Investments

6 Months Ended

Jun. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Investments

6. Investments

Fixed Maturity Securities Available-for-Sale

Fixed Maturity Securities Available-for-Sale by Sector

The following table presents the fixed maturity securities AFS by sector. U.S. corporate and foreign corporate sectors include redeemable preferred stock. Residential mortgage-backed securities (“RMBS”) includes Agency, prime, alternative and sub-prime mortgage-backed securities. Asset-backed securities (“ABS”) includes securities collateralized by corporate loans and consumer loans. Municipals includes taxable and tax-exempt revenue bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple properties. RMBS, ABS and CMBS are collectively, “Structured Securities.”

	June 30, 2019											December 31, 2018
	Amortized Cost		Gross Unrealized							Estimated Fair Value		Amortized Cost		Gross Unrealized							Estimated Fair Value
			Gains		Temporary Losses		OTTI Losses (1)							Gains		Temporary Losses		OTTI Losses (1)
	(In millions)
U.S. corporate	$	76,928	$	7,216	$	432	$	—		$	83,712	$	77,761	$	3,467	$	2,280	$	—		$	78,948
Foreign government	58,605		9,205		256		—			67,554		56,353		6,406		471		—			62,288
Foreign corporate	58,682		4,730		1,014		—			62,398		56,290		2,438		2,025		—			56,703
U.S. government and agency	35,727		4,326		50		—			40,003		37,030		2,756		464		—			39,322
RMBS	27,635		1,465		88		(37		)	29,049		27,409		920		394		(26		)	27,961
ABS	13,687		98		72		1			13,712		12,552		74		153		1			12,472
Municipals	10,339		1,920		4		—			12,255		10,376		1,228		71		—			11,533
CMBS	9,626		413		33		—			10,006		9,045		115		122		—			9,038
Total fixed maturity securities AFS	$	291,229	$	29,373	$	1,949	$	(36	)	$	318,689	$	286,816	$	17,404	$	5,980	$	(25	)	$	298,265

__________________

(1) Noncredit OTTI losses included in AOCI in an unrealized gain position are 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 AFS with an estimated fair value of $35 million and $15 million, and unrealized gains (losses) of $2 million and ($1) million at June 30, 2019 and December 31, 2018, respectively.

Maturities of Fixed Maturity Securities AFS

The amortized cost and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at June 30, 2019:

	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 AFS
	(In millions)
Amortized cost	$	16,336	$	51,147	$	57,849	$	114,949	$	50,948	$	291,229
Estimated fair value	$	16,415	$	53,234	$	62,407	$	133,866	$	52,767	$	318,689

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities AFS 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 Securities AFS by Sector

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

	June 30, 2019								December 31, 2018
	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)
U.S. corporate	$	4,058	$	105	$	5,190	$	327	$	32,430	$	1,663	$	5,826	$	617
Foreign government	1,469		110		1,863		146		4,392		243		2,902		228
Foreign corporate	3,425		157		8,628		857		19,564		1,230		5,765		795
U.S. government and agency	2,155		9		2,634		41		6,813		58		8,937		406
RMBS	1,686		14		3,138		37		6,506		120		6,423		248
ABS	5,336		45		2,012		28		8,230		138		392		16
Municipals	64		—		124		4		1,380		46		349		25
CMBS	768		2		534		31		3,893		67		707		55
Total fixed maturity securities AFS	$	18,961	$	442	$	24,123	$	1,471	$	83,208	$	3,565	$	31,301	$	2,390
Total number of securities in an unrealized loss position	1,743				1,992				6,913				2,335

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

As described more fully in Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2018 Annual Report, the Company performs a regular evaluation of all investment classes for impairment, including fixed maturity securities AFS and perpetual hybrid securities, in accordance with its impairment policy, in order to evaluate whether such investments are other-than-temporarily impaired.

