☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Georgia
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58-1167100
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1932 Wynnton Road
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Columbus,
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Georgia
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31999
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(Address of principal executive offices)
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(ZIP Code)
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(Former name, former address and former fiscal year, if changed since last report)
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Title of each class
|
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $.10 par value per share
|
|
AFL
|
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New York Stock Exchange
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Large accelerated filer
|
þ
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Accelerated filer
|
☐
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Non-accelerated filer
|
¨
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Smaller reporting company
|
☐
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Emerging growth company
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☐
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PART I.
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Page
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Item 1.
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Three Months Ended March 31, 2020 and 2019
|
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Three Months Ended March 31, 2020 and 2019
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March 31, 2020, and December 31, 2019
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Three Months Ended March 31, 2020 and 2019
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Three Months Ended March 31, 2020 and 2019
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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||
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Three Months Ended
March 31, |
|
||||||||
(In millions, except for share and per-share amounts - Unaudited)
|
2020
|
|
2019
|
|
||||||
Revenues:
|
|
|
|
|
|
|
||||
Net premiums, principally supplemental health insurance
|
|
$
|
4,681
|
|
|
|
$
|
4,691
|
|
|
Net investment income
|
|
904
|
|
|
|
878
|
|
|
||
Net investment gains (losses)
|
|
(463
|
)
|
|
|
71
|
|
|
||
Other income (loss)
|
|
40
|
|
|
|
17
|
|
|
||
Total revenues
|
|
5,162
|
|
|
|
5,657
|
|
|
||
Benefits and expenses:
|
|
|
|
|
|
|
||||
Benefits and claims, net
|
|
2,939
|
|
|
|
2,967
|
|
|
||
Acquisition and operating expenses:
|
|
|
|
|
|
|
||||
Amortization of deferred policy acquisition costs
|
|
333
|
|
|
|
340
|
|
|
||
Insurance commissions
|
|
336
|
|
|
|
331
|
|
|
||
Insurance and other expenses (1)
|
|
779
|
|
|
|
719
|
|
|
||
Interest expense
|
|
55
|
|
|
|
58
|
|
|
||
Total acquisition and operating expenses
|
|
1,503
|
|
|
|
1,448
|
|
|
||
Total benefits and expenses
|
|
4,442
|
|
|
|
4,415
|
|
|
||
Earnings before income taxes
|
|
720
|
|
|
|
1,242
|
|
|
||
Income taxes
|
|
154
|
|
|
|
314
|
|
|
||
Net earnings
|
|
$
|
566
|
|
|
|
$
|
928
|
|
|
Net earnings per share:
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
.78
|
|
|
|
$
|
1.23
|
|
|
Diluted
|
|
.78
|
|
|
|
1.23
|
|
|
||
Weighted-average outstanding common shares used in
computing earnings per share (In thousands): |
|
|
|
|
|
|
||||
Basic
|
|
724,366
|
|
|
|
751,423
|
|
|
||
Diluted
|
|
727,512
|
|
|
|
755,790
|
|
|
||
Cash dividends per share
|
|
$
|
.28
|
|
|
|
$
|
.27
|
|
|
|
Three Months Ended
March 31, |
|||||||||
(In millions - Unaudited)
|
2020
|
2019
|
||||||||
Net earnings
|
|
$
|
566
|
|
|
|
$
|
928
|
|
|
Other comprehensive income (loss) before income taxes:
|
|
|
|
|
|
|
||||
Unrealized foreign currency translation gains (losses) during
period |
|
85
|
|
|
|
(1
|
)
|
|
||
Unrealized gains (losses) on fixed maturity securities:
|
|
|
|
|
|
|
||||
Unrealized holding gains (losses) on fixed maturity securities
during period |
|
(4,605
|
)
|
|
|
3,196
|
|
|
||
Reclassification adjustment for (gains) losses on
fixed maturity securities included in net earnings |
|
7
|
|
|
|
(17
|
)
|
|
||
Unrealized gains (losses) on derivatives during period
|
|
(4
|
)
|
|
|
(3
|
)
|
|
||
Pension liability adjustment during period
|
|
0
|
|
|
|
7
|
|
|
||
Total other comprehensive income (loss) before income taxes
|
|
(4,517
|
)
|
|
|
3,182
|
|
|
||
Income tax expense (benefit) related to items of other comprehensive
income (loss) |
|
(1,242
|
)
|
|
|
852
|
|
|
||
Other comprehensive income (loss), net of income taxes
|
|
(3,275
|
)
|
|
|
2,330
|
|
|
||
Total comprehensive income (loss)
|
|
$
|
(2,709
|
)
|
|
|
$
|
3,258
|
|
|
(In millions, except for share and per-share amounts)
|
March 31,
2020 (Unaudited) |
|
December 31,
2019 |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||
Investments and cash:
|
|
|
|
|
|
|
|
||||
Fixed maturity securities available for sale, at fair value, (allowance for credit losses of $63,
amortized cost $84,673 in 2020 and amortized cost $76,063 in 2019) |
|
$
|
92,502
|
|
|
|
|
$
|
86,950
|
|
|
Fixed maturity securities available for sale - consolidated variable interest entities, at fair value
(amortized cost $3,208 in 2020 and amortized cost of $3,308 in 2019) |
|
3,786
|
|
|
|
|
4,312
|
|
|
||
Fixed maturity securities held to maturity, at amortized cost, net of allowance
for credit losses of $9 in 2020 (fair value $29,347 in 2020 and $37,594 in 2019) |
|
23,278
|
|
|
|
|
30,085
|
|
|
||
Equity securities, at fair value
|
|
660
|
|
|
|
|
802
|
|
|
||
Commercial mortgage and other loans, net of allowance for credit losses of $125 in 2020
(includes $9,051 in 2020 and $7,956 in 2019 of consolidated variable interest entities) |
|
10,750
|
|
|
|
|
9,569
|
|
|
||
Other investments
(includes $550 in 2020 and $494 in 2019 of consolidated variable interest entities) |
|
1,843
|
|
|
|
|
1,477
|
|
|
||
Cash and cash equivalents
|
|
4,148
|
|
|
|
|
4,896
|
|
|
||
Total investments and cash
|
|
136,967
|
|
|
|
|
138,091
|
|
|
||
Receivables
|
|
813
|
|
|
|
|
828
|
|
|
||
Accrued investment income
|
|
734
|
|
|
|
|
772
|
|
|
||
Deferred policy acquisition costs
|
|
10,164
|
|
|
|
|
10,128
|
|
|
||
Property and equipment, at cost less accumulated depreciation
|
|
586
|
|
|
|
|
581
|
|
|
||
Other
|
|
2,352
|
|
|
|
|
2,368
|
|
|
||
Total assets
|
|
$
|
151,616
|
|
|
|
|
$
|
152,768
|
|
|
Liabilities and shareholders’ equity:
|
|
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||
Policy liabilities:
|
|
|
|
|
|
|
|
||||
Future policy benefits
|
|
$
|
91,393
|
|
|
|
|
$
|
90,335
|
|
|
Unpaid policy claims
|
|
4,693
|
|
|
|
|
4,659
|
|
|
||
Unearned premiums
|
|
4,044
|
|
|
|
|
4,243
|
|
|
||
Other policyholders’ funds
|
|
7,422
|
|
|
|
|
7,317
|
|
|
||
Total policy liabilities
|
|
107,552
|
|
|
|
|
106,554
|
|
|
||
Income taxes
|
|
4,610
|
|
|
|
|
5,370
|
|
|
||
Payables for return of cash collateral on loaned securities
|
|
2,969
|
|
|
|
|
1,876
|
|
|
||
Notes payable and lease obligations
|
|
6,758
|
|
|
|
|
6,569
|
|
|
||
Other
|
|
3,325
|
|
|
|
|
3,440
|
|
|
||
Total liabilities
|
|
125,214
|
|
|
|
|
123,809
|
|
|
||
Commitments and contingent liabilities (Note 13)
|
|
|
|
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
|
|
||||
Common stock of $.10 par value. In thousands: authorized 1,900,000
shares in 2020 and 2019; issued 1,350,650 shares in 2020 and 1,349,309 shares in 2019 |
|
135
|
|
|
|
|
135
|
|
|
||
Additional paid-in capital
|
|
2,334
|
|
|
|
|
2,313
|
|
|
||
Retained earnings
|
|
34,599
|
|
|
|
|
34,291
|
|
|
||
Accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||
Unrealized foreign currency translation gains (losses)
|
|
(1,543
|
)
|
|
|
|
(1,623
|
)
|
|
||
Unrealized gains (losses) on fixed maturity securities
|
|
6,043
|
|
|
|
|
8,548
|
|
|
||
Unrealized gains (losses) on derivatives
|
|
(35
|
)
|
|
|
|
(33
|
)
|
|
||
Pension liability adjustment
|
|
(277
|
)
|
|
|
|
(277
|
)
|
|
||
Treasury stock, at average cost
|
|
(14,854
|
)
|
|
|
|
(14,395
|
)
|
|
||
Total shareholders’ equity
|
|
26,402
|
|
|
|
|
28,959
|
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
151,616
|
|
|
|
|
$
|
152,768
|
|
|
|
|
|
|
|
|
|
(In millions, except for per share amounts - Unaudited)
|
Common Stock
|
Additional Paid-in Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Treasury Stock
|
Total
Shareholders' Equity |
||||||||||||
Balance at December 31, 2019
|
$
|
135
|
|
$
|
2,313
|
|
$
|
34,291
|
|
$
|
6,615
|
|
$
|
(14,395
|
)
|
$
|
28,959
|
|
Cumulative effect of change in accounting
principle, Accounting Standards Update
(ASU) 2016-13, net of tax (1)
|
0
|
|
0
|
|
(56
|
)
|
0
|
|
0
|
|
(56
|
)
|
||||||
Cumulative effect of change in accounting
principle, ASU 2019-04, net of tax (1)
|
0
|
|
0
|
|
0
|
|
848
|
|
0
|
|
848
|
|
||||||
Balance at January 1, 2020
|
$
|
135
|
|
$
|
2,313
|
|
$
|
34,235
|
|
$
|
7,463
|
|
$
|
(14,395
|
)
|
$
|
29,751
|
|
Net earnings
|
0
|
|
0
|
|
566
|
|
0
|
|
0
|
|
566
|
|
||||||
Unrealized foreign currency translation
gains (losses) during period, net of income tax |
0
|
|
0
|
|
0
|
|
80
|
|
0
|
|
80
|
|
||||||
Unrealized gains (losses) on fixed maturity
securities during period, net of income taxes and reclassification adjustments |
0
|
|
0
|
|
0
|
|
(3,353
|
)
|
0
|
|
(3,353
|
)
|
||||||
Unrealized gains (losses) on derivatives
during period, net of income taxes |
0
|
|
0
|
|
0
|
|
(2
|
)
|
0
|
|
(2
|
)
|
||||||
Pension liability adjustment during period,
net of income taxes |
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
||||||
Dividends to shareholders
($.28 per share) |
0
|
|
0
|
|
(202
|
)
|
0
|
|
0
|
|
(202
|
)
|
||||||
Exercise of stock options
|
0
|
|
5
|
|
0
|
|
0
|
|
0
|
|
5
|
|
||||||
Share-based compensation
|
0
|
|
7
|
|
0
|
|
0
|
|
0
|
|
7
|
|
||||||
Purchases of treasury stock
|
0
|
|
0
|
|
0
|
|
0
|
|
(476
|
)
|
(476
|
)
|
||||||
Treasury stock reissued
|
0
|
|
9
|
|
0
|
|
0
|
|
17
|
|
26
|
|
||||||
Balance at March 31, 2020
|
$
|
135
|
|
$
|
2,334
|
|
$
|
34,599
|
|
$
|
4,188
|
|
$
|
(14,854
|
)
|
$
|
26,402
|
|
(In millions, except for per share amounts - Unaudited)
|
Common Stock
|
Additional Paid-in Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Treasury Stock
|
Total Shareholders'
Equity |
||||||||||||
Balance at December 31, 2018
|
$
|
135
|
|
$
|
2,177
|
|
$
|
31,788
|
|
$
|
2,151
|
|
$
|
(12,789
|
)
|
$
|
23,462
|
|
Net earnings
|
0
|
|
0
|
|
928
|
|
0
|
|
0
|
|
928
|
|
||||||
Unrealized foreign currency translation
gains (losses) during period, net of income tax |
0
|
|
0
|
|
0
|
|
(1
|
)
|
0
|
|
(1
|
)
|
||||||
Unrealized gains (losses) on fixed maturity
securities during period, net of income taxes and reclassification adjustments |
0
|
|
0
|
|
0
|
|
2,327
|
|
0
|
|
2,327
|
|
||||||
Unrealized gains (losses) on derivatives
during period, net of income taxes |
0
|
|
0
|
|
0
|
|
(2
|
)
|
0
|
|
(2
|
)
|
||||||
Pension liability adjustment during period,
net of income taxes |
0
|
|
0
|
|
0
|
|
6
|
|
0
|
|
6
|
|
||||||
Dividends to shareholders
($.27 per share) |
0
|
|
0
|
|
(203
|
)
|
0
|
|
0
|
|
(203
|
)
|
||||||
Exercise of stock options
|
0
|
|
11
|
|
0
|
|
0
|
|
0
|
|
11
|
|
||||||
Share-based compensation
|
0
|
|
8
|
|
0
|
|
0
|
|
0
|
|
8
|
|
||||||
Purchases of treasury stock
|
0
|
|
0
|
|
0
|
|
0
|
|
(517
|
)
|
(517
|
)
|
||||||
Treasury stock reissued
|
0
|
|
12
|
|
0
|
|
0
|
|
18
|
|
30
|
|
||||||
Balance at March 31, 2019
|
$
|
135
|
|
$
|
2,208
|
|
$
|
32,513
|
|
$
|
4,481
|
|
$
|
(13,288
|
)
|
$
|
26,049
|
|
|
|
Three Months Ended March 31,
|
||||||||||
(In millions - Unaudited)
|
2020
|
|
2019
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||
Net earnings
|
|
$
|
566
|
|
|
|
|
$
|
928
|
|
|
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
|
|
|
|
|
|
|
|
||||
Change in receivables and advance premiums
|
|
15
|
|
|
|
|
35
|
|
|
||
Capitalization of deferred policy acquisition costs
|
|
(325
|
)
|
|
|
|
(357
|
)
|
|
||
Amortization of deferred policy acquisition costs
|
|
333
|
|
|
|
|
340
|
|
|
||
Increase in policy liabilities
|
|
368
|
|
|
|
|
468
|
|
|
||
Change in income tax liabilities
|
|
153
|
|
|
|
|
316
|
|
|
||
Net investment (gains) losses
|
|
463
|
|
|
|
|
(71
|
)
|
|
||
Other, net
|
|
(159
|
)
|
|
|
|
(115
|
)
|
|
||
Net cash provided (used) by operating activities
|
|
1,414
|
|
|
|
|
1,544
|
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Proceeds from investments sold or matured:
|
|
|
|
|
|
|
|
||||
Available-for-sale fixed maturity securities
|
|
726
|
|
|
|
|
760
|
|
|
||
Equity securities
|
|
3
|
|
|
|
|
153
|
|
|
||
Held-to-maturity fixed maturity securities
|
|
0
|
|
|
|
|
155
|
|
|
||
Commercial mortgage and other loans
|
|
408
|
|
|
|
|
493
|
|
|
||
Costs of investments acquired:
|
|
|
|
|
|
|
|
||||
Available-for-sale fixed maturity securities
|
|
(1,817
|
)
|
|
|
|
(2,548
|
)
|
|
||
Equity securities
|
|
(6
|
)
|
|
|
|
(151
|
)
|
|
||
Commercial mortgage and other loans
|
|
(1,787
|
)
|
|
|
|
(669
|
)
|
|
||
Other investments, net
|
|
(361
|
)
|
|
|
|
(442
|
)
|
|
||
Settlement of derivatives, net
|
|
13
|
|
|
|
|
(3
|
)
|
|
||
Cash received (pledged or returned) as collateral, net
|
|
1,160
|
|
|
|
|
976
|
|
|
||
Other, net
|
|
(55
|
)
|
|
|
|
(15
|
)
|
|
||
Net cash provided (used) by investing activities
|
|
(1,716
|
)
|
|
|
|
(1,291
|
)
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Purchases of treasury stock
|
|
(449
|
)
|
|
|
|
(490
|
)
|
|
||
Proceeds from borrowings
|
|
545
|
|
|
|
|
0
|
|
|
||
Principal payments under debt obligations
|
|
(350
|
)
|
|
|
|
0
|
|
|
||
Dividends paid to shareholders
|
|
(195
|
)
|
|
|
|
(195
|
)
|
|
||
Change in investment-type contracts, net
|
|
(5
|
)
|
|
|
|
(13
|
)
|
|
||
Treasury stock reissued
|
|
9
|
|
|
|
|
12
|
|
|
||
Other, net
|
|
(1
|
)
|
|
|
|
0
|
|
|
||
Net cash provided (used) by financing activities
|
|
(446
|
)
|
|
|
|
(686
|
)
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
0
|
|
|
|
|
(12
|
)
|
|
||
Net change in cash and cash equivalents
|
|
(748
|
)
|
|
|
|
(445
|
)
|
|
||
Cash and cash equivalents, beginning of period
|
|
4,896
|
|
|
|
|
4,337
|
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
4,148
|
|
|
|
|
$
|
3,892
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
||||
Income taxes paid
|
|
$
|
2
|
|
|
|
|
$
|
(2
|
)
|
|
Interest paid
|
|
39
|
|
|
|
|
36
|
|
|
||
Noncash interest
|
|
15
|
|
|
|
|
22
|
|
|
||
Noncash financing activities:
|
|
|
|
|
|
|
|
||||
Lease obligations
|
|
13
|
|
|
|
|
1
|
|
|
||
Treasury stock issued for:
|
|
|
|
|
|
|
|
||||
Associate stock bonus
|
|
5
|
|
|
|
|
6
|
|
|
||
Shareholder dividend reinvestment
|
|
7
|
|
|
|
|
8
|
|
|
||
Share-based compensation grants
|
|
5
|
|
|
|
|
4
|
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Standard
|
Description
|
Date of Adoption
|
Effect on Financial Statements or Other Significant Matters
|
Accounting Standards Update (ASU) 2019-04
Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments
|
In April 2019, the FASB issued Codification improvements to clarify and correct certain areas of guidance amended as part of ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities; ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments; and ASU 2017-12, Derivative and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.
The most significant of these improvements to the Company was related to the Codification improvement to ASU 2017-12 and the clarification that a one-time reclassification of assets that are eligible to be hedged under the last-of-layer method (i.e., certain pre-payable securities) from held-to-maturity to available-for-sale is allowed under the new hedge accounting guidance and would not impact the Company’s ability to continue to classify other bonds as held-to-maturity.
The other amendments related to ASU 2017-12 and 2016-01 are either not significant, or were previously implemented as part of the related ASU adoptions.
Applicable amendments related to ASU 2016-13 are discussed within the recent adoption of that update below.
|
January 1, 2020
|
The adoption of this guidance resulted in a reclassification of $6.9 billion (at amortized cost) of pre-payable fixed-maturity securities from the held-to-maturity to the available-for-sale category. The reclassification resulted in recording in accumulated other comprehensive income a net unrealized gain of $848 million on an after-tax basis, based on the securities’ fair values on the reclassification date. The reclassification impacted the adoption of ASU 2016-13 (see ASU 2016-13 below for additional details).
|
ASU 2018-17 Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities
|
In October 2018, the FASB issued targeted improvements which provide that indirect interests held through related parties under common control should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.
|
January 1, 2020
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, or disclosures.
|
ASU 2018-13
Fair Value Measurement, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
|
In August 2018, the FASB issued amendments to the disclosure requirements on fair value measurements. The amendments remove, modify, and add certain disclosures.
|
January 1, 2020
|
The adoption of this guidance did not have a significant impact on the Company’s financial position, results of operations, or disclosures.
|
Standard
|
Description
|
Date of Adoption
|
Effect on Financial Statements or Other Significant Matters
|
ASU 2017-04
Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment
|
In January 2017, the FASB issued amendments simplifying the subsequent measurement of goodwill. An entity, under this update, is no longer required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, the entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.
|
January 1, 2020
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, or disclosures.
|
ASU 2016-13
Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments
as clarified and amended by:
ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,
ASU 2019-05, Financial Instruments - Credit Losses (Topic 326), Targeted Transition Relief
and
ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments- Credit Losses
|
In June 2016, the FASB issued amendments that require a financial asset (or a group of financial assets) measured at amortized cost to be presented net of an allowance for credit losses (Credit Losses ASU) in order to reflect the amount expected to be collected on the financial asset(s). The measurement of expected credit losses is amended by replacing the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information. Credit losses on available-for-sale debt securities will be measured in a manner similar to current U.S. GAAP; however, the amendments require that credit losses be presented as an allowance rather than as a write-down. Other amendments include changes to the balance sheet presentation and interest income recognition of purchased financial assets with a more-than-insignificant credit deterioration since origination (PCD financial assets).
|
January 1, 2020
|
The Company recorded a cumulative effect adjustment with a decrease to beginning 2020 retained earnings of $56 million, net of taxes. See Note 3 of the Notes to the Consolidated Financial Statements for credit loss disclosures. The following line items in the consolidated balance sheets were most significantly impacted by the adoption of the new accounting standard:
•
Fixed maturity securities held to maturity, at amortized cost
•
Commercial mortgage and other loans
•
Reinsurance recoverable, included within Other assets
|
2.
|
BUSINESS SEGMENT INFORMATION
|
|
|
Three Months Ended
March 31, |
|
||||||
(In millions)
|
|
2020
|
|
2019
|
|
||||
Revenues:
|
|
|
|
|
|
||||
Aflac Japan:
|
|
|
|
|
|
||||
Net earned premiums
|
|
$
|
3,150
|
|
|
$
|
3,180
|
|
|
Adjusted net investment income (1),(2)
|
|
642
|
|
|
610
|
|
|
||
Other income
|
|
11
|
|
|
12
|
|
|
||
Total adjusted revenue Aflac Japan
|
|
3,803
|
|
|
3,802
|
|
|
||
Aflac U.S.:
|
|
|
|
|
|
||||
Net earned premiums
|
|
1,483
|
|
|
1,461
|
|
|
||
Net investment income
|
|
177
|
|
|
177
|
|
|
||
Other income
|
|
27
|
|
|
2
|
|
|
||
Total adjusted revenue Aflac U.S.
|
|
1,687
|
|
|
1,640
|
|
|
||
Corporate and other (3)
|
|
104
|
|
|
95
|
|
|
||
Total adjusted revenues
|
|
5,594
|
|
|
5,537
|
|
|
||
Net investment gains (losses) (1),(2),(3)
|
|
(432
|
)
|
|
120
|
|
|
||
Total revenues
|
|
$
|
5,162
|
|
|
$
|
5,657
|
|
|
|
Three Months Ended
March 31, |
|
||||||
(In millions)
|
2020
|
|
2019
|
|
||||
Pretax adjusted earnings:
|
|
|
|
|
||||
Aflac Japan (1),(2)
|
$
|
855
|
|
|
$
|
834
|
|
|
Aflac U.S.
