Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 09, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 033-28976 | |
Entity Registrant Name | RIVERSOURCE LIFE INSURANCE COMPANY | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-0823832 | |
Entity Address, Address Line One | 1099 Ameriprise Financial Center | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55474 | |
City Area Code | (612) | |
Local Phone Number | 671-3131 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 100,000 | |
Entity Central Index Key | 0000727892 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Investments: | |||
Available-for-Sale: Fixed maturities, at fair value (amortized cost: 2020, $20,338; 2019, $19,111) (net of allowance for credit losses: 2020, $13) | $ 22,619 | $ 20,902 | |
Mortgage loans, at amortized cost (net of allowance for loan losses: 2020, $28; 2019, $17) | 2,628 | 2,655 | |
Policy loans | 849 | 867 | |
Other Investments (net of allowance for credit losses: 2020, $7; 2019, $4) | 744 | 734 | |
Total investments | 26,840 | 25,158 | |
Cash and cash equivalents | 3,560 | 1,275 | |
Reinsurance recoverables (net of allowance for credit losses: 2020, $7) | 3,385 | [1] | 3,198 |
Other receivables | 1,690 | 1,713 | |
Accrued investment income | 178 | 169 | |
Deferred acquisition costs | 2,429 | 2,673 | |
Other assets | 6,338 | 5,332 | |
Separate account assets | 81,348 | 82,425 | |
Total assets | 125,768 | 121,943 | |
Liabilities: | |||
Policyholder account balances, future policy benefits and claims | 34,012 | 30,504 | |
Short-term borrowings | 200 | 201 | |
Line of credit with Ameriprise Financial, Inc. | 0 | 50 | |
Other liabilities | 6,743 | 5,427 | |
Separate account liabilities | 81,348 | 82,425 | |
Total liabilities | $ 122,303 | $ 118,607 | |
Common stock, par value (in dollars per share) | $ 30 | $ 30 | |
Common stock, shares outstanding (in shares) | 100,000 | 100,000 | |
Common stock, shares issued (in shares) | 100,000 | 100,000 | |
Common stock, shares authorized (in shares) | 100,000 | 100,000 | |
Shareholder's equity: | |||
Common Stock, Value, Issued | $ 3 | $ 3 | |
Additional paid-in capital | 2,466 | 2,466 | |
Retained earnings | 203 | 293 | |
Accumulated other comprehensive income, net of tax | 793 | 574 | |
Total shareholder's equity | 3,465 | 3,336 | |
Total liabilities and shareholder's equity | $ 125,768 | $ 121,943 | |
[1] | Prior to January 1, 2020, the allowance for credit losses is not applicable to Available-for-Sale securities and Reinsurance recoverables. See Notes 2, 3, 6 and 7 for more information. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | |||
Statement of Financial Position [Abstract] | |||||
Fixed maturities, amortized cost | $ 20,338,000,000 | $ 19,111,000,000 | |||
Available-for-sale: Fixed maturities, allowance for credit losses | 13,000,000 | [1] | 0 | [2] | |
Mortgage loans, allowance for loan losses | 28,000,000 | 17,000,000 | |||
Investments, allowance for credit losses | 7,000,000 | $ 4,000,000 | |||
Reinsurance recoverables, allowance for credit loss | [1] | $ 7,000,000 | |||
Common stock, par value (in dollars per share) | $ 30 | $ 30 | |||
Common stock, shares authorized (in shares) | 100,000 | 100,000 | |||
Common stock, shares issued (in shares) | 100,000 | 100,000 | |||
Common stock, shares outstanding (in shares) | 100,000 | 100,000 | |||
[1] | Prior to January 1, 2020, the allowance for credit losses is not applicable to Available-for-Sale securities and Reinsurance recoverables. See Notes 2, 3, 6 and 7 for more information. | ||||
[2] | Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired. There is no adoption impact due to the prospective transition for Available-for-Sale securities. |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | ||||
Premiums | $ 82 | $ 96 | $ 256 | $ 301 |
Net investment income | 212 | 222 | 647 | 712 |
Policy and contract charges | 535 | 539 | 1,529 | 1,510 |
Other revenues | 122 | 120 | 357 | 343 |
Net realized investment gains (losses) | 1 | (11) | (16) | (1) |
Total revenues | 952 | 966 | 2,773 | 2,865 |
Benefits and expenses | ||||
Benefits, claims, losses and settlement expenses | 1,101 | 332 | 820 | 1,091 |
Interest credited to fixed accounts | 170 | 127 | 523 | 517 |
Amortization of deferred acquisition costs | 83 | 96 | 338 | 141 |
Other insurance and operating expenses | 163 | 172 | 490 | 513 |
Total benefits and expenses | 1,517 | 727 | 2,171 | 2,262 |
Pretax income (loss) | (565) | 239 | 602 | 603 |
Income tax provision (benefit) | (131) | 8 | 35 | 17 |
Net Income | $ (434) | $ 231 | $ 567 | $ 586 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ (434) | $ 231 | $ 567 | $ 586 |
Other comprehensive income (loss), net of tax: | ||||
Net unrealized gains (losses) on securities | 88 | 81 | 219 | 561 |
Total other comprehensive income (loss), net of tax | 88 | 81 | 219 | 561 |
Total comprehensive income | $ (346) | $ 312 | $ 786 | $ 1,147 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY - USD ($) $ in Millions | Total | Common shares [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive income (loss) [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Retained earnings [Member] |
Beginning balance at Dec. 31, 2018 | $ 3,572 | $ 3 | $ 2,466 | $ 1,058 | $ 45 | ||
Beginning balance (Premium Amortization on Purchased Callable Debt Securities Guidance [Member]) at Dec. 31, 2018 | $ (2) | $ (2) | |||||
Comprehensive income: | |||||||
Net Income | 586 | 586 | |||||
Other comprehensive income (loss), net of tax | 561 | 561 | |||||
Total comprehensive income | 1,147 | ||||||
Cash dividends to Ameriprise Financial, Inc. | (850) | (850) | |||||
Ending balance at Sep. 30, 2019 | 3,867 | 3 | 2,466 | 792 | 606 | ||
Beginning balance at Jun. 30, 2019 | 3,855 | 3 | 2,466 | 861 | 525 | ||
Comprehensive income: | |||||||
Net Income | 231 | 231 | |||||
Other comprehensive income (loss), net of tax | 81 | 81 | |||||
Total comprehensive income | 312 | ||||||
Cash dividends to Ameriprise Financial, Inc. | (300) | (300) | |||||
Ending balance at Sep. 30, 2019 | 3,867 | 3 | 2,466 | 792 | 606 | ||
Beginning balance at Dec. 31, 2019 | 3,336 | 3 | 2,466 | 293 | 574 | ||
Beginning balance (Current expected credit losses guidance [Member]) at Dec. 31, 2019 | $ (7) | $ (7) | |||||
Comprehensive income: | |||||||
Net Income | 567 | 567 | |||||
Other comprehensive income (loss), net of tax | 219 | 219 | |||||
Total comprehensive income | 786 | ||||||
Cash dividends to Ameriprise Financial, Inc. | (650) | (650) | |||||
Ending balance at Sep. 30, 2020 | 3,465 | 3 | 2,466 | 203 | 793 | ||
Beginning balance at Jun. 30, 2020 | 3,961 | 3 | 2,466 | 787 | 705 | ||
Comprehensive income: | |||||||
Net Income | (434) | (434) | |||||
Other comprehensive income (loss), net of tax | 88 | 88 | |||||
Total comprehensive income | (346) | ||||||
Cash dividends to Ameriprise Financial, Inc. | (150) | (150) | |||||
Ending balance at Sep. 30, 2020 | $ 3,465 | $ 3 | $ 2,466 | $ 203 | $ 793 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net Income | $ 567 | $ 586 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation, amortization and accretion, net | (19) | (13) |
Deferred income tax (benefit) expense | 186 | (219) |
Contractholder and policyholder charges, non-cash | (288) | (284) |
Loss from equity method investments | 58 | 58 |
Net realized investment (gains) losses | (9) | (14) |
Impairments and provision for loan losses | 25 | 15 |
Change in operating assets and liabilities: | ||
Deferred acquisition costs | 183 | (37) |
Policyholder account balances, future policy benefits and claims, net | 3,540 | 1,370 |
Derivatives, net of collateral | 268 | 23 |
Reinsurance recoverables | (156) | (55) |
Other receivables | 53 | 22 |
Accrued investment income | (9) | 10 |
Current income tax expense (benefit) | (82) | 63 |
Other, net | 93 | 108 |
Net cash provided by (used in) operating activities | 4,410 | 1,633 |
Available-for-Sale securities: | ||
Proceeds from sales | 84 | 209 |
Maturities, sinking fund payments and calls | 1,788 | 1,738 |
Purchases | (3,079) | (1,064) |
Proceeds from sales, maturities and repayments of mortgage loans | 138 | 171 |
Funding of mortgage loans | (120) | (208) |
Proceeds from sales and collections of other investments | 92 | 100 |
Purchase of other investments | (147) | (124) |
Purchase of equipment and software | (7) | (7) |
Change in policy loans, net | 18 | (3) |
Cash paid for deposit receivable | (3) | (348) |
Cash received for deposit receivable | 74 | 74 |
Advance on line of credit to Ameriprise Financial, Inc. | (702) | 0 |
Repayment from Ameriprise Financial, Inc. on line of credit | 702 | 0 |
Cash received from written options with deferred premiums | 129 | 72 |
Cash paid for written options with deferred premiums | (292) | (125) |
Other, net | (67) | 33 |
Net cash provided by (used in) investing activities | (1,392) | 518 |
Policyholder account balances: | ||
Deposits and other additions | 1,202 | 1,620 |
Net transfers from (to) separate accounts | (63) | (46) |
Surrenders and other benefits | (1,035) | (1,320) |
Proceeds from line of credit with Ameriprise Financial, Inc. | 6 | 3 |
Payments on line of credit with Ameriprise Financial, Inc. | (56) | (3) |
Cash received for purchased options with deferred premiums | 40 | 220 |
Cash paid for purchased options with deferred premiums | (177) | (142) |
Cash dividends to Ameriprise Financial, Inc. | (650) | (850) |
Net cash provided by (used in) financing activities | (733) | (518) |
Net increase (decrease) in cash and cash equivalents | 2,285 | 1,633 |
Cash and cash equivalents at beginning of period | 1,275 | 1,085 |
Cash and cash equivalents at end of period | 3,560 | 2,718 |
Supplemental Disclosures: | ||
Income taxes paid (received), net | (122) | 77 |
Interest paid on borrowings | 2 | 4 |
Non-cash investing activity: | ||
Partnership commitments not yet remitted | 4 | 4 |
Investments transferred in connection with reinsurance transaction | $ 0 | $ 1,265 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | RiverSource Life Insurance Company is a stock life insurance company with one wholly owned stock life insurance company subsidiary, RiverSource Life Insurance Co. of New York (“RiverSource Life of NY”). RiverSource Life Insurance Company is a wholly owned subsidiary of Ameriprise Financial, Inc. (“Ameriprise Financial”). • RiverSource Life Insurance Company is domiciled in Minnesota and holds Certificates of Authority in American Samoa, the District of Columbia and all states except New York. RiverSource Life Insurance Company issues insurance and annuity products. • RiverSource Life of NY is domiciled and holds a Certificate of Authority in New York. RiverSource Life of NY issues insurance and annuity products. RiverSource Life Insurance Company also wholly owns RiverSource Tax Advantaged Investments, Inc. (“RTA”). RTA is a stock company domiciled in Delaware and is a limited partner in affordable housing partnership investments. The accompanying Consolidated Financial Statements include the accounts of RiverSource Life Insurance Company and companies in which it directly or indirectly has a controlling financial interest (collectively, the “Company”). All intercompany transactions and balances have been eliminated in consolidation. The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for fair statement of the consolidated financial position and results of operations for the interim periods have been made. All adjustments made were of a normal recurring nature. The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission on February 26, 2020 (“2019 10-K”). The Company evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued. No subsequent events or transactions were identified. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | The Company adopted accounting standard, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments , on January 1, 2020. The significant accounting policies for Available-for-Sale Securities, Financing Receivables, and Reinsurance were updated as a result of adopting the new accounting standard. Refer to Note 3 for further details of the adoption. Available-for-Sale Securities Available-for-Sale securities are carried at fair value with unrealized gains (losses) recorded in accumulated other comprehensive income (“AOCI”), net of impacts to deferred acquisition costs (“DAC”), deferred sales inducement costs (“DSIC”), unearned revenue, benefit reserves, reinsurance recoverables and income taxes. Gains and losses are recognized on a trade date basis in the Consolidated Statements of Income upon disposition of the securities. Available-for-Sale securities are impaired when the fair value of an investment is less than its amortized cost. When an Available-for-Sale security is impaired, the Company first assesses whether or not: (i) it has the intent to sell the security (made a decision to sell) or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. If either of these conditions exist, the Company recognizes an impairment by reducing the book value of the security for the difference between the investment’s amortized cost and its fair value with a corresponding charge to earnings. Subsequent increases in the fair value of Available-for-Sale securities that occur in periods after a write-down has occurred are recorded as unrealized gains in other comprehensive income (“OCI”), while subsequent decreases in fair value would continue to be recorded as reductions of book value with a charge to earnings. For securities that do not meet the above criteria, the Company determines whether the decrease in fair value is due to a credit loss or due to other factors. The amount of impairment due to credit-related factors, if any, is recognized as an allowance for credit losses with a related charge to net realized investment gains (losses). The allowance for credit losses is limited to the amount by which the security’s amortized cost basis exceeds its fair value. The amount of the impairment related to other factors is recognized in OCI. Factors the Company considers in determining whether declines in the fair value of fixed maturity securities are due to credit-related factors include: (i) the extent to which the market value is below amortized cost; (ii) fundamental analysis of the liquidity, business prospects and overall financial condition of the issuer; and (iii) market events that could impact credit ratings, economic and business climate, litigation and government actions, and similar external business factors. If through subsequent evaluation there is a sustained increase in cash flows expected, both the allowance and related charge to earnings may be reversed to reflect the increase in expected principal and interest payments. However, for Available-for-Sale securities that recognized an impairment prior to January 1, 2020 by reducing the book value of the security, the difference between the new amortized cost basis and the improved cash flows expected to be collected is accreted as interest income. In order to determine the amount of the credit loss component for corporate debt securities, a best estimate of the present value of cash flows expected to be collected discounted at the security’s effective interest rate is compared to the amortized cost basis of the security. The significant inputs to cash flow projections consider potential debt restructuring terms, projected cash flows available to pay creditors and the Company’s position in the debtor’s overall capital structure. When assessing potential credit-related impairments for structured investments (e.g., residential mortgage backed securities, commercial mortgage backed securities and asset backed securities), the Company also considers credit-related factors such as overall deal structure and its position within the structure, quality of underlying collateral, delinquencies and defaults, loss severities, recoveries, prepayments and cumulative loss projections. Management has elected to exclude accrued interest in its measurement of the allowance for credit losses for Available-for-Sale securities. Accrued interest on Available-for-sale securities is recorded as earned in accrued investment income on the Consolidated Balance Sheets. Available-for-Sale securities are placed on nonaccrual status when the accrued balance becomes 90 days past due or earlier based on management’s evaluation of the facts and circumstances of each security under review. At this time all previously accrued interest is reversed through net investment income. Financing Receivables Financing receivables are comprised of commercial loans, policy loans, and deposit receivables. Commercial Loans Commercial loans include commercial mortgage loans and syndicated loans and are recorded at amortized cost less the allowance for loan losses. Commercial mortgage loans are recorded within mortgage loans and syndicated loans are recorded within other investments on the Consolidated Balance Sheets. Commercial mortgage loans are loans on commercial properties that are originated by the Company. Syndicated loans represent the Company’s investment in loan syndications originated by unrelated third parties. Interest income is accrued as earned on the unpaid principal balances of the loans. Interest income recognized on commercial mortgage loans and syndicated loans is recorded in net investment income on the Consolidated Statements of Income. Policy Loans Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is no allowance for credit losses. Interest income is accrued as earned on the unpaid principal balances of the loans. Interest income recognized on policy loans is recorded in accrued investment income on the Consolidated Statements of Income. Deposit Receivable For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability related to insurance risk in accordance with applicable accounting standards. If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Reinsurance deposits made are included in receivables. As amounts are received, consistent with the underlying contracts, the deposit receivable is adjusted. The deposit receivable is accreted using the interest method and the accretion is reported in other revenues. See Note 7 for additional information on financing receivables. Allowance for Credit Losses The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected over the asset’s expected life, considering past events, current conditions and reasonable and supportable forecasts of future economic conditions. Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. Estimates of expected credit losses consider both historical charge-off and recovery experience as well as management’s expectation of future charge-off and recovery levels. Expected losses related to risks other than credit risk are excluded from the allowance for credit losses. The allowance for credit losses is measured and recorded upon initial recognition of the loan, regardless of whether it is originated or purchased. The methods and information used to develop the allowance for credit losses for each class of financing receivable are discussed below. Commercial Loans The allowance for credit losses for commercial mortgage loans and syndicated loans utilizes a probability of default and loss severity approach to estimate lifetime expected credit losses. Actual historical default and loss severity data for each type of commercial loan is adjusted for current conditions and reasonable and supportable forecasts of future economic conditions to develop the probability of default and loss severity assumptions that are applied to the amortized cost basis of the loans over the expected life of each portfolio. The allowance for credit losses on commercial mortgage loans and syndicated loans is recorded through provisions charged to net realized investment gains (losses) and is reduced/increased by net charge-offs/recoveries. Management determines the adequacy of the allowance for credit losses based on the overall loan portfolio composition, recent and historical loss experience, and other pertinent factors, including when applicable, internal risk ratings, loan-to-value (“LTV”) ratios and occupancy rates, along with reasonable and supportable forecasts of economic and market conditions. This evaluation is inherently subjective as it requires estimates, which may be susceptible to significant change. While the Company may attribute portions of the allowance to specific loan pools as part of the allowance estimation process, the entire allowance is available to absorb losses expected over the life of the loan portfolio. Deposit receivable The allowance for credit losses is calculated on an individual reinsurer basis. The deposit receivable is collateralized by an underlying trust arrangement. Management evaluates the terms of the reinsurance and trust agreements, the nature of the underlying assets, and the potential for changes in the collateral value when considering the need for an allowance for credit losses. Nonaccrual Loans Commercial mortgage loans and syndicated loans are placed on nonaccrual status when either the collection of interest or principal has become 90 days past due or is otherwise considered doubtful of collection. When a loan is placed on nonaccrual status, unpaid accrued interest is reversed. Interest payments received on loans on nonaccrual status are generally applied to principal unless the remaining principal balance has been determined to be fully collectible. Management has elected to exclude accrued interest in its measurement of the allowance for credit losses for commercial mortgage loans and syndicated loans. Restructured Loans A loan is classified as a restructured loan when the Company makes certain concessionary modifications to contractual terms for borrowers experiencing financial difficulties. When the interest rate, minimum payments, and/or due dates have been modified in an attempt to make the loan more affordable to a borrower experiencing financial difficulties, the modification is considered a troubled debt restructuring. Modifications to loan terms do not automatically result in troubled debt restructurings (“TDRs”). Per the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus, modifications made on a good faith basis in response to the coronavirus disease 2019 (“COVID-19”) pandemic to borrowers who were not more than 30 days past due as of December 31, 2019, such as payment deferrals, extensions of repayment terms, fee waivers, or delays in payment that are not significant to the unpaid principal value of the loan, are not considered TDRs. Generally, performance prior to the restructuring or significant events that coincide with the restructuring are considered in assessing whether the borrower can meet the new terms which may result in the loan being returned to accrual status at the time of the restructuring or after a performance period. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan remains on nonaccrual status. Charge-off and Foreclosure Charge-offs are recorded when the Company concludes that all or a portion of the commercial mortgage loan or syndicated loan is uncollectible. Factors used by the Company to determine whether all amounts due on commercial mortgage loans will be collected, include but are not limited to, the financial condition of the borrower, performance of the underlying properties, collateral and/or guarantees on the loan, and the borrower’s estimated future ability to pay based on property type and geographic location. Factors used by the Company to determine whether all amounts due on syndicated loans will be collected, include but are not limited to the borrower’s financial condition, industry outlook, and internal risk ratings based on rating agency data and internal analyst expectations. If it is determined that foreclosure on a commercial mortgage loan is probable and the fair value is less than the current loan balance, expected credit losses are measured as the difference between the amortized cost basis of the asset and fair value less estimated selling costs. Upon foreclosure, the commercial mortgage loan and related allowance are reversed, and the foreclosed property is recorded as real estate owned in other assets. Reinsurance Policyholder account balances, future policy benefits and claims recoverable under reinsurance contracts are recorded within receivables, net of the allowance for credit losses. The Company evaluates the financial condition of its reinsurers prior to entering into new reinsurance contracts and on a periodic basis during the contract term. The allowance for credit losses related to reinsurance recoverable is based on applying observable industry data including insurer ratings, default and loss severity data to the Company’s reinsurance recoverable balances. Management evaluates the results of the calculation and considers differences between the industry data and the Company’s data. Such differences include the fact that the Company has no actual history of losses and the fact that industry data may contain non-life insurers. This evaluation is inherently subjective as it requires estimates, which may be susceptible to significant change given the long-term nature of these receivables. In addition, the Company has a reinsurance protection agreement that provides credit protections for its reinsured long term care business. The allowance for credit losses on reinsurance recoverable is recorded through provisions charged` to benefits, claims, losses and settlement expenses on the Consolidated Statements of Income. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Adoption of New Accounting Standards Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the Financial Accounting Standards Board (“FASB”) updated the accounting standards related to disclosures for fair value measurements. The update eliminates the following disclosures: 1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, 2) the policy of timing of transfers between levels of the fair value hierarchy, and 3) the valuation processes for Level 3 fair value measurements. The new disclosures include changes in unrealized gains and losses for the period included in OCI for recurring Level 3 fair value measurements of instruments held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated. The new disclosures are required on a prospective basis; all other provisions should be applied retrospectively. The update is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for the entire standard or only the provisions to eliminate or modify disclosure requirements. The Company early adopted the provisions of the standard to eliminate or modify disclosure requirements in the fourth quarter of 2018. The Company adopted the provisions of the standard to include new disclosures on January 1, 2020. The update does not have an impact on the Company’s consolidated financial condition or results of operations. See Note 12 for additional disclosures on fair value measurements. Intangibles – Goodwill and Other – Internal-Use Software – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB updated the accounting standards related to customer’s accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. The update requires implementation costs for a CCA to be evaluated for capitalization using the same approach as implementation costs associated with internal-use software. The update also addresses presentation, measurement and impairment of capitalized implementation costs in a CCA that is a service contract. The update requires new disclosures on the nature of hosting arrangements that are service contracts, significant judgements made when applying the guidance and quantitative disclosures, including amounts capitalized, amortized and impaired. The update is effective for interim and annual periods beginning after December 15, 2019, and can be applied either prospectively or retrospectively. The Company adopted the standard using a prospective approach on January 1, 2020. The adoption did not have an impact on the Company’s consolidated financial condition or results of operations. Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments In June 2016, the FASB updated the accounting standards related to accounting for credit losses on certain types of financial instruments. The update replaces the current incurred loss model for estimating credit losses with a new model that requires an entity to estimate the credit losses expected over the life of the asset. At adoption, the initial estimate of the expected credit losses will be recorded through retained earnings and subsequent changes in the estimate will be reported in current period earnings and recorded through an allowance for credit losses on the balance sheet. The credit loss model for Available-for-Sale debt securities did not change; however, the credit loss calculation and subsequent recoveries are required to be recorded through an allowance. The standard is effective for interim and annual periods beginning after December 15, 2019. A modified retrospective cumulative adjustment to retained earnings should be recorded as of the first reporting period in which the guidance is effective for loans, receivables, and other financial instruments subject to the new expected credit loss model. Prospective adoption is required for establishing an allowance related to Available-for-Sale debt securities, certain beneficial interests, and financial assets purchased with a more-than-insignificant amount of credit deterioration since origination. The Company adopted the standard on January 1, 2020. The adoption of this update did not have a material impact on the Company’s consolidated financial condition or results of operations. Leases – Recognition of Lease Assets and Liabilities on Balance Sheet In February 2016, the FASB updated the accounting standards for leases. The update was issued to increase transparency and comparability for the accounting of lease transactions. The standard requires most lease transactions for lessees to be recorded on the balance sheet as lease assets and lease liabilities and both quantitative and qualitative disclosures about leasing arrangements. The standard was effective for interim and annual periods beginning after December 15, 2018. Entities had the option to adopt the standard using a modified retrospective approach at either the beginning of the earliest period presented or as of the date of adoption. The Company adopted the standard using a modified retrospective approach as of January 1, 2019. The Company also elected the package of practical expedients permitted under the transition guidance within the accounting standard that allows entities to carryforward their historical lease classification and to not reassess contracts for embedded leases among other things. The adoption did not have a material impact on the Company’s consolidated financial condition or results of operations. Income Statement – Reporting Comprehensive Income – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB updated the accounting standards related to the presentation of tax effects stranded in AOCI. The update allows a reclassification from AOCI to retained earnings for tax effects stranded in AOCI resulting from the legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”). The election of the update was optional. The update was effective for fiscal years beginning after December 15, 2018. Entities could record the impacts either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. The Company adopted the standard on January 1, 2019 and elected not to reclassify the stranded tax effects in AOCI. Derivatives and Hedging – Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB updated the accounting standards to amend the hedge accounting recognition and presentation requirements. The objectives of the update are to better align the financial reporting of hedging relationships to the economic results of an entity’s risk management activities and simplify the application of the hedge accounting guidance. The update also adds new disclosures and amends existing disclosure requirements. The standard was effective for interim and annual periods beginning after December 15, 2018, and was required to be applied on a modified retrospective basis. The Company adopted the standard on January 1, 2019. The adoption did not have an impact on the Company’s consolidated financial condition or results of operations. Receivables – Nonrefundable Fees and Other Costs – Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB updated the accounting standards to shorten the amortization period for certain purchased callable debt securities held at a premium. Under previous guidance, premiums were generally amortized over the contractual life of the security. The amendments require the premium to be amortized to the earliest call date. The update applies to securities with explicit, non-contingent call features that are callable at fixed prices and on preset dates. The standard was effective for interim and annual periods beginning after December 15, 2018, and was required to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted the standard on January 1, 2019. The adoption did not have a material impact on the Company’s consolidated financial condition or results of operations. Future Adoption of New Accounting Standards Reference Rate Reform – Expedients for Contract Modifications In March 2020, the FASB updated the accounting standards to provide optional expedients and exceptions for applying GAAP to contracts, hedging or other transactions that are affected by reference rate reform (i.e., the elimination of LIBOR). The following expedients are provided for modified contracts whose reference rate is changed: 1) receivables and debt contracts are accounted for prospectively by adjusting the effective interest rate, 2) leases are accounted for as a continuation of the existing contracts with no reassessments of the lease classification and discount rate or remeasurements of lease payments that otherwise would be required, and 3) an entity is not required to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract. When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions. The Company is currently evaluating the impact of electing to adopt the standard on its consolidated financial condition and results of operations. Income Taxes – Simplifying the Accounting for Income Taxes In December 2019, the FASB updated the accounting standards to simplify the accounting for income taxes. The update eliminates certain exceptions to accounting principles related to intraperiod tax allocation (prospective basis), deferred tax liabilities related to outside basis differences (modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption) and year-to-date losses in interim periods (prospective basis). The update also amends existing guidance related to situations when an entity receives a step-up in the tax basis of goodwill (prospective basis), allocation of income tax expense when members of a consolidated tax filing group issue separate financial statements (retrospective basis for all periods presented), interim recognition of enactment of tax laws or rate changes (prospective basis) and franchise taxes and other taxes partially based on income (retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption). The standard is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The method of adoption is noted parenthetically after each amendment above. The adoption of the standard is not expected to have an impact on the Company’s consolidated financial condition or results of operations. Financial Services – Insurance – Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB updated the accounting standard related to long-duration insurance contracts. The guidance revises key elements of the measurement models and disclosure requirements for long-duration insurance contracts issued by insurers and reinsurers. The guidance establishes a significant new category of benefit features called market risk benefits that protect the contractholder from other-than-nominal capital market risk and expose the insurer to that risk. Insurers will have to measure market risk benefits at fair value. Market risk benefits include variable annuity guaranteed benefits (i.e. guaranteed minimum death, withdrawal, withdrawal for life, accumulation and income benefits). The portion of the change in fair value attributable to a change in the instrument-specific credit risk of market risk benefits in a liability position will be recorded in OCI. Significant changes also relate to the measurement of the liability for future policy benefits for nonparticipating traditional long-duration insurance contracts and immediate annuities with a life contingent feature include the following: • Insurers will be required to review and update the cash flow assumptions used to measure the liability for future policy benefits rather than using assumptions locked in at contract inception. The review of assumptions to measure the liability for all future policy benefits will be required annually at the same time each year, or more frequently if suggested by experience. The effect of updating assumptions will be measured on a retrospective catch-up basis and presented separate from the ongoing policyholder benefit expense in the statement of operations in the period the update is made. This new unlocking process will be required for the Company’s term and whole life insurance, disability income, long term care insurance and immediate annuities with a life contingent feature. • The discount rate used to measure the liability for future policy benefits will be standardized. The current requirement to use a discount rate reflecting expected investment yields will change to an upper-medium grade (low credit risk) fixed income corporate instrument yield (generally interpreted as an “A” rating) reflecting the duration characteristics of the liability. Entities will be required to update the discount rate at each reporting date with the effect of discount rate changes reflected in OCI. • The current premium deficiency test is being replaced with a net premium ratio cap of 100%. If the net premium ratio (i.e. the ratio of the present value of total expected benefits and related expenses to the present value of total expected premiums) exceeds 100%, insurers are required to recognize a loss in the statement of operations in the period. Contracts from different issue years will no longer be permitted to be grouped to determine contracts in a loss position. In addition, the update requires DAC and DSIC relating to all long-duration contracts and most investment contracts to be amortized on a straight-line basis over the expected life of the contract independent of profit emergence. Under the new guidance, interest will not accrue to the deferred balance and DAC and DSIC will not be subject to an impairment test. The update requires significant additional disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account balances, market risk benefits, DAC and DSIC, as well as qualitative and quantitative information about expected cash flows, estimates and assumptions. On November 5, 2020, the FASB released an updated ASU to defer the effective date of the standard to interim and annual periods beginning after December 15, 2022, and interim periods within those years. The standard should be applied to the liability for future policy benefits and DAC and DSIC on a modified retrospective basis and applied to market risk benefits on a retrospective basis with the option to apply full retrospective transition if certain criteria are met. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated financial condition, results of operations and disclosures. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers [Text Block] | The following table presents disaggregated revenue from contracts with customers and a reconciliation to total revenues reported on the Consolidated Statements of Income. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Policy and contract charges Affiliated $ 44 $ 43 $ 127 $ 126 Unaffiliated 3 4 10 11 Total 47 47 137 137 Other revenues Administrative fees Affiliated 12 11 33 32 Unaffiliated 3 5 13 15 15 16 46 47 Other fees Affiliated 89 87 259 256 Unaffiliated 1 1 3 3 90 88 262 259 Total 105 104 308 306 Total revenue from contracts with customers 152 151 445 443 Revenue from other sources (1) 800 815 2,328 2,422 Total revenues $ 952 $ 966 $ 2,773 $ 2,865 (1) Amounts primarily consist of revenue associated with insurance and annuity products or financial instruments. The following discussion describes the nature, timing, and uncertainty of revenues and cash flows arising from the Company’s contracts with customers. Policy and contract charges The Company earns revenue for providing distribution-related services to affiliated and unaffiliated mutual funds that are available as underlying investments in its variable annuity and variable life insurance products. The performance obligation is satisfied at the time the mutual fund is distributed. Revenue is recognized over the time the mutual fund is held in the variable product and is generally earned based on a fixed rate applied, as a percentage, to the net asset value of the fund. The revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control, including market volatility and how long the fund(s) remain in the insurance policy or annuity contract. The revenue will not be recognized until it is probable that a significant reversal will not occur. These fees are accrued and collected on a monthly basis. Other revenues Administrative fees The Company earns revenue for providing customer support, contract servicing and administrative services for affiliated and unaffiliated mutual funds that are available as underlying instruments in its variable annuity and variable life insurance products. The transfer agent and administration revenue is earned daily based on a fixed rate applied, as a percentage, to assets under management. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are accrued and collected on a monthly basis. Other fees The Company earns revenue for providing affiliated and unaffiliated partners an opportunity to educate the financial advisors of its affiliate, Ameriprise Financial Services, Inc., that sell the Company's products as well as product and marketing personnel to support the offer, sale and servicing of funds within the Company's variable annuity and variable life insurance products. These payments allow the parties to train and support the advisors, explain the features of their products, and distribute marketing and educational materials. The affiliated revenue is earned based on a rate, updated at least annually, which is applied, as a percentage, to the market value of assets invested. The unaffiliated revenue is earned based on a fixed rate applied, as a percentage, to the market value of assets invested. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are accrued and collected on a monthly basis. Receivables Receivables for revenue from contracts with customers are recognized when the performance obligation is satisfied and the Company has an unconditional right to the revenue. Receivables related to revenues from contracts with customers were $55 million as of both September 30, 2020 and December 31, 2019. |
Variable Interest Entities Vari
Variable Interest Entities Variable Interest Entities | 9 Months Ended |
Sep. 30, 2020 | |
Variable Interest Entity, Not Primary Beneficiary, Disclosures [Abstract] | |
Variable Interest Entities [Text Block] | Variable Interest Entities The Company is a limited partner in affordable housing partnerships that qualify for government-sponsored low income housing tax credit programs and partnerships that invest in multi-family residential properties that were originally developed with an affordable housing component. The Company has determined it is not the primary beneficiary and therefore does not consolidate these partnerships. A majority of the limited partnerships are variable interest entities (“VIEs”). The Company’s maximum exposure to loss as a result of its investment in the VIEs is limited to the carrying value. The carrying value is reflected in other investments and was $202 million and $270 million as of September 30, 2020 and December 31, 2019, respectively. The Company had a $9 million and a $15 million liability recorded as of September 30, 2020 and December 31, 2019, respectively, related to original purchase commitments not yet remitted to the VIEs. The Company has not provided any additional support and is not contractually obligated to provide additional support to the VIEs beyond the funding commitments. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments [Text Block] | Available-for-Sale securities distributed by type were as follows: Description of Securities September 30, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Fixed maturities: Corporate debt securities $ 10,338 $ 1,642 $ (33) $ (13) $ 11,934 Residential mortgage backed securities 3,195 122 (2) — 3,315 Commercial mortgage backed securities 4,026 228 (7) — 4,247 State and municipal obligations 1,047 288 (1) — 1,334 Asset backed securities 1,286 42 (2) — 1,326 Foreign government bonds and obligations 245 19 (2) — 262 U.S. government and agency obligations 201 — — — 201 Total $ 20,338 $ 2,341 $ (47) $ (13) $ 22,619 Description of Securities December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in millions) Fixed maturities: Corporate debt securities $ 10,188 $ 1,336 $ (2) $ 11,522 Residential mortgage backed securities 3,039 73 (4) 3,108 Commercial mortgage backed securities 3,526 95 (3) 3,618 State and municipal obligations 1,071 237 (2) 1,306 Asset backed securities 1,036 45 (1) 1,080 Foreign government bonds and obligations 250 19 (2) 267 U.S. government and agency obligations 1 — — 1 Total $ 19,111 $ 1,805 $ (14) $ 20,902 In March 2020, the Company purchased $368 million of investments at fair value, primarily agency residential mortgage back securities, from Ameriprise Financial. As of September 30, 2020 and December 31, 2019, accrued interest of $167 million and $158 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in accrued investment income on the Consolidated Balance Sheets. As of September 30, 2020 and December 31, 2019, investment securities with a fair value of $3.0 billion and $1.9 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $483 million and $576 million, respectively, may be sold, pledged or rehypothecated by the counterparty. As of September 30, 2020 and December 31, 2019, fixed maturity securities comprised approximately 84% and 83%, respectively, of the Company’s total investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. As of September 30, 2020 and December 31, 2019, approximately $574 million and $615 million, respectively, of securities were internally rated by Columbia Management Investment Advisers, LLC, an affiliate of the Company, using criteria similar to those used by NRSROs. A summary of fixed maturity securities by rating was as follows: Ratings September 30, 2020 December 31, 2019 Amortized Cost Fair Value Percent of Total Fair Value Amortized Cost Fair Value Percent of Total Fair Value (in millions, except percentages) AAA $ 8,030 $ 8,400 37 % $ 6,771 $ 6,950 33 % AA 1,077 1,315 6 1,176 1,374 7 A 2,574 3,118 14 2,695 3,157 15 BBB 7,088 8,152 36 7,709 8,626 41 Below investment grade 1,569 1,634 7 760 795 4 Total fixed maturities $ 20,338 $ 22,619 100 % $ 19,111 $ 20,902 100 % As of September 30, 2020 and December 31, 2019, approximately 37% and 39%, respectively, of securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. The Company had holdings of $375 million in Ameriprise Advisor Financing, LLC (“AAF”), an affiliate of the Company, which was greater than 10% of total equity as of September 30, 2020. The Company had holdings of $380 million in AAF, which was greater than 10% of total equity as of December 31, 2019. There were no other holdings of any other issuer greater than 10% of total equity as of December 31, 2019. The following tables provide information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position: Description of Securities September 30, 2020 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 69 $ 789 $ (29) 2 $ 12 $ (4) 71 $ 801 $ (33) Residential mortgage backed securities 21 304 (2) 6 10 — 27 314 (2) Commercial mortgage backed securities 23 428 (5) 6 43 (2) 29 471 (7) State and municipal obligations 4 14 (1) 1 4 — 5 18 (1) Asset backed securities 9 139 (1) 2 36 (1) 11 175 (2) Foreign government bonds and obligations 6 26 (1) 9 10 (1) 15 36 (2) Total 132 $ 1,700 $ (39) 26 $ 115 $ (8) 158 $ 1,815 $ (47) Description of Securities December 31, 2019 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 15 $ 64 $ — 7 $ 90 $ (2) 22 $ 154 $ (2) Residential mortgage backed securities 29 571 (1) 20 298 (3) 49 869 (4) Commercial mortgage backed securities 18 310 (1) 7 82 (2) 25 392 (3) State and municipal obligations 5 23 — 3 54 (2) 8 77 (2) Asset backed securities 10 111 (1) 6 54 — 16 165 (1) Foreign government bonds and obligations 1 — — 10 15 (2) 11 15 (2) Total 78 $ 1,079 $ (3) 53 $ 593 $ (11) 131 $ 1,672 $ (14) As part of the Company’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities during the nine months ended September 30, 2020 is attributable to wider credit spreads, partially offset by lower interest rates. Consistent with the accounting policy described in Note 2, the Company did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. The Company does not intend to sell these securities and does not believe that it is more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. As of September 30, 2020, 56% of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade. The following tables present a rollforward of the allowance for credit losses on Available-for-Sale securities: Corporate Debt Securities (in millions) Balance, July 1, 2020 $ 13 Additions for which credit losses were not previously recognized — Balance, September 30, 2020 $ 13 Corporate Debt Securities (in millions) Balance, January 1, 2020 (1) $ — Additions for which credit losses were not previously recognized 13 Balance, September 30, 2020 $ 13 (1) Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired. There is no adoption impact due to the prospective transition for Available-for-Sale securities. Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in net realized investment gains (losses) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Gross realized investment gains $ 2 $ 6 $ 12 $ 28 Gross realized investment losses — (2) (2) (14) Credit losses — (15) (13) (15) Total $ 2 $ (11) $ (3) $ (1) Credit losses for the three months and nine months ended September 30, 2020 primarily related to recording an allowance for credit losses on certain corporate debt securities, primarily in the oil and gas industry. See Note 15 for a rollforward of net unrealized investment gains (losses) included in AOCI. Available-for-Sale securities by contractual maturity as of September 30, 2020 were as follows: Amortized Cost Fair Value (in millions) Due within one year $ 879 $ 888 Due after one year through five years 4,348 4,633 Due after five years through 10 years 2,521 2,801 Due after 10 years 4,083 5,409 11,831 13,731 Residential mortgage backed securities 3,195 3,315 Commercial mortgage backed securities 4,026 4,247 Asset backed securities 1,286 1,326 Total $ 20,338 $ 22,619 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities were not included in the maturities distribution. The following is a summary of net investment income: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Fixed maturities $ 191 $ 205 $ 585 $ 644 Mortgage loans 29 29 86 88 Other investments (3) (6) (9) (2) 217 228 662 730 Less: investment expenses 5 6 15 18 Total $ 212 $ 222 $ 647 $ 712 |
Financing Receivables
Financing Receivables | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Financing Receivables [Text Block] | Financing receivables are comprised of commercial loans, policy loans, and the deposit receivable. See Note 2 for information regarding the Company’s accounting policies related to financing receivables and the allowance for credit losses. Allowance for Credit Losses The following tables present a rollforward of the allowance for credit losses for the nine months ended September 30: Commercial Loans (in millions) Balance, December 31, 2019 (1) $ 20 Cumulative effect of adoption of current expected credit losses guidance 3 Balance, January 1, 2020 23 Provisions $ 13 Balance, September 30, 2020 $ 36 (1) Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. Commercial Loans (in millions) Balance, January 1, 2019 $ 20 Write-offs — Balance, September 30, 2019 $ 20 As of both September 30, 2020 and December 31, 2019, accrued interest on commercial loans was $11 million and is recorded in accrued investment income on the Consolidated Balance Sheets and excluded from the amortized cost basis of commercial loans. Purchases and Sales During the three months ended September 30, 2020 and 2019, the Company purchased $84 million and $39 million, respectively, of syndicated loans, and sold $2 million and $11 million, respectively, of syndicated loans. During the nine months ended September 30, 2020 and 2019, the Company purchased $134 million and $94 million, respectively, of syndicated loans and sold $9 million and $32 million, respectively, of syndicated loans. The Company has not acquired any loans with deteriorated credit quality as of the acquisition date. Credit Quality Information Nonperforming loans were $8 million and $9 million as of September 30, 2020 and December 31, 2019, respectively. All other loans were considered to be performing. Commercial Loans Commercial Mortgage Loans The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review. Total commercial mortgage loans past due were $6 million and nil as of September 30, 2020 and December 31, 2019, respectively. Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates as necessary. Commercial mortgage loans which management has assigned its highest risk rating were less than 1% of total commercial mortgage loans as of both September 30, 2020 and December 31, 2019. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next nine months. Total commercial mortgage loan modifications in 2020 due to the COVID-19 pandemic consisted of 88 loans with a total unpaid balance of $360 million. Modifications primarily consisted of short-term forbearance and interest only payments. As of September 30, 2020, there were 23 loans remaining with a total unpaid balance of $122 million. All other loans returned to their normal payment schedules. The table below presents the amortized cost basis of commercial mortgage loans as of September 30, 2020 by year of origination and loan-to-value ratio: Loan-to-Value Ratio 2020 2019 2018 2017 2016 Prior Total (in millions) > 100% $ — $ — $ 3 $ — $ — $ 10 $ 13 80% - 100% 15 16 9 3 5 21 69 60% - 80% 78 161 27 29 55 153 503 40% - 60% 13 44 74 152 107 563 953 < 40% 7 22 69 86 59 875 1,118 Total $ 113 $ 243 $ 182 $ 270 $ 226 $ 1,622 $ 2,656 Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization rate assumptions based on property type. In addition, the Company reviews the concentrations of credit risk by region and property type. Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows: Loans Percentage September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 (in millions) South Atlantic $ 689 $ 705 26 % 26 % Pacific 787 792 30 30 Mountain 232 237 9 9 West North Central 195 207 7 8 East North Central 254 232 10 9 Middle Atlantic 172 167 6 6 West South Central 164 169 6 6 New England 48 47 2 2 East South Central 115 116 4 4 2,656 2,672 100 % 100 % Less: allowance for credit losses 28 17 Total $ 2,628 $ 2,655 Concentrations of credit risk of commercial mortgage loans by property type were as follows: Loans Percentage September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 (in millions) Retail $ 860 $ 891 32 % 33 % Office 378 404 14 15 Apartments 686 660 26 25 Industrial 407 404 15 15 Mixed use 77 66 3 3 Hotel 50 51 2 2 Other 198 196 8 7 2,656 2,672 100 % 100 % Less: allowance for credit losses 28 17 Total $ 2,628 $ 2,655 Syndicated Loans The recorded investment in syndicated loans as of September 30, 2020 and December 31, 2019 was $471 million and $395 million, respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. Total syndicated loans past due were $4 million and $1 million as of September 30, 2020 and December 31, 2019, respectively. The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality. The table below presents the amortized cost basis of syndicated loans as of September 30, 2020 by origination year and internal risk rating: Internal Risk Rating 2020 2019 2018 2017 2016 Prior Total (in millions) Risk 5 $ — $ — $ 1 $ — $ — $ — $ 1 Risk 4 — 4 3 7 1 7 22 Risk 3 — 3 7 22 10 19 61 Risk 2 15 40 48 53 16 36 208 Risk 1 16 30 44 44 17 30 181 Total $ 31 $ 77 $ 103 $ 126 $ 44 $ 92 $ 473 Policy Loans Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is no allowance for credit losses. Deposit Receivable The deposit receivable was $1.4 billion and $1.5 billion as of September 30, 2020 and December 31, 2019, respectively. The deposit receivable is fully collateralized by the fair value of the assets held in a trust. Based on management’s evaluation of the nature of the underlying assets and the potential for changes in the collateral value, the Company did not have an allowance for credit losses for the deposit receivable as of both September 30, 2020 and December 31, 2019. Troubled Debt Restructurings |
