METROPOLITAN LIFE INSURANCE CO, 10-Q filed on 5/12/2020
Quarterly Report
v3.20.1
Document and Entity Information - $ / shares
 3 Months Ended
Mar. 31, 2020
May 12, 2020
Cover [Abstract]    
Document Type 10-Q  
Entity Registrant Name Metropolitan Life Insurance Co  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2020  
Document Transition Report false  
Entity File Number 000-55029  
Entity Incorporation, State or Country Code NY  
Entity Tax Identification Number 13-5581829  
Entity Address, Address Line One 200 Park Avenue,  
Entity Address, City or Town New York,  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10166-0188  
City Area Code 212  
Local Phone Number 578-9500  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Central Index Key 0000937834  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   494,466,664
Amendment Flag false  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q1  
Current Fiscal Year End Date --12-31  
Entity Listing, Par Value Per Share $ 0.01  
v3.20.1
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Investments:    
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $159,542 and $154,397, respectively; allowance for credit loss of $50 and $0, respectively) $ 170,882 $ 169,564
Mortgage loans (net of allowance for credit loss of $417 and $289, respectively; includes $198 and $210, respectively, relating to variable interest entities; includes $180 and $188, respectively, under the fair value option and $0 and $59, respectively, of mortgage loans held-for-sale) 66,041 65,549
Policy loans 6,103 6,100
Real estate and real estate joint ventures (includes $1,410 and $1,378, respectively, relating to variable interest entities; and $144 and $127, respectively, under the fair value option) 6,859 6,659
Other limited partnership interests 5,242 4,954
Short-term investments at estimated fair value 4,274 1,883
Other invested assets (includes $1,050 and $1,085, respectively, of leveraged and direct financing leases and $95 and $94, respectively, relating to variable interest entities) 24,230 16,979
Total investments 283,631 271,688
Cash and cash equivalents, principally at estimated fair value (includes $11 and $5, respectively, relating to variable interest entities) 14,372 8,927
Accrued investment income (includes $1 and $1, respectively, relating to variable interest entities) 2,359 1,987
Premiums, reinsurance and other receivables (includes $2 and $3, respectively, relating to variable interest entities) 23,384 22,435
Deferred policy acquisition costs and value of business acquired 3,395 3,453
Other assets (includes $2 and $2, respectively, relating to variable interest entities) 4,432 4,460
Separate account assets 111,541 117,867
Total assets 443,114 430,817
Liabilities    
Future policy benefits 127,741 128,304
Policyholder account balances 95,116 91,708
Other policy-related balances 7,755 7,732
Policyholder dividends payable 495 495
Policyholder dividend obligation 1,677 2,020
Payables for collateral under securities loaned and other transactions 27,883 20,365
Short-term debt 127 128
Long-term debt (includes $5 and $5, respectively, at estimated fair value, relating to variable interest entities) 1,626 1,548
Current income tax payable 413 388
Deferred income tax liability 2,598 1,568
Other liabilities 29,219 26,082
Separate account liabilities 111,541 117,867
Total liabilities 406,191 398,205
Contingencies, Commitments and Guarantees (Note 12)
Metropolitan Life Insurance Company stockholder’s equity:    
Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding 5 5
Additional paid-in capital 12,456 12,455
Retained earnings 12,986 9,943
Accumulated other comprehensive income (loss) (AOCI) 11,291 10,025
Total Metropolitan Life Insurance Company stockholder’s equity 36,738 32,428
Noncontrolling interests 185 184
Total equity 36,923 32,612
Total liabilities and equity $ 443,114 $ 430,817
v3.20.1
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Assets    
Amortized cost of fixed maturity securities available-for-sale $ 159,542 $ 154,397
Amortized cost of fixed maturity securities valuation allowances 50 0
Mortgage loans valuation allowances 417 289
Mortgage Loans on Real Estate, Commercial and Consumer, Net 66,041 65,549
Mortgage loans held-for-sale 0 59
Real estate and real estate joint ventures relating to variable interest entities 6,859 6,659
Real estate held for sale 144 127
Other Invested Assets - Leveraged and Direct Financing Leases 1,050 1,085
Other invested assets relating to variable interest entities 24,230 16,979
Cash and cash equivalents relating to variable interest entities 14,372 8,927
Accrued investment income relating to variable interest entities 2,359 1,987
Premiums, reinsurance and other receivables relating to variable interest entities 23,384 22,435
Other assets relating to variable interest entities $ 4,432 $ 4,460
Metropolitan Life Insurance Company stockholder’s equity:    
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, shares issued 494,466,664 494,466,664
Common stock, shares outstanding 494,466,664 494,466,664
Residential mortgage loans - FVO    
Assets    
Mortgage Loans on Real Estate, Commercial and Consumer, Net $ 180 $ 188
Variable Interest Entity, Primary Beneficiary    
Assets    
Mortgage Loans on Real Estate, Commercial and Consumer, Net 198 210
Real estate and real estate joint ventures relating to variable interest entities 1,410 1,378
Other invested assets relating to variable interest entities 95 94
Cash and cash equivalents relating to variable interest entities 11 5
Accrued investment income relating to variable interest entities 1 1
Premiums, reinsurance and other receivables relating to variable interest entities 2 3
Other assets relating to variable interest entities 2 2
Long-term Debt and Lease Obligation, Including Current Maturities $ 5 $ 5
v3.20.1
Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Revenues    
Premiums $ 5,248 $ 5,052
Universal life and investment-type product policy fees 528 503
Net investment income 2,644 2,645
Other revenues 373 401
Net investment gains (losses) (182) (54)
Net derivative gains (losses) 3,555 (310)
Total revenues 12,166 8,237
Expenses    
Policyholder benefits and claims 5,679 5,662
Interest credited to policyholder account balances 611 662
Policyholder dividends 248 257
Other expenses 1,291 1,148
Total expenses 7,829 7,729
Income (loss) before provision for income tax 4,337 508
Provision for income tax expense (benefit) 790 0
Net income (loss) 3,547 508
Less: Net income (loss) attributable to noncontrolling interests (2) 1
Net income (loss) attributable to Metropolitan Life Insurance Company 3,549 507
Comprehensive income (loss) 4,813 3,446
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax (2) 1
Comprehensive income (loss) attributable to Metropolitan Life Insurance Company $ 4,815 $ 3,445
v3.20.1
Consolidated Statements of Equity (Unaudited) - USD ($)
$ in Millions
Total
Common Stock
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Total Metropolitan Life Insurance Company Stockholder’s Equity
Noncontrolling Interests
Cumulative Effect, Period of Adoption, Adjustment [Member]
Cumulative Effect, Period of Adoption, Adjustment [Member]
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment [Member]
Accumulated Other Comprehensive Income (Loss)
Cumulative Effect, Period of Adoption, Adjustment [Member]
Total Metropolitan Life Insurance Company Stockholder’s Equity
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Common Stock
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Additional Paid-in Capital
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Retained Earnings
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Accumulated Other Comprehensive Income (Loss)
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Total Metropolitan Life Insurance Company Stockholder’s Equity
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Noncontrolling Interests
Beginning Balance at Dec. 31, 2018 $ 25,727 $ 5 $ 12,450 $ 9,512 $ 3,562 $ 25,529 $ 198 $ 95 $ 78 $ 17 $ 95 $ 25,822 $ 5 $ 12,450 $ 9,590 $ 3,579 $ 25,624 $ 198
Capital contributions from MetLife, Inc. 1   1     1                        
Dividends to MetLife, Inc. (2,146)     (2,146)   (2,146)                        
Change in equity of noncontrolling interests (4)         0 (4)                      
Net income (loss) 508     507   507 1                      
Other comprehensive income (loss), net of income tax 2,938       2,938 2,938                        
Ending Balance at Mar. 31, 2019 27,119 5 12,451 7,951 6,517 26,924 195                      
Beginning Balance at Dec. 31, 2019 32,612 5 12,455 9,943 10,025 32,428 184 $ (113) $ (113)   $ (113) $ 32,499 $ 5 $ 12,455 $ 9,830 $ 10,025 $ 32,315 $ 184
Capital contributions from MetLife, Inc. 1   1     1                        
Dividends to MetLife, Inc. (393)     (393)   (393)                        
Change in equity of noncontrolling interests 3         0 3                      
Net income (loss) 3,547     3,549   3,549 (2)                      
Other comprehensive income (loss), net of income tax 1,266       1,266 1,266                        
Ending Balance at Mar. 31, 2020 $ 36,923 $ 5 $ 12,456 $ 12,986 $ 11,291 $ 36,738 $ 185                      
v3.20.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Statement of Cash Flows [Abstract]    
Net cash provided by (used in) operating activities $ 766 $ 1,191
Cash flows from investing activities    
Sales, maturities and repayments of fixed maturity securities available-for-sale 10,343 14,382
Sales, maturities and repayments of equity securities 58 47
Sales, maturities and repayments of mortgage loans 2,410 1,497
Sales, maturities and repayments of real estate and real estate joint ventures 41 83
Sales, maturities and repayments of other limited partnership interests 115 158
Purchases of fixed maturity securities available-for-sale (14,777) (12,900)
Purchases of equity securities (28) (9)
Purchases of mortgage loans (3,005) (3,637)
Purchases of real estate and real estate joint ventures (293) (278)
Purchases of other limited partnership interests (226) (233)
Cash received in connection with freestanding derivatives 3,762 579
Cash paid in connection with freestanding derivatives (850) (575)
Net change in policy loans (3) 7
Net change in short-term investments (2,399) (954)
Net change in other invested assets 33 9
Net change in property, equipment and leasehold improvements 5 (7)
Other, net 12 1
Net cash provided by (used in) investing activities (4,802) (1,830)
Cash flows from financing activities    
Policyholder account balances: Deposits 20,246 18,826
Policyholder account balances: Withdrawals (17,837) (17,928)
Net change in payables for collateral under securities loaned and other transactions 7,518 (158)
Long-term debt issued 78 0
Long-term debt repaid (5) (10)
Financing element on certain derivative instruments and other derivative related transactions, net (127) (30)
Dividends paid to MetLife, Inc. (393) (1,400)
Other, net 1 (6)
Net cash provided by (used in) financing activities 9,481 (706)
Effect of change in foreign currency exchange rates on cash and cash equivalents balances 0 1
Change in cash and cash equivalents 5,445 (1,344)
Cash and cash equivalents, beginning of period 8,927 6,882
Cash and cash equivalents, end of period 14,372 5,538
Supplemental disclosures of cash flow information    
Net cash paid for Interest 11 12
Net cash paid (received) for Income tax 8 12
Non-cash transactions:    
Capital contributions from MetLife, Inc. 1 1
Dividends to MetLife, Inc. declared and unpaid 0 746
Operating lease liability associated with the recognition of right-of-use assets $ 0 $ 141
v3.20.1
Business, Basis of Presentation and Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business, Basis of Presentation and Summary of Significant Accounting Policies
1. Business, Basis of Presentation and Summary of Significant Accounting Policies
Business
Metropolitan Life Insurance Company and its subsidiaries (collectively, “MLIC” or the “Company”) is a provider of insurance, annuities, employee benefits and asset management and is organized into two segments: U.S. and MetLife Holdings. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. (MetLife, Inc., together with its subsidiaries and affiliates, “MetLife”).
Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain, including the novel coronavirus COVID-19 pandemic. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates.
The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2019 consolidated balance sheet data was derived from audited consolidated financial statements included in Metropolitan Life Insurance Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2019 Annual Report.
Consolidation
The accompanying interim condensed consolidated financial statements include the accounts of Metropolitan Life Insurance Company and its subsidiaries, as well as partnerships and joint ventures in which the Company has control, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated.
The Company uses the equity method of accounting or the fair value option (“FVO”) for real estate joint ventures and other limited partnership interests (“investee”) when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings in net investment income on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period.
Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity.
Reclassifications
Certain amounts in the prior year periods’ interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform to the 2020 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements.
Summary of Significant Accounting Policies
The following are the Company’s significant accounting policies updated for the January 1, 2020 adoption of new accounting pronouncements related to investments.
Net Investment Income and Net Investment Gains (Losses)
Income from investments is reported within net investment income, unless otherwise stated herein. Gains and losses on sales of investments, intent-to-sell impairments, as well as provisions for credit loss in the allowance for credit loss (“ACL”) on fixed maturity securities available-for-sale (“AFS”), mortgage loans and investments in leases and subsequent changes in the ACL or for impairment losses on real estate investments, are reported within net investment gains (losses), unless otherwise stated herein. Accrued investment income is presented separately on the consolidated balance sheet and excluded from the carrying value of the related investments, primarily fixed maturity securities and mortgage loans.
Fixed Maturity Securities
The majority of the Company’s fixed maturity securities are classified as AFS and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income (loss) (“OCI”), net of policy-related amounts and deferred income taxes. All security transactions are recorded on a trade date basis. Sales of securities are determined on a specific identification basis.
Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premium and accretion of discount and is based on the estimated economic life of the securities, which for mortgage-backed and asset-backed securities considers the estimated timing and amount of prepayments of the underlying loans. See also Note 7 “— Fixed Maturity Securities AFS — Methodology for Amortization of Premium and Accretion of Discount on Structured Products” in the Notes to the Consolidated Financial Statements included in the 2019 Annual Report. The amortization of premium and accretion of discount also takes into consideration call and maturity dates.
The Company periodically evaluates its fixed maturity securities AFS for impairment. The assessment of whether impairments have occurred is based on management’s case-by-case evaluation of the underlying reasons for the decline in estimated fair value as described in Note 5 “— Fixed Maturity Securities Available-for-Sale — Evaluation of Fixed Maturity Securities AFS for Credit Loss.”
Prior to January 1, 2020, the Company applied other than temporary impairment (“OTTI”) guidance for securities in an unrealized loss position. An OTTI was recognized in earnings within net investment gains (losses) when it was anticipated that the amortized cost would not be recovered. When either: (i) the Company had the intent to sell the security, or (ii) it was more likely than not that the Company would be required to sell the security before recovery, the reduction of amortized cost and the OTTI recognized in earnings was the entire difference between the security’s amortized cost and estimated fair value. If neither of these conditions existed, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected was recognized as a reduction of amortized cost and an OTTI in earnings. If the estimated fair value was less than the present value of projected future cash flows expected to be collected, this portion of OTTI related to other-than-credit factors was recorded in OCI.
On January 1, 2020, the Company adopted accounting standards update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) using a modified retrospective approach. Under ASU 2016-13, for securities in an unrealized loss position, a credit loss is recognized in earnings within net investment gains (losses) when it is anticipated that the amortized cost will not be recovered. When either: (i) the Company has the intent to sell the security, or (ii) it is more likely than not that the Company will be required to sell the security before recovery, the reduction of amortized cost and the loss recognized in earnings is the entire difference between the security’s amortized cost and estimated fair value. If neither of these conditions exists, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected is recognized as a “credit loss” by establishing an ACL with a corresponding charge to earnings in net investment gains (losses). However, the ACL is limited by the amount that the fair value is less than the amortized cost. This limitation is known as the “fair value floor”. If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of the decline in value related to other-than-credit factors (“noncredit loss”) is recorded in OCI.
The new guidance also replaces the model for purchased credit impaired (“PCI”) fixed maturity securities AFS and financing receivables and requires the establishment of an ACL at acquisition, which is added to the purchase price to establish the initial amortized cost of the investment. Upon adoption, the replacement of the PCI model did not have a material impact on the Company’s interim condensed consolidated financial statements.
Mortgage Loans
ASU 2016-13 requires an ACL based on the expectation of lifetime credit loss on financing receivables carried at amortized cost, including, but not limited to, mortgage loans and leveraged and direct financing leases, as described in Note 5.
The Company disaggregates its mortgage loan investments into three portfolio segments: commercial, agricultural and residential. Also included in commercial mortgage loans are revolving line of credit loans collateralized by commercial properties. The accounting policies that are applicable to all portfolio segments are presented below and the accounting policies related to each of the portfolio segments are included in Note 5.
Mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, and are net of ACL. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premium and accretion of discount.
The Company ceases to accrue interest when the collection of interest is not considered probable, which is based on a current evaluation of the status of the borrower including the number of days past due. When a loan is placed on non-accrual status, uncollected past due accrued interest income that is considered uncollectible is charged-off against net investment income. Generally, the accrual of interest income resumes after all delinquent amounts are paid and management believes all future principal and interest payments will be collected. The Company records cash receipts on non-accruing loans in accordance with the loan agreement. The Company records charge-offs upon the realization of a credit loss, typically through foreclosure or after a decision is made to sell a loan, or for residential loans when, after considering the individual consumer’s financial status, management believes amounts are not collectible. Gain or loss upon charge-off is recorded, net of previously established ACL, in net investment gains (losses). Cash recoveries on principal amounts previously charged-off are generally recorded in net investment gains.
Also included in mortgage loans are residential mortgage loans for which the FVO was elected, and which are stated at estimated fair value. Changes in estimated fair value are recognized in net investment income.
Recent Accounting Pronouncements
Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of ASUs to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. The following tables provide a description of new ASUs issued by the FASB and the impact of the adoption on the Company’s consolidated financial statements.
Adoption of New Accounting Pronouncements
Except as noted below, the ASUs adopted by the Company effective January 1, 2020 did not have a material impact on its consolidated financial statements or disclosures.
Standard
Description
Effective Date and Method of Adoption
Impact on Financial Statements
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, with certain exceptions.

