|
[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 [ ]
|
|
Emerging growth company [ ]
|
Class
|
|
Outstanding at April 27, 2017
|
Common Stock, Par value $2.50
|
|
270,980,108
|
Three months ended March 31
|
|
|
|
||||
(In millions, except per share data)
|
2017
|
|
2016
|
||||
Revenues
|
|
|
|
||||
Net earned premiums
|
$
|
1,645
|
|
|
$
|
1,699
|
|
Net investment income
|
545
|
|
|
435
|
|
||
Net realized investment gains (losses):
|
|
|
|
|
|||
Other-than-temporary impairment losses
|
(2
|
)
|
|
(23
|
)
|
||
Other net realized investment gains (losses)
|
38
|
|
|
(13
|
)
|
||
Net realized investment gains (losses)
|
36
|
|
|
(36
|
)
|
||
Other revenues
|
104
|
|
|
97
|
|
||
Total revenues
|
2,330
|
|
|
2,195
|
|
||
Claims, Benefits and Expenses
|
|
|
|
||||
Insurance claims and policyholders’ benefits
|
1,293
|
|
|
1,408
|
|
||
Amortization of deferred acquisition costs
|
305
|
|
|
307
|
|
||
Other operating expenses
|
346
|
|
|
381
|
|
||
Interest
|
43
|
|
|
42
|
|
||
Total claims, benefits and expenses
|
1,987
|
|
|
2,138
|
|
||
Income before income tax
|
343
|
|
|
57
|
|
||
Income tax (expense) benefit
|
(83
|
)
|
|
9
|
|
||
Net income
|
$
|
260
|
|
|
$
|
66
|
|
|
|
|
|
||||
Basic earnings per share
|
$
|
0.96
|
|
|
$
|
0.25
|
|
|
|
|
|
||||
Diluted earnings per share
|
$
|
0.96
|
|
|
$
|
0.24
|
|
|
|
|
|
||||
Dividends declared per share
|
$
|
2.25
|
|
|
$
|
2.25
|
|
|
|
|
|
||||
Weighted Average Outstanding Common Stock and Common Stock Equivalents
|
|
|
|
||||
Basic
|
270.7
|
|
|
270.3
|
|
||
Diluted
|
271.7
|
|
|
270.9
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Comprehensive Income
|
|
|
|
||||
Net income
|
$
|
260
|
|
|
$
|
66
|
|
Other Comprehensive Income, Net of Tax
|
|
|
|
||||
Changes in:
|
|
|
|
||||
Net unrealized gains on investments with other-than-temporary impairments
|
(4
|
)
|
|
5
|
|
||
Net unrealized gains on other investments
|
67
|
|
|
234
|
|
||
Net unrealized gains on investments
|
63
|
|
|
239
|
|
||
Foreign currency translation adjustment
|
11
|
|
|
14
|
|
||
Pension and postretirement benefits
|
7
|
|
|
6
|
|
||
Other comprehensive income, net of tax
|
81
|
|
|
259
|
|
||
Total comprehensive income
|
$
|
341
|
|
|
$
|
325
|
|
(In millions, except share data)
|
March 31, 2017 (Unaudited)
|
|
December 31,
2016 |
||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturity securities at fair value (amortized cost of $38,269 and $38,361)
|
$
|
40,980
|
|
|
$
|
40,905
|
|
Equity securities at fair value (cost of $112 and $106)
|
120
|
|
|
110
|
|
||
Limited partnership investments
|
2,389
|
|
|
2,371
|
|
||
Other invested assets
|
40
|
|
|
36
|
|
||
Mortgage loans
|
611
|
|
|
591
|
|
||
Short term investments
|
1,139
|
|
|
1,407
|
|
||
Total investments
|
45,279
|
|
|
45,420
|
|
||
Cash
|
299
|
|
|
271
|
|
||
Reinsurance receivables (less allowance for uncollectible receivables of $38 and $37)
|
4,395
|
|
|
4,416
|
|
||
Insurance receivables (less allowance for uncollectible receivables of $47 and $46)
|
2,144
|
|
|
2,209
|
|
||
Accrued investment income
|
431
|
|
|
405
|
|
||
Deferred acquisition costs
|
626
|
|
|
600
|
|
||
Deferred income taxes
|
267
|
|
|
379
|
|
||
Property and equipment at cost (less accumulated depreciation of $255 and $254)
|
324
|
|
|
310
|
|
||
Goodwill
|
146
|
|
|
145
|
|
||
Other assets
|
1,290
|
|
|
1,078
|
|
||
Total assets
|
$
|
55,201
|
|
|
$
|
55,233
|
|
Liabilities
|
|
|
|
|
|
||
Insurance reserves:
|
|
|
|
|
|||
Claim and claim adjustment expenses
|
$
|
22,260
|
|
|
$
|
22,343
|
|
Unearned premiums
|
3,912
|
|
|
3,762
|
|
||
Future policy benefits
|
10,491
|
|
|
10,326
|
|
||
Short term debt
|
150
|
|
|
—
|
|
||
Long term debt
|
2,560
|
|
|
2,710
|
|
||
Other liabilities (includes
$41
and $50 due to Loews Corporation)
|
4,135
|
|
|
4,123
|
|
||
Total liabilities
|
43,508
|
|
|
43,264
|
|
||
Commitments and contingencies (Notes C and F)
|
|
|
|
|
|
||
Stockholders' Equity
|
|
|
|
|
|
||
Common stock ($2.50 par value; 500,000,000 shares authorized; 273,040,243 shares issued; 270,978,126 and 270,495,998 shares outstanding)
|
683
|
|
|
683
|
|
||
Additional paid-in capital
|
2,161
|
|
|
2,173
|
|
||
Retained earnings
|
9,006
|
|
|
9,359
|
|
||
Accumulated other comprehensive income
|
(92
|
)
|
|
(173
|
)
|
||
Treasury stock (2,062,117 and 2,544,245 shares), at cost
|
(65
|
)
|
|
(73
|
)
|
||
Total stockholders’ equity
|
11,693
|
|
|
11,969
|
|
||
Total liabilities and stockholders' equity
|
$
|
55,201
|
|
|
$
|
55,233
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income
|
$
|
260
|
|
|
$
|
66
|
|
Adjustments to reconcile net income to net cash flows provided by operating activities:
|
|
|
|
||||
Deferred income tax expense
|
72
|
|
|
55
|
|
||
Trading portfolio activity
|
(6
|
)
|
|
(3
|
)
|
||
Net realized investment (gains) losses
|
(36
|
)
|
|
36
|
|
||
Equity method investees
|
38
|
|
|
262
|
|
||
Net amortization of investments
|
(12
|
)
|
|
(4
|
)
|
||
Depreciation and amortization
|
21
|
|
|
21
|
|
||
Changes in:
|
|
|
|
||||
Receivables, net
|
89
|
|
|
(317
|
)
|
||
Accrued investment income
|
(26
|
)
|
|
(22
|
)
|
||
Deferred acquisition costs
|
(24
|
)
|
|
(23
|
)
|
||
Insurance reserves
|
135
|
|
|
511
|
|
||
Other assets
|
(37
|
)
|
|
(89
|
)
|
||
Other liabilities
|
(206
|
)
|
|
(168
|
)
|
||
Other, net
|
14
|
|
|
9
|
|
||
Total adjustments
|
22
|
|
|
268
|
|
||
Ne
t cash flows provided by oper
ating activities
|
282
|
|
|
334
|
|
||
Cash Flows from Investing Activities
|
|
|
|
||||
Dispositions:
|
|
|
|
||||
Fixed maturity securities - sales
|
1,359
|
|
|
1,722
|
|
||
Fixed maturity securities - maturities, calls and redemptions
|
823
|
|
|
490
|
|
||
Equity securities
|
16
|
|
|
4
|
|
||
Limited partnerships
|
57
|
|
|
89
|
|
||
Mortgage loans
|
3
|
|
|
22
|
|
||
Purchases:
|
|
|
|
||||
Fixed maturity securities
|
(2,097
|
)
|
|
(2,238
|
)
|
||
Equity securities
|
(7
|
)
|
|
—
|
|
||
Limited partnerships
|
(18
|
)
|
|
(169
|
)
|
||
Mortgage loans
|
(23
|
)
|
|
(19
|
)
|
||
Change in other investments
|
(1
|
)
|
|
—
|
|
||
Change in short term investments
|
271
|
|
|
16
|
|
||
Purchases of property and equipment
|
(30
|
)
|
|
(33
|
)
|
||
Disposals of property and equipment
|
—
|
|
|
107
|
|
||
Other, net
|
1
|
|
|
—
|
|
||
Net cash flows prov
ided (used) by
investing activities
|
$
|
354
|
|
|
$
|
(9
|
)
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Cash Flows from Financing Activities
|
|
|
|
||||
Dividends paid to common stockholders
|
$
|
(609
|
)
|
|
$
|
(609
|
)
|
Proceeds from the issuance of debt
|
—
|
|
|
498
|
|
||
Repayment of debt
|
—
|
|
|
(358
|
)
|
||
Other, net
|
—
|
|
|
—
|
|
||
Net cash flows used by financing activities
|
(609
|
)
|
|
(469
|
)
|
||
Effect of foreign exchange rate changes on cash
|
1
|
|
|
(1
|
)
|
||
Net change in cash
|
28
|
|
|
(145
|
)
|
||
Cash, beginning of year
|
271
|
|
|
387
|
|
||
Cash, end of period
|
$
|
299
|
|
|
$
|
242
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Common Stock
|
|
|
|
||||
Balance, beginning of period
|
$
|
683
|
|
|
$
|
683
|
|
Balance, end of period
|
683
|
|
|
683
|
|
||
Additional Paid-in Capital
|
|
|
|
||||
Balance, beginning of period
|
2,173
|
|
|
2,153
|
|
||
Stock-based compensation
|
(12
|
)
|
|
(7
|
)
|
||
Balance, end of period
|
2,161
|
|
|
2,146
|
|
||
Retained Earnings
|
|
|
|
||||
Balance, beginning of period
|
9,359
|
|
|
9,313
|
|
||
Dividends paid to common stockholders
|
(613
|
)
|
|
(609
|
)
|
||
Net income
|
260
|
|
|
66
|
|
||
Balance, end of period
|
9,006
|
|
|
8,770
|
|
||
Accumulated Other Comprehensive Loss
|
|
|
|
||||
Balance, beginning of period
|
(173
|
)
|
|
(315
|
)
|
||
Other comprehensive income
|
81
|
|
|
259
|
|
||
Balance, end of period
|
(92
|
)
|
|
(56
|
)
|
||
Treasury Stock
|
|
|
|
||||
Balance, beginning of period
|
(73
|
)
|
|
(78
|
)
|
||
Stock-based compensation
|
8
|
|
|
5
|
|
||
Balance, end of period
|
(65
|
)
|
|
(73
|
)
|
||
Total stockholders' equity
|
$
|
11,693
|
|
|
$
|
11,470
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Fixed maturity securities
|
$
|
455
|
|
|
$
|
446
|
