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Investments (Tables)
 6 Months Ended
Jun. 30, 2015
Investments [Abstract]  
Schedule for fixed income securities at amortized cost, gross unrealized gains and losses and fair value
The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows:
($ in millions)
Amortized
 
Gross unrealized
 
Fair
 
cost
 
Gains
 
Losses
 
value
June 30, 2015
 

 
 

 
 

 
 

U.S. government and agencies
$
690

 
$
65

 
$
—

 
$
755

Municipal
3,090

 
419

 
(20
)
 
3,489

Corporate
18,545

 
1,226

 
(201
)
 
19,570

Foreign government
470

 
47

 
(1
)
 
516

Asset-backed securities (“ABS”)
982

 
9

 
(20
)
 
971

Residential mortgage-backed securities (“RMBS”)
477

 
58

 
(4
)
 
531

Commercial mortgage-backed securities (“CMBS”)
500

 
38

 
(2
)
 
536

Redeemable preferred stock
13

 
3

 
—

 
16

Total fixed income securities
$
24,767

 
$
1,865

 
$
(248
)
 
$
26,384

 
 
 
 
 
 
 
 
December 31, 2014
 

 
 

 
 

 
 

U.S. government and agencies
$
668

 
$
102

 
$
—

 
$
770

Municipal
3,156

 
520

 
(14
)
 
3,662

Corporate
19,465

 
1,670

 
(150
)
 
20,985

Foreign government
654

 
81

 
—

 
735

ABS
773

 
13

 
(21
)
 
765

RMBS
554

 
55

 
(4
)
 
605

CMBS
538

 
43

 
(2
)
 
579

Redeemable preferred stock
14

 
2

 
—

 
16

Total fixed income securities
$
25,822

 
$
2,486

 
$
(191
)
 
$
28,117
Schedule for fixed income securities based on contractual maturities
The scheduled maturities for fixed income securities are as follows as of June 30, 2015:
($ in millions)
Amortized
cost
 
Fair
value
Due in one year or less
$
1,129

 
$
1,145

Due after one year through five years
5,566

 
5,937

Due after five years through ten years
9,426

 
9,782

Due after ten years
6,687

 
7,482

 
22,808

 
24,346

ABS, RMBS and CMBS
1,959

 
2,038

Total
$
24,767

 
$
26,384
Schedule of net investment income
Net investment income is as follows:
 
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
Fixed income securities
$
326

 
$
356

 
$
660

 
$
830

Mortgage loans
52

 
65

 
101

 
140

Equity securities
8

 
6

 
13

 
10

Limited partnership interests
73

 
91

 
145

 
158

Short-term investments
1

 
1

 
1

 
1

Policy loans
8

 
9

 
17

 
20

Other
18

 
13

 
36

 
28

Investment income, before expense
486

 
541

 
973

 
1,187

Investment expense
(13
)
 
(16
)
 
(29
)
 
(36
)
Net investment income
$
473

 
$
525

 
$
944

 
$
1,151
Schedule of realized capital gains and losses by asset type
Realized capital gains and losses by asset type are as follows:
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
Fixed income securities
$
46

 
$
5

 
$
114

 
$
—

Mortgage loans
1

 
(2
)
 
1

 
1

Equity securities
16

 
14

 
48

 
16

Limited partnership interests
(2
)
 
(28
)
 
2

 
(33
)
Derivatives
(1
)
 
1

 
6

 
3

Other
(1
)
 
—

 
(1
)
 
3

Realized capital gains and losses
$
59

 
$
(10
)
 
$
170

 
$
(10
)
Schedule of realized capital gains and losses by transaction type
Realized capital gains and losses by transaction type are as follows:
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
Impairment write-downs
$
(5
)
 
$
—

 
$
(12
)
 
$
(4
)
Change in intent write-downs
(4
)
 
(14
)
 
(7
)
 
(19
)
Net other-than-temporary impairment losses recognized in earnings
(9
)
 
(14
)
 
(19
)
 
