Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 07, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 | ||
Entity Registrant Name | LINCOLN NATIONAL LIFE INSURANCE CO /IN/ | ||
Entity Central Index Key | 726,865 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding | 10,000,000 | ||
Entity Public Float | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Available-for-sale securities, at fair value: | |||
Fixed maturity securities (amortized cost: 2017 – $85,802; 2016 – $83,290) | $ 93,340 | $ 87,866 | |
Variable interest entities’ fixed maturity securities (amortized cost: 2017 – $0; 2016 – $200) | 200 | ||
Equity securities (cost: 2017 – $247; 2016 – $260) | 246 | 275 | |
Trading securities | 1,533 | 1,624 | |
Mortgage loans on real estate | 10,662 | 9,761 | |
Real estate | 11 | 12 | |
Policy loans | 2,379 | 2,429 | |
Derivative investments | 845 | 900 | |
Other investments | 2,006 | 2,034 | |
Total investments | 111,022 | 105,101 | |
Cash and invested cash | 947 | 2,057 | |
Deferred acquisition costs and value of business acquired | 8,408 | 9,143 | |
Premiums and fees receivable | 394 | 428 | |
Accrued investment income | 1,052 | 1,029 | |
Reinsurance recoverables | 6,515 | 6,810 | |
Reinsurance related embedded derivatives | 58 | ||
Funds withheld reinsurance assets | 598 | 623 | |
Goodwill | 1,368 | 2,273 | |
Other assets | 7,349 | 6,132 | |
Separate account assets | 144,219 | 128,397 | |
Total assets | 281,872 | 262,051 | |
Liabilities | |||
Future contract benefits | 22,063 | 20,681 | |
Other contract holder funds | 79,481 | 78,106 | |
Short-term debt | [1] | 10 | 280 |
Long-term debt | 2,374 | 2,549 | |
Reinsurance related embedded derivatives | 51 | ||
Funds withheld reinsurance liabilities | 4,348 | 4,827 | |
Deferred gain on business sold through reinsurance | 41 | 67 | |
Payables for collateral on investments | 4,354 | 4,910 | |
Other liabilities | 6,486 | 6,414 | |
Separate account liabilities | 144,219 | 128,397 | |
Total liabilities | 263,427 | 246,231 | |
Contingencies and Commitments (See Note 13) | |||
Stockholders' Equity | |||
Common stock – 10,000,000 shares authorized, issued and outstanding | 10,713 | 10,696 | |
Retained earnings | 4,405 | 3,342 | |
Accumulated other comprehensive income (loss) | 3,327 | 1,782 | |
Total stockholders' equity | 18,445 | 15,820 | |
Total liabilities and stockholders' equity | $ 281,872 | $ 262,051 | |
[1] | The short-term debt represents short-term notes payable to LNC. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Available-for-sale securities, at fair value: | ||
Fixed maturity securities (amortized cost) | $ 85,802 | $ 83,290 |
Variable interest entities' fixed maturity securities (amortized cost) | 0 | 200 |
Equity securities (cost) | $ 247 | $ 260 |
Stockholders' Equity | ||
Common stock - shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock - shares issued (in shares) | 10,000,000 | 10,000,000 |
Common stock - shares outstanding (in shares) | 10,000,000 | 10,000,000 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Insurance premiums | $ 3,018 | $ 2,579 | $ 2,825 |
Fee income | 5,369 | 5,171 | 4,960 |
Net investment income | 4,760 | 4,631 | 4,611 |
Realized gain (loss): | |||
Total other-than-temporary impairment losses on securities | (18) | (141) | (75) |
Portion of loss recognized in other comprehensive income | 41 | 25 | |
Net other-than-temporary impairment losses on securities recognized in earnings | (18) | (100) | (50) |
Realized gain (loss), excluding other-than-temporary impairment losses on securities | (438) | (410) | (172) |
Total realized gain (loss) | (456) | (510) | (222) |
Amortization of deferred gain on business sold through reinsurance | 18 | 69 | 69 |
Other revenues | 439 | 403 | 440 |
Total revenues | 13,148 | 12,343 | 12,683 |
Expenses | |||
Interest credited | 2,558 | 2,527 | 2,472 |
Benefits | 4,818 | 4,247 | 4,529 |
Commissions and other expenses | 3,967 | 4,005 | 4,109 |
Interest and debt expense | 126 | 116 | 105 |
Strategic digitization expense | 43 | 8 | |
Impairment of intangibles | 905 | ||
Total expenses | 12,417 | 10,903 | 11,215 |
Income (loss) before taxes | 731 | 1,440 | 1,468 |
Federal income tax expense (benefit) | (1,287) | 267 | 295 |
Net income (loss) | 2,018 | 1,173 | 1,173 |
Other comprehensive income (loss), net of tax: | |||
Unrealized investment gains (losses) | 1,547 | 692 | (2,090) |
Funded status of employee benefit plans | (2) | (1) | 2 |
Total other comprehensive income (loss), net of tax | 1,545 | 691 | (2,088) |
Comprehensive income (loss) | $ 3,563 | $ 1,864 | $ (915) |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders' Equity - USD ($) $ in Millions | Common Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance as of beginning-of-year at Dec. 31, 2014 | $ 10,652 | $ 3,066 | $ 3,179 | |
Stock compensation/issued for benefit plans | 25 | |||
Net income (loss) | 1,173 | $ 1,173 | ||
Dividends declared | (1,121) | |||
Other comprehensive income (loss), net of tax | (2,088) | (2,088) | ||
Balance as of end-of-period at Dec. 31, 2015 | 10,677 | 3,118 | 1,091 | 14,886 |
Stock compensation/issued for benefit plans | 19 | |||
Net income (loss) | 1,173 | 1,173 | ||
Dividends declared | (949) | |||
Other comprehensive income (loss), net of tax | 691 | 691 | ||
Balance as of end-of-period at Dec. 31, 2016 | 10,696 | 3,342 | 1,782 | 15,820 |
Stock compensation/issued for benefit plans | 17 | |||
Net income (loss) | 2,018 | 2,018 | ||
Dividends declared | (955) | |||
Other comprehensive income (loss), net of tax | 1,545 | 1,545 | ||
Balance as of end-of-period at Dec. 31, 2017 | $ 10,713 | $ 4,405 | $ 3,327 | $ 18,445 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $ 2,018 | $ 1,173 | $ 1,173 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Deferred acquisition costs, value of business acquired, deferred sales inducements and deferred front-end loads deferrals and interest, net of amortization | (17) | 55 | (176) |
Trading securities purchases, sales and maturities, net | 120 | 165 | 143 |
Change in premiums and fees receivable | 34 | (49) | 101 |
Change in accrued investment income | 19 | 8 | (18) |
Change in future contract benefits and other contract holder funds | (2,062) | (2,036) | 868 |
Change in reinsurance related assets and liabilities | 1,001 | 542 | (1,060) |
Change in federal income tax accruals | (1,502) | 146 | 170 |
Realized gain (loss) | 456 | 511 | 222 |
Amortization of deferred gain on business sold through reinsurance | (18) | (69) | (69) |
Change in cash management agreement | (277) | (66) | 351 |
Impairment of intangibles | 905 | ||
Other | 177 | 262 | 45 |
Net cash provided by (used in) operating activities | 854 | 642 | 1,750 |
Cash Flows from Investing Activities | |||
Purchases of available-for-sale securities | (9,887) | (10,791) | (8,858) |
Sales of available-for-sale securities | 1,773 | 3,076 | 1,329 |
Maturities of available-for-sale securities | 5,790 | 5,290 | 4,265 |
Purchases of alternative investments | (357) | (302) | (324) |
Sales and repayments of alternative investments | 184 | 238 | 177 |
Proceeds from affiliate transfer of alternative investments | 66 | ||
Issuance of mortgage loans on real estate | (2,047) | (2,127) | (1,944) |
Repayment and maturities of mortgage loans on real estate | 1,145 | 877 | 816 |
Issuance and repayment of policy loans, net | 49 | 91 | 125 |
Net change in collateral on investments and derivatives | (374) | 435 | 638 |
Proceeds from sale of subsidiary/business | 75 | ||
Other | (123) | (99) | (78) |
Net cash provided by (used in) investing activities | (3,781) | (3,312) | (3,779) |
Cash Flows from Financing Activities | |||
Payment of long-term debt, including current maturities | (290) | (250) | (4) |
Issuance of long-term debt, net of issuance costs | 75 | ||
Issuance (payment) of short-term debt | (270) | 190 | 88 |
Proceeds from sales leaseback transaction | 62 | 85 | 47 |
Deposits of fixed account values, including the fixed portion of variable | 10,775 | 10,030 | 10,745 |
Withdrawals of fixed account values, including the fixed portion of variable | (5,764) | (5,449) | (6,062) |
Transfers to and from separate accounts, net | (1,787) | (1,308) | (2,474) |
Common stock issued for benefit plans | (29) | (22) | (14) |
Dividends paid | (955) | (949) | (1,121) |
Net cash provided by (used in) financing activities | 1,817 | 2,327 | 1,205 |
Net increase (decrease) in cash and invested cash | (1,110) | (343) | (824) |
Cash and invested cash as of beginning-of-year | 2,057 | 2,400 | 3,224 |
Cash and invested cash as of end-of-period | $ 947 | $ 2,057 | $ 2,400 |
Nature of Operations, Basis of
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies | 1 . Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies Nature of Operations The Lincoln National Life Insurance Company (“LNL ” or the “Company,” which also may be referred to as “we,” “our” or “us”) , a wholly-owned subsidiary of Lincoln National Corporation (“LNC” or the “Parent Company”), is domiciled in the state of Indiana. We own 100% of the outstanding common stock of one insurance company subsidiary, Lincoln Life & Annuity Company of New York (“LLANY”). We also own several non-insurance companies, including Lincoln Financial Distributors, our wholesale distributor, and Lincoln Financial Advisors Corporation, part of LNC’s retail distributor, Lincoln Financial Network. LNL’s principal businesses consist of underwriting annuities, deposit-type contracts and life insurance through multiple distribution channels. LNL is licensed and sells its products throughout the U.S. and several U.S. territories. See Note 21 for additional information. Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with United States of America generally accepted accounting principles (“GAAP”). Certain GAAP policies, which significantly affect the determination of financial condition , results of operations and cash flows, are summarized below. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of LNL and all other entities in which we have a controlling financial interest and any variable interest entities (“VIEs”) in which we are the primary beneficiary. We use the equity method of accounting to recognize all of our investments in limited liability partnerships. All material inter-company accounts and transactions have been eliminated in consolidation. Our involvement with VIEs is primarily to invest in assets that allow us to gain exposure to a broadly diversified portfolio of asset classes. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support or where investors lack certain characteristics of a controlling financial interest. We assess our contractual, ownership or other interests in a VIE to determine if our interest participates in the variability the VIE was designed to absorb and pass onto variable interest holders. We perform an ongoing qualitative assessment of our variable interests in VIEs to determine whether we have a controlling financial interest and would therefore be considered the primary beneficiary of the VIE. If we determine we are the primary beneficiary of a VIE, we consolidate the assets and liabilities of the VIE in our consolidated financial statements. Accounting Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Those estimates are inherently subject to change and actual results could differ from those estimates. Included among the material (or potentially material) reported amounts and disclosures that require extensive use of estimates are: fair value of certain invested assets and derivatives, other-than-temporary impairment (“OTTI”) and asset valuation allowances, deferred acquisition costs (“DAC”) , value of business acquired (“VOBA”) , deferred sales inducements (“DSI”), goodwill, future contract benefits, other contract holder funds including deferred front-end loads (“DFEL”) , pension plans, stock-based incentive compensation, income taxes and the potential effects of resolving litigated matters. Business Combinations We use the acquisition method of accounting for all business combination transactions, and accordingly, recognize the fair values of assets acquired, liabilities assumed and any noncontrolling interests in our consolidated financial statements. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period as more information becomes available relative to the fair values as of the acquisition date. The consolidated financial statements include the results of operations of any acquired company since the acquisition date. Fair Value Measurement Our measurement of fair value is based on assumptions used by market participants in pricing the asset or liability, which may include inherent risk, restrictions on the sale or use of an asset or non-performance risk (“NPR”), which would include our own credit risk. Our estimate of an exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability (“exit price”) in the principal market, or the most advantageous market in the absence of a principal market, for that asset or liability, as opposed to the price that would be paid to acquire the asset or receive a liability (“entry price”). Pursuant to the Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification TM (“ASC”), we categorize our financial instruments carried at fair value into a three-level fair value hierarchy, based on the priority of inputs to the respective valuation technique. The three-level hierarchy for fair value measurement is defined as follows: · Level 1 – inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date, except for large holdings subject to “blockage discounts” that are excluded; · Level 2 – inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and · Level 3 – inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and we make estimates and assumptions related to the pricing of the asset or liability, including assumptions regarding risk. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. When a determination is made to classify an asset or liability within Level 3 of the fair value hierarchy, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. Because certain securities trade in less liquid or illiquid markets with limited or no pricing information, the determination of fair value for these securities is inherently more difficult. However, Level 3 fair value investments may include, in addition to the unobservable or Level 3 inputs, observable components, which are components that are actively quoted or can be validated to market-based sources. Available-For-Sale Securities – Fair Valuation Methodologies and Associated Inputs Securities classified as available -for-sale (“AFS”) consist of fixed maturity and equity securities and are stated at fair value with unrealized gains and losses included within accumulated other comprehensive income (loss) (“AOCI”), net of associated DAC, VOBA, DSI , future contract benefits, other contract holder funds and deferred income taxes. We measure the fair value of our securities classified as AFS based on assumptions used by market participants in pricing the security. The most appropriate valuation methodology is selected based on the specific characteristics of the fixed maturity or equity security, and we consistently apply the valuation methodology to measure the security’s fair value. Our fair value measurement is based on a market approach that utilizes prices and other relevant information generated by market transactions involving identical or comparable securities. Sources of inputs to the market approach primarily include third-party pricing services, independent broker quotations or pricing matrices. We do not adjust prices received from third parties; however, we do analyze the third-party pricing services’ valuation methodologies and related inputs and perform additional evaluation to determine the appropriate level within the fair value hierarchy. The observable and unobservable inputs to our valuation methodologies are based on a set of standard inputs that we generally use to evaluate all of our AFS securities. Observable inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. In addition, market indicators, industry and economic events are monitored, and further market data is acquired if certain triggers are met. For certain security types, additional inputs may be used, or some of the inputs described above may not be applicable. For private placement securities, we use pricing matrices that utilize observable pricing inputs of similar public securities and Treasury yields as inputs to the fair value measurement. Depending on the type of security or the daily market activity, standard inputs may be prioritized differently or may not be available for all AFS securities on any given day. For broker-quoted only securities, non-binding quotes from market makers or broker-dealers are obtained from sources recognized as market participants. For securities trading in less liquid or illiquid markets with limited or no pricing information, we use unobservable inputs to measure fair value. The following summarizes our fair valuation methodologies and associated inputs, which are particular to the specified security type and are in addition to the defined standard inputs to our valuation methodologies for all of our AFS securities discussed above: · Corporate bonds and U.S. g overnment bonds – We also use Trade Reporting and Compliance Engine TM reported tables for our corporate bonds and vendor trading platform data for our U.S. g overnment bonds . · Mortg age- and asset-backed securities (“ABS”) – We also utilize additional inputs, which include new issues data, monthly payment information and monthly collateral performance, including prepayments, severity, delinquencies, step-down features and over collateralization features for each of our mortgage-backed securities (“MBS”), which include collateralized mortgage obligations and mortgage pass through securities backed by residential mortgages (“RMBS”), commercial mortgage-backed securities (“CMBS”) , collateralized loan obligations (“CLOs”) and collateralized debt obligations (“C D Os”). · State and municipal bonds – We also use additional inputs that include information from the Municipal Securities Rule Making Board, as well as material event notices, new issue data, issuer financial statements and Municipal Market Data benchmark yields for our state and municipal bonds. · Hybrid and redeemable preferred and equity securities – We also utilize additional inputs of exchange prices (underlying and common stock of the same issuer) for our hybrid and redeemable preferred and equity securities . In order to validate the pricing information and broker-dealer quotes, we employ, where possible, procedures that include comparisons with similar observable positions, comparisons with subsequent sales and observations of general market movements for those security classes. We have policies and procedures in place to review the process that is utilized by our third-party pricing service and the output that is provided to us by the pricing service. On a periodic basis, we test the pricing for a sample of securities to evaluate the inputs and assumptions used by the pricing service, and we perform a comparison of the pricing service output to an alternative pricing source. We also evaluate prices provided by our primary pricing service to ensure that they are not stale or unreasonable by reviewing the prices for unusual changes from period to period based on certain parameters or for lack of change from one period to the next . AFS Securities – Evaluation for Recovery of Amortized Cost We regularly review our AFS securities for declines in fair value that we determine to be other-than-temporary. For an equity security, if we do not have the ability and intent to hold the security for a sufficient period of time to allow for a recovery in value, we conclude that an OTTI has occurred and the amortized cost of the equity security is written down to the current fair value, with a corresponding charge to realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). When assessing our ability and intent to hold the equity security to recovery, we consider, among other things, the severity and duration of the decline in fair value of the equity security as well as the cause of the decline, a fundamental analysis of the liquidity, and business prospects and overall financial condition of the issuer. For our fixed maturity AFS securities (also referred to as “debt securities”), we generally consider the following to determine whether our debt securities with unrealized losses are other-than-temporarily impaired: · The estimated range and average period until recovery; · The estimated range and average holding period to maturity; · Remaining payment terms of the security; · Current delinquencies and nonperforming assets of underlying collateral; · Expected future default rates; · Collateral value by vintage, geographic region, industry concentration or property type; · Subordination levels or other credit enhancements as of the balance sheet date as compared to origination; and · Contractual and regulatory cash obligations. For a debt security, if we intend to sell a security, or it is more likely than not we will be required to sell a debt security before recovery of its amortized cost basis and the fair value of the debt security is below amortized cost, we conclude that an OTTI has occurred and the amortized cost is written down to current fair value, with a corresponding charge to realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). If we do not intend to sell a debt security, or it is not more likely than not we will be required to sell a debt security before recovery of its amortized cost basis but the present value of the cash flows expected to be collected is less than the amortized cost of the debt security (referred to as the credit loss), we conclude that an OTTI has occurred and the amortized cost is written down to the estimated recovery value with a corresponding charge to realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss), as this amount is deemed the credit portion of the OTTI. The remainder of the decline to fair value is recorded in other comprehensive income (“OCI”) to unrealized OTTI on AFS securities on our Consolidated Statements of Stockholder’s Equity, as this amount is considered a noncredit (i.e., recoverable) impairment. When assessing our intent to sell a debt security, or if it is more likely than not we will be required to sell a debt security before recovery of its cost basis, we evaluate facts and circumstances such as, but not limited to, decisions to reposition our security portfolio, sales of securities to meet cash flow needs and sales of securities to capitalize on favorable pricing. Management considers the following as part of the evaluation: · The current economic environment and market conditions; · Our business strategy and current business plans; · The nature and type of security, including expected maturities and exposure to general credit, liquidity, market and interest rate risk; · Our analysis of data from financial models and other internal and industry sources to evaluate the current effectiveness of our hedging and overall risk management strategies; · The current and expected timing of contractual maturities of our assets and liabilities, expectations of prepayments on investments and expectations for surrenders and withdrawals of life insurance policies and annuity contracts; · The capital risk limits approved by management; and · Our current financial condition and liquidity demands. In order to determine the amount of the credit loss for a debt security, we calculate the recovery value by performing a discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover. The discount rate is the effective interest rate implicit in the underlying debt security. The effective interest rate is the original yield, or the coupon if the debt security was previously impaired. See the discussion below for additional information on the methodology and significant inputs, by security type, that we use to determine the amount of a credit loss. To determine the recovery period of a debt security, we consider the facts and circumstances surrounding the underlying issuer including, but not limited to, the following: · Historical and implied volatility of the security; · Length of time and extent to which the fair value has been less than amortized cost; · Adverse conditions specifically related to the security or to specific conditions in an industry or geographic area; · Failure, if any, of the issuer of the security to make scheduled payments; and · Recoveries or additional declines in fair value subsequent to the balance sheet date . In periods subsequent to the recognition of an OTTI, the AFS security is accounted for as if it had been purchased on the measurement date of the OTTI . Therefore, for the fixed maturity AFS security, the original discount or reduced premium is reflected in net investment income over the contractual term of the investment in a manner that produces a constant effective yield. To determine recovery value of a corporate bond, CLO or CDO, we perform additional analysis related to the underlying issuer including, but not limited to, the following: · Fundamentals of the issuer to determine what we would recover if they were to file bankruptcy versus the price at which the market is trading; · Fundamentals of the industry in which the issuer operates; · Earnings multiples for the given industry or sector of an industry that the underlying issuer operates within, divided by the outstanding debt to determine an expected recovery value of the security in the case of a liquidation; · Expected cash flows of the issuer (e.g., whether the issuer has cash flows in excess of what is required to fund its operations); · Expectations regarding defaults and recovery rates; · Changes to the rating of the security by a rating agency; and · Additional market information (e.g., if there has been a replacement of the corporate debt security). Each quarter we review the cash flows for the MBS to determine whether or not they are sufficient to provide for the recovery of our amortized cost. We revise our cash flow projections only for those securities that are at most risk for impairment based on current credit enhancement and trends in the underlying collateral performance. To determine recovery value of a MBS, we perform additional analysis related to the underlying issuer including, but not limited to, the following: · Discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover; · Level of creditworthiness of the home equity loans or residential mortgages that back an RMBS or commercial mortgages that back a CMBS; · Susceptibility to fair value fluctuations for changes in the interest rate environment; · Susceptibility to reinvestment risks, in cases where market yields are lower than the securities’ book yield earned; · Susceptibility to reinvestment risks, in cases where market yields are higher than the book yields earned on a security; · Expectations of sale of such a security where market yields are higher than the book yields earned on a security; and · Susceptibility to variability of prepayments. When evaluating MBS and mortgage-related ABS, we consider a number of pool-specific factors as well as market level factors when determining whether or not the impairment on the security is temporary or other-than-temporary. The most important factor is the performance of the underlying collateral in the security and the trends of that performance in the prior periods. We use this information about the collateral to forecast the timing and rate of mortgage loan defaults, including making projections for loans that are already delinquent and for those loans that are currently performing but may become delinquent in the future. Other factors used in this analysis include the credit characteristics of borrowers, geographic distribution of underlying loans and timing of liquidations by state. Once default rates and timing assumptions are determined, we then make assumptions regarding the severity of a default if it were to occur. Factors that impact the severity assumption include expectations for future home price appreciation or depreciation, loan size, first lien versus second lien, existence of loan level private mortgage insurance, type of occupancy and geographic distribution of loans. Once default and severity assumptions are determined for the security in question, cash flows for the underlying collateral are projected including expected defaults and prepayments. These cash flows on the collateral are then translated to cash flows on our tranche based on the cash flow waterfall of the entire capital security structure. If this analysis indicates the entire principal on a particular security will not be returned, the security is reviewed for OTTI by comparing the expected cash flows to amortized cost . To the extent that the security has already been impaired or was purchased at a discount, such that the amortized cost of the security is less than or equal to the present value of cash flows expected to be collected, no impairment is required . Otherwise, if the amortized cost of the security is greater than the present value of the cash flows expected to be collected, and the security was not purchased at a discount greater than the expected principal loss, then impairment is recognized. We further monitor the cash flows of all of our AFS securities backed by mortgages on an ongoing basis . We also perform detailed analysis on all of our subprime, Alt-A, non-agency residential MBS and on a significant percentage of our AFS securities backed by pools of commercial mortgages . The detailed analysis includes revising projected cash flows by updating the cash flows for actual cash received and applying assumptions with respect to expected defaults, foreclosures and recoveries in the future . These revised projected cash flows are then compared to the amount of credit enhancement (subordination) in the structure to determine whether the amortized cost of the security is recoverable . If it is not recoverable, we record an impairment of the security . Trading Securities Trading securities consist of fixed maturity and equity securities in designated portfolios, some of which support modified coinsurance (“Modco”) and coinsurance with funds withheld (“CFW”) reinsurance arrangements. Investment results for the portfolios that support Modco and CFW reinsurance arrangements, including gains and losses from sales, are passed directly to the reinsurers pursuant to contractual terms of the reinsurance arrangements. Trading securities are carried at fair value, and changes in fair value and changes in the fair value of embedded derivative liabilities associated with the underlying reinsurance arrangements are recorded in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) as they occur. Alternative Investments Alternative investments, which consist primarily of investments in limited partnerships (“LPs”), are included in other investments on our Consolidated Balance Sheets. We account for our investments in LPs using the equity method to determine the carrying value. Recognition of alternative investment income is delayed due to the availability of the related financial statements, which are generally obtained from the partnerships’ general partners. As a result, our venture capital, real estate and oil and gas portfolios are generally on a three-month delay and our hedge funds are on a one-month delay. In addition, the impact of audit adjustments related to completion of calendar-year financial statement audits of the investees are typically received during the second quarter of each calendar year. Accordingly, our investment income from alternative investments for any calendar-year period may not include the complete impact of the change in the underlying net assets for the partnership for that calendar-year period. Payables for Collateral on Investments When we enter into collateralized financing transactions on our investments, a liability is recorded equal to the cash or non-cash collateral received. This liability is included within payables for collateral on investments on our Consolidated Balance Sheets. Income and expenses associated with these transactions are recorded as investment income and investment expenses within net investment income on our Consolidated Statem ents of Comprehensive Income (Loss) . Changes in payables for collateral on investments are reflected within cash flows from investing activities on our Consolidated Statements of Cash Flows. Mortgage Loans on Real Estate Mortgage loans on real estate are carried at unpaid principal balances adjusted for amortization of premiums and accretion of discounts and are net of valuation allowances. Interest income is accrued on the principal balance of the loan based on the loan’s contractual interest rate. Premiums and discounts are amortized using the effective yield method over the life of the loan. Interest income and amortization of premiums and discounts are reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss) along with mortgage loan fees, which are recorded as they are incurred. Our commercial loan portfolio is comprised of long-term loans secured by existing commercial real estate. As such, it does not exhibit risk characteristics unique to mezzanine, construction, residential, agricultural, land or other types of real estate loans. We believe all of the loans in our portfolio share three primary risks: borrower creditworthiness; sustainability of the cash flow of the property; and market risk; therefore, our methods for monitoring and assessing credit risk are consistent for our entire portfolio. Loans are considered impaired when it is probable that, based upon current information and events, we will be unable to collect all amounts due under the contractual terms of the loan agreement. When we determine that a loan is impaired, a valuation allowance is established for the excess carrying value of the loan over its estimated value. The loan’s estimated value is based on: the present value of expected future cash flows discounted at the loan’s effective interest rate; the loan’s observable market price; or the fair value of the loan’s collateral. Valuation allowances are maintained at a level we believe is adequate to absorb estimated probable credit losses of each specific loan. Our periodic evaluation of the adequacy of the allowance for losses is based on our past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payments), the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. Trends in market vacancy and rental rates are incorporated into the analysis that we perform for monitored loans and may contribute to the establishment of (or an increase or decrease in) an allowance for credit losses. In addition, we review each loan individually in our commercial mortgage loan portfolio on an annual basis to identify emerging risks. We focus on properties that experienced a reduction in debt-service coverage or that have significant exposure to tenants with deteriorating credit profiles. Where warranted, we establish or increase loss reserves for a specific loan based upon this analysis. Our process for determining past due or delinquency status begins when a payment date is missed, at which time the borrower is contacted. After the grace period expiration that may last up to 10 days, we send a default notice. The default notice generally provides a short time period to cure the default. Our policy is to report loans that are 60 or more days past due, which equates to two or more payments missed, as delinquent. We do not accrue interest on loans 90 days past due, and any interest received on these loans is either applied to the principal or recorded in net investment income on our Consolidated Statements of Comprehensive Income (Loss) when received, depending on the assessment of the collectability of the loan. We resume accruing interest once a loan complies with all of its original terms or restructured terms. Mortgage loans deemed uncollectable are charged against the allowance for losses, and subsequent recoveries, if any, are credited to the allowance for losses. All mortgage loans that are impaired have an established allowance for credit losses. Changes in valuation allowances are reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). We measure and assess the credit quality of our mortgage loans by using loan-to-value and debt-service coverage ratios. The loan-to-value ratio compares the principal amount of the loan to the fair value at origination of the underlying property collateralizing the loan and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the principal amount is greater than the collateral value. Therefore, all else being equal, a lower loan-to-value ratio generally indicates a higher quality loan. The debt-service coverage ratio compares a property’s net operating income to its debt-service payments. Debt-service coverage ratios of less than 1.0 indicate that property operations do not generate enough income to cover its current debt payments. Therefore, all else being equal, a higher debt-service coverage ratio generally indicates a higher quality loan . Policy Loans Policy loans represent loans we issue to contract holders that use the cash surrender value of their life insurance policy as collateral . Policy loans are carried at unpaid principal balances . Real Estate Real estate includes both real estate held for the production of income and real estate held-for-sale . Real estate held for the production of income is carried at cost less accumulated depreciation . Depreciation is calculated on a straight-line basis over the estimated useful life of the asset . We periodically review properties held for the production of income for impairment . Properties whose carrying values are greater than their projected undiscounted cash flows are written down to estimated fair value, with impairment losses reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) . The estimated fair value of real estate is generally computed using the present value of expected future cash flows from the real estate discounted at a rate commensurate with the underlying risks . Real estate classified as held-for-sale is stated at the lower of depreciated cost or fair value less expected disposition costs at the time classified as held-for-sale . Real estate is not depreciated while it is classified as held-for-sale . Also, valuation allowances for losses are established, as appropriate, for real estate held-for-sale and any changes to the valuation allowances are reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) . Real estate acquired through foreclosure proceedings is recorded at fair value at the settlement date . Derivative Instruments We hedge |
New Accounting Standards
New Accounting Standards | 12 Months Ended |
Dec. 31, 2017 | |
New Accounting Standards [Abstract] | |
New Accounting Standards | 2 . New Accounting Standards Adoption of New Accounting Standards The following table provides a description of our adoption of ne w Accounting Standards Updates (“ ASU s”) issued by the FASB and the impact of the adoption on our financial statements: Standard Description Date of Adoption Effect on Financial Statements or Other Significant Matters ASU 2016-09, Improvements to Employee Share-Based Payment Accounting These amendments require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled rather than through additional paid-in capital in the equity section of the balance sheet. The amendments also permit an employer to repurchase an employee’s shares at the maximum statutory tax rate in the employee’s applicable jurisdiction for tax withholding purposes without triggering liability accounting. Finally, the amendments permit entities to make a one-time accounting policy election to account for forfeitures as they occur. Specific adoption methods depend on the issue being adopted and range from prospective to retrospective adoption. Early adoption is permitted; however, all amendments must be adopted in the same period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. Early adopted as of October 1, 2016 We recognized an income tax benefit of $4 million in federal income tax expense (benefit) in our Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2016. ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships The amendments clarify that a change in the counterparty to a derivative instrument identified in a hedging relationship in and of itself does not require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. We adopted the guidance in this ASU prospectively. January 1, 2017 The adoption of this ASU did not have an effect on our consolidated financial condition or results of operations. ASU 2016-06, Contingent Put and Call Options in Debt Instruments The amendments clarify the requirements for assessing whether contingent call and put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. Upon adoption of this ASU, entities will be required to assess embedded call and put options solely in accordance with the four-step decision sequence that was developed by the FASB Derivatives Implementation Group. We adopted this ASU using a modified retrospective basis applied to existing debt instruments. January 1, 2017 The adoption of this ASU did not have an effect on our consolidated financial condition or results of operations. ASU 2017-04, Simplifying the Test for Goodwill Impairment These amendments eliminate the requirement in current GAAP to perform Step 2 of the goodwill impairment test in favor of only applying a quantitative test (referred to in previous guidance as Step 1). As part of the quantitative test, the fair value of the reporting unit is compared with its carrying value, and an impairment charge is recognized when the carrying value exceeds the reporting unit’s fair value. An entity still has the option to first perform a qualitative assessment of an individual reporting unit to determine if the quantitative assessment is necessary. ASU 2017-04 should be adopted prospectively, and early adoption is permitted on impairment testing dates after January 1, 2017. Early adopted as of our October 1, 2017 goodwill impairment measurement date. There were no impairment indicators during the first three quarters of 2017. We recognized a goodwill impairment of $905 million during the fourth quarter of 2017 related to our Life Insurance segment reported in the impairment of intangibles line item on our Consolidated Statements of Comprehensive Income (Loss). For more information regarding our goodwill impairment, see Note 10. Future Adoption of New Accounting Standards The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted: Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters ASU 2014-09, Revenue from Contracts with Customers This standard establishes the core principle of recognizing revenue to depict the transfer of promised goods and services. The amendments define a five-step process that systematically identifies the various components of the revenue recognition process, culminating with the recognition of revenue upon satisfaction of an entity’s performance obligation. Although these amendments will supersede nearly all existing revenue recognition guidance under GAAP, ASU 2014-09 will not amend the accounting for insurance and investment contracts recognized in accordance with ASC Topic 944, Financial Services – Insurance, leases, financial instruments and guarantees. Retrospective, or modified retrospective, application is required. January 1, 2018 Our revenue within the scope of this standard primarily includes commissions and advisory fees earned by our broker dealer operation. We will adopt this ASU using the modified retrospective method. The adoption of ASU 2014-09 will not have a material impact on our consolidated financial condition or results of operations. ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities These amendments require, among other things, the fair value measurement of investments in equity securities and certain other ownership interests that do not result in consolidation and are not accounted for under the equity method of accounting. The change in fair value of the impacted investments in equity securities must be recognized in net income in the period of the change in fair value. In addition, the amendments include certain enhancements to the presentation and disclosure requirements for financial assets and financial liabilities. Early adoption of the ASU is generally not permitted, except as defined in the ASU. The amendments will be adopted in the financial statements through a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption. Financial statement disclosures will be updated prospectively. January 1, 2018 The current carrying value of our equity securities within the scope of ASU 2016-01 is $110 million. Upon adoption, we will prospectively recognize the change in fair value of these equity securities in current period earnings. The cumulative effective adjustment of adopting ASU 2016-01 will not have a material impact on our consolidated financial condition. ASU 2016-02, Leases This standard establishes a new accounting model for leases. Lessees will recognize most leases on the balance sheet as a right-of-use asset and a related lease liability. The lease liability is measured as the present value of the lease payments over the lease term with the right-of-use asset measured at the lease liability amount and including adjustments for certain lease incentives and initial direct costs. Lease expense recognition will continue to differentiate between finance leases and operating leases resulting in a similar pattern of lease expense recognition as under current GAAP. This ASU permits a modified retrospective adoption approach that includes a number of optional practical expedients that entities may elect upon adoption. Early adoption is permitted. January 1, 2019 We continue to gather information to determine our leases that are within the scope of this standard. We do not expect there to be a significant difference in our pattern of lease expense recognition under this ASU. Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) These amendments clarify the implementation guidance on principal versus agent considerations in ASU 2014-09, including how an entity should identify the unit of accounting for the principal versus agent evaluation. In addition, the amendments clarify how to apply the control principle to certain types of arrangements, such as service transactions, by explaining what a principal controls before the good or service is transferred to the customer. Transition requirements are consistent with ASU 2014-09. January 1, 2018 See comments under ASU 2014-09 for more information. ASU 2016-10, Identifying Performance Obligations and Licensing These amendments clarify, among other things, the accounting guidance in ASU 2014-09 regarding how an entity will determine whether promised goods or services are separately identifiable, which is an important consideration in determining whether to account for goods or services as a separate performance obligation. Transition requirements are consistent with ASU 2014-09. January 1, 2018 See comments under ASU 2014-09 for more information. ASU 2016-12, Narrow Scope Improvements and Practical Expedients The standard update amends the revenue recognition guidance in ASU 2014-09 related to transition, collectability, noncash consideration and the presentation of sales and other similar taxes. The amendments clarify that, for a contract to be considered completed at transition, substantially all of the revenue must have been recognized under current GAAP. The amendments also clarify how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. Transition requirements are consistent with ASU 2014-09. January 1, 2018 See comments under ASU 2014-09 for more information. ASU 2016-13, Measurement of Credit Losses on Financial Instruments These amendments adopt a new model to measure and recognize credit losses for most financial assets. The method used to measure estimated credit losses for AFS debt securities will be unchanged from current GAAP; however, the amendments require credit losses to be recognized through an allowance rather than as a reduction to the amortized cost of those debt securities. The amendments will permit entities to recognize improvements in credit loss estimates on AFS debt securities by reducing the allowance account immediately through earnings. The amendments will be adopted through a cumulative effect adjustment to the beginning balance of retained earnings as of the first reporting period in which the amendments are effective. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. January 1, 2020 We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations, with a primary focus on our fixed maturity securities, mortgage loans and reinsurance recoverables. Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments These amendments clarify the classification of eight specific cash flow issues in an entity’s statement of cash flows where it was determined by the FASB that there is diversity in practice. Early adoption of the amendments is permitted, and retrospective transition is required for each period presented in the statement of cash flows. January 1, 2018 We will amend classifications in our Consolidated Statements of Cash Flows upon adoption of this ASU. ASU 2016-16, Intra-Entity Asset Transfers Other Than Inventory This amendment requires an entity to recognize current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs, thereby eliminating the current GAAP exception that prohibits the recognition of income taxes until the asset has been sold to an outside party. Early adoption is permitted as of the beginning of the annual reporting period for which financial statements have not been issued. January 1, 2018 This amendment is not expected to have a material impact on our consolidated financial condition or results of operations. ASU 2016-18, Restricted Cash This amendment requires that amounts generally described as restricted cash and restricted cash equivalents should be included within cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Early adoption is permitted using a retrospective transition method applied to each period presented. January 1, 2018 We will provide these additional disclosures in our Consolidated Statements of Cash Flows upon the adoption date as applicable. ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers These amendments clarify 13 issues related to the adoption of ASU 2014-09. The most significant issue of these amendments for us is the clarification that all contracts within the scope of Topic 944 are excluded from the scope of ASU 2014-09, rather than just insurance contracts as described in ASU 2014-09. Transition requirements are consistent with ASU 2014-09. January 1, 2018 See comments under ASU 2014-09 for more information. ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost These amendments require that an entity report the service cost component of employee pension and postretirement benefit plans in the same line item as other compensation costs from services rendered by the applicable employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. ASU 2017-07 requires retrospective adoption related to the presentation of net periodic pension cost and postretirement benefit cost. January 1, 2018 The adoption of this ASU will not have an effect on our consolidated financial condition or results of operations. ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities These amendments require an entity to shorten the amortization period for certain callable debt securities held at a premium so that the premium is amortized to the earliest call date. Early adoption is permitted, and the ASU requires adoption under a modified retrospective basis through a cumulative-effect adjustment to the beginning balance of retained earnings. January 1, 2019 We are currently evaluating the impact of adopting this ASU on our consolidated financial condition or results of operations. Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters ASU 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting These amendments provide guidance when changes to the terms or conditions of a share-based payment award would require modification accounting. An entity should account for the effects of a modification unless the following are the same immediately before and after the modification: (a) the fair value of the award, (b) the vesting conditions of the award and (c) the classification of the award as an equity instrument or a liability instrument. These amendments are to be applied prospectively to awards modified on or after the effective date. Early adoption is permitted. January 1, 2018 The impacts of adopting this standard are prospective. The adoption of this ASU will not impact our consolidated financial condition or results of operations. ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities These amendments change both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. These amendments retain the threshold of highly effective for hedging relationships, remove the requirement to bifurcate between the portions of the hedging relationship that are effective and ineffective, record hedge item and hedging instrument results in the same financial statement line item, require quantitative assessment initially for all hedging relationships unless the hedging relationship meets the definition of either the shortcut method or critical terms match method and allow the contractual specified index rate to be designated as the hedged risk in a cash flow hedge of interest rate risk of a variable rate financial instrument. These amendments also eliminate the benchmark interest rate concept for variable rate instruments. Early adoption is permitted. January 1, 2019 We are currently evaluating the impact of adopting this ASU on our consolidated financial condition or results of operations. ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income These amendments allow a reclassification from AOCI to retained earnings for stranded tax effects associated with the change in the federal corporate income tax rate in the Tax Cuts and Jobs Act (the “Tax Act”) of 2017. An entity that elects to reclassify these amounts must reclassify the stranded tax effects related to the change in the federal corporate income tax rate for all items accounted for in OCI. Additional disclosures will be required for entities that elect to reclassify stranded tax effects. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years and early adoption is permitted. An entity that elects to early adopt in an annual or interim period after the period of enactment can choose to apply the ASU retrospective to each period impacted or in the period of adoption. January 1, 2018 Upon adoption of this ASU, we will reclassify approximately $600 million of stranded tax effects resulting from the new federal income rate from AOCI to retained earnings. |
Dispositions
Dispositions | 12 Months Ended |
Dec. 31, 2017 | |
Dispositions [Abstract] | |
Dispositions | 3 . Dispositions L incoln F inancial M edia Company On July 16, 2015, we closed on the sale of L incoln F inancial M edia Company to Entercom Communications Corp . (“Entercom Parent”) and Entercom Radio, LLC . We received $ 75 million in cash, net of transaction expenses, and $ 28 million face amount of perpetual cumulative convertible preferred stock of Entercom Parent. During 2015, we recognized a loss of $ 2 million, after-tax, reflected within income (loss) from continuing operations on our Consolidated Statements of Comprehensive Income (Loss) relate d to finalizing the transactio n. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | 4. Variable Interest Entities Consolidated VIEs Credit-Linked Notes We inve sted in the Class 1 notes of a credit-linked note (“CLN”) structure , which represented a special purpose trust combining ABS with credit default swaps to produce multi-class structured securities . Because the note holders did not have voting rights o r similar rights, we determined that the entity issuing the CLN was a VIE, and as a note holder, our interest represented a variable interest . We had the power to direct the most significant activity affecting the performance of the CLN structure and we had the ability to actively manage the reference portfolios underlying the credit default swaps . We concluded that we were the primary beneficiary of the VIE associated with the CLN. As of March 2017 , our $200 million CLN matured ending our exposure to this VIE. We no longer reflect the assets and liabilities associated with this VIE on our Consolidated Balance Sheets or recognize the results of operations of this VIE on our Consolidated Statements of Comprehensive Income (Loss). Asset and liability information (dollars in millions) for the consolidated VIEs included on our Consolidated Balance Sheets was as follows: As of December 31, 2017 As of December 31, 2016 Number Number of Notional Carrying of Notional Carrying Instruments Amounts Value Instruments Amounts Value Assets Fixed maturity securities: Asset-backed credit card loans (1) N/A $ - $ - N/A $ - $ 200 Credit default swaps - - - 1 200 - Total assets - $ - $ - 1 $ 200 $ 200 (1) Reported in variable interest entities’ fixed maturity securities on our Consolidated Balance Sheets . As described more fully in Note 1, we regularly review our investment holdings for OTTI . Based upon our review of our VIE AFS fixed maturity security for OTTI, there was no impairment prior to maturity in March 2017. The gains (losses) for the consolidated VIEs (in millions) recorded on our Consolidated Statements of Comprehensive Income (Loss) were as follows: For the Years Ended December 31, 2017 2016 Non-Qualifying Hedges Credit default swaps $ - $ 4 Contingent forwards - - Total non-qualifying hedges (1) $ - $ 4 (1) Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss ). Unconsolidated VIEs Reinsurance Related Notes Effective October 1, 201 7 , our captive reinsurance subsidiary, the Lincoln Reinsurance Company of Vermont VI, restructured the $275 million, long-term surplus note which was originally issued to a non-affiliated VIE in October 2015 in exchange for two corporate bond AFS securities of like principal and duration . The activities of the VIE are primarily to acquire, hold and issue notes and loans and to pay and collect interest on the notes and loans . The outstanding principal balance o f the long-term surplus note is variable in nature; moving concurrently with any variability in the face amount of the corporate bond AFS securities . We have concluded that we are not the primary beneficiary of the non-affiliated VIE because we do not have power over the activities that most significantly affect its economic performance . As of December 31, 2017, the principal balance of the long-term surplus note was zero and we do not currently have any exposure to this VIE. Structured Securities Through our investment activities, we make passive investments in structured securities issued by VIEs for which we are not the manager . These structured securities include our RMBS, CMBS, CLOs and CDOs . We have not provided financial or other support with respect to these VIEs other than our original investment . We have determined that we are not the primary beneficiary of these VIEs due to the relative size of our investment in comparison to the principal amount of the structured securities issued by the VIEs and the level of credit subordination that reduces our obligation to absorb losses or right to receive benefits . Our maximum exposure to loss on these structured securities is limited to the amortized cost for these investments . We recognize our variable interest in these VIEs at fair value on our Consolidated Balance Sheets . For information about these structured securities , see Note 5. Limited Partnerships and Limited Liability Companies We invest in certain LPs and limited liability companies (“LLCs”), including qualified affordable housing projects, that we have concluded are VIEs . We do not hold any substantive kick-out or participation rights in the LPs and LLCs, and we do not receive any performance fees or decision maker fees from the LPs and LLCs . Based on our analysis of the LPs and LLCs, we are not the primary beneficiary of the VIEs as we do not have the power to direct the most significant activities of the LPs and LLCs. The carrying amounts of our investments in the LPs and LLCs are recognized in other investments on our Consolidated Balance Sheets and were $1. 4 b illion and $1.3 b illion as of December 31, 2017 and 201 6 , respectively . Included in these carrying amounts are our investments in qualified affordable housing projects, which were $31 m illion and $37 million as of December 31, 2017 and 201 6, respectively . We do not have any contingent commitments to provide additional capital funding to these qualified affordable housing projects . We receive returns from these qualified affordable housing projects in the form of income tax credits and other tax benefits, which are recognized in federal income tax expense (benefit) on our Consolidated Statements of Comprehensive Income (Loss) and were $3 million for the years ended December 31, 201 7 and 201 6. Our exposure to loss is limited to the capital we invest in the LPs and LLCs, and there have been no indicators of impairment that would require us to recognize an impairment loss related to the LPs and LLCs as of December 31, 2017. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments [Abstract] | |
