Investments

12 Months Ended

Dec. 31, 2016

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”) (collectively, “Structured Securities”).

	December 31, 2016											December 31, 2015
	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	$	94,558	$	7,351	$	1,056	$	—		$	100,853	$	96,466	$	6,583	$	2,255	$	—		$	100,794
U.S. government and agency	53,326		4,977		780		—			57,523		56,499		5,373		226		—			61,646
Foreign government	50,923		6,600		385		—			57,138		45,451		5,269		221		—			50,499
Foreign corporate (1)	55,676		3,132		1,752		(1		)	57,057		56,003		3,019		1,822		2			57,198
RMBS (1)	36,293		1,244		554		(10		)	36,993		37,914		1,366		424		59			38,797
State and political subdivision	14,566		1,733		122		1			16,176		13,723		1,795		67		10			15,441
ABS	13,920		101		141		3			13,877		14,498		131		229		6			14,394
CMBS (1)	11,092		282		103		(1		)	11,272		12,410		347		125		(1		)	12,633
Total fixed maturity securities	$	330,354	$	25,420	$	4,893	$	(8	)	$	350,889	$	332,964	$	23,883	$	5,369	$	76		$	351,402
Equity securities:
Common stock	$	1,927	$	488	$	14	$	—		$	2,401	$	1,962	$	397	$	107	$	—		$	2,252
Non-redeemable preferred stock	817		25		49		—			793		1,035		85		51		—			1,069
Total equity securities	$	2,744	$	513	$	63	$	—		$	3,194	$	2,997	$	482	$	158	$	—		$	3,321

__________________

(1) The noncredit loss component of OTTI losses for foreign corporate, RMBS and CMBS was in an unrealized gain position of $1 million, $10 million and $1 million, respectively, at December 31, 2016, due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. The noncredit loss component of OTTI for CMBS was in an unrealized gain position of $1 million at December 31, 2015, 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 $6 million and $54 million with unrealized gains (losses) of ($2) million and $12 million at December 31, 2016 and 2015, 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 Structured Securities are estimated using inputs obtained from third-party specialists and based on management’s knowledge of the current market. For credit-sensitive Structured Securities and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other Structured Securities, 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, 2016:

	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	$	15,423	$	68,766	$	67,522	$	117,338	$	61,305	$	330,354
Estimated fair value	$	15,517	$	72,018	$	70,282	$	130,930	$	62,142	$	350,889

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 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 at:

	December 31, 2016								December 31, 2015
	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
	(Dollars in millions)
Fixed maturity securities:
U.S. corporate	$	16,147	$	656	$	3,684	$	400	$	27,526	$	1,629	$	3,762	$	626
U.S. government and agency	13,500		760		141		20		19,628		222		298		4
Foreign government	6,228		271		924		114		3,530		166		429		55
Foreign corporate	11,613		639		6,127		1,112		14,447		911		5,251		913
RMBS	12,943		403		2,618		141		13,467		287		2,431		196
State and political subdivision	2,636		114		85		9		1,618		55		168		22
ABS	2,702		33		2,789		111		7,329		124		2,823		111
CMBS	2,570		48		735		54		4,876		81		637		43
Total fixed maturity securities	$	68,339	$	2,924	$	17,103	$	1,961	$	92,421	$	3,475	$	15,799	$	1,970
Equity securities:
Common stock	$	105	$	14	$	11	$	—	$	203	$	105	$	20	$	2
Non-redeemable preferred stock	196		9		165		40		79		2		200		49
Total equity securities	$	301	$	23	$	176	$	40	$	282	$	107	$	220	$	51
Total number of securities in an unrealized loss position	5,321				1,790				6,366				1,489

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, 2016. 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 decreased $560 million during the year ended December 31, 2016 to $4.9 billion. The decrease in gross unrealized losses for the year ended December 31, 2016, was primarily attributable to narrowing credit spreads, partially offset by 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, 2016, $282 million of the total $4.9 billion of gross unrealized losses were from 125 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater.

The change in gross unrealized losses on equity securities was not significant during the year ended December 31, 2016.

