Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Document Information [Line Items] | ' |
Document Type | 'S-1 |
Amendment Flag | 'false |
Document Period End Date | 31-Dec-13 |
Trading Symbol | 'NWLIC |
Entity Registrant Name | 'NATIONWIDE LIFE INSURANCE CO |
Entity Central Index Key | '0000205695 |
Entity Filer Category | 'Non-accelerated Filer |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Revenues | ' | ' | ' | |
Policy charges | $1,849 | $1,670 | $1,506 | |
Premiums | 724 | 635 | 531 | |
Net investment income | 1,849 | 1,825 | 1,844 | |
Net realized investment gains (losses), net of other-than-temporary impairment losses | 678 | 319 | -1,676 | |
Other revenues | 17 | 7 | 3 | |
Total revenues | 5,117 | 4,456 | 2,208 | |
Benefits and expenses | ' | ' | ' | |
Interest credited to policyholder account values | 1,067 | 1,038 | 1,033 | |
Benefits and claims | 1,354 | 1,227 | 1,062 | |
Policyholder dividends | 59 | 54 | 67 | |
Amortization of deferred policy acquisition costs | 374 | 575 | 65 | |
Other expenses, net of deferrals | 922 | 863 | 830 | |
Total benefits and expenses | 3,776 | 3,757 | 3,057 | |
Income (loss) before federal income taxes and noncontrolling interests | 1,341 | 699 | -849 | |
Federal income tax expense (benefit) | 313 | 99 | -427 | [1] |
Net income (loss) | 1,028 | 600 | -422 | |
Less: Loss attributable to noncontrolling interest, net of tax | -82 | -61 | -56 | |
Net income (loss) attributable to Nationwide Life Insurance Company | $1,110 | $661 | ($366) | |
[1] | The balances reflect a change in accounting principle, as described in Note 2. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income (loss) | $1,028 | $600 | ($422) |
Other comprehensive (loss) income, net of tax | ' | ' | ' |
Net unrealized (losses) gains on available-for-sale securities | -663 | 571 | 317 |
Other | -7 | -5 | 12 |
Total other comprehensive (loss) income, net of tax | -670 | 566 | 329 |
Total comprehensive income (loss) | 358 | 1,166 | -93 |
Less: Comprehensive loss attributable to noncontrolling interests, net of tax | -82 | -61 | -56 |
Total comprehensive income (loss) attributable to Nationwide Life Insurance Company | $440 | $1,227 | ($37) |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Assets | ' | ' | ||
Fixed maturity securities, available-for-sale | $32,249 | $31,811 | ||
Mortgage loans, net of allowance | 6,341 | 5,827 | ||
Policy loans | 987 | 980 | ||
Short-term investments | 411 | 1,034 | ||
Other investments | 767 | 639 | ||
Total investments | 40,755 | 40,291 | ||
Cash and cash equivalents | 61 | 62 | ||
Accrued investment income | 603 | 566 | ||
Deferred policy acquisition costs | 3,778 | 3,249 | ||
Goodwill | 200 | [1] | 200 | [1] |
Other assets | 3,979 | 4,362 | ||
Separate account assets | 84,069 | 71,440 | ||
Total assets | 133,445 | 120,170 | ||
Liabilities | ' | ' | ||
Future policy benefits and claims | 36,765 | 36,154 | ||
Short-term debt | 278 | 300 | ||
Long-term debt | 707 | 1,038 | ||
Other liabilities | 4,122 | 4,507 | ||
Separate account liabilities | 84,069 | 71,440 | ||
Total liabilities | 125,941 | 113,439 | ||
Shareholder's equity | ' | ' | ||
Common stock ($1 par value; authorized-5,000,000 shares, issued and outstanding-3,814,779 shares) | 4 | 4 | ||
Additional paid-in capital | 1,718 | 1,718 | ||
Retained earnings | 4,520 | 3,410 | ||
Accumulated other comprehensive income | 582 | 1,252 | ||
Total shareholder's equity | 6,824 | 6,384 | ||
Noncontrolling interest | 680 | 347 | ||
Total equity | 7,504 | 6,731 | ||
Total liabilities and equity | $133,445 | $120,170 | ||
[1] | The goodwill balances have not been previously impaired. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Common stock, par value | $1 | $1 |
Common stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, shares issued | 3,814,779 | 3,814,779 |
Common stock, shares outstanding | 3,814,779 | 3,814,779 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Total | Common stock | Additional paid-in capital | Retained Earnings | Accumulated other comprehensive income (loss) | Total shareholder's equity | Non-controlling Interest |
In Millions, unless otherwise specified | |||||||
Beginning Balance at Dec. 31, 2010 | $5,589 | $4 | $1,718 | $3,155 | $357 | $5,234 | $355 |
Comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | -422 | ' | ' | -366 | ' | -366 | -56 |
Other comprehensive income | 329 | ' | ' | ' | 329 | 329 | ' |
Total comprehensive income (loss) | -93 | ' | ' | -366 | 329 | -37 | -56 |
Change in noncontrolling interest | 46 | ' | ' | ' | ' | ' | 46 |
Ending Balance at Dec. 31, 2011 | 5,542 | 4 | 1,718 | 2,789 | 686 | 5,197 | 345 |
Cash dividend paid | -40 | ' | ' | -40 | ' | -40 | ' |
Comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | 600 | ' | ' | 661 | ' | 661 | -61 |
Other comprehensive income | 566 | ' | ' | ' | 566 | 566 | ' |
Total comprehensive income (loss) | 1,166 | ' | ' | 661 | 566 | 1,227 | -61 |
Change in noncontrolling interest | 63 | ' | ' | ' | ' | ' | 63 |
Ending Balance at Dec. 31, 2012 | 6,731 | 4 | 1,718 | 3,410 | 1,252 | 6,384 | 347 |
Comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | 1,028 | ' | ' | 1,110 | ' | 1,110 | -82 |
Other comprehensive income | -670 | ' | ' | ' | -670 | -670 | ' |
Total comprehensive income (loss) | 358 | ' | ' | 1,110 | -670 | 440 | -82 |
Change in noncontrolling interest | 415 | ' | ' | ' | ' | ' | 415 |
Ending Balance at Dec. 31, 2013 | $7,504 | $4 | $1,718 | $4,520 | $582 | $6,824 | $680 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Cash flows from operating activities: | ' | ' | ' | |
Net income (loss) | $1,028 | $600 | ($422) | |
Adjustments to net income (loss): | ' | ' | ' | |
Net realized investment (gains) losses, net of other-than-temporary impairment losses | -678 | -319 | 1,676 | |
Interest credited to policyholder account values | 1,067 | 1,038 | 1,033 | |
Capitalization of deferred policy acquisition costs | -604 | -470 | -604 | [1] |
Amortization of deferred policy acquisition costs | 374 | 575 | 65 | |
Amortization and depreciation | 77 | 80 | 48 | |
Deferred tax expense (benefit) | 346 | 243 | -482 | |
Changes in: | ' | ' | ' | |
Policy liabilities | -475 | -548 | -608 | |
Derivatives, net | -483 | -490 | -364 | |
Other, net | 88 | -84 | -265 | |
Net cash provided by operating activities | 740 | 625 | 77 | |
Cash flows from investing activities: | ' | ' | ' | |
Proceeds from maturities of available-for-sale securities | 3,689 | 2,909 | 2,705 | |
Proceeds from sales of available-for-sale securities | 1,091 | 796 | 1,585 | |
Purchases of available-for-sale securities | -6,842 | -5,167 | -6,176 | |
Proceeds from repayments and sales of mortgage loans | 1,091 | 1,048 | 1,124 | |
Issuances and purchases of mortgage loans | -1,593 | -1,114 | -751 | |
Net decrease (increase) in short-term investments | 654 | 98 | -61 | |
Collateral (paid) received, net | -637 | -208 | 359 | |
Other, net | 42 | -12 | 104 | |
Net cash used in investing activities | -2,505 | -1,650 | -1,111 | |
Cash flows from financing activities: | ' | ' | ' | |
Net change in short-term debt | -22 | -477 | 477 | |
Proceeds from issuance of long-term debt | 2 | 13 | 13 | |
Cash dividend paid to Nationwide Financial Services, Inc. | ' | -40 | ' | |
Repayments of long-term debt | -299 | ' | ' | |
Investment and universal life insurance product deposits | 6,139 | 5,566 | 5,314 | |
Investment and universal life insurance product withdrawals | -4,034 | -4,063 | -5,024 | |
Other, net | -22 | 39 | -34 | |
Net cash provided by financing activities | 1,764 | 1,038 | 746 | |
Net (decrease) increase in cash and cash equivalents | -1 | 13 | -288 | |
Cash and cash equivalents, beginning of period | 62 | 49 | 337 | |
Cash and cash equivalents, end of period | $61 | $62 | $49 | |
[1] | The balances reflect a change in accounting principle, as described in Note 2. |
Nature_of_Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2013 | |
Nature of Operations | ' |
(1) Nature of Operations | |
Nationwide Life Insurance Company (“NLIC,” or collectively with its subsidiaries, “the Company”) was incorporated in 1929 and is an Ohio domiciled stock life insurance company. The Company is a member of the Nationwide group of companies (“Nationwide”), which is comprised of Nationwide Mutual Insurance Company (“NMIC”) and all of its subsidiaries and affiliates. | |
All of the outstanding shares of NLIC’s common stock are owned by Nationwide Financial Services, Inc. (“NFS”), a holding company formed by Nationwide Corporation (“Nationwide Corp.”), a majority-owned subsidiary of NMIC. | |
Wholly-owned subsidiaries of NLIC as of December 31, 2013 include Nationwide Life and Annuity Insurance Company (“NLAIC”), Nationwide Investment Services Corporation (“NISC”) and Nationwide Investment Advisor (“NIA”). NLAIC primarily offers universal life insurance, variable universal life insurance, term life insurance, corporate-owned life insurance (“COLI”) and individual annuity contracts on a non-participating basis. NISC is a registered broker-dealer. NIA is a registered investment advisor. | |
The Company is a leading provider of long-term savings and retirement products in the United States (“U.S.”). The Company develops and sells a diverse range of products and services including individual annuities, private and public sector group retirement plans, investment products sold to institutions, life insurance and advisory services. | |
The Company sells its products through a diverse distribution network. Unaffiliated entities that sell the Company’s products to their own customer bases include independent broker-dealers, financial institutions, wirehouse and regional firms, pension plan administrators and life insurance specialists. Representatives of affiliates who market products directly to a customer base include Nationwide Retirement Solutions, Inc. (“NRS”) and Nationwide Financial Network (“NFN”) producers, which includes the agency distribution force of the Company’s ultimate parent company, NMIC. | |
As of December 31, 2013 and 2012, the Company did not have a significant concentration of financial instruments in a single investee, industry or geographic region of the U.S. Also, the Company did not have a concentration of business transactions with a particular customer, lender, distribution source, market or geographic region of the U.S. in which the Company is overly vulnerable to a single event which could cause a severe impact to the Company’s financial position. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||
(2) Summary of Significant Accounting Policies | |||||||||||||
Basis of Presentation | |||||||||||||
The consolidated financial statements include the accounts of NLIC and companies in which NLIC directly or indirectly has a controlling financial interest. The consolidated financial statements include majority-owned subsidiaries and consolidated variable interest entities (“VIEs”). All significant intercompany accounts and transactions have been eliminated. | |||||||||||||
Entities in which NLIC does not have a controlling interest, but the Company has significant influence over the operating and financing decisions and also certain other investments, are reported using the equity method. | |||||||||||||
Use of Estimates | |||||||||||||
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The preparation of the consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates include the balance and amortization of deferred policy acquisition costs (“DAC”), legal and regulatory reserves, certain investment and derivative valuations including investment impairment losses, future policy benefits and claims including the valuation of embedded derivatives resulting from living benefit guarantees on variable annuity contracts, goodwill, provision for income taxes and valuation of deferred tax assets. Actual results could differ significantly from those estimates. | |||||||||||||
Revenues and Benefits | |||||||||||||
Investment and universal life insurance products. Investment products are long duration contracts that do not subject the Company to significant risk arising from mortality (the relative incidence of death in a given time) or morbidity (the relative incidence of disability resulting from disease or physical impairment). These include variable and fixed deferred annuity contracts in the accumulation phase with both individuals and groups and certain annuities without life contingencies. Universal life insurance products include long duration insurance contracts that do not have fixed or guaranteed terms. These include universal life insurance, variable universal life insurance, COLI, bank-owned life insurance (“BOLI”) and other interest-sensitive life insurance policies. Revenues for investment products and universal life insurance products consist of net investment income, surrender charges and other policy charges earned and assessed against policy account balances during the period. Policy charges are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. Assessments for services provided in future periods are recorded as unearned revenue and recognized as revenue over the periods benefited. Surrender charges are recognized as revenue upon surrender of a contract in accordance with contractual terms. Policy benefits and claims that are charged to expense include interest credited to policyholder accounts and benefits and claims incurred in the period in excess of related policyholder accounts. | |||||||||||||
Traditional life insurance products. Traditional life insurance products include those products with fixed and guaranteed terms, primarily consisting of whole life insurance, term life insurance and certain annuities with life contingencies. Premiums for traditional life insurance products are generally recognized as revenue when due. For certain annuities with life contingencies, any excess of gross premium over the net premium is deferred and recognized with the amount of expected future benefits. Benefits and expenses are associated with earned premiums so that profits are recognized over the life of the contract. This association is accomplished through the provision for future policy benefits and the deferral and amortization of policy acquisition costs. | |||||||||||||
Future Policy Benefits and Claims | |||||||||||||
Investment and universal life insurance products. The Company calculates its liability for future policy benefits and claims for investment products in the accumulation phase and for universal life insurance policies as the policy accrued account balance, which represents participants’ net deposits adjusted for investment performance, interest credited and applicable contract charges. | |||||||||||||
The Company offers certain universal life insurance, variable universal life insurance and variable annuity products with secondary guarantees, guaranteed minimum death benefits (“GMDB”), and guaranteed minimum income benefits (“GMIB”). Liabilities for these guarantees are calculated by multiplying the current benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative secondary guarantee benefit payments plus interest. The Company regularly evaluates its experience and assumptions and adjusts the benefit ratio as appropriate. If experience or assumption changes result in a new benefit ratio, the reserves are adjusted to reflect the changes with a related charge or credit to other benefits and claims in the period of evaluation. Determination of the expected benefit payments and assessments are based on a range of scenarios and assumptions including those related to market rates of return and volatility, contract surrenders and mortality experience. The accounting for these guarantees impacts estimated gross profits used to calculate the balance and amortization of DAC and other. Refer to Note 4 for further discussion of these guarantees. | |||||||||||||
Guarantees to variable annuity contractholders can include a return of no less than the total deposits made on the contract less any customer withdrawals, total deposits made on the contract less any customer withdrawals plus a minimum return, or the highest contract value on a specified anniversary date minus any customer withdrawals following the contract anniversary. In addition, these guarantees can include benefits payable in the event of death, upon annuitization, upon periodic withdrawal or at specified dates during the accumulation period. Refer to Note 4 for further discussion of these guarantees. | |||||||||||||
The Company’s guaranteed minimum accumulation benefit (“GMAB”) and guaranteed living withdrawal benefit (“GLWB”) are living benefit guarantees which represent embedded derivatives in variable annuity contracts that are required to be separated from, and valued apart from, the host variable annuity contracts. The embedded derivatives are held at fair value and include the present value of attributed fees. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of net realized investment gains and losses. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions. Projections of cash flows inherent in the valuation of the embedded derivatives incorporate numerous assumptions including, but not limited to, mortality, lapse rates, index volatility, wait period (the number of years the policyholder is assumed to wait prior to beginning withdrawals once eligible), efficiency of benefit utilization (the percent of the maximum permitted withdrawal that a policyholder takes) and discounting, including liquidity and non-performance risk (the risk that the liability will not be fulfilled and affects the value at which the liability is transferred). The assumptions used to calculate the fair value of embedded derivatives are reviewed as part of an annual comprehensive study of assumptions. Quarterly, consideration is given as to whether adjustments to these assumptions are necessary. | |||||||||||||
The Company’s equity indexed products (life and annuity) have the policyholders’ interest credits based on market performance with caps and floors. The interest credits represent embedded derivatives within the insurance contract and therefore are required to be separated from, and valued apart from, the host contracts. The embedded derivatives are held at fair value. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of interest credited. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions. Projections of cash flows inherent in the valuation of the embedded derivative incorporate numerous assumptions including, but not limited to, mortality, lapse rates and index volatility. The assumptions used to calculate the fair value of embedded derivatives are reviewed as part of an annual comprehensive study of assumptions. Quarterly, consideration is given as to whether adjustments to these assumptions are necessary. | |||||||||||||
Traditional life insurance products. The process of calculating reserve amounts for traditional life insurance products involves the use of a number of assumptions, including those related to persistency, mortality, morbidity, interest rates (the rates expected to be paid or received on financial instruments) and certain other expenses. | |||||||||||||
The liability for future policy benefits and claims for traditional life insurance policies was determined using the net level premium method with weighted average interest rates of 6.6% and estimates of mortality, morbidity, investment yields and persistency that were used or being experienced at the time the policies were issued with a provision for adverse deviation. | |||||||||||||
The liability for future policy benefits for certain annuities with life contingencies was calculated using the present value of future benefits and certain expenses discounted using weighted average interest rates of 5.3% with a provision for adverse deviation. | |||||||||||||
Reinsurance ceded | |||||||||||||
The Company cedes insurance to other companies in order to limit potential losses and to diversify its exposures. Such agreements do not relieve the original insurer from its primary obligation to the policyholder in the event the reinsurer is unable to meet the obligations it has assumed. Reinsurance premiums ceded and reinsurance recoveries on benefits and claims incurred are deducted from the respective income and expense accounts. Assets and liabilities related to reinsurance ceded are reported in the consolidated balance sheets on a gross basis, separately from the related future policy benefits and claims of the Company. | |||||||||||||
Deferred Policy Acquisition Costs | |||||||||||||
The Company has deferred certain acquisition costs that are directly related to the successful acquisition of new and renewal insurance and investment contracts. The methods and assumptions used to amortize and assess recoverability of the DAC balance depend on the type of product. | |||||||||||||
Investment and universal life insurance products. For certain investment and universal life insurance products, DAC is amortized with interest over the lives of the policies in relation to the present value of estimated gross profits, which is determined primarily from projected interest margins, policy charges and net realized investment gains and losses, less policy benefits and other expenses. The DAC asset related to investment and universal life insurance products is adjusted to reflect the impact of unrealized gains and losses on available-for-sale securities with the corresponding adjustment recorded in accumulated other comprehensive income (“AOCI”). This adjustment to DAC represents the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. DAC for investment and universal life insurance products is subject to recoverability testing in the year of policy issuance and DAC for universal life insurance products is also subject to loss recognition testing at the end of each reporting period. | |||||||||||||
The Company regularly evaluates and adjusts the DAC balance when actual gross profits in a given reporting period vary from management’s initial estimates. Additionally, the assumptions used in the estimation of future gross profits are based on the Company’s current best estimates of future events and are reviewed as part of an annual process. During the annual process, the Company performs a comprehensive study of assumptions, including mortality and persistency studies, maintenance expense studies and an evaluation of projected general and separate account investment returns. The most significant assumptions that are involved in the estimation of future gross profits include future net separate account investment performance, surrender/lapse rates, interest margins, renewal premiums and mortality. The Company refers to this process as “unlocking.” Quarterly, consideration is given as to whether adjustments to these assumptions are necessary. The Company uses a reversion to the mean process to determine the assumption for the future net separate account investment performance. This process assumes different performance levels over the next three years such that the separate account mean return measured from the anchor date to the end of the life of the product equals the long-term assumption. The Company’s long-term assumption for net separate account investment performance is approximately 7% growth per year. | |||||||||||||
Changes in assumptions and the emergence of actual gross profits can have a significant impact on the amount of DAC reported for investment and universal life insurance products and their related amortization patterns. Additionally, the amortization of DAC can be affected by the change in the valuation of the Company’s variable annuity guarantees. See Future Policy Benefits and Claims for further discussion of the valuation of the Company’s variable annuity guarantees. In the event actual experience differs from assumptions or future assumptions are revised, the Company will record an increase or decrease in DAC amortization expense, which could be significant. | |||||||||||||
Traditional life insurance. DAC is amortized with interest over the premium-paying period of the related policies in proportion to premium revenue recognized. These assumptions are consistent with those used in the calculation of liabilities for future policy benefits at issuance. DAC is evaluated for recoverability at the time of policy issuance, and loss recognition testing is conducted each reporting period. | |||||||||||||
Refer to Note 5 for discussion regarding assumption changes impacting DAC amortization and related balances. | |||||||||||||
Investments | |||||||||||||
Available-for-sale securities. Available-for-sale securities are reported at fair value, with unrealized holding gains and losses reported as a separate component of other comprehensive income, net of adjustments for DAC, future policy benefits and claims, policyholder dividend obligations and deferred federal income taxes. Realized gains and losses on sales of available-for-sale securities are recognized in income based on the specific identification method. Interest and dividend income is recognized when earned. | |||||||||||||
As of December 31, 2013 and 2012, 99% of fixed maturity securities were priced using external source data. Independent pricing services are most often utilized (86% as of December 31, 2013 and 2012) to determine the fair value of securities for which market quotations are available. For these securities, the Company obtains the pricing services’ methodologies, inputs and assumptions and classifies the investments accordingly in the fair value hierarchy. | |||||||||||||
A corporate pricing matrix or an internally developed pricing model is used in valuing certain corporate debt securities. The corporate pricing matrix is developed using private spreads for corporate securities with varying weighted average lives and credit quality ratings. The weighted average life and credit quality rating of a particular fixed maturity security to be priced using the corporate pricing matrix are important inputs into the model and are used to determine a corresponding spread that is added to the appropriate U.S. Treasury yield to create an estimated market yield for that security. The estimated market yield and other relevant factors are then used to estimate the fair value of the particular security. | |||||||||||||
Non-binding broker quotes are also utilized to determine the fair value of certain corporate debt, mortgage-backed and other asset-backed securities when quotes are not available from independent pricing services, corporate pricing matrix or internal pricing models. These securities are classified with the lowest priority in the fair value hierarchy as only one broker quote is ordinarily obtained, the investment is not traded on an exchange, the pricing is not available to other entities and/or the transaction volume in the same or similar investments has decreased. Inputs used in the development of prices are not provided to the Company by the brokers, as the brokers often do not provide the necessary transparency into their quotes and methodologies. The Company performs reviews and tests to ensure that quotes are a reasonable estimate of the investments’ fair value at least annually. Price movements of broker quotes are subject to validation and require approval from the Company’s management. Management uses its knowledge of the investment and current market conditions to determine if the price is indicative of the investment’s fair value. | |||||||||||||
When the collectability of contractual interest payments on fixed maturity securities is considered doubtful, such securities are placed in non-accrual status and any accrued interest is excluded from investment income. These securities are not restored to accrual status until the Company determines that payment of future principal and interest is probable. | |||||||||||||
For investments in certain residential and commercial mortgage-backed securities, the Company recognizes income and amortizes discounts and premiums using the effective-yield method based on prepayment assumptions and the estimated economic life of the securities. When actual prepayments differ significantly from estimated prepayments, the effective-yield is recalculated to reflect actual payments to date and anticipated future payments. Any resulting adjustment is included in net investment income in the period the estimates are revised. All other investment income is recorded using the effective-yield method without anticipating the impact of prepayments. | |||||||||||||
The Company periodically reviews its available-for-sale securities to determine if any decline in fair value to below amortized cost is other-than-temporary. Factors considered in determining whether a decline is other-than-temporary include the length of time a security has been in an unrealized loss position, the severity of the unrealized loss, reasons for the decline in value and expectations for the amount and timing of a recovery in fair value. | |||||||||||||
In assessing corporate debt securities for other-than-temporary impairment, the Company evaluates the ability of the issuer to meet its debt obligations, the value of the company or specific collateral securing the debt, the Company’s intent to sell the security and whether it is more likely than not the Company will be required to sell the security before the recovery of its amortized cost basis. The Company evaluates U.S. Treasury securities and obligations of U.S. Government corporations and agencies and obligations of states, political subdivisions and foreign governments for other-than-temporary impairment by examining similar characteristics. | |||||||||||||
When evaluating whether residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities are other-than-temporarily impaired, the Company examines characteristics of the underlying collateral, such as delinquency and default rates, the quality of the underlying borrower, the type of collateral in the pool, the vintage year of the collateral, subordination levels within the structure of the collateral pool, the quality of any credit guarantors, the Company’s intent to sell the security and whether it is more likely than not it will be required to sell the security before the recovery of its amortized cost basis. | |||||||||||||
The Company evaluates its intent to sell on an individual security basis. Other-than-temporary impairment losses on debt securities when the Company does not intend to sell the security and it is not more likely than not it will be required to sell the security prior to recovery of the security’s amortized cost basis are bifurcated with the credit portion of the impairment loss being recognized in earnings and the non-credit loss portion of the impairment and any subsequent changes in the fair value of those debt securities being recognized in other comprehensive income, net of applicable taxes and other offsets. To estimate the credit portion of an impairment loss recognized in earnings, the Company considers the timing and present value of the cash flows. To the extent that the present value of cash flows generated by a debt security is less than the amortized cost, an other-than-temporary impairment is recognized through earnings. | |||||||||||||
It is reasonably possible that further declines in fair values of such investments, or changes in assumptions or estimates of anticipated recoveries and/or cash flows, may cause further other-than-temporary impairments in the near term, which could be significant. | |||||||||||||
Mortgage loans, net of allowance. The Company holds commercial mortgage loans that are collateralized by properties throughout the U.S. These mortgage loans are further segregated into the following classes based on the unique risk profiles of the underlying property types: office, industrial, retail, apartment and other. Mortgage loans held-for-investment are held at amortized cost less a valuation allowance. | |||||||||||||
As part of the underwriting process, specific guidelines are followed to ensure the initial quality of a new mortgage loan. Third-party appraisals are generally obtained to support loaned amounts as the loans are usually collateral dependent. | |||||||||||||
The collectability and value of a mortgage loan are based on the ability of the borrower to repay and/or the value of the underlying collateral. Many of the Company’s commercial mortgage loans are structured with balloon payment maturities, exposing the Company to risks associated with the borrowers’ ability to make the balloon payment or refinance the property. | |||||||||||||
The Company actively monitors the credit quality of its mortgage loans to support the development of the valuation allowance. This monitoring process includes quantitative analyses which facilitate the identification of deteriorating loans, and qualitative analyses, which consider other factors relevant to the borrowers’ ability to repay. Loans with deteriorating credit fundamentals are identified through special surveillance procedures and are evaluated based on the severity of their deterioration and management’s judgment as to the likelihood of loss. | |||||||||||||
Mortgage loans require a loan-specific reserve when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When management determines that a loan requires a loan-specific reserve, a provision for loss is established equal to the difference between the carrying value and either the fair value of the collateral less costs to sell or the present value of expected future cash flows discounted at the loan’s market interest rate. Loan-specific reserve charges are recorded in net realized investment gains and losses. In the event a loan-specific reserve charge is reversed, the recovery is recorded in net realized investment gains and losses. | |||||||||||||
In addition to the loan-specific reserves, the Company maintains a non-specific reserve based primarily on loan surveillance categories and property type classes, which reflects management’s best estimate of probable credit losses inherent in the portfolio as of the balance sheet date but not yet attributable to specific loans. Management’s periodic evaluation of the adequacy of the non-specific reserve is based on past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect a borrower’s ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. Non-specific reserve changes are recorded in net realized investment gains and losses. | |||||||||||||
Interest income on performing mortgage loans is recognized over the life of the loan using the effective-yield method. Loans in default or in the process of foreclosure are placed on non-accrual status. Interest received on non-accrual status mortgage loans is included in net investment income in the period received. Loans are considered delinquent when contractual payments are 90 days past due. | |||||||||||||
Policy loans. Policy loans, which are collateralized by the related insurance policy, are held at the outstanding principal balance and do not exceed the net cash surrender value of the policy. As such, no valuation allowance for policy loans is required. | |||||||||||||
Short-term investments. Short-term investments consist of highly liquid mutual funds and government agency discount notes with maturities of twelve months or less at acquisition. The Company and various affiliates maintains agreements with Nationwide Cash Management Company (“NCMC”), an affiliate, under which NCMC acts as a common agent in handling the purchase and sale of short-term securities for the respective accounts of the participants. Amounts on deposit with NCMC for the benefit of the Company are included in short-term investments on the consolidated balance sheets. The Company carries short-term investments at fair value. | |||||||||||||
Other investments. Other investments consist primarily of equity method investments in joint ventures and partnerships, equity securities, capital stock with the Federal Home Loan Bank of Cincinnati (“FHLB”) and trading securities. | |||||||||||||
Securities lending. The Company has entered into securities lending agreements with a custodial bank whereby eligible securities are loaned to third parties, primarily major brokerage firms. These transactions are used to generate additional income on the securities portfolio. The Company is entitled to receive from the borrower any payments of interest and dividends received on loaned securities during the loan term. The agreements require a minimum of 102% of the fair value of loaned securities to be held as collateral. Cash collateral is invested by the custodial bank in investment-grade securities, which are included in the total investments of the Company. Periodically, the Company may receive non-cash collateral, which would be recorded off-balance sheet. The Company recognizes loaned securities in either available-for-sale or other investments. A securities lending payable is recorded in other liabilities for the amount of cash collateral received. Net income received from securities lending activities is included in net investment income. | |||||||||||||
Variable interest entities. In the normal course of business, the Company has relationships with VIEs. If the Company determines that it has a variable interest and is the primary beneficiary, it consolidates the VIE. This determination is based on a review of the entity’s contract and other deal related information, such as the entity’s equity investment at risk, decision-making abilities, obligations to absorb economic risks and right to receive economic rewards of the entity. The Company is the primary beneficiary if the Company has the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and the obligation to absorb losses or receive benefits from the entity that could be potentially significant to the VIE. | |||||||||||||
The majority of the VIEs consolidated by the Company are due to guarantees provided to limited partners related to the amount of tax credits that will be generated by the Low-Income-Housing Tax Credit Funds (“Tax Credit Funds”). The results of operations and financial position of each VIE for which the Company is the primary beneficiary as well as the corresponding noncontrolling interests, are recorded in the consolidated financial statements. Ownership interests held by unrelated third parties in the consolidated VIEs are presented as noncontrolling interests in the equity section of the consolidated financial statements. Loss attributable to noncontrolling interests is excluded from the net income attributable to NLIC on the consolidated statements of operations. | |||||||||||||
The Company invests in fixed maturity securities that could qualify as VIEs, including corporate securities, mortgage-backed securities and asset-backed securities. The Company is not the primary beneficiary of these securities as the Company does not have the power to direct the activities that most significantly impact the entities’ performance. The Company’s maximum exposure to loss is limited to the carrying values of these securities. There are no liquidity arrangements, guarantees or other commitments by third parties that affect the fair value of the Company’s interest in these assets. Refer to Note 6 for additional disclosures related to these investments. | |||||||||||||
The Company is not required and does not intend to provide financial or other support outside of contractual requirements to any VIE. | |||||||||||||
Derivative Instruments | |||||||||||||
The Company uses derivative instruments to manage exposures and mitigate risks primarily associated with interest rates, equity markets and foreign currency. These derivative instruments primarily include interest rate swaps, futures contracts and options. Certain features embedded in the Company’s indexed products and certain variable annuity contracts require derivative accounting. Refer to the prior discussion of Future Policy Benefits and Claims for a description of the valuation applicable to these products. All derivative instruments are held at fair value and are reflected as assets or liabilities in the consolidated balance sheets. | |||||||||||||
Fair value of derivative instruments is determined using various valuation techniques relying predominantly on observable market inputs. These inputs include interest rate swap curves, credit spreads, interest rates, counterparty credit risk, equity volatility and equity index levels. In cases where observable inputs are not available, the Company will utilize non-binding broker quotes to determine fair value, and these instruments are classified accordingly in the fair value hierarchy. Price movements of these broker quotes are subject to validation and require approval from the Company’s management. Management uses models to internally value the instruments for comparison to the values received through broker quotes. | |||||||||||||
For derivatives that are not designated for hedge accounting, the gain or loss on the derivative is primarily recognized in net realized investment gains and losses. | |||||||||||||
For derivative instruments that are designated and qualify for fair value hedge accounting, the gain or loss on the derivative instrument, as well as the hedged item to the extent of the risk being hedged, are recognized in net realized investment gains and losses. | |||||||||||||
For derivative instruments that are designated and qualify for cash flow hedge accounting, the effective portion of the gain or loss on the derivative instrument is reported as a component of AOCI and reclassified into earnings in the same period or periods that the hedged transaction impacts earnings. The ineffective portion of the derivative’s change in value, if any, along with any of the derivative’s change in value that is excluded from the assessment of hedge effectiveness, are recorded in net realized investment gains and losses. | |||||||||||||
The Company’s derivative transaction counterparties are generally financial institutions. To reduce the credit risk associated with open contracts, the Company enters into master netting agreements, which permit the closeout and netting of transactions with the same counterparty upon the occurrence of certain events. In addition, the Company attempts to reduce credit risk by obtaining collateral from counterparties. The determination of the need for and the levels of collateral vary based on an assessment of the credit risk of the counterparty. The Company accepts collateral in the form of cash and marketable securities. | |||||||||||||
Fair Value Measurements | |||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources while unobservable inputs reflect the Company’s view of market assumptions in the absence of observable market information. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. In determining fair value, the Company uses various methods, primarily market and income approaches. | |||||||||||||
The Company categorizes its fair value measurements into a three-level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety. | |||||||||||||
The Company categorizes assets and liabilities held at fair value in the consolidated balance sheets as follows: | |||||||||||||
• | Level 1 – Unadjusted quoted prices accessible in active markets for identical assets or liabilities at the measurement date and mutual funds where the value per share (unit) is determined and published daily and is the basis for current transactions. | ||||||||||||
• | Level 2 – Unadjusted quoted prices for similar assets or liabilities in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. Primary inputs to this valuation technique may include comparative trades, bid/asks, interest rate movements, U.S. Treasury rates, London Interbank Offered Rate (“LIBOR”), prime rates, cash flows, maturity dates, call ability, estimated prepayments, and/or underlying collateral values. | ||||||||||||
• | Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate about the assumptions market participants would use at the measurement date in pricing the asset or liability. Consideration is given to the risk inherent in both the method of valuation and the valuation inputs. | ||||||||||||
The Company reviews its fair value hierarchy classifications for assets and liabilities quarterly. Changes in observability of significant valuation inputs identified during these reviews may trigger reclassifications. Reclassifications are reported as transfers at the beginning of the period in which the change occurs. | |||||||||||||
Fair Value Option | |||||||||||||
The Company assesses the fair value option election for newly acquired assets or liabilities on a prospective basis. There are no material assets or liabilities for which the Company elected the fair value option. | |||||||||||||
Federal Income Taxes | |||||||||||||
The Company recognizes deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, net operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income or loss in the years in which those temporary differences are expected to be recovered or settled. Under this method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded to reduce a deferred tax asset to the amount expected to be realized. Interest expense and any associated penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) are recorded as income tax expense. | |||||||||||||
The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to change the provision for federal income taxes recorded in the consolidated financial statements, which could be significant. | |||||||||||||
Tax reserves are reviewed regularly and are adjusted as events occur that management believes impact its liability for additional taxes, such as lapsing of applicable statutes of limitations, conclusion of tax audits or substantial agreement with taxing authorities on the deductibility/nondeductibility of uncertain items, additional exposure based on current calculations, identification of new issues, release of administrative guidance or rendering of a court decision affecting a particular tax issue. | |||||||||||||
NLIC files a separate consolidated federal income tax return, with its subsidiaries, and is eligible to join the NMIC consolidated federal tax return group in 2015. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
Cash and cash equivalents include highly liquid investments with original maturities of less than three months. | |||||||||||||
Goodwill | |||||||||||||
In connection with business acquisitions, the Company recognizes goodwill as the excess of the purchase price over the fair value of net assets acquired as goodwill. Goodwill is not amortized, but is evaluated for impairment at the reporting unit level annually. Goodwill of a reporting unit is tested for impairment on an interim basis, in addition to the annual evaluation if an event occurs or circumstances change which would more likely than not reduce the fair value of a reporting unit below its carrying amount. If a reporting unit’s fair value is less than its carrying value, the Company will calculate implied goodwill. An impairment would be recognized on a reporting unit for the amount that the carrying value of its goodwill exceeds the implied value of its goodwill. | |||||||||||||
The process of evaluating goodwill for impairment requires several judgments and assumptions to be made to determine the fair value of the reporting units, including the method used to determine fair value, discount rates, expected levels of cash flows, revenues and earnings, and the selection of comparable companies used to develop market-based assumptions. The Company performed its 2013 annual impairment test and determined that no impairment was required. | |||||||||||||
Closed Block | |||||||||||||
In connection with the sponsored demutualization of Provident Mutual Life Insurance Company (“Provident”) prior to its acquisition by the Company, Provident established a closed block for the benefit of certain classes of individual participating policies that had a dividend scale payable in 2001. Assets were allocated to the closed block in an amount that produces cash flows which, together with anticipated revenues from closed block business, is reasonably expected to be sufficient to provide for (1) payment of policy benefits, specified expenses and taxes, and (2) the continuation of dividends throughout the life of the Provident policies included in the closed block based upon the dividend scales payable for 2001, if the experience underlying such dividend scales continues. | |||||||||||||