Deferred Acquisition Costs and
Deferred Acquisition Costs and Deferred Sales Inducement Costs | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Charges, Insurers [Abstract] | |
Deferred Acquisition Costs and Deferred Sales Inducement Costs | During the third quarter of the year, management updated market-related inputs and implemented model changes related to the living benefit valuation. In addition, management conducted its annual review of life insurance and annuity valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking. The impact of unlocking to DAC in both the third quarter of 2020 and 2019 primarily reflected an unfavorable impact from updates to interest rate assumptions, partially offset by a favorable impact from lower surrenders on variable annuities with living benefit guarantees. The balances of and changes in DAC were as follows: 2020 2019 (in millions) Balance at January 1 $ 2,673 $ 2,742 Capitalization of acquisition costs 155 178 Amortization (238) (127) Amortization, impact of valuation assumptions review (100) (14) Impact of change in net unrealized (gains) losses on securities (61) (175) Balance at September 30 $ 2,429 $ 2,604 The balances of and changes in DSIC, which is included in other assets, were as follows: 2020 2019 (in millions) Balance at January 1 $ 216 $ 249 Capitalization of sales inducement costs 1 1 Amortization (19) (14) Amortization, impact of valuation assumptions review (16) — Impact of change in net unrealized (gains) losses on securities (1) (21) Balance at September 30 $ 181 $ 215 |
Policyholder Account Balances,
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Policyholder Account Balances, Future Policy Benefits and Claims & Separate Account Liabilities | |
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities | Policyholder account balances, future policy benefits and claims consisted of the following: September 30, 2020 December 31, 2019 (in millions) Policyholder account balances Fixed annuities (1) $ 8,623 $ 8,909 Variable annuity fixed sub-accounts 5,105 5,103 Universal life (“UL”)/variable universal life (“VUL”) insurance 3,117 3,110 Indexed universal life (“IUL”) insurance 2,189 2,025 Structured variable annuities 820 — Other life insurance 616 646 Total policyholder account balances 20,470 19,793 Future policy benefits Variable annuity guaranteed minimum withdrawal benefits (“GMWB”) 3,681 1,462 Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2) 24 (39) Other annuity liabilities 183 139 Fixed annuity life contingent liabilities 1,389 1,444 Life and disability income insurance 1,191 1,212 Long term care insurance 5,668 5,302 UL/VUL and other life insurance additional liabilities 1,228 1,033 Total future policy benefits 13,364 10,553 Policy claims and other policyholders’ funds 178 158 Total policyholder account balances, future policy benefits and claims $ 34,012 $ 30,504 (1) Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts. (2) Includes the fair value of GMAB embedded derivatives that was a net asset as of December 31, 2019 reported as a contra liability. Separate account liabilities consisted of the following: September 30, 2020 December 31, 2019 (in millions) Variable annuity $ 73,919 $ 74,965 VUL insurance 7,400 7,429 Other insurance 29 31 Total $ 81,348 $ 82,425 |
Variable Annuity and Insurance
Variable Annuity and Insurance Guarantees | 9 Months Ended |
Sep. 30, 2020 | |
Insurance [Abstract] | |
Variable Annuity and Insurance Guarantees | The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions. Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities: Variable Annuity Guarantees by Benefit Type (1) September 30, 2020 December 31, 2019 Total Contract Value Contract Value in Separate Accounts Net Amount at Risk Weighted Average Attained Age Total Contract Value Contract Value in Separate Accounts Net Amount at Risk Weighted Average Attained Age (in millions, except age) GMDB: Return of premium $ 62,475 $ 60,537 $ 16 68 $ 62,909 $ 60,967 $ 5 67 Five/six-year reset 7,700 4,966 13 68 7,983 5,263 7 67 One-year ratchet 5,722 5,389 27 71 5,935 5,600 7 70 Five-year ratchet 1,350 1,295 2 67 1,396 1,340 — 66 Other 1,183 1,164 76 73 1,192 1,174 65 73 Total — GMDB $ 78,430 $ 73,351 $ 134 68 $ 79,415 $ 74,344 $ 84 67 GGU death benefit $ 1,100 $ 1,044 $ 132 71 $ 1,115 $ 1,063 $ 133 71 GMIB $ 172 $ 158 $ 10 71 $ 186 $ 172 $ 6 70 GMWB: GMWB $ 1,871 $ 1,866 $ 1 74 $ 1,999 $ 1,993 $ 1 73 GMWB for life 46,837 46,762 391 68 46,799 46,691 272 68 Total — GMWB $ 48,708 $ 48,628 $ 392 68 $ 48,798 $ 48,684 $ 273 68 GMAB $ 2,274 $ 2,273 $ 1 61 $ 2,528 $ 2,524 $ — 60 (1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. The net amount at risk for GMDB, GGU and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero. The following table provides information related to insurance guarantees for which the Company has established additional liabilities: September 30, 2020 December 31, 2019 Net Amount at Risk Weighted Average Attained Age Net Amount at Risk Weighted Average Attained Age (in millions, except age) UL secondary guarantees $ 6,600 67 $ 6,550 67 The net amount at risk for UL secondary guarantees is defined as the current guaranteed death benefit amount in excess of the current policyholder account balance. Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows: GMDB & GGU GMIB GMWB (1) GMAB (1) UL (in millions) Balance at January 1, 2019 $ 19 $ 8 $ 875 $ (19) $ 659 Incurred claims — (1) 1,245 — 110 Paid claims (4) — — — (34) Balance at September 30, 2019 $ 15 $ 7 $ 2,120 $ (19) $ 735 Balance at January 1, 2020 $ 16 $ 7 $ 1,462 $ (39) $ 758 Incurred claims 10 1 2,219 63 172 Paid claims (6) (1) — — (34) Balance at September 30, 2020 $ 20 $ 7 $ 3,681 $ 24 $ 896 (1) The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims. The liabilities for guaranteed benefits are supported by general account assets. The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits: September 30, 2020 December 31, 2019 (in millions) Mutual funds: Equity $ 42,327 $ 44,739 Bond 24,723 23,374 Other 6,521 6,471 Total mutual funds $ 73,571 $ 74,584 |
Short-term Borrowings
Short-term Borrowings | 9 Months Ended |
Sep. 30, 2020 | |
Short-term Debt [Abstract] | |
Short-term Borrowings | RiverSource Life Insurance Company is a member of the Federal Home Loan Bank (“FHLB”) of Des Moines which provides access to collateralized borrowings. The Company has pledged Available-for-Sale securities consisting of commercial mortgage backed securities to collateralize its obligation under these borrowings. The fair value of the securities pledged is recorded in investments and was $1.2 billion and $840 million as of September 30, 2020 and December 31, 2019, respectively. The amount of the Company’s liability including accrued interest as of September 30, 2020 and December 31, 2019 was $200 million and $201 million, respectively. The remaining maturity of outstanding FHLB advances was less than two months as of both September 30, 2020 and December 31, 2019. The weighted average annualized interest rate on the FHLB advances held as of September 30, 2020 and December 31, 2019 was 0.4% and 1.8%, respectively. |
Fair Values of Assets and Liabi
Fair Values of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block | GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale. Valuation Hierarchy The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows: Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date. Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The following tables present the balances of assets and liabilities measured at fair value on a recurring basis: September 30, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Available-for-Sale securities: Corporate debt securities $ — $ 11,198 $ 736 $ 11,934 Residential mortgage backed securities — 3,297 18 3,315 Commercial mortgage backed securities — 4,247 — 4,247 State and municipal obligations — 1,334 — 1,334 Asset backed securities — 928 398 1,326 Foreign government bonds and obligations — 262 — 262 U.S. government and agency obligations 201 — — 201 Total Available-for-Sale securities 201 21,266 1,152 22,619 Cash equivalents 2,404 1,134 — 3,538 Other assets: Interest rate derivative contracts — 2,015 — 2,015 Equity derivative contracts 441 2,940 — 3,381 Foreign exchange derivative contracts — 34 — 34 Credit derivative contracts — 5 — 5 Total other assets 441 4,994 — 5,435 Separate account assets at net asset value (“NAV”) 81,348 (1) Total assets at fair value $ 3,046 $ 27,394 $ 1,152 $ 112,940 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 3 $ 44 $ 47 IUL embedded derivatives — — 926 926 GMWB and GMAB embedded derivatives — — 2,943 2,943 (2) Structured variable annuity embedded derivatives — — 9 9 Total policyholder account balances, future policy benefits and claims — 3 3,922 3,925 (3) Other liabilities: Interest rate derivative contracts — 934 — 934 Equity derivative contracts 167 2,798 — 2,965 Foreign exchange derivative contracts 2 5 — 7 Total other liabilities 169 3,737 — 3,906 Total liabilities at fair value $ 169 $ 3,740 $ 3,922 $ 7,831 December 31, 2019 Level 1 Level 2 Level 3 Total (in millions) Assets Available-for-Sale securities: Corporate debt securities $ — $ 10,787 $ 735 $ 11,522 Residential mortgage backed securities — 3,091 17 3,108 Commercial mortgage backed securities — 3,618 — 3,618 State and municipal obligations — 1,306 — 1,306 Asset backed securities — 691 389 1,080 Foreign government bonds and obligations — 267 — 267 U.S. government and agency obligations 1 — — 1 Total Available-for-Sale securities 1 19,760 1,141 20,902 Cash equivalents — 1,256 — 1,256 Other assets: Interest rate derivative contracts — 1,451 — 1,451 Equity derivative contracts 162 2,650 — 2,812 Foreign exchange derivative contracts 1 15 — 16 Credit derivative contracts — 4 — 4 Total other assets 163 4,120 — 4,283 Separate account assets at NAV 82,425 (1) Total assets at fair value $ 164 $ 25,136 $ 1,141 $ 108,866 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 3 $ 43 $ 46 IUL embedded derivatives — — 881 881 GMWB and GMAB embedded derivatives — — 763 763 (4) Total policyholder account balances, future policy benefits and claims — 3 1,687 1,690 (5) Other liabilities: Interest rate derivative contracts — 418 — 418 Equity derivative contracts 36 3,018 — 3,054 Foreign exchange derivative contracts 1 5 — 6 Total other liabilities 37 3,441 — 3,478 Total liabilities at fair value $ 37 $ 3,444 $ 1,687 $ 5,168 (1) Amounts are comprised of certain financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. (2) The fair value of the GMWB and GMAB embedded derivatives included $3.0 billion of individual contracts in a liability position and $36 million of individual contracts in an asset position as of September 30, 2020. (3) The Company’s adjustment for nonperformance risk resulted in a $(1.0) billion cumulative increase (decrease) to the embedded derivatives as of September 30, 2020. (4) The fair value of the GMWB and GMAB embedded derivatives included $981 million of individual contracts in a liability position and $218 million of individual contracts in an asset position as of December 31, 2019. (5) The Company’s adjustment for nonperformance risk resulted in a $(502) million cumulative increase (decrease) to the embedded derivatives as of December 31, 2019. The following tables provide a summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis: Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2020 $ 731 $ 56 $ 352 $ 1,139 Total gains (losses) included in: Other comprehensive income (loss) 5 — 32 37 Purchases 7 1 — 8 Settlements (7) — — (7) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ — $ — $ — $ — Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 5 $ — $ 32 $ 37 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2020 $ 41 $ 882 $ 3,129 $ 9 $ 4,061 Total (gains) losses included in: Net income 3 (1) 50 (1) (296) (2) 3 (2) (240) Issues — 15 93 (3) 105 Settlements — (21) 17 — (4) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 50 (1) $ (283) (2) $ — $ (233) Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2019 $ 790 $ 44 $ 384 $ 1,218 Total (gains) losses included in: Other comprehensive income (loss) 4 — (3) 1 Purchases 21 — — 21 Settlements (35) (2) — (37) Transfers into Level 3 — — 10 10 Balance, September 30, 2019 $ 780 $ 42 $ 391 $ 1,213 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2019 $ — $ — $ — $ — Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Total (in millions) Balance, July 1, 2019 $ 31 $ 819 $ 696 $ 1,546 Total (gains) losses included in: Net income — (5) (1) 663 (2) 658 Issues 6 25 96 127 Settlements — (17) (3) (20) Balance, September 30, 2019 $ 37 $ 822 $ 1,452 $ 2,311 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2019 $ — $ (5) (1) $ 660 (2) $ 655 Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2020 $ 735 $ 17 $ 389 $ 1,141 Total gains (losses) included in: Net income (1) — — (1) (3) Other comprehensive income (loss) 13 1 (5) 9 Purchases 13 39 — 52 Settlements (24) — — (24) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ (1) $ — $ — $ (1) (3) Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 13 $ 1 $ (5) $ 9 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2020 $ 43 $ 881 $ 763 $ — $ 1,687 Total (gains) losses included in: Net income (2) (1) 53 (1) 1,900 (2) 16 (2) 1,967 Issues 3 53 267 (7) 316 Settlements — (61) 13 — (48) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 53 (1) $ 1,936 (2) $ — $ 1,989 Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2019 $ 871 $ 64 $ 374 $ 1,309 Total (gains) losses included in: Net income (1) — — (1) (3) Other comprehensive income (loss) 32 — 7 39 Purchases 35 27 — 62 Settlements (157) (3) — (160) Transfers into Level 3 — — 10 10 Transfers out of Level 3 — (46) — (46) Balance, September 30, 2019 $ 780 $ 42 $ 391 $ 1,213 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2019 $ (1) $ — $ — $ (1) (3) Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Total (in millions) Balance, January 1, 2019 $ 14 $ 628 $ 328 $ 970 Total (gains) losses included in: Net income 3 (1) 153 (1) 866 (2) 1,022 Issues 20 92 266 378 Settlements — (51) (8) (59) Balance, September 30, 2019 $ 37 $ 822 $ 1,452 $ 2,311 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2019 $ — $ 153 (1) $ 859 (2) $ 1012 (1) Included in interest credited to fixed accounts in the Consolidated Statements of Income. (2) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income. (3) Included in net investment income in the Consolidated Statements of Income. The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $(123) million and $85 million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual for the three months ended September 30, 2020 and 2019, respectively. The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $446 million and $(29) million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual for the nine months ended September 30, 2020 and 2019, respectively. Securities transferred from Level 3 primarily represent securities with fair values that are obtained from a third-party pricing service with observable inputs. The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities: September 30, 2020 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 728 Discounted cash flow Yield/spread to U.S. Treasuries (1) 1.2% – 4.5% 1.9% Asset backed securities $ 398 Discounted cash flow Annual default rate 4.8% 4.8% Loss severity 25.0% 25.0% Yield/spread to swap rates (2) 300 bps – 450 bps 308 bps IUL embedded derivatives $ 926 Discounted cash flow Nonperformance risk (3) 85 bps 85 bps Fixed deferred indexed annuity embedded derivatives $ 44 Discounted cash flow Surrender rate (4) 0.0% – 50.0% 1.2% Nonperformance risk (3) 85 bps 85 bps GMWB and GMAB embedded derivatives $ 2,943 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0% – 48.0% 10.5% Surrender rate (4) 0.1% – 73.5% 3.6% Market volatility (7) (8) 4.6% – 17.9% 11.8% Nonperformance risk (3) 85 bps 85 bps Structured variable annuity embedded derivatives $ 9 Discounted cash flow Surrender rate (4) 0.8% – 40.0% 0.9% Nonperformance risk (3) 85 bps 85 bps December 31, 2019 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 735 Discounted cash flow Yield/spread to U.S. Treasuries 0.8% – 2.8% 1.3% Asset backed securities $ 389 Discounted cash flow Annual default rate 3.5% Loss severity 25.0% Yield/spread to swap rates 120 bps – 170 bps 123 bps IUL embedded derivatives $ 881 Discounted cash flow Nonperformance risk (3) 65 bps Fixed deferred indexed annuity embedded derivatives $ 43 Discounted cash flow Surrender rate 0.0% – 50.0% Nonperformance risk (3) 65 bps GMWB and GMAB embedded derivatives $ 763 Discounted cash flow Utilization of guaranteed withdrawals (5) 0.0% – 36.0% Surrender rate 0.1% – 73.5% Market volatility (7) 3.7% – 15.9% Nonperformance risk (3) 65 bps (1) The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (2) The weighted average for the spread to swap rates for asset backed securities is calculated as the sum of each tranche’s balance multiplied by its spread to swap divided by the aggregate balances of the tranches. (3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives. (4) The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula. (5) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. (6) The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals. (7) Market volatility is implied volatility of fund of funds and managed volatility funds. (8) The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. Level 3 measurements not included in the table above are obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company. Uncertainty of Fair Value Measurements Significant increases (decreases) in the yield/spread to U.S. Treasuries used in the fair value measurement of Level 3 corporate debt securities in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the annual default rate used in the fair value measurement of Level 3 asset backed securities in isolation, generally, would have resulted in a significantly lower (higher) fair value measurement and significant increases (decreases) in loss severity in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the yield/spread to swap rates in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in nonperformance risk used in the fair value measurement of the IUL embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in nonperformance risk and surrender rate used in the fair value measurements of the fixed deferred indexed annuity embedded derivatives and structured variable annuity embedded derivatives in isolation would have resulted in a significantly lower (higher) liability value. Significant increases (decreases) in utilization and volatility used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would have resulted in a significantly higher (lower) liability value. Significant increases (decreases) in nonperformance risk and surrender rate used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would have resulted in a significantly lower (higher) liability value. Utilization of guaranteed withdrawals and surrender rates vary with the type of rider, the duration of the policy, the age of the contractholder, the distribution channel and whether the value of the guaranteed benefit exceeds the contract accumulation value. Determination of Fair Value The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The Company’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company’s income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy. Assets Cash Equivalents Cash equivalents include time deposits and other highly liquid investments with original or remaining maturities at the time of purchase of 90 days or less. Actively traded money market funds are measured at their NAV and classified as Level 1. U.S. Treasuries are also classified as Level 1. The Company’s remaining cash equivalents are classified as Level 2 and measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization. Available-for-Sale Securities When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from third-party pricing services, non-binding broker quotes, or other model-based valuation techniques. Level 1 securities primarily include U.S. Treasuries. Level 2 securities primarily include corporate bonds, residential mortgage backed securities, commercial mortgage backed securities, state and municipal obligations, asset backed securities and foreign government securities. The fair value of these Level 2 securities is based on a market approach with prices obtained from third-party pricing services. Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes. Level 3 securities primarily include certain corporate bonds, non-agency residential mortgage backed securities and affiliated and unaffiliated asset backed securities. The fair value of corporate bonds, non-agency residential mortgage backed securities and unaffiliated asset backed securities classified as Level 3 is typically based on a single non-binding broker quote. The underlying inputs used for some of the non-binding broker quotes are not readily available to the Company. The Company’s privately placed corporate bonds are typically based on a single non-binding broker quote. The fair value of affiliated asset backed securities is determined using a discounted cash flow model. Inputs used to determine the expected cash flows include assumptions about discount rates and default, prepayment and recovery rates of the underlying assets. Given the significance of the unobservable inputs to this fair value measurement, the fair value of the investment in the affiliated asset backed securities is classified as Level 3. In consideration of the above, management is responsible for the fair values recorded on the financial statements. Prices received from third-party pricing services are subjected to exception reporting that identifies investments with significant daily price movements as well as no movements. The Company reviews the exception reporting and resolves the exceptions through reaffirmation of the price or recording an appropriate fair value estimate. The Company also performs subsequent transaction testing. The Company performs annual due diligence of third-party pricing services. The Company’s due diligence procedures include assessing the vendor’s valuation qualifications, control environment, analysis of asset-class specific valuation methodologies, and understanding of sources of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. The Company also considers the results of its exception reporting controls and any resulting price challenges that arise. Separate Account Assets The fair value of assets held by separate accounts is determined by the NAV of the funds in which those separate accounts are invested. The NAV is used as a practical expedient for fair value and represents the exit price for the separate account. Separate account assets are excluded from classification in the fair value hierarchy. Other Assets Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active over-the-counter (“OTC”) markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps and the majority of options. The counterparties’ nonperformance risk associated with uncollateralized derivative assets was immaterial as of both September 30, 2020 and December 31, 2019. See Note 13 and Note 14 for further information on the credit risk of derivative instruments and related collateral. Liabilities Policyholder Account Balances, Future Policy Benefits and Claims There is no active market for the transfer of the Company’s embedded derivatives attributable to the provisions of certain variable annuity riders, fixed deferred indexed annuity, structured variable annuity and IUL products. The Company values the embedded derivatives attributable to the provisions of certain variable annuity riders using internal valuation models. These models calculate fair value as the present value of future expected benefit payments less the present value of future expected rider fees attributable to the embedded derivative feature. The projected cash flows used by these models include observable capital market assumptions and incorporate significant unobservable inputs related to implied volatility as well as contractholder behavior assumptions that include margins for risk, all of which the Company believes a market participant would incorporate into an exit price. The fair value also reflects a current estimate of the Company’s nonperformance risk specific to these embedded derivatives. Given the significant unobservable inputs to this valuation, these measurements are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims. The Company uses a discounted cash flow model to determine the fair value of the embedded derivatives associated with the provisions of its equity index annuity product. The projected cash flows generated by this model are based on significant observable inputs related to interest rates, volatilities and equity index levels and, therefore, are classified as Level 2. The Company uses discounted cash flow models including Black-Scholes calculations to determine the fair value of the embedded derivatives associated with the provisions of its fixed deferred indexed annuity, structured variable annuity and IUL products. The structured variable annuity product is a limited flexible purchase payment annuity that offers 45 different indexed account options providing equity market exposure and a fixed account. Each indexed account includes a protection option (a buffer or a floor). If the index has a negative return, contractholder losses will be reduced by buffer or limited to a floor. The portion allocated to an indexed account is accounted for as an embedded derivative. The fair value of fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives includes significant observable interest rates, volatilities and equity index levels and the significant unobservable estimate of the Company’s nonperformance risk. Given the significance of the nonperformance risk assumption to the fair value, the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims. Other Liabilities Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active OTC markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps and the majority of options. The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial as of both September 30, 2020 and December 31, 2019. See Note 13 and Note 14 for further information on the credit risk of derivative instruments and related collateral. Fair Value on a Nonrecurring Basis The Company assesses its investment in affordable housing partnerships for impairment. The investments that are determined to be impaired are written down to their fair value. The Company uses a discounted cash flow model to measure the fair value of these investments. Inputs to the discounted cash flow model are estimates of future net operating losses and tax credits available to the Company and discount rates based on market condition and the financial strength of the syndicator (general partner). The balance of affordable housing partnerships measured at fair value on a nonrecurring basis was $99 million and $158 million as of September 30, 2020 and December 31, 2019, respectively, and is classified as Level 3 in the fair value hierarchy. Asset and Liabilities Not Reported at Fair Value The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value: September 30, 2020 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 2,628 $ — $ — $ 2,749 $ 2,749 Policy loans 849 — 849 — 849 (1) Other investments 482 — 402 69 471 Other receivables 1,449 — — 1,734 1,734 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 9,600 $ — $ — $ 11,300 $ 11,300 Short-term borrowings 200 — 200 — 200 Other liabilities 15 — — 15 15 Separate account liabilities — investment contracts 323 — 323 — 323 December 31, 2019 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 2,655 $ — $ — $ 2,707 $ 2,707 Policy loans 867 — 867 — 867 (1) Other investments 410 — 376 34 410 Other receivables 1,514 — — 1,648 1,648 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 9,110 $ — $ — $ 10,061 $ 10,061 Short-term borrowings 201 — 201 — 201 Line of credit with Ameriprise Financial 50 — — 50 50 Other liabilities 22 — — 21 21 Separate account liabilities — investment contracts 340 — 340 — 340 (1) During the third quarter of 2020, management changed the fair value methodology for policy loans from estimating future expected cash flows and discounting the cash flows at a rate based on the U.S. Treasury curve to using the carrying value as an approximation of fair value as the policy loans are fully collateralized by the cash surrender value of the underlying policies. As a result, policy loans were reclassified from Level 3 to Level 2 in the valuation hierarchy. For comparability and consistency purposes, prior period amounts were revised to reflect the current methodology and classification. Other investments include syndicated loans and the Company’s membership in the FHLB. Other receivables include the deposit receivable. See Note 7 for additional information on mortgage loans, policy loans, syndicated loans and the deposit receivable. Policyholder account balances, future policy benefits and claims include fixed annuities in deferral status, non-life contingent fixed annuities in payout status, indexed annuity host contracts and the fixed portion of a small number of variable annuity contracts classified as investment contracts. See Note 9 for additional information on these liabilities. Short-term borrowings include FHLB borrowings. See Note 11 for further information on short-term borrowings. Other liabilities include future funding commitments to affordable housing partnerships and other real estate partnerships. Separate account liabilities are related to certain annuity products that are classified as investment contracts. |