Current Period Evaluation

Based on the Company’s current evaluation of its 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 June 30, 2019. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), and changes in credit ratings, collateral valuation and foreign currency exchange rates. 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 AFS decreased $4.0 billion for the six months ended June 30, 2019 to $1.9 billion. The decrease in gross unrealized losses for the six months ended June 30, 2019 was primarily attributable to decreases in interest rates and narrowing credit spreads.

At June 30, 2019, $156 million of the total $1.9 billion of gross unrealized losses were from 48 fixed maturity securities AFS with an unrealized loss position of 20% or more of amortized cost for six months or greater.

Investment Grade Fixed Maturity Securities AFS

Of the $156 million of gross unrealized losses on fixed maturity securities AFS with an unrealized loss of 20% or more of amortized cost for six months or greater, $97 million, or 62%, were related to gross unrealized losses on 18 investment grade fixed maturity securities AFS. Unrealized losses on investment grade fixed maturity securities AFS are principally related to widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities AFS, rising interest rates since purchase.

Below Investment Grade Fixed Maturity Securities AFS

Of the $156 million of gross unrealized losses on fixed maturity securities AFS with an unrealized loss of 20% or more of amortized cost for six months or greater, $59 million, or 38%, were related to gross unrealized losses on 30 below investment grade fixed maturity securities AFS. Unrealized losses on below investment grade fixed maturity securities AFS are principally related to U.S. and foreign corporate securities (primarily industrial and financial institutions) and foreign government securities and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty. Management evaluates U.S. corporate and foreign corporate securities based on factors such as expected cash flows, financial condition and near-term and long-term prospects of the issuers. Management evaluates foreign government securities based on factors impacting the issuers such as expected cash flows, financial condition and any country-specific economic or public sector programs.

Equity Securities

Equity securities are summarized as follows at:

	June 30, 2019				December 31, 2018
	Estimated Fair Value		% of Total		Estimated Fair Value		% of Total
	(Dollars in millions)
Common stock	$	1,067	72.3	%	$	1,037	72.0	%
Non-redeemable preferred stock	409		27.7		403		28.0
Total equity securities	$	1,476	100.0	%	$	1,440	100.0	%

Contractholder-Directed Equity Securities and Fair Value Option Securities

As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2018 Annual Report, contractholder-directed equity securities and fair value option (“FVO”) securities (“FVO Securities”) (collectively, “Unit-linked and FVO Securities”) include three categories of investments for which the FVO has been elected, or are otherwise required to be carried at estimated fair value.

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:

	June 30, 2019					December 31, 2018
	Carrying Value			% of Total		Carrying Value			% of Total
	(Dollars in millions)
Mortgage loans:
Commercial	$	49,570		63.6	%	$	48,463		64.0	%
Agricultural	15,334			19.7		14,905			19.7
Residential	13,188			16.9		12,427			16.4
Total recorded investment	78,092			100.2		75,795			100.1
Valuation allowances	(357		)	(0.5	)	(342		)	(0.5	)
Subtotal mortgage loans, net	77,735			99.7		75,453			99.6
Residential — FVO (1)	262			0.3		299			0.4
Total mortgage loans, net	$	77,997		100.0	%	$	75,752		100.0	%

__________________

(1) Information on residential mortgage loans — FVO is presented in Note 8. The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis.

The amount of net discounts, included within total recorded investment, primarily residential, was $935 million and $944 million at June 30, 2019 and December 31, 2018, respectively.

Purchases of mortgage loans, primarily residential, were $567 million and $1.9 billion for the three months and six months ended June 30, 2019, respectively, and $666 million and $973 million for the three months and six months ended June 30, 2018, respectively.

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:

	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
	(In millions)
June 30, 2019
Commercial	$	—	$	—	$	—	$	—	$	—	$	49,570	$	246	$	—
Agricultural	31		31		3		191		190		15,113		45		218
Residential	—		—		—		504		403		12,785		63		403
Total	$	31	$	31	$	3	$	695	$	593	$	77,468	$	354	$	621
December 31, 2018
Commercial	$	—	$	—	$	—	$	—	$	—	$	48,463	$	238	$	—
Agricultural	31		31		3		169		169		14,705		43		197
Residential	—		—		—		431		386		12,041		58		386
Total	$	31	$	31	$	3	$	600	$	555	$	75,209	$	339	$	583

The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $0, $172 million and $401 million, respectively, for the three months ended June 30, 2019, and $0, $181 million and $396 million, respectively, for the six months ended June 30, 2019.