Assets allocated to the closed block benefit only the holders of the policies included in the closed block and will not revert to the benefit of the Company. No reallocation, transfer, borrowing or lending of assets can be made between the closed block and other portions of the Company’s general account, any of its separate accounts, or any affiliate of the Company without the approval of the Pennsylvania Insurance Department and Ohio Department of Insurance (“ODI”). The closed block will remain in effect as long as any policy in the closed block is in force. | |||||||||||||
If, over time, the aggregate performance of the closed block assets and policies is better than was assumed in funding the closed block, dividends to policyholders will increase. If, over time, the aggregate performance of the closed block assets and policies is less favorable than was assumed in the funding, dividends to policyholders could be reduced. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from the Company’s assets outside of the closed block, which are general account assets. | |||||||||||||
The assets and liabilities allocated to the closed block are recorded in the Company’s consolidated financial statements on the same basis as other similar assets and liabilities. The carrying amount of closed block liabilities in excess of the carrying amount of closed block assets at the date Provident was acquired by the Company represents the maximum future earnings from the assets and liabilities designated to the closed block that can be recognized in income, for the benefit of stockholders, over the period the policies in the closed block remain in force. | |||||||||||||
If actual cumulative earnings exceed expected cumulative earnings, the expected earnings are recognized in income. This is because the excess actual cumulative earnings over expected cumulative earnings, which represents undistributed accumulated earnings attributable to policyholders, is recorded as a policyholder dividend obligation. Therefore, the excess will be paid to closed block policyholders as an additional policyholder dividend expense in the future unless it is otherwise offset by future performance of the closed block that is less favorable than originally expected. If actual cumulative performance is less favorable than expected, actual earnings will be recognized in income. | |||||||||||||
The principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net investment income, purchases and sales of investments, policyholder benefits, policyholder dividends, premium taxes and income taxes. The principal income and expense items excluded from the closed block are management and maintenance expenses, commissions and net investment income and realized gains and losses on investments held outside of the closed block that support the closed block business, all of which enter into the determination of total gross margins of closed block policies. See Note 10 for further disclosure. | |||||||||||||
Separate Accounts | |||||||||||||
Separate account assets and liabilities represent contractholders’ funds that have been legally segregated into accounts with specific investment objectives. In the separate account, investment income and gains and losses on investments accrue directly to, and investment risk is borne by, the contractholder. Separate account assets are primarily comprised of public, privately registered and non-registered mutual funds. Separate account assets are recorded at fair value based on the methodology that would be applicable to the underlying assets. The value of separate account liabilities is set to equal the fair value for separate account assets. | |||||||||||||
Participating Business | |||||||||||||
Participating business, which refers to policies that participate in profits through policyholder dividends, represented approximately 4% of the Company’s life insurance in force in 2013 (5% in 2012 and 2011) and 38% of the number of life insurance policies in force in 2013 (40% in 2012 and 42% in 2011). The provision for policyholder dividends was based on the respective year’s dividend scales and has been included in future policy benefits and claims in the consolidated balance sheets. | |||||||||||||
Change in Accounting Principle | |||||||||||||
In October 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-26, which amends FASB Accounting Standards Codification (“ASC”) 944, Financial Services – Insurance. The amended guidance modifies the definition of the types of costs incurred by insurance entities that can be capitalized in the acquisition of new and renewal insurance and investment contracts. Under the amended guidance, acquisition costs are to include only those costs that are directly related to the successful acquisition of new or renewal insurance and investment contracts. The methods and assumptions used to amortize and assess recoverability of DAC were not impacted as a result of adopting this guidance. | |||||||||||||
The Company adjusted the presentation of its consolidated financial statements and accompanying notes for all periods presented, to reflect the retrospective adoption of this change in accounting principle. | |||||||||||||
The following tables summarize the impact of the retrospective change in accounting principle on the consolidated statements of operations for the periods indicated: | |||||||||||||
Year ended December 31, 2011 | |||||||||||||
(in millions) | As Originally | As Adjusted | Effect of Change | ||||||||||
Reported | |||||||||||||
Amortization of deferred policy acquisition costs | $ | 76 | $ | 65 | $ | 11 | |||||||
Other expenses, net of deferrals1 | $ | 620 | $ | 760 | $ | (140 | ) | ||||||
Federal income tax benefit | $ | (382 | ) | $ | (427 | ) | $ | 45 | |||||
Net loss attributable to Nationwide Life Insurance Company | $ | (282 | ) | $ | (366 | ) | $ | (84 | ) | ||||
1 | Excludes interest expense, which is included in other expenses, net of deferrals on the consolidated statements of operations. | ||||||||||||
Subsequent Events | |||||||||||||
The Company evaluated subsequent events through February 28, 2014, the date the consolidated financial statements were issued. |
Recently_Issued_Accounting_Sta
Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2013 | |
Recently Issued Accounting Standards | ' |
(3) Recently Issued Accounting Standards | |
Adopted Accounting Standards | |
On January 1, 2013, the Company adopted ASU 2011-11, which expands the disclosure requirements within ASC 210-10, Balance Sheet – Offsetting. The new disclosures require improved information about certain financial instruments and derivatives that are either offset in accordance with GAAP or subject to enforceable master offsetting arrangements irrespective of GAAP. The Company also adopted ASU 2013-01, which clarifies the scope of these disclosures. The adoption of this guidance resulted in increased disclosures only and had no impact on the Company’s consolidated financial statements. | |
On January 1, 2013, the Company adopted ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which amends FASB ASC 220, Comprehensive Income. The amended guidance requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by significant component. For significant amounts reclassified into net income in their entirety in the same reporting period, the amended guidance also requires entities to present or disclose the effect of these reclassifications on line items of net income. The adoption of this guidance resulted in increased disclosures only and had no impact on the Company’s consolidated financial statements. | |
On July 17, 2013, the Company adopted ASU 2013-10, which permits the Overnight Index Swap Rate to be designed as a U.S. benchmark interest rate for hedge accounting purposes. This guidance is applied prospectively on new or redesigned hedging relationships and accordingly had no impact to the Company’s consolidated financial statements. | |
On January 1, 2012, the Company adopted ASU 2011-04, which amends existing guidance in ASC 820, Fair Value Measurements and Disclosures. The guidance in this ASU clarifies existing fair value measurement guidance and expands disclosures primarily related to Level 3 fair value measurements. The Company also adopted ASU 2013-03, which clarifies the applicability of these disclosures. The adoption of this guidance resulted in increased disclosures only and had no impact on the Company’s consolidated financial statements. | |
On January 1, 2012, the Company adopted ASU 2011-05, which amends existing guidance in ASC 220, Comprehensive Income. The amended guidance requires reporting entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. The Company elected two separate but consecutive statements of operations and comprehensive income and adopted ASU 2011-05 retrospectively. | |
Pending Accounting Standards | |
In February 2013, the FASB issued ASU 2013-04, which amends existing guidance in ASC 405, Liabilities. The ASU provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The guidance is effective retrospectively for the Company’s annual and interim periods beginning January 1, 2014. The Company is currently in the process of determining the impact of adoption. | |
In June 2013, the FASB issued ASU 2013-08, which amends existing guidance in ASC 946, Financial Services – Investment Companies. The amended guidance modifies the definition of investment companies and requires new disclosures around the status and operations of investment companies. In addition, the guidance requires an investment company to measure its noncontrolling interests in another investment company at fair value rather than the equity method of accounting. The Company will adopt the ASU for interim and annual reporting periods beginning January 1, 2014. The Company is currently in the process of determining the impact of adoption. | |
In July 2013, the FASB issued ASU 2013-11, which amends existing guidance in ASC 740, Income Taxes. The amended guidance provides clarification on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The Company will adopt the ASU for interim and annual periods beginning January 1, 2014. The Company is currently in the process of determining the impact of adoption. | |
In January 2014, the FASB issued ASU 2014-01, which amends existing guidance in ASC 323, Equity Method and Joint Ventures. The amended guidance permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. The Company will adopt the ASU for interim and annual reporting periods beginning January 1, 2015. The Company is currently in the process of determining the impact of adoption. |
Certain_LongDuration_Contracts
Certain Long-Duration Contracts | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Certain Long-Duration Contracts | ' | ||||||||||||||||||||||||||||||||
(4) Certain Long-Duration Contracts | |||||||||||||||||||||||||||||||||
Variable Annuity Contracts | |||||||||||||||||||||||||||||||||
Contractholder assets are invested in general and separate account investment options as directed by the contractholder. The Company issues variable annuity contracts through its separate accounts. The Company also provides various forms of guarantees to benefit the related contractholders. The Company provides five primary guarantee types: (1) GMDB; (2) GMAB; (3) GLWB; (4) a hybrid guarantee with GMAB and GLWB; and (5) GMIB. | |||||||||||||||||||||||||||||||||
The GMDB, offered on every variable annuity contract, provides a specified minimum return upon death. Many of these death benefits are spousal, whereby a death benefit will be paid upon death of the first spouse. The survivor has the option to terminate the contract or continue it by having the death benefit paid into the contract and having a second death benefit paid upon the survivor’s death. | |||||||||||||||||||||||||||||||||
The GMAB, which was offered in the Company’s Capital Preservation Plus product, is a living benefit that provides the contractholder with a guaranteed return of deposits, adjusted proportionately for withdrawals, after a specified time period (5, 7 or 10 years) selected by the contractholder at the issuance of the variable annuity contract. In some cases, the contractholder also has the option, after a specified time period, to drop the guarantee and continue the variable annuity contract without the GMAB. In general, the GMAB requires a minimum allocation to guaranteed term options or adherence to limitations required by an approved asset allocation strategy. | |||||||||||||||||||||||||||||||||
The GLWB, offered in the Company’s Lifetime Income products, are living benefits that provide for enhanced retirement income security without the liquidity loss associated with annuitization. The withdrawal rates vary based on the age when withdrawals begin and are applied to a benefit base to determine the guaranteed lifetime income amount available to a contractholder. The benefit base is equal to the variable annuity premium at contract issuance and may increase as a result of a feature driven by account performance and policy duration. | |||||||||||||||||||||||||||||||||
The GMIB, which was offered with several variable annuity contracts, is a living benefit that provides the contractholder with a guaranteed annuitization stream of income. | |||||||||||||||||||||||||||||||||
The following table summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts, as of the dates indicated (a contract may contain multiple guarantees): | |||||||||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||
General | Separate | Net | General | Separate | Net | ||||||||||||||||||||||||||||
account | account | amount | Average | account | account | amount | Average | ||||||||||||||||||||||||||
(in millions) | value | value | at risk1 | age2 | value | value | at risk1 | age2 | |||||||||||||||||||||||||
Contracts with GMDB: | |||||||||||||||||||||||||||||||||
Return of net deposits | $ | 916 | $ | 19,927 | $ | 13 | 64 | $ | 836 | $ | 14,963 | $ | 24 | 64 | |||||||||||||||||||
Minimum return or anniversary contract value | 2,031 | 33,520 | 237 | 69 | 2,048 | 29,787 | 561 | 68 | |||||||||||||||||||||||||
Total contracts with GMDB | $ | 2,947 | $ | 53,447 | $ | 250 | 67 | $ | 2,884 | $ | 44,750 | $ | 585 | 66 | |||||||||||||||||||
GMAB Return of net deposits3 | $ | 92 | $ | 2,383 | $ | — | 64 | $ | 165 | $ | 3,230 | $ | 12 | 64 | |||||||||||||||||||
GLWB Minimum return or anniversary contract value | $ | 178 | $ | 28,071 | $ | 74 | 64 | $ | 128 | $ | 22,031 | $ | 613 | 65 | |||||||||||||||||||
GMIB Minimum return or anniversary contract value | $ | 49 | $ | 510 | $ | — | 64 | $ | 49 | $ | 514 | $ | 1 | 65 | |||||||||||||||||||
1 | Net amount at risk is calculated on a policy-level basis and equals the respective guaranteed benefit less the account value (or zero if the account value exceeds the guaranteed benefit). | ||||||||||||||||||||||||||||||||
2 | Represents the weighted average attained age of contractholders. | ||||||||||||||||||||||||||||||||
3 | Contracts with the hybrid accumulation/withdrawal benefits are included with the accumulation benefits contracts. | ||||||||||||||||||||||||||||||||
The following table summarizes the reserve balances for guarantees on variable annuity contracts, as of the dates indicated: | |||||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||||||||||||||||||
GMDB | $ | 55 | $ | 65 | |||||||||||||||||||||||||||||
GMAB1, 2 | $ | (19 | ) | $ | 57 | ||||||||||||||||||||||||||||
GLWB1 | $ | (1,075 | ) | $ | 600 | ||||||||||||||||||||||||||||
GMIB | $ | 2 | $ | 2 | |||||||||||||||||||||||||||||
1 | The fair value of the living benefit liability includes the present value of attributed fees. | ||||||||||||||||||||||||||||||||
2 | Contracts with the hybrid accumulation/withdrawal benefits are included with the accumulation benefits contracts. | ||||||||||||||||||||||||||||||||
Paid claims for GMDBs were $22 million and $30 million for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
Paid claims for GMABs, GLWBs and GMIBs were immaterial for the years ended December 31, 2013 and 2012. | |||||||||||||||||||||||||||||||||
The following table summarizes account balances of deferred variable annuity contracts with guarantees invested in separate accounts, as of the dates indicated: | |||||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||||||||||||||||||
Mutual funds: | |||||||||||||||||||||||||||||||||
Bond | $ | 5,685 | $ | 5,634 | |||||||||||||||||||||||||||||
Domestic equity | 43,505 | 35,277 | |||||||||||||||||||||||||||||||
International equity | 3,179 | 2,614 | |||||||||||||||||||||||||||||||
Total mutual funds | $ | 52,369 | $ | 43,525 | |||||||||||||||||||||||||||||
Money market funds | 1,078 | 1,225 | |||||||||||||||||||||||||||||||
Total1 | $ | 53,447 | $ | 44,750 | |||||||||||||||||||||||||||||
1 | Excludes $30.6 billion and $26.7 billion as of December 31, 2013 and 2012, respectively, of separate account assets not related to deferred variable annuity contracts with guarantees and are primarily attributable to retirement plan, variable universal life and COLI products. | ||||||||||||||||||||||||||||||||
The Company did not transfer any assets from the general account to the separate account to cover guarantees for any of its variable annuity contracts during the years ended December 31, 2013 and 2012. | |||||||||||||||||||||||||||||||||
Universal and Variable Universal Life Insurance Contracts | |||||||||||||||||||||||||||||||||
The Company offers certain universal life and variable universal life insurance products with secondary guarantees. These no-lapse guarantees provide that a policy will not lapse so long as the policyholder makes minimum premium payments. The reserve balances on these guarantees were $325 million and $216 million as of December 31, 2013 and 2012, respectively. Paid claims on contracts maintained in force by these guarantees were immaterial for the years ended December 31, 2013 and 2012. | |||||||||||||||||||||||||||||||||
The following table summarizes information regarding universal and variable universal life insurance contracts with no-lapse guarantees invested in general and separate accounts, as of the dates indicated: | |||||||||||||||||||||||||||||||||
(in millions) | General account | Separate account | Adjusted insurance | Average age2 | |||||||||||||||||||||||||||||
value | value | in force1 | |||||||||||||||||||||||||||||||
December 31, 2013 | $ | 1,270 | $ | 362 | $ | 16,960 | 55 | ||||||||||||||||||||||||||
December 31, 2012 | $ | 992 | $ | 328 | $ | 12,321 | 56 | ||||||||||||||||||||||||||
1 | The adjusted insurance in force is calculated on a policy-level basis and equals the respective guaranteed death benefit less the account value (or zero if the account value exceeds the guaranteed benefit). | ||||||||||||||||||||||||||||||||
2 | Represents the weighted average attained age of contractholders. |
Deferred_Policy_Acquisition_Co
Deferred Policy Acquisition Costs | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Deferred Policy Acquisition Costs | ' | ||||||||||||
(5) Deferred Policy Acquisition Costs | |||||||||||||
The following table summarizes changes in the DAC balance, as of the dates indicated: | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||
(in millions) | 2013 | 2012 | 20111 | ||||||||||
Balance at beginning of year | $ | 3,249 | $ | 3,487 | $ | 3,125 | |||||||
Capitalization of DAC | 604 | 470 | 604 | ||||||||||
Amortization of DAC, excluding unlocks | (373 | ) | (525 | ) | (200 | ) | |||||||
Amortization of DAC related to unlocks | (1 | ) | (50 | ) | 135 | ||||||||
Adjustments to DAC related to unrealized gains and losses on available-for-sale securities | 299 | (133 | ) | (177 | ) | ||||||||
Balance at end of year | $ | 3,778 | $ | 3,249 | $ | 3,487 | |||||||
1 | The balances reflect a change in accounting principle, as described in Note 2. | ||||||||||||
During 2013, the net change in DAC amortization as a result of the annual comprehensive review of model assumptions was immaterial. | |||||||||||||
During 2012, the Company incurred additional DAC amortization of $50 million as a result of the annual comprehensive review of model assumptions, as well as a deviation from equity market performance as compared to assumed net separate account returns. The updated assumptions were primarily related to actual gross profits and the in force block of business deviating from expectations, renewal premiums, general account margins and lapses. | |||||||||||||
During 2011, the Company recognized a reduction in DAC amortization of $135 million as a result of the annual comprehensive review of model assumptions. The updated assumptions related to interest spread, mortality, maintenance expense and market performance assumptions. The 2011 reduction in DAC amortization reflects the impact of the retrospective change in accounting principle described in Note 2. |
Investments
Investments | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||||||||||||||
(6) Investments | |||||||||||||||||||||||||||||||||||||
Available-for-Sale Securities | |||||||||||||||||||||||||||||||||||||
The following table summarizes amortized cost, unrealized gains and losses and fair value of available-for-sale securities, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
(in millions) | Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||||||||||||||||||
cost | gains | losses | value | ||||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. | $ | 484 | $ | 79 | $ | 2 | $ | 561 | |||||||||||||||||||||||||||||
Government corporations and agencies | |||||||||||||||||||||||||||||||||||||
Obligations of states, political subdivisions and foreign governments | 1,892 | 111 | 40 | 1,963 | |||||||||||||||||||||||||||||||||
Corporate public securities | 18,004 | 1,076 | 295 | 18,785 | |||||||||||||||||||||||||||||||||
Corporate private securities | 4,374 | 258 | 38 | 4,594 | |||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 3,919 | 163 | 79 | 4,003 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,439 | 86 | 21 | 1,504 | |||||||||||||||||||||||||||||||||
Other asset-backed securities | 890 | 26 | 77 | 839 | |||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 31,002 | $ | 1,799 | $ | 552 | $ | 32,249 | |||||||||||||||||||||||||||||
Equity securities | 6 | 18 | — | 24 | |||||||||||||||||||||||||||||||||
Total available-for-sale securities | $ | 31,008 | $ | 1,817 | $ | 552 | $ | 32,273 | |||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. | $ | 476 | $ | 121 | $ | — | $ | 597 | |||||||||||||||||||||||||||||
Government corporations and agencies | |||||||||||||||||||||||||||||||||||||
Obligations of states, political subdivisions and foreign governments | 1,820 | 301 | 1 | 2,120 | |||||||||||||||||||||||||||||||||
Corporate public securities | 16,152 | 1,891 | 33 | 18,010 | |||||||||||||||||||||||||||||||||
Corporate private securities | 4,216 | 392 | 19 | 4,589 | |||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 4,506 | 267 | 106 | 4,667 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,219 | 133 | 15 | 1,337 | |||||||||||||||||||||||||||||||||
Other asset-backed securities | 533 | 45 | 87 | 491 | |||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 28,922 | $ | 3,150 | $ | 261 | $ | 31,811 | |||||||||||||||||||||||||||||
Equity securities | 15 | 5 | — | 20 | |||||||||||||||||||||||||||||||||
Total available-for-sale securities | $ | 28,937 | $ | 3,155 | $ | 261 | $ | 31,831 | |||||||||||||||||||||||||||||
The fair value of the Company’s investments may fluctuate significantly in response to changes in interest rates, investment quality ratings and credit spreads. The Company has the ability and intent to hold equity securities until recovery. The Company does not have the intent to sell, nor is it more likely than not it will be required to sell, debt securities in an unrealized loss position. | |||||||||||||||||||||||||||||||||||||
The following table summarizes the amortized cost and fair value of fixed maturity securities, by contractual maturity, as of December 31, 2013. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without early redemption penalties. | |||||||||||||||||||||||||||||||||||||
(in millions) | Amortized | Fair | |||||||||||||||||||||||||||||||||||
cost | value | ||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 1,081 | $ | 1,097 | |||||||||||||||||||||||||||||||||
Due after one year through five years | 8,927 | 9,685 | |||||||||||||||||||||||||||||||||||
Due after five years through ten years | 7,805 | 7,967 | |||||||||||||||||||||||||||||||||||
Due after ten years | 6,941 | 7,154 | |||||||||||||||||||||||||||||||||||
Subtotal | $ | 24,754 | $ | 25,903 | |||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 3,919 | 4,003 | |||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,439 | 1,504 | |||||||||||||||||||||||||||||||||||
Other asset-backed securities | 890 | 839 | |||||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 31,002 | $ | 32,249 | |||||||||||||||||||||||||||||||||
The following table summarizes components of net unrealized gains and losses, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
(in millions) | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||||||
Net unrealized gains on available-for-sale securities, before adjustments, taxes and fair value hedging | $ | 1,265 | $ | 2,894 | |||||||||||||||||||||||||||||||||
Change in fair value attributable to fixed maturity securities designated in fair value hedging relationships | — | (4 | ) | ||||||||||||||||||||||||||||||||||
Net unrealized gains on available-for-sale securities, before adjustments and taxes1 | $ | 1,265 | $ | 2,890 | |||||||||||||||||||||||||||||||||
Adjustment to DAC and other | (176 | ) | (482 | ) | |||||||||||||||||||||||||||||||||
Adjustment to future policy benefits and claims | (89 | ) | (295 | ) | |||||||||||||||||||||||||||||||||
Adjustment to policyholder dividend obligation | (85 | ) | (177 | ) | |||||||||||||||||||||||||||||||||
Deferred federal income tax expense | (314 | ) | (672 | ) | |||||||||||||||||||||||||||||||||
Net unrealized gains on available-for-sale securities | $ | 601 | $ | 1,264 | |||||||||||||||||||||||||||||||||
1 | Includes net unrealized losses of $(40) million and $(48) million as of December 31, 2013 and 2012, respectively, related to the non-credit portion of other-than-temporarily impaired securities. | ||||||||||||||||||||||||||||||||||||
The following table summarizes the change in net unrealized gains and losses reported in accumulated other comprehensive income, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
Balance at beginning of year | $ | 1,264 | $ | 693 | |||||||||||||||||||||||||||||||||
Unrealized gains and losses arising during the period: | |||||||||||||||||||||||||||||||||||||
Net unrealized (losses) gains on available-for-sale securities before adjustments | (1,657 | ) | 990 | ||||||||||||||||||||||||||||||||||
Non-credit impairments and subsequent changes in fair value of impaired debt securities | 8 | 178 | |||||||||||||||||||||||||||||||||||
Net adjustment to DAC and other | 306 | (135 | ) | ||||||||||||||||||||||||||||||||||
Net adjustment to future policy benefits and claims | 206 | (112 | ) | ||||||||||||||||||||||||||||||||||
Net adjustment to policyholder dividend obligation | 92 | (45 | ) | ||||||||||||||||||||||||||||||||||
Related federal income tax benefit (expense) | 366 | (308 | ) | ||||||||||||||||||||||||||||||||||
Change in unrealized (losses) gains on available-for-sale securities | $ | (679 | ) | $ | 568 | ||||||||||||||||||||||||||||||||
Reclassification adjustment for net losses realized on available-for-sale securities, net of tax benefit ($8 and $2 as of December 31, 2013 and 2012, respectively) | (16 | ) | (3 | ) | |||||||||||||||||||||||||||||||||
Change in net unrealized (losses) gains on available-for-sale securities | $ | (663 | ) | $ | 571 | ||||||||||||||||||||||||||||||||
Balance at end of year | $ | 601 | $ | 1,264 | |||||||||||||||||||||||||||||||||
The following table summarizes by asset class available-for-sale securities, in an unrealized loss position based on the amount of time each type of security has been in an unrealized loss position, as well as the related fair value and number of securities, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
Less than or equal to one year | More than one year | Total | |||||||||||||||||||||||||||||||||||
Number | Number | Number | |||||||||||||||||||||||||||||||||||
(in millions, except number | Fair | Unrealized | of | Fair | Unrealized | of | Fair | Unrealized | of | ||||||||||||||||||||||||||||
of securities) | value | losses | securities | value | losses | securities | value | losses | securities | ||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
Corporate public securities | $ | 4,889 | $ | 256 | 346 | $ | 442 | $ | 39 | 34 | $ | 5,331 | $ | 295 | 380 | ||||||||||||||||||||||
Residential mortgage-backed securities | 725 | 16 | 70 | 604 | 63 | 148 | 1,329 | 79 | 218 | ||||||||||||||||||||||||||||
Other asset-backed securities | 507 | 6 | 32 | 144 | 71 | 40 | 651 | 77 | 72 | ||||||||||||||||||||||||||||
Other | 1,838 | 85 | 126 | 222 | 16 | 20 | 2,060 | 101 | 146 | ||||||||||||||||||||||||||||
Total | $ | 7,959 | $ | 363 | 574 | $ | 1,412 | $ | 189 | 242 | $ | 9,371 | $ | 552 | 816 | ||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
Corporate public securities | $ | 710 | $ | 11 | 68 | $ | 150 | $ | 22 | 10 | $ | 860 | $ | 33 | 78 | ||||||||||||||||||||||
Residential mortgage-backed securities | 89 | 2 | 12 | 1,029 | 104 | 190 | 1,118 | 106 | 202 | ||||||||||||||||||||||||||||
Other asset-backed securities | 27 | 1 | 5 | 163 | 86 | 46 | 190 | 87 | 51 | ||||||||||||||||||||||||||||
Other | 326 | 4 | 23 | 284 | 31 | 36 | 610 | 35 | 59 | ||||||||||||||||||||||||||||
Total | $ | 1,152 | $ | 18 | 108 | $ | 1,626 | $ | 243 | 282 | $ | 2,778 | $ | 261 | 390 | ||||||||||||||||||||||
The following table summarizes gross unrealized losses based on the ratio of fair value to amortized cost, for available-for-sale securities in an unrealized loss position, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||||||
Less | More | Less | More | ||||||||||||||||||||||||||||||||||
than or | than | than or | than | ||||||||||||||||||||||||||||||||||
equal to | one | equal to | one | ||||||||||||||||||||||||||||||||||
(in millions) | one year | year | Total | one year | year | Total | |||||||||||||||||||||||||||||||
99.9% - 80.0% | $ | 363 | $ | 107 | $ | 470 | $ | 18 | $ | 85 | $ | 103 | |||||||||||||||||||||||||
Less than 80.0% | |||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 21 | 21 | — | 50 | 50 | |||||||||||||||||||||||||||||||
Other asset-backed securities | — | 61 | 61 | — | 72 | 72 | |||||||||||||||||||||||||||||||
Other | — | — | — | — | 36 | 36 | |||||||||||||||||||||||||||||||
Total | $ | 363 | $ | 189 | $ | 552 | $ | 18 | $ | 243 | $ | 261 | |||||||||||||||||||||||||
Residential mortgage-backed securities are assessed for impairment using default estimates based on loan level data, where available. Where loan level data is not available, a proxy based on collateral characteristics is used. The impairment assessment considers loss severity as a function of multiple factors, including unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property value, loan-to-value (“LTV”) ratio at origination and prepayment speeds. Cash flows generated by the collateral are then utilized, along with consideration for the instrument’s position in the overall structure, to determine cash flows associated with the security. | |||||||||||||||||||||||||||||||||||||
Certain other asset-backed securities are assessed for impairment using expected cash flows based on various inputs including default estimates based on the underlying corporate securities, historical and forecasted loss severities or other market inputs when recovery estimates are not feasible. When the collateral is regional bank and insurance company trust preferred securities, default estimates used to estimate cash flows are based on U.S. Bank Rating service data and broker research. | |||||||||||||||||||||||||||||||||||||
The Company believes the unrealized losses on these available-for-sale securities represent temporary fluctuations in economic factors that are not indicative of other-than-temporary impairment. | |||||||||||||||||||||||||||||||||||||
Mortgage Loans, Net of Allowance | |||||||||||||||||||||||||||||||||||||
The following table summarizes the amortized cost of mortgage loans by method of evaluation for credit loss, and the related valuation allowances by type of credit loss, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
(in millions) | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||||||
Amortized cost: | |||||||||||||||||||||||||||||||||||||
Loans with non-specific reserves | $ | 6,350 | $ | 5,820 | |||||||||||||||||||||||||||||||||
Loans with specific reserves | 26 | 51 | |||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 6,376 | $ | 5,871 | |||||||||||||||||||||||||||||||||
Valuation allowance: | |||||||||||||||||||||||||||||||||||||
Non-specific reserves | $ | 29 | $ | 33 | |||||||||||||||||||||||||||||||||
Specific reserves | 6 | 11 | |||||||||||||||||||||||||||||||||||
Total valuation allowance | $ | 35 | $ | 44 | |||||||||||||||||||||||||||||||||
Mortgage loans, net of allowance | $ | 6,341 | $ | 5,827 | |||||||||||||||||||||||||||||||||
The following table summarizes activity in the valuation allowance for mortgage loans, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Balance at beginning of year | $ | 44 | $ | 60 | $ | 96 | |||||||||||||||||||||||||||||||
Current period provision1 | (4 | ) | 2 | 25 | |||||||||||||||||||||||||||||||||
Recoveries2 | (5 | ) | (15 | ) | (7 | ) | |||||||||||||||||||||||||||||||
Charge offs and other | — | (3 | ) | (54 | ) | ||||||||||||||||||||||||||||||||
Balance at end of year | $ | 35 | $ | 44 | $ | 60 | |||||||||||||||||||||||||||||||
1 | Includes specific reserve provisions and all changes in non-specific reserves. | ||||||||||||||||||||||||||||||||||||
2 | Includes recoveries on sales and increases in the valuation of loans with specific reserves. | ||||||||||||||||||||||||||||||||||||
The following table summarizes impaired commercial mortgage loans by class, for the years ended: | |||||||||||||||||||||||||||||||||||||
(in millions) | Office | Industrial | Retail | Other | Total | ||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Amortized cost | $ | — | $ | 26 | $ | — | $ | — | $ | 26 | |||||||||||||||||||||||||||
Specific reserves | — | (6 | ) | — | — | (6 | ) | ||||||||||||||||||||||||||||||
Carrying value of impaired mortgage loans, net of allowance | $ | — | $ | 20 | $ | — | $ | — | $ | 20 | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Amortized cost | $ | 13 | $ | 26 | $ | 12 | $ | — | $ | 51 | |||||||||||||||||||||||||||
Specific reserves | (2 | ) | (7 | ) | (2 | ) | — | (11 | ) | ||||||||||||||||||||||||||||
Carrying value of impaired mortgage loans, net of allowance | $ | 11 | $ | 19 | $ | 10 | $ | — | $ | 40 | |||||||||||||||||||||||||||
The following table summarizes average recorded investment and interest income recognized for impaired commercial mortgage loans by class, for the years ended: | |||||||||||||||||||||||||||||||||||||
(in millions) | Office | Industrial | Retail | Other | Total | ||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Average recorded investment | $ | 5 | $ | 20 | $ | 5 | $ | — | $ | 30 | |||||||||||||||||||||||||||
Interest income recognized | $ | 1 | $ | 1 | $ | 1 | $ | — | $ | 3 | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Average recorded investment | $ | 9 | $ | 20 | $ | 11 | $ | 34 | $ | 74 | |||||||||||||||||||||||||||
Interest income recognized | $ | 1 | $ | 2 | $ | 1 | $ | 6 | $ | 10 | |||||||||||||||||||||||||||
As of December 31, 2013 and 2012, the Company’s mortgage loans classified as delinquent and/or in non-accrual status were immaterial in relation to the total mortgage loan portfolio. The Company had no mortgage loans 90 days or more past due and still accruing interest. | |||||||||||||||||||||||||||||||||||||
Management evaluates the credit quality of individual mortgage loans and the portfolio as a whole through a number of loan quality measurements, including, but not limited to, LTV and debt service coverage (“DSC”) ratios. The LTV ratio is calculated as a ratio of the amortized cost of a loan to the estimated value of the underlying collateral. DSC is the amount of cash flow generated by the underlying collateral of the mortgage loan available to meet periodic interest and principal payments of the loan. This process identifies mortgage loans representing the lowest risk profile and lowest potential for loss and those representing the highest risk profile and highest potential for loss. These factors are updated and evaluated at least annually. | |||||||||||||||||||||||||||||||||||||
The following table summarizes the LTV ratio and DSC ratios of the mortgage loan portfolio, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
LTV ratio | DSC ratio | ||||||||||||||||||||||||||||||||||||
(in millions) | Less | 80% - less | 90% or | Total | Greater | 1.00-1.10 | Less than | Total | |||||||||||||||||||||||||||||
than | than 90% | greater | than 1.10 | 1 | |||||||||||||||||||||||||||||||||
80% | |||||||||||||||||||||||||||||||||||||
December 31, 2013: | |||||||||||||||||||||||||||||||||||||
Apartment | $ | 1,788 | $ | 52 | $ | 30 | $ | 1,870 | $ | 1,857 | $ | 6 | $ | 7 | $ | 1,870 | |||||||||||||||||||||
Industrial | 951 | 52 | 86 | 1,089 | 893 | 122 | 74 | 1,089 | |||||||||||||||||||||||||||||
Office | 837 | 30 | 38 | 905 | 800 | 43 | 62 | 905 | |||||||||||||||||||||||||||||
Retail | 2,236 | 41 | 21 | 2,298 | 2,214 | 61 | 23 | 2,298 | |||||||||||||||||||||||||||||
Other | 213 | — | 1 | 214 | 214 | — | — | 214 | |||||||||||||||||||||||||||||
Total | $ | 6,025 | $ | 175 | $ | 176 | $ | 6,376 | $ | 5,978 | $ | 232 | $ | 166 | $ | 6,376 | |||||||||||||||||||||
Weighted average DSC ratio | 1.77 | 1.22 | 1 | 1.74 | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||||||
Weighted average LTV ratio | n/a | n/a | n/a | n/a | 60 | % | 61 | % | 91 | % | 61 | % | |||||||||||||||||||||||||
December 31, 2012: | |||||||||||||||||||||||||||||||||||||
Apartment | $ | 1,119 | $ | 129 | $ | 62 | $ | 1,310 | $ | 1,303 | $ | 5 | $ | 2 | $ | 1,310 | |||||||||||||||||||||
Industrial | 922 | 76 | 162 | 1,160 | 951 | 121 | 88 | 1,160 | |||||||||||||||||||||||||||||
Office | 776 | 55 | 42 | 873 | 783 | 16 | 74 | 873 | |||||||||||||||||||||||||||||
Retail | 1,940 | 250 | 86 | 2,276 | 2,139 | 92 | 45 | 2,276 | |||||||||||||||||||||||||||||
Other | 189 | 57 | 6 | 252 | 252 | — | — | 252 | |||||||||||||||||||||||||||||
Total | $ | 4,946 | $ | 567 | $ | 358 | $ | 5,871 | $ | 5,428 | $ | 234 | $ | 209 | $ | 5,871 | |||||||||||||||||||||
Weighted average DSC ratio | 1.74 | 1.27 | 1.07 | 1.65 | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||||||
Weighted average LTV ratio | n/a | n/a | n/a | n/a | 66 | % | 76 | % | 96 | % | 68 | % | |||||||||||||||||||||||||
While these loan quality measurements contribute to management’s assessment of relative credit risk in the mortgage loan portfolio for the dates indicated based on underwriting criteria and ongoing assessment of the properties’ performance, management believes the amounts, net of valuation allowance, are collectible. | |||||||||||||||||||||||||||||||||||||
Available-For-Sale Securities on Deposit, Held in Trust and Pledged as Collateral | |||||||||||||||||||||||||||||||||||||
Available-for-sale securities with a carrying value of $8 million and $9 million were on deposit with various regulatory agencies as required by law as of December 31, 2013 and 2012, respectively. Additionally, available-for-sale securities with a carrying value of $849 million and $73 million were pledged as collateral to secure recoveries under reinsurance contracts and other funding agreements as of December 31, 2013 and 2012, respectively. These securities are primarily included in fixed maturity securities in the consolidated balance sheets. | |||||||||||||||||||||||||||||||||||||
Tax Credit Funds | |||||||||||||||||||||||||||||||||||||
The Company has sold $1.2 billion and $0.9 billion in Tax Credit Funds to unrelated third parties as of December 31, 2013 and 2012, respectively. The Company has guaranteed after-tax benefits to the third party investors through periods ending in 2028. The Company held immaterial reserves on these transactions as of December 31, 2013 and 2012. These guarantees are in effect for periods of approximately 15 years each. The Tax Credit Funds provide a stream of tax benefits to the investors that will generate a yield and return of capital. If the tax benefits are not sufficient to provide these cumulative after-tax yields, the Company must fund any shortfall. The maximum amount of undiscounted future payments that the Company could be required to pay the investors under the terms of the guarantees is $796 million, but the company does not anticipate making any material payments related to the guarantees. The Company’s risks are mitigated in the following ways: (1) the Company has the right to buyout the equity related to the guarantee under certain circumstances, (2) the Company may replace underperforming properties to mitigate exposure to guarantee payments and (3) the Company oversees the asset management of the deals. | |||||||||||||||||||||||||||||||||||||
Consolidated VIEs | |||||||||||||||||||||||||||||||||||||
The Company has relationships with VIEs where the Company is the primary beneficiary. These consolidated VIEs are primarily made up of Low-Income-Housing Tax Credit Funds with guarantees to limited partners. Net assets (controlling and noncontrolling interests) of all consolidated VIEs totaled $680 million and $347 million as of December 31, 2013 and 2012, respectively, which were composed primarily of other investments of $554 million, other assets of $182 million and other liabilities of $82 million as of December 31, 2013, and other investments of $348 million as of December 31, 2012. The Company’s general credit is not exposed to the creditors or beneficial interest holders of these consolidated VIEs. | |||||||||||||||||||||||||||||||||||||
Unconsolidated VIEs | |||||||||||||||||||||||||||||||||||||
In addition to the consolidated VIEs, the Company holds investments in VIEs where the Company is not the primary beneficiary, which are primarily investments in Tax Credit Funds without guarantees to limited partners. The carrying value of these investments was $104 million and $222 million as of December 31, 2013 and 2012, respectively. In addition, the Company has made commitments for further investments in these VIEs of $29 million and $66 million as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||||||
Net Investment Income | |||||||||||||||||||||||||||||||||||||
The following table summarizes net investment income by investment type, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 1,565 | $ | 1,506 | $ | 1,502 | |||||||||||||||||||||||||||||||
Mortgage loans | 348 | 366 | 370 | ||||||||||||||||||||||||||||||||||
Policy loans | 52 | 53 | 56 | ||||||||||||||||||||||||||||||||||
Other | (57 | ) | (45 | ) | (34 | ) | |||||||||||||||||||||||||||||||
Gross investment income | $ | 1,908 | $ | 1,880 | $ | 1,894 | |||||||||||||||||||||||||||||||
Investment expenses | 59 | 55 | 50 | ||||||||||||||||||||||||||||||||||
Net investment income | $ | 1,849 | $ | 1,825 | $ | 1,844 | |||||||||||||||||||||||||||||||
Net Realized Investment Gains and Losses, Net of Other-Than-Temporary Impairments | |||||||||||||||||||||||||||||||||||||
The following table summarizes net realized investment gains and losses, net of other-than-temporary impairments, by source, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Net derivative gains (losses) | $ | 705 | $ | 314 | $ | (1,636 | ) | ||||||||||||||||||||||||||||||
Realized gains on sales | 32 | 48 | 64 | ||||||||||||||||||||||||||||||||||
Realized losses on sales | (54 | ) | (23 | ) | (45 | ) | |||||||||||||||||||||||||||||||
Other | — | 12 | (19 | ) | |||||||||||||||||||||||||||||||||
Net realized investment gains (losses) before other-than-temporary impairments on fixed maturity securities | $ | 683 | $ | 351 | $ | (1,636 | ) | ||||||||||||||||||||||||||||||
Other-than-temporary impairments on fixed maturity securities1 | (5 | ) | (32 | ) | (40 | ) | |||||||||||||||||||||||||||||||
Net realized investment gains (losses), net of other-than-temporary impairments | $ | 678 | $ | 319 | $ | (1,676 | ) | ||||||||||||||||||||||||||||||
1 | Other-than-temporary impairments on fixed maturity securities are net $6 million, $36 million and $95 million of non-credit losses included in other comprehensive income for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||||||||||||||||
Proceeds from the sale of available-for-sale securities were $1.1 billion, $0.8 billion and $1.6 billion during the years ended December 31, 2013, 2012 and 2011, respectively. Gross gains of $31 million, $47 million and $50 million and gross losses of $50 million, $20 million and $39 million were realized on sales of available-for-sale securities during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||||||
The following table summarizes the cumulative credit losses, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Cumulative credit losses at beginning of year1 | $ | (289 | ) | $ | (328 | ) | $ | (340 | ) | ||||||||||||||||||||||||||||
New credit losses | (3 | ) | (18 | ) | (8 | ) | |||||||||||||||||||||||||||||||
Incremental credit losses | (3 | ) | (10 | ) | (29 | ) | |||||||||||||||||||||||||||||||
Losses related to securities included in the beginning balance sold or paid down during the period | 23 | 67 | 49 | ||||||||||||||||||||||||||||||||||
Cumulative credit losses at end of year1 | $ | (272 | ) | $ | (289 | ) | $ | (328 | ) | ||||||||||||||||||||||||||||
1 | Cumulative credit losses are defined as amounts related to the Company’s credit portion of the other-than-temporary impairment losses on debt securities that the Company does not intend to sell and that it is not more likely than not the Company will be required to sell prior to recovery of the amortized cost basis. |
Derivative_Instruments
Derivative Instruments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Derivative Instruments | ' | ||||||||||||||||
(7) Derivative Instruments | |||||||||||||||||
The Company is exposed to certain risks related to its ongoing business operations which are managed using derivative instruments. | |||||||||||||||||
Interest rate risk management. The Company uses interest rate contracts, primarily interest rate swaps, to reduce or alter interest rate exposure arising from mismatches between assets and liabilities. In the case of interest rate swaps, the Company enters into a contractual agreement with a counterparty to exchange, at specified intervals, the difference between fixed and variable rates of interest, calculated on a reference notional amount. | |||||||||||||||||
Interest rate swaps are used by the Company in association with fixed and variable rate investments to achieve cash flow streams that support certain financial obligations of the Company and to produce desired investment returns. As such, interest rate swaps are generally used to convert fixed rate cash flow streams to variable rate cash flow streams or vice versa. The Company also enters into interest rate swap transactions which are structured to provide an offset against the negative impact of higher interest rates on the Company’s capital position. | |||||||||||||||||
Equity market and interest rate risk management. The Company has a variety of variable annuity products with guaranteed benefit features. These products and related obligations expose the Company to various market risks, primarily equity and interest rate risks. Adverse changes in the equity markets or interest rate movements expose the Company to significant volatility. To mitigate these risks and hedge the guaranteed benefit obligations, the Company enters into a variety of derivatives including interest rate swaps, equity index futures, options and total return swaps. | |||||||||||||||||