Investments | 5 . Investments AFS Securities Pursuant to the Fair Value Measurements and Disclosures Topic of the FASB ASC, we have categorized AFS securities into a three-level hierarchy, based on the priority of the inputs to the respective 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), as described in Note 1, which also includes additional disclosures regarding our fair value measurements. The amortized cost, gross unrealized gains, losses and OTTI and fair value of A FS securities (in millions) were as follows: As of December 31, 2017 Amortized Gross Unrealized Fair Cost Gains Losses OTTI (1) Value Fixed maturity securities: Corporate bonds $ 74,921 $ 6,573 $ 341 $ (7 ) $ 81,160 ABS 882 51 6 (26 ) 953 U.S. government bonds 497 37 1 - 533 Foreign government bonds 391 55 - - 446 RMBS 3,125 148 36 (21 ) 3,258 CMBS 589 10 2 (2 ) 599 CLOs 803 2 2 (5 ) 808 State and municipal bonds 4,033 932 6 - 4,959 Hybrid and redeemable preferred securities 561 85 22 - 624 Total fixed maturity securities 85,802 7,893 416 (61 ) 93,340 Equity securities 247 16 17 - 246 Total AFS securities $ 86,049 $ 7,909 $ 433 $ (61 ) $ 93,586 As of December 31, 2016 Amortized Gross Unrealized Fair Cost Gains Losses OTTI (1) Value Fixed maturity securities: Corporate bonds $ 72,706 $ 4,583 $ 931 $ (5 ) $ 76,363 ABS 1,016 39 13 (12 ) 1,054 U.S. government bonds 345 34 2 - 377 Foreign government bonds 445 57 1 - 501 RMBS 3,316 141 65 (5 ) 3,397 CMBS 341 8 4 (1 ) 346 CLOs 742 1 3 (4 ) 744 State and municipal bonds 3,811 703 19 - 4,495 Hybrid and redeemable preferred securities 568 68 47 - 589 VIEs’ fixed maturity securities 200 - - - 200 Total fixed maturity securities 83,490 5,634 1,085 (27 ) 88,066 Equity securities 260 18 3 - 275 Total AFS securities $ 83,750 $ 5,652 $ 1,088 $ (27 ) $ 88,341 (1) Includes unrealized ( gains ) and losses on impaired securities related to changes in the fair value of such securities subsequent to the impairment measurement date. The amortized cost and fair value of fixed maturity AFS securities by contractual maturities (in millions) as of December 31, 2017 , were as follows: Amortized Fair Cost Value Due in one year or less $ 3,268 $ 3,305 Due after one year through five years 17,472 18,099 Due after five years through ten years 17,059 17,708 Due after ten years 42,604 48,610 Subtotal 80,403 87,722 Structured securities (ABS, MBS, CLOs) 5,399 5,618 Total fixed maturity AFS securities $ 85,802 $ 93,340 Actual maturities may differ from contractual maturities because issuers may have the right to call or pre-pay obligations. The fair value and gross unrealized losses, including the portion of OTTI recognized in OCI, of AFS securities (dollars in millions), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows: As of December 31, 2017 Less Than or Equal Greater Than to Twelve Months Twelve Months Total Gross Gross Gross Unrealized Unrealized Unrealized Fair Losses and Fair Losses and Fair Losses and Value OTTI Value OTTI Value OTTI Fixed maturity securities: Corporate bonds $ 4,726 $ 67 $ 4,706 $ 276 $ 9,432 $ 343 ABS 56 - 143 15 199 15 U.S. government bonds 156 - 19 1 175 1 RMBS 277 4 599 33 876 37 CMBS 113 - 60 3 173 3 CLOs 281 2 72 - 353 2 State and municipal bonds 33 - 89 5 122 5 Hybrid and redeemable preferred securities 20 - 124 22 144 22 Total fixed maturity securities 5,662 73 5,812 355 11,474 428 Equity securities 22 14 8 3 30 17 Total AFS securities $ 5,684 $ 87 $ 5,820 $ 358 $ 11,504 $ 445 Total number of AFS securities in an unrealized loss position 1,095 As of December 31, 2016 Less Than or Equal Greater Than to Twelve Months Twelve Months Total Gross Gross Gross Unrealized Unrealized Unrealized Fair Losses and Fair Losses and Fair Losses and Value OTTI Value OTTI Value OTTI Fixed maturity securities: Corporate bonds $ 15,099 $ 542 $ 3,117 $ 390 $ 18,216 $ 932 ABS 201 5 281 23 482 28 U.S. government bonds 18 2 - - 18 2 Foreign government bonds 29 1 - - 29 1 RMBS 876 50 374 22 1,250 72 CMBS 187 4 18 2 205 6 CLOs 259 3 25 - 284 3 State and municipal bonds 208 11 47 8 255 19 Hybrid and redeemable preferred securities 75 3 142 44 217 47 Total fixed maturity securities 16,952 621 4,004 489 20,956 1,110 Equity securities 4 2 44 2 48 4 Total AFS securities $ 16,956 $ 623 $ 4,048 $ 491 $ 21,004 $ 1,114 Total number of AFS securities in an unrealized loss position 1,692 The fair value, gross unrealized losses, the portion of OTTI recognized in OCI (in millions) and number of AFS securities where the fair value had declined and remained below amortized cost by greater than 20% were as follows: As of December 31, 2017 Number Fair Gross Unrealized of Value Losses OTTI Securities (1) Less than six months $ 156 $ 57 $ 1 26 Six months or greater, but less than nine months 2 1 - 4 Nine months or greater, but less than twelve months 12 6 - 7 Twelve months or greater 209 77 10 49 Total $ 379 $ 141 $ 11 86 As of December 31, 2016 Number Fair Gross Unrealized of Value Losses OTTI Securities (1) Less than six months $ 164 $ 49 $ 2 19 Nine months or greater, but less than twelve months 1 1 - 2 Twelve months or greater 358 166 10 62 Total $ 523 $ 216 $ 12 83 (1) We may reflect a security in more than one aging category based on various purchase dates. We regularly review our investment holdings for OTTI . Our gross unrealized losses, including the portion of OTTI recogni zed in OCI, on AFS securities de creased $669 million for the year ended December 31, 2017 . As discussed further below, we believe the unrealized loss position as of December 31, 2017 , did not represent OTTI as (i) we did not intend to sell these fixed maturity AFS securities; (ii) it is not more likely than not that we will be required to sell the fixed maturity AFS securities before recovery of their amortized cost basis; (iii) the estimated future cash flows were equal to or greater than the amortized cost basis of the debt securities; and (iv) we had the ability and intent to hold the equity AFS securities for a period of time sufficient for recovery . Based upon this evaluation as of December 31, 2017 , management believes we have the ability to generate adequate amounts of cash from our normal operations (e.g., insurance premiums and fees and investment income) to meet cash requirements with a prudent margin of safety without requiring the sale of our temporarily-impaired securities . As of December 31, 2017 , the unrealized losses associated with our corporate bond securities were attributable primarily to widening credit spreads and rising interest rates since purchase . We performed a detailed analysis of the financial performance of the underlying issuers and determined that we expected to recover the entire amortized cost for each temporarily-impaired security. As of December 31, 2017 , the unrealized losses associated with our MBS and ABS were attributable primarily to widening credit spreads and rising interest rates since purchase. We assessed for credit impairment using a cash flow model that incorporates key assumptions including default rates, severities and prepayment rates . We estimated losses for a security by forecasting the underlying loans in each transaction . The forecasted loan performance was used to project cash flows to the various tranches in the structure, as applicable . Our forecasted cash flows also considered, as applicable, independent industry analyst reports and forecasts and other independent market data . Based upon our assessment of the expected credit losses of the security given the performance of the underlying collateral compared to our subordination or other credit enhancement, we expected to recover the entire amortized cost of each temporarily- impaired security. As of December 31, 2017 , the unrealized losses associated with our hybrid and redeemable preferred securities were attributable primarily to wider credit spreads caused by illiquidity in the market and subordination within the capital structure, as well as credit risk of underlying issuers . For our hybrid and redeemable preferred securities, we evaluated the financial performance of the underlying issuers based upon credit performance and investment ratings and determined that we expected to recover th e entire amortized cost of each temporarily-impaired security. Changes in the amount of credit loss of OTTI recognized in net income (loss) where the portion related to other factors was recognized in OCI (in millions) on fixed maturity AFS securities were as follows: For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 411 $ 363 $ 360 Increases attributable to: Credit losses on securities for which an OTTI was not previously recognized 13 83 19 Credit losses on securities for which an OTTI was previously recognized 7 16 15 Decreases attributable to: Securities sold, paid down or matured (73 ) (51 ) (31 ) Balance as of end-of-year $ 358 $ 411 $ 363 During 2017 , 2016 and 2015 , we recorded credit losses on securities for which an OTTI was not previously recognized as we determined the cash flows expected to be collected would not be sufficient to recover the entire amortized cost basis of the debt security . The credit losses we recorded on securities for which an OTTI was not previously recognized were attributable primarily to one or a combination of the following reasons: · Failure of the issuer of the security to make scheduled payments; · Deterioration of creditworthiness of the issuer; · Deterioration of conditions specifically related to the security; · Deterioration of fundamentals of the industry in which the issuer operates; and · Deterioration of the rating of the security by a rating agency. We recognize the OTTI attributed to the noncredit portion as a separate component in OCI referred to as unrealized OTTI on AFS securities . Details of the amount of credit loss of OTTI recognized in net income (loss) for which a portion related to other factors was recognized in OCI (in millions), were as follows: As of December 31, 2017 Net Unrealized OTTI in Amortized Gain/(Loss) Fair Credit Cost Position Value Losses Corporate bonds $ 17 $ 7 $ 24 $ 31 ABS 173 26 199 102 RMBS 245 21 266 178 CMBS 13 2 15 39 CLOs 11 5 16 5 State and municipal bonds - - - 3 Total $ 459 $ 61 $ 520 $ 358 As of December 31, 2016 Net Unrealized OTTI in Amortized Gain/(Loss) Fair Credit Cost Position Value Losses Corporate bonds $ 80 $ 5 $ 85 $ 77 ABS 201 12 213 106 RMBS 310 6 316 183 CMBS 29 1 30 37 CLOs 11 3 14 5 State and municipal bonds 2 - 2 3 Total $ 633 $ 27 $ 660 $ 411 Trading Securities Trading securities at fair value (in millions) consisted of the following: As of December 31, 2017 2016 Fixed maturity securities: Corporate bonds $ 1,250 $ 1,275 ABS 15 19 U.S. government bonds 115 164 Foreign government bonds 23 23 RMBS 85 95 CMBS 2 2 CLOs 3 6 State and municipal bonds 17 17 Hybrid and redeemable preferred securities 23 23 Total trading securities $ 1,533 $ 1,624 The portion of the market adjustment for trading gains and losses recognized in realized gain (loss) that relate to trading securities still held as of December 31, 2017 , 2016 and 2015 , was $8 m illion, $(3) million and $ (96) m illion, respectively. Mortgage Loans on Real Estate Mortgage loans on real estate principally involve commercial real estate . The commercial loans are geographically diversified throughout the U.S. with the largest concentrations in California, which accounted for 21% and 20% , respectively, and Texas , which accounted for 12% and 11% , respectively, of mortgage loans on real estate as of December 31, 2017 and 2016. The following provides the current and past due composition of our mortgage loans on real estate (in millions): As of December 31, 2017 2016 Current $ 10,662 $ 9,762 60 to 90 days past due - - Greater than 90 days past due 3 - Valuation allowance associated with impaired mortgage loans on real estate (3 ) (2 ) Unamortized premium (discount) - 1 Total carrying value $ 10,662 $ 9,761 The number of impaired mortgage loans on real estate, each of which had an associated specific valuation allowance, and the carrying value of impaired mortgage loans on real estate (dollars in millions) were as follows: As of December 31, 2017 2016 Number of impaired mortgage loans on real estate 3 2 Principal balance of impaired mortgage loans on real estate $ 11 $ 7 Valuation allowance associated with impaired mortgage loans on real estate (3 ) (2 ) Carrying value of impaired mortgage loans on real estate $ 8 $ 5 The changes in the valuation allowance associated with impaired mortgage loans on real estate (in millions) were as follows: For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 2 $ 2 $ 3 Additions 1 - - Charge-offs, net of recoveries - - (1 ) Balance as of end-of-year $ 3 $ 2 $ 2 The average carrying value on the impaired mortgage loans on real estate (in millions) was as follows: For the Years Ended December 31, 2017 2016 2015 Average carrying value for impaired mortgage loans on real estate $ 6 $ 6 $ 17 Interest income recognized on impaired mortgage loans on real estate - - 1 Interest income collected on impaired mortgage loans on real estate - - 1 As described in Note 1, we use the loan-to-value and debt-service coverage ratios as credit quality indicators for our mortgage loans on real estate , which were as follows (dollars in millions): As of December 31, 2017 As of December 31, 2016 Debt- Debt- Service Service Carrying % of Coverage Carrying % of Coverage Loan-to-Value Ratio Value Total Ratio Value Total Ratio Less than 65% $ 9,563 89.7% 2.27 $ 8,604 88.1% 2.16 65% to 74% 1,000 9.4% 1.94 1,009 10.3% 1.87 75% to 100% 91 0.8% 0.97 143 1.5% 0.86 Greater than 100% 8 0.1% 0.82 5 0.1% 1.04 Total mortgage loans on real estate $ 10,662 100.0% $ 9,761 100.0% Alternative Investments As of December 31, 2017 and 201 6 , alternative investments included investments in 221 and 202 different partnerships, respectively, and the portfolios represented approximately 1% of our overall invested assets. Net Investment Income The major categories of net investment income (in millions) on our Consolidated Statements of Comprehensive Income (Loss) were as follows: For the Years Ended December 31, 2017 2016 2015 Fixed maturity AFS securities $ 4,048 $ 4,019 $ 3,981 Equity AFS securities 12 11 9 Trading securities 88 94 102 Mortgage loans on real estate 433 413 385 Real estate 1 1 1 Policy loans 134 139 150 Invested cash 11 12 3 Commercial mortgage loan prepayment and bond make-whole premiums 138 115 98 Alternative investments 165 75 88 Consent fees 6 5 5 Other investments 5 4 6 Investment income 5,041 4,888 4,828 Investment expense (281 ) (257 ) (217 ) Net investment income $ 4,760 $ 4,631 $ 4,611 Realized Gain (Loss) Related to Certain Investments The detail of the realized gain (loss) related to certain investments (in millions) was as follows: For the Years Ended December 31, 2017 2016 2015 Fixed maturity AFS securities: (1) Gross gains $ 17 $ 65 $ 41 Gross losses (63 ) (227 ) (94 ) Equity AFS securities: Gross gains 6 8 3 Gross losses - (1 ) - Gain (loss) on other investments (10 ) (62 ) (7 ) Associated amortization of DAC, VOBA, DSI and DFEL and changes in other contract holder funds (21 ) (24 ) (26 ) Total realized gain (loss) related to certain investments, pre-tax $ (71 ) $ (241 ) $ (83 ) (1) These amounts are represented net of related fair value hedging activity. See Note 6 for more information. Details underlying write-downs taken as a result of OTTI that were recognized in net income (loss) and included in realized gain (loss) on AFS securities above and the portion of OTTI recognized in OCI (in millions) were as follows: For the Years Ended December 31, 2017 2016 2015 OTTI Recognized in Net Income (Loss) Fixed maturity securities: Corporate bonds $ (13 ) $ (80 ) $ (42 ) ABS (2 ) (5 ) (6 ) RMBS (2 ) (10 ) (7 ) CMBS (2 ) (1 ) (1 ) State and municipal bonds (1 ) (3 ) - Total fixed maturity securities (20 ) (99 ) (56 ) Equity securities - (1 ) - Gross OTTI recognized in net income (loss) (20 ) (100 ) (56 ) Associated amortization of DAC, VOBA, DSI and DFEL 2 - 6 Net OTTI recognized in net income (loss), pre-tax $ (18 ) $ (100 ) $ (50 ) Portion of OTTI Recognized in OCI Gross OTTI recognized in OCI $ - $ 53 $ 29 Change in DAC, VOBA, DSI and DFEL - (12 ) (4 ) Net portion of OTTI recognized in OCI, pre-tax $ - $ 41 $ 25 Determination of Credit Losses on Corporate Bonds and ABS As of December 31, 2017 and 2016 , we reviewed our corporate bond and ABS portfolios for potential shortfall in contractual principal and interest based on numerous subjective and objective inputs . The factors used to determine the amount of credit loss for each individual security, include, but are not limited to, near term risk, substantial discrepancy between book and market value, sector or company-specific volatility, negative operating trends and trading levels wider than peers . Credit ratings express opinions about the credit quality of a security . Securities rated investment grade, that is those rated BBB- or higher by Standard & Poor’s (“S&P”) Rating Services or Baa3 or higher by Moody’s Investors Service (“Moody’s”), are generally considered by the rating agencies and market participants to be low credit risk . As of December 31, 2017 and 2016, 96 % and 95% , respectively, of the fair value of our corporate bond portfolio was rated investment grade. As of December 31, 2017 and 2016, the portion of our corporate bond portfolio rated below investment grade had an amortized cost of $ 3.4 billion and $3.7 billion, respectively, and a fair value of $3.4 billion and $ 3.6 billion, respectively. As of December 31, 2017 and 2016, 98 % and 96% , respectively, of the fair value of our ABS portfolio was rated investment grade. As of December 31, 2017 and 2016, the portion of our ABS portfolio rated below investment grade had an amortized cost of $ 43 million and $ 87 million, respectively, and a fair value of $ 41 million and $73 million, respectively . Based upon the analysis discussed above, we believed as of December 31, 2017 and 201 6 , that we would recover the amortized cost of each investment grade corporate bond and ABS security. Determination of Credit Losses on MBS As of December 31, 2017 and 201 6 , default rates were projected by considering underlying MBS loan performance and collateral type . Projected default rates on existing delinquencies vary between 10% to 100% depending on loan type and severity of delinquency status . In addition, we estimate the potential contributions of currently performing loans that may become delinquent in the future based on the change in delinquencies and loan liquidations experienced in the recent history . Finally, we develop a default rate timing curve by aggregating the defaults for all loans in the pool (delinquent loans, foreclosure and real estate owned and new delinquencies from currently performing loans) and the associated loan-level loss severities . We use certain available loan characteristics such as lien status, loan sizes and occupancy to estimate the loss severity of loans . Second lien loans are assigned 100% severity, if defaulted . For first lien loans, we assume a minimum of 30% severity with higher severity assumed for investor properties and further adjusted by housing price assumptions . With the default rate timing curve and loan-level loss severity, we derive the future expected credit losses. Payables for Collateral on Investments The carrying value of the payables for collateral on investments (in millions) included on our Consolidated Balance Sheets and the fair value of the related investments or collateral consisted of the following: As of December 31, 2017 As of December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value Collateral payable for derivative investments (1) $ 701 $ 701 $ 813 $ 813 Securities pledged under securities lending agreements (2) 222 213 217 209 Securities pledged under repurchase agreements (3) 531 554 530 555 Investments pledged for Federal Home Loan Bank of Indianapolis (“FHLBI”) (4) 2,900 4,235 3,350 4,947 Total payables for collateral on investments $ 4,354 $ 5,703 $ 4,910 $ 6,524 (1) We obtain collateral based upon contractual provisions with our counterparties . These agreements take into consideration the counterparties’ credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that if exceeded result in the receipt of cash that is typically invested in cash and invested cash . See Note 6 for additional information . (2) Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets . We generally obtain collateral in an amount equal to 102 % and 105 % of the fair value of the domestic and foreign securities, respectively . We value collateral daily and obtain additional collateral when deemed appropriate . The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities. (3) Our pledged securities under repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets . We obtain collateral in an amount equal to 95 % of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary . The cash received in our repurchase program is typically invested in fixed maturity AFS securities. (4) Our pledged investments for FHLBI are included in fixed maturity AFS securities and mortgage loans on real estate on our Consolidated Balance Sheets . The collateral requirements are generally 105 % to 115 % of the fair value for fixed maturity AFS securities and 155 % to 175 % of the fair value for mortgage loans on real estate . The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities. Increase (decrease) in payables for collateral on investments (in millions) consisted of the following: For the Years Ended December 31, 2017 2016 2015 Collateral payable for derivative investments $ (112 ) $ (481 ) $ (283 ) Securities pledged under securities lending agreements 5 (25 ) 38 Securities pledged under repurchase agreements 1 (144 ) 69 Investments pledged for FHLBI (450 ) 995 430 Total increase (decrease) in payables for collateral on investments $ (556 ) $ 345 $ 254 We have elected not to offset our repurchase agreements and securities lending transactions in our financial statements . The remaining contractual maturities of repurchase agreements and securities lending transactions accounted for as secured borrowings were as follows: As of December 31, 2017 Overnight and Continuous Up to 30 Days 30 – 90 Days Greater Than 90 Days Total Repurchase Agreements Corporate bonds $ - $ 100 $ 281 $ 150 $ 531 Total - 100 281 150 531 Securities Lending Corporate bonds 222 - - - 222 Total 222 - - - 222 Total gross secured borrowings $ 222 $ 100 $ 281 $ 150 $ 753 As of December 31, 2016 Overnight and Continuous Up to 30 Days 30 – 90 Days Greater Than 90 Days Total Repurchase Agreements Corporate bonds $ - $ - $ 384 $ 146 $ 530 Total - - 384 146 530 Securities Lending Corporate bonds 212 - - - 212 Foreign government bonds 5 - - - 5 Total 217 - - - 217 Total gross secured borrowings $ 217 $ - $ 384 $ 146 $ 747 We accept collateral in the form of securities in connection with repurchase agreements . In instances where we are permitted to sell or re-pledge the securities received, we report the fair value of the collateral received and a related obligation to return the collateral in the financial statements . In addition, we receive securities in connection with securities borrowing agreements which we are per mitted to sell or re-pledge. As of December 31, 201 7 , the fair value o f all collateral received that we are permitted to sell or re-pledge was $175 m illion . As of December 31, 2017, we have re-pledged $174 million of this collateral to cover initial margin on certain derivative investments. Investment Commitments As of December 31, 2017 , our investment commitments were $ 1.3 billion, which included $ 752 million of LPs, $ 196 million of private placement securities and $ 320 million of mortgage loans on real estate. Concentrations of Financial Instruments As of December 31, 2017 and 201 6 , our most significant investments in one issuer were our investments in securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $ 1.2 billion and $1.5 billion , respectively, or 1% of our invested assets portfolio, and our investments in securities issued by the Federal National Mortgage Association with a fair value of $930 m illion and $ 1.1 billion , respectively, or 1 % of our invested assets portfolio . These concentrations include both AFS and trading securities. As of December 31, 2017 and 201 6 , our most significant investments in one industry were our investment s in securities in the consumer non-cyclical industry with a fair value of $14.3 billion and $13.0 billion , respectively, or 13 % and 12% , respectively, of our invested assets portfolio, and our investment s in securities in the utilities industry with a fair value of $13.8 billion and $ 12.8 billion, respectively, or 12 % of our invested assets portfolio . These concentrations include both AFS and trading securities. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments [Abstract] | |
Derivative Instruments | 6. Derivative Instruments We maintain an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings that are caused by interest rate risk, foreign currency exchange risk, equity market risk, basis risk and credit risk . We assess these risks by continually identifying and monitoring changes in our exposures that may adversely affect expected future cash flows and by evaluating hedging opportunities . Derivative activities are monitored by various management committees . The committees are responsible for overseeing the implementation of various hedging strategies that are developed through the analysis of financial simulation models and other internal and industry sources . The resulting hedging strategies are incorporated into our overall risk management strategies . See Note 1 for a detailed discussion of the accounting treatment for derivative instruments . See Note 20 for additional disclosures related to the fair value of our derivative instruments and Note 4 for derivative instruments related to our consolidated VIEs. Interest Rate Contracts We use derivative instruments as part of our interest rate risk management strategy . These instruments are economic hedges unless otherwise noted and include: Forward-Starting Interest Rate Swaps We use forward-starting interest rate swaps designated and qualifying as cash flow hedges to hedge our exposure to interest rate fluctuations related to the forecasted purchase s of certain assets . Interest Rate Cap Corridor s We use interest rate cap corridors to provide a level of protection from the effect of rising interest rates for certain life insurance products and annuity contracts . Interest rate cap corridors involve purchasing an interest rate cap at a specific cap rate and selling an interest rate cap with a higher cap rate . For each corridor, the amount of quarterly payments, if any, is determined by the rate at which the underlying index rate resets above the original capped rate . The corridor limits the benefit the purchaser can receive as the related interest rate index rises above the higher capped rate . There is no additional liability to us other than the purchase price associated with the interest rate cap corridor . Interest Rate Futures We use interest rate futures contracts to hedge the liability exposure on certain options in variable annuity products . These futures contracts require payment between our counterparty and us on a daily basis for changes in the futures index price. Interest Rate Swap Agreements We use interest rate swap agreements to hedge the liability exposure on certain options in variable annuity products. We also use interest rate swap agreements designated and q ualifying as cash flow hedges to hedge the interest rate risk of floating-rate bond coupon payments by replicating a fixed-rate bond . Finally, we use interest rate swap agreements designated and qualifying as fair value hedges to hedge against changes in the fair value of certain fixed maturity securities due to interest rate risks. Reverse Treasury Locks We use reverse treasury locks designated and qualifying as cash flow hedges to hedge the interest rate exposure related to the anticipated purchase of fixed-rate securities . These derivatives are primarily structured to hedge interest rate risk inherent in the assumptions used to price certain liabilities . Foreign Currency Contracts We use derivative instruments as part of our foreign currency risk management strategy . These instruments are economic hedges unless otherwise noted and include: Currency Futures We use currency futures to hedge foreign exchange risk associated with certain options in variable annuity products . Currency futures exchange one currency for another at a specified date in the future at a specified exchange rate . Foreign Currency Swaps We use foreign currency swaps designated and qualifying as cash flow hedges, to hedge foreign exchange risk of investments in fixed maturity securities denominated in foreign currencies . A foreign currency swap is a contractual agreement to exchange one currency for another at specified dates in the future at a specified exchange rate. Equity Market Contracts We use derivative instruments as part of our equity market risk management strategy that are economic hedges and include: Call Options Based o n the S&P 500 Index® Our indexed annuity and IUL contracts permit the holder to elect an interest rate return or an equity market component, where interest credited to the contracts is linked to the performance of the S&P 500 Index ® (“ S&P 500 ”). Contract holders may elect to rebalance index options at renewal dates, either annually or biannually . As of each renewal date, we have the opportunity to re-price the indexed component by establishing participation rates, caps, spreads and specified rates, subject to contractual guarantees . We purchase call options that are highly correlated to the portfolio allocation decisions of our contract holders, such that we are economically hedged with respect to equity returns for the current reset period . Consumer Price Index Swaps We use consumer price index swaps to hedge the liability exposure on certain options in fixed annuity products . Consumer price index swaps are contracts entered into at no cost and whose payoff is the difference between the consumer price index inflation rate and the fixed-rate determined as of inception. Equity Futures We use equity futures contracts to hedge the liability exposure on certain options in variable annuity products . These futures contracts require payment between our counterparty and us on a daily basis for changes in the futures index price. Put Options We use put options to hedge the liability exposure on certain options in variable annuity products . Put options are contracts that require counterparties to pay us at a specified future date the amount, if any, by which a specified equity index is less than the strike rate stated in the agreement, applied to a notional amount . Total Return Swaps W e use total return swaps to hedge the liability exposure on certain options in variable annuity products . In addition, w e use total return swaps to hedge a portion of the liability related to our deferred compensation plans . We receive the total return on a portfolio of indexes and pay a floating-rate of interest . Variance Swaps We use variance swaps to hedge the liability exposure on certain options in variable annuity products . Variance swaps are contra cts entered into at no cost whose payoff is the difference between the realized variance rate of an underlying index and the fixed variance rate determined as of inception of the contract . Credit Contracts We use derivative instruments as part of our credit risk management strategy that are economic hedges and include: Credit Default Swaps – Buying Protection We use credit default swaps to hedge the liability exposure on certain options in variable annuity products. We buy credit default swaps to hedge against a drop in bond prices due to credit concerns of certain bond issuers. A credit default swap allows us to put the bond back to the counterparty at par upon a default event by the bond issuer. A default event is defined as bankruptcy, failure to pay, obligation acceleration or restructuring. Credit Default Swaps – Selling Protection We use credit default swaps to hedge the liability exposure on certain options in variable annuity products. We sell credit default swaps to offer credit protection to contract holders and investors . The credit default swaps hedge the contract holders and investors against a drop in bond prices due to credit concerns of certain bond issuers . A credit default swap allows the investor to put the bond back to us at par upon a default event by the bond issuer . A default event is defined as bankruptcy, failure to pay, obligation acceleration or restructuring . Embedded Derivatives We have embedded derivatives that include: GLB Reserves Embedded Derivatives We are exposed to risk and income statement volatility caused by changes in the equity markets, interest rates and volatility associated with GLBs offered in our variable annuity products, including products with GWB and GIB features. These GLB features are reinsured among various reinsurance counterparties on either a Modco or coinsurance basis. We cede a portion of the GLB features to LNBAR on a funds withheld modified coinsurance basis. The funds withheld arrangement includes a dynamic hedging strategy designed to mitigate selected risk. Changes in the value of the hedge contracts due to changes in equity markets, interest rates and implied volatilities hedge the changes in embedded derivative GLB reserves assumed by LNBAR caused by those same factors. The hedge positions are rebalanced based upon changes in these factors as needed. While we actively manage the hedge positions, these hedge positions may not be totally effective in offsetting changes in the embedded derivative reserve assumed by LNBAR due to, among other things, differences in timing between when a market exposure changes and corresponding changes to the hedge positions, extreme swings in the equity markets and interest rates, market volatility, contract holder behavior, divergence between the performance of the underlying funds and the hedging indices, divergence between the actual and expected performance of the hedge instruments and our ability to purchase hedging instruments at prices consistent with the desired risk and return trade-off. However, the hedging results do not impact LNL due to a funds withheld agreement with LNBAR, which causes the financial impact of the derivatives, as well as the cash flow activity, to be reflected on LNBAR. Certain features of these guarantees have elements of both insurance benefits accounted for under the Financial Services – Insurance – Claim Costs and Liabilities for Future Policy Benefits Subtopic of the FASB ASC (“benefit reserves”) and embedded derivatives accounted for under the Derivatives and Hedging and the Fair Value Measurements and Disclosures Topics of the FASB ASC (“embedded derivative reserves”). We calculate the value of the benefit reserves and the embedded derivative reserves based on the specific characteristics of each GLB feature. Indexed Annuity and IUL Contracts Embedded Derivatives Our indexed annuity and IUL contracts permit the holder to elect an interest rate return or an equity market component, where interest credited to the contracts is linked to the performance of the S&P 500 . Contract holders may elect to rebalance index options at renewal dates, either annually or biannually . As of each renewal date, we have the opportunity to re-price the indexed component by establishing participation rates, caps, spreads and specified rates, subject to contractual guarantees . We purchase S&P 500 call options that are highly correlated to the portfolio allocation decisions of our contract holders, such that we are economically hedged with respect to equity returns for the current reset period . Reinsurance Related Embedded Derivatives We have certain modified coinsurance arrangements and coinsurance with funds withheld reinsurance arrangements with embedded derivatives related to the withheld assets of the related funds . These derivatives are considered total return swaps with contractual returns that are attributable to various assets and liabilities associated with these reinsurance arrangements . We have derivative instruments with off-balance-sheet risks whose notional or contract amounts exceed the related credit exposure . Outstanding derivative instruments with off -balance-sheet risks (in millions) were as follows: As of December 31, 2017 As of December 31, 2016 Notional Fair Value Notional Fair Value Amounts Asset Liability Amounts Asset Liability Qualifying Hedges Cash flow hedges: Interest rate contracts (1) $ 1,544 $ 45 $ 16 $ 2,089 $ 68 $ 77 Foreign currency contracts (1) 1,804 79 79 1,177 153 10 Total cash flow hedges 3,348 124 95 3,266 221 87 Fair value hedges: Interest rate contracts (1) 563 - 174 637 - 182 Non-Qualifying Hedges Interest rate contracts (1) 72,937 657 127 70,290 985 701 Foreign currency contracts (1) 22 - - 14 - - Equity market contracts (1) 30,918 562 557 28,142 542 616 Credit contracts (1) 52 - - 66 - - Embedded derivatives: GLB direct (2) (3) - 903 - - - 371 GLB ceded (2) (3) - 51 954 - 371 - Reinsurance related (4) - - 51 - 58 - Indexed annuity and IUL contracts (2) (5) - 11 1,418 - - 1,139 Total derivative instruments $ 107,840 $ 2,308 $ 3,376 $ 102,415 $ 2,177 $ 3,096 (1) Reported in derivative investments and other liabilities on our Consolidated Balance Sheets. (2) Reported in other assets on our Consolidated Balance Sheets. (3) Reported in other liabilities on our Consolidated Balance Sheets. (4) Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets. (5) Reported in future contract benefits on our Consolidated Balance Sheets. Beginning in the first quarter 2017, consistent with changes enacted by the Chicago Mercantile Exchange (“CME”), the Company offset the variation margin payments with the derivative balances that are cleared through CME. The maturity of the notional amounts of derivative instruments (in millions) was as follows: Remaining Life as of December 31, 2017 Less Than 1 – 5 6 – 10 11 – 30 Over 30 1 Year Years Years Years Years Total Interest rate contracts (1) $ 7,748 $ 20,953 $ 31,378 $ 14,965 $ - $ 75,044 Foreign currency contracts (2) 22 247 423 1,090 44 1,826 Equity market contracts 18,746 9,520 485 15 2,152 30,918 Credit contracts - 52 - - - 52 Total derivative instruments with notional amounts $ 26,516 $ 30,772 $ 32,286 $ 16,070 $ 2,196 $ 107,840 (1) As of December 31, 2017 , the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was February 2047 . (2) As of December 31, 2017 , the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049 . The change in our unrealized gain (loss) on derivative instruments in A OCI (in millions) was as follows: For the Years Ended December 31, 2017 2016 2015 Unrealized Gain (Loss) on Derivative Instruments Balance as of beginning-of-year $ 93 $ 157 $ 127 Other comprehensive income (loss): Unrealized holding gains (losses) arising during the period: Cash flow hedges: Interest rate contracts 43 (165 ) (202 ) Foreign currency contracts 20 (10 ) 17 Change in foreign currency exchange rate adjustment (137 ) 96 48 Change in DAC, VOBA, DSI and DFEL 1 2 3 Income tax benefit (expense) 26 27 46 Less: Reclassification adjustment for gains (losses) included in net income (loss): Cash flow hedges: Interest rate contracts (1) 4 5 (190 ) Interest rate contracts (2) - 1 - Foreign currency contracts (1) 18 11 6 Foreign currency contracts (2) 9 7 - Associated amortization of DAC, VOBA, DSI and DFEL (2 ) (2 ) 2 Income tax benefit (expense) (10 ) (8 ) 64 Balance as of end-of-period $ 27 $ 93 $ 157 (1) The OCI offset is reported within net investment income on our Consolidated Statements of Comprehensive Income (Loss). (2) The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). The gains (losses) on derivative instruments (in millions) recorded within income (loss) from continuing operations on our Consolidated Statements of Comprehensive Income (Loss) were as follows: For the Years Ended December 31, 2017 2016 2015 Qualifying Hedges Cash flow hedges: Interest rate contracts (1) $ 4 $ 5 $ 8 Interest rate contracts (2) - 1 - Foreign currency contracts (1) 18 11 6 Foreign currency contracts (2) 9 7 - Total cash flow hedges 31 24 14 Fair value hedges: Interest rate contracts (1) (23 ) (28 ) (30 ) Interest rate contracts (2) 7 16 (198 ) Total fair value hedges (16 ) (12 ) (228 ) Non-Qualifying Hedges Interest rate contracts (2) 103 181 304 Foreign currency contracts (2) - (14 ) (11 ) Equity market contracts (2) (1,427 ) (1,253 ) (118 ) Equity market contracts (3) 28 12 1 Credit contracts (2) 1 (5 ) (6 ) Embedded derivatives: Reinsurance related (2) (141 ) (57 ) 221 Indexed annuity and IUL contracts (2) (400 ) (120 ) (57 ) Total derivative instruments $ (1,821 ) $ (1,244 ) $ 120 (1) Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss). (2) Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). (3) Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss). Gains (losses) recognized as a component of OCI (in millions) on derivative instruments designated and qualifying as cash flow hedges were as follows: For the Years Ended December 31, 2017 2016 2015 Offset to net investment income $ 22 16 14 Offset to realized gain (loss) 9 8 - As of December 31, 2017 , $ 28 million of the deferred net gains ( losses ) on derivative instruments in A OCI were expected to be reclassified to earnings during the next 12 months . This reclassification would be due primarily to interest rate variances related to our interest rate swap agreements. For the years ended December 31, 2017 and 2016 , there were no material reclassifications to earnings due to hedged firm commitments no longer deemed probable or due to hedged forecasted transactions that had not occurred by the end of the originally specified time period. Information related to our credit default swap s for which we are the seller (dollars in millions) was as follows: As of December 31, 2017 Credit Reason Nature Rating of Number Maximum for of Underlying of Fair Potential Credit Contract Type Maturity Entering Recourse Obligation (1) Instruments Value (2) Payout Basket credit default swaps 12/20/2022 (3) (4) BBB+ 1 $ 1 $ 52 1 $ 1 $ 52 As of December 31, 2016 Credit Reason Nature Rating of Number Maximum for of Underlying of Fair Potential Credit Contract Type Maturity Entering Recourse Obligation (1) Instruments Value (2) Payout Single name credit default swaps 3/20/2017 (5) (6) (4) BBB+ 2 - 40 2 $ - $ 40 (1) Represents average credit ratings based on the midpoint of the applicable ratings among Moody's, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings. (2) Broker quotes are used to determine the market value of our credit default swaps. (3) Credit default swaps were entered into in order to hedge the liability exposure on certain variable annuity products. (4) Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract. (5) These credit default swaps were sold to a counterparty of the conso lidated VIEs discussed in Note 4. (6) Credit default swaps were entered into in order to generate income by providing default protection in return for a quarterly payment. Details underlying the associated collateral of our credit default swaps for which we are the seller if credit risk- related contingent features w ere triggered (in millions) were as follows: As of As of December 31, December 31, 2017 2016 Maximum potential payout $ 52 $ 40 Less: Counterparty thresholds - - Maximum collateral potentially required to post $ 52 $ 40 Certain of our credit default swap agreements contain contractual provisions that allow for the netting of collateral with our counterparties related to all of our collateralized financing transactions that we have outstanding . If these netting agreements were not in place, we would have been required to post collateral if the market value was less than zero. Credit Risk We are exposed to credit loss es in the event of non-performance by our counterparties on various derivative contracts and reflect assumptions regarding the credit or NPR . The NPR is based upon assumptions for each counterparty’s credit spread over the estimated weighted average life of the counterparty exposure , less collateral held . As of December 31, 2017 , the NPR adjustment was less than $ 1 million . The credit risk associated with such agreements is minimized by entering into agreements with financial institutions with long-standing, superior performance records . Additionally, we maintain a policy of requiring derivative contracts to be governed by an International Swaps and Derivatives Association (“ISDA”) Master Agreement . We are required to maintain minimum ratings as a matter of routine practice in negotiating ISDA agreements . Under some ISDA agreements, we and LLANY have agreed to maintain certain financial strength or claims-paying ratings. A downgrade below these levels could result in termination of derivative contracts, at which time any amounts payable by us would be dependent on the market value of the underlying derivative contracts . In certain transactions, we and the counterparty have entered into a credit support annex requiring either party to post collateral when net exposures exceed pre-determined thresholds . These thresholds vary by counterparty and credit rating . The amount of such exposure is essentially the net replacement cost or market value less collateral held for such agreements with each counterparty if the net market value is in our favor . As of December 31, 2017, and December 31, 2016, our exposure was zero and $5 million, respectively. The amounts recognized (in millions) by S&P credit rating of counterparty, for which we had the right to reclaim cash collateral or were obligated to return cash collateral, were as follows: As of December 31, 2017 As of December 31, 2016 Collateral Collateral Collateral Collateral Posted by Posted by Posted by Posted by S&P Counter- LNL Counter- LNL Credit Party (Held by Party (Held by Rating of (Held by Counter- (Held by Counter- Counterparty LNL) Party) LNL) Party) AA- $ 116 $ (1 ) $ 53 $ (32 ) A+ 178 (453 ) 10 (217 ) A 170 (48 ) 394 (335 ) A- 237 - 67 - BBB+ - (4 ) 289 - $ 701 $ (506 ) $ 813 $ (584 ) Balance Sheet Offsetting Information related to the effects of offsetting on our Consolidated Balance Sheets (in millions) was as follows: As of December 31, 2017 Embedded Derivative Derivative Instruments Instruments Total Financial Assets Gross amount of recognized assets $ 1,082 $ 965 $ 2,047 Gross amounts offset (237 ) - (237 ) Net amount of assets 845 965 1,810 Gross amounts not offset: Cash collateral (701 ) - (701 ) Net amount $ 144 $ 965 $ 1,109 Financial Liabilities Gross amount of recognized liabilities $ 1,037 $ 2,423 $ 3,460 Gross amounts offset (261 ) - (261 ) Net amount of liabilities 776 2,423 3,199 Gross amounts not offset: Cash collateral (506 ) - (506 ) Net amount $ 270 $ 2,423 $ 2,693 As of December 31, 2016 Embedded Derivative Derivative Instruments Instruments Total Financial Assets Gross amount of recognized assets $ 1,211 $ 429 $ 1,640 Gross amounts offset (311 ) - (311 ) Net amount of assets 900 429 1,329 Gross amounts not offset: Cash collateral (813 ) - (813 ) Net amount $ 87 $ 429 $ 516 Financial Liabilities Gross amount of recognized liabilities $ 1,274 $ 1,510 $ 2,784 Gross amounts offset (536 ) - (536 ) Net amount of liabilities 738 1,510 2,248 Gross amounts not offset: Cash collateral (584 ) - (584 ) Net amount $ 154 $ 1,510 $ 1,664 |
Federal Income Taxes
Federal Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Federal Income Taxes [Abstract] | |
Federal Income Taxes | 7 . Federal Income Taxes The federal income tax expense (benefit) on continuing operations (in millions) was as follows: For the Years Ended December 31, 2017 2016 2015 Current $ 118 $ 25 $ 71 Deferred (1,405 ) 242 224 Federal income tax expense (benefit) $ (1,287 ) $ 267 $ 295 A reconciliation of the effective tax rate differences (in millions) was as follows: For the Years Ended December 31, 2017 2016 2015 Tax rate times pre-tax income $ 256 $ 504 $ 514 Effect of: Tax-preferred investment income (280 ) (196 ) (192 ) Tax credits (29 ) (28 ) (26 ) Change in uncertain tax positions (17 ) (11 ) 1 Excess tax benefits from share-based compensation (8 ) (4 ) - Goodwill impairment 316 - - Deferred tax impact from the Tax Cuts and Jobs Act (1,526 ) - - Other items 1 2 (2 ) Federal income tax expense (benefit) $ (1,287 ) $ 267 $ 295 Effective tax rate -176% 19% 20% The effective tax rate is the ratio of tax expense (benefit) over pre-tax income (loss) . The tax-preferred investment income relates primarily to the separate account dividends-received deduction . The tax benefit associated with the separate account dividends-received deduction was $264 m illion , $175 million and $188 million for the years ended December 31, 2017 , 2016 and 2015 . Tax benefi ts for uncertain tax positions for the year ended December 31, 2017, were primarily attributable to the release of reserves for tax contingencies associated with a prior ta x year that closed during 2017. As a result of the enactment of the Tax Act on December 22, 2017, we remeasured our existing deferred tax balances at the new 21% marginal corporate income tax rate and recognized $1.5 billion in tax benefit in 2017. We continue to review and analyze the provisions of the Tax Act, including the actual and potential impact of the reduction in the U.S. federal corporate income tax rate and the impact of specific life insurance provisions on our financial statements. The impact of the Tax Act may differ from existing amounts due to, among other things, changes in interpretations and assumptions we have made and guidance that may be issued by regulatory authorities. The Securities and Exchange Commission has issued rules that allow for a one year measurement period after the enactment of the Tax Act to finalize calculations and recording of the related tax impacts. While we do not anticipate any significant changes to the amounts recorded as of December 31, 2017, any adjustments to amounts recorded as a result of the Tax Act will be made during 2018. We file with a consolidated group ; however , we calculate our tax expense (benefit) on a separate company basis . The federal income tax asset (liability) (in millions) was as follows: As of December 31, 2017 2016 Current $ 206 $ 164 Deferred (2,391 ) (3,062 ) Total federal income tax asset (liability) $ (2,185 ) $ (2,898 ) Significant components of our deferred tax assets and liabilities (in millions) were as follows: As of December 31, 2017 2016 Deferred Tax Assets Future contract benefits and other contract holder funds $ 580 $ 986 Reinsurance related embedded derivative asset 11 - Compensation and benefit plans 123 187 Tax credits 76 85 Other 8 19 Total deferred tax assets $ 798 $ 1,277 Deferred Tax Liabilities DAC $ 1,112 $ 2,038 VOBA 105 306 Net unrealized gain on AFS securities 1,579 1,596 Net unrealized gain on trading securities 39 65 Intangibles 9 20 Investment activity 118 125 Deferred gain on business sold through reinsurance 35 51 Reinsurance related embedded derivative asset - 20 Other 192 118 Total deferred tax liabilities $ 3,189 $ 4,339 Net deferred tax asset (liability) $ (2,391 ) $ (3,062 ) As of December 31, 2017 , we had $ 73 million of alternative minimum tax credits that are not su bject to expiration and $3 million of research and development credits that expire in 2036 . Although realization is not assured, management believes that it is more likely than not that we will realize the benefits of our deferred tax assets, and, accordingly, no valuation allowance has been recorded. As of December 31, 2017 and 2016 , $ 11 million and $ 1 million , respectively, of our unrecognized tax benefits presented below, if recognized, would have affected our income tax expense and our effective tax rate . We are not aware of any events for which it is likely that unrecognized tax benefits will significantly increase or decrease within the next year . A reconciliation of the unrecognized tax benefits (in millions) was as follows: For the Years Ended December 31, 2017 2016 Balance as of beginning-of-year $ 1 $ 10 Increases for prior year tax positions 9 - Increases for current year tax positions 1 1 Decreases for expiring statutes - (10 ) Balance as of end-of-year $ 11 $ 1 We recognize interest and penalties accrued, if any, related to unrecognized tax benefits as a component of tax expense . For the years ended December 31, 2017 , 2016 and 2015 , we recognized interest and penalty expense (benefit) relate d to uncertain tax positions of zero , $(2) million and $1 million , respectively . We had accrued interest and penalty expense related to the unrecognized tax benefits of zero as of December 31, 2017 and 2016 . We are subject to examination by U.S. federal, state, local and non- U.S . income authorities. We are currently not under examination by the Internal Revenue Service; however, tax years 2014 and forward remain open. We are currently under examination by several state and local taxing jurisdictions; however, we do not expect these examinations will materially impact us. |
DAC, VOBA, DSI and DFEL
DAC, VOBA, DSI and DFEL | 12 Months Ended |
Dec. 31, 2017 | |
DAC, VOBA, DSI and DFEL [Abstract] | |
DAC, VOBA, DSI and DFEL | 8. DAC, VOBA, DSI and DFEL Changes in DAC (in millions) were as follows: For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 8,269 $ 8,620 $ 7,527 Business acquired (sold) through reinsurance - - 38 Deferrals 1,345 1,339 1,483 Amortization, net of interest: Amortization, excluding unlocking, net of interest (922 ) (879 ) (813 ) Unlocking 61 (276 ) (232 ) Adjustment related to realized (gains) losses (55 ) (51 ) (44 ) Adjustment related to unrealized (gains) losses (789 ) (484 ) 661 Balance as of end-of-year $ 7,909 $ 8,269 $ 8,620 Changes in VOBA (in millions) were as follows: For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 874 $ 873 $ 628 Business acquired (sold) through reinsurance - - (22 ) Deferrals 7 3 8 Amortization: Amortization, excluding unlocking (105 ) (105 ) (128 ) Unlocking (48 ) 36 (82 ) Accretion of interest (1) 52 52 56 Adjustment related to realized (gains) losses (1 ) (2 ) (1 ) Adjustment related to unrealized (gains) losses (280 ) 17 414 Balance as of end-of-year $ 499 $ 874 $ 873 (1) The interest accrual rates utilized to calculate the accretion of interest ranged from 4.2% to 6.9% . Estimated future amortization of VOBA, net of interest (in millions), as of December 31, 2017 , was as follows: 2018 $ 49 2019 51 2020 65 2021 65 2022 61 Changes in DSI (in millions) were as follows: For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 293 $ 301 $ 285 Deferrals 29 25 29 Amortization, net of interest: Amortization, excluding unlocking, net of interest (30 ) (28 ) (33 ) Unlocking (4 ) (2 ) 2 Adjustment related to realized (gains) losses (2 ) (2 ) (1 ) Adjustment related to unrealized (gains) losses 1 (1 ) 19 Balance as of end-of-year $ 287 $ 293 $ 301 Changes in DFEL (in millions) were as follows: For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 1,855 $ 1,923 $ 1,365 Deferrals 753 628 537 Amortization, net of interest: Amortization, excluding unlocking, net of interest (383 ) (345 ) (299 ) Unlocking (3 ) (63 ) (66 ) Adjustment related to realized (gains) losses (18 ) (11 ) (8 ) Adjustment related to unrealized (gains) losses (775 ) (277 ) 394 Balance as of end-of-year $ 1,429 $ 1,855 $ 1,923 |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2017 | |
Reinsurance [Abstract] | |
Reinsurance | 9. Reinsurance The following summarizes reinsurance amounts (in millions) recorded on our Consolidated Statements of Comprehensive Income (Loss), excluding amounts attributable to the indemnity reinsurance transaction with Swiss Re: For the Years Ended December 31, 2017 2016 2015 Direct insurance premiums and fee income $ 10,103 $ 9,373 $ 9,354 Reinsurance assumed 101 105 83 Reinsurance ceded (1,817 ) (1,728 ) (1,652 ) Total insurance premiums and fee income $ 8,387 $ 7,750 $ 7,785 Direct insurance benefits $ 6,669 $ 6,112 $ 6,304 Reinsurance recoveries netted against benefits (1,851 ) (1,865 ) (1,775 ) Total benefits $ 4,818 $ 4,247 $ 4,529 We and LLANY cede insurance to other companies . The portion of our life insurance and annuity risks exceeding our retention limit is reinsured with other insurers . We seek reinsurance coverage to limit our exposure to mortality losses and to enhance our capital management . As discussed in Note 24, a portion of this reinsurance activity is with affiliated companies. As of December 31, 2017 , the policy for our reinsurance program was to retain up to $20 million on a single insured life . As the amount we retain varies by policy, we reinsure d approximately 25% of the mortality risk on newly issued life insurance contracts in 2017. A pproximately 35% and 36% of our total individual lif e in-force amount was reinsured a s of December 31, 2017 and 2016 , respectively. Portions of our deferred annuity business have been reinsured on either a coinsurance or a Modco basis with other companies to limit our exposure to interest rate risks . As of December 31, 2017 and 2016 , the reserves associated with these reinsurance arrangements totaled $ 541 million and $584 million, respectively. We focus on obtaining reinsurance from a diverse group of reinsurers, and we monitor concentration as well as financial strength ratings of our reinsurers . We regularly evaluate the financial condition of our reinsurers and monitor concentrations of credit risk related to reinsurance activities. Our amounts recoverable from reinsurers represent receivables from and reserves ceded to reinsurers and LNBAR. The amounts recoverable from reinsurers were $6.5 b illion and $6.8 billion as of December 31, 2017 and 2016 , respectively . Our reinsurance operations were acquired by Swiss Re in December 2001 through a series of indemnity reinsurance transactions . As such, Swiss Re reinsured certain liabilities and obligations under the indemnity reinsurance agreements and thereby represents our largest reinsurance exposure . As we are not relieved of our liability to the ceding companies for this business, the liabilities and obligations associated with the reinsured policies remain on our Consolidated Balance Sheets with a corresponding reinsurance receivable from Swiss Re, which totaled $1.9 billion and $2.2 billion as of December 31, 2017 and 2016 , respectively . Swiss Re has funded a trust, with a balance of $ 2.5 billion as of December 31, 2017 , to support this business . In addition to various remedies that we would have in the event of a default by Swiss Re, we continue to hold assets in support of certain of the transferred reserves . These assets consist of those reported as trading securities and certain mortgage loans . Our liabilities for funds withheld and embedded derivatives as of December 31, 2017 , included $ 269 million and $ 46 million , respectively, related to the business sold to Swiss Re. In addition, the amounts recoverable from LNBAR were $2.1 billion as of December 31, 2017 and 2016. LNBAR has funded trusts to support the business ceded of which the balance in the trusts changes as a result of ongoing reinsurance activity and totaled $1.9 billion as of December 31, 2017. We recorded the gain related to the indemnity reinsurance transactions with Swiss Re as a deferred gain on business sold through reinsurance on our Consolidated Balance Sheets and amortized the gain over the period which the majority of the earnings were expected to emerge , and the deferred gain was fully amortized in 2017. We amortized $15 million, after-tax, of deferred gain on business sold through reinsurance during 2017 and $48 million during 2016 and 2015, respectively . |
Goodwill and Specifically Ident
Goodwill and Specifically Identifiable Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Specifically Identifiable Intangible Assets [Abstract] | |
