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Derivatives (Tables)
 9 Months Ended
Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location
The following table presents the primary underlying risk exposure, gross notional amount, and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:
 
 
 
September 30, 2018
 
December 31, 2017
 
Primary Underlying Risk Exposure
 
Gross
Notional
Amount
 
Estimated Fair Value
 
Gross
Notional
Amount
 
Estimated Fair Value
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
 
(In millions)
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
Interest rate
 
$
—

 
$
—

 
$
—

 
$
175

 
$
44

 
$
—

Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
Interest rate
 
—

 
—

 
—

 
27

 
5

 
—

Foreign currency swaps
Foreign currency exchange rate
 
2,283

 
108

 
65

 
1,762

 
86

 
75

Subtotal
 
 
2,283

 
108

 
65

 
1,789

 
91

 
75

Total qualifying hedges
 
 
2,283

 
108

 
65

 
1,964

 
135

 
75

Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
Interest rate
 
15,237

 
546

 
940

 
20,213

 
922

 
774

Interest rate caps
Interest rate
 
3,350

 
32

 
—

 
2,671

 
7

 
—

Interest rate futures
Interest rate
 
54

 
—

 
—

 
282

 
1

 
—

Interest rate options
Interest rate
 
13,819

 
51

 
104

 
24,600

 
133

 
63

Foreign currency swaps
Foreign currency exchange rate
 
1,127

 
67

 
28

 
1,103

 
69

 
41

Foreign currency forwards
Foreign currency exchange rate
 
125

 
1

 
—

 
130

 
—

 
2

Credit default swaps — purchased
Credit
 
86

 
3

 
1

 
65

 
—

 
1

Credit default swaps — written
Credit
 
1,872

 
31

 
—

 
1,878

 
40

 
—

Equity futures
Equity market
 
2,215

 
1

 
1

 
2,713

 
15

 
—

Equity index options
Equity market
 
51,044

 
862

 
1,657

 
47,066

 
794

 
1,664

Equity variance swaps
Equity market
 
9,713

 
143

 
445

 
8,998

 
128

 
430

Equity total return swaps
Equity market
 
2,516

 
1

 
63

 
1,767

 
—

 
79

Total non-designated or nonqualifying derivatives
 
101,158

 
1,738

 
3,239

 
111,486

 
2,109

 
3,054

Total
 
 
$
103,441

 
$
1,846

 
$
3,304

 
$
113,450

 
$
2,244

 
$
3,129

The following table presents earned income on derivatives:
 
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
(In millions)
Qualifying hedges:
 
 
 
 
 
 
 
 
Net investment income
 
$
6

 
$
5

 
$
18

 
$
16

Nonqualifying hedges:
 
 
 
 
 
 
 
 
Net derivative gains (losses)
 
34

 
67

 
124

 
253

Policyholder benefits and claims
 
—

 
1

 
—

 
8

Total
 
$
40

 
$
73

 
$
142

 
$
277
Schedule of estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps
The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at: 
 
 
September 30, 2018
 
December 31, 2017
Rating Agency Designation of Referenced Credit Obligations (1)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
 
(Dollars in millions)
Aaa/Aa/A
 
$
10

 
$
677

 
2.4

 
$
12

 
$
558

 
2.8
Baa
 
21

 
1,195

 
5.2

 
28

 
1,295

 
4.7
Ba
 
—

 
—

 
—

 
—

 
25

 
4.5
Total
 
$
31

 
$
1,872

 
4.2

 
$
40

 
$
1,878

 
4.1
__________________
(1)
Includes both single name credit default swaps that may be referenced to the credit of corporations, foreign governments, or state and political subdivisions and credit default swaps referencing indices. The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard & Poor’s Global Ratings (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.
(2)
The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.
Estimated Fair Value of Derivative Assets and Liabilities after Master Netting Agreements and Cash Collateral
The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at: 
 
 
September 30, 2018
 
December 31, 2017
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
(In millions)
Gross estimated fair value of derivatives:
 
 
 
 
 
 
 
 
OTC-bilateral (1)
 
$
1,892

 
$
3,294

 
$
2,222

 
$
3,080

OTC-cleared and Exchange-traded (1), (6)
 