Effective for contract modifications made between March 12, 2020 and December 31, 2022

The new guidance will reduce the operational and financial impacts of contract modifications that replace a reference rate, such as London InterBank Offered Rate (LIBOR), affected by reference rate reform. The adoption of the new guidance did not have an impact on the Company’s interim condensed consolidated financial statements. The Company will continue to evaluate the impacts of reference rate reform on contract modifications and hedging relationships through December 31, 2022.
ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
The new guidance simplifies the former two-step goodwill impairment test by eliminating Step 2 of the test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The new guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any.
January 1, 2020, the Company adopted, using a prospective approach.
The adoption of the new guidance reduced the complexity involved with the evaluation of goodwill for impairment. The impact of the new guidance will depend on the outcomes of future goodwill impairment tests.
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as clarified and amended by ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses; ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments; ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief; and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses
This new guidance requires an ACL based on the expectation of lifetime credit loss on financing receivables carried at amortized cost, including, but not limited to, mortgage loans, premium receivables, reinsurance receivables and leveraged and direct financing leases.

The former model for OTTI on fixed maturity securities AFS has been modified and requires the recording of an ACL instead of a reduction of the amortized cost. Any improvements in expected future cash flows will no longer be reflected as a prospective yield adjustment, but instead will be reflected as a reduction in the ACL. The new guidance also replaces the model for PCI fixed maturity securities AFS and financing receivables and requires the establishment of an ACL at acquisition, which is added to the purchase price to establish the initial amortized cost of the investment.

The new guidance also requires enhanced disclosures.
January 1, 2020 for substantially all financial assets, the Company adopted using a modified retrospective approach. For previously impaired fixed maturity securities AFS and certain fixed maturity securities AFS acquired with evidence of credit quality deterioration since origination, the Company adopted prospectively on January 1, 2020.
The adoption of this guidance resulted in a $113 million, net of income tax, decrease to retained earnings primarily related to the Company’s mortgage loan investments. The Company has included the required disclosures within Note 5.

Future Adoption of New Accounting Pronouncements
ASUs not listed below were assessed and either determined to be not applicable or are not expected to have a material impact on the Company’s consolidated financial statements or disclosures. ASUs issued but not yet adopted as of March 31, 2020 that are currently being assessed and may or may not have a material impact on the Company’s consolidated financial statements or disclosures are summarized in the table below.
Standard
Description
Effective Date and Method of Adoption
Impact on Financial Statements
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

The new guidance simplifies the accounting for income taxes by removing certain exceptions to the tax accounting guidance and providing clarification to other specific tax accounting guidance to eliminate variations in practice. Specifically, it removes the exceptions related to the a) incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, b) recognition of a deferred tax liability when foreign investment ownership changes from equity method investment to consolidated subsidiary and vice versa and c) use of interim period tax accounting for year-to-date losses that exceed anticipated losses. The guidance also simplifies the application of the income tax guidance for franchise taxes that are partially based on income and the accounting for tax law changes during interim periods, clarifies the accounting for transactions that result in a step-up in tax basis of goodwill, provides for the option to elect allocation of consolidated income taxes to entities disregarded by taxing authorities for their stand-alone reporting, and requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date.

January 1, 2021. The new guidance should be applied either on a retrospective, modified retrospective or prospective basis based on the items to which the amendments relate. Early adoption is permitted.

The Company has started its implementation efforts and is currently evaluating the impact of the new guidance on its consolidated financial statements.

ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, as amended by ASU 2019-09, Financial Services—Insurance (Topic 944): Effective Date
The new guidance (i) prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts, and requires assumptions for those liability valuations to be updated after contract inception, (ii) requires more market-based product guarantees on certain separate account and other account balance long-duration contracts to be accounted for at fair value, (iii) simplifies the amortization of deferred policy acquisition costs (“DAC”) for virtually all long-duration contracts, and (iv) introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. The amendments in ASU 2019-09 defer the effective date of the amendments in ASU 2018-12 for all entities.
January 1, 2022, to be applied retrospectively to January 1, 2020 (with early adoption permitted).
The implementation efforts of the Company and the evaluation of the impact of the new guidance are in progress. Given the nature and extent of the required changes to a significant portion of the Company’s operations, the adoption of this guidance is expected to have a material impact on its consolidated financial statements.
v3.20.1
Segment Information
 3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Segment Information
2. Segment Information
The Company is organized into two segments: U.S. and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other.
U.S.
The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The U.S. segment is organized into two businesses: Group Benefits and Retirement and Income Solutions (“RIS”).
•
The Group Benefits business offers life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, vision and accident & health coverages, as well as prepaid legal plans. This business also sells administrative services-only arrangements to some employers.
•
The RIS business offers a broad range of life and annuity-based insurance and investment products, including stable value and pension risk transfer products, institutional income annuities, tort settlements, and capital markets investment products, as well as solutions for funding postretirement benefits and company-, bank- or trust-owned life insurance.
MetLife Holdings
The MetLife Holdings segment consists of operations relating to products and businesses, previously included in MLIC’s former retail business, that the Company no longer actively markets, such as variable, universal, term and whole life insurance, variable, fixed and index-linked annuities, and long-term care insurance.
Corporate & Other
Corporate & Other contains various start-up, developing and run-off businesses. Also included in Corporate & Other are: the excess capital, as well as certain charges and activities, not allocated to the segments (including enterprise-wide strategic initiative restructuring charges), the Company’s ancillary non-U.S. operations, interest expense related to the majority of the Company’s outstanding debt, expenses associated with certain legal proceedings and income tax audit issues, and the elimination of intersegment amounts (which generally relate to affiliated reinsurance and intersegment loans, bearing interest rates commensurate with related borrowings).
Financial Measures and Segment Accounting Policies
Adjusted earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also the Company’s GAAP measure of segment performance and is reported below. Adjusted earnings should not be viewed as a substitute for net income (loss). The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business.
Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax.
The financial measures of adjusted revenues and adjusted expenses focus on the Company’s primary businesses principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under GAAP and other businesses that have been or will be sold or exited by MLIC but do not meet the discontinued operations criteria under GAAP and are referred to as divested businesses. Divested businesses also include the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that have been or will be sold or exited by MLIC that do not meet the criteria to be included in results of discontinued operations under GAAP. Adjusted revenues also excludes net investment gains (losses) and net derivative gains (losses).
The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues:
•
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”); and
•
Net investment income: (i) includes adjustments for earned income on derivatives 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) excludes post-tax adjusted earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iii) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP and (iv) includes distributions of profits from certain other limited partnership interests that were previously accounted for under the cost method, but are now accounted for at estimated fair value, where the change in estimated fair value is recognized in net investment gains (losses) under GAAP.
The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses:
•
Policyholder benefits and claims and policyholder dividends excludes: (i) amortization of basis adjustments associated with de-designated fair value hedges of future policy benefits, (ii) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (iii) amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass-through adjustments, (iv) benefits and hedging costs related to GMIBs (“GMIB costs”) and (v) market value adjustments associated with surrenders or terminations of contracts (“Market value adjustments”);
•
Interest credited to policyholder account balances includes adjustments for earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment;
•
Amortization of 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;
•
Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
•
Other expenses excludes: (i) noncontrolling interests, (ii) acquisition, integration and other costs, and (iii) goodwill impairments.
The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the impact related to the timing of certain tax credits, as well as certain tax reforms.
Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other, for the three months ended March 31, 2020 and 2019. The segment accounting policies are the same as those used to prepare the Company’s consolidated financial statements, except for adjusted earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below.
Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in MetLife’s and the Company’s business.
MetLife’s economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion of diversification benefits among risk types. MetLife’s management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards.
Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment income, net income (loss), or adjusted earnings.
Net investment income is based upon the actual results of each segment’s specifically identifiable investment portfolios adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs, (ii) time studies analyzing the amount of employee compensation costs incurred by each segment, and (iii) cost estimates included in the Company’s product pricing.
Three Months Ended March 31, 2020
 
U.S.
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
4,510

 
$
738

 
$
—

 
$
5,248

 
$
—

 
$
5,248

Universal life and investment-type product policy fees
 
262

 
244

 
—

 
506

 
22

 
528

Net investment income
 
1,634

 
1,166

 
(70
)
 
2,730

 
(86
)
 
2,644

Other revenues
 
214

 
26

 
133

 
373

 
—

 
373

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
(182
)
 
(182
)
Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
3,555

 
3,555

Total revenues
 
6,620

 
2,174

 
63

 
8,857

 
3,309

 
12,166

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
4,561

 
1,397

 
—

 
5,958

 
(31
)
 
5,927

Interest credited to policyholder account balances
 
442

 
173

 
—

 
615

 
(4
)
 
611

Capitalization of DAC
 
(14
)
 
4

 
—

 
(10
)
 
—

 
(10
)
Amortization of DAC and VOBA
 
14

 
79

 
—

 
93

 
10

 
103

Interest expense on debt
 
2

 
2

 
21

 
25

 
—

 
25

Other expenses
 
794

 
200

 
178

 
1,172

 
1

 
1,173

Total expenses
 
5,799

 
1,855

 
199

 
7,853

 
(24
)
 
7,829

Provision for income tax expense (benefit)
 
175

 
62

 
(147
)
 
90

 
700

 
790

Adjusted earnings
 
$
646

 
$
257

 
$
11

 
914

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
3,309

 
 
 
 
