Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Jun. 30, 2017

Assets and (liabilities) carried at fair value by hierarchy level



Successor Company
Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of June 30, 2018
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
Asset backed securities ("ABS")	$	540		$	—	$	520		$	20
Collateralized debt obligations ("CDOs")	699			—		604			95
Commercial mortgage-backed securities ("CMBS")	1,423			—		1,416			7
Corporate	8,211			—		7,815			396
Foreign government/government agencies	374			—		374			—
Bonds of municipalities and political subdivisions ("municipal bonds")	776			—		764			12
Residential mortgage-backed securities ("RMBS")	1,058			—		524			534
U.S. Treasuries	1,328			13		1,315			—
Total fixed maturities	14,409			13		13,332			1,064
Fixed maturities, FVO	18			—		18			—
Equity securities, at fair value	131			46		42			43
Derivative assets
Credit derivatives	4			—		4			—
Interest rate derivatives	(2		)	—		(2		)	—
Guaranteed minimum withdrawal benefit ("GMWB") hedging instruments	29			—		—			29
Macro hedge program	9			—		—			9
Total derivative assets [2]	40			—		2			38
Short-term investments	939			454		485			—
Reinsurance recoverable for GMWB	22			—		—			22
Modified coinsurance reinsurance contracts	7			—		7			—
Separate account assets [3]	104,488			68,452		35,962			74
Total assets accounted for at fair value on a recurring basis	$	120,054		$	68,965	$	49,848		$	1,241
Liabilities accounted for at fair value on a recurring basis
Other policyholder funds and benefits payable
GMWB embedded derivative	$	(18	)	$	—	$	—		$	(18	)
Total other policyholder funds and benefits payable	(18		)	—		—			(18		)
Derivative liabilities
Credit derivatives	1			—		1			—
Foreign exchange derivatives	(179		)	—		(179		)	—
Interest rate derivatives	(318		)	—		(291		)	(27		)
GMWB hedging instruments	11			—		23			(12		)
Macro hedge program	(6		)	—		—			(6		)
Total derivative liabilities [4]	(491		)	—		(446		)	(45		)
Total liabilities accounted for at fair value on a recurring basis	$	(509	)	$	—	$	(446	)	$	(63	)



Predecessor Company
Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of December 31, 2017
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	819		$	—	$	806		$	13
CDOs	888			—		815			73
CMBS	2,084			—		2,058			26
Corporate	14,038			—		13,595			443
Foreign government/government agencies	407			—		406			1
Bonds of municipalities and political subdivisions ("municipal bonds")	1,266			—		1,228			38
RMBS	1,427			—		735			692
U.S. Treasuries	1,870			284		1,586			—
Total fixed maturities	22,799			284		21,229			1,286
Fixed maturities, FVO	32			—		32			—
Equity securities, trading [1]	12			12		—			—
Equity securities, AFS	154			61		47			46
Derivative assets
Credit derivatives	1			—		1			—
Foreign exchange derivatives	(1		)	—		(1		)	—
Interest rate derivatives	47			—		47			—
GMWB hedging instruments	69			—		35			34
Macro hedge program	19			—		—			19
Total derivative assets [2]	135			—		82			53
Short-term investments	1,094			807		287			—
Reinsurance recoverable for GMWB	36			—		—			36
Modified coinsurance reinsurance contracts	55			—		55			—
Separate account assets [3]	113,302			73,538		38,677			185
Total assets accounted for at fair value on a recurring basis	$	137,619		$	74,702	$	60,409		$	1,606
Liabilities accounted for at fair value on a recurring basis
Other policyholder funds and benefits payable
GMWB embedded derivative	$	(75	)	$	—	$	—		$	(75	)
Total other policyholder funds and benefits payable	(75		)	—		—			(75		)
Derivative liabilities
Foreign exchange derivatives	(187		)	—		(187		)	—
Interest rate derivatives	(403		)	—		(374		)	(29		)
GMWB hedging instruments	(2		)	—		(2		)	—
Macro hedge program	4			—		—			4
Total derivative liabilities [4]	(588		)	—		(563		)	(25		)
Total liabilities accounted for at fair value on a recurring basis	$	(663	)	$	—	$	(563	)	$	(100	)


[1]	Included in other investments on the Condensed Consolidated Balance Sheets.


[2]	Includes derivative instruments in a net positive fair value position after consideration of the accrued interest and impact of collateral posting requirements which may be imposed by agreements and applicable law. See footnote 4 to this table for derivative liabilities.

