| Investments | 6. Investments Fixed Maturity and Equity Securities Available-for-Sale Fixed Maturity and Equity Securities Available-for-Sale by Sector The following table presents the fixed maturity and equity securities available-for-sale (“AFS”) by sector. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities and non-redeemable preferred stock is reported within equity securities. Included within fixed maturity securities are structured securities including residential mortgage-backed securities (“RMBS”), asset-backed securities (“ABS”) and commercial mortgage-backed securities (“CMBS”) (collectively, “Structured Securities”). June 30, 2016 December 31, 2015 Cost or Amortized Cost Gross Unrealized Estimated Fair Value Cost or Amortized Cost Gross Unrealized Estimated Fair Value Gains Temporary Losses OTTI Losses Gains Temporary Losses OTTI Losses (In millions) Fixed maturity securities: U.S. corporate $ 95,218 $ 10,302 $ 905 $ — $ 104,615 $ 96,466 $ 6,583 $ 2,255 $ — $ 100,794 U.S. government and agency 59,591 10,167 21 — 69,737 56,499 5,373 226 — 61,646 Foreign corporate 56,813 3,865 1,466 — 59,212 56,003 3,019 1,822 2 57,198 Foreign government 52,293 10,113 145 — 62,261 45,451 5,269 221 — 50,499 RMBS 43,223 1,790 364 51 44,598 37,914 1,366 424 59 38,797 State and political subdivision 14,403 3,024 11 6 17,410 13,723 1,795 67 10 15,441 ABS 16,689 141 309 3 16,518 14,498 131 229 6 14,394 CMBS (1) 12,591 660 95 (1 ) 13,157 12,410 347 125 (1 ) 12,633 Total fixed maturity securities $ 350,821 $ 40,062 $ 3,316 $ 59 $ 387,508 $ 332,964 $ 23,883 $ 5,369 $ 76 $ 351,402 Equity securities: Common stock $ 2,013 $ 431 $ 18 $ — $ 2,426 $ 1,962 $ 397 $ 107 $ — $ 2,252 Non-redeemable preferred stock 901 70 64 — 907 1,035 85 51 — 1,069 Total equity securities $ 2,914 $ 501 $ 82 $ — $ 3,333 $ 2,997 $ 482 $ 158 $ — $ 3,321 __________________ (1) The noncredit loss component of other-than-temporary impairment (“OTTI”) losses for CMBS was in an unrealized gain position of $1 million at both June 30, 2016 and December 31, 2015 , due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “— Net Unrealized Investment Gains (Losses).” The Company held non-income producing fixed maturity securities with an estimated fair value of $115 million and $54 million with unrealized gains (losses) of $6 million and $12 million at June 30, 2016 and December 31, 2015 , respectively. Maturities of Fixed Maturity Securities The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at June 30, 2016 : Due in One Year or Less Due After One Year Through Five Years Due After Five Years Through Ten Years Due After Ten Years Structured Securities Total Fixed Maturity Securities (In millions) Amortized cost $ 13,404 $ 80,755 $ 69,842 $ 114,317 $ 72,503 $ 350,821 Estimated fair value $ 13,499 $ 85,064 $ 74,476 $ 140,196 $ 74,273 $ 387,508 Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. Structured Securities are shown separately, as they are not due at a single maturity. Continuous Gross Unrealized Losses for Fixed Maturity and Equity Securities AFS by Sector The following table presents the estimated fair value and gross unrealized losses of fixed maturity and equity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position. June 30, 2016 December 31, 2015 Less than 12 Months Equal to or Greater than 12 Months Less than 12 Months Equal to or Greater than 12 Months Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses (Dollars in millions) Fixed maturity securities: U.S. corporate $ 7,932 $ 394 $ 5,581 $ 511 $ 27,526 $ 1,629 $ 3,762 $ 626 U.S. government and agency 1,026 3 164 18 19,628 222 298 4 Foreign corporate 8,135 585 6,477 881 14,447 911 5,251 913 Foreign government 1,298 83 807 62 3,530 166 429 55 RMBS 5,221 183 3,033 232 13,467 287 2,431 196 State and political subdivision 172 3 89 14 1,618 55 168 22 ABS 5,136 176 4,555 136 7,329 124 2,823 111 CMBS 900 45 982 49 4,876 81 637 43 Total fixed maturity securities $ 29,820 $ 1,472 $ 21,688 $ 1,903 $ 92,421 $ 3,475 $ 15,799 $ 1,970 Equity securities: Common stock $ 114 $ 18 $ 7 $ — $ 203 $ 105 $ 20 $ 2 Non-redeemable preferred stock 50 6 168 58 79 2 200 49 Total equity securities $ 164 $ 24 $ 175 $ 58 $ 282 $ 107 $ 220 $ 51 Total number of securities in an unrealized loss position 2,783 1,965 6,366 1,489 Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities As described more fully in Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2015 Annual Report, the Company performs a regular evaluation of all investment classes for impairment, including fixed maturity securities, equity securities and perpetual hybrid securities, in accordance with its impairment policy, in order to evaluate whether such investments are other-than-temporarily impaired. Current Period Evaluation Based on the Company’s current evaluation of its AFS securities in an unrealized loss position in accordance with its impairment policy, and the Company’s current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company concluded that these securities were not other-than-temporarily impaired at June 30, 2016 . Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, collateral valuation, interest rates and credit spreads. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods. Gross unrealized losses on fixed maturity securities decreased $2.0 billion during the six months ended June 30, 2016 to $3.4 billion . The decrease in gross unrealized losses for the six months ended June 30, 2016 was primarily attributable to a decrease in interest rates and, to a lesser extent, narrowing credit spreads and the impact of strengthening foreign currencies on non-functional currency denominated fixed maturity securities. At June 30, 2016 , $418 million of the total $3.4 billion of gross unrealized losses were from 129 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater. Investment Grade Fixed Maturity Securities Of the $418 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $228 million , or 55% , were related to gross unrealized losses on 60 investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads and, with respect to fixed-rate fixed maturity securities, rising interest rates since purchase. Below Investment Grade Fixed Maturity Securities Of the $418 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $190 million , or 45% , were related to gross unrealized losses on 69 below investment grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related to U.S. and foreign corporate securities (primarily industrial securities) and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainties including concerns over lower oil prices in the energy sector. Management evaluates U.S. and foreign corporate securities based on factors such as expected cash flows and the financial condition and near-term and long-term prospects of the issuers. Equity Securities Gross unrealized losses on equity securities decreased $76 million during the six months ended June 30, 2016 to $82 million . Of the $82 million , $49 million were from seven securities with gross unrealized losses of 20% or more of cost for 12 months or greater. Of the $49 million , 63% were rated A or better, and all were from financial services industry investment grade non-redeemable preferred stock. Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at: June 30, 2016 December 31, 2015 Carrying Value % of Total Carrying Value % of Total (Dollars in millions) Mortgage loans: Commercial $ 45,165 65.1 % $ 44,012 65.6 % Agricultural 13,434 19.4 13,188 19.6 Residential 10,659 15.4 9,734 14.5 Subtotal (1) 69,258 99.9 66,934 99.7 Valuation allowances (467 ) (0.7 ) (318 ) (0.5 ) Subtotal mortgage loans, net 68,791 99.2 66,616 99.2 Residential — FVO 449 0.6 314 0.5 Commercial mortgage loans held by CSEs — FVO 159 0.2 172 0.3 Total mortgage loans, net $ 69,399 100.0 % $ 67,102 100.0 % __________________ (1) Purchases of mortgage loans were $1.2 billion and $1.4 billion for the three months and six months ended June 30, 2016 , respectively, and $785 million and $2.2 billion for the three months and six months ended June 30, 2015 , respectively. See “— Variable Interest Entities” for discussion of consolidated securitization entities (“CSEs”). I nformation on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on residential — FVO and commercial mortgage loans held by CSEs — FVO is presented in Note 8 . The Company elects the FVO for certain mortgage loans and related long-term debt that are managed on a total return basis. Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment Mortgage loans by portfolio segment, by method of evaluation of credit loss, impaired mortgage loans including those modified in a troubled debt restructuring, and the related valuation allowances, were as follows at: Evaluated Individually for Credit Losses Evaluated Collectively for Credit Losses Impaired Loans Impaired Loans with a Valuation Allowance Impaired Loans without a Valuation Allowance Unpaid Principal Balance Recorded Investment Valuation Unpaid Principal Balance Recorded Recorded Valuation Carrying (In millions) June 30, 2016 Commercial $ 176 $ 157 $ 143 $ 12 $ 12 $ 44,996 $ 224 $ 26 Agricultural 16 13 1 39 38 13,383 40 50 Residential — — — 205 189 10,470 59 189 Total $ 192 $ 170 $ 144 $ 256 $ 239 $ 68,849 $ 323 $ 265 December 31, 2015 Commercial $ — $ — $ — $ 57 $ 57 $ 43,955 $ 217 $ 57 Agricultural 49 47 3 22 21 13,120 39 65 Residential — — — 141 131 9,603 59 131 Total $ 49 $ 47 $ 3 $ 220 $ 209 $ 66,678 $ 315 $ 253 The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $184 million , $52 million and $175 million , respectively, for the three months ended June 30, 2016 ; and $142 million , $57 million and $160 million , respectively, for the six months ended June 30, 2016 . The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $160 million , $64 million and $70 million , respectively, for the three months ended June 30, 2015 ; and $165 million , $63 million and $59 million , respectively, for the six months ended June 30, 2015 . Valuation Allowance Rollforward by Portfolio Segment The changes in the valuation allowance, by portfolio segment, were as follows: Six Months 2016 2015 Commercial Agricultural Residential Total Commercial Agricultural Residential Total (In millions) Balance, beginning of period $ 217 $ 42 $ 59 $ 318 $ 224 $ 39 $ 42 $ 305 Provision (release) 150 1 7 158 4 2 23 29 Charge-offs, net of recoveries — (2 ) (7 ) (9 ) — — (9 ) (9 ) Balance, end of period $ 367 $ 41 $ 59 $ 467 $ 228 $ 41 $ 56 $ 325 Credit Quality of Commercial Mortgage Loans The credit quality of commercial mortgage loans was as follows at: Recorded Investment Estimated % of Total Debt Service Coverage Ratios % of Total > 1.20x 1.00x - 1.20x < 1.00x Total (Dollars in millions) June 30, 2016 Loan-to-value ratios: Less than 65% $ 39,346 $ 1,095 $ 670 $ 41,111 91.0 % $ 43,055 91.6 % 65% to 75% 3,330 76 171 3,577 7.9 3,627 7.7 76% to 80% 26 — 2 28 0.1 25 0.1 Greater than 80% 384 53 12 449 1.0 295 0.6 Total $ 43,086 $ 1,224 $ 855 $ 45,165 100 % $ 47,002 100 % December 31, 2015 Loan-to-value ratios: Less than 65% $ 38,163 $ 1,063 $ 544 $ 39,770 90.4 % $ 40,921 90.7 % 65% to 75% 3,270 138 76 3,484 7.9 3,451 7.7 76% to 80% — — — — — — — Greater than 80% 381 140 237 758 1.7 732 1.6 Total $ 41,814 $ 1,341 $ 857 $ 44,012 100.0 % $ 45,104 100.0 % Credit Quality of Agricultural Mortgage Loans The credit quality of agricultural mortgage loans was as follows at: June 30, 2016 December 31, 2015 Recorded Investment % of Total Recorded Investment % of Total (Dollars in millions) Loan-to-value ratios: Less than 65% $ 12,711 94.6 % $ 12,399 94.0 % 65% to 75% 656 4.9 710 5.4 76% to 80% 20 0.1 21 0.2 Greater than 80% 47 0.4 58 0.4 Total $ 13,434 100.0 % $ 13,188 100.0 % The estimated fair value of agricultural mortgage loans was $13.9 billion and $13.5 billion at June 30, 2016 and December 31, 2015 , respectively. Credit Quality of Residential Mortgage Loans The credit quality of residential mortgage loans was as follows at: June 30, 2016 December 31, 2015 Recorded Investment % of Total Recorded Investment % of Total (Dollars in millions) Performance indicators: Performing $ 10,326 96.9 % $ 9,408 96.7 % Nonperforming 333 3.1 326 3.3 Total $ 10,659 100.0 % $ 9,734 100.0 % The estimated fair value of residential mortgage loans was $11.0 billion and $9.9 billion at June 30, 2016 and December 31, 2015 , respectively. Past Due and Interest Accrual Status of Mortgage Loans The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both June 30, 2016 and December 31, 2015 . The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days and agricultural mortgage loans — 90 days. The past due and accrual status of mortgage loans at recorded investment, prior to valuation allowances, by portfolio segment, were as follows at: Past Due Nonaccrual Status June 30, 2016 December 31, 2015 June 30, 2016 December 31, 2015 (In millions) Commercial $ — $ 2 $ — $ — Agricultural 118 103 39 46 Residential 333 326 320 318 Total $ 451 $ 431 $ 359 $ 364 Mortgage Loans Modified in a Troubled Debt Restructuring During both the three months and six months ended June 30, 2016 and 2015 , the Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring. Cash Equivalents The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $7.9 billion and $7.5 billion at June 30, 2016 and December 31, 2015 , respectively. Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity and equity securities AFS and the effect on DAC, VOBA, deferred sales inducements (“DSI”), future policy benefits and the policyholder dividend obligation, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI. The components of net unrealized investment gains (losses), included in AOCI, were as follows: June 30, 2016 December 31, 2015 (In millions) Fixed maturity securities $ 36,633 $ 18,164 Fixed maturity securities with noncredit OTTI losses included in AOCI (59 ) (76 ) Total fixed maturity securities 36,574 18,088 Equity securities 558 422 Derivatives 3,766 2,350 Other 333 287 Subtotal 41,231 21,147 Amounts allocated from: Future policy benefits (4,410 ) (163 ) DAC and VOBA related to noncredit OTTI losses recognized in AOCI (2 ) — DAC, VOBA and DSI (2,380 ) (1,273 ) Policyholder dividend obligation (3,343 ) (1,783 ) Subtotal (10,135 ) (3,219 ) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI 23 27 Deferred income tax benefit (expense) (10,473 ) (6,151 ) Net unrealized investment gains (losses) 20,646 11,804 Net unrealized investment gains (losses) attributable to noncontrolling interests (11 ) (31 ) Net unrealized investment gains (losses) attributable to MetLife, Inc. $ 20,635 $ 11,773 The changes in fixed maturity securities with noncredit OTTI losses included in AOCI were as follows: Six Months Year (In millions) Balance, beginning of period $ (76 ) $ (112 ) Noncredit OTTI losses and subsequent changes recognized 6 6 Securities sold with previous noncredit OTTI loss 23 125 Subsequent changes in estimated fair value (12 ) (95 ) Balance, end of period $ (59 ) $ (76 ) The changes in net unrealized investment gains (losses) were as follows: Six Months (In millions) Balance, beginning of period $ 11,773 Fixed maturity securities on which noncredit OTTI losses have been recognized 17 Unrealized investment gains (losses) during the period 20,067 Unrealized investment gains (losses) relating to: Future policy benefits (4,247 ) DAC and VOBA related to noncredit OTTI losses recognized in AOCI (2 ) DAC, VOBA and DSI (1,107 ) Policyholder dividend obligation (1,560 ) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI (4 ) Deferred income tax benefit (expense) (4,322 ) Net unrealized investment gains (losses) 20,615 Net unrealized investment gains (losses) attributable to noncontrolling interests 20 Balance, end of period $ 20,635 Change in net unrealized investment gains (losses) $ 8,842 Change in net unrealized investment gains (losses) attributable to noncontrolling interests 20 Change in net unrealized investment gains (losses) attributable to MetLife, Inc. $ 8,862 Concentrations of Credit Risk Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, were in fixed income securities of the Japanese government and its agencies with an estimated fair value of $29.0 billion and $20.9 billion at June 30, 2016 and December 31, 2015 , respectively. The Company’s investment in fixed maturity and equity securities to counterparties that primarily conduct business in Japan, including Japan government and agency fixed maturity securities, was $33.5 billion and $25.4 billion at June 30, 2016 and December 31, 2015 , respectively. Securities Lending Elements of the securities lending program are presented below at: June 30, 2016 December 31, 2015 (In millions) Securities on loan: (1) Amortized cost $ 26,471 $ 27,223 Estimated fair value $ 31,392 $ 29,646 Cash collateral on deposit from counterparties (2) $ 32,006 $ 30,197 Security collateral on deposit from counterparties (3) $ 198 $ 50 Reinvestment portfolio — estimated fair value $ 32,330 $ 30,258 __________________ (1) Included within fixed maturity securities, short-term investments and cash equivalents. At June 30, 2016 , both amortized cost and estimated fair value also included $106 million , at estimated fair value, of securities which are not reflected on the consolidated financial statements. (2) Included within payables for collateral under securities loaned and other transactions. (3) Security collateral on deposit from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements. The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at: June 30, 2016 Remaining Tenor of Securities Lending Agreements Open (1) 1 Month or Less 1 to 6 Months Total % of Total (Dollars in millions) Cash collateral liability by loaned security type: U.S. government and agency $ 8,379 $ 9,517 $ 11,514 $ 29,410 91.9 % Agency RMBS — — 1,265 1,265 4.0 Foreign government — 911 — 911 2.8 U.S. corporate 7 401 — 408 1.3 Foreign corporate — 12 — 12 — Total $ 8,386 $ 10,841 $ 12,779 $ 32,006 100 % December 31, 2015 Remaining Tenor of Securities Lending Agreements Open (1) 1 Month or Less 1 to 6 Months Total % of Total (Dollars in millions) Cash collateral liability by loaned security type: U.S. government and agency $ 10,116 $ 11,157 $ 5,986 $ 27,259 90.3 % Agency RMBS — 951 600 1,551 5.1 Foreign government 2 510 486 998 3.3 U.S. corporate 9 380 — 389 1.3 Foreign corporate — — — — — Total $ 10,127 $ 12,998 $ 7,072 $ 30,197 100 % __________________ (1) The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral. If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at June 30, 2016 was $8.2 billion , over 99% of which were U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including U.S. government and agency, agency RMBS, ABS, short-term investments and U.S. corporate securities) with 65% invested in U.S. government and agency securities, agency RMBS, short-term investments, or held in cash and cash equivalents. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company. Repurchase Agreement Transactions The Company participates in short-term repurchase agreements and reverse repurchase agreements with unaffiliated financial institutions. Under these agreements, the Company lends fixed maturity securities and contemporaneously borrows other fixed maturity securities (e.g., repurchase and reverse repurchase, respectively). The Company obtains cash collateral in an amount greater than or equal to 95% of the estimated fair value of the securities loaned, and pledges cash collateral in an amount generally equal to 98% of the estimated fair value of the borrowed securities at the inception of the transaction. The Company monitors the estimated fair value of the securities loaned and borrowed on a daily basis with additional collateral obtained as necessary throughout the duration of the transaction. The Company accounted for these transactions as collateralized borrowing and lending. The amount of fixed maturity securities lent and borrowed, at estimated fair value, was $320 million and $308 million , respectively, at June 30, 2016 . There were no such transactions outstanding as of December 31, 2015 . Securities loaned under such transactions may be sold or re-pledged by the transferee. Securities borrowed under such transactions may be re-pledged and are not reflected on the consolidated financial statements. The amount of borrowed securities which were re-pledged was $106 million , at estimated fair value, at June 30, 2016 . The Company has elected to offset amounts recognized as receivables and payables resulting from these transactions. The gross amounts of the receivables and payables related to these transactions at June 30, 2016 were both $300 million . After the effect of offsetting of $300 million , the net amount presented on the consolidated balance sheet at June 30, 2016 was a liability of less than $1 million . Amounts owed to and due from counterparties may be settled in cash or offset, in accordance with the agreements. Cash inflows and outflows for cash settlements are reported on the consolidated statements of cash flows. At June 30, 2016 , all $300 million of payables from repurchase agreements had a remaining tenor of one to six months and were loans of U.S. and foreign corporate securities. See Note 7 for information regarding the estimated fair value of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral. Invested Assets on Deposit, Held in Trust and Pledged as Collateral Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value at: June 30, 2016 December 31, 2015 (In millions) Invested assets on deposit (regulatory deposits) $ 10,353 $ 9,089 Invested assets held in trust (collateral financing arrangements and reinsurance agreements) 11,767 10,443 Invested assets pledged as collateral (1) 28,606 23,145 Total invested assets on deposit, held in trust and pledged as collateral $ 50,726 $ 42,677 __________________ (1) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Notes 4 and 12 of the Notes to the Consolidated Financial Statements included in the 2015 Annual Report), collateral financing arrangements (see Note 13 of the Notes to the Consolidated Financial Statements included in the 2015 Annual Report) and derivative transactions (see Note 7 ). See “— Securities Lending” and “— Repurchase Agreement Transactions” for information regarding securities on loan and Note 5 for information regarding investments designated to the closed block. Variable Interest Entities The Company is involved with certain legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity. Consolidated VIEs Creditors or beneficial interest holders of VIEs where the Company is the pr imary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment. The following table presents the total assets and total liabilities re lating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at