INVESTMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities

The following tables provide information relating to the Company’s fixed maturities classified as AFS.

AFS Fixed Maturities by Classification

	Amortized Cost		Allowance for Credit Losses (4)		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
June 30, 2020:
Fixed Maturities:
Corporate (1)	$	45,706	$	13	$	4,091	$	154	$	49,630
U.S. Treasury, government and agency	13,103		—		4,090		—		17,193
States and political subdivisions	607		—		105		—		712
Foreign governments	770		—		69		6		833
Residential mortgage-backed (2)	144		—		14		—		158
Asset-backed (3)	2,057		—		23		41		2,039
Commercial mortgage-backed	855		—		24		—		879
Redeemable preferred stock	373		—		15		10		378
Total at June 30, 2020	$	63,615	$	13	$	8,431	$	211	$	71,822
December 31, 2019:
Fixed Maturities:
Corporate (1)	$	42,347	$	—	$	2,178	$	61	$	44,464
U.S. Treasury, government and agency	14,385		—		1,151		305		15,231
States and political subdivisions	584		—		68		3		649
Foreign governments	460		—		35		5		490
Residential mortgage-backed (2)	161		—		12		—		173
Asset-backed (3)	843		—		3		2		844
Redeemable preferred stock	498		—		18		5		511
Total at December 31, 2019	$	59,278	$	—	$	3,465	$	381	$	62,362

______________

(1)Corporate fixed maturities include both public and private issues.

(2)Includes publicly traded agency pass-through securities and collateralized obligations.

(3)Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

(4)Amounts represent the allowance for credit losses for 2020 - (see Note 2 Significant Accounting Policies - Investments).

Investments Classified by Contractual Maturity Date

The contractual maturities of AFS fixed maturities at June 30, 2020 are shown in the table below. Bonds not due at a single maturity date have been included in the table in the final year of maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Contractual Maturities of AFS Fixed Maturities

	Amortized Cost (Less Allowance for Credit Losses)		Fair Value
	(in millions)
June 30, 2020 (1):
Contractual maturities:
Due in one year or less	$	4,393	$	4,433
Due in years two through five	14,167		14,944
Due in years six through ten	16,475		18,256
Due after ten years	25,138		30,735
Subtotal	60,173		68,368
Residential mortgage-backed	144		158
Asset-backed	2,057		2,039
Commercial mortgage-backed	855		879
Redeemable preferred stock	373		378
Total at June 30, 2020	$	63,602	$	71,822

______________

(1)Net amortized cost is equal to amortized cost, less any allowance for credit losses to the extent applicable.

Available For Sale Fixed Maturities Proceeds Gross Gains And Gross Losses From Sales And Other Than Temporary Impairments

The following table shows proceeds from sales, gross gains (losses) from sales and credit losses for AFS fixed maturities for the three and six months ended June 30, 2020 and 2019:

Proceeds from Sales, Gross Gains (Losses) from Sales and Credit Losses for AFS Fixed Maturities

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(in millions)
Proceeds from sales	$	2,864	$	1,556	$	4,586	$	2,917
Gross gains on sales	$	205	$	9	$	274	$	17
Gross losses on sales	$	(24)	$	(6)	$	(27)	$	(21)
Credit losses (1)	$	(11)	$	—	$	(13)	$	—

______________

(1)Commencing with the Company’s adoption of ASU 2016-13 on January 1, 2020, credit losses on AFS debt securities were recognized as an allowance for credit losses. In 2019 and prior, credit losses on AFS fixed maturities were recognized as OTTI

Fixed Maturities Credit Loss Impairments

The following table sets forth the amount of credit loss impairments on AFS fixed maturities held by the Company at the dates indicated and the corresponding changes in such amounts.