[3]

Approximately $4.6 billion and $2.5 billion of investment sales receivable, as of June 30, 2018 (Successor Company) and December 31, 2017 (Predecessor Company), respectively, are excluded from this disclosure requirement because they are trade receivables in the ordinary course of business where the carrying amount approximates fair value. Included in the total fair value amount are $0.5 billion and $0.9 billion of investments, as of June 30, 2018 (Successor Company) and December 31, 2017 (Predecessor Company), respectively, for which the fair value is estimated using the net asset value per unit as a practical expedient which are excluded from the disclosure requirement to classify amounts in the fair value hierarchy.


[4]	Includes derivative instruments in a net negative fair value position (derivative liability) after consideration of the accrued interest and impact of collateral posting requirements, which may be imposed by agreements and applicable law.



Fair Value Roll-forwards for Financial Instruments Classified as Level 3
					Total Realized/Unrealized Gains (Losses)
		Fair Value as of January 1, 2018			Included in Net Income [1] [2] [6]			Included in OCI [3]			Purchases		Settlements			Sales			Transfers into Level 3 [4]		Transfers out of Level 3 [4]			Fair Value as of May 31, 2018
Assets
Fixed Maturities, AFS
	ABS	$	13		$	—		$	—		$	6	$	(1	)	$	—		$	1	$	(7	)	$	12
	CDOs	73			—			—			5		—			(3		)	—		(10		)	65
	CMBS	26			—			—			7		(1		)	(15		)	—		—			17
	Corporate	443			2			(23		)	47		(16		)	(46		)	64		(20		)	451
	Foreign Govt./Govt. Agencies	1			—			—			—		(1		)	—			—		—			—
	Municipal	38			—			(1		)	—		—			—			—		(13		)	24
	RMBS	692			—			(3		)	35		(78		)	(24		)	—		(5		)	617
Total Fixed Maturities, AFS		1,286			2			(27		)	100		(97		)	(88		)	65		(55		)	1,186
Equity Securities, at fair value		46			10			—			—		—			(14		)	—		—			42
Freestanding Derivatives
	Interest rate	(29		)	2			—			—		—			—			—		—			(27		)
	GMWB hedging instruments	34			(15		)	—			—		—			(2		)	—		—			17
	Macro hedge program	23			(28		)	—			—		—			—			—		—			(5		)
Total Freestanding Derivatives [5]		28			(41		)	—			—		—			(2		)	—		—			(15		)
Reinsurance Recoverable for GMWB		36			(19		)	—			—		5			—			—		—			22
Separate Accounts		185			—			—			34		—			(164		)	22		(22		)	55
Total Assets		$	1,581		$	(48	)	$	(27	)	$	134	$	(92	)	$	(268	)	$	87	$	(77	)	$	1,290
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	(75	)	$	82		$	—		$	—	$	(28	)	$	—		$	—	$	—		$	(21	)
Total Other Policyholder Funds and Benefits Payable		(75		)	82			—			—		(28		)	—			—		—			(21		)
Total Liabilities		$	(75	)	$	82		$	—		$	—	$	(28	)	$	—		$	—	$	—		$	(21	)



Fair Value Roll-forwards for Financial Instruments Classified as Level 3
					Total Realized/Unrealized Gains (Losses)
		Fair value as of April 1, 2018			Included in Net Income [1] [2] [6]			Included in OCI [3]			Purchases		Settlements			Sales			Transfers into Level 3 [4]		Transfers out of Level 3 [4]			Fair Value as of May 31, 2018
Assets
Fixed Maturities, AFS
	ABS	$	9		$	—		$	—		$	6	$	—		$	—		$	1	$	(4	)	$	12
	CDOs	72			—			—			—		—			(3		)	—		(4		)	65
	CMBS	21			—			—			7		—			(11		)	—		—			17
	Corporate	447			2			(16		)	27		(3		)	(16		)	10		—			451
	Foreign Govt./Govt. Agencies	1			—			—			—		(1		)	—			—		—			—
	Municipal	37			—			—			—		—			—			—		(13		)	24
	RMBS	641			—			(1		)	32		(31		)	(24		)	—		—			617
Total Fixed Maturities, AFS		1,228			2			(17		)	72		(35		)	(54		)	11		(21		)	1,186
Equity Securities, at fair value		42			—			—			—		—			—			—		—			42
Freestanding Derivatives
	Interest rate	(28		)	1			—			—		—			—			—		—			(27		)
	GMWB hedging instruments	32			(15		)	—			—		—			—			—		—			17
	Macro hedge program	33			(38		)	—			—		—			—			—		—			(5		)
Total Freestanding Derivatives [5]		37			(52		)	—			—		—			—			—		—			(15		)
Reinsurance Recoverable for GMWB		31			(11		)	—			—		2			—			—		—			22
Separate Accounts		41			—			—			24		—			(2		)	5		(13		)	55
Total Assets		$	1,379		$	(61	)	$	(17	)	$	96	$	(33	)	$	(56	)	$	16	$	(34	)	$	1,290
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	(53	)	$	43		$	—		$	—	$	(11	)	$	—		$	—	$	—		$	(21	)
Total Other Policyholder Funds and Benefits Payable		(53		)	43			—			—		(11		)	—			—		—			(21		)
Total Liabilities		$	(53	)	$	43		$	—		$	—	$	(11	)	$	—		$	—	$	—		$	(21	)