Total expenses
 
 
 
 
 
 
 
24

 
 
 
 
Provision for income tax (expense) benefit
 
 
 
 
 
 
 
(700
)
 
 
 
 
Net income (loss)
 
$
3,547

 
 
 
$
3,547


Three Months Ended March 31, 2019
 
U.S.
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
4,302

 
$
750

 
$
—

 
$
5,052

 
$
—

 
$
5,052

Universal life and investment-type product policy fees
 
264

 
217

 
—

 
481

 
22

 
503

Net investment income
 
1,638

 
1,139

 
(57
)
 
2,720

 
(75
)
 
2,645

Other revenues
 
204

 
63

 
134

 
401

 
—

 
401

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
(54
)
 
(54
)
Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
(310
)
 
(310
)
Total revenues
 
6,408

 
2,169

 
77

 
8,654

 
(417
)
 
8,237

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
4,438

 
1,398

 
—

 
5,836

 
83

 
5,919

Interest credited to policyholder account balances
 
487

 
178

 
—

 
665

 
(3
)
 
662

Capitalization of DAC
 
(15
)
 
3

 
—

 
(12
)
 
—

 
(12
)
Amortization of DAC and VOBA
 
14

 
47

 
—

 
61

 
(42
)
 
19

Interest expense on debt
 
3

 
2

 
22

 
27

 
—

 
27

Other expenses
 
723

 
200

 
191

 
1,114

 
—

 
1,114

Total expenses
 
5,650

 
1,828

 
213

 
7,691

 
38

 
7,729

Provision for income tax expense (benefit)
 
157

 
67

 
(128
)
 
96

 
(96
)
 
—

Adjusted earnings
 
$
601

 
$
274

 
$
(8
)
 
867

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
(417
)
 
 
 
 
Total expenses
 
 
 
 
 
 
 
(38
)
 
 
 
 
Provision for income tax (expense) benefit
 
 
 
 
 
 
 
96

 
 
 
 
Net income (loss)
 
$
508

 
 
 
$
508


The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:
 
March 31, 2020
 
December 31, 2019
 
(In millions)
U.S.
$
252,519

 
$
246,319

MetLife Holdings
153,301

 
156,327

Corporate & Other
37,294

 
28,171

Total
$
443,114

 
$
430,817
v3.20.1
Insurance
 3 Months Ended
Mar. 31, 2020
Insurance [Abstract]  
Insurance
3. Insurance
Guarantees
As discussed in Notes 1 and 3 of the Notes to the Consolidated Financial Statements included in the 2019 Annual Report, the Company issues directly and assumes through reinsurance variable annuity products with guaranteed minimum benefits. Guaranteed minimum accumulation benefits (“GMABs”), the non-life-contingent portion of guaranteed minimum withdrawal benefits (“GMWBs”) and certain non-life contingent portions of GMIBs are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 6.
The Company also issues other annuity contracts that apply a lower rate on funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize. These guarantees include benefits that are payable in the event of death, maturity or at annuitization. Certain other annuity contracts contain guaranteed annuitization benefits that may be above what would be provided by the current account value of the contract. Additionally, the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit.
Information regarding the Company’s guarantee exposure, which includes direct business, but excludes offsets from hedging or reinsurance, if any, was as follows at:
 
 
March 31, 2020
 
December 31, 2019
 
 
In the
Event of Death
 
At
Annuitization
 
In the
Event of Death
 
At
Annuitization
 
 
(Dollars in millions)
 
Annuity Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Variable Annuity Guarantees:
 
 
 
 
 
 
 
 
 
 
 
 
Total account value (1), (2)
 
$
42,277

 
 
$
18,200

 
 
$
49,207

 
 
$
21,472

 
Separate account value (1)
 
$
32,768

 
 
$
17,376

 
 
$
39,679

 
 
$
20,666

 
Net amount at risk
 
$
2,972

(3
)
 
$
1,035

(4
)
 
$
1,195

(3
)
 
$
524

(4
)
Average attained age of contractholders
 
68 years

 
 
66 years

 
 
68 years

 
 
66 years

 
Other Annuity Guarantees:
 
 
 
 
 
 
 
 
 
 
 
 
Total account value (1), (2)
 
N/A

 
 
$
142

 
 
N/A

 
 
$
143

 
Net amount at risk
 
N/A

 
 
$
77

(5
)
 
N/A

 
 
$
80

(5
)
Average attained age of contractholders
 
N/A

 
 
54 years

 
 
N/A

 
 
54 years

 
 
March 31, 2020
 
December 31, 2019
 
Secondary
Guarantees
 
Paid-Up
Guarantees
 
Secondary
Guarantees
 
Paid-Up
Guarantees
 
(Dollars in millions)
Universal and Variable Life Contracts:
 
 
 
 
 
 
 
Total account value (1), (2)
$
4,304

 
$
887

 
$
4,909

 
$
899

Net amount at risk (6)
$
41,387

 
$
5,782

 
$
41,385

 
$
5,884

Average attained age of policyholders
57 years

 
64 years

 
57 years

 
64 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 the contractholder’s investments in the general account and separate account, if applicable.
(3)
Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death.
(4)
Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved.
(5)
Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These amounts represent the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date.
(6)
Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.
Liabilities for Unpaid Claims and Claim Expenses
Rollforward of Claims and Claim Adjustment Expenses
Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:


Three Months
Ended
March 31,


2020

2019


(In millions)
Balance, beginning of period

$
13,140

 
$
12,590

Less: Reinsurance recoverables

1,525

 
1,497

Net balance, beginning of period

11,615

 
11,093

Incurred related to:

 
 
 
Current period

4,734

 
4,295

Prior periods (1)

(64
)
 
87

Total incurred

4,670

 
4,382

Paid related to:

 
 
 
Current period

(2,240
)
 
(1,931
)
Prior periods

(2,409
)
 
(2,201
)
Total paid

(4,649
)
 
(4,132
)
Net balance, end of period

11,636

 
11,343

Add: Reinsurance recoverables

1,661

 
1,537

Balance, end of period (included in future policy benefits and other policy-related balances)

$
13,297

 
$
12,880

__________________
(1)
For the three months ended March 31, 2020, claims and claim adjustment expenses associated with prior periods decreased due to favorable claims experience in the current period. For the three months ended March 31, 2019, claims and claim adjustment expenses associated with prior periods increased due to events incurred in prior periods but reported in the current period.
v3.20.1
Closed Block
 3 Months Ended
Mar. 31, 2020
Closed Block Disclosure [Abstract]  
Closed Block
4. Closed Block
On April 7, 2000 (the “Demutualization Date”), Metropolitan Life Insurance Company converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance approving Metropolitan Life Insurance Company’s plan of reorganization, as amended (the “Plan of Reorganization”). On the Demutualization Date, Metropolitan Life Insurance Company established a closed block for the benefit of holders of certain individual life insurance policies of Metropolitan Life Insurance Company.
Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides outside of the closed block, is based upon cumulative actual and expected earnings within the closed block. Accordingly, the Company’s net income continues to be sensitive to the actual performance of the closed block.
Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item.
Information regarding the closed block liabilities and assets designated to the closed block was as follows at:
 
 
March 31, 2020
 
December 31, 2019
 
 
(In millions)
Closed Block Liabilities
 
 
 
 
Future policy benefits
 
$
39,214

 
$
39,379

Other policy-related balances
 
340

 
423

Policyholder dividends payable
 
431

 
432

Policyholder dividend obligation
 
1,677

 
2,020

Deferred income tax liability
 
82

 
79

Other liabilities
 
169

 
81

Total closed block liabilities
 
41,913

 
42,414

Assets Designated to the Closed Block
 
 
 
 
Investments:
 
 
 
 
Fixed maturity securities available-for-sale, at estimated fair value
 
25,332

 
25,977

Mortgage loans
 
6,995

 
7,052

Policy loans
 
4,478

 
4,489

Real estate and real estate joint ventures
 
556

 
544

Other invested assets
 
934

 
416

Total investments
 
38,295

 
38,478

Cash and cash equivalents
 
148

 
448

Accrued investment income
 
427

 
419

Premiums, reinsurance and other receivables
 
67

 
75

Current income tax recoverable
 
90

 
91

Total assets designated to the closed block
 
39,027

 
39,511

Excess of closed block liabilities over assets designated to the closed block
 
2,886

 
2,903

AOCI:
 
 
 
 
Unrealized investment gains (losses), net of income tax
 
2,008

 
2,453

Unrealized gains (losses) on derivatives, net of income tax
 
314

 
97

Allocated to policyholder dividend obligation, net of income tax
 
(1,325
)
 
(1,596
)
Total amounts included in AOCI
 
997

 
954

Maximum future earnings to be recognized from closed block assets and liabilities
 
$
3,883

 
$
3,857


Information regarding the closed block policyholder dividend obligation was as follows:
 
 
Three Months
Ended
March 31, 2020
 
Year 
 Ended 
 December 31, 2019
 
 
(In millions)
Balance, beginning of period
 
$
2,020

 
$
428

Change in unrealized investment and derivative gains (losses)
 
(343
)
 
1,592

Balance, end of period
 
$
1,677

 
$
2,020


Information regarding the closed block revenues and expenses was as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
Revenues
 
 
 
 
Premiums
 
$
367

 
$
367

Net investment income
 
407

 
428

Net investment gains (losses)
 
(19
)
 
(1
)
Net derivative gains (losses)
 
26

 
3

Total revenues
 
781

 
797

Expenses
 
 
 
 
Policyholder benefits and claims
 
550

 
539

Policyholder dividends
 
219

 
228

Other expenses
 
27

 
29

Total expenses
 
796

 
796

Revenues, net of expenses before provision for income tax expense (benefit)
 
(15
)
 
1

Provision for income tax expense (benefit)
 
(3
)
 
—

Revenues, net of expenses and provision for income tax expense (benefit)
 
$
(12
)
 
$
1


Metropolitan Life Insurance Company charges the closed block with federal income taxes, state and local premium taxes and other state or local taxes, as well as investment management expenses relating to the closed block as provided in the Plan of Reorganization. Metropolitan Life Insurance Company also charges the closed block for expenses of maintaining the policies included in the closed block.
v3.20.1
Investments
 3 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Investments
5. Investments
Fixed Maturity Securities Available-for-Sale
Fixed Maturity Securities Available-for-Sale by Sector
The following table presents the fixed maturity securities AFS by sector. U.S. corporate and foreign corporate sectors include redeemable preferred stock. Residential mortgage-backed securities (“RMBS”) includes agency, prime, alternative and sub-prime mortgage-backed securities. Asset-backed securities (“ABS”) includes securities collateralized by corporate loans and consumer loans. Municipals includes taxable and tax-exempt revenue bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple commercial mortgage loans. RMBS, ABS and CMBS are collectively, “Structured Products.” In accordance with new guidance adopted January 1, 2020 regarding expected credit loss, securities that incurred a credit loss after December 31, 2019 and were still held as of March 31, 2020, are presented net of ACL. In accordance with previous guidance, both the temporary loss and OTTI loss are presented for securities that were in an unrealized loss position as of December 31, 2019.
 
March 31, 2020
 
December 31, 2019
 
Amortized
Cost
 

 
Gross Unrealized
 
Estimated
Fair
Value
 
Amortized
Cost
 
Gross Unrealized
 
Estimated
Fair
Value
 
ACL
 

Gains
 
Losses
 

Gains
 
Temporary
Losses
 
OTTI
Losses (1)
 
 
(In millions)
U.S. corporate
$
52,744

 
$
(44
)
 
$
4,839

 
$
1,704

 
$
55,835

 
$
52,446

 
$
6,236

 
$
223

 
$
—

 
$
58,459

U.S. government and agency
26,491

 
—

 
7,248

 
4

 
33,735

 
25,568

 
3,706

 
26

 
—

 
29,248

Foreign corporate
28,400

 
—

 
1,144

 
1,898

 
27,646

 
28,421

 
2,397

 
517

 
—

 
30,301

RMBS
23,297

 
—

 
1,285

 
329

 
24,253

 
21,476

 
1,324

 
59

 
(32
)
 
22,773

ABS
11,395

 
—

 
23

 
838

 
10,580

 
10,215

 
47

 
61

 
—

 
10,201

Municipals
6,830

 
—

 
1,491

 
28

 
8,293

 
6,419

 
1,450

 
13

 
—

 
7,856

CMBS
5,944

 
—

 
105

 
276

 
5,773

 
5,523

 
214

 
17

 
—

 
5,720

Foreign government
4,441

 
(6
)
 
509

 
177

 
4,767

 
4,329

 
724

 
47

 
—

 
5,006

Total fixed maturity securities AFS
$
159,542


$
(50
)

$
16,644


$
5,254


$
170,882


$
154,397


$
16,098


$
963


$
(32
)

$
169,564

__________________
(1)
Noncredit OTTI losses included in AOCI in an unrealized gain position are due to increases in estimated fair value subsequent to initial recognition of noncredit loss on such securities. See also “— Net Unrealized Investment Gains (Losses).”
Maturities of Fixed Maturity Securities AFS
The amortized cost net of ACL, and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at March 31, 2020:
 
Due in One
Year or Less
 
Due After
 One Year
Through
Five Years
 
Due After
Five Years
Through Ten
Years
 
Due After Ten Years
 
Structured
Products
 
Total Fixed
Maturity
Securities AFS
 
(In millions)
Amortized cost net of ACL
$
10,463

 
$
22,630

 
$
27,851

 
$
57,912

 
$
40,636

 
$
159,492

Estimated fair value
$
10,466

 
$
22,191

 
$
28,620

 
$
68,999

 
$
40,606

 
$
170,882


Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities AFS not due at a single maturity date have been presented in the year of final contractual maturity. Structured Products are shown separately, as they are not due at a single maturity.
Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector
The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position by sector and aggregated by length of time that the securities have been in a continuous unrealized loss position. Included in the table below are securities without an ACL as of March 31, 2020, in accordance with new guidance adopted January 1, 2020. Also included in the table below are all securities in an unrealized loss position as of December 31, 2019, in accordance with previous guidance.
 
