Investments (Tables)

12 Months Ended

Dec. 31, 2019

Available-for-sale Securities Including Securities Pledged [Line Items]

Marketable Securities

Available-for-sale and FVO fixed maturities were as follows as of December 31, 2019:

	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Embedded Derivatives(2)		Fair Value		OTTI(3)(4)
Fixed maturities:
U.S. Treasuries	$	565	$	129	$	3	$	—	$	691	$	—
U.S. Government agencies and authorities	19		—		—		—		19		—
State, municipalities and political subdivisions	747		68		—		—		815		—
U.S. corporate public securities	7,103		941		13		—		8,031		—
U.S. corporate private securities	3,776		306		16		—		4,066		—
Foreign corporate public securities and foreign governments(1)	2,417		265		3		—		2,679		—
Foreign corporate private securities(1)	3,171		205		1		—		3,375		—
Residential mortgage-backed securities	3,685		125		11		11		3,810		2
Commercial mortgage-backed securities	2,381		122		3		—		2,500		—
Other asset-backed securities	1,472		15		13		—		1,474		1
Total fixed maturities, including securities pledged	25,336		2,176		63		11		27,460		3
Less: Securities pledged	749		85		6		—		828		—
Total fixed maturities	$	24,587	$	2,091	$	57	$	11	$	26,632	$	3

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Consolidated Statements of Operations.

⁽³⁾ Represents OTTI reported as a component of Other comprehensive income (loss).

⁽⁴⁾ Amount excludes $194 of net unrealized gains on impaired available-for-sale securities.

Available-for-sale and FVO fixed maturities were as follows as of December 31, 2018:

	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Embedded Derivatives(2)		Fair Value		OTTI(3)(4)
Fixed maturities:
U.S. Treasuries	$	651	$	87	$	—	$	—	$	738	$	—
U.S. Government agencies and authorities	—		—		—		—		—		—
State, municipalities and political subdivisions	754		18		8		—		764		—
U.S. corporate public securities	7,908		288		181		—		8,015		—
U.S. corporate private securities	3,686		73		106		—		3,653		—
Foreign corporate public securities and foreign governments(1)	2,551		69		80		—		2,540		—
Foreign corporate private securities(1)	3,235		37		97		—		3,175		—
Residential mortgage-backed securities	2,966		93		32		9		3,036		3
Commercial mortgage-backed securities	1,917		16		28		—		1,905		—
Other asset-backed securities	1,230		6		28		—		1,208		2
Total fixed maturities, including securities pledged	24,898		687		560		9		25,034		5
Less: Securities pledged	867		45		30		—		882		—
Total fixed maturities	$	24,031	$	642	$	530	$	9	$	24,152	$	5

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Consolidated Statements of Operations.

⁽³⁾ Represents OTTI reported as a component of Other comprehensive income (loss).

⁽⁴⁾ Amount excludes $137 of net unrealized gains on impaired available-for-sale securities.

Investments Classifed by Contractual Maturity Date

The amortized cost and fair value of fixed maturities, including securities pledged, as of December 31, 2019, are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called or prepaid. MBS and Other ABS are shown separately because they are not due at a single maturity date.

	Amortized Cost		Fair Value
Due to mature:
One year or less	$	607	$	615
After one year through five years	3,564		3,728
After five years through ten years	5,672		6,108
After ten years	7,955		9,225
Mortgage-backed securities	6,066		6,310
Other asset-backed securities	1,472		1,474
Fixed maturities, including securities pledged	$	25,336	$	27,460

The investment portfolio is monitored to maintain a diversified portfolio on an ongoing basis. Credit risk is mitigated by monitoring concentrations by issuer, sector and geographic stratification and limiting exposure to any one issuer. 

As of December 31, 2019 and 2018, the Company did not have any investments in a single issuer, other than obligations of the U.S. Government and government agencies, with a carrying value in excess of 10% of the Company's consolidated Shareholder's equity.