Goodwill and Specifically Identifiable Intangible Assets | 10. Goodwill and Specifically Identifiable Intangible Assets The changes in the carrying amount of goodwill (in millions) by reportable segment were as follows: For the Year Ended December 31, 2017 Gross Accumulated Goodwill Impairment Net as of as of Goodwill Beginning- Beginning- as of End- of-Year of-Year Impairment of-Year Annuities $ 1,040 $ (600 ) $ - $ 440 Retirement Plan Services 20 - - 20 Life Insurance 2,186 (647 ) (905 ) 634 Group Protection 274 - - 274 Total goodwill $ 3,520 $ (1,247 ) $ (905 ) $ 1,368 For the Year Ended December 31, 2016 Gross Accumulated Goodwill Impairment Net as of as of Goodwill Beginning- Beginning- as of End- of-Year of-Year Impairment of-Year Annuities $ 1,040 $ (600 ) $ - $ 440 Retirement Plan Services 20 - - 20 Life Insurance 2,186 (647 ) - 1,539 Group Protection 274 - - 274 Total goodwill $ 3,520 $ (1,247 ) $ - $ 2,273 The fair values of our reporting units (Level 3 fair value estimates) are comprised of the value of in-force (i.e., existing) business and the value of new business. Specifically, new business is representative of cash flows and profitability associated with policies or contracts we expect to issue in the future, reflecting our forecasts of future sales volume and product mix over a 10 -year period. To determine the values of in-force and new business, we use a discounted cash flows technique that applies a discount rate reflecting the market expected, weighted-average rate of return adjusted for the risk factors associated with operations to the projected future cash flows for each reporting unit. As of October 1, 2017, the date of our annual quantitative assessment of goodwill, our Annuities, Retirement Plan Services and Group Protection reporting units had fair values that exceeded the carrying value of each reporting unit. As discussed in Note 2, our early adoption of ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” resulted in impairment of the Life Insurance reporting unit goodwill of $905 million during the fourth quarter of 2017 driven primarily from the impact of the December 22, 2017, enactment of the Tax Act that increased the carrying value of the Life Insurance reporting unit in excess of its fair value. The gross carrying amounts and accumulated amortization (in millions) for each major specifically identifiable intangible asset class by reportable segment were as follows: As of December 31, 2017 As of December 31, 2016 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Life Insurance: Sales force $ 100 $ 47 $ 100 $ 43 Retirement Plan Services: Mutual fund contract rights (1) 5 - 5 - Total $ 105 $ 47 $ 105 $ 43 (1) No amortization recorded as the intangible asset has indefinite life . Future estimated amortization of specifically identifiable intangible assets (in m illions) as of December 31, 2017 , was as follows: 2018 $ 4 2019 4 2020 4 2021 4 2022 4 Thereafter 33 |
Guaranteed Benefit Features
Guaranteed Benefit Features | 12 Months Ended |
Dec. 31, 2017 | |
Guaranteed Benefit Features [Abstract] | |
Guaranteed Benefit Features | 11 . Guaranteed Benefit Features Information on the GDB features outstanding (dollars in millions) was as follows: As of December 31, 2017 (1) 2016 (1) Return of Net Deposits Total account value $ 96,941 $ 87,707 Net amount at risk (2) 81 824 Average attained age of contract holders 64 years 63 years Minimum Return Total account value $ 108 $ 105 Net amount at risk (2) 18 22 Average attained age of contract holders 76 years 75 years Guaranteed minimum return 5% 5% Anniversary Contract Value Total account value $ 26,596 $ 24,605 Net amount at risk (2) 417 782 Average attained age of contract holders 70 years 69 years (1) Our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive. (2) Represents the amount of death benefit in excess of the account balance that is subject to market fluctuations. The determination of GDB liabilities is based on models that involve a range of scenarios and assumptions, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience . The following summarizes the balances of and changes in the liabilities for GDBs (in millions), which were recorded in future contract benefits on our Consolidated Balance Sheets: For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 110 $ 115 $ 89 Changes in reserves 8 34 52 Benefits paid (18 ) (39 ) (26 ) Balance as of end-of-year $ 100 $ 110 $ 115 Variable Annuity Contracts Account balances of variable annuity contracts , including those with guarantees , (in millions) were invested in separate account investment options as follows: As of December 31, 2017 2016 Asset Type Domestic equity $ 59,647 $ 50,337 International equity 20,837 16,714 Fixed income 40,626 37,795 Total $ 121,110 $ 104,846 Percent of total variable annuity separate account values 99% 99% Secondary Guarantee Products Future contract benefits and other contract holder funds include reserves for our secondary guarantee products sold through our Life Insurance segment . These UL and VUL products with secondary guarantees represented 32 % and 36% of total life insurance in-force reserves as of December 31, 2017 and 2016, respectively. UL and VUL products with secondary guarantees represented 27 % of total s ales for the year ended December 31, 201 7, and 33% for the years ended December 31, 2016 and 2015 . |
Short-Term and Long-Term Debt
Short-Term and Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Short-Term and Long-Term Debt [Abstract] | |
Short-Term and Long-Term Debt | 1 2 . Short-Term and Long-Term Debt Details underlying short-term and long-term debt (in millions) were as follows: As of December 31, 2017 2016 Short-Term Debt Short-term debt (1) $ 10 $ 280 Long-Term Debt, Excluding Current Portion Surplus notes due LNC: LIBOR + 142 bps surplus note, due 2023 $ - $ 240 9.76% surplus note, due 2024 50 50 6.56% surplus note, due 2028 500 500 LIBOR + 111 bps surplus note, due 2028 71 71 LIBOR + 226 bps surplus note, due 2028 573 533 6.03% surplus note, due 2028 750 750 LIBOR + 200 bps surplus note, due 2035 30 30 LIBOR + 155 bps surplus note, due 2037 25 - 4.20% surplus note, due 2037 50 - LIBOR + 100 bps surplus note, due 2037 325 375 Total surplus notes 2,374 2,549 Total long-term debt $ 2,374 $ 2,549 (1) The short-term debt represents short-term notes payable to LNC. During 2017, we reco gnized a $5 million loss on the early extinguishment of debt, pre-t ax, related to unamortized issuance costs on our Consolidated Statements of Comprehensive Income (Loss). Future principal payments due on long-term debt (in millions) as of December 31, 2017, were as follows: 2018 $ - 2019 - 2020 - 2021 - 2022 - Thereafter 2,374 Total $ 2,374 On June 28, 2013, we issued a surplus note of $240 million to LNC. The note called for us to pay the principal amount of the note on or before June 28, 2023 , and interest to be paid quarterly at an annual rate of the London Interbank Offered Rate (“LIBOR”) + 142 bps. Subject to approval by the Indiana Insurance Commissioner (the “Commissioner”), we had the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest. On September 27, 2017, we executed the right to repay the surplus note in whole totaling $240 million to LNC using dividends from subsidiaries and other items. We issued a surplus note of $50 million to LNC in 1994. The note calls for us to pay the principal amount of the note on or before September 30, 2024 , and interest to be paid semiannually at an annual rate of 9.76% . Subject to approval by the Commissioner, we have the right to repay the note on any March 31 or September 30. We issued a surplus note of $500 million to LNC in 1998. The note calls for us to pay the principal amount of the note on or before March 31, 2028 , and interest to be paid quarterly at an annual rate of 6.56% . Subject to approval by the Commissioner, LNC has the right to redeem the note for immediate repayment in total or in part once per year on the anniversary date of the note. Any payment of interest or repayment of principal may be paid only out of our statutory earnings, only if our statutory capital surplus exceeds our statutory capital as of the date of note issuance of $2.3 billion, and subject to approval by the Commissioner. On October 1, 2013, we issued a surplus note of $71 million to LNC. The note calls for us to pay the principal amount of the note on or before September 24, 2028 , and interest to be paid quarterly at an annual rate of LIBOR + 111 bps. Subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest. On December 17, 2013, we issued a variable surplus note to a wholly-owned subsidiary of LNC with an initial outstanding principal amount of $287 million. The outstanding principal amount as of December 31, 2017, was $573 million. The note calls for us to pay the principal amount of the note on or before October 1, 2028 , and interest to be paid quarterly at an annual rate of LIBOR + 226 bps. We issued a surplus note of $750 million to LNC in 1998. The note calls for us to pay the principal amount of the note on or before December 31, 2028 , and interest to be paid quarterly at an annual rate of 6.03% . Subject to approval by the Commissioner, LNC has the right to redeem the note for immediate repayment in total or in part once per year on the anniversary date of the note. Any payment of interest or repayment of principal may be paid only out of our statutory earnings, only if our statutory capital surplus exceeds our statutory capital surplus as of the date of note issuance of $2.4 billion, and subject to approval by the Commissioner. On October 1, 2015, we issued a surplus note of $30 million to LNC. The note calls for us to pay the principal amount of the note on or before September 28, 2035 , and interest to be paid quarterly at an annual rate of LIBOR + 200 bps. Subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest. On July 1, 2017, we issued a surplus note of $25 million to LNC. The note calls for us to pay the principal amount of the note on or before June 30, 2037 , and interest to be paid quarterly at an annual rate of LIBOR + 155 bps. Subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest. On October 1, 2017, we issued a surplus note of $50 million to LNC. The note calls for us to pay the principal amount of the note on or before July 1, 2037 , and interest to be paid quarterly at an annual rate of 4.20% . Subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest. On October 9, 2007, we issued a surplus note of $375 million that LNC has held effective December 31, 2008. The note calls for us to pay the principal amount of the note on or before October 9, 2037 , and interest to be paid quarterly at an annual rate of LIBOR + 100 bps. On June 15, 2017, the surplus note was amended to include repayment terms stating subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest. In fourth quarter of 2017, we executed the right to repay the surplus note in part totaling $50 million to LNC. Credit Facilities and Letters of Credit Credit facilities, which allow for borrowing or issuances of letters of credit (“LOCs”), and LOCs (in millions) were as follows: As of December 31, 2017 Expiration Maximum LOCs Date Available Issued Credit Facilities Five-year revolving credit facility Jun-2021 $ 2,500 $ 275 LOC facility (1) Aug-2031 990 945 LOC facility (1) Oct-2031 1,023 1,020 Total $ 4,513 $ 2,240 (1) Our wholly-owned subsidiaries entered into irrevocable LOC facility agreements with third-party lenders supporting inter-company reinsurance agreements . On June 30, 2016, we refinanced the existing credit agreement with a syndicate of banks. This agreement (the “credit facility”) allows for the borrowing and issuance of LOCs of up to $2.5 billion, $1.75 billion of which i s available only to reimburse the banks for drawn LOCs. The credit facility is unsecured and has a commitment termination date of June 30, 2021. The LOCs under the facility are used primarily to satisfy reserve credit requirements of (i) ourselves and LLANY for which reserve credit is provided by our captive reinsurance subsidiaries and LNBAR and (ii) certain ceding companies of our legacy reinsurance business. The credit facility contains or includes: · Customary terms and conditions, including covenants restricting our ability to incur liens, merge or consolidate with another entity where we are not the surviving entity and dispose of all or substantially all of our assets; · Financial covenants including maintenance of a minimum consolidated net worth (as defined in the facility) equal to the sum of $10.5 billion plus 50% of the aggregate net proceeds of equity issuances received by us in accordance with the terms of the credit facility; and a debt-to-capital ratio as defined in accordance with the credit facility not to exceed 0.35 to 1.00 ; and · Customary events of default, subject to certain materiality thresholds and grace periods for certain of those events of default. Upon an event of default, the credit facility provides that, among other things, the commitments may be terminated and the loans then outstanding may be declared due and payable. As of December 31, 2017, we were in compliance with all such covenants. Our LOC facility agreements each contain customary terms and conditions, including early termination fees, covenants restricting the ability of the subsidiaries to incur liens, merge or consolidate with another entity and dispose of all or substantially all of their assets. Upon an event of early termination, the agreements require the immediate payment of all or a portion of the present value of the future LOC fees that would have otherwise been paid. Further, the agreements contain customary events of default, subject to certain materiality thresholds and grace periods for certain of those events of default. The events of default include payment defaults, covenant defaults, material inaccuracies in representations and warranties, bankruptcy and liquidation proceedings and other customary defaults. Upon an event of default, the agreements provide that, among other things, obligations to issue, amend or increase the amount of any LOC shall be terminated and any obligations shall become immediately due and payable. As of December 31, 2017, we were in compliance with all such covenants. |
Contingencies and Commitments
Contingencies and Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Contingencies and Commitments [Abstract] | |
Contingencies and Commitments | 13. Contingencies and Commitments Contingencies Regulatory and Litigation Matters Regulatory bodies, such as state insurance departments, the SEC, Financial Industry Regulatory Authority and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, laws governing the activities of broker-dealers, registered investment advisors and unclaimed property laws . LNL and its affiliates are involved in various pending or threatened legal or regulatory proceedings, including purported class actions, arising from the conduct of business both in the ordinary course and otherwise . In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought . Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief . Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court . In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding verdicts obtained in the jurisdiction for similar matters . This variability in pleadings, together with t he actual experiences of LNL in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value . Due to the unpredictable nature of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time is normally difficult to ascertain . Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal . Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. We establish liabilities for litigation and regulatory loss contingencies when information related to the loss contingencies shows both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated . It is possible that some matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be e stimated as of December 31, 2017. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on LNL ’s financial condition . For some matters, the Company is able to estimate a reasonably possible range of loss . For such matters in which a loss is probable, an accrual has been made . For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made . Accordingly, the estimate contained in this paragraph reflects two types of matters . For some matters included within this estimate, an accrual has been made, but there is a reasonable possibility that an exposure exists in excess of the amount accrued . In these cases, the estimate reflects the reasonably possible range of loss in excess of the accrued amount . For other matters included within this estimation, no accrual has been made because a loss, while potentially estimable, is believed to be reasonably possible but not probable . In these cases, the estimate reflects the reasonably possible loss or range of loss . As of December 31, 2017 , we estimate the aggregate range of reasonably possible losses to be up to approximately $ 50 m illion . For other matters, we are not currently able to estimate the reasonably possible loss or range of loss . We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts and the progress of settlement negotiations . On a quarterly and annual basis, we review relevant information with respect to litigation contingencies and update our accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews . Certain reinsurers have sought rate increases on certain yearly renewable term treaties. We are disputing the requested rat e increases under these treaties . We have initiated and will initiate arbitration proceedings, as necessary, under these treaties in order to protect our contractual rights. Additionally, reinsurers may initiate arbitration proceedings against us. We believe it is unlikely the outcome of these disputes will have a material adverse effect on our financial condition. For more informati on about reinsurance, see Note 9. Cost of Insurance Litigation Glover v. Connecticut General Life Insurance Company and The Lincoln National Life Insurance Company , filed in the U.S. District Court for the District of Connecticut, No. 3:16cv00827, is a putative class action that was served on LNL on June 8, 2016. Plaintiff is the owner of a universal life insurance policy who alleges that LNL charged more for non-guaranteed cost of insurance than permitted by the policy. Plaintiff seeks to represent all universal life and variable universal life policyholders who owned policies containing non-guaranteed cost of insurance provisions that are similar to those of Plaintiff’s policy and seeks damages on behalf of all such policyholders. We are vigorously defending this matter. Helen Hanks v. The Lincoln Life and Annuity Company of New York(“LLANY”) and Voya Retirement Insurance and Annuity Company (“Voya”) , filed in the U.S. District Court for the Southern District of New York, No. 16cv6399, is a putative class action that was served on LLANY on August 12, 2016. Plaintiff owns a universal life policy originally issued by Aetna (now Voya) and alleges that (i) Voya breached the terms of the policy when it increased non-guaranteed cost of insurance rates on Plaintiff’s policy; and (ii) LLANY, as reinsurer and administrator of Plaintiff’s policy, engaged in wrongful conduct related to the cost of insurance increase and was unjustly enriched as a result. Plaintiff seeks to represent all owners of Aetna life insurance policies that were subject to non-guaranteed cost of insurance rate increases in 2016 and seeks damages on their behalf. We are vigorously defending this matter. EFG Bank AG, Cayman Branch, et al. v. The Lincoln National Life Insurance Company , pending in the U.S. District Court for the Eastern District of Pennsylvania, No. 2:17-cv-02592, is a civil action filed on February 1, 2017. Plaintiffs own Legend Series universal life insurance policies originally issued by Jefferson-Pilot (now LNL). Plaintiffs allege that LNL breached the terms of policyholders’ contracts when it increased cost of insurance rates beginning in 2016. We are vigorously defending this matter. Swenson, et al. v. The Lincoln National Life Insurance Company, Lincoln Life & Annuity Company of New York, Lincoln National Corporation, Voya Retirement Insurance and Annuity Company, and Voya Financial, Inc. , filed in the U.S. District Court for the Southern District of New York, No. 1:17-cv-04843, is a civil action filed on February 1, 2017. Plaintiffs own universal life insurance policies originally issued by Aetna (now Voya). Plaintiffs alleged that LNL breached the terms of policyholders’ contracts when it increased cost of insurance rates beginning in 2016. Plaintiffs voluntarily dismissed this action without prejudice on November 14, 2017. In re: Lincoln National COI Litigation , pending in the U.S. District Court for the Eastern District of Pennsylvania, Master File No. 16-cv-06605-GJP, is a consolidated litigation matter related to multiple putative class action filings that were consolidated by an order dated March 20, 2017. In addition to consolidating a number of existing matters, the order also covers any future cases filed in the same district related to the same subject matter. Plaintiffs own universal life insurance policies originally issued by Jefferson-Pilot (now LNL). Plaintiffs allege that LNL and LNC breached the terms of policyholders’ contracts by increasing non-guaranteed cost of insurance rates beginning in 2016. Plaintiffs seek to represent classes of policyowners and seek damages on their behalf. We are vigorously defending this matter. Tutor v. Lincoln National Corporation and The Lincoln National Life Insurance Company , pending in the U.S. District Court for the Eastern District of Pennsylvania, No. 2:17-cv-04150, is a putative class action filed on September 18, 2017. Plaintiff owns a universal life insurance policy originally issued by former Jefferson-Pilot (now LNL). Plaintiff alleges that LNL and LNC breached the terms of policyholders’ contracts by increasing non-guaranteed cost of insurance rates beginning in 2017. We are vigorously defending this matter. Trinchero, et al. v. Lincoln National Corporation and The Lincoln National Life Insurance Company , pending in the U.S. District Court for the Eastern District of Pennsylvania, No. 2:18-cv-00765, is a putative class action filed on February 22, 2018. Plaintiffs own universal life insurance policies originally issued by former Jefferson-Pilot (now LNL). Plaintiffs allege that LNL and LNC breached the terms of policyholders’ contracts by increasing non-guaranteed cost of insurance rates beginning in 2017. We are vigorously defending this matter. Commitments Operating Leases We lease our home office properties . In 2017, we extended the Radnor lease with a new term expiring in 2024. Additionally, in 2017, we extended the Fort Wayne lease with a new term expiring in 2029. In 2016, a lease commenced in Atlanta, Georgia at our RiverEdge Summit location and the lease shall expire in 2027. Furthermore, in 2016, we renegotiated the Hartford lease with a new term expiring in 2028. Total rental expense on operating leases for the years ended December 31, 2017 , 2016 and 2015 , was $36 million, $37 million and $35 million, respectively. Future minimum rental commitments (in millions) as of December 31, 2017 , were as follows: 2018 $ 31 2019 31 2020 27 2021 24 2022 19 Thereafter 66 Total $ 198 Capital Leases In 2017 and 2016, we entered into sale-leaseback transactions on $62 million and $85 million, respectively, (net of amortization) of assets. These transactions have been classified as capital leases on our Consolidated Balance Sheets. These assets will continue to be amortized on a straight-line basis over the assets’ remaining lives . Total accumulated amortization related to these leased assets as of December 31, 2017 and 2016, was $101 million and $92 million, respectively . Future minimum lease payments under capital leases (in millions) as of December 31, 201 7 , were as follows: 2018 $ 7 2019 90 2020 52 2021 62 2022 63 Thereafter 28 Total minimum lease payments 302 Less: Amount representing interest 26 Present value of minimum lease payments $ 276 Vulnerability from Concentrations As of December 31, 2017 , we did not have a concentration of: business transactions with a particular customer or lender; sources of supply of labor or services used in the business; or a market or geographic area in which business is conducted that makes us vulnerable to an event that is at least reasonably possible to occur in the near term and which could cause a severe impact to our financial condition. Although we do not have any significant concentration of customers, our American Legacy Variable Annuity (“ALVA”) product offered in our Annuities segment is significant to this segment . The ALVA product accounted for 14% , 21% and 18% of Annuities’ variable annuity product deposits in 2017 , 2016 and 2015 , respectively, and represented approximately 40% , 41% and 42% of the segment’s total variable annuity product account values as of December 31, 2017 , 2016 and 2015 , respectively. In addition, fund choices for certain of our other variable annuity products offered in our Annuities segment include American Fund Insurance Series SM (“AFIS”) funds. For the Annuities segment, AFIS funds accounted for 20% , 23% and 20% of variable annuity product deposits in 2017 , 2016 and 2015 , respectively, and represented 47% , 47% and 48% of the segment’s total variable annuity product account values as of December 31, 2017 , 2016 and 2015 , respectively. Other Contingency Matters State guaranty funds assess insurance companies to cover losses to contract holders of insolvent or rehabilitated companies. Mandatory assessments may be partially recovered through a reduction in future premium taxes in some states. We have accrued for expected assessments and the related reductions in future state premium taxes, which net to assessments (recoveries) of $(17) million and $(10) million as of December 31, 2017 and 2016 , respectively. |
Shares and Stockholders' Equity
Shares and Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Shares and Stockholders' Equity [Abstract] | |
Shares and Stockholders' Equity | 14. Shares and Stockholder’ s Equity All authorized and issued shares of LNL are owned by LNC. AOCI The following summarizes the components and changes in AOCI (in millions): For the Years Ended December 31, 2017 2016 2015 Unrealized Gain (Loss) on AFS Securities Balance as of beginning-of-year $ 1,687 $ 934 $ 3,054 Unrealized holding gains (losses) arising during the year 2,872 1,549 (4,386 ) Change in foreign currency exchange rate adjustment 134 (100 ) (45 ) Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds (703 ) (460 ) 1,293 Income tax benefit (expense) (745 ) (351 ) 1,095 Less: Reclassification adjustment for gains (losses) included in net income (loss) (40 ) (155 ) 147 Associated amortization of DAC, VOBA, DSI and DFEL (19 ) (22 ) (28 ) Income tax benefit (expense) 21 62 (42 ) Balance as of end-of-year $ 3,283 $ 1,687 $ 934 Unrealized OTTI on AFS Securities Balance as of beginning-of-year $ 22 $ 19 $ 19 (Increases) attributable to: Gross OTTI recognized in OCI during the year - (53 ) (29 ) Change in DAC, VOBA, DSI and DFEL - 12 4 Income tax benefit (expense) - 14 8 Decreases attributable to: Changes in fair value, sales, maturities or other settlements of AFS securities 34 51 43 Change in DAC, VOBA, DSI and DFEL (7 ) (7 ) (17 ) Income tax benefit (expense) (10 ) (15 ) (9 ) Balance as of end-of-year $ 39 $ 22 $ 19 Unrealized Gain (Loss) on Derivative Instruments Balance as of beginning-of-year $ 93 $ 157 $ 127 Unrealized holding gains (losses) arising during the year 63 (175 ) (185 ) Change in foreign currency exchange rate adjustment (137 ) 96 48 Change in DAC, VOBA, DSI and DFEL 1 2 3 Income tax benefit (expense) 26 27 46 Less: Reclassification adjustment for gains (losses) included in net income (loss) 31 24 (184 ) Associated amortization of DAC, VOBA, DSI and DFEL (2 ) (2 ) 2 Income tax benefit (expense) (10 ) (8 ) 64 Balance as of end-of-year $ 27 $ 93 $ 157 Funded Status of Employee Benefit Plans Balance as of beginning-of-year $ (20 ) $ (19 ) $ (21 ) Adjustment arising during the year (4 ) (2 ) 3 Income tax benefit (expense) 2 1 (1 ) Balance as of end-of-year $ (22 ) $ (20 ) $ (19 ) The following summarizes the reclassifications out of AOCI (in millions) and the associated line item in the Consolidated Statements of Comprehensive Income (Loss): For the Years Ended December 31, 2017 2016 2015 Unrealized Gain (Loss) on AFS Securities Gross reclassification $ (40 ) $ (155 ) $ 147 Total realized gain (loss) Associated amortization of DAC, VOBA, DSI and DFEL (19 ) (22 ) (28 ) Total realized gain (loss) Reclassification before income Income (loss) from continuing tax benefit (expense) (59 ) (177 ) 119 operations before taxes Income tax benefit (expense) 21 62 (42 ) Federal income tax expense (benefit) Reclassification, net of income tax $ (38 ) $ (115 ) $ 77 Net income (loss) Unrealized OTTI on AFS Securities Gross reclassification $ 5 $ 3 $ 2 Total realized gain (loss) Change in DAC, VOBA, DSI and DFEL (1 ) - - Total realized gain (loss) Reclassification before income Income (loss) from continuing tax benefit (expense) 4 3 2 operations before taxes Income tax benefit (expense) (1 ) - - Federal income tax expense (benefit) Reclassification, net of income tax $ 3 $ 3 $ 2 Net income (loss) Unrealized Gain (Loss) on Derivative Instruments Gross reclassifications: Interest rate contracts $ 4 $ 5 $ (190 ) Net investment income Interest rate contracts - 1 - Total realized gain (loss) Foreign currency contracts 18 11 6 Net investment income Foreign currency contracts 9 7 - Total realized gain (loss) Total gross reclassifications 31 24 (184 ) Associated amortization of DAC, VOBA, DSI and DFEL (2 ) (2 ) 2 Commissions and other expenses Reclassifications before income Income (loss) from continuing tax benefit (expense) 29 22 (182 ) operations before taxes Income tax benefit (expense) (10 ) (8 ) 64 Federal income tax expense (benefit) Reclassifications, net of income tax $ 19 $ 14 $ (118 ) Net income (loss) |
Realized Gain (Loss)
Realized Gain (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Realized Gain (Loss) [Abstract] | |
Realized Gain (Loss) | 15 . Realized Gain (Loss) Details underlying realized gain (loss) (in millions) reported on our Consolidated Statements of Comprehensive Income (Loss) were as follows: For the Years Ended December 31, 2017 2016 2015 Total realized gain (loss) related to certain investments (1) $ (71 ) $ (241 ) $ (83 ) Realized gain (loss) on the mark-to-market on certain instruments (2) (155 ) (66 ) 123 Indexed annuity and IUL contracts net derivatives results: (3) Gross gain (loss) (22 ) (1 ) (78 ) Associated amortization of DAC, VOBA, DSI and DFEL (2 ) (4 ) 14 GLB fees ceded to LNBAR and attributed fees: Gross gain (loss) (174 ) (166 ) (161 ) Associated amortization of DAC, VOBA, DSI and DFEL (32 ) (32 ) (34 ) Realized gain (loss) on sale of subsidiaries/businesses (4) - - (3 ) Total realized gain (loss) $ (456 ) $ (510 ) $ (222 ) (1) See “Realized Gain (Loss) Related to Certain Investments” section in Note 5 . (2) Represents changes in the fair values of certain derivative investments (not including those associated with our variable and indexed annuity and IUL contracts net derivatives results), reinsurance related embedded derivatives and trading securities. (3) Represents the net difference between the change in the fair value of the S&P 500 call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products . (4) See “L incoln F inancial M edia Company ” in Note 3. |
Commissions and Other Expenses
Commissions and Other Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Commissions And Other Expenses [Abstract] | |
Commissions and Other Expenses | 16. Commissions and Other Expenses Details underlying commissions and other expenses (in millions) were as follows: For the Years Ended December 31, 2017 2016 2015 Commissions $ 1,998 $ 1,927 $ 2,082 General and administrative expenses 1,715 1,623 1,683 Expenses associated with reserve financing and unrelated LOCs 57 40 32 DAC and VOBA deferrals and interest, net of amortization (390 ) (170 ) (292 ) Broker-dealer expenses 329 320 329 Specifically identifiable intangible asset amortization 4 4 4 Media expenses - - 28 Taxes, licenses and fees 254 261 243 Total $ 3,967 $ 4,005 $ 4,109 |
Retirement and Deferred Compens
Retirement and Deferred Compensation Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement and Deferred Compensation Plans [Abstract] | |
Retirement and Deferred Compensation Plans | 17. Retirement and Deferred Compensation Plans Defined Benefit Pension and Other Postretirement Benefit Plans We maintain defined benefit pension plans in which certain agents are participants . These defined benefit pension plans are closed to new entrants and existing participants do not accrue any additional benefits . We comply with applicable minimum funding requirements and do not expect to be required to make any contributions to these pension plans in 2018. We sponsor other postretirement benefit plans that provide health care and life insurance to certain retired agents . Total net periodic cost (recovery) for these plans was $5 million, $3 million and $3 million during 201 7 , 201 6 and 201 5 , respectively . In 201 8 , we expect to make benefit payments of approximately $11 million for these plans . Information (in millions) with respect to these plans was as follows: As of or For the Years Ended December 31, 2017 2016 2017 2016 Other Postretirement Pension Plans Benefit Plans Fair value of plan assets $ 111 $ 117 $ 7 $ 7 Projected benefit obligation 119 117 12 11 Funded status $ (8 ) $ - $ (5 ) $ (4 ) Amounts Recognized on the Consolidated Balance Sheets Other assets $ - $ 2 $ - $ - Other liabilities (8 ) (2 ) (5 ) (4 ) Net amount recognized $ (8 ) $ - $ (5 ) $ (4 ) Weighted-Average Assumptions Benefit obligations: Weighted-average discount rate 4.00% 4.50% 4.00% 4.50% Net periodic benefit cost: Weighted-average discount rate 4.50% 4.50% 4.50% 4.50% Expected return on plan assets 4.75% 5.50% 6.50% 6.50% The weighted average discount rate was determined based on a corporate yield curve as of December 31, 201 7 , and projected benefit obligation cash flows . The expected return on plan assets was determined based on historical and expected future returns of the various asset categories, using the plans’ target plan allocation . We reevaluate these assumptions each plan year . The following summarizes our fair value measurements of our benefit plans’ assets (in millions) on a recurring basis by asset category : As of December 31, 2017 2016 Fixed maturity securities: Corporate bonds $ 1 $ 21 U.S. government bonds 105 93 U.S. government mortgage-backed securities 3 - Cash and invested cash 2 2 Other investments 7 8 Total $ 118 $ 124 See “Fair Value Measurement” in Note 1 for discussion on how we categorize our pension plans’ assets into the three-level fair value hierarchy . See “Financial Instruments Carried at Fair Value” in Note 20 for a summary of our fair value measurement of our pension plans’ assets by the three-level fair value hierarchy . Participation in Defined Benefit Pension and Other Postretirement Benefit Plans We participate in defined benefit pension plans that are sponsored by LNC for certain employees an d non-employee directors. These defined benefit pension plans are closed to new entrants, and existing participants do not accrue a ny additional benefits. We also participate in other postretirement benefit plans sponsored by LNC that provide health care and life insurance to certain ret ired employees. Our expense for these plans was $7 million, $9 million and $30 million for the years ended December 31, 201 7 , 201 6 and 201 5 , respectively. Defined Contribution Plans We sponsor tax-qualified defined contribution plans for eligible agents that are administered in accordance with the plan documents and various limitations under section 401(a) of the Internal Revenue Code of 1986. We also participate in defined contribution plans sponsored by LNC for eligible employees. Our expense for these plans was $85 m illion , $83 m illion and $79 m illion, f or the years ended December 31, 201 7 , 201 6 and 2015, respectively . Deferred Compensation Plans We sponsor non-qualified, unfunded, deferred compensation plans for certain current and former agents . Certain current employees participate in non-qualified, unfunded, deferred compensation plans sponsored by LNC. The results of certain notional investment options within some of the plans are hedged by total return swaps. Our expenses increase or decrease in direct proportion to the change in market value of the participants’ investment options . Participants of certain plans are able to select LNC stock as a notional investment option; however, it is not hedged by the total return swaps and is a primary source of expense volatility related to these plans . Our expense for these plans was $27 m illion, $22 m illion and $12 million for the years ended December 31, 2017, 2016 and 2015, respectively . For further discussion of total return swaps related to our deferred compensation plans, see Note 6. I nformation (in millions) with respect to these plans was as follows : As of December 31, 2017 2016 Total liabilities (1) $ 517 $ 440 Investments dedicated to fund liabilities (2) 182 159 (1) Reported in other liabilities on our Consolidated Balance Sheets. (2) Reported in other assets on our Consolidated Balance Sheets. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation Plans [Abstract] | |
Stock-Based Compensation Plans | 18. Stock-Based Incentive Compensation Plans Our employees and agents are included in LNC’s various incentive plans that provide for the issuance of stock options, performance shares (performance-vested shares as opposed to service -vested shares), stock appreciation rights (“SARs”) and restricted stock units (“RSUs”). LNC issues new shares to satisfy option exercises. Total compensation expense (in millions) by award type for all of our stock-based incentive plans was as follows: For the Years Ended December 31, 2017 2016 2015 Stock options $ 9 $ 9 $ 7 Performance shares 12 10 11 SARs 2 3 - RSUs 24 22 21 Total $ 47 $ 44 $ 39 Recognized tax benefit $ 16 $ 15 $ 14 |
Statutory Information and Restr
Statutory Information and Restrictions | 12 Months Ended |
Dec. 31, 2017 | |
Statutory Information and Restrictions [Abstract] | |
Statutory Information and Restrictions | 19. Statutory Information and Restrictions We prepare financial statements in accordance with statutory accounting principles (“SAP”) prescribed or permitted by the insurance departments of our states of domicile, which may vary materially from GAAP. Prescribed SAP includes the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (“NAIC”) as well as state laws, regulations and administrative rules. Permitted SAP encompasses all accounting practices not so prescribed. The principal differences between statutory financial statements and financial statements prepared in accordance with GAAP are that statutory financial statements do not reflect DAC, some bond portfolios may be carried at amortized cost, assets and liabilities are presented net of reinsurance, contract holder liabilities are generally valued using more conservative assumptions and certain assets are non-admitted. We are subject to the applicable laws and regulations of our states of domicile. Changes in these laws and regulations could change capital levels or capital requirements for the Company. Statutory capital and surplus, net gain (loss) from operations, after-tax, net income (loss) and dividends to the LNC holding company amounts (in millions) below consist of all or a combination of the following entities: LNL, Lincoln Reinsurance Company of South Carolina, LLANY, Lincoln Reinsurance Company of Vermont I, Lincoln Reinsurance Company of Vermont III, Lincoln Reinsurance Company of Vermont IV, Lincoln Reinsurance Company of Vermont V, Lincoln Reinsurance Company of Vermont VI and Lincoln Reinsurance Company of Vermont VII. As of December 31, 2017 2016 U.S. capital and surplus $ 8,074 $ 8,017 For the Years Ended December 31, 2017 2016 2015 U.S. net gain (loss) from operations, after-tax $ 1,312 $ 1,088 $ 583 U.S. net income (loss) 1,452 982 786 U.S. dividends to LNC holding company 954 950 1,121 Comparison of 2017 to 2016 Statutory net income (loss) increased due primarily to higher dividends from affiliates, higher realized gains on investments and increased other revenue, partially offset by unfavorable reserve strain on certain products. Comparison of 2016 to 2015 Statutory net income (loss) increased due primarily to changes in estimate on reserves for certain products and gains related to reinsurance transactions, partially offset by lower realized gains on investments. Our states of domicile, Indiana for LNL and New York for LLANY, have adopted certain prescribed accounting practices that differ from those found in NAIC SAP. These prescribed practices are the use of continuous Commissioners Annuity Reserve Valuation Method (“CARVM”) in the calculation of reserves as prescribed by the state of New York, the calculation of reserves on universal life policies based on the Indiana universal life method as prescribed by the state of Indiana for policies issued before January 1, 2006, and the use of a more conservative valuation interest rate on certain annuities prescribed by the states of Indiana and New York. The Vermont re insurance subsidiaries also have certain accounting practices permitted by the state of Vermont that differ from those found in NAIC SAP. One permitted practice involves accounting for the lesser of the face amount of all amounts outstan ding under a LOC and the value of the Valuation of Life Insurance Policies Model Regulation (“XXX”) additional statutory reserves as an admitted asset and a form of surplus as of December 31, 2017 and 2016. Another permitted practice involves the acquisition of an LLC note in exchange for a variable v alue s urplus n ote that is recognized as an admitted asset and a form of surplus as of December 31, 2017. Lastly, the state of Vermont has permitted a practice to account for certain excess of loss reinsurance treaties with unaffiliated reinsurers as an asset and form of surplus as of December 31, 2017. These permitted practices are related to structures that continue to be allowed in accordance with the grandfathered structures under the provisions of Actuarial Guideline 48 (“AG48”). The favorable (unfavorable) effects on statutory surplus compared to NAIC statutory surplus from the use of these prescribed and permitted practices (in millions) were as follows: As of December 31, 2017 2016 State Prescribed Practices Calculation of reserves using the Indiana universal life method $ 54 $ 79 Conservative valuation rate on certain annuities (50 ) (49 ) Vermont Subsidiaries Permitted Practices (1) Lesser of LOC and XXX additional reserve as surplus 1,965 2,855 LLC notes and variable value surplus notes 1,585 - Excess of loss reinsurance treaties 185 - (1) The se permitted practice s are related to structures that continue to be allowed in accordance with the grandfathered structures under the provisions of AG48. During the third quarter of 2013, the New York State Department of Financial Services announced that it would not recognize the NAIC revisions to Actuarial Guideline 38 in applying the New York law governing the reserves to be held for UL and VUL products containing secondary guarantees. The change, which was effective as of December 31, 2013, impacts our New York-domiciled insurance subsidiary, LLANY. Although LLANY discontinued the sale of these products in early 2013, the change affected those policies previously sold. We began phasing in the increase in reserves in 2013 at $90 million per year over five years. As of December 31, 2017, we completed the phased in increase in reserves over five years, for a total of $450 million. The NAIC has adopted risk-based capital (“RBC”) requirements for life insurance companies to evaluate the adequacy of statutory capital and surplus in relation to investment and insurance risks. The requirements provide a means of measuring the minimum amount of statutory surplus appropriate for an insurance company to support its overall business operations based on its size and risk profile. Under RBC requirements, regulatory compliance is determined by the ratio of a company’s total adjusted capital, as defined by the NAIC, to its company action level of RBC (known as the “RBC ratio”), also as defined by the NAIC. The company action level may be triggered if the RBC ratio is between 75% and 100% , which would require the insurer to submit a plan to the regulator detailing corrective action it proposes to undertake. As of December 31, 2017, the Company’s RBC ratio was nearly five times the aforementioned company action level. We are subject to certain insurance department regulatory restrictions as to the transfer of funds and payment of dividends to the holding company. Under Indiana laws and regulations, LNL may pay dividends to LNC without prior approval of the Commissioner, only from unassigned surplus and must receive prior approval of the Commissioner to pay a dividend if such dividend, along with all other dividends paid within the preceding 12 consecutive months, would exceed the statutory limitation. The current statutory limitation is the greater of 10% of the insurer’s contract holders’ surplus, as shown on its last annual statement on file with the Commissioner or the insurer’s statutory net gain from operations for the previous 12 months, but in no event to exceed statutory unassigned surplus. Indiana law gives the Commissioner broad discretion to disapprove requests for dividends in excess of these limits . LNL’s subsidiary, LLANY, a New York domiciled insurance company, is bound by similar restrictions, under New York law, with the applicable statutory limitation on dividends equal to the lesser of 10% of surplus to contract holders as of the immediately preceding calendar year or net gain from operations for the immediately preceding calendar year, not including realized capital gains. We expect that we could pay dividends of approximately $1.2 b illion in 2018 without prior approval from the respective state commissioner s . All payments of principal and interest on surplus notes must be approved by the respective Commissioner of Insurance. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 20 . Fair Value of Financial Instruments The carrying values and estimated fair values of our financial instruments (in millions) were as follows: As of December 31, 2017 As of December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value Assets AFS securities: Fixed maturity securities $ 93,340 $ 93,340 $ 87,866 $ 87,866 VIEs’ fixed maturity securities - - 200 200 Equity securities 246 246 275 275 Trading securities 1,533 1,533 1,624 1,624 Mortgage loans on real estate 10,662 10,773 9,761 9,719 Derivative investments (1) 845 845 900 900 Other investments 2,006 2,006 2,034 2,034 Cash and invested cash 947 947 2,057 2,057 Reinsurance related embedded derivatives - - 58 58 Other assets: GLB direct embedded derivatives 903 903 - - GLB ceded embedded derivatives 51 51 371 371 Indexed annuity ceded embedded derivatives 11 11 - - Separate account assets 144,219 144,219 128,397 128,397 Liabilities Future contract benefits – indexed annuity and IUL contracts embedded derivatives (1,418 ) (1,418 ) (1,139 ) (1,139 ) Other contract holder funds: Remaining guaranteed interest and similar contracts (592 ) (592 ) (629 ) (629 ) Account values of certain investment contracts (32,332 ) (36,161 ) (31,475 ) (35,647 ) Short-term debt (10 ) (10 ) (280 ) (280 ) Long-term debt (2,374 ) (2,677 ) (2,549 ) (2,739 ) Reinsurance related embedded derivatives (51 ) (51 ) - - Other liabilities: Derivative liabilities (1) (455 ) (455 ) (738 ) (738 ) GLB direct embedded derivatives - - (371 ) (371 ) GLB ceded embedded derivatives (954 ) (954 ) - - Benefit Plans’ Assets (2) 118 118 124 124 (1) We have master netting agreements with each of our derivative counterparties, which allow for the netting of our derivative asset and liability positions by counterparty. (2) Included in the funded statuses of the benefit plans, which is reported in other liabilities on our Consolidated Balance Sheets . Refer to Note 17 for information regarding our benefit plans . Valuation Methodologies and Associated Inputs for Financial Instruments Not Carried at Fair Value The following discussion outlines the methodologies and assumptions used to determine the fair value of our financial instruments not carried at fair value on our Consolidated Balance Sheets . Considerable judgment is required to develop these assumptions used to measure fair value . Accordingly, the estimates shown are not necessarily indicative of the amounts that would be realized in a one-time, current market exchange of all of our financial instruments . Mortgage Loans on Real Estate The fair value of mortgage loans on real estate is established using a discounted cash flow method based on credit rating, maturity and future income . The ratings for mortgages in good standing are based on property type, location, market conditions, occupancy, debt-service coverage, loan-to-value, quality of tenancy, borrower and payment record . The fair value for impaired mortgage loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s market price or the fair value of the collateral if the loan is collateral dependent . The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 2 within the fair value hierarchy . Other Investments The carrying value of our assets classified as other investments approximates fair value . Other investments includes primarily LPs and other privately held investments that are accounted for using the equity method of accounting and the carrying value is based on our proportional share of the net assets of the LPs . The inputs used to measure the fair value of our LPs and other privately held investments are classified as Level 3 within the fair value hierarchy . Other investments also includes securities that are not LPs or other privately held investments and the inputs used to measure the fair value of these securities are classified as Level 1 within the fair value hierarchy. Other Contract Holder Funds Other contract holder funds include remaining guaranteed interest and similar contracts and account values of certain investment contracts . The fair value for the remaining guaranteed interest and similar contracts is estimated using discounted cash flow calculations as of the balance sheet date . These calculations are based on interest rates currently offered on similar contracts with maturities that are consistent with those remaining for the contracts being valued . As of December 31, 2017 and 2016 , the remaining guaranteed interest and similar contracts carrying value approximated fair value . The fair value of the account values of certain investment contracts is based on their approximate surrender value as of the balance sheet date . The inputs used to measure the fair value of our other contract holder funds are classified as Level 3 within the fair value hierarchy. Short-Term and Long-Term Debt The fair value of short-term and long-term debt is based on quoted market prices . The inputs used to measure the fair value of our short-term and long-term debt are classified as Level 2 within the fair value hierarchy . Financial Instruments Carried at Fair Value We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2017 or 2016 , and we noted no changes in our valuation methodologies between these periods . The following summarizes our financial instruments carried at fair value (in millions) on a recurring basis by the fair value hierarchy levels described above: As of December 31, 2017 Quoted Prices in Active Markets for Significant Significant Identical Observable Unobservable Total Assets Inputs Inputs Fair (Level 1) (Level 2) (Level 3) Value Assets Investments: Fixed maturity AFS securities: Corporate bonds $ - $ 75,810 $ 5,350 $ 81,160 ABS - 927 26 953 U.S. government bonds 522 6 5 533 Foreign government bonds - 336 110 446 RMBS - 3,246 12 3,258 CMBS - 593 6 599 CLOs - 717 91 808 State and municipal bonds - 4,959 - 4,959 Hybrid and redeemable preferred securities 70 478 76 624 Equity AFS securities 28 57 161 246 Trading securities 73 1,411 49 1,533 Derivative investments (1) - 740 603 1,343 Cash and invested cash - 947 - 947 Other assets: GLB direct embedded derivatives - - 903 903 GLB ceded embedded derivatives - - 51 51 Indexed annuity ceded embedded derivatives - - 11 11 Separate account assets 814 143,405 - 144,219 Total assets $ 1,507 $ 233,632 $ 7,454 $ 242,593 Liabilities Future contract benefits – indexed annuity and IUL contracts embedded derivatives $ - $ - $ (1,418 ) $ (1,418 ) Reinsurance related embedded derivatives - (51 ) - (51 ) Other liabilities: Derivative liabilities (1) - (380 ) (573 ) (953 ) GLB ceded embedded derivatives - - (954 ) (954 ) Total liabilities $ - $ (431 ) $ (2,945 ) $ (3,376 ) Benefit Plans’ Assets $ - $ 118 $ - $ 118 As of December 31, 2016 Quoted Prices in Active Markets for Significant Significant Identical Observable Unobservable Total Assets Inputs Inputs Fair (Level 1) (Level 2) (Level 3) Value Assets Investments: Fixed maturity AFS securities: Corporate bonds $ - $ 71,554 $ 4,809 $ 76,363 ABS - 1,021 33 1,054 U.S. government bonds 366 11 - 377 Foreign government bonds - 390 111 501 RMBS - 3,394 3 3,397 CMBS - 339 7 346 CLOs - 676 68 744 State and municipal bonds - 4,495 - 4,495 Hybrid and redeemable preferred securities 60 453 76 589 VIEs’ fixed maturity securities - 200 - 200 Equity AFS securities 17 81 177 275 Trading securities 102 1,457 65 1,624 Derivative investments (1) - 1,148 599 1,747 Cash and invested cash - 2,057 - 2,057 Reinsurance related embedded derivatives - 58 - 58 Other assets – GLB ceded embedded derivatives - - 371 371 Separate account assets 813 127,584 - 128,397 Total assets $ 1,358 $ 214,918 $ 6,319 $ 222,595 Liabilities Future contract benefits – indexed annuity and IUL contracts embedded derivatives $ - $ - $ (1,139 ) $ (1,139 ) Other liabilities: Derivative liabilities (1) - (893 ) (692 ) (1,585 ) GLB direct embedded derivatives - - (371 ) (371 ) Total liabilities $ - $ (893 ) $ (2,202 ) $ (3,095 ) Benefit Plans’ Assets $ - $ 124 $ - $ 124 (1) Derivative investment assets and liabilities presented within the fair value hierarchy are presented on a gross basis by derivative type and not on a master netting basis by counterparty . The following summarizes changes to our financial instruments carried at fair value (in millions) and classified within Level 3 of the fair value hierarchy . This summary excludes any effect of amortization of DAC, VOBA, DSI and DFEL . The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology. For the Year Ended December 31, 2017 Gains Issuances, Transfers Items (Losses) Sales, Into or Included in Maturities, Out Beginning in OCI Settlements, of Ending Fair Net and Calls, Level 3, Fair Value Income Other (1) Net Net (2) Value Investments: (3) Fixed maturity AFS securities: Corporate bonds $ 4,809 $ 17 $ 199 $ (45 ) $ 370 $ 5,350 ABS 33 - - - (7 ) 26 U.S. government bonds - - - - 5 5 Foreign government bonds 111 - (1 ) - - 110 RMBS 3 - - 19 (10 ) 12 CMBS 7 - 1 54 (56 ) 6 CLOs 68 - - 124 (101 ) 91 State and municipal bonds - (1 ) - - 1 - Hybrid and redeemable preferred securities 76 - 14 - (14 ) 76 Equity AFS securities 177 1 (3 ) (13 ) (1 ) 161 Trading securities 65 3 8 (26 ) (1 ) 49 Derivative investments (93 ) (27 ) 127 23 - 30 Other assets: (4) GLB direct embedded derivatives - 903 - - - 903 GLB ceded embedded derivatives 371 (320 ) - - - 51 Indexed annuity ceded embedded derivatives - - - 11 - 11 Future contract benefits – indexed annuity and IUL contracts embedded derivatives (4) (1,139 ) (400 ) - 121 - (1,418 ) Other liabilities: (4) GLB direct embedded derivatives (371 ) 371 - - - - GLB ceded embedded derivatives - (954 ) - - - (954 ) Total, net $ 4,117 $ (407 ) $ 345 $ 268 $ 186 $ 4,509 For the Year Ended December 31, 2016 Gains Issuances, Transfers Items (Losses) Sales, Into or Included in Maturities, Out Beginning in OCI Settlements, of Ending Fair Net and Calls, Level 3, Fair Value Income Other (1) Net Net (2) Value Investments: (3) Fixed maturity AFS securities: Corporate bonds $ 4,273 $ 4 $ (29 ) $ 159 $ 402 $ 4,809 ABS 45 - (1 ) 14 (25 ) 33 U.S. government bonds - - - (2 ) 2 - Foreign government bonds 111 - - - - 111 RMBS 1 - - 54 (52 ) 3 CMBS 10 2 (1 ) 27 (31 ) 7 CLOs 551 - - 138 (621 ) 68 Hybrid and redeemable preferred securities 94 - (3 ) (15 ) - 76 Equity AFS securities 164 5 (4 ) 12 - 177 Trading securities 73 3 - 6 (17 ) 65 Derivative investments 555 (483 ) (1 ) (164 ) - (93 ) Other assets – GLB ceded embedded derivatives (4) 952 (581 ) - - - 371 Future contract benefits – indexed annuity and IUL contracts embedded derivatives (4) (1,100 ) (120 ) - 81 - (1,139 ) VIEs’ liabilities – derivative instruments (5) (4 ) 4 - - - - Other liabilities: Credit default swaps (5) (9 ) (6 ) - 15 - - GLB direct embedded derivatives (4) (952 ) 581 - - - (371 ) Total, net $ 4,764 $ (591 ) $ (39 ) $ 325 $ (342 ) $ 4,117 For the Year Ended December 31, 2015 Gains Issuances, Transfers Items (Losses) Sales, Into or Included in Maturities, Out Beginning in OCI Settlements, of Ending Fair Net and Calls, Level 3, Fair Value Income Other (1) Net Net (2) Value Investments: (3) Fixed maturity AFS securities: Corporate bonds $ 4,052 $ 4 $ (138 ) $ 298 $ 57 $ 4,273 ABS 33 - - 12 - 45 Foreign government bonds 110 - 1 - - 111 RMBS 1 3 - (3 ) - 1 CMBS 15 1 8 (14 ) - 10 CLOs 368 - 1 194 (12 ) 551 Hybrid and redeemable preferred securities 55 - (3 ) - 42 94 Equity AFS securities 157 1 4 3 (1 ) 164 Trading securities 73 2 (2 ) - - 73 Derivative investments 989 (90 ) (41 ) (303 ) - 555 Other assets – GLB ceded embedded derivatives (4) 174 778 - - - 952 Future contract benefits – indexed annuity and IUL contracts embedded derivatives (4) (1,170 ) (57 ) - 127 - (1,100 ) VIEs’ liabilities – derivative instruments (5) (13 ) 9 - - - (4 ) Other liabilities: Credit default swaps (5) (3 ) (6 ) - - - (9 ) GLB direct embedded derivatives (4) (174 ) (778 ) - - - (952 ) Total, net $ 4,667 $ (133 ) $ (170 ) $ 314 $ 86 $ 4,764 (1) The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 6 ). (2) Transfers into or out of Level 3 for AFS and trading securities are displayed at amortized cost as of the beginning-of-year. For AFS and trading securities, the difference between beginning-of-year amortized cost and beginning-of-year fair value was included in OCI and earnings, respectively, in prior years. (3) Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss). Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) . (4) Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). (5) The changes in fair value of the credit default swaps and contingency forwards are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). The following provides the components of the items included in issuances, sales, maturities, settlements and calls, net, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, (in millions) as reported above: For the Year Ended December 31, 2017 Issuances Sales Maturities Settlements Calls Total Investments: Fixed maturity AFS securities: Corporate bonds $ 850 $ (448 ) $ (98 ) $ (205 ) $ (144 ) $ (45 ) RMBS 19 - - - - 19 CMBS 55 - - (1 ) - 54 CLOs 124 - - - - 124 Equity AFS securities 18 (31 ) - - - (13 ) Trading securities 2 (27 ) - (1 ) - (26 ) Derivative investments 197 233 (407 ) - - 23 Other assets – indexed annuity ceded embedded derivatives 11 - - - - 11 Future contract benefits – indexed annuity and IUL contracts embedded derivatives (71 ) - - 192 - 121 Total, net $ 1,205 $ (273 ) $ (505 ) $ (15 ) $ (144 ) $ 268 For the Year Ended December 31, 2016 Issuances Sales Maturities Settlements Calls Total Investments: Fixed maturity AFS securities: Corporate bonds $ 560 $ (62 ) $ (23 ) $ (176 ) $ (140 ) $ 159 ABS 15 - - (1 ) - 14 U.S. government bonds - - - (2 ) - (2 ) RMBS 54 - - - - 54 CMBS 31 (1 ) - (3 ) - 27 CLOs 140 - - (2 ) - 138 Hybrid and redeemable preferred securities - (15 ) - - - (15 ) Equity AFS securities 18 (6 ) - - - 12 Trading securities 7 - - (1 ) - 6 Derivative investments 176 (169 ) (171 ) - - (164 ) Future contract benefits – indexed annuity and IUL contracts embedded derivatives (70 ) - - 151 - 81 Other liabilities – credit default swaps - 15 - - - 15 Total, net $ 931 $ (238 ) $ (194 ) $ (34 ) $ (140 ) $ 325 For the Year Ended December 31, 2015 Issuances Sales Maturities Settlements Calls Total Investments: Fixed maturity AFS securities: Corporate bonds $ 537 $ (38 ) $ (44 ) $ (117 ) $ (40 ) $ 298 ABS 13 - - (1 ) - 12 RMBS - (3 ) - - - (3 ) CMBS - - - (13 ) (1 ) (14 ) CLOs 217 - - (23 ) - 194 Equity AFS securities 43 (40 ) - - - 3 Trading securities 1 - - (1 ) - - Derivative investments 179 (162 ) (320 ) - - (303 ) Future contract benefits – indexed annuity and IUL contracts embedded derivatives (51 ) - - 178 - 127 Total, net $ 939 $ (243 ) $ (364 ) $ 23 $ (41 ) $ 314 The following summarizes changes in unrealized gains (losses) included in net income, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, related to financial instruments carried at fair value classified within Level 3 that we still held (in millions): For the Years Ended December 31, 2017 2016 2015 Derivative investments $ (266 ) $ (432 ) $ (102 ) Embedded derivatives: Indexed annuity and IUL contracts (14 ) (16 ) (84 ) Other assets – GLB ceded 1,904 1,122 (244 ) Other liabilities – GLB direct (1,904 ) (1,122 ) 244 VIEs’ liabilities – derivative instruments - 4 9 Credit default swaps - - (6 ) Total, net (1) $ (280 ) $ (444 ) $ (183 ) (1) Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) . The following provides the components of the transfers into and out of Level 3 (in millions) as reported above: For the Year Ended December 31, 2017 Transfers Transfers Into Out of Level 3 Level 3 Total Investments: Fixed maturity AFS securities: Corporate bonds $ 458 $ (88 ) $ 370 ABS 14 (21 ) (7 ) U.S. government bonds 5 - 5 RMBS - (10 ) (10 ) CMBS 3 (59 ) (56 ) CLOs 30 (131 ) (101 ) State and municipal bonds 2 (1 ) 1 Hybrid and redeemable preferred securities - (14 ) (14 ) Equity AFS securities - (1 ) (1 ) Trading securities 4 (5 ) (1 ) Total, net $ 516 $ (330 ) $ 186 For the Year Ended December 31, 2016 Transfers Transfers Into Out of Level 3 Level 3 Total Investments: Fixed maturity AFS securities: Corporate bonds $ 605 $ (203 ) $ 402 ABS 3 (28 ) (25 ) U.S. government bonds 9 (7 ) 2 RMBS 2 (54 ) (52 ) CMBS - (31 ) (31 ) CLOs - (621 ) (621 ) Trading securities 1 (18 ) (17 ) Total, net $ 620 $ (962 ) $ (342 ) For the Year Ended December 31, 2015 Transfers Transfers Into Out of Level 3 Level 3 Total Investments: Fixed maturity AFS securities: Corporate bonds $ 224 $ (167 ) $ 57 Foreign government bonds 4 (4 ) - CLOs 4 (16 ) (12 ) Hybrid and redeemable preferred securities 47 (5 ) 42 Equity AFS securities - (1 ) (1 ) Trading securities 4 (4 ) - Total, net $ 283 $ (197 ) $ 86 Transfers into and out of Level 3 are generally the result of observable market information on a security no longer being available or becoming available to our pricing vendors . For the years ended December 31, 2017 , 2016 and 2015 , transfers in and out of Level 3 were attributable primarily to the securities’ observable market information no longer being available or becoming available . Transfers into and out of Levels 1 and 2 are generally the result of a change in the type of input used to measure the fair value of an asset or liability at the end of the reporting period . When quoted prices in active markets become available, transfers from Level 2 to Level 1 will result . When quoted prices in active markets become unavailable, but we are able to employ a valuation methodology using significant observable inputs, transfers from Level 1 to Level 2 will result . For the years ended December 31, 201 7 and 201 6, the transfers between Levels 1 and 2 of the fair value hierarchy were less than $1 million for our financial instruments carried at fair value . For the year ended December 31, 2015 , the transfers from Level 2 to Level 1 of the fair value hierarchy were $ 172 million for our financial instruments carried at fair value which was attributable to quoted market prices be coming available . The following summarizes the fair value (in millions), valuation techniques and significant unobservable inputs of the Level 3 fair value measurements as of December 31, 2017 : Fair Valuation Significant Assumption or Value Technique Unobservable Inputs Input Ranges Assets Investments: Fixed maturity AFS and trading securities: Corporate bonds $ 2,395 Discounted cash flow Liquidity/duration adjustment (1) 0.5 % - 21.0 % ABS 24 Discounted cash flow Liquidity/duration adjustment (1) 3.0 % - 3.0 % Foreign government bonds 78 Discounted cash flow Liquidity/duration adjustment (1) 1.7 % - 3.4 % Hybrid and redeemable preferred securities 4 Discounted cash flow Liquidity/duration adjustment (1) 1.8 % - 1.8 % Equity AFS securities 22 Discounted cash flow Liquidity/duration adjustment (1) 4.5 % - 4.9 % Other assets: GLB direct and ceded embedded derivatives 954 Discounted cash flow Long-term lapse rate (2) 1 % - 30 % Utilization of guaranteed withdrawals (3) 85 % - 100 % Claims utilization factor (4) 60 % - 100 % Premiums utilization factor (4) 80 % - 115 % NPR (5) 0.01 % - 0.25 % Mortality rate (6) (8) Volatility (7) 1 % - 29 % Indexed annuity ceded embedded derivatives 11 Discounted cash flow Lapse rate (2) 1 % - 9 % Mortality rate (6) (8) Liabilities Future contract benefits – indexed annuity and IUL contracts embedded derivatives $ (1,418 ) Discounted cash flow Lapse rate (2) 1 % - 9 % Mortality rate (6) (8) Other liabilities – GLB ceded embedded derivatives (954 ) Discounted cash flow Long-term lapse rate (2) 1 % - 30 % Utilization of guaranteed withdrawals (3) 85 % - 100 % Claims utilization factor (4) 60 % - 100 % Premiums utilization factor (4) 80 % - 115 % NPR (5) 0.01 % - 0.25 % Mortality rate (6) (8) Volatility (7) 1 % - 29 % (1) The liquidity/duration adjustment input represents an estimated market participant composite of adjustments attributable to liquidity premiums, expected durations, structures and credit quality that would be applied to the market observable information of an investment. (2) The lapse rate input represents the estimated probability of a contract surrendering during a year, and thereby forgoing any future benefits . The range for indexed annuity and IUL contracts represents the lapse rates during the surrender charge period. (3) The utilization of guaranteed withdrawals input represents the estimated percentage of contract holders that utilize the guaranteed withdrawal feature. (4) The utilization factors are applied to the present value of claims or premiums, as appropriate, in the GLB reserve calculation to estimate the impact of inefficient withdrawal behavior, including taking less than or more than the maximum guaranteed withdrawal. (5) The NPR input represents the estimated additional credit spread that market participants would apply to the market observable discount rate when pricing a contract. (6) The mortality rate input represents the estimated probability of when an individual belonging to a particular group, categorized according to age or some other factor such as gender, will die . (7) The volatility input represents overall volatilities assumed for the underlying variable annuity funds, which include a mixture of equity and fixed-income assets . Fair value of the variable annuity GLB embedded derivatives would increase if higher volatilities were used for valuation. (8) The mortality rate is based on a combination of company and industry experience, adjusted for improvement factors. From the table above, we have excluded Level 3 fair value measurements obtained from independent, third-party pricing sources . We do not develop the significant inputs used to measure the fair value of these assets and liabilities, and the information regarding the significant inputs is not readily available to us . Independent broker-quoted fair values are non-binding quotes developed by market makers or broker-dealers obtained from third-party sources recognized as market participants . The fair value of a broker-quoted asset or liability is based solely on the receipt of an updated quote from a single market maker or a broker-dealer recognized as a market participant as we do not adjust broker quotes when used as the fair value measurement for an asset or liability . Significant increases or decreases in any of the quotes received from a third-party broker-dealer may result in a significantly higher or lower fair value measurement . Changes in any of the significant inputs presented in the table above may result in a significant change in the fair value measurement of the asset or liability as follows: · Investments – An increase in the liquidity/duration adjustment input would result in a decrease in the fair value measurement. · Indexed annuity and IUL contracts embedded derivatives – For direct embedded derivatives, a n increase in the lapse rate or mortality rate inputs would result in a decrease in the fair value measurement . · GLB embedded derivatives – Assuming our GLB direct embedded derivativ es are in a liability position: an increase in our lapse rate, NPR or mortality rate inputs would result in a decrease in the fair value measurement; and an increase in the utilization of guarantee d withdrawal or volatility inputs would result in an increase in the fair value measurement. For each category discussed above, the unobservable inputs are not inter-related; therefore, a directional change in one input will not affect the other inputs . As part of our ongoing valuation process, we assess the reasonableness of our valuation techniques or models and make adjustments as necessary . For more information, see “Summary of Significant Accounting Policies” above . |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information [Abstract] | |