|
326
|
|
|
323
|
|
|
||
Corporate and other (3),(4)
|
2
|
|
|
(18
|
)
|
|
||
Pretax adjusted earnings (5)
|
1,183
|
|
|
1,139
|
|
|
||
Net investment gains (losses) (1),(2),(3),(4)
|
(448
|
)
|
|
103
|
|
|
||
Other income (loss)
|
(15
|
)
|
|
0
|
|
|
||
Total earnings before income taxes
|
$
|
720
|
|
|
$
|
1,242
|
|
|
Income taxes applicable to pretax adjusted earnings
|
$
|
301
|
|
|
$
|
291
|
|
|
Effect of foreign currency translation on after-tax
adjusted earnings |
9
|
|
|
(8
|
)
|
|
(In millions)
|
March 31,
2020 |
|
December 31,
2019 |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||
Aflac Japan
|
|
$
|
126,955
|
|
|
|
|
$
|
127,523
|
|
|
Aflac U.S.
|
|
20,526
|
|
|
|
|
20,945
|
|
|
||
Corporate and other
|
|
4,135
|
|
|
|
|
4,300
|
|
|
||
Total assets
|
|
$
|
151,616
|
|
|
|
|
$
|
152,768
|
|
|
3.
|
INVESTMENTS
|
|
March 31, 2020
|
||||||||||||||
(In millions)
|
Amortized Cost |
Allowance for Credit Losses
|
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
||||||||||
Securities available for sale, carried at fair
value through other comprehensive income: |
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
||||||||||
Yen-denominated:
|
|
|
|
|
|
||||||||||
Japan government and agencies
|
$
|
31,853
|
|
$
|
0
|
|
$
|
4,766
|
|
$
|
14
|
|
$
|
36,605
|
|
Municipalities
|
984
|
|
0
|
|
228
|
|
1
|
|
1,211
|
|
|||||
Mortgage- and asset-backed securities
|
306
|
|
0
|
|
31
|
|
0
|
|
337
|
|
|||||
Public utilities
|
4,412
|
|
0
|
|
430
|
|
93
|
|
4,749
|
|
|||||
Sovereign and supranational
|
1,300
|
|
0
|
|
33
|
|
27
|
|
1,306
|
|
|||||
Banks/financial institutions
|
7,159
|
|
0
|
|
404
|
|
557
|
|
7,006
|
|
|||||
Other corporate
|
7,817
|
|
0
|
|
753
|
|
389
|
|
8,181
|
|
|||||
Total yen-denominated
|
53,831
|
|
0
|
|
6,645
|
|
1,081
|
|
59,395
|
|
|||||
U.S. dollar-denominated:
|
|
|
|
|
|
||||||||||
U.S. government and agencies
|
350
|
|
0
|
|
23
|
|
0
|
|
373
|
|
|||||
Municipalities
|
1,084
|
|
0
|
|
145
|
|
0
|
|
1,229
|
|
|||||
Mortgage- and asset-backed securities
|
152
|
|
0
|
|
8
|
|
0
|
|
160
|
|
|||||
Public utilities
|
3,844
|
|
0
|
|
649
|
|
50
|
|
4,443
|
|
|||||
Sovereign and supranational
|
239
|
|
0
|
|
65
|
|
1
|
|
303
|
|
|||||
Banks/financial institutions
|
2,848
|
|
0
|
|
545
|
|
21
|
|
3,372
|
|
|||||
Other corporate
|
25,533
|
|
63
|
|
2,531
|
|
988
|
|
27,013
|
|
|||||
Total U.S. dollar-denominated
|
34,050
|
|
63
|
|
3,966
|
|
1,060
|
|
36,893
|
|
|||||
Total securities available for sale
|
$
|
87,881
|
|
$
|
63
|
|
$
|
10,611
|
|
$
|
2,141
|
|
$
|
96,288
|
|
|
December 31, 2019
|
|||||||||||
(In millions)
|
Amortized Cost |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
||||||||
Securities available for sale, carried at fair
value through other comprehensive income:
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
||||||||
Yen-denominated:
|
|
|
|
|
||||||||
Japan government and agencies
|
$
|
30,929
|
|
$
|
5,169
|
|
$
|
0
|
|
$
|
36,098
|
|
Municipalities
|
516
|
|
116
|
|
3
|
|
629
|
|
||||
Mortgage- and asset-backed securities
|
229
|
|
25
|
|
0
|
|
254
|
|
||||
Public utilities
|
1,855
|
|
406
|
|
0
|
|
2,261
|
|
||||
Sovereign and supranational
|
680
|
|
50
|
|
0
|
|
730
|
|
||||
Banks/financial institutions
|
6,152
|
|
700
|
|
86
|
|
6,766
|
|
||||
Other corporate
|
5,323
|
|
944
|
|
24
|
|
6,243
|
|
||||
Total yen-denominated
|
45,684
|
|
7,410
|
|
113
|
|
52,981
|
|
||||
U.S dollar-denominated:
|
|
|
|
|
||||||||
U.S. government and agencies
|
293
|
|
9
|
|
0
|
|
302
|
|
||||
Municipalities
|
1,077
|
|
141
|
|
0
|
|
1,218
|
|
||||
Mortgage- and asset-backed securities
|
149
|
|
7
|
|
0
|
|
156
|
|
||||
Public utilities
|
3,804
|
|
725
|
|
10
|
|
4,519
|
|
||||
Sovereign and supranational
|
239
|
|
73
|
|
0
|
|
312
|
|
||||
Banks/financial institutions
|
2,879
|
|
646
|
|
4
|
|
3,521
|
|
||||
Other corporate
|
25,246
|
|
3,255
|
|
248
|
|
28,253
|
|
||||
Total U.S. dollar-denominated
|
33,687
|
|
4,856
|
|
262
|
|
38,281
|
|
||||
Total securities available for sale
|
$
|
79,371
|
|
$
|
12,266
|
|
$
|
375
|
|
$
|
91,262
|
|
|
March 31, 2020
|
|||||||||||||||||
(In millions)
|
Amortized Cost |
Allowance for Credit Losses
|
Net Carrying Amount
|
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
||||||||||||
Securities held to maturity, carried at
amortized cost: |
|
|
|
|
|
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
||||||||||||
Yen-denominated:
|
|
|
|
|
|
|
||||||||||||
Japan government and agencies
|
$
|
22,387
|
|
$
|
3
|
|
$
|
22,384
|
|
$
|
5,810
|
|
$
|
0
|
|
$
|
28,194
|
|
Municipalities
|
362
|
|
0
|
|
362
|
|
122
|
|
0
|
|
484
|
|
||||||
Public utilities
|
46
|
|
1
|
|
45
|
|
14
|
|
0
|
|
59
|
|
||||||
Sovereign and supranational
|
469
|
|
5
|
|
464
|
|
114
|
|
0
|
|
578
|
|
||||||
Other corporate
|
23
|
|
0
|
|
23
|
|
9
|
|
0
|
|
32
|
|
||||||
Total yen-denominated
|
23,287
|
|
9
|
|
23,278
|
|
6,069
|
|
0
|
|
29,347
|
|
||||||
Total securities held to maturity
|
$
|
23,287
|
|
$
|
9
|
|
$
|
23,278
|
|
$
|
6,069
|
|
$
|
0
|
|
$
|
29,347
|
|
|
December 31, 2019
|
|||||||||||
(In millions)
|
Amortized Cost |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
||||||||
Securities held to maturity, carried at
amortized cost: |
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
||||||||
Yen-denominated:
|
|
|
|
|
||||||||
Japan government and agencies
|
$
|
22,241
|
|
$
|
6,050
|
|
$
|
0
|
|
$
|
28,291
|
|
Municipalities
|
821
|
|
262
|
|
0
|
|
1,083
|
|
||||
Mortgage- and asset-backed securities
|
16
|
|
1
|
|
0
|
|
17
|
|
||||
Public utilities
|
2,535
|
|
419
|
|
0
|
|
2,954
|
|
||||
Sovereign and supranational
|
1,123
|
|
197
|
|
0
|
|
1,320
|
|
||||
Banks/financial institutions
|
916
|
|
105
|
|
3
|
|
1,018
|
|
||||
Other corporate
|
2,433
|
|
485
|
|
7
|
|
2,911
|
|
||||
Total yen-denominated
|
30,085
|
|
7,519
|
|
10
|
|
37,594
|
|
||||
Total securities held to maturity
|
$
|
30,085
|
|
$
|
7,519
|
|
$
|
10
|
|
$
|
37,594
|
|
(In millions)
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
Equity securities, carried at fair value through net earnings:
|
Fair Value
|
|
Fair Value
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||
Yen-denominated
|
|
$
|
528
|
|
|
|
|
$
|
658
|
|
|
U.S. dollar-denominated
|
|
132
|
|
|
|
|
144
|
|
|
||
Total equity securities
|
|
$
|
660
|
|
|
|
|
$
|
802
|
|
|
(In millions)
|
Amortized
Cost (1) |
|
Fair
Value |
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
1,078
|
|
|
|
|
$
|
1,105
|
|
|
|
Due after one year through five years
|
|
8,992
|
|
|
|
|
8,806
|
|
|
|
||
Due after five years through 10 years
|
|
12,399
|
|
|
|
|
13,221
|
|
|
|
||
Due after 10 years
|
|
64,891
|
|
|
|
|
72,659
|
|
|
|
||
Mortgage- and asset-backed securities
|
|
458
|
|
|
|
|
497
|
|
|
|
||
Total fixed maturity securities available for sale
|
|
$
|
87,818
|
|
|
|
|
$
|
96,288
|
|
|
|
Held to maturity:
|
|
|
|
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
|
Due after one year through five years
|
|
0
|
|
|
|
|
0
|
|
|
|
||
Due after five years through 10 years
|
|
49
|
|
|
|
|
55
|
|
|
|
||
Due after 10 years
|
|
23,229
|
|
|
|
|
29,292
|
|
|
|
||
Mortgage- and asset-backed securities
|
|
0
|
|
|
|
|
0
|
|
|
|
||
Total fixed maturity securities held to maturity
|
|
$
|
23,278
|
|
|
|
|
$
|
29,347
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
(In millions)
|
Credit
Rating |
|
Amortized
Cost |
|
Fair
Value |
|
Credit
Rating |
|
Amortized
Cost |
|
Fair
Value |
Japan National Government(1)
|
A+
|
|
$52,786
|
|
$63,020
|
|
A+
|
|
$51,726
|
|
$62,584
|
|
|
Three Months Ended
March 31, |
|
||||||
(In millions)
|
|
2020
|
|
2019
|
|
||||
Net investment gains (losses):
|
|
|
|
|
|
||||
Sales and redemptions:
|
|
|
|
|
|
||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
||||
Gross gains from sales
|
|
$
|
7
|
|
|
$
|
12
|
|
|
Gross losses from sales
|
|
0
|
|
|
(8
|
)
|
|
||
Foreign currency gains (losses) on sales and redemptions
|
|
(14
|
)
|
|
13
|
|
|
||
Total sales and redemptions
|
|
(7
|
)
|
|
17
|
|
|
||
Equity securities
|
|
(149
|
)
|
|
58
|
|
|
||
Loan loss reserves (1)
|
|
0
|
|
|
(2
|
)
|
|
||
Credit losses:
|
|
|
|
|
|
||||
Fixed maturity securities available for sale
|
|
(63
|
)
|
|
0
|
|
|
||
Fixed maturity securities held to maturity
|
|
1
|
|
|
0
|
|
|
||
Commercial mortgage and other loans
|
|
(37
|
)
|
|
0
|
|
|
||
Loan commitments
|
|
(46
|
)
|
|
0
|
|
|
||
Total credit losses
|
|
(145
|
)
|
|
0
|
|
|
||
Derivatives and other:
|
|
|
|
|
|
||||
Derivative gains (losses)
|
|
(85
|
)
|
|
0
|
|
|
||
Foreign currency gains (losses)
|
|
(77
|
)
|
|
(2
|
)
|
|
||
Total derivatives and other
|
|
(162
|
)
|
|
(2
|
)
|
|
||
Total net investment gains (losses)
|
|
$
|
(463
|
)
|
|
$
|
71
|
|
|
(In millions)
|
March 31, 2020
|
|
December 31,
2019 |
||||||||
Unrealized gains (losses) on securities available for sale
|
|
$
|
8,470
|
|
|
|
|
$
|
11,891
|
|
|
Deferred income taxes
|
|
(2,427
|
)
|
|
|
|
(3,343
|
)
|
|
||
Shareholders’ equity, unrealized gains (losses) on fixed maturity securities
|
|
$
|
6,043
|
|
|
|
|
$
|
8,548
|
|
|
|
March 31, 2020
|
||||||||||||||||||||||||||||||||||
|
Total
|
|
Less than 12 months
|
|
12 months or longer
|
||||||||||||||||||||||||||||||
(In millions)
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
||||||||||||||||||||||||
Fixed maturity securities available
for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Japan government and
agencies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Yen-denominated
|
|
$
|
725
|
|
|
|
|
$
|
14
|
|
|
|
|
$
|
725
|
|
|
|
|
$
|
14
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Yen-denominated
|
|
56
|
|
|
|
|
1
|
|
|
|
|
42
|
|
|
|
|
0
|
|
|
|
|
14
|
|
|
|
|
1
|
|
|
||||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
825
|
|
|
|
|
50
|
|
|
|
|
701
|
|
|
|
|
38
|
|
|
|
|
124
|
|
|
|
|
12
|
|
|
||||||
Yen-denominated
|
|
880
|
|
|
|
|
93
|
|
|
|
|
880
|
|
|
|
|
93
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
18
|
|
|
|
|
1
|
|
|
|
|
18
|
|
|
|
|
1
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Yen-denominated
|
|
701
|
|
|
|
|
27
|
|
|
|
|
701
|
|
|
|
|
27
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
355
|
|
|
|
|
21
|
|
|
|
|
321
|
|
|
|
|
13
|
|
|
|
|
34
|
|
|
|
|
8
|
|
|
||||||
Yen-denominated
|
|
3,410
|
|
|
|
|
557
|
|
|
|
|
2,626
|
|
|
|
|
406
|
|
|
|
|
784
|
|
|
|
|
151
|
|
|
||||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
8,244
|
|
|
|
|
988
|
|
|
|
|
5,427
|
|
|
|
|
527
|
|
|
|
|
2,817
|
|
|
|
|
461
|
|
|
||||||
Yen-denominated
|
|
2,829
|
|
|
|
|
389
|
|
|
|
|
2,677
|
|
|
|
|
357
|
|
|
|
|
152
|
|
|
|
|
32
|
|
|
||||||
Total
|
|
$
|
18,043
|
|
|
|
|
$
|
2,141
|
|
|
|
|
$
|
14,118
|
|
|
|
|
$
|
1,476
|
|
|
|
|
$
|
3,925
|
|
|
|
|
$
|
665
|
|
|
|
December 31, 2019
|
||||||||||||||||||||||||||||||||||
|
Total
|
|
Less than 12 months
|
|
12 months or longer
|
||||||||||||||||||||||||||||||
(In millions)
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
||||||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Yen-denominated
|
|
$
|
80
|
|
|
|
|
$
|
3
|
|
|
|
|
$
|
80
|
|
|
|
|
$
|
3
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
306
|
|
|
|
|
10
|
|
|
|
|
69
|
|
|
|
|
2
|
|
|
|
|
237
|
|
|
|
|
8
|
|
|
||||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
79
|
|
|
|
|
4
|
|
|
|
|
18
|
|
|
|
|
0
|
|
|
|
|
61
|
|
|
|
|
4
|
|
|
||||||
Yen-denominated
|
|
1,828
|
|
|
|
|
89
|
|
|
|
|
1,828
|
|
|
|
|
89
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
4,261
|
|
|
|
|
248
|
|
|
|
|
792
|
|
|
|
|
53
|
|
|
|
|
3,469
|
|
|
|
|
195
|
|
|
||||||
Yen-denominated
|
|
636
|
|
|
|
|
31
|
|
|
|
|
636
|
|
|
|
|
31
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Total
|
|
$
|
7,190
|
|
|
|
|
$
|
385
|
|
|
|
|
$
|
3,423
|
|
|
|
|
$
|
178
|
|
|
|
|
$
|
3,767
|
|
|
|
|
$
|
207
|
|
|
(In millions)
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||
|
Amortized Cost
|
|
% of Total
|
|
Amortized Cost
|
|
% of Total
|
||||||
Commercial Mortgage and other loans:
|
|
|
|
|
|
|
|
||||||
Transitional real estate loans:
|
|
|
|
|
|
|
|
||||||
Office
|
$
|
1,954
|
|
|
18.0
|
%
|
|
$
|
1,800
|
|
|
18.7
|
%
|
Retail
|
165
|
|
|
1.5
|
|
|
131
|
|
|
1.4
|
|
||
Apartments/Multi-Family
|
2,065
|
|
|
19.0
|
|
|
2,085
|
|
|
21.7
|
|
||
Industrial
|
175
|
|
|
1.6
|
|
|
256
|
|
|
2.7
|
|
||
Hospitality
|
1,024
|
|
|
9.4
|
|
|
1,036
|
|
|
10.8
|
|
||
Other
|
260
|
|
|
2.4
|
|
|
164
|
|
|
1.7
|
|
||
Total transitional real estate loans
|
5,643
|
|
|
51.9
|
|
|
5,472
|
|
|
57.0
|
|
||
Commercial mortgage loans:
|
|
|
|
|
|
|
|
||||||
Office
|
408
|
|
|
3.8
|
|
|
410
|
|
|
4.3
|
|
||
Retail
|
346
|
|
|
3.1
|
|
|
348
|
|
|
3.5
|
|
||
Apartments/Multi-Family
|
589
|
|
|
5.4
|
|
|
569
|
|
|
5.9
|
|
||
Industrial
|
397
|
|
|
3.7
|
|
|
383
|
|
|
4.0
|
|
||
Total commercial mortgage loans
|
1,740
|
|
|
16.0
|
|
|
1,710
|
|
|
17.7
|
|
||
Middle market loans
|
3,492
|
|
|
32.1
|
|
|
2,432
|
|
|
25.3
|
|
||
Total commercial mortgage and other loans
|
$
|
10,875
|
|
|
100.0
|
%
|
|
$
|
9,614
|
|
|
100.0
|
%
|
Allowance for credit losses
|
(125
|
)
|
|
|
|
(45
|
)
|
(1)
|
|
||||
Total net commercial mortgage and other loans
|
$
|
10,750
|
|
|
|
|
$
|
9,569
|
|
|
|
Commercial Mortgage Loans
|
|||||||||||||||||||||||
(In millions)
|
2020
|
2019
|
2018
|
2017
|
2016
|
Prior
|
Total
|
Weighted-Average DSCR
|
|||||||||||||||
Loan-to-Value Ratio:
|
|
|
|
|
|
|
|
|
|||||||||||||||
0%-59.99%
|
$
|
12
|
|
$
|
474
|
|
$
|
156
|
|
$
|
69
|
|
$
|
683
|
|
$
|
0
|
|
$
|
1,394
|
|
2.43
|
|
60%-69.99%
|
27
|
|
190
|
|
16
|
|
0
|
|
90
|
|
0
|
|
323
|
|
1.74
|
|
|||||||
70%-79.99%
|
0
|
|
0
|
|
0
|
|
0
|
|
23
|
|
0
|
|
23
|
|
1.32
|
|
|||||||
Total
|
39
|
|
664
|
|
172
|
|
69
|
|
796
|
|
0
|
|
1,740
|
|
2.29
|
|
|||||||
Weighted Average DSCR
|
1.84
|
2.33
|
2.16
|
2.37
|
2.30
|
0
|
2.29
|
|
Middle Market Loans
|
||||||||||||||||||||||||
(In millions)
|
2020
|
2019
|
2018
|
2017
|
2016
|
Prior
|
Revolving Loans
|
Total
|
||||||||||||||||
Credit Ratings:
|
|
|
|
|
|
|
|
|
||||||||||||||||
BBB
|
$
|
9
|
|
$
|
57
|
|
$
|
52
|
|
$
|
22
|
|
$
|
12
|
|
$
|
0
|
|
$
|
15
|
|
$
|
167
|
|
BB
|
86
|
|
277
|
|
187
|
|
140
|
|
56
|
|
20
|
|
84
|
|
850
|
|
||||||||
B
|
210
|
|
827
|
|
466
|
|
309
|
|
98
|
|
58
|
|
338
|
|
2,306
|
|
||||||||
CCC
|
0
|
|
58
|
|
10
|
|
34
|
|
25
|
|
4
|
|
15
|
|
146
|
|
||||||||
CC
|
0
|
|
1
|
|
0
|
|
18
|
|
0
|
|
2
|
|
2
|
|
23
|
|
||||||||
Total
|
$
|
305
|
|
$
|
1,220
|
|
$
|
715
|
|
$
|
523
|
|
$
|
191
|
|
$
|
84
|
|
$
|
454
|
|
$
|
3,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Transitional Real Estate Loans
|
Commercial Mortgage Loans
|
Middle Market Loans
|
Held to Maturity Securities
|
Available for Sale Securities
|
Reinsurance Recoverables
|
||||||||||||
Balance at December 31, 2019 (1)
|
$
|
(22
|
)
|
$
|
(3
|
)
|
$
|
(20
|
)
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
Transition impact to retained earnings
|
(2
|
)
|
(8
|
)
|
(33
|
)
|
(10
|
)
|
0
|
|
(11
|
)
|
||||||
(Addition to) release of allowance for credit losses
|
(3
|
)
|
0
|
|
(34
|
)
|
1
|
|
(63
|
)
|
0
|
|
||||||
Balance at March 31, 2020
|
$
|
(27
|
)
|
$
|
(11
|
)
|
$
|
(87
|
)
|
$
|
(9
|
)
|
$
|
(63
|
)
|
$
|
(11
|
)
|
|
|
|
|
(In millions)
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
Other investments:
|
|
|
|
|
|
|
|
||||
Policy loans
|
|
$
|
253
|
|
|
|
|
$
|
250
|
|
|
Short-term investments (1)
|
|
892
|
|
|
|
|
628
|
|
|
||
Limited partnerships
|
|
669
|
|
|
|
|
569
|
|
|
||
Other
|
|
29
|
|
|
|
|
30
|
|
|
||
Total other investments
|
|
$
|
1,843
|
|
|
|
|
$
|
1,477
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
(In millions)
|
Amortized
Cost (1) |
|
Fair
Value |
|
Amortized
Cost |
|
Fair
Value |
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities, available for sale
|
|
$
|
3,208
|
|
|
|
|
$
|
3,786
|
|
|
|
|
$
|
3,308
|
|
|
|
|
$
|
4,312
|
|
|
Commercial mortgage and other loans
|
|
9,051
|
|
|
|
|
8,737
|
|
|
|
|
7,956
|
|
|
|
|
8,015
|
|
|
||||
Other investments (2)
|
|
550
|
|
|
|
|
550
|
|
|
|
|
494
|
|
|
|
|
494
|
|
|
||||
Other assets (3)
|
|
89
|
|
|
|
|
89
|
|
|
|
|
169
|
|
|
|
|
169
|
|
|
||||
Total assets of consolidated VIEs
|
|
$
|
12,898
|
|
|
|
|
$
|
13,162
|
|
|
|
|
$
|
11,927
|
|
|
|
|
$
|
12,990
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities (3)
|
|
$
|
235
|
|
|
|
|
$
|
235
|
|
|
|
|
$
|
126
|
|
|
|
|
$
|
126
|
|
|
Total liabilities of consolidated VIEs
|
|
$
|
235
|
|
|
|
|
$
|
235
|
|
|
|
|
$
|
126
|
|
|
|
|
$
|
126
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
(In millions)
|
Amortized
Cost |
|
Fair
Value |
|
Amortized
Cost |
|
Fair
Value |
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities, available for sale
|
|
$
|
5,999
|
|
|
|
|
$
|
6,397
|
|
|
|
|
$
|
4,129
|
|
|
|
|
$
|
4,884
|
|
|
Fixed maturity securities, held to maturity
|
|
0
|
|
|
|
|
0
|
|
|
|
|
1,848
|
|
|
|
|
2,236
|
|
|
||||
Other investments (1)
|
|
119
|
|
|
|
|
119
|
|
|
|
|
75
|
|
|
|
|
74
|
|
|
||||
Total investments in VIEs not consolidated
|
|
$
|
6,118
|
|
|
|
|
$
|
6,516
|
|
|
|
|
$
|
6,052
|
|
|
|
|
$
|
7,194
|
|
|
|
|
4.