Foreign currency risk management. As part of its regular investing activities, the Company may purchase foreign currency denominated investments. These investments and the associated income expose the Company to volatility associated with movements in foreign exchange rates. As foreign exchange rates change, the increase or decrease in the cash flows of the derivative instrument generally offsets the changes in the functional-currency equivalent cash flows of the hedged item. To mitigate this risk, the Company uses cross-currency swaps and futures, which are primarily included in other derivative contracts in the following tables. | |||||||||||||||||
Credit risk associated with derivative transactions. The Company periodically evaluates the risks within the derivative portfolios due to credit exposure. When evaluating this risk, the Company considers several factors which include, but are not limited to, the counterparty credit risk associated with derivative receivables, the Company’s own credit as it relates to derivative payables, the collateral thresholds associated with each counterparty and changes in relevant market data in order to gain insight into the probability of default by the counterparty. In addition, the impact the Company’s exposure to credit risk could have on the effectiveness of the Company’s hedging relationships is considered. As of December 31, 2013 and 2012, the impact of the exposure to credit risk on the fair value measurement of derivatives and the effectiveness of the Company’s hedging relationships was immaterial. | |||||||||||||||||
The following table summarizes the fair value and related notional amounts of derivative instruments, as of the dates indicated: | |||||||||||||||||
Derivative assets | Derivative liabilities | ||||||||||||||||
(in millions) | Fair value | Notional | Fair value | Notional | |||||||||||||
December 31, 2013 | |||||||||||||||||
Derivatives designated and qualifying as hedging instruments | $ | 1 | $ | 6 | $ | 26 | $ | 345 | |||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Interest rate contracts | $ | 1,787 | $ | 26,156 | $ | 2,100 | $ | 29,715 | |||||||||
Equity contracts | 343 | 6,556 | — | — | |||||||||||||
Total return swaps | 6 | 1,101 | 52 | 1,183 | |||||||||||||
Other derivative contracts | — | — | 5 | 2 | |||||||||||||
Total derivative positions1 | $ | 2,137 | $ | 33,819 | $ | 2,183 | $ | 31,245 | |||||||||
December 31, 2012 | |||||||||||||||||
Derivatives designated and qualifying as hedging instruments | $ | 4 | $ | 79 | $ | 21 | $ | 192 | |||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Interest rate contracts | $ | 1,960 | $ | 21,216 | $ | 2,065 | $ | 23,746 | |||||||||
Equity contracts | 822 | 7,445 | — | — | |||||||||||||
Total return swaps | 4 | 1,513 | 32 | 1,551 | |||||||||||||
Other derivative contracts | — | 10 | 5 | 17 | |||||||||||||
Total derivative positions1 | $ | 2,790 | $ | 30,263 | $ | 2,123 | $ | 25,506 | |||||||||
1 | Derivative assets and liabilities are included in other assets and other liabilities, respectively, in the consolidated balance sheets. As of December 31, 2013 and 2012, derivative assets exclude $196 million and $170 million, respectively, of accrued interest receivable, and derivative liabilities exclude $227 million and $179 million, respectively, of accrued interest payable. | ||||||||||||||||
The fair value of the Company’s derivative positions, subject to offsetting by master netting agreements of $1.7 billion and $2.0 billion as of December 31, 2013 and 2012, respectively, and by collateral received from or posted with counterparties, resulted in immaterial net uncollateralized derivative asset and liability positions as of December 31, 2013 and 2012. As of December 31, 2013 and 2012, the Company held cash collateral from derivative counterparties of $382 million and $798 million, respectively. The Company held $29 million of securities as off-balance sheet collateral as of December 31, 2013. No securities were held as off-balance sheet collateral as of December 31, 2012. As of December 31, 2013 and 2012, the Company had posted cash collateral of $435 million and $228 million, respectively, and pledged securities with a fair value of $173 million and $148 million, respectively, with derivative counterparties. | |||||||||||||||||
The following table summarizes gains and losses for derivative instruments recognized in net realized investment gains and losses in the consolidated statements of operations, for the years ended: | |||||||||||||||||
(in millions) | December 31, | December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Derivatives designated and qualifying as hedging instruments | $ | (1 | ) | $ | (1 | ) | $ | (4 | ) | ||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Interest rate contracts | $ | (209 | ) | $ | (125 | ) | $ | (44 | ) | ||||||||
Equity contracts | (776 | ) | (665 | ) | (45 | ) | |||||||||||
Total return swaps | (321 | ) | (343 | ) | (17 | ) | |||||||||||
Other derivative contracts | (9 | ) | (1 | ) | (6 | ) | |||||||||||
Net interest settlements | 14 | 53 | 34 | ||||||||||||||
Total derivative losses1 | $ | (1,302 | ) | $ | (1,082 | ) | $ | (82 | ) | ||||||||
Change in embedded derivatives on guaranteed benefit annuity programs2 | 1,751 | 1,185 | (1,674 | ) | |||||||||||||
Other revenue on guaranteed benefit annuity programs | 256 | 211 | 120 | ||||||||||||||
Change in embedded derivative liabilities and related fees | $ | 2,007 | $ | 1,396 | $ | (1,554 | ) | ||||||||||
Net realized derivative gains (losses) | $ | 705 | $ | 314 | $ | (1,636 | ) | ||||||||||
1 | Included in total derivative losses are economic hedging losses of $1.8 billion, $827 million and gains of $1.0 billion related to the guaranteed benefit annuity programs for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||
2 | As part of the Company’s annual comprehensive review of DAC model assumptions, all relevant assumptions impacting the fair value of embedded derivatives on annuity programs are also reviewed and updated. For the individual variable annuity business, the change in the embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2013 includes model enhancements and updated assumptions for discounting, benefit utilization, mortality and lapse rates. The change in embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2012 included updated assumptions for lapse rates, mortality, withdrawal behavior and benefit utilization. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||||||||||||
(8) Fair Value Measurements | |||||||||||||||||||||||||||||||||
The following table summarizes assets and liabilities held at fair value on a recurring basis as of December 31, 2013: | |||||||||||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. | $ | 557 | $ | 1 | $ | 3 | $ | 561 | |||||||||||||||||||||||||
Government corporations and agencies | |||||||||||||||||||||||||||||||||
Obligations of states, political subdivisions and foreign governments | 63 | 1,900 | — | 1,963 | |||||||||||||||||||||||||||||
Corporate public securities | 1 | 18,705 | 79 | 18,785 | |||||||||||||||||||||||||||||
Corporate private securities | — | 3,791 | 803 | 4,594 | |||||||||||||||||||||||||||||
Residential mortgage-backed securities | 791 | 3,203 | 9 | 4,003 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,504 | — | 1,504 | |||||||||||||||||||||||||||||
Other asset-backed securities | — | 645 | 194 | 839 | |||||||||||||||||||||||||||||
Total fixed maturity securities, available-for-sale, at fair value | $ | 1,412 | $ | 29,749 | $ | 1,088 | $ | 32,249 | |||||||||||||||||||||||||
Other investments at fair value | 64 | 357 | 45 | 466 | |||||||||||||||||||||||||||||
Investments at fair value | $ | 1,476 | $ | 30,106 | $ | 1,133 | $ | 32,715 | |||||||||||||||||||||||||
Derivative assets | — | 1,794 | 343 | 2,137 | |||||||||||||||||||||||||||||
Separate account assets | 80,647 | 1,339 | 2,083 | 84,069 | |||||||||||||||||||||||||||||
Assets at fair value | $ | 82,123 | $ | 33,239 | $ | 3,559 | $ | 118,921 | |||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Future policy benefits and claims: | |||||||||||||||||||||||||||||||||
Embedded derivatives on living benefits | $ | — | $ | — | $ | 1,094 | $ | 1,094 | |||||||||||||||||||||||||
Embedded derivatives on indexed products | — | — | (84 | ) | (84 | ) | |||||||||||||||||||||||||||
Total future policy benefits and claims | $ | — | $ | — | $ | 1,010 | $ | 1,010 | |||||||||||||||||||||||||
Derivative liabilities | — | (2,178 | ) | (5 | ) | (2,183 | ) | ||||||||||||||||||||||||||
Liabilities at fair value | $ | — | $ | (2,178 | ) | $ | 1,005 | $ | (1,173 | ) | |||||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013: | |||||||||||||||||||||||||||||||||
Balance | Net gains (losses) | Balance | |||||||||||||||||||||||||||||||
as of | In other | Transfers | Transfers | as of | |||||||||||||||||||||||||||||
December | comprehensive | into | out of | December | |||||||||||||||||||||||||||||
(in millions) | 31, 2012 | In operations1 | income | Purchases | Sales | Level 3 | Level 3 | 31, 2013 | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
Corporate private securities | $ | 772 | $ | (1 | ) | $ | (2 | ) | $ | 91 | $ | (117 | ) | $ | 127 | $ | (67 | ) | $ | 803 | |||||||||||||
Other asset-backed securities | 291 | — | 10 | 6 | (62 | ) | 15 | (66 | ) | 194 | |||||||||||||||||||||||
Other | 134 | — | (7 | ) | 18 | (53 | ) | — | (1 | ) | 91 | ||||||||||||||||||||||
Total fixed maturity securities, available-for-sale, at fair value2 | $ | 1,197 | (1 | ) | 1 | 115 | (232 | ) | 142 | (134 | ) | 1,088 | |||||||||||||||||||||
Other investments at fair value | 62 | (6 | ) | 6 | 5 | (22 | ) | — | — | 45 | |||||||||||||||||||||||
Derivative assets3 | 822 | (447 | ) | — | 129 | (161 | ) | — | — | 343 | |||||||||||||||||||||||
Separate account assets | 2,025 | 58 | — | — | — | — | — | 2,083 | |||||||||||||||||||||||||
Assets at fair value | $ | 4,106 | $ | (396 | ) | $ | 7 | $ | 249 | $ | (415 | ) | $ | 142 | $ | (134 | ) | $ | 3,559 | ||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Future policy benefits and claims: | |||||||||||||||||||||||||||||||||
Embedded derivatives on living benefits | $ | (657 | ) | $ | 1,751 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,094 | ||||||||||||||||
Embedded derivatives on indexed products | (91 | ) | 7 | — | — | — | — | — | (84 | ) | |||||||||||||||||||||||
Total future policy benefits and claims | $ | (748 | ) | $ | 1,758 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,010 | ||||||||||||||||
Derivative liabilities3 | (5 | ) | — | — | — | — | — | — | (5 | ) | |||||||||||||||||||||||
Liabilities at fair value | $ | (753 | ) | $ | 1,758 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,005 | ||||||||||||||||
1 | Net gains and losses included in operations are reported in net realized investment gains and losses and interest credited to policyholder accounts. The net unrealized gains on separate account assets are attributable to contractholders and therefore are not included in the Company’s earnings. The change in unrealized (losses) gains included in operations on assets and liabilities still held at the end of the year was $(6) million for other investments at fair value, $(297) million for derivative assets and $1.8 billion for future policy benefits and claims. | ||||||||||||||||||||||||||||||||
2 | Non-binding broker quotes were utilized to determine a fair value of $924 million of total fixed maturity securities as of December 31, 2013. | ||||||||||||||||||||||||||||||||
3 | Non-binding broker quotes were utilized to determine a fair value of all Level 3 derivative assets and liabilities. | ||||||||||||||||||||||||||||||||
Transfers into and out of Level 3 during the year ended December 31, 2013 are primarily due to certain corporate private securities and other asset-backed securities, which changed pricing sources between broker quotes and independent pricing services. There were no transfers between Levels 1 and 2 during the year ended December 31, 2013. | |||||||||||||||||||||||||||||||||
As discussed in Note 2, the valuation of embedded derivatives in living benefit guarantees and equity indexed products incorporates many inputs. Significant unobservable inputs for living benefit guarantees include discounting, index volatility, mortality, lapse rates, wait period and benefit utilization, while significant unobservable inputs for equity indexed products include mortality, lapse rates and index volatility. For both products, the Company derives these inputs, which vary widely by product, attained age, policy duration, benefits in the money (living benefit guarantees only) and the existence of surrender charges, from current experience and industry data. The fair value for these benefits is calculated using the mean of discounted cash flows across numerous random scenarios, an approach that is commonly used by the insurance industry for this type of valuation. This process considers a broader range of assumptions than what would be found in a deterministic approach. | |||||||||||||||||||||||||||||||||
Living Benefit Guarantees | |||||||||||||||||||||||||||||||||
The following table summarizes significant unobservable inputs used for fair value measurements for living benefits liabilities classified as Level 3 as of December 31, 2013: | |||||||||||||||||||||||||||||||||
Unobservable Inputs | Range | ||||||||||||||||||||||||||||||||
Mortality | 0.1%-8%2 | ||||||||||||||||||||||||||||||||
Lapse | 0%-35% | ||||||||||||||||||||||||||||||||
Wait period | 0 yrs –30 yrs3 | ||||||||||||||||||||||||||||||||
Efficiency of benefit utilization1 | 65%-100% | ||||||||||||||||||||||||||||||||
Discount rate | See footnote 4 | ||||||||||||||||||||||||||||||||
Index volatility | 15%-25% | ||||||||||||||||||||||||||||||||
1 | The unobservable input is not applicable to GMABs. | ||||||||||||||||||||||||||||||||
2 | Represents the mortality for the majority of business with living benefits, with policyholders ranging from 45 to 85. | ||||||||||||||||||||||||||||||||
3 | A portion of the contractholders could never use the benefit, which would extend the range to an indeterminate period. | ||||||||||||||||||||||||||||||||
4 | Incorporates the liquidity and non-performance risk adjustment. The liquidity spread takes into consideration market observables for spreads in illiquid assets. The non-performance risk adjustment reflects an additional spread over LIBOR determined by market observables for similarly rated public bonds. | ||||||||||||||||||||||||||||||||
The following changes in any of the significant unobservable inputs presented in the table above may result in a change in the fair value measurements of the living benefits liability: | |||||||||||||||||||||||||||||||||
Higher mortality rates tend to decrease the value of the liability and lower mortality rates tend to increase the value of the liability. | |||||||||||||||||||||||||||||||||
Higher lapse rates tend to decrease the value of the liability and lower lapse rates tend to increase the value of the liability. Factors that impact the predicted lapse rate can include: age, policy duration, policy size, benefit in-the-moneyness and applicable surrender charges. All else being equal, policies that are in-the-money will have lower lapse rates than policies that are out-of-the-money, and policies that have a surrender charge present will have lower lapse rates than policies without a surrender charge. | |||||||||||||||||||||||||||||||||
The assumed wait period and the efficiency of utilization determine the timing and amount of living benefits withdrawals. These assumptions vary by the product type, age of the policyholder and policy duration. Many products have a bonus feature which enhances the guarantee on every policy anniversary for the first ten years so long as withdrawals have not commenced. All else being equal, policies commencing withdrawals at a time around the year ten bonus will have higher liability values than policies commencing withdrawals 20 years after issue or policies commencing withdrawals only one year after issue. In addition, policies that are assumed to withdraw the maximum permitted amount will have a higher liability value than a policy that is assumed to withdraw less than the maximum allowed amount. | |||||||||||||||||||||||||||||||||
A higher discount rate tends to decrease the value of the liability and a lower discount rate tends to increase the value of the liability. | |||||||||||||||||||||||||||||||||
Higher index volatility tends to increase the value of the liability and lower index volatility tends to decrease the value of the liability. | |||||||||||||||||||||||||||||||||
Equity Indexed Products | |||||||||||||||||||||||||||||||||
The following table summarizes significant unobservable inputs used for fair value measurements for indexed universal life equity indexed products classified as Level 3 as of December 31, 2013: | |||||||||||||||||||||||||||||||||
Unobservable Inputs | Range | ||||||||||||||||||||||||||||||||
Mortality | 0%-4%1 | ||||||||||||||||||||||||||||||||
Lapse | 0%-10% | ||||||||||||||||||||||||||||||||
Index volatility | 15%-25% | ||||||||||||||||||||||||||||||||
1 | Represents the mortality for the majority of business, with policyholders ranging from 0 to 75. | ||||||||||||||||||||||||||||||||
The following changes in any of the significant unobservable inputs presented in the table above may result in a change in the fair value measurements of the equity indexed products: | |||||||||||||||||||||||||||||||||
Higher mortality rates tend to decrease the value of the liability and lower mortality rates tend to increase the value of the liability. | |||||||||||||||||||||||||||||||||
Higher lapse rates tend to decrease the value of the liability and lower lapse rates tend to increase the value of the liability. Factors that impact the predicted lapse rate can include: age, policy duration, policy size, and applicable surrender charges. All else being equal, policies with a surrender charge present will have lower lapse rates than policies without a surrender charge. | |||||||||||||||||||||||||||||||||
Higher index volatility tends to increase the value of the liability and lower index volatility tends to decrease the value of the liability. | |||||||||||||||||||||||||||||||||
Separate Accounts | |||||||||||||||||||||||||||||||||
The Company’s separate account assets include an investment in a mutual fund with a non-readily determinable fair value. Net asset value has been used to estimate the fair value of this investment as a practical expedient. The investments are included in Level 3 as they may not be redeemed until a seven year guarantee period expires in 2016. The investment strategy of this fund is to build a portfolio where the assets shall be sufficient to achieve a target portfolio value by the end of the seven year guarantee period. The net asset value of this fund reported in separate account assets was $1.7 billion and $1.6 billion as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||||
The following table summarizes assets and liabilities held at fair value on a recurring basis as of December 31, 2012: | |||||||||||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. | $ | 592 | $ | 2 | $ | 3 | $ | 597 | |||||||||||||||||||||||||
Government corporations and agencies | |||||||||||||||||||||||||||||||||
Obligations of states, political subdivisions and foreign governments | 73 | 2,047 | — | 2,120 | |||||||||||||||||||||||||||||
Corporate public securities | 1 | 17,890 | 119 | 18,010 | |||||||||||||||||||||||||||||
Corporate private securities | — | 3,817 | 772 | 4,589 | |||||||||||||||||||||||||||||
Residential mortgage-backed securities | 484 | 4,173 | 10 | 4,667 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,335 | 2 | 1,337 | |||||||||||||||||||||||||||||
Other asset-backed securities | — | 200 | 291 | 491 | |||||||||||||||||||||||||||||
Total fixed maturity securities, available-for-sale, at fair value | $ | 1,150 | $ | 29,464 | $ | 1,197 | $ | 31,811 | |||||||||||||||||||||||||
Other investments at fair value | 45 | 1,001 | 62 | 1,108 | |||||||||||||||||||||||||||||
Investments at fair value | $ | 1,195 | $ | 30,465 | $ | 1,259 | $ | 32,919 | |||||||||||||||||||||||||
Derivative assets | — | 1,968 | 822 | 2,790 | |||||||||||||||||||||||||||||
Separate account assets | 68,185 | 1,230 | 2,025 | 71,440 | |||||||||||||||||||||||||||||
Assets at fair value | $ | 69,380 | $ | 33,663 | $ | 4,106 | $ | 107,149 | |||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Future policy benefits and claims: | |||||||||||||||||||||||||||||||||
Embedded derivatives on living benefits | $ | — | $ | — | $ | (657 | ) | $ | (657 | ) | |||||||||||||||||||||||
Embedded derivatives on indexed products | — | — | (91 | ) | (91 | ) | |||||||||||||||||||||||||||
Total future policy benefits and claims | $ | — | $ | — | $ | (748 | ) | $ | (748 | ) | |||||||||||||||||||||||
Derivative liabilities | — | (2,118 | ) | (5 | ) | (2,123 | ) | ||||||||||||||||||||||||||
Liabilities at fair value | $ | — | $ | (2,118 | ) | $ | (753 | ) | $ | (2,871 | ) | ||||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2012: | |||||||||||||||||||||||||||||||||
Balance | Net gains (losses) | Balance | |||||||||||||||||||||||||||||||
as of | In other | Transfers | Transfers | as of | |||||||||||||||||||||||||||||
December | comprehensive | into | out of | December | |||||||||||||||||||||||||||||
(in millions) | 31, 2011 | In operations1 | income | Purchases | Sales | Level 3 | Level 3 | 31, 2012 | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
Corporate private securities | $ | 1,209 | $ | 2 | $ | 13 | $ | 69 | $ | (187 | ) | $ | 40 | $ | (374 | ) | $ | 772 | |||||||||||||||
Other asset-backed securities | 251 | 2 | 53 | 36 | (61 | ) | 10 | — | 291 | ||||||||||||||||||||||||
Other | 131 | — | 11 | 2 | (8 | ) | 1 | (3 | ) | 134 | |||||||||||||||||||||||
Total fixed maturity securities, available-for-sale, at fair value2 | $ | 1,591 | 4 | 77 | 107 | (256 | ) | 51 | (377 | ) | 1,197 | ||||||||||||||||||||||
Other investments at fair value | 43 | 16 | 3 | — | — | — | — | 62 | |||||||||||||||||||||||||
Derivative assets3 | 1,004 | (353 | ) | — | 350 | (179 | ) | — | — | 822 | |||||||||||||||||||||||
Separate account assets | 1,952 | 73 | — | — | — | — | — | 2,025 | |||||||||||||||||||||||||
Assets at fair value | $ | 4,590 | $ | (260 | ) | $ | 80 | $ | 457 | $ | (435 | ) | $ | 51 | $ | (377 | ) | $ | 4,106 | ||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Future policy benefits and claims: | |||||||||||||||||||||||||||||||||
Embedded derivatives on living benefits | $ | (1,842 | ) | $ | 1,185 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (657 | ) | |||||||||||||||
Embedded derivatives on indexed products | (63 | ) | (28 | ) | — | — | — | — | — | (91 | ) | ||||||||||||||||||||||
Total future policy benefits and claims | $ | (1,905 | ) | $ | 1,157 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (748 | ) | |||||||||||||||
Derivative liabilities3 | (6 | ) | 1 | — | — | — | — | — | (5 | ) | |||||||||||||||||||||||
Liabilities at fair value | $ | (1,911 | ) | $ | 1,158 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (753 | ) | |||||||||||||||
1 | Net gains and losses included in operations are reported in net realized investment gains and losses and interest credited to policyholder accounts. The net unrealized gains on separate account assets are attributable to contractholders and therefore are not included in the Company’s earnings. The change in unrealized gains (losses) included in operations on assets and liabilities still held as of the end of the year was $16 million for other investments at fair value, $(257) million for derivative assets, $1.2 billion for future policy benefits and claims and $(1) million for derivative liabilities. | ||||||||||||||||||||||||||||||||
2 | Non-binding broker quotes were utilized to determine a fair value of $1.1 billion of total fixed maturity securities as of December 31, 2012. | ||||||||||||||||||||||||||||||||
3 | Non-binding broker quotes were utilized to determine a fair value of all Level 3 derivative assets and liabilities. | ||||||||||||||||||||||||||||||||
During the year ended December 31, 2012, transfers from Level 1 to Level 2 within the debt securities issued by foreign governments were $42 million. There were no transfers from Level 2 to Level 1 during the year ended December 31, 2012. | |||||||||||||||||||||||||||||||||
Transfers into and out of Level 3 during the year ended December 31, 2012 represented changes in the sources used to price certain securities and changes in the Company’s assumptions related to the observability of certain inputs. | |||||||||||||||||||||||||||||||||
Financial Instruments Not Carried at Fair Value | |||||||||||||||||||||||||||||||||
The following table summarizes the carrying value and fair value of the Company’s financial instruments not carried at fair value as of the dates indicated. The valuation techniques used to estimate these fair values are described below. | |||||||||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||||||||||||||
(in millions) | value | value | Level 2 | Level 3 | value | value | Level 2 | Level 3 | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Mortgage loans, net of allowance | $ | 6,341 | $ | 6,481 | $ | — | $ | 6,481 | $ | 5,827 | $ | 5,988 | $ | — | $ | 5,988 | |||||||||||||||||
Policy loans | $ | 987 | $ | 987 | $ | — | $ | 987 | $ | 980 | $ | 980 | $ | — | $ | 980 | |||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Investment contracts | $ | 21,874 | $ | 20,436 | $ | — | $ | 20,436 | $ | 20,123 | $ | 19,561 | $ | — | $ | 19,561 | |||||||||||||||||
Short-term debt | $ | 278 | $ | 278 | $ | — | $ | 278 | $ | 300 | $ | 300 | $ | — | $ | 300 | |||||||||||||||||
Long-term debt | $ | 707 | $ | 1,004 | $ | 997 | $ | 7 | $ | 1,038 | $ | 1,323 | $ | 1,282 | $ | 41 | |||||||||||||||||
Mortgage loans, net of allowance. The fair values of mortgage loans are estimated using discounted cash flow analyses based on interest rates currently being offered for similar loans to borrowers with similar credit ratings. | |||||||||||||||||||||||||||||||||
Policy loans. The carrying amount reported in the consolidated balance sheets approximates fair value. | |||||||||||||||||||||||||||||||||
Investment contracts. For investment contracts without defined maturities, fair value is the amount payable on demand, net of surrender charges. For investment contracts with known or determined maturities, fair value is estimated using discounted cash flow analysis. Interest rates used in this analysis are similar to currently offered contracts with maturities consistent with those remaining for the contracts being valued. The fair value of adjustable rate contracts approximates their carrying value. | |||||||||||||||||||||||||||||||||
Short-term debt. The carrying amount reported in the consolidated balance sheets approximates fair value. | |||||||||||||||||||||||||||||||||
Long-term debt. The fair value for long-term debt are based on estimated market prices using observable inputs from similar debt instruments. |
Goodwill
Goodwill | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Goodwill | ' | ||||||||||||
(9) Goodwill | |||||||||||||
The following table summarizes changes in the carrying value of goodwill by segment for the years indicated: | |||||||||||||
(in millions) | Retirement | Individual | Total | ||||||||||
Plans | Products | ||||||||||||
& | |||||||||||||
Solutions - | |||||||||||||
Life and | |||||||||||||
NBSG | |||||||||||||
Balance as of December 31, 20111 | $ | 25 | $ | 175 | $ | 200 | |||||||
Adjustments | — | — | — | ||||||||||
Balance as of December 31, 20121 | $ | 25 | $ | 175 | $ | 200 | |||||||
Adjustments | — | — | — | ||||||||||
Balance as of December 31, 20131 | $ | 25 | $ | 175 | $ | 200 | |||||||
1 | The goodwill balances have not been previously impaired. |
Closed_Block
Closed Block | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Closed Block | ' | ||||||||||||
(10) Closed Block | |||||||||||||
The amounts shown in the following tables for assets, liabilities, revenues and expenses of the closed block are those that enter into the determination of amounts that are to be paid to policyholders. | |||||||||||||
The following table summarizes financial information for the closed block, as of the dates indicated: | |||||||||||||
December 31, | December 31, | ||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
Liabilities: | |||||||||||||
Future policyholder benefits | $ | 1,703 | $ | 1,732 | |||||||||
Policyholder funds and accumulated dividends | 141 | 142 | |||||||||||
Policyholder dividends payable | 23 | 24 | |||||||||||
Policyholder dividend obligation | 113 | 198 | |||||||||||
Other policy obligations and liabilities | 29 | 32 | |||||||||||
Total liabilities | $ | 2,009 | $ | 2,128 | |||||||||
Assets: | |||||||||||||
Fixed maturity securities, available-for-sale | $ | 1,320 | $ | 1,511 | |||||||||
Mortgage loans, net of allowance | 257 | 183 | |||||||||||
Policy loans | 157 | 164 | |||||||||||
Other assets | 93 | 77 | |||||||||||
Total assets | $ | 1,827 | $ | 1,935 | |||||||||
Excess of reported liabilities over assets | 182 | 193 | |||||||||||
Portion of above representing other comprehensive income: | |||||||||||||
(Decrease) increase in unrealized gain on fixed maturity securities, available-for-sale | $ | (92 | ) | $ | 45 | ||||||||
Adjustment to policyholder dividend obligation | 92 | (45 | ) | ||||||||||
Total | $ | — | $ | — | |||||||||
Maximum future earnings to be recognized from assets and liabilities | $ | 182 | $ | 193 | |||||||||
Other comprehensive income: | |||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||
Fair value | $ | 1,320 | $ | 1,511 | |||||||||
Amortized cost | 1,235 | 1,334 | |||||||||||
Shadow policyholder dividend obligation | (85 | ) | (177 | ) | |||||||||
Net unrealized appreciation | $ | — | $ | — | |||||||||
The following table summarizes closed block operations for the years ended: | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Revenues: | |||||||||||||
Premiums | $ | 66 | $ | 73 | $ | 77 | |||||||
Net investment income | 94 | 98 | 102 | ||||||||||
Realized investment gains (losses) | — | 1 | (3 | ) | |||||||||
Realized losses credited to policyholder benefit obligation | (4 | ) | (5 | ) | (1 | ) | |||||||
Total revenues | $ | 156 | $ | 167 | $ | 175 | |||||||
Benefits and expenses: | |||||||||||||
Policy and contract benefits | $ | 123 | $ | 134 | $ | 145 | |||||||
Change in future policyholder benefits and interest credited to policyholder accounts | (29 | ) | (27 | ) | (35 | ) | |||||||
Policyholder dividends | 44 | 50 | 55 | ||||||||||
Change in policyholder dividend obligation | 3 | (8 | ) | (8 | ) | ||||||||
Other expenses | (2 | ) | 1 | 1 | |||||||||
Total benefits and expenses | $ | 139 | $ | 150 | $ | 158 | |||||||
Total revenues, net of benefits and expenses, before federal income tax expense | $ | 17 | $ | 17 | $ | 17 | |||||||
Federal income tax expense | 6 | 6 | 6 | ||||||||||
Revenues, net of benefits and expenses and federal income tax expense | $ | 11 | $ | 11 | $ | 11 | |||||||
Maximum future earnings from assets and liabilities: | |||||||||||||
Beginning of period | $ | 193 | $ | 204 | $ | 215 | |||||||
Change during period | (11 | ) | (11 | ) | (11 | ) | |||||||
End of period | $ | 182 | $ | 193 | $ | 204 | |||||||
Cumulative closed block earnings from inception through December 31, 2013, 2012 and 2011 were higher than expected as determined in the actuarial calculation. Therefore, policyholder dividend obligations (excluding the adjustment for unrealized gains on available-for-sale securities) were $28 million, $21 million and $23 million as of December 31, 2013, 2012 and 2011, respectively. |
ShortTerm_Debt
Short-Term Debt | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Short-Term Debt | ' | ||||||||
(11) Short-Term Debt | |||||||||
The Company classifies debt as short-term if the maturity date at inception is less than one year and all other debt instruments as long-term. | |||||||||
The following table summarizes the carrying value of short-term debt and weighted average annual interest rates, as of the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
(in millions) | 2013 | 2012 | |||||||
$600 million commercial paper program (0.24% and 0.29%, respectively) | $ | 278 | $ | 300 | |||||
Total short-term debt | $ | 278 | $ | 300 | |||||
In March 2012, NLIC entered into an agreement with the FHLB that allows the Company access to borrow up to $250 million and expires on March 28, 2014. The Company had $4.3 billion in eligible collateral and no amounts outstanding under the agreement as of December 31, 2013. Additionally, as part of the agreement, NLIC purchased $25 million in capital stock with the FHLB. | |||||||||
In May 2011, NMIC, NFS, and NLIC entered into a $600 million revolving variable rate credit facility upon expiration of its existing facility of the same amount. The new facility matures on May 6, 2015 and is subject to various covenants, as defined in the agreement. NLIC had no amounts outstanding under the facility as of December 31, 2013 and 2012. | |||||||||
The Company has entered into an agreement with its custodial bank to borrow against the cash collateral that is posted in connection with its securities lending program. The maximum amount available under the agreement is $350 million. The borrowing rate on this program is equal to one-month U.S. LIBOR. The Company had no amounts outstanding under this agreement as of December 31, 2013 and 2012. | |||||||||
The terms of each debt instrument contain various restrictive covenants, including, but not limited to, minimum statutory surplus and minimum net worth requirements, and maximum debt to tangible net worth requirements, as defined in the agreements. The Company was in compliance with all covenants as of December 31, 2013 and 2012. | |||||||||
The amount of interest paid on short-term debt was immaterial in 2013, 2012 and 2011. |
LongTerm_Debt
Long-Term Debt | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long-Term Debt | ' | ||||||||
(12) Long-Term Debt | |||||||||
The following table summarizes the carrying value of long-term debt, as of the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
(in millions) | 2013 | 2012 | |||||||
8.15% surplus note, due June 26, 2032, payable to NFS | $ | 300 | $ | 300 | |||||
7.50% surplus note, due December 17, 2031, payable to NFS | 300 | 300 | |||||||
6.75% surplus note, due December 23, 2033, payable to NFS | 100 | 100 | |||||||
Variable funding surplus note, repaid June 2013 | — | 297 | |||||||
Other | 7 | 41 | |||||||
Total long-term debt | $ | 707 | $ | 1,038 | |||||
On December 31, 2010, Olentangy Reinsurance, LLC (Olentangy), a special purpose financial captive insurance company subsidiary of NLAIC domiciled in the State of Vermont, issued a variable funding surplus note due on December 31, 2040 to Nationwide Corporation, a majority-owned subsidiary of NMIC. In June 2013, the Company paid the outstanding balance of the surplus note. The Company made interest payments on this surplus note totaling $5 million and $10 million for the years ending December 31, 2013 and 2012, respectively. Any payment of interest or principal on the note requires the prior approval of the State of Vermont. | |||||||||
The Company made interest payments to NFS on surplus notes totaling $54 million for the years ended December 31, 2013, 2012 and 2011. Payments of interest and principal under the notes require the prior approval of the ODI. |
Federal_Income_Taxes
Federal Income Taxes | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Federal Income Taxes | ' | ||||||||||||||||||||||||
(13) Federal Income Taxes | |||||||||||||||||||||||||
The following table summarizes the federal income tax expense (benefit) attributable to income (loss) before loss attributable to noncontrolling interests, for the years ended: | |||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
(in millions) | 2013 | 2012 | 20111 | ||||||||||||||||||||||
Current tax (benefit) expense | $ | (33 | ) | $ | (144 | ) | $ | 55 | |||||||||||||||||
Deferred tax expense (benefit) | 346 | 243 | (482 | ) | |||||||||||||||||||||
Total tax expense (benefit) | $ | 313 | $ | 99 | $ | (427 | ) | ||||||||||||||||||
1 | The balances reflect a change in accounting principle, as described in Note 2. | ||||||||||||||||||||||||
The following table summarizes how the total federal income tax expense (benefit) differs from the amount computed by applying the U.S. federal income tax rate to income (loss) before loss attributable to noncontrolling interests, for the years ended: | |||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2013 | 2012 | 20111 | |||||||||||||||||||||||
(in millions) | Amount | % | Amount | % | Amount | % | |||||||||||||||||||
Rate reconciliation: | |||||||||||||||||||||||||
Computed (expected tax expense (benefit)) | $ | 469 | 35 | % | $ | 245 | 35 | % | $ | (297 | ) | 35 | % | ||||||||||||
Dividends received deduction | (112 | ) | (8 | )% | (75 | ) | (11 | )% | (99 | ) | 12 | % | |||||||||||||
Tax credits | (82 | ) | (6 | )% | (85 | ) | (12 | )% | (30 | ) | 3 | % | |||||||||||||
Other, net | 38 | 2 | % | 14 | 2 | % | (1 | ) | — | % | |||||||||||||||
Total | $ | 313 | 23 | % | $ | 99 | 14 | % | $ | (427 | ) | 50 | % | ||||||||||||
1 | The balances reflect a change in accounting principle, as described in Note 2. | ||||||||||||||||||||||||
The Company’s current federal income tax (liability) receivable was $(13) million and $61 million as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Total federal income taxes (refunded) paid were $(107) million, $(95) million and $121 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||
During 2013 and 2011, the Company recorded a tax benefit of $13 million and $10 million, respectively. These changes in estimates were primarily driven by differences in the Company’s separate account dividends received deduction (“DRD”) between the previous year’s estimate and the amount reported on the previous year’s tax return. No material changes in estimated income tax expense were recorded in 2012. | |||||||||||||||||||||||||
As of December 31, 2013, the Company has gross federal net operating loss carryforwards of $797 million, which expire between 2027 and 2028. In addition, the Company has $222 million in low-income-housing credit carryforwards, which expire between 2024 and 2033, $90 million in alternative minimum tax credit carryforwards, which have an unlimited carryforward and $40 million in foreign tax credit carryforwards which expire between 2019 and 2023. The Company expects to fully utilize all carryforwards. | |||||||||||||||||||||||||
The following table summarizes the tax effects of temporary differences that gave rise to significant components of the net deferred tax liability included in other liabilities in the consolidated balance sheets, as of the dates indicated: | |||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||||
Future policy benefits and claims | $ | 1,244 | $ | 1,295 | |||||||||||||||||||||
Derivatives, including embedded derivatives | — | 94 | |||||||||||||||||||||||
Tax credit carryforwards | 352 | 288 | |||||||||||||||||||||||
Other | 845 | 478 | |||||||||||||||||||||||
Gross deferred tax assets | $ | 2,441 | $ | 2,155 | |||||||||||||||||||||
Valuation allowance | (17 | ) | (18 | ) | |||||||||||||||||||||
Net deferred tax assets | 2,424 | 2,137 | |||||||||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||||||
Deferred policy acquisition costs | $ | (1,048 | ) | $ | (874 | ) | |||||||||||||||||||
Available-for-sale securities | (821 | ) | (1,338 | ) | |||||||||||||||||||||
Derivatives, including embedded derivatives | (600 | ) | — | ||||||||||||||||||||||
Other | (255 | ) | (239 | ) | |||||||||||||||||||||
Gross deferred tax liabilities | $ | (2,724 | ) | $ | (2,451 | ) | |||||||||||||||||||
Net deferred tax liability | $ | (300 | ) | $ | (314 | ) | |||||||||||||||||||
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of the total gross deferred tax assets will not be realized. Valuation allowances are established when necessary to reduce the deferred tax assets to amounts expected to be realized. The valuation allowance was $17 million and $18 million as of December 31, 2013 and 2012, respectively. The change in the valuation allowance for the years ended December 31, 2013 and 2011 was $1 million and $6 million, respectively, while there was no change in the valuation allowance for the year ended December 31, 2012. Based on management’s analysis, it is more likely than not that the results of future operations and the implementation of tax planning strategies will generate sufficient taxable income to enable the Company to realize the deferred tax assets for which the Company has not established valuation allowances. | |||||||||||||||||||||||||
The following table is a rollforward of the beginning and ending uncertain tax positions, including permanent and temporary differences, but excluding interest and penalties: | |||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
Balance at beginning of period | $ | 36 | $ | 76 | $ | 119 | |||||||||||||||||||
Additions for current year tax positions | 2 | (2 | ) | 9 | |||||||||||||||||||||
Additions for prior years tax positions | — | 25 | — | ||||||||||||||||||||||
Reductions for prior years tax positions | (2 | ) | (63 | ) | (52 | ) | |||||||||||||||||||
Balance at end of period | $ | 36 | $ | 36 | $ | 76 | |||||||||||||||||||
The Company does not anticipate any significant changes to unrecognized tax benefits during the next twelve months. | |||||||||||||||||||||||||
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities through the 2005 tax year. In 2013, the IRS commenced an examination of the Company’s U.S. income tax returns for the years 2009 through 2010. Any adjustments that may result from IRS examination of tax returns are not expected to have a material effect on the results of operations, cash flows or financial position of the Company. |
Statutory_Financial_Informatio
Statutory Financial Information | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Statutory Financial Information | ' | ||||||||||||
(14) Statutory Financial Information | |||||||||||||
Statutory Results | |||||||||||||
The Company’s life insurance subsidiaries are required to prepare statutory financial statements in conformity with the statutory accounting practices prescribed and permitted by insurance regulatory authorities, subject to any deviations prescribed or permitted by the applicable state department of insurance. Olentangy was granted a permitted practice from the State of Vermont that changed NLAIC’s valuation of this subsidiary by $66 million as of December 31, 2013, which also allowed NLIC to admit additional deferred tax assets of $10 million as of December 31, 2013. Statutory accounting practices focus on insurer solvency and materially differ from GAAP primarily due to charging policy acquisition and other costs to expense as incurred, establishing future policy benefits and claims reserves using different actuarial assumptions, excluding certain assets from statutory admitted assets; and valuing investments and establishing deferred taxes on a different basis. | |||||||||||||
The following table summarizes the statutory net income (loss) and statutory capital and surplus for the Company’s primary life insurance subsidiary for the years ended: | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Statutory net income (loss) | |||||||||||||
NLIC | $ | 262 | $ | 764 | $ | 18 | |||||||
NLAIC | $ | (103 | ) | $ | (54 | ) | $ | (61 | ) | ||||
Statutory capital and surplus | |||||||||||||
NLIC | $ | 3,550 | $ | 3,837 | $ | 3,591 | |||||||
NLAIC | $ | 534 | $ | 311 | $ | 302 | |||||||
Dividend Restrictions | |||||||||||||
The payment of dividends by NLIC is subject to restrictions set forth in the insurance laws and regulations of the State of Ohio, its domiciliary state. The State of Ohio insurance laws require Ohio-domiciled life insurance companies to seek prior regulatory approval to pay a dividend or distribution of cash or other property if the fair market value thereof, together with that of other dividends or distributions made in the preceding 12 months, exceeds the greater of (1) 10% of statutory-basis policyholders’ surplus as of the prior December 31 or (2) the statutory-basis net income of the insurer for the prior year. During the years ended December 31, 2013 and 2011, NLIC did not pay any dividends to NFS. During the year ended December 31, 2012, NLIC paid a cash dividend of $40 million to NFS. As of January 1, 2014, NLIC has the ability to pay dividends to NFS totaling $355 million without obtaining prior approval. | |||||||||||||
The State of Ohio insurance laws also require insurers to seek prior regulatory approval for any dividend paid from other than earned surplus. Earned capital and surplus is defined under the State of Ohio insurance laws as the amount equal to the Company’s unassigned funds as set forth in its most recent statutory financial statements, including net unrealized capital gains and losses or revaluation of assets. Additionally, following any dividend, an insurer’s policyholder capital and surplus must be reasonable in relation to the insurer’s outstanding liabilities and adequate for its financial needs. The payment of dividends by the Company may also be subject to restrictions set forth in the insurance laws of the state of New York that limit the amount of statutory profits on the Company’s participating policies (measured before dividends to policyholders) available for the benefit of the Company and its stockholders. | |||||||||||||
The Company currently does not expect such regulatory requirements to impair the ability to pay operating expenses and dividends in the future. | |||||||||||||
Regulatory Risk-Based Capital | |||||||||||||
The National Association of Insurance Commissioners’ (“NAIC”) Risk-Based Capital (“RBC”) model law requires every insurer to calculate its total adjusted capital and RBC requirement to ensure insurer solvency. Regulatory guidelines provide for an insurance commissioner to intervene if the insurer experiences financial difficulty, as evidenced by a company’s total adjusted capital falling below established relationships to required RBC. The model includes components for asset risk, liability risk, interest rate exposure and other factors. The State of Ohio, where NLIC and NLAIC are domiciled, imposes minimum RBC requirements that are developed by the NAIC. The formulas in the model for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital, as defined by the NAIC, to authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, all of which require specified corrective action. NLIC and NLAIC each exceeded the minimum RBC requirements for all periods presented herein. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions | ' |
(15) Related Party Transactions | |
The Company has entered into significant, recurring transactions and agreements with NMIC, other affiliates and subsidiaries as a part of its ongoing operations. These include annuity and life insurance contracts, employee benefit plans, office space cost sharing arrangements, and agreements related to reinsurance, cost sharing, administrative services, marketing, intercompany loans, intercompany repurchases, cash management services and software licensing. Measures used to allocate expenses among companies include individual employee estimates of time spent, special cost studies, the number of full-time employees, commission expense and other methods agreed to by the participating companies. | |
In addition, Nationwide Services Company, LLC (“NSC”), a subsidiary of NMIC, provides data processing, systems development, hardware and software support, telephone, mail and other services to the Company, based on specified rates for units of service consumed. For the years ended December 31, 2013, 2012 and 2011, the Company made payments to NMIC and NSC totaling $277 million, $283 million and $241 million, respectively. | |
