|
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
36-6169860
(I.R.S. Employer
Identification No.)
|
333 S. Wabash
Chicago, Illinois
(Address of principal executive offices)
|
|
60604
(Zip Code)
|
Large accelerated filer [x]
|
|
Accelerated filer [ ]
|
|
Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
|
|
Smaller reporting company [ ]
|
Class
|
|
Outstanding at July 31, 2015
|
Common Stock, Par value $2.50
|
|
270,260,295
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Item Number
|
|
Page
Number
|
|
PART I. Financial Information
|
|
1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
2.
|
||
3.
|
||
4.
|
||
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PART II. Other Information
|
|
1.
|
||
6.
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions, except per share data)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
$
|
1,735
|
|
|
$
|
1,811
|
|
|
$
|
3,422
|
|
|
$
|
3,617
|
|
Net investment income
|
500
|
|
|
550
|
|
|
1,058
|
|
|
1,076
|
|
||||
Net realized investment gains (losses):
|
|
|
|
|
|
|
|
||||||||
Other-than-temporary impairment losses
|
(31
|
)
|
|
(5
|
)
|
|
(43
|
)
|
|
(7
|
)
|
||||
Portion of other-than-temporary impairments recognized in Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net other-than-temporary impairment losses recognized in earnings
|
(31
|
)
|
|
(5
|
)
|
|
(43
|
)
|
|
(7
|
)
|
||||
Other net realized investment gains (losses)
|
31
|
|
|
(9
|
)
|
|
53
|
|
|
39
|
|
||||
Net realized investment gains (losses)
|
—
|
|
|
(14
|
)
|
|
10
|
|
|
32
|
|
||||
Other revenues
|
92
|
|
|
93
|
|
|
189
|
|
|
178
|
|
||||
Total revenues
|
2,327
|
|
|
2,440
|
|
|
4,679
|
|
|
4,903
|
|
||||
Claims, Benefits and Expenses
|
|
|
|
|
|
|
|
||||||||
Insurance claims and policyholders’ benefits
|
1,469
|
|
|
1,441
|
|
|
2,808
|
|
|
2,887
|
|
||||
Amortization of deferred acquisition costs
|
314
|
|
|
335
|
|
|
617
|
|
|
664
|
|
||||
Other operating expenses
|
341
|
|
|
254
|
|
|
699
|
|
|
600
|
|
||||
Interest
|
39
|
|
|
46
|
|
|
78
|
|
|
90
|
|
||||
Total claims, benefits and expenses
|
2,163
|
|
|
2,076
|
|
|
4,202
|
|
|
4,241
|
|
||||
Income from continuing operations before income tax
|
164
|
|
|
364
|
|
|
477
|
|
|
662
|
|
||||
Income tax expense
|
(26
|
)
|
|
(103
|
)
|
|
(106
|
)
|
|
(181
|
)
|
||||
Income from continuing operations
|
138
|
|
|
261
|
|
|
371
|
|
|
481
|
|
||||
Income (loss) from discontinued operations, net of income tax (expense) benefit of $-, $(1), $- and $37
|
—
|
|
|
6
|
|
|
—
|
|
|
(201
|
)
|
||||
Net income
|
$
|
138
|
|
|
$
|
267
|
|
|
$
|
371
|
|
|
$
|
280
|
|
|
|
|
|
|
|
|
|
||||||||
Basic Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.51
|
|
|
$
|
0.97
|
|
|
$
|
1.37
|
|
|
$
|
1.78
|
|
Income (loss) from discontinued operations
|
—
|
|
|
0.02
|
|
|
—
|
|
|
(0.74
|
)
|
||||
Basic earnings per share
|
$
|
0.51
|
|
|
$
|
0.99
|
|
|
$
|
1.37
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.51
|
|
|
$
|
0.97
|
|
|
$
|
1.37
|
|
|
$
|
1.78
|
|
Income (loss) from discontinued operations
|
—
|
|
|
0.01
|
|
|
—
|
|
|
(0.75
|
)
|
||||
Diluted earnings per share
|
$
|
0.51
|
|
|
$
|
0.98
|
|
|
$
|
1.37
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends per share
|
$
|
0.25
|
|
|
$
|
0.25
|
|
|
$
|
2.50
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Outstanding Common Stock and Common Stock Equivalents
|
|
|
|
|
|
|
|
||||||||
Basic
|
270.3
|
|
|
269.9
|
|
|
270.2
|
|
|
269.9
|
|
||||
Diluted
|
270.7
|
|
|
270.6
|
|
|
270.7
|
|
|
270.5
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Other Comprehensive Income (Loss), Net of Tax
|
|
|
|
|
|
|
|
||||||||
Changes in:
|
|
|
|
|
|
|
|
||||||||
Net unrealized gains on investments with other-than-temporary impairments
|
$
|
(4
|
)
|
|
$
|
2
|
|
|
$
|
(5
|
)
|
|
$
|
14
|
|
Net unrealized gains on other investments
|
(365
|
)
|
|
270
|
|
|
(253
|
)
|
|
507
|
|
||||
Net unrealized gains on investments
|
(369
|
)
|
|
272
|
|
|
(258
|
)
|
|
521
|
|
||||
Net unrealized gains on discontinued operations
|
—
|
|
|
7
|
|
|
—
|
|
|
15
|
|
||||
Foreign currency translation adjustment
|
49
|
|
|
42
|
|
|
(47
|
)
|
|
34
|
|
||||
Pension and postretirement benefits
|
42
|
|
|
(51
|
)
|
|
48
|
|
|
(50
|
)
|
||||
Other comprehensive income (loss), net of tax
|
(278
|
)
|
|
270
|
|
|
(257
|
)
|
|
520
|
|
||||
Net income
|
138
|
|
|
267
|
|
|
371
|
|
|
280
|
|
||||
Total comprehensive income (loss)
|
$
|
(140
|
)
|
|
$
|
537
|
|
|
$
|
114
|
|
|
$
|
800
|
|
(In millions, except share data)
|
June 30, 2015
(Unaudited)
|
|
December 31,
2014 |
||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturity securities at fair value (amortized cost of $37,199 and $37,335)
|
$
|
39,849
|
|
|
$
|
40,768
|
|
Equity securities at fair value (cost of $208 and $210)
|
216
|
|
|
222
|
|
||
Limited partnership investments
|
2,930
|
|
|
2,937
|
|
||
Other invested assets
|
43
|
|
|
41
|
|
||
Mortgage loans
|
622
|
|
|
588
|
|
||
Short term investments
|
1,672
|
|
|
1,706
|
|
||
Total investments
|
45,332
|
|
|
46,262
|
|
||
Cash
|
145
|
|
|
190
|
|
||
Reinsurance receivables (less allowance for uncollectible receivables of $48 and $48)
|
4,654
|
|
|
4,694
|
|
||
Insurance receivables (less allowance for uncollectible receivables of $58 and $61)
|
2,187
|
|
|
1,936
|
|
||
Accrued investment income
|
397
|
|
|
405
|
|
||
Deferred acquisition costs
|
621
|
|
|
600
|
|
||
Deferred income taxes
|
255
|
|
|
191
|
|
||
Property and equipment at cost (less accumulated depreciation of $376 and $364)
|
317
|
|
|
295
|
|
||
Goodwill
|
153
|
|
|
152
|
|
||
Other assets
|
961
|
|
|
841
|
|
||
Total assets
|
$
|
55,022
|
|
|
$
|
55,566
|
|
Liabilities
|
|
|
|
|
|
||
Insurance reserves:
|
|
|
|
|
|||
Claim and claim adjustment expenses
|
$
|
23,193
|
|
|
$
|
23,271
|
|
Unearned premiums
|
3,815
|
|
|
3,592
|
|
||
Future policy benefits
|
9,360
|
|
|
9,490
|
|
||
Policyholders' funds
|
—
|
|
|
27
|
|
||
Long term debt
|
2,560
|
|
|
2,559
|
|
||
Other liabilities (i
ncludes $72 and $1
53 due to Loews Corporation)
|
3,860
|
|
|
3,833
|
|
||
Total liabilities
|
42,788
|
|
|
42,772
|
|
||
Commitments and contingencies (Notes C, F and H)
|
|
|
|
||||
Stockholders' Equity
|
|
|
|
|
|
||
Common stock ($2.50 par value; 500,000,000 shares authorized; 273,040,243 shares issued; 270,259,928 and 269,980,202 shares outstanding)
|
683
|
|
|
683
|
|
||
Additional paid-in capital
|
2,146
|
|
|
2,151
|
|
||
Retained earnings
|
9,340
|
|
|
9,645
|
|
||
Accumulated other comprehensive income
|
143
|
|
|
400
|
|
||
Treasury stock (2,780,315 and 3,060,041 shares), at cost
|
(78
|
)
|
|
(84
|
)
|
||
Notes receivable for the issuance of common stock
|
—
|
|
|
(1
|
)
|
||
Total stockholders’ equity
|
12,234
|
|
|
12,794
|
|
||
Total liabilities and stockholders' equity
|
$
|
55,022
|
|
|
$
|
55,566
|
|
Six months ended June 30
|
|
|
|
||||
(In millions)
|
2015
|
|
2014
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income
|
$
|
371
|
|
|
$
|
280
|
|
Adjustments to reconcile net income to net cash flows provided by operating activities:
|
|
|
|
||||
Impairment loss on sale of subsidiary
|
—
|
|
|
255
|
|
||
Deferred income tax expense
|
32
|
|
|
48
|
|
||
Trading portfolio activity
|
1
|
|
|
17
|
|
||
Net realized investment gains
|
(10
|
)
|
|
(34
|
)
|
||
Equity method investees
|
(48
|
)
|
|
75
|
|
||
Net amortization of investments
|
(13
|
)
|
|
—
|
|
||
Depreciation and amortization
|
39
|
|
|
42
|
|
||
Changes in:
|
|
|
|
||||
Receivables, net
|
(211
|
)
|
|
6
|
|
||
Accrued investment income
|
8
|
|
|
(3
|
)
|
||
Deferred acquisition costs
|
(8
|
)
|
|
(10
|
)
|
||
Insurance reserves
|
451
|
|
|
234
|
|
||
Other assets
|
(60
|
)
|
|
(50
|
)
|
||
Other liabilities
|
(94
|
)
|
|
(201
|
)
|
||
Other, net
|
82
|
|
|
(72
|
)
|
||
Total adjustments
|
169
|
|
|
307
|
|
||
Net cash flows provided by operating activities
|
540
|
|
|
587
|
|
||
Cash Flows from Investing Activities
|
|
|
|
|
|
||
Dispositions:
|
|
|
|
||||
Fixed maturity securities - sales
|
2,859
|
|
|
2,919
|
|
||
Fixed maturity securities - maturities, calls and redemptions
|
2,304
|
|
|
1,954
|
|
||
Equity securities
|
33
|
|
|
14
|
|
||
Limited partnerships
|
85
|
|
|
118
|
|
||
Mortgage loans
|
19
|
|
|
33
|
|
||
Purchases:
|
|
|
|
||||
Fixed maturity securities
|
(5,029
|
)
|
|
(4,921
|
)
|
||
Equity securities
|
(30
|
)
|
|
(11
|
)
|
||
Limited partnerships
|
(78
|
)
|
|
(109
|
)
|
||
Mortgage loans
|
(60
|
)
|
|
(43
|
)
|
||
Change in other investments
|
8
|
|
|
10
|
|
||
Change in short term investments
|
33
|
|
|
(678
|
)
|
||
Purchases of property and equipment
|
(57
|
)
|
|
(27
|
)
|
||
Other, net
|
—
|
|
|
7
|
|
||
Net cash flow
s provided (
used) by investing activities
|
$
|
87
|
|
|
$
|
(734
|
)
|
Six months ended June 30
|
|
|
|
||||
(In millions)
|
2015
|
|
2014
|
||||
Cash Flows from Financing Activities
|
|
|
|
||||
Dividends paid to common stockholders
|
$
|
(676
|
)
|
|
$
|
(406
|
)
|
Proceeds from the issuance of debt
|
—
|
|
|
546
|
|
||
Other, net
|
6
|
|
|
23
|
|
||
Net cash flows p
rovided (used)
by financing activities
|
(670
|
)
|
|
163
|
|
||
Effect of foreign exchange rate changes on cash
|
(2
|
)
|
|
2
|
|
||
Transfer of cash to assets held for sale
|
—
|
|
|
(9
|
)
|
||
Net change in cash
|
(45
|
)
|
|
9
|
|
||
Cash, beginning of year
|
190
|
|
|
195
|
|
||
Cash, end of period
|
$
|
145
|
|
|
$
|
204
|
|
Six months ended June 30
|
|
|
|
||||
(In millions)
|
2015
|
|
2014
|
||||
Common Stock
|
|
|
|
||||
Balance, beginning of year
|
$
|
683
|
|
|
$
|
683
|
|
Balance, end of period
|
683
|
|
|
683
|
|
||
Additional Paid-in Capital
|
|
|
|
||||
Balance, beginning of year
|
2,151
|
|
|
2,145
|
|
||
Stock-based compensation
|
(5
|
)
|
|
1
|
|
||
Balance, end of period
|
2,146
|
|
|
2,146
|
|
||
Retained Earnings
|
|
|
|
||||
Balance, beginning of year
|
9,645
|
|
|
9,495
|
|
||
Dividends paid to common stockholders
|
(676
|
)
|
|
(406
|
)
|
||
Net income
|
371
|
|
|
280
|
|
||
Balance, end of period
|
9,340
|
|
|
9,369
|
|
||
Accumulated Other Comprehensive Income
|
|
|
|
||||
Balance, beginning of year
|
400
|
|
|
442
|
|
||
Other comprehensive income (loss)
|
(257
|
)
|
|
520
|
|
||
Balance, end of period
|
143
|
|
|
962
|
|
||
Treasury Stock
|
|
|
|
||||
Balance, beginning of year
|
(84
|
)
|
|
(91
|
)
|
||
Stock-based compensation
|
6
|
|
|
6
|
|
||
Balance, end of period
|
(78
|
)
|
|
(85
|
)
|
||
Notes Receivable for the Issuance of Common Stock
|
|
|
|
||||
Balance, beginning of year
|
(1
|
)
|
|
(23
|
)
|
||
Decrease
in notes receivable for common stock
|
1
|
|
|
22
|
|
||
Balance, end of period
|
—
|
|
|
(1
|
)
|
||
Total Stockholders' Equity
|
$
|
12,234
|
|
|
$
|
13,074
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Fixed maturity securities
|
$
|
452
|
|
|
$