Fair Value Roll-forwards for Financial Instruments Classified as Level 3
					Total realized/unrealized gains (losses)
		Fair Value as of June 1, 2018			Included in Net Income [1] [2] [6]			Included in OCI [3]		Purchases		Settlements			Sales			Transfers into Level 3 [4]		Transfers out of Level 3 [4]			Fair Value as of June 30, 2018
Assets
Fixed Maturities, AFS
	ABS	$	12		$	—		$	—	$	8	$	—		$	—		$	—	$	—		$	20
	CDOs	65			—			—		30		—			—			—		—			95
	CMBS	17			—			—		3		—			—			—		(13		)	7
	Corporate	451			—			—		—		—			(5		)	—		(50		)	396
	Foreign Govt./Govt. Agencies	—			—			—		—		—			—			—		—			—
	Municipal	24			—			—		—		—			(12		)	—		—			12
	RMBS	617			—			—		21		(12		)	(92		)	—		—			534
Total Fixed Maturities, AFS		1,186			—			—		62		(12		)	(109		)	—		(63		)	1,064
Equity Securities, at fair value		42			—			1		—		—			—			—		—			43
Freestanding Derivatives
	Interest rate	(27		)	—			—		—		—			—			—		—			(27		)
	GMWB hedging instruments	17			—			—		—		—			—			—		—			17
	Macro hedge program	(5		)	12			—		—		(4		)	—			—		—			3
Total Freestanding Derivatives [5]		(15		)	12			—		—		(4		)	—			—		—			(7		)
Reinsurance Recoverable for GMWB		22			(1		)	—		—		1			—			—		—			22
Separate Accounts		55			—			—		20		—			1			—		(2		)	74
Total Assets		$	1,290		$	11		$	1	$	82	$	(15	)	$	(108	)	$	—	$	(65	)	$	1,196
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	(21	)	$	8		$	—	$	—	$	(5	)	$	—		$	—	$	—		$	(18	)
Total Other Policyholder Funds and Benefits Payable		(21		)	8			—		—		(5		)	—			—		—			(18		)
Total Liabilities		$	(21	)	$	8		$	—	$	—	$	(5	)	$	—		$	—	$	—		$	(18	)



Fair Value Roll-forwards for Financial Instruments Classified as Level 3
					Total Realized/Unrealized Gains (Losses)
		Fair Value as of March 31, 2017			Included in Net Income [1] [2] [6]			Included in OCI [3]			Purchases		Settlements			Sales			Transfers into Level 3 [4]		Transfers out of Level 3 [4]			Fair Value as of June 30, 2017
Assets
Fixed Maturities, AFS
	ABS	$	44		$	—		$	—		$	2	$	(1	)	$	—		$	—	$	(12	)	$	33
	CDOs	199			—			(2		)	114		(107		)	—			—		(68		)	136
	CMBS	45			—			1			5		(1		)	—			—		(17		)	33
	Corporate	557			(12		)	8			13		—			(10		)	52		—			608
	Foreign Govt./Govt. Agencies	17			—			—			1		(1		)	—			—		(10		)	7
	Municipal	73			—			1			—		—			(4		)	—		—			70
	RMBS	757			—			9			21		(48		)	—			—		—			739
Total Fixed Maturities, AFS		1,692			(12		)	17			156		(158		)	(14		)	52		(107		)	1,626
Equity Securities, AFS		44			—			(1		)	—		—			—			—		—			43
Freestanding Derivatives
	Interest rate	(29		)	—			—			—		—			—			—		—			(29		)
	GMWB hedging instruments	46			(6		)	—			—		—			—			—		—			40
	Macro hedge program	159			1			—			—		—			—			—		—			160
Total Freestanding Derivatives [5]		176			(5		)	—			—		—			—			—		—			171
Reinsurance Recoverable for GMWB		60			(7		)	—			—		4			—			—		—			57
Separate Accounts		277			2			—			13		(2		)	(34		)	7		(71		)	192
Total Assets		$	2,249		$	(22	)	$	16		$	169	$	(156	)	$	(48	)	$	59	$	(178	)	$	2,089
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	(157	)	$	40		$	—		$	—	$	(17	)	$	—		$	—	$	—		$	(134	)
	Equity Linked Notes	(36		)	(1		)	—			—		—			—			—		—			(37		)
Total Other Policyholder Funds and Benefits Payable		(193		)	39			—			—		(17		)	—			—		—			(171		)
Total Liabilities		$	(193	)	$	39		$	—		$	—	$	(17	)	$	—		$	—	$	—		$	(171	)



