INSURANCE LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2018

GMDB and GMIB Liabilities and Other Policyholder's Liabilities

The following table summarizes the direct GMDB and GMIB without a no-lapse guarantee rider (“NLG”) feature liabilities, before reinsurance ceded, reflected in the consolidated balance sheets in Future policy benefits and other policyholders’ liabilities:



	GMDB			GMIB			Total
	(in millions)
Balance at January 1, 2018	$	4,080		$	4,802		$	8,882
Paid guarantee benefits	(200		)	(65		)	(265		)
Other changes in reserve	244			(36		)	208
Balance at June 30, 2018	$	4,124		$	4,701		$	8,825
Balance at January 1, 2017	$	3,165		$	3,870		$	7,035
Paid guarantee benefits	(189		)	(79		)	(268		)
Other changes in reserve	653			784			1,437
Balance at June 30, 2017	$	3,629		$	4,575		$	8,204

GMDB Reinsurance Ceded

The following table summarizes the ceded GMDB liabilities, reflected in the consolidated balance sheets in Amounts due from reinsurers:



	Six Months Ended June 30,
	2018			2017
	(in millions)
Balance, beginning of year	$	2,030		$	1,558
Paid guarantee benefits	(64		)	(91		)
Other changes in reserve	(1,869		)	366
Balance, End of Period	$	97		$	1,833

Derivative Instruments in Hedges, Liabilities, at Fair Value

The liability for the GMxB derivative features liability, the liability for SCS, SIO, MSO and IUL indexed features and the GMIB reinsurance contract asset are considered embedded or freestanding insurance derivatives and are reported at fair value. Summarized in the table below is a summary of the fair value of these liabilities at June 30, 2018 and December 31, 2017:



	June 30, 2018			December 31, 2017
	(in millions)

GMIBNLG⁽¹⁾	$	3,419		$	4,056
SCS, MSO, IUL features⁽²⁾	1,891			1,698
GWBL/GMWB⁽¹⁾	119			130
GIB⁽¹⁾	(41		)	(27		)
GMAB⁽¹⁾	3			5
Total Embedded derivatives liability⁽¹⁾	$	5,391		$	5,862

GMIB reinsurance contract asset⁽³⁾	$	1,825		$	10,488


(1)	Reported in future policyholders’ benefits and other policyholders’ liabilities in the consolidated balance sheets.


(2)	Reported in Policyholders’ account balances in the consolidated balance sheets.


(3)	Reported in GMIB reinsurance contract asset, at fair value in the consolidated balance sheets.

Variable Annuity Contracts with GMDB and GMIB Features

The June 30, 2018 values for direct variable annuity contracts in-force on such date with GMDB and GMIB features are presented in the following table. For contracts with the GMDB feature, the net amount at risk in the event of death is the amount by which the GMDB exceed related account values. For contracts with the GMIB feature, the net amount at risk in the event of annuitization is the amount by which the present value of the GMIB benefits exceeds related account values, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. Since variable annuity contracts with GMDB guarantees may also offer GMIB guarantees in the same contract, the GMDB and GMIB amounts listed are not mutually exclusive:

Direct Variable Annuity Contract Values



	June 30, 2018
	Return of Premium			Ratchet			Roll-Up			Combo			Total
	(Dollars in millions)
GMDB:
Account values invested in:
General Account	$	13,947		$	106		$	63		$	190		$	14,306
Separate Accounts	$	45,892		$	9,348		$	3,363		$	34,610		$	93,213
Net amount at risk, gross	$	176		$	88		$	1,980		$	16,493		$	18,737
Net amount at risk, net of amounts reinsured	$	176		$	84		$	1,367		$	16,493		$	18,120
Average attained age of contract holders	51.3			66.7			73.3			68.6			55.2
Percentage of contract holders over age 70	9.8		%	41.6		%	64.3		%	48.3		%	18.4		%
Range of contractually specified interest rates	N/A			N/A			3%-6%			3%-6.5%			3%-6.5%
GMIB:
Account values invested in:
General Account	N/A			N/A			$	23		$	280		$	303
Separate Accounts	N/A			N/A			$	20,928		$	39,350		$	60,278
Net amount at risk, gross	N/A			N/A			$	843		$	6,275		$	7,118
Net amount at risk, net of amounts reinsured	N/A			N/A			$	264		$	5,700		$	5,964
Average attained age of policyholders	N/A			N/A			70.3			68.6			69.0
Weighted average years remaining until annuitization	N/A			N/A			1.6			0.6			0.7
Range of contractually specified interest rates	N/A			N/A			3%-6%			3%-6.5%			3%-6.5%

Investment in Variable Insurance Trust Mutual Funds

The following table presents the aggregate fair value of assets, by major investment category, held by Separate Accounts that support variable annuity contracts with GMDB and GMIB guarantees. The investment performance of the assets impacts the related account values and, consequently, the net amount of risk associated with the GMDB and GMIB benefits and guarantees. Because variable annuity contracts offer both GMDB and GMIB features, GMDB and GMIB amounts are not mutually exclusive:

Investment in Separate Account Investment Options



	June 30, 2018		December 31, 2017 ⁽¹⁾
	(in millions)
GMDB:
Equity	$	41,308	$	41,658
Fixed income	5,316		5,469
Balanced	45,736		46,577
Other	853		968
Total	$	93,213	$	94,672
GMIB:
Equity	$	19,107	$	19,928
Fixed income	2,977		3,150
Balanced	37,894		38,890
Other	300		318
Total	$	60,278	$	62,286


(1)	Amounts previously reported were as follows in millions: (a) GMDB: Equity $78,069, Fixed Income $2,234, Balanced $14,084, and Other $283; (b) GMIB: Equity $50,429, Fixed Income $1,568, Balanced $10,165, and Other $124.

Summary of No-Lapse Guarantee Liabilities and Other Policyholder's Liabilities

The following table summarizes the NLG liabilities reflected in the General Account in Future policy benefits and other policyholders’ liabilities, the related reinsurance reserve ceded, reflected in Amounts due from reinsurers and deferred cost of reinsurance, reflected in Other assets in the Consolidated balance sheets:



	Direct Liability			Reinsurance Ceded			Net
	(in millions)
Balance at January 1, 2018	$	686		$	(664	)	$	22
Paid Guaranteed Benefits	(9		)	—			(9		)
Other changes in reserves	39			(25		)	14
Balance at June 30, 2018	$	716		$	(689	)	$	27
Balance at January 1, 2017	$	1,197		$	(609	)	$	588
Other changes in reserves	122			(23		)	99
Balance at June 30, 2017	$	1,319		$	(632	)	$	687