|
451
|
|
|
$
|
895
|
|
|
$
|
903
|
|
Short term investments
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Limited partnership investments
|
48
|
|
|
97
|
|
|
162
|
|
|
170
|
|
||||
Equity securities
|
3
|
|
|
3
|
|
|
6
|
|
|
5
|
|
||||
Mortgage loans
|
9
|
|
|
9
|
|
|
17
|
|
|
15
|
|
||||
Trading portfolio
|
3
|
|
|
3
|
|
|
5
|
|
|
6
|
|
||||
Other
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
||||
Gross investment income
|
515
|
|
|
564
|
|
|
1,087
|
|
|
1,103
|
|
||||
Investment expense
|
(15
|
)
|
|
(14
|
)
|
|
(29
|
)
|
|
(27
|
)
|
||||
Net investment income
|
$
|
500
|
|
|
$
|
550
|
|
|
$
|
1,058
|
|
|
$
|
1,076
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net realized investment gains (losses):
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Gross realized gains
|
$
|
36
|
|
|
$
|
20
|
|
|
$
|
69
|
|
|
$
|
73
|
|
Gross realized losses
|
(48
|
)
|
|
(39
|
)
|
|
(69
|
)
|
|
(54
|
)
|
||||
Net realized investment gains (losses) on fixed maturity securities
|
(12
|
)
|
|
(19
|
)
|
|
—
|
|
|
19
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|||||||
Gross realized gains
|
—
|
|
|
—
|
|
|
1
|
|
|
5
|
|
||||
Gross realized losses
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Net realized investment gains (losses) on equity securities
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
5
|
|
||||
Derivative financial instruments
|
11
|
|
|
1
|
|
|
10
|
|
|
1
|
|
||||
Short term investments and other
|
2
|
|
|
4
|
|
|
1
|
|
|
7
|
|
||||
Net realized investment gains (losses)
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
10
|
|
|
$
|
32
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Fixed maturity securities available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Corporate and other bonds
|
$
|
11
|
|
|
$
|
2
|
|
|
$
|
16
|
|
|
$
|
3
|
|
States, municipalities and political subdivisions
|
13
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
Asset-backed:
|
|
|
|
|
|
|
|
||||||||
Residential mortgage-backed
|
5
|
|
|
1
|
|
|
6
|
|
|
2
|
|
||||
Other asset-backed
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Total asset-backed
|
6
|
|
|
2
|
|
|
7
|
|
|
3
|
|
||||
Total fixed maturity securities available-for-sale
|
30
|
|
|
4
|
|
|
41
|
|
|
6
|
|
||||
Equity securities available-for-sale -- Common stock
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Short term investments
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Net OTTI losses recognized in earnings
|
$
|
31
|
|
|
$
|
5
|
|
|
$
|
43
|
|
|
$
|
7
|
|
June 30, 2015
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
OTTI
Losses (Gains)
|
||||||||||
(In millions)
|
|
|
|
|
|||||||||||||||
Fixed maturity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate and other bonds
|
$
|
16,863
|
|
|
$
|
1,337
|
|
|
$
|
88
|
|
|
$
|
18,112
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
11,707
|
|
|
1,186
|
|
|
40
|
|
|
12,853
|
|
|
—
|
|
|||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
4,940
|
|
|
175
|
|
|
15
|
|
|
5,100
|
|
|
(46
|
)
|
|||||
Commercial mortgage-backed
|
2,186
|
|
|
77
|
|
|
12
|
|
|
2,251
|
|
|
(2
|
)
|
|||||
Other asset-backed
|
1,044
|
|
|
12
|
|
|
1
|
|
|
1,055
|
|
|
—
|
|
|||||
Total asset-backed
|
8,170
|
|
|
264
|
|
|
28
|
|
|
8,406
|
|
|
(48
|
)
|
|||||
U.S. Treasury and obligations of government-sponsored enterprises
|
24
|
|
|
5
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|||||
Foreign government
|
387
|
|
|
13
|
|
|
1
|
|
|
399
|
|
|
—
|
|
|||||
Redeemable preferred stock
|
33
|
|
|
2
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|||||
Total fixed maturity securities available-for-sale
|
37,184
|
|
|
2,807
|
|
|
157
|
|
|
39,834
|
|
|
$
|
(48
|
)
|
||||
Total fixed maturity securities trading
|
15
|
|
|
|
|
|
|
|
|
15
|
|
|
|
||||||
Equity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
54
|
|
|
8
|
|
|
2
|
|
|
60
|
|
|
|
|
|||||
Preferred stock
|
154
|
|
|
4
|
|
|
2
|
|
|
156
|
|
|
|
|
|||||
Total equity securities available-for-sale
|
208
|
|
|
12
|
|
|
4
|
|
|
216
|
|
|
|
|
|||||
Total
|
$
|
37,407
|
|
|
$
|
2,819
|
|
|
$
|
161
|
|
|
$
|
40,065
|
|
|
|
|
December 31, 2014
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
OTTI
Losses (Gains)
|
||||||||||
(In millions)
|
|
|
|
|
|||||||||||||||
Fixed maturity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate and other bonds
|
$
|
17,210
|
|
|
$
|
1,721
|
|
|
$
|
61
|
|
|
$
|
18,870
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
11,285
|
|
|
1,463
|
|
|
8
|
|
|
12,740
|
|
|
—
|
|
|||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
5,028
|
|
|
218
|
|
|
13
|
|
|
5,233
|
|
|
(53
|
)
|
|||||
Commercial mortgage-backed
|
2,056
|
|
|
93
|
|
|
5
|
|
|
2,144
|
|
|
(2
|
)
|
|||||
Other asset-backed
|
1,234
|
|
|
11
|
|
|
10
|
|
|
1,235
|
|
|
—
|
|
|||||
Total asset-backed
|
8,318
|
|
|
322
|
|
|
28
|
|
|
8,612
|
|
|
(55
|
)
|
|||||
U.S. Treasury and obligations of government-sponsored enterprises
|
26
|
|
|
5
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|||||
Foreign government
|
438
|
|
|
16
|
|
|
—
|
|
|
454
|
|
|
—
|
|
|||||
Redeemable preferred stock
|
39
|
|
|
3
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|||||
Total fixed maturity securities available-for-sale
|
37,316
|
|
|
3,530
|
|
|
97
|
|
|
40,749
|
|
|
$
|
(55
|
)
|
||||
Total fixed maturity securities trading
|
19
|
|
|
|
|
|
|
|
|
19
|
|
|
|
||||||
Equity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
38
|
|
|
9
|
|
|
—
|
|
|
47
|
|
|
|
|
|||||
Preferred stock
|
172
|
|
|
5
|
|
|
2
|
|
|
175
|
|
|
|
|
|||||
Total equity securities available-for-sale
|
210
|
|
|
14
|
|
|
2
|
|
|
222
|
|
|
|
|
|||||
Total
|
$
|
37,545
|
|
|
$
|
3,544
|
|
|
$
|
99
|
|
|
$
|
40,990
|
|
|
|
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
June 30, 2015
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
(In millions)
|
|
|
|
|
|
||||||||||||||||||
Fixed maturity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate and other bonds
|
$
|
3,201
|
|
|
$
|
73
|
|
|
$
|
152
|
|
|
$
|
15
|
|
|
$
|
3,353
|
|
|
$
|
88
|
|
States, municipalities and political subdivisions
|
1,523
|
|
|
34
|
|
|
143
|
|
|
6
|
|
|
1,666
|
|
|
40
|
|
||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage-backed
|
451
|
|
|
6
|
|
|
167
|
|
|
9
|
|
|
618
|
|
|
15
|
|
||||||
Commercial mortgage-backed
|
557
|
|
|
9
|
|
|
61
|
|
|
3
|
|
|
618
|
|
|
12
|
|
||||||
Other asset-backed
|
135
|
|
|
1
|
|
|
18
|
|
|
—
|
|
|
153
|
|
|
1
|
|
||||||
Total asset-backed
|
1,143
|
|
|
16
|
|
|
246
|
|
|
12
|
|
|
1,389
|
|
|
28
|
|
||||||
U.S. Treasury and obligations of government-sponsored enterprises
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||
Foreign government
|
20
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
21
|
|
|
1
|
|
||||||
Total fixed maturity securities available-for-sale
|
5,890
|
|
|
124
|
|
|
542
|
|
|
33
|
|
|
6,432
|
|
|
157
|
|
||||||
Equity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Common Stock
|
21
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
2
|
|
||||||
Preferred stock
|
17
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
2
|
|
||||||
Total
|
$
|
5,928
|
|
|
$
|
128
|
|
|
$
|
542
|
|
|
$
|
33
|
|
|
$
|
6,470
|
|
|
$
|
161
|
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
December 31, 2014
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
(In millions)
|
|
|
|
|
|
||||||||||||||||||
Fixed maturity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate and other bonds
|
$
|
1,330
|
|
|
$
|
46
|
|
|
$
|
277
|
|
|
$
|
15
|
|
|
$
|
1,607
|
|
|
$
|
61
|
|
States, municipalities and political subdivisions
|
335
|
|
|
5
|
|
|
127
|
|
|
3
|
|
|
462
|
|
|
8
|
|
||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage-backed
|
293
|
|
|
5
|
|
|
189
|
|
|
8
|
|
|
482
|
|
|
13
|
|
||||||
Commercial mortgage-backed
|
264
|
|
|
2
|
|
|
99
|
|
|
3
|
|
|
363
|
|
|
5
|
|
||||||
Other asset-backed
|
607
|
|
|
10
|
|
|
7
|
|
|
—
|
|
|
614
|
|
|
10
|
|
||||||
Total asset-backed
|
1,164
|
|
|
17
|
|
|
295
|
|
|
11
|
|
|
1,459
|
|
|
28
|
|
||||||
U.S. Treasury and obligations of government-sponsored enterprises
|
3
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||||
Foreign government
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||
Redeemable preferred stock
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||
Total fixed maturity securities available-for-sale
|
2,838
|
|
|
68
|
|
|
706
|
|
|
29
|
|
|
3,544
|
|
|
97
|
|
||||||
Equity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Preferred stock
|
17
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
18
|
|
|
2
|
|
||||||
Total
|
$
|
2,855
|
|
|
$
|
70
|
|
|
$
|
707
|
|
|
$
|
29
|
|
|
$
|
3,562
|
|
|
$
|
99
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Beginning balance of credit losses on fixed maturity securities
|
$
|
61
|
|
|
$
|
69
|
|
|
$
|
62
|
|
|
$
|
74
|
|
Reductions for securities sold during the period
|
(2
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||
Reductions for securities the Company intends to sell or more likely than not will be required to sell
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Ending balance of credit losses on fixed maturity securities
|
$
|
59
|
|
|
$
|
66
|
|
|
$
|
59
|
|
|
$
|
66
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
(In millions)
|
Cost or
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Cost or
Amortized
Cost
|
|
Estimated
Fair
Value
|
||||||||
Due in one year or less
|
$
|
1,539
|
|
|
$
|
1,559
|
|
|
$
|
2,479
|
|
|
$
|
2,511
|
|
Due after one year through five years
|
7,507
|
|
|
7,956
|
|
|
9,054
|
|
|
9,605
|
|
||||
Due after five years through ten years
|
14,099
|
|
|
14,549
|
|
|
12,055
|
|
|
12,584
|
|
||||
Due after ten years
|
14,039
|
|
|
15,770
|
|
|
13,728
|
|
|
16,049
|
|
||||
Total
|
$
|
37,184
|
|
|
$
|
39,834
|
|
|
$
|
37,316
|
|
|
$
|
40,749
|
|
June 30, 2015
|
Contractual/
Notional
Amount
|
|
Estimated Fair Value
|
||||||||
(In millions)
|
|
Asset
|
|
Liability
|
|||||||
Without hedge designation
|
|
|
|
|
|
||||||
Equity warrants
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Embedded derivative on funds withheld liability
|
183
|
|
|
—
|
|
|
(6
|
)
|
|||
Total
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
December 31, 2014
|
Contractual/
Notional
Amount
|
|
Estimated Fair Value
|
||||||||
(In millions)
|
|
Asset
|
|
Liability
|
|||||||
Without hedge designation
|
|
|
|
|
|
||||||
Currency forwards
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity warrants
|
5
|
|
|
—
|
|
|
—
|
|
|||
Embedded derivative on funds withheld liability
|
184
|
|
|
—
|
|
|
3
|
|
|||
Total
|
|
|
$
|
—
|
|
|
$
|
3
|
|
June 30, 2015
|
|
|
|
|
|
|
Total
Assets/ Liabilities
at Fair Value
|
||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Corporate and other bonds
