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Fair Value (Tables)
 12 Months Ended
Dec. 31, 2015
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
Assets and liabilities measured at fair value on a recurring basis are presented in the following tables.
December 31, 2015
 
 
 
 
 
 
Total
Assets/Liabilities
at Fair Value
(In millions)
Level 1
 
Level 2
 
Level 3
 
Assets
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Corporate and other bonds
$
—

 
$
17,592

 
$
168

 
$
17,760

States, municipalities and political subdivisions
—

 
13,172

 
2

 
13,174

Asset-backed:
 
 
 
 
 
 
 
Residential mortgage-backed
—

 
4,938

 
134

 
5,072

Commercial mortgage-backed
—

 
2,175

 
22

 
2,197

Other asset-backed
—

 
868

 
53

 
921

Total asset-backed
—

 
7,981

 
209

 
8,190

U.S. Treasury and obligations of government-sponsored enterprises
66

 
1

 
—

 
67

Foreign government
—

 
346

 
—

 
346

Redeemable preferred stock
35

 
—

 
—

 
35

Total fixed maturity securities
101

 
39,092

 
379

 
39,572

Equity securities
177

 
—

 
20

 
197

Other invested assets
—

 
44

 
—

 
44

Short term investments
448

 
1,134

 
—

 
1,582

Life settlement contracts, included in Other assets
—

 
—

 
74

 
74

Total assets
$
726

 
$
40,270

 
$
473

 
$
41,469

Liabilities
 
 
 
 
 

 
 

Other liabilities
$
—

 
$
(5
)
 
$
—

 
$
(5
)
Total liabilities
$
—

 
$
(5
)
 
$
—

 
$
(5
)
December 31, 2014
 
 
 
 
 
 
Total
Assets/Liabilities
at Fair Value
(In millions)
Level 1
 
Level 2
 
Level 3
 
Assets
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Corporate and other bonds
$
32

 
$
18,695

 
$
162

 
$
18,889

States, municipalities and political subdivisions
—

 
12,646

 
94

 
12,740

Asset-backed:
 
 
 
 
 
 
 

Residential mortgage-backed
—

 
5,044

 
189

 
5,233

Commercial mortgage-backed
—

 
2,061

 
83

 
2,144

Other asset-backed
—

 
580

 
655

 
1,235

Total asset-backed
—

 
7,685

 
927

 
8,612

U.S. Treasury and obligations of government-sponsored enterprises
28

 
3

 
—

 
31

Foreign government
41

 
413

 
—

 
454

Redeemable preferred stock
30

 
12

 
—

 
42

Total fixed maturity securities
131

 
39,454

 
1,183

 
40,768

Equity securities
145

 
61

 
16

 
222

Other invested assets
—

 
41

 
—

 
41

Short term investments
681

 
963

 
—

 
1,644

Life settlement contracts, included in Other assets
—

 
—

 
82

 
82

Total assets
$
957

 
$
40,519

 
$
1,281

 
$
42,757

Liabilities
 
 
 
 
 

 
 

Other liabilities
$
—

 
$
3

 
$
—

 
$
3

Total liabilities
$
—

 
$
3

 
$
—

 
$
3
Table of reconciliation for assets and liablities measured at fair value on a recurring basis using significant unobservable inputs
The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).
Level 3
(In millions)
Balance as of
January 1,
2015
 
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in net income (loss)
 
Net change in unrealized appreciation (depreciation) included in other comprehensive income (loss)
 
Purchases
 
Sales
 
Settlements
 
Transfers into
Level 3
 
Transfers out
of Level 3
 
Balance as of
December 31,
2015
 
Unrealized gains (losses) on Level 3 assets and liabilities held as of December 31, 2015 recognized in net income (loss)
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
162

 
$
(2
)
 
$
(3
)
 
$
65

 
$
(13
)
 
$
(35
)
 
$
40

 
$
(46
)
 
$
168

 
$
(2
)
States, municipalities and political subdivisions
94

 
1

 
—

 
—

 
—

 
(10
)
 
—

 
(83
)
 
2

 
—

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Residential mortgage-backed
189

 
5

 
(3
)
 
81

 
—

 
(35
)
 
14

 
(117
)
 
134

 
—

Commercial mortgage-backed
83

 
7

 
(4
)
 
23

 
—

 
(17
)
 
17

 
(87
)
 
22

 
—

Other asset-backed
655

 
3

 
3

 
130

 
(263
)
 
(52
)
 
7

 
(430
)
 
53

 
—

Total asset-backed
927

 
15

 
(4
)
 
234

 
(263
)
 
(104
)
 
38

 
(634
)
 
209

 
—

Total fixed maturity securities
1,183

 
14

 
(7
)
 
