10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from to

Commission file number 1-08323

Cigna Corporation

(Exact name of registrant as specified in its charter)

Delaware	06-1059331
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
900 Cottage Grove Road Bloomfield, Connecticut	06002
(Address of principal executive offices)	(Zip Code)
(860) 226-6000
Registrant’s telephone number, including area code
(860) 226-6741
Registrant’s facsimile number, including area code
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark				YES	NO
·whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.				R	o
·whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).				R	o
·whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer R	Accelerated filer o	Non-accelerated filer o	Smaller Reporting Company o	Emerging growth company  o
·If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
·whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).				o	R

As of April 14, 2017,  256,014,619 shares of the issuer’s common stock were outstanding.

Cigna Corporation

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Income	1
	Consolidated Statements of Comprehensive Income	2
	Consolidated Balance Sheets	3
	Consolidated Statements of Changes in Total Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to the Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	65
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	66
Item 1.A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 4.	Mine Safety Disclosures	68
Item 6.	Exhibits	69
SIGNATURE		70
INDEX TO EXHIBITS		E-1

As used herein, “Cigna” or the “Company” refers to one or more of Cigna Corporation and its consolidated subsidiaries.

Part I.   FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

Cigna Corporation

Consolidated Statements of Income

	Unaudited
	Three Months Ended
	March 31,
(In millions, except per share amounts)	2017		2016
Revenues
Premiums	$	8,103	$	7,746
Fees and other revenues	1,223		1,201
Net investment income	303		272
Mail order pharmacy revenues	710		697
Realized investment gains (losses):
Other-than-temporary impairments on fixed maturities	(7)		(27)
Other realized investment gains (losses), net	53		(5)
Net realized investment gains (losses)	46		(32)
TOTAL REVENUES	10,385		9,884
Benefits and Expenses
Global Health Care medical costs	4,985		4,761
Other benefit expenses	1,367		1,368
Mail order pharmacy costs	581		574
Other operating expenses	2,530		2,321
Amortization of other acquired intangible assets, net	32		41
TOTAL BENEFITS AND EXPENSES	9,495		9,065
Income before Income Taxes	890		819
Income taxes:
Current	286		294
Deferred	11		11
TOTAL INCOME TAXES	297		305
Net Income	593		514
Less: Net (Loss) Attributable to Noncontrolling Interests	(5)		(5)
SHAREHOLDERS’ NET INCOME	$	598	$	519
Shareholders’ Net Income Per Share:
Basic	$	2.34	$	2.04
Diluted	$	2.30	$	2.00
Dividends Declared Per Share	$	0.04	$	0.04

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

1

Cigna Corporation

Consolidated Statements of Comprehensive Income

	Unaudited
	Three Months Ended
	March 31,
(In millions)	2017		2016
Shareholders’ net income	$	598	$	519
Shareholders’ other comprehensive income, net of tax:
Net unrealized appreciation, securities	7		173
Net unrealized (depreciation), derivatives	(3)		(3)
Net translation of foreign currencies	112		81
Postretirement benefits liability adjustment	14		11
Shareholders’ other comprehensive income, net of tax	130		262
Shareholders’ comprehensive income	728		781
Comprehensive income (loss) attributable to noncontrolling interests:
Net (loss) attributable to redeemable noncontrolling interests	(2)		(1)
Net (loss) attributable to other noncontrolling interests	(3)		(4)
Other comprehensive income (loss) attributable to redeemable noncontrolling interests	(2)		3
Total comprehensive (loss) attributable to noncontrolling interests	(7)		(2)
TOTAL COMPREHENSIVE INCOME	$	721	$	779

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

2

Cigna Corporation

Consolidated Balance Sheets

	Unaudited
	As of		As of
	March 31,		December 31,
(In millions, except per share amounts)	2017		2016
Assets
Investments:
Fixed maturities, at fair value (amortized cost, $20,639; $19,942)	$	21,734	$	20,961
Equity securities, at fair value (cost, $584; $583)	574		583
Commercial mortgage loans	1,752		1,666
Policy loans	1,431		1,452
Other long-term investments	1,465		1,462
Short-term investments	303		691
Total investments	27,259		26,815
Cash and cash equivalents	4,155		3,185
Premiums, accounts and notes receivable, net	3,154		3,077
Reinsurance recoverables	6,386		6,478
Deferred policy acquisition costs	1,982		1,818
Property and equipment	1,519		1,536
Deferred tax assets, net	263		304
Goodwill	5,982		5,980
Other assets, including other intangibles	2,250		2,227
Separate account assets	8,197		7,940
TOTAL ASSETS	$	61,147	$	59,360
Liabilities
Contractholder deposit funds	$	8,415	$	8,458
Future policy benefits	9,840		9,648
Unpaid claims and claim expenses	5,006		4,917
Global Health Care medical costs payable	2,770		2,532
Unearned premiums	1,204		634
Total insurance and contractholder liabilities	27,235		26,189
Accounts payable, accrued expenses and other liabilities	6,667		6,414
Short-term debt	142		276
Long-term debt	4,621		4,756
Separate account liabilities	8,197		7,940
TOTAL LIABILITIES	46,862		45,575
Contingencies — Note 16
Redeemable noncontrolling interests	56		58
Shareholders’ Equity
Common stock (par value per share, $0.25; shares issued, 296; authorized, 600)	74		74
Additional paid-in capital	2,912		2,892
Accumulated other comprehensive (loss)	(1,252)		(1,382)
Retained earnings	14,356		13,855
Less treasury stock, at cost	(1,864)		(1,716)
TOTAL SHAREHOLDERS’ EQUITY	14,226		13,723
Other noncontrolling interests	3		4
Total equity	14,229		13,727
Total liabilities and equity	$	61,147	$	59,360
SHAREHOLDERS’ EQUITY PER SHARE	$	55.52	$	53.42

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

3

Cigna Corporation

Consolidated Statements of Changes in Total Equity

					Accumulated												Redeemable
Unaudited			Additional		Other								Other non-				Non-
For the three months ended March 31, 2017	Common		Paid-in		Comprehensive		Retained		Treasury		Shareholders’		controlling		Total		controlling
(In millions)	Stock		Capital		Loss		Earnings		Stock		Equity		Interests		Equity		Interests
Balance at January 1, 2017	$	74	$	2,892	$	(1,382)	$	13,855	$	(1,716)	$	13,723	$	4	$	13,727	$	58
Effect of issuing stock for employee benefit plans			23				(87)		102		38				38
Other comprehensive income (loss)					130						130				130		(2)
Net income (loss)							598				598		(3)		595		(2)
Common dividends declared (per share: $0.04)							(10)				(10)				(10)
Repurchase of common stock									(250)		(250)				(250)
Other transactions impacting noncontrolling interests			(3)								(3)		2		(1)		2
BALANCE AT MARCH 31, 2017	$	74	$	2,912	$	(1,252)	$	14,356	$	(1,864)	$	14,226	$	3	$	14,229	$	56
For the three months ended March 31, 2016
Balance at January 1, 2016	$	74	$	2,859	$	(1,250)	$	12,121	$	(1,769)	$	12,035	$	9	$	12,044	$	69
Effect of issuing stock for employee benefit plans			21				(89)		53		(15)				(15)
Other comprehensive (loss)					262						262				262		3
Net income (loss)							519				519		(4)		515		(1)
Common dividends declared (per share: $0.04)							(10)				(10)				(10)
Repurchase of common stock									(110)		(110)				(110)
Other transactions impacting noncontrolling interests			(6)								(6)		4		(2)		2
BALANCE AT MARCH 31, 2016	$	74	$	2,874	$	(988)	$	12,541	$	(1,826)	$	12,675	$	9	$	12,684	$	73

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

4

Cigna Corporation

Consolidated Statements of Cash Flows

	Unaudited
	Three Months Ended March 31,
(In millions)	2017		2016
Cash Flows from Operating Activities
Net income	$	593	$	514
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	146		158
Realized investment (gains) losses	(46)		32
Deferred income taxes	11		11
Net changes in assets and liabilities, net of non-operating effects:
Premiums, accounts and notes receivable	(55)		(237)
Reinsurance recoverables	41		24
Deferred policy acquisition costs	(76)		(62)
Other assets	(22)		(57)
Insurance liabilities	868		507
Accounts payable, accrued expenses and other liabilities	(186)		(263)
Current income taxes	291		262
Distributions from partnership investments (1)	45		27
Other, net	(31)		5
NET CASH PROVIDED BY OPERATING ACTIVITIES (1)	1,579		921
Cash Flows from Investing Activities
Proceeds from investments sold:
Fixed maturities and equity securities	414		361
Investment maturities and repayments:
Fixed maturities and equity securities	475		255
Commercial mortgage loans	21		18
Other sales, maturities and repayments (primarily short-term and other long-term investments) (1)	667		75
Investments purchased or originated:
Fixed maturities and equity securities	(1,240)		(758)
Commercial mortgage loans	(107)		(1)
Other (primarily short-term and other long-term investments)	(256)		(198)
Property and equipment purchases	(91)		(112)
NET CASH (USED IN) INVESTING ACTIVITIES (1)	(117)		(360)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	374		383
Withdrawals and benefit payments from contractholder deposit funds	(385)		(343)
Net change in short-term debt	(10)		(6)
Repayment of long-term debt	(250)		—
Repurchase of common stock	(239)		(139)
Issuance of common stock	38		10
Other, net	(43)		(51)
NET CASH (USED IN) FINANCING ACTIVITIES	(515)		(146)
Effect of foreign currency rate changes on cash and cash equivalents	23		18
Net increase in cash and cash equivalents	970		433
Cash and cash equivalents, January 1,		3,185		1,968
Cash and cash equivalents, March 31,	$	4,155	$	2,401
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds	$	(8)	$	37
Interest paid	$	70	$	69

(1) As required in adopting Accounting Standard Update (“ASU”) 2016-15, the Company retrospectively reclassified $27 million of cash distributions from partnership earnings from investing to operating activities for the first quarter of 2016.  The comparable amount reported in operating activities in 2017 was $45 million.  See Note 2 for further discussion.

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

5

CIGNA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TABLE OF CONTENTS

Note Number	Footnote	Page
BUSINESS AND CAPITAL STRUCTURE
1	Description of Business	7
2	Significant Accounting Policies	8
3	Mergers and Acquisitions	10
4	Earnings Per Share	11
5	Debt	12
INSURANCE INFORMATION
6	Global Health Care Medical Costs Payable	13
7	Liabilities for Unpaid Claims and Claim Expenses	14
8	Reinsurance	15
INVESTMENTS
9	Fair Value Measurements	18
10	Investments	28
11	Derivatives	33
12	Variable Interest Entities	35
13	Accumulated Other Comprehensive Income (Loss)	36
WORKFORCE MANAGEMENT AND COMPENSATION
14	Pension and Other Postretirement Benefit Plans	37
COMPLIANCE, REGULATION AND CONTINGENCIES
15	Income Taxes	37
16	Contingencies and Other Matters	38
RESULTS DETAILS
17	Segment Information	43

6

Note 1 – Description of Business

Cigna Corporation, together with its subsidiaries (either individually or collectively referred to as “Cigna,” the “Company,” “we,” “our” or “us”)  is a global health services organization dedicated to a mission of helping individuals improve their health, well-being and sense of security.  To execute on our mission, Cigna’s strategy is to “Go Deep”, “Go Global” and “Go Individual” with a differentiated set of medical, dental, disability, life and accident insurance and related products and services offered by our insurance and other subsidiaries.  The majority of these products are offered through employers and other groups (e.g. governmental and non-governmental organizations, unions and associations).  Cigna also offers commercial health and dental insurance, Medicare and Medicaid products and health, life and accident insurance coverages to individuals in the U.S. and selected international markets.  In addition to its ongoing operations described above, Cigna also has certain run-off operations.

The financial results of the Company’s businesses are reported in the following segments:

Global Health Care aggregates the Commercial and Government operating segments due to their similar economic characteristics, products and services and regulatory environment:

·     The Commercial operating segment encompasses both the U.S. commercial and certain international health care businesses serving employers and their employees, other groups and individuals.  Products and services include medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services to insured and self-insured customers.

·     The Government operating segment offers Medicare Advantage and Medicare Part D plans to seniors.  This segment also offers Medicaid plans in selected markets.

Global Supplemental Benefits includes supplemental health, life and accident insurance products offered in selected international markets and in the U.S.

Group Disability and Life provides group long-term and short-term disability, group life, accident and specialty insurance products and related services.

Other Operations consist of:

·     corporate-owned life insurance (“COLI”);

·     run-off reinsurance business that is predominantly comprised of guaranteed minimum death benefit (“GMDB”) and guaranteed minimum income benefit (“GMIB”) business effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire”) in 2013;

·     deferred gains recognized from the 1998 sale of the individual life insurance and annuity business and the 2004 sale of the retirement benefits business; and

·     run-off settlement annuity business.

Corporate reflects amounts not allocated to operating segments, such as net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), interest on uncertain tax positions, certain litigation matters, intersegment eliminations, compensation cost for stock options, excess tax benefits on stock compensation, expense associated with frozen pension plans and certain costs for corporate projects, including overhead.

7

Note 2 – Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements include the accounts of Cigna Corporation and its subsidiaries.  Intercompany transactions and accounts have been eliminated in consolidation.  These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).  Amounts recorded in the Consolidated Financial Statements necessarily reflect management’s estimates and assumptions about medical costs, investment valuation, interest rates and other factors.  Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates.  The impact of a change in estimate is generally included in earnings in the period of adjustment.  Certain reclassifications may be made to prior year amounts to conform to the current presentation.

These interim Consolidated Financial Statements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported.  The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company’s 2016 Annual Report on Form 10-K (“2016 Form 10-K”).  The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates.  This and certain other factors, including the seasonal nature of portions of the health care and related benefits business as well as competitive and other market conditions, call for caution in estimating full year results based on interim results of operations.

Recent Accounting Pronouncements

The Company’s 2016 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future.

The following tables provide information about recently adopted and recently issued or changed accounting guidance (applicable to Cigna) that have occurred since the Company filed its 2016 Form 10-K.

Recently Adopted Accounting Guidance

Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (Accounting Standards Update (“ASU”) 2016-15)	Specifies how certain transactions should be classified in the statement of cash flows. While the standard addresses multiple types of transactions, only a change in the treatment of distributions from equity method investments impacted the Company.
Early adopted as of December 31, 2016	Effects of adoption: using the nature of distribution approach, the Company reported $45 million of cash receipts related to distributions from partnership earnings in operating activities for the three months ended March 31, 2017. The Company reclassified $27 million for the three months ended March 31, 2016 from investing to operating activities in the Consolidated Statements of Cash Flows.

8

Recently Issued Accounting Guidance Not Yet Adopted

Accounting Standard and Effective Date Applicable for Cigna	Requirements and Expected Effects of New Guidance Not Yet Adopted
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) Required as of January 1, 2018	Requires employers to separate the service cost component from the other components of net benefit cost.  Under the new guidance, only service cost is eligible for capitalization (either deferred policy acquisition costs or capitalized software).  The change in the capitalization rule is to be applied prospectively upon adoption.  In addition, the income statement caption(s) where each component of net benefit cost is presented must be disclosed. Expected effects: the Company expects the effect of this new guidance to be immaterial to its results of operations.
Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) Required as of January 1, 2018	Requires: · Entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method · Cumulative effect adjustment to the beginning balance of retained earnings at adoption Expected effects: · Certain limited partnership interests carried at cost of $240 million as of March 31, 2017 will be reported at fair value at adoption · An increase to retained earnings of approximately $50 million, after-tax, if implemented as of March 31, 2017.  Actual cumulative effect adjustment will depend on investments held and market conditions at adoption.
Revenue from Contracts with Customers (ASU 2014-09 and related amendments) Required as of January 1, 2018, with early adoption permitted as of January 1, 2017	Requires: · Companies to estimate and allocate the expected customer contract revenues among distinct goods or services based on relative standalone selling prices · Revenues to be recognized as goods or services are delivered · Extensive new disclosures including the presentation of additional categories of revenues and information about related contract assets and liabilities · Adoption through retrospective restatement with or without using certain practical expedients or adoption with a cumulative effect adjustment Expected effects: · Applies to the Company’s non-insurance, administrative service contracts but does not apply to certain contracts within the scope of other GAAP, such as insurance contracts · The Company currently expects to adopt the new guidance as of January 1, 2018 through retrospective restatement · The Company does not currently expect the adoption of the new guidance to have a material impact to its pattern of revenue recognition or net income · The Company is continuing to evaluate the new requirements.  Specifically, the Company is evaluating the combination of contract guidance for certain customers when the Company provides both insurance and non-insurance products, the deferral of revenue for services provided after the termination of certain administrative contracts and the Company’s status as principal or agent for certain performance obligations.

9

Note 3 – Mergers and Acquisitions

Proposed Merger

On July 23, 2015, the Company entered into a merger agreement with Anthem, Inc. (“Anthem”) and Anthem Merger Sub Corp. (“Merger Sub”), a direct wholly-owned subsidiary of Anthem.

The merger agreement provides (a) for the merger of the Company and Merger Sub, with the Company continuing as the surviving corporation and (b) if certain tax opinions are delivered, immediately following the completion of the initial merger, for the surviving corporation to be merged with and into Anthem, with Anthem continuing as the surviving corporation (collectively, the “merger”).  Subject to certain terms, conditions, and customary operating covenants, each share of Cigna common stock issued and outstanding immediately prior to the effective time of the merger would be converted into the right to receive (a) $103.40 in cash, without interest, and (b) 0.5152 of a share of Anthem common stock.  The closing price of Anthem common stock on May 4, 2017 was $179.89.

At special shareholders’ meetings held in December 2015, Cigna shareholders approved the merger and Anthem shareholders approved the issuance of shares of Anthem common stock in connection with the merger.  Completing the merger remains subject to certain customary conditions, including the receipt of certain necessary governmental and regulatory approvals and the absence of a legal restraint prohibiting the merger.  Completing the merger is not subject to a financing condition.

On July 21, 2016, the U.S. Department of Justice (“DOJ”) and certain state attorneys general filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia (the “District Court”) seeking to block the merger and, on January 4, 2017, the parties concluded the District Court trial.

On January 18, 2017, the Company received a written notice from Anthem seeking to extend the termination date of the merger agreement from January 31, 2017 to April 30, 2017.

On February 8, 2017, the District Court issued an order enjoining the proposed merger.  Anthem filed a notice of appeal of the District Court’s order with the U.S. Court of Appeals for the District of Columbia Circuit (the “Appeals Court”) and requested an expedited appeal.

On February 14, 2017, the Company delivered a notice to Anthem terminating the merger agreement and filed suit in the Delaware Court of Chancery (the “Chancery Court”) seeking, among other things, declaratory judgment that Cigna’s termination of the merger agreement is lawful and that Anthem does not have the right to extend the merger agreement termination date.  Later that day, Anthem filed a lawsuit in the Chancery Court against the Company seeking, among other things, a temporary restraining order to enjoin Cigna from terminating the merger agreement, specific performance and damages, and, on February 15, 2017, the Chancery Court issued an order temporarily enjoining the Company from terminating the merger agreement.  This order will be subject to further review at a preliminary injunction hearing scheduled for May 8, 2017.

On February 17, 2017, the Appeals Court granted Anthem’s motion for an expedited appeal.  That same day, the Company filed its notice of appeal of the District Court’s order enjoining the merger with the Appeals Court.  Oral arguments were heard on March 24, 2017.  On April 28, 2017, the Appeals Court affirmed the decision of the District Court. On May 5, 2017, Anthem filed a petition for a writ of certiorari with the United States Supreme Court seeking appeal of the U.S. Court of Appeals decision affirming the District Court’s order enjoining the merger.

The merger agreement contains customary covenants, including covenants that Cigna conduct its business in the ordinary course during the period between entering into the merger agreement and closing.  In addition, Cigna’s ability to take certain actions prior to closing without Anthem’s consent is subject to certain limitations.  These limitations relate to, among other matters, the payment of dividends, capital expenditures, the payment or retirement of indebtedness or the incurrence of new indebtedness, settlement of material claims or proceedings, mergers or acquisitions, and certain employment-related matters.

The Company incurred $63 million pre-tax ($49 million after-tax) for the three months ended March 31, 2017 in costs directly related to the proposed merger.  Comparable merger-related costs for the three months ended March 31, 2016 were $40 million pre-tax ($36 million after-tax).  Since entering into this merger agreement in 2015, the Company has incurred pre-tax merger-related costs of approximately $295 million that primarily consisted of fees for legal, advisory and other professional services.  If the merger is consummated, a significant portion of these merger-related costs would not be deductible for federal income tax purposes.  If the merger is not consummated, these otherwise non-deductible costs would become tax deductible for federal income tax purposes, resulting in an incremental tax benefit of approximately $60 million.

10

Note 4 – Earnings Per Share (“EPS”)

Basic and diluted earnings per share were computed as follows:

	Three Months Ended
	March 31, 2017						March 31, 2016
(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders’ net income	$	598			$	598	$	519			$	519
Shares:
Weighted average	255,680				255,680		254,822				254,822
Common stock equivalents			4,094		4,094				4,625		4,625
Total shares	255,680		4,094		259,774		254,822		4,625		259,447
EPS	$	2.34	$	(0.04)	$	2.30	$	2.04	$	(0.04)	$	2.00

The following outstanding employee stock options were not included in the computation of diluted earnings per share for the three months ended March 31, 2017 and 2016 because their effect was anti-dilutive.

	Three Months Ended
(In millions)	March 31, 2017	March 31, 2016
Anti-dilutive options	2.5	1.3

The Company held 39,928,289 shares of common stock in Treasury as of March 31, 2017, and 39,638,264 shares as of March 31, 2016.

11

Note 5— Debt

The outstanding amounts of debt and capital leases were as follows:

	March 31,		December 31,
(In millions)	2017		2016
Short-term:
Current maturities of long-term debt	$	131	$	250
Other, including capital leases	11		26
Total short-term debt	$	142	$	276
Long-term:
$131 million, 6.35% Notes due 2018	$	-	$	131
$250 million, 4.375% Notes due 2020 (1)	252		252
$300 million, 5.125% Notes due 2020 (1)	301		301
$78 million, 6.37% Notes due 2021	78		78
$300 million, 4.5% Notes due 2021 (1)	301		302
$750 million, 4% Notes due 2022	744		744
$100 million, 7.65% Notes due 2023	100		100
$17 million, 8.3% Notes due 2023	17		17
$900 million, 3.25% Notes due 2025	893		893
$300 million, 7.875% Debentures due 2027	299		299
$83 million, 8.3% Step Down Notes due 2033	82		82
$500 million, 6.15% Notes due 2036	498		498
$300 million, 5.875% Notes due 2041	296		296
$750 million, 5.375% Notes due 2042	743		743
Other, including capital leases	17		20
Total long-term debt	$	4,621	$	4,756

(1) The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments.  See Note 11 for further information about the Company’s interest rate risk management and these derivative instruments.

The Company repaid $250 million of long-term notes that matured in the first quarter of 2017.

The Company has a five-year revolving credit and letter of credit agreement for $1.5 billion that permits up to $500 million to be used for letters of credit.  This agreement extends through December 12, 2019 and is diversified among 16 banks, with three banks each having 12% of the commitment and the remainder spread among 13 banks in varying amounts.  The credit agreement includes options subject to consent by the administrative agent and the committing banks to increase the commitment amount to $2 billion and to extend the term past December 12, 2019.  The credit agreement is available for general corporate purposes, including for the issuance of letters of credit.  The credit agreement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – which is total consolidated debt to total consolidated capitalization (each as defined in the credit agreement) – to be greater than 0.50.  The leverage ratio calculation excludes the following items that are included in accumulated other comprehensive loss on the Company’s consolidated balance sheets: net unrealized appreciation on fixed maturities and the portion of the post-retirement benefits liability adjustment attributable to pension.

In addition to the $4.8 billion of debt outstanding as of March 31, 2017, the Company had $10.5 billion of borrowing capacity within the maximum debt coverage covenant in the credit agreement.  This additional borrowing capacity includes the $1.5 billion available under the credit agreement.  Letters of credit outstanding as of March 31, 2017 totaled $13 million.

The Company was in compliance with its debt covenants as of March 31, 2017.

12

Note 6— Global Health Care Medical Costs Payable

Medical costs payable for the Global Health Care segment reflects estimates of the ultimate cost of claims that have been incurred but not reported, those that have been reported but not yet paid (reported claims in process), and other medical care expenses and services payable that are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities.  See Note 7 to the Consolidated Financial Statements in the Company’s 2016 Form 10-K for further information about the assumptions and estimates used to establish this liability.

Components of the Global Health Care medical costs payable balances as of March 31 were as follows:

	March 31,		March 31,
(In millions)	2017		2016
Incurred but not reported	$	2,088	$	1,960
Reported claims in process	542		506
Physician incentives and other medical care expenses and services payable	140		180
Global Health Care medical costs payable	$	2,770	$	2,646

Activity in medical costs payable was as follows:

	Three Months Ended
	March 31,		March 31,
(In millions)	2017		2016
Beginning balance	$	2,532	$	2,355
Less: Reinsurance and other amounts recoverable	275		243
Beginning balance, net	2,257		2,112
Incurred costs related to:
Current year	5,161		4,825
Prior years	(176)		(64)
Total incurred	4,985		4,761
Paid costs related to:
Current year	3,219		2,985
Prior years	1,509		1,449
Total paid	4,728		4,434
Ending balance, net	2,514		2,439
Add: Reinsurance and other amounts recoverable	256		207
Ending balance	$	2,770	$	2,646

Reinsurance and other amounts recoverable includes amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for certain business where the Company administers the plan benefits but the right of offset does not exist.  See Note 8 for additional information on reinsurance.

For the periods ended March 31, incurred costs related to prior years were attributable to the following factors:

	Three Months Ended
(Dollars in millions)	March 31, 2017			March 31, 2016
	$		%(1)	$		%(2)
Actual completion factors	$	78	0.4%	$	51	0.3%
Medical cost trend	98		0.5	28		0.1
Other (3)	-		-	(15)		(0.1)
Total favorable (unfavorable) variance	$	176	0.9%	$	64	0.3%

(1) Percentage of current year incurred costs as reported for the year ended December 31, 2016.

(2) Percentage of current year incurred costs as reported for the year ended December 31, 2015.

(3) Other amounts in 2016 related to increased medical costs in the Government segment resulting from additional provider risk sharing.

13

Incurred costs related to prior years in the table above, although adjusted through shareholders’ net income, do not directly correspond to an increase or decrease to shareholders’ net income.  The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established for moderately adverse conditions are not considered as impacting shareholders’ net income if they are offset by increases in the current year provision for moderately adverse conditions.

The net impact of prior year development on shareholders’ net income was a $61 million increase for the three months ended March 31, 2017 compared with a $14 million increase for the three months ended March 31, 2016.  Favorable prior year development implies primarily lower than expected utilization of medical services.

Note 7 – Liabilities for Unpaid Claims and Claim Expenses

The following information relates to the Company’s unpaid claims and claim expense liabilities that are related to short-duration insurance contracts.  See Note 8 to the Consolidated Financial Statements in the Company’s 2016 Form 10-K for further information about the assumptions and estimates used to establish this liability.

The liability for unpaid claims and claim expenses by segment as of March 31 is as follows:

	March 31,		March 31,
(In millions)	2017		2016
Group Disability and Life	$	4,384	$	4,146
Global Supplemental Benefits	425		367
Other Operations	197		211
Unpaid claims and claim expenses	$	5,006	$	4,724

Activity in the Company’s Group Disability and Life and the Global Supplemental Benefits segments’ liabilities for unpaid claims and claim expenses are presented in the following table.  Liabilities associated with the Company’s Other Operations segment are excluded because they pertain to obligations for long-duration insurance contracts or, if short-duration, the liabilities have been fully reinsured.

	Three Months Ended
(In millions)	March 31, 2017		March 31, 2016
Beginning balance	$	4,726	$	4,359
Less: Reinsurance	121		115
Beginning balance, net	4,605		4,244
Incurred claims related to:
Current year	1,148		988
Prior years:
Interest accretion	43		43
All other incurred	(64)		105
Total incurred	1,127		1,136
Paid claims related to:
Current year	371		327
Prior years	691		660
Total paid	1,062		987
Foreign currency	16		5
Ending balance, net	4,686		4,398
Add: Reinsurance	123		115
Ending balance	$	4,809	$	4,513

Reinsurance in the table above reflects amounts due from reinsurers related to unpaid claims liabilities.  The Company’s insurance subsidiaries enter into agreements with other companies primarily to limit losses from large exposures and to permit recovery of a portion of incurred losses.  See Note 8 for additional information on reinsurance.

14

The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts.  Interest earned on assets backing these liabilities is an integral part of pricing and reserving, and is therefore the basis for determining the rate used to discount these liabilities.  Accordingly, interest accreted on prior year balances is shown as a separate component of prior year incurred claims.  This interest is calculated by applying the average discount rate used in determining the liability balance to the average liability balance over the period.  The remaining prior year incurred claims amount primarily reflects updates to the Company’s liability estimates and variances between actual experience during the period relative to the assumptions and expectations reflected in determining the liability.  Assumptions reflect the Company’s expectations over the life of the book of business and will vary from actual experience in any period, both favorably and unfavorably, with variation in resolution rates being the most significant driver for the long-term disability business.  Favorable prior year incurred claims reported in 2017 largely reflect improved claim resolution rates.  Unfavorable prior year incurred claims reported in 2016 included the impact of modifications made to our disability claims management process and a period of elevated life claims.

Note 8 — Reinsurance

The Company’s insurance subsidiaries enter into agreements with other insurance companies to assume and cede reinsurance.  Reinsurance is ceded primarily to limit losses from large exposures and to permit recovery of a portion of direct or assumed losses.  Reinsurance is also used in acquisition and disposition transactions when the underwriting company is not being acquired.  Reinsurance does not relieve the originating insurer of liability.  The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk.

Reinsurance Recoverables

The majority of the Company’s reinsurance recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired.  Components of the Company’s reinsurance recoverables are presented below:

(In millions)

Line of Business	Reinsurer(s)	March 31, 2017		December 31, 2016		Collateral and Other Terms at March 31, 2017
Ongoing operations:
Global Health Care, Global Supplemental Benefits, Group Disability and Life	Various	$	478	$	478	Recoverables from approximately 80 reinsurers including the U.S. Government, used in the ordinary course of business. Current balances range from less than $1 million up to $93 million. Excluding the recoverable from the U.S. Government of $39 million, over 60% of the balance is from companies rated investment grade by Standard & Poor’s, and 13% is secured by assets in trusts or letters of credit.
Total recoverables related to ongoing operations		478		478
Acquisition, disposition or runoff activities:
Individual Life and Annuity (sold in 1998)	Lincoln National Life and Lincoln Life & Annuity of New York	3,551		3,586		Both companies’ ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance.
GMDB	Berkshire	1,052		1,085		100% secured by assets in a trust.
	Other	42		44		100% secured by assets in a trust or letters of credit.
Retirement Benefits Business (sold in 2004)	Prudential Retirement Insurance and Annuity	904		921		100% secured by assets in a trust.
Supplemental Benefits Business (2012 acquisition)	Great American Life	293		297		100% secured by assets in a trust.
Other run-off reinsurance	Various	66		67		100% secured by assets in trusts.
Total recoverables related to acquisition, disposition or runoff activities		5,908		6,000
Total reinsurance recoverables		$	6,386	$	6,478

15

The Company bears the risk of loss if its reinsurers and retrocessionaires do not meet or are unable to meet their reinsurance obligations to the Company.  The Company reviews its reinsurance arrangements and establishes reserves against the recoverables if recovery is not considered probable.  As of March 31, 2017, the Company’s recoverables were net of a reserve of approximately $3 million.

Effects of Reinsurance

In the Company’s Consolidated Statements of Income, premiums were reported net of amounts ceded to reinsurers and Global Health Care medical costs and other benefit expenses were reported net of reinsurance recoveries in the following amounts:

	Three Months Ended
	March 31,
(In millions)	2017		2016
Ceded premiums:
Individual life insurance and annuity business sold	$	39	$	41
Other	81		95
Total ceded premiums	$	120	$	136
Reinsurance recoveries:
Individual life insurance and annuity business sold	$	70	$	68
Other	29		96
Total reinsurance recoveries	$	99	$	164

The decrease in reinsurance recoveries in 2017 is primarily due to the ceded GMDB business.  The ceded reserves declined during the three months ended March 31, 2017 due primarily to favorable equity market conditions, while the ceded reserves increased during the three months ended March 31, 2016 due to changes in the capital market assumptions that are used to calculate the reserves.

Effective Exit of GMDB and GMIB Business

In 2013, the Company entered into an agreement with Berkshire to effectively exit the GMDB and GMIB business via a reinsurance transaction.  Berkshire reinsured 100% of the Company’s future claim payments in this business, net of other reinsurance arrangements existing at that time.  The Berkshire reinsurance agreement is subject to an overall limit with approximately $3.5 billion remaining as of March 31, 2017.

A discussion of each of these businesses follows.  While GMDB is accounted for as reinsurance, GMIB assets and liabilities are reported as derivatives at fair value as discussed below.  Accordingly, GMIB assets are reported in other assets, including intangibles, and GMIB liabilities are reported in accounts payable, accrued expenses and other liabilities.

GMDB

The Company estimates the gross liability and reinsurance recoverable with an internal model based on the Company’s experience and future expectations over an extended period, consistent with the long-term nature of this product.  As a result of the reinsurance transaction, reserve increases have a corresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overall Berkshire limit (including the GMIB asset presented below).  The ending net retained reserve covers ongoing administrative expenses, as well as minor claim exposure retained by the Company.

Because the product is premium deficient, the Company records an increase to the net retained reserve if it is inadequate based on the model.

16

Activity in future policy benefit reserves for the GMDB business was as follows:

	For the period ended
	March 31,		December 31,
(In millions)	2017		2016
Balance at January 1	$	1,224	$	1,252
Add: Unpaid claims	16		18
Less: Reinsurance and other amounts recoverable	1,129		1,164
Balance at January 1, net	111		106
Add: Incurred benefits	-		4
Less: Paid benefits (recoveries)	(1)		(1)
Ending balance, net	112		111
Less: Unpaid claims	18		16
Add: Reinsurance and other amounts recoverable	1,094		1,129
Ending balance	$	1,188	$	1,224

Benefits paid and incurred are net of ceded amounts.

The table below presents the account value, net amount at risk and number of underlying contractholders for guarantees assumed by the Company in the event of death.  The net amount at risk is the amount that the Company would have to pay if all contractholders died as of the specified date.  Unless the Berkshire reinsurance limit is exceeded, the Company should be reimbursed in full for these payments.

(Dollars in millions, excludes impact of reinsurance ceded)	March 31, 2017		December 31, 2016
Account value	$	10,755	$	10,650
Net amount at risk	$	2,335	$	2,458
Number of contractholders	280,000		285,000

GMIB

In this business, the Company reinsured contracts with issuers of GMIB products.  The Company’s exposure represents the excess of a contractually guaranteed amount over the level of variable annuity account values.  Payment by the Company depends on the actual account value in the underlying mutual funds and the level of interest rates when the contractholders elect to receive minimum income payments that must occur within 30 days of a policy anniversary after the appropriate waiting period.  The Company has purchased retrocessional coverage (“GMIB assets”) for these contracts.

The Company reports GMIB liabilities and assets as derivatives at fair value because cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments.

As of March 31, 2017, there were three reinsurers for GMIB as follows:

(In millions)

Line of Business	Reinsurer(s)	March 31, 2017		December 31, 2016		Collateral and Other Terms at March 31, 2017
GMIB	Berkshire	$	360	$	370	100% secured by assets in a trust.
	Sun Life Assurance Company of Canada	220		227
	Liberty Re (Bermuda) Ltd.	197		202		100% secured by assets in a trust.
Total GMIB recoverables reported in other assets		$	777	$	799

17

Assumptions used in fair value measurement.  The Company estimates the fair value of the assets and liabilities for GMIB contracts by calculating the results for many scenarios run through a model utilizing various assumptions.  The only assumption expected to impact future shareholders’ net income is non-performance risk.  The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company, and (b) the GMIB assets to be paid by the reinsurers, after considering collateral.

Other assumptions that affect GMIB assets and liabilities include capital market assumptions (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments) and future annuitant behavior (including mortality, lapse, and annuity election rates).  As certain assumptions used to estimate fair values for these contracts are largely unobservable (primarily related to future annuitant behavior), the Company classifies GMIB assets and liabilities in Level 3 in the fair value hierarchy presented in Note 9.

The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities.  Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to calculate the non-performance risk of the reinsurers, would result in higher fair value measurements.  A change in one of these assumptions is not necessarily accompanied by a change in another assumption.

GMIB guarantees.  Future payments are not fixed and determinable under the terms of these contracts.  Accordingly, the Company calculated exposure, without considering any reinsurance coverage, using the following hypothetical assumptions:

·no annuitants surrendered their accounts;

·all annuitants lived to elect their benefit;

·all annuitants elected to receive their benefit on the next available date (2017 through 2021); and

·all underlying mutual fund investment values remained at the March 31, 2017 value of $818 million with no future returns.

The Company has reinsurance coverage in place that covers the exposures on these contracts.  Using these hypothetical assumptions, GMIB exposure is $665 million, which is lower than the recorded liability for GMIB calculated using fair value assumptions.

Note 9 — Fair Value Measurements

The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, equity securities, short-term investments and derivatives.  Other financial instruments are measured at fair value only under certain conditions, such as when impaired.

Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date.  A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor.

The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP.  The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3).  An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement.  For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).

The Company estimates fair values using prices from third parties or internal pricing methods.  Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair value.  The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality, as well as other qualitative factors.  In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price.  These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models.

18

The Company is responsible for determining fair value, as well as for assigning the appropriate level within the fair value hierarchy, based on the significance of unobservable inputs.  The Company reviews methodologies, processes and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates.  The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent appropriate estimates of fair value.  The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations.  The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates.  The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations.  Annually, we conduct an on-site visit of the most significant pricing service to review their processes, methodologies and controls.  This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process.

Financial Assets and Financial Liabilities Carried at Fair Value

The following tables provide information as of March 31, 2017 and December 31, 2016 about the Company’s financial assets and liabilities carried at fair value.  Separate account assets that are also recorded at fair value on the Company’s Consolidated Balance Sheets are reported separately under the heading “separate account assets” as gains and losses related to these assets generally accrue directly to policyholders.

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions)	(Level 1)		(Level 2)		(Level 3)		Total
March 31, 2017
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	372	$	525	$	-	$	897
State and local government	-		1,419		-		1,419
Foreign government	-		2,273		39		2,312
Corporate	-		16,144		483		16,627
Mortgage and other asset-backed	-		324		155		479
Total fixed maturities (1)	372		20,685		677		21,734
Equity securities	402		122		50		574
Subtotal	774		20,807		727		22,308
Short-term investments	-		303		-		303
GMIB assets	-		-		777		777
Other derivative assets	-		4		-		4
Total financial assets at fair value, excluding separate accounts	$	774	$	21,114	$	1,504	$	23,392
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	761	$	761
Other derivative liabilities	-		2		-		2
Total financial liabilities at fair value	$	-	$	2	$	761	$	763

(1) Fixed maturities includes $543 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $14 million of appreciation for securities classified in Level 3.  See Note 10 for additional information.

19

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions)	(Level 1)		(Level 2)		(Level 3)		Total
December 31, 2016
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	374	$	503	$	-	$	877
State and local government	-		1,435		-		1,435
Foreign government	-		2,066		47		2,113
Corporate	-		15,552		498		16,050
Mortgage and other asset-backed	-		329		157		486
Total fixed maturities (1)	374		19,885		702		20,961
Equity securities	396		113		74		583
Subtotal	770		19,998		776		21,544
Short-term investments	-		691		-		691
GMIB assets	-		-		799		799
Other derivative assets	-		10		-		10
Total financial assets at fair value, excluding separate accounts	$	770	$	20,699	$	1,575	$	23,044
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	780	$	780
Other derivative liabilities	-		5		-		5
Total financial liabilities at fair value	$	-	$	5	$	780	$	785

(1) Fixed maturities includes $524 million of net appreciation required to adjust future policy benefits for run-off settlement annuity business including $14 million of appreciation for securities classified in Level 3.

Level 1 Financial Assets

Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date.  Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets.

Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities.  Given the narrow definition of Level 1 and the Company’s investment asset strategy to maximize investment returns, a relatively small portion of the Company’s investment assets are classified in this category.

Level 2 Financial Assets and Financial Liabilities

Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument.  Such other inputs include market interest rates and volatilities, spreads and yield curves.  An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.

20

Fixed maturities and equity securities.Approximately 93% of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks.  Because many fixed maturities do not trade daily, third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics.  When recent trades are not available, pricing models are used to determine these prices.  These models calculate fair values by discounting future cash flows at estimated market interest rates.  Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset.  Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events.  For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating.

Nearly all of these instruments are valued using recent trades or pricing models.  Less than 1% of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice.

Short-term investments are carried at fair value which approximates cost.  On a regular basis, the Company compares market prices for these securities to recorded amounts to validate that current carrying amounts approximate exit prices.  The short-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2.

Other derivatives classified in Level 2 represent over-the-counter instruments such as interest rate and foreign currency swap contracts.  Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices.  Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives.  However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustment for credit risk was required as of March 31, 2017 or December 31, 2016.  Level 2 also includes exchange-traded interest rate swap contracts.  Credit risk related to the clearinghouse counterparty and the Company is considered minimal when estimating the fair values of these derivatives because of upfront margin deposits and daily settlement requirements.  The nature and use of these other derivatives are described in Note 11.

Level 3 Financial Assets and Financial Liabilities

Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement.  Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.

The Company classifies certain newly issued, privately-placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3.  Approximately 3% of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category.

Fair values of mortgage and other asset-backed securities, corporate and government fixed maturities are primarily determined using pricing models that incorporate the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads and liquidity of assets with similar characteristics.  For mortgage and other asset-backed securities, inputs and assumptions for pricing may also include collateral attributes and prepayment speeds.  Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation, as well as the issuer’s financial statements.

Quantitative Information about Unobservable Inputs

The following tables summarize the fair value and significant unobservable inputs used in pricing the following securities that were developed directly by the Company as of March 31, 2017 and December 31, 2016.  The range and weighted average basis point amounts (“bps”)  for fixed maturity spreads (adjustment to discount rates) and price-to-earnings multiples for equity investments reflect the Company’s best estimates of the unobservable adjustments a market participant would make to calculate these fair values.

21

Mortgage and other asset-backed securities.  The significant unobservable inputs used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spreads.  When there is limited trading activity for the security, an adjustment for liquidity is made as of the measurement date that considers current market conditions, issuer circumstances and complexity of the security structure.  An adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique.  The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cash flows supporting the bond obligations.  The resulting wide range of unobservable adjustments in the table below is due to the varying liquidity and quality of the underlying collateral, ranging from high credit quality to below investment grade.

Corporate and government fixed maturities.  The significant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity.  When there is limited trading activity for the security, an adjustment is needed to reflect current market conditions and issuer circumstances.

Equity securities.  The significant unobservable input used to value the following equity securities is a multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”).  These securities are comprised of private equity investments with limited trading activity and therefore a ratio of EBITDA is used to estimate value based on company circumstances and relative risk characteristics.

(Fair value in millions)	Fair Value		Unobservable Input	Unobservable Adjustment Range (Weighted Average)
As of March 31, 2017
Fixed maturities:
Mortgage and other asset-backed securities	$	155	Liquidity	60 - 340 (90) bps
			Weighting of credit spreads	170 - 450 (230) bps
Corporate and government fixed maturities		498	Liquidity	70 - 2,550 (340) bps
Total fixed maturities		653
Equity securities		50	Price-to-EBITDA multiples	5.0 - 12.0 (8.3)
Subtotal		703
Securities not priced by the Company(1)		24
Total Level 3 securities	$	727
As of December 31, 2016
Fixed maturities:
Mortgage and other asset-backed securities	$	157	Liquidity	60 - 330 (90) bps
			Weighting of credit spreads	160 - 470 (230) bps
Corporate and government fixed maturities		490	Liquidity	80 - 1,300 (340) bps
Total fixed maturities		647
Equity securities		74	Price-to-EBITDA multiples	4.2 - 11.6 (8.5)
Subtotal		721
Securities not priced by the Company(1)		55
Total Level 3 securities	$	776

(1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.

22

Significant increases in fixed maturity spreads would result in lower fair value measurements while decreases in these inputs would result in higher fair value measurements.  Significant decreases in equity price-to-EBITDA multiples would result in lower fair value measurements while increases in these inputs would result in higher fair value measurements.  Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input.

GMIB contracts.  See discussion in Note 8.

Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value

The following tables summarize the changes in financial assets and financial liabilities classified in Level 3 for the three months ended March 31, 2017 and 2016.  Separate account asset changes are reported separately under the heading “separate account assets” as the changes in fair values of these assets accrue directly to the policyholders.  Gains and losses reported in these tables may include net changes in fair value that are attributable to both observable and unobservable inputs.

For the Three Months Ended March 31, 2017 (In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at January 1, 2017	$	776	$	799	$	(780)	$	19
Gains (losses) included in shareholders’ net income:
GMIB fair value gain/(loss)	-		(11)		11		-
Other	23		1		(4)		(3)
Total gains (losses) included in shareholders’ net income	23		(10)		7		(3)
Losses included in other comprehensive income	(8)		-		-		-
Gains required to adjust future policy benefits for settlement annuities(1)	-		-		-		-
Purchases, sales and settlements:
Purchases	25		-		-		-
Sales	(47)		-		-		-
Settlements	(27)		(12)		12		-
Total purchases, sales and settlements	(49)		(12)		12		-
Transfers into/(out of) Level 3:
Transfers into Level 3	40		-		-		-
Transfers out of Level 3	(55)		-		-		-
Total transfers into/(out of) Level 3	(15)		-		-		-
Balance at March 31, 2017	$	727	$	777	$	(761)	$	16
Total gains (losses) included in shareholders’ net income attributable to instruments held at the reporting date	$	(6)	$	(10)	$	7	$	(3)

(1)  Amounts do not accrue to shareholders.

23

For the Three Months Ended March 31, 2016 (In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at January 1, 2016	$	726	$	907	$	(885)	$	22
Gains (losses) included in shareholders’ net income:
GMIB fair value gain/(loss)	-		61		(61)		-
Other	(25)		(1)		(5)		(6)
Total gains (losses) included in shareholders’ net income	(25)		60		(66)		(6)
Losses included in other comprehensive income	-		-		-		-
Gains required to adjust future policy benefits for settlement annuities(1)	11		-		-		-
Purchases, sales and settlements:
Purchases	24		-		-		-
Sales	-		-		-		-
Settlements	(11)		(10)		10		-
Total purchases, sales and settlements	13		(10)		10		-
Transfers into/(out of) Level 3:
Transfers into Level 3	128		-		-		-
Transfers out of Level 3	(61)		-		-		-
Total transfers into/(out of) Level 3	67		-		-		-
Balance at March 31, 2016	$	792	$	957	$	(941)	$	16
Total gains (losses) included in shareholders’ net income attributable to instruments held at the reporting date	$	(25)	$	60	$	(66)	$	(6)

(1)  Amounts do not accrue to shareholders.

As noted in the preceding tables, total gains and losses included in shareholders’ net income are reflected in the following captions in the Consolidated Statements of Income:

· Realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities and realized investment gains (losses) for the impact of changes in non-performance risk related to GMIB assets and liabilities, similar to hedge ineffectiveness; and

· Other operating expenses for amounts related to GMIB assets and liabilities (GMIB fair value gain/loss), except for the impact of changes in non-performance risk.

In the tables above, gains and losses included in other comprehensive income are reflected in net unrealized appreciation (depreciation) on securities in the Consolidated Statements of Comprehensive Income.

Reclassifications impacting Level 3 financial instruments are reported as transfers into or out of the Level 3 category as of the beginning of the quarter in which the transfer occurs.  Therefore gains and losses in income only reflect activity for the period the instrument was classified in Level 3.

Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company’s best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement.  For the three months ended March 31, 2017, transfers between Level 2 and Level 3 primarily reflect changes in liquidity and credit risk estimates for certain private placement issuers in the metals and mining, electric and capital goods sectors.  For the three months ended March 31, 2016, transfers between Level 2 and Level 3 primarily reflect changes in liquidity and credit risk estimates for certain private placement issuers in the metals and mining and energy sectors.

24

Separate account assets

Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company’s revenues and expenses.  See Note 10 to the Consolidated Financial Statements contained in the Company’s 2016 Form 10-K for additional policy information related to separate accounts.

As of March 31, 2017 and December 31, 2016, separate account assets were as follows:

March 31, 2017 (In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Guaranteed separate accounts (See Note 16)	$	245	$	263	$	-	$	508
Non-guaranteed separate accounts (1)	1,435		5,076		330		6,841
Subtotal	$	1,680	$	5,339	$	330	7,349
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)							848
Total separate account assets							$	8,197
December 31, 2016
Guaranteed separate accounts (See Note 16)	$	238	$	262	$	-	$	500
Non-guaranteed separate accounts (1)	1,368		4,885		331		6,584
Subtotal	$	1,606	$	5,147	$	331	7,084
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)							856
Total separate account assets							$	7,940

(1)  Non-guaranteed separate accounts included $3.8 billion as of March 31, 2017 and $3.7 billion as of December 31, 2016 in assets supporting the Company’s pension plans, including $0.3 billion classified in Level 3 for both periods and $0.8 billion as of March 31, 2017 and $0.9 billion as of December 31, 2016 priced at net asset value (“NAV”) as a practical expedient.

Separate account assets in Level 1 primarily include exchange-listed equity securities.  Level 2 assets primarily include:

· corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and

· actively-traded institutional and retail mutual fund investments and separate accounts priced using the daily net asset value that is the exit price.

25

Separate account assets classified in Level 3 primarily support Cigna’s pension plans, and include certain newly issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above, as well as commercial mortgage loans that are valued according to the methodologies discussed below.  The following tables summarize the changes in separate account assets reported in Level 3 for the three months ended March 31, 2017 and 2016.

	Three Months Ended
	March 31,
(In millions)	2017			2016
Balance, beginning of period	$	331		$	297
Policyholder gains (losses)	27			(1		)
Purchases, sales and settlements:
Purchases	10			4
Sales	(35		)	(1		)
Settlements	(1		)	(2		)
Total purchases, sales and settlements	(26		)	1
Transfers into/(out of) Level 3:
Transfers into Level 3	-			23
Transfers out of Level 3	(2		)	(3		)
Total transfers into/(out of) Level 3	(2		)	20
Balance, end of period	$	330		$	317

Separate account investments in securities partnerships, real estate, and hedge funds are generally valued based on the separate account’s ownership share of the equity of the investee (NAV as a practical expedient), including changes in the fair values of its underlying investments.  Substantially all of these assets support the Cigna Pension Plans.  The table below provides additional information on these investments.

	Fair Value as of				Unfunded		Redemption Frequency	Redemption Notice
(In millions)	March 31, 2017		December 31, 2016		Commitments		(if currently eligible) (1)	Period (1)
Security Partnerships	$	409	$	424	$	340	Not applicable	Not applicable
Real Estate Funds	234		231		-		Quarterly	45-90 days
Hedge Funds	205		201		-		Up to Annually, varying by fund	30-90 days
Total	$	848	$	856	$	340

(1)The attributes noted are effective as of March 31, 2017 and December 31, 2016.

Assets and Liabilities Measured at Fair Value under Certain Conditions

Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments in real estate, partnership entities and commercial mortgage loans when they become impaired.  Impaired values for these asset types classified as Level 3 representing less than 1% of total investments, were written down to their fair values, resulting in realized investment losses of $1 million after-tax for the three months ended March 31, 2017.  There were no impaired real estate entities or commercial mortgage loans written down to fair value for the three months ended March 31, 2016.

26

Fair Value Disclosures for Financial Instruments Not Carried at Fair Value

The following table includes the Company’s financial instruments not recorded at fair value that are subject to fair value disclosure requirements at March 31, 2017 and December 31, 2016.  In addition to universal life products and capital leases, financial instruments that are carried in the Company’s Consolidated Financial Statements at amounts that approximate fair value are excluded from the following table.

	Classification in	March 31, 2017				December 31, 2016
(In millions)	the Fair Value Hierarchy	Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,776	$	1,752	$	1,682	$	1,666
Contractholder deposit funds, excluding universal life products	Level 3	$	1,206	$	1,203	$	1,215	$	1,212
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,331	$	4,735	$	5,460	$	4,991

The fair values for all financial instruments presented in the table above have been estimated using market information when available.  The following valuation methodologies and inputs are used by the Company to determine fair value.

Commercial mortgage loans.  The Company estimates the fair value of commercial mortgage loans generally by discounting the contractual cash flows at estimated market interest rates that reflect the Company’s assessment of the credit quality of the loans.  Market interest rates are derived by calculating the appropriate spread over comparable U.S. Treasury rates based on the property type, quality rating and average life of the loan.  The quality ratings reflect the relative risk of the loan considering debt service coverage, the loan-to-value ratio and other factors.  Fair values of impaired mortgage loans are based on the estimated fair value of the underlying collateral generally determined using an internal discounted cash flow model.  The fair value measurements were classified in Level 3 because the cash flow models incorporate significant unobservable inputs.

Contractholder deposit funds, excluding universal life products.  Generally, these funds do not have stated maturities.  Approximately 70% of these balances can be withdrawn by the customer at any time without prior notice or penalty.  The fair value for these contracts is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value.  Most of the remaining contractholder deposit funds are reinsured by the buyers of the individual life and annuity and retirement benefits businesses.  The fair value for these contracts is determined using the fair value of these buyers’ assets supporting these reinsured contracts.  The Company had reinsurance recoverables equal to the carrying value of these reinsured contracts.  These instruments were classified in Level 3 because certain inputs are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement.

Long-term debt, including current maturities, excluding capital leases.  The fair value of long-term debt is based on quoted market prices for recent trades.  When quoted market prices are not available, fair value is estimated using a discounted cash flow analysis and the Company’s estimated current borrowing rate for debt of similar terms and remaining maturities.  These measurements were classified in Level 2 because the fair values are based on quoted market prices or other inputs that are market observable or can be corroborated by market data.

Fair values of off-balance sheet financial instruments were not material as of March 31, 2017 and December 31, 2016.

27

Note 10 — Investments

Cigna’s investment portfolio consists of a broad range of investments including fixed maturities and equity securities, commercial mortgage loans, other long-term investments and short-term investments.  The sections below provide more detail regarding our investment balances, net investment income and realized investment gains and losses.  See Note 9 for information about the valuation of the Company’s investment portfolio. See Note 11 to the Consolidated Financial Statements contained in the Company’s 2016 Form 10-K for accounting policies for each investment type.

A.Investment Portfolio

Fixed Maturities and Equity Securities

The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at March 31, 2017:

	Amortized		Fair
(In millions)	Cost		Value
Due in one year or less	$	1,405	$	1,416
Due after one year through five years	6,717		6,976
Due after five years through ten years	8,481		8,667
Due after ten years	3,586		4,196
Mortgage and other asset-backed securities	450		479
Total fixed maturities	$	20,639	$	21,734

Actual maturities of these securities could differ from their contractual maturities used in the table above.  This could occur because issuers may have the right to call or prepay obligations, with or without penalties.

28

Gross unrealized appreciation (depreciation) on fixed maturities by type of issuer is shown below.

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Appreciation		Depreciation		Value
(In millions)	March 31, 2017
Federal government and agency	$	667	$	233	$	(3)	$	897
State and local government	1,324		100		(5)		1,419
Foreign government	2,206		122		(16)		2,312
Corporate	15,992		744		(109)		16,627
Mortgage and other asset-backed	450		32		(3)		479
Total fixed maturities	$	20,639	$	1,231	$	(136)	$	21,734
(In millions)	December 31, 2016
Federal government and agency	$	658	$	223	$	(4)	$	877
State and local government	1,342		99		(6)		1,435
Foreign government	1,998		129		(14)		2,113
Corporate	15,483		716		(149)		16,050
Mortgage and other asset-backed	461		29		(4)		486
Total fixed maturities	$	19,942	$	1,196	$	(177)	$	20,961

The above table includes investments with a fair value of $2.7 billion at March 31, 2017 and December 31, 2016 supporting liabilities of the Company’s run-off settlement annuity business.  These investments had gross unrealized appreciation of $555 million and gross unrealized depreciation of $12 million at March 31, 2017, compared with gross unrealized appreciation of $539 million and gross unrealized depreciation of $15 million at December 31, 2016.

Review of declines in fair value.  Management reviews fixed maturities with a decline in fair value from cost for impairment based on criteria that include:

·length of time and severity of decline;

·financial health and specific near term prospects of the issuer;

·changes in the regulatory, economic or general market environment of the issuer’s industry or geographic region; and

·the Company’s intent to sell or the likelihood of a required sale prior to expected recovery.

The table below summarizes fixed maturities in an unrealized loss position at March 31, 2017 by the length of time these securities have been in an unrealized loss position.  These fixed maturities were primarily corporate securities with a decline in fair value that reflects an increase in market yields since purchase.

	March 31, 2017
	Fair		Amortized		Unrealized		Number
(Dollars in millions)	Value		Cost		Depreciation		of Issues
One year or less:
Investment grade	$	3,960	$	4,067	$	(107)	870
Below investment grade	$	619	$	630	$	(11)	532
More than one year:
Investment grade	$	265	$	276	$	(11)	47
Below investment grade	$	116	$	123	$	(7)	21

As of March 31, 2017, equity securities also included an investment of approximately $400 million in an exchange traded fund (“ETF”) with a gross unrealized loss of $4 million.  There were no other available for sale equity securities with a significant unrealized loss reflected in accumulated other comprehensive income at March 31, 2017.

29

Equity securities include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income.  As of March 31, 2017 and December 31, 2016, fair values of these securities were $36 million and amortized cost was $49 million.

Commercial Mortgage Loans

Mortgage loans held by the Company are made exclusively to commercial borrowers and are diversified by property type, location and borrower.  Loans are generally issued at a fixed rate of interest and are secured by high quality, primarily completed and substantially leased operating properties.

Credit quality.  The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the investment holding period.  Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review.  The Company evaluates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan.

Quality ratings are based on our evaluation of a number of key inputs related to the loan including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics.  However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios.  The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on the debt, with a ratio below 1.0 indicating that there is not enough cash flow to cover the required loan payments.  The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan.

The following tables summarize the credit risk profile of the Company’s commercial mortgage loan portfolio based on loan-to-value and debt service coverage ratios, as of March 31, 2017 and December 31, 2016:

	Debt Service Coverage Ratio
	1.30x or		1.20x to		1.10x to		1.00x to		Less than
Loan-to-Value Ratios	Greater		1.29x		1.19x		1.09x		1.00x			Total
(In millions)	March 31, 2017
Below 50%	$	331	$	15	$	-	$	-	$	-		$	346
50% to 59%	516		46		42		30		-			634
60% to 69%	687		14		-		-		-			701
70% to 79%	-		-		30		-		35			65
80% to 89%	-		-		-		-		-			-
90% to 100%	-		-		-		-		6			6
Total	$	1,534	$	75	$	72	$	30	$	41		$	1,752
(In millions)	December 31, 2016
Below 50%	$	335	$	15	$	-	$	-	$		-	$	350
50% to 59%	517		46		-		30		-			593
60% to 69%	624		14		-		-		-			638
70% to 79%	-		-		29		-		35			64
80% to 89%	-		-		-		-		-			-
90% to 100%	-		-		-		-		21			21
Total	$	1,476	$	75	$	29	$	30	$		56	$	1,666

30

The Company’s annual in-depth review of its commercial mortgage loan investments is the primary mechanism for identifying emerging risks in the portfolio.  The most recent review was completed by the Company’s investment professionals in the second quarter of 2016 and included an analysis of each underlying property’s most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors.  Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value and categorizes the investments as loans in good standing, potential problem loans or problem loans.  The results of the 2016 review showed improvement from the prior review in each of the key metrics and confirmed the overall strength of the portfolio.  The Company will reevaluate a loan’s credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been impacted.  The portfolio’s average loan-to-value ratio remained at 57% at March 31, 2017 and the portfolio’s average debt service coverage ratio remained at 1.95 at March 31, 2017 compared with December 31, 2016.

Potential problem mortgage loans are considered current (no payment is more than 59 days past due), but they exhibit certain characteristics that increase the likelihood of future default.  The characteristics management considers include, but are not limited to, the deterioration of debt service coverage below 1.0, estimated loan-to-value ratios increasing to 100% or more, downgrade in quality rating and requests from the borrower for restructuring.  In addition, loans are considered potential problems if principal or interest payments are past due by more than 30 but less than 60 days.  Problem mortgage loans are either in default by 60 days or more or have been restructured as to terms that could include concessions on interest rate, principal payment or maturity date.  The Company monitors each problem and potential problem mortgage loan on an ongoing basis, and updates the loan categorization and quality rating when warranted.

Problem and potential problem mortgage loans, net of valuation reserves, totaled $6 million at March 31, 2017 and $21 million at December 31, 2016.

Impaired commercial mortgage loans.  A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due according to the terms of the original loan agreement.  These loans are included in either problem or potential problem loans.  The Company monitors credit risk and assesses the impairment of loans individually and on a consistent basis for all loans in the portfolio.  Impaired loans are carried at the lower of unpaid principal balance or the fair value of the underlying real estate.  Certain commercial mortgage loans without valuation reserves are considered impaired because the Company will not collect all interest due according to the terms of the original agreements; however, the Company expects to recover the unpaid principal because it is less than the fair value of the underlying real estate.  The Company recognizes interest income on impaired mortgage loans only when payment is actually received.