|
Equity securities
|
1
|
|
|
3
|
|
||
Limited partnership investments
|
90
|
|
|
(14
|
)
|
||
Mortgage loans
|
7
|
|
|
9
|
|
||
Short term investments
|
3
|
|
|
3
|
|
||
Trading portfolio
|
2
|
|
|
2
|
|
||
Other
|
1
|
|
|
—
|
|
||
Gross investment income
|
559
|
|
|
449
|
|
||
Investment expense
|
(14
|
)
|
|
(14
|
)
|
||
Net investment income
|
$
|
545
|
|
|
$
|
435
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Net realized investment gains (losses):
|
|
|
|
||||
Fixed maturity securities:
|
|
|
|
||||
Gross realized gains
|
$
|
49
|
|
|
$
|
45
|
|
Gross realized losses
|
(17
|
)
|
|
(62
|
)
|
||
Net realized investment gains (losses) on fixed maturity securities
|
32
|
|
|
(17
|
)
|
||
Equity securities:
|
|
|
|
|
|||
Gross realized gains
|
—
|
|
|
—
|
|
||
Gross realized losses
|
—
|
|
|
(5
|
)
|
||
Net realized investment gains (losses) on equity securities
|
—
|
|
|
(5
|
)
|
||
Derivatives
|
1
|
|
|
(7
|
)
|
||
Short term investments and other
|
3
|
|
|
(7
|
)
|
||
Net realized investment gains (losses)
|
$
|
36
|
|
|
$
|
(36
|
)
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Fixed maturity securities available-for-sale:
|
|
|
|
||||
Corporate and other bonds
|
$
|
2
|
|
|
$
|
16
|
|
Asset-backed:
|
|
|
|
|
|||
Residential mortgage-backed
|
—
|
|
|
—
|
|
||
Other asset-backed
|
—
|
|
|
2
|
|
||
Total asset-backed
|
—
|
|
|
2
|
|
||
Total fixed maturity securities available-for-sale
|
2
|
|
|
18
|
|
||
Equity securities available-for-sale -- Common stock
|
—
|
|
|
5
|
|
||
OTTI losses recognized in earnings
|
$
|
2
|
|
|
$
|
23
|
|
March 31, 2017
|
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
|
$
|
17,838
|
|
|
$
|
1,428
|
|
|
$
|
37
|
|
|
$
|
19,229
|
|
|
$
|
(1
|
)
|
States, municipalities and political subdivisions
|
12,261
|
|
|
1,219
|
|
|
31
|
|
|
13,449
|
|
|
(12
|
)
|
|||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
4,672
|
|
|
121
|
|
|
50
|
|
|
4,743
|
|
|
(27
|
)
|
|||||
Commercial mortgage-backed
|
1,902
|
|
|
52
|
|
|
19
|
|
|
1,935
|
|
|
—
|
|
|||||
Other asset-backed
|
1,043
|
|
|
10
|
|
|
4
|
|
|
1,049
|
|
|
—
|
|
|||||
Total asset-backed
|
7,617
|
|
|
183
|
|
|
73
|
|
|
7,727
|
|
|
(27
|
)
|
|||||
U.S. Treasury and obligations of government-sponsored enterprises
|
95
|
|
|
8
|
|
|
—
|
|
|
103
|
|
|
—
|
|
|||||
Foreign government
|
419
|
|
|
14
|
|
|
1
|
|
|
432
|
|
|
—
|
|
|||||
Redeemable preferred stock
|
19
|
|
|
1
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|||||
Total fixed maturity securities available-for-sale
|
38,249
|
|
|
2,853
|
|
|
142
|
|
|
40,960
|
|
|
$
|
(40
|
)
|
||||
Total fixed maturity securities trading
|
20
|
|
|
|
|
|
|
|
|
20
|
|
|
|
||||||
Equity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
20
|
|
|
5
|
|
|
—
|
|
|
25
|
|
|
|
||||||
Preferred stock
|
92
|
|
|
5
|
|
|
2
|
|
|
95
|
|
|
|
||||||
Total equity securities available-for-sale
|
112
|
|
|
10
|
|
|
2
|
|
|
120
|
|
|
|
||||||
Total
|
$
|
38,381
|
|
|
$
|
2,863
|
|
|
$
|
144
|
|
|
$
|
41,100
|
|
|
|
December 31, 2016
|
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
|
$
|
17,711
|
|
|
$
|
1,323
|
|
|
$
|
76
|
|
|
$
|
18,958
|
|
|
$
|
(1
|
)
|
States, municipalities and political subdivisions
|
12,060
|
|
|
1,213
|
|
|
33
|
|
|
13,240
|
|
|
(16
|
)
|
|||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
5,004
|
|
|
120
|
|
|
51
|
|
|
5,073
|
|
|
(28
|
)
|
|||||
Commercial mortgage-backed
|
2,016
|
|
|
48
|
|
|
24
|
|
|
2,040
|
|
|
—
|
|
|||||
Other asset-backed
|
1,022
|
|
|
8
|
|
|
5
|
|
|
1,025
|
|
|
—
|
|
|||||
Total asset-backed
|
8,042
|
|
|
176
|
|
|
80
|
|
|
8,138
|
|
|
(28
|
)
|
|||||
U.S. Treasury and obligations of government-sponsored enterprises
|
83
|
|
|
10
|
|
|
—
|
|
|
93
|
|
|
—
|
|
|||||
Foreign government
|
435
|
|
|
13
|
|
|
3
|
|
|
445
|
|
|
—
|
|
|||||
Redeemable preferred stock
|
18
|
|
|
1
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|||||
Total fixed maturity securities available-for-sale
|
38,349
|
|
|
2,736
|
|
|
192
|
|
|
40,893
|
|
|
$
|
(45
|
)
|
||||
Total fixed maturity securities trading
|
12
|
|
|
|
|
|
|
|
|
12
|
|
|
|
||||||
Equity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
13
|
|
|
6
|
|
|
—
|
|
|
19
|
|
|
|
||||||
Preferred stock
|
93
|
|
|
2
|
|
|
4
|
|
|
91
|
|
|
|
||||||
Total equity securities available-for-sale
|
106
|
|
|
8
|
|
|
4
|
|
|
110
|
|
|
|
||||||
Total
|
$
|
38,467
|
|
|
$
|
2,744
|
|
|
$
|
196
|
|
|
$
|
41,015
|
|
|
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
March 31, 2017
|
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
|
$
|
1,915
|
|
|
$
|
29
|
|
|
$
|
134
|
|
|
$
|
8
|
|
|
$
|
2,049
|
|
|
$
|
37
|
|
States, municipalities and political subdivisions
|
845
|
|
|
31
|
|
|
33
|
|
|
—
|
|
|
878
|
|
|
31
|
|
||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage-backed
|
2,188
|
|
|
44
|
|
|
170
|
|
|
6
|
|
|
2,358
|
|
|
50
|
|
||||||
Commercial mortgage-backed
|
590
|
|
|
15
|
|
|
139
|
|
|
4
|
|
|
729
|
|
|
19
|
|
||||||
Other asset-backed
|
256
|
|
|
4
|
|
|
28
|
|
|
—
|
|
|
284
|
|
|
4
|
|
||||||
Total asset-backed
|
3,034
|
|
|
63
|
|
|
337
|
|
|
10
|
|
|
3,371
|
|
|
73
|
|
||||||
U.S. Treasury and obligations of government-sponsored enterprises
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||||
Foreign government
|
89
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
1
|
|
||||||
Total fixed maturity securities available-for-sale
|
5,914
|
|
|
124
|
|
|
504
|
|
|
18
|
|
|
6,418
|
|
|
142
|
|
||||||
Equity securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||
Preferred stock
|
15
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
2
|
|
||||||
Total equity securities available-for-sale
|
17
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
2
|
|
||||||
Total
|
$
|
5,931
|
|
|
$
|
126
|
|
|
$
|
504
|
|
|
$
|
18
|
|
|
$
|
6,435
|
|
|
$
|
144
|
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
December 31, 2016
|
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
|
$
|
2,615
|
|
|
$
|
61
|
|
|
$
|
254
|
|
|
$
|
15
|
|
|
$
|
2,869
|
|
|
$
|
76
|
|
States, municipalities and political subdivisions
|
959
|
|
|
32
|
|
|
23
|
|
|
1
|
|
|
982
|
|
|
33
|
|
||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage-backed
|
2,136
|
|
|
44
|
|
|
201
|
|
|
7
|
|
|
2,337
|
|
|
51
|
|
||||||
Commercial mortgage-backed
|
756
|
|
|
22
|
|
|
69
|
|
|
2
|
|
|
825
|
|
|
24
|
|
||||||
Other asset-backed
|
398
|
|
|
5
|
|
|
24
|
|
|
—
|
|
|
422
|
|
|
5
|
|
||||||
Total asset-backed
|
3,290
|
|
|
71
|
|
|
294
|
|
|
9
|
|
|
3,584
|
|
|
80
|
|
||||||
U.S. Treasury and obligations of government-sponsored enterprises
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||||
Foreign government
|
108
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|
3
|
|
||||||
Total fixed maturity securities available-for-sale
|
6,977
|
|
|
167
|
|
|
571
|
|
|
25
|
|
|
7,548
|
|
|
192
|
|
||||||
Equity securities available-for-sale -- Preferred stock
|
12
|
|
|
—
|
|
|
13
|
|
|
4
|
|
|
25
|
|
|
4
|
|
||||||
Total
|
$
|
6,989
|
|
|
$
|
167
|
|
|
$
|
584
|
|
|
$
|
29
|
|
|
$
|
7,573
|
|
|
$
|
196
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Beginning balance of credit losses on fixed maturity securities
|
$
|
36
|
|
|
$
|
53
|
|
Reductions for securities sold during the period
|
(4
|
)
|
|
(5
|
)
|
||
Ending balance of credit losses on fixed maturity securities
|
$
|
32
|
|
|
$
|
48
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
(In millions)
|
Cost or
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Cost or
Amortized
Cost
|
|
Estimated
Fair
Value
|
||||||||
Due in one year or less
|
$
|
1,655
|
|
|
$
|
1,701
|
|
|
$
|
1,779
|
|
|
$
|
1,828
|
|
Due after one year through five years
|
7,539
|
|
|
7,918
|
|
|
7,566
|
|
|
7,955
|
|
||||
Due after five years through ten years
|
15,645
|
|
|
16,176
|
|
|
15,892
|
|
|
16,332
|
|
||||
Due after ten years
|
13,410
|
|
|
15,165
|
|
|
13,112
|
|
|
14,778
|
|
||||
Total
|
$
|
38,249
|
|
|
$
|
40,960
|
|
|
$
|
38,349
|
|
|
$
|
40,893
|
|
March 31, 2017
|
|
|
|
|
|
|
Total
Assets/Liabilities
at Fair Value
|