|
$
|
28
|
|
|
$
|
17,958
|
|
|
$
|
141
|
|
|
$
|
18,127
|
|
States, municipalities and political subdivisions
|
—
|
|
|
12,768
|
|
|
85
|
|
|
12,853
|
|
||||
Asset-backed:
|
|
|
|
|
|
|
|
||||||||
Residential mortgage-backed
|
—
|
|
|
4,893
|
|
|
207
|
|
|
5,100
|
|
||||
Commercial mortgage-backed
|
—
|
|
|
2,164
|
|
|
87
|
|
|
2,251
|
|
||||
Other asset-backed
|
—
|
|
|
565
|
|
|
490
|
|
|
1,055
|
|
||||
Total asset-backed
|
—
|
|
|
7,622
|
|
|
784
|
|
|
8,406
|
|
||||
U.S. Treasury and obligations of government-sponsored enterprises
|
28
|
|
|
1
|
|
|
—
|
|
|
29
|
|
||||
Foreign government
|
32
|
|
|
367
|
|
|
—
|
|
|
399
|
|
||||
Redeemable preferred stock
|
24
|
|
|
11
|
|
|
—
|
|
|
35
|
|
||||
Total fixed maturity securities
|
112
|
|
|
38,727
|
|
|
1,010
|
|
|
39,849
|
|
||||
Equity securities
|
139
|
|
|
61
|
|
|
16
|
|
|
216
|
|
||||
Other invested assets
|
—
|
|
|
43
|
|
|
—
|
|
|
43
|
|
||||
Short term investments
|
692
|
|
|
900
|
|
|
—
|
|
|
1,592
|
|
||||
Life settlement contracts, included in Other assets
|
—
|
|
|
—
|
|
|
75
|
|
|
75
|
|
||||
Total assets
|
$
|
943
|
|
|
$
|
39,731
|
|
|
$
|
1,101
|
|
|
$
|
41,775
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||
Other liabilities
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
December 31, 2014
|
|
|
|
|
|
|
Total
Assets/Liabilities
at Fair Value
|
||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Corporate and other bonds
|
$
|
32
|
|
|
$
|
18,695
|
|
|
$
|
162
|
|
|
$
|
18,889
|
|
States, municipalities and political subdivisions
|
—
|
|
|
12,646
|
|
|
94
|
|
|
12,740
|
|
||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|||||||
Residential mortgage-backed
|
—
|
|
|
5,044
|
|
|
189
|
|
|
5,233
|
|
||||
Commercial mortgage-backed
|
—
|
|
|
2,061
|
|
|
83
|
|
|
2,144
|
|
||||
Other asset-backed
|
—
|
|
|
580
|
|
|
655
|
|
|
1,235
|
|
||||
Total asset-backed
|
—
|
|
|
7,685
|
|
|
927
|
|
|
8,612
|
|
||||
U.S. Treasury and obligations of government-sponsored enterprises
|
28
|
|
|
3
|
|
|
—
|
|
|
31
|
|
||||
Foreign government
|
41
|
|
|
413
|
|
|
—
|
|
|
454
|
|
||||
Redeemable preferred stock
|
30
|
|
|
12
|
|
|
—
|
|
|
42
|
|
||||
Total fixed maturity securities
|
131
|
|
|
39,454
|
|
|
1,183
|
|
|
40,768
|
|
||||
Equity securities
|
145
|
|
|
61
|
|
|
16
|
|
|
222
|
|
||||
Other invested assets
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
||||
Short term investments
|
681
|
|
|
963
|
|
|
—
|
|
|
1,644
|
|
||||
Life settlement contracts, included in Other assets
|
—
|
|
|
—
|
|
|
82
|
|
|
82
|
|
||||
Total assets
|
$
|
957
|
|
|
$
|
40,519
|
|
|
$
|
1,281
|
|
|
$
|
42,757
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Other liabilities
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Level 3
(In millions)
|
Balance as of
April 1,
2015
|
|
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in Net income (loss)
|
|
Net change in unrealized appreciation (depreciation) included in Other comprehensive income (loss)
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers into
Level 3
|
|
Transfers out
of Level 3
|
|
Balance as of
June 30,
2015
|
|
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2015 recognized in Net income (loss)
|
||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate and other bonds
|
$
|
186
|
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
(35
|
)
|
|
$
|
141
|
|
|
$
|
(3
|
)
|
States, municipalities and political subdivisions
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
||||||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Residential mortgage-backed
|
232
|
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(13
|
)
|
|
207
|
|
|
—
|
|
||||||||||
Commercial mortgage-backed
|
64
|
|
|
1
|
|
|
(1
|
)
|
|
9
|
|
|
—
|
|
|
(1
|
)
|
|
17
|
|
|
(2
|
)
|
|
87
|
|
|
—
|
|
||||||||||
Other asset-backed
|
553
|
|
|
2
|
|
|
1
|
|
|
47
|
|
|
(90
|
)
|
|
(17
|
)
|
|
—
|
|
|
(6
|
)
|
|
490
|
|
|
—
|
|
||||||||||
Total asset-backed
|
849
|
|
|
4
|
|
|
(2
|
)
|
|
56
|
|
|
(90
|
)
|
|
(29
|
)
|
|
17
|
|
|
(21
|
)
|
|
784
|
|
|
—
|
|
||||||||||
Total fixed maturity securities
|
1,121
|
|
|
2
|
|
|
(3
|
)
|
|
56
|
|
|
(90
|
)
|
|
(37
|
)
|
|
17
|
|
|
(56
|
)
|
|
1,010
|
|
|
(3
|
)
|
||||||||||
Equity securities
|
13
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||||||||
Life settlement contracts
|
79
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
75
|
|
|
(2
|
)
|
||||||||||
Total
|
$
|
1,213
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
(90
|
)
|
|
$
|
(45
|
)
|
|
$
|
17
|
|
|
$
|
(56
|
)
|
|
$
|
1,101
|
|
|
$
|
(5
|
)
|
Level 3
(In millions)
|
Balance as of April 1,
2014
|
|
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in Net income (loss)
|
|
Net change in unrealized appreciation (depreciation) included in Other comprehensive income (loss)
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers into
Level 3
|
|
Transfers out
of Level 3
|
|
Balance as of
June 30,
2014
|
|
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2014 recognized in Net income (loss)
|
||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate and other bonds
|
$
|
189
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
(6
|
)
|
|
$
|
(5
|
)
|
|
$
|
5
|
|
|
$
|
(11
|
)
|
|
$
|
194
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
86
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
||||||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Residential mortgage-backed
|
359
|
|
|
(24
|
)
|
|
47
|
|
|
22
|
|
|
(174
|
)
|
|
(19
|
)
|
|
—
|
|
|
(26
|
)
|
|
185
|
|
|
—
|
|
||||||||||
Commercial mortgage-backed
|
126
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
(60
|
)
|
|
(1
|
)
|
|
12
|
|
|
(20
|
)
|
|
59
|
|
|
—
|
|
||||||||||
Other asset-backed
|
439
|
|
|
—
|
|
|
4
|
|
|
229
|
|
|
(28
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
626
|
|
|
(1
|
)
|
||||||||||
Total asset-backed
|
924
|
|
|
(23
|
)
|
|
52
|
|
|
251
|
|
|
(262
|
)
|
|
(38
|
)
|
|
12
|
|
|
(46
|
)
|
|
870
|
|
|
(1
|
)
|
||||||||||
Total fixed maturity securities
|
1,199
|
|
|
(21
|
)
|
|
53
|
|
|
273
|
|
|
(278
|
)
|
|
(43
|
)
|
|
17
|
|
|
(57
|
)
|
|
1,143
|
|
|
(1
|
)
|
||||||||||
Equity securities
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||||
Life settlement contracts
|
87
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
86
|
|
|
1
|
|
||||||||||
Total
|
$
|
1,288
|
|
|
$
|
(9
|
)
|
|
$
|
53
|
|
|
$
|
273
|
|
|
$
|
(278
|
)
|
|
$
|
(56
|
)
|
|
$
|
17
|
|
|
$
|
(57
|
)
|
|
$
|
1,231
|
|
|
$
|
—
|
|
Level 3
(In millions)
|
Balance as of
January 1,
2015
|
|
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in Net income (loss)
|
|
Net change in unrealized appreciation (depreciation) included in Other comprehensive income (loss)
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers into
Level 3
|
|
Transfers out
of Level 3
|
|
Balance as of
June 30,
2015
|
|
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2015 recognized in Net income (loss)
|
||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate and other bonds
|
$
|
162
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
12
|
|
|
$
|
(12
|
)
|
|
$
|
(21
|
)
|
|
$
|
37
|
|
|
$
|
(35
|
)
|
|
$
|
141
|
|
|
$
|
(3
|
)
|
States, municipalities and political subdivisions
|
94
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
||||||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Residential mortgage-backed
|
189
|
|
|
2
|
|
|
(2
|
)
|
|
72
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(33
|
)
|
|
207
|
|
|
—
|
|
||||||||||
Commercial mortgage-backed
|
83
|
|
|
2
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
(2
|
)
|
|
17
|
|
|
(28
|
)
|
|
87
|
|
|
—
|
|
||||||||||
Other asset-backed
|
655
|
|
|
3
|
|
|
10
|
|
|
82
|
|
|
(234
|
)
|
|
(20
|
)
|
|
—
|
|
|
(6
|
)
|
|
490
|
|
|
—
|
|
||||||||||
Total asset-backed
|
927
|
|
|
7
|
|
|
8
|
|
|
169
|
|
|
(234
|
)
|
|
(43
|
)
|
|
17
|
|
|
(67
|
)
|
|
784
|
|
|
—
|
|
||||||||||
Total fixed maturity securities
|
1,183
|
|
|
7
|
|
|
7
|
|
|
181
|
|
|
(246
|
)
|
|
(74
|
)
|
|
54
|
|
|
(102
|
)
|
|
1,010
|
|
|
(3
|
)
|
||||||||||
Equity securities
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||||||||
Life settlement contracts
|
82
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
75
|
|
|
(1
|
)
|
||||||||||
Total
|
$
|
1,281
|
|
|
$
|
24
|
|
|
$
|
7
|
|
|
$
|
181
|
|
|
$
|
(246
|
)
|
|
$
|
(98
|
)
|
|
$
|
54
|
|
|
$
|
(102
|
)
|
|
$
|
1,101
|
|
|
$
|
(4
|
)
|
Level 3
(In millions)
|
Balance as of January 1,
2014
|
|
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in Net income (loss)
|
|
Net change in unrealized appreciation (depreciation) included in Other comprehensive income (loss)
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers into
Level 3
|
|
Transfers out
of Level 3
|
|
Balance as of
June 30,
2014
|
|
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2014 recognized in Net income (loss)
|
||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate and other bonds
|
$
|
204
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
26
|
|
|
$
|
(10
|
)
|
|
$
|
(10
|
)
|
|
$
|
8
|
|
|
$
|
(27
|
)
|
|
$
|
194
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
71
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
(10
|
)
|
|
—
|
|
|
14
|
|
|
—
|
|
|
79
|
|
|
—
|
|
||||||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Residential mortgage-backed
|
331
|
|
|
(23
|
)
|
|
62
|
|
|
47
|
|
|
(174
|
)
|
|
(40
|
)
|
|
21
|
|
|
(39
|
)
|
|
185
|
|
|
—
|
|
||||||||||
Commercial mortgage-backed
|
151
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(60
|
)
|
|
(2
|
)
|
|
12
|
|
|
(44
|
)
|
|
59
|
|
|
—
|
|
||||||||||
Other asset-backed
|
446
|
|
|
1
|
|
|
4
|
|
|
377
|
|
|
(111
|
)
|
|
(90
|
)
|
|
—
|
|
|
(1
|
)
|
|
626
|
|
|
(1
|
)
|
||||||||||
Total asset-backed
|
928
|
|
|
(20
|
)
|
|
66
|
|
|
424
|
|
|
(345
|
)
|
|
(132
|
)
|
|
33
|
|
|
(84
|
)
|
|
870
|
|
|
(1
|
)
|
||||||||||
Total fixed maturity securities
|
1,203
|
|
|
(17
|
)
|
|
69
|
|
|
451
|
|
|
(365
|
)
|
|
(142
|
)
|
|
55
|
|
|
(111
|
)
|
|
1,143
|
|
|
(1
|
)
|
||||||||||
Equity securities
|
11
|
|
|
3
|
|
|
(4
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||||
Life settlement contracts
|
88
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
86
|
|
|
2
|
|
||||||||||
Separate account business
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||||||
Total
|
$
|
1,303
|
|
|
$
|
8
|
|
|
$
|
65
|
|
|
$
|
451
|
|
|
$
|
(373
|
)
|
|
$
|
(166
|
)
|
|
$
|
55
|
|
|
$
|
(112
|
)
|
|
$
|
1,231
|
|
|
$
|
1
|
|
Major Category of Assets and Liabilities
|
|
Condensed Consolidated Statements of Operations Line Items
|
Fixed maturity securities available-for-sale
|
|
Net realized investment gains (losses)
|
Fixed maturity securities trading
