluded that these securities were not other-than-temporarily impaired at December 31, 2015. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, collateral valuation, interest rates and credit spreads. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods.

Gross unrealized losses on fixed maturity securities increased $3.4 billion during the year ended December 31, 2015 to $5.4 billion. The increase in gross unrealized losses for the year ended December 31, 2015, was primarily attributable to widening credit spreads, an increase in interest rates and, to a lesser extent, the impact of weakening foreign currencies on non-functional currency denominated fixed maturity securities.

At December 31, 2015, $364 million of the total $5.4 billion of gross unrealized losses were from 69 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater.

Investment Grade Fixed Maturity Securities

Of the $364 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $242 million, or 66%, were related to gross unrealized losses on 36 investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads and, with respect to fixed-rate fixed maturity securities, rising interest rates since purchase.

Below Investment Grade Fixed Maturity Securities

Of the $364 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $122 million, or 34%, were related to gross unrealized losses on 33 below investment grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related to U.S. and foreign corporate securities (primarily utility and industrial securities) and non-agency RMBS (primarily alternative residential mortgage loans) and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainties including concerns over lower oil prices in the energy sector and valuations of residential real estate supporting non-agency RMBS. Management evaluates U.S. and foreign corporate securities based on factors such as expected cash flows and the financial condition and near-term and long-term prospects of the issuers and evaluates non-agency RMBS based on actual and projected cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security and the payment priority within the tranche structure of the security.

Equity Securities

Gross unrealized losses on equity securities increased $91 million during the year ended December 31, 2015 to $158 million. Of the $158 million, $36 million were from 12 securities with gross unrealized losses of 20% or more of cost for 12 months or greater. Of the $36 million, 64% were rated A or better, and all were from financial services industry investment grade non-redeemable preferred stock securities.

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:

	December 31,
	2015					2014
	Carrying Value			% of Total		Carrying Value			% of Total
	(In millions)					(In millions)
Mortgage loans
Commercial	$	44,012		65.6	%	$	41,088		68.3	%
Agricultural	13,188			19.6		12,378			20.6
Residential	9,734			14.5		6,369			10.6
Subtotal (1)	66,934			99.7		59,835			99.5
Valuation allowances	(318		)	(0.5	)	(305		)	(0.5	)
Subtotal mortgage loans, net	66,616			99.2		59,530			99.0
Residential — FVO	314			0.5		308			0.5
Commercial mortgage loans held by CSEs — FVO	172			0.3		280			0.5
Total mortgage loans, net	$	67,102		100.0	%	$	60,118		100.0	%

______________

(1) Purchases of mortgage loans were $4.2 billion and $4.7 billion for the years ended December 31, 2015 and 2014, respectively.

See “— Variable Interest Entities” for discussion of CSEs.

Information on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on residential — FVO and commercial mortgage loans held by CSEs — FVO is presented in Note 10. The Company elects the FVO for certain mortgage loans and related long-term debt that are managed on a total return basis.

Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment

Mortgage loans by portfolio segment, by method of evaluation of credit loss, impaired mortgage loans including those modified in a troubled debt restructuring, and the related valuation allowances, were as follows at and for the years ended:

	Evaluated Individually for Credit Losses										Evaluated Collectively for Credit Losses				Impaired Loans
	Impaired Loans with a Valuation Allowance						Impaired Loans without a Valuation Allowance
	Unpaid Principal Balance		Recorded Investment		Valuation Allowances		Unpaid Principal Balance		Recorded Investment		Recorded Investment		Valuation Allowances		Carrying Value		Average Recorded Investment
	(In millions)
December 31, 2015
Commercial	$	—	$	—	$	—	$	57	$	57	$	43,955	$	217	$	57	$	127
Agricultural	49		47		3		22		21		13,120		39		65		63
Residential	—		—		—		141		131		9,603		59		131		84
Total	$	49	$	47	$	3	$	220	$	209	$	66,678	$	315	$	253	$	274
December 31, 2014
Commercial	$	75	$	75	$	24	$	101	$	100	$	40,913	$	200	$	151	$	359
Agricultural	51		48		2		14		13		12,317		37		59		80
Residential	—		—		—		40		37		6,332		42		37		19
Total	$	126	$	123	$	26	$	155	$	150	$	59,562	$	279	$	247	$	458

The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $526 million, $153 million and $14 million, respectively, for the year ended December 31, 2013.