The carrying value of the Company’s impaired commercial mortgage loans and related valuation reserves were as follows:

	March 31, 2017						December 31, 2016
(In millions)	Gross		Reserves		Net		Gross		Reserves		Net
Impaired commercial mortgage loans with valuation reserves	$	9	$	(3)	$	6	$	26	$	(5)	$	21
Impaired commercial mortgage loans without valuation reserves	-		-		-		-		-		-
Total impaired commercial mortgage loans	$	9	$	(3)	$	6	$	26	$	(5)	$	21

For the three months ended March 31, 2017, the average recorded investment in impaired loans decreased to $18 million in 2017 compared with $112 million for the three months ended March 31, 2016, primarily due to the foreclosure of one impaired loan and the full payoff of another.

Changes in valuation reserves for commercial mortgage loans were not material for the three months ended March 31, 2017 and 2016.

31

Short-Term Investments and Cash Equivalents

Short-term investments and cash equivalents included corporate securities of $2.4 billion, federal government securities of $597 million and money market funds of $17 million as of March 31, 2017.  The Company’s short-term investments and cash equivalents as of December 31, 2016 included corporate securities of $2.2 billion, federal government securities of $378 million and money market funds of $11 million.

B.Realized Investment Gains and Losses

The following realized gains and (losses) on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

	Three Months Ended
	March 31,
(In millions)	2017		2016
Fixed maturities	$	2	$	(18)
Equity securities	33		(10)
Other investments, including derivatives	11		(4)
Realized investment gains (losses) before income taxes	46		(32)
Less income taxes (benefits)	15		(11)
Net realized investment gains (losses)	$	31	$	(21)

Included in these realized investment gains (losses) were pre-tax asset write-downs as follows:

	Three Months Ended
	March 31,
(In millions)	2017			2016
Other-than-temporary impairments on debt securities:
Credit-related	$	(5)		$	(18)
Non credit-related (1)	(2)			(9)
Total other-than-temporary impairments on debt securities	(7)			(27)
Other asset write-downs (2)	(3)			(9)
Total write-downs	$		(10)	$	(36)

(1) These write-downs pertain to other-than-temporary declines in fair values due to increases in market yields (widening of credit spreads) for certain below investment grade fixed maturities with an increased probability of sales activity prior to recovery of their amortized cost basis.

(2) Other asset write-downs include other-than-temporary declines in fair values of equity securities and asset write-downs related to real estate investments.

The following table presents sales information for available-for-sale fixed maturities and equity securities.  Gross gains on sales and gross losses on sales exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

	Three Months Ended
	March 31,
(In millions)	2017		2016
Proceeds from sales	$	414	$	361
Gross gains on sales	$	47	$	12
Gross losses on sales	$	2	$	5

32

Note 11 — Derivative Financial Instruments

The Company uses derivative financial instruments to manage the characteristics of investment assets (such as duration, yield, currency and liquidity) to meet the varying demands of the related insurance and contractholder liabilities (such as paying claims, investment returns and withdrawals) and to hedge interest rate risk of its long-term debt.  The Company has written and purchased GMIB reinsurance contracts in its run-off reinsurance business that are accounted for as freestanding derivatives and discussed in Note 8.  Derivatives in the Company’s separate accounts are excluded from the following discussion because associated gains and losses generally accrue directly to separate account policyholders.

Accounting policy.  The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges.  Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various quantitative methods appropriate for each hedge, including regression analysis and dollar offset.  Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in shareholders’ net income.  Changes in the fair value of a derivative instrument may not always equal changes in the fair value of the hedged item.  This is referred to as ‘‘hedge ineffectiveness’’ and is generally recorded in realized investment gains and losses.  In the event of an early hedge termination, the changes in fair value of derivatives that qualified for hedge accounting are reported in shareholders’ net income, generally as a part of realized investment gains and losses.  See Note 9 for further information on our policies for determining fair value.  Derivative cash flows are generally reported in operating activities.

The following tables provide information on the Company’s specific applications of derivative financial instruments during the periods ended March 31, 2017 and December 31, 2016.

Fair Value Hedge of Long-Term Corporate Debt	Notional Value (in millions)
Type of instrument.  Interest rate swap contracts	March 31, 2017		December 31, 2016
	$	750	$	750
Purpose.  To convert a portion of the interest rate exposure on the Company’s long-term debt from fixed to variable rates.  This more closely aligns the Company’s interest expense with the interest income received on its cash equivalent and short-term investment balances.  The variable rates are benchmarked to LIBOR.
Terms of derivative instruments.  The Company provides upfront margin and settles fair value changes and net interest between variable and fixed rates daily with a central clearinghouse.
Accounting.  Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities.  The critical terms of these swaps match those of the long-term debt being hedged.  As a result, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by LIBOR.  The effects of those adjustments on other operating expenses are offset by the effects of corresponding changes in the swaps’ fair value.  The net impact from the hedge reported in other operating expenses reflects interest expense on the hedged debt at the variable interest rate.

33

Cash Flow Hedges of Fixed Maturity Bonds	Notional Value (in millions)
Type of instrument.  Foreign currency swap contracts	March 31, 2017		December 31, 2016
	$	31	$	55
Purpose.  To hedge the foreign currency cash flows of its fixed maturity bonds to match associated insurance liabilities.
Terms of derivative instruments.  The Company periodically exchanges cash flows between two currencies for both principal and interest.  Foreign currency swaps are Canadian dollars and Japanese yen and have terms for periods of up to four years.
Accounting.  Using cash flow hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities.  Changes in fair values are reported in accumulated other comprehensive income and amortized into net investment income or other realized investment gains and losses as interest or principal payments are received.

Fair Value Hedges of Fixed Maturity Bonds	Notional Value (in millions)
Type of instrument.  Foreign currency swap contracts	March 31, 2017		December 31, 2016
	$	87	$	78
Purpose.  To hedge the foreign exchange related changes in fair values of the Company’s fixed maturity bonds.
Terms of derivative instruments.  The Company periodically exchanges cash flows between two currencies for both principal and interest.  Foreign currency swaps are Euros and British pounds and have terms for periods of up to nine years.
Accounting.  Using fair value hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities.  Changes in fair values of the swap contracts, as well as changes in the fair values of the hedged bonds attributable to the hedged risk are reported in other realized investment gains and losses.

Economic Hedges of a Fixed Maturity Bond Portfolio	Notional Value (in millions)
Type of instrument.  Foreign currency forward contracts	March 31, 2017		December 31, 2016
	$	150	$	149
Purpose.  To hedge the foreign exchange related changes in fair values of a U.S. dollar-denominated fixed maturity bond portfolio to reflect the local currency for one of the Company’s foreign subsidiaries.
Terms of derivative instruments.  The Company agrees to purchase South Korean won in exchange for U.S. dollars at a future date, generally within three months from the contracts’ trade dates.
Accounting.  As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses.

34

As of March 31, 2017 and December 31, 2016, and for the three months ended March 31, 2017 and 2016, the effects of these derivative instruments on the Consolidated Financial Statements, including the amounts of gains or losses reclassified from accumulated other comprehensive income into shareholders’ net income, were not material.  No material amounts were excluded from the assessment of hedge effectiveness and no significant gains or losses were recognized due to hedge ineffectiveness.

Collateral and termination features.  The Company routinely monitors exposure to credit risk associated with derivatives and diversifies the portfolio among approved dealers of high credit quality to minimize this risk.  As of March 31, 2017, the Company had $13 million in cash on deposit representing the upfront margin required for the Company’s centrally-cleared derivative instruments.  Certain of the Company’s over-the-counter derivative instruments contain provisions requiring either the Company or the counterparty to post collateral or demand immediate payment depending on the amount of the net liability position and predefined financial strength or credit rating thresholds.  Collateral posting requirements vary by counterparty.  The net asset or liability positions of these derivatives were not material as of March 31, 2017 or December 31, 2016.

Note 12 — Variable Interest Entities

When the Company becomes involved with a variable interest entity, as well as when there is a change in the Company’s involvement with an entity, the Company evaluates the following to determine if it is the primary beneficiary and must consolidate the entity:

· the structure and purpose of the entity;

· the risks and rewards created by and shared through the entity; and

· the Company’s ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers.

The Company owns interests in security and real estate limited partnerships defined as variable interest entities that invest in the equity or mezzanine debt of privately held companies and real estate properties.  General partners unaffiliated with the Company control decisions that most significantly impact the partnership’s operations and the limited partners do not have substantive kick-out or participating rights.  The Company’s maximum exposure to these entities of $2.2 billion across approximately 100 limited partnerships as of March 31, 2017 includes $1.1 billion reported in other long-term investments and commitments to contribute an additional $1.1 billion.  The Company’s non-controlling interest in each of these limited partnerships is generally less than 10% of the partnership ownership interests.

In the normal course of its investing activities, the Company also makes passive investments in certain asset-backed and corporate securities that are issued by variable interest entities whose sponsors or issuers are unaffiliated with the Company.  The Company receives fixed-rate cash flows from these investments and the maximum potential exposure to loss is limited to the carrying amount of $0.5 billion as of March 31, 2017, that is reported in fixed maturities.  The Company’s combined ownership interests are insignificant relative to the total principal amounts issued by these entities.

The Company is also involved in real estate joint ventures with carrying values of $0.2 billion where all decisions significantly affecting the entities’ economic performance are subject to unanimous approval by the equity holders.  As a result, the Company determined that the power over these entities is shared equally, and there is no primary beneficiary.  The Company’s maximum exposure to loss was approximately equal to its carrying value that is reported in other long-term investments.

To provide certain services to its Medicare Advantage customers, the Company contracts with independent physician associations (“IPAs”) that are variable interest entities.  Physicians provide health care services to Medicare Advantage customers and the Company provides medical management and administrative services to the IPAs.  The Company’s maximum exposure to loss related to the IPA arrangements is limited to their liability for incurred but not reported medical costs for the Company’s Medicare Advantage customers.  These liabilities are not material and are generally secured by deposits maintained by the IPAs.

The Company is not the primary beneficiary of any of the variable interest entities described above and does not consolidate these entities because either:

·it has no power to direct the activities that most significantly impact the entities’ economic performance; or

·it has neither the right to receive benefits nor the obligation to absorb losses that could be significant to these variable interest entities.

The Company has not provided, and does not intend to provide, financial support to these entities that it is not contractually required to provide.  The Company performs ongoing qualitative analyses of its involvement with these variable interest entities to determine if consolidation is required.

35

Note 13 — Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) excludes amounts required to adjust future policy benefits for the run-off settlement annuity business and a portion of deferred acquisition costs associated with the corporate owned life insurance business.  Changes in the components of accumulated other comprehensive income (loss) were as follows:

			Tax
			(Expense)		After-
(In millions)	Pre-Tax		Benefit		Tax
Three Months Ended March 31,
2017
Net unrealized appreciation, securities, January 1,	$	542	$	(180)	$	362
Unrealized appreciation on securities arising during the period	53		(24)		29
Reclassification adjustment for (gains) included in shareholders’ net income (realized investment gains)	(35)		13		(22)
Net unrealized appreciation, securities arising during the period	18		(11)		7
Net unrealized appreciation, securities, March 31,	$	560	$	(191)	$	369
Net unrealized appreciation, derivatives, January 1,	$	4	$	(1)	$	3
Reclassification adjustment for (gains) included in shareholders’ net income (net realized investment gains)	(4)		1		(3)
Net unrealized appreciation, derivatives, March 31,	$	-	$	-	$	-
Net translation of foreign currencies, January 1,	$	(390)	$	21	$	(369)
Net translation of foreign currencies arising during the period		111		1		112
Net translation of foreign currencies, March 31,	$	(279)	$	22	$	(257)
Postretirement benefits liability adjustment, January 1,	$	(2,120)	$	742	$	(1,378)
Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses)		15		(5)		10
Reclassification adjustment for settlement loss (other operating expenses)		6		(2)		4
Net postretirement benefits liability adjustment arising during the period		21		(7)		14
Postretirement benefits liability adjustment, March 31,	$	(2,099)	$	735	$	(1,364)
2016
Net unrealized appreciation, securities, January 1,	$	612	$	(194)	$	418
Unrealized appreciation on securities arising during the period		227		(72)		155
Reclassification adjustment for losses included in shareholders’ net income (realized investment gains)	28		(10)			18
Net unrealized appreciation, securities arising during the period	255		(82)			173
Net unrealized appreciation, securities, March 31,	$	867	$	(276)	$	591
Net unrealized appreciation, derivatives, January 1,	$	10	$	(3)	$	7
Unrealized (depreciation), derivatives arising during the period		(4)		1		(3)
Net unrealized appreciation, derivatives, March 31,	$	6	$	(2)	$	4
Net translation of foreign currencies, January 1,	$	(295)	$	21	$	(274)
Net translation of foreign currencies arising during the period		83		(2)		81
Net translation of foreign currencies, March 31,	$	(212)	$	19	$	(193)
Postretirement benefits liability adjustment, January 1,	$	(2,155)	$	754	$	(1,401)
Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses)		16		(5)		11
Postretirement benefits liability adjustment, March 31,	$	(2,139)	$	749	$	(1,390)

36

Note 14 — Pension and Other Postretirement Benefit Plans

The Company and certain of its subsidiaries provide pension, health care and life insurance defined benefits to eligible retired employees, spouses and other eligible dependents through various domestic and foreign plans.  The effect of its foreign pension and other postretirement benefit plans is immaterial to the Company’s results of operations, liquidity and financial position.  The Company froze its defined benefit postretirement medical plan in 2013 and its primary domestic pension plans in 2009.

As further discussed in Note 16, the Company and the Cigna Pension Plan are defendants in a class action lawsuit that has yet to be resolved.  When the parties agree on a final plan amendment, the pension benefit obligation will be updated to reflect additional benefits resulting from this litigation.

For the three months ended March 31, 2017, the Company’s unrecognized actuarial losses and prior service costs (reported in accumulated other comprehensive income) decreased by $21 million pre-tax in the aggregate ($14 million after-tax) resulting in an increase in shareholders’ equity.  This change was primarily the result of amortization.

Pension and Other Postretirement Benefits.  Components of net pension and net other postretirement benefit costs were as follows:

	Pension Benefits				Other Postretirement Benefits
	Three Months Ended March 31,				Three Months Ended March 31,
(In millions)	2017		2016		2017		2016
Interest cost	$	48	$	50	$	3	$	3
Expected long-term return on plan assets	(65)		(62)		-		-
Amortization of:
Net loss from past experience	16		17		-		-
Prior service cost	-		-		(1)		(1)
Settlement loss	6		-		-		-
Net cost	$	5	$	5	$	2	$	2

The Company funds its domestic qualified pension plans at least at the minimum amount required by the Pension Protection Act of 2006.  During the three months ended March 31, 2017, the Company made a voluntary pension contribution of $150 million.  No additional contributions are required for the remainder of 2017.

Note 15 — Income Taxes

A.  Income Tax Expense

The consolidated effective tax rate decreased to 33.4% for the three months ended March 31, 2017 compared with 37.2% for the three months ended 2016 due to the moratorium in 2017 on the health insurance industry tax that is not deductible for federal income tax purposes.

The Company maintains a capital management strategy to retain overseas a significant portion of the earnings from its foreign operations.  As of March 31, 2017, undistributed earnings were approximately $2.7 billion. These undistributed earnings are deployed outside of the U.S. predominantly in support of the liquidity and regulatory capital requirements of our foreign operations.  The Company does not intend to repatriate these earnings to the U.S. and as a result, income taxes are provided using the respective foreign jurisdictions’ tax rate.  If the Company had intended to repatriate these foreign earnings to the U.S., the Company’s Consolidated Balance Sheets would have included an additional $362 million of deferred tax liabilities as of March 31, 2017.

B.  Unrecognized Tax Benefits

Changes in unrecognized tax benefits were immaterial for the three months ended March 31, 2017.

37

Note 16 — Contingencies and Other Matters

The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business.

A. Financial Guarantees: Retiree and Life Insurance Benefits

Separate account assets are contractholder funds maintained in accounts with specific investment objectives.  The Company records separate account liabilities equal to separate account assets.  In certain cases, the Company guarantees a minimum level of benefits for retirement and insurance contracts written in separate accounts.  The Company establishes an additional liability if management believes that the Company will be required to make a payment under these guarantees.

The Company guarantees that separate account assets will be sufficient to pay certain life insurance or retiree benefits.  The sponsoring employers are primarily responsible for ensuring that assets are sufficient to pay these benefits and are required to maintain assets that exceed a certain percentage of benefit obligations.  This percentage varies depending on the asset class within a sponsoring employer’s portfolio (for example, a bond fund would require a lower percentage than a riskier equity fund) and thus will vary as the composition of the portfolio changes.  If employers do not maintain the required levels of separate account assets, the Company or an affiliate of the buyer of the retirement benefits business (Prudential Retirement Insurance and Annuity Company) has the right to redirect the management of the related assets to provide for benefit payments.  As of March 31, 2017, employers maintained assets that exceeded the benefit obligations.  Benefit obligations under these arrangements were $488 million as of March 31, 2017 and approximately 13% of these are reinsured by an affiliate of the buyer of the retirement benefits business.  The remaining guarantees are provided by the Company with minimal reinsurance from third parties.  There were no additional liabilities required for these guarantees as of March 31, 2017.  Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy.  See Note 9 for further information on the fair value hierarchy.

The Company does not expect that these financial guarantees will have a material effect on the Company’s consolidated results of operations, liquidity or financial condition.

B. GMIB Contracts

See Note 8 for discussion.

C. Certain Other Guarantees

The Company had financial guarantees and indemnification obligations to lenders of approximately $153 million as of March 31, 2017, related to borrowings by certain real estate joint ventures that the Company either records as an investment or consolidates.  These borrowings, that are both recourse and nonrecourse to the Company, are secured by the joint ventures’ real estate properties with fair values in excess of the loan amounts and mature at various dates beginning in 2018 through 2021.  The Company’s indemnification obligations would require payment to lenders for any actual damages resulting from certain acts such as unauthorized ownership transfers, misappropriation of rental payments by others or environmental damages.  Based on initial and ongoing reviews of property management and operations, the Company does not expect that payments will be required under these financial guarantees or indemnification obligations.  Any payments that might be required could be recovered through a refinancing or sale of the assets.  In some cases, the Company also has recourse to partners for their proportionate share of amounts paid.  There were no liabilities required for these financial guarantees and indemnification obligations as of March 31, 2017.

As of March 31, 2017, the Company guaranteed that it would compensate the lessors for a shortfall of up to $32 million in the market value of certain leased equipment at the end of its leases.  Guarantees of $25 million expire in 2022 and $7 million expire in 2026.  The Company had liabilities for these guarantees of $3 million as of March 31, 2017.

The Company does not expect that these guarantees will have a material adverse effect on the Company’s consolidated results of operations, financial condition or liquidity.

38

The Company had indemnification obligations as of March 31, 2017 in connection with acquisition and disposition transactions.  These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, the filing of tax returns, compliance with law or the identification of outstanding litigation.  These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation.  In some cases, the maximum potential amount due is subject to contractual limitations based on a percentage of the transaction purchase price, while in other cases limitations are not specified or applicable.  The Company does not believe that it is possible to determine the maximum potential amount due under these obligations, because not all amounts due under these indemnification obligations are subject to limitation.  There were no liabilities required for these indemnification obligations as of March 31, 2017.

D. Guaranty Fund Assessments

The Company operates in a regulatory environment that may require its participation in assessments under state insurance guaranty association laws.  The Company’s exposure to assessments for certain obligations of insolvent insurance companies to policyholders and claimants is based on its share of business written in the relevant jurisdictions.

On March 1, 2017, the Commonwealth Court of Pennsylvania entered an order of liquidation of Penn Treaty Network America Insurance Company, together with its subsidiary American Network Insurance Company (collectively “Penn Treaty”, a long-term care insurance carrier), triggering guaranty fund coverage and accrual of a liability.  For the three months ended March 31, 2017, the Company recorded in operating expenses $129 million pre-tax ($83 million after-tax), representing its estimate of future assessments on a discounted basis.  Amounts recorded by segment were:  Global Health Care, $106 million pre-tax ($68 million after-tax) and Group Disability and Life, $23 million pre-tax ($15 million after-tax).  These estimates include small reductions for premium tax refunds for insurance contracts currently written.  This assessment is expected to be updated in future periods for changes in the estimate of the insolvency.  In addition, a portion of this assessment is expected to be offset in the future by premium tax credits that will be recognized in the period received.

E. Legal and Regulatory Matters

The Company is routinely involved in numerous claims, lawsuits, regulatory audits, investigations and other legal matters arising, for the most part, in the ordinary course of managing a global health services business.  These actions may include benefit disputes, breach of contract claims, tort claims, provider disputes, disputes regarding reinsurance arrangements, employment and employment discrimination-related suits, employee benefit claims, wage and hour claims, privacy, claims arising from consumer protection laws, intellectual property claims and real estate-related disputes.  There are currently, and may be in the future, attempts to bring class action lawsuits against the industry.  The Company also is regularly engaged in Internal Revenue Service (“IRS”) audits and may be subject to examinations by various state and foreign taxing authorities.  Disputed income tax matters arising from these examinations, including those resulting in litigation, are accounted for under GAAP guidance for uncertain tax positions.  Further information on income tax matters can be found in Note 15.

The business of administering and insuring health services programs, particularly health care and group insurance programs, is heavily regulated by federal and state laws and administrative agencies, such as state departments of insurance and the U.S. Departments of Health and Human Services, Treasury, Labor and Justice, as well as the courts.  Health care regulation and legislation in its various forms, including the Health Care Reform Act, other regulatory reform initiatives, such as those relating to Medicare programs, or additional changes in existing laws or regulations or their interpretations, could have a material adverse effect on the Company’s business, results of operations and financial condition.

In addition, there is heightened review by federal and state regulators of the health care, disability and life insurance industry business and related reporting practices.  Cigna is frequently the subject of regulatory market conduct reviews and other examinations of its business and reporting practices, audits and investigations by state insurance and health and welfare departments, state attorneys general, the Centers for Medicare and Medicaid Services (“CMS”) and the Office of Inspector General (“OIG”).  With respect to Cigna’s Medicare Advantage business, CMS and OIG perform audits to determine a health plan’s compliance with federal regulations and contractual obligations, including compliance with proper coding practices (sometimes referred to as Risk Adjustment Data Validation audits or RADV audits), that may result in retrospective adjustments to payments made to health plans.  Regulatory actions can result in assessments, civil or criminal fines or penalties or other sanctions, including loss of licensing or exclusion from participating in government programs.

39

In December 2016, the Company received a Civil Investigative Demand from the Civil Division of the U.S. Department of Justice relating to our Medicare Part C and D risk adjustment compliance activities and business processes, particularly as they relate to our review of medical records conducted as part of our data and payment accuracy compliance efforts.  We believe that this request for information is in connection with a broader review of Medicare Risk Adjustment generally that includes a number of Medicare Advantage plans, providers and vendors.  We intend to cooperate with and voluntarily respond to the information request.

As a global company, Cigna is also subject to the laws, regulations and rules of the foreign jurisdictions in which it conducts business.  Foreign laws and rules, and regulatory audit and investigation practices, may differ from or be more stringent than, similar requirements in the U.S.

Regulation, legislation and judicial decisions have resulted in changes to industry and the Company’s business practices, financial liability or other sanctions and will continue to do so in the future.

When the Company (in the course of its regular review of pending litigation and legal or regulatory matters) has determined that a material loss is reasonably possible, the matter is disclosed.  Such matters are described below.  In accordance with GAAP, when litigation and regulatory matters present loss contingencies that are both probable and estimable, the Company accrues the estimated loss by a charge to shareholders’ net income.  The amount accrued represents the Company’s best estimate of the probable loss at the time.  If only a range of estimated losses can be determined, the Company accrues an amount within the range that, in the Company’s judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, the Company accrues the minimum amount of the range.  In cases when the Company has accrued an estimated loss, the accrued amount may differ materially from the ultimate amount of the loss.  In many proceedings, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount or range of any loss.  The Company provides disclosure in the aggregate for material pending litigation and legal or regulatory matters, including accruals, range of loss, or a statement that such information cannot be estimated.  As a litigation or regulatory matter develops, the Company monitors the matter for further developments that could affect the amount previously accrued, if any, and updates such amount accrued or disclosures previously provided as appropriate.

The outcome of litigation and other legal or regulatory matters is always uncertain, and unfavorable outcomes that are not justified by the evidence or existing law can occur.  The Company believes that it has valid defenses to the matters pending against it and is defending itself vigorously.  Except as otherwise noted, the Company believes that the legal actions, regulatory matters, proceedings and investigations currently pending against it should not have a material adverse effect on the Company’s results of operations, financial condition or liquidity based upon our current knowledge and taking into consideration current accruals.  The Company had pre-tax reserves as of March 31, 2017 of approximately $190 million ($125 million after-tax) for the matters discussed below under “Litigation Matters.”  Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time.  In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company.  An adverse outcome in one or more of these matters could be material to the Company’s results of operations, financial condition or liquidity for any particular period.

Litigation Matters

Amara cash balance pension plan litigation.  In December 2001, Janice Amara filed a class action lawsuit in the U.S. District Court for the District of Connecticut against Cigna Corporation and the Cigna Pension Plan (the “Plan”) on behalf of herself and other similarly situated Plan participants affected by the 1998 conversion to a cash balance formula.  The plaintiffs allege various violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), including that the Plan’s cash balance formula discriminates against older employees; that the conversion resulted in a wear-away period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or inadequate disclosures about these conditions.

In 2008, the District Court (1) affirmed the Company’s right to convert to a cash balance plan prospectively beginning in 1998; (2) found for plaintiffs on the disclosure claim only; and (3) required the Company to pay pre-1998 benefits under the pre-conversion traditional annuity formula and post-1997 benefits under the post-conversion cash balance formula.  The Second Circuit upheld this decision.  From 2008 through the present, this case has undergone a series of court proceedings that resulted in the original District Court order being largely upheld.  In 2015, the Company submitted to the District Court its proposed method for calculating the additional pension benefits due to class members and plaintiffs responded in August 2015.

40

In January 2016, the District Court ordered the method of calculating the additional pension benefits due to class members.  The court order left several aspects of the calculation of additional plan benefits open to interpretation.  During 2016, the Company submitted its interpretation of the Court Order and the plaintiffs filed various objections.  On January 10, 2017, the District Court issued an additional ruling regarding certain aspects of the calculation of additional plan benefits.  The Company’s reserve for this litigation remains reasonable at March 31, 2017 based on calculations consistent with the Company’s interpretation of the updated guidance from the Court.  However, certain aspects of the ruling will need further clarification from the Court before final plan benefits can be determined.  As a result, the timing of the resolution of this matter remains uncertain.  Once resolved, the Plan will be amended to comply with the final interpretation of the District Court’s order and the benefits will begin to be paid.

Ingenix.  In April 2004, the Company was sued in a number of putative nationwide class actions alleging that the Company improperly underpaid claims for out-of-network providers through the use of data provided by Ingenix, Inc., a subsidiary of one of the Company’s competitors.  These actions were consolidated into Franco v. Connecticut General Life Insurance Company, et al., pending in the U.S. District Court for the District of New Jersey.  The consolidated amended complaint, filed in 2009 on behalf of subscribers, health care providers and various medical associations, asserted claims related to benefits and disclosure under ERISA, the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, the Sherman Antitrust Act and New Jersey state law and seeks recovery for alleged underpayments from 1998 through the present.  Other major health insurers have been the subject of, or have settled, similar litigation.

In September 2011, the District Court (1) dismissed all claims by the health care provider and medical association plaintiffs for lack of standing; and (2) dismissed the antitrust claims, the New Jersey state law claims and the ERISA disclosure claim.  In January 2013 and again in April 2014, the District Court denied separate motions by the plaintiffs to certify a nationwide class of subscriber plaintiffs.  The Third Circuit denied plaintiffs’ request for an immediate appeal of the January 2013 ruling.  As a result, the case is proceeding on behalf of the named plaintiffs only.  In June 2014, the District Court granted the Company’s motion for summary judgment to terminate all claims, and denied the plaintiffs’ partial motion for summary judgment.  In July 2014, the plaintiffs appealed all of the District Court’s decisions in favor of the Company, including the class certification decision, to the Third Circuit.  On May 2, 2016, the Third Circuit affirmed the District Court’s decisions denying class certification for the claims asserted by members, the granting of summary judgment on the individual plaintiffs’ claims, as well as the dismissal of the antitrust claims.  However, the Third Circuit also reversed the earlier dismissal of the providers’ ERISA claims.  The Company will continue to vigorously defend its position.

Regulatory Matters

CMS actions.  In January 2016, CMS issued a Notice of Imposition of Immediate Intermediate Sanctions (the “Notice”) to the Company.  The Notice required us to suspend certain enrollment and marketing activities for Medicare Advantage-Prescription Drug and Medicare Part D Plans.  The sanctions do not impact the right of current enrollees to remain covered by our Medicare Advantage-Prescription Drug or Medicare Part D Plans.

CMS imposed sanctions based on its findings of deficiencies with the Company’s operations of its Parts C and D appeals and grievances, Part D formulary and benefit administration and compliance program.  Management is working towards having these sanctions lifted in time to participate in the 2018 annual enrollment period.  For the three months ended March 31, 2017, Medicare enrollment and consolidated revenues were materially impacted due to our inability to participate in 2017 annual enrollment, and management expects that trend to continue for the remainder of 2017.  However, management anticipates that full-year 2017 shareholders’ net income will not be materially affected because we expect the margin impact of the revenue loss to be offset by 2017 remediation costs that are significantly lower than the $100 million after-tax amount reported in 2016 and other operational efficiencies to improve 2017 results.

On October 12, 2016, CMS announced Medicare Star Quality Ratings (“Star Ratings”) for 2017.  While Star Ratings are based on a number of plan performance measures that are evaluated each year, the projected Star Ratings for our plans included certain reductions that are primarily attributable to our CMS audit discussed above.  Under these revised Star Ratings, approximately 20% of our Medicare Advantage customers are expected to be in a 4 Stars or greater plan.  The Company does not believe that these Star Ratings reflect the quality offerings Cigna-HealthSpring provides to beneficiaries.

41

The Company filed a Reconsideration request with CMS, which was denied, and will work fully with CMS through their process as well as consider additional alternatives with the objective that the final Star Ratings more accurately reflect our performance under the Star Ratings measures.  The Company remains committed to our partnership with CMS and to delivering quality products and services to seniors, while working to mitigate the impact these Star Ratings could have on our offerings in 2018.  If we are unsuccessful in restoring at least some of the Star Ratings, modifying our product offerings or implementing operational efficiencies in the Government business, the effect in 2018 could be material to shareholders’ net income.  There is no financial impact in 2017 because these ratings apply to plans for the 2018 payment year.

Disability claims regulatory matter.  During the second quarter of 2013, the Company finalized an agreement with the Departments of Insurance for Maine, Massachusetts, Pennsylvania, Connecticut and California (together, the “monitoring states”) related to the Company’s long-term disability claims handling practices.  The agreement requires primarily: (1) enhanced procedures related to documentation and disposition and (2) a two-year monitoring period followed by a re-examination that began in the second quarter of 2016.  Management believes the Company has addressed the requirements of the agreement.  If the monitoring states find material non-compliance with the agreement upon re-examination, the Company may be subject to additional costs and penalties or requests to change its business practices that could negatively impact future earnings for this business.

Other Legal Matters

Antitrust Litigation.  On July 21, 2016, the DOJ and certain state attorneys general filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia (the “District Court”) seeking to block the merger and, on January 4, 2017, the parties concluded the District Court trial.  On February 8, 2017, the District Court issued an order enjoining the proposed merger.  Anthem filed a notice of appeal of the District Court’s order with the U.S. Court of Appeals for the District of Columbia Circuit (the “Appeals Court”) and requested an expedited appeal.  On February 17, 2017, the Appeals Court granted Anthem’s motion for an expedited appeal.  That same day, the Company filed its notice of appeal of the District Court’s order with the Appeals Court.  Oral arguments were heard on March 24, 2017.  On April 28, 2017, the Appeals Court affirmed the decision of the District Court. On May 5, 2017, Anthem filed a petition for a writ of certiorari with the United States Supreme Court seeking appeal of the U.S. Court of Appeals decision affirming the District Court’s order enjoining the merger.

Litigation with Anthem.  On February 14, 2017, the Company delivered a notice to Anthem terminating the merger agreement, and notifying Anthem that it must pay the Company the $1.85 billion reverse termination fee pursuant to the terms of the merger agreement.  Also on February 14, 2017, the Company filed suit against Anthem in the Delaware Court of Chancery (the “Chancery Court”).  The complaint sought declaratory judgments that the Company’s termination of the merger agreement was valid and that Anthem was not permitted to extend the termination date.  The complaint also sought payment of the reverse termination fee and additional damages in an amount exceeding $13 billion, which includes the lost premium value to the Company’s shareholders caused by Anthem’s willful breaches of the merger agreement.

Also on February 14, 2017, Anthem filed a lawsuit in the Chancery Court against the Company seeking (i) a temporary restraining order to enjoin Cigna from terminating and taking any action contrary to the terms of the merger agreement, (ii) specific performance compelling Cigna to comply with the merger agreement and (iii) damages.  On February 15, 2017, the Chancery Court granted Anthem’s motion for a temporary restraining order and issued an order temporarily enjoining the Company from terminating the merger agreement.  This is not a decision on the merits of the case, but rather an order to ensure irrevocable actions do not take place before the Chancery Court’s substantive review of the issues.  The Company will continue to abide by terms of the merger agreement until the expiration or lifting of the Chancery Court’s order and any further review of the case by the Chancery Court.  This order will be subject to review by the Chancery Court at a preliminary injunction hearing scheduled for May 8, 2017.

We believe in the merits of our claims and dispute Anthem’s claims, and we intend to vigorously defend ourselves and pursue our claims.  The outcomes of lawsuits are inherently unpredictable, and we may be unsuccessful in the ongoing litigation or any future claims or litigation.

42

Shareholder Litigation.  Following announcement of the Company’s merger agreement with Anthem as discussed in Note 3, putative class action complaints (collectively the “complaints” or “Cigna Merger Litigation”) were filed by purported Cigna shareholders on behalf of a purported class of Cigna shareholders.  Additional lawsuits arising out of or relating to the merger agreement or the merger may be filed in the future.

Cigna, members of the Cigna board of directors, Anthem and Anthem Merger Sub Corp (“Merger Sub”) have been named as defendants.  The plaintiffs generally assert that the members of the Cigna board of directors breached their fiduciary duties to the Cigna shareholders during merger negotiations and by entering into the merger agreement and approving the merger, and that Cigna, Anthem and Merger Sub aided and abetted such breaches of fiduciary duties.  The allegations include, among other things, that (1) the merger consideration undervalues Cigna, (2) the sales process leading up to the merger was flawed due to purported conflicts of interest of members of the Cigna board of directors and (3) certain provisions of the merger agreement inappropriately favor Anthem and inhibit competing bids.  Plaintiffs seek, among other things, injunctive relief enjoining the merger, rescission of the merger agreement to the extent already implemented, and costs and damages.

Effective November 24, 2015, solely to avoid the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, the Company, the Company’s directors, Anthem and Merger Sub entered into a Memorandum of Understanding (“MOU”) to settle the Cigna Merger Litigation.  Subject to approval by the Connecticut Superior Court, Judicial District of Hartford and further definitive documentation in a settlement agreement that will be subject to customary conditions, the MOU resolved the Cigna Merger Litigation and provided that the Company would make certain additional disclosures related to the merger.  If the Court approves the settlement, the Cigna Merger Litigation will be dismissed with prejudice and all claims that were or could have been brought in any actions challenging any aspect of the merger, the merger agreement and any related disclosures will be released.  In connection with the settlement, subject to the ultimate determination of the Court, plaintiffs’ counsel may receive an award of reasonable fees.  There can be no assurance that the parties will ultimately enter into a settlement agreement, or that the Court will approve the settlement even if the parties were to enter into such agreement.  The MOU may terminate, if, among other reasons, the Court does not approve the settlement or the merger is not consummated for any reason.

Note 17 — Segment Information

See Note 1 for a description of the Company’s reporting segments.

In the Company’s segment disclosures, we present “operating revenues,” defined as total revenues excluding realized investment results.  The Company excludes realized investment results from this measure because its portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment.  As a result, gains or losses created in this process may not be indicative of the past or future underlying performance of the business.

The Company uses “adjusted income (loss) from operations” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitability.  Adjusted income from operations is defined as shareholders’ net income (loss) excluding after-tax realized investment gains and losses, net amortization of other acquired intangible assets and special items.  Income or expense amounts are excluded from adjusted income from operations for the following reasons:

·Realized investment results are excluded because, as noted above, the Company’s portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment.

·Net amortization of other intangible assets is excluded because it relates to costs incurred for acquisitions and, as a result, it does not relate to the core performance of the Company’s business operations.

·Special items, if any, are excluded because management believes they are not representative of the underlying results of operations.  This is generally because the nature and size of these matters are not indicative of our ongoing business operations.  Further context about these items is provided in the footnotes listed in the table below.

	Three Months Ended March 31, 2017				Three Months Ended March 31, 2016
(In millions)	Before-tax impact		After-tax impact		Before-tax impact		After-tax impact
Long-term care guaranty fund assessment - see Note 16 (D)	$	129	$	83	$	-	$	-
Merger-related transaction costs - see Note 3	63		49		40		36
Total impact from special items	$	192	$	132	$	40	$	36

43

Summarized segment financial information was as follows:

(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
Three Months Ended March 31, 2017
Premiums, fees and other revenues and mail order pharmacy revenues	$	8,106	$	881	$	1,032	$	30	$	(13)	$	10,036
Net investment income	92		28		89		86		8		303
Operating revenues	$	8,198	$	909	$	1,121	$	116	$	(5)	$	10,339
Total revenues	$	8,224	$	922	$	1,129	$	115	$	(5)	$	10,385
Shareholders’ net income (loss)	$	544	$	77	$	59	$	20	$	(102)	$	598
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment (gains)	(16)		(9)		(6)		-		-		(31)
Amortization of other acquired intangible assets, net	14		6		-		-		-		20
Special Items:
Long-term care guaranty fund assessment	68		-		15		-		-		83
Merger-related transaction costs	-		-		-		-		49		49
Adjusted income (loss) from operations	$	610	$	74	$	68	$	20	$	(53)	$	719
Three Months Ended March 31, 2016
Premiums, fees and other revenues and mail order pharmacy revenues	$	7,812	$	780	$	1,029	$	27	$	(4)	$	9,644
Net investment income	72		26		80		90		4		272
Operating revenues	$	7,884	$	806	$	1,109	$	117	$	-	$	9,916
Total revenues	$	7,867	$	804	$	1,106	$	107	$	-	$	9,884
Shareholders’ net income (loss)	$	514	$	59	$	13	$	14	$	(81)	$	519
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment losses	12		1		2		6		-		21
Amortization of other acquired intangible assets, net	18		7		-		-		-		25
Special Item:
Merger-related transaction costs	-		-		-		-		36		36
Adjusted income (loss) from operations	$	544	$	67	$	15	$	20	$	(45)	$	601

The Company had net receivables from CMS of $0.5 billion as of March 31, 2017 and $0.6 billion as of December 31, 2016.  These amounts were included in the Consolidated Balance Sheets in premiums, accounts and notes receivable and reinsurance recoverables.  Premiums from CMS were 18% of consolidated revenues for the three months ended March 31, 2017 and 21% for the three months ended March 31, 2016.  These amounts were reported in the Global Health Care segment.

44

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

INDEX

Cautionary Statement	46
Executive Overview	47
Liquidity and Capital Resources	53
Critical Accounting Estimates	56
Segment Reporting	56
Global Health Care	57
Global Supplemental Benefits	58
Group Disability and Life	59
Other Operations	60
Corporate	61
Investment Assets	61
Market Risk	64

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information to assist you in better understanding and evaluating our financial condition as of March 31, 2017 compared with December 31, 2016 and our results of operations for the three months ended March 31, 2017 compared with the same period last year.  We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2016 (“2016 Form 10-K”), in particular the “Risk Factors” contained in Part I, Item 1A of that form.

Unless otherwise indicated, financial information in the MD&A is presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  See Note 2 to the Consolidated Financial Statements in our 2016 Form 10-K for additional information regarding our significant accounting policies.  The preparation of interim consolidated financial statements necessarily relies heavily on estimates.  This and certain other factors, such as the seasonal nature of portions of the health care and related benefits business, as well as competitive and other market conditions, call for caution in estimating full year results based on interim results of operations.  In some of our financial tables in this MD&A, we present percentage changes or “N/M” when those changes are so large as to become not meaningful.  Changes in percentages are expressed in basis points (“bps”).

In this MD&A, our consolidated measures “operating revenues” and “adjusted income from operations” are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures “total revenues” and “shareholders’ net income.”

We define operating revenues as total revenues excluding realized investment results.  We exclude realized investment results from this measure because our portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment.  As a result, gains or losses created in this process may not be indicative of the past or future underlying performance of the business.

We use adjusted income (loss) from operations as our principal financial measure of operating performance because management believes it best reflects the underlying results of our business operations and permits analysis of trends in underlying revenue, expenses and profitability.  We define adjusted income from operations as shareholders’ net income (loss) excluding after-tax realized investment gains and losses, net amortization of other acquired intangible assets and special items.  Income or expense amounts are excluded from adjusted income from operations for the following reasons:

·Realized investment results are excluded because, as noted above, our portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment.

·Net amortization of other intangible assets is excluded because it relates to costs incurred for acquisitions and, as a result, it does not relate to the core performance of our business operations.

45

·Special items, if any, are excluded because management believes they are not representative of the underlying results of operations.  See Note 17 to the Consolidated Financial Statements for descriptions of special items.

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are based on Cigna’s current expectations and projections about future trends, events and uncertainties.  These statements are not historical facts.    Forward-looking statements may include, among others, statements concerning future financial or operating performance, including our ability to deliver personalized and innovative solutions for our customers and clients and future growth, business strategy, strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; statements regarding the proposed merger between Cigna and Anthem, Inc. (“Anthem”) and the litigation related thereto; statements regarding the timing of resolution of the issues raised by the Centers for Medicare and Medicaid Services (“CMS”); and other statements regarding Cigna’s future beliefs, expectations, plans, intentions, financial condition or performance.  You may identify forward-looking statements by the use of words such as “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “may,” “should,” “will” or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.

Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements.  Such risks and uncertainties include, but are not limited to: our ability to achieve our financial, strategic and operational plans or initiatives; our ability to predict and manage medical costs and price effectively and develop and maintain good relationships with physicians, hospitals and other health care providers; the impact of modifications to our operations and processes, including those in our disability business; our ability to identify potential strategic acquisitions or transactions and realize the expected benefits of such transactions; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; the outcome of litigation, regulatory audits including the CMS review and sanctions, investigations, actions and/or guaranty fund assessments; uncertainties surrounding participation in government-sponsored programs such as Medicare; the effectiveness and security of our information technology and other business systems; unfavorable industry, economic or political conditions including foreign currency movements; acts of war, terrorism, natural disasters or pandemics; any ongoing litigation with respect to the ruling of the District Court enjoining the merger and the U.S. Court of Appeals’ decision affirming that ruling; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement of the ruling enjoining the merger; uncertainty as to litigation with respect to the termination of the merger agreement, the reverse termination fee, declaratory judgments with respect to the foregoing and/or contract and non-contract damages for claims filed against Anthem; the risk that a government entity or court of competent jurisdiction, in any litigation, arbitration or other forum, finds in any binding or non-binding decision that Cigna has not complied, in full or in part, with its obligations under the merger agreement or that Cigna is liable for any breach, willful or otherwise, of the merger agreement; uncertainty as to whether and, if so, when Anthem will pay the reverse termination fee; uncertainty as to litigation with respect to the suit initiated by Anthem against Cigna, including for damages with respect to the transactions contemplated in the merger agreement; competitive responses to the ruling; the inability to retain key personnel; the timing and likelihood of completion of the proposed merger, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals for the proposed merger that could reduce anticipated benefits or cause the parties to abandon the transaction; if the merger is completed, the possibility that the expected synergies and value creation from the proposed merger will not be realized or will not be realized within the expected time period; if the merger is completed, the risk that the businesses of Cigna and Anthem will not be integrated successfully; disruption from the proposed merger making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred; the possibility that the proposed merger does not close, including due to the failure to satisfy the closing conditions; the risk that financing for the proposed merger may not be available on favorable terms, as well as more specific risks and uncertainties discussed in Part I, Item 1A – Risk Factors and Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2016 Form 10-K and as described from time to time in our future reports filed with the Securities and Exchange Commission (“SEC”) as well as the risks and uncertainties described in Anthem’s most recent report on Form 10-K and subsequent reports filed with the SEC.

You should not place undue reliance on forward-looking statements that speak only as of the date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify.  Cigna undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.

46

EXECUTIVE OVERVIEW

Cigna Corporation, together with its subsidiaries (either individually or collectively referred to as “Cigna,” the “Company,” “we,” “our” or “us”)  is a global health services organization dedicated to a mission of helping individuals improve their health, well-being and sense of security.  To execute on our mission, Cigna’s strategy is to “Go Deep,” “Go Global” and “Go Individual” with a differentiated set of medical, dental, disability, life and accident insurance and related products and services offered by our subsidiaries.  In addition to our ongoing operations, we also have certain run-off operations.

For further information on our business and strategy, please see Item 1, “Business” in our 2016 Form 10-K.

Summarized below are key measures of our performance by segment for the three months ended March 31, 2017 and 2016:

Financial highlights by segment

	Three Months Ended March 31,
(Dollars in millions, except per share amounts)	2017		2016		% Change
Total revenues	$	10,385	$	9,884	5	%
Operating revenues (1)
Global Health Care	$	8,198	$	7,884	4	%
Global Supplemental Benefits	909		806		13
Group Disability and Life	1,121		1,109		1
Other Operations	116		117		(1)
Corporate	(5)		-		N/M
Consolidated operating revenues	$	10,339	$	9,916	4	%
Shareholders’ net income (1)	$	598	$	519	15	%
Adjusted income (loss) from operations (1)
Global Health Care	$	610	$	544	12	%
Global Supplemental Benefits	74		67		10
Group Disability and Life	68		15		N/M
Other Operations	20		20		-
Corporate	(53)		(45)		(18)
Total adjusted income from operations	$	719	$	601	20	%
Earnings per share (diluted):
Shareholders’ net income (1)	$	2.30	$	2.00	15	%
Adjusted income from operations (1)	$	2.77	$	2.32	19	%
	As of March 31,
	2017		2016
Global medical customers (in thousands)	15,734		15,129		4	%

(1) See page 48 for reconciliations of consolidated operating revenues to consolidated total revenues and adjusted income from operations to shareholders’ net income.

See Note 1 to the Consolidated Financial Statements for a description of our reporting segments.  For further analysis and explanation of individual segment results, see the “Segment Reporting” section of this MD&A beginning on page 56.

47

Consolidated results of operations (GAAP basis)

	Three Months Ended March 31,
(In millions)	2017		2016		% Change
Premiums	$	8,103	$	7,746	5	%
Fees and other revenues	1,223		1,201		2
Net investment income	303		272		11
Mail order pharmacy revenues	710		697		2
Consolidated operating revenues	10,339		9,916		4
Net realized investment gains (losses)	46		(32)		244
Total revenues	10,385		9,884		5
Global Health Care medical costs	4,985		4,761		5
Other benefit expenses	1,367		1,368		-
Mail order pharmacy costs	581		574		1
Operating expenses	2,530		2,321		9
Amortization of other acquired intangible assets, net	32		41		(22)
Total benefits and expenses	9,495		9,065		5
Income before income taxes	890		819		9
Income taxes	297		305		(3)
Net income	593		514		15
Less: net (loss) attributable to noncontrolling interests	(5)		(5)		-
Shareholders’ net income	$	598	$	519	15	%

Reconciliation of shareholders’ net income to adjusted income from operations

	Three Months Ended				Change
	March 31,				Favorable
(In millions)	2017		2016		(Unfavorable)
Shareholders’ net income	$	598	$	519	15	%
After-tax adjustments required to reconcile to adjusted income from operations:
Net realized investment (gains) losses	(31)		21
Amortization of other acquired intangible assets, net	20		25
Special items:
Long-term care guaranty fund assessment	83		-
Merger-related transaction costs	49		36
Total special items	132		36
Adjusted income from operations	$	719	$	601	20	%

Other key consolidated financial data

	Three Months Ended March 31,						Change Favorable
(In millions)	2017			2016			(Unfavorable)
Earnings per share (diluted):
Shareholders’ net income	$	2.30		$	2.00		15	%
After-tax adjustments required to reconcile to adjusted income from operations:
Net realized investment (gains) losses	(0.12)			0.08
Amortization of other acquired intangible assets, net	0.08			0.10
Special items:
Long-term care guaranty fund assessment	0.32			-
Merger-related transaction costs	0.19			0.14
Adjusted income from operations	$	2.77		$	2.32		19	%
Effective tax rate	33.4		%	37.2		%	380	bps

48

Earnings, Revenue and Medical Customer Commentary

Shareholders’ net income increased for the three months ended March 31, 2017 compared with the same period in 2016 primarily due to higher adjusted income from operations and realized investment results, partially offset by the impact of the long-term care guaranty fund assessment charge reported as a special item.

Adjusted income from operations increased for the three months ended March 31, 2017 compared with the same period in 2016 due to higher earnings in each of our ongoing reportable segments: Global Health Care, Global Supplemental Benefits and Group Disability and Life.  These increases were driven primarily by customer growth and increased contributions from specialty businesses in Global Health Care, as well as significantly improved disability claim experience in Group Disability and Life.

Revenues for the three months ended March 31, 2017 increased compared with 2016 primarily due to business growth in Global Health Care and Global Supplemental Benefits.  Components of the revenue increases were as follows:

· Premiums increased, primarily reflecting customer growth in all of our markets in the Commercial segment and in certain markets in Global Supplemental Benefits, primarily South Korea. Expected decreases in Government segment premiums due to Medicare disenrollment partially offset these increases. See the Health Care Industry Developments starting on page 51 for additional discussion of our Medicare business.

· Fees and other revenues. The increase was largely the result of growth in our specialty businesses and an increased customer base for our administrative services only business.

· Net investment income was higher, reflecting growth in average invested assets partially offset by lower yields.

· Mail order pharmacy revenues. The modest increase primarily reflects price increases and a change in the types of medications being prescribed.

· Realized investment results increased for the three months ended March 31, 2017 compared with the same period in 2016 due primarily to a gain on the sale of an alternative investment and lower impairment losses.

Global medical customers.  Our medical customer base increased as of March 31, 2017 compared with March 31, 2016, including growth across all of our Commercial market segments, partially offset by the expected disenrollment in our Medicare Advantage business.

Commentary on Other Components of Consolidated Results of Operations

· Global Health Care medical costs. The increase for the three months ended March 31, 2017 compared with the same period in 2016 was due primarily to customer growth and medical cost inflation, partially offset by favorable prior year reserve development.

· Other benefit expenses for the three months ended March 31, 2017 were flat compared with the same period in 2016 as improvements in our disability claims experience were offset by customer growth in Global Supplemental Benefits.

· Mail order pharmacy costs. The modest increase for the three months ended March 31, 2017 compared with the same period in 2016 primarily reflects price increases and a change in the types of medications being prescribed.

· Operating expenses. The increase for the three months ended March 31, 2017 compared with the same period in 2016 was primarily the result of increases in special items and additional volume-based expenses in Global Health Care. The absence of the health insurance industry tax in 2017 partially offset these increases. See the Health Care Industry Developments starting on page 51 for discussion of the health insurance industry tax.

49

· Special items. Special items charges were higher for the three months ended March 31, 2017 compared with the same period in 2016 primarily due to the long-term care guaranty fund assessment. See Note 17 to the Consolidated Financial Statements for additional details about special items.

· Effective tax rate. The decrease in our effective tax rate for the three months ended March 31, 2017 compared with the same period in 2016 was primarily due to the moratorium on the health insurance industry tax in 2017.

Proposed Merger with Anthem, Inc. (“Anthem”)

On July 23, 2015, we entered into a definitive agreement to merge with Anthem, subject to certain terms, conditions and customary operating covenants, with Anthem continuing as the surviving company.  At special shareholders’ meetings in December 2015, Cigna shareholders approved the merger with Anthem and Anthem shareholders voted to approve the issuance of shares of Anthem common stock according to the merger agreement.  Upon closing, our shareholders would receive $103.40 in cash and 0.5152 of a share of Anthem common stock for each common share of the Company.  The closing price of Anthem stock on May 4, 2017 was $179.89.

Consummation of the merger is subject to certain customary conditions, including the receipt of certain necessary governmental and regulatory approvals, and the absence of a legal restraint prohibiting the consummation of the merger.  On July 21, 2016, the U.S. Department of Justice (‘‘DOJ’’) and certain state attorneys general filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia (the ‘‘District Court’’) seeking to block the merger and, on January 4, 2017, the parties concluded the District Court trial.  On February 8, 2017, the District Court issued an order enjoining the proposed merger.  Anthem appealed this ruling to the U.S. Court of Appeals for the District of Columbia Circuit (the ‘‘Appeals Court’’).  Additionally, Cigna appealed the District Court ruling following the Chancery Court ruling described below.  Oral arguments were heard in the Appeals Court on March 24, 2017.  On April 28, 2017, the Appeals Court affirmed the decision of the District Court. On May 5, 2017, Anthem filed a petition for a writ of certiorari with the United States Supreme Court seeking appeal of the U.S. Court of Appeals decision affirming the District Court’s order enjoining the merger.

On February 14, 2017, Cigna delivered a notice to Anthem terminating the merger agreement and filed suit in the Delaware Court of Chancery (the ‘‘Chancery Court’’) seeking, among other things, declaratory judgment that Cigna’s termination of the merger agreement is lawful and that Anthem does not have the right to extend the merger agreement termination date.  Later that day, Anthem filed a lawsuit in the Chancery Court against us seeking, among other things, a temporary restraining order to enjoin Cigna from terminating the merger agreement, specific performance and damages, and, on February 15, 2017, the Chancery Court issued an order temporarily enjoining us from terminating the merger agreement.  This order will be subject to further review at a preliminary injunction hearing currently scheduled for May 8, 2017.

See Note 3 to the Consolidated Financial Statements for additional details.  In addition, see Item 1A. – Risk Factors in our 2016 Form 10-K for risks to our business due to the proposed merger.

50

Health Care Industry Developments and Other Matters Affecting Our Global Health Care Segment

Our 2016 Form 10-K provides a detailed description of The Patient Protection and Affordable Care Act (“the Health Care Reform Act” or “ACA”) provisions and other legislative initiatives that impact our health care business, including regulations issued by the Centers for Medicare and Medicaid Services (“CMS”) and the Departments of the Treasury and Health and Human Services (“HHS”).  The table presented below provides an update of the impact of these items and other matters affecting our Global Health Care segment as of March 31, 2017.

Item	Description
Medicare Advantage (“MA”)	CMS sanctions:  As further discussed in Note 16(E) to the Consolidated Financial Statements,  in January 2016, CMS imposed sanctions that required us to suspend certain enrollment and marketing activities on our Medicare Advantage-Prescription Drug and Medicare Part D Plans. We are working towards having these sanctions lifted in time to participate in the 2018 annual enrollment period. For the three months ended March 31, 2017, Medicare enrollment and consolidated revenues were materially impacted due to our inability to participate in 2017 annual enrollment, and management expects that trend to continue for the remainder of 2017.  However, management anticipates that full-year 2017 shareholders’ net income will not be materially affected because we expect the margin impact of the revenue loss to be offset by 2017 remediation costs that are significantly lower than the $100 million after-tax amount reported in 2016 and other operational efficiencies to improve 2017 results. The impact of disenrollment was not material to 2016 consolidated revenues and earnings. Medicare Star Quality Ratings (“Star Ratings”): During 2016, CMS took actions related to our Star Ratings scheduled to take effect in 2018. These actions are discussed further in Note 16(E) to the Consolidated Financial Statements. We are working to mitigate the impact these Star Ratings could have on our offerings in 2018.  If we are unsuccessful in restoring at least some of the Star Ratings, modifying our product offerings or implementing operational efficiencies in the Government business, the effect could be material to shareholders’ net income in 2018. There is no financial impact in 2017 because these ratings apply to plans for the 2018 payment year. 2018 MA Rates: Final MA reimbursement rates for 2018 were published by CMS in April 2017.  We do not expect the new rates to have a material impact on our consolidated results of operations in 2018.
Health Care Reform Act Taxes and Fees Industry Tax	Health Insurance Industry Tax:  From 2014-2016, this non-deductible tax was levied based on a ratio of an insurer’s net health insurance premiums written for the previous calendar year compared to the U.S. health insurance industry total.  In December 2015, federal appropriations legislation imposed a one-year moratorium on the industry tax for 2017, with reinstatement expected in 2018 under the currently enacted legislation.  The amount of the tax was approximately $310 million in 2016, and we recognized approximately $80 million in operating expenses for the three months ended March 31, 2016.  Because this tax is not deductible for federal income tax purposes, it negatively impacted our effective tax rate in 2016. Our pricing actions in 2017 reflected the moratorium on the industry tax, whereas in 2016 we included this tax in our premium rates (primarily for Commercial business).  Given the current health care legislative proposals being discussed by the federal government, the future of this industry tax remains uncertain beyond 2017.
Reinsurance Fee	Reinsurance Fee:  This fee was applicable only for 2014-2016.  For our insured business, the amount of the fee was approximately $45 million in 2016, and we recognized approximately $10 million for the three months ended March 31, 2016.

51

Item	Description
Public Health Exchanges	Public Health Exchanges:  For 2017, we offer individual coverage on seven public health insurance exchanges in the following states: Colorado, Illinois, Maryland, Missouri, North Carolina, Tennessee and Virginia.

Risk Mitigation Programs

See Note 2(K) to the Consolidated Financial Statements in our 2016 Form 10-K for a description of these programs that commenced in 2014 and our related accounting policy.  The risk corridor and reinsurance programs ended as of December 31, 2016.

The following table presents the after-tax impact to shareholders’ net income of these programs for the three months ended March 31, 2017 and 2016 and our net receivable balances as of March 31, 2017 and December 31, 2016.

	Net Receivable (Payable) Balance (2)						After-tax Impact on Shareholders’ Net Income
							Three Months Ended
	March 31,			December 31,			March 31,
(In millions)	2017			2016			2017			2016
Risk Corridor (1)
Risk corridor (gross)	$	124		$	124		$	-		$	(4)
Risk corridor allowance	(124		)	(124		)	-			-
Net risk corridor	-			-			-			(4)
Reinsurance	39			63			(4		)	2
Risk Adjustment	(31		)	1			(18		)	(3)
Total	$	8		$	64		$	(22	)	$	(5)

(1) See discussion below of the risk corridor balance.

(2) For the reinsurance program, receivables are reported in reinsurance recoverables.  Receivables, net of allowances, for the risk adjustment and risk corridor programs are reported in premiums, accounts and notes receivable.  Payables for the risk adjustment program of $112 million as of March 31, 2017 and $51 million as of December 31, 2016 are netted in the balance presented above, but are reported in accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets.

See the MD&A in our 2016 Form 10-K for discussion of our decision to record an allowance for the balance of our risk corridor receivable.  As of March 31, 2017, we continue to carry an allowance on our risk corridor receivable based on the current status of court decisions.  However, we continue to believe that the government has a binding obligation to satisfy the risk corridor receivable.

52

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

We maintain liquidity at two levels:  the subsidiary level and the parent company level.

Liquidity requirements at the subsidiary level generally consist of:

·medical costs and benefit payments to policyholders; and

·operating expense requirements, primarily for employee compensation and benefits, information technology and facilities costs; and

·income taxes.

Our subsidiaries normally meet their operating requirements by:

·maintaining appropriate levels of cash, cash equivalents and short-term investments;

·using cash flows from operating activities;

·selling investments;

·matching investment durations to those estimated for the related insurance and contractholder liabilities; and

·borrowing from affiliates, subject to applicable regulatory limits.

Liquidity requirements at the parent company level generally consist of:

·debt service and dividend payments to shareholders;

·pension plan funding; and

·repurchases of common stock.

The parent company normally meets its liquidity requirements by:

·maintaining appropriate levels of cash and various types of marketable investments;

·collecting dividends from its subsidiaries;

·using proceeds from issuance of debt and equity securities; and

·borrowing from its subsidiaries.

Cash flows for the three months ended March 31, were as follows:

(In millions)	2017		2016
Operating activities (1)	$	1,579	$	921
Investing activities (1)	$	(117)	$	(360	)
Financing activities	$	(515)	$	(146	)

(1) As required in adopting Accounting Standards Update (“ASU”) 2016-15, we retrospectively reclassified $27 million of cash distributions from partnership earnings from investing to operating activities for the first quarter of 2016.  The comparable amount reported in operating activities in 2017 was $45 million.  See Note 2 to the Consolidated Financial Statements for further discussion.

Cash flows from operating activities consist of cash receipts and disbursements for premiums, fees and other revenues, mail order pharmacy, investment income, taxes and benefits and expenses.  Because certain income and expense transactions do not generate cash, and because cash transactions related to revenues and expenses may occur in periods different from when those revenues and expenses are recognized in shareholders’ net income, cash flows from operating activities can significantly differ from shareholders’ net income.

Cash flows from investing activities generally consist of net investment purchases or sales and net purchases of property and equipment including capitalized internal-use software, as well as cash used to acquire businesses.