299

 
(276
)
 
(149
)
 
78

 
(763
)
 
379

 
(2
)
Equity securities
16

 
—

 
(1
)
 
4

 
—

 
—

 
1

 
—

 
20

 
—

Life settlement contracts
82

 
25

 
—

 
—

 
—

 
(33
)
 
—

 
—

 
74

 
1

Total
$
1,281

 
$
39

 
$
(8
)
 
$
303

 
$
(276
)
 
$
(182
)
 
$
79

 
$
(763
)
 
$
473

 
$
(1
)

Level 3
(In millions)
Balance as of
January 1,
2014
 
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in net income (loss)
 
Net change in unrealized appreciation (depreciation) included in other comprehensive income (loss)
 
Purchases
 
Sales
 
Settlements
 
Transfers into
Level 3
 
Transfers out
of Level 3
 
Balance as of
December 31,
2014
 
Unrealized gains (losses) on Level 3 assets and liabilities held as of December 31, 2014 recognized in net income (loss)
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
204

 
$
2

 
$
(1
)
 
$
33

 
$
(23
)
 
$
(16
)
 
$
18

 
$
(55
)
 
$
162

 
$
—

States, municipalities and political subdivisions
71

 
1

 
4

 
14

 
(10
)
 
—

 
14

 
—

 
94

 
—

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Residential mortgage-backed
331

 
(21
)
 
61

 
94

 
(174
)
 
(72
)
 
32

 
(62
)
 
189

 
—

Commercial mortgage-backed
151

 
7

 
(6
)
 
28

 
(60
)
 
(29
)
 
43

 
(51
)
 
83

 
—

Other asset-backed
446

 
2

 
(6
)
 
488

 
(111
)
 
(117
)
 
—

 
(47
)
 
655

 
(1
)
Total asset-backed
928

 
(12
)
 
49

 
610

 
(345
)
 
(218
)
 
75

 
(160
)
 
927

 
(1
)
Total fixed maturity securities
1,203

 
(9
)
 
52

 
657

 
(378
)
 
(234
)
 
107

 
(215
)
 
1,183

 
(1
)
Equity securities
11

 
3

 
(6
)
 
16

 
(8
)
 
—

 
—

 
—

 
16

 
—

Life settlement contracts
88

 
33

 
—

 
—

 
—

 
(39
)
 
—

 
—

 
82

 
8

Separate account business
1

 
—

 
—

 
—

 
—

 
—

 
—

 
(1
)
 
—

 
—

Total
$
1,303

 
$
27

 
$
46

 
$
673

 
$
(386
)
 
$
(273
)
 
$
107

 
$
(216
)
 
$
1,281

 
$
7
Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets
The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company.
December 31, 2015
Estimated Fair Value
(In millions)
 
Valuation Technique(s)
 
Unobservable Input(s)
 
Range
 (Weighted Average)
Fixed maturity securities
$
138

 
Discounted cash flow
 
Credit spread
 
3% - 184% (6%)
Life settlement contracts
74

 
Discounted cash flow
 
Discount rate risk premium
 
9%
 
 
 
 
 
Mortality assumption
 
55% - 1676% (164%)
December 31, 2014
Estimated Fair Value
(In millions)
 
Valuation Technique(s)
 
Unobservable Input(s)
 
Range
 (Weighted Average)
Fixed maturity securities
$
101

 
Discounted cash flow
 
Credit spread
 
2% - 13% (3%)
Equity securities
16

 
Market approach
 
Private offering price
 
$12 - $4,391 per share ($600)
Life settlement contracts
82

 
Discounted cash flow
 
Discount rate risk premium
 
9%
 
 
 
 
 
Mortality assumption
 
55% - 1676% (163%)
Carrying amount and estimated fair value of financial instrument assets and liabilities not measured at fair value
The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Consolidated Balance Sheets are presented in the following tables.
December 31, 2015
Carrying
Amount
 
Estimated Fair Value
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
Mortgage loans
$
678

 
$
—

 
$
—

 
$
688

 
$
688

Liabilities
 
 
 
 
 
 
 
 
 
Short term debt
$
350

 
$
—

 
$
360

 
$
—

 
$
360

Long term debt
2,212

 
—

 
2,433

 
—

 
2,433


December 31, 2014
Carrying
Amount
 
Estimated Fair Value
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
Notes receivable for the issuance of common stock
$
1

 
$
—

 
$
—

 
$
1

 
$
1

Mortgage loans
588

 
—

 
—

 
608

 
608

Liabilities
 
 
 
 
 
 
 
 
 
Long term debt
$
2,559

 
$
—

 
$
2,883

 
$
—

 
$
2,883