Segment Information | 21. Segment Information We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments . We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments . Our reporting segments reflect the manner by which our chief operating decision makers view and manage the business . The following is a brief description of these segments and Other Operations. The Annuities segment provides tax-deferred investment growth and lifetime income opportunities for its clients by offering fixed (including indexed) and variable annuities. The Retirement Plan Services segment provides employer-sponsored defined benefit and individual retirement accounts, as well as individual and group variable annuities, group fixed annuities and mutual-fund based programs in the retirement plan marketplace. The Life Insurance segment focuses in the creation and protection of wealth through life insurance products, including term insurance, a linked-benefit product (which is a UL policy linked with riders that provide for long-term care costs), IUL and both single and survivorship versions of UL and VUL, including corporate-owned UL and VUL insurance and bank-owned UL and VUL insurance products. The Group Protection segment offers principally group non-medical insurance products, including term life, universal life, disability, dental, vision, accident and critical illness insurance to the employer market place through various forms of contributory and non-contributory plans. Its products are marketed primarily through a national distribution system of regional group offices. These offices develop business through employee benefit brokers, third-party administrators and other employee benefit firms. Other Operations includes investments related to our excess capital; investments in media properties (see Note 3 for more information) and other corporate investments; benefit plan net liability; the unamortized deferred gain on indemnity reinsurance related to the sale of reinsurance; the results of certain disability income business; our run-off institutional pension business, the majority of which was sold on a group annuity basis; debt costs; and strategic digitization expense. Segment operating revenues and income (loss) from operations are internal measures used by our management and Board of Directors to evaluate and assess the results of our segments . Income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable: · Realized gains and losses associated with the following (“excluded realized gain (loss)”): § Sales or disposals and impairments of securities ; § Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities; § GLB rider fees ceded to LNBAR; § The net valuation premium of the GLB attributed rider fees ; and § Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for at fair value; · Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance; · Gains (losses) on early extinguishment of debt; · Losses from the impairment of intangible assets; · Income (loss) from discontinued operations; · Acquisition and integration costs related to mergers and acquisitions; and · Income (loss) from the initial adoption of new accounting standards, regulations, and policy changes including the net im pact from the Tax Cuts and Jobs Act. Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable: · Excluded realized gain (loss); · Revenue adjustments from the initial adoption of new accounting standards; · Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and · Amortization of deferred gains arising from r eserve changes on business sold through reinsurance. We use our prevailing corporate federal income tax rate of 35 % , where applicable, while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure . Operating revenues and income (loss) from operations do not replace revenues and net income as the GAAP measures of our consolidated results of operations. Segment information (in millions) was as follows: For the Years Ended December 31, 2017 2016 2015 Revenues Operating revenues: Annuities $ 4,034 $ 3,710 $ 3,815 Retirement Plan Services 1,152 1,092 1,090 Life Insurance 6,128 5,798 5,484 Group Protection 2,200 2,129 2,356 Other Operations 263 301 335 Excluded realized gain (loss), pre-tax (630 ) (690 ) (400 ) Amortization of deferred gain arising from reserve changes on business sold through reinsurance, pre-tax 1 3 3 Total revenues $ 13,148 $ 12,343 $ 12,683 For the Years Ended December 31, 2017 2016 2015 Net Income (Loss) Income (loss) from operations: Annuities $ 1,072 $ 971 $ 1,032 Retirement Plan Services 142 121 134 Life Insurance 522 464 296 Group Protection 103 65 42 Other Operations (30 ) - (73 ) Excluded realized gain (loss), after-tax (409 ) (450 ) (260 ) Gain (loss) on early extinguishment of debt, after-tax (3 ) - - Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance, after-tax - 2 2 Net impact from the Tax Cuts and Jobs Act 1,526 - - Impairment of intangibles, after-tax (905 ) - - Net income (loss) $ 2,018 $ 1,173 $ 1,173 For the Years Ended December 31, 2017 2016 2015 Net Investment Income Annuities $ 982 $ 983 $ 977 Retirement Plan Services 893 855 842 Life Insurance 2,496 2,403 2,390 Group Protection 167 176 183 Other Operations 222 214 219 Total net investment income $ 4,760 $ 4,631 $ 4,611 For the Years Ended December 31, 2017 2016 2015 Amortization of DAC and VOBA, Net of Interest Annuities $ 402 $ 310 $ 284 Retirement Plan Services 26 27 29 Life Insurance 455 709 806 Group Protection 79 126 80 Total amortization of DAC and VOBA, net of interest $ 962 $ 1,172 $ 1,199 For the Years Ended December 31, 2017 2016 2015 Federal Income Tax Expense (Benefit) Annuities $ 198 $ 261 $ 281 Retirement Plan Services 50 43 46 Life Insurance 236 210 118 Group Protection 55 35 23 Other Operations (78 ) (42 ) (33 ) Excluded realized gain (loss) (220 ) (241 ) (141 ) Gain (loss) on early extinguishment of debt (2 ) - - Reserve changes (net of related amortization) on business sold through reinsurance - 1 1 Net impact from the Tax Cuts and Jobs Act (1,526 ) - - Total federal income tax expense (benefit) $ (1,287 ) $ 267 $ 295 As of December 31, 2017 2016 Assets Annuities $ 144,035 $ 132,956 Retirement Plan Services 37,077 34,346 Life Insurance 81,565 75,868 Group Protection 4,033 4,007 Other Operations 15,162 14,874 Total assets $ 281,872 $ 262,051 |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Data | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Disclosures of Cash Flow Data [Abstract] | |
Supplemental Disclosures of Cash Flow Data | 22 . Supplemental Disclosures of Cash Flow Data The following summarizes our supplemental cash flow data (in millions): For the Years Ended December 31, 2017 2016 2015 Interest paid $ 123 $ 91 $ 106 Income taxes paid (received) 215 121 125 Significant non-cash investing and financing transactions: Acquisition of note receivable from affiliate 74 42 54 Other assets received in our financing transaction - - 252 Exchange of surplus note for promissory note with affiliate: Carrying value of asset 109 124 123 Carrying value of liability (109 ) (124 ) (123 ) Net asset (liability) from exchange $ - $ - $ - |
Quarterly Results of Operations
Quarterly Results of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Results of Operations [Abstract] | |
Quarterly Results of Operations | 23 . Quarterly Results of Operations (Unaudited) The unaudited quarterly results of operations (in millions) were as follows: For the Three Months Ended March 31, June 30, September 30, December 31, (1) 2017 Total revenues $ 3,229 $ 3,237 $ 3,269 $ 3,413 Total expenses 2,881 2,840 2,809 3,887 Net income (loss) 349 321 385 963 2016 Total revenues $ 2,885 $ 2,930 $ 3,181 $ 3,347 Total expenses 2,781 2,677 2,739 2,706 Net income (loss) 125 219 359 470 (1) Fourth quarter 2017 results include a goodwill impairment charge and the impacts of remeasuring our existing deferred t ax balances for the impact of the Tax Act as disclosed elsewhere herein. |
Transactions With Affiliates
Transactions With Affiliates | 12 Months Ended |
Dec. 31, 2017 | |
Transactions With Affiliates [Abstract] | |
Transactions With Affiliates | 2 4. Transactions with Affiliates The following summarizes transactions with affiliates (in millions) and the associated line item on our Consolidated Balance Sheets: As of December 31, 2017 2016 Assets with affiliates: Accrued inter-company interest receivable $ 8 $ 8 Accrued investment income Bonds 1,444 1,611 Fixed maturity AFS securities Limited partnerships (66 ) - Other investments Ceded reinsurance contracts (188 ) (191 ) Deferred acquisition costs and value of business acquired Ceded reinsurance contracts 2,152 2,148 Reinsurance recoverables Ceded reinsurance contracts 8 112 Reinsurance related embedded derivatives Ceded reinsurance contracts 39 207 Other assets Cash management agreement 441 164 Other assets Service agreement receivable 15 27 Other assets Liabilities with affiliates: Accrued inter-company interest payable 29 26 Other liabilities Assumed reinsurance contracts 32 31 Future contract benefits Assumed reinsurance contracts 400 403 Other contract holder funds Service agreement payable 8 34 Other liabilities Ceded reinsurance contracts (47 ) (47 ) Other contract holder funds Ceded reinsurance contracts 2,587 2,851 Funds withheld reinsurance liabilities Ceded reinsurance contracts (166 ) (171 ) Deferred gain on business sold through reinsurance Ceded reinsurance contracts 984 84 Other liabilities Inter-company short-term debt 10 280 Short-term debt Inter-company long-term debt 2,374 2,549 Long-term debt The following summarizes transactions with affiliates (in millions) and the associated line item on our Consolidated Statements of Comprehensive Income (Loss): For the Years Ended December 31, 2017 2016 2015 Revenues with affiliates: Premiums received on assumed (paid on ceded) $ (393 ) $ (389 ) $ (411 ) Insurance premiums reinsurance contracts Net investment income on inter-company notes 42 38 31 Net investment income Fees for management of general account (100 ) (117 ) (109 ) Net investment income Net investment income on ceded funds withheld treaties (84 ) (69 ) (62 ) Net investment income Realized gains (losses) on ceded reinsurance contracts: GLB reserves embedded derivatives (1,055 ) (516 ) 664 Realized gain (loss) Reinsurance related settlements 951 488 (881 ) Realized gain (loss) Other gains (losses) (150 ) (93 ) 157 Realized gain (loss) Amortization of deferred gain on reinsurance contracts (5 ) (5 ) (5 ) Amortization of deferred gain on business sold through reinsurance Benefits and expenses with affiliates: Reinsurance (recoveries) benefits on ceded reinsurance (299 ) (424 ) (478 ) Benefits Ceded reinsurance contracts (12 ) (14 ) (15 ) Commissions and other expenses Service agreement payments 3 76 42 Commissions and other expenses Interest expense on inter-company debt 120 111 102 Interest and debt expense Interest credited on assumed reinsurance contracts 67 61 59 Interest credited Bonds LNC issues bonds to us for a predetermined face value to be repaid by LNC at a predetermined maturity with a specified interest rate. Cash Management Agreement In order to manage our capital more efficiently, we participate in an inter-company cash management program where LNC can lend to or borrow from us to meet short-term borrowing needs . The cash management program is essentially a series of demand loans, which are permitted under applicable insurance laws, among LNC and its affiliates that reduces overall borrowing costs by allowing LNC and its subsidiaries to access internal resources instead of incurring third-party transaction costs . The borrowing and lending limit is currently 3% of our admitte d assets as of December 31, 2017 . Service Agreement In accordance with service agreements with LNC and other subsidiaries of LNC for personnel and facilities usage, general management services and investment management services, we receive services from and provide services to affiliated companies and receive an allocation of corporate overhead . Corporate overhead expenses are allocated based on specific methodologies for each function . The majority of the expenses are allocated based on the following methodologies: headcount, capital, investments by product, assets under management, weighted policies in force and sales. Ceded Reinsurance Contracts As discussed in Note 9, we cede insurance contracts to and assume insurance contracts from LNBAR. We cede certain guaranteed benefit risks (including certain GDB and GWB benefits) to LNBAR. As discussed in Note 6, we cede the GLB reserves embedded derivatives and the related hedge results to LNBAR. Substantially all reinsurance ceded to affiliated companies is with unauthorized companies . To take reserve credit for such reinsurance, we hold assets from the reinsurer, including funds held under reinsurance treaties, and are the beneficiary of LOCs aggregating to $610 million and $320 million as of December 31, 2017 and 2016, respectively . The LOCs are obtained by the affiliate reinsurer and issued by banks in order for the Company to recognize the reserve credit. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 2 5. Subsequent Events On January 19, 2018 , LNL and, for the limited purposes set forth therein, LNC, entered into a Master Transaction Agreement (the “Master Transaction Agreement”) with Liberty Mutual Insurance Company (“LMIC”), Liberty Mutual Fire Insurance Company (collectively with LMIC, “Sellers”), for the limited purposes set forth therein, Liberty Mutual Group Inc. (“Liberty”), Protective Life Insurance Company (“Reinsurer”), and for the limited purposes set forth therein, Protective Life Corporation, to acquire all of the issued and outstanding capital stock of Liberty Life Assurance Company of Boston (“Liberty Life”), which currently operates Liberty’s Group Benefits Business (the “Liberty Group Business”) and Individual Life and Annuity Business (the “Liberty Life Business”), for cash consideration of approximately $3.3 billion (the “Liberty Transaction”). The consideration includes approximately $1.4 billion total net investment for the Liberty Group Business, including a purchase price of $1.0 billion and $425 million in required capital. The remaining components of the payment to Sellers include $410 million of individual life and annuity value paid by Reinsurer, $1.2 billion associated with excess capital in Liberty Life and $211 million of tax items. Additionally, pursuant to the Master Transaction Agreement, Liberty Life and Reinsurer agreed to enter into a reinsurance agreement (the “Reinsurance Agreement”) and related ancillary documents at the closing of the Liberty Transaction. On the terms and subject to the conditions of the Reinsurance Agreement, Liberty Life will cede to Reinsurer, effective as of the closing of the Liberty Transaction, the insurance policies relating to the Liberty Life Business. The aggregate statutory reserves of Liberty Life to be ceded to Reinsurer as of the closing of the Liberty Transaction are expected to be approximately $13 billion. To support its obligations under the Reinsurance Agreement, Reinsurer will establish a trust account for the benefit of LNL. The Liberty Transaction is subject to the satisfaction or waiver of customary closing conditions, including regulatory approvals and the execution of the Reinsurance Agreement and related ancillary documents. LNL expects the Liberty Transaction to be completed in the second quarter of 2018, pending regulatory approvals and other customary closing conditions. We have requested regulatory approval for the Liberty Transaction and expect to receive such approval in due course. |
SCHEDULE I - CONSOLIDATED SUMMA
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Consolidated Summary of Investments [Abstract] | |
Consolidated Summary of Investments | THE LINCOLN NATIONAL LIFE INSURANCE COMPANY SCHEDULE I – CONSOLIDATED SUMMARY OF INVESTMENTS – OTHER THAN INVESTMENTS IN RELATED PARTIES (in millions ) Column A Column B Column C Column D As of December 31, 2017 Fair Carrying Type of Investment Cost Value Value Available-For-Sale Fixed Maturity Securities (1) Bonds: U.S. government bonds $ 497 $ 533 $ 533 Foreign government bonds 391 446 446 State and municipal bonds 4,033 4,959 4,959 Public utilities 12,356 13,763 13,763 All other corporate bonds 62,565 67,397 67,397 Mortgage-backed and asset-backed securities 5,399 5,618 5,618 Hybrid and redeemable preferred securities 561 624 624 Total available-for-sale fixed maturity securities 85,802 93,340 93,340 Available-For-Sale Equity Securities (1) Common stocks: Banks, trusts and insurance companies 184 188 188 Industrial, miscellaneous and all other 44 33 33 Non-redeemable preferred securities 19 25 25 Total available-for-sale equity securities 247 246 246 Trading securities 1,348 1,533 1,533 Mortgage loans on real estate 10,662 10,773 10,662 Real estate 11 N/A 11 Policy loans 2,379 N/A 2,379 Derivative investments (2) 1,538 845 845 Other investments 2,006 2,006 2,006 Total investments $ 103,993 $ 111,022 (1) Investments deemed to have declines in value that are other-than-temporary are written down or reserved for to reduce the carrying value to their estimated realizable value. (2) Derivative investment assets were offset by $455 million in derivative liabilities reflected in other liabilities on our Consolidated Balance Sheets. |
SCHEDULE III - CONSOLIDATED SUP
SCHEDULE III - CONSOLIDATED SUPPLEMENTARY INSURANCE INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | THE LINCOLN NATIONAL LIFE INSURANCE COMPANY SCHEDULE III – CONDENSED SUPPLEMENTARY INSURANCE INFORMATION (in millions) Column A Column B Column C Column D Column E Column F Other Future Contract DAC and Contract Unearned Holder Insurance Segment VOBA Benefits Premiums (1) Funds Premiums (2) As of or For the Year Ended December 31, 2017 Annuities $ 3,806 $ 1,942 $ - $ 21,739 $ 475 Retirement Plan Services 197 4 - 18,719 - Life Insurance 4,225 12,023 - 38,705 546 Group Protection 180 2,262 - 161 1,998 Other Operations - 5,832 - 157 (1 ) Total $ 8,408 $ 22,063 $ - $ 79,481 $ 3,018 As of or For the Year Ended December 31, 2016 Annuities $ 3,836 $ 2,485 $ - $ 21,227 $ 162 Retirement Plan Services 203 4 - 17,878 (6 ) Life Insurance 4,913 10,697 - 38,510 481 Group Protection 191 2,280 - 168 1,940 Other Operations - 5,215 - 323 2 Total $ 9,143 $ 20,681 $ - $ 78,106 $ 2,579 As of or For the Year Ended December 31, 2015 Annuities $ 3,793 $ 2,095 $ - $ 21,182 $ 246 Retirement Plan Services 217 4 - 16,583 (7 ) Life Insurance 5,243 9,845 - 37,808 422 Group Protection 240 2,347 - 170 2,163 Other Operations - 5,602 - 740 1 Total $ 9,493 $ 19,893 $ - $ 76,483 $ 2,825 (1) Unearned premiums are included in Column C , future contract benefits . (2) Includes amounts ceded to LNBAR. THE LINCOLN NATIONAL LIFE INSURANCE COMPANY SCHEDULE III – CONDENSED SUPPLEMENTARY INSURANCE INFORMATION (Continued) (in millions) Column A Column G Column H Column I Column J Column K Benefits Amortization Net and of DAC Other Investment Interest and Operating Premiums Segment Income Credited VOBA Expenses Written As of or For the Year Ended December 31, 2017 Annuities $ 982 $ 1,077 $ 402 $ 1,285 $ - Retirement Plan Services 893 539 26 395 - Life Insurance 2,496 4,242 455 678 - Group Protection 167 1,352 79 611 - Other Operations 222 166 - 205 - Total $ 4,760 $ 7,376 $ 962 $ 3,174 $ - As of or For the Year Ended December 31, 2016 Annuities $ 983 $ 972 $ 310 $ 1,196 $ - Retirement Plan Services 855 514 27 387 - Life Insurance 2,403 3,774 709 642 - Group Protection 176 1,324 126 579 - Other Operations 214 190 - 153 - Total $ 4,631 $ 6,774 $ 1,172 $ 2,957 $ - As of or For the Year Ended December 31, 2015 Annuities $ 977 $ 1,008 $ 284 $ 1,210 $ - Retirement Plan Services 842 497 29 384 - Life Insurance 2,390 3,662 806 603 - Group Protection 183 1,637 80 574 - Other Operations 219 197 - 244 - Total $ 4,611 $ 7,001 $ 1,199 $ 3,015 $ - |
SCHEDULE IV - CONSOLIDATED REIN
SCHEDULE IV - CONSOLIDATED REINSURANCE | 12 Months Ended |
Dec. 31, 2017 | |
Consolidated Reinsurance [Abstract] | |
Reinsurance Supplemental Schedule | Column A Column B Column C Column D Column E Column F Ceded Assumed Percentage to from of Amount Gross Other Other Net Assumed Description Amount Companies Companies Amount to Net As of or For the Year Ended December 31, 2017 Individual life insurance in force (1) $ 1,014,841 240,034 13,476 $ 788,283 1.7% Premiums: Life insurance and annuities (2) 8,783 1,786 90 7,087 1.3% Accident and health insurance 1,320 31 11 1,300 0.8% Total premiums $ 10,103 $ 1,817 $ 101 $ 8,387 As of or For the Year Ended December 31, 2016 Individual life insurance in force (1) $ 969,563 237,520 14,522 $ 746,565 1.9% Premiums: Life insurance and annuities (2) 8,098 1,695 93 6,496 1.4% Accident and health insurance 1,275 33 12 1,254 1.0% Total premiums $ 9,373 $ 1,728 $ 105 $ 7,750 As of or For the Year Ended December 31, 2015 Individual life insurance in force (1) $ 962,457 $ 233,309 $ 14,969 $ 744,117 2.0% Premiums: Life insurance and annuities (2) 7,937 1,616 69 6,390 1.1% Accident and health insurance 1,417 36 14 1,395 1.0% Total premiums $ 9,354 $ 1,652 $ 83 $ 7,785 (1) Includes Group Protection segment and Other Operations in-force amounts. (2) Includes insurance fees on universal life and other interest-sensitive products. |
Nature of Operations, Basis o35
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Nature Of Operations | Nature of Operations The Lincoln National Life Insurance Company (“LNL ” or the “Company,” which also may be referred to as “we,” “our” or “us”) , a wholly-owned subsidiary of Lincoln National Corporation (“LNC” or the “Parent Company”), is domiciled in the state of Indiana. We own 100% of the outstanding common stock of one insurance company subsidiary, Lincoln Life & Annuity Company of New York (“LLANY”). We also own several non-insurance companies, including Lincoln Financial Distributors, our wholesale distributor, and Lincoln Financial Advisors Corporation, part of LNC’s retail distributor, Lincoln Financial Network. LNL’s principal businesses consist of underwriting annuities, deposit-type contracts and life insurance through multiple distribution channels. LNL is licensed and sells its products throughout the U.S. and several U.S. territories. See Note 21 for additional information. |
Basis Of Presentation | Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with United States of America generally accepted accounting principles (“GAAP”). Certain GAAP policies, which significantly affect the determination of financial condition , results of operations and cash flows, are summarized below. |
Principles Of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of LNL and all other entities in which we have a controlling financial interest and any variable interest entities (“VIEs”) in which we are the primary beneficiary. We use the equity method of accounting to recognize all of our investments in limited liability partnerships. All material inter-company accounts and transactions have been eliminated in consolidation. Our involvement with VIEs is primarily to invest in assets that allow us to gain exposure to a broadly diversified portfolio of asset classes. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support or where investors lack certain characteristics of a controlling financial interest. We assess our contractual, ownership or other interests in a VIE to determine if our interest participates in the variability the VIE was designed to absorb and pass onto variable interest holders. We perform an ongoing qualitative assessment of our variable interests in VIEs to determine whether we have a controlling financial interest and would therefore be considered the primary beneficiary of the VIE. If we determine we are the primary beneficiary of a VIE, we consolidate the assets and liabilities of the VIE in our consolidated financial statements. |
Accounting Estimates and Assumptions | Accounting Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Those estimates are inherently subject to change and actual results could differ from those estimates. Included among the material (or potentially material) reported amounts and disclosures that require extensive use of estimates are: fair value of certain invested assets and derivatives, other-than-temporary impairment (“OTTI”) and asset valuation allowances, deferred acquisition costs (“DAC”) , value of business acquired (“VOBA”) , deferred sales inducements (“DSI”), goodwill, future contract benefits, other contract holder funds including deferred front-end loads (“DFEL”) , pension plans, stock-based incentive compensation, income taxes and the potential effects of resolving litigated matters. |
Business Combinations | Business Combinations We use the acquisition method of accounting for all business combination transactions, and accordingly, recognize the fair values of assets acquired, liabilities assumed and any noncontrolling interests in our consolidated financial statements. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period as more information becomes available relative to the fair values as of the acquisition date. The consolidated financial statements include the results of operations of any acquired company since the acquisition date. |
Fair Value Measurement | Fair Value Measurement Our measurement of fair value is based on assumptions used by market participants in pricing the asset or liability, which may include inherent risk, restrictions on the sale or use of an asset or non-performance risk (“NPR”), which would include our own credit risk. Our estimate of an exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability (“exit price”) in the principal market, or the most advantageous market in the absence of a principal market, for that asset or liability, as opposed to the price that would be paid to acquire the asset or receive a liability (“entry price”). Pursuant to the Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification TM (“ASC”), we categorize our financial instruments carried at fair value into a three-level fair value hierarchy, based on the priority of inputs to the respective valuation technique. The three-level hierarchy for fair value measurement is defined as follows: · Level 1 – inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date, except for large holdings subject to “blockage discounts” that are excluded; · Level 2 – inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and · Level 3 – inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and we make estimates and assumptions related to the pricing of the asset or liability, including assumptions regarding risk. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. When a determination is made to classify an asset or liability within Level 3 of the fair value hierarchy, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. Because certain securities trade in less liquid or illiquid markets with limited or no pricing information, the determination of fair value for these securities is inherently more difficult. However, Level 3 fair value investments may include, in addition to the unobservable or Level 3 inputs, observable components, which are components that are actively quoted or can be validated to market-based sources. |
Available-For-Sale Securities - Fair Value Methodologies and Associated inputs | Available-For-Sale Securities – Fair Valuation Methodologies and Associated Inputs Securities classified as available -for-sale (“AFS”) consist of fixed maturity and equity securities and are stated at fair value with unrealized gains and losses included within accumulated other comprehensive income (loss) (“AOCI”), net of associated DAC, VOBA, DSI , future contract benefits, other contract holder funds and deferred income taxes. We measure the fair value of our securities classified as AFS based on assumptions used by market participants in pricing the security. The most appropriate valuation methodology is selected based on the specific characteristics of the fixed maturity or equity security, and we consistently apply the valuation methodology to measure the security’s fair value. Our fair value measurement is based on a market approach that utilizes prices and other relevant information generated by market transactions involving identical or comparable securities. Sources of inputs to the market approach primarily include third-party pricing services, independent broker quotations or pricing matrices. We do not adjust prices received from third parties; however, we do analyze the third-party pricing services’ valuation methodologies and related inputs and perform additional evaluation to determine the appropriate level within the fair value hierarchy. The observable and unobservable inputs to our valuation methodologies are based on a set of standard inputs that we generally use to evaluate all of our AFS securities. Observable inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. In addition, market indicators, industry and economic events are monitored, and further market data is acquired if certain triggers are met. For certain security types, additional inputs may be used, or some of the inputs described above may not be applicable. For private placement securities, we use pricing matrices that utilize observable pricing inputs of similar public securities and Treasury yields as inputs to the fair value measurement. Depending on the type of security or the daily market activity, standard inputs may be prioritized differently or may not be available for all AFS securities on any given day. For broker-quoted only securities, non-binding quotes from market makers or broker-dealers are obtained from sources recognized as market participants. For securities trading in less liquid or illiquid markets with limited or no pricing information, we use unobservable inputs to measure fair value. The following summarizes our fair valuation methodologies and associated inputs, which are particular to the specified security type and are in addition to the defined standard inputs to our valuation methodologies for all of our AFS securities discussed above: · Corporate bonds and U.S. g overnment bonds – We also use Trade Reporting and Compliance Engine TM reported tables for our corporate bonds and vendor trading platform data for our U.S. g overnment bonds . · Mortg age- and asset-backed securities (“ABS”) – We also utilize additional inputs, which include new issues data, monthly payment information and monthly collateral performance, including prepayments, severity, delinquencies, step-down features and over collateralization features for each of our mortgage-backed securities (“MBS”), which include collateralized mortgage obligations and mortgage pass through securities backed by residential mortgages (“RMBS”), commercial mortgage-backed securities (“CMBS”) , collateralized loan obligations (“CLOs”) and collateralized debt obligations (“C D Os”). · State and municipal bonds – We also use additional inputs that include information from the Municipal Securities Rule Making Board, as well as material event notices, new issue data, issuer financial statements and Municipal Market Data benchmark yields for our state and municipal bonds. · Hybrid and redeemable preferred and equity securities – We also utilize additional inputs of exchange prices (underlying and common stock of the same issuer) for our hybrid and redeemable preferred and equity securities . In order to validate the pricing information and broker-dealer quotes, we employ, where possible, procedures that include comparisons with similar observable positions, comparisons with subsequent sales and observations of general market movements for those security classes. We have policies and procedures in place to review the process that is utilized by our third-party pricing service and the output that is provided to us by the pricing service. On a periodic basis, we test the pricing for a sample of securities to evaluate the inputs and assumptions used by the pricing service, and we perform a comparison of the pricing service output to an alternative pricing source. We also evaluate prices provided by our primary pricing service to ensure that they are not stale or unreasonable by reviewing the prices for unusual changes from period to period based on certain parameters or for lack of change from one period to the next . |
AFS Securities - Evaluation for Recovery of Amortized Cost | AFS Securities – Evaluation for Recovery of Amortized Cost We regularly review our AFS securities for declines in fair value that we determine to be other-than-temporary. For an equity security, if we do not have the ability and intent to hold the security for a sufficient period of time to allow for a recovery in value, we conclude that an OTTI has occurred and the amortized cost of the equity security is written down to the current fair value, with a corresponding charge to realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). When assessing our ability and intent to hold the equity security to recovery, we consider, among other things, the severity and duration of the decline in fair value of the equity security as well as the cause of the decline, a fundamental analysis of the liquidity, and business prospects and overall financial condition of the issuer. For our fixed maturity AFS securities (also referred to as “debt securities”), we generally consider the following to determine whether our debt securities with unrealized losses are other-than-temporarily impaired: · The estimated range and average period until recovery; · The estimated range and average holding period to maturity; · Remaining payment terms of the security; · Current delinquencies and nonperforming assets of underlying collateral; · Expected future default rates; · Collateral value by vintage, geographic region, industry concentration or property type; · Subordination levels or other credit enhancements as of the balance sheet date as compared to origination; and · Contractual and regulatory cash obligations. For a debt security, if we intend to sell a security, or it is more likely than not we will be required to sell a debt security before recovery of its amortized cost basis and the fair value of the debt security is below amortized cost, we conclude that an OTTI has occurred and the amortized cost is written down to current fair value, with a corresponding charge to realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). If we do not intend to sell a debt security, or it is not more likely than not we will be required to sell a debt security before recovery of its amortized cost basis but the present value of the cash flows expected to be collected is less than the amortized cost of the debt security (referred to as the credit loss), we conclude that an OTTI has occurred and the amortized cost is written down to the estimated recovery value with a corresponding charge to realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss), as this amount is deemed the credit portion of the OTTI. The remainder of the decline to fair value is recorded in other comprehensive income (“OCI”) to unrealized OTTI on AFS securities on our Consolidated Statements of Stockholder’s Equity, as this amount is considered a noncredit (i.e., recoverable) impairment. When assessing our intent to sell a debt security, or if it is more likely than not we will be required to sell a debt security before recovery of its cost basis, we evaluate facts and circumstances such as, but not limited to, decisions to reposition our security portfolio, sales of securities to meet cash flow needs and sales of securities to capitalize on favorable pricing. Management considers the following as part of the evaluation: · The current economic environment and market conditions; · Our business strategy and current business plans; · The nature and type of security, including expected maturities and exposure to general credit, liquidity, market and interest rate risk; · Our analysis of data from financial models and other internal and industry sources to evaluate the current effectiveness of our hedging and overall risk management strategies; · The current and expected timing of contractual maturities of our assets and liabilities, expectations of prepayments on investments and expectations for surrenders and withdrawals of life insurance policies and annuity contracts; · The capital risk limits approved by management; and · Our current financial condition and liquidity demands. In order to determine the amount of the credit loss for a debt security, we calculate the recovery value by performing a discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover. The discount rate is the effective interest rate implicit in the underlying debt security. The effective interest rate is the original yield, or the coupon if the debt security was previously impaired. See the discussion below for additional information on the methodology and significant inputs, by security type, that we use to determine the amount of a credit loss. To determine the recovery period of a debt security, we consider the facts and circumstances surrounding the underlying issuer including, but not limited to, the following: · Historical and implied volatility of the security; · Length of time and extent to which the fair value has been less than amortized cost; · Adverse conditions specifically related to the security or to specific conditions in an industry or geographic area; · Failure, if any, of the issuer of the security to make scheduled payments; and · Recoveries or additional declines in fair value subsequent to the balance sheet date . In periods subsequent to the recognition of an OTTI, the AFS security is accounted for as if it had been purchased on the measurement date of the OTTI . Therefore, for the fixed maturity AFS security, the original discount or reduced premium is reflected in net investment income over the contractual term of the investment in a manner that produces a constant effective yield. To determine recovery value of a corporate bond, CLO or CDO, we perform additional analysis related to the underlying issuer including, but not limited to, the following: · Fundamentals of the issuer to determine what we would recover if they were to file bankruptcy versus the price at which the market is trading; · Fundamentals of the industry in which the issuer operates; · Earnings multiples for the given industry or sector of an industry that the underlying issuer operates within, divided by the outstanding debt to determine an expected recovery value of the security in the case of a liquidation; · Expected cash flows of the issuer (e.g., whether the issuer has cash flows in excess of what is required to fund its operations); · Expectations regarding defaults and recovery rates; · Changes to the rating of the security by a rating agency; and · Additional market information (e.g., if there has been a replacement of the corporate debt security). Each quarter we review the cash flows for the MBS to determine whether or not they are sufficient to provide for the recovery of our amortized cost. We revise our cash flow projections only for those securities that are at most risk for impairment based on current credit enhancement and trends in the underlying collateral performance. To determine recovery value of a MBS, we perform additional analysis related to the underlying issuer including, but not limited to, the following: · Discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover; · Level of creditworthiness of the home equity loans or residential mortgages that back an RMBS or commercial mortgages that back a CMBS; · Susceptibility to fair value fluctuations for changes in the interest rate environment; · Susceptibility to reinvestment risks, in cases where market yields are lower than the securities’ book yield earned; · Susceptibility to reinvestment risks, in cases where market yields are higher than the book yields earned on a security; · Expectations of sale of such a security where market yields are higher than the book yields earned on a security; and · Susceptibility to variability of prepayments. When evaluating MBS and mortgage-related ABS, we consider a number of pool-specific factors as well as market level factors when determining whether or not the impairment on the security is temporary or other-than-temporary. The most important factor is the performance of the underlying collateral in the security and the trends of that performance in the prior periods. We use this information about the collateral to forecast the timing and rate of mortgage loan defaults, including making projections for loans that are already delinquent and for those loans that are currently performing but may become delinquent in the future. Other factors used in this analysis include the credit characteristics of borrowers, geographic distribution of underlying loans and timing of liquidations by state. Once default rates and timing assumptions are determined, we then make assumptions regarding the severity of a default if it were to occur. Factors that impact the severity assumption include expectations for future home price appreciation or depreciation, loan size, first lien versus second lien, existence of loan level private mortgage insurance, type of occupancy and geographic distribution of loans. Once default and severity assumptions are determined for the security in question, cash flows for the underlying collateral are projected including expected defaults and prepayments. These cash flows on the collateral are then translated to cash flows on our tranche based on the cash flow waterfall of the entire capital security structure. If this analysis indicates the entire principal on a particular security will not be returned, the security is reviewed for OTTI by comparing the expected cash flows to amortized cost . To the extent that the security has already been impaired or was purchased at a discount, such that the amortized cost of the security is less than or equal to the present value of cash flows expected to be collected, no impairment is required . Otherwise, if the amortized cost of the security is greater than the present value of the cash flows expected to be collected, and the security was not purchased at a discount greater than the expected principal loss, then impairment is recognized. We further monitor the cash flows of all of our AFS securities backed by mortgages on an ongoing basis . We also perform detailed analysis on all of our subprime, Alt-A, non-agency residential MBS and on a significant percentage of our AFS securities backed by pools of commercial mortgages . The detailed analysis includes revising projected cash flows by updating the cash flows for actual cash received and applying assumptions with respect to expected defaults, foreclosures and recoveries in the future . These revised projected cash flows are then compared to the amount of credit enhancement (subordination) in the structure to determine whether the amortized cost of the security is recoverable . If it is not recoverable, we record an impairment of the security . |
Trading Securities | Trading Securities Trading securities consist of fixed maturity and equity securities in designated portfolios, some of which support modified coinsurance (“Modco”) and coinsurance with funds withheld (“CFW”) reinsurance arrangements. Investment results for the portfolios that support Modco and CFW reinsurance arrangements, including gains and losses from sales, are passed directly to the reinsurers pursuant to contractual terms of the reinsurance arrangements. Trading securities are carried at fair value, and changes in fair value and changes in the fair value of embedded derivative liabilities associated with the underlying reinsurance arrangements are recorded in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) as they occur. |
Alternative Investments | Alternative Investments Alternative investments, which consist primarily of investments in limited partnerships (“LPs”), are included in other investments on our Consolidated Balance Sheets. We account for our investments in LPs using the equity method to determine the carrying value. Recognition of alternative investment income is delayed due to the availability of the related financial statements, which are generally obtained from the partnerships’ general partners. As a result, our venture capital, real estate and oil and gas portfolios are generally on a three-month delay and our hedge funds are on a one-month delay. In addition, the impact of audit adjustments related to completion of calendar-year financial statement audits of the investees are typically received during the second quarter of each calendar year. Accordingly, our investment income from alternative investments for any calendar-year period may not include the complete impact of the change in the underlying net assets for the partnership for that calendar-year period. |
Payables for Collateral on Investments | Payables for Collateral on Investments When we enter into collateralized financing transactions on our investments, a liability is recorded equal to the cash or non-cash collateral received. This liability is included within payables for collateral on investments on our Consolidated Balance Sheets. Income and expenses associated with these transactions are recorded as investment income and investment expenses within net investment income on our Consolidated Statem ents of Comprehensive Income (Loss) . Changes in payables for collateral on investments are reflected within cash flows from investing activities on our Consolidated Statements of Cash Flows. |
Mortgage Loans on Real Estate | Mortgage Loans on Real Estate Mortgage loans on real estate are carried at unpaid principal balances adjusted for amortization of premiums and accretion of discounts and are net of valuation allowances. Interest income is accrued on the principal balance of the loan based on the loan’s contractual interest rate. Premiums and discounts are amortized using the effective yield method over the life of the loan. Interest income and amortization of premiums and discounts are reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss) along with mortgage loan fees, which are recorded as they are incurred. Our commercial loan portfolio is comprised of long-term loans secured by existing commercial real estate. As such, it does not exhibit risk characteristics unique to mezzanine, construction, residential, agricultural, land or other types of real estate loans. We believe all of the loans in our portfolio share three primary risks: borrower creditworthiness; sustainability of the cash flow of the property; and market risk; therefore, our methods for monitoring and assessing credit risk are consistent for our entire portfolio. Loans are considered impaired when it is probable that, based upon current information and events, we will be unable to collect all amounts due under the contractual terms of the loan agreement. When we determine that a loan is impaired, a valuation allowance is established for the excess carrying value of the loan over its estimated value. The loan’s estimated value is based on: the present value of expected future cash flows discounted at the loan’s effective interest rate; the loan’s observable market price; or the fair value of the loan’s collateral. Valuation allowances are maintained at a level we believe is adequate to absorb estimated probable credit losses of each specific loan. Our periodic evaluation of the adequacy of the allowance for losses is based on our past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payments), the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. Trends in market vacancy and rental rates are incorporated into the analysis that we perform for monitored loans and may contribute to the establishment of (or an increase or decrease in) an allowance for credit losses. In addition, we review each loan individually in our commercial mortgage loan portfolio on an annual basis to identify emerging risks. We focus on properties that experienced a reduction in debt-service coverage or that have significant exposure to tenants with deteriorating credit profiles. Where warranted, we establish or increase loss reserves for a specific loan based upon this analysis. Our process for determining past due or delinquency status begins when a payment date is missed, at which time the borrower is contacted. After the grace period expiration that may last up to 10 days, we send a default notice. The default notice generally provides a short time period to cure the default. Our policy is to report loans that are 60 or more days past due, which equates to two or more payments missed, as delinquent. We do not accrue interest on loans 90 days past due, and any interest received on these loans is either applied to the principal or recorded in net investment income on our Consolidated Statements of Comprehensive Income (Loss) when received, depending on the assessment of the collectability of the loan. We resume accruing interest once a loan complies with all of its original terms or restructured terms. Mortgage loans deemed uncollectable are charged against the allowance for losses, and subsequent recoveries, if any, are credited to the allowance for losses. All mortgage loans that are impaired have an established allowance for credit losses. Changes in valuation allowances are reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). We measure and assess the credit quality of our mortgage loans by using loan-to-value and debt-service coverage ratios. The loan-to-value ratio compares the principal amount of the loan to the fair value at origination of the underlying property collateralizing the loan and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the principal amount is greater than the collateral value. Therefore, all else being equal, a lower loan-to-value ratio generally indicates a higher quality loan. The debt-service coverage ratio compares a property’s net operating income to its debt-service payments. Debt-service coverage ratios of less than 1.0 indicate that property operations do not generate enough income to cover its current debt payments. Therefore, all else being equal, a higher debt-service coverage ratio generally indicates a higher quality loan |
Policy Loans | Policy Loans Policy loans represent loans we issue to contract holders that use the cash surrender value of their life insurance policy as collateral . Policy loans are carried at unpaid principal balances . |
Real Estate | Real Estate Real estate includes both real estate held for the production of income and real estate held-for-sale . Real estate held for the production of income is carried at cost less accumulated depreciation . Depreciation is calculated on a straight-line basis over the estimated useful life of the asset . We periodically review properties held for the production of income for impairment . Properties whose carrying values are greater than their projected undiscounted cash flows are written down to estimated fair value, with impairment losses reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) . The estimated fair value of real estate is generally computed using the present value of expected future cash flows from the real estate discounted at a rate commensurate with the underlying risks . Real estate classified as held-for-sale is stated at the lower of depreciated cost or fair value less expected disposition costs at the time classified as held-for-sale . Real estate is not depreciated while it is classified as held-for-sale . Also, valuation allowances for losses are established, as appropriate, for real estate held-for-sale and any changes to the valuation allowances are reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) . Real estate acquired through foreclosure proceedings is recorded at fair value at the settlement date . |
Derivative Instruments | Derivative Instruments We hedge certain portions of our exposure to interest rate risk, foreign currency exchange risk, equity market risk and credit risk by entering into derivative transactions . All of our derivative instruments are recognized as either assets or liabilities on our Consolidated Balance Sheets at estimated fair value . W e categorized derivatives into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique as discussed above in “Fair Value Measurement.” The accounting for changes in the estimated fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and further, on the type of hedging relationship . For those derivative instruments that are designated and qualify as hedging instruments, we designate the hedging instrument based upon the exposure being hedged: as a cash flow hedge or a fair value hedge. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of A OCI and reclassified into net income in the same period or periods during which the hedged transaction affects net income . The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of designated future cash flows of the hedged item (hedge ineffectiveness), if any, is recognized in net income during the period of change . For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in net income during the period of change in estimated fair values . For derivative instruments not designated as hedging instruments, but that are economic hedges, the gain or loss is recognized in net income. We purchase and issue financial instruments and products that contain embedded derivative instruments . When it is determined that the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host for measurement purposes . The embedded derivative is carried at fair value with changes in fair value recognized in net income during the period of change . We employ several different methods for determining the fair value of our derivative instruments . The fair value of our derivative contracts are measured based on current settlement values, which are based on quoted market prices, industry standard models that are commercially available and broker quotes . These techniques project cash flows of the derivatives using current and implied future market conditions . We calculate the present value of the cash flows to measure the current fair market value of the derivative . |