|
DERIVATIVE INSTRUMENTS
|
•
|
foreign currency forwards and options used in hedging foreign exchange risk on U.S. dollar-denominated investments in Aflac Japan's portfolio
|
•
|
foreign currency forwards and options used to economically hedge certain portions of forecasted cash flows denominated in yen and hedge the Company's long term exposure to a weakening yen
|
•
|
cross-currency interest rate swaps, also referred to as foreign currency swaps, associated with certain senior notes and subordinated debentures
|
•
|
foreign currency swaps and, in prior periods, credit default swaps that are associated with investments in special-purpose entities, including VIEs where the Company is the primary beneficiary
|
•
|
interest rate swaps used to economically hedge interest rate fluctuations in certain variable-rate investments
|
•
|
interest rate swaptions used to hedge changes in the fair value associated with interest rate fluctuations for certain U.S. dollar-denominated available-for-sale fixed-maturity securities.
|
|
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
|
||||||||||||||||||||||||||||
(In millions)
|
|
|
|
Asset
Derivatives |
|
Liability
Derivatives |
|
|
Asset
Derivatives |
|
Liability
Derivatives |
|
||||||||||||||||||||||||
Hedge Designation/ Derivative
Type |
|
Notional
Amount |
|
Fair Value
|
|
Fair Value
|
Notional
Amount |
|
Fair Value
|
|
Fair Value
|
|
||||||||||||||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency swaps - VIE
|
|
|
$
|
75
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
11
|
|
|
|
$
|
75
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
8
|
|
|
|
Total cash flow hedges
|
|
|
75
|
|
|
|
|
0
|
|
|
|
|
11
|
|
|
|
75
|
|
|
|
|
0
|
|
|
|
|
8
|
|
|
|
||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forwards
|
|
|
63
|
|
|
|
|
0
|
|
|
|
|
1
|
|
|
|
964
|
|
|
|
|
0
|
|
|
|
|
38
|
|
|
|
||||||
Foreign currency options
|
|
|
8,809
|
|
|
|
|
12
|
|
|
|
|
23
|
|
|
|
11,573
|
|
|
|
|
0
|
|
|
|
|
5
|
|
|
|
||||||
Interest rate swaptions
|
|
|
243
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
243
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
||||||
Total fair value hedges
|
|
|
9,115
|
|
|
|
|
12
|
|
|
|
|
24
|
|
|
|
12,780
|
|
|
|
|
0
|
|
|
|
|
43
|
|
|
|
||||||
Net investment hedge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forwards
|
|
|
4,985
|
|
|
|
|
85
|
|
|
|
|
6
|
|
|
|
4,952
|
|
|
|
|
72
|
|
|
|
|
2
|
|
|
|
||||||
Foreign currency options
|
|
|
2,040
|
|
|
|
|
7
|
|
|
|
|
0
|
|
|
|
2,000
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
||||||
Total net investment hedge
|
|
|
7,025
|
|
|
|
|
92
|
|
|
|
|
6
|
|
|
|
6,952
|
|
|
|
|
72
|
|
|
|
|
2
|
|
|
|
||||||
Non-qualifying strategies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency swaps
|
|
|
2,250
|
|
|
|
|
66
|
|
|
|
|
38
|
|
|
|
2,800
|
|
|
|
|
72
|
|
|
|
|
78
|
|
|
|
||||||
Foreign currency swaps - VIE
|
|
|
2,587
|
|
|
|
|
89
|
|
|
|
|
224
|
|
|
|
2,587
|
|
|
|
|
169
|
|
|
|
|
118
|
|
|
|
||||||
Foreign currency forwards
|
|
|
20,614
|
|
|
|
|
184
|
|
|
|
|
420
|
|
|
|
19,821
|
|
|
|
|
166
|
|
|
|
|
337
|
|
|
|
||||||
Foreign currency options
|
|
|
9,248
|
|
|
|
|
8
|
|
|
|
|
0
|
|
|
|
9,553
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
||||||
Interest rate swaps
|
|
|
2,370
|
|
|
|
|
21
|
|
|
|
|
0
|
|
|
|
7,120
|
|
|
|
|
3
|
|
|
|
|
0
|
|
|
|
||||||
Interest rate swaptions
|
|
|
7
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
7
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
||||||
Total non-qualifying strategies
|
|
|
37,076
|
|
|
|
|
368
|
|
|
|
|
682
|
|
|
|
41,888
|
|
|
|
|
410
|
|
|
|
|
533
|
|
|
|
||||||
Total derivatives
|
|
|
$
|
53,291
|
|
|
|
|
$
|
472
|
|
|
|
|
$
|
723
|
|
|
|
$
|
61,695
|
|
|
|
|
$
|
482
|
|
|
|
|
$
|
586
|
|
|
|
(In millions)
|
|
|
Hedging Derivatives
|
|
Hedged Items
|
|
|
||||||||||||||
Hedging Derivatives
|
Hedged Items
|
|
Total
Gains (Losses) |
|
Gains (Losses)
Excluded from Effectiveness Testing(1) |
|
Gains (Losses)
Included in Effectiveness Testing(2) |
|
Gains (Losses)(2)
|
|
Net Investment Gains (Losses) Recognized for Fair Value Hedge
|
||||||||||
Three Months Ended March 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency
forwards |
Fixed maturity securities
|
|
$
|
(16
|
)
|
|
$
|
(7
|
)
|
|
$
|
(9
|
)
|
|
$
|
10
|
|
|
$
|
1
|
|
Total gains (losses)
|
|
|
$
|
(16
|
)
|
|
$
|
(7
|
)
|
|
$
|
(9
|
)
|
|
$
|
10
|
|
|
$
|
1
|
|
Three Months Ended March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency forwards
|
Fixed maturity securities
|
|
$
|
9
|
|
|
$
|
(10
|
)
|
|
$
|
19
|
|
|
$
|
(18
|
)
|
|
$
|
1
|
|
Foreign currency options
|
Fixed maturity securities
|
|
(4
|
)
|
|
(4
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
Interest rate
swaptions |
Fixed maturity securities
|
|
(1
|
)
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
Total gains (losses)
|
|
|
$
|
4
|
|
|
$
|
(15
|
)
|
|
$
|
19
|
|
|
$
|
(18
|
)
|
|
$
|
1
|
|
(In millions)
|
Carrying Amount of the Hedged Assets/(Liabilities)(1)
|
|
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Assets/(Liabilities)
|
|
|||||||||||||
|
|
March 31, 2020
|
|
December 31, 2019
|
|
March 31, 2020
|
|
December 31, 2019
|
|
||||||||
Fixed maturity securities
|
|
$
|
4,469
|
|
|
$
|
4,633
|
|
|
$
|
249
|
|
|
$
|
256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||||||||||||||
|
2020
|
2019
|
||||||||||||||||||||||||||||||
(In millions)
|
Net Investment Income(1)
|
Net Investment
Gains (Losses) |
Other
Comprehensive Income (Loss)(2) |
Net Investment Income(1)
|
Net Investment
Gains (Losses) |
Other
Comprehensive Income (Loss)(2) |
||||||||||||||||||||||||||
Qualifying hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign currency swaps - VIE
|
|
$
|
(1
|
)
|
|
|
$
|
0
|
|
|
|
$
|
(4
|
)
|
|
|
$
|
(1
|
)
|
|
|
$
|
0
|
|
|
|
$
|
(2
|
)
|
|
||
Total cash flow hedges
|
|
(1
|
)
|
|
|
0
|
|
(3
|
)
|
|
(4
|
)
|
|
|
(1
|
)
|
|
|
0
|
|
(3
|
)
|
|
(2
|
)
|
|
||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign currency forwards(3)
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
||||||||||||
Foreign currency options(3)
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
||||||||||||
Interest rate swaptions(3)
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(1
|
)
|
|
||||||||
Total fair value hedges
|
|
0
|
|
|
|
(6
|
)
|
|
|
0
|
|
|
|
0
|
|
|
|
(13
|
)
|
|
|
(1
|
)
|
|
||||||||
Net investment hedge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-derivative hedging
instruments
|
|
|
|
|
0
|
|
|
|
6
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
||||||||||
Foreign currency forwards
|
|
|
|
|
51
|
|
|
|
(25
|
)
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
||||||||||
Foreign currency options
|
|
|
|
|
6
|
|
|
|
0
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
||||||||||
Total net investment hedge
|
|
|
|
|
57
|
|
|
|
(19
|
)
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
||||||||||
Non-qualifying strategies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign currency swaps
|
|
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
44
|
|
|
|
|
|
||||||||||
Foreign currency swaps - VIE
|
|
|
|
|
|
(195
|
)
|
|
|
|
|
|
|
|
|
|
(16
|
)
|
|
|
|
|
||||||||||
Foreign currency forwards
|
|
|
|
|
|
(36
|
)
|
|
|
|
|
|
|
|
|
|
(21
|
)
|
|
|
|
|
||||||||||
Foreign currency options
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
||||||||||
Total non-qualifying strategies
|
|
|
|
|
|
(136
|
)
|
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
||||||||||
Total
|
|
$
|
(1
|
)
|
|
|
$
|
(85
|
)
|
|
|
$
|
(23
|
)
|
|
|
$
|
(1
|
)
|
|
|
$
|
0
|
|
|
|
$
|
(3
|
)
|
|
March 31, 2020
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
Gross Amounts Not Offset
in Balance Sheet |
|
|
||||||||||||||||||||||||||||||||||
(In millions)
|
Gross Amount of Recognized Assets
|
|
Gross Amount
Offset in
Balance Sheet
|
|
Net Amount of Assets Presented
in Balance Sheet
|
|
Financial Instruments
|
|
Securities
Collateral
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||||||||||||||||
Derivative
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative
assets subject to a
master netting
agreement or
offsetting
arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC - bilateral
|
|
$
|
362
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
362
|
|
|
|
|
$
|
(229
|
)
|
|
|
$
|
(7
|
)
|
|
|
$
|
(121
|
)
|
|
|
|
$
|
5
|
|
|
OTC - cleared
|
|
21
|
|
|
|
|
0
|
|
|
|
|
21
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(11
|
)
|
|
|
|
10
|
|
|
|||||||
Total derivative
assets subject to a
master netting
agreement or
offsetting
arrangement
|
|
383
|
|
|
|
|
0
|
|
|
|
|
383
|
|
|
|
|
(229
|
)
|
|
|
(7
|
)
|
|
|
(132
|
)
|
|
|
|
15
|
|
|
|||||||
Derivative
assets not subject
to a master netting
agreement or
offsetting
arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC - bilateral
|
|
89
|
|
|
|
|
|
|
|
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
89
|
|
|
|||||||||||
Total derivative
assets not subject
to a master netting
agreement or
offsetting
arrangement
|
|
89
|
|
|
|
|
|
|
|
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
89
|
|
|
|||||||||||
Total derivative
assets
|
|
472
|
|
|
|
|
0
|
|
|
|
|
472
|
|
|
|
|
(229
|
)
|
|
|
(7
|
)
|
|
|
(132
|
)
|
|
|
|
104
|
|
|
|||||||
Securities lending
and similar
arrangements
|
|
2,952
|
|
|
|
|
0
|
|
|
|
|
2,952
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(2,952
|
)
|
|
|
|
0
|
|
|
|||||||
Total
|
|
$
|
3,424
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
3,424
|
|
|
|
|
$
|
(229
|
)
|
|
|
$
|
(7
|
)
|
|
|
$
|
(3,084
|
)
|
|
|
|
$
|
104
|
|
|
December 31, 2019
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
Gross Amounts Not Offset
in Balance Sheet |
|
|
||||||||||||||||||||||||||||||||||
(In millions)
|
Gross Amount of Recognized Assets
|
|
Gross Amount
Offset in
Balance Sheet
|
|
Net Amount of Assets Presented
in Balance Sheet
|
|
Financial Instruments
|
|
Securities
Collateral
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||||||||||||||||
Derivative
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative
assets subject to a
master netting
agreement or
offsetting
arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC - bilateral
|
|
$
|
310
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
310
|
|
|
|
|
$
|
(190
|
)
|
|
|
$
|
(7
|
)
|
|
|
$
|
(113
|
)
|
|
|
|
$
|
0
|
|
|
OTC - cleared
|
|
3
|
|
|
|
|
0
|
|
|
|
|
3
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
3
|
|
|
|||||||
Total derivative
assets subject to a
master netting
agreement or
offsetting
arrangement
|
|
313
|
|
|
|
|
0
|
|
|
|
|
313
|
|
|
|
|
(190
|
)
|
|
|
(7
|
)
|
|
|
(113
|
)
|
|
|
|
3
|
|
|
|||||||
Derivative
assets not subject
to a master netting
agreement or
offsetting
arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC - bilateral
|
|
169
|
|
|
|
|
|
|
|
|
169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
169
|
|
|
|||||||||||
Total derivative
assets not subject
to a master netting
agreement or
offsetting
arrangement
|
|
169
|
|
|
|
|
|
|
|
|
169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
169
|
|
|
|||||||||||
Total derivative
assets
|
|
482
|
|
|
|
|
0
|
|
|
|
|
482
|
|
|
|
|
(190
|
)
|
|
|
(7
|
)
|
|
|
(113
|
)
|
|
|
|
172
|
|
|
|||||||
Securities lending
and similar
arrangements
|
|
1,860
|
|
|
|
|
0
|
|
|
|
|
1,860
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(1,860
|
)
|
|
|
|
0
|
|
|
|||||||
Total
|
|
$
|
2,342
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
2,342
|
|
|
|
|
$
|
(190
|
)
|
|
|
$
|
(7
|
)
|
|
|
$
|
(1,973
|
)
|
|
|
|
$
|
172
|
|
|
March 31, 2020
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
Gross Amounts Not Offset
in Balance Sheet |
|
|
||||||||||||||||||||||||||||||||||
(In millions)
|
Gross Amount of Recognized Liabilities
|
|
Gross Amount
Offset in
Balance Sheet
|
|
Net Amount of Liabilities Presented
in Balance Sheet
|
|
Financial Instruments
|
|
Securities
Collateral
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||||||||||||||||||||
Derivative
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative
liabilities subject
to a master netting
agreement or
offsetting
arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC - bilateral
|
|
$
|
488
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
488
|
|
|
|
|
$
|
(229
|
)
|
|
|
$
|
(175
|
)
|
|
|
$
|
(2
|
)
|
|
|
|
$
|
82
|
|
|
Total derivative
liabilities subject
to a master netting
agreement or
offsetting
arrangement
|
|
488
|
|
|
|
|
0
|
|
|
|
|
488
|
|
|
|
|
(229
|
)
|
|
|
(175
|
)
|
|
|
(2
|
)
|
|
|
|
82
|
|
|
|||||||
Derivative
liabilities not
subject to a
master netting
agreement or
offsetting
arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC - bilateral
|
|
235
|
|
|
|
|
|
|
|
|
235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
235
|
|
|
|||||||||||
Total derivative
liabilities not
subject to a
master netting
agreement or
offsetting
arrangement
|
|
235
|
|
|
|
|
|
|
|
|
235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
235
|
|
|
|||||||||||
Total derivative
liabilities
|
|
723
|
|
|
|
|
0
|
|
|
|
|
723
|
|
|
|
|
(229
|
)
|
|
|
(175
|
)
|
|
|
(2
|
)
|
|
|
|
317
|
|
|
|||||||
Securities lending
and similar
arrangements
|
|
2,969
|
|
|
|
|
0
|
|
|
|
|
2,969
|
|
|
|
|
(2,952
|
)
|
|
|
0
|
|
|
|
0
|
|
|
|
|
17
|
|
|
|||||||
Total
|
|
$
|
3,692
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
3,692
|
|
|
|
|
$
|
(3,181
|
)
|
|
|
$
|
(175
|
)
|
|
|
$
|
(2
|
)
|
|
|
|
$
|
334
|
|
|
December 31, 2019
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
Gross Amounts Not Offset
in Balance Sheet |
|
|
||||||||||||||||||||||||||||||||||
(In millions)
|
Gross Amount of Recognized Liabilities
|
|
Gross Amount
Offset in
Balance Sheet
|
|
Net Amount of Liabilities Presented
in Balance Sheet
|
|
Financial Instruments
|
|
Securities
Collateral
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||||||||||||||||||||
Derivative
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative
liabilities subject
to a master netting
agreement or
offsetting
arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC - bilateral
|
|
$
|
459
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
459
|
|
|
|
|
$
|
(190
|
)
|
|
|
$
|
(222
|
)
|
|
|
$
|
(32
|
)
|
|
|
|
$
|
15
|
|
|
OTC - cleared
|
|
1
|
|
|
|
|
0
|
|
|
|
|
1
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(1
|
)
|
|
|
|
0
|
|
|
|||||||
Total derivative
liabilities subject
to a master netting
agreement or
offsetting
arrangement
|
|
460
|
|
|
|
|
0
|
|
|
|
|
460
|
|
|
|
|
(190
|
)
|
|
|
(222
|
)
|
|
|
(33
|
)
|
|
|
|
15
|
|
|
|||||||
Derivative
liabilities not
subject to a
master netting
agreement or
offsetting
arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC - bilateral
|
|
126
|
|
|
|
|
|
|
|
|
126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
126
|
|
|
|||||||||||
Total derivative
liabilities not
subject to a
master netting
agreement or
offsetting
arrangement
|
|
126
|
|
|
|
|
|
|
|
|
126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
126
|
|
|
|||||||||||
Total derivative
liabilities
|
|
586
|
|
|
|
|
0
|
|
|
|
|
586
|
|
|
|
|
(190
|
)
|
|
|
(222
|
)
|
|
|
(33
|
)
|
|
|
|
141
|
|
|
|||||||
Securities lending
and similar
arrangements
|
|
1,876
|
|
|
|
|
0
|
|
|
|
|
1,876
|
|
|
|
|
(1,860
|
)
|
|
|
0
|
|
|
|
0
|
|
|
|
|
16
|
|
|
|||||||
Total
|
|
$
|
2,462
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
2,462
|
|
|
|
|
$
|
(2,050
|
)
|
|
|
$
|
(222
|
)
|
|
|
$
|
(33
|
)
|
|
|
|
$
|
157
|
|
|
5.