The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $0, $122 million and $351 million, respectively, for the three months ended June 30, 2018, and $0, $97 million and $342 million, respectively, for the six months ended June 30, 2018.

Valuation Allowance Rollforward by Portfolio Segment

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

	Six Months Ended June 30,
	2019										2018
	Commercial		Agricultural		Residential			Total			Commercial		Agricultural		Residential			Total
	(In millions)
Balance, beginning of period	$	238	$	46	$	58		$	342		$	214	$	41	$	59		$	314
Provision (release)	8		2		9			19			13		—		2			15
Charge-offs, net of recoveries	—		—		(4		)	(4		)	—		—		(4		)	(4		)
Balance, end of period	$	246	$	48	$	63		$	357		$	227	$	41	$	57		$	325

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								% of Total
	> 1.20x		1.00x - 1.20x		< 1.00x		Total
	(Dollars in millions)
June 30, 2019
Loan-to-value ratios:
Less than 65%	$	41,424	$	773	$	156	$	42,353	85.4	%	$	43,922	85.7	%
65% to 75%	5,649		26		166		5,841		11.8		5,975		11.7
76% to 80%	377		228		55		660		1.3		645		1.3
Greater than 80%	482		234		—		716		1.5		690		1.3
Total	$	47,932	$	1,261	$	377	$	49,570	100.0	%	$	51,232	100.0	%
December 31, 2018
Loan-to-value ratios:
Less than 65%	$	40,360	$	827	$	101	$	41,288	85.2	%	$	41,599	85.3	%
65% to 75%	5,790		—		25		5,815		12.0		5,849		12.0
76% to 80%	423		209		56		688		1.4		664		1.4
Greater than 80%	496		176		—		672		1.4		635		1.3
Total	$	47,069	$	1,212	$	182	$	48,463	100.0	%	$	48,747	100.0	%

Credit Quality of Agricultural Mortgage Loans

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

	June 30, 2019				December 31, 2018
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Loan-to-value ratios:
Less than 65%	$	14,250	92.9	%	$	13,704	92.0	%
65% to 75%	992		6.5		1,145		7.7
76% to 80%	69		0.4		33		0.2
Greater than 80%	23		0.2		23		0.1
Total	$	15,334	100.0	%	$	14,905	100.0	%

Credit Quality of Residential Mortgage Loans

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

	June 30, 2019				December 31, 2018
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Performance indicators:
Performing	$	12,755	96.7	%	$	11,956	96.2	%
Nonperforming (1)	433		3.3		471		3.8
Total	$	13,188	100.0	%	$	12,427	100.0	%

__________________

(1) Includes residential mortgage loans in process of foreclosure of $124 million and $140 million at June 30, 2019 and December 31, 2018, 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 June 30, 2019 and December 31, 2018. 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
	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
	(In millions)
Commercial	$	4	$	9	$	4	$	9	$	176	$	176
Agricultural	134		204		52		109		105		105
Residential	433		471		38		35		395		436
Total	$	571	$	684	$	94	$	153	$	676	$	717

Real Estate and Real Estate Joint Ventures

The Company’s real estate investment portfolio is diversified by property type, geography and income stream, including income from operating leases, operating income and equity method income from real estate joint ventures. Real estate investments, by income type, as well as income earned, are as follows at and for the periods indicated:

	June 30, 2019		December 31, 2018		Three Months Ended June 30,				Six Months Ended June 30,
					2019		2018		2019		2018
	Carrying Value				Income
	(In millions)
Leased real estate investments	$	4,502	$	4,132	$	90	$	104	$	182	$	208
Other real estate investments	479		461		56		57		90		90
Real estate joint ventures	5,345		5,105		33		34		37		65
Total real estate and real estate joint ventures	$	10,326	$	9,698	$	179	$	195	$	309	$	363

The carrying value of real estate investments acquired through foreclosure was $44 million and $45 million at June 30, 2019 and December 31, 2018, respectively. Depreciation expense on real estate investments was $25 million and $48 million for the three months and six months ended June 30, 2019, respectively, and $21 million and $47 million for the three months and six months ended June 30, 2018, respectively. Real estate investments were net of accumulated depreciation of $991 million and $931 million at June 30, 2019 and December 31, 2018, respectively.