Cash and Invested Cash | Cash and Invested Cash Cash and invested cash is carried at cost and include s all highly liquid debt instruments purchased with an original maturity of three months or less . |
DAC, VOBA, DSI and DFEL | DAC, VOBA, DSI and DFEL Acquisition costs directly related to successful contract acquisitions or renewals of universal life insurance (“UL”), variable universal life insurance (“VUL”), traditional life insurance, annuities and other investment contracts have been deferred (i.e., DAC) to the extent recoverable. VOBA is an intangible asset that reflects the estimated fair value of in-force contracts in a life insurance company acquisition and represents the portion of the purchase price that is allocated to the value of the right to receive future cash flows from the business in force at the acquisition date. Bonus credits and excess interest for dollar cost averaging contracts are considered DSI. Contract sales charges that are collected in the early years of an insurance contract are deferred (i.e., DFEL), and the unamortized balance is reported in other contract holder funds on our Consolidated Balance Sheets. Both DAC and VOBA amortization, excluding amounts reported in realized gain (loss), is reported within commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss). DSI amortization, excluding amounts reported in realized gain (loss), is reported in interest credited on our Consolidated Statements of Comprehensive Income (Loss). The amortization of DFEL, excluding amounts reported in realized gain (loss), is reported within fee income on our Consolidated Statements of Comprehensive Income (Loss). The methodology for determining the amortization of DAC, VOBA, DSI and DFEL varies by product type. For all insurance contracts, amortization is based on assumptions consistent with those used in the development of the underlying contract adjusted for emerging experience and expected trends. Acquisition costs for UL and VUL insurance and investment-type products, which include fixed and variable deferred annuities, are generally amortized over the lives of the policies in relation to the incidence of estimated gross profits (“EGPs”) from surrender charges, investment, mortality net of reinsurance ceded and expense margins and actual realized gain (loss) on investments. Contract lives for UL and VUL policies are estimated to be 30 to 40 years based on the expected lives of the contracts. Contract lives for fixed and variable deferred annuities are generally between 15 and 30 years, while some of our fixed multi-year guarantee products have amortization periods equal to the guarantee period. The front-end load annuity product has an assumed life of 25 years. Longer lives are assigned to those blocks that have demonstrated favorable lapse experience. Acquisition costs for all traditional contracts, including traditional life insurance contracts, such as individual whole life, group business and term life insurance, are amortized over the expected premium-paying period that generally results in amortization less than 30 years. Acquisition costs are either amortized on a straight-line basis or as a level percent of premium of the related policies depending on the block of business. There is currently no DAC, VOBA, DSI or DFEL balance or related amortization for fixed and variable payout annuities. We account for modifications of insurance contracts that result in a substantially unchanged contract as a continuation of the replaced contract. We account for modifications of insurance contracts that result in a substantially changed contract as an extinguishment of the replaced contract. The carrying amounts of DAC, VOBA, DSI and DFEL are adjusted for the effects of realized and unrealized gains and losses on securities classified as AFS and certain derivatives and embedded derivatives . Amortization expense of DAC, VOBA, DSI and DFEL reflects an assumption for an expected level of credit-related investment losses. When actual credit-related investment losses are realized, we recognize a true-up to our DAC, VOBA, DSI and DFEL amortization within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) reflecting the incremental effect of actual versus expected credit-related investment losses. These actual to expected amortization adjustments can create volatility from period to period in realized gain (loss). During the third quarter of each year, we conduct our annual comprehensive review of the assumptions and the projection models used for our estimates of future gross profits underlying the amortization of DAC, VOBA, DSI and DFEL and the calculations of the embedded derivatives and reserves for life insurance and annuity products. These assumptions include, but are not limited to, capital markets, investment margins, mortality, retention, rider utilization and maintenance expenses (costs associated with maintaining records relating to insurance and individual and group annuity contracts, and with the processing of premium collections, deposits, withdrawals and commissions). Based on our review, the cumulative balances of DAC, VOBA, DSI and DFEL included on our Consolidated Balance Sheets are adjusted with an offsetting benefit or charge to revenue or amortization expense to reflect such change related to our expectations of future EGPs (“unlocking”). We may have unlocking in other quarters as we become aware of information that warrants updating assumptions outside of our annual comprehensive review. We may also identify and implement actuarial modeling refinements that result in increases or decreases to the carrying values of DAC, VOBA, DSI, DFEL, embedded derivatives and reserves for life insurance and annuity products with living benefit and death benefit guarantees. DAC, VOBA, DSI and DFEL are reviewed to ensure that the unamortized portion does not exceed the expected recoverable amounts . |
Reinsurance | Reinsurance We enter into reinsurance agreements with other companies in the normal course of business . Assets and liabilities and premiums and benefits from certain reinsurance contracts that grant statutory surplus relief provided by or to other insurance companies are netted on our Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income (Loss), respectively, because there is a right of offset . All other reinsurance agreements are reported on a gross basis on our Consolidated Balance Sheets as an asset for amounts recoverable from reinsurers or as a component of other liabilities for amounts, such as premiums, owed to the reinsurers, with the exception of Modco agreements for which the right of offset also exists . Reinsurance premiums and benefits paid or provided are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts . Premiums, benefits and DAC are reported net of insurance ceded . |
Goodwill | Goodwill We recognize the excess of the purchase price, plus the fair value of any noncontrolling interest in the acquiree, over the fair value of identifiable net assets acquired as goodwill. Goodwill is not amortized, but is reviewed for impairment annually as of October 1 and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Prior to October 1, 2017, we performed a two-step test in our evaluation of the carrying value of goodwill for each of our reporting units. In Step 1 of the evaluation, if the fair value estimate of the reporting unit was greater than the carrying value, then the carrying value of the reporting unit was deemed to be recoverable, and Step 2 was not required. If the fair value estimate was less than the carrying value, we applied Step 2 to determine the implied fair value of goodwill for the reporting unit. If the implied fair value of the reporting unit’s goodwill was lower than its carrying amount, goodwill was impaired and written down to its fair value. Effective with our early adoption of new accounting guidance for goodwill impairment during the fourth quarter of 2017, as discussed in Note 2, we perform a quantitative goodwill impairment test where the fair value of the reporting unit is determined and compared to the carrying value of the reporting unit. If the fair value of the reporting unit is greater than the reporting unit’s carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit’s fair value, goodwill is impaired and written down to the reporting unit’s fair value; and a charge is reported in impairment of intangibles on our Consolidated Statements of Comprehensive Income (Loss). The results of one goodwill impairment test on one reporting unit cannot subsidize the results of another reporting unit. |
Other Assets and Other Liabilities | Other Assets and Other Liabilities Other assets consist primarily of DSI, specifically identifiable intangible assets, property and equipment owned by the Company, balances associated with corporate-owned and bank-owned life insurance, certain reinsurance assets, receivables resulting from sales of securities that had not yet settled as of the balance sheet date, debt issuance costs associated with line-of-credit arrangements, assets under capital leases, guaranteed living benefit (“GLB”) reserves embedded derivatives, other prepaid expenses and deferred losses on business sold through reinsurance. Other liabilities consist primarily of current and deferred taxes, pension and other employee benefit liabilities, derivative instrument liabilities, certain reinsurance payables, payables resulting from purchases of securities that had not yet settled as of the balance sheet date, interest on borrowed funds , obligations under capital leases and other accrued expenses. Other assets and other liabilit ies on our Consolidated Balance Sheets include GLB features and remaining guaranteed interest and similar contracts that are carried at fair value, which may be reported in either other assets or other liabilities. The fair value of these ite ms represents approximate exit price including an estimate for our NPR. Certain of these features have elements of both insurance benefits and embedded derivatives . Through our hybrid accounting approach, for reserve calculation purposes we assign product cash flows to the embedded derivative or insurance portion of the reserves based on the life-contingent nature of the benefits . We classify these GLB reserves embedded derivatives in Level 3 within the hierarchy levels described above in “Fair Value Measurement.” We report the insurance portion of the reserves in future contract benefits. The carrying values of specifically identifiable intangible assets are reviewed at least annually for indicators of impairment in value that are other-than-temporary, including unexpected or adverse changes in the following: the economic or competitive environments in which the company operates; profitability analyses; cash flow analyses; and the fair value of the relevant business operation . If there was an indication of impairment, then the discounted cash flow method would be used to measure the impairment, and the carrying value would be adjusted as necessary and reported in impairment of intangibles on our Consolidated Statements of Comprehensive Income (Loss) . Sales force intangibles are attributable to the value of the new business distribution system acquired through business combinations . These assets are amortized on a straight-line basis over their useful life of 25 years. Property and equipment owned for company use is carried at cost less allowances for depreciation . Provisions for depreciation of investment real estate and property and equipment owned for company use are computed principally on the straight-line method over the estimated useful lives of the assets, which include buildings, computer hardware and software and other property and equipment . Certain assets on our Consolidated Balance Sheets are related to capital lease s. These assets under capital lease s are depreciated in a manner consistent with our current depreciation policy for owned assets. We periodically review the carrying value of our long-lived assets, including property and equipment, for impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable . For long-lived assets to be held and used, impairments are recognized when the carrying amount of a long-lived asset is not recoverable and exceeds its fair value . The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset . An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Long-lived assets to be disposed of by abandonment or in an exchange for a similar productive long-lived asset are classified as held-for-use until they are disposed . Long-lived assets to be sold are classified as held-for-sale and are no longer depreciated . Certain criteria have to be met in order for the long-lived asset to be classified as held-for-sale, including that a sale is probable and expected to occur within one year . Long-lived assets classified as held-for-sale are recorded at the lower of their carrying amount or fair value less cost to sell. We completed reinsurance transactions in 2012 and 2014 whereby we ceded closed blocks of UL contracts with secondary guarantees to Lincoln National Reinsurance Company (Barbados) Limited (“LNBAR”), a wholly-owned subsidiary of LNC. We are recognizing the l osses related to these transactions over a period of 30 years. |
Separate Account Assets and Liabilities | Separate Account Assets and Liabilities We maintain separate account assets, which are reported at fair value . The related liabilities are reported at an amount equivalent to the separate account assets . Investment risks associated with market value changes are borne by the contract holders, except to the extent of minimum guarantees made by the Company with respect to certain accounts . We issue variable annuity contracts through our separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contract holder (traditional variable annuities) . We also issue variable annuity and life contracts through separate accounts that may include various types of guaranteed death benefit (“GDB”), guaranteed withdrawal benefit (“GWB”) and guaranteed income benefit (“GIB”) features . The GDB features include those where we contractually guarantee to the contract holder either: return of no less than total deposits made to the contract less any partial withdrawals (“return of net deposits”); total deposits made to the contract less any partial withdrawals plus a minimum return (“minimum return”); or the highest contract value on any contract anniversary date through age 80 . The highest contract value is increased by purchase payments and is decreased by withdrawals subsequent to that anniversary date in the same proportion that withdrawals reduce the contract value. As discussed in Note 6, certain features of these guarantees are accounted for as embedded derivative reserves, whereas other guarantees are accounted for as benefit reserves . Other guarantees contain characteristics of both and are accounted for under an approach that calculates the value of the embedded derivative reserve and the benefit reserve based on the sp ecific characteristics of each GLB feature . We use derivative instruments to hedge our exposure to the risks and earnings volatility that result from the embedded derivatives for living benefits in certain of our variable annuity products . The change in fair value of these instruments tends to move in the opposite direction of the change in the value of the associated reserves . The net impact of these changes is reported as a component of realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). The “market consistent scenarios” used in the determination of the fair value of the GLB liability are similar to those used by an investment bank to value derivatives for which the pricing is not transparent and the aftermarket is nonexistent or illiquid . We use risk-neutral Monte Carlo simulations in our calculation to value the entire block of guarantees, which involve 100 unique scenarios per policy or approximately 49 million scenarios . The market consistent scenario assumptions, as of each valuation date, are those we view to be appropriate for a hypothetical market participant . The market consistent inputs include , but are not limited to, assumptions for capital markets (e.g., implied volatilities, correlation among indices, risk-free swap curve, etc.), policyholder behavior (e.g., policy lapse, rider utilization, etc.), mortality, risk margins, maintenance expenses and a margin for profit . We believe these assumptions are consistent with those that would be used by a market participant; however, as the related markets develop we will continue to reassess our assumptions . It is possible that different valuation techniques and assumptions could produce a materially different estimate of fair value. |
Future Contract Benefits and Other Contract Holder Funds | Future Contract Benefits and Other Contract Holder Funds Future contract benefits represent liability reserves that we have established and carry based on estimates of how much we will need to pay for future benefits and claims . Other contract holder funds represent liabilities for fixed account values, including the fixed portion of variable, dividends payable, premium deposit funds, undistributed earnings on participating business and other contract holder funds as well the carrying value of DFEL discussed above. The liabilities for future contract benefits and claim reserves for UL and VUL insurance policies consist of contract account balances that accrue to the benefit of the contract holders, excluding surrender charges . The liabilities for future insurance contract benefits and claim reserves for traditional life policies are computed using assumptions for investment yields, mortality and withdrawals based principally on generally accepted actuarial methods and assumptions at the time of contract issue . Investment yield assumptions for traditional direct individual life reserves for all contracts range from 2.25% to 7.75% depending on the time of contract issue . The investment yield assumptions for immediate and deferred paid-up annuities range from 1.25% to 12.75% . These investment yield assumptions are intended to represent an estimation of the interest rate experience for the period that these contract benefits are payable. The liabilities for future claim reserves for variable annuity products containing GDB features are calculated by estimating the present value of total expected benefit payments over the life of the contract from inception divided by the present value of total expected assessments over the life of the contract (“benefit ratio”) multiplied by the cumulative assessments recorded from the contract inception through the balance sheet date less the cumulative GDB payments plus interest on the liability . The change in the liability for a period is the benefit ratio multiplied by the assessments recorded for the period less GDB claims paid in the period plus interest . As experience or assumption changes result in a change in expected benefit payments or assessments, the benefit ratio is unlocked, that is, recalculated using the updated expected benefit payments and assessments over the life of the contract since inception . The revised benefit ratio is then applied to the liability calculation described above, with the resulting change in liability reported in benefits on our Consolidated Statements of Comprehensive Income (Loss). With respect to our future contract benefits and other contract holder funds , we continually review overall reserve position, reserving techniques and reinsurance arrangements . As experience develops and new information becomes known, liabilities are adjusted as deemed necessary . The effects of changes in estimates are included in the operating results for the period in which such changes occur. The business written or assumed by us includes participating life insurance contracts, under which the contract holder is entitled to share in the earnings of such contracts via receipt of dividends . The dividend scale for participating policies is reviewed annually and may be adjusted to reflect recent experience and future expectations. As of December 31, 2017 and 2016 , participating policies comprised less than 1 % of the face amount of business in force, and dividend expenses were $57 million, $59 million and $67 million for the years ended December 31, 2017 , 2016 and 2015 , respectively . Liabilities for the secondary guarantees on UL-type products are calculated by multiplying the benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative secondary guarantee benefit payments plus interest . If experience or assumption changes result in a new benefit ratio, the reserves are adjusted to reflect the changes in a manner similar to the unlocking of DAC, VOBA, DFEL and DSI . The accounting for secondary guarantee benefits impacts, and is impacted by, EGPs used to calculate amortization of DAC, VOBA, DFEL and DSI. Certain of our variable annuity contracts reported within future contract benefits contain GLB reserves embedded derivatives, a portion of which may be reported in either other assets or other liabilities, and include guaranteed interest and similar contracts, that are carried at fair value on our Consolidated Balance Sheets , whi ch represents approximate exit price including an estimate for our NPR. Certain of these features have elements of both insurance benefits and embedded derivatives . Through our hybrid accounting approach, for reserve calculation purposes we assign product cash flows to the embedded derivative or insurance portion of the reserves based on the life-contingent nature of the benefits . We classify these GLB reserves embedded derivatives items in Level 3 within the hierarchy levels described above in “Fair Value Measurement.” We report the insurance portion of the reserves in future contract benefits. The fair value of our indexed annuity contracts is based on their approximate surrender values. |
Borrowed Funds | Borrowed Funds LN L ’s short-term borrowings are defined as borrowings with contractual or expected maturities of one year or less . Long-term borrowings have contractual or expected maturities greater than one year. |
Deferred Gain on Business Sold Through Reinsurance | Deferred Gain on Business Sold Through Reinsurance Our reinsurance operations were acquired by Swiss Re Life & Health America, Inc. (“Swiss Re”) in December 2001 through a series of indemnity reinsurance transactions. We recognized the gain related to these transactions over the period over which the majority of the earnings were expected to emerge, and the deferred gain was fully amortized in 2017. We completed a reinsurance transaction in 2009 whereby we assumed a closed block of term contracts from First Penn-Pacific Life Insurance Company , a wholly-owned subsidiary of LNC . We are recognizing the gain related to this transaction over a period of 15 years. We completed reinsurance transactions in 2012 and 2013 whereby we ceded a closed block of UL contracts with secondary guarantees to LNBAR. We are recognizing the gains related to these transactions over a period of 30 years. |
Contingencies and Commitments | Contingencies and Commitments Contingencies arising from environmental remediation costs, regulatory judgments, claims, assessments, guarantees, litigation, recourse reserves, fines, penalties and other sources are recorded when deemed probable and reasonably estimable. |
Fee Income | Fee Income Fee income for investment and interest-sensitive life insurance contracts consist of asset-based fees, cost of insurance charges, percent of premium charges, contract administration charges and surrender charges that are assessed against contract holder account balances . Investment products consist primarily of individual and group variable and fixed deferred annuities . Interest-sensitive life insurance products include UL insurance, VUL insurance and other interest-sensitive life insurance policies . These products include life insurance sold to individuals, corporate-owned life insurance and bank-owned life insurance . In bifurcating the embedded derivative of our GLB features on our variable annuity products, we attribute to the embedded derivative the portion of total fees collected from the contract holder that relate to the GLB riders (the “attributed fees”), which are not reported within fee income on our Consolidated Statements of Comprehensive Income (Loss) . These attributed fees represent the present value of future claims expected to be paid for the GLB at the inception of the contract plus a margin that a theoretical market participant would include for risk/profit and are reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). The timing of revenue recognition as it relates to fees assessed on investment contracts is determined based on the nature of such fees . Asset-based fees, cost of insurance and contract administration charges are assessed on a daily or monthly basis and recognized as revenue when assessed and earned . Percent of premium charges are assessed at the time of premium payment and recognized as revenue when assessed and earned . Certain amounts assessed that represent compensation for services to be provided in future periods are reported as unearned revenue and recognized in income over the periods benefited . Surrender charges are recognized upon surrender of a contract by the contract holder in accordance with contractual terms. For investment and interest-sensitive life insurance contracts, the amounts collected from contract holders are considered deposits and are not included in revenue. |
Insurance Premiums | Insurance Premiums Our insurance premiums for traditional life insurance and group insurance products are recognized as revenue when due from the contract holder. Our traditional life insurance products include those products with fixed and guaranteed premiums and benefits and consist primarily of whole life insurance, limited-payment life insurance, term life insurance and certain annuities with life contingencies. Our group non-medical insurance products consist primarily of term life, disability and dental. |
Net Investment Income | Net Investment Income Dividends and interest income, recorded in net investment income, are recognized when earned . Amortization of premiums and accretion of discounts on investments in debt securities are reflected in net investment income over the contractual terms of the investments in a manner that produces a constant effective yield . For C LO s and MBS, included in the trading and AFS fixed maturity securities portfolios, we recognize income using a constant effective yield based on anticipated prepayments and the estimated economic life of the securities . When actual prepayments differ significantly from originally anticipated prepayments, the retrospective effective yield is recalculated to reflect actual payments to date and a catch up adjustment is recorded in the current period . In addition, the new effective yield, which reflects anticipated future payments, is used prospectively . Any adjustments resulting from changes in effective yield are reflected in net investment income on our Consolidated Statements of Comprehensive Income (Loss). |
Realized Gain (Loss) | Realized Gain (Loss) Realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) includes realized gains and losses from the sale of investments, write-downs for OTTI of investments, certain derivative and embedded derivative gains and losses, gains and losses on the sale of subsidiaries and businesses and net gains and losses on reinsurance embedded derivative s and trading securities . Realized gains and losses on the sale of investments are determined using the specific identification method . Realized gain (loss) is recognized in net income, net of associated amortization of DAC, VOBA, DSI and DFEL . Realized gain (loss) is also net of allocations of investment gains and losses to certain contract holders and certain funds withheld on reinsurance arrangements for which we have a contractual obligation . |
Other Revenues | Other Revenues Other revenues consists primarily of fees attributable to broker-dealer services recorded as earned at the time of sale, changes in the market value of our seed capital investments , proceeds from reinsurance recaptures and communications sales recognized as earned, net of agency and representative commissions . |
Interest Credited | Interest Credited Interest credited includes interest credited to contract holder account balances . Interest crediting rates associated with funds invested in our general account during 2015 through 2017 ranged from 1% to 10% . |
Benefits | Benefits Benefits for UL and other interest-sensitive life insurance products include benefit claims incurred during the period in excess of contract account balances. Benefits also include the change in reserves for life insurance products with secondary guarantee benefits, annuity products with guaranteed death and living benefits and certain annuities with life contingencies. For traditional life, group health and disability income products, benefits are recognized when incurred in a manner consistent with the related premium recognition policies . |
Strategic Digitization Expense | Strategic Digitization Expense Strategic digitization expense consists primarily of costs related to our enterprise-wide digitization initiative. |
Pensions and Other Post Retirement Benefit Plans | Pension and Other Postretirement Benefit Plans Pursuant to the accounting rules for our obligations to employees and agents under our various pension and other postretirement benefit plans, we are required to make a number of assumptions to estimate related liabilities and expenses . The mortality assumption is based on actual and anticipated plan experience, determined using acceptable actuarial methods. We use assumptions for the weighted-average discount rate and expected return on plan assets to estimate pension expense . The discount rate assumptions are determined using an analysis of current market information and the projected benefit flows associated with these plans . The expected long-term rate of return on plan assets is based on historical and projected future rates of return on the funds invested in the plan . The calculation of our accumulated postretirement benefit obligation also uses an assumption of weighted-average annual rate of increase in the per capita cost of covered benefits, which reflects a health care cost trend rate . |
Stock-Based Compensation | Stock-Based Compensation In general, we expense the fair value of stock awards included in our incentive compensation plans . As of the date LNC’s Board of Directors approves stock awards, the fair value of stock options is determined using a Black-Scholes options valuation methodology, and the fair value of other stock awards is based upon the market value of the stock . The fair value of the awards is expensed over the performance or service period, which generally corresponds to the vesting period, and is recognized as an increase to common stock in stockholder ’ s equity . We apply an estimated forfeiture rate to our accrual of compensation cost. We classify certain stock awards as liabilities . For these awards, the settlement value is classified as a liability on our Consolidated Balance Sheets , and the liability is marked-to-market through net income at the end of each reporting period . Stock-based compensation expense is reflected in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss) . |
Interest and Debt Expense | Interest and Debt Expense Interest expense on our short-term and long-term debt is recognized as due and any associated premiums, discounts and costs are amortized (accreted) over the term of the related borrowing utilizing the effective interest method . In addition, gains or losses related to certain derivative instruments associated with debt are recognized in interest and debt expense during the period of the change. |
Income Taxes | Income Taxes We file a U.S . consolidated income tax return with LNC and its eligible subsidiaries . Ineligible subsidiaries file separate individual corporate tax returns . Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes . A valuation allowance is recorded to the extent required . Considerable judgment and the use of estimates are required in determining whether a valuation allowance is necessary and, if so, the amount of such valuation allowance . In evaluating the need for a valuation allowance, we consider many factors, including: the nature and character of the deferred tax assets and liabilities; taxable income in prior carryback years; future reversals of temporary differences; the length of time carryovers can be utilized; and any tax planning strategies we would employ to avoid a tax benefit from expiring unused . |
Discontinued Operations | Discontinued Operations The results of operations of a component of the Company that either has been disposed of or is classified as held-for-sale are reported in income (loss) from discontinued operations, net of federal income taxes, if the disposal represents a strategic shift that has, or will have, a major effect on our consolidated financial condition and results of operations. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entities [Abstract] | |
Consolidated Variable Interest Entity Asset and Liability information | As of December 31, 2017 As of December 31, 2016 Number Number of Notional Carrying of Notional Carrying Instruments Amounts Value Instruments Amounts Value Assets Fixed maturity securities: Asset-backed credit card loans (1) N/A $ - $ - N/A $ - $ 200 Credit default swaps - - - 1 200 - Total assets - $ - $ - 1 $ 200 $ 200 (1) Reported in variable interest entities’ fixed maturity securities on our Consolidated Balance Sheets . |
Consolidated Variable Interest Entity Settlement Payments and Mark-to-Market Adjustments | For the Years Ended December 31, 2017 2016 Non-Qualifying Hedges Credit default swaps $ - $ 4 Contingent forwards - - Total non-qualifying hedges (1) $ - $ 4 (1) Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss ). |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments [Abstract] | |
Reconciliation Of Available-For-Sale Securities From Cost Basis To Fair Value | As of December 31, 2017 Amortized Gross Unrealized Fair Cost Gains Losses OTTI (1) Value Fixed maturity securities: Corporate bonds $ 74,921 $ 6,573 $ 341 $ (7 ) $ 81,160 ABS 882 51 6 (26 ) 953 U.S. government bonds 497 37 1 - 533 Foreign government bonds 391 55 - - 446 RMBS 3,125 148 36 (21 ) 3,258 CMBS 589 10 2 (2 ) 599 CLOs 803 2 2 (5 ) 808 State and municipal bonds 4,033 932 6 - 4,959 Hybrid and redeemable preferred securities 561 85 22 - 624 Total fixed maturity securities 85,802 7,893 416 (61 ) 93,340 Equity securities 247 16 17 - 246 Total AFS securities $ 86,049 $ 7,909 $ 433 $ (61 ) $ 93,586 As of December 31, 2016 Amortized Gross Unrealized Fair Cost Gains Losses OTTI (1) Value Fixed maturity securities: Corporate bonds $ 72,706 $ 4,583 $ 931 $ (5 ) $ 76,363 ABS 1,016 39 13 (12 ) 1,054 U.S. government bonds 345 34 2 - 377 Foreign government bonds 445 57 1 - 501 RMBS 3,316 141 65 (5 ) 3,397 CMBS 341 8 4 (1 ) 346 CLOs 742 1 3 (4 ) 744 State and municipal bonds 3,811 703 19 - 4,495 Hybrid and redeemable preferred securities 568 68 47 - 589 VIEs’ fixed maturity securities 200 - - - 200 Total fixed maturity securities 83,490 5,634 1,085 (27 ) 88,066 Equity securities 260 18 3 - 275 Total AFS securities $ 83,750 $ 5,652 $ 1,088 $ (27 ) $ 88,341 (1) Includes unrealized ( gains ) and losses on impaired securities related to changes in the fair value of such securities subsequent to the impairment measurement date. |
Available-For-Sale Securities By Contractual Maturities | Amortized Fair Cost Value Due in one year or less $ 3,268 $ 3,305 Due after one year through five years 17,472 18,099 Due after five years through ten years 17,059 17,708 Due after ten years 42,604 48,610 Subtotal 80,403 87,722 Structured securities (ABS, MBS, CLOs) 5,399 5,618 Total fixed maturity AFS securities $ 85,802 $ 93,340 |
Fair Value And Gross Unrealized Losses In A Continuous Unrealized Loss Position | As of December 31, 2017 Less Than or Equal Greater Than to Twelve Months Twelve Months Total Gross Gross Gross Unrealized Unrealized Unrealized Fair Losses and Fair Losses and Fair Losses and Value OTTI Value OTTI Value OTTI Fixed maturity securities: Corporate bonds $ 4,726 $ 67 $ 4,706 $ 276 $ 9,432 $ 343 ABS 56 - 143 15 199 15 U.S. government bonds 156 - 19 1 175 1 RMBS 277 4 599 33 876 37 CMBS 113 - 60 3 173 3 CLOs 281 2 72 - 353 2 State and municipal bonds 33 - 89 5 122 5 Hybrid and redeemable preferred securities 20 - 124 22 144 22 Total fixed maturity securities 5,662 73 5,812 355 11,474 428 Equity securities 22 14 8 3 30 17 Total AFS securities $ 5,684 $ 87 $ 5,820 $ 358 $ 11,504 $ 445 Total number of AFS securities in an unrealized loss position 1,095 As of December 31, 2016 Less Than or Equal Greater Than to Twelve Months Twelve Months Total Gross Gross Gross Unrealized Unrealized Unrealized Fair Losses and Fair Losses and Fair Losses and Value OTTI Value OTTI Value OTTI Fixed maturity securities: Corporate bonds $ 15,099 $ 542 $ 3,117 $ 390 $ 18,216 $ 932 ABS 201 5 281 23 482 28 U.S. government bonds 18 2 - - 18 2 Foreign government bonds 29 1 - - 29 1 RMBS 876 50 374 22 1,250 72 CMBS 187 4 18 2 205 6 CLOs 259 3 25 - 284 3 State and municipal bonds 208 11 47 8 255 19 Hybrid and redeemable preferred securities 75 3 142 44 217 47 Total fixed maturity securities 16,952 621 4,004 489 20,956 1,110 Equity securities 4 2 44 2 48 4 Total AFS securities $ 16,956 $ 623 $ 4,048 $ 491 $ 21,004 $ 1,114 Total number of AFS securities in an unrealized loss position 1,692 |
Schedule Of Available-For-Sale Securities Whose Value Is Below Amortized Cost | As of December 31, 2017 Number Fair Gross Unrealized of Value Losses OTTI Securities (1) Less than six months $ 156 $ 57 $ 1 26 Six months or greater, but less than nine months 2 1 - 4 Nine months or greater, but less than twelve months 12 6 - 7 Twelve months or greater 209 77 10 49 Total $ 379 $ 141 $ 11 86 As of December 31, 2016 Number Fair Gross Unrealized of Value Losses OTTI Securities (1) Less than six months $ 164 $ 49 $ 2 19 Nine months or greater, but less than twelve months 1 1 - 2 Twelve months or greater 358 166 10 62 Total $ 523 $ 216 $ 12 83 (1) We may reflect a security in more than one aging category based on various purchase dates. |
Schedule Of Changes In Amount Of Credit Losses Of OTTI Recognized In Net Income (Loss) | For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 411 $ 363 $ 360 Increases attributable to: Credit losses on securities for which an OTTI was not previously recognized 13 83 19 Credit losses on securities for which an OTTI was previously recognized 7 16 15 Decreases attributable to: Securities sold, paid down or matured (73 ) (51 ) (31 ) Balance as of end-of-year $ 358 $ 411 $ 363 |
Schedule of Details Of The Amount Of Credit Losses Of OTTI Recognized In Net Income (Loss) | As of December 31, 2017 Net Unrealized OTTI in Amortized Gain/(Loss) Fair Credit Cost Position Value Losses Corporate bonds $ 17 $ 7 $ 24 $ 31 ABS 173 26 199 102 RMBS 245 21 266 178 CMBS 13 2 15 39 CLOs 11 5 16 5 State and municipal bonds - - - 3 Total $ 459 $ 61 $ 520 $ 358 As of December 31, 2016 Net Unrealized OTTI in Amortized Gain/(Loss) Fair Credit Cost Position Value Losses Corporate bonds $ 80 $ 5 $ 85 $ 77 ABS 201 12 213 106 RMBS 310 6 316 183 CMBS 29 1 30 37 CLOs 11 3 14 5 State and municipal bonds 2 - 2 3 Total $ 633 $ 27 $ 660 $ 411 |
Fair Value Of Trading Securities | As of December 31, 2017 2016 Fixed maturity securities: Corporate bonds $ 1,250 $ 1,275 ABS 15 19 U.S. government bonds 115 164 Foreign government bonds 23 23 RMBS 85 95 CMBS 2 2 CLOs 3 6 State and municipal bonds 17 17 Hybrid and redeemable preferred securities 23 23 Total trading securities $ 1,533 $ 1,624 |
Composition Of Current And Past Due Mortgage Loans On Real Estate | As of December 31, 2017 2016 Current $ 10,662 $ 9,762 60 to 90 days past due - - Greater than 90 days past due 3 - Valuation allowance associated with impaired mortgage loans on real estate (3 ) (2 ) Unamortized premium (discount) - 1 Total carrying value $ 10,662 $ 9,761 |
Schedule Of Impaired Mortgage Loans | As of December 31, 2017 2016 Number of impaired mortgage loans on real estate 3 2 Principal balance of impaired mortgage loans on real estate $ 11 $ 7 Valuation allowance associated with impaired mortgage loans on real estate (3 ) (2 ) Carrying value of impaired mortgage loans on real estate $ 8 $ 5 |
Changes In The Valuation Allowance Of Impaired Mortgage Loans On Real Estate | For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 2 $ 2 $ 3 Additions 1 - - Charge-offs, net of recoveries - - (1 ) Balance as of end-of-year $ 3 $ 2 $ 2 |
Schedule Of Average Carrying Value Of Impaired Mortgage Loans On Real Estate | For the Years Ended December 31, 2017 2016 2015 Average carrying value for impaired mortgage loans on real estate $ 6 $ 6 $ 17 Interest income recognized on impaired mortgage loans on real estate - - 1 Interest income collected on impaired mortgage loans on real estate - - 1 |
Credit Quality Indicators For Mortgage Loans | As of December 31, 2017 As of December 31, 2016 Debt- Debt- Service Service Carrying % of Coverage Carrying % of Coverage Loan-to-Value Ratio Value Total Ratio Value Total Ratio Less than 65% $ 9,563 89.7% 2.27 $ 8,604 88.1% 2.16 65% to 74% 1,000 9.4% 1.94 1,009 10.3% 1.87 75% to 100% 91 0.8% 0.97 143 1.5% 0.86 Greater than 100% 8 0.1% 0.82 5 0.1% 1.04 Total mortgage loans on real estate $ 10,662 100.0% $ 9,761 100.0% |
Net Investment Income | For the Years Ended December 31, 2017 2016 2015 Fixed maturity AFS securities $ 4,048 $ 4,019 $ 3,981 Equity AFS securities 12 11 9 Trading securities 88 94 102 Mortgage loans on real estate 433 413 385 Real estate 1 1 1 Policy loans 134 139 150 Invested cash 11 12 3 Commercial mortgage loan prepayment and bond make-whole premiums 138 115 98 Alternative investments 165 75 88 Consent fees 6 5 5 Other investments 5 4 6 Investment income 5,041 4,888 4,828 Investment expense (281 ) (257 ) (217 ) Net investment income $ 4,760 $ 4,631 $ 4,611 |
Realized Gain (Loss) Related To Certain Investments | For the Years Ended December 31, 2017 2016 2015 Fixed maturity AFS securities: (1) Gross gains $ 17 $ 65 $ 41 Gross losses (63 ) (227 ) (94 ) Equity AFS securities: Gross gains 6 8 3 Gross losses - (1 ) - Gain (loss) on other investments (10 ) (62 ) (7 ) Associated amortization of DAC, VOBA, DSI and DFEL and changes in other contract holder funds (21 ) (24 ) (26 ) Total realized gain (loss) related to certain investments, pre-tax $ (71 ) $ (241 ) $ (83 ) (1) These amounts are represented net of related fair value hedging activity. See Note 6 for more information. |
OTTI Recognized In Net Income (Loss) And OCI | For the Years Ended December 31, 2017 2016 2015 OTTI Recognized in Net Income (Loss) Fixed maturity securities: Corporate bonds $ (13 ) $ (80 ) $ (42 ) ABS (2 ) (5 ) (6 ) RMBS (2 ) (10 ) (7 ) CMBS (2 ) (1 ) (1 ) State and municipal bonds (1 ) (3 ) - Total fixed maturity securities (20 ) (99 ) (56 ) Equity securities - (1 ) - Gross OTTI recognized in net income (loss) (20 ) (100 ) (56 ) Associated amortization of DAC, VOBA, DSI and DFEL 2 - 6 Net OTTI recognized in net income (loss), pre-tax $ (18 ) $ (100 ) $ (50 ) Portion of OTTI Recognized in OCI Gross OTTI recognized in OCI $ - $ 53 $ 29 Change in DAC, VOBA, DSI and DFEL - (12 ) (4 ) Net portion of OTTI recognized in OCI, pre-tax $ - $ 41 $ 25 |
Payables For Collateral On Investments | As of December 31, 2017 As of December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value Collateral payable for derivative investments (1) $ 701 $ 701 $ 813 $ 813 Securities pledged under securities lending agreements (2) 222 213 217 209 Securities pledged under repurchase agreements (3) 531 554 530 555 Investments pledged for Federal Home Loan Bank of Indianapolis (“FHLBI”) (4) 2,900 4,235 3,350 4,947 Total payables for collateral on investments $ 4,354 $ 5,703 $ 4,910 $ 6,524 (1) We obtain collateral based upon contractual provisions with our counterparties . These agreements take into consideration the counterparties’ credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that if exceeded result in the receipt of cash that is typically invested in cash and invested cash . See Note 6 for additional information . (2) Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets . We generally obtain collateral in an amount equal to 102 % and 105 % of the fair value of the domestic and foreign securities, respectively . We value collateral daily and obtain additional collateral when deemed appropriate . The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities. (3) Our pledged securities under repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets . We obtain collateral in an amount equal to 95 % of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary . The cash received in our repurchase program is typically invested in fixed maturity AFS securities. (4) Our pledged investments for FHLBI are included in fixed maturity AFS securities and mortgage loans on real estate on our Consolidated Balance Sheets . The collateral requirements are generally 105 % to 115 % of the fair value for fixed maturity AFS securities and 155 % to 175 % of the fair value for mortgage loans on real estate . The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities. |
Schedule Of Increase (Decrease) In Payables For Collateral On Investments | For the Years Ended December 31, 2017 2016 2015 Collateral payable for derivative investments $ (112 ) $ (481 ) $ (283 ) Securities pledged under securities lending agreements 5 (25 ) 38 Securities pledged under repurchase agreements 1 (144 ) 69 Investments pledged for FHLBI (450 ) 995 430 Total increase (decrease) in payables for collateral on investments $ (556 ) $ 345 $ 254 |
Schedule Of Securities Pledged By Contractual Maturity | As of December 31, 2017 Overnight and Continuous Up to 30 Days 30 – 90 Days Greater Than 90 Days Total Repurchase Agreements Corporate bonds $ - $ 100 $ 281 $ 150 $ 531 Total - 100 281 150 531 Securities Lending Corporate bonds 222 - - - 222 Total 222 - - - 222 Total gross secured borrowings $ 222 $ 100 $ 281 $ 150 $ 753 As of December 31, 2016 Overnight and Continuous Up to 30 Days 30 – 90 Days Greater Than 90 Days Total Repurchase Agreements Corporate bonds $ - $ - $ 384 $ 146 $ 530 Total - - 384 146 530 Securities Lending Corporate bonds 212 - - - 212 Foreign government bonds 5 - - - 5 Total 217 - - - 217 Total gross secured borrowings $ 217 $ - $ 384 $ 146 $ 747 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments [Abstract] | |
Outstanding Derivative Instruments With Off-Balance-Sheet Risks | As of December 31, 2017 As of December 31, 2016 Notional Fair Value Notional Fair Value Amounts Asset Liability Amounts Asset Liability Qualifying Hedges Cash flow hedges: Interest rate contracts (1) $ 1,544 $ 45 $ 16 $ 2,089 $ 68 $ 77 Foreign currency contracts (1) 1,804 79 79 1,177 153 10 Total cash flow hedges 3,348 124 95 3,266 221 87 Fair value hedges: Interest rate contracts (1) 563 - 174 637 - 182 Non-Qualifying Hedges Interest rate contracts (1) 72,937 657 127 70,290 985 701 Foreign currency contracts (1) 22 - - 14 - - Equity market contracts (1) 30,918 562 557 28,142 542 616 Credit contracts (1) 52 - - 66 - - Embedded derivatives: GLB direct (2) (3) - 903 - - - 371 GLB ceded (2) (3) - 51 954 - 371 - Reinsurance related (4) - - 51 - 58 - Indexed annuity and IUL contracts (2) (5) - 11 1,418 - - 1,139 Total derivative instruments $ 107,840 $ 2,308 $ 3,376 $ 102,415 $ 2,177 $ 3,096 (1) Reported in derivative investments and other liabilities on our Consolidated Balance Sheets. (2) Reported in other assets on our Consolidated Balance Sheets. (3) Reported in other liabilities on our Consolidated Balance Sheets. (4) Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets. (5) Reported in future contract benefits on our Consolidated Balance Sheets. |
Maturity Of The Notional Amounts Of Derivative Financial Instruments | Remaining Life as of December 31, 2017 Less Than 1 – 5 6 – 10 11 – 30 Over 30 1 Year Years Years Years Years Total Interest rate contracts (1) $ 7,748 $ 20,953 $ 31,378 $ 14,965 $ - $ 75,044 Foreign currency contracts (2) 22 247 423 1,090 44 1,826 Equity market contracts 18,746 9,520 485 15 2,152 30,918 Credit contracts - 52 - - - 52 Total derivative instruments with notional amounts $ 26,516 $ 30,772 $ 32,286 $ 16,070 $ 2,196 $ 107,840 (1) As of December 31, 2017 , the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was February 2047 . (2) As of December 31, 2017 , the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049 . |
Change In Unrealized Gain On Derivative Instruments In Accumulated OCI | For the Years Ended December 31, 2017 2016 2015 Unrealized Gain (Loss) on Derivative Instruments Balance as of beginning-of-year $ 93 $ 157 $ 127 Other comprehensive income (loss): Unrealized holding gains (losses) arising during the period: Cash flow hedges: Interest rate contracts 43 (165 ) (202 ) Foreign currency contracts 20 (10 ) 17 Change in foreign currency exchange rate adjustment (137 ) 96 48 Change in DAC, VOBA, DSI and DFEL 1 2 3 Income tax benefit (expense) 26 27 46 Less: Reclassification adjustment for gains (losses) included in net income (loss): Cash flow hedges: Interest rate contracts (1) 4 5 (190 ) Interest rate contracts (2) - 1 - Foreign currency contracts (1) 18 11 6 Foreign currency contracts (2) 9 7 - Associated amortization of DAC, VOBA, DSI and DFEL (2 ) (2 ) 2 Income tax benefit (expense) (10 ) (8 ) 64 Balance as of end-of-period $ 27 $ 93 $ 157 (1) The OCI offset is reported within net investment income on our Consolidated Statements of Comprehensive Income (Loss). (2) The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
Gains (Losses) On Derivative Instruments Recorded Within Income (Loss) From Continuing Operations | For the Years Ended December 31, 2017 2016 2015 Qualifying Hedges Cash flow hedges: Interest rate contracts (1) $ 4 $ 5 $ 8 Interest rate contracts (2) - 1 - Foreign currency contracts (1) 18 11 6 Foreign currency contracts (2) 9 7 - Total cash flow hedges 31 24 14 Fair value hedges: Interest rate contracts (1) (23 ) (28 ) (30 ) Interest rate contracts (2) 7 16 (198 ) Total fair value hedges (16 ) (12 ) (228 ) Non-Qualifying Hedges Interest rate contracts (2) 103 181 304 Foreign currency contracts (2) - (14 ) (11 ) Equity market contracts (2) (1,427 ) (1,253 ) (118 ) Equity market contracts (3) 28 12 1 Credit contracts (2) 1 (5 ) (6 ) Embedded derivatives: Reinsurance related (2) (141 ) (57 ) 221 Indexed annuity and IUL contracts (2) (400 ) (120 ) (57 ) Total derivative instruments $ (1,821 ) $ (1,244 ) $ 120 (1) Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss). (2) Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). (3) Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss). |
Gains (Losses) On Derivative Instruments Designated As Cash Flow Hedges | For the Years Ended December 31, 2017 2016 2015 Offset to net investment income $ 22 16 14 Offset to realized gain (loss) 9 8 - |
Open Credit Default Swap Liabilities | As of December 31, 2017 Credit Reason Nature Rating of Number Maximum for of Underlying of Fair Potential Credit Contract Type Maturity Entering Recourse Obligation (1) Instruments Value (2) Payout Basket credit default swaps 12/20/2022 (3) (4) BBB+ 1 $ 1 $ 52 1 $ 1 $ 52 As of December 31, 2016 Credit Reason Nature Rating of Number Maximum for of Underlying of Fair Potential Credit Contract Type Maturity Entering Recourse Obligation (1) Instruments Value (2) Payout Single name credit default swaps 3/20/2017 (5) (6) (4) BBB+ 2 - 40 2 $ - $ 40 (1) Represents average credit ratings based on the midpoint of the applicable ratings among Moody's, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings. (2) Broker quotes are used to determine the market value of our credit default swaps. (3) Credit default swaps were entered into in order to hedge the liability exposure on certain variable annuity products. (4) Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract. (5) These credit default swaps were sold to a counterparty of the conso lidated VIEs discussed in Note 4. (6) Credit default swaps were entered into in order to generate income by providing default protection in return for a quarterly payment. |
Collateral Support Agreements | As of As of December 31, December 31, 2017 2016 Maximum potential payout $ 52 $ 40 Less: Counterparty thresholds - - Maximum collateral potentially required to post $ 52 $ 40 |
Schedule Of Collateral Amounts With Rights To Reclaim Or Obligation To Return Cash | As of December 31, 2017 As of December 31, 2016 Collateral Collateral Collateral Collateral Posted by Posted by Posted by Posted by S&P Counter- LNL Counter- LNL Credit Party (Held by Party (Held by Rating of (Held by Counter- (Held by Counter- Counterparty LNL) Party) LNL) Party) AA- $ 116 $ (1 ) $ 53 $ (32 ) A+ 178 (453 ) 10 (217 ) A 170 (48 ) 394 (335 ) A- 237 - 67 - BBB+ - (4 ) 289 - $ 701 $ (506 ) $ 813 $ (584 ) |
Schedule Of Offsetting Assets And Liabilities | As of December 31, 2017 Embedded Derivative Derivative Instruments Instruments Total Financial Assets Gross amount of recognized assets $ 1,082 $ 965 $ 2,047 Gross amounts offset (237 ) - (237 ) Net amount of assets 845 965 1,810 Gross amounts not offset: Cash collateral (701 ) - (701 ) Net amount $ 144 $ 965 $ 1,109 Financial Liabilities Gross amount of recognized liabilities $ 1,037 $ 2,423 $ 3,460 Gross amounts offset (261 ) - (261 ) Net amount of liabilities 776 2,423 3,199 Gross amounts not offset: Cash collateral (506 ) - (506 ) Net amount $ 270 $ 2,423 $ 2,693 As of December 31, 2016 Embedded Derivative Derivative Instruments Instruments Total Financial Assets Gross amount of recognized assets $ 1,211 $ 429 $ 1,640 Gross amounts offset (311 ) - (311 ) Net amount of assets 900 429 1,329 Gross amounts not offset: Cash collateral (813 ) - (813 ) Net amount $ 87 $ 429 $ 516 Financial Liabilities Gross amount of recognized liabilities $ 1,274 $ 1,510 $ 2,784 Gross amounts offset (536 ) - (536 ) Net amount of liabilities 738 1,510 2,248 Gross amounts not offset: Cash collateral (584 ) - (584 ) Net amount $ 154 $ 1,510 $ 1,664 |
Federal Income Taxes (Tables)
Federal Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Federal Income Taxes [Abstract] | |
Federal Income Tax Expense | For the Years Ended December 31, 2017 2016 2015 Current $ 118 $ 25 $ 71 Deferred (1,405 ) 242 224 Federal income tax expense (benefit) $ (1,287 ) $ 267 $ 295 |
Reconciliation of effective tax rate differences | For the Years Ended December 31, 2017 2016 2015 Tax rate times pre-tax income $ 256 $ 504 $ 514 Effect of: Tax-preferred investment income (280 ) (196 ) (192 ) Tax credits (29 ) (28 ) (26 ) Change in uncertain tax positions (17 ) (11 ) 1 Excess tax benefits from share-based compensation (8 ) (4 ) - Goodwill impairment 316 - - Deferred tax impact from the Tax Cuts and Jobs Act (1,526 ) - - Other items 1 2 (2 ) Federal income tax expense (benefit) $ (1,287 ) $ 267 $ 295 Effective tax rate -176% 19% 20% |
Federal income tax asset (liability) | As of December 31, 2017 2016 Current $ 206 $ 164 Deferred (2,391 ) (3,062 ) Total federal income tax asset (liability) $ (2,185 ) $ (2,898 ) |
Significant components of deferred tax assets and liabilities | As of December 31, 2017 2016 Deferred Tax Assets Future contract benefits and other contract holder funds $ 580 $ 986 Reinsurance related embedded derivative asset 11 - Compensation and benefit plans 123 187 Tax credits 76 85 Other 8 19 Total deferred tax assets $ 798 $ 1,277 Deferred Tax Liabilities DAC $ 1,112 $ 2,038 VOBA 105 306 Net unrealized gain on AFS securities 1,579 1,596 Net unrealized gain on trading securities 39 65 Intangibles 9 20 Investment activity 118 125 Deferred gain on business sold through reinsurance 35 51 Reinsurance related embedded derivative asset - 20 Other 192 118 Total deferred tax liabilities $ 3,189 $ 4,339 Net deferred tax asset (liability) $ (2,391 ) $ (3,062 ) |
Reconciliation Of Unrecognized Tax Benefits | For the Years Ended December 31, 2017 2016 Balance as of beginning-of-year $ 1 $ 10 Increases for prior year tax positions 9 - Increases for current year tax positions 1 1 Decreases for expiring statutes - (10 ) Balance as of end-of-year $ 11 $ 1 |
DAC, VOBA, DSI and DFEL (Tables
DAC, VOBA, DSI and DFEL (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DAC, VOBA, DSI and DFEL [Abstract] | |
DAC | For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 8,269 $ 8,620 $ 7,527 Business acquired (sold) through reinsurance - - 38 Deferrals 1,345 1,339 1,483 Amortization, net of interest: Amortization, excluding unlocking, net of interest (922 ) (879 ) (813 ) Unlocking 61 (276 ) (232 ) Adjustment related to realized (gains) losses (55 ) (51 ) (44 ) Adjustment related to unrealized (gains) losses (789 ) (484 ) 661 Balance as of end-of-year $ 7,909 $ 8,269 $ 8,620 |
VOBA | For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 874 $ 873 $ 628 Business acquired (sold) through reinsurance - - (22 ) Deferrals 7 3 8 Amortization: Amortization, excluding unlocking (105 ) (105 ) (128 ) Unlocking (48 ) 36 (82 ) Accretion of interest (1) 52 52 56 Adjustment related to realized (gains) losses (1 ) (2 ) (1 ) Adjustment related to unrealized (gains) losses (280 ) 17 414 Balance as of end-of-year $ 499 $ 874 $ 873 (1) The interest accrual rates utilized to calculate the accretion of interest ranged from 4.2% to 6.9% . |
Estimated Future Amortization Of VOBA | 2018 $ 49 2019 51 2020 65 2021 65 2022 61 |
DSI | For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 293 $ 301 $ 285 Deferrals 29 25 29 Amortization, net of interest: Amortization, excluding unlocking, net of interest (30 ) (28 ) (33 ) Unlocking (4 ) (2 ) 2 Adjustment related to realized (gains) losses (2 ) (2 ) (1 ) Adjustment related to unrealized (gains) losses 1 (1 ) 19 Balance as of end-of-year $ 287 $ 293 $ 301 |
DFEL | For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 1,855 $ 1,923 $ 1,365 Deferrals 753 628 537 Amortization, net of interest: Amortization, excluding unlocking, net of interest (383 ) (345 ) (299 ) Unlocking (3 ) (63 ) (66 ) Adjustment related to realized (gains) losses (18 ) (11 ) (8 ) Adjustment related to unrealized (gains) losses (775 ) (277 ) 394 Balance as of end-of-year $ 1,429 $ 1,855 $ 1,923 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Reinsurance [Abstract] | |
Reinsurance amounts recorded on Consolidated Statements of Income (Loss) | For the Years Ended December 31, 2017 2016 2015 Direct insurance premiums and fee income $ 10,103 $ 9,373 $ 9,354 Reinsurance assumed 101 105 83 Reinsurance ceded (1,817 ) (1,728 ) (1,652 ) Total insurance premiums and fee income $ 8,387 $ 7,750 $ 7,785 Direct insurance benefits $ 6,669 $ 6,112 $ 6,304 Reinsurance recoveries netted against benefits (1,851 ) (1,865 ) (1,775 ) Total benefits $ 4,818 $ 4,247 $ 4,529 |
Goodwill and Specifically Ide42
Goodwill and Specifically Identifiable Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Specifically Identifiable Intangible Assets [Abstract] | |
Changes in the carrying amount of goodwill, by reportable segment | For the Year Ended December 31, 2017 Gross Accumulated Goodwill Impairment Net as of as of Goodwill Beginning- Beginning- as of End- of-Year of-Year Impairment of-Year Annuities $ 1,040 $ (600 ) $ - $ 440 Retirement Plan Services 20 - - 20 Life Insurance 2,186 (647 ) (905 ) 634 Group Protection 274 - - 274 Total goodwill $ 3,520 $ (1,247 ) $ (905 ) $ 1,368 For the Year Ended December 31, 2016 Gross Accumulated Goodwill Impairment Net as of as of Goodwill Beginning- Beginning- as of End- of-Year of-Year Impairment of-Year Annuities $ 1,040 $ (600 ) $ - $ 440 Retirement Plan Services 20 - - 20 Life Insurance 2,186 (647 ) - 1,539 Group Protection 274 - - 274 Total goodwill $ 3,520 $ (1,247 ) $ - $ 2,273 |
Schedule Of Intangible Assets By Reportable Segment | As of December 31, 2017 As of December 31, 2016 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Life Insurance: Sales force $ 100 $ 47 $ 100 $ 43 Retirement Plan Services: Mutual fund contract rights (1) 5 - 5 - Total $ 105 $ 47 $ 105 $ 43 (1) No amortization recorded as the intangible asset has indefinite life . |
