Fair Value (Tables)

9 Months Ended

Sep. 30, 2019

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. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.

September 30, 2019							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	161	$	22,095	$	428	$	22,684
States, municipalities and political subdivisions	—		10,795		—		10,795
Asset-backed	—		8,784		196		8,980
Total fixed maturity securities	161		41,674		624		42,459
Equity securities:
Common stock	114		—		6		120
Non-redeemable preferred stock	52		653		16		721
Total equity securities	166		653		22		841
Short term and other	288		1,089		—		1,377
Total assets	$	615	$	43,416	$	646	$	44,677
Liabilities
Other liabilities	$	—	$	9	$	—	$	9
Total liabilities	$	—	$	9	$	—	$	9

December 31, 2018								Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2			Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	196	$	19,396		$	222	$	19,814
States, municipalities and political subdivisions	—		10,748			—		10,748
Asset-backed	—		8,787			197		8,984
Total fixed maturity securities	196		38,931			419		39,546
Equity securities:
Common stock	144		—			4		148
Non-redeemable preferred stock	48		570			14		632
Total equity securities	192		570			18		780
Short term and other	216		949			—		1,165
Total assets	$	604	$	40,450		$	437	$	41,491
Liabilities
Other liabilities	$	—	$	(4	)	$	—	$	(4	)
Total liabilities	$	—	$	(4	)	$	—	$	(4	)

Table of reconciliation for assets and liabilities 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)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities		Total
Balance as of July 1, 2019	$	338		$	—	$	193		$	22	$	553
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			—		—
Reported in Other comprehensive income (loss)	14			—		1			—		15
Total realized and unrealized investment gains (losses)	14			—		1			—		15
Purchases	79			—		22			—		101
Sales	—			—		—			—		—
Settlements	(3		)	—		(4		)	—		(7		)
Transfers into Level 3	—			—		—			—		—
Transfers out of Level 3	—			—		(16		)	—		(16		)
Balance as of September 30, 2019	$	428		$	—	$	196		$	22	$	646
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2019 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	—	$	—
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2019 recognized in Other comprehensive income (loss) in the period	14			—		2			—		16

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions			Asset-backed			Equity securities		Total
Balance as of July 1, 2018	$	94		$	1		$	273		$	17	$	385
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—			(2		)	1		(1		)
Reported in Other comprehensive income (loss)	—			—			—			—		—
Total realized and unrealized investment gains (losses)	—			—			(2		)	1		(1		)
Purchases	67			—			55			—		122
Sales	—			—			—			—		—
Settlements	(3		)	(1		)	(25		)	—		(29		)
Transfers into Level 3	30			—			29			—		59
Transfers out of Level 3	—			—			(32		)	—		(32		)
Balance as of September 30, 2018	$	188		$	—		$	298		$	18	$	504
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2018 recognized in Net income (loss) in the period	$	—		$	—		$	(2	)	$	1	$	(1	)
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2018 recognized in Other comprehensive income (loss) in the period	—			—			1			—		1

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities		Total
Balance as of January 1, 2019	$	222		$	—	$	197		$	18	$	437
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			2		2
Reported in Other comprehensive income (loss)	34			—		8			—		42
Total realized and unrealized investment gains (losses)	34			—		8			2		44
Purchases	211			—		42			2		255
Sales	—			—		—			—		—
Settlements	(7		)	—		(12		)	—		(19		)
Transfers into Level 3	—			—		45			—		45
Transfers out of Level 3	(32		)	—		(84		)	—		(116		)
Balance as of September 30, 2019	$	428		$	—	$	196		$	22	$	646
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2019 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	2	$	2
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2019 recognized in Other comprehensive income (loss) in the period	29			—		9			—		38

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions			Asset-backed			Equity securities			Total
Balance as of January 1, 2018	$	98		$	1		$	335		$	20		$	454
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	(1		)	—			5			(2		)	2
Reported in Other comprehensive income (loss)	(1		)	—			(6		)	—			(7		)
Total realized and unrealized investment gains (losses)	(2		)	—			(1		)	(2		)	(5		)
Purchases	69			—			126			—			195
Sales	(5		)	—			(72		)	—			(77		)
Settlements	(7		)	(1		)	(37		)	—			(45		)
Transfers into Level 3	35			—			42			—			77
Transfers out of Level 3	—			—			(95		)	—			(95		)
Balance as of September 30, 2018	$	188		$	—		$	298		$	18		$	504
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2018 recognized in Net income (loss) in the period	$	—		$	—		$	(2	)	$	(2	)	$	(4	)
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2018 recognized in Other comprehensive income (loss) in the period	(2		)	—			(2		)	—			(4		)

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. The weighted average rate is calculated based on fair value.

September 30, 2019	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	496	Discounted cash flow	Credit spread	1% - 6% (2%)

December 31, 2018	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	228	Discounted cash flow	Credit spread	1% - 12% (3%)

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 Condensed Consolidated Balance Sheets are presented in the following tables.

September 30, 2019	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	923	$	—	$	—	$	950	$	950
Note receivable	21		—		—		21		21
Liabilities
Long term debt	$	2,678	$	—	$	2,905	$	—	$	2,905

December 31, 2018	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	839	$	—	$	—	$	827	$	827
Note receivable	35		—		—		35		35
Liabilities
Long term debt	$	2,680	$	—	$	2,731	$	—	$	2,731