||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Corporate and other bonds
|
$
|
—
|
|
|
$
|
19,125
|
|
|
$
|
121
|
|
|
$
|
19,246
|
|
States, municipalities and political subdivisions
|
—
|
|
|
13,451
|
|
|
1
|
|
|
13,452
|
|
||||
Asset-backed:
|
|
|
|
|
|
|
|
||||||||
Residential mortgage-backed
|
—
|
|
|
4,617
|
|
|
126
|
|
|
4,743
|
|
||||
Commercial mortgage-backed
|
—
|
|
|
1,922
|
|
|
13
|
|
|
1,935
|
|
||||
Other asset-backed
|
—
|
|
|
932
|
|
|
117
|
|
|
1,049
|
|
||||
Total asset-backed
|
—
|
|
|
7,471
|
|
|
256
|
|
|
7,727
|
|
||||
U.S. Treasury and obligations of government-sponsored enterprises
|
103
|
|
|
—
|
|
|
—
|
|
|
103
|
|
||||
Foreign government
|
—
|
|
|
432
|
|
|
—
|
|
|
432
|
|
||||
Redeemable preferred stock
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Total fixed maturity securities
|
123
|
|
|
40,479
|
|
|
378
|
|
|
40,980
|
|
||||
Equity securities
|
101
|
|
|
—
|
|
|
19
|
|
|
120
|
|
||||
Other invested assets
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Short term investments
|
225
|
|
|
829
|
|
|
—
|
|
|
1,054
|
|
||||
Life settlement contracts, included in Other assets
|
—
|
|
|
—
|
|
|
46
|
|
|
46
|
|
||||
Total assets
|
$
|
449
|
|
|
$
|
41,313
|
|
|
$
|
443
|
|
|
$
|
42,205
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||
Other liabilities
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
December 31, 2016
|
|
|
|
|
|
|
Total
Assets/Liabilities
at Fair Value
|
||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Corporate and other bonds
|
$
|
—
|
|
|
$
|
18,840
|
|
|
$
|
130
|
|
|
$
|
18,970
|
|
States, municipalities and political subdivisions
|
—
|
|
|
13,239
|
|
|
1
|
|
|
13,240
|
|
||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|||||||
Residential mortgage-backed
|
—
|
|
|
4,944
|
|
|
129
|
|
|
5,073
|
|
||||
Commercial mortgage-backed
|
—
|
|
|
2,027
|
|
|
13
|
|
|
2,040
|
|
||||
Other asset-backed
|
—
|
|
|
968
|
|
|
57
|
|
|
1,025
|
|
||||
Total asset-backed
|
—
|
|
|
7,939
|
|
|
199
|
|
|
8,138
|
|
||||
U.S. Treasury and obligations of government-sponsored enterprises
|
93
|
|
|
—
|
|
|
—
|
|
|
93
|
|
||||
Foreign government
|
—
|
|
|
445
|
|
|
—
|
|
|
445
|
|
||||
Redeemable preferred stock
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Total fixed maturity securities
|
112
|
|
|
40,463
|
|
|
330
|
|
|
40,905
|
|
||||
Equity securities
|
91
|
|
|
—
|
|
|
19
|
|
|
110
|
|
||||
Other invested assets
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Short term investments
|
475
|
|
|
853
|
|
|
—
|
|
|
1,328
|
|
||||
Life settlement contracts, included in Other assets
|
—
|
|
|
—
|
|
|
58
|
|
|
58
|
|
||||
Total assets
|
$
|
678
|
|
|
$
|
41,321
|
|
|
$
|
407
|
|
|
$
|
42,406
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||
Other liabilities
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
Level 3
(In millions)
|
Balance as of
January 1,
2017
|
|
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
March 31,
2017
|
|
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2017 recognized in Net income (loss)*
|
||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate and other bonds
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
121
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Residential mortgage-backed
|
129
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
126
|
|
|
—
|
|
||||||||||
Commercial mortgage-backed
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||||||||
Other asset-backed
|
57
|
|
|
(1
|
)
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
(5
|
)
|
|
117
|
|
|
—
|
|
||||||||||
Total asset-backed
|
199
|
|
|
—
|
|
|
2
|
|
|
38
|
|
|
—
|
|
|
(6
|
)
|
|
28
|
|
|
(5
|
)
|
|
256
|
|
|
—
|
|
||||||||||
Total fixed maturity securities
|
330
|
|
|
—
|
|
|
3
|
|
|
43
|
|
|
(1
|
)
|
|
(20
|
)
|
|
28
|
|
|
(5
|
)
|
|
378
|
|
|
—
|
|
||||||||||
Equity securities
|
19
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||||||||
Derivative financial instruments
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Life settlement contracts
|
58
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
||||||||||
Total
|
$
|
407
|
|
|
$
|
7
|
|
|
$
|
4
|
|
|
$
|
44
|
|
|
$
|
(17
|
)
|
|
$
|
(25
|
)
|
|
$
|
28
|
|
|
$
|
(5
|
)
|
|
$
|
443
|
|
|
$
|
—
|
|
Level 3
(In millions)
|
Balance as of
January 1,
2016
|
|
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
March 31,
2016
|
|
Unrealized gains (losses) on Level 3 assets and liabilities held as of March 31, 2016 recognized in Net income (loss)*
|
||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate and other bonds
|
$
|
168
|
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
53
|
|
|
$
|
(16
|
)
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
$
|
193
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||||
Asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Residential mortgage-backed
|
134
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(2
|
)
|
|
128
|
|
|
—
|
|
||||||||||
Commercial mortgage-backed
|
22
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
27
|
|
|
—
|
|
||||||||||
Other asset-backed
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(5
|
)
|
|
50
|
|
|
—
|
|
||||||||||
Total asset-backed
|
209
|
|
|
1
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
(5
|
)
|
|
2
|
|
|
(11
|
)
|
|
205
|
|
|
—
|
|
||||||||||
Total fixed maturity securities
|
379
|
|
|
—
|
|
|
4
|
|
|
62
|
|
|
(16
|
)
|
|
(8
|
)
|
|
2
|
|
|
(23
|
)
|
|
400
|
|
|
—
|
|
||||||||||
Equity securities
|
20
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||||||||
Life settlement contracts
|
74
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
72
|
|
|
1
|
|
||||||||||
Total
|
$
|
473
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
62
|
|
|
$
|
(16
|
)
|
|
$
|
(14
|
)
|
|
$
|
2
|
|
|
$
|
(23
|
)
|
|
$
|
491
|
|
|
$
|
1
|
|
Major Category of Assets and Liabilities
|
|
Condensed Consolidated Statements of Operations Line Items
|
Fixed maturity securities available-for-sale
(1)
|
|
Net realized investment gains (losses)
|
Fixed maturity securities trading
|
|
Net investment income
|
Equity securities
(1)
|
|
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)
|
Life settlement contracts
|
|
Other revenues
|
Other liabilities - Derivative financial instruments
|
|
Net realized investment gains (losses)
|
March 31, 2017
|
Estimated Fair Value
(In millions)
|
|
Valuation Technique(s)
|
|
Unobservable Input(s)
|
|
Range
(Weighted Average)
|
||
Fixed maturity securities
|
$
|
122
|
|
|
Discounted cash flow
|
|
Credit spread
|
|
2% - 40% (4%)
|
December 31, 2016
|
Estimated Fair Value
(In millions) |
|
Valuation Technique(s)
|
|
Unobservable Input(s)
|
|
Range
(Weighted Average)
|
||
Fixed maturity securities
|
$
|
106
|
|
|
Discounted cash flow
|
|
Credit spread
|
|
2% - 40% (4%)
|
March 31, 2017
|
Carrying
Amount
|
|
Estimated Fair Value
|
||||||||||||||||
(In millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans
|
$
|
611
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
616
|
|
|
$
|
616
|
|
Note receivable
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short term debt
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
156
|
|
|
$
|
—
|
|
|
$
|
156
|
|
Long term debt
|
2,560
|
|
|
—
|
|
|
2,811
|
|
|
—
|
|
|
2,811
|
|
December 31, 2016
|
Carrying
Amount |
|
Estimated Fair Value
|
||||||||||||||||
(In millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans
|
$
|
591
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
594
|
|
|
$
|
594
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Long term debt
|
$
|
2,710
|
|
|
$
|
—
|
|
|
$
|
2,952
|
|
|
$
|
—
|
|
|
$
|
2,952
|
|
For the three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Reserves, beginning of year:
|
|
|
|
||||
Gross
|
$
|
22,343
|
|
|
$
|
22,663
|
|
Ceded
|
4,094
|
|
|
4,087
|
|
||
Net reserves, beginning of year
|
18,249
|
|
|
18,576
|
|
||
Net incurred claim and claim adjustment expenses:
|
|
|
|
||||
Provision for insured events of current year
|
1,207
|
|
|
1,224
|
|
||
Decrease in provision for insured events of prior years