Valuation Allowance Rollforward by Portfolio Segment

The changes in the valuation allowance, by portfolio segment, were as follows:

	Commercial			Agricultural			Residential			Total
	(In millions)
Balance at January 1, 2013	$	293		$	52		$	2		$	347
Provision (release)	(35		)	4			18			(13		)
Charge-offs, net of recoveries	—			(12		)	—			(12		)
Balance at December 31, 2013	258			44			20			322
Provision (release)	(11		)	(4		)	27			12
Charge-offs, net of recoveries	(23		)	(1		)	(5		)	(29		)
Balance at December 31, 2014	224			39			42			305
Provision (release)	12			3			33			48
Charge-offs, net of recoveries	(19		)	—			(16		)	(35		)
Balance at December 31, 2015	$	217		$	42		$	59		$	318

Valuation Allowance Methodology

Mortgage loans are considered to be impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the loan agreement. Specific valuation allowances are established using the same methodology for all three portfolio segments as the excess carrying value of a loan over either (i) the present value of expected future cash flows discounted at the loan’s original effective interest rate, (ii) the estimated fair value of the loan’s underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan’s observable market price. A common evaluation framework is used for establishing non-specific valuation allowances for all loan portfolio segments; however, a separate non-specific valuation allowance is calculated and maintained for each loan portfolio segment that is based on inputs unique to each loan portfolio segment. Non-specific valuation allowances are established for pools of loans with similar risk characteristics where a property-specific or market-specific risk has not been identified, but for which the Company expects to incur a credit loss. These evaluations are based upon several loan portfolio segment-specific factors, including the Company’s experience for loan losses, defaults and loss severity, and loss expectations for loans with similar risk characteristics. These evaluations are revised as conditions change and new information becomes available.

Commercial and Agricultural Mortgage Loan Portfolio Segments

The Company typically uses several years of historical experience in establishing non-specific valuation allowances which captures multiple economic cycles. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, and recent loss and recovery trend experience as compared to historical loss and recovery experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. On a quarterly basis, management incorporates the impact of these current market events and conditions on historical experience in determining the non-specific valuation allowance established for commercial and agricultural mortgage loans.

All commercial mortgage loans are reviewed on an ongoing basis which may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt service coverage ratios, and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. All agricultural mortgage loans are monitored on an ongoing basis. The monitoring process for agricultural mortgage loans is generally similar to the commercial mortgage loan monitoring process, with a focus on higher risk loans, including reviews on a geographic and property-type basis. Higher risk loans are reviewed individually on an ongoing basis for potential credit loss and specific valuation allowances are established using the methodology described above. Quarterly, the remaining loans are reviewed on a pool basis by aggregating groups of loans that have similar risk characteristics for potential credit loss, and non-specific valuation allowances are established as described above using inputs that are unique to each segment of the loan portfolio.

For commercial mortgage loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial mortgage loan portfolio. Loan-to-value ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and the values utilized in calculating the ratio are updated annually on a rolling basis, with a portion of the portfolio updated each quarter. In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part of the Company’s ongoing review of its commercial mortgage loan portfolio.

For agricultural mortgage loans, the Company’s primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated.

Residential Mortgage Loan Portfolio Segment

The Company’s residential mortgage loan portfolio is comprised primarily of closed end, amortizing residential mortgage loans. For evaluations of residential mortgage loans, the key inputs of expected frequency and expected loss reflect current market conditions, with expected frequency adjusted, when appropriate, for differences from market conditions and the Company’s historical experience. In contrast to the commercial and agricultural mortgage loan portfolios, residential mortgage loans are smaller-balance homogeneous loans that are collectively evaluated for impairment. Non-specific valuation allowances are established using the evaluation framework described above for pools of loans with similar risk characteristics from inputs that are unique to the residential segment of the loan portfolio. Loan specific valuation allowances are only established on residential mortgage loans when they have been restructured and are established using the methodology described above for all loan portfolio segments.

