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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-4075851
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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200 Park Avenue, New York, N.Y.
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10166-0188
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Page
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Item 1.
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Financial Statements
(at September 30, 2013 (Unaudited) and December 31, 2012 and for the Three Months and Nine Months Ended September 30, 2013 and 2012 (Unaudited))
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 5.
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Other Information
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Item 6.
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Exhibits
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September 30, 2013
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December 31, 2012
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||||
Assets
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|
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||||
Investments:
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|
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||||
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $330,900 and $340,870, respectively: includes $3,940 and $3,378, respectively, relating to variable interest entities)
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$
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348,787
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$
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374,266
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Equity securities available-for-sale, at estimated fair value (cost: $2,978 and $2,838, respectively)
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3,241
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2,891
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Fair value option and trading securities, at estimated fair value (includes $636 and $659, respectively, of actively traded securities; and $91 and $112, respectively, relating to variable interest entities)
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16,646
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16,348
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Mortgage loans:
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||||
Held-for-investment, principally at amortized cost (net of valuation allowances of $326 and $347, respectively; includes $2,119 and $2,715, respectively, at estimated fair value, relating to variable interest entities)
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57,508
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56,592
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Held-for-sale, principally at estimated fair value (includes $0 and $49, respectively, under the fair value option)
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225
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414
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Mortgage loans, net
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57,733
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57,006
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Policy loans (includes $3 and $0, respectively, relating to variable interest entities)
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11,782
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11,884
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Real estate and real estate joint ventures (includes $9 and $10, respectively, relating to variable interest entities)
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10,053
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9,918
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Other limited partnership interests (includes $151 and $274, respectively, relating to variable interest entities)
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7,253
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6,688
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Short-term investments, principally at estimated fair value (includes $6 and $0, respectively, relating to variable interest entities)
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12,664
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16,906
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Other invested assets, principally at estimated fair value (includes $78 and $81, respectively, relating to variable interest entities)
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16,766
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21,145
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Total investments
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484,925
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517,052
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Cash and cash equivalents, principally at estimated fair value (includes $64 and $99, respectively, relating to variable interest entities)
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11,376
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15,738
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Accrued investment income (includes $27 and $13, respectively, relating to variable interest entities)
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4,519
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4,374
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Premiums, reinsurance and other receivables (includes $19 and $5, respectively, relating to variable interest entities)
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23,473
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21,634
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Deferred policy acquisition costs and value of business acquired (includes $251 and $0, respectively, relating to variable interest entities)
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25,639
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24,761
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Goodwill
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9,509
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9,953
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Other assets (includes $133 and $5, respectively, relating to variable interest entities)
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7,952
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7,876
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Separate account assets (includes $984 and $0, respectively, relating to variable interest entities)
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255,250
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235,393
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Total assets
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$
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822,643
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$
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836,781
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Liabilities and Equity
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||||
Liabilities
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||||
Future policy benefits (includes $468 and $0, respectively, relating to variable interest entities)
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$
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186,528
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$
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192,351
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Policyholder account balances (includes $55 and $0, respectively, relating to variable interest entities)
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214,512
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225,821
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Other policy-related balances (includes $124 and $0, respectively, relating to variable interest entities)
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15,530
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15,463
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Policyholder dividends payable
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769
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|
728
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Policyholder dividend obligation
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2,013
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3,828
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Payables for collateral under securities loaned and other transactions
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31,866
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33,687
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Bank deposits
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—
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6,416
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Short-term debt
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100
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100
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Long-term debt (includes $1,946 and $2,527, respectively, at estimated fair value, relating to variable interest entities)
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18,252
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19,062
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Collateral financing arrangements
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4,196
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4,196
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Junior subordinated debt securities
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3,193
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3,192
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Current income tax payable
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199
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|
401
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Deferred income tax liability
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5,955
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8,693
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Other liabilities (includes $89 and $40, respectively, relating to variable interest entities)
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22,902
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22,492
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Separate account liabilities (includes $984 and $0, respectively, relating to variable interest entities)
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255,250
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235,393
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Total liabilities
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761,265
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771,823
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Contingencies, Commitments and Guarantees (Note 15)
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Redeemable noncontrolling interests in partially-owned consolidated subsidiaries
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110
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121
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Equity
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MetLife, Inc.’s stockholders’ equity:
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||||
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized: 84,000,000 shares issued and outstanding; $2,100 aggregate liquidation preference
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1
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1
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Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,124,039,249 and 1,094,880,623 shares issued at September 30, 2013 and December 31, 2012, respectively; 1,120,845,362 and 1,091,686,736 shares outstanding at September 30, 2013 and December 31, 2012, respectively
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11
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11
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Additional paid-in capital
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29,221
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28,011
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Retained earnings
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26,766
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|
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25,205
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|
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Treasury stock, at cost; 3,193,887 shares at September 30, 2013 and December 31, 2012
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(172
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)
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(172
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)
|
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Accumulated other comprehensive income (loss)
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5,100
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11,397
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Total MetLife, Inc.’s stockholders’ equity
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60,927
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64,453
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Noncontrolling interests
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|
341
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|
|
384
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|
||
Total equity
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61,268
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|
64,837
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|
||
Total liabilities and equity
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$
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822,643
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|
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$
|
836,781
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Three Months
Ended September 30, |
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Nine Months
Ended September 30, |
||||||||||||
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2013
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2012
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2013
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2012
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||||||||
Revenues
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||||||||
Premiums
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$
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9,094
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|
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$
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9,096
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|
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$
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27,403
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|
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$
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27,386
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Universal life and investment-type product policy fees
|
2,372
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|
|
2,131
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|
|
7,034
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|
|
6,306
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|
||||
Net investment income
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5,026
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|
|
5,517
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|
|
16,385
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|
|
16,436
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|
||||
Other revenues
|
476
|
|
|
455
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|
|
1,446
|
|
|
1,445
|
|
||||
Net investment gains (losses):
|
|
|
|
|
|
|
|
||||||||
Other-than-temporary impairments on fixed maturity securities
|
(13
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)
|
|
(57
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)
|
|
(77
|
)
|
|
(310
|
)
|
||||
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)
|
(21
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)
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|
10
|
|
|
(56
|
)
|
|
39
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|
||||
Other net investment gains (losses)
|
(51
|
)
|
|
69
|
|
|
472
|
|
|
119
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|
||||
Total net investment gains (losses)
|
(85
|
)
|
|
22
|
|
|
339
|
|
|
(152
|
)
|
||||
Net derivative gains (losses)
|
(546
|
)
|
|
(718
|
)
|
|
(2,866
|
)
|
|
(604
|
)
|
||||
Total revenues
|
16,337
|
|
|
16,503
|
|
|
49,741
|
|
|
50,817
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims
|
9,472
|
|
|
8,943
|
|
|
27,827
|
|
|
26,958
|
|
||||
Interest credited to policyholder account balances
|
1,600
|
|
|
2,102
|
|
|
6,036
|
|
|
5,681
|
|
||||
Policyholder dividends
|
312
|
|
|
355
|
|
|
954
|
|
|
1,050
|
|
||||
Goodwill impairment
|
—
|
|
|
1,868
|
|
|
—
|
|
|
1,868
|
|
||||
Other expenses
|
3,977
|
|
|
4,245
|
|
|
12,140
|
|
|
13,341
|
|
||||
Total expenses
|
15,361
|
|
|
17,513
|
|
|
46,957
|
|
|
48,898
|
|
||||
Income (loss) from continuing operations before provision for income tax
|
976
|
|
|
(1,010
|
)
|
|
2,784
|
|
|
1,919
|
|
||||
Provision for income tax expense (benefit)
|
3
|
|
|
(53
|
)
|
|
308
|
|
|
710
|
|
||||
Income (loss) from continuing operations, net of income tax
|
973
|
|
|
(957
|
)
|
|
2,476
|
|
|
1,209
|
|
||||
Income (loss) from discontinued operations, net of income tax
|
2
|
|
|
—
|
|
|
1
|
|
|
17
|
|
||||
Net income (loss)
|
975
|
|
|
(957
|
)
|
|
2,477
|
|
|
1,226
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
3
|
|
|
(3
|
)
|
|
17
|
|
|
29
|
|
||||
Net income (loss) attributable to MetLife, Inc.
|
972
|
|
|
(954
|
)
|
|
2,460
|
|
|
1,197
|
|
||||
Less: Preferred stock dividends
|
30
|
|
|
30
|
|
|
91
|
|
|
91
|
|
||||
Net income (loss) available to MetLife, Inc.’s common shareholders
|
$
|
942
|
|
|
$
|
(984
|
)
|
|
$
|
2,369
|
|
|
$
|
1,106
|
|
Comprehensive income (loss)
|
$
|
(188
|
)
|
|
$
|
1,655
|
|
|
$
|
(3,891
|
)
|
|
$
|
6,474
|
|
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax
|
(58
|
)
|
|
19
|
|
|
(54
|
)
|
|
35
|
|
||||
Comprehensive income (loss) attributable to MetLife, Inc.
|
$
|
(130
|
)
|
|
$
|
1,636
|
|
|
$
|
(3,837
|
)
|
|
$
|
6,439
|
|
Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s common shareholders per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.85
|
|
|
$
|
(0.92
|
)
|
|
$
|
2.15
|
|
|
$
|
1.02
|
|
Diluted
|
$
|
0.84
|
|
|
$
|
(0.92
|
)
|
|
$
|
2.14
|
|
|
$
|
1.01
|
|
Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.85
|
|
|
$
|
(0.92
|
)
|
|
$
|
2.15
|
|
|
$
|
1.04
|
|
Diluted
|
$
|
0.84
|
|
|
$
|
(0.92
|
)
|
|
$
|
2.14
|
|
|
$
|
1.03
|
|
Cash dividends declared per common share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.735
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Preferred
Stock
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
at Cost
|
|
Net
Unrealized
Investment
Gains (Losses)
|
|
Other-Than-
Temporary
Impairments
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
MetLife, Inc.’s
Stockholders’
Equity
|
|
Noncontrolling
Interests (1)
|
|
Total
Equity
|
||||||||||||||||||||||||
Balance at December 31, 2012
|
$
|
1
|
|
|
$
|
11
|
|
|
$
|
28,011
|
|
|
$
|
25,205
|
|
|
$
|
(172
|
)
|
|
$
|
14,642
|
|
|
$
|
(223
|
)
|
|
$
|
(533
|
)
|
|
$
|
(2,489
|
)
|
|
$
|
64,453
|
|
|
$
|
384
|
|
|
$
|
64,837
|
|
Common stock issuance — newly issued shares
|
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
1,000
|
|
|||||||||||||||||||||
Stock-based compensation
|
|
|
|
|
249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
249
|
|
|
|
|
249
|
|
|||||||||||||||||||||
Dividends on preferred stock
|
|
|
|
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(91
|
)
|
|
|
|
(91
|
)
|
|||||||||||||||||||||
Dividends on common stock
|
|
|
|
|
|
|
(808
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(808
|
)
|
|
|
|
(808
|
)
|
|||||||||||||||||||||
Change in equity of noncontrolling interests
|
|
|
|
|
(39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(39
|
)
|
|
11
|
|
|
(28
|
)
|
||||||||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
2,460
|
|
|
|
|
|
|
|
|
|
|
|
|
2,460
|
|
|
17
|
|
|
2,477
|
|
||||||||||||||||||||
Other comprehensive income (loss), net of income tax
|
|
|
|
|
|
|
|
|
|
|
(5,389
|
)
|
|
70
|
|
|
(1,085
|
)
|
|
107
|
|
|
(6,297
|
)
|
|
(71
|
)
|
|
(6,368
|
)
|
|||||||||||||||||
Balance at September 30, 2013
|
$
|
1
|
|
|
$
|
11
|
|
|
$
|
29,221
|
|
|
$
|
26,766
|
|
|
$
|
(172
|
)
|
|
$
|
9,253
|
|
|
$
|
(153
|
)
|
|
$
|
(1,618
|
)
|
|
$
|
(2,382
|
)
|
|
$
|
60,927
|
|
|
$
|
341
|
|
|
$
|
61,268
|
|
(1)
|
Net income (loss) attributable to noncontrolling interests excludes gains (losses) of redeemable noncontrolling interests in partially-owned consolidated subsidiaries of less than
$1 million
.
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Preferred
Stock
|
|
Common
Stock
|
|
Additional Paid-in Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
at Cost
|
|
Net
Unrealized
Investment
Gains (Losses)
|
|
Other-Than-
Temporary
Impairments
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
MetLife, Inc.’s
Stockholders’
Equity
|
|
Noncontrolling
Interests (1)
|
|
Total
Equity
|
||||||||||||||||||||||||
Balance at December 31, 2011
|
$
|
1
|
|
|
$
|
11
|
|
|
$
|
26,782
|
|
|
$
|
24,814
|
|
|
$
|
(172
|
)
|
|
$
|
9,115
|
|
|
$
|
(441
|
)
|
|
$
|
(648
|
)
|
|
$
|
(1,943
|
)
|
|
$
|
57,519
|
|
|
$
|
370
|
|
|
$
|
57,889
|
|
Stock-based compensation
|
|
|
|
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
182
|
|
|
|
|
182
|
|
|||||||||||||||||||||
Dividends on preferred stock
|
|
|
|
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(91
|
)
|
|
|
|
(91
|
)
|
|||||||||||||||||||||
Change in equity of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(56
|
)
|
|
(56
|
)
|
||||||||||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
1,197
|
|
|
|
|
|
|
|
|
|
|
|
|
1,197
|
|
|
24
|
|
|
1,221
|
|
||||||||||||||||||||
Other comprehensive income (loss), net of income tax
|
|
|
|
|
|
|
|
|
|
|
4,908
|
|
|
170
|
|
|
89
|
|
|
75
|
|
|
5,242
|
|
|
11
|
|
|
5,253
|
|
|||||||||||||||||
Balance at September 30, 2012
|
$
|
1
|
|
|
$
|
11
|
|
|
$
|
26,964
|
|
|
$
|
25,920
|
|
|
$
|
(172
|
)
|
|
$
|
14,023
|
|
|
$
|
(271
|
)
|
|
$
|
(559
|
)
|
|
$
|
(1,868
|
)
|
|
$
|
64,049
|
|
|
$
|
349
|
|
|
$
|
64,398
|
|
(1)
|
Net income (loss) attributable to noncontrolling interests excludes gains (losses) of redeemable noncontrolling interests in partially-owned consolidated subsidiaries of
$5 million
.
|
|
Nine Months
Ended September 30, |
||||||
|
2013
|
|
2012
|
||||
Net cash provided by (used in) operating activities
|
$
|
9,984
|
|
|
$
|
15,288
|
|
Cash flows from investing activities
|
|
|
|
||||
Sales, maturities and repayments of:
|
|
|
|
||||
Fixed maturity securities
|
95,972
|
|
|
78,296
|
|
||
Equity securities
|
567
|
|
|
1,011
|
|
||
Mortgage loans
|
8,000
|
|
|
6,696
|
|
||
Real estate and real estate joint ventures
|
323
|
|
|
669
|
|
||
Other limited partnership interests
|
546
|
|
|
690
|
|
||
Purchases of:
|
|
|
|
||||
Fixed maturity securities
|
(93,304
|
)
|
|
(91,998
|
)
|
||
Equity securities
|
(812
|
)
|
|
(499
|
)
|
||
Mortgage loans
|
(9,570
|
)
|
|
(7,585
|
)
|
||
Real estate and real estate joint ventures
|
(991
|
)
|
|
(595
|
)
|
||
Other limited partnership interests
|
(1,077
|
)
|
|
(1,017
|
)
|
||
Cash received in connection with freestanding derivatives
|
1,333
|
|
|
1,560
|
|
||
Cash paid in connection with freestanding derivatives
|
(5,593
|
)
|
|
(2,534
|
)
|
||
Net change in securitized reverse residential mortgage loans
|
—
|
|
|
(1,198
|
)
|
||
Sales of businesses, net of cash and cash equivalents disposed of $13 and $0, respectively
|
386
|
|
|
—
|
|
||
Sale of bank deposits
|
(6,395
|
)
|
|
—
|
|
||
Net change in policy loans
|
(93
|
)
|
|
(116
|
)
|
||
Net change in short-term investments
|
4,272
|
|
|
2,825
|
|
||
Net change in other invested assets
|
(121
|
)
|
|
(206
|
)
|
||
Other, net
|
(18
|
)
|
|
(74
|
)
|
||
Net cash provided by (used in) investing activities
|
(6,575
|
)
|
|
(14,075
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Policyholder account balances:
|
|
|
|
||||
Deposits
|
60,168
|
|
|
69,438
|
|
||
Withdrawals
|
(65,141
|
)
|
|
(64,718
|
)
|
||
Net change in payables for collateral under securities loaned and other transactions
|
(1,821
|
)
|
|
4,777
|
|
||
Net change in bank deposits
|
8
|
|
|
(4,052
|
)
|
||
Net change in short-term debt
|
—
|
|
|
(586
|
)
|
||
Long-term debt issued
|
—
|
|
|
750
|
|
||
Long-term debt repaid
|
(765
|
)
|
|
(1,106
|
)
|
||
Collateral financing arrangements repaid
|
—
|
|
|
(349
|
)
|
||
Cash received (paid) in connection with collateral financing arrangements
|
—
|
|
|
(44
|
)
|
||
Net change in liability for securitized reverse residential mortgage loans
|
—
|
|
|
1,198
|
|
||
Common stock issued, net of issuance costs
|
1,000
|
|
|
—
|
|
||
Dividends on preferred stock
|
(91
|
)
|
|
(91
|
)
|
||
Dividends on common stock
|
(808
|
)
|
|
—
|
|
||
Other, net
|
(134
|
)
|
|
35
|
|
||
Net cash provided by (used in) financing activities
|
(7,584
|
)
|
|
5,252
|
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents balances
|
(187
|
)
|
|
24
|
|
||
Change in cash and cash equivalents
|
(4,362
|
)
|
|
6,489
|
|
||
Cash and cash equivalents, beginning of period
|
15,738
|
|
|
10,461
|
|
||
Cash and cash equivalents, end of period
|
$
|
11,376
|
|
|
$
|
16,950
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Net cash paid (received) for:
|
|
|
|
||||
Interest
|
$
|
891
|
|
|
$
|
946
|
|
Income tax
|
$
|
539
|
|
|
$
|
442
|
|
Non-cash transactions:
|
|
|
|
||||
Real estate and real estate joint ventures acquired in satisfaction of debt
|
$
|
55
|
|
|
$
|
334
|
|
Collateral financing arrangements repaid
|
$
|
—
|
|
|
$
|
102
|
|
Redemption of advances agreements in long-term debt (1)
|
$
|
—
|
|
|
$
|
3,806
|
|
Issuance of funding agreements in policyholder account balances (1)
|
$
|
—
|
|
|
$
|
3,806
|
|
(1)
|
See Note 3 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report.
|
•
|
Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity guaranteed minimum income benefits (“GMIBs”) fees (“GMIB Fees”);
|
•
|
Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iv) excludes certain amounts related to contractholder-directed unit-linked investments, and (v) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
|
•
|
Other revenues are adjusted for settlements of foreign currency earnings hedges.
|
•
|
Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, (iii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iv) market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”);
|
•
|
Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances (“PABs”) but do not qualify for hedge accounting treatment and excludes amounts related to net investment income earned on contractholder-directed unit-linked investments;
|
•
|
Amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments;
|
•
|
Amortization of negative VOBA excludes amounts related to Market Value Adjustments;
|
•
|
Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
|
•
|
Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements, and (iii) acquisition and integration costs.
|
|
|
Operating Earnings
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Three Months Ended September 30, 2013
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Total
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
|
Adjustments
|
|
Total
Consolidated
|
||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Premiums
|
|
$
|
1,607
|
|
|
$
|
3,767
|
|
|
$
|
490
|
|
|
$
|
692
|
|
|
$
|
6,556
|
|
|
$
|
1,922
|
|
|
$
|
586
|
|
|
$
|
30
|
|
|
$
|
9,094
|
|
|
$
|
—
|
|
|
$
|
9,094
|
|
Universal life and investment-type product policy fees
|
|
1,257
|
|
|
171
|
|
|
54
|
|
|
222
|
|
|
1,704
|
|
|
438
|
|
|
100
|
|
|
34
|
|
|
2,276
|
|
|
96
|
|
|
2,372
|
|
|||||||||||
Net investment income
|
|
1,928
|
|
|
459
|
|
|
1,424
|
|
|
354
|
|
|
4,165
|
|
|
696
|
|
|
124
|
|
|
58
|
|
|
5,043
|
|
|
(17
|
)
|
|
5,026
|
|
|||||||||||
Other revenues
|
|
267
|
|
|
103
|
|
|
68
|
|
|
—
|
|
|
438
|
|
|
22
|
|
|
21
|
|
|
5
|
|
|
486
|
|
|
(10
|
)
|
|
476
|
|
|||||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85
|
)
|
|
(85
|
)
|
|||||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(546
|
)
|
|
(546
|
)
|
|||||||||||
Total revenues
|
|
5,059
|
|
|
4,500
|
|
|
2,036
|
|
|
1,268
|
|
|
12,863
|
|
|
3,078
|
|
|
831
|
|
|
127
|
|
|
16,899
|
|
|
(562
|
)
|
|
16,337
|
|
|||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
2,234
|
|
|
3,527
|
|
|
1,144
|
|
|
637
|
|
|
7,542
|
|
|
1,506
|
|
|
243
|
|
|
25
|
|
|
9,316
|
|
|
468
|
|
|
9,784
|
|
|||||||||||
Interest credited to policyholder account balances
|
|
582
|
|
|
38
|
|
|
292
|
|
|
106
|
|
|
1,018
|
|
|
407
|
|
|
37
|
|
|
10
|
|
|
1,472
|
|
|
128
|
|
|
1,600
|
|
|||||||||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Capitalization of DAC
|
|
(318
|
)
|
|
(37
|
)
|
|
(2
|
)
|
|
(103
|
)
|
|
(460
|
)
|
|
(515
|
)
|
|
(173
|
)
|
|
(5
|
)
|
|
(1,153
|
)
|
|
—
|
|
|
(1,153
|
)
|
|||||||||||
Amortization of DAC and VOBA
|
|
315
|
|
|
37
|
|
|
4
|
|
|
63
|
|
|
419
|
|
|
393
|
|
|
166
|
|
|
1
|
|
|
979
|
|
|
(138
|
)
|
|
841
|
|
|||||||||||
Amortization of negative VOBA
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(99
|
)
|
|
(13
|
)
|
|
—
|
|
|
(113
|
)
|
|
(13
|
)
|
|
(126
|
)
|
|||||||||||
Interest expense on debt
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
286
|
|
|
288
|
|
|
29
|
|
|
317
|
|
|||||||||||
Other expenses
|
|
1,245
|
|
|
595
|
|
|
134
|
|
|
395
|
|
|
2,369
|
|
|
1,040
|
|
|
443
|
|
|
179
|
|
|
4,031
|
|
|
67
|
|
|
4,098
|
|
|||||||||||
Total expenses
|
|
4,057
|
|
|
4,160
|
|
|
1,575
|
|
|
1,097
|
|
|
10,889
|
|
|
2,732
|
|
|
703
|
|
|
496
|
|
|
14,820
|
|
|
541
|
|
|
15,361
|
|
|||||||||||
Provision for income tax expense (benefit)
|
|
343
|
|
|
114
|
|
|
161
|
|
|
38
|
|
|
656
|
|
|
89
|
|
|
43
|
|
|
(239
|
)
|
|
549
|
|
|
(546
|
)
|
|
3
|
|
|||||||||||
Operating earnings
|
|
$
|
659
|
|
|
$
|
226
|
|
|
$
|
300
|
|
|
$
|
133
|
|
|
$
|
1,318
|
|
|
$
|
257
|
|
|
$
|
85
|
|
|
$
|
(130
|
)
|
|
1,530
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(562
|
)
|
|
|
|
|
|||||||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(541
|
)
|
|
|
|
|
|||||||||||||||||||||
Provision for income tax (expense) benefit
|
|
546
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
|
$
|
973
|
|
|
|
|
$
|
973
|
|
|
|
Operating Earnings
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Three Months Ended September 30, 2012
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Total
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
|
Adjustments
|
|
Total
Consolidated
|
||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Premiums
|
|
$
|
1,604
|
|
|
$
|
3,753
|
|
|
$
|
450
|
|
|
$
|
610
|
|
|
$
|
6,417
|
|
|
$
|
2,112
|
|
|
$
|
536
|
|
|
$
|
15
|
|
|
$
|
9,080
|
|
|
$
|
16
|
|
|
$
|
9,096
|
|
Universal life and investment-type product policy fees
|
|
1,132
|
|
|
166
|
|
|
53
|
|
|
189
|
|
|
1,540
|
|
|
388
|
|
|
82
|
|
|
38
|
|
|
2,048
|
|
|
83
|
|
|
2,131
|
|
|||||||||||
Net investment income
|
|
1,930
|
|
|
450
|
|
|
1,421
|
|
|
299
|
|
|
4,100
|
|
|
709
|
|
|
122
|
|
|
117
|
|
|
5,048
|
|
|
469
|
|
|
5,517
|
|
|||||||||||
Other revenues
|
|
221
|
|
|
100
|
|
|
64
|
|
|
3
|
|
|
388
|
|
|
4
|
|
|
35
|
|
|
8
|
|
|
435
|
|
|
20
|
|
|
455
|
|
|||||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
22
|
|
|||||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(718
|
)
|
|
(718
|
)
|
|||||||||||
Total revenues
|
|
4,887
|
|
|
4,469
|
|
|
1,988
|
|
|
1,101
|
|
|
12,445
|
|
|
3,213
|
|
|
775
|
|
|
178
|
|
|
16,611
|
|
|
(108
|
)
|
|
16,503
|
|
|||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
2,228
|
|
|
3,449
|
|
|
1,070
|
|
|
507
|
|
|
7,254
|
|
|
1,455
|
|
|
255
|
|
|
31
|
|
|
8,995
|
|
|
303
|
|
|
9,298
|
|
|||||||||||
Interest credited to policyholder account balances
|
|
598
|
|
|
42
|
|
|
339
|
|
|
99
|
|
|
1,078
|
|
|
468
|
|
|
32
|
|
|
11
|
|
|
1,589
|
|
|
513
|
|
|
2,102
|
|
|||||||||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,868
|
|
|
1,868
|
|
|||||||||||
Capitalization of DAC
|
|
(430
|
)
|
|
(38
|
)
|
|
(13
|
)
|
|
(83
|
)
|
|
(564
|
)
|
|
(579
|
)
|
|
(158
|
)
|
|
—
|
|
|
(1,301
|
)
|
|
(1
|
)
|
|
(1,302
|
)
|
|||||||||||
Amortization of DAC and VOBA
|
|
438
|
|
|
40
|
|
|
4
|
|
|
42
|
|
|
524
|
|
|
396
|
|
|
130
|
|
|
1
|
|
|
1,051
|
|
|
(43
|
)
|
|
1,008
|
|
|||||||||||
Amortization of negative VOBA
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(128
|
)
|
|
(26
|
)
|
|
—
|
|
|
(155
|
)
|
|
(15
|
)
|
|
(170
|
)
|
|||||||||||
Interest expense on debt
|
|
—
|
|
|
1
|
|
|
2
|
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
285
|
|
|
286
|
|
|
40
|
|
|
326
|
|
|||||||||||
Other expenses
|
|
1,308
|
|
|
547
|
|
|
120
|
|
|
353
|
|
|
2,328
|
|
|
1,206
|
|
|
440
|
|
|
146
|
|
|
4,120
|
|
|
263
|
|
|
4,383
|
|
|||||||||||
Total expenses
|
|
4,142
|
|
|
4,041
|
|
|
1,522
|
|
|
913
|
|
|
10,618
|
|
|
2,818
|
|
|
675
|
|
|
474
|
|
|
14,585
|
|
|
2,928
|
|
|
17,513
|
|
|||||||||||
Provision for income tax expense (benefit)
|
|
253
|
|
|
145
|
|
|
163
|
|
|
36
|
|
|
597
|
|
|
136
|
|
|
38
|
|
|
(192
|
)
|
|
579
|
|
|
(632
|
)
|
|
(53
|
)
|
|||||||||||
Operating earnings
|
|
$
|
492
|
|
|
$
|
283
|
|
|
$
|
303
|
|
|
$
|
152
|
|
|
$
|
1,230
|
|
|
$
|
259
|
|
|
$
|
62
|
|
|
$
|
(104
|
)
|
|
1,447
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(108
|
)
|
|
|
|
|
|||||||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,928
|
)
|
|
|
|
|
|||||||||||||||||||||
Provision for income tax (expense) benefit
|
|
632
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
|
$
|
(957
|
)
|
|
|
|
$
|
(957
|
)
|
|
|
Operating Earnings
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2013
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Total
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
|
Adjustments
|
|
Total
Consolidated
|
||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Premiums
|
|
$
|
4,735
|
|
|
$
|
11,438
|
|
|
$
|
1,457
|
|
|
$
|
2,077
|
|
|
$
|
19,707
|
|
|
$
|
5,900
|
|
|
$
|
1,711
|
|
|
$
|
84
|
|
|
$
|
27,402
|
|
|
$
|
1
|
|
|
$
|
27,403
|
|
Universal life and investment-type product policy fees
|
|
3,662
|
|
|
521
|
|
|
187
|
|
|
682
|
|
|
5,052
|
|
|
1,324
|
|
|
287
|
|
|
105
|
|
|
6,768
|
|
|
266
|
|
|
7,034
|
|
|||||||||||
Net investment income
|
|
5,876
|
|
|
1,384
|
|
|
4,302
|
|
|
912
|
|
|
12,474
|
|
|
2,151
|
|
|
372
|
|
|
282
|
|
|
15,279
|
|
|
1,106
|
|
|
16,385
|
|
|||||||||||
Other revenues
|
|
767
|
|
|
316
|
|
|
208
|
|
|
9
|
|
|
1,300
|
|
|
63
|
|
|
82
|
|
|
22
|
|
|
1,467
|
|
|
(21
|
)
|
|
1,446
|
|
|||||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
339
|
|
|
339
|
|
|||||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,866
|
)
|
|
(2,866
|
)
|
|||||||||||
Total revenues
|
|
15,040
|
|
|
13,659
|
|
|
6,154
|
|
|
3,680
|
|
|
38,533
|
|
|
9,438
|
|
|
2,452
|
|
|
493
|
|
|
50,916
|
|
|
(1,175
|
)
|
|
49,741
|
|
|||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
6,659
|
|
|
10,681
|
|
|
3,352
|
|
|
1,792
|
|
|
22,484
|
|
|
4,354
|
|
|
736
|
|
|
52
|
|
|
27,626
|
|
|
1,155
|
|
|
28,781
|
|
|||||||||||
Interest credited to policyholder account balances
|
|
1,750
|
|
|
116
|
|
|
940
|
|
|
313
|
|
|
3,119
|
|
|
1,286
|
|
|
109
|
|
|
33
|
|
|
4,547
|
|
|
1,489
|
|
|
6,036
|
|
|||||||||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Capitalization of DAC
|
|
(1,036
|
)
|
|
(105
|
)
|
|
(25
|
)
|
|
(316
|
)
|
|
(1,482
|
)
|
|
(1,583
|
)
|
|
(542
|
)
|
|
(14
|
)
|
|
(3,621
|
)
|
|
—
|
|
|
(3,621
|
)
|
|||||||||||
Amortization of DAC and VOBA
|
|
1,042
|
|
|
104
|
|
|
21
|
|
|
220
|
|
|
1,387
|
|
|
1,186
|
|
|
526
|
|
|
1
|
|
|
3,100
|
|
|
(477
|
)
|
|
2,623
|
|
|||||||||||
Amortization of negative VOBA
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(325
|
)
|
|
(41
|
)
|
|
—
|
|
|
(368
|
)
|
|
(42
|
)
|
|
(410
|
)
|
|||||||||||
Interest expense on debt
|
|
—
|
|
|
1
|
|
|
7
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
855
|
|
|
863
|
|
|
96
|
|
|
959
|
|
|||||||||||
Other expenses
|
|
3,788
|
|
|
1,761
|
|
|
398
|
|
|
1,157
|
|
|
7,104
|
|
|
3,188
|
|
|
1,351
|
|
|
489
|
|
|
12,132
|
|
|
457
|
|
|
12,589
|
|
|||||||||||
Total expenses
|
|
12,203
|
|
|
12,558
|
|
|
4,693
|
|
|
3,164
|
|
|
32,618
|
|
|
8,106
|
|
|
2,139
|
|
|
1,416
|
|
|
44,279
|
|
|
2,678
|
|
|
46,957
|
|
|||||||||||
Provision for income tax expense (benefit)
|
|
971
|
|
|
370
|
|
|
512
|
|
|
115
|
|
|
1,968
|
|
|
412
|
|
|
73
|
|
|
(635
|
)
|
|
1,818
|
|
|
(1,510
|
)
|
|
308
|
|
|||||||||||
Operating earnings
|
|
$
|
1,866
|
|
|
$
|
731
|
|
|
$
|
949
|
|
|
$
|
401
|
|
|
$
|
3,947
|
|
|
$
|
920
|
|
|
$
|
240
|
|
|
$
|
(288
|
)
|
|
4,819
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,175
|
)
|
|
|
|
|
|||||||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,678
|
)
|
|
|
|
|
|||||||||||||||||||||
Provision for income tax (expense) benefit
|
|
1,510
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
|
$
|
2,476
|
|
|
|
|
$
|
2,476
|
|
|
|
Operating Earnings
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2012
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Total
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
|
Adjustments
|
|
Total
Consolidated
|
||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Premiums
|
|
$
|
4,804
|
|
|
$
|
11,021
|
|
|
$
|
1,480
|
|
|
$
|
1,948
|
|
|
$
|
19,253
|
|
|
$
|
6,215
|
|
|
$
|
1,815
|
|
|
$
|
43
|
|
|
$
|
27,326
|
|
|
$
|
60
|
|
|
$
|
27,386
|
|
Universal life and investment-type product policy fees
|
|
3,365
|
|
|
497
|
|
|
161
|
|
|
581
|
|
|
4,604
|
|
|
1,102
|
|
|
233
|
|
|
117
|
|
|
6,056
|
|
|
250
|
|
|
6,306
|
|
|||||||||||
Net investment income
|
|
5,735
|
|
|
1,325
|
|
|
4,253
|
|
|
881
|
|
|
12,194
|
|
|
2,150
|
|
|
406
|
|
|
547
|
|
|
15,297
|
|
|
1,139
|
|
|
16,436
|
|
|||||||||||
Other revenues
|
|
647
|
|
|
320
|
|
|
193
|
|
|
11
|
|
|
1,171
|
|
|
17
|
|
|
98
|
|
|
27
|
|
|
1,313
|
|
|
132
|
|
|
1,445
|
|
|||||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(152
|
)
|
|
(152
|
)
|
|||||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(604
|
)
|
|
(604
|
)
|
|||||||||||
Total revenues
|
|
14,551
|
|
|
13,163
|
|
|
6,087
|
|
|
3,421
|
|
|
37,222
|
|
|
9,484
|
|
|
2,552
|
|
|
734
|
|
|
49,992
|
|
|
825
|
|
|
50,817
|
|
|||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
6,668
|
|
|
10,153
|
|
|
3,293
|
|
|
1,667
|
|
|
21,781
|
|
|
4,250
|
|
|
941
|
|
|
94
|
|
|
27,066
|
|
|
942
|
|
|
28,008
|
|
|||||||||||
Interest credited to policyholder account balances
|
|
1,784
|
|
|
127
|
|
|
1,016
|
|
|
289
|
|
|
3,216
|
|
|
1,323
|
|
|
91
|
|
|
23
|
|
|
4,653
|
|
|
1,028
|
|
|
5,681
|
|
|||||||||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,868
|
|
|
1,868
|
|
|||||||||||
Capitalization of DAC
|
|
(1,352
|
)
|
|
(102
|
)
|
|
(28
|
)
|
|
(238
|
)
|
|
(1,720
|
)
|
|
(1,721
|
)
|
|
(535
|
)
|
|
—
|
|
|
(3,976
|
)
|
|
(5
|
)
|
|
(3,981
|
)
|
|||||||||||
Amortization of DAC and VOBA
|
|
1,319
|
|
|
98
|
|
|
18
|
|
|
151
|
|
|
1,586
|
|
|
1,188
|
|
|
456
|
|
|
1
|
|
|
3,231
|
|
|
(30
|
)
|
|
3,201
|
|
|||||||||||
Amortization of negative VOBA
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|
(387
|
)
|
|
(65
|
)
|
|
—
|
|
|
(456
|
)
|
|
(50
|
)
|
|
(506
|
)
|
|||||||||||
Interest expense on debt
|
|
—
|
|
|
1
|
|
|
6
|
|
|
(3
|
)
|
|
4
|
|
|
5
|
|
|
3
|
|
|
886
|
|
|
898
|
|
|
128
|
|
|
1,026
|
|
|||||||||||
Other expenses
|
|
4,060
|
|
|
1,692
|
|
|
368
|
|
|
1,002
|
|
|
7,122
|
|
|
3,550
|
|
|
1,333
|
|
|
409
|
|
|
12,414
|
|
|
1,187
|
|
|
13,601
|
|
|||||||||||
Total expenses
|
|
12,479
|
|
|
11,969
|
|
|
4,673
|
|
|
2,864
|
|
|
31,985
|
|
|
8,208
|
|
|
2,224
|
|
|
1,413
|
|
|
43,830
|
|
|
5,068
|
|
|
48,898
|
|
|||||||||||
Provision for income tax expense (benefit)
|
|
703
|
|
|
401
|
|
|
495
|
|
|
122
|
|
|
1,721
|
|
|
437
|
|
|
116
|
|
|
(516
|
)
|
|
1,758
|
|
|
(1,048
|
)
|
|
710
|
|
|||||||||||
Operating earnings
|
|
$
|
1,369
|
|
|
$
|
793
|
|
|
$
|
919
|
|
|
$
|
435
|
|
|
$
|
3,516
|
|
|
$
|
839
|
|
|
$
|
212
|
|
|
$
|
(163
|
)
|
|
4,404
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
825
|
|
|
|
|
|
|||||||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,068
|
)
|
|
|
|
|
|||||||||||||||||||||
Provision for income tax (expense) benefit
|
|
1,048
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
|
$
|
1,209
|
|
|
|
|
$
|
1,209
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
(In millions)
|
||||||
Retail
|
$
|
342,665
|
|
|
$
|
332,387
|
|
Group, Voluntary & Worksite Benefits
|
43,648
|
|
|
44,138
|
|
||
Corporate Benefit Funding
|
218,819
|
|
|
217,352
|
|
||
Latin America
|
24,116
|
|
|
23,272
|
|
||
Asia
|
119,742
|
|
|
131,138
|
|
||
EMEA
|
24,203
|
|
|
23,474
|
|
||
Corporate & Other
|
49,450
|
|
|
65,020
|
|
||
Total
|
$
|
822,643
|
|
|
$
|
836,781
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
In the
Event of Death
|
|
At
Annuitization
|
|
In the
Event of Death
|
|
At
Annuitization
|
||||||||
|
(In millions)
|
||||||||||||||
Annuity Contracts
(1)
|
|
|
|
|
|
|
|
||||||||
Variable Annuity Guarantees
|
|
|
|
|
|
|
|
||||||||
Total contract account value (2)
|
$
|
195,725
|
|
|
$
|
97,145
|
|
|
$
|
184,095
|
|
|
$
|
89,137
|
|
Separate account value
|
$
|
157,974
|
|
|
$
|
92,961
|
|
|
$
|
143,893
|
|
|
$
|
84,354
|
|
Net amount at risk
|
$
|
5,543
|
|
|
$
|
1,405
|
|
|
$
|
9,501
|
|
|
$
|
4,593
|
|
Average attained age of contractholders
|
63 years
|
|
|
63 years
|
|
|
62 years
|
|
|
62 years
|
|
||||
Two Tier Annuities
|
|
|
|
|
|
|
|
||||||||
General account value
|
N/A
|
|
|
$
|
862
|
|
|
N/A
|
|
|
$
|
848
|
|
||
Net amount at risk
|
N/A
|
|
|
$
|
229
|
|
|
N/A
|
|
|
$
|
232
|
|
||
Average attained age of contractholders
|
N/A
|
|
|
50 years
|
|
|
N/A
|
|
|
51 years
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
Secondary
Guarantees
|
|
Paid-Up
Guarantees
|
|
Secondary
Guarantees
|
|
Paid-Up
Guarantees
|
||||||||
|
(In millions)
|
||||||||||||||
Universal and Variable Life Contracts
(1)
|
|
|
|
|
|
|
|
||||||||
Account value (general and separate account)
|
$
|
15,394
|
|
|
$
|
3,727
|
|
|
$
|
14,256
|
|
|
$
|
3,828
|
|
Net amount at risk
|
$
|
187,686
|
|
|
$
|
22,084
|
|
|
$
|
189,197
|
|
|
$
|
23,276
|
|
Average attained age of policyholders
|
55 years
|
|
|
60 years
|
|
|
54 years
|
|
|
60 years
|
|
(1)
|
The Company’s annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive.
|
(2)
|
Includes amounts, which are not reported in the consolidated balance sheets, from assumed reinsurance of certain variable annuity products from the Company’s former operating joint venture in Japan.