|
FAIR VALUE MEASUREMENTS
|
|
March 31, 2020
|
||||||||||||||||||||||
(In millions)
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total
Fair Value |
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Securities available for sale, carried at
fair value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies
|
|
$
|
35,469
|
|
|
|
|
$
|
1,509
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
36,978
|
|
|
Municipalities
|
|
0
|
|
|
|
|
2,440
|
|
|
|
|
0
|
|
|
|
|
2,440
|
|
|
||||
Mortgage- and asset-backed securities
|
|
0
|
|
|
|
|
309
|
|
|
|
|
188
|
|
|
|
|
497
|
|
|
||||
Public utilities
|
|
0
|
|
|
|
|
8,894
|
|
|
|
|
298
|
|
|
|
|
9,192
|
|
|
||||
Sovereign and supranational
|
|
0
|
|
|
|
|
1,609
|
|
|
|
|
0
|
|
|
|
|
1,609
|
|
|
||||
Banks/financial institutions
|
|
0
|
|
|
|
|
10,355
|
|
|
|
|
23
|
|
|
|
|
10,378
|
|
|
||||
Other corporate
|
|
0
|
|
|
|
|
34,949
|
|
|
|
|
245
|
|
|
|
|
35,194
|
|
|
||||
Total fixed maturity securities
|
|
35,469
|
|
|
|
|
60,065
|
|
|
|
|
754
|
|
|
|
|
96,288
|
|
|
||||
Equity securities
|
|
509
|
|
|
|
|
69
|
|
|
|
|
82
|
|
|
|
|
660
|
|
|
||||
Other investments
|
|
892
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
892
|
|
|
||||
Cash and cash equivalents
|
|
4,148
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
4,148
|
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
0
|
|
|
|
|
66
|
|
|
|
|
89
|
|
|
|
|
155
|
|
|
||||
Foreign currency forwards
|
|
0
|
|
|
|
|
269
|
|
|
|
|
0
|
|
|
|
|
269
|
|
|
||||
Foreign currency options
|
|
0
|
|
|
|
|
27
|
|
|
|
|
0
|
|
|
|
|
27
|
|
|
||||
Interest rate swaps
|
|
0
|
|
|
|
|
21
|
|
|
|
|
0
|
|
|
|
|
21
|
|
|
||||
Total other assets
|
|
0
|
|
|
|
|
383
|
|
|
|
|
89
|
|
|
|
|
472
|
|
|
||||
Total assets
|
|
$
|
41,018
|
|
|
|
|
$
|
60,517
|
|
|
|
|
$
|
925
|
|
|
|
|
$
|
102,460
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
$
|
0
|
|
|
|
|
$
|
38
|
|
|
|
|
$
|
235
|
|
|
|
|
$
|
273
|
|
|
Foreign currency forwards
|
|
0
|
|
|
|
|
427
|
|
|
|
|
0
|
|
|
|
|
427
|
|
|
||||
Foreign currency options
|
|
0
|
|
|
|
|
23
|
|
|
|
|
0
|
|
|
|
|
23
|
|
|
||||
Total liabilities
|
|
$
|
0
|
|
|
|
|
$
|
488
|
|
|
|
|
$
|
235
|
|
|
|
|
$
|
723
|
|
|
|
December 31, 2019
|
||||||||||||||||||||||
(In millions)
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total
Fair Value |
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Securities available for sale, carried at
fair value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies
|
|
$
|
34,878
|
|
|
|
|
$
|
1,522
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
36,400
|
|
|
Municipalities
|
|
0
|
|
|
|
|
1,847
|
|
|
|
|
0
|
|
|
|
|
1,847
|
|
|
||||
Mortgage- and asset-backed securities
|
|
0
|
|
|
|
|
232
|
|
|
|
|
178
|
|
|
|
|
410
|
|
|
||||
Public utilities
|
|
0
|
|
|
|
|
6,556
|
|
|
|
|
224
|
|
|
|
|
6,780
|
|
|
||||
Sovereign and supranational
|
|
0
|
|
|
|
|
1,042
|
|
|
|
|
0
|
|
|
|
|
1,042
|
|
|
||||
Banks/financial institutions
|
|
0
|
|
|
|
|
10,264
|
|
|
|
|
23
|
|
|
|
|
10,287
|
|
|
||||
Other corporate
|
|
0
|
|
|
|
|
34,234
|
|
|
|
|
262
|
|
|
|
|
34,496
|
|
|
||||
Total fixed maturity securities
|
|
34,878
|
|
|
|
|
55,697
|
|
|
|
|
687
|
|
|
|
|
91,262
|
|
|
||||
Equity securities
|
|
642
|
|
|
|
|
80
|
|
|
|
|
80
|
|
|
|
|
802
|
|
|
||||
Other investments
|
|
628
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
628
|
|
|
||||
Cash and cash equivalents
|
|
4,896
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
4,896
|
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
0
|
|
|
|
|
72
|
|
|
|
|
169
|
|
|
|
|
241
|
|
|
||||
Foreign currency forwards
|
|
0
|
|
|
|
|
238
|
|
|
|
|
0
|
|
|
|
|
238
|
|
|
||||
Interest rate swaps
|
|
0
|
|
|
|
|
3
|
|
|
|
|
0
|
|
|
|
|
3
|
|
|
||||
Total other assets
|
|
0
|
|
|
|
|
313
|
|
|
|
|
169
|
|
|
|
|
482
|
|
|
||||
Total assets
|
|
$
|
41,044
|
|
|
|
|
$
|
56,090
|
|
|
|
|
$
|
936
|
|
|
|
|
$
|
98,070
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
$
|
0
|
|
|
|
|
$
|
78
|
|
|
|
|
$
|
126
|
|
|
|
|
$
|
204
|
|
|
Foreign currency forwards
|
|
0
|
|
|
|
|
377
|
|
|
|
|
0
|
|
|
|
|
377
|
|
|
||||
Foreign currency options
|
|
0
|
|
|
|
|
5
|
|
|
|
|
0
|
|
|
|
|
5
|
|
|
||||
Total liabilities
|
|
$
|
0
|
|
|
|
|
$
|
460
|
|
|
|
|
$
|
126
|
|
|
|
|
$
|
586
|
|
|
|
March 31, 2020
|
|||||||||||||||||||||||||||
(In millions)
|
Carrying
Value |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total
Fair Value |
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities held to maturity,
carried at amortized cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Government and agencies
|
|
$
|
22,384
|
|
|
|
$
|
27,842
|
|
|
|
|
$
|
352
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
28,194
|
|
|
Municipalities
|
|
362
|
|
|
|
0
|
|
|
|
|
484
|
|
|
|
|
0
|
|
|
|
|
484
|
|
|
|||||
Public utilities
|
|
45
|
|
|
|
0
|
|
|
|
|
59
|
|
|
|
|
0
|
|
|
|
|
59
|
|
|
|||||
Sovereign and
supranational |
|
464
|
|
|
|
0
|
|
|
|
|
578
|
|
|
|
|
0
|
|
|
|
|
578
|
|
|
|||||
Other corporate
|
|
23
|
|
|
|
0
|
|
|
|
|
32
|
|
|
|
|
0
|
|
|
|
|
32
|
|
|
|||||
Commercial mortgage and
other loans |
|
10,750
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
10,390
|
|
|
|
|
10,390
|
|
|
|||||
Other investments (1)
|
|
29
|
|
|
|
0
|
|
|
|
|
29
|
|
|
|
|
0
|
|
|
|
|
29
|
|
|
|||||
Total assets
|
|
$
|
34,057
|
|
|
|
$
|
27,842
|
|
|
|
|
$
|
1,534
|
|
|
|
|
$
|
10,390
|
|
|
|
|
$
|
39,766
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other policyholders’ funds
|
|
$
|
7,422
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
7,338
|
|
|
|
|
$
|
7,338
|
|
|
Notes payable
(excluding leases) |
|
6,597
|
|
|
|
0
|
|
|
|
|
6,607
|
|
|
|
|
274
|
|
|
|
|
6,881
|
|
|
|||||
Total liabilities
|
|
$
|
14,019
|
|
|
|
$
|
0
|
|
|
|
|
$
|
6,607
|
|
|
|
|
$
|
7,612
|
|
|
|
|
$
|
14,219
|
|
|
|
December 31, 2019
|
|||||||||||||||||||||||||||
(In millions)
|
Carrying
Value |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total
Fair Value |
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities held to maturity,
carried at amortized cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Government and agencies
|
|
$
|
22,241
|
|
|
|
$
|
27,937
|
|
|
|
|
$
|
354
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
28,291
|
|
|
Municipalities
|
|
821
|
|
|
|
0
|
|
|
|
|
1,083
|
|
|
|
|
0
|
|
|
|
|
1,083
|
|
|
|||||
Mortgage and asset-backed
securities |
|
16
|
|
|
|
0
|
|
|
|
|
7
|
|
|
|
|
10
|
|
|
|
|
17
|
|
|
|||||
Public utilities
|
|
2,535
|
|
|
|
0
|
|
|
|
|
2,954
|
|
|
|
|
0
|
|
|
|
|
2,954
|
|
|
|||||
Sovereign and
supranational |
|
1,123
|
|
|
|
0
|
|
|
|
|
1,320
|
|
|
|
|
0
|
|
|
|
|
1,320
|
|
|
|||||
Banks/financial institutions
|
|
916
|
|
|
|
0
|
|
|
|
|
1,018
|
|
|
|
|
0
|
|
|
|
|
1,018
|
|
|
|||||
Other corporate
|
|
2,433
|
|
|
|
0
|
|
|
|
|
2,911
|
|
|
|
|
0
|
|
|
|
|
2,911
|
|
|
|||||
Commercial mortgage and
other loans |
|
9,569
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
9,648
|
|
|
|
|
9,648
|
|
|
|||||
Other investments (1)
|
|
30
|
|
|
|
0
|
|
|
|
|
30
|
|
|
|
|
0
|
|
|
|
|
30
|
|
|
|||||
Total assets
|
|
$
|
39,684
|
|
|
|
$
|
27,937
|
|
|
|
|
$
|
9,677
|
|
|
|
|
$
|
9,658
|
|
|
|
|
$
|
47,272
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other policyholders’ funds
|
|
$
|
7,317
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
7,234
|
|
|
|
|
$
|
7,234
|
|
|
Notes payable
(excluding leases) |
|
6,408
|
|
|
|
0
|
|
|
|
|
6,663
|
|
|
|
|
272
|
|
|
|
|
6,935
|
|
|
|||||
Total liabilities
|
|
$
|
13,725
|
|
|
|
$
|
0
|
|
|
|
|
$
|
6,663
|
|
|
|
|
$
|
7,506
|
|
|
|
|
$
|
14,169
|
|
|
|
|
March 31, 2020
|
||||||||||||||||||||||
(In millions)
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
Fair Value |
||||||||||||||||
Securities available for sale, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
35,469
|
|
|
|
|
$
|
1,509
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
36,978
|
|
|
Total government and agencies
|
|
|
35,469
|
|
|
|
|
1,509
|
|
|
|
|
0
|
|
|
|
|
36,978
|
|
|
||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
2,440
|
|
|
|
|
0
|
|
|
|
|
2,440
|
|
|
||||
Total municipalities
|
|
|
0
|
|
|
|
|
2,440
|
|
|
|
|
0
|
|
|
|
|
2,440
|
|
|
||||
Mortgage- and asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
309
|
|
|
|
|
0
|
|
|
|
|
309
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
188
|
|
|
|
|
188
|
|
|
||||
Total mortgage- and asset-backed securities
|
|
|
0
|
|
|
|
|
309
|
|
|
|
|
188
|
|
|
|
|
497
|
|
|
||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
8,894
|
|
|
|
|
0
|
|
|
|
|
8,894
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
298
|
|
|
|
|
298
|
|
|
||||
Total public utilities
|
|
|
0
|
|
|
|
|
8,894
|
|
|
|
|
298
|
|
|
|
|
9,192
|
|
|
||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,609
|
|
|
|
|
0
|
|
|
|
|
1,609
|
|
|
||||
Total sovereign and supranational
|
|
|
0
|
|
|
|
|
1,609
|
|
|
|
|
0
|
|
|
|
|
1,609
|
|
|
||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
10,355
|
|
|
|
|
0
|
|
|
|
|
10,355
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
23
|
|
|
|
|
23
|
|
|
||||
Total banks/financial institutions
|
|
|
0
|
|
|
|
|
10,355
|
|
|
|
|
23
|
|
|
|
|
10,378
|
|
|
||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
34,949
|
|
|
|
|
0
|
|
|
|
|
34,949
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
245
|
|
|
|
|
245
|
|
|
||||
Total other corporate
|
|
|
0
|
|
|
|
|
34,949
|
|
|
|
|
245
|
|
|
|
|
35,194
|
|
|
||||
Total securities available for sale
|
|
|
$
|
35,469
|
|
|
|
|
$
|
60,065
|
|
|
|
|
$
|
754
|
|
|
|
|
$
|
96,288
|
|
|
Equity securities, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
509
|
|
|
|
|
$
|
69
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
578
|
|
|
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
82
|
|
|
|
|
82
|
|
|
||||
Total equity securities
|
|
|
$
|
509
|
|
|
|
|
$
|
69
|
|
|
|
|
$
|
82
|
|
|
|
|
$
|
660
|
|
|
|
|
March 31, 2020
|
||||||||||||||||||||||
(In millions)
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
Fair Value |
||||||||||||||||
Securities held to maturity, carried at amortized cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
27,842
|
|
|
|
|
$
|
352
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
28,194
|
|
|
Total government and agencies
|
|
|
27,842
|
|
|
|
|
352
|
|
|
|
|
0
|
|
|
|
|
28,194
|
|
|
||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
484
|
|
|
|
|
0
|
|
|
|
|
484
|
|
|
||||
Total municipalities
|
|
|
0
|
|
|
|
|
484
|
|
|
|
|
0
|
|
|
|
|
484
|
|
|
||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
59
|
|
|
|
|
0
|
|
|
|
|
59
|
|
|
||||
Total public utilities
|
|
|
0
|
|
|
|
|
59
|
|
|
|
|
0
|
|
|
|
|
59
|
|
|
||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
578
|
|
|
|
|
0
|
|
|
|
|
578
|
|
|
||||
Total sovereign and supranational
|
|
|
0
|
|
|
|
|
578
|
|
|
|
|
0
|
|
|
|
|
578
|
|
|
||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
32
|
|
|
|
|
0
|
|
|
|
|
32
|
|
|
||||
Total other corporate
|
|
|
0
|
|
|
|
|
32
|
|
|
|
|
0
|
|
|
|
|
32
|
|
|
||||
Total securities held to maturity
|
|
|
$
|
27,842
|
|
|
|
|
$
|
1,505
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
29,347
|
|
|
|
|
December 31, 2019
|
||||||||||||||||||||||
(In millions)
|
|
Quoted Prices in Active Markets
for Identical Assets (Level 1) |
|
Significant Observable
Inputs (Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
Fair Value |
||||||||||||||||
Securities available for sale, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
34,878
|
|
|
|
|
$
|
1,522
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
36,400
|
|
|
Total government and agencies
|
|
|
34,878
|
|
|
|
|
1,522
|
|
|
|
|
0
|
|
|
|
|
36,400
|
|
|
||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,847
|
|
|
|
|
0
|
|
|
|
|
1,847
|
|
|
||||
Total municipalities
|
|
|
0
|
|
|
|
|
1,847
|
|
|
|
|
0
|
|
|
|
|
1,847
|
|
|
||||
Mortgage- and asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
232
|
|
|
|
|
0
|
|
|
|
|
232
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
178
|
|
|
|
|
178
|
|
|
||||
Total mortgage- and asset-backed securities
|
|
|
0
|
|
|
|
|
232
|
|
|
|
|
178
|
|
|
|
|
410
|
|
|
||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
6,556
|
|
|
|
|
0
|
|
|
|
|
6,556
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
224
|
|
|
|
|
224
|
|
|
||||
Total public utilities
|
|
|
0
|
|
|
|
|
6,556
|
|
|
|
|
224
|
|
|
|
|
6,780
|
|
|
||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,042
|
|
|
|
|
0
|
|
|
|
|
1,042
|
|
|
||||
Total sovereign and supranational
|
|
|
0
|
|
|
|
|
1,042
|
|
|
|
|
0
|
|
|
|
|
1,042
|
|
|
||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
10,264
|
|
|
|
|
0
|
|
|
|
|
10,264
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
23
|
|
|
|
|
23
|
|
|
||||
Total banks/financial institutions
|
|
|
0
|
|
|
|
|
10,264
|
|
|
|
|
23
|
|
|
|
|
10,287
|
|
|
||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
34,234
|
|
|
|
|
0
|
|
|
|
|
34,234
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
262
|
|
|
|
|
262
|
|
|
||||
Total other corporate
|
|
|
0
|
|
|
|
|
34,234
|
|
|
|
|
262
|
|
|
|
|
34,496
|
|
|
||||
Total securities available for sale
|
|
|
$
|
34,878
|
|
|
|
|
$
|
55,697
|
|
|
|
|
$
|
687
|
|
|
|
|
$
|
91,262
|
|
|
Equity securities, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
642
|
|
|
|
|
$
|
80
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
722
|
|
|
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
80
|
|
|
|
|
80
|
|
|
||||
Total equity securities
|
|
|
$
|
642
|
|
|
|
|
$
|
80
|
|
|
|
|
$
|
80
|
|
|
|
|
$
|
802
|
|
|
|
|
December 31, 2019
|
||||||||||||||||||||||
(In millions)
|
|
Quoted Prices in Active Markets
for Identical Assets (Level 1) |
|
Significant Observable
Inputs (Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
Fair Value |
||||||||||||||||
Securities held to maturity, carried at amortized cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
27,937
|
|
|
|
|
$
|
354
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
28,291
|
|
|
Total government and agencies
|
|
|
27,937
|
|
|
|
|
354
|
|
|
|
|
0
|
|
|
|
|
28,291
|
|
|
||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,083
|
|
|
|
|
0
|
|
|
|
|
1,083
|
|
|
||||
Total municipalities
|
|
|
0
|
|
|
|
|
1,083
|
|
|
|
|
0
|
|
|
|
|
1,083
|
|
|
||||
Mortgage- and asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
7
|
|
|
|
|
0
|
|
|
|
|
7
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
||||
Total mortgage- and asset-backed securities
|
|
|
0
|
|
|
|
|
7
|
|
|
|
|
10
|
|
|
|
|
17
|
|
|
||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
2,954
|
|
|
|
|
0
|
|
|
|
|
2,954
|
|
|
||||
Total public utilities
|
|
|
0
|
|
|
|
|
2,954
|
|
|
|
|
0
|
|
|
|
|
2,954
|
|
|
||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,320
|
|
|
|
|
0
|
|
|
|
|
1,320
|
|
|
||||
Total sovereign and supranational
|
|
|
0
|
|
|
|
|
1,320
|
|
|
|
|
0
|
|
|
|
|
1,320
|
|
|
||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,018
|
|
|
|
|
0
|
|
|
|
|
1,018
|
|
|
||||
Total banks/financial institutions
|
|
|
0
|
|
|
|
|
1,018
|
|
|
|
|
0
|
|
|
|
|
1,018
|
|
|
||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
2,911
|
|
|
|
|
0
|
|
|
|
|
2,911
|
|
|
||||
Total other corporate
|
|
|
0
|
|
|
|
|
2,911
|
|
|
|
|
0
|
|
|
|
|
2,911
|
|
|
||||
Total securities held to maturity
|
|
|
$
|
27,937
|
|
|
|
|
$
|
9,647
|
|
|
|
|
$
|
10
|
|
|
|
|
$
|
37,594
|
|
|
|
|
Three Months Ended
March 31, 2020 |
||||||||||||||||||||||||||||||||
|
Fixed Maturity Securities
|
|
Equity
Securities |
|
Derivatives (1)
|
|
|
|
||||||||||||||||||||||||
(In millions)
|
Mortgage-
and Asset- Backed Securities |
|
Public
Utilities |
|
Banks/
Financial Institutions |
|
Other
Corporate |
|
|
|
Foreign
Currency Swaps |
|
Credit
Default Swaps |
|
Total
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
178
|
|
|
$
|
224
|
|
|
$
|
23
|
|
|
$
|
262
|
|
|
$
|
80
|
|
|
$
|
43
|
|
|
$
|
0
|
|
|
$
|
810
|
|
|
Net investment gains (losses) included
in earnings |
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(185
|
)
|
|
0
|
|
|
(185
|
)
|
|
||||||||
Unrealized gains (losses) included in other
comprehensive income (loss) |
1
|
|
|
(8
|
)
|
|
0
|
|
|
(17
|
)
|
|
0
|
|
|
(4
|
)
|
|
0
|
|
|
(28
|
)
|
|
||||||||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases
|
0
|
|
|
83
|
|
|
0
|
|
|
0
|
|
|
2
|
|
|
0
|
|
|
0
|
|
|
85
|
|
|
||||||||
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Sales
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Settlements
|
0
|
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
||||||||
Transfers into Level 3
|
9
|
|
(2)
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
9
|
|
|
||||||||
Transfers out of Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Balance, end of period
|
$
|
188
|
|
|
$
|
298
|
|
|
$
|
23
|
|
|
$
|
245
|
|
|
$
|
82
|
|
|
$
|
(146
|
)
|
|
$
|
0
|
|
|
$
|
690
|
|
|
Changes in unrealized gains (losses) relating
to Level 3 assets and liabilities still held at the end of the period included in earnings |
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(185
|
)
|
|
$
|
0
|
|
|
$
|
(185
|
)
|
|
Three Months Ended
March 31, 2019 |
||||||||||||||||||||||||||||||||
|
Fixed Maturity Securities
|
|
Equity
Securities |
|
Derivatives (1)
|
|
|
|
||||||||||||||||||||||||
(In millions)
|
Mortgage-
and Asset- Backed Securities |
|
Public
Utilities |
|
Banks/
Financial Institutions |
|
Other
Corporate |
|
|
|
Foreign
Currency Swaps |
|
Credit
Default Swaps |
|
Total
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
177
|
|
|
$
|
109
|
|
|
$
|
23
|
|
|
$
|
213
|
|
|
$
|
46
|
|
|
$
|
80
|
|
|
$
|
0
|
|
|
$
|
648
|
|
|
Net investment gains (losses) included
in earnings
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(8
|
)
|
|
0
|
|
|
(8
|
)
|
|
||||||||
Unrealized gains (losses) included in other
comprehensive income (loss)
|
1
|
|
|
1
|
|
|
0
|
|
|
1
|
|
|
0
|
|
|
(2
|
)
|
|
0
|
|
|
1
|
|
|
||||||||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases
|
0
|
|
|
0
|
|
|
0
|
|
|
63
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
63
|
|
|
||||||||
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Sales
|
0
|
|
|
0
|
|
|
0
|
|
|
(2
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(2
|
)
|
|
||||||||
Settlements
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Transfers into Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
25
|
|
(2)
|
0
|
|
|
0
|
|
|
0
|
|
|
25
|
|
|
||||||||
Transfers out of Level 3
|
0
|
|
|
(25
|
)
|
(2)
|
0
|
|
|
(16
|
)
|
(3)
|
0
|
|
|
0
|
|
|
0
|
|
|
(41
|
)
|
|
||||||||
Balance, end of period
|
$
|
178
|
|
|
$
|
85
|
|
|
$
|
23
|
|
|
$
|
284
|
|
|
$
|
46
|
|
|
$
|
70
|
|
|
$
|
0
|
|
|
$
|
686
|
|
|
Changes in unrealized gains (losses) relating
to Level 3 assets and liabilities still held at the end of the period included in earnings |
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(8
|
)
|
|
$
|
0
|
|
|
$
|
(8
|
)
|
|
March 31, 2020
|
|||||||||||||
(In millions)
|
|
Fair Value
|
|
Valuation Technique(s)
|
|
Unobservable Input
|
|
Range
(Weighted Average) |
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||
Securities available for sale, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Mortgage- and asset-backed securities
|
|
|
$
|
188
|
|
|
|
Consensus pricing
|
|
Offered quotes
|
|
N/A
|
(a)
|
Public utilities
|
|
|
298
|
|
|
|
Discounted cash flow
|
|
Credit spreads
|
|
N/A
|
(a)
|
|
Banks/financial institutions
|
|
|
23
|
|
|
|
Consensus pricing
|
|
Offered quotes
|
|
N/A
|
(a)
|
|
Other corporate
|
|
|
245
|
|
|
|
Discounted cash flow
|
|
Credit spreads
|
|
N/A
|
(a)
|
|
Equity securities
|
|
|
82
|
|
|
|
Net asset value
|
|
Offered quotes
|
|
N/A
|
(a)
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency swaps
|
|
|
15
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
.72% - .88%
|
(b)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.02% - .20%
|
(c)
|
||
|
|
|
|
|
|
|
|
CDS spreads
|
|
31 - 173 bps
|
|
||
|
|
|
74
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
.72% - .88%
|
(b)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.02% - .20%
|
(c)
|
||
Total assets
|
|
|
$
|
925
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency swaps
|
|
|
$
|
224
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
.72% - .88%
|
(b)
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.02% - .20%
|
(c)
|
||
|
|
|
|
|
|
|
|
CDS spreads
|
|
31 - 173 bps
|
|
||
|
|
|
11
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
.72% - .88%
|
(b)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.02% - .20%
|
(c)
|
||
Total liabilities
|
|
|
$
|
235
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|||||||||||||
(In millions)
|
|
Fair Value
|
|
Valuation Technique(s)
|
|
Unobservable Input
|
|
Range
(Weighted Average) |
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||
Securities available for sale, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Mortgage- and asset-backed securities
|
|
|
$
|
178
|
|
|
|
Consensus pricing
|
|
Offered quotes
|
|
N/A
|
(a)
|
Public utilities
|
|
|
224
|
|
|
|
Discounted cash flow
|
|
Credit spreads
|
|
N/A
|
(a)
|
|
Banks/financial institutions
|
|
|
23
|
|
|
|
Consensus pricing
|
|
Offered quotes
|
|
N/A
|
(a)
|
|
Other corporate
|
|
|
262
|
|
|
|
Discounted cash flow
|
|
Credit spreads
|
|
N/A
|
(a)
|
|
Equity securities
|
|
|
80
|
|
|
|
Net asset value
|
|
Offered quotes
|
|
N/A
|
(a)
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency swaps
|
|
|
106
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
1.89% - 2.09%
|
(b)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.12% - .43%
|
(c)
|
||
|
|
|
|
|
|
|
|
CDS spreads
|
|
10 - 100 bps
|
|
||
|
|
|
63
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
1.89% - 2.09%
|
(b)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.12% - .43%
|
(c)
|
||
Total assets
|
|
|
$
|
936
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency swaps
|
|
|
$
|
118
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
1.89% - 2.09%
|
(b)
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.12% - .43%
|
(c)
|
||
|
|
|
|
|
|
|
|
CDS spreads
|
|
13 - 159 bps
|
|
||
|
|
|
8
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
1.89% - 2.09%
|
(b)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.12% - .43%
|
(c)
|
||
Total liabilities
|
|
|
$
|
126
|
|
|
|
|
|
|
|
|
|
6.