Leases

Leased Real Estate Investments - Operating Leases

The Company, as lessor, leases investment real estate, principally commercial real estate for office and retail use, through a variety of operating lease arrangements, which typically include tenant reimbursement for property operating costs and options to renew or extend the lease. In some circumstances, leases may include an option for the lessee to purchase the property. In addition, certain leases of retail space may stipulate that a portion of the income earned is contingent upon the level of the tenants’ revenues. The Company has elected a practical expedient of not separating non-lease components related to reimbursement of property operating costs from associated lease components. These property operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over the same period of time as the operating lease. Therefore, the combined component is accounted for as an operating lease. Risk is managed through lessee credit analysis, property type diversification, and geographic diversification, primarily across the United States. Leased real estate investments and income earned, by property type, are as follows at and for the periods indicated:

	June 30, 2019		December 31, 2018		Three Months Ended June 30,				Six Months Ended June 30,
					2019		2018		2019		2018
	Carrying Value				Income
	(In millions)
Leased real estate investments:
Office	$	2,205	$	1,999	$	42	$	44	$	86	$	89
Retail	1,096		1,006		25		25		49		51
Apartment	256		253		5		19		10		37
Industrial	276		223		11		10		22		19
Land	505		489		5		4		10		9
Hotel	95		94		1		—		3		—
Other	69		68		1		2		2		3
Total leased real estate investments	$	4,502	$	4,132	$	90	$	104	$	182	$	208

Future contractual receipts under operating leases at June 30, 2019 are $154 million for the remainder of 2019, $246 million in 2020, $193 million in 2021, $163 million in 2022, $142 million in 2023, $992 million thereafter, and in total are $1.9 billion.

Leveraged and Direct Financing Leases

The Company has diversified leveraged lease and direct financing lease portfolios. Its leveraged leases principally include renewable energy generation facilities, rail cars, commercial real estate and commercial aircraft, and its direct financing leases principally include commercial real estate. These assets are leased through a variety of lease arrangements, which may include options to renew or extend the lease and options for the lessee to purchase the property. Residual values are estimated using available third-party data at inception of the lease. Risk is managed through lessee credit analysis, asset allocation, geographic diversification, and ongoing reviews of estimated residual values, using available third-party data and, in certain leases, linking the amount of future rental receipts to changes in inflation rates. Generally, estimated residual values are not guaranteed by the lessee or a third party.

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

	June 30, 2019						December 31, 2018
	Leveraged Leases			Direct Financing Leases			Leveraged Leases			Direct Financing Leases
	(In millions)
Lease receivables, net (1)	$	707		$	2,017		$	715		$	1,855
Estimated residual values	807			42			807			42
Subtotal	1,514			2,059			1,522			1,897
Unearned income	(391		)	(742		)	(414		)	(705		)
Investment in leases	$	1,123		$	1,317		$	1,108		$	1,192

__________________

(1) Future contractual receipts under direct financing leases at June 30, 2019 are $62 million for the remainder of 2019, $109 million in 2020, $108 million in 2021, $132 million in 2022, $104 million in 2023, $1.5 billion thereafter, and in total $2.0 billion.

Lease 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 generally range from one to 25 years but in certain circumstances can be over 25 years. For lease receivables, the primary credit quality indicator is whether the lease receivable is performing or nonperforming, which is assessed monthly. The Company generally defines nonperforming lease receivables as those that are 90 days or more past due. At both June 30, 2019 and December 31, 2018, all leveraged lease receivables were performing and over 99% of direct financing lease receivables were performing.