Fair Value Roll-forwards for Financial Instruments Classified as Level 3
					Total Realized/Unrealized Gains (Losses)
		Fair Value as of January 1, 2017			Included in Net Income [1] [2] [6]			Included in OCI [3]			Purchases		Settlements			Sales			Transfers into Level 3 [4]		Transfers out of Level 3 [4]			Fair Value as of June 30, 2017
Assets
Fixed Maturities, AFS
	ABS	$	37		$	—		$	—		$	14	$	(3	)	$	—		$	3	$	(18	)	$	33
	CDOs	260			—			(1		)	114		(107		)	—			—		(130		)	136
	CMBS	21			—			1			33		(2		)	—			—		(20		)	33
	Corporate	566			(7		)	19			82		1			(73		)	57		(37		)	608
	Foreign Govt./Govt. Agencies	17			—			1			1		(2		)	—			—		(10		)	7
	Municipal	72			—			3			—		—			(5		)	—		—			70
	RMBS	711			—			11			106		(89		)	—			—		—			739
Total Fixed Maturities, AFS		1,684			(7		)	34			350		(202		)	(78		)	60		(215		)	1,626
Equity Securities, AFS		44			—			(3		)	2		—			—			—		—			43
Freestanding Derivatives
	Interest rate	(30		)	1			—			—		—			—			—		—			(29		)
	GMWB hedging instruments	81			(41		)	—			—		—			—			—		—			40
	Macro hedge program	167			(7		)	—			—		—			—			—		—			160
Total Freestanding Derivatives [5]		218			(47		)	—			—		—			—			—		—			171
Reinsurance Recoverable for GMWB		73			(23		)	—			—		7			—			—		—			57
Separate Accounts		201			3			2			111		(7		)	(42		)	10		(86		)	192
Total Assets		$	2,220		$	(74	)	$	33		$	463	$	(202	)	$	(120	)	$	70	$	(301	)	$	2,089
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	(241	)	$	140		$	—		$	—	$	(33	)	$	—		$	—	$	—		$	(134	)
	Equity Linked Notes	(33		)	(4		)	—			—		—			—			—		—			(37		)
Total Other Policyholder Funds and Benefits Payable		(274		)	136			—			—		(33		)	—			—		—			(171		)
Total Liabilities		$	(274	)	$	136		$	—		$	—	$	(33	)	$	—		$	—	$	—		$	(171	)


[1]	The Company classifies realized and unrealized gains (losses) on GMWB reinsurance derivatives and GMWB embedded derivatives as unrealized gains (losses) for purposes of disclosure in this table because it is impracticable to track on a contract-by-contract basis the realized gains (losses) for these derivatives and embedded derivatives.


[2]	Amounts in these rows are generally reported in net realized capital gains (losses). The realized/unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on net income for the Company. All amounts are before income taxes and amortization.


[3]	All amounts are before income taxes and amortization.


[4]	Transfers in and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.


[5]	Derivative instruments are reported in this table on a net basis for asset (liability) positions and reported in the Consolidated Balance Sheets in other investments and other liabilities.


[6]	Includes both market and non-market impacts in deriving realized and unrealized gains (losses).

Information about significant unobservable inputs used in Level 3 assets measured at fair value



Significant Unobservable Inputs for Level 3 - Securities
As of June 30, 2018 (Successor Company)
Assets Accounted for at Fair Value on a Recurring Basis	Fair Value		Predominant Valuation Technique	Significant Unobservable Input	Minimum	Maximum	Weighted Average [1]	Impact of Increase in Input on Fair Value [2]
CMBS [3]	$	6	Discounted cash flows	Spread (encompasses prepayment, default risk and loss severity)	9bps	1,816bps	252bps	Decrease
Corporate [4]	$	175	Discounted cash flows	Spread	113bps	826bps	304bps	Decrease
Municipal	$	4	Discounted cash flows	Spread	161bps	161bps	161bps	Decrease
RMBS [3]	$	518	Discounted cash flows	Spread	17bps	433bps	76bps	Decrease
				Constant prepayment rate	—%	25%	6%	Decrease [5]
				Constant default rate	—%	8%	4%	Decrease
				Loss severity	—%	100%	58%	Decrease
As of December 31, 2017 (Predecessor Company)
CMBS [3]	$	15	Discounted cash flows	Spread (encompasses prepayment, default risk and loss severity)	9bps	1,816bps	457bps	Decrease
Corporate [4]	$	190	Discounted cash flows	Spread	103bps	1,000bps	355bps	Decrease
Municipal	$	22	Discounted cash flows	Spread	192bps	250bps	228bps	Decrease
RMBS [3]	$	692	Discounted cash flows	Spread	24bps	463bps	77bps	Decrease
				Constant prepayment rate	—%	25%	6%	Decrease [5]
				Constant default rate	—%	7%	4%	Decrease
				Loss severity	—%	100%	65%	Decrease