AFS Fixed Maturities - Credit Loss Impairments

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(in millions)
Balance, beginning of period	$	(17)	$	(18)	$	(15)	$	(46)
Previously recognized impairments on securities that matured, paid, prepaid or sold	—		—		—		28
Recognized impairments on securities impaired to fair value this period (1)	—		—		—		—
Credit losses recognized this period on securities for which credit losses were not previously recognized	(8)		—		(10)		—
Additional credit losses this period on securities previously impaired	(3)		—		(3)		—
Increases due to passage of time on previously recorded credit losses	—		—		—		—
Accretion of previously recognized impairments due to increases in expected cash flows (for OTTI securities 2019 and prior)	—		—		—		—
Balance at June 30,	$	(28)	$	(18)	$	(28)	$	(18)

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(1)Represents circumstances where the Company determined in the current period that it intends to sell the security, or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

Net Unrealized Gains (Losses) on Available-for-Sale Fixed Maturities

The tables that follow below present a roll-forward of net unrealized investment gains (losses) recognized in AOCI, split between amounts related to fixed maturities on which a credit loss has been recognized, and all other.

Net Unrealized Gains (Losses) on AFS Fixed Maturities

	Net Unrealized Gains (Losses) on Investments		DAC		Policyholders’ Liabilities		Deferred Income Tax Asset (Liability)		AOCI Gain (Loss) Related to Net Unrealized Investment  Gains (Losses)
	(in millions)
Balance, April 1, 2020	$	5,040	$	(205)	$	(1,003)	$	(805)	$	3,027
Net investment gains (losses) arising during the period	3,336		—		—		—		3,336
Reclassification adjustment:									—
Included in Net income (loss)	(167)		—		—		—		(167)
Excluded from Net income (loss)	—		—		—		—		—
Impact of net unrealized investment gains (losses) on:
DAC	—		(289)		—		—		(289)
Deferred income taxes	—		—		—		(437)		(437)
Policyholders’ liabilities	—		—		(799)		—		(799)
Net unrealized investment gains (losses) excluding credit losses	8,209		(494)		(1,802)		(1,242)		4,671
Net unrealized investment gains (losses) with credit losses	(2)		—		1		—		(1)
Balance, June 30, 2020	$	8,207	$	(494)	$	(1,801)	$	(1,242)	$	4,670
Balance, April 1, 2019	$	1,003	$	(616)	$	22	$	(86)	$	323
Net investment gains (losses) arising during the period	1,623		—		—		—		1,623
Reclassification adjustment:									—
Included in Net income (loss)	(4)		—		—		—		(4)
Excluded from Net income (loss)	—		—		—		—		—
Impact of net unrealized investment gains (losses) on:
DAC	—		82		—		—		82
Deferred income taxes	—		—		—		(334)		(334)
Policyholders’ liabilities	—		—		(108)		—		(108)
Net unrealized investment gains (losses) excluding credit losses	2,622		(534)		(86)		(420)		1,582
Net unrealized investment gains (losses) with credit losses (1)	2		—		—		—		2
Balance, June 30, 2019	$	2,624	$	(534)	$	(86)	$	(420)	$	1,584

	Net Unrealized Gains (Losses) on Investments		DAC		Policyholders’ Liabilities		Deferred Income Tax Asset (Liability)		AOCI Gain (Loss) Related to Net Unrealized Investment  Gains (Losses)
	(in millions)
Balance, January 1, 2020	$	3,084	$	(831)	$	(192)	$	(433)	$	1,628
Net investment gains (losses) arising during the period	5,362		—		—		—		5,362
Reclassification adjustment:									—
Included in Net income (loss)	(230)		—		—		—		(230)
Excluded from Net income (loss)	—		—		—		—		—
Impact of net unrealized investment gains (losses) on:
DAC	—		336		—		—		336

	Net Unrealized Gains (Losses) on Investments		DAC		Policyholders’ Liabilities		Deferred Income Tax Asset (Liability)		AOCI Gain (Loss) Related to Net Unrealized Investment  Gains (Losses)
	(in millions)
Deferred income taxes	—		—		—		(810)		(810)
Policyholders’ liabilities	—		—		(1,611)		—		(1,611)
Net unrealized investment gains (losses) excluding credit losses	8,216		(495)		(1,803)		(1,243)		4,675
Net unrealized investment gains (losses) with credit losses	(9)		1		2		1		(5)
Balance, June 30, 2020	$	8,207	$	(494)	$	(1,801)	$	(1,242)	$	4,670
Balance, January 1, 2019	$	(577)	$	39	$	(55)	$	125	$	(468)
Net investment gains (losses) arising during the period	3,206		—		—		—		3,206
Reclassification adjustment:
Included in Net income (loss)	(7)		—		—		—		(7)
Excluded from Net income (loss)	—		—		—		—		—
Impact of net unrealized investment gains (losses) on:
DAC	—		(573)		—		—		(573)
Deferred income taxes	—		—		—		(545)		(545)
Policyholders’ liabilities	—		—		(31)		—		(31)
Net unrealized investment gains (losses) excluding credit losses	2,622		(534)		(86)		(420)		1,582
Net unrealized investment gains (losses) with credit losses (1)	2		—		—		—		2
Balance, June 30, 2019	$	2,624	$	(534)	$	(86)	$	(420)	$	1,584