The Company’s deferred income tax liability related to leveraged leases was $510 million and $519 million at June 30, 2019 and December 31, 2018, respectively.

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

	Three Months Ended June 30,								Six Months Ended June 30,
	2019				2018				2019				2018
	Leveraged Leases		Direct Financing Leases		Leveraged Leases		Direct Financing Leases		Leveraged Leases		Direct Financing Leases		Leveraged Leases		Direct Financing Leases
	(In millions)
Lease investment income	$	12	$	27	$	12	$	27	$	24	$	47	$	23	$	47
Less: Income tax expense	3		6		2		6		5		10		5		10
Lease investment income, net of income tax	$	9	$	21	$	10	$	21	$	19	$	37	$	18	$	37

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 $11.4 billion and $9.0 billion at June 30, 2019 and December 31, 2018, respectively.

Net Unrealized Investment Gains (Losses)

Unrealized investment gains (losses) on fixed maturity securities AFS and derivatives and the effect on DAC, VOBA, deferred sales inducements (“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:

	June 30, 2019			December 31, 2018
	(In millions)
Fixed maturity securities AFS	$	27,390		$	11,356
Fixed maturity securities AFS with noncredit OTTI losses included in AOCI	36			25
Total fixed maturity securities AFS	27,426			11,381
Derivatives	2,680			2,127
Other	265			290
Subtotal	30,371			13,798
Amounts allocated from:
Future policy benefits	(1,054		)	31
DAC, VOBA and DSI	(2,683		)	(1,231		)
Policyholder dividend obligation	(1,834		)	(428		)
Subtotal	(5,571		)	(1,628		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	(5		)	(3		)
Deferred income tax benefit (expense)	(6,401		)	(3,502		)
Net unrealized investment gains (losses)	18,394			8,665
Net unrealized investment gains (losses) attributable to noncontrolling interests	(13		)	(10		)
Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	18,381		$	8,655

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

	Six Months Ended June 30, 2019
	(In millions)
Balance, beginning of period	$	8,655
Cumulative effects of changes in accounting principles, net of income tax (Note 1)	21
Fixed maturity securities AFS on which noncredit OTTI losses have been recognized	11
Unrealized investment gains (losses) during the period	16,536
Unrealized investment gains (losses) relating to:
Future policy benefits	(1,085		)
DAC, VOBA and DSI	(1,452		)
Policyholder dividend obligation	(1,406		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	(2		)
Deferred income tax benefit (expense)	(2,894		)
Net unrealized investment gains (losses)	18,384
Net unrealized investment gains (losses) attributable to noncontrolling interests	(3		)
Balance, end of period	$	18,381
Change in net unrealized investment gains (losses)	$	9,729
Change in net unrealized investment gains (losses) attributable to noncontrolling interests	(3		)
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	9,726

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, at estimated fair value at June 30, 2019 and December 31, 2018, were in fixed income securities of the Japanese government and its agencies of $33.2 billion and $30.2 billion, respectively, and in fixed income securities of the South Korean government and its agencies of $7.4 billion and $7.1 billion, respectively.

Securities Lending and Repurchase Agreements

Securities, Collateral and Reinvestment Portfolio

A summary of the securities lending and repurchase agreements transactions is as follows:

	June 30, 2019								December 31, 2018
	Securities on Loan (1)								Securities on Loan (1)
	Amortized Cost		Estimated Fair Value		Cash Collateral Received from Counterparties (2), (3)		Reinvestment Portfolio at Estimated Fair Value		Amortized Cost		Estimated Fair Value		Cash Collateral Received from Counterparties (2), (3)		Reinvestment Portfolio at Estimated Fair Value
	(In millions)
Securities lending	$	15,472	$	17,396	$	17,782	$	17,952	$	16,969	$	17,724	$	18,005	$	18,074
Repurchase agreements	$	1,520	$	1,648	$	1,612	$	1,629	$	1,033	$	1,093	$	1,067	$	1,069

__________________

(1) Securities on loan in connection with securities lending are included within fixed maturities securities AFS and cash equivalents and securities on loan in connection with repurchase agreements are included within fixed maturities securities AFS, short-term investments and cash equivalents.

