XML 56 R38.htm IDEA: XBRL DOCUMENT

Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2018

Outstanding Derivative Instruments With Off-Balance-Sheet Risks



	As of December 31, 2018						As of December 31, 2017
	Notional		Fair Value				Notional		Fair Value
	Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	2,741	$	70	$	9	$	3,007	$	46	$	84
Foreign currency contracts (1)		2,326		167		39		1,804		79		79
Total cash flow hedges		5,067		237		48		4,811		125		163
Fair value hedges:
Interest rate contracts (1)		1,268		55		137		1,438		254		174
Non-Qualifying Hedges
Interest rate contracts (1)		100,628		464		138		72,937		657		127
Foreign currency contracts (1)		47		-		-		22		-		-
Equity market contracts (1)		30,487		676		162		31,090		562		557
Credit contracts (1)		-		-		-		52		-		-
Embedded derivatives:
GLB direct (2)		-		123		-		-		903		-
GLB ceded (2) (3)		-		72		-		-		51		67
Reinsurance related (4)		-		-		3		-		-		57
Indexed annuity and IUL contracts (2) (5)		-		902		1,305		-		11		1,418
Total derivative instruments	$	137,497	$	2,529	$	1,793	$	110,350	$	2,563	$	2,563

⁽¹⁾

Reported in derivative investments and other liabilities on our Consolidated Balance Sheets.

⁽²⁾

Reported in other assets on our Consolidated Balance Sheets.

⁽³⁾

Reported in other liabilities on our Consolidated Balance Sheets.

⁽⁴⁾

Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets.

⁽⁵⁾

Reported in future contract benefits on our Consolidated Balance Sheets.

Maturity Of The Notional Amounts Of Derivative Financial Instruments



	Remaining Life as of December 31, 2018
	Less Than		1 - 5		6 - 10		11 - 30		Over 30
	1 Year		Years		Years		Years		Years		Total
Interest rate contracts (1)	$	12,968	$	16,828	$	49,713	$	23,715	$	1,413	$	104,637
Foreign currency contracts (2)		102		268		728		1,166		109		2,373
Equity market contracts		20,876		5,225		1,236		14		3,136		30,487
Total derivative instruments
with notional amounts	$	33,946	$	22,321	$	51,677	$	24,895	$	4,658	$	137,497

⁽¹⁾

As of December 31, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was April 2067.

⁽²⁾

As of December 31, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049.

Change In Our Unrealized Gain On Derivative Instruments In Accumulated OCI



	For the Years Ended December 31,
	2018			2017			2016
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	(29	)	$	49		$	132
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period:
Cumulative effect from adoption of
new accounting standard		(6	)		-			-
Cash flow hedges:
Interest rate contracts		100			7			(205	)
Foreign currency contracts		44			20			(10	)
Change in foreign currency exchange rate adjustment		111			(137	)		96
Change in DAC, VOBA, DSI and DFEL		(13	)		2			3
Income tax benefit (expense)		(51	)		38			41
Less:
Reclassification adjustment for gains (losses)
included in net income (loss):
Cash flow hedges:
Interest rate contracts (1)		4			4			5
Interest rate contracts (2)		(7	)		(18	)		(10	)
Interest rate contracts (3)		-			-			1
Foreign currency contracts (1)		27			18			11
Foreign currency contracts (3)		-			9			7
Associated amortization of DAC, VOBA, DSI and DFEL		(2	)		(1	)		(1	)
Income tax benefit (expense)		(5	)		(4	)		(5	)
Balance as of end-of-year	$	139		$	(29	)	$	49

⁽¹⁾

The OCI offset is reported within net investment income on our Consolidated Statements of Comprehensive Income (Loss).

⁽²⁾

The OCI offset is reported within interest and debt expense on our Consolidated Statements of Comprehensive Income (Loss).