______________

(1)Credit losses for 2019 were OTTI losses.

Continuous Gross Unrealized Losses for Available-for-Sale Fixed Maturities

The following tables disclose the fair values and gross unrealized losses of the 639 issues at June 30, 2020 and the 390 issues at December 31, 2019 that are not deemed to have credit losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the specified periods at the dates indicated:

AFS Fixed Maturities in an Unrealized Loss Position for Which No Allowance Is Recorded

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
June 30, 2020:
Fixed Maturities:
Corporate	$	2,511	$	96	$	273	$	51	$	2,784	$	147
Foreign governments	47		6		—		—		47		6
Asset-backed	1,349		37		73		4		1,422		41
Redeemable preferred stock	121		8		11		2		132		10
Total at June 30, 2020	$	4,028	$	147	$	357	$	57	$	4,385	$	204
December 31, 2019: (1)
Fixed Maturities:
Corporate	$	2,669	$	41	$	366	$	20	$	3,035	$	61

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
U.S. Treasury, government and agency	4,245		305		2		—		4,247		305
States and political subdivisions	123		3		—		—		123		3
Foreign governments	11		—		47		5		58		5
Asset-backed	319		—		201		2		520		2
Redeemable preferred stock	29		—		49		5		78		5
Total at December 31, 2019	$	7,396	$	349	$	665	$	32	$	8,061	$	381

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(1)Amounts represents fixed maturities in an unrealized loss position that are not deemed to be other-than-temporarily impaired for 2019.

Financing Receivable, Allowance for Credit Loss

The change in the allowance for credit losses for commercial mortgage loans and agricultural mortgage loans during the three and six months ended June 30, 2020 was as follows:

	Three Months Ended June 30, 2020		Six Months Ended June 30, 2020
	(in millions)
Allowance for credit losses on mortgage loans (1):
Commercial mortgages:
Balance, beginning of period	$	(43)	$	(33)
Current-period provision for expected credit losses	(19)		(29)
Write-offs charged against the allowance	—		—
Recoveries of amounts previously written off	—		—
Net change in allowance	(19)		(29)
Ending Balance, June 30,	$	(62)	$	(62)
Agricultural mortgages:
Balance, beginning of period	$	(3)	$	(3)
Current-period provision for expected credit losses	(1)		(1)
Write-offs charged against the allowance	—		—
Recoveries of amounts previously written off	—		—
Net change in allowance	(1)		(1)
Ending Balance, June 30,	$	(4)	$	(4)
Total allowance for credit losses	$	(66)	$	(66)

____________

(1) See Note 2 for discussion of the transition balance.

Financing Receivable Credit Quality Indicators

The following tables summarize the Company’s mortgage loans segregated by risk rating exposure at June 30, 2020.

LTV Ratios (1)(3)

	At June 30, 2020
	Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Total
	(in millions)
Mortgage loans:
Commercial:
0% - 50%	$	—	$	—	$	29	$	324	$	196	$	748	$	1,297
50% - 70%	656		613		915		759		2,501		1,714		7,158
70% - 90%	90		184		304		113		58		464		1,213
90% plus	—		—		—		5		—		156		161
Total commercial	$	746	$	797	$	1,248	$	1,201	$	2,755	$	3,082	$	9,829
Agricultural:
0% - 50%	$	106	$	139	$	159	$	167	$	254	$	733	$	1,558
50% - 70%	204		139		186		112		129		394		1,164
70% - 90%	—		—		3		—		—		18		21
90% plus	—		—		—		—		—		—		—
Total agricultural	$	310	$	278	$	348	$	279	$	383	$	1,145	$	2,743
Total mortgage loans:
0% - 50%	$	106	$	139	$	188	$	491	$	450	$	1,481	$	2,855
50% - 70%	860		752		1,101		871		2,630		2,108		8,322
70% - 90%	90		184		307		113		58		482		1,234
90% plus	—		—		—		5		—		156		161
Total mortgage loans	$	1,056	$	1,075	$	1,596	$	1,480	$	3,138	$	4,227	$	12,572