22

 
2

 
69

 
40

Total gross estimated fair value of derivatives (1)
 
1,914

 
3,296

 
2,291

 
3,120

Amounts offset on the consolidated balance sheets
 
—

 
—

 
—

 
—

Estimated fair value of derivatives presented on the consolidated balance sheets (1), (6)
 
1,914

 
3,296

 
2,291

 
3,120

Gross amounts not offset on the consolidated balance sheets:
 
 
 
 
 
 
 
 
Gross estimated fair value of derivatives: (2)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(1,568
)
 
(1,568
)
 
(1,942
)
 
(1,942
)
OTC-cleared and Exchange-traded
 
(1
)
 
(1
)
 
(1
)
 
(1
)
Cash collateral: (3), (4)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(228
)
 
—

 
(247
)
 
—

OTC-cleared and Exchange-traded
 
(20
)
 
—

 
(27
)
 
(39
)
Securities collateral: (5)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(86
)
 
(1,726
)
 
(31
)
 
(1,138
)
OTC-cleared and Exchange-traded
 
—

 
(1
)
 
—

 
—

Net amount after application of master netting agreements and collateral
 
$
11

 
$
—

 
$
43

 
$
—

__________________
(1)
At September 30, 2018 and December 31, 2017, derivative assets included income or (expense) accruals reported in accrued investment income or in other liabilities of $68 million and $47 million, respectively, and derivative liabilities included (income) or expense accruals reported in accrued investment income or in other liabilities of ($8) million and ($9) million, respectively.
(2)
Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.
(3)
Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives is included in cash and cash equivalents, short-term investments or in fixed maturity securities, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.
(4)
The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At September 30, 2018 and December 31, 2017, the Company received excess cash collateral of $39 million and $93 million, respectively, and provided excess cash collateral of $0 and $5 million, respectively, which is not included in the table above due to the foregoing limitation.
(5)
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at September 30, 2018, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At September 30, 2018 and December 31, 2017, the Company received excess securities collateral with an estimated fair value of $69 million and $337 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At September 30, 2018 and December 31, 2017, the Company provided excess securities collateral with an estimated fair value of $307 million and $471 million, respectively, for its OTC-bilateral derivatives, and $79 million and $426 million, respectively, for its OTC-cleared derivatives, and $105 million and $118 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
(6)
Effective January 16, 2018, the London Clearing House (“LCH”) amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments impacted the accounting treatment of the Company’s centrally cleared derivatives, for which the LCH serves as the central clearing party.
Estimated Fair Value of Derivative Assets and Liabilities after Master Netting Agreements and Cash Collateral
The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at: 
 
 
September 30, 2018
 
December 31, 2017
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
(In millions)
Gross estimated fair value of derivatives:
 
 
 
 
 
 
 
 
OTC-bilateral (1)
 
$
1,892

 
$
3,294

 
$
2,222

 
$
3,080

OTC-cleared and Exchange-traded (1), (6)
 
22

 
2

 
69

 
40

Total gross estimated fair value of derivatives (1)
 
1,914

 
3,296

 
2,291

 
3,120

Amounts offset on the consolidated balance sheets
 
—

 
—

 
—

 
—

Estimated fair value of derivatives presented on the consolidated balance sheets (1), (6)
 
1,914

 
3,296

 
2,291

 
3,120

Gross amounts not offset on the consolidated balance sheets:
 
 
 
 
 
 
 
 
Gross estimated fair value of derivatives: (2)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(1,568
)
 
(1,568
)
 
(1,942
)
 
(1,942
)
OTC-cleared and Exchange-traded
 
(1
)
 
(1
)
 
(1
)
 
(1
)
Cash collateral: (3), (4)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(228
)
 
—

 
(247
)
 
—

OTC-cleared and Exchange-traded
 
(20
)
 
—

 
(27
)
 
(39
)
Securities collateral: (5)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(86
)
 
(1,726
)
 
(31
)
 
(1,138
)
OTC-cleared and Exchange-traded
 
—

 
(1
)
 