March 31, 2020
 
December 31, 2019
 
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
 
(Dollars in millions)
U.S. corporate
$
14,778

 
$
1,569

 
$
357

 
$
130

 
$
2,036

 
$
77

 
$
1,304

 
$
146

U.S. government and agency
419

 
4

 
—

 
—

 
1,552

 
26

 
29

 
—

Foreign corporate
13,684

 
1,776

 
654

 
123

 
1,368

 
93

 
3,499

 
424

RMBS
4,718

 
314

 
197

 
16

 
1,479

 
15

 
524

 
12

ABS
7,248

 
591

 
2,251

 
247

 
2,428

 
13

 
3,778

 
48

Municipals
621

 
28

 
1

 
—

 
508

 
13

 
1

 
—

CMBS
2,824

 
250

 
156

 
26

 
857

 
5

 
212

 
12

Foreign government
1,313

 
132

 
154

 
42

 
149

 
6

 
215

 
41

Total fixed maturity securities AFS
$
45,605

 
$
4,664

 
$
3,770

 
$
584

 
$
10,377

 
$
248

 
$
9,562

 
$
683

Investment grade
$
37,895

 
$
3,403

 
$
3,470

 
$
448

 
$
9,288

 
$
190

 
$
8,233

 
$
530

Below investment grade
7,710

 
1,261

 
300

 
136

 
1,089

 
58

 
1,329

 
153

Total fixed maturity securities AFS
$
45,605

 
$
4,664

 
$
3,770

 
$
584

 
$
10,377

 
$
248

 
$
9,562

 
$
683

Total number of securities in an
unrealized loss position
4,708

 
 
 
458

 
 
 
1,059

 
 
 
802

 
 


Evaluation of Fixed Maturity Securities AFS for Credit Loss
Evaluation and Measurement Methodologies
Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (i) the extent to which the estimated fair value has been below amortized cost, (ii) adverse conditions specifically related to a security, an industry sector or sub-sector, or an economically depressed geographic area, adverse change in the financial condition of the issuer of the security, changes in technology, discontinuance of a segment of the business that may affect future earnings, and changes in the quality of credit enhancement, (iii) payment structure of the security and likelihood of the issuer being able to make payments, (iv) failure of the issuer to make scheduled interest and principal payments, (v) the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted natural resources, (vi) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers, (vii) with respect to Structured Products, changes in forecasted cash flows after considering the changes in the financial condition of the underlying loan obligors and quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security, (viii) changes in the rating of the security by a rating agency, and (ix) other subjective factors, including concentrations and information obtained from regulators.
The methodology and significant inputs used to determine the amount of credit loss are as follows:
•
The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security at the time of purchase for fixed-rate securities and the spot rate at the date of evaluation of credit loss for floating-rate securities.
•
When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall credit loss evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management’s single best estimate, the most likely outcome in a range of possible outcomes, after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; any private and public sector programs to restructure foreign government securities and municipals; and changes to the rating of the security or the issuer by rating agencies.
•
Additional considerations are made when assessing the unique features that apply to certain Structured Products including, but not limited to: the quality of underlying collateral, historical performance of the underlying loan obligors, historical rent and vacancy levels, changes in the financial condition of the underlying loan obligors, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, changes in the quality of credit enhancement and the payment priority within the tranche structure of the security.
With respect to securities that have attributes of debt and equity (“perpetual hybrid securities”), consideration is given in the credit loss analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments.
After the adoption of new guidance on January 1, 2020, in periods subsequent to the recognition of an initial ACL on a security, the Company reassesses credit loss quarterly. Subsequent increases or decreases in the expected cash flow from the security result in corresponding decreases or increases in the ACL which are recorded within net investment gains (losses); however, the previously recorded ACL is not reduced to an amount below zero. Full or partial write-offs are deducted from the ACL in the period the security, or a portion, is considered uncollectible. Recoveries of amounts previously written off are recorded to the ACL in the period received. When the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, any ACL is written off and the amortized cost is written down to estimated fair value through a charge within net investment gains (losses), which becomes the new amortized cost of the security.
In accordance with the previous guidance, methodologies to evaluate the recoverability of a security in an unrealized loss position were similar, except: (i) the length of time estimated fair value had been below amortized cost was considered for securities, and (ii) for non-functional currency denominated securities, the impact from weakening non-functional currencies on securities that were near maturity was considered in the evaluation. In addition, measurement methodologies were similar, except: (i) a fair value floor was not utilized to limit the credit loss recognized, (ii) the amortized cost of securities was adjusted for the OTTI to the expected recoverable amount and an ACL was not utilized, (iii) subsequent to a credit loss being recognized, increases in expected cash flows from the security did not result in an immediate increase in valuation recognized in earnings through net investment gains (losses) from reduction of the ACL instead such increases in value were recorded as unrealized gains in OCI, and (iv) in periods subsequent to the recognition of OTTI on a security, the Company accounted for the impaired security as if it had been purchased on the measurement date of the impairment; accordingly, the discount (or reduced premium) based on the new cost basis was accreted over the remaining term of the security in a prospective manner based on the amount and timing of estimated future cash flows.
Evaluation of Fixed Maturity Securities AFS in an Unrealized Loss Position
Gross unrealized losses on securities without an ACL increased $4.3 billion for the three months ended March 31, 2020 to $5.2 billion. The increase in gross unrealized losses for the three months ended March 31, 2020 was primarily attributable to widening credit spreads and movement in foreign currency exchange rates, partially offset by decreases in interest rates.
Gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater were $584 million at March 31, 2020, or 11% of the total gross unrealized losses on securities without an ACL.
Investment Grade Fixed Maturity Securities AFS
Of the $584 million of gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater, $448 million, or 77%, were related to 371 investment grade securities. Unrealized losses on investment grade securities are principally related to widening credit spreads since purchase and, with respect to fixed-rate securities, rising interest rates since purchase.
Below Investment Grade Fixed Maturity Securities AFS
Of the $584 million of gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater, $136 million, or 23%, were related to 87 below investment grade securities. Unrealized losses on below investment grade securities are principally related to U.S. and foreign corporate securities (primarily industrial and consumer), foreign government securities and ABS and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty, as well as with respect to fixed-rate securities, rising interest rates since purchase. Management evaluates U.S. corporate and foreign corporate securities based on factors such as expected cash flows, financial condition and near-term and long-term prospects of the issuers. Management evaluates foreign government securities based on factors impacting the issuers such as expected cash flows, financial condition of the issuers and any country-specific economic conditions or public sector programs to restructure foreign government securities. Management evaluates ABS based on actual and projected cash flows after considering the quality of underlying collateral, credit enhancements, expected prepayment speeds, current and forecasted loss severity, the payment terms of the underlying assets backing a particular security and the payment priority within the tranche structure of the security.
Current Period Evaluation
At March 31, 2020, with respect to securities in an unrealized loss position, the Company does not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost. Based on the Company’s current evaluation of its securities in an unrealized loss position without an ACL, the Company concluded that these securities had not incurred a credit loss and should not have an ACL at March 31, 2020.
Future provisions for credit loss will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), and changes in credit ratings and collateral valuation.
Rollforward of Allowance for Credit Loss for Fixed Maturity Securities AFS By Sector
The rollforward of ACL for fixed maturity securities AFS by sector is as follows:
 
U.S. Corporate
 
Foreign Government
 
Total
 
(In millions)
Three Months Ended March 31, 2020
 
 
 
 
 
Balance, beginning of period
$
—

 
$
—

 
$
—

Additions:
 
 
 
 
 
Securities for which credit loss was not previously recorded
(44
)
 
(6
)
 
(50
)
Balance, end of period
$
(44
)
 
$
(6
)
 
$
(50
)

Mortgage Loans
Mortgage Loans by Portfolio Segment
Mortgage loans are summarized as follows at:
 
March 31, 2020
 
December 31, 2019
 
Carrying
Value
 
% of
Total
 
Carrying
Value
 
% of
Total
 
(Dollars in millions)
Mortgage loans:
 
 
 
 
 
 
 
Commercial
$
37,845

 
57.3
 %
 
$
37,311

 
56.9
 %
Agricultural
15,497

 
23.4

 
15,705

 
23.9

Residential
12,936

 
19.6

 
12,575

 
19.2

Total amortized cost
66,278

 
100.3

 
65,591

 
100.0

Allowance for credit loss
(417
)
 
(0.6
)
 
(289
)
 
(0.4
)
Subtotal mortgage loans, net
65,861

 
99.7

 
65,302

 
99.6

Residential — FVO
180

 
0.3

 
188

 
0.3

Total mortgage loans held-for-investment, net
$
66,041

 
100.0
 %
 
$
65,490

 
99.9
 %
Mortgage loans held-for-sale
—


—


59


0.1

Total mortgage loans, net
$
66,041


100.0
 %

$
65,549


100.0
 %


Information on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on residential mortgage loans - FVO is presented in Note 7. The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis.
The amount of net discounts, included within total amortized cost, primarily attributable to residential mortgage loans was $873 million and $852 million at March 31, 2020 and December 31, 2019, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at March 31, 2020 and December 31, 2019 was $150 million and $155 million; $148 million and $176 million; and $85 million and $89 million, respectively.
Purchases of mortgage loans, primarily residential, were $1.0 billion and $1.3 billion for the three months ended March 31, 2020 and 2019, respectively.
Allowance for Credit Loss Rollforward by Portfolio Segment
The changes in the ACL, by portfolio segment, were as follows:

Three Months
Ended
March 31,
 
2020

2019
 
Commercial

Agricultural

Residential

Total

Commercial

Agricultural

Residential

Total
 
(In millions)
Balance, beginning of period
$
186


$
49


$
54


$
289


$
190


$
44


$
57


$
291

Adoption of new credit loss guidance
(87
)
 
32

 
154

 
99

 
—

 
—

 
—

 
—

Provision (release)
14


(5
)

23


32


4


1


1


6

Charge-offs, net of recoveries
—


—


(3
)

(3
)

—


—


(2
)