(23
)
Sales
69

 
1

 
186

 
8

Valuation and settlements of derivative instruments
(1
)
 
3

 
3

 
5

Realized capital gains and losses
$
59

 
$
(10
)
 
$
170

 
$
(10
)
Schedule of other-than-temporary impairment losses by asset type
Other-than-temporary impairment losses by asset type are as follows:
($ in millions)
Three months ended June 30, 2015
 
Three months ended June 30, 2014
 
Gross
 
Included
in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

Corporate
$
(4
)
 
$
3

 
$
(1
)
 
$
—

 
$
—

 
$
—

ABS
(2
)
 
—

 
(2
)
 
(1
)
 
—

 
(1
)
RMBS
—

 
—

 
—

 
3

 
—

 
3

Total fixed income securities
(6
)
 
3

 
(3
)
 
2

 
—

 
2

Equity securities
(5
)
 
—

 
(5
)
 
(4
)
 
—

 
(4
)
Limited partnership interests
—

 
—

 
—

 
(12
)
 
—

 
(12
)
Other
(1
)
 
—

 
(1
)
 
—

 
—

 
—

Other-than-temporary impairment losses
$
(12
)
 
$
3

 
$
(9
)
 
$
(14
)
 
$
—

 
$
(14
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2015
 
Six months ended June 30, 2014
 
Gross
 
Included
in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

Municipal
$
—

 
$
—

 
$
—

 
$
(1
)
 
$
—

 
$
(1
)
Corporate
(7
)
 
3

 
(4
)
 
—

 
—

 
—

ABS
(2
)
 
—

 
(2
)
 
(1
)
 
—

 
(1
)
RMBS
—

 
—

 
—

 
3

 
(1
)
 
2

Total fixed income securities
(9
)
 
3

 
(6
)
 
1

 
(1
)
 
—

Mortgage loans
—

 
—

 
—

 
4

 
—

 
4

Equity securities
(10
)
 
—

 
(10
)
 
(8
)
 
—

 
(8
)
Limited partnership interests
(2
)
 
—

 
(2
)
 
(19
)
 
—

 
(19
)
Other
(1
)
 
—

 
(1
)
 
—

 
—

 
—

Other-than-temporary impairment losses
$
(22
)
 
$
3

 
$
(19
)
 
$
(22
)
 
$
(1
)
 
$
(23
)
Schedule of other-than-temporary impairment losses on fixed income securities included in accumulated other comprehensive income
The total amount of other-than-temporary impairment losses included in accumulated other comprehensive income at the time of impairment for fixed income securities, which were not included in earnings, are presented in the following table.  The amounts exclude $136 million and $138 million as of June 30, 2015 and December 31, 2014, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.
 
($ in millions)
June 30, 2015
 
December 31, 2014
Municipal
$
(5
)
 
$
(5
)
Corporate
(3
)
 
—

ABS
(2
)
 
(1
)
RMBS
(52
)
 
(55
)
CMBS
(6
)
 
(5
)
Total
$
(68
)
 
$
(66
)
Schedule of rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held
Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of the end of the period are as follows:
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
Beginning balance
$
(207
)
 
$
(293
)
 
$
(209
)
 
$
(299
)
Additional credit loss for securities previously other-than-temporarily impaired
(1
)
 
3

 
(2
)
 
2

Additional credit loss for securities not previously other-than-temporarily impaired
(2
)
 
(1
)
 
(4
)
 
(1
)
Reduction in credit loss for securities disposed or collected
3

 
3

 
7

 
10

Reduction in credit loss for securities the Company has made the decision to sell or more likely than not will be required to sell
—

 
—

 
—

 
—

Change in credit loss due to accretion of increase in cash flows
1

 
—

 
2

 
—

Reduction in credit loss for securities sold in Lincoln Benefit Life Company (“LBL”) disposition
—

 
59

 
—

 
59

Ending balance
$
(206
)
 
$
(229
)
 
$
(206
)
 
$
(229
)
Schedule of unrealized net capital gains and losses included in accumulated other comprehensive income
Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows:
($ in millions)
Fair value
 