|
POLICY LIABILITIES
|
|
|
Three Months Ended
March 31, |
|
||||||||
(In millions)
|
|
|
2020
|
|
2019
|
|
|
||||
Unpaid supplemental health claims, beginning of period
|
|
|
$
|
3,968
|
|
|
$
|
3,952
|
|
|
|
Less reinsurance recoverables
|
|
|
31
|
|
|
29
|
|
|
|
||
Net balance, beginning of period
|
|
|
3,937
|
|
|
3,923
|
|
|
|
||
Add claims incurred during the period related to:
|
|
|
|
|
|
|
|
||||
Current year
|
|
|
1,837
|
|
|
1,825
|
|
|
|
||
Prior years
|
|
|
(136
|
)
|
|
(167
|
)
|
|
|
||
Total incurred
|
|
|
1,701
|
|
|
1,658
|
|
|
|
||
Less claims paid during the period on claims incurred during:
|
|
|
|
|
|
|
|
||||
Current year
|
|
|
556
|
|
|
506
|
|
|
|
||
Prior years
|
|
|
1,144
|
|
|
1,137
|
|
|
|
||
Total paid
|
|
|
1,700
|
|
|
1,643
|
|
|
|
||
Effect of foreign exchange rate changes on unpaid claims
|
|
|
12
|
|
|
0
|
|
|
|
||
Net balance, end of period
|
|
|
3,950
|
|
|
3,938
|
|
|
|
||
Add reinsurance recoverables
|
|
|
33
|
|
|
29
|
|
|
|
||
Unpaid supplemental health claims, end of period
|
|
|
3,983
|
|
|
3,967
|
|
|
|
||
Unpaid life claims, end of period
|
|
|
710
|
|
|
658
|
|
|
|
||
Total liability for unpaid policy claims
|
|
|
$
|
4,693
|
|
|
$
|
4,625
|
|
|
|
7.
|
REINSURANCE
|
|
Three Months Ended
March 31, |
||||||||||
(In millions)
|
2020
|
|
2019
|
||||||||
Direct premium income
|
|
$
|
4,772
|
|
|
|
|
$
|
4,776
|
|
|
Ceded to other companies:
|
|
|
|
|
|
|
|
||||
Ceded Aflac Japan closed blocks
|
|
(116
|
)
|
|
|
|
(121
|
)
|
|
||
Other
|
|
(24
|
)
|
|
|
|
(15
|
)
|
|
||
Assumed from other companies:
|
|
|
|
|
|
|
|
||||
Retrocession activities
|
|
49
|
|
|
|
|
50
|
|
|
||
Other
|
|
0
|
|
|
|
|
1
|
|
|
||
Net premium income
|
|
$
|
4,681
|
|
|
|
|
$
|
4,691
|
|
|
|
|
|
|
|
|
|
|
||||
Direct benefits and claims
|
|
$
|
3,028
|
|
|
|
|
$
|
3,041
|
|
|
Ceded benefits and change in reserves for future benefits:
|
|
|
|
|
|
|
|
||||
Ceded Aflac Japan closed blocks
|
|
(105
|
)
|
|
|
|
(111
|
)
|
|
||
Eliminations
|
|
10
|
|
|
|
|
10
|
|
|
||
Other
|
|
(25
|
)
|
|
|
|
(11
|
)
|
|
||
Assumed from other companies:
|
|
|
|
|
|
|
|
||||
Retrocession activities
|
|
41
|
|
|
|
|
48
|
|
|
||
Eliminations
|
|
(10
|
)
|
|
|
|
(10
|
)
|
|
||
Other
|
|
0
|
|
|
|
|
0
|
|
|
||
Benefits and claims, net
|
|
$
|
2,939
|
|
|
|
|
$
|
2,967
|
|
|
8.
|
NOTES PAYABLE AND LEASE OBLIGATIONS
|
(In millions)
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
4.00% senior notes paid January 2020
|
|
$
|
0
|
|
|
|
|
$
|
348
|
|
|
3.625% senior notes due June 2023
|
|
698
|
|
|
|
|
698
|
|
|
||
3.625% senior notes due November 2024
|
|
747
|
|
|
|
|
747
|
|
|
||
3.25% senior notes due March 2025
|
|
448
|
|
|
|
|
448
|
|
|
||
2.875% senior notes due October 2026
|
|
298
|
|
|
|
|
298
|
|
|
||
6.90% senior notes due December 2039
|
|
220
|
|
|
|
|
220
|
|
|
||
6.45% senior notes due August 2040
|
|
254
|
|
|
|
|
254
|
|
|
||
4.00% senior notes due October 2046
|
|
393
|
|
|
|
|
394
|
|
|
||
4.750% senior notes due January 2049
|
|
541
|
|
|
|
|
541
|
|
|
||
Yen-denominated senior notes and subordinated debentures:
|
|
|
|
|
|
|
|
||||
.300% senior notes due September 2025 (principal amount ¥ 12.4 billion)
|
|
113
|
|
|
|
|
0
|
|
|
||
.932% senior notes due January 2027 (principal amount ¥60.0 billion)
|
|
549
|
|
|
|
|
545
|
|
|
||
.500% senior notes due December 2029 (principal amount ¥12.6 billion)
|
|
115
|
|
|
|
|
114
|
|
|
||
.550% senior notes due March 2030 (principal ¥ 13.3 billion)
|
|
121
|
|
|
|
|
0
|
|
|
||
1.159% senior notes due October 2030 (principal amount ¥29.3 billion)
|
|
268
|
|
|
|
|
266
|
|
|
||
.843% senior notes due December 2031 (principal amount ¥9.3 billion)
|
|
85
|
|
|
|
|
84
|
|
|
||
.750% senior notes due March 2032 (principal amount ¥20.7 billion)
|
|
189
|
|
|
|
|
0
|
|
|
||
1.488% senior notes due October 2033 (principal amount ¥15.2 billion)
|
|
139
|
|
|
|
|
138
|
|
|
||
.934% senior notes due December 2034 (principal amount ¥9.8 billion)
|
|
89
|
|
|
|
|
88
|
|
|
||
.830% senior notes due March 2035 (principal amount ¥10.6 billion)
|
|
97
|
|
|
|
|
0
|
|
|
||
1.750% senior notes due October 2038 (principal amount ¥8.9 billion)
|
|
81
|
|
|
|
|
81
|
|
|
||
1.122% senior notes due December 2039 (principal amount ¥6.3 billion)
|
|
57
|
|
|
|
|
57
|
|
|
||
2.108% subordinated debentures due October 2047 (principal amount ¥60.0 billion)
|
|
547
|
|
|
|
|
543
|
|
|
||
.963% subordinated bonds due April 2049 (principal amount ¥30.0 billion)
|
|
274
|
|
|
|
|
272
|
|
|
||
Yen-denominated loans:
|
|
|
|
|
|
|
|
||||
Variable interest rate loan due September 2026 (.42% in 2020 and 2019, principal amount ¥5.0 billion)
|
|
46
|
|
|
|
|
45
|
|
|
||
Variable interest rate loan due September 2029 (.57% in 2020 and 2019, principal amount ¥25.0 billion)
|
|
228
|
|
|
|
|
227
|
|
|
||
Finance lease obligations payable through 2026
|
|
12
|
|
|
|
|
12
|
|
|
||
Operating lease obligations payable through 2028
|
|
149
|
|
|
|
|
149
|
|
|
||
Total notes payable and lease obligations
|
|
$
|
6,758
|
|
|
|
|
$
|
6,569
|
|
|
|
|
Borrower(s)
|
Type
|
Term
|
Expiration Date
|
Capacity
|
Amount Outstanding
|
Interest Rate on Borrowed Amount
|
Maturity Period
|
Commitment Fee
|
Business Purpose
|
Aflac Incorporated
and Aflac |
uncommitted bilateral
|
364 days
|
December 18, 2020
|
$100 million
|
$0 million
|
The rate quoted by the bank and agreed upon at the time of borrowing
|
Up to 3 months
|
None
|
General corporate purposes
|
Aflac Incorporated
|
unsecured revolving
|
5 years
|
March 29,
2024, or the date commitments are terminated pursuant to an event of default
|
¥100.0 billion
|
¥0.0 billion
|
A rate per annum equal to (a) Tokyo interbank market rate (TIBOR) plus, the alternative applicable TIBOR margin during the availability period from the closing date to the commitment termination date or (b) the TIBOR rate offered by the agent to major banks in yen for the applicable period plus, the applicable alternative TIBOR margin during the term out period
|
No later than
March 29, 2024 |
.30% to .50%, depending on the Parent Company's debt ratings as of the date of determination
|
General corporate purposes, including a capital contingency plan for the operations of the Parent Company
|
Aflac Incorporated
and Aflac |
unsecured revolving
|
5 years
|
November 18, 2024, or the date commitments are terminated pursuant to an event of default
|
$1.0 billion
|
$0.0 billion
|
A rate per annum equal to, at the Company's option, either, (a) LIBOR adjusted for certain costs or (b) a base rate determined by reference to the highest of (1) the federal funds rate plus 1/2 of 1%, (2) the rate of interest for such day announced by Mizuho Bank, Ltd. as its prime rate, or (3) the eurocurrency rate for an interest period of one month plus 1.00%, in each case plus an applicable margin
|
No later than November 18, 2024
|
.085% to
.225%, depending on the Parent Company's debt ratings as of the date of determination
|
General corporate purposes, including a capital contingency plan for the operations of the Parent Company
|
Aflac Incorporated
and Aflac |
uncommitted bilateral
|
None specified
|
None specified
|
$50 million
|
$0 million
|
A rate per annum equal to, at the Parent Company's option, either (a) a eurocurrency rate determined by reference to the agent's LIBOR for the interest period relevant to such borrowing or (b) the base rate determined by reference to the greater of (i) the prime rate as determined by the agent, and (ii) the sum of 0.50% and the federal funds rate for such day
|
Up to 3 months
|
None
|
General corporate purposes
|
Aflac(1)
|
uncommitted revolving
|
364 days
|
November 30, 2020
|
$250 million
|
$82 million
|
USD three-month LIBOR plus 75 basis points per annum
|
3 months
|
None
|
General corporate purposes
|
Aflac Incorporated(1)
|
uncommitted revolving
|
364 days
|
April 2, 2020(2)
|
¥50.0 billion
|
¥0.0 billion
|
Three-month TIBOR plus 70 basis points per annum
|
3 months
|
None
|
General corporate purposes
|
Aflac Incorporated(1)
|
uncommitted revolving
|
364 days
|
November 25, 2020
|
¥50.0 billion
|
¥0.0 billion
|
Three-month TIBOR plus 70 basis points per annum
|
3 months
|
None
|
General corporate purposes
|
Aflac New York(1)
|
uncommitted revolving
|
364 days
|
March 20, 2021
|
$25 million
|
$0 million
|
USD three-month LIBOR plus 75 basis points per annum
|
3 months
|
None
|
General corporate purposes
|
CAIC(1)
|
uncommitted revolving
|
364 days
|
March 20, 2021
|
$15 million
|
$0 million
|
USD three-month LIBOR plus 75 basis points per annum
|
3 months
|
None
|
General corporate purposes
|
Tier One Insurance Company(1)
|
uncommitted revolving
|
364 days
|
March 20, 2021
|
$.3 million
|
$0 million
|
USD three-month LIBOR plus 75 basis points per annum
|
3 months
|
None
|
General corporate purposes
|
9.
|
INCOME TAXES
|
10.
|
SHAREHOLDERS’ EQUITY
|
(In thousands of shares)
|
2020
|
|
2019
|
||
Common stock - issued:
|
|
|
|
||
Balance, beginning of period
|
1,349,309
|
|
|
1,347,540
|
|
Exercise of stock options and issuance of restricted shares
|
1,341
|
|
|
1,060
|
|
Balance, end of period
|
1,350,650
|
|
|
1,348,600
|
|
Treasury stock:
|
|
|
|
||
Balance, beginning of period
|
622,516
|
|
|
592,254
|
|
Purchases of treasury stock:
|
|
|
|
||
Share repurchase program
|
9,984
|
|
|
10,237
|
|
Other
|
508
|
|
|
561
|
|
Dispositions of treasury stock:
|
|
|
|
||
Shares issued to AFL Stock Plan
|
(468
|
)
|
|
(430
|
)
|
Exercise of stock options
|
(45
|
)
|
|
(231
|
)
|
Other
|
(227
|
)
|
|
(278
|
)
|
Balance, end of period
|
632,268
|
|
|
602,113
|
|
Shares outstanding, end of period
|
718,382
|
|
|
746,487
|
|
|
Three Months Ended
March 31, |
||||||||
(In thousands)
|
2020
|
|
2019
|
||||||
Anti-dilutive share-based awards
|
|
744
|
|
|
|
|
22
|
|
|
|
|
Three Months Ended
March 31, 2020 |
|||||||||||||||||||||||||||||
(In millions)
|
Unrealized Foreign
Currency Translation Gains (Losses) |
|
Unrealized
Gains (Losses) on Investment Securities |
|
Unrealized
Gains (Losses) on Derivatives |
|
Pension
Liability Adjustment |
|
Total
|
||||||||||||||||||||
Balance at December 31, 2019
|
|
$
|
(1,623
|
)
|
|
|
|
$
|
8,548
|
|
|
|
|
$
|
(33
|
)
|
|
|
|
$
|
(277
|
)
|
|
|
|
$
|
6,615
|
|
|
Cumulative effect of change
in accounting principle - ASU 2019-04 |
|
0
|
|
|
|
|
848
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
848
|
|
|
|||||
Balance at January 1, 2020
|
|
$
|
(1,623
|
)
|
|
|
|
$
|
9,396
|
|
|
|
|
$
|
(33
|
)
|
|
|
|
$
|
(277
|
)
|
|
|
|
$
|
7,463
|
|
|
Other comprehensive
income (loss) before reclassification |
|
80
|
|
|
|
|
(3,359
|
)
|
|
|
|
(2
|
)
|
|
|
|
(6
|
)
|
|
|
|
(3,287
|
)
|
|
|||||
Amounts reclassified from
accumulated other comprehensive income (loss) |
|
0
|
|
|
|
|
6
|
|
|
|
|
0
|
|
|
|
|
6
|
|
|
|
|
12
|
|
|
|||||
Net current-period other
comprehensive income (loss) |
|
80
|
|
|
|
|
(3,353
|
)
|
|
|
|
(2
|
)
|
|
|
|
0
|
|
|
|
|
(3,275
|
)
|
|
|||||
Balance at March 31, 2020
|
|
$
|
(1,543
|
)
|
|
|
|
$
|
6,043
|
|
|
|
|
$
|
(35
|
)
|
|
|
|
$
|
(277
|
)
|
|
|
|
$
|
4,188
|
|
|
Three Months Ended
March 31, 2019 |
|||||||||||||||||||||||||||||
(In millions)
|
Unrealized Foreign
Currency Translation Gains (Losses) |
|
Unrealized
Gains (Losses) on Investment Securities |
|
Unrealized
Gains (Losses) on Derivatives |
|
Pension Liability Adjustment
|
|
Total
|
||||||||||||||||||||
Balance at December 31, 2018
|
|
$
|
(1,847
|
)
|
|
|
|
$
|
4,234
|
|
|
|
|
$
|
(24
|
)
|
|
|
|
$
|
(212
|
)
|
|
|
|
$
|
2,151
|
|
|
Other comprehensive
income (loss) before reclassification |
|
(1
|
)
|
|
|
|
2,340
|
|
|
|
|
(2
|
)
|
|
|
|
3
|
|
|
|
|
2,340
|
|
|
|||||
Amounts reclassified from
accumulated other comprehensive income (loss) |
|
0
|
|
|
|
|
(13
|
)
|
|
|
|
0
|
|
|
|
|
3
|
|
|
|
|
(10
|
)
|
|
|||||
Net current-period other
comprehensive income (loss) |
|
(1
|
)
|
|
|
|
2,327
|
|
|
|
|
(2
|
)
|
|
|
|
6
|
|
|
|
|
2,330
|
|
|
|||||
Balance at March 31, 2019
|
|
$
|
(1,848
|
)
|
|
|
|
$
|
6,561
|
|
|
|
|
$
|
(26
|
)
|
|
|
|
$
|
(206
|
)
|
|
|
|
$
|
4,481
|
|
|
|
|
(In millions)
|
Three Months Ended
March 31, 2020 |
|
||||
Details about Accumulated Other Comprehensive Income Components
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
Affected Line Item in the
Statements of Earnings |
||||
Unrealized gains (losses) on available-for-sale
securities |
|
$
|
(7
|
)
|
|
Net investment gains (losses)
|
|
|
1
|
|
|
Tax (expense) or benefit(1)
|
|
|
|
$
|
(6
|
)
|
|
Net of tax
|
Amortization of defined benefit pension items:
|
|
|
|
|
||
Actuarial gains (losses)
|
|
$
|
(8
|
)
|
|
Acquisition and operating expenses(2)
|
Prior service (cost) credit
|
|
0
|
|
|
Acquisition and operating expenses(2)
|
|
|
|
2
|
|
|
Tax (expense) or benefit(1)
|
|
|
|
$
|
(6
|
)
|
|
Net of tax
|
Total reclassifications for the period
|
|
$
|
(12
|
)
|
|
Net of tax
|
(In millions)
|
Three Months Ended
March 31, 2019 |
|
||||
Details about Accumulated Other Comprehensive Income Components
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
Affected Line Item in the
Statements of Earnings |
||||
Unrealized gains (losses) on available-for-sale
securities |
|
$
|
17
|
|
|
Net investment gains (losses)
|
|
|
(4
|
)
|
|
Tax (expense) or benefit(1)
|
|
|
|
$
|
13
|
|
|
Net of tax
|
Amortization of defined benefit pension items:
|
|
|
|
|
||
Actuarial gains (losses)
|
|
$
|
(4
|
)
|
|
Acquisition and operating expenses(2)
|
Prior service (cost) credit
|
|
0
|
|
|
Acquisition and operating expenses(2)
|
|
|
|
1
|
|
|
Tax (expense) or benefit(1)
|
|
|
|
$
|
(3
|
)
|
|
Net of tax
|
Total reclassifications for the period
|
|
$
|
10
|
|
|
Net of tax
|
|
Stock
Option Shares (in thousands) |
|
Weighted-Average
Remaining Term (in years) |
|
Aggregate
Intrinsic Value (in millions) |
|
Weighted-Average
Exercise Price Per Share |
|||||||||||||
Outstanding
|
|
3,354
|
|
|
|
|
4.4
|
|
|
|
$
|
16
|
|
|
|
|
$
|
29.98
|
|
|
Exercisable
|
|
3,353
|
|
|
|
|
4.4
|
|
|
|
16
|
|
|
|
|
29.97
|
|
|
(In thousands of shares)
|
|
Shares
|
|
Weighted-Average
Grant-Date Fair Value
Per Share
|
|||||
Restricted stock at December 31, 2019
|
|
2,573
|
|
|
|
$
|
44.66
|
|
|
Granted in 2020
|
|
1,376
|
|
|
|
46.66
|
|
|
|
Canceled in 2020
|
|
(25
|
)
|
|
|
46.52
|
|
|
|
Vested in 2020
|
|
(1,358
|
)
|
|
|
38.48
|
|
|
|
Restricted stock at March 31, 2020
|
|
2,566
|
|
|
|
$
|
48.97
|
|
|
12.
|
BENEFIT PLANS
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||||||||||||||
|
|
Pension Benefits
|
|
Other
|
||||||||||||||||||||||||||||||||
|
|
Japan
|
|
U.S.
|
|
Postretirement Benefits
|
||||||||||||||||||||||||||||||
(In millions)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||||||||||||
Components of net periodic
benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
|
|
$
|
6
|
|
|
|
|
$
|
5
|
|
|
|
|
$
|
7
|
|
|
|
|
$
|
6
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
Interest cost
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
8
|
|
|
|
|
9
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Expected return on plan
assets |
|
|
(2
|
)
|
|
|
|
(2
|
)
|
|
|
|
(9
|
)
|
|
|
|
(7
|
)
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Amortization of net actuarial
loss |
|
|
1
|
|
|
|
|
1
|
|
|
|
|
6
|
|
|
|
|
3
|
|
|
|
|
1
|
|
|
|
|
0
|
|
|
||||||
Net periodic (benefit) cost
|
|
|
$
|
6
|
|
|
|
|
$
|
5
|
|
|
|
|
$
|
12
|
|
|
|
|
$
|
11
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
0
|
|
|
13.