|
(82
|
)
|
|
(45
|
)
|
||
Amortization of discount
|
48
|
|
|
48
|
|
||
Total net incurred
(1)
|
1,173
|
|
|
1,227
|
|
||
Net payments attributable to:
|
|
|
|
||||
Current year events
|
(68
|
)
|
|
(76
|
)
|
||
Prior year events
|
(1,184
|
)
|
|
(1,147
|
)
|
||
Total net payments
|
(1,252
|
)
|
|
(1,223
|
)
|
||
Foreign currency translation adjustment and other
|
14
|
|
|
39
|
|
||
Net reserves, end of period
|
18,184
|
|
|
18,619
|
|
||
Ceded reserves, end of period
|
4,076
|
|
|
4,399
|
|
||
Gross reserves, end of period
|
$
|
22,260
|
|
|
$
|
23,018
|
|
(1)
|
Total net incurred above does not agree to Insurance claims and policyholders' benefits as reflected on the Condensed Consolidated Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, uncollectible reinsurance and loss deductible receivables, and benefit expenses related to future policy benefits, which are not reflected in the table above.
|
Three months ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Specialty
|
|
Commercial
|
|
International
|
|
Corporate
& Other
Non-Core
|
|
Total
|
||||||||||
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development
|
$
|
(31
|
)
|
|
$
|
(24
|
)
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(57
|
)
|
Pretax (favorable) unfavorable premium development
|
(5
|
)
|
|
37
|
|
|
(7
|
)
|
|
—
|
|
|
25
|
|
|||||
Total pretax (favorable) unfavorable net prior year development
|
$
|
(36
|
)
|
|
$
|
13
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
(32
|
)
|
Three months ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Specialty
|
|
Commercial
|
|
International
|
|
Corporate
& Other
Non-Core
|
|
Total
|
||||||||||
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development
|
$
|
(34
|
)
|
|
$
|
(14
|
)
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(52
|
)
|
Pretax (favorable) unfavorable premium development
|
(11
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
(14
|
)
|
|||||
Total pretax (favorable) unfavorable net prior year development
|
$
|
(45
|
)
|
|
$
|
(16
|
)
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
(66
|
)
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Pretax (favorable) unfavorable development:
|
|
|
|
||||
Medical Professional Liability
|
$
|
1
|
|
|
$
|
(7
|
)
|
Other Professional Liability and Management Liability
|
(32
|
)
|
|
(9
|
)
|
||
Surety
|
—
|
|
|
—
|
|
||
Warranty
|
—
|
|
|
2
|
|
||
Other
|
—
|
|
|
(20
|
)
|
||
Total pretax (favorable) unfavorable development
|
$
|
(31
|
)
|
|
$
|
(34
|
)
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Pretax (favorable) unfavorable development:
|
|
|
|
||||
Commercial Auto
|
$
|
(26
|
)
|
|
$
|
(15
|
)
|
General Liability
|
—
|
|
|
(15
|
)
|
||
Workers' Compensation
|
—
|
|
|
4
|
|
||
Property and Other
|
2
|
|
|
12
|
|
||
Total pretax (favorable) unfavorable development
|
$
|
(24
|
)
|
|
$
|
(14
|
)
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Pretax (favorable) unfavorable development:
|
|
|
|
||||
Medical Professional Liability
|
$
|
—
|
|
|
$
|
—
|
|
Other Professional Liability
|
(1
|
)
|
|
(1
|
)
|
||
Liability
|
—
|
|
|
—
|
|
||
Property & Marine
|
1
|
|
|
(4
|
)
|
||
Other
|
(2
|
)
|
|
1
|
|
||
Total pretax (favorable) unfavorable development
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Net A&EP adverse development before consideration of LPT
|
$
|
60
|
|
|
$
|
200
|
|
Retroactive reinsurance benefit recognized
|
(40
|
)
|
|
(73
|
)
|
||
Pretax impact of A&EP reserve development and the LPT
|
$
|
20
|
|
|
$
|
127
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Pension cost (benefit)
|
|
|
|
||||
Interest cost on projected benefit obligation
|
$
|
26
|
|
|
$
|
28
|
|
Expected return on plan assets
|
(39
|
)
|
|
(40
|
)
|
||
Amortization of net actuarial loss
|
9
|
|
|
9
|
|
||
Settlement loss
|
2
|
|
|
—
|
|
||
Net periodic pension cost (benefit)
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
(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, 2017
|
$
|
30
|
|
|
$
|
642
|
|
|
$
|
(647
|
)
|
|
$
|
(198
|
)
|
|
$
|
(173
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
85
|
|
|
—
|
|
|
11
|
|
|
96
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $(2), $(9), $4, $- and $(7)
|
4
|
|
|
18
|
|
|
(7
|
)
|
|
—
|
|
|
15
|
|
|||||
Other comprehensive income (loss) net of tax (expense) benefit of $1, $(38), $(4), $- and $(41)
|
(4
|
)
|
|
67
|
|
|
7
|
|
|
11
|
|
|
81
|
|
|||||
Balance as of March 31, 2017
|
$
|
26
|
|
|
$
|
709
|
|
|
$
|
(640
|
)
|
|
$
|
(187
|
)
|
|
$
|
(92
|
)
|
(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, 2016
|
$
|
27
|
|
|
$
|
390
|
|
|
$
|
(648
|
)
|
|
$
|
(84
|
)
|
|
$
|
(315
|
)
|
Other comprehensive income (loss) before reclassifications
|
3
|
|
|
223
|
|
|
—
|
|
|
14
|
|
|
240
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $1, $7, $3, $- and $11
|
(2
|
)
|
|
(11
|
)
|
|
(6
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Other comprehensive income (loss) net of tax (expense) benefit of $(3), $(116), $(3), $- and $(122)
|
5
|
|
|
234
|
|
|
6
|
|
|
14
|
|
|
259
|
|
|||||
Balance as of March 31, 2016
|
$
|
32
|
|
|
$
|
624
|
|
|
$
|
(642
|
)
|
|
$
|
(70
|
)
|
|
$
|
(56
|
)
|
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)
|
Pension and postretirement benefits
|
|
Other operating expenses
|
Three months ended March 31, 2017
|
Specialty
|
|
Commercial
|
|
International
|
|
Life &
Group
Non-Core
|
|
Corporate
& Other
Non-Core
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
|
Eliminations
|
|
Total
|
|||||||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
$
|
664
|
|
|
$
|
651
|
|
|
$
|
197
|
|
|
$
|
133
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,645
|
|
Net investment income
|
153
|
|
|
178
|
|
|
12
|
|
|
197
|
|
|
5
|
|
|
—
|
|
|
545
|
|
|||||||
Other revenues
|
94
|
|
|
9
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|||||||
Total operating revenues
|
911
|
|
|
838
|
|
|
209
|
|
|
331
|
|
|
5
|
|
|
—
|
|
|
2,294
|
|
|||||||
Claims, Benefits and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net incurred claims and benefits
|
386
|
|
|
437
|
|
|
115
|
|
|
330
|
|
|
21
|
|
|
—
|
|
|
1,289
|
|
|||||||
Policyholders’ dividends
|
1
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||||
Amortization of deferred acquisition costs
|
143
|
|
|
116
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
305
|
|
|||||||
Other insurance related expenses
|
69
|
|
|
126
|
|
|
27
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
254
|
|
|||||||
Other expenses
|
81
|
|
|
14
|
|
|
(6
|
)
|
|
2
|
|
|
44
|
|
|
—
|
|
|
135
|
|
|||||||
Total claims, benefits and expenses
|
680
|
|
|
696
|
|
|
182
|
|
|
364
|
|
|
65
|
|
|
—
|
|
|
1,987
|
|
|||||||
Operating income (loss) before income tax
|
231
|
|
|
142
|
|
|
27
|
|
|
(33
|
)
|
|
(60
|
)
|
|
—
|
|
|
307
|
|
|||||||
Income tax (expense) benefit on operating income (loss)
|
(77
|
)
|
|
(48
|
)
|
|
(7
|
)
|
|
37
|
|
|
23
|
|
|
—
|
|
|
(72
|
)
|
|||||||
Net operating income (loss)
|
154
|
|
|
94
|
|
|
20
|
|
|
4
|
|
|
(37
|
)
|
|
—
|
|
|
235
|
|
|||||||
Net realized investment gains (losses)
|
7
|
|
|
11
|
|
|
6
|
|
|
10
|
|
|
2
|
|
|
—
|
|
|
36
|
|
|||||||
Income tax (expense) benefit on net realized investment gains (losses)
|
(3
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||||
Net realized investment gains (losses), after tax
|
4
|
|
|
8
|
|
|
5
|
|
|
6
|
|
|
2
|
|
|
—
|
|
|
25
|
|
|||||||
Net income (loss)
|
$
|
158
|
|
|
$
|
102
|
|
|
$
|
25
|
|
|
$
|
10
|
|
|
$
|
(35
|
)
|
|
$
|
—
|
|
|
$
|
260
|
|
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Reinsurance receivables
|
$
|
817
|
|
|
$
|
616
|
|
|
$
|
133
|
|
|
$
|
448
|
|
|
$
|
2,419
|
|
|
$
|
—
|
|
|
$
|
4,433
|
|
Insurance receivables
|
874
|
|
|
1,048
|
|
|
254
|
|
|
12
|
|
|
3
|
|
|
—
|
|
|
2,191
|
|
|||||||
Deferred acquisition costs
|
314
|
|
|
225
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
626
|
|
|||||||
Goodwill
|
117
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|||||||
Insurance reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Claim and claim adjustment expenses
