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Derivatives (Tables)
 12 Months Ended
Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location
The following table presents the primary underlying risk exposure, gross notional amount, and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:
 
Primary Underlying Risk Exposure
 
December 31,
 
2018
 
2017
 
 
 
Estimated Fair Value
 
 
 
Estimated Fair Value
 
Gross
Notional
Amount
 
Assets
 
Liabilities
 
Gross
Notional
Amount
 
Assets
 
Liabilities
 
 
 
(In millions)
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
Interest rate
 
$
2,446

 
$
2,197

 
$
2

 
$
3,843

 
$
2,289

 
$
3

Foreign currency swaps
Foreign currency exchange rate
 
1,233

 
54

 
—

 
1,116

 
50

 
18

Foreign currency forwards
Foreign currency exchange rate
 
2,140

 
28

 
18

 
3,253

 
2

 
37

Subtotal
 
5,819

 
2,279

 
20

 
8,212

 
2,341

 
58

Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
Interest rate
 
3,515

 
143

 
1

 
3,584

 
235

 
4

Interest rate forwards
Interest rate
 
3,022

 
—

 
216

 
3,332

 
—

 
128

Foreign currency swaps
Foreign currency exchange rate
 
35,931

 
1,796

 
1,831

 
32,152

 
1,142

 
1,665

Subtotal
 
42,468

 
1,939

 
2,048

 
39,068

 
1,377

 
1,797

Foreign operations hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forwards
Foreign currency exchange rate
 
960

 
4

 
27

 
332

 
2

 
5

Currency options
Foreign currency exchange rate
 
5,137

 
3

 
202

 
9,408

 
44

 
163

Subtotal
 
6,097

 
7

 
229

 
9,740

 
46

 
168

Total qualifying hedges
 
54,384

 
4,225

 
2,297

 
57,020

 
3,764

 
2,023

Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
Interest rate
 
54,891

 
1,796

 
175

 
60,485

 
2,203

 
576

Interest rate floors
Interest rate
 
12,701

 
102

 
—

 
7,201

 
92

 
—

Interest rate caps
Interest rate
 
54,575

 
154

 
1

 
53,079

 
78

 
2

Interest rate futures
Interest rate
 
2,353

 
1

 
3

 
4,366

 
2

 
4

Interest rate options
Interest rate
 
26,690

 
416

 
—

 
12,009

 
656

 
11

Interest rate forwards
Interest rate
 
234

 
1

 
15

 
217

 
—

 
42

Interest rate total return swaps
Interest rate
 
1,048

 
33

 
2

 
1,048

 
8

 
2

Synthetic GICs
Interest rate
 
25,700

 
—

 
—

 
11,318

 
—

 
—

Foreign currency swaps
Foreign currency exchange rate
 
11,388

 
884

 
458

 
9,902

 
693

 
506

Foreign currency forwards
Foreign currency exchange rate
 
13,417

 
198

 
213

 
12,238

 
79

 
190

Currency futures
Foreign currency exchange rate
 
847

 
4

 
—

 
846

 
2

 
—

Currency options
Foreign currency exchange rate
 
2,040

 
7

 
—

 
3,123

 
55

 
6

Credit default swaps — purchased
Credit
 
1,903

 
25

 
39

 
2,020

 
7

 
43

Credit default swaps — written
Credit
 
11,391

 
95

 
13

 
11,375

 
271

 
—

Equity futures
Equity market
 
2,992

 
13

 
77

 
4,005

 
18

 
4

Equity index options
Equity market
 
27,707

 
884

 
550

 
19,886

 
569

 
690

Equity variance swaps
Equity market
 
2,269

 
40

 
87

 
4,661

 
54

 
199

Equity total return swaps
Equity market
 
929

 
91

 
—

 
1,117

 
—

 
41

Total non-designated or nonqualifying derivatives
 
253,075

 
4,744

 
1,633

 
218,896

 
4,787

 
2,316

Total
 
$
307,459

 
$
8,969

 
$
3,930

 
$
275,916

 
$
8,551

 
$
4,339
Components of Net Derivatives Gains (Losses)
The components of net derivative gains (losses) were as follows:
 