Offsetting Assets and Liabiliti
Offsetting Assets and Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Offsetting [Abstract] | |
Offsetting Assets and Liabilities [Text Block] | Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets. The Company’s derivative instruments are subject to master netting and collateral arrangements and qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. The Company’s policy is to recognize amounts subject to master netting arrangements on a gross basis in the Consolidated Balance Sheets. The following tables present the gross and net information about the Company’s assets subject to master netting arrangements: September 30, 2020 Gross Amounts of Recognized Assets Gross Amounts Offset in the Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,085 $ — $ 5,085 $ (3,460) $ (1,594) $ (22) $ 9 OTC cleared 44 — 44 (44) — — — Exchange-traded 306 — 306 (85) (159) — 62 Total derivatives $ 5,435 $ — $ 5,435 $ (3,589) $ (1,753) $ (22) $ 71 December 31, 2019 Gross Amounts of Recognized Assets Gross Amounts Offset in the Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 4,181 $ — $ 4,181 $ (2,886) $ (1,214) $ (73) $ 8 OTC cleared 21 — 21 (21) — — — Exchange-traded 81 — 81 (5) — — 76 Total derivatives $ 4,283 $ — $ 4,283 $ (2,912) $ (1,214) $ (73) $ 84 (1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. The following tables present the gross and net information about the Company’s liabilities subject to master netting arrangements: September 30, 2020 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 3,716 $ — $ 3,716 $ (3,460) $ — $ (256) $ — OTC cleared 103 — 103 (44) — — 59 Exchange-traded 87 — 87 (85) — — 2 Total derivatives $ 3,906 $ — $ 3,906 $ (3,589) $ — $ (256) $ 61 December 31, 2019 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 3,426 $ — $ 3,426 $ (2,886) $ — $ (540) $ — OTC cleared 41 — 41 (21) — — 20 Exchange-traded 11 — 11 (5) — — 6 Total derivatives $ 3,478 $ — $ 3,478 $ (2,912) $ — $ (540) $ 26 (1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. In the tables above, the amount of assets or liabilities presented are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. The actual collateral may be greater than amounts presented in the tables. When the fair value of collateral accepted by the Company is less than the amount due to the Company, there is a risk of loss if the counterparty fails to perform or provide additional collateral. To mitigate this risk, the Company monitors collateral values regularly and requires additional collateral when necessary. When the value of collateral pledged by the Company declines, it may be required to post additional collateral. Freestanding derivative instruments are reflected in other assets and other liabilities. Cash collateral pledged by the Company is reflected in other assets and cash collateral accepted by the Company is reflected in other liabilities. See Note 14 for additional disclosures related to the Company’s derivative instruments. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities [Text Block] | 14. Derivatives and Hedging Activities Derivative instruments enable the Company to manage its exposure to various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity and interest rate indices or prices. The Company primarily enters into derivative agreements for risk management purposes related to the Company’s products and operations. Certain of the Company’s freestanding derivative instruments are subject to master netting arrangements. The Company’s policy on the recognition of derivatives on the Consolidated Balance Sheets is to not offset fair value amounts recognized for derivatives and collateral arrangements executed with the same counterparty under the same master netting arrangement. See Note 13 for additional information regarding the estimated fair value of the Company’s freestanding derivatives after considering the effect of master netting arrangements and collateral. The Company uses derivatives as economic hedges and accounting hedges. The following table presents the notional value and gross fair value of derivative instruments, including embedded derivatives: September 30, 2020 December 31, 2019 Notional Gross Fair Value Notional Gross Fair Value Assets (1) Liabilities (2) Assets (1) Liabilities (2) (in millions) Derivatives not designated as hedging instruments Interest rate contracts $ 70,691 $ 2,015 $ 934 $ 57,950 $ 1,451 $ 418 Equity contracts 62,029 3,381 2,965 60,596 2,812 3,054 Credit contracts 2,565 5 — 1,386 4 — Foreign exchange contracts 3,677 34 7 3,251 16 6 Total non-designated hedges 138,962 5,435 3,906 123,183 4,283 3,478 Embedded derivatives GMWB and GMAB (3) N/A — 2,943 N/A — 763 IUL N/A — 926 N/A — 881 Fixed deferred indexed annuities N/A — 47 N/A — 46 Structured variable annuities N/A — 9 N/A — — Total embedded derivatives N/A — 3,925 N/A — 1,690 Total derivatives $ 138,962 $ 5,435 $ 7,831 $ 123,183 $ 4,283 $ 5,168 N/A Not applicable. (1) The fair value of freestanding derivative assets is included in Other assets on the Consolidated Balance Sheets. (2) The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. (3) The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2020 included $3.0 billion of individual contracts in a liability position and $36 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2019 included $981 million of individual contracts in a liability position and $218 million of individual contracts in an asset position. See Note 12 for additional information regarding the Company’s fair value measurement of derivative instruments. As of September 30, 2020 and December 31, 2019, investment securities with a fair value of $24 million and $84 million, respectively, were received as collateral to meet contractual obligations under derivative contracts, of which $24 million and $84 million, respectively, may be sold, pledged or rehypothecated by the Company. As of both September 30, 2020 and December 31, 2019, the Company had sold, pledged, or rehypothecated none of these securities. In addition, as of both September 30, 2020 and December 31, 2019, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets. The following tables present a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income: Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses (in millions) Three Months Ended September 30, 2020 Interest rate contracts $ — $ (371) Equity contracts 42 (468) Credit contracts — (12) Foreign exchange contracts — (23) GMWB and GMAB embedded derivatives — 186 IUL embedded derivatives (29) — Fixed deferred indexed annuity embedded derivatives (3) — Structured variable annuity embedded derivatives — (3) Total gain (loss) $ 10 $ (691) Nine Months Ended September 30, 2020 Interest rate contracts $ — $ 2,204 Equity contracts (7) 58 Credit contracts — (91) Foreign exchange contracts — 26 GMWB and GMAB embedded derivatives — (2,180) IUL embedded derivatives 8 — Fixed deferred indexed annuity embedded derivatives 2 — Structured variable annuity embedded derivatives — (16) Total gain (loss) $ 3 $ 1 Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses (in millions) Three Months Ended September 30, 2019 Interest rate contracts $ — $ 805 Equity contracts 4 (97) Credit contracts — (9) Foreign exchange contracts — 10 GMWB and GMAB embedded derivatives — (756) IUL embedded derivatives 22 — Fixed deferred indexed annuity embedded derivatives — — Total gain (loss) $ 26 $ (47) Nine Months Ended September 30, 2019 Interest rate contracts $ — $ 1,765 Equity contracts 70 (981) Credit contracts — (78) GMWB and GMAB embedded derivatives — (1,124) IUL embedded derivatives (102) — Fixed deferred indexed annuity embedded derivatives (3) — Total gain (loss) $ (35) $ (418) The Company holds derivative instruments that either do not qualify or are not designated for hedge accounting treatment. These derivative instruments are used as economic hedges of equity, interest rate, credit and foreign currency exchange rate risk related to various products and transactions of the Company. Certain annuity contracts contain GMWB or GMAB provisions, which guarantee the right to make limited partial withdrawals each contract year regardless of the volatility inherent in the underlying investments or guarantee a minimum accumulation value of consideration received at the beginning of the contract period, after a specified holding period, respectively. The indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. The Company economically hedges the aggregate exposure related to the indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions using options, swaptions, swaps and futures. The deferred premium associated with certain of the above options and swaptions is paid or received semi-annually over the life of the contract or at maturity. The following is a summary of the payments the Company is scheduled to make and receive for these options and swaptions as of September 30, 2020: Premiums Payable Premiums Receivable (in millions) 2020 (1) $ 35 $ 4 2021 152 106 2022 205 205 2023 51 43 2024 140 25 2025 - 2028 379 7 Total $ 962 $ 390 (1) 2020 amounts represent the amounts payable and receivable for the period from October 1, 2020 to December 31, 2020. Actual timing and payment amounts may differ due to future settlements, modifications or exercises of the contracts prior to the full premium being paid or received. The Company has a macro hedge program to provide protection against the statutory tail scenario risk arising from variable annuity reserves on its statutory surplus and to cover some of the residual risks not covered by other hedging activities. As a means of economically hedging these risks, the Company may use a combination of futures, options, swaps and swaptions. Certain of the macro hedge derivatives may contain settlement provisions linked to both equity returns and interest rates. The Company’s macro hedge derivatives that contain settlement provisions linked to both equity returns and interest rates, if any, are shown in other contracts in the tables above. Fixed deferred indexed annuity and IUL products have returns tied to the performance of equity markets. As a result of fluctuations in equity markets, the obligation incurred by the Company related to fixed deferred indexed annuity and IUL products will positively or negatively impact earnings over the life of these products. The equity component of fixed deferred indexed annuity and IUL product obligations are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. As a means of economically hedging its obligations under the provisions of these products, the Company enters into index options and futures contracts. Cash Flow Hedges During both the nine months ended September 30, 2020 and 2019, the Company held no derivatives that were designated as cash flow hedges. During both the nine months ended September 30, 2020 and 2019, no hedge relationships were discontinued due to forecasted transactions no longer being expected to occur according to the original hedge strategy. Credit Risk Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting and collateral arrangements whenever practical. See Note 13 for additional information on the Company’s credit exposure related to derivative assets. Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s financial strength rating (or based on the debt rating of the Company’s parent, Ameriprise Financial). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company does not maintain a specific financial strength rating or Ameriprise Financial’s debt does not maintain a specific credit rating (generally an investment grade rating). If these termination provisions were to be triggered, the Company’s counterparty could require immediate settlement of any net liability position. As of September 30, 2020 and December 31, 2019, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was $176 million and $189 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of September 30, 2020 and December 31, 2019 was $176 million and $189 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position as of September 30, 2020 and December 31, 2019 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been nil as of both September 30, 2020 and December 31, 2019. |
Shareholder's Equity
Shareholder's Equity | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Shareholder's Equity [Text Block] | The following tables provide the amounts related to each component of OCI: Three Months Ended September 30, 2020 2019 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ 208 $ (44) $ 164 $ 289 $ (63) $ 226 Reclassification of net (gains) losses on securities included in net income (2) (2) — (2) 11 (2) 9 Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables (94) 20 (74) (195) 41 (154) Net unrealized gains (losses) on securities 112 (24) 88 105 (24) 81 Total other comprehensive income (loss) $ 112 $ (24) $ 88 $ 105 $ (24) $ 81 Nine Months Ended September 30, 2020 2019 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ 500 $ (107) $ 393 $ 1,410 $ (302) $ 1,108 Reclassification of net (gains) losses on securities included in net income (2) 3 (1) 2 1 — 1 Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables (223) 47 (176) (694) 146 (548) Net unrealized gains (losses) on securities 280 (61) 219 717 (156) 561 Total other comprehensive income (loss) $ 280 $ (61) $ 219 $ 717 $ (156) $ 561 (1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. (2) Reclassification amounts are recorded in net realized investment gains (losses). The following tables present the changes in the balances of each component of AOCI, net of tax: Net Unrealized Gains (Losses) on Securities Other Total (in millions) Balance, July 1, 2020 $ 706 $ (1) $ 705 OCI before reclassifications 90 — 90 Amounts reclassified from AOCI (2) — (2) Total OCI 88 — 88 Balance, September 30, 2020 $ 794 $ (1) $ 793 Balance, January 1, 2020 $ 575 $ (1) $ 574 OCI before reclassifications 217 — 217 Amounts reclassified from AOCI 2 — 2 Total OCI 219 — 219 Balance, September 30, 2020 $ 794 $ (1) $ 793 Net Unrealized Gains (Losses) on Securities Other Total (in millions) Balance, July 1, 2019 $ 526 $ (1) $ 525 OCI before reclassifications 72 — 72 Amounts reclassified from AOCI 9 — 9 Total OCI 81 — 81 Balance, September 30, 2019 $ 607 $ (1) $ 606 Balance, January 1, 2019 $ 46 $ (1) $ 45 OCI before reclassifications 560 — 560 Amounts reclassified from AOCI 1 — 1 Total OCI 561 — 561 Balance, September 30, 2019 $ 607 $ (1) $ 606 (1) Includes nil of noncredit related impairments on securities and net unrealized gains (losses) on previously impaired securities as of both September 30, 2020 and September 30, 2019. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 16. Income Taxes The Company’s effective tax rate was 23.2% and 3.3% for the three months ended September 30, 2020 and 2019, respectively. The Company’s effective tax rate was 5.7% and 2.8% for the nine months ended September 30, 2020 and 2019, respectively. The Company recorded a pretax loss for the three months ended September 30, 2020. Tax benefits applied to a pretax loss raise the effective tax rate. The effective tax rate for the three months ended September 30, 2020 is higher than the statutory rate as a result of tax benefits including low income housing tax credits and the dividends received deduction. The effective tax rate for the nine months ended September 30, 2020 is lower than the statutory rate as a result of tax preferred items including low income housing tax credits and the dividends received deduction. The effective tax rate for the three months and nine months ended September 30, 2019 is lower than the statutory rate as a result of tax preferred items including low income housing tax credits, the dividends received deduction, foreign tax credits, partially offset by lower income in the quarter relative to income expected for the full year. The increase in the effective tax rate for the three months ended September 30, 2020 compared to the prior year period is primarily the result of a pretax loss in the current quarter. The increase in the effective tax rate for the nine months ended September 30, 2020 compared to the prior year period is the result of a decrease in foreign tax credits. Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $11 million, net of federal benefit, which will expire beginning December 31, 2020. The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination, (i) future taxable income exclusive of reversing temporary differences and carryforwards, (ii) future reversals of existing taxable temporary differences, (iii) taxable income in prior carryback years, and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the results of future operations and implementation of tax planning strategies will not allow the Company to realize certain state deferred tax assets of $2 million and state net operating losses of $9 million; therefore, a valuation allowance of $11 million has been established as of both September 30, 2020 and December 31, 2019. As of September 30, 2020 and December 31, 2019, the Company had $38 million and $39 million, respectively, of gross unrecognized tax benefits. If recognized, approximately $20 million and $17 million, net of federal tax benefits, of unrecognized tax benefits as of September 30, 2020 and December 31, 2019, respectively, would affect the effective tax rate. It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits will not decrease in the next 12 months. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized nil in interest and penalties for both the three months and nine months ended September 30, 2020 and 2019. As of both September 30, 2020 and December 31, 2019, the Company had a payable of $2 million related to accrued interest and penalties. The Company files income tax returns as part of its inclusion in the consolidated federal income tax returns of Ameriprise Financial in the U.S. federal jurisdiction and various state jurisdictions. The federal statute of limitations are closed on years through 2015, except for one issue for 2014 and 2015 which was claimed on amended returns. The Internal Revenue Service (“IRS”) is currently auditing Ameriprise Financial’s U.S. income tax returns for 2016, 2017 and 2018. Ameriprise Financial’s or the Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from 2010 through 2018. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Insurance companies have been the subject of increasing regulatory, legislative and judicial scrutiny. Numerous state and federal regulatory agencies have commenced examinations and other inquiries of insurance companies regarding sales and marketing practices (including sales to older consumers and disclosure practices), claims handling, and unclaimed property and escheatment practices and procedures. The Company has cooperated and will continue to cooperate with the applicable regulators. The Company is involved in the normal course of business in a number of other legal and arbitration proceedings concerning matters arising in connection with the conduct of its business activities. The Company believes that it is not a party to, nor are any of its properties the subject of, any pending legal, arbitration or regulatory investigation, examination or proceeding that is likely to have a material adverse effect on its consolidated financial condition, results of operations or liquidity. Notwithstanding the foregoing, it is possible that the outcome of any current or future legal, arbitration or regulatory proceeding could have a material impact on results of operations in any particular reporting period as the proceedings are resolved. Uncertain economic conditions, heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the insurance industry generally. RiverSource Life Insurance Company and RiverSource Life of NY are required by law to be a member of the guaranty fund association in every state where they are licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations. The Company projects its cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations (“NOLHGA”) and the amount of its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the assessment can be reasonably estimated. The Company has a liability for estimated guaranty fund assessments and a related premium tax asset. As of both September 30, 2020 and December 31, 2019, the estimated liability was $12 million. As of both September 30, 2020 and December 31, 2019, the related premium tax asset was $10 million. The expected period over which guaranty fund assessments will be made and the related tax credits recovered is not known. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Investments | Available-for-Sale Securities Available-for-Sale securities are carried at fair value with unrealized gains (losses) recorded in accumulated other comprehensive income (“AOCI”), net of impacts to deferred acquisition costs (“DAC”), deferred sales inducement costs (“DSIC”), unearned revenue, benefit reserves, reinsurance recoverables and income taxes. Gains and losses are recognized on a trade date basis in the Consolidated Statements of Income upon disposition of the securities. Available-for-Sale securities are impaired when the fair value of an investment is less than its amortized cost. When an Available-for-Sale security is impaired, the Company first assesses whether or not: (i) it has the intent to sell the security (made a decision to sell) or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. If either of these conditions exist, the Company recognizes an impairment by reducing the book value of the security for the difference between the investment’s amortized cost and its fair value with a corresponding charge to earnings. Subsequent increases in the fair value of Available-for-Sale securities that occur in periods after a write-down has occurred are recorded as unrealized gains in other comprehensive income (“OCI”), while subsequent decreases in fair value would continue to be recorded as reductions of book value with a charge to earnings. For securities that do not meet the above criteria, the Company determines whether the decrease in fair value is due to a credit loss or due to other factors. The amount of impairment due to credit-related factors, if any, is recognized as an allowance for credit losses with a related charge to net realized investment gains (losses). The allowance for credit losses is limited to the amount by which the security’s amortized cost basis exceeds its fair value. The amount of the impairment related to other factors is recognized in OCI. Factors the Company considers in determining whether declines in the fair value of fixed maturity securities are due to credit-related factors include: (i) the extent to which the market value is below amortized cost; (ii) fundamental analysis of the liquidity, business prospects and overall financial condition of the issuer; and (iii) market events that could impact credit ratings, economic and business climate, litigation and government actions, and similar external business factors. If through subsequent evaluation there is a sustained increase in cash flows expected, both the allowance and related charge to earnings may be reversed to reflect the increase in expected principal and interest payments. However, for Available-for-Sale securities that recognized an impairment prior to January 1, 2020 by reducing the book value of the security, the difference between the new amortized cost basis and the improved cash flows expected to be collected is accreted as interest income. In order to determine the amount of the credit loss component for corporate debt securities, a best estimate of the present value of cash flows expected to be collected discounted at the security’s effective interest rate is compared to the amortized cost basis of the security. The significant inputs to cash flow projections consider potential debt restructuring terms, projected cash flows available to pay creditors and the Company’s position in the debtor’s overall capital structure. When assessing potential credit-related impairments for structured investments (e.g., residential mortgage backed securities, commercial mortgage backed securities and asset backed securities), the Company also considers credit-related factors such as overall deal structure and its position within the structure, quality of underlying collateral, delinquencies and defaults, loss severities, recoveries, prepayments and cumulative loss projections. Management has elected to exclude accrued interest in its measurement of the allowance for credit losses for Available-for-Sale securities. Accrued interest on Available-for-sale securities is recorded as earned in accrued investment income on the Consolidated Balance Sheets. Available-for-Sale securities are placed on nonaccrual status when the accrued balance becomes 90 days past due or earlier based on management’s evaluation of the facts and circumstances of each security under review. At this time all previously accrued interest is reversed through net investment income. |