—

 
—

Net amount after application of master netting agreements and collateral
 
$
11

 
$
—

 
$
43

 
$
—

__________________
(1)
At September 30, 2018 and December 31, 2017, derivative assets included income or (expense) accruals reported in accrued investment income or in other liabilities of $68 million and $47 million, respectively, and derivative liabilities included (income) or expense accruals reported in accrued investment income or in other liabilities of ($8) million and ($9) million, respectively.
(2)
Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.
(3)
Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives is included in cash and cash equivalents, short-term investments or in fixed maturity securities, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.
(4)
The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At September 30, 2018 and December 31, 2017, the Company received excess cash collateral of $39 million and $93 million, respectively, and provided excess cash collateral of $0 and $5 million, respectively, which is not included in the table above due to the foregoing limitation.
(5)
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at September 30, 2018, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At September 30, 2018 and December 31, 2017, the Company received excess securities collateral with an estimated fair value of $69 million and $337 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At September 30, 2018 and December 31, 2017, the Company provided excess securities collateral with an estimated fair value of $307 million and $471 million, respectively, for its OTC-bilateral derivatives, and $79 million and $426 million, respectively, for its OTC-cleared derivatives, and $105 million and $118 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
(6)
Effective January 16, 2018, the London Clearing House (“LCH”) amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments impacted the accounting treatment of the Company’s centrally cleared derivatives, for which the LCH serves as the central clearing party.
Derivative Instruments, Gain (Loss) [Line Items]  
Derivatives, Methods of Accounting, Derivatives Not Designated or Qualifying as Hedges [Policy Text Block]
The following tables present the amount and location of gains (losses) recognized for derivatives and gains (losses) pertaining to hedged items presented in net derivative gains (losses):
 
Net Derivative Gains (Losses) Recognized for Derivatives (1)
 
Net Derivative Gains (Losses) Recognized for Hedged Items (2)
 
Net Investment Income (3)
 
Policyholder Benefits and Claims (4)
 
Amount of Gains (Losses) deferred in AOCI
 
(In millions)
Three Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
(2
)
 
$
2

 
$
—

 
$
—

 
$
—

Total fair value hedges
(2
)
 
2

 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
45

 
—

 
1

 
—

 
(3
)
Foreign currency exchange rate derivatives
—

 
—

 
—

 
—

 
(4
)
Total cash flow hedges
45

 
—

 
1

 
—

 
(7
)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(281
)
 
—

 
—

 
—

 
—

Foreign currency exchange rate derivatives
2

 
(2
)
 
—

 
—

 
—

Credit derivatives
8

 
—

 
—

 
—

 
—

Equity derivatives
(458
)
 
—

 
—

 
—

 
—

Embedded derivatives
(13
)
 
—

 
—

 
(2
)
 
—

Total non-qualifying hedges
(742
)
 
(2
)
 
—

 
(2
)
 
—

Total
$
(699
)
 
$
—

 
$
1

 
$
(2
)
 
$
(7
)
Three Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
1

 
$
(1
)
 
$
—

 
$
—

 
$
—

Total fair value hedges
1

 
(1
)
 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
—

 
—

 
1

 
—

 
—

Foreign currency exchange rate derivatives
—

 
—

 
—

 
—

 
(50
)
Total cash flow hedges
—

 
—

 
1

 
—

 
(50
)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(81
)
 
—

 
—

 
6

 
—

Foreign currency exchange rate derivatives
(30
)
 
3

 
—

 
—

 
—

Credit derivatives
5

 
—

 
—

 
—

 
—

Equity derivatives
(711
)
 
—

 
—

 
(64
)
 
—

Embedded derivatives
585

 
—

 
—

 
(21
)
 
—

Total non-qualifying hedges
(232
)
 
3

 
—

 
(79
)
 
—

Total
$
(231
)
 
$
2

 
$
1

 
$
(79
)
 
$
(50
)
 
Net Derivative Gains (Losses) Recognized for Derivatives (1)
 
Net Derivative Gains (Losses) Recognized for Hedged Items (2)
 
Net Investment Income (3)
 
Policyholder Benefits and Claims (4)
 
Amount of Gains (Losses) deferred in AOCI
 
(In millions)
Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
(12
)
 