(2
)
Balance, end of period
$
113


$
76


$
228


$
417


$
194


$
45


$
56


$
295


Allowance for Credit Loss Methodology
After the adoption of new guidance on January 1, 2020, the Company records an allowance for expected credit loss in an amount that represents the portion of the amortized cost basis of mortgage loans that the Company does not expect to collect, resulting in mortgage loans being presented at the net amount expected to be collected. In determining the Company’s ACL, management: (i) pools mortgage loans that share similar risk characteristics, (ii) considers lifetime credit loss expected over the contractual term of its mortgage loans adjusted for expected prepayments and any extensions, and (iii) considers past events, current economic conditions and forecasts of future economic conditions. Each of the Company’s commercial, agricultural and residential mortgage loan portfolio segments are evaluated separately. The ACL is calculated for each mortgage loan portfolio segment based on inputs unique to each loan portfolio segment. On a quarterly basis, mortgage loans within a portfolio segment that share similar risk characteristics, such as internal risk ratings or consumer credit scores, are pooled for calculation of ACL. On an ongoing basis, mortgage loans with dissimilar risk characteristics (i.e., loans with significant declines in credit quality), collateral dependent mortgage loans (i.e., when the borrower is experiencing financial difficulty, including when foreclosure is reasonable possible or probable) and reasonably expected troubled debt restructurings (i.e., the Company grants concessions to borrower that is experiencing financial difficulties) are evaluated individually for credit loss. The ACL for loans evaluated individually are established using the same methodologies for all three portfolio segments. For example, the ACL for a collateral dependent loan is established as the excess of amortized cost over the estimated fair value of the loan’s underlying collateral, less selling cost when foreclosure is probable. Accordingly, the change in the estimated fair value of collateral dependent loans, which are evaluated individually for credit loss, is recorded as a change in the ACL which is recorded on a quarterly basis as a charge or credit to earnings in net investment gains (losses).
In accordance with the previous guidance, evaluation and measurement methodologies in determining the ACL were similar, except: (i) credit loss was recognized when incurred (when it was probable, based on current information and events, that all amounts due under the loan agreement would not be collected), (ii) pooling of loans with similar risk characteristics was permitted, but not required, (iii) forecasts of future economic conditions were not considered in the evaluation, (iv) measurement of the expected credit loss over the contractual term, or expected term, was not considered in the measurement, and (v) the credit loss for loans evaluated individually could also be determined using either discounted cash flows using the loans original effective interest rate or observable market prices.
Commercial and Agricultural Mortgage Loan Portfolio Segments
Commercial and agricultural mortgage loan ACL are calculated in a similar manner. Within each loan portfolio segment, commercial and agricultural, loans are pooled by internal risk rating. Estimated lifetime loss rates, which vary by internal risk rating, are applied to the amortized cost of each loan, excluding accrued investment income, on a quarterly basis to develop the ACL. Internal risk ratings are based on an assessment of the loan’s credit quality, which can change over time. The estimated lifetime loss rates are based on several loan portfolio segment-specific factors, including (i) the Company’s experience with defaults and loss severity, (ii) expected default and loss severity over the forecast period, (iii) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, (iv) loan specific characteristics including loan-to-value ratios, and (v) internal risk ratings. These evaluations are revised as conditions change and new information becomes available. The Company uses its several decades of historical default and loss severity experience which capture multiple economic cycles. The Company uses a forecast of economic assumptions for a two-year period for most of its commercial and agricultural mortgage loans, while a one-year period is used for loans originated in certain markets. After the applicable forecast period, the Company reverts to its historical loss experience using a straight-line basis over two years. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, recent loss and recovery trend experience as compared to historical loss and recovery experience, and loan specific characteristics including debt service coverage ratios. In estimating lifetime credit loss expected over the term of its commercial mortgage loans, the Company adjusts for expected prepayment and extension experience during the forecast period using historical prepayment and extension experience considering the expected position in the economic cycle and the loan profile (i.e., floating rate, shorter-term fixed rate and longer-term fixed rate) and after the forecast period using long-term historical prepayment experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. In estimating lifetime credit loss expected over the term of its agricultural mortgage loans, the Company’s experience is much less sensitive to the position in the economic cycle and by loan profile; accordingly historical prepayment experience is used, while extension terms are not prevalent with the Company’s agricultural mortgage loans.
Commercial mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt service coverage ratios and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. Agricultural mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios and borrower creditworthiness, as well as reviews on a geographic and property-type basis. The monitoring process for agricultural mortgage loans also focuses on higher risk loans.
For commercial mortgage loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial mortgage loan portfolio. Loan-to-value ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and the values utilized in calculating the ratio are updated routinely. In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part of the Company’s ongoing review of its commercial mortgage loan portfolio.
For agricultural mortgage loans, the Company’s primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated.
Commitments to lend: After loans are approved, the Company makes commitments to lend and, typically, borrowers draw down on some or all of the commitments. The timing of mortgage loan funding is based on the commitment expiration dates. A liability for expected credit loss for unfunded commercial and agricultural mortgage loan commitments is recorded within net investment gains (losses). The liability is based on estimated lifetime loss rates as described above and the amount of the outstanding commitments, which for lines of credit, considers estimated utilization rates. When the commitment is funded or expires, the liability is adjusted accordingly.
Residential Mortgage Loan Portfolio Segment
The Company’s residential mortgage loan portfolio is comprised primarily of purchased closed end, amortizing residential mortgage loans, including both performing loans purchased within 12 months of origination and reperforming loans purchased after they have been performing for at least 12 months post-modification. Residential mortgage loans are pooled by loan type (i.e., new origination and reperforming) and pooled by similar risk profiles (including consumer credit score and loan-to-value ratios). Estimated lifetime loss rates, which vary by loan type and risk profile, are applied to the amortized cost of each loan excluding accrued investment income on a quarterly basis to develop the ACL. The estimated lifetime loss rates are based on several factors, including (i) industry historical experience and expected results over the forecast period for defaults, (ii) loss severity, (iii) prepayment rates, (iv) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, and (v) loan pool specific characteristics including consumer credit scores, loan-to-value ratios, payment history and home prices. These evaluations are revised as conditions change and new information becomes available. The Company uses industry historical experience which captures multiple economic cycles as the Company has purchased most of its residential mortgage loans in the last five years. The Company uses a forecast of economic assumptions for a two-year period for most of its residential mortgage loans. After the applicable forecast period, the Company immediately reverts to industry historical loss experience.
For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss.
Credit Quality of Mortgage Loans by Portfolio Segment
The amortized cost of commercial mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2020:
 
 
2020
 
2019
 
2018
 
2017
 
2016
 
Prior
 
Revolving Loans
 
Total
 
% of Total
 
 
(Dollars in millions)
Loan-to-value ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less than 65%
 
$
819

 
$
4,016

 
$
4,837

 
$
3,557

 
$
4,073

 
$
10,344

 
$
2,886

 
$
30,532

 
80.7
%
65% to 75%
 
372

 
1,749

 
1,213

 
888

 
791

 
987

 
—

 
6,000

 
15.8

76% to 80%
 
—

 
—

 
—

 
288

 
103

 
326

 
—

 
717

 
1.9

Greater than 80%
 
—

 
—

 
—

 
401

 
28

 
167

 
—

 
596

 
1.6

Total
 
$
1,191

 
$
5,765

 
$
6,050

 
$
5,134

 
$
4,995

 
$
11,824

 
$
2,886

 
$
37,845

 
100.0
%
Debt service coverage ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
> 1.20x
 
$
1,185

 
$
5,496

 
$
5,811

 
$
4,688

 
$
4,765

 
$
10,979

 
$
2,886

 
$
35,810

 
94.6
%
1.00x - 1.20x
 
—

 
—

 
38

 
77

 
192

 
749

 
—

 
1,056

 
2.8

<1.00x
 
6

 
269

 
201

 
369

 
38

 
96

 
—

 
979

 
2.6

Total
 
$
1,191

 
$
5,765

 
$
6,050

 
$
5,134

 
$
4,995

 
$
11,824

 
$
2,886

 
$
37,845

 
100.0
%

The amortized cost of agricultural mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2020:
 
 
2020
 
2019
 
2018
 
2017
 
2016
 
Prior
 
Revolving Loans
 
Total
 
% of Total
 
 
(Dollars in millions)
Loan-to-value ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less than 65%
 
$
257

 
$
2,173

 
$
2,723

 
$
1,056

 
$
2,754

 
$
5,026

 
$
847

 
$
14,836

 
95.7
%
65% to 75%
 
8

 
182

 
61

 
77

 
27

 
237

 
11

 
603

 
3.9

76% to 80%
 
—

 
—

 
8

 
—

 
—

 
6

 
2

 
16

 
0.1

Greater than 80%
 
—

 
—

 
—

 
—

 
—

 
42

 
—

 
42

 
0.3

Total
 
$
265

 
$
2,355

 
$
2,792

 
$
1,133

 
$
2,781

 
$
5,311

 
$
860

 
$
15,497

 
100.0
%

The amortized cost of residential mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2020:
 
 
2020
 
2019
 
2018
 
2017
 
2016
 
Prior
 
Revolving Loans
 
Total
 
% of Total
 
 
(Dollars in millions)
Performance indicators:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performing
 
$
160

 
$
2,155

 
$
1,321

 
$
404

 
$
170

 
$
8,355

 
$
—

 
$
12,565

 
97.1
%
Nonperforming (1)
 
—

 
3

 
5

 
—

 
1

 
362

 
—

 
371

 
2.9

Total
 
$
160

 
$
2,158

 
$
1,326

 
$
404

 
$
171

 
$
8,717

 
$
—

 
$
12,936

 
100.0
%
__________________
(1)
Includes residential mortgage loans in process of foreclosure of $119 million and $117 million at March 31, 2020 and December 31, 2019, respectively.
Past Due and Nonaccrual Mortgage Loans
The Company has a high quality, well performing mortgage loan portfolio, with over 99% of all mortgage loans classified as performing at both March 31, 2020 and December 31, 2019. The Company defines delinquency consistent with industry practice, when mortgage loans are past due more than two or more months, as applicable, by portfolio segment. The past due and nonaccrual mortgage loans at amortized cost, prior to ACL, by portfolio segment, were as follows at:
 
Past Due
 
Greater than 90 Days Past Due
and Still Accruing Interest
 
Nonaccrual
 
March 31, 2020
 
December 31, 2019
 
March 31, 2020
 
December 31, 2019
 
March 31, 2020
 
December 31, 2019
 
(In millions)
Commercial
$
—

 
$
—

 
$
—

 
$
—

 
$
167

 
$
167

Agricultural
267

 
124

 
121

 
2

 
161

 
137

Residential
371

 
377

 
—

 
—

 
371

 
377

Total
$
638

 
$
501

 
$
121

 
$
2

 
$
699

 
$
681


The amortized cost for nonaccrual commercial, agricultural and residential mortgage loans at beginning of year 2019 was $167 million, $105 million and $402 million, respectively. The amortized cost for nonaccrual agricultural mortgage loans with no ACL at March 31, 2020 and December 31, 2019 was $110 million and $93 million, respectively. There were no nonaccrual commercial or residential mortgage loans without an ACL at either March 31, 2020 or December 31, 2019.
Real Estate and Real Estate Joint Ventures
The Company’s real estate investment portfolio is diversified by property type, geography and income stream, including income from operating leases, operating income and equity in earnings from equity method real estate joint ventures. Real estate investments, by income type, as well as income earned, are as follows at and for the periods indicated:
 
March 31, 2020
 
December 31, 2019
 
Three Months 
 Ended 
March 31,
 
 
 
2020
 
2019
 
Carrying Value
 
Income
 
(In millions)
Leased real estate investments
$
1,602

 
$
1,586

 
$
46

 
$
41

Other real estate investments
418

 
419

 
34

 
30

Real estate joint ventures
4,839

 
4,654

 
7

 
(5
)
Total real estate and real estate joint ventures
$
6,859

 
$
6,659

 
$
87

 
$
66


The carrying value of real estate investments acquired through foreclosure was $32 million and $34 million at March 31, 2020 and December 31, 2019, respectively. Depreciation expense on real estate investments was $16 million and $15 million for the three months ended March 31, 2020 and 2019, respectively. Real estate investments were net of accumulated depreciation of $667 million and $652 million at March 31, 2020 and December 31, 2019, respectively.
Leases
Leased Real Estate Investments - Operating Leases
The Company, as lessor, leases investment real estate, principally commercial real estate for office and retail use, through a variety of operating lease arrangements, which typically include tenant reimbursement for property operating costs and options to renew or extend the lease. In some circumstances, leases may include an option for the lessee to purchase the property. In addition, certain leases of retail space may stipulate that a portion of the income earned is contingent upon the level of the tenants’ revenues. The Company has elected a practical expedient of not separating non-lease components related to reimbursement of property operating costs from associated lease components. These property operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over the same period of time as the operating lease. Therefore, the combined component is accounted for as a single operating lease. Risk is managed through lessee credit analysis, property type diversification, and geographic diversification.
Leased real estate income earned was $46 million and $41 million for the three months ended March 31, 2020 and 2019 respectively.
Leveraged and Direct Financing Leases
The Company has diversified leveraged lease and direct financing lease portfolios. Its leveraged leases principally include renewable energy generation facilities, rail cars, commercial real estate and commercial aircraft, and its direct financing leases principally include renewable energy generation facilities. These assets are leased through a variety of lease arrangements, which may include options to renew or extend the lease and options for the lessee to purchase the property. Residual values are estimated using available third-party data at inception of the lease. Risk is managed through lessee credit analysis, asset allocation, geographic diversification, and ongoing reviews of estimated residual values, using available third-party data and, in certain leases, linking the amount of future rental receipts to changes in inflation rates. Generally, estimated residual values are not guaranteed by the lessee or a third party.
Lease receivables are generally due in periodic installments. The payment periods for leveraged leases generally range from one to 12 years, but in certain circumstances can be over 12 years, while the payment periods for direct financing leases generally range from one to 17 years.
In accordance with new guidance adopted January 1, 2020 regarding expected credit loss, the Company records an allowance for expected credit loss in an amount that represents the portion of the investment in leases that the Company does not expect to collect, resulting in the investment in leases being presented at the net amount expected to be collected. In determining the ACL, management: (i) pools leases that share similar risk characteristics, (ii) considers lifetime credit loss expected over the contractual term of the lease, and (iii) considers past events, current economic conditions and forecasts of future economic conditions. Leases with dissimilar risk characteristics are evaluated individually for credit loss. Lifetime credit loss on leveraged and direct financing lease receivables is estimated using a probability of default and loss given default model, where the probability of default incorporates third party credit ratings of the lessee and the related historical default data. The Company also assesses the non-guaranteed residual values for recoverability by comparison to the current estimated fair value of the leased asset and considering other relevant market information such as independent third-party forecasts, consulting, asset brokerage and investment banking reports and data, comparable market transactions, and factors such as the competitive dynamics impacting specific industries, technological change and obsolescence, government and regulatory rules, tax policy, potential environmental liabilities and litigation.
Prior to the adoption of the new guidance regarding expected credit loss, lease impairment losses were recorded as incurred. Under the incurred loss model, if all amounts due under the lease agreement would not be collected, based on current information and events, an impairment loss was recorded. The impairment loss was recorded as a reduction of the investment in lease and within net investment gains (losses).
The investment in leveraged and direct financing leases, net of ACL, was $867 million and $183 million, respectively, at March 31, 2020. The ACL for leveraged and direct financing leases was $29 million at March 31, 2020. The investment in leveraged and direct financing leases was $896 million and $189 million, respectively, at December 31, 2019.
Cash Equivalents
The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $8.1 billion and $5.5 billion at March 31, 2020 and December 31, 2019, respectively.
Net Unrealized Investment Gains (Losses)
Unrealized investment gains (losses) on fixed maturity securities AFS and derivatives and the effect on DAC, VOBA, deferred sales inducements (“DSI”), future policy benefits and the policyholder dividend obligation, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI.
The components of net unrealized investment gains (losses), included in AOCI, were as follows:
 