⁽³⁾

The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

Gains (Losses) On Derivative Instruments Recorded Within Income (Loss) From Continuing Operations



	For the Years Ended December 31,
	2018			2017			2016
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	4		$	4		$	5
Interest rate contracts (2)		(7	)		(18	)		(10	)
Interest rate contracts (3)		-			-			1
Foreign currency contracts (1)		-			18			11
Foreign currency contracts (3)		27			9			7
Total cash flow hedges		24			13			14
Fair value hedges:
Interest rate contracts (1)		(14	)		(23	)		(28	)
Interest rate contracts (2)		13			27			32
Interest rate contracts (3)		37			7			16
Total fair value hedges		36			11			20
Non-Qualifying Hedges
Interest rate contracts (3)		(150	)		103			181
Foreign currency contracts (3)		5			-			(14	)
Equity market contracts (3)		444			(1,427	)		(1,253	)
Equity market contracts (4)		(18	)		29			12
Credit contracts (3)		-			1			(5	)
Embedded derivatives:
GLB (3)		(692	)		1,055			582
Reinsurance related (3)		54			10			34
Indexed annuity and IUL contracts (3)		81			(400	)		(120	)
Total derivative instruments	$	(216	)	$	(605	)	$	(549	)

⁽¹⁾

Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

⁽²⁾

Reported in interest and debt expense on our Consolidated Statements of Comprehensive Income (Loss).

⁽³⁾

Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

⁽⁴⁾

Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

Gains (Losses) On Derivative Instruments Designated As Cash Flow Hedges



	For the Years Ended December 31,
	2018			2017			2016
Offset to net investment income	$	4		$	22		$	16
Offset to realized gain (loss)		27			9			8
Offset to interest and debt expense		(7	)		(18	)		(10	)

Open Credit Default Swap Liabilities

Credit

Reason

Nature

Rating of

Number

Maximum

for

Underlying

Fair

Potential

Credit Contract Type

Maturity

Entering

Recourse

Obligation (1)

Instruments

Value (2)

Payout

Basket credit default swaps

12/20/2022

(3)

(4)

BBB+

⁽¹⁾

Represents average credit ratings based on the midpoint of the applicable ratings among Moody’s, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings.

⁽²⁾

Broker quotes are used to determine the market value of our credit default swaps.

⁽³⁾

Credit default swaps were entered into in order to hedge the liability exposure on certain variable annuity products.

⁽⁴⁾

Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract.

Collateral Support Agreements



		As of			As of
	December 31,			December 31,
		2018			2017
Maximum potential payout		$	-		$	52
Less: Counterparty thresholds			-			-
Maximum collateral potentially required to post		$	-		$	52

Schedule Of Collateral Amounts With Rights To Reclaim Or Obligation To Return Cash



	As of December 31, 2018					As of December 31, 2017
	Collateral		Collateral			Collateral		Collateral
	Posted by		Posted by			Posted by		Posted by
S&P	Counter-		LNC			Counter-		LNC
Credit	Party		(Held by			Party		(Held by
Rating of	(Held by		Counter-			(Held by		Counter-
Counterparty	LNC)		Party)			LNC)		Party)
AA-	$	33	$	(3	)	$	116	$	(1	)
A+		296		(96	)		242		(453	)
A		106		(56	)		170		(120	)
A-		4		-			237		(3	)
BBB+		197		-			-		(4	)
	$	636	$	(155	)	$	765	$	(581	)

Schedule Of Offsetting Assets And Liabilities



		As of December 31, 2018
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total

Financial Assets
Gross amount of recognized assets		$	1,330			$	1,097	$	2,427
Gross amounts offset			(223	)			-		(223	)
Net amount of assets			1,107				1,097		2,204
Gross amounts not offset:
Cash collateral			(636	)			-		(636	)
Non-cash collateral			(58	)			-		(58	)
Net amount		$	413			$	1,097	$	1,510

Financial Liabilities
Gross amount of recognized liabilities		$	784			$	1,308	$	2,092
Gross amounts offset			(103	)			-		(103	)
Net amount of liabilities			681				1,308		1,989
Gross amounts not offset:
Cash collateral			(155	)			-		(155	)
Non-cash collateral			(190	)			-		(190	)
Net amount		$	336			$	1,308	$	1,644


		As of December 31, 2017
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total

Financial Assets
Gross amount of recognized assets		$	1,301			$	965	$	2,266
Gross amounts offset			(386	)			-		(386	)
Net amount of assets			915				965		1,880
Gross amounts not offset:
Cash collateral			(765	)			-		(765	)
Net amount		$	150			$	965	$	1,115

Financial Liabilities
Gross amount of recognized liabilities		$	955			$	1,542	$	2,497
Gross amounts offset			(296	)			-		(296	)
Net amount of liabilities			659				1,542		2,201
Gross amounts not offset:
Cash collateral			(581	)			-		(581	)
Net amount		$	78			$	1,542	$	1,620