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
(In millions)
|
||||||
Closed Block Liabilities
|
|
|
|
||||
Future policy benefits
|
$
|
42,105
|
|
|
$
|
42,586
|
|
Other policy-related balances
|
301
|
|
|
298
|
|
||
Policyholder dividends payable
|
507
|
|
|
466
|
|
||
Policyholder dividend obligation
|
2,013
|
|
|
3,828
|
|
||
Other liabilities
|
724
|
|
|
602
|
|
||
Total closed block liabilities
|
45,650
|
|
|
47,780
|
|
||
Assets Designated to the Closed Block
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturity securities available-for-sale, at estimated fair value
|
28,124
|
|
|
30,546
|
|
||
Equity securities available-for-sale, at estimated fair value
|
87
|
|
|
41
|
|
||
Mortgage loans
|
6,520
|
|
|
6,192
|
|
||
Policy loans
|
4,669
|
|
|
4,670
|
|
||
Real estate and real estate joint ventures
|
481
|
|
|
459
|
|
||
Other invested assets
|
923
|
|
|
953
|
|
||
Total investments
|
40,804
|
|
|
42,861
|
|
||
Cash and cash equivalents
|
404
|
|
|
381
|
|
||
Accrued investment income
|
497
|
|
|
481
|
|
||
Premiums, reinsurance and other receivables
|
101
|
|
|
107
|
|
||
Current income tax recoverable
|
15
|
|
|
2
|
|
||
Deferred income tax assets
|
292
|
|
|
319
|
|
||
Total assets designated to the closed block
|
42,113
|
|
|
44,151
|
|
||
Excess of closed block liabilities over assets designated to the closed block
|
3,537
|
|
|
3,629
|
|
||
Amounts included in AOCI:
|
|
|
|
||||
Unrealized investment gains (losses), net of income tax
|
1,682
|
|
|
2,891
|
|
||
Unrealized gains (losses) on derivatives, net of income tax
|
2
|
|
|
9
|
|
||
Allocated to policyholder dividend obligation, net of income tax
|
(1,309
|
)
|
|
(2,488
|
)
|
||
Total amounts included in AOCI
|
375
|
|
|
412
|
|
||
Maximum future earnings to be recognized from closed block assets and liabilities
|
$
|
3,912
|
|
|
$
|
4,041
|
|
|
Nine Months
Ended September 30, 2013 |
|
Year
Ended December 31, 2012 |
||||
|
(In millions)
|
||||||
Balance, beginning of period
|
$
|
3,828
|
|
|
$
|
2,919
|
|
Change in unrealized investment and derivative gains (losses)
|
(1,815
|
)
|
|
909
|
|
||
Balance, end of period
|
$
|
2,013
|
|
|
$
|
3,828
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
478
|
|
|
$
|
512
|
|
|
$
|
1,431
|
|
|
$
|
1,538
|
|
Net investment income
|
514
|
|
|
555
|
|
|
1,576
|
|
|
1,644
|
|
||||
Net investment gains (losses)
|
(7
|
)
|
|
6
|
|
|
20
|
|
|
30
|
|
||||
Net derivative gains (losses)
|
(16
|
)
|
|
(9
|
)
|
|
(1
|
)
|
|
(7
|
)
|
||||
Total revenues
|
969
|
|
|
1,064
|
|
|
3,026
|
|
|
3,205
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims
|
651
|
|
|
654
|
|
|
1,963
|
|
|
2,016
|
|
||||
Policyholder dividends
|
251
|
|
|
278
|
|
|
740
|
|
|
821
|
|
||||
Other expenses
|
39
|
|
|
45
|
|
|
124
|
|
|
136
|
|
||||
Total expenses
|
941
|
|
|
977
|
|
|
2,827
|
|
|
2,973
|
|
||||
Revenues, net of expenses before provision for income tax expense (benefit)
|
28
|
|
|
87
|
|
|
199
|
|
|
232
|
|
||||
Provision for income tax expense (benefit)
|
10
|
|
|
30
|
|
|
70
|
|
|
82
|
|
||||
Revenues, net of expenses and provision for income tax expense (benefit)
from continuing operations
|
18
|
|
|
57
|
|
|
129
|
|
|
150
|
|
||||
Revenues, net of expenses and provision for income tax expense (benefit)
from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Revenues, net of expenses and provision for income tax expense (benefit)
|
$
|
18
|
|
|
$
|
57
|
|
|
$
|
129
|
|
|
$
|
154
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||||||||||||||||||
|
Cost or
Amortized
Cost
|
|
Gross Unrealized
|
|
Estimated
Fair
Value
|
|
Cost or
Amortized
Cost
|
|
Gross Unrealized
|
|
Estimated
Fair
Value
|
||||||||||||||||||||||||||||
|
Gains
|
|
Temporary
Losses
|
|
OTTI
Losses
|
|
Gains
|
|
Temporary
Losses
|
|
OTTI
Losses
|
|
|||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. corporate
|
$
|
101,107
|
|
|
$
|
7,650
|
|
|
$
|
1,266
|
|
|
$
|
—
|
|
|
$
|
107,491
|
|
|
$
|
102,669
|
|
|
$
|
11,887
|
|
|
$
|
430
|
|
|
$
|
—
|
|
|
$
|
114,126
|
|
Foreign corporate (1)
|
60,374
|
|
|
3,871
|
|
|
597
|
|
|
—
|
|
|
63,648
|
|
|
61,806
|
|
|
5,654
|
|
|
277
|
|
|
(1
|
)
|
|
67,184
|
|
||||||||||
Foreign government
|
49,400
|
|
|
3,969
|
|
|
365
|
|
|
—
|
|
|
53,004
|
|
|
51,967
|
|
|
5,440
|
|
|
71
|
|
|
—
|
|
|
57,336
|
|
||||||||||
U.S. Treasury and agency
|
41,926
|
|
|
2,967
|
|
|
739
|
|
|
—
|
|
|
44,154
|
|
|
41,874
|
|
|
6,104
|
|
|
11
|
|
|
—
|
|
|
47,967
|
|
||||||||||
RMBS
|
34,412
|
|
|
1,698
|
|
|
403
|
|
|
229
|
|
|
35,478
|
|
|
35,666
|
|
|
2,477
|
|
|
315
|
|
|
349
|
|
|
37,479
|
|
||||||||||
CMBS
|
16,425
|
|
|
635
|
|
|
164
|
|
|
—
|
|
|
16,896
|
|
|
18,177
|
|
|
1,009
|
|
|
57
|
|
|
—
|
|
|
19,129
|
|
||||||||||
ABS
|
14,023
|
|
|
296
|
|
|
146
|
|
|
12
|
|
|
14,161
|
|
|
15,762
|
|
|
404
|
|
|
156
|
|
|
13
|
|
|
15,997
|
|
||||||||||
State and political subdivision
|
13,233
|
|
|
985
|
|
|
263
|
|
|
—
|
|
|
13,955
|
|
|
12,949
|
|
|
2,169
|
|
|
70
|
|
|
—
|
|
|
15,048
|
|
||||||||||
Total fixed maturity securities
|
$
|
330,900
|
|
|
$
|
22,071
|
|
|
$
|
3,943
|
|
|
$
|
241
|
|
|
$
|
348,787
|
|
|
$
|
340,870
|
|
|
$
|
35,144
|
|
|
$
|
1,387
|
|
|
$
|
361
|
|
|
$
|
374,266
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Common stock
|
$
|
1,948
|
|
|
$
|
336
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
2,270
|
|
|
$
|
2,034
|
|
|
$
|
147
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
2,162
|
|
Non-redeemable preferred stock
|
1,030
|
|
|
60
|
|
|
119
|
|
|
—
|
|
|
971
|
|
|
804
|
|
|
65
|
|
|
140
|
|
|
—
|
|
|
729
|
|
||||||||||
Total equity securities
|
$
|
2,978
|
|
|
$
|
396
|
|
|
$
|
133
|
|
|
$
|
—
|
|
|
$
|
3,241
|
|
|
$
|
2,838
|
|
|
$
|
212
|
|
|
$
|
159
|
|
|
$
|
—
|
|
|
$
|
2,891
|
|
(1)
|
OTTI losses, as presented above, represent the noncredit portion of OTTI losses that is included in AOCI. OTTI losses include both the initial recognition of noncredit losses, and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities that were previously noncredit loss impaired. The noncredit loss component of OTTI losses for foreign corporate securities was in an unrealized gain position of
$1 million
at
December 31, 2012
, due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “— Net Unrealized Investment Gains (Losses).”
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
||||||||
|
(In millions)
|
||||||||||||||
Due in one year or less
|
$
|
13,648
|
|
|
$
|
13,890
|
|
|
$
|
24,177
|
|
|
$
|
24,394
|
|
Due after one year through five years
|
72,766
|
|
|
76,296
|
|
|
66,973
|
|
|
70,759
|
|
||||
Due after five years through ten years
|
77,195
|
|
|
82,484
|
|
|
82,376
|
|
|
91,975
|
|
||||
Due after ten years
|
102,431
|
|
|
109,582
|
|
|
97,739
|
|
|
114,533
|
|
||||
Subtotal
|
266,040
|
|
|
282,252
|
|
|
271,265
|
|
|
301,661
|
|
||||
Structured securities (RMBS, CMBS and ABS)
|
64,860
|
|
|
66,535
|
|
|
69,605
|
|
|
72,605
|
|
||||
Total fixed maturity securities
|
$
|
330,900
|
|
|
$
|
348,787
|
|
|
$
|
340,870
|
|
|
$
|
374,266
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||||||||||
|
Less than 12 Months
|
|
Equal to or Greater
than 12 Months
|
|
Less than 12 Months
|
|
Equal to or Greater
than 12 Months
|
||||||||||||||||||||||||
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||||||||||
|
(In millions, except number of securities)
|
||||||||||||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. corporate
|
$
|
17,625
|
|
|
$
|
978
|
|
|
$
|
2,427
|
|
|
$
|
288
|
|
|
$
|
3,799
|
|
|
$
|
88
|
|
|
$
|
3,695
|
|
|
$
|
342
|
|
Foreign corporate
|
10,709
|
|
|
484
|
|
|
1,491
|
|
|
113
|
|
|
2,783
|
|
|
96
|
|
|
2,873
|
|
|
180
|
|
||||||||
Foreign government
|
6,431
|
|
|
332
|
|
|
247
|
|
|
33
|
|
|
1,431
|
|
|
22
|
|
|
543
|
|
|
49
|
|
||||||||
U.S. Treasury and agency
|
11,326
|
|
|
734
|
|
|
47
|
|
|
5
|
|
|
1,951
|
|
|
11
|
|
|
—
|
|
|
—
|
|
||||||||
RMBS
|
8,457
|
|
|
263
|
|
|
2,357
|
|
|
369
|
|
|
735
|
|
|
31
|
|
|
4,098
|
|
|
633
|
|
||||||||
CMBS
|
3,893
|
|
|
147
|
|
|
228
|
|
|
17
|
|
|
842
|
|
|
11
|
|
|
577
|
|
|
46
|
|
||||||||
ABS
|
2,949
|
|
|
70
|
|
|
695
|
|
|
88
|
|
|
1,920
|
|
|
30
|
|
|
1,410
|
|
|
139
|
|
||||||||
State and political subdivision
|
2,801
|
|
|
198
|
|
|
225
|
|
|
65
|
|
|
260
|
|
|
4
|
|
|
251
|
|
|
66
|
|
||||||||
Total fixed maturity securities
|
$
|
64,191
|
|
|
$
|
3,206
|
|
|
$
|
7,717
|
|
|
$
|
978
|
|
|
$
|
13,721
|
|
|
$
|
293
|
|
|
$
|
13,447
|
|
|
$
|
1,455
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock
|
$
|
92
|
|
|
$
|
13
|
|
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
201
|
|
|
$
|
18
|
|
|
$
|
14
|
|
|
$
|
1
|
|
Non-redeemable preferred stock
|
361
|
|
|
59
|
|
|
198
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
295
|
|
|
140
|
|
||||||||
Total equity securities
|
$
|
453
|
|
|
$
|
72
|
|
|
$
|
213
|
|
|
$
|
61
|
|
|
$
|
201
|
|
|
$
|
18
|
|
|
$
|
309
|
|
|
$
|
141
|
|
Total number of securities in an unrealized loss position
|
4,868
|
|
|
|
|
807
|
|
|
|
|
1,941
|
|
|
|
|
1,335
|
|
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||
|
Carrying
Value
|
|
% of
Total
|
|
Carrying
Value
|
|
% of
Total
|
||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||
Mortgage loans held-for-investment:
|
|
|
|
|
|
|
|
||||||
Commercial
|
$
|
40,262
|
|
|
69.8
|
%
|
|
$
|
40,472
|
|
|
71.0
|
%
|
Agricultural
|
12,830
|
|
|
22.2
|
|
|
12,843
|
|
|
22.5
|
|
||
Residential
|
2,434
|
|
|
4.2
|
|
|
958
|
|
|
1.7
|
|
||
Subtotal (1)
|
55,526
|
|
|
96.2
|
|
|
54,273
|
|
|
95.2
|
|
||
Valuation allowances
|
(326
|
)
|
|
(0.6
|
)
|
|
(347
|
)
|
|
(0.6
|
)
|
||
Subtotal mortgage loans held-for-investment, net
|
55,200
|
|
|
95.6
|
|
|
53,926
|
|
|
94.6
|
|
||
Residential — FVO
|
212
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
||
Commercial mortgage loans held by CSEs
|
2,096
|
|
|
3.6
|
|
|
2,666
|
|
|
4.7
|
|
||
Total mortgage loans held-for-investment, net
|
57,508
|
|
|
99.6
|
|
|
56,592
|
|
|
99.3
|
|
||
Mortgage loans held-for-sale
|
225
|
|
|
0.4
|
|
|
414
|
|
|
0.7
|
|
||
Total mortgage loans, net
|
$
|
57,733
|
|
|
100.0
|
%
|
|
$
|
57,006
|
|
|
100.0
|
%
|
(1)
|
Purchases of mortgage loans were
$676 million
and
$1.6 billion
for the
three months and nine months ended
September 30, 2013
, respectively, and
$100 million
for both the
three months and nine months ended
September 30, 2012
.
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||||||||||
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Mortgage loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Evaluated individually for
credit losses
|
$
|
520
|
|
|
$
|
170
|
|
|
$
|
14
|
|
|
$
|
704
|
|
|
$
|
539
|
|
|
$
|
181
|
|
|
$
|
13
|
|
|
$
|
733
|
|
Evaluated collectively for
credit losses
|
39,742
|
|
|
12,660
|
|
|
2,420
|
|
|
54,822
|
|
|
39,933
|
|
|
12,662
|
|
|
945
|
|
|
53,540
|
|
||||||||
Total mortgage loans
|
40,262
|
|
|
12,830
|
|
|
2,434
|
|
|
55,526
|
|
|
40,472
|
|
|
12,843
|
|
|
958
|
|
|
54,273
|
|
||||||||
Valuation allowances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Specific credit losses
|
62
|
|
|
12
|
|
|
2
|
|
|
76
|
|
|
94
|
|
|
21
|
|
|
2
|
|
|
117
|
|
||||||||
Non-specifically identified
credit losses
|
197
|
|
|
38
|
|
|
15
|
|
|
250
|
|
|
199
|
|
|
31
|
|
|
—
|
|
|
230
|
|
||||||||
Total valuation allowances
|
259
|
|
|
50
|
|
|
17
|
|
|
326
|
|
|
293
|
|
|
52
|
|
|
2
|
|
|
347
|
|
||||||||
Mortgage loans, net of
valuation allowances
|
$
|
40,003
|
|
|
$
|
12,780
|
|
|
$
|
2,417
|
|
|
$
|
55,200
|
|
|
$
|
40,179
|
|
|
$
|
12,791
|
|
|
$
|
956
|
|
|
$
|
53,926
|
|
|
Three Months
Ended September 30, |
||||||||||||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||||||||||||
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
242
|
|
|
$
|
49
|
|
|
$
|
11
|
|
|
$
|
302
|
|
|
$
|
300
|
|
|
$
|
59
|
|
|
$
|
2
|
|
|
$
|
361
|
|
Provision (release)
|
17
|
|
|
1
|
|
|
6
|
|
|
24
|
|
|
2
|
|
|
6
|
|
|
—
|
|
|
8
|
|
||||||||
Charge-offs, net of recoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(8
|
)
|
|
—
|
|
|
(10
|
)
|
||||||||
Transfers to held-for-sale (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||||||
Balance, end of period
|
$
|
259
|
|
|
$
|
50
|
|
|
$
|
17
|
|
|
$
|
326
|
|
|
$
|
300
|
|
|
$
|
52
|
|
|
$
|
2
|
|
|
$
|
354
|
|
|
Nine Months
Ended September 30, |
||||||||||||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||||||||||||
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
293
|
|
|
$
|
52
|
|
|
$
|
2
|
|
|
$
|
347
|
|
|
$
|
398
|
|
|
$
|
81
|
|
|
$
|
2
|
|
|
$
|
481
|
|
Provision (release)
|
(34
|
)
|
|
8
|
|
|
15
|
|
|
(11
|
)
|
|
(96
|
)
|
|
—
|
|
|
6
|
|
|
(90
|
)
|
||||||||
Charge-offs, net of recoveries
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|
(2
|
)
|
|
(24
|
)
|
|
—
|
|
|
(26
|
)
|
||||||||
Transfers to held-for-sale (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(6
|
)
|
|
(11
|
)
|
||||||||
Balance, end of period
|
$
|
259
|
|
|
$
|
50
|
|
|
$
|
17
|
|
|
$
|
326
|
|
|
$
|
300
|
|
|
$
|
52
|
|
|
$
|
2
|
|
|
$
|
354
|
|
(1)
|
The valuation allowance on and the related carrying value of certain residential mortgage loans held-for-investment were transferred to mortgage loans held-for-sale in connection with the MetLife Bank Divestiture. See Note 3 of the Notes to the Consolidated Financial Statements included in the
2012
Annual Report.
|
|
Recorded Investment
|
|
Estimated
Fair Value
|
|
% of
Total
|
||||||||||||||||||||
|
Debt Service Coverage Ratios
|
|
|
|
% of
Total
|
|
|||||||||||||||||||
|
> 1.20x
|
|
1.00x - 1.20x
|
|
< 1.00x
|
|
Total
|
|
|||||||||||||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||||||||||||||
September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loan-to-value ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less than 65%
|
$
|
29,992
|
|
|
$
|
751
|
|
|
$
|
746
|
|
|
$
|
31,489
|
|
|
78.2
|
%
|
|
$
|
33,188
|
|
|
79.0
|
%
|
65% to 75%
|
6,029
|
|
|
501
|
|
|
199
|
|
|
6,729
|
|
|
16.7
|
|
|
6,860
|
|
|
16.3
|
|
|||||
76% to 80%
|
290
|
|
|
192
|
|
|
258
|
|
|
740
|
|
|
1.8
|
|
|
737
|
|
|
1.7
|
|
|||||
Greater than 80%
|
902
|
|
|
261
|
|
|
141
|
|
|
1,304
|
|
|
3.3
|
|
|
1,246
|
|
|
3.0
|
|
|||||
Total
|
$
|
37,213
|
|
|
$
|
1,705
|
|
|
$
|
1,344
|
|
|
$
|
40,262
|
|
|
100.0
|
%
|
|
$
|
42,031
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loan-to-value ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less than 65%
|
$
|
29,839
|
|
|
$
|
730
|
|
|
$
|
722
|
|
|
$
|
31,291
|
|
|
77.3
|
%
|
|
$
|
33,730
|
|
|
78.3
|
%
|
65% to 75%
|
5,057
|
|
|
672
|
|
|
153
|
|
|
5,882
|
|
|
14.6
|
|
|
6,129
|
|
|
14.2
|
|
|||||
76% to 80%
|
938
|
|
|
131
|
|
|
316
|
|
|
1,385
|
|
|
3.4
|
|
|
1,436
|
|
|
3.3
|
|
|||||
Greater than 80%
|
1,085
|
|
|
552
|
|
|
277
|
|
|
1,914
|
|
|
4.7
|
|
|
1,787
|
|
|
4.2
|
|
|||||
Total
|
$
|
36,919
|
|
|
$
|
2,085
|
|
|
$
|
1,468
|
|
|
$
|
40,472
|
|
|
100.0
|
%
|
|
$
|
43,082
|
|
|
100.0
|
%
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||
|
Recorded
Investment
|
|
% of
Total
|
|
Recorded
Investment
|
|
% of
Total
|
||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||
Loan-to-value ratios:
|
|
|
|
|
|
|
|
||||||
Less than 65%
|
$
|
12,024
|
|
|
93.7
|
%
|
|
$
|
11,908
|
|
|
92.7
|
%
|
65% to 75%
|
560
|
|
|
4.4
|
|
|
590
|
|
|
4.6
|
|
||
76% to 80%
|
132
|
|
|
1.0
|
|
|
92
|
|
|
0.7
|
|
||
Greater than 80%
|
114
|
|
|
0.9
|
|
|
253
|
|
|
2.0
|
|
||
Total
|
$
|
12,830
|
|
|
100.0
|
%
|
|
$
|
12,843
|
|
|
100.0
|
%
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||
|
Recorded
Investment
|
|
% of
Total
|
|
Recorded
Investment
|
|
% of
Total
|
||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||
Performance indicators:
|
|
|
|
|
|
|
|
||||||
Performing
|
$
|
2,381
|
|
|
97.8
|
%
|
|
$
|
929
|
|
|
97.0
|
%
|
Nonperforming
|
53
|
|
|
2.2
|
|
|
29
|
|
|
3.0
|
|
||
Total
|
$
|
2,434
|
|
|
100.0
|
%
|
|
$
|
958
|
|
|
100.0
|
%
|
|
Past Due
|
|
Greater than 90 Days Past Due
and Still Accruing Interest
|
|
Nonaccrual Status
|
||||||||||||||||||
|
September 30, 2013
|
|
December 31, 2012
|
|
September 30, 2013
|
|
December 31, 2012
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Commercial
|
$
|
12
|
|
|
$
|
2
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
196
|
|
|
$
|
84
|
|
Agricultural
|
93
|
|
|
116
|
|
|
2
|
|
|
53
|
|
|
106
|
|
|
67
|
|
||||||
Residential
|
53
|
|
|
29
|
|
|
11
|
|
|
—
|
|
|
18
|
|
|
18
|
|
||||||
Total
|
$
|
158
|
|
|
$
|
147
|
|
|
$
|
24
|
|
|
$
|
53
|
|
|
$
|
320
|
|
|
$
|
169
|
|
|
Loans with a Valuation Allowance
|
|
Loans without
a Valuation Allowance
|
|
All Impaired Loans
|
||||||||||||||||||||||||||
|
Unpaid
Principal
Balance
|
|
Recorded
Investment
|
|
Valuation
Allowances
|
|
Carrying
Value
|
|
Unpaid
Principal
Balance
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Carrying
Value
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
$
|
230
|
|
|
$
|
224
|
|
|
$
|
62
|
|
|
$
|
162
|
|
|
$
|
303
|
|
|
$
|
296
|
|
|
$
|
533
|
|
|
$
|
458
|
|
Agricultural
|
85
|
|
|
82
|
|
|
12
|
|
|
70
|
|
|
93
|
|
|
88
|
|
|
178
|
|
|
158
|
|
||||||||
Residential
|
12
|
|
|
12
|
|
|
2
|
|
|
10
|
|
|
2
|
|
|
2
|
|
|
14
|
|
|
12
|
|
||||||||
Total
|
$
|
327
|
|
|
$
|
318
|
|
|
$
|
76
|
|
|
$
|
242
|
|
|
$
|
398
|
|
|
$
|
386
|
|
|
$
|
725
|
|
|
$
|
628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
$
|
445
|
|
|
$
|
436
|
|
|
$
|
94
|
|
|
$
|
342
|
|
|
$
|
103
|
|
|
$
|
103
|
|
|
$
|
548
|
|
|
$
|
445
|
|
Agricultural
|
110
|
|
|
107
|
|
|
21
|
|
|
86
|
|
|
79
|
|
|
74
|
|
|
189
|
|
|
160
|
|
||||||||
Residential
|
13
|
|
|
13
|
|
|
2
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
11
|
|
||||||||
Total
|
$
|
568
|
|
|
$
|
556
|
|
|
$
|
117
|
|
|
$
|
439
|
|
|
$
|
182
|
|
|
$
|
177
|
|
|
$
|
750
|
|
|
$
|
616
|
|
|
Impaired Mortgage Loans
|
||||||||||||||||||||||||||||||
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||||||||||
|
Average
Recorded
Investment
|
|
Interest
Income
|
|
Average
Recorded
Investment
|
|
Interest
Income
|
|
Average
Recorded
Investment
|
|
Interest
Income
|
|
Average
Recorded
Investment
|
|
Interest
Income
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Commercial
|
$
|
525
|
|
|
$
|
4
|
|
|
$
|
395
|
|
|
$
|
1
|
|
|
$
|
530
|
|
|
$
|
11
|
|
|
$
|
334
|
|
|
$
|
4
|
|
Agricultural
|
165
|
|
|
5
|
|
|
191
|
|
|
2
|
|
|
167
|
|
|
8
|
|
|
210
|
|
|
5
|
|
||||||||
Residential
|
14
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||||||
Total
|
$
|
704
|
|
|
$
|
9
|
|
|
$
|
598
|
|
|
$
|
3
|
|
|
$
|
711
|
|
|
$
|
19
|
|
|
$
|
557
|
|
|
$
|
9
|
|
|
Three Months
Ended
September 30,
|
||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||
|
Number of
Mortgage
Loans
|
|
Carrying Value after Specific
Valuation Allowance
|
|
Number of
Mortgage
Loans
|
|
Carrying Value after Specific
Valuation Allowance
|
||||||||||||||
|
|
|
Pre-
Modification
|
|
Post-
Modification
|
|
|
|
Pre-
Modification
|
|
Post-
Modification
|
||||||||||
|
|
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||||
Commercial
|
1
|
|
|
$
|
49
|
|
|
$
|
49
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Agricultural
|
2
|
|
|
24
|
|
|
24
|
|
|
5
|
|
|
17
|
|
|
16
|
|
||||
Residential
|
5
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
8
|
|
|
$
|
74
|
|
|
$
|
74
|
|
|
5
|
|
|
$
|
17
|
|
|
$
|
16
|
|
|
Nine Months
Ended
September 30,
|
||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||
|
Number of
Mortgage
Loans
|
|
Carrying Value after Specific
Valuation Allowance
|
|
Number of
Mortgage
Loans
|
|
Carrying Value after Specific
Valuation Allowance
|
||||||||||||||
|
|
|
Pre-
Modification
|
|
Post-
Modification
|
|
|
|
Pre-
Modification
|
|
Post-
Modification
|
||||||||||
|
|
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||||
Commercial
|
1
|
|
|
$
|
49
|
|
|
$
|
49
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Agricultural
|
3
|
|
|
28
|
|
|
28
|
|
|
5
|
|
|
17
|
|
|
16
|
|
||||
Residential
|
11
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
15
|
|
|
$
|
79
|
|
|
$
|
79
|
|
|
5
|
|
|
$
|
17
|
|
|
$
|
16
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
(In millions)
|
||||||
Fixed maturity securities
|
$
|
18,075
|
|
|
$
|
33,641
|
|
Fixed maturity securities with noncredit OTTI losses in AOCI
|
(241
|
)
|
|
(361
|
)
|
||
Total fixed maturity securities
|
17,834
|
|
|
33,280
|
|
||
Equity securities
|
262
|
|
|
97
|
|
||
Derivatives
|
624
|
|
|
1,274
|
|
||
Other
|
(21
|
)
|
|
(30
|
)
|
||
Subtotal
|
18,699
|
|
|
34,621
|
|
||
Amounts allocated from:
|
|
|
|
||||
Insurance liability loss recognition
|
(1,099
|
)
|
|
(6,049
|
)
|
||
DAC and VOBA related to noncredit OTTI losses recognized in AOCI
|
7
|
|
|
19
|
|
||
DAC and VOBA
|
(1,306
|
)
|
|
(2,485
|
)
|
||
Policyholder dividend obligation
|
(2,013
|
)
|
|
(3,828
|
)
|
||
Subtotal
|
(4,411
|
)
|
|
(12,343
|
)
|
||
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
|
81
|
|
|
119
|
|
||
Deferred income tax benefit (expense)
|
(5,299
|
)
|
|
(7,973
|
)
|
||
Net unrealized investment gains (losses)
|
9,070
|
|
|
14,424
|
|
||
Net unrealized investment gains (losses) attributable to noncontrolling interests
|
30
|
|
|
(5
|
)
|
||
Net unrealized investment gains (losses) attributable to MetLife, Inc.
|
$
|
9,100
|
|
|
$
|
14,419
|
|
|
Nine Months
Ended September 30, 2013 |
|
Year
Ended December 31, 2012 |
||||
|
(In millions)
|
||||||
Balance, beginning of period
|
$
|
(361
|
)
|
|
$
|
(724
|
)
|
Noncredit OTTI losses and subsequent changes recognized (1)
|
56
|
|
|
(29
|
)
|
||
Securities sold with previous noncredit OTTI loss
|
132
|
|
|
177
|
|
||
Subsequent changes in estimated fair value
|
(68
|
)
|
|
215
|
|
||
Balance, end of period
|
$
|
(241
|
)
|
|
$
|
(361
|
)
|
(1)
|
Noncredit OTTI losses and subsequent changes recognized, net of DAC, were
$47 million
and
($21) million
for the
nine months ended
September 30, 2013
and year ended
December 31, 2012
, respectively.
|
|
Nine Months
Ended September 30, 2013 |
||
|
(In millions)
|
||
Balance, beginning of period
|
$
|
14,419
|
|
Fixed maturity securities on which noncredit OTTI losses have been recognized
|
120
|
|
|
Unrealized investment gains (losses) during the period
|
(16,042
|
)
|
|
Unrealized investment gains (losses) relating to:
|
|
||
Insurance liability gain (loss) recognition
|
4,950
|
|
|
DAC and VOBA related to noncredit OTTI losses recognized in AOCI
|
(12
|
)
|
|
DAC and VOBA
|
1,179
|
|
|
Policyholder dividend obligation
|
1,815
|
|
|
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
|
(38
|
)
|
|
Deferred income tax benefit (expense)
|
2,674
|
|
|
Net unrealized investment gains (losses)
|
9,065
|
|
|
Net unrealized investment gains (losses) attributable to noncontrolling interests
|
35
|
|
|
Balance, end of period
|
$
|
9,100
|
|
Change in net unrealized investment gains (losses)
|
$
|
(5,354
|
)
|
Change in net unrealized investment gains (losses) attributable to noncontrolling interests
|
35
|
|
|
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.
|
$
|
(5,319
|
)
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
(In millions)
|
||||||
Securities on loan: (1)
|
|
|
|
||||
Amortized cost
|
$
|
27,781
|
|
|
$
|
23,380
|
|
Estimated fair value
|
$
|
28,810
|
|
|
$
|
27,077
|
|
Cash collateral on deposit from counterparties (2)
|
$
|
29,416
|
|
|
$
|
27,727
|
|
Security collateral on deposit from counterparties (3)
|
$
|
18
|
|
|
$
|
104
|
|
Reinvestment portfolio — estimated fair value
|
$
|
29,676
|
|
|
$
|
28,112
|
|
(1)
|
Included within fixed maturity securities, cash and cash equivalents, short-term investments and equity securities.
|
(2)
|
Included within payables for collateral under securities loaned and other transactions.
|
(3)
|
Security collateral on deposit from counterparties may not be sold or repledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements.
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
(In millions)
|
||||||
Invested assets on deposit (regulatory deposits)
|
$
|
2,229
|
|
|
$
|
2,362
|
|
Invested assets held in trust (collateral financing arrangements and reinsurance agreements)
|
10,928
|
|
|
12,434
|
|
||
Invested assets pledged as collateral (1)
|
22,927
|
|
|
23,251
|
|
||
Total invested assets on deposit, held in trust and pledged as collateral
|
$
|
36,084
|
|
|
$
|
38,047
|
|
(1)
|
The Company has pledged fixed maturity securities, mortgage loans and cash and cash equivalents in connection with various agreements and transactions, including funding agreements (see Notes 4 and 12 of the Notes to the Consolidated Financial Statements included in the
2012
Annual Report), collateral financing arrangements (see Note 13 of the Notes to the Consolidated Financial Statements included in the
2012
Annual Report) and derivative transactions (see Note
7
).
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
Total
Assets
|
|
Total
Liabilities
|
|
Total
Assets
|
|
Total
Liabilities
|
||||||||
|
(In millions)
|
||||||||||||||
MRSC (collateral financing arrangement (primarily securities)) (1)
|
$
|
3,430
|
|
|
$
|
—
|
|
|
$
|
3,439
|
|
|
$
|
—
|
|
CSEs (assets (primarily loans) and liabilities (primarily debt)) (2)
|
2,130
|
|
|
1,953
|
|
|
2,730
|
|
|
2,545
|
|
||||
Operating joint venture (3)
|
1,982
|
|
|
1,681
|
|
|
—
|
|
|
—
|
|
||||
Investments:
|
|
|
|
|
|
|
|
||||||||
Other limited partnership interests
|
172
|
|
|
10
|
|
|
356
|
|
|
8
|
|
||||
FVO and trading securities
|
69
|
|
|
—
|
|
|
71
|
|
|
—
|
|
||||
Other invested assets
|
82
|
|
|
7
|
|
|
85
|
|
|
—
|
|
||||
Real estate joint ventures
|
10
|
|
|
15
|
|
|
11
|
|
|
14
|
|
||||
Total
|
$
|
7,875
|
|
|
$
|
3,666
|
|
|
$
|
6,692
|
|
|
$
|
2,567
|
|
(1)
|
See Note 13 of the Notes to the Consolidated Financial Statements included in the
2012
Annual Report for a description of the MetLife Reinsurance Company of South Carolina (“MRSC”) collateral financing arrangement. These assets primarily consist of fixed maturity securities.
|
(2)
|
The Company consolidates former qualified special purpose entities (“QSPEs”) that are structured as CMBS and as collateralized debt obligations. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any principal or interest shortfalls should any arise. The assets and liabilities of these CSEs are primarily commercial mortgage loans held-for-investment and long-term debt, respectively. The Company’s exposure was limited to that of its remaining investment in the former QSPEs of
$158 million
and
$168 million
at estimated fair value at
September 30, 2013
and
December 31, 2012
, respectively. The long-term debt bears interest primarily at fixed rates ranging from
2.25%
to
5.57%
, payable primarily on a monthly basis. Interest expense related to these obligations, included in other expenses, was
$29 million
and
$96 million
for the
three months and nine months ended
September 30, 2013
, respectively, and
$40 million
and
$125 million
for the
three months and nine months ended
September 30, 2012
, respectively.
|
(3)
|
Assets of the operating joint venture are primarily fixed maturity securities and separate account assets. Liabilities of the operating joint venture are primarily future policy benefits, other policyholder funds and separate account liabilities. The assets and liabilities of the operating joint venture were consolidated in earlier periods; however, as a result of the quarterly reassessment in the first quarter of 2013, it was determined to be a consolidated VIE.
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
Carrying
Amount
|
|
Maximum
Exposure
to Loss (1)
|
|
Carrying
Amount
|
|
Maximum
Exposure
to Loss (1)
|
||||||||
|
(In millions)
|
||||||||||||||
Fixed maturity securities AFS:
|
|
|
|
|
|
|
|
||||||||
Structured securities (RMBS, CMBS and ABS) (2)
|
$
|
66,535
|
|
|
$
|
66,535
|
|
|
$
|
72,605
|
|
|
$
|
72,605
|
|
U.S. and foreign corporate
|
4,437
|
|
|
4,437
|
|
|
5,287
|
|
|
5,287
|
|
||||
Other limited partnership interests
|
4,925
|
|
|
6,782
|
|
|
4,436
|
|
|
5,908
|
|
||||
Other invested assets
|
1,348
|
|
|
1,607
|
|
|
1,117
|
|
|
1,431
|
|
||||
FVO and trading securities
|
598
|
|
|
598
|
|
|
563
|
|
|
563
|
|
||||
Mortgage loans
|
162
|
|
|
162
|
|
|
351
|
|
|
351
|
|
||||
Real estate joint ventures
|
106
|
|
|
110
|
|
|
150
|
|
|
157
|
|
||||
Equity securities AFS:
|
|
|
|
|
|
|
|
||||||||
Non-redeemable preferred stock
|
32
|
|
|
32
|
|
|
32
|
|
|
32
|
|
||||
Total
|
$
|
78,143
|
|
|
$
|
80,263
|
|
|
$
|
84,541
|
|
|
$
|
86,334
|
|
(1)
|
The maximum exposure to loss relating to fixed maturity securities AFS, FVO and trading securities and equity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests, mortgage loans and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments of the Company. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of
$271 million
and
$318 million
at
September 30, 2013
and
December 31, 2012
, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.
|
(2)
|
For these variable interests, the Company’s involvement is limited to that of a passive investor.