Years Ended December 31,
 
2018
 
2017
 
2016
 
(In millions)
Freestanding derivative and hedging gains (losses) (1)
$
1,001

 
$
(1,389
)
 
$
(509
)
Embedded derivative gains (losses)
(150
)
 
799

 
(181
)
Total net derivative gains (losses)
$
851

 
$
(590
)
 
$
(690
)
__________________
(1)
Includes foreign currency transaction gains (losses) on hedged items in cash flow and nonqualifying hedging relationships, which are not presented elsewhere in this note.
Earned Income On Derivatives And Income Statement Location
The following table presents earned income on derivatives:
 
Years Ended December 31,
 
2018
 
2017
 
2016
 
(In millions)
Qualifying hedges:
 
 
 
 
 
Net investment income
$
360

 
$
299

 
$
267

Interest credited to policyholder account balances
(113
)
 
(64
)
 
(1
)
Other expenses
(11
)
 
(10
)
 
(12
)
Nonqualifying hedges:
 
 
 
 
 
Net investment income
—

 
—

 
(1
)
Net derivative gains (losses)
547

 
551

 
705

Policyholder benefits and claims
11

 
9

 
7

Total
$
794

 
$
785

 
$
965
Amount and location of gains (losses) recognized in income for derivatives that are not designated or qualifying as hedging instruments
The following table presents the amount and location of gains (losses) recognized in income for derivatives that were not designated or not qualifying as hedging instruments:
 
Net
Derivative
Gains (Losses)
 
Net
Investment
Income (1)
 
Policyholder
Benefits and
Claims (2)
 
(In millions)
Year Ended December 31, 2018
 
 
 
 
 
Interest rate derivatives
$
(158
)
 
$
4

 
$
(6
)
Foreign currency exchange rate derivatives
518

 
—

 
(6
)
Credit derivatives — purchased
6

 
—

 
—

Credit derivatives — written
(132
)
 
—

 
—

Equity derivatives
360

 
1

 
60

Total
$
594

 
$
5

 
$
48

Year Ended December 31, 2017
 
 
 
 
 
Interest rate derivatives
$
(549
)
 
$
1

 
$
(1
)
Foreign currency exchange rate derivatives
(742
)
 
—

 
5

Credit derivatives — purchased
(24
)
 
—

 
—

Credit derivatives — written
145

 
—

 
—

Equity derivatives
(1,046
)
 
(9
)
 
(252
)
Total
$
(2,216
)
 
$
(8
)
 
$
(248
)
Year Ended December 31, 2016
 
 
 
 
 
Interest rate derivatives
$
(990
)
 
$
—

 
$
46

Foreign currency exchange rate derivatives
882

 
—

 
(18
)
Credit derivatives — purchased
(40
)
 
—

 
—

Credit derivatives — written
71

 
—

 
—

Equity derivatives
(681
)
 
(16
)
 
(138
)
Total
$
(758
)
 
$
(16
)
 
$
(110
)
__________________
(1)
Changes in estimated fair value related to economic hedges of equity method investments in joint ventures, derivatives held in relation to trading portfolios and derivatives held within Unit-linked investments. As of December 31, 2016, the Company no longer maintained a trading portfolio for derivatives.
(2)
Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits.
Net derivatives gains (losses) recognized on fair value derivatives and the related hedged items
The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net derivative gains (losses). The following table presents the amount of such net derivative gains (losses):
Derivatives in Fair Value
Hedging Relationships
 
Hedged Items in Fair Value
Hedging Relationships
 
Net Derivative
Gains (Losses)
Recognized
for Derivatives
 
Net Derivative
Gains (Losses)
Recognized for
Hedged Items
 
Ineffectiveness
Recognized in
Net Derivative
Gains (Losses)
 
 
 
 
(In millions)
Year Ended December 31, 2018
 
 
 
 
 
 
Interest rate swaps:
 
Fixed maturity securities AFS
 
$
1

 
$
(1
)
 
$
—

 
 
Policyholder liabilities (1)
 
(221
)
 
227

 
6

Foreign currency swaps:
 
Foreign-denominated fixed maturity securities AFS and mortgage loans
 
55

 
(57
)
 