Gross unrealized
 
Unrealized net gains (losses)
June 30, 2015
 
Gains
 
Losses
 
Fixed income securities
$
26,384

 
$
1,865

 
$
(248
)
 
$
1,617

Equity securities
923

 
46

 
(29
)
 
17

Short-term investments
935

 
—

 
—

 
—

Derivative instruments (1)
7

 
7

 
—

 
7

Equity method (“EMA”) limited partnerships (2)
 

 
 

 
 

 
(3
)
Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
1,638

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves (3)
 

 
 

 
 

 
—

DAC and DSI (4)
 

 
 

 
 

 
(112
)
Amounts recognized
 

 
 

 
 

 
(112
)
Deferred income taxes
 

 
 

 
 

 
(539
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
987

_______________
 
(1) 
Included in the fair value of derivative instruments are $3 million classified as assets and $(4) million classified as liabilities.
(2) 
Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross unrealized gains and losses are not applicable.
(3) 
The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to annuity buy-outs and certain payout annuities with life contingencies.
(4) 
The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.
($ in millions)
Fair value
 
Gross unrealized
 
Unrealized net gains (losses)
December 31, 2014
 
Gains
 
Losses
 
Fixed income securities
$
28,117

 
$
2,486

 
$
(191
)
 
$
2,295

Equity securities
970

 
57

 
(14
)
 
43

Short-term investments
857

 
—

 
—

 
—

Derivative instruments (1)
2

 
3

 
(1
)
 
2

EMA limited partnerships
 

 
 

 
 

 
(2
)
Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
2,338

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves
 

 
 

 
 

 
(28
)
DAC and DSI
 

 
 

 
 

 
(176
)
Amounts recognized
 

 
 

 
 

 
(204
)
Deferred income taxes
 

 
 

 
 

 
(752
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
1,382

_______________
 
(1) 
Included in the fair value of derivative instruments are $3 million classified as assets and $1 million classified as liabilities.
Schedule of change in unrealized net capital gains and losses
The change in unrealized net capital gains and losses for the six months ended June 30, 2015 is as follows:
($ in millions)
 

Fixed income securities
$
(678
)
Equity securities
(26
)
Derivative instruments
5

EMA limited partnerships
(1
)
Total
(700
)
Amounts recognized for:
 

Insurance reserves
28

DAC and DSI
64

Amounts recognized
92

Deferred income taxes
213

Decrease in unrealized net capital gains and losses, after-tax
$
(395
)
Summary of gross unrealized losses and fair value of fixed income and equity securities by length of time
The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position.
 
($ in millions)
Less than 12 months
 
12 months or more
 
Total
unrealized
losses
 
 
Number
of issues
 
Fair
value
 
Unrealized
losses
 
Number
of issues
 
Fair
value
 
Unrealized
losses
 
 
 
June 30, 2015
 

 
 

 
 

 
 

 
 

 
 

 
 

 
Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

 
U.S. government and agencies
2

 
$
175

 
$
—

 
—

 
$
—

 
$
—

 
$
—

 
Municipal
43

 
173

 
(8
)
 
5

 
32

 
(12
)
 
(20
)
 
Corporate
610

 
3,877

 
(126
)
 
48

 
466

 
(75
)
 
(201
)
 
Foreign government
3

 
16

 
(1
)
 
—

 
—

 
—

 
(1
)
 
ABS
29

 
390

 
(4
)
 
20

 
175

 
(16
)
 
(20
)
 
RMBS
22

 
2

 
—

 
42

 
61

 
(4
)
 
(4
)
 
CMBS
7

 
30

 
—

 
1

 
3

 
(2
)
 
(2
)
 
Total fixed income securities
716

 
4,663

 
(139
)
 
116

 
737

 
(109
)
 
(248
)
 
Equity securities
305

 
323

 
(29
)
 
—

 
—

 
—

 
(29
)
 
Total fixed income and equity securities
1,021

 
$
4,986

 
$
(168
)
 
116

 
$
737

 
$
(109
)
 