For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in non-accrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss.

Credit Quality of Commercial Mortgage Loans

The credit quality of commercial mortgage loans was as follows at:

	Recorded Investment										Estimated Fair Value		% of Total
	Debt Service Coverage Ratios						Total		% of Total
	> 1.20x		1.00x - 1.20x		< 1.00x
	(In millions)										(In millions)
December 31, 2015
Loan-to-value ratios
Less than 65%	$	38,163	$	1,063	$	544	$	39,770	90.4	%	$	40,921	90.7	%
65% to 75%	3,270		138		76		3,484		7.9		3,451		7.7
76% to 80%	—		—		—		—		—		—		—
Greater than 80%	381		140		237		758		1.7		732		1.6
Total	$	41,814	$	1,341	$	857	$	44,012	100.0	%	$	45,104	100.0	%
December 31, 2014
Loan-to-value ratios
Less than 65%	$	33,933	$	1,105	$	1,101	$	36,139	88.0	%	$	38,166	88.4	%
65% to 75%	3,306		405		87		3,798		9.2		3,873		9.0
76% to 80%	130		—		15		145		0.4		153		0.3
Greater than 80%	562		281		163		1,006		2.4		987		2.3
Total	$	37,931	$	1,791	$	1,366	$	41,088	100.0	%	$	43,179	100.0	%

Credit Quality of Agricultural Mortgage Loans

The credit quality of agricultural mortgage loans was as follows at:

	December 31,
	2015				2014
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(In millions)				(In millions)
Loan-to-value ratios
Less than 65%	$	12,399	94.0	%	$	11,743	94.9	%
65% to 75%	710		5.4		533		4.3
76% to 80%	21		0.2		17		0.1
Greater than 80%	58		0.4		85		0.7
Total	$	13,188	100.0	%	$	12,378	100.0	%

The estimated fair value of agricultural mortgage loans was $13.5 billion and $12.8 billion at December 31, 2015 and 2014, respectively.

Credit Quality of Residential Mortgage Loans

The credit quality of residential mortgage loans was as follows at:

	December 31,
	2015				2014
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(In millions)				(In millions)
Performance indicators
Performing	$	9,408	96.7	%	$	6,196	97.3	%
Nonperforming	326		3.3		173		2.7
Total	$	9,734	100.0	%	$	6,369	100.0	%

The estimated fair value of residential mortgage loans was $9.9 billion and $6.6 billion at December 31, 2015 and 2014, respectively.

Past Due and Interest Accrual Status of Mortgage Loans

The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both December 31, 2015 and 2014. The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days and agricultural mortgage loans — 90 days. The past due and accrual status of mortgage loans at recorded investment, prior to valuation allowances, by portfolio segment, were as follows at:

	Past Due				Nonaccrual Status
	December 31, 2015		December 31, 2014		December 31, 2015		December 31, 2014
	(In millions)
Commercial	$	2	$	10	$	—	$	75
Agricultural	103		1		46		41
Residential	326		173		318		163
Total	$	431	$	184	$	364	$	279

Mortgage Loans Modified in a Troubled Debt Restructuring

For a small portion of the mortgage loan portfolio, classified as troubled debt restructurings, concessions are granted related to borrowers experiencing financial difficulties. Generally, the types of concessions include: reduction of the contractual interest rate, extension of the maturity date at an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concession granted is considered in determining any impairment or changes in the specific valuation allowance. During the years ended December 31, 2015 and 2014, the Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring.

Other Invested Assets

Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9), tax credit and renewable energy partnerships, and leveraged and direct financing leases.