Cash flows from financing activities are generally comprised of issuances and re-payment of debt, proceeds on the issuance of common stock resulting from stock option exercises, and stock repurchases.  In addition, the subsidiaries report net deposits and withdrawals to and from contractholder deposit fund liabilities (that include universal life insurance liabilities) because such liabilities are considered financing activities with policyholders.

53

Operating activities

Cash provided by operating activities increased for the three months ended March 31, 2017 compared with the same period in 2016, primarily driven by early receipt of the April monthly payment from CMS of approximately $730 million for our Medicare Advantage and Part D businesses, partially offset by a voluntary pension contribution of $150 million.

Investing activities

Cash used in investing activities decreased for the three months ended March 31, 2017 compared with the same period in 2016, primarily due to higher proceeds from sales and maturities of short-term investments.

Financing activities

Cash used in financing activities increased for the three months ended March 31, 2017 compared with the same period in 2016, primarily due to repayment of long-term debt and higher share repurchases.

We maintain a share repurchase program, authorized by our Board of Directors.  Under this program, we may repurchase shares from time to time, depending on market conditions and alternate uses of capital.  The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital.  The share repurchase program may be effected through open market purchases or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, including through Rule 10b5-1 trading plans.  The program may be suspended or discontinued at any time.

Through May 4, 2017, we had repurchased 2.3 million shares for approximately $340 million.  The total remaining share repurchase authorization as of May 4, 2017 was $3.4 billion, and we are limited to a repurchase pace of $250 million per quarter, consistent with the merger agreement limitations.

Interest Expense

Interest expense on long-term debt, short-term debt and capital leases was as follows:

	Three Months Ended
	March 31,
(In millions)	2017		2016
Interest expense	$	62	$	63

Capital Resources

Our capital resources (primarily retained earnings and the proceeds from the issuance of debt and equity securities) provide protection for policyholders, furnish the financial strength to underwrite insurance risks and facilitate continued business growth.

Management, guided by regulatory requirements and rating agency capital guidelines, determines the amount of capital resources that we maintain.  Management allocates resources to new long-term business commitments when returns, considering the risks, look promising and when the resources available to support existing business are adequate.

54

We prioritize our use of capital resources to:

·provide the capital necessary to support growth and maintain or improve the financial strength ratings of subsidiaries;

·consider acquisitions that are strategically and economically advantageous; and

·return capital to investors through share repurchase.

See Note 3 to the Consolidated Financial Statements for information regarding capital restrictions imposed by our merger agreement with Anthem.  The availability of capital resources will be impacted by equity and credit market conditions.  Extreme volatility in credit or equity market conditions may reduce our ability to issue debt or equity securities.

Liquidity and Capital Resources Outlook

The availability of resources at the parent company level is partially dependent on dividends from our subsidiaries, most of which are subject to regulatory restrictions and rating agency capital guidelines, and partially dependent on the availability of liquidity from the issuance of debt or equity securities.

At March 31, 2017, there was $2.7 billion in cash and marketable investments available at the parent company level.  For the remainder of 2017, the parent company’s cash obligations are approximately $190 million, primarily for interest payments.  We repaid $250 million of long-term debt and made a voluntary pension contribution of $150 million in first quarter of 2017.

We expect to have sufficient liquidity to meet the obligations discussed above, based on the parent company’s current cash position and current projections for subsidiary dividends.  In addition, we actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy.

Our cash projections may not be realized and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings, or we experience material adverse effects from one or more risks or uncertainties described more fully in the Risk Factors section of the 2016 Form 10-K.  In those cases, we expect to have the flexibility to satisfy liquidity needs through a variety of measures including intercompany borrowings and sales of liquid investments.  The parent company may borrow up to $1.3 billion from its insurance subsidiaries without additional state approval.  As of March 31, 2017, the parent company had approximately $162 million of net intercompany loans payable to its insurance subsidiaries.  Alternatively, to satisfy parent company liquidity requirements we may use short-term borrowings, such as the commercial paper program and the committed revolving credit and letter of credit agreement of up to $1.5 billion, subject to the maximum debt leverage covenant in the credit agreement.  As of March 31, 2017, short-term borrowing capacity of $1.5 billion under the credit agreement was available to us.  Including this $1.5 billion, we have borrowing capacity of $10.5 billion within the maximum debt leverage covenant in the credit agreement described in Note 5 to the Consolidated Financial Statements, in addition to the $4.8 billion of debt outstanding.

Though we believe we have adequate sources of liquidity, significant disruption or volatility in the capital and credit markets could affect our ability to access those markets for additional borrowings or increase costs associated with borrowing funds.

The state of Illinois is operating without a budget for its second fiscal year.  It is unclear when or if the state’s budget difficulties will be resolved.  These budget difficulties have contributed to the state of Illinois being delinquent in processing payments for premiums and fees. At March 31, 2017, the total amount due was approximately $90 million.  We continue to monitor our receivable balances and work with the state on the timing of payments.

Overseas earnings.  We maintain a capital management strategy to retain overseas a significant portion of the earnings from our foreign operations.  As of March 31, 2017, undistributed earnings were approximately $2.7 billion.  These undistributed earnings are deployed outside of the U.S. predominantly in support of the liquidity and regulatory capital requirements of our foreign operations.  Approximately $290 million of cash and cash equivalents held overseas as of March 31, 2017 would be subject to additional tax expense representing the difference between the U.S. and foreign tax rates, if repatriated.  We continue to expect most of the undistributed earnings and future earnings to be reinvested to support growth initiatives overseas.  This strategy does not materially limit our ability to meet our liquidity and capital needs in the U.S.

55

Guarantees and Contractual Obligations

We are contingently liable for various contractual obligations entered into during the ordinary course of business.  See Note 16 to the Consolidated Financial Statements for additional information.

Contractual obligations.  During the three months ended March 31, 2017, there were no material changes to the contractual obligations reported in the Company’s 2016 Form 10-K.

CRITICAL ACCOUNTING ESTIMATES

The preparation of Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures in the Consolidated Financial Statements.  We consider an accounting estimate to be critical if:

·it requires assumptions to be made that were uncertain at the time the estimate was made; and

·changes in the estimate or different estimates that could have been selected could have a material effect on our consolidated results of operations or financial condition.

We have discussed the development and selection of our critical accounting estimates and reviewed the disclosures presented in our 2016 Form 10-K with the Audit Committee of our Board of Directors.  We regularly evaluate items that may impact critical accounting estimates.  Our most critical accounting estimates, as well as the effects of hypothetical changes in material assumptions used to develop each estimate, are described in the 2016 Form 10-K.  As of March 31, 2017, there are no significant changes to the critical accounting estimates from what was reported in our 2016 Form 10-K.

Management believes the current assumptions used to estimate amounts reflected in our Consolidated Financial Statements are appropriate.  However, if actual experience differs from the assumptions used in estimating amounts reflected in our Consolidated Financial Statements, the resulting changes could have a material adverse effect on our consolidated results of operations, and in certain situations, could have a material adverse effect on liquidity and our financial condition.

SEGMENT REPORTING

The following section of this MD&A discusses the results of each of our reporting segments.  In these segment discussions, we present “operating revenues,” defined as total revenues excluding realized investment results and “adjusted income from operations,” defined as shareholders’ net income (loss) excluding after-tax realized investment results, net amortization of other acquired intangible assets and special items.  Ratios presented in this segment discussion exclude the same items as adjusted income from operations.  See Note 17 to the Consolidated Financial Statements for additional discussion of these metrics.

In these segment discussions, we also present “adjusted margin,” defined as adjusted income from operations divided by operating revenues.

See the MD&A Executive Overview beginning on page 47 for summarized financial results of each of our reporting segments.

56

Global Health Care Segment

As described in the Segment Reporting introduction on page 56, the performance of the Global Health Care segment is measured using adjusted income from operations as presented in the table below.  The key factors affecting adjusted income from operations for this segment are:

·customer growth;

·sales of specialty products;

·operating expenses as a percentage of operating revenues (operating expense ratio); and

·medical costs as a percentage of premiums (medical care ratio or “MCR”) for our commercial and government businesses.

Results of Operations

Global Health Care segment financial summary	Three Months Ended March 31,						Change
							Favorable
(In millions)	2017			2016			(Unfavorable)
Operating revenues	$	8,198		$	7,884		4	%
Adjusted income from operations	$	610		$	544		12	%
Adjusted margin	7.4		%	6.9		%	50bps
Medical Care Ratios:
Commercial	77.6		%	75.8		%	(180)bps
Government	85.9		%	86.2		%	30bps
Consolidated Global Health Care	80.3		%	80.0		%	(30)bps
Operating expense ratio	20.5		%	21.0		%	50bps
	As of March 31,
(In thousands)	2017			2016			% Change
Customers:
Total commercial risk	2,927			2,510			17	%
Total government	502			615			(18)
Total risk	3,429			3,125			10
Service	12,305			12,004			3
Total medical customers	15,734			15,129			4	%
	As of
(In millions)	March 31, 2017			December 31, 2016			% Change
Global Health Care medical costs payable	$	2,770		$	2,532		9	%

57

Adjusted income from operations for the three months ended March 31, 2017 included favorable prior year reserve development of $61 million, compared with $14 million for the same period in 2016.  In addition, the increase also reflected growth in our Commercial segment including increased contributions from our specialty products and higher margins in our U.S. Individual business, partially offset by lower customer volumes in our Government business.

Operating revenues.  The increase for the three months ended March 31, 2017 compared with the same period in 2016 was primarily due to customer growth in our Commercial risk business, partially offset by lower customer volumes in our Government segment.

Medical care ratios.  For the three months ended March 31, 2017 compared with the same period in 2016, the Commercial medical care ratio increased, reflecting the moratorium on the health insurance industry tax.

For the three months ended March 31, 2017 compared with the same period in 2016, the Government medical care ratio decreased, reflecting more favorable prior year reserve development partially offset by unfavorable 2017 claim experience.

Operating expense ratio.  The operating expense ratio decreased for the three months ended March 31, 2017, compared to the same period in 2016, primarily reflecting the moratorium on the health insurance industry tax.

Other Items Affecting Health Care Results

Medical Customers

A medical customer is defined as a person meeting any one of the following criteria:

·is covered under an insurance policy, managed care arrangement, or service agreement issued by us;

·has access to our provider network for covered services under their medical plan; or

·has medical claims and services that are administered by us.

Our medical customer base as of March 31, 2017 was higher than the same period in 2016, primarily driven by growth across all market segments in our Commercial businesses, partially offset by declines in our Medicare Advantage business.

Global Health Care Medical Costs Payable

Medical costs payable was higher at March 31, 2017 compared to December 31, 2016, primarily due to customer growth and seasonality in our commercial risk and stop loss products.  (See Note 6 to the Consolidated Financial Statements for additional information.)

Global Supplemental Benefits Segment

As described in the Segment Reporting introduction on page 56, the performance of the Global Supplemental Benefits segment is measured using adjusted income from operations.  The key factors affecting adjusted income from operations for this segment are:

·premium growth, including new business and customer retention;

·benefit expenses as a percentage of premiums (loss ratio);

·operating expenses and acquisition expenses as a percentage of operating revenues (expense ratio and acquisition cost ratio); and

·the impact of foreign currency movements.

Throughout this discussion and the table presented below, prior period currency adjusted income from operations, revenues, and benefits and expenses are calculated by applying the current period’s exchange rates to reported results in the prior period.  A strengthening U.S. Dollar against foreign currencies decreases these measures, while a weakening U.S. Dollar produces the opposite effect.

58

Results of Operations

Global Supplemental Benefits segment financial summary	Three Months Ended
	March 31,						Change
(In millions)	2017			2016			Favorable (Unfavorable)
Operating revenues	$	909		$	806		13	%
Adjusted income from operations	$	74		$	67		10	%
Operating revenues, using 2017 currency exchange rates	$	909		$	818		11	%
Adjusted income from operations, using 2017 currency exchange rates	$	74		$	69		7	%
Adjusted margin	8.1		%	8.3		%	(20)bps
Loss ratio	58.4		%	56.2		%	(220)bps
Acquisition cost ratio	17.2		%	18.4		%	120bps
Expense ratio (excluding acquisition costs)	17.2		%	18.2		%	100bps

Adjusted income from operations.  Results for the three months ended March 31, 2017 increased compared with the same period in 2016 reflecting business growth, primarily in South Korea.  Lower acquisition and operating cost ratios also contributed to the favorable results, partially offset by higher claims in the U.S.

Operating revenues increased for the three months ended March 31, 2017 compared with the same period in 2016 primarily due to business growth, particularly in South Korea and the U.S.  The impact of foreign currency movements also modestly contributed to the favorable results.

The segment’s loss ratio increased for the three months ended March 31, 2017 compared with the same period in 2016, primarily due to higher claims in the U.S. and a change in business mix toward products with higher loss ratios, primarily in South Korea and the U.S., partially offset by favorable claims experience in South Korea.

The acquisition cost ratio decreased for the three months ended March 31, 2017 due to lower spending in certain markets and a shift toward higher premium markets with lower acquisition costs, primarily in South Korea and the U.S.

Operating expense ratio.  The operating expense ratio (excluding acquisition costs) decreased for the three months ended March 31, 2017 compared with the same period in 2016 reflecting strong operating expense management.

Other Items Affecting Global Supplemental Benefits Results

For our Global Supplemental Benefits segment, South Korea is the single largest geographic market.  South Korea generated 51% of the segment’s operating revenues and 95% of the segment’s adjusted income from operations for the three months ended March 31, 2017.  For the three months ended March 31, 2017, our Global Supplemental Benefits segment operations in South Korea represented 4% of our total consolidated operating revenues and 10% of consolidated adjusted income from operations.

As a global company, our business is exposed to risks inherent in foreign operations.  While we continue to monitor and evaluate the impacts of the U.K. vote to exit the European Union, the political unrest in Turkey and tensions in the Korean Peninsula, we do not expect these events to materially impact the results of the Global Supplemental Benefits segment in 2017 or 2018.

Group Disability and Life Segment

As described in the Segment Reporting introduction on page 56, the performance of the Group Disability and Life segment is measured using adjusted income from operations.  The key factors affecting adjusted income from operations for this segment are:

·premium growth, including new business and customer retention;

·net investment income;

·benefit expenses as a percentage of premiums (loss ratio); and

·operating expenses as a percentage of premiums and fees and other revenues (expense ratio).

59

Results of Operations

Group Disability and Life segment financial summary	Three Months Ended
	March 31,						Change
(In millions)	2017			2016			Favorable (Unfavorable)
Operating revenues	$	1,121		$	1,109		1%
Adjusted income from operations	$	68		$	15		N/M
Adjusted margin	6.1		%	1.4		%	N/M
Loss ratio	78.2		%	85.4		%	N/M
Expense ratio	22.7		%	22.4		%	(30)bps

Adjusted income from operations.  Results for the three months ended March 31, 2017 increased compared with the same period in 2016.  We implemented modifications to our disability claims management process in the first quarter of 2016 that temporarily extended the claims processing cycle and significantly lowered our claim resolution rate.  As our modified claims management process has matured in recent periods, we have seen our claim resolution rate improve, driving comparably favorable disability results.  Earnings in the period also reflected favorable life claims experience and higher investment income compared with the same period in 2016.

Operating revenues increased compared with the same period in 2016 due primarily to higher investment income driven by higher average assets and higher yields.

The segment’s loss ratio decreased compared with the same period in 2016 due to improvement in the disability claim resolution rate as noted above, lower disability new claim incidence and favorable life results.

Operating expense ratio.  The operating expense ratio increased slightly compared with the same period in 2016 due to higher selling expenses.

Other Operations

As described in the Segment Reporting introduction on page 56, the performance of the Other Operations segment is measured using adjusted income from operations.  Cigna’s corporate-owned life insurance (“COLI”) business contributes the majority of earnings in Other Operations.  Other Operations also includes the results from the run-off reinsurance and settlement annuity businesses, as well as the remaining deferred gains recognized from the sale of the individual life insurance and annuity and retirement benefits businesses.

Results of Operations

Other Operations segment financial summary	Three Months Ended
	March 31,						Change
(In millions)	2017			2016			Favorable (Unfavorable)
Operating revenues	$	116		$	117		(1)%
Adjusted income from operations	$	20		$	20		-%
Adjusted margin	17.2		%	17.1		%	10bps

Adjusted income from operations was flat for the three months ended March 31, 2017 compared with the same period in 2016.

Operating revenues decreased for the three months ended March 31, 2017 compared with the same period in 2016 primarily due to lower investment income yields partially offset by lower ceded premiums.

60

Corporate

Description

Corporate reflects amounts not allocated to operating segments, such as net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), interest on uncertain tax positions, certain litigation matters, intersegment eliminations, compensation cost for stock options, excess tax benefits on stock compensation, expense associated with our frozen pension plans and certain overhead and project costs.

Corporate financial summary	Three Months Ended
	March 31,
(In millions)	2017		2016		% Change
Adjusted (loss) from operations	$	(53)	$	(45)	(18)	%

Corporate’s adjusted loss from operations was higher for the three months ended March 31, 2017 compared with the same period in 2016, mainly due to higher operating expenses partially offset by higher net investment income.

INVESTMENT ASSETS

The following table presents our investment asset portfolio, excluding separate account assets, as of March 31, 2017 and December 31, 2016.  Additional information regarding our investment assets and related accounting policies is included in Notes 9, 10, 11, 12 and 13 to the Consolidated Financial Statements.

	March 31,		December 31,
(In millions)	2017		2016
Fixed maturities	$	21,734	$	20,961
Equity securities	574		583
Commercial mortgage loans	1,752		1,666
Policy loans	1,431		1,452
Other long-term investments	1,465		1,462
Short-term investments	303		691
Total investment assets	$	27,259	$	26,815

Fixed Maturities

Investments in fixed maturities include publicly traded and privately placed debt securities, mortgage and other asset-backed securities and preferred stocks redeemable by the investor.  These investments are classified as available for sale and are carried at fair value on our balance sheet.  Additional information regarding valuation methodologies, key inputs and controls is included in Note 9 to the Consolidated Financial Statements.  More detailed information about fixed maturities by type of issuer and maturity dates is included in Note 10 to these Consolidated Financial Statements.

The following table reflects our fixed maturity portfolio by type of issuer as of March 31, 2017 and December 31, 2016:

	March 31,		December 31,
(In millions)	2017		2016
Federal government and agency	$	897	$	877
State and local government	1,419		1,435
Foreign government	2,312		2,113
Corporate	16,627		16,050
Mortgage and other asset-backed	479		486
Total fixed maturities	$	21,734	$	20,961

61

The fixed maturity portfolio increased during the three months ended March 31, 2017, reflecting an increase in investable funds.  As of March 31, 2017, $19.3 billion, or 89%, of the fixed maturities in our investment portfolio were investment grade (Baa and above, or equivalent), and the remaining $2.4 billion were below investment grade.  The majority of the bonds that are below investment grade are rated at the higher end of the non-investment grade spectrum.  These quality characteristics have not materially changed from the prior year and are consistent with our investment strategy.

State and local government.  Our investment in state and local government securities, with an average quality rating of Aa2, is diversified by issuer and geography with no single exposure greater than $30 million as of March 31, 2017.  We assess each issuer’s credit quality based on a fundamental analysis of underlying financial information and do not rely solely on statistical rating organizations or monoline insurer guarantees.

Foreign government.  We invest in high quality foreign government obligations, with an average quality rating of Aa3 as of March 31, 2017.  These investments are concentrated in Asia, primarily South Korea, consistent with the geographic locations of our international business operations.  Foreign government obligations also include $221 million of investments in European sovereign debt, none of which are in countries with significant political or economic concerns such as Portugal, Italy, Ireland, Greece, Spain and Turkey.

Corporate.  As of March 31, 2017, corporate fixed maturities included the following:

·Private placement investments were $5.4 billion.  These investments are generally less marketable than publicly-traded bonds, however yields on these investments tend to be higher than yields on publicly-traded bonds with comparable credit risk.  We perform a credit analysis of each issuer, diversify investments by industry and issuer and require financial and other covenants that allow us to monitor issuers for deteriorating financial strength and pursue remedial actions, if warranted.

·Investments in companies that are domiciled or have significant business interests in Italy, Ireland, Spain and Turkey were $379 million.  These investments have an average quality rating of Baa3 and are diversified by industry sector, including approximately 2% invested in financial institutions.

·Investments in the energy and natural gas sector were $1.8 billion with gross unrealized losses of $13 million.  These investments have an average quality rating of Baa2 and are diversified by issuer with no single exposure greater than $40 million.

·Retail sector fixed maturity investments were approximately $450 million as of March 31, 2017 with gross unrealized losses of $5 million.  These investments have an average quality rating of Baa1 and are diversified across approximately 50 issuers with no single exposure exceeding $35 million.

In addition to amounts classified in fixed maturities on our Consolidated Balance Sheets, we operate a joint venture in China in which we have a 50% ownership interest.  We account for this joint venture on the equity basis of accounting and report it in other assets, including other intangibles.  This entity has an investment portfolio of approximately $3.9 billion that is primarily invested in local Chinese corporate and government fixed maturities and has no investments with a material unrealized loss as of March 31, 2017.

Equity Securities

Approximately $400 million in equity securities are invested in an exchange traded fund (“ETF”) as part of a temporary program to invest available funds in high quality and liquid assets.  The underlying assets of the ETF are primarily U.S. investment grade corporate bonds and there is a gross unrealized loss of $4 million as of March 31, 2017 due to an increase in market yields since purchase.

Commercial Mortgage Loans

Our commercial mortgage loans are fixed rate loans, diversified by property type, location and borrower.  Loans are secured by high quality commercial properties and are generally made at less than 70% of the property’s value at origination of the loan.  Property value, debt service coverage, quality, building tenancy and stability of cash flows are all important financial underwriting considerations.  We hold no direct residential mortgage loans and do not originate or service securitized mortgage loans.

We completed the annual in-depth review of our commercial mortgage loan portfolio during the second quarter of 2016.  For a discussion of the results of this review and changes in key loan metrics, see Note 10 to the Consolidated Financial Statements.

62

Commercial real estate capital markets remain very active for well-leased, quality commercial real estate located in strong institutional investment markets.  The vast majority of properties securing the mortgages in our mortgage loan portfolio possess these characteristics.  We have $138 million of commercial mortgage loans in the retail sector for various shopping centers in the U.S.  Loan to value ratio for these loans was 53%, and the debt service coverage ratio was 1.94. All of these loans are current.

The $1.8 billion commercial mortgage loan portfolio consists of approximately 65 loans, including one impaired loan with a carrying value of $6 million, net of a $3 million reserve, that is classified as a problem loan.  We have $138 million of loans maturing in the next twelve months.  Given the quality and diversity of the underlying real estate, positive debt service coverage and significant borrower cash investment generally ranging between 30 and 40%, we remain confident that borrowers will continue to perform as expected under their contract terms.

Other Long-term Investments

Other long-term investments of $1.5 billion primarily include investments in security partnership and real estate funds as well as direct investments in real estate joint ventures.  The funds typically invest in mezzanine debt or equity of privately held companies (securities partnerships) and equity real estate.  Given our subordinate position in the capital structure of these underlying entities, we assume a higher level of risk for higher expected returns.  To mitigate risk, investments are diversified across approximately 120 separate partnerships, and approximately 70 general partners who manage one or more of these partnerships.  Also, the funds’ underlying investments are diversified by industry sector or property type, and geographic region.  No single partnership investment exceeds 4% of our securities and real estate partnership portfolio.

Problem and Potential Problem Investments

“Problem” bonds and commercial mortgage loans are either delinquent by 60 days or more or have been restructured as to terms, including concessions by us to modify the interest rate, principal payment or maturity date.  “Potential problem” bonds and commercial mortgage loans are considered current (no payment is more than 59 days past due), but management believes they have certain characteristics that increase the likelihood that they may become problems.  The characteristics management considers include, but are not limited to, the following:

·request from the borrower for restructuring;

·principal or interest payments past due by more than 30 but fewer than 60 days;

·downgrade in credit rating;

·collateral losses on asset-backed securities; and

·for commercial mortgages, deterioration of debt service coverage below 1.0 or value declines resulting in estimated loan-to-value ratios increasing to 100% or more.

We recognize interest income on problem bonds and commercial mortgage loans only when payment is actually received. The amount that would have been reflected in net income if interest on non-accrual investments had been recognized in accordance with the original terms was not significant for the three months ended March 31, 2017 or 2016.

The following table shows problem and potential problem investments at amortized cost, net of valuation reserves and write-downs:

	March 31, 2017						December 31, 2016
(In millions)	Gross		Reserve		Net		Gross		Reserve		Net
Problem bonds	$	55	$	(10)	$	45	$	70	$	(9)	$	61
Problem commercial mortgage loans	9		(3)		6		26		(5)		21
Foreclosed real estate	48		-		48		49		-		49
Total problem investments	$	112	$	(13)	$	99	$	145	$	(14)	$	131
Potential problem bonds	$	15	$	(8)	$	7	$	12	$	(7)	$	5
Potential problem commercial mortgage loans	-		-		-		-		-		-
Total potential problem investments	$	15	$	(8)	$	7	$	12	$	(7)	$	5

Problem and potential problem investments decreased by $30 million from December 31, 2016 due primarily to payoffs and paydowns of problem bonds and mortgage loans and new impairments on problem bonds.

63

Investment Outlook

Although financial markets in the United States remained stable during the first quarter, we continue to closely monitor global macroeconomic trends and the potential impact to our investment portfolio.  Recently, the retail sector of the U.S. economy has shown some weakness and that trend is expected to continue.  See the fixed maturities and commercial mortgage loan sections for further information on our investments in that sector. Future realized and unrealized investment results will be driven largely by market conditions that exist when a transaction occurs or at the reporting date.  These future conditions are not reasonably predictable; however, we believe that the vast majority of our investments will continue to perform under their contractual terms.  Based on our strategy to match the duration of invested assets to the duration of insurance and contractholder liabilities, we expect to hold a significant portion of these assets for the long term.  Although future impairment losses resulting from interest rate movements and credit deterioration due to both company-specific and the global economic uncertainties discussed above remain possible, we do not expect these losses to have a material adverse effect on our financial condition or liquidity.

MARKET RISK

Financial Instruments

Our assets and liabilities include financial instruments subject to the risk of potential losses from adverse changes in market rates and prices.  Our primary market risk exposures are interest rate risk and foreign currency exchange rate risk.  Certain financial instruments, such as insurance-related assets and liabilities, are excluded from these hypothetical calculations.  We encourage you to read this in conjunction with “Market Risk – Financial Instruments” included in Part II, Item 7 of our 2016 Form 10-K.  As of March 31, 2017, there are no material changes in our risk exposures from that reported in our 2016 Form 10-K.

64

Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information responsive to this item is contained under the caption “Market Risk” in Item 2 above, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 4.CONTROLS AND PROCEDURES

Based on an evaluation of the effectiveness of Cigna’s disclosure controls and procedures conducted under the supervision and with the participation of Cigna’s management, Cigna’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, Cigna’s disclosure controls and procedures are effective to ensure that information required to be disclosed by Cigna in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to Cigna’s management, including Cigna’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. 

During the period covered by this report, there have been no changes in Cigna’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, Cigna’s internal control over financial reporting.

65

 Part II.  OTHER INFORMATION

Item 1.LEGAL PROCEEDINGS

The information contained under “Litigation Matters”, “Regulatory Matters” and “Other Legal Matters” in Note 16 to the Consolidated Financial Statements is incorporated herein by reference.

66

Item 1A.RISK FACTORS

Cigna’s Annual Report on Form 10-K for the year ended December 31, 2016 includes a detailed description of its risk factors.

67

Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c)Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information about Cigna’s share repurchase activity for the quarter ended March 31, 2017:

Issuer Purchases of Equity Securities

Period	Total # of shares purchased (1)	Average price paid per share	Total # of shares purchased as part of publicly announced program (2)	Approximate dollar value of shares that may yet be purchased as part of publicly announced program (3)
January 1-31, 2017	333	$134.72	-	$725,000,122
February 1-28, 2017	1,281,243	$147.15	999,855	$3,611,474,335
March 1-31, 2017	718,453	$150.79	680,900	$3,508,792,842
Total	2,000,029	$148.46	1,680,755	N/A

(1) Includes shares tendered by employees as payment of taxes withheld on the vesting of restricted stock and strategic performance shares granted under the Company’s equity compensation plans.  Employees tendered 333 shares in January, 281,388 shares in February and 37,553 shares in March 2017.

(2) Additionally, the Company maintains a share repurchase program, authorized by the Board of Directors.  Under this program, the Company may repurchase shares from time to time, depending on market conditions and alternate uses of capital.  The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions and alternate uses of capital.  The share repurchase program may be effected through open market purchases or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, including through Rule 10b5-1 trading plans.  The program may be suspended or discontinued at any time.  From April 1, 2017 through May 4, 2017, the Company repurchased 0.6 million shares for approximately $90 million.  In February 2017, the Board increased repurchase authority to $3.7 billion. The remaining share repurchase authorization under the program was $3.4 billion as of May 4, 2017, and the Company is limited to a repurchase pace of $250 million per quarter, consistent with the merger agreement.

(3) Approximate dollar value of shares is as of the last date of the applicable month.

Item 4.MINE SAFETY DISCLOSURES

Not applicable.

68

Item 6.EXHIBITS

(a)See Exhibit Index

69

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Cigna Corporation
Date:	May 5, 2017
By:	/s/ Thomas A. McCarthy
	Thomas A. McCarthy
	Executive Vice PresidentChief Financial Officer
	(Duly Authorized Officer and Principal Financial Officer)

70

INDEX TO EXHIBITS

Number	Description	Method of Filing
3.1	Restated Certificate of Incorporation of the registrant as last amended October 28, 2011	Filed as Exhibit 3.1 to the registrant’s Form 10-Q for the quarterly period ended September 30, 2011 and incorporated herein by reference.
3.2	By-Laws of the registrant as last amended and restated December 6, 2012	Filed as Exhibit 3.2 to the registrant’s Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
10.1*	Cigna Long-Term Incentive Plan as amended and restated effective as of April 26, 2017	Filed as Exhibit 10.1 to the registrant’s Form 8-K filed May 1, 2017 and incorporated herein by reference.
10.2*	Form of Cigna Long-Term Incentive Plan: Strategic Performance Share Grant Agreement	Filed herewith.
10.3*	Form of Cigna Long-Term Incentive Plan: Nonqualified Stock Option Grant Agreement	Filed herewith.
10.4*	Form of Cigna Long-Term Incentive Plan: Restricted Stock Grant Agreement	Filed herewith.
10.5*	Cigna Stock Unit Plan as amended and restated effective February 22, 2017	Filed herewith.
10.6*	Form of Cigna Stock Unit Plan:  Restricted Stock Unit Grant Agreement	Filed herewith.
12	Computation of Ratios of Earnings to Fixed Charges	Filed herewith.
31.1	Certification of Chief Executive Officer of Cigna Corporation pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934	Filed herewith.
31.2	Certification of Chief Financial Officer of Cigna Corporation pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934	Filed herewith.
32.1	Certification of Chief Executive Officer of Cigna Corporation pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350	Furnished herewith.
32.2	Certification of Chief Financial Officer of Cigna Corporation pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350	Furnished herewith.
101	Financial statements from the quarterly report on Form 10-Q of Cigna Corporation for the quarter ended March 31, 2017 formatted in XBRL (eXtensible Business Reporting Language):  (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Total Equity; (v) the Consolidated Statements of Cash Flow; and (vi) the Notes to the Consolidated Financial Statements	Filed herewith.

*Management contracts and compensatory plans or arrangements.

Shareholders may obtain copies of exhibits by writing to Cigna Corporation, Shareholder Services Department, 1601 Chestnut Street, Philadelphia, PA 19192.

E-1

EX-10.2

Exhibit 10.2

Form of Cigna Long-Term Incentive Plan:  Strategic Performance Share Grant Agreement

Cigna Corporation (“Cigna”) has granted you the number of strategic performance shares set forth below in this Strategic Performance Share Grant Agreement (“Strategic Performance Share Grant” or “Grant”) under the Cigna Long-Term Incentive Plan (“Plan”).  The date of your Strategic Performance Share Grant (“Grant Date”) is also indicated below. The award is subject to the provisions of the Plan and the Terms and Conditions below.

You should carefully read all the terms and conditions of this Strategic Performance Share Grant and be sure you understand what they say and what your responsibilities and obligations are before you click on the ACCEPT button to acknowledge and agree to this Grant.

If you are not willing to agree to all of the Grant terms and conditions, do not accept the Grant and do not click the ACCEPT button for the Strategic Performance Share Grant Acknowledgment and Agreement.  If you do not accept the Grant, you will not receive the benefits of the Grant.

If you do click on the ACCEPT button, you are accepting and agreeing to all of the terms and conditions of this Strategic Performance Share Grant.

Participant:

Grant Type:

Plan Name:  Cigna Long-Term Incentive Plan

Grant Date:

Total Granted:

Grant Price:   (USD)

Vesting Schedule

Shares Granted Approximate
Vest Date

Please Note: The date shown in the Vesting Schedule chart above is not your actual vesting date.  It is an approximation of the expected vesting date and is provided due to systems requirements. In accordance with the Terms and Conditions of your Strategic Performance Share Grant, the actual vesting date will be determined by the People Resources Committee of the Board of Directors.

You should also read the Plan Document and Key Contacts and Reference Materials document (attached to the Plan) and indicate that you have done so and agree to the terms by checking the appropriate box in the online grant acceptance process.  The Key Contacts and Reference Materials document contains information on how to get important award information (such as the Plan Prospectus, Tax Considerations and Cigna’s Securities Transactions and Insider Trading Policy) and whom to contact if you have questions.

Please be aware that the Cigna Securities Transactions and Insider Trading Policy places restrictions on your transactions in Cigna securities and requires certain Cigna employees to obtain advance permission from the Corporate Secretary before executing transactions in Cigna securities.

If you have questions about your award, please contact Cigna Shareholder Services by email at shareholderservices@cigna.com or by phone at 215.761.3516.

1

Important Notice:  Strategic Performance Share Grant Acknowledgment and Agreement

By clicking on the ACCEPT button, I:

1.Acknowledge and represent to Cigna that I have:

a.received the Strategic Performance Grant;

b.read and understand its terms and conditions, which include, among other things, restrictive covenants such as non-competition, customer and employee non-solicitation and non-disclosure provisions and litigation cooperation and intellectual property assignment and assistance provisions; and

c.received answers to any questions I had about the Grant and its terms and conditions, including the restrictive covenants.

2.Understand and agree that:

a.Delaware law governs the interpretation and construction of the Grant; and

b.any controversy or proceeding arising out of or relating to the restrictive covenants in the Grant will be brought exclusively before a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction (collectively, “Delaware Courts”).

3.Consent to Delaware Courts exercising personal jurisdiction over me in any dispute about the restrictive covenants.

Scroll down for the TERMS AND CONDITIONS of the Strategic Performance Share Grant.

2

TERMS AND CONDITIONS OF YOUR [Year] GRANT

OF STRATEGIC PERFORMANCE SHARES

These Terms and Conditions are an important part of your grant of Strategic Performance Shares from Cigna Corporation (Cigna).  The terms of your Strategic Performance Share grant are in: (a) the electronic Strategic Performance Share Grant Agreement above, (b) these Terms and Conditions (including Schedule I), and (c) the Cigna Long-Term Incentive Plan (Plan).

Certain words in this document with first letters capitalized are defined in the Strategic Performance Share Grant Agreement above, these Terms and Conditions or Article 2 of the Plan.  This grant is void if you are not an employee of Cigna or a Subsidiary (a Cigna company) on the Grant Date.

1.Strategic Performance Shares; Performance Period

Each Strategic Performance Share (Performance Share) represents a conditional right to receive one share of Cigna Common Stock (Share), subject to the performance, vesting and payment provisions described below. The Performance Period applicable to your award is January 1, [     ] to December 31, [      ] (the Performance Period).

2.Restrictions

Performance Shares are subject to certain Restrictions from the Grant Date until the Payment Date described in paragraph 4.  The Restrictions are:

(a)You cannot sell or transfer the Performance Shares to anyone;

(b)Unless an exception applies (described in paragraph 4), you will forfeit (lose your right to) your unvested Performance Shares and all related rights immediately upon your Termination of Employment; and

(c)Of the Performance Shares awarded to you (Shares Awarded), the number of Performance Shares, if any, that you earn and for which you may receive payment (Shares Earned) is subject to the performance criteria described in Schedule I.

Article 10 of the Plan describes these Restrictions in more detail.  In addition to these Restrictions, you must also comply with all the terms and conditions of this grant, including those contained in this document.

3.Performance Shares Earned

(a)Schedule I specifies the performance criteria applicable to your Shares Awarded. Except as provided in paragraph 4, after the end of the Performance Period, the Committee shall determine whether and to what extent these performance criteria have been achieved for purposes of determining the Vesting Percentage applicable to your Performance Shares (Shares Earned Percentage).

(b)Any Shares Awarded that are not Shares Earned after giving effect to the Committee’s determinations under this paragraph 3 shall terminate and become null and void immediately following such determinations.

4.Eligibility for Payment

(a)Except as described in paragraph 4(b) and subject to paragraph 4(c) and paragraph 3, the Restrictions on the Performance Shares will end (your Performance Shares will vest) on the Payment Date described in paragraph 5, but only if you remain continuously employed

3

by a Cigna company until the Payment Date and comply with all the terms and conditions of this grant, including those contained in this document.

(b)Notwithstanding paragraph 4(a) and subject to paragraph 4(c) and paragraph 3, if your Termination of Employment is before the Payment Date:

(1)Your Performance Shares will vest upon your Termination of Employment if it is Upon a Change of Control (of Cigna Corporation). If your Performance Shares vest under this paragraph 4(b)(1), the Shares Earned Percentage shall be the greatest of:

(a) 100%;

(b) The Shares Earned Percentage for the Performance period that ended immediately before your Termination upon a Change of Control; or

(c) The average of the Shares Earned Percentages established by the Committee for the last two Performance Periods that ended before your Termination upon a Change of Control.

(2)Your Performance Shares will vest upon your Termination of Employment if it is due to your death. If your Performance Shares vest under this paragraph 4(b)(2), the Shares Earned Percentage shall be 100%.

(3)Your Performance Shares will vest upon your Termination of Employment if it is due to your Disability.

(4)Your Performance Shares may vest upon your Termination of Employment if it is due to your Early Retirement or Retirement and if the Committee or its designee (including Cigna’s senior human resources officer) approves the early vesting before your Termination of Employment.  If you want to be considered for early vesting when you retire, you must ask your manager or human resources representative far enough in advance of your retirement so there is time to process your request.

(c)You must comply in all respects with the terms and conditions of this grant, including those contained in these Terms and Conditions.

5.Payment

(a)Except as provided in paragraph 5(b), below, your vested Shares Earned under this grant will be paid in the year following the close of the Performance Period on the date within such year specified by the Committee (Payment Date).

(b)Any Performance Shares that vest on account of your death will be paid during the 90 day period immediately following your death to your estate.

(c)For each Share Earned that vests, Cigna will make payment by issuing one Share as of the Payment Date.  Until the Shares are issued to you, you will not be a Cigna shareholder, not have the right to vote the Shares, and not receive actual dividends.

6.Taxes

Section 16.7 of the Plan shall apply to any tax withholding that may be required by law for Performance Shares or Shares.  Upon the vesting or payment of any Performance Share, Cigna reserves the right to withhold enough newly-issued Shares to cover all or part of any applicable tax withholding.

4

7.Book-Entry Shares; Sale of Shares

(a)Upon payment of the Shares as described in paragraph 5, Cigna (or a custodian appointed by Cigna) will hold your Shares in book-entry form in a Stock Account.  That is, a record of your Share ownership will be kept electronically, and you will not risk losing any Share certificates. A certificate for vested Shares will be issued to you only if you ask for one, but not if you have engaged in a Violation (described in paragraph 8(c)).

(b)You may generally sell or transfer the Shares at any time, but your right to sell the Shares may be limited by Cigna.  This right is subject to the terms of Cigna’s Securities Transactions and Insider Trading Policy, and Cigna reserves the right, for any reason at any time, to suspend or delay action on any request you make to sell the Shares.

8.Conditions of Grant

(a)By accepting the grant, you are agreeing:

(1)to the Inventions provision in paragraph 8(b); and

(2)not to engage in any Violation described in paragraph 8(c).

You understand and agree that your agreement to the Inventions provision and not to engage in any Violation are a material part of the inducement for Cigna’s granting you the Performance Shares and essential pre-conditions to your eligibility to exercise any rights associated with the grant and retain any benefit from the vesting of the Performance Shares and issuance of the Shares.

(b)Inventions

(1)You hereby assign and promise to assign to Cigna companies or their designee, all your right, title, and interest in and to any and all current and future Inventions.  You acknowledge that all original works of authorship which you make (whether alone or jointly with others) within the scope of your Cigna company employment and which are protectable by copyright are “works made for hire,” as defined in the United States Copyright Act.

(2)You agree to (i) maintain and make available adequate current records, including electronic records, notes, sketches and drawings, of all Inventions you make, and (ii) disclose such Inventions in writing upon request. These records will remain the property of Cigna companies.

(3)If in the course of your Cigna company employment, you incorporate a Prior Invention into any Cigna company work product, you grant Cigna companies a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to use the Prior Invention as part of or in connection with the work product. Within 45 days after the date of this grant, you agree to notify Cigna Shareholder Services (shareholderservices@Cigna.com) of any Prior Inventions that you are not assigning under this paragraph 8(b).

(4)“Inventions” means any and all inventions, original works of authorship, developments, concepts, sales methods, improvements, trade secrets, or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you have or will solely or jointly conceive, develop, reduce to practice, or fix during your Cigna company employment.

(5)“Prior Inventions” means all inventions, original works of authorship,

5

developments, concepts, sales methods, improvements, trade secrets or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you conceived, developed, reduced to practice or fixed before your Cigna company employment and which belong to you.

(c)Violation

You will engage in a “Violation” if, directly or indirectly, you engage in any misconduct described in paragraph 8(c)(1) below or you break any of the “Promises” in paragraphs 8(c)(2) through (7) below:

(1)Misconduct:

(A)You have a Termination of Employment initiated by a Cigna company because of your misconduct, as that term is defined in Cigna’s Code of Ethics, Standards of Conduct or other employment policies.

(B)You do anything else while an employee of any Cigna company that is not discovered by the company until after your Termination of Employment and that would, if you had still been employed at the time of the discovery, be reason for your Termination of Employment for misconduct, as described above.

(2)Promise Not To Compete against Cigna Companies:

(A)If you are in Career Band 6 or higher on your Termination of Employment date:

You Promise not to become employed by, work as a consultant or independent contractor for, or in any way render services or assistance to any Cigna Competitor (defined in paragraph 8(c)(2)(C) below) at any time during the period that starts on the Grant Date and ends 12 months after your Termination of Employment.

You acknowledge and agree that:

(i)Cigna’s business competes on a global basis;

(ii)Cigna’s sales and marketing plans are for continued expansion throughout the United States of America and globally;

(iii)You have had access to and received Confidential Information (described in paragraph 8(c)(5)(B) below); and

(iv)The time restrictions and global nature of this non-competition restriction are reasonable and necessary to protect Cigna’s business and Confidential Information.

(B)If you are in Career Band 5 or below on your Termination of Employment date:

You Promise not to become employed by, work as a consultant or independent contractor for, or in any way render services or assistance to any Cigna Competitor (defined in paragraph 8(c)(2)(C) below) at any time during the period that starts on the Grant Date and ends 12 months after your Termination of Employment, if that work is similar to, and within the same geographic area as, the work you performed, or for which you had

6

responsibility, at any Cigna company at any time during the six-month period that ends on your Termination of Employment date.

For example:

(i)If you are a sales employee and your sales territory at any time during your last six months of Cigna company employment is Pennsylvania, New Jersey, and New York, this paragraph 8(c)(2)(B) would apply to you only if you work in a sales position for a Cigna Competitor and only to the extent your new sales territory is Pennsylvania, New Jersey, and/or New York;

(ii)If you are an underwriter with nationwide responsibilities at any time during your last six months of Cigna company employment, and you seek a job with a Cigna Competitor as an underwriter, the restrictions in paragraph 8(c)(2)(B) would be nationwide in scope; or

(iii)If you work in a particular division or segment of Cigna, you would not be permitted to work in a similar division or segment for a Cigna Competitor where the work you are expected to perform for the competitor is similar to the work you performed for any Cigna company.

You acknowledge and agree that you have had access to and received Confidential Information (described in paragraph 8(c)(5)(B) below) and the above time and geographic restrictions are reasonable and necessary to protect Cigna’s business and Confidential Information.

(C)“Cigna Competitor” means any business that competes directly or indirectly with any Cigna company’s product or service.

(D)The Promise in paragraph 8(c)(2) not to compete against Cigna companies after  Termination of Employment will not apply and Cigna will not enforce it with respect to Cigna company employment in California.

(3)Promise Not To Solicit or Hire Cigna Company Employees:

(A)You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you will not:

(i)Solicit any employee of any Cigna company to terminate his/her employment with, or otherwise cease his/her relationship, contractual or otherwise, with that Cigna company; or

(ii)Hire any Cigna company employee.

(B)This paragraph 8(c)(3) will not apply to applications for employment submitted voluntarily by any Cigna employee, in response to a general advertisement or otherwise, so long as neither you, nor anyone acting on your behalf or in response to information provided by you, otherwise Solicits the employees to leave Cigna.

(C)To “Solicit” means to entice, encourage, persuade, or solicit, or to attempt to entice, encourage, persuade or solicit.

7

(4)Promise Not To Solicit Cigna Company Customers:

(A)You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you will not:

(i)Solicit any Cigna company customer to end an existing relationship, contractual or otherwise, with that Cigna company;

(ii)Solicit any Cigna company customer to reduce the volume of their business dealings with Cigna; or

(iii)Solicit any potential Cigna company customer to enter into any business arrangements with you or any business which you may become employed by, or affiliated in any way with, after leaving any Cigna company, if such business arrangements would compete in any way with any business that Cigna company has conducted, or has been planning to conduct, during the 12-month period ending on the date of the Violation.

(B)The Promise in paragraph 8(c)(4)(A) above applies only to a customer or potential customer with whom you had any Material Contact while employed by any Cigna company.  “Material Contact” means you:

(i)Had business dealings with the customer on behalf of any Cigna company within the three-year period ending on the date of the Solicitation;

(ii)Were responsible for supervising or coordinating the dealings between any Cigna company and the customer or potential customer any time during the three-year period ending on the date of the Solicitation; or

(iii)Obtained, at any time, trade secrets or confidential information about a customer or potential customer with whom you had contact as a result of your employment by any Cigna company.

(C)“Solicit” is defined in paragraph 8(c)(3)(C).

(D)The Promise in paragraph 8(c)(4) not to solicit Cigna company customers after  Termination of Employment will not apply and Cigna will not enforce it with respect to Cigna company employment in California unless the activity involves the use of Confidential Information.

(5)Promise Not To Disclose Cigna Companies’ Confidential Information:

(A)You Promise not to disclose any Confidential Information to any third-party at any time, whether during or after your employment, without the prior written consent of Cigna (except to the extent required by an order of a court having competent jurisdiction or a properly issued subpoena) unless that Confidential Information was previously disclosed publicly by Cigna or has become public knowledge (other than by your disclosure). Nothing in this Confidentiality provision prohibits you or your counsel from initiating communications directly with, or responding to any inquiry from, or providing testimony before any self-regulatory organization or any state or federal regulatory authority.  In the event that you are required to disclose Confidential Information pursuant to a subpoena or other law

8

or regulation, you shall notify Cigna promptly upon learning that you have been subpoenaed or are otherwise required or compelled to divulge Confidential Information.

(B)“Confidential Information” means any Cigna company trade secrets, confidential information, or proprietary materials, including but not limited to customer lists, financial records, marketing plans and sales plans.

(6)Promise to Cooperate With Cigna in Investigations or Litigation:

(A)You Promise that, at any time after your Termination of Employment, you will cooperate with Cigna in (i) all investigations of any kind, (ii) helping to prepare and review documents and meeting with Cigna attorneys, and (iii) providing truthful testimony as a witness or a declarant during discovery and/or trial in connection with any present or future court, administrative, agency, or arbitration proceeding involving any Cigna company and with respect to which you have relevant information.

(B)Cigna agrees that it will reimburse you, upon production of appropriate receipts and in accordance with Cigna’s then existing Business Travel Reimbursement Policy, the reasonable business expenses (including air transportation, hotel, and similar expenses) incurred by you in connection with such assistance.  You must present to Cigna for reimbursement all receipts for those expenses within 45 days after you incur the expenses.

(7)Promise to Assist with Patent and Copyright Registrations:

(A)You Promise that, during your Cigna company employment and after your Termination of Employment, you will assist Cigna companies, should they request and at Cigna’s expense, to secure their rights (including any copyrights, patents, trademarks or other intellectual property rights) in or relating to the Inventions in any and all countries, including by:

(i)disclosing to Cigna Companies all pertinent information and data; and

(ii)executing all applications, assignments or other instruments necessary to apply for and obtain these rights and assign them to Cigna companies.

(d)(1)If you were an Executive Officer at any time during the 24-month period before the date of the Violation, the People Resources Committee will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment (described in paragraph 9) and to impose conditions on any waiver.

(2)Otherwise, Cigna’s Senior Human Resources Officer, or his or her designee, will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment and to impose conditions on any waiver.

(3)Determinations of the People Resources Committee, Cigna’s Senior Human Resources Officer, or his or her designee, will be final and binding on all parties.

9

9.             Consequences of a Violation: Payment to Cigna

Important: This paragraph 9 is not Cigna’s only remedy for a Violation.  Cigna may seek any additional legal or equitable remedy, including an injunction described in paragraph 10, for a Violation.

(a)If you engage in any Violation at any time:

(1)           You will immediately forfeit all unvested Performance Shares; and

(2)           No payment will be made for any Performance Shares that have vested under paragraph 4(b) if the Violation occurs before the Payment Date.

(b)You must immediately make the Payment described in paragraph 9(c) to Cigna in the manner described in paragraph 9(d) if:

(1)You engage in a Violation described in paragraph 8(c)(2) (compete against Cigna), 8(c)(3) (Solicit or hire Cigna employees) or 8(c)(4) (Solicit Cigna customers), either while you are a Cigna company employee or within 12 months after your Termination of Employment; or

(2)You engage in a Violation described in paragraph 8(c)(1) (misconduct), 8(c)(5) (disclose Confidential Information), 8(c)(6) (fail to cooperate) or 8(c)(7) (fail to assist) at any time.

(c)“Payment” is the value you realize from any Performance Shares that are paid under paragraph 5 during the 12-month period ending on the date of the Violation.  The Payment will equal:

(1)The number of Performance Shares that are paid during that 12-month period;

multiplied by

(2)The Fair Market Value of the Shares issued on the Payment Date for those Performance Shares;

plus

(3)The total amount of all actual dividends, if any, paid to you on those Shares through the date of the Payment described in paragraph 9(d).

(d)Cigna will recover the Payment from you by any means permitted by applicable law, at the sole discretion of Cigna management, including but not limited to any or all of the following methods:

(1)If you have any Shares in a Stock Account or in any other account in book-entry form when a Violation occurs, Cigna will take back from you the whole number of Shares that has a total Fair Market Value as of the date of the Violation up to, but not more than, the Payment amount.

(2)Cigna will, to the extent permitted by applicable law, reduce:

(A)The amount of any payments that any Cigna company owes you for any reason (including without limit any payments owed to you under any nonqualified retirement, deferred compensation or other plan or arrangement) by

(B)The Payment amount.

This reduction will not occur until the date a future payment to you is due.

10

(3)Cigna will send you a written notice and demand for all or part of any Payment amount.  Within 30 days after you receive that notice and demand, you must make the Payment to Cigna.

10.          Consequences of a Violation: Injunction

You agree that:

(a)Cigna will be entitled to ask a court of competent jurisdiction to issue an order (an injunction) that requires you to take action and/or that prohibits you from taking action, as needed to ensure that you keep all of the Promises described in paragraph 8(c)(2) through (7), and Cigna will not be required to post a bond in order to seek or obtain the injunction;

(b)Any breach or threatened breach of any of the Promises would cause irreparable injury to Cigna, and monetary damages alone would not provide an adequate remedy; and

(c)The remedies described in paragraph 10(a) are in addition to any other rights and remedies Cigna may have at law or in equity.

11.Consequences of a Violation: Designation of Cigna as Agent and Attorney-in-Fact for Inventions

You agree that:

(a)If Cigna Companies are unable to obtain your signature on any instruments needed to secure their rights in or relating to the Inventions pursuant to paragraph 8(c)(7)(A); then

(b)You hereby appoint Cigna companies and their duly authorized officers as your agents and attorneys in fact to act for and on your behalf to execute and file any documents and take other actions as may be necessary for Cigna companies to secure those rights.

12.          Agreeing to Assume Risks

Cigna, its stock plan administrator and its transfer agent will try to process your stock transaction requests in a timely manner; however, Cigna makes no promises or guarantees to you relating to the market price of the Shares or to the time it may take to act on your request to sell the Shares or deliver stock certificates.  By accepting this Strategic Performance Share grant:

(a)You acknowledge that the action you request may not be completed until several days (or in the case of delivery of stock certificates, several weeks) after you submit it.

(b)You agree to assume the risks, including the risk that the market price of the Shares may change, related to delays described in paragraph 12(a):

(1)	Between the time you ask for any Shares to be sold and the time your Shares are actually sold; and
(2)	Between the time you ask for stock certificates to be delivered to you or your broker and the time the certificates are delivered.

11

13.          Applicable Law

You understand and agree that:

(a)The terms and conditions of this Strategic Performance Share grant (including any Violation and the consequences of any Violation) and all determinations made under the Strategic Performance Share Grant Agreement, the Plan, and these Terms and Conditions will be interpreted under the laws of the State of Delaware, without regard to its conflict of laws rule;

(b)Any dispute about any of the Promises (described in paragraph 8(c)), if not resolved by agreement between you and Cigna, will be resolved exclusively in a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction over the dispute (collectively, “Delaware Courts”);

(c)Delaware is a convenient forum for resolving any dispute about the Promises; and

(d)You and Cigna consent to the exercise of personal jurisdiction over the parties by a Delaware Court in any dispute related to the Promises.

14.          Arbitration

You agree and understand that:

(a)Except as provided in paragraph 13, any dispute over any of the terms and conditions that apply to this Strategic Performance Share grant will be resolved exclusively under the Cigna Employment Dispute Arbitration Policy and its Rules and Procedures as may be in effect when the dispute arises;

(b)You are waiving your right to have those disputes decided by a judge or jury in a court of law, and instead you are agreeing to submit those disputes exclusively to mandatory and binding final arbitration;

(c)While you or Cigna may seek emergency, temporary or permanent injunctive relief from a court in accordance with applicable law, after the court has issued a decision about that relief, you and Cigna will submit the dispute to final and binding arbitration under the Cigna Employment Dispute Arbitration Policy; and

(d)This arbitration provision will not apply to any dispute related to the Promises.

15.          Miscellaneous

(a)If a court of competent jurisdiction determines that any provision of these Terms and Conditions is unenforceable as written, that provision will be enforceable to the maximum extent permitted by law and will be reformed by the court to make the provision enforceable in accordance with Cigna’s intent and applicable law.

(b)Cigna’s failure to enforce any provision of this Strategic Performance Share grant will not be interpreted as a waiver of its right to enforce that provision in the future.

16.Acceptance

If you disagree with any of these Terms and Conditions, including those in paragraphs 8, 9, 10 and 11 YOU MUST NOT ACCEPT THE STRATEGIC PERFORMANCE SHARE GRANT.  If you sign the Strategic Performance Share grant, or acknowledge your acceptance electronically or otherwise, you will be:

(a)Agreeing to all the terms and conditions of the Strategic Performance Share grant including the Inventions provision in paragraph 8(b) and the Promises in paragraph 8(c);

12

(b)Warranting and representing to Cigna that you are, and will remain, in full compliance with those terms and conditions;

(c)Authorizing Cigna to recover the Payment described in paragraph 9 and seek an injunction described in paragraph 10, if you engage in a Violation; and

(d)Appointing Cigna as your agent and attorney-in-fact to secure rights with respect to Inventions if unable to obtain your signature as described in paragraph 11.

[Year] SPS Grant Agreement including Terms and Conditions

13

EX-10.3

Exhibit 10.3

Form of Cigna Long-Term Incentive Plan:  Nonqualified Stock Option Grant Agreement

Cigna Corporation (“Cigna”) has granted you the option to purchase the number of shares of Cigna Common Stock set forth below in this Option Grant Agreement (“Option Grant”) under the Cigna Long-Term Incentive Plan (“Plan”).  The date of your Option Grant (“Grant Date”), the dates on which your Option Grant is scheduled to vest (“Vesting Dates”) and the date on which it is scheduled to expire (“Expiration Date”) are also indicated below. The award is subject to the provisions of the Plan and the Terms and Conditions below.

You should carefully read all the terms and conditions of this Option Grant and be sure you understand what they say and what your responsibilities and obligations are before you click on the ACCEPT button to acknowledge and agree to this Option Grant.

If you are not willing to agree to all of the Option Grant terms and conditions, do not accept the Option Grant and do not click the ACCEPT button for the Option Grant Acknowledgment and Agreement.  If you do not accept the Option Grant, you will not receive the benefits of the Option Grant.

If you do click on the ACCEPT button, you are accepting and agreeing to all of the terms and conditions of this Option Grant.

Participant:

Grant Type:

Plan Name:  Cigna Long-Term Incentive Plan

Grant Date:

Grant Expiration Date:

Total Options Granted:

Option Price:  (USD)

Vesting Schedule

Options Granted Vesting Date

You should also read the Plan Document and Key Contacts and Reference Materials document (attached to the Plan) and indicate that you have done so and agree to the terms by checking the appropriate box in the online grant acceptance process.  The Key Contacts and Reference Materials document contains information on how to get important stock award information (such as the Plan Prospectus, Tax Considerations and Cigna’s Securities Transactions and Insider Trading Policy) and whom to contact if you have questions.

Please be aware that the Cigna Securities Transactions and Insider Trading Policy places restrictions on your transactions in Cigna securities and requires certain Cigna employees to obtain advance permission from the Corporate Secretary before executing transactions in Cigna securities.

If you have questions about your award, please contact Cigna Shareholder Services by email at shareholderservices@cigna.com or by phone at 215.761.3516.

Important Notice:  Option Grant Acknowledgment and Agreement

By clicking on the ACCEPT button, I:

1.Acknowledge and represent to Cigna that I have:

a.received the Option Grant;

1

b.read and understand its terms and conditions, which include, among other things, restrictive covenants such as non-competition, customer and employee non-solicitation and non-disclosure provisions and  litigation cooperation and intellectual property assignment and assistance provisions; and

c.received answers to any questions I had about the Option Grant and its terms and conditions, including the restrictive covenants.

2.Understand and agree that:

a.Delaware law governs the interpretation and construction of the Option Grant; and

b.any controversy or proceeding arising out of or relating to the restrictive covenants in the Option Grant will be brought exclusively before a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction (collectively, “Delaware Courts”).

3.Consent to Delaware Courts exercising personal jurisdiction over me in any dispute about the restrictive covenants.

Scroll down for the TERMS AND CONDITIONS of the Option Grant.

2

TERMS AND CONDITIONS OF YOUR [Year] GRANT

OF A NONQUALIFIED STOCK OPTION

These Terms and Conditions are an important part of your grant of a nonqualified stock option (Option) from Cigna Corporation (Cigna).  The terms of your Option are in (a) the electronic Option Grant Agreement above, (b) these Terms and Conditions and (c) the applicable Plan provisions.

Certain words in this document with first letters capitalized are defined in the Option Grant Agreement above, these Terms and Conditions or Article 2 of the Plan. This grant is void if you are not an employee of Cigna or a Subsidiary (a Cigna company) on the Grant Date.

1.The Option

The Option gives you the right to buy a certain number of shares of Cigna Common Stock (Shares) during the Option Period (described in paragraph 2) at the Option Price.  Your Option Grant Agreement lists the number of Shares and your Option Price.  To buy the Shares at the Option Price, you must exercise the Option.

2.Option Period; Vesting

(a)You can exercise the Option only during the Option Period.  The Option becomes exercisable, or “vests,” on the first day of the Option Period and expires on the last day of the Option Period.

(b)The Option Period for [   ] of the Shares starts on [   ]; for another [    ] of the Shares on [    ]; and for [    ] of the Shares on [   ].  This is the vesting schedule for the Option.

(c)The Option Period for all the Shares ends, and the Option will expire, the earlier of (1) 5:00 p.m. Philadelphia time on the Expiration Date or (2) upon your Termination of Employment as described under Early Expiration in paragraph 4.

3.Early Vesting

The Option may vest earlier than the dates listed under paragraph 2(b) as described here.  If your Termination of Employment occurs before the Option vests under paragraph 2, the Option will vest on your Termination of Employment date, but only if your Termination of Employment is:

(a)Because of your death, Disability, Early Retirement or Retirement and you have not received or will not be receiving severance pay from any Cigna company (whether under any severance benefit plan or any contract, agreement or arrangement); or

(b)Upon a Change of Control.

4.Early Expiration upon Termination of Employment; Exceptions

(a)Upon your Termination of Employment (other than a Termination for Cause), the Option will expire on the earlier of the Expiration Date or ninety (90) days after your Termination of Employment date unless one of the exceptions described in paragraph 4(b) through (e) applies.