Financing Receivables | Financing Receivables Financing receivables are comprised of commercial loans, policy loans, and deposit receivables. Commercial Loans Commercial loans include commercial mortgage loans and syndicated loans and are recorded at amortized cost less the allowance for loan losses. Commercial mortgage loans are recorded within mortgage loans and syndicated loans are recorded within other investments on the Consolidated Balance Sheets. Commercial mortgage loans are loans on commercial properties that are originated by the Company. Syndicated loans represent the Company’s investment in loan syndications originated by unrelated third parties. Interest income is accrued as earned on the unpaid principal balances of the loans. Interest income recognized on commercial mortgage loans and syndicated loans is recorded in net investment income on the Consolidated Statements of Income. Policy Loans Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is no allowance for credit losses. Interest income is accrued as earned on the unpaid principal balances of the loans. Interest income recognized on policy loans is recorded in accrued investment income on the Consolidated Statements of Income. Deposit Receivable For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability related to insurance risk in accordance with applicable accounting standards. If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Reinsurance deposits made are included in receivables. As amounts are received, consistent with the underlying contracts, the deposit receivable is adjusted. The deposit receivable is accreted using the interest method and the accretion is reported in other revenues. See Note 7 for additional information on financing receivables. Allowance for Credit Losses The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected over the asset’s expected life, considering past events, current conditions and reasonable and supportable forecasts of future economic conditions. Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. Estimates of expected credit losses consider both historical charge-off and recovery experience as well as management’s expectation of future charge-off and recovery levels. Expected losses related to risks other than credit risk are excluded from the allowance for credit losses. The allowance for credit losses is measured and recorded upon initial recognition of the loan, regardless of whether it is originated or purchased. The methods and information used to develop the allowance for credit losses for each class of financing receivable are discussed below. Commercial Loans The allowance for credit losses for commercial mortgage loans and syndicated loans utilizes a probability of default and loss severity approach to estimate lifetime expected credit losses. Actual historical default and loss severity data for each type of commercial loan is adjusted for current conditions and reasonable and supportable forecasts of future economic conditions to develop the probability of default and loss severity assumptions that are applied to the amortized cost basis of the loans over the expected life of each portfolio. The allowance for credit losses on commercial mortgage loans and syndicated loans is recorded through provisions charged to net realized investment gains (losses) and is reduced/increased by net charge-offs/recoveries. Management determines the adequacy of the allowance for credit losses based on the overall loan portfolio composition, recent and historical loss experience, and other pertinent factors, including when applicable, internal risk ratings, loan-to-value (“LTV”) ratios and occupancy rates, along with reasonable and supportable forecasts of economic and market conditions. This evaluation is inherently subjective as it requires estimates, which may be susceptible to significant change. While the Company may attribute portions of the allowance to specific loan pools as part of the allowance estimation process, the entire allowance is available to absorb losses expected over the life of the loan portfolio. Deposit receivable The allowance for credit losses is calculated on an individual reinsurer basis. The deposit receivable is collateralized by an underlying trust arrangement. Management evaluates the terms of the reinsurance and trust agreements, the nature of the underlying assets, and the potential for changes in the collateral value when considering the need for an allowance for credit losses. Nonaccrual Loans Commercial mortgage loans and syndicated loans are placed on nonaccrual status when either the collection of interest or principal has become 90 days past due or is otherwise considered doubtful of collection. When a loan is placed on nonaccrual status, unpaid accrued interest is reversed. Interest payments received on loans on nonaccrual status are generally applied to principal unless the remaining principal balance has been determined to be fully collectible. Management has elected to exclude accrued interest in its measurement of the allowance for credit losses for commercial mortgage loans and syndicated loans. Restructured Loans A loan is classified as a restructured loan when the Company makes certain concessionary modifications to contractual terms for borrowers experiencing financial difficulties. When the interest rate, minimum payments, and/or due dates have been modified in an attempt to make the loan more affordable to a borrower experiencing financial difficulties, the modification is considered a troubled debt restructuring. Modifications to loan terms do not automatically result in troubled debt restructurings (“TDRs”). Per the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus, modifications made on a good faith basis in response to the coronavirus disease 2019 (“COVID-19”) pandemic to borrowers who were not more than 30 days past due as of December 31, 2019, such as payment deferrals, extensions of repayment terms, fee waivers, or delays in payment that are not significant to the unpaid principal value of the loan, are not considered TDRs. Generally, performance prior to the restructuring or significant events that coincide with the restructuring are considered in assessing whether the borrower can meet the new terms which may result in the loan being returned to accrual status at the time of the restructuring or after a performance period. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan remains on nonaccrual status. Charge-off and Foreclosure Charge-offs are recorded when the Company concludes that all or a portion of the commercial mortgage loan or syndicated loan is uncollectible. Factors used by the Company to determine whether all amounts due on commercial mortgage loans will be collected, include but are not limited to, the financial condition of the borrower, performance of the underlying properties, collateral and/or guarantees on the loan, and the borrower’s estimated future ability to pay based on property type and geographic location. Factors used by the Company to determine whether all amounts due on syndicated loans will be collected, include but are not limited to the borrower’s financial condition, industry outlook, and internal risk ratings based on rating agency data and internal analyst expectations. If it is determined that foreclosure on a commercial mortgage loan is probable and the fair value is less than the current loan balance, expected credit losses are measured as the difference between the amortized cost basis of the asset and fair value less estimated selling costs. Upon foreclosure, the commercial mortgage loan and related allowance are reversed, and the foreclosed property is recorded as real estate owned in other assets. |
Reinsurance | Reinsurance Policyholder account balances, future policy benefits and claims recoverable under reinsurance contracts are recorded within receivables, net of the allowance for credit losses. The Company evaluates the financial condition of its reinsurers prior to entering into new reinsurance contracts and on a periodic basis during the contract term. The allowance for credit losses related to reinsurance recoverable is based on applying observable industry data including insurer ratings, default and loss severity data to the Company’s reinsurance recoverable balances. Management evaluates the results of the calculation and considers differences between the industry data and the Company’s data. Such differences include the fact that the Company has no actual history of losses and the fact that industry data may contain non-life insurers. This evaluation is inherently subjective as it requires estimates, which may be susceptible to significant change given the long-term nature of these receivables. In addition, the Company has a reinsurance protection agreement that provides credit protections for its reinsured long term care business. The allowance for credit losses on reinsurance recoverable is recorded through provisions charged` to benefits, claims, losses and settlement expenses on the Consolidated Statements of Income. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents disaggregated revenue from contracts with customers and a reconciliation to total revenues reported on the Consolidated Statements of Income. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Policy and contract charges Affiliated $ 44 $ 43 $ 127 $ 126 Unaffiliated 3 4 10 11 Total 47 47 137 137 Other revenues Administrative fees Affiliated 12 11 33 32 Unaffiliated 3 5 13 15 15 16 46 47 Other fees Affiliated 89 87 259 256 Unaffiliated 1 1 3 3 90 88 262 259 Total 105 104 308 306 Total revenue from contracts with customers 152 151 445 443 Revenue from other sources (1) 800 815 2,328 2,422 Total revenues $ 952 $ 966 $ 2,773 $ 2,865 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Securities Disclosure [Table Text Block] | Available-for-Sale securities distributed by type were as follows: Description of Securities September 30, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Fixed maturities: Corporate debt securities $ 10,338 $ 1,642 $ (33) $ (13) $ 11,934 Residential mortgage backed securities 3,195 122 (2) — 3,315 Commercial mortgage backed securities 4,026 228 (7) — 4,247 State and municipal obligations 1,047 288 (1) — 1,334 Asset backed securities 1,286 42 (2) — 1,326 Foreign government bonds and obligations 245 19 (2) — 262 U.S. government and agency obligations 201 — — — 201 Total $ 20,338 $ 2,341 $ (47) $ (13) $ 22,619 Description of Securities December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in millions) Fixed maturities: Corporate debt securities $ 10,188 $ 1,336 $ (2) $ 11,522 Residential mortgage backed securities 3,039 73 (4) 3,108 Commercial mortgage backed securities 3,526 95 (3) 3,618 State and municipal obligations 1,071 237 (2) 1,306 Asset backed securities 1,036 45 (1) 1,080 Foreign government bonds and obligations 250 19 (2) 267 U.S. government and agency obligations 1 — — 1 Total $ 19,111 $ 1,805 $ (14) $ 20,902 |
Fixed Maturity Securities by Rating Disclosure [Table Text Block] | A summary of fixed maturity securities by rating was as follows: Ratings September 30, 2020 December 31, 2019 Amortized Cost Fair Value Percent of Total Fair Value Amortized Cost Fair Value Percent of Total Fair Value (in millions, except percentages) AAA $ 8,030 $ 8,400 37 % $ 6,771 $ 6,950 33 % AA 1,077 1,315 6 1,176 1,374 7 A 2,574 3,118 14 2,695 3,157 15 BBB 7,088 8,152 36 7,709 8,626 41 Below investment grade 1,569 1,634 7 760 795 4 Total fixed maturities $ 20,338 $ 22,619 100 % $ 19,111 $ 20,902 100 % |
Available-for-Sale Securities Continuous Unrealized Loss Disclosure [Table Text Block] | The following tables provide information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position: Description of Securities September 30, 2020 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 69 $ 789 $ (29) 2 $ 12 $ (4) 71 $ 801 $ (33) Residential mortgage backed securities 21 304 (2) 6 10 — 27 314 (2) Commercial mortgage backed securities 23 428 (5) 6 43 (2) 29 471 (7) State and municipal obligations 4 14 (1) 1 4 — 5 18 (1) Asset backed securities 9 139 (1) 2 36 (1) 11 175 (2) Foreign government bonds and obligations 6 26 (1) 9 10 (1) 15 36 (2) Total 132 $ 1,700 $ (39) 26 $ 115 $ (8) 158 $ 1,815 $ (47) Description of Securities December 31, 2019 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 15 $ 64 $ — 7 $ 90 $ (2) 22 $ 154 $ (2) Residential mortgage backed securities 29 571 (1) 20 298 (3) 49 869 (4) Commercial mortgage backed securities 18 310 (1) 7 82 (2) 25 392 (3) State and municipal obligations 5 23 — 3 54 (2) 8 77 (2) Asset backed securities 10 111 (1) 6 54 — 16 165 (1) Foreign government bonds and obligations 1 — — 10 15 (2) 11 15 (2) Total 78 $ 1,079 $ (3) 53 $ 593 $ (11) 131 $ 1,672 $ (14) |
Rollforward of allowance for credit losses on Available-for-Sale Securities [Table Text Block] | The following tables present a rollforward of the allowance for credit losses on Available-for-Sale securities: Corporate Debt Securities (in millions) Balance, July 1, 2020 $ 13 Additions for which credit losses were not previously recognized — Balance, September 30, 2020 $ 13 Corporate Debt Securities (in millions) Balance, January 1, 2020 (1) $ — Additions for which credit losses were not previously recognized 13 Balance, September 30, 2020 $ 13 |
Net Realized Gains and Losses on Available-for-Sale Securities Disclosure [Table Text Block] | Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in net realized investment gains (losses) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Gross realized investment gains $ 2 $ 6 $ 12 $ 28 Gross realized investment losses — (2) (2) (14) Credit losses — (15) (13) (15) Total $ 2 $ (11) $ (3) $ (1) |
Available-for-Sale Securities Contractual Maturity Disclosure [Table Text Block] | Amortized Cost Fair Value (in millions) Due within one year $ 879 $ 888 Due after one year through five years 4,348 4,633 Due after five years through 10 years 2,521 2,801 Due after 10 years 4,083 5,409 11,831 13,731 Residential mortgage backed securities 3,195 3,315 Commercial mortgage backed securities 4,026 4,247 Asset backed securities 1,286 1,326 Total $ 20,338 $ 22,619 |
Schedule of Net Investment Income [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Fixed maturities $ 191 $ 205 $ 585 $ 644 Mortgage loans 29 29 86 88 Other investments (3) (6) (9) (2) 217 228 662 730 Less: investment expenses 5 6 15 18 Total $ 212 $ 222 $ 647 $ 712 |
Financing Receivables (Tables)
Financing Receivables (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Rollforward of the Allowance for Loan Losses [Table Text Block] | The following tables present a rollforward of the allowance for credit losses for the nine months ended September 30: Commercial Loans (in millions) Balance, December 31, 2019 (1) $ 20 Cumulative effect of adoption of current expected credit losses guidance 3 Balance, January 1, 2020 23 Provisions $ 13 Balance, September 30, 2020 $ 36 (1) Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. Commercial Loans (in millions) Balance, January 1, 2019 $ 20 Write-offs — Balance, September 30, 2019 $ 20 |
Schedule of Commercial Mortgage Loans by Year of Origination and Loan-to-Value Ratio [Table Text Block] | The table below presents the amortized cost basis of commercial mortgage loans as of September 30, 2020 by year of origination and loan-to-value ratio: Loan-to-Value Ratio 2020 2019 2018 2017 2016 Prior Total (in millions) > 100% $ — $ — $ 3 $ — $ — $ 10 $ 13 80% - 100% 15 16 9 3 5 21 69 60% - 80% 78 161 27 29 55 153 503 40% - 60% 13 44 74 152 107 563 953 < 40% 7 22 69 86 59 875 1,118 Total $ 113 $ 243 $ 182 $ 270 $ 226 $ 1,622 $ 2,656 |
Schedule of Commercial Mortgage Loans by Geographic Region [Table Text Block] | Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows: Loans Percentage September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 (in millions) South Atlantic $ 689 $ 705 26 % 26 % Pacific 787 792 30 30 Mountain 232 237 9 9 West North Central 195 207 7 8 East North Central 254 232 10 9 Middle Atlantic 172 167 6 6 West South Central 164 169 6 6 New England 48 47 2 2 East South Central 115 116 4 4 2,656 2,672 100 % 100 % Less: allowance for credit losses 28 17 Total $ 2,628 $ 2,655 |
Schedule of Commercial Mortgage Loans by Property Type [Table Text Block] | Concentrations of credit risk of commercial mortgage loans by property type were as follows: Loans Percentage September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 (in millions) Retail $ 860 $ 891 32 % 33 % Office 378 404 14 15 Apartments 686 660 26 25 Industrial 407 404 15 15 Mixed use 77 66 3 3 Hotel 50 51 2 2 Other 198 196 8 7 2,656 2,672 100 % 100 % Less: allowance for credit losses 28 17 Total $ 2,628 $ 2,655 |
Schedule of Syndicated Loans by Origination Year and Internal Risk Rating [Table Text Block] | The table below presents the amortized cost basis of syndicated loans as of September 30, 2020 by origination year and internal risk rating: Internal Risk Rating 2020 2019 2018 2017 2016 Prior Total (in millions) Risk 5 $ — $ — $ 1 $ — $ — $ — $ 1 Risk 4 — 4 3 7 1 7 22 Risk 3 — 3 7 22 10 19 61 Risk 2 15 40 48 53 16 36 208 Risk 1 16 30 44 44 17 30 181 Total $ 31 $ 77 $ 103 $ 126 $ 44 $ 92 $ 473 |
Deferred Acquisition Costs an_2
Deferred Acquisition Costs and Deferred Sales Inducement Costs (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Charges, Insurers [Abstract] | |
Schedule of balances of and changes in DAC | The balances of and changes in DAC were as follows: 2020 2019 (in millions) Balance at January 1 $ 2,673 $ 2,742 Capitalization of acquisition costs 155 178 Amortization (238) (127) Amortization, impact of valuation assumptions review (100) (14) Impact of change in net unrealized (gains) losses on securities (61) (175) Balance at September 30 $ 2,429 $ 2,604 |
Schedule of balances of and changes in DSIC | The balances of and changes in DSIC, which is included in other assets, were as follows: 2020 2019 (in millions) Balance at January 1 $ 216 $ 249 Capitalization of sales inducement costs 1 1 Amortization (19) (14) Amortization, impact of valuation assumptions review (16) — Impact of change in net unrealized (gains) losses on securities (1) (21) Balance at September 30 $ 181 $ 215 |
Policyholder Account Balances_2
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Policyholder Account Balances, Future Policy Benefits and Claims & Separate Account Liabilities | |
Policyholder Account Balances, Future Policy Benefits and Claims Disclosure | Policyholder account balances, future policy benefits and claims consisted of the following: September 30, 2020 December 31, 2019 (in millions) Policyholder account balances Fixed annuities (1) $ 8,623 $ 8,909 Variable annuity fixed sub-accounts 5,105 5,103 Universal life (“UL”)/variable universal life (“VUL”) insurance 3,117 3,110 Indexed universal life (“IUL”) insurance 2,189 2,025 Structured variable annuities 820 — Other life insurance 616 646 Total policyholder account balances 20,470 19,793 Future policy benefits Variable annuity guaranteed minimum withdrawal benefits (“GMWB”) 3,681 1,462 Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2) 24 (39) Other annuity liabilities 183 139 Fixed annuity life contingent liabilities 1,389 1,444 Life and disability income insurance 1,191 1,212 Long term care insurance 5,668 5,302 UL/VUL and other life insurance additional liabilities 1,228 1,033 Total future policy benefits 13,364 10,553 Policy claims and other policyholders’ funds 178 158 Total policyholder account balances, future policy benefits and claims $ 34,012 $ 30,504 (1) Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts. (2) Includes the fair value of GMAB embedded derivatives that was a net asset as of December 31, 2019 reported as a contra liability. |
Schedule of Separate Account Liabilities by Policy Type | Separate account liabilities consisted of the following: September 30, 2020 December 31, 2019 (in millions) Variable annuity $ 73,919 $ 74,965 VUL insurance 7,400 7,429 Other insurance 29 31 Total $ 81,348 $ 82,425 |
Variable Annuity and Insuranc_2
Variable Annuity and Insurance Guarantees (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Insurance [Abstract] | |
Schedule of Variable Annuity Guarantees [Table Text Block] | The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities: Variable Annuity Guarantees by Benefit Type (1) September 30, 2020 December 31, 2019 Total Contract Value Contract Value in Separate Accounts Net Amount at Risk Weighted Average Attained Age Total Contract Value Contract Value in Separate Accounts Net Amount at Risk Weighted Average Attained Age (in millions, except age) GMDB: Return of premium $ 62,475 $ 60,537 $ 16 68 $ 62,909 $ 60,967 $ 5 67 Five/six-year reset 7,700 4,966 13 68 7,983 5,263 7 67 One-year ratchet 5,722 5,389 27 71 5,935 5,600 7 70 Five-year ratchet 1,350 1,295 2 67 1,396 1,340 — 66 Other 1,183 1,164 76 73 1,192 1,174 65 73 Total — GMDB $ 78,430 $ 73,351 $ 134 68 $ 79,415 $ 74,344 $ 84 67 GGU death benefit $ 1,100 $ 1,044 $ 132 71 $ 1,115 $ 1,063 $ 133 71 GMIB $ 172 $ 158 $ 10 71 $ 186 $ 172 $ 6 70 GMWB: GMWB $ 1,871 $ 1,866 $ 1 74 $ 1,999 $ 1,993 $ 1 73 GMWB for life 46,837 46,762 391 68 46,799 46,691 272 68 Total — GMWB $ 48,708 $ 48,628 $ 392 68 $ 48,798 $ 48,684 $ 273 68 GMAB $ 2,274 $ 2,273 $ 1 61 $ 2,528 $ 2,524 $ — 60 (1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. |
Schedule of UL Secondary Guarantees [Table Text Block] | The following table provides information related to insurance guarantees for which the Company has established additional liabilities: September 30, 2020 December 31, 2019 Net Amount at Risk Weighted Average Attained Age Net Amount at Risk Weighted Average Attained Age (in millions, except age) UL secondary guarantees $ 6,600 67 $ 6,550 67 |
Schedule of Changes in Additional Liabilities for Variable Annuity and Insurance Guarantees [Table Text Block] | Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows: GMDB & GGU GMIB GMWB (1) GMAB (1) UL (in millions) Balance at January 1, 2019 $ 19 $ 8 $ 875 $ (19) $ 659 Incurred claims — (1) 1,245 — 110 Paid claims (4) — — — (34) Balance at September 30, 2019 $ 15 $ 7 $ 2,120 $ (19) $ 735 Balance at January 1, 2020 $ 16 $ 7 $ 1,462 $ (39) $ 758 Incurred claims 10 1 2,219 63 172 Paid claims (6) (1) — — (34) Balance at September 30, 2020 $ 20 $ 7 $ 3,681 $ 24 $ 896 (1) The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims. |
Schedule of Separate Account Balances By Asset Type [Table Text Block] | The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits: September 30, 2020 December 31, 2019 (in millions) Mutual funds: Equity $ 42,327 $ 44,739 Bond 24,723 23,374 Other 6,521 6,471 Total mutual funds $ 73,571 $ 74,584 |
Fair Values of Assets and Lia_2
Fair Values of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of balances of assets and liabilities measured at fair value on a recurring basis [Table Text Block] | The following tables present the balances of assets and liabilities measured at fair value on a recurring basis: September 30, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Available-for-Sale securities: Corporate debt securities $ — $ 11,198 $ 736 $ 11,934 Residential mortgage backed securities — 3,297 18 3,315 Commercial mortgage backed securities — 4,247 — 4,247 State and municipal obligations — 1,334 — 1,334 Asset backed securities — 928 398 1,326 Foreign government bonds and obligations — 262 — 262 U.S. government and agency obligations 201 — — 201 Total Available-for-Sale securities 201 21,266 1,152 22,619 Cash equivalents 2,404 1,134 — 3,538 Other assets: Interest rate derivative contracts — 2,015 — 2,015 Equity derivative contracts 441 2,940 — 3,381 Foreign exchange derivative contracts — 34 — 34 Credit derivative contracts — 5 — 5 Total other assets 441 4,994 — 5,435 Separate account assets at net asset value (“NAV”) 81,348 (1) Total assets at fair value $ 3,046 $ 27,394 $ 1,152 $ 112,940 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 3 $ 44 $ 47 IUL embedded derivatives — — 926 926 GMWB and GMAB embedded derivatives — — 2,943 2,943 (2) Structured variable annuity embedded derivatives — — 9 9 Total policyholder account balances, future policy benefits and claims — 3 3,922 3,925 (3) Other liabilities: Interest rate derivative contracts — 934 — 934 Equity derivative contracts 167 2,798 — 2,965 Foreign exchange derivative contracts 2 5 — 7 Total other liabilities 169 3,737 — 3,906 Total liabilities at fair value $ 169 $ 3,740 $ 3,922 $ 7,831 December 31, 2019 Level 1 Level 2 Level 3 Total (in millions) Assets Available-for-Sale securities: Corporate debt securities $ — $ 10,787 $ 735 $ 11,522 Residential mortgage backed securities — 3,091 17 3,108 Commercial mortgage backed securities — 3,618 — 3,618 State and municipal obligations — 1,306 — 1,306 Asset backed securities — 691 389 1,080 Foreign government bonds and obligations — 267 — 267 U.S. government and agency obligations 1 — — 1 Total Available-for-Sale securities 1 19,760 1,141 20,902 Cash equivalents — 1,256 — 1,256 Other assets: Interest rate derivative contracts — 1,451 — 1,451 Equity derivative contracts 162 2,650 — 2,812 Foreign exchange derivative contracts 1 15 — 16 Credit derivative contracts — 4 — 4 Total other assets 163 4,120 — 4,283 Separate account assets at NAV 82,425 (1) Total assets at fair value $ 164 $ 25,136 $ 1,141 $ 108,866 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 3 $ 43 $ 46 IUL embedded derivatives — — 881 881 GMWB and GMAB embedded derivatives — — 763 763 (4) Total policyholder account balances, future policy benefits and claims — 3 1,687 1,690 (5) Other liabilities: Interest rate derivative contracts — 418 — 418 Equity derivative contracts 36 3,018 — 3,054 Foreign exchange derivative contracts 1 5 — 6 Total other liabilities 37 3,441 — 3,478 Total liabilities at fair value $ 37 $ 3,444 $ 1,687 $ 5,168 (1) Amounts are comprised of certain financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. (2) The fair value of the GMWB and GMAB embedded derivatives included $3.0 billion of individual contracts in a liability position and $36 million of individual contracts in an asset position as of September 30, 2020. (3) The Company’s adjustment for nonperformance risk resulted in a $(1.0) billion cumulative increase (decrease) to the embedded derivatives as of September 30, 2020. (4) The fair value of the GMWB and GMAB embedded derivatives included $981 million of individual contracts in a liability position and $218 million of individual contracts in an asset position as of December 31, 2019. (5) The Company’s adjustment for nonperformance risk resulted in a $(502) million cumulative increase (decrease) to the embedded derivatives as of December 31, 2019. |
Summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis [Table Text Block] | The following tables provide a summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis: Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2020 $ 731 $ 56 $ 352 $ 1,139 Total gains (losses) included in: Other comprehensive income (loss) 5 — 32 37 Purchases 7 1 — 8 Settlements (7) — — (7) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ — $ — $ — $ — Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 5 $ — $ 32 $ 37 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2020 $ 41 $ 882 $ 3,129 $ 9 $ 4,061 Total (gains) losses included in: Net income 3 (1) 50 (1) (296) (2) 3 (2) (240) Issues — 15 93 (3) 105 Settlements — (21) 17 — (4) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 50 (1) $ (283) (2) $ — $ (233) Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2019 $ 790 $ 44 $ 384 $ 1,218 Total (gains) losses included in: Other comprehensive income (loss) 4 — (3) 1 Purchases 21 — — 21 Settlements (35) (2) — (37) Transfers into Level 3 — — 10 10 Balance, September 30, 2019 $ 780 $ 42 $ 391 $ 1,213 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2019 $ — $ — $ — $ — Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Total (in millions) Balance, July 1, 2019 $ 31 $ 819 $ 696 $ 1,546 Total (gains) losses included in: Net income — (5) (1) 663 (2) 658 Issues 6 25 96 127 Settlements — (17) (3) (20) Balance, September 30, 2019 $ 37 $ 822 $ 1,452 $ 2,311 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2019 $ — $ (5) (1) $ 660 (2) $ 655 Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2020 $ 735 $ 17 $ 389 $ 1,141 Total gains (losses) included in: Net income (1) — — (1) (3) Other comprehensive income (loss) 13 1 (5) 9 Purchases 13 39 — 52 Settlements (24) — — (24) Transfers into Level 3 — — 14 14 Transfers out of Level 3 — (39) — (39) Balance, September 30, 2020 $ 736 $ 18 $ 398 $ 1,152 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ (1) $ — $ — $ (1) (3) Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 13 $ 1 $ (5) $ 9 Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2020 $ 43 $ 881 $ 763 $ — $ 1,687 Total (gains) losses included in: Net income (2) (1) 53 (1) 1,900 (2) 16 (2) 1,967 Issues 3 53 267 (7) 316 Settlements — (61) 13 — (48) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 53 (1) $ 1,936 (2) $ — $ 1,989 Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2019 $ 871 $ 64 $ 374 $ 1,309 Total (gains) losses included in: Net income (1) — — (1) (3) Other comprehensive income (loss) 32 — 7 39 Purchases 35 27 — 62 Settlements (157) (3) — (160) Transfers into Level 3 — — 10 10 Transfers out of Level 3 — (46) — (46) Balance, September 30, 2019 $ 780 $ 42 $ 391 $ 1,213 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2019 $ (1) $ — $ — $ (1) (3) Policyholder Account Balances, Future Policy Benefits and Claims Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Total (in millions) Balance, January 1, 2019 $ 14 $ 628 $ 328 $ 970 Total (gains) losses included in: Net income 3 (1) 153 (1) 866 (2) 1,022 Issues 20 92 266 378 Settlements — (51) (8) (59) Balance, September 30, 2019 $ 37 $ 822 $ 1,452 $ 2,311 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2019 $ — $ 153 (1) $ 859 (2) $ 1012 (1) Included in interest credited to fixed accounts in the Consolidated Statements of Income. (2) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income. (3) Included in net investment income in the Consolidated Statements of Income. |