|
|
Net investment income
|
Equity securities
|
|
Net realized investment gains (losses)
|
Other invested assets - Derivative financial instruments held in a trading portfolio
|
|
Net investment income
|
Other invested assets - Derivative financial instruments not held in a trading portfolio
|
|
Net realized investment gains (losses)
|
Other invested assets - Overseas deposits
|
|
Net investment income
|
Life settlement contracts
|
|
Other revenues
|
Other liabilities - Derivative financial instruments
|
|
Net realized investment gains (losses)
|
June 30, 2015
|
Estimated Fair Value
(In millions)
|
|
Valuation Technique(s)
|
|
Unobservable Input(s)
|
|
Range
(Weighted Average)
|
||
Fixed maturity securities
|
$
|
97
|
|
|
Discounted cash flow
|
|
Credit spread
|
|
2% - 13% (3%)
|
Life settlement contracts
|
75
|
|
|
Discounted cash flow
|
|
Discount rate risk premium
|
|
9%
|
|
|
|
|
|
|
Mortality assumption
|
|
55% - 1676% (165%)
|
December 31, 2014
|
Estimated Fair Value
(In millions) |
|
Valuation Technique(s)
|
|
Unobservable Input(s)
|
|
Range
(Weighted Average)
|
||
Fixed maturity securities
|
$
|
101
|
|
|
Discounted cash flow
|
|
Credit spread
|
|
2% - 13% (3%)
|
Equity securities
|
16
|
|
|
Market approach
|
|
Private offering price
|
|
$12 - $4,391 per share ($600)
|
|
Life settlement contracts
|
82
|
|
|
Discounted cash flow
|
|
Discount rate risk premium
|
|
9%
|
|
|
|
|
|
|
Mortality assumption
|
|
55% - 1676% (163%)
|
June 30, 2015
|
Carrying
Amount
|
|
Estimated Fair Value
|
||||||||||||||||
(In millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans
|
$
|
622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
640
|
|
|
$
|
640
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Long term debt
|
$
|
2,560
|
|
|
$
|
—
|
|
|
$
|
2,843
|
|
|
$
|
—
|
|
|
$
|
2,843
|
|
December 31, 2014
|
Carrying
Amount |
|
Estimated Fair Value
|
||||||||||||||||
(In millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes receivable for the issuance of common stock
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Mortgage loans
|
588
|
|
|
—
|
|
|
—
|
|
|
608
|
|
|
608
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Long term debt
|
$
|
2,559
|
|
|
$
|
—
|
|
|
$
|
2,883
|
|
|
$
|
—
|
|
|
$
|
2,883
|
|
Three months ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Specialty
|
|
Commercial
|
|
International
|
|
Corporate
& Other
Non-Core
|
|
Total
|
||||||||||
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development
|
$
|
(13
|
)
|
|
$
|
16
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
Pretax (favorable) unfavorable premium development
|
(2
|
)
|
|
(11
|
)
|
|
(2
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Total pretax (favorable) unfavorable net prior year development
|
$
|
(15
|
)
|
|
$
|
5
|
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
Three months ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Specialty
|
|
Commercial
|
|
International
|
|
Corporate
& Other
Non-Core
|
|
Total
|
||||||||||
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development
|
$
|
(41
|
)
|
|
$
|
90
|
|
|
$
|
(25
|
)
|
|
$
|
—
|
|
|
$
|
24
|
|
Pretax (favorable) unfavorable premium development
|
(2
|
)
|
|
(6
|
)
|
|
6
|
|
|
—
|
|
|
(2
|
)
|
|||||
Total pretax (favorable) unfavorable net prior year development
|
$
|
(43
|
)
|
|
$
|
84
|
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
22
|
|
Six months ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Specialty
|
|
Commercial
|
|
International
|
|
Corporate
& Other
Non-Core
|
|
Total
|
||||||||||
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development
|
$
|
(11
|
)
|
|
$
|
11
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
Pretax (favorable) unfavorable premium development
|
(8
|
)
|
|
(12
|
)
|
|
14
|
|
|
—
|
|
|
(6
|
)
|
|||||
Total pretax (favorable) unfavorable net prior year development
|
$
|
(19
|
)
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
Six months ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Specialty
|
|
Commercial
|
|
International
|
|
Corporate
& Other
Non-Core
|
|
Total
|
||||||||||
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development
|
$
|
(44
|
)
|
|
$
|
108
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
49
|
|
Pretax (favorable) unfavorable premium development
|
(8
|
)
|
|
(24
|
)
|
|
(1
|
)
|
|
—
|
|
|
(33
|
)
|
|||||
Total pretax (favorable) unfavorable net prior year development
|
$
|
(52
|
)
|
|
$
|
84
|
|
|
$
|
(16
|
)
|
|
$
|
—
|
|
|
$
|
16
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development:
|
|
|
|
|
|
|
|
||||||||
Medical Professional Liability
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
8
|
|
|
$
|
1
|
|
Other Professional Liability and Management Liability
|
(1
|
)
|
|
(44
|
)
|
|
(4
|
)
|
|
(50
|
)
|
||||
Surety
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Warranty
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other
|
(7
|
)
|
|
2
|
|
|
(17
|
)
|
|
4
|
|
||||
Total pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development
|
$
|
(13
|
)
|
|
$
|
(41
|
)
|
|
$
|
(11
|
)
|
|
$
|
(44
|
)
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development:
|
|
|
|
|
|
|
|
||||||||
Commercial Auto
|
$
|
7
|
|
|
$
|
19
|
|
|
$
|
7
|
|
|
$
|
39
|
|
General Liability
|
1
|
|
|
32
|
|
|
5
|
|
|
32
|
|
||||
Workers' Compensation
|
24
|
|
|
39
|
|
|
23
|
|
|
50
|
|
||||
Property and Other
|
(16
|
)
|
|
—
|
|
|
(24
|
)
|
|
(13
|
)
|
||||
Total pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development
|
$
|
16
|
|
|
$
|
90
|
|
|
$
|
11
|
|
|
$
|
108
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development:
|
|
|
|
|
|
|
|
||||||||
Medical Professional Liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Other Professional Liability
|
(5
|
)
|
|
(14
|
)
|
|
(5
|
)
|
|
(15
|
)
|
||||
Liability
|
(2
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
(6
|
)
|
||||
Property & Marine
|
(8
|
)
|
|
(7
|
)
|
|
(14
|
)
|
|
1
|
|
||||
Other
|
7
|
|
|
—
|
|
|
14
|
|
|
(6
|
)
|
||||
Commutations
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Total pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development
|
$
|
(8
|
)
|
|
$
|
(25
|
)
|
|
$
|
(12
|
)
|
|
$
|
(15
|
)
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net A&EP adverse development before consideration of LPT
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
150
|
|
|
$
|
—
|
|
Provision for uncollectible third-party reinsurance on A&EP
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Additional amounts ceded under LPT
|
150
|
|
|
—
|
|
|
150
|
|
|
—
|
|
||||
Retroactive reinsurance benefit recognized
|
(66
|
)
|
|
(1
|
)
|
|
(71
|
)
|
|
(5
|
)
|
||||
Pretax impact of unrecognized deferred retroactive reinsurance benefit
|
$
|
84
|
|
|
$
|
(1
|
)
|
|
$
|
79
|
|
|
$
|
(5
|
)
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Pension cost (benefit)
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest cost on projected benefit obligation
|
28
|
|
|
33
|
|
|
56
|
|
|
66
|
|
||||
Expected return on plan assets
|
(44
|
)
|
|
(48
|
)
|
|
(87
|
)
|
|
(96
|
)
|
||||
Amortization of net actuarial loss
|
10
|
|
|
7
|
|
|
19
|
|
|
13
|
|
||||
Net periodic pension cost (benefit)
|
$
|
(4
|
)
|
|
$
|
(7
|
)
|
|
$
|
(8
|
)
|
|
$
|
(13
|
)
|
|
|
|
|
|
|
|
|
||||||||
Postretirement cost (benefit)
|
|
|
|
|
|
|
|
||||||||
Interest cost on projected benefit obligation
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Amortization of prior service credit
|
(1
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(9
|
)
|
||||
Amortization of net actuarial loss
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Curtailment gain
|
—
|
|
|
(86
|
)
|
|
—
|
|
|
(86
|
)
|
||||
Net periodic postretirement cost (benefit)
|
$
|
—
|
|
|
$
|
(90
|
)
|
|
$
|
—
|
|
|
$
|
(94
|
)
|
(In millions)
|
Net unrealized gains (losses) on investments with OTTI losses
|
|
Net unrealized gains (losses) on other investments
|
|
Pension and postretirement benefits
|
|
Cumulative foreign currency translation adjustment
|
|
Total
|
||||||||||
Balance as of April 1, 2015
|
$
|
35
|
|
|
$
|
1,054
|
|
|
$
|
(627
|
)
|
|
$
|
(41
|
)
|
|
$
|
421
|
|
Other comprehensive income (loss) before reclassifications
|
(4
|
)
|
|
(372
|
)
|
|
36
|
|
|
49
|
|
|
(291
|
)
|
|||||
Amounts reclassified from Accumulated other comprehensive income (loss) after tax (expense) benefit of
$-, $5, $4, $- and $9
|
—
|
|
|
(7
|
)
|
|
(6
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Other comprehensive income (loss) after tax (expense) benefit of $2, $181, $(23), $- and $160
|
(4
|
)
|
|
(365
|
)
|
|
42
|
|
|
49
|
|
|
(278
|
)
|
|||||
Balance as of June 30, 2015
|
$
|
31
|
|
|
$
|
689
|
|
|
$
|
(585
|
)
|
|
$
|
8
|
|
|
$
|
143
|
|
(In millions)
|
Net unrealized gains (losses) on investments with OTTI losses
|
|
Net unrealized gains (losses) on other investments
|
|
Net unrealized gains (losses) on discontinued operations
|
|
Pension and postretirement benefits
|
|
Cumulative foreign currency translation adjustment
|
|
Total
|
||||||||||||
Balance as of April 1, 2014
|
$
|
33
|
|
|
$
|
912
|
|
|
$
|
30
|
|
|
$
|
(425
|
)
|
|
$
|
142
|
|
|
$
|
692
|
|
Other comprehensive income (loss) before reclassifications
|
2
|
|
|
257
|
|
|
7
|
|
|
—
|
|
|
42
|
|
|
308
|
|
||||||
Amounts reclassified from Accumulated other comprehensive income (loss) after tax (expense) benefit of $-, $6, $-, $(28), $- and $(22)
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
51
|
|
|
—
|
|
|
38
|
|
||||||
Other comprehensive income (loss) after tax (expense) benefit of $(1), $(146), $(5), $28, $- and $(124)
|
2
|
|
|
270
|
|
|
7
|
|
|
(51
|
)
|
|
42
|
|
|
270
|
|
||||||
Balance as of June 30, 2014
|
$
|
35
|
|
|
$
|
1,182
|
|
|
$
|
37
|
|
|
$
|
(476
|
)
|
|
$
|
184
|
|
|
$
|
962
|
|
(In millions)
|
Net unrealized gains (losses) on investments with OTTI losses
|
|
Net unrealized gains (losses) on other investments
|
|
Pension and postretirement benefits
|
|
Cumulative foreign currency translation adjustment
|
|
Total
|
||||||||||
Balance as of January 1, 2015
|
$
|
36
|
|
|
$
|
942
|
|
|
$
|
(633
|
)
|
|
$
|
55
|
|
|
$
|
400
|
|
Other comprehensive income (loss) before reclassifications
|
(5
|
)
|
|
(251
|
)
|
|
36
|
|
|
(47
|
)
|
|
(267
|
)
|
|||||
Amounts reclassified from Accumulated other comprehensive income (loss) after tax (expense) benefit of $-, $5, $7, $- and $12
|
—
|
|
|
2
|
|
|
(12
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Other comprehensive income (loss) after tax (expense) benefit of $2, $119, $(26), $- and $95
|
(5
|
)
|
|
(253
|
)
|
|
48
|
|
|
(47
|
)
|
|
(257
|
)
|
|||||
Balance as of June 30, 2015
|
$
|
31
|
|
|
$
|
689
|
|
|
$
|
(585
|
)
|
|
$
|
8
|
|
|
$
|
143
|
|
(In millions)
|