|
6,224
|
|
|
8,760
|
|
|
1,343
|
|
|
3,373
|
|
|
2,560
|
|
|
—
|
|
|
22,260
|
|
|||||||
Unearned premiums
|
1,941
|
|
|
1,375
|
|
|
450
|
|
|
147
|
|
|
—
|
|
|
(1
|
)
|
|
3,912
|
|
|||||||
Future policy benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
10,491
|
|
|
—
|
|
|
—
|
|
|
10,491
|
|
Three months ended March 31, 2016
|
Specialty
|
|
Commercial
|
|
International
|
|
Life &
Group
Non-Core
|
|
Corporate
& Other
Non-Core
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
Eliminations
|
|
Total
|
||||||||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
$
|
682
|
|
|
$
|
688
|
|
|
$
|
198
|
|
|
$
|
131
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,699
|
|
Net investment income
|
107
|
|
|
126
|
|
|
12
|
|
|
187
|
|
|
3
|
|
|
—
|
|
|
435
|
|
|||||||
Other revenues
|
87
|
|
|
6
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
97
|
|
|||||||
Total operating revenues
|
876
|
|
|
820
|
|
|
211
|
|
|
318
|
|
|
6
|
|
|
—
|
|
|
2,231
|
|
|||||||
Claims, Benefits and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net incurred claims and benefits
|
390
|
|
|
442
|
|
|
121
|
|
|
323
|
|
|
128
|
|
|
—
|
|
|
1,404
|
|
|||||||
Policyholders’ dividends
|
1
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||||
Amortization of deferred acquisition costs
|
144
|
|
|
116
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
307
|
|
|||||||
Other insurance related expenses
|
75
|
|
|
141
|
|
|
28
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
277
|
|
|||||||
Other expenses
|
75
|
|
|
5
|
|
|
9
|
|
|
3
|
|
|
54
|
|
|
—
|
|
|
146
|
|
|||||||
Total claims, benefits and expenses
|
685
|
|
|
707
|
|
|
205
|
|
|
359
|
|
|
182
|
|
|
—
|
|
|
2,138
|
|
|||||||
Operating income (loss) before income tax
|
191
|
|
|
113
|
|
|
6
|
|
|
(41
|
)
|
|
(176
|
)
|
|
—
|
|
|
93
|
|
|||||||
Income tax (expense) benefit on operating income (loss)
|
(64
|
)
|
|
(39
|
)
|
|
—
|
|
|
39
|
|
|
62
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Net operating income (loss)
|
127
|
|
|
74
|
|
|
6
|
|
|
(2
|
)
|
|
(114
|
)
|
|
—
|
|
|
91
|
|
|||||||
Net realized investment gains (losses)
|
(11
|
)
|
|
(18
|
)
|
|
4
|
|
|
(3
|
)
|
|
(8
|
)
|
|
—
|
|
|
(36
|
)
|
|||||||
Income tax (expense) benefit on net realized investment gains (losses)
|
4
|
|
|
6
|
|
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
11
|
|
|||||||
Net realized investment gains (losses), after tax
|
(7
|
)
|
|
(12
|
)
|
|
3
|
|
|
(3
|
)
|
|
(6
|
)
|
|
—
|
|
|
(25
|
)
|
|||||||
Net income (loss)
|
$
|
120
|
|
|
$
|
62
|
|
|
$
|
9
|
|
|
$
|
(5
|
)
|
|
$
|
(120
|
)
|
|
$
|
—
|
|
|
$
|
66
|
|
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Reinsurance receivables
|
$
|
765
|
|
|
$
|
623
|
|
|
$
|
139
|
|
|
$
|
496
|
|
|
$
|
2,707
|
|
|
$
|
—
|
|
|
$
|
4,730
|
|
Insurance receivables
|
884
|
|
|
1,025
|
|
|
276
|
|
|
14
|
|
|
2
|
|
|
—
|
|
|
2,201
|
|
|||||||
Deferred acquisition costs
|
309
|
|
|
225
|
|
|
88
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
622
|
|
|||||||
Goodwill
|
117
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|||||||
Insurance reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Claim and claim adjustment expenses
|
6,325
|
|
|
9,095
|
|
|
1,395
|
|
|
3,311
|
|
|
2,892
|
|
|
—
|
|
|
23,018
|
|
|||||||
Unearned premiums
|
1,861
|
|
|
1,347
|
|
|
464
|
|
|
136
|
|
|
—
|
|
|
(1
|
)
|
|
3,807
|
|
|||||||
Future policy benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
10,500
|
|
|
—
|
|
|
—
|
|
|
10,500
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Specialty
|
|
|
|
||||
Management & Professional Liability
|
$
|
661
|
|
|
$
|
618
|
|
Surety
|
123
|
|
|
127
|
|
||
Warranty & Alternative Risks
|
134
|
|
|
120
|
|
||
Specialty revenues
|
918
|
|
|
865
|
|
||
Commercial
|
|
|
|
|
|
||
Middle Market
|
458
|
|
|
401
|
|
||
Small Business
|
97
|
|
|
143
|
|
||
Other Commercial Insurance
|
294
|
|
|
258
|
|
||
Commercial revenues
|
849
|
|
|
802
|
|
||
International
|
|
|
|
|
|
||
Canada
|
51
|
|
|
50
|
|
||
CNA Europe
|
73
|
|
|
78
|
|
||
Hardy
|
91
|
|
|
87
|
|
||
International revenues
|
215
|
|
|
215
|
|
||
Life & Group Non-Core revenues
|
341
|
|
|
315
|
|
||
Corporate & Other Non-Core revenues
|
7
|
|
|
(2
|
)
|
||
Eliminations
|
—
|
|
|
—
|
|
||
Total revenues
|
$
|
2,330
|
|
|
$
|
2,195
|
|
•
|
Insurance Reserves
|
•
|
Reinsurance and Insurance Receivables
|
•
|
Valuation of Investments and Impairment of Securities
|
•
|
Long Term Care Policies
|
•
|
Pension and Postretirement Benefit Obligations
|
•
|
Income Taxes
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Operating Revenues
|
|
|
|
||||
Net earned premiums
|
$
|
1,645
|
|
|
$
|
1,699
|
|
Net investment income
|
545
|
|
|
435
|
|
||
Other revenues
|
104
|
|
|
97
|
|
||
Total operating revenues
|
2,294
|
|
|
2,231
|
|
||
Claims, Benefits and Expenses
|
|
|
|
||||
Net incurred claims and benefits
|
1,289
|
|
|
1,404
|
|
||
Policyholders' dividends
|
4
|
|
|
4
|
|
||
Amortization of deferred acquisition costs
|
305
|
|
|
307
|
|
||
Other insurance related expenses
|
254
|
|
|
277
|
|
||
Other expenses
|
135
|
|
|
146
|
|
||
Total claims, benefits and expenses
|
1,987
|
|
|
2,138
|
|
||
Operating income before income tax
|
307
|
|
|
93
|
|
||
Income tax expense on operating income
|
(72
|
)
|
|
(2
|
)
|
||
Net operating income
|
235
|
|
|
91
|
|
||
Net realized investment gains (losses)
|
36
|
|
|
(36
|
)
|
||
Income tax (expense) benefit on net realized investment gains (losses)
|
(11
|
)
|
|
11
|
|
||
Net realized investment gains (losses), after tax
|
25
|
|
|
(25
|
)
|
||
Net income
|
$
|
260
|
|
|
$
|
66
|
|
Three months ended March 31
|
|
|
|
||||
(In millions, except ratios, rate and retention)
|
2017
|
|
2016
|
||||
Net written premiums
|
$
|
679
|
|
|
$
|
684
|
|
Net earned premiums
|
664
|
|
|
682
|
|
||
Net investment income
|
153
|
|
|
107
|
|
||
Net operating income
|
154
|
|
|
127
|
|
||
Net realized investment gains (losses), after tax
|
4
|
|
|
(7
|
)
|
||
Net income
|
158
|
|
|
120
|
|
||
|
|
|
|
||||
Other performance metrics:
|
|
|
|
||||
Loss and loss adjustment expense ratio
|
58.2
|
%
|
|
57.1
|
%
|
||
Expense ratio
|
31.9
|
|
|
32.1
|
|
||
Dividend ratio
|
0.1
|
|
|
0.2
|
|
||
Combined ratio
|
90.2
|
%
|
|
89.4
|
%
|
||
|
|
|
|
||||
Rate
|
1
|
%
|
|
1
|
%
|
||
Retention
|
88
|
%
|
|
88
|
%
|
||
New Business
|
$
|
57
|
|
|
$
|
65
|
|
(In millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Gross case reserves
|
$
|
1,842
|
|
|
$
|
1,871
|
|
Gross IBNR reserves
|
4,382
|
|
|
4,278
|
|
||
Total gross carried claim and claim adjustment expense reserves
|
$
|
6,224
|
|
|
$
|
6,149
|
|
Net case reserves
|
$
|
1,681
|
|
|
$
|
1,681
|
|
Net IBNR reserves
|
3,731
|
|
|
3,723
|
|
||
Total net carried claim and claim adjustment expense reserves
|
$
|
5,412
|
|
|
$
|
5,404
|
|
Three months ended March 31
|
|
|
|
||||
(In millions, except ratios, rate and retention)
|
2017
|
|
2016
|
||||
Net written premiums
|
$
|
715
|
|
|
$
|
748
|
|
Net earned premiums
|
651
|
|
|
688
|
|
||
Net investment income
|
178
|
|
|
126
|
|
||
Net operating income
|
94
|
|
|
74
|
|
||
Net realized investment gains (losses), after tax
|
8
|
|
|
(12
|
)
|
||
Net income
|
102
|
|
|
62
|
|
||
|
|
|
|
|
|||
Other performance metrics:
|
|
|
|
||||
Loss and loss adjustment expense ratio
|
67.0
|
%
|
|
64.2
|
%
|
||
Expense ratio
|
37.4
|
|
|
37.3
|
|
||
Dividend ratio
|
0.5
|
|
|
0.4
|
|
||
Combined ratio
|
104.9
|
%
|
|
101.9
|
%
|
||
|
|
|
|
||||
Rate
|
0
|
%
|
|
0
|
%
|
||
Retention
|
83
|
%
|
|
84
|
%
|
||
New Business
|
$
|
139
|
|
|
$
|
137
|
|
(In millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Gross case reserves
|
$
|
4,613
|
|
|
$
|
4,661
|
|
Gross IBNR reserves
|
4,147
|
|
|
4,233
|
|
||
Total gross carried claim and claim adjustment expense reserves
|
$
|
8,760
|
|
|
$
|
8,894
|
|
Net case reserves
|
$
|
4,322
|
|
|
$
|
4,353
|
|
Net IBNR reserves
|
3,862
|
|
|
3,952
|
|
||
Total net carried claim and claim adjustment expense reserves
|
$
|
8,184
|
|
|
$
|
8,305
|
|
Three months ended March 31
|
|
|
|
||||