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Investment income:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities
|
$
|
3,784
|
|
|
$
|
3,825
|
|
|
$
|
11,319
|
|
|
$
|
11,370
|
|
Equity securities
|
28
|
|
|
26
|
|
|
88
|
|
|
96
|
|
||||
FVO and trading securities — Actively Traded Securities and FVO general account securities (1)
|
14
|
|
|
24
|
|
|
24
|
|
|
68
|
|
||||
Mortgage loans
|
725
|
|
|
811
|
|
|
2,179
|
|
|
2,405
|
|
||||
Policy loans
|
158
|
|
|
157
|
|
|
465
|
|
|
471
|
|
||||
Real estate and real estate joint ventures
|
227
|
|
|
173
|
|
|
663
|
|
|
630
|
|
||||
Other limited partnership interests
|
144
|
|
|
145
|
|
|
665
|
|
|
593
|
|
||||
Cash, cash equivalents and short-term investments
|
42
|
|
|
40
|
|
|
136
|
|
|
115
|
|
||||
International joint ventures
|
16
|
|
|
7
|
|
|
7
|
|
|
11
|
|
||||
Other
|
25
|
|
|
27
|
|
|
137
|
|
|
148
|
|
||||
Subtotal
|
5,163
|
|
|
5,235
|
|
|
15,683
|
|
|
15,907
|
|
||||
Less: Investment expenses
|
302
|
|
|
276
|
|
|
889
|
|
|
793
|
|
||||
Subtotal, net
|
4,861
|
|
|
4,959
|
|
|
14,794
|
|
|
15,114
|
|
||||
FVO and trading securities — FVO contractholder-directed unit-linked investments (1)
|
132
|
|
|
512
|
|
|
1,485
|
|
|
1,010
|
|
||||
Securitized reverse residential mortgage loans
|
—
|
|
|
3
|
|
|
—
|
|
|
177
|
|
||||
FVO CSEs — interest income:
|
|
|
|
|
|
|
|
||||||||
Commercial mortgage loans
|
33
|
|
|
42
|
|
|
104
|
|
|
131
|
|
||||
Securities
|
—
|
|
|
1
|
|
|
2
|
|
|
4
|
|
||||
Subtotal
|
165
|
|
|
558
|
|
|
1,591
|
|
|
1,322
|
|
||||
Net investment income
|
$
|
5,026
|
|
|
$
|
5,517
|
|
|
$
|
16,385
|
|
|
$
|
16,436
|
|
(1)
|
Changes in estimated fair value subsequent to purchase for securities still held as of the end of the respective periods included in net investment income were:
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Actively Traded Securities and FVO general account securities
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
(14
|
)
|
|
$
|
36
|
|
FVO contractholder-directed unit-linked investments
|
$
|
(9
|
)
|
|
$
|
247
|
|
|
$
|
1,069
|
|
|
$
|
741
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Total gains (losses) on fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Total OTTI losses recognized — by sector and industry:
|
|
|
|
|
|
|
|
||||||||
U.S. and foreign corporate securities — by industry:
|
|
|
|
|
|
|
|
||||||||
Utility
|
$
|
(1
|
)
|
|
$
|
(10
|
)
|
|
$
|
(33
|
)
|
|
$
|
(61
|
)
|
Finance
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(32
|
)
|
||||
Consumer
|
(3
|
)
|
|
(4
|
)
|
|
(11
|
)
|
|
(16
|
)
|
||||
Communications
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(19
|
)
|
||||
Industrial
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Transportation
|
(3
|
)
|
|
(11
|
)
|
|
(3
|
)
|
|
(17
|
)
|
||||
Total U.S. and foreign corporate securities
|
(7
|
)
|
|
(30
|
)
|
|
(59
|
)
|
|
(150
|
)
|
||||
RMBS
|
(27
|
)
|
|
(15
|
)
|
|
(74
|
)
|
|
(61
|
)
|
||||
CMBS
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
||||
ABS
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(9
|
)
|
||||
State and political subdivision
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
OTTI losses on fixed maturity securities recognized in earnings
|
(34
|
)
|
|
(47
|
)
|
|
(133
|
)
|
|
(271
|
)
|
||||
Fixed maturity securities — net gains (losses) on sales and disposals
|
(44
|
)
|
|
80
|
|
|
504
|
|
|
146
|
|
||||
Total gains (losses) on fixed maturity securities (1)
|
(78
|
)
|
|
33
|
|
|
371
|
|
|
(125
|
)
|
||||
Total gains (losses) on equity securities:
|
|
|
|
|
|
|
|
||||||||
Total OTTI losses recognized — by sector:
|
|
|
|
|
|
|
|
||||||||
Non-redeemable preferred stock
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
||||
Common stock
|
—
|
|
|
(9
|
)
|
|
(2
|
)
|
|
(26
|
)
|
||||
OTTI losses on equity securities recognized in earnings
|
—
|
|
|
(9
|
)
|
|
(22
|
)
|
|
(26
|
)
|
||||
Equity securities — net gains (losses) on sales and disposals
|
3
|
|
|
12
|
|
|
2
|
|
|
39
|
|
||||
Total gains (losses) on equity securities
|
3
|
|
|
3
|
|
|
(20
|
)
|
|
13
|
|
||||
FVO and trading securities — FVO general account securities — changes in estimated fair value subsequent to purchase
|
1
|
|
|
1
|
|
|
9
|
|
|
4
|
|
||||
Mortgage loans (1)
|
(13
|
)
|
|
—
|
|
|
22
|
|
|
49
|
|
||||
Real estate and real estate joint ventures
|
4
|
|
|
(15
|
)
|
|
(19
|
)
|
|
(35
|
)
|
||||
Other limited partnership interests
|
—
|
|
|
(7
|
)
|
|
(41
|
)
|
|
(18
|
)
|
||||
Other investment portfolio gains (losses)
|
12
|
|
|
15
|
|
|
46
|
|
|
(20
|
)
|
||||
Subtotal — investment portfolio gains (losses) (1)
|
(71
|
)
|
|
30
|
|
|
368
|
|
|
(132
|
)
|
||||
FVO CSEs — changes in estimated fair value subsequent to consolidation:
|
|
|
|
|
|
|
|
||||||||
Commercial mortgage loans
|
(14
|
)
|
|
9
|
|
|
(46
|
)
|
|
8
|
|
||||
Securities
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Long-term debt — related to commercial mortgage loans
|
18
|
|
|
(2
|
)
|
|
66
|
|
|
8
|
|
||||
Long-term debt — related to securities
|
(1
|
)
|
|
8
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Non-investment portfolio gains (losses) (2)
|
(18
|
)
|
|
(23
|
)
|
|
(49
|
)
|
|
(34
|
)
|
||||
Subtotal FVO CSEs and non-investment portfolio gains (losses)
|
(14
|
)
|
|
(8
|
)
|
|
(29
|
)
|
|
(20
|
)
|
||||
Total net investment gains (losses)
|
$
|
(85
|
)
|
|
$
|
22
|
|
|
$
|
339
|
|
|
$
|
(152
|
)
|
(1)
|
For the
three months and nine months ended
September 30, 2012
, net investment gains (losses) includes a net gain (loss) of
($26) million
and
$34 million
, respectively, as a result of the MetLife Bank Divestiture, which is comprised of gains (losses) on investments sold of
$0
and
$75 million
, respectively, and impairments on mortgage loans of
($26) million
and
($41) million
, respectively. See Note
3
.
|
(2)
|
For the three months and nine months ended
September 30, 2013
, there were
$0
and
$30 million
, respectively, in non-investment portfolio gains (losses) related to the MetLife Bank Divestiture. For both the
three months and nine months ended
September 30, 2012
, there were
$41 million
in non-investment portfolio gains (losses), related to the MetLife Bank Divestiture. See Note
3
.
|
|
Three Months
Ended September 30, |
||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||
|
Fixed Maturity Securities
|
|
Equity Securities
|
|
Total
|
||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Proceeds
|
$
|
20,003
|
|
|
$
|
12,004
|
|
|
$
|
173
|
|
|
$
|
231
|
|
|
$
|
20,176
|
|
|
$
|
12,235
|
|
Gross investment gains
|
$
|
238
|
|
|
$
|
192
|
|
|
$
|
5
|
|
|
$
|
23
|
|
|
$
|
243
|
|
|
$
|
215
|
|
Gross investment losses
|
(282
|
)
|
|
(112
|
)
|
|
(2
|
)
|
|
(11
|
)
|
|
(284
|
)
|
|
(123
|
)
|
||||||
Total OTTI losses recognized in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Credit-related
|
(33
|
)
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
(36
|
)
|
||||||
Other (1)
|
(1
|
)
|
|
(11
|
)
|
|
—
|
|
|
(9
|
)
|
|
(1
|
)
|
|
(20
|
)
|
||||||
Total OTTI losses recognized in earnings
|
(34
|
)
|
|
(47
|
)
|
|
—
|
|
|
(9
|
)
|
|
(34
|
)
|
|
(56
|
)
|
||||||
Net investment gains (losses)
|
$
|
(78
|
)
|
|
$
|
33
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
(75
|
)
|
|
$
|
36
|
|
|
Nine Months
Ended September 30, |
||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||
|
Fixed Maturity Securities
|
|
Equity Securities
|
|
Total
|
||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Proceeds
|
$
|
61,625
|
|
|
$
|
47,023
|
|
|
$
|
528
|
|
|
$
|
594
|
|
|
$
|
62,153
|
|
|
$
|
47,617
|
|
Gross investment gains
|
$
|
1,061
|
|
|
$
|
742
|
|
|
$
|
23
|
|
|
$
|
56
|
|
|
$
|
1,084
|
|
|
$
|
798
|
|
Gross investment losses
|
(557
|
)
|
|
(596
|
)
|
|
(21
|
)
|
|
(17
|
)
|
|
(578
|
)
|
|
(613
|
)
|
||||||
Total OTTI losses recognized in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Credit-related
|
(114
|
)
|
|
(177
|
)
|
|
—
|
|
|
—
|
|
|
(114
|
)
|
|
(177
|
)
|
||||||
Other (1)
|
(19
|
)
|
|
(94
|
)
|
|
(22
|
)
|
|
(26
|
)
|
|
(41
|
)
|
|
(120
|
)
|
||||||
Total OTTI losses recognized in earnings
|
(133
|
)
|
|
(271
|
)
|
|
(22
|
)
|
|
(26
|
)
|
|
(155
|
)
|
|
(297
|
)
|
||||||
Net investment gains (losses)
|
$
|
371
|
|
|
$
|
(125
|
)
|
|
$
|
(20
|
)
|
|
$
|
13
|
|
|
$
|
351
|
|
|
$
|
(112
|
)
|
(1)
|
Other OTTI losses recognized in earnings include impairments on (i) equity securities, (ii) perpetual hybrid securities classified within fixed maturity securities where the primary reason for the impairment was the severity and/or the duration of an unrealized loss position and (iii) fixed maturity securities where there is an intent to sell or it is more likely than not that the Company will be required to sell the security before recovery of the decline in estimated fair value.
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Balance, beginning of period
|
$
|
381
|
|
|
$
|
391
|
|
|
$
|
392
|
|
|
$
|
471
|
|
Additions:
|
|
|
|
|
|
|
|
||||||||
Initial impairments — credit loss OTTI recognized on securities not previously impaired
|
3
|
|
|
2
|
|
|
5
|
|
|
39
|
|
||||
Additional impairments — credit loss OTTI recognized on securities previously impaired
|
23
|
|
|
15
|
|
|
64
|
|
|
41
|
|
||||
Reductions:
|
|
|
|
|
|
|
|
||||||||
Sales (maturities, pay downs or prepayments) during the period of securities previously impaired as credit loss OTTI
|
(21
|
)
|
|
(36
|
)
|
|
(75
|
)
|
|
(155
|
)
|
||||
Securities impaired to net present value of expected future cash flows
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||
Increases in cash flows accretion of previous credit loss OTTI
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Balance, end of period
|
$
|
385
|
|
|
$
|
371
|
|
|
$
|
385
|
|
|
$
|
371
|
|
•
|
Fair value hedge
(a hedge of the estimated fair value of a recognized asset or liability) - in net derivative gains (losses), consistent with the change in fair value of the hedged item attributable to the designated risk being hedged.
|
•
|
Cash flow hedge
(a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability) - effectiveness in OCI (deferred gains or losses on the derivative are reclassified into the consolidated statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item); ineffectiveness in net derivative gains (losses).
|
•
|
Net investment in a foreign operation hedge
- effectiveness in OCI, consistent with the translation adjustment for the hedged net investment in the foreign operation; ineffectiveness in net derivative gains (losses).
|
•
|
the combined instrument is not accounted for in its entirety at fair value with changes in fair value recorded in earnings;
|
•
|
the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and
|
•
|
a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument.
|
|
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
|
Primary Underlying Risk Exposure
|
|
Notional
Amount
|
|
Estimated Fair Value
|
|
Notional
Amount
|
|
Estimated Fair Value
|
||||||||||||||||
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||
|
|
|
|
(In millions)
|
||||||||||||||||||||||
Derivatives Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
Interest rate
|
|
$
|
6,452
|
|
|
$
|
1,412
|
|
|
$
|
61
|
|
|
$
|
5,397
|
|
|
$
|
1,921
|
|
|
$
|
90
|
|
Foreign currency swaps
|
|
Foreign currency exchange rate
|
|
3,004
|
|
|
264
|
|
|
123
|
|
|
3,187
|
|
|
332
|
|
|
85
|
|
||||||
Subtotal
|
|
|
|
9,456
|
|
|
1,676
|
|
|
184
|
|
|
8,584
|
|
|
2,253
|
|
|
175
|
|
||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
Interest rate
|
|
3,221
|
|
|
174
|
|
|
85
|
|
|
3,642
|
|
|
705
|
|
|
—
|
|
||||||
Interest rate forwards
|
|
Interest rate
|
|
495
|
|
|
21
|
|
|
—
|
|
|
675
|
|
|
139
|
|
|
—
|
|
||||||
Foreign currency swaps
|
|
Foreign currency exchange rate
|
|
11,813
|
|
|
329
|
|
|
541
|
|
|
9,038
|
|
|
219
|
|
|
355
|
|
||||||
Subtotal
|
|
|
|
15,529
|
|
|
524
|
|
|
626
|
|
|
13,355
|
|
|
1,063
|
|
|
355
|
|
||||||
Foreign operations hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forwards
|
|
Foreign currency exchange rate
|
|
3,448
|
|
|
10
|
|
|
94
|
|
|
2,552
|
|
|
43
|
|
|
61
|
|
||||||
Currency options
|
|
Foreign currency exchange rate
|
|
5,769
|
|
|
161
|
|
|
11
|
|
|
4,375
|
|
|
43
|
|
|
3
|
|
||||||
Subtotal
|
|
|
|
9,217
|
|
|
171
|
|
|
105
|
|
|
6,927
|
|
|
86
|
|
|
64
|
|
||||||
Total qualifying hedges
|
|
34,202
|
|
|
2,371
|
|
|
915
|
|
|
28,866
|
|
|
3,402
|
|
|
594
|
|
||||||||
Derivatives Not Designated or Not Qualifying as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate swaps
|
|
Interest rate
|
|
112,153
|
|
|
3,584
|
|
|
1,671
|
|
|
83,250
|
|
|
5,201
|
|
|
2,043
|
|
||||||
Interest rate floors
|
|
Interest rate
|
|
63,064
|
|
|
587
|
|
|
456
|
|
|
56,246
|
|
|
1,174
|
|
|
837
|
|
||||||
Interest rate caps
|
|
Interest rate
|
|
34,960
|
|
|
157
|
|
|
—
|
|
|
49,465
|
|
|
74
|
|
|
—
|
|
||||||
Interest rate futures
|
|
Interest rate
|
|
7,217
|
|
|
3
|
|
|
7
|
|
|
11,684
|
|
|
1
|
|
|
38
|
|
||||||
Interest rate options
|
|
Interest rate
|
|
40,871
|
|
|
335
|
|
|
203
|
|
|
16,328
|
|
|
640
|
|
|
60
|
|
||||||
Synthetic GICs
|
|
Interest rate
|
|
4,406
|
|
|
—
|
|
|
—
|
|
|
4,162
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency swaps
|
|
Foreign currency exchange rate
|
|
8,626
|
|
|
143
|
|
|
641
|
|
|
8,208
|
|
|
199
|
|
|
736
|
|
||||||
Foreign currency forwards
|
|
Foreign currency exchange rate
|
|
11,873
|
|
|
70
|
|
|
143
|
|
|
9,202
|
|
|
26
|
|
|
288
|
|
||||||
Currency futures
|
|
Foreign currency exchange rate
|
|
1,334
|
|
|
2
|
|
|
—
|
|
|
1,408
|
|
|
4
|
|
|
—
|
|
||||||
Currency options
|
|
Foreign currency exchange rate
|
|
949
|
|
|
43
|
|
|
5
|
|
|
129
|
|
|
1
|
|
|
—
|
|
||||||
Credit default swaps — purchased
|
|
Credit
|
|
3,511
|
|
|
10
|
|
|
38
|
|
|
3,674
|
|
|
11
|
|
|
34
|
|
||||||
Credit default swaps — written
|
|
Credit
|
|
9,387
|
|
|
119
|
|
|
2
|
|
|
8,879
|
|
|
79
|
|
|
5
|
|
||||||
Equity futures
|
|
Equity market
|
|
5,430
|
|
|
30
|
|
|
4
|
|
|
7,008
|
|
|
14
|
|
|
132
|
|
||||||
Equity options
|
|
Equity market
|
|
37,374
|
|
|
1,699
|
|
|
823
|
|
|
22,920
|
|
|
2,825
|
|
|
356
|
|
||||||
Variance swaps
|
|
Equity market
|
|
21,961
|
|
|
147
|
|
|
530
|
|
|
19,830
|
|
|
122
|
|
|
310
|
|
||||||
Total rate of return swaps
|
|
Equity market
|
|
3,794
|
|
|
1
|
|
|
120
|
|
|
3,092
|
|
|
4
|
|
|
103
|
|
||||||
Total non-designated or non-qualifying derivatives
|
|
366,910
|
|
|
6,930
|
|
|
4,643
|
|
|
305,485
|
|
|
10,375
|
|
|
4,942
|
|
||||||||
Total
|
|
|
|
$
|
401,112
|
|
|
$
|
9,301
|
|
|
$
|
5,558
|
|
|
$
|
334,351
|
|
|
$
|
13,777
|
|
|
$
|
5,536
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Derivatives and hedging gains (losses) (1)
|
$
|
(1,444
|
)
|
|
$
|
(945
|
)
|
|
$
|
(6,527
|
)
|
|
$
|
(1,277
|
)
|
Embedded derivatives
|
898
|
|
|
227
|
|
|
3,661
|
|
|
673
|
|
||||
Total net derivative gains (losses)
|
$
|
(546
|
)
|
|
$
|
(718
|
)
|
|
$
|
(2,866
|
)
|
|
$
|
(604
|
)
|
(1)
|
Includes foreign currency transaction gains (losses) on hedged items in cash flow and non-qualifying hedging relationships, which are not presented elsewhere in this note.
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Qualifying hedges:
|
|
|
|
|
|
|
|
||||||||
Net investment income
|
$
|
31
|
|
|
$
|
27
|
|
|
$
|
102
|
|
|
$
|
82
|
|
Interest credited to policyholder account balances
|
39
|
|
|
39
|
|
|
110
|
|
|
122
|
|
||||
Other expenses
|
(1
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(4
|
)
|
||||
Non-qualifying hedges:
|
|
|
|
|
|
|
|
||||||||
Net investment income
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(4
|
)
|
||||
Other revenues
|
—
|
|
|
11
|
|
|
—
|
|
|
44
|
|
||||
Net derivative gains (losses)
|
62
|
|
|
109
|
|
|
277
|
|
|
338
|
|
||||
Policyholder benefits and claims
|
(147
|
)
|
|
(52
|
)
|
|
(203
|
)
|
|
(62
|
)
|
||||
Total
|
$
|
(18
|
)
|
|
$
|
131
|
|
|
$
|
276
|
|
|
$
|
516
|
|
|
Net
Derivative
Gains (Losses)
|
|
Net
Investment
Income (1)
|
|
Policyholder
Benefits and
Claims (2)
|
|
Other
Revenues (3)
|
||||||||
|
(In millions)
|
||||||||||||||
Three Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
(487
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency exchange rate derivatives
|
(259
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Credit derivatives — purchased
|
(3
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Credit derivatives — written
|
45
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Equity derivatives
|
(884
|
)
|
|
(11
|
)
|
|
(160
|
)
|
|
—
|
|
||||
Total
|
$
|
(1,588
|
)
|
|
$
|
(15
|
)
|
|
$
|
(160
|
)
|
|
$
|
—
|
|
Three Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
(251
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
Foreign currency exchange rate derivatives
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Credit derivatives — purchased
|
(91
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Credit derivatives — written
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Equity derivatives
|
(679
|
)
|
|
2
|
|
|
(186
|
)
|
|
—
|
|
||||
Total
|
$
|
(1,087
|
)
|
|
$
|
(4
|
)
|
|
$
|
(186
|
)
|
|
$
|
30
|
|
Nine Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
(2,848
|
)
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
Foreign currency exchange rate derivatives
|
(1,243
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Credit derivatives — purchased
|
(8
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
||||
Credit derivatives — written
|
72
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Equity derivatives
|
(2,766
|
)
|
|
(22
|
)
|
|
(516
|
)
|
|
—
|
|
||||
Total
|
$
|
(6,793
|
)
|
|
$
|
(30
|
)
|
|
$
|
(533
|
)
|
|
$
|
—
|
|
Nine Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
467
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35
|
|
Foreign currency exchange rate derivatives
|
(167
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Credit derivatives — purchased
|
(262
|
)
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
||||
Credit derivatives — written
|
130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Equity derivatives
|
(1,825
|
)
|
|
(6
|
)
|
|
(399
|
)
|
|
—
|
|
||||
Total
|
$
|
(1,657
|
)
|
|
$
|
(19
|
)
|
|
$
|
(399
|
)
|
|
$
|
35
|
|
(1)
|
Changes in estimated fair value related to economic hedges of equity method investments in joint ventures; changes in estimated fair value related to derivatives held in relation to trading portfolios; and changes in estimated fair value related to derivatives held within contractholder-directed unit-linked investments.
|
(2)
|
Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits.
|
(3)
|
Changes in estimated fair value related to derivatives held in connection with the Company’s mortgage banking activities prior to the MetLife Bank Divestiture.
|
Derivatives in Fair Value
Hedging Relationships
|
|
Hedged Items in Fair Value
Hedging Relationships
|
|
Net Derivative
Gains (Losses)
Recognized
for Derivatives
|
|
Net Derivative
Gains (Losses)
Recognized for
Hedged Items
|
|
Ineffectiveness
Recognized in
Net Derivative
Gains (Losses)
|
||||||
|
|
|
|
(In millions)
|
||||||||||
Three Months Ended September 30, 2013:
|
|
|
|
|
|
|
||||||||
Interest rate swaps:
|
|
Fixed maturity securities
|
|
$
|
(3
|
)
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
Policyholder liabilities (1)
|
|
(102
|
)
|
|
105
|
|
|
3
|
|
|||
Foreign currency swaps:
|
|
Foreign-denominated fixed maturity securities
|
|
(7
|
)
|
|
6
|
|
|
(1
|
)
|
|||
|
|
Foreign-denominated PABs (2)
|
|
103
|
|
|
(100
|
)
|
|
3
|
|
|||
Foreign currency forwards:
|
|
Foreign-denominated fixed maturity securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
(9
|
)
|
|
$
|
14
|
|
|
$
|
5
|
|
||
Three Months Ended September 30, 2012:
|
|
|
|
|
|
|
||||||||
Interest rate swaps:
|
|
Fixed maturity securities
|
|
$
|
(9
|
)
|
|
$
|
7
|
|
|
$
|
(2
|
)
|
|
|
Policyholder liabilities (1)
|
|
(47
|
)
|
|
51
|
|
|
4
|
|
|||
Foreign currency swaps:
|
|
Foreign-denominated fixed maturity securities
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|||
|
|
Foreign-denominated PABs (2)
|
|
66
|
|
|
(68
|
)
|
|
(2
|
)
|
|||
Foreign currency forwards:
|
|
Foreign-denominated fixed maturity securities
|
|
18
|
|
|
(19
|
)
|
|
(1
|
)
|
|||
Total
|
|
$
|
26
|
|
|
$
|
(27
|
)
|
|
$
|
(1
|
)
|
||
Nine Months Ended September 30, 2013:
|
|
|
|
|
|
|
||||||||
Interest rate swaps:
|
|
Fixed maturity securities
|
|
$
|
35
|
|
|
$
|
(35
|
)
|
|
$
|
—
|
|
|
|
Policyholder liabilities (1)
|
|
(638
|
)
|
|
638
|
|
|
—
|
|
|||
Foreign currency swaps:
|
|
Foreign-denominated fixed maturity securities
|
|
10
|
|
|
(10
|
)
|
|
—
|
|
|||
|
|
Foreign-denominated PABs (2)
|
|
(91
|
)
|
|
96
|
|
|
5
|
|
|||
Foreign currency forwards:
|
|
Foreign-denominated fixed maturity securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
(684
|
)
|
|
$
|
689
|
|
|
$
|
5
|
|
||
Nine Months Ended September 30, 2012:
|
|
|
|
|
|
|
||||||||
Interest rate swaps:
|
|
Fixed maturity securities
|
|
$
|
(13
|
)
|
|
$
|
10
|
|
|
$
|
(3
|
)
|
|
|
Policyholder liabilities (1)
|
|
67
|
|
|
(54
|
)
|
|
13
|
|
|||
Foreign currency swaps:
|
|
Foreign-denominated fixed maturity securities
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|||
|
|
Foreign-denominated PABs (2)
|
|
(10
|
)
|
|
(7
|
)
|
|
(17
|
)
|
|||
Foreign currency forwards:
|
|
Foreign-denominated fixed maturity securities
|
|
11
|
|
|
(13
|
)
|
|
(2
|
)
|
|||
Total
|
|
$
|
54
|
|
|
$
|
(63
|
)
|
|
$
|
(9
|
)
|
(1)
|
Fixed rate liabilities reported in PABs or future policy benefits.
|
(2)
|
Fixed rate or floating rate liabilities.
|
Derivatives in Cash Flow
Hedging Relationships
|
|
Amount of Gains
(Losses) Deferred in
AOCI on Derivatives
|
|
Amount and Location
of Gains (Losses)
Reclassified from
AOCI into Income (Loss)
|
|
Amount and Location
of Gains (Losses)
Recognized in Income (Loss)
on Derivatives
|
||||||||||||||
|
|
(Effective Portion)
|
|
(Effective Portion)
|
|
(Ineffective Portion)
|
||||||||||||||
|
|
|
|
Net Derivative
Gains (Losses)
|
|
Net Investment
Income
|
|
Other
Expenses
|
|
Net Derivative
Gains (Losses)
|
||||||||||
|
|
|
|
(In millions)
|
|
|
||||||||||||||
Three Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
$
|
(110
|
)
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
Interest rate forwards
|
|
(11
|
)
|
|
2
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||
Foreign currency swaps
|
|
(165
|
)
|
|
216
|
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|||||
Credit forwards
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
(287
|
)
|
|
$
|
221
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
Three Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
$
|
(93
|
)
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest rate forwards
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Foreign currency swaps
|
|
(215
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Credit forwards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
(324
|
)
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
Nine Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
$
|
(507
|
)
|
|
$
|
17
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate forwards
|
|
(41
|
)
|
|
8
|
|
|
2
|
|
|
(2
|
)
|
|
1
|
|
|||||
Foreign currency swaps
|
|
(108
|
)
|
|
(41
|
)
|
|
(2
|
)
|
|
1
|
|
|
4
|
|
|||||
Credit forwards
|
|
(4
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
(660
|
)
|
|
$
|
(16
|
)
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
|
$
|
5
|
|
Nine Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
$
|
105
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
Interest rate forwards
|
|
(4
|
)
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||
Foreign currency swaps
|
|
(105
|
)
|
|
2
|
|
|
(4
|
)
|
|
1
|
|
|
(6
|
)
|
|||||
Credit forwards
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
(4
|
)
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
(6
|
)
|
Derivatives in Net Investment Hedging Relationships (1), (2)
|
|
Amount of Gains (Losses) Deferred in AOCI
(Effective Portion)
|
||
|
|
(In millions)
|
||
Three Months Ended September 30, 2013:
|
|
|
||
Foreign currency forwards
|
|
$
|
(154
|
)
|
Currency options
|
|
(122
|
)
|
|
Total
|
|
$
|
(276
|
)
|
Three Months Ended September 30, 2012:
|
|
|
||
Foreign currency forwards
|
|
$
|
(54
|
)
|
Currency options
|
|
(24
|
)
|
|
Total
|
|
$
|
(78
|
)
|
Nine Months Ended September 30, 2013:
|
|
|
||
Foreign currency forwards
|
|
$
|
11
|
|
Currency options
|
|
99
|
|
|
Total
|
|
$
|
110
|
|
Nine Months Ended September 30, 2012:
|
|
|
||
Foreign currency forwards
|
|
$
|
(64
|
)
|
Currency options
|
|
(48
|
)
|
|
Total
|
|
$
|
(112
|
)
|
(1)
|
During the
three months and nine months ended
September 30, 2013
and
2012
, there were
no
sales or substantial liquidations of net investments in foreign operations that would have required the reclassification of gains or losses from AOCI into earnings.
|
(2)
|
There was
no
ineffectiveness recognized for the Company’s hedges of net investments in foreign operations. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||
Rating Agency Designation of Referenced
Credit Obligations (1)
|
|
Estimated
Fair Value
of Credit
Default
Swaps
|
|
Maximum
Amount
of Future
Payments under
Credit Default
Swaps (2)
|
|
Weighted
Average
Years to
Maturity (3)
|
|
Estimated
Fair Value
of Credit
Default
Swaps
|
|
Maximum
Amount
of Future
Payments under
Credit Default
Swaps (2)
|
|
Weighted
Average
Years to
Maturity (3)
|
||||||||
|
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||||||||
Aaa/Aa/A
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Single name credit default swaps (corporate)
|
|
$
|
8
|
|
|
$
|
652
|
|
|
2.4
|
|
$
|
10
|
|
|
$
|
777
|
|
|
2.7
|
Credit default swaps referencing indices
|
|
28
|
|
|
2,814
|
|
|
1.5
|
|
42
|
|
|
2,713
|
|
|
2.1
|
||||
Subtotal
|
|
36
|
|
|
3,466
|
|
|
1.6
|
|
52
|
|
|
3,490
|
|
|
2.2
|
||||
Baa
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Single name credit default swaps (corporate)
|
|
20
|
|
|
1,645
|
|
|
3.5
|
|
8
|
|
|
1,314
|
|
|
3.4
|
||||
Credit default swaps referencing indices
|
|
43
|
|
|
3,886
|
|
|
4.9
|
|
11
|
|
|
3,750
|
|
|
4.9
|
||||
Subtotal
|
|
63
|
|
|
5,531
|
|
|
4.5
|
|
19
|
|
|
5,064
|
|
|
4.5
|
||||
Ba
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Single name credit default swaps (corporate)
|
|
—
|
|
|
15
|
|
|
4.5
|
|
—
|
|
|
25
|
|
|
2.7
|
||||
Credit default swaps referencing indices
|
|
—
|
|
|
—
|
|
|
0.0
|
|
—
|
|
|
—
|
|
|
0.0
|
||||
Subtotal
|
|
—
|
|
|
15
|
|
|
4.5
|
|
—
|
|
|
25
|
|
|
2.7
|
||||
B
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Single name credit default swaps (corporate)
|
|
—
|
|
|
—
|
|
|
0.0
|
|
—
|
|
|
—
|
|
|
0.0
|
||||
Credit default swaps referencing indices
|
|
18
|
|
|
375
|
|
|
5.1
|
|
3
|
|
|
300
|
|
|
4.9
|
||||
Subtotal
|
|
18
|
|
|
375
|
|
|
5.1
|
|
3
|
|
|
300
|
|
|
4.9
|
||||
Total
|
|
$
|
117
|
|
|
$
|
9,387
|
|
|
3.4
|
|
$
|
74
|
|
|
$
|
8,879
|
|
|
3.6
|
(1)
|
The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.
|
(2)
|
Assumes the value of the referenced credit obligations is zero.
|
(3)
|
The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
|
|
(In millions)
|
||||||||||||||
Gross estimated fair value of derivatives:
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral (1)
|
|
$
|
9,252
|
|
|
$
|
5,443
|
|
|
$
|
14,048
|
|
|
$
|
5,480
|
|
OTC-cleared (1)
|
|
214
|
|
|
153
|
|
|
—
|
|
|
—
|
|
||||
Exchange-traded
|
|
35
|
|
|
11
|
|
|
19
|
|
|
170
|
|
||||
Total gross estimated fair value of derivatives (1)
|
|
9,501
|
|
|
5,607
|
|
|
14,067
|
|
|
5,650
|
|
||||
Amounts offset in the consolidated balance sheets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Estimated fair value of derivatives presented in the consolidated balance sheets (1)
|
|
9,501
|
|
|
5,607
|
|
|
14,067
|
|
|
5,650
|
|
||||
Gross amounts not offset in the consolidated balance sheets:
|
|
|
|
|
|
|
|
|
||||||||
Gross estimated fair value of derivatives: (2)
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral
|
|
(4,308
|
)
|
|
(4,308
|
)
|
|
(4,562
|
)
|
|
(4,562
|
)
|
||||
OTC-cleared
|
|
(147
|
)
|
|
(147
|
)
|
|
—
|
|
|
—
|
|
||||
Exchange-traded
|
|
(7
|
)
|
|
(7
|
)
|
|
(19
|
)
|
|
(19
|
)
|
||||
Cash collateral: (3)
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral
|
|
(2,336
|
)
|
|
(3
|
)
|
|
(5,960
|
)
|
|
(1
|
)
|
||||
OTC-cleared
|
|
(67
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Exchange-traded
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(151
|
)
|
||||
Securities collateral: (4)
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral
|
|
(2,299
|
)
|
|
(848
|
)
|
|
(3,526
|
)
|
|
(875
|
)
|
||||
OTC-cleared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Exchange-traded
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net amount after application of master netting agreements and collateral
|
|
$
|
337
|
|
|
$
|
284
|
|
|
$
|
—
|
|
|
$
|
42
|
|
(1)
|
At
September 30, 2013
and
December 31, 2012
, derivative assets include income or expense accruals reported in accrued investment income or in other liabilities of
$200 million
and
$290 million
, respectively, and derivative liabilities include income or expense accruals reported in accrued investment income or in other liabilities of
$49 million
and
$114 million
, respectively.
|
(2)
|
Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.
|
(3)
|
Cash collateral received is included in cash and cash equivalents, short-term investments or in fixed maturity securities, and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables in the consolidated balance sheets. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At
September 30, 2013
and
December 31, 2012
, the Company received excess cash collateral of
$47 million
and
$0
, respectively, and provided excess cash collateral of
$389 million
and
$290 million
, respectively, which is not included in the table above due to the foregoing limitation.
|
(4)
|
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the consolidated balance sheets. Subject to certain constraints, the Company is permitted by contract to sell or repledge this collateral, but at
September 30, 2013
none
of the collateral had been sold or repledged. Securities collateral pledged by the Company is reported in fixed maturity securities in the consolidated balance sheets. Subject to certain constraints, the counterparties are permitted by contract to sell or repledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At
September 30, 2013
and
December 31, 2012
, the Company received excess securities collateral of
$202 million
and
$161 million
, respectively, for its OTC-bilateral derivatives which are not included in the table above due to the foregoing limitation. At
September 30, 2013
and
December 31, 2012
, the Company provided excess securities collateral of
$169 million
and
$0
, respectively, for its OTC-bilateral derivatives,
$123 million
and
$0
, respectively, for its OTC-cleared derivatives, and
$39 million
and
$40 million
, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
|
|
|
|
|
Estimated Fair Value of
Collateral Provided:
|
|
Fair Value of Incremental
Collateral Provided Upon:
|
||||||||||||||
|
|
Estimated
Fair Value of
Derivatives in Net
Liability Position (1)
|
|
Fixed Maturity
Securities
|
|
Cash
|
|
One Notch
Downgrade
in the
Company’s
Credit
Rating
|
|
Downgrade in the
Company’s Credit Rating
to a Level that Triggers
Full Overnight
Collateralization or
Termination of
the Derivative Position
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to credit-contingent provisions
|
|
$
|
1,068
|
|
|
$
|
1,017
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
49
|
|
Derivatives not subject to credit-contingent provisions
|
|
12
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
1,080
|
|
|
$
|
1,017
|
|
|
$
|
5
|
|
|
$
|
25
|
|
|
$
|
49
|
|
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to credit-contingent provisions
|
|
$
|
771
|
|
|
$
|
775
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
73
|
|
Derivatives not subject to credit-contingent provisions
|
|
79
|
|
|
100
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
850
|
|
|
$
|
875
|
|
|
$
|
1
|
|
|
$
|
35
|
|
|
$
|
73
|
|
(1)
|
After taking into consideration the existence of netting agreements.