(b)If (1) your Termination of Employment is because of your death, Disability or Retirement, and (2) you will not be receiving severance pay from any Cigna company (whether under any severance benefit plan or any contract, agreement or arrangement), then the Option will expire at 5:00 p.m. Philadelphia time on the Expiration Date.

(c)If your Termination of Employment is because of your Early Retirement, and you will not be receiving severance pay from any Cigna company (whether under any severance benefit plan or any contract, agreement or arrangement), the Option will expire at 5:00 p.m. Philadelphia time on:

3

(1)The earlier of the Expiration Date or the third anniversary of your Termination of Employment date; or

(2)The Expiration Date if, within six months before your Termination of Employment date, you were an Executive Officer subject to the requirements of Section 16(a) of the Securities Exchange Act of 1934 (“Executive Officer”).

(d)If your Termination of Employment is Upon a Change of Control (of Cigna Corporation), the Option will expire on the earlier of the Expiration Date or ninety (90) days after your Termination of Employment date.

(e)The Option will expire immediately upon your Termination for Cause.

5.Exercising the Option; Tax Withholding

(a)Cigna may limit your rights to exercise the Option and to sell any Shares you acquire by exercising the Option.  Your rights are subject to the terms of Cigna’s Securities Transactions and Insider Trading Policy, and Cigna reserves the right, for any reason at any time, to suspend or delay action on any request you make to exercise the Option or sell the Shares.  To comply with legal requirements, Cigna may restrict the method by which you exercise the Option.

(b)If, because of limitations imposed by applicable law, you cannot exercise the Option before it expires, then the Option will not expire on the date described in paragraph 4.  Instead, the Option Period will be extended temporarily until the earlier of (1) ten business days after the first date on which the Option again becomes exercisable without the limitations or (2) 5:00 p.m. Philadelphia time on the Expiration Date.

(c)To exercise all or part of the Option, you must (1) complete and submit any required Option exercise form or electronic exercise instructions and (2) pay the Option Price and any required tax withholding.

(d)You may pay the Option Price with cash.  If you pay with cash, you must also pay any applicable withholding tax liability in cash before Shares will be deposited in your Stock Account or delivered to you.

(e)If you are a Cigna company employee when you exercise the Option, you may pay the Option Price with Shares that are in your Stock Account if:

(1)you first purchased the shares on the open market; or

(2)at least six months have elapsed after the:

(A)grant date, if you received the shares as a grant of unrestricted Shares;

(B)vesting date, if you received them as a grant of Restricted Stock; or

(C)purchase date, if you bought them through a previous option exercise.

You will not be allowed to pay the Option Price with Shares if Cigna in its sole discretion determines that it would risk adverse tax or accounting consequences as a result. If you are not a Cigna company employee when you exercise the Option, or if your beneficiary or estate exercises the Option, the Option Price cannot be paid in shares of stock.

(f)If you pay the Option Price in Shares:

(1)You must exercise the Option for at least 50 Shares.

If there are not at least 50 Shares underlying the Option, you must exercise the Option for all the Shares.

(2)You must pay any applicable tax-withholding obligation.

4

Cigna reserves the right to withhold from the Shares you purchase enough Shares to meet all or part of any applicable tax-withholding obligation.

If you are an Executive Officer when you exercise the Option, you may satisfy part of the withholding obligation by remitting to Cigna Shares you have owned for at least six months as of the date the withholding obligation arises.

(g)You may pay the Option Price through a cashless exercise of the Option.  Cigna reserves the right to change the rules that apply to cashless exercises, or end your ability to do a cashless exercise, at any time.

6.Book-Entry Shares

Cigna (or a custodian appointed by Cigna) will hold any Shares you, your beneficiary or estate acquire upon exercise of the Option in book-entry form in a Stock Account.  That is, a record of Share ownership will be kept electronically, and you will not risk losing any Share certificates.  A Share certificate will be issued to you only if you ask for one, but not if you have engaged in a Violation (described in paragraph 7(c)).

7.Conditions of Grant

(a)By accepting the grant, you are agreeing:

(1)to the Inventions provision in paragraph 7(b); and

(2)not to engage in any Violation described in paragraph 7(c)

You understand and agree that your agreement not to engage in any Violation and to the Inventions provision are a material part of the inducement for Cigna’s granting you the Option and essential pre-conditions to your eligibility to exercise any rights associated with the Option and retain any benefit from exercising the Option.

(b)Inventions

(1)You hereby assign and promise to assign to Cigna companies or their designee, all your right, title, and interest in and to any and all current and future Inventions.  You acknowledge that all original works of authorship which you make (whether alone or jointly with others) within the scope of your Cigna company employment and which are protectable by copyright are “works made for hire,” as defined in the United States Copyright Act.

(2)You agree to (i) maintain and make available adequate current records, including electronic records, notes, sketches and drawings, of all Inventions you make, and (ii) disclose such Inventions in writing upon request. These records will remain the property of Cigna companies.

(3)If in the course of your Cigna company employment, you incorporate a Prior Invention into any Cigna company work product, you grant Cigna companies a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to use the Prior Invention as part of or in connection with the work product. Within 45 days after the date of this grant, you agree to notify Cigna Shareholder Services (shareholderservices@Cigna.com) of any Prior Inventions that you are not assigning under this paragraph 7(b).

(4)“Inventions” means any and all inventions, original works of authorship, developments, concepts, sales methods, improvements, trade secrets, or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you have or will solely or jointly conceive, develop, reduce to practice, or fix during your Cigna company employment.

(5)“Prior Inventions” means all inventions, original works of authorship, developments,

5

concepts, sales methods, improvements, trade secrets or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you conceived, developed, reduced to practice or fixed before your Cigna company employment and which belong to you.

(c)Violation

You will engage in a “Violation” if, directly or indirectly, you engage in any misconduct described in paragraph 7(c)(1) below or you break any of the “Promises” in paragraphs 7(c)(2) through (7) below:

(1)Misconduct:

(A)You have a Termination of Employment initiated by a Cigna company because of your misconduct, as that term is defined in Cigna’s Code of Ethics, Standards of Conduct or other employment policies.

(B)You do anything else while an employee of any Cigna company that is not discovered by the company until after your Termination of Employment and that would, if you had still been employed at the time of the discovery, be reason for your Termination of Employment for misconduct, as described above.

(2)Promise Not To Compete against Cigna Companies:

(A)If you are in Career Band 6 or higher on your Termination of Employment date:

You Promise not to become employed by, work as a consultant or independent contractor for, or in any way render services or assistance to any Cigna Competitor (defined in paragraph 7(c)(2)(C) below) at any time during the period that starts on the Grant Date and ends 12 months after your Termination of Employment.

You acknowledge and agree that:

(i)Cigna’s business competes on a global basis;

(ii)Cigna’s sales and marketing plans are for continued expansion throughout the United States of America and globally;

(iii)You have had access to and received Confidential Information (described in paragraph 7(c)(5)(B) below); and

(iv)The time restrictions and global nature of this non-competition restriction are reasonable and necessary to protect Cigna’s business and Confidential Information.

(B)If you are in Career Band 5 or below on your Termination of Employment date:

You Promise not to become employed by, work as a consultant or independent contractor for, or in any way render services or assistance to any Cigna Competitor (defined in paragraph 7(c)(2)(C) below) at any time during the period that starts on the Grant Date and ends 12 months after your Termination of Employment, if that work is similar to, and within the same geographic area as, the work you performed, or for which you had responsibility, at any Cigna company at any time during the six-month period that ends on your Termination of Employment date.

6

For example:

(i)If you are a sales employee and your sales territory at any time during your last six months of Cigna company employment is Pennsylvania, New Jersey, and New York, this paragraph 7(c)(2)(B) would apply to you only if you work in a sales position for a Cigna Competitor and only to the extent your new sales territory is Pennsylvania, New Jersey, and/or New York;

(ii)If you are an underwriter with nationwide responsibilities at any time during your last six months of Cigna company employment, and you seek a job with a Cigna Competitor as an underwriter, the restrictions in paragraph 7(c)(2)(B) would be nationwide in scope; or

(iii)If you work in a particular division or segment of Cigna, you would not be permitted to work in a similar division or segment for a Cigna Competitor where the work you are expected to perform for the competitor is similar to the work you performed for any Cigna company.

You acknowledge and agree that you have had access to and received Confidential Information (described in paragraph 7(c)(5)(B) below) and the above time and geographic restrictions are reasonable and necessary to protect Cigna’s business and Confidential Information.

(C)“Cigna Competitor” means any business that competes directly or indirectly with any Cigna company’s product or service.

(D)The Promise in paragraph 7(c)(2) not to compete against Cigna companies after  Termination of Employment will not apply and Cigna will not enforce it with respect to Cigna company employment in California.

(3)Promise Not To Solicit or Hire Cigna Company Employees:

(A)You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you will not:

(i)Solicit any employee of any Cigna company to terminate his/her employment with, or otherwise cease his/her relationship, contractual or otherwise, with that Cigna company; or

(ii)Hire any Cigna company employee.

(B)This paragraph 7(c)(3) will not apply to applications for employment submitted voluntarily by any Cigna employee, in response to a general advertisement or otherwise, so long as neither you, nor anyone acting on your behalf or in response to information provided by you, otherwise Solicits the employees to leave Cigna.

(C)To “Solicit” means to entice, encourage, persuade, or solicit, or to attempt to entice, encourage, persuade or solicit.

(4)Promise Not To Solicit Cigna Company Customers:

(A)You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you will not:

(i)Solicit any Cigna company customer to end an existing relationship, contractual or otherwise, with that Cigna company;

(ii)Solicit any Cigna company customer to reduce the volume of their business dealings with Cigna; or

7

(iii)Solicit any potential Cigna company customer to enter into any business arrangements with you or any business which you may become employed by, or affiliated in any way with, after leaving any Cigna company, if such business arrangements would compete in any way with any business that Cigna company has conducted, or has been planning to conduct, during the 12-month period ending on the date of the Violation.

(B)The Promise in paragraph 7(c)(4)(A) above applies only to a customer or potential customer with whom you had any Material Contact while employed by any Cigna company.  “Material Contact” means you:

(i)Had business dealings with the customer on behalf of any Cigna company within the three-year period ending on the date of the Solicitation;

(ii)Were responsible for supervising or coordinating the dealings between any Cigna company and the customer or potential customer anytime during the three-year period ending on the date of the Solicitation; or

(iii)Obtained, at any time, trade secrets or confidential information about a customer or potential customer with whom you had contact as a result of your employment by any Cigna company.

(C)“Solicit” is defined in paragraph 7(c)(3)(C).

(D)The Promise in paragraph 7(c)(4) not to solicit Cigna company customers after  Termination of Employment will not apply and Cigna will not enforce it with respect to Cigna company employment in California unless the activity involves the use of Confidential Information.

(5)Promise Not To Disclose Cigna Companies’ Confidential Information:

(A)You Promise not to disclose any Confidential Information to any third-party at any time, whether during or after your employment, without the prior written consent of Cigna (except to the extent required by an order of a court having competent jurisdiction or a properly issued subpoena) unless that Confidential Information was previously disclosed publicly by Cigna or has become public knowledge (other than by your disclosure). Nothing in this Confidentiality provision prohibits you or your counsel from initiating communications directly with, or responding to any inquiry from, or providing testimony before any self-regulatory organization or any state or federal regulatory authority. In the event that you are required to disclose Confidential Information pursuant to a subpoena or other law or regulation, you shall notify Cigna promptly upon learning that you have been subpoenaed or are otherwise required or compelled to divulge Confidential Information.

(B)“Confidential Information” means any Cigna company trade secrets, confidential information, or proprietary materials, including but not limited to customer lists, financial records, marketing plans and sales plans.

(6)Promise to Cooperate With Cigna in Investigations or Litigation:

(A)You Promise that, at any time after your Termination of Employment, you will cooperate with Cigna in (i) all investigations of any kind, (ii) helping to prepare and review documents and meeting with Cigna attorneys, and (iii) providing truthful testimony as a witness or a declarant during discovery and/or trial in connection with any present or future court, administrative, agency, or arbitration proceeding involving any Cigna company and with respect to which you have relevant information.

8

(B)Cigna agrees that it will reimburse you, upon production of appropriate receipts and in accordance with Cigna’s then existing Business Travel Reimbursement Policy, the reasonable business expenses (including air transportation, hotel, and similar expenses) incurred by you in connection with such assistance.  You must present to Cigna for reimbursement all receipts for those expenses within 45 days after you incur the expenses.

(7)Promise to Assist with Patent and Copyright Registrations:

(A)You Promise that, during your Cigna company employment and after your Termination of Employment, you will assist Cigna companies, should they request and at Cigna’s expense, to secure their rights (including any copyrights, patents, trademarks or other intellectual property rights) in or relating to the Inventions in any and all countries, including by:

(i)	disclosing to Cigna Companies all pertinent information and data; and
(ii)	executing all applications, assignments or other instruments necessary to apply for and obtain these rights and assign them to Cigna companies.

(d)(1)If you were an Executive Officer at any time during the 24-month period before the date of the Violation, the People Resources Committee will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment (described in paragraph 8) and to impose conditions on any waiver.

(2)Otherwise, Cigna’s Senior Human Resources Officer, or his or her designee, will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment and to impose conditions on any waiver.

(3)Determinations of the People Resources Committee, Cigna’s Senior Human Resources Officer, or his or her designee, will be final and binding on all parties.

8.Consequences of a Violation: Payment to Cigna

Important: This paragraph 8 is not Cigna’s only remedy for a Violation.  Cigna may seek any additional legal or equitable remedy, including an injunction described in paragraph 9, for a Violation.

(a)If you engage in any Violation at any time, Cigna will cancel any part of the Option you have not yet exercised.

(b)You must immediately make the Payment described in paragraph 8(c) to Cigna in the manner described in paragraph 8(d) if:

(1)You engage in a Violation described in paragraph 7(c)(2) (compete against Cigna), 7(c)(3) (Solicit or hire Cigna employees) or 7(c)(4) (Solicit Cigna customers), either while you are a Cigna company employee or within 12 months after your Termination of Employment; or

(2)You engage in a Violation described in paragraph 7(c)(1) (misconduct), 7(c)(5) (disclose Confidential Information), 7(c)(6) (fail to cooperate), or 7(c)(7) (fail to assist) at any time.

(c)The Payment requirement applies only to the part of the Option, if any, that you exercise within the 24-month period ending on the date of the Violation.  “Payment” means the amount equal to:

(1)the number of Shares you acquire when you exercise the Option;

multiplied by

9

(2)the excess of (A) the Fair Market Value on the date you exercise the Option over (B) the Option Price;

plus

(3)the total amount of all dividends, if any, paid on those Shares through the date of the Payment.

(d)Cigna will recover the Payment from you by any means permitted by applicable law, at the sole discretion of Cigna management, including but not limited to any or all of the following methods:

(1)If you have any Shares in a Stock Account or in any other account in book-entry form when a Violation occurs, Cigna will take back from you the whole number of Shares that has a total Fair Market Value as of the date of the Violation up to, but not more than, the Payment amount.

(2)Cigna will, to the extent permitted by applicable law, reduce:

(A)The amount of any payments that any Cigna company owes you for any reason (including without limit any payments owed to you under any nonqualified retirement, deferred compensation or other plan or arrangement) by

(B)The Payment amount.

This reduction will not occur until the date a future payment to you is due.

(3)Cigna will send you a written notice and demand for all or part of any Payment amount.  Within 30 days after you receive that notice and demand, you must make the Payment to Cigna.

9.Consequences of a Violation: Injunction

You agree that:

(a)Cigna will be entitled to ask a court of competent jurisdiction to issue an order (an injunction) that requires you to take action and/or that prohibits you from taking action, as needed to ensure that you keep all of the Promises described in paragraph 7(c)(2) through (7), and Cigna will not be required to post a bond in order to seek or obtain the injunction;

(b)Any breach or threatened breach of any of the Promises would cause irreparable injury to Cigna, and monetary damages alone would not provide an adequate remedy; and

(c)The remedies described in paragraph 9(a) are in addition to any other rights and remedies Cigna may have at law or in equity.

10.Consequences of a Violation: Designation of Cigna as Agent and Attorney-in-Fact for Inventions

You agree that:

(a)If Cigna Companies are unable to obtain your signature on any instruments needed to secure their rights in or relating to the Inventions pursuant to paragraph 7(c)(7)(A); then

(b)You hereby appoint Cigna companies and their duly authorized officers as your agents and attorneys in fact to act for and on your behalf to execute and file any documents and take other actions as may be necessary for Cigna companies to secure those rights.

11.Agreeing to Assume Risks

Cigna, its stock plan administrator and its transfer agent will try to process your stock transaction requests in a timely manner; however, Cigna makes no promises or guarantees to you relating to the market price

10

of the Shares or to the time it may take to act on your request to exercise the Option, sell the Shares or deliver stock certificates.  By accepting this Option grant:

(a)You acknowledge that the action you request may not be completed until several days (or in the case of delivery of stock certificates, several weeks) after you submit it.

(b)You agree to assume the risks, including the risk that the market price of the Shares may change, related to delays described in paragraph 11(a):

(1)	Between the time you submit an Option exercise form and the time your Option is actually exercised;
(2)	Between the time you ask for any Shares to be sold and the time your Shares are actually sold; and
(3)	Between the time you ask for stock certificates to be delivered to you or your broker and the time the certificates are delivered.

12.Applicable Law

You understand and agree that:

(a)The terms and conditions of this Option grant (including any Violation and the consequences of any Violation) and all determinations made under the Option Grant Agreement, the Plan, and these Terms and Conditions will be interpreted under the laws of the State of Delaware, without regard to its conflict of laws rule;

(b)Any dispute about any of the Promises (described in paragraph 7(c)), if not resolved by agreement between you and Cigna, will be resolved exclusively in a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction over the dispute (collectively, “Delaware Courts”);

(c)Delaware is a convenient forum for resolving any dispute about the Promises; and

(d)You and Cigna consent to the exercise of personal jurisdiction over the parties by a Delaware Court in any dispute related to the Promises.

11

13.Arbitration

You agree and understand that:

(a)Except as provided in paragraph 12, any dispute over any of the terms and conditions that apply to this Option grant will be resolved exclusively under the Cigna Employment Dispute Arbitration Policy and its Rules and Procedures as may be in effect when the dispute arises;

(b)You are waiving your right to have those disputes decided by a judge or jury in a court of law, and instead you are agreeing to submit those disputes exclusively to mandatory and binding final arbitration;

(c)While you or Cigna may seek emergency, temporary or permanent injunctive relief from a court in accordance with applicable law, after the court has issued a decision about that relief, you and Cigna will submit the dispute to final and binding arbitration under the Cigna Employment Dispute Arbitration Policy; and

(d)This arbitration provision will not apply to any dispute related to the Promises.

14.Miscellaneous

(a)If a court of competent jurisdiction determines that any provision of these Terms and Conditions is unenforceable as written, that provision will be enforceable to the maximum extent permitted by law and will be reformed by the court to make the provision enforceable in accordance with Cigna’s intent and applicable law.

(b)Cigna’s failure to enforce any provision of this Option grant will not be interpreted as a waiver of its right to enforce that provision in the future.

15.Acceptance

If you disagree with any of these Terms and Conditions, including those in paragraphs 7, 8 9, and 10, YOU MUST NOT ACCEPT THE OPTION GRANT.  If you sign the Option grant, or acknowledge your acceptance electronically or otherwise, you will be:

(a)Agreeing to all the terms and conditions of the Option grant including the Inventions provision in paragraph 7(b) and the Promises in paragraph 7(c);

(b)Warranting and representing to Cigna that you are, and will remain, in full compliance with those terms and conditions;

(c)Authorizing Cigna to recover the Payment described in paragraph 8 and seek an injunction described in paragraph 9, if you engage in a Violation; and

(d)Appointing Cigna as your agent and attorney-in-fact to secure rights with respect to Inventions if unable to obtain your signature as described in paragraph 10.

[Year] Option Grant Agreement including Terms and Conditions

12

EX-10.4

Exhibit 10.4

Form of Cigna Long-Term Incentive Plan:  Restricted Stock Grant Agreement

Cigna Corporation (“Cigna”) has granted you the number of shares of restricted stock of Cigna set forth below in this Restricted Stock Grant Agreement (“Restricted Stock Grant” or “Grant”) under the Cigna Long-Term Incentive Plan (“Plan”).  The date of your Restricted Stock Grant (“Grant Date”) and the date on which your Grant is scheduled to vest (“Vesting Date”) are also indicated below. The award is subject to the provisions of the Plan and the Terms and Conditions below.

You should carefully read all the terms and conditions of this Restricted Stock Grant and be sure you understand what they say and what your responsibilities and obligations are before you click on the ACCEPT button to acknowledge and agree to this Grant.

If you are not willing to agree to all of the Grant terms and conditions, do not accept the Grant and do not click the ACCEPT button for the Restricted Stock Grant Acknowledgment and Agreement.  If you do not accept the Grant, you will not receive the benefits of the Grant.

If you do click on the ACCEPT button, you are accepting and agreeing to all of the terms and conditions of this Restricted Stock Grant.

Participant:

Grant Type:

Plan Name:  Cigna Long-Term Incentive Plan

Grant Date:

Total Granted:

Grant Price:   (USD)

Vesting Schedule

Shares Granted Vesting Date

You should also read the Plan Document and Key Contacts and Reference Materials document (attached to the Plan) and indicate that you have done so and agree to the terms by checking the appropriate box in the online grant acceptance process.  The Key Contacts and Reference Materials document contains information on how to get important stock award information (such as the Plan Prospectus, Tax Considerations and Cigna’s Securities Transactions and Insider Trading Policy) and whom to contact if you have questions.

Please be aware that the Cigna Securities Transactions and Insider Trading Policy places restrictions on your transactions in Cigna securities and requires certain Cigna employees to obtain advance permission from the Corporate Secretary before executing transactions in Cigna securities.

If you have questions about your award, please contact Cigna Shareholder Services by email at shareholderservices@cigna.com or by phone at 215.761.3516.

1

Important Notice:  Restricted Stock Grant Acknowledgment and Agreement

By clicking on the ACCEPT button, I:

1.Acknowledge and represent to Cigna that I have:

a.received the Restricted Stock Grant;

b.read and understand its terms and conditions, which include, among other things, restrictive covenants such as non-competition, customer and employee non-solicitation and non-disclosure provisions and  litigation cooperation and intellectual property assignment and assistance provisions; and

c.received answers to any questions I had about the Grant and its terms and conditions, including the restrictive covenants.

2.Understand and agree that:

a.Delaware law governs the interpretation and construction of the Grant; and

b.any controversy or proceeding arising out of or relating to the restrictive covenants in the Grant will be brought exclusively before a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction (collectively, “Delaware Courts”).

3.Consent to Delaware Courts exercising personal jurisdiction over me in any dispute about the restrictive covenants.

Scroll down for the TERMS AND CONDITIONS of the Restricted Stock Grant.

2

TERMS AND CONDITIONS OF YOUR [Year]

RESTRICTED STOCK GRANT

These Terms and Conditions are an important part of your grant of Restricted Stock from Cigna Corporation (Cigna).  The terms of your Restricted Stock grant are in: (a) the electronic Restricted Stock Grant Agreement above, (b) these Terms and Conditions, and (c) the applicable Plan provisions.

Certain words in this document with first letters capitalized are defined in the Restricted Stock Grant Agreement above, these Terms and Conditions or Article 2 of the Plan.  This grant is void if you are not an employee of Cigna or a Subsidiary (a Cigna company) on the Grant Date.

1.Restricted Stock; Restrictions

Shares of Restricted Stock (Shares) are regular shares of Cigna Common Stock, but they are subject to certain Restrictions.  The Restrictions are:

(a)You cannot sell or transfer the Shares to anyone during the Restricted Period; and

(b)Unless an exception applies, you will forfeit (lose your right to) the Shares if you have a Termination of Employment during the Restricted Period.

Article 7 of the Plan describes these Restrictions in more detail.  In addition, you must also comply with all the other terms and conditions of this grant, including those contained in this document.

2.Restricted Period; Vesting

The Restricted Period starts on the Grant Date and ends on [    ].  The Restrictions on the Shares will end (your Shares will vest) on [    ] only if you remain continuously employed by a Cigna company from the Grant Date to [     ] and comply with all the terms and conditions of this grant, including those contained in this document.

Your vesting date may be earlier (see paragraph 3).

3.Early Vesting

In certain situations your vesting date may be earlier than the Vesting Date described in paragraph 2:

(a)The Shares will vest upon your Termination of Employment if it is Upon a Change of Control (of Cigna Corporation) or due to your death or Disability.

(b)The Shares may vest upon your Termination of Employment if:

(1)It is due to your Early Retirement or Retirement; and

(2)The People Resources Committee or its designee (including Cigna’s senior human resources officer) approves the early vesting before your Termination of Employment.

If you want to be considered for early vesting when you retire, you must ask your manager or human resources representative far enough in advance of your retirement so there is time to process your request.

3

4.Voting Rights; Dividends

(a)You have the right to vote the Shares.  If you forfeit a Share, you will also forfeit the right to vote the Share.

(b)You have the right to receive dividends on the Shares.  Dividends paid on the Shares during the Restricted Period will be held by Cigna.  Subject to the forfeiture provisions of paragraph 4(c), your right to receive accumulated dividends on a Share will vest on the scheduled Vesting Date for the Share described in paragraph 2 (Scheduled Vesting Date).  Once a Share vests, your right to future dividends on the Share, and the method of payment, will be the same as for any other Cigna shareholder.

(c)If you forfeit a Share, you will also forfeit the right to any accumulated and future dividends related to the Share.  Even if you do not forfeit a Share, you will forfeit the right to any accumulated dividends on the Share if:

(1)You have a Termination of Employment before the Scheduled Vesting Date for a Share (even if the Share vests under paragraph 3);

(2)The Scheduled Vesting Date for a Share occurs before the Share vests (because vesting is delayed); or

(3)You are on a leave of absence when the Share vests.

(d)Vested accumulated dividends, less applicable taxes withheld, will be paid to you in a lump sum within 70 days after the Scheduled Vesting Date.  Cigna will not pay any interest on the accumulated dividends.

5.Taxes at Vesting

When the Shares vest, you must satisfy any required tax withholding obligation.  Cigna reserves the right to withhold enough newly-vested Shares to cover all or part of any applicable tax withholding.  However, if section 83(b) of the U.S. Internal Revenue Code of 1986, as amended, applies to you and you make a timely election under that provision, you must make an immediate cash payment to satisfy any required tax withholding obligation.

6.Book-Entry Shares; Sale of Shares

(a)Cigna (or a custodian appointed by Cigna) will hold your Shares before and after vesting in book-entry form in a Stock Account.  That is, a record of your Share ownership will be kept electronically, and you will not risk losing any Share certificates.  A certificate for vested Shares will be issued to you only if you ask for one, but not if you have engaged in a Violation (described in paragraph 7(c)).

(b)You may generally sell or transfer vested Shares at any time, but your right to sell the Shares after they vest may be limited by Cigna.  This right is subject to the terms of Cigna’s Securities Transactions and Insider Trading Policy, and Cigna reserves the right, for any reason at any time, to suspend or delay action on any request you make to sell the Shares.

7.Conditions of Grant

(a)By accepting the grant, you are agreeing:

(1)to the Inventions provision in paragraph 7(b); and

(2)not to engage in any Violation described in paragraph 7(c).

4

You understand and agree that your agreement to the Inventions provision and not to engage in any Violation are a material part of the inducement for Cigna’s granting you the Shares and essential pre-conditions to your eligibility to exercise any rights associated with the Shares and retain any benefit from the vesting of the Shares.

(b)Inventions

(1)You hereby assign and promise to assign to Cigna companies or their designee, all your right, title, and interest in and to any and all current and future Inventions.  You acknowledge that all original works of authorship which you make (whether alone or jointly with others) within the scope of your Cigna company employment and which are protectable by copyright are “works made for hire,” as defined in the United States Copyright Act.

(2)You agree to (i) maintain and make available adequate current records, including electronic records, notes, sketches and drawings, of all Inventions you make, and (ii) disclose such Inventions in writing upon request. These records will remain the property of Cigna companies.

(3)If in the course of your Cigna company employment, you incorporate a Prior Invention into any Cigna company work product, you grant Cigna companies a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to use the Prior Invention as part of or in connection with the work product. Within 45 days after the date of this grant, you agree to notify Cigna Shareholder Services (shareholderservices@Cigna.com) of any Prior Inventions that you are not assigning under this paragraph 7(b).

(4)“Inventions” means any and all inventions, original works of authorship, developments, concepts, sales methods, improvements, trade secrets, or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you have or will solely or jointly conceive, develop, reduce to practice, or fix during your Cigna company employment.

(5)“Prior Inventions” means all inventions, original works of authorship, developments, concepts, sales methods, improvements, trade secrets or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you conceived, developed, reduced to practice or fixed before your Cigna company employment and which belong to you.

(c)Violation

You will engage in a “Violation” if, directly or indirectly, you engage in any misconduct described in paragraph 7(c)(1) below or you break any of the “Promises” in paragraphs 7(c)(2) through (7) below:

(1)Misconduct:

(A)You have a Termination of Employment initiated by a Cigna company because of your misconduct, as that term is defined in Cigna’s Code of Ethics, Standards of Conduct or other employment policies.

(B)You do anything else while an employee of any Cigna company that is not discovered by the company until after your Termination of Employment

5

and that would, if you had still been employed at the time of the discovery, be reason for your Termination of Employment for misconduct, as described above.

(2)Promise Not To Compete against Cigna Companies:

(A)If you are in Career Band 6 or higher on your Termination of Employment date:

You Promise not to become employed by, work as a consultant or independent contractor for, or in any way render services or assistance to any Cigna Competitor (defined in paragraph 7(c)(2)(C) below) at any time during the period that starts on the Grant Date and ends 12 months after your Termination of Employment.

You acknowledge and agree that:

(i)Cigna’s business competes on a global basis;

(ii)Cigna’s sales and marketing plans are for continued expansion throughout the United States of America and globally;

(iii)You have had access to and received Confidential Information (described in paragraph 7(c)(5)(B) below); and

(iv)The time restrictions and global nature of this non-competition restriction are reasonable and necessary to protect Cigna’s business and Confidential Information.

(B)If you are in Career Band 5 or below on your Termination of Employment date:

You Promise not to become employed by, work as a consultant or independent contractor for, or in any way render services or assistance to any Cigna Competitor (defined in paragraph 7(c)(2)(C) below) at any time during the period that starts on the Grant Date and ends 12 months after your Termination of Employment, if that work is similar to, and within the same geographic area as, the work you performed, or for which you had responsibility, at any Cigna company at any time during the six-month period that ends on your Termination of Employment date.

For example:

(i)If you are a sales employee and your sales territory at any time during your last six months of Cigna company employment is Pennsylvania, New Jersey, and New York, this paragraph 7(c)(2)(B) would apply to you only if you work in a sales position for a Cigna Competitor and only to the extent your new sales territory is Pennsylvania, New Jersey, and/or New York;

(ii)If you are an underwriter with nationwide responsibilities at any time during your last six months of Cigna company employment, and you seek a job with a Cigna Competitor as an underwriter, the restrictions in paragraph 7(c)(2)(B) would be nationwide in scope; or

(iii)If you work in a particular division or segment of Cigna, you would not be permitted to work in a similar division or segment

6

for a Cigna Competitor where the work you are expected to perform for the competitor is similar to the work you performed for any Cigna company.

You acknowledge and agree that you have had access to and received Confidential Information (described in paragraph 7(c)(5)(B) below) and the above time and geographic restrictions are reasonable and necessary to protect Cigna’s business and Confidential Information.

(C)“Cigna Competitor” means any business that competes directly or indirectly with any Cigna company’s product or service.

(D)The Promise in paragraph 7(c)(2) not to compete against Cigna companies after  Termination of Employment will not apply and Cigna will not enforce it with respect to Cigna company employment in California.

(3)Promise Not To Solicit or Hire Cigna Company Employees:

(A)You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you will not:

(i)Solicit any employee of any Cigna company to terminate his/her employment with, or otherwise cease his/her relationship, contractual or otherwise, with that Cigna company; or

(ii)Hire any Cigna company employee.

(B)This paragraph 7(c)(3) will not apply to applications for employment submitted voluntarily by any Cigna employee, in response to a general advertisement or otherwise, so long as neither you, nor anyone acting on your behalf or in response to information provided by you, otherwise Solicits the employees to leave Cigna.

(C)To “Solicit” means to entice, encourage, persuade, or solicit, or to attempt to entice, encourage, persuade or solicit.

(4)Promise Not To Solicit Cigna Company Customers:

(A)You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you will not:

(i)Solicit any Cigna company customer to end an existing relationship, contractual or otherwise, with that Cigna company;

(ii)Solicit any Cigna company customer to reduce the volume of their business dealings with Cigna; or

(iii)Solicit any potential Cigna company customer to enter into any business arrangements with you or any business which you may become employed by, or affiliated in any way with, after leaving any Cigna company, if such business arrangements would compete in any way with any business that Cigna company has conducted, or has been planning to conduct, during the 12-month period ending on the date of the Violation.

7

 (B)The Promise in paragraph 7(c)(4)(A) above applies only to a customer or potential customer with whom you had any Material Contact while employed by any Cigna company.  “Material Contact” means you:

(i)Had business dealings with the customer on behalf of any Cigna company within the three-year period ending on the date of the Solicitation;

(ii)Were responsible for supervising or coordinating the dealings between any Cigna company and the customer or potential customer anytime during the three-year period ending on the date of the Solicitation; or

(iii)Obtained, at any time, trade secrets or confidential information about a customer or potential customer with whom you had contact as a result of your employment by any Cigna company.

(C)“Solicit” is defined in paragraph 7(c)(3)(C).

(D)The Promise in paragraph 7(c)(4) not to solicit Cigna company customers after  Termination of Employment will not apply and Cigna will not enforce it with respect to Cigna company employment in California unless the activity involves the use of Confidential Information.

(5)Promise Not To Disclose Cigna Companies’ Confidential Information:

(A)You Promise not to disclose any Confidential Information to any third-party at any time, whether during or after your employment, without the prior written consent of Cigna (except to the extent required by an order of a court having competent jurisdiction or a properly issued subpoena) unless that Confidential Information was previously disclosed publicly by Cigna or has become public knowledge (other than by your disclosure). Nothing in this Confidentiality provision prohibits you or your counsel from initiating communications directly with, or responding to any inquiry from, or providing testimony before any self-regulatory organization or any state or federal regulatory authority. In the event that you are required to disclose Confidential Information pursuant to a subpoena or other law or regulation, you shall notify Cigna promptly upon learning that you have been subpoenaed or are otherwise required or compelled to divulge Confidential Information.

(B)“Confidential Information” means any Cigna company trade secrets, confidential information, or proprietary materials, including but not limited to customer lists, financial records, marketing plans and sales plans.

(6)Promise to Cooperate With Cigna in Investigations or Litigation:

(A)You Promise that, at any time after your Termination of Employment, you will cooperate with Cigna in (i) all investigations of any kind, (ii) helping to prepare and review documents and meeting with Cigna attorneys, and (iii) providing truthful testimony as a witness or a declarant during discovery and/or trial in connection with any present or future court, administrative, agency, or arbitration proceeding involving any Cigna company and with respect to which you have relevant information.

(B)Cigna agrees that it will reimburse you, upon production of appropriate receipts and in accordance with Cigna’s then existing Business Travel

8

Reimbursement Policy, the reasonable business expenses (including air transportation, hotel, and similar expenses) incurred by you in connection with such assistance.  You must present to Cigna for reimbursement all receipts for those expenses within 45 days after you incur the expenses.

(7)Promise to Assist with Patent and Copyright Registrations:

(A)You Promise that, during your Cigna company employment and after your Termination of Employment, you will assist Cigna companies, should they request and at Cigna’s expense, to secure their rights (including any copyrights, patents, trademarks or other intellectual property rights) in or relating to the Inventions in any and all countries, including by:

(i)	disclosing to Cigna Companies all pertinent information and data; and
(ii)	executing all applications, assignments or other instruments necessary to apply for and obtain these rights and assign them to Cigna companies.

(d)(1)If you were an Executive Officer at any time during the 24-month period before the date of the Violation, the People Resources Committee will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment (described in paragraph 8) and to impose conditions on any waiver.

(2)Otherwise, Cigna’s Senior Human Resources Officer, or his or her designee, will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment and to impose conditions on any waiver.

(3)Determinations of the People Resources Committee, Cigna’s Senior Human Resources Officer, or his or her designee, will be final and binding on all parties.

8.Consequences of a Violation: Payment to Cigna

Important: This paragraph 8 is not Cigna’s only remedy for a Violation.  Cigna may seek any additional legal or equitable remedy, including an injunction described in paragraph 9, for a Violation.

(a)You will immediately forfeit all unvested Shares if you engage in any Violation at any time.

(b)You must immediately make the Payment described in paragraph 8(c) to Cigna in the manner described in paragraph 8(d) if:

(1)You engage in a Violation described in paragraph 7(c)(2) (compete against Cigna), 7(c)(3) (Solicit or hire Cigna employees) or 7(c)(4) (Solicit Cigna customers), either while you are a Cigna company employee or within 12 months after your Termination of Employment; or

(2)You engage in a Violation described in paragraph 7(c)(1) (misconduct), 7(c)(5) (disclose Confidential Information) 7(c)(6) (fail to cooperate) or 7(c)(7) (fail to assist) at any time.

9

(c)“Payment” is the value you realize from any Shares that vest during the 12-month period ending on the date of the Violation.  The Payment will equal:

(1)The number of Shares that vest during that 12-month period;

multiplied by

(2)The Fair Market Value of those Shares on their Vesting Date;

plus

(3)The total amount of all dividends, if any, paid to you on those Shares through the date of the Payment.

(d)Cigna will recover the Payment from you by any means permitted by applicable law, at the sole discretion of Cigna management, including but not limited to any or all of the following methods:

(1)If you have any Shares in a Stock Account or in any other account in book-entry form when a Violation occurs, Cigna will take back from you the whole number of Shares that has a total Fair Market Value as of the date of the Violation up to, but not more than, the Payment amount.

(2)Cigna will, to the extent permitted by applicable law, reduce:

(A)The amount of any payments that any Cigna company owes you for any reason (including without limit any payments owed to you under any nonqualified retirement, deferred compensation or other plan or arrangement) by

(B)The Payment amount.

This reduction will not occur until the date a future payment to you is due.

(3)Cigna will send you a written notice and demand for all or part of any Payment amount.  Within 30 days after you receive that notice and demand, you must make the Payment to Cigna.

10

9.Consequences of a Violation: Injunction

You agree that:

(a)Cigna will be entitled to ask a court of competent jurisdiction to issue an order (an injunction) that requires you to take action and/or that prohibits you from taking action, as needed to ensure that you keep all of the Promises described in paragraph 7(c)(2) through (7), and Cigna will not be required to post a bond in order to seek or obtain the injunction;

(b)Any breach or threatened breach of any of the Promises would cause irreparable injury to Cigna, and monetary damages alone would not provide an adequate remedy; and

(c)The remedies described in paragraph 9(a) are in addition to any other rights and remedies Cigna may have at law or in equity.

10.Consequences of a Violation: Designation of Cigna as Agent and Attorney-in-Fact for Inventions

You agree that:

(a)If Cigna Companies are unable to obtain your signature on any instruments needed to secure their rights in or relating to the Inventions pursuant to paragraph 7(c)(7)(A); then

(b)You hereby appoint Cigna companies and their duly authorized officers as your agents and attorneys in fact to act for and on your behalf to execute and file any documents and take other actions as may be necessary for Cigna companies to secure those rights.

11.Agreeing to Assume Risks

Cigna, its stock plan administrator and its transfer agent will try to process your stock transaction requests in a timely manner; however, Cigna makes no promises or guarantees to you relating to the market price of the Shares or to the time it may take to act on your request to sell the Shares or deliver stock certificates.  By accepting this Restricted Stock grant:

(a)You acknowledge that the action you request may not be completed until several days (or in the case of delivery of stock certificates, several weeks) after you submit it.

(b)You agree to assume the risks, including the risk that the market price of the Shares may change, related to delays described in paragraph 11(a):

(1)	Between the time you ask for any Shares to be sold and the time your Shares are actually sold; and
(2)	Between the time you ask for stock certificates to be delivered to you or your broker and the time the certificates are delivered.

12.Applicable Law

You understand and agree that:

(a)The terms and conditions of this Restricted Stock grant (including any Violation and the consequences of any Violation) and all determinations made under the Restricted Stock Grant Agreement, the Plan, and these Terms and Conditions will be interpreted under the laws of the State of Delaware, without regard to its conflict of laws rule;

(b)Any dispute about any of the Promises (described in paragraph 7(c)), if not resolved by agreement between you and Cigna, will be resolved exclusively in a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction over the dispute (collectively, “Delaware Courts”);

11

(c)Delaware is a convenient forum for resolving any dispute about the Promises; and

(d)You and Cigna consent to the exercise of personal jurisdiction over the parties by a Delaware Court in any dispute related to the Promises.

13.Arbitration

You agree and understand that:

(a)Except as provided in paragraph 12, any dispute over any of the terms and conditions that apply to this Restricted Stock grant will be resolved exclusively under the Cigna Employment Dispute Arbitration Policy and its Rules and Procedures as may be in effect when the dispute arises;

(b)You are waiving your right to have those disputes decided by a judge or jury in a court of law, and instead you are agreeing to submit those disputes exclusively to mandatory and binding final arbitration;

(c)While you or Cigna may seek emergency, temporary or permanent injunctive relief from a court in accordance with applicable law, after the court has issued a decision about that relief, you and Cigna will submit the dispute to final and binding arbitration under the Cigna Employment Dispute Arbitration Policy; and

(d)This arbitration provision will not apply to any dispute related to the Promises.

14.Miscellaneous

(a)If a court of competent jurisdiction determines that any provision of these Terms and Conditions is unenforceable as written, that provision will be enforceable to the maximum extent permitted by law and will be reformed by the court to make the provision enforceable in accordance with Cigna’s intent and applicable law.

(b)Cigna’s failure to enforce any provision of this Restricted Stock grant will not be interpreted as a waiver of its right to enforce that provision in the future.

15.Acceptance

If you disagree with any of these Terms and Conditions, including those in paragraphs 7, 8, 9 and 10 YOU MUST NOT ACCEPT THE RESTRICTED STOCK GRANT.  If you sign the Restricted Stock grant, or acknowledge your acceptance electronically or otherwise, you will be:

(a)Agreeing to all the terms and conditions of the Restricted Stock grant including the Inventions provision in paragraph 7(b) and the Promises in paragraph 7(c);

(b)Warranting and representing to Cigna that you are, and will remain, in full compliance with those terms and conditions;

(c)Authorizing Cigna to recover the Payment described in paragraph 8 and seek an injunction described in paragraph 9, if you engage in a Violation; and

(d)Appointing Cigna as your agent and attorney-in-fact to secure rights with respect to Inventions if unable to obtain your signature as described in paragraph 10.

[Year] RSG Grant Agreement including Terms and Conditions

12

EX-10.5

Exhibit 10.5

CIGNA STOCK UNIT PLAN

(Amended and Restated Effective as of February 22, 2017)

ARTICLE 1

Statement of Purpose

The Cigna Stock Unit Plan (the “Plan”) is intended to:

(a)provide incentives for and reward key Company employees by providing them with an opportunity to acquire an equity interest in Cigna Corporation, thereby increasing their personal interest in its continued success and progress;

(b)aid the Company in attracting and retaining key personnel of exceptional ability;

(c)supplement and balance the Company’s salary and incentive bonus programs in support of Cigna Corporation’s long-term strategic plans;

(d)motivate and reward the maximization of Cigna Corporation’s long-term financial results; and

(e)encourage decisions and actions by Company employees that are consistent with the long-range interests of Cigna Corporation’s shareholders.

This Plan is an amendment and restatement, effective February 22, 2017, of the Plan as previously amended and restated July 22, 2008 and as further amended on July 28, 2010, under which the Company was authorized to grant Restricted Stock Units (described in Article 4) from February 28, 1998 to July 21, 2008.  This amended and restated Plan applies to all Restricted Stock Units granted from and after February 22, 2017.

ARTICLE 2

Definitions

For all purposes of this Plan, except as otherwise expressly provided or defined herein or unless the context otherwise requires, the terms defined in this Article shall have the meanings set forth below.  Any capitalized term used in the Plan that is not expressly defined below shall have the meaning as set forth in the Cigna Long-Term Incentive Plan.

2.1“Dividend Equivalent Right” means that part of a Restricted Stock Unit described in Section 4.2.

2.2“Long-Term Incentive Plan” means the Cigna Long-Term Incentive Plan attached hereto, as it may be amended from time to time.

1

2.3“Participant” means an Eligible Employee to whom a Restricted Stock Unit grant has been made under the Plan.  Members of the Board of Directors who are not employed by the Company are not eligible to participate in the Plan.

2.4“Plan” means the Cigna Stock Unit Plan (Amended and Restated Effective February 22, 2017), as it may be amended from time to time.

2.5“Restricted Stock Unit” means a Restricted Stock Unit described in Article 4 of the Plan.

2.6“US Individuals” means individuals who are (a) United States citizens or resident aliens as of February 22, 2017, (b) not otherwise covered by (a) above and become United States citizens or resident aliens as of the year the Restricted Stock Units are paid, except to the extent the Restricted Stock Units are otherwise exempt from Code Section 409A under Treasury Regulation Section 1.409A-1(b)(8)(ii)(A), or (c) nonresident aliens as of February 22, 2017 for whom payment of Restricted Stock Units is, in whole or in part, considered income from sources within the United States (within the meaning of Code Section 861).

ARTICLE 3

Authority to Make Restricted Stock Unit Grants

3.1General Powers of the Committee.  The Committee is authorized in its sole discretion to select Participants and to grant them Restricted Stock Units in such amounts and upon such terms and conditions as it shall determine, subject to the limitations, restrictions and provisions contained in the Plan.

3.2General Powers of the CEO.  Subject to the requirements of Delaware law, the CEO is authorized in the CEO’s sole discretion to select Participants and to grant them Restricted Stock Units in such amounts and upon such terms and conditions as the CEO shall determine, subject to the limitations, restrictions and provisions contained in the Plan, including the following:

(a)The CEO may not make any grants to or for the benefit of (1) members of the Board of Directors or (2) anyone subject to the requirements of Exchange Act Section 16(a);

(b)The CEO must be a member of the Board of Directors at the time the CEO makes any grant under the Plan; and

(c)The maximum number of Restricted Stock Units which may be granted under this Section 3.2 is ten percent (10%) of the number of shares of Common Stock authorized to be issued under the Long-Term Incentive Plan minus any shares of Common Stock granted by the CEO under section 4.3 of that plan.

2

ARTICLE 4

Restricted Stock Units

4.1Restricted Stock Unit.  Each Restricted Stock Unit is a right to receive, subject to the conditions of the Plan and any conditions specified by the Committee (or CEO) at the time of grant, (a) one (1) share of Common Stock (the payment of which is described in Section 4.4) and (b) one (1) Dividend Equivalent Right (the payment of which is described in Section 4.2).

4.2Dividend Equivalent Right.  Each Dividend Equivalent Right described in Section 4.1 shall be a right to receive cash payments, as described below.  Cash payments of Dividend Equivalent Rights will be in an amount equal to the number of outstanding rights multiplied by the amount of any dividend declared and paid on one share of Common Stock, to the extent the right is outstanding on any such dividend record date.  A Dividend Equivalent Right shall cease to be outstanding on the earlier of the end of the time period specified by the Committee in the applicable grant document or the date such right is forfeited under the terms of the Plan or the applicable grant document.  Dividends paid on shares of Common Stock during the period while the Dividend Equivalent Right is outstanding shall be held by the Company and such accumulated dividends will only be paid when (and if) the applicable Dividend Equivalent Right vests, provided that the Committee (or CEO) may specify additional restrictions on the payment of such accumulated dividends in the applicable grant document. If any Dividend Equivalent Rights are forfeited under the terms of the Plan or the applicable grant document, the Participant shall also forfeit the right to any accumulated and future dividends related to such forfeited rights.  The Committee (or CEO) shall specify in the grant document the time and form of payment in a manner that complies with the requirements of Code Section 409A and the regulations thereunder.

4.3Restrictions on Restricted Stock Units; Vesting.

(a)Except as expressly provided below, a Restricted Stock Unit shall not be sold, transferred, assigned, pledged or otherwise disposed of by the Participant.  The Committee in its discretion may establish different restriction terms for different Restricted Stock Units evidenced by a single grant.

(b)Prior to vesting, a Restricted Stock Unit shall be subject to forfeiture as described in Section 4.6(a).  Unless vesting is accelerated by the occurrence of one of the events described in Section 4.6(b) through (e), the portion of a Restricted Stock Unit described in Section 4.1(a) will become vested upon the payment date(s) specified in the applicable grant document.

4.4Time and Form of Payment.  The portion of a vested Restricted Stock Unit described in Section 4.1(a) shall be paid in a lump sum on the earlier of a Participant’s death or the payment date(s) specified in the applicable Restricted Stock Unit grant document.  Any payment upon a Participant’s death shall be made to the Participant’s surviving spouse or, if the Participant’s surviving spouse does not survive the Participant, to the Participant’s estate during the 90 day period immediately following the Participant’s death.  A Restricted Stock Unit shall cease to be outstanding and a Participant shall have no further rights related to such Restricted Stock Unit

3

(including Dividend Equivalent Rights) upon the earlier of payment or forfeiture of such Restricted Stock Unit under the terms of the Plan.

4.5Share Issuance; Voting Rights; Dividends.

(a)No shares of Common Stock shall be issued under this Plan. This Plan is a Qualifying Plan under the Long-Term Incentive Plan and any successor plan.  Any shares of Common Stock issued as the result of the vesting of a Restricted Stock Unit shall be paid out of the Long-Term Incentive Plan.

(b)No Participant shall have any voting rights, rights to dividend payments, or any other rights of a holder of Common Stock merely because the Participant is granted a Restricted Stock Unit under this Plan.

4.6Termination of Employment; Change of Control; Death.

(a)Except as otherwise provided in Sections 4.6(b) through (e), in the event of Termination of Employment of a Participant, all unvested Restricted Stock Units held by the Participant on the date of Termination of Employment and all related rights (including Dividend Equivalent Rights) shall be forfeited, unless otherwise expressly provided by the Committee.

(b)In the event of Termination of Employment by reason of a Participant’s Retirement or Early Retirement, the Committee (or CEO) or its (the CEO’s) designee in the sole discretion of either may provide, before the Participant’s Retirement or Early Retirement, that any or all unvested Restricted Stock Units held by the Participant shall immediately vest on the Participant’s date of Retirement or Early Retirement and shall be paid in accordance with Section 4.4.

(c)In the event of Termination of Employment by reason of a Participant’s Disability, all unvested Restricted Stock Units as of the date of such event shall immediately vest and shall be paid in accordance with Section 4.4.

(d)In the event of a Participant’s Termination Upon a Change of Control, all unvested Restricted Stock Units as of the Termination date shall immediately vest and shall be paid in accordance with Section 4.4.

(e)In the case of the death of a Participant, all unvested Restricted Stock Units as of the date of death shall immediately vest and all vested but unpaid Restricted Stock Units shall be paid in accordance with Section 4.4.

4.7Leave of Absence.  Unless otherwise determined by the Committee or its designee with respect to Restricted Stock Units granted to non-US Individuals that are not subject to the requirements of Code Section 409A, any and all Restricted Stock Units granted hereunder shall

4

become vested and payable on the date (or dates) specified in the applicable grant document, regardless of whether the Participant is on an approved leave of absence on such date (or dates).

ARTICLE 5

Antidilution Provisions

Except as otherwise expressly provided herein, the following provisions shall apply to all Restricted Stock Units granted under this Plan:

5.1Stock Dividends, Splits, Etc.  In the event of a stock dividend, stock split, or other subdivision or combination of the Common Stock, the number of Restricted Stock Units granted under this Plan and that are outstanding on the date of such an event will be adjusted proportionately to maintain the Restricted Stock Unit to share ratio described in Section 4.1.

5.2Merger, Exchange or Reorganization.  In the event that the outstanding shares of Common Stock are changed or converted into, exchanged or exchangeable for, a different number or kind of shares or other securities of Cigna Corporation or of another corporation, by reason of a reorganization, merger, consolidation, reclassification or combination, appropriate adjustment shall be made by the Committee in the number and kind of shares that will be paid with respect to outstanding Restricted Stock Units that have been granted under this Plan, to the end that the proportionate interests of Participants shall be maintained as before the occurrence of such event; provided, however, that in the event of any contemplated transaction which may constitute a Change of Control of Cigna Corporation, the Committee, with the approval of a majority of the members of the Board of Directors, may modify any and all outstanding Restricted Stock Units so as to accelerate, as a consequence of or in connection with such transaction, the vesting of such Restricted Stock Units. Any Restricted Stock Units subject to this Section 5.2 shall be paid in accordance with Section 4.4.

ARTICLE 6

Administration of Plan

6.1General Administration.  The Plan is to be administered by the Committee, subject to such requirements for review and approval by the Board of Directors as the Board of Directors may establish.

6.2Administrative Rules.  The Committee shall have full power and authority to adopt, amend and rescind administrative guidelines, rules and regulations pertaining to this Plan and to interpret the Plan and rule on any questions respecting any of its provisions, terms and conditions.

6.3Decisions Binding.  All decisions of the Committee concerning this Plan shall be binding on Cigna Corporation and its Subsidiaries and their respective boards of directors, and on all Participants and other persons claiming rights under the Plan.

5

6.4Section 409A Compliance.  It is intended that the Plan comply with the requirements of Code Section 409A, and the Plan shall be so administered and interpreted.

ARTICLE 7

Amendments

All amendments to this Plan shall be in writing and shall be effective when approved by the Board of Directors. Unless otherwise expressly provided by an amendment or the Board of Directors, no amendment to this Plan shall apply to Restricted Stock Units granted before the effective date of the amendment. A Participant’s rights with respect to outstanding Restricted Stock Units may not be abridged by any amendment, modification or termination of the Plan without the Participant’s individual consent.

ARTICLE 8

Other Provisions

8.1Duration of the Plan.  The Plan shall remain in effect until all Restricted Stock Units covered by or granted under this Plan have been paid or forfeited under the terms of this Plan.

8.2Early Termination.  Notwithstanding the provisions of Section 8.1, the Board of Directors may terminate this Plan at any time; but no such action by the Board of Directors shall adversely affect the rights of Participants which exist under this Plan immediately before its termination.

8.3Awards Not Assignable.  Except as otherwise permitted by applicable law, no Restricted Stock Unit or any rights related to a Restricted Stock Unit, including any right to receive any payment under this Plan, shall be assignable or transferable by a Participant except by will or by the laws of descent and distribution.  Any other attempted assignment or alienation shall be void and of no force or effect.

8.4Withholding Taxes.  Upon the vesting or payment of any Restricted Stock Unit or portion thereof described in Article 4, the Company shall have the right at its option to:

(a)require the Participant (or personal representative or beneficiary) to remit an amount sufficient to satisfy any legally required withholding taxes; or

(b)deduct, from any amount payable, the amount of any taxes the Company may be required to withhold with respect to such transaction.

The Committee may require the Participant to remit such amount in whole or in part in Common Stock. The Committee may establish such additional conditions as it deems appropriate.  If the Participant remits such amount in Common Stock, the number of shares of Common Stock delivered to or on behalf of a Participant shall be reduced by the number of shares so remitted.  Common Stock so remitted shall be valued using the Fair Market Value of Common Stock as of the date the withholding obligation arises.

6

8.5Participant’s Rights Unsecured.  The right of any Participant to receive future payments under the provisions of the Plan shall be an unsecured claim against the general assets of the Company.

8.6Future Participation Not Guaranteed.  Participation in the Plan with respect any one or more grants of Restricted Stock Units is not in and of itself to be construed as evidence of a right to receive any subsequent Restricted Stock Unit grant.

8.7Termination of Employment.  Cigna Corporation and each Subsidiary retain the right to terminate the employment of any employee at any time for any reason or no reason, and a Restricted Stock Unit grant under the Plan to a Participant is not, and shall not be construed in any manner to be, a waiver of such right.

8.8Successors.  Any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of Cigna Corporation, shall assume the liabilities of Cigna Corporation under this Plan and perform any duties and responsibilities in the same manner and to the same extent that Cigna Corporation would be required to perform if no such succession had taken place.

8.9Construction.  The terms used in this Plan shall include the feminine as well as the masculine gender and the plural as well as the singular, as the context in which they are used requires.

8.10Severability.  If any provisions of the Plan, or any Restricted Stock Unit grant made under the Plan, is held to be invalid, void or unenforceable, the validity of any other provision of the Plan or grant made under the Plan shall not be affected.

8.11Interpretation.  All statutory or regulatory references in this Plan shall include successor provisions.

8.12Controlling Law.  This Plan shall be construed and enforced according to the laws of the State of Delaware, without regard to Delaware conflict of laws rules, to the extent not preempted by federal law, which shall otherwise control.

8.13Limitation under the Cigna Executive Severance Benefits Plan. If some or all of a Participant’s awards or rights under this Plan, including without limitation, the accelerated vesting of a Participant’s outstanding Restricted Stock Units in the event of a Termination Upon a Change of Control, are required to be cancelled, limited or reduced under the Cigna Executive Severance Benefits Plan (the “Executive Severance Plan”), then such reduction, limitation or cancellation shall be applied in the manner and to the extent determined under the Executive Severance Plan, notwithstanding any other provisions of this Plan.

7

EX-10.6

Exhibit 10.6

Form of Cigna Stock Unit Plan:  Restricted Stock Unit Grant Agreement

Cigna Corporation (“Cigna”) has granted you the number of restricted stock units of Cigna set forth below in this Restricted Stock Unit Grant Agreement (“Restricted Stock Unit Grant” or “Grant”) under the Cigna Stock Unit Plan (“Plan”). The date of your Restricted Stock Unit Grant (“Grant Date”) and the date on which your Grant is scheduled to vest (“Vesting Date”) are also indicated below. The award is subject to the provisions of the Plan and the Terms and Conditions below.

You should carefully read all the terms and conditions of this Restricted Stock Unit Grant and be sure you understand what they say and what your responsibilities and obligations are before you click on the ACCEPT button to acknowledge and agree to this Grant.

If you are not willing to agree to all of the Grant terms and conditions, do not accept the Grant and do not click the ACCEPT button for the Restricted Stock Unit Grant Acknowledgment and Agreement.  If you do not accept the Grant, you will not receive the benefits of the Grant.

If you do click on the ACCEPT button, you are accepting and agreeing to all of the terms and conditions of this Restricted Stock Unit Grant.

Participant:

Grant Type:

Plan Name:  Cigna Stock Unit Plan

Grant Date:

Total Granted:

Grant Price:   (USD)

Vesting Schedule

Units Granted Vesting Date

You should also read the Plan Document and Key Contacts and Reference Materials document (attached to the Plan) and indicate that you have done so and agree to the terms by checking the appropriate box in the online grant acceptance process.  The Key Contacts and Reference Materials document contains information on how to get important stock award information (such as the Plan Prospectus, Tax Considerations and Cigna’s Securities Transactions and Insider Trading Policy) and whom to contact if you have questions.

Please be aware that the Cigna Securities Transactions and Insider Trading Policy places restrictions on your transactions in Cigna securities and requires certain Cigna employees to obtain advance permission from the Corporate Secretary before executing transactions in Cigna securities.

If you have questions about your award, please contact Cigna Shareholder Services by email at shareholderservices@cigna.com or by phone at 215.761.3516.

1

Important Notice:  Restricted Stock Unit Grant Acknowledgment and Agreement

By clicking on the ACCEPT button, I:

1.   Acknowledge and represent to Cigna that I have:

a.     received the Restricted Stock Unit Grant;

b.read and understand its terms and conditions, which include, among other things, restrictive covenants such as non-competition, customer and employee non-solicitation and non-disclosure provisions and  litigation cooperation and intellectual property assignment and assistance provisions; and

c.received answers to any questions I had about the Grant and its terms and conditions, including the restrictive covenants.

2.    Understand and agree that:

a.    Delaware law governs the interpretation and construction of the Grant; and

b.any controversy or proceeding arising out of or relating to the restrictive covenants in the Grant will be brought exclusively before a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction (collectively, “Delaware Courts”).

3.    Consent to Delaware Courts exercising personal jurisdiction over me in any dispute about the restrictive covenants.

Scroll down for the TERMS AND CONDITIONS of the Restricted Stock Unit Grant.

2

TERMS AND CONDITIONS OF YOUR [Year] GRANT

OF RESTRICTED STOCK UNITS — GLOBAL

These Terms and Conditions are an important part of your grant of Restricted Stock Units from Cigna Corporation (Cigna).  The terms of your Restricted Stock Unit grant are in: (a) the electronic Restricted Stock Unit Grant Agreement above, (b) these Terms and Conditions (including the Addendum), and (c) the Cigna Stock Unit Plan (Plan).

Certain words in this document with first letters capitalized are defined in the Restricted Stock Unit Grant Agreement above, these Terms and Conditions or Article 2 of the Plan.  For purposes of these Terms and Conditions, “Employer” means Cigna or a Subsidiary that employs you on the applicable date. This grant is void if you are not an employee of Cigna or a Subsidiary (a Cigna company) on the Grant Date.

1.Restricted Stock Units; Restrictions

Each Restricted Stock Unit (Unit) is a conditional right to receive:

(a)One share of Cigna Common Stock (Share); and

(b)One associated Dividend Equivalent Right (described in Section 4.2 of the Plan and paragraph 4 below).