(In millions, except ratios, rate and retention)
|
2017
|
|
2016
|
||||
Net written premiums
|
$
|
238
|
|
|
$
|
236
|
|
Net earned premiums
|
197
|
|
|
198
|
|
||
Net investment income
|
12
|
|
|
12
|
|
||
Net operating income
|
20
|
|
|
6
|
|
||
Net realized investment gains, after tax
|
5
|
|
|
3
|
|
||
Net income
|
25
|
|
|
9
|
|
||
|
|
|
|
||||
Other performance metrics:
|
|
|
|
||||
Loss and loss adjustment expense ratio
|
58.3
|
%
|
|
61.2
|
%
|
||
Expense ratio
|
36.8
|
|
|
37.8
|
|
||
Combined ratio
|
95.1
|
%
|
|
99.0
|
%
|
||
|
|
|
|
||||
Rate
|
0
|
%
|
|
0
|
%
|
||
Retention
|
76
|
%
|
|
81
|
%
|
||
New Business
|
$
|
65
|
|
|
$
|
60
|
|
(In millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Gross case reserves
|
$
|
641
|
|
|
$
|
632
|
|
Gross IBNR reserves
|
702
|
|
|
696
|
|
||
Total gross carried claim and claim adjustment expense reserves
|
$
|
1,343
|
|
|
$
|
1,328
|
|
Net case reserves
|
$
|
559
|
|
|
$
|
548
|
|
Net IBNR reserves
|
666
|
|
|
653
|
|
||
Total net carried claim and claim adjustment expense reserves
|
$
|
1,225
|
|
|
$
|
1,201
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Net earned premiums
|
$
|
133
|
|
|
$
|
131
|
|
Net investment income
|
197
|
|
|
187
|
|
||
Net operating income (loss)
|
4
|
|
|
(2
|
)
|
||
Net realized investment gains (losses), after tax
|
6
|
|
|
(3
|
)
|
||
Net income (loss)
|
10
|
|
|
(5
|
)
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Net investment income
|
$
|
5
|
|
|
$
|
3
|
|
Interest expense
|
38
|
|
|
42
|
|
||
Net operating loss
|
(37
|
)
|
|
(114
|
)
|
||
Net realized investment gains (losses), after tax
|
2
|
|
|
(6
|
)
|
||
Net loss
|
(35
|
)
|
|
(120
|
)
|
(In millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Gross case reserves
|
$
|
1,458
|
|
|
$
|
1,524
|
|
Gross IBNR reserves
|
1,102
|
|
|
1,090
|
|
||
Total gross carried claim and claim adjustment expense reserves
|
$
|
2,560
|
|
|
$
|
2,614
|
|
Net case reserves
|
$
|
95
|
|
|
$
|
94
|
|
Net IBNR reserves
|
132
|
|
|
136
|
|
||
Total net carried claim and claim adjustment expense reserves
|
$
|
227
|
|
|
$
|
230
|
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Fixed maturity securities:
|
|
|
|
||||
Taxable
|
$
|
347
|
|
|
$
|
345
|
|
Tax-Exempt
|
108
|
|
|
101
|
|
||
Total fixed maturity securities
|
455
|
|
|
446
|
|
||
Limited partnership investments
|
90
|
|
|
(14
|
)
|
||
Other, net of investment expense
|
—
|
|
|
3
|
|
||
Net investment income
|
$
|
545
|
|
|
$
|
435
|
|
Net investment income, after tax
|
$
|
389
|
|
|
$
|
315
|
|
|
|
|
|
||||
Effective income yield for the fixed maturity securities portfolio, pretax
|
4.8
|
%
|
|
4.8
|
%
|
||
Effective income yield for the fixed maturity securities portfolio, after tax
|
3.4
|
%
|
|
3.4
|
%
|
Three months ended March 31
|
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Fixed maturity securities:
|
|
|
|
||||
Corporate and other bonds
|
$
|
29
|
|
|
$
|
(15
|
)
|
States, municipalities and political subdivisions
|
6
|
|
|
3
|
|
||
Asset-backed
|
(4
|
)
|
|
(6
|
)
|
||
U.S. Treasury and obligations of government-sponsored enterprises
|
1
|
|
|
1
|
|
||
Total fixed maturity securities
|
32
|
|
|
(17
|
)
|
||
Equity securities
|
—
|
|
|
(5
|
)
|
||
Derivative securities
|
1
|
|
|
(7
|
)
|
||
Short term investments and other
|
3
|
|
|
(7
|
)
|
||
Net realized investment gains (losses)
|
36
|
|
|
(36
|
)
|
||
Income tax (expense) benefit on net realized investment gains (losses)
|
(11
|
)
|
|
11
|
|
||
Net realized investment gains (losses), after tax
|
$
|
25
|
|
|
$
|
(25
|
)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
(In millions)
|
Estimated Fair Value
|
|
Net Unrealized Gains (Losses)
|
|
Estimated Fair Value
|
|
Net Unrealized Gains (Losses)
|
||||||||
U.S. Government, Government agencies and Government-sponsored enterprises
|
$
|
3,995
|
|
|
$
|
28
|
|
|
$
|
4,212
|
|
|
$
|
32
|
|
AAA
|
1,832
|
|
|
117
|
|
|
1,881
|
|
|
110
|
|
||||
AA
|
9,016
|
|
|
761
|
|
|
8,911
|
|
|
750
|
|
||||
A
|
9,705
|
|
|
823
|
|
|
9,866
|
|
|
832
|
|
||||
BBB
|
13,166
|
|
|
815
|
|
|
12,802
|
|
|
664
|
|
||||
Non-investment grade
|
3,266
|
|
|
167
|
|
|
3,233
|
|
|
156
|
|
||||
Total
|
$
|
40,980
|
|
|
$
|
2,711
|
|
|
$
|
40,905
|
|
|
$
|
2,544
|
|
|
March 31, 2017
|
||||||
(In millions)
|
Estimated Fair Value
|
|
Gross Unrealized Losses
|
||||
U.S. Government, Government agencies and Government-sponsored enterprises
|
$
|
2,154
|
|
|
$
|
44
|
|
AAA
|
284
|
|
|
8
|
|
||
AA
|
591
|
|
|
18
|
|
||
A
|
833
|
|
|
20
|
|
||
BBB
|
1,819
|
|
|
37
|
|
||
Non-investment grade
|
737
|
|
|
15
|
|
||
Total
|
$
|
6,418
|
|
|
$
|
142
|
|
|
March 31, 2017
|
||||||
(In millions)
|
Estimated Fair Value
|
|
Gross Unrealized Losses
|
||||
Due in one year or less
|
$
|
90
|
|
|
$
|
2
|
|
Due after one year through five years
|
816
|
|
|
10
|
|
||
Due after five years through ten years
|
4,083
|
|
|
82
|
|
||
Due after ten years
|
1,429
|
|
|
48
|
|
||
Total
|
$
|
6,418
|
|
|
$
|
142
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||
(In millions)
|
Estimated Fair Value
|
|
Effective
Duration
(In years)
|
|
Estimated Fair Value
|
|
Effective
Duration
(In years)
|
||||||
Investments supporting Life & Group Non-Core
|
$
|
15,957
|
|
|
8.8
|
|
|
$
|
15,724
|
|
|
8.7
|
|
Other interest sensitive investments
|
26,218
|
|
|
4.6
|
|
|
26,669
|
|
|
4.6
|
|
||
Total
|
$
|
42,175
|
|
|
6.2
|
|
|
$
|
42,393
|
|
|
6.1
|
|
|
|
|
|
||||
(In millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Short term investments:
|
|
|
|
||||
Commercial paper
|
$
|
769
|
|
|
$
|
733
|
|
U.S. Treasury securities
|
175
|
|
|
433
|
|
||
Money market funds
|
52
|
|
|
44
|
|
||
Other
|
143
|
|
|
197
|
|
||
Total short term investments
|
$
|
1,139
|
|
|
$
|
1,407
|
|
•
|
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, legislative actions that increase claimant activity, 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.
|
•
|
in 2016, the United Kingdom (U.K.) held a referendum in which voters approved an exit from the European Union (E.U.), commonly referred to as "Brexit". As a result of the referendum, in 2017 the British government formally commenced the process to leave the E.U. and began negotiating the terms of treaties that will govern the U.K.'s future relationship with the E.U. Although the terms of any future treaties are unknown, changes in our international operating platform may be required to allow us to continue to write business in the E.U. after the completion of Brexit. As a result of these changes, the complexity and cost of regulatory compliance of our European business is likely to increase.
|
|
|
CNA Financial Corporation
|
|
|
|
Dated: May 1, 2017
|
By
|
/s/ D. Craig Mense
|
|
|
D. Craig Mense
Executive Vice President and
Chief Financial Officer
|
Description of Exhibit
|
Exhibit Number
|
|
|
Form of Award Letter to Executive Officers, along with Form of Award Terms, under the Long-Term Incentive Cash Plan
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10.1
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Certification of Chief Executive Officer
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31.1
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Certification of Chief Financial Officer
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31.2
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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)
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32.1
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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)
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32.2
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XBRL Instance Document
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101.INS
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XBRL Taxonomy Extension Schema
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101.SCH
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XBRL Taxonomy Extension Calculation Linkbase
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101.CAL