March 31, 2020
 
December 31, 2019
 
(In millions)
Fixed maturity securities AFS
$
11,406

 
$
15,145

Fixed maturity securities AFS with noncredit OTTI losses included in AOCI
—

 
32

Total fixed maturity securities AFS
11,406

 
15,177

Derivatives
5,773

 
2,043

Other
346

 
210

Subtotal
17,525

 
17,430

Amounts allocated from:
 
 
 
Future policy benefits
(55
)
 
(1,121
)
DAC, VOBA and DSI
(1,011
)
 
(1,051
)
Policyholder dividend obligation
(1,677
)
 
(2,020
)
Subtotal
(2,743
)
 
(4,192
)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
—

 
(7
)
Deferred income tax benefit (expense)
(3,038
)
 
(2,735
)
Net unrealized investment gains (losses)
$
11,744

 
$
10,496


The changes in net unrealized investment gains (losses) were as follows:
 
Three Months
Ended
March 31, 2020
 
(In millions)
Balance, beginning of period
$
10,496

Fixed maturity securities AFS on which noncredit OTTI losses have been recognized
(32
)
Unrealized investment gains (losses) during the period
127

Unrealized investment gains (losses) relating to:
 
Future policy benefits
1,066

DAC, VOBA and DSI
40

Policyholder dividend obligation
343

Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
7

Deferred income tax benefit (expense)
(303
)
Balance, end of period
$
11,744

Change in net unrealized investment gains (losses)
$
1,248


Concentrations of Credit Risk
There were no investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at both March 31, 2020 and December 31, 2019.
Securities Lending and Repurchase Agreements
Securities, Collateral and Reinvestment Portfolio
A summary of the outstanding securities lending and repurchase agreements is as follows:
 
 
March 31, 2020
 
December 31, 2019
 
 
Securities (1)
 
 
 
 
 
Securities (1)
 
 
 
 
Estimated Fair Value
 
Cash Collateral Received from Counterparties (2), (3)
 
Reinvestment Portfolio at Estimated Fair Value
 
Estimated Fair Value
 
Cash Collateral Received from Counterparties (2), (3)
 
Reinvestment Portfolio at Estimated Fair Value
 
 
(In millions)
Securities lending
 
$
14,338

 
$
14,743

 
$
14,610

 
$
12,455

 
$
12,791

 
$
12,847

Repurchase agreements
 
$
2,746

 
$
2,700

 
$
2,676

 
$
2,333

 
$
2,310

 
$
2,320

__________________
(1)
Securities on loan in connection with these programs are included within fixed maturity securities AFS, short-term investments and cash equivalents.
(2)
In connection with securities lending, in addition to cash collateral received, the Company received from counterparties security collateral of $21 million and $0 at March 31, 2020 and December 31, 2019, respectively, which may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements.
(3)
The liability for cash collateral for these programs is included within payables for collateral under securities loaned, other transactions and other liabilities.
Contractual Maturities
A summary of the remaining contractual maturities of securities lending agreements and repurchase agreements is as follows:
 
March 31, 2020
 
December 31, 2019
 
Remaining Maturities
 
 
 
Remaining Maturities
 
 
 
Open (1)
 
1 
Month
or Less
 
Over
 1 to 6
Months
 
Over 6 Months to 1 Year
 
Total
 
Open (1)
 
1 Month
or Less
 
Over
1 to 6
Months
 
Over 6 Months to 1 Year
 
Total
 
(In millions)
Cash collateral liability by loaned security type:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities lending:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency
$
3,335

 
$
5,926

 
$
5,482

 
$
—

 
$
14,743

 
$
2,260

 
$
5,040

 
$
5,491

 
$
—

 
$
12,791

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repurchase agreements:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency
$
—

 
$
2,700

 
$
—

 
$
—

 
$
2,700

 
$
—

 
$
2,310

 
$
—

 
$
—

 
$
2,310

__________________
(1)
The related loaned security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral.
If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both.
The securities lending and repurchase agreements reinvestment portfolios consist principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents or cash. If the securities on loan or the reinvestment portfolio become less liquid, liquidity resources within the general account are available to meet any potential cash demands when securities on loan are put back by the counterparty.
Invested Assets on Deposit and Pledged as Collateral
Invested assets on deposit and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value at:
 
March 31, 2020
 
December 31, 2019
 
(In millions)
Invested assets on deposit (regulatory deposits)
$
111

 
$
62

Invested assets pledged as collateral (1)
23,158

 
20,659

Total invested assets on deposit and pledged as collateral
$
23,269


$
20,721

__________________
(1)
The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4 of the Notes to the Consolidated Financial Statements included in the 2019 Annual Report) and derivative transactions (see Note 6).
See “— Securities Lending and Repurchase Agreements” for information regarding securities supporting securities lending and repurchase agreement transactions and Note 4 for information regarding investments designated to the closed block. In addition, the Company’s investment in Federal Home Loan Bank common stock, which is considered restricted until redeemed by the issuers, was $773 million and $737 million, at redemption value, at March 31, 2020 and December 31, 2019, respectively.
Variable Interest Entities
The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity.
Consolidated VIEs
Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.
The following table presents the total assets and total liabilities relating to investment-related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:
 
March 31, 2020
 
December 31, 2019
 
Total
Assets
 
Total
Liabilities
 
Total
Assets
 
Total
Liabilities
 
(In millions)
Real estate joint ventures (1)
$
1,410

 
$
—

 
$
1,378

 
$
—

Investment fund (primarily mortgage loans) (2)
204

 
—

 
211

 
—

Renewable energy partnership (3)
95

 
—

 
94

 
—

Other investments (3)
10

 
5

 
10

 
5

Total
$
1,719


$
5


$
1,693


$
5

__________________
(1)
The Company’s investment in these affiliated real estate joint ventures was $1.3 billion and $1.2 billion at March 31, 2020 and December 31, 2019, respectively. Other affiliates’ investments in these affiliated real estate joint ventures were $133 million and $129 million at March 31, 2020 and December 31, 2019, respectively.
(2)
The Company’s investment in this affiliated investment fund was $166 million and $172 million at March 31, 2020 and December 31, 2019, respectively. An affiliate had an investment in this affiliated investment fund of $38 million and $39 million at March 31, 2020 and December 31, 2019, respectively.
(3)
Assets of the renewable energy partnership and other investments primarily consisted of other invested assets.
Unconsolidated VIEs
The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:
 
March 31, 2020
 
December 31, 2019
 
Carrying
Amount
 
Maximum
Exposure
to Loss (1)
 
Carrying
Amount
 
Maximum
Exposure
to Loss (1)
 
(In millions)
Fixed maturity securities AFS:
 
 
 
 
 
 
 
Structured Products (2)
$
39,108

 
$
39,108

 
$
37,119

 
$
37,119

U.S. and foreign corporate
1,055

 
1,055

 
1,098

 
1,098

Other limited partnership interests
4,734

 
7,766

 
4,461

 
7,423

Other invested assets
1,503

 
1,608

 
1,554

 
1,677

Real estate joint ventures
11

 
14

 
25

 
28

Total
$
46,411


$
49,551


$
44,257


$
47,345

__________________
(1)
The maximum exposure to loss relating to fixed maturity 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 and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. 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 $7 million and $6 million at March 31, 2020 and December 31, 2019, 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 in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.
As described in Note 12, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs for either the three months ended March 31, 2020 or 2019.
Net Investment Income
The components of net investment income were as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
Investment income:
 
 
 
 
Fixed maturity securities AFS
 
$
1,658

 
$
1,768

Equity securities
 
9

 
9

Mortgage loans
 
718

 
764

Policy loans
 
77

 
76

Real estate and real estate joint ventures
 
87

 
66

Other limited partnership interests
 
215

 
85

Cash, cash equivalents and short-term investments
 
43

 
43

FVO Securities (1)
 
(34
)
 
23

Operating joint ventures
 
21

 
11

Other
 
75

 
59

Subtotal
 
2,869


2,904

Less: Investment expenses
 
225

 
259

Net investment income
 
$
2,644


$
2,645

__________________
(1)
Changes in estimated fair value subsequent to purchase for investments still held as of the end of the respective periods and included in net investment income were principally from equity linked notes included within securities for which the FVO has been elected (“FVO Securities”) and were ($34) million and $23 million for the three months ended March 31, 2020 and 2019, respectively.
See “— Related Party Investment Transactions” for discussion of affiliated net investment income and investment expenses.
The Company invests in real estate joint ventures, other limited partnership interests and tax credit and renewable energy partnerships, and also does business through certain operating joint ventures, the majority of which are accounted for under the equity method. Net investment income from (i) other limited partnership interests and operating joint ventures, accounted for under the equity method, and (ii) real estate joint ventures and tax credit and renewable energy partnerships, primarily accounted for under the equity method, totaled $198 million and $36 million for the three months ended March 31, 2020 and 2019, respectively.
Net Investment Gains (Losses)
Components of Net Investment Gains (Losses)
The components of net investment gains (losses) were as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
(In millions)
Total gains (losses) on fixed maturity securities AFS:
 
 
 
 
Net credit loss (provision) release (1)
 
$
(77
)
 
$
(8
)
Net gains (losses) on sales and disposals
 
(4
)
 
(32
)
Total gains (losses) on fixed maturity securities AFS
 
(81
)

(40
)
Total gains (losses) on equity securities:
 

 

Net gains (losses) on sales and disposals
 
9

 
9

Change in estimated fair value (2)
 
(145
)
 
57

Total gains (losses) on equity securities
 
(136
)

66

Mortgage loans
 
(45
)
 
(14
)
Real estate and real estate joint ventures
 
1

 
3

Other (3)
 
30

 
(50
)
Subtotal
 
(231
)

(35
)
Change in estimated fair value of other limited partnership interests and real estate joint ventures
 
1

 
(16
)
Non-investment portfolio gains (losses)
 
48

 
(3
)
Subtotal
 
49


(19
)
Total net investment gains (losses)
 
$
(182
)

$
(54
)

__________________
(1)
Net credit loss provision by sector for the three months ended March 31, 2019 was $6 million Industrial and $2 million RMBS. See “— Rollforward of Allowance for Credit Loss for Fixed Maturity Securities AFS By Sector.” Due to the adoption of new guidance on January 1, 2020, prior period OTTI loss is presented as credit loss.
(2)
Changes in estimated fair value subsequent to purchase for equity securities still held as of the end of the period included in net investment gains (losses) were ($138) million and $56 million for the three months ended March 31, 2020 and 2019, respectively.
(3)
Other gains (losses) included tax credit partnership impairment losses of ($78) million and a renewable energy partnership disposal gain of $46 million for the three months ended March 31, 2019.
Gains (losses) from foreign currency transactions included within net investment gains (losses) were $49 million and ($1) million for the three months ended March 31, 2020 and 2019, respectively.
Fixed Maturity Securities AFS - Sales and Disposals and Credit Loss
Sales of securities are determined on a specific identification basis. Proceeds from sales or disposals and the components of net investment gains (losses) were as shown in the table below:
 
Three Months
Ended
March 31,
 
2020
 
2019
 
(In millions)
Proceeds
$
5,464

 
$
10,665

Gross investment gains
$
61

 
$
135

Gross investment losses
(65
)
 
(167
)
Net credit loss (provision) release
(77
)
 
(8
)
Net investment gains (losses)
$
(81
)
 
$
(40
)

Related Party Investment Transactions
Recurring related party investments and related net investment income were as follows at and for the periods ended:
 
 
 
 
March 31, 2020
 
December 31, 2019
 
Three Months
Ended
March 31,
 
 
 
 
 
 
2020
 
2019
Investment Type/Balance Sheet Category
 
Related Party
 
Carrying Value
 
Net Investment Income
 
 
 
 
(In millions)
Affiliated investments (1)
 
MetLife, Inc.
 