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Net derivative gains (losses) (1)
|
$
|
898
|
|
|
$
|
227
|
|
|
$
|
3,661
|
|
|
$
|
673
|
|
Policyholder benefits and claims
|
$
|
(30
|
)
|
|
$
|
(4
|
)
|
|
$
|
(110
|
)
|
|
$
|
(9
|
)
|
(1)
|
The valuation of guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses), in connection with this adjustment were
($145) million
and
($795) million
for the
three months and nine months ended
September 30, 2013
, respectively, and
($534) million
and
($1.2) billion
for the
three months and nine months ended
September 30, 2012
, respectively.
|
|
September 30, 2013
|
||||||||||||||
|
Fair Value Hierarchy
|
|
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Estimated
Fair Value
|
||||||||
|
(In millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. corporate
|
$
|
—
|
|
|
$
|
101,605
|
|
|
$
|
5,886
|
|
|
$
|
107,491
|
|
Foreign corporate
|
—
|
|
|
57,384
|
|
|
6,264
|
|
|
63,648
|
|
||||
Foreign government
|
—
|
|
|
50,941
|
|
|
2,063
|
|
|
53,004
|
|
||||
U.S. Treasury and agency
|
23,460
|
|
|
20,629
|
|
|
65
|
|
|
44,154
|
|
||||
RMBS
|
657
|
|
|
31,803
|
|
|
3,018
|
|
|
35,478
|
|
||||
CMBS
|
—
|
|
|
15,720
|
|
|
1,176
|
|
|
16,896
|
|
||||
ABS
|
—
|
|
|
10,098
|
|
|
4,063
|
|
|
14,161
|
|
||||
State and political subdivision
|
—
|
|
|
13,939
|
|
|
16
|
|
|
13,955
|
|
||||
Total fixed maturity securities
|
24,117
|
|
|
302,119
|
|
|
22,551
|
|
|
348,787
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stock
|
1,102
|
|
|
983
|
|
|
185
|
|
|
2,270
|
|
||||
Non-redeemable preferred stock
|
—
|
|
|
566
|
|
|
405
|
|
|
971
|
|
||||
Total equity securities
|
1,102
|
|
|
1,549
|
|
|
590
|
|
|
3,241
|
|
||||
FVO and trading securities:
|
|
|
|
|
|
|
|
||||||||
Actively Traded Securities
|
4
|
|
|
621
|
|
|
11
|
|
|
636
|
|
||||
FVO general account securities
|
5
|
|
|
139
|
|
|
47
|
|
|
191
|
|
||||
FVO contractholder-directed unit-linked investments
|
10,302
|
|
|
4,888
|
|
|
606
|
|
|
15,796
|
|
||||
FVO securities held by CSEs
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||
Total FVO and trading securities
|
10,311
|
|
|
5,671
|
|
|
664
|
|
|
16,646
|
|
||||
Short-term investments (1)
|
3,615
|
|
|
6,799
|
|
|
192
|
|
|
10,606
|
|
||||
Mortgage loans:
|
|
|
|
|
|
|
|
||||||||
Residential mortgage loans — FVO
|
—
|
|
|
—
|
|
|
212
|
|
|
212
|
|
||||
Commercial mortgage loans held by CSEs
|
—
|
|
|
2,096
|
|
|
—
|
|
|
2,096
|
|
||||
Mortgage loans held-for-sale (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total mortgage loans
|
—
|
|
|
2,096
|
|
|
212
|
|
|
2,308
|
|
||||
Other invested assets:
|
|
|
|
|
|
|
|
||||||||
Other investments
|
161
|
|
|
78
|
|
|
—
|
|
|
239
|
|
||||
Derivative assets: (3)
|
|
|
|
|
|
|
|
|
|||||||
Interest rate
|
3
|
|
|
6,206
|
|
|
64
|
|
|
6,273
|
|
||||
Foreign currency exchange rate
|
2
|
|
|
995
|
|
|
25
|
|
|
1,022
|
|
||||
Credit
|
—
|
|
|
98
|
|
|
31
|
|
|
129
|
|
||||
Equity market
|
30
|
|
|
1,543
|
|
|
304
|
|
|
1,877
|
|
||||
Total derivative assets
|
35
|
|
|
8,842
|
|
|
424
|
|
|
9,301
|
|
||||
Total other invested assets
|
196
|
|
|
8,920
|
|
|
424
|
|
|
9,540
|
|
||||
Net embedded derivatives within asset host contracts (4)
|
—
|
|
|
—
|
|
|
322
|
|
|
322
|
|
||||
Separate account assets (5)
|
35,689
|
|
|
218,144
|
|
|
1,417
|
|
|
255,250
|
|
||||
Total assets
|
$
|
75,030
|
|
|
$
|
545,298
|
|
|
$
|
26,372
|
|
|
$
|
646,700
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities: (3)
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
$
|
7
|
|
|
$
|
2,457
|
|
|
$
|
19
|
|
|
$
|
2,483
|
|
Foreign currency exchange rate
|
—
|
|
|
1,542
|
|
|
16
|
|
|
1,558
|
|
||||
Credit
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||
Equity market
|
4
|
|
|
918
|
|
|
555
|
|
|
1,477
|
|
||||
Total derivative liabilities
|
11
|
|
|
4,957
|
|
|
590
|
|
|
5,558
|
|
||||
Net embedded derivatives within liability host contracts (4)
|
—
|
|
|
7
|
|
|
375
|
|
|
382
|
|
||||
Long-term debt of CSEs
|
—
|
|
|
1,920
|
|
|
26
|
|
|
1,946
|
|
||||
Trading liabilities (6)
|
228
|
|
|
4
|
|
|
—
|
|
|
232
|
|
||||
Total liabilities
|
$
|
239
|
|
|
$
|
6,888
|
|
|
$
|
991
|
|
|
$
|
8,118
|
|
|
December 31, 2012
|
||||||||||||||
|
Fair Value Hierarchy
|
|
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Estimated
Fair Value
|
||||||||
|
(In millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. corporate
|
$
|
—
|
|
|
$
|
106,693
|
|
|
$
|
7,433
|
|
|
$
|
114,126
|
|
Foreign corporate
|
—
|
|
|
60,976
|
|
|
6,208
|
|
|
67,184
|
|
||||
Foreign government
|
—
|
|
|
55,522
|
|
|
1,814
|
|
|
57,336
|
|
||||
U.S. Treasury and agency
|
27,441
|
|
|
20,455
|
|
|
71
|
|
|
47,967
|
|
||||
RMBS
|
—
|
|
|
35,442
|
|
|
2,037
|
|
|
37,479
|
|
||||
CMBS
|
—
|
|
|
17,982
|
|
|
1,147
|
|
|
19,129
|
|
||||
ABS
|
—
|
|
|
12,341
|
|
|
3,656
|
|
|
15,997
|
|
||||
State and political subdivision
|
—
|
|
|
14,994
|
|
|
54
|
|
|
15,048
|
|
||||
Total fixed maturity securities
|
27,441
|
|
|
324,405
|
|
|
22,420
|
|
|
374,266
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stock
|
932
|
|
|
1,040
|
|
|
190
|
|
|
2,162
|
|
||||
Non-redeemable preferred stock
|
—
|
|
|
310
|
|
|
419
|
|
|
729
|
|
||||
Total equity securities
|
932
|
|
|
1,350
|
|
|
609
|
|
|
2,891
|
|
||||
FVO and trading securities:
|
|
|
|
|
|
|
|
||||||||
Actively Traded Securities
|
7
|
|
|
646
|
|
|
6
|
|
|
659
|
|
||||
FVO general account securities
|
—
|
|
|
151
|
|
|
32
|
|
|
183
|
|
||||
FVO contractholder-directed unit-linked investments
|
9,103
|
|
|
5,425
|
|
|
937
|
|
|
15,465
|
|
||||
FVO securities held by CSEs
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
||||
Total FVO and trading securities
|
9,110
|
|
|
6,263
|
|
|
975
|
|
|
16,348
|
|
||||
Short-term investments (1)
|
9,426
|
|
|
6,295
|
|
|
429
|
|
|
16,150
|
|
||||
Mortgage loans:
|
|
|
|
|
|
|
|
||||||||
Residential mortgage loans — FVO
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial mortgage loans held by CSEs
|
—
|
|
|
2,666
|
|
|
—
|
|
|
2,666
|
|
||||
Mortgage loans held-for-sale (2)
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
||||
Total mortgage loans
|
—
|
|
|
2,666
|
|
|
49
|
|
|
2,715
|
|
||||
Other invested assets:
|
|
|
|
|
|
|
|
||||||||
Other investments
|
303
|
|
|
123
|
|
|
—
|
|
|
426
|
|
||||
Derivative assets: (3)
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
1
|
|
|
9,648
|
|
|
206
|
|
|
9,855
|
|
||||
Foreign currency exchange rate
|
4
|
|
|
819
|
|
|
44
|
|
|
867
|
|
||||
Credit
|
—
|
|
|
47
|
|
|
43
|
|
|
90
|
|
||||
Equity market
|
14
|
|
|
2,478
|
|
|
473
|
|
|
2,965
|
|
||||
Total derivative assets
|
19
|
|
|
12,992
|
|
|
766
|
|
|
13,777
|
|
||||
Total other invested assets
|
322
|
|
|
13,115
|
|
|
766
|
|
|
14,203
|
|
||||
Net embedded derivatives within asset host contracts (4)
|
—
|
|
|
1
|
|
|
505
|
|
|
506
|
|
||||
Separate account assets (5)
|
31,620
|
|
|
202,568
|
|
|
1,205
|
|
|
235,393
|
|
||||
Total assets
|
$
|
78,851
|
|
|
$
|
556,663
|
|
|
$
|
26,958
|
|
|
$
|
662,472
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities: (3)
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
$
|
38
|
|
|
$
|
3,001
|
|
|
$
|
29
|
|
|
$
|
3,068
|
|
Foreign currency exchange rate
|
—
|
|
|
1,521
|
|
|
7
|
|
|
1,528
|
|
||||
Credit
|
—
|
|
|
39
|
|
|
—
|
|
|
39
|
|
||||
Equity market
|
132
|
|
|
424
|
|
|
345
|
|
|
901
|
|
||||
Total derivative liabilities
|
170
|
|
|
4,985
|
|
|
381
|
|
|
5,536
|
|
||||
Net embedded derivatives within liability host contracts (4)
|
—
|
|
|
17
|
|
|
3,667
|
|
|
3,684
|
|
||||
Long-term debt of CSEs
|
—
|
|
|
2,483
|
|
|
44
|
|
|
2,527
|
|
||||
Trading liabilities (6)
|
163
|
|
|
—
|
|
|
—
|
|
|
163
|
|
||||
Total liabilities
|
$
|
333
|
|
|
$
|
7,485
|
|
|
$
|
4,092
|
|
|
$
|
11,910
|
|
(1)
|
Short-term investments as presented in the tables above differ from the amounts presented in the consolidated balance sheets because certain short-term investments are not measured at estimated fair value on a recurring basis.
|
(2)
|
See “— Fair Value Option” for additional information on mortgage loans held-for-sale. The amounts in the preceding tables differ from the amounts presented in the consolidated balance sheets as these tables do not include mortgage loans that are stated at lower of amortized cost or estimated fair value.
|
(3)
|
Derivative assets are presented within other invested assets in the consolidated balance sheets and derivative liabilities are presented within other liabilities in the consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation in the consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables.
|
(4)
|
Net embedded derivatives within asset host contracts are presented primarily within premiums, reinsurance and other receivables in the consolidated balance sheets. Net embedded derivatives within liability host contracts are presented primarily within PABs in the consolidated balance sheets. At
September 30, 2013
and
December 31, 2012
, equity securities also included embedded derivatives of
($136) million
and
($88) million
, respectively.
|
(5)
|
Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets.
|
(6)
|
Trading liabilities are presented within other liabilities in the consolidated balance sheets.
|
|
|
|
|
|
|
|
September 30, 2013
|
|
December 31, 2012
|
|
Impact of
Increase in Input
on Estimated
Fair Value (2)
|
||||||||
|
Valuation
Techniques
|
|
Significant
Unobservable Inputs
|
|
Range
|
|
Weighted
Average (1)
|
|
Range
|
|
Weighted
Average (1)
|
|
|||||||
Fixed maturity securities: (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
U.S. corporate and foreign corporate
|
•
|
Matrix pricing
|
|
•
|
Delta spread adjustments (4)
|
|
(40)
|
-
|
240
|
|
66
|
|
(50)
|
-
|
500
|
|
90
|
|
Decrease
|
|
|
|
|
•
|
Illiquidity premium (4)
|
|
30
|
-
|
30
|
|
30
|
|
30
|
-
|
30
|
|
30
|
|
Decrease
|
|
|
|
|
•
|
Credit spreads (4)
|
|
(1,508)
|
-
|
711
|
|
195
|
|
(1,416)
|
-
|
876
|
|
272
|
|
Decrease
|
|
|
|
|
•
|
Offered quotes (5)
|
|
—
|
-
|
134
|
|
101
|
|
—
|
-
|
348
|
|
115
|
|
Increase
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (5)
|
|
56
|
-
|
116
|
|
92
|
|
—
|
-
|
555
|
|
92
|
|
Increase
|
Foreign government
|
•
|
Matrix pricing
|
|
•
|
Credit spreads (4)
|
|
9
|
-
|
1,434
|
|
490
|
|
(58)
|
-
|
150
|
|
72
|
|
Decrease
|
|
•
|
Market pricing
|
|
•
|
Quoted prices (5)
|
|
62
|
-
|
157
|
|
98
|
|
77
|
-
|
146
|
|
99
|
|
Increase
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (5)
|
|
90
|
-
|
152
|
|
112
|
|
82
|
-
|
200
|
|
117
|
|
Increase
|
RMBS
|
•
|
Matrix pricing and discounted cash flow
|
|
•
|
Credit spreads (4)
|
|
(205)
|
-
|
3,662
|
|
295
|
|
9
|
-
|
2,980
|
|
521
|
|
Decrease (6)
|
|
•
|
Market pricing
|
|
•
|
Quoted prices (5)
|
|
22
|
-
|
100
|
|
97
|
|
13
|
-
|
109
|
|
100
|
|
Increase (6)
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (5)
|
|
37
|
-
|
100
|
|
90
|
|
28
|
-
|
100
|
|
75
|
|
Increase (6)
|
CMBS
|
•
|
Matrix pricing and discounted cash flow
|
|
•
|
Credit spreads (4)
|
|
130
|
-
|
2,515
|
|
349
|
|
1
|
-
|
9,164
|
|
374
|
|
Decrease (6)
|
|
•
|
Market pricing
|
|
•
|
Quoted prices (5)
|
|
75
|
-
|
104
|
|
99
|
|
1
|
-
|
106
|
|
99
|
|
Increase (6)
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (5)
|
|
96
|
-
|
96
|
|
96
|
|
|
|
|
|
|
|
Increase (6)
|
ABS
|
•
|
Matrix pricing and discounted cash flow
|
|
•
|
Credit spreads (4)
|
|
30
|
-
|
1,877
|
|
129
|
|
—
|
-
|
1,829
|
|
109
|
|
Decrease (6)
|
|
•
|
Market pricing
|
|
•
|
Quoted prices (5)
|
|
—
|
-
|
107
|
|
101
|
|
40
|
-
|
105
|
|
100
|
|
Increase (6)
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (5)
|
|
—
|
-
|
106
|
|
89
|
|
—
|
-
|
111
|
|
97
|
|
Increase (6)
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate
|
•
|
Present value techniques
|
|
•
|
Swap yield (7)
|
|
247
|
-
|
427
|
|
|
|
186
|
-
|
353
|
|
|
|
Increase (12)
|
Foreign currency exchange rate
|
•
|
Present value techniques
|
|
•
|
Swap yield (7)
|
|
193
|
-
|
769
|
|
|
|
228
|
-
|
795
|
|
|
|
Increase (12)
|
|
|
|
|
•
|
Correlation (8)
|
|
38%
|
-
|
49%
|
|
|
|
43%
|
-
|
57%
|
|
|
|
|
Credit
|
•
|
Present value techniques
|
|
•
|
Credit spreads (9)
|
|
99
|
-
|
100
|
|
|
|
100
|
-
|
100
|
|
|
|
Decrease (9)
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity market
|
•
|
Present value techniques or option pricing models
|
|
•
|
Volatility (11)
|
|
14%
|
-
|
29%
|
|
|
|
13%
|
-
|
32%
|
|
|
|
Increase (12)
|
|
|
|
|
•
|
Correlation (8)
|
|
60%
|
-
|
60%
|
|
|
|
65%
|
-
|
65%
|
|
|
|
|
Embedded derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Direct and assumed guaranteed minimum benefits
|
•
|
Option pricing techniques
|
|
•
|
Mortality rates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ages 0 - 40
|
|
0%
|
-
|
0.14%
|
|
|
|
0%
|
-
|
0.14%
|
|
|
|
Decrease (13)
|
|
|
|
|
|
Ages 41 - 60
|
|
0.04%
|
-
|
0.88%
|
|
|
|
0.05%
|
-
|
0.88%
|
|
|
|
Decrease (13)
|
|
|
|
|
|
Ages 61 - 115
|
|
0.26%
|
-
|
100%
|
|
|
|
0.26%
|
-
|
100%
|
|
|
|
Decrease (13)
|
|
|
|
|
•
|
Lapse rates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Durations 1 - 10
|
|
0.50%
|
-
|
100%
|
|
|
|
0.50%
|
-
|
100%
|
|
|
|
Decrease (14)
|
|
|
|
|
|
Durations 11 - 20
|
|
2%
|
-
|
100%
|
|
|
|
2%
|
-
|
100%
|
|
|
|
Decrease (14)
|
|
|
|
|
|
Durations 21 - 116
|
|
2%
|
-
|
100%
|
|
|
|
2%
|
-
|
100%
|
|
|
|
Decrease (14)
|
|
|
|
|
•
|
Utilization rates
|
|
20%
|
-
|
50%
|
|
|
|
20%
|
-
|
50%
|
|
|
|
Increase (15)
|
|
|
|
|
•
|
Withdrawal rates
|
|
0%
|
-
|
20%
|
|
|
|
0.07%
|
-
|
20%
|
|
|
|
(16)
|
|
|
|
|
•
|
Long-term equity volatilities
|
|
15.20%
|
-
|
40%
|
|
|
|
15.18%
|
-
|
40%
|
|
|
|
Increase (17)
|
|
|
|
|
•
|
Nonperformance risk spread
|
|
(0.19)%
|
-
|
1.01%
|
|
|
|
0.10%
|
-
|
1.72%
|
|
|
|
Decrease (18)
|
(1)
|
The weighted average for fixed maturity securities is determined based on the estimated fair value of the securities.
|
(2)
|
The impact of a decrease in input would have the opposite impact on the estimated fair value. For embedded derivatives, changes are based on liability positions.
|
(3)
|
Significant increases (decreases) in expected default rates in isolation would result in substantially lower (higher) valuations.
|
(4)
|
Range and weighted average are presented in basis points.
|
(5)
|
Range and weighted average are presented in accordance with the market convention for fixed maturity securities of dollars per hundred dollars of par.
|
(6)
|
Changes in the assumptions used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates.
|
(7)
|
Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curve is utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a range is more representative of the unobservable input used in the valuation.
|
(8)
|
Ranges represent the different correlation factors utilized as components within the valuation methodology. Presenting a range of correlation factors is more representative of the unobservable input used in the valuation. Increases (decreases) in correlation in isolation will increase (decrease) the significance of the change in valuations.
|
(9)
|
Represents the risk quoted in basis points of a credit default event on the underlying instrument. The range being provided is a single quoted spread in the valuation model. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps.
|
(10)
|
At both
September 30, 2013
and
December 31, 2012
, independent non-binding broker quotations were used in the determination of less than 1% of the total net derivative estimated fair value.
|
(11)
|
Ranges represent the underlying equity volatility quoted in percentage points. Since this valuation methodology uses a range of inputs across multiple volatility surfaces to value the derivative, presenting a range is more representative of the unobservable input used in the valuation.
|
(12)
|
Changes are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions.
|
(13)
|
Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based on company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.
|
(14)
|
Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.
|
(15)
|
The utilization rate assumption estimates the percentage of contract holders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.
|
(16)
|
The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value.
|
(17)
|
Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.
|
(18)
|
Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded derivative.
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||
|
Fixed Maturity Securities:
|
||||||||||||||||||||||||||||||
|
U.S.
Corporate
|
|
Foreign
Corporate
|
|
Foreign
Government
|
|
U.S.
Treasury
and Agency
|
|
RMBS
|
|
CMBS
|
|
ABS
|
|
State and
Political
Subdivision
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Three Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
5,918
|
|
|
$
|
6,008
|
|
|
$
|
1,971
|
|
|
$
|
82
|
|
|
$
|
2,735
|
|
|
$
|
1,050
|
|
|
$
|
3,758
|
|
|
$
|
41
|
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
3
|
|
|
5
|
|
|
(6
|
)
|
|
—
|
|
|
9
|
|
|
4
|
|
|
3
|
|
|
—
|
|
||||||||
Net investment gains (losses)
|
4
|
|
|
(14
|
)
|
|
2
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
5
|
|
|
—
|
|
||||||||
Net derivative gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
OCI
|
(32
|
)
|
|
71
|
|
|
(42
|
)
|
|
—
|
|
|
(16
|
)
|
|
22
|
|
|
(4
|
)
|
|
—
|
|
||||||||
Purchases (3)
|
297
|
|
|
684
|
|
|
209
|
|
|
—
|
|
|
563
|
|
|
305
|
|
|
636
|
|
|
—
|
|
||||||||
Sales (3)
|
(249
|
)
|
|
(273
|
)
|
|
(61
|
)
|
|
(2
|
)
|
|
(138
|
)
|
|
(71
|
)
|
|
(309
|
)
|
|
(1
|
)
|
||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers into Level 3 (4)
|
117
|
|
|
173
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers out of Level 3 (4)
|
(172
|
)
|
|
(390
|
)
|
|
(78
|
)
|
|
(15
|
)
|
|
(136
|
)
|
|
(133
|
)
|
|
(26
|
)
|
|
(24
|
)
|
||||||||
Balance, end of period
|
$
|
5,886
|
|
|
$
|
6,264
|
|
|
$
|
2,063
|
|
|
$
|
65
|
|
|
$
|
3,018
|
|
|
$
|
1,176
|
|
|
$
|
4,063
|
|
|
$
|
16
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||
|
Equity Securities:
|
|
FVO and Trading Securities:
|
|
|
|
Mortgage Loans:
|
||||||||||||||||||||||||
|
Common
Stock
|
|
Non-
redeemable
Preferred
Stock
|
|
Actively
Traded
Securities
|
|
FVO
General
Account
Securities
|
|
FVO
Contractholder-
directed
Unit-linked
Investments
|
|
Short-term
Investments
|
|
Residential
Mortgage
Loans -
FVO
|
|
Mortgage
Loans Held-
for-sale
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Three Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
183
|
|
|
$
|
408
|
|
|
$
|
11
|
|
|
$
|
46
|
|
|
$
|
593
|
|
|
$
|
344
|
|
|
$
|
150
|
|
|
$
|
—
|
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(43
|
)
|
|
3
|
|
|
(2
|
)
|
|
—
|
|
||||||||
Net investment gains (losses)
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||||
Net derivative gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
OCI
|
6
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||||||
Purchases (3)
|
6
|
|
|
52
|
|
|
6
|
|
|
—
|
|
|
308
|
|
|
106
|
|
|
67
|
|
|
—
|
|
||||||||
Sales (3)
|
(11
|
)
|
|
(42
|
)
|
|
(1
|
)
|
|
—
|
|
|
(232
|
)
|
|
(266
|
)
|
|
—
|
|
|
—
|
|
||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||||||
Transfers into Level 3 (4)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers out of Level 3 (4)
|
(1
|
)
|
|
(20
|
)
|
|
(5
|
)
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Balance, end of period
|
$
|
185
|
|
|
$
|
405
|
|
|
$
|
11
|
|
|
$
|
47
|
|
|
$
|
606
|
|
|
$
|
192
|
|
|
$
|
212
|
|
|
$
|
—
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||
|
Net Derivatives: (6)
|
|
|
|
|
|
|
||||||||||||||||||||
|
Interest
Rate
|
|
Foreign
Currency
Exchange
Rate
|
|
Credit
|
|
Equity
Market
|
|
Net
Embedded
Derivatives (7)
|
|
Separate
Account
Assets (8)
|
|
Long-term
Debt of
CSEs
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Three Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
$
|
98
|
|
|
$
|
6
|
|
|
$
|
25
|
|
|
$
|
(171
|
)
|
|
$
|
(678
|
)
|
|
$
|
1,225
|
|
|
$
|
(31
|
)
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net investment gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|||||||
Net derivative gains (losses)
|
5
|
|
|
3
|
|
|
3
|
|
|
(85
|
)
|
|
888
|
|
|
—
|
|
|
—
|
|
|||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
OCI
|
(11
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|||||||
Purchases (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106
|
|
|
—
|
|
|||||||
Sales (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
|||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|||||||
Settlements (3)
|
(47
|
)
|
|
1
|
|
|
4
|
|
|
—
|
|
|
(217
|
)
|
|
(2
|
)
|
|
5
|
|
|||||||
Transfers into Level 3 (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|
—
|
|
|||||||
Transfers out of Level 3 (4)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|||||||
Balance, end of period
|
$
|
45
|
|
|
$
|
9
|
|
|
$
|
31
|
|
|
$
|
(251
|
)
|
|
$
|
(53
|
)
|
|
$
|
1,417
|
|
|
$
|
(26
|
)
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net investment income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
(86
|
)
|
|
$
|
882
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
(29
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||
|
Fixed Maturity Securities:
|
||||||||||||||||||||||||||||||
|
U.S.
Corporate
|
|
Foreign
Corporate
|
|
Foreign
Government
|
|
U.S.
Treasury
and Agency
|
|
RMBS
|
|
CMBS
|
|
ABS
|
|
State and
Political
Subdivision
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Three Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
7,394
|
|
|
$
|
4,813
|
|
|
$
|
2,386
|
|
|
$
|
74
|
|
|
$
|
2,363
|
|
|
$
|
1,038
|
|
|
$
|
2,680
|
|
|
$
|
76
|
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
5
|
|
|
5
|
|
|
4
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||||
Net investment gains (losses)
|
(6
|
)
|
|
(13
|
)
|
|
6
|
|
|
—
|
|
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||||
Net derivative gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
OCI
|
323
|
|
|
135
|
|
|
43
|
|
|
—
|
|
|
108
|
|
|
7
|
|
|
32
|
|
|
1
|
|
||||||||
Purchases (3)
|
442
|
|
|
630
|
|
|
370
|
|
|
—
|
|
|
249
|
|
|
416
|
|
|
215
|
|
|
15
|
|
||||||||
Sales (3)
|
(348
|
)
|
|
(276
|
)
|
|
(254
|
)
|
|
—
|
|
|
(114
|
)
|
|
(249
|
)
|
|
(47
|
)
|
|
(6
|
)
|
||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers into Level 3 (4)
|
128
|
|
|
172
|
|
|
51
|
|
|
—
|
|
|
11
|
|
|
26
|
|
|
2
|
|
|
—
|
|
||||||||
Transfers out of Level 3 (4)
|
(239
|
)
|
|
(156
|
)
|
|
(16
|
)
|
|
—
|
|
|
(49
|
)
|
|
(23
|
)
|
|
(36
|
)
|
|
(21
|
)
|
||||||||
Balance, end of period
|
$
|
7,699
|
|
|
$
|
5,310
|
|
|
$
|
2,590
|
|
|
$
|
74
|
|
|
$
|
2,573
|
|
|
$
|
1,214
|
|
|
$
|
2,850
|
|
|
$
|
65
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
(3
|
)
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||
|
Equity Securities:
|
|
FVO and Trading Securities:
|
|
|
|
Mortgage Loans:
|
||||||||||||||||||||||||
|
Common
Stock
|
|
Non-
redeemable
Preferred
Stock
|
|
Actively
Traded
Securities
|
|
FVO
General
Account
Securities
|
|
FVO
Contractholder-
directed
Unit-linked
Investments
|
|
Short-term
Investments
|
|
Residential
Mortgage
Loans -
FVO
|
|
Mortgage
Loans Held-
for-sale
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Three Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
282
|
|
|
$
|
432
|
|
|
$
|
13
|
|
|
$
|
26
|
|
|
$
|
1,096
|
|
|
$
|
717
|
|
|
$
|
—
|
|
|
$
|
211
|
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
32
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||||
Net investment gains (losses)
|
8
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net derivative gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
OCI
|
(2
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
||||||||
Purchases (3)
|
76
|
|
|
1
|
|
|
14
|
|
|
—
|
|
|
903
|
|
|
515
|
|
|
—
|
|
|
—
|
|
||||||||
Sales (3)
|
(102
|
)
|
|
(60
|
)
|
|
(11
|
)
|
|
(2
|
)
|
|
(909
|
)
|
|
(337
|
)
|
|
—
|
|
|
(145
|
)
|
||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||
Settlements (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||||||
Transfers into Level 3 (4)
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
186
|
|
|
—
|
|
|
30
|
|
||||||||
Transfers out of Level 3 (4)
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Balance, end of period
|
$
|
262
|
|
|
$
|
426
|
|
|
$
|
14
|
|
|
$
|
31
|
|
|
$
|
1,121
|
|
|
$
|
1,097
|
|
|
$
|
—
|
|
|
$
|
64
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(22
|
)
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||||||
|
Net Derivatives: (6)
|
|
|
||||||||||||||||||||||||||||||||
|
Interest
Rate
|
|
Foreign
Currency
Exchange
Rate
|
|
Credit
|
|
Equity
Market
|
|
Net
Embedded
Derivatives (7)
|
|
Separate
Account
Assets (8)
|
|
Long-term
Debt of
CSEs
|
|
MSRs (9)
|
|
Liability
Related to
Securitized
Reverse
Mortgage
Loans (9)
|
||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance, beginning of period
|
$
|
228
|
|
|
$
|
40
|
|
|
$
|
24
|
|
|
$
|
575
|
|
|
$
|
(3,961
|
)
|
|
$
|
1,445
|
|
|
$
|
(81
|
)
|
|
$
|
564
|
|
|
$
|
(98
|
)
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net investment gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|||||||||
Net derivative gains (losses)
|
(7
|
)
|
|
20
|
|
|
16
|
|
|
(187
|
)
|
|
291
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
OCI
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Purchases (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
144
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Sales (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
97
|
|
|||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|||||||||
Settlements (3)
|
12
|
|
|
(2
|
)
|
|
—
|
|
|
(82
|
)
|
|
(170
|
)
|
|
—
|
|
|
26
|
|
|
(41
|
)
|
|
1
|
|
|||||||||
Transfers into Level 3 (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Transfers out of Level 3 (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Balance, end of period
|
$
|
217
|
|
|
$
|
58
|
|
|
$
|
40
|
|
|
$
|
325
|
|
|
$
|
(3,922
|
)
|
|
$
|
1,407
|
|
|
$
|
(48
|
)
|
|
$
|
490
|
|
|
$
|
—
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net investment income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
(4
|
)
|
|
$
|
19
|
|
|
$
|
16
|
|
|
$
|
(195
|
)
|
|
$
|
283
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||
|
Fixed Maturity Securities:
|
||||||||||||||||||||||||||||||
|
U.S.
Corporate
|
|
Foreign
Corporate
|
|
Foreign
Government
|
|
U.S.
Treasury
and Agency
|
|
RMBS
|
|
CMBS
|
|
ABS
|
|
State and
Political
Subdivision
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
7,433
|
|
|
$
|
6,208
|
|
|
$
|
1,814
|
|
|
$
|
71
|
|
|
$
|
2,037
|
|
|
$
|
1,147
|
|
|
$
|
3,656
|
|
|
$
|
54
|
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
10
|
|
|
11
|
|
|
3
|
|
|
—
|
|
|
20
|
|
|
2
|
|
|
12
|
|
|
—
|
|
||||||||
Net investment gains (losses)
|
(27
|
)
|
|
(34
|
)
|
|
8
|
|
|
—
|
|
|
4
|
|
|
(2
|
)
|
|
5
|
|
|
—
|
|
||||||||
Net derivative gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
OCI
|
(38
|
)
|
|
(97
|
)
|
|
(104
|
)
|
|
(2
|
)
|
|
108
|
|
|
(28
|
)
|
|
(60
|
)
|
|
(1
|
)
|
||||||||
Purchases (3)
|
824
|
|
|
1,364
|
|
|
551
|
|
|
—
|
|
|
1,155
|
|
|
549
|
|
|
1,510
|
|
|
1
|
|
||||||||
Sales (3)
|
(907
|
)
|
|
(714
|
)
|
|
(105
|
)
|
|
(4
|
)
|
|
(242
|
)
|
|
(339
|
)
|
|
(651
|
)
|
|
(6
|
)
|
||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers into Level 3 (4)
|
324
|
|
|
254
|
|
|
91
|
|
|
—
|
|
|
12
|
|
|
113
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers out of Level 3 (4)
|
(1,733
|
)
|
|
(728
|
)
|
|
(195
|
)
|
|
—
|
|
|
(76
|
)
|
|
(266
|
)
|
|
(409
|
)
|
|
(32
|
)
|
||||||||
Balance, end of period
|
$
|
5,886
|
|
|
$
|
6,264
|
|
|
$
|
2,063
|
|
|
$
|
65
|
|
|
$
|
3,018
|
|
|
$
|
1,176
|
|
|
$
|
4,063
|
|
|
$
|
16
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
(34
|
)
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||
|
Equity Securities:
|
|
FVO and Trading Securities:
|
|
|
|
Mortgage Loans:
|
||||||||||||||||||||||||
|
Common
Stock
|
|
Non-
redeemable
Preferred
Stock
|
|
Actively
Traded
Securities
|
|
FVO
General
Account
Securities
|
|
FVO
Contractholder-
directed
Unit-linked
Investments
|
|
Short-term
Investments
|
|
Residential
Mortgage
Loans -
FVO
|
|
Mortgage
Loans Held-
for-sale
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
190
|
|
|
$
|
419
|
|
|
$
|
6
|
|
|
$
|
32
|
|
|
$
|
937
|
|
|
$
|
429
|
|
|
$
|
—
|
|
|
$
|
49
|
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(12
|
)
|
|
3
|
|
|
(2
|
)
|
|
—
|
|
||||||||
Net investment gains (losses)
|
2
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
||||||||
Net derivative gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
OCI
|
—
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
||||||||
Purchases (3)
|
11
|
|
|
55
|
|
|
8
|
|
|
—
|
|
|
348
|
|
|
189
|
|
|
214
|
|
|
—
|
|
||||||||
Sales (3)
|
(15
|
)
|
|
(118
|
)
|
|
—
|
|
|
(5
|
)
|
|
(430
|
)
|
|
(414
|
)
|
|
—
|
|
|
(45
|
)
|
||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||||
Transfers into Level 3 (4)
|
1
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers out of Level 3 (4)
|
(4
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(294
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||||||
Balance, end of period
|
$
|
185
|
|
|
$
|
405
|
|
|
$
|
11
|
|
|
$
|
47
|
|
|
$
|
606
|
|
|
$
|
192
|
|
|
$
|
212
|
|
|
$
|
—
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
(5
|
)
|
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
(1
|
)
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||
|
Net Derivatives: (6)
|
|
|
|
|
|
|
||||||||||||||||||||
|
Interest
Rate
|
|
Foreign
Currency
Exchange
Rate
|
|
Credit
|
|
Equity
Market
|
|
Net
Embedded
Derivatives (7)
|
|
Separate
Account
Assets (8)
|
|
Long-term
Debt of
CSEs
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Nine Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
$
|
177
|
|
|
$
|
37
|
|
|
$
|
43
|
|
|
$
|
128
|
|
|
$
|
(3,162
|
)
|
|
$
|
1,205
|
|
|
$
|
(44
|
)
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net investment gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
(1
|
)
|
|||||||
Net derivative gains (losses)
|
(23
|
)
|
|
(30
|
)
|
|
(12
|
)
|
|
(390
|
)
|
|
3,609
|
|
|
—
|
|
|
—
|
|
|||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
(110
|
)
|
|
—
|
|
|
—
|
|
|||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
OCI
|
(83
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
193
|
|
|
—
|
|
|
—
|
|
|||||||
Purchases (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
249
|
|
|
—
|
|
|||||||
Sales (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(223
|
)
|
|
—
|
|
|||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|||||||
Settlements (3)
|
(27
|
)
|
|
2
|
|
|
—
|
|
|
(7
|
)
|
|
(583
|
)
|
|
—
|
|
|
19
|
|
|||||||
Transfers into Level 3 (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|
—
|
|
|||||||
Transfers out of Level 3 (4)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
|||||||
Balance, end of period
|
$
|
45
|
|
|
$
|
9
|
|
|
$
|
31
|
|
|
$
|
(251
|
)
|
|
$
|
(53
|
)
|
|
$
|
1,417
|
|
|
$
|
(26
|
)
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net investment income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Net derivative gains (losses)
|
$
|
(14
|
)
|
|
$
|
(28
|
)
|
|
$
|
(11
|
)
|
|
$
|
(390
|
)
|
|
$
|
3,589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
(106
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||
|
Fixed Maturity Securities:
|
||||||||||||||||||||||||||||||
|
U.S.
Corporate
|
|
Foreign
Corporate
|
|
Foreign
Government
|
|
U.S.