$
12

 
$
—

 
$
—

 
$
—

Total fair value hedges
(12
)
 
12

 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
62

 
—

 
4

 
—

 
(5
)
Foreign currency exchange rate derivatives
(1
)
 
—

 
—

 
—

 
33

Total cash flow hedges
61

 
—

 
4

 
—

 
28

Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(1,255
)
 
—

 
—

 
—

 
—

Foreign currency exchange rate derivatives
17

 
(4
)
 
—

 
—

 
—

Credit derivatives
(2
)
 
—

 
—

 
—

 
—

Equity derivatives
(942
)
 
—

 
—

 
—

 
—

Embedded derivatives
771

 
—

 
—

 
(4
)
 
—

Total non-qualifying hedges
(1,411
)
 
(4
)
 
—

 
(4
)
 
—

Total
$
(1,362
)
 
$
8

 
$
4

 
$
(4
)
 
$
28

Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
2

 
$
(2
)
 
$
—

 
$
—

 
$
—

Total fair value hedges
2

 
(2
)
 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
—

 
—

 
4

 
—

 
1

Foreign currency exchange rate derivatives
9

 
(9
)
 
—

 
—

 
(102
)
Total cash flow hedges
9

 
(9
)
 
4

 
—

 
(101
)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(145
)
 
—

 
—

 
8

 
—

Foreign currency exchange rate derivatives
(72
)
 
(29
)
 
—

 
—

 
—

Credit derivatives
16

 
—

 
—

 
—

 
—

Equity derivatives
(2,123
)
 
—

 
(1
)
 
(341
)
 
—

Embedded derivatives
1,036

 
—

 
—

 
(22
)
 
—

Total non-qualifying hedges
(1,288
)
 
(29
)
 
(1
)
 
(355
)
 
—

Total
$
(1,277
)
 
$
(40
)
 
$
3

 
$
(355
)
 
$
(101
)
______________
(1)
Includes gains (losses) reclassified from AOCI for cash flow hedges.
(2)
Includes foreign currency transaction gains (losses) on hedged items in cash flow and nonqualifying hedging relationships. Hedged items in fair value hedging relationship includes fixed rate liabilities reported in policyholder account balances or future policy benefits and fixed maturity securities. Ineffective portion of the gains (losses) recognized in income is not significant.
(3)
Includes changes in estimated fair value related to economic hedges of equity method investments in joint ventures and gains (losses) reclassified from AOCI for cash flow hedges.
(4)
Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits.
(5)
All components of each derivative's gain or loss were included in the assessment of hedge effectiveness.
In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into net derivative gains (losses). These amounts were $0 for both the three months and nine months ended September 30, 2018, and $0 and $9 million for the three months and nine months ended September 30, 2017, respectively.
There were no hedged forecasted transactions, other than the receipt of payment of variable interest payments, for the nine months ended September 30, 2018. At December 31, 2017, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed two years.
At September 30, 2018 and December 31, 2017, the balance in AOCI associated with cash flow hedges was $194 million and $231 million, respectively.
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block]
The following tables present the amount and location of gains (losses) recognized for derivatives and gains (losses) pertaining to hedged items presented in net derivative gains (losses):
 
Net Derivative Gains (Losses) Recognized for Derivatives (1)
 
Net Derivative Gains (Losses) Recognized for Hedged Items (2)
 
Net Investment Income (3)
 
Policyholder Benefits and Claims (4)
 
Amount of Gains (Losses) deferred in AOCI
 
(In millions)
Three Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
(2
)
 
$
2

 
$
—

 
$
—

 
$
—

Total fair value hedges
(2
)
 
2

 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
45

 
—

 
1

 
—

 
(3
)
Foreign currency exchange rate derivatives
—

 
—

 
—

 
—

 
(4
)
Total cash flow hedges
45

 
—

 
1

 
—

 
(7
)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(281
)
 
—

 
—

 
—

 
—

Foreign currency exchange rate derivatives
2

 
(2
)
 
—

 
—

 
—

Credit derivatives
8

 
—

 
—

 
—

 
—

Equity derivatives
(458
)
 