$
1,821

 
$
1,810

 
$
9

 
$
8

Affiliated investments (2)
 
American Life Insurance Company
 
100

 
100

 
1

 
1

Affiliated investments (3)
 
Metropolitan Property and Casualty Insurance Company
 
315

 
315

 
2

 
3

Other invested assets
 
 
 
$
2,236

 
$
2,225

 
$
12

 
$
12

________________
(1)
Represents an investment in affiliated senior notes. The affiliated senior notes have maturity dates from September 2020 to October 2029 and bear interest, payable semi-annually, at a rate per annum ranging from 0.82% to 3.14%. See Note 7 of the Notes to the Consolidated Financial Statements included in the 2019 Annual Report for further information.
(2)
Represents an investment in an affiliated surplus note. The surplus note, which bears interest at a fixed rate of 3.17%, payable semiannually, is due June 2020.
(3)
Represents an investment in affiliated preferred stock. Dividends are payable quarterly at a variable rate.
For the three months ended March 31, 2020 and 2019, the Company incurred investment advisory charges from an affiliate of $69 million and $76 million, respectively.
See “— Variable Interest Entities” for information on investments in affiliated real estate joint ventures and an affiliated investment fund.
v3.20.1
Derivatives
 3 Months Ended
Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives
6. Derivatives
Accounting for Derivatives
Freestanding Derivatives
Freestanding derivatives are carried on the Company’s balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement.
Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivative’s carrying value in other invested assets or other liabilities.
If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows:
Statement of Operations Presentation:
Derivative:
Policyholder benefits and claims
• 
Economic hedges of variable annuity guarantees included in
future policy benefits
Net investment income
• 
Economic hedges of equity method investments in joint
ventures
Hedge Accounting
To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows:
•
Fair value hedge - a hedge of the estimated fair value of a recognized asset or liability - in the same line item as the earnings effect of the hedged item. The carrying value of the hedged recognized asset or liability is adjusted for changes in its estimated fair value due to the hedged risk.
•
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 - in OCI and reclassified into the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.
The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported on the statement of operations within interest income or interest expense to match the location of the hedged item.
In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument’s effectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income.
The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, (ii) the derivative expires, is sold, terminated, or exercised, (iii) it is no longer probable that the hedged forecasted transaction will occur, or (iv) the derivative is de-designated as a hedging instrument.
When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurring, the changes in estimated fair value of derivatives recorded in OCI related to discontinued cash flow hedges are released into the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.
When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable of occurring are recognized immediately in net investment gains (losses).
In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses).
Embedded Derivatives
The Company issues certain products, which include variable annuities and investment contracts, and is a party to certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if:
•
the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated 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.
Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent “excess” fees and are reported in universal life and investment-type product policy fees.
See Note 7 for information about the fair value hierarchy for derivatives.
Derivative Strategies
The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives.
Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Certain of the Company’s OTC derivatives are cleared and settled through central clearing counterparties (“OTC-cleared”), while others are bilateral contracts between two counterparties (“OTC-bilateral”). The types of derivatives the Company uses include swaps, forwards, futures and option contracts. To a lesser extent, the Company uses credit default swaps and structured interest rate swaps to synthetically replicate investment risks and returns which are not readily available in the cash markets.
Interest Rate Derivatives
The Company uses a variety of interest rate derivatives to reduce its exposure to changes in interest rates, including interest rate swaps, interest rate total return swaps, caps, floors, swaptions, futures and forwards.
Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional amount. The Company utilizes interest rate swaps in fair value, cash flow and nonqualifying hedging relationships.
The Company uses structured interest rate swaps to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. government and agency, or other fixed maturity securities AFS. Structured interest rate swaps are included in interest rate swaps and are not designated as hedging instruments.
Interest rate total return swaps are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and a benchmark interest rate, calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. Interest rate total return swaps are used by the Company to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate total return swaps in nonqualifying hedging relationships.
The Company purchases interest rate caps primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities, and interest rate floors primarily to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in nonqualifying hedging relationships.
In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate securities, to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts and to pledge initial margin based on futures exchange requirements. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring, to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance, and to hedge minimum guarantees embedded in certain variable annuity products issued by the Company. The Company utilizes exchange-traded interest rate futures in nonqualifying hedging relationships.
Swaptions are used by the Company to hedge interest rate risk associated with the Company’s long-term liabilities and invested assets. A swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium for purchased swaptions and receives a premium for written swaptions. The Company utilizes swaptions in nonqualifying hedging relationships. Swaptions are included in interest rate options.
The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in cash flow and nonqualifying hedging relationships.
A synthetic guaranteed interest contract (“GIC”) is a contract that simulates the performance of a traditional GIC through the use of financial instruments. The contractholder owns the underlying assets, and the Company provides a guarantee (or “wrap”) on the participant funds for an annual risk charge. The Company’s maximum exposure to loss on synthetic GICs is the notional amount, in the event the values of all of the underlying assets were reduced to zero. The Company’s risk is substantially lower due to contractual provisions that limit the portfolio to high quality assets, which are pre-approved and monitored for compliance, as well as the collection of risk charges. In addition, the crediting rates reset periodically to amortize market value gains and losses over a period equal to the duration of the wrapped portfolio, subject to a 0% floor. While plan participants may transact at book value, contractholder withdrawals may only occur immediately at market value, or at book value paid over a period of time per contract provisions. Synthetic GICs are not designated as hedging instruments.
Foreign Currency Exchange Rate Derivatives
The Company uses foreign currency exchange rate derivatives, including foreign currency swaps and foreign currency forwards, to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies.
In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company utilizes foreign currency swaps in fair value, cash flow and nonqualifying hedging relationships.
In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. The Company utilizes foreign currency forwards in nonqualifying hedging relationships.
Credit Derivatives
The Company enters into purchased credit default swaps to hedge against credit-related changes in the value of its investments. In a credit default swap transaction, the Company agrees with another party to pay, at specified intervals, a premium to hedge credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional amount in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit events vary by type of issuer but typically include bankruptcy, failure to pay debt obligations and involuntary restructuring for corporate obligors, as well as repudiation, moratorium or governmental intervention for sovereign obligors. In each case, payout on a credit default swap is triggered only after the Credit Derivatives Determinations Committee of the International Swaps and Derivatives Association, Inc. (“ISDA”) deems that a credit event has occurred. The Company utilizes credit default swaps in nonqualifying hedging relationships.
The Company enters into written credit default swaps to synthetically create credit investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and one or more cash instruments, such as U.S. government and agency, or other fixed maturity securities AFS. These credit default swaps are not designated as hedging instruments.
The Company enters into forwards to lock in the price to be paid for forward purchases of certain securities. The price is agreed upon at the time of the contract and payment for the contract is made at a specified future date. When the primary purpose of entering into these transactions is to hedge against the risk of changes in purchase price due to changes in credit spreads, the Company designates these transactions as credit forwards. The Company utilizes credit forwards in cash flow hedging relationships.
Equity Derivatives
The Company uses a variety of equity derivatives to reduce its exposure to equity market risk, including equity index options, equity variance swaps, exchange-traded equity futures and equity total return swaps.
Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products issued by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the underlying equity index within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise and the strike price. Certain of these contracts may also contain settlement provisions linked to interest rates. In certain instances, the Company may enter into a combination of transactions to hedge adverse changes in equity indices within a pre-determined range through the purchase and sale of options. The Company utilizes equity index options in nonqualifying hedging relationships.
Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products issued by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. The Company utilizes equity variance swaps in nonqualifying hedging relationships.
In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of equity securities, to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts and to pledge initial margin based on futures exchange requirements. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge minimum guarantees embedded in certain variable annuity products issued by the Company. The Company utilizes exchange-traded equity futures in nonqualifying hedging relationships.
In an equity total return swap, the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and a benchmark interest rate, calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. The Company uses equity total return swaps to hedge its equity market guarantees in certain of its insurance products. Equity total return swaps can be used as hedges or to synthetically create investments. The Company utilizes equity total return swaps in nonqualifying hedging relationships.
Primary Risks Managed by Derivatives
The following table presents the primary underlying risk exposure, gross notional amount, and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:
 
 
 
 
March 31, 2020
 
December 31, 2019
 
 
Primary Underlying Risk Exposure
 
Gross
Notional
Amount
 
Estimated Fair Value
 
Gross
Notional
Amount
 
Estimated Fair Value
 
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
 
 
(In millions)
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Interest rate
 
$
3,231

 
$
3,393

 
$
10

 
$
2,370

 
$
2,668

 
$
2

Foreign currency swaps
 
Foreign currency exchange rate
 
1,250

 
64

 
—

 
1,250

 
12

 
17

Subtotal
 
 
 
4,481

 
3,457

 
10

 
3,620

 
2,680

 
19

Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Interest rate
 
4,734

 
156

 
27

 
3,324

 
125

 
27

Interest rate forwards
 
Interest rate
 
6,259

 
969

 
—

 
6,793

 
75

 
142

Foreign currency swaps
 
Foreign currency exchange rate
 
27,392

 
3,102

 
1,758

 
27,240

 
1,199

 
1,103

Subtotal
 
 
 
38,385

 
4,227

 
1,785

 
37,357

 
1,399

 
1,272

Total qualifying hedges
 
 
 
42,866

 
7,684

 
1,795

 
40,977

 
4,079

 
1,291

Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Interest rate
 
50,562

 
4,319

 
635

 
38,820

 
2,296

 
133

Interest rate floors
 
Interest rate
 
12,701

 
424

 
—

 
12,701

 
156

 
—

Interest rate caps
 
Interest rate
 
55,006

 
21

 
—

 
42,622

 
18

 
5

Interest rate futures
 
Interest rate
 
724

 
—

 
—

 
745

 
—

 
—

Interest rate options
 
Interest rate
 
25,105

 
772

 
—

 
24,944

 
427

 
—

Interest rate total return swaps
 
Interest rate
 
1,048

 
180

 
—

 
1,048

 
5

 
49

Synthetic GICs
 
Interest rate
 
17,201

 
—

 
—

 
16,498

 
—

 
—

Foreign currency swaps
 
Foreign currency exchange rate
 
6,009

 
721

 
85

 
6,124

 
419

 
97

Foreign currency forwards
 
Foreign currency exchange rate
 
846

 
18

 
14

 
1,001

 
12

 
8

Credit default swaps — purchased
 
Credit
 
863

 
39

 
1

 
888

 
4

 
11

Credit default swaps — written
 
Credit
 
8,518

 
26

 
76

 
8,711

 
200

 
1

Equity futures
 
Equity market
 
561

 
7

 
1

 
2,039

 
—

 
5

Equity index options
 
Equity market
 
21,783

 
997

 
184

 
23,104

 
447

 
417

Equity variance swaps
 
Equity market
 
637

 
12

 
10

 
637

 
17

 
17

Equity total return swaps
 
Equity market
 
716

 
175

 
1

 
716

 
—

 
68

Total non-designated or nonqualifying derivatives
 
202,280

 
7,711

 
1,007

 
180,598

 
4,001

 
811

Total
 
 
 
$
245,146

 
$
15,395

 
$
2,802

 
$
221,575

 
$
8,080

 
$
2,102


Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both March 31, 2020 and December 31, 2019. The Company’s use of derivatives includes (i) derivatives that serve as macro hedges of the Company’s exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules, (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship, (iii) derivatives that economically hedge embedded derivatives that do not qualify for hedge accounting because the changes in estimated fair value of the embedded derivatives are already recorded in net income, and (iv) written credit default swaps and interest rate swaps that are used to synthetically create investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged.
The Effects of Derivatives on the Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
The following table presents the consolidated financial statement location and amount of gain (loss) recognized on fair value, cash flow, nonqualifying hedging relationships and embedded derivatives:
 
 
Three Months Ended March 31, 2020
 
 
Net Investment Income
 
Net Investment Gains (Losses)
 
Net Derivative Gains (Losses)
 
Policyholder Benefits and Claims
 
Interest Credited to Policyholder Account Balances
 
Other Expenses
 
OCI
 
 
(In millions)
Gain (Loss) on Fair Value Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives designated as hedging instruments (1)
 
$
(10
)
 
$
—

 
$
—

 
$
774

 
$
—

 
$
—

 
N/A

Hedged items
 
4

 
—

 
—

 
(769
)
 
—

 
—

 
N/A

Foreign currency exchange rate derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives designated as hedging instruments (1)
 
69

 
—

 
—

 
—

 
—

 
—

 
N/A

Hedged items
 
(62
)
 
—

 
—

 
—

 
—

 
—

 
N/A

Amount excluded from the assessment of hedge effectiveness
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A

Subtotal
 
1

 
—

 
—

 
5

 
—

 
—

 
N/A

Gain (Loss) on Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
$
2,002

Amount of gains (losses) reclassified from AOCI into income
 
6

 
6

 
—

 
—

 
—

 
—

 
(12
)
Foreign currency exchange rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
1,289

Amount of gains (losses) reclassified from AOCI into income
 
—

 
(451
)
 
—

 
—

 
—

 
—

 
451

Foreign currency transaction gains (losses) on hedged items
 
—

 
457

 
—

 
—

 
—

 
—

 
—

Credit derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
—

Amount of gains (losses) reclassified from AOCI into income
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
6

 
12

 
—

 
—

 
—

 
—

 
3,730

Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives (1)
 
(4
)
 
—

 
3,394

 
—

 
—

 
—

 
N/A

Foreign currency exchange rate derivatives (1)
 
—

 
—

 
374

 
—

 
—

 
—

 
N/A

Credit derivatives — purchased (1)
 
—

 
—

 
45

 
—

 
—

 
—

 
N/A

Credit derivatives — written (1)
 
—

 
—

 
(234
)
 
—

 
—

 
—

 
N/A

Equity derivatives (1)
 
—

 
—

 
1,081

 
131

 
—

 
—

 
N/A

Foreign currency transaction gains (losses) on hedged items
 
—

 
—

 
(112
)
 
—

 
—

 
—

 
N/A

Subtotal
 
(4
)
 
—

 
4,548

 
131

 
—

 
—

 
N/A

Earned income on derivatives
 
82

 
—

 
80

 
38

 
(44
)
 
—

 
—

Embedded derivatives (2)
 
N/A

 
N/A

 
(1,073
)
 
—

 
N/A

 
N/A

 
N/A

Total
 
$
85

 
$
12

 
$
3,555

 
$
174

 
$
(44
)
 
$
—

 
$
3,730

 
 
Three Months Ended March 31, 2019
 
 
Net Investment Income
 
Net Investment Gains (Losses)
 
Net Derivative Gains (Losses)
 
Policyholder Benefits and Claims
 
Interest Credited to Policyholder Account Balances
 
Other Expenses
 
OCI
 
 
(In millions)
Gain (Loss) on Fair Value Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives designated as hedging instruments (1)
 
$
(3
)
 
$
—

 
$
—

 
$
127

 
$
—

 
$
—

 
N/A

Hedged items
 
3

 
—

 
—

 
(128
)
 
—

 
—

 
N/A

Foreign currency exchange rate derivatives:
 


 