$
(277
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment grade fixed income securities
447

 
$
3,408

 
$
(84
)
 
76

 
$
511

 
$
(66
)
 
$
(150
)
 
Below investment grade fixed income securities
269

 
1,255

 
(55
)
 
40

 
226

 
(43
)
 
(98
)
 
Total fixed income securities
716

 
$
4,663

 
$
(139
)
 
116

 
$
737

 
$
(109
)
 
$
(248
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 

 
 

 
 

 
 

 
 

 
 

 
 

 
Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

 
U.S. government and agencies
1

 
$
1

 
$
—

 
—

 
$
—

 
$
—

 
$
—

 
Municipal
17

 
90

 
(1
)
 
10

 
47

 
(13
)
 
(14
)
 
Corporate
281

 
1,780

 
(69
)
 
91

 
875

 
(81
)
 
(150
)
 
Foreign government
—

 
—

 
—

 
1

 
15

 
—

 
—

 
ABS
19

 
168

 
(2
)
 
23

 
217

 
(19
)
 
(21
)
 
RMBS
19

 
3

 
—

 
45

 
73

 
(4
)
 
(4
)
 
CMBS
8

 
33

 
—

 
3

 
32

 
(2
)
 
(2
)
 
Total fixed income securities
345

 
2,075

 
(72
)
 
173

 
1,259

 
(119
)
 
(191
)
 
Equity securities
294

 
327

 
(13
)
 
1

 
6

 
(1
)
 
(14
)
 
Total fixed income and equity securities
639

 
$
2,402

 
$
(85
)
 
174

 
$
1,265

 
$
(120
)
 
$
(205
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment grade fixed income securities
167

 
$
1,275

 
$
(28
)
 
127

 
$
989

 
$
(79
)
 
$
(107
)
 
Below investment grade fixed income securities
178

 
800

 
(44
)
 
46

 
270

 
(40
)
 
(84
)
 
Total fixed income securities
345

 
$
2,075

 
$
(72
)
 
173

 
$
1,259

 
$
(119
)
 
$
(191
)
Summary of carrying value of non-impaired fixed and variable rate mortgage loans by debt service coverage ratio distribution
The following table reflects the carrying value of non-impaired fixed rate and variable rate mortgage loans summarized by debt service coverage ratio distribution.
($ in millions)
June 30, 2015
 
December 31, 2014
Debt service coverage
ratio distribution
Fixed rate
mortgage
loans
 
Variable rate
mortgage
loans
 
Total
 
Fixed rate
mortgage
loans
 
Variable rate
mortgage
loans
 
Total
Below 1.0
$
87

 
$
—

 
$
87

 
$
110

 
$
—

 
$
110

1.0 - 1.25
408

 
—

 
408

 
387

 
—

 
387

1.26 - 1.50
1,091

 
1

 
1,092

 
1,118

 
1

 
1,119

Above 1.50
2,174

 
—

 
2,174

 
2,054

 
—

 
2,054

Total non-impaired mortgage loans
$
3,760

 
$
1

 
$
3,761

 
$
3,669

 
$
1

 
$
3,670
Schedule of net carrying value of impaired mortgage loans
The net carrying value of impaired mortgage loans is as follows:
($ in millions)
June 30, 2015
 
December 31, 2014
Impaired mortgage loans with a valuation allowance
$
9

 
$
16

Impaired mortgage loans without a valuation allowance
—

 
—

Total impaired mortgage loans
$
9

 
$
16

Valuation allowance on impaired mortgage loans
$
7

 
$
8
Schedule of rollforward of the valuation allowance on impaired mortgage loans
The rollforward of the valuation allowance on impaired mortgage loans is as follows:
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2015
 
2014
 
2015
 
2014
Beginning balance
$
8

 
$
9

 
$
8

 
$
21

Net decrease in valuation allowance
—

 
—

 
—

 
(4
)
Charge offs
(1
)
 
—

 
(1
)
 
(8
)
Ending balance
$
7

 
$
9

 
$
7

 
$
9
Schedule of mortgage loans, past due