Net unrealized gains (losses) on investments with OTTI losses
|
|
Net unrealized gains (losses) on other investments
|
|
Net unrealized gains (losses) on discontinued operations
|
|
Pension and postretirement benefits
|
|
Cumulative foreign currency translation adjustment
|
|
Total
|
||||||||||||
Balance as of January 1, 2014
|
$
|
26
|
|
|
$
|
692
|
|
|
$
|
—
|
|
|
$
|
(426
|
)
|
|
$
|
150
|
|
|
$
|
442
|
|
Transfer to net assets held for sale
|
(5
|
)
|
|
(17
|
)
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive income (loss) before reclassifications
|
14
|
|
|
521
|
|
|
15
|
|
|
—
|
|
|
34
|
|
|
584
|
|
||||||
Amounts reclassified from Accumulated other comprehensive income (loss) after tax (expense) benefit of $-, $(8), $-, $(27), $- and $(35)
|
—
|
|
|
14
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
64
|
|
||||||
Other comprehensive income (loss) after tax (expense) benefit of $(7),
$(273), $(10),
$27,
$-
and $(263)
|
14
|
|
|
507
|
|
|
15
|
|
|
(50
|
)
|
|
34
|
|
|
520
|
|
||||||
Balance as of June 30, 2014
|
$
|
35
|
|
|
$
|
1,182
|
|
|
$
|
37
|
|
|
$
|
(476
|
)
|
|
$
|
184
|
|
|
$
|
962
|
|
Component of AOCI
|
|
Condensed Consolidated Statements of Operations Line Item Affected by Reclassifications
|
Net unrealized gains (losses) on investments with OTTI losses
|
|
Net realized investment gains (losses)
|
Net unrealized gains (losses) on other investments
|
|
Net realized investment gains (losses)
|
Net unrealized gains (losses) on discontinued operations
|
|
Income (loss) from discontinued operations
|
Pension and postretirement benefits
|
|
Other operating expenses
|
Three months ended June 30, 2015
|
Specialty
|
|
Commercial
|
|
International
|
|
Life &
Group
Non-Core
|
|
Corporate
& Other
Non-Core
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
|
Eliminations
|
|
Total
|
|||||||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
$
|
689
|
|
|
$
|
703
|
|
|
$
|
207
|
|
|
$
|
137
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
1,735
|
|
Net investment income
|
134
|
|
|
169
|
|
|
13
|
|
|
179
|
|
|
5
|
|
|
—
|
|
|
500
|
|
|||||||
Other revenues
|
81
|
|
|
9
|
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
|
92
|
|
|||||||
Total operating revenues
|
904
|
|
|
881
|
|
|
219
|
|
|
316
|
|
|
8
|
|
|
(1
|
)
|
|
2,327
|
|
|||||||
Claims, Benefits and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net incurred claims and benefits
|
416
|
|
|
507
|
|
|
114
|
|
|
344
|
|
|
85
|
|
|
—
|
|
|
1,466
|
|
|||||||
Policyholders’ dividends
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||||
Amortization of deferred acquisition costs
|
146
|
|
|
117
|
|
|
45
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
314
|
|
|||||||
Other insurance related expenses
|
66
|
|
|
130
|
|
|
31
|
|
|
34
|
|
|
(1
|
)
|
|
(1
|
)
|
|
259
|
|
|||||||
Other expenses
|
69
|
|
|
5
|
|
|
(5
|
)
|
|
5
|
|
|
47
|
|
|
—
|
|
|
121
|
|
|||||||
Total claims, benefits and expenses
|
698
|
|
|
761
|
|
|
185
|
|
|
389
|
|
|
131
|
|
|
(1
|
)
|
|
2,163
|
|
|||||||
Operating income (loss) before income tax
|
206
|
|
|
120
|
|
|
34
|
|
|
(73
|
)
|
|
(123
|
)
|
|
—
|
|
|
164
|
|
|||||||
Income tax (expense) benefit on operating income (loss)
|
(69
|
)
|
|
(42
|
)
|
|
(12
|
)
|
|
49
|
|
|
42
|
|
|
—
|
|
|
(32
|
)
|
|||||||
Net operating income (loss)
|
137
|
|
|
78
|
|
|
22
|
|
|
(24
|
)
|
|
(81
|
)
|
|
—
|
|
|
132
|
|
|||||||
Net realized investment gains (losses)
|
—
|
|
|
2
|
|
|
1
|
|
|
(5
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||||
Income tax (expense) benefit on net realized investment gains (losses)
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
6
|
|
|
(1
|
)
|
|
—
|
|
|
6
|
|
|||||||
Net realized investment gains (losses), after tax
|
—
|
|
|
4
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|||||||
Net income (loss) from continuing operations
|
$
|
137
|
|
|
$
|
82
|
|
|
$
|
22
|
|
|
$
|
(23
|
)
|
|
$
|
(80
|
)
|
|
$
|
—
|
|
|
$
|
138
|
|
Three months ended June 30, 2014
|
Specialty
|
|
Commercial
|
|
International
|
|
Life &
Group
Non-Core
|
|
Corporate
& Other
Non-Core
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
|
Eliminations
|
|
Total
|
|||||||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
$
|
709
|
|
|
$
|
732
|
|
|
$
|
231
|
|
|
$
|
139
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,811
|
|
Net investment income
|
153
|
|
|
201
|
|
|
16
|
|
|
173
|
|
|
7
|
|
|
—
|
|
|
550
|
|
|||||||
Other revenues
|
74
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
5
|
|
|
(2
|
)
|
|
93
|
|
|||||||
Total operating revenues
|
936
|
|
|
941
|
|
|
247
|
|
|
320
|
|
|
12
|
|
|
(2
|
)
|
|
2,454
|
|
|||||||
Claims, Benefits and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net incurred claims and benefits
|
404
|
|
|
610
|
|
|
118
|
|
|
304
|
|
|
1
|
|
|
—
|
|
|
1,437
|
|
|||||||
Policyholders’ dividends
|
1
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||||
Amortization of deferred acquisition costs
|
148
|
|
|
126
|
|
|
54
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
335
|
|
|||||||
Other insurance related expenses
|
67
|
|
|
125
|
|
|
36
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
259
|
|
|||||||
Other expenses
|
65
|
|
|
7
|
|
|
5
|
|
|
(3
|
)
|
|
(31
|
)
|
|
(2
|
)
|
|
41
|
|
|||||||
Total claims, benefits and expenses
|
685
|
|
|
871
|
|
|
213
|
|
|
339
|
|
|
(30
|
)
|
|
(2
|
)
|
|
2,076
|
|
|||||||
Operating income (loss) before income tax
|
251
|
|
|
70
|
|
|
34
|
|
|
(19
|
)
|
|
42
|
|
|
—
|
|
|
378
|
|
|||||||
Income tax (expense) benefit on operating income (loss)
|
(84
|
)
|
|
(21
|
)
|
|
(14
|
)
|
|
28
|
|
|
(15
|
)
|
|
—
|
|
|
(106
|
)
|
|||||||
Net operating income (loss)
|
167
|
|
|
49
|
|
|
20
|
|
|
9
|
|
|
27
|
|
|
—
|
|
|
272
|
|
|||||||
Net realized investment gains (losses)
|
(5
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
3
|
|
|
—
|
|
|
(14
|
)
|
|||||||
Income tax (expense) benefit on net realized investment gains (losses)
|
1
|
|
|
(2
|
)
|
|
4
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
|||||||
Net realized investment gains (losses), after tax
|
(4
|
)
|
|
(7
|
)
|
|
1
|
|
|
(3
|
)
|
|
2
|
|
|
—
|
|
|
(11
|
)
|
|||||||
Net income (loss) from continuing operations
|
$
|
163
|
|
|
$
|
42
|
|
|
$
|
21
|
|
|
$
|
6
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
261
|
|
Six months ended June 30, 2015
|
Specialty
|
|
Commercial
|
|
International
|
|
Life &
Group
Non-Core
|
|
Corporate
& Other
Non-Core
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
|
Eliminations
|
|
Total
|
|||||||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
$
|
1,369
|
|
|
$
|
1,381
|
|
|
$
|
398
|
|
|
$
|
275
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
3,422
|
|
Net investment income
|
289
|
|
|
373
|
|
|
27
|
|
|
358
|
|
|
11
|
|
|
—
|
|
|
1,058
|
|
|||||||
Other revenues
|
159
|
|
|
18
|
|
|
(1
|
)
|
|
9
|
|
|
5
|
|
|
(1
|
)
|
|
189
|
|
|||||||
Total operating revenues
|
1,817
|
|
|
1,772
|
|
|
424
|
|
|
642
|
|
|
16
|
|
|
(2
|
)
|
|
4,669
|
|
|||||||
Claims, Benefits and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net incurred claims and benefits
|
845
|
|
|
961
|
|
|
230
|
|
|
684
|
|
|
81
|
|
|
—
|
|
|
2,801
|
|
|||||||
Policyholders’ dividends
|
2
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||||
Amortization of deferred acquisition costs
|
290
|
|
|
234
|
|
|
80
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
617
|
|
|||||||
Other insurance related expenses
|
135
|
|
|
257
|
|
|
68
|
|
|
69
|
|
|
(1
|
)
|
|
(1
|
)
|
|
527
|
|
|||||||
Other expenses
|
136
|
|
|
13
|
|
|
—
|
|
|
9
|
|
|
93
|
|
|
(1
|
)
|
|
250
|
|
|||||||
Total claims, benefits and expenses
|
1,408
|
|
|
1,470
|
|
|
378
|
|
|
775
|
|
|
173
|
|
|
(2
|
)
|
|
4,202
|
|
|||||||
Operating income (loss) before income tax
|
409
|
|
|
302
|
|
|
46
|
|
|
(133
|
)
|
|
(157
|
)
|
|
—
|
|
|
467
|
|
|||||||
Income tax (expense) benefit on operating income (loss)
|
(137
|
)
|
|
(104
|
)
|
|
(15
|
)
|
|
92
|
|
|
54
|
|
|
—
|
|
|
(110
|
)
|
|||||||
Net operating income (loss)
|
272
|
|
|
198
|
|
|
31
|
|
|
(41
|
)
|
|
(103
|
)
|
|
—
|
|
|
357
|
|
|||||||
Net realized investment gains (losses)
|
4
|
|
|
6
|
|
|
2
|
|
|
(4
|
)
|
|
2
|
|
|
—
|
|
|
10
|
|
|||||||
Income tax (expense) benefit on net realized investment gains (losses)
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
8
|
|
|
(1
|
)
|
|
—
|
|
|
4
|
|
|||||||
Net realized investment gains (losses), after tax
|
3
|
|
|
5
|
|
|
1
|
|
|
4
|
|
|
1
|
|
|
—
|
|
|
14
|
|
|||||||
Net income (loss) from continuing operations
|
$
|
275
|
|
|
$
|
203
|
|
|
$
|
32
|
|
|
$
|
(37
|
)
|
|
$
|
(102
|
)
|
|
$
|
—
|
|
|
$
|
371
|
|
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Reinsurance receivables
|
$
|
697
|
|
|
$
|
660
|
|
|
$
|
192
|
|
|
$
|
534
|
|
|
$
|
2,619
|
|
|
$
|
—
|
|
|
$
|
4,702
|
|
Insurance receivables
|
862
|
|
|
1,068
|
|
|
302
|
|
|
10
|
|
|
3
|
|
|
—
|
|
|
2,245
|
|
|||||||
Deferred acquisition costs
|
306
|
|
|
224
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
621
|
|
|||||||
Goodwill
|
117
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153
|
|
|||||||
Insurance reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Claim and claim adjustment expenses
|
6,365
|
|
|
9,391
|
|
|
1,401
|
|
|
3,248
|
|
|
2,788
|
|
|
—
|
|
|
23,193
|
|
|||||||
Unearned premiums
|
1,794
|
|
|
1,384
|
|
|
506
|
|
|
132
|
|
|
—
|
|
|
(1
|
)
|
|
3,815
|
|
|||||||
Future policy benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
9,360
|
|
|
—
|
|
|
—
|
|
|
9,360
|
|
Six months ended June 30, 2014
|
Specialty
|
|
Commercial
|
|
International
|
|
Life &
Group
Non-Core
|
|
Corporate
& Other
Non-Core
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
Eliminations
|
|
Total
|
||||||||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
$
|
1,401
|
|
|
$
|
1,467
|
|
|
$
|
472
|
|
|
$
|
278
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
3,617
|
|
Net investment income
|
297
|
|
|
392
|
|
|
31
|
|
|
344
|
|
|
12
|
|
|
—
|
|
|
1,076
|
|
|||||||
Other revenues
|
142
|
|
|
18
|
|
|
—
|
|
|
13
|
|
|
7
|
|
|
(2
|
)
|
|
178
|
|
|||||||
Total operating revenues
|
1,840
|
|
|
1,877
|
|
|
503
|
|
|
635
|
|
|
19
|
|
|
(3
|
)
|
|
4,871
|
|
|||||||
Claims, Benefits and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net incurred claims and benefits
|
846
|
|
|
1,178
|
|
|
248
|
|
|
610
|
|
|
(2
|
)
|
|
—
|
|
|
2,880
|
|
|||||||
Policyholders’ dividends
|
2
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||||
Amortization of deferred acquisition costs
|
291
|
|
|
249
|
|
|
109
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
664
|
|
|||||||
Other insurance related expenses
|
132
|
|
|
251
|
|
|
76
|
|
|
63
|
|
|
—
|
|
|
(1
|
)
|
|
521
|
|
|||||||
Other expenses
|
126
|
|
|
15
|
|
|
12
|
|