(2) In connection with securities lending, in addition to cash collateral received, the Company received from counterparties security collateral of $10 million and $78 million at June 30, 2019 and December 31, 2018, respectively, which may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements.

(3) The securities lending liability for cash collateral is included within payables for collateral under securities loaned and other transactions, and the repurchase agreements liability for cash collateral is included within payables for collateral under securities loaned and other transactions and other liabilities.

Contractual Maturities

A summary of the remaining contractual maturities of securities lending agreements and repurchase agreements is as follows:

	June 30, 2019								December 31, 2018
	Remaining Maturities								Remaining Maturities
	Open (1)		1 Month or Less		Over  1 to 6 Months		Total		Open (1)		1 Month or Less		Over 1 to 6 Months		Total
	(In millions)
Cash collateral liability by loaned security type:
Securities lending:
U.S. government and agency	$	3,440	$	4,147	$	9,081	$	16,668	$	2,736	$	8,995	$	5,220	$	16,951
Foreign government	—		380		666		1,046		—		214		761		975
Agency RMBS	—		68		—		68		—		79		—		79
Total	$	3,440	$	4,595	$	9,747	$	17,782	$	2,736	$	9,288	$	5,981	$	18,005
Repurchase agreements:
U.S. government and agency	$	—	$	1,535	$	—	$	1,535	$	—	$	1,000	$	—	$	1,000
All other corporate and government	—		6		71		77		—		—		67		67
Total	$	—	$	1,541	$	71	$	1,612	$	—	$	1,000	$	67	$	1,067

__________________

(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. The estimated fair value of the securities on loan related to this cash collateral at June 30, 2019 was $3.4 billion, all 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.

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 securities lending and repurchase agreements reinvestment portfolios acquired with the cash collateral consist principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents 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.

Federal Home Loan Bank of Boston Advance Agreements

At June 30, 2019 and December 31, 2018, a subsidiary of the Company had pledged municipals with an estimated fair value of $1.1 billion and $1.2 billion, respectively, as collateral, and at both June 30, 2019 and December 31, 2018, received $800 million in cash advances under short-term advance agreements with the Federal Home Loan Bank (“FHLB”) of Boston. The liability to return the cash advances is included within payables for collateral under securities loaned and other transactions. The estimated fair value of the reinvestment portfolio acquired with the cash advances was $833 million and $799 million at June 30, 2019 and December 31, 2018, respectively, and consisted primarily of Structured Securities, U.S. and foreign corporate securities and U.S. government and agency securities. At both June 30, 2019 and December 31, 2018, the reinvestment portfolio also included a $33 million, at redemption value, required investment in FHLB of Boston common stock. The subsidiary is permitted to withdraw any portion of the pledged collateral over the minimum collateral requirement at any time, other than in the event of a default by the subsidiary.

The cash advance liability by loaned security type and remaining contractual maturities of the agreements was as follows at:

	June 30, 2019								December 31, 2018
	Remaining Maturities								Remaining Maturities
	1 Month or Less		Over 1 to 6 Months		6 Months to 1 Year		Total		1 Month or Less		Over 1 to 6 Months		6 Months to 1 Year		Total
	(In millions)
Cash advance liability by loaned security type:
Municipals	$	200	$	600	$	—	$	800	$	150	$	650	$	—	$	800

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:

	June 30, 2019		December 31, 2018
	(In millions)
Invested assets on deposit (regulatory deposits)	$	1,940	$	1,788
Invested assets held in trust (collateral financing arrangement and reinsurance agreements)	3,241		2,971
Invested assets pledged as collateral (1)	24,237		24,168
Total invested assets on deposit, held in trust and pledged as collateral	$	29,418	$	28,927

__________________

(1) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements, secured debt, a collateral financing arrangement (see Notes 4, 12 and 13 of the Notes to the Consolidated Financial Statements included in the 2018 Annual Report) and derivative transactions (see Note 7).