[1]	The weighted average is determined based on the fair value of the securities.


[2]	Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table.


[3]	Excludes securities for which the Company based fair value on broker quotations.


[4]	Excludes securities for which the Company bases fair value on broker quotations; however, included are broker priced lower-rated private placement securities for which the Company receives spread and yield information to corroborate the fair value.


[5]	Decrease for above market rate coupons and increase for below market rate coupons.



Significant Unobservable Inputs for Level 3 - Freestanding Derivatives
	Fair Value			Predominant Valuation Technique	Significant Unobservable Input	Minimum	Maximum	Impact of Increase in Input on Fair Value [1]
As of June 30, 2018 (Successor Company)
Interest rate derivatives
Interest rate swaps	$(27)			Discounted cash flows	Swap curve beyond 30 years	3%	3%	Decrease
GMWB hedging instruments
Equity variance swaps	$(26)			Option model	Equity volatility	19%	19%	Increase
Customized swaps	$(1)			Discounted cash flows	Equity volatility	12%	30%	Increase
Interest rate swaption	$44			Option model	Interest rate volatility	28%	29%	Increase
Macro hedge program [2]
Equity options	$(1)			Option model	Equity volatility	19%	28%	Increase
As of December 31, 2017 (Predecessor Company)
Interest rate derivatives
Interest rate swaps	$	(29	)	Discounted cash flows	Swap curve beyond 30 years	2%	3%	Decrease
GMWB hedging instruments
Equity variance swaps	$	(26	)	Option model	Equity volatility	19%	19%	Increase
Equity options	$	1		Option model	Equity volatility	27%	30%	Increase
Customized swaps	$	59		Discounted cash flows	Equity volatility	7%	30%	Increase
Macro hedge program [2]
Equity options	$	29		Option model	Equity volatility	18%	31%	Increase


[1]	Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table. Changes are based on long positions, unless otherwise noted. Changes in fair value will be inversely impacted for short positions.


[2]	Excludes derivatives for which the Company bases fair value on broker quotations.



Significant Unobservable Inputs for Level 3 GMWB Embedded Customized and Reinsurance Derivatives
As of June 30, 2018 (Successor Company)
Significant Unobservable Input	Unobservable Inputs (Minimum)	Unobservable Inputs (Maximum)	Impact of Increase in Input on Fair Value Liability [1]
Withdrawal Utilization [2]	15%	100%	Increase
Withdrawal Rates [3]	—%	8%	Increase
Lapse Rates [4]	—%	40%	Decrease
Reset Elections [5]	30%	75%	Increase
Equity Volatility [6]	12%	30%	Increase
As of December 31, 2017 (Predecessor Company)
Significant Unobservable Input	Unobservable Inputs (Minimum)	Unobservable Inputs (Maximum)	Impact of Increase in Input on Fair Value Liability [1]
Withdrawal Utilization [2]	15%	100%	Increase
Withdrawal Rates [3]	—%	8%	Increase
Lapse Rates [4]	—%	40%	Decrease
Reset Elections [5]	30%	75%	Increase
Equity Volatility [6]	7%	30%	Increase