|
(2
|
)
|
|
20
|
|
|
(2
|
)
|
|
169
|
|
|||||||
Total claims, benefits and expenses
|
1,397
|
|
|
1,698
|
|
|
445
|
|
|
686
|
|
|
18
|
|
|
(3
|
)
|
|
4,241
|
|
|||||||
Operating income (loss) before income tax
|
443
|
|
|
179
|
|
|
58
|
|
|
(51
|
)
|
|
1
|
|
|
—
|
|
|
630
|
|
|||||||
Income tax (expense) benefit on operating income (loss)
|
(147
|
)
|
|
(56
|
)
|
|
(22
|
)
|
|
58
|
|
|
(1
|
)
|
|
—
|
|
|
(168
|
)
|
|||||||
Net operating income (loss)
|
296
|
|
|
123
|
|
|
36
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
462
|
|
|||||||
Net realized investment gains (losses)
|
6
|
|
|
5
|
|
|
—
|
|
|
12
|
|
|
9
|
|
|
—
|
|
|
32
|
|
|||||||
Income tax (expense) benefit on net realized investment gains (losses)
|
(2
|
)
|
|
(4
|
)
|
|
1
|
|
|
(5
|
)
|
|
(3
|
)
|
|
—
|
|
|
(13
|
)
|
|||||||
Net realized investment gains (losses), after tax
|
4
|
|
|
1
|
|
|
1
|
|
|
7
|
|
|
6
|
|
|
—
|
|
|
19
|
|
|||||||
Net income (loss) from continuing operations
|
$
|
300
|
|
|
$
|
124
|
|
|
$
|
37
|
|
|
$
|
14
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
481
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Reinsurance receivables
|
$
|
567
|
|
|
$
|
690
|
|
|
$
|
207
|
|
|
$
|
525
|
|
|
$
|
2,753
|
|
|
$
|
—
|
|
|
$
|
4,742
|
|
Insurance receivables
|
778
|
|
|
954
|
|
|
250
|
|
|
13
|
|
|
2
|
|
|
—
|
|
|
1,997
|
|
|||||||
Deferred acquisition costs
|
304
|
|
|
213
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
600
|
|
|||||||
Goodwill
|
117
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
152
|
|
|||||||
Insurance reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Claim and claim adjustment expenses
|
6,229
|
|
|
9,514
|
|
|
1,441
|
|
|
3,183
|
|
|
2,904
|
|
|
—
|
|
|
23,271
|
|
|||||||
Unearned premiums
|
1,763
|
|
|
1,273
|
|
|
431
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|
3,592
|
|
|||||||
Future policy benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
9,490
|
|
|
—
|
|
|
—
|
|
|
9,490
|
|
|||||||
Policyholders’ funds
|
9
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Specialty
|
|
|
|
|
|
|
|
||||||||
Management & Professional Liability
|
$
|
674
|
|
|
$
|
710
|
|
|
$
|
1,371
|
|
|
$
|
1,414
|
|
Surety
|
125
|
|
|
125
|
|
|
245
|
|
|
247
|
|
||||
Warranty & Alternative Risks
|
105
|
|
|
96
|
|
|
205
|
|
|
185
|
|
||||
Specialty revenues
|
904
|
|
|
931
|
|
|
1,821
|
|
|
1,846
|
|
||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||
Middle Market
|
412
|
|
|
412
|
|
|
821
|
|
|
815
|
|
||||
Small Business
|
158
|
|
|
181
|
|
|
323
|
|
|
365
|
|
||||
Other Commercial Insurance
|
313
|
|
|
343
|
|
|
634
|
|
|
702
|
|
||||
Commercial revenues
|
883
|
|
|
936
|
|
|
1,778
|
|
|
1,882
|
|
||||
International
|
|
|
|
|
|
|
|
|
|
||||||
Canada
|
54
|
|
|
70
|
|
|
109
|
|
|
141
|
|
||||
CNA Europe
|
77
|
|
|
83
|
|
|
154
|
|
|
171
|
|
||||
Hardy
|
89
|
|
|
91
|
|
|
163
|
|
|
191
|
|
||||
International revenues
|
220
|
|
|
244
|
|
|
426
|
|
|
503
|
|
||||
Life & Group Non-Core revenues
|
311
|
|
|
316
|
|
|
638
|
|
|
647
|
|
||||
Corporate & Other Non-Core revenues
|
10
|
|
|
15
|
|
|
18
|
|
|
28
|
|
||||
Eliminations
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||
Total revenues
|
$
|
2,327
|
|
|
$
|
2,440
|
|
|
$
|
4,679
|
|
|
$
|
4,903
|
|
|
Periods ended June 30, 2014
|
||||||
(In millions)
|
Three Months
|
|
Six Months
|
||||
Revenues
|
|
|
|
||||
Net investment income
|
$
|
39
|
|
|
$
|
80
|
|
Net realized investment gains
|
1
|
|
|
2
|
|
||
Total revenues
|
40
|
|
|
82
|
|
||
Claims, Benefits and Expenses
|
|
|
|
||||
Insurance claims and policyholders' benefits
|
32
|
|
|
63
|
|
||
Other operating expenses
|
1
|
|
|
2
|
|
||
Total claims, benefits and expenses
|
33
|
|
|
65
|
|
||
Income before income tax
|
7
|
|
|
17
|
|
||
Income tax expense
|
(1
|
)
|
|
(4
|
)
|
||
Income from discontinued operations, net of income tax
|
6
|
|
|
13
|
|
||
Impairment loss on sale, net of income tax benefit of $- and $41
|
—
|
|
|
(214
|
)
|
||
Income (loss) from discontinued operations
|
$
|
6
|
|
|
$
|
(201
|
)
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Operating Revenues
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
$
|
1,735
|
|
|
$
|
1,811
|
|
|
$
|
3,422
|
|
|
$
|
3,617
|
|
Net investment income
|
500
|
|
|
550
|
|
|
1,058
|
|
|
1,076
|
|
||||
Other revenues
|
92
|
|
|
93
|
|
|
189
|
|
|
178
|
|
||||
Total operating revenues
|
2,327
|
|
|
2,454
|
|
|
4,669
|
|
|
4,871
|
|
||||
Claims, Benefits and Expenses
|
|
|
|
|
|
|
|
||||||||
Net incurred claims and benefits
|
1,466
|
|
|
1,437
|
|
|
2,801
|
|
|
2,880
|
|
||||
Policyholders' dividends
|
3
|
|
|
4
|
|
|
7
|
|
|
7
|
|
||||
Amortization of deferred acquisition costs
|
314
|
|
|
335
|
|
|
617
|
|
|
664
|
|
||||
Other insurance related expenses
|
259
|
|
|
259
|
|
|
527
|
|
|
521
|
|
||||
Other expenses
|
121
|
|
|
41
|
|
|
250
|
|
|
169
|
|
||||
Total claims, benefits and expenses
|
2,163
|
|
|
2,076
|
|
|
4,202
|
|
|
4,241
|
|
||||
Operating income before income tax
|
164
|
|
|
378
|
|
|
467
|
|
|
630
|
|
||||
Income tax expense on operating income
|
(32
|
)
|
|
(106
|
)
|
|
(110
|
)
|
|
(168
|
)
|
||||
Net operating income
|
132
|
|
|
272
|
|
|
357
|
|
|
462
|
|
||||
Net realized investment gains (losses)
|
—
|
|
|
(14
|
)
|
|
10
|
|
|
32
|
|
||||
Income tax (expense) benefit on net realized investment gains (losses)
|
6
|
|
|
3
|
|
|
4
|
|
|
(13
|
)
|
||||
Net realized investment gains (losses), after tax
|
6
|
|
|
(11
|
)
|
|
14
|
|
|
19
|
|
||||
Income from continuing operations
|
138
|
|
|
261
|
|
|
371
|
|
|
481
|
|
||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
6
|
|
|
—
|
|
|
(201
|
)
|
||||
Net income
|
$
|
138
|
|
|
$
|
267
|
|
|
$
|
371
|
|
|
$
|
280
|
|
•
|
Insurance Reserves
|
•
|
Reinsurance and Insurance Receivables
|
•
|
Valuation of Investments and Impairment of Securities
|
•
|
Long Term Care Policies
|
•
|
Pension and Postretirement Benefit Obligations
|
•
|
Income Taxes
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions, except ratios)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net written premiums
|
$
|
672
|
|
|
$
|
701
|
|
|
$
|
1,370
|
|
|
$
|
1,414
|
|
Net earned premiums
|
689
|
|
|
709
|
|
|
1,369
|
|
|
1,401
|
|
||||
Net investment income
|
134
|
|
|
153
|
|
|
289
|
|
|
297
|
|
||||
Net operating income
|
137
|
|
|
167
|
|
|
272
|
|
|
296
|
|
||||
Net realized investment gains (losses), after tax
|
—
|
|
|
(4
|
)
|
|
3
|
|
|
4
|
|
||||
Net income
|
137
|
|
|
163
|
|
|
275
|
|
|
300
|
|
||||
Ratios
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expense
|
60.3
|
%
|
|
57.0
|
%
|
|
61.7
|
%
|
|
60.4
|
%
|
||||
Expense
|
30.7
|
|
|
30.3
|
|
|
31.0
|
|
|
30.2
|
|
||||
Dividend
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
||||
Combined
|
91.2
|
%
|
|
87.5
|
%
|
|
92.9
|
%
|
|
90.8
|
%
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
(In millions)
|
|
||||||
Gross Case Reserves
|
$
|
2,072
|
|
|
$
|
2,136
|
|
Gross IBNR Reserves
|
4,293
|
|
|
4,093
|
|
||
Total Gross Carried Claim and Claim Adjustment Expense Reserves
|
$
|
6,365
|
|
|
$
|
6,229
|
|
Net Case Reserves
|
$
|
1,838
|
|
|
$
|
1,929
|
|
Net IBNR Reserves
|
3,840
|
|
|
3,726
|
|
||
Total Net Carried Claim and Claim Adjustment Expense Reserves
|
$
|
5,678
|
|
|
$
|
5,655
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions, except ratios)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net written premiums
|
$
|
717
|
|
|
$
|
692
|
|
|
$
|
1,476
|
|
|
$
|
1,499
|
|
Net earned premiums
|
703
|
|
|
732
|
|
|
1,381
|
|
|
1,467
|
|
||||
Net investment income
|
169
|
|
|
201
|
|
|
373
|
|
|
392
|
|
||||
Net operating income
|
78
|
|
|
49
|
|
|
198
|
|
|
123
|
|
||||
Net realized investmen
t gains (losses)
, after tax
|
4
|
|
|
(7
|
)
|
|
5
|
|
|
1
|
|
||||
Net income
|
82
|
|
|
42
|
|
|
203
|
|
|
124
|
|
||||
Ratios
|
|
|
|
|
|
|
|
|
|
||||||
Loss and loss adjustment expense
|
72.1
|
%
|
|
83.7
|
%
|
|
69.6
|
%
|
|
80.4
|
%
|
||||
Expense
|
34.9
|
|
|
34.1
|
|
|
35.4
|
|
|
34.0
|
|
||||
Dividend
|
0.2
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
||||
Combined
|
107.2
|
%
|
|
118.1
|
%
|
|
105.3
|
%
|
|
114.7
|
%
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
(In millions)
|
|
||||||
Gross Case Reserves
|
$
|
5,264
|
|
|
$
|
5,298
|
|
Gross IBNR Reserves
|
4,127
|
|
|
4,216
|
|
||
Total Gross Carried Claim and Claim Adjustment Expense Reserves
|
$
|
9,391
|
|
|
$
|
9,514
|
|
Net Case Reserves
|
$
|
4,889
|
|
|
$
|
4,947
|
|
Net IBNR Reserves
|
3,867
|
|
|
3,906
|
|
||
Total Net Carried Claim and Claim Adjustment Expense Reserves
|
$
|
8,756
|
|
|
$
|
8,853
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions, except ratios)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net written premiums
|
$
|
249
|
|
|
$
|
261
|
|
|
$
|
461
|
|
|
$
|
508
|
|
Net earned premiums
|
207
|
|
|
231
|
|
|
398
|
|
|
472
|
|
||||
Net investment income
|
13
|
|
|
16
|
|
|
27
|
|
|
31
|
|
||||
Net operating income
|
22
|
|
|
20
|
|
|
31
|
|
|
36
|
|
||||
Net realized investment gains, after tax
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Net income
|
22
|
|
|
21
|
|
|
32
|
|
|
37
|
|
||||
Ratios
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expense
|
55.0
|
%
|
|
50.8
|
%
|
|
57.7
|
%
|
|
52.5
|
%
|
||||
Expense
|
37.2
|
|
|
39.1
|
|
|
37.4
|
|
|
39.2
|
|
||||
Dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Combined
|
92.2
|
%
|
|
89.9
|
%
|
|
95.1
|
%
|
|
91.7
|
%
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
(In millions)
|
|
||||||
Gross Case Reserves
|
$
|
644
|
|
|
$
|
752
|
|
Gross IBNR Reserves
|
757
|
|
|
689
|
|
||
Total Gross Carried Claim and Claim Adjustment Expense Reserves
|
$
|
1,401
|
|
|
$
|
1,441
|
|
Net Case Reserves
|
$
|
525
|
|
|
$
|
598
|
|
Net IBNR Reserves
|
722
|
|
|
663
|
|
||
Total Net Carried Claim and Claim Adjustment Expense Reserves
|
$
|
1,247
|
|
|
$
|
1,261
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net earned premiums
|
$
|
137
|
|
|
$
|
139
|
|
|
$
|
275
|
|
|
$
|
278
|
|
Net investment income
|
179
|
|
|
173
|
|
|
358
|
|
|
344
|
|
||||
Net operating income (loss)
|
(24
|
)
|
|
9
|
|
|
(41
|
)
|
|
7
|
|
||||
Net realized investment gains (losses), after tax
|
1
|
|
|
(3
|
)
|
|
4
|
|
|
7
|
|
||||
Net income (loss)
|
(23
|
)
|
|
6
|
|
|
(37
|
)
|
|
14
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net investment income
|
$
|
5
|
|
|
$
|
7
|
|
|
$
|
11
|
|
|
$
|
12
|
|
Interest expense
|
39
|
|
|
46
|
|
|
78
|
|
|
90
|
|
||||
Net operating income (loss)
|
(81
|
)
|
|
27
|
|
|
(103
|
)
|
|
—
|
|
||||
Net realized investment gains (losses), after tax
|
1
|
|
|
2
|
|
|
1
|
|
|
6
|
|
||||
Net income (loss)
|
(80
|
)
|
|
29
|
|
|
(102
|
)
|
|
6
|
|
(In millions)
|
June 30,
2015 |
|
December 31,
2014 |
||||
Gross Case Reserves