The Company has issued group annuity and life insurance contracts and performs administrative services for various employee benefit plans sponsored by NMIC or its affiliates. Total account values of these contracts were $3.3 billion and $3.2 billion as of December 31, 2013 and 2012, respectively. Total revenues from these contracts were $137 million, $140 million and $148 million for the years ended December 31, 2013, 2012 and 2011, respectively, and include policy charges, net investment income from investments backing the contracts and administrative fees. Total interest credited to the account balances was $109 million, $113 million and $122 million for the years ended December 31, 2013, 2012 and 2011, respectively. The terms of these contracts are materially consistent with what the Company offers to unaffiliated parties. | |
The Company has a cost sharing arrangement with NMIC to occupy office space. For the years ended December 31, 2013, 2012 and 2011, the Company made payments to NMIC of $16 million, $15 million and $14 million, respectively. In addition, an affiliate of NMIC has a cost sharing arrangement with the Company to occupy office space. | |
NLIC has a reinsurance agreement with NMIC whereby all of NLIC’s accident and health business not ceded to unaffiliated reinsurers is ceded to NMIC on a modified coinsurance basis. Either party may terminate the agreement on January 1 of any year with prior notice. Under a modified coinsurance agreement, the ceding company retains invested assets, and investment earnings are paid to the reinsurer. Under the terms of NLIC’s agreements, the investment risk associated with changes in interest rates is borne by the reinsurer. The ceding of risk does not discharge the original insurer from its primary obligation to the policyholder. The Company believes that the terms of the modified coinsurance agreements are consistent in all material respects with what the Company could have obtained with unaffiliated parties. Revenues ceded to NMIC for the years ended December 31, 2013, 2012 and 2011 were $179 million, $161 million and $203 million, respectively, while benefits, claims and expenses ceded during these years were $178 million, $167 million and $212 million, respectively. | |
Funds of Nationwide Funds Group (“NFG”), an affiliate, are offered to the Company’s customers as investment options in certain of the Company’s products. As of December 31, 2013 and 2012, customer allocations to NFG funds totaled $53.2 billion and $45.0 billion, respectively. For the years ended December 31, 2013, 2012 and 2011, NFG paid the Company $163 million, $144 million and $129 million, respectively, for the distribution and servicing of these funds. | |
Amounts on deposit with NCMC for the benefit of the Company were $228 million and $854 million as of December 31, 2013 and 2012, respectively. | |
Refer to Note 12 for discussion of variable funding surplus note between Olentangy Reinsurance, LLC and Nationwide Corporation. | |
Certain annuity products are sold through affiliated companies, which are also subsidiaries of NFS. Total commissions and fees paid to these affiliates were $54 million for the years ended December 31, 2013 and 2012 and $64 million for the year ended December 31, 2011. | |
The Company provides financing to Nationwide Realty Investors, LTD, a subsidiary of NMIC. As of December 31, 2013 and 2012, the Company had notes receivable outstanding of $146 million and $126 million, respectively. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2013 | |
Contingencies | ' |
(16) Contingencies | |
Legal and Regulatory Matters | |
The Company is subject to legal and regulatory proceedings in the ordinary course of its business. The Company’s legal and regulatory matters include proceedings specific to the Company and other proceedings generally applicable to business practices in the industries in which the Company operates. These matters are subject to many uncertainties, and given their complexity and scope, their outcomes cannot be predicted. Regulatory proceedings could also affect the outcome of one or more of the Company’s litigation matters. Furthermore, it is often not possible to determine the ultimate outcomes of the pending regulatory investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and the Company does not have sufficient information to make an assessment of the plaintiffs’ claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. The Company believes, however, that based on currently known information, the ultimate outcome of all pending legal and regulatory matters is not likely to have a material adverse effect on the Company’s consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that such outcomes could materially affect the Company’s consolidated financial position or results of operations in a particular quarter or annual period. | |
The various businesses conducted by the Company are subject to oversight by numerous federal and state regulatory entities, including but not limited to the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Department of Labor, the IRS and state insurance authorities. Such regulatory entities may, in the normal course, be engaged in general or targeted inquiries, examinations and investigations of the Company and/or its affiliates. The financial services industry has been the subject of increasing scrutiny in connection with a broad spectrum of regulatory issues; with respect to all such scrutiny directed at the Company and/or its affiliates, the Company is cooperating with regulators. The Company will cooperate with NMIC insofar as any inquiry, examination or investigation encompasses NMIC’s operations. | |
On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. On November 18, 2009, the plaintiffs filed a sixth amended complaint amending the list of named plaintiffs and claiming to represent a class of qualified retirement plan trustees under the Employee Retirement Income Security Act of 1974 (“ERISA”) that purchased variable annuities from NLIC. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that NLIC and NFS breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by NFS and NLIC, other unspecified relief for restitution, declaratory and injunctive relief and attorneys’ fees. On November 6, 2009, the Court granted the plaintiffs’ motion for class certification. On October 21, 2010, the District Court dismissed NFS from the lawsuit. On February 6, 2012, the Second Circuit Court of Appeals vacated the November 6, 2009 order granting class certification and remanded the case back to the District Court for further consideration. On September 6, 2013, the District Court granted the plaintiffs’ motion for class certification. The case is set for trial beginning August 11, 2014. NLIC continues to defend this lawsuit vigorously. | |
On November 20, 2007, NRS and NLIC were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. On March 12, 2010, NRS and NLIC were named in a Second Amended Class Action Complaint filed in the Circuit Court of Jefferson County, Alabama entitled Steven E. Coker, Sandra H. Turner, David N. Lichtenstein and a class of similarly situated individuals v. Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc, Alabama State Employees Association, Inc., PEBCO, Inc. and Fictitious Defendants A to Z claiming to represent a class of all participants in the Alabama State Employees Association, Inc. (“ASEA”) Plan, excluding members of the Deferred Compensation Committee, ASEA’s directors, officers and board members, and PEBCO’s directors, officers and board members. On October 22, 2010, the parties to this action executed a court approved stipulation of settlement that agreed to certify a class for settlement purposes only, that provided for payments to the settlement class, and that provided for releases, certain bar orders, and dismissal of the case. The settlement fund has been paid out. On December 6, 2011, the Court entered an Order that NRS owes indemnification to ASEA and PEBCO for only the Coker (Gwin) class action, and dismissed NLIC. The Company has resolved the indemnification claims of ASEA. On February 15, 2013, the Court issued its Order determining the amount of fees due to PEBCO on its indemnification claim. On March 28, 2013, the Company filed a notice of appeal to the Alabama Supreme Court. The case is fully briefed. NRS continues to defend this case vigorously. | |
On June 8, 2011, NMIC and NLIC were named in a lawsuit filed in Court of Common Pleas, Cuyahoga County, Ohio entitled Stanley Andrews and Donald C. Clark v. Nationwide Mutual Insurance Company and Nationwide Life Insurance Company. The complaint alleges that NMIC and NLIC have an obligation to review the Social Security Administration Death Master File database for all life insurance policyholders who have at least a 70% probability of being deceased according to actuarial tables. The complaint further alleges that NMIC and NLIC are not conducting such a review. The complaint seeks injunctive relief and declaratory judgment requiring NMIC and NLIC to conduct such a review, and alleges NMIC and NLIC have violated the covenant of good faith and fair dealing and have been unjustly enriched by not having conducted such reviews. The lower court granted Nationwide’s motion to dismiss. Plaintiffs appealed. The Court of Appeals affirmed the dismissal on October 24, 2012. Plaintiffs filed a petition for rehearing en banc on November 5, 2012. The Court of Appeals denied the petition on December 14, 2012. Plaintiffs filed a notice of appeal to the Ohio Supreme Court on January 24, 2013. Nationwide filed its memorandum in opposition to plaintiffs’ petition for jurisdiction to the Ohio Supreme Court on February 27, 2013. The Ohio Supreme Court denied plaintiffs’ petition for review of the decision of the Court of Appeals on April 24, 2013. Plaintiffs’ time to file a petition for writ of certiorari to the U.S. Supreme Court has expired, concluding this matter. | |
In 2012, the Plaintiff, Debtor in Possession Lehman Brothers Special Financing, Inc., filed a class action in the United States Bankruptcy Court for the Southern District of New York seeking the recovery of nearly $3.0 billion in assets from all the named defendants including NLIC and NMIC. This litigation arises from two collateralized debt obligation transactions, 801 Grand and Alta, which resulted in payments to NLIC and NMIC after the Plaintiff and its parent company, Lehman Brothers Holding, Inc. filed for bankruptcy in 2008. This triggered an early termination of the above transactions. The Plaintiff seeks to have sums returned to the bankruptcy estate in addition to prejudgment interest and costs. The case is currently stayed. In 2013, Plaintiff sent correspondence to all defendants inviting settlement discussions and has served NMIC and NLIC with a “SPV Derivatives ADR Notice,” formally starting the Alternative Dispute Resolution process. NMIC and NLIC have responded, and are currently taking part in the ADR process. Mediation was scheduled for and proceeded on December 13, 2013, but the parties reached an impasse. On January 10, 2014, Lehman filed another motion to extend the stay for a final four month period. After a hearing, the court extended the stay to the later of (a) May 20, 2014 or (b) 30 days after the court enters a scheduling order governing the Distributed Action. The parties are negotiating the proposed scheduling order for the conduct of the Distributed Action litigation, which will be finalized by March 24, 2014. | |
Tax Matters | |
The Company’s federal income tax returns are routinely audited by the IRS. The Company has established tax reserves as described in Note 2. The Company believes its tax reserves reasonably provide for potential assessments that may result from IRS examinations and other tax-related matters for all open tax years. | |
Indemnifications | |
In the normal course of business, the Company provides standard indemnifications to contractual counterparties. The types of indemnifications typically provided include breaches of representations and warranties, taxes and certain other liabilities, such as third party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated, and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations. |
Reinsurance
Reinsurance | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Reinsurance | ' | ||||||||||||
(17) Reinsurance | |||||||||||||
The following table summarizes the effects of reinsurance on life, accident and health insurance in force and premiums for the years ended: | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Premiums | |||||||||||||
Direct | $ | 1,015 | $ | 890 | $ | 832 | |||||||
Assumed from other companies | — | — | — | ||||||||||
Ceded to other companies | (291 | ) | (255 | ) | (301 | ) | |||||||
Net | $ | 724 | $ | 635 | $ | 531 | |||||||
Life, accident and health insurance in force | |||||||||||||
Direct | $ | 228,095 | $ | 216,002 | $ | 209,732 | |||||||
Assumed from other companies | 6 | 5 | 5 | ||||||||||
Ceded to other companies | (58,310 | ) | (59,895 | ) | (60,499 | ) | |||||||
Net | $ | 169,791 | $ | 156,112 | $ | 149,238 | |||||||
Total amounts recoverable under reinsurance contracts totaled $675 million, $684 million and $704 million as of December 31, 2013, 2012 and 2011, respectively. |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Segment Information | ' | ||||||||||||||||||||
(18) Segment Information | |||||||||||||||||||||
Management views the Company’s business primarily based on its underlying products and uses this basis to define its four reportable segments: Individual Products and Solutions-Annuity (formerly named Individual Investments), Retirement Plans, Individual Products and Solutions-Life and NBSG (formerly named Individual Protection) and Corporate and Other. | |||||||||||||||||||||
The primary segment profitability measure that management uses is a non-GAAP financial measure called pre-tax operating earnings (loss), which is calculated by adjusting income before federal income taxes to exclude: (1) net realized investment gains and losses, except for operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts); (2) the adjustment to amortization of DAC and other related to net realized investment gains and losses; and (3) net losses attributable to noncontrolling interest. | |||||||||||||||||||||
Due to a change in the manner in which we view our reportable segments, certain prior period amounts have been restated. | |||||||||||||||||||||
Individual Products and Solutions-Annuity | |||||||||||||||||||||
The Individual Products & Solutions-Annuity segment consists of individual annuity products marketed under the Nationwide DestinationSM and other Nationwide-specific or private label brands. Deferred annuity contracts provide the customer with tax-deferred accumulation of savings and flexible payout options including lump sum, systematic withdrawal or a stream of payments for life. In addition, deferred variable annuity contracts provide the customer with access to a wide range of investment options and asset protection features, while deferred fixed annuity contracts generate a return for the customer at a specified interest rate fixed for prescribed periods. Immediate annuities differ from deferred annuities in that the initial premium is exchanged for a stream of income for a certain period or for the owner’s lifetime without future access to the original investment. The majority of assets and recent sales for the Individual Products & Solutions-Annuity segment consist of deferred variable annuities. | |||||||||||||||||||||
Retirement Plans | |||||||||||||||||||||
The Retirement Plans segment is comprised of the Company’s private and public sector retirement plans businesses. The private sector primarily includes Internal Revenue Code (“IRC”) Section 401 fixed and variable group annuity business, and the public sector primarily includes IRC Section 457 and Section 401(a) business in the form of full-service arrangements that provide plan administration and fixed and variable group annuities as well as administration-only business. The Retirement Plan segment also includes managed account services and stable value wrap products. | |||||||||||||||||||||
Individual Products and Solutions-Life and NBSG | |||||||||||||||||||||
The Individual Products & Solutions-Life and NBSG segment consists of life insurance products, including individual variable universal life, COLI and BOLI products; traditional life insurance products; fixed universal life insurance products; and indexed universal life products. Life insurance products provide a death benefit and generally allow the customer to build cash value on a tax-advantaged basis. | |||||||||||||||||||||
Corporate and Other | |||||||||||||||||||||
The Corporate and Other segment includes non-operating realized gains and losses and related amortization, including mark-to-market adjustments on embedded derivatives, net of economic hedges, related to products with living benefits included in the Individual Products & Solutions-Annuity segment and other revenues and expenses not allocated to other segments. | |||||||||||||||||||||
The following tables summarize the Company’s business segment operating results for the years ended: | |||||||||||||||||||||
(in millions) | Individual | Retirement | Individual | Corporate | Total | ||||||||||||||||
Products and | Plans | Products and | and Other | ||||||||||||||||||
Solutions- | Solutions-Life | ||||||||||||||||||||
Annuity | and NBSG | ||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Policy charges | $ | 1,021 | $ | 101 | $ | 727 | $ | — | $ | 1,849 | |||||||||||
Premiums | 416 | — | 282 | 26 | 724 | ||||||||||||||||
Net investment income | 546 | 743 | 544 | 16 | 1,849 | ||||||||||||||||
Non-operating net realized investment gains, net of other-than-temporary impairment losses1 | — | — | — | 791 | 791 | ||||||||||||||||
Other revenues2 | (109 | ) | — | — | 13 | (96 | ) | ||||||||||||||
Total revenues | $ | 1,874 | $ | 844 | $ | 1,553 | $ | 846 | $ | 5,117 | |||||||||||
Benefits and expenses: | |||||||||||||||||||||
Interest credited to policyholder accounts | $ | 377 | $ | 473 | $ | 213 | $ | 4 | $ | 1,067 | |||||||||||
Benefits and claims | 688 | — | 636 | 30 | 1,354 | ||||||||||||||||
Policyholder dividends | — | — | 61 | (2 | ) | 59 | |||||||||||||||
Amortization of DAC | 185 | (2 | ) | 125 | 66 | 374 | |||||||||||||||
Other expenses, net of deferrals | 303 | 151 | 284 | 184 | 922 | ||||||||||||||||
Total benefits and expenses | $ | 1,553 | $ | 622 | $ | 1,319 | $ | 282 | $ | 3,776 | |||||||||||
Income before federal income taxes and noncontrolling interests | $ | 321 | $ | 222 | $ | 234 | $ | 564 | $ | 1,341 | |||||||||||
Less: non-operating net realized investment gains, net of other-than-temporary impairment losses1 | — | — | — | (791 | ) | ||||||||||||||||
Less: adjustment to amortization of DAC and other related to net realized investment gains and losses | — | — | — | 70 | |||||||||||||||||
Less: net loss attributable to noncontrolling interest | — | — | — | 82 | |||||||||||||||||
Pre-tax operating earnings (loss) | $ | 321 | $ | 222 | $ | 234 | $ | (75 | ) | ||||||||||||
Assets as of year end | $ | 68,805 | $ | 29,904 | $ | 27,183 | $ | 7,553 | $ | 133,445 | |||||||||||
1 | Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts). | ||||||||||||||||||||
2 | Includes operating items discussed above. | ||||||||||||||||||||
(in millions) | Individual | Retirement | Individual | Corporate | Total | ||||||||||||||||
Products and | Plans | Products and | and Other | ||||||||||||||||||
Solutions- | Solutions-Life | ||||||||||||||||||||
Annuity | and NBSG | ||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Policy charges | $ | 899 | $ | 94 | $ | 677 | $ | — | $ | 1,670 | |||||||||||
Premiums | 334 | — | 274 | 27 | 635 | ||||||||||||||||
Net investment income | 551 | 736 | 534 | 4 | 1,825 | ||||||||||||||||
Non-operating net realized investment gains, net of other-than-temporary impairment losses1 | — | — | — | 428 | 428 | ||||||||||||||||
Other revenues2 | (124 | ) | — | — | 22 | (102 | ) | ||||||||||||||
Total revenues | $ | 1,660 | $ | 830 | $ | 1,485 | $ | 481 | $ | 4,456 | |||||||||||
Benefits and expenses: | |||||||||||||||||||||
Interest credited to policyholder accounts | $ | 375 | $ | 457 | $ | 199 | $ | 7 | $ | 1,038 | |||||||||||
Benefits and claims | 595 | — | 589 | 43 | 1,227 | ||||||||||||||||
Policyholder dividends | — | — | 57 | (3 | ) | 54 | |||||||||||||||
Amortization of DAC | 185 | 14 | 150 | 226 | 575 | ||||||||||||||||
Other expenses, net of deferrals | 285 | 163 | 250 | 165 | 863 | ||||||||||||||||
Total benefits and expenses | $ | 1,440 | $ | 634 | $ | 1,245 | $ | 438 | $ | 3,757 | |||||||||||
Income before federal income taxes and noncontrolling interests | $ | 220 | $ | 196 | $ | 240 | $ | 43 | $ | 699 | |||||||||||
Less: non-operating net realized investment gains, net of other-than-temporary impairment losses1 | — | — | — | (428 | ) | ||||||||||||||||
Less: adjustment to amortization of DAC and other related to net realized investment gains and losses | — | — | — | 243 | |||||||||||||||||
Less: net loss attributable to noncontrolling interest | — | — | — | 61 | |||||||||||||||||
Pre-tax operating earnings (loss) | $ | 220 | $ | 196 | $ | 240 | $ | (81 | ) | ||||||||||||
Assets as of year end | $ | 58,707 | $ | 27,842 | $ | 25,301 | $ | 8,320 | $ | 120,170 | |||||||||||
1 | Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts). | ||||||||||||||||||||
2 | Includes operating items discussed above. | ||||||||||||||||||||
(in millions) | Individual | Retirement | Individual | Corporate | Total | ||||||||||||||||
Products and | Plans | Products and | and Other | ||||||||||||||||||
Solutions- | Solutions-Life | ||||||||||||||||||||
Annuity | and NBSG | ||||||||||||||||||||
December 31, 20113 | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Policy charges | $ | 781 | $ | 96 | $ | 629 | $ | — | $ | 1,506 | |||||||||||
Premiums | 234 | — | 272 | 25 | 531 | ||||||||||||||||
Net investment income | 527 | 715 | 531 | 71 | 1,844 | ||||||||||||||||
Non-operating net realized investment losses, net of other-than-temporary impairment losses1 | — | — | — | (1,613 | ) | (1,613 | ) | ||||||||||||||
Other revenues2 | (59 | ) | — | — | (1 | ) | (60 | ) | |||||||||||||
Total revenues | $ | 1,483 | $ | 811 | $ | 1,432 | $ | (1,518 | ) | $ | 2,208 | ||||||||||
Benefits and expenses: | |||||||||||||||||||||
Interest credited to policyholder accounts | $ | 374 | $ | 441 | $ | 198 | $ | 20 | $ | 1,033 | |||||||||||
Benefits and claims | 476 | — | 577 | 9 | 1,062 | ||||||||||||||||
Policyholder dividends | — | — | 67 | — | 67 | ||||||||||||||||
Amortization of DAC | 80 | 11 | 75 | (101 | ) | 65 | |||||||||||||||
Other expenses, net of deferrals | 269 | 166 | 235 | 160 | 830 | ||||||||||||||||
Total benefits and expenses | $ | 1,199 | $ | 618 | $ | 1,152 | $ | 88 | $ | 3,057 | |||||||||||
Income (loss) before federal income taxes and noncontrolling interests | $ | 284 | $ | 193 | $ | 280 | $ | (1,606 | ) | $ | (849 | ) | |||||||||
Less: non-operating net realized investment losses, net of other-than-temporary impairment losses1 | — | — | — | 1,613 | |||||||||||||||||
Less: adjustment to amortization of DAC and other related to net realized investment gains and losses | — | — | — | (115 | ) | ||||||||||||||||
Less: net loss attributable to noncontrolling interest | — | — | — | 56 | |||||||||||||||||
Pre-tax operating earnings (loss) | $ | 284 | $ | 193 | $ | 280 | $ | (52 | ) | ||||||||||||
Assets as of year end | $ | 57,741 | $ | 25,114 | $ | 22,503 | $ | 6,628 | $ | 111,986 | |||||||||||
1 | Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts). | ||||||||||||||||||||
2 | Includes operating items discussed above. | ||||||||||||||||||||
3 | The balances reflect a change in accounting principle, as described in Note 2. |
Consolidated_Summary_of_Invest
Consolidated Summary of Investments - Other Than Investments in Related Parties | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Consolidated Summary of Investments - Other Than Investments in Related Parties | ' | ||||||||||||
Schedule I Consolidated Summary of Investments – Other Than Investments in Related Parties | |||||||||||||
As of December 31, 2013 (in millions) | |||||||||||||
Column A | Column B | Column C | Column D | ||||||||||
Type of investment | Cost | Fair value | Amount at | ||||||||||
which shown | |||||||||||||
in the | |||||||||||||
consolidated | |||||||||||||
balance sheet | |||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||
Bonds: | |||||||||||||
U.S. Treasury securities and obligations of U.S. | $ | 484 | $ | 561 | $ | 561 | |||||||
Government corporations and agencies | |||||||||||||
Obligations of states, political subdivisions and foreign governments | 1,892 | 1,963 | 1,963 | ||||||||||
Public utilities | 2,616 | 2,759 | 2,759 | ||||||||||
All other corporate, mortgage-backed and asset-backed securities | 26,010 | 26,966 | 26,966 | ||||||||||
Total fixed maturity securities, available-for-sale | $ | 31,002 | $ | 32,249 | $ | 32,249 | |||||||
Equity securities, available-for-sale: | |||||||||||||
Common stocks: | |||||||||||||
Industrial, miscellaneous and all other | $ | 6 | $ | 14 | $ | 14 | |||||||
Nonredeemable preferred stocks | — | 10 | 10 | ||||||||||
Total equity securities, available-for-sale | $ | 6 | $ | 24 | $ | 24 | |||||||
Trading assets | 30 | 31 | 31 | ||||||||||
Mortgage loans, net of allowance | 6,376 | 6,341 | 1 | ||||||||||
Policy loans | 987 | 987 | |||||||||||
Other investments | 712 | 712 | |||||||||||
Short-term investments | 411 | 411 | |||||||||||
Total investments | $ | 39,524 | $ | 40,755 | |||||||||
1 | Difference from Column B primarily is attributable to valuation allowances due to impairments on mortgage loans (see Note 6 to the audited consolidated financial statements). |
Supplementary_Insurance_Inform
Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||
Supplementary Insurance Information | ' | ||||||||||||||||||
Schedule III Supplementary Insurance Information | |||||||||||||||||||
As of December 31, 2013, 2012 and 2011 and for each of the years then ended (in millions) | |||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | ||||||||||||||
Deferred | Future policy | ||||||||||||||||||
policy | benefits, losses, | Other policy | |||||||||||||||||
acquisition | claims and | Unearned | claims and | Premium | |||||||||||||||
Year: Segment | costs3 | loss expenses | premiums1 | benefits payable1 | revenue | ||||||||||||||
2013 | |||||||||||||||||||
IPS—Annuity | $ | 2,214 | $ | 10,985 | $ | 416 | |||||||||||||
Retirement Plans | 179 | 14,313 | — | ||||||||||||||||
IPS—Life and NBSG | 1,557 | 10,068 | 282 | ||||||||||||||||
Corporate and Other | (172 | ) | 1,399 | 26 | |||||||||||||||
Total | $ | 3,778 | $ | 36,765 | $ | 724 | |||||||||||||
2012 | |||||||||||||||||||
IPS—Annuity | $ | 2,110 | $ | 12,214 | $ | 334 | |||||||||||||
Retirement Plans | 168 | 13,628 | — | ||||||||||||||||
IPS—Life and NBSG | 1,442 | 9,564 | 301 | ||||||||||||||||
Corporate and Other | (471 | ) | 748 | — | |||||||||||||||
Total | $ | 3,249 | $ | 36,154 | $ | 635 | |||||||||||||
2011 | |||||||||||||||||||
IPS—Annuity | $ | 2,232 | $ | 12,550 | $ | 234 | |||||||||||||
Retirement Plans | 172 | 12,638 | — | ||||||||||||||||
IPS—Life and NBSG | 1,421 | 9,338 | 297 | ||||||||||||||||
Corporate and Other | (338 | ) | 726 | — | |||||||||||||||
Total | $ | 3,487 | $ | 35,252 | $ | 531 | |||||||||||||
Column A | Column G | Column H | Column I | Column J | Column K | ||||||||||||||
Net | Benefits, claims, | Amortization | Other | ||||||||||||||||
investment | losses and | of deferred policy | operating | Premiums | |||||||||||||||
Year: Segment | income2 | settlement expenses | acquisition costs3 | expenses2,3 | written | ||||||||||||||
2013 | |||||||||||||||||||
IPS—Annuity | $ | 546 | $ | 1,065 | $ | 185 | $ | 303 | |||||||||||
Retirement Plans | 743 | 473 | (2 | ) | 151 | ||||||||||||||
IPS—Life and NBSG | 544 | 910 | 125 | 284 | |||||||||||||||
Corporate and Other | 16 | 32 | 66 | 184 | |||||||||||||||
Total | $ | 1,849 | $ | 2,480 | $ | 374 | $ | 922 | |||||||||||
2012 | |||||||||||||||||||
IPS—Annuity | $ | 551 | $ | 970 | $ | 185 | $ | 285 | |||||||||||
Retirement Plans | 736 | 457 | 14 | 163 | |||||||||||||||
IPS—Life and NBSG | 536 | 868 | 150 | 255 | |||||||||||||||
Corporate and Other | 2 | 24 | 226 | 160 | |||||||||||||||
Total | $ | 1,825 | $ | 2,319 | $ | 575 | $ | 863 | |||||||||||
2011 | |||||||||||||||||||
IPS—Annuity | $ | 527 | $ | 850 | $ | 80 | $ | 269 | |||||||||||
Retirement Plans | 715 | 441 | 11 | 166 | |||||||||||||||
IPS—Life and NBSG | 533 | 863 | 75 | 238 | |||||||||||||||
Corporate and Other | 69 | 8 | (101 | ) | 157 | ||||||||||||||
Total | $ | 1,844 | $ | 2,162 | $ | 65 | $ | 830 | |||||||||||
1 | Unearned premiums and other policy claims and benefits payable are included in Column C amounts. | ||||||||||||||||||
2 | Allocations of net investment income and certain operating expenses are based on numerous assumptions and estimates, and reported segment operating results would change if different methods were applied. | ||||||||||||||||||
3 | The 2011 balances reflect a change in accounting principle, as described in Note 2. |
Reinsurance1
Reinsurance | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Reinsurance | ' | ||||||||||||||||||||
Schedule IV Reinsurance | |||||||||||||||||||||
As of December 31, 2013, 2012 and 2011 and for each of the years then ended (in millions) | |||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | ||||||||||||||||
Percentage | |||||||||||||||||||||
Ceded to | Assumed | of amount | |||||||||||||||||||
Gross | other | from other | Net | assumed | |||||||||||||||||
amount | companies | companies | amount | to net | |||||||||||||||||
2013 | |||||||||||||||||||||
Life, accident and health insurance in force | $ | 228,095 | $ | (58,310 | ) | $ | 6 | $ | 169,791 | — | |||||||||||
Premiums: | |||||||||||||||||||||
Life insurance1 | $ | 783 | $ | (59 | ) | $ | — | $ | 724 | — | |||||||||||
Accident and health insurance | 232 | (232 | ) | — | — | — | |||||||||||||||
Total | $ | 1,015 | $ | (291 | ) | $ | — | $ | 724 | — | |||||||||||
2012 | |||||||||||||||||||||
Life, accident and health insurance in force | $ | 216,002 | $ | (59,895 | ) | $ | 5 | $ | 156,112 | — | |||||||||||
Premiums: | |||||||||||||||||||||
Life insurance1 | $ | 701 | $ | (66 | ) | $ | — | $ | 635 | — | |||||||||||
Accident and health insurance | 189 | (189 | ) | — | — | — | |||||||||||||||
Total | $ | 890 | $ | (255 | ) | $ | — | $ | 635 | — | |||||||||||
2011 | |||||||||||||||||||||
Life, accident and health insurance in force | $ | 209,732 | $ | (60,499 | ) | $ | 5 | $ | 149,238 | — | |||||||||||
Premiums: | |||||||||||||||||||||
Life insurance1 | $ | 596 | $ | (65 | ) | $ | — | $ | 531 | — | |||||||||||
Accident and health insurance | 236 | (236 | ) | — | — | — | |||||||||||||||
Total | $ | 832 | $ | (301 | ) | $ | — | $ | 531 | — | |||||||||||
1 | Primarily represents premiums from traditional life insurance and life-contingent immediate annuities and excludes deposits on investment and universal life insurance products. |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Valuation and Qualifying Accounts | ' | ||||||||||||||||||||
Schedule V Valuation and Qualifying Accounts | |||||||||||||||||||||
Years ended December 31, 2013, 2012 and 2011 (in millions) | |||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | |||||||||||||||||
Balance at | Charged to | Charged to | Balance at | ||||||||||||||||||
beginning | costs and | other | end of | ||||||||||||||||||
Description | of period | expenses | accounts | Deductions1 | period | ||||||||||||||||
2013 | |||||||||||||||||||||
Valuation allowances—mortgage loans | $ | 44 | $ | (4 | ) | $ | — | $ | 5 | $ | 35 | ||||||||||
2012 | |||||||||||||||||||||
Valuation allowances—mortgage loans | $ | 60 | $ | 1 | $ | — | $ | 17 | $ | 44 | |||||||||||
2011 | |||||||||||||||||||||
Valuation allowances—mortgage loans | $ | 96 | $ | 25 | $ | — | $ | 61 | $ | 60 | |||||||||||
1 | Amounts generally represent payoffs, sales and recoveries. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Basis of Presentation | ' | ||||||||||||
Basis of Presentation | |||||||||||||
The consolidated financial statements include the accounts of NLIC and companies in which NLIC directly or indirectly has a controlling financial interest. The consolidated financial statements include majority-owned subsidiaries and consolidated variable interest entities (“VIEs”). All significant intercompany accounts and transactions have been eliminated. | |||||||||||||
Entities in which NLIC does not have a controlling interest, but the Company has significant influence over the operating and financing decisions and also certain other investments, are reported using the equity method. | |||||||||||||
Use of Estimates | ' | ||||||||||||
Use of Estimates | |||||||||||||
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The preparation of the consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates include the balance and amortization of deferred policy acquisition costs (“DAC”), legal and regulatory reserves, certain investment and derivative valuations including investment impairment losses, future policy benefits and claims including the valuation of embedded derivatives resulting from living benefit guarantees on variable annuity contracts, goodwill, provision for income taxes and valuation of deferred tax assets. Actual results could differ significantly from those estimates. | |||||||||||||
Revenues and Benefits | ' | ||||||||||||
Revenues and Benefits | |||||||||||||
Investment and universal life insurance products. Investment products are long duration contracts that do not subject the Company to significant risk arising from mortality (the relative incidence of death in a given time) or morbidity (the relative incidence of disability resulting from disease or physical impairment). These include variable and fixed deferred annuity contracts in the accumulation phase with both individuals and groups and certain annuities without life contingencies. Universal life insurance products include long duration insurance contracts that do not have fixed or guaranteed terms. These include universal life insurance, variable universal life insurance, COLI, bank-owned life insurance (“BOLI”) and other interest-sensitive life insurance policies. Revenues for investment products and universal life insurance products consist of net investment income, surrender charges and other policy charges earned and assessed against policy account balances during the period. Policy charges are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. Assessments for services provided in future periods are recorded as unearned revenue and recognized as revenue over the periods benefited. Surrender charges are recognized as revenue upon surrender of a contract in accordance with contractual terms. Policy benefits and claims that are charged to expense include interest credited to policyholder accounts and benefits and claims incurred in the period in excess of related policyholder accounts. | |||||||||||||
Traditional life insurance products. Traditional life insurance products include those products with fixed and guaranteed terms, primarily consisting of whole life insurance, term life insurance and certain annuities with life contingencies. Premiums for traditional life insurance products are generally recognized as revenue when due. For certain annuities with life contingencies, any excess of gross premium over the net premium is deferred and recognized with the amount of expected future benefits. Benefits and expenses are associated with earned premiums so that profits are recognized over the life of the contract. This association is accomplished through the provision for future policy benefits and the deferral and amortization of policy acquisition costs. | |||||||||||||
Future Policy Benefits and Claims | ' | ||||||||||||
Future Policy Benefits and Claims | |||||||||||||
Investment and universal life insurance products. The Company calculates its liability for future policy benefits and claims for investment products in the accumulation phase and for universal life insurance policies as the policy accrued account balance, which represents participants’ net deposits adjusted for investment performance, interest credited and applicable contract charges. | |||||||||||||
The Company offers certain universal life insurance, variable universal life insurance and variable annuity products with secondary guarantees, guaranteed minimum death benefits (“GMDB”), and guaranteed minimum income benefits (“GMIB”). Liabilities for these guarantees are calculated by multiplying the current benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative secondary guarantee benefit payments plus interest. The Company regularly evaluates its experience and assumptions and adjusts the benefit ratio as appropriate. If experience or assumption changes result in a new benefit ratio, the reserves are adjusted to reflect the changes with a related charge or credit to other benefits and claims in the period of evaluation. Determination of the expected benefit payments and assessments are based on a range of scenarios and assumptions including those related to market rates of return and volatility, contract surrenders and mortality experience. The accounting for these guarantees impacts estimated gross profits used to calculate the balance and amortization of DAC and other. Refer to Note 4 for further discussion of these guarantees. | |||||||||||||
Guarantees to variable annuity contractholders can include a return of no less than the total deposits made on the contract less any customer withdrawals, total deposits made on the contract less any customer withdrawals plus a minimum return, or the highest contract value on a specified anniversary date minus any customer withdrawals following the contract anniversary. In addition, these guarantees can include benefits payable in the event of death, upon annuitization, upon periodic withdrawal or at specified dates during the accumulation period. Refer to Note 4 for further discussion of these guarantees. | |||||||||||||
The Company’s guaranteed minimum accumulation benefit (“GMAB”) and guaranteed living withdrawal benefit (“GLWB”) are living benefit guarantees which represent embedded derivatives in variable annuity contracts that are required to be separated from, and valued apart from, the host variable annuity contracts. The embedded derivatives are held at fair value and include the present value of attributed fees. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of net realized investment gains and losses. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions. Projections of cash flows inherent in the valuation of the embedded derivatives incorporate numerous assumptions including, but not limited to, mortality, lapse rates, index volatility, wait period (the number of years the policyholder is assumed to wait prior to beginning withdrawals once eligible), efficiency of benefit utilization (the percent of the maximum permitted withdrawal that a policyholder takes) and discounting, including liquidity and non-performance risk (the risk that the liability will not be fulfilled and affects the value at which the liability is transferred). The assumptions used to calculate the fair value of embedded derivatives are reviewed as part of an annual comprehensive study of assumptions. Quarterly, consideration is given as to whether adjustments to these assumptions are necessary. | |||||||||||||
The Company’s equity indexed products (life and annuity) have the policyholders’ interest credits based on market performance with caps and floors. The interest credits represent embedded derivatives within the insurance contract and therefore are required to be separated from, and valued apart from, the host contracts. The embedded derivatives are held at fair value. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of interest credited. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions. Projections of cash flows inherent in the valuation of the embedded derivative incorporate numerous assumptions including, but not limited to, mortality, lapse rates and index volatility. The assumptions used to calculate the fair value of embedded derivatives are reviewed as part of an annual comprehensive study of assumptions. Quarterly, consideration is given as to whether adjustments to these assumptions are necessary. | |||||||||||||
Traditional life insurance products. The process of calculating reserve amounts for traditional life insurance products involves the use of a number of assumptions, including those related to persistency, mortality, morbidity, interest rates (the rates expected to be paid or received on financial instruments) and certain other expenses. | |||||||||||||
The liability for future policy benefits and claims for traditional life insurance policies was determined using the net level premium method with weighted average interest rates of 6.6% and estimates of mortality, morbidity, investment yields and persistency that were used or being experienced at the time the policies were issued with a provision for adverse deviation. | |||||||||||||
The liability for future policy benefits for certain annuities with life contingencies was calculated using the present value of future benefits and certain expenses discounted using weighted average interest rates of 5.3% with a provision for adverse deviation. | |||||||||||||
Reinsurance ceded | ' | ||||||||||||
Reinsurance ceded | |||||||||||||
The Company cedes insurance to other companies in order to limit potential losses and to diversify its exposures. Such agreements do not relieve the original insurer from its primary obligation to the policyholder in the event the reinsurer is unable to meet the obligations it has assumed. Reinsurance premiums ceded and reinsurance recoveries on benefits and claims incurred are deducted from the respective income and expense accounts. Assets and liabilities related to reinsurance ceded are reported in the consolidated balance sheets on a gross basis, separately from the related future policy benefits and claims of the Company. | |||||||||||||
Deferred Policy Acquisition Costs | ' | ||||||||||||
Deferred Policy Acquisition Costs | |||||||||||||
The Company has deferred certain acquisition costs that are directly related to the successful acquisition of new and renewal insurance and investment contracts. The methods and assumptions used to amortize and assess recoverability of the DAC balance depend on the type of product. | |||||||||||||
Investment and universal life insurance products. For certain investment and universal life insurance products, DAC is amortized with interest over the lives of the policies in relation to the present value of estimated gross profits, which is determined primarily from projected interest margins, policy charges and net realized investment gains and losses, less policy benefits and other expenses. The DAC asset related to investment and universal life insurance products is adjusted to reflect the impact of unrealized gains and losses on available-for-sale securities with the corresponding adjustment recorded in accumulated other comprehensive income (“AOCI”). This adjustment to DAC represents the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. DAC for investment and universal life insurance products is subject to recoverability testing in the year of policy issuance and DAC for universal life insurance products is also subject to loss recognition testing at the end of each reporting period. | |||||||||||||
The Company regularly evaluates and adjusts the DAC balance when actual gross profits in a given reporting period vary from management’s initial estimates. Additionally, the assumptions used in the estimation of future gross profits are based on the Company’s current best estimates of future events and are reviewed as part of an annual process. During the annual process, the Company performs a comprehensive study of assumptions, including mortality and persistency studies, maintenance expense studies and an evaluation of projected general and separate account investment returns. The most significant assumptions that are involved in the estimation of future gross profits include future net separate account investment performance, surrender/lapse rates, interest margins, renewal premiums and mortality. The Company refers to this process as “unlocking.” Quarterly, consideration is given as to whether adjustments to these assumptions are necessary. The Company uses a reversion to the mean process to determine the assumption for the future net separate account investment performance. This process assumes different performance levels over the next three years such that the separate account mean return measured from the anchor date to the end of the life of the product equals the long-term assumption. The Company’s long-term assumption for net separate account investment performance is approximately 7% growth per year. | |||||||||||||
Changes in assumptions and the emergence of actual gross profits can have a significant impact on the amount of DAC reported for investment and universal life insurance products and their related amortization patterns. Additionally, the amortization of DAC can be affected by the change in the valuation of the Company’s variable annuity guarantees. See Future Policy Benefits and Claims for further discussion of the valuation of the Company’s variable annuity guarantees. In the event actual experience differs from assumptions or future assumptions are revised, the Company will record an increase or decrease in DAC amortization expense, which could be significant. | |||||||||||||
Traditional life insurance. DAC is amortized with interest over the premium-paying period of the related policies in proportion to premium revenue recognized. These assumptions are consistent with those used in the calculation of liabilities for future policy benefits at issuance. DAC is evaluated for recoverability at the time of policy issuance, and loss recognition testing is conducted each reporting period. | |||||||||||||
Refer to Note 5 for discussion regarding assumption changes impacting DAC amortization and related balances. | |||||||||||||
Investments | ' | ||||||||||||
Investments | |||||||||||||
Available-for-sale securities. Available-for-sale securities are reported at fair value, with unrealized holding gains and losses reported as a separate component of other comprehensive income, net of adjustments for DAC, future policy benefits and claims, policyholder dividend obligations and deferred federal income taxes. Realized gains and losses on sales of available-for-sale securities are recognized in income based on the specific identification method. Interest and dividend income is recognized when earned. | |||||||||||||
As of December 31, 2013 and 2012, 99% of fixed maturity securities were priced using external source data. Independent pricing services are most often utilized (86% as of December 31, 2013 and 2012) to determine the fair value of securities for which market quotations are available. For these securities, the Company obtains the pricing services’ methodologies, inputs and assumptions and classifies the investments accordingly in the fair value hierarchy. | |||||||||||||
A corporate pricing matrix or an internally developed pricing model is used in valuing certain corporate debt securities. The corporate pricing matrix is developed using private spreads for corporate securities with varying weighted average lives and credit quality ratings. The weighted average life and credit quality rating of a particular fixed maturity security to be priced using the corporate pricing matrix are important inputs into the model and are used to determine a corresponding spread that is added to the appropriate U.S. Treasury yield to create an estimated market yield for that security. The estimated market yield and other relevant factors are then used to estimate the fair value of the particular security. | |||||||||||||