Fair Value Roll-forwards for Financial Instruments Classified as Level 3
					Total Realized/Unrealized Gains (Losses)
		Fair value as of April 1, 2018			Included in Net Income [1] [2] [6]			Included in OCI [3]			Purchases		Settlements			Sales			Transfers into Level 3 [4]		Transfers out of Level 3 [4]			Fair Value as of May 31, 2018
Assets
Fixed Maturities, AFS
	ABS	$	9		$	—		$	—		$	6	$	—		$	—		$	1	$	(4	)	$	12
	CDOs	72			—			—			—		—			(3		)	—		(4		)	65
	CMBS	21			—			—			7		—			(11		)	—		—			17
	Corporate	447			2			(16		)	27		(3		)	(16		)	10		—			451
	Foreign Govt./Govt. Agencies	1			—			—			—		(1		)	—			—		—			—
	Municipal	37			—			—			—		—			—			—		(13		)	24
	RMBS	641			—			(1		)	32		(31		)	(24		)	—		—			617
Total Fixed Maturities, AFS		1,228			2			(17		)	72		(35		)	(54		)	11		(21		)	1,186
Equity Securities, at fair value		42			—			—			—		—			—			—		—			42
Freestanding Derivatives
	Interest rate	(28		)	1			—			—		—			—			—		—			(27		)
	GMWB hedging instruments	32			(15		)	—			—		—			—			—		—			17
	Macro hedge program	33			(38		)	—			—		—			—			—		—			(5		)
Total Freestanding Derivatives [5]		37			(52		)	—			—		—			—			—		—			(15		)
Reinsurance Recoverable for GMWB		31			(11		)	—			—		2			—			—		—			22
Separate Accounts		41			—			—			24		—			(2		)	5		(13		)	55
Total Assets		$	1,379		$	(61	)	$	(17	)	$	96	$	(33	)	$	(56	)	$	16	$	(34	)	$	1,290
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	(53	)	$	43		$	—		$	—	$	(11	)	$	—		$	—	$	—		$	(21	)
Total Other Policyholder Funds and Benefits Payable		(53		)	43			—			—		(11		)	—			—		—			(21		)
Total Liabilities		$	(53	)	$	43		$	—		$	—	$	(11	)	$	—		$	—	$	—		$	(21	)

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the period of January 1, 2018 to May 31, 2018 (Predecessor Company), for which the Company has used significant unobservable inputs (Level 3):



Fair Value Roll-forwards for Financial Instruments Classified as Level 3
					Total Realized/Unrealized Gains (Losses)
		Fair Value as of January 1, 2018			Included in Net Income [1] [2] [6]			Included in OCI [3]			Purchases		Settlements			Sales			Transfers into Level 3 [4]		Transfers out of Level 3 [4]			Fair Value as of May 31, 2018
Assets
Fixed Maturities, AFS
	ABS	$	13		$	—		$	—		$	6	$	(1	)	$	—		$	1	$	(7	)	$	12
	CDOs	73			—			—			5		—			(3		)	—		(10		)	65
	CMBS	26			—			—			7		(1		)	(15		)	—		—			17
	Corporate	443			2			(23		)	47		(16		)	(46		)	64		(20		)	451
	Foreign Govt./Govt. Agencies	1			—			—			—		(1		)	—			—		—			—
	Municipal	38			—			(1		)	—		—			—			—		(13		)	24
	RMBS	692			—			(3		)	35		(78		)	(24		)	—		(5		)	617
Total Fixed Maturities, AFS		1,286			2			(27		)	100		(97		)	(88		)	65		(55		)	1,186
Equity Securities, at fair value		46			10			—			—		—			(14		)	—		—			42
Freestanding Derivatives
	Interest rate	(29		)	2			—			—		—			—			—		—			(27		)
	GMWB hedging instruments	34			(15		)	—			—		—			(2		)	—		—			17
	Macro hedge program	23			(28		)	—			—		—			—			—		—			(5		)
Total Freestanding Derivatives [5]		28			(41		)	—			—		—			(2		)	—		—			(15		)
Reinsurance Recoverable for GMWB		36			(19		)	—			—		5			—			—		—			22
Separate Accounts		185			—			—			34		—			(164		)	22		(22		)	55
Total Assets		$	1,581		$	(48	)	$	(27	)	$	134	$	(92	)	$	(268	)	$	87	$	(77	)	$	1,290
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	(75	)	$	82		$	—		$	—	$	(28	)	$	—		$	—	$	—		$	(21	)
Total Other Policyholder Funds and Benefits Payable		(75		)	82			—			—		(28		)	—			—		—			(21		)
Total Liabilities		$	(75	)	$	82		$	—		$	—	$	(28	)	$	—		$	—	$	—		$	(21	)

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended June 30, 2017 (Predecessor Company), for which the Company has used significant unobservable inputs (Level 3):