Investment Grade Fixed Maturity Securities

Of the $282 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, $224 million, or 79%, were related to gross unrealized losses on 81 investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities, rising interest rates since purchase.

Below Investment Grade Fixed Maturity Securities

Of the $282 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, $58 million, or 21%, were related to gross unrealized losses on 44 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 industrial and utility 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 uncertainty 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.

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:

	December 31,
	2016					2015
	Carrying Value			% of Total		Carrying Value			% of Total
	(Dollars in millions)
Mortgage loans:
Commercial	$	48,035		64.4	%	$	44,012		65.6	%
Agricultural	14,456			19.4		13,188			19.6
Residential	11,696			15.7		9,734			14.5
Subtotal (1)	74,187			99.5		66,934			99.7
Valuation allowances	(344		)	(0.5	)	(318		)	(0.5	)
Subtotal mortgage loans, net	73,843			99.0		66,616			99.2
Residential — FVO	566			0.8		314			0.5
Commercial mortgage loans held by CSEs — FVO	136			0.2		172			0.3
Total mortgage loans, net	$	74,545		100.0	%	$	67,102		100.0	%

__________________

(1) Purchases of mortgage loans were $3.6 billion and $4.2 billion for the years ended December 31, 2016 and 2015, respectively, and were primarily comprised of residential mortgage loans.

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, 2016
Commercial	$	—	$	—	$	—	$	12	$	12	$	48,023	$	234	$	12	$	90
Agricultural	15		13		1		27		27		14,416		43		39		52
Residential	—		—		—		266		242		11,454		66		242		188
Total	$	15	$	13	$	1	$	305	$	281	$	73,893	$	343	$	293	$	330
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

The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $359 million, $80 million and $19 million, respectively, for the year ended December 31, 2014.

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, 2014	$	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
Provision (release) (1)	160			3			23			186
Charge-offs, net of recoveries (1)	(143		)	(1		)	(16		)	(160		)
Balance at December 31, 2016	$	234		$	44		$	66		$	344

__________________

(1) In connection with an acquisition in 2010, certain impaired commercial mortgage loans were acquired and accordingly, were not originated by the Company. Such commercial mortgage loans have been accounted for as purchased credit impaired (“PCI”) commercial mortgage loans. Decreases in cash flows expected to be collected on PCI commercial mortgage loans can result in provisions for losses on mortgage loans. For the year endedDecember 31, 2016, in connection with the maturity of an acquired PCI commercial mortgage loan, an increase to the commercial mortgage loan valuation allowance of$143 millionwas recorded and charged-off upon maturity. The Company will recover a substantial portion of the loss on the loan incurred through an indemnification agreement entered into in connection with the acquisition in 2010.

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 nonaccrual 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
	(Dollars in millions)
December 31, 2016
Loan-to-value ratios:
Less than 65%	$	41,811	$	1,307	$	874	$	43,992	91.6	%	$	44,459	91.8	%
65% to 75%	3,335		—		221		3,556		7.4		3,488		7.2
76% to 80%	229		—		—		229		0.5		215		0.5
Greater than 80%	142		41		75		258		0.5		250		0.5
Total	$	45,517	$	1,348	$	1,170	$	48,035	100.0	%	$	48,412	100.0	%
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	%

Credit Quality of Agricultural Mortgage Loans

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

	December 31,
	2016				2015
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Loan-to-value ratios:
Less than 65%	$	13,872	96.0	%	$	12,399	94.0	%
65% to 75%	479		3.3		710		5.4
76% to 80%	17		0.1		21		0.2
Greater than 80%	88		0.6		58		0.4
Total	$	14,456	100.0	%	$	13,188	100.0	%

The estimated fair value of agricultural mortgage loans was $14.7 billion and $13.5 billion at December 31, 2016 and 2015, respectively.

Credit Quality of Residential Mortgage Loans

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

	December 31,
	2016				2015
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Performance indicators:
Performing	$	11,304	96.6	%	$	9,408	96.7	%
Nonperforming	392		3.4		326		3.3
Total	$	11,696	100.0	%	$	9,734	100.0	%

The estimated fair value of residential mortgage loans was $12.1 billion and $9.9 billion at December 31, 2016 and 2015, respectively.