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XBRL Taxonomy Extension Definition Linkbase
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101.DEF
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XBRL Taxonomy Label Linkbase
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101.LAB
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XBRL Taxonomy Extension Presentation Linkbase
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101.PRE
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1.
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PSP Award.
For purposes of these Award Terms, the "Participant" shall be the eligible person identified in the Award Letter included with these Award Terms (the "Award Letter"). For purposes of these Award Terms, the amounts of the target PSP Award and the maximum PSP Award are, respectively, the amounts specified in the Award Letter. The PSP Award has been granted under the CNA Financial Corporation Incentive Compensation Plan, as amended from time to time (the "Plan"), which is incorporated into and forms a part of these Award Terms. Certain words, terms and phrases used in these Award Terms are defined in the Plan (rather than in these Award Terms or the Award Letter), and, except where the context clearly implies or indicates the contrary and except as otherwise provided in these Award Terms, a word, term, or phrase used or defined in the Plan is used or defined identically in these Award Terms. Other words, terms or phrases used in these Award Terms are defined in Paragraph 12 or elsewhere in these Award Terms or the Award Letter.
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2.
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Performance Period.
The "Performance Period" shall have the meaning set forth in the Award Letter.
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3.
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Vesting Period.
The "Vesting Period" shall have the meaning set forth in the Award Letter.
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4.
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Expiration.
If the Participant's Date of Termination of Affiliation occurs, prior to payment following the completion of the Vesting Period, then the following shall apply:
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a)
|
Retirement.
If the Participant's Date of Termination of Affiliation occurs before the last day of the Vesting Period by reason of the Participant's Retirement, the Participant shall be eligible for a payment with respect to the PSP Award in accordance with the terms of these Award Terms based on the Company’s actual performance for the period, but subject to a proration based on the number of months of participation for the portion of the Performance Period prior to the Participant's Date of Termination of Affiliation. Distribution under this paragraph shall be made as soon as practicable after the Participant’s Date of Termination of Affiliation.
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b)
|
Death or Disability.
If the Participant's Date of Termination of Affiliation occurs before the last day of the Vesting Period by reason of the Participant's death or Permanent Disability, the Participant (or the Participant's estate) shall be eligible for a payment with respect to the PSP Award in accordance with the terms of these Award Terms based on the Company’s actual performance for the period, but subject to proration based on the number of months of participation for the portion of the Performance Period prior to the Participant's Date of Termination of Affiliation. Distribution under this paragraph shall be made as soon as practicable after the Participant’s Date of Termination of Affiliation.
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c)
|
Voluntary, Involuntary Termination and Termination for Cause.
Except as provided above in this Paragraph 4, if the Participant's Date of Termination of Affiliation occurs at any time prior to the distribution of the PSP Award (as provided for in Paragraph 7 below) by reason of termination of employment by the Participant's employer for Cause, or by reason of the Participant's voluntary or involuntary termination, the Participant's PSP Award shall be entirely forfeited.
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5.
|
New Hires, Promotions and Demotions.
Except as otherwise provided below, the Participant’s PSP Award will be based on the target percentage set forth in the Award Letter, as well as the Participant’s base salary at the commencement of the Performance Period, and shall not be affected by changes in base salary or status occurring during the Performance Period.
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a)
|
New Hires.
If the Participant was hired on or prior to September 30 of the Performance Period, the Participant’s PSP Award will be prorated based on the appropriate number of complete months of participation. Any employee hired after September 30 of the Performance Period will not be eligible to participate until the following performance period. Nothing contained herein shall be construed to imply that any employee hired after the beginning of the Performance Period is entitled to any PSP Award unless such employee has received an Award Letter.
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b)
|
Promotions (First time participant or Current Officer) and Demotions.
If the Participant is promoted to the Officer ranks for the first time during the Performance Period, the PSP award will be prorated based on the appropriate number of complete months of participation during the Performance Period. If a current Participant is either promoted or demoted during the Performance Period, the PSP award will not be affected. Any changes will be reflected in the subsequent grant assuming the Participant is still eligible to receive an award.
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c)
|
Limits on Adjustments for Restricted Executives.
If following a promotion the Participant becomes a Restricted Executive (as defined in the Plan) in the year in which the PSP Award is paid, then the amount of the PSP Award determined under Section 5(b) shall not exceed the lesser of (i) the amount the Participant would have received based on the Participant’s target percentage prior to such promotion, but calculated as if the Participant’s new base salary had been in effect from the beginning of the Performance Period or (ii) $9,000,000.
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6.
|
Award Amount.
The amount to be distributed with respect to the PSP Award shall be determined according to the schedule in the Award Letter, subject to review and approval of the Compensation Committee of the Company’s Board of Directors (the “Committee”). If the Adjusted Net Operating Income at the end of the Performance Period is at least the minimum level, but less than the target level, the amount distributable with respect to the PSP Award shall be interpolated between the minimum threshold amount and the target amount. If the Net Operating Income at the end of the Performance Period is greater than the target level, but less than the maximum level, the amount distributable with respect to the PSP Award shall be interpolated between the target amount and the maximum amount. As soon as practicable after the necessary financial data for the Performance Period is available to the Committee, the Committee shall make a determination of the extent of the achievement of the performance goals for that Performance Period, and shall make a determination of the amount, if any, of the distribution to be made for the PSP Award to the Participant for the Performance Period. Payment of the PSP Award shall be subject to the requirements of Paragraph 8 and, in addition, the Committee may, in its discretion, reduce the amount of the PSP Award or cancel the PSP Award entirely, whether or not the requirements of Paragraph 8 are met.