Significant unobservable inputs used in the fair value measurements [Table Text Block] | The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities: September 30, 2020 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 728 Discounted cash flow Yield/spread to U.S. Treasuries (1) 1.2% – 4.5% 1.9% Asset backed securities $ 398 Discounted cash flow Annual default rate 4.8% 4.8% Loss severity 25.0% 25.0% Yield/spread to swap rates (2) 300 bps – 450 bps 308 bps IUL embedded derivatives $ 926 Discounted cash flow Nonperformance risk (3) 85 bps 85 bps Fixed deferred indexed annuity embedded derivatives $ 44 Discounted cash flow Surrender rate (4) 0.0% – 50.0% 1.2% Nonperformance risk (3) 85 bps 85 bps GMWB and GMAB embedded derivatives $ 2,943 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0% – 48.0% 10.5% Surrender rate (4) 0.1% – 73.5% 3.6% Market volatility (7) (8) 4.6% – 17.9% 11.8% Nonperformance risk (3) 85 bps 85 bps Structured variable annuity embedded derivatives $ 9 Discounted cash flow Surrender rate (4) 0.8% – 40.0% 0.9% Nonperformance risk (3) 85 bps 85 bps December 31, 2019 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 735 Discounted cash flow Yield/spread to U.S. Treasuries 0.8% – 2.8% 1.3% Asset backed securities $ 389 Discounted cash flow Annual default rate 3.5% Loss severity 25.0% Yield/spread to swap rates 120 bps – 170 bps 123 bps IUL embedded derivatives $ 881 Discounted cash flow Nonperformance risk (3) 65 bps Fixed deferred indexed annuity embedded derivatives $ 43 Discounted cash flow Surrender rate 0.0% – 50.0% Nonperformance risk (3) 65 bps GMWB and GMAB embedded derivatives $ 763 Discounted cash flow Utilization of guaranteed withdrawals (5) 0.0% – 36.0% Surrender rate 0.1% – 73.5% Market volatility (7) 3.7% – 15.9% Nonperformance risk (3) 65 bps (1) The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (2) The weighted average for the spread to swap rates for asset backed securities is calculated as the sum of each tranche’s balance multiplied by its spread to swap divided by the aggregate balances of the tranches. (3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives. (4) The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula. (5) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. (6) The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals. (7) Market volatility is implied volatility of fund of funds and managed volatility funds. (8) The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. |
Schedule of carrying value and the estimated fair value of financial instruments that are not reported at fair value [Table Text Block] | The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value: September 30, 2020 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 2,628 $ — $ — $ 2,749 $ 2,749 Policy loans 849 — 849 — 849 (1) Other investments 482 — 402 69 471 Other receivables 1,449 — — 1,734 1,734 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 9,600 $ — $ — $ 11,300 $ 11,300 Short-term borrowings 200 — 200 — 200 Other liabilities 15 — — 15 15 Separate account liabilities — investment contracts 323 — 323 — 323 December 31, 2019 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 2,655 $ — $ — $ 2,707 $ 2,707 Policy loans 867 — 867 — 867 (1) Other investments 410 — 376 34 410 Other receivables 1,514 — — 1,648 1,648 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 9,110 $ — $ — $ 10,061 $ 10,061 Short-term borrowings 201 — 201 — 201 Line of credit with Ameriprise Financial 50 — — 50 50 Other liabilities 22 — — 21 21 Separate account liabilities — investment contracts 340 — 340 — 340 (1) During the third quarter of 2020, management changed the fair value methodology for policy loans from estimating future expected cash flows and discounting the cash flows at a rate based on the U.S. Treasury curve to using the carrying value as an approximation of fair value as the policy loans are fully collateralized by the cash surrender value of the underlying policies. As a result, policy loans were reclassified from Level 3 to Level 2 in the valuation hierarchy. For comparability and consistency purposes, prior period amounts were revised to reflect the current methodology and classification. |
Offsetting Assets and Liabili_2
Offsetting Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Offsetting [Abstract] | |
Schedule of Gross and Net Information About the Company's Assets Subject to Master Netting Arrangements [Table Text Block] | The following tables present the gross and net information about the Company’s assets subject to master netting arrangements: September 30, 2020 Gross Amounts of Recognized Assets Gross Amounts Offset in the Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,085 $ — $ 5,085 $ (3,460) $ (1,594) $ (22) $ 9 OTC cleared 44 — 44 (44) — — — Exchange-traded 306 — 306 (85) (159) — 62 Total derivatives $ 5,435 $ — $ 5,435 $ (3,589) $ (1,753) $ (22) $ 71 December 31, 2019 Gross Amounts of Recognized Assets Gross Amounts Offset in the Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 4,181 $ — $ 4,181 $ (2,886) $ (1,214) $ (73) $ 8 OTC cleared 21 — 21 (21) — — — Exchange-traded 81 — 81 (5) — — 76 Total derivatives $ 4,283 $ — $ 4,283 $ (2,912) $ (1,214) $ (73) $ 84 (1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Schedule of Gross and Net Information About the Company's Liabilities Subject to Master Netting Arrangements [Table Text Block] | The following tables present the gross and net information about the Company’s liabilities subject to master netting arrangements: September 30, 2020 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 3,716 $ — $ 3,716 $ (3,460) $ — $ (256) $ — OTC cleared 103 — 103 (44) — — 59 Exchange-traded 87 — 87 (85) — — 2 Total derivatives $ 3,906 $ — $ 3,906 $ (3,589) $ — $ (256) $ 61 December 31, 2019 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 3,426 $ — $ 3,426 $ (2,886) $ — $ (540) $ — OTC cleared 41 — 41 (21) — — 20 Exchange-traded 11 — 11 (5) — — 6 Total derivatives $ 3,478 $ — $ 3,478 $ (2,912) $ — $ (540) $ 26 (1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional value and gross fair value of derivative instruments, including embedded derivatives [Table Text Block] | The following table presents the notional value and gross fair value of derivative instruments, including embedded derivatives: September 30, 2020 December 31, 2019 Notional Gross Fair Value Notional Gross Fair Value Assets (1) Liabilities (2) Assets (1) Liabilities (2) (in millions) Derivatives not designated as hedging instruments Interest rate contracts $ 70,691 $ 2,015 $ 934 $ 57,950 $ 1,451 $ 418 Equity contracts 62,029 3,381 2,965 60,596 2,812 3,054 Credit contracts 2,565 5 — 1,386 4 — Foreign exchange contracts 3,677 34 7 3,251 16 6 Total non-designated hedges 138,962 5,435 3,906 123,183 4,283 3,478 Embedded derivatives GMWB and GMAB (3) N/A — 2,943 N/A — 763 IUL N/A — 926 N/A — 881 Fixed deferred indexed annuities N/A — 47 N/A — 46 Structured variable annuities N/A — 9 N/A — — Total embedded derivatives N/A — 3,925 N/A — 1,690 Total derivatives $ 138,962 $ 5,435 $ 7,831 $ 123,183 $ 4,283 $ 5,168 N/A Not applicable. (1) The fair value of freestanding derivative assets is included in Other assets on the Consolidated Balance Sheets. (2) The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. (3) The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2020 included $3.0 billion of individual contracts in a liability position and $36 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2019 included $981 million of individual contracts in a liability position and $218 million of individual contracts in an asset position. |
Schedule of gain (loss) on derivative instruments, including embedded derivatives [Table Text Block] | The following tables present a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income: Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses (in millions) Three Months Ended September 30, 2020 Interest rate contracts $ — $ (371) Equity contracts 42 (468) Credit contracts — (12) Foreign exchange contracts — (23) GMWB and GMAB embedded derivatives — 186 IUL embedded derivatives (29) — Fixed deferred indexed annuity embedded derivatives (3) — Structured variable annuity embedded derivatives — (3) Total gain (loss) $ 10 $ (691) Nine Months Ended September 30, 2020 Interest rate contracts $ — $ 2,204 Equity contracts (7) 58 Credit contracts — (91) Foreign exchange contracts — 26 GMWB and GMAB embedded derivatives — (2,180) IUL embedded derivatives 8 — Fixed deferred indexed annuity embedded derivatives 2 — Structured variable annuity embedded derivatives — (16) Total gain (loss) $ 3 $ 1 Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses (in millions) Three Months Ended September 30, 2019 Interest rate contracts $ — $ 805 Equity contracts 4 (97) Credit contracts — (9) Foreign exchange contracts — 10 GMWB and GMAB embedded derivatives — (756) IUL embedded derivatives 22 — Fixed deferred indexed annuity embedded derivatives — — Total gain (loss) $ 26 $ (47) Nine Months Ended September 30, 2019 Interest rate contracts $ — $ 1,765 Equity contracts 70 (981) Credit contracts — (78) GMWB and GMAB embedded derivatives — (1,124) IUL embedded derivatives (102) — Fixed deferred indexed annuity embedded derivatives (3) — Total gain (loss) $ (35) $ (418) |
Schedule of payments to make and receive for options and swaptions [Table Text Block] | The following is a summary of the payments the Company is scheduled to make and receive for these options and swaptions as of September 30, 2020: Premiums Payable Premiums Receivable (in millions) 2020 (1) $ 35 $ 4 2021 152 106 2022 205 205 2023 51 43 2024 140 25 2025 - 2028 379 7 Total $ 962 $ 390 (1) 2020 amounts represent the amounts payable and receivable for the period from October 1, 2020 to December 31, 2020. |
Shareholder's Equity (Tables)
Shareholder's Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of components of OCI [Table Text Block] | 15. Shareholder’s Equity The following tables provide the amounts related to each component of OCI: Three Months Ended September 30, 2020 2019 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ 208 $ (44) $ 164 $ 289 $ (63) $ 226 Reclassification of net (gains) losses on securities included in net income (2) (2) — (2) 11 (2) 9 Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables (94) 20 (74) (195) 41 (154) Net unrealized gains (losses) on securities 112 (24) 88 105 (24) 81 Total other comprehensive income (loss) $ 112 $ (24) $ 88 $ 105 $ (24) $ 81 Nine Months Ended September 30, 2020 2019 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ 500 $ (107) $ 393 $ 1,410 $ (302) $ 1,108 Reclassification of net (gains) losses on securities included in net income (2) 3 (1) 2 1 — 1 Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables (223) 47 (176) (694) 146 (548) Net unrealized gains (losses) on securities 280 (61) 219 717 (156) 561 Total other comprehensive income (loss) $ 280 $ (61) $ 219 $ 717 $ (156) $ 561 (1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. (2) Reclassification amounts are recorded in net realized investment gains (losses). |
Schedule of amounts reclassified from AOCI [Table Text Block] | The following tables present the changes in the balances of each component of AOCI, net of tax: Net Unrealized Gains (Losses) on Securities Other Total (in millions) Balance, July 1, 2020 $ 706 $ (1) $ 705 OCI before reclassifications 90 — 90 Amounts reclassified from AOCI (2) — (2) Total OCI 88 — 88 Balance, September 30, 2020 $ 794 $ (1) $ 793 Balance, January 1, 2020 $ 575 $ (1) $ 574 OCI before reclassifications 217 — 217 Amounts reclassified from AOCI 2 — 2 Total OCI 219 — 219 Balance, September 30, 2020 $ 794 $ (1) $ 793 Net Unrealized Gains (Losses) on Securities Other Total (in millions) Balance, July 1, 2019 $ 526 $ (1) $ 525 OCI before reclassifications 72 — 72 Amounts reclassified from AOCI 9 — 9 Total OCI 81 — 81 Balance, September 30, 2019 $ 607 $ (1) $ 606 Balance, January 1, 2019 $ 46 $ (1) $ 45 OCI before reclassifications 560 — 560 Amounts reclassified from AOCI 1 — 1 Total OCI 561 — 561 Balance, September 30, 2019 $ 607 $ (1) $ 606 (1) Includes nil of noncredit related impairments on securities and net unrealized gains (losses) on previously impaired securities as of both September 30, 2020 and September 30, 2019. |
Basis of Presentation (Details)
Basis of Presentation (Details) | Sep. 30, 2020item |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of wholly owned subsidiaries | 1 |
Revenue from Contract with Cust
Revenue from Contract with Customer (Disaggregation) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | ||
Revenues | ||||||
Revenue from contracts with customers | $ 152 | $ 151 | $ 445 | $ 443 | ||
Revenue from other sources | [1] | 800 | 815 | 2,328 | 2,422 | |
Total revenues | 952 | 966 | 2,773 | 2,865 | ||
Receivables related to revenues from contracts with customers | 55 | 55 | $ 55 | |||
Policy and contract charges [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | 47 | 47 | 137 | 137 | ||
Policy and contract charges [Member] | Affiliated [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | 44 | 43 | 127 | 126 | ||
Policy and contract charges [Member] | Unaffiliated [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | 3 | 4 | 10 | 11 | ||
Other revenues: Administrative Fees [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | 15 | 16 | 46 | 47 | ||
Other revenues: Administrative Fees [Member] | Affiliated [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | 12 | 11 | 33 | 32 | ||
Other revenues: Administrative Fees [Member] | Unaffiliated [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | 3 | 5 | 13 | 15 | ||
Other revenues: Other fees [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | 90 | 88 | 262 | 259 | ||
Other revenues: Other fees [Member] | Affiliated [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | 89 | 87 | 259 | 256 | ||
Other revenues: Other fees [Member] | Unaffiliated [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | 1 | 1 | 3 | 3 | ||
Total [Member] | ||||||
Revenues | ||||||
Revenue from contracts with customers | $ 105 | $ 104 | $ 308 | $ 306 | ||
[1] | Amounts primarily consist of revenue associated with insurance and annuity products or financial instruments. |
Variable Interest Entities Va_2
Variable Interest Entities Variable Interest Entities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | ||
Assets | $ 125,768 | $ 121,943 |
Liabilities | 122,303 | 118,607 |
Total fixed maturities [Member] | VIEs, not primary beneficiary [Member] | ||
Variable Interest Entity [Line Items] | ||
Obligation to provide financial or other support to VIEs | 0 | |
RiverSource Tax Advantaged Investments Inc [Member] | VIEs, not primary beneficiary [Member] | ||
Variable Interest Entity [Line Items] | ||
Assets | 202 | 270 |
Liabilities | $ 9 | $ 15 |
Investments (AFS by type) (Deta
Investments (AFS by type) (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |||
Investments | |||||
Amortized cost | $ 20,338 | ||||
Allowance for credit losses | 13 | [1] | $ 13 | $ 0 | [2] |
Fair value | 22,619 | ||||
Investments purchased from affiliate | 368 | ||||
Accrued interest excluded from amortized cost basis on Available-for-Sale securities | 167 | 158 | |||
Fair value of securities owned and pledged as collateral | 3,000 | 1,900 | |||
Fair value of securities owned and pledged as collateral which are eligible for rehypothecation | 483 | 576 | |||
Corporate debt securities [Member] | |||||
Investments | |||||
Amortized cost | 10,338 | 10,188 | |||
Gross unrealized gains | 1,642 | 1,336 | |||
Gross unrealized losses | (33) | (2) | |||
Allowance for credit losses | (13) | ||||
Fair value | 11,934 | 11,522 | |||
Residential mortgage backed securities [Member] | |||||
Investments | |||||
Amortized cost | 3,195 | 3,039 | |||
Gross unrealized gains | 122 | 73 | |||
Gross unrealized losses | (2) | (4) | |||
Allowance for credit losses | 0 | ||||
Fair value | 3,315 | 3,108 | |||
Commercial mortgage backed securities [Member] | |||||
Investments | |||||
Amortized cost | 4,026 | 3,526 | |||
Gross unrealized gains | 228 | 95 | |||
Gross unrealized losses | (7) | (3) | |||
Allowance for credit losses | 0 | ||||
Fair value | 4,247 | 3,618 | |||
State and municipal obligations [Member] | |||||
Investments | |||||
Amortized cost | 1,047 | 1,071 | |||
Gross unrealized gains | 288 | 237 | |||
Gross unrealized losses | (1) | (2) | |||
Allowance for credit losses | 0 | ||||
Fair value | 1,334 | 1,306 | |||
Asset backed securities [Member] | |||||
Investments | |||||
Amortized cost | 1,286 | 1,036 | |||
Gross unrealized gains | 42 | 45 | |||
Gross unrealized losses | (2) | (1) | |||
Allowance for credit losses | 0 | ||||
Fair value | 1,326 | 1,080 | |||
Foreign government bonds and obligations [Member] | |||||
Investments | |||||
Amortized cost | 245 | 250 | |||
Gross unrealized gains | 19 | 19 | |||
Gross unrealized losses | (2) | (2) | |||
Allowance for credit losses | 0 | ||||
Fair value | 262 | 267 | |||
U.S. government and agencies obligations [Member] | |||||
Investments | |||||
Amortized cost | 201 | 1 | |||
Fair value | 201 | 1 | |||
Total fixed maturities [Member] | |||||
Investments | |||||
Amortized cost | 20,338 | 19,111 | |||
Gross unrealized gains | 2,341 | 1,805 | |||
Gross unrealized losses | (47) | (14) | |||
Allowance for credit losses | (13) | ||||
Fair value | $ 22,619 | $ 20,902 | |||
Fixed maturity securities as percentage of total investments | 84.00% | 83.00% | |||
Fixed maturity securities rated internally | $ 574 | $ 615 | |||
[1] | Prior to January 1, 2020, the allowance for credit losses is not applicable to Available-for-Sale securities and Reinsurance recoverables. See Notes 2, 3, 6 and 7 for more information. | ||||
[2] | Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired. There is no adoption impact due to the prospective transition for Available-for-Sale securities. |
Investments (Rating info) (Deta
Investments (Rating info) (Details) $ in Millions | Sep. 30, 2020USD ($)item | Dec. 31, 2019USD ($)item |
Investments | ||
Fixed maturities, amortized cost | $ 20,338 | $ 19,111 |
Fixed maturities, fair value | $ 22,619 | $ 20,902 |
Percentage of securities rated AAA that were GNMA, FNMA and FHLMC | 37.00% | 39.00% |
Number of other investment holdings other than GNMA, FNMA and FHLMC that are greater than 10% of total equity | item | 375,000,000 | 0 |
Ameriprise Advisor Financing, LLC [Member] | ||
Investments | ||
Investment holdings of single issuer other than GNMA, FNMA and FHLMC greater than 10% of shareholders equity | $ 380 | |
AAA [Member] | ||
Investments | ||
Fixed maturities, amortized cost | $ 8,030 | 6,771 |
Fixed maturities, fair value | $ 8,400 | $ 6,950 |
Percent of total fair value | 37.00% | 33.00% |
AA [Member] | ||
Investments | ||
Fixed maturities, amortized cost | $ 1,077 | $ 1,176 |
Fixed maturities, fair value | $ 1,315 | $ 1,374 |
Percent of total fair value | 6.00% | 7.00% |
A [Member] | ||
Investments | ||
Fixed maturities, amortized cost | $ 2,574 | $ 2,695 |
Fixed maturities, fair value | $ 3,118 | $ 3,157 |
Percent of total fair value | 14.00% | 15.00% |
BBB [Member] | ||
Investments | ||
Fixed maturities, amortized cost | $ 7,088 | $ 7,709 |
Fixed maturities, fair value | $ 8,152 | $ 8,626 |
Percent of total fair value | 36.00% | 41.00% |
Below investment grade [Member] | ||
Investments | ||
Fixed maturities, amortized cost | $ 1,569 | $ 760 |
Fixed maturities, fair value | $ 1,634 | $ 795 |
Percent of total fair value | 7.00% | 4.00% |
Total fixed maturities [Member] | ||
Investments | ||
Fixed maturities, amortized cost | $ 20,338 | $ 19,111 |
Fixed maturities, fair value | $ 22,619 | $ 20,902 |
Percent of total fair value | 100.00% | 100.00% |
Investments (EITF info-Number o
Investments (EITF info-Number of securities and unrealized losses) (Details) $ in Millions | Sep. 30, 2020USD ($)item | Dec. 31, 2019USD ($)item |
Number of Securities | ||
Less than 12 months | item | 132 | 78 |
12 months or more | item | 26 | 53 |
Total | item | 158 | 131 |
Unrealized Losses | ||
Less than 12 months | $ | $ (39) | $ (3) |
12 months or more | $ | (8) | (11) |
Total | $ | $ (47) | $ (14) |
investment grade AFS securities with gross unrealized losses | 56.00% | |
Corporate debt securities [Member] | ||
Number of Securities | ||
Less than 12 months | item | 69 | 15 |
12 months or more | item | 2 | 7 |
Total | item | 71 | 22 |
Unrealized Losses | ||
Less than 12 months | $ | $ (29) | $ 0 |
12 months or more | $ | (4) | (2) |
Total | $ | $ (33) | $ (2) |
Residential mortgage backed securities [Member] | ||
Number of Securities | ||
Less than 12 months | item | 21 | 29 |
12 months or more | item | 6 | 20 |
Total | item | 27 | 49 |
Unrealized Losses | ||
Less than 12 months | $ | $ (2) | $ (1) |
12 months or more | $ | 0 | (3) |
Total | $ | $ (2) | $ (4) |
Commercial mortgage backed securities [Member] | ||
Number of Securities | ||
Less than 12 months | item | 23 | 18 |
12 months or more | item | 6 | 7 |
Total | item | 29 | 25 |
Unrealized Losses | ||
Less than 12 months | $ | $ (5) | $ (1) |
12 months or more | $ | (2) | (2) |
Total | $ | $ (7) | $ (3) |
State and municipal obligations [Member] | ||
Number of Securities | ||
Less than 12 months | item | 4 | 5 |
12 months or more | item | 1 | 3 |
Total | item | 5 | 8 |
Unrealized Losses | ||
Less than 12 months | $ | $ (1) | $ 0 |
12 months or more | $ | 0 | (2) |
Total | $ | $ (1) | $ (2) |
Asset backed securities [Member] | ||
Number of Securities | ||
Less than 12 months | item | 9 | 10 |
12 months or more | item | 2 | 6 |
Total | item | 11 | 16 |
Unrealized Losses | ||
Less than 12 months | $ | $ (1) | $ (1) |
12 months or more | $ | (1) | 0 |
Total | $ | $ (2) | $ (1) |
Foreign government bonds and obligations [Member] | ||
Number of Securities | ||
Less than 12 months | item | 6 | 1 |
12 months or more | item | 9 | 10 |
Total | item | 15 | 11 |
Unrealized Losses | ||
Less than 12 months | $ | $ (1) | $ 0 |
12 months or more | $ | (1) | (2) |
Total | $ | $ (2) | $ (2) |
Investments (EITF info-Fair val
Investments (EITF info-Fair value) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value [Line Items] | ||
Less than 12 months | $ 1,700 | $ 1,079 |
12 months or more | 115 | 593 |
Total | 1,815 | 1,672 |
Corporate debt securities [Member] | ||
Fair Value [Line Items] | ||
Less than 12 months | 789 | 64 |
12 months or more | 12 | 90 |
Total | 801 | 154 |
Residential mortgage backed securities [Member] | ||
Fair Value [Line Items] | ||
Less than 12 months | 304 | 571 |
12 months or more | 10 | 298 |
Total | 314 | 869 |
Commercial mortgage backed securities [Member] | ||
Fair Value [Line Items] | ||
Less than 12 months | 428 | 310 |
12 months or more | 43 | 82 |
Total | 471 | 392 |
State and municipal obligations [Member] | ||
Fair Value [Line Items] | ||
Less than 12 months | 14 | 23 |
12 months or more | 4 | 54 |
Total | 18 | 77 |
Asset backed securities [Member] | ||
Fair Value [Line Items] | ||
Less than 12 months | 139 | 111 |
12 months or more | 36 | 54 |
Total | 175 | 165 |
Foreign government bonds and obligations [Member] | ||
Fair Value [Line Items] | ||
Less than 12 months | 26 | 0 |
12 months or more | 10 | 15 |
Total | $ 36 | $ 15 |
Investments Investments (Allowa
Investments Investments (Allowance for credit losses rollforward) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | |||
Rollforward of available-for-Sale securities allowance for credit losses | ||||
Beginning balance | $ 13 | $ 0 | [1] | |
Additions for which credit losses were not previously recognized | 0 | 13 | ||
Ending balance | [2] | $ 13 | $ 13 | |
[1] | Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired. There is no adoption impact due to the prospective transition for Available-for-Sale securities. | |||
[2] | Prior to January 1, 2020, the allowance for credit losses is not applicable to Available-for-Sale securities and Reinsurance recoverables. See Notes 2, 3, 6 and 7 for more information. |
Investments Investments (Realiz
Investments Investments (Realized GL info) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Securities, Available-for-sale, Realized Gain (Loss) [Abstract] | ||||
Gross realized investment gains | $ 2 | $ 6 | $ 12 | $ 28 |
Gross realized investment losses | (2) | (2) | (14) | |
Credit Losses | (15) | (13) | (15) | |
Total | $ 2 | $ (11) | $ (3) | $ (1) |
Investments (AFS contractual ma
Investments (AFS contractual maturity) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Due within one year | $ 879 | |
Due after one year through five years | 4,348 | |
Due after five years through 10 years | 2,521 | |
Due after 10 years | 4,083 | |
Total having single maturity dates | 11,831 | |
Amortized cost | 20,338 | |
Fair Value | ||
Due within one year | 888 | |
Due after one year through five years | 4,633 | |
Due after five years through 10 years | 2,801 | |
Due after 10 years | 5,409 | |
Total having single maturity dates | 13,731 | |
Total fair value | 22,619 | |
Residential mortgage backed securities [Member] | ||
Amortized Cost | ||
Without single maturity dates | 3,195 | |
Amortized cost | 3,195 | $ 3,039 |
Fair Value | ||
Without single maturity dates | 3,315 | |
Total fair value | 3,315 | 3,108 |
Commercial mortgage backed securities [Member] | ||
Amortized Cost | ||
Without single maturity dates | 4,026 | |
Amortized cost | 4,026 | 3,526 |
Fair Value | ||
Without single maturity dates | 4,247 | |
Total fair value | 4,247 | 3,618 |
Asset backed securities [Member] | ||
Amortized Cost | ||
Without single maturity dates | 1,286 | |
Amortized cost | 1,286 | 1,036 |
Fair Value | ||
Without single maturity dates | 1,326 | |
Total fair value | $ 1,326 | $ 1,080 |
Investments (Net Inv Inc summar
Investments (Net Inv Inc summary) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net Investment Income [Line Items] | ||||
Gross investment income | $ 217 | $ 228 | $ 662 | $ 730 |
Less: investment expenses | 5 | 6 | 15 | 18 |
Total | 212 | 222 | 647 | 712 |
Fixed maturities [Member] | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 191 | 205 | 585 | 644 |
Mortgage loans [Member] | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 29 | 29 | 86 | 88 |
Other investments [Member] | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | $ 3 | $ 6 | $ 9 | $ 2 |
Financing Receivables (Allowanc
Financing Receivables (Allowance for Credit Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | ||
Commercial loans [Member] | ||||||
Rollforward of the allowance for loan losses | ||||||
Beginning balance | $ 20 | [1] | $ 20 | |||
Provisions | 13 | |||||
Write-offs | $ 0 | |||||
Ending balance | $ 36 | 20 | 36 | 20 | ||
Accrued interest on commercial loans | 11 | 11 | $ 11 | |||
Commercial loans [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||
Rollforward of the allowance for loan losses | ||||||
Beginning balance | 3 | |||||
Commercial loans [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | ||||||
Rollforward of the allowance for loan losses | ||||||
Beginning balance | 23 | |||||
Syndicated loans [Member] | ||||||
Rollforward of the allowance for loan losses | ||||||
Loans purchased | 84 | 39 | 134 | 94 | ||
Loans sold | $ 2 | $ 11 | $ 9 | $ 32 | ||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Financing Receivables (Credit Q
Financing Receivables (Credit Quality Information Text) (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2020USD ($)loan | Sep. 30, 2020USD ($)loan | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Nonperforming | ||||||
Credit quality information [Line Items] | ||||||
Past due | $ 8,000,000 | $ 8,000,000 | $ 9,000,000 | |||
Syndicated loans [Member] | ||||||
Credit quality information [Line Items] | ||||||
Past due | 4,000,000 | 4,000,000 | 1,000,000 | |||
Total loans, net | 471,000,000 | 471,000,000 | 395,000,000 | |||
Loans purchased | 84,000,000 | $ 39,000,000 | 134,000,000 | $ 94,000,000 | ||
Loans sold | 2,000,000 | $ 11,000,000 | 9,000,000 | $ 32,000,000 | ||
Commercial mortgage loans [Member] | ||||||
Credit quality information [Line Items] | ||||||
Past due | $ 6,000,000 | $ 6,000,000 | $ 0 | |||
Percent of commercial mortgage loans with highest risk rating | 1.00% | 1.00% | 1.00% | |||
Total loans, net | $ 2,656,000,000 | $ 2,656,000,000 | $ 2,672,000,000 | |||
Financing Receivable, Modifications, Number of Contracts | loan | 88 | 23 | ||||
Impaired Financing Receivable, Unpaid Principal Balance | 122,000,000 | $ 360 | $ 122,000,000 | |||
Commercial loans [Member] | ||||||
Credit quality information [Line Items] | ||||||
Accrued interest on commercial loans | $ 11,000,000 | $ 11,000,000 | $ 11,000,000 |
Financing Receivables (Credit_2
Financing Receivables (Credit Quality Information Tables) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Syndicated loans [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | $ 31 | |
Originated in 2019 | 77 | |
Originated in 2018 | 103 | |
Originated in 2017 | 126 | |
Originated in 2016 | 44 | |
Originated prior to 2016 | 92 | |
Total loans, gross | 471 | $ 395 |
Syndicated loans [Member] | Internal Risk Rating 5 [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 0 | |
Originated in 2019 | 0 | |
Originated in 2018 | 1 | |
Originated in 2017 | 0 | |
Originated in 2016 | 0 | |
Originated prior to 2016 | 0 | |
Total loans, gross | 1 | |
Syndicated loans [Member] | Internal Risk Rating 4 [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 0 | |
Originated in 2019 | 4 | |
Originated in 2018 | 3 | |
Originated in 2017 | 7 | |
Originated in 2016 | 1 | |