Units are subject to certain Restrictions from the grant date until the applicable Payment Date described in paragraph 3.  The Restrictions are:

(c)You cannot sell or transfer the Units to anyone; and

(d)Unless an early vesting exception applies (described in paragraph 3), you will forfeit (lose your right to) your unvested Units and all related rights (including the right to Dividend Equivalent payments) immediately upon your Termination of Employment.

Sections 4.3 and 4.6 of the Plan describe these Restrictions in more detail.  In addition to these Restrictions, you must also comply with all the terms and conditions of this grant, including those contained in this document.

2.             Vesting

(a)Except as described in paragraph 2(b) and subject to paragraph 2(c), the Restrictions on the Units will end (your Units will vest) on the Payment Date described in paragraph 3, but only if you remain continuously employed by a Cigna company until the applicable Payment Date and comply with all the terms and conditions of this grant, including those contained in this document.

(b)Notwithstanding paragraph 2(a) and subject to paragraph 2(c), if your Termination of Employment is before an applicable Payment Date:

(1)Your Units will vest upon your Termination of Employment if it is Upon a Change of Control (of Cigna Corporation) or due to your death or Disability; and

(2)Your Units may vest upon your Termination of Employment if it is due to your Early Retirement or Retirement and if the Committee or its designee (including Cigna’s senior human resources officer) approves the early vesting before your Termination of Employment.  If you want to be considered for early vesting when you retire, you must ask your manager or human resources representative far enough in advance of your retirement so there is time to process your request.

(c)You must comply in all respects with the terms and conditions of this grant, including those contained in this Attachment.

3

(d)If you are resident or employed in a country that is a member of the European Union, the grant of the Units and these Terms and Conditions are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into local law (the “Age Discrimination Rules”).  To the extent a court or tribunal of competent jurisdiction determines that any provision of these Terms and Conditions is invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, Cigna, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.

3.             Payment

(a)The Payment Date for your vested Units under this Grant is [     ].

(b)Any Units that vest on account of your death will be paid during the 90 day period immediately following your death to your surviving spouse or, if you have no surviving spouse when you die, to your estate unless otherwise provided under applicable law.

(c)For each Unit that vests, Cigna will make payment by issuing one Share as of the applicable Payment Date.  Until the Shares are issued to you, you will not be a Cigna shareholder, not have the right to vote the Shares, and not receive actual dividends.

4.Dividend Equivalent Rights

(a)Subject to the forfeiture provisions of this paragraph, your right to receive payments for Dividend Equivalent Rights associated with a Unit will vest on the scheduled Payment Date for the Unit described in paragraph 3 (Scheduled Payment Date).  If you forfeit a Unit, you will forfeit the right to any Dividend Equivalent Rights payments associated with the Unit.  You will also forfeit the right to any Dividend Equivalent Rights payments associated with a Unit if:

(1)you have a Termination of Employment before the Scheduled Payment Date for the Unit (even if the Unit vests under paragraph 2);

(2)the Scheduled Payment Date for the Unit occurs before the Unit vests (because vesting is delayed); or

(3)you are on a leave of absence when the Unit vests.

(b)Cigna or a Subsidiary will make a lump sum cash payment to you for vested Dividend Equivalent Rights within 70 days after the Scheduled Payment Date.  The payment will equal (1) the number of Dividend Equivalent Rights that vested on the Scheduled Payment Date multiplied by (2) the amount of any dividends declared by Cigna’s Board and paid on one Share as to any dividend record dates that occur between the date of grant and the Scheduled Payment Date.  No interest will be paid on any Dividend Equivalent Rights payments.  The payments, less applicable taxes withheld, may be included in your regular paycheck or direct deposit.

5.Tax Withholding

(a)Section 8.4 of the Plan shall apply to any Tax-Related Items (as defined below) pertaining to the Units, the Shares issued in settlement of the Units or any Dividend Equivalent Rights that Cigna and/or your Employer are required to withhold under applicable local law.  Upon the vesting or payment of any Unit or part of a Unit, Cigna reserves the right to

4

satisfy any liability for Tax-Related Items by withholding enough newly-issued Shares to cover all or part of the applicable liability for Tax-Related Items.

(b)Regardless of any action Cigna and/or your Employer take with respect to any or all income tax,  social insurance, payroll tax, payment on account or other tax-related withholding (Tax-Related Items), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility. Cigna and/or your Employer:

(1)Make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Units (including the grant of the Units, the vesting of the Units, the payment of the Units the subsequent sale of any Shares acquired pursuant to the Units, and the receipt of any dividends or dividend equivalents);

(2)Do not commit to structure the terms of the grant or any aspect of the Units to reduce or eliminate your liability for Tax-Related Items; and

(3)May be required to withhold or account for Tax-Related Items in more than one jurisdiction if you are subject to Tax-Related Items in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event.

If your country of residence (and/or your country of employment, if different) requires withholding of Tax-Related Items, Cigna shall satisfy any applicable withholding obligation as described in paragraph 5(a).  In the event that withholding in Shares is prohibited or problematic under applicable law or otherwise may trigger adverse consequences to Cigna or your Employer, your Employer may withhold Tax-Related Items required to be withheld in cash from your regular salary and/or wages, or other amounts payable to you.  By accepting the Units, you expressly consent to the withholding of applicable Tax-Related Items as provided for hereunder.  You agree to pay Cigna or your Employer any amount of Tax-Related Items that Cigna or your Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means described above. All other Tax-Related Items related to the Units and any Shares acquired pursuant to the Units are your sole responsibility.

6.Book-Entry Shares; Sale of Shares

(a)Upon payment of the Shares as described in paragraph 2, Cigna (or a custodian appointed by Cigna) will hold your Shares in book-entry form in a Stock Account.  That is, a record of your Share ownership will be kept electronically, and you will not risk losing any Share certificates.  A certificate for vested Shares will be issued to you only if you ask for one, but not if you have engaged in a Violation (described in paragraph 7(c)).

(b)You may generally sell or transfer the Shares at any time, but your right to sell the Shares may be limited by Cigna.  This right is subject to the terms of Cigna’s Securities Transactions and Insider Trading Policy, and Cigna reserves the right, for any reason at any time, to suspend or delay action on any request you make to sell the Shares.

7.Conditions of Grant

(a)By accepting the grant, you are agreeing:

(1)           to the Inventions provision described in paragraph (7)(b); and

(2)           not to engage in any Violation described in paragraph 7(c).

5

You understand and agree that your agreement to the Inventions provision and not to engage in any Violation are a material part of the inducement for Cigna’s granting you the Units and essential pre-conditions to your eligibility to exercise any rights associated with the grant and retain any benefit from the vesting of the Units and issuance of the Shares.

(b)Inventions

(1)           You hereby assign and promise to assign to Cigna companies or their designee, all your right, title, and interest in and to any and all current and future Inventions.  You acknowledge that all original works of authorship which you make (whether alone or jointly with others) within the scope of your Cigna company employment and which are protectable by copyright are “works made for hire,” as defined in the United States Copyright Act.

(2)           You agree to (i) maintain and make available adequate current records, including electronic records, notes, sketches and drawings, of all Inventions you make, and (ii) disclose such Inventions in writing upon request. These records will remain the property of Cigna companies.

(3)           If in the course of your Cigna company employment, you incorporate a Prior Invention into any Cigna company work product, you grant Cigna companies a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to use the Prior Invention as part of or in connection with the work product. Within 45 days after the date of this grant, you agree to notify Cigna Shareholder Services (shareholderservices@Cigna.com) of any Prior Inventions that you are not assigning under this paragraph 7(b).

(4)           “Inventions” means any and all inventions, original works of authorship, developments, concepts, sales methods, improvements, trade secrets, or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you have or will solely or jointly conceive, develop, reduce to practice, or fix during your Cigna company employment.

(5)           “Prior Inventions” means all inventions, original works of authorship, developments, concepts, sales methods, improvements, trade secrets or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you conceived, developed, reduced to practice or fixed before your Cigna company employment and which belong to you.

(c)Violation.

You will engage in a “Violation” if, directly or indirectly, you engage in any misconduct described in paragraph 7(c)(1) below or you break any of the “Promises” in paragraphs 7(c)(2) through (7) below:

(1)Misconduct:

(A)You have a Termination of Employment initiated by a Cigna company because of your misconduct, as that term is defined in Cigna’s Code of Ethics, Standards of Conduct or other employment policies.

(B)You do anything else while an employee of any Cigna company that is not discovered by the company until after your Termination of Employment and that would, if you had still been employed at the time of the discovery,

6

be reason for your Termination of Employment for misconduct, as described above.

(2)Promise Not To Compete against Cigna Companies:

(A)You Promise not to Provide Services to any Cigna Competitor during the Restricted Time in the Restricted Area, if the services you would perform for the Cigna Competitor are Similar Services.

“Cigna Company,” “Cigna Competitor,” “Provide Services,” “Restricted Area,” “Restricted Time” and “Similar Services” are defined in paragraphs 7(c)(2)(C) through (G).

You acknowledge and agree that you have had access to and received Confidential Information (described in paragraph 7(c)(5)(B) below) and the above time and geographic restrictions are reasonable and necessary to protect Cigna’s business and Confidential Information.

(B)If you are in Career Band 6 or higher on your Termination of Employment date:

In addition to the Promise in paragraph 7(c)(2)(A) above, you also Promise not to Provide Services to any Cigna Competitor during the Restricted Time in the Restricted Area, if the services you would perform for the Cigna Competitor relate to any products or services similar to those sold, developed, supplied, manufactured or researched by any Cigna Company with which you were involved, or for which you were responsible, during the six months preceding your Termination of Employment.

You acknowledge and agree that:

(i)Cigna’s business competes on a global basis;

(ii)Cigna’s sales and marketing plans are for continued expansion throughout the United States of America and globally;

(iii)You have had access to and received Confidential Information (described in paragraph 7(c)(5)(B) below); and

(iv)The time restrictions and geographic scope of this non-competition restriction are reasonable and necessary to protect Cigna’s business and Confidential Information.

(C)“Cigna Company” means any Cigna company to which you gave services, for which you were responsible or for whose business you were in any manner responsible, in the 12 months immediately before your Termination of Employment.

(D)“Cigna Competitor” means any business that competes directly or indirectly with any Cigna Company’s product or service, including but not limited to medical, dental, other healthcare, disability, life, travel and accident insurance coverages, plans and programs and related products and services.

(E)“Provide Services” means becoming employed by, working as a consultant or independent contractor for, or in any way rendering services or assistance to a person, business or other entity.

(F)“Restricted Area” means any country in the world where:

7

(i)on your Termination of Employment date, any Cigna Company develops, sells, supplies, manufactures or researches its products or services; or

(ii)within three months after your Termination of Employment date, any Cigna Company plans to develop, sell, supply, manufacture or research products or services;

to the extent that, during the six-month period ending on your Termination of Employment date, you have had at least partial responsibility for, or material involvement in, those products or services in that country.

(G)“Restricted Time” means any time during the period that starts on the Grant Date and ends six months after your Termination of Employment date.

(H)“Similar Services” means services similar to the services you perform, or for which you have responsibility, at a Cigna Company within the Restricted Area during the six-month period that ends on your Termination of Employment date.

(3)Promise Not To Solicit or Hire Cigna Company Employees:

(A)You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you will not:

(i)Solicit any employee of any Cigna company to terminate his/her employment with, or otherwise cease his/her relationship, contractual or otherwise, with that Cigna company; or

(ii)hire any employee of any Cigna company.

(B)The restriction in paragraph 7(c)(3)(A) will apply only to Soliciting or hiring those Cigna company employees with whom you were personally involved in hiring, or with whom you worked, during your employment with Cigna and who:

(i)had Material Contact (as defined in paragraph 7(c)(4)(B)) with Cigna company customers or suppliers in performing their Cigna company job duties; or

(ii)was a member of the management team of any Cigna company; or

(iii)was employed at Career Band 5 or above.

(C)This paragraph 7(c)(3) will not apply to applications for employment submitted voluntarily by any Cigna employee, in response to a general advertisement or otherwise, so long as neither you, nor anyone acting on your behalf or in response to information provided by you, otherwise Solicits the employees to leave Cigna.

(D)To “Solicit” means to entice, encourage, persuade, or solicit, or to attempt to entice, encourage, persuade or solicit.

(4)Promise Not To Solicit Cigna Company Customers:

(A)You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you shall not:

8

(i)Solicit any Cigna company customer to end all or any part of an existing relationship, contractual or otherwise, with that Cigna company;

(ii)Solicit any Cigna company customer to reduce the volume of their business dealings with Cigna; or

(iii)Solicit any potential Cigna company customer to enter into any business arrangements with you or any business which you may become employed by, or affiliated in any way with, after leaving any Cigna company, if such business arrangements would compete in any way with any business that Cigna company has conducted, or has been planning to conduct, during the 12-month period ending on the date of the Violation.

(B)The Promise in paragraph 7(c)(4)(A) above applies only to a customer or potential customer with whom you had any Material Contact while employed by any Cigna company.  “Material Contact” means you:

(i)Had material business dealings with the customer on behalf of any Cigna company within the three-year period ending on the date of the Solicitation;

(ii)Were responsible for supervising or coordinating the dealings between any Cigna company and the customer or potential customer anytime during the three-year period ending on the date of the Solicitation; or

(iii)Obtained, at any time, trade secrets or confidential information about a customer or potential customer with whom you had contact as a result of your employment by any Cigna company.

(C)“Solicit” is defined in paragraph 7(c)(3)(D).

(5)Promise Not To Disclose Cigna Companies’ Confidential Information:

(A)You Promise not to disclose any Confidential Information to any third-party at any time, whether during or after your employment, without the prior written consent of Cigna (except to the extent required by an order of a court having competent jurisdiction or a properly issued subpoena) unless that Confidential Information was previously disclosed publicly by Cigna or has become public knowledge (other than by your disclosure). Nothing in this Confidentiality provision prohibits you or your counsel from initiating communications directly with, or responding to any inquiry from, or providing testimony before any self-regulatory organization or any state or federal regulatory authority.  In the event that you are required to disclose Confidential Information pursuant to a subpoena or other law or regulation, you shall notify Cigna promptly upon learning that you have been subpoenaed or are otherwise required or compelled to divulge Confidential Information.

(B)“Confidential Information” means any Cigna company trade secrets, confidential information, or proprietary materials, including but not limited to customer lists, financial records, marketing plans and sales plans.

(6)Promise to Cooperate With Cigna in Investigations or Litigation:

9

(A)You Promise that, at any time after your Termination of Employment, you will cooperate with Cigna in (i) all investigations of any kind, (ii) helping to prepare and review documents and meeting with Cigna attorneys, and (iii) providing truthful testimony as a witness or a declarant during discovery and/or trial in connection with any present or future court, administrative, agency, or arbitration proceeding involving any Cigna company and with respect to which you have relevant information.

(B)Cigna agrees that it will reimburse you, upon production of appropriate receipts and in accordance with Cigna’s then existing Business Travel Reimbursement Policy, the reasonable business expenses (including air transportation, hotel, and similar expenses) incurred by you in connection with such assistance.  You must present to Cigna for reimbursement all receipts for those expenses within 45 days after you incur the expenses.

(7)Promise to Assist with Patent and Copyright Registrations:

(A)You Promise that, during your Cigna company employment and after your Termination of Employment, you will assist Cigna companies, should they request and at Cigna’s expense, to secure their rights (including any copyrights, patents, trademarks or other intellectual property rights) in or relating to the Inventions in any and all countries, including by:

(i)disclosing to Cigna companies all pertinent information and data; and

(ii)     executing all applications, assignments or other instruments necessary to apply for and obtain these rights and assign them to Cigna companies.

(d)(1)If you were an Executive Officer at any time during the 24-month period before the date of the Violation, the People Resources Committee will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment (described in paragraph 8) and to impose conditions on any waiver.

(2)Otherwise, Cigna’s Senior Human Resources Officer, or his or her designee, will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment and to impose conditions on any waiver.

(3)Determinations of the People Resources Committee, Cigna’s Senior Human Resources Officer, or his or her designee, will be final and binding on all parties.

10

8.Consequences of a Violation: Payment to Cigna

Important: This paragraph 8 is not Cigna’s only remedy for a Violation.  Cigna may seek any additional legal or equitable remedy, including an injunction described in paragraph 9, for a Violation.

(a)If you engage in any Violation at any time:

(1)You will immediately forfeit all unvested Units; and

(2)No payment will be made for any Units that have vested under paragraph 2(b) if   the violation occurs before the applicable Payment Date.

(b)You must immediately make the Payment described in paragraph 8(c) to Cigna in the manner described in paragraph 8(d) if:

(1)You engage in a Violation described in paragraph 7(c)(2) (compete against Cigna), 7(c)(3) (Solicit or hire Cigna employees) or 7(c)(4) (Solicit Cigna customers); or

(2)You engage in a Violation described in paragraph 7(c)(1) (misconduct), 7(c)(5) (disclose Confidential Information),7(c)(6) (fail to cooperate) or 7(c)(7) (fail to assist) at any time.

(c)“Payment” is the value you realize from any Units that are paid under paragraph 3 during the 12-month period ending on the date of the Violation.  The Payment will equal:

(1)The number of Units that are paid during that 12-month period;

multiplied by

(2)The Fair Market Value of the Shares issued on the Payment Date for those Units;

plus

(3)The total amount of all Dividend Equivalent Right and actual dividends, if any, paid to you on those Units or Shares through the date of the Payment described in paragraph 8(d).

(d)Cigna will recover the Payment from you by any means permitted by applicable law, at the sole discretion of Cigna management, including but not limited to any or all of the following methods:

(1)If you have any Shares in a Stock Account or in any other account in book-entry form when a Violation occurs, Cigna will take back from you the whole number of Shares that has a total Fair Market Value as of the date of the Violation up to, but not more than, the Payment amount.

(2)Cigna will, to the extent permitted by applicable law, reduce:

(A)The amount of any payments that any Cigna company owes you for any reason (including without limit any payments owed to you under any nonqualified retirement, deferred compensation or other plan or arrangement) by

(B)The Payment amount.

This reduction will not occur until the date a future payment to you is due.

(3)Cigna will send you a written notice and demand for all or part of any Payment amount.  Within 30 days after you receive that notice and demand, you must make the Payment to Cigna.

11

9.Consequences of a Violation: Injunction

You agree that:

(a)Cigna will be entitled to ask a court of competent jurisdiction to issue an order (an injunction) that requires you to take action and/or that prohibits you from taking action, as needed to ensure that you keep all of the Promises described in paragraph 7(c)(2) through (7), and Cigna will not be required to post a bond in order to seek or obtain the injunction;

(b)Any breach or threatened breach of any of the Promises would cause irreparable injury to Cigna, and monetary damages alone would not provide an adequate remedy; and

(c)The remedies described in paragraph 9(a) are in addition to any other rights and remedies Cigna may have at law or in equity.

10.Consequences of a Violation: Designation of Cigna as Agent and Attorney-in-Fact for Inventions

You agree that:

(a)If Cigna Companies are unable to obtain your signature on any instruments needed to secure their rights in or relating to the Inventions pursuant to paragraph 7(c)(7)(A); then

(b)You hereby appoint Cigna companies and their duly authorized officers as your agents and attorneys in fact to act for and on your behalf to execute and file any documents and take other actions as may be necessary for Cigna companies to secure those rights. You agree to execute documents and take other actions as may be necessary under local law to effectuate this appointment.

11.Agreeing to Assume Risks

Cigna, its stock plan administrator and its transfer agent will try to process your stock transaction requests in a timely manner; however, Cigna makes no promises or guarantees to you relating to the market price of the Shares or to the time it may take to act on your request to sell the Shares or deliver stock certificates.  By accepting this Restricted Stock Unit grant:

(a)You acknowledge that the action you request may not be completed until several days (or in the case of delivery of stock certificates, several weeks) after you submit it.

(b)You agree to assume the risks, including the risk that the market price of the Shares may change, related to delays described in paragraph 11(a):

(1)Between the time you ask for any Shares to be sold and the time your Shares are actually sold; and

(2)    Between the time you ask for stock certificates to be delivered to you or your broker and the time the certificates are delivered.

12.Applicable Law

You understand and agree that:

(a)The terms and conditions of this Restricted Stock Unit grant (including any Violation and the consequences of any Violation) and all determinations made under the Restricted Stock Unit Grant Agreement, the Plan, and these Terms and Conditions will be interpreted under the laws of the State of Delaware, without regard to its conflict of laws rule;

(b)Any dispute about any of the Promises (described in paragraph 7(c)), if not resolved by agreement between you and Cigna, will be resolved exclusively in a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction

12

over the dispute (collectively, “Delaware Courts”);

(c)Delaware is a convenient forum for resolving any dispute about the Promises; and

(d)You and Cigna consent to the exercise of personal jurisdiction over the parties by a Delaware Court in any dispute related to the Promises.

13.Arbitration

You agree and understand that:

(a)Except as provided in paragraph 12, any dispute over any of the terms and conditions that apply to this Restricted Stock Unit grant will be resolved exclusively under the Cigna Employment Dispute Arbitration Policy and its Rules and Procedures as may be in effect when the dispute arises;

(b)You are waiving your right to have those disputes decided by a judge or jury in a court of law, and instead you are agreeing to submit those disputes exclusively to mandatory and binding final arbitration;

(c)While you or Cigna may seek emergency, temporary or permanent injunctive relief from a court in accordance with applicable law, after the court has issued a decision about that relief, you and Cigna will submit the dispute to final and binding arbitration under the Cigna Employment Dispute Arbitration Policy; and

(d)This arbitration provision will not apply to any dispute related to the Promises.

14.Discretionary Nature of Grant; No Vested Rights

You acknowledge and agree that:

(a)The Plan is established voluntarily by Cigna and is discretionary in nature and may be amended, cancelled, or terminated by Cigna, in its sole discretion, at any time;

(b)The grant of the Units under the Plan is a voluntary one-time benefit and does not create any contractual or other right to receive a future grant of Units or future benefits in lieu of Units.

(c)Future grants, if any, will be at the sole discretion of Cigna, including, but not limited to, the form and timing of any grant, the number of Units granted and the vesting provisions.

(d)Any amendment, modification or termination of the Plan shall not constitute a change or impairment of the terms and conditions of your employment with your Employer.

(e)The future value of the Units is unknown, indeterminable, and cannot be predicted with certainty.

(f)No claim or entitlement to compensation or damages shall arise from forfeiture of the Units resulting from the Termination of Employment (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or rendering services or the terms of your employment agreement, if any), and in consideration of the grant of the Units to which you are otherwise not entitled, you irrevocably agree never to institute any claim against your Employer, Cigna or any other Subsidiary or Affiliate, waive your ability, if any, to bring any such claim, and releases your Employer, Cigna and any other Subsidiary or Affiliate from any such claim;

13

if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claim.

(g)Neither your Employer, Cigna nor any other Subsidiary or Affiliate shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Units or of any amounts due to you pursuant to payment of the Units.

(h)The grant of the Units shall not create any employment relationship with Cigna or any of its Subsidiaries or Affiliates.  Further, the grant of the Units shall not confer upon you any right of continued employment with your Employer nor limit in any way the right of your Employer to terminate your employment at any time.

15.Termination Indemnities

Your participation in the Plan is voluntary.  The value of the Units and any other awards granted under the Plan is an extraordinary item of compensation outside the scope of your employment (and your employment contract, if any).  Any grant under the Plan, including the grant of the Units, is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension, or retirement benefits or similar payments.

16.Compliance

As a condition of the grant of the Units, you agree to:

(a)Repatriate all payments attributable to the Units in accordance with local foreign exchange rules and regulations in your country of residence (and country of employment, if different);

(b)Take any and all actions, and consent to any and all actions taken by Cigna and/or its Subsidiaries, as may be required to allow Cigna and/or its Subsidiaries to comply with local laws, rules and regulations in your country of residence (and country of employment, if different); and

(c)Take any and all actions that may be required to comply with your personal legal and tax obligations under local laws, rules and regulations in your country of residence (and country of employment, if different).

17.No Public Offering of Securities

The grant of the Units is not intended to be a public offering of securities in your country of residence (and country of employment, if different).  Cigna has not submitted any registration statement, prospectus or other filings with the local securities authorities (unless otherwise required under local law).

18.Electronic Delivery

Cigna may, in its sole discretion, decide to deliver any documents related to the Units or other awards granted to you under the Plan by electronic means.  You hereby consent to receive such

14

documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by Cigna or a third party designated by Cigna.

19.English Language

If you are resident outside of the United States, you acknowledge and agree that it is your express intent that the Restricted Stock Unit Grant Agreement, these Terms and Conditions, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Units, be drawn up in English.  If you have received these Terms and Conditions, the Plan or any other documents related to the Units translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.

20.Addendum

Notwithstanding any provisions of these Terms and Conditions to the contrary, the Units shall be subject to any special terms and conditions for your country of residence (and country of employment, if different) set forth in an addendum to these Terms and Conditions (an “Addendum”).  Further, if you transfer your residence and/or employment to another country reflected in an Addendum to these Terms and Conditions at the time of transfer, the special terms and conditions for such country will apply to you to the extent Cigna determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the award and the Plan (or Cigna may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer).  In all circumstances, any applicable Addendum shall constitute part of these Terms and Conditions.

21.Additional Requirements

Cigna reserves the right to impose other requirements on the Units, any Shares acquired pursuant to the Units, and your participation in the Plan, to the extent Cigna determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the award and the Plan.  Such requirements may include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing.

22.Data Privacy Consent

(a)Cigna and your Employer hereby notify you of the following in relation to your personal data and the collection, processing and transfer of such data in relation to the grant of the Units and your participation in the Plan, pursuant to applicable personal data protection laws.  The collection, use, processing and transfer of your personal data is necessary for Cigna’s administration of the Plan and your participation in the Plan, and your denial and/or objection to the collection, processing and transfer of personal data may affect your ability to participate in the Plan.  As such, you voluntarily acknowledge, consent and agree (where required under applicable law) to the collection, use, processing and transfer of personal data as described herein.

(b)Cigna and your Employer hold certain personal information about you, which may include  (but may not be limited to) your name, home address and telephone number, date of birth,

15

social security number or other employee identification number, email address, salary, nationality, job title, any Shares or directorships held in the Company, details of all Units or any other entitlement to Shares awarded, canceled, purchased, vested, unvested or outstanding in your favor, for the purpose of managing and administering the Plan (collectively, the Data).  The Data may be provided by you or collected, where lawful, from third parties, and Cigna and your Employer will process the Data for the exclusive purpose of implementing, administering and managing your participation in the Plan.  The data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations in your country of residence.  Data processing operations will be performed so as to minimize the use of personally identifiable data when such operations are unnecessary for the processing purposes sought.  The Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration, including auditing, and operation of the Plan and for your participation in the Plan.

(c)Cigna and your Employer will transfer Data as necessary for the purpose of implementation, administration and management of your participation in the Plan, and Cigna and your Employer may each further transfer Data to any third parties assisting Cigna in the implementation, administration and management of the Plan.  This may include transferring the Data to locations (including to countries other than where you are based and outside the European Economic Area that have not been determined by the European Commission or other authorities to have a similar data protection regime as may be found in the country where you are based. You hereby authorize (where required under applicable law) the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf to a broker or other third party with whom you may elect to deposit any Shares acquired pursuant to the Plan.

(d)You may, at any time, exercise your rights provided under applicable personal data protection laws, which may include the right to:

(1)Obtain confirmation as to the existence of the Data;

(2)Verify the content, origin and accuracy of the Data;

(3)Request the integration, update, amendment, deletion, or blockage (for breach of applicable laws) of the Data; and

(4)Oppose, for legal reasons, the collection, processing or transfer of the Data which is not necessary or required for the implementation, administration and/or operation of the Plan and your participation in the Plan.

You may seek to exercise these rights by contacting your local HR manager or HR Generalist.

23.Miscellaneous

(a)If a court of competent jurisdiction determines that any provision of these Terms and

16

Conditions is unenforceable as written, that provision will be enforceable to the maximum extent permitted by law and will be reformed by the court to make the provision enforceable in accordance with Cigna’s intent and applicable law.

(b)Cigna’s failure to enforce any provision of this Restricted Stock Unit grant will not be interpreted as a waiver of its right to enforce that provision in the future.

24.Acceptance

If you disagree with any of these Terms and Conditions, including those in paragraphs 7, 8, 9, 10 and 22, YOU MUST NOT ACCEPT THE RESTRICTED STOCK UNIT GRANT.  If you sign the Restricted Stock Unit grant, or acknowledge your acceptance electronically or otherwise, you will be:

(a)Agreeing to all the terms and conditions of the Restricted Stock Unit grant including the Inventions provision in paragraph 7(b) and the Promises in paragraph 7(c);

(b)Warranting and representing to Cigna that you are, and will remain, in full compliance with those terms and conditions;

(c)Authorizing Cigna to recover the Payment described in paragraph 8 and seek an injunction described in paragraph 9, if you engage in a Violation; and

(d)Appointing Cigna as your agent and attorney-in-fact to secure rights with respect to Inventions if unable to obtain your signature as described in paragraph 10.

[Year] RSU Agreement including Terms and Conditions

17

EX-12

Exhibit 12

Cigna Corporation

Computation Of Ratio Of Earnings To Fixed Charges

	Three Months Ended
	March 31,
(Dollars in millions)	2017		2016
Income before income taxes	$	890	$	819
Adjustments:
Income from equity investees, net of distributions	5		1
Loss attributable to noncontrolling interests	5		5
Income before income taxes, as adjusted	$	900	$	825
Fixed charges included in income:
Interest expense	$	62	$	63
Interest portion of rental expense	13		13
Total fixed charges included in income	$	75	$	76
Income available for fixed charges	$	975	$	901
RATIO OF EARNINGS TO FIXED CHARGES:	13.0		11.9

EX-31.1

Exhibit 31.1CERTIFICATION

I, DAVID M. CORDANI, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Cigna Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ David M. Cordani
	Chief Executive Officer
Date:	May 5, 2017

EX-31.2

Exhibit 31.2CERTIFICATION

I, THOMAS A. MCCARTHY, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Cigna Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Thomas A. McCarthy
	Chief Financial Officer
Date:	May 5, 2017

EX-32.1

Exhibit 32.1 Certification of Chief Executive Officer of Cigna Corporation pursuant to 18 U.S.C. Section 1350

I certify that, to the best of my knowledge and belief, the Quarterly Report on Form 10-Q of Cigna Corporation for the fiscal period ended March 31, 2017 (the “Report”):

(1)      complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Cigna Corporation.

/s/ David M. Cordani

David M. Cordani

Chief Executive Officer

May 5, 2017

EX-32.2

Exhibit 32.2 Certification of Chief Financial Officer of Cigna Corporation pursuant to 18 U.S.C. Section 1350

I certify that, to the best of my knowledge and belief, the Quarterly Report on Form 10-Q of Cigna Corporation for the fiscal period ended March 31, 2017 (the “Report”):

(1)      complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Cigna Corporation.

/s/ Thomas A. McCarthy

Thomas A. McCarthy

Chief Financial Officer

May 5, 2017

XML

Document and Entity Information - $ / shares	3 Months Ended
	Mar. 31, 2017	Apr. 15, 2017	Dec. 31, 2016
Document Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Entity Registrant Name	CIGNA Corporation
Entity Central Index Key	0000701221
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	CI
Entity Common Stock Shares Outstanding		256,014,619
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Well Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Common stock, par value per share	$ 0.25		$ 0.25

XML

Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues
Premiums	$ 8,103	$ 7,746
Fees and other revenues	1,223	1,201
Net investment income	303	272
Mail order pharmacy revenues	710	697
Realized investment gains (losses):
Other-than-temporary impairments on fixed maturities	(7)	(27)
Other realized investment gains (losses), net	53	(5)
Net realized investment gains (losses)	46	(32)
Total revenues	10,385	9,884
Benefits and Expenses
Global Health Care medical costs	4,985	4,761
Other benefit expenses	1,367	1,368
Mail order pharmacy costs	581	574
Other operating expenses	2,530	2,321
Amortization of other acquired intangible assets, net	32	41
Total benefits and expenses	9,495	9,065
Income before Income Taxes	890	819
Income taxes (benefits):
Current	286	294
Deferred	11	11
Total income taxes	297	305
Net Income	593	514
Less: Net Income (Loss) Attributable to Noncontrolling Interests	(5)	(5)
Shareholders' Net Income	$ 598	$ 519
Shareholders' Net Income Per Share:
Basic	$ 2.34	$ 2.04
Diluted	2.30	2.00
Dividends Declared Per Share	$ 0.04	$ 0.04

XML

Consolidated Statements of Shareholders' Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement Of Comprehensive Income
Shareholders' Net Income	$ 598	$ 519
Shareholders' other comprehensive income (loss), net of tax:
Net unrealized appreciation (depreciation) on securities	7	173
Net unrealized appreciation (depreciation) on derivatives	(3)	(3)
Net translation of foreign currencies	112	81
Postretirement benefits liability adjustment	14	11
Shareholders' other comprehensive income (loss), net of tax	130	262
Shareholders' comprehensive income (loss)	$ 728	$ 781

XML

Consolidated Statements of Total Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement Of Comprehensive Income
Shareholders' comprehensive income (loss)	$ 728	$ 781
Comprehensive income (loss) attributable to noncontrolling interests:
Net income (loss) attributable to redeemable noncontrolling interests	(2)	(1)
Net income (loss) attributable to other noncontrolling interests	(3)	(4)
Other comprehensive income (loss) attributable to redeemable noncontrolling interests	(2)	3
Total comprehensive (loss) attributable to noncontrolling interests	(7)	(2)
Total comprehensive income	$ 721	$ 779

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Investments:
Fixed maturities, at fair value (amortized cost, $20,639; $19,942)	$ 21,734	$ 20,961
Equity securities, at fair value (cost, $584; $583)	574	583
Commercial Mortgage Loans	1,752	1,666
Policy loans	1,431	1,452
Other long-term investments	1,465	1,462
Short-term investments	303	691
Total investments	27,259	26,815
Cash and cash equivalents	4,155	3,185
Premiums, accounts and notes receivable, net	3,154	3,077
Reinsurance recoverables	6,386	6,478
Deferred policy acquisition costs	1,982	1,818
Property and equipment	1,519	1,536
Deferred tax assets, net	263	304
Goodwill	5,982	5,980
Other assets, including other intangibles	2,250	2,227
Separate account assets	8,197	7,940
Total assets	61,147	59,360
Liabilities:
Contractholder deposit funds	8,415	8,458
Future policy benefits	9,840	9,648
Unpaid claims and claim expenses	5,006	4,917
Global Health Care medical costs payable	2,770	2,532
Unearned premiums	1,204	634
Total insurance and contractholder liabilities	27,235	26,189
Accounts payable, accrued expenses and other liabilities	6,667	6,414
Short-term debt	142	276
Long-term debt	4,621	4,756
Separate account liabilities	8,197	7,940
Total liabilities	46,862	45,575
Contingencies - Note 16
Redeemable noncontrolling interests	56	58
Shareholders' Equity
Common stock (par value per share, $0.25; shares issued, 296; authorized, 600)	74	74
Additional paid-in capital	2,912	2,892
Accumulated other comprehensive loss	(1,252)	(1,382)
Retained earnings	14,356	13,855
Less: treasury stock, at cost	(1,864)	(1,716)
Total shareholders' equity	14,226	13,723
Other noncontrolling interests	3	4
Total equity	14,229	13,727
Total liabilities and equity	$ 61,147	$ 59,360
Shareholders' Equity Per Share	$ 55.52	$ 53.42

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Millions, $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Consolidated Balance Sheets
Fixed maturities, at amortized cost	$ 20,639	$ 19,942
Equity securities, at cost	$ 584	$ 583
Common stock, par value per share	$ 0.25	$ 0.25
Common stock shares issued	296	296
Common stock shares authorized	600	600

XML

Statement of Changes in Total Equity - USD ($) $ in Millions	Total	Shareholders' Equity [Member]	Common Stock [Member]	Additional Paid In Capital [Member]	Accumulated Other Comprehensive Income [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Other noncontrolling interests [Member]
Total Equity, beginning of period at Dec. 31, 2015	$ 12,044	$ 12,035	$ 74	$ 2,859	$ (1,250)	$ 12,121	$ (1,769)	$ 9
Increase (Decrease) In Stockholders Equity [Roll Forward]
Effect of issuing stock for employee benefit plans	(15)	(15)		21		(89)	53
Other comprehensive income (loss)	262	262			262
Net income (loss)	515	519				519		(4)
Common dividends declared (per share: $0.04)	(10)	(10)				(10)
Repurchase of common stock	(110)	(110)					(110)
Other transactions impacting noncontrolling interest	(2)	(6)		(6)				4
Total Equity, end of period at Mar. 31, 2016	12,684	12,675	74	2,874	(988)	12,541	(1,826)	9
Beginning Balance at Dec. 31, 2015	69
Redeemable Noncontrolling Interests
Other comprehensive income (loss)	3
Net income (loss)	(1)
Other transactions impacting noncontrolling interest	2
Ending Balance at Mar. 31, 2016	73
Total Equity, beginning of period at Dec. 31, 2016	13,727	13,723	74	2,892	(1,382)	13,855	(1,716)	4
Increase (Decrease) In Stockholders Equity [Roll Forward]
Effect of issuing stock for employee benefit plans	38	38		23		(87)	102
Other comprehensive income (loss)	130	130			130
Net income (loss)	595	598				598		(3)
Common dividends declared (per share: $0.04)	(10)	(10)				(10)
Repurchase of common stock	(250)	(250)					(250)
Other transactions impacting noncontrolling interest	(1)	(3)		(3)				2
Total Equity, end of period at Mar. 31, 2017	14,229	$ 14,226	$ 74	$ 2,912	$ (1,252)	$ 14,356	$ (1,864)	$ 3
Beginning Balance at Dec. 31, 2016	58
Redeemable Noncontrolling Interests
Other comprehensive income (loss)	(2)
Net income (loss)	(2)
Other transactions impacting noncontrolling interest	2
Ending Balance at Mar. 31, 2017	$ 56

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities
Net Income		$ 593	$ 514
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		146	158
Realized investment (gains) losses		(46)	32
Deferred income taxes		11	11
Net changes in assets and liabilities, net of non-operating effects:
Premiums, accounts and notes receivable		(55)	(237)
Reinsurance recoverables		41	24
Deferred policy acquisition costs		(76)	(62)
Other assets		(22)	(57)
Insurance liabilities		868	507
Accounts payable, accrued expenses and other liabilities		(186)	(263)
Current income taxes		291	262
Distributions from partnership investments	[1]	45	27
Other, net		(31)	5
Net cash provided by (used in) operating activities	[1]	1,579	921
Proceeds from investments sold:
Fixed maturities and equity securities		414	361
Investment maturities and repayments:
Fixed maturities and equity securities		475	255
Commercial mortgage loans		21	18
Other sales, maturities and repayments (primarily short-term and other long-term investments)	[1]	667	75
Investments purchased or originated:
Fixed maturities and equity securities		(1,240)	(758)
Commercial mortgage loans		(107)	(1)
Other (primarily short-term and other long-term investments)		(256)	(198)
Property and equipment purchases, net		(91)	(112)
Net cash provided by (used in) investing activities	[1]	(117)	(360)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds		374	383
Withdrawals and benefit payments from contractholder deposit funds		(385)	(343)
Net change in short-term debt		(10)	(6)
Repayment of long-term debt		(250)	0
Repurchase of common stock		(239)	(139)
Issuance of common stock		38	10
Other, net		(43)	(51)
Net cash provided by (used in) financing activities		(515)	(146)
Effect of foreign currency rate changes on cash and cash equivalents		23	18
Net increase / (decrease) in cash and cash equivalents		970	433
Cash and cash equivalents, January 1		3,185	1,968
Cash and cash equivalents, March 31		4,155	2,401
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds		(8)	37
Interest paid		$ 70	$ 69

[1] As required in adopting Accounting Standard Update ("ASU") 2016-15, the Company retrospectively reclassified $27 million of cash distributions from partnership earnings from investing to operating activities for the first quarter of 2016. The comparable amount reported in operating activities in 2017 was $45 million. See Note 2 for further discussion.

XML

Description of Business

3 Months Ended

Mar. 31, 2017

Description Of Business [Abstract]

Description of Business

Note 1– Description of Business

Cigna Corporation, together with its subsidiaries (either individually or collectively referred to as “Cigna,” the “Company,” “we,” “our” or “us”) is a global health services organization dedicated to a mission of helping individuals improve their health, well-being and sense of security. To execute on our mission, Cigna's strategy is to “Go Deep”, “Go Global” and “Go Individual” with a differentiated set of medical, dental, disability, life and accident insurance and related products and services offered by our insurance and other subsidiaries. The majority of these products are offered through employers and other groups (e.g. governmental and non-governmental organizations, unions and associations). Cigna also offers commercial health and dental insurance, Medicare and Medicaid products and health, life and accident insurance coverages to individuals in the U.S. and selected international markets. In addition to its ongoing operations described above, Cigna also has certain run-off operations.

The financial results of the Company's businesses are reported in the following segments:

Global Health Care aggregates the Commercial and Government operating segments due to their similar economic characteristics, products and services and regulatory environment:

• The Commercial operating segment encompasses both the U.S. commercial and certain international health care businesses serving employers and their employees, other groups and individuals. Products and services include medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services to insured and self-insured customers.

• The Government operating segment offers Medicare Advantage and Medicare Part D plans to seniors. This segment also offers Medicaid plans in selected markets.

Global Supplemental Benefits includes supplemental health, life and accident insurance products offered in selected international markets and in the U.S.

Group Disability and Life provides group long-term and short-term disability, group life, accident and specialty insurance products and related services.

Other Operations consist of:

• corporate-owned life insurance (“COLI”);
• run-off reinsurance business that is predominantly comprised of guaranteed minimum death benefit (“GMDB”) and guaranteed minimum income benefit (“GMIB”) business effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire”) in 2013;

• deferred gains recognized from the 1998 sale of the individual life insurance and annuity business and the 2004 sale of the retirement benefits business; and
• run-off settlement annuity business.

Corporate reflects amounts not allocated to operating segments, such as net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), interest on uncertain tax positions, certain litigation matters, intersegment eliminations, compensation cost for stock options, excess tax benefits on stock compensation, expense associated with frozen pension plans and certain costs for corporate projects, including overhead.

XML

Summary of Signficant Accounting Policies

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note 2 – Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements include the accounts of Cigna Corporation and its subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation.  These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Amounts recorded in the Consolidated Financial Statements necessarily reflect management's estimates and assumptions about medical costs, investment valuation, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment. Certain reclassifications may be made to prior year amounts to conform to the current presentation.

These interim Consolidated Financial Statements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported. The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company's 2016 Annual Report on Form 10-K (“2016 Form 10-K”). The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates. This and certain other factors, including the seasonal nature of portions of the health care and related benefits business as well as competitive and other market conditions, call for caution in estimating full year results based on interim results of operations.

Recent Accounting Pronouncements

The Company's 2016Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future.

The following tables provide information about recently adopted and recently issued or changed accounting guidance (applicable to Cigna) that have occurred since the Company filed its 2016 Form 10-K.

Recently Adopted Accounting Guidance

Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (Accounting Standards Update (“ASU”) 2016-15) Early adopted as of December 31, 2016	Specifies how certain transactions should be classified in the statement of cash flows. While the standard addresses multiple types of transactions, only a change in the treatment of distributions from equity method investments impacted the Company.
	Effects of adoption: using the nature of distribution approach, the Company reported $45 million of cash receipts related to distributions from partnership earnings in operating activities for the three months ended March 31, 2017. The Company reclassified $27 million for the three months ended March 31, 2016 from investing to operating activities in the Consolidated Statements of Cash Flows.

Recently Issued Accounting Guidance Not Yet Adopted

Accounting Standard and Effective Date Applicable for Cigna	Requirements and Expected Effects of New Guidance Not Yet Adopted
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) Required as of January 1, 2018	Requires employers to separate the service cost component from the other components of net benefit cost. Under the new guidance, only service cost is eligible for capitalization (either deferred policy acquisition costs or capitalized software). The change in the capitalization rule is to be applied prospectively upon adoption. In addition, the income statement caption(s) where each component of net benefit cost is presented must be disclosed.
	Expected effects: the Company expects the effect of this new guidance to be immaterial to its results of operations.
Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) Required as of January 1, 2018	Requires:
		• Entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method • Cumulative effect adjustment to the beginning balance of retained earnings at adoption
	Expected effects:
		• Certain limited partnership interests carried at cost of $240 million as of March 31, 2017 will be reported at fair value at adoption • An increase to retained earnings of approximately $50 million, after-tax, if implemented as of March 31, 2017. Actual cumulative effect adjustment will depend on investments held and market conditions at adoption.
Revenue from Contracts with Customers (ASU 2014-09 and related amendments) Required as of January 1, 2018, with early adoption permitted as of January 1, 2017	Requires:
		• Companies to estimate and allocate the expected customer contract revenues among distinct goods or services based on relative standalone selling prices • Revenues to be recognized as goods or services are delivered • Extensive new disclosures including the presentation of additional categories of revenues and information about related contract assets and liabilities • Adoption through retrospective restatement with or without using certain practical expedients or adoption with a cumulative effect adjustment
	Expected effects:
		• Applies to the Company’s non-insurance, administrative service contracts but does not apply to certain contracts within the scope of other GAAP, such as insurance contracts • The Company currently expects to adopt the new guidance as of January 1, 2018 through retrospective restatement • The Company does not currently expect the adoption of the new guidance to have a material impact to its pattern of revenue recognition or net income • The Company is continuing to evaluate the new requirements. Specifically, the Company is evaluating the combination of contract guidance for certain customers when the Company provides both insurance and non-insurance products, the deferral of revenue for services provided after the termination of certain administrative contracts and the Company’s status as principal or agent for certain performance obligations.

XML

Mergers and Acquisitions

3 Months Ended

Mar. 31, 2017

Acquisitions and Dispositions [Abstract]

Acquisitions and Dispositions

Note 3 – Mergers and Acquisitions

Proposed Merger

On July 23, 2015, the Company entered into a merger agreement with Anthem, Inc. (“Anthem”) and Anthem Merger Sub Corp. (“Merger Sub”), a direct wholly-owned subsidiary of Anthem.

The merger agreement provides (a) for the merger of the Company and Merger Sub, with the Company continuing as the surviving corporation and (b) if certain tax opinions are delivered, immediately following the completion of the initial merger, for the surviving corporation to be merged with and into Anthem, with Anthem continuing as the surviving corporation (collectively, the “merger”). Subject to certain terms, conditions, and customary operating covenants, each share of Cigna common stock issued and outstanding immediately prior to the effective time of the merger would be converted into the right to receive (a) $103.40 in cash, without interest, and (b) 0.5152 of a share of Anthem common stock. The closing price of Anthem common stock on May 4, 2017 was $179.89.

At special shareholders' meetings held in December 2015, Cigna shareholders approved the merger and Anthem shareholders approved the issuance of shares of Anthem common stock in connection with the merger. Completing the merger remains subject to certain customary conditions, including the receipt of certain necessary governmental and regulatory approvals and the absence of a legal restraint prohibiting the merger. Completing the merger is not subject to a financing condition.

On July 21, 2016, the U.S. Department of Justice (“DOJ”) and certain state attorneys general filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia (the “District Court”) seeking to block the merger and, on January 4, 2017, the parties concluded the District Court trial.

On January 18, 2017, the Company received a written notice from Anthem seeking to extend the termination date of the merger agreement from January 31, 2017 to April 30, 2017.

On February 8, 2017, the District Court issued an order enjoining the proposed merger. Anthem filed a notice of appeal of the District Court's order with the U.S. Court of Appeals for the District of Columbia Circuit (the “Appeals Court”) and requested an expedited appeal.

On February 14, 2017, the Company delivered a notice to Anthem terminating the merger agreement and filed suit in the Delaware Court of Chancery (the “Chancery Court”) seeking, among other things, declaratory judgment that Cigna's termination of the merger agreement is lawful and that Anthem does not have the right to extend the merger agreement termination date. Later that day, Anthem filed a lawsuit in the Chancery Court against the Company seeking, among other things, a temporary restraining order to enjoin Cigna from terminating the merger agreement, specific performance and damages, and, on February 15, 2017, the Chancery Court issued an order temporarily enjoining the Company from terminating the merger agreement. This order will be subject to further review at a preliminary injunction hearing scheduled for May 8, 2017.

On February 17, 2017, the Appeals Court granted Anthem's motion for an expedited appeal. That same day, the Company filed its notice of appeal of the District Court's order enjoining the merger with the Appeals Court.Oral arguments were heard on March 24, 2017.On April 28, 2017, the Appeals Court affirmed the decision of the District Court.On May 5, 2017, Anthem filed a petition for a writ of certiorari with the United States Supreme Court seeking appeal of the U.S. Court of Appeals decision affirming the District Court's order enjoining the merger.

The merger agreement contains customary covenants, including covenants that Cigna conduct its business in the ordinary course during the period between entering into the merger agreement and closing. In addition, Cigna's ability to take certain actions prior to closing without Anthem's consent is subject to certain limitations. These limitations relate to, among other matters, the payment of dividends, capital expenditures, the payment or retirement of indebtedness or the incurrence of new indebtedness, settlement of material claims or proceedings, mergers or acquisitions, and certain employment-related matters.

The Company incurred $63 million pre-tax ($49 million after-tax) for the three months ended March 31, 2017 in costs directly related to the proposed merger. Comparable merger-related costs for the three months ended March 31, 2016were $40 million pre-tax ($36million after-tax). Since entering into this merger agreement in 2015, the Company has incurred pre-tax merger-related costs of approximately $295 million thatprimarily consisted of fees for legal, advisory and other professional services. If the merger is consummated, a significant portion of these merger-related costs would not be deductible for federal income tax purposes. If the merger is not consummated, these otherwise non-deductible costs would become tax deductible for federal income tax purposes, resulting in an incremental tax benefit of approximately $60 million.

XML

Earnings Per Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

Note 4–Earnings Per Share (“EPS”)

Basic and diluted earnings per share were computed as follows:

	Three Months Ended
	March 31, 2017						March 31, 2016
(Shares in thousands, dollars in millions, except per share amounts)			Effect of						Effect of
	Basic		Dilution		Diluted		Basic		Dilution		Diluted
Shareholders' net income	$	598			$	598	$	519			$	519
Shares:
Weighted average		255,680				255,680		254,822				254,822
Common stock equivalents				4,094		4,094				4,625		4,625
Total shares		255,680		4,094		259,774		254,822		4,625		259,447
EPS	$	2.34	$	(0.04)	$	2.30	$	2.04	$	(0.04)	$	2.00

The followingoutstanding employee stock options were notincluded in the computation of diluted earnings per share for the three months ended March 31, 2017 and 2016 because their effect was anti-dilutive.

	Three Months Ended
(In millions)	March 31, 2017	March 31, 2016
Anti-dilutive options	2.5	1.3

The Company held 39,928,289shares of common stock in Treasury as of March 31, 2017, and 39,638,264 shares as of March 31, 2016.

XML

Debt

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Debt

Note 5― Debt

The outstanding amounts of debt and capital leases were as follows:

	March 31,		December 31,
(In millions)	2017		2016
Short-term:
Current maturities of long-term debt	$	131	$	250
Other, including capital leases		11		26
Total short-term debt	$	142	$	276
Long-term:
$131 million, 6.35% Notes due 2018	$	-	$	131
$250 million, 4.375% Notes due 2020 (1)		252		252
$300 million, 5.125% Notes due 2020 (1)		301		301
$78 million, 6.37% Notes due 2021		78		78
$300 million, 4.5% Notes due 2021 (1)		301		302
$750 million, 4% Notes due 2022		744		744
$100 million, 7.65% Notes due 2023		100		100
$17 million, 8.3% Notes due 2023		17		17
$900 million, 3.25% Notes due 2025		893		893
$300 million, 7.875% Debentures due 2027		299		299
$83 million, 8.3% Step Down Notes due 2033		82		82
$500 million, 6.15% Notes due 2036		498		498
$300 million, 5.875% Notes due 2041		296		296
$750 million, 5.375% Notes due 2042		743		743
Other, including capital leases		17		20
Total long-term debt	$	4,621	$	4,756

(1)The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 11 for further information about the Company's interest rate risk management and these derivative instruments.

The Company repaid $250 million of long-term notes that matured in the first quarter of 2017.

The Company has afive-year revolving credit and letter of credit agreement for $1.5billion that permits up to $500 million to be used for letters of credit. This agreement extends through December 12, 2019and is diversified among 16 banks, with three banks each having 12%of the commitment and the remainder spread among 13 banksin varying amounts. The credit agreement includes options subject to consent by the administrative agent and the committing banks to increase the commitment amount to $2 billion and to extend the term past December 12, 2019. The credit agreement is available for general corporate purposes, including for the issuance of letters of credit. The credit agreement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – which is total consolidated debt to total consolidated capitalization (each as defined in the credit agreement) – to be greater than 0.50. The leverage ratio calculation excludes the following items that are included in accumulated other comprehensive loss on the Company's consolidated balance sheets: net unrealized appreciation on fixed maturities and the portion of the post-retirement benefits liability adjustment attributable to pension.

In addition to the $4.8billion of debt outstanding as of March 31, 2017, the Company had $10.5billion of borrowing capacity within the maximum debt coverage covenant in the credit agreement. This additional borrowing capacity includes the $1.5 billion available under the credit agreement. Letters of credit outstanding as of March 31, 2017totaled $13 million.

The Company was in compliance with its debt covenants as of March 31, 2017.

XML

Global Health Care Medical Costs Payable

3 Months Ended

Mar. 31, 2017

Global Health Benefits Segment [Member]

Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]

Global Health Care Medical Costs Payable

Note 6— Global Health Care MedicalCosts Payable

Medical costs payable for the Global Health Care segment reflects estimates of the ultimate cost of claims that have been incurred but not reported, those that have been reported but not yet paid (reported claims in process), and other medical care expenses and services payablethat are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities.See Note 7 to the Consolidated Financial Statements in the Company's 2016 Form 10-K for further information about the assumptions and estimates used to establish this liability.

Components of the Global Health Care medical costs payable balances as of March 31 were as follows:

	March 31,		March 31,
(In millions)	2017		2016
Incurred but not reported	$	2,088	$	1,960
Reported claims in process		542		506
Physician incentives and other medical care expenses and services payable		140		180
Global Health Care medical costs payable	$	2,770	$	2,646

Activity in medical costs payable was as follows:

	Three Months Ended
	March 31,		March 31,
(In millions)	2017		2016
Beginning balance	$	2,532	$	2,355
Less: Reinsurance and other amounts recoverable		275		243
Beginning balance, net		2,257		2,112
Incurred costs related to:
Current year		5,161		4,825
Prior years		(176)		(64)
Total incurred		4,985		4,761
Paid costs related to:
Current year		3,219		2,985
Prior years		1,509		1,449
Total paid		4,728		4,434
Ending balance, net		2,514		2,439
Add: Reinsurance and other amounts recoverable		256		207
Ending balance	$	2,770	$	2,646

Reinsurance and other amounts recoverable includesamounts due from reinsurersand policyholders to cover incurred but not reported and pending claims for certain business where the Company administers the plan benefits but the right of offset does not exist. See Note 8 for additional information on reinsurance.

For the periods ended March 31, incurred costs related to prior years were attributable to the following factors:

	Three Months Ended
(Dollars in millions)	March 31, 2017			March 31, 2016
		$	%(1)			$	%(2)
Actual completion factors	$	78	0.4	%	$	51	0.3	%
Medical cost trend		98	0.5			28	0.1
Other (3)		-	-			(15)	(0.1)
Total favorable (unfavorable) variance	$	176	0.9	%	$	64	0.3	%
(1) Percentage of current year incurred costs as reported for the year ended December 31, 2016.
(2) Percentage of current year incurred costs as reported for the year ended December 31, 2015.
(3) Other amounts in 2016 related to increased medical costs in the Government segment resulting from additional provider risk sharing.

Incurred costs related to prior years in the table above, although adjusted through shareholders' net income, do not directly correspond to an increase or decrease to shareholders' net income. The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established for moderately adverse conditions are not considered as impacting shareholders' net income if they are offset by increases in the current year provision for moderately adverse conditions.

The net impact of prior year development on shareholders' net income was a $61 million increase for the three months ended March 31, 2017 compared with a $14 million increase for the three months ended March 31, 2016. Favorable prior year development implies primarily lower than expected utilization of medical services.

XML

Liabilities for Unpaid Claims and Claims Expenses

3 Months Ended

Mar. 31, 2017

Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member]

Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]

Liabilities for Unpaid Claims and Claims Expenses

Note7―Liabilities for Unpaid Claims and Claim Expenses

The following information relates to the Company's unpaid claims and claim expense liabilities that are related to short-duration insurance contracts.See Note 8 to the Consolidated Financial Statements in the Company's 2016 Form 10-K for further information about the assumptions and estimates used to establish this liability.

The liability for unpaid claims and claim expenses by segment as of March 31 is as follows:

	March 31,		March 31,
(In millions)	2017		2016
Group Disability and Life	$	4,384	$	4,146
Global Supplemental Benefits		425		367
Other Operations		197		211
Unpaid claims and claim expenses	$	5,006	$	4,724

Activity in the Company's Group Disability and Life and the Global Supplemental Benefits segments' liabilities for unpaid claims and claim expenses are presented in the following table. Liabilities associated with the Company's Other Operations segment are excluded because they pertain to obligations for long-duration insurance contracts or, if short-duration, the liabilities have been fully reinsured.

	Three Months Ended
(In millions)	March 31, 2017		March 31, 2016
Beginning balance	$	4,726	$	4,359
Less: Reinsurance		121		115
Beginning balance, net		4,605		4,244
Incurred claims related to:
Current year		1,148		988
Prior years:
Interest accretion		43		43
All other incurred		(64)		105
Total incurred		1,127		1,136
Paid claims related to:
Current year		371		327
Prior years		691		660
Total paid		1,062		987
Foreign currency		16		5
Ending balance, net		4,686		4,398
Add: Reinsurance		123		115
Ending balance	$	4,809	$	4,513

Reinsurance in the table above reflects amounts due from reinsurers related to unpaid claims liabilities. The Company's insurance subsidiaries enter into agreements with other companies primarily to limit losses from large exposures and to permit recovery of a portion of incurred losses. See Note 8 for additional information on reinsurance.

The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts. Interest earned on assets backing these liabilities is an integral part of pricing and reserving, and is therefore the basis for determining the rate used to discount these liabilities. Accordingly, interest accreted on prior year balances is shown as a separate component of prior year incurred claims. This interest is calculated by applying the average discount rateused in determining the liability balance to the average liability balance over the period. The remaining prior year incurred claims amount primarily reflects updates to the Company's liability estimates and variances between actual experience during the period relative to the assumptions and expectations reflected in determining the liability. Assumptions reflect the Company's expectations over the life of the book of business and will vary from actual experience in any period, both favorably and unfavorably, with variation in resolution rates being the most significant driver for the long-term disability business. Favorable prior year incurred claims reported in 2017largely reflect improved claim resolution rates. Unfavorable prior year incurred claims reported in 2016 included the impact of modifications made to our disability claims management process and a period of elevated life claims.

XML

Reinsurance

3 Months Ended

Mar. 31, 2017

Reinsurance Disclosures [Abstract]

Reinsurance

Note 8― Reinsurance

The Company's insurance subsidiaries enter into agreements with other insurance companies to assume and cede reinsurance.  Reinsurance is ceded primarily to limit losses from large exposures and to permit recovery of a portion of direct or assumed losses. Reinsurance is also used in acquisition and disposition transactions when the underwriting company is not being acquired. Reinsurance does not relieve the originating insurer of liability.  The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk.

Reinsurance Recoverables

The majority of the Company's reinsurance recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired. Components of the Company's reinsurance recoverables are presented below:

(In millions)
			March 31,		December 31,		Collateral and Other Terms
Line of Business		Reinsurer(s)	2017		2016		at March 31, 2017
Ongoing operations:
	Global Health Care, Global Supplemental Benefits, Group Disability and Life	Various	$	478	$	478	Recoverables from approximately 80 reinsurers including the U.S. Government, used in the ordinary course of business. Current balances range from less than $1 million up to $93 million. Excluding the recoverable from the U.S. Government of $39 million, over 60% of the balance is from companies rated investment grade by Standard & Poor's, and 13% is secured by assets in trusts or letters of credit.
	Total recoverables related to ongoing operations			478		478
Acquisition, disposition or runoff activities:
	Individual Life and Annuity (sold in 1998)	Lincoln National Life and Lincoln Life & Annuity of New York		3,551		3,586	Both companies' ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance.
	GMDB	Berkshire		1,052		1,085	100% secured by assets in a trust.
		Other		42		44	100% secured by assets in a trust or letters of credit.
	Retirement Benefits Business (sold in 2004)	Prudential Retirement Insurance and Annuity		904		921	100% secured by assets in a trust.
	Supplemental Benefits Business (2012 acquisition)	Great American Life		293		297	100% secured by assets in a trust.
	Other run-off reinsurance	Various		66		67	100% secured by assets in trusts.
	Total recoverables related to acquisition, disposition or runoff activities			5,908		6,000
Total reinsurance recoverables			$	6,386	$	6,478

The Company bears the risk of loss if its reinsurers and retrocessionaires do not meet or are unable to meet their reinsurance obligations to the Company. The Company reviews its reinsurance arrangements and establishes reserves against the recoverablesif recovery is not considered probable. As of March 31, 2017, the Company's recoverables were net of a reserve of approximately $3 million.