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
14.
|
SUBSEQUENT EVENTS
|
• expect
|
• anticipate
|
• believe
|
• goal
|
• objective
|
• may
|
• should
|
• estimate
|
• intends
|
• projects
|
• will
|
• assumes
|
• potential
|
• target
|
• outlook
|
•
|
the effects of COVID-19, and any resulting economic effects and government interventions, on the Company's business and financial results
|
•
|
ability to attract and retain qualified sales associates, brokers, employees, and distribution partners
|
•
|
events related to the ongoing Japan Post investigation and other matters
|
•
|
competitive environment and ability to anticipate and respond to market trends
|
•
|
deviations in actual experience from pricing and reserving assumptions
|
•
|
ability to continue to develop and implement improvements in information technology systems
|
•
|
defaults and credit downgrades of investments
|
•
|
exposure to significant interest rate risk
|
•
|
concentration of business in Japan
|
•
|
limited availability of acceptable yen-denominated investments
|
•
|
failure to comply with restrictions on policyholder privacy and information security
|
•
|
interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality or privacy of sensitive data residing on such systems
|
•
|
catastrophic events including, but not necessarily limited to, epidemics, pandemics (such as the coronavirus COVID-19), tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, terrorism or other acts of violence, and damage incidental to such events
|
•
|
difficult conditions in global capital markets and the economy
|
•
|
ability to protect the Aflac brand and the Company's reputation
|
•
|
extensive regulation and changes in law or regulation by governmental authorities
|
•
|
foreign currency fluctuations in the yen/dollar exchange rate
|
•
|
tax rates applicable to the Company may change
|
•
|
decline in creditworthiness of other financial institutions
|
•
|
significant valuation judgments in determination of amount of impairments taken on the Company's investments
|
•
|
U.S. tax audit risk related to conversion of the Japan branch to a subsidiary
|
•
|
subsidiaries' ability to pay dividends to the Parent Company
|
•
|
decreases in the Company's financial strength or debt ratings
|
•
|
inherent limitations to risk management policies and procedures
|
•
|
concentration of the Company's investments in any particular single-issuer or sector
|
•
|
differing judgments applied to investment valuations
|
•
|
ability to effectively manage key executive succession
|
•
|
changes in accounting standards
|
•
|
level and outcome of litigation
|
•
|
allegations or determinations of worker misclassification in the United States
|
•
|
Liquidity and Capital Resources
|
•
|
Investment Portfolio
|
•
|
Crisis Management
|
•
|
Aflac Japan initiatives
|
•
|
Aflac U.S. and Corporate and Other initiatives
|
•
|
Emergence of COVID-19 claims
|
•
|
Major government initiatives
|
•
|
Adjusted earnings are the profits derived from operations. The most comparable U.S. GAAP measure is net earnings. Adjusted earnings are adjusted revenues less benefits and adjusted expenses. The adjustments to both revenues and expenses account for certain items that cannot be predicted or that are outside management’s control. Adjusted revenues are U.S. GAAP total revenues excluding net investment gains and losses, except for amortized hedge costs/income related to foreign currency exposure management strategies and net interest cash flows from derivatives associated with certain investment strategies. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company's underlying business performance.
|
•
|
Adjusted earnings per share (basic or diluted) are adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The most comparable U.S. GAAP measure is net earnings per share.
|
•
|
Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency-derivatives to hedge certain foreign exchange risks in the Company's Japan segment or in the Corporate and Other segment. These amortized hedge costs/income are estimated at the inception of the derivatives based on the specific terms of each contract and are recognized on a straight line basis over the term of the hedge. There is no comparable U.S. GAAP financial measure for amortized hedge costs/income.
|
•
|
Adjusted earnings excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. The most comparable U.S. GAAP measure is net earnings.
|
•
|
Adjusted earnings per diluted share excluding current period foreign currency impact are adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding diluted shares for the period presented. The most comparable U.S. GAAP measure is net earnings per share.
|
•
|
U.S. dollar-denominated investment income excluding foreign currency impact is determined using the average foreign currency exchange rate for the comparable prior year period.
|
•
|
Adjusted book value is the U.S. GAAP book value (representing total shareholders' equity), less AOCI as recorded on the U.S. GAAP balance sheet. The Company considers adjusted book value important as it excludes AOCI, which fluctuates due to market movements that are outside management's control.
|
•
|
Adjusted return on equity (ROE) excluding foreign currency impact is calculated using adjusted earnings excluding current period foreign currency impact divided by average shareholders’ equity, excluding AOCI. The most comparable U.S. GAAP financial measure is return on average equity as determined using net earnings and average total shareholders’ equity.
|
|
In Millions
|
|
Per Diluted Share
|
|||||||||||||
|
Three Months Ended March 31,
|
|||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
||||||||
Net earnings
|
$
|
566
|
|
|
$
|
928
|
|
|
$
|
.78
|
|
|
$
|
1.23
|
|
|
Items impacting net earnings:
|
|
|
|
|
|
|
|
|
||||||||
Net investment (gains) losses (2),(3),(4),(5)
|
448
|
|
|
(103
|
)
|
|
.62
|
|
|
(.14
|
)
|
|
||||
Other and non-recurring (income) loss
|
15
|
|
|
0
|
|
|
.02
|
|
|
.00
|
|
|
||||
Income tax (benefit) expense on items excluded from adjusted earnings
|
(146
|
)
|
|
23
|
|
|
(.20
|
)
|
|
.03
|
|
|
||||
Adjusted earnings
|
882
|
|
|
849
|
|
|
1.21
|
|
|
1.12
|
|
|
||||
Current period foreign currency impact (6)
|
(9
|
)
|
|
N/A
|
|
|
(.01
|
)
|
|
N/A
|
|
|
||||
Adjusted earnings excluding current period foreign currency impact
|
$
|
873
|
|
|
$
|
849
|
|
|
$
|
1.20
|
|
|
$
|
1.12
|
|
|
•
|
foreign currency forwards and options on certain fixed maturity securities
|
•
|
foreign currency forwards and options that economically hedge certain portions of forecasted cash flows denominated in yen and hedge the Company's long-term exposure to a weakening yen
|
•
|
foreign currency swaps associated with certain senior notes and subordinated debentures
|
•
|
foreign currency swaps and credit defaults swaps held in consolidated variable interest entities (VIEs)
|
•
|
interest rate swaps used to economically hedge interest rate fluctuations in certain variable-rate investments
|
•
|
interest rate swaptions to hedge changes in the fair value associated with interest rate changes for certain dollar-denominated available-for-sale securities.
|
•
|
operating ratios
|
•
|
expense ratio
|
•
|
new annualized premium sales
|
•
|
new money yield
|
•
|
return on average invested assets
|
•
|
average weekly producer
|
|
Three Months Ended
March 31, |
|
||||||
(In millions)
|
2020
|
|
2019
|
|
||||
Net premium income
|
$
|
3,150
|
|
|
$
|
3,180
|
|
|
Net investment income: (1)
|
|
|
|
|
||||
Yen-denominated investment income
|
322
|
|
|
317
|
|
|
||
U.S. dollar-denominated investment income
|
375
|
|
|
355
|
|
|
||
Net investment income
|
697
|
|
|
672
|
|
|
||
Amortized hedge costs related to certain foreign currency exposure management strategies
|
55
|
|
|
62
|
|
|
||
Adjusted net investment income
|
642
|
|
|
610
|
|
|
||
Other income (loss)
|
11
|
|
|
12
|
|
|
||
Total adjusted revenues
|
3,803
|
|
|
3,802
|
|
|
||
Benefits and claims, net
|
2,186
|
|
|
2,199
|
|
|
||
Adjusted expenses:
|
|
|
|
|
||||
Amortization of deferred policy acquisition costs
|
173
|
|
|
182
|
|
|
||
Insurance commissions
|
185
|
|
|
182
|
|
|
||
Insurance and other expenses
|
404
|
|
|
405
|
|
|
||
Total adjusted expenses
|
762
|
|
|
769
|
|
|
||
Total benefits and adjusted expenses
|
2,948
|
|
|
2,968
|
|
|
||
Pretax adjusted earnings
|
$
|
855
|
|
|
$
|
834
|
|
|
Weighted-average yen/dollar exchange rate
|
108.84
|
|
|
110.24
|
|
|
|
In Dollars
|
|
In Yen
|
||||||||
Percentage change over
previous period:
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||
2020
|
|
2019
|
|
2020
|
|
2019
|
|||||
Net premium income
|
(.9
|
)%
|
|
(2.5
|
)%
|
|
(2.1
|
)%
|
|
(.8
|
)%
|
Adjusted net investment income
|
5.2
|
|
|
3.7
|
|
|
4.0
|
|
|
5.4
|
|
Total adjusted revenues
|
.0
|
|
|
(1.6
|
)
|
|
(1.1
|
)
|
|
.1
|
|
Pretax adjusted earnings
|
2.5
|
|
|
2.0
|
|
|
1.2
|
|
|
3.9
|
|
|
Including Foreign
Currency Changes |
|
|
Excluding Foreign
Currency Changes
|
|
||||||||
|
Three Months
|
|
Three Months
|
||||||||||
|
2020
|
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
Adjusted net investment income
|
4.0
|
|
%
|
|
5.4
|
%
|
|
4.8
|
|
|
|
4.2
|
%
|
Total adjusted revenues
|
(1.1
|
)
|
|
|
.1
|
|
|
(1.0
|
)
|
|
|
.0
|
|
Pretax adjusted earnings
|
1.2
|
|
|
|
3.9
|
|
|
1.7
|
|
|
|
3.1
|
|
|
Three Months Ended
March 31, |
|
|
|||
Ratios to total adjusted revenues:
|
2020
|
|
|
2019
|
|
|
Benefits and claims, net
|
57.5
|
%
|
|
57.8
|
%
|
|
Adjusted expenses:
|
|
|
|
|
|
|
Amortization of deferred policy acquisition costs
|
4.6
|
|
|
4.8
|
|
|
Insurance commissions
|
4.9
|
|
|
4.8
|
|
|
Insurance and other expenses
|
10.6
|
|
|
10.6
|
|
|
Total adjusted expenses
|
20.0
|
|
|
20.2
|
|
|
Pretax adjusted earnings
|
22.5
|
|
|
21.9
|
|
|
Ratios to total premiums:
|
|
|
|
|
|
|
Benefits and claims, net
|
69.4
|
%
|
|
69.1
|
%
|
|
Adjusted expenses:
|
|
|
|
|
|
|
Amortization of deferred policy acquisition costs
|
5.5
|
|
|
5.7
|
|
|
|
In Dollars
|
In Yen
|
||||||||||||||
|
Three Months
|
|
Three Months
|
|
||||||||||||
(In millions of dollars and billions of yen)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
||||||||
New annualized premium sales
|
$
|
129
|
|
|
$
|
171
|
|
|
¥
|
14.0
|
|
|
¥
|
18.8
|
|
|
Increase (decrease) over prior period
|
(24.5
|
)%
|
|
(4.0
|
)%
|
|
(25.4
|
)%
|
|
(2.0
|
)%
|
|
|
Three Months
|
|
|||||
|
2020
|
|
|
2019
|
|
||
Cancer
|
55.5
|
%
|
|
|
59.3
|
%
|
|
Medical
|
32.4
|
|
|
|
30.0
|
|
|
Income support
|
1.2
|
|
|
|
1.4
|
|
|
Ordinary life:
|
|
|
|
|
|
||
WAYS
|
.6
|
|
|
|
.5
|
|
|
Child endowment
|
.3
|
|
|
|
.3
|
|
|
Other ordinary life (1)
|
9.3
|
|
|
|
8.0
|
|
|
Other
|
.7
|
|
|
|
.5
|
|
|
Total
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
Three Months Ended March 31,
|
|
||||||
(In millions)
|
2020
|
|
2019
|
|
||||
Yen-denominated:
|
|
|
|
|
||||
Fixed maturity securities:
|
|
|
|
|
||||
Japan government and agencies
|
$
|
736
|
|
|
$
|
583
|
|
|
Private placements
|
90
|
|
|
424
|
|
|
||
Other fixed maturity securities
|
77
|
|
|
249
|
|
|
||
Equity securities
|
3
|
|
|
108
|
|
|
||
Total yen-denominated
|
$
|
906
|
|
|
$
|
1,364
|
|
|
|
|
|
|
|
||||
U.S. dollar-denominated:
|
|
|
|
|
||||
Fixed maturity securities:
|
|
|
|
|
||||
Other fixed maturity securities
|
$
|
527
|
|
|
$
|
668
|
|
|
Infrastructure debt
|
35
|
|
|
0
|
|
|
||
Equity securities
|
0
|
|
|
27
|
|
|
||
Commercial mortgage and other loans:
|
|
|
|
|
||||
Transitional real estate loans
|
368
|
|
|
323
|
|
|
||
Commercial mortgage loans
|
12
|
|
|
0
|
|
|
||
Middle market loans
|
1,187
|
|
|
376
|
|
|
||
Other investments
|
50
|
|
|
41
|
|
|
||
Total dollar-denominated
|
$
|
2,179
|
|
|
$
|
1,435
|
|
|
Total Aflac Japan purchases
|
$
|
3,085
|
|
|
$
|
2,799
|
|
|
|
Three Months
|
|
|||||||
|
2020
|
|
|
|
2019
|
|
|
||
Total purchases for the period (in millions) (1)
|
$
|
3,035
|
|
|
|
$
|
2,758
|
|
|
New money yield (1), (2)
|
4.06
|
|
%
|
|
3.29
|
|
%
|
||
Return on average invested assets (3)
|
2.35
|
|
|
|
2.32
|
|
|
||
Portfolio book yield, including U.S. dollar-denominated investments, end of period (1)
|
2.64
|
|
%
|
|
2.61
|
|
%
|
|
Three Months Ended
March 31, |
|
||||||
(In millions)
|
2020
|
|
2019
|
|
||||
Net premium income
|
$
|
1,483
|
|
|
$
|
1,461
|
|
|
Net investment income
|
177
|
|
|
177
|
|
|
||
Other income
|
27
|
|
|
2
|
|
|
||
Total adjusted revenues
|
1,687
|
|
|
1,640
|
|
|
||
Benefits and claims
|
713
|
|
|
721
|
|
|
||
Adjusted expenses:
|
|
|
|
|
||||
Amortization of deferred policy acquisition costs
|
160
|
|
|
159
|
|
|
||
Insurance commissions
|
151
|
|
|
149
|
|
|
||
Insurance and other expenses
|
337
|
|
|
288
|
|
|
||
Total adjusted expenses
|
648
|
|
|
596
|
|
|
||
Total benefits and adjusted expenses
|
1,361
|
|
|
1,317
|
|
|
||
Pretax adjusted earnings
|
$
|
326
|
|
|
$
|
323
|
|
|
Percentage change over previous period:
|
|
|
|
|
||||
Net premium income
|
1.5
|
|
%
|
2.4
|
|
%
|
||
Net investment income
|
.0
|
|
|
1.1
|
|
|
||
Total adjusted revenues
|
2.9
|
|
|
2.2
|
|
|
||
Pretax adjusted earnings
|
.9
|
|
|
(4.2
|
)
|
|
|
Three Months Ended
March 31, |
|
|||
Ratios to total adjusted revenues:
|
2020
|
|
|
2019
|
|
Benefits and claims
|
42.3
|
%
|
|
44.0
|
%
|
Adjusted expenses:
|
|
|
|
|
|
Amortization of deferred policy acquisition costs
|
9.5
|
|
|
9.7
|
|
Insurance commissions
|
9.0
|
|
|
9.0
|
|
Insurance and other expenses
|
20.0
|
|
|
17.6
|
|
Total adjusted expenses
|
38.4
|
|
|
36.3
|
|
Pretax adjusted earnings
|
19.3
|
|
|
19.7
|
|
Ratios to total premiums:
|
|
|
|
|
|
Benefits and claims
|
48.1
|
%
|
|
49.3
|
%
|
Adjusted expenses:
|
|
|
|
|
|
Amortization of deferred policy acquisition costs
|
10.8
|
|
|
10.9
|
|
|
Three Months
|
|
||||||||
(In millions)
|
2020
|
|
|
2019
|
|
|
|
|||
New annualized premium sales
|
$
|
323
|
|
|
|
$
|
340
|
|
|
|
Increase (decrease) over prior period
|
(5.2
|
)
|
%
|
|
1.5
|
|
%
|
|
|
Three Months Ended
March 31, |
|
||||||
(In millions)
|
2020
|
|
2019
|
|
||||
Fixed maturity securities:
|
|
|
|
|
||||
Other fixed maturity securities
|
$
|
182
|
|
|
$
|
594
|
|
|
Infrastructure debt
|
16
|
|
|
60
|
|
|
||
Equity securities
|
4
|
|
|
16
|
|
|
||
Commercial mortgage and other loans:
|
|
|
|
|
||||
Transitional real estate loans
|
38
|
|
|
48
|
|
|
||
Commercial mortgage loans
|
27
|
|
|
25
|
|
|
||
Middle market loans
|
38
|
|
|
29
|
|
|
||
Other investments
|
6
|
|
|
5
|
|
|
||
Total Aflac U.S. Purchases
|
$
|
311
|
|
|
$
|
777
|
|
|
|
Three Months
|
|
|||||||
|
2020
|
|
|
2019
|
|
||||
Total purchases for period (in millions) (1)
|
$
|
305
|
|
|
|
$
|
772
|
|
|
New money yield (1), (2)
|
3.73
|
|
%
|
|
4.48
|
|
%
|
||
Return on average invested assets (3)
|
5.01
|
|
|
|
5.08
|
|
|
||
Portfolio book yield, end of period (1)
|
5.34
|
|
%
|
|
5.49
|
|
%
|
|
Three Months Ended
March 31, |
|
||||||
(In millions)
|
2020
|
|
2019
|
|
||||
Premium income
|
$
|
49
|
|
|
$
|
50
|
|
|
Net investment income
|
24
|
|
|
22
|
|
|
||
Amortized hedge income related to certain foreign currency management strategies
|
29
|
|
|
20
|
|
|
||
Adjusted net investment income
|
53
|
|
|
42
|
|
|
||
Other income
|
2
|
|
|
3
|
|
|
||
Total adjusted revenues
|
104
|
|
|
95
|
|
|
||
Benefits and claims, net
|
40
|
|
|
47
|
|
|
||
Adjusted expenses:
|
|
|
|
|
||||
Interest expense
|
33
|
|
|
33
|
|
|
||
Other adjusted expenses
|
29
|
|
|
33
|
|
|
||
Total adjusted expenses
|
62
|
|
|
66
|
|
|
||
Total benefits and adjusted expenses
|
102
|
|
|
113
|
|
|
||
Pretax adjusted earnings
|
$
|
2
|
|
|
$
|
(18
|
)
|
|
|
March 31, 2020
|
||||||||||||||
(In millions)
|
Aflac Japan
|
|
Aflac U.S.
|
|
Corporate and Other
|
|
Total
|
||||||||
Available for sale, fixed maturity securities,
at fair value
|
$
|
81,238
|
|
|
$
|
13,258
|
|
|
$
|
1,792
|
|
|
$
|
96,288
|
|
Held to maturity, fixed maturity securities,
at amortized cost (1)
|
23,278
|
|
|
0
|
|
|
0
|
|
|
23,278
|
|
||||
Equity securities
|
523
|
|
|
57
|
|
|
80
|
|
|
660
|
|
||||
Commercial mortgage and other loans:
|
|
|
|
|
|
|
|
||||||||
Transitional real estate loans (1)
|
4,620
|
|
|
996
|
|
|
0
|
|
|
5,616
|
|
||||
Commercial mortgage loans (1)
|
1,307
|
|
|
422
|
|
|
0
|
|
|
1,729
|
|
||||
Middle market loans (1)
|
3,124
|
|
|
281
|
|
|
0
|
|
|
3,405
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
||||||||
Policy loans
|
237
|
|
|
16
|
|
|
0
|
|
|
253
|
|
||||
Short-term investments (2)
|
316
|
|
|
242
|
|
|
334
|
|
|
892
|
|
||||
Limited partnerships
|
552
|
|
|
61
|
|
|
56
|
|
|
669
|
|
||||
Other
|
0
|
|
|
29
|
|
|
0
|
|
|
29
|
|
||||
Total investments
|
115,195
|
|
|
15,362
|
|
|
2,262
|
|
|
132,819
|
|
||||
Cash and cash equivalents
|
1,480
|
|
|
347
|
|
|
2,321
|
|
|
4,148
|
|
||||
Total investments and cash
|
$
|
116,675
|
|
|
$
|
15,709
|
|
|
$
|
4,583
|
|
|
$
|
136,967
|
|
|
December 31, 2019
|
||||||||||||||
(In millions)
|
Aflac Japan
|
|
Aflac U.S.
|
|
Corporate and Other
|
|
Total
|
||||||||
Available for sale, fixed maturity securities,
at fair value
|
$
|
75,780
|
|
|
$
|
13,703
|
|
|
$
|
1,779
|
|
|
$
|
91,262
|
|
Held to maturity, fixed maturity securities,
at amortized cost
|
30,085
|
|
|
0
|
|
|
0
|
|
|
30,085
|
|
||||
Equity securities
|
657
|
|
|
67
|
|
|
78
|
|
|
802
|
|
||||
Commercial mortgage and other loans:
|
|
|
|
|
|
|
|
||||||||
Transitional real estate loans
|
4,507
|
|
|
943
|
|
|
0
|
|
|
5,450
|
|
||||
Commercial mortgage loans
|
1,308
|
|
|
399
|
|
|
0
|
|
|
1,707
|
|
||||
Middle market loans
|
2,141
|
|
|
271
|
|
|
0
|
|
|
2,412
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
||||||||
Policy loans
|
234
|
|
|
16
|
|
|
0
|
|
|
250
|
|
||||
Short-term investments (1)
|
386
|
|
|
242
|
|
|
1
|
|
|
629
|
|
||||
Limited partnerships
|
496
|
|
|
55
|
|
|
17
|
|
|
568
|
|
||||
Other
|
0
|
|
|
30
|
|
|
0
|
|
|
30
|
|
||||
Total investments
|
115,594
|
|
|
15,726
|
|
|
1,875
|
|
|
133,195
|
|
||||
Cash and cash equivalents
|
1,674
|
|
|
417
|
|
|
2,805
|
|
|
4,896
|
|
||||
Total investments and cash
|
$
|
117,268
|
|
|
$
|
16,143
|
|
|
$
|
4,680
|
|
|
$
|
138,091
|
|
|
|
March 31, 2020
|
|
|
|
December 31, 2019
|
|
||||||||||||
|
Amortized
Cost |
|
Fair
Value |
|
Amortized
Cost |
|
Fair
Value |
||||||||||||
AAA
|
|
1.1
|
%
|
|
|
|
1.1
|
%
|
|
|
|
1.1
|
%
|
|
|
|
1.0
|
%
|
|
AA
|
|
4.3
|
|
|
|
|
4.5
|
|
|
|
|
4.3
|
|
|
|
|
4.4
|
|
|
A
|
|
68.6
|
|
|
|
|
71.2
|
|
|
|
|
68.6
|
|
|
|
|
69.8
|
|
|
BBB
|
|
22.9
|
|
|
|
|
20.7
|
|
|
|
|
23.1
|
|
|
|
|
22.1
|
|
|
BB or lower
|
|
3.1
|
|
|
|
|
2.5
|
|
|
|
|
2.9
|
|
|
|
|
2.7
|
|
|
Total
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
(In millions)
|
Credit
Rating |
|
Amortized
Cost |
|
Fair
Value |
|
Unrealized
Loss |
||||||||||||||
Investcorp Capital Limited
|
|
BB
|
|
|
|
$
|
390
|
|
|
|
|
$
|
318
|
|
|
|
|
$
|
(72
|
)
|
|
PEMEX Project Funding Master Trust
|
|
BBB
|
|
|
|
276
|
|
|
|
|
216
|
|
|
|
|
(60
|
)
|
|
|||
AXA
|
|
BBB
|
|
|
|
298
|
|
|
|
|
240
|
|
|
|
|
(58
|
)
|
|
|||
Ovintiv Inc.
|
|
BBB
|
|
|
|
113
|
|
|
|
|
56
|
|
|
|
|
(57
|
)
|
|
|||
Apache Corporation
|
|
BBB
|
|
|
|
126
|
|
|
|
|
76
|
|
|
|
|
(50
|
)
|
|
|||
Commonwealth Bank of Australia
|
|
AA
|
|
|
|
193
|
|
|
|
|
146
|
|
|
|
|
(47
|
)
|
|
|||
Comision Federal de Electricidad
|
|
BBB
|
|
|
|
293
|
|
|
|
|
247
|
|
|
|
|
(46
|
)
|
|
|||
Autostrade Per Litalia Spa
|
|
BB
|
|
|
|
183
|
|
|
|
|
138
|
|
|
|
|
(45
|
)
|
|
|||
Banco de Chile
|
|
A
|
|
|
|
184
|
|
|
|
|
139
|
|
|
|
|
(45
|
)
|
|
|||
KLM Royal Dutch Airlines
|
|
BB
|
|
|
|
139
|
|
|
|
|
98
|
|
|
|
|
(41
|
)
|
|
|
March 31, 2020
|
|
||||||||||||||
(In millions)
|
Par
Value |
|
Amortized
Cost (1) |
|
Fair
Value |
|
Unrealized
Gain (Loss) |
|
||||||||
Investcorp Capital Limited
|
$
|
390
|
|
|
$
|
390
|
|
|
$
|
318
|
|
|
$
|
(72
|
)
|
|
Republic of South Africa
|
368
|
|
|
368
|
|
|
365
|
|
|
(3
|
)
|
|
||||
KLM Royal Dutch Airlines
|
184
|
|
|
139
|
|
|
98
|
|
|
(41
|
)
|
|
||||
Autostrade Per Litalia Spa
|
184
|
|
|
183
|
|
|
138
|
|
|
(45
|
)
|
|
||||
Telecom Italia SpA
|
184
|
|
|
184
|
|
|
214
|
|
|
30
|
|
|
||||
Barclays Bank PLC
|
184
|
|
|
117
|
|
|
134
|
|
|
17
|
|
|
||||
IKB Deutsche Industriebank AG
|
119
|
|
|
52
|
|
|
62
|
|
|
10
|
|
|
||||
Arconic Inc.