U.S. and Foreign Corporate Securities by Industry

The following tables present the composition of the U.S. and foreign corporate securities within the fixed maturity portfolio by industry category as of the dates indicated:

	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Fair Value
December 31, 2019
Communications	$	1,002	$	156	$	—	$	1,158
Financial	2,650		302		—		2,952
Industrial and other companies	7,053		667		11		7,709
Energy	1,675		185		18		1,842
Utilities	2,913		294		1		3,206
Transportation	856		78		2		932
Total	$	16,149	$	1,682	$	32	$	17,799
December 31, 2018
Communications	$	1,139	$	55	$	21	$	1,173
Financial	2,707		101		47		2,761
Industrial and other companies	7,604		152		214		7,542
Energy	1,884		55		81		1,858
Utilities	2,974		80		74		2,980
Transportation	729		14		17		726
Total	$	17,037	$	457	$	454	$	17,040

Schedule of Securities Borrowed Under Securities Lending Transactions

The following table presents borrowings under securities lending transactions by asset class pledged for the dates indicated:

	December 31, 2019(1)(2)		December 31, 2018(1)(2)
U.S. Treasuries	$	109	$	92
U.S. corporate public securities	447		523
Foreign corporate public securities and foreign governments	185		170
Equity Securities	—		1
Payables under securities loan agreements	$	741	$	786

⁽¹⁾ As of December 31, 2019 and December 31, 2018, borrowings under securities lending transactions include cash collateral of $650 and $719, respectively.

⁽²⁾ As of December 31, 2019 and December 31, 2018, borrowings under securities lending transactions include non-cash collateral of $91 and $67, respectively.

Schedule of Unrealized Loss on Investments

Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of December 31, 2019:

	Twelve Months or Less Below Amortized Cost					More Than Twelve Months Below Amortized Cost					Total
	Fair Value		Unrealized Capital Losses			Fair Value		Unrealized Capital Losses			Fair Value		Unrealized Capital Losses
U.S. Treasuries	$	68	$	3		$	12	$	—	*	$	80	$	3
U.S. Government, agencies and authorities	18		—		*	—		—			18		—		*
State, municipalities and political subdivisions	21		—		*	—		—			21		—		*
U.S. corporate public securities	97		3			131		10			228		13
U.S. corporate private securities	75		—		*	134		16			209		16
Foreign corporate public securities and foreign governments	6		—		*	53		3			59		3
Foreign corporate private securities	21		—		*	56		1			77		1
Residential mortgage-backed	535		6			139		5			674		11
Commercial mortgage-backed	331		3			18		—		*	349		3
Other asset-backed	217		2			500		11			717		13
Total	$	1,389	$	17		$	1,043	$	46		$	2,432	$	63
Total number of securities in an unrealized loss position	289					278					567
*Less than $1.

Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of December 31, 2018:

	Twelve Months or Less Below Amortized Cost				More Than Twelve Months Below Amortized Cost				Total
	Fair Value		Unrealized Capital Losses		Fair Value		Unrealized Capital Losses		Fair Value		Unrealized Capital Losses
U.S. Treasuries	$	—	$	—	$	15	$	—	$	15	$	—	*
State, municipalities and political subdivisions	191		3		88		5		279		8
U.S. corporate public securities	3,060		131		535		50		3,595		181
U.S. corporate private securities	1,502		40		579		66		2,081		106
Foreign corporate public securities and foreign governments	1,159		54		169		26		1,328		80
Foreign corporate private securities	1,504		77		221		20		1,725		97
Residential mortgage-backed	560		11		412		21		972		32
Commercial mortgage-backed	865		16		312		12		1,177		28
Other asset-backed	892		27		61		1		953		28
Total	$	9,733	$	359	$	2,392	$	201	$	12,125	$	560
Total number of securities in an unrealized loss position	1,894				550				2,444
*Less than $1.

Other than Temporary Impairment, Credit Losses Recognized in Earnings

Evaluating Securities for Other-Than-Temporary Impairments

The Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, including fixed maturity securities in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily impaired.

The following table identifies the Company's impairments included in the Consolidated Statements of Operations, excluding impairments included in Other comprehensive income (loss) by type for the periods indicated:

	Year Ended December 31,
	2019				2018				2017
	Impairment			No. of Securities	Impairment			No. of Securities	Impairment			No. of Securities
State municipalities, and political subdivisions	$	—	*	6	$	—		—	$	—		—
U.S. corporate public securities	11			25	6			2	—		*	3
U.S. corporate private securities	1			16	—			—	—			—
Foreign corporate public securities and foreign governments(1)	3			15	2			3	2			3
Foreign corporate private securities(1)	18			11	9			1	9			2
Residential mortgage-backed	4			71	3			58	1			17
Commercial mortgage-backed	—		*	18	—		*	1	—		*	1
Other asset-backed	3			73	—		*	1	—			—
Total	$	40		235	$	20		66	$	12		26
Credit Impairments	$	20			$	14			$	12
Intent Impairments	$	20			$	6			$	—
(1) Primarily U.S. dollar denominated.