(2
)
 
 
Foreign-denominated policyholder account balances (2)
 
23

 
(23
)
 
—

Foreign currency forwards:
 
Foreign-denominated fixed maturity securities AFS
 
78

 
(70
)
 
8

Total
 
$
(64
)
 
$
76

 
$
12

Year Ended December 31, 2017
 
 
 
 
 
 
Interest rate swaps:
 
Fixed maturity securities AFS
 
$
4

 
$
(4
)
 
$
—

 
 
Policyholder liabilities (1)
 
(69
)
 
134

 
65

Foreign currency swaps:
 
Foreign-denominated fixed maturity securities AFS
 
(27
)
 
29

 
2

 
 
Foreign-denominated policyholder account balances (2)
 
65

 
(44
)
 
21

Foreign currency forwards:
 
Foreign-denominated fixed maturity securities AFS
 
13

 
(11
)
 
2

Total
 
$
(14
)
 
$
104

 
$
90

Year Ended December 31, 2016
 
 
 
 
 
 
Interest rate swaps:
 
Fixed maturity securities AFS
 
$
7

 
$
(9
)
 
$
(2
)
 
 
Policyholder liabilities (1)
 
(108
)
 
90

 
(18
)
Foreign currency swaps:
 
Foreign-denominated fixed maturity securities AFS
 
13

 
(12
)
 
1

 
 
Foreign-denominated policyholder account balances (2)
 
(95
)
 
92

 
(3
)
Foreign currency forwards:
 
Foreign-denominated fixed maturity securities AFS
 
127

 
(119
)
 
8

Total
 
$
(56
)
 
$
42

 
$
(14
)
__________________
(1)
Fixed rate liabilities reported in policyholder account balances or future policy benefits.
(2)
Fixed rate or floating rate liabilities.
Derivatives and Non-Derivative Hedging Instruments in Net Investment Hedging Relationships
The following table presents the effects of derivatives in net investment hedging relationships on the consolidated statements of operations and the consolidated statements of equity:
Derivatives in Net Investment Hedging Relationships (1)
 
Amount of Gains (Losses) Deferred in AOCI
 
Years Ended December 31,
 
2018
 
2017
 
2016
 
 
(In millions)
Foreign currency forwards
 
$
35

 
$
(155
)
 
$
(267
)
Currency options
 
(160
)
 
(290
)
 
(35
)
Total
 
$
(125
)
 
$
(445
)
 
$
(302
)
__________________
(1)
There was no ineffectiveness recognized for the Company’s hedges of net investments in foreign operations. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
Schedule of estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps
The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:
 
 
December 31,
 
 
2018
 
2017
Rating Agency Designation of Referenced
Credit Obligations (1)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
 
(Dollars in millions)
Aaa/Aa/A
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
$
4

 
$
354

 
1.7

 
$
7

 
$
375

 
2.6

Credit default swaps referencing indices
 
28

 
2,154

 
2.5

 
44

 
2,268

 
2.7

Subtotal
 
32

 
2,508

 
2.4

 
51

 
2,643

 
2.7

Baa
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
3

 
482

 
1.5

 
7

 
605

 
1.8

Credit default swaps referencing indices
 
40

 
8,056

 
5.0

 
183

 
7,662

 
5.0

Subtotal
 
43

 
8,538

 
4.8

 
190

 
8,267

 
4.8

Ba
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
—

 
15

 
2.0

 
1

 
115

 
3.4

Credit default swaps referencing indices
 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
—

 
15

 
2.0

 
1

 
115

 
3.4

B
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
—

 
—

 
—

 
2

 
20

 
3.5

Credit default swaps referencing indices
 
7

 
330

 
5.0

 
27

 
330

 
5.0

Subtotal
 
7

 
330

 
5.0

 
29

 
350

 
4.9

Total
 
$
82

 
$
11,391

 
4.3

 
$
271

 
$
11,375

 
4.3

__________________
(1)
The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.
(2)
The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.
(3)
Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or state and political subdivisions.
Estimated Fair Value of Derivative Assets and Liabilities after Master Netting Agreements and Cash Collateral
The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
 