Future estimated amortization of specifically identifiable intangible assets | 2018 $ 4 2019 4 2020 4 2021 4 2022 4 Thereafter 33 |
Guaranteed Benefit Features (Ta
Guaranteed Benefit Features (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Guaranteed Benefit Features [Abstract] | |
Information On Guaranteed Death Benefit Features | As of December 31, 2017 (1) 2016 (1) Return of Net Deposits Total account value $ 96,941 $ 87,707 Net amount at risk (2) 81 824 Average attained age of contract holders 64 years 63 years Minimum Return Total account value $ 108 $ 105 Net amount at risk (2) 18 22 Average attained age of contract holders 76 years 75 years Guaranteed minimum return 5% 5% Anniversary Contract Value Total account value $ 26,596 $ 24,605 Net amount at risk (2) 417 782 Average attained age of contract holders 70 years 69 years (1) Our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive. (2) Represents the amount of death benefit in excess of the account balance that is subject to market fluctuations. |
Summary Of Guaranteed Death Benefit Liabilities | For the Years Ended December 31, 2017 2016 2015 Balance as of beginning-of-year $ 110 $ 115 $ 89 Changes in reserves 8 34 52 Benefits paid (18 ) (39 ) (26 ) Balance as of end-of-year $ 100 $ 110 $ 115 |
Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts | As of December 31, 2017 2016 Asset Type Domestic equity $ 59,647 $ 50,337 International equity 20,837 16,714 Fixed income 40,626 37,795 Total $ 121,110 $ 104,846 Percent of total variable annuity separate account values 99% 99% |
Short-Term and Long-Term Debt (
Short-Term and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Short-Term and Long-Term Debt [Abstract] | |
Schedule of Debt | As of December 31, 2017 2016 Short-Term Debt Short-term debt (1) $ 10 $ 280 Long-Term Debt, Excluding Current Portion Surplus notes due LNC: LIBOR + 142 bps surplus note, due 2023 $ - $ 240 9.76% surplus note, due 2024 50 50 6.56% surplus note, due 2028 500 500 LIBOR + 111 bps surplus note, due 2028 71 71 LIBOR + 226 bps surplus note, due 2028 573 533 6.03% surplus note, due 2028 750 750 LIBOR + 200 bps surplus note, due 2035 30 30 LIBOR + 155 bps surplus note, due 2037 25 - 4.20% surplus note, due 2037 50 - LIBOR + 100 bps surplus note, due 2037 325 375 Total surplus notes 2,374 2,549 Total long-term debt $ 2,374 $ 2,549 (1) The short-term debt represents short-term notes payable to LNC. |
Future principal payments due on long-term debt | 2018 $ - 2019 - 2020 - 2021 - 2022 - Thereafter 2,374 Total $ 2,374 |
Credit facilities and letters of credit | As of December 31, 2017 Expiration Maximum LOCs Date Available Issued Credit Facilities Five-year revolving credit facility Jun-2021 $ 2,500 $ 275 LOC facility (1) Aug-2031 990 945 LOC facility (1) Oct-2031 1,023 1,020 Total $ 4,513 $ 2,240 (1) Our wholly-owned subsidiaries entered into irrevocable LOC facility agreements with third-party lenders supporting inter-company reinsurance agreements . |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Contingencies and Commitments [Abstract] | |
Future Rental Commitments | 2018 $ 31 2019 31 2020 27 2021 24 2022 19 Thereafter 66 Total $ 198 |
Future Capital Lease Commitments | 2018 $ 7 2019 90 2020 52 2021 62 2022 63 Thereafter 28 Total minimum lease payments 302 Less: Amount representing interest 26 Present value of minimum lease payments $ 276 |
Shares and Stockholders' Equi46
Shares and Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Shares and Stockholders' Equity [Abstract] | |
Components And Changes In Accumulated OCI | For the Years Ended December 31, 2017 2016 2015 Unrealized Gain (Loss) on AFS Securities Balance as of beginning-of-year $ 1,687 $ 934 $ 3,054 Unrealized holding gains (losses) arising during the year 2,872 1,549 (4,386 ) Change in foreign currency exchange rate adjustment 134 (100 ) (45 ) Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds (703 ) (460 ) 1,293 Income tax benefit (expense) (745 ) (351 ) 1,095 Less: Reclassification adjustment for gains (losses) included in net income (loss) (40 ) (155 ) 147 Associated amortization of DAC, VOBA, DSI and DFEL (19 ) (22 ) (28 ) Income tax benefit (expense) 21 62 (42 ) Balance as of end-of-year $ 3,283 $ 1,687 $ 934 Unrealized OTTI on AFS Securities Balance as of beginning-of-year $ 22 $ 19 $ 19 (Increases) attributable to: Gross OTTI recognized in OCI during the year - (53 ) (29 ) Change in DAC, VOBA, DSI and DFEL - 12 4 Income tax benefit (expense) - 14 8 Decreases attributable to: Changes in fair value, sales, maturities or other settlements of AFS securities 34 51 43 Change in DAC, VOBA, DSI and DFEL (7 ) (7 ) (17 ) Income tax benefit (expense) (10 ) (15 ) (9 ) Balance as of end-of-year $ 39 $ 22 $ 19 Unrealized Gain (Loss) on Derivative Instruments Balance as of beginning-of-year $ 93 $ 157 $ 127 Unrealized holding gains (losses) arising during the year 63 (175 ) (185 ) Change in foreign currency exchange rate adjustment (137 ) 96 48 Change in DAC, VOBA, DSI and DFEL 1 2 3 Income tax benefit (expense) 26 27 46 Less: Reclassification adjustment for gains (losses) included in net income (loss) 31 24 (184 ) Associated amortization of DAC, VOBA, DSI and DFEL (2 ) (2 ) 2 Income tax benefit (expense) (10 ) (8 ) 64 Balance as of end-of-year $ 27 $ 93 $ 157 Funded Status of Employee Benefit Plans Balance as of beginning-of-year $ (20 ) $ (19 ) $ (21 ) Adjustment arising during the year (4 ) (2 ) 3 Income tax benefit (expense) 2 1 (1 ) Balance as of end-of-year $ (22 ) $ (20 ) $ (19 ) |
Schedule of Reclassifications Out Of AOCI | For the Years Ended December 31, 2017 2016 2015 Unrealized Gain (Loss) on AFS Securities Gross reclassification $ (40 ) $ (155 ) $ 147 Total realized gain (loss) Associated amortization of DAC, VOBA, DSI and DFEL (19 ) (22 ) (28 ) Total realized gain (loss) Reclassification before income Income (loss) from continuing tax benefit (expense) (59 ) (177 ) 119 operations before taxes Income tax benefit (expense) 21 62 (42 ) Federal income tax expense (benefit) Reclassification, net of income tax $ (38 ) $ (115 ) $ 77 Net income (loss) Unrealized OTTI on AFS Securities Gross reclassification $ 5 $ 3 $ 2 Total realized gain (loss) Change in DAC, VOBA, DSI and DFEL (1 ) - - Total realized gain (loss) Reclassification before income Income (loss) from continuing tax benefit (expense) 4 3 2 operations before taxes Income tax benefit (expense) (1 ) - - Federal income tax expense (benefit) Reclassification, net of income tax $ 3 $ 3 $ 2 Net income (loss) Unrealized Gain (Loss) on Derivative Instruments Gross reclassifications: Interest rate contracts $ 4 $ 5 $ (190 ) Net investment income Interest rate contracts - 1 - Total realized gain (loss) Foreign currency contracts 18 11 6 Net investment income Foreign currency contracts 9 7 - Total realized gain (loss) Total gross reclassifications 31 24 (184 ) Associated amortization of DAC, VOBA, DSI and DFEL (2 ) (2 ) 2 Commissions and other expenses Reclassifications before income Income (loss) from continuing tax benefit (expense) 29 22 (182 ) operations before taxes Income tax benefit (expense) (10 ) (8 ) 64 Federal income tax expense (benefit) Reclassifications, net of income tax $ 19 $ 14 $ (118 ) Net income (loss) |
Realized Gain (Loss) (Tables)
Realized Gain (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Realized Gain (Loss) [Abstract] | |
Details underlying realized (gain) loss | For the Years Ended December 31, 2017 2016 2015 Total realized gain (loss) related to certain investments (1) $ (71 ) $ (241 ) $ (83 ) Realized gain (loss) on the mark-to-market on certain instruments (2) (155 ) (66 ) 123 Indexed annuity and IUL contracts net derivatives results: (3) Gross gain (loss) (22 ) (1 ) (78 ) Associated amortization of DAC, VOBA, DSI and DFEL (2 ) (4 ) 14 GLB fees ceded to LNBAR and attributed fees: Gross gain (loss) (174 ) (166 ) (161 ) Associated amortization of DAC, VOBA, DSI and DFEL (32 ) (32 ) (34 ) Realized gain (loss) on sale of subsidiaries/businesses (4) - - (3 ) Total realized gain (loss) $ (456 ) $ (510 ) $ (222 ) (1) See “Realized Gain (Loss) Related to Certain Investments” section in Note 5 . (2) Represents changes in the fair values of certain derivative investments (not including those associated with our variable and indexed annuity and IUL contracts net derivatives results), reinsurance related embedded derivatives and trading securities. (3) Represents the net difference between the change in the fair value of the S&P 500 call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products . (4) See “L incoln F inancial M edia Company ” in Note 3. |
Commissions and Other Expenses
Commissions and Other Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commissions And Other Expenses [Abstract] | |
Details underlying commissions and other expenses | For the Years Ended December 31, 2017 2016 2015 Commissions $ 1,998 $ 1,927 $ 2,082 General and administrative expenses 1,715 1,623 1,683 Expenses associated with reserve financing and unrelated LOCs 57 40 32 DAC and VOBA deferrals and interest, net of amortization (390 ) (170 ) (292 ) Broker-dealer expenses 329 320 329 Specifically identifiable intangible asset amortization 4 4 4 Media expenses - - 28 Taxes, licenses and fees 254 261 243 Total $ 3,967 $ 4,005 $ 4,109 |
Retirement and Deferred Compe49
Retirement and Deferred Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement and Deferred Compensation Plans [Abstract] | |
Benefit Plans' Assets And Obligations | As of or For the Years Ended December 31, 2017 2016 2017 2016 Other Postretirement Pension Plans Benefit Plans Fair value of plan assets $ 111 $ 117 $ 7 $ 7 Projected benefit obligation 119 117 12 11 Funded status $ (8 ) $ - $ (5 ) $ (4 ) Amounts Recognized on the Consolidated Balance Sheets Other assets $ - $ 2 $ - $ - Other liabilities (8 ) (2 ) (5 ) (4 ) Net amount recognized $ (8 ) $ - $ (5 ) $ (4 ) Weighted-Average Assumptions Benefit obligations: Weighted-average discount rate 4.00% 4.50% 4.00% 4.50% Net periodic benefit cost: Weighted-average discount rate 4.50% 4.50% 4.50% 4.50% Expected return on plan assets 4.75% 5.50% 6.50% 6.50% |
Fair Value Of Benefit Plan Assets | As of December 31, 2017 2016 Fixed maturity securities: Corporate bonds $ 1 $ 21 U.S. government bonds 105 93 U.S. government mortgage-backed securities 3 - Cash and invested cash 2 2 Other investments 7 8 Total $ 118 $ 124 |
Deferred Compensation Plans Liabilities And Investments | As of December 31, 2017 2016 Total liabilities (1) $ 517 $ 440 Investments dedicated to fund liabilities (2) 182 159 (1) Reported in other liabilities on our Consolidated Balance Sheets. Reported in other assets on our Consolidated Balance Sheets. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation Plans [Abstract] | |
Compensation Expense By Award Type | For the Years Ended December 31, 2017 2016 2015 Stock options $ 9 $ 9 $ 7 Performance shares 12 10 11 SARs 2 3 - RSUs 24 22 21 Total $ 47 $ 44 $ 39 Recognized tax benefit $ 16 $ 15 $ 14 |
Statutory Information and Res51
Statutory Information and Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Statutory Information and Restrictions [Abstract] | |
Statutory Information | As of December 31, 2017 2016 U.S. capital and surplus $ 8,074 $ 8,017 For the Years Ended December 31, 2017 2016 2015 U.S. net gain (loss) from operations, after-tax $ 1,312 $ 1,088 $ 583 U.S. net income (loss) 1,452 982 786 U.S. dividends to LNC holding company 954 950 1,121 |
Effects on statutory surplus compared to NAIC statutory surplus from the use of prescribed and permitted practices | As of December 31, 2017 2016 State Prescribed Practices Calculation of reserves using the Indiana universal life method $ 54 $ 79 Conservative valuation rate on certain annuities (50 ) (49 ) Vermont Subsidiaries Permitted Practices (1) Lesser of LOC and XXX additional reserve as surplus 1,965 2,855 LLC notes and variable value surplus notes 1,585 - Excess of loss reinsurance treaties 185 - |
Fair Value of Financial Instr52
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value of Financial Instruments [Abstract] | |
Carrying And Estimated Fair Values Of Financial Instruments | As of December 31, 2017 As of December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value Assets AFS securities: Fixed maturity securities $ 93,340 $ 93,340 $ 87,866 $ 87,866 VIEs’ fixed maturity securities - - 200 200 Equity securities 246 246 275 275 Trading securities 1,533 1,533 1,624 1,624 Mortgage loans on real estate 10,662 10,773 9,761 9,719 Derivative investments (1) 845 845 900 900 Other investments 2,006 2,006 2,034 2,034 Cash and invested cash 947 947 2,057 2,057 Reinsurance related embedded derivatives - - 58 58 Other assets: GLB direct embedded derivatives 903 903 - - GLB ceded embedded derivatives 51 51 371 371 Indexed annuity ceded embedded derivatives 11 11 - - Separate account assets 144,219 144,219 128,397 128,397 Liabilities Future contract benefits – indexed annuity and IUL contracts embedded derivatives (1,418 ) (1,418 ) (1,139 ) (1,139 ) Other contract holder funds: Remaining guaranteed interest and similar contracts (592 ) (592 ) (629 ) (629 ) Account values of certain investment contracts (32,332 ) (36,161 ) (31,475 ) (35,647 ) Short-term debt (10 ) (10 ) (280 ) (280 ) Long-term debt (2,374 ) (2,677 ) (2,549 ) (2,739 ) Reinsurance related embedded derivatives (51 ) (51 ) - - Other liabilities: Derivative liabilities (1) (455 ) (455 ) (738 ) (738 ) GLB direct embedded derivatives - - (371 ) (371 ) GLB ceded embedded derivatives (954 ) (954 ) - - Benefit Plans’ Assets (2) 118 118 124 124 (1) We have master netting agreements with each of our derivative counterparties, which allow for the netting of our derivative asset and liability positions by counterparty. (2) Included in the funded statuses of the benefit plans, which is reported in other liabilities on our Consolidated Balance Sheets . Refer to Note 17 for information regarding our benefit plans . |
Fair Value Of Assets And Liabilities On A Recurring Basis | As of December 31, 2017 Quoted Prices in Active Markets for Significant Significant Identical Observable Unobservable Total Assets Inputs Inputs Fair (Level 1) (Level 2) (Level 3) Value Assets Investments: Fixed maturity AFS securities: Corporate bonds $ - $ 75,810 $ 5,350 $ 81,160 ABS - 927 26 953 U.S. government bonds 522 6 5 533 Foreign government bonds - 336 110 446 RMBS - 3,246 12 3,258 CMBS - 593 6 599 CLOs - 717 91 808 State and municipal bonds - 4,959 - 4,959 Hybrid and redeemable preferred securities 70 478 76 624 Equity AFS securities 28 57 161 246 Trading securities 73 1,411 49 1,533 Derivative investments (1) - 740 603 1,343 Cash and invested cash - 947 - 947 Other assets: GLB direct embedded derivatives - - 903 903 GLB ceded embedded derivatives - - 51 51 Indexed annuity ceded embedded derivatives - - 11 11 Separate account assets 814 143,405 - 144,219 Total assets $ 1,507 $ 233,632 $ 7,454 $ 242,593 Liabilities Future contract benefits – indexed annuity and IUL contracts embedded derivatives $ - $ - $ (1,418 ) $ (1,418 ) Reinsurance related embedded derivatives - (51 ) - (51 ) Other liabilities: Derivative liabilities (1) - (380 ) (573 ) (953 ) GLB ceded embedded derivatives - - (954 ) (954 ) Total liabilities $ - $ (431 ) $ (2,945 ) $ (3,376 ) Benefit Plans’ Assets $ - $ 118 $ - $ 118 As of December 31, 2016 Quoted Prices in Active Markets for Significant Significant Identical Observable Unobservable Total Assets Inputs Inputs Fair (Level 1) (Level 2) (Level 3) Value Assets Investments: Fixed maturity AFS securities: Corporate bonds $ - $ 71,554 $ 4,809 $ 76,363 ABS - 1,021 33 1,054 U.S. government bonds 366 11 - 377 Foreign government bonds - 390 111 501 RMBS - 3,394 3 3,397 CMBS - 339 7 346 CLOs - 676 68 744 State and municipal bonds - 4,495 - 4,495 Hybrid and redeemable preferred securities 60 453 76 589 VIEs’ fixed maturity securities - 200 - 200 Equity AFS securities 17 81 177 275 Trading securities 102 1,457 65 1,624 Derivative investments (1) - 1,148 599 1,747 Cash and invested cash - 2,057 - 2,057 Reinsurance related embedded derivatives - 58 - 58 Other assets – GLB ceded embedded derivatives - - 371 371 Separate account assets 813 127,584 - 128,397 Total assets $ 1,358 $ 214,918 $ 6,319 $ 222,595 Liabilities Future contract benefits – indexed annuity and IUL contracts embedded derivatives $ - $ - $ (1,139 ) $ (1,139 ) Other liabilities: Derivative liabilities (1) - (893 ) (692 ) (1,585 ) GLB direct embedded derivatives - - (371 ) (371 ) Total liabilities $ - $ (893 ) $ (2,202 ) $ (3,095 ) Benefit Plans’ Assets $ - $ 124 $ - $ 124 (1) Derivative investment assets and liabilities presented within the fair value hierarchy are presented on a gross basis by derivative type and not on a master netting basis by counterparty . |
Fair Value Measured On A Recurring Basis Reconciliation | For the Year Ended December 31, 2017 Gains Issuances, Transfers Items (Losses) Sales, Into or Included in Maturities, Out Beginning in OCI Settlements, of Ending Fair Net and Calls, Level 3, Fair Value Income Other (1) Net Net (2) Value Investments: (3) Fixed maturity AFS securities: Corporate bonds $ 4,809 $ 17 $ 199 $ (45 ) $ 370 $ 5,350 ABS 33 - - - (7 ) 26 U.S. government bonds - - - - 5 5 Foreign government bonds 111 - (1 ) - - 110 RMBS 3 - - 19 (10 ) 12 CMBS 7 - 1 54 (56 ) 6 CLOs 68 - - 124 (101 ) 91 State and municipal bonds - (1 ) - - 1 - Hybrid and redeemable preferred securities 76 - 14 - (14 ) 76 Equity AFS securities 177 1 (3 ) (13 ) (1 ) 161 Trading securities 65 3 8 (26 ) (1 ) 49 Derivative investments (93 ) (27 ) 127 23 - 30 Other assets: (4) GLB direct embedded derivatives - 903 - - - 903 GLB ceded embedded derivatives 371 (320 ) - - - 51 Indexed annuity ceded embedded derivatives - - - 11 - 11 Future contract benefits – indexed annuity and IUL contracts embedded derivatives (4) (1,139 ) (400 ) - 121 - (1,418 ) Other liabilities: (4) GLB direct embedded derivatives (371 ) 371 - - - - GLB ceded embedded derivatives - (954 ) - - - (954 ) Total, net $ 4,117 $ (407 ) $ 345 $ 268 $ 186 $ 4,509 For the Year Ended December 31, 2016 Gains Issuances, Transfers Items (Losses) Sales, Into or Included in Maturities, Out Beginning in OCI Settlements, of Ending Fair Net and Calls, Level 3, Fair Value Income Other (1) Net Net (2) Value Investments: (3) Fixed maturity AFS securities: Corporate bonds $ 4,273 $ 4 $ (29 ) $ 159 $ 402 $ 4,809 ABS 45 - (1 ) 14 (25 ) 33 U.S. government bonds - - - (2 ) 2 - Foreign government bonds 111 - - - - 111 RMBS 1 - - 54 (52 ) 3 CMBS 10 2 (1 ) 27 (31 ) 7 CLOs 551 - - 138 (621 ) 68 Hybrid and redeemable preferred securities 94 - (3 ) (15 ) - 76 Equity AFS securities 164 5 (4 ) 12 - 177 Trading securities 73 3 - 6 (17 ) 65 Derivative investments 555 (483 ) (1 ) (164 ) - (93 ) Other assets – GLB ceded embedded derivatives (4) 952 (581 ) - - - 371 Future contract benefits – indexed annuity and IUL contracts embedded derivatives (4) (1,100 ) (120 ) - 81 - (1,139 ) VIEs’ liabilities – derivative instruments (5) (4 ) 4 - - - - Other liabilities: Credit default swaps (5) (9 ) (6 ) - 15 - - GLB direct embedded derivatives (4) (952 ) 581 - - - (371 ) Total, net $ 4,764 $ (591 ) $ (39 ) $ 325 $ (342 ) $ 4,117 For the Year Ended December 31, 2015 Gains Issuances, Transfers Items (Losses) Sales, Into or Included in Maturities, Out Beginning in OCI Settlements, of Ending Fair Net and Calls, Level 3, Fair Value Income Other (1) Net Net (2) Value Investments: (3) Fixed maturity AFS securities: Corporate bonds $ 4,052 $ 4 $ (138 ) $ 298 $ 57 $ 4,273 ABS 33 - - 12 - 45 Foreign government bonds 110 - 1 - - 111 RMBS 1 3 - (3 ) - 1 CMBS 15 1 8 (14 ) - 10 CLOs 368 - 1 194 (12 ) 551 Hybrid and redeemable preferred securities 55 - (3 ) - 42 94 Equity AFS securities 157 1 4 3 (1 ) 164 Trading securities 73 2 (2 ) - - 73 Derivative investments 989 (90 ) (41 ) (303 ) - 555 Other assets – GLB ceded embedded derivatives (4) 174 778 - - - 952 Future contract benefits – indexed annuity and IUL contracts embedded derivatives (4) (1,170 ) (57 ) - 127 - (1,100 ) VIEs’ liabilities – derivative instruments (5) (13 ) 9 - - - (4 ) Other liabilities: Credit default swaps (5) (3 ) (6 ) - - - (9 ) GLB direct embedded derivatives (4) (174 ) (778 ) - - - (952 ) Total, net $ 4,667 $ (133 ) $ (170 ) $ 314 $ 86 $ 4,764 (1) The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 6 ). (2) Transfers into or out of Level 3 for AFS and trading securities are displayed at amortized cost as of the beginning-of-year. For AFS and trading securities, the difference between beginning-of-year amortized cost and beginning-of-year fair value was included in OCI and earnings, respectively, in prior years. (3) Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss). Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) . (4) Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). (5) The changes in fair value of the credit default swaps and contingency forwards are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
Schedule Of Investment Holdings Movements | For the Year Ended December 31, 2017 Issuances Sales Maturities Settlements Calls Total Investments: Fixed maturity AFS securities: Corporate bonds $ 850 $ (448 ) $ (98 ) $ (205 ) $ (144 ) $ (45 ) RMBS 19 - - - - 19 CMBS 55 - - (1 ) - 54 CLOs 124 - - - - 124 Equity AFS securities 18 (31 ) - - - (13 ) Trading securities 2 (27 ) - (1 ) - (26 ) Derivative investments 197 233 (407 ) - - 23 Other assets – indexed annuity ceded embedded derivatives 11 - - - - 11 Future contract benefits – indexed annuity and IUL contracts embedded derivatives (71 ) - - 192 - 121 Total, net $ 1,205 $ (273 ) $ (505 ) $ (15 ) $ (144 ) $ 268 For the Year Ended December 31, 2016 Issuances Sales Maturities Settlements Calls Total Investments: Fixed maturity AFS securities: Corporate bonds $ 560 $ (62 ) $ (23 ) $ (176 ) $ (140 ) $ 159 ABS 15 - - (1 ) - 14 U.S. government bonds - - - (2 ) - (2 ) RMBS 54 - - - - 54 CMBS 31 (1 ) - (3 ) - 27 CLOs 140 - - (2 ) - 138 Hybrid and redeemable preferred securities - (15 ) - - - (15 ) Equity AFS securities 18 (6 ) - - - 12 Trading securities 7 - - (1 ) - 6 Derivative investments 176 (169 ) (171 ) - - (164 ) Future contract benefits – indexed annuity and IUL contracts embedded derivatives (70 ) - - 151 - 81 Other liabilities – credit default swaps - 15 - - - 15 Total, net $ 931 $ (238 ) $ (194 ) $ (34 ) $ (140 ) $ 325 For the Year Ended December 31, 2015 Issuances Sales Maturities Settlements Calls Total Investments: Fixed maturity AFS securities: Corporate bonds $ 537 $ (38 ) $ (44 ) $ (117 ) $ (40 ) $ 298 ABS 13 - - (1 ) - 12 RMBS - (3 ) - - - (3 ) CMBS - - - (13 ) (1 ) (14 ) CLOs 217 - - (23 ) - 194 Equity AFS securities 43 (40 ) - - - 3 Trading securities 1 - - (1 ) - - Derivative investments 179 (162 ) (320 ) - - (303 ) Future contract benefits – indexed annuity and IUL contracts embedded derivatives (51 ) - - 178 - 127 Total, net $ 939 $ (243 ) $ (364 ) $ 23 $ (41 ) $ 314 |
Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held | For the Years Ended December 31, 2017 2016 2015 Derivative investments $ (266 ) $ (432 ) $ (102 ) Embedded derivatives: Indexed annuity and IUL contracts (14 ) (16 ) (84 ) Other assets – GLB ceded 1,904 1,122 (244 ) Other liabilities – GLB direct (1,904 ) (1,122 ) 244 VIEs’ liabilities – derivative instruments - 4 9 Credit default swaps - - (6 ) Total, net (1) $ (280 ) $ (444 ) $ (183 ) (1) Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) . |
Components Of The Transfers In And Out Of Level 3 | The following provides the components of the transfers into and out of Level 3 (in millions) as reported above: For the Year Ended December 31, 2017 Transfers Transfers Into Out of Level 3 Level 3 Total Investments: Fixed maturity AFS securities: Corporate bonds $ 458 $ (88 ) $ 370 ABS 14 (21 ) (7 ) U.S. government bonds 5 - 5 RMBS - (10 ) (10 ) CMBS 3 (59 ) (56 ) CLOs 30 (131 ) (101 ) State and municipal bonds 2 (1 ) 1 Hybrid and redeemable preferred securities - (14 ) (14 ) Equity AFS securities - (1 ) (1 ) Trading securities 4 (5 ) (1 ) Total, net $ 516 $ (330 ) $ 186 For the Year Ended December 31, 2016 Transfers Transfers Into Out of Level 3 Level 3 Total Investments: Fixed maturity AFS securities: Corporate bonds $ 605 $ (203 ) $ 402 ABS 3 (28 ) (25 ) U.S. government bonds 9 (7 ) 2 RMBS 2 (54 ) (52 ) CMBS - (31 ) (31 ) CLOs - (621 ) (621 ) Trading securities 1 (18 ) (17 ) Total, net $ 620 $ (962 ) $ (342 ) For the Year Ended December 31, 2015 Transfers Transfers Into Out of Level 3 Level 3 Total Investments: Fixed maturity AFS securities: Corporate bonds $ 224 $ (167 ) $ 57 Foreign government bonds 4 (4 ) - CLOs 4 (16 ) (12 ) Hybrid and redeemable preferred securities 47 (5 ) 42 Equity AFS securities - (1 ) (1 ) Trading securities 4 (4 ) - Total, net $ 283 $ (197 ) $ 86 |
Fair Value Inputs Quantitative Information | Fair Valuation Significant Assumption or Value Technique Unobservable Inputs Input Ranges Assets Investments: Fixed maturity AFS and trading securities: Corporate bonds $ 2,395 Discounted cash flow Liquidity/duration adjustment (1) 0.5 % - 21.0 % ABS 24 Discounted cash flow Liquidity/duration adjustment (1) 3.0 % - 3.0 % Foreign government bonds 78 Discounted cash flow Liquidity/duration adjustment (1) 1.7 % - 3.4 % Hybrid and redeemable preferred securities 4 Discounted cash flow Liquidity/duration adjustment (1) 1.8 % - 1.8 % Equity AFS securities 22 Discounted cash flow Liquidity/duration adjustment (1) 4.5 % - 4.9 % Other assets: GLB direct and ceded embedded derivatives 954 Discounted cash flow Long-term lapse rate (2) 1 % - 30 % Utilization of guaranteed withdrawals (3) 85 % - 100 % Claims utilization factor (4) 60 % - 100 % Premiums utilization factor (4) 80 % - 115 % NPR (5) 0.01 % - 0.25 % Mortality rate (6) (8) Volatility (7) 1 % - 29 % Indexed annuity ceded embedded derivatives 11 Discounted cash flow Lapse rate (2) 1 % - 9 % Mortality rate (6) (8) Liabilities Future contract benefits – indexed annuity and IUL contracts embedded derivatives $ (1,418 ) Discounted cash flow Lapse rate (2) 1 % - 9 % Mortality rate (6) (8) Other liabilities – GLB ceded embedded derivatives (954 ) Discounted cash flow Long-term lapse rate (2) 1 % - 30 % Utilization of guaranteed withdrawals (3) 85 % - 100 % Claims utilization factor (4) 60 % - 100 % Premiums utilization factor (4) 80 % - 115 % NPR (5) 0.01 % - 0.25 % Mortality rate (6) (8) Volatility (7) 1 % - 29 % (1) The liquidity/duration adjustment input represents an estimated market participant composite of adjustments attributable to liquidity premiums, expected durations, structures and credit quality that would be applied to the market observable information of an investment. (2) The lapse rate input represents the estimated probability of a contract surrendering during a year, and thereby forgoing any future benefits . The range for indexed annuity and IUL contracts represents the lapse rates during the surrender charge period. (3) The utilization of guaranteed withdrawals input represents the estimated percentage of contract holders that utilize the guaranteed withdrawal feature. (4) The utilization factors are applied to the present value of claims or premiums, as appropriate, in the GLB reserve calculation to estimate the impact of inefficient withdrawal behavior, including taking less than or more than the maximum guaranteed withdrawal. (5) The NPR input represents the estimated additional credit spread that market participants would apply to the market observable discount rate when pricing a contract. (6) The mortality rate input represents the estimated probability of when an individual belonging to a particular group, categorized according to age or some other factor such as gender, will die . (7) The volatility input represents overall volatilities assumed for the underlying variable annuity funds, which include a mixture of equity and fixed-income assets . Fair value of the variable annuity GLB embedded derivatives would increase if higher volatilities were used for valuation. (8) The mortality rate is based on a combination of company and industry experience, adjusted for improvement factors. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information [Abstract] | |
Reconciliation Of Revenue From Segments To Consolidated | For the Years Ended December 31, 2017 2016 2015 Revenues Operating revenues: Annuities $ 4,034 $ 3,710 $ 3,815 Retirement Plan Services 1,152 1,092 1,090 Life Insurance 6,128 5,798 5,484 Group Protection 2,200 2,129 2,356 Other Operations 263 301 335 Excluded realized gain (loss), pre-tax (630 ) (690 ) (400 ) Amortization of deferred gain arising from reserve changes on business sold through reinsurance, pre-tax 1 3 3 Total revenues $ 13,148 $ 12,343 $ 12,683 |
Reconciliation Of Income (Loss) From Operations By Segment To Consolidated Net Income (Loss) | For the Years Ended December 31, 2017 2016 2015 Net Income (Loss) Income (loss) from operations: Annuities $ 1,072 $ 971 $ 1,032 Retirement Plan Services 142 121 134 Life Insurance 522 464 296 Group Protection 103 65 42 Other Operations (30 ) - (73 ) Excluded realized gain (loss), after-tax (409 ) (450 ) (260 ) Gain (loss) on early extinguishment of debt, after-tax (3 ) - - Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance, after-tax - 2 2 Net impact from the Tax Cuts and Jobs Act 1,526 - - Impairment of intangibles, after-tax (905 ) - - Net income (loss) $ 2,018 $ 1,173 $ 1,173 |
Reconciliation of Net Investment Income From Segments to Consolidated | For the Years Ended December 31, 2017 2016 2015 Net Investment Income Annuities $ 982 $ 983 $ 977 Retirement Plan Services 893 855 842 Life Insurance 2,496 2,403 2,390 Group Protection 167 176 183 Other Operations 222 214 219 Total net investment income $ 4,760 $ 4,631 $ 4,611 |
Reconciliation of DAC VOBA Amortization From Segments to Consolidated | For the Years Ended December 31, 2017 2016 2015 Amortization of DAC and VOBA, Net of Interest Annuities $ 402 $ 310 $ 284 Retirement Plan Services 26 27 29 Life Insurance 455 709 806 Group Protection 79 126 80 Total amortization of DAC and VOBA, net of interest $ 962 $ 1,172 $ 1,199 |
Reconciliation of Federal Income Tax Expense (Benefit) From Segments to Consolidated | For the Years Ended December 31, 2017 2016 2015 Federal Income Tax Expense (Benefit) Annuities $ 198 $ 261 $ 281 Retirement Plan Services 50 43 46 Life Insurance 236 210 118 Group Protection 55 35 23 Other Operations (78 ) (42 ) (33 ) Excluded realized gain (loss) (220 ) (241 ) (141 ) Gain (loss) on early extinguishment of debt (2 ) - - Reserve changes (net of related amortization) on business sold through reinsurance - 1 1 Net impact from the Tax Cuts and Jobs Act (1,526 ) - - Total federal income tax expense (benefit) $ (1,287 ) $ 267 $ 295 |
Reconciliation of Assets From Segments to Consolidated Balance Sheet | As of December 31, 2017 2016 Assets Annuities $ 144,035 $ 132,956 Retirement Plan Services 37,077 34,346 Life Insurance 81,565 75,868 Group Protection 4,033 4,007 Other Operations 15,162 14,874 Total assets $ 281,872 $ 262,051 |
Supplemental Disclosures of C54
Supplemental Disclosures of Cash Flow (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Disclosures of Cash Flow Data [Abstract] | |
Summary of supplemental cash flow data | For the Years Ended December 31, 2017 2016 2015 Interest paid $ 123 $ 91 $ 106 Income taxes paid (received) 215 121 125 Significant non-cash investing and financing transactions: Acquisition of note receivable from affiliate 74 42 54 Other assets received in our financing transaction - - 252 Exchange of surplus note for promissory note with affiliate: Carrying value of asset 109 124 123 Carrying value of liability (109 ) (124 ) (123 ) Net asset (liability) from exchange $ - $ - $ - |
Quarterly Results of Operatio55
Quarterly Results of Operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Results of Operations [Abstract] | |
Quarterly Results Of Operations | For the Three Months Ended March 31, June 30, September 30, December 31, (1) 2017 Total revenues $ 3,229 $ 3,237 $ 3,269 $ 3,413 Total expenses 2,881 2,840 2,809 3,887 Net income (loss) 349 321 385 963 2016 Total revenues $ 2,885 $ 2,930 $ 3,181 $ 3,347 Total expenses 2,781 2,677 2,739 2,706 Net income (loss) 125 219 359 470 (1) Fourth quarter 2017 results include a goodwill impairment charge and the impacts of remeasuring our existing deferred t ax balances for the impact of the Tax Act as disclosed elsewhere herein. |
Transactions With Affiliates (T
Transactions With Affiliates (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Transactions With Affiliates [Abstract] | |
Schedule Of Transactions With Affiliates | As of December 31, 2017 2016 Assets with affiliates: Accrued inter-company interest receivable $ 8 $ 8 Accrued investment income Bonds 1,444 1,611 Fixed maturity AFS securities Limited partnerships (66 ) - Other investments Ceded reinsurance contracts (188 ) (191 ) Deferred acquisition costs and value of business acquired Ceded reinsurance contracts 2,152 2,148 Reinsurance recoverables Ceded reinsurance contracts 8 112 Reinsurance related embedded derivatives Ceded reinsurance contracts 39 207 Other assets Cash management agreement 441 164 Other assets Service agreement receivable 15 27 Other assets Liabilities with affiliates: Accrued inter-company interest payable 29 26 Other liabilities Assumed reinsurance contracts 32 31 Future contract benefits Assumed reinsurance contracts 400 403 Other contract holder funds Service agreement payable 8 34 Other liabilities Ceded reinsurance contracts (47 ) (47 ) Other contract holder funds Ceded reinsurance contracts 2,587 2,851 Funds withheld reinsurance liabilities Ceded reinsurance contracts (166 ) (171 ) Deferred gain on business sold through reinsurance Ceded reinsurance contracts 984 84 Other liabilities Inter-company short-term debt 10 280 Short-term debt Inter-company long-term debt 2,374 2,549 Long-term debt The following summarizes transactions with affiliates (in millions) and the associated line item on our Consolidated Statements of Comprehensive Income (Loss): For the Years Ended December 31, 2017 2016 2015 Revenues with affiliates: Premiums received on assumed (paid on ceded) $ (393 ) $ (389 ) $ (411 ) Insurance premiums reinsurance contracts Net investment income on inter-company notes 42 38 31 Net investment income Fees for management of general account (100 ) (117 ) (109 ) Net investment income Net investment income on ceded funds withheld treaties (84 ) (69 ) (62 ) Net investment income Realized gains (losses) on ceded reinsurance contracts: GLB reserves embedded derivatives (1,055 ) (516 ) 664 Realized gain (loss) Reinsurance related settlements 951 488 (881 ) Realized gain (loss) Other gains (losses) (150 ) (93 ) 157 Realized gain (loss) Amortization of deferred gain on reinsurance contracts (5 ) (5 ) (5 ) Amortization of deferred gain on business sold through reinsurance Benefits and expenses with affiliates: Reinsurance (recoveries) benefits on ceded reinsurance (299 ) (424 ) (478 ) Benefits Ceded reinsurance contracts (12 ) (14 ) (15 ) Commissions and other expenses Service agreement payments 3 76 42 Commissions and other expenses Interest expense on inter-company debt 120 111 102 Interest and debt expense Interest credited on assumed reinsurance contracts 67 61 59 Interest credited |
Nature of Operations, Basis o57
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Details) item in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Product Information [Line Items] | |||
Grace Period Expiration (In Days) | 10 days | ||
Loans Reported As Delinquent In Days | 60 days | ||
Period In Which Loans No Longer Accrue Interest In Days | 90 days | ||
Front End Load Annuity Products Assumed Life (In Years) | 25 years | ||
Useful Life of Sales Force Intangible Assets (In Years) | 25 years | ||
Loss on ceded contracts, recognition period | 30 years | ||
Number Of Scenarios Used Per Policy To Value A Block Of Guarantees | 100 | ||
Total Scenarios To Value GLB liability | item | 49 | ||
Participating Policies as a Percentage of the Face Amount of the Insurance In Force | 1.00% | 1.00% | |
Dividend Expenses | $ | $ 57 | $ 59 | $ 67 |
Maximum [Member] | |||
Product Information [Line Items] | |||
Estimated Contract Life UL Policies (In Years) | 40 years | ||
Estimated Contract Life VUL Policies (In Years) | 40 years | ||
Estimated Contract Life Fixed and Variable Deferred Annuities (In Years) | 30 years | ||
Traditional Contract Acquisition Cost Amortization Period (In Years) | 30 years | ||
Interest Crediting Rate | 10 | 10 | 10 |
Minimum [Member] | |||
Product Information [Line Items] | |||
Estimated Contract Life UL Policies (In Years) | 30 years | ||
Estimated Contract Life VUL Policies (In Years) | 30 years | ||
Estimated Contract Life Fixed and Variable Deferred Annuities (In Years) | 15 years | ||
Interest Crediting Rate | 1 | 1 | 1 |
First Penn-Pacific Life Insurance Company [Member] | |||
Product Information [Line Items] | |||
No. of Years in Which Deferred Gain From Reinsurance Transaction is Recognized as Income | 15 years | ||
LNBAR [Member] | |||
Product Information [Line Items] | |||
No. of Years in Which Deferred Gain From Reinsurance Transaction is Recognized as Income | 30 years | ||
Life Insurance Segment [Member] | Maximum [Member] | |||
Product Information [Line Items] | |||
Investment Yield Assumptions for Traditional Direct Individual Life Reserves | 7.75% | ||
Life Insurance Segment [Member] | Minimum [Member] | |||
Product Information [Line Items] | |||
Investment Yield Assumptions for Traditional Direct Individual Life Reserves | 2.25% | ||
Annuities Segment [Member] | Maximum [Member] | |||
Product Information [Line Items] | |||
Investment Yield Assumptions for Immediate and Deferred Paid-Up Annuities | 12.75% | ||
Annuities Segment [Member] | Minimum [Member] | |||
Product Information [Line Items] | |||
Investment Yield Assumptions for Immediate and Deferred Paid-Up Annuities | 1.25% |
New Accounting Standards (Narra
New Accounting Standards (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Income tax expense (benefit) | $ (1,287) | $ 267 | $ 295 | ||
Impairment | 905 | ||||
Equity securities | $ 246 | 246 | 275 | ||
Deferred tax impact from the Tax Cut and Jobs Act | (1,526) | ||||
Accounting Standards Update 2016-09 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Income tax expense (benefit) | $ (4) | ||||
Accounting Standards Update 2017-04 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Impairment | 905 | ||||
Accounting Standards Update 2016-01 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Equity securities | $ 110 | $ 110 | |||
Accounting Standards Update 2018-02 [Member] | Scenario, Forecast [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Deferred tax impact from the Tax Cut and Jobs Act | $ 600 |
Dispositions (Narrative) (Detai
Dispositions (Narrative) (Details) - Sale of LFM to Entercom [Member] - USD ($) $ in Millions | Jul. 16, 2015 | Dec. 31, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Pre-Tax Proceeds | $ 75 | |
Preferred stock received as consideration | $ 28 | |
Loss from operations | $ 2 |
Variable Interest Entities (Nar
Variable Interest Entities (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Variable Interest Entity [Line Items] | ||
Long-Term Senior Note Issued In Exchange For Corporate Bond Afs Security | $ 275 | |
Carrying Amounts of our Investments in LPs and LLCs, As Recognized In Other Investments on our Consolidated Balance Sheets | 2,006 | $ 2,034 |
Credit Linked Note Structure April 2007 [Member] | ||
Variable Interest Entity [Line Items] | ||
CLN | 0 | 200 |
Limited Partnerships and Limited Liability Companies [Member] | ||
Variable Interest Entity [Line Items] | ||
Carrying Amounts of our Investments in LPs and LLCs, As Recognized In Other Investments on our Consolidated Balance Sheets | 1,400 | 1,300 |
Carrying Amount Of Investments In Qualified Affordable Housing Projects | 31 | 37 |
Income Tax Credits And Other Tax Benefits From Qualified Affordable Housing Projects | $ 3 | $ 3 |
Variable Interest Entities (Con
Variable Interest Entities (Consolidated Variable Interest Entity Asset and Liability Information) (Details) $ in Millions | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | |
Variable Interest Entity [Line Items] | |||
Number of Instruments | item | 1 | ||
Notional Amounts, Assets | $ 200 | ||
Carrying Value, Assets | $ 200 | ||
Credit Default Swaps [Member] | |||
Variable Interest Entity [Line Items] | |||
Number of Instruments | item | 1 | ||
Notional Amounts, Assets | $ 200 | ||
Fixed Maturity Securities [Member] | Asset-Backed Credit Card Loans [Member] | |||
Variable Interest Entity [Line Items] | |||
Number of Instruments | item | [1] | ||
Notional Amounts, Assets | [1] | ||
Carrying Value, Assets | [1] | $ 200 | |
[1] | Reported in variable interest entities' fixed maturity securities on our Consolidated Balance Sheets |
Variable Interest Entities (C62
Variable Interest Entities (Consolidated Variable Interest Entity Settlement Payments and Mark-to-Market Adjustments) (Details) - Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Consolidated Variable Interest Entity Settlement Payments And Mark To Market Adjustments [Line Items] | |||
Gains (losses) for consolidated variable interest entities | [1] | $ 4 | |
Credit Default Swaps [Member] | |||
Consolidated Variable Interest Entity Settlement Payments And Mark To Market Adjustments [Line Items] | |||
Gains (losses) for consolidated variable interest entities | 4 | ||
Contingent Forwards [Member] | |||
Consolidated Variable Interest Entity Settlement Payments And Mark To Market Adjustments [Line Items] | |||
Gains (losses) for consolidated variable interest entities | |||
[1] | Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
Investments (Narrative) (Detail
Investments (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Investment [Line Items] | |||
Increase (decrease) in gross AFS securities unrealized losses | $ 669 | ||
Unrealized gain (loss), trading securities | $ 8 | $ (3) | $ (96) |
Number of partnerships in alternative investment portfolio | item | 221 | 202 | |
Alternative investments as a percentage of overall invested assets | 1.00% | 1.00% | |
Fair value of collateral received that we are permitted to sell or re-pledge | $ 175 | ||
Securities that have been re-pledged | 174 | ||
Investment commitments | 1,300 | ||
Investment commitments for limited partnerships | 752 | ||
Investment commitments for mortgage loans on real estate | 320 | ||
Investment commitments for private placements | 196 | ||
Federal Home Loan Mortgage Corporation [Member] | Invested Assets [Member] | |||
Investment [Line Items] | |||
Fair value | $ 1,200 | $ 1,500 | |
Concentration risk, percentage | 1.00% | 1.00% | |
Fannie Mae [Member] | Invested Assets [Member] | |||
Investment [Line Items] | |||
Fair value | $ 930 | $ 1,100 | |
Concentration risk, percentage | 1.00% | 1.00% | |
Consumer Non-Cyclical Industry [Member] | Invested Assets [Member] | |||
Investment [Line Items] | |||
Fair value | $ 14,300 | $ 13,000 | |
Concentration risk, percentage | 13.00% | 12.00% | |
Utilities Industry [Member] | Invested Assets [Member] | |||
Investment [Line Items] | |||
Fair value | $ 13,800 | $ 12,800 | |
Concentration risk, percentage | 12.00% | 12.00% | |
Mortgage Loans On Real Estate [Member] | Geographic Concentration Risk [Member] | California [Member] | |||
Investment [Line Items] | |||
Concentration risk, percentage | 21.00% | 20.00% | |
Mortgage Loans On Real Estate [Member] | Geographic Concentration Risk [Member] | Texas [Member] | |||
Investment [Line Items] | |||
Concentration risk, percentage | 12.00% | 11.00% | |
Corporate Bonds [Member] | |||
Investment [Line Items] | |||
Percentage of fair value rated as investment grade | 96.00% | 95.00% | |
Amortized cost of portfolio rated below investment grade | $ 3,400 | $ 3,700 | |
Fair value of portfolio rated below investment grade | $ 3,400 | $ 3,600 | |
ABS [Member] | |||
Investment [Line Items] | |||
Percentage of fair value rated as investment grade | 98.00% | 96.00% | |
Amortized cost of portfolio rated below investment grade | $ 43 | $ 87 | |
Fair value of portfolio rated below investment grade | $ 41 | $ 73 | |
MBS [Member] | |||
Investment [Line Items] | |||
Projected default rate on existing delinquencies on MBS (low end of range) | 10.00% | 10.00% | |
Projected default rate on existing delinquencies on MBS (high end of range) | 100.00% | 100.00% | |
Severity of second lien loans | 100.00% | ||
Severity of first lien loans | 30.00% |
Investments (Reconciliation Of
Investments (Reconciliation Of Available-For-Sale Securities From Cost Basis To Fair Value) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | $ 86,049 | $ 83,750 | |
Gross unrealized gains | 7,909 | 5,652 | |
Gross unrealized losses | 433 | 1,088 | |
OTTI | [1] | (61) | (27) |
Fair value | 93,586 | 88,341 | |
Equity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 247 | 260 | |
Gross unrealized gains | 16 | 18 | |
Gross unrealized losses | 17 | 3 | |
Fair value | 246 | 275 | |
Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 85,802 | 83,490 | |
Gross unrealized gains | 7,893 | 5,634 | |
Gross unrealized losses | 416 | 1,085 | |
OTTI | [1] | (61) | (27) |
Fair value | 93,340 | 88,066 | |
Corporate Bonds [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 74,921 | 72,706 | |
Gross unrealized gains | 6,573 | 4,583 | |
Gross unrealized losses | 341 | 931 | |
OTTI | [1] | (7) | (5) |
Fair value | 81,160 | 76,363 | |
ABS [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 882 | 1,016 | |
Gross unrealized gains | 51 | 39 | |
Gross unrealized losses | 6 | 13 | |
OTTI | [1] | (26) | (12) |
Fair value | 953 | 1,054 | |
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 497 | 345 | |
Gross unrealized gains | 37 | 34 | |
Gross unrealized losses | 1 | 2 | |
Fair value | 533 | 377 | |
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 391 | 445 | |
Gross unrealized gains | 55 | 57 | |
Gross unrealized losses | 1 | ||
Fair value | 446 | 501 | |
RMBS [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 3,125 | 3,316 | |
Gross unrealized gains | 148 | 141 | |
Gross unrealized losses | 36 | 65 | |
OTTI | [1] | (21) | (5) |
Fair value | 3,258 | 3,397 | |
CMBS [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 589 | 341 | |
Gross unrealized gains | 10 | 8 | |
Gross unrealized losses | 2 | 4 | |
OTTI | [1] | (2) | (1) |
Fair value | 599 | 346 | |
CLOs [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 803 | 742 | |
Gross unrealized gains | 2 | 1 | |
Gross unrealized losses | 2 | 3 | |
OTTI | [1] | (5) | (4) |
Fair value | 808 | 744 | |
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 4,033 | 3,811 | |
Gross unrealized gains | 932 | 703 | |
Gross unrealized losses | 6 | 19 | |
Fair value | 4,959 | 4,495 | |
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 561 | 568 | |
Gross unrealized gains | 85 | 68 | |
Gross unrealized losses | 22 | 47 | |
Fair value | $ 624 | 589 | |
VIEs' Fixed Maturity Securities [Member] | Fixed Maturity Securities [Member] | |||
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities | |||
Amortized cost | 200 | ||
Fair value | $ 200 | ||
[1] | Includes unrealized (gains) and losses on impaired securities related to changes in the fair value of such securities subsequent to the impairment measurement date. |
Investments (Available-For-Sale
Investments (Available-For-Sale Securities By Contractual Maturities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Available-for-sale Securities, Debt Maturities, Amortized Cost | ||
Amortized cost | $ 86,049 | $ 83,750 |
Available-for-sale Securities, Debt Maturities, Fair Value | ||
Fair Value | 93,586 | 88,341 |
Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost | ||
Amortized cost | 85,802 | 83,490 |
Available-for-sale Securities, Debt Maturities, Fair Value | ||
Fair Value | 93,340 | $ 88,066 |
Fixed maturity AFS securities other than structured securities [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost | ||
Due in one year or less | 3,268 | |
Due after one year through five years | 17,472 | |
Due after five years through ten years | 17,059 | |
Due after ten years | 42,604 | |
Amortized cost | 80,403 | |
Available-for-sale Securities, Debt Maturities, Fair Value | ||
Due in one year or less | 3,305 | |
Due after one year through five years | 18,099 | |
Due after five years through ten years | 17,708 | |
Due after ten years | 48,610 | |
Fair Value | 87,722 | |
Structured securities [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost | ||
Amortized cost | 5,399 | |
Available-for-sale Securities, Debt Maturities, Fair Value | ||
Fair Value | $ 5,618 |
Investments (Fair Value And Gro
Investments (Fair Value And Gross Unrealized Losses In A Continuous Unrealized Loss Position) (Details) $ in Millions | Dec. 31, 2017USD ($)security | Dec. 31, 2016USD ($)security |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | $ 5,684 | $ 16,956 |
Greater Than Twelve Months | 5,820 | 4,048 |
Fair Value - Total | 11,504 | 21,004 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 87 | 623 |
Greater Than Twelve Months | 358 | 491 |
Losses - Total | $ 445 | $ 1,114 |
Total number of AFS securities in an unrealized loss position | security | 1,095 | 1,692 |
Equity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | $ 22 | $ 4 |
Greater Than Twelve Months | 8 | 44 |
Fair Value - Total | 30 | 48 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 14 | 2 |
Greater Than Twelve Months | 3 | 2 |
Losses - Total | 17 | 4 |
Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 5,662 | 16,952 |
Greater Than Twelve Months | 5,812 | 4,004 |
Fair Value - Total | 11,474 | 20,956 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 73 | 621 |
Greater Than Twelve Months | 355 | 489 |
Losses - Total | 428 | 1,110 |
Corporate Bonds [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 4,726 | 15,099 |
Greater Than Twelve Months | 4,706 | 3,117 |
Fair Value - Total | 9,432 | 18,216 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 67 | 542 |
Greater Than Twelve Months | 276 | 390 |
Losses - Total | 343 | 932 |
ABS [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 56 | 201 |
Greater Than Twelve Months | 143 | 281 |
Fair Value - Total | 199 | 482 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 5 | |
Greater Than Twelve Months | 15 | 23 |
Losses - Total | 15 | 28 |
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 156 | 18 |
Greater Than Twelve Months | 19 | |
Fair Value - Total | 175 | 18 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 2 | |
Greater Than Twelve Months | 1 | |
Losses - Total | 1 | 2 |
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 29 | |
Fair Value - Total | 29 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 1 | |
Losses - Total | 1 | |
RMBS [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 277 | 876 |
Greater Than Twelve Months | 599 | 374 |
Fair Value - Total | 876 | 1,250 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 4 | 50 |
Greater Than Twelve Months | 33 | 22 |
Losses - Total | 37 | 72 |
CMBS [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 113 | 187 |
Greater Than Twelve Months | 60 | 18 |
Fair Value - Total | 173 | 205 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 4 | |
Greater Than Twelve Months | 3 | 2 |
Losses - Total | 3 | 6 |
CLOs [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 281 | 259 |
Greater Than Twelve Months | 72 | 25 |
Fair Value - Total | 353 | 284 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 2 | 3 |
Losses - Total | 2 | 3 |
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 33 | 208 |
Greater Than Twelve Months | 89 | 47 |
Fair Value - Total | 122 | 255 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 11 | |
Greater Than Twelve Months | 5 | 8 |
Losses - Total | 5 | 19 |
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | ||
Less Than or Equal to Twelve Months | 20 | 75 |
Greater Than Twelve Months | 124 | 142 |
Fair Value - Total | 144 | 217 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI | ||
Less Than or Equal to Twelve Months | 3 | |
Greater Than Twelve Months | 22 | 44 |
Losses - Total | $ 22 | $ 47 |
Investments (Schedule Of Availa
Investments (Schedule Of Available-For-Sale Securities Whose Value Is Below Amortized Cost) (Details) $ in Millions | Dec. 31, 2017USD ($)security | Dec. 31, 2016USD ($)security | |
Schedule of Available-for-sale Securities [Line Items] | |||
Fair Value - Nine months or greater, but less than twelve months | $ 5,684 | $ 16,956 | |
Fair Value - Twelve months or greater | 5,820 | 4,048 | |
Fair Value - Total | 11,504 | 21,004 | |
Losses - Nine months or greater, but less than twelve months | 87 | 623 | |
Losses - Twelve months or greater | 358 | 491 | |
Losses - Total | $ 445 | $ 1,114 | |
Number of Securities - Total | security | 1,095 | 1,692 | |
Fair Value Decline, Greater Than 20% [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Fair Value - Less than six months | $ 156 | $ 164 | |
Fair Value - Six months or greater, but less than nine months | 2 | ||
Fair Value - Nine months or greater, but less than twelve months | 12 | 1 | |
Fair Value - Twelve months or greater | 209 | 358 | |
Fair Value - Total | 379 | 523 | |
Losses - Less than six months | 57 | 49 | |
Losses - Six months or greater, but less than nine months | 1 | ||
Losses - Nine months or greater, but less than twelve months | 6 | 1 | |
Losses - Twelve months or greater | 77 | 166 | |
Losses - Total | 141 | 216 | |
OTTI - Less than six months | 1 | 2 | |
OTTI - Twelve months or greater | 10 | 10 | |
OTTI - Total | $ 11 | $ 12 | |
Number of Securities - Less than six months | security | [1] | 26 | 19 |
Number of Securities - Six months or greater, but less than nine months | security | [1] | 4 | |
Number of Securities - Nine months or greater, but less than twelve months | security | [1] | 7 | 2 |
Number of Securities - Twelve months or greater | security | [1] | 49 | 62 |
Number of Securities - Total | security | [1] | 86 | 83 |
[1] | We may reflect a security in more than one aging category based on various purchase dates. |
Investments (Schedule Of Change
Investments (Schedule Of Changes in Amount Of Credit Losses Of OTTI Recognized In Net Income (Loss)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments [Abstract] | |||
Balance as of beginning-of-year | $ 411 | $ 363 | $ 360 |
Increases attributable to: | |||
Credit losses on securities for which an OTTI was not previously recognized | 13 | 83 | 19 |
Credit losses on securities for which an OTTI was previously recognized | 7 | 16 | 15 |
Decreases attributable to: | |||
Securities sold, paid down or matured | (73) | (51) | (31) |
Balance as of end-of-year | $ 358 | $ 411 | $ 363 |
Investments (Schedule Of Detail
Investments (Schedule Of Details Of The Amount Of Credit Losses Of OTTI Recognized In Net Income (Loss)) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||
Amortized Cost | $ 459 | $ 633 | ||
Net Unrealized Gain/(Loss) Position | 61 | 27 | ||
Fair Value | 520 | 660 | ||
OTTI in Credit Losses | 358 | 411 | $ 363 | $ 360 |
Corporate Bonds [Member] | ||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||
Amortized Cost | 17 | 80 | ||
Net Unrealized Gain/(Loss) Position | 7 | 5 | ||
Fair Value | 24 | 85 | ||
OTTI in Credit Losses | 31 | 77 | ||
ABS [Member] | ||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||
Amortized Cost | 173 | 201 | ||
Net Unrealized Gain/(Loss) Position | 26 | 12 | ||
Fair Value | 199 | 213 | ||
OTTI in Credit Losses | 102 | 106 | ||
RMBS [Member] | ||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||
Amortized Cost | 245 | 310 | ||
Net Unrealized Gain/(Loss) Position | 21 | 6 | ||
Fair Value | 266 | 316 | ||
OTTI in Credit Losses | 178 | 183 | ||
CMBS [Member] | ||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||
Amortized Cost | 13 | 29 | ||
Net Unrealized Gain/(Loss) Position | 2 | 1 | ||
Fair Value | 15 | 30 | ||
OTTI in Credit Losses | 39 | 37 | ||
CLOs [Member] | ||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||
Amortized Cost | 11 | 11 | ||
Net Unrealized Gain/(Loss) Position | 5 | 3 | ||
Fair Value | 16 | 14 | ||
OTTI in Credit Losses | 5 | 5 | ||
State And Municipal Bonds [Member] | ||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||
Amortized Cost | 2 | |||
Fair Value | 2 | |||
OTTI in Credit Losses | $ 3 | $ 3 |
Investments (Fair Value of Trad
Investments (Fair Value of Trading Securities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | $ 1,533 | $ 1,624 |
Corporate Bonds [Member] | Fixed Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 1,250 | 1,275 |
ABS [Member] | Fixed Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 15 | 19 |
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 115 | 164 |
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 23 | 23 |
RMBS [Member] | Fixed Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 85 | 95 |
CMBS [Member] | Fixed Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 2 | 2 |
CLOs [Member] | Fixed Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 3 | 6 |
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | 17 | 17 |
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities | $ 23 | $ 23 |
Investments (Composition Of Cur
Investments (Composition Of Current And Past Due Mortgage Loans On Real Estate) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Mortgage Loans On Real Estate Aging [Abstract] | ||||
Current | $ 10,662 | $ 9,762 | ||
Greater than 90 days past due | 3 | |||
Valuation allowance associated with impaired mortgage loans on real estate | (3) | (2) | $ (2) | $ (3) |
Unamortized premium (discount) | 1 | |||
Total carrying value | $ 10,662 | $ 9,761 |
Investments (Schedule Of Impair
Investments (Schedule Of Impaired Mortgage Loans) (Details) $ in Millions | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Information about impaired mortgage loans on real estate | ||||
Number of impaired mortgage loans on real estate | item | 3 | 2 | ||
Principal balance of impaired mortgage loans on real estate | $ 11 | $ 7 | ||
Valuation allowance associated with impaired mortgage loans on real estate | (3) | (2) | $ (2) | $ (3) |
Carrying value of impaired mortgage loans on real estate | $ 8 | $ 5 |
Investments (Changes In The Val
Investments (Changes In The Valuation Allowance Of Impaired Mortgage Loans On Real Estate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Losses | |||
Balance as of beginning-of-year | $ 2 | $ 2 | $ 3 |
Additions | 1 | ||
Charge-offs, net of recoveries | (1) | ||
Balance as of end-of-year | $ 3 | $ 2 | $ 2 |
Investments (Schedule Of Averag
Investments (Schedule Of Average Carrying Value Of Impaired Mortgage Loans On Real Estate) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Information about impaired mortgage loans on real estate | |||
Average carrying value for impaired mortgage loans on real estate | $ 6 | $ 6 | $ 17 |
Interest income recognized on impaired mortgage loans on real estate | 1 | ||
Interest income collected on impaired mortgage loans on real estate | $ 1 |
Investments (Credit Quality Ind
Investments (Credit Quality Indicators For Mortgage Loans) (Details) $ in Millions | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Mortgage Loans Credit Quality [Line Items] | ||
Carrying value of mortgage loans on real estate | $ 10,662 | $ 9,761 |
Percentage of total mortgage loans on real estate | 100.00% | 100.00% |
Loan-to-value ratio, less than 65% [Member] | ||
Mortgage Loans Credit Quality [Line Items] | ||
Carrying value of mortgage loans on real estate | $ 9,563 | $ 8,604 |
Percentage of total mortgage loans on real estate | 89.70% | 88.10% |
Debt-service coverage ratio | 2.27 | 2.16 |
Loan-to-value ratio, 65% to 74% [Member] | ||
Mortgage Loans Credit Quality [Line Items] | ||
Carrying value of mortgage loans on real estate | $ 1,000 | $ 1,009 |
Percentage of total mortgage loans on real estate | 9.40% | 10.30% |
Debt-service coverage ratio | 1.94 | 1.87 |
Loan-to-value ratio, 75% to 100% [Member] | ||
Mortgage Loans Credit Quality [Line Items] | ||
Carrying value of mortgage loans on real estate | $ 91 | $ 143 |
Percentage of total mortgage loans on real estate | 0.80% | 1.50% |
Debt-service coverage ratio | 0.97 | 0.86 |
Loan-To-Value Ratio, Greater Than 100% [Member] | ||
Mortgage Loans Credit Quality [Line Items] | ||
Carrying value of mortgage loans on real estate | $ 8 | $ 5 |
Percentage of total mortgage loans on real estate | 0.10% | 0.10% |
Debt-service coverage ratio | 0.82 | 1.04 |
Investments (Net Investment Inc
Investments (Net Investment Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | $ 5,041 | $ 4,888 | $ 4,828 |
Investment expense | (281) | (257) | (217) |
Net investment income | 4,760 | 4,631 | 4,611 |
Fixed Maturity Securities [Member] | AFS Securities [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 4,048 | 4,019 | 3,981 |
Equity Securities [Member] | AFS Securities [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 12 | 11 | 9 |
Trading securities | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 88 | 94 | 102 |
Mortgage Loans On Real Estate [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 433 | 413 | 385 |
Real estate [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 1 | 1 | 1 |