Treasury
and Agency
|
|
RMBS
|
|
CMBS
|
|
ABS
|
|
State and
Political
Subdivision
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
6,784
|
|
|
$
|
4,370
|
|
|
$
|
2,322
|
|
|
$
|
31
|
|
|
$
|
1,602
|
|
|
$
|
753
|
|
|
$
|
1,850
|
|
|
$
|
53
|
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
10
|
|
|
16
|
|
|
4
|
|
|
—
|
|
|
20
|
|
|
7
|
|
|
14
|
|
|
—
|
|
||||||||
Net investment gains (losses)
|
4
|
|
|
(68
|
)
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|
(37
|
)
|
|
2
|
|
|
—
|
|
||||||||
Net derivative gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
OCI
|
351
|
|
|
233
|
|
|
26
|
|
|
—
|
|
|
149
|
|
|
21
|
|
|
19
|
|
|
4
|
|
||||||||
Purchases (3)
|
1,371
|
|
|
1,535
|
|
|
1,003
|
|
|
49
|
|
|
1,060
|
|
|
695
|
|
|
1,293
|
|
|
15
|
|
||||||||
Sales (3)
|
(865
|
)
|
|
(708
|
)
|
|
(467
|
)
|
|
(6
|
)
|
|
(315
|
)
|
|
(253
|
)
|
|
(286
|
)
|
|
(7
|
)
|
||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers into Level 3 (4)
|
266
|
|
|
254
|
|
|
53
|
|
|
—
|
|
|
76
|
|
|
40
|
|
|
6
|
|
|
—
|
|
||||||||
Transfers out of Level 3 (4)
|
(222
|
)
|
|
(322
|
)
|
|
(350
|
)
|
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|
(48
|
)
|
|
—
|
|
||||||||
Balance, end of period
|
$
|
7,699
|
|
|
$
|
5,310
|
|
|
$
|
2,590
|
|
|
$
|
74
|
|
|
$
|
2,573
|
|
|
$
|
1,214
|
|
|
$
|
2,850
|
|
|
$
|
65
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
$
|
8
|
|
|
$
|
18
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
2
|
|
|
$
|
14
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
(6
|
)
|
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||
|
Equity Securities:
|
|
FVO and Trading Securities:
|
|
|
|
Mortgage Loans:
|
||||||||||||||||||||||||
|
Common
Stock
|
|
Non-
redeemable
Preferred
Stock
|
|
Actively
Traded
Securities
|
|
FVO
General
Account
Securities
|
|
FVO
Contractholder-
directed
Unit-linked
Investments
|
|
Short-term
Investments
|
|
Residential
Mortgage
Loans -
FVO
|
|
Mortgage
Loans Held-
for-sale
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
281
|
|
|
$
|
438
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
1,386
|
|
|
$
|
590
|
|
|
$
|
—
|
|
|
$
|
1,414
|
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
12
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||||
Net investment gains (losses)
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net derivative gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
OCI
|
7
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||||||
Purchases (3)
|
111
|
|
|
5
|
|
|
14
|
|
|
—
|
|
|
918
|
|
|
1,059
|
|
|
—
|
|
|
1
|
|
||||||||
Sales (3)
|
(126
|
)
|
|
(89
|
)
|
|
—
|
|
|
(2
|
)
|
|
(1,159
|
)
|
|
(455
|
)
|
|
—
|
|
|
(1,348
|
)
|
||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||||
Settlements (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
||||||||
Transfers into Level 3 (4)
|
3
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
72
|
|
||||||||
Transfers out of Level 3 (4)
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
(108
|
)
|
|
—
|
|
|
(4
|
)
|
||||||||
Balance, end of period
|
$
|
262
|
|
|
$
|
426
|
|
|
$
|
14
|
|
|
$
|
31
|
|
|
$
|
1,121
|
|
|
$
|
1,097
|
|
|
$
|
—
|
|
|
$
|
64
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(25
|
)
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||||||||||
|
Net Derivatives: (6)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Interest
Rate
|
|
Foreign
Currency
Exchange
Rate
|
|
Credit
|
|
Equity
Market
|
|
Net
Embedded
Derivatives (7)
|
|
Separate
Account
Assets (8)
|
|
Long-term
Debt of
CSEs
|
|
MSRs (9)
|
|
Liability
Related to
Securitized
Reverse
Mortgage
Loans (9)
|
||||||||||||||||||
|
(In millions)
|
|
|
||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance, beginning of period
|
$
|
300
|
|
|
$
|
44
|
|
|
$
|
1
|
|
|
$
|
889
|
|
|
$
|
(4,203
|
)
|
|
$
|
1,325
|
|
|
$
|
(116
|
)
|
|
$
|
666
|
|
|
$
|
(1,175
|
)
|
Total realized/unrealized gains (losses)
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income (loss): (1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net investment gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||||||
Net derivative gains (losses)
|
16
|
|
|
30
|
|
|
44
|
|
|
(470
|
)
|
|
802
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other revenues
|
(67
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122
|
)
|
|
1
|
|
|||||||||
Policyholder benefits and claims
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
OCI
|
13
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Purchases (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Sales (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(289
|
)
|
|
—
|
|
|
—
|
|
|
1,149
|
|
|||||||||
Issuances (3)
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|||||||||
Settlements (3)
|
(45
|
)
|
|
(16
|
)
|
|
(3
|
)
|
|
(131
|
)
|
|
(473
|
)
|
|
(3
|
)
|
|
70
|
|
|
(163
|
)
|
|
23
|
|
|||||||||
Transfers into Level 3 (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Transfers out of Level 3 (4)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||||
Balance, end of period
|
$
|
217
|
|
|
$
|
58
|
|
|
$
|
40
|
|
|
$
|
325
|
|
|
$
|
(3,922
|
)
|
|
$
|
1,407
|
|
|
$
|
(48
|
)
|
|
$
|
490
|
|
|
$
|
—
|
|
Changes in unrealized gains (losses)
included in net income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net investment income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net investment gains (losses)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net derivative gains (losses)
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
43
|
|
|
$
|
(474
|
)
|
|
$
|
781
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(88
|
)
|
|
$
|
—
|
|
Policyholder benefits and claims
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Amortization of premium/accretion of discount is included within net investment income. Impairments charged to net income (loss) on securities and certain mortgage loans are included in net investment gains (losses) while changes in the estimated fair value of certain mortgage loans and MSRs are included in other revenues. Lapses associated with net embedded derivatives are included in net derivative gains (losses).
|
(2)
|
Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.
|
(3)
|
Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements.
|
(4)
|
Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the rollforward.
|
(5)
|
Changes in unrealized gains (losses) included in net income (loss) relate to assets and liabilities still held at the end of the respective periods.
|
(6)
|
Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
|
(7)
|
Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
|
(8)
|
Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income. For the purpose of this disclosure, these changes are presented within net investment gains (losses).
|
(9)
|
See Note 3 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report for a discussion of the MetLife Bank Divestiture. See Note 10 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report for discussion of the valuation techniques and key inputs. Other revenues related to MSRs represent the changes in estimated fair value due to changes in valuation model inputs or assumptions.
|
|
Residential Mortgage Loans — FVO (1)
|
|
Mortgage Loans Held-for-Sale (2)
|
|
Certain Assets and Liabilities of CSEs (3)
|
||||||||||||||||||
|
September 30, 2013
|
|
December 31, 2012
|
|
September 30, 2013
|
|
December 31, 2012
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unpaid principal balance
|
$
|
325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
2,020
|
|
|
$
|
2,539
|
|
Difference between estimated fair value and unpaid principal balance
|
(113
|
)
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
76
|
|
|
127
|
|
||||||
Carrying value at estimated fair value
|
$
|
212
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49
|
|
|
$
|
2,096
|
|
|
$
|
2,666
|
|
Loans in non-accrual status
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans more than 90 days past due
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans in non-accrual status or more than 90 days past due, or both — difference between aggregate estimated fair value and unpaid principal balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Contractual principal balance
|
|
|
|
|
|
|
|
|
$
|
1,918
|
|
|
$
|
2,430
|
|
||||||||
Difference between estimated fair value and contractual principal balance
|
|
|
|
|
|
|
|
|
28
|
|
|
97
|
|
||||||||||
Carrying value at estimated fair value
|
|
|
|
|
|
|
|
|
$
|
1,946
|
|
|
$
|
2,527
|
|
(1)
|
Interest income, changes in estimated fair value and gains or losses on sales are recognized in net investment income. Changes in estimated fair value for these loans were due to the following:
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Instrument-specific credit risk based on changes in credit spreads for non-agency loans and adjustments in individual loan quality
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other changes in estimated fair value
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Total gains (losses) recognized in net investment income
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
(2)
|
Interest income is included in net investment income. Gains and losses from initial measurement, subsequent changes in estimated fair value and gains or losses on sales are recognized in other revenues. Changes in estimated fair value for these loans were due to the following:
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Instrument-specific credit risk based on changes in credit spreads for non-agency loans and adjustments in individual loan quality
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Other changes in estimated fair value
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
71
|
|
||||
Total gains (losses) recognized in other revenues
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
—
|
|
|
$
|
71
|
|
(3)
|
These assets and liabilities are comprised of commercial mortgage loans and long-term debt. Changes in estimated fair value on these assets and liabilities and gains or losses on sales of these assets are recognized in net investment gains (losses). Interest income on commercial mortgage loans held by CSEs is recognized in net investment income. Interest expense from long-term debt of CSEs is recognized in other expenses.
|
|
At September 30,
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||
|
Carrying Value After
Measurement |
|
Gains (Losses)
|
||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Mortgage loans: (1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Held-for-investment
|
$
|
232
|
|
|
$
|
379
|
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
$
|
13
|
|
|
$
|
9
|
|
Held-for-sale
|
$
|
—
|
|
|
$
|
174
|
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
(39
|
)
|
Other limited partnership interests (2)
|
$
|
70
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
(39
|
)
|
|
$
|
(23
|
)
|
Real estate joint ventures (3)
|
$
|
3
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(5
|
)
|
Goodwill (4)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,868
|
)
|
|
$
|
—
|
|
|
$
|
(1,868
|
)
|
(1)
|
Estimated fair values for impaired mortgage loans are based on independent broker quotations or valuation models using unobservable inputs or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, are based on the estimated fair value of the underlying collateral or the present value of the expected future cash flows.
|
(2)
|
For these cost method investments, estimated fair value is determined from information provided in the financial statements of the underlying entities including NAV data. These investments include private equity and debt funds that typically invest primarily in various strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and below investment grade debt and mezzanine debt funds. Distributions will be generated from investment gains, from operating income from the underlying investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next
two
to
10 years
. Unfunded commitments for these investments at both
September 30, 2013
and
2012
were not significant.
|
(3)
|
For these cost method investments, estimated fair value is determined from information provided in the financial statements of the underlying entities including NAV data. These investments include several real estate funds that typically invest primarily in commercial real estate and mezzanine debt. Distributions will be generated from investment gains, from operating income from the underlying investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next
one
to
10 years
. Unfunded commitments for these investments at both
September 30, 2013
and
2012
were not significant.
|
(4)
|
As discussed in Note 11 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report, the Company recorded an impairment of goodwill associated with the Retail Annuities reporting unit. This impairment has been categorized as Level 3 due to the significant unobservable inputs used in the determination of the estimated fair value.
|
|
September 30, 2013
|
||||||||||||||||||
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
|
Carrying
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Estimated
Fair Value
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Held-for-investment
|
$
|
55,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57,639
|
|
|
$
|
57,639
|
|
Held-for-sale
|
225
|
|
|
—
|
|
|
—
|
|
|
225
|
|
|
225
|
|
|||||
Mortgage loans, net
|
$
|
55,425
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57,864
|
|
|
$
|
57,864
|
|
Policy loans
|
$
|
11,782
|
|
|
$
|
—
|
|
|
$
|
1,701
|
|
|
$
|
11,900
|
|
|
$
|
13,601
|
|
Real estate joint ventures
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
177
|
|
|
$
|
177
|
|
Other limited partnership interests
|
$
|
1,013
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,171
|
|
|
$
|
1,171
|
|
Other invested assets
|
$
|
855
|
|
|
$
|
234
|
|
|
$
|
276
|
|
|
$
|
345
|
|
|
$
|
855
|
|
Premiums, reinsurance and other receivables
|
$
|
4,470
|
|
|
$
|
—
|
|
|
$
|
2,080
|
|
|
$
|
2,466
|
|
|
$
|
4,546
|
|
Other assets
|
$
|
276
|
|
|
$
|
—
|
|
|
$
|
211
|
|
|
$
|
94
|
|
|
$
|
305
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
PABs
|
$
|
140,721
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
147,010
|
|
|
$
|
147,010
|
|
Bank deposits
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt
|
$
|
16,275
|
|
|
$
|
—
|
|
|
$
|
17,889
|
|
|
$
|
—
|
|
|
$
|
17,889
|
|
Collateral financing arrangements
|
$
|
4,196
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,947
|
|
|
$
|
3,947
|
|
Junior subordinated debt securities
|
$
|
3,193
|
|
|
$
|
—
|
|
|
$
|
3,738
|
|
|
$
|
—
|
|
|
$
|
3,738
|
|
Other liabilities
|
$
|
3,428
|
|
|
$
|
—
|
|
|
$
|
2,161
|
|
|
$
|
1,270
|
|
|
$
|
3,431
|
|
Separate account liabilities
|
$
|
62,984
|
|
|
$
|
—
|
|
|
$
|
62,984
|
|
|
$
|
—
|
|
|
$
|
62,984
|
|
Commitments: (1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loan commitments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
(14
|
)
|
Commitments to fund bank credit facilities, bridge loans and private corporate bond investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
December 31, 2012
|
||||||||||||||||||
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
|
Carrying
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Estimated
Fair Value
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Held-for-investment
|
$
|
53,926
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57,381
|
|
|
$
|
57,381
|
|
Held-for-sale
|
365
|
|
|
—
|
|
|
—
|
|
|
365
|
|
|
365
|
|
|||||
Mortgage loans, net
|
$
|
54,291
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57,746
|
|
|
$
|
57,746
|
|
Policy loans
|
$
|
11,884
|
|
|
$
|
—
|
|
|
$
|
1,690
|
|
|
$
|
12,567
|
|
|
$
|
14,257
|
|
Real estate joint ventures
|
$
|
113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
171
|
|
|
$
|
171
|
|
Other limited partnership interests
|
$
|
1,154
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,277
|
|
|
$
|
1,277
|
|
Other invested assets
|
$
|
815
|
|
|
$
|
305
|
|
|
$
|
144
|
|
|
$
|
366
|
|
|
$
|
815
|
|
Premiums, reinsurance and other receivables
|
$
|
3,287
|
|
|
$
|
—
|
|
|
$
|
745
|
|
|
$
|
2,960
|
|
|
$
|
3,705
|
|
Other assets
|
$
|
260
|
|
|
$
|
—
|
|
|
$
|
214
|
|
|
$
|
78
|
|
|
$
|
292
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
PABs
|
$
|
149,928
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158,040
|
|
|
$
|
158,040
|
|
Bank deposits
|
$
|
6,416
|
|
|
$
|
—
|
|
|
$
|
2,018
|
|
|
$
|
4,398
|
|
|
$
|
6,416
|
|
Long-term debt
|
$
|
16,502
|
|
|
$
|
—
|
|
|
$
|
18,978
|
|
|
$
|
—
|
|
|
$
|
18,978
|
|
Collateral financing arrangements
|
$
|
4,196
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,839
|
|
|
$
|
3,839
|
|
Junior subordinated debt securities
|
$
|
3,192
|
|
|
$
|
—
|
|
|
$
|
3,984
|
|
|
$
|
—
|
|
|
$
|
3,984
|
|
Other liabilities
|
$
|
1,913
|
|
|
$
|
—
|
|
|
$
|
673
|
|
|
$
|
1,243
|
|
|
$
|
1,916
|
|
Separate account liabilities
|
$
|
58,726
|
|
|
$
|
—
|
|
|
$
|
58,726
|
|
|
$
|
—
|
|
|
$
|
58,726
|
|
Commitments: (1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loan commitments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
12
|
|
Commitments to fund bank credit facilities, bridge loans and private corporate bond investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
22
|
|
(1)
|
Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities. See Note
15
for additional information on these off-balance sheet obligations.
|
|
Three Months
Ended September 30, 2013 |
||||||||||||||||||
|
Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)
|
|
Unrealized
Gains (Losses)
on Derivatives
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Balance, beginning of period
|
$
|
9,709
|
|
|
$
|
734
|
|
|
$
|
(1,825
|
)
|
|
$
|
(2,416
|
)
|
|
$
|
6,202
|
|
OCI before reclassifications
|
(1,060
|
)
|
|
(184
|
)
|
|
207
|
|
|
(1
|
)
|
|
(1,038
|
)
|
|||||
Amounts reclassified from AOCI
|
55
|
|
|
(154
|
)
|
|
—
|
|
|
35
|
|
|
(64
|
)
|
|||||
Balance, end of period
|
$
|
8,704
|
|
|
$
|
396
|
|
|
$
|
(1,618
|
)
|
|
$
|
(2,382
|
)
|
|
$
|
5,100
|
|
|
Nine Months
Ended September 30, 2013 |
||||||||||||||||||
|
Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)
|
|
Unrealized
Gains (Losses)
on Derivatives
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Balance, beginning of period
|
$
|
13,590
|
|
|
$
|
829
|
|
|
$
|
(533
|
)
|
|
$
|
(2,489
|
)
|
|
$
|
11,397
|
|
OCI before reclassifications
|
(4,635
|
)
|
|
(439
|
)
|
|
(1,085
|
)
|
|
1
|
|
|
(6,158
|
)
|
|||||
Amounts reclassified from AOCI
|
(251
|
)
|
|
6
|
|
|
—
|
|
|
106
|
|
|
(139
|
)
|
|||||
Balance, end of period
|
$
|
8,704
|
|
|
$
|
396
|
|
|
$
|
(1,618
|
)
|
|
$
|
(2,382
|
)
|
|
$
|
5,100
|
|
(1)
|
See Note
6
for information on offsets to investments related to insurance liabilities, DAC and VOBA and the policyholder dividend obligation.
|
AOCI Components
|
|
Amounts Reclassified from AOCI
|
|
Statement of Operations and
Comprehensive Income (Loss) Location
|
||||||
|
|
Three Months
Ended September 30, 2013 |
|
Nine Months
Ended September 30, 2013 |
|
|
||||
|
|
(In millions)
|
|
|
||||||
Net unrealized investment gains (losses):
|
|
|
|
|
|
|
||||
Net unrealized investment gains (losses)
|
|
$
|
(96
|
)
|
|
$
|
365
|
|
|
Other net investment gains (losses)
|
Net unrealized investment gains (losses)
|
|
22
|
|
|
65
|
|
|
Net investment income
|
||
OTTI
|
|
(21
|
)
|
|
(56
|
)
|
|
OTTI on fixed maturity securities
|
||
Net unrealized investment gains (losses), before income tax
|
|
(95
|
)
|
|
374
|
|
|
|
||
Income tax (expense) benefit
|
|
40
|
|
|
(123
|
)
|
|
|
||
Net unrealized investment gains (losses), net of income tax
|
|
$
|
(55
|
)
|
|
$
|
251
|
|
|
|
Unrealized gains (losses) on derivatives - cash flow hedges:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
$
|
3
|
|
|
$
|
17
|
|
|
Net derivative gains (losses)
|
Interest rate swaps
|
|
2
|
|
|
6
|
|
|
Net investment income
|
||
Interest rate forwards
|
|
2
|
|
|
8
|
|
|
Net derivative gains (losses)
|
||
Interest rate forwards
|
|
1
|
|
|
2
|
|
|
Net investment income
|
||
Interest rate forwards
|
|
(1
|
)
|
|
(2
|
)
|
|
Other expenses
|
||
Foreign currency swaps
|
|
216
|
|
|
(41
|
)
|
|
Net derivative gains (losses)
|
||
Foreign currency swaps
|
|
—
|
|
|
(2
|
)
|
|
Net investment income
|
||
Foreign currency swaps
|
|
1
|
|
|
1
|
|
|
Other expenses
|
||
Credit forwards
|
|
—
|
|
|
1
|
|
|
Net investment income
|
||
Gains (losses) on cash flow hedges, before income tax
|
|
224
|
|
|
(10
|
)
|
|
|
||
Income tax (expense) benefit
|
|
(70
|
)
|
|
4
|
|
|
|
||
Gains (losses) on cash flow hedges, net of income tax
|
|
$
|
154
|
|
|
$
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
||||
Defined benefit plans adjustment: (1)
|
|
|
|
|
|
|
||||
Amortization of net actuarial gains (losses)
|
|
$
|
(71
|
)
|
|
$
|
(212
|
)
|
|
|
Amortization of prior service (costs) credit
|
|
17
|
|
|
51
|
|
|
|
||
Amortization of defined benefit plan items, before
income tax
|
|
(54
|
)
|
|
(161
|
)
|
|
|
||
Income tax (expense) benefit
|
|
19
|
|
|
55
|
|
|
|
||
Amortization of defined benefit plan items, net of
income tax
|
|
$
|
(35
|
)
|
|
$
|
(106
|
)
|
|
|
Total reclassifications, net of income tax
|
|
$
|
64
|
|
|
$
|
139
|
|
|
|
(1)
|
These AOCI components are included in the computation of net periodic benefit costs. See Note
13
.
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Compensation
|
$
|
1,310
|
|
|
$
|
1,307
|
|
|
$
|
3,828
|
|
|
$
|
4,196
|
|
Pension, postretirement and postemployment benefit costs
|
122
|
|
|
117
|
|
|
367
|
|
|
345
|
|
||||
Commissions
|
1,309
|
|
|
1,442
|
|
|
4,084
|
|
|
4,466
|
|
||||
Volume-related costs
|
239
|
|
|
154
|
|
|
618
|
|
|
402
|
|
||||
Interest credited to bank deposits
|
—
|
|
|
19
|
|
|
2
|
|
|
60
|
|
||||
Capitalization of DAC
|
(1,153
|
)
|
|
(1,302
|
)
|
|
(3,621
|
)
|
|
(3,981
|
)
|
||||
Amortization of DAC and VOBA
|
841
|
|
|
1,008
|
|
|
2,623
|
|
|
3,201
|
|
||||
Amortization of negative VOBA
|
(126
|
)
|
|
(170
|
)
|
|
(410
|
)
|
|
(506
|
)
|
||||
Interest expense on debt and debt issuance costs
|
317
|
|
|
326
|
|
|
959
|
|
|
1,026
|
|
||||
Premium taxes, licenses and fees
|
173
|
|
|
176
|
|
|
498
|
|
|
519
|
|
||||
Professional services
|
349
|
|
|
432
|
|
|
976
|
|
|
1,210
|
|
||||
Rent, net of sublease income
|
89
|
|
|
107
|
|
|
283
|
|
|
339
|
|
||||
Other (1)
|
507
|
|
|
629
|
|
|
1,933
|
|
|
2,064
|
|
||||
Total other expenses
|
$
|
3,977
|
|
|
$
|
4,245
|
|
|
$
|
12,140
|
|
|
$
|
13,341
|
|
(1)
|
See Note
3
for information on the Japan income tax refund included in other expenses for the
nine months ended
September 30, 2013
.
|
|
Three Months
Ended September 30, |
||||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||||
|
Severance
|
|
Lease and Asset Impairment
|
|
Total
|
|
Severance
|
|
Lease and Asset Impairment
|
|
Total
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Balance, beginning of period
|
$
|
12
|
|
|
$
|
9
|
|
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
21
|
|
Restructuring charges
|
14
|
|
|
2
|
|
|
16
|
|
|
46
|
|
|
8
|
|
|
54
|
|
||||||
Cash payments
|
(13
|
)
|
|
(4
|
)
|
|
(17
|
)
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
||||||
Balance, end of period
|
$
|
13
|
|
|
$
|
7
|
|
|
$
|
20
|
|
|
$
|
27
|
|
|
$
|
8
|
|
|
$
|
35
|
|
|
Nine Months
Ended September 30, |
||||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||||
|
Severance
|
|
Lease and Asset Impairment
|
|
Total
|
|
Severance
|
|
Lease and Asset Impairment
|
|
Total
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Balance, beginning of period
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring charges
|
51
|
|
|
14
|
|
|
65
|
|
|
93
|
|
|
8
|
|
|
101
|
|
||||||
Cash payments
|
(61
|
)
|
|
(7
|
)
|
|
(68
|
)
|
|
(66
|
)
|
|
—
|
|
|
(66
|
)
|
||||||
Balance, end of period
|
$
|
13
|
|
|
$
|
7
|
|
|
$
|
20
|
|
|
$
|
27
|
|
|
$
|
8
|
|
|
$
|
35
|
|
Total restructuring charges incurred since inception of initiative
|
$
|
192
|
|
|
$
|
32
|
|
|
$
|
224
|
|
|
$
|
93
|
|
|
$
|
8
|
|
|
$
|
101
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||||||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||||||||||||||
|
Three Months
Ended September 30, |
|
Three Months
Ended September 30, |
|
Three Months
Ended September 30, |
|
Three Months
Ended September 30, |
||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Service costs
|
$
|
59
|
|
|
$
|
56
|
|
|
$
|
16
|
|
|
$
|
19
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest costs
|
98
|
|
|
102
|
|
|
4
|
|
|
4
|
|
|
23
|
|
|
26
|
|
|
1
|
|
|
1
|
|
||||||||
Expected return on plan assets
|
(121
|
)
|
|
(121
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|
(19
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||||||
Amortization of net actuarial (gains) losses
|
57
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
15
|
|
|
—
|
|
|
1
|
|
||||||||
Amortization of prior service costs (credit)
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
||||||||
Net periodic benefit costs
|
$
|
95
|
|
|
$
|
87
|
|
|
$
|
18
|
|
|
$
|
22
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||||||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||||||||||||||
|
Nine Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Service costs
|
$
|
177
|
|
|
$
|
168
|
|
|
$
|
50
|
|
|
$
|
55
|
|
|
$
|
15
|
|
|
$
|
16
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest costs
|
292
|
|
|
305
|
|
|
11
|
|
|
13
|
|
|
69
|
|
|
77
|
|
|
2
|
|
|
2
|
|
||||||||
Expected return on plan assets
|
(363
|
)
|
|
(363
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
(56
|
)
|
|
(57
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||||||
Amortization of net actuarial (gains) losses
|
171
|
|
|
146
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
43
|
|
|
—
|
|
|
1
|
|
||||||||
Amortization of prior service costs (credit)
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
||||||||
Net periodic benefit costs
|
$
|
282
|
|
|
$
|
261
|
|
|
$
|
56
|
|
|
$
|
63
|
|
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions, except share and per share data)
|
||||||||||||||
Weighted Average Shares:
|
|
|
|
|
|
|
|
||||||||
Weighted average common stock outstanding for basic
earnings per common share
|
1,104,892,638
|
|
|
1,065,041,874
|
|
|
1,099,496,305
|
|
|
1,063,991,836
|
|
||||
Incremental common shares from assumed:
|
|
|
|
|
|
|
|
||||||||
Stock purchase contracts underlying common equity units (1)
|
1,886,275
|
|
|
—
|
|
|
628,758
|
|
|
—
|
|
||||
Exercise or issuance of stock-based awards (2)
|
10,517,925
|
|
|
—
|
|
|
8,756,239
|
|
|
5,963,399
|
|
||||
Weighted average common stock outstanding for diluted
earnings per common share
|
1,117,296,838
|
|
|
1,065,041,874
|
|
|
1,108,881,302
|
|
|
1,069,955,235
|
|
||||
Income (Loss) from Continuing Operations:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of income tax
|
$
|
973
|
|
|
$
|
(957
|
)
|
|
$
|
2,476
|
|
|
$
|
1,209
|
|
Less: Income (loss) from continuing operations, net of income tax, attributable to noncontrolling interests
|
3
|
|
|
(3
|
)
|
|
17
|
|
|
29
|
|
||||
Less: Preferred stock dividends
|
30
|
|
|
30
|
|
|
91
|
|
|
91
|
|
||||
Income (loss) from continuing operations, net of income tax,
available to MetLife, Inc.’s common shareholders
|
$
|
940
|
|
|
$
|
(984
|
)
|
|
$
|
2,368
|
|
|
$
|
1,089
|
|
Basic
|
$
|
0.85
|
|
|
$
|
(0.92
|
)
|
|
$
|
2.15
|
|
|
$
|
1.02
|
|
Diluted
|
$
|
0.84
|
|
|
$
|
(0.92
|
)
|
|
$
|
2.14
|
|
|
$
|
1.01
|
|
Income (Loss) from Discontinued Operations:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations, net of income tax
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
17
|
|
Less: Income (loss) from discontinued operations, net of income tax, attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income (loss) from discontinued operations, net of income tax,
available to MetLife, Inc.’s common shareholders
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
17
|
|
Basic
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Net Income (Loss):
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
975
|
|
|
$
|
(957
|
)
|
|
$
|
2,477
|
|
|
$
|
1,226
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
3
|
|
|
(3
|
)
|
|
17
|
|
|
29
|
|
||||
Less: Preferred stock dividends
|
30
|
|
|
30
|
|
|
91
|
|
|
91
|
|
||||
Net income (loss) available to MetLife, Inc.’s common shareholders
|
$
|
942
|
|
|
$
|
(984
|
)
|
|
$
|
2,369
|
|
|
$
|
1,106
|
|
Basic
|
$
|
0.85
|
|
|
$
|
(0.92
|
)
|
|
$
|
2.15
|
|
|
$
|
1.04
|
|
Diluted
|
$
|
0.84
|
|
|
$
|
(0.92
|
)
|
|
$
|
2.14
|
|
|
$
|
1.03
|
|
(1)
|
See Note 15 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report for a description of the Company’s common equity units. For the
three months and nine months ended
September 30, 2012
, all shares related to the assumed issuance of shares in settlement of the applicable purchase contracts have been excluded from the calculation of diluted earnings per common share, as these assumed shares are anti-dilutive.
|
(2)
|
For the three months ended September 30, 2012,
5,928,114
shares related to the assumed exercise or issuance of stock-based awards have been excluded from the calculation of diluted earnings per common share, as these assumed shares would be anti-dilutive.
|
|
Page
Number
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$
|
973
|
|
|
$
|
(957
|
)
|
|
$
|
2,476
|
|
|
$
|
1,209
|
|
Less: Net investment gains (losses)
|
(85
|
)
|
|
22
|
|
|
339
|
|
|
(152
|
)
|
||||
Less: Net derivative gains (losses)
|
(546
|
)
|
|
(718
|
)
|
|
(2,866
|
)
|
|
(604
|
)
|
||||
Less: Goodwill impairment
|
—
|
|
|
(1,868
|
)
|
|
—
|
|
|
(1,868
|
)
|
||||
Less: Other adjustments to continuing operations (1)
|
(472
|
)
|
|
(472
|
)
|
|
(1,326
|
)
|
|
(1,619
|
)
|
||||
Less: Provision for income tax (expense) benefit
|
546
|
|
|
632
|
|
|
1,510
|
|
|
1,048
|
|
||||
Operating earnings
|
1,530
|
|
|
1,447
|
|
|
4,819
|
|
|
4,404
|
|
||||
Less: Preferred stock dividends
|
30
|
|
|
30
|
|
|
91
|
|
|
91
|
|
||||
Operating earnings available to common shareholders
|
$
|
1,500
|
|
|
$
|
1,417
|
|
|
$
|
4,728
|
|
|
$
|
4,313
|
|
(1)
|
See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components of such adjustments.
|
•
|
Growth in premiums, fees and other revenues driven by:
|
-
|
Rational pricing strategy in the group insurance marketplace;
|
-
|
Increased fee revenue reflecting the benefit of higher equity markets on our separate account balances; and
|
-
|
Increases in our businesses outside of the U.S., notably accident & health, from continuing organic growth throughout our various geographic regions and leveraging of our multichannel distribution network.
|
•
|
Expanding our presence in emerging markets, including potential merger and acquisition activity. We expect that by 2016, more than 20% of our operating earnings will come from emerging markets, with the acquisition of Provida contributing to this increase.
|
•
|
Focus on disciplined underwriting. We see no significant changes to the underlying trends that drive underwriting results; however, unanticipated catastrophes could result in a high volume of claims.
|
•
|
Focus on expense management in the light of the low interest rate environment, and continued focus on expense control throughout the Company.
|
•
|
Continued disciplined approach to investing and asset/liability management (“ALM”), including significant hedging to protect against low interest rates and the purchasing of derivatives to protect against higher interest rates.
|
(i)
|
liabilities for future policyholder benefits and the accounting for reinsurance;
|
(ii)
|
capitalization and amortization of DAC and the establishment and amortization of VOBA;
|
(iii)
|
estimated fair values of investments in the absence of quoted market values;
|
(iv)
|
investment impairments;
|
(v)
|
estimated fair values of freestanding derivatives and the recognition and estimated fair value of embedded derivatives requiring bifurcation;
|
(vi)
|
measurement of goodwill and related impairment;
|
(vii)
|
measurement of employee benefit plan liabilities;
|
(viii)
|
measurement of income taxes and the valuation of deferred tax assets; and
|
(ix)
|
liabilities for litigation and regulatory matters.
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
9,094
|
|
|
$
|
9,096
|
|
|
$
|
27,403
|
|
|
$
|
27,386
|
|
Universal life and investment-type product policy fees
|
2,372
|
|
|
2,131
|
|
|
7,034
|
|
|
6,306
|
|
||||
Net investment income
|
5,026
|
|
|
5,517
|
|
|
16,385
|
|
|
16,436
|
|
||||
Other revenues
|
476
|
|
|
455
|
|
|
1,446
|
|
|
1,445
|
|
||||
Net investment gains (losses)
|
(85
|
)
|
|
22
|
|
|
339
|
|
|
(152
|
)
|
||||
Net derivative gains (losses)
|
(546
|
)
|
|
(718
|
)
|
|
(2,866
|
)
|
|
(604
|
)
|
||||
Total revenues
|
16,337
|
|
|
16,503
|
|
|
49,741
|
|
|
50,817
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
9,784
|
|
|
9,298
|
|
|
28,781
|
|
|
28,008
|
|
||||
Interest credited to policyholder account balances
|
1,600
|
|
|
2,102
|
|
|
6,036
|
|
|
5,681
|
|
||||
Goodwill impairment
|
—
|
|
|
1,868
|
|
|
—
|
|
|
1,868
|
|
||||
Capitalization of DAC
|
(1,153
|
)
|
|
(1,302
|
)
|
|
(3,621
|
)
|
|
(3,981
|
)
|
||||
Amortization of DAC and VOBA
|
841
|
|
|
1,008
|
|
|
2,623
|
|
|
3,201
|
|
||||
Amortization of negative VOBA
|
(126
|
)
|
|
(170
|
)
|
|
(410
|
)
|
|
(506
|
)
|
||||
Interest expense on debt
|
317
|
|
|
326
|
|
|
959
|
|
|
1,026
|
|
||||
Other expenses
|
4,098
|
|
|
4,383
|
|
|
12,589
|
|
|
13,601
|
|
||||
Total expenses
|
15,361
|
|
|
17,513
|
|
|
46,957
|
|
|
48,898
|
|
||||
Income (loss) from continuing operations before provision for income tax
|
976
|
|
|
(1,010
|
)
|
|
2,784
|
|
|
1,919
|
|
||||
Provision for income tax expense (benefit)
|
3
|
|
|
(53
|
)
|
|
308
|
|
|
710
|
|
||||
Income (loss) from continuing operations, net of income tax
|
973
|
|
|
(957
|
)
|
|
2,476
|
|
|
1,209
|
|
||||
Income (loss) from discontinued operations, net of income tax
|
2
|
|
|
—
|
|
|
1
|
|
|
17
|
|
||||
Net income (loss)
|
975
|
|
|
(957
|
)
|
|
2,477
|
|
|
1,226
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
3
|
|
|
(3
|
)
|
|
17
|
|
|
29
|
|
||||
Net income (loss) attributable to MetLife, Inc.
|
972
|
|
|
(954
|
)
|
|
2,460
|
|
|
1,197
|
|
||||
Less: Preferred stock dividends
|
30
|
|
|
30
|
|
|
91
|
|
|
91
|
|
||||
Net income (loss) available to MetLife, Inc.’s common shareholders
|
$
|
942
|
|
|
$
|
(984
|
)
|
|
$
|
2,369
|
|
|
$
|
1,106
|
|
|
Three Months
Ended September 30, |
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Non-VA program derivatives
|
|
|
|
||||
Interest rate
|
$
|
(286
|
)
|
|
$
|
(135
|
)
|
Foreign currency exchange rate
|
(176
|
)
|
|
(174
|
)
|
||
Credit
|
65
|
|
|
2
|
|
||
Equity
|
(54
|
)
|
|
1
|
|
||
Non-VA embedded derivatives
|
6
|
|
|
(31
|
)
|
||
Total non-VA program derivatives
|
(445
|
)
|
|
(337
|
)
|
||
VA program derivatives
|
|
|
|
||||
Market risks in embedded derivatives
|
1,247
|
|
|
1,036
|
|
||
Nonperformance risk on embedded derivatives
|
(145
|
)
|
|
(534
|
)
|
||
Other risks in embedded derivatives
|
(210
|
)
|
|
(244
|
)
|
||
Total embedded derivatives
|
892
|
|
|
258
|
|
||
Freestanding derivatives hedging embedded derivatives
|
(993
|
)
|
|
(639
|
)
|
||
Total VA program derivatives
|
(101
|
)
|
|
(381
|
)
|
||
Net derivative gains (losses)
|
$
|
(546
|
)
|
|
$
|
(718
|
)
|
•
|
Periodic updates to actuarial assumptions, such as changes in policyholder behavior and mortality, which resulted in an unfavorable period over period change in the valuation of the embedded derivatives. Beginning this year, the timing of the annual global review of assumptions was changed from the fourth quarter to the third quarter.
|
•
|
The mismatch of fund performance between actual and modeled funds, which resulted in an unfavorable period over period change in the valuation of the embedded derivatives.
|
•
|
A decrease in the risk margin adjustment caused by lower policyholder behavior risks, which resulted in a favorable period over period change in the valuation of the embedded derivatives.
|
•
|
Refinements in the valuation model to better reflect product features, which resulted in a favorable period over period change in the valuation of the embedded derivatives.
|
•
|
A combination of other factors, such as in-force changes, the cross effect of capital markets changes, and the basis mismatch between assets and liabilities, which resulted in a favorable period over period change in the valuation of the embedded derivatives.
|
•
|
Long-term U.S. interest rates increased more significantly in the current period than in the prior period and long-term Japanese interest rates decreased more significantly in the current period than in the prior period, contributing to a favorable change in our freestanding derivatives and an unfavorable change in our embedded derivatives.
|
•
|
Key equity index levels increased more significantly in the current period than in the prior period, contributing to an unfavorable change in our freestanding derivatives and a favorable change in our embedded derivatives.
|
•
|
Changes in foreign currency exchange rates contributed to an unfavorable change in our freestanding derivatives and a favorable change in our embedded derivatives.
|
•
|
Changes to policyholder behavior and mortality assumptions resulted in reserve increases, offset by favorable DAC, for a net loss of $154 million ($103 million, net of income tax).
|
•
|
Changes in economic assumptions resulted in a decrease in reserves, offset by unfavorable DAC, for a net benefit of $53 million ($34 million, net of income tax).
|
|
Nine Months
Ended September 30, |
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Non-VA program derivatives
|
|
|
|
||||
Interest rate
|
$
|
(1,452
|
)
|
|
$
|
453
|
|
Foreign currency exchange rate
|
(988
|
)
|
|
(161
|
)
|
||
Credit
|
124
|
|
|
(105
|
)
|
||
Equity
|
(37
|
)
|
|
1
|
|
||
Non-VA embedded derivatives
|
108
|
|
|
(79
|
)
|
||
Total non-VA program derivatives
|
(2,245
|
)
|
|
109
|
|
||
VA program derivatives
|
|
|
|
||||
Market risks in embedded derivatives
|
4,433
|
|
|
2,430
|
|
||
Nonperformance risk on embedded derivatives
|
(795
|
)
|
|
(1,170
|
)
|
||
Other risks in embedded derivatives
|
(85
|
)
|
|
(508
|
)
|
||
Total embedded derivatives
|
3,553
|
|
|
752
|
|
||
Freestanding derivatives hedging embedded derivatives
|
(4,174
|
)
|
|
(1,465
|
)
|
||
Total VA program derivatives
|
(621
|
)
|
|
(713
|
)
|
||
Net derivative gains (losses)
|
$
|
(2,866
|
)
|
|
$
|
(604
|
)
|
•
|
Refinements in the attribution analysis and valuation model to better reflect product features, which resulted in favorable period over period change in the valuation of the embedded derivatives.
|
•
|
The mismatch of fund performance between actual and modeled funds and periodic updates to the mapping of policyholder funds into groups of representative indices, which resulted in an unfavorable period over period change in the valuation of the embedded derivatives.
|
•
|
A decrease in the risk margin adjustment caused by lower policyholder behavior risks, which resulted in a favorable period over period change in the valuation of the embedded derivatives.
|
•
|
Periodic updates to actuarial assumptions, such as changes in policyholder behavior and mortality, which resulted in an unfavorable period over period change in the valuation of the embedded derivatives. Beginning this year, the timing of the annual global review of assumptions was changed from the fourth quarter to the third quarter.
|
•
|
Modeling refinement in the economic scenario generator and periodic updates of future capital market assumptions to better reflect the future capital markets environment, which resulted in an unfavorable period over period change in the valuation of the embedded derivatives.
|
•
|
A combination of other factors, such as in-force changes, the cross effect of capital markets changes, and the basis mismatch between assets and liabilities, which resulted in a favorable period over period change in the valuation of the embedded derivatives.
|
•
|
Long-term interest rates increased in the current period and decreased in the prior period, contributing to an unfavorable change in our freestanding derivatives and a favorable change in our embedded derivatives.
|
•
|
Key equity index levels increased more in the current period than in the prior period, contributing to an unfavorable change in our freestanding derivatives and a favorable change in our embedded derivatives.
|
•
|
Key equity volatility measures decreased less in the current period than in the prior period, contributing to a favorable change in our freestanding derivatives and an unfavorable change in our embedded derivatives.
|
•
|
Changes in foreign currency exchange rates contributed to an unfavorable change in our freestanding derivatives and a favorable change in our embedded derivatives.
|
•
|
Changes to policyholder behavior and mortality assumptions resulted in reserve increases, offset by favorable DAC, for a net loss of $154 million ($103 million, net of income tax).
|
•
|
Changes in economic assumptions resulted in a decrease in reserves, offset by unfavorable DAC, for a net benefit of $53 million ($34 million, net of income tax).