Originated prior to 2016 | 7 | |
Total loans, gross | 22 | |
Syndicated loans [Member] | Internal Risk Rating 3 [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 0 | |
Originated in 2019 | 3 | |
Originated in 2018 | 7 | |
Originated in 2017 | 22 | |
Originated in 2016 | 10 | |
Originated prior to 2016 | 19 | |
Total loans, gross | 61 | |
Syndicated loans [Member] | Internal Risk Rating 2 [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 15 | |
Originated in 2019 | 40 | |
Originated in 2018 | 48 | |
Originated in 2017 | 53 | |
Originated in 2016 | 16 | |
Originated prior to 2016 | 36 | |
Total loans, gross | 208 | |
Syndicated loans [Member] | Internal Risk Rating 1 [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 16 | |
Originated in 2019 | 30 | |
Originated in 2018 | 44 | |
Originated in 2017 | 44 | |
Originated in 2016 | 17 | |
Originated prior to 2016 | 30 | |
Total loans, gross | 181 | |
Syndicated loans [Member] | Assets, Total | ||
Commercial loans [Line Items] | ||
Total loans, gross | 473 | |
Commercial mortgage loans [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 113 | |
Originated in 2019 | 243 | |
Originated in 2018 | 182 | |
Originated in 2017 | 270 | |
Originated in 2016 | 226 | |
Originated prior to 2016 | 1,622 | |
Total loans, gross | 2,656 | 2,672 |
Less: allowance for loan losses | 28 | 17 |
Total loans, net | $ 2,628 | $ 2,655 |
Percentage of commercial mortgage loans | 100.00% | 100.00% |
Commercial mortgage loans [Member] | Retail [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 860 | $ 891 |
Percentage of commercial mortgage loans | 32.00% | 33.00% |
Commercial mortgage loans [Member] | Office [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 378 | $ 404 |
Percentage of commercial mortgage loans | 14.00% | 15.00% |
Commercial mortgage loans [Member] | Apartments [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 686 | $ 660 |
Percentage of commercial mortgage loans | 26.00% | 25.00% |
Commercial mortgage loans [Member] | Industrial [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 407 | $ 404 |
Percentage of commercial mortgage loans | 15.00% | 15.00% |
Commercial mortgage loans [Member] | Mixed use [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 77 | $ 66 |
Percentage of commercial mortgage loans | 3.00% | 3.00% |
Commercial mortgage loans [Member] | Hotel [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 50 | $ 51 |
Percentage of commercial mortgage loans | 2.00% | 2.00% |
Commercial mortgage loans [Member] | Other [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 198 | $ 196 |
Percentage of commercial mortgage loans | 8.00% | 7.00% |
Commercial mortgage loans [Member] | South Atlantic [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 689 | $ 705 |
Percentage of commercial mortgage loans | 26.00% | 26.00% |
Commercial mortgage loans [Member] | Pacific [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 787 | $ 792 |
Percentage of commercial mortgage loans | 30.00% | 30.00% |
Commercial mortgage loans [Member] | Mountain [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 232 | $ 237 |
Percentage of commercial mortgage loans | 9.00% | 9.00% |
Commercial mortgage loans [Member] | West North Central [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 195 | $ 207 |
Percentage of commercial mortgage loans | 7.00% | 8.00% |
Commercial mortgage loans [Member] | East North Central [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 254 | $ 232 |
Percentage of commercial mortgage loans | 10.00% | 9.00% |
Commercial mortgage loans [Member] | Middle Atlantic [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 172 | $ 167 |
Percentage of commercial mortgage loans | 6.00% | 6.00% |
Commercial mortgage loans [Member] | West South Central [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 164 | $ 169 |
Percentage of commercial mortgage loans | 6.00% | 6.00% |
Commercial mortgage loans [Member] | New England [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 48 | $ 47 |
Percentage of commercial mortgage loans | 2.00% | 2.00% |
Commercial mortgage loans [Member] | East South Central [Member] | ||
Commercial loans [Line Items] | ||
Total loans, gross | $ 115 | $ 116 |
Percentage of commercial mortgage loans | 4.00% | 4.00% |
Commercial mortgage loans [Member] | Greater than 100 Percent [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | $ 0 | |
Originated in 2019 | 0 | |
Originated in 2018 | 3 | |
Originated in 2017 | 0 | |
Originated in 2016 | 0 | |
Originated prior to 2016 | 10 | |
Total loans, gross | 13 | |
Commercial mortgage loans [Member] | 80 to 100 Percent [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 15 | |
Originated in 2019 | 16 | |
Originated in 2018 | 9 | |
Originated in 2017 | 3 | |
Originated in 2016 | 5 | |
Originated prior to 2016 | 21 | |
Total loans, gross | 69 | |
Commercial mortgage loans [Member] | 60 to 80 Percent [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 78 | |
Originated in 2019 | 161 | |
Originated in 2018 | 27 | |
Originated in 2017 | 29 | |
Originated in 2016 | 55 | |
Originated prior to 2016 | 153 | |
Total loans, gross | 503 | |
Commercial mortgage loans [Member] | 40 to 60 Percent [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 13 | |
Originated in 2019 | 44 | |
Originated in 2018 | 74 | |
Originated in 2017 | 152 | |
Originated in 2016 | 107 | |
Originated prior to 2016 | 563 | |
Total loans, gross | 953 | |
Commercial mortgage loans [Member] | Less than 40 Percent [Member] | ||
Commercial loans [Line Items] | ||
Originated in 2020 | 7 | |
Originated in 2019 | 22 | |
Originated in 2018 | 69 | |
Originated in 2017 | 86 | |
Originated in 2016 | 59 | |
Originated prior to 2016 | 875 | |
Total loans, gross | $ 1,118 |
Financing Receivables (Reinsura
Financing Receivables (Reinsurance Deposit Receivable) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Reinsurance deposit receivable | $ 1,400 | $ 1,500 |
Financing Receivables (Troubled
Financing Receivables (Troubled Debt Restructurings) (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Loans restructured | $ 0 | $ 0 |
Commitments to lend additional funds to borrowers for restructured loans | $ 0 |
Deferred Acquisition Costs an_3
Deferred Acquisition Costs and Deferred Sales Inducement Costs (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Balances of and changes in DAC | ||
Balance at the beginning of the period | $ 2,673 | $ 2,742 |
Capitalization of acquisition costs | 155 | 178 |
Amortization | (238) | (127) |
Amortization, impact of valuation assumptions review | 100 | 14 |
Impact of change in net unrealized (gains) losses on securities | (61) | (175) |
Balance at the end of the period | 2,429 | 2,604 |
Balances of and changes in DSIC | ||
Balance at the beginning of the period | 216 | 249 |
Deferred Sale Inducement Cost, Capitalization | 1 | 1 |
Amortization | (19) | (14) |
Amortization, impact of valuation assumptions review | 16 | 0 |
Impact of change in net unrealized (gains) losses on securities | (1) | (21) |
Balance at the end of the period | $ 181 | $ 215 |
Policyholder Account Balances_3
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities (Balances by product) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Policyholder account balances | $ 20,470 | $ 19,793 | |
Future policy benefits | 13,364 | 10,553 | |
Policy claims and other policyholders’ funds | 178 | 158 | |
Total policyholder account balances, future policy benefits and claims | 34,012 | 30,504 | |
Fixed annuities [Member] | |||
Policyholder account balances | [1] | 8,623 | 8,909 |
Variable annuity fixed sub-accounts [Member] | |||
Policyholder account balances | 5,105 | 5,103 | |
UL/VUL insurance [Member] | |||
Policyholder account balances | 3,117 | 3,110 | |
IUL [Member] | |||
Policyholder account balances | 2,189 | 2,025 | |
Structured Variable Annuities [Member] | |||
Policyholder account balances | 820 | 0 | |
Other life Insurance [Member] | |||
Policyholder account balances | 616 | 646 | |
Variable annuity GMWB [Member] | |||
Future policy benefits | 3,681 | 1,462 | |
Variable annuity GMAB [Member] | |||
Future policy benefits | [2] | 24 | (39) |
Other annuity liabilities [Member] | |||
Future policy benefits | 183 | 139 | |
Fixed annuity life contingent liabilities [Member] | |||
Future policy benefits | 1,389 | 1,444 | |
Life and disability income insurance [Member] | |||
Future policy benefits | 1,191 | 1,212 | |
Long term care insurance [Member] | |||
Future policy benefits | 5,668 | 5,302 | |
UL/VUL and other life insurance additional liabilities [Member] | |||
Future policy benefits | $ 1,228 | $ 1,033 | |
[1] | Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts. | ||
[2] | Includes the fair value of GMAB embedded derivatives that was a net asset as of December 31, 2019 reported as a contra liability. |
Policyholder Account Balances_4
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities (Separate Account Liabilities) (Details 2) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Separate Accounts Disclosure [Abstract] | ||
Variable annuity | $ 73,919 | $ 74,965 |
VUL insurance | 7,400 | 7,429 |
Other insurance | 29 | 31 |
Total | $ 81,348 | $ 82,425 |
Variable Annuity and Insuranc_3
Variable Annuity and Insurance Guarantees (VA Guarantees Details) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | ||
GMDB [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 78,430 | $ 79,415 |
Contract value in separate accounts | [1] | 73,351 | 74,344 |
Net amount at risk | [1] | $ 134 | $ 84 |
Weighted average attained age | [1] | 68 years | 67 years |
GMDB [Member] | Return of premium [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 62,475 | $ 62,909 |
Contract value in separate accounts | [1] | 60,537 | 60,967 |
Net amount at risk | [1] | $ 16 | $ 5 |
Weighted average attained age | [1] | 68 years | 67 years |
GMDB [Member] | Five/six-year reset [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 7,700 | $ 7,983 |
Contract value in separate accounts | [1] | 4,966 | 5,263 |
Net amount at risk | [1] | $ 13 | $ 7 |
Weighted average attained age | [1] | 68 years | 67 years |
GMDB [Member] | One-year ratchet [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 5,722 | $ 5,935 |
Contract value in separate accounts | [1] | 5,389 | 5,600 |
Net amount at risk | [1] | $ 27 | $ 7 |
Weighted average attained age | [1] | 71 years | 70 years |
GMDB [Member] | Five-year ratchet [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 1,350 | $ 1,396 |
Contract value in separate accounts | [1] | 1,295 | 1,340 |
Net amount at risk | [1] | $ 2 | $ 0 |
Weighted average attained age | [1] | 67 years | 66 years |
GMDB [Member] | Other [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 1,183 | $ 1,192 |
Contract value in separate accounts | [1] | 1,164 | 1,174 |
Net amount at risk | [1] | $ 76 | $ 65 |
Weighted average attained age | [1] | 73 years | 73 years |
GGU death benefit [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 1,100 | $ 1,115 |
Contract value in separate accounts | [1] | 1,044 | 1,063 |
Net amount at risk | [1] | $ 132 | $ 133 |
Weighted average attained age | [1] | 71 years | 71 years |
GMIB [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 172 | $ 186 |
Contract value in separate accounts | [1] | 158 | 172 |
Net amount at risk | [1] | $ 10 | $ 6 |
Weighted average attained age | [1] | 71 years | 70 years |
GMWB [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 48,708 | $ 48,798 |
Contract value in separate accounts | [1] | 48,628 | 48,684 |
Net amount at risk | [1] | $ 392 | $ 273 |
Weighted average attained age | [1] | 68 years | 68 years |
GMWB [Member] | GMWB standard benefit [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 1,871 | $ 1,999 |
Contract value in separate accounts | [1] | 1,866 | 1,993 |
Net amount at risk | [1] | $ 1 | $ 1 |
Weighted average attained age | [1] | 74 years | 73 years |
GMWB [Member] | GMWB for life [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 46,837 | $ 46,799 |
Contract value in separate accounts | [1] | 46,762 | 46,691 |
Net amount at risk | [1] | $ 391 | $ 272 |
Weighted average attained age | [1] | 68 years | 68 years |
GMAB [Member] | |||
Variable Annuity Guarantees by Benefit Type | |||
Total contract value | [1] | $ 2,274 | $ 2,528 |
Contract value in separate accounts | [1] | 2,273 | 2,524 |
Net amount at risk | [1] | $ 1 | $ 0 |
Weighted average attained age | [1] | 61 years | 60 years |
[1] | Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. |
Variable Annuity and Insuranc_4
Variable Annuity and Insurance Guarantees Variable Annuity and Insurance Guarantees (UL Secondary Guarantees) (Details) - UL secondary guarantees [Member] - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Insurance Guarantees by Benefit Type | ||
Net amount at risk | $ 6,600 | $ 6,550 |
Weighted average attained age | 67 years | 67 years |
Variable Annuity and Insuranc_5
Variable Annuity and Insurance Guarantees (Liability Rollforward) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
GMDB & GGU [Member] | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | $ 16 | $ 19 | |
Incurred claims | 10 | 0 | |
Paid claims | (6) | (4) | |
Ending Balance | 20 | 15 | |
GMIB [Member] | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | 7 | 8 | |
Incurred claims | (1) | (1) | |
Paid claims | 1 | ||
Ending Balance | 7 | 7 | |
GMWB [Member] | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | 1,462 | 875 | |
Incurred claims | [1] | 2,219 | 1,245 |
Ending Balance | 3,681 | 2,120 | |
GMAB [Member] | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | (39) | 19 | |
Incurred claims | [1] | 63 | 0 |
Ending Balance | 24 | 19 | |
UL [Member] | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | 758 | 659 | |
Incurred claims | 172 | 110 | |
Paid claims | (34) | (34) | |
Ending Balance | $ 896 | $ 735 | |
[1] | The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims. |
Variable Annuity and Insuranc_6
Variable Annuity and Insurance Guarantees (Separate Account Balances by Type) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Mutual funds | ||
Variable Annuity and Insurance Guarantees | ||
Total mutual funds | $ 73,571 | $ 74,584 |
Equity [Member] | ||
Variable Annuity and Insurance Guarantees | ||
Total mutual funds | 42,327 | 44,739 |
Bond [Member] | ||
Variable Annuity and Insurance Guarantees | ||
Total mutual funds | 24,723 | 23,374 |
Other [Member] | ||
Variable Annuity and Insurance Guarantees | ||
Total mutual funds | $ 6,521 | $ 6,471 |
Short-term Borrowings (Details)
Short-term Borrowings (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Borrowings | ||
Amount of the liability including accrued interest | $ 200 | $ 201 |
Federal Home Loan Bank [Member] | ||
Borrowings | ||
Amount of the liability including accrued interest | $ 200 | $ 201 |
Remaining maturity of outstanding amount of short term borrowings | 2 months | 2 months |
Weighted average annualized interest rate | 0.40% | 1.80% |
Commercial mortgage backed securities [Member] | Federal Home Loan Bank [Member] | ||
Borrowings | ||
Securities pledged as collateral | $ 1,200 | $ 840 |
Fair Values of Assets and Lia_3
Fair Values of Assets and Liabilities (Recurring) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | ||||
Assets | |||||
Available-for-Sale securities | $ 22,619 | $ 20,902 | |||
Separate account assets at NAV | 81,348 | 82,425 | |||
Liabilities | |||||
Individual contracts in a liability position | [1] | 7,831 | 5,168 | ||
Individual contracts in an asset position | [2] | 5,435 | 4,283 | ||
Cumulative increase (decrease) in embedded derivatives of adjustment for nonperformance risk | (1,000) | (502) | |||
GMWB and GMAB embedded derivatives [Member] | |||||
Liabilities | |||||
Individual contracts in a liability position | 3,000 | 981 | |||
Individual contracts in an asset position | 36 | 218 | |||
Recurring basis [Member] | |||||
Assets | |||||
Available-for-Sale securities | 22,619 | 20,902 | |||
Cash equivalents | 3,538 | 1,256 | |||
Other assets | 5,435 | 4,283 | |||
Separate account assets at NAV | [3] | 81,348 | 82,425 | ||
Total assets at fair value | 112,940 | 108,866 | |||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 3,925 | [4] | 1,690 | [5] | |
Other liabilities | 3,906 | 3,478 | |||
Total liabilities at fair value | 7,831 | 5,168 | |||
Recurring basis [Member] | Interest rate derivative contracts [Member] | |||||
Assets | |||||
Other assets | 2,015 | 1,451 | |||
Liabilities | |||||
Other liabilities | 934 | 418 | |||
Recurring basis [Member] | Equity derivative contracts [Member] | |||||
Assets | |||||
Other assets | 3,381 | 2,812 | |||
Liabilities | |||||
Other liabilities | 2,965 | 3,054 | |||
Recurring basis [Member] | Foreign exchange derivative contracts [Member] | |||||
Assets | |||||
Other assets | 34 | 16 | |||
Liabilities | |||||
Other liabilities | 7 | 6 | |||
Recurring basis [Member] | Credit derivative contracts [Member] | |||||
Assets | |||||
Other assets | 5 | 4 | |||
Recurring basis [Member] | Fixed deferred indexed annuity embedded derivatives [Member] | |||||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 47 | 46 | |||
Recurring basis [Member] | IUL embedded derivatives [Member] | |||||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 926 | 881 | |||
Recurring basis [Member] | GMWB and GMAB embedded derivatives [Member] | |||||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 2,943 | [6] | 763 | [7] | |
Recurring basis [Member] | Structured annuity embedded derivatives [Member] | |||||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 9 | ||||
Recurring basis [Member] | Corporate debt securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 11,934 | 11,522 | |||
Recurring basis [Member] | Residential mortgage backed securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 3,315 | 3,108 | |||
Recurring basis [Member] | Commercial mortgage backed securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 4,247 | 3,618 | |||
Recurring basis [Member] | State and municipal obligations [Member] | |||||
Assets | |||||
Available-for-Sale securities | 1,334 | 1,306 | |||
Recurring basis [Member] | Asset backed securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 1,326 | 1,080 | |||
Recurring basis [Member] | Foreign government bonds and obligations [Member] | |||||
Assets | |||||
Available-for-Sale securities | 262 | 267 | |||
Recurring basis [Member] | U.S. government and agencies obligations [Member] | |||||
Assets | |||||
Available-for-Sale securities | 201 | 1 | |||
Level 1 [Member] | Recurring basis [Member] | |||||
Assets | |||||
Available-for-Sale securities | 201 | 1 | |||
Cash equivalents | 2,404 | ||||
Other assets | 441 | 163 | |||
Total assets at fair value | 3,046 | 164 | |||
Liabilities | |||||
Other liabilities | 169 | 37 | |||
Total liabilities at fair value | 169 | 37 | |||
Level 1 [Member] | Recurring basis [Member] | Equity derivative contracts [Member] | |||||
Assets | |||||
Other assets | 441 | 162 | |||
Liabilities | |||||
Other liabilities | 167 | 36 | |||
Level 1 [Member] | Recurring basis [Member] | Foreign exchange derivative contracts [Member] | |||||
Assets | |||||
Other assets | 1 | ||||
Liabilities | |||||
Other liabilities | 2 | 1 | |||
Level 1 [Member] | Recurring basis [Member] | U.S. government and agencies obligations [Member] | |||||
Assets | |||||
Available-for-Sale securities | 201 | 1 | |||
Level 2 [Member] | Recurring basis [Member] | |||||
Assets | |||||
Available-for-Sale securities | 21,266 | 19,760 | |||
Cash equivalents | 1,134 | 1,256 | |||
Other assets | 4,994 | 4,120 | |||
Total assets at fair value | 27,394 | 25,136 | |||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 3 | 3 | |||
Other liabilities | 3,737 | 3,441 | |||
Total liabilities at fair value | 3,740 | 3,444 | |||
Level 2 [Member] | Recurring basis [Member] | Interest rate derivative contracts [Member] | |||||
Assets | |||||
Other assets | 2,015 | 1,451 | |||
Liabilities | |||||
Other liabilities | 934 | 418 | |||
Level 2 [Member] | Recurring basis [Member] | Equity derivative contracts [Member] | |||||
Assets | |||||
Other assets | 2,940 | 2,650 | |||
Liabilities | |||||
Other liabilities | 2,798 | 3,018 | |||
Level 2 [Member] | Recurring basis [Member] | Foreign exchange derivative contracts [Member] | |||||
Assets | |||||
Other assets | 34 | 15 | |||
Liabilities | |||||
Other liabilities | 5 | 5 | |||
Level 2 [Member] | Recurring basis [Member] | Credit derivative contracts [Member] | |||||
Assets | |||||
Other assets | 5 | 4 | |||
Level 2 [Member] | Recurring basis [Member] | Fixed deferred indexed annuity embedded derivatives [Member] | |||||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 3 | 3 | |||
Level 2 [Member] | Recurring basis [Member] | Corporate debt securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 11,198 | 10,787 | |||
Level 2 [Member] | Recurring basis [Member] | Residential mortgage backed securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 3,297 | 3,091 | |||
Level 2 [Member] | Recurring basis [Member] | Commercial mortgage backed securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 4,247 | 3,618 | |||
Level 2 [Member] | Recurring basis [Member] | State and municipal obligations [Member] | |||||
Assets | |||||
Available-for-Sale securities | 1,334 | 1,306 | |||
Level 2 [Member] | Recurring basis [Member] | Asset backed securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 928 | 691 | |||
Level 2 [Member] | Recurring basis [Member] | Foreign government bonds and obligations [Member] | |||||
Assets | |||||
Available-for-Sale securities | 262 | 267 | |||
Level 3 [Member] | Recurring basis [Member] | |||||
Assets | |||||
Available-for-Sale securities | 1,152 | 1,141 | |||
Total assets at fair value | 1,152 | 1,141 | |||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 3,922 | 1,687 | |||
Total liabilities at fair value | 3,922 | 1,687 | |||
Level 3 [Member] | Recurring basis [Member] | Fixed deferred indexed annuity embedded derivatives [Member] | |||||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 44 | 43 | |||
Level 3 [Member] | Recurring basis [Member] | IUL embedded derivatives [Member] | |||||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 926 | 881 | |||
Level 3 [Member] | Recurring basis [Member] | GMWB and GMAB embedded derivatives [Member] | |||||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 2,943 | 763 | |||
Level 3 [Member] | Recurring basis [Member] | Structured annuity embedded derivatives [Member] | |||||
Liabilities | |||||
Policyholder account balances, future policy benefits and claims | 9 | ||||
Level 3 [Member] | Recurring basis [Member] | Corporate debt securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 736 | 735 | |||
Level 3 [Member] | Recurring basis [Member] | Residential mortgage backed securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | 18 | 17 | |||
Level 3 [Member] | Recurring basis [Member] | Asset backed securities [Member] | |||||
Assets | |||||
Available-for-Sale securities | $ 398 | $ 389 | |||
[1] | The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. | ||||
[2] | The fair value of freestanding derivative assets is included in Other assets on the Consolidated Balance Sheets. | ||||
[3] | Amounts are comprised of certain financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. | ||||
[4] | The Company’s adjustment for nonperformance risk resulted in a $(1.0) billion cumulative increase (decrease) to the embedded derivatives as of September 30, 2020. | ||||
[5] | The Company’s adjustment for nonperformance risk resulted in a $(502) million cumulative increase (decrease) to the embedded derivatives as of December 31, 2019. | ||||
[6] | The fair value of the GMWB and GMAB embedded derivatives included $3.0 billion of individual contracts in a liability position and $36 million of individual contracts in an asset position as of September 30, 2020. | ||||
[7] | The fair value of the GMWB and GMAB embedded derivatives included $981 million of individual contracts in a liability position and $218 million of individual contracts in an asset position as of December 31, 2019. |
Fair Values of Assets and Lia_4
Fair Values of Assets and Liabilities (Level 3 rollforwards-Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Corporate debt securities [Member] | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis [Rollforward] | |||||
Balance, at the beginning of the period | $ 731 | $ 790 | $ 735 | $ 871 | |
Total Gains (Losses) Included in Net Income | (1) | (1) | |||
Total gains (losses) included in other comprehensive income (loss) | 5 | 4 | 13 | 32 | |
Purchases | 7 | 21 | 13 | 35 | |
Settlements | (7) | (35) | (24) | (157) | |
Balance, at the end of the period | 736 | 780 | 736 | 780 | |
Changes in unrealized gains (losses) in net income relating to assets held at the end of the period | (1) | (1) | |||
Change in unrealized gains (losses) in OCI relating to assets held at the end of the period | 5 | 13 | |||
Residential mortgage backed securities [Member] | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis [Rollforward] | |||||
Balance, at the beginning of the period | 56 | 44 | 17 | 64 | |
Total gains (losses) included in other comprehensive income (loss) | 1 | ||||
Purchases | 1 | 39 | 27 | ||
Settlements | (2) | (3) | |||
Transfers out of Level 3 | (39) | (39) | (46) | ||
Balance, at the end of the period | 18 | 42 | 18 | 42 | |
Change in unrealized gains (losses) in OCI relating to assets held at the end of the period | 1 | ||||
Asset backed securities [Member] | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis [Rollforward] | |||||
Balance, at the beginning of the period | 352 | 384 | 389 | 374 | |
Total gains (losses) included in other comprehensive income (loss) | 32 | (3) | (5) | 7 | |
Transfers Into Level 3 | 14 | 14 | 10 | ||
Balance, at the end of the period | 398 | 391 | 398 | 391 | |
Change in unrealized gains (losses) in OCI relating to assets held at the end of the period | 32 | (5) | |||
Total [Member] | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis [Rollforward] | |||||
Balance, at the beginning of the period | 1,139 | 1,218 | 1,141 | 1,309 | |
Total Gains (Losses) Included in Net Income | [1] | (1) | (1) | ||
Total gains (losses) included in other comprehensive income (loss) | 37 | 1 | 9 | 39 | |
Purchases | 8 | 21 | 52 | 62 | |
Settlements | (7) | (37) | (24) | (160) | |
Transfers Into Level 3 | 14 | 10 | 14 | 10 | |
Transfers out of Level 3 | (39) | (39) | (46) | ||
Balance, at the end of the period | 1,152 | $ 1,213 | 1,152 | 1,213 | |
Changes in unrealized gains (losses) in net income relating to assets held at the end of the period | [1] | (1) | $ (1) | ||
Change in unrealized gains (losses) in OCI relating to assets held at the end of the period | $ 37 | $ 9 | |||
[1] | Included in net investment income in the Consolidated Statements of Income. |
Fair Values of Assets and Lia_5
Fair Values of Assets and Liabilities (Level 3 rollforwards-Liabilities) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Summary of changes in Level 3 liabilities measured at fair value on a recurring basis [Rollforward] | |||||
Net increase (decrease) to pretax income from adjustment for nonperformance risk on the fair value of embedded derivatives | $ (123) | $ 85 | $ 446 | $ (29) | |
Fixed deferred indexed annuity embedded derivatives [Member] | |||||
Summary of changes in Level 3 liabilities measured at fair value on a recurring basis [Rollforward] | |||||
Balance at the beginning of the period | 41 | 31 | 43 | 14 | |
Total (gains) losses included in net income | [1] | 3 | (2) | 3 | |
Issues | 6 | 3 | 20 | ||
Balance at the end of the period | 44 | 37 | 44 | 37 | |
IUL embedded derivatives [Member] | |||||
Summary of changes in Level 3 liabilities measured at fair value on a recurring basis [Rollforward] | |||||
Balance at the beginning of the period | 882 | 819 | 881 | 628 | |
Total (gains) losses included in net income | [1] | 50 | (5) | 53 | 153 |
Issues | 15 | 25 | 53 | 92 | |
Settlements | (21) | (17) | (61) | (51) | |
Balance at the end of the period | 926 | 822 | 926 | 822 | |
Changes in unrealized (gains) losses in net income relating to liabilities held at the end of the period | [1] | 50 | (5) | 53 | 153 |
GMWB and GMAB embedded derivatives [Member] | |||||
Summary of changes in Level 3 liabilities measured at fair value on a recurring basis [Rollforward] | |||||
Balance at the beginning of the period | 3,129 | 696 | 763 | 328 | |
Total (gains) losses included in net income | [2] | (296) | 663 | 1,900 | 866 |
Issues | 93 | 96 | 267 | 266 | |
Settlements | 17 | (3) | 13 | (8) | |
Balance at the end of the period | 2,943 | 1,452 | 2,943 | 1,452 | |