*Less than $1.

The Company may sell securities during the period in which fair value has declined below amortized cost for fixed maturities. In certain situations, new factors, including changes in the business environment, can change the Company's previous intent to continue holding a security. Accordingly, these factors may lead the Company to record additional intent related capital losses.

The following table presents the amount of credit impairments on fixed maturities for which a portion of the OTTI loss was recognized in Other comprehensive income (loss) and the corresponding changes in such amounts for the periods indicated:

	Year Ended December 31,
	2019		2018		2017
Balance at January 1	$	5	$	16	$	9
Additional credit impairments:
On securities not previously impaired	—		—		9
On securities previously impaired	—		1		—
Reductions:
Securities intent impaired	—		12		—
Increase in cash flows	—		—		—
Securities sold, matured, prepaid or paid down	1		—		2
Balance at December 31	$	4	$	5	$	16

Schedule of Mortgage Loans Real Estate and Valuation Allowance

The following table summarizes the Company's investment in mortgage loans as of the dates indicated:

	December 31, 2019						December 31, 2018
	Impaired		Non Impaired		Total		Impaired		Non Impaired			Total
Commercial mortgage loans	$	4	$	4,660	$	4,664	$	4	$	4,915		$	4,919
Collective valuation allowance for losses	—		—		—		N/A		(1		)	(1		)
Total net commercial mortgage loans	$	4	$	4,660	$	4,664	$	4	$	4,914		$	4,918

N/A - Not Applicable

There were two impairments taken of $3 on the mortgage loan portfolio for the year ended December 31, 2019. There were no impairments taken on the mortgage loan portfolio for the year ended December 31, 2018.

The following table summarizes the activity in the allowance for losses for commercial mortgage loans for the periods indicated:

	December 31, 2019			December 31, 2018
Collective valuation allowance for losses, balance at January 1	$	1		$	1
Addition to (reduction of) allowance for losses	(1		)	—
Collective valuation allowance for losses, end of period	$	—		$	1

Impaired Financing Receivables

The carrying values and unpaid principal balances of impaired mortgage loans were as follows as of the dates indicated:

	December 31, 2019		December 31, 2018
Impaired loans without allowances for losses	$	4	$	4
Less: Allowances for losses on impaired loans	—		—
Impaired loans, net	$	4	$	4
Unpaid principal balance of impaired loans	$	5	$	5

As of December 31, 2019 and 2018, the Company did not have any impaired loans with allowances for losses.

The following table presents information on the average investment during the period in impaired loans and interest income recognized on impaired and troubled debt restructured loans for the periods indicated:

	Year Ended December 31,
	2019		2018		2017
Impaired loans, average investment during the period (amortized cost)(1)	$	9	$	4	$	4
Interest income recognized on impaired loans, on an accrual basis(1)	1		—		—
Interest income recognized on impaired loans, on a cash basis(1)	1		—		—
Interest income recognized on troubled debt restructured loans, on an accrual basis	—		—		—

⁽¹⁾ Includes amounts for Troubled debt restructured loans.