|
100
|
|
|
85
|
|
|
87
|
|
|
2
|
|
|
||||
EMC Corp.
|
80
|
|
|
81
|
|
|
76
|
|
|
(5
|
)
|
|
||||
Generalitat de Catalunya
|
73
|
|
|
27
|
|
|
77
|
|
|
50
|
|
|
||||
Other Issuers
|
704
|
|
|
742
|
|
|
534
|
|
|
(208
|
)
|
|
||||
Subtotal (2)
|
2,570
|
|
|
2,368
|
|
|
2,103
|
|
|
(265
|
)
|
|
||||
Senior secured bank loans
|
391
|
|
|
408
|
|
|
346
|
|
|
(62
|
)
|
|
||||
High yield corporate bonds
|
728
|
|
|
729
|
|
|
669
|
|
|
(60
|
)
|
|
||||
Middle market loans
|
3,527
|
|
|
3,405
|
|
|
3,304
|
|
|
(101
|
)
|
|
||||
Grand Total
|
$
|
7,216
|
|
|
$
|
6,910
|
|
|
$
|
6,422
|
|
|
$
|
(488
|
)
|
|
|
|
March 31, 2020
|
||||||||||||||||||||
(In millions)
|
|
Amortized Cost (1)
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
% of
Total |
|
|||||||||||
Government and agencies
|
|
$
|
54,587
|
|
|
$
|
10,599
|
|
|
$
|
(14
|
)
|
|
$
|
65,172
|
|
|
49.1
|
%
|
|
||
Municipalities
|
|
2,430
|
|
|
496
|
|
|
(2
|
)
|
|
2,924
|
|
|
2.2
|
|
|
||||||
Mortgage- and asset-backed securities
|
|
458
|
|
|
40
|
|
|
0
|
|
|
497
|
|
|
.4
|
|
|
||||||
Public utilities
|
|
8,301
|
|
|
1,093
|
|
|
(143
|
)
|
|
9,252
|
|
|
7.5
|
|
|
||||||
Electric
|
|
6,544
|
|
|
851
|
|
|
(107
|
)
|
|
7,289
|
|
|
5.9
|
|
|
||||||
Natural Gas
|
|
305
|
|
|
43
|
|
|
(14
|
)
|
|
334
|
|
|
.3
|
|
|
||||||
Other
|
|
699
|
|
|
98
|
|
|
(18
|
)
|
|
779
|
|
|
.6
|
|
|
||||||
Utility/Energy
|
|
753
|
|
|
101
|
|
|
(4
|
)
|
|
850
|
|
|
.7
|
|
|
||||||
Sovereign and Supranational
|
|
2,003
|
|
|
211
|
|
|
(27
|
)
|
|
2,187
|
|
|
1.8
|
|
|
||||||
Banks/financial institutions
|
|
10,007
|
|
|
949
|
|
|
(578
|
)
|
|
10,379
|
|
|
9.0
|
|
|
||||||
Banking
|
|
6,074
|
|
|
542
|
|
|
(333
|
)
|
|
6,284
|
|
|
5.5
|
|
|
||||||
Insurance
|
|
1,906
|
|
|
317
|
|
|
(100
|
)
|
|
2,123
|
|
|
1.7
|
|
|
||||||
Other
|
|
2,027
|
|
|
90
|
|
|
(145
|
)
|
|
1,972
|
|
|
1.8
|
|
|
||||||
Other corporate
|
|
33,310
|
|
|
3,292
|
|
|
(1,377
|
)
|
|
35,224
|
|
|
30.0
|
|
|
||||||
Basic Industry
|
|
3,371
|
|
|
340
|
|
|
(77
|
)
|
|
3,634
|
|
|
3.0
|
|
|
||||||
Capital Goods
|
|
3,307
|
|
|
268
|
|
|
(56
|
)
|
|
3,518
|
|
|
3.0
|
|
|
||||||
Communications
|
|
4,026
|
|
|
543
|
|
|
(87
|
)
|
|
4,482
|
|
|
3.6
|
|
|
||||||
Consumer Cyclical
|
|
3,322
|
|
|
266
|
|
|
(140
|
)
|
|
3,447
|
|
|
3.0
|
|
|
||||||
Consumer Non-Cyclical
|
|
6,527
|
|
|
746
|
|
|
(118
|
)
|
|
7,156
|
|
|
5.9
|
|
|
||||||
Energy
|
|
4,224
|
|
|
280
|
|
|
(601
|
)
|
|
3,903
|
|
|
3.8
|
|
|
||||||
Other
|
|
1,469
|
|
|
129
|
|
|
(62
|
)
|
|
1,536
|
|
|
1.3
|
|
|
||||||
Technology
|
|
3,195
|
|
|
219
|
|
|
(56
|
)
|
|
3,358
|
|
|
2.9
|
|
|
||||||
Transportation
|
|
3,869
|
|
|
501
|
|
|
(180
|
)
|
|
4,190
|
|
|
3.5
|
|
|
||||||
Total fixed maturity securities
|
|
$
|
111,096
|
|
|
$
|
16,680
|
|
|
$
|
(2,141
|
)
|
|
$
|
125,635
|
|
|
100.0
|
%
|
|
|
|
March 31, 2020
|
|
|
|
December 31, 2019
|
|
||||||||||||||||
(In millions)
|
Amortized
Cost (1) |
|
Fair
Value |
|
Amortized
Cost |
|
Fair
Value |
||||||||||||||||
Publicly issued securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities
|
|
$
|
91,082
|
|
|
|
|
$
|
104,690
|
|
|
|
|
$
|
89,625
|
|
|
|
|
$
|
105,557
|
|
|
Equity securities
|
|
572
|
|
|
|
|
572
|
|
|
|
|
717
|
|
|
|
|
717
|
|
|
||||
Total publicly issued
|
|
91,654
|
|
|
|
|
105,262
|
|
|
|
|
90,342
|
|
|
|
|
106,274
|
|
|
||||
Privately issued securities: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities (3)
|
|
20,014
|
|
|
|
|
20,945
|
|
|
|
|
19,831
|
|
|
|
|
23,299
|
|
|
||||
Equity securities
|
|
88
|
|
|
|
|
88
|
|
|
|
|
85
|
|
|
|
|
85
|
|
|
||||
Total privately issued
|
|
20,102
|
|
|
|
|
21,033
|
|
|
|
|
19,916
|
|
|
|
|
23,384
|
|
|
||||
Total investment securities
|
|
$
|
111,756
|
|
|
|
|
$
|
126,295
|
|
|
|
|
$
|
110,258
|
|
|
|
|
$
|
129,658
|
|
|
(Amortized cost, in millions)
|
March 31,
2020 |
|
December 31,
2019 |
||||||||
Privately issued reverse-dual currency securities
|
|
$
|
5,030
|
|
|
|
|
$
|
4,993
|
|
|
Publicly issued collateral structured as reverse-dual currency securities
|
|
1,689
|
|
|
|
|
1,678
|
|
|
||
Total reverse-dual currency securities
|
|
$
|
6,719
|
|
|
|
|
$
|
6,671
|
|
|
Reverse-dual currency securities as a percentage of total investment
securities |
|
6.0
|
%
|
|
|
|
6.1
|
%
|
|
•
|
A description of the Company's derivatives, hedging strategies and underlying risk exposure.
|
•
|
Information about the notional amount and fair market value of the Company's derivatives.
|
•
|
The unrealized and realized gains and losses impact on adjusted earnings of derivatives in cash flow, fair value, net investments in foreign operations, or non-qualifying hedging relationships.
|
•
|
Aflac Japan hedges U.S. dollar-denominated investments back to yen (see Aflac Japan’s U.S. Dollar-Denominated Hedge Program below).
|
•
|
Aflac Japan maintains certain unhedged U.S. dollar-denominated securities, which serve as an economic currency hedge of a portion of the Company's investment in Aflac Japan (see Aflac Japan’s U.S. Dollar-Denominated Hedge Program below).
|
•
|
The Parent Company designates yen-denominated liabilities (notes payable and loans) as non-derivative hedging instruments and designates certain foreign currency forwards and options as derivative hedges of the Company’s net investment in Aflac Japan (see Enterprise Corporate Hedging Program below).
|
•
|
The Parent Company enters into forward and option contracts to accomplish a dual objective of hedging foreign currency exchange rate risk related to dividend payments by its subsidiary, ALIJ, and reducing enterprise-wide hedge costs. (see Enterprise Corporate Hedging Program below).
|
|
March 31,
2020
|
|
December 31,
2019
|
|
||||||||||||
(In millions)
|
Amortized
Cost (1) |
|
Fair
Value |
|
Amortized
Cost |
|
Fair
Value |
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities (excluding bank loans)
|
$
|
18,297
|
|
|
$
|
19,048
|
|
|
$
|
18,012
|
|
|
$
|
19,542
|
|
|
Fixed maturity securities - bank loans (floating rate)
|
525
|
|
|
453
|
|
|
677
|
|
|
649
|
|
|
||||
Equity securities
|
17
|
|
|
17
|
|
|
19
|
|
|
19
|
|
|
||||
Commercial mortgage and other loans:
|
|
|
|
|
|
|
|
|
||||||||
Transitional real estate loans (floating rate)
|
4,620
|
|
|
4,444
|
|
|
4,507
|
|
|
4,543
|
|
|
||||
Commercial mortgage loans
|
1,307
|
|
|
1,264
|
|
|
1,308
|
|
|
1,319
|
|
|
||||
Middle market loans (floating rate)
|
3,124
|
|
|
3,029
|
|
|
2,141
|
|
|
2,153
|
|
|
||||
Other investments
|
552
|
|
|
552
|
|
|
496
|
|
|
496
|
|
|
||||
Total U.S. Dollar Program
|
28,442
|
|
|
28,807
|
|
|
27,160
|
|
|
28,721
|
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities - economically converted to yen
|
1,712
|
|
|
2,342
|
|
|
1,700
|
|
|
2,608
|
|
|
||||
Total U.S. dollar-denominated investments in Aflac Japan
|
$
|
30,154
|
|
|
$
|
31,149
|
|
|
$
|
28,860
|
|
|
$
|
31,329
|
|
|
|
Three Months
|
||
|
2020
|
|
2019
|
Aflac Japan:
|
|
|
|
FX forward (sell USD, buy yen) notional at end of period (in billions)(2)
|
$9.1
|
|
$8.6
|
Weighted average remaining tenor (in months)(3)
|
11.0
|
|
14.3
|
Amortized hedge income (cost) for period (in millions)
|
$(55)
|
|
$(62)
|
Parent Company:
|
|
|
|
FX forward (buy USD, sell yen) notional at end of period (in billions)(2)
|
$5.0
|
|
$2.6
|
Weighted average remaining tenor (in months)(3)
|
12.8
|
|
14.1
|
Amortized hedge income (cost) for period (in millions)
|
$29
|
|
$20
|
(In millions)
|
March 31, 2020
|
|
December 31, 2019
|
|
% Change
|
|||||||||||
Aflac Japan
|
|
$
|
6,639
|
|
|
|
|
$
|
6,584
|
|
|
|
|
.8
|
%
|
(1)
|
Aflac U.S.
|
|
3,525
|
|
|
|
|
3,544
|
|
|
|
|
(.5
|
)
|
|
||
Total
|
|
$
|
10,164
|
|
|
|
|
$
|
10,128
|
|
|
|
|
.4
|
%
|
|
(In millions)
|
March 31, 2020
|
|
December 31, 2019
|
|
% Change
|
|||||||||||
Aflac Japan
|
|
$
|
96,739
|
|
|
|
|
$
|
95,793
|
|
|
|
|
1.0
|
%
|
(1)
|
Aflac U.S.
|
|
11,357
|
|
|
|
|
11,295
|
|
|
|
|
.5
|
|
|
||
Other
|
|
235
|
|
|
|
|
223
|
|
|
|
|
5.4
|
|
|
||
Intercompany eliminations(2)
|
|
(779
|
)
|
|
|
|
(757
|
)
|
|
|
|
2.9
|
|
|
||
Total
|
|
$
|
107,552
|
|
|
|
|
$
|
106,554
|
|
|
|
|
.9
|
%
|
|
•
|
business investment and growth needs
|
•
|
strategic growth objectives
|
•
|
financial flexibility and obligations
|
•
|
capital support for hedging activity
|
•
|
a constantly evolving business and economic environment
|
•
|
a balanced approach to capital allocation and shareholder deployment.
|
(In millions)
|
2020
|
|
2019
|
|
||||
Dividends declared or paid by subsidiaries
|
$
|
501
|
|
|
$
|
356
|
|
|
Management fees paid by subsidiaries
|
35
|
|
|
45
|
|
|
(In millions of dollars and billions of yen)
|
2020
|
|
2019
|
|
||||
Aflac Japan management fees paid to Parent Company
|
$
|
22
|
|
|
$
|
32
|
|
|
Expenses allocated to Aflac Japan (in dollars)
|
0
|
|
|
2
|
|
|
||
Aflac Japan profit remittances to the Parent Company (in dollars)
|
351
|
|
|
256
|
|
|
||
Aflac Japan profit remittances to the Parent Company (in yen)
|
¥
|
38.9
|
|
|
¥
|
28.3
|
|
|
(In millions)
|
2020
|
|
2019
|
|
||||
Operating activities
|
$
|
1,414
|
|
|
$
|
1,544
|
|
|
Investing activities
|
(1,716
|
)
|
|
(1,291
|
)
|
|
||
Financing activities
|
(446
|
)
|
|
(686
|
)
|
|
||
Exchange effect on cash and cash equivalents
|
0
|
|
|
(12
|
)
|
|
||
Net change in cash and cash equivalents
|
$
|
(748
|
)
|
|
$
|
(445
|
)
|
|
(In millions of dollars and thousands of shares)
|
2020
|
|
2019
|
|
||||
Treasury stock purchases
|
$
|
449
|
|
|
$
|
490
|
|
|
Number of shares purchased:
|
|
|
|
|
||||
Share repurchase program
|
9,984
|
|
|
10,237
|
|
|
||
Other
|
508
|
|
|
561
|
|
|
||
Total shares purchased
|
10,492
|
|
|
10,798
|
|
|
(In millions of dollars and thousands of shares)
|
2020
|
|
2019
|
|
||||
Stock issued from treasury:
|
|
|
|
|
||||
Cash financing
|
$
|
9
|
|
|
$
|
12
|
|
|
Noncash financing
|
17
|
|
|
18
|
|
|
||
Total stock issued from treasury
|
$
|
26
|
|
|
$
|
30
|
|
|
Number of shares issued
|
740
|
|
|
939
|
|
|
(In millions)
|
2020
|
|
2019
|
|
||||
Dividends paid in cash
|
$
|
195
|
|
|
$
|
195
|
|
|
Dividends through issuance of treasury shares
|
7
|
|
|
8
|
|
|
||
Total dividends to shareholders
|
$
|
202
|
|
|
$
|
203
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total
Number of Shares Purchased |
|
Average
Price Paid Per Share |
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or Programs |
|
|||||
January 1 - January 31
|
3,906,085
|
|
|
$
|
52.61
|
|
|
3,906,085
|
|
|
33,147,528
|
|
|
February 1 - February 29
|
2,870,531
|
|
|
50.93
|
|
|
2,367,300
|
|
|
30,780,228
|
|
|
|
March 1 - March 31
|
3,715,439
|
|
|
33.46
|
|
|
3,710,430
|
|
|
27,069,798
|
|
|
|
Total
|
10,492,055
|
|
(1)
|
$
|
45.37
|
|
|
9,983,815
|
|
|
27,069,798
|
|
|
Item 6.
|
Exhibits
|
(a)
|
EXHIBIT INDEX
|
|||
|
-
|
|
Articles of Incorporation, as amended – incorporated by reference from Form 10-Q for June 30, 2008, Exhibit 3.0.
|
|
|
-
|
|
Bylaws of the Corporation, as amended and restated – incorporated by reference from Form 8-K dated April 6, 2020, Exhibit 3.1.
|
|
|
4.0
|
-
|
|
There are no instruments with respect to long-term debt not being registered in which the total amount of securities authorized exceeds 10% of the total assets of Aflac Incorporated and its subsidiaries on a consolidated basis. The Company agrees to furnish a copy of any long-term debt instrument to the Securities and Exchange Commission upon request.
|
|
-
|
|
Twenty-Third Supplemental Indenture, dated as of March 12, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 0.300% Senior Note due 2025) – incorporated by reference from Form 8-K dated March 12, 2020, Exhibit 4.1.
|
|
|
-
|
|
Twenty-Fourth Supplemental Indenture, dated as of March 12, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 0.550% Senior Note due 2030) – incorporated by reference from Form 8-K dated March 12, 2020, Exhibit 4.2.
|
|
|
-
|
|
Twenty-Fifth Supplemental Indenture, dated as of March 12, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 0.750% Senior Note due 2032) – incorporated by reference from Form 8-K dated March 12, 2020, Exhibit 4.3.
|
|
|
-
|
|
Twenty-Sixth Supplemental Indenture, dated as of March 12, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 0.830% Senior Note due 2035) – incorporated by reference from Form 8-K dated March 12, 2020, Exhibit 4.4.
|
|
|
-
|
|
Twenty-Seventh Supplemental Indenture, dated as of April 1, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 3.60% Senior Note due 2030) – incorporated by reference from Form 8-K dated April 1, 2020, Exhibit 4.1.
|
|
|
10.1*
|
-
|
|
Aflac Japan Officer Agreement with Masatoshi Koide, effective January 1, 2020.
|
|
-
|
|
Agency Services Agreement, dated March 1, 2008, by and between Japan Post Network Co., Ltd. and Aflac.
|
|
|
10.3**
|
-
|
|
Amendment Agreement to Agency Services Agreement, dated June 27, 2016, by and between Japan Post Co., Ltd. and Aflac.
|
|
-
|
|
Certification of CEO dated April 30, 2020, required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
|
|
|
-
|
|
Certification of CFO dated April 30, 2020, required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
|
|
|
-
|
|
Certification of CEO and CFO dated April 30, 2020, pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS
|
-
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
101.SCH
|
-
|
|
Inline XBRL Taxonomy Extension Schema.
|
|
101.CAL
|
-
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase.
|
|
101.DEF
|
-
|
|
Inline XBRL Taxonomy Extension Definition Linkbase.
|
|
101.LAB
|
-
|
|
Inline XBRL Taxonomy Extension Label Linkbase.
|
|
101.PRE
|
-
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase.
|
|
104
|
-
|
|
Cover Page Interactive Data File - formatted as Inline XBRL and contained in Exhibit 101.
|
*
|
Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 6 of this report
|
|||
**
|
Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10).
|
AFS
|
Available-for-Sale
|
AOCI
|
Accumulated Other Comprehensive Income
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
CARES
|
Coronavirus Aid, Relief, and Economic Security
|
CDSs
|
Credit Default Swaps
|
CMLs
|
Commercial Mortgage Loans
|
CSAs
|
Credit Support Annexes
|
DAC
|
Deferred Policy Acquisition Costs
|
DSCR
|
Debt Service Coverage Ratios
|
EPS
|
Earnings Per Share
|
FASB
|
Financial Accounting Standard Boards
|
FHLB
|
Federal Home Loan Bank of Atlanta
|
FSA
|
Japanese Financial Services Agency
|
HTM
|
Held-to-Maturity
|
ISDA
|
International Swaps and Derivatives Association, Inc.
|
ISOs
|
Incentive Stock Options
|
Japan Post Holdings
|
Japan Post Holdings Co., Ltd.
|
JGB
|
Japan Government Bond
|
LGD
|
Loss-Given-Default
|
LIBOR
|
London Interbank Offered Rate
|
LIPPC
|
Life Insurance Policyholder Protection Corporation
|
LTV
|
Loan-to-Value
|
MD&A
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
MMLs
|
Middle Market Loans
|
MOF
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Ministry of Finance
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NAIC
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National Association of Insurance Commissioners
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NOLHGA
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National Organization of Life and Health Guaranty Associations
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NQSOs
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Non-qualifying Stock Options
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NRSROs
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Nationally Recognized Statistical Rating Organizations
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OTC
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Over-the-Counter
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PCD Financial Assets
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Purchased Credit-Deteriorated Financial Assets
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PD
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Probability-of-Default
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PPP
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Paycheck Protection Program
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PRM
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Policy Reserve Matching
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RBC
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Risk-Based Capital
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S&P
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Standard & Poor's
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SEC
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Securities and Exchange Commission
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SMI
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Solvency Modernization Initiative
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SMR
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Solvency Margin Ratio
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The Plan
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Aflac Incorporated Long-Term Incentive Plan
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TIBOR
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Tokyo Interbank Market Rate
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TREs
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Transitional Real Estate Loans
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TTM
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Telegraphic Transfer Middle Rate
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U.S. GAAP
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U.S. Generally Accepted Accounting Principles
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VIEs
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Variable Interest Entities
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Aflac Incorporated
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April 30, 2020
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/s/ Max K. Broden
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(Max K. Broden)
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Executive Vice President;
Chief Financial Officer
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April 30, 2020
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/s/ June Howard
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(June Howard)
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Senior Vice President, Financial Services; Chief Accounting Officer
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Address:
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Shinjuku Mitsui Building, 2-1-1, Nishishinjuku, Shinjuku-ku,
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1.
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Aflac shall entrust to JPN the services specified in the following Items (hereinafter referred to “Agency Services”) and JPN shall be entrusted to perform such services.
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(1)
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Intermediary for conclusion of life insurance policies (hereinafter referred to as “Insurance Policies”) stipulated in Article 3 (hereinafter referred to as “Insurance Solicitations”);
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(2)
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Communication of requests associated with the Insurance Policies from insurance policyholders (hereinafter referred to as “Policyholders”), insureds, and beneficiaries of claims and benefits to Aflac and delivery of documents consequently delivered to or received from Aflac;
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(3)
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In addition to the preceding Items, maintain and manage Insurance Policies, including maintenance of Insurance Policies and provision of information to Policyholders; and
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(4)
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Other services separately entrusted by Aflac.
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2.
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JPN does not have the right to conclude Insurance Policies or receive declarations, money appropriated for first insurance premiums, or money appropriated for the second and subsequent insurance premiums. However, this shall not apply to the receipt of money appropriated for the first insurance premiums and the second and subsequent insurance premiums separately entrusted by Aflac.
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1.
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JPN shall create and submit to Aflac a list of the names and locations of offices where JPN performs Agency Services for Aflac (hereinafter referred to as “Office List”) in a format separately provided by Aflac.
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2.
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If any of the events set forth below occurs, JPN shall create and submit to Aflac without delay the Office List which reflects such changes.