See “— Securities Lending and Repurchase Agreements” for information regarding securities supporting securities lending and repurchase agreement transactions and Note 5 for information regarding investments designated to the closed block. In addition, the restricted investment in FHLB common stock was $800 million and $793 million, at redemption value, at June 30, 2019 and December 31, 2018, respectively.

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 investment-related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:

	June 30, 2019				December 31, 2018
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
Renewable energy partnership (1)	$	99	$	—	$	102	$	—
Investment funds (2)	138		1		79		1
Other investments (1)	20		5		21		5
Total	$	257	$	6	$	202	$	6

__________________

(1) Assets of the renewable energy partnership and other investments primarily consisted of other invested assets.

(2) Assets of the investment funds primarily consisted of other invested assets at June 30, 2019 and cash and cash equivalents at December 31, 2018.

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:

	June 30, 2019				December 31, 2018
	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
	(In millions)
Fixed maturity securities AFS:
Structured Securities (2)	$	51,175	$	51,175	$	47,874	$	47,874
U.S. and foreign corporate	1,358		1,358		932		932
Foreign government	139		139		—		—
Other limited partnership interests	5,997		11,020		5,641		9,888
Other invested assets	1,762		1,875		1,906		2,063
Other investments	412		426		296		300
Total	$	60,843	$	65,993	$	56,649	$	61,057

__________________

(1) The maximum exposure to loss relating to fixed maturity 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 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 $73 million and $94 million at June 30, 2019 and December 31, 2018, 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.

As described in Note 16, 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 for both the six months ended June 30, 2019 and 2018.

For the three months ended June 30, 2019, the Company securitized certain residential mortgage loans and acquired an interest in the related RMBS issued. While the Company has a variable interest in the issuer of the securities, it is not the primary beneficiary of the issuer of the securities since it does not have any rights to remove the servicer or veto rights over the servicer’s actions. For the three months ended June 30, 2019, the carrying value and the estimated fair value of mortgage loans securitized were $443 million and $467 million, respectively, resulting in a gain of $24 million, which was included within net investment gains (losses). The estimated fair value of the RMBS acquired in connection with the securitizations was $133 million, which was included in the carrying amount and maximum exposure to loss for Structured Securities presented above. See Note 8 for information on how the estimated fair value of mortgage loans and RMBS is determined, the valuation approaches and key inputs, their placement in the fair value hierarchy, and for certain RMBS, quantitative information about the significant unobservable inputs and the sensitivity of their estimated fair value to changes in those inputs.

Net Investment Income

The components of net investment income were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In millions)
Investment income:
Fixed maturity securities AFS	$	3,024	$	3,014	$	5,963	$	5,910
Equity securities	15		15		32		31
FVO Securities (1)	38		8		93		14
Mortgage loans	943		815		1,855		1,607
Policy loans	129		127		257		251
Real estate and real estate joint ventures	179		195		309		363
Other limited partnership interests	243		120		366		327
Cash, cash equivalents and short-term investments	113		95		241		167
Operating joint ventures	38		19		56		32
Other	71		94		149		200
Subtotal	4,793		4,502		9,321		8,902
Less: Investment expenses	361		315		717		617
Subtotal, net	4,432		4,187		8,604		8,285
Unit-linked investments (1)	261		286		997		(67		)
Net investment income	$	4,693	$	4,473	$	9,601	$	8,218

__________________

(1) Changes in estimated fair value subsequent to purchase for investments still held as of the end of the respective periods included in net investment income were principally from contractholder-directed equity securities supporting unit-linked variable annuity type liabilities (“Unit-linked investments”), and were $149 million and $757 million for the three months and six months ended June 30, 2019, respectively, and $165 million and ($174) million for the three months and six months ended June 30, 2018, respectively.