Debt Service Coverage Ratios (2)(3)

	At June 30, 2020
	Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Total
	(in millions)
Mortgage loans:
Commercial:
Greater than 2.0x	$	621	$	373	$	800	$	377	$	2,134	$	1,315	$	5,620
1.8x to 2.0x	90		187		123		409		70		484		1,363
1.5x to 1.8x	35		183		230		302		551		610		1,911
1.2x to 1.5x	—		12		12		76		—		673		773
1.0x to 1.2x	—		42		83		37		—		—		162
Less than 1.0x	—		—		—		—		—		—		—
Total commercial	$	746	$	797	$	1,248	$	1,201	$	2,755	$	3,082	$	9,829
Agricultural
Greater than 2.0x	$	43	$	28	$	39	$	37	$	76	$	162	$	385
1.8x to 2.0x	11		36		15		17		21		91		191
1.5x to 1.8x	75		39		46		43		52		232		487
1.2x to 1.5x	110		126		148		110		158		349		1,001
1.0x to 1.2x	67		39		92		71		58		275		602
Less than 1.0x	4		10		8		1		18		36		77
Total agricultural	$	310	$	278	$	348	$	279	$	383	$	1,145	$	2,743

	At June 30, 2020
	Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Total
	(in millions)
Total mortgage loans
Greater than 2.0x	$	664	$	401	$	839	$	414	$	2,210	$	1,477	$	6,005
1.8x to 2.0x	101		223		138		426		91		575		1,554
1.5x to 1.8x	110		222		276		345		603		842		2,398
1.2x to 1.5x	110		138		160		186		158		1,022		1,774
1.0x to 1.2x	67		81		175		108		58		275		764
Less than 1.0x	4		10		8		1		18		36		77
Total mortgage loans	$	1,056	$	1,075	$	1,596	$	1,480	$	3,138	$	4,227	$	12,572

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(1)The LTV ratio is derived from current loan balance divided by the fair value of the property. The fair value of the underlying commercial properties is updated annually for each mortgage loan.

(2)The DSC ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.

(3)Amounts presented at amortized cost basis.

The following tables provide information relating to the LTV and DSC ratios for commercial and agricultural mortgage loans at June 30, 2020 and December 31, 2019. The values used in these ratio calculations were developed as part of the periodic review of the commercial and agricultural mortgage loan portfolio, which includes an evaluation of the underlying collateral value.

Mortgage Loans by LTV and DSC Ratios

	DSC Ratio (2) (3)
LTV Ratio (1) (3):	Greater than 2.0x		1.8x to 2.0x		1.5x to 1.8x		1.2x to 1.5x		1.0x to 1.2x		Less than 1.0x		Total
	(in millions)
June 30, 2020:
Mortgage loans:
Commercial:
0% - 50%	$	1,016	$	20	$	237	$	24	$	—	$	—	$	1,297
50% - 70%	4,208		1,080		1,353		485		32		—		7,158
70% - 90%	312		263		321		187		130		—		1,213
90% plus	84		—		—		77		—		—		161
Total commercial	$	5,620	$	1,363	$	1,911	$	773	$	162	$	—	$	9,829
Agricultural:
0% - 50%	$	292	$	106	$	255	$	520	$	333	$	52	$	1,558
50% - 70%	93		83		232		462		269		25		1,164
70% - 90%	—		2		—		19		—		—		21
90% plus	—		—		—		—		—		—		—
Total agricultural	$	385	$	191	$	487	$	1,001	$	602	$	77	$	2,743
Total mortgage loans:
0% - 50%	$	1,308	$	126	$	492	$	544	$	333	$	52	$	2,855
50% - 70%	4,301		1,163		1,585		947		301		25		8,322
70% - 90%	312		265		321		206		130		—		1,234
90% plus	84		—		—		77		—		—		161
Total mortgage loans	$	6,005	$	1,554	$	2,398	$	1,774	$	764	$	77	$	12,572