Non-binding broker quotes are also utilized to determine the fair value of certain corporate debt, mortgage-backed and other asset-backed securities when quotes are not available from independent pricing services, corporate pricing matrix or internal pricing models. These securities are classified with the lowest priority in the fair value hierarchy as only one broker quote is ordinarily obtained, the investment is not traded on an exchange, the pricing is not available to other entities and/or the transaction volume in the same or similar investments has decreased. Inputs used in the development of prices are not provided to the Company by the brokers, as the brokers often do not provide the necessary transparency into their quotes and methodologies. The Company performs reviews and tests to ensure that quotes are a reasonable estimate of the investments’ fair value at least annually. Price movements of broker quotes are subject to validation and require approval from the Company’s management. Management uses its knowledge of the investment and current market conditions to determine if the price is indicative of the investment’s fair value. | |||||||||||||
When the collectability of contractual interest payments on fixed maturity securities is considered doubtful, such securities are placed in non-accrual status and any accrued interest is excluded from investment income. These securities are not restored to accrual status until the Company determines that payment of future principal and interest is probable. | |||||||||||||
For investments in certain residential and commercial mortgage-backed securities, the Company recognizes income and amortizes discounts and premiums using the effective-yield method based on prepayment assumptions and the estimated economic life of the securities. When actual prepayments differ significantly from estimated prepayments, the effective-yield is recalculated to reflect actual payments to date and anticipated future payments. Any resulting adjustment is included in net investment income in the period the estimates are revised. All other investment income is recorded using the effective-yield method without anticipating the impact of prepayments. | |||||||||||||
The Company periodically reviews its available-for-sale securities to determine if any decline in fair value to below amortized cost is other-than-temporary. Factors considered in determining whether a decline is other-than-temporary include the length of time a security has been in an unrealized loss position, the severity of the unrealized loss, reasons for the decline in value and expectations for the amount and timing of a recovery in fair value. | |||||||||||||
In assessing corporate debt securities for other-than-temporary impairment, the Company evaluates the ability of the issuer to meet its debt obligations, the value of the company or specific collateral securing the debt, the Company’s intent to sell the security and whether it is more likely than not the Company will be required to sell the security before the recovery of its amortized cost basis. The Company evaluates U.S. Treasury securities and obligations of U.S. Government corporations and agencies and obligations of states, political subdivisions and foreign governments for other-than-temporary impairment by examining similar characteristics. | |||||||||||||
When evaluating whether residential mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities are other-than-temporarily impaired, the Company examines characteristics of the underlying collateral, such as delinquency and default rates, the quality of the underlying borrower, the type of collateral in the pool, the vintage year of the collateral, subordination levels within the structure of the collateral pool, the quality of any credit guarantors, the Company’s intent to sell the security and whether it is more likely than not it will be required to sell the security before the recovery of its amortized cost basis. | |||||||||||||
The Company evaluates its intent to sell on an individual security basis. Other-than-temporary impairment losses on debt securities when the Company does not intend to sell the security and it is not more likely than not it will be required to sell the security prior to recovery of the security’s amortized cost basis are bifurcated with the credit portion of the impairment loss being recognized in earnings and the non-credit loss portion of the impairment and any subsequent changes in the fair value of those debt securities being recognized in other comprehensive income, net of applicable taxes and other offsets. To estimate the credit portion of an impairment loss recognized in earnings, the Company considers the timing and present value of the cash flows. To the extent that the present value of cash flows generated by a debt security is less than the amortized cost, an other-than-temporary impairment is recognized through earnings. | |||||||||||||
It is reasonably possible that further declines in fair values of such investments, or changes in assumptions or estimates of anticipated recoveries and/or cash flows, may cause further other-than-temporary impairments in the near term, which could be significant. | |||||||||||||
Mortgage loans, net of allowance. The Company holds commercial mortgage loans that are collateralized by properties throughout the U.S. These mortgage loans are further segregated into the following classes based on the unique risk profiles of the underlying property types: office, industrial, retail, apartment and other. Mortgage loans held-for-investment are held at amortized cost less a valuation allowance. | |||||||||||||
As part of the underwriting process, specific guidelines are followed to ensure the initial quality of a new mortgage loan. Third-party appraisals are generally obtained to support loaned amounts as the loans are usually collateral dependent. | |||||||||||||
The collectability and value of a mortgage loan are based on the ability of the borrower to repay and/or the value of the underlying collateral. Many of the Company’s commercial mortgage loans are structured with balloon payment maturities, exposing the Company to risks associated with the borrowers’ ability to make the balloon payment or refinance the property. | |||||||||||||
The Company actively monitors the credit quality of its mortgage loans to support the development of the valuation allowance. This monitoring process includes quantitative analyses which facilitate the identification of deteriorating loans, and qualitative analyses, which consider other factors relevant to the borrowers’ ability to repay. Loans with deteriorating credit fundamentals are identified through special surveillance procedures and are evaluated based on the severity of their deterioration and management’s judgment as to the likelihood of loss. | |||||||||||||
Mortgage loans require a loan-specific reserve when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When management determines that a loan requires a loan-specific reserve, a provision for loss is established equal to the difference between the carrying value and either the fair value of the collateral less costs to sell or the present value of expected future cash flows discounted at the loan’s market interest rate. Loan-specific reserve charges are recorded in net realized investment gains and losses. In the event a loan-specific reserve charge is reversed, the recovery is recorded in net realized investment gains and losses. | |||||||||||||
In addition to the loan-specific reserves, the Company maintains a non-specific reserve based primarily on loan surveillance categories and property type classes, which reflects management’s best estimate of probable credit losses inherent in the portfolio as of the balance sheet date but not yet attributable to specific loans. Management’s periodic evaluation of the adequacy of the non-specific reserve is based on past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect a borrower’s ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. Non-specific reserve changes are recorded in net realized investment gains and losses. | |||||||||||||
Interest income on performing mortgage loans is recognized over the life of the loan using the effective-yield method. Loans in default or in the process of foreclosure are placed on non-accrual status. Interest received on non-accrual status mortgage loans is included in net investment income in the period received. Loans are considered delinquent when contractual payments are 90 days past due. | |||||||||||||
Policy loans. Policy loans, which are collateralized by the related insurance policy, are held at the outstanding principal balance and do not exceed the net cash surrender value of the policy. As such, no valuation allowance for policy loans is required. | |||||||||||||
Short-term investments. Short-term investments consist of highly liquid mutual funds and government agency discount notes with maturities of twelve months or less at acquisition. The Company and various affiliates maintains agreements with Nationwide Cash Management Company (“NCMC”), an affiliate, under which NCMC acts as a common agent in handling the purchase and sale of short-term securities for the respective accounts of the participants. Amounts on deposit with NCMC for the benefit of the Company are included in short-term investments on the consolidated balance sheets. The Company carries short-term investments at fair value. | |||||||||||||
Other investments. Other investments consist primarily of equity method investments in joint ventures and partnerships, equity securities, capital stock with the Federal Home Loan Bank of Cincinnati (“FHLB”) and trading securities. | |||||||||||||
Securities lending. The Company has entered into securities lending agreements with a custodial bank whereby eligible securities are loaned to third parties, primarily major brokerage firms. These transactions are used to generate additional income on the securities portfolio. The Company is entitled to receive from the borrower any payments of interest and dividends received on loaned securities during the loan term. The agreements require a minimum of 102% of the fair value of loaned securities to be held as collateral. Cash collateral is invested by the custodial bank in investment-grade securities, which are included in the total investments of the Company. Periodically, the Company may receive non-cash collateral, which would be recorded off-balance sheet. The Company recognizes loaned securities in either available-for-sale or other investments. A securities lending payable is recorded in other liabilities for the amount of cash collateral received. Net income received from securities lending activities is included in net investment income. | |||||||||||||
Variable interest entities. In the normal course of business, the Company has relationships with VIEs. If the Company determines that it has a variable interest and is the primary beneficiary, it consolidates the VIE. This determination is based on a review of the entity’s contract and other deal related information, such as the entity’s equity investment at risk, decision-making abilities, obligations to absorb economic risks and right to receive economic rewards of the entity. The Company is the primary beneficiary if the Company has the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and the obligation to absorb losses or receive benefits from the entity that could be potentially significant to the VIE. | |||||||||||||
The majority of the VIEs consolidated by the Company are due to guarantees provided to limited partners related to the amount of tax credits that will be generated by the Low-Income-Housing Tax Credit Funds (“Tax Credit Funds”). The results of operations and financial position of each VIE for which the Company is the primary beneficiary as well as the corresponding noncontrolling interests, are recorded in the consolidated financial statements. Ownership interests held by unrelated third parties in the consolidated VIEs are presented as noncontrolling interests in the equity section of the consolidated financial statements. Loss attributable to noncontrolling interests is excluded from the net income attributable to NLIC on the consolidated statements of operations. | |||||||||||||
The Company invests in fixed maturity securities that could qualify as VIEs, including corporate securities, mortgage-backed securities and asset-backed securities. The Company is not the primary beneficiary of these securities as the Company does not have the power to direct the activities that most significantly impact the entities’ performance. The Company’s maximum exposure to loss is limited to the carrying values of these securities. There are no liquidity arrangements, guarantees or other commitments by third parties that affect the fair value of the Company’s interest in these assets. Refer to Note 6 for additional disclosures related to these investments. | |||||||||||||
The Company is not required and does not intend to provide financial or other support outside of contractual requirements to any VIE. | |||||||||||||
Derivative Instruments | ' | ||||||||||||
Derivative Instruments | |||||||||||||
The Company uses derivative instruments to manage exposures and mitigate risks primarily associated with interest rates, equity markets and foreign currency. These derivative instruments primarily include interest rate swaps, futures contracts and options. Certain features embedded in the Company’s indexed products and certain variable annuity contracts require derivative accounting. Refer to the prior discussion of Future Policy Benefits and Claims for a description of the valuation applicable to these products. All derivative instruments are held at fair value and are reflected as assets or liabilities in the consolidated balance sheets. | |||||||||||||
Fair value of derivative instruments is determined using various valuation techniques relying predominantly on observable market inputs. These inputs include interest rate swap curves, credit spreads, interest rates, counterparty credit risk, equity volatility and equity index levels. In cases where observable inputs are not available, the Company will utilize non-binding broker quotes to determine fair value, and these instruments are classified accordingly in the fair value hierarchy. Price movements of these broker quotes are subject to validation and require approval from the Company’s management. Management uses models to internally value the instruments for comparison to the values received through broker quotes. | |||||||||||||
For derivatives that are not designated for hedge accounting, the gain or loss on the derivative is primarily recognized in net realized investment gains and losses. | |||||||||||||
For derivative instruments that are designated and qualify for fair value hedge accounting, the gain or loss on the derivative instrument, as well as the hedged item to the extent of the risk being hedged, are recognized in net realized investment gains and losses. | |||||||||||||
For derivative instruments that are designated and qualify for cash flow hedge accounting, the effective portion of the gain or loss on the derivative instrument is reported as a component of AOCI and reclassified into earnings in the same period or periods that the hedged transaction impacts earnings. The ineffective portion of the derivative’s change in value, if any, along with any of the derivative’s change in value that is excluded from the assessment of hedge effectiveness, are recorded in net realized investment gains and losses. | |||||||||||||
The Company’s derivative transaction counterparties are generally financial institutions. To reduce the credit risk associated with open contracts, the Company enters into master netting agreements, which permit the closeout and netting of transactions with the same counterparty upon the occurrence of certain events. In addition, the Company attempts to reduce credit risk by obtaining collateral from counterparties. The determination of the need for and the levels of collateral vary based on an assessment of the credit risk of the counterparty. The Company accepts collateral in the form of cash and marketable securities. | |||||||||||||
Fair Value Measurements | ' | ||||||||||||
Fair Value Measurements | |||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources while unobservable inputs reflect the Company’s view of market assumptions in the absence of observable market information. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. In determining fair value, the Company uses various methods, primarily market and income approaches. | |||||||||||||
The Company categorizes its fair value measurements into a three-level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety. | |||||||||||||
The Company categorizes assets and liabilities held at fair value in the consolidated balance sheets as follows: | |||||||||||||
• | Level 1 – Unadjusted quoted prices accessible in active markets for identical assets or liabilities at the measurement date and mutual funds where the value per share (unit) is determined and published daily and is the basis for current transactions. | ||||||||||||
• | Level 2 – Unadjusted quoted prices for similar assets or liabilities in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. Primary inputs to this valuation technique may include comparative trades, bid/asks, interest rate movements, U.S. Treasury rates, London Interbank Offered Rate (“LIBOR”), prime rates, cash flows, maturity dates, call ability, estimated prepayments, and/or underlying collateral values. | ||||||||||||
• | Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate about the assumptions market participants would use at the measurement date in pricing the asset or liability. Consideration is given to the risk inherent in both the method of valuation and the valuation inputs. | ||||||||||||
The Company reviews its fair value hierarchy classifications for assets and liabilities quarterly. Changes in observability of significant valuation inputs identified during these reviews may trigger reclassifications. Reclassifications are reported as transfers at the beginning of the period in which the change occurs. | |||||||||||||
Fair Value Option | ' | ||||||||||||
Fair Value Option | |||||||||||||
The Company assesses the fair value option election for newly acquired assets or liabilities on a prospective basis. There are no material assets or liabilities for which the Company elected the fair value option. | |||||||||||||
Federal Income Taxes | ' | ||||||||||||
Federal Income Taxes | |||||||||||||
The Company recognizes deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, net operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income or loss in the years in which those temporary differences are expected to be recovered or settled. Under this method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded to reduce a deferred tax asset to the amount expected to be realized. Interest expense and any associated penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) are recorded as income tax expense. | |||||||||||||
The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to change the provision for federal income taxes recorded in the consolidated financial statements, which could be significant. | |||||||||||||
Tax reserves are reviewed regularly and are adjusted as events occur that management believes impact its liability for additional taxes, such as lapsing of applicable statutes of limitations, conclusion of tax audits or substantial agreement with taxing authorities on the deductibility/nondeductibility of uncertain items, additional exposure based on current calculations, identification of new issues, release of administrative guidance or rendering of a court decision affecting a particular tax issue. | |||||||||||||
NLIC files a separate consolidated federal income tax return, with its subsidiaries, and is eligible to join the NMIC consolidated federal tax return group in 2015. | |||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||
Cash and Cash Equivalents | |||||||||||||
Cash and cash equivalents include highly liquid investments with original maturities of less than three months. | |||||||||||||
Goodwill | ' | ||||||||||||
Goodwill | |||||||||||||
In connection with business acquisitions, the Company recognizes goodwill as the excess of the purchase price over the fair value of net assets acquired as goodwill. Goodwill is not amortized, but is evaluated for impairment at the reporting unit level annually. Goodwill of a reporting unit is tested for impairment on an interim basis, in addition to the annual evaluation if an event occurs or circumstances change which would more likely than not reduce the fair value of a reporting unit below its carrying amount. If a reporting unit’s fair value is less than its carrying value, the Company will calculate implied goodwill. An impairment would be recognized on a reporting unit for the amount that the carrying value of its goodwill exceeds the implied value of its goodwill. | |||||||||||||
The process of evaluating goodwill for impairment requires several judgments and assumptions to be made to determine the fair value of the reporting units, including the method used to determine fair value, discount rates, expected levels of cash flows, revenues and earnings, and the selection of comparable companies used to develop market-based assumptions. The Company performed its 2013 annual impairment test and determined that no impairment was required. | |||||||||||||
Closed Block | ' | ||||||||||||
Closed Block | |||||||||||||
In connection with the sponsored demutualization of Provident Mutual Life Insurance Company (“Provident”) prior to its acquisition by the Company, Provident established a closed block for the benefit of certain classes of individual participating policies that had a dividend scale payable in 2001. Assets were allocated to the closed block in an amount that produces cash flows which, together with anticipated revenues from closed block business, is reasonably expected to be sufficient to provide for (1) payment of policy benefits, specified expenses and taxes, and (2) the continuation of dividends throughout the life of the Provident policies included in the closed block based upon the dividend scales payable for 2001, if the experience underlying such dividend scales continues. | |||||||||||||
Assets allocated to the closed block benefit only the holders of the policies included in the closed block and will not revert to the benefit of the Company. No reallocation, transfer, borrowing or lending of assets can be made between the closed block and other portions of the Company’s general account, any of its separate accounts, or any affiliate of the Company without the approval of the Pennsylvania Insurance Department and Ohio Department of Insurance (“ODI”). The closed block will remain in effect as long as any policy in the closed block is in force. | |||||||||||||
If, over time, the aggregate performance of the closed block assets and policies is better than was assumed in funding the closed block, dividends to policyholders will increase. If, over time, the aggregate performance of the closed block assets and policies is less favorable than was assumed in the funding, dividends to policyholders could be reduced. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from the Company’s assets outside of the closed block, which are general account assets. | |||||||||||||
The assets and liabilities allocated to the closed block are recorded in the Company’s consolidated financial statements on the same basis as other similar assets and liabilities. The carrying amount of closed block liabilities in excess of the carrying amount of closed block assets at the date Provident was acquired by the Company represents the maximum future earnings from the assets and liabilities designated to the closed block that can be recognized in income, for the benefit of stockholders, over the period the policies in the closed block remain in force. | |||||||||||||
If actual cumulative earnings exceed expected cumulative earnings, the expected earnings are recognized in income. This is because the excess actual cumulative earnings over expected cumulative earnings, which represents undistributed accumulated earnings attributable to policyholders, is recorded as a policyholder dividend obligation. Therefore, the excess will be paid to closed block policyholders as an additional policyholder dividend expense in the future unless it is otherwise offset by future performance of the closed block that is less favorable than originally expected. If actual cumulative performance is less favorable than expected, actual earnings will be recognized in income. | |||||||||||||
The principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net investment income, purchases and sales of investments, policyholder benefits, policyholder dividends, premium taxes and income taxes. The principal income and expense items excluded from the closed block are management and maintenance expenses, commissions and net investment income and realized gains and losses on investments held outside of the closed block that support the closed block business, all of which enter into the determination of total gross margins of closed block policies. See Note 10 for further disclosure. | |||||||||||||
Separate Accounts | ' | ||||||||||||
Separate Accounts | |||||||||||||
Separate account assets and liabilities represent contractholders’ funds that have been legally segregated into accounts with specific investment objectives. In the separate account, investment income and gains and losses on investments accrue directly to, and investment risk is borne by, the contractholder. Separate account assets are primarily comprised of public, privately registered and non-registered mutual funds. Separate account assets are recorded at fair value based on the methodology that would be applicable to the underlying assets. The value of separate account liabilities is set to equal the fair value for separate account assets. | |||||||||||||
Participating Business | ' | ||||||||||||
Participating Business | |||||||||||||
Participating business, which refers to policies that participate in profits through policyholder dividends, represented approximately 4% of the Company’s life insurance in force in 2013 (5% in 2012 and 2011) and 38% of the number of life insurance policies in force in 2013 (40% in 2012 and 42% in 2011). The provision for policyholder dividends was based on the respective year’s dividend scales and has been included in future policy benefits and claims in the consolidated balance sheets. | |||||||||||||
Change in Accounting Principle | ' | ||||||||||||
Change in Accounting Principle | |||||||||||||
In October 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-26, which amends FASB Accounting Standards Codification (“ASC”) 944, Financial Services – Insurance. The amended guidance modifies the definition of the types of costs incurred by insurance entities that can be capitalized in the acquisition of new and renewal insurance and investment contracts. Under the amended guidance, acquisition costs are to include only those costs that are directly related to the successful acquisition of new or renewal insurance and investment contracts. The methods and assumptions used to amortize and assess recoverability of DAC were not impacted as a result of adopting this guidance. | |||||||||||||
The Company adjusted the presentation of its consolidated financial statements and accompanying notes for all periods presented, to reflect the retrospective adoption of this change in accounting principle. | |||||||||||||
The following tables summarize the impact of the retrospective change in accounting principle on the consolidated statements of operations for the periods indicated: | |||||||||||||
Year ended December 31, 2011 | |||||||||||||
(in millions) | As Originally | As Adjusted | Effect of Change | ||||||||||
Reported | |||||||||||||
Amortization of deferred policy acquisition costs | $ | 76 | $ | 65 | $ | 11 | |||||||
Other expenses, net of deferrals1 | $ | 620 | $ | 760 | $ | (140 | ) | ||||||
Federal income tax benefit | $ | (382 | ) | $ | (427 | ) | $ | 45 | |||||
Net loss attributable to Nationwide Life Insurance Company | $ | (282 | ) | $ | (366 | ) | $ | (84 | ) | ||||
1 | Excludes interest expense, which is included in other expenses, net of deferrals on the consolidated statements of operations. | ||||||||||||
Subsequent Events | ' | ||||||||||||
Subsequent Events | |||||||||||||
The Company evaluated subsequent events through February 28, 2014, the date the consolidated financial statements were issued. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Impact of the retrospective change in accounting principle on the consolidated statments of operations | ' | ||||||||||||
The following tables summarize the impact of the retrospective change in accounting principle on the consolidated statements of operations for the periods indicated: | |||||||||||||
Year ended December 31, 2011 | |||||||||||||
(in millions) | As Originally | As Adjusted | Effect of Change | ||||||||||
Reported | |||||||||||||
Amortization of deferred policy acquisition costs | $ | 76 | $ | 65 | $ | 11 | |||||||
Other expenses, net of deferrals1 | $ | 620 | $ | 760 | $ | (140 | ) | ||||||
Federal income tax benefit | $ | (382 | ) | $ | (427 | ) | $ | 45 | |||||
Net loss attributable to Nationwide Life Insurance Company | $ | (282 | ) | $ | (366 | ) | $ | (84 | ) | ||||
1 | Excludes interest expense, which is included in other expenses, net of deferrals on the consolidated statements of operations. |
Certain_LongDuration_Contracts1
Certain Long-Duration Contracts (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts | ' | ||||||||||||||||||||||||||||||||
The following table summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts, as of the dates indicated (a contract may contain multiple guarantees): | |||||||||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||
General | Separate | Net | General | Separate | Net | ||||||||||||||||||||||||||||
account | account | amount | Average | account | account | amount | Average | ||||||||||||||||||||||||||
(in millions) | value | value | at risk1 | age2 | value | value | at risk1 | age2 | |||||||||||||||||||||||||
Contracts with GMDB: | |||||||||||||||||||||||||||||||||
Return of net deposits | $ | 916 | $ | 19,927 | $ | 13 | 64 | $ | 836 | $ | 14,963 | $ | 24 | 64 | |||||||||||||||||||
Minimum return or anniversary contract value | 2,031 | 33,520 | 237 | 69 | 2,048 | 29,787 | 561 | 68 | |||||||||||||||||||||||||
Total contracts with GMDB | $ | 2,947 | $ | 53,447 | $ | 250 | 67 | $ | 2,884 | $ | 44,750 | $ | 585 | 66 | |||||||||||||||||||
GMAB Return of net deposits3 | $ | 92 | $ | 2,383 | $ | — | 64 | $ | 165 | $ | 3,230 | $ | 12 | 64 | |||||||||||||||||||
GLWB Minimum return or anniversary contract value | $ | 178 | $ | 28,071 | $ | 74 | 64 | $ | 128 | $ | 22,031 | $ | 613 | 65 | |||||||||||||||||||
GMIB Minimum return or anniversary contract value | $ | 49 | $ | 510 | $ | — | 64 | $ | 49 | $ | 514 | $ | 1 | 65 | |||||||||||||||||||
1 | Net amount at risk is calculated on a policy-level basis and equals the respective guaranteed benefit less the account value (or zero if the account value exceeds the guaranteed benefit). | ||||||||||||||||||||||||||||||||
2 | Represents the weighted average attained age of contractholders. | ||||||||||||||||||||||||||||||||
3 | Contracts with the hybrid accumulation/withdrawal benefits are included with the accumulation benefits contracts. | ||||||||||||||||||||||||||||||||
Summarizes the reserve balances, for variable annuity contracts with guarantees | ' | ||||||||||||||||||||||||||||||||
The following table summarizes the reserve balances for guarantees on variable annuity contracts, as of the dates indicated: | |||||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||||||||||||||||||
GMDB | $ | 55 | $ | 65 | |||||||||||||||||||||||||||||
GMAB1, 2 | $ | (19 | ) | $ | 57 | ||||||||||||||||||||||||||||
GLWB1 | $ | (1,075 | ) | $ | 600 | ||||||||||||||||||||||||||||
GMIB | $ | 2 | $ | 2 | |||||||||||||||||||||||||||||
1 | The fair value of the living benefit liability includes the present value of attributed fees. | ||||||||||||||||||||||||||||||||
2 | Contracts with the hybrid accumulation/withdrawal benefits are included with the accumulation benefits contracts. | ||||||||||||||||||||||||||||||||
Summarizes account balances of deferred variable annuity | ' | ||||||||||||||||||||||||||||||||
The following table summarizes account balances of deferred variable annuity contracts with guarantees invested in separate accounts, as of the dates indicated: | |||||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||||||||||||||||||
Mutual funds: | |||||||||||||||||||||||||||||||||
Bond | $ | 5,685 | $ | 5,634 | |||||||||||||||||||||||||||||
Domestic equity | 43,505 | 35,277 | |||||||||||||||||||||||||||||||
International equity | 3,179 | 2,614 | |||||||||||||||||||||||||||||||
Total mutual funds | $ | 52,369 | $ | 43,525 | |||||||||||||||||||||||||||||
Money market funds | 1,078 | 1,225 | |||||||||||||||||||||||||||||||
Total1 | $ | 53,447 | $ | 44,750 | |||||||||||||||||||||||||||||
1 | Excludes $30.6 billion and $26.7 billion as of December 31, 2013 and 2012, respectively, of separate account assets not related to deferred variable annuity contracts with guarantees and are primarily attributable to retirement plan, variable universal life and COLI products. | ||||||||||||||||||||||||||||||||
Summarizes information regarding universal and variable universal life insurance contracts with no lapse guarantees invested in general and separate accounts | ' | ||||||||||||||||||||||||||||||||
The following table summarizes information regarding universal and variable universal life insurance contracts with no-lapse guarantees invested in general and separate accounts, as of the dates indicated: | |||||||||||||||||||||||||||||||||
(in millions) | General account | Separate account | Adjusted insurance | Average age2 | |||||||||||||||||||||||||||||
value | value | in force1 | |||||||||||||||||||||||||||||||
December 31, 2013 | $ | 1,270 | $ | 362 | $ | 16,960 | 55 | ||||||||||||||||||||||||||
December 31, 2012 | $ | 992 | $ | 328 | $ | 12,321 | 56 | ||||||||||||||||||||||||||
1 | The adjusted insurance in force is calculated on a policy-level basis and equals the respective guaranteed death benefit less the account value (or zero if the account value exceeds the guaranteed benefit). | ||||||||||||||||||||||||||||||||
2 | Represents the weighted average attained age of contractholders. |
Deferred_Policy_Acquisition_Co1
Deferred Policy Acquisition Costs (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Deferred policy acquisition costs | ' | ||||||||||||
The following table summarizes changes in the DAC balance, as of the dates indicated: | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||
(in millions) | 2013 | 2012 | 20111 | ||||||||||
Balance at beginning of year | $ | 3,249 | $ | 3,487 | $ | 3,125 | |||||||
Capitalization of DAC | 604 | 470 | 604 | ||||||||||
Amortization of DAC, excluding unlocks | (373 | ) | (525 | ) | (200 | ) | |||||||
Amortization of DAC related to unlocks | (1 | ) | (50 | ) | 135 | ||||||||
Adjustments to DAC related to unrealized gains and losses on available-for-sale securities | 299 | (133 | ) | (177 | ) | ||||||||
Balance at end of year | $ | 3,778 | $ | 3,249 | $ | 3,487 | |||||||
1 | The balances reflect a change in accounting principle, as described in Note 2. |
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Available-for-Sale Securities | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes amortized cost, unrealized gains and losses and fair value of available-for-sale securities, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
(in millions) | Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||||||||||||||||||
cost | gains | losses | value | ||||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. | $ | 484 | $ | 79 | $ | 2 | $ | 561 | |||||||||||||||||||||||||||||
Government corporations and agencies | |||||||||||||||||||||||||||||||||||||
Obligations of states, political subdivisions and foreign governments | 1,892 | 111 | 40 | 1,963 | |||||||||||||||||||||||||||||||||
Corporate public securities | 18,004 | 1,076 | 295 | 18,785 | |||||||||||||||||||||||||||||||||
Corporate private securities | 4,374 | 258 | 38 | 4,594 | |||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 3,919 | 163 | 79 | 4,003 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,439 | 86 | 21 | 1,504 | |||||||||||||||||||||||||||||||||
Other asset-backed securities | 890 | 26 | 77 | 839 | |||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 31,002 | $ | 1,799 | $ | 552 | $ | 32,249 | |||||||||||||||||||||||||||||
Equity securities | 6 | 18 | — | 24 | |||||||||||||||||||||||||||||||||
Total available-for-sale securities | $ | 31,008 | $ | 1,817 | $ | 552 | $ | 32,273 | |||||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. | $ | 476 | $ | 121 | $ | — | $ | 597 | |||||||||||||||||||||||||||||
Government corporations and agencies | |||||||||||||||||||||||||||||||||||||
Obligations of states, political subdivisions and foreign governments | 1,820 | 301 | 1 | 2,120 | |||||||||||||||||||||||||||||||||
Corporate public securities | 16,152 | 1,891 | 33 | 18,010 | |||||||||||||||||||||||||||||||||
Corporate private securities | 4,216 | 392 | 19 | 4,589 | |||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 4,506 | 267 | 106 | 4,667 | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,219 | 133 | 15 | 1,337 | |||||||||||||||||||||||||||||||||
Other asset-backed securities | 533 | 45 | 87 | 491 | |||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 28,922 | $ | 3,150 | $ | 261 | $ | 31,811 | |||||||||||||||||||||||||||||
Equity securities | 15 | 5 | — | 20 | |||||||||||||||||||||||||||||||||
Total available-for-sale securities | $ | 28,937 | $ | 3,155 | $ | 261 | $ | 31,831 | |||||||||||||||||||||||||||||
Summarizes the amortized cost and fair value of fixed maturity securities | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes the amortized cost and fair value of fixed maturity securities, by contractual maturity, as of December 31, 2013. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without early redemption penalties. | |||||||||||||||||||||||||||||||||||||
(in millions) | Amortized | Fair | |||||||||||||||||||||||||||||||||||
cost | value | ||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 1,081 | $ | 1,097 | |||||||||||||||||||||||||||||||||
Due after one year through five years | 8,927 | 9,685 | |||||||||||||||||||||||||||||||||||
Due after five years through ten years | 7,805 | 7,967 | |||||||||||||||||||||||||||||||||||
Due after ten years | 6,941 | 7,154 | |||||||||||||||||||||||||||||||||||
Subtotal | $ | 24,754 | $ | 25,903 | |||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 3,919 | 4,003 | |||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,439 | 1,504 | |||||||||||||||||||||||||||||||||||
Other asset-backed securities | 890 | 839 | |||||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 31,002 | $ | 32,249 | |||||||||||||||||||||||||||||||||
Summarizes components of net unrealized gains and losses on available-for-sale securities | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes components of net unrealized gains and losses, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
(in millions) | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||||||
Net unrealized gains on available-for-sale securities, before adjustments, taxes and fair value hedging | $ | 1,265 | $ | 2,894 | |||||||||||||||||||||||||||||||||
Change in fair value attributable to fixed maturity securities designated in fair value hedging relationships | — | (4 | ) | ||||||||||||||||||||||||||||||||||
Net unrealized gains on available-for-sale securities, before adjustments and taxes1 | $ | 1,265 | $ | 2,890 | |||||||||||||||||||||||||||||||||
Adjustment to DAC and other | (176 | ) | (482 | ) | |||||||||||||||||||||||||||||||||
Adjustment to future policy benefits and claims | (89 | ) | (295 | ) | |||||||||||||||||||||||||||||||||
Adjustment to policyholder dividend obligation | (85 | ) | (177 | ) | |||||||||||||||||||||||||||||||||
Deferred federal income tax expense | (314 | ) | (672 | ) | |||||||||||||||||||||||||||||||||
Net unrealized gains on available-for-sale securities | $ | 601 | $ | 1,264 | |||||||||||||||||||||||||||||||||
1 | Includes net unrealized losses of $(40) million and $(48) million as of December 31, 2013 and 2012, respectively, related to the non-credit portion of other-than-temporarily impaired securities. | ||||||||||||||||||||||||||||||||||||
Summarizes change in net unrealized gains and losses on available for sale securities | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes the change in net unrealized gains and losses reported in accumulated other comprehensive income, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
Balance at beginning of year | $ | 1,264 | $ | 693 | |||||||||||||||||||||||||||||||||
Unrealized gains and losses arising during the period: | |||||||||||||||||||||||||||||||||||||
Net unrealized (losses) gains on available-for-sale securities before adjustments | (1,657 | ) | 990 | ||||||||||||||||||||||||||||||||||
Non-credit impairments and subsequent changes in fair value of impaired debt securities | 8 | 178 | |||||||||||||||||||||||||||||||||||
Net adjustment to DAC and other | 306 | (135 | ) | ||||||||||||||||||||||||||||||||||
Net adjustment to future policy benefits and claims | 206 | (112 | ) | ||||||||||||||||||||||||||||||||||
Net adjustment to policyholder dividend obligation | 92 | (45 | ) | ||||||||||||||||||||||||||||||||||
Related federal income tax benefit (expense) | 366 | (308 | ) | ||||||||||||||||||||||||||||||||||
Change in unrealized (losses) gains on available-for-sale securities | $ | (679 | ) | $ | 568 | ||||||||||||||||||||||||||||||||
Reclassification adjustment for net losses realized on available-for-sale securities, net of tax benefit ($8 and $2 as of December 31, 2013 and 2012, respectively) | (16 | ) | (3 | ) | |||||||||||||||||||||||||||||||||
Change in net unrealized (losses) gains on available-for-sale securities | $ | (663 | ) | $ | 571 | ||||||||||||||||||||||||||||||||
Balance at end of year | $ | 601 | $ | 1,264 | |||||||||||||||||||||||||||||||||
Summarizes available for sale securities by asset class in gross unrealized loss position | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes by asset class available-for-sale securities, in an unrealized loss position based on the amount of time each type of security has been in an unrealized loss position, as well as the related fair value and number of securities, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
Less than or equal to one year | More than one year | Total | |||||||||||||||||||||||||||||||||||
Number | Number | Number | |||||||||||||||||||||||||||||||||||
(in millions, except number | Fair | Unrealized | of | Fair | Unrealized | of | Fair | Unrealized | of | ||||||||||||||||||||||||||||
of securities) | value | losses | securities | value | losses | securities | value | losses | securities | ||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
Corporate public securities | $ | 4,889 | $ | 256 | 346 | $ | 442 | $ | 39 | 34 | $ | 5,331 | $ | 295 | 380 | ||||||||||||||||||||||
Residential mortgage-backed securities | 725 | 16 | 70 | 604 | 63 | 148 | 1,329 | 79 | 218 | ||||||||||||||||||||||||||||
Other asset-backed securities | 507 | 6 | 32 | 144 | 71 | 40 | 651 | 77 | 72 | ||||||||||||||||||||||||||||
Other | 1,838 | 85 | 126 | 222 | 16 | 20 | 2,060 | 101 | 146 | ||||||||||||||||||||||||||||
Total | $ | 7,959 | $ | 363 | 574 | $ | 1,412 | $ | 189 | 242 | $ | 9,371 | $ | 552 | 816 | ||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||||||||||||||||
Corporate public securities | $ | 710 | $ | 11 | 68 | $ | 150 | $ | 22 | 10 | $ | 860 | $ | 33 | 78 | ||||||||||||||||||||||
Residential mortgage-backed securities | 89 | 2 | 12 | 1,029 | 104 | 190 | 1,118 | 106 | 202 | ||||||||||||||||||||||||||||
Other asset-backed securities | 27 | 1 | 5 | 163 | 86 | 46 | 190 | 87 | 51 | ||||||||||||||||||||||||||||
Other | 326 | 4 | 23 | 284 | 31 | 36 | 610 | 35 | 59 | ||||||||||||||||||||||||||||
Total | $ | 1,152 | $ | 18 | 108 | $ | 1,626 | $ | 243 | 282 | $ | 2,778 | $ | 261 | 390 | ||||||||||||||||||||||
Summarizes gross unrealized losses based on the ratio of estimated fair value to amortized cost | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes gross unrealized losses based on the ratio of fair value to amortized cost, for available-for-sale securities in an unrealized loss position, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||||||
Less | More | Less | More | ||||||||||||||||||||||||||||||||||
than or | than | than or | than | ||||||||||||||||||||||||||||||||||
equal to | one | equal to | one | ||||||||||||||||||||||||||||||||||
(in millions) | one year | year | Total | one year | year | Total | |||||||||||||||||||||||||||||||
99.9% - 80.0% | $ | 363 | $ | 107 | $ | 470 | $ | 18 | $ | 85 | $ | 103 | |||||||||||||||||||||||||
Less than 80.0% | |||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 21 | 21 | — | 50 | 50 | |||||||||||||||||||||||||||||||
Other asset-backed securities | — | 61 | 61 | — | 72 | 72 | |||||||||||||||||||||||||||||||
Other | — | — | — | — | 36 | 36 | |||||||||||||||||||||||||||||||
Total | $ | 363 | $ | 189 | $ | 552 | $ | 18 | $ | 243 | $ | 261 | |||||||||||||||||||||||||
Summary of the amortized cost of mortgage loans | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes the amortized cost of mortgage loans by method of evaluation for credit loss, and the related valuation allowances by type of credit loss, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
(in millions) | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||||||
Amortized cost: | |||||||||||||||||||||||||||||||||||||
Loans with non-specific reserves | $ | 6,350 | $ | 5,820 | |||||||||||||||||||||||||||||||||
Loans with specific reserves | 26 | 51 | |||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 6,376 | $ | 5,871 | |||||||||||||||||||||||||||||||||
Valuation allowance: | |||||||||||||||||||||||||||||||||||||
Non-specific reserves | $ | 29 | $ | 33 | |||||||||||||||||||||||||||||||||
Specific reserves | 6 | 11 | |||||||||||||||||||||||||||||||||||
Total valuation allowance | $ | 35 | $ | 44 | |||||||||||||||||||||||||||||||||
Mortgage loans, net of allowance | $ | 6,341 | $ | 5,827 | |||||||||||||||||||||||||||||||||
Activity in the valuation allowance for mortgage loans | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes activity in the valuation allowance for mortgage loans, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Balance at beginning of year | $ | 44 | $ | 60 | $ | 96 | |||||||||||||||||||||||||||||||
Current period provision1 | (4 | ) | 2 | 25 | |||||||||||||||||||||||||||||||||
Recoveries2 | (5 | ) | (15 | ) | (7 | ) | |||||||||||||||||||||||||||||||
Charge offs and other | — | (3 | ) | (54 | ) | ||||||||||||||||||||||||||||||||
Balance at end of year | $ | 35 | $ | 44 | $ | 60 | |||||||||||||||||||||||||||||||
1 | Includes specific reserve provisions and all changes in non-specific reserves. | ||||||||||||||||||||||||||||||||||||
2 | Includes recoveries on sales and increases in the valuation of loans with specific reserves. | ||||||||||||||||||||||||||||||||||||
Summary of the impaired mortgage loans by class | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes impaired commercial mortgage loans by class, for the years ended: | |||||||||||||||||||||||||||||||||||||