Tax Credit Partnerships

The carrying value of tax credit partnerships was $1.6 billion at both December 31, 2015 and 2014. Losses from tax credit partnerships included within net investment income were $164 million, $149 million, and $139 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Leveraged and Direct Financing Leases

Investment in leveraged and direct financing leases consisted of the following at:

	December 31,
	2015						2014
	Leveraged Leases			Direct Financing Leases			Leveraged Leases			Direct Financing Leases
	(In millions)
Rental receivables, net	$	1,329		$	1,508		$	1,414		$	1,750
Estimated residual values	1,076			80			1,148			145
Subtotal	2,405			1,588			2,562			1,895
Unearned income	(693		)	(512		)	(777		)	(776		)
Investment in leases, net of non-recourse debt	$	1,712		$	1,076		$	1,785		$	1,119

Rental receivables are generally due in periodic installments. The payment periods for leveraged leases generally range from one to 15 years but in certain circumstances can be over 30 years, while the payment periods for direct financing leases range from one to 30 years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing or nonperforming, which is assessed monthly. The Company generally defines nonperforming rental receivables as those that are 90 days or more past due. At December 31, 2015 and 2014, all leveraged lease receivables were performing and over 99% of direct financing rental receivables were performing.

The deferred income tax liability related to leveraged leases was $1.5 billion at both December 31, 2015 and 2014.

The components of income from investments in leveraged and direct financing leases, excluding net investment gains (losses), were as follows:

	Years Ended December 31,
	2015				2014				2013
	Leveraged Leases		Direct Financing Leases		Leveraged Leases		Direct Financing Leases		Leveraged Leases		Direct Financing Leases
	(In millions)
Income from investment in leases	$	62	$	82	$	66	$	72	$	82	$	75
Less: Income tax expense on leases	22		29		23		25		29		26
Investment income after income tax	$	40	$	53	$	43	$	47	$	53	$	49

Cash Equivalents

The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $7.5 billion and $4.5 billion at December 31, 2015 and 2014, respectively.

Net Unrealized Investment Gains (Losses)

Unrealized investment gains (losses) on fixed maturity and equity securities AFS and the effect on DAC, VOBA, DSI, future policy benefits and the policyholder dividend obligation, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI.

The components of net unrealized investment gains (losses), included in AOCI, were as follows:

	Years Ended December 31,
	2015			2014			2013
	(In millions)
Fixed maturity securities	$	18,164		$	30,367		$	16,672
Fixed maturity securities with noncredit OTTI losses in AOCI	(76		)	(112		)	(218		)
Total fixed maturity securities	18,088			30,255			16,454
Equity securities	422			608			390
Derivatives	2,350			1,761			375
Other	287			149			(73		)
Subtotal	21,147			32,773			17,146
Amounts allocated from:
Future policy benefits	(163		)	(2,886		)	(898		)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	—			(4		)	6
DAC, VOBA and DSI	(1,273		)	(1,946		)	(1,190		)
Policyholder dividend obligation	(1,783		)	(3,155		)	(1,771		)
Subtotal	(3,219		)	(7,991		)	(3,853		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	27			42			73
Deferred income tax benefit (expense)	(6,151		)	(8,556		)	(4,956		)
Net unrealized investment gains (losses)	11,804			16,268			8,410
Net unrealized investment gains (losses) attributable to noncontrolling interests	(31		)	(33		)	4
Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	11,773		$	16,235		$	8,414

The changes in fixed maturity securities with noncredit OTTI losses included in AOCI were as follows:

	Years Ended December 31,
	2015			2014
	(In millions)
Balance at January 1,	$	(112	)	$	(218	)
Noncredit OTTI losses and subsequent changes recognized	6			17
Securities sold with previous noncredit OTTI loss	125			53
Subsequent changes in estimated fair value	(95		)	36
Balance at December 31,	$	(76	)	$	(112	)

The changes in net unrealized investment gains (losses) were as follows:

	Years Ended December 31,
	2015			2014			2013
	(In millions)
Balance at January 1,	$	16,235		$	8,414		$	14,419
Fixed maturity securities on which noncredit OTTI losses have been recognized	36			106			143
Unrealized investment gains (losses) during the year	(11,662		)	15,521			(17,618		)
Unrealized investment gains (losses) relating to:
Future policy benefits	2,723			(1,988		)	5,151
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	4			(10		)	(13		)
DAC, VOBA and DSI	673			(756		)	1,295
Policyholder dividend obligation	1,372			(1,384		)	2,057
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	(15		)	(31		)	(46		)
Deferred income tax benefit (expense)	2,405			(3,600		)	3,017
Net unrealized investment gains (losses)	11,771			16,272			8,405
Net unrealized investment gains (losses) attributable to noncontrolling interests	2			(37		)	9
Balance at December 31,	$	11,773		$	16,235		$	8,414
Change in net unrealized investment gains (losses)	$	(4,464	)	$	7,858		$	(6,014	)
Change in net unrealized investment gains (losses) attributable to noncontrolling interests	2			(37		)	9
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	(4,462	)	$	7,821		$	(6,005	)