Effects of Reinsurance

In the Company's Consolidated Statements of Income, premiums were reported net of amounts ceded to reinsurers and Global Health Care medical costs and other benefit expenses were reported net of reinsurance recoveries in the following amounts:

	Three Months Ended
	March 31,
(In millions)	2017		2016
Ceded premiums:
Individual life insurance and annuity business sold	$	39	$	41
Other		81		95
Total ceded premiums	$	120	$	136
Reinsurance recoveries:
Individual life insurance and annuity business sold	$	70	$	68
Other		29		96
Total reinsurance recoveries	$	99	$	164

The decrease in reinsurance recoveries in 2017is primarily due to the ceded GMDB business. The ceded reserves declined during the three months ended March 31, 2017due primarily to favorable equity market conditions, while the ceded reserves increased during the three months endedMarch 31, 2016 due to changes in the capital market assumptions that are used to calculate the reserves.

Effective Exit of GMDB and GMIB Business

In 2013, the Company entered into an agreement with Berkshire to effectively exit the GMDB and GMIB business via a reinsurance transaction. Berkshire reinsured 100% of the Company's future claim payments in this business, net of other reinsurance arrangements existing at that time. The Berkshire reinsurance agreement is subject to an overall limit with approximately $3.5 billion remaining as of March 31, 2017.

A discussion of each of these businesses follows. While GMDB is accounted for as reinsurance, GMIB assets and liabilities are reported as derivatives at fair value as discussed below. Accordingly, GMIB assets are reported in other assets, including intangibles, and GMIB liabilities are reported in accounts payable, accrued expenses and other liabilities.

GMDB

The Company estimates the gross liability and reinsurance recoverable with an internal model based on the Company's experience and future expectations over anextended period, consistent with the long-term nature of this product. As a result of the reinsurance transaction, reserve increases have acorresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overallBerkshire limit (including the GMIB asset presented below). The ending net retained reserve covers ongoing administrative expenses, as well as minor claim exposure retained by the Company.

Because the product is premium deficient, the Company records an increase to the net retained reserve if it is inadequate based on the model.

Activity in future policy benefit reserves for the GMDB business was as follows:

	For the period ended
	March 31,		December 31,
(In millions)	2017		2016
Balance at January 1	$	1,224	$	1,252
Add: Unpaid claims		16		18
Less: Reinsurance and other amounts recoverable		1,129		1,164
Balance at January 1, net		111		106
Add: Incurred benefits		-		4
Less: Paid benefits (recoveries)		(1)		(1)
Ending balance, net		112		111
Less: Unpaid claims		18		16
Add: Reinsurance and other amounts recoverable		1,094		1,129
Ending balance	$	1,188	$	1,224

Benefits paid and incurred are net of ceded amounts.

The table below presents the account value, net amount at risk and number of underlying contractholders for guarantees assumed by the Company in the event of death. The net amount at risk is the amount that the Company would have to pay if all contractholders died as of the specified date. Unless the Berkshire reinsurance limit is exceeded, the Company should be reimbursed in full for these payments.

(Dollars in millions, excludes impact of reinsurance ceded)	March 31, 2017		December 31, 2016
Account value	$	10,755	$	10,650
Net amount at risk	$	2,335	$	2,458
Number of contractholders		280,000		285,000

GMIB

In this business, the Company reinsured contracts with issuers of GMIB products. The Company's exposure represents the excess of a contractually guaranteed amount over the level of variable annuity account values. Payment by the Company depends on the actual account value in the underlying mutual funds and the level of interest rates when the contractholders elect to receive minimum income payments that must occur within 30 days of a policy anniversary after the appropriate waiting period. The Company has purchased retrocessional coverage (“GMIB assets”) for these contracts.

The Company reports GMIB liabilities and assets as derivatives at fair value because cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments.

As of March 31, 2017, there were three reinsurers for GMIB as follows:

(In millions)
		March 31,		December 31,		Collateral and Other Terms
Line of Business	Reinsurer(s)	2017		2016		at March 31, 2017
GMIB	Berkshire	$	360	$	370	100% secured by assets in a trust.
	Sun Life Assurance Company of Canada		220		227
	Liberty Re (Bermuda) Ltd.		197		202	100% secured by assets in a trust.
Total GMIB recoverables reported in other assets		$	777	$	799

Assumptions used in fair value measurement. The Company estimates the fair value of the assets and liabilities for GMIB contracts by calculating the results for many scenarios run through a model utilizing various assumptions. The only assumption expected to impact future shareholders' net income is non-performance risk. The non-performance risk adjustment reflects a market participant's view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company, and (b) the GMIB assets to be paid by the reinsurers, after considering collateral.

Other assumptions that affect GMIB assets and liabilities include capital market assumptions (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments) and future annuitant behavior (including mortality, lapse, and annuity election rates). As certain assumptions used to estimate fair values for these contracts are largely unobservable (primarily related to future annuitant behavior), the Company classifies GMIB assets and liabilities in Level 3 in the fair value hierarchy presented in Note 9.

The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to calculate the non-performance risk of the reinsurers, would result in higher fair value measurements. A change in one of these assumptions is not necessarily accompanied by a change in another assumption.

GMIB guarantees.Future payments are not fixed and determinable under the terms of these contracts. Accordingly, the Company calculated exposure, without considering any reinsurance coverage, using the following hypothetical assumptions:

• no annuitants surrendered their accounts;
• all annuitants lived to elect their benefit;
• all annuitants elected to receive their benefit on the next available date (2017 through 2021); and
• all underlying mutual fund investment values remained at the March 31, 2017 value of $818million with no future returns.

The Company has reinsurance coverage in place that covers the exposures on these contracts. Using these hypothetical assumptions, GMIB exposure is $665 million, which is lower than the recorded liability for GMIB calculated using fair value assumptions.

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair value measurements

Note9―Fair Value Measurements

The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, such as when impaired.

Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor.

The Company's financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset's or a liability's classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument's fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).

The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair value. The internal pricing methods are performed by the Company's investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models.

The Company is responsible for determining fair value, as well as for assigningthe appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. The Company reviews methodologies, processes and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. Annually, we conduct an on-site visit of the most significant pricing service to review their processes, methodologies and controls. This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process.

Financial Assets and Financial Liabilities Carried at Fair Value

The following tables provide information as of March 31, 2017 and December 31, 2016 about the Company's financial assets and liabilities carried at fair value. Separate account assetsthat are also recorded at fair value on the Company's Consolidated Balance Sheets are reported separately under the heading “separate account assets” as gains and losses related to these assets generally accrue directly to policyholders.

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions)	(Level 1)		(Level 2)		(Level 3)		Total
March 31, 2017
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	372	$	525	$	-	$	897
State and local government		-		1,419		-		1,419
Foreign government		-		2,273		39		2,312
Corporate		-		16,144		483		16,627
Mortgage and other asset-backed		-		324		155		479
Total fixed maturities (1)		372		20,685		677		21,734
Equity securities		402		122		50		574
Subtotal		774		20,807		727		22,308
Short-term investments		-		303		-		303
GMIB assets		-		-		777		777
Other derivative assets		-		4		-		4
Total financial assets at fair value, excluding separate accounts	$	774	$	21,114	$	1,504	$	23,392
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	761	$	761
Other derivative liabilities		-		2		-		2
Total financial liabilities at fair value	$	-	$	2	$	761	$	763
(1) Fixed maturities includes $543 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $14 million of appreciation for securities classified in Level 3. See Note 10 for additional information.
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions)	(Level 1)		(Level 2)		(Level 3)		Total
December 31, 2016
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	374	$	503	$	-	$	877
State and local government		-		1,435		-		1,435
Foreign government		-		2,066		47		2,113
Corporate		-		15,552		498		16,050
Mortgage and other asset-backed		-		329		157		486
Total fixed maturities (1)		374		19,885		702		20,961
Equity securities		396		113		74		583
Subtotal		770		19,998		776		21,544
Short-term investments		-		691		-		691
GMIB assets		-		-		799		799
Other derivative assets		-		10		-		10
Total financial assets at fair value, excluding separate accounts	$	770	$	20,699	$	1,575	$	23,044
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	780	$	780
Other derivative liabilities		-		5		-		5
Total financial liabilities at fair value	$	-	$	5	$	780	$	785
(1) Fixed maturities includes $524 million of net appreciation required to adjust future policy benefits for run-off settlement annuity business including $14 million of appreciation for securities classified in Level 3.

Level 1 Financial Assets

Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date.  Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets.

Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities.Given the narrow definition of Level 1 and the Company's investment asset strategy to maximize investment returns, a relatively small portion of the Company's investment assets are classified in this category.

Level 2 Financial Assets and Financial Liabilities

Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument.  Such other inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.

Fixed maturities and equity securities.Approximately93% of the Company's investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks.  Because many fixed maturities do not trade daily, third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics. When recent trades are not available, pricing models are used to determine these prices.  These models calculate fair values by discounting future cash flows at estimated market interest rates.  Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events.  For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating.

Nearly all of these instruments are valued using recent trades or pricing models. Less than 1% of the fair value of investments classified in Level 2 represents foreign bonds thatare valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice.

Short-term investments are carried at fair value which approximates cost. On a regular basis, the Company compares market prices for these securities to recorded amounts to validate that current carrying amounts approximate exit prices. The short-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2.

Other derivatives classified in Level 2 represent over-the-counter instruments such as interest rate and foreign currency swap contracts.  Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices.  Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives.  However, the Company is largely protected by collateral arrangements with counterpartiesand determined that no adjustment for credit risk was required as of March 31, 2017 or December 31, 2016.  Level 2 also includes exchange-traded interest rate swap contracts. Credit risk related to the clearinghouse counterparty and the Company is considered minimal when estimating the fair values of these derivatives because of upfront margin deposits and daily settlement requirements. The nature and use of these other derivatives are described in Note 11.

Level 3 Financial Assets and Financial Liabilities

Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement.  Unobservable inputs reflect the Company's best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.

The Company classifies certain newly issued, privately-placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3.Approximately 3% of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category.

Fair values ofmortgage and other asset-backed securities, corporate and government fixed maturities are primarily determined using pricing models that incorporate the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads and liquidity of assets with similar characteristics.  For mortgage and other asset-backed securities, inputs and assumptions for pricing may also include collateral attributes and prepayment speeds.  Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation, as well as the issuer's financial statements.

Quantitative Information about Unobservable Inputs

The following tables summarize the fair value and significant unobservable inputs used in pricing the following securities that were developed directly by the Company as of March 31, 2017 and December 31, 2016. The range and weighted average basis point amounts (“bps”) for fixed maturity spreads (adjustment to discount rates) and price-to-earnings multiples for equity investments reflect the Company's best estimates of the unobservable adjustments a market participant would make to calculate these fair values.

Mortgage and other asset-backed securities.The significant unobservable inputs used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spreads. When there is limited trading activity for the security, an adjustment for liquidity is made as of the measurement date that considers current market conditions, issuer circumstances and complexity of the security structure. An adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral's characteristics and their proportional cash flows supporting the bond obligations. The resulting wide range of unobservable adjustments in the table below is due to the varying liquidity and quality of the underlying collateral, ranging from high credit quality to below investment grade.

Corporate and government fixed maturities.The significant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. When there is limited trading activity for the security, an adjustment is needed to reflect current market conditions and issuer circumstances.

Equity securities.The significant unobservable input used to value the following equity securities is a multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”). These securities are comprised of private equity investments with limited trading activity and therefore a ratio of EBITDA is used to estimate value based on company circumstances and relative risk characteristics.

			Unobservable Input	Unobservable Adjustment Range (Weighted Average)
(Fair value in millions)		Fair Value
As of March 31, 2017
Fixed maturities:
Mortgage and other asset-backed securities	$	155	Liquidity	60 - 340 (90) bps
			Weighting of credit spreads	170 - 450 (230) bps
Corporate and government fixed maturities		498	Liquidity	70 - 2,550 (340) bps
Total fixed maturities		653
Equity securities		50	Price-to-EBITDA multiples	5.0 - 12.0 (8.3)
Subtotal		703
Securities not priced by the Company(1)		24
Total Level 3 securities	$	727
As of December 31, 2016
Fixed maturities:
Mortgage and other asset-backed securities	$	157	Liquidity	60 - 330 (90) bps
			Weighting of credit spreads	160 - 470 (230) bps
Corporate and government fixed maturities		490	Liquidity	80 - 1,300 (340) bps
Total fixed maturities		647
Equity securities		74	Price-to-EBITDA multiples	4.2 - 11.6 (8.5)
Subtotal		721
Securities not priced by the Company(1)		55
Total Level 3 securities	$	776
(1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.

Significant increases in fixed maturity spreads would result in lower fair value measurements while decreases in these inputs would result inhigher fair value measurements. Significant decreases in equity price-to-EBITDA multiples would result in lower fair value measurements while increases in these inputs would result in higher fair value measurements. Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input.

GMIB contracts.See discussion in Note 8.

Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value

The following tables summarize the changes in financial assets and financial liabilities classified in Level 3 for thethree months endedMarch 31, 2017 and 2016.  Separate account asset changes are reported separately under the heading “separate account assets” as the changes in fair values of these assets accrue directly to the policyholders. Gains and losses reported in these tables may include net changes in fair value that are attributable to both observable and unobservable inputs.

	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)
For the Three Months Ended March 31, 2017
Balance at January 1, 2017	$	776	$	799	$	(780)	$	19
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		(11)		11		-
Other		23		1		(4)		(3)
Total gains (losses) included in shareholders' net income		23		(10)		7		(3)
Losses included in other comprehensive income		(8)		-		-		-
Gains required to adjust future policy benefits for settlement annuities (1)		-		-		-		-
Purchases, sales and settlements:
Purchases		25		-		-		-
Sales		(47)		-		-		-
Settlements		(27)		(12)		12		-
Total purchases, sales and settlements		(49)		(12)		12		-
Transfers into/(out of) Level 3:
Transfers into Level 3		40		-		-		-
Transfers out of Level 3		(55)		-		-		-
Total transfers into/(out of) Level 3		(15)		-		-		-
Balance at March 31, 2017	$	727	$	777	$	(761)	$	16
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	(6)	$	(10)	$	7	$	(3)
(1) Amounts do not accrue to shareholders.
	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)
For the Three Months Ended March 31, 2016
Balance at January 1, 2016	$	726	$	907	$	(885)	$	22
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		61		(61)		-
Other		(25)		(1)		(5)		(6)
Total gains (losses) included in shareholders' net income		(25)		60		(66)		(6)
Losses included in other comprehensive income		-		-		-		-
Gains required to adjust future policy benefits for settlement annuities (1)		11		-		-		-
Purchases, sales and settlements:
Purchases		24		-		-		-
Sales		-		-		-		-
Settlements		(11)		(10)		10		-
Total purchases, sales and settlements		13		(10)		10		-
Transfers into/(out of) Level 3:
Transfers into Level 3		128		-		-		-
Transfers out of Level 3		(61)		-		-		-
Total transfers into/(out of) Level 3		67		-		-		-
Balance at March 31, 2016	$	792	$	957	$	(941)	$	16
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	(25)	$	60	$	(66)	$	(6)
(1) Amounts do not accrue to shareholders.

As noted in the preceding tables, total gains and losses included in shareholders' net income are reflected in the following captions in the Consolidated Statements of Income:

• Realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities and realized investment gains (losses) for the impact of changes in non-performance risk related to GMIB assets and liabilities, similar to hedge ineffectiveness; and
• Other operating expenses for amounts related to GMIB assets and liabilities (GMIB fair value gain/loss), except for the impact of changes in non-performance risk.

In the tables above, gains and losses included in other comprehensive income are reflected in net unrealized appreciation (depreciation) on securities in the Consolidated Statements of Comprehensive Income.

Reclassifications impacting Level 3 financial instruments are reported as transfers into or out of the Level 3 category as of the beginning of the quarter in which the transfer occurs. Therefore gains and losses in income only reflect activity for the periodthe instrument was classified in Level 3. 

Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company's best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. For the three months ended March 31, 2017, transfers between Level 2and Level 3 primarily reflectchanges in liquidity and credit risk estimates for certain private placement issuers in the metals and mining, electricand capital goods sectors.For thethree months ended March 31, 2016,transfers between Level 2 andLevel 3 primarily reflect changes in liquidityand credit risk estimates for certain private placement issuers in the metals and mining and energy sectors.

Separate account assets

Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company's revenues and expenses. See Note 10 to the Consolidated Financial Statements contained in the Company's 2016 Form 10-K for additional policy information related to separate accounts.

As of March 31, 2017 and December 31, 2016, separate account assets were as follows:

(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
March 31, 2017
Guaranteed separate accounts (See Note 16)	$	245	$	263	$	-	$	508
Non-guaranteed separate accounts (1)		1,435		5,076		330		6,841
Subtotal	$	1,680	$	5,339	$	330		7,349
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)								848
Total separate account assets							$	8,197
December 31, 2016
Guaranteed separate accounts (See Note 16)	$	238	$	262	$	-	$	500
Non-guaranteed separate accounts (1)		1,368		4,885		331		6,584
Subtotal	$	1,606	$	5,147	$	331		7,084
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)								856
Total separate account assets							$	7,940

(1) Non-guaranteed separate accountsincluded $3.8 billion as of March 31, 2017 and $3.7 billion as ofDecember 31, 2016 in assets supporting the Company's pension plans,including $0.3billionclassified in Level 3 for both periods and $0.8 billionas of March 31, 2017 and $0.9 billion as ofDecember 31, 2016 priced at net asset value (“NAV”) as a practical expedient.

Separate account assets in Level 1 primarily include exchange-listed equity securities.  Level 2 assets primarily include:

• corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and
• actively-traded institutional and retail mutual fund investments and separate accounts priced using the daily net asset value that is the exit price.

Separate account assets classified in Level 3 primarily support Cigna's pension plans, and include certain newly issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above, as well as commercial mortgage loans that are valued according to the methodologies discussed below. The following tables summarize the changes in separate account assets reported in Level 3 for thethree months ended March 31, 2017 and 2016.

	Three Months Ended
	March 31,
(In millions)	2017		2016
Balance, beginning of period	$	331	$	297
Policyholder gains (losses)		27		(1)
Purchases, sales and settlements:
Purchases		10		4
Sales		(35)		(1)
Settlements		(1)		(2)
Total purchases, sales and settlements		(26)		1
Transfers into/(out of) Level 3:
Transfers into Level 3		-		23
Transfers out of Level 3		(2)		(3)
Total transfers into/(out of) Level 3		(2)		20
Balance, end of period	$	330	$	317

Separate account investments in securities partnerships, real estate, and hedge funds are generally valued based on the separate account's ownership share of the equity of the investee (NAV as a practical expedient), including changes in the fair values of its underlying investments. Substantially all of these assets support the Cigna Pension Plans.The table below provides additional information on these investments.

	Fair Value as of
(In millions)	March 31, 2017		December 31, 2016		Unfunded Commitments		Redemption Frequency (if currently eligible) (1)	Redemption Notice Period (1)
Security Partnerships	$	409	$	424	$	340	Not applicable	Not applicable
Real Estate Funds		234		231		-	Quarterly	45-90 days
Hedge Funds		205		201		-	Up to Annually, varying by fund	30-90 days
Total	$	848	$	856	$	340

• The attributes notedare effective as of March 31, 2017 and December 31, 2016.

Assets and Liabilities Measured at Fair Value under Certain Conditions

Some financial assets and liabilitiesare not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments in real estate, partnershipentities and commercial mortgage loans when they become impaired.Impaired values for these asset typesclassified as Level 3 representing less than 1% of total investments, were written down to their fair values,resulting in realized investment losses of $1 million after-tax for the three months endedMarch 31, 2017. There were no impaired real estate entities or commercial mortgage loans written down to fair value for the three months endedMarch 31, 2016.

Fair Value Disclosures for Financial Instruments Not Carried at Fair Value

The following table includesthe Company's financialinstruments not recorded at fair value that are subject to fair value disclosure requirements at March 31, 2017 and December 31, 2016.In addition to universal life products and capital leases, financial instruments that are carried in the Company's Consolidated Financial Statements at amounts that approximate fair value are excluded from the following table.

			March 31, 2017				December 31, 2016
(In millions)	Classification in the Fair Value Hierarchy		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,776	$	1,752	$	1,682	$	1,666
Contractholder deposit funds, excluding universal life products	Level 3	$	1,206	$	1,203	$	1,215	$	1,212
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,331	$	4,735	$	5,460	$	4,991

The fair values for all financial instruments presented in the table above have been estimated using market information when available. The following valuation methodologies and inputs are used by the Company to determine fair value.

Commercial mortgage loans. The Company estimates the fair value of commercial mortgage loans generally by discounting the contractual cash flows at estimated market interest rates that reflect the Company's assessment of the credit quality of the loans. Market interest rates are derived by calculating the appropriate spread over comparable U.S. Treasury rates based on the property type, quality rating and average life of the loan. The quality ratings reflect the relative risk of the loan considering debt service coverage, the loan-to-value ratio and other factors. Fair values of impaired mortgage loans are based on the estimated fair value of the underlying collateral generally determined using an internal discounted cash flow model.The fair value measurements were classified in Level 3 because the cash flow models incorporate significant unobservable inputs.

Contractholder deposit funds, excluding universal life products. Generally, these funds do not have stated maturities. Approximately 70% of these balances can be withdrawn by the customer at any time without prior notice or penalty. The fair value for these contracts is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. Most of the remaining contractholder deposit funds are reinsured by the buyers of the individual life and annuity and retirement benefits businesses. The fair value for these contracts is determined using the fair value of these buyers' assets supporting these reinsured contracts. The Company had reinsurance recoverables equal to the carrying value of these reinsured contracts.These instruments were classified in Level 3 because certain inputs are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement.

Long-term debt, including current maturities, excluding capital leases.The fair value of long-term debt is based on quoted market prices for recent trades. When quoted market prices are not available, fair value is estimated using a discounted cash flow analysis and the Company's estimated current borrowing rate for debt of similar terms and remaining maturities.These measurements were classified in Level 2 because the fair values are based on quoted market prices or other inputs that are market observable or can be corroborated by market data.

Fair values of off-balance sheet financial instruments were not material as of March 31, 2017 and December 31, 2016.

XML

Investments

3 Months Ended

Mar. 31, 2017

Investments:

Investments

Note 10 — Investments

Cigna's investment portfolio consists of a broad range of investments including fixed maturities and equity securities, commercial mortgage loans, other long-term investments and short-term investments. The sections below provide more detail regarding our investment balances, net investment income and realized investment gains and losses. See Note 9 for information about the valuation of the Company's investment portfolio.See Note 11 to the Consolidated Financial Statements contained in the Company's 2016 Form 10-K for accounting policies for each investment type.

• Investment Portfolio

Fixed Maturities and Equity Securities

The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at March 31, 2017:

		Amortized		Fair
(In millions)		Cost		Value
Due in one year or less	$	1,405	$	1,416
Due after one year through five years		6,717		6,976
Due after five years through ten years		8,481		8,667
Due after ten years		3,586		4,196
Mortgage and other asset-backed securities		450		479
Total fixed maturities	$	20,639	$	21,734

Actual maturities of these securities could differ from their contractual maturitiesused in the table above. This could occur because issuers may have the right to call or prepay obligations, with or without penalties.

Gross unrealized appreciation (depreciation) on fixed maturities by type of issuer is shown below.

				Gross		Gross
				Unrealized		Unrealized
		Amortized		Appre-		Depre-		Fair
		Cost		ciation		ciation		Value
(In millions)	March 31, 2017
Federal government and agency	$	667	$	233	$	(3)	$	897
State and local government		1,324		100		(5)		1,419
Foreign government		2,206		122		(16)		2,312
Corporate		15,992		744		(109)		16,627
Mortgage and other asset-backed		450		32		(3)		479
Total fixed maturities	$	20,639	$	1,231	$	(136)	$	21,734
(In millions)	December 31, 2016
Federal government and agency	$	658	$	223	$	(4)	$	877
State and local government		1,342		99		(6)		1,435
Foreign government		1,998		129		(14)		2,113
Corporate		15,483		716		(149)		16,050
Mortgage and other asset-backed		461		29		(4)		486
Total fixed maturities	$	19,942	$	1,196	$	(177)	$	20,961

The above table includes investments with a fair value of $2.7 billion at March 31, 2017 andDecember 31, 2016 supporting liabilities of the Company's run-off settlement annuity business. These investments had gross unrealized appreciation of $555 million and gross unrealized depreciation of $12 million at March 31, 2017, compared with gross unrealized appreciation of $539 million and gross unrealized depreciation of $15 million at December 31, 2016.

Review of declines in fair value. Management reviews fixed maturities with a decline in fair value from cost for impairment based on criteria that include:

• length of time and severity of decline;

• financial health and specific near term prospects of the issuer;
• changes in the regulatory, economic or general market environment of the issuer's industry or geographic region; and
• the Company's intent to sell or the likelihood of a required sale prior toexpected recovery.

The table below summarizes fixed maturities in an unrealized loss position at March 31, 2017 by the length of time these securities have been in an unrealized loss position. These fixed maturities were primarily corporate securities with a decline in fair value that reflects an increase in market yields since purchase.

	March 31, 2017
	Fair		Amortized		Unrealized		Number
(Dollars in millions)	Value		Cost		Depreciation		of Issues
One year or less:
Investment grade	$	3,960	$	4,067	$	(107)	870
Below investment grade	$	619	$	630	$	(11)	532
More than one year:
Investment grade	$	265	$	276	$	(11)	47
Below investment grade	$	116	$	123	$	(7)	21

As of March 31, 2017, equity securities also included an investment of approximately $400 million in an exchange traded fund (“ETF”) with a gross unrealized loss of $4 million. There were no other available for sale equity securities with a significant unrealized loss reflected in accumulated other comprehensive income at March 31, 2017.

Equity securities include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income. As of March 31, 2017 and December 31, 2016, fair values of these securities were $36 million and amortized cost was $49 million.

Commercial Mortgage Loans

Mortgage loans held by the Company are made exclusively to commercial borrowers and are diversified by property type, location and borrower. Loans are generally issued at a fixed rate of interest and are secured by high quality, primarily completed and substantially leased operating properties.

Credit quality. The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the investment holding period. Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at originationthat is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan.

Quality ratings are based on our evaluation of a number of key inputs related to the loan including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on the debt, with a ratio below 1.0 indicating that there is not enough cash flow to cover the required loan payments. The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan.

The following tables summarize the credit risk profile of the Company's commercial mortgage loan portfolio based on loan-to-value and debt service coverage ratios, as of March 31, 2017 and December 31, 2016:

		Debt Service Coverage Ratio
		1.30x or		1.20x to		1.10x to		1.00x to		Less than
Loan-to-Value Ratios		Greater		1.29x		1.19x		1.09x		1.00x		Total
(In millions)	March 31, 2017
Below 50%	$	331	$	15	$	-	$	-	$	-	$	346
50% to 59%		516		46		42		30		-		634
60% to 69%		687		14		-		-		-		701
70% to 79%		-		-		30		-		35		65
80% to 89%		-		-		-		-		-		-
90% to 100%		-		-		-		-		6		6
Total	$	1,534	$	75	$	72	$	30	$	41	$	1,752
(In millions)	December 31, 2016
Below 50%	$	335	$	15	$	-	$	-	$	-	$	350
50% to 59%		517		46		-		30		-		593
60% to 69%		624		14		-		-		-		638
70% to 79%		-		-		29		-		35		64
80% to 89%		-		-		-		-		-		-
90% to 100%		-		-		-		-		21		21
Total	$	1,476	$	75	$	29	$	30	$	56	$	1,666

The Company's annual in-depth review of its commercial mortgage loan investments is the primary mechanism for identifying emerging risks in the portfolio. The most recent review was completed by the Company's investment professionals in the second quarter of 2016 and included an analysis of each underlying property's most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors.Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value and categorizes the investments as loans in good standing, potential problem loans or problem loans. The results of the 2016 review showed improvement from the prior review in each of the key metrics and confirmed the overall strength of the portfolio. The Company will reevaluate a loan's credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower's request for restructure causes management to believe that the Company's estimate of financial performance, fair value or the risk profile of the underlying property has been impacted. The portfolio's average loan-to-value ratio remained at 57% at March 31, 2017and the portfolio's average debt service coverage ratio remained at1.95at March 31, 2017compared with December 31, 2016.

       Potential problem mortgage loans are considered current (no payment is more than 59 days past due), but they exhibit certain characteristics that increase the likelihood of future default. The characteristics management considers include, but are not limited to, the deterioration of debt service coverage below 1.0, estimated loan-to-value ratios increasing to 100% or more, downgrade in quality rating and requests from the borrower for restructuring. In addition, loans are considered potential problems if principal or interest payments are past due by more than 30 but less than 60 days. Problem mortgage loans are either in default by 60 days or more or have been restructured as to termsthat could include concessions on interest rate, principal payment or maturity date. The Company monitors each problem and potential problem mortgage loan on an ongoing basis, and updates the loan categorization and quality rating when warranted.

Problem and potential problem mortgage loans, net of valuation reserves, totaled $6 million at March 31, 2017 and $21 million at December 31, 2016.

Impaired commercial mortgage loans. A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due according to the terms of the original loan agreement. These loans are included in either problem or potential problem loans. The Company monitors credit risk and assesses the impairment of loans individually and on a consistent basis for all loans in the portfolio. Impaired loans are carried at the lower of unpaid principal balance or the fair value of the underlying real estate. Certain commercial mortgage loans without valuation reserves are considered impaired because the Company will not collect all interest due according to the terms of the original agreements; however, the Company expects to recover the unpaid principal because it is less than the fair value of the underlying real estate.The Company recognizes interest income on impaired mortgage loans only when payment is actually received.

The carrying value of the Company's impaired commercial mortgage loans and related valuation reserves were as follows:

		March 31, 2017					December 31, 2016
(In millions)		Gross		Reserves		Net		Gross		Reserves		Net
Impaired commercial mortgage loans with valuation reserves	$	9	$	(3)	$	6	$	26	$	(5)	$	21
Impaired commercial mortgage loans without valuation reserves		-		-		-		-		-		-
Total impaired commercial mortgage loans	$	9	$	(3)	$	6	$	26	$	(5)	$	21

For the three months endedMarch 31, 2017, the average recorded investment in impaired loans decreased to$18 million in 2017 compared with $112 million for the three months endedMarch 31, 2016, primarily due to the foreclosure of one impaired loan and the full payoff of another.

Changes in valuation reserves for commercial mortgage loans were not material for the three months ended March 31, 2017 and 2016.

Short-Term Investments and Cash Equivalents

Short-term investments and cash equivalents included corporate securities of $2.4 billion, federal government securities of $597 million and money market funds of $17 million as of March 31, 2017. The Company's short-term investments and cash equivalents as of December 31, 2016 included corporate securities of $2.2billion, federal government securities of $378 million and money market funds of $11 million.

• Realized Investment Gains and Losses

The following realized gains and (losses) on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

	Three Months Ended
	March 31,
(In millions)	2017		2016
Fixed maturities	$	2	$	(18)
Equity securities		33		(10)
Other investments, including derivatives		11		(4)
Realized investment gains (losses) before income taxes		46		(32)
Less income taxes (benefits)		15		(11)
Net realized investment gains (losses)	$	31	$	(21)

Included in these realized investment gains (losses) were pre-tax asset write-downs as follows:

	Three Months Ended
	March 31,
(In millions)	2017		2016
Other-than-temporary impairments on debt securities:
Credit-related	$	(5)	$	(18)
Non credit-related (1)		(2)		(9)
Total other-than-temporary impairments on debt securities		(7)		(27)
Other asset write-downs (2)		(3)		(9)
Total write-downs	$	(10)	$	(36)
(1) These write-downs pertain to other-than-temporary declines in fair values due to increases in market yields (widening of credit spreads) for certain below investment grade fixed maturities with an increased probability of sales activity prior to recovery of their amortized cost basis.
(2) Other asset write-downs include other-than-temporary declines in fair values of equity securities and asset write-downs related to real estate investments.

The following table presents sales information for available-for-sale fixed maturities and equity securities. Gross gains on sales and gross losses on sales exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

	Three Months Ended
	March 31,
(In millions)	2017		2016
Proceeds from sales	$	414	$	361
Gross gains on sales	$	47	$	12
Gross losses on sales	$	2	$	5

XML

Derivative Financial Instruments

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 11 — Derivative Financial Instruments

The Company uses derivative financial instruments to manage the characteristics ofinvestment assets (such as duration, yield, currency and liquidity)to meet the varying demands of the related insurance and contractholder liabilities(such as paying claims, investment returns and withdrawals) and to hedge interest rate risk of its long-term debt. The Company has written and purchased GMIB reinsurance contracts in its run-off reinsurance business that are accounted for as freestanding derivatives and discussed in Note 8. Derivatives in the Company's separate accounts are excluded from the following discussion because associated gains and losses generally accrue directly to separate account policyholders.

Accounting policy.The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges.Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various quantitativemethods appropriate for each hedge, including regression analysis and dollar offset. Under hedge accounting, the changes in fair value of thederivative and the hedged risk are generally recognized together and offset each other when reported in shareholders' net income. Changes inthe fair value of a derivative instrument may not always equal changes in the fair value of the hedged item. This is referred to as ''hedgeineffectiveness'' and is generally recorded in realized investment gains and losses. In the event of an early hedge termination, the changes in fairvalue of derivatives that qualified for hedge accounting are reported in shareholders' net income, generally as a part of realized investmentgains and losses. See Note 9 for further information on our policies for determining fair value. Derivative cash flows are generally reported in operating activities.

The following tables provide information on the Company's specific applications of derivative financial instruments during the periods ended March 31, 2017 and December 31, 2016.

Fair Value Hedge of Long-Term Corporate Debt	Notional Value (in millions)
Type of instrument. Interest rate swap contracts	March 31, 2017		December 31, 2016
	$	750	$	750
Purpose. To convert a portion of the interest rate exposure on the Company's long-term debt from fixed to variable rates. This more closely aligns the Company's interest expense with the interest income received on its cash equivalent and short-term investment balances. The variable rates are benchmarked to LIBOR.
Terms of derivative instruments. The Company provides upfront margin and settles fair value changes and net interest between variable and fixed rates daily with a central clearinghouse.
Accounting. Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. The critical terms of these swaps match those of the long-term debt being hedged. As a result, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by LIBOR. The effects of those adjustments on other operating expenses are offset by the effects of corresponding changes in the swaps' fair value. The net impact from the hedge reported in other operating expenses reflects interest expense on the hedged debt at the variable interest rate.

Cash Flow Hedges of Fixed Maturity Bonds	Notional Value (in millions)
Type of instrument. Foreign currency swap contracts	March 31, 2017		December 31, 2016
	$	31	$	55
Purpose. To hedge the foreign currency cash flows of its fixed maturity bonds to match associated insurance liabilities.
Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Canadian dollars and Japanese yen and have terms for periods of up to four years.
Accounting. Using cash flow hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities. Changes in fair values are reported in accumulated other comprehensive income and amortized into net investment income or other realized investment gains and losses as interest or principal payments are received.

Fair Value Hedges of Fixed Maturity Bonds	Notional Value (in millions)
Type of instrument. Foreign currency swap contracts	March 31, 2017		December 31, 2016
	$	87	$	78
Purpose. To hedge the foreign exchange related changes in fair values of the Company's fixed maturity bonds.
Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Euros and British pounds and have terms for periods of up to nine years.
Accounting. Using fair value hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities. Changes in fair values of the swap contracts, as well as changes in the fair values of the hedged bonds attributable to the hedged risk are reported in other realized investment gains and losses.

Economic Hedges of a Fixed Maturity Bond Portfolio	Notional Value (in millions)
Type of instrument. Foreign currency forward contracts	March 31, 2017		December 31, 2016
	$	150	$	149
Purpose. To hedge the foreign exchange related changes in fair values of a U.S. dollar-denominated fixed maturity bond portfolio to reflect the local currency for one of the Company's foreign subsidiaries.
Terms of derivative instruments. The Company agrees to purchase South Korean won in exchange for U.S. dollars at a future date, generally within three months from the contracts' trade dates.
Accounting. As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses.

As of March 31, 2017 and December 31, 2016, and for the three months ended March 31, 2017 and 2016, the effects of these derivative instruments on the Consolidated Financial Statements, including the amounts of gains or losses reclassified from accumulated other comprehensive income into shareholders' net income, were not material. No material amounts were excluded from the assessment of hedge effectiveness and no significant gains or losses were recognized due to hedge ineffectiveness.

Collateral and termination features. The Company routinely monitors exposure to credit risk associated with derivatives and diversifies the portfolio among approved dealers of high credit quality to minimize this risk. As of March 31, 2017, the Company had $13 million in cash on deposit representing the upfront margin required for the Company's centrally-cleared derivative instruments.Certain of the Company's over-the-counter derivative instruments contain provisions requiring either the Company or the counterparty to post collateral or demand immediate payment depending on the amount of the net liability position and predefined financial strength or credit rating thresholds. Collateral posting requirements vary by counterparty. The net asset or liability positions of these derivatives were not material as of March 31, 2017 or December 31, 2016.

XML

Variable Interest Entities

3 Months Ended

Mar. 31, 2017

Variable Interest Entities [Abstract]

Variable interest entities

Note 12 – Variable Interest Entities

When the Company becomes involved with a variable interest entity, as well as when there is a change in the Company's involvement with an entity, the Company evaluates the following to determine if it is the primary beneficiary and must consolidate the entity:

• the structure and purpose of the entity;
• the risks and rewards created by and shared through the entity; and
• the Company's ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers.

The Company owns interests in security and real estate limited partnerships defined as variable interest entitiesthat invest in the equity or mezzanine debt of privately held companies and real estate properties. General partners unaffiliated with the Company control decisions that most significantly impact the partnership's operations and the limited partners do not have substantive kick-out or participating rights. The Company's maximum exposure to these entities of $2.2 billion across approximately 100 limited partnerships as of March 31, 2017includes $1.1 billion reported in other long-term investments and commitments to contribute an additional $1.1 billion. The Company's non-controlling interest in each of these limited partnerships is generally less than 10% of the partnership ownership interests.

In the normal course of its investing activities, the Company also makes passive investments incertain asset-backed and corporate securities that are issued by variable interest entities whose sponsors or issuers are unaffiliated with the Company. The Company receives fixed-rate cash flows from these investments and the maximum potential exposure to loss is limited to thecarrying amount of $0.5billion as of March 31, 2017, that is reported in fixed maturities. The Company's combined ownership interests are insignificant relative to the total principal amounts issued by these entities.

The Company is also involved in real estate joint ventures with carrying values of $0.2billion where all decisions significantly affecting the entities' economic performance are subject to unanimous approval by the equity holders. As a result, the Company determined that the power over these entities is shared equally, and there is no primary beneficiary. The Company's maximum exposure to loss was approximately equal to its carrying value that is reported in other long-term investments.

To provide certain services to its Medicare Advantage customers, the Company contracts with independent physician associations (“IPAs”) that are variable interest entities. Physicians provide health care services to Medicare Advantage customers and the Company provides medical management and administrative services to the IPAs. The Company's maximum exposure to loss related to the IPA arrangements is limited to their liability for incurred but not reported medical costs for the Company's Medicare Advantage customers. These liabilities are not material and are generally secured by deposits maintained by the IPAs.

The Company is not the primary beneficiary of any of the variable interest entities described above and does not consolidate these entities because either:

• it has no power to direct the activities that most significantly impact the entities' economic performance; or
• it has neither the right to receive benefits nor the obligation to absorb losses that could be significant to these variable interest entities.

The Company has not provided, and does not intend to provide, financial support to these entities that it is not contractually required to provide. The Company performs ongoing qualitative analyses of its involvement with these variable interest entities to determine if consolidation is required.

XML

Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2017

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 13—Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) excludes amounts required to adjust future policy benefits for the run-off settlement annuity business and a portion of deferred acquisition costs associated with the corporate owned life insurance business.Changes in the components of accumulated other comprehensive income (loss) were as follows:

			Tax
			(Expense)		After-
(In millions)	Pre-Tax		Benefit		Tax
Three Months Ended March 31,
2017
Net unrealized appreciation, securities, January 1,	$	542	$	(180)	$	362
Unrealized appreciation on securities arising during the period		53		(24)		29
Reclassification adjustment for (gains) included in shareholders' net income (realized investment gains)		(35)		13		(22)
Net unrealized appreciation, securities arising during the period		18		(11)		7
Net unrealized appreciation, securities, March 31,	$	560	$	(191)	$	369
Net unrealized appreciation, derivatives, January 1,	$	4	$	(1)	$	3
Reclassification adjustment for (gains) included in shareholders' net income (net realized investment gains)		(4)		1		(3)
Net unrealized appreciation, derivatives, March 31,	$	-	$	-	$	-
Net translation of foreign currencies, January 1,	$	(390)	$	21	$	(369)
Net translation of foreign currencies arising during the period		111		1		112
Net translation of foreign currencies, March 31,	$	(279)	$	22	$	(257)
Postretirement benefits liability adjustment, January 1,	$	(2,120)	$	742	$	(1,378)
Reclassification adjustment for amortization of net losses from past
experience and prior service costs (other operating expenses)		15		(5)		10
Reclassification adjustment for settlement loss (other operating expenses)		6		(2)		4
Net postretirement benefits liability adjustment arising during the period		21		(7)		14
Postretirement benefits liability adjustment, March 31,	$	(2,099)	$	735	$	(1,364)
2016
Net unrealized appreciation, securities, January 1,	$	612	$	(194)	$	418
Unrealized appreciation on securities arising during the period		227		(72)		155
Reclassification adjustment for losses included in shareholders' net income (realized investment gains)		28		(10)		18
Net unrealized appreciation, securities arising during the period		255		(82)		173
Net unrealized appreciation, securities, March 31,	$	867	$	(276)	$	591
Net unrealized appreciation, derivatives, January 1,	$	10	$	(3)	$	7
Unrealized (depreciation), derivatives arising during the period		(4)		1		(3)
Net unrealized appreciation, derivatives, March 31,	$	6	$	(2)	$	4
Net translation of foreign currencies, January 1,	$	(295)	$	21	$	(274)
Net translation of foreign currencies arising during the period		83		(2)		81
Net translation of foreign currencies, March 31,	$	(212)	$	19	$	(193)
Postretirement benefits liability adjustment, January 1,	$	(2,155)	$	754	$	(1,401)
Reclassification adjustment for amortization of net losses from past
experience and prior service costs (other operating expenses)		16		(5)		11
Postretirement benefits liability adjustment, March 31,	$	(2,139)	$	749	$	(1,390)

XML

Pension and Other Postretirement Benefit Plans

3 Months Ended

Mar. 31, 2017

Pension and Other Postretirement Benefit Plans [Abstract]

Pension and Other Postretirement Benefit Plans

Note 14 — Pension and Other Postretirement Benefit Plans

The Company and certain of its subsidiaries provide pension, health care and life insurance defined benefits to eligible retired employees, spouses and other eligible dependents through various domestic and foreign plans. The effect of its foreign pension and other postretirement benefit plans is immaterial to the Company's results of operations, liquidity and financial position. The Company froze its defined benefit postretirement medical plan in 2013 and its primary domestic pension plans in 2009.

As further discussed in Note 16, the Company and the Cigna Pension Plan are defendants in a class action lawsuit that has yet to be resolved. When the parties agree on a final plan amendment, the pension benefit obligation will be updated to reflect additional benefits resulting from this litigation.

For the three months ended March 31, 2017, the Company's unrecognized actuarial losses and prior service costs (reported in accumulated other comprehensive income) decreased by $21 million pre-tax in the aggregate ($14 million after-tax) resulting in an increase in shareholders' equity. This change was primarily the result of amortization.

Pension and Other Postretirement Benefits. Components of net pension and net other postretirement benefit costs were as follows:

	Pension Benefits				Other Postretirement Benefits
	Three Months Ended				Three Months Ended
	March 31,				March 31,
(In millions)	2017		2016		2017		2016
Interest cost	$	48	$	50	$	3	$	3
Expected long-term return on plan assets		(65)		(62)		-		-
Amortization of:
Net loss from past experience		16		17		-		-
Prior service cost		-		-		(1)		(1)
Settlement loss		6		-		-		-
Net cost	$	5	$	5	$	2	$	2

The Company funds its domestic qualified pension plans at least at the minimum amount required by the Pension Protection Act of 2006. During the three months ended March 31, 2017, the Company made a voluntary pension contribution of $150 million.No additional contributions are required for the remainder of 2017.

XML

Income Taxes

3 Months Ended

Mar. 31, 2017

Income Taxes [Abstract]

Income Taxes

Note 15― Income Taxes

A. Income Tax Expense

The consolidated effective tax rate decreasedto 33.4%for the three months ended March 31, 2017compared with 37.2% for the three months ended2016due to the moratorium in 2017 on the health insurance industry tax that is not deductible for federal income tax purposes.

The Company maintains a capital management strategy to retain overseas a significant portion of the earnings from its foreign operations. As of March 31, 2017, undistributed earnings were approximately $2.7billion. These undistributed earnings are deployed outside of the U.S. predominantly in support of the liquidity and regulatory capital requirements of our foreign operations. The Company does not intend to repatriate these earnings to the U.S. and as a result, income taxes are provided using the respective foreign jurisdictions' tax rate.If the Company had intended to repatriate these foreign earnings to the U.S., the Company's Consolidated Balance Sheets would have included an additional $362million of deferred tax liabilities as of March 31, 2017.

B. Unrecognized Tax Benefits

Changes in unrecognized tax benefits were immaterialfor the three months ended March 31, 2017.

XML

Contingencies and Other Matters

3 Months Ended

Mar. 31, 2017

Contingencies And Other Matters [Abstract]

Contingencies and Other Matters

Note 16 ― Contingencies and Other Matters

The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business.

• Financial Guarantees: Retiree and Life Insurance Benefits

Separate account assets are contractholder funds maintained in accounts with specific investment objectives. The Company records separate account liabilities equal to separate account assets.  In certain cases, the Company guarantees a minimum level of benefits for retirement and insurance contracts written in separate accounts.  The Company establishes an additional liability if management believes that the Company will be required to make a payment under these guarantees.

The Company guarantees that separate account assets will be sufficient to pay certain life insurance or retiree benefits.  The sponsoring employers are primarily responsible for ensuring that assets are sufficient to pay these benefits and are required to maintain assets that exceed a certain percentage of benefit obligations.  This percentage varies depending on the asset class within a sponsoring employer's portfolio (for example, a bond fund would require a lower percentage than a riskier equity fund) and thus will vary as the composition of the portfolio changes.  If employers do not maintain the required levels of separate account assets, the Company or an affiliate of the buyer of the retirement benefits business (Prudential Retirement Insurance and Annuity Company) has the right to redirect the management of the related assets to provide for benefit payments.  As ofMarch 31, 2017, employers maintained assets that exceeded the benefit obligations.Benefit obligations under these arrangements were $488million as of March 31, 2017and approximately 13% of these are reinsured by an affiliate of the buyer of the retirement benefits business. The remaining guarantees are provided by the Company with minimal reinsurance from third parties. There were no additional liabilities required for these guarantees as ofMarch 31, 2017.Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy.  See Note 9for further information on the fair value hierarchy.

The Company does not expect that these financial guarantees will have a material effect on the Company's consolidated results of operations, liquidity or financial condition.

• GMIB Contracts

See Note 8 for discussion.

C. Certain Other Guarantees

The Company had financial guarantees and indemnification obligations to lenders of approximately $153 million as of March 31, 2017, related to borrowings by certain real estate joint ventures that the Company either records as an investment or consolidates. These borrowings, that are bothrecourse and nonrecourse to the Company, are secured by the joint ventures' real estate properties with fair values in excess of the loan amounts and mature at various dates beginning in 2018 through 2021. The Company's indemnification obligations would require payment to lenders for any actual damages resulting from certain acts such as unauthorized ownership transfers, misappropriation of rental payments by others or environmental damages. Based on initial and ongoing reviews of property management and operations, the Company does not expect that payments will be required under these financial guarantees or indemnification obligations. Any payments that might be required could be recovered through a refinancing or sale of the assets. In some cases, the Company also has recourse to partners for their proportionate share of amounts paid. There were no liabilities required for these financial guarantees and indemnification obligations as ofMarch 31, 2017.

As of March 31, 2017, the Company guaranteed that it would compensate the lessors for a shortfall of up to $32 million in the market value of certain leased equipment at the end of its leases. Guarantees of $25million expire in 2022 and $7million expire in 2026. The Company had liabilities for these guarantees of $3million as of March 31, 2017.

The Company does not expect that these guarantees will have a material adverse effect on the Company's consolidated results of operations, financial condition or liquidity.

The Company had indemnification obligations as of March 31, 2017in connection with acquisition and disposition transactions. These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, the filing of tax returns, compliance with law or the identification of outstanding litigation. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential amount due is subject to contractual limitations based on a percentage of the transaction purchase price, while in other cases limitations are not specified or applicable. The Company does not believe that it is possible to determine the maximum potential amount due under these obligations, because not all amounts due under these indemnification obligations are subject to limitation. There were no liabilitiesrequired for these indemnification obligations as of March 31, 2017.

• Guaranty Fund Assessments

The Company operates in a regulatory environment that may require its participation in assessments under state insurance guaranty association laws. The Company's exposure to assessments for certain obligations of insolvent insurance companies to policyholders and claimants is based on its share of business written in the relevant jurisdictions.

On March 1, 2017, the CommonwealthCourt of Pennsylvania entered an order of liquidation of Penn Treaty Network America Insurance Company, together with its subsidiary American Network Insurance Company (collectively “Penn Treaty”, a long-term care insurance carrier),triggeringguaranty fund coverage and accrual of a liability. For the three months ended March 31, 2017, the Company recorded in operating expenses $129 million pre-tax ($83 million after-tax), representing its estimate of future assessments on a discounted basis. Amounts recorded by segment were: Global Health Care, $106million pre-tax ($68 million after-tax) and Group Disability and Life, $23 million pre-tax ($15 million after-tax). These estimates include small reductions for premium tax refunds for insurance contracts currently written. This assessment is expected to be updated in future periods for changes in the estimate of the insolvency. In addition, a portion of this assessment is expected to be offset in the future by premium tax credits that will be recognized in the period received.

• Legal and Regulatory Matters

The Company is routinely involved in numerous claims, lawsuits, regulatory audits, investigations and other legal matters arising, for the most part, in the ordinary course of managing a global health services business. These actions may include benefit disputes, breach of contract claims, tort claims, provider disputes, disputes regarding reinsurance arrangements, employment and employment discrimination-related suits, employee benefit claims, wage and hour claims, privacy, claims arising from consumer protection laws, intellectual property claims and real estate-related disputes. There are currently, and may be in the future, attempts to bring class action lawsuits against the industry. The Company also is regularly engaged in Internal Revenue Service (“IRS”) audits and may be subject to examinations by various state and foreign taxing authorities. Disputed income tax matters arising from these examinations, including those resulting in litigation, are accounted for under GAAP guidance for uncertain tax positions. Further information on income tax matters can be found in Note 15.

The business of administering and insuring health services programs, particularly health care and group insurance programs, is heavily regulated by federal and state laws and administrative agencies, such as state departments of insurance and the U.S. Departments of Health and Human Services, Treasury, Labor and Justice, as well as the courts. Health care regulation and legislation in its various forms, including the Health Care Reform Act, other regulatory reform initiatives, such as those relating to Medicare programs, or additional changes in existing laws or regulations or their interpretations, could have a material adverse effect on the Company's business, results of operations and financial condition.

In addition, there is heightened review by federal and state regulators of the health care, disability and life insurance industry business and related reporting practices. Cigna is frequently the subject of regulatory market conduct reviews and other examinations of its business and reporting practices, audits and investigations by state insurance and health and welfare departments, state attorneys general, the Centers for Medicare and Medicaid Services (“CMS”) and the Office of Inspector General (“OIG”). With respect to Cigna's Medicare Advantage business, CMS and OIG perform audits to determine a health plan's compliance with federal regulations and contractual obligations, including compliance with proper coding practices (sometimes referred to as Risk Adjustment Data Validation audits or RADV audits), that may result in retrospective adjustments to payments made to health plans. Regulatory actions can result in assessments, civil or criminal fines or penalties or other sanctions, including loss of licensing or exclusion from participating in government programs.

In December 2016, the Company received a Civil Investigative Demand from the Civil Division of the U.S. Department of Justice relating to our Medicare Part C and D risk adjustment compliance activities and business processes, particularly as they relate to our review of medical records conducted as part of our data and payment accuracy compliance efforts. We believe that this request for information is in connection with a broader review of Medicare Risk Adjustment generally that includes a number of Medicare Advantage plans, providers and vendors. We intend to cooperate with and voluntarily respond to the information request.

As a global company, Cigna is also subject to the laws, regulations and rules of the foreign jurisdictions in which it conducts business. Foreign laws and rules, and regulatory audit and investigation practices, may differ from or be more stringent than, similar requirements in the U.S.

Regulation, legislation and judicial decisions have resulted in changes to industry and the Company's business practices, financial liability or other sanctions and will continue to do so in the future.

When the Company (in the course of its regular review of pending litigation and legal or regulatory matters) has determined that a material loss is reasonably possible, the matter is disclosed. Such matters are described below. In accordance with GAAP, when litigation and regulatory matters present loss contingencies that are both probable and estimable, the Company accrues the estimated loss by a charge to shareholders' net income. The amount accrued represents the Company's best estimate of the probable loss at the time. If only a range of estimated losses can be determined, the Company accrues an amount within the range that, in the Company's judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, the Company accrues the minimum amount of the range. In cases when the Company has accrued an estimated loss, the accrued amount may differ materially from the ultimate amount of the loss. In many proceedings, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount or range of any loss. The Company provides disclosure in the aggregate for material pending litigation and legal or regulatory matters, including accruals, range of loss, or a statement that such information cannot be estimated. As a litigation or regulatory matter develops, the Company monitors the matter for further developments that could affect the amount previously accrued, if any, and updates such amount accrued or disclosures previously provided as appropriate.

The outcome of litigation and other legal or regulatory matters is always uncertain, and unfavorable outcomes that are not justified by the evidence or existing law can occur. The Company believes that it has valid defenses to the matters pending against it and is defending itself vigorously. Except as otherwise noted, the Company believes that the legal actions, regulatory matters, proceedings and investigations currently pending against it should not have a material adverse effect on the Company's results of operations, financial condition or liquidity based upon our current knowledge and taking into consideration current accruals. The Company had pre-tax reserves as of March 31, 2017 of approximately $190 million ($125 million after-tax) for the matters discussed below under “Litigation Matters.” Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time. In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company. An adverse outcome in one or more of these matters could be material to the Company's results of operations, financial condition or liquidity for any particular period.

Litigation Matters

Amara cash balance pension plan litigation. In December 2001, Janice Amara filed a class action lawsuit in the U.S. District Court for the District of Connecticut against Cigna Corporation and the Cigna Pension Plan (the “Plan”) on behalf of herself and other similarly situated Plan participants affected by the 1998 conversion to a cash balance formula.  The plaintiffs allege various violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), including that the Plan's cash balance formula discriminates against older employees; that the conversion resulted in a wear-away period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or inadequate disclosures about these conditions.

In 2008, the District Court (1) affirmed the Company's right to convert to a cash balance plan prospectively beginning in 1998; (2) found for plaintiffs on the disclosure claim only; and (3) required the Company to pay pre-1998 benefits under the pre-conversion traditional annuity formula and post-1997 benefits under the post-conversion cash balance formula.  The Second Circuit upheld this decision. From 2008 through the present, this case has undergone a series of court proceedings that resulted in the original District Court order being largely upheld. In 2015, the Company submitted to the District Court its proposed method for calculating the additional pension benefits due to class members and plaintiffs responded in August 2015.

In January 2016, the District Court ordered the method of calculating the additional pension benefits due to class members. The court order left several aspects of the calculation of additional plan benefits open to interpretation. During 2016, the Company submitted its interpretation of the Court Order and the plaintiffs filed various objections. On January 10, 2017, the District Court issued an additional ruling regarding certain aspects of the calculation of additional plan benefits. The Company's reserve for this litigation remains reasonable at March 31, 2017 based on calculations consistent with the Company's interpretation of the updated guidance from the Court. However, certain aspects of the ruling will need further clarification from the Court before final plan benefits can be determined. As a result, the timing of the resolution of this matter remains uncertain. Once resolved, the Plan will be amended to comply with the final interpretation of the District Court's order and the benefits will begin to be paid.

Ingenix. In April 2004, the Company was sued in a number of putative nationwide class actions alleging that the Company improperly underpaid claims for out-of-network providers through the use of data provided by Ingenix, Inc., a subsidiary of one of the Company's competitors. These actions were consolidated into Franco v. Connecticut General Life Insurance Company, et al., pending in the U.S. District Court for the District of New Jersey. The consolidated amended complaint, filed in 2009 on behalf of subscribers, health care providers and various medical associations, asserted claims related to benefits and disclosure under ERISA, the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, the Sherman Antitrust Act and New Jersey state law and seeks recovery for alleged underpayments from 1998 through the present. Other major health insurers have been the subject of, or have settled, similar litigation.

In September 2011, the District Court (1) dismissed all claims by the health care provider and medical association plaintiffs for lack of standing; and (2) dismissed the antitrust claims, the New Jersey state law claims and the ERISA disclosure claim. In January 2013 and again in April 2014, the District Court denied separate motions by the plaintiffs to certify a nationwide class of subscriber plaintiffs. The Third Circuit denied plaintiffs' request for an immediate appeal of the January 2013 ruling. As a result, the case is proceeding on behalf of the named plaintiffs only. In June 2014, the District Court granted the Company's motion for summary judgment to terminate all claims, and denied the plaintiffs' partial motion for summary judgment.  In July 2014, the plaintiffs appealed all of the District Court's decisions in favor of the Company, including the class certification decision, to the Third Circuit. On May 2, 2016, the Third Circuit affirmed the District Court's decisions denying class certification for the claims asserted by members, the granting of summary judgment on the individual plaintiffs' claims, as well as the dismissal of the antitrust claims. However, the Third Circuit also reversed the earlier dismissal of the providers' ERISA claims. The Company will continue to vigorously defend its position.

Regulatory Matters

CMS actions. In January 2016, CMS issued a Notice of Imposition of Immediate Intermediate Sanctions (the “Notice”) to the Company. The Notice required us to suspend certain enrollment and marketing activities for Medicare Advantage-Prescription Drug and Medicare Part D Plans. The sanctions do not impact the right of current enrollees to remain covered by our Medicare Advantage-Prescription Drug or Medicare Part D Plans.

CMS imposed sanctions based on its findings of deficiencies with the Company's operations of its Parts C and D appeals and grievances, Part D formulary and benefit administration and compliance program. Managementis working towards having these sanctions lifted in time to participate in the 2018 annual enrollment period. For the three months ended March 31, 2017, Medicare enrollment and consolidated revenues were materially impacted due to our inability to participate in 2017 annual enrollment, and management expects that trend to continue for the remainder of 2017.  However, management anticipates that full-year 2017 shareholders' net income will not be materially affectedbecause we expect the margin impact of the revenue loss to be offset by 2017 remediation costs that are significantly lower than the $100 million after-tax amount reported in 2016 and other operational efficiencies to improve 2017 results.

On October 12, 2016, CMS announced Medicare Star Quality Ratings (“Star Ratings”) for 2017. While Star Ratings are based on a number of plan performance measures that are evaluated each year, the projected Star Ratings for our plans included certain reductions that are primarily attributable to our CMS audit discussed above. Under these revised Star Ratings, approximately 20% of our Medicare Advantage customers are expected to be in a 4 Stars or greater plan.  The Company does not believe that these Star Ratings reflect the quality offerings Cigna-HealthSpring provides to beneficiaries. 

The Company filed a Reconsideration request with CMS, which was denied, and will work fully with CMS through their process as well as consider additional alternatives with the objective that the final Star Ratings more accurately reflect our performance under the Star Ratings measures. The Company remains committed to our partnership with CMS and to delivering quality products and services to seniors, while working to mitigate the impact these Star Ratings could have on our offerings in 2018.  If we are unsuccessful in restoring at least some of the Star Ratings, modifying our product offerings or implementing operational efficiencies in the Government business,the effect in 2018 could be material to shareholders' net income.  There is no financial impact in 2017 because these ratings apply to plans for the 2018 payment year.

Disability claims regulatory matter. During the second quarter of 2013, the Company finalized an agreement with the Departments of Insurance for Maine, Massachusetts, Pennsylvania, Connecticut and California (together, the “monitoring states”) related to the Company's long-term disability claims handling practices. The agreement requires primarily: (1) enhanced procedures related to documentation and disposition and (2) a two-year monitoring period followed by a re-examination that began in the second quarter of 2016. Management believes the Company has addressed the requirements of the agreement. If the monitoring states find material non-compliance with the agreement upon re-examination, the Company may be subject to additional costs and penalties or requests to change its business practices that could negatively impact future earnings for this business.

Other Legal Matters

Antitrust Litigation. On July 21, 2016, the DOJ and certain state attorneys general filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia (the “District Court”) seeking to block the merger and, on January 4, 2017, the parties concluded the District Court trial. On February 8, 2017, the District Court issued an order enjoining the proposed merger. Anthem filed a notice of appeal of the District Court's order with the U.S. Court of Appeals for the District of Columbia Circuit (the “Appeals Court”) and requested an expedited appeal. On February 17, 2017, the Appeals Court granted Anthem's motion for an expedited appeal. That same day, the Company filed its notice of appeal of the District Court's order with the Appeals Court.Oral arguments were heard on March 24, 2017. On April 28, 2017, the Appeals Court affirmed the decision of the District Court.On May 5, 2017, Anthem filed a petition for a writ of certiorari with the United States Supreme Court seeking appeal of the U.S. Court of Appeals decision affirming the District Court's order enjoining the merger.