(in millions) | Office | Industrial | Retail | Other | Total | ||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Amortized cost | $ | — | $ | 26 | $ | — | $ | — | $ | 26 | |||||||||||||||||||||||||||
Specific reserves | — | (6 | ) | — | — | (6 | ) | ||||||||||||||||||||||||||||||
Carrying value of impaired mortgage loans, net of allowance | $ | — | $ | 20 | $ | — | $ | — | $ | 20 | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Amortized cost | $ | 13 | $ | 26 | $ | 12 | $ | — | $ | 51 | |||||||||||||||||||||||||||
Specific reserves | (2 | ) | (7 | ) | (2 | ) | — | (11 | ) | ||||||||||||||||||||||||||||
Carrying value of impaired mortgage loans, net of allowance | $ | 11 | $ | 19 | $ | 10 | $ | — | $ | 40 | |||||||||||||||||||||||||||
Summary of average recorded investment and interest income recognized for impaired mortgage loan | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes average recorded investment and interest income recognized for impaired commercial mortgage loans by class, for the years ended: | |||||||||||||||||||||||||||||||||||||
(in millions) | Office | Industrial | Retail | Other | Total | ||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Average recorded investment | $ | 5 | $ | 20 | $ | 5 | $ | — | $ | 30 | |||||||||||||||||||||||||||
Interest income recognized | $ | 1 | $ | 1 | $ | 1 | $ | — | $ | 3 | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Average recorded investment | $ | 9 | $ | 20 | $ | 11 | $ | 34 | $ | 74 | |||||||||||||||||||||||||||
Interest income recognized | $ | 1 | $ | 2 | $ | 1 | $ | 6 | $ | 10 | |||||||||||||||||||||||||||
Summary of LTV ratio and DSC ratios of the mortgage loan portfolio | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes the LTV ratio and DSC ratios of the mortgage loan portfolio, as of the dates indicated: | |||||||||||||||||||||||||||||||||||||
LTV ratio | DSC ratio | ||||||||||||||||||||||||||||||||||||
(in millions) | Less | 80% - less | 90% or | Total | Greater | 1.00-1.10 | Less than | Total | |||||||||||||||||||||||||||||
than | than 90% | greater | than 1.10 | 1 | |||||||||||||||||||||||||||||||||
80% | |||||||||||||||||||||||||||||||||||||
December 31, 2013: | |||||||||||||||||||||||||||||||||||||
Apartment | $ | 1,788 | $ | 52 | $ | 30 | $ | 1,870 | $ | 1,857 | $ | 6 | $ | 7 | $ | 1,870 | |||||||||||||||||||||
Industrial | 951 | 52 | 86 | 1,089 | 893 | 122 | 74 | 1,089 | |||||||||||||||||||||||||||||
Office | 837 | 30 | 38 | 905 | 800 | 43 | 62 | 905 | |||||||||||||||||||||||||||||
Retail | 2,236 | 41 | 21 | 2,298 | 2,214 | 61 | 23 | 2,298 | |||||||||||||||||||||||||||||
Other | 213 | — | 1 | 214 | 214 | — | — | 214 | |||||||||||||||||||||||||||||
Total | $ | 6,025 | $ | 175 | $ | 176 | $ | 6,376 | $ | 5,978 | $ | 232 | $ | 166 | $ | 6,376 | |||||||||||||||||||||
Weighted average DSC ratio | 1.77 | 1.22 | 1 | 1.74 | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||||||
Weighted average LTV ratio | n/a | n/a | n/a | n/a | 60 | % | 61 | % | 91 | % | 61 | % | |||||||||||||||||||||||||
December 31, 2012: | |||||||||||||||||||||||||||||||||||||
Apartment | $ | 1,119 | $ | 129 | $ | 62 | $ | 1,310 | $ | 1,303 | $ | 5 | $ | 2 | $ | 1,310 | |||||||||||||||||||||
Industrial | 922 | 76 | 162 | 1,160 | 951 | 121 | 88 | 1,160 | |||||||||||||||||||||||||||||
Office | 776 | 55 | 42 | 873 | 783 | 16 | 74 | 873 | |||||||||||||||||||||||||||||
Retail | 1,940 | 250 | 86 | 2,276 | 2,139 | 92 | 45 | 2,276 | |||||||||||||||||||||||||||||
Other | 189 | 57 | 6 | 252 | 252 | — | — | 252 | |||||||||||||||||||||||||||||
Total | $ | 4,946 | $ | 567 | $ | 358 | $ | 5,871 | $ | 5,428 | $ | 234 | $ | 209 | $ | 5,871 | |||||||||||||||||||||
Weighted average DSC ratio | 1.74 | 1.27 | 1.07 | 1.65 | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||||||
Weighted average LTV ratio | n/a | n/a | n/a | n/a | 66 | % | 76 | % | 96 | % | 68 | % | |||||||||||||||||||||||||
Summary of net investment income by investment type | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes net investment income by investment type, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 1,565 | $ | 1,506 | $ | 1,502 | |||||||||||||||||||||||||||||||
Mortgage loans | 348 | 366 | 370 | ||||||||||||||||||||||||||||||||||
Policy loans | 52 | 53 | 56 | ||||||||||||||||||||||||||||||||||
Other | (57 | ) | (45 | ) | (34 | ) | |||||||||||||||||||||||||||||||
Gross investment income | $ | 1,908 | $ | 1,880 | $ | 1,894 | |||||||||||||||||||||||||||||||
Investment expenses | 59 | 55 | 50 | ||||||||||||||||||||||||||||||||||
Net investment income | $ | 1,849 | $ | 1,825 | $ | 1,844 | |||||||||||||||||||||||||||||||
Net Realized Investment Gains and Losses | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes net realized investment gains and losses, net of other-than-temporary impairments, by source, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Net derivative gains (losses) | $ | 705 | $ | 314 | $ | (1,636 | ) | ||||||||||||||||||||||||||||||
Realized gains on sales | 32 | 48 | 64 | ||||||||||||||||||||||||||||||||||
Realized losses on sales | (54 | ) | (23 | ) | (45 | ) | |||||||||||||||||||||||||||||||
Other | — | 12 | (19 | ) | |||||||||||||||||||||||||||||||||
Net realized investment gains (losses) before other-than-temporary impairments on fixed maturity securities | $ | 683 | $ | 351 | $ | (1,636 | ) | ||||||||||||||||||||||||||||||
Other-than-temporary impairments on fixed maturity securities1 | (5 | ) | (32 | ) | (40 | ) | |||||||||||||||||||||||||||||||
Net realized investment gains (losses), net of other-than-temporary impairments | $ | 678 | $ | 319 | $ | (1,676 | ) | ||||||||||||||||||||||||||||||
1 | Other-than-temporary impairments on fixed maturity securities are net $6 million, $36 million and $95 million of non-credit losses included in other comprehensive income for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||||||||||||||||
Other-Than-Temporary Impairment Losses | ' | ||||||||||||||||||||||||||||||||||||
The following table summarizes the cumulative credit losses, for the years ended: | |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Cumulative credit losses at beginning of year1 | $ | (289 | ) | $ | (328 | ) | $ | (340 | ) | ||||||||||||||||||||||||||||
New credit losses | (3 | ) | (18 | ) | (8 | ) | |||||||||||||||||||||||||||||||
Incremental credit losses | (3 | ) | (10 | ) | (29 | ) | |||||||||||||||||||||||||||||||
Losses related to securities included in the beginning balance sold or paid down during the period | 23 | 67 | 49 | ||||||||||||||||||||||||||||||||||
Cumulative credit losses at end of year1 | $ | (272 | ) | $ | (289 | ) | $ | (328 | ) | ||||||||||||||||||||||||||||
1 | Cumulative credit losses are defined as amounts related to the Company’s credit portion of the other-than-temporary impairment losses on debt securities that the Company does not intend to sell and that it is not more likely than not the Company will be required to sell prior to recovery of the amortized cost basis. |
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary of fair value of derivative instruments | ' | ||||||||||||||||
The following table summarizes the fair value and related notional amounts of derivative instruments, as of the dates indicated: | |||||||||||||||||
Derivative assets | Derivative liabilities | ||||||||||||||||
(in millions) | Fair value | Notional | Fair value | Notional | |||||||||||||
December 31, 2013 | |||||||||||||||||
Derivatives designated and qualifying as hedging instruments | $ | 1 | $ | 6 | $ | 26 | $ | 345 | |||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Interest rate contracts | $ | 1,787 | $ | 26,156 | $ | 2,100 | $ | 29,715 | |||||||||
Equity contracts | 343 | 6,556 | — | — | |||||||||||||
Total return swaps | 6 | 1,101 | 52 | 1,183 | |||||||||||||
Other derivative contracts | — | — | 5 | 2 | |||||||||||||
Total derivative positions1 | $ | 2,137 | $ | 33,819 | $ | 2,183 | $ | 31,245 | |||||||||
December 31, 2012 | |||||||||||||||||
Derivatives designated and qualifying as hedging instruments | $ | 4 | $ | 79 | $ | 21 | $ | 192 | |||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Interest rate contracts | $ | 1,960 | $ | 21,216 | $ | 2,065 | $ | 23,746 | |||||||||
Equity contracts | 822 | 7,445 | — | — | |||||||||||||
Total return swaps | 4 | 1,513 | 32 | 1,551 | |||||||||||||
Other derivative contracts | — | 10 | 5 | 17 | |||||||||||||
Total derivative positions1 | $ | 2,790 | $ | 30,263 | $ | 2,123 | $ | 25,506 | |||||||||
1 | Derivative assets and liabilities are included in other assets and other liabilities, respectively, in the consolidated balance sheets. As of December 31, 2013 and 2012, derivative assets exclude $196 million and $170 million, respectively, of accrued interest receivable, and derivative liabilities exclude $227 million and $179 million, respectively, of accrued interest payable. | ||||||||||||||||
Summary of realized gains and losses for derivative instruments | ' | ||||||||||||||||
The following table summarizes gains and losses for derivative instruments recognized in net realized investment gains and losses in the consolidated statements of operations, for the years ended: | |||||||||||||||||
(in millions) | December 31, | December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Derivatives designated and qualifying as hedging instruments | $ | (1 | ) | $ | (1 | ) | $ | (4 | ) | ||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Interest rate contracts | $ | (209 | ) | $ | (125 | ) | $ | (44 | ) | ||||||||
Equity contracts | (776 | ) | (665 | ) | (45 | ) | |||||||||||
Total return swaps | (321 | ) | (343 | ) | (17 | ) | |||||||||||
Other derivative contracts | (9 | ) | (1 | ) | (6 | ) | |||||||||||
Net interest settlements | 14 | 53 | 34 | ||||||||||||||
Total derivative losses1 | $ | (1,302 | ) | $ | (1,082 | ) | $ | (82 | ) | ||||||||
Change in embedded derivatives on guaranteed benefit annuity programs2 | 1,751 | 1,185 | (1,674 | ) | |||||||||||||
Other revenue on guaranteed benefit annuity programs | 256 | 211 | 120 | ||||||||||||||
Change in embedded derivative liabilities and related fees | $ | 2,007 | $ | 1,396 | $ | (1,554 | ) | ||||||||||
Net realized derivative gains (losses) | $ | 705 | $ | 314 | $ | (1,636 | ) | ||||||||||
1 | Included in total derivative losses are economic hedging losses of $1.8 billion, $827 million and gains of $1.0 billion related to the guaranteed benefit annuity programs for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||
2 | As part of the Company’s annual comprehensive review of DAC model assumptions, all relevant assumptions impacting the fair value of embedded derivatives on annuity programs are also reviewed and updated. For the individual variable annuity business, the change in the embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2013 includes model enhancements and updated assumptions for discounting, benefit utilization, mortality and lapse rates. The change in embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2012 included updated assumptions for lapse rates, mortality, withdrawal behavior and benefit utilization. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||||||||||||||||||
The following table summarizes assets and liabilities held at fair value on a recurring basis as of December 31, 2013: | |||||||||||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. | $ | 557 | $ | 1 | $ | 3 | $ | 561 | |||||||||||||||||||||||||
Government corporations and agencies | |||||||||||||||||||||||||||||||||
Obligations of states, political subdivisions and foreign governments | 63 | 1,900 | — | 1,963 | |||||||||||||||||||||||||||||
Corporate public securities | 1 | 18,705 | 79 | 18,785 | |||||||||||||||||||||||||||||
Corporate private securities | — | 3,791 | 803 | 4,594 | |||||||||||||||||||||||||||||
Residential mortgage-backed securities | 791 | 3,203 | 9 | 4,003 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,504 | — | 1,504 | |||||||||||||||||||||||||||||
Other asset-backed securities | — | 645 | 194 | 839 | |||||||||||||||||||||||||||||
Total fixed maturity securities, available-for-sale, at fair value | $ | 1,412 | $ | 29,749 | $ | 1,088 | $ | 32,249 | |||||||||||||||||||||||||
Other investments at fair value | 64 | 357 | 45 | 466 | |||||||||||||||||||||||||||||
Investments at fair value | $ | 1,476 | $ | 30,106 | $ | 1,133 | $ | 32,715 | |||||||||||||||||||||||||
Derivative assets | — | 1,794 | 343 | 2,137 | |||||||||||||||||||||||||||||
Separate account assets | 80,647 | 1,339 | 2,083 | 84,069 | |||||||||||||||||||||||||||||
Assets at fair value | $ | 82,123 | $ | 33,239 | $ | 3,559 | $ | 118,921 | |||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Future policy benefits and claims: | |||||||||||||||||||||||||||||||||
Embedded derivatives on living benefits | $ | — | $ | — | $ | 1,094 | $ | 1,094 | |||||||||||||||||||||||||
Embedded derivatives on indexed products | — | — | (84 | ) | (84 | ) | |||||||||||||||||||||||||||
Total future policy benefits and claims | $ | — | $ | — | $ | 1,010 | $ | 1,010 | |||||||||||||||||||||||||
Derivative liabilities | — | (2,178 | ) | (5 | ) | (2,183 | ) | ||||||||||||||||||||||||||
Liabilities at fair value | $ | — | $ | (2,178 | ) | $ | 1,005 | $ | (1,173 | ) | |||||||||||||||||||||||
The following table summarizes assets and liabilities held at fair value on a recurring basis as of December 31, 2012: | |||||||||||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. | $ | 592 | $ | 2 | $ | 3 | $ | 597 | |||||||||||||||||||||||||
Government corporations and agencies | |||||||||||||||||||||||||||||||||
Obligations of states, political subdivisions and foreign governments | 73 | 2,047 | — | 2,120 | |||||||||||||||||||||||||||||
Corporate public securities | 1 | 17,890 | 119 | 18,010 | |||||||||||||||||||||||||||||
Corporate private securities | — | 3,817 | 772 | 4,589 | |||||||||||||||||||||||||||||
Residential mortgage-backed securities | 484 | 4,173 | 10 | 4,667 | |||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,335 | 2 | 1,337 | |||||||||||||||||||||||||||||
Other asset-backed securities | — | 200 | 291 | 491 | |||||||||||||||||||||||||||||
Total fixed maturity securities, available-for-sale, at fair value | $ | 1,150 | $ | 29,464 | $ | 1,197 | $ | 31,811 | |||||||||||||||||||||||||
Other investments at fair value | 45 | 1,001 | 62 | 1,108 | |||||||||||||||||||||||||||||
Investments at fair value | $ | 1,195 | $ | 30,465 | $ | 1,259 | $ | 32,919 | |||||||||||||||||||||||||
Derivative assets | — | 1,968 | 822 | 2,790 | |||||||||||||||||||||||||||||
Separate account assets | 68,185 | 1,230 | 2,025 | 71,440 | |||||||||||||||||||||||||||||
Assets at fair value | $ | 69,380 | $ | 33,663 | $ | 4,106 | $ | 107,149 | |||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Future policy benefits and claims: | |||||||||||||||||||||||||||||||||
Embedded derivatives on living benefits | $ | — | $ | — | $ | (657 | ) | $ | (657 | ) | |||||||||||||||||||||||
Embedded derivatives on indexed products | — | — | (91 | ) | (91 | ) | |||||||||||||||||||||||||||
Total future policy benefits and claims | $ | — | $ | — | $ | (748 | ) | $ | (748 | ) | |||||||||||||||||||||||
Derivative liabilities | — | (2,118 | ) | (5 | ) | (2,123 | ) | ||||||||||||||||||||||||||
Liabilities at fair value | $ | — | $ | (2,118 | ) | $ | (753 | ) | $ | (2,871 | ) | ||||||||||||||||||||||
Fair value measurements of unobservable inputs | ' | ||||||||||||||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013: | |||||||||||||||||||||||||||||||||
Balance | Net gains (losses) | Balance | |||||||||||||||||||||||||||||||
as of | In other | Transfers | Transfers | as of | |||||||||||||||||||||||||||||
December | comprehensive | into | out of | December | |||||||||||||||||||||||||||||
(in millions) | 31, 2012 | In operations1 | income | Purchases | Sales | Level 3 | Level 3 | 31, 2013 | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
Corporate private securities | $ | 772 | $ | (1 | ) | $ | (2 | ) | $ | 91 | $ | (117 | ) | $ | 127 | $ | (67 | ) | $ | 803 | |||||||||||||
Other asset-backed securities | 291 | — | 10 | 6 | (62 | ) | 15 | (66 | ) | 194 | |||||||||||||||||||||||
Other | 134 | — | (7 | ) | 18 | (53 | ) | — | (1 | ) | 91 | ||||||||||||||||||||||
Total fixed maturity securities, available-for-sale, at fair value2 | $ | 1,197 | (1 | ) | 1 | 115 | (232 | ) | 142 | (134 | ) | 1,088 | |||||||||||||||||||||
Other investments at fair value | 62 | (6 | ) | 6 | 5 | (22 | ) | — | — | 45 | |||||||||||||||||||||||
Derivative assets3 | 822 | (447 | ) | — | 129 | (161 | ) | — | — | 343 | |||||||||||||||||||||||
Separate account assets | 2,025 | 58 | — | — | — | — | — | 2,083 | |||||||||||||||||||||||||
Assets at fair value | $ | 4,106 | $ | (396 | ) | $ | 7 | $ | 249 | $ | (415 | ) | $ | 142 | $ | (134 | ) | $ | 3,559 | ||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Future policy benefits and claims: | |||||||||||||||||||||||||||||||||
Embedded derivatives on living benefits | $ | (657 | ) | $ | 1,751 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,094 | ||||||||||||||||
Embedded derivatives on indexed products | (91 | ) | 7 | — | — | — | — | — | (84 | ) | |||||||||||||||||||||||
Total future policy benefits and claims | $ | (748 | ) | $ | 1,758 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,010 | ||||||||||||||||
Derivative liabilities3 | (5 | ) | — | — | — | — | — | — | (5 | ) | |||||||||||||||||||||||
Liabilities at fair value | $ | (753 | ) | $ | 1,758 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,005 | ||||||||||||||||
1 | Net gains and losses included in operations are reported in net realized investment gains and losses and interest credited to policyholder accounts. The net unrealized gains on separate account assets are attributable to contractholders and therefore are not included in the Company’s earnings. The change in unrealized (losses) gains included in operations on assets and liabilities still held at the end of the year was $(6) million for other investments at fair value, $(297) million for derivative assets and $1.8 billion for future policy benefits and claims. | ||||||||||||||||||||||||||||||||
2 | Non-binding broker quotes were utilized to determine a fair value of $924 million of total fixed maturity securities as of December 31, 2013. | ||||||||||||||||||||||||||||||||
3 | Non-binding broker quotes were utilized to determine a fair value of all Level 3 derivative assets and liabilities. | ||||||||||||||||||||||||||||||||
The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2012: | |||||||||||||||||||||||||||||||||
Balance | Net gains (losses) | Balance | |||||||||||||||||||||||||||||||
as of | In other | Transfers | Transfers | as of | |||||||||||||||||||||||||||||
December | comprehensive | into | out of | December | |||||||||||||||||||||||||||||
(in millions) | 31, 2011 | In operations1 | income | Purchases | Sales | Level 3 | Level 3 | 31, 2012 | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||
Corporate private securities | $ | 1,209 | $ | 2 | $ | 13 | $ | 69 | $ | (187 | ) | $ | 40 | $ | (374 | ) | $ | 772 | |||||||||||||||
Other asset-backed securities | 251 | 2 | 53 | 36 | (61 | ) | 10 | — | 291 | ||||||||||||||||||||||||
Other | 131 | — | 11 | 2 | (8 | ) | 1 | (3 | ) | 134 | |||||||||||||||||||||||
Total fixed maturity securities, available-for-sale, at fair value2 | $ | 1,591 | 4 | 77 | 107 | (256 | ) | 51 | (377 | ) | 1,197 | ||||||||||||||||||||||
Other investments at fair value | 43 | 16 | 3 | — | — | — | — | 62 | |||||||||||||||||||||||||
Derivative assets3 | 1,004 | (353 | ) | — | 350 | (179 | ) | — | — | 822 | |||||||||||||||||||||||
Separate account assets | 1,952 | 73 | — | — | — | — | — | 2,025 | |||||||||||||||||||||||||
Assets at fair value | $ | 4,590 | $ | (260 | ) | $ | 80 | $ | 457 | $ | (435 | ) | $ | 51 | $ | (377 | ) | $ | 4,106 | ||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Future policy benefits and claims: | |||||||||||||||||||||||||||||||||
Embedded derivatives on living benefits | $ | (1,842 | ) | $ | 1,185 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (657 | ) | |||||||||||||||
Embedded derivatives on indexed products | (63 | ) | (28 | ) | — | — | — | — | — | (91 | ) | ||||||||||||||||||||||
Total future policy benefits and claims | $ | (1,905 | ) | $ | 1,157 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (748 | ) | |||||||||||||||
Derivative liabilities3 | (6 | ) | 1 | — | — | — | — | — | (5 | ) | |||||||||||||||||||||||
Liabilities at fair value | $ | (1,911 | ) | $ | 1,158 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (753 | ) | |||||||||||||||
1 | Net gains and losses included in operations are reported in net realized investment gains and losses and interest credited to policyholder accounts. The net unrealized gains on separate account assets are attributable to contractholders and therefore are not included in the Company’s earnings. The change in unrealized gains (losses) included in operations on assets and liabilities still held as of the end of the year was $16 million for other investments at fair value, $(257) million for derivative assets, $1.2 billion for future policy benefits and claims and $(1) million for derivative liabilities. | ||||||||||||||||||||||||||||||||
2 | Non-binding broker quotes were utilized to determine a fair value of $1.1 billion of total fixed maturity securities as of December 31, 2012. | ||||||||||||||||||||||||||||||||
3 | Non-binding broker quotes were utilized to determine a fair value of all Level 3 derivative assets and liabilities. | ||||||||||||||||||||||||||||||||
Summary of significant unobservable inputs used for fair value measurements for living benefits liabilities | ' | ||||||||||||||||||||||||||||||||
The following table summarizes significant unobservable inputs used for fair value measurements for living benefits liabilities classified as Level 3 as of December 31, 2013: | |||||||||||||||||||||||||||||||||
Unobservable Inputs | Range | ||||||||||||||||||||||||||||||||
Mortality | 0.1%-8%2 | ||||||||||||||||||||||||||||||||
Lapse | 0%-35% | ||||||||||||||||||||||||||||||||
Wait period | 0 yrs –30 yrs3 | ||||||||||||||||||||||||||||||||
Efficiency of benefit utilization1 | 65%-100% | ||||||||||||||||||||||||||||||||
Discount rate | See footnote 4 | ||||||||||||||||||||||||||||||||
Index volatility | 15%-25% | ||||||||||||||||||||||||||||||||
1 | The unobservable input is not applicable to GMABs. | ||||||||||||||||||||||||||||||||
2 | Represents the mortality for the majority of business with living benefits, with policyholders ranging from 45 to 85. | ||||||||||||||||||||||||||||||||
3 | A portion of the contractholders could never use the benefit, which would extend the range to an indeterminate period. | ||||||||||||||||||||||||||||||||
4 | Incorporates the liquidity and non-performance risk adjustment. The liquidity spread takes into consideration market observables for spreads in illiquid assets. The non-performance risk adjustment reflects an additional spread over LIBOR determined by market observables for similarly rated public bonds. | ||||||||||||||||||||||||||||||||
Summary of significant unobservable inputs used for fair value measurements for indexed universal life equity indexed products | ' | ||||||||||||||||||||||||||||||||
The following table summarizes significant unobservable inputs used for fair value measurements for indexed universal life equity indexed products classified as Level 3 as of December 31, 2013: | |||||||||||||||||||||||||||||||||
Unobservable Inputs | Range | ||||||||||||||||||||||||||||||||
Mortality | 0%-4%1 | ||||||||||||||||||||||||||||||||
Lapse | 0%-10% | ||||||||||||||||||||||||||||||||
Index volatility | 15%-25% | ||||||||||||||||||||||||||||||||
1 | Represents the mortality for the majority of business, with policyholders ranging from 0 to 75. | ||||||||||||||||||||||||||||||||
Summary of carrying value and fair value of the Company's financial instruments not carried at fair value | ' | ||||||||||||||||||||||||||||||||
The following table summarizes the carrying value and fair value of the Company’s financial instruments not carried at fair value as of the dates indicated. The valuation techniques used to estimate these fair values are described below. | |||||||||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||||||||||||||
(in millions) | value | value | Level 2 | Level 3 | value | value | Level 2 | Level 3 | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Investments: | |||||||||||||||||||||||||||||||||
Mortgage loans, net of allowance | $ | 6,341 | $ | 6,481 | $ | — | $ | 6,481 | $ | 5,827 | $ | 5,988 | $ | — | $ | 5,988 | |||||||||||||||||
Policy loans | $ | 987 | $ | 987 | $ | — | $ | 987 | $ | 980 | $ | 980 | $ | — | $ | 980 | |||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Investment contracts | $ | 21,874 | $ | 20,436 | $ | — | $ | 20,436 | $ | 20,123 | $ | 19,561 | $ | — | $ | 19,561 | |||||||||||||||||
Short-term debt | $ | 278 | $ | 278 | $ | — | $ | 278 | $ | 300 | $ | 300 | $ | — | $ | 300 | |||||||||||||||||
Long-term debt | $ | 707 | $ | 1,004 | $ | 997 | $ | 7 | $ | 1,038 | $ | 1,323 | $ | 1,282 | $ | 41 |
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of changes in the carrying value of goodwill by segment | ' | ||||||||||||
The following table summarizes changes in the carrying value of goodwill by segment for the years indicated: | |||||||||||||
(in millions) | Retirement | Individual | Total | ||||||||||
Plans | Products | ||||||||||||
& | |||||||||||||
Solutions - | |||||||||||||
Life and | |||||||||||||
NBSG | |||||||||||||
Balance as of December 31, 20111 | $ | 25 | $ | 175 | $ | 200 | |||||||
Adjustments | — | — | — | ||||||||||
Balance as of December 31, 20121 | $ | 25 | $ | 175 | $ | 200 | |||||||
Adjustments | — | — | — | ||||||||||
Balance as of December 31, 20131 | $ | 25 | $ | 175 | $ | 200 | |||||||
1 | The goodwill balances have not been previously impaired. |
Closed_Block_Tables
Closed Block (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of financial information for the closed block | ' | ||||||||||||
The following table summarizes financial information for the closed block, as of the dates indicated: | |||||||||||||
December 31, | December 31, | ||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
Liabilities: | |||||||||||||
Future policyholder benefits | $ | 1,703 | $ | 1,732 | |||||||||
Policyholder funds and accumulated dividends | 141 | 142 | |||||||||||
Policyholder dividends payable | 23 | 24 | |||||||||||
Policyholder dividend obligation | 113 | 198 | |||||||||||
Other policy obligations and liabilities | 29 | 32 | |||||||||||
Total liabilities | $ | 2,009 | $ | 2,128 | |||||||||
Assets: | |||||||||||||
Fixed maturity securities, available-for-sale | $ | 1,320 | $ | 1,511 | |||||||||
Mortgage loans, net of allowance | 257 | 183 | |||||||||||
Policy loans | 157 | 164 | |||||||||||
Other assets | 93 | 77 | |||||||||||
Total assets | $ | 1,827 | $ | 1,935 | |||||||||
Excess of reported liabilities over assets | 182 | 193 | |||||||||||
Portion of above representing other comprehensive income: | |||||||||||||
(Decrease) increase in unrealized gain on fixed maturity securities, available-for-sale | $ | (92 | ) | $ | 45 | ||||||||
Adjustment to policyholder dividend obligation | 92 | (45 | ) | ||||||||||
Total | $ | — | $ | — | |||||||||
Maximum future earnings to be recognized from assets and liabilities | $ | 182 | $ | 193 | |||||||||
Other comprehensive income: | |||||||||||||
Fixed maturity securities, available-for-sale: | |||||||||||||
Fair value | $ | 1,320 | $ | 1,511 | |||||||||
Amortized cost | 1,235 | 1,334 | |||||||||||
Shadow policyholder dividend obligation | (85 | ) | (177 | ) | |||||||||
Net unrealized appreciation | $ | — | $ | — | |||||||||
Summary of closed block operations | ' | ||||||||||||
The following table summarizes closed block operations for the years ended: | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Revenues: | |||||||||||||
Premiums | $ | 66 | $ | 73 | $ | 77 | |||||||
Net investment income | 94 | 98 | 102 | ||||||||||
Realized investment gains (losses) | — | 1 | (3 | ) | |||||||||
Realized losses credited to policyholder benefit obligation | (4 | ) | (5 | ) | (1 | ) | |||||||
Total revenues | $ | 156 | $ | 167 | $ | 175 | |||||||
Benefits and expenses: | |||||||||||||
Policy and contract benefits | $ | 123 | $ | 134 | $ | 145 | |||||||
Change in future policyholder benefits and interest credited to policyholder accounts | (29 | ) | (27 | ) | (35 | ) | |||||||
Policyholder dividends | 44 | 50 | 55 | ||||||||||
Change in policyholder dividend obligation | 3 | (8 | ) | (8 | ) | ||||||||
Other expenses | (2 | ) | 1 | 1 | |||||||||
Total benefits and expenses | $ | 139 | $ | 150 | $ | 158 | |||||||
Total revenues, net of benefits and expenses, before federal income tax expense | $ | 17 | $ | 17 | $ | 17 | |||||||
Federal income tax expense | 6 | 6 | 6 | ||||||||||
Revenues, net of benefits and expenses and federal income tax expense | $ | 11 | $ | 11 | $ | 11 | |||||||
Maximum future earnings from assets and liabilities: | |||||||||||||
Beginning of period | $ | 193 | $ | 204 | $ | 215 | |||||||
Change during period | (11 | ) | (11 | ) | (11 | ) | |||||||
End of period | $ | 182 | $ | 193 | $ | 204 | |||||||
ShortTerm_Debt_Tables
Short-Term Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Summary of short-term debt and weighted average annual interest rates | ' | ||||||||
The following table summarizes the carrying value of short-term debt and weighted average annual interest rates, as of the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
(in millions) | 2013 | 2012 | |||||||
$600 million commercial paper program (0.24% and 0.29%, respectively) | $ | 278 | $ | 300 | |||||
Total short-term debt | $ | 278 | $ | 300 | |||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Summary of long-term debt | ' | ||||||||
The following table summarizes the carrying value of long-term debt, as of the dates indicated: | |||||||||
December 31, | December 31, | ||||||||
(in millions) | 2013 | 2012 | |||||||
8.15% surplus note, due June 26, 2032, payable to NFS | $ | 300 | $ | 300 | |||||
7.50% surplus note, due December 17, 2031, payable to NFS | 300 | 300 | |||||||
6.75% surplus note, due December 23, 2033, payable to NFS | 100 | 100 | |||||||
Variable funding surplus note, repaid June 2013 | — | 297 | |||||||
Other | 7 | 41 | |||||||
Total long-term debt | $ | 707 | $ | 1,038 | |||||
Federal_Income_Taxes_Tables
Federal Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Summary of federal income tax (benefit) expense attributable to (loss) income before income attributable to noncontrolling interests | ' | ||||||||||||||||||||||||
The following table summarizes the federal income tax expense (benefit) attributable to income (loss) before loss attributable to noncontrolling interests, for the years ended: | |||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
(in millions) | 2013 | 2012 | 20111 | ||||||||||||||||||||||
Current tax (benefit) expense | $ | (33 | ) | $ | (144 | ) | $ | 55 | |||||||||||||||||
Deferred tax expense (benefit) | 346 | 243 | (482 | ) | |||||||||||||||||||||
Total tax expense (benefit) | $ | 313 | $ | 99 | $ | (427 | ) | ||||||||||||||||||
1 | The balances reflect a change in accounting principle, as described in Note 2. | ||||||||||||||||||||||||
Summary of amount computed by applying the U.S. federal income tax rate to (loss) income | ' | ||||||||||||||||||||||||
The following table summarizes how the total federal income tax expense (benefit) differs from the amount computed by applying the U.S. federal income tax rate to income (loss) before loss attributable to noncontrolling interests, for the years ended: | |||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2013 | 2012 | 20111 | |||||||||||||||||||||||
(in millions) | Amount | % | Amount | % | Amount | % | |||||||||||||||||||
Rate reconciliation: | |||||||||||||||||||||||||
Computed (expected tax expense (benefit)) | $ | 469 | 35 | % | $ | 245 | 35 | % | $ | (297 | ) | 35 | % | ||||||||||||
Dividends received deduction | (112 | ) | (8 | )% | (75 | ) | (11 | )% | (99 | ) | 12 | % | |||||||||||||
Tax credits | (82 | ) | (6 | )% | (85 | ) | (12 | )% | (30 | ) | 3 | % | |||||||||||||
Other, net | 38 | 2 | % | 14 | 2 | % | (1 | ) | — | % | |||||||||||||||
Total | $ | 313 | 23 | % | $ | 99 | 14 | % | $ | (427 | ) | 50 | % | ||||||||||||
1 | The balances reflect a change in accounting principle, as described in Note 2. | ||||||||||||||||||||||||
Net deferred tax liability | ' | ||||||||||||||||||||||||
The following table summarizes the tax effects of temporary differences that gave rise to significant components of the net deferred tax liability included in other liabilities in the consolidated balance sheets, as of the dates indicated: | |||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||||
Future policy benefits and claims | $ | 1,244 | $ | 1,295 | |||||||||||||||||||||
Derivatives, including embedded derivatives | — | 94 | |||||||||||||||||||||||
Tax credit carryforwards | 352 | 288 | |||||||||||||||||||||||
Other | 845 | 478 | |||||||||||||||||||||||
Gross deferred tax assets | $ | 2,441 | $ | 2,155 | |||||||||||||||||||||
Valuation allowance | (17 | ) | (18 | ) | |||||||||||||||||||||
Net deferred tax assets | 2,424 | 2,137 | |||||||||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||||||
Deferred policy acquisition costs | $ | (1,048 | ) | $ | (874 | ) | |||||||||||||||||||
Available-for-sale securities | (821 | ) | (1,338 | ) | |||||||||||||||||||||
Derivatives, including embedded derivatives | (600 | ) | — | ||||||||||||||||||||||
Other | (255 | ) | (239 | ) | |||||||||||||||||||||
Gross deferred tax liabilities | $ | (2,724 | ) | $ | (2,451 | ) | |||||||||||||||||||
Net deferred tax liability | $ | (300 | ) | $ | (314 | ) | |||||||||||||||||||
Uncertain tax positions | ' | ||||||||||||||||||||||||
The following table is a rollforward of the beginning and ending uncertain tax positions, including permanent and temporary differences, but excluding interest and penalties: | |||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
Balance at beginning of period | $ | 36 | $ | 76 | $ | 119 | |||||||||||||||||||
Additions for current year tax positions | 2 | (2 | ) | 9 | |||||||||||||||||||||
Additions for prior years tax positions | — | 25 | — | ||||||||||||||||||||||
Reductions for prior years tax positions | (2 | ) | (63 | ) | (52 | ) | |||||||||||||||||||
Balance at end of period | $ | 36 | $ | 36 | $ | 76 | |||||||||||||||||||
Statutory_Financial_Informatio1
Statutory Financial Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of statutory net income loss and statutory capital and surplus | ' | ||||||||||||
The following table summarizes the statutory net income (loss) and statutory capital and surplus for the Company’s primary life insurance subsidiary for the years ended: | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Statutory net income (loss) | |||||||||||||
NLIC | $ | 262 | $ | 764 | $ | 18 | |||||||
NLAIC | $ | (103 | ) | $ | (54 | ) | $ | (61 | ) | ||||
Statutory capital and surplus | |||||||||||||
NLIC | $ | 3,550 | $ | 3,837 | $ | 3,591 | |||||||
NLAIC | $ | 534 | $ | 311 | $ | 302 |
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of the effects of reinsurance on life, accident and health insurance | ' | ||||||||||||
The following table summarizes the effects of reinsurance on life, accident and health insurance in force and premiums for the years ended: | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Premiums | |||||||||||||
Direct | $ | 1,015 | $ | 890 | $ | 832 | |||||||
Assumed from other companies | — | — | — | ||||||||||
Ceded to other companies | (291 | ) | (255 | ) | (301 | ) | |||||||
Net | $ | 724 | $ | 635 | $ | 531 | |||||||
Life, accident and health insurance in force | |||||||||||||
Direct | $ | 228,095 | $ | 216,002 | $ | 209,732 | |||||||
Assumed from other companies | 6 | 5 | 5 | ||||||||||
Ceded to other companies | (58,310 | ) | (59,895 | ) | (60,499 | ) | |||||||
Net | $ | 169,791 | $ | 156,112 | $ | 149,238 | |||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Summary of the Company's business segment operating results | ' | ||||||||||||||||||||
The following tables summarize the Company’s business segment operating results for the years ended: | |||||||||||||||||||||
(in millions) | Individual | Retirement | Individual | Corporate | Total | ||||||||||||||||
Products and | Plans | Products and | and Other | ||||||||||||||||||
Solutions- | Solutions-Life | ||||||||||||||||||||
Annuity | and NBSG | ||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Policy charges | $ | 1,021 | $ | 101 | $ | 727 | $ | — | $ | 1,849 | |||||||||||
Premiums | 416 | — | 282 | 26 | 724 | ||||||||||||||||
Net investment income | 546 | 743 | 544 | 16 | 1,849 | ||||||||||||||||
Non-operating net realized investment gains, net of other-than-temporary impairment losses1 | — | — | — | 791 | 791 | ||||||||||||||||
Other revenues2 | (109 | ) | — | — | 13 | (96 | ) | ||||||||||||||
Total revenues | $ | 1,874 | $ | 844 | $ | 1,553 | $ | 846 | $ | 5,117 | |||||||||||
Benefits and expenses: | |||||||||||||||||||||
Interest credited to policyholder accounts | $ | 377 | $ | 473 | $ | 213 | $ | 4 | $ | 1,067 | |||||||||||
Benefits and claims | 688 | — | 636 | 30 | 1,354 | ||||||||||||||||
Policyholder dividends | — | — | 61 | (2 | ) | 59 | |||||||||||||||
Amortization of DAC | 185 | (2 | ) | 125 | 66 | 374 | |||||||||||||||
Other expenses, net of deferrals | 303 | 151 | 284 | 184 | 922 | ||||||||||||||||
Total benefits and expenses | $ | 1,553 | $ | 622 | $ | 1,319 | $ | 282 | $ | 3,776 | |||||||||||
Income before federal income taxes and noncontrolling interests | $ | 321 | $ | 222 | $ | 234 | $ | 564 | $ | 1,341 | |||||||||||
Less: non-operating net realized investment gains, net of other-than-temporary impairment losses1 | — | — | — | (791 | ) | ||||||||||||||||
Less: adjustment to amortization of DAC and other related to net realized investment gains and losses | — | — | — | 70 | |||||||||||||||||
Less: net loss attributable to noncontrolling interest | — | — | — | 82 | |||||||||||||||||
Pre-tax operating earnings (loss) | $ | 321 | $ | 222 | $ | 234 | $ | (75 | ) | ||||||||||||
Assets as of year end | $ | 68,805 | $ | 29,904 | $ | 27,183 | $ | 7,553 | $ | 133,445 | |||||||||||
1 | Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts). | ||||||||||||||||||||
2 | Includes operating items discussed above. | ||||||||||||||||||||
(in millions) | Individual | Retirement | Individual | Corporate | Total | ||||||||||||||||
Products and | Plans | Products and | and Other | ||||||||||||||||||
Solutions- | Solutions-Life | ||||||||||||||||||||
Annuity | and NBSG | ||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Policy charges | $ | 899 | $ | 94 | $ | 677 | $ | — | $ | 1,670 | |||||||||||
Premiums | 334 | — | 274 | 27 | 635 | ||||||||||||||||
Net investment income | 551 | 736 | 534 | 4 | 1,825 | ||||||||||||||||
Non-operating net realized investment gains, net of other-than-temporary impairment losses1 | — | — | — | 428 | 428 | ||||||||||||||||
Other revenues2 | (124 | ) | — | — | 22 | (102 | ) | ||||||||||||||
Total revenues | $ | 1,660 | $ | 830 | $ | 1,485 | $ | 481 | $ | 4,456 | |||||||||||
Benefits and expenses: | |||||||||||||||||||||
Interest credited to policyholder accounts | $ | 375 | $ | 457 | $ | 199 | $ | 7 | $ | 1,038 | |||||||||||
Benefits and claims | 595 | — | 589 | 43 | 1,227 | ||||||||||||||||
Policyholder dividends | — | — | 57 | (3 | ) | 54 | |||||||||||||||
Amortization of DAC | 185 | 14 | 150 | 226 | 575 | ||||||||||||||||
Other expenses, net of deferrals | 285 | 163 | 250 | 165 | 863 | ||||||||||||||||
Total benefits and expenses | $ | 1,440 | $ | 634 | $ | 1,245 | $ | 438 | $ | 3,757 | |||||||||||
Income before federal income taxes and noncontrolling interests | $ | 220 | $ | 196 | $ | 240 | $ | 43 | $ | 699 | |||||||||||
Less: non-operating net realized investment gains, net of other-than-temporary impairment losses1 | — | — | — | (428 | ) | ||||||||||||||||
Less: adjustment to amortization of DAC and other related to net realized investment gains and losses | — | — | — | 243 | |||||||||||||||||
Less: net loss attributable to noncontrolling interest | — | — | — | 61 | |||||||||||||||||
Pre-tax operating earnings (loss) | $ | 220 | $ | 196 | $ | 240 | $ | (81 | ) | ||||||||||||
Assets as of year end | $ | 58,707 | $ | 27,842 | $ | 25,301 | $ | 8,320 | $ | 120,170 | |||||||||||
1 | Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts). | ||||||||||||||||||||
2 | Includes operating items discussed above. | ||||||||||||||||||||
(in millions) | Individual | Retirement | Individual | Corporate | Total | ||||||||||||||||
Products and | Plans | Products and | and Other | ||||||||||||||||||
Solutions- | Solutions-Life | ||||||||||||||||||||
Annuity | and NBSG | ||||||||||||||||||||
December 31, 20113 | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Policy charges | $ | 781 | $ | 96 | $ | 629 | $ | — | $ | 1,506 | |||||||||||
Premiums | 234 | — | 272 | 25 | 531 | ||||||||||||||||
Net investment income | 527 | 715 | 531 | 71 | 1,844 | ||||||||||||||||
Non-operating net realized investment losses, net of other-than-temporary impairment losses1 | — | — | — | (1,613 | ) | (1,613 | ) | ||||||||||||||
Other revenues2 | (59 | ) | — | — | (1 | ) | (60 | ) | |||||||||||||
Total revenues | $ | 1,483 | $ | 811 | $ | 1,432 | $ | (1,518 | ) | $ | 2,208 | ||||||||||
Benefits and expenses: | |||||||||||||||||||||
Interest credited to policyholder accounts | $ | 374 | $ | 441 | $ | 198 | $ | 20 | $ | 1,033 | |||||||||||
Benefits and claims | 476 | — | 577 | 9 | 1,062 | ||||||||||||||||
Policyholder dividends | — | — | 67 | — | 67 | ||||||||||||||||
Amortization of DAC | 80 | 11 | 75 | (101 | ) | 65 | |||||||||||||||
Other expenses, net of deferrals | 269 | 166 | 235 | 160 | 830 | ||||||||||||||||
Total benefits and expenses | $ | 1,199 | $ | 618 | $ | 1,152 | $ | 88 | $ | 3,057 | |||||||||||
Income (loss) before federal income taxes and noncontrolling interests | $ | 284 | $ | 193 | $ | 280 | $ | (1,606 | ) | $ | (849 | ) | |||||||||
Less: non-operating net realized investment losses, net of other-than-temporary impairment losses1 | — | — | — | 1,613 | |||||||||||||||||
Less: adjustment to amortization of DAC and other related to net realized investment gains and losses | — | — | — | (115 | ) | ||||||||||||||||
Less: net loss attributable to noncontrolling interest | — | — | — | 56 | |||||||||||||||||
Pre-tax operating earnings (loss) | $ | 284 | $ | 193 | $ | 280 | $ | (52 | ) | ||||||||||||
Assets as of year end | $ | 57,741 | $ | 25,114 | $ | 22,503 | $ | 6,628 | $ | 111,986 | |||||||||||
1 | Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts). | ||||||||||||||||||||
2 | Includes operating items discussed above. | ||||||||||||||||||||
3 | The balances reflect a change in accounting principle, as described in Note 2. |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Premium method using interest rates | 6.60% | ' | ' |
Expenses discounted using weighted average interest rates | 5.30% | ' | ' |
Reversion period | '3 years | ' | ' |
Percentage of assumption for net separate account investment performance | 7.00% | ' | ' |
Fixed maturity securities priced using independent pricing services | 86.00% | 86.00% | ' |
Fixed maturity securities priced using external source data | 99.00% | 99.00% | ' |
Loans delinquent period | '90 days | ' | ' |
Valuation allowance for policy loan | $0 | ' | ' |
Government agency discount notes maturity period | '12 months | ' | ' |
Agreements require a minimum of fair value | 102.00% | ' | ' |
Cash and cash equivalents liquid investments maturities period | 'Less than three months | ' | ' |
Company's life insurance | 4.00% | 5.00% | 5.00% |
Life insurance policies | 38.00% | 40.00% | 42.00% |
Annual impairment test | $0 | $0 | $0 |
Impact_of_Change_in_Accounting
Impact of Change in Accounting Principle in Consolidated Statement of Operations (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Impact of the retrospective change in accounting principle on the consolidated statements of operations | ' | ' | ' | |
Amortization of deferred policy acquisition costs | $374 | $575 | $65 | |
Federal income tax expense (benefit) | 313 | 99 | -427 | [1] |
Net Income (loss) attributable to Nationwide Life Insurance Company | 1,110 | 661 | -366 | |
Originally Reported [Member] | ' | ' | ' | |
Impact of the retrospective change in accounting principle on the consolidated statements of operations | ' | ' | ' | |
Amortization of deferred policy acquisition costs | ' | ' | 76 | |
Other expenses, net of deferrals | ' | ' | 620 | [2] |
Federal income tax expense (benefit) | ' | ' | -382 | |
Net Income (loss) attributable to Nationwide Life Insurance Company | ' | ' | -282 | |
Adjusted [Member] | ' | ' | ' | |
Impact of the retrospective change in accounting principle on the consolidated statements of operations | ' | ' | ' | |
Amortization of deferred policy acquisition costs | ' | ' | 65 | |
Other expenses, net of deferrals | ' | ' | 760 | [2] |
Federal income tax expense (benefit) | ' | ' | -427 | |
Net Income (loss) attributable to Nationwide Life Insurance Company | ' | ' | -366 | |
Effect of Change [Member] | ' | ' | ' | |
Impact of the retrospective change in accounting principle on the consolidated statements of operations | ' | ' | ' | |
Amortization of deferred policy acquisition costs, effect of change | ' | ' | 11 | |
Other expenses, net of deferrals, effect of change | ' | ' | -140 | [2] |
Federal income tax (benefit) expense, effect of change | ' | ' | 45 | |
Net loss attributable to Nationwide Life Insurance Company, effect of change | ' | ' | ($84) | |
[1] | The balances reflect a change in accounting principle, as described in Note 2. | |||
[2] | Excludes interest expense, which is included in other expenses, net of deferrals on the consolidated statements of operations. |
Certain_Long_Duration_Contract
Certain Long Duration Contracts - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Security | ||
Certain Long Duration Contracts Textual [Abstract] | ' | ' |
Number of primary quarantee types | 5 | ' |
Guaranteed return of deposits period one | '5 years | ' |
Guaranteed return of deposits period two | '7 years | ' |
Guaranteed return of deposits period three | '10 years | ' |
Transfer of assets from general account to separate account | $0 | $0 |
Reserve balances on guarantees | 325 | 216 |
GMDB [Member] | ' | ' |
Certain Long Duration Contracts Textual [Abstract] | ' | ' |
Paid claims for variable annuity contracts with guarantees | 22 | 30 |
Reserve balances on guarantees | $55 | $65 |
Summary_of_Annuity_Contracts_w
Summary of Annuity Contracts with Guarantees Invested in General and Separate Accounts (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
GMDB [Member] | ' | ' | ||
Summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts | ' | ' | ||
Net general account value | $2,947 | $2,884 | ||
Net separate account value | 53,447 | 44,750 | ||
Net amount at risk | 250 | [1] | 585 | [1] |
Average age | '67 years | [2] | '66 years | [2] |
GMDB [Member] | Return of net deposits [Member] | ' | ' | ||
Summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts | ' | ' | ||
Net general account value | 916 | 836 | ||
Net separate account value | 19,927 | 14,963 | ||
Net amount at risk | 13 | [1] | 24 | [1] |
Average age | '64 years | [2] | '64 years | [2] |
GMDB [Member] | Minimum return or anniversary contract value [Member] | ' | ' | ||
Summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts | ' | ' | ||
Net general account value | 2,031 | 2,048 | ||
Net separate account value | 33,520 | 29,787 | ||
Net amount at risk | 237 | [1] | 561 | [1] |
Average age | '69 years | [2] | '68 years | [2] |
GMAB [Member] | ' | ' | ||
Summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts | ' | ' | ||
Net general account value | 92 | [3] | 165 | [3] |
Net separate account value | 2,383 | [3] | 3,230 | [3] |
Net amount at risk | ' | 12 | [1],[3] | |
Average age | '64 years | [2],[3] | '64 years | [2],[3] |
GLWB [Member] | ' | ' | ||
Summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts | ' | ' | ||
Net general account value | 178 | 128 | ||
Net separate account value | 28,071 | 22,031 | ||