Past Due and Nonaccrual 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, 2016 and 2015. 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 nonaccrual mortgage loans at recorded investment, prior to valuation allowances, by portfolio segment, were as follows at:

	Past Due				Greater than 90 Days Past Due and Still Accruing Interest				Nonaccrual
	December 31, 2016		December 31, 2015		December 31, 2016		December 31, 2015		December 31, 2016		December 31, 2015
	(In millions)
Commercial	$	3	$	2	$	3	$	—	$	—	$	—
Agricultural	127		103		104		73		23		46
Residential	392		326		37		—		355		318
Total	$	522	$	431	$	144	$	73	$	378	$	364

Mortgage Loans Modified in a Troubled Debt Restructuring

The Company may grant concessions related to borrowers experiencing financial difficulties, which are classified as troubled debt restructurings. 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 concessions granted are considered in determining any impairment or changes in the specific valuation allowance recorded with the restructuring. Through the continuous monitoring process, a specific valuation allowance may have been recorded prior to the quarter when the mortgage loan is modified in a troubled debt restructuring.

During the year ended December 31, 2016, the Company had 562 residential mortgage loans modified in a troubled debt restructuring with carrying value after specific valuation allowance of $137 million and $124 million pre-modification and post-modification, respectively. During the year ended December 31, 2015, the Company had 460 residential mortgage loans modified in a troubled debt restructuring with carrying value after specific valuation allowance of $108 million and $96 million pre-modification and post-modification, respectively. There were no commercial or agricultural mortgage loans modified in a troubled debt restructuring for both the years ended December 31, 2016 and 2015.

During the years ended December 31, 2016 and 2015, the Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring with subsequent payment default.

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 $1.8 billion and $1.6 billion at December 31, 2016 and 2015, respectively. Losses from tax credit partnerships included within net investment income were $167 million, $164 million, and $149 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Leveraged and Direct Financing Leases

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

	December 31,
	2016						2015
	Leveraged Leases			Direct Financing Leases			Leveraged Leases			Direct Financing Leases
	(In millions)
Rental receivables, net	$	1,259		$	1,683		$	1,329		$	1,508
Estimated residual values	966			71			1,076			80
Subtotal	2,225			1,754			2,405			1,588
Unearned income	(635		)	(639		)	(693		)	(512		)
Investment in leases, net of non-recourse debt	$	1,590		$	1,115		$	1,712		$	1,076

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 25 years, while the payment periods for direct financing leases range from one to 20 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, 2016 and 2015, 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, 2016 and 2015.

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 $12.2 billion and $7.5 billion at December 31, 2016 and 2015, 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,
	2016			2015			2014
	(In millions)
Fixed maturity securities	$	20,300		$	18,164		$	30,367
Fixed maturity securities with noncredit OTTI losses included in AOCI	8			(76		)	(112		)
Total fixed maturity securities	20,308			18,088			30,255
Equity securities	485			422			608
Derivatives	2,923			2,350			1,761
Other	23			287			149
Subtotal	23,739			21,147			32,773
Amounts allocated from:
Future policy benefits	(1,114		)	(163		)	(2,886		)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	(3		)	—			(4		)
DAC, VOBA and DSI	(1,430		)	(1,273		)	(1,946		)
Policyholder dividend obligation	(1,931		)	(1,783		)	(3,155		)
Subtotal	(4,478		)	(3,219		)	(7,991		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	(1		)	27			42
Deferred income tax benefit (expense)	(6,623		)	(6,151		)	(8,556		)
Net unrealized investment gains (losses)	12,637			11,804			16,268
Net unrealized investment gains (losses) attributable to noncontrolling interests	(6		)	(31		)	(33		)
Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	12,631		$	11,773		$	16,235

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

	Years Ended December 31,
	2016			2015
	(In millions)
Balance at January 1,	$	(76	)	$	(112	)
Noncredit OTTI losses and subsequent changes recognized	14			6
Securities sold with previous noncredit OTTI loss	64			125
Subsequent changes in estimated fair value	6			(95		)
Balance at December 31,	$	8		$	(76	)