|
$
|
1,586
|
|
|
$
|
1,189
|
|
Gross IBNR Reserves
|
1,202
|
|
|
1,715
|
|
||
Total Gross Carried Claim and Claim Adjustment Expense Reserves
|
$
|
2,788
|
|
|
$
|
2,904
|
|
Net Case Reserves
|
$
|
142
|
|
|
$
|
144
|
|
Net IBNR Reserves
|
162
|
|
|
171
|
|
||
Total Net Carried Claim and Claim Adjustment Expense Reserves
|
$
|
304
|
|
|
$
|
315
|
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions, except yields)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Taxable
|
$
|
352
|
|
|
$
|
350
|
|
|
$
|
694
|
|
|
$
|
702
|
|
Tax-Exempt
|
100
|
|
|
101
|
|
|
201
|
|
|
201
|
|
||||
Total fixed maturity securities
|
452
|
|
|
451
|
|
|
895
|
|
|
903
|
|
||||
Limited partnership investments
|
48
|
|
|
97
|
|
|
162
|
|
|
170
|
|
||||
Other, net of investment expense
|
—
|
|
|
2
|
|
|
1
|
|
|
3
|
|
||||
Pretax net investment income
|
$
|
500
|
|
|
$
|
550
|
|
|
$
|
1,058
|
|
|
$
|
1,076
|
|
After-tax net investment income
|
$
|
356
|
|
|
$
|
391
|
|
|
$
|
750
|
|
|
$
|
762
|
|
|
|
|
|
|
|
|
|
||||||||
Effective income yield for the fixed maturity securities portfolio, pretax
|
4.9
|
%
|
|
4.9
|
%
|
|
4.8
|
%
|
|
4.9
|
%
|
||||
Effective income yield for the fixed maturity securities portfolio, after tax
|
3.5
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
Periods ended June 30
|
Three Months
|
|
Six Months
|
||||||||||||
(In millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Corporate and other bonds
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
16
|
|
|
$
|
22
|
|
States, municipalities and political subdivisions
|
(16
|
)
|
|
(5
|
)
|
|
(20
|
)
|
|
18
|
|
||||
Asset-backed
|
—
|
|
|
(24
|
)
|
|
3
|
|
|
(23
|
)
|
||||
Foreign government
|
1
|
|
|
2
|
|
|
1
|
|
|
2
|
|
||||
Total fixed maturity securities
|
(12
|
)
|
|
(19
|
)
|
|
—
|
|
|
19
|
|
||||
Equity securities
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
5
|
|
||||
Derivative financial instruments
|
11
|
|
|
1
|
|
|
10
|
|
|
1
|
|
||||
Short term investments and other
|
2
|
|
|
4
|
|
|
1
|
|
|
7
|
|
||||
Net realized investment gains (losses)
|
—
|
|
|
(14
|
)
|
|
10
|
|
|
32
|
|
||||
Income tax (expense) benefit on net realized investment gains (losses)
|
6
|
|
|
3
|
|
|
4
|
|
|
(13
|
)
|
||||
Net realized investment gains (losses), after tax
|
$
|
6
|
|
|
$
|
(11
|
)
|
|
$
|
14
|
|
|
$
|
19
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||
(In millions)
|
Estimated Fair Value
|
|
%
|
|
Estimated Fair Value
|
|
%
|
||||||
U.S. Government, Government agencies and Government-sponsored enterprises
|
$
|
3,722
|
|
|
9
|
%
|
|
$
|
3,882
|
|
|
10
|
%
|
AAA rated
|
2,697
|
|
|
7
|
|
|
2,850
|
|
|
7
|
|
||
AA and A rated
|
19,080
|
|
|
48
|
|
|
19,998
|
|
|
49
|
|
||
BBB rated
|
11,305
|
|
|
28
|
|
|
11,093
|
|
|
27
|
|
||
Non-investment grade
|
3,045
|
|
|
8
|
|
|
2,945
|
|
|
7
|
|
||
Total
|
$
|
39,849
|
|
|
100
|
%
|
|
$
|
40,768
|
|
|
100
|
%
|
June 30, 2015
|
Estimated Fair Value
|
|
%
|
|
Gross Unrealized Losses
|
|
%
|
||||||
(In millions)
|
|
|
|
||||||||||
U.S. Government, Government agencies and Government-sponsored enterprises
|
$
|
126
|
|
|
2
|
%
|
|
$
|
2
|
|
|
1
|
%
|
AAA
|
384
|
|
|
6
|
|
|
11
|
|
|
7
|
|
||
AA
|
1,289
|
|
|
20
|
|
|
29
|
|
|
18
|
|
||
A
|
1,096
|
|
|
17
|
|
|
25
|
|
|
16
|
|
||
BBB
|
2,577
|
|
|
40
|
|
|
59
|
|
|
38
|
|
||
Non-Investment Grade
|
960
|
|
|
15
|
|
|
31
|
|
|
20
|
|
||
Total
|
$
|
6,432
|
|
|
100
|
%
|
|
$
|
157
|
|
|
100
|
%
|
June 30, 2015
|
Estimated Fair Value
|
|
%
|
|
Gross Unrealized Losses
|
|
%
|
||||||
(In millions)
|
|
|
|
||||||||||
Due in one year or less
|
$
|
113
|
|
|
2
|
%
|
|
$
|
4
|
|
|
3
|
%
|
Due after one year through five years
|
808
|
|
|
13
|
|
|
18
|
|
|
11
|
|
||
Due after five years through ten years
|
3,376
|
|
|
52
|
|
|
72
|
|
|
46
|
|
||
Due after ten years
|
2,135
|
|
|
33
|
|
|
63
|
|
|
40
|
|
||
Total
|
$
|
6,432
|
|
|
100
|
%
|
|
$
|
157
|
|
|
100
|
%
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||
(In millions)
|
Estimated Fair Value
|
|
Effective
Duration
(In years)
|
|
Estimated Fair Value
|
|
Effective
Duration (In years) |
||||||
Investments supporting Life & Group Non-Core
|
$
|
14,540
|
|
|
10.5
|
|
|
$
|
14,668
|
|
|
10.5
|
|
Other interest sensitive investments
|
26,906
|
|
|
4.4
|
|
|
27,748
|
|
|
4.0
|
|
||
Total
|
$
|
41,446
|
|
|
6.6
|
|
|
$
|
42,416
|
|
|
6.3
|
|
(In millions)
|
June 30,
2015 |
|
December 31,
2014 |
||||
Short term investments:
|
|
|
|
||||
Commercial paper
|
$
|
882
|
|
|
$
|
922
|
|
U.S. Treasury securities
|
501
|
|
|
466
|
|
||
Money market funds
|
150
|
|
|
206
|
|
||
Other
|
139
|
|
|
112
|
|
||
Total short term investments
|
$
|
1,672
|
|
|
$
|
1,706
|
|
•
|
the risks and uncertainties associated with our insurance reserves, as outlined in the Critical Accounting Estimates and the Reserves - Estimates and Uncertainties sections of our Annual Report on Form 10-K, including the sufficiency of the reserves and the possibility for future increases, which would be reflected in the results of operations in the period that the need for such adjustment is determined;
|
•
|
the risk that the other parties to the transaction in which, subject to certain limitations, we ceded our legacy A&EP liabilities will not fully perform their obligations to CNA, the uncertainty in estimating loss reserves for A&EP liabilities and the possible continued exposure of CNA to liabilities for A&EP claims that are not covered under the terms of the transaction;
|
•
|
the performance of reinsurance companies under reinsurance contracts with us; and
|
•
|
the risks and uncertainties associated with potential acquisitions and divestitures, including the consummation of such transactions, the successful integration of acquired operations and the potential for subsequent impairment of goodwill or intangible assets.
|
•
|
the impact of competitive products, policies and pricing and the competitive environment in which we operate, including changes in our book of business;
|
•
|
product and policy availability and demand and market responses, including the level of ability to obtain rate increases and decline or non-renew underpriced accounts, to achieve premium targets and profitability and to realize growth and retention estimates;
|
•
|
general economic and business conditions, including recessionary conditions that may decrease the size and number of our insurance customers and create additional losses to our lines of business, especially those that provide management and professional liability insurance, as well as surety bonds, to businesses engaged in real estate, financial services and professional services and inflationary pressures on medical care costs, construction costs and other economic sectors that increase the severity of claims;
|
•
|
conditions in the capital and credit markets, including continuing uncertainty and instability in these markets, as well as the overall economy, and their impact on the returns, types, liquidity and valuation of our investments;
|
•
|
conditions in the capital and credit markets that may limit our ability to raise significant amounts of capital on favorable terms; and
|
•
|
the possibility of changes in our ratings by ratings agencies, including the inability to access certain markets or distribution channels and the required collateralization of future payment obligations as a result of such changes, and changes in rating agency policies and practices.
|
•
|
regulatory initiatives and compliance with governmental regulations, judicial interpretations within the regulatory framework, including interpretation of policy provisions, decisions regarding coverage and theories of liability, trends in litigation and the outcome of any litigation involving us and rulings and changes in tax laws and regulations;
|
•
|
regulatory limitations, impositions and restrictions upon us, including with respect to our ability to increase premium rates, and the effects of assessments and other surcharges for guaranty funds and second-injury funds, other mandatory pooling arrangements and future assessments levied on insurance companies; and
|
•
|
regulatory limitations and restrictions, including limitations upon our ability to receive dividends from our insurance subsidiaries, imposed by regulatory authorities, including regulatory capital adequacy standards.
|
•
|
weather and other natural physical events, including the severity and frequency of storms, hail, snowfall and other winter conditions, natural disasters such as hurricanes and earthquakes, as well as climate change, including effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, rain, hail and snow;
|
•
|
regulatory requirements imposed by coastal state regulators in the wake of hurricanes or other natural disasters, including limitations on the ability to exit markets or to non-renew, cancel or change terms and conditions in policies, as well as mandatory assessments to fund any shortfalls arising from the inability of quasi-governmental insurers to pay claims;
|
•
|
man-made disasters, including the possible occurrence of terrorist attacks, the unpredictability of the nature, targets, severity or frequency of such events and the effect of the absence or insufficiency of applicable terrorism legislation on coverages; and
|
•
|
the occurrence of epidemics.
|
|
|
CNA Financial Corporation
|
|
|
|
Dated:
August 4, 2015
|
By
|
/s/ D. Craig Mense
|
|
|
D. Craig Mense
Executive Vice President and
Chief Financial Officer
|
Description of Exhibit
|
Exhibit Number
|
|
|
CNA Supplemental Executive Retirement Plan, restated as of January 1, 2015
|
10.5
|
|
|
CNA Supplemental Executive Savings and Capital Accumulation Plan, restated as of January 1, 2014
|
10.6
|
|
|
First Amendment to the CNA Supplemental Executive Savings and Capital Accumulation Plan, dated May 28, 2015
|
10.6.1
|
|
|
Certification of Chief Executive Officer
|
31.1
|
|
|
Certification of Chief Financial Officer
|
31.2
|
|
|
Written Statement of the Chief Executive Officer of CNA Financial Corporation Pursuant to 18 U.S.C. Section 1350 (As adopted by Section 906 of the Sarbanes-Oxley Act of 2002)
|
32.1
|
|
|
Written Statement of the Chief Financial Officer of CNA Financial Corporation Pursuant to 18 U.S.C. Section 1350 (As adopted by Section 906 of the Sarbanes-Oxley Act of 2002)
|
32.2
|
|
|
XBRL Instance Document
|
101.INS
|
|
|
XBRL Taxonomy Extension Schema
|
101.SCH
|
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.CAL
|
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.DEF
|
|
|
XBRL Taxonomy Label Linkbase
|
101.LAB
|
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
101.PRE
|
ARTICLE I
GENERAL PROVISIONS
..........................................................................