Litigation with Anthem. On February 14, 2017, the Company delivered a notice to Anthem terminating the merger agreement, and notifying Anthem that it must pay the Company the $1.85 billion reverse termination fee pursuant to the terms of the merger agreement. Also on February 14, 2017, the Company filed suit against Anthem in the Delaware Court of Chancery (the “Chancery Court”). The complaint sought declaratory judgments that the Company's termination of the merger agreement was valid and that Anthem was not permitted to extend the termination date. The complaint also sought payment of the reverse termination fee and additional damages in an amount exceeding $13 billion, which includes the lost premium value to the Company's shareholders caused by Anthem's willful breaches of the merger agreement.

Also on February 14, 2017, Anthem filed a lawsuit in the Chancery Court against the Company seeking (i) a temporary restraining order to enjoin Cigna from terminating and taking any action contrary to the terms of the merger agreement, (ii) specific performance compelling Cigna to comply with the merger agreement and (iii) damages. On February 15, 2017, the Chancery Court granted Anthem's motion for a temporary restraining order and issued an order temporarily enjoining the Company from terminating the merger agreement. This is not a decision on the merits of the case, but rather an order to ensure irrevocable actions do not take place before the Chancery Court's substantive review of the issues. The Company will continue to abide by terms of the merger agreement until the expiration or lifting of the Chancery Court's order and any further review of the case by the Chancery Court. This order will be subject to review by the Chancery Court at a preliminary injunction hearing scheduled for May 8, 2017.

We believe in the merits of our claims and dispute Anthem's claims, and we intend to vigorously defend ourselves and pursue our claims. The outcomes of lawsuits are inherently unpredictable, and we may be unsuccessful in the ongoing litigation or any future claims or litigation.

Shareholder Litigation. Following announcement of the Company's merger agreement with Anthem as discussed in Note 3, putative class action complaints (collectively the “complaints” or “Cigna Merger Litigation”) were filed by purported Cigna shareholders on behalf of a purported class of Cigna shareholders. Additional lawsuits arising out of or relating to the merger agreement or the merger may be filed in the future.

Cigna, members of the Cigna board of directors, Anthem and Anthem Merger Sub Corp (“Merger Sub”) have been named as defendants. The plaintiffs generally assert that the members of the Cigna board of directors breached their fiduciary duties to the Cigna shareholders during merger negotiations and by entering into the merger agreement and approving the merger, and that Cigna, Anthem and Merger Sub aided and abetted such breaches of fiduciary duties. The allegations include, among other things, that (1) the merger consideration undervalues Cigna, (2) the sales process leading up to the merger was flawed due to purported conflicts of interest of members of the Cigna board of directors and (3) certain provisions of the merger agreement inappropriately favor Anthem and inhibit competing bids. Plaintiffs seek, among other things, injunctive relief enjoining the merger, rescission of the merger agreement to the extent already implemented, and costs and damages.

Effective November 24, 2015, solely to avoid the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, the Company, the Company's directors, Anthem and Merger Sub entered into a Memorandum of Understanding (“MOU”) to settle the Cigna Merger Litigation. Subject to approval by the Connecticut Superior Court, Judicial District of Hartford and further definitive documentation in a settlement agreement that will be subject to customary conditions, the MOU resolved the Cigna Merger Litigation and provided that the Company would make certain additional disclosures related to the merger. If the Court approves the settlement, the Cigna Merger Litigation will be dismissed with prejudice and all claims that were or could have been brought in any actions challenging any aspect of the merger, the merger agreement and any related disclosures will be released. In connection with the settlement, subject to the ultimate determination of the Court, plaintiffs' counsel may receive an award of reasonable fees. There can be no assurance that the parties will ultimately enter into a settlement agreement, or that the Court will approve the settlement even if the parties were to enter into such agreement. The MOU may terminate, if, among other reasons, the Court does not approve the settlement or the merger is not consummated for any reason.

XML

Segment Information

3 Months Ended

Mar. 31, 2017

Segment Information [Abstract]

Segment Information [Text Block]

Note 17 ― Segment Information

See Note 1 for a description of the Company's reporting segments.

In the Company's segment disclosures, we present “operating revenues,” defined as total revenues excluding realized investment results. The Company excludes realized investment results from this measure because its portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. As a result, gains or losses created in this process may not be indicative of the past or future underlying performance of the business.

The Company uses “adjusted income (loss) from operations” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitability. Adjusted income from operations is defined as shareholders' net income (loss) excluding after-tax realized investment gains and losses, net amortization of other acquired intangible assets and special items. Income or expense amounts are excluded from adjusted income from operations for the following reasons:

• Realized investment results are excluded because, as noted above, the Company's portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment.
• Net amortization of other intangible assets is excluded because it relates to costs incurred for acquisitions and, as a result, it does not relate to the core performance of the Company's business operations.
• Special items, if any, are excluded because management believes they are not representative of the underlying results of operations.This is generally because the nature and size of these matters are not indicative of our ongoing business operations. Further context about these items is provided in the footnotes listed in the table below.

	Three Months Ended				Three Months Ended
	March 31, 2017				March 31, 2016
(In millions)	Before-tax impact		After-tax impact		Before-tax impact		After-tax impact
Long-term care guaranty fund assessment - see Note 16(D)	$	129	$	83	$	-	$	-
Merger-related transaction costs - see Note 3		63		49		40		36
Total impact from special items	$	192	$	132	$	40	$	36

Summarized segment financial information was as follows:

(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
Three Months Ended March 31, 2017
Premiums, fees and other revenues and mail order pharmacy revenues	$	8,106	$	881	$	1,032	$	30	$	(13)	$	10,036
Net investment income		92		28		89		86		8		303
Operating revenues	$	8,198	$	909	$	1,121	$	116	$	(5)	$	10,339
Total revenues	$	8,224	$	922	$	1,129	$	115	$	(5)	$	10,385
Shareholders' net income (loss)	$	544	$	77	$	59	$	20	$	(102)	$	598
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment (gains)		(16)		(9)		(6)		-		-		(31)
Amortization of other acquired intangible assets, net		14		6		-		-		-		20
Special Items:
Long-term care guaranty fund assessment		68		-		15		-		-		83
Merger-related transaction costs		-		-		-		-		49		49
Adjusted income (loss) from operations	$	610	$	74	$	68	$	20	$	(53)	$	719
Three Months Ended March 31, 2016
Premiums, fees and other revenues and mail order pharmacy revenues	$	7,812	$	780	$	1,029	$	27	$	(4)	$	9,644
Net investment income		72		26		80		90		4		272
Operating revenues	$	7,884	$	806	$	1,109	$	117	$	-	$	9,916
Total revenues	$	7,867	$	804	$	1,106	$	107	$	-	$	9,884
Shareholders' net income (loss)	$	514	$	59	$	13	$	14	$	(81)	$	519
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment losses		12		1		2		6		-		21
Amortization of other acquired intangible assets, net		18		7		-		-		-		25
Special Item:
Merger-related transaction costs		-		-		-		-		36		36
Adjusted income (loss) from operations	$	544	$	67	$	15	$	20	$	(45)	$	601

The Company had net receivablesfrom CMS of $0.5 billion as of March 31, 2017and $0.6 billion as of December 31, 2016. These amounts were included in the Consolidated Balance Sheets in premiums, accounts and notes receivable and reinsurance recoverables. Premiums from CMS were 18% of consolidated revenues for the three months ended March 31, 2017and 21% for the three months endedMarch 31, 2016. These amounts were reported in the Global Health Care segment.

XML

Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Consolidated Financial Statements include the accounts of Cigna Corporation and its subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation.  These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Amounts recorded in the Consolidated Financial Statements necessarily reflect management's estimates and assumptions about medical costs, investment valuation, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment. Certain reclassifications may be made to prior year amounts to conform to the current presentation.

These interim Consolidated Financial Statements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported. The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company's 2016 Annual Report on Form 10-K (“2016 Form 10-K”). The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates. This and certain other factors, including the seasonal nature of portions of the health care and related benefits business as well as competitive and other market conditions, call for caution in estimating full year results based on interim results of operations.

Recent Accounting Changes

Recent Accounting Pronouncements

The Company's 2016Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future.

The following tables provide information about recently adopted and recently issued or changed accounting guidance (applicable to Cigna) that have occurred since the Company filed its 2016 Form 10-K.

Recently Adopted Accounting Guidance

Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (Accounting Standards Update (“ASU”) 2016-15) Early adopted as of December 31, 2016	Specifies how certain transactions should be classified in the statement of cash flows. While the standard addresses multiple types of transactions, only a change in the treatment of distributions from equity method investments impacted the Company.
	Effects of adoption: using the nature of distribution approach, the Company reported $45 million of cash receipts related to distributions from partnership earnings in operating activities for the three months ended March 31, 2017. The Company reclassified $27 million for the three months ended March 31, 2016 from investing to operating activities in the Consolidated Statements of Cash Flows.

Recently Issued Accounting Guidance Not Yet Adopted

Accounting Standard and Effective Date Applicable for Cigna	Requirements and Expected Effects of New Guidance Not Yet Adopted
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) Required as of January 1, 2018	Requires employers to separate the service cost component from the other components of net benefit cost. Under the new guidance, only service cost is eligible for capitalization (either deferred policy acquisition costs or capitalized software). The change in the capitalization rule is to be applied prospectively upon adoption. In addition, the income statement caption(s) where each component of net benefit cost is presented must be disclosed.
	Expected effects: the Company expects the effect of this new guidance to be immaterial to its results of operations.
Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) Required as of January 1, 2018	Requires:
		• Entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method • Cumulative effect adjustment to the beginning balance of retained earnings at adoption
	Expected effects:
		• Certain limited partnership interests carried at cost of $240 million as of March 31, 2017 will be reported at fair value at adoption • An increase to retained earnings of approximately $50 million, after-tax, if implemented as of March 31, 2017. Actual cumulative effect adjustment will depend on investments held and market conditions at adoption.
Revenue from Contracts with Customers (ASU 2014-09 and related amendments) Required as of January 1, 2018, with early adoption permitted as of January 1, 2017	Requires:
		• Companies to estimate and allocate the expected customer contract revenues among distinct goods or services based on relative standalone selling prices • Revenues to be recognized as goods or services are delivered • Extensive new disclosures including the presentation of additional categories of revenues and information about related contract assets and liabilities • Adoption through retrospective restatement with or without using certain practical expedients or adoption with a cumulative effect adjustment
	Expected effects:
		• Applies to the Company’s non-insurance, administrative service contracts but does not apply to certain contracts within the scope of other GAAP, such as insurance contracts • The Company currently expects to adopt the new guidance as of January 1, 2018 through retrospective restatement • The Company does not currently expect the adoption of the new guidance to have a material impact to its pattern of revenue recognition or net income • The Company is continuing to evaluate the new requirements. Specifically, the Company is evaluating the combination of contract guidance for certain customers when the Company provides both insurance and non-insurance products, the deferral of revenue for services provided after the termination of certain administrative contracts and the Company’s status as principal or agent for certain performance obligations.

Reinsurance

GMDB

The Company estimates the gross liability and reinsurance recoverable with an internal model based on the Company's experience and future expectations over anextended period, consistent with the long-term nature of this product. As a result of the reinsurance transaction, reserve increases have acorresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overallBerkshire limit (including the GMIB asset presented below). The ending net retained reserve covers ongoing administrative expenses, as well as minor claim exposure retained by the Company.

Because the product is premium deficient, the Company records an increase to the net retained reserve if it is inadequate based on the model.

Fair Value Measurements

Assumptions used in fair value measurement. The Company estimates the fair value of the assets and liabilities for GMIB contracts by calculating the results for many scenarios run through a model utilizing various assumptions. The only assumption expected to impact future shareholders' net income is non-performance risk. The non-performance risk adjustment reflects a market participant's view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company, and (b) the GMIB assets to be paid by the reinsurers, after considering collateral.

Other assumptions that affect GMIB assets and liabilities include capital market assumptions (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments) and future annuitant behavior (including mortality, lapse, and annuity election rates). As certain assumptions used to estimate fair values for these contracts are largely unobservable (primarily related to future annuitant behavior), the Company classifies GMIB assets and liabilities in Level 3 in the fair value hierarchy presented in Note 9.

The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to calculate the non-performance risk of the reinsurers, would result in higher fair value measurements. A change in one of these assumptions is not necessarily accompanied by a change in another assumption.

The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, such as when impaired.

Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor.

The Company's financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset's or a liability's classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument's fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).

The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair value. The internal pricing methods are performed by the Company's investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models.

The Company is responsible for determining fair value, as well as for assigningthe appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. The Company reviews methodologies, processes and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. Annually, we conduct an on-site visit of the most significant pricing service to review their processes, methodologies and controls. This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process.

Level 1 Financial Assets

Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date.  Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets.

Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities.Given the narrow definition of Level 1 and the Company's investment asset strategy to maximize investment returns, a relatively small portion of the Company's investment assets are classified in this category.

Level 2 Financial Assets and Financial Liabilities

Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument.  Such other inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.

Fixed maturities and equity securities.Approximately93% of the Company's investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks.  Because many fixed maturities do not trade daily, third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics. When recent trades are not available, pricing models are used to determine these prices.  These models calculate fair values by discounting future cash flows at estimated market interest rates.  Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events.  For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating.

Nearly all of these instruments are valued using recent trades or pricing models. Less than 1% of the fair value of investments classified in Level 2 represents foreign bonds thatare valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice.

Short-term investments are carried at fair value which approximates cost. On a regular basis, the Company compares market prices for these securities to recorded amounts to validate that current carrying amounts approximate exit prices. The short-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2.

Other derivatives classified in Level 2 represent over-the-counter instruments such as interest rate and foreign currency swap contracts.  Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices.  Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives.  However, the Company is largely protected by collateral arrangements with counterpartiesand determined that no adjustment for credit risk was required as of March 31, 2017 or December 31, 2016.  Level 2 also includes exchange-traded interest rate swap contracts. Credit risk related to the clearinghouse counterparty and the Company is considered minimal when estimating the fair values of these derivatives because of upfront margin deposits and daily settlement requirements. The nature and use of these other derivatives are described in Note 11.

Level 3 Financial Assets and Financial Liabilities

Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement.  Unobservable inputs reflect the Company's best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.

The Company classifies certain newly issued, privately-placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3.Approximately 3% of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category.

Fair values ofmortgage and other asset-backed securities, corporate and government fixed maturities are primarily determined using pricing models that incorporate the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads and liquidity of assets with similar characteristics.  For mortgage and other asset-backed securities, inputs and assumptions for pricing may also include collateral attributes and prepayment speeds.  Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation, as well as the issuer's financial statements.

The significant unobservable inputs used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spreads. When there is limited trading activity for the security, an adjustment for liquidity is made as of the measurement date that considers current market conditions, issuer circumstances and complexity of the security structure. An adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral's characteristics and their proportional cash flows supporting the bond obligations. The resulting wide range of unobservable adjustments in the table below is due to the varying liquidity and quality of the underlying collateral, ranging from high credit quality to below investment grade.

The significant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. When there is limited trading activity for the security, an adjustment is needed to reflect current market conditions and issuer circumstances.

The significant unobservable input used to value the following equity securities is a multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”). These securities are comprised of private equity investments with limited trading activity and therefore a ratio of EBITDA is used to estimate value based on company circumstances and relative risk characteristics.

Significant increases in fixed maturity spreads would result in lower fair value measurements while decreases in these inputs would result inhigher fair value measurements. Significant decreases in equity price-to-EBITDA multiples would result in lower fair value measurements while increases in these inputs would result in higher fair value measurements. Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input.

As noted in the preceding tables, total gains and losses included in shareholders' net income are reflected in the following captions in the Consolidated Statements of Income:

• Realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities and realized investment gains (losses) for the impact of changes in non-performance risk related to GMIB assets and liabilities, similar to hedge ineffectiveness; and
• Other operating expenses for amounts related to GMIB assets and liabilities (GMIB fair value gain/loss), except for the impact of changes in non-performance risk.

In the tables above, gains and losses included in other comprehensive income are reflected in net unrealized appreciation (depreciation) on securities in the Consolidated Statements of Comprehensive Income.

Reclassifications impacting Level 3 financial instruments are reported as transfers into or out of the Level 3 category as of the beginning of the quarter in which the transfer occurs. Therefore gains and losses in income only reflect activity for the periodthe instrument was classified in Level 3. 

Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company's best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement.

Separate account assets in Level 1 primarily include exchange-listed equity securities.  Level 2 assets primarily include:

• corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and
• actively-traded institutional and retail mutual fund investments and separate accounts priced using the daily net asset value that is the exit price.

Separate account assets classified in Level 3 primarily support Cigna's pension plans, and include certain newly issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above, as well as commercial mortgage loans that are valued according to the methodologies discussed below.

Separate account investments in securities partnerships, real estate, and hedge funds are generally valued based on the separate account's ownership share of the equity of the investee (NAV as a practical expedient), including changes in the fair values of its underlying investments. Substantially all of these assets support the Cigna Pension Plans.

Some financial assets and liabilitiesare not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments in real estate, partnershipentities and commercial mortgage loans when they become impaired.

Commercial mortgage loans. The Company estimates the fair value of commercial mortgage loans generally by discounting the contractual cash flows at estimated market interest rates that reflect the Company's assessment of the credit quality of the loans. Market interest rates are derived by calculating the appropriate spread over comparable U.S. Treasury rates based on the property type, quality rating and average life of the loan. The quality ratings reflect the relative risk of the loan considering debt service coverage, the loan-to-value ratio and other factors. Fair values of impaired mortgage loans are based on the estimated fair value of the underlying collateral generally determined using an internal discounted cash flow model.The fair value measurements were classified in Level 3 because the cash flow models incorporate significant unobservable inputs.

Contractholder deposit funds, excluding universal life products. Generally, these funds do not have stated maturities. Approximately 70% of these balances can be withdrawn by the customer at any time without prior notice or penalty. The fair value for these contracts is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. Most of the remaining contractholder deposit funds are reinsured by the buyers of the individual life and annuity and retirement benefits businesses. The fair value for these contracts is determined using the fair value of these buyers' assets supporting these reinsured contracts. The Company had reinsurance recoverables equal to the carrying value of these reinsured contracts.These instruments were classified in Level 3 because certain inputs are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement.

Long-term debt, including current maturities, excluding capital leases.The fair value of long-term debt is based on quoted market prices for recent trades. When quoted market prices are not available, fair value is estimated using a discounted cash flow analysis and the Company's estimated current borrowing rate for debt of similar terms and remaining maturities.These measurements were classified in Level 2 because the fair values are based on quoted market prices or other inputs that are market observable or can be corroborated by market data.

Separate Accounts

Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company's revenues and expenses. See Note 10 to the Consolidated Financial Statements contained in the Company's 2016 Form 10-K for additional policy information related to separate accounts.

Investments

Review of declines in fair value. Management reviews fixed maturities with a decline in fair value from cost for impairment based on criteria that include:

• length of time and severity of decline;

• financial health and specific near term prospects of the issuer;
• changes in the regulatory, economic or general market environment of the issuer's industry or geographic region; and
• the Company's intent to sell or the likelihood of a required sale prior toexpected recovery.

Equity securities include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income.

       Potential problem mortgage loans are considered current (no payment is more than 59 days past due), but they exhibit certain characteristics that increase the likelihood of future default. The characteristics management considers include, but are not limited to, the deterioration of debt service coverage below 1.0, estimated loan-to-value ratios increasing to 100% or more, downgrade in quality rating and requests from the borrower for restructuring. In addition, loans are considered potential problems if principal or interest payments are past due by more than 30 but less than 60 days. Problem mortgage loans are either in default by 60 days or more or have been restructured as to termsthat could include concessions on interest rate, principal payment or maturity date. The Company monitors each problem and potential problem mortgage loan on an ongoing basis, and updates the loan categorization and quality rating when warranted.

Impaired commercial mortgage loans. A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due according to the terms of the original loan agreement. These loans are included in either problem or potential problem loans. The Company monitors credit risk and assesses the impairment of loans individually and on a consistent basis for all loans in the portfolio. Impaired loans are carried at the lower of unpaid principal balance or the fair value of the underlying real estate. Certain commercial mortgage loans without valuation reserves are considered impaired because the Company will not collect all interest due according to the terms of the original agreements; however, the Company expects to recover the unpaid principal because it is less than the fair value of the underlying real estate.The Company recognizes interest income on impaired mortgage loans only when payment is actually received.

The Company's annual in-depth review of its commercial mortgage loan investments is the primary mechanism for identifying emerging risks in the portfolio. The most recent review was completed by the Company's investment professionals in the second quarter of 2016 and included an analysis of each underlying property's most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors.Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value and categorizes the investments as loans in good standing, potential problem loans or problem loans.

The Company will reevaluate a loan's credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower's request for restructure causes management to believe that the Company's estimate of financial performance, fair value or the risk profile of the underlying property has been impacted.

Derivative Financial Instruments

While GMDB is accounted for as reinsurance, GMIB assets and liabilities are reported as derivatives at fair value as discussed below. Accordingly, GMIB assets are reported in other assets, including intangibles, and GMIB liabilities are reported in accounts payable, accrued expenses and other liabilities.

The Company reports GMIB liabilities and assets as derivatives at fair value because cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments.

Accounting policy.The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges.Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various quantitativemethods appropriate for each hedge, including regression analysis and dollar offset. Under hedge accounting, the changes in fair value of thederivative and the hedged risk are generally recognized together and offset each other when reported in shareholders' net income. Changes inthe fair value of a derivative instrument may not always equal changes in the fair value of the hedged item. This is referred to as ''hedgeineffectiveness'' and is generally recorded in realized investment gains and losses. In the event of an early hedge termination, the changes in fairvalue of derivatives that qualified for hedge accounting are reported in shareholders' net income, generally as a part of realized investmentgains and losses. See Note 9 for further information on our policies for determining fair value. Derivative cash flows are generally reported in operating activities.

Accounting. Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. The critical terms of these swaps match those of the long-term debt being hedged. As a result, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by LIBOR. The effects of those adjustments on other operating expenses are offset by the effects of corresponding changes in the swaps' fair value. The net impact from the hedge reported in other operating expenses reflects interest expense on the hedged debt at the variable interest rate.Accounting. Using cash flow hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities. Changes in fair values are reported in accumulated other comprehensive income and amortized into net investment income or other realized investment gains and losses as interest or principal payments are received.Accounting. Using fair value hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities. Changes in fair values of the swap contracts, as well as changes in the fair values of the hedged bonds attributable to the hedged risk are reported in other realized investment gains and losses.Accounting. As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses.

Variable Interest Entities

When the Company becomes involved with a variable interest entity, as well as when there is a change in the Company's involvement with an entity, the Company evaluates the following to determine if it is the primary beneficiary and must consolidate the entity:

• the structure and purpose of the entity;
• the risks and rewards created by and shared through the entity; and
• the Company's ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income (loss) excludes amounts required to adjust future policy benefits for the run-off settlement annuity business and a portion of deferred acquisition costs associated with the corporate owned life insurance business.

Income Taxes

The Company maintains a capital management strategy to retain overseas a significant portion of the earnings from its foreign operations.

These undistributed earnings are deployed outside of the U.S. predominantly in support of the liquidity and regulatory capital requirements of our foreign operations. The Company does not intend to repatriate these earnings to the U.S. and as a result, income taxes are provided using the respective foreign jurisdictions' tax rate.

Commitments and Contingencies

Separate account assets are contractholder funds maintained in accounts with specific investment objectives. The Company records separate account liabilities equal to separate account assets.  In certain cases, the Company guarantees a minimum level of benefits for retirement and insurance contracts written in separate accounts.  The Company establishes an additional liability if management believes that the Company will be required to make a payment under these guarantees.

When the Company (in the course of its regular review of pending litigation and legal or regulatory matters) has determined that a material loss is reasonably possible, the matter is disclosed. Such matters are described below. In accordance with GAAP, when litigation and regulatory matters present loss contingencies that are both probable and estimable, the Company accrues the estimated loss by a charge to shareholders' net income. The amount accrued represents the Company's best estimate of the probable loss at the time. If only a range of estimated losses can be determined, the Company accrues an amount within the range that, in the Company's judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, the Company accrues the minimum amount of the range. In cases when the Company has accrued an estimated loss, the accrued amount may differ materially from the ultimate amount of the loss. In many proceedings, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount or range of any loss. The Company provides disclosure in the aggregate for material pending litigation and legal or regulatory matters, including accruals, range of loss, or a statement that such information cannot be estimated. As a litigation or regulatory matter develops, the Company monitors the matter for further developments that could affect the amount previously accrued, if any, and updates such amount accrued or disclosures previously provided as appropriate.

Segment Information

In the Company's segment disclosures, we present “operating revenues,” defined as total revenues excluding realized investment results. The Company excludes realized investment results from this measure because its portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. As a result, gains or losses created in this process may not be indicative of the past or future underlying performance of the business.

The Company uses “adjusted income (loss) from operations” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitability. Adjusted income from operations is defined as shareholders' net income (loss) excluding after-tax realized investment gains and losses, net amortization of other acquired intangible assets and special items. Income or expense amounts are excluded from adjusted income from operations for the following reasons:

• Realized investment results are excluded because, as noted above, the Company's portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment.
• Net amortization of other intangible assets is excluded because it relates to costs incurred for acquisitions and, as a result, it does not relate to the core performance of the Company's business operations.
• Special items, if any, are excluded because management believes they are not representative of the underlying results of operations.This is generally because the nature and size of these matters are not indicative of our ongoing business operations. Further context about these items is provided in the footnotes listed in the table below.

XML

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Earnings per Share

	Three Months Ended
	March 31, 2017						March 31, 2016
(Shares in thousands, dollars in millions, except per share amounts)			Effect of						Effect of
	Basic		Dilution		Diluted		Basic		Dilution		Diluted
Shareholders' net income	$	598			$	598	$	519			$	519
Shares:
Weighted average		255,680				255,680		254,822				254,822
Common stock equivalents				4,094		4,094				4,625		4,625
Total shares		255,680		4,094		259,774		254,822		4,625		259,447
EPS	$	2.34	$	(0.04)	$	2.30	$	2.04	$	(0.04)	$	2.00

Antidilutive Options Table

	Three Months Ended
(In millions)	March 31, 2017	March 31, 2016
Anti-dilutive options	2.5	1.3

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2017

Debt [Table] [Abstract]

Short-term and Long-term Debt

	March 31,		December 31,
(In millions)	2017		2016
Short-term:
Current maturities of long-term debt	$	131	$	250
Other, including capital leases		11		26
Total short-term debt	$	142	$	276
Long-term:
$131 million, 6.35% Notes due 2018	$	-	$	131
$250 million, 4.375% Notes due 2020 (1)		252		252
$300 million, 5.125% Notes due 2020 (1)		301		301
$78 million, 6.37% Notes due 2021		78		78
$300 million, 4.5% Notes due 2021 (1)		301		302
$750 million, 4% Notes due 2022		744		744
$100 million, 7.65% Notes due 2023		100		100
$17 million, 8.3% Notes due 2023		17		17
$900 million, 3.25% Notes due 2025		893		893
$300 million, 7.875% Debentures due 2027		299		299
$83 million, 8.3% Step Down Notes due 2033		82		82
$500 million, 6.15% Notes due 2036		498		498
$300 million, 5.875% Notes due 2041		296		296
$750 million, 5.375% Notes due 2042		743		743
Other, including capital leases		17		20
Total long-term debt	$	4,621	$	4,756

XML

Global Health Care Medical Costs Payable (Tables) - Global Health Benefits Segment [Member]

3 Months Ended

Mar. 31, 2017

Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]

Components of Global Health Care medical costs payable

	March 31,		March 31,
(In millions)	2017		2016
Incurred but not reported	$	2,088	$	1,960
Reported claims in process		542		506
Physician incentives and other medical care expenses and services payable		140		180
Global Health Care medical costs payable	$	2,770	$	2,646

	Three Months Ended
(Dollars in millions)	March 31, 2017			March 31, 2016
		$	%(1)			$	%(2)
Actual completion factors	$	78	0.4	%	$	51	0.3	%
Medical cost trend		98	0.5			28	0.1
Other (3)		-	-			(15)	(0.1)
Total favorable (unfavorable) variance	$	176	0.9	%	$	64	0.3	%
(1) Percentage of current year incurred costs as reported for the year ended December 31, 2016.
(2) Percentage of current year incurred costs as reported for the year ended December 31, 2015.
(3) Other amounts in 2016 related to increased medical costs in the Government segment resulting from additional provider risk sharing.

Activity in medical costs payable

	Three Months Ended
	March 31,		March 31,
(In millions)	2017		2016
Beginning balance	$	2,532	$	2,355
Less: Reinsurance and other amounts recoverable		275		243
Beginning balance, net		2,257		2,112
Incurred costs related to:
Current year		5,161		4,825
Prior years		(176)		(64)
Total incurred		4,985		4,761
Paid costs related to:
Current year		3,219		2,985
Prior years		1,509		1,449
Total paid		4,728		4,434
Ending balance, net		2,514		2,439
Add: Reinsurance and other amounts recoverable		256		207
Ending balance	$	2,770	$	2,646

XML

Liabilities for Unpaid Claims and Claims Expenses (Tables)

3 Months Ended

Mar. 31, 2017

Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member]

Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]

Liability balance details

	March 31,		March 31,
(In millions)	2017		2016
Group Disability and Life	$	4,384	$	4,146
Global Supplemental Benefits		425		367
Other Operations		197		211
Unpaid claims and claim expenses	$	5,006	$	4,724

Group Disability and Life and Global Supplemental Benefits [Member]

Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]

Liability balance details

	Three Months Ended
(In millions)	March 31, 2017		March 31, 2016
Beginning balance	$	4,726	$	4,359
Less: Reinsurance		121		115
Beginning balance, net		4,605		4,244
Incurred claims related to:
Current year		1,148		988
Prior years:
Interest accretion		43		43
All other incurred		(64)		105
Total incurred		1,127		1,136
Paid claims related to:
Current year		371		327
Prior years		691		660
Total paid		1,062		987
Foreign currency		16		5
Ending balance, net		4,686		4,398
Add: Reinsurance		123		115
Ending balance	$	4,809	$	4,513

XML

Reinsurance (Tables)

3 Months Ended

Mar. 31, 2017

Effects Of Reinsurance [Line Items]

Components of reinsurance recoverables

(In millions)
			March 31,		December 31,		Collateral and Other Terms
Line of Business		Reinsurer(s)	2017		2016		at March 31, 2017
Ongoing operations:
	Global Health Care, Global Supplemental Benefits, Group Disability and Life	Various	$	478	$	478	Recoverables from approximately 80 reinsurers including the U.S. Government, used in the ordinary course of business. Current balances range from less than $1 million up to $93 million. Excluding the recoverable from the U.S. Government of $39 million, over 60% of the balance is from companies rated investment grade by Standard & Poor's, and 13% is secured by assets in trusts or letters of credit.
	Total recoverables related to ongoing operations			478		478
Acquisition, disposition or runoff activities:
	Individual Life and Annuity (sold in 1998)	Lincoln National Life and Lincoln Life & Annuity of New York		3,551		3,586	Both companies' ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance.
	GMDB	Berkshire		1,052		1,085	100% secured by assets in a trust.
		Other		42		44	100% secured by assets in a trust or letters of credit.
	Retirement Benefits Business (sold in 2004)	Prudential Retirement Insurance and Annuity		904		921	100% secured by assets in a trust.
	Supplemental Benefits Business (2012 acquisition)	Great American Life		293		297	100% secured by assets in a trust.
	Other run-off reinsurance	Various		66		67	100% secured by assets in trusts.
	Total recoverables related to acquisition, disposition or runoff activities			5,908		6,000
Total reinsurance recoverables			$	6,386	$	6,478

Effects of Reinsurance

	Three Months Ended
	March 31,
(In millions)	2017		2016
Ceded premiums:
Individual life insurance and annuity business sold	$	39	$	41
Other		81		95
Total ceded premiums	$	120	$	136
Reinsurance recoveries:
Individual life insurance and annuity business sold	$	70	$	68
Other		29		96
Total reinsurance recoveries	$	99	$	164

Variable Annuity [Member] | Guaranteed Minimum Death Benefit [Member]

Effects Of Reinsurance [Line Items]

Future policy benefits for GMDB business

	For the period ended
	March 31,		December 31,
(In millions)	2017		2016
Balance at January 1	$	1,224	$	1,252
Add: Unpaid claims		16		18
Less: Reinsurance and other amounts recoverable		1,129		1,164
Balance at January 1, net		111		106
Add: Incurred benefits		-		4
Less: Paid benefits (recoveries)		(1)		(1)
Ending balance, net		112		111
Less: Unpaid claims		18		16
Add: Reinsurance and other amounts recoverable		1,094		1,129
Ending balance	$	1,188	$	1,224

Account value, net amount at risk, contractholder average age

(Dollars in millions, excludes impact of reinsurance ceded)	March 31, 2017		December 31, 2016
Account value	$	10,755	$	10,650
Net amount at risk	$	2,335	$	2,458
Number of contractholders		280,000		285,000

Variable Annuity [Member] | Guaranteed Minimum Income Benefit [Member]

Effects Of Reinsurance [Line Items]

Components of reinsurance recoverables

(In millions)
		March 31,		December 31,		Collateral and Other Terms
Line of Business	Reinsurer(s)	2017		2016		at March 31, 2017
GMIB	Berkshire	$	360	$	370	100% secured by assets in a trust.
	Sun Life Assurance Company of Canada		220		227
	Liberty Re (Bermuda) Ltd.		197		202	100% secured by assets in a trust.
Total GMIB recoverables reported in other assets		$	777	$	799

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Financial assets and liabilities carried at fair value

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions)	(Level 1)		(Level 2)		(Level 3)		Total
March 31, 2017
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	372	$	525	$	-	$	897
State and local government		-		1,419		-		1,419
Foreign government		-		2,273		39		2,312
Corporate		-		16,144		483		16,627
Mortgage and other asset-backed		-		324		155		479
Total fixed maturities (1)		372		20,685		677		21,734
Equity securities		402		122		50		574
Subtotal		774		20,807		727		22,308
Short-term investments		-		303		-		303
GMIB assets		-		-		777		777
Other derivative assets		-		4		-		4
Total financial assets at fair value, excluding separate accounts	$	774	$	21,114	$	1,504	$	23,392
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	761	$	761
Other derivative liabilities		-		2		-		2
Total financial liabilities at fair value	$	-	$	2	$	761	$	763
(1) Fixed maturities includes $543 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $14 million of appreciation for securities classified in Level 3. See Note 10 for additional information.
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions)	(Level 1)		(Level 2)		(Level 3)		Total
December 31, 2016
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	374	$	503	$	-	$	877
State and local government		-		1,435		-		1,435
Foreign government		-		2,066		47		2,113
Corporate		-		15,552		498		16,050
Mortgage and other asset-backed		-		329		157		486
Total fixed maturities (1)		374		19,885		702		20,961
Equity securities		396		113		74		583
Subtotal		770		19,998		776		21,544
Short-term investments		-		691		-		691
GMIB assets		-		-		799		799
Other derivative assets		-		10		-		10
Total financial assets at fair value, excluding separate accounts	$	770	$	20,699	$	1,575	$	23,044
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	780	$	780
Other derivative liabilities		-		5		-		5
Total financial liabilities at fair value	$	-	$	5	$	780	$	785
(1) Fixed maturities includes $524 million of net appreciation required to adjust future policy benefits for run-off settlement annuity business including $14 million of appreciation for securities classified in Level 3.

Level 3 fixed maturities and equity securities priced using significant unobservable inputs

			Unobservable Input	Unobservable Adjustment Range (Weighted Average)
(Fair value in millions)		Fair Value
As of March 31, 2017
Fixed maturities:
Mortgage and other asset-backed securities	$	155	Liquidity	60 - 340 (90) bps
			Weighting of credit spreads	170 - 450 (230) bps
Corporate and government fixed maturities		498	Liquidity	70 - 2,550 (340) bps
Total fixed maturities		653
Equity securities		50	Price-to-EBITDA multiples	5.0 - 12.0 (8.3)
Subtotal		703
Securities not priced by the Company(1)		24
Total Level 3 securities	$	727
As of December 31, 2016
Fixed maturities:
Mortgage and other asset-backed securities	$	157	Liquidity	60 - 330 (90) bps
			Weighting of credit spreads	160 - 470 (230) bps
Corporate and government fixed maturities		490	Liquidity	80 - 1,300 (340) bps
Total fixed maturities		647
Equity securities		74	Price-to-EBITDA multiples	4.2 - 11.6 (8.5)
Subtotal		721
Securities not priced by the Company(1)		55
Total Level 3 securities	$	776
(1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.

Changes in level 3 financial assets and liabilities carried at fair value

	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)
For the Three Months Ended March 31, 2017
Balance at January 1, 2017	$	776	$	799	$	(780)	$	19
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		(11)		11		-
Other		23		1		(4)		(3)
Total gains (losses) included in shareholders' net income		23		(10)		7		(3)
Losses included in other comprehensive income		(8)		-		-		-
Gains required to adjust future policy benefits for settlement annuities (1)		-		-		-		-
Purchases, sales and settlements:
Purchases		25		-		-		-
Sales		(47)		-		-		-
Settlements		(27)		(12)		12		-
Total purchases, sales and settlements		(49)		(12)		12		-
Transfers into/(out of) Level 3:
Transfers into Level 3		40		-		-		-
Transfers out of Level 3		(55)		-		-		-
Total transfers into/(out of) Level 3		(15)		-		-		-
Balance at March 31, 2017	$	727	$	777	$	(761)	$	16
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	(6)	$	(10)	$	7	$	(3)
(1) Amounts do not accrue to shareholders.
	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)
For the Three Months Ended March 31, 2016
Balance at January 1, 2016	$	726	$	907	$	(885)	$	22
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		61		(61)		-
Other		(25)		(1)		(5)		(6)
Total gains (losses) included in shareholders' net income		(25)		60		(66)		(6)
Losses included in other comprehensive income		-		-		-		-
Gains required to adjust future policy benefits for settlement annuities (1)		11		-		-		-
Purchases, sales and settlements:
Purchases		24		-		-		-
Sales		-		-		-		-
Settlements		(11)		(10)		10		-
Total purchases, sales and settlements		13		(10)		10		-
Transfers into/(out of) Level 3:
Transfers into Level 3		128		-		-		-
Transfers out of Level 3		(61)		-		-		-
Total transfers into/(out of) Level 3		67		-		-		-
Balance at March 31, 2016	$	792	$	957	$	(941)	$	16
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	(25)	$	60	$	(66)	$	(6)
(1) Amounts do not accrue to shareholders.

Separate account assets schedule

(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
March 31, 2017
Guaranteed separate accounts (See Note 16)	$	245	$	263	$	-	$	508
Non-guaranteed separate accounts (1)		1,435		5,076		330		6,841
Subtotal	$	1,680	$	5,339	$	330		7,349
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)								848
Total separate account assets							$	8,197
December 31, 2016
Guaranteed separate accounts (See Note 16)	$	238	$	262	$	-	$	500
Non-guaranteed separate accounts (1)		1,368		4,885		331		6,584
Subtotal	$	1,606	$	5,147	$	331		7,084
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)								856
Total separate account assets							$	7,940

(1) Non-guaranteed separate accountsincluded $3.8 billion as of March 31, 2017 and $3.7 billion as ofDecember 31, 2016 in assets supporting the Company's pension plans,including $0.3billionclassified in Level 3 for both periods and $0.8 billionas of March 31, 2017 and $0.9 billion as ofDecember 31, 2016 priced at net asset value (“NAV”) as a practical expedient.

Changes in level 3 separate account assets

	Three Months Ended
	March 31,
(In millions)	2017		2016
Balance, beginning of period	$	331	$	297
Policyholder gains (losses)		27		(1)
Purchases, sales and settlements:
Purchases		10		4
Sales		(35)		(1)
Settlements		(1)		(2)
Total purchases, sales and settlements		(26)		1
Transfers into/(out of) Level 3:
Transfers into Level 3		-		23
Transfers out of Level 3		(2)		(3)
Total transfers into/(out of) Level 3		(2)		20
Balance, end of period	$	330	$	317

Separate account assets priced at net asset value

	Fair Value as of
(In millions)	March 31, 2017		December 31, 2016		Unfunded Commitments		Redemption Frequency (if currently eligible) (1)	Redemption Notice Period (1)
Security Partnerships	$	409	$	424	$	340	Not applicable	Not applicable
Real Estate Funds		234		231		-	Quarterly	45-90 days
Hedge Funds		205		201		-	Up to Annually, varying by fund	30-90 days
Total	$	848	$	856	$	340

• The attributes notedare effective as of March 31, 2017 and December 31, 2016.

Financial instruments not carried at fair value

			March 31, 2017				December 31, 2016
(In millions)	Classification in the Fair Value Hierarchy		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,776	$	1,752	$	1,682	$	1,666
Contractholder deposit funds, excluding universal life products	Level 3	$	1,206	$	1,203	$	1,215	$	1,212
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,331	$	4,735	$	5,460	$	4,991

XML

Investments (Tables)

3 Months Ended

Mar. 31, 2017

Investment [Line Items]

Impaired commercial mortgage loans and related valuation reserves

		March 31, 2017					December 31, 2016
(In millions)		Gross		Reserves		Net		Gross		Reserves		Net
Impaired commercial mortgage loans with valuation reserves	$	9	$	(3)	$	6	$	26	$	(5)	$	21
Impaired commercial mortgage loans without valuation reserves		-		-		-		-		-		-
Total impaired commercial mortgage loans	$	9	$	(3)	$	6	$	26	$	(5)	$	21

Realized gains and losses on investments

	Three Months Ended
	March 31,
(In millions)	2017		2016
Fixed maturities	$	2	$	(18)
Equity securities		33		(10)
Other investments, including derivatives		11		(4)
Realized investment gains (losses) before income taxes		46		(32)
Less income taxes (benefits)		15		(11)
Net realized investment gains (losses)	$	31	$	(21)

Pre-tax asset write-downs included in realized gains (losses) on investments

	Three Months Ended
	March 31,
(In millions)	2017		2016
Other-than-temporary impairments on debt securities:
Credit-related	$	(5)	$	(18)
Non credit-related (1)		(2)		(9)
Total other-than-temporary impairments on debt securities		(7)		(27)
Other asset write-downs (2)		(3)		(9)
Total write-downs	$	(10)	$	(36)
(1) These write-downs pertain to other-than-temporary declines in fair values due to increases in market yields (widening of credit spreads) for certain below investment grade fixed maturities with an increased probability of sales activity prior to recovery of their amortized cost basis.
(2) Other asset write-downs include other-than-temporary declines in fair values of equity securities and asset write-downs related to real estate investments.

Sales information for available-for-sale fixed maturities and equity securities

	Three Months Ended
	March 31,
(In millions)	2017		2016
Proceeds from sales	$	414	$	361
Gross gains on sales	$	47	$	12
Gross losses on sales	$	2	$	5

Fixed Maturities [Member]

Investment [Line Items]

Investment maturities

		Amortized		Fair
(In millions)		Cost		Value
Due in one year or less	$	1,405	$	1,416
Due after one year through five years		6,717		6,976
Due after five years through ten years		8,481		8,667
Due after ten years		3,586		4,196
Mortgage and other asset-backed securities		450		479
Total fixed maturities	$	20,639	$	21,734

Gross unrealized appreciation (depreciation) on fixed maturities

				Gross		Gross
				Unrealized		Unrealized
		Amortized		Appre-		Depre-		Fair
		Cost		ciation		ciation		Value
(In millions)	March 31, 2017
Federal government and agency	$	667	$	233	$	(3)	$	897
State and local government		1,324		100		(5)		1,419
Foreign government		2,206		122		(16)		2,312
Corporate		15,992		744		(109)		16,627
Mortgage and other asset-backed		450		32		(3)		479
Total fixed maturities	$	20,639	$	1,231	$	(136)	$	21,734
(In millions)	December 31, 2016
Federal government and agency	$	658	$	223	$	(4)	$	877
State and local government		1,342		99		(6)		1,435
Foreign government		1,998		129		(14)		2,113
Corporate		15,483		716		(149)		16,050
Mortgage and other asset-backed		461		29		(4)		486
Total fixed maturities	$	19,942	$	1,196	$	(177)	$	20,961

Fixed maturities with a decline in fair value from amortized cost

	March 31, 2017
	Fair		Amortized		Unrealized		Number
(Dollars in millions)	Value		Cost		Depreciation		of Issues
One year or less:
Investment grade	$	3,960	$	4,067	$	(107)	870
Below investment grade	$	619	$	630	$	(11)	532
More than one year:
Investment grade	$	265	$	276	$	(11)	47
Below investment grade	$	116	$	123	$	(7)	21

Commercial Mortgage Loans [Member]

Investment [Line Items]

Credit risk profile of commercial mortgage loan portfolio

		Debt Service Coverage Ratio
		1.30x or		1.20x to		1.10x to		1.00x to		Less than
Loan-to-Value Ratios		Greater		1.29x		1.19x		1.09x		1.00x		Total
(In millions)	March 31, 2017
Below 50%	$	331	$	15	$	-	$	-	$	-	$	346
50% to 59%		516		46		42		30		-		634
60% to 69%		687		14		-		-		-		701
70% to 79%		-		-		30		-		35		65
80% to 89%		-		-		-		-		-		-
90% to 100%		-		-		-		-		6		6
Total	$	1,534	$	75	$	72	$	30	$	41	$	1,752
(In millions)	December 31, 2016
Below 50%	$	335	$	15	$	-	$	-	$	-	$	350
50% to 59%		517		46		-		30		-		593
60% to 69%		624		14		-		-		-		638
70% to 79%		-		-		29		-		35		64
80% to 89%		-		-		-		-		-		-
90% to 100%		-		-		-		-		21		21
Total	$	1,476	$	75	$	29	$	30	$	56	$	1,666

XML

Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Foreign Currency Swaps [Member]

Derivative [Line Items]

Schedule of derivative instruments

Cash Flow Hedges of Fixed Maturity Bonds	Notional Value (in millions)
Type of instrument. Foreign currency swap contracts	March 31, 2017		December 31, 2016
	$	31	$	55
Purpose. To hedge the foreign currency cash flows of its fixed maturity bonds to match associated insurance liabilities.
Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Canadian dollars and Japanese yen and have terms for periods of up to four years.
Accounting. Using cash flow hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities. Changes in fair values are reported in accumulated other comprehensive income and amortized into net investment income or other realized investment gains and losses as interest or principal payments are received.

Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member]

Derivative [Line Items]

Schedule of derivative instruments

Fair Value Hedge of Long-Term Corporate Debt	Notional Value (in millions)
Type of instrument. Interest rate swap contracts	March 31, 2017		December 31, 2016
	$	750	$	750
Purpose. To convert a portion of the interest rate exposure on the Company's long-term debt from fixed to variable rates. This more closely aligns the Company's interest expense with the interest income received on its cash equivalent and short-term investment balances. The variable rates are benchmarked to LIBOR.
Terms of derivative instruments. The Company provides upfront margin and settles fair value changes and net interest between variable and fixed rates daily with a central clearinghouse.
Accounting. Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets, including other intangibles, or accounts payable, accrued expenses, and other liabilities. The critical terms of these swaps match those of the long-term debt being hedged. As a result, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by LIBOR. The effects of those adjustments on other operating expenses are offset by the effects of corresponding changes in the swaps' fair value. The net impact from the hedge reported in other operating expenses reflects interest expense on the hedged debt at the variable interest rate.

Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member]

Derivative [Line Items]

Schedule of derivative instruments

Fair Value Hedges of Fixed Maturity Bonds	Notional Value (in millions)
Type of instrument. Foreign currency swap contracts	March 31, 2017		December 31, 2016
	$	87	$	78
Purpose. To hedge the foreign exchange related changes in fair values of the Company's fixed maturity bonds.
Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Euros and British pounds and have terms for periods of up to nine years.
Accounting. Using fair value hedge accounting, fair values are reported in other long-term investments or accounts payable, accrued expenses, and other liabilities. Changes in fair values of the swap contracts, as well as changes in the fair values of the hedged bonds attributable to the hedged risk are reported in other realized investment gains and losses.

Non designated [Member] | Forward Contracts [Member]

Derivative [Line Items]

Schedule of derivative instruments

Economic Hedges of a Fixed Maturity Bond Portfolio	Notional Value (in millions)
Type of instrument. Foreign currency forward contracts	March 31, 2017		December 31, 2016
	$	150	$	149
Purpose. To hedge the foreign exchange related changes in fair values of a U.S. dollar-denominated fixed maturity bond portfolio to reflect the local currency for one of the Company's foreign subsidiaries.
Terms of derivative instruments. The Company agrees to purchase South Korean won in exchange for U.S. dollars at a future date, generally within three months from the contracts' trade dates.
Accounting. As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses.

XML

Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2017

Accumulated Other Comprehensive Income (Loss) [Abstract]

Changes in accumulated other comprehensive income (loss)

			Tax
			(Expense)		After-
(In millions)	Pre-Tax		Benefit		Tax
Three Months Ended March 31,
2017
Net unrealized appreciation, securities, January 1,	$	542	$	(180)	$	362
Unrealized appreciation on securities arising during the period		53		(24)		29
Reclassification adjustment for (gains) included in shareholders' net income (realized investment gains)		(35)		13		(22)
Net unrealized appreciation, securities arising during the period		18		(11)		7
Net unrealized appreciation, securities, March 31,	$	560	$	(191)	$	369
Net unrealized appreciation, derivatives, January 1,	$	4	$	(1)	$	3
Reclassification adjustment for (gains) included in shareholders' net income (net realized investment gains)		(4)		1		(3)
Net unrealized appreciation, derivatives, March 31,	$	-	$	-	$	-
Net translation of foreign currencies, January 1,	$	(390)	$	21	$	(369)
Net translation of foreign currencies arising during the period		111		1		112
Net translation of foreign currencies, March 31,	$	(279)	$	22	$	(257)
Postretirement benefits liability adjustment, January 1,	$	(2,120)	$	742	$	(1,378)
Reclassification adjustment for amortization of net losses from past
experience and prior service costs (other operating expenses)		15		(5)		10
Reclassification adjustment for settlement loss (other operating expenses)		6		(2)		4
Net postretirement benefits liability adjustment arising during the period		21		(7)		14
Postretirement benefits liability adjustment, March 31,	$	(2,099)	$	735	$	(1,364)
2016
Net unrealized appreciation, securities, January 1,	$	612	$	(194)	$	418
Unrealized appreciation on securities arising during the period		227		(72)		155
Reclassification adjustment for losses included in shareholders' net income (realized investment gains)		28		(10)		18
Net unrealized appreciation, securities arising during the period		255		(82)		173
Net unrealized appreciation, securities, March 31,	$	867	$	(276)	$	591
Net unrealized appreciation, derivatives, January 1,	$	10	$	(3)	$	7
Unrealized (depreciation), derivatives arising during the period		(4)		1		(3)
Net unrealized appreciation, derivatives, March 31,	$	6	$	(2)	$	4
Net translation of foreign currencies, January 1,	$	(295)	$	21	$	(274)
Net translation of foreign currencies arising during the period		83		(2)		81
Net translation of foreign currencies, March 31,	$	(212)	$	19	$	(193)
Postretirement benefits liability adjustment, January 1,	$	(2,155)	$	754	$	(1,401)
Reclassification adjustment for amortization of net losses from past
experience and prior service costs (other operating expenses)		16		(5)		11
Postretirement benefits liability adjustment, March 31,	$	(2,139)	$	749	$	(1,390)

XML

Pension and Other Postretirement Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2017

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Components of net defined benefit plan costs

	Pension Benefits				Other Postretirement Benefits
	Three Months Ended				Three Months Ended
	March 31,				March 31,
(In millions)	2017		2016		2017		2016
Interest cost	$	48	$	50	$	3	$	3
Expected long-term return on plan assets		(65)		(62)		-		-
Amortization of:
Net loss from past experience		16		17		-		-
Prior service cost		-		-		(1)		(1)
Settlement loss		6		-		-		-
Net cost	$	5	$	5	$	2	$	2

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2017

Segment Information [Abstract]

Special item charges

	Three Months Ended				Three Months Ended
	March 31, 2017				March 31, 2016
(In millions)	Before-tax impact		After-tax impact		Before-tax impact		After-tax impact
Long-term care guaranty fund assessment - see Note 16(D)	$	129	$	83	$	-	$	-
Merger-related transaction costs - see Note 3		63		49		40		36
Total impact from special items	$	192	$	132	$	40	$	36

Summarized segment financial information

(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
Three Months Ended March 31, 2017
Premiums, fees and other revenues and mail order pharmacy revenues	$	8,106	$	881	$	1,032	$	30	$	(13)	$	10,036
Net investment income		92		28		89		86		8		303
Operating revenues	$	8,198	$	909	$	1,121	$	116	$	(5)	$	10,339
Total revenues	$	8,224	$	922	$	1,129	$	115	$	(5)	$	10,385
Shareholders' net income (loss)	$	544	$	77	$	59	$	20	$	(102)	$	598
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment (gains)		(16)		(9)		(6)		-		-		(31)
Amortization of other acquired intangible assets, net		14		6		-		-		-		20
Special Items:
Long-term care guaranty fund assessment		68		-		15		-		-		83
Merger-related transaction costs		-		-		-		-		49		49
Adjusted income (loss) from operations	$	610	$	74	$	68	$	20	$	(53)	$	719
Three Months Ended March 31, 2016
Premiums, fees and other revenues and mail order pharmacy revenues	$	7,812	$	780	$	1,029	$	27	$	(4)	$	9,644
Net investment income		72		26		80		90		4		272
Operating revenues	$	7,884	$	806	$	1,109	$	117	$	-	$	9,916
Total revenues	$	7,867	$	804	$	1,106	$	107	$	-	$	9,884
Shareholders' net income (loss)	$	514	$	59	$	13	$	14	$	(81)	$	519
After-tax adjustments to reconcile to adjusted income from operations:
Net realized investment losses		12		1		2		6		-		21
Amortization of other acquired intangible assets, net		18		7		-		-		-		25
Special Item:
Merger-related transaction costs		-		-		-		-		36		36
Adjusted income (loss) from operations	$	544	$	67	$	15	$	20	$	(45)	$	601

XML

Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Distributions from partnership investments	[1]	$ 45	$ 27
Net cash provided by (used in) investing activities	[1]	$ (117)	(360)
Accounting Standards Update 2016-15 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Requirements and effects of new guidance		Specifies how certain transactions should be classified in the statement of cash flows. While the standard addresses multiple types of transactions, only a change in the treatment of distributions from equity method investments impacted the Company. Effects of adoption: using the nature of distribution approach, the Company reported $45 million of cash receipts related to distributions from partnership earnings in operating activities for the three months ended March 31, 2017. The Company reclassified $27 million for the three months ended March 31, 2016 from investing to operating activities in the Consolidated Statements of Cash Flows.
Distributions from partnership investments		$ 45
Accounting Standards Update 2016-15 [Member] | Restatement Adjustment [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Distributions from partnership investments			27
Net cash provided by (used in) investing activities			$ (27)
Accounting Standards Update 2017-07 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Requirements and effects of new guidance		Requires employers to separate the service cost component from the other components of net benefit cost. Under the new guidance, only service cost is eligible for capitalization (either deferred policy acquisition costs or capitalized software). The change in the capitalization rule is to be applied prospectively upon adoption. In addition, the income statement caption(s) where each component of net benefit cost is presented must be disclosed. Expected effects: the Company expects the effect of this new guidance to be immaterial to its results of operations.
Material effect on Company's financial statements		No
Accounting Standards Update 2016-01 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Requirements and effects of new guidance		Requires: • Entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method • Cumulative effect adjustment to the beginning balance of retained earnings at adoption Expected effects: • Certain limited partnership interests carried at cost of $240 million as of March 31, 2017 will be reported at fair value at adoption • An increase to retained earnings of approximately $50 million, after-tax, if implemented as of March 31, 2017. Actual cumulative effect adjustment will depend on investments held and market conditions at adoption.
Current carrying value of certain limited partnership interests to be reported at fair value upon adoption of ASU 2016-01		$ 240
Impact of new guidance on equity if adopted at reporting date		$ 50
Accounting Standards Update 2014-09 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Requirements and effects of new guidance		Requires: • Companies to estimate and allocate the expected customer contract revenues among distinct goods or services based on relative standalone selling prices • Revenues to be recognized as goods or services are delivered • Extensive new disclosures including the presentation of additional categories of revenues and information about related contract assets and liabilities • Adoption through retrospective restatement with or without using certain practical expedients or adoption with a cumulative effect adjustment Expected effects: • Applies to the Company’s non-insurance, administrative service contracts but does not apply to certain contracts within the scope of other GAAP, such as insurance contracts • The Company currently expects to adopt the new guidance as of January 1, 2018 through retrospective restatement • The Company does not currently expect the adoption of the new guidance to have a material impact to its pattern of revenue recognition or net income • The Company is continuing to evaluate the new requirements. Specifically, the Company is evaluating the combination of contract guidance for certain customers when the Company provides both insurance and non-insurance products, the deferral of revenue for services provided after the termination of certain administrative contracts and the Company’s status as principal or agent for certain performance obligations.
Material effect on Company's financial statements		No

[1] As required in adopting Accounting Standard Update ("ASU") 2016-15, the Company retrospectively reclassified $27 million of cash distributions from partnership earnings from investing to operating activities for the first quarter of 2016. The comparable amount reported in operating activities in 2017 was $45 million. See Note 2 for further discussion.

XML

Mergers and Acquistions (Details) $ / shares in Units, $ in Millions	3 Months Ended		20 Months Ended
	Mar. 31, 2017 USD ($) $ / shares	Mar. 31, 2016 USD ($)	Mar. 31, 2017 USD ($) $ / shares	May 04, 2017 $ / shares
Acquisitions and Dispositions [Abstract]
Cash consideration for each share of Company stock | $ / shares	$ 103.40		$ 103.40
Shares of acquirer common stock for each share of Company stock	0.5152		0.5152
Closing price of Anthem common stock | $ / shares				$ 179.89
Merger-related costs, before tax	$ 63	$ 40	$ 295
Merger-related costs, after-tax	49	$ 36
Merger agreement not consummated [Member]
Gain Contingencies [Line Items]
Tax benefit if merger is not consummated	$ 60		$ 60

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Shareholders' net income	$ 598	$ 519
Shares:
Weighted average	255,680,000	254,822,000
Common stock equivalents	4,094,000	4,625,000
Total shares	259,774,000	259,447,000
EPS, basic	$ 2.34	$ 2.04
EPS, effect of dilution	(0.04)	(0.04)
EPS, diluted	$ 2.30	$ 2.00
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common shares held in Treasury	39,928,289	39,638,264
Employee Stock Option [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive options	2,500,000	1,300,000

XML

Debt - Short-term and Long-term Debt (Details) - USD ($) $ in Millions		Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Total short-term debt		$ 142	$ 276
Long-term debt, carrying value		4,621	4,756
Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Current maturities of long-term debt		131	250
Other, including capital leases		11	26
Total short-term debt		142	276
Long-term debt, carrying value		4,621	4,756
$131 million, 6.35% Notes due 2018 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 131	$ 131
Long-term debt, stated interest rate		6.35%	6.35%
Long-term debt, carrying value		$ 0	$ 131
$250 million, 4.375% Notes due 2020 [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 250	$ 250
Long-term debt, stated interest rate		4.375%	4.375%
Long-term debt, carrying value	[1]	$ 252	$ 252
$300 million, 5.125% Notes due 2020 [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 300	$ 300
Long-term debt, stated interest rate		5.125%	5.125%
Long-term debt, carrying value	[1]	$ 301	$ 301
$78 million, 6.37% Notes due 2021 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 78	$ 78
Long-term debt, stated interest rate		6.37%	6.37%
Long-term debt, carrying value		$ 78	$ 78
$300 million, 4.5% Notes due 2021 [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 300	$ 300
Long-term debt, stated interest rate		4.50%	4.50%
Long-term debt, carrying value	[1]	$ 301	$ 302
$750 million, 4% Notes due 2022 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 750	$ 750
Long-term debt, stated interest rate		4.00%	4.00%
Long-term debt, carrying value		$ 744	$ 744
$100 million, 7.65% Notes due 2023 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 100	$ 100
Long-term debt, stated interest rate		7.65%	7.65%
Long-term debt, carrying value		$ 100	$ 100
$17 million, 8.3% Notes due 2023 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 17	$ 17
Long-term debt, stated interest rate		8.30%	8.30%
Long-term debt, carrying value		$ 17	$ 17
$900 million, 3.25% Notes Due 2025 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 900	$ 900
Long-term debt, stated interest rate		3.25%	3.25%
Long-term debt, carrying value		$ 893	$ 893
$300 million, 7.875% Debentures due 2027 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 300	$ 300
Long-term debt, stated interest rate		7.875%	7.875%
Long-term debt, carrying value		$ 299	$ 299
$83 million, 8.3% Step Down Notes due 2033 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 83	$ 83
Long-term debt, stated interest rate		8.30%	8.30%
Long-term debt, carrying value		$ 82	$ 82
$500 million, 6.15% Notes due 2036 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 500	$ 500
Long-term debt, stated interest rate		6.15%	6.15%
Long-term debt, carrying value		$ 498	$ 498
$300 million, 5.875% Notes due 2041 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 300	$ 300
Long-term debt, stated interest rate		5.875%	5.875%
Long-term debt, carrying value		$ 296	$ 296
$750 million, 5.375% Notes due 2042 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 750	$ 750
Long-term debt, stated interest rate		5.375%	5.375%
Long-term debt, carrying value		$ 743	$ 743
Other, including capital leases [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, carrying value		$ 17	$ 20

[1] The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 11 for further information about the Company’s interest rate risk management and these derivative instruments.