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

	Years Ended December 31,
	2016			2015			2014
	(In millions)
Balance at January 1,	$	11,773		$	16,235		$	8,414
Fixed maturity securities on which noncredit OTTI losses have been recognized	84			36			106
Unrealized investment gains (losses) during the year	2,508			(11,662		)	15,521
Unrealized investment gains (losses) relating to:
Future policy benefits	(951		)	2,723			(1,988		)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	(3		)	4			(10		)
DAC, VOBA and DSI	(157		)	673			(756		)
Policyholder dividend obligation	(148		)	1,372			(1,384		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	(28		)	(15		)	(31		)
Deferred income tax benefit (expense)	(472		)	2,405			(3,600		)
Net unrealized investment gains (losses)	12,606			11,771			16,272
Net unrealized investment gains (losses) attributable to noncontrolling interests	25			2			(37		)
Balance at December 31,	$	12,631		$	11,773		$	16,235
Change in net unrealized investment gains (losses)	$	833		$	(4,464	)	$	7,858
Change in net unrealized investment gains (losses) attributable to noncontrolling interests	25			2			(37		)
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	858		$	(4,462	)	$	7,821

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 $24.9 billion and $20.9 billion at December 31, 2016 and 2015, respectively.

Securities Lending

Elements of the securities lending program are presented below at:

	December 31,
	2016		2015
	(In millions)
Securities on loan: (1)
Amortized cost	$	24,692	$	27,223
Estimated fair value	$	26,308	$	29,646
Cash collateral on deposit from counterparties (2)	$	26,755	$	30,197
Security collateral on deposit from counterparties (3)	$	46	$	50
Reinvestment portfolio — estimated fair value	$	26,704	$	30,258

__________________

(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 on the consolidated financial statements.

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

	December 31, 2016								December 31, 2015
	Remaining Tenor of Securities Lending Agreements								Remaining Tenor of Securities Lending Agreements
	Open (1)		1 Month or Less		1 to 6 Months		Total		Open (1)		1 Month or Less		1 to 6 Months		Total
	(In millions)
Cash collateral liability by loaned security type:
U.S. government and agency	$	6,608	$	8,403	$	10,125	$	25,136	$	10,116	$	11,157	$	5,986	$	27,259
Foreign government	—		620		144		764		2		510		486		998
U.S. corporate	—		523		—		523		9		380		—		389
Agency RMBS	—		—		274		274		—		951		600		1,551
Foreign corporate	—		58		—		58		—		—		—		—
Total	$	6,608	$	9,604	$	10,543	$	26,755	$	10,127	$	12,998	$	7,072	$	30,197

__________________

(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, 2016 was $6.5 billion, over 99% of which were U.S. government 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 agency RMBS, ABS, short-term investments, cash equivalents and U.S. government and agency securities) with 59% invested in agency RMBS, short-term investments, cash equivalents, U.S. government and agency securities 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.

Repurchase Agreement Transactions

Elements of the short-term repurchase agreements are presented below at:

	December 31, 2016		December 31, 2015
	(In millions)
Securities on loan included within fixed maturity securities:
Amortized cost	$	98	$	51
Estimated fair value	$	113	$	56
Cash collateral received included within other liabilities	$	102	$	50
Reinvestment portfolio — estimated fair value	$	100	$	50

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

	December 31, 2016						December 31, 2015
	Remaining Tenor of Repurchase Agreements						Remaining Tenor of Repurchase Agreements
	1 Month or Less		1 to 6  Months		Total		1 Month or Less		1 to 6 Months		Total
	(In millions)
Cash collateral liability by loaned security type:
Foreign corporate	$	12	$	10	$	22	$	—	$	25	$	25
All other corporate and government	39		41		80		—		25		25
Total	$	51	$	51	$	102	$	—	$	50	$	50

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,
	2016		2015
	(In millions)
Invested assets on deposit (regulatory deposits)	$	9,573	$	9,089
Invested assets held in trust (collateral financing arrangements and reinsurance agreements)	11,111		10,443
Invested assets pledged as collateral (1)	27,431		23,145
Total invested assets on deposit, held in trust and pledged as collateral	$	48,115	$	42,677