 
December 31,
 
 
2018
 
2017
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
(In millions)
Gross estimated fair value of derivatives:
 
 
 
 
 
 
 
 
OTC-bilateral (1)
 
$
8,805

 
$
3,758

 
$
7,955

 
$
4,059

OTC-cleared (1), (6)
 
245

 
33

 
649

 
223

Exchange-traded
 
18

 
80

 
22

 
8

Total gross estimated fair value of derivatives (1)
 
9,068

 
3,871

 
8,626

 
4,290

Amounts offset on the consolidated balance sheets
 
—

 
—

 
—

 
—

Estimated fair value of derivatives presented on the consolidated balance sheets (1), (6)
 
9,068

 
3,871

 
8,626

 
4,290

Gross amounts not offset on the consolidated balance sheets:
 
 
 
 
 
 
 
 
Gross estimated fair value of derivatives: (2)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(2,570
)
 
(2,570
)
 
(2,528
)
 
(2,528
)
OTC-cleared
 
(25
)
 
(25
)
 
(35
)
 
(35
)
Exchange-traded
 
(1
)
 
(1
)
 
(1
)
 
(1
)
Cash collateral: (3), (4)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(4,709
)
 
—

 
(4,169
)
 
—

OTC-cleared
 
(145
)
 
—

 
(584
)
 
(179
)
Exchange-traded
 
—

 
(57
)
 
—

 
(5
)
Securities collateral: (5)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(1,266
)
 
(1,134
)
 
(1,004
)
 
(1,474
)
OTC-cleared
 
—

 
(8
)
 
—

 
(9
)
Exchange-traded
 
—

 
(7
)
 
—

 
(2
)
Net amount after application of master netting agreements and collateral
 
$
352

 
$
69

 
$
305

 
$
57

__________________
(1)
At December 31, 2018 and 2017, derivative assets included income or (expense) accruals reported in accrued investment income or in other liabilities of $99 million and $75 million, respectively, and derivative liabilities included (income) or expense accruals reported in accrued investment income or in other liabilities of ($59) million and ($49) million, respectively.
(2)
Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.
(3)
Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.
(4)
The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At December 31, 2018 and 2017, the Company received excess cash collateral of $135 million and $253 million, respectively, and provided excess cash collateral of $226 million and $272 million, respectively, which is not included in the table above due to the foregoing limitation.
(5)
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at December 31, 2018, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At December 31, 2018 and 2017, the Company received excess securities collateral with an estimated fair value of $70 million and $108 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At December 31, 2018 and 2017, the Company provided excess securities collateral with an estimated fair value of $212 million and $305 million, respectively, for its OTC-bilateral derivatives, $601 million and $522 million, respectively, for its OTC-cleared derivatives, and $90 million and $89 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
(6)
Effective January 16, 2018, the LCH amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. Effective January 3, 2017, the CME amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. See Note 1 for further information on the LCH and CME amendments.
Derivative Instruments, Gain (Loss) [Line Items]  
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of operations and the consolidated statements of equity. The table excludes the effects of Brighthouse derivatives prior to the Separation.
Derivatives in Cash Flow
Hedging Relationships
 
Amount of Gains
(Losses)Deferred in
AOCI on Derivatives
 
Amount and Location
of Gains (Losses)
Reclassified from
AOCI into Income (Loss)
 
Amount and Location
of Gains (Losses)
Recognized in Income
(Loss) on Derivatives
 
 
(Effective Portion)
 
(Effective Portion)
 
(Ineffective Portion)
 
 
 
 
Net Derivative
Gains (Losses)
 
Net Investment
Income
 
Other
Expenses
 
Net Derivative
Gains (Losses)
 
 
(In millions)
Year Ended December 31, 2018
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
$
(143
)
 
$
23

 
$
18

 
$
—

 
$
3

Interest rate forwards
 
(114
)
 
(2
)
 
2

 
1

 
—

Foreign currency swaps
 
414

 
(558
)
 
(5
)
 
2

 
8

Credit forwards
 
—

 
1

 
1

 
—

 
—

Total
 
$
157

 
$
(536
)
 