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$
|
313
|
|
|
$
|
84
|
|
|
$
|
190
|
|
|
$
|
116
|
|
|
$
|
536
|
|
|
$
|
117
|
|
|
$
|
(383
|
)
|
|
$
|
973
|
|
Less: Net investment gains (losses)
|
(28
|
)
|
|
(3
|
)
|
|
(15
|
)
|
|
(5
|
)
|
|
52
|
|
|
10
|
|
|
(96
|
)
|
|
(85
|
)
|
||||||||
Less: Net derivative gains (losses)
|
(202
|
)
|
|
(173
|
)
|
|
(140
|
)
|
|
3
|
|
|
164
|
|
|
30
|
|
|
(228
|
)
|
|
(546
|
)
|
||||||||
Less: Other adjustments to continuing operations (1)
|
(302
|
)
|
|
(44
|
)
|
|
(14
|
)
|
|
(18
|
)
|
|
(31
|
)
|
|
9
|
|
|
(72
|
)
|
|
(472
|
)
|
||||||||
Less: Provision for income tax (expense) benefit
|
186
|
|
|
78
|
|
|
59
|
|
|
3
|
|
|
94
|
|
|
(17
|
)
|
|
143
|
|
|
546
|
|
||||||||
Operating earnings
|
$
|
659
|
|
|
$
|
226
|
|
|
$
|
300
|
|
|
$
|
133
|
|
|
$
|
257
|
|
|
$
|
85
|
|
|
(130
|
)
|
|
1,530
|
|
||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
30
|
|
||||||||||||||
Operating earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(160
|
)
|
|
$
|
1,500
|
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$
|
(986
|
)
|
|
$
|
212
|
|
|
$
|
159
|
|
|
$
|
201
|
|
|
$
|
193
|
|
|
$
|
104
|
|
|
$
|
(840
|
)
|
|
$
|
(957
|
)
|
Less: Net investment gains (losses)
|
53
|
|
|
5
|
|
|
(25
|
)
|
|
(2
|
)
|
|
(47
|
)
|
|
73
|
|
|
(35
|
)
|
|
22
|
|
||||||||
Less: Net derivative gains (losses)
|
191
|
|
|
(81
|
)
|
|
(194
|
)
|
|
19
|
|
|
(31
|
)
|
|
13
|
|
|
(635
|
)
|
|
(718
|
)
|
||||||||
Less: Goodwill impairment
|
(1,692
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(176
|
)
|
|
(1,868
|
)
|
||||||||
Less: Other adjustments to continuing operations (1)
|
(254
|
)
|
|
(33
|
)
|
|
(3
|
)
|
|
44
|
|
|
(15
|
)
|
|
(12
|
)
|
|
(199
|
)
|
|
(472
|
)
|
||||||||
Less: Provision for income tax (expense) benefit
|
224
|
|
|
38
|
|
|
78
|
|
|
(12
|
)
|
|
27
|
|
|
(32
|
)
|
|
309
|
|
|
632
|
|
||||||||
Operating earnings
|
$
|
492
|
|
|
$
|
283
|
|
|
$
|
303
|
|
|
$
|
152
|
|
|
$
|
259
|
|
|
$
|
62
|
|
|
(104
|
)
|
|
1,447
|
|
||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
30
|
|
||||||||||||||
Operating earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(134
|
)
|
|
$
|
1,417
|
|
(1)
|
See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components of such adjustments.
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$
|
1,015
|
|
|
$
|
241
|
|
|
$
|
822
|
|
|
$
|
450
|
|
|
$
|
425
|
|
|
$
|
269
|
|
|
$
|
(746
|
)
|
|
$
|
2,476
|
|
Less: Net investment gains (losses)
|
68
|
|
|
(14
|
)
|
|
4
|
|
|
4
|
|
|
265
|
|
|
49
|
|
|
(37
|
)
|
|
339
|
|
||||||||
Less: Net derivative gains (losses)
|
(779
|
)
|
|
(612
|
)
|
|
(244
|
)
|
|
(16
|
)
|
|
(874
|
)
|
|
20
|
|
|
(361
|
)
|
|
(2,866
|
)
|
||||||||
Less: Other adjustments to continuing operations (1)
|
(598
|
)
|
|
(129
|
)
|
|
45
|
|
|
88
|
|
|
(417
|
)
|
|
(4
|
)
|
|
(311
|
)
|
|
(1,326
|
)
|
||||||||
Less: Provision for income tax (expense) benefit
|
458
|
|
|
265
|
|
|
68
|
|
|
(27
|
)
|
|
531
|
|
|
(36
|
)
|
|
251
|
|
|
1,510
|
|
||||||||
Operating earnings
|
$
|
1,866
|
|
|
$
|
731
|
|
|
$
|
949
|
|
|
$
|
401
|
|
|
$
|
920
|
|
|
$
|
240
|
|
|
(288
|
)
|
|
4,819
|
|
||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
91
|
|
|
91
|
|
||||||||||||||
Operating earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(379
|
)
|
|
$
|
4,728
|
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$
|
23
|
|
|
$
|
795
|
|
|
$
|
843
|
|
|
$
|
348
|
|
|
$
|
708
|
|
|
$
|
265
|
|
|
$
|
(1,773
|
)
|
|
$
|
1,209
|
|
Less: Net investment gains (losses)
|
178
|
|
|
11
|
|
|
21
|
|
|
(12
|
)
|
|
(168
|
)
|
|
37
|
|
|
(219
|
)
|
|
(152
|
)
|
||||||||
Less: Net derivative gains (losses)
|
637
|
|
|
99
|
|
|
(149
|
)
|
|
42
|
|
|
(11
|
)
|
|
56
|
|
|
(1,278
|
)
|
|
(604
|
)
|
||||||||
Less: Goodwill impairment
|
(1,692
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(176
|
)
|
|
(1,868
|
)
|
||||||||
Less: Other adjustments to continuing operations (1)
|
(622
|
)
|
|
(107
|
)
|
|
11
|
|
|
(153
|
)
|
|
(11
|
)
|
|
(22
|
)
|
|
(715
|
)
|
|
(1,619
|
)
|
||||||||
Less: Provision for income tax (expense) benefit
|
153
|
|
|
(1
|
)
|
|
41
|
|
|
36
|
|
|
59
|
|
|
(18
|
)
|
|
778
|
|
|
1,048
|
|
||||||||
Operating earnings
|
$
|
1,369
|
|
|
$
|
793
|
|
|
$
|
919
|
|
|
$
|
435
|
|
|
$
|
839
|
|
|
$
|
212
|
|
|
(163
|
)
|
|
4,404
|
|
||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
91
|
|
|
91
|
|
||||||||||||||
Operating earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(254
|
)
|
|
$
|
4,313
|
|
(1)
|
See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components of such adjustments.
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Total revenues
|
$
|
4,803
|
|
|
$
|
4,280
|
|
|
$
|
1,876
|
|
|
$
|
1,310
|
|
|
$
|
3,220
|
|
|
$
|
1,022
|
|
|
$
|
(174
|
)
|
|
$
|
16,337
|
|
Less: Net investment gains (losses)
|
(28
|
)
|
|
(3
|
)
|
|
(15
|
)
|
|
(5
|
)
|
|
52
|
|
|
10
|
|
|
(96
|
)
|
|
(85
|
)
|
||||||||
Less: Net derivative gains (losses)
|
(202
|
)
|
|
(173
|
)
|
|
(140
|
)
|
|
3
|
|
|
164
|
|
|
30
|
|
|
(228
|
)
|
|
(546
|
)
|
||||||||
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||||
Less: Other adjustments to revenues (1)
|
(23
|
)
|
|
(44
|
)
|
|
(5
|
)
|
|
44
|
|
|
(75
|
)
|
|
151
|
|
|
23
|
|
|
71
|
|
||||||||
Total operating revenues
|
$
|
5,059
|
|
|
$
|
4,500
|
|
|
$
|
2,036
|
|
|
$
|
1,268
|
|
|
$
|
3,078
|
|
|
$
|
831
|
|
|
$
|
127
|
|
|
$
|
16,899
|
|
Total expenses
|
$
|
4,333
|
|
|
$
|
4,160
|
|
|
$
|
1,584
|
|
|
$
|
1,159
|
|
|
$
|
2,689
|
|
|
$
|
845
|
|
|
$
|
591
|
|
|
$
|
15,361
|
|
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
||||||||
Less: Other adjustments to expenses (1)
|
328
|
|
|
—
|
|
|
9
|
|
|
62
|
|
|
(42
|
)
|
|
142
|
|
|
95
|
|
|
594
|
|
||||||||
Total operating expenses
|
$
|
4,057
|
|
|
$
|
4,160
|
|
|
$
|
1,575
|
|
|
$
|
1,097
|
|
|
$
|
2,732
|
|
|
$
|
703
|
|
|
$
|
496
|
|
|
$
|
14,820
|
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Total revenues
|
$
|
5,109
|
|
|
$
|
4,360
|
|
|
$
|
1,785
|
|
|
$
|
1,180
|
|
|
$
|
3,275
|
|
|
$
|
1,210
|
|
|
$
|
(416
|
)
|
|
$
|
16,503
|
|
Less: Net investment gains (losses)
|
53
|
|
|
5
|
|
|
(25
|
)
|
|
(2
|
)
|
|
(47
|
)
|
|
73
|
|
|
(35
|
)
|
|
22
|
|
||||||||
Less: Net derivative gains (losses)
|
191
|
|
|
(81
|
)
|
|
(194
|
)
|
|
19
|
|
|
(31
|
)
|
|
13
|
|
|
(635
|
)
|
|
(718
|
)
|
||||||||
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
1
|
|
|
—
|
|
|
(4
|
)
|
||||||||
Less: Other adjustments to revenues (1)
|
(19
|
)
|
|
(33
|
)
|
|
16
|
|
|
62
|
|
|
142
|
|
|
348
|
|
|
76
|
|
|
592
|
|
||||||||
Total operating revenues
|
$
|
4,887
|
|
|
$
|
4,469
|
|
|
$
|
1,988
|
|
|
$
|
1,101
|
|
|
$
|
3,213
|
|
|
$
|
775
|
|
|
$
|
178
|
|
|
$
|
16,611
|
|
Total expenses
|
$
|
6,066
|
|
|
$
|
4,041
|
|
|
$
|
1,541
|
|
|
$
|
931
|
|
|
$
|
2,973
|
|
|
$
|
1,036
|
|
|
$
|
925
|
|
|
$
|
17,513
|
|
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
14
|
|
||||||||
Less: Goodwill impairment
|
1,692
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|
1,868
|
|
||||||||
Less: Other adjustments to expenses (1)
|
222
|
|
|
—
|
|
|
19
|
|
|
18
|
|
|
153
|
|
|
359
|
|
|
275
|
|
|
1,046
|
|
||||||||
Total operating expenses
|
$
|
4,142
|
|
|
$
|
4,041
|
|
|
$
|
1,522
|
|
|
$
|
913
|
|
|
$
|
2,818
|
|
|
$
|
675
|
|
|
$
|
474
|
|
|
$
|
14,585
|
|
(1)
|
See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components of such adjustments.
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Total revenues
|
$
|
14,226
|
|
|
$
|
12,904
|
|
|
$
|
5,933
|
|
|
$
|
3,725
|
|
|
$
|
9,832
|
|
|
$
|
2,938
|
|
|
$
|
183
|
|
|
$
|
49,741
|
|
Less: Net investment gains (losses)
|
68
|
|
|
(14
|
)
|
|
4
|
|
|
4
|
|
|
265
|
|
|
49
|
|
|
(37
|
)
|
|
339
|
|
||||||||
Less: Net derivative gains (losses)
|
(779
|
)
|
|
(612
|
)
|
|
(244
|
)
|
|
(16
|
)
|
|
(874
|
)
|
|
20
|
|
|
(361
|
)
|
|
(2,866
|
)
|
||||||||
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||||||
Less: Other adjustments to revenues (1)
|
(94
|
)
|
|
(129
|
)
|
|
19
|
|
|
57
|
|
|
999
|
|
|
412
|
|
|
88
|
|
|
1,352
|
|
||||||||
Total operating revenues
|
$
|
15,040
|
|
|
$
|
13,659
|
|
|
$
|
6,154
|
|
|
$
|
3,680
|
|
|
$
|
9,438
|
|
|
$
|
2,452
|
|
|
$
|
493
|
|
|
$
|
50,916
|
|
Total expenses
|
$
|
12,698
|
|
|
$
|
12,558
|
|
|
$
|
4,667
|
|
|
$
|
3,133
|
|
|
$
|
9,526
|
|
|
$
|
2,560
|
|
|
$
|
1,815
|
|
|
$
|
46,957
|
|
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(228
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
5
|
|
|
—
|
|
|
(235
|
)
|
||||||||
Less: Other adjustments to expenses (1)
|
723
|
|
|
—
|
|
|
(26
|
)
|
|
(31
|
)
|
|
1,432
|
|
|
416
|
|
|
399
|
|
|
2,913
|
|
||||||||
Total operating expenses
|
$
|
12,203
|
|
|
$
|
12,558
|
|
|
$
|
4,693
|
|
|
$
|
3,164
|
|
|
$
|
8,106
|
|
|
$
|
2,139
|
|
|
$
|
1,416
|
|
|
$
|
44,279
|
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Total revenues
|
$
|
15,315
|
|
|
$
|
13,166
|
|
|
$
|
6,014
|
|
|
$
|
3,642
|
|
|
$
|
9,605
|
|
|
$
|
3,287
|
|
|
$
|
(212
|
)
|
|
$
|
50,817
|
|
Less: Net investment gains (losses)
|
178
|
|
|
11
|
|
|
21
|
|
|
(12
|
)
|
|
(168
|
)
|
|
37
|
|
|
(219
|
)
|
|
(152
|
)
|
||||||||
Less: Net derivative gains (losses)
|
637
|
|
|
99
|
|
|
(149
|
)
|
|
42
|
|
|
(11
|
)
|
|
56
|
|
|
(1,278
|
)
|
|
(604
|
)
|
||||||||
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
14
|
|
|
—
|
|
|
10
|
|
||||||||
Less: Other adjustments to revenues (1)
|
(51
|
)
|
|
(107
|
)
|
|
55
|
|
|
191
|
|
|
304
|
|
|
628
|
|
|
551
|
|
|
1,571
|
|
||||||||
Total operating revenues
|
$
|
14,551
|
|
|
$
|
13,163
|
|
|
$
|
6,087
|
|
|
$
|
3,421
|
|
|
$
|
9,484
|
|
|
$
|
2,552
|
|
|
$
|
734
|
|
|
$
|
49,992
|
|
Total expenses
|
$
|
14,742
|
|
|
$
|
11,969
|
|
|
$
|
4,717
|
|
|
$
|
3,208
|
|
|
$
|
8,519
|
|
|
$
|
2,888
|
|
|
$
|
2,855
|
|
|
$
|
48,898
|
|
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
79
|
|
||||||||
Less: Goodwill impairment
|
1,692
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|
1,868
|
|
||||||||
Less: Other adjustments to expenses (1)
|
510
|
|
|
—
|
|
|
44
|
|
|
344
|
|
|
311
|
|
|
646
|
|
|
1,266
|
|
|
3,121
|
|
||||||||
Total operating expenses
|
$
|
12,479
|
|
|
$
|
11,969
|
|
|
$
|
4,673
|
|
|
$
|
2,864
|
|
|
$
|
8,208
|
|
|
$
|
2,224
|
|
|
$
|
1,413
|
|
|
$
|
43,830
|
|
(1)
|
See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components of such adjustments.
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
9,094
|
|
|
$
|
9,080
|
|
|
$
|
27,402
|
|
|
$
|
27,326
|
|
Universal life and investment-type product policy fees
|
2,276
|
|
|
2,048
|
|
|
6,768
|
|
|
6,056
|
|
||||
Net investment income
|
5,043
|
|
|
5,048
|
|
|
15,279
|
|
|
15,297
|
|
||||
Other revenues
|
486
|
|
|
435
|
|
|
1,467
|
|
|
1,313
|
|
||||
Total operating revenues
|
16,899
|
|
|
16,611
|
|
|
50,916
|
|
|
49,992
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
9,316
|
|
|
8,995
|
|
|
27,626
|
|
|
27,066
|
|
||||
Interest credited to policyholder account balances
|
1,472
|
|
|
1,589
|
|
|
4,547
|
|
|
4,653
|
|
||||
Capitalization of DAC
|
(1,153
|
)
|
|
(1,301
|
)
|
|
(3,621
|
)
|
|
(3,976
|
)
|
||||
Amortization of DAC and VOBA
|
979
|
|
|
1,051
|
|
|
3,100
|
|
|
3,231
|
|
||||
Amortization of negative VOBA
|
(113
|
)
|
|
(155
|
)
|
|
(368
|
)
|
|
(456
|
)
|
||||
Interest expense on debt
|
288
|
|
|
286
|
|
|
863
|
|
|
898
|
|
||||
Other expenses
|
4,031
|
|
|
4,120
|
|
|
12,132
|
|
|
12,414
|
|
||||
Total operating expenses
|
14,820
|
|
|
14,585
|
|
|
44,279
|
|
|
43,830
|
|
||||
Provision for income tax expense (benefit)
|
549
|
|
|
579
|
|
|
1,818
|
|
|
1,758
|
|
||||
Operating earnings
|
1,530
|
|
|
1,447
|
|
|
4,819
|
|
|
4,404
|
|
||||
Less: Preferred stock dividends
|
30
|
|
|
30
|
|
|
91
|
|
|
91
|
|
||||
Operating earnings available to common shareholders
|
$
|
1,500
|
|
|
$
|
1,417
|
|
|
$
|
4,728
|
|
|
$
|
4,313
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
1,607
|
|
|
$
|
1,604
|
|
|
$
|
4,735
|
|
|
$
|
4,804
|
|
Universal life and investment-type product policy fees
|
1,257
|
|
|
1,132
|
|
|
3,662
|
|
|
3,365
|
|
||||
Net investment income
|
1,928
|
|
|
1,930
|
|
|
5,876
|
|
|
5,735
|
|
||||
Other revenues
|
267
|
|
|
221
|
|
|
767
|
|
|
647
|
|
||||
Total operating revenues
|
5,059
|
|
|
4,887
|
|
|
15,040
|
|
|
14,551
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
2,234
|
|
|
2,228
|
|
|
6,659
|
|
|
6,668
|
|
||||
Interest credited to policyholder account balances
|
582
|
|
|
598
|
|
|
1,750
|
|
|
1,784
|
|
||||
Capitalization of DAC
|
(318
|
)
|
|
(430
|
)
|
|
(1,036
|
)
|
|
(1,352
|
)
|
||||
Amortization of DAC and VOBA
|
315
|
|
|
438
|
|
|
1,042
|
|
|
1,319
|
|
||||
Interest expense on debt
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other expenses
|
1,245
|
|
|
1,308
|
|
|
3,788
|
|
|
4,060
|
|
||||
Total operating expenses
|
4,057
|
|
|
4,142
|
|
|
12,203
|
|
|
12,479
|
|
||||
Provision for income tax expense (benefit)
|
343
|
|
|
253
|
|
|
971
|
|
|
703
|
|
||||
Operating earnings
|
$
|
659
|
|
|
$
|
492
|
|
|
$
|
1,866
|
|
|
$
|
1,369
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
3,767
|
|
|
$
|
3,753
|
|
|
$
|
11,438
|
|
|
$
|
11,021
|
|
Universal life and investment-type product policy fees
|
171
|
|
|
166
|
|
|
521
|
|
|
497
|
|
||||
Net investment income
|
459
|
|
|
450
|
|
|
1,384
|
|
|
1,325
|
|
||||
Other revenues
|
103
|
|
|
100
|
|
|
316
|
|
|
320
|
|
||||
Total operating revenues
|
4,500
|
|
|
4,469
|
|
|
13,659
|
|
|
13,163
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
3,527
|
|
|
3,449
|
|
|
10,681
|
|
|
10,153
|
|
||||
Interest credited to policyholder account balances
|
38
|
|
|
42
|
|
|
116
|
|
|
127
|
|
||||
Capitalization of DAC
|
(37
|
)
|
|
(38
|
)
|
|
(105
|
)
|
|
(102
|
)
|
||||
Amortization of DAC and VOBA
|
37
|
|
|
40
|
|
|
104
|
|
|
98
|
|
||||
Interest expense on debt
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Other expenses
|
595
|
|
|
547
|
|
|
1,761
|
|
|
1,692
|
|
||||
Total operating expenses
|
4,160
|
|
|
4,041
|
|
|
12,558
|
|
|
11,969
|
|
||||
Provision for income tax expense (benefit)
|
114
|
|
|
145
|
|
|
370
|
|
|
401
|
|
||||
Operating earnings
|
$
|
226
|
|
|
$
|
283
|
|
|
$
|
731
|
|
|
$
|
793
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
490
|
|
|
$
|
450
|
|
|
$
|
1,457
|
|
|
$
|
1,480
|
|
Universal life and investment-type product policy fees
|
54
|
|
|
53
|
|
|
187
|
|
|
161
|
|
||||
Net investment income
|
1,424
|
|
|
1,421
|
|
|
4,302
|
|
|
4,253
|
|
||||
Other revenues
|
68
|
|
|
64
|
|
|
208
|
|
|
193
|
|
||||
Total operating revenues
|
2,036
|
|
|
1,988
|
|
|
6,154
|
|
|
6,087
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
1,144
|
|
|
1,070
|
|
|
3,352
|
|
|
3,293
|
|
||||
Interest credited to policyholder account balances
|
292
|
|
|
339
|
|
|
940
|
|
|
1,016
|
|
||||
Capitalization of DAC
|
(2
|
)
|
|
(13
|
)
|
|
(25
|
)
|
|
(28
|
)
|
||||
Amortization of DAC and VOBA
|
4
|
|
|
4
|
|
|
21
|
|
|
18
|
|
||||
Interest expense on debt
|
3
|
|
|
2
|
|
|
7
|
|
|
6
|
|
||||
Other expenses
|
134
|
|
|
120
|
|
|
398
|
|
|
368
|
|
||||
Total operating expenses
|
1,575
|
|
|
1,522
|
|
|
4,693
|
|
|
4,673
|
|
||||
Provision for income tax expense (benefit)
|
161
|
|
|
163
|
|
|
512
|
|
|
495
|
|
||||
Operating earnings
|
$
|
300
|
|
|
$
|
303
|
|
|
$
|
949
|
|
|
$
|
919
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
692
|
|
|
$
|
610
|
|
|
$
|
2,077
|
|
|
$
|
1,948
|
|
Universal life and investment-type product policy fees
|
222
|
|
|
189
|
|
|
682
|
|
|
581
|
|
||||
Net investment income
|
354
|
|
|
299
|
|
|
912
|
|
|
881
|
|
||||
Other revenues
|
—
|
|
|
3
|
|
|
9
|
|
|
11
|
|
||||
Total operating revenues
|
1,268
|
|
|
1,101
|
|
|
3,680
|
|
|
3,421
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
637
|
|
|
507
|
|
|
1,792
|
|
|
1,667
|
|
||||
Interest credited to policyholder account balances
|
106
|
|
|
99
|
|
|
313
|
|
|
289
|
|
||||
Capitalization of DAC
|
(103
|
)
|
|
(83
|
)
|
|
(316
|
)
|
|
(238
|
)
|
||||
Amortization of DAC and VOBA
|
63
|
|
|
42
|
|
|
220
|
|
|
151
|
|
||||
Amortization of negative VOBA
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||
Interest expense on debt
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Other expenses
|
395
|
|
|
353
|
|
|
1,157
|
|
|
1,002
|
|
||||
Total operating expenses
|
1,097
|
|
|
913
|
|
|
3,164
|
|
|
2,864
|
|
||||
Provision for income tax expense (benefit)
|
38
|
|
|
36
|
|
|
115
|
|
|
122
|
|
||||
Operating earnings
|
$
|
133
|
|
|
$
|
152
|
|
|
$
|
401
|
|
|
$
|
435
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
1,922
|
|
|
$
|
2,112
|
|
|
$
|
5,900
|
|
|
$
|
6,215
|
|
Universal life and investment-type product policy fees
|
438
|
|
|
388
|
|
|
1,324
|
|
|
1,102
|
|
||||
Net investment income
|
696
|
|
|
709
|
|
|
2,151
|
|
|
2,150
|
|
||||
Other revenues
|
22
|
|
|
4
|
|
|
63
|
|
|
17
|
|
||||
Total operating revenues
|
3,078
|
|
|
3,213
|
|
|
9,438
|
|
|
9,484
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
1,506
|
|
|
1,455
|
|
|
4,354
|
|
|
4,250
|
|
||||
Interest credited to policyholder account balances
|
407
|
|
|
468
|
|
|
1,286
|
|
|
1,323
|
|
||||
Capitalization of DAC
|
(515
|
)
|
|
(579
|
)
|
|
(1,583
|
)
|
|
(1,721
|
)
|
||||
Amortization of DAC and VOBA
|
393
|
|
|
396
|
|
|
1,186
|
|
|
1,188
|
|
||||
Amortization of negative VOBA
|
(99
|
)
|
|
(128
|
)
|
|
(325
|
)
|
|
(387
|
)
|
||||
Interest expense on debt
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Other expenses
|
1,040
|
|
|
1,206
|
|
|
3,188
|
|
|
3,550
|
|
||||
Total operating expenses
|
2,732
|
|
|
2,818
|
|
|
8,106
|
|
|
8,208
|
|
||||
Provision for income tax expense (benefit)
|
89
|
|
|
136
|
|
|
412
|
|
|
437
|
|
||||
Operating earnings
|
$
|
257
|
|
|
$
|
259
|
|
|
$
|
920
|
|
|
$
|
839
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
586
|
|
|
$
|
536
|
|
|
$
|
1,711
|
|
|
$
|
1,815
|
|
Universal life and investment-type product policy fees
|
100
|
|
|
82
|
|
|
287
|
|
|
233
|
|
||||
Net investment income
|
124
|
|
|
122
|
|
|
372
|
|
|
406
|
|
||||
Other revenues
|
21
|
|
|
35
|
|
|
82
|
|
|
98
|
|
||||
Total operating revenues
|
831
|
|
|
775
|
|
|
2,452
|
|
|
2,552
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
243
|
|
|
255
|
|
|
736
|
|
|
941
|
|
||||
Interest credited to policyholder account balances
|
37
|
|
|
32
|
|
|
109
|
|
|
91
|
|
||||
Capitalization of DAC
|
(173
|
)
|
|
(158
|
)
|
|
(542
|
)
|
|
(535
|
)
|
||||
Amortization of DAC and VOBA
|
166
|
|
|
130
|
|
|
526
|
|
|
456
|
|
||||
Amortization of negative VOBA
|
(13
|
)
|
|
(26
|
)
|
|
(41
|
)
|
|
(65
|
)
|
||||
Interest expense on debt
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
||||
Other expenses
|
443
|
|
|
440
|
|
|
1,351
|
|
|
1,333
|
|
||||
Total operating expenses
|
703
|
|
|
675
|
|
|
2,139
|
|
|
2,224
|
|
||||
Provision for income tax expense (benefit)
|
43
|
|
|
38
|
|
|
73
|
|
|
116
|
|
||||
Operating earnings
|
$
|
85
|
|
|
$
|
62
|
|
|
$
|
240
|
|
|
$
|
212
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
30
|
|
|
$
|
15
|
|
|
$
|
84
|
|
|
$
|
43
|
|
Universal life and investment-type product policy fees
|
34
|
|
|
38
|
|
|
105
|
|
|
117
|
|
||||
Net investment income
|
58
|
|
|
117
|
|
|
282
|
|
|
547
|
|
||||
Other revenues
|
5
|
|
|
8
|
|
|
22
|
|
|
27
|
|
||||
Total operating revenues
|
127
|
|
|
178
|
|
|
493
|
|
|
734
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
25
|
|
|
31
|
|
|
52
|
|
|
94
|
|
||||
Interest credited to policyholder account balances
|
10
|
|
|
11
|
|
|
33
|
|
|
23
|
|
||||
Capitalization of DAC
|
(5
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||
Amortization of DAC and VOBA
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Interest expense on debt
|
286
|
|
|
285
|
|
|
855
|
|
|
886
|
|
||||
Other expenses
|
179
|
|
|
146
|
|
|
489
|
|
|
409
|
|
||||
Total operating expenses
|
496
|
|
|
474
|
|
|
1,416
|
|
|
1,413
|
|
||||
Provision for income tax expense (benefit)
|
(239
|
)
|
|
(192
|
)
|
|
(635
|
)
|
|
(516
|
)
|
||||
Operating earnings
|
(130
|
)
|
|
(104
|
)
|
|
(288
|
)
|
|
(163
|
)
|
||||
Less: Preferred stock dividends
|
30
|
|
|
30
|
|
|
91
|
|
|
91
|
|
||||
Operating earnings available to common shareholders
|
$
|
(160
|
)
|
|
$
|
(134
|
)
|
|
$
|
(379
|
)
|
|
$
|
(254
|
)
|
•
|
credit risk, relating to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and interest;
|
•
|
interest rate risk, relating to the market price and cash flow variability associated with changes in market interest rates. Changes in market interest rates can result from governmental monetary policies, domestic and international economic and political conditions, and other factors beyond our control, and will impact the net unrealized gain or loss position of our fixed income investment portfolio and the rates of return we receive on both new funds invested and reinvestment of existing funds;
|
•
|
liquidity risk, relating to the diminished ability to sell certain investments, in times of strained market conditions;
|
•
|
market valuation risk, relating to the variability in the estimated fair value of investments associated with changes in market factors such as credit spreads. A widening of credit spreads will adversely impact the net unrealized gain (loss) position of the fixed income investment portfolio, will increase losses associated with credit-based non-qualifying derivatives where we assume credit exposure, and, if credit spreads widen significantly or for an extended period of time, will likely result in higher other-than-temporary impairments (“OTTI”). Credit spread tightening will reduce net investment income associated with purchases of fixed maturity securities and will favorably impact the net unrealized gain (loss) position of the fixed income investment portfolio;
|
•
|
currency risk, relating to the variability in currency exchange rates for foreign denominated investments. This risk relates to potential decreases in estimated fair value and income resulting from a strengthening or weakening in currency exchange rates versus the U.S. dollar. In general, the weakening of foreign currencies versus the U.S. dollar will adversely affect the estimated fair value of our foreign denominated investments; and
|
•
|
real estate risk, relating to commercial, agricultural and residential real estate, and stemming from factors, which include, but are not limited to, market conditions including the demand and supply of leasable commercial space, creditworthiness of tenants and partners, capital markets volatility and the inherent interest rate movement.
|
|
Summary of Select European Country Investment Exposure at September 30, 2013
|
||||||||||||||||||||||||||||||||||||
|
Fixed Maturity Securities (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Sovereign
|
|
Financial
Services
|
|
Non-Financial Services
|
|
Total
|
|
All Other
General
Account
Investment
Exposure (2)
|
|
Total
Exposure
(3)
|
|
%
|
|
Purchased
Credit Default
Protection (4)
|
|
Net
Exposure
|
|
%
|
||||||||||||||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||||||||||||||||||||||||||
Europe’s perimeter region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Portugal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55
|
|
|
$
|
55
|
|
|
$
|
11
|
|
|
$
|
66
|
|
|
2
|
%
|
|
$
|
—
|
|
|
$
|
66
|
|
|
2
|
%
|
Italy
|
3
|
|
|
87
|
|
|
589
|
|
|
679
|
|
|
89
|
|
|
768
|
|
|
27
|
|
|
(1
|
)
|
|
767
|
|
|
27
|
|
||||||||
Ireland
|
—
|
|
|
—
|
|
|
154
|
|
|
154
|
|
|
1,069
|
|
|
1,223
|
|
|
42
|
|
|
—
|
|
|
1,223
|
|
|
42
|
|
||||||||
Greece
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
117
|
|
|
120
|
|
|
4
|
|
|
—
|
|
|
120
|
|
|
4
|
|
||||||||
Spain
|
—
|
|
|
97
|
|
|
487
|
|
|
584
|
|
|
47
|
|
|
631
|
|
|
22
|
|
|
—
|
|
|
631
|
|
|
22
|
|
||||||||
Total Europe’s perimeter region
|
6
|
|
|
184
|
|
|
1,285
|
|
|
1,475
|
|
|
1,333
|
|
|
2,808
|
|
|
97
|
|
|
(1
|
)
|
|
2,807
|
|
|
97
|
|
||||||||
Cyprus
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
4
|
|
|
75
|
|
|
3
|
|
|
—
|
|
|
75
|
|
|
3
|
|
||||||||
Total
|
$
|
77
|
|
|
$
|
184
|
|
|
$
|
1,285
|
|
|
$
|
1,546
|
|
|
$
|
1,337
|
|
|
$
|
2,883
|
|
|
100
|
%
|
|
$
|
(1
|
)
|
|
$
|
2,882
|
|
|
100
|
%
|
As percent of total cash and invested assets
|
0.0
|
%
|
|
0.0
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
0.6
|
%
|
|
|
|
0.0
|
%
|
|
0.6
|
%
|
|
|
||||||||||
Investment grade percent
|
4
|
%
|
|
93
|
%
|
|
91
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Non-investment grade percent
|
96
|
%
|
|
7
|
%
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Both the par value and amortized cost of the fixed maturity securities were $1.5 billion at
September 30, 2013
.
|
(2)
|
Comprised of equity securities, mortgage loans, other limited partnership interests, cash, cash equivalents and short-term investments, and other invested assets at carrying value. See Note 1 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report for an explanation of the carrying value for these invested asset classes. Excludes FVO contractholder-directed unit-linked investments of $928 million, which support unit-linked variable annuity type liabilities and do not qualify for separate account summary total assets and liabilities. The contractholder, and not the Company, directs the investment of these funds. The related variable annuity type liability is satisfied from the contractholder’s account balance and not from our general account investments.
|
(3)
|
For Greece, the Company had $1 million of commitments to fund partnership investments at
September 30, 2013
.
|
(4)
|
Purchased credit default protection is stated at the estimated fair value of the swap. For Italy, the purchased credit default protection relates to financial services corporate securities and these swaps had a notional amount of $80 million and an estimated fair value of $1 million at
September 30, 2013
. The counterparties to these swaps are financial institutions with Standard & Poor’s Ratings Services (“S&P”) credit ratings of A as of
September 30, 2013
.
|
|
At or For the Three Months Ended September 30,
|
|
At or For the Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
Yield % (1)
|
|
Amount
|
|
Yield % (1)
|
|
Amount
|
|
Yield % (1)
|
|
Amount
|
|
Yield % (1)
|
|
Amount
|
||||||||||||
|
|
|
(In millions)
|
|
|
|
(In millions)
|
|
|
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||
Fixed maturity securities (2)(3)
|
4.92
|
|
%
|
$
|
3,792
|
|
|
4.85
|
|
%
|
$
|
3,833
|
|
|
4.82
|
|
%
|
$
|
11,312
|
|
|
4.86
|
|
%
|
$
|
11,393
|
|
Mortgage loans (3)
|
5.34
|
|
%
|
725
|
|
|
5.81
|
|
%
|
810
|
|
|
5.42
|
|
%
|
2,179
|
|
|
5.62
|
|
%
|
2,404
|
|
||||
Real estate and real estate joint ventures
|
3.09
|
|
%
|
77
|
|
|
2.95
|
|
%
|
64
|
|
|
3.25
|
|
%
|
243
|
|
|
5.14
|
|
%
|
329
|
|
||||
Policy loans
|
5.38
|
|
%
|
158
|
|
|
5.25
|
|
%
|
157
|
|
|
5.26
|
|
%
|
465
|
|
|
5.27
|
|
%
|
471
|
|
||||
Equity securities
|
3.87
|
|
%
|
28
|
|
|
3.65
|
|
%
|
26
|
|
|
4.14
|
|
%
|
88
|
|
|
4.36
|
|
%
|
96
|
|
||||
Other limited partnerships
|
7.95
|
|
%
|
144
|
|
|
8.66
|
|
%
|
145
|
|
|
12.50
|
|
%
|
665
|
|
|
12.00
|
|
%
|
593
|
|
||||
Cash and short-term investments
|
0.97
|
|
%
|
39
|
|
|
0.66
|
|
%
|
34
|
|
|
0.98
|
|
%
|
126
|
|
|
0.67
|
|
%
|
100
|
|
||||
Other invested assets
|
|
|
217
|
|
|
|
|
140
|
|
|
|
|
618
|
|
|
|
|
469
|
|
||||||||
Total before investment fees and expenses
|
4.98
|
|
%
|
5,180
|
|
|
4.88
|
|
%
|
5,209
|
|
|
4.97
|
|
%
|
15,696
|
|
|
4.98
|
|
%
|
15,855
|
|
||||
Investment fees and expenses
|
(0.13
|
)
|
|
(137
|
)
|
|
(0.13
|
)
|
|
(140
|
)
|
|
(0.13
|
)
|
|
(411
|
)
|
|
(0.13
|
)
|
|
(419
|
)
|
||||
Net investment income including Divested Businesses (4)
|
4.85
|
|
%
|
5,043
|
|
|
4.75
|
|
%
|
5,069
|
|
|
4.84
|
|
%
|
15,285
|
|
|
4.85
|
%
|
%
|
15,436
|
|
||||
Less: net investment income from Divested Businesses (4)
|
|
|
—
|
|
|
|
|
21
|
|
|
|
|
6
|
|
|
|
|
139
|
|
||||||||
Net investment income (5)
|
|
|
$
|
5,043
|
|
|
|
|
$
|
5,048
|
|
|
|
|
$
|
15,279
|
|
|
|
|
$
|
15,297
|
|
(1)
|
Yields are calculated as investment income as a percent of average quarterly asset carrying values. Investment income excludes recognized gains and losses and reflects GAAP adjustments presented in footnote (5) below. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, freestanding derivative assets, collateral received from derivative counterparties, the effects of consolidating under GAAP certain variable interest entities (“VIEs”) that are treated as consolidated securitization entities (“CSEs”), contractholder-directed unit-linked investments and securitized reverse residential mortgage loans. A yield is not presented for other invested assets, as it is not considered a meaningful measure of performance for this asset class.
|
(2)
|
Investment income includes amounts for FVO and trading securities of $14 million and $24 million for the
three months and nine months ended
September 30, 2013
, respectively, and $24 million and $68 million for the
three months and nine months ended
September 30, 2012
, respectively.
|
(3)
|
Investment income from fixed maturity securities and mortgage loans includes prepayment fees.
|
(4)
|
Yield calculations include the net investment income and ending carrying values of the Divested Businesses. The net investment income adjustment for the Divested Businesses for the three months and
nine months ended
September 30, 2012
of $21 million and $139 million excludes $4 million and $177 million of securitized reverse residential mortgage loans that were included in the Divested Businesses adjustment of $25 million and $316 million presented below, respectively. For further information on Divested Businesses and the related sale of the securitized reverse residential mortgage loans in 2012, see Note 3 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report.
|
(5)
|
Net investment income presented in the yield table varies from the most directly comparable measure presented in the GAAP consolidated statements of operations due to certain reclassifications and excludes the effects of consolidating under GAAP certain VIEs that are treated as CSEs and contractholder-directed unit-linked investments. Such reclassifications are presented in the table below.