Concentrations of Credit Risk

Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, were in fixed income securities of the Japanese government and its agencies with an estimated fair value of $20.9 billion and $20.3 billion at December 31, 2015 and 2014, respectively. The Company’s investment in fixed maturity and equity securities to counterparties that primarily conduct business in Japan, including Japan government and agency fixed maturity securities, was $25.4 billion and $25.5 billion at December 31, 2015 and 2014, respectively.

Securities Lending

Elements of the securities lending program are presented below at:

	December 31,
	2015		2014
	(In millions)
Securities on loan: (1)
Amortized cost	$	27,223	$	26,989
Estimated fair value	$	29,646	$	30,269
Cash collateral on deposit from counterparties (2)	$	30,197	$	30,826
Security collateral on deposit from counterparties (3)	$	50	$	83
Reinvestment portfolio — estimated fair value	$	30,258	$	31,314

______________

(1) Included within fixed maturity securities and short-term investments.

(2) Included within payables for collateral under securities loaned and other transactions.

(3) Security collateral on deposit from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements.

The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:

	December 31, 2015
	Remaining Tenor of Securities Lending Agreements
	Open (1)		1 Month or Less		1 to 6 Months		Total		% of Total
	(In millions)
Cash collateral liability by loaned security type
U.S. Treasury and agency	$	10,116	$	11,157	$	5,986	$	27,259	90.3	%
Agency RMBS	—		951		600		1,551		5.1
Foreign government	2		510		486		998		3.3
U.S. corporate	9		380		—		389		1.3
Foreign corporate	—		—		—		—		—
Total	$	10,127	$	12,998	$	7,072	$	30,197	100.0	%

	December 31, 2014
	Remaining Tenor of Securities Lending Agreements
	Open (1)		1 Month or Less		1 to 6 Months		Total		% of Total
	(In millions)
Cash collateral liability by loaned security type
U.S. Treasury and agency	$	10,371	$	10,423	$	5,239	$	26,033	84.5	%
Agency RMBS	—		482		2,572		3,054		9.9
Foreign government	30		1,034		81		1,145		3.7
U.S. corporate	125		182		—		307		1.0
Foreign corporate	175		112		—		287		0.9
Total	$	10,701	$	12,233	$	7,892	$	30,826	100.0	%

__________________

(1) The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral.

If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at December 31, 2015 was $9.9 billion, over 99% of which were U.S. Treasury and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement.

The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including U.S. Treasury and agency, agency RMBS, ABS, U.S. corporate securities, non-agency RMBS and foreign corporate securities) with 60% invested in U.S. Treasury and agency securities, agency RMBS, cash equivalents, short-term investments or held in cash. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company.

Invested Assets on Deposit, Held in Trust and Pledged as Collateral

Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value at:

	December 31,
	2015		2014
	(In millions)
Invested assets on deposit (regulatory deposits)	$	9,089	$	9,437
Invested assets held in trust (collateral financing arrangements and reinsurance agreements)	10,443		10,069
Invested assets pledged as collateral (1)	23,145		25,996
Total invested assets on deposit, held in trust and pledged as collateral	$	42,677	$	45,502

______________

(1) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Notes 4 and 12), collateral financing arrangements (see Note 13) and derivative transactions (see Note 9).

See “— Securities Lending” for information regarding securities on loan and Note 7 for information regarding investments designated to the closed block.

Purchased Credit Impaired Investments

Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as purchased credit impaired (“PCI”) investments. For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If, subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI or the recognition of mortgage loan valuation allowances.