Policy loans [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 134 | 139 | 150 |
Invested Cash [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 11 | 12 | 3 |
Commercial Mortgage Loan Prepayment And Bond Make Whole Premiums [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 138 | 115 | 98 |
Alternative investments [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 165 | 75 | 88 |
Consent fees [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | 6 | 5 | 5 |
Other Investments [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income | $ 5 | $ 4 | $ 6 |
Investments (Realized Gain (Los
Investments (Realized Gain (Loss) Related To Certain Investments) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Realized gain (loss) related to certain investments | ||||
Gain (loss) on other investments | $ (10) | $ (62) | $ (7) | |
Associated amortization of DAC, VOBA, DSI and DFEL and changes in other contract holder funds | (21) | (24) | (26) | |
Total realized gain (loss) related to certain investments, pre-tax | [1] | (71) | (241) | (83) |
Fixed Maturity Securities [Member] | ||||
Realized gain (loss) related to certain investments | ||||
AFS securities. Gross gains | [2] | 17 | 65 | 41 |
AFS securities. Gross losses | [2] | (63) | (227) | (94) |
Equity Securities [Member] | ||||
Realized gain (loss) related to certain investments | ||||
AFS securities. Gross gains | $ 6 | 8 | $ 3 | |
AFS securities. Gross losses | $ (1) | |||
[1] | See "Realized Gain (Loss) Related to Certain Investments" section in Note 5. | |||
[2] | These amounts are represented net of related fair value hedging activity. See Note 6 for more information. |
Investments (OTTI Recognized In
Investments (OTTI Recognized In Net Income (Loss) And OCI) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OTTI Recognized in Net Income (Loss) | |||
Gross OTTI recognized in net income (loss) | $ (20) | $ (100) | $ (56) |
Associated amortization of DAC, VOBA, DSI and DFEL | 2 | 6 | |
Net OTTI recognized in net income (loss), pre-tax | (18) | (100) | (50) |
Portion of OTTI Recognized in OCI | |||
Gross OTTI recognized in OCI | (53) | (29) | |
Change in DAC, VOBA, DSI and DFEL | (12) | (4) | |
Net portion of OTTI recognized in OCI, pre-tax | (41) | (25) | |
Equity Securities [Member] | |||
OTTI Recognized in Net Income (Loss) | |||
Gross OTTI recognized in net income (loss) | (1) | ||
Fixed Maturity Securities [Member] | |||
OTTI Recognized in Net Income (Loss) | |||
Gross OTTI recognized in net income (loss) | (20) | (99) | (56) |
Fixed Maturity Securities [Member] | Corporate Bonds [Member] | |||
OTTI Recognized in Net Income (Loss) | |||
Gross OTTI recognized in net income (loss) | (13) | (80) | (42) |
Fixed Maturity Securities [Member] | ABS [Member] | |||
OTTI Recognized in Net Income (Loss) | |||
Gross OTTI recognized in net income (loss) | (2) | (5) | (6) |
Fixed Maturity Securities [Member] | RMBS [Member] | |||
OTTI Recognized in Net Income (Loss) | |||
Gross OTTI recognized in net income (loss) | (2) | (10) | (7) |
Fixed Maturity Securities [Member] | CMBS [Member] | |||
OTTI Recognized in Net Income (Loss) | |||
Gross OTTI recognized in net income (loss) | (2) | (1) | $ (1) |
Fixed Maturity Securities [Member] | State And Municipal Bonds [Member] | |||
OTTI Recognized in Net Income (Loss) | |||
Gross OTTI recognized in net income (loss) | $ (1) | $ (3) |
Investments (Payables For Colla
Investments (Payables For Collateral On Investments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Carrying Value Of Payables For Collateral On Investments [Abstract] | |||
Collateral payable for derivative investments | [1] | $ 701 | $ 813 |
Securities pledged under securities lending agreements | [2] | 222 | 217 |
Securities pledged under repurchase agreements | [3] | 531 | 530 |
Investments pledged for Federal Home Loan Bank of Indianapolis ('FHLBI') | [4] | 2,900 | 3,350 |
Total payables for collateral on investments | 4,354 | 4,910 | |
Fair Value Of Related Investments Or Collateral [Abstract] | |||
Collateral payable for derivative investments | [1] | 701 | 813 |
Securities pledged under securities lending agreements | [2] | 213 | 209 |
Securities pledged under repurchase agreements | [3] | 554 | 555 |
Investments pledged for Federal Home Loan Bank of Indianapolis('FHLBI') | [4] | 4,235 | 4,947 |
Total payables for collateral on investments | $ 5,703 | $ 6,524 | |
Percentage of the fair value of domestic securities obtained as collateral under securities lending agreements. | 102.00% | ||
Percentage of the fair value of foreign securities obtained as collateral under securities lending agreements. | 105.00% | ||
Percentage of the fair value of securities obtained as collateral under reverse repurchase agreements. | 95.00% | ||
Maximum [Member] | |||
Fair Value Of Related Investments Or Collateral [Abstract] | |||
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI for AFS Securities | 115.00% | ||
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI for mortgage loan | 175.00% | ||
Minimum [Member] | |||
Fair Value Of Related Investments Or Collateral [Abstract] | |||
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI for AFS Securities | 105.00% | ||
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI for mortgage loan | 155.00% | ||
[1] | We obtain collateral based upon contractual provisions with our counterparties. These agreements take into consideration the counterparties' credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that if exceeded result in the receipt of cash that is typically invested in cash and invested cash. See Note 6 for additional information. | ||
[2] | Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. We value collateral daily and obtain additional collateral when deemed appropriate. The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities. | ||
[3] | Our pledged securities under repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We obtain collateral in an amount equal to 95% of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary. The cash received in our repurchase program is typically invested in fixed maturity AFS securities. | ||
[4] | Our pledged investments for FHLBI are included in fixed maturity AFS securities and mortgage loans on real estate on our Consolidated Balance Sheets. The collateral requirements are generally 105% to 115% of the fair value for fixed maturity AFS securities and 155% to 175% of the fair value for mortgage loans on real estate. The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities. |
Investments (Schedule Of Increa
Investments (Schedule Of Increase (Decrease) In Payables For Collateral On Investments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Increase (decrease) in payables for collateral on investments | |||
Collateral payable for derivative investments | $ (112) | $ (481) | $ (283) |
Securities pledged under securities lending agreements | 5 | (25) | 38 |
Securities pledged under repurchase agreements | 1 | (144) | 69 |
Investments pledged for FHLBI | (450) | 995 | 430 |
Total increase (decrease) in payables for collateral on investments | $ (556) | $ 345 | $ 254 |
Investments (Schedule of Securi
Investments (Schedule of Securities Pledged by Contractual Maturity) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Repurchase Agreements | $ 531 | $ 530 | |
Securities Lending | [1] | 222 | 217 |
Total gross secured borrowings | 753 | 747 | |
Corporate Bonds [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Repurchase Agreements | 531 | 530 | |
Securities Lending | 222 | 212 | |
Foreign Government Bonds [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Lending | 5 | ||
Overnight and Continuous [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Lending | 222 | 217 | |
Total gross secured borrowings | 222 | 217 | |
Overnight and Continuous [Member] | Corporate Bonds [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Lending | 222 | 212 | |
Overnight and Continuous [Member] | Foreign Government Bonds [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Lending | 5 | ||
Up to 30 days [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Repurchase Agreements | 100 | ||
Total gross secured borrowings | 100 | ||
Up to 30 days [Member] | Corporate Bonds [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Repurchase Agreements | 100 | ||
30 to 90 Days [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Repurchase Agreements | 281 | 384 | |
Total gross secured borrowings | 281 | 384 | |
30 to 90 Days [Member] | Corporate Bonds [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Repurchase Agreements | 281 | 384 | |
Greater than 90 days [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Repurchase Agreements | 150 | 146 | |
Total gross secured borrowings | 150 | 146 | |
Greater than 90 days [Member] | Corporate Bonds [Member] | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Repurchase Agreements | $ 150 | $ 146 | |
[1] | Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. We value collateral daily and obtain additional collateral when deemed appropriate. The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities. |
Derivative Instruments (Narrati
Derivative Instruments (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ 28,000,000 | |
Cash flow hedge, reclassified to earnings, net | 0 | $ 0 |
Exposure Associated With Collateralization Events | 0 | $ 5,000,000 |
Maximum [Member] | ||
Non-performance Risk Adjustment | $ 1,000,000 |
Derivative Instruments (Outstan
Derivative Instruments (Outstanding Derivative Instruments With Off-Balance-Sheet Risks) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | $ 107,840 | $ 102,415 | |
Asset Fair Value | 2,308 | 2,177 | |
Liability Fair Value | 3,376 | 3,096 | |
Interest rate contracts [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | [1] | 75,044 | |
Foreign currency contracts [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | [2] | 1,826 | |
Equity market contracts [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | 30,918 | ||
Credit contracts [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | 52 | ||
Credit contracts [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | [3] | 52 | 66 |
GLB Direct Embedded Derivatives [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Asset Fair Value | [3],[4] | 903 | |
Liability Fair Value | [3],[4] | 371 | |
GLB Ceded Embedded Derivatives [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Asset Fair Value | [3],[4] | 51 | 371 |
Liability Fair Value | [3],[4] | 954 | |
Indexed Annuity And IUL Contracts [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Asset Fair Value | [3],[5] | 11 | |
Liability Fair Value | [3],[5] | 1,418 | 1,139 |
Cash Flow Hedges [Member] | Designated as Hedging Instrument [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | 3,348 | 3,266 | |
Asset Fair Value | 124 | 221 | |
Liability Fair Value | 95 | 87 | |
Derivative investments [Member] | Interest rate contracts [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | [6] | 72,937 | 70,290 |
Asset Fair Value | [6] | 657 | 985 |
Liability Fair Value | [6] | 127 | 701 |
Derivative investments [Member] | Foreign currency contracts [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | [6] | 22 | 14 |
Derivative investments [Member] | Equity market contracts [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | [6] | 30,918 | 28,142 |
Asset Fair Value | [6] | 562 | 542 |
Liability Fair Value | [6] | 557 | 616 |
Derivative investments [Member] | Embedded derivatives - Reinsurance related [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Asset Fair Value | [7] | 58 | |
Liability Fair Value | [7] | 51 | |
Derivative investments [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member] | Designated as Hedging Instrument [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | [6] | 1,544 | 2,089 |
Asset Fair Value | [6] | 45 | 68 |
Liability Fair Value | [6] | 16 | 77 |
Derivative investments [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member] | Designated as Hedging Instrument [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | [6] | 1,804 | 1,177 |
Asset Fair Value | [6] | 79 | 153 |
Liability Fair Value | [6] | 79 | 10 |
Derivative investments [Member] | Fair Value Hedges [Member] | Interest rate contracts [Member] | Designated as Hedging Instrument [Member] | |||
Outstanding derivative instruments with off-balance-sheet risks | |||
Notional Amounts | [6] | 563 | 637 |
Liability Fair Value | [6] | $ 174 | $ 182 |
[1] | As of December 31, 2017, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was February 2047. | ||
[2] | As of December 31, 2017, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049. | ||
[3] | Reported in other assets on our Consolidated Balance Sheets. | ||
[4] | Reported in other liabilities on our Consolidated Balance Sheets. | ||
[5] | Reported in future contract benefits on our Consolidated Balance Sheets. | ||
[6] | Reported in derivative investments and other liabilities on our Consolidated Balance Sheets. | ||
[7] | Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets. |
Derivative Instruments (Maturit
Derivative Instruments (Maturity Of The Notional Amounts Of Derivative Financial Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Maturity of the notional amounts of derivative financial instruments | |||
Remaining Life Less Than 1 Year | $ 26,516 | ||
Remaining Life - 1 - 5 Years | 30,772 | ||
Remaining Life - 6 - 10 Years | 32,286 | ||
Remaining Life - 11 - 30 Years | 16,070 | ||
Remaining Life Over - 30 Years | 2,196 | ||
Remaining Life - Total Years | 107,840 | $ 102,415 | |
Interest rate contracts [Member] | |||
Maturity of the notional amounts of derivative financial instruments | |||
Remaining Life Less Than 1 Year | [1] | 7,748 | |
Remaining Life - 1 - 5 Years | [1] | 20,953 | |
Remaining Life - 6 - 10 Years | [1] | 31,378 | |
Remaining Life - 11 - 30 Years | [1] | 14,965 | |
Remaining Life - Total Years | [1] | $ 75,044 | |
Derivative maturity date | Feb. 28, 2047 | ||
Foreign currency contracts [Member] | |||
Maturity of the notional amounts of derivative financial instruments | |||
Remaining Life Less Than 1 Year | [2] | $ 22 | |
Remaining Life - 1 - 5 Years | [2] | 247 | |
Remaining Life - 6 - 10 Years | [2] | 423 | |
Remaining Life - 11 - 30 Years | [2] | 1,090 | |
Remaining Life Over - 30 Years | [2] | 44 | |
Remaining Life - Total Years | [2] | $ 1,826 | |
Derivative maturity date | Sep. 30, 2049 | ||
Equity market contracts [Member] | |||
Maturity of the notional amounts of derivative financial instruments | |||
Remaining Life Less Than 1 Year | $ 18,746 | ||
Remaining Life - 1 - 5 Years | 9,520 | ||
Remaining Life - 6 - 10 Years | 485 | ||
Remaining Life - 11 - 30 Years | 15 | ||
Remaining Life Over - 30 Years | 2,152 | ||
Remaining Life - Total Years | 30,918 | ||
Credit contracts [Member] | |||
Maturity of the notional amounts of derivative financial instruments | |||
Remaining Life - 1 - 5 Years | 52 | ||
Remaining Life - Total Years | $ 52 | ||
[1] | As of December 31, 2017, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was February 2047. | ||
[2] | As of December 31, 2017, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049. |
Derivative Instruments (Change
Derivative Instruments (Change In Our Unrealized Gain On Derivative Instruments In Accumulated OCI) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Change in our unrealized gain on derivative instruments in accumulated OCI | ||||
Balance as of beginning-of-year | $ 1,782 | |||
Income tax expense (benefit) | (1,287) | $ 267 | $ 295 | |
Balance as of end-of-year | 3,327 | 1,782 | ||
Unrealized Gain (Loss) on Derivative Instruments [Member] | ||||
Change in our unrealized gain on derivative instruments in accumulated OCI | ||||
Balance as of beginning-of-year | 93 | 157 | 127 | |
Change in foreign currency exchange rate adjustment | (137) | 96 | 48 | |
Change in DAC, VOBA, DSI and DFEL | 1 | 2 | 3 | |
Income tax benefit (expense) | 26 | 27 | 46 | |
Reclassification adjustment for gains (losses) included in net income (loss) | 31 | 24 | (184) | |
Associated amortization of DAC, VOBA, DSI and DFEL | (2) | (2) | 2 | |
Income tax expense (benefit) | (10) | (8) | 64 | |
Balance as of end-of-year | 27 | 93 | 157 | |
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member] | ||||
Change in our unrealized gain on derivative instruments in accumulated OCI | ||||
Unrealized holding gains (losses) arising during the period | 43 | (165) | (202) | |
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member] | Net Investment Income [Member] | ||||
Change in our unrealized gain on derivative instruments in accumulated OCI | ||||
Reclassification adjustment for gains (losses) included in net income (loss) | [1] | 4 | 5 | (190) |
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member] | Realized Gain (Loss) [Member] | ||||
Change in our unrealized gain on derivative instruments in accumulated OCI | ||||
Reclassification adjustment for gains (losses) included in net income (loss) | [2] | 1 | ||
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member] | ||||
Change in our unrealized gain on derivative instruments in accumulated OCI | ||||
Unrealized holding gains (losses) arising during the period | 20 | (10) | 17 | |
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member] | Net Investment Income [Member] | ||||
Change in our unrealized gain on derivative instruments in accumulated OCI | ||||
Reclassification adjustment for gains (losses) included in net income (loss) | [1] | 18 | 11 | $ 6 |
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member] | Realized Gain (Loss) [Member] | ||||
Change in our unrealized gain on derivative instruments in accumulated OCI | ||||
Reclassification adjustment for gains (losses) included in net income (loss) | [2] | $ 9 | $ 7 | |
[1] | The OCI offset is reported within net investment income on our Consolidated Statements of Comprehensive Income (Loss). | |||
[2] | The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
Derivative Instruments (Gains (
Derivative Instruments (Gains (Losses) On Derivative Instruments Recorded Within Income (Loss) From Continuing Operations) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Gains (losses) | ||||
Gains (losses) | $ (1,821) | $ (1,244) | $ 120 | |
Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | ||||
Gains (losses) | ||||
Gains (losses) | 31 | 24 | 14 | |
Designated as Hedging Instrument [Member] | Fair Value Hedges [Member] | ||||
Gains (losses) | ||||
Gains (losses) | (16) | (12) | (228) | |
Designated as Hedging Instrument [Member] | Net Investment Income [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [1] | 4 | 5 | 8 |
Designated as Hedging Instrument [Member] | Net Investment Income [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [1] | 18 | 11 | 6 |
Designated as Hedging Instrument [Member] | Net Investment Income [Member] | Fair Value Hedges [Member] | Interest rate contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [1] | (23) | (28) | (30) |
Designated as Hedging Instrument [Member] | Realized Gain (Loss) [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [2] | 1 | ||
Designated as Hedging Instrument [Member] | Realized Gain (Loss) [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [2] | 9 | 7 | |
Designated as Hedging Instrument [Member] | Realized Gain (Loss) [Member] | Fair Value Hedges [Member] | Interest rate contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [2] | 7 | 16 | (198) |
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Interest rate contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [2] | 103 | 181 | 304 |
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Foreign currency contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [2] | (14) | (11) | |
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Equity market contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [2] | (1,427) | (1,253) | (118) |
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Credit contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [2] | 1 | (5) | (6) |
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Embedded derivatives - Reinsurance related [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [2] | (141) | (57) | 221 |
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Indexed Annuity And IUL Contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [2] | (400) | (120) | (57) |
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Commissions And Other Expenses [Member] | Equity market contracts [Member] | ||||
Gains (losses) | ||||
Gains (losses) | [3] | $ 28 | $ 12 | $ 1 |
[1] | Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss). | |||
[2] | Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). | |||
[3] | Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss). |
Derivative Instruments (Gains87
Derivative Instruments (Gains (Losses) On Derivative Instruments Designated As Cash Flow Hedges) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Gains (losses) on derivative instruments designated and qualifying as cash flow hedges | |||
Offset to net investment income | $ 4,760 | $ 4,631 | $ 4,611 |
Offset to realized gain (loss) | (456) | (510) | (222) |
Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | Other Comprehensive Income (Loss) [Member] | |||
Gains (losses) on derivative instruments designated and qualifying as cash flow hedges | |||
Offset to net investment income | 22 | 16 | $ 14 |
Offset to realized gain (loss) | $ 9 | $ 8 |
Derivative Instruments (Open Cr
Derivative Instruments (Open Credit Default Swap Liabilities) (Details) - Open Credit Default Swap Liabilities [Member] $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | |
Summary Of Credit Derivatives | ||
Number of instruments | item | 1 | 2 |
Fair value | $ 1 | |
Maximum potential payout | $ 52 | $ 40 |
BBB+ [Member] | 12/20/2022 Maturity [Member] | ||
Summary Of Credit Derivatives | ||
Credit rating of underlying obligation | BBB+ | |
Number of instruments | item | 1 | |
Fair value | $ 1 | |
Maximum potential payout | $ 52 | |
BBB+ [Member] | 3/20/2017 Maturity [Member] | ||
Summary Of Credit Derivatives | ||
Credit rating of underlying obligation | BBB+ | |
Number of instruments | item | 2 | |
Maximum potential payout | $ 40 |
Derivative Instruments (Collate
Derivative Instruments (Collateral Support Agreements) (Details) - Open Credit Default Swap Liabilities [Member] - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Credit risk related contingent features collateral | ||
Maximum potential payout | $ 52 | $ 40 |
Less: Counterparty thresholds | ||
Maximum collateral potentially required to post | $ 52 | $ 40 |
Derivative Instruments (Schedul
Derivative Instruments (Schedule Of Collateral Amounts With Rights To Reclaim Or Obligation To Return Cash) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Credit Derivatives [Line Items] | ||
Collateral Posted by Counter-Party (Held by LNL) | $ 701 | $ 813 |
Collateral Posted by LNL (Held by Counter-Party) | (506) | (584) |
AA- [Member] | ||
Credit Derivatives [Line Items] | ||
Collateral Posted by Counter-Party (Held by LNL) | 116 | 53 |
Collateral Posted by LNL (Held by Counter-Party) | (1) | (32) |
A+ [Member] | ||
Credit Derivatives [Line Items] | ||
Collateral Posted by Counter-Party (Held by LNL) | 178 | 10 |
Collateral Posted by LNL (Held by Counter-Party) | (453) | (217) |
A [Member] | ||
Credit Derivatives [Line Items] | ||
Collateral Posted by Counter-Party (Held by LNL) | 170 | 394 |
Collateral Posted by LNL (Held by Counter-Party) | (48) | (335) |
A- [Member] | ||
Credit Derivatives [Line Items] | ||
Collateral Posted by Counter-Party (Held by LNL) | 237 | 67 |
Collateral Posted by LNL (Held by Counter-Party) | ||
BBB+ [Member] | ||
Credit Derivatives [Line Items] | ||
Collateral Posted by Counter-Party (Held by LNL) | 289 | |
Collateral Posted by LNL (Held by Counter-Party) | $ (4) |
Derivative Instruments (Sched91
Derivative Instruments (Schedule Of Offsetting Assets And Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Financial Assets | ||
Derivative Instruments, Gross amount of recognized assets | $ 1,082 | $ 1,211 |
Derivative Instruments, Gross amounts offset | (237) | (311) |
Derivative Instruments, Net amount of assets | 845 | 900 |
Derivative Instruments, Cash collateral | (701) | (813) |
Derivative Instruments, Net amount | 144 | 87 |
Embedded Derivative Instruments, Gross amount of recognized assets | 965 | 429 |
Embedded Derivative Instruments, Gross amounts offset | ||
Embedded Derivative Instruments, Net amount of assets | 965 | 429 |
Embedded Derivative Instruments, Cash collateral | ||
Embedded Derivative Instruments, Net amount | 965 | 429 |
Total, Gross amount of recognized assets | 2,047 | 1,640 |
Total, Gross amounts offset | (237) | (311) |
Total, Net amount of assets | 1,810 | 1,329 |
Total, Cash collateral | (701) | (813) |
Total, Net amount | 1,109 | 516 |
Financial Liabilities | ||
Derivative Instruments, Gross amount of recognized liabilities | 1,037 | 1,274 |
Derivative Instruments, Gross amounts offset | (261) | (536) |
Derivative Instruments, Net amount of liabilities | 776 | 738 |
Derivative Instruments, Cash collateral | (506) | (584) |
Derivative Instruments, Net amount | 270 | 154 |
Embedded Derivative Instruments, Gross amount of recognized liabilities | 2,423 | 1,510 |
Embedded Derivative Instruments, Gross amounts offset | ||
Embedded Derivative Instruments, Net amount of liabilities | 2,423 | 1,510 |
Embedded Derivative Instruments, Cash collateral | ||
Embedded Derivative Instruments, Net amount | 2,423 | 1,510 |
Total, Gross amount of recognized liabilities | 3,460 | 2,784 |
Total, Gross amounts offset | (261) | (536) |
Total, Net amount of liabilities | 3,199 | 2,248 |
Total, Cash collateral | (506) | (584) |
Total, Net amount | $ 2,693 | $ 1,664 |
Federal Income Taxes (Narrative
Federal Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||||
Effective tax rate | (176.00%) | 19.00% | 20.00% | |
Federal rate | 35.00% | |||
Dividends-received deduction | $ 264,000,000 | $ 175,000,000 | $ 188,000,000 | |
Deferred tax impact from the Tax Cut and Jobs Act | 1,526,000,000 | |||
Tax credit carryforward, valuation allowance | 0 | |||
Unrecognized tax benefits, that, if recognized, would impact income tax expense and effective tax rate | 11,000,000 | 1,000,000 | ||
Recognized interest and penalty expense related to uncertain tax positions | 0 | (2,000,000) | $ 1,000,000 | |
Accrued interest and penalty expense related to unrecognized tax benefits | 0 | $ 0 | ||
Scenario, Plan [Member] | ||||
Income Tax [Line Items] | ||||
Federal rate | 21.00% | |||
Alternative Minimum [Member] | ||||
Income Tax [Line Items] | ||||
Tax credit carryforward | 73,000,000 | |||
Research Tax Credit Carryforward [Member] | ||||
Income Tax [Line Items] | ||||
Tax credit carryforward | $ 3,000,000 |
Federal Income Taxes (Federal I
Federal Income Taxes (Federal Income Tax Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income tax expense (benefit), continuing operations [Abstract] | |||
Current | $ 118 | $ 25 | $ 71 |
Deferred | (1,405) | 242 | 224 |
Federal income tax expense (benefit) | $ (1,287) | $ 267 | $ 295 |
Federal Income Taxes (Reconcili
Federal Income Taxes (Reconciliation Of The Effective Tax Rate Differences) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of effective tax rate differences [Abstract] | |||
Tax rate times pre-tax income | $ 256 | $ 504 | $ 514 |
Effect of: | |||
Tax-preferred investment income | (280) | (196) | (192) |
Tax credits | (29) | (28) | (26) |
Change in uncertain tax positions | (17) | (11) | 1 |
Excess tax benefits from share-based compensation | (8) | (4) | |
Goodwill impairment | 316 | ||
Deferred tax impact from the Tax Cut and Jobs Act | (1,526) | ||
Other items | 1 | 2 | (2) |
Federal income tax expense (benefit) | $ (1,287) | $ 267 | $ 295 |
Effective tax rate | (176.00%) | 19.00% | 20.00% |
Federal Income Taxes (Federal95
Federal Income Taxes (Federal Income Tax Asset Liability) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Federal income tax asset (liability) [Abstract] | ||
Current | $ 206 | $ 164 |
Deferred | (2,391) | (3,062) |
Total federal income tax asset (liability) | $ (2,185) | $ (2,898) |
Federal Income Taxes (Significa
Federal Income Taxes (Significant Components Of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Tax Assets | ||
Future contract benefits and other contract holder funds | $ 580 | $ 986 |
Reinsurance related embedded derivative asset | 11 | |
Compensation and benefit plans | 123 | 187 |
Tax credits | 76 | 85 |
Other | 8 | 19 |
Total deferred tax assets | 798 | 1,277 |
Deferred Tax Liabilities | ||
DAC | 1,112 | 2,038 |
VOBA | 105 | 306 |
Net unrealized gain on AFS securities | 1,579 | 1,596 |
Net unrealized gain on trading securities | 39 | 65 |
Intangibles | 9 | 20 |
Investment activity | 118 | 125 |
Deferred gain on business sold through reinsurance | 35 | 51 |
Reinsurance related embedded derivative asset | 20 | |
Other | 192 | 118 |
Total deferred tax liabilities | 3,189 | 4,339 |
Net deferred tax asset (liability) | $ (2,391) | $ (3,062) |
Federal Income Taxes (Reconci97
Federal Income Taxes (Reconciliation Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of unrecognized tax benefits [Roll Forward] | ||
Balance as of beginning-of-year | $ 1 | $ 10 |
Increases for prior year tax positions | 9 | |
Increases for current year tax positions | 1 | 1 |
Decreases for expiring statutes | (10) | |
Balance as of end-of-year | $ 11 | $ 1 |
DAC, VOBA, DSI, and DFEL (DAC)
DAC, VOBA, DSI, and DFEL (DAC) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in DAC [Roll Forward] | |||
Balance as of beginning-of-year | $ 8,269 | $ 8,620 | $ 7,527 |
Business acquired (sold) through reinsurance | 38 | ||
Deferrals | 1,345 | 1,339 | 1,483 |
Amortization, net of interest: | |||
Amortization, excluding unlocking, net of interest | (922) | (879) | (813) |
Unlocking | 61 | (276) | (232) |
Adjustment related to realized (gains) losses | (55) | (51) | (44) |
Adjustment related to unrealized (gains) losses | (789) | (484) | 661 |
Balance as of end-of-year | $ 7,909 | $ 8,269 | $ 8,620 |
DAC, VOBA, DSI, and DFEL (VOBA)
DAC, VOBA, DSI, and DFEL (VOBA) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Changes in VOBA [Roll Forward] | ||||
Balance as of beginning-of-year | $ 874 | $ 873 | $ 628 | |
Business acquired (sold) through reinsurance | (22) | |||
Deferrals | 7 | 3 | 8 | |
Amortization: | ||||
Amortization, excluding unlocking | (105) | (105) | (128) | |
Unlocking | (48) | 36 | (82) | |
Accretion of interest | [1] | 52 | 52 | 56 |
Adjustment related to realized (gains) losses | (1) | (2) | (1) | |
Adjustment related to unrealized (gains) losses | (280) | 17 | 414 | |
Balance as of end-of-year | $ 499 | $ 874 | $ 873 | |
Interest accrual rate, low end | 4.20% | |||
Interest accrual rate, high end | 6.90% | |||
[1] | The interest accrual rates utilized to calculate the accretion of interest ranged from 4.2% to 6.9%. |
DAC, VOBA, DSI, and DFEL (Estim
DAC, VOBA, DSI, and DFEL (Estimated Future Amortization of VOBA) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Estimated future amortization of VOBA, net of interest [Abstract] | |
2,018 | $ 49 |
2,019 | 51 |
2,020 | 65 |
2,021 | 65 |
2,022 | $ 61 |
DAC, VOBA, DSI, and DFEL (DSI)
DAC, VOBA, DSI, and DFEL (DSI) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in DSI [Roll Forward] | |||
Balance as of beginning-of-year | $ 293 | $ 301 | $ 285 |
Deferrals | 29 | 25 | 29 |
Amortization, net of interest: | |||
Amortization, excluding unlocking, net of interest | (30) | (28) | (33) |
Unlocking | (4) | (2) | 2 |
Adjustment related to realized (gains) losses | (2) | (2) | (1) |
Adjustment related to unrealized (gains) losses | 1 | (1) | 19 |
Balance as of end-of-year | $ 287 | $ 293 | $ 301 |
DAC, VOBA, DSI, and DFEL (DFEL)
DAC, VOBA, DSI, and DFEL (DFEL) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in DFEL [Abstract] | |||
Balance as of beginning-of-year | $ 1,855 | $ 1,923 | $ 1,365 |
Deferrals | 753 | 628 | 537 |
Amortization, net of interest: | |||
Amortization, excluding unlocking, net of interest | (383) | (345) | (299) |
Unlocking | (3) | (63) | (66) |
Adjustment related to realized (gains) losses | (18) | (11) | (8) |
Adjustment related to unrealized (gains) losses | (775) | (277) | 394 |
Balance as of end-of-year | $ 1,429 | $ 1,855 | $ 1,923 |
Reinsurance (Narrative) (Detail
Reinsurance (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Ceded Credit Risk [Line Items] | |||
Maximum retention per single insured life on fixed and VUL insurance contracts | $ 20 | ||
Percent of mortality risk reinsured on newly issued non-term life insurance contracts | 25.00% | ||
Percent of total individual life in-force amount reinsured | 35.00% | 36.00% | |
Reserves associated with modified coinsurance reinsurance arrangements | $ 541 | $ 584 | |
Reinsurance recoverables | 6,515 | 6,810 | |
Liabilities for funds withheld | 4,348 | 4,827 | |
Swiss Re [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance receivable | 1,900 | 2,200 | |
Trust funded to support reinsurance receivable | 2,500 | ||
Liabilities for funds withheld | 269 | ||
Liabilities for reinsurance related embedded derivatives | 46 | ||
Amount of amortization, after-tax, of deferred gain on business sold to Swiss Re | 15 | 48 | $ 48 |
LNBAR [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance receivable | 2,100 | $ 2,100 | |
Trust funded to support reinsurance receivable | $ 1,900 |
Reinsurance (Reinsurance amount
Reinsurance (Reinsurance amounts recorded on the Consolidated Statement of Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reinsurance [Abstract] | |||
Direct insurance premiums and fee income | $ 10,103 | $ 9,373 | $ 9,354 |
Reinsurance assumed | 101 | 105 | 83 |
Reinsurance ceded | (1,817) | (1,728) | (1,652) |
Total insurance premiums and fee income | 8,387 | 7,750 | 7,785 |
Direct insurance benefits | 6,669 | 6,112 | 6,304 |
Reinsurance recoveries netted against benefits | (1,851) | (1,865) | (1,775) |
Benefits | $ 4,818 | $ 4,247 | $ 4,529 |
Goodwill and Specifically Id105
Goodwill and Specifically Identifiable Intangible Assets (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill and Specifically Identifiable Intangible Assets [Abstract] | |
Term for new business cash flows | 10 years |
Impairment of intangibles | $ 905 |
Goodwill and Specifically Id106
Goodwill and Specifically Identifiable Intangible Assets (Changes In Carrying Amount Of Goodwill, By Reportable Segment) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | |||
Goodwill Gross | $ 3,520 | $ 3,520 | |
Accumulated impairment as of beginning-of-year | (1,247) | (1,247) | |
Impairment | $ (905) | ||
Net goodwill as of end-of-year | 1,368 | 2,273 | |
Annuities Segment [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill Gross | 1,040 | 1,040 | |
Accumulated impairment as of beginning-of-year | (600) | (600) | |
Impairment | |||
Net goodwill as of end-of-year | 440 | 440 | |
Retirement Plan Services Segment [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill Gross | 20 | 20 | |
Impairment | |||
Net goodwill as of end-of-year | 20 | 20 | |
Life Insurance Segment [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill Gross | 2,186 | 2,186 | |
Accumulated impairment as of beginning-of-year | (647) | (647) | |
Impairment | (905) | ||
Net goodwill as of end-of-year | 634 | 1,539 | |
Group Protection Segment [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill Gross | 274 | $ 274 | |
Impairment | |||
Net goodwill as of end-of-year | $ 274 | $ 274 |
Goodwill and Specifically Id107
Goodwill and Specifically Identifiable Intangible Assets (Schedule Of Intangible Assets By Reportable Segment) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite And Indefinife Lived Intangible Assets Net [Abstract] | |||
Gross carrying amount | $ 105 | $ 105 | |
Accumulated amortization | 47 | 43 | |
Life Insurance Segment [Member] | Sales Force [Member] | |||
Finite And Indefinife Lived Intangible Assets Net [Abstract] | |||
Gross carrying amount | 100 | 100 | |
Accumulated amortization | 47 | 43 | |
Retirement Plan Services Segment [Member] | Mutual Fund Contract Rights [Member] | |||
Finite And Indefinife Lived Intangible Assets Net [Abstract] | |||
Gross carrying amount | [1] | $ 5 | $ 5 |
[1] | No amortization recorded as the intangible asset has indefinite life |
Goodwill and Specifically Id108
Goodwill and Specifically Identifiable Intangible Assets (Future estimated amortization of specifically identifiable intangible assets) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Goodwill and Specifically Identifiable Intangible Assets [Abstract] | |
2,018 | $ 4 |
2,019 | 4 |
2,020 | 4 |
2,021 | 4 |
2,022 | 4 |
Thereafter | $ 33 |
Guaranteed Benefit Features (Na
Guaranteed Benefit Features (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Guaranteed Benefit Features [Abstract] | |||
Percent of permanent life insurance in force | 32.00% | 36.00% | |
Percent of permanent life insurance sales | 27.00% | 33.00% | 33.00% |
Guaranteed Benefit Features (In
Guaranteed Benefit Features (Information On Guaranteed Death Benefit Features) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Return of Net Deposits [Member] | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Total Account Value | [1] | $ 96,941 | $ 87,707 |
Net Amount At Risk | [1],[2] | $ 81 | $ 824 |
Average attained age of contract holders | [1] | 64 years | 63 years |
Minimum Return [Member] | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Total Account Value | [1] | $ 108 | $ 105 |
Net Amount At Risk | [1],[2] | $ 18 | $ 22 |
Average attained age of contract holders | [1] | 76 years | 75 years |
Guaranteed minimum return | [1] | 5.00% | 5.00% |
Anniversary Contract Value [Member] | |||
Net Amount at Risk by Product and Guarantee [Line Items] | |||
Total Account Value | [1] | $ 26,596 | $ 24,605 |
Net Amount At Risk | [1],[2] | $ 417 | $ 782 |
Average attained age of contract holders | [1] | 70 years | 69 years |
[1] | Our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive. | ||
[2] | Represents the amount of death benefit in excess of the account balance that is subject to market fluctuations. |
Guaranteed Benefit Features (Su
Guaranteed Benefit Features (Summary Of Guaranteed Death Benefit Liabilities) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Guaranteed Benefit Features [Abstract] | |||
Balance as of beginning-of-year | $ 110 | $ 115 | $ 89 |
Changes in reserves | 8 | 34 | 52 |
Benefits paid | (18) | (39) | (26) |
Balance as of end-of-period | $ 100 | $ 110 | $ 115 |
Guaranteed Benefit Features (Ac
Guaranteed Benefit Features (Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts) (Details) - Variable Annuity [Member] - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts [Line Items] | ||
Total | $ 121,110 | $ 104,846 |
Percent of total variable annuity separate account values | 99.00% | 99.00% |
Domestic Equity [Member] | ||
Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts [Line Items] | ||
Total | $ 59,647 | $ 50,337 |
International Equity [Member] | ||
Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts [Line Items] | ||
Total | 20,837 | 16,714 |
Fixed Income [Member] | ||
Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts [Line Items] | ||
Total | $ 40,626 | $ 37,795 |
Short-Term and Long-Term Deb113
Short-Term and Long-Term Debt (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | ||||
Loss on early extinguishment of debt | $ 5,000,000 | |||
Surplus notes | 2,374,000,000 | $ 2,549,000,000 | ||
Debt repayments | 290,000,000 | 250,000,000 | $ 4,000,000 | |
Maximum borrowing capacity | 4,513,000,000 | |||
Five-year revolving credit facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 2,500,000,000 | |||
Borrowing capacity available to reimburse the banks for drawn LOCs | 1,750,000,000 | |||
Minimum consolidated net worth | $ 10,500,000,000 | |||
Percentage of aggregate net proceeds of equity issuances | 50.00% | |||
Debt to capital ratio (low end of range) | 0.35% | |||
Debt to capital ratio (high end of range) | 1.00% | |||
LOC facility due August 2031 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | [1] | $ 990,000,000 | ||
LOC facility due October 2031 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | [1] | 1,023,000,000 | ||
142 bps Surplus Note , Due 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | $ 240,000,000 | |||
Surplus notes | 240,000,000 | |||
Maturity date | Jun. 28, 2023 | |||
Debt repayments | $ 240,000,000 | |||
9.76% Surplus Note, Due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | 50,000,000 | |||
Surplus notes | $ 50,000,000 | 50,000,000 | ||
Maturity date | Sep. 30, 2024 | |||
Interest rate | 9.76% | |||
6.56% Surplus Note, Due 2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | $ 500,000,000 | |||
Surplus notes | $ 500,000,000 | 500,000,000 | ||
Maturity date | Mar. 31, 2028 | |||
Interest rate | 6.56% | |||
Capital surplus repayment threshold | $ 2,300,000,000 | |||
111 bps Surplus Note, Due 2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | 71,000,000 | |||
Surplus notes | $ 71,000,000 | 71,000,000 | ||
Maturity date | Sep. 24, 2028 | |||
226 bps Surplus Note, Due 2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | $ 287,000,000 | |||
Surplus notes | $ 573,000,000 | 533,000,000 | ||
Maturity date | Oct. 1, 2028 | |||
6.03% Surplus Note, Due 2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | $ 750,000,000 | |||
Surplus notes | $ 750,000,000 | 750,000,000 | ||
Maturity date | Dec. 31, 2028 | |||
Interest rate | 6.03% | |||
Capital surplus repayment threshold | $ 2,400,000,000 | |||
200 bps Surplus Note, Due 2035 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | 30,000,000 | |||
Surplus notes | $ 30,000,000 | 30,000,000 | ||
Maturity date | Sep. 28, 2035 | |||
100 bps Surplus Note, Due 2037 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | $ 375,000,000 | |||
Surplus notes | $ 325,000,000 | $ 375,000,000 | ||
Maturity date | Oct. 9, 2037 | |||
Debt repayments | $ 50,000,000 | |||
155 bps Surplus Note, Due 2037 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | 25,000,000 | |||
Surplus notes | $ 25,000,000 | |||
Maturity date | Jun. 30, 2037 | |||
4.20% Surplus Note, Due 2037 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal balance | $ 50,000,000 | |||
Surplus notes | $ 50,000,000 | |||
Maturity date | Jul. 1, 2037 | |||
Interest rate | 4.20% | |||
London Interbank Offered Rate (LIBOR) [Member] | 142 bps Surplus Note , Due 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Variable rate | 1.42% | |||
London Interbank Offered Rate (LIBOR) [Member] | 111 bps Surplus Note, Due 2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Variable rate | 1.11% | |||
London Interbank Offered Rate (LIBOR) [Member] | 226 bps Surplus Note, Due 2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Variable rate | 2.26% | |||
London Interbank Offered Rate (LIBOR) [Member] | 200 bps Surplus Note, Due 2035 [Member] | ||||
Debt Instrument [Line Items] | ||||
Variable rate | 2.00% | |||
London Interbank Offered Rate (LIBOR) [Member] | 100 bps Surplus Note, Due 2037 [Member] | ||||
Debt Instrument [Line Items] | ||||
Variable rate | 1.00% | |||
London Interbank Offered Rate (LIBOR) [Member] | 155 bps Surplus Note, Due 2037 [Member] | ||||
Debt Instrument [Line Items] | ||||
Variable rate | 1.55% | |||
[1] | Our wholly-owned subsidiaries entered into irrevocable LOC facility agreements with third-party lenders supporting inter-company reinsurance agreements |
Short-Term and Long-Term Deb114
Short-Term and Long-Term Debt (Schedule Of Debt) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Debt Instrument [Line Items] | |||
Short-term debt | [1] | $ 10 | $ 280 |
Surplus notes | 2,374 | 2,549 | |
Total long-term debt | $ 2,374 | 2,549 | |
142 bps Surplus Note , Due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | 240 | ||
142 bps Surplus Note , Due 2023 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.42% | ||
9.76% Surplus Note, Due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | $ 50 | 50 | |
Stated interest rate | 9.76% | ||
6.56% Surplus Note, Due 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | $ 500 | 500 | |
Stated interest rate | 6.56% | ||
111 bps Surplus Note, Due 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | $ 71 | 71 | |
111 bps Surplus Note, Due 2028 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.11% | ||
226 bps Surplus Note, Due 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | $ 573 | 533 | |
226 bps Surplus Note, Due 2028 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Variable rate | 2.26% | ||
6.03% Surplus Note, Due 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | $ 750 | 750 | |
Stated interest rate | 6.03% | ||
200 bps Surplus Note, Due 2035 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | $ 30 | 30 | |
200 bps Surplus Note, Due 2035 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Variable rate | 2.00% | ||
155 bps Surplus Note, Due 2037 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | $ 25 | ||
155 bps Surplus Note, Due 2037 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.55% | ||
4.20% Surplus Note, Due 2037 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | $ 50 | ||
Stated interest rate | 4.20% | ||
100 bps Surplus Note, Due 2037 [Member] | |||
Debt Instrument [Line Items] | |||
Surplus notes | $ 325 | $ 375 | |
100 bps Surplus Note, Due 2037 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.00% | ||
[1] | The short-term debt represents short-term notes payable to LNC. |
Short-Term and Long-Term Deb115
Short-Term and Long-Term Debt (Future Principal Payments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Future principal payments due on long-term debt [Abstract] | |
2,018 | |
2,019 | |
2,020 | |
2,021 | |
2,022 | |
Thereafter | 2,374 |
Total | $ 2,374 |
Short-Term and Long-Term Deb116
Short-Term and Long-Term Debt (Credit Facilities and Letters of Credit) (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($) | ||
Line of Credit Facility [Line Items] | ||
Credit Facilities | Total | |
Maximum Available | $ 4,513 | |
LOCs issued | $ 2,240 | |
Five-year revolving credit facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit Facilities | Five-year revolving credit facility | |
Expiration Date | Jun. 30, 2021 | |
Maximum Available | $ 2,500 | |
LOCs issued | $ 275 | |
LOC facility due August 2031 [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit Facilities | LOC facility (1) | [1] |
Expiration Date | Aug. 26, 2031 | [1] |
Maximum Available | $ 990 | [1] |
LOCs issued | $ 945 | [1] |
LOC facility due October 2031 [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit Facilities | LOC facility (1) | [1] |
Expiration Date | Oct. 1, 2031 | [1] |
Maximum Available | $ 1,023 | [1] |
LOCs issued | $ 1,020 | [1] |
[1] | Our wholly-owned subsidiaries entered into irrevocable LOC facility agreements with third-party lenders supporting inter-company reinsurance agreements |
Contingencies And Commitment117
Contingencies And Commitments (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loss Contingencies [Line Items] | |||
Total rental expense on operating leases | $ 36 | $ 37 | $ 35 |
Sale-leaseback transactions, net | 62 | 85 | |
Total accumulated amortization related to sales leaseback transaction | 101 | 92 | |
Loss contingency accrual, insurance-related assessment, premium tax offset | $ (17) | $ (10) | |
Variable Annuity Product Concentration Risk [Member] | Variable Annuity Deposits Total [Member] | |||
Loss Contingencies [Line Items] | |||
Concentration risk, percentage | 14.00% | 21.00% | 18.00% |
Variable Annuity Product Concentration Risk [Member] | Variable Annuity Account Values Total [Member] | |||
Loss Contingencies [Line Items] | |||
Concentration risk, percentage | 40.00% | 41.00% | 42.00% |
Fund Choice Concentration Risk [Member] | Variable Annuity Deposits Total [Member] | |||
Loss Contingencies [Line Items] | |||
Concentration risk, percentage | 20.00% | 23.00% | 20.00% |
Fund Choice Concentration Risk [Member] | Variable Annuity Account Values Total [Member] | |||
Loss Contingencies [Line Items] | |||
Concentration risk, percentage | 47.00% | 47.00% | 48.00% |
Maximum [Member] | Pending Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Loss contingency, estimate | $ 50 |
Contingencies And Commitment118
Contingencies And Commitments (Future Rental Commitments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Future minimum rental commitments [Abstract] | |
2,018 | $ 31 |
2,019 | 31 |
2,020 | 27 |
2,021 | 24 |
2,022 | 19 |
Thereafter | 66 |
Total | $ 198 |
Contingencies And Commitment119
Contingencies And Commitments (Future Capital Lease Commitments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Future minimum capital lease commitments [Abstract] | |
2,018 | $ 7 |
2,019 | 90 |
2,020 | 52 |
2,021 | 62 |
2,022 | 63 |
Thereafter | 28 |
Total minimum lease payments | 302 |
Less: Amount representing interest | 26 |
Present value of minimum lease payments | $ 276 |
Shares and Stockholders' Equ120
Shares and Stockholders' Equity (Components And Changes In Accumulated OCI) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of beginning-of-year | $ 1,782 | ||
(Increases) attributable to: | |||
Gross OTTI recognized in OCI | $ 53 | $ 29 | |
Less: | |||
Balance as of end-of-year | 3,327 | 1,782 | |
Unrealized Gain (Loss) on AFS Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of beginning-of-year | 1,687 | 934 | 3,054 |
Unrealized holding gains (losses) arising during the year | 2,872 | 1,549 | (4,386) |
Change in foreign currency exchange rate adjustment | 134 | (100) | (45) |
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds | (703) | (460) | 1,293 |
Income tax benefit (expense) | (745) | (351) | 1,095 |
Less: | |||
Reclassification adjustment for gains (losses) included in net income (loss) | (40) | (155) | 147 |
Associated amortization of DAC, VOBA, DSI, and DFEL | (19) | (22) | (28) |
Income tax benefit (expense) | 21 | 62 | (42) |
Less: | |||
Balance as of end-of-year | 3,283 | 1,687 | 934 |
Unrealized OTTI on AFS Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of beginning-of-year | 22 | 19 | 19 |
(Increases) attributable to: | |||
Gross OTTI recognized in OCI | (53) | (29) | |
Change in DAC, VOBA, DSI and DFEL | 12 | 4 | |
Income tax benefit (expense) | 14 | 8 | |
Decreases attributable to | |||
Changes in fair value, sales, maturities or other settlements of AFS securities | 34 | 51 | 43 |
Change in DAC, VOBA, DSI, and DFEL | (7) | (7) | (17) |
Income tax benefit (expense) | (10) | (15) | (9) |
Less: | |||
Balance as of end-of-year | 39 | 22 | 19 |
Unrealized Gain (Loss) on Derivative Instruments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of beginning-of-year | 93 | 157 | 127 |
Unrealized holding gains (losses) arising during the year | 63 | (175) | (185) |
Change in foreign currency exchange rate adjustment | (137) | 96 | 48 |
Decreases attributable to | |||
Change in DAC, VOBA, DSI and DFEL | 1 | 2 | 3 |
Income tax benefit (expense) | 26 | 27 | 46 |
Less: | |||
Reclassification adjustment for gains (losses) included in net income (loss) | 31 | 24 | (184) |
Associated amortization of DAC, VOBA, DSI and DFEL | (2) | (2) | 2 |
Income tax benefit (expense) | (10) | (8) | 64 |
Balance as of end-of-year | 27 | 93 | 157 |
Funded Status of Employee Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of beginning-of-year | (20) | (19) | (21) |
Less: | |||
Adjustment arising during the period | (4) | (2) | 3 |
Income tax benefit (expense) | 2 | 1 | (1) |
Balance as of end-of-year | $ (22) | $ (20) | $ (19) |
Shares And Stockholders' Equ121
Shares And Stockholders' Equity (Schedule of Reclassifications Out Of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Total realized gain (loss) | $ (456) | $ (510) | $ (222) | ||||||||||
Net investment income | 4,760 | 4,631 | 4,611 | ||||||||||
Interest and debt expense | (126) | (116) | (105) | ||||||||||
Commissions and other expenses | (3,967) | (4,005) | (4,109) | ||||||||||
Income (loss) from continuing operations before taxes | 731 | 1,440 | 1,468 | ||||||||||
Federal income tax expense (benefit) | (1,287) | 267 | 295 | ||||||||||
Net income (loss) | $ 963 | $ 385 | $ 321 | $ 349 | $ 470 | $ 359 | $ 219 | $ 125 | 2,018 | 1,173 | 1,173 | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on AFS Securities [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Total realized gain (loss) | (40) | (155) | 147 | ||||||||||
Income (loss) from continuing operations before taxes | (59) | (177) | 119 | ||||||||||
Federal income tax expense (benefit) | 21 | 62 | (42) | ||||||||||
Net income (loss) | (38) | (115) | 77 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on AFS Securities [Member] | Associated amortization of DAC, VOBA, DSI and DFEL [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Total realized gain (loss) | (19) | (22) | (28) | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized OTTI on AFS Securities [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Total realized gain (loss) | 5 | 3 | 2 | ||||||||||
Income (loss) from continuing operations before taxes | 4 | 3 | 2 | ||||||||||
Federal income tax expense (benefit) | (1) | ||||||||||||
Net income (loss) | 3 | 3 | 2 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized OTTI on AFS Securities [Member] | Change In DAC, VOBA, DSI, And DFEL [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Total realized gain (loss) | (1) | ||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on Derivative Instruments [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Total gross reclassifications | 31 | 24 | (184) | ||||||||||
Income (loss) from continuing operations before taxes | 29 | 22 | (182) | ||||||||||
Federal income tax expense (benefit) | (10) | (8) | 64 | ||||||||||
Net income (loss) | 19 | 14 | (118) | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on Derivative Instruments [Member] | Interest rate contracts [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Total realized gain (loss) | 1 | ||||||||||||
Net investment income | 4 | 5 | (190) | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on Derivative Instruments [Member] | Foreign currency contracts [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Total realized gain (loss) | 9 | 7 | |||||||||||
Net investment income | 18 | 11 | 6 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on Derivative Instruments [Member] | Change In DAC, VOBA, DSI, And DFEL [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Commissions and other expenses | $ (2) | $ (2) | $ 2 | ||||||||||
[1] | Fourth quarter 2017 results include a goodwill impairment charge and the impacts of remeasuring our existing deferred tax balances for the impact of the Tax Act as disclosed elsewhere herein. |
Realized (Gain) Loss (Details)
Realized (Gain) Loss (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Details underlying realized gain (loss) | ||||
Total realized gain (loss) related to certain investments | [1] | $ (71) | $ (241) | $ (83) |
Realized gain (loss) on the mark-to-market on certain instruments | [2] | (155) | (66) | 123 |
Indexed annuity and IUL contracts net derivatives results: | ||||
Gross gain (loss) | [3] | (22) | (1) | (78) |
Associated amortization of DAC, VOBA, DSI, and DFEL | [3] | (2) | (4) | 14 |
Gross gain (loss) | (174) | (166) | (161) | |
Associated amortization of DAC, VOBA, DSI, and DFEL | (32) | (32) | (34) | |
Realized gain (loss) on sale of subsidiaries/businesses | [4] | (3) | ||
Total realized gain (loss) | $ (456) | $ (510) | $ (222) | |
[1] | See "Realized Gain (Loss) Related to Certain Investments" section in Note 5. | |||
[2] | Represents changes in the fair values of certain derivative investments (not including those associated with our variable and indexed annuity and IUL contracts net derivatives results), reinsurance related embedded derivatives and trading securities. | |||
[3] | Represents the net difference between the change in the fair value of the S&P 500 call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products. | |||
[4] | .See "Lincoln Financial Media Company" in Note 3. |
Commissions and Other Expens123
Commissions and Other Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Details underlying commissions and other expenses [Abstract] | |||
Commissions | $ 1,998 | $ 1,927 | $ 2,082 |
General and administrative expenses | 1,715 | 1,623 | 1,683 |
Expenses associated with reserve financing and unrelated LOCs | 57 | 40 | 32 |
DAC and VOBA deferrals and interest, net of amortization | (390) | (170) | (292) |
Broker-dealer expenses | 329 | 320 | 329 |
Specifically identifiable intangible asset amortization | 4 | 4 | 4 |
Media expenses | 28 | ||
Taxes, licenses and fees | 254 | 261 | 243 |
Total | $ 3,967 | $ 4,005 | $ 4,109 |
Retirement and Deferred Comp124
Retirement and Deferred Compensation Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement [Abstract] | |||
Net periodic benefit expense (recovery) | $ 5 | $ 3 | $ 3 |
Expected benefit payments in the next fiscal year | 11 | ||
Defined contribution plans expense | 85 | 83 | 79 |
Deferred compensation plans expense | 27 | 22 | 12 |
Other Postretirement Benefit Plans [Member] | |||
Statement [Abstract] | |||
Benefit expense | $ 7 | $ 9 | $ 30 |
Retirement and Deferred Comp125
Retirement and Deferred Compensation Plans (Benefit Plans' Assets and Obligations) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 111 | $ 117 |
Projected benefit obligation | 119 | 117 |
Funded status | (8) | |
Amounts Recognized on the Consolidated Balance Sheets | ||
Other assets | 2 | |
Other liabilities | (8) | $ (2) |
Net amount recognized | $ (8) | |
Weighted-Average Assumptions, Benefit obligations: | ||
Weighted-average discount rate | 4.00% | 4.50% |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | ||
Weighted-average discount rate | 4.50% | 4.50% |
Expected return on plan assets | 4.75% | 5.50% |
Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 7 | $ 7 |
Projected benefit obligation | 12 | 11 |
Funded status | (5) | (4) |
Amounts Recognized on the Consolidated Balance Sheets | ||
Other liabilities | (5) | (4) |
Net amount recognized | $ (5) | $ (4) |
Weighted-Average Assumptions, Benefit obligations: | ||
Weighted-average discount rate | 4.00% | 4.50% |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | ||
Weighted-average discount rate | 4.50% | 4.50% |
Expected return on plan assets | 6.50% | 6.50% |
Retirement and Deferred Comp126
Retirement and Deferred Compensation Plans (Fair Value of Benefit Plan Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value of Benefit Plans' Assets [Abstract] | ||
U.S. government bonds | $ 3 | |
Cash and invested cash | 2 | $ 2 |
Other investments | 7 | 8 |
Total | 118 | 124 |
Fixed Maturity Securities [Member] | ||
Fair Value of Benefit Plans' Assets [Abstract] | ||
Corporate bonds | 1 | 21 |
U.S. government bonds | $ 105 | $ 93 |
Retirement and Deferred Comp127
Retirement and Deferred Compensation Plans (Deferred Compensation Plans Liabilities and Investment) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |||
Total liabilities | [1] | $ 517 | $ 440 |
Investments dedicated to fund liabilities | [2] | $ 182 | $ 159 |
[1] | Reported in other assets on our Consolidated Balance Sheets. | ||
[2] | Reported in other liabilities on our Consolidated Balance Sheets. |
Stock-Based Incentive Compensat
Stock-Based Incentive Compensation Plans (Compensation Expense By Award Type) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee service share-based compensation, aggregate disclosures [Abstract] | |||
Compensation expense | $ 47 | $ 44 | $ 39 |
Recognized tax benefit | 16 | 15 | 14 |
Stock options [Member] | |||
Employee service share-based compensation, aggregate disclosures [Abstract] | |||
Compensation expense | 9 | 9 | 7 |
Performance Shares [Member] | |||
Employee service share-based compensation, aggregate disclosures [Abstract] | |||
Compensation expense | 12 | 10 | 11 |
Stock appreciation rights [Member] | |||
Employee service share-based compensation, aggregate disclosures [Abstract] | |||
Compensation expense | 2 | 3 | |
Restricted Stock Units And Non-Vested Stock [Member] | |||
Employee service share-based compensation, aggregate disclosures [Abstract] | |||
Compensation expense | $ 24 | $ 22 | $ 21 |
Statutory Information and Re129
Statutory Information and Restrictions (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Statutory accounting practices [Line Items] | |
Increase In Reserves Each Year Over Remaining Years | $ 90 |
Current Period Increase In Reserves | $ 450 |
RBC Ratio Company Action Level Low End | 75.00% |
RBC Ratio Company Action Level High End | 100.00% |
Amount of dividends that could be paid in the next year without prior approval | $ 1,200 |
INDIANA | |
Statutory accounting practices [Line Items] | |
Statutory limitation as percentage of insurer contract holder surplus | 10.00% |
NEW YORK | |
Statutory accounting practices [Line Items] | |
Statutory limitation as percentage of insurer contract holder surplus | 10.00% |
Statutory Information and Re130
Statutory Information and Restrictions (Statutory Capital and Surplus) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Statutory Information and Restrictions [Abstract] | ||
U.S. capital and surplus | $ 8,074 | $ 8,017 |
Statutory Information and Re131