	DSC Ratio (2) (3)
LTV Ratio (1) (3):	Greater than 2.0x		1.8x to 2.0x		1.5x to 1.8x		1.2x to 1.5x		1.0x to 1.2x		Less than 1.0x		Total
	(in millions)
December 31, 2019:
Mortgage loans:
Commercial:
0% - 50%	$	887	$	38	$	214	$	24	$	—	$	—	$	1,163
50% - 70%	4,097		1,195		1,118		795		242		—		7,447
70% - 90%	251		98		214		154		46		—		763
90% plus	—		—		—		—		—		—		—
Total commercial	$	5,235	$	1,331	$	1,546	$	973	$	288	$	—	$	9,373
Agricultural:
0% - 50%	$	322	$	104	$	241	$	545	$	321	$	50	$	1,583
50% - 70%	82		87		236		426		251		33		1,115
70% - 90%	—		—		—		19		—		—		19
90% plus	—		—		—		—		—		—		—
Total agricultural	$	404	$	191	$	477	$	990	$	572	$	83	$	2,717
Total mortgage loans:
0% - 50%	$	1,209	$	142	$	455	$	569	$	321	$	50	$	2,746
50% - 70%	4,179		1,282		1,354		1,221		493		33		8,562
70% - 90%	251		98		214		173		46		—		782
90% plus	—		—		—		—		—		—		—
Total mortgage loans	$	5,639	$	1,522	$	2,023	$	1,963	$	860	$	83	$	12,090

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(1)The LTV ratio is derived from current loan balance divided by the fair value of the property. The fair value of the underlying commercial properties is updated annually for each mortgage loan.

(2)The DSC ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.

(3)Amounts presented at amortized cost basis.

Age Analysis Of Past Due Mortgage Loans

The following table provides information relating to the aging analysis of past-due mortgage loans at June 30, 2020 and December 31, 2019, respectively:

Age Analysis of Past Due Mortgage Loans (1)

	Accruing Loans												Non-accruing Loans		Total Loans		Non-accruing Loans with No Allowance		Interest Income on Non-accruing Loans(2)
	Past Due								Current		Total
	30-59 Days		60-89 Days		90 Days or  More		Total
	(in millions)
June 30, 2020:
Mortgage loans:
Commercial	$	—	$	—	$	—	$	—	$	9,754	$	9,754	$	75	$	9,829	$	75	$	1
Agricultural	67		9		49		125		2,618		2,743		—		2,743		—		—
Total	$	67	$	9	$	49	$	125	$	12,372	$	12,497	$	75	$	12,572	$	75	$	1
December 31, 2019:

	Accruing Loans												Non-accruing Loans		Total Loans		Non-accruing Loans with No Allowance		Interest Income on Non-accruing Loans(2)
	Past Due								Current		Total
	30-59 Days		60-89 Days		90 Days or  More		Total
	(in millions)
Mortgage loans:
Commercial	$	—	$	—	$	—	$	—	$	9,373	$	9,373	$	—	$	9,373	$	—	$	—
Agricultural	57		1		66		124		2,593		2,717		—		2,717		—		—
Total	$	57	$	1	$	66	$	124	$	11,966	$	12,090	$	—	$	12,090	$	—	$	—

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(1)Amounts presented at amortized cost basis.

(2) Amounts for 2020 represent results for both the three and six months ended June 30, 2020.

Net Investment Income (Loss) from Trading Securities

Net unrealized and realized gains (losses) on trading securities are included in Net investment income (loss) in the Consolidated Statements of Income (Loss). The table below shows a breakdown of Net investment income (loss) from trading securities during the three and six months ended June 30, 2020 and 2019:

Net Investment Income (Loss) from Trading Securities

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(in millions)
Net investment gains (losses) recognized during the period on securities held at the end of the period	$	250	$	150	$	87	$	424
Net investment gains (losses) recognized on securities sold during the period	14		1		17		(23)
Unrealized and realized gains (losses) on trading securities	264		151		104		401
Interest and dividend income from trading securities	45		71		94		161
Net investment income (loss) from trading securities	$	309	$	222	$	198	$	562