—

 
—

 
—

 
—

Embedded derivatives
(13
)
 
—

 
—

 
(2
)
 
—

Total non-qualifying hedges
(742
)
 
(2
)
 
—

 
(2
)
 
—

Total
$
(699
)
 
$
—

 
$
1

 
$
(2
)
 
$
(7
)
Three Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
1

 
$
(1
)
 
$
—

 
$
—

 
$
—

Total fair value hedges
1

 
(1
)
 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
—

 
—

 
1

 
—

 
—

Foreign currency exchange rate derivatives
—

 
—

 
—

 
—

 
(50
)
Total cash flow hedges
—

 
—

 
1

 
—

 
(50
)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(81
)
 
—

 
—

 
6

 
—

Foreign currency exchange rate derivatives
(30
)
 
3

 
—

 
—

 
—

Credit derivatives
5

 
—

 
—

 
—

 
—

Equity derivatives
(711
)
 
—

 
—

 
(64
)
 
—

Embedded derivatives
585

 
—

 
—

 
(21
)
 
—

Total non-qualifying hedges
(232
)
 
3

 
—

 
(79
)
 
—

Total
$
(231
)
 
$
2

 
$
1

 
$
(79
)
 
$
(50
)
 
Net Derivative Gains (Losses) Recognized for Derivatives (1)
 
Net Derivative Gains (Losses) Recognized for Hedged Items (2)
 
Net Investment Income (3)
 
Policyholder Benefits and Claims (4)
 
Amount of Gains (Losses) deferred in AOCI
 
(In millions)
Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
(12
)
 
$
12

 
$
—

 
$
—

 
$
—

Total fair value hedges
(12
)
 
12

 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
62

 
—

 
4

 
—

 
(5
)
Foreign currency exchange rate derivatives
(1
)
 
—

 
—

 
—

 
33

Total cash flow hedges
61

 
—

 
4

 
—

 
28

Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(1,255
)
 
—

 
—

 
—

 
—

Foreign currency exchange rate derivatives
17

 
(4
)
 
—

 
—

 
—

Credit derivatives
(2
)
 
—

 
—

 
—

 
—

Equity derivatives
(942
)
 
—

 
—

 
—

 
—

Embedded derivatives
771

 
—

 
—

 
(4
)
 
—

Total non-qualifying hedges
(1,411
)
 
(4
)
 
—

 
(4
)
 
—

Total
$
(1,362
)
 
$
8

 
$
4

 
$
(4
)
 
$
28

Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
2

 
$
(2
)
 
$
—

 
$
—

 
$
—

Total fair value hedges
2

 
(2
)
 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
—

 
—

 
4

 
—

 
1

Foreign currency exchange rate derivatives
9

 
(9
)
 
—

 
—

 
(102
)
Total cash flow hedges
9

 
(9
)
 
4

 
—

 
(101
)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(145
)
 
—

 
—

 
8

 
—

Foreign currency exchange rate derivatives
(72
)
 
(29
)
 
—

 
—

 
—

Credit derivatives
16

 
—

 
—

 
—

 
—

Equity derivatives
(2,123
)
 
—

 
(1
)
 
(341
)
 
—

Embedded derivatives
1,036

 
—

 
—

 
(22
)
 
—

Total non-qualifying hedges
(1,288
)
 
(29
)
 
(1
)
 
(355
)
 
—

Total
$
(1,277
)
 
$
(40
)
 
$
3

 
$
(355
)
 
$
(101
)
______________
(1)
Includes gains (losses) reclassified from AOCI for cash flow hedges.
(2)
Includes foreign currency transaction gains (losses) on hedged items in cash flow and nonqualifying hedging relationships. Hedged items in fair value hedging relationship includes fixed rate liabilities reported in policyholder account balances or future policy benefits and fixed maturity securities. Ineffective portion of the gains (losses) recognized in income is not significant.
(3)
Includes changes in estimated fair value related to economic hedges of equity method investments in joint ventures and gains (losses) reclassified from AOCI for cash flow hedges.
(4)
Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits.
(5)
All components of each derivative's gain or loss were included in the assessment of hedge effectiveness.
In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into net derivative gains (losses). These amounts were $0 for both the three months and nine months ended September 30, 2018, and $0 and $9 million for the three months and nine months ended September 30, 2017, respectively.
There were no hedged forecasted transactions, other than the receipt of payment of variable interest payments, for the nine months ended September 30, 2018. At December 31, 2017, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed two years.
At September 30, 2018 and December 31, 2017, the balance in AOCI associated with cash flow hedges was $194 million and $231 million, respectively.
Components of Net Derivatives Gains (Losses)
The following tables present the amount and location of gains (losses) recognized for derivatives and gains (losses) pertaining to hedged items presented in net derivative gains (losses):
 