Statutory Information and Restrictions (Net Gain Loss From Operations, Net Income Loss, Dividends to LNC Holding Company) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statutory Information and Restrictions [Abstract] | |||
U.S. net gain (loss) from operations, after-tax | $ 1,312 | $ 1,088 | $ 583 |
U.S. net income (loss) | 1,452 | 982 | 786 |
U.S. dividends to LNC holding company | $ 954 | $ 950 | $ 1,121 |
Statutory Information and Re132
Statutory Information and Restrictions (Effects on statutory surplus compared to NAIC statutory surplus from the use of prescribed and permitted practices) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Calculation of reserves using the Indiana universal life method [Member] | |||
Statutory accounting practices [Line Items] | |||
Effects on statutory surplus compared to NAIC statutory surplus from the use of prescribed and permitted practices | $ 54 | $ 79 | |
Conservative valuation rate on certain variable annuities [Member] | |||
Statutory accounting practices [Line Items] | |||
Effects on statutory surplus compared to NAIC statutory surplus from the use of prescribed and permitted practices | (50) | (49) | |
Lesser of LOC and XXX additional reserve as surplus [Member] | |||
Statutory accounting practices [Line Items] | |||
Effects on statutory surplus compared to NAIC statutory surplus from the use of prescribed and permitted practices | [1] | 1,965 | $ 2,855 |
LLC Notes And Variable Value Surplus Notes [Member] | |||
Statutory accounting practices [Line Items] | |||
Effects on statutory surplus compared to NAIC statutory surplus from the use of prescribed and permitted practices | [1] | 1,585 | |
Excess Of Loss Reinsurance Treaties [Member] | |||
Statutory accounting practices [Line Items] | |||
Effects on statutory surplus compared to NAIC statutory surplus from the use of prescribed and permitted practices | [1] | $ 185 | |
[1] | These permitted practices are related to structures that continue to be allowed in accordance with the grandfathered structures under the provisions of AG48. |
Fair Value of Financial Inst133
Fair Value of Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 0 | ||
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 172 | ||
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | ||
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | $ 172 | ||
Maximum [Member] | |||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 1 | $ 1 | |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 1 | 1 | |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 1 | 1 | |
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | $ 1 | $ 1 |
Fair Value of Financial Inst134
Fair Value of Financial Instruments (Carrying and Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
AFS securities: | |||
AFS Fixed Maturity Securities | $ 93,340 | $ 87,866 | |
Variable interest entities' fixed maturity securities | 200 | ||
AFS Equity securities | 246 | 275 | |
Trading securities | 1,533 | 1,624 | |
Mortgage loans on real estate | 10,662 | 9,761 | |
Derivative investments | 845 | 900 | |
Other investments | 2,006 | 2,034 | |
Other contract holder funds: | |||
Benefit Plans' Assets | 118 | 124 | |
Carrying Value [Member] | |||
AFS securities: | |||
Trading securities | 1,533 | 1,624 | |
Mortgage loans on real estate | 10,662 | 9,761 | |
Derivative investments | [1] | 845 | 900 |
Other investments | 2,006 | 2,034 | |
Cash and invested cash | 947 | 2,057 | |
Reinsurance related embedded derivatives | 58 | ||
Indexed annuity ceded embedded derivatives | 11 | ||
Separate account assets | 144,219 | 128,397 | |
Other contract holder funds: | |||
Remaining guaranteed interest and similar contracts | (592) | (629) | |
Account values of certain investment contracts | (32,332) | (31,475) | |
Short-term debt | (10) | (280) | |
Long-term debt | (2,374) | (2,549) | |
Reinsurance related embedded derivatives | (51) | ||
Benefit Plans' Assets | [2] | 118 | 124 |
Fair Value [Member] | |||
AFS securities: | |||
Trading securities | 1,533 | 1,624 | |
Mortgage loans on real estate | 10,773 | 9,719 | |
Derivative investments | [1] | 845 | 900 |
Other investments | 2,006 | 2,034 | |
Cash and invested cash | 947 | 2,057 | |
Reinsurance related embedded derivatives | 58 | ||
Indexed annuity ceded embedded derivatives | 11 | ||
Separate account assets | 144,219 | 128,397 | |
Other contract holder funds: | |||
Remaining guaranteed interest and similar contracts | (592) | (629) | |
Account values of certain investment contracts | (36,161) | (35,647) | |
Short-term debt | (10) | (280) | |
Long-term debt | (2,677) | (2,739) | |
Reinsurance related embedded derivatives | (51) | ||
Benefit Plans' Assets | [2] | 118 | 124 |
VIEs' Fixed Maturity Securities [Member] | Carrying Value [Member] | |||
AFS securities: | |||
Variable interest entities' fixed maturity securities | 200 | ||
VIEs' Fixed Maturity Securities [Member] | Fair Value [Member] | |||
AFS securities: | |||
Variable interest entities' fixed maturity securities | 200 | ||
Fixed Maturity Securities [Member] | Carrying Value [Member] | |||
AFS securities: | |||
AFS Fixed Maturity Securities | 93,340 | 87,866 | |
Fixed Maturity Securities [Member] | Fair Value [Member] | |||
AFS securities: | |||
AFS Fixed Maturity Securities | 93,340 | 87,866 | |
Equity Securities [Member] | Carrying Value [Member] | |||
AFS securities: | |||
AFS Equity securities | 246 | 275 | |
Equity Securities [Member] | Fair Value [Member] | |||
AFS securities: | |||
AFS Equity securities | 246 | 275 | |
GLB Direct Embedded Derivatives [Member] | Carrying Value [Member] | |||
AFS securities: | |||
Other assets - GLB embedded derivatives | 903 | ||
GLB Direct Embedded Derivatives [Member] | Fair Value [Member] | |||
AFS securities: | |||
Other assets - GLB embedded derivatives | 903 | ||
GLB Ceded Embedded Derivatives [Member] | Carrying Value [Member] | |||
AFS securities: | |||
Other assets - GLB embedded derivatives | 51 | 371 | |
GLB Ceded Embedded Derivatives [Member] | Fair Value [Member] | |||
AFS securities: | |||
Other assets - GLB embedded derivatives | 51 | 371 | |
Future Contract Benefits [Member] | Carrying Value [Member] | |||
Future contract benefits: | |||
Indexed annuity and IUL contracts embedded derivatives | (1,418) | (1,139) | |
Future Contract Benefits [Member] | Fair Value [Member] | |||
Future contract benefits: | |||
Indexed annuity and IUL contracts embedded derivatives | (1,418) | (1,139) | |
Other Liabilities [Member] | Carrying Value [Member] | |||
Other contract holder funds: | |||
Other liabilities - derivative liabilities | [1] | (455) | (738) |
Other Liabilities [Member] | Fair Value [Member] | |||
Other contract holder funds: | |||
Other liabilities - derivative liabilities | [1] | (455) | (738) |
Other Liabilities [Member] | GLB Direct Embedded Derivatives [Member] | Carrying Value [Member] | |||
Other contract holder funds: | |||
Other liabilities - GLB embedded derivatives | (371) | ||
Other Liabilities [Member] | GLB Direct Embedded Derivatives [Member] | Fair Value [Member] | |||
Other contract holder funds: | |||
Other liabilities - GLB embedded derivatives | $ (371) | ||
Other Liabilities [Member] | GLB Ceded Embedded Derivatives [Member] | Carrying Value [Member] | |||
Other contract holder funds: | |||
Other liabilities - GLB embedded derivatives | (954) | ||
Other Liabilities [Member] | GLB Ceded Embedded Derivatives [Member] | Fair Value [Member] | |||
Other contract holder funds: | |||
Other liabilities - GLB embedded derivatives | $ (954) | ||
[1] | We have master netting agreements with each of our derivative counterparties, which allow for the netting of our derivative asset and liability positions by counterparty. | ||
[2] | Included in the funded statuses of the benefit plans, which is reported in other liabilities on our Consolidated Balance Sheets. Refer to Note 17 for information regarding our benefit plans |
Fair Value of Financial Inst135
Fair Value of Financial Instruments (Fair Value of Assets and Liabilities on a Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | $ 242,593 | $ 222,595 | ||
Liabilities measured at fair value | (3,376) | (3,095) | ||
Benefit Plans' Assets | 118 | 124 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 1,507 | 1,358 | ||
Significant Observable Inputs (Level 2) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 233,632 | 214,918 | ||
Liabilities measured at fair value | (431) | (893) | ||
Benefit Plans' Assets | 118 | 124 | ||
Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 7,454 | 6,319 | ||
Liabilities measured at fair value | (2,945) | (2,202) | ||
Corporate Bonds [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 81,160 | 76,363 | ||
Corporate Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 75,810 | 71,554 | ||
Corporate Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 5,350 | 4,809 | ||
ABS [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 953 | 1,054 | ||
ABS [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 927 | 1,021 | ||
ABS [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 26 | 33 | ||
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 533 | 377 | ||
U.S. Government Bonds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 522 | 366 | ||
U.S. Government Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 6 | 11 | ||
U.S. Government Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 5 | |||
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 446 | 501 | ||
Foreign Government Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 336 | 390 | ||
Foreign Government Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 110 | 111 | ||
RMBS [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 3,258 | 3,397 | ||
RMBS [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 3,246 | 3,394 | ||
RMBS [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 12 | 3 | ||
CMBS [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 599 | 346 | ||
CMBS [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 593 | 339 | ||
CMBS [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 6 | 7 | ||
CLOs [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 808 | 744 | ||
CLOs [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 717 | 676 | ||
CLOs [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 91 | 68 | ||
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 4,959 | 4,495 | ||
State And Municipal Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 4,959 | 4,495 | ||
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 624 | 589 | ||
Hybrid And Redeemable Preferred Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 70 | 60 | ||
Hybrid And Redeemable Preferred Securities [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 478 | 453 | ||
Hybrid And Redeemable Preferred Securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 76 | 76 | ||
VIEs' Fixed Maturity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 200 | |||
VIEs' Fixed Maturity Securities [Member] | Significant Observable Inputs (Level 2) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 200 | |||
Equity Securities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 246 | 275 | ||
Equity Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 28 | 17 | ||
Equity Securities [Member] | Significant Observable Inputs (Level 2) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 57 | 81 | ||
Equity Securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 161 | 177 | ||
Trading securities | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 1,533 | 1,624 | ||
Trading securities | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 73 | 102 | ||
Trading securities | Significant Observable Inputs (Level 2) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 1,411 | 1,457 | ||
Trading securities | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 49 | 65 | ||
Derivative investments | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 1,343 | [1] | 1,747 | |
Derivative investments | Significant Observable Inputs (Level 2) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 740 | [1] | 1,148 | |
Derivative investments | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 603 | [1] | 599 | |
Invested Cash [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 947 | 2,057 | ||
Invested Cash [Member] | Significant Observable Inputs (Level 2) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 947 | 2,057 | ||
GLB Direct Embedded Derivatives [Member] | Other Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 903 | |||
GLB Direct Embedded Derivatives [Member] | Other Liabilities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Liabilities measured at fair value | (371) | |||
GLB Direct Embedded Derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 903 | |||
GLB Direct Embedded Derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Liabilities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Liabilities measured at fair value | (371) | |||
GLB Ceded Embedded Derivatives [Member] | Other Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 51 | 371 | ||
GLB Ceded Embedded Derivatives [Member] | Other Liabilities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Liabilities measured at fair value | (954) | |||
GLB Ceded Embedded Derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 51 | 371 | ||
GLB Ceded Embedded Derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Liabilities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Liabilities measured at fair value | (954) | |||
Separate Account Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 128,397 | |||
Separate Account Assets [Member] | Other Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 144,219 | |||
Separate Account Assets [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 813 | |||
Separate Account Assets [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Other Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 814 | |||
Separate Account Assets [Member] | Significant Observable Inputs (Level 2) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 127,584 | |||
Separate Account Assets [Member] | Significant Observable Inputs (Level 2) [Member] | Other Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 143,405 | |||
Indexed Annuity And IUL Contracts [Member] | Other Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 11 | |||
Indexed Annuity And IUL Contracts [Member] | Future Contract Benefits [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Liabilities measured at fair value | (1,418) | (1,139) | ||
Indexed Annuity And IUL Contracts [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Assets [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 11 | |||
Indexed Annuity And IUL Contracts [Member] | Significant Unobservable Inputs (Level 3) [Member] | Future Contract Benefits [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Liabilities measured at fair value | (1,418) | (1,139) | ||
Reinsurance Related Embedded Derivatives [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 58 | |||
Liabilities measured at fair value | (51) | |||
Reinsurance Related Embedded Derivatives [Member] | Significant Observable Inputs (Level 2) [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Assets measured at fair value | 58 | |||
Liabilities measured at fair value | (51) | |||
Derivative Financial Instruments, Liabilities [Member] | Other Liabilities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Liabilities measured at fair value | [1] | (953) | (1,585) | |
Derivative Financial Instruments, Liabilities [Member] | Significant Observable Inputs (Level 2) [Member] | Other Liabilities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Liabilities measured at fair value | [1] | (380) | (893) | |
Derivative Financial Instruments, Liabilities [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Liabilities [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Liabilities measured at fair value | [1] | $ (573) | $ (692) | |
[1] | Derivative investment assets and liabilities presented within the fair value hierarchy are presented on a gross basis by derivative type and not on a master netting basis by counterparty |
Fair Value of Financial Inst136
Fair Value of Financial Instruments (Fair Value Measured On A Recurring Basis Reconciliation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | $ 4,117 | $ 4,764 | $ 4,667 | ||
Items Included in Net Income | (407) | (591) | (133) | ||
Gains (Losses) in OCI and Other | [1] | 345 | (39) | (170) | |
Issuances, Sales, Maturities, Settlements, Calls, Net | 268 | 325 | 314 | ||
Transfers In or Out of Level 3, Net | [2] | 186 | (342) | 86 | |
Ending Fair Value | 4,509 | 4,117 | 4,764 | ||
Corporate Bonds [Member] | Fixed Maturity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | 4,809 | 4,273 | 4,052 | |
Items Included in Net Income | [3] | 17 | 4 | 4 | |
Gains (Losses) in OCI and Other | [1],[3] | 199 | (29) | (138) | |
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | (45) | 159 | 298 | |
Transfers In or Out of Level 3, Net | [2],[3] | 370 | 402 | 57 | |
Ending Fair Value | [3] | 5,350 | 4,809 | 4,273 | |
ABS [Member] | Fixed Maturity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | 33 | 45 | 33 | |
Gains (Losses) in OCI and Other | [1],[3] | (1) | |||
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | 14 | 12 | ||
Transfers In or Out of Level 3, Net | [2],[3] | (7) | (25) | ||
Ending Fair Value | [3] | 26 | 33 | 45 | |
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Issuances, Sales, Maturities, Settlements, Calls, Net | (2) | ||||
Transfers In or Out of Level 3, Net | [2] | 5 | [3] | 2 | |
Ending Fair Value | [3] | 5 | |||
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | 111 | 111 | 110 | |
Items Included in Net Income | [3] | ||||
Gains (Losses) in OCI and Other | [1],[3] | (1) | 1 | ||
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | ||||
Transfers In or Out of Level 3, Net | [2],[3] | ||||
Ending Fair Value | [3] | 110 | 111 | 111 | |
RMBS [Member] | Fixed Maturity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | 3 | 1 | 1 | |
Items Included in Net Income | [3] | 3 | |||
Gains (Losses) in OCI and Other | [1],[3] | ||||
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | 19 | 54 | (3) | |
Transfers In or Out of Level 3, Net | [2],[3] | (10) | (52) | ||
Ending Fair Value | [3] | 12 | 3 | 1 | |
CMBS [Member] | Fixed Maturity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | 7 | 10 | 15 | |
Items Included in Net Income | [3] | 2 | 1 | ||
Gains (Losses) in OCI and Other | [1],[3] | 1 | (1) | 8 | |
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | 54 | 27 | (14) | |
Transfers In or Out of Level 3, Net | [2],[3] | (56) | (31) | ||
Ending Fair Value | [3] | 6 | 7 | 10 | |
CLOs [Member] | Fixed Maturity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | 68 | 551 | 368 | |
Gains (Losses) in OCI and Other | [1],[3] | 1 | |||
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | 124 | 138 | 194 | |
Transfers In or Out of Level 3, Net | [2],[3] | (101) | (621) | (12) | |
Ending Fair Value | [3] | 91 | 68 | 551 | |
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Items Included in Net Income | [3] | (1) | |||
Transfers In or Out of Level 3, Net | [2],[3] | 1 | |||
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | 76 | 94 | 55 | |
Gains (Losses) in OCI and Other | [1],[3] | 14 | (3) | (3) | |
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | (15) | |||
Transfers In or Out of Level 3, Net | [2],[3] | (14) | 42 | ||
Ending Fair Value | [3] | 76 | 76 | 94 | |
Equity Securities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | 177 | 164 | 157 | |
Items Included in Net Income | [3] | 1 | 5 | 1 | |
Gains (Losses) in OCI and Other | [1],[3] | (3) | (4) | 4 | |
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | (13) | 12 | 3 | |
Transfers In or Out of Level 3, Net | [2],[3] | (1) | (1) | ||
Ending Fair Value | [3] | 161 | 177 | 164 | |
Trading securities | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | 65 | 73 | 73 | |
Items Included in Net Income | [3] | 3 | 3 | 2 | |
Gains (Losses) in OCI and Other | [1],[3] | 8 | (2) | ||
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | (26) | 6 | ||
Transfers In or Out of Level 3, Net | [2],[3] | (1) | (17) | ||
Ending Fair Value | [3] | 49 | 65 | 73 | |
Derivative investments | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [3] | (93) | 555 | 989 | |
Items Included in Net Income | [3] | (27) | (483) | (90) | |
Gains (Losses) in OCI and Other | [1],[3] | 127 | (1) | (41) | |
Issuances, Sales, Maturities, Settlements, Calls, Net | [3] | 23 | (164) | (303) | |
Ending Fair Value | [3] | 30 | (93) | 555 | |
GLB Direct Embedded Derivatives [Member] | Other Assets [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Items Included in Net Income | [4] | 903 | |||
Ending Fair Value | [4] | 903 | |||
GLB Direct Embedded Derivatives [Member] | Other Liabilities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [4] | (371) | (952) | (174) | |
Items Included in Net Income | [4] | 371 | 581 | (778) | |
Ending Fair Value | [4] | (371) | (952) | ||
GLB Ceded Embedded Derivatives [Member] | Other Assets [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [4] | 371 | 952 | 174 | |
Items Included in Net Income | [4] | (320) | (581) | 778 | |
Ending Fair Value | [4] | 51 | 371 | 952 | |
GLB Ceded Embedded Derivatives [Member] | Other Liabilities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Items Included in Net Income | [4] | (954) | |||
Ending Fair Value | [4] | (954) | |||
Indexed Annuity And IUL Contracts [Member] | Other Assets [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Issuances, Sales, Maturities, Settlements, Calls, Net | 11 | ||||
Ending Fair Value | 11 | ||||
Indexed Annuity And IUL Contracts [Member] | Future Contract Benefits [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [4] | (1,139) | (1,100) | (1,170) | |
Items Included in Net Income | [4] | (400) | (120) | (57) | |
Issuances, Sales, Maturities, Settlements, Calls, Net | [4] | 121 | 81 | 127 | |
Ending Fair Value | [4] | $ (1,418) | (1,139) | (1,100) | |
Variable Interest Entities Liabilities - Derivative Instruments [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [5] | (4) | (13) | ||
Items Included in Net Income | [5] | 4 | 9 | ||
Ending Fair Value | [5] | (4) | |||
Credit Default Swaps [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [5] | (9) | (3) | ||
Items Included in Net Income | [5] | (6) | |||
Ending Fair Value | [5] | (9) | |||
Credit Default Swaps [Member] | Other Liabilities [Member] | |||||
Level 3 Unobservable Input Reconciliation | |||||
Beginning Fair Value | [5] | (9) | |||
Items Included in Net Income | [5] | (6) | |||
Issuances, Sales, Maturities, Settlements, Calls, Net | [5] | $ 15 | |||
Ending Fair Value | [5] | $ (9) | |||
[1] | The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 6). | ||||
[2] | Transfers into or out of Level 3 for AFS and trading securities are displayed at amortized cost as of the beginning-of-year. For AFS and trading securities, the difference between beginning-of-year amortized cost and beginning-of-year fair value was included in OCI and earnings, respectively, in prior years. | ||||
[3] | Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss). Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) | ||||
[4] | Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). | ||||
[5] | The changes in fair value of the credit default swaps and contingency forwards are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
Fair Value of Financial Inst137
Fair Value of Financial Instruments (Schedule Of Investment Holdings Movements) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | $ 1,205 | $ 931 | $ 939 |
Sales | (273) | (238) | (243) |
Maturities | (505) | (194) | (364) |
Settlements | (15) | (34) | 23 |
Calls | (144) | (140) | (41) |
Total | 268 | 325 | 314 |
Corporate Bonds [Member] | Fixed Maturity Securities [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | 850 | 560 | 537 |
Sales | (448) | (62) | (38) |
Maturities | (98) | (23) | (44) |
Settlements | (205) | (176) | (117) |
Calls | (144) | (140) | (40) |
Total | (45) | 159 | 298 |
ABS [Member] | Fixed Maturity Securities [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | 15 | 13 | |
Settlements | (1) | (1) | |
Total | 14 | 12 | |
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Settlements | (2) | ||
Total | (2) | ||
RMBS [Member] | Fixed Maturity Securities [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | 19 | 54 | |
Sales | (3) | ||
Total | 19 | 54 | (3) |
CMBS [Member] | Fixed Maturity Securities [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | 55 | 31 | |
Sales | (1) | ||
Settlements | (1) | (3) | (13) |
Calls | (1) | ||
Total | 54 | 27 | (14) |
CLOs [Member] | Fixed Maturity Securities [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | 124 | 140 | 217 |
Settlements | (2) | (23) | |
Total | 124 | 138 | 194 |
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Sales | (15) | ||
Total | (15) | ||
Equity Securities [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | 18 | 18 | 43 |
Sales | (31) | (6) | (40) |
Total | (13) | 12 | 3 |
Trading securities | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | 2 | 7 | 1 |
Sales | (27) | ||
Settlements | (1) | (1) | (1) |
Total | (26) | 6 | |
Derivative investments | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | 197 | 176 | 179 |
Sales | 233 | (169) | (162) |
Maturities | (407) | (171) | (320) |
Total | 23 | (164) | (303) |
Indexed Annuity And IUL Contracts [Member] | Other Assets [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | 11 | ||
Total | 11 | ||
Indexed Annuity And IUL Contracts [Member] | Future Contract Benefits [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Issuances | (71) | (70) | (51) |
Settlements | 192 | 151 | 178 |
Total | $ 121 | 81 | $ 127 |
Credit Default Swaps [Member] | Other Liabilities [Member] | |||
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract] | |||
Sales | 15 | ||
Total | $ 15 |
Fair Value of Financial Inst138
Fair Value of Financial Instruments (Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held | ||||
Change in unrealized gains (losses) included in net income | [1] | $ (280) | $ (444) | $ (183) |
Derivative investments | Realized Gain (Loss) [Member] | ||||
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held | ||||
Change in unrealized gains (losses) included in net income | (266) | (432) | (102) | |
Indexed Annuity And IUL Contracts [Member] | Realized Gain (Loss) [Member] | ||||
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held | ||||
Change in unrealized gains (losses) included in net income | (14) | (16) | (84) | |
GLB Ceded Embedded Derivatives [Member] | Realized Gain (Loss) [Member] | ||||
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held | ||||
Change in unrealized gains (losses) included in net income | 1,904 | 1,122 | (244) | |
GLB Direct Embedded Derivatives [Member] | Realized Gain (Loss) [Member] | ||||
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held | ||||
Change in unrealized gains (losses) included in net income | $ (1,904) | (1,122) | 244 | |
Variable Interest Entities Liabilities - Derivative Instruments [Member] | Realized Gain (Loss) [Member] | ||||
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held | ||||
Change in unrealized gains (losses) included in net income | $ 4 | 9 | ||
Credit Default Swaps [Member] | Realized Gain (Loss) [Member] | ||||
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held | ||||
Change in unrealized gains (losses) included in net income | $ (6) | |||
[1] | Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) |
Fair Value of Financial Inst139
Fair Value of Financial Instruments (Components Of The Transfers In And Out Of Level 3) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | $ 516 | $ 620 | $ 283 |
Transfers Out of Level 3 | (330) | (962) | (197) |
Total Transfers In or (Out) of Level 3 | 186 | (342) | 86 |
Corporate Bonds [Member] | Fixed Maturity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 458 | 605 | 224 |
Transfers Out of Level 3 | (88) | (203) | (167) |
Total Transfers In or (Out) of Level 3 | 370 | 402 | 57 |
ABS [Member] | Fixed Maturity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 14 | 3 | |
Transfers Out of Level 3 | (21) | (28) | |
Total Transfers In or (Out) of Level 3 | (7) | (25) | |
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 5 | 9 | |
Transfers Out of Level 3 | (7) | ||
Total Transfers In or (Out) of Level 3 | 5 | 2 | |
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 4 | ||
Transfers Out of Level 3 | (4) | ||
RMBS [Member] | Fixed Maturity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 2 | ||
Transfers Out of Level 3 | (10) | (54) | |
Total Transfers In or (Out) of Level 3 | (10) | (52) | |
CMBS [Member] | Fixed Maturity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 3 | ||
Transfers Out of Level 3 | (59) | (31) | |
Total Transfers In or (Out) of Level 3 | (56) | (31) | |
CLOs [Member] | Fixed Maturity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 30 | 4 | |
Transfers Out of Level 3 | (131) | (621) | (16) |
Total Transfers In or (Out) of Level 3 | (101) | (621) | (12) |
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 2 | ||
Transfers Out of Level 3 | (1) | ||
Total Transfers In or (Out) of Level 3 | 1 | ||
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 47 | ||
Transfers Out of Level 3 | (14) | (5) | |
Total Transfers In or (Out) of Level 3 | (14) | 42 | |
Equity Securities [Member] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers Out of Level 3 | (1) | (1) | |
Total Transfers In or (Out) of Level 3 | (1) | (1) | |
Trading securities | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract] | |||
Transfers In to Level 3 | 4 | 1 | 4 |
Transfers Out of Level 3 | (5) | (18) | $ (4) |
Total Transfers In or (Out) of Level 3 | $ (1) | $ (17) |
Fair Value of Financial Inst140
Fair Value of Financial Instruments (Fair Value Inputs Quantitative Information) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Assets Fair Value Disclosure [Abstract] | ||
Assets Fair Value Disclosure | $ 242,593 | $ 222,595 |
Liabilities Fair Value Disclosure [Abstract] | ||
Liabilities measured at fair value | (3,376) | (3,095) |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Assets Fair Value Disclosure | 7,454 | 6,319 |
Liabilities Fair Value Disclosure [Abstract] | ||
Liabilities measured at fair value | $ (2,945) | $ (2,202) |
Significant Unobservable Inputs (Level 3) [Member] | GLB Direct And Ceded Embedded Derivative [Member] | Maximum [Member] | Other Assets [Member] | ||
Fair Value Inputs [Abstract] | ||
Utilization of guaranteed withdrawal | 100.00% | |
Claims Utilization Factor | 100.00% | |
Premiums Utilization Factor | 115.00% | |
NPR | 0.25% | |
Volatility | 29.00% | |
Significant Unobservable Inputs (Level 3) [Member] | GLB Direct And Ceded Embedded Derivative [Member] | Minimum [Member] | Other Assets [Member] | ||
Fair Value Inputs [Abstract] | ||
Utilization of guaranteed withdrawal | 85.00% | |
Claims Utilization Factor | 60.00% | |
Premiums Utilization Factor | 80.00% | |
NPR | 0.01% | |
Volatility | 1.00% | |
Significant Unobservable Inputs (Level 3) [Member] | GLB Ceded Embedded Derivatives [Member] | Maximum [Member] | Other Liabilities [Member] | ||
Fair Value Inputs [Abstract] | ||
Utilization of guaranteed withdrawal | 100.00% | |
Claims Utilization Factor | 100.00% | |
Premiums Utilization Factor | 115.00% | |
NPR | 0.25% | |
Volatility | 29.00% | |
Significant Unobservable Inputs (Level 3) [Member] | GLB Ceded Embedded Derivatives [Member] | Minimum [Member] | Other Liabilities [Member] | ||
Fair Value Inputs [Abstract] | ||
Utilization of guaranteed withdrawal | 85.00% | |
Claims Utilization Factor | 60.00% | |
Premiums Utilization Factor | 80.00% | |
NPR | 0.01% | |
Volatility | 1.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Corporate Bonds [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Assets Fair Value Disclosure | $ 2,395 | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Corporate Bonds [Member] | Maximum [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 21.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Corporate Bonds [Member] | Minimum [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 0.50% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | ABS [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Assets Fair Value Disclosure | $ 24 | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | ABS [Member] | Maximum [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 3.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | ABS [Member] | Minimum [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 3.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Foreign Government Bonds [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Assets Fair Value Disclosure | $ 78 | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Foreign Government Bonds [Member] | Maximum [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 3.40% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Foreign Government Bonds [Member] | Minimum [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 1.70% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Assets Fair Value Disclosure | $ 4 | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Hybrid And Redeemable Preferred Securities [Member] | Maximum [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 1.80% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Hybrid And Redeemable Preferred Securities [Member] | Minimum [Member] | Fixed Maturity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 1.80% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Equity Securities [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Assets Fair Value Disclosure | $ 22 | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Equity Securities [Member] | Maximum [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 4.90% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Equity Securities [Member] | Minimum [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Liquidity Duration Adjustment | 4.50% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | GLB Direct And Ceded Embedded Derivative [Member] | Other Assets [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Assets Fair Value Disclosure | $ 954 | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | GLB Direct And Ceded Embedded Derivative [Member] | Maximum [Member] | Other Assets [Member] | ||
Fair Value Inputs [Abstract] | ||
Lapse Rate | 30.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | GLB Direct And Ceded Embedded Derivative [Member] | Minimum [Member] | Other Assets [Member] | ||
Fair Value Inputs [Abstract] | ||
Lapse Rate | 1.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Indexed Annuity And IUL Contracts [Member] | Other Assets [Member] | ||
Assets Fair Value Disclosure [Abstract] | ||
Assets Fair Value Disclosure | $ 11 | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Indexed Annuity And IUL Contracts [Member] | Maximum [Member] | Other Assets [Member] | ||
Fair Value Inputs [Abstract] | ||
Lapse Rate | 9.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Indexed Annuity And IUL Contracts [Member] | Minimum [Member] | Other Assets [Member] | ||
Fair Value Inputs [Abstract] | ||
Lapse Rate | 1.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Future contract benefits - indexed annuity and IUL contracts embedded derivatives | Future Contract Benefits [Member] | ||
Liabilities Fair Value Disclosure [Abstract] | ||
Liabilities measured at fair value | $ (1,418) | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Future contract benefits - indexed annuity and IUL contracts embedded derivatives | Maximum [Member] | Future Contract Benefits [Member] | ||
Fair Value Inputs [Abstract] | ||
Lapse Rate | 9.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | Future contract benefits - indexed annuity and IUL contracts embedded derivatives | Minimum [Member] | Future Contract Benefits [Member] | ||
Fair Value Inputs [Abstract] | ||
Lapse Rate | 1.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | GLB Ceded Embedded Derivatives [Member] | Other Liabilities [Member] | ||
Liabilities Fair Value Disclosure [Abstract] | ||
Liabilities measured at fair value | $ (954) | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | GLB Ceded Embedded Derivatives [Member] | Maximum [Member] | Other Liabilities [Member] | ||
Fair Value Inputs [Abstract] | ||
Lapse Rate | 30.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Discounted Cash Flow Valuation Technique [Member] | GLB Ceded Embedded Derivatives [Member] | Minimum [Member] | Other Liabilities [Member] | ||
Fair Value Inputs [Abstract] | ||
Lapse Rate | 1.00% |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information [Abstract] | |
Federal rate | 35.00% |
Segment Information (Reconcilia
Segment Information (Reconciliation Of Revenue From Segments To Consolidated) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | $ 3,413 | $ 3,269 | $ 3,237 | $ 3,229 | $ 3,347 | $ 3,181 | $ 2,930 | $ 2,885 | $ 13,148 | $ 12,343 | $ 12,683 | ||
Annuities Segment [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | 4,034 | 3,710 | 3,815 | ||||||||||
Retirement Plan Services Segment [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | 1,152 | 1,092 | 1,090 | ||||||||||
Life Insurance Segment [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | 6,128 | 5,798 | 5,484 | ||||||||||
Group Protection Segment [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | 2,200 | 2,129 | 2,356 | ||||||||||
Other Operations [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | 263 | 301 | 335 | ||||||||||
Excluded realized gain (loss), pre-tax [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | (630) | (690) | (400) | ||||||||||
Amortization Of Deferred Gain On Business Sold Through Reinsurance, Pre-Tax [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | $ 1 | $ 3 | $ 3 | ||||||||||
[1] | Fourth quarter 2017 results include a goodwill impairment charge and the impacts of remeasuring our existing deferred tax balances for the impact of the Tax Act as disclosed elsewhere herein. |
Segment Information (Reconci143
Segment Information (Reconciliation Of Income (Loss) From Operations By Segment To Consolidated Net Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Net income (loss) | $ 963 | $ 385 | $ 321 | $ 349 | $ 470 | $ 359 | $ 219 | $ 125 | $ 2,018 | $ 1,173 | $ 1,173 | ||
Annuities Segment [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | 1,072 | 971 | 1,032 | ||||||||||
Retirement Plan Services Segment [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | 142 | 121 | 134 | ||||||||||
Life Insurance Segment [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | 522 | 464 | 296 | ||||||||||
Group Protection Segment [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | 103 | 65 | 42 | ||||||||||
Other Operations [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | (30) | (73) | |||||||||||
Excluded realized gain (loss), after tax, reconciling item [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | (409) | (450) | (260) | ||||||||||
Gain (loss) on early extinguishment of debt, after tax, reconciling item [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | (3) | ||||||||||||
Income (expense) from reserve changes (net of related amortization) on business sold through reinsurance, after tax, reconciling item [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | $ 2 | $ 2 | |||||||||||
Net Impact From Tax Cuts And Jobs Act [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | 1,526 | ||||||||||||
Impairment of intangibles, after tax [Member] | |||||||||||||
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract] | |||||||||||||
Income (loss) from continuing operations | $ (905) | ||||||||||||
[1] | Fourth quarter 2017 results include a goodwill impairment charge and the impacts of remeasuring our existing deferred tax balances for the impact of the Tax Act as disclosed elsewhere herein. |
Segment Information (Reconci144
Segment Information (Reconciliation of Net Investment Income From Segments to Consolidated) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Investment Income [Abstract] | |||
Total net investment income | $ 4,760 | $ 4,631 | $ 4,611 |
Annuities Segment [Member] | |||
Net Investment Income [Abstract] | |||
Total net investment income | 982 | 983 | 977 |
Retirement Plan Services Segment [Member] | |||
Net Investment Income [Abstract] | |||
Total net investment income | 893 | 855 | 842 |
Life Insurance Segment [Member] | |||
Net Investment Income [Abstract] | |||
Total net investment income | 2,496 | 2,403 | 2,390 |
Group Protection Segment [Member] | |||
Net Investment Income [Abstract] | |||
Total net investment income | 167 | 176 | 183 |
Other Operations [Member] | |||
Net Investment Income [Abstract] | |||
Total net investment income | $ 222 | $ 214 | $ 219 |
Segment Information (Reconci145
Segment Information (Reconciliation of DAC VOBA Amortization From Segments to Consolidated) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Amortization of DAC and VOBA, Net of Interest | |||
Amortization of DAC and VOBA, net of interest | $ 962 | $ 1,172 | $ 1,199 |
Annuities Segment [Member] | |||
Amortization of DAC and VOBA, Net of Interest | |||
Amortization of DAC and VOBA, net of interest | 402 | 310 | 284 |
Retirement Plan Services Segment [Member] | |||
Amortization of DAC and VOBA, Net of Interest | |||
Amortization of DAC and VOBA, net of interest | 26 | 27 | 29 |
Life Insurance Segment [Member] | |||
Amortization of DAC and VOBA, Net of Interest | |||
Amortization of DAC and VOBA, net of interest | 455 | 709 | 806 |
Group Protection Segment [Member] | |||
Amortization of DAC and VOBA, Net of Interest | |||
Amortization of DAC and VOBA, net of interest | $ 79 | $ 126 | $ 80 |
Segment Information (Reconci146
Segment Information (Reconciliation of Federal Income Tax Expense (Benefit) From Segments to Consolidated) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | $ (1,287) | $ 267 | $ 295 |
Annuities Segment [Member] | |||
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | 198 | 261 | 281 |
Retirement Plan Services Segment [Member] | |||
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | 50 | 43 | 46 |
Life Insurance Segment [Member] | |||
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | 236 | 210 | 118 |
Group Protection Segment [Member] | |||
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | 55 | 35 | 23 |
Other Operations [Member] | |||
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | (78) | (42) | (33) |
Excluded Realized Gain (Loss) [Member] | |||
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | (220) | (241) | (141) |
Gain (loss) on early extinguishment of debt, tax, reconciling item [Member] | |||
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | (2) | ||
Reserve changes (net of related amortization) on business sold through reinsurance [Member] | |||
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | $ 1 | $ 1 | |
Net Impact From Tax Cuts And Jobs Act [Member] | |||
Reconciliation of Federal Income Tax Expense (Benefit) from Segments to Consolidated [Abstract] | |||
Income tax expense (benefit) | $ (1,526) |
Segment Information (Reconci147
Segment Information (Reconciliation of Assets From Segments to Consolidated Balance Sheet) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule Of Segment Reporting And Reconcilliation [Line Items] | ||
Total assets | $ 281,872 | $ 262,051 |
Annuities Segment [Member] | ||
Schedule Of Segment Reporting And Reconcilliation [Line Items] | ||
Total assets | 144,035 | 132,956 |
Retirement Plan Services Segment [Member] | ||
Schedule Of Segment Reporting And Reconcilliation [Line Items] | ||
Total assets | 37,077 | 34,346 |
Life Insurance Segment [Member] | ||
Schedule Of Segment Reporting And Reconcilliation [Line Items] | ||
Total assets | 81,565 | 75,868 |
Group Protection Segment [Member] | ||
Schedule Of Segment Reporting And Reconcilliation [Line Items] | ||
Total assets | 4,033 | 4,007 |
Other Operations [Member] | ||
Schedule Of Segment Reporting And Reconcilliation [Line Items] | ||
Total assets | $ 15,162 | $ 14,874 |
Supplemental Disclosures of 148
Supplemental Disclosures of Cash Flow (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Disclosures of Cash Flow Data [Abstract] | |||
Interest paid | $ 123 | $ 91 | $ 106 |
Income taxes paid (received) | 215 | 121 | 125 |
Significant non-cash investing and financing transactions: | |||
Acquisition of note receivable from affiliate | 74 | 42 | 54 |
Other assets received in our financing transaction | 252 | ||
Carrying value of asset, Exchanges of surplus note for promissory note with affiliate | 109 | 124 | 123 |
Carrying value of liability, Exchange of surplus note for promissory note with affiliate | (109) | (124) | (123) |
Net asset (liability) from exchange |
Quarterly Results of Operati149
Quarterly Results of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Results of Operations [Abstract] | |||||||||||||
Total revenues | $ 3,413 | $ 3,269 | $ 3,237 | $ 3,229 | $ 3,347 | $ 3,181 | $ 2,930 | $ 2,885 | $ 13,148 | $ 12,343 | $ 12,683 | ||
Total expenses | 3,887 | 2,809 | 2,840 | 2,881 | 2,706 | 2,739 | 2,677 | 2,781 | 12,417 | 10,903 | 11,215 | ||
Net income (loss) | $ 963 | $ 385 | $ 321 | $ 349 | $ 470 | $ 359 | $ 219 | $ 125 | $ 2,018 | $ 1,173 | $ 1,173 | ||
[1] | Fourth quarter 2017 results include a goodwill impairment charge and the impacts of remeasuring our existing deferred tax balances for the impact of the Tax Act as disclosed elsewhere herein. |
Transactions With Affiliates (N
Transactions With Affiliates (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Transactions With Affiliates [Abstract] | ||
Borrowing and lending limit, percent of admitted assets | 3.00% | |
Line of credit beneficiary amount | $ 610 | $ 320 |
Transactions With Affiliates (B
Transactions With Affiliates (Balance Sheet Transactions With Affiliates) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Assets | $ 281,872 | $ 262,051 |
Liabilities | 263,427 | 246,231 |
Accrued Inter-Company Interest [Member] | Accrued Investment Income [Member] | ||
Related Party Transaction [Line Items] | ||
Assets | 8 | 8 |
Accrued Inter-Company Interest [Member] | Other Liabilities [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | 29 | 26 |
Bonds [Member] | Fixed Maturity Securities [Member] | ||
Related Party Transaction [Line Items] | ||
Assets | 1,444 | 1,611 |
Limited Partnerships [Member] | Other Investments [Member] | ||
Related Party Transaction [Line Items] | ||
Assets | (66) | |
Ceded Reinsurance Contracts [Member] | Deferred Acquisition Costs And Value Of Business Acquired [Member] | ||
Related Party Transaction [Line Items] | ||
Assets | (188) | (191) |
Ceded Reinsurance Contracts [Member] | Reinsurance Recoverables [Member] | ||
Related Party Transaction [Line Items] | ||
Assets | 2,152 | 2,148 |
Ceded Reinsurance Contracts [Member] | Reinsurance Related Embedded Derivatives [Member] | ||
Related Party Transaction [Line Items] | ||
Assets | 8 | 112 |
Ceded Reinsurance Contracts [Member] | Other Assets [Member] | ||
Related Party Transaction [Line Items] | ||
Assets | 39 | 207 |
Ceded Reinsurance Contracts [Member] | Other Liabilities [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | 984 | 84 |
Ceded Reinsurance Contracts [Member] | Other Contract Holder Funds [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | (47) | (47) |
Ceded Reinsurance Contracts [Member] | Funds Withheld Reinsurance Liabilities [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | 2,587 | 2,851 |
Ceded Reinsurance Contracts [Member] | Deferred Gain On Business Sold Through Reinsurance [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | (166) | (171) |
Cash Management Agreement [Member] | Other Assets [Member] | ||
Related Party Transaction [Line Items] | ||
Assets | 441 | 164 |
Service Agreement [Member] | Other Assets [Member] | ||
Related Party Transaction [Line Items] | ||
Assets | 15 | 27 |
Service Agreement [Member] | Other Liabilities [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | 8 | 34 |
Assumed Reinsurance Contracts [Member] | Future Contract Benefits [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | 32 | 31 |
Assumed Reinsurance Contracts [Member] | Other Contract Holder Funds [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | 400 | 403 |
Inter-Company Debt [Member] | Short-term Debt [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | 10 | 280 |
Inter-Company Debt [Member] | Long-term Debt [Member] | ||
Related Party Transaction [Line Items] | ||
Liabilities | $ 2,374 | $ 2,549 |
Transactions With Affiliates (C
Transactions With Affiliates (Comprehensive Income (Loss) Transactions With Affiliates) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||||||||||
Revenues | $ 3,413 | $ 3,269 | $ 3,237 | $ 3,229 | $ 3,347 | $ 3,181 | $ 2,930 | $ 2,885 | $ 13,148 | $ 12,343 | $ 12,683 | ||
Benefits and expenses | $ 3,887 | $ 2,809 | $ 2,840 | $ 2,881 | $ 2,706 | $ 2,739 | $ 2,677 | $ 2,781 | 12,417 | 10,903 | 11,215 | ||
Amortization Of Deferred Gain On Business Sold Through Reinsurance, Pre-Tax [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revenues | (5) | (5) | (5) | ||||||||||
Benefits [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Benefits and expenses | (299) | (424) | (478) | ||||||||||
Premiums Received On Assumed (Paid On Ceded) Reinsurance Contract [Member] | Insurance Premiums [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revenues | (393) | (389) | (411) | ||||||||||
Fees For Management Of General Account [Member] | Net Investment Income [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revenues | (100) | (117) | (109) | ||||||||||
Ceded Funds Withheld Treaties [Member] | Net Investment Income [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revenues | (84) | (69) | (62) | ||||||||||
Ceded Reinsurance Contracts [Member] | Realized Gain (Loss) [Member] | GLB Reserves Embedded Derivative [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revenues | (1,055) | (516) | 664 | ||||||||||
Ceded Reinsurance Contracts [Member] | Realized Gain (Loss) [Member] | Reinsurance Related Embedded Derivatives [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revenues | 951 | 488 | (881) | ||||||||||
Ceded Reinsurance Contracts [Member] | Realized Gain (Loss) [Member] | Other Gains (Losses) [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revenues | (150) | (93) | 157 | ||||||||||
Ceded Reinsurance Contracts [Member] | Commissions And Other Expenses [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Benefits and expenses | (12) | (14) | (15) | ||||||||||
Service Agreement [Member] | Commissions And Other Expenses [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Benefits and expenses | 3 | 76 | 42 | ||||||||||
Assumed Reinsurance Contracts [Member] | Interest Credited [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Benefits and expenses | 67 | 61 | 59 | ||||||||||
Inter-Company Debt [Member] | Net Investment Income [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revenues | 42 | 38 | 31 | ||||||||||
Inter-Company Debt [Member] | Interest and Debt Expense [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Benefits and expenses | $ 120 | $ 111 | $ 102 | ||||||||||
[1] | Fourth quarter 2017 results include a goodwill impairment charge and the impacts of remeasuring our existing deferred tax balances for the impact of the Tax Act as disclosed elsewhere herein. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Jan. 19, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | |||||
Reinsurance ceded | $ 1,817 | $ 1,728 | $ 1,652 | ||
Subsequent Event [Member] | Liberty Transaction [Member] | |||||
Subsequent Event [Line Items] | |||||
Acquisition agreement date | Jan. 19, 2018 | ||||
Subsequent Event [Member] | Scenario, Forecast [Member] | Liberty Transaction [Member] | |||||
Subsequent Event [Line Items] | |||||
Consideration for acquisition | $ 3,300 | ||||
Net investment | 1,400 | ||||
Purchase price | 1,000 | ||||
Required capital | 425 | ||||
Individual life and annutiy | 410 | ||||
Excess capital | 1,200 | ||||
Tax Items | 211 | ||||
Reinsurance ceded | $ 13,000 |
SCHEDULE I - CONSOLIDATED SU154
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS (Details) $ in Millions | Dec. 31, 2017USD ($) | |
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | $ 103,993 | |
Carrying Value | 111,022 | |
Trading securities | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 1,348 | |
Fair Value | 1,533 | |
Carrying Value | 1,533 | |
Mortgage Loans On Real Estate [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 10,662 | |
Fair Value | 10,773 | |
Carrying Value | 10,662 | |
Real estate [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 11 | |
Carrying Value | 11 | |
Policy loans [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 2,379 | |
Carrying Value | 2,379 | |
Derivative instruments [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 1,538 | [1] |
Fair Value | 845 | [1] |
Carrying Value | 845 | [1] |
Derivative Liabilities | 455 | |
Other Investments [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 2,006 | |
Fair Value | 2,006 | |
Carrying Value | 2,006 | |
Fixed Maturity Securities [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 85,802 | [2] |
Fair Value | 93,340 | [2] |
Carrying Value | 93,340 | [2] |
Fixed Maturity Securities [Member] | Hybrid And Redeemable Preferred Securities [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 561 | [2] |
Fair Value | 624 | [2] |
Carrying Value | 624 | [2] |
Fixed Maturity Securities [Member] | Bonds [Member] | U.S. government and government agencies and authorities [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 497 | [2] |
Fair Value | 533 | [2] |
Carrying Value | 533 | [2] |
Fixed Maturity Securities [Member] | Bonds [Member] | ABS [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 5,399 | [2] |
Fair Value | 5,618 | [2] |
Carrying Value | 5,618 | [2] |
Fixed Maturity Securities [Member] | Bonds [Member] | State And Municipal Bonds [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 4,033 | [2] |
Fair Value | 4,959 | [2] |
Carrying Value | 4,959 | [2] |
Fixed Maturity Securities [Member] | Bonds [Member] | Foreign governments [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 391 | [2] |
Fair Value | 446 | [2] |
Carrying Value | 446 | [2] |
Fixed Maturity Securities [Member] | Bonds [Member] | Public utilities [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 12,356 | [2] |
Fair Value | 13,763 | [2] |
Carrying Value | 13,763 | [2] |
Fixed Maturity Securities [Member] | Bonds [Member] | All other corporate bonds [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 62,565 | [2] |
Fair Value | 67,397 | [2] |
Carrying Value | 67,397 | [2] |
Equity Securities [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 247 | [2] |
Fair Value | 246 | [2] |
Carrying Value | 246 | [2] |
Equity Securities [Member] | Common Stock [Member] | Banks, trusts, and insurance companies [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 184 | [2] |
Fair Value | 188 | [2] |
Carrying Value | 188 | [2] |
Equity Securities [Member] | Common Stock [Member] | Industrial, miscellaneous and all other [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 44 | [2] |
Fair Value | 33 | [2] |
Carrying Value | 33 | [2] |
Equity Securities [Member] | Common Stock [Member] | Nonredeemable preferred securities [Member] | ||
Summary of investments, other than investments in related parties [Line Items] | ||
Cost | 19 | [2] |
Fair Value | 25 | [2] |
Carrying Value | $ 25 | [2] |
[1] | Derivative investment assets were offset by $455 million in derivative liabilities reflected in other liabilities on our Consolidated Balance Sheets. | |
[2] | Investments deemed to have declines in value that are other-than-temporary are written down or reserved for to reduce the carrying value to their estimated realizable value. |
SCHEDULE III - CONDENSED SUPPLE
SCHEDULE III - CONDENSED SUPPLEMENTARY INSURANCE INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Supplementary Insurance Information, by Segment [Line Items] | ||||
DAC and VOBA | $ 8,408 | $ 9,143 | $ 9,493 | |
Future Contract Benefits | 22,063 | 20,681 | 19,893 | |
Unearned Premiums | [1] | |||
Other Contract Holder Funds | 79,481 | 78,106 | 76,483 | |
Insurance Premiums | [2] | 3,018 | 2,579 | 2,825 |
Net Investment Income | 4,760 | 4,631 | 4,611 | |
Benefits and Interest Credited | 7,376 | 6,774 | 7,001 | |
Amortization of DAC and VOBA | 962 | 1,172 | 1,199 | |
Other Operating Expenses | 3,174 | 2,957 | 3,015 | |
Premiums Written | ||||
Annuities Segment [Member] | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
DAC and VOBA | 3,806 | 3,836 | 3,793 | |
Future Contract Benefits | 1,942 | 2,485 | 2,095 | |
Unearned Premiums | [1] | |||
Other Contract Holder Funds | 21,739 | 21,227 | 21,182 | |
Insurance Premiums | [2] | 475 | 162 | 246 |
Net Investment Income | 982 | 983 | 977 | |
Benefits and Interest Credited | 1,077 | 972 | 1,008 | |
Amortization of DAC and VOBA | 402 | 310 | 284 | |
Other Operating Expenses | 1,285 | 1,196 | 1,210 | |
Premiums Written | ||||
Retirement Plan Services Segment [Member] | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
DAC and VOBA | 197 | 203 | 217 | |
Future Contract Benefits | 4 | 4 | 4 | |
Unearned Premiums | [1] | |||
Other Contract Holder Funds | 18,719 | 17,878 | 16,583 | |
Insurance Premiums | [2] | (6) | (7) | |
Net Investment Income | 893 | 855 | 842 | |
Benefits and Interest Credited | 539 | 514 | 497 | |
Amortization of DAC and VOBA | 26 | 27 | 29 | |
Other Operating Expenses | 395 | 387 | 384 | |
Premiums Written | ||||
Life Insurance Segment [Member] | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
DAC and VOBA | 4,225 | 4,913 | 5,243 | |
Future Contract Benefits | 12,023 | 10,697 | 9,845 | |
Unearned Premiums | [1] | |||
Other Contract Holder Funds | 38,705 | 38,510 | 37,808 | |
Insurance Premiums | [2] | 546 | 481 | 422 |
Net Investment Income | 2,496 | 2,403 | 2,390 | |
Benefits and Interest Credited | 4,242 | 3,774 | 3,662 | |
Amortization of DAC and VOBA | 455 | 709 | 806 | |
Other Operating Expenses | 678 | 642 | 603 | |
Premiums Written | ||||
Group Protection Segment [Member] | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
DAC and VOBA | 180 | 191 | 240 | |
Future Contract Benefits | 2,262 | 2,280 | 2,347 | |
Unearned Premiums | [1] | |||
Other Contract Holder Funds | 161 | 168 | 170 | |
Insurance Premiums | [2] | 1,998 | 1,940 | 2,163 |
Net Investment Income | 167 | 176 | 183 | |
Benefits and Interest Credited | 1,352 | 1,324 | 1,637 | |
Amortization of DAC and VOBA | 79 | 126 | 80 | |
Other Operating Expenses | 611 | 579 | 574 | |
Premiums Written | ||||
Other Operations [Member] | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Future Contract Benefits | 5,832 | 5,215 | 5,602 | |
Unearned Premiums | [1] | |||
Other Contract Holder Funds | 157 | 323 | 740 | |
Insurance Premiums | [2] | (1) | 2 | 1 |
Net Investment Income | 222 | 214 | 219 | |
Benefits and Interest Credited | 166 | 190 | 197 | |
Other Operating Expenses | 205 | 153 | 244 | |
Premiums Written | ||||
[1] | Unearned premiums are included in Column C, future contract benefits.Includes amounts ceded to LNBAR. | |||
[2] | Includes amounts ceded to LNBAR. |
SCHEDULE IV - CONSOLIDATED R156
SCHEDULE IV - CONSOLIDATED REINSURANCE (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Consolidated reinsurance, net [Abstract] | ||||
Premiums Earned, Net, Total | $ 3,018 | $ 2,579 | $ 2,825 | |
Embedded derivatives - Reinsurance related [Member] | ||||
Consolidated reinsurance, net [Abstract] | ||||
Gross Amount | 10,103 | 9,373 | 9,354 | |
Ceded to Other Companies | 1,817 | 1,728 | 1,652 | |
Assumed from Other Companies | 101 | 105 | 83 | |
Premiums Earned, Net, Total | 8,387 | 7,750 | 7,785 | |
Gross Amount, Life Insurance in Force | [1] | 1,014,841 | 969,563 | 962,457 |
Ceded to Other Companies, Life Insurance in Force | [1] | 240,034 | 237,520 | 233,309 |
Assumed from Other Companies, Life Insurance in Force | [1] | 13,476 | 14,522 | 14,969 |
Premiums, Net, Life Insurance in Force, Total | [1] | $ 788,283 | $ 746,565 | $ 744,117 |
Percentage of Amount Assumed to Net, Life Insurance in Force | [1] | 1.70% | 1.90% | 2.00% |
Life insurance and annuities [Member] | Embedded derivatives - Reinsurance related [Member] | ||||
Consolidated reinsurance, net [Abstract] | ||||
Gross Amount | [2] | $ 8,783 | $ 8,098 | $ 7,937 |
Ceded to Other Companies | [2] | 1,786 | 1,695 | 1,616 |
Assumed from Other Companies | [2] | 90 | 93 | 69 |
Premiums Earned, Net, Total | [2] | $ 7,087 | $ 6,496 | $ 6,390 |
Percentage of Amount Assumed to Net | [2] | 1.30% | 1.40% | 1.10% |
Accident and health insurance [Member] | Embedded derivatives - Reinsurance related [Member] | ||||
Consolidated reinsurance, net [Abstract] | ||||
Gross Amount | $ 1,320 | $ 1,275 | $ 1,417 | |
Ceded to Other Companies | 31 | 33 | 36 | |
Assumed from Other Companies | 11 | 12 | 14 | |
Premiums Earned, Net, Total | $ 1,300 | $ 1,254 | $ 1,395 | |
Percentage of Amount Assumed to Net | 0.80% | 1.00% | 1.00% | |
[1] | Includes Group Protection segment and Other Operations in-force amounts. | |||
[2] | Includes insurance fees on universal life and other interest-sensitive products. |