Fair Value Roll-forwards for Financial Instruments Classified as Level 3
					Total Realized/Unrealized Gains (Losses)
		Fair Value as of March 31, 2017			Included in Net Income [1] [2] [6]			Included in OCI [3]			Purchases		Settlements			Sales			Transfers into Level 3 [4]		Transfers out of Level 3 [4]			Fair Value as of June 30, 2017
Assets
Fixed Maturities, AFS
	ABS	$	44		$	—		$	—		$	2	$	(1	)	$	—		$	—	$	(12	)	$	33
	CDOs	199			—			(2		)	114		(107		)	—			—		(68		)	136
	CMBS	45			—			1			5		(1		)	—			—		(17		)	33
	Corporate	557			(12		)	8			13		—			(10		)	52		—			608
	Foreign Govt./Govt. Agencies	17			—			—			1		(1		)	—			—		(10		)	7
	Municipal	73			—			1			—		—			(4		)	—		—			70
	RMBS	757			—			9			21		(48		)	—			—		—			739
Total Fixed Maturities, AFS		1,692			(12		)	17			156		(158		)	(14		)	52		(107		)	1,626
Equity Securities, AFS		44			—			(1		)	—		—			—			—		—			43
Freestanding Derivatives
	Interest rate	(29		)	—			—			—		—			—			—		—			(29		)
	GMWB hedging instruments	46			(6		)	—			—		—			—			—		—			40
	Macro hedge program	159			1			—			—		—			—			—		—			160
Total Freestanding Derivatives [5]		176			(5		)	—			—		—			—			—		—			171
Reinsurance Recoverable for GMWB		60			(7		)	—			—		4			—			—		—			57
Separate Accounts		277			2			—			13		(2		)	(34		)	7		(71		)	192
Total Assets		$	2,249		$	(22	)	$	16		$	169	$	(156	)	$	(48	)	$	59	$	(178	)	$	2,089
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	(157	)	$	40		$	—		$	—	$	(17	)	$	—		$	—	$	—		$	(134	)
	Equity Linked Notes	(36		)	(1		)	—			—		—			—			—		—			(37		)
Total Other Policyholder Funds and Benefits Payable		(193		)	39			—			—		(17		)	—			—		—			(171		)
Total Liabilities		$	(193	)	$	39		$	—		$	—	$	(17	)	$	—		$	—	$	—		$	(171	)

The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the six months ended June 30, 2017 (Predecessor Company), for which the Company has used significant unobservable inputs (Level 3):



Fair Value Roll-forwards for Financial Instruments Classified as Level 3
					Total Realized/Unrealized Gains (Losses)
		Fair Value as of January 1, 2017			Included in Net Income [1] [2] [6]			Included in OCI [3]			Purchases		Settlements			Sales			Transfers into Level 3 [4]		Transfers out of Level 3 [4]			Fair Value as of June 30, 2017
Assets
Fixed Maturities, AFS
	ABS	$	37		$	—		$	—		$	14	$	(3	)	$	—		$	3	$	(18	)	$	33
	CDOs	260			—			(1		)	114		(107		)	—			—		(130		)	136
	CMBS	21			—			1			33		(2		)	—			—		(20		)	33
	Corporate	566			(7		)	19			82		1			(73		)	57		(37		)	608
	Foreign Govt./Govt. Agencies	17			—			1			1		(2		)	—			—		(10		)	7
	Municipal	72			—			3			—		—			(5		)	—		—			70
	RMBS	711			—			11			106		(89		)	—			—		—			739
Total Fixed Maturities, AFS		1,684			(7		)	34			350		(202		)	(78		)	60		(215		)	1,626
Equity Securities, AFS		44			—			(3		)	2		—			—			—		—			43
Freestanding Derivatives
	Interest rate	(30		)	1			—			—		—			—			—		—			(29		)
	GMWB hedging instruments	81			(41		)	—			—		—			—			—		—			40
	Macro hedge program	167			(7		)	—			—		—			—			—		—			160
Total Freestanding Derivatives [5]		218			(47		)	—			—		—			—			—		—			171
Reinsurance Recoverable for GMWB		73			(23		)	—			—		7			—			—		—			57
Separate Accounts		201			3			2			111		(7		)	(42		)	10		(86		)	192
Total Assets		$	2,220		$	(74	)	$	33		$	463	$	(202	)	$	(120	)	$	70	$	(301	)	$	2,089
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	(241	)	$	140		$	—		$	—	$	(33	)	$	—		$	—	$	—		$	(134	)
	Equity Linked Notes	(33		)	(4		)	—			—		—			—			—		—			(37		)
Total Other Policyholder Funds and Benefits Payable		(274		)	136			—			—		(33		)	—			—		—			(171		)
Total Liabilities		$	(274	)	$	136		$	—		$	—	$	(33	)	$	—		$	—	$	—		$	(171	)


[1]	The Company classifies realized and unrealized gains (losses) on GMWB reinsurance derivatives and GMWB embedded derivatives as unrealized gains (losses) for purposes of disclosure in this table because it is impracticable to track on a contract-by-contract basis the realized gains (losses) for these derivatives and embedded derivatives.


[2]	Amounts in these rows are generally reported in net realized capital gains (losses). The realized/unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on net income for the Company. All amounts are before income taxes and amortization.