Changes in unrealized (gains) losses in net income relating to liabilities held at the end of the period | [2] | (283) | 660 | 1,936 | 859 |
Structured annuity embedded derivatives [Member] | |||||
Summary of changes in Level 3 liabilities measured at fair value on a recurring basis [Rollforward] | |||||
Balance at the beginning of the period | 9 | 0 | |||
Total (gains) losses included in net income | [2] | 3 | 16 | ||
Issues | (3) | (7) | |||
Balance at the end of the period | 9 | 9 | |||
Total [Member] | |||||
Summary of changes in Level 3 liabilities measured at fair value on a recurring basis [Rollforward] | |||||
Balance at the beginning of the period | 4,061 | 1,546 | 1,687 | 970 | |
Total (gains) losses included in net income | (240) | 658 | 1,967 | 1,022 | |
Issues | 105 | 127 | 316 | 378 | |
Settlements | (4) | (20) | (48) | (59) | |
Balance at the end of the period | 3,922 | 2,311 | 3,922 | 2,311 | |
Changes in unrealized (gains) losses in net income relating to liabilities held at the end of the period | $ (233) | $ 655 | $ 1,989 | $ 1,012 | |
[1] | Included in interest credited to fixed accounts in the Consolidated Statements of Income. | ||||
[2] | Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income. |
Fair Values of Assets and Lia_6
Fair Values of Assets and Liabilities (Unobservable inputs) (Details) $ in Millions | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, fair value | $ 22,619 | $ 20,902 | ||
Corporate debt securities (private placements) [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, fair value | $ 728 | $ 735 | ||
Corporate debt securities (private placements) [Member] | Minimum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Yield/spread to U.S. Treasuries [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 0.012 | 0.008 | ||
Corporate debt securities (private placements) [Member] | Maximum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Yield/spread to U.S. Treasuries [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 0.045 | 0.028 | ||
Corporate debt securities (private placements) [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Yield/spread to U.S. Treasuries [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 0.019 | [1] | 0.013 | |
Asset backed securities [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, fair value | $ 398 | $ 389 | ||
Asset backed securities [Member] | Discounted cash flow [Member] | Level 3 [Member] | Annual default rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 0.048 | 0.035 | ||
Asset backed securities [Member] | Discounted cash flow [Member] | Level 3 [Member] | Loss severity [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 0.250 | 0.250 | ||
Asset backed securities [Member] | Minimum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Yield/spread to swap rates [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 3 | 1.20 | ||
Asset backed securities [Member] | Maximum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Yield/spread to swap rates [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 4.50 | 1.70 | ||
Asset backed securities [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Annual default rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 0.048 | |||
Asset backed securities [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Loss severity [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 0.250 | |||
Asset backed securities [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Yield/spread to swap rates [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fixed maturities, measurement inputs | 3.08 | [2] | 1.23 | |
IUL embedded derivatives [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, fair value | $ 926 | $ 881 | ||
IUL embedded derivatives [Member] | Discounted cash flow [Member] | Level 3 [Member] | Nonperformance risk [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [3] | 0.85 | 0.65 | |
IUL embedded derivatives [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Nonperformance risk [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [3] | 0.85 | ||
Fixed deferred indexed annuity embedded derivatives [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, fair value | $ 44 | $ 43 | ||
Fixed deferred indexed annuity embedded derivatives [Member] | Discounted cash flow [Member] | Level 3 [Member] | Nonperformance risk [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [3] | 0.85 | 0.65 | |
Fixed deferred indexed annuity embedded derivatives [Member] | Minimum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Surrender rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | 0 | 0 | ||
Fixed deferred indexed annuity embedded derivatives [Member] | Maximum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Surrender rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | 0.500 | 0.500 | ||
Fixed deferred indexed annuity embedded derivatives [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Nonperformance risk [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [3] | 0.85 | ||
Fixed deferred indexed annuity embedded derivatives [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Surrender rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [4] | 0.012 | ||
GMWB and GMAB embedded derivatives [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, fair value | $ 2,943 | $ 763 | ||
GMWB and GMAB embedded derivatives [Member] | Discounted cash flow [Member] | Level 3 [Member] | Nonperformance risk [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [3] | 0.85 | 0.65 | |
GMWB and GMAB embedded derivatives [Member] | Minimum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Surrender rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | 0.001 | 0.001 | ||
GMWB and GMAB embedded derivatives [Member] | Minimum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Utilization of guaranteed withdrawals [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [5] | 0 | 0 | |
GMWB and GMAB embedded derivatives [Member] | Minimum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Market volatility [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [6] | 0.046 | 0.037 | |
GMWB and GMAB embedded derivatives [Member] | Maximum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Surrender rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | 0.735 | 0.735 | ||
GMWB and GMAB embedded derivatives [Member] | Maximum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Utilization of guaranteed withdrawals [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [5] | 0.480 | 0.360 | |
GMWB and GMAB embedded derivatives [Member] | Maximum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Market volatility [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [6] | 0.179 | 0.159 | |
GMWB and GMAB embedded derivatives [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Nonperformance risk [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [3] | 0.85 | ||
GMWB and GMAB embedded derivatives [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Surrender rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [4] | 0.036 | ||
GMWB and GMAB embedded derivatives [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Utilization of guaranteed withdrawals [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [5],[7] | 0.105 | ||
GMWB and GMAB embedded derivatives [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Market volatility [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [6],[8] | 0.118 | ||
Structured annuity embedded derivatives [Member] | Discounted cash flow [Member] | Level 3 [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, fair value | $ 9 | |||
Structured annuity embedded derivatives [Member] | Discounted cash flow [Member] | Level 3 [Member] | Nonperformance risk [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [3] | 0.85 | ||
Structured annuity embedded derivatives [Member] | Minimum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Surrender rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | 0.008 | |||
Structured annuity embedded derivatives [Member] | Maximum [Member] | Discounted cash flow [Member] | Level 3 [Member] | Surrender rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | 0.400 | |||
Structured annuity embedded derivatives [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Nonperformance risk [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [3] | 0.85 | ||
Structured annuity embedded derivatives [Member] | Weighted average [Member] | Discounted cash flow [Member] | Level 3 [Member] | Surrender rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivatives, measurement inputs | [4] | 0.009 | ||
[1] | The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. | |||
[2] | The weighted average for the spread to swap rates for asset backed securities is calculated as the sum of each tranche’s balance multiplied by its spread to swap divided by the aggregate balances of the tranches. | |||
[3] | The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives. | |||
[4] | The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula. | |||
[5] | The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. | |||
[6] | Market volatility is implied volatility of fund of funds and managed volatility funds. | |||
[7] | The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals. | |||
[8] | The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. |
Fair Values of Assets and Lia_7
Fair Values of Assets and Liabilities Fair Value of Assets & Liabilities (Non-Recurring) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets and liabilities measured at fair value | ||
Assets | $ 125,768 | $ 121,943 |
RiverSource Tax Advantaged Investments Inc [Member] | VIEs, not primary beneficiary [Member] | ||
Assets and liabilities measured at fair value | ||
Assets | 202 | 270 |
RiverSource Tax Advantaged Investments Inc [Member] | Nonrecurring basis [Member] | Level 3 [Member] | VIEs, not primary beneficiary [Member] | ||
Assets and liabilities measured at fair value | ||
Assets | $ 99 | $ 158 |
Fair Values of Assets and Lia_8
Fair Values of Assets and Liabilities (Financial Instruments not at FV) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Financial Assets | |||
Mortgage loans, net | $ 2,628 | $ 2,655 | |
Policy loans | 849 | 867 | |
Other investments | 744 | 734 | |
Other receivables | 1,690 | 1,713 | |
Financial Liabilities | |||
Short-term borrowings | 200 | 201 | |
Line of credit with Ameriprise Financial | 0 | 50 | |
Other liabilities | 6,743 | 5,427 | |
Separate account liabilities - investment contracts | 81,348 | 82,425 | |
Carrying value [Member] | |||
Financial Assets | |||
Mortgage loans, net | 2,628 | 2,655 | |
Policy loans | 849 | 867 | |
Other investments | 482 | 410 | |
Other receivables | 1,449 | 1,514 | |
Financial Liabilities | |||
Policyholder account balances, future policy benefits and claims | 9,600 | 9,110 | |
Short-term borrowings | 200 | 201 | |
Line of credit with Ameriprise Financial | 50 | ||
Other liabilities | 15 | 22 | |
Separate account liabilities - investment contracts | 323 | 340 | |
Recurring basis [Member] | |||
Financial Assets | |||
Mortgage loans, net | 2,749 | 2,707 | |
Policy loans | [1] | 849 | 867 |
Other investments | 471 | 410 | |
Other receivables | 1,734 | 1,648 | |
Financial Liabilities | |||
Policyholder account balances, future policy benefits and claims | 11,300 | 10,061 | |
Short-term borrowings | 200 | 201 | |
Line of credit with Ameriprise Financial | 50 | ||
Other liabilities | 15 | 21 | |
Separate account liabilities - investment contracts | 323 | 340 | |
Recurring basis [Member] | Level 2 [Member] | |||
Financial Assets | |||
Policy loans | [1] | 849 | 867 |
Other investments | 402 | 376 | |
Financial Liabilities | |||
Short-term borrowings | 200 | 201 | |
Separate account liabilities - investment contracts | 323 | 340 | |
Recurring basis [Member] | Level 3 [Member] | |||
Financial Assets | |||
Mortgage loans, net | 2,749 | 2,707 | |
Other investments | 69 | 34 | |
Other receivables | 1,734 | 1,648 | |
Financial Liabilities | |||
Policyholder account balances, future policy benefits and claims | 11,300 | 10,061 | |
Line of credit with Ameriprise Financial | 50 | ||
Other liabilities | $ 15 | $ 21 | |
[1] | During the third quarter of 2020, management changed the fair value methodology for policy loans from estimating future expected cash flows and discounting the cash flows at a rate based on the U.S. Treasury curve to using the carrying value as an approximation of fair value as the policy loans are fully collateralized by the cash surrender value of the underlying policies. As a result, policy loans were reclassified from Level 3 to Level 2 in the valuation hierarchy. For comparability and consistency purposes, prior period amounts were revised to reflect the current methodology and classification. |
Offsetting Assets and Liabili_3
Offsetting Assets and Liabilities (Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Derivatives: | |||
Gross amounts of recognized assets | [1] | $ 5,435 | $ 4,283 |
OTC derivatives [Member] | |||
Derivatives: | |||
Gross amounts of recognized assets | 5,085 | 4,181 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial instruments | [2] | (3,460) | (2,886) |
Cash collateral | (1,594) | (1,214) | |
Securities collateral | (22) | (73) | |
Net amount | 9 | 8 | |
OTC cleared derivatives [Member] | |||
Derivatives: | |||
Gross amounts of recognized assets | 44 | 21 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial instruments | [2] | (44) | (21) |
Net amount | 0 | 0 | |
Exchange-traded derivatives [Member] | |||
Derivatives: | |||
Gross amounts of recognized assets | 306 | 81 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial instruments | [2] | (85) | (5) |
Cash collateral | (159) | ||
Net amount | 62 | 76 | |
Total derivatives [Member] | |||
Derivatives: | |||
Gross amounts of recognized assets | 5,435 | 4,283 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial instruments | [2] | (3,589) | (2,912) |
Cash collateral | (1,753) | (1,214) | |
Securities collateral | (22) | (73) | |
Net amount | $ 71 | $ 84 | |
[1] | The fair value of freestanding derivative assets is included in Other assets on the Consolidated Balance Sheets. | ||
[2] | Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Offsetting Assets and Liabili_4
Offsetting Assets and Liabilities (Liabilities) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Derivatives | |||
Gross amounts of recognized liabilities | [1] | $ 7,831 | $ 5,168 |
OTC derivatives [Member] | |||
Derivatives | |||
Gross amounts of recognized liabilities | 3,716 | 3,426 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial instruments | [2] | (3,460) | (2,886) |
Cash collateral | 0 | 0 | |
Securities collateral | (256) | (540) | |
Net amount | 0 | 0 | |
OTC cleared derivatives [Member] | |||
Derivatives | |||
Gross amounts of recognized liabilities | 103 | 41 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial instruments | [2] | (44) | (21) |
Net amount | 59 | 20 | |
Exchange-traded derivatives [Member] | |||
Derivatives | |||
Gross amounts of recognized liabilities | 87 | 11 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial instruments | [2] | (85) | (5) |
Net amount | 2 | 6 | |
Total derivatives [Member] | |||
Derivatives | |||
Gross amounts of recognized liabilities | 3,906 | 3,478 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial instruments | [2] | (3,589) | (2,912) |
Cash collateral | 0 | 0 | |
Securities collateral | (256) | (540) | |
Net amount | $ 61 | $ 26 | |
[1] | The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. | ||
[2] | Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Balance Sheet) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Derivatives and Hedging Activities | |||
Notional amount | $ 138,962 | $ 123,183 | |
Gross fair value of assets | [1] | 5,435 | 4,283 |
Gross fair value of liabilities | [2] | 7,831 | 5,168 |
Fair value of investment securities received as collateral | 24 | 84 | |
Fair value of investment securities received as collateral that can be repledged | 24 | 84 | |
Fair value of investment securities received as collateral that were repledged | 0 | 0 | |
GMWB and GMAB embedded derivatives [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of assets | 36 | 218 | |
Gross fair value of liabilities | 3,000 | 981 | |
Derivatives not designated as hedging instruments [Member] | |||
Derivatives and Hedging Activities | |||
Notional amount | 138,962 | 123,183 | |
Derivatives not designated as hedging instruments [Member] | Interest rate contracts [Member] | |||
Derivatives and Hedging Activities | |||
Notional amount | 70,691 | 57,950 | |
Derivatives not designated as hedging instruments [Member] | Equity contracts [Member] | |||
Derivatives and Hedging Activities | |||
Notional amount | 62,029 | 60,596 | |
Derivatives not designated as hedging instruments [Member] | Credit contracts [Member] | |||
Derivatives and Hedging Activities | |||
Notional amount | 2,565 | 1,386 | |
Derivatives not designated as hedging instruments [Member] | Foreign exchange contracts [Member] | |||
Derivatives and Hedging Activities | |||
Notional amount | 3,677 | 3,251 | |
Other assets [Member] | Derivatives not designated as hedging instruments [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of assets | [1] | 5,435 | 4,283 |
Other assets [Member] | Derivatives not designated as hedging instruments [Member] | Interest rate contracts [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of assets | [1] | 2,015 | 1,451 |
Other assets [Member] | Derivatives not designated as hedging instruments [Member] | Equity contracts [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of assets | [1] | 3,381 | 2,812 |
Other assets [Member] | Derivatives not designated as hedging instruments [Member] | Credit contracts [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of assets | [1] | 5 | 4 |
Other assets [Member] | Derivatives not designated as hedging instruments [Member] | Foreign exchange contracts [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of assets | [1] | 34 | 16 |
Other liabilities [Member] | Derivatives not designated as hedging instruments [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2] | 3,906 | 3,478 |
Other liabilities [Member] | Derivatives not designated as hedging instruments [Member] | Interest rate contracts [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2] | 934 | 418 |
Other liabilities [Member] | Derivatives not designated as hedging instruments [Member] | Equity contracts [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2] | 2,965 | 3,054 |
Other liabilities [Member] | Derivatives not designated as hedging instruments [Member] | Credit contracts [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2] | 0 | 0 |
Other liabilities [Member] | Derivatives not designated as hedging instruments [Member] | Foreign exchange contracts [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2] | 7 | 6 |
Policyholder account balances, future policy benefits and claims [Member] | GMWB and GMAB embedded derivatives [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2],[3] | 2,943 | 763 |
Policyholder account balances, future policy benefits and claims [Member] | IUL embedded derivatives [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2] | 926 | 881 |
Policyholder account balances, future policy benefits and claims [Member] | Fixed deferred indexed annuity embedded derivatives [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2] | 47 | 46 |
Policyholder account balances, future policy benefits and claims [Member] | Structured annuity embedded derivatives [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2] | 9 | |
Policyholder account balances, future policy benefits and claims [Member] | Total embedded derivatives [Member] | |||
Derivatives and Hedging Activities | |||
Gross fair value of liabilities | [2] | $ 3,925 | $ 1,690 |
[1] | The fair value of freestanding derivative assets is included in Other assets on the Consolidated Balance Sheets. | ||
[2] | The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. | ||
[3] | The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2020 included $3.0 billion of individual contracts in a liability position and $36 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2019 included $981 million of individual contracts in a liability position and $218 million of individual contracts in an asset position. |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities (Income Statement) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Interest credited to fixed accounts [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | $ 10 | $ 26 | $ 3 | $ (35) |
Interest credited to fixed accounts [Member] | IUL embedded derivatives [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | (29) | 22 | 8 | (102) |
Interest credited to fixed accounts [Member] | Fixed deferred indexed annuity embedded derivatives [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | (3) | 0 | 2 | (3) |
Benefits, claims, losses and settlement expenses [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | (691) | (47) | 1 | (418) |
Benefits, claims, losses and settlement expenses [Member] | GMWB and GMAB embedded derivatives [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | 186 | (756) | (2,180) | (1,124) |
Benefits, claims, losses and settlement expenses [Member] | Structured annuity embedded derivatives [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | (3) | (16) | ||
Derivatives not designated as hedging instruments [Member] | Interest credited to fixed accounts [Member] | Equity contracts [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | 42 | 4 | (7) | 70 |
Derivatives not designated as hedging instruments [Member] | Benefits, claims, losses and settlement expenses [Member] | Interest rate contracts [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | (371) | 805 | 2,204 | 1,765 |
Derivatives not designated as hedging instruments [Member] | Benefits, claims, losses and settlement expenses [Member] | Equity contracts [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | (468) | (97) | 58 | (981) |
Derivatives not designated as hedging instruments [Member] | Benefits, claims, losses and settlement expenses [Member] | Credit contracts [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | (12) | (9) | (91) | $ (78) |
Derivatives not designated as hedging instruments [Member] | Benefits, claims, losses and settlement expenses [Member] | Foreign exchange contracts [Member] | ||||
Impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Income | ||||
Amount of gain (loss) on derivatives recognized in income | $ (23) | $ 10 | $ 26 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities (Option Pay/Rec) (Details) $ in Millions | Sep. 30, 2020USD ($) | |
Summary of option premiums payable and receivable | ||
Premiums payable | $ 962 | |
Premiums receivable | 390 | |
2020 [Member] | ||
Summary of option premiums payable and receivable | ||
Premiums payable | 35 | [1] |
Premiums receivable | 4 | [1] |
2021 [Member] | ||
Summary of option premiums payable and receivable | ||
Premiums payable | 152 | |
Premiums receivable | 106 | |
2022 [Member] | ||
Summary of option premiums payable and receivable | ||
Premiums payable | 205 | |
Premiums receivable | 205 | |
2023 [Member] | ||
Summary of option premiums payable and receivable | ||
Premiums payable | 51 | |
Premiums receivable | 43 | |
2024 [Member] | ||
Summary of option premiums payable and receivable | ||
Premiums payable | 140 | |
Premiums receivable | 25 | |
2025-2028 [Member] | ||
Summary of option premiums payable and receivable | ||
Premiums payable | 379 | |
Premiums receivable | $ 7 | |
[1] | 2020 amounts represent the amounts payable and receivable for the period from October 1, 2020 to December 31, 2020. |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities (Cash Flow Hedges and Credit Risk) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash Flow Hedges | |||
Derivatives designated as cash flow hedges | $ 0 | $ 0 | |
Hedge relationships were discontinued due to forecasted transactions no longer being expected to occur according to the original hedge strategy | 0 | $ 0 | |
Derivatives liabilities, credit risk related contingent features | |||
Aggregate fair value of all derivative instruments containing credit risk features | 176 | $ 189 | |
Aggregate fair value of assets posted as collateral | 176 | $ 189 | |
Aggregate fair value of assets needed to settle derivative liabilities | $ 0 |
Shareholder's Equity (Comprehen
Shareholder's Equity (Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Tax, Portion Attributable to Parent [Abstract] | ||||||
Net unrealized gains (losses) on securities arising during the period, pretax | $ 208 | $ 289 | $ 500 | [1] | $ 1,410 | [1] |
Reclassification of net (gains) losses on securities included in net income, pretax | (2) | 11 | 3 | [2] | 1 | [2] |
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables, pretax | (94) | (195) | (223) | (694) | ||
Net unrealized gains (losses) on securities, pretax | 112 | 105 | 280 | 717 | ||
Total other comprehensive income (loss), pretax | 112 | 105 | 280 | 717 | ||
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax, Portion Attributable to Parent [Abstract] | ||||||
Net unrealized gains (losses) on securities arising during the period, tax | (44) | (63) | (107) | [1] | (302) | [1] |
Reclassification of net (gains) losses on securities included in net income, tax | 0 | (2) | (1) | 0 | ||
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables, tax | 20 | 41 | 47 | 146 | ||
Net unrealized gains (losses) on securities, tax | (24) | (24) | (61) | (156) | ||
Total other comprehensive income (loss), tax | (24) | (24) | (61) | (156) | ||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent [Abstract] | ||||||
Net unrealized gains (losses) on securities arising during the period, net of tax | 164 | 226 | 393 | [1] | 1,108 | [1] |
Reclassification of net (gains) losses on securities included in net income, net of tax | (2) | 9 | 2 | 1 | ||
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables, net of tax | (74) | (154) | (176) | (548) | ||
Net unrealized gains (losses) on securities, net of tax | 88 | 81 | 219 | 561 | ||
Total other comprehensive income (loss), net of tax | $ 88 | $ 81 | $ 219 | $ 561 | ||
[1] | Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. | |||||
[2] | Reclassification amounts are recorded in net realized investment gains (losses). |
Shareholder's Equity (Reclassif
Shareholder's Equity (Reclassifications) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | $ 705 | $ 525 | $ 574 | $ 45 | |
OCI before reclassifications | 90 | 72 | 217 | 560 | |
Amounts reclassified from AOCI | (2) | 9 | 2 | 1 | |
Total OCI | 88 | 81 | 219 | 561 | |
Ending balance | 793 | 606 | 793 | 606 | |
Net unrealized gains (losses) on securities [Member] | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | 706 | 526 | 575 | 46 | |
OCI before reclassifications | 90 | 72 | 217 | 560 | |
Amounts reclassified from AOCI | (2) | 9 | 2 | 1 | |
Total OCI | 88 | 81 | 219 | 561 | |
Ending balance | [1] | 794 | 607 | 794 | 607 |
Noncredit related impairments on securities and net unrealized gains (losses) on previously impaired securities | 0 | 0 | |||
Other [Member] | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | (1) | (1) | (1) | (1) | |
OCI before reclassifications | 0 | 0 | 0 | 0 | |
Amounts reclassified from AOCI | 0 | 0 | 0 | 0 | |
Total OCI | 0 | 0 | 0 | 0 | |
Ending balance | $ (1) | $ (1) | $ (1) | $ (1) | |
[1] | Includes nil of noncredit related impairments on securities and net unrealized gains (losses) on previously impaired securities as of both September 30, 2020 and September 30, 2019. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income taxes | |||||
Effective tax rate (as a percent) | 23.20% | 3.30% | 5.70% | 2.80% | |
Valuation allowance | $ 11 | $ 11 | $ 11 | ||
Gross unrecognized tax benefits | 38 | 38 | 39 | ||
Unrecognized tax benefits, net of federal tax benefits, that would affect the effective tax rate if recognized | 20 | 20 | 17 | ||
Interest and penalties recognized in income tax provision | 0 | $ 0 | 0 | $ 0 | |
Payable related to accrued interest and penalties | 2 | 2 | 2 | ||
State and local jurisdiction [Member] | |||||
Income taxes | |||||
Deferred tax assets, loss carryforwards | 11 | 11 | |||
Valuation allowance, net operating losses | 9 | 9 | 9 | ||
Valuation allowance | $ 2 | $ 2 | $ 2 |
Contingencies (Details)
Contingencies (Details) - Estimated guaranty fund assessments [Member] - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Contingencies | ||
Estimated liability related to guaranty fund assessments | $ 12 | $ 12 |
Related premium tax asset | $ 10 | $ 10 |