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(In millions)
|
||||||||||||||
Net investment income — in the above yield table
|
$
|
5,043
|
|
|
$
|
5,048
|
|
|
$
|
15,279
|
|
|
$
|
15,297
|
|
Real estate discontinued operations
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
|
(2
|
)
|
||||
Scheduled periodic settlement payments on derivatives not qualifying for hedge accounting
|
(175
|
)
|
|
(108
|
)
|
|
(473
|
)
|
|
(310
|
)
|
||||
Equity method operating joint ventures
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Contractholder-directed unit-linked investments
|
132
|
|
|
512
|
|
|
1,485
|
|
|
1,010
|
|
||||
Divested Businesses
|
—
|
|
|
25
|
|
|
6
|
|
|
316
|
|
||||
Incremental net investment income from CSEs
|
29
|
|
|
40
|
|
|
96
|
|
|
125
|
|
||||
Net investment income — GAAP consolidated statements of operations
|
$
|
5,026
|
|
|
$
|
5,517
|
|
|
$
|
16,385
|
|
|
$
|
16,436
|
|
|
September 30, 2013
|
|
|||||||||||
|
Fixed Maturity
Securities
|
|
|
Equity
Securities
|
|
||||||||
|
(In millions)
|
|
|
|
|
(In millions)
|
|
|
|
||||
Level 1:
|
|
|
|
|
|
|
|
|
|
||||
Quoted prices in active markets for identical assets
|
$
|
24,117
|
|
|
6.9
|
%
|
|
$
|
1,102
|
|
|
34.0
|
%
|
Level 2:
|
|
|
|
|
|
|
|
|
|
||||
Independent pricing source
|
265,014
|
|
|
76.0
|
|
|
654
|
|
|
20.2
|
|
||
Internal matrix pricing or discounted cash flow techniques
|
37,105
|
|
|
10.6
|
|
|
895
|
|
|
27.6
|
|
||
Significant other observable inputs
|
302,119
|
|
|
86.6
|
|
|
1,549
|
|
|
47.8
|
|
||
Level 3:
|
|
|
|
|
|
|
|
|
|
||||
Independent pricing source
|
8,888
|
|
|
2.6
|
|
|
433
|
|
|
13.3
|
|
||
Internal matrix pricing or discounted cash flow techniques
|
12,108
|
|
|
3.5
|
|
|
142
|
|
|
4.4
|
|
||
Independent broker quotations
|
1,555
|
|
|
0.4
|
|
|
15
|
|
|
0.5
|
|
||
Significant unobservable inputs
|
22,551
|
|
|
6.5
|
|
|
590
|
|
|
18.2
|
|
||
Total estimated fair value
|
$
|
348,787
|
|
|
100.0
|
%
|
|
$
|
3,241
|
|
|
100.0
|
%
|
•
|
The majority of the Level 3 fixed maturity and equity securities AFS, or 83%, were concentrated in four sectors: U.S. and foreign corporate securities, asset-backed securities (“ABS”), and residential mortgage-backed securities (“RMBS”).
|
•
|
Level 3 fixed maturity securities are priced principally through market standard valuation methodologies, independent pricing services and, to a much lesser extent, independent non-binding broker quotations using inputs that are not market observable or cannot be derived principally from or corroborated by observable market data. Level 3 fixed maturity securities consist of less liquid securities with very limited trading activity or where less price transparency exists around the inputs to the valuation methodologies. Level 3 fixed maturity securities include: sub-prime RMBS; certain below investment grade private securities and less liquid investment grade corporate securities (included in U.S. and foreign corporate securities); and less liquid ABS and foreign government securities.
|
•
|
During the
three months ended
September 30, 2013
, Level 3 fixed maturity securities increased by $988 million, or 5%. The increase was driven by purchases in excess of sales, partially offset by net transfers out of Level 3. The purchases in excess of sales of fixed maturity securities were concentrated in RMBS, foreign corporate securities, ABS, commercial mortgage-backed securities (“CMBS”) and foreign government securities. The net transfers out of Level 3 were concentrated in foreign corporate securities, RMBS and CMBS.
|
•
|
During the
nine months ended
September 30, 2013
, Level 3 fixed maturity securities increased by $131 million, or 1%. The increase was driven by purchases in excess of sales, partially offset by net transfers out of Level 3 and a decrease in estimated fair value recognized in other comprehensive income (loss) (“OCI”). The purchases in excess of sales of fixed maturity securities were concentrated in RMBS, ABS, foreign corporate securities, foreign government securities and CMBS. The net transfers out of Level 3 were concentrated in U.S. and foreign corporate securities, ABS, CMBS and foreign government securities, and the decrease in estimated fair value recognized in OCI was concentrated in foreign government securities, foreign corporate securities and ABS.
|
|
|
|
|
September 30, 2013
|
|
|
December 31, 2012
|
|
||||||||||||||||||||||||
NAIC
Rating
|
|
Rating Agency Designation
|
|
Amortized
Cost
|
|
Unrealized
Gain (Loss)
|
|
Estimated
Fair
Value
|
|
% of
Total
|
|
|
Amortized
Cost
|
|
Unrealized
Gain (Loss)
|
|
Estimated
Fair
Value
|
|
% of
Total
|
|
||||||||||||
|
|
|
|
(In millions)
|
|
|
(In millions)
|
|
||||||||||||||||||||||||
1
|
|
Aaa/Aa/A
|
|
$
|
226,256
|
|
|
$
|
13,091
|
|
|
$
|
239,347
|
|
|
68.6
|
%
|
|
$
|
234,371
|
|
|
$
|
24,197
|
|
|
$
|
258,568
|
|
|
69.1
|
%
|
2
|
|
Baa
|
|
79,850
|
|
|
4,419
|
|
|
84,269
|
|
|
24.2
|
|
|
81,530
|
|
|
8,663
|
|
|
90,193
|
|
|
24.1
|
|
||||||
|
|
Subtotal investment grade
|
|
306,106
|
|
|
17,510
|
|
|
323,616
|
|
|
92.8
|
|
|
315,901
|
|
|
32,860
|
|
|
348,761
|
|
|
93.2
|
|
||||||
3
|
|
Ba
|
|
13,537
|
|
|
245
|
|
|
13,782
|
|
|
3.9
|
|
|
13,882
|
|
|
552
|
|
|
14,434
|
|
|
3.8
|
|
||||||
4
|
|
B
|
|
9,512
|
|
|
178
|
|
|
9,690
|
|
|
2.8
|
|
|
9,470
|
|
|
137
|
|
|
9,607
|
|
|
2.6
|
|
||||||
5
|
|
Caa and lower
|
|
1,710
|
|
|
(71
|
)
|
|
1,639
|
|
|
0.5
|
|
|
1,543
|
|
|
(164
|
)
|
|
1,379
|
|
|
0.4
|
|
||||||
6
|
|
In or near default
|
|
35
|
|
|
25
|
|
|
60
|
|
|
—
|
|
|
74
|
|
|
11
|
|
|
85
|
|
|
—
|
|
||||||
|
|
Subtotal below investment grade
|
|
24,794
|
|
|
377
|
|
|
25,171
|
|
|
7.2
|
|
|
24,969
|
|
|
536
|
|
|
25,505
|
|
|
6.8
|
|
||||||
|
|
Total fixed maturity securities
|
|
$
|
330,900
|
|
|
$
|
17,887
|
|
|
$
|
348,787
|
|
|
100.0
|
%
|
|
$
|
340,870
|
|
|
$
|
33,396
|
|
|
$
|
374,266
|
|
|
100.0
|
%
|
|
Fixed Maturity Securities — by Sector & Credit Quality Rating
|
||||||||||||||||||||||||||
NAIC Rating:
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|
6
|
|
Total
Estimated
Fair Value
|
||||||||||||||
Rating Agency Designation:
|
Aaa/Aa/A
|
|
Baa
|
|
Ba
|
|
B
|
|
Caa and Lower
|
|
In or Near
Default
|
|
|||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. corporate
|
$
|
47,489
|
|
|
$
|
45,450
|
|
|
$
|
8,900
|
|
|
$
|
5,142
|
|
|
$
|
470
|
|
|
$
|
40
|
|
|
$
|
107,491
|
|
Foreign corporate
|
28,065
|
|
|
30,810
|
|
|
2,883
|
|
|
1,810
|
|
|
79
|
|
|
1
|
|
|
63,648
|
|
|||||||
Foreign government
|
46,406
|
|
|
4,421
|
|
|
612
|
|
|
1,405
|
|
|
160
|
|
|
—
|
|
|
53,004
|
|
|||||||
U.S. Treasury and agency
|
44,154
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,154
|
|
|||||||
RMBS
|
30,511
|
|
|
1,584
|
|
|
1,311
|
|
|
1,204
|
|
|
854
|
|
|
14
|
|
|
35,478
|
|
|||||||
CMBS
|
16,690
|
|
|
105
|
|
|
36
|
|
|
8
|
|
|
57
|
|
|
—
|
|
|
16,896
|
|
|||||||
ABS
|
12,776
|
|
|
1,210
|
|
|
30
|
|
|
121
|
|
|
19
|
|
|
5
|
|
|
14,161
|
|
|||||||
State and political subdivision
|
13,256
|
|
|
689
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,955
|
|
|||||||
Total fixed maturity securities
|
$
|
239,347
|
|
|
$
|
84,269
|
|
|
$
|
13,782
|
|
|
$
|
9,690
|
|
|
$
|
1,639
|
|
|
$
|
60
|
|
|
$
|
348,787
|
|
Percentage of total
|
68.6
|
%
|
|
24.2
|
%
|
|
3.9
|
%
|
|
2.8
|
%
|
|
0.5
|
%
|
|
—
|
%
|
|
100.0
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. corporate
|
$
|
51,648
|
|
|
$
|
48,622
|
|
|
$
|
8,597
|
|
|
$
|
4,831
|
|
|
$
|
380
|
|
|
$
|
48
|
|
|
$
|
114,126
|
|
Foreign corporate
|
31,937
|
|
|
30,509
|
|
|
3,249
|
|
|
1,418
|
|
|
66
|
|
|
5
|
|
|
67,184
|
|
|||||||
Foreign government
|
46,314
|
|
|
8,501
|
|
|
933
|
|
|
1,504
|
|
|
84
|
|
|
—
|
|
|
57,336
|
|
|||||||
U.S. Treasury and agency
|
47,967
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,967
|
|
|||||||
RMBS
|
32,377
|
|
|
894
|
|
|
1,582
|
|
|
1,809
|
|
|
790
|
|
|
27
|
|
|
37,479
|
|
|||||||
CMBS
|
18,843
|
|
|
193
|
|
|
43
|
|
|
11
|
|
|
39
|
|
|
—
|
|
|
19,129
|
|
|||||||
ABS
|
15,247
|
|
|
673
|
|
|
18
|
|
|
34
|
|
|
20
|
|
|
5
|
|
|
15,997
|
|
|||||||
State and political subdivision
|
14,235
|
|
|
801
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,048
|
|
|||||||
Total fixed maturity securities
|
$
|
258,568
|
|
|
$
|
90,193
|
|
|
$
|
14,434
|
|
|
$
|
9,607
|
|
|
$
|
1,379
|
|
|
$
|
85
|
|
|
$
|
374,266
|
|
Percentage of total
|
69.1
|
%
|
|
24.1
|
%
|
|
3.8
|
%
|
|
2.6
|
%
|
|
0.4
|
%
|
|
—
|
%
|
|
100.0
|
%
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Estimated
Fair
Value
|
|
% of
Total
|
||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||
Corporate fixed maturity securities — by sector:
|
|
|
|
|
|
|
|
||||||
Foreign corporate (1)
|
$
|
63,648
|
|
|
37.2
|
%
|
|
$
|
67,184
|
|
|
37.1
|
%
|
U.S. corporate fixed maturity securities — by industry:
|
|
|
|
|
|
|
|
||||||
Consumer
|
27,957
|
|
|
16.3
|
|
|
29,852
|
|
|
16.4
|
|
||
Industrial
|
27,625
|
|
|
16.1
|
|
|
29,324
|
|
|
16.2
|
|
||
Finance
|
20,526
|
|
|
12.0
|
|
|
21,857
|
|
|
12.1
|
|
||
Utility
|
19,241
|
|
|
11.3
|
|
|
20,216
|
|
|
11.1
|
|
||
Communications
|
8,451
|
|
|
4.9
|
|
|
9,084
|
|
|
5.0
|
|
||
Other
|
3,691
|
|
|
2.2
|
|
|
3,793
|
|
|
2.1
|
|
||
Total
|
$
|
171,139
|
|
|
100.0
|
%
|
|
$
|
181,310
|
|
|
100.0
|
%
|
(1)
|
Includes both U.S. dollar and foreign denominated securities.
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
||||||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||
By security type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collateralized mortgage obligations
|
$
|
19,355
|
|
|
54.6
|
%
|
|
$
|
713
|
|
|
$
|
20,567
|
|
|
54.9
|
%
|
|
$
|
889
|
|
Pass-through securities
|
16,123
|
|
|
45.4
|
|
|
353
|
|
|
16,912
|
|
|
45.1
|
|
|
924
|
|
||||
Total RMBS
|
$
|
35,478
|
|
|
100.0
|
%
|
|
$
|
1,066
|
|
|
$
|
37,479
|
|
|
100.0
|
%
|
|
$
|
1,813
|
|
By risk profile:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
$
|
23,986
|
|
|
67.6
|
%
|
|
$
|
1,029
|
|
|
$
|
26,369
|
|
|
70.4
|
%
|
|
$
|
1,944
|
|
Prime
|
3,051
|
|
|
8.6
|
|
|
74
|
|
|
4,206
|
|
|
11.2
|
|
|
101
|
|
||||
Alt-A
|
5,009
|
|
|
14.1
|
|
|
(61
|
)
|
|
4,950
|
|
|
13.2
|
|
|
(154
|
)
|
||||
Sub-prime
|
3,432
|
|
|
9.7
|
|
|
24
|
|
|
1,954
|
|
|
5.2
|
|
|
(78
|
)
|
||||
Total RMBS
|
$
|
35,478
|
|
|
100.0
|
%
|
|
$
|
1,066
|
|
|
$
|
37,479
|
|
|
100.0
|
%
|
|
$
|
1,813
|
|
Ratings profile:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rated Aaa/AAA
|
$
|
25,015
|
|
|
70.5
|
%
|
|
|
|
$
|
26,555
|
|
|
70.9
|
%
|
|
|
||||
Rated NAIC 1
|
$
|
30,511
|
|
|
86.0
|
%
|
|
|
|
$
|
32,377
|
|
|
86.4
|
%
|
|
|
|
September 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Aaa
|
|
Aa
|
|
A
|
|
Baa
|
|
Below
Investment
Grade
|
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
2003
|
$
|
235
|
|
|
$
|
240
|
|
|
$
|
29
|
|
|
$
|
29
|
|
|
$
|
39
|
|
|
$
|
40
|
|
|
$
|
30
|
|
|
$
|
31
|
|
|
$
|
17
|
|
|
$
|
17
|
|
|
$
|
350
|
|
|
$
|
357
|
|
2004
|
2,793
|
|
|
2,838
|
|
|
363
|
|
|
379
|
|
|
90
|
|
|
95
|
|
|
76
|
|
|
78
|
|
|
8
|
|
|
5
|
|
|
3,330
|
|
|
3,395
|
|
||||||||||||
2005
|
3,216
|
|
|
3,385
|
|
|
347
|
|
|
371
|
|
|
361
|
|
|
383
|
|
|
104
|
|
|
112
|
|
|
29
|
|
|
35
|
|
|
4,058
|
|
|
4,286
|
|
||||||||||||
2006
|
2,267
|
|
|
2,395
|
|
|
250
|
|
|
265
|
|
|
141
|
|
|
149
|
|
|
16
|
|
|
21
|
|
|
37
|
|
|
37
|
|
|
2,711
|
|
|
2,867
|
|
||||||||||||
2007
|
828
|
|
|
864
|
|
|
79
|
|
|
83
|
|
|
233
|
|
|
247
|
|
|
185
|
|
|
187
|
|
|
75
|
|
|
68
|
|
|
1,400
|
|
|
1,449
|
|
||||||||||||
2008 - 2010
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|
52
|
|
|
1
|
|
|
1
|
|
|
8
|
|
|
9
|
|
|
64
|
|
|
62
|
|
||||||||||||
2011
|
589
|
|
|
615
|
|
|
25
|
|
|
24
|
|
|
119
|
|
|
119
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
738
|
|
|
763
|
|
||||||||||||
2012
|
536
|
|
|
558
|
|
|
277
|
|
|
270
|
|
|
932
|
|
|
890
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
57
|
|
|
1,774
|
|
|
1,775
|
|
||||||||||||
2013
|
578
|
|
|
563
|
|
|
380
|
|
|
373
|
|
|
1,042
|
|
|
1,006
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,000
|
|
|
1,942
|
|
||||||||||||
Total
|
$
|
11,042
|
|
|
$
|
11,458
|
|
|
$
|
1,750
|
|
|
$
|
1,794
|
|
|
$
|
3,012
|
|
|
$
|
2,981
|
|
|
$
|
412
|
|
|
$
|
430
|
|
|
$
|
209
|
|
|
$
|
233
|
|
|
$
|
16,425
|
|
|
$
|
16,896
|
|
Ratings Distribution
|
|
|
67.8
|
%
|
|
|
|
10.6
|
%
|
|
|
|
17.6
|
%
|
|
|
|
2.6
|
%
|
|
|
|
1.4
|
%
|
|
|
|
100.0
|
%
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
December 31, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Aaa
|
|
Aa
|
|
A
|
|
Baa
|
|
Below
Investment
Grade
|
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
2003
|
$
|
2,957
|
|
|
$
|
2,997
|
|
|
$
|
113
|
|
|
$
|
114
|
|
|
$
|
82
|
|
|
$
|
82
|
|
|
$
|
37
|
|
|
$
|
36
|
|
|
$
|
33
|
|
|
$
|
33
|
|
|
$
|
3,222
|
|
|
$
|
3,262
|
|
2004
|
3,466
|
|
|
3,606
|
|
|
380
|
|
|
401
|
|
|
97
|
|
|
99
|
|
|
52
|
|
|
51
|
|
|
21
|
|
|
9
|
|
|
4,016
|
|
|
4,166
|
|
||||||||||||
2005
|
3,348
|
|
|
3,636
|
|
|
303
|
|
|
329
|
|
|
275
|
|
|
296
|
|
|
144
|
|
|
142
|
|
|
—
|
|
|
—
|
|
|
4,070
|
|
|
4,403
|
|
||||||||||||
2006
|
2,283
|
|
|
2,484
|
|
|
263
|
|
|
284
|
|
|
44
|
|
|
44
|
|
|
47
|
|
|
50
|
|
|
38
|
|
|
36
|
|
|
2,675
|
|
|
2,898
|
|
||||||||||||
2007
|
1,070
|
|
|
1,143
|
|
|
112
|
|
|
117
|
|
|
87
|
|
|
95
|
|
|
194
|
|
|
187
|
|
|
20
|
|
|
21
|
|
|
1,483
|
|
|
1,563
|
|
||||||||||||
2008 - 2010
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
60
|
|
|
26
|
|
|
24
|
|
|
84
|
|
|
87
|
|
||||||||||||
2011
|
598
|
|
|
650
|
|
|
12
|
|
|
11
|
|
|
108
|
|
|
112
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
6
|
|
|
725
|
|
|
779
|
|
||||||||||||
2012
|
524
|
|
|
559
|
|
|
403
|
|
|
417
|
|
|
939
|
|
|
956
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
39
|
|
|
1,902
|
|
|
1,971
|
|
||||||||||||
Total
|
$
|
14,248
|
|
|
$
|
15,078
|
|
|
$
|
1,586
|
|
|
$
|
1,673
|
|
|
$
|
1,632
|
|
|
$
|
1,684
|
|
|
$
|
530
|
|
|
$
|
526
|
|
|
$
|
181
|
|
|
$
|
168
|
|
|
$
|
18,177
|
|
|
$
|
19,129
|
|
Ratings Distribution
|
|
|
78.8
|
%
|
|
|
|
8.7
|
%
|
|
|
|
8.8
|
%
|
|
|
|
2.8
|
%
|
|
|
|
0.9
|
%
|
|
|
|
100.0
|
%
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
||||||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||
By collateral type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign residential loans
|
$
|
3,528
|
|
|
24.9
|
%
|
|
$
|
67
|
|
|
$
|
3,811
|
|
|
23.8
|
%
|
|
$
|
88
|
|
Collateralized debt obligations
|
2,642
|
|
|
18.7
|
|
|
—
|
|
|
2,453
|
|
|
15.3
|
|
|
(68
|
)
|
||||
Student loans
|
2,239
|
|
|
15.8
|
|
|
19
|
|
|
2,480
|
|
|
15.5
|
|
|
14
|
|
||||
Credit card loans
|
1,950
|
|
|
13.8
|
|
|
38
|
|
|
2,640
|
|
|
16.5
|
|
|
106
|
|
||||
Automobile loans
|
1,928
|
|
|
13.6
|
|
|
12
|
|
|
2,454
|
|
|
15.4
|
|
|
28
|
|
||||
Equipment loans
|
285
|
|
|
2.0
|
|
|
7
|
|
|
597
|
|
|
3.7
|
|
|
22
|
|
||||
Other loans
|
1,589
|
|
|
11.2
|
|
|
(5
|
)
|
|
1,562
|
|
|
9.8
|
|
|
45
|
|
||||
Total
|
$
|
14,161
|
|
|
100.0
|
%
|
|
$
|
138
|
|
|
$
|
15,997
|
|
|
100.0
|
%
|
|
$
|
235
|
|
Ratings profile:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rated Aaa/AAA
|
$
|
8,253
|
|
|
58.3
|
%
|
|
|
|
$
|
10,405
|
|
|
65.0
|
%
|
|
|
||||
Rated NAIC 1
|
$
|
12,776
|
|
|
90.2
|
%
|
|
|
|
$
|
15,247
|
|
|
95.3
|
%
|
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||
Region:
|
|
|
|
|
|
|
|
||||||
Pacific
|
$
|
8,214
|
|
|
20.4
|
%
|
|
$
|
7,932
|
|
|
19.6
|
%
|
Middle Atlantic
|
7,356
|
|
|
18.3
|
|
|
6,780
|
|
|
16.7
|
|
||
South Atlantic
|
7,095
|
|
|
17.6
|
|
|
7,969
|
|
|
19.7
|
|
||
International
|
6,158
|
|
|
15.3
|
|
|
5,567
|
|
|
13.8
|
|
||
West South Central
|
3,483
|
|
|
8.7
|
|
|
3,436
|
|
|
8.5
|
|
||
East North Central
|
2,680
|
|
|
6.7
|
|
|
3,026
|
|
|
7.5
|
|
||
New England
|
1,473
|
|
|
3.7
|
|
|
1,489
|
|
|
3.7
|
|
||
Mountain
|
835
|
|
|
2.0
|
|
|
906
|
|
|
2.2
|
|
||
East South Central
|
420
|
|
|
1.0
|
|
|
457
|
|
|
1.1
|
|
||
West North Central
|
203
|
|
|
0.5
|
|
|
288
|
|
|
0.7
|
|
||
Multi-Region and Other
|
2,345
|
|
|
5.8
|
|
|
2,622
|
|
|
6.5
|
|
||
Total recorded investment
|
40,262
|
|
|
100.0
|
%
|
|
40,472
|
|
|
100.0
|
%
|
||
Less: valuation allowances
|
259
|
|
|
|
|
293
|
|
|
|
||||
Carrying value, net of valuation allowances
|
$
|
40,003
|
|
|
|
|
$
|
40,179
|
|
|
|
||
Property Type:
|
|
|
|
|
|
|
|
||||||
Office
|
$
|
18,315
|
|
|
45.5
|
%
|
|
$
|
18,012
|
|
|
44.5
|
%
|
Retail
|
9,384
|
|
|
23.3
|
|
|
9,445
|
|
|
23.3
|
|
||
Apartment
|
3,865
|
|
|
9.6
|
|
|
3,944
|
|
|
9.8
|
|
||
Hotel
|
3,629
|
|
|
9.0
|
|
|
3,355
|
|
|
8.3
|
|
||
Industrial
|
2,840
|
|
|
7.1
|
|
|
3,159
|
|
|
7.8
|
|
||
Other
|
2,229
|
|
|
5.5
|
|
|
2,557
|
|
|
6.3
|
|
||
Total recorded investment
|
40,262
|
|
|
100.0
|
%
|
|
40,472
|
|
|
100.0
|
%
|
||
Less: valuation allowances
|
259
|
|
|
|
|
293
|
|
|
|
||||
Carrying value, net of valuation allowances
|
$
|
40,003
|
|
|
|
|
$
|
40,179
|
|
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||||||
|
Recorded
Investment
|
|
% of
Total
|
|
Valuation
Allowance
|
|
% of
Recorded
Investment
|
|
Recorded
Investment
|
|
% of
Total
|
|
Valuation
Allowance
|
|
% of
Recorded
Investment
|
||||||||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performing
|
$
|
39,855
|
|
|
99.0
|
%
|
|
$
|
225
|
|
|
0.6
|
%
|
|
$
|
40,064
|
|
|
99.0
|
%
|
|
$
|
214
|
|
|
0.5
|
%
|
Restructured (1)
|
395
|
|
|
1.0
|
|
|
34
|
|
|
8.6
|
%
|
|
406
|
|
|
1.0
|
|
|
79
|
|
|
19.5
|
%
|
||||
Potentially delinquent
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Delinquent or under foreclosure
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Total
|
$
|
40,262
|
|
|
100.0
|
%
|
|
$
|
259
|
|
|
0.6
|
%
|
|
$
|
40,472
|
|
|
100.0
|
%
|
|
$
|
293
|
|
|
0.7
|
%
|
Agricultural:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performing
|
$
|
12,660
|
|
|
98.7
|
%
|
|
$
|
38
|
|
|
0.3
|
%
|
|
$
|
12,657
|
|
|
98.6
|
%
|
|
$
|
31
|
|
|
0.2
|
%
|
Restructured (2)
|
74
|
|
|
0.6
|
|
|
5
|
|
|
6.8
|
%
|
|
64
|
|
|
0.5
|
|
|
8
|
|
|
12.5
|
%
|
||||
Potentially delinquent
|
3
|
|
|
—
|
|
|
1
|
|
|
33.3
|
%
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Delinquent or under foreclosure (2)
|
93
|
|
|
0.7
|
|
|
6
|
|
|
6.5
|
%
|
|
116
|
|
|
0.9
|
|
|
13
|
|
|
11.2
|
%
|
||||
Total
|
$
|
12,830
|
|
|
100.0
|
%
|
|
$
|
50
|
|
|
0.4
|
%
|
|
$
|
12,843
|
|
|
100.0
|
%
|
|
$
|
52
|
|
|
0.4
|
%
|
Residential:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performing
|
$
|
2,380
|
|
|
97.8
|
%
|
|
$
|
15
|
|
|
0.6
|
%
|
|
$
|
929
|
|
|
97.0
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Restructured (3)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Delinquent or under foreclosure
|
53
|
|
|
2.2
|
|
|
2
|
|
|
3.8
|
%
|
|
29
|
|
|
3.0
|
|
|
2
|
|
|
6.9
|
%
|
||||
Total
|
$
|
2,434
|
|
|
100.0
|
%
|
|
$
|
17
|
|
|
0.7
|
%
|
|
$
|
958
|
|
|
100.0
|
%
|
|
$
|
2
|
|
|
0.2
|
%
|
(1)
|
As of
September 30, 2013
and
December 31, 2012
, there were nine restructured commercial mortgage loans, respectively, all of which were performing.
|
(2)
|
As of
September 30, 2013
there were 17 restructured agricultural mortgage loans of which 13 were performing and four were delinquent. As of
December 31, 2012
, there were 15 restructured loans, all of which were performing.
|
(3)
|
As of
September 30, 2013
there were 11 restructured residential mortgage loans, all of which were performing. There were no restructured residential mortgage loans at
December 31, 2012
.
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||
|
Carrying
Value
|
|
% of
Total
|
|
Carrying
Value
|
|
% of
Total
|
||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||
Traditional
|
$
|
7,490
|
|
|
74.5
|
%
|
|
$
|
8,488
|
|
|
85.6
|
%
|
Real estate joint ventures and funds
|
823
|
|
|
8.2
|
|
|
941
|
|
|
9.5
|
|
||
Subtotal
|
8,313
|
|
|
82.7
|
|
|
9,429
|
|
|
95.1
|
|
||
Foreclosed (commercial, agricultural and residential)
|
443
|
|
|
4.4
|
|
|
488
|
|
|
4.9
|
|
||
Real estate held-for-investment
|
8,756
|
|
|
87.1
|
|
|
9,917
|
|
|
100.0
|
|
||
Real estate held-for-sale
|
1,297
|
|
|
12.9
|
|
|
1
|
|
|
—
|
|
||
Total real estate and real estate joint ventures
|
$
|
10,053
|
|
|
100.0
|
%
|
|
$
|
9,918
|
|
|
100.0
|
%
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||
|
Carrying
Value
|
|
% of
Total
|
|
Carrying
Value
|
|
% of
Total
|
||||||
|
(In millions)
|
|
|
|
(In millions)
|
|
|
||||||
Freestanding derivatives with positive estimated fair values
|
$
|
9,301
|
|
|
55.5
|
%
|
|
$
|
13,777
|
|
|
65.2
|
%
|
Tax credit partnerships
|
2,464
|
|
|
14.7
|
|
|
2,268
|
|
|
10.7
|
|
||
Leveraged leases, net of non-recourse debt
|
1,968
|
|
|
11.7
|
|
|
1,998
|
|
|
9.4
|
|
||
Funds withheld
|
637
|
|
|
3.8
|
|
|
641
|
|
|
3.0
|
|
||
Joint venture investments
|
142
|
|
|
0.8
|
|
|
180
|
|
|
0.9
|
|
||
Other
|
2,254
|
|
|
13.5
|
|
|
2,281
|
|
|
10.8
|
|
||
Total
|
$
|
16,766
|
|
|
100.0
|
%
|
|
$
|
21,145
|
|
|
100.0
|
%
|
•
|
A comprehensive description of the nature of our derivatives, including the strategies for which derivatives are used in managing various risks.
|
•
|
Information about the notional amount, estimated fair value, and primary underlying risk exposure of our derivatives by type of hedge designation, excluding embedded derivatives held at
September 30, 2013
and
December 31, 2012
.
|
•
|
The statement of operations effects of derivatives in cash flow, fair value, or non-qualifying hedge relationships for the
three months and nine months ended
September 30, 2013
and
2012
.
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
Credit Default Swaps
|
|
Notional
Amount
|
|
Estimated
Fair Value
|
|
Notional
Amount
|
|
Estimated
Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Purchased (1)
|
|
$
|
3,511
|
|
|
$
|
(28
|
)
|
|
$
|
3,674
|
|
|
$
|
(23
|
)
|
Written (2)
|
|
9,387
|
|
|
117
|
|
|
8,879
|
|
|
74
|
|
||||
Total
|
|
$
|
12,898
|
|
|
$
|
89
|
|
|
$
|
12,553
|
|
|
$
|
51
|
|
(1)
|
The notional amount and estimated fair value for purchased credit default swaps in the trading portfolio were $400 million and ($7) million, respectively, at
September 30, 2013
and $380 million and ($1) million, respectively, at
December 31, 2012
.
|
(2)
|
The notional amount and estimated fair value for written credit default swaps in the trading portfolio were $10 million and $0, respectively, at both
September 30, 2013
and
December 31, 2012
.
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
||||||||||||||||||||||||||||||||||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||||||||||||||||||||||||||
Credit Default Swaps
|
|
Gross
Gains
(1)
|
|
Gross
Losses
(1)
|
|
Net
Gains
(Losses)
|
|
Gross
Gains
(1)
|
|
Gross
Losses
(1)
|
|
Net
Gains
(Losses)
|
|
Gross
Gains
(1)
|
|
Gross
Losses
(1)
|
|
Net
Gains
(Losses)
|
|
Gross
Gains
(1)
|
|
Gross
Losses
(1)
|
|
Net
Gains
(Losses)
|
||||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
Purchased (2), (4)
|
|
$
|
2
|
|
|
$
|
(10
|
)
|
|
$
|
(8
|
)
|
|
$
|
1
|
|
|
$
|
(98
|
)
|
|
$
|
(97
|
)
|
|
$
|
12
|
|
|
$
|
(29
|
)
|
|
$
|
(17
|
)
|
|
$
|
8
|
|
|
$
|
(283
|
)
|
|
$
|
(275
|
)
|
Written (3), (4)
|
|
43
|
|
|
3
|
|
|
46
|
|
|
50
|
|
|
29
|
|
|
79
|
|
|
95
|
|
|
(22
|
)
|
|
73
|
|
|
138
|
|
|
(8
|
)
|
|
130
|
|
||||||||||||
Total
|
|
$
|
45
|
|
|
$
|
(7
|
)
|
|
$
|
38
|
|
|
$
|
51
|
|
|
$
|
(69
|
)
|
|
$
|
(18
|
)
|
|
$
|
107
|
|
|
$
|
(51
|
)
|
|
$
|
56
|
|
|
$
|
146
|
|
|
$
|
(291
|
)
|
|
$
|
(145
|
)
|
(1)
|
Gains (losses) are reported in net derivative gains (losses), except for gains (losses) on the trading portfolio, which are reported in net investment income.
|
(2)
|
The gross gains and gross (losses) for purchased credit default swaps in the trading portfolio were $0 and ($5) million, respectively, for the
three months ended
September 30, 2013
and $2 million and ($11) million, respectively, for the
nine months ended
September 30, 2013
. The gross gains and gross (losses) for purchased credit default swaps in the trading portfolio were $2 million and ($8) million, respectively, for the
three months ended
September 30, 2012
and $7 million and ($20) million, respectively, for the
nine months ended
September 30, 2012
.
|
(3)
|
The gross gains and gross (losses) for written credit default swaps in the trading portfolio were $1 million and $0, respectively, for both the three months and nine months ended September 30, 2013. The gross gains and gross (losses) for written credit default swaps in the trading portfolio were not significant for the
three months and nine months ended
September 30, 2012.
|
(4)
|
Gains (losses) do not include earned income (expense) on credit default swaps.
|
|
September 30, 2013
|
||||||
Guaranteed Minimum Crediting Rate
|
Account
Value (1)
|
|
Account
Value at
Guarantee (1)
|
||||
|
(In millions)
|
||||||
Life & Other:
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
91
|
|
|
$
|
91
|
|
Equal to 2% but less than 4%
|
$
|
11,220
|
|
|
$
|
4,723
|
|
Equal to or greater than 4%
|
$
|
10,812
|
|
|
$
|
6,469
|
|
Annuities:
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
3,005
|
|
|
$
|
2,068
|
|
Equal to 2% but less than 4%
|
$
|
34,349
|
|
|
$
|
26,815
|
|
Equal to or greater than 4%
|
$
|
2,730
|
|
|
$
|
2,669
|
|
(1)
|
These amounts are not adjusted for policy loans.
|
|
September 30, 2013
|
||||||
Guaranteed Minimum Crediting Rate
|
Account
Value (1)
|
|
Account
Value at
Guarantee (1)
|
||||
|
(In millions)
|
||||||
Greater than 0% but less than 2%
|
$
|
5,096
|
|
|
$
|
5,096
|
|
Equal to 2% but less than 4%
|
$
|
2,293
|
|
|
$
|
2,276
|
|
Equal to or greater than 4%
|
$
|
615
|
|
|
$
|
589
|
|
(1)
|
These amounts are not adjusted for policy loans.
|
|
September 30, 2013
|
||||||
Guaranteed Minimum Crediting Rate
(1)
|
Account
Value (2)
|
|
Account
Value at
Guarantee (2)
|
||||
|
(In millions)
|
||||||
Annuities:
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
27,963
|
|
|
$
|
1,039
|
|
Equal to 2% but less than 4%
|
$
|
1,051
|
|
|
$
|
439
|
|
Equal to or greater than 4%
|
$
|
2
|
|
|
$
|
2
|
|
Life & Other:
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
5,782
|
|
|
$
|
4,688
|
|
Equal to 2% but less than 4%
|
$
|
16,570
|
|
|
$
|
8,858
|
|
Equal to or greater than 4%
|
$
|
261
|
|
|
$
|
—
|
|
(1)
|
Excludes negative VOBA liabilities of $2.04 billion at
September 30, 2013
, primarily held in Japan. These liabilities were established in instances where the estimated fair value of contract obligations exceeded the book value of assumed insurance policy liabilities in the ALICO acquisition. These negative liabilities were established primarily for decreased market interest rates subsequent to the issuance of the policy contracts.
|
(2)
|
These amounts are not adjusted for policy loans.