[3]	All amounts are before income taxes and amortization.


[4]	Transfers in and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.


[5]	Derivative instruments are reported in this table on a net basis for asset (liability) positions and reported in the Consolidated Balance Sheets in other investments and other liabilities.


[6]	Includes both market and non-market impacts in deriving realized and unrealized gains (losses).



Changes in Unrealized Gains (Losses) Included in Net Income for Financial Instruments Classified as Level 3 Still Held at End of Period
		Successor Company			Predecessor Company
		June 1, 2018 to June 30, 2018 [1] [2]			April 1, 2018 to May 31, 2018 [1] [2]			For the three months ended June 30, 2017 [1] [2]			January 1, 2018 to May 31, 2018 [1] [2]			For the six months ended June 30, 2017 [1] [2]
Assets
Fixed Maturities, AFS
	Corporate	$	—		$	2		$	(12	)	$	2		$	(12	)
Total Fixed Maturities, AFS		—			2			(12		)	2			(12		)
Freestanding Derivatives
	Interest Rate	—			1			—			(5		)	—
	GMWB hedging instruments	—			(15		)	(5		)	(17		)	(41		)
	Macro hedge program	8			(38		)	2			(26		)	(6		)
Total Freestanding Derivatives		8			(52		)	(3		)	(48		)	(47		)
Reinsurance Recoverable for GMWB		(1		)	(11		)	(7		)	(19		)	(23		)
Separate Accounts		—			—			—			—			1
Total Assets		$	7		$	(61	)	$	(22	)	$	(65	)	$	(81	)
(Liabilities)
Other Policyholder Funds and Benefits Payable
	Guaranteed Withdrawal Benefits	$	8		$	43		$	40		$	82		$	140
	Equity Linked Notes	—			—			(1		)	—			(4		)
Total Other Policyholder Funds and Benefits Payable		8			43			39			82			136
Total Liabilities		$	8		$	43		$	39		$	82		$	136


[1]	All amounts in these rows are reported in net realized capital gains (losses). The realized/unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on net income for the Company. All amounts are before income taxes and amortization.


[2]	Amounts presented are for Level 3 only and therefore may not agree to other disclosures included herein.

Fair value of assets and liabilities accounted for using the fair value option



Changes in Fair Value of Assets using Fair Value Option
	Successor Company		Predecessor Company
	June 1, 2018 to June 30, 2018		April 1, 2018 to May 31, 2018		For the three months ended June 30, 2017			January 1, 2018 to May 31, 2018		For the six months ended June 30, 2017
Assets
Fixed maturities, FVO
RMBS	$	—	$	—	$	(1	)	$	—	$	—
Total fixed maturities, FVO	—		—		(1		)	—		—
Equity, FVO					3					2
Total realized capital gains (losses)	$	—	$	—	$	2		$	—	$	2



Fair Value of Assets and Liabilities using the Fair Value Option
	Successor Company		Predecessor Company
	June 30, 2018		December 31, 2017
Assets
Fixed maturities, FVO
RMBS	$	18	$	32
Total fixed maturities, FVO	$	18	$	32



Financial Assets and Liabilities Not Carried at Fair Value
		Successor Company				Predecessor Company
	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
		June 30, 2018				December 31, 2017
Assets
Policy loans	Level 3	$	1,447	$	1,447	$	1,432	$	1,432
Mortgage loans	Level 3	$	1,960	$	1,957	$	2,872	$	2,941
Liabilities
Other policyholder funds and benefits payable [1]	Level 3	$	6,402	$	6,116	$	5,905	$	6,095
Consumer notes [2] [3]	Level 3	$	—	$	—	$	8	$	8
Assumed investment contracts [3]	Level 3	$	364	$	365	$	342	$	361

Financial Instruments Not Carried at Fair Value



Financial Assets and Liabilities Not Carried at Fair Value
		Successor Company				Predecessor Company
	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
		June 30, 2018				December 31, 2017
Assets
Policy loans	Level 3	$	1,447	$	1,447	$	1,432	$	1,432
Mortgage loans	Level 3	$	1,960	$	1,957	$	2,872	$	2,941
Liabilities
Other policyholder funds and benefits payable [1]	Level 3	$	6,402	$	6,116	$	5,905	$	6,095
Consumer notes [2] [3]	Level 3	$	—	$	—	$	8	$	8
Assumed investment contracts [3]	Level 3	$	364	$	365	$	342	$	361


[1]	Excludes group accident and health and universal life insurance contracts, including corporate owned life insurance.


[2]	Excludes amounts carried at fair value and included in preceding disclosures.


[3]	Included in other liabilities in the Condensed Consolidated Balance Sheets.