Net Derivative Gains (Losses) Recognized for Derivatives (1)
 
Net Derivative Gains (Losses) Recognized for Hedged Items (2)
 
Net Investment Income (3)
 
Policyholder Benefits and Claims (4)
 
Amount of Gains (Losses) deferred in AOCI
 
(In millions)
Three Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
(2
)
 
$
2

 
$
—

 
$
—

 
$
—

Total fair value hedges
(2
)
 
2

 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
45

 
—

 
1

 
—

 
(3
)
Foreign currency exchange rate derivatives
—

 
—

 
—

 
—

 
(4
)
Total cash flow hedges
45

 
—

 
1

 
—

 
(7
)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(281
)
 
—

 
—

 
—

 
—

Foreign currency exchange rate derivatives
2

 
(2
)
 
—

 
—

 
—

Credit derivatives
8

 
—

 
—

 
—

 
—

Equity derivatives
(458
)
 
—

 
—

 
—

 
—

Embedded derivatives
(13
)
 
—

 
—

 
(2
)
 
—

Total non-qualifying hedges
(742
)
 
(2
)
 
—

 
(2
)
 
—

Total
$
(699
)
 
$
—

 
$
1

 
$
(2
)
 
$
(7
)
Three Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
1

 
$
(1
)
 
$
—

 
$
—

 
$
—

Total fair value hedges
1

 
(1
)
 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
—

 
—

 
1

 
—

 
—

Foreign currency exchange rate derivatives
—

 
—

 
—

 
—

 
(50
)
Total cash flow hedges
—

 
—

 
1

 
—

 
(50
)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(81
)
 
—

 
—

 
6

 
—

Foreign currency exchange rate derivatives
(30
)
 
3

 
—

 
—

 
—

Credit derivatives
5

 
—

 
—

 
—

 
—

Equity derivatives
(711
)
 
—

 
—

 
(64
)
 
—

Embedded derivatives
585

 
—

 
—

 
(21
)
 
—

Total non-qualifying hedges
(232
)
 
3

 
—

 
(79
)
 
—

Total
$
(231
)
 
$
2

 
$
1

 
$
(79
)
 
$
(50
)
 
Net Derivative Gains (Losses) Recognized for Derivatives (1)
 
Net Derivative Gains (Losses) Recognized for Hedged Items (2)
 
Net Investment Income (3)
 
Policyholder Benefits and Claims (4)
 
Amount of Gains (Losses) deferred in AOCI
 
(In millions)
Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
(12
)
 
$
12

 
$
—

 
$
—

 
$
—

Total fair value hedges
(12
)
 
12

 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
62

 
—

 
4

 
—

 
(5
)
Foreign currency exchange rate derivatives
(1
)
 
—

 
—

 
—

 
33

Total cash flow hedges
61

 
—

 
4

 
—

 
28

Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(1,255
)
 
—

 
—

 
—

 
—

Foreign currency exchange rate derivatives
17

 
(4
)
 
—

 
—

 
—

Credit derivatives
(2
)
 
—

 
—

 
—

 
—

Equity derivatives
(942
)
 
—

 
—

 
—

 
—

Embedded derivatives
771

 
—

 
—

 
(4
)
 
—

Total non-qualifying hedges
(1,411
)
 
(4
)
 
—

 
(4
)
 
—

Total
$
(1,362
)
 
$
8

 
$
4

 
$
(4
)
 
$
28

Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Fair value hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
$
2

 
$
(2
)
 
$
—

 
$
—

 
$
—

Total fair value hedges
2

 
(2
)
 