|
1
|
|
1.1
Purpose
.................................................................................................................
|
1
|
|
1.2
Effective Date
.......................................................................................................
|
1
|
|
1.3
Company and Employers
......................................................................................
|
1
|
|
1.4
Plan Year
...............................................................................................................
|
1
|
|
1.5
Definitions and Rules of Construction
.................................................................
|
1
|
|
|
|
|
ARTICLE II
ELIGIBILITY AND BENEFITS
...............................................................
|
4
|
|
2.1
Eligibility
..............................................................................................................
|
4
|
|
2.2
Benefits
.................................................................................................................
|
4
|
|
2.3
Vesting
..................................................................................................................
|
5
|
|
2.4
Time and Form of Payment
..................................................................................
|
6
|
|
2.5
Death Benefits
......................................................................................................
|
8
|
|
|
|
|
ARTICLE III
PAYMENT OF BENEFITS
.......................................................................
|
11
|
|
3.1
Source of Payment
................................................................................................
|
11
|
|
3.2
Establishment of Trust
..........................................................................................
|
11
|
|
3.3
Withholding and Payroll Taxes
.............................................................................
|
11
|
|
3.4
Payment on Behalf of Disabled or Incompetent Persons
.....................................
|
12
|
|
3.5
Missing Participants or Beneficiaries
...................................................................
|
12
|
|
3.6
Other Permitted Distributions
...............................................................................
|
12
|
|
3.7
Recovery of Erroneous Distributions
...................................................................
|
12
|
|
|
|
|
ARTICLE IV
ADMINISTRATION
.................................................................................
|
14
|
|
4.1
Plan Administrator
................................................................................................
|
14
|
|
4.2
Administrator’s Powers
........................................................................................
|
14
|
|
4.3
Binding Effect of Rulings
.....................................................................................
|
15
|
|
4.4
Claims Procedure
..................................................................................................
|
15
|
|
4.5
Indemnity
..............................................................................................................
|
17
|
|
|
|
|
ARTICLE V
AMENDMENT AND TERMINATION OF PLAN
...................................
|
18
|
|
5.1
Amendment
..........................................................................................................
|
18
|
|
5.2
Termination
...........................................................................................................
|
18
|
|
|
|
|
ARTICLE VI
MISCELLANEOUS
..................................................................................
|
19
|
|
6.1
Status of Plan
........................................................................................................
|
19
|
|
6.2
Nonassignability
...................................................................................................
|
19
|
|
6.3
No Contract of Employment
.................................................................................
|
19
|
|
6.4
Participant Litigation
............................................................................................
|
19
|
|
6.5
Participant and Beneficiary Duties
.......................................................................
|
19
|
|
6.6
Governing Law
.....................................................................................................
|
20
|
|
6.7
Validity
..................................................................................................................
|
20
|
|
6.8
Notices
..................................................................................................................
|
20
|
|
6.9
Successors
.............................................................................................................
|
20
|
|
APPENDIX A FULL VESTING OF PARTICIPANTS AFFECTED BY CERTAIN EVENTS............................................................................................................................
|
22
|
|
(i)
|
Except as otherwise provided below, no part of the Post-2004 Portion of a Participant’s benefit shall be payable to any Participant until he has incurred a separation from service as defined in Code §409A.
|
(ii)
|
No Post-2004 portion of a benefit shall be payable to a Participant who is a designated employee, as defined in Code §409A, until the first day of the seventh month after the month in which he has incurred a separation from service. Any portion of benefit payable to a designated employee that is required to be delayed by reason of this paragraph (c)(ii) shall be calculated as of the date on which it would otherwise have been paid and shall bear interest from such date until the date of payment at the applicable interest rate used to calculate the amount of the benefit. If the Participant dies before the benefit is paid, the benefit shall be paid to the Participant’s Beneficiary not more than ninety (90) days after the date of death. If the Participant was a Choice 1 Participant not otherwise permitted to designate a Beneficiary, the Administrator may permit the Participant to designate a Beneficiary for this purpose, and otherwise the benefit shall be paid to the Participant’s surviving spouse, if any, and otherwise to the Participant’s estate. The identification of Participants as designated employees shall be made as of December 31 of each year by Loews Corporation based upon the employees of the controlled group of which Loews Corporation is the common parent, and a Participant identified as a designated employee as of any December 31 shall be subject to this provisions of this paragraph (c)(ii) if the Participant incurs a separation from service during the twelve month period commencing on the following April 1.
|
(iii)
|
In no event shall the distribution of any Post-2004 benefit be accelerated to a time earlier than which it would otherwise have been paid, whether by amendment of the Plan, exercise of the Administrator’s discretion, or otherwise, except as permitted by regulations issued pursuant to Code §409A.
|
(iv)
|
In the event that the Administrator, in its sole discretion, determines that any time or form of distribution provided for in the Plan, or the existence of a right to elect a different time or form of distribution, would cause the Plan to fail to meet the requirements of Code §409A, or otherwise
|
(v)
|
Any SERP Agreement that provides for a different form or time of payment shall specify the time and manner of payment, without Employer or Participant discretion, at the time the SERP Agreement is entered into, and shall otherwise comply with the requirements of this paragraph (d); provided that, in addition to a severance from service, a SERP Agreement may provide for benefits to be paid at a specified time or pursuant to a fixed schedule set forth in the SERP Agreement, upon the occurrence of a change in ownership or control of the Participant’s Employer, or in a substantial portion of its assets, as defined in Code §409A, or upon the occurrence of an unforeseeable emergency, as defined in Code §409A; and provided further that a SERP Agreement may permit a Participant to elect to further defer the payment of his benefit, or a SERP Agreement may be amended after December 31, 2008, to change the time or form of payment, provided that any such change does not take effect for at least twelve months and the payment is deferred by at least five years, and otherwise complies with the requirements of Code §409A.
|
(vi)
|
A Participant’s benefit accrued under the CIC SERP, as described in Section 2.2(d), shall be paid at the same time and in the same form as the Participant’s Frozen CIC Benefit, subject to the discretion of the Administrator, as successor to the Continental Corporation Retirement Plan Committee, to pay such benefit in a lump sum at any time pursuant to Section 3.4 of the CIC SERP (without regard to the provisions thereof relating to lump sum payments within 30 days following a Change in Control.) The entire amount of a Participant’s CIC SERP benefit shall be considered part of the pre-2005 portion of the Participant’s benefit.
|
Transaction
|
Closing Date
|
Exceptions/Special Rules
|
Sale of Life Reinsurance Business Unit to MARC
|
12/31/00
|
None
|
Sale of CNA Credit Collection Agency, Inc., to Coface
|
12/31/02
|
None
|
Sale of CNA Group Operations to Hartford Financial Services Group
|
12/31/03
|
None
|
Sale of individual life insurance business to Swiss Re Life & Health America
|
App. 3/31/04
|
None
|
ARTICLE I
GENERAL PROVISIONS
...........................................................................
|
1
|
|
1.1
Purpose
.......................................................................................................
|
1
|
|
1.2
Effective Date
.............................................................................................
|
1
|
|
1.3
Company and Employers
............................................................................
|
1
|
|
1.4
Plan Year
.....................................................................................................
|
1
|
|
1.5
Definitions and Rules of Construction
.......................................................
|
1
|
|
|
|
|
ARTICLE II
ELIGIBILITY AND BENEFITS
...............................................................
|
5
|
|
2.1
Eligibility
....................................................................................................
|
5
|
|
2.2
Elective Deferrals
.......................................................................................
|
6
|
|
2.3
Employer Contributions
.............................................................................
|
8
|
|
2.4
Earnings
......................................................................................................
|
9
|
|
2.5
Vesting
........................................................................................................
|
10
|
|
2.6
Time and Form of Payment
........................................................................
|
10
|
|
2.7
Death Benefits
............................................................................................
|
12
|
|
2.8
Excess Benefit Plan Participants
................................................................
|
13
|
|
2.9
Former Participants in Surety Plans
...........................................................
|
13
|
|
|
|
|
ARTICLE III
PAYMENT OF BENEFITS
.......................................................................
|
16
|
|
3.1
Source of Payment
......................................................................................
|
16
|
|
3.2
Establishment of Trust
................................................................................
|
16
|
|
3.3
Withdrawals for Financial Emergency
.......................................................
|
16
|
|
3.4
Withholding and Payroll Taxes
...................................................................
|
17
|
|
3.5
Payment on Behalf of Disabled or Incompetent Persons
...........................
|
17
|
|
3.6
Missing Participants or Beneficiaries
.........................................................
|
18
|
|
3.7
Other Permitted Distributions
.....................................................................
|
18
|
|
3.8
Recovery of Erroneous Distributions
.........................................................
|
18
|
|
|
|
|
ARTICLE IV
ADMINISTRATION
.................................................................................
|
19
|
|
4.1
Administrator
..............................................................................................
|
19
|
|
4.2
Administrator’s Powers
...............................................................................
|
19
|
|
4.3
Binding Effect of Rulings
............................................................................
|
20
|
|
4.4
Claims Procedure
........................................................................................
|
20
|
|
4.5
Indemnity
....................................................................................................
|
22
|
|
|
|
|
ARTICLE V
AMENDMENT AND TERMINATION OF PLAN
...................................
|
23
|
|
5.1
Amendment
................................................................................................
|
23
|
|
5.2
Termination
.................................................................................................
|
23
|
|
|
ending prior to December 25, 2011, were calculated in accordance with the terms of the 2005 Surety Plan, credited initially to the Surety Participant’s account in the 2005 Surety Plan, and were transferred to the Plan on January 3, 2012, as described in Section 2.9(b) above.
|
Transaction
|
Closing Date
|
Exceptions/Special Rules
|
Sale of Life Reinsurance Business Unit to MARC
|
12/31/00
|
None
|
Sale of CNA Credit Collection Agency, Inc., to Coface
|
12/31/02
|
None
|
Sale of unbundled risk management business of RSKCo Services, Inc to Cunningham Lindsey US
|
6/2/03
|
None
|
Sale of Smith System to McFadden Brothers
|
4/29/03
|
None
|
Sale of CNA Group Operations to Hartford Financial Services Group
|
12/31/03
|
None
|
Sale of individual life insurance business to Swiss Re Life & Health America
|
App. 3/31/04
|
None
|
“(iii)
|
An Employee who will be a Choice 2 Participant shall be eligible to participate, solely for purposes of being credited with Basic and Performance Contributions, in the first Plan Year in which his or her Retirement Plan Compensation exceeds the limitation of Code §401(a)(17). Effective July 1, 2015, Employees who are Choice 1 Participants are also eligible to participate for such purpose in the first Plan Year in which his or her Retirement Plan Compensation exceeds the limitation of Code §401(a)(17) (or if his or her Retirement Plan Compensation in 2015 exceeds such limit, including the portion paid prior to July 1, 2015, regardless of whether it exceeded such limit in prior Plan Years).”
|
2.
|
Effective July 1, 2015, Section 2.3(b) and (c) are amended to read as follows:
|
“(ii)
|
In the case of (A) a Choice 2 Participant, not later than 30 days after the date of the paycheck that causes his or her Retirement Plan Compensation to exceed the §401(a)(17) limit in the first year in which his or her Retirement Plan Compensation exceeds such limit or (B) a Choice 1 Participant, not later than 30 days after the date of the paycheck that causes his or her Retirement Plan Compensation to exceed such limit in the first year beginning with 2015 in which his or her Retirement Plan Compensation exceeds such limit or, if later, July 1, 2015; provided in either case, however, that if such Participant has deferred compensation or accrued a benefit under any nonqualified deferred compensation plan in any prior year (within the meaning of the last sentence of Treasury Regulation §1.409A-2(a)(7)(iii)), the payment election shall not apply to any deferred compensation for services provided prior to the date of the election (including the Participant’s annual bonus for the prior year), and such deferred compensation and the earnings thereon shall instead be paid as if no election had been made. ”
|
1.
|
I have reviewed this quarterly report on Form 10-Q of CNA Financial Corporation;
|
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 officers 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
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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 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 officers 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 registrant’s board of directors (or persons performing the equivalent function):
|
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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Dated:
|
August 4, 2015
|
By
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/s/ Thomas F. Motamed
|
|
|
|
|
Thomas F. Motamed
|
|
|
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of CNA Financial Corporation;
|
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 officers 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 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 officers 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 registrant’s board of directors (or persons performing the equivalent function):
|
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.
|
Dated:
|
August 4, 2015
|
By
|
/s/ D. Craig Mense
|
|
|
|
|
D. Craig Mense
|
|
|
|
|
Chief Financial Officer
|
|
•
|
the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed on the date hereof with the Securities and Exchange Commission (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
August 4, 2015
|
By
|
/s/ Thomas F. Motamed
|
|
|
|
|
Thomas F. Motamed
|
|
|
|
|
Chief Executive Officer
|
|
•
|
the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed on the date hereof with the Securities and Exchange Commission (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
August 4, 2015
|
By
|
/s/ D. Craig Mense
|
|
|
|
|
D. Craig Mense
|
|
|
|
|
Chief Financial Officer
|
|