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7.
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Settlement of Award
. The amount that is distributable for the PSP Award shall be settled as soon as practicable as determined by the Company after the Committee makes the determination described in Paragraph 6 and expiration of the Vesting Period. An amount equal to 100% of the PSP Award shall be settled by the transfer to the Participant of a number of shares of common stock of the Company determined by dividing such percentage by the fair market value of a share of stock on the Grant Date, rounded to the next lower whole number. Unless otherwise determined by the Committee, tax withholding applicable to the stock portion of the payment shall be satisfied by reducing the number of shares delivered. The shares of stock transferred to the Participant shall be subject to such restrictions on transfer or other conditions as the Committee shall determine.
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8.
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Minimum Performance Rating
. Notwithstanding the foregoing, the PSP Award shall not be paid, and shall be forfeited, if at the time the PSP Award would otherwise be payable the Participant is not rated at least “Partially Meets” (or the equivalent) under the Company’s performance evaluation rating system. The Committee may provide for the payment of all or a portion of the PSP Award to a Participant who does not satisfy the minimum rating requirement if the Committee determines in its discretion that circumstances nonetheless warrant such a payment.
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9.
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Restrictive Covenants
. As a condition to the receipt of the Award made hereby, the Participant agrees to be bound by the terms and conditions hereof and of the Plan, including the following restrictive covenants:
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a)
|
Non-Solicitations of Employees.
Participant agrees that during Participant’s employment with the Company, and for a period of 12 months following termination of Participant’s employment with the Company Participant will not: (i) employ or engage as a contractor or consultant for a position outside the Company, (ii) offer to employ or engage as a contractor or consultant for a position outside the Company, or (iii) solicit for employment or engagement as a contractor or consultant for a position outside the Company, any person who was employed by the Company at any time within 12 months before such employment, engagement, offer or solicitation.
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b)
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Non-Solicitations of Business.
Participant agrees that during Participant’s employment with the Company, and for a period of 12 months after the date of termination of Participant’s employment with the Company Participant will not solicit customers, agents or brokers, or direct others to solicit customers, agents or brokers, to move Company business away from the Company or to limit the amount of business the customers, agents or brokers do with the Company. This covenant is not intended to prohibit Participant from working in the insurance industry or from working for another commercial insurance company. However, Participant agrees that they cannot interfere with the Company’s relationships as described for the period of time referenced above.
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10.
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Administration
. The authority to manage and to control the operation and administration of these Award Terms shall be vested in the Committee and the Committee shall have all powers with respect to these Award Terms as it has with respect to the Plan. Any interpretations of these Award Terms by the Committee and any decisions made by it with respect to these Award Terms are final and binding on all persons.
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11.
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Governing Documents
. The Award Letter shall be subject to these Award Terms, and these Award Terms shall be subject to the provisions of the Plan. A copy of the Plan is included in the Company’s Proxy Statement, filed with the Securities and Exchange Commission on April 2, 2010, and a discussion of a First Amendment to the Plan is included in the Company’s Proxy Statement filed with the Securities and Exchange Commission on March 18, 2016, both of which are available at either
www.sec.gov
or
www.cna.com
, or are available from the Corporate Secretary of the Company. If discrepancies arise between the Award Letter and these Award Terms, these Award Terms will govern and if discrepancies arise between these Award Terms and the Plan, the terms of the Plan will govern; provided that if the discrepancy relates to the treatment of the PSP Award upon a Termination of Affiliation, or to any other provision of the Plan that, under the terms of the Plan, may be altered by the terms of an Award Agreement, these Award Terms shall govern. These Award Terms are subject to all interpretations, amendments, rules, and regulations promulgated by the Committee from time to time pursuant to the Plan.
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12.
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Definitions
. For purposes of these Award Terms, the following definitions shall apply:
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a)
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Adjusted Net Operating Income
. The “Adjusted Net Operating Income” of the Company is defined as net income to be reported to the shareholders in the Annual Report for [
year
]. In addition, the following items should be excluded:
|
1.
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Realized capital gain or losses, net of tax.
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2.
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The after-tax impact of items of gain, loss, income or expense (including but not limited to changes in accounting principles) which in the judgment of the Compensation Committee were extraordinary or unusual in nature or infrequent in occurrence.
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3.
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The after-tax impact of net investment income from limited partnership (LP) and common equity investments in excess of the [
year
] budgeted amount. To the extent that LP and common equity net investment income is below the budgeted amount, include LP and common equity net investment income up to the budgeted amount.
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4.
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The after-tax impact of reserve strengthening and adverse dividend or premium development associated with asbestos and environmental pollution reserves for accident years prior to 2000, and any favorable or unfavorable income statement impact of applying retroactive reinsurance accounting to the losses ceded to the NICO loss portfolio transfer.
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5.
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The after-tax impact of catastrophe losses of the Company or its subsidiaries in excess of the [
year
] budgeted amount. To the extent that catastrophe losses are below the budgeted amount, include catastrophe losses up to the budgeted amount
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6.
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The after-tax impact of net reserve strengthening due to unlocking of assumptions relating to long term care or benefit settlement option liabilities or relating to a disposition, loss portfolio transfer or other transaction that fixes or limits the Company’s exposure to the run-off Life & Group businesses that the Committee deems to be in the best interest of shareholders.
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7.
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Any income tax expense or benefit attributable to the impact of a change in the federal income tax rate on deferred income tax assets and liabilities.
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b)
|
Affiliate
. The term "Affiliate" means any business or entity in which at any relevant time the Company directly or indirectly holds greater than a 10% equity (voting or non-voting) interest.
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c)
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Cause
. The term
“
Cause
”
as to a Participant means (i) a Participant’s engaging in any act or omission involving theft, malfeasance, gross negligence, fraud, dishonesty, moral turpitude, unlawful conduct, unethical conduct or breach of fiduciary duty; (ii) a Participant’s willful or reckless material misconduct in the performance of the Participant’s duties, engaging in any act that violates, in any material respect, any written policy or procedure of the Company or any Affiliate or engaging in any conduct that results in adverse publicity or harm to the business or reputation of the Company or any Affiliate; or (iii) a Participant’s habitual neglect of duties;
provided, however,
that for purposes of clauses (ii) and (iii), “Cause” shall not include any one or more of the following: bad judgment, negligence or any act or omission believed by the Participant in good faith to have been in, or not opposed to, the best interests of the Company (without intent of the Participant to gain, directly or indirectly, a profit to which the Participant was not legally entitled). A Participant who agrees to resign from his or her affiliation with the Company or an Affiliate in lieu of being terminated for Cause may be deemed to have been terminated for Cause for purposes of these Award Terms.
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d)
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Date of Termination of Affiliation
. The Participant's "Date of Termination of Affiliation" shall be the first day occurring on or after the Grant Date on which the Participant is not employed by the Company or any Affiliate, as determined by the Company, regardless of the reason for the termination of employment; provided that a termination of employment shall not be deemed to occur by reason of a transfer of the Participant between the Company and an Affiliate or between two Affiliates; and further provided that the Participant's employment shall not be considered terminated while the Participant is on a leave of absence from the Company or an Affiliate approved by the Participant's employer. If, as a result of a sale or other transaction, the Participant's employer ceases to be an Affiliate (and the Participant's employer is or becomes an entity that is separate from the Company), the occurrence of such transaction shall be treated as the Participant's Date of Termination of Affiliation, caused by the Participant being discharged by the employer.
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e)
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Permanent Disability
. The term "Permanent Disability" means a physical or mental condition of the Participant which, as determined by the Committee in its sole discretion based on all available medical information, would qualify the Participant for benefits under the Company’s long-term disability plan as in effect when the determination is made (ignoring the requirements
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f)
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Retirement.
Termination because of "Retirement" shall mean the Participant's Date of Termination of Affiliation after ceasing to provide services to the Company or any Affiliate for any reason other than death, Permanent Disability, Cause or unsatisfactory performance, at or after the Participant’s attainment of age 62 or, if earlier, the Participant's Date of Termination of Affiliation which is designated by the Committee as a "Retirement" for purposes of these Award Terms.
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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.
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Dated:
|
May 1, 2017
|
By
|
/s/ Dino E. Robusto
|
|
|
|
|
Dino E. Robusto
|
|
|
|
|
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:
|
May 1, 2017
|
By
|
/s/ D. Craig Mense
|
|
|
|
|
D. Craig Mense
|
|
|
|
|
Chief Financial Officer
|
|
•
|
the Company’s quarterly report on Form 10-Q for the quarter ended
March 31, 2017
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:
|
May 1, 2017
|
By
|
/s/ Dino E. Robusto
|
|
|
|
|
Dino E. Robusto
|
|
|
|
|
Chief Executive Officer
|
|
•
|
the Company’s quarterly report on Form 10-Q for the quarter ended
March 31, 2017
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:
|
May 1, 2017
|
By
|
/s/ D. Craig Mense
|
|
|
|
|
D. Craig Mense
|
|
|
|
|
Chief Financial Officer
|
|