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(1)
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JPN opens a new office where Aflac’s Agency Services are performed;
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(2)
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JPN decides not to perform Agency Services at any of the offices included in the Office List;
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(3)
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Any officer or employee of JPN registered pursuant to Article 6, Paragraph 2 in the Office List becomes absent due to change/deletion of registration, retirement, or personnel transfer, etc.;
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(4)
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The name or location of the office where Agency Services are performed is changed; or
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(5)
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Any officer or employee of JPN is newly registered pursuant to Article 6, Paragraph 2.
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1.
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The types of Insurance Policies of which Insurance Solicitation Aflac entrusts to JPN shall be determined upon consultation between JPN and Aflac. In such case, the types of such Insurance Policies shall be specified in the Agency Commissions Regulations separately provided by Aflac.
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2.
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Notwithstanding the provision set forth in the preceding Paragraph, the type of Insurance Policies that require separate sales qualifications shall be subject to the acquisition of such qualifications.
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3.
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In the case where the Insurance Solicitations by JPN significantly increase beyond Aflac’s risk management capacity, or the level of dependence on JPN for
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Article 4
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Self-policy Purchases
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1.
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JPN shall not handle Insurance Policies which it is the policyholder and other Insurance Policies for the purpose of receiving discounts, rebates, etc. of insurance premiums.
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2.
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JPN shall inform Aflac without delay when JPN solicits Insurance Policies which it is the policyholder and Aflac shall not pay commissions and other compensation related to the Insurance Solicitations of JPN. In addition, JPN shall return to Aflac without delay any payment that has already been made.
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1.
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JPN shall not solicit Insurance Policies for which Policyholders are companies which have personal or capital relationship, or any other close relationship in the context of the background to the establishment, etc. with JPN which meet the criteria set forth in the Insurance Business Law, etc. (hereinafter referred to as “Closely-related Companies”).
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2.
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JPN shall notify Aflac without delay when JPN solicits Insurance Policies for which Policyholders are Closely-related Companies, and Aflac shall not pay commissions related to the Insurance Solicitation of JPN or money of the same kind. JPN must return to Aflac without delay any payment that has already been made.
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3.
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JPN shall not solicit Insurance Policies for which Policyholders are officers or employees of JPN or officers or employees of Closely-related Companies. However, this shall not apply to types of Insurance Policies permitted by Aflac.
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4.
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Pursuant to the criteria separately provided by Aflac, JPN shall create a list of the names and the locations of Closely-related Companies and submit the photocopy to Aflac. JPN must also report any change to the list to Aflac without delay. In addition, JPN must responsibly keep the list in custody.
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Article 6
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Registration Obligations
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1.
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JPN must be registered as a life insurance solicitor as required by laws and regulations for performing the Agency Services.
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2.
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When JPN causes its officers or employees to engage in Insurance Solicitation, JPN must cause them to be registered as required by laws and regulations.
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3.
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For the registration set forth in the preceding two Paragraphs, the representative of JPN and the officers and employees of JPN who are engaged in the Insurance Solicitation are required to complete the prescribed training provided by Aflac and pass the General Course Examination provided by the Life Insurance Association of Japan.
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4.
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Notwithstanding the preceding Paragraph, in case the representative of JPN does not engage him/herself in the Insurance Solicitation, JPN may apply to Aflac for exemption of the General Course Examination for the representative of JPN.
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5.
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JPN shall submit without delay a prescribed notification for any change to the registration matters of JPN or registered officers or employees of JPN as required by laws and regulations.
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Article 7
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Allocation of Solicitors at each Office
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Article 8
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Entrustment to Life Insurers Other Than Aflac
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1.
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JPN may not be registered as a life insurance solicitor of life insurers other than Aflac (excluding the life insurer which has entered into a service agreement for the services related to solicitation of life insurance before entering into this Agreement. The same shall apply in this Article.) or perform the Agency Services for life insurers other than Aflac.
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2.
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JPN may not have its officers and employees to concurrently hold positions as officers or employees of life insurers other than Aflac, or employees thereof, register as life insurance solicitors of life insurers other than Aflac, or perform Agency Services for life insurers other than Aflac.
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3.
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The provisions set forth in the preceding two Paragraphs shall not apply to cases where JPN meets the requirements specified by laws and regulations. In addition, Aflac shall grant JPN permissions set forth in Article 28 of the Commercial Code.
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4.
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In the case of the preceding Paragraph, JPN must notify Aflac without delay when the Agency Agreements entered into with other life insurers are terminated.
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Article 9
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Allocation of Operations Managers and Education Managers
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1.
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JPN shall appoint from among the officers and employees of JPN one or more managers to appropriately manage the Agency Services of JPN and comply with other laws and regulations (hereinafter referred to as “Operations Managers”).
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2.
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In case JPN enters into Agency Agreements with several life insurers, JPN must allocate education managers in charge of educating life insurance solicitors.
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3.
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When allocating Operations Managers and education managers, requirements specified by laws and regulations shall be met.
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1.
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Aflac shall pay commissions for the Agency Services of JPN pursuant to the Agency Commissions Regulations separately provided by Aflac.
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2.
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With prior notification to JPN, Aflac shall revise the Agency Commissions Regulations upon consultation between JPN and Aflac.
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3.
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Aflac shall transfer the commissions set forth in Paragraph 1 to the account designated by JPN on the day specified in the Agency Commissions Regulations.
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4.
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In case this Agreement terminates due to expiration of the term or cancellation, Aflac shall not pay to JPN the commissions on and after the termination date.
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Article 11
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Expenses
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Article 13
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Preliminary Distribution of “Preliminary Policy Summaries/Policy Provisions,” etc.
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Article 14
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Handling of Money Appropriated for First Insurance Premium, etc.
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1.
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JPN and the officers and employees of JPN shall, when individually entrusted to receive money appropriated for the first insurance premiums pursuant to the provision set forth in Article 1 hereof, always use the prescribed receipts that Aflac has delivered to JPN.
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2.
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JPN and the officers and employees of JPN shall immediately transfer the money appropriated for the first insurance premiums they received pursuant to the preceding Paragraph to Aflac or to the account designated by Aflac.
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3.
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JPN and the officers and employees of JPN shall keep in custody the money appropriated for the first insurance premiums they received pursuant to Paragraph 1 clearly separating it from their own assets until they transfer it to Aflac or to the account designated by Aflac and may not misappropriate it for some other purposes.
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4.
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JPN and the officers and employees of JPN shall manage the prescribed receipts which Aflac has delivered with due care of a good manager and must immediately notify Aflac in case they are lost or stolen, or vanished by fire, etc.
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5.
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JPN and the officers and employees of JPN shall, when receiving the second and subsequent insurance premiums, individually entrusted by Aflac, apply the preceding Paragraphs by replacing the “money appropriated for the first insurance premiums” with the “second and subsequent insurance premiums.”
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Article 15
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Obligation to Store Documents, etc.
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1.
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When performing the Agency Services, JPN shall store the documents received from the applicants and Policyholders of Insurance Policies, and materials, etc. received from Aflac (hereinafter referred to as “Documents, etc.”) with due care of a good manager and, unless otherwise approved in advance by Aflac in writing, may not use them for purposes other than performing the Agency Services.
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2.
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In the event of the inspections by supervisory authorities, JPN shall disclose the Documents, etc. specified in the preceding Paragraph as needed.
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3.
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JPN shall disclose the Documents, etc. upon request from Aflac or those permitted by Aflac.
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Article 16
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Company Ownership of Goods for Business Use
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1.
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JPN and Aflac shall not use or leak to any third party information of the other party obtained in the course of performing the Agency Services (hereinafter referred to as “Confidential Information”) during the term of this Agreement for any purpose other than performing the Agency Services and operations related to Insurance Solicitation of JPN. However, the information that falls under any of the following shall be excluded from Confidential Information.
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(1)
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Information which JPN or Aflac discloses with the prior written consent of the other party;
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(2)
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Information which is already public at the time it was received from the other party, or information which has become public for reasons not attributable to either party;
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(3)
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Information which JPN or Aflac held before it was received from the other party;
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(4)
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Information which JPN or Aflac received from a third party without any confidentiality obligation; or
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(5)
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Information which JPN or Aflac obtained independently.
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2.
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Aflac shall not disclose customers’ information which Aflac has come to know through JPN’s performance of the Agency Services (hereinafter referred to as “Customer Information”) to any party other than the employees who are engaged in the operations related to the Insurance Solicitation of JPN. In particular, Aflac shall not disclose the Customer Information to any agency other than JPN. However, this shall not apply to information which falls under any of the following:
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(1)
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Information which Aflac discloses upon obtaining prior written consent from JPN;
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(2)
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Information which is already public at the time Aflac receives it from JPN, or information which has become public for reasons not attributable to Aflac;
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(3)
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Information which Aflac possessed before it was received from JPN;
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(4)
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Information which Aflac received from a third party without any confidentiality obligation;
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(5)
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Information which Aflac obtained independently;
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(6)
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Information of a customer from whom inquiry or request was made with regard to policy maintenance-related operations; or
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(7)
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Customer Information of a customer who has given his/her consent to the solicitation of life insurance products or other products using such Customer Information. (However, Aflac shall obtain JPN consent upon prior consultation when soliciting life insurance products and other financial products based on the Customer Information.)
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3.
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JPN and Aflac shall thoroughly educate and manage their officers and employees to ensure that they do not breach the preceding two Paragraphs.
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4.
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Notwithstanding Paragraph 1, JPN or Aflac shall immediately report to the other party when any compromise of Confidential Information is found and shall investigate and clarify the cause according to the instructions of the other party.
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5.
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JPN and Aflac shall return or destroy Confidential Information, excluding those agreed upon by the other party, according to the instructions of the other party upon termination of this Agreement due to expiration of the term or cancellation.
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1.
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The scope of the personal information (as defined in Article 2, Paragraph 1 of the Act on the Protection of Personal Information) of which handling is entrusted to JPN by Aflac (hereinafter referred to as “Personal Information”) shall be as follows:
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(1)
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Personal Information which customers provide to Aflac and which JPN acts as an intermediary when customers provide such Personal Information to Aflac for JPN to perform the Agency Services pursuant hereto;
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(2)
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Personal Information which JPN has acquired for providing it to Aflac for JPN to perform the Agency Services pursuant hereto; and
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(3)
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Personal Information which Aflac has provided to JPN as Personal Information necessary for JPN to perform the Agency Services pursuant hereto.
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2.
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JPN and the officers and employees of JPN shall retain the Personal Information entrusted by Aflac pursuant hereto with due care of a good manager and, unless otherwise agreed to by the customer in advance, may not use it for purposes other than performing the Agency Services, or compromise it to any third party.
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3.
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The provisions set forth in Paragraphs 4 and 5 of the preceding Article shall be applied mutatis mutandis to the handling of Personal Information.
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1.
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JPN shall take measures that are necessary for technological reasons and appropriate to prevent leak, loss or damage of Personal Information, and for other safety management of Personal Information, and shall take organizationally necessary and appropriate measures including establishment of regulations for the handling of Personal Information.
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2.
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JPN shall, when disclosing the Personal Information to its officers and employees, supervise appropriately and on an as needed basis including providing periodic training on the handling of Personal Information to such officers and employees.
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Article 20
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Prohibition of Insurance Premium Discounts/Rebates
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1.
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Any and all materials JPN and the officers and employees of JPN use for Insurance Solicitation or for facilitating Insurance Solicitation, including newspaper advertisements, printed materials, signage, Internet webpages, and e-mails (hereinafter referred to as “Solicitation Materials, etc.”) must be made by Aflac. However, this shall not apply to Solicitation Materials, etc. created by JPN or the officers or employees of JPN and agreed upon by Aflac.
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2.
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JPN must not divert documents, educational materials, etc. which Aflac has provided to JPN for the purpose of providing education and information to JPN, to Solicitation Materials, etc.
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Article 22
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Provision of Information to Policyholders, etc.
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1.
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Pursuant to the provisions of laws and regulations, JPN and the officers and employees of JPN shall not present or display comparison of details of an insurance policy with the details of other insurance policy, which may cause misunderstanding, to Policyholders, insureds, or unspecified persons.
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2.
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Pursuant to the provisions of laws and regulations, JPN must not make definitive statements on matters of which the amount of future dividends and other future amounts are uncertain or make presentation or indication which may cause misunderstanding such matters are certain to Policyholders, insureds, or unspecified persons.
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3.
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JPN must appropriately indicate matters that are required to be indicated by laws and regulations when providing multiple people with information on specific insurance policies stipulated in the Insurance Business Law utilizing broadcasting equipment, etc. of private broadcasters.
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1.
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JPN shall report the status of Agency Services upon request from Aflac or those to whom Aflac gives permission and JPN approves.
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2.
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JPN shall immediately inform the status to Aflac when it becomes aware of inappropriate acts of the officers or employees of JPN, including those breaching the Insurance Business Law.
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3.
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JPN shall, in case the term of this Agreement has expired or terminated due to cancellation, report the status of the Agency Services at the termination hereof to Aflac upon request from Aflac.
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4.
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JPN shall cooperate in internal audit on the Agency Services by Aflac or those who Aflac recognizes and JPN approves.
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1.
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JPN or the officers or employees of JPN shall not subcontract Insurance Solicitation to sales persons of Aflac or of life insurers other than Aflac or other agencies or officers or employees of other agencies.
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2.
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JPN or the officers or employees of JPN shall not subcontract Insurance Solicitation to insurance brokers or officers or employees of insurance brokers.
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3.
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JPN or the officers or employees of JPN shall not pay money to other individuals or corporations in relation to Insurance Policies to be or that have been completed regardless of the reason.
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Article 25
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Prohibition of Improper Promotion of Policy Replacement
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Article 26
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Provision of Education/Information
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1.
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Aflac shall provide education to JPN for the purpose of acquiring knowledge and techniques necessary for performing the Agency Services.
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2.
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JPN must cause registered officers and employees of JPN to complete the education that Aflac provides as set forth in the preceding Paragraph.
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3.
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Aflac shall provide JPN with information necessary for performing the Agency Services and JPN shall convey the information to the officers and employees of JPN.
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Article 29
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Prohibition of Unfair Use of Status
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Article 30
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Cancellation of Agreement
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1.
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JPN or Aflac may cancel this Agreement with one-month prior notification in writing. Any matter not stipulated herein, with the cancellation hereof, shall be determined upon consultation between JPN and Aflac.
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2.
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Notwithstanding the provisions set forth in the preceding Paragraph, Aflac may cancel this Agreement without warning in any of the following cases:
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(1)
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JPN fails to be registered within 6 months after the conclusion hereof;
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(2)
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Pursuant to the provisions of laws and regulations, JPN’s registration has been cancelled, ceases to be effective, or has been revoked; or
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(3)
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JPN is deemed to have committed an inappropriate act which may be an object of cancellation of registration pursuant to laws and regulations.
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3.
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JPN or Aflac may cancel this Agreement without any warning in case the other party falls under any of the following cases:
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(1)
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Notes and checks are dishonored and suspended by bank from being traded;
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(2)
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Public authority was exercised such as seizure, provisional seizure, provisional disposition, auction, compulsory execution, and disposition of delinquency;
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(3)
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A petition has been filed or a party has filed a petition itself for bankruptcy, civil rehabilitation proceedings, corporate reorganization proceedings, special liquidation, or the like; or
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(4)
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Other serious events occur which may make it difficult to continue this Agreement, such as serious damage to the relationship of trust between both parties.
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4.
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In the event this Agreement is terminated due to expiration of the term or cancellation, JPN must immediately return to Aflac all Aflac possessions that
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5.
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At the termination of this Agreement, JPN and Aflac must promptly perform in good faith any existing obligations that arose during the term hereof.
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6.
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In case there are acts which conform to the Items of Paragraph 2 that do not result in the cancellation of this Agreement but are inappropriate with regard to Insurance Solicitation or may damage the benefits of Policyholders, Aflac may request JPN to submit reports or take other reasonable measures as deemed necessary.
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Article 31
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Duty of Care of Prudent Manager/Legal Compliance
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1.
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JPN shall perform the Agency Services with due care of a good manager pursuant hereto and comply with laws concerning Insurance Solicitation and regulations which Aflac provided for performing the Agency Services.
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2.
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JPN and officers and employees of JPN shall not conduct any of the following acts against the Policyholders or insureds of Aflac or life insurers other than Aflac:
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(1)
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Make false statements or not inform material matters among the provisions of Insurance Policies;
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(2)
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Encourage Aflac or life insurers other than Aflac to make false statements on material matters;
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(3)
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Hinder Aflac or life insurers other than Aflac informing, or encourage Aflac or life insurers other than Aflac not to inform material matters;
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(4)
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Cause Policyholders or insureds to apply for Insurance Policies knowing that a company related to Aflac provides or promises to provide special benefits; or
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(5)
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Acts that may result in insufficient protection of Policyholders or insureds of Aflac or life insurers other than Aflac.
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1.
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In case either JPN or Aflac causes damages to the other party, it must compensate for such damages.
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2.
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JPN and Aflac shall not be released from obligation for compensation set forth in the preceding Paragraph even after this Agreement is terminated.
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Article 33
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Jurisdiction
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Article 34
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Amendment to Agreement
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Article 35
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Term of Agreement
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Article 36
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Place to Perform the Obligations
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1.
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The places where JPN performs its obligations hereunder shall be the locations of the main locations of Aflac in Japan or the places designated by Aflac and approved by JPN.
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2.
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The places where Aflac performs its obligations shall be the locations of the offices of JPN designated by JPN and approved by Aflac.
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Article 38
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Matters Not Stipulated Herein
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Before Amendment
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After Amendment
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The types of Insurance Policies of which Insurance Solicitation Aflac entrusts to JPN shall be determined upon consultation between JPN and Aflac. In such case, the types of such Insurance Policies shall be specified in the Agency Commissions Regulations separately provided by Aflac.
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The types of Insurance Policies of which Insurance Solicitation Aflac entrusts to JPC shall be the Handled Products as set forth in the Comprehensive Business Alliance Agreement dated July 26, 2013 between Japan Post Holdings Co., Ltd. (hereinafter referred to as “JPH”) and Aflac (as amended by “Amendment Agreement to the Comprehensive Business Alliance Agreement” dated September 5, 2014 between JPH and Aflac; hereinafter referred to as “the Alliance Agreement”). In such case, the types of such Insurance Policies shall be specified in the Agency Commissions Regulations separately provided by Aflac.
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Before Amendment
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After Amendment
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4. In case this Agreement terminates due to expiration of the term or cancellation, Aflac shall not pay to JPN the commissions on and after the termination date.
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4. In case this Agreement terminates, Aflac shall not pay to JPC the commissions on and after the termination date.
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Before Amendment
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After Amendment
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JPN and Aflac shall return or destroy Confidential Information, excluding those agreed upon by the other party, according to the instructions of the other party upon termination of this Agreement due to expiration of the term or cancellation.
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JPC and Aflac shall return or destroy Confidential Information, excluding those agreed upon by the other party, according to the instructions of the other party upon termination of this Agreement.
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Before Amendment
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After Amendment
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JPN shall, in case the term of this Agreement has expired or terminated due to cancellation, report the status of the Agency Services at the termination hereof to Aflac upon request from Aflac.
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JPC shall, in case this Agreement has terminated, report the status of the Agency Services at the termination hereof to Aflac upon request from Aflac.
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Before Amendment
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After Amendment
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Article 30 Cancellation of Agreement
1. JPN or Aflac may cancel this Agreement with one-month prior notification in writing. Any matter not stipulated herein, with the cancellation hereof, shall be determined upon consultation between JPN and Aflac.
2. Notwithstanding the provisions set forth in the preceding Paragraph, Aflac may cancel this Agreement without warning in any of the following cases:
(1) JPN fails to be registered within 6 months after the conclusion hereof;
(2) Pursuant to the provisions of laws and regulations, JPN’s registration has been cancelled, ceases to be effective, or has been revoked; or
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Article 30 Termination of Agreement
1. This Agreement shall automatically terminate on the date the Alliance Agreement terminates pursuant to Article 18, Paragraph 1 of the Alliance Agreement, and shall not terminate under any other circumstances.
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to submit reports or take other reasonable measures as deemed necessary.
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5. Even if this Agreement terminates, the following provisions shall remain in effect.
Article 17 (Confidentiality), Article 18 (Handling of Personal Information), Article 23 (Report on the Status of Agency Services) Paragraph 3, Article 32 (Obligation for Compensation of Losses), Article 33 (Jurisdiction), Article 37 (Governing Law), and Article 39 (the Alliance Agreement)
6. Effects of termination of this Agreement shall, in addition to this Article, comply with the provisions of the Alliance Agreement.
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Before Amendment
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After Amendment
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Article 35 Term of Agreement
The term of this Agreement shall be one year from the date the Agreement was concluded, and unless there is any objection from either JPN or Aflac one month prior to the expiration date, the term of this Agreement shall be extended for another year. The same shall apply thereafter.
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Article 35
(Deleted)
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Before Amendment
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After Amendment
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(Newly established)
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Article 39 (the Alliance Agreement)
1. JPC shall affirm and comply with the following provisions of the Alliance Agreement. Further, Aflac shall commit to the corresponding provisions vis-à-vis JPC. To stipulate for avoidance of doubt, under this Article JPC and Aflac shall have
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their respective rights vis-à-vis the other party as set forth in the corresponding provisions of the Alliance Agreement and shall bear their own duties to the other party as set forth in the provisions of the Alliance Agreement.
(1) Provisions setting forth rights or responsibilities for which JPC is the assignee, or provisions setting forth items pertaining to JPC’s actions (this applies to Alliance Agreement Article 2, Article 4 Paragraphs 2 and 4, Articles 5 through 10, and Article14 through 16).
(2) Provisions setting forth items pertaining to this Agreement (this applies to the Alliance Agreement Articles 18 and 20).
2. Pertaining to the rights, etc. that JPC or Aflac possesses vis-à-vis the other party, JPC and Aflac hereby agree per these provisions to the following additional provisions.
[***]
For the period until the Alliance Agreement terminates, details of initiatives to meet the Sales Targets set forth in Article 10 of the Alliance Agreement shall be determined by good faith consultation among JPH, JPC, JPI, and Aflac by the beginning of each fiscal year. Unless JPH, JPC, JPI, and Aflac agree to different handling, four copies of minutes shall be prepared regarding the determined items, and JPH, JPC, JPI, and Aflac shall each store a copy.
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1)
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Information that is commonly known or has become known due to causes other than disclosure by the Receiving Party.
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2)
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Information that the Receiving Party had received prior to provision by the Disclosing Party.
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1.
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I have reviewed this quarterly report on Form 10-Q of Aflac Incorporated;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
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Date:
|
April 30, 2020
|
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/s/ Daniel P. Amos
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|
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|
Daniel P. Amos
|
|
|
|
Chairman and Chief Executive Officer
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1.
|
I have reviewed this quarterly report on Form 10-Q of Aflac Incorporated;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
Date:
|
April 30, 2020
|
|
/s/ Max K. Broden
|
|
|
|
Max K. Broden
|
|
|
|
Executive Vice President, Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Daniel P. Amos
|
||
Name:
|
|
Daniel P. Amos
|
Title:
|
|
Chief Executive Officer
|
Date:
|
|
April 30, 2020
|
/s/ Max K. Broden
|
||
Name:
|
|
Max K. Broden
|
Title:
|
|
Chief Financial Officer
|
Date:
|
|
April 30, 2020
|