The Company’s PCI investments, by invested asset class, were as follows at:

	December 31,
	2015		2014		2015		2014
	Fixed Maturity Securities				Mortgage Loans
	(In millions)
Outstanding principal and interest balance (1)	$	6,410	$	5,287	$	148	$	239
Carrying value (2)	$	4,883	$	4,170	$	129	$	132

______________

(1) Represents the contractually required payments, which is the sum of contractual principal, whether or not currently due, and accrued interest.

(2) Estimated fair value plus accrued interest for fixed maturity securities and amortized cost, plus accrued interest, less any valuation allowances, for mortgage loans.

The following table presents information about PCI investments acquired during the periods indicated:

	Years Ended December 31,
	2015		2014		2015		2014
	Fixed Maturity Securities				Mortgage Loans
	(In millions)
Contractually required payments (including interest)	$	2,220	$	947	$	—	$	—
Cash flows expected to be collected (1)	$	1,951	$	745	$	—	$	—
Fair value of investments acquired	$	1,439	$	503	$	—	$	—

______________

(1) Represents undiscounted principal and interest cash flow expectations, at the date of acquisition.

The following table presents activity for the accretable yield on PCI investments:

	Years Ended December 31,
	2015			2014			2015			2014
	Fixed Maturity Securities						Mortgage Loans
	(In millions)
Accretable yield, January 1,	$	2,143		$	2,746		$	48		$	74
Investments purchased	512			242			—			—
Accretion recognized in earnings	(325		)	(244		)	(56		)	(22		)
Disposals	(56		)	(60		)	—			—
Reclassification (to) from nonaccretable difference	(74		)	(541		)	29			(4		)
Accretable yield, December 31,	$	2,200		$	2,143		$	21		$	48

Collectively Significant Equity Method Investments

The Company holds investments in real estate joint ventures, real estate funds and other limited partnership interests consisting of leveraged buy-out funds, hedge funds, private equity funds, joint ventures and other funds. The portion of these investments accounted for under the equity method had a carrying value of $14.6 billion at December 31, 2015. The Company’s maximum exposure to loss related to these equity method investments is limited to the carrying value of these investments plus unfunded commitments of $5.2 billion at December 31, 2015. Except for certain real estate joint ventures, the Company’s investments in real estate funds and other limited partnership interests are generally of a passive nature in that the Company does not participate in the management of the entities.

As described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-month lag methodology and within net investment income. Aggregate net investment income from these equity method investments exceeded 10% of the Company’s consolidated pre-tax income (loss) from continuing operations for only one of the three most recent annual periods: 2013. The Company is providing the following aggregated summarized financial data for such equity method investments, for the most recent annual periods, in order to provide comparative information. This aggregated summarized financial data does not represent the Company’s proportionate share of the assets, liabilities, or earnings of such entities.

The aggregated summarized financial data presented below reflects the latest available financial information and is as of, and for, the years ended December 31, 2015, 2014 and 2013. Aggregate total assets of these entities totaled $447.5 billion and $385.7 billion at December 31, 2015 and 2014, respectively. Aggregate total liabilities of these entities totaled $72.0 billion and $39.5 billion at December 31, 2015 and 2014, respectively. Aggregate net income (loss) of these entities totaled $25.8 billion, $34.9 billion and $26.3 billion for the years ended December 31, 2015, 2014 and 2013, respectively. Aggregate net income (loss) from the underlying entities in which the Company invests is primarily comprised of investment income, including recurring investment income and realized and unrealized investment gains (losses).

Variable Interest Entities

The Company has invested in certain structured transactions (including CSEs), formed trusts to invest proceeds from certain collateral financing arrangements and has insurance operations that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity.

The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. The Company generally uses a qualitative approach to determine whether it is the primary beneficiary. However, for VIEs that are investment companies or apply measurement principles consistent with those utilized by investment companies, the primary beneficiary is based on a risks and rewards model and is defined as the entity that will absorb a majority of a VIE’s expected losses, receive a majority of a VIE’s expected residual returns if no single entity absorbs a majority of expected losses, or both. The Company reassesses its involvement with VIEs on a quarterly basis. The use of different methodologies, assumptions and inputs in the determination of the primary beneficiary could have a material effect on the amounts presented within the consolidated financial statements.