$
16

 
$
3

 
$
11

Year Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
$
78

 
$
24

 
$
16

 
$
—

 
$
18

Interest rate forwards
 
210

 
(11
)
 
2

 
1

 
(2
)
Foreign currency swaps
 
(335
)
 
974

 
—

 
2

 
(4
)
Credit forwards
 
—

 
1

 
—

 
—

 
—

Total
 
$
(47
)
 
$
988

 
$
18

 
$
3

 
$
12

Year Ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
$
50

 
$
56

 
$
12

 
$
—

 
$
(1
)
Interest rate forwards
 
(366
)
 
(1
)
 
4

 
1

 
—

Foreign currency swaps
 
589

 
(350
)
 
(2
)
 
2

 
1

Credit forwards
 
—

 
3

 
1

 
—

 
—

Total
 
$
273

 
$
(292
)
 
$
15

 
$
3

 
$
—
Schedule of Derivative Instruments
OTC-bilateral derivatives that are not subject to collateral agreements are excluded from this table.
 
 
December 31,
 
 
2018
 
2017
 
 
Derivatives Subject to Credit-Contingent Provisions
 
Derivatives Not Subject to Credit-Contingent Provisions
 
Total
 
Derivatives Subject to Credit-Contingent Provisions
 
Derivatives Not Subject to Credit-Contingent Provisions
 
Total
 
 
(In millions)
Estimated Fair Value of Derivatives in a Net Liability Position (1)
 
$
1,148

 
$
40

 
$
1,188

 
$
1,508

 
$
24

 
$
1,532

Estimated Fair Value of Collateral Provided:
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities AFS
 
$
1,218

 
$
9

 
$
1,227

 
$
1,675

 
$
26

 
$
1,701

Cash
 
$
6

 
$
—

 
$
6

 
$
—

 
$
—

 
$
—

Estimated Fair Value of Incremental Collateral Provided Upon:
 
 
 
 
 
 
 
 
 
 
 
 
One-notch downgrade in the Company’s credit or financial strength rating, as applicable
 
$
10

 
$
—

 
$
10

 
$
15

 
$
—

 
$
15

Downgrade in the Company’s credit or financial strength rating, as applicable, to a level that triggers full overnight collateralization or termination of the derivative position
 
$
10

 
$
—

 
$
10

 
$
20

 
$
—

 
$
20

__________________
(1)
After taking into consideration the existence of netting agreements.
Embedded Derivative Financial Instruments [Member]  
Derivative Instruments, Gain (Loss) [Line Items]  
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The following table presents changes in estimated fair value related to embedded derivatives:
 
 
Years Ended December 31,
 
 
2018
 
2017
 
2016
 
 
(In millions)
Net derivative gains (losses) (1)
 
$
(150
)
 
$
799

 
$
(181
)
__________________
(1)
The valuation of guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were $133 million, ($190) million and $156 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Schedule of Derivative Instruments
The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:
 
 
 
 
December 31,
 
 
Balance Sheet Location
 
2018
 
2017
 
 
 
 
(In millions)
Embedded derivatives within asset host contracts:
 
 
 
 
 
 
Ceded guaranteed minimum benefits
 
Premiums, reinsurance and other receivables
 
$
71

 
$
144

Options embedded in debt or equity securities (1)
 
Investments
 
—

 
(132
)
Embedded derivatives within asset host contracts
 
$
71

 
$
12

Embedded derivatives within liability host contracts:
 
 
 
 
Direct guaranteed minimum benefits
 
Policyholder account balances
 
$
298

 
$
32

Assumed guaranteed minimum benefits
 
Policyholder account balances
 
495

 
291

Funds withheld on ceded reinsurance
 
Other liabilities
 
(41
)
 
25

Fixed annuities with equity indexed returns
 
Policyholder account balances
 
58

 
70

Embedded derivatives within liability host contracts
 
$
810

 
$
418

__________________
(1)
Effective January 1, 2018, in connection with the adoption of new guidance related to the recognition and measurement of financial instruments, the Company was no longer required to bifurcate and account separately for derivatives embedded in equity securities (see Note 1). Beginning January 1, 2018, the change in fair value of equity securities was recognized as a component of net investment gains and losses.