__________________

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

See “— Securities Lending” and “Repurchase Agreement Transactions” 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 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,
	2016		2015		2016		2015
	Fixed Maturity Securities				Mortgage Loans
	(In millions)
Outstanding principal and interest balance (1)	$	7,121	$	6,410	$	—	$	148
Carrying value (2)	$	5,569	$	4,883	$	—	$	129

__________________

(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,
	2016		2015		2016		2015
	Fixed Maturity Securities				Mortgage Loans
	(In millions)
Contractually required payments (including interest)	$	2,031	$	2,220	$	—	$	—
Cash flows expected to be collected (1)	$	1,828	$	1,951	$	—	$	—
Fair value of investments acquired	$	1,331	$	1,439	$	—	$	—

__________________

(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,
	2016			2015			2016			2015
	Fixed Maturity Securities						Mortgage Loans
	(In millions)
Accretable yield, January 1,	$	2,200		$	2,143		$	21		$	48
Investments purchased	497			512			—			—
Accretion recognized in earnings	(337		)	(325		)	(9		)	(56		)
Disposals	(15		)	(56		)	—			—
Reclassification (to) from nonaccretable difference	(183		)	(74		)	(12		)	29
Accretable yield, December 31,	$	2,162		$	2,200		$	—		$	21

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 $14.3 billion at December 31, 2016. 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 $6.0 billion at December 31, 2016. 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 one of the three most recent annual periods: 2016. 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, 2016, 2015 and 2014. Aggregate total assets of these entities totaled $436.9 billion and $447.5 billion at December 31, 2016 and 2015, respectively. Aggregate total liabilities of these entities totaled $56.4 billion and $72.0 billion at December 31, 2016 and 2015, respectively. Aggregate net income (loss) of these entities totaled $26.8 billion, $25.8 billion and $34.9 billion for the years ended December 31, 2016, 2015 and 2014, 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 legal entities 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.

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, 2016 and 2015.

	December 31,
	2016				2015
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
MRSC (collateral financing arrangement (primarily securities)) (1)	$	3,422	$	—	$	3,374	$	—
Operating joint venture (2)	—		—		2,465		2,079
CSEs (assets (primarily loans) and liabilities (primarily debt)) (3)	146		35		186		62
Other investments (4)	50		—		76		—
Total	$	3,618	$	35	$	6,101	$	2,141

__________________

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

(2) Following a change in the foreign investment law in India, the Company no longer consolidated its India operating joint venture, effective January 1, 2016. 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 policy-related balances 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 $95 million and $105 million at estimated fair value at December 31, 2016 and 2015, respectively.

(4) Other investments is comprised of other invested assets and other limited partnership interests.

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,
	2016				2015
	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
	(In millions)
Fixed maturity securities AFS:
Structured Securities (2)	$	59,773	$	59,773	$	65,824	$	65,824
U.S. and foreign corporate	2,845		2,845		3,261		3,261
Other limited partnership interests	6,208		11,282		5,186		7,074
Other invested assets	2,261		2,837		1,604		2,161
Other (3)	252		271		722		739
Total	$	71,339	$	77,008	$	76,597	$	79,059

__________________

(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 $150 million and $179 million at December 31, 2016 and 2015, 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 is comprised of mortgage loans, common stock, non-redeemable preferred stock, real estate joint ventures and FVO and trading securities.

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, 2016, 2015 and 2014.

Net Investment Income

The components of net investment income were as follows:

	Years Ended December 31,
	2016		2015		2014
	(In millions)
Investment income:
Fixed maturity securities	$	14,313	$	14,235	$	14,868
Equity securities	140		144		133
FVO and trading securities — FVO general account and Actively traded securities (1)	37		21		103
Mortgage loans	3,259		3,136		2,928
Policy loans	589		603		629
Real estate and real estate joint ventures	684		981		951
Other limited partnership interests	641		669		1,033
Cash, cash equivalents and short-term investments	173		148		168
Operating joint ventures	33		25		10
Other	263		248		192
Subtotal	20,132		20,210		21,015
Less: Investment expenses	1,147		1,209		1,178
Subtotal, net	18,985		19,001		19,837
FVO and trading securities — FVO contractholder-directed unit-linked investments (1)	950		264		1,266
FVO CSEs — interest income:
Commercial mortgage loans	12		16		49
Securities	—		—		1
Subtotal	962		280		1,316
Net investment income	$	19,947	$	19,281	$	21,153