Net amount at risk | 74 | [1] | 613 | [1] |
Average age | '64 years | [2] | '65 years | [2] |
GMIB [Member] | ' | ' | ||
Summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts | ' | ' | ||
Net general account value | 49 | 49 | ||
Net separate account value | 510 | 514 | ||
Net amount at risk | ' | $1 | [1] | |
Average age | '64 years | [2] | '65 years | [2] |
[1] | Net amount at risk is calculated on a policy-level basis and equals the respective guaranteed benefit less the account value (or zero if the account value exceeds the guaranteed benefit). | |||
[2] | Represents the weighted average attained age of contractholders. | |||
[3] | Contracts with the hybrid accumulation/withdrawal benefits are included with the accumulation benefits contracts. |
Summary_of_Reserve_Balances_fo
Summary of Reserve Balances for Variable Annuity Contracts With Guarantees (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Summarizes the reserve balances, for variable annuity contracts with guarantees | ' | ' | ||
Reserve balances on guarantees | $325 | $216 | ||
GMDB [Member] | ' | ' | ||
Summarizes the reserve balances, for variable annuity contracts with guarantees | ' | ' | ||
Reserve balances on guarantees | 55 | 65 | ||
GMAB [Member] | ' | ' | ||
Summarizes the reserve balances, for variable annuity contracts with guarantees | ' | ' | ||
Reserve balances on guarantees | -19 | [1],[2] | 57 | [1],[2] |
GLWB [Member] | ' | ' | ||
Summarizes the reserve balances, for variable annuity contracts with guarantees | ' | ' | ||
Reserve balances on guarantees | -1,075 | [1] | 600 | [1] |
GMIB [Member] | ' | ' | ||
Summarizes the reserve balances, for variable annuity contracts with guarantees | ' | ' | ||
Reserve balances on guarantees | $2 | $2 | ||
[1] | The fair value of the living benefit liability includes the present value of attributed fees. | |||
[2] | Contracts with the hybrid accumulation/withdrawal benefits are included with the accumulation benefits contracts. |
Summary_of_Account_Balances_of
Summary of Account Balances of Deferred Variable Annuity Contracts With Guarantees Invested in Separate Accounts (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Summarizes account balances of deferred variable annuity | ' | ' | ||
Deferred variable annuity | $53,447 | [1] | $44,750 | [1] |
Bonds [Member] | ' | ' | ||
Summarizes account balances of deferred variable annuity | ' | ' | ||
Deferred variable annuity | 5,685 | 5,634 | ||
Domestic equity [Member] | ' | ' | ||
Summarizes account balances of deferred variable annuity | ' | ' | ||
Deferred variable annuity | 43,505 | 35,277 | ||
International Equity [Member] | ' | ' | ||
Summarizes account balances of deferred variable annuity | ' | ' | ||
Deferred variable annuity | 3,179 | 2,614 | ||
Total mutual funds [Member] | ' | ' | ||
Summarizes account balances of deferred variable annuity | ' | ' | ||
Deferred variable annuity | 52,369 | 43,525 | ||
Money market funds [Member] | ' | ' | ||
Summarizes account balances of deferred variable annuity | ' | ' | ||
Deferred variable annuity | $1,078 | $1,225 | ||
[1] | Excludes $30.6 billion and $26.7 billion as of December 31, 2013 and 2012, respectively, of separate account assets not related to deferred variable annuity contracts with guarantees and are primarily attributable to retirement plan, variable universal life and COLI products. |
Summary_of_Account_Balances_of1
Summary of Account Balances of Deferred Variable Annuity Contracts With Guarantees Invested in Separate Accounts (Parenthetical) (Detail) (Separate Account Value [Member], USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Billions, unless otherwise specified | ||
Separate Account Value [Member] | ' | ' |
Summarizes account balances of deferred variable annuity | ' | ' |
Deferred variable annuity | $30.60 | $26.70 |
Summary_of_Universal_and_Unive
Summary of Universal and Universal Variable Life Insurance Contracts With No Larger Guarantees Invested in general and Separate Accounts (Detail) (Universal Life [Member], USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Universal Life [Member] | ' | ' | ||
Summarizes information regarding universal and variable universal life insurance contracts with no lapse guarantees invested in general and separate accounts | ' | ' | ||
General account value | $1,270 | $992 | ||
Separate account value | 362 | 328 | ||
Adjusted insurance in force | $16,960 | [1] | $12,321 | [1] |
Average age | '55 years | [2] | '56 years | [2] |
[1] | The adjusted insurance in force is calculated on a policy-level basis and equals the respective guaranteed death benefit less the account value (or zero if the account value exceeds the guaranteed benefit). | |||
[2] | Represents the weighted average attained age of contractholders. |
Summary_of_Changes_in_DAC_Bala
Summary of Changes in DAC Balance (Detail) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Deferred Policy Acquisition Costs | ' | ' | ' | ||
Balance at beginning of year | $3,249 | $3,487 | [1] | $3,125 | [1] |
Capitalization of DAC | 604 | 470 | 604 | [1] | |
Amortization of DAC, excluding unlocks | -373 | -525 | -200 | [1] | |
Amortization of DAC related to unlocks | -1 | -50 | 135 | [1] | |
Adjustments to DAC related to unrealized gains and losses on available-for-sale securities | 299 | -133 | -177 | [1] | |
Balance at end of year | $3,778 | $3,249 | $3,487 | [1] | |
[1] | The balances reflect a change in accounting principle, as described in Note 2. |
Deferred_Policy_Acquisition_Co2
Deferred Policy Acquisition Costs and Value of Business Acquired - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | ' | ' | ' | |
Amortization of DAC related to unlocks | $1 | $50 | ($135) | [1] |
[1] | The balances reflect a change in accounting principle, as described in Note 2. |
Summary_of_Amortized_Cost_Gros
Summary of Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Available For Sale Securities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | $31,008 | $28,937 |
Available-for-sale Securities, Gross unrealized gains | 1,817 | 3,155 |
Available-for-sale Securities, Gross unrealized losses | 552 | 261 |
Available-for-sale Securities, Fair value | 32,273 | 31,831 |
Fixed maturity securities [Member] | ' | ' |
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 31,002 | 28,922 |
Available-for-sale Securities, Gross unrealized gains | 1,799 | 3,150 |
Available-for-sale Securities, Gross unrealized losses | 552 | 261 |
Available-for-sale Securities, Fair value | 32,249 | 31,811 |
Fixed maturity securities [Member] | U.S. Treasury securities and obligations of U.S. Government corporations and agencies [Member] | ' | ' |
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 484 | 476 |
Available-for-sale Securities, Gross unrealized gains | 79 | 121 |
Available-for-sale Securities, Gross unrealized losses | 2 | ' |
Available-for-sale Securities, Fair value | 561 | 597 |
Fixed maturity securities [Member] | Obligations of states, political subdivisions and foreign governments [Member] | ' | ' |
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 1,892 | 1,820 |
Available-for-sale Securities, Gross unrealized gains | 111 | 301 |
Available-for-sale Securities, Gross unrealized losses | 40 | 1 |
Available-for-sale Securities, Fair value | 1,963 | 2,120 |
Fixed maturity securities [Member] | Corporate public securities [Member] | ' | ' |
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 18,004 | 16,152 |
Available-for-sale Securities, Gross unrealized gains | 1,076 | 1,891 |
Available-for-sale Securities, Gross unrealized losses | 295 | 33 |
Available-for-sale Securities, Fair value | 18,785 | 18,010 |
Fixed maturity securities [Member] | Corporate private securities [Member] | ' | ' |
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 4,374 | 4,216 |
Available-for-sale Securities, Gross unrealized gains | 258 | 392 |
Available-for-sale Securities, Gross unrealized losses | 38 | 19 |
Available-for-sale Securities, Fair value | 4,594 | 4,589 |
Fixed maturity securities [Member] | Residential mortgage-backed securities [Member] | ' | ' |
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 3,919 | 4,506 |
Available-for-sale Securities, Gross unrealized gains | 163 | 267 |
Available-for-sale Securities, Gross unrealized losses | 79 | 106 |
Available-for-sale Securities, Fair value | 4,003 | 4,667 |
Fixed maturity securities [Member] | Commercial mortgage-backed securities [Member] | ' | ' |
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 1,439 | 1,219 |
Available-for-sale Securities, Gross unrealized gains | 86 | 133 |
Available-for-sale Securities, Gross unrealized losses | 21 | 15 |
Available-for-sale Securities, Fair value | 1,504 | 1,337 |
Fixed maturity securities [Member] | Other asset-backed securities [Member] | ' | ' |
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 890 | 533 |
Available-for-sale Securities, Gross unrealized gains | 26 | 45 |
Available-for-sale Securities, Gross unrealized losses | 77 | 87 |
Available-for-sale Securities, Fair value | 839 | 491 |
Equity securities [Member] | ' | ' |
Available-for-Sale Securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 6 | 15 |
Available-for-sale Securities, Gross unrealized gains | 18 | 5 |
Available-for-sale Securities, Fair value | $24 | $20 |
Summary_of_Amortized_Cost_and_
Summary of Amortized Cost and Fair Value of Fixed Maturity Securities, By Maturity (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Summarizes the amortized cost and fair value of fixed maturity securities | ' | ' |
Subtotal, Fair value | $32,249 | $31,811 |
Available-for-Sale Securities, Amortized cost | 31,008 | 28,937 |
Available-for-sale Securities, Fair value | 32,273 | 31,831 |
Fixed maturity securities [Member] | ' | ' |
Summarizes the amortized cost and fair value of fixed maturity securities | ' | ' |
Due in one year or less, Amortized cost | 1,081 | ' |
Due in one year or less, Fair Value | 1,097 | ' |
Due after one year through five years, Amortized cost | 8,927 | ' |
Due after one year through five years, Fair value | 9,685 | ' |
Due after five years through ten years, Amortized cost | 7,805 | ' |
Due after five years through ten years, Fair value | 7,667 | ' |
Due after ten years, Amortized cost | 6,941 | ' |
Due after ten years, Fair value | 7,154 | ' |
Subtotal, Amortized cost | 24,754 | ' |
Subtotal, Fair value | 25,903 | ' |
Available-for-Sale Securities, Amortized cost | 31,002 | 28,922 |
Available-for-sale Securities, Fair value | 32,249 | 31,811 |
Fixed maturity securities [Member] | Residential mortgage-backed securities [Member] | ' | ' |
Summarizes the amortized cost and fair value of fixed maturity securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 3,919 | 4,506 |
Available-for-sale Securities, Fair value | 4,003 | 4,667 |
Fixed maturity securities [Member] | Commercial mortgage-backed securities [Member] | ' | ' |
Summarizes the amortized cost and fair value of fixed maturity securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 1,439 | 1,219 |
Available-for-sale Securities, Fair value | 1,504 | 1,337 |
Fixed maturity securities [Member] | Other asset-backed securities [Member] | ' | ' |
Summarizes the amortized cost and fair value of fixed maturity securities | ' | ' |
Available-for-Sale Securities, Amortized cost | 890 | 533 |
Available-for-sale Securities, Fair value | $839 | $491 |
Summary_of_Components_of_Net_U
Summary of Components of Net Unrealized Gains and Losses (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Summarizes components of net unrealized gains and losses on available-for-sale securities | ' | ' | ||
Net unrealized gains on available-for-sale securities, before adjustments, taxes and fair value hedging | $1,265 | $2,894 | ||
Change in fair value attributable to fixed maturity securities designated in fair value hedging relationships | ' | -4 | ||
Net unrealized gains on available-for-sale securities, before adjustments and taxes | 1,265 | [1] | 2,890 | [1] |
Adjustment to DAC and other | -176 | -482 | ||
Adjustment to future policy benefits and claims | -89 | -295 | ||
Adjustment to policyholder dividend obligation | -85 | -177 | ||
Deferred federal income tax expense | -314 | -672 | ||
Net unrealized gains on available-for-sale securities | $601 | $1,264 | ||
[1] | Includes net unrealized losses of $(40) million and $(48) million as of December 31, 2013 and 2012, respectively, related to the non-credit portion of other-than-temporarily impaired securities. |
Summary_of_Components_of_Net_U1
Summary of Components of Net Unrealized Gains and Losses (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ' | ' |
Non-credit portion of other-than-temporary impairments | ($40) | ($48) |
Summary_of_Change_in_Net_Unrea
Summary of Change in Net Unrealized Gains and Losses Reported in Accumulated Other Comprehensive Income (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summarizes the change in net unrealized gains and losses on available-for-sale securities | ' | ' | ' |
Balance at beginning of year | $1,264 | $693 | ' |
Unrealized gains and losses arising during the period: | ' | ' | ' |
Net unrealized (losses) gains on available-for-sale securities before adjustments | -1,657 | 990 | ' |
Non-credit impairments and subsequent changes in fair value of impaired debt securities | 8 | 178 | ' |
Net adjustment to DAC and other | 306 | -135 | ' |
Net adjustment to future policy benefits and claims | 206 | -112 | ' |
Net adjustment to policyholder dividend obligation | 92 | -45 | ' |
Related federal income tax benefit (expense) | 366 | -308 | ' |
Change in unrealized (losses) gains on available-for-sale securities | -679 | 568 | ' |
Reclassification adjustment for net losses realized on available-for-sale securities, net of tax benefit ($8 and $2 as of December 31, 2013 and 2012, respectively) | -16 | -3 | ' |
Change in net unrealized (losses) gains on available-for-sale securities | -663 | 571 | 317 |
Balance at end of year | $601 | $1,264 | $693 |
Summary_of_Change_in_Net_Unrea1
Summary of Change in Net Unrealized Gains and Losses Reported in Accumulated Other Comprehensive Income (Parenthetical) (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Summarizes the change in net unrealized gains and losses on available-for-sale securities | ' | ' |
Reclassification adjustments to net investment losses, tax benefit | $8 | $2 |
Summary_of_Available_for_Sale_
Summary of Available for Sale Securities, By Asset Class, in a Gross Unrealized Loss Position (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Security | ||
Fair value | ' | ' |
Less than or equal to one year, Fair value | $7,959 | ' |
More than one year, Fair value | 1,412 | ' |
Total Fair value | 9,371 | ' |
Gross unrealized losses | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Less than or equal to one year | 363 | 18 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | 189 | 243 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | 552 | 261 |
Number of securities | ' | ' |
Less than or equal to one year number of securities | 574 | ' |
More than one year number of securities | 242 | ' |
Number of securities | 816 | ' |
Fixed maturity securities [Member] | ' | ' |
Fair value | ' | ' |
Less than or equal to one year, Fair value | ' | 1,152 |
More than one year, Fair value | ' | 1,626 |
Total Fair value | ' | 2,778 |
Gross unrealized losses | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Less than or equal to one year | ' | 18 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | ' | 243 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | ' | 261 |
Number of securities | ' | ' |
Less than or equal to one year number of securities | ' | 108 |
More than one year number of securities | ' | 282 |
Number of securities | ' | 390 |
Fixed maturity securities [Member] | Corporate public securities [Member] | ' | ' |
Fair value | ' | ' |
Less than or equal to one year, Fair value | 4,889 | 710 |
More than one year, Fair value | 442 | 150 |
Total Fair value | 5,331 | 860 |
Gross unrealized losses | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Less than or equal to one year | 256 | 11 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | 39 | 22 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | 295 | 33 |
Number of securities | ' | ' |
Less than or equal to one year number of securities | 346 | 68 |
More than one year number of securities | 34 | 10 |
Number of securities | 380 | 78 |
Fixed maturity securities [Member] | Residential mortgage-backed securities [Member] | ' | ' |
Fair value | ' | ' |
Less than or equal to one year, Fair value | 725 | 89 |
More than one year, Fair value | 604 | 1,029 |
Total Fair value | 1,329 | 1,118 |
Gross unrealized losses | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Less than or equal to one year | 16 | 2 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | 63 | 104 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | 79 | 106 |
Number of securities | ' | ' |
Less than or equal to one year number of securities | 70 | 12 |
More than one year number of securities | 148 | 190 |
Number of securities | 218 | 202 |
Fixed maturity securities [Member] | Other asset-backed securities [Member] | ' | ' |
Fair value | ' | ' |
Less than or equal to one year, Fair value | 507 | 27 |
More than one year, Fair value | 144 | 163 |
Total Fair value | 651 | 190 |
Gross unrealized losses | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Less than or equal to one year | 6 | 1 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | 71 | 86 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | 77 | 87 |
Number of securities | ' | ' |
Less than or equal to one year number of securities | 32 | 5 |
More than one year number of securities | 40 | 46 |
Number of securities | 72 | 51 |
Fixed maturity securities [Member] | Other [Member] | ' | ' |
Fair value | ' | ' |
Less than or equal to one year, Fair value | 1,838 | 326 |
More than one year, Fair value | 222 | 284 |
Total Fair value | 2,060 | 610 |
Gross unrealized losses | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Less than or equal to one year | 85 | 4 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | 16 | 31 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | $101 | $35 |
Number of securities | ' | ' |
Less than or equal to one year number of securities | 126 | 23 |
More than one year number of securities | 20 | 36 |
Number of securities | 146 | 59 |
Summary_of_Gross_Unrealized_Lo
Summary of Gross Unrealized Losses Based On Ratio of Fair Value to Amortized Cost (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Summarizes gross unrealized losses based on the ratio of estimated fair value to amortized cost | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Less than or equal to one year | $363 | $18 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | 189 | 243 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | 552 | 261 |
99.9% - 80.0% [Member] | ' | ' |
Summarizes gross unrealized losses based on the ratio of estimated fair value to amortized cost | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Less than or equal to one year | 363 | 18 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | 107 | 85 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | 470 | 103 |
Less than 80.0% [Member] | Residential mortgage-backed securities [Member] | ' | ' |
Summarizes gross unrealized losses based on the ratio of estimated fair value to amortized cost | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | 21 | 50 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | 21 | 50 |
Less than 80.0% [Member] | Other asset-backed securities [Member] | ' | ' |
Summarizes gross unrealized losses based on the ratio of estimated fair value to amortized cost | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | 61 | 72 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | 61 | 72 |
Less than 80.0% [Member] | Other [Member] | ' | ' |
Summarizes gross unrealized losses based on the ratio of estimated fair value to amortized cost | ' | ' |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, More than one year | ' | 36 |
Gross unrealized losses based on the ratio of estimated fair value to amortized cost, Total | ' | $36 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Investments (Textual) [Abstract] | ' | ' | ' |
No mortgage loans past due and still accruing | '90 days | ' | ' |
Available-for-sale securities, carrying value | $32,273,000,000 | $31,831,000,000 | ' |
LIHTC Funds Sold | 1,200,000,000 | 900,000,000 | ' |
Cumulative yields after tax maturity | '2028 | ' | ' |
Effective period of Guarantees | '15 years | '15 years | ' |
Maximum amount payment to investors under guarantees | 796,000,000 | ' | ' |
Net assets of all consolidated VIEs | 680,000,000 | 347,000,000 | ' |
Investments in tax credit funds carrying value | ' | 104,000,000 | 222,000,000 |
Investments in tax credit funds | ' | 29,000,000 | 66,000,000 |
Proceeds from sales of available-for-sale securities | 1,091,000,000 | 796,000,000 | 1,585,000,000 |
Gross realized gains | 31,000,000 | 47,000,000 | 50,000,000 |
Gross realized losses | 50,000,000 | 20,000,000 | 39,000,000 |
Deposits [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Available-for-sale securities, carrying value | 8,000,000 | 9,000,000 | ' |
Available-for-sale securities, collateral value | 849,000,000 | 73,000,000 | ' |
Mortgage loans, net of allowance [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Mortgage Loans | 0 | ' | ' |
Other [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Other long-term investments | 554,000,000 | 348,000,000 | ' |
Other Assets [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Other assets | 182,000,000 | ' | ' |
Other Liabilities [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Other liabilities | $82,000,000 | ' | ' |
Maximum [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Ratio of estimated fair value to amortized cost | 99.90% | ' | ' |
Minimum [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Ratio of estimated fair value to amortized cost | 80.00% | ' | ' |
Summary_Of_Amortized_Cost_Of_M
Summary Of Amortized Cost Of Mortgage Loans (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Specific reserve [Member] | ' | ' |
Summary of the amortized cost of mortgage loans | ' | ' |
Non-specific reserves | $6 | $11 |
Mortgage loans, net of allowance [Member] | ' | ' |
Summary of the amortized cost of mortgage loans | ' | ' |
Total amortized cost | 6,376 | 5,871 |
Total valuation allowance | 35 | 44 |
Mortgage loans, net of allowance | 6,341 | 5,827 |
Mortgage loans, net of allowance [Member] | Non-specific reserves [Member] | ' | ' |
Summary of the amortized cost of mortgage loans | ' | ' |
Amortized cost | 6,350 | 5,820 |
Non-specific reserves | 29 | 33 |
Mortgage loans, net of allowance [Member] | Specific reserve [Member] | ' | ' |
Summary of the amortized cost of mortgage loans | ' | ' |
Amortized cost | 26 | 51 |
Specific reserves | $6 | $11 |
Summary_Of_Activity_In_Valuati
Summary Of Activity In Valuation Allowance For Mortgage Loans (Detail) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Activity in the valuation allowance for mortgage loans | ' | ' | ' | |||
Balance at end of year | $0 | ' | ' | |||
Mortgage loans, net of allowance [Member] | ' | ' | ' | |||
Activity in the valuation allowance for mortgage loans | ' | ' | ' | |||
Balance at beginning of year | 44 | 60 | 96 | |||
Current period provision | -4 | [1] | 2 | [1] | 25 | [1] |
Recoveries | -5 | [2] | -15 | [2] | -7 | [2] |
Charge offs and other | ' | -3 | -54 | |||
Balance at end of year | $35 | $44 | $60 | |||
[1] | Includes specific reserve provisions and all changes in non-specific reserves. | |||||
[2] | Includes recoveries on sales and increases in the valuation of loans with specific reserves. |
Summary_Of_Impaired_Mortgage_L
Summary Of Impaired Mortgage Loans By Class (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Summary of the impaired mortgage loans by class | ' | ' |
Carrying value of impaired mortgage loans, net of allowance | $20 | $40 |
Office [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Carrying value of impaired mortgage loans, net of allowance | ' | 11 |
Industrial Property [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Carrying value of impaired mortgage loans, net of allowance | 20 | 19 |
Retail [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Carrying value of impaired mortgage loans, net of allowance | ' | 10 |
Other [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Carrying value of impaired mortgage loans, net of allowance | ' | ' |
Amortized Cost [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Amortized cost | 26 | 51 |
Amortized Cost [Member] | Office [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Amortized cost | ' | 13 |
Amortized Cost [Member] | Industrial Property [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Amortized cost | 26 | 26 |
Amortized Cost [Member] | Retail [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Amortized cost | ' | 12 |
Amortized Cost [Member] | Other [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Amortized cost | ' | ' |
Specific reserve [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Specific reserves | -6 | -11 |
Specific reserve [Member] | Office [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Specific reserves | ' | -2 |
Specific reserve [Member] | Industrial Property [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Specific reserves | -6 | -7 |
Specific reserve [Member] | Retail [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Specific reserves | ' | -2 |
Specific reserve [Member] | Other [Member] | ' | ' |
Summary of the impaired mortgage loans by class | ' | ' |
Specific reserves | ' | ' |
Summary_Of_Average_Recorded_In
Summary Of Average Recorded Investment And Interest Income (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of average recorded investment and interest income recognized for impaired mortgage loan | ' | ' |
Average recorded investment | $30 | $74 |
Interest income recognized | 3 | 10 |
Office [Member] | ' | ' |
Summary of average recorded investment and interest income recognized for impaired mortgage loan | ' | ' |
Average recorded investment | 5 | 9 |
Interest income recognized | 1 | 1 |
Warehouse [Member] | ' | ' |
Summary of average recorded investment and interest income recognized for impaired mortgage loan | ' | ' |
Average recorded investment | 20 | 20 |
Interest income recognized | 1 | 2 |
Retail [Member] | ' | ' |
Summary of average recorded investment and interest income recognized for impaired mortgage loan | ' | ' |
Average recorded investment | 5 | 11 |
Interest income recognized | 1 | 1 |
Other [Member] | ' | ' |
Summary of average recorded investment and interest income recognized for impaired mortgage loan | ' | ' |
Average recorded investment | ' | 34 |
Interest income recognized | ' | $6 |
Summary_of_LTV_Ratio_and_DSC_R
Summary of LTV Ratio and DSC Ratios of Mortgage Loan (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | $6,376 | $5,871 |
Weighted-average DSC ratio | 1.74 | 1.65 |
Weighted-average LTV ratio | 0.61 | 0.68 |
Apartment [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 1,870 | 1,310 |
Warehouse [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 1,089 | 1,160 |
Office [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 905 | 873 |
Retail [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 2,298 | 2,276 |
Other [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 214 | 252 |
Less than 80% [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 6,025 | 4,946 |
Weighted-average DSC ratio | 1.77 | 1.74 |
Less than 80% [Member] | Apartment [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 1,788 | 1,119 |
Less than 80% [Member] | Warehouse [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 951 | 922 |
Less than 80% [Member] | Office [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 837 | 776 |
Less than 80% [Member] | Retail [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 2,236 | 1,940 |
Less than 80% [Member] | Other [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 213 | 189 |
80% - less than 90% [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 175 | 567 |
Weighted-average DSC ratio | 1.22 | 1.27 |
80% - less than 90% [Member] | Apartment [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 52 | 129 |
80% - less than 90% [Member] | Warehouse [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 52 | 76 |
80% - less than 90% [Member] | Office [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 30 | 55 |
80% - less than 90% [Member] | Retail [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 41 | 250 |
80% - less than 90% [Member] | Other [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | ' | 57 |
90% or greater [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 176 | 358 |
Weighted-average DSC ratio | 1 | 1.07 |
90% or greater [Member] | Apartment [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 30 | 62 |
90% or greater [Member] | Warehouse [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 86 | 162 |
90% or greater [Member] | Office [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 38 | 42 |
90% or greater [Member] | Retail [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 21 | 86 |
90% or greater [Member] | Other [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 1 | 6 |
Greater than 1.10 [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 5,978 | 5,428 |
Weighted-average LTV ratio | 0.6 | 0.66 |
Greater than 1.10 [Member] | Apartment [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 1,857 | 1,303 |
Greater than 1.10 [Member] | Warehouse [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 893 | 951 |
Greater than 1.10 [Member] | Office [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 800 | 783 |
Greater than 1.10 [Member] | Retail [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 2,214 | 2,139 |
Greater than 1.10 [Member] | Other [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 214 | 252 |
1.00-1.10 [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 232 | 234 |
Weighted-average LTV ratio | 0.61 | 0.76 |
1.00-1.10 [Member] | Apartment [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 6 | 5 |
1.00-1.10 [Member] | Warehouse [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 122 | 121 |
1.00-1.10 [Member] | Office [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 43 | 16 |
1.00-1.10 [Member] | Retail [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 61 | 92 |
Less than 1.00 [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 166 | 209 |
Weighted-average LTV ratio | 0.91 | 0.96 |
Less than 1.00 [Member] | Apartment [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 7 | 2 |
Less than 1.00 [Member] | Warehouse [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 74 | 88 |
Less than 1.00 [Member] | Office [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | 62 | 74 |
Less than 1.00 [Member] | Retail [Member] | ' | ' |
Summary of loan-to-value ratio and debt service coverage ratios of the commercial mortgage loan portfolio | ' | ' |
Total | $23 | $45 |
Summary_of_Net_Investment_Inco
Summary of Net Investment Income by Investment Type (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of net investment income by investment type | ' | ' | ' |
Gross investment income | $1,908 | $1,880 | $1,894 |
Investment expenses | 59 | 55 | 50 |
Net investment income | 1,849 | 1,825 | 1,844 |
Fixed maturity securities [Member] | ' | ' | ' |
Summary of net investment income by investment type | ' | ' | ' |
Gross investment income | 1,565 | 1,506 | 1,502 |
Mortgage loans, net of allowance [Member] | ' | ' | ' |
Summary of net investment income by investment type | ' | ' | ' |
Gross investment income | 348 | 366 | 370 |
Policy loans [Member] | ' | ' | ' |
Summary of net investment income by investment type | ' | ' | ' |
Gross investment income | 52 | 53 | 56 |
Other [Member] | ' | ' | ' |
Summary of net investment income by investment type | ' | ' | ' |
Gross investment income | ($57) | ($45) | ($34) |
Summary_of_Net_Realized_Invest
Summary of Net Realized Investment Gains And Losses (Detail) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Net Realized Investment Gains and Losses | ' | ' | ' | |||
Net derivative gains (losses) | $705 | $314 | ($1,636) | |||
Realized gains on sales | 32 | 48 | 64 | |||
Realized losses on sales | -54 | -23 | -45 | |||
Other | ' | 12 | -19 | |||
Net realized investment gains (losses) before other-than- temporary impairments on fixed maturity securities | 683 | 351 | -1,636 | |||
Other-than-temporary impairments on fixed maturity securities | -5 | [1] | -32 | [1] | -40 | [1] |
Net realized investment gains (losses), net of other- than-temporary impairments | $678 | $319 | ($1,676) | |||
[1] | Other-than-temporary impairments on fixed maturity securities are net $6 million, $36 million and $95 million of non-credit losses included in other comprehensive income for the years ended December 31, 2013, 2012 and 2011, respectively. |
Summary_of_Net_Realized_Invest1
Summary of Net Realized Investment Gains And Losses (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net Realized Investment Gains and Losses | ' | ' | ' |
Non-credit losses included in other comprehensive income | $6 | $36 | $95 |
Summary_of_Cumulative_Credit_L
Summary of Cumulative Credit Losses (Detail) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Other-Than-Temporary Impairment Losses on Debt Securities | ' | ' | ' | |||
Cumulative credit losses at beginning of year | ($289) | [1] | ($328) | [1] | ($340) | [1] |
New credit losses | -3 | -18 | -8 | |||
Incremental credit losses | -3 | -10 | -29 | |||
Losses related to securities included in the beginning balance sold or paid down during the period | 23 | 67 | 49 | |||
Cumulative credit losses at end of year | ($272) | [1] | ($289) | [1] | ($328) | [1] |
[1] | Cumulative credit losses are defined as amounts related to the Company's credit portion of the other-than-temporary impairment losses on debt securities that the Company does not intend to sell and that it is not more likely than not the Company will be required to sell prior to recovery of the amortized cost basis. |
Summary_of_Fair_Value_and_Rela
Summary of Fair Value and Related Notional Amounts of Derivative Instruments (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Summary of fair value of derivative instruments | ' | ' | ||
Derivative asset, Fair value | $2,137 | [1] | $2,790 | [1] |
Derivative asset, Notional amount | 33,819 | [1] | 30,263 | [1] |
Derivative liability, Fair value | 2,183 | [1] | 2,123 | [1] |
Derivative liability, Notional amount | 31,245 | [1] | 25,506 | [1] |
Designated as Hedging Instrument [Member] | ' | ' | ||
Summary of fair value of derivative instruments | ' | ' | ||
Derivative asset, Fair value | 1 | 4 | ||
Derivative asset, Notional amount | 6 | 79 | ||
Derivative liability, Fair value | 26 | 21 | ||
Derivative liability, Notional amount | 345 | 192 | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Contracts [Member] | ' | ' | ||
Summary of fair value of derivative instruments | ' | ' | ||
Derivative asset, Fair value | 1,787 | 1,960 | ||
Derivative asset, Notional amount | 26,156 | 21,216 | ||
Derivative liability, Fair value | 2,100 | 2,065 | ||
Derivative liability, Notional amount | 29,715 | 23,746 | ||
Not Designated as Hedging Instrument [Member] | Equity Contracts [Member] | ' | ' | ||
Summary of fair value of derivative instruments | ' | ' | ||
Derivative asset, Fair value | 343 | 822 | ||
Derivative asset, Notional amount | 6,556 | 7,445 | ||
Derivative liability, Fair value | ' | ' | ||
Derivative liability, Notional amount | ' | ' | ||
Not Designated as Hedging Instrument [Member] | Total Return Swap [Member] | ' | ' | ||
Summary of fair value of derivative instruments | ' | ' | ||
Derivative asset, Fair value | 6 | 4 | ||
Derivative asset, Notional amount | 1,101 | 1,513 | ||
Derivative liability, Fair value | 52 | 32 | ||
Derivative liability, Notional amount | 1,183 | 1,551 | ||
Not Designated as Hedging Instrument [Member] | Other Derivative Contracts [Member] | ' | ' | ||
Summary of fair value of derivative instruments | ' | ' | ||
Derivative asset, Notional amount | ' | 10 | ||
Derivative liability, Fair value | 5 | 5 | ||
Derivative liability, Notional amount | $2 | $17 | ||
[1] | Derivative assets and liabilities are included in other assets and other liabilities, respectively, in the consolidated balance sheets. As of December 31, 2013 and 2012, derivative assets exclude $196 million and $170 million, respectively, of accrued interest receivable, and derivative liabilities exclude $227 million and $179 million, respectively, of accrued interest payable. |
Summary_of_Fair_Value_and_Rela1
Summary of Fair Value and Related Notional Amounts of Derivative Instruments (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Summary of fair value of derivative instruments | ' | ' |
Interest receivable | $196 | $170 |
Interest payable | $227 | $179 |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative Instruments (Textual) [Abstract] | ' | ' |
Net uncollateralized derivative asset and liability | 'Immaterial | 'Immaterial |
Fair value of Derivative subject to offsetting by collateral agreement | $1,700 | $2,000 |
Cash collateral from derivative counterparties | 382 | 798 |
Off balance sheet Collateral | 29 | ' |
Posted cash collateral | 435 | 228 |
Pledged securities of fair value | $173 | $148 |
Summary_of_Gains_and_Losses_fo
Summary of Gains and Losses for Derivative Instruments Recognized in Net Realized Investment Gains and Losses in Statements of Operations (Detail) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Summary of realized gains and losses for derivative instruments | ' | ' | ' | |||
Total derivative losses | ($1,302) | [1] | ($1,082) | [1] | ($82) | [1] |
Change in embedded derivatives on guaranteed benefit annuity programs | 1,751 | [2] | 1,185 | [2] | -1,674 | [2] |
Other revenue on guaranteed benefit annuity programs | 256 | 211 | 120 | |||
Change in embedded derivative liabilities and related fees | 2,007 | 1,396 | -1,554 | |||
Net realized derivative gains (losses) | 705 | 314 | -1,636 | |||
Designated as Hedging Instrument [Member] | ' | ' | ' | |||
Summary of realized gains and losses for derivative instruments | ' | ' | ' | |||
Total derivative losses | -1 | -1 | -4 | |||
Not Designated as Hedging Instrument [Member] | Interest Rate Contracts [Member] | ' | ' | ' | |||
Summary of realized gains and losses for derivative instruments | ' | ' | ' | |||
Total derivative losses | -209 | -125 | -44 | |||
Not Designated as Hedging Instrument [Member] | Equity Contracts [Member] | ' | ' | ' | |||
Summary of realized gains and losses for derivative instruments | ' | ' | ' | |||
Total derivative losses | -776 | -665 | -45 | |||
Not Designated as Hedging Instrument [Member] | Total Return Swap [Member] | ' | ' | ' | |||
Summary of realized gains and losses for derivative instruments | ' | ' | ' | |||
Total derivative losses | -321 | -343 | -17 | |||
Not Designated as Hedging Instrument [Member] | Other Derivative Contracts [Member] | ' | ' | ' | |||
Summary of realized gains and losses for derivative instruments | ' | ' | ' | |||
Total derivative losses | -9 | -1 | -6 | |||
Not Designated as Hedging Instrument [Member] | Net Interest Settlements [Member] | ' | ' | ' | |||
Summary of realized gains and losses for derivative instruments | ' | ' | ' | |||
Total derivative losses | ($14) | ($53) | ($34) | |||
[1] | Included in total derivative losses are economic hedging losses of $1.8 billion, $827 million and gains of $1.0 billion related to the guaranteed benefit annuity programs for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
[2] | As part of the Company's annual comprehensive review of DAC model assumptions, all relevant assumptions impacting the fair value of embedded derivatives on annuity programs are also reviewed and updated. For the individual variable annuity business, the change in the embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2013 includes model enhancements and updated assumptions for discounting, benefit utilization, mortality and lapse rates. The change in embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2012 included updated assumptions for lapse rates, mortality, withdrawal behavior and benefit utilization. |
Summary_of_Gains_and_Losses_fo1
Summary of Gains and Losses for Derivative Instruments Recognized in Net Realized Investment Gains and Losses in Statements of Operations (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Summary of realized gains and losses for derivative instruments | ' | ' | ' |
Hedging gains/losses | $1,800 | $827 | $1,000 |
Summary_of_Assets_and_Liabilit
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Assets | ' | ' | ||
Separate account assets | $53,447 | [1] | $44,750 | [1] |
Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 32,715 | 32,919 | ||
Derivative assets | 2,137 | 2,790 | ||
Separate account assets | 84,069 | 71,440 | ||
Assets at fair value | 118,921 | 107,149 | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 1,010 | -748 | ||
Derivative liabilities | -2,183 | -2,123 | ||
Liabilities at fair value | -1,173 | -2,871 | ||
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1,476 | 1,195 | ||
Derivative assets | 0 | ' | ||
Separate account assets | 80,647 | 68,185 | ||
Assets at fair value | 82,123 | 69,380 | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 0 | ' | ||
Derivative liabilities | 0 | ' | ||
Liabilities at fair value | 0 | ' | ||
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 30,106 | 30,465 | ||
Derivative assets | 1,794 | 1,968 | ||
Separate account assets | 1,339 | 1,230 | ||
Assets at fair value | 33,239 | 33,663 | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 0 | ' | ||
Derivative liabilities | -2,178 | -2,118 | ||
Liabilities at fair value | -2,178 | -2,118 | ||
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1,133 | 1,259 | ||
Derivative assets | 343 | 822 | ||
Separate account assets | 2,083 | 2,025 | ||
Assets at fair value | 3,559 | 4,106 | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 1,010 | -748 | ||
Derivative liabilities | -5 | -5 | ||
Liabilities at fair value | 1,005 | -753 | ||
Living Benefits [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 1,094 | -657 | ||
Living Benefits [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 0 | ' | ||
Living Benefits [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 0 | ' | ||
Living Benefits [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 1,094 | -657 | ||
Indexed Products [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | -84 | -91 | ||
Indexed Products [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 0 | ' | ||
Indexed Products [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | 0 | ' | ||
Indexed Products [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Liabilities | ' | ' | ||
Total future policy benefits and claims | -84 | -91 | ||
Fixed maturity securities [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 32,249 | 31,811 | ||
Fixed maturity securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1,412 | 1,150 | ||
Fixed maturity securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 29,749 | 29,464 | ||
Fixed maturity securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1,088 | 1,197 | ||
Fixed maturity securities [Member] | U.S. Treasury securities and obligations of U.S. Government corporations and agencies [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 561 | 597 | ||
Fixed maturity securities [Member] | U.S. Treasury securities and obligations of U.S. Government corporations and agencies [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 557 | 592 | ||
Fixed maturity securities [Member] | U.S. Treasury securities and obligations of U.S. Government corporations and agencies [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1 | 2 | ||
Fixed maturity securities [Member] | U.S. Treasury securities and obligations of U.S. Government corporations and agencies [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 3 | 3 | ||
Fixed maturity securities [Member] | Obligations of states, political subdivisions and foreign governments [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1,963 | 2,120 | ||
Fixed maturity securities [Member] | Obligations of states, political subdivisions and foreign governments [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 63 | 73 | ||
Fixed maturity securities [Member] | Obligations of states, political subdivisions and foreign governments [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1,900 | 2,047 | ||
Fixed maturity securities [Member] | Obligations of states, political subdivisions and foreign governments [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 0 | ' | ||
Fixed maturity securities [Member] | Corporate public securities [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 18,785 | 18,010 | ||
Fixed maturity securities [Member] | Corporate public securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1 | 1 | ||
Fixed maturity securities [Member] | Corporate public securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 18,705 | 17,890 | ||
Fixed maturity securities [Member] | Corporate public securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 79 | 119 | ||
Fixed maturity securities [Member] | Corporate private securities [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 4,594 | 4,589 | ||
Fixed maturity securities [Member] | Corporate private securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 0 | ' | ||
Fixed maturity securities [Member] | Corporate private securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 3,791 | 3,817 | ||
Fixed maturity securities [Member] | Corporate private securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 803 | 772 | ||
Fixed maturity securities [Member] | Residential mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 4,003 | 4,667 | ||
Fixed maturity securities [Member] | Residential mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 791 | 484 | ||
Fixed maturity securities [Member] | Residential mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 3,203 | 4,173 | ||
Fixed maturity securities [Member] | Residential mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 9 | 10 | ||
Fixed maturity securities [Member] | Commercial mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1,504 | 1,337 | ||
Fixed maturity securities [Member] | Commercial mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 0 | ' | ||
Fixed maturity securities [Member] | Commercial mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 1,504 | 1,335 | ||
Fixed maturity securities [Member] | Commercial mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 0 | 2 | ||
Fixed maturity securities [Member] | Other asset-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 839 | 491 | ||
Fixed maturity securities [Member] | Other asset-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 0 | ' | ||
Fixed maturity securities [Member] | Other asset-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 645 | 200 | ||
Fixed maturity securities [Member] | Other asset-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 194 | 291 | ||
Other [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 466 | 1,108 | ||
Other [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 64 | 45 | ||
Other [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | 357 | 1,001 | ||
Other [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' | ||
Assets | ' | ' | ||
Investments at fair value | $45 | $62 | ||
[1] | Excludes $30.6 billion and $26.7 billion as of December 31, 2013 and 2012, respectively, of separate account assets not related to deferred variable annuity contracts with guarantees and are primarily attributable to retirement plan, variable universal life and COLI products. |
Rollforward_of_Level_3_Assets_
Rollforward of Level 3 Assets and Liabilities Held at Fair Value on a Recurring Basis (Detail) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Assets, Net gains (losses) In operations | ($396) | [1] | ($260) | [2] | ' | |