Consolidated VIEs

Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.

The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at December 31, 2015 and 2014.

	December 31,
	2015				2014
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
MRSC (collateral financing arrangement (primarily securities)) (1)	$	3,374	$	—	$	3,471	$	—
Operating joint venture (2)	2,465		2,079		2,405		1,999
CSEs (assets (primarily loans) and liabilities (primarily debt)) (3)	186		62		297		155
Other investments (4)	76		—		150		15
Total	$	6,101	$	2,141	$	6,323	$	2,169

______________

(1) See Note 13 for a description of the MetLife Reinsurance Company of South Carolina (“MRSC”) collateral financing arrangement.

(2) Assets of the operating joint venture are primarily fixed maturity securities and separate account assets. Liabilities of the operating joint venture are primarily future policy benefits, other policyholder funds and separate account liabilities.

(3) The Company consolidates entities that are structured as CMBS and as collateralized debt obligations. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any principal or interest shortfalls should any arise. The Company’s exposure was limited to that of its remaining investment in these entities of $105 million and $123 million at estimated fair value at December 31, 2015 and 2014, respectively. The long-term debt bears interest primarily at fixed rates ranging from 2.25% to 5.57%, payable primarily on a monthly basis. Interest expense related to these obligations, included in other expenses, was $8 million, $38 million and $122 million for the years ended December 31, 2015, 2014 and 2013 respectively.

(4) Other investments is comprised of other invested assets, other limited partnerships interests, FVO and trading securities, and real estate joint ventures.

Unconsolidated VIEs

The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:

	December 31,
	2015				2014
	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
	(In millions)
Fixed maturity securities AFS:
Structured securities (RMBS, ABS and CMBS) (2)	$	65,824	$	65,824	$	68,427	$	68,427
U.S. and foreign corporate	3,261		3,261		3,829		3,829
Other limited partnership interests	5,186		7,074		6,250		8,402
Other invested assets	1,604		2,161		1,720		2,050
FVO and trading securities	586		586		565		565
Real estate joint ventures	65		82		100		125
Other investments (3)	71		71		92		92
Total	$	76,597	$	79,059	$	80,983	$	83,490

______________

(1) The maximum exposure to loss relating to fixed maturity securities AFS, FVO and trading securities and equity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests, mortgage loans and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $179 million and $212 million at December 31, 2015 and 2014, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.

(2) For these variable interests, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.

(3) Other investments is comprised of mortgage loans and non-redeemable preferred stock.

As described in Note 21, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during the years ended December 31, 2015, 2014 and 2013.

Net Investment Income

The components of net investment income were as follows:

	Years Ended December 31,
	2015		2014		2013
	(In millions)
Investment income:
Fixed maturity securities	$	14,235	$	14,868	$	15,071
Equity securities	144		133		127
FVO and trading securities — Actively traded and FVO general account securities (1)	21		103		65
Mortgage loans	3,136		2,928		3,020
Policy loans	603		629		620
Real estate and real estate joint ventures	981		951		909
Other limited partnership interests	669		1,033		955
Cash, cash equivalents and short-term investments	148		168		181
Operating joint ventures	25		10		10
Other	248		192		165
Subtotal	20,210		21,015		21,123
Less: Investment expenses	1,209		1,178		1,198
Subtotal, net	19,001		19,837		19,925
FVO and trading securities — FVO contractholder-directed unit-linked investments (1)	264		1,266		2,172
FVO CSEs — interest income:
Commercial mortgage loans	16		49		132
Securities	—		1		3
Subtotal	280		1,316		2,307
Net investment income	$	19,281	$	21,153	$	22,232

______________

(1) Changes in estimated fair value subsequent to purchase for securities still held as of the end of the respective years included in net investment income were as follows:

	Years Ended December 31,
	2015			2014			2013
	(In millions)
Actively traded and FVO general account securities	$	(23	)	$	(3	)	$	18
FVO contractholder-directed unit-linked investments	$	(433	)	$	645		$	1,579

See “— Variable Interest Entities” for discussion of CSEs.