__________________

(1) Changes in estimated fair value subsequent to purchase for securities still held as of the end of the respective periods included in net investment income were principally from FVO contractholder-directed unit-linked investments and, to a much lesser extent, actively traded and FVO general account securities, and were $427 million, ($456) million and $642 million for the years ended December 31, 2016, 2015, and 2014, respectively.

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

Net Investment Gains (Losses)

Components of Net Investment Gains (Losses)

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

	Years Ended December 31,
	2016			2015			2014
	(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:
Industrial	$	(79	)	$	(5	)	$	—
Utility	(21		)	(21		)	—
Consumer	—			(28		)	(7		)
Transportation	—			—			(2		)
Communications	(3		)	—			—
Total U.S. and foreign corporate securities	(103		)	(54		)	(9		)
RMBS	(24		)	(30		)	(31		)
ABS	(2		)	—			(7		)
CMBS	—			—			(13		)
State and political subdivision	—			(6		)	—
OTTI losses on fixed maturity securities recognized in earnings	(129		)	(90		)	(60		)
Fixed maturity securities — net gains (losses) on sales and disposals	154			204			598
Total gains (losses) on fixed maturity securities	25			114			538
Total gains (losses) on equity securities:
Total OTTI losses recognized — by sector:
Common stock	(77		)	(39		)	(13		)
Non-redeemable preferred stock	—			(1		)	(23		)
OTTI losses on equity securities recognized in earnings	(77		)	(40		)	(36		)
Equity securities — net gains (losses) on sales and disposals	29			61			101
Total gains (losses) on equity securities	(48		)	21			65
FVO and trading securities — FVO general account securities	—			—			9
Mortgage loans	(224		)	(105		)	(36		)
Real estate and real estate joint ventures	147			531			222
Other limited partnership interests	(71		)	(67		)	(78		)
Other	(87		)	(6		)	(110		)
Subtotal	(258		)	488			610
FVO CSEs:
Commercial mortgage loans	(2		)	(7		)	(13		)
Securities	1			—			—
Long-term debt — related to commercial mortgage loans	1			4			19
Long-term debt — related to securities	—			—			(1		)
Non-investment portfolio gains (losses) (1)	429			112			(812		)
Subtotal	429			109			(807		)
Total net investment gains (losses)	$	171		$	597		$	(197	)

__________________

(1) Non-investment portfolio gains (losses) for the year ended December 31, 2016 includes a gain from the U.S. Retail Advisor Force Divestiture of $102 million as more fully described in Note 3. 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 $263 million, $46 million and ($183) million for the years ended December 31, 2016, 2015 and 2014, 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,
	2016			2015			2014			2016			2015			2014
	Fixed Maturity Securities									Equity Securities
	(In millions)
Proceeds	$	125,979		$	115,395		$	82,075		$	326		$	358		$	544
Gross investment gains	$	1,231		$	1,262		$	1,165		$	46		$	99		$	112
Gross investment losses	(1,077		)	(1,058		)	(567		)	(17		)	(38		)	(11		)
OTTI losses	(129		)	(90		)	(60		)	(77		)	(40		)	(36		)
Net investment gains (losses)	$	25		$	114		$	538		$	(48	)	$	21		$	65

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,
	2016			2015
	(In millions)
Balance at January 1,	$	277		$	357
Additions:
Initial impairments — credit loss OTTI on securities not previously impaired	1			20
Additional impairments — credit loss OTTI on securities previously impaired	23			26
Reductions:
Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI	(85		)	(124		)
Securities impaired to net present value of expected future cash flows	(1		)	—
Increase in cash flows — accretion of previous credit loss OTTI	—			(2		)
Balance at December 31,	$	215		$	277