June 30, 2016 and December 31, 2015 . June 30, 2016 December 31, 2015 Total Assets Total Liabilities Total Assets Total Liabilities (In millions) MRSC (collateral financing arrangement (primarily securities)) (1) $ 3,559 $ — $ 3,374 $ — Operating joint venture (2) — — 2,465 2,079 CSEs (assets (primarily loans) and liabilities (primarily debt)) (3) 172 47 186 62 Other investments (4) 67 — 76 — Total $ 3,798 $ 47 $ 6,101 $ 2,141 __________________ (1) See Note 13 of the Notes to the Consolidated Financial Statements included in the 2015 Annual Report for a description of the MetLife Reinsurance Company of South Carolina (“MRSC”) collateral financing arrangement. (2) Following a change in the foreign investment law in India, the Company no longer consolidated its India operating joint venture, effective January 1, 2016. Assets of the operating joint venture are primarily fixed maturity securities and separate account assets. Liabilities of the operating joint venture are primarily future policy benefits, other policy-related balances and separate account liabilities. (3) The Company consolidates entities that are structured as CMBS and as collateralized debt obligations. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any principal or interest shortfalls should any arise. The Company’s exposure was limited to that of its remaining investment in these entities of $106 million and $105 million at estimated fair value at June 30, 2016 and December 31, 2015 , respectively. The long-term debt bears interest primarily at fixed rates ranging from 2.25% to 5.57% , payable primarily on a monthly basis. Interest expense related to these obligations, included in other expenses, was $2 million and $3 million for the three months and six months ended June 30, 2016 , respectively, and $1 million and $2 million for the three months and six months ended June 30, 2015 , respectively. (4) Other investments is primarily comprised of other invested assets and other limited partnership interests. Unconsolidated VIEs The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at: June 30, 2016 December 31, 2015 Carrying Amount Maximum Exposure to Loss (1) Carrying Amount Maximum Exposure to Loss (1) (In millions) Fixed maturity securities AFS: Structured Securities (2) $ 74,273 $ 74,273 $ 65,824 $ 65,824 U.S. and foreign corporate 3,173 3,173 3,261 3,261 Other limited partnership interests 6,267 10,470 5,186 7,074 Other invested assets 2,131 2,747 1,604 2,161 FVO and trading securities 546 546 586 586 Real estate joint ventures 118 148 65 82 Other (3) 117 117 71 71 Total $ 86,625 $ 91,474 $ 76,597 $ 79,059 __________________ (1) The maximum exposure to loss relating to fixed maturity securities AFS, FVO and trading securities and equity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests, mortgage loans and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $162 million and $179 million at June 30, 2016 and December 31, 2015 , respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. (2) For these variable interests, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity. (3) Other is comprised of mortgage loans, non-redeemable preferred stock and a loan receivable. As described in Note 13 , the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during both the six months ended June 30, 2016 and 2015 . Net Investment Income The components of net investment income were as follows: Three Months Six Months 2016 2015 2016 2015 (In millions) Investment income: Fixed maturity securities $ 3,564 $ 3,672 $ 7,218 $ 7,213 Equity securities 33 35 70 66 FVO and trading securities — Actively traded and FVO general account securities (1) 10 2 16 39 Mortgage loans 851 801 1,658 1,531 Policy loans 147 151 296 303 Real estate and real estate joint ventures 149 323 306 534 Other limited partnership interests 120 250 166 465 Cash, cash equivalents and short-term investments 43 37 83 72 Operating joint ventures 11 8 23 16 Other 51 30 92 152 Subtotal 4,979 5,309 9,928 10,391 Less: Investment expenses 285 313 581 615 Subtotal, net 4,694 4,996 9,347 9,776 FVO and trading securities — FVO contractholder-directed unit-linked investments (1) 191 (55 ) 94 622 FVO CSEs — interest income: Commercial mortgage loans 2 5 5 9 Securities — 1 — 1 Subtotal 193 (49 ) 99 632 Net investment income $ 4,887 $ 4,947 $ 9,446 $ 10,408 __________________ (1) Changes in estimated fair value subsequent to purchase for securities still held as of the end of the respective periods included in net investment income were as follows: Three Months Si |