—

 
—

 
—

Cash flow hedges (5):
 
 
 
 
 
 
 
 
 
Interest rate derivatives
—

 
—

 
4

 
—

 
1

Foreign currency exchange rate derivatives
9

 
(9
)
 
—

 
—

 
(102
)
Total cash flow hedges
9

 
(9
)
 
4

 
—

 
(101
)
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
Interest rate derivatives
(145
)
 
—

 
—

 
8

 
—

Foreign currency exchange rate derivatives
(72
)
 
(29
)
 
—

 
—

 
—

Credit derivatives
16

 
—

 
—

 
—

 
—

Equity derivatives
(2,123
)
 
—

 
(1
)
 
(341
)
 
—

Embedded derivatives
1,036

 
—

 
—

 
(22
)
 
—

Total non-qualifying hedges
(1,288
)
 
(29
)
 
(1
)
 
(355
)
 
—

Total
$
(1,277
)
 
$
(40
)
 
$
3

 
$
(355
)
 
$
(101
)
______________
(1)
Includes gains (losses) reclassified from AOCI for cash flow hedges.
(2)
Includes foreign currency transaction gains (losses) on hedged items in cash flow and nonqualifying hedging relationships. Hedged items in fair value hedging relationship includes fixed rate liabilities reported in policyholder account balances or future policy benefits and fixed maturity securities. Ineffective portion of the gains (losses) recognized in income is not significant.
(3)
Includes changes in estimated fair value related to economic hedges of equity method investments in joint ventures and gains (losses) reclassified from AOCI for cash flow hedges.
(4)
Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits.
(5)
All components of each derivative's gain or loss were included in the assessment of hedge effectiveness.
Schedule of Derivative Instruments
The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that are in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged. The Company’s collateral agreements require both parties to be fully collateralized, as such, the Company would not be required to post additional collateral as a result of a downgrade in its financial strength rating. OTC-bilateral derivatives that are not subject to collateral agreements are excluded from this table.  
 
 
September 30, 2018
 
December 31, 2017
 
 
(In millions)
Estimated fair value of derivatives in a net liability position (1)
 
$
1,726

 
$
1,138

Estimated Fair Value of Collateral Provided:
 
 
 
 
Fixed maturity securities
 
$
1,999

 
$
1,414

__________________
(1)
After taking into consideration the existence of netting agreements.
Embedded Derivative Financial Instruments [Member]  
Derivative Instruments, Gain (Loss) [Line Items]  
Components of Net Derivatives Gains (Losses)
The following table presents changes in estimated fair value related to embedded derivatives:
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
 
(In millions)
Net derivative gains (losses) (1), (2)
$
(13
)
 
$
585

 
$
771

 
$
1,036

Policyholder benefits and claims
$
(2
)
 
$
(21
)
 
$
(4
)
 
$
(22
)
__________________
(1)
The valuation of direct and assumed guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were ($164) million and ($121) million for the three months and nine months ended September 30, 2018, respectively, and $525 million and $445 million for the three months and nine months ended September 30, 2017, respectively.
(2)
See Note 11 for discussion of related party net derivativ
Schedule of Derivative Instruments
The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:
 
Balance Sheet Location
 
September 30, 2018
 
December 31, 2017
 
 
 
(In millions)
Embedded derivatives within asset host contracts:
 
 
 
 
 
Ceded guaranteed minimum benefits
Premiums, reinsurance and other receivables
 
$
166

 
$
227

Options embedded in debt or equity securities (1)
Investments
 
—

 
(52
)
Embedded derivatives within asset host contracts
 
 
$
166

 
$
175

 
 
 
 
 
 
Embedded derivatives within liability host contracts:
 
 
 
 
 
Direct guaranteed minimum benefits
Policyholder account balances
 
$
337

 
$
1,122

Assumed reinsurance on fixed deferred annuities
Policyholder account balances
 
—

 
1

Assumed guaranteed minimum benefits
Policyholder account balances
 
289

 
437

Fixed annuities with equity indexed returns
Policyholder account balances
 
1,205


674

Embedded derivatives within liability host contracts
 
$
1,831

 
$
2,234