Loans Receivable, Grouped by Loan to Value and Debt Service Coverage Ratio

	Recorded Investment
	Debt Service Coverage Ratios
	> 1.5x		>1.25x - 1.5x		>1.0x - 1.25x		< 1.0x		Commercial mortgage loans secured by land or construction loans		Total		% of Total
December 31, 2019 (1)
Loan-to-Value Ratios:
0% - 50%	$	359	$	12	$	9	$	—	$	—	$	380	8.1	%
>50% - 60%	1,090		45		10		28		—		1,173		25.2	%
>60% - 70%	1,774		432		253		93		—		2,552		54.7	%
>70% - 80%	282		84		74		69		—		509		10.9	%
>80% and above	30		14		—		6		—		50		1.1	%
Total	$	3,535	$	587	$	346	$	196	$	—	$	4,664	100.0	%
(1) Balances do not include collective valuation allowance for losses.
	Recorded Investment
	Debt Service Coverage Ratios
	> 1.5x		>1.25x - 1.5x		>1.0x - 1.25x		< 1.0x		Commercial mortgage loans secured by land or construction loans		Total		% of Total
December 31, 2018 (1)
Loan-to-Value Ratios:
0% - 50%	$	284	$	24	$	23	$	—	$	—	$	331	6.7	%
>50% - 60%	1,133		40		11		—		—		1,184		24.1	%
>60% - 70%	2,070		328		503		34		26		2,961		60.2	%
>70% - 80%	213		87		66		19		4		389		7.9	%
>80% and above	18		5		10		—		21		54		1.1	%
Total	$	3,718	$	484	$	613	$	53	$	51	$	4,919	100.0	%

⁽¹⁾ Balances do not include collective valuation allowance for losses.

Mortgage Loans by Geographic Location of Collateral

Properties collateralizing mortgage loans are geographically dispersed throughout the United States, as well as diversified by property type, as reflected in the following tables as of the dates indicated:

	December 31, 2019				December 31, 2018
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
Commercial Mortgage Loans by U.S. Region:
Pacific	$	944	20.2	%	$	994	20.2	%
South Atlantic	966		20.7	%	1,011		20.5	%
Middle Atlantic	1,019		21.9	%	1,039		21.2	%
West South Central	537		11.5	%	566		11.5	%
Mountain	442		9.5	%	458		9.3	%
East North Central	383		8.2	%	465		9.5	%
New England	84		1.8	%	75		1.5	%
West North Central	212		4.5	%	258		5.2	%
East South Central	77		1.7	%	53		1.1	%
Total Commercial mortgage loans	$	4,664	100.0	%	$	4,919	100.0	%

 

	December 31, 2019				December 31, 2018
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
Commercial Mortgage Loans by Property Type:
Retail	$	1,198	25.7	%	$	1,335	27.2	%
Industrial	1,216		26.2	%	1,323		26.9	%
Apartments	1,185		25.4	%	1,104		22.4	%
Office	697		14.9	%	791		16.1	%
Hotel/Motel	127		2.7	%	111		2.3	%
Mixed Use	44		0.9	%	46		0.9	%
Other	197		4.2	%	209		4.2	%
Total Commercial mortgage loans	$	4,664	100.0	%	$	4,919	100.0	%

Net Investment Income

The following table summarizes Net investment income for the periods indicated:

	Year Ended December 31,
	2019		2018		2017
Fixed maturities	$	1,432	$	1,363	$	1,302
Equity securities	6		5		4
Mortgage loans on real estate	224		220		211
Policy loans	7		9		10
Short-term investments and cash equivalents	3		3		1
Other	91		95		60
Gross investment income	1,763		1,695		1,588
Less: investment expenses	74		72		68
Net investment income	$	1,689	$	1,623	$	1,520

Realized Gain (Loss) on Investments

Net realized capital gains (losses) were as follows for the periods indicated:

	Year Ended December 31,
	2019			2018			2017
Fixed maturities, available-for-sale, including securities pledged	$	11		$	(69	)	$	(29	)
Fixed maturities, at fair value option	(47		)	(227		)	(226		)
Equity securities	(16		)	(4		)	—
Derivatives	(82		)	(36		)	9
Embedded derivatives - fixed maturities	2			(4		)	(5		)
Guaranteed benefit derivatives	(11		)	94			55
Other investments	(1		)	4			(4		)
Net realized capital gains (losses)	$	(144	)	$	(242	)	$	(200	)

For the years ended December 31, 2019 and 2018, the change in fair value of equity securities still held as of December 31, 2019 and 2018 was $(16) and $(4), respectively.

Gain (Loss) on Investments

Proceeds from the sale of fixed maturities, available-for-sale, and equity securities and the related gross realized gains and losses, before tax were as follows for the periods indicated:

	Year Ended December 31,
	2019		2018		2017
Proceeds on sales	$	2,418	$	2,498	$	2,916
Gross gains	30		14		30
Gross losses	25		50		39