FVO Securities include certain fixed maturity and equity securities held-for-investment by the general account to support asset and liability management strategies for certain insurance products and investments in certain separate accounts; securities held by CSEs; and trading securities, as further described in Note 1.

Net Investment Gains (Losses)

Components of Net Investment Gains (Losses)

The components of net investment gains (losses) were as follows:

	Years Ended December 31,
	2015			2014			2013
	(In millions)
Total gains (losses) on fixed maturity securities:
Total OTTI losses recognized — by sector and industry:
U.S. and foreign corporate securities — by industry:
Consumer	$	(28	)	$	(7	)	$	(11	)
Utility	(21		)	—			(48		)
Industrial	(5		)	—			—
Transportation	—			(2		)	(3		)
Finance	—			—			(10		)
Communications	—			—			(2		)
Total U.S. and foreign corporate securities	(54		)	(9		)	(74		)
RMBS	(30		)	(31		)	(80		)
CMBS	—			(13		)	(12		)
ABS	—			(7		)	—
State and political subdivision	(6		)	—			—
OTTI losses on fixed maturity securities recognized in earnings	(90		)	(60		)	(166		)
Fixed maturity securities — net gains (losses) on sales and disposals	204			598			561
Total gains (losses) on fixed maturity securities	114			538			395
Total gains (losses) on equity securities:
Total OTTI losses recognized — by sector:
Common stock	(39		)	(13		)	(6		)
Non-redeemable preferred stock	(1		)	(23		)	(20		)
OTTI losses on equity securities recognized in earnings	(40		)	(36		)	(26		)
Equity securities — net gains (losses) on sales and disposals	61			101			31
Total gains (losses) on equity securities	21			65			5
FVO and trading securities — FVO general account securities	—			9			15
Mortgage loans	(105		)	(36		)	22
Real estate and real estate joint ventures	531			222			(19		)
Other limited partnership interests	(67		)	(78		)	(48		)
Other	(6		)	(110		)	22
Subtotal	488			610			392
FVO CSEs:
Commercial mortgage loans	(7		)	(13		)	(52		)
Securities	—			—			2
Long-term debt — related to commercial mortgage loans	4			19			85
Long-term debt — related to securities	—			(1		)	(2		)
Non-investment portfolio gains (losses) (1)	112			(812		)	(264		)
Subtotal	109			(807		)	(231		)
Total net investment gains (losses)	$	597		$	(197	)	$	161

______________

(1) Non-investment portfolio gains (losses) for the year ended December 31, 2014 includes a loss of $633 million related to the disposition of MAL as more fully described in Note 3.

See “— Variable Interest Entities” for discussion of CSEs.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were $46 million, ($183) million and $171 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Sales or Disposals and Impairments of Fixed Maturity and Equity Securities

Investment gains and losses on sales of securities are determined on a specific identification basis. Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) were as shown in the table below.

	Years Ended December 31,
	2015			2014			2013			2015			2014			2013
	Fixed Maturity Securities									Equity Securities
	(In millions)
Proceeds	$	115,395		$	82,075		$	76,070		$	358		$	544		$	746
Gross investment gains	$	1,262		$	1,165		$	1,326		$	99		$	112		$	56
Gross investment losses	(1,058		)	(567		)	(765		)	(38		)	(11		)	(25		)
OTTI losses	(90		)	(60		)	(166		)	(40		)	(36		)	(26		)
Net investment gains (losses)	$	114		$	538		$	395		$	21		$	65		$	5

Credit Loss Rollforward

The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held for which a portion of the OTTI loss was recognized in OCI:

	Years Ended December 31,
	2015			2014
	(In millions)
Balance at January 1,	$	357		$	378
Additions:
Initial impairments — credit loss OTTI on securities not previously impaired	20			2
Additional impairments — credit loss OTTI on securities previously impaired	26			25
Reductions:
Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI	(124		)	(40		)
Securities impaired to net present value of expected future cash flows	—			(7		)
Increase in cash flows — accretion of previous credit loss OTTI	(2		)	(1		)
Balance at December 31,	$	277		$	357