The Company invests in real estate joint ventures, other limited partnership interests and tax credit and renewable energy partnerships, and also does business through certain operating joint ventures, the majority of which are accounted for under the equity method. Net investment income from other limited partnership interests and operating joint ventures, accounted for under the equity method, and real estate joint ventures and tax credit and renewable energy partnerships, primarily accounted for under the equity method, totaled $241 million and $330 million for the three months and six months ended June 30, 2019, respectively, and $97 million and $302 million for the three months and six months ended June 30, 2018, respectively.

Net Investment Gains (Losses)

Components of Net Investment Gains (Losses)

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In millions)
Total gains (losses) on fixed maturity securities AFS:
Total OTTI losses recognized — by sector and industry:
U.S. and foreign corporate securities — by industry:
Industrial	$	—		$	—		$	(8	)	$	—
Total U.S. and foreign corporate securities	—			—			(8		)	—
RMBS	—			—			(2		)	—
OTTI losses on fixed maturity securities AFS recognized in earnings	—			—			(10		)	—
Fixed maturity securities AFS — net gains (losses) on sales and disposals	138			(46		)	124			(141		)
Total gains (losses) on fixed maturity securities AFS	138			(46		)	114			(141		)
Total gains (losses) on equity securities:
Equity securities — net gains (losses) on sales and disposals	4			14			47			116
Change in estimated fair value of equity securities (1)	(6		)	20			58			(113		)
Total gains (losses) on equity securities	(2		)	34			105			3
Mortgage loans	14			(15		)	(1		)	(36		)
Real estate and real estate joint ventures	1			89			6			114
Other limited partnership interests	—			8			—			8
Other (2), (3)	(42		)	(58		)	(110		)	(188		)
Subtotal	109			12			114			(240		)
Change in estimated fair value of other limited partnership interests and real estate joint ventures	3			(1		)	(12		)	(6		)
Non-investment portfolio gains (losses) (4)	(51		)	(238		)	(26		)	(314		)
Subtotal	(48		)	(239		)	(38		)	(320		)
Total net investment gains (losses)	$	61		$	(227	)	$	76		$	(560	)

__________________

(1) Changes in estimated fair value subsequent to purchase for equity securities still held as of the end of the period included in net investment gains (losses) were ($1) million and $92 million for the three months and six months ended June 30, 2019, respectively, and $31 million and ($5) million for the three months and six months ended June 30, 2018, respectively.

(2) Other gains (losses) for the three months and six months ended June 30, 2019 included tax credit partnership impairment losses of $14 million and $92 million, respectively, and a renewable energy partnership disposal gain of $46 million for the six months ended June 30, 2019.

(3) Other gains (losses) included renewable energy partnership disposal losses of $83 million for both the three months and six months ended June 30, 2018 and leveraged lease impairment losses of $105 million for the six months ended June 30, 2018.

(4) Non-investment portfolio gains (losses) for the three months and six months ended June 30, 2018, included a loss of $159 million and $327 million, respectively, which represents both the change in estimated fair value of Brighthouse Financial, Inc. common stock (“FVO Brighthouse Common Stock”) held by the Company through date of disposal and the loss on disposal in June 2018.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were $25 million and $39 million for the three months and six months ended June 30, 2019, respectively, and ($47) million and $18 million for the three months and six months ended June 30, 2018, respectively.

Sales or Disposals and Impairments of Fixed Maturity Securities AFS

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In millions)
Proceeds	$	13,895		$	20,183		$	29,720		$	39,253
Gross investment gains	$	262		$	149		$	467		$	255
Gross investment losses	(124		)	(195		)	(343		)	(396		)
OTTI losses	—			—			(10		)	—
Net investment gains (losses)	$	138		$	(46	)	$	114		$	(141	)

Credit Loss Rollforward of Fixed Maturity Securities AFS

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In millions)
Balance, beginning of period	$	85		$	128		$	89		$	138
Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI	(8		)	(17		)	(11		)	(26		)
Increase in cash flows — accretion of previous credit loss OTTI	—			—			(1		)	(1		)
Balance, end of period	$	77		$	111		$	77		$	111