|
|
Future Policy
Benefits
|
|
Policyholder
Account Balances
|
||||||||||||
|
September 30, 2013
|
|
December 31, 2012
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||
|
(In millions)
|
||||||||||||||
Americas:
|
|
|
|
|
|
|
|
||||||||
GMDB
|
$
|
449
|
|
|
$
|
343
|
|
|
$
|
—
|
|
|
$
|
—
|
|
GMIB
|
1,572
|
|
|
1,432
|
|
|
(1,363
|
)
|
|
200
|
|
||||
GMAB
|
—
|
|
|
—
|
|
|
6
|
|
|
23
|
|
||||
GMWB
|
62
|
|
|
30
|
|
|
(130
|
)
|
|
428
|
|
||||
Asia:
|
|
|
|
|
|
|
|
||||||||
GMDB
|
38
|
|
|
54
|
|
|
—
|
|
|
—
|
|
||||
GMAB
|
—
|
|
|
—
|
|
|
5
|
|
|
11
|
|
||||
GMWB
|
199
|
|
|
183
|
|
|
134
|
|
|
190
|
|
||||
EMEA:
|
|
|
|
|
|
|
|
||||||||
GMDB
|
5
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
GMAB
|
—
|
|
|
—
|
|
|
11
|
|
|
28
|
|
||||
GMWB
|
18
|
|
|
20
|
|
|
(77
|
)
|
|
43
|
|
||||
Corporate & Other:
|
|
|
|
|
|
|
|
||||||||
GMDB
|
8
|
|
|
39
|
|
|
—
|
|
|
—
|
|
||||
GMAB
|
—
|
|
|
—
|
|
|
151
|
|
|
387
|
|
||||
GMWB
|
99
|
|
|
95
|
|
|
1,554
|
|
|
2,195
|
|
||||
Total
|
$
|
2,450
|
|
|
$
|
2,202
|
|
|
$
|
291
|
|
|
$
|
3,505
|
|
|
Total Contract
Account Value (1)
|
||||||
|
Americas
|
|
Corporate &
Other
|
||||
|
(In millions)
|
||||||
Return of premium or five to seven year step-up
|
$
|
102,050
|
|
|
$
|
16,384
|
|
Annual step-up
|
31,293
|
|
|
—
|
|
||
Roll-up and step-up combination
|
38,429
|
|
|
—
|
|
||
Total
|
$
|
171,772
|
|
|
$
|
16,384
|
|
(1)
|
Total contract account value excludes $2.2 billion for contracts with no GMDBs and approximately $11.6 billion of total contract account value in the EMEA and Asia segments.
|
|
Total Contract
Account Value (1)
|
||||||
|
Americas
|
|
Corporate &
Other
|
||||
|
(In millions)
|
||||||
GMIB
|
$
|
95,735
|
|
|
$
|
—
|
|
GMWB - non-life contingent
|
7,224
|
|
|
3,932
|
|
||
GMWB - life-contingent
|
18,854
|
|
|
10,268
|
|
||
GMAB
|
378
|
|
|
2,184
|
|
||
|
$
|
122,191
|
|
|
$
|
16,384
|
|
(1)
|
Total contract account value excludes $51.8 billion for contracts with no living benefit guarantees and approximately $8.7 billion of total contract account value in the EMEA and Asia segments.
|
|
Total Contract
Account Value
|
||
|
(In millions)
|
||
7-year setback, 2.5% interest rate
|
$
|
36,282
|
|
7-year setback, 1.5% interest rate
|
5,921
|
|
|
10-year setback, 1.5% interest rate
|
19,783
|
|
|
10-year mortality projection, 10-year setback, 1.0% interest rate
|
29,315
|
|
|
10-year mortality projection, 10-year setback, 0.5% interest rate
|
4,434
|
|
|
|
$
|
95,735
|
|
|
In-the-
Moneyness
|
|
Total Contract
Account Value
|
|
% of Total
|
|
||
|
|
|
(In millions)
|
|
|
|||
In-the-money
|
30%+
|
|
$
|
755
|
|
|
0.8
|
%
|
|
20% to 30%
|
|
671
|
|
|
0.7
|
%
|
|
|
10% to 20%
|
|
1,598
|
|
|
1.7
|
%
|
|
|
0% to 10%
|
|
3,947
|
|
|
4.1
|
%
|
|
|
|
|
6,971
|
|
|
|
||
Out-of-the-money
|
-10% to 0%
|
|
7,873
|
|
|
8.2
|
%
|
|
|
-20% to -10%
|
|
12,003
|
|
|
12.5
|
%
|
|
|
-20%+
|
|
68,888
|
|
|
72.0
|
%
|
|
|
|
|
88,764
|
|
|
|
||
Total GMIBs
|
|
|
$
|
95,735
|
|
|
|
|
|
Instrument Type
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
Primary Underlying
Risk Exposure
|
|
Notional
Amount
|
|
Estimated Fair Value
|
|
Notional
Amount
|
|
Estimated Fair Value
|
||||||||||||||||||
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||||
|
|
|
|
(In millions)
|
||||||||||||||||||||||
Interest rate
|
|
Interest rate swaps
|
|
$
|
25,483
|
|
|
$
|
1,300
|
|
|
$
|
635
|
|
|
$
|
24,041
|
|
|
$
|
1,973
|
|
|
$
|
614
|
|
|
|
Interest rate futures
|
|
7,188
|
|
|
3
|
|
|
7
|
|
|
8,913
|
|
|
1
|
|
|
25
|
|
||||||
|
|
Interest rate options
|
|
17,690
|
|
|
170
|
|
|
195
|
|
|
11,440
|
|
|
303
|
|
|
58
|
|
||||||
Foreign currency exchange rate
|
|
Foreign currency forwards
|
|
2,276
|
|
|
10
|
|
|
20
|
|
|
2,281
|
|
|
1
|
|
|
177
|
|
||||||
|
|
Foreign currency futures
|
|
356
|
|
|
2
|
|
|
—
|
|
|
518
|
|
|
4
|
|
|
—
|
|
||||||
Equity market
|
|
Equity futures
|
|
5,417
|
|
|
30
|
|
|
4
|
|
|
6,993
|
|
|
14
|
|
|
132
|
|
||||||
|
|
Equity options
|
|
35,448
|
|
|
1,694
|
|
|
823
|
|
|
21,759
|
|
|
2,824
|
|
|
356
|
|
||||||
|
|
Variance swaps
|
|
21,961
|
|
|
147
|
|
|
530
|
|
|
19,830
|
|
|
122
|
|
|
310
|
|
||||||
|
|
Total rate of return swaps
|
|
3,794
|
|
|
1
|
|
|
120
|
|
|
3,092
|
|
|
5
|
|
|
103
|
|
||||||
|
|
Total
|
|
$
|
119,613
|
|
|
$
|
3,357
|
|
|
$
|
2,334
|
|
|
$
|
98,867
|
|
|
$
|
5,247
|
|
|
$
|
1,775
|
|
|
Nine Months
Ended September 30, |
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Sources:
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
9,984
|
|
|
$
|
15,288
|
|
Net cash provided by changes in policyholder account balances
|
—
|
|
|
4,720
|
|
||
Net cash provided by changes in payables for collateral under securities loaned and other transactions
|
—
|
|
|
4,777
|
|
||
Net cash provided by changes in bank deposits
|
8
|
|
|
—
|
|
||
Long-term debt issued
|
—
|
|
|
750
|
|
||
Net change in liability for securitized reverse residential mortgage loans
|
—
|
|
|
1,198
|
|
||
Common stock issued, net of issuance costs
|
1,000
|
|
|
—
|
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents balances
|
—
|
|
|
24
|
|
||
Net cash provided by other, net
|
—
|
|
|
35
|
|
||
Total sources
|
10,992
|
|
|
26,792
|
|
||
Uses:
|
|
|
|
||||
Net cash used in investing activities
|
6,575
|
|
|
14,075
|
|
||
Net cash used for changes in policyholder account balances
|
4,973
|
|
|
—
|
|
||
Net cash used for changes in payables for collateral under securities loaned and other transactions
|
1,821
|
|
|
—
|
|
||
Net cash used for changes in bank deposits
|
—
|
|
|
4,052
|
|
||
Net cash used for short-term debt repayments
|
—
|
|
|
586
|
|
||
Long-term debt repaid
|
765
|
|
|
1,106
|
|
||
Collateral financing arrangements repaid
|
—
|
|
|
349
|
|
||
Cash paid in connection with collateral financing arrangements
|
—
|
|
|
44
|
|
||
Dividends on preferred stock
|
91
|
|
|
91
|
|
||
Dividends on common stock
|
808
|
|
|
—
|
|
||
Net cash used in other, net
|
134
|
|
|
—
|
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents balances
|
187
|
|
|
—
|
|
||
Total uses
|
15,354
|
|
|
20,303
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(4,362
|
)
|
|
$
|
6,489
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
(In millions)
|
||||||
Short-term debt
|
$
|
100
|
|
|
$
|
100
|
|
Long-term debt (1)
|
$
|
16,306
|
|
|
$
|
16,535
|
|
Collateral financing arrangements
|
$
|
4,196
|
|
|
$
|
4,196
|
|
Junior subordinated debt securities
|
$
|
3,193
|
|
|
$
|
3,192
|
|
(1)
|
Excludes $1.9 billion and $2.5 billion at
September 30, 2013
and
December 31, 2012
, respectively, of long-term debt relating to CSEs (see Note
6
of the Notes to the Interim Condensed Consolidated Financial Statements).
|
|
|
Record Date
|
|
Payment Date
|
|
Dividend
|
||||||
Declaration Date
|
|
Per Share
|
|
Aggregate
|
||||||||
|
|
|
|
|
|
(In millions, except per share data)
|
||||||
June 25, 2013
|
|
August 9, 2013
|
|
September 13, 2013
|
|
$
|
0.275
|
|
|
$
|
303
|
|
April 23, 2013
|
|
May 9, 2013
|
|
June 13, 2013
|
|
$
|
0.275
|
|
|
302
|
|
|
January 4, 2013
|
|
February 6, 2013
|
|
March 13, 2013
|
|
$
|
0.185
|
|
|
203
|
|
|
|
|
|
|
|
|
|
|
$
|
808
|
|
|
|
Record Date
|
|
Payment Date
|
|
Dividend
|
||||||||||||||
Declaration Date
|
|
Series A
Per Share
|
|
Series A
Aggregate
|
|
Series B
Per Share
|
|
Series B
Aggregate
|
||||||||||||
|
|
|
|
|
|
(In millions, except per share data)
|
||||||||||||||
August 15, 2013
|
|
August 31, 2013
|
|
September 16, 2013
|
|
$
|
0.256
|
|
|
$
|
6
|
|
|
$
|
0.406
|
|
|
$
|
24
|
|
May 15, 2013
|
|
May 31, 2013
|
|
June 17, 2013
|
|
$
|
0.256
|
|
|
7
|
|
|
$
|
0.406
|
|
|
24
|
|
||
March 5, 2013
|
|
February 28, 2013
|
|
March 15, 2013
|
|
$
|
0.250
|
|
|
6
|
|
|
$
|
0.406
|
|
|
24
|
|
||
|
|
|
|
|
|
|
|
$
|
19
|
|
|
|
|
$
|
72
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
August 15, 2012
|
|
August 31, 2012
|
|
September 17, 2012
|
|
$
|
0.256
|
|
|
$
|
6
|
|
|
$
|
0.406
|
|
|
$
|
24
|
|
May 15, 2012
|
|
May 31, 2012
|
|
June 15, 2012
|
|
$
|
0.256
|
|
|
7
|
|
|
$
|
0.406
|
|
|
24
|
|
||
March 5, 2012
|
|
February 29, 2012
|
|
March 15, 2012
|
|
$
|
0.253
|
|
|
6
|
|
|
$
|
0.406
|
|
|
24
|
|
||
|
|
|
|
|
|
|
|
$
|
19
|
|
|
|
|
$
|
72
|
|
|
|
|
September 30, 2013
|
|
2013
|
||||
Company
|
|
|
Paid
|
|
Permitted w/o
Approval (1)
|
||||
|
|
|
(In millions)
|
||||||
Metropolitan Life Insurance Company
|
|
$
|
714
|
|
|
$
|
1,428
|
|
|
American Life Insurance Company
|
|
$
|
—
|
|
|
$
|
523
|
|
|
MetLife Insurance Company of Connecticut
|
|
$
|
624
|
|
|
$
|
1,330
|
|
|
Metropolitan Property and Casualty Insurance Company
|
|
$
|
—
|
|
|
$
|
74
|
|
|
Metropolitan Tower Life Insurance Company (2)
|
|
$
|
—
|
|
|
$
|
77
|
|
|
MetLife Investors Insurance Company
|
|
$
|
—
|
|
|
$
|
129
|
|
|
Delaware American Life Insurance Company
|
|
$
|
—
|
|
|
$
|
7
|
|
(1)
|
Reflects dividend amounts that may be paid during 2013 without prior regulatory approval. However, because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid before a specified date during 2013, some or all of such dividends may require regulatory approval.
|
(2)
|
During October 2013, Metropolitan Tower Life Insurance Company (“MTL”) distributed shares of an affiliate to MetLife, Inc. as an in-kind dividend of $32 million. Also during October 2013, MTL paid a dividend to MetLife, Inc. in the amount of $77 million in cash, which represented its dividend capacity
without regulatory approval
at December 31, 2013. Regulatory approval for these dividends was obtained due to the amount and timing of the payments.
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
(In millions)
|
||||||
Long-term debt — unaffiliated
|
$
|
15,416
|
|
|
$
|
15,669
|
|
Long-term debt — affiliated
|
$
|
3,250
|
|
|
$
|
3,250
|
|
Collateral financing arrangements
|
$
|
2,797
|
|
|
$
|
2,797
|
|
Junior subordinated debt securities
|
$
|
1,748
|
|
|
$
|
1,748
|
|
•
|
Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees (“GMIB Fees”);
|
•
|
Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iv) excludes certain amounts related to contractholder-directed unit-linked investments, and (v) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
|
•
|
Other revenues are adjusted for settlements of foreign currency earnings hedges.
|
•
|
Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, (iii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iv) market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”);
|
•
|
Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of PABs but do not qualify for hedge accounting treatment and excludes amounts related to net investment income earned on contractholder-directed unit-linked investments;
|
•
|
Amortization of DAC and VOBA excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments;
|
•
|
Amortization of negative VOBA excludes amounts related to Market Value Adjustments;
|
•
|
Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
|
•
|
Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements, and (iii) acquisition and integration costs.
|
•
|
implementing a corporate risk framework, which outlines our approach for managing risk on an enterprise-wide basis;
|
•
|
developing policies and procedures for managing, measuring, monitoring and controlling those risks identified in the corporate risk framework;
|
•
|
establishing appropriate corporate risk tolerance levels;
|
•
|
recommending capital allocations on an economic capital basis; and
|
•
|
reporting on a periodic basis to the Finance and Risk Committee of MetLife, Inc.’s Board of Directors; with respect to credit risk, reporting to the Investment Committee of Metropolitan Life Insurance Company’s Board of Directors; and reporting on various aspects of risk to financial and non-financial senior management committees.
|
•
|
The Foreign Exchange Committee, in coordination with the Treasury Department, is responsible for managing the exposure to investments in foreign subsidiaries. Limits to exposures are established and monitored by the Treasury Department and managed by the Investments Department.
|
•
|
The Investments Department is responsible for managing the exposure to foreign currency denominated investments. Exposure limits to unhedged foreign currency investments are incorporated into the standing authorizations granted to management by the Board of Directors and are reported to the Board of Directors on a periodic basis.
|
•
|
Management of each of the Company’s segments is responsible for establishing limits and managing any foreign currency exchange rate exposure caused by the sale or issuance of insurance products.
|
•
|
Risks Related to Living Guarantee Benefits — We use a wide range of derivative contracts to hedge the risk associated with variable annuity living guarantee benefits. These hedges include equity and interest rate futures, interest rate swaps, currency futures/forwards, equity indexed options and interest rate option contracts and equity variance swaps.
|
•
|
Minimum Interest Rate Guarantees — For certain liability contracts, we provide the contractholder a guaranteed minimum interest rate. These contracts include certain fixed annuities and other insurance liabilities. We purchase interest rate floors to reduce risk associated with these liability guarantees.
|
•
|
Reinvestment Risk in Long Duration Liability Contracts — Derivatives are used to hedge interest rate risk related to certain long duration liability contracts. Hedges include interest rate swaps and swaptions.
|
•
|
Foreign Currency Exchange Rate Risk — We use currency swaps, forwards and options to hedge foreign currency exchange rate risk. These hedges primarily swap foreign currency denominated bonds, investments in foreign subsidiaries or equity market exposures to U.S. dollars.
|
•
|
General ALM Hedging Strategies — In the ordinary course of managing our asset/liability risks, we use interest rate futures, interest rate swaps, interest rate caps, interest rate floors and inflation swaps. These hedges are designed to reduce interest rate risk or inflation risk related to the existing assets or liabilities or related to expected future cash flows.
|
•
|
the net present values of our interest rate sensitive exposures resulting from a 10% change (increase or decrease) in interest rates;
|
•
|
the U.S. dollar equivalent estimated fair values of our foreign currency exposures due to a 10% change (increase or decrease) in foreign currency exchange rates; and
|
•
|
the estimated fair value of our equity positions due to a 10% change (increase or decrease) in equity market prices.
|
•
|
the market risk information is limited by the assumptions and parameters established in creating the related sensitivity analysis, including the impact of prepayment rates on mortgage loans;
|
•
|
for the derivatives that qualify as hedges, the impact on reported earnings may be materially different from the change in market values;
|
•
|
the analysis excludes liabilities pursuant to insurance contracts and real estate holdings; and
|
•
|
the model assumes that the composition of assets and liabilities remains unchanged throughout the period.
|
|
September 30, 2013
|
||
|
(In millions)
|
||
Non-trading:
|
|
||
Interest rate risk
|
$
|
6,330
|
|
Foreign currency exchange rate risk
|
$
|
6,207
|
|
Equity market risk
|
$
|
174
|
|
Trading:
|
|
||
Interest rate risk
|
$
|
9
|
|
Foreign currency exchange rate risk
|
$
|
7
|
|
|
September 30, 2013
|
||||||||||
|
Notional
Amount
|
|
Estimated
Fair
Value (1)
|
|
Assuming a
10% Increase
in the Yield
Curve
|
||||||
|
(In millions)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Fixed maturity securities
|
|
|
$
|
348,787
|
|
|
$
|
(6,130
|
)
|
||
Equity securities
|
|
|
$
|
3,241
|
|
|
—
|
|
|||
Fair value option and trading securities
|
|
|
$
|
850
|
|
|
(9
|
)
|
|||
Mortgage loans:
|
|
|
|
|
|
||||||
Held-for-investment
|
|
|
$
|
57,851
|
|
|
(307
|
)
|
|||
Held-for-sale
|
|
|
225
|
|
|
—
|
|
||||
Mortgage loans, net
|
|
|
$
|
58,076
|
|
|
(307
|
)
|
|||
Policy loans
|
|
|
$
|
13,601
|
|
|
(145
|
)
|
|||
Short-term investments
|
|
|
$
|
12,664
|
|
|
(4
|
)
|
|||
Other invested assets
|
|
|
$
|
1,094
|
|
|
(1
|
)
|
|||
Cash and cash equivalents
|
|
|
$
|
11,376
|
|
|
—
|
|
|||
Accrued investment income
|
|
|
$
|
4,519
|
|
|
—
|
|
|||
Premiums, reinsurance and other receivables
|
|
|
$
|
4,546
|
|
|
(159
|
)
|
|||
Other assets
|
|
|
$
|
305
|
|
|
(6
|
)
|
|||
Net embedded derivatives within asset host contracts (2)
|
|
|
$
|
322
|
|
|
(21
|
)
|
|||
Total Assets
|
|
|
|
|
$
|
(6,782
|
)
|
||||
Liabilities: (3)
|
|
|
|
|
|
||||||
Policyholder account balances
|
|
|
$
|
140,069
|
|
|
$
|
635
|
|
||
Payables for collateral under securities loaned and other transactions
|
|
|
$
|
31,866
|
|
|
—
|
|
|||
Short-term debt
|
|
|
$
|
100
|
|
|
—
|
|
|||
Long-term debt
|
|
|
$
|
17,889
|
|
|
289
|
|
|||
Collateral financing arrangements
|
|
|
$
|
3,947
|
|
|
—
|
|
|||
Junior subordinated debt securities
|
|
|
$
|
3,738
|
|
|
122
|
|
|||
Other liabilities:
|
|
|
|
|
|
||||||
Trading liabilities
|
|
|
$
|
232
|
|
|
5
|
|
|||
Other
|
|
|
$
|
3,431
|
|
|
124
|
|
|||
Net embedded derivatives within liability host contracts (2)
|
|
|
$
|
382
|
|
|
488
|
|
|||
Total Liabilities
|
|
|
|
|
$
|
1,663
|
|
||||
Commitments:
|
|
|
|
|
|
||||||
Mortgage loan commitments
|
$
|
3,197
|
|
|
$
|
(14
|
)
|
|
$
|
16
|
|
Commitments to fund bank credit facilities, bridge loans and private corporate bond investments
|
$
|
975
|
|
|
$
|
(1
|
)
|
|
—
|
|
|
Total Commitments
|
|
|
|
|
$
|
16
|
|
||||
Derivative Instruments:
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
121,826
|
|
|
$
|
3,353
|
|
|
$
|
(981
|
)
|
Interest rate floors
|
$
|
63,064
|
|
|
$
|
131
|
|
|
(18
|
)
|
|
Interest rate caps
|
$
|
34,960
|
|
|
$
|
157
|
|
|
41
|
|
|
Interest rate futures
|
$
|
7,217
|
|
|
$
|
(4
|
)
|
|
9
|
|
|
Interest rate options
|
$
|
40,871
|
|
|
$
|
132
|
|
|
(154
|
)
|
|
Interest rate forwards
|
$
|
495
|
|
|
$
|
21
|
|
|
(33
|
)
|
|
Synthetic GICs
|
$
|
4,406
|
|
|
$
|
—
|
|
|
—
|
|
|
Foreign currency swaps
|
$
|
23,443
|
|
|
$
|
(569
|
)
|
|
(12
|
)
|
|
Foreign currency forwards
|
$
|
15,321
|
|
|
$
|
(157
|
)
|
|
3
|
|
|
Currency futures
|
$
|
1,334
|
|
|
$
|
2
|
|
|
—
|
|
|
Currency options
|
$
|
6,718
|
|
|
$
|
188
|
|
|
(4
|
)
|
|
Credit default swaps
|
$
|
12,898
|
|
|
$
|
89
|
|
|
—
|
|
|
Equity futures
|
$
|
5,430
|
|
|
$
|
26
|
|
|
—
|
|
|
Equity options
|
$
|
37,374
|
|
|
$
|
876
|
|
|
(90
|
)
|
|
Variance swaps
|
$
|
21,961
|
|
|
$
|
(383
|
)
|
|
3
|
|
|
Total rate of return swaps
|
$
|
3,794
|
|
|
$
|
(119
|
)
|
|
—
|
|
|
Total Derivative Instruments
|
|
|
|
|
$
|
(1,236
|
)
|
||||
Net Change
|
|
|
|
|
$
|
(6,339
|
)
|
(1)
|
Separate account assets and liabilities and contractholder-directed unit-linked investments and associated PABs, which are interest rate sensitive, are not included herein as any interest rate risk is borne by the contractholder. Mortgage loans and long-term debt exclude $
2.1 billion
and $
1.9 billion
, respectively, related to CSEs. See
Note 6
of the Notes to the Interim Condensed Consolidated Financial Statements for information regarding CSEs.
|
(2)
|
Embedded derivatives are recognized in the consolidated balance sheet in the same caption as the host contract.
|
(3)
|
Excludes $202.1 billion of liabilities, at carrying value, pursuant to insurance contracts reported within future policy benefits and other policy-related balances. These liabilities would economically offset a significant portion of the net change in fair value of our financial instruments resulting from a 10% increase in the yield curve.
|
|
September 30, 2013
|
||||||||||
|
Notional
Amount
|
|
Estimated
Fair
Value (1)
|
|
Assuming a
10% Increase
in the Foreign
Exchange Rate
|
||||||
|
(In millions)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Fixed maturity securities
|
|
|
$
|
348,787
|
|
|
$
|
(8,304
|
)
|
||
Equity securities
|
|
|
$
|
3,241
|
|
|
(98
|
)
|
|||
Fair value option and trading securities
|
|
|
$
|
850
|
|
|
(7
|
)
|
|||
Mortgage loans:
|
|
|
|
|
|
||||||
Held-for-investment
|
|
|
$
|
57,851
|
|
|
(605
|
)
|
|||
Held-for-sale
|
|
|
225
|
|
|
—
|
|
||||
Mortgage loans, net
|
|
|
$
|
58,076
|
|
|
(605
|
)
|
|||
Policy loans
|
|
|
$
|
13,601
|
|
|
(170
|
)
|
|||
Short-term investments
|
|
|
$
|
12,664
|
|
|
(235
|
)
|
|||
Other invested assets
|
|
|
$
|
1,094
|
|
|
(101
|
)
|
|||
Cash and cash equivalents
|
|
|
$
|
11,376
|
|
|
(373
|
)
|
|||
Accrued investment income
|
|
|
$
|
4,519
|
|
|
(82
|
)
|
|||
Premiums, reinsurance and other receivables
|
|
|
$
|
4,546
|
|
|
(13
|
)
|
|||
Other assets
|
|
|
$
|
305
|
|
|
(7
|
)
|
|||
Net embedded derivatives within asset host contracts (2)
|
|
|
$
|
322
|
|
|
(13
|
)
|
|||
Total Assets
|
|
|
|
|
$
|
(10,008
|
)
|
||||
Liabilities: (3)
|
|
|
|
|
|
||||||
Policyholder account balances
|
|
|
$
|
140,069
|
|
|
$
|
2,538
|
|
||
Payables for collateral under securities loaned and other transactions
|
|
|
$
|
31,866
|
|
|
128
|
|
|||
Long-term debt
|
|
|
$
|
17,889
|
|
|
136
|
|
|||
Other liabilities
|
|
|
$
|
3,431
|
|
|
10
|
|
|||
Net embedded derivatives within liability host contracts (2)
|
|
|
$
|
382
|
|
|
178
|
|
|||
Total Liabilities
|
|
|
|
|
$
|
2,990
|
|
||||
Derivative Instruments:
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
121,826
|
|
|
$
|
3,353
|
|
|
$
|
(34
|
)
|
Interest rate floors
|
$
|
63,064
|
|
|
$
|
131
|
|
|
—
|
|
|
Interest rate caps
|
$
|
34,960
|
|
|
$
|
157
|
|
|
—
|
|
|
Interest rate futures
|
$
|
7,217
|
|
|
$
|
(4
|
)
|
|
—
|
|
|
Interest rate options
|
$
|
40,871
|
|
|
$
|
132
|
|
|
(7
|
)
|
|
Interest rate forwards
|
$
|
495
|
|
|
$
|
21
|
|
|
—
|
|
|
Synthetic GICs
|
$
|
4,406
|
|
|
$
|
—
|
|
|
—
|
|
|
Foreign currency swaps
|
$
|
23,443
|
|
|
$
|
(569
|
)
|
|
573
|
|
|
Foreign currency forwards
|
$
|
15,321
|
|
|
$
|
(157
|
)
|
|
104
|
|
|
Currency futures
|
$
|
1,334
|
|
|
$
|
2
|
|
|
(116
|
)
|
|
Currency options
|
$
|
6,718
|
|
|
$
|
188
|
|
|
320
|
|
|
Credit default swaps
|
$
|
12,898
|
|
|
$
|
89
|
|
|
—
|
|
|
Equity futures
|
$
|
5,430
|
|
|
$
|
26
|
|
|
2
|
|
|
Equity options
|
$
|
37,374
|
|
|
$
|
876
|
|
|
(39
|
)
|
|
Variance swaps
|
$
|
21,961
|
|
|
$
|
(383
|
)
|
|
1
|
|
|
Total rate of return swaps
|
$
|
3,794
|
|
|
$
|
(119
|
)
|
|
—
|
|
|
Total Derivative Instruments
|
|
|
|
|
$
|
804
|
|
||||
Net Change
|
|
|
|
|
$
|
(6,214
|
)
|
(1)
|
Does not necessarily represent those financial instruments solely subject to foreign currency exchange rate risk. Separate account assets and liabilities and contractholder-directed unit-linked investments and associated PABs, which are foreign currency exchange rate sensitive, are not included herein as any foreign currency exchange rate risk is borne by the contractholder. Mortgage loans and long-term debt exclude $
2.1 billion
and $
1.9 billion
, respectively, related to CSEs. See
Note 6
of the Notes to the Interim Condensed Consolidated Financial Statements for information regarding CSEs.
|
(2)
|
Embedded derivatives are recognized in the consolidated balance sheet in the same caption as the host contract.
|
(3)
|
Excludes $202.1 billion of liabilities, at carrying value, pursuant to insurance contracts reported within future policy benefits and other policy-related balances. These liabilities would economically offset a significant portion of the net change in fair value of our financial instruments resulting from a 10% increase in the foreign currency exchange rates.
|
|
September 30, 2013
|
||||||||||
|
Notional
Amount
|
|
Estimated
Fair
Value (1)
|
|
Assuming a
10% Increase
in Equity
Prices
|
||||||
|
(In millions)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Equity securities
|
|
|
$
|
3,241
|
|
|
$
|
324
|
|
||
Net embedded derivatives within asset host contracts (2)
|
|
|
$
|
322
|
|
|
(18
|
)
|
|||
Total Assets
|
|
|
|
|
$
|
306
|
|
||||
Liabilities:
|
|
|
|
|
|
||||||
Policyholder account balances
|
|
|
$
|
140,069
|
|
|
$
|
—
|
|
||
Net embedded derivatives within liability host contracts (2)
|
|
|
$
|
382
|
|
|
677
|
|
|||
Total Liabilities
|
|
|
|
|
$
|
677
|
|
||||
Derivative Instruments:
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
121,826
|
|
|
$
|
3,353
|
|
|
$
|
—
|
|
Interest rate floors
|
$
|
63,064
|
|
|
$
|
131
|
|
|
—
|
|
|
Interest rate caps
|
$
|
34,960
|
|
|
$
|
157
|
|
|
—
|
|
|
Interest rate futures
|
$
|
7,217
|
|
|
$
|
(4
|
)
|
|
—
|
|
|
Interest rate options
|
$
|
40,871
|
|
|
$
|
132
|
|
|
—
|
|
|
Interest rate forwards
|
$
|
495
|
|
|
$
|
21
|
|
|
—
|
|
|
Synthetic GICs
|
$
|
4,406
|
|
|
$
|
—
|
|
|
—
|
|
|
Foreign currency swaps
|
$
|
23,443
|
|
|
$
|
(569
|
)
|
|
—
|
|
|
Foreign currency forwards
|
$
|
15,321
|
|
|
$
|
(157
|
)
|
|
—
|
|
|
Currency futures
|
$
|
1,334
|
|
|
$
|
2
|
|
|
—
|
|
|
Currency options
|
$
|
6,718
|
|
|
$
|
188
|
|
|
—
|
|
|
Credit default swaps
|
$
|
12,898
|
|
|
$
|
89
|
|
|
—
|
|
|
Equity futures
|
$
|
5,430
|
|
|
$
|
26
|
|
|
(446
|
)
|
|
Equity options
|
$
|
37,374
|
|
|
$
|
876
|
|
|
(336
|
)
|
|
Variance swaps
|
$
|
21,961
|
|
|
$
|
(383
|
)
|
|
12
|
|
|
Total rate of return swaps
|
$
|
3,794
|
|
|
$
|
(119
|
)
|
|
(387
|
)
|
|
Total Derivative Instruments
|
|
|
|
|
$
|
(1,157
|
)
|
||||
Net Change
|
|
|
|
|
$
|
(174
|
)
|
(1)
|
Does not necessarily represent those financial instruments solely subject to equity price risk. Additionally, separate account assets and liabilities and contractholder-directed unit-linked investments and associated PABs, which are equity market sensitive, are not included herein as any equity market risk is borne by the contractholder.
|
(2)
|
Embedded derivatives are recognized in the consolidated balance sheet in the same caption as the host contract.
|
•
|
Loss of key personnel or higher than expected employee attrition rates could adversely affect the performance of the acquired business and our ability to integrate it successfully.
|
•
|
Customers of the acquired business may reduce, delay or defer decisions concerning their use of its products and services as a result of the acquisition or uncertainty related to the consummation of the acquisition, including, for example, potential unfamiliarity with the MetLife brand in regions where we did not have a market presence prior to the acquisition.
|
•
|
If the acquired business relies upon independent distributors to distribute its products, these distributors may not continue to generate the same volume of business for us after the acquisition. Independent distributors may reexamine the scope of their relationship with the acquired business or us as a result of the acquisition and decide to curtail or eliminate distribution of our products.
|
•
|
Integrating acquired operations with our existing operations may require us to coordinate geographically separated organizations, address possible differences in corporate culture and management philosophies, merge financial processes and risk and compliance procedures, combine separate information technology platforms and integrate operations that were previously closely tied to the former parent of the acquired business or other service providers.
|
•
|
In cases where we or an acquired business operates in certain markets through joint ventures, the acquisition may affect the continued success and prospects of the joint venture. Our ability to exercise management control or influence over these joint venture operations and our investment in them will depend on the continued cooperation between the joint venture participants and on the terms of the joint venture agreements, which allocate control among the joint venture participants. We may face financial or other exposure in the event that any of these joint venture partners fail to Meet their obligations under the joint venture, encounter financial difficulty or elect to alter, modify or terminate the relationship.
|
•
|
We may incur significant costs in connection with any acquisition and the related integration. The costs and liabilities actually incurred in connection with an acquisition and subsequent integration process may exceed those anticipated.
|
Period
|
|
(a) Total Number
of Shares
Purchased (1)
|
|
(b) Average Price
Paid per Share
|
|
(c) Total Number
of Shares
Purchased as Part
of Publicly
Announced Plans
or Programs
|
|
(d) Maximum Number
(or Approximate
Dollar Value) of
Shares that May Yet
Be Purchased Under the
Plans or Programs (2)
|
|||||
July 1 — July 31, 2013
|
|
2,656
|
|
|
$
|
46.46
|
|
|
—
|
|
$
|
1,260,735,127
|
|
August 1 — August 31, 2013
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
$
|
1,260,735,127
|
|
September 1 — September 30, 2013
|
|
16,003
|
|
|
$
|
47.49
|
|
|
—
|
|
$
|
1,260,735,127
|
|
(1)
|
During the periods July 1 through July 31, 2013 and September 1 through
September 30, 2013
, separate account and other affiliates of MetLife, Inc. purchased
2,656
shares and
16,003
shares, respectively, of common stock on the open market in nondiscretionary transactions to rebalance index funds. Except as disclosed above, there were no shares of common stock which were repurchased by the Company.
|
(2)
|
At
September 30, 2013
, MetLife, Inc. had
$1.3 billion
remaining under its common stock repurchase program authorizations. In April 2008, MetLife, Inc.’s Board of Directors authorized an additional $1.0 billion common stock repurchase program, which will begin after the completion of the January 2008 $1.0 billion common stock repurchase program, of which $261 million remained outstanding at
September 30, 2013
. Under these authorizations, MetLife, Inc. may purchase its common stock from the MetLife Policyholder Trust, in the open market (including pursuant to the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934) and in privately negotiated transactions. Any future common stock repurchases will be dependent upon several factors, including our capital position, liquidity, financial strength and credit ratings, general market conditions, the market price of MetLife, Inc.’s common stock compared to management’s assessment of the stock’s underlying value, as well as other legal and accounting factors. See
“Risk Factors — Capital-Related Risks — We Have Been, and May Continue to be, Prevented from Repurchasing Our Stock and Paying Dividends at the Level We Wish as a Result of Regulatory Restrictions and Restrictions Under the Terms of Certain of Our Securities” in t
he 2012 Annual Report and Note 16 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report.
|
Exhibit
No.
|
|
Description
|
3.1
|
|
Amended and Restated Certificate of Incorporation of MetLife, Inc. (Incorporated by reference to Exhibit 3.1 to MetLife, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (the “2011 Annual Report”)).
|
3.2
|
|
Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of MetLife, Inc., filed with the Secretary of State of Delaware on April 7, 2000. (Incorporated by reference to Exhibit 3.2 to the 2011 Annual Report).
|
3.3
|
|
Certificate of Designations of Floating Rate Non-Cumulative Preferred Stock, Series A, of MetLife, Inc., filed with the Secretary of State of Delaware on June 10, 2005. (Incorporated by reference to Exhibit 3.3 to the 2011 Annual Report).
|
3.4
|
|
Certificate of Designations of 6.50% Non-Cumulative Preferred Stock, Series B, of MetLife, Inc., filed with the Secretary of State of Delaware on June 14, 2005. (Incorporated by reference to Exhibit 3.4 to the 2011 Annual Report).
|
3.5
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of MetLife, Inc., dated April 29, 2011. (Incorporated by reference to Exhibit 3.6 to the 2011 Annual Report).
|
3.6
|
|
Certificate of Retirement of Series B Contingent Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock of MetLife, Inc., filed with the Secretary of State of Delaware on November 5, 2013.
|
4.1
|
|
Form of security certificate representing the 4.368% Series D Senior Debentures. (Incorporated by reference to Exhibit 4.1 to MetLife, Inc.’s Current Report on Form 8-K dated September 10, 2013).
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
|
XBRL Instance Document.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
METLIFE, INC.
|
||
|
|
|
By:
|
|
/s/ Peter M. Carlson
|
|
|
Name: Peter M. Carlson
Title: Executive Vice President
and Chief Accounting Officer
(Authorized Signatory and Principal
Accounting Officer)
|
Exhibit
No. |
|
Description
|
3.1
|
|
Amended and Restated Certificate of Incorporation of MetLife, Inc. (Incorporated by reference to Exhibit 3.1 to MetLife, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (the “2011 Annual Report”)).
|
3.2
|
|
Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of MetLife, Inc., filed with the Secretary of State of Delaware on April 7, 2000. (Incorporated by reference to Exhibit 3.2 to the 2011 Annual Report).
|
3.3
|
|
Certificate of Designations of Floating Rate Non-Cumulative Preferred Stock, Series A, of MetLife, Inc., filed with the Secretary of State of Delaware on June 10, 2005. (Incorporated by reference to Exhibit 3.3 to the 2011 Annual Report).
|
3.4
|
|
Certificate of Designations of 6.50% Non-Cumulative Preferred Stock, Series B, of MetLife, Inc., filed with the Secretary of State of Delaware on June 14, 2005. (Incorporated by reference to Exhibit 3.4 to the 2011 Annual Report).
|
3.5
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of MetLife, Inc., dated April 29, 2011. (Incorporated by reference to Exhibit 3.6 to the 2011 Annual Report).
|
3.6
|
|
Certificate of Retirement of Series B Contingent Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock of MetLife, Inc., filed with the Secretary of State of Delaware on November 5, 2013.
|
4.1
|
|
Form of security certificate representing the 4.368% Series D Senior Debentures. (Incorporated by reference to Exhibit 4.1 to MetLife, Inc.’s Current Report on Form 8-K dated September 10, 2013).
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
|
XBRL Instance Document.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
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;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
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.
|
/s/ Steven A. Kandarian
|
Steven A. Kandarian
Chairman, President and
Chief Executive Officer
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
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.
|
/s/ John C. R. Hele
|
John C. R. Hele
Executive Vice President and
Chief Financial Officer
|
/s/ Steven A. Kandarian
|
Steven A. Kandarian
Chairman, President and
Chief Executive Officer
|
/s/ John C. R. Hele
|
John C. R. Hele
Executive Vice President and
Chief Financial Officer
|