XML

Debt - Revolving Credit and Letter of Credit (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($) Banks
Line of Credit Facility [Line Items]
Covenant terms	The credit agreement includes options subject to consent by the administrative agent and the committing banks to increase the commitment amount to $2 billion and to extend the term past December 12, 2019. The credit agreement is available for general corporate purposes, including for the issuance of letters of credit. The credit agreement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – which is total consolidated debt to total consolidated capitalization (each as defined in the credit agreement) – to be greater than 0.50. The leverage ratio calculation excludes the following items that are included in accumulated other comprehensive loss on the Company’s consolidated balance sheets: net unrealized appreciation on fixed maturities and the portion of the post-retirement benefits liability adjustment attributable to pension.
Debt covenant compliance	The Company was in compliance with its debt covenants as of March 31, 2017.
Debt outstanding	$ 4,800
Revolving Credit And Letter Of Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit agreement term	5 years
Maximum borrowing capacity under credit facility	$ 1,500
Expiration date	Dec. 12, 2019
Number of participating banks | Banks	16
Maximum borrowing capacity under option to increase	$ 2,000
Leverage ratio covenant	50.00%
Borrowing capacity within maximum debt coverage covenant	$ 10,500
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility	500
Letters of credit outstanding	$ 13
Primary Commitment Holders [Member] | Revolving Credit And Letter Of Credit Facility [Member]
Line of Credit Facility [Line Items]
Number of participating banks | Banks	3
Percent of commitment held by each primary commitment holder	12.00%
Minor Commitment Holders [Member] | Revolving Credit And Letter Of Credit Facility [Member]
Line of Credit Facility [Line Items]
Number of participating banks | Banks	13
Collective percentage held by remaining commitment holders	64.00%

XML

Common and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Common: Par value $.25, 600,000,000 shares authorized
Treasury stock	39,928,289	39,638,264
Issued - December 31	296,000,000
Common Stock, par value and shares authorized
Common stock, par value per share	$ 0.25		$ 0.25
Common stock shares authorized	600,000,000		600,000,000
Payments For Repurchase Of Common Stock	$ 239	$ 139

XML

Global Health Care Medical Costs Payable (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Incurred but not reported	$ 2,088		$ 1,960
Reported claims in process	542		506
Phyician incentives and other medical care expense and services payable	140		180
Total liability for unpaid claims and claims expenses	$ 2,770	$ 2,532	$ 2,646	$ 2,355

XML

Global Health Care Medical Costs Payable - Activity (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Medical Claims Payable Activity [Abstract]
Beginning balance, unpaid claims, gross	$ 2,532	$ 2,355
Less: Reinsurance and other amounts recoverable	275	243
Beginning balance, unpaid claims, net	2,257	2,112
Incurred claims related to:
Current year	5,161	4,825
Prior years	(176)	(64)
Total incurred	4,985	4,761
Paid claims related to:
Current year	3,219	2,985
Prior years	1,509	1,449
Total paid	4,728	4,434
Ending balance, unpaid claims, net	2,514	2,439
Add: Reinsurance and other amounts recoverable	256	207
Ending balance, unpaid claims, gross	$ 2,770	$ 2,646

XML

Global Health Care Medical Costs Payable - Prior Year Development (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017		Mar. 31, 2016
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract]
Variance (unfavorable) in incurred costs related to prior years' claims payable		$ 176		$ 64
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage		0.90%	[1]	0.30%	[2]
Net impact (unfavorable) of prior development on shareholders' net income		$ 61		$ 14
Completion Factors [Member]
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract]
Variance (unfavorable) in incurred costs related to prior years' claims payable		$ 78		$ 51
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage		0.40%	[1]	0.30%	[2]
Medical Cost Trend [Member]
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract]
Variance (unfavorable) in incurred costs related to prior years' claims payable		$ 98		$ 28
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage		0.50%	[1]	0.10%	[2]
Other [Member]
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract]
Variance (unfavorable) in incurred costs related to prior years' claims payable		$ 0		$ (15)
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage	[3]	0.00%	[1]	(0.10%)	[2]

[1] Percentage of current year incurred costs as reported for the year ended December 31, 2016.

[2] Percentage of current year incurred costs as reported for the year ended December 31, 2015.

[3] Other amounts in 2016 related to increased medical costs in the Government segment resulting from additional provider risk sharing.

XML

Global Health Care Medical Costs Payable - Unpaid Claims Development (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Claims Development [Line Items]
Liability for unpaid claims and claims expenses, net of reinsurance	$ 2,514	$ 2,257	$ 2,439	$ 2,112
Reinsurance recoverable on unpaid claims	256	275	207	243
Total liability for unpaid claims and claims expenses	$ 2,770	$ 2,532	$ 2,646	$ 2,355

XML

Liabilities for Unpaid Claims and Claims Expenses - Liability Balance Details (Details) - USD ($) $ in Millions	Mar. 31, 2017	Mar. 31, 2016
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member]
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Total liability for unpaid claims and claims expenses	$ 5,006	$ 4,724
Group Disability And Life Segment [Member]
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Total liability for unpaid claims and claims expenses	4,384	4,146
Global Supplemental Benefits Segment [Member]
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Total liability for unpaid claims and claims expenses	425	367
Other Operations Segment [Member]
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Total liability for unpaid claims and claims expenses	$ 197	$ 211

XML

Liabilities for Unpaid Claims and Claims Expenses - Activity in Liabilities for Unpaid Claims and Claims Expenses (Details) - Group Disability and Life and Global Supplemental Benefits [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items]
Beginning balance, unpaid claims, gross	$ 4,726	$ 4,359
Less: Reinsurance and other amounts recoverable	121	115
Beginning balance, unpaid claims, net	4,605	4,244
Incurred claims related to:
Current year	1,148	988
Interest accretion	43	43
All other prior years	(64)	105
Total incurred	1,127	1,136
Paid claims related to:
Current year	371	327
Prior years	691	660
Total paid	1,062	987
Foreign currency	16	5
Ending balance, unpaid claims, net	4,686	4,398
Add: Reinsurance and other amounts recoverable	123	115
Ending balance, unpaid claims, gross	$ 4,809	$ 4,513

XML

Liabilities for Unpaid Claims and Claims Expenses - Reconciliation to the Liability for Unpaid Claims and Claims Expense (Details) - USD ($) $ in Millions	Mar. 31, 2017	Mar. 31, 2016
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member]
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Total liability for unpaid claims and claims expenses	$ 5,006	$ 4,724
Group Disability And Life Segment [Member]
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Total liability for unpaid claims and claims expenses	4,384	4,146
Global Supplemental Benefits Segment [Member]
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Total liability for unpaid claims and claims expenses	425	367
Other Operations Segment [Member]
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Total liability for unpaid claims and claims expenses	$ 197	$ 211

XML

Reinsurance - Reinsurance Recoverables (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 6,386	$ 6,478
Reserve netted against reinsurance recoverables	3
Acquisition, dispositionor runoff activities [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	5,908	6,000
Berkshire [Member] | Guaranteed Minimum Death Benefits [Member] | Guaranteed Minimum Death Benefit [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 1,052	1,085
Berkshire [Member] | Guaranteed Minimum Death Benefits [Member] | Guaranteed Minimum Death Benefit [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member]
Ceded Credit Risk [Line Items]
Concentration Risk, Percentage	100.00%
The Lincoln National Life Insurance Company And Lincoln Life And Annuity Of New York [Member] | Individual Life Insurance And Annuity (sold in 1998) [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 3,551	3,586
Prudential Retirement Insurance And Annuity Company [Member] | Retirement Benefits Business (sold in 2004) [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 904	921
Prudential Retirement Insurance And Annuity Company [Member] | Retirement Benefits Business (sold in 2004) [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member]
Ceded Credit Risk [Line Items]
Concentration Risk, Percentage	100.00%
Great American Life Insurance Company [Member] | Supplemental Benefits Business (2012 acquistion) [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 293	297
Great American Life Insurance Company [Member] | Supplemental Benefits Business (2012 acquistion) [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member]
Ceded Credit Risk [Line Items]
Concentration Risk, Percentage	100.00%
Other retrocessionaires, including U.S. Government [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 478	478
Number of external reinsurers	80
U.S. Government [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 39
Other Retrocessionaires [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member]
Ceded Credit Risk [Line Items]
Minimum reinsurance recoverable from a single reinsurer	1
Maximum reinsurance recoverable from a single reinsurer	$ 93
Other Retrocessionaires [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | Minimum [Member] | Standard & Poor's Investment Grade [Member] | Reinsurance Recoverable [Member]
Ceded Credit Risk [Line Items]
Concentration Risk, Percentage	60.00%
Other Retrocessionaires [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member]
Ceded Credit Risk [Line Items]
Concentration Risk, Percentage	13.00%
Other Retrocessionaires [Member] | Guaranteed Minimum Death Benefits [Member] | Guaranteed Minimum Death Benefit [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 42	44
Other Retrocessionaires [Member] | Guaranteed Minimum Death Benefits [Member] | Guaranteed Minimum Death Benefit [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member]
Ceded Credit Risk [Line Items]
Concentration Risk, Percentage	100.00%
Other Retrocessionaires [Member] | Other run-off reinsurance [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 66	$ 67
Other Retrocessionaires [Member] | Other run-off reinsurance [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member]
Ceded Credit Risk [Line Items]
Concentration Risk, Percentage	100.00%

XML

Reinsurance - Effects of Reinsurance (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Premiums Earned, Net [Abstract]
Ceded	$ 120	$ 136
Premiums Earned Net	8,103	7,746
Reinsurance Recoveries [Abstract]
Reinsurance recoveries	99	164
Individual Life Insurance And Annuity Business Sold [Member]
Premiums Earned, Net [Abstract]
Ceded	39	41
Reinsurance Recoveries [Abstract]
Reinsurance recoveries	70	68
Other Subsegments [Member]
Premiums Earned, Net [Abstract]
Ceded	81	95
Reinsurance Recoveries [Abstract]
Reinsurance recoveries	$ 29	$ 96

XML

Reinsurance - Effective Exit of GMDB and GMIB Business (Details) - Berkshire Hathway Life Insurance Company Of Nebraska [Member] - Variable Annuity [Member] - USD ($) $ in Billions	Mar. 31, 2017	Dec. 31, 2013
Ceded Credit Risk [Line Items]
Percent of future claim payments reinsured		100.00%
Maximum [Member] | Guaranteed Minimum Death Benefit [Member]
Ceded Credit Risk [Line Items]
Ceded Reinsurance Agreement, Coverage Limit, Amount Remaining	$ 3.5

XML

Reinsurance - Future Policy Benefits for GMDB Business (Details) - Variable Annuity [Member] - Guaranteed Minimum Death Benefit [Member] - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Activity in future policy benefits reserves for GMDB business [Line Items]
Future Policy Benefit Reserve, beginning balance, gross	$ 1,224	$ 1,252
Beginning balance, unpaid claims, gross	16	18
Less: Reinsurance and other amounts recoverable	1,129	1,164
Future Policy Benefit Reserve, beginning balance, net	111	106
Add: Incurred benefits	0	4
Less: Paid benefits / (recoveries)	(1)	(1)
Future Policy Benefit Reserve, ending balance, net	112	111
Ending balance, unpaid claims, gross	18	16
Add: Reinsurance and other amounts recoverable	1,094	1,129
Future Policy Benefit Reserve, ending balance, gross	$ 1,188	$ 1,224

XML

Reinsurance - Account Value, Net Amount at Risk and Contractholders for GMDB Business (Details) - Variable Annuity [Member] - Guaranteed Minimum Death Benefit [Member] Contractholders in Millions, $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($) Contractholders	Dec. 31, 2016 USD ($) Contractholders
Guaranteed Minimum Death Benefits Account Value, Net Amount at Risk And Average Age Table [Line Items]
Account value	$ 10,755	$ 10,650
Net amount at risk	$ 2,335	$ 2,458
Number of contractholders | Contractholders	280,000	285,000

XML

Reinsurance - GMIB Reinsurers (Details) - Guaranteed Minimum Income Benefit [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Ceded Credit Risk [Line Items]
Annuitization election period	30 days
GMIB Assets	$ 777	$ 799
Berkshire [Member]
Ceded Credit Risk [Line Items]
GMIB Assets	$ 360	370
Berkshire [Member] | Ceded Credit Risk Secured [Member] | GMIB Assets [Member]
Ceded Credit Risk [Line Items]
Concentration percentage	100.00%
Sun Life Assurance Company Of Canada [Member]
Ceded Credit Risk [Line Items]
GMIB Assets	$ 220	227
Liberty Re (Bermuda) Ltd. [Member]
Ceded Credit Risk [Line Items]
GMIB Assets	$ 197	$ 202
Liberty Re (Bermuda) Ltd. [Member] | Ceded Credit Risk Secured [Member] | GMIB Assets [Member]
Ceded Credit Risk [Line Items]
Concentration percentage	100.00%

XML

Reinsurance - GMIB Guarantees (Details) - Guarantee Type, Other [Member] - Guaranteed Minimum Income Benefit [Member] - Variable Annuity [Member] $ in Millions	Mar. 31, 2017 USD ($)
Guarantee Obligations [Line Items]
Underlying mutual fund investment values	$ 818
Maximum Exposure, Undiscounted	$ 665

XML

Fair Value Measurements - Financial Assets and Financial Liabilities Carried at Fair Value (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2017		Dec. 31, 2016
Financial assets at fair value:
Fixed maturities	$ 21,734		$ 20,961
Equity securities	574		583
Short-term investments	303		691
Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	21,734	[1]	20,961	[2]
Equity securities	574		583
Subtotal	22,308		21,544
Short-term investments	303		691
Total financial assets at fair value, excluding separate accounts	23,392		23,044
Financial liabilities at fair value:
Total financial liabilities at fair value	763		785
Run-off Settlement Annuity Business [Member] | Fair Value, Measurements, Recurring [Member]
Financial liabilities at fair value:
Net appreciation required to adjust future policy benefits for run-off settlement annuity business included in fixed maturities	543		524
Other derivatives [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	4		10
Financial liabilities at fair value:
Derivative liabilities	2		5
Guaranteed Minimum Income Benefit [Member]
Financial assets at fair value:
Derivative assets	777		799
Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	777		799
Financial liabilities at fair value:
Derivative liabilities	761		780
Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	897		877
State and local government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	1,419		1,435
Foreign government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	2,312		2,113
Corporate [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	16,627		16,050
Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	479		486
Fair Value Inputs Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	372	[1]	374	[2]
Equity securities	402		396
Subtotal	774		770
Short-term investments	0		0
Total financial assets at fair value, excluding separate accounts	774		770
Financial liabilities at fair value:
Total financial liabilities at fair value	0		0
Fair Value Inputs Level 1 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	0		0
Financial liabilities at fair value:
Derivative liabilities	0		0
Fair Value Inputs Level 1 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	0		0
Financial liabilities at fair value:
Derivative liabilities	0		0
Fair Value Inputs Level 1 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	372		374
Fair Value Inputs Level 1 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	0		0
Fair Value Inputs Level 1 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	0		0
Fair Value Inputs Level 1 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	0		0
Fair Value Inputs Level 1 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	0		0
Fair Value Inputs Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	20,685	[1]	19,885	[2]
Equity securities	122		113
Subtotal	20,807		19,998
Short-term investments	303		691
Total financial assets at fair value, excluding separate accounts	21,114		20,699
Financial liabilities at fair value:
Total financial liabilities at fair value	2		5
Fair Value Inputs Level 2 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	4		10
Financial liabilities at fair value:
Derivative liabilities	2		5
Fair Value Inputs Level 2 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	0		0
Financial liabilities at fair value:
Derivative liabilities	0		0
Fair Value Inputs Level 2 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	525		503
Fair Value Inputs Level 2 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	1,419		1,435
Fair Value Inputs Level 2 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	2,273		2,066
Fair Value Inputs Level 2 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	16,144		15,552
Fair Value Inputs Level 2 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	324		329
Fair Value Inputs Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	677	[1]	702	[2]
Equity securities	50		74
Subtotal	727		776
Short-term investments	0		0
Total financial assets at fair value, excluding separate accounts	1,504		1,575
Financial liabilities at fair value:
Total financial liabilities at fair value	761		780
Fair Value Inputs Level 3 [Member] | Run-off Settlement Annuity Business [Member] | Fair Value, Measurements, Recurring [Member]
Financial liabilities at fair value:
Net appreciation required to adjust future policy benefits for run-off settlement annuity business included in fixed maturities	14		14
Fair Value Inputs Level 3 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	0		0
Financial liabilities at fair value:
Derivative liabilities	0		0
Fair Value Inputs Level 3 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Derivative assets	777		799
Financial liabilities at fair value:
Derivative liabilities	761		780
Fair Value Inputs Level 3 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	0		0
Fair Value Inputs Level 3 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	0		0
Fair Value Inputs Level 3 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	39		47
Fair Value Inputs Level 3 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	483		498
Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member]
Financial assets at fair value:
Fixed maturities	$ 155		$ 157

[1] Fixed maturities includes $543 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $14 million of appreciation for securities classified in Level 3. See Note 10 for additional information.

[2] Fixed maturities includes $524 million of net appreciation required to adjust future policy benefits for run-off settlement annuity business including $14 million of appreciation for securities classified in Level 3.

XML

Fair Value Measurements - Level 2 Financial Assets and Financial Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Percentage of investments in fixed maturities and equity securities classified as Level 2	93.00%
Maximum percentage of investments classified in Level 2 representing foreign bonds priced using unadjusted broker quotes	1.00%
Other derivatives [Member]
Derivative [Line Items]
Adjustment for credit risk on derivatives assets	$ 0	$ 0
Adjustment for credit risk on derivatives liabilities	0	0
Other derivatives [Member] | Fair Value Inputs Level 2 [Member]
Derivative [Line Items]
Adjustment for credit risk on derivatives assets	0	0
Adjustment for credit risk on derivatives liabilities	$ 0	$ 0

XML

Fair Value Measurements - Level 3 Financial Assets and Liabilities (Details) $ in Millions		3 Months Ended	12 Months Ended
		Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Fair Value Disclosures [Abstract]
Percentage of investments in fixed maturities and equity securities classified in Level 3		3.00%
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Fixed Maturities And Equity Securities		$ 22,308	$ 21,544
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Fixed Maturities And Equity Securities		727	776
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Fixed Maturities And Equity Securities		703	721
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Securities not priced by the Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Fixed Maturities And Equity Securities	[1]	24	55
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Equity securities [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Fixed Maturities And Equity Securities		$ 50	$ 74
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Equity securities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) used to value equity securities.		12.0	11.6
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Equity securities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) used to value equity securities.		5.0	4.2
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Equity securities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) used to value equity securities.		8.3	8.5
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Fixed Maturities And Equity Securities		$ 653	$ 647
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Fixed Maturities And Equity Securities		$ 498	$ 490
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Liquidity adjustment to discount rates used to value fixed maturities and equity securities		25.50%	13.00%
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Liquidity adjustment to discount rates used to value fixed maturities and equity securities		0.70%	0.80%
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Liquidity adjustment to discount rates used to value fixed maturities and equity securities		3.40%	3.40%
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed securities [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Fixed Maturities And Equity Securities		$ 155	$ 157
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed securities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Liquidity adjustment to discount rates used to value fixed maturities and equity securities		3.40%	3.30%
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads		4.50%	4.70%
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed securities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Liquidity adjustment to discount rates used to value fixed maturities and equity securities		0.60%	0.60%
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads		1.70%	1.60%
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed securities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Liquidity adjustment to discount rates used to value fixed maturities and equity securities		0.90%	0.90%
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads		2.30%	2.30%

[1] The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.

XML

Fair Value Measurements - Changes in Level 3 Financial Assets (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Fixed Maturities And Equity Securities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Beginning Balance		$ 776	$ 726
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		0	0
Other		23	(25)
Total gains (losses) included in shareholders' net income		23	(25)
Gains (losses) included in other comprehensive income		(8)	0
Gains (losses) required to adjust future policy benefits for settlement annuities	[1]	0	11
Purchases, sales, and settlements:
Purchases		25	24
Sales		(47)	0
Settlements		(27)	(11)
Total purchases, sales, settlements		(49)	13
Transfers into/(out of) Level 3:
Transfers into Level 3		40	128
Transfers out of Level 3		(55)	(61)
Total transfers into/(out of) Level 3		(15)	67
Ending Balance		727	792
Total gains (losses) included in income attributable to instruments held at the reporting date		(6)	(25)
Derivative Financial Instruments, Assets [Member] | Guaranteed Minimum Income Benefit [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Beginning Balance		799	907
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		(11)	61
Other		1	(1)
Total gains (losses) included in shareholders' net income		(10)	60
Gains (losses) included in other comprehensive income		0	0
Gains (losses) required to adjust future policy benefits for settlement annuities	[1]	0	0
Purchases, sales, and settlements:
Purchases		0	0
Sales		0	0
Settlements		(12)	(10)
Total purchases, sales, settlements		(12)	(10)
Transfers into/(out of) Level 3:
Transfers into Level 3		0	0
Transfers out of Level 3		0	0
Total transfers into/(out of) Level 3		0	0
Ending Balance		777	957
Total gains (losses) included in income attributable to instruments held at the reporting date		$ (10)	$ 60

[1] Amounts do not accrue to shareholders.

XML

Fair Value Measurements - Changes in Level 3 Financial Liabilities (Details) - Derivative Financial Instruments, Liabilities [Member] - Guaranteed Minimum Income Benefit [Member] - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance		$ (780)	$ (885)
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		11	(61)
Other		(4)	(5)
Total gains (losses) included in shareholders' net income		7	(66)
Gains (losses) included in other comprehensive income		0	0
Gains (losses) required to adjust future policy benefits for settlement annuities	[1]	0	0
Purchases, sales, settlements:
Purchases		0	0
Sales		0	0
Settlements		12	10
Total purchases, sales, and settlements		12	10
Transfers into/(out of) Level 3:
Transfers into Level 3		0	0
Transfers out of Level 3		0	0
Transfers into/(out of) Level 3		0	0
Ending balance		(761)	(941)
Total gains (losses) included in income attributable to instruments held at the reporting date		$ 7	$ (66)

[1] Amounts do not accrue to shareholders.

XML

Fair Value Measurements - Changes in Level 3 Net Derivative Assets (Liabilities) (Details) - Guaranteed Minimum Income Benefit [Member] - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Fair Value, Net Derivative Asset (Liability), Measured On Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning balance		$ 19	$ 22
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		0	0
Other		(3)	(6)
Total gains (losses) included in shareholders' net income		(3)	(6)
Gains (losses) included in other comprehensive income		0	0
Gains (losses) required to adjust future policy benefits for settlement annuities	[1]	0	0
Purchases, sales, settlements:
Purchases		0	0
Sales		0	0
Settlements		0	0
Total purchases, sales, settlements		0	0
Transfers into/(out of) Level 3:
Transfers into Level 3		0	0
Transfers out of Level 3		0	0
Transfers into/out of Level 3		0	0
Ending balance		16	16
Total gains (losses) included in income attributable to instruments held at the reporting date		$ (3)	$ (6)

[1] Amounts do not accrue to shareholders.

XML

Fair Value Measurements - Separate Account Assets (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Financial assets and financial liabilities carried at fair value [Line Items]
Guaranteed separate accounts		$ 508		$ 500
Non-guaranteed separate accounts	[1]	6,841		6,584
Subtotal		7,349		7,084
Non-guaranteed separate accounts priced at NAV as a practical expedient	[1]	848		856
Total separate account assets		8,197		7,940
Pension Benefits [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Non-guaranteed separate accounts priced at NAV as a practical expedient		800		900
Non-guaranteed separate accounts		3,800		3,700
Fair Value Inputs Level 1 [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Guaranteed separate accounts		245		238
Non-guaranteed separate accounts		1,435		1,368
Subtotal		1,680		1,606
Fair Value Inputs Level 2 [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Guaranteed separate accounts		263		262
Non-guaranteed separate accounts		5,076		4,885
Subtotal		5,339		5,147
Fair Value Inputs Level 3 [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Guaranteed separate accounts		0		0
Non-guaranteed separate accounts		330		331
Subtotal		330		331
Fair Value Inputs Level 3 [Member] | Pension Benefits [Member]
Financial assets and financial liabilities carried at fair value [Line Items]
Non-guaranteed separate accounts		300		$ 300
Separate Account Assets [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Beginning Balance		331	$ 297
Policyholder gains (losses)		27	(1)
Purchases, sales, and settlements:
Purchases		10	4
Sales		(35)	(1)
Settlements		(1)	(2)
Total purchases, sales, and settlements		(26)	1
Transfers into/(out of) Level 3:
Transfers into Level 3		0	23
Transfers out of Level 3		(2)	(3)
Total transfers into/(out of) Level 3		(2)	20
Ending Balance		$ 330	$ 317

[1] Non-guaranteed separate accounts included $3.8 billion as of March 31, 2017 and $3.7 billion as of December 31, 2016 in assets supporting the Company's pension plans, including $0.3 billion classified in Level 3 for both periods and $0.8 billion as of March 31, 2017 and $0.9 billion as of December 31, 2016 priced at net asset value ("NAV") as a practical expedient.

XML

Fair Value Measurements - Separate Account Assets Priced at NAV (Details) - Separate Account Assets [Member] - USD ($) $ in Millions		3 Months Ended	12 Months Ended
		Mar. 31, 2017	Dec. 31, 2016
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Unfunded Commitments		$ 340
Fair Value, Measurements, Recurring [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value		848	$ 856
Security Partnerships [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Unfunded Commitments		$ 340
Redemption Frequency	[1]	Not applicable
Security Partnerships [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value		$ 409	$ 424
Real Estate Funds [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Unfunded Commitments		$ 0
Redemption Frequency	[1]	Quarterly
Real Estate Funds [Member] | Minimum [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Redemption Notice Period		45 days	45 days
Real Estate Funds [Member] | Maximum [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Redemption Notice Period		90 days	90 days
Real Estate Funds [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value		$ 234	$ 231
Hedge Funds [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Unfunded Commitments		$ 0
Redemption Frequency	[1]	Up to Annually, varying by fund
Hedge Funds [Member] | Minimum [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Redemption Notice Period		30 days	30 days
Hedge Funds [Member] | Maximum [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Redemption Notice Period		90 days	90 days
Hedge Funds [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items]
Fair Value		$ 205	$ 201

[1] The attributes noted are effective as of March 31, 2017 and December 31, 2016.

XML

Fair Value Measurements - Measured Under Certain Conditions (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Financing Receivable, Impaired [Line Items]
Impaired real estate, partnership entities, and commercial mortgage loans as a percent of total investments		0.00%
Realized investment losses on impaired real estate, partnership entities, and commercial mortgage loans	$ 1	$ 0
Maximum [Member]
Financing Receivable, Impaired [Line Items]
Impaired real estate, partnership entities, and commercial mortgage loans as a percent of total investments	1.00%

XML

Fair Value Measurements - Not Carried at Fair Value (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Commercial Mortgage Loans	$ 1,752	$ 1,666
Percentage of contractholder deposit funds that can be withdrawn at any time	70.00%
Estimate Of Fair Value Fair Value Disclosure [Member] | Fair Value Inputs Level 2 [Member]
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long-term debt, including current maturities, excluding capital leases	$ 5,331	5,460
Estimate Of Fair Value Fair Value Disclosure [Member] | Fair Value Inputs Level 3 [Member]
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Commercial Mortgage Loans	1,776	1,682
Contractholder deposit funds, excluding universal life products	1,206	1,215
Carrying Reported Amount Fair Value Disclosure [Member]
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Commercial Mortgage Loans	1,752	1,666
Contractholder deposit funds, excluding universal life products	1,203	1,212
Long-term debt, including current maturities, excluding capital leases	$ 4,735	$ 4,991

XML

Fair Value Measurements - Off-Balance Sheet Financial Instruments (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Fair value of off-balance-sheet financial assets
Fair value of off-balance-sheet financial liabilities

XML

Investments - Fixed Maturities by Contractual Maturity Periods (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Amortized Cost:
Due in one year or less	$ 1,405
Due after one year through five years	6,717
Due after five years through ten years	8,481
Due after ten years	3,586
Mortgage and other asset-backed securities	450
Amortized Cost	20,639	$ 19,942
Fair Value:
Due in one year or less	1,416
Due after one year through five years	6,976
Due after five years through ten years	8,667
Due after ten years	4,196
Mortgage and other asset-backed securities	479
Total fair value	$ 21,734

XML

Investments - Gross Unrealized Appreciation (Depreciation) on Fixed Maturities (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 20,639	$ 19,942
Unrealized Appreciation	1,231	1,196
Unrealized (Depreciation)	(136)	(177)
Total Fair Value	21,734	20,961
Run-off Settlement Annuity Business [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Appreciation	555	539
Unrealized (Depreciation)	(12)	(15)
Total Fair Value	2,700	2,700
Federal government and agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	667	658
Unrealized Appreciation	233	223
Unrealized (Depreciation)	(3)	(4)
Total Fair Value	897	877
State and local government [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,324	1,342
Unrealized Appreciation	100	99
Unrealized (Depreciation)	(5)	(6)
Total Fair Value	1,419	1,435
Foreign government [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,206	1,998
Unrealized Appreciation	122	129
Unrealized (Depreciation)	(16)	(14)
Total Fair Value	2,312	2,113
Corporate [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	15,992	15,483
Unrealized Appreciation	744	716
Unrealized (Depreciation)	(109)	(149)
Total Fair Value	16,627	16,050
Mortgage and other asset-backed [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	450	461
Unrealized Appreciation	32	29
Unrealized (Depreciation)	(3)	(4)
Total Fair Value	$ 479	$ 486

XML

Investments - Securities with a Decline in Fair Value (Details) $ in Millions	Mar. 31, 2017 USD ($)
Fixed Maturities [Member] | Investment Grade [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, One Year or Less, Fair Value	$ 3,960
Available For Sale Securities, Continuous Unrealized Loss Position, Twelve Months Or Longer, Fair Value	265
Available For Sale Securities, Continuous Unrealized Loss Position, One Year or Less, Amortized Cost	4,067
Available-for-sale Securities, Continuous Unrealized Loss Position, More Than One Year, Amortized Cost	276
Available-for-sale Securities, Continuous Unrealized Loss Position, One Year or Less, Accumulated Losses	(107)
Available-for-sale Securities, Continuous Unrealized Loss Position, More Than One Year, Accumulated Losses	$ (11)
Fixed Maturities [Member] | Investment Grade [Member] | One Year Or Less [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	870
Fixed Maturities [Member] | Investment Grade [Member] | More Than One Year [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	47
Fixed Maturities [Member] | Below Investment Grade [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, One Year or Less, Fair Value	$ 619
Available For Sale Securities, Continuous Unrealized Loss Position, Twelve Months Or Longer, Fair Value	116
Available For Sale Securities, Continuous Unrealized Loss Position, One Year or Less, Amortized Cost	630
Available-for-sale Securities, Continuous Unrealized Loss Position, More Than One Year, Amortized Cost	123
Available-for-sale Securities, Continuous Unrealized Loss Position, One Year or Less, Accumulated Losses	(11)
Available-for-sale Securities, Continuous Unrealized Loss Position, More Than One Year, Accumulated Losses	$ (7)
Fixed Maturities [Member] | Below Investment Grade [Member] | One Year Or Less [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	532
Fixed Maturities [Member] | Below Investment Grade [Member] | More Than One Year [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	21
Exchange Traded Funds [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Losses	$ (4)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	400
Other Equities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Securities with a significant unrealized loss reflected in accumulated other comprehensive income	$ 0

XML

Investments - Hybrid Securities (Details) - Equity securities [Member] - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Investment [Line Items]
Hybrid securities	$ 36	$ 36
Hybrid instruments, cost	$ 49	$ 49

XML

Investments - Commerical Mortgage Loans by Property Type and Geographic Region (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Mortgage Loans on Real Estate [Line Items]
Commercial Mortgage Loans	$ 1,752	$ 1,666

XML

Investments - Commercial Mortgage Loan Maturities (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Investments:
Commercial Mortgage Loans	$ 1,752	$ 1,666

XML

Investments - Credit Risk Profile, Commercial Mortgage Loans (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	$ 1,752	$ 1,666
Weighted Average [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Debt service coverage ratio, commercial mortgage loans	1.95	1.95
Loan-to-value ratio, commercial mortgage loans	57.00%	57.00%
Loan To Value Ratio Below 50 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	$ 346	$ 350
Loan To Value Ratio 50 Percent To 59 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	634	593
Loan To Value Ratio 60 Percent To 69 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	701	638
Loan To Value Ratio 70 Percent To 79 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	65	64
Loan To Value Ratio 80 Percent To 89 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Loan To Value Ratio 90 Percent To 100 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	6	21
Debt Service Coverage Ratio 1.30x Or Greater [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	1,534	1,476
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio Below 50 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	331	335
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	516	517
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	687	624
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.20x To 1.29x [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	75	75
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio Below 50 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	15	15
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	46	46
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	14	14
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.10x To 1.19x [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	72	29
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio Below 50 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	42	0
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	30	29
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.00x To 1.09x [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	30	30
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio Below 50 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	30	30
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio Less Than 1.00x [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	41	56
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio Below 50 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	35	35
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	0	0
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member]
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items]
Commercial mortgage loan	$ 6	$ 21

XML

Investments - Problem and Potential Problem Commercial Mortgage Loans (Details) - Mortgage Loans on Real Estate [Member] $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Financing Receivable, Modifications [Line Items]
Maximum past due days that the mortgage loans are considered current	59 days
Debt service coverage ratio threshold, below which mortgage loans are considered potential problems	1.0
Loan-to-value ratio threshold, above which mortgage loans are considered potential problems	100.00%
Minimum past due days that mortgage loans are considered potential problems	30 days
Maximum past due days that mortgage loans are considered potential problems	60 days
Problem and potential problem mortgage loans	$ 6	$ 21

XML

Investments - Impaired Commercial Mortgage Loans (Details) - Mortgage Loans on Real Estate [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Financing Receivable, Impaired [Line Items]
Impaired commercial mortgage loans with related allowance, gross	$ 9		$ 26
Impaired commercial mortgage loans with no related allowance, gross	0		0
Impaired commercial mortgage loans, gross	9		26
Impaired commercial mortgage loans, reserves	(3)		(5)
Impaired commercial mortgage loans with related allowance, net	6		21
Impaired commercial mortgage loans, net	6		$ 21
Average recorded investment in impaired mortgage loans	$ 18	$ 112

XML

Investments - Valuation Reserves for Commercial Mortgage Loans (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Mortgage Loans on Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Allowance For Credit Losses, Period Increase (Decrease)

XML

Investments - Real Estate and Other Long-Term Investments (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Other Long Term Investments [Line Items]
Other long-term investments	$ 1,465	$ 1,462

XML

Investments - Short-Term Investments and Cash Equivalents (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Corporate Securities [Member]
Short Term Investments And Cash Equivalents [Line Items]
Short-term investments and cash equivalents	$ 2,400	$ 2,200
Federal goverment securities
Short Term Investments And Cash Equivalents [Line Items]
Short-term investments and cash equivalents	597	378
Money Market Funds [Member]
Short Term Investments And Cash Equivalents [Line Items]
Short-term investments and cash equivalents	$ 17	$ 11

XML

Investments - Net Investment Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Schedule Of Investment Income Reported Amounts By Category [Line Items]
Net investment income	$ 303	$ 272

XML

Investments - Realized Investment Gains and Losses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Realized Gains (Losses) on Investments [Line Items]
Realized investment gains (losses) before income taxes	$ 46	$ (32)
Less income taxes (benefits)	15	(11)
Net realized investment gains (losses)	31	(21)
Fixed Maturities [Member]
Realized Gains (Losses) on Investments [Line Items]
Realized investment gains (losses) before income taxes	2	(18)
Equity securities [Member]
Realized Gains (Losses) on Investments [Line Items]
Realized investment gains (losses) before income taxes	33	(10)
Other Investments Including Derivatives [Member]
Realized Gains (Losses) on Investments [Line Items]
Realized investment gains (losses) before income taxes	$ 11	$ (4)

XML

Investments - Write Downs and Sales (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Realized Gains (Losses) on Investments [Line Items]
Total		$ (10)	$ (36)
Sales Information For Available For Sale Fixed Maturities Equity Securities [Abstract]
Proceeds from sales		414	361
Gross gains on sales		47	12
Gross losses on sales		2	5
Fixed Maturities [Member]
Realized Gains (Losses) on Investments [Line Items]
Credit-related		(5)	(18)
Non-credit related	[1]	(2)	(9)
Total		(7)	(27)
Other [Member]
Realized Gains (Losses) on Investments [Line Items]
Total	[2]	$ (3)	$ (9)

[1] These write-downs pertain to other-than-temporary declines in fair values due to increases in market yields (widening of credit spreads) for certain below investment grade fixed maturities with an increased probability of sales activity prior to recovery of their amortized cost basis.

[2] Other asset write-downs include other-than-temporary declines in fair values of equity securities and asset write-downs related to real estate investments.

XML

Derivative Financial Instruments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Derivative [Line Items]
Fair Value
Gain (Loss) Recognized in Other Comprehensive Income
Gains (losses) reclassified from other comprehensive income into income
Amounts excluded from assessment of hedge effectiveness
Gains (losses) recognized due to hedge ineffectiveness
Cash on deposit representing upfront margin required by clearinghouse	13
Net liability position of derivatives that contain certain credit risk-related contingent features
Gain (Loss) Recognized in Income Statement
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Foreign Currency Swaps [Member]
Derivative [Line Items]
Notional Amount	$ 31		55
Maximum term length, foreign currency derivatives	4 years
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member]
Derivative [Line Items]
Notional Amount	$ 750		750
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member]
Derivative [Line Items]
Notional Amount	$ 87		78
Maximum term length, foreign currency derivatives	9 years
Non designated [Member] | Forward Contracts [Member]
Derivative [Line Items]
Notional Amount	$ 150		$ 149
Maximum term length, foreign currency derivatives	3 months

XML

Variable Interest Entities (Details) $ in Billions	3 Months Ended
	Mar. 31, 2017 USD ($) LimitedPartnerships
Variable Interest Entity [Line Items]
Methodology for determining whether the Company is primary beneficiary	When the Company becomes involved with a variable interest entity, as well as when there is a change in the Company’s involvement with an entity, the Company evaluates the following to determine if it is the primary beneficiary and must consolidate the entity: the structure and purpose of the entity; the risks and rewards created by and shared through the entity; and the Company’s ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers.
Security And Real Estate Limited Partnerships [Member]
Variable Interest Entity [Line Items]
Maximum exposure to loss related to arrangements with variable interest entity	$ 2.2
Number of limited partnerships defined as variable interest entities | LimitedPartnerships	100
Commitments to contribute additional cash, amount	$ 1.1
Security And Real Estate Limited Partnerships [Member] | Maximum [Member]
Variable Interest Entity [Line Items]
Non-controlling interest percentage	10.00%
Security And Real Estate Limited Partnerships [Member] | Other Long Term Investments [Member]
Variable Interest Entity [Line Items]
Carrying amount of assets	$ 1.1
Investment Entities [Member]
Variable Interest Entity [Line Items]
Maximum exposure to loss related to arrangements with variable interest entity	$ 0.5
Non-controlling interest percentage
Real Estate Joint Ventures [Member]
Variable Interest Entity [Line Items]
Maximum exposure to loss related to arrangements with variable interest entity	$ 0.2
Carrying amount of assets	0.2
Independent Physician Associations [Member]
Variable Interest Entity [Line Items]
Maximum exposure to loss related to arrangements with variable interest entity

XML

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), beginning	$ (1,382)
Shareholders' other comprehensive income (loss), net of tax	130	$ 262
Accumulated other comprehensive income (loss), ending	(1,252)
Realized investment (gains) losses	(46)	32
Other operating expenses	2,530	2,321
Net unrealized appreciation on securities [ Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), before tax, beginning	542	612
Other comprehensive income (loss) before reclassifications, pre-tax	53	227
Reclassification adjustment, pre-tax	(35)	28
Other comprehensive income (loss), pre-tax	18	255
Accumulated other comprehensive income (loss), before tax, ending	560	867
Accumulated other comprehensive income/loss tax (expense) benefit, beginning	(180)	(194)
Other comprehensive income (loss), securities, before reclassifications, tax (expense) benefit	(24)	(72)
Reclassification adjustment, securities, tax (expense) benefit	13	(10)
Other comprehensive income (loss), tax (expense) benefit	(11)	(82)
Accumulated other comprehensive income/loss tax (expense) benefit, ending	(191)	(276)
Accumulated other comprehensive income (loss), beginning	362	418
Other comprehensive income (loss) before reclassifications, after-tax	29	155
Reclassification adjustment, after-tax	(22)	18
Shareholders' other comprehensive income (loss), net of tax	7	173
Accumulated other comprehensive income (loss), ending	369	591
Net unrealized appreciation on securities [ Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Realized investment (gains) losses	(35)	28
Net unrealized appreciation on derivatives [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), before tax, beginning	4	10
Other comprehensive income (loss) before reclassifications, pre-tax		(4)
Reclassification adjustment, pre-tax	(4)
Accumulated other comprehensive income (loss), before tax, ending	0	6
Accumulated other comprehensive income/loss tax (expense) benefit, beginning	(1)	(3)
Other comprehensive income (loss), derivatives, before reclassifications, tax (expense) benefit		1
Reclassification adjustment, derivatives, tax (expense) benefit	1
Accumulated other comprehensive income/loss tax (expense) benefit, ending	0	(2)
Accumulated other comprehensive income (loss), beginning	3	7
Other comprehensive income (loss) before reclassifications, after-tax		(3)
Reclassification adjustment, after-tax	(3)
Accumulated other comprehensive income (loss), ending	0	4
Net unrealized appreciation on derivatives [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Realized investment (gains) losses	(4)
Net translation of foreign currencies [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), before tax, beginning	(390)	(295)
Other comprehensive income (loss), pre-tax	111	83
Accumulated other comprehensive income (loss), before tax, ending	(279)	(212)
Accumulated other comprehensive income/loss tax (expense) benefit, beginning	21	21
Other comprehensive income (loss), tax (expense) benefit	1	(2)
Accumulated other comprehensive income/loss tax (expense) benefit, ending	22	19
Accumulated other comprehensive income (loss), beginning	(369)	(274)
Shareholders' other comprehensive income (loss), net of tax	112	81
Accumulated other comprehensive income (loss), ending	(257)	(193)
Postretirement benefits liability adjustment [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss), before tax, beginning	(2,120)	(2,155)
Reclassification adjustment, pre-tax	21	16
Other comprehensive income (loss), pre-tax	21
Accumulated other comprehensive income (loss), before tax, ending	(2,099)	(2,139)
Accumulated other comprehensive income/loss tax (expense) benefit, beginning	742	754
Reclassification adjustment, postretirement benefits, tax (expense) benefit	(7)	(5)
Other comprehensive income (loss), tax (expense) benefit	(7)
Accumulated other comprehensive income/loss tax (expense) benefit, ending	735	749
Accumulated other comprehensive income (loss), beginning	(1,378)	(1,401)
Reclassification adjustment, after-tax	14	11
Shareholders' other comprehensive income (loss), net of tax	14
Accumulated other comprehensive income (loss), ending	(1,364)	(1,390)
Postretirement benefits liability adjustment [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Other operating expenses	21	16
Reclassification adjustment for amortization of net losses from past experience and prior service costs [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Reclassification adjustment, pre-tax	15	16
Reclassification adjustment, postretirement benefits, tax (expense) benefit	(5)	(5)
Reclassification adjustment, after-tax	10	11
Reclassification adjustment for amortization of net losses from past experience and prior service costs [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Other operating expenses	15	$ 16
Reclassification adjustment for settlement losses [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Reclassification adjustment, pre-tax	6
Reclassification adjustment, postretirement benefits, tax (expense) benefit	(2)
Reclassification adjustment, after-tax	4
Reclassification adjustment for settlement losses [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Other operating expenses	$ 6

XML

Pension and Other Postretirement Benefits - About our Plans (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan cost	$ 5	$ 5
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan cost	$ 2	$ 2

XML

Pension and Other Postretirement Benefits - Funded Status (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Pension Benefits [Member]
Change in benefit obligation [Abstract]
Interest cost	$ 48,000,000	$ 50,000,000
Change in plan assets [Roll Forward]
Contributions	150,000,000
Expected plan contributions for the remaining fiscal year	0
Other Postretirement Benefits [Member]
Change in benefit obligation [Abstract]
Interest cost	$ 3,000,000	$ 3,000,000

XML

Pension and Other Postretirement Benefit Plans - Amounts included in AOCI (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Amounts included in AOCI [Abstract]
Increase (decrease) in unrecognized actuarial losses and prior service costs, pre-tax	$ (21)
Increase (decrease) in unrecognized actuarial losses and prior service costs, after-tax	$ (14)	$ (11)

XML

Pension and Other Postretirement Benefits - Cost of our Plans (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Pension Benefits [Member]
Components of net pension and other postretirement benefits cost [Abstract]
Interest cost	$ 48	$ 50
Expected long-term return on plan assets	(65)	(62)
Amortization of net loss from past experience	16	17
Amortization of prior service cost	0	0
Settlement loss	6	0
Defined benefit plan cost	5	5
Other Postretirement Benefits [Member]
Components of net pension and other postretirement benefits cost [Abstract]
Interest cost	3	3
Expected long-term return on plan assets	0	0
Amortization of net loss from past experience	0	0
Amortization of prior service cost	(1)	(1)
Settlement loss	0	0
Defined benefit plan cost	$ 2	$ 2

XML

Goodwill, Other Intangibles, and Property and Equipment - Goodwill Activity (Details) $ in Millions	Mar. 31, 2017 USD ($)
Goodwill [Line Items]
Goodwill, Beginning Balance	$ 5,980
Goodwill, Ending Balance	$ 5,982

XML

Goodwill, Other Intangibles, and Property and Equipment - Property and Equipment (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Property Plant And Equipment [Line Items]
Net carrying value	$ 1,519	$ 1,536

XML

Income Taxes - Income Tax Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Current taxes
Total taxes, current	$ 286	$ 294
Deferred taxes (benefits)
Total taxes, deferred	11	11
Total taxes	$ 297	$ 305

XML

Income Taxes - Reconciliation to Nominal Tax Rate (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Reconciliation of total taxes to nominal federal rate details [Abstract]
Total income taxes	$ 297	$ 305

XML

Income Taxes - Effective Tax Rates (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Taxes [Abstract]
Consolidated effective tax rate	33.40%	37.20%
Accumulated undistributed foreign earnings	$ 2,700
Cumulative unrecognized deferred tax liabilities	$ 362

XML

Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Deferred tax liabilities [Abstract]
Net deferred income tax assets	$ 263	$ 304

XML

Income Taxes - Uncertain Tax Positions (Details)	3 Months Ended
	Mar. 31, 2017 USD ($)
Reconciliation of unrecognized tax benefits details [Abstract]
Changes in unreognized tax benefits

XML

Contingencies and Other Matters - Guarantees (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	$ 488
Liability Carrying Value	$ 0
Percentage of benefit obligations reinsured	13.00%
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member] | Minimum [Member]
Guarantee Obligations [Line Items]
Assets maintained by employers	$ 488
Indemnification obligations to lenders [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	153
Liability Carrying Value	$ 0
Indemnification obligations in connection with acquistion, disposition and reinsurance transactions [Member]
Guarantee Obligations [Line Items]
Maximum Exposure Inestimable	The Company does not believe that it is possible to determine the maximum potential amount due under these obligations, because not all amounts due under these indemnification obligations are subject to limitation.
Liability Carrying Value	$ 0
Market Value Guarantee [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	32
Liability Carrying Value	3
Expiring In 2022 [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	25
Expiring in 2026 [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	$ 7

XML

Contingencies and Other Matters - Legal and Regulatory Matters (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)
CMS Actions [Member]
Loss Contingencies [Line Items]
Percent of Medicare Advantage customers in a 4 Star or greater plan	20.00%
Guaranty Fund Assessments [Member]
Loss Contingencies [Line Items]
Charges related to guaranty fund assessments	$ 129
Company's share of guaranty fund assessment, after-tax	83
Guaranty Fund Assessments [Member] | Global Health Benefits Segment [Member]
Loss Contingencies [Line Items]
Charges related to guaranty fund assessments	106
Company's share of guaranty fund assessment, after-tax	68
Guaranty Fund Assessments [Member] | Group Disability And Life Segment [Member]
Loss Contingencies [Line Items]
Charges related to guaranty fund assessments	23
Company's share of guaranty fund assessment, after-tax	15
Pending Litigation [Member]
Loss Contingencies [Line Items]
Reserves for litigation matters, pre-tax	190
Reserves for litigation matters, after-tax	$ 125

XML

Contingencies and Other Matters - Anthem Litigation (Details) $ in Millions	Mar. 31, 2017 USD ($)
Contingencies And Other Matters [Abstract]
Termination fee payable to Company	$ 1,850
Positive Outcome Of Litigation [Member] | Minimum [Member]
Gain Contingencies [Line Items]
Damages sought	$ 13,000

XML

Segment Information - Special Items (Details) - USD ($) $ in Millions	3 Months Ended		20 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017
After-tax [Abstract]
Long-term care guaranty fund assessment	$ 83	$ 0
Merger-related transaction costs	49	36
Total impact of special items, after-tax	132	36
Before-tax [Abstract]
Long-term care guaranty fund assessment, before tax	129	0
Merger-related costs, before tax	63	40	$ 295
Total impact of special items, before-tax	$ 192	$ 40

XML

Segment Information - Summarized Segment Financial Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	$ 10,036	$ 9,644
Net investment income	303	272
Total operating revenues	10,339	9,916
Total revenues	10,385	9,884
Shareholders' Net Income	598	519
After-tax adjustments to reconcile to adjusted income from operations:
Realized investment (gains) losses	(31)	21
Amortization of other acquired intangible assets	20	25
Special items:
Long-term care guaranty fund assessment	83	0
Merger-related transaction costs	49	36
Adjusted income from operations	719	601
Operating Segments [Member] | Global Health Benefits Segment [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	8,106	7,812
Net investment income	92	72
Total operating revenues	8,198	7,884
Total revenues	8,224	7,867
Shareholders' Net Income	544	514
After-tax adjustments to reconcile to adjusted income from operations:
Realized investment (gains) losses	(16)	12
Amortization of other acquired intangible assets	14	18
Special items:
Long-term care guaranty fund assessment	68
Merger-related transaction costs	0	0
Adjusted income from operations	610	544
Operating Segments [Member] | Global Supplemental Benefits Segment [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	881	780
Net investment income	28	26
Total operating revenues	909	806
Total revenues	922	804
Shareholders' Net Income	77	59
After-tax adjustments to reconcile to adjusted income from operations:
Realized investment (gains) losses	(9)	1
Amortization of other acquired intangible assets	6	7
Special items:
Long-term care guaranty fund assessment	0
Merger-related transaction costs	0	0
Adjusted income from operations	74	67
Operating Segments [Member] | Group Disability And Life Segment [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	1,032	1,029
Net investment income	89	80
Total operating revenues	1,121	1,109
Total revenues	1,129	1,106
Shareholders' Net Income	59	13
After-tax adjustments to reconcile to adjusted income from operations:
Realized investment (gains) losses	(6)	2
Amortization of other acquired intangible assets	0	0
Special items:
Long-term care guaranty fund assessment	15
Merger-related transaction costs	0	0
Adjusted income from operations	68	15
Operating Segments [Member] | Other Operations Segment [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	30	27
Net investment income	86	90
Total operating revenues	116	117
Total revenues	115	107
Shareholders' Net Income	20	14
After-tax adjustments to reconcile to adjusted income from operations:
Realized investment (gains) losses	0	6
Amortization of other acquired intangible assets	0	0
Special items:
Long-term care guaranty fund assessment	0
Merger-related transaction costs	0	0
Adjusted income from operations	20	20
Corporate [Member]
Segment Reporting Information [Line Items]
Premiums, fees and other revenues and mail order pharmacy revenues	(13)	(4)
Net investment income	8	4
Total operating revenues	(5)	0
Total revenues	(5)	0
Shareholders' Net Income	(102)	(81)
After-tax adjustments to reconcile to adjusted income from operations:
Realized investment (gains) losses	0	0
Amortization of other acquired intangible assets	0	0
Special items:
Long-term care guaranty fund assessment	0
Merger-related transaction costs	49	36
Adjusted income from operations	$ (53)	$ (45)

XML

Segment Information - Revenues by Product Type (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue from External Customer [Line Items]
Premiums	$ 8,103	$ 7,746
Mail order pharmacy revenues	710	697
Revenues from external customers	$ 10,036	$ 9,644

XML

Segment Information - Foreign and U.S. Revenues (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from external customers	$ 10,036	$ 9,644

XML

Segment Information - Concentration Risk (Details) - CMS [Member] - USD ($) $ in Billions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Concentration Risk [Line Items]
Net receivables from CMS	$ 0.5		$ 0.6
Revenue Consolidated [Member] | Government Contracts Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	18.00%	21.00%
Concentration Risk, Benchmark Description	consolidated revenues

XML

Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Consolidated Results
Total revenues	$ 10,385	$ 9,884
Income before income taxes	890	819
Shareholders' net income	$ 598	$ 519
Shareholders' Net Income Per Share:
EPS, basic	$ 2.34	$ 2.04
EPS, diluted	2.30	2.00
Stock and Dividend Data
Dividends Declared Per Share	$ 0.04	$ 0.04
Special items
Merger-related transaction costs	$ 49	$ 36

XML

Schedule II - Condensed Financial Information, Statements of Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating expenses:
Total operating expenses	$ 2,530	$ 2,321
Income before Income Taxes	890	819
Income tax expense (benefit)	297	305
Shareholders' Net Income	598	519
Shareholders' other comprehensive income (loss), net of tax:
Net unrealized appreciation (depreciation) on securities	7	173
Net unrealized appreciation (depreciation) on derivatives	(3)	(3)
Net translation of foreign currencies	112	81
Postretirement benefits liability adjustment	14	11
Shareholders' other comprehensive income (loss)	130	262
Shareholders' comprehensive income (loss)	$ 728	$ 781

XML

Schedule II - Condensed Financial Information, Balance Sheets (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents	$ 4,155	$ 3,185	$ 2,401	$ 1,968
Short-term investments	303	691
Other assets	2,250	2,227
Total assets	61,147	59,360
Liabilities:
Short-term debt	142	276
Long-term debt, carrying value	4,621	4,756
Total liabilities	46,862	45,575
Shareholders Equity:
Common stock (shares issued, 296; authorized, 600)	74	74
Additional paid-in capital	2,912	2,892
Accumulated other comprehensive loss	(1,252)	(1,382)
Retained earnings	14,356	13,855
Less: treasury stock, at cost	(1,864)	(1,716)
Total shareholders' equity	14,226	13,723
Total liabilities and equity	$ 61,147	$ 59,360

XML

Schedule II - Condensed Financial Information, Balance Sheets - Parentheticals (Details) - shares shares in Millions	Mar. 31, 2017	Dec. 31, 2016
Consolidated Balance Sheets
Common stock shares issued	296	296
Common stock shares authorized	600	600

XML

Schedule II - Condensed Financial Information, Statements of Cash Flows (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities
Shareholders' net income		$ 598	$ 519
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities:
Other liabilities		(186)	(263)
Other, net		(31)	5
Net cash provided by (used in) operating activities	[1]	1,579	921
Cash Flows from Investing Activities
Short term investments purchased		(256)	(198)
Net cash provided by (used in) investing activities	[1]	(117)	(360)
Cash Flows from Financing Activities
Net change in short-term debt		(10)	(6)
Repayment of long-term debt		(250)	0
Issuance of common stock		38	10
Repurchase of common stock		(239)	(139)
Net cash provided by (used in) financing activities		(515)	(146)
Net increase (decrease) in cash and cash equivalents		970	433
Cash and cash equivalents, January 1		3,185	1,968
Cash and cash equivalents, March 31		$ 4,155	$ 2,401

[1] As required in adopting Accounting Standard Update ("ASU") 2016-15, the Company retrospectively reclassified $27 million of cash distributions from partnership earnings from investing to operating activities for the first quarter of 2016. The comparable amount reported in operating activities in 2017 was $45 million. See Note 2 for further discussion.

XML

Schedule II - Condensed Financial Information, Short-term and Long-term Debt (Details) - USD ($) $ in Millions		Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Total short-term debt		$ 142	$ 276
Long-term debt, carrying value		4,621	4,756
Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Current maturities of long-term debt		131	250
Other, including capital leases		11	26
Total short-term debt		142	276
Long-term debt, carrying value		4,621	4,756
$131 million, 6.35% Notes due 2018 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 131	$ 131
Long-term debt, stated interest rate		6.35%	6.35%
Long-term debt, carrying value		$ 0	$ 131
$250 million, 4.375% Notes due 2020 [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 250	$ 250
Long-term debt, stated interest rate		4.375%	4.375%
Long-term debt, carrying value	[1]	$ 252	$ 252
$300 million, 5.125% Notes due 2020 [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 300	$ 300
Long-term debt, stated interest rate		5.125%	5.125%
Long-term debt, carrying value	[1]	$ 301	$ 301
$300 million, 4.5% Notes due 2021 [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 300	$ 300
Long-term debt, stated interest rate		4.50%	4.50%
Long-term debt, carrying value	[1]	$ 301	$ 302
$750 million, 4% Notes due 2022 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 750	$ 750
Long-term debt, stated interest rate		4.00%	4.00%
Long-term debt, carrying value		$ 744	$ 744
$100 million, 7.65% Notes due 2023 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 100	$ 100
Long-term debt, stated interest rate		7.65%	7.65%
Long-term debt, carrying value		$ 100	$ 100
$17 million, 8.3% Notes due 2023 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 17	$ 17
Long-term debt, stated interest rate		8.30%	8.30%
Long-term debt, carrying value		$ 17	$ 17
$900 million, 3.25% Notes Due 2025 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 900	$ 900
Long-term debt, stated interest rate		3.25%	3.25%
Long-term debt, carrying value		$ 893	$ 893
$300 million, 7.875% Debentures due 2027 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 300	$ 300
Long-term debt, stated interest rate		7.875%	7.875%
Long-term debt, carrying value		$ 299	$ 299
$83 million, 8.3% Step Down Notes due 2033 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 83	$ 83
Long-term debt, stated interest rate		8.30%	8.30%
Long-term debt, carrying value		$ 82	$ 82
$500 million, 6.15% Notes due 2036 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 500	$ 500
Long-term debt, stated interest rate		6.15%	6.15%
Long-term debt, carrying value		$ 498	$ 498
$300 million, 5.875% Notes due 2041 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 300	$ 300
Long-term debt, stated interest rate		5.875%	5.875%
Long-term debt, carrying value		$ 296	$ 296
$750 million, 5.375% Notes due 2042 [Member] | Uncollateralized Debt [Member]
Debt Instrument [Line Items]
Long-term debt, face value		$ 750	$ 750
Long-term debt, stated interest rate		5.375%	5.375%
Long-term debt, carrying value		$ 743	$ 743

[1] The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 11 for further information about the Company’s interest rate risk management and these derivative instruments.

XML

Schedule II - Condensed Financial Information, Credit Facility (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($) Banks
Line of Credit Facility [Line Items]
Covenant terms	The credit agreement includes options subject to consent by the administrative agent and the committing banks to increase the commitment amount to $2 billion and to extend the term past December 12, 2019. The credit agreement is available for general corporate purposes, including for the issuance of letters of credit. The credit agreement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – which is total consolidated debt to total consolidated capitalization (each as defined in the credit agreement) – to be greater than 0.50. The leverage ratio calculation excludes the following items that are included in accumulated other comprehensive loss on the Company’s consolidated balance sheets: net unrealized appreciation on fixed maturities and the portion of the post-retirement benefits liability adjustment attributable to pension.
Debt covenant compliance	The Company was in compliance with its debt covenants as of March 31, 2017.
Debt outstanding	$ 4,800
Revolving Credit And Letter Of Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit agreement term	5 years
Maximum borrowing capacity under credit facility	$ 1,500
Expiration date	Dec. 12, 2019
Number of participating banks | Banks	16
Maximum borrowing capacity under option to increase	$ 2,000
Leverage ratio covenant	50.00%
Borrowing capacity within maximum debt coverage covenant	$ 10,500
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility	500
Letters of credit outstanding	$ 13
Primary Commitment Holders [Member] | Revolving Credit And Letter Of Credit Facility [Member]
Line of Credit Facility [Line Items]
Number of participating banks | Banks	3
Percent of commitment held by each primary commitment holder	12.00%
Minor Commitment Holders [Member] | Revolving Credit And Letter Of Credit Facility [Member]
Line of Credit Facility [Line Items]
Number of participating banks | Banks	13
Collective percentage held by remaining commitment holders	64.00%

XML

Schedule II - Condensed Financial Information, Notes (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Maturities Of Debt Excluding Capital Leases [Abstract]
Interest paid on long-term and short-term debt	$ 70	$ 69

XML

Schedule II - Condensed Financial Information, Guarantees (Details) $ in Millions	Mar. 31, 2017 USD ($)
Market Value Guarantee [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	$ 32
Liability Carrying Value	3
Expiring In 2022 [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	25
Expiring in 2026 [Member]
Guarantee Obligations [Line Items]
Maximum Exposure, Undiscounted	$ 7

XML

Schedule IV - Reinsurance (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Premiums:
Ceded to other companies, premiums	$ 120	$ 136
Net amount	$ 8,103	$ 7,746