Assets, Net gains (losses) In OCI | 7 | 80 | ' | |||
Assets, Purchases | 249 | 457 | ' | |||
Assets, Sales | -415 | -435 | ' | |||
Assets, Transfers in to Level 3 | 142 | 51 | ' | |||
Assets, Transfers out of Level 3 | -134 | -377 | ' | |||
Assets, ending balance | 3,559 | 4,106 | 4,590 | |||
Liability, Net gains (losses) In operations | 1,758 | [1] | 1,158 | [2] | ' | |
Liability, Net gains (losses) In OCI | ' | ' | ' | |||
Liability, Purchases | ' | ' | ' | |||
Liability, Sales | ' | ' | ' | |||
Liability, Transfers into Level 3 | ' | ' | ' | |||
Liability, Transfers out of Level 3 | ' | ' | ' | |||
Liability value, ending balance | 1,005 | -753 | -1,911 | |||
Future policy benefits and claims [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Liability, Net gains (losses) In operations | 1,758 | [1] | 1,157 | [2] | ' | |
Liability, Net gains (losses) In OCI | ' | ' | ' | |||
Liability, Purchases | ' | ' | ' | |||
Liability, Sales | ' | ' | ' | |||
Liability, Transfers into Level 3 | ' | ' | ' | |||
Liability, Transfers out of Level 3 | ' | ' | ' | |||
Liability value, ending balance | 1,010 | -748 | -1,905 | |||
Future policy benefits and claims [Member] | Living Benefits [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Liability, Net gains (losses) In operations | 1,751 | [1] | 1,185 | [2] | ' | |
Liability, Net gains (losses) In OCI | ' | ' | ' | |||
Liability, Purchases | ' | ' | ' | |||
Liability, Sales | ' | ' | ' | |||
Liability, Transfers into Level 3 | ' | ' | ' | |||
Liability, Transfers out of Level 3 | ' | ' | ' | |||
Liability value, ending balance | 1,094 | -657 | -1,842 | |||
Future policy benefits and claims [Member] | Indexed Products [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Liability, Net gains (losses) In operations | 7 | [1] | -28 | [2] | ' | |
Liability, Net gains (losses) In OCI | ' | ' | ' | |||
Liability, Purchases | ' | ' | ' | |||
Liability, Sales | ' | ' | ' | |||
Liability, Transfers into Level 3 | ' | ' | ' | |||
Liability, Transfers out of Level 3 | ' | ' | ' | |||
Liability value, ending balance | -84 | -91 | -63 | |||
Derivative Financial Instruments, Liabilities [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Liability, Net gains (losses) In operations | ' | 1 | [2],[3] | ' | ||
Liability, Net gains (losses) In OCI | ' | ' | [3] | ' | ||
Liability, Purchases | ' | ' | [3] | ' | ||
Liability, Sales | ' | ' | [3] | ' | ||
Liability, Transfers into Level 3 | ' | ' | [3] | ' | ||
Liability, Transfers out of Level 3 | ' | ' | [3] | ' | ||
Liability value, ending balance | -5 | [3] | -5 | [3] | -6 | [3] |
Fixed maturity securities [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Assets, Net gains (losses) In operations | -1 | [1],[4] | 4 | [2],[5] | ' | |
Assets, Net gains (losses) In OCI | 1 | [4] | 77 | [5] | ' | |
Assets, Purchases | 115 | [4] | 107 | [5] | ' | |
Assets, Sales | -232 | [4] | -256 | [5] | ' | |
Assets, Transfers in to Level 3 | 142 | [4] | 51 | [5] | ' | |
Assets, Transfers out of Level 3 | -134 | [4] | -377 | [5] | ' | |
Assets, ending balance | 1,088 | [4] | 1,197 | [4] | 1,591 | [5] |
Fixed maturity securities [Member] | Corporate private securities [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Assets, Net gains (losses) In operations | -1 | [1] | 2 | [2] | ' | |
Assets, Net gains (losses) In OCI | -2 | 13 | ' | |||
Assets, Purchases | 91 | 69 | ' | |||
Assets, Sales | -117 | -187 | ' | |||
Assets, Transfers in to Level 3 | 127 | 40 | ' | |||
Assets, Transfers out of Level 3 | -67 | -374 | ' | |||
Assets, ending balance | 803 | 772 | 1,209 | |||
Fixed maturity securities [Member] | Other asset-backed securities [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Assets, Net gains (losses) In operations | ' | 2 | [2] | ' | ||
Assets, Net gains (losses) In OCI | 10 | 53 | ' | |||
Assets, Purchases | 6 | 36 | ' | |||
Assets, Sales | -62 | -61 | ' | |||
Assets, Transfers in to Level 3 | 15 | 10 | ' | |||
Assets, Transfers out of Level 3 | -66 | ' | ' | |||
Assets, ending balance | 194 | 291 | 251 | |||
Fixed maturity securities [Member] | Other fixed maturity securities [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Assets, Net gains (losses) In operations | ' | ' | [2] | ' | ||
Assets, Net gains (losses) In OCI | -7 | 11 | ' | |||
Assets, Purchases | 18 | 2 | ' | |||
Assets, Sales | -53 | -8 | ' | |||
Assets, Transfers in to Level 3 | ' | 1 | ' | |||
Assets, Transfers out of Level 3 | -1 | -3 | ' | |||
Assets, ending balance | 91 | 134 | 131 | |||
Other [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Assets, Net gains (losses) In operations | -6 | [1] | 16 | [2] | ' | |
Assets, Net gains (losses) In OCI | 6 | 3 | ' | |||
Assets, Purchases | 5 | ' | ' | |||
Assets, Sales | -22 | ' | ' | |||
Assets, Transfers in to Level 3 | ' | ' | ' | |||
Assets, Transfers out of Level 3 | ' | ' | ' | |||
Assets, ending balance | 45 | 62 | 43 | |||
Derivative Assets [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Assets, Net gains (losses) In operations | -447 | [1],[3] | -353 | [2],[3] | ' | |
Assets, Net gains (losses) In OCI | ' | ' | [3] | ' | ||
Assets, Purchases | 129 | [3] | 350 | [3] | ' | |
Assets, Sales | -161 | [3] | -179 | [3] | ' | |
Assets, Transfers in to Level 3 | ' | ' | [3] | ' | ||
Assets, Transfers out of Level 3 | ' | ' | [3] | ' | ||
Assets, ending balance | 343 | [3] | 822 | [3] | 1,004 | [3] |
Separate Account Assets [Member] | ' | ' | ' | |||
Significant unobservable inputs (Level 3) to determine fair value | ' | ' | ' | |||
Assets, Net gains (losses) In operations | 58 | [1] | 73 | [2] | ' | |
Assets, Net gains (losses) In OCI | ' | ' | ' | |||
Assets, Purchases | ' | ' | ' | |||
Assets, Sales | ' | ' | ' | |||
Assets, Transfers in to Level 3 | ' | ' | ' | |||
Assets, Transfers out of Level 3 | ' | ' | ' | |||
Assets, ending balance | $2,083 | $2,025 | $1,952 | |||
[1] | Net gains and losses included in operations are reported in net realized investment gains and losses and interest credited to policyholder accounts. The net unrealized gains on separate account assets are attributable to contractholders and therefore are not included in the Company's earnings. The change in unrealized (losses) gains included in operations on assets and liabilities still held at the end of the year was $(6) million for other investments at fair value, $(297) million for derivative assets and $1.8 billion for future policy benefits and claims. | |||||
[2] | Net gains and losses included in operations are reported in net realized investment gains and losses and interest credited to policyholder accounts. The net unrealized gains on separate account assets are attributable to contractholders and therefore are not included in the Company's earnings. The change in unrealized gains (losses) included in operations on assets and liabilities still held as of the end of the year was $16 million for other investments at fair value, $(257) million for derivative assets, $1.2 billion for future policy benefits and claims and $(1) million for derivative liabilities. | |||||
[3] | Non-binding broker quotes were utilized to determine a fair value of all Level 3 derivative assets and liabilities. | |||||
[4] | Non-binding broker quotes were utilized to determine a fair value of $924 million of total fixed maturity securities as of December 31, 2013. | |||||
[5] | Non-binding broker quotes were utilized to determine a fair value of $1.1 billion of total fixed maturity securities as of December 31, 2012. |
Rollforward_of_Level_3_Assets_1
Rollforward of Level 3 Assets and Liabilities Held at Fair Value on a Recurring Basis (Parenthetical) (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Significant unobservable inputs (Level 3) to determine fair value | ' | ' |
Unrealized gain (loss) on other investments | ($6,000,000) | $16,000,000 |
Unrealized gain (loss) on derivatives | -297,000,000 | -257,000,000 |
Unrealized gain (loss) on future policy benefits and claims | 1,800,000,000 | 1,200,000,000 |
Unrealized Gain Loss On Derivatives Liabilities | ' | -1,000,000 |
Fair value of fixed maturity securities that were determind using non binding broker quotes | 32,273,000,000 | 31,831,000,000 |
Fixed Maturity Securities Held At Fair Value [Member] | ' | ' |
Significant unobservable inputs (Level 3) to determine fair value | ' | ' |
Fair value of fixed maturity securities that were determind using non binding broker quotes | $924,000,000 | ' |
Summary_of_Significant_observa
Summary of Significant observable Inputs Used for Fair Value Measurements for Living Benefits Liabilities Classified as Level 3 (Detail) (Living Benefits [Member]) | 12 Months Ended | |
Dec. 31, 2013 | ||
Minimum [Member] | ' | |
Summary of significant unobservable inputs used for fair value measurements for living benefits liabilities | ' | |
Fair value unobservable inputs Mortality | 0.10% | [1] |
Fair value unobservable inputs Lapse | 0.00% | |
Fair value unobservable inputs wait period | '0 years | [2] |
Fair value unobservable inputs efficiency of benefit utilization | 65.00% | [3] |
Fair value unobservable inputs index Volatility | 15.00% | |
Maximum [Member] | ' | |
Summary of significant unobservable inputs used for fair value measurements for living benefits liabilities | ' | |
Fair value unobservable inputs Mortality | 8.00% | [1] |
Fair value unobservable inputs Lapse | 35.00% | |
Fair value unobservable inputs wait period | '30 years | [2] |
Fair value unobservable inputs efficiency of benefit utilization | 100.00% | [3] |
Fair value unobservable inputs index Volatility | 25.00% | |
[1] | Represents the mortality for the majority of business with living benefits, with policyholders ranging from 45 to 85. | |
[2] | A portion of the contractholders could never use the benefit, which would extend the range to an indeterminate period. | |
[3] | The unobservable input is not applicable to GMABs. |
Summary_of_Significant_observa1
Summary of Significant observable Inputs Used for Fair Value Measurements for Living Benefits Liabilities Classified as Level 3 (Parenthetical) (Detail) (Living Benefits [Member]) | 12 Months Ended |
Dec. 31, 2013 | |
Person | |
Minimum [Member] | ' |
Summary of significant unobservable inputs used for fair value measurements for living benefits liabilities | ' |
Policyholders of mortality for majority of business | 45 |
Maximum [Member] | ' |
Summary of significant unobservable inputs used for fair value measurements for living benefits liabilities | ' |
Policyholders of mortality for majority of business | 85 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Fair Value of Financial Instruments (Textual) [Abstract] | ' | ' |
Enhancing guarantee bonus feature period | ' | '10 years |
High liability value policy withdrawal period | ' | '20 years |
Policy withdrawal period | ' | '1 year |
Investments guarantee period | '7 years | ' |
Separate account expiration year | '2016 | ' |
Target portfolio guaranteed period | '7 years | ' |
Transfers from Level 1 to Level 2 | $0 | $42,000,000 |
Level 3 [Member] | ' | ' |
Fair Value of Financial Instruments (Textual) [Abstract] | ' | ' |
Separate account assets | $1,700,000,000 | $1,600,000,000 |
Summary_of_Significant_Unobser
Summary of Significant Unobservable Inputs Used for Fair Value Measurements For Indexed Universal Life Equity Indexed Products Classified as Level 3 (Detail) (Equity Index Product [Member]) | 12 Months Ended | |
Dec. 31, 2013 | ||
Minimum [Member] | ' | |
Summary Of Significant Unobservable Inputs Used For Fair Value Measurements For Equity Indexed Products [Abstract] | ' | |
Fair value unobservable inputs Mortality | 0.00% | [1] |
Fair value unobservable inputs Lapse | 0.00% | |
Fair value unobservable inputs index Volatility | 15.00% | |
Maximum [Member] | ' | |
Summary Of Significant Unobservable Inputs Used For Fair Value Measurements For Equity Indexed Products [Abstract] | ' | |
Fair value unobservable inputs Mortality | 4.00% | [1] |
Fair value unobservable inputs Lapse | 10.00% | |
Fair value unobservable inputs index Volatility | 25.00% | |
[1] | Represents the mortality for the majority of business, with policyholders ranging from 0 to 75. |
Summary_of_Significant_Unobser1
Summary of Significant Unobservable Inputs Used for Fair Value Measurements For Indexed Universal Life Equity Indexed Products Classified as Level 3 (Parenthetical) (Detail) (Equity Index Product [Member]) | 12 Months Ended |
Dec. 31, 2013 | |
Person | |
Minimum [Member] | ' |
Summary Of Significant Unobservable Inputs Used For Fair Value Measurements For Equity Indexed Products [Abstract] | ' |
Policyholders of mortality for majority of business | 0 |
Maximum [Member] | ' |
Summary Of Significant Unobservable Inputs Used For Fair Value Measurements For Equity Indexed Products [Abstract] | ' |
Policyholders of mortality for majority of business | 75 |
Financial_Instruments_Not_Carr
Financial Instruments Not Carried at Fair Value (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Investments: | ' | ' |
Mortgage loans, net of allowance | $6,341 | $5,827 |
Policy loans | 987 | 980 |
Liabilities | ' | ' |
Short-term debt | 278 | 300 |
Long-term debt | 707 | 1,038 |
Level 2 [Member] | ' | ' |
Liabilities | ' | ' |
Long-term debt | 997 | 1,282 |
Level 3 [Member] | ' | ' |
Liabilities | ' | ' |
Investment contracts | 20,436 | 19,561 |
Short-term debt | 278 | 300 |
Long-term debt | 7 | 41 |
Mortgage loans held-for-investment [Member] | Level 3 [Member] | ' | ' |
Investments: | ' | ' |
Investments | 6,481 | 5,988 |
Policy loans [Member] | Level 3 [Member] | ' | ' |
Investments: | ' | ' |
Investments | 987 | 980 |
Carrying Value [Member] | ' | ' |
Liabilities | ' | ' |
Investment contracts | 21,874 | 20,123 |
Short-term debt | 278 | 300 |
Long-term debt | 707 | 1,038 |
Carrying Value [Member] | Mortgage loans held-for-investment [Member] | ' | ' |
Investments: | ' | ' |
Mortgage loans, net of allowance | 6,341 | 5,827 |
Carrying Value [Member] | Policy loans [Member] | ' | ' |
Investments: | ' | ' |
Policy loans | 987 | 980 |
Fair Value [Member] | ' | ' |
Liabilities | ' | ' |
Investment contracts | 20,436 | 19,561 |
Short-term debt | 278 | 300 |
Long-term debt | 1,004 | 1,323 |
Fair Value [Member] | Mortgage loans held-for-investment [Member] | ' | ' |
Investments: | ' | ' |
Investments | 6,481 | 5,988 |
Fair Value [Member] | Policy loans [Member] | ' | ' |
Investments: | ' | ' |
Investments | $987 | $980 |
Goodwill_Detail
Goodwill (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Summary of changes in the carrying value of goodwill by segment | ' | ' | ||
Goodwill, beginning balance | $200 | [1] | $200 | [1] |
Adjustments | 0 | 0 | ||
Goodwill, ending balance | 200 | [1] | 200 | [1] |
Retirement Plans [Member] | ' | ' | ||
Summary of changes in the carrying value of goodwill by segment | ' | ' | ||
Goodwill, beginning balance | 25 | [1] | 25 | [1] |
Adjustments | 0 | 0 | ||
Goodwill, ending balance | 25 | [1] | 25 | [1] |
Individual Products and Solutions - Life and NBSG [Member] | ' | ' | ||
Summary of changes in the carrying value of goodwill by segment | ' | ' | ||
Goodwill, beginning balance | 175 | [1] | 175 | [1] |
Adjustments | 0 | 0 | ||
Goodwill, ending balance | $175 | [1] | $175 | [1] |
[1] | The goodwill balances have not been previously impaired. |
Goodwill_Parenthetical_Detail
Goodwill (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of changes in the carrying value of goodwill by segment | ' | ' | ' |
Impairment of goodwil | $0 | $0 | $0 |
Summary_of_Financial_Informati
Summary of Financial Information For Closed Block (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Millions, unless otherwise specified | ||||
Liabilities: | ' | ' | ' | ' |
Future policyholder benefits | $1,703 | $1,732 | ' | ' |
Policyholder funds and accumulated dividends | 141 | 142 | ' | ' |
Policyholder dividends payable | 23 | 24 | ' | ' |
Policyholder dividend obligation | 113 | 198 | ' | ' |
Other policy obligations and liabilities | 29 | 32 | ' | ' |
Total liabilities | 2,009 | 2,128 | ' | ' |
Assets: | ' | ' | ' | ' |
Fixed maturity securities, available-for-sale | 1,320 | 1,511 | ' | ' |
Mortgage loans, net of allowance | 257 | 183 | ' | ' |
Policy loans | 157 | 164 | ' | ' |
Other assets | 93 | 77 | ' | ' |
Total assets | 1,827 | 1,935 | ' | ' |
Excess of reported liabilities over assets | 182 | 193 | ' | ' |
Portion of above representing other comprehensive income: | ' | ' | ' | ' |
(Decrease) increase in unrealized gain on fixed maturity securities, available-for-sale | -92 | 45 | ' | ' |
Adjustment to policyholder dividend obligation | 92 | -45 | ' | ' |
Maximum future earnings to be recognized from assets and liabilities | 182 | 193 | 204 | 215 |
Available-for-Sale Securities | ' | ' | ' | ' |
Fair value | 1,320 | 1,511 | ' | ' |
Amortized cost | 1,235 | 1,334 | ' | ' |
Shadow policyholder dividend obligation | -85 | -177 | ' | ' |
Net unrealized appreciation | ' | ' | ' | ' |
Summary_of_Closed_Block_Operat
Summary of Closed Block Operations (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' | ' |
Premiums | $66 | $73 | $77 |
Net investment income | 94 | 98 | 102 |
Realized investment gains (losses) | ' | 1 | -3 |
Realized losses credited to policyholder benefit obligation | -4 | -5 | -1 |
Total revenues | 156 | 167 | 175 |
Benefits and expenses: | ' | ' | ' |
Policy and contract benefits | 123 | 134 | 145 |
Change in future policyholder benefits and interest credited to policyholder accounts | -29 | -27 | -35 |
Policyholder dividends | 44 | 50 | 55 |
Change in policyholder dividend obligation | 3 | -8 | -8 |
Other expenses | -2 | 1 | 1 |
Total benefits and expenses | 139 | 150 | 158 |
Total revenues, net of benefits and expenses, before federal income tax expense | 17 | 17 | 17 |
Federal income tax expense | 6 | 6 | 6 |
Revenues, net of benefits and expenses and federal income tax expense | 11 | 11 | 11 |
Maximum future earnings from assets and liabilities: | ' | ' | ' |
Beginning of period | 193 | 204 | 215 |
Change during period | -11 | -11 | -11 |
End of period | $182 | $193 | $204 |
Closed_Block_Additional_Inform
Closed Block - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Closed Block (Textual) [Abstract] | ' | ' | ' |
Policyholder dividend obligation | $28 | $21 | $23 |
ShortTerm_Debt_Additional_Info
Short-Term Debt - Additional Information (Detail) (USD $) | 12 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-11 | Dec. 31, 2013 | Dec. 31, 2012 | |
Federal Home Loan Bank Borrowings [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Custodial Bank [Member] | Custodial Bank [Member] | ||
Short Term Debt (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Cash equivalent maturity description | 'less than one year | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity of short term debt | $350,000,000 | $250,000,000 | $600,000,000 | $600,000,000 | $600,000,000 | ' | ' |
Eligible collateral for short term borrowings | ' | 4,300,000,000 | ' | ' | ' | ' | ' |
Capital stock purchased | 25,000,000 | ' | ' | ' | ' | ' | ' |
Interest rate basis on outstanding principal balances of the line of credit | ' | ' | ' | ' | ' | 'One-month U.S. LIBOR | 'One-month U.S. LIBOR |
Amounts outstanding under agreement with Federal Home Loan Bank | ' | $0 | ' | ' | ' | ' | ' |
Summary_of_Short_Term_Debt_and
Summary of Short Term Debt and Weighted Average Annual Interest Rates (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Summary of short-term debt and weighted average annual interest rates | ' | ' |
Total short-term debt | $278 | $300 |
Commercial paper program [Member] | ' | ' |
Summary of short-term debt and weighted average annual interest rates | ' | ' |
$600 million commercial paper program (0.24% and 0.29%, respectively) | $278 | $300 |
Summary_of_Short_Term_Debt_and1
Summary of Short Term Debt and Weighted Average Annual Interest Rates (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Summary of short-term debt and weighted average annual interest rates | ' | ' |
Maximum borrowing capacity of short term debt | $350 | ' |
Commercial paper program [Member] | ' | ' |
Summary of short-term debt and weighted average annual interest rates | ' | ' |
Maximum borrowing capacity of short term debt | $600 | $600 |
Weighted average annual interest rate | 0.24% | 0.29% |
LongTerm_Debt_Detail
Long-Term Debt (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Summary of long-term debt | ' | ' |
Long-term debt | $707 | $1,038 |
8.15% surplus note, due June 27, 2032, payable to NFS [Member] | ' | ' |
Summary of long-term debt | ' | ' |
Surplus note | 300 | 300 |
7.50% surplus note, due December 17, 2031, payable to NFS [Member] | ' | ' |
Summary of long-term debt | ' | ' |
Surplus note | 300 | 300 |
6.75% surplus note, due December 23, 2033, payable to NFS [Member] | ' | ' |
Summary of long-term debt | ' | ' |
Surplus note | 100 | 100 |
Variable funding surplus note, due December 31, 2040 [Member] | ' | ' |
Summary of long-term debt | ' | ' |
Surplus note | ' | 297 |
Other [Member] | ' | ' |
Summary of long-term debt | ' | ' |
Long-term debt | $7 | $41 |
LongTerm_Debt_Parenthetical_De
Long-Term Debt (Parenthetical) (Detail) | Dec. 31, 2013 |
8.15% surplus note, due June 27, 2032, payable to NFS [Member] | ' |
Summary of long-term debt | ' |
Interest rate of surplus note | 8.15% |
7.50% surplus note, due December 17, 2031, payable to NFS [Member] | ' |
Summary of long-term debt | ' |
Interest rate of surplus note | 7.50% |
6.75% surplus note, due December 23, 2033, payable to NFS [Member] | ' |
Summary of long-term debt | ' |
Interest rate of surplus note | 6.75% |
LongTerm_Debt_Additional_infor
Long-Term Debt - Additional information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Long Term Debt (Textual) [Abstract] | ' | ' | ' |
Interest payments on surplus notes payable to NFS | $54 | $54 | $54 |
Variable funding surplus note, due December 31, 2040 [Member] | ' | ' | ' |
Long Term Debt (Textual) [Abstract] | ' | ' | ' |
Interest payments on surplus notes payable to NFS | $5 | $10 | ' |
Summary_of_Federal_Income_Tax_
Summary of Federal Income Tax Expense Attributable to Net Income (Loss) Before Loss Attributable to Noncontrolling Interests (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary of federal income tax (benefit) expense attributable to (loss) income before income attributable to noncontrolling interest | ' | ' | ' | |
Current tax expense (benefit) | ($33) | ($144) | $55 | [1] |
Deferred tax (benefit) expense | 346 | 243 | -482 | [1] |
Total tax (benefit) expense | $313 | $99 | ($427) | [1] |
[1] | The balances reflect a change in accounting principle, as described in Note 2. |
Summary_of_Federal_Income_Tax_1
Summary of Federal Income Tax Expense Attributable to Income Loss (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary of percentage computed by applying the U.S. federal income tax rate to (loss) income before federal income taxes and noncontrolling interests | ' | ' | ' | |
Computed (expected tax expense (benefit)) | $469 | $245 | ($297) | [1] |
Dividends received deduction | -112 | -75 | -99 | [1] |
Tax credits | -82 | -85 | -30 | [1] |
Other, net | 38 | 14 | -1 | [1] |
Total tax (benefit) expense | $313 | $99 | ($427) | [1] |
Computed (expected tax (benefit) expense), percentage | 35.00% | 35.00% | 35.00% | [1] |
Dividends received deduction, percentage | -8.00% | -11.00% | 12.00% | [1] |
Tax credit, percentage | -6.00% | -12.00% | 3.00% | [1] |
Other, net, percentage | 2.00% | 2.00% | ' | |
Total percentage | 23.00% | 14.00% | 50.00% | [1] |
[1] | The balances reflect a change in accounting principle, as described in Note 2. |
Federal_Income_Taxes_Additiona
Federal Income Taxes - Additional information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Federal Income Taxes (Textual) [Abstract] | ' | ' | ' |
Federal income tax receivable (liability) | ($13) | $61 | ' |
Federal income taxes paid (refunded) | -107 | -95 | 121 |
Company recorded tax benefit | 13 | ' | 10 |
Income-housing credit carryforwards description | 'Income-housing credit carryforwards, which expire between 2024 and 2033 | ' | ' |
Low Income-housing credit carry forwards | 222 | ' | ' |
Minimum tax credit carryforwards | 90 | ' | ' |
Foreign tax credit carryforwards | 40 | ' | ' |
Valuation allowance | 17 | 18 | ' |
Change in valuation allowance | 1 | 0 | 6 |
Local income tax examinations year by tax authorities | '2005 | ' | ' |
Income tax returns description | 'The IRS commenced an examination of the Company's U.S. income tax returns for the years 2009 through 2010 | ' | ' |
Minimum [Member] | ' | ' | ' |
Federal Income Taxes (Textual) [Abstract] | ' | ' | ' |
Foreign tax credit carryforwards expiring period | '2019 | ' | ' |
Maximum [Member] | ' | ' | ' |
Federal Income Taxes (Textual) [Abstract] | ' | ' | ' |
Foreign tax credit carryforwards expiring period | '2023 | ' | ' |
Domestic Tax Authority [Member] | ' | ' | ' |
Federal Income Taxes (Textual) [Abstract] | ' | ' | ' |
Gross federal net operating loss carryforwards | $797 | ' | ' |
Domestic Tax Authority [Member] | Minimum [Member] | ' | ' | ' |
Federal Income Taxes (Textual) [Abstract] | ' | ' | ' |
Gross federal net operating loss carryforwards expiration period | '2027 | ' | ' |
Domestic Tax Authority [Member] | Maximum [Member] | ' | ' | ' |
Federal Income Taxes (Textual) [Abstract] | ' | ' | ' |
Gross federal net operating loss carryforwards expiration period | '2028 | ' | ' |
Summary_of_Tax_Effects_of_Temp
Summary of Tax Effects of Temporary Differences Included in Net Deferred Tax (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Future policy benefits and claims | $1,244 | $1,295 |
Derivatives, including embedded derivatives | ' | 94 |
Tax credit carryforwards | 352 | 288 |
Other | 845 | 478 |
Gross deferred tax assets | 2,441 | 2,155 |
Valuation allowance | -17 | -18 |
Net deferred tax assets | 2,424 | 2,137 |
Deferred tax liabilities: | ' | ' |
Deferred policy acquisition costs | -1,048 | -874 |
Available-for-sale securities | -821 | -1,338 |
Derivatives, including embedded derivatives | -600 | ' |
Other | -255 | -239 |
Gross deferred tax liabilities | -2,724 | -2,451 |
Net deferred tax liability | ($300) | ($314) |
Rollforward_of_Uncertain_Tax_P
Rollforward of Uncertain Tax Positions (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Uncertain tax positions including permanent and temporary differences | ' | ' | ' |
Balance at beginning of period | $36 | $76 | $119 |
Additions for current year tax positions | 2 | -2 | 9 |
Additions for prior years tax positions | ' | 25 | ' |
Reductions for prior years tax positions | -2 | -63 | -52 |
Balance at end of period | $36 | $36 | $76 |
Statutory_Financial_Informatio2
Statutory Financial Information - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statutory Financial Information (Textual) [Abstract] | ' | ' | ' |
Change in deferred tax valuation | $1 | $0 | $6 |
Deferred tax asset, subsidiaries | 10 | ' | ' |
State of Ohio insurance laws description | 'The State of Ohio insurance laws require Ohio-domiciled life insurance companies to seek prior regulatory approval to pay a dividend or distribution of cash or other property if the fair market value thereof, together with that of other dividends or distributions made in the preceding 12 months, exceeds the greater of (1) 10% of statutory-basis policyholders' surplus as of the prior December 31 or (2) the statutory-basis net income of the insurer for the prior year. | ' | ' |
Dividend distributions made for the period | '12 months | ' | ' |
Statutory basis policyholders surplus | 10.00% | ' | ' |
Cash dividend paid | 0 | 40 | 0 |
NLIC paid dividend | 355 | ' | ' |
Subsidiaries [Member] | ' | ' | ' |
Statutory Financial Information (Textual) [Abstract] | ' | ' | ' |
Change in deferred tax valuation | $66 | ' | ' |
Statutory_Financial_Informatio3
Statutory Financial Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Parent Company [Member] | ' | ' | ' |
Summarize the statutory net income (loss) and statutory capital and surplus for the Company and its primary insurance subsidiary | ' | ' | ' |
Statutory net income (loss) | $262 | $764 | $18 |
Statutory capital and surplus | 3,550 | 3,837 | 3,591 |
Subsidiaries [Member] | ' | ' | ' |
Summarize the statutory net income (loss) and statutory capital and surplus for the Company and its primary insurance subsidiary | ' | ' | ' |
Statutory net income (loss) | -103 | -54 | -61 |
Statutory capital and surplus | $534 | $311 | $302 |
Related_Party_Transactions_Add
Related Party Transactions - Additional information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Related Party Transactions (Textual) [Abstract] | ' | ' | ' |
IT service payments to NMIC and NSC | $277,000,000 | $283,000,000 | $241,000,000 |
Total account values of group annuity and life insurance contracts | 3,300,000,000 | 3,200,000,000 | ' |
Revenue from group annuity and life insurance contracts | 137,000,000 | 140,000,000 | 148,000,000 |
Total interest credited to the account balances | 109,000,000 | 113,000,000 | 122,000,000 |
Company made lease payments to NMIC | 16,000,000 | 15,000,000 | 14,000,000 |
Revenues ceded to NMIC | 291,000,000 | 255,000,000 | 301,000,000 |
Benefits, claims and expenses | 178,000,000 | 167,000,000 | 212,000,000 |
Customer allocations to NFG funds | 53,200,000,000 | 45,000,000,000 | ' |
NFG paid to NLIC | 163,000,000 | 144,000,000 | 129,000,000 |
Amounts on deposit with NCMC | 228,000,000 | 854,000,000 | ' |
Total commissions and fees paid | 54,000,000 | 54,000,000 | 64,000,000 |
Notes receivable outstanding | 146,000,000 | 126,000,000 | ' |
Life insurance [Member] | ' | ' | ' |
Related Party Transactions (Textual) [Abstract] | ' | ' | ' |
Revenues ceded to NMIC | $179,000,000 | $161,000,000 | $203,000,000 |
Contingencies_Additional_Infor
Contingencies - Additional Information (Detail) (USD $) | Dec. 31, 2012 | Jun. 08, 2011 |
In Billions, unless otherwise specified | ||
Contingencies (Textual) [Abstract] | ' | ' |
Probability of deceased percentage | ' | 70.00% |
Recovery of assets | $3 | ' |
Reinsurance_Detail
Reinsurance (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Premiums | ' | ' | ' |
Direct | $1,015 | $890 | $832 |
Assumed from other companies | ' | ' | ' |
Ceded to other companies | -291 | -255 | -301 |
Premiums | 724 | 635 | 531 |
Life, accident and health insurance in force | ' | ' | ' |
Direct | 228,095 | 216,002 | 209,732 |
Assumed from other companies | 6 | 5 | 5 |
Ceded to other companies | -58,310 | -59,895 | -60,499 |
Life, accident and health insurance | $169,791 | $156,112 | $149,238 |
Reinsurance_Additional_informa
Reinsurance - Additional information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Reinsurance (Textual) [Abstract] | ' | ' | ' |
Amounts recoverable under reinsurance contracts | $675 | $684 | $704 |
Segment_Information_Detail
Segment Information (Detail) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Revenues: | ' | ' | ' | |||
Policy charges | $1,849 | $1,670 | $1,506 | |||
Premiums | 724 | 635 | 531 | |||
Net investment income | 1,849 | 1,825 | 1,844 | |||
Non-operating net realized investment gains, net of other-than-temporary impairment losses | 791 | [1] | 428 | [1] | -1,613 | [1] |
Other revenues | -96 | [2] | -102 | [2] | -60 | [2] |
Total revenues | 5,117 | 4,456 | 2,208 | |||
Benefits and expenses: | ' | ' | ' | |||
Interest credited to policyholder accounts | 1,067 | 1,038 | 1,033 | |||
Benefits and claims | 1,354 | 1,227 | 1,062 | |||
Policyholder dividends | 59 | 54 | 67 | |||
Amortization of DAC | 374 | 575 | 65 | |||
Other expenses, net of deferrals | 922 | 863 | 830 | |||
Total benefits and expenses | 3,776 | 3,757 | 3,057 | |||
Income (loss) before federal income taxes and noncontrolling interests | 1,341 | 699 | -849 | |||
Less: non-operating net realized investment gains, net of other-than-temporary impairment losses | -791 | [1] | -428 | [1] | 1,613 | [1] |
Less: net loss attributable to noncontrolling interest | -82 | -61 | -56 | |||
Total assets | 133,445 | 120,170 | 111,986 | |||
Individual Products and Solutions - Annuity [Member] | ' | ' | ' | |||
Revenues: | ' | ' | ' | |||
Policy charges | 1,021 | 899 | 781 | |||
Premiums | 416 | 334 | 234 | |||
Net investment income | 546 | 551 | 527 | |||
Other revenues | -109 | [2] | -124 | [2] | -59 | [2] |
Total revenues | 1,874 | 1,660 | 1,483 | |||
Benefits and expenses: | ' | ' | ' | |||
Interest credited to policyholder accounts | 377 | 375 | 374 | |||
Benefits and claims | 688 | 595 | 476 | |||
Amortization of DAC | 185 | 185 | 80 | |||
Other expenses, net of deferrals | 303 | 285 | 269 | |||
Total benefits and expenses | 1,553 | 1,440 | 1,199 | |||
Income (loss) before federal income taxes and noncontrolling interests | 321 | 220 | 284 | |||
Pre-tax operating earnings (loss) | 321 | 220 | 284 | |||
Total assets | 68,805 | 58,707 | 57,741 | |||
Retirement Plans [Member] | ' | ' | ' | |||
Revenues: | ' | ' | ' | |||
Policy charges | 101 | 94 | 96 | |||
Net investment income | 743 | 736 | 715 | |||
Total revenues | 844 | 830 | 811 | |||
Benefits and expenses: | ' | ' | ' | |||
Interest credited to policyholder accounts | 473 | 457 | 441 | |||
Amortization of DAC | -2 | 14 | 11 | |||
Other expenses, net of deferrals | 151 | 163 | 166 | |||
Total benefits and expenses | 622 | 634 | 618 | |||
Income (loss) before federal income taxes and noncontrolling interests | 222 | 196 | 193 | |||
Pre-tax operating earnings (loss) | 222 | 196 | 193 | |||
Total assets | 29,904 | 27,842 | 25,114 | |||
Individual Products and Solutions - Life and NBSG [Member] | ' | ' | ' | |||
Revenues: | ' | ' | ' | |||
Policy charges | 727 | 677 | 629 | |||
Premiums | 282 | 274 | 272 | |||
Net investment income | 544 | 534 | 531 | |||
Total revenues | 1,553 | 1,485 | 1,432 | |||
Benefits and expenses: | ' | ' | ' | |||
Interest credited to policyholder accounts | 213 | 199 | 198 | |||
Benefits and claims | 636 | 589 | 577 | |||
Policyholder dividends | 61 | 57 | 67 | |||
Amortization of DAC | 125 | 150 | 75 | |||
Other expenses, net of deferrals | 284 | 250 | 235 | |||
Total benefits and expenses | 1,319 | 1,245 | 1,152 | |||
Income (loss) before federal income taxes and noncontrolling interests | 234 | 240 | 280 | |||
Pre-tax operating earnings (loss) | 234 | 240 | 280 | |||
Total assets | 27,183 | 25,301 | 22,503 | |||
Corporate and Other [Member] | ' | ' | ' | |||
Revenues: | ' | ' | ' | |||
Premiums | 26 | 27 | 25 | |||
Net investment income | 16 | 4 | 71 | |||
Non-operating net realized investment gains, net of other-than-temporary impairment losses | 791 | [1] | 428 | [1] | -1,613 | [1] |
Other revenues | 13 | [2] | 22 | [2] | -1 | [2] |
Total revenues | 846 | 481 | -1,518 | |||
Benefits and expenses: | ' | ' | ' | |||
Interest credited to policyholder accounts | 4 | 7 | 20 | |||
Benefits and claims | 30 | 43 | 9 | |||
Policyholder dividends | -2 | -3 | ' | |||
Amortization of DAC | 66 | 226 | -101 | |||
Other expenses, net of deferrals | 184 | 165 | 160 | |||
Total benefits and expenses | 282 | 438 | 88 | |||
Income (loss) before federal income taxes and noncontrolling interests | 564 | 43 | -1,606 | |||
Less: non-operating net realized investment gains, net of other-than-temporary impairment losses | -791 | [1] | -428 | [1] | 1,613 | [1] |
Less: adjustment to amortization of DAC and other related to net realized investment gains and losses | 70 | 243 | -115 | |||
Less: net loss attributable to noncontrolling interest | 82 | 61 | 56 | |||
Pre-tax operating earnings (loss) | -75 | -81 | -52 | |||
Total assets | $7,553 | $8,320 | $6,628 | |||
[1] | Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts). | |||||
[2] | Includes operating items discussed above. |
Consolidated_Summary_of_Invest1
Consolidated Summary of Investments (Detail) (USD $) | Dec. 31, 2013 | |
In Millions, unless otherwise specified | ||
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | $39,524 | |
Amount at which shown in the consolidated balance sheet | 40,755 | |
Trading assets [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 30 | |
Fair value | 31 | |
Amount at which shown in the consolidated balance sheet | 31 | |
Policy loans [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 987 | |
Amount at which shown in the consolidated balance sheet | 987 | |
Other investments [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 712 | |
Amount at which shown in the consolidated balance sheet | 712 | |
Short-term investments [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 411 | |
Amount at which shown in the consolidated balance sheet | 411 | |
Fixed maturity securities [Member] | Available-for-sale Securities [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 31,002 | |
Fair value | 32,249 | |
Amount at which shown in the consolidated balance sheet | 32,249 | |
Fixed maturity securities [Member] | US Government Corporations and Agencies securities [Member] | Available-for-sale Securities [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 484 | |
Fair value | 561 | |
Amount at which shown in the consolidated balance sheet | 561 | |
Fixed maturity securities [Member] | Obligations of states, political subdivisions and foreign governments [Member] | Available-for-sale Securities [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 1,892 | |
Fair value | 1,963 | |
Amount at which shown in the consolidated balance sheet | 1,963 | |
Fixed maturity securities [Member] | Public Utility, Bonds [Member] | Available-for-sale Securities [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 2,616 | |
Fair value | 2,759 | |
Amount at which shown in the consolidated balance sheet | 2,759 | |
Fixed maturity securities [Member] | All Other Corporate Bonds [Member] | Available-for-sale Securities [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 26,010 | |
Fair value | 26,966 | |
Amount at which shown in the consolidated balance sheet | 26,966 | |
Equity securities [Member] | Available-for-sale Securities [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 6 | |
Fair value | 24 | |
Amount at which shown in the consolidated balance sheet | 24 | |
Equity securities [Member] | Industrial, miscellaneous and all other [Member] | Available-for-sale Securities [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 6 | |
Fair value | 14 | |
Amount at which shown in the consolidated balance sheet | 14 | |
Equity securities [Member] | Nonredeemable preferred stocks [Member] | Available-for-sale Securities [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 0 | |
Fair value | 10 | |
Amount at which shown in the consolidated balance sheet | 10 | |
Mortgage loans, net of allowance [Member] | ' | |
Summary of Investments Other Than Investments in Related Parties | ' | |
Cost | 6,376 | |
Amount at which shown in the consolidated balance sheet | $6,341 | [1] |
[1] | Difference from Column B primarily is attributable to valuation allowances due to impairments on mortgage loans (see Note 6 to the audited consolidated financial statements). |
Schedule_Supplementary_Insuran
Schedule - Supplementary Insurance Information (Detail) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Supplementary Insurance Information | ' | ' | ' | |||
Supplementary Insurance Information, Deferred policy acquisition costs | $3,778 | [1] | $3,249 | [1] | $3,487 | [1] |
Supplementary Insurance Information, Future policy benefits, losses, claims and loss expenses | 36,765 | 36,154 | 35,252 | |||
Supplementary Insurance Information, Unearned premiums | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Other policy claims and benefits payable | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Premium revenue | 724 | 635 | 531 | |||
Supplementary Insurance Information, Net investment income | 1,849 | [3] | 1,825 | [3] | 1,844 | [3] |
Supplementary Insurance Information, Benefits, claims, losses and settlement expenses | 2,480 | 2,319 | 2,162 | |||
Supplementary Insurance Information, Amortization of deferred policy acquisition costs | 374 | [1] | 575 | [1] | 65 | [1] |
Supplementary Insurance Information, Other operating expenses | 922 | [1],[3] | 863 | [1],[3] | 830 | [1],[3] |
Supplementary Insurance Information, Premiums written | ' | ' | ' | |||
IPS - Annuity [Member] | ' | ' | ' | |||
Supplementary Insurance Information | ' | ' | ' | |||
Supplementary Insurance Information, Deferred policy acquisition costs | 2,214 | [1] | 2,110 | [1] | 2,232 | [1] |
Supplementary Insurance Information, Future policy benefits, losses, claims and loss expenses | 10,985 | 12,214 | 12,550 | |||
Supplementary Insurance Information, Unearned premiums | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Other policy claims and benefits payable | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Premium revenue | 416 | 334 | 234 | |||
Supplementary Insurance Information, Net investment income | 546 | [3] | 551 | [3] | 527 | [3] |
Supplementary Insurance Information, Benefits, claims, losses and settlement expenses | 1,065 | 970 | 850 | |||
Supplementary Insurance Information, Amortization of deferred policy acquisition costs | 185 | [1] | 185 | [1] | 80 | [1] |
Supplementary Insurance Information, Other operating expenses | 303 | [1],[3] | 285 | [1],[3] | 269 | [1],[3] |
Supplementary Insurance Information, Premiums written | ' | ' | ' | |||
Retirement Plans Segment [Member] | ' | ' | ' | |||
Supplementary Insurance Information | ' | ' | ' | |||
Supplementary Insurance Information, Deferred policy acquisition costs | 179 | [1] | 168 | [1] | 172 | [1] |
Supplementary Insurance Information, Future policy benefits, losses, claims and loss expenses | 14,313 | 13,628 | 12,638 | |||
Supplementary Insurance Information, Unearned premiums | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Other policy claims and benefits payable | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Premium revenue | 0 | ' | ' | |||
Supplementary Insurance Information, Net investment income | 743 | [3] | 736 | [3] | 715 | [3] |
Supplementary Insurance Information, Benefits, claims, losses and settlement expenses | 473 | 457 | 441 | |||
Supplementary Insurance Information, Amortization of deferred policy acquisition costs | -2 | [1] | 14 | [1] | 11 | [1] |
Supplementary Insurance Information, Other operating expenses | 151 | [1],[3] | 163 | [1],[3] | 166 | [1],[3] |
Supplementary Insurance Information, Premiums written | ' | ' | ' | |||
IPS - Life And NBSG [Member] | ' | ' | ' | |||
Supplementary Insurance Information | ' | ' | ' | |||
Supplementary Insurance Information, Deferred policy acquisition costs | 1,557 | [1] | 1,442 | [1] | 1,421 | [1] |
Supplementary Insurance Information, Future policy benefits, losses, claims and loss expenses | 10,068 | 9,564 | 9,338 | |||
Supplementary Insurance Information, Unearned premiums | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Other policy claims and benefits payable | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Premium revenue | 282 | 301 | 297 | |||
Supplementary Insurance Information, Net investment income | 544 | [3] | 536 | [3] | 533 | [3] |
Supplementary Insurance Information, Benefits, claims, losses and settlement expenses | 910 | 868 | 863 | |||
Supplementary Insurance Information, Amortization of deferred policy acquisition costs | 125 | [1] | 150 | [1] | 75 | [1] |
Supplementary Insurance Information, Other operating expenses | 284 | [1],[3] | 255 | [1],[3] | 238 | [1],[3] |
Supplementary Insurance Information, Premiums written | ' | ' | ' | |||
Corporate and Other Segment [Member] | ' | ' | ' | |||
Supplementary Insurance Information | ' | ' | ' | |||
Supplementary Insurance Information, Deferred policy acquisition costs | -172 | [1] | -471 | [1] | -338 | [1] |
Supplementary Insurance Information, Future policy benefits, losses, claims and loss expenses | 1,399 | 748 | 726 | |||
Supplementary Insurance Information, Unearned premiums | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Other policy claims and benefits payable | ' | [2] | ' | [2] | ' | [2] |
Supplementary Insurance Information, Premium revenue | 26 | ' | ' | |||
Supplementary Insurance Information, Net investment income | 16 | [3] | 2 | [3] | 69 | [3] |
Supplementary Insurance Information, Benefits, claims, losses and settlement expenses | 32 | 24 | 8 | |||
Supplementary Insurance Information, Amortization of deferred policy acquisition costs | 66 | [1] | 226 | [1] | -101 | [1] |
Supplementary Insurance Information, Other operating expenses | 184 | [1],[3] | 160 | [1],[3] | 157 | [1],[3] |
Supplementary Insurance Information, Premiums written | ' | ' | ' | |||
[1] | The 2011 balances reflect a change in accounting principle, as described in Note 2. | |||||
[2] | Unearned premiums and other policy claims and benefits payable are included in Column C amounts. | |||||
[3] | Allocations of net investment income and certain operating expenses are based on numerous assumptions and estimates, and reported segment operating results would change if different methods were applied. |
Schedule_of_Reinsurance_Detail
Schedule of Reinsurance (Detail) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Reinsurance Premiums for Insurance Companies, by Product Segment, Net Amount [Abstract] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, Product Segment, Gross amount | $1,015 | $890 | $832 | |||
Reinsurance Effect on Claims and Benefits Incurred, Amount Ceded to other companies | -291 | -255 | -301 | |||
Reinsurance Effect on Claims and Benefits Incurred, Amount Assumed from other companies | ' | ' | ' | |||
Reinsurance Effect on Claims and Benefits Incurred, Net amount | 724 | 635 | 531 | |||
Reinsurance Premiums for Insurance Companies, by Product Segment, Percentage of amount assumed to net | ' | ' | ' | |||
Life, accident and health insurance in force [Member] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment, Net Amount [Abstract] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, Product Segment, Gross amount | 228,095 | 216,002 | 209,732 | |||
Reinsurance Effect on Claims and Benefits Incurred, Amount Ceded to other companies | -58,310 | -59,895 | -60,499 | |||
Reinsurance Effect on Claims and Benefits Incurred, Amount Assumed from other companies | 6 | 5 | 5 | |||
Reinsurance Effect on Claims and Benefits Incurred, Net amount | 169,791 | 156,112 | 149,238 | |||
Reinsurance Premiums for Insurance Companies, by Product Segment, Percentage of amount assumed to net | ' | ' | ' | |||
Life insurance [Member] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment, Net Amount [Abstract] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, Product Segment, Gross amount | 783 | [1] | 701 | [1] | 596 | [1] |
Reinsurance Effect on Claims and Benefits Incurred, Amount Ceded to other companies | -59 | [1] | -66 | [1] | -65 | [1] |
Reinsurance Effect on Claims and Benefits Incurred, Net amount | 724 | [1] | 635 | [1] | 531 | [1] |
Reinsurance Premiums for Insurance Companies, by Product Segment, Percentage of amount assumed to net | ' | [1] | ' | [1] | ' | [1] |
Accident and health insurance [Member] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment, Net Amount [Abstract] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, Product Segment, Gross amount | 232 | 189 | 236 | |||
Reinsurance Effect on Claims and Benefits Incurred, Amount Ceded to other companies | ($232) | ($189) | ($236) | |||
Reinsurance Premiums for Insurance Companies, by Product Segment, Percentage of amount assumed to net | ' | ' | ' | |||
[1] | Primarily represents premiums from traditional life insurance and life-contingent immediate annuities and excludes deposits on investment and universal life insurance products. |
Schedule_of_Valuation_and_Qual
Schedule of Valuation and Qualifying Accounts (Detail) (Allowance For Mortgage Loan [Member], USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Allowance For Mortgage Loan [Member] | ' | ' | ' | |||
Activity in the valuation allowance for mortgage loans | ' | ' | ' | |||
Valuation Allowances and Reserves, beginning Balance | $44 | $60 | $96 | |||
Charged to costs and expenses | -4 | 1 | 25 | |||
Charged to other accounts | 0 | ' | ' | |||
Deductions | 5 | [1] | 17 | [1] | 61 | [1] |
Valuation Allowances and Reserves, Ending Balance | $35 | $44 | $60 | |||
[1] | Amounts generally represent payoffs, sales and recoveries. |