 


 


 


 


 


Derivatives designated as hedging instruments (1)
 
(29
)
 
—

 
—

 
—

 
—

 
—

 
N/A

Hedged items
 
28

 
—

 
—

 
—

 
—

 
—

 
N/A

Amount excluded from the assessment of hedge effectiveness
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A

Subtotal
 
(1
)
 
—

 
—

 
(1
)
 
—

 
—

 
N/A

Gain (Loss) on Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
$
242

Amount of gains (losses) reclassified from AOCI into income
 
5

 
(6
)
 
—

 
—

 
—

 
—

 
1

Foreign currency exchange rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
(126
)
Amount of gains (losses) reclassified from AOCI into income
 
(1
)
 
47

 
—

 
—

 
—

 
—

 
(46
)
Foreign currency transaction gains (losses) on hedged items
 
—

 
(56
)
 
—

 
—

 
—

 
—

 
—

Credit derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
—

Amount of gains (losses) reclassified from AOCI into income
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
4

 
(15
)
 
—

 
—

 
—

 
—

 
71

Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives (1)
 
(1
)
 
—

 
141

 
—

 
—

 
—

 
N/A

Foreign currency exchange rate derivatives (1)
 
—

 
—

 
(61
)
 
—

 
—

 
—

 
N/A

Credit derivatives — purchased (1)
 
—

 
—

 
(10
)
 
—

 
—

 
—

 
N/A

Credit derivatives — written (1)
 
—

 
—

 
92

 
—

 
—

 
—

 
N/A

Equity derivatives (1)
 
—

 
—

 
(482
)
 
(68
)
 
—

 
—

 
N/A

Foreign currency transaction gains (losses) on hedged items
 
—

 
—

 
37

 
—

 
—

 
—

 
N/A

Subtotal
 
(1
)
 
—

 
(283
)
 
(68
)
 
—

 
—

 
N/A

Earned income on derivatives
 
70

 
—

 
71

 
31

 
(32
)
 
—

 
—

Embedded derivatives (2)
 
N/A

 
N/A

 
(98
)
 
—

 
N/A

 
N/A

 
N/A

Total
 
$
72

 
$
(15
)
 
$
(310
)
 
$
(38
)
 
$
(32
)
 
$
—

 
$
71

__________________
(1)
Excludes earned income on derivatives.
(2)
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 $111 million and ($11) million for the three months ended March 31, 2020 and 2019, respectively.
Fair Value Hedges
The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities and (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities.
The following table presents the balance sheet classification, carrying amount and cumulative fair value hedging adjustments for items designated and qualifying as hedged items in fair value hedges:
Balance Sheet Line Item
 
Carrying Amount of the
Hedged
Assets/(Liabilities)
 
Cumulative Amount
of Fair Value Hedging Adjustments
Included in the Carrying Amount of Hedged
Assets/(Liabilities) (1)
 
 
March 31, 2020
 
December 31, 2019
 
March 31, 2020
 
December 31, 2019
 
 
(In millions)
Fixed maturity securities AFS
 
$
380

 
$
404

 
$
(1
)
 
$
(1
)
Mortgage loans
 
$
1,019

 
$
1,127

 
$
15

 
$
2

Future policy benefits
 
$
(5,705
)
 
$
(4,475
)
 
$
(1,677
)
 
$
(908
)
__________________
(1)
At both March 31, 2020 and December 31, 2019, the hedging adjustments on discontinued hedging relationships includes ($1) million.
All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
Cash Flow Hedges
The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities, (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments, and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments.
In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into income. These amounts were $1 million and $2 million for the three months ended March 31, 2020 and 2019, respectively.
At March 31, 2020 and December 31, 2019, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed nine years and eight years, respectively.
At March 31, 2020 and December 31, 2019, the balance in AOCI associated with cash flow hedges was $5.8 billion and $2.0 billion, respectively.
All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
At March 31, 2020, the Company expected to reclassify ($16) million of deferred net gains (losses) on derivatives in AOCI, to earnings within the next 12 months.
Credit Derivatives
In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the nonqualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company’s maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $8.5 billion and $8.7 billion at March 31, 2020 and December 31, 2019, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. At March 31, 2020 and December 31, 2019, the Company would have paid $50 million and received $199 million, respectively, to terminate all of these contracts.
The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:
 
 
March 31, 2020
 
December 31, 2019
Rating Agency Designation of Referenced
Credit Obligations (1)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
 
(Dollars in millions)
Aaa/Aa/A
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
$
1

 
$
84

 
1.1

 
$
1

 
$
94

 
1.7

Credit default swaps referencing indices
 
—

 
2,210

 
2.2

 
34

 
2,099

 
2.3

Subtotal
 
1

 
2,294

 
2.1

 
35

 
2,193

 
2.2

Baa
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
(2
)
 
164

 
2.2

 
2

 
124

 
1.6

Credit default swaps referencing indices
 
(34
)
 
5,814

 
5.3

 
141

 
6,165

 
5.0

Subtotal
 
(36
)
 
5,978

 
5.2

 
143

 
6,289

 
5.0

Ba
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
(2
)
 
20

 
2.5

 
—

 
—

 
—

Credit default swaps referencing indices
 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
(2
)
 
20

 
2.5

 
—

 
—

 
—

B
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
—

 
10

 
0.2

 
—

 
10

 
0.5

Credit default swaps referencing indices
 
(13
)
 
216

 
4.7

 
21

 
219

 
5.0

Subtotal
 
(13
)
 
226

 
4.5

 
21

 
229

 
4.8

Total
 
$
(50
)
 
$
8,518

 
4.4

 
$
199

 
$
8,711

 
4.3

__________________
(1)
The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.
(2)
The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.
(3)
Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or municipals.
Credit Risk on Freestanding Derivatives
The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company’s derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements.
The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties and establishing and monitoring exposure limits. The Company’s OTC-bilateral derivative transactions are governed by ISDA Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, the Company is permitted to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions. All of the Company’s ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives.

The Company’s OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivatives.
See Note 7 for a description of the impact of credit risk on the valuation of derivatives.
The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
 
 
March 31, 2020
 
December 31, 2019
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)
 
$
14,718

 
$
2,289

 
$
7,974

 
$
2,035

OTC-cleared (1)
 
816

 
548

 
191

 
53

Exchange-traded
 
7

 
1

 
—

 
5

Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)
 
15,541

 
2,838

 
8,165

 
2,093

Gross amounts not offset on the interim condensed consolidated balance sheets:
 


 


 


 


Gross estimated fair value of derivatives: (2)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(2,236
)
 
(2,236
)
 
(1,915
)
 
(1,915
)
OTC-cleared
 
(400
)
 
(400
)
 
(25
)
 
(25
)
Exchange-traded
 
—

 
—

 
—

 
—

Cash collateral: (3), (4)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(10,270
)
 
—

 
(4,808
)
 
—

OTC-cleared
 
—

 
(26
)
 
(165
)
 
—

Exchange-traded
 
—

 
—

 
—

 
—

Securities collateral: (5)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(2,178
)
 
(51
)
 
(1,246
)
 
(114
)
OTC-cleared
 
—

 
(122
)
 
—

 
(28
)
Exchange-traded
 
—

 
(1
)
 
—

 
(5
)
Net amount after application of master netting agreements and collateral
 
$
457

 
$
2

 
$
6

 
$
6

__________________
(1)
At March 31, 2020 and December 31, 2019, derivative assets included income (expense) accruals reported in accrued investment income or in other liabilities of $146 million and $85 million, respectively, and derivative liabilities included (income) expense accruals reported in accrued investment income or in other liabilities of $36 million and ($9) 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 by the Company for OTC-bilateral and OTC-cleared derivatives, where the centralized clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.
(4)
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 on the balance sheet. 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 March 31, 2020 and December 31, 2019, the Company received excess cash collateral of $170 million and $290 million, respectively, and provided no excess cash collateral for either period.
(5)
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at March 31, 2020, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge 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 March 31, 2020 and December 31, 2019, the Company received excess securities collateral with an estimated fair value of $265 million and $97 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At March 31, 2020 and December 31, 2019, the Company provided excess securities collateral with an estimated fair value of $107 million and $48 million, respectively, for its OTC-bilateral derivatives, $1.4 billion and $462 million, respectively, for its OTC-cleared derivatives, and $85 million and $90 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
The Company’s collateral arrangements for its OTC-bilateral derivatives require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that counterparty reaches a minimum transfer amount. All of the Company’s netting agreements for derivatives contain provisions that require both Metropolitan Life Insurance Company and the counterparty to maintain a specific investment grade financial strength or credit rating from each of Moody’s and S&P. If a party’s financial strength or credit ratings were to fall below that specific investment grade financial strength or credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party’s reasonable valuation of the derivatives.
The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that were in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged.
 
 
March 31, 2020
 
December 31, 2019
 
 
Derivatives
Subject to
Financial
Strength-
Contingent
Provisions
 
Derivatives
Not Subject
to Financial
Strength-
Contingent
Provisions
 
Total
 
Derivatives
Subject to
Financial
Strength-
Contingent
Provisions
 
Derivatives
Not Subject
to Financial
Strength-
Contingent
Provisions
 
Total
 
 
(In millions)
Estimated Fair Value of Derivatives in a Net
Liability Position (1)
 
$
52

 
$
—

 
$
52

 
$
120

 
$
—

 
$
120

Estimated Fair Value of Collateral Provided:
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities AFS
 
$
51

 
$
—

 
$
51

 
$
135

 
$
—

 
$
135

__________________
(1)
After taking into consideration the existence of netting agreements.
Embedded Derivatives
The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives.
The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:
 
 
Balance Sheet Location
 
March 31, 2020
 
December 31, 2019
 
 
 
 
(In millions)
Embedded derivatives within liability host contracts:
 
 
 
 
 
 
Direct guaranteed minimum benefits
 
Policyholder account balances
 
$
1,428

 
$
175

Assumed guaranteed minimum benefits
 
Policyholder account balances
 
7

 
3

Funds withheld on ceded reinsurance (including affiliated)
 
Other liabilities
 
943

 
1,017

Fixed annuities with equity indexed returns
 
Policyholder account balances
 
62

 
130

Other guarantees
 
Policyholder account balances
 
2

 
—

Embedded derivatives within liability host contracts
 
$
2,442

 
$
1,325
v3.20.1
Fair Value
 3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value
7. Fair Value
Considerable judgment is often required in interpreting the market data used to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.
Recurring Fair Value Measurements
The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at:
 
March 31, 2020
 
Fair Value Hierarchy
 
 
 
Level 1
 
Level 2
 
Level 3
 
Total 
Estimated
Fair Value
 
(In millions)
Assets
 
 
 
 
 
 
 
Fixed maturity securities AFS:
 
 
 
 
 
 
 
U.S. corporate
$
—

 
$
49,313

 
$
6,522

 
$
55,835

U.S. government and agency
11,591

 
22,144

 
—

 
33,735

Foreign corporate
—

 
21,190

 
6,456

 
27,646

RMBS
161

 
21,689

 
2,403

 
24,253

ABS
—

 
9,778

 
802

 
10,580

Municipals
—

 
8,293

 
—

 
8,293

CMBS
—

 
5,738

 
35

 
5,773

Foreign government
—

 
4,734

 
33

 
4,767

Total fixed maturity securities AFS
11,752

 
142,879

 
16,251

 
170,882

Short-term investments
2,159

 
1,761

 
354

 
4,274

Residential mortgage loans — FVO
—

 
—

 
180

 
180

Other investments
282

 
155

 
655

 
1,092

Derivative assets: (1)
 
 
 
 
 
 
 
Interest rate
—

 
9,085

 
1,149

 
10,234

Foreign currency exchange rate
—

 
3,895

 
10

 
3,905

Credit
—

 
45

 
20

 
65

Equity market
7

 
1,140

 
44

 
1,191

Total derivative assets
7

 
14,165

 
1,223

 
15,395

Separate account assets (2)
22,995

 
87,604

 
942

 
111,541

Total assets (3)
$
37,195

 
$
246,564

 
$
19,605

 
$
303,364

Liabilities
 
 
 
 
 
 
 
Derivative liabilities: (1)
 
 
 
 
 
 
 
Interest rate
$
—

 
$
672

 
$
—

 
$
672

Foreign currency exchange rate
—

 
1,857

 
—

 
1,857

Credit
—

 
56

 
21

 
77

Equity market
1

 
185

 
10

 
196

Total derivative liabilities
1

 
2,770

 
31

 
2,802

Embedded derivatives within liability host contracts (4)
—

 
—

 
2,442

 
2,442

Separate account liabilities (2)
4

 
46

 
15

 
65

Total liabilities
$
5

 
$
2,816

 
$
2,488

 
$
5,309

 
December 31, 2019
 
Fair Value Hierarchy
 
 
 
Level 1
 
Level 2
 
Level 3
 
Total 
Estimated
Fair Value
 
(In millions)
Assets
 
 
 
 
 
 
 
Fixed maturity securities AFS:
 
 
 
 
 
 
 
U.S. corporate
$
—

 
$
53,975

 
$
4,484

 
$
58,459

Foreign corporate
—

 
25,403

 
4,898

 
30,301

U.S. government and agency
11,484

 
17,764

 
—

 
29,248

RMBS
3

 
20,158

 
2,612

 
22,773

ABS
—

 
9,459

 
742

 
10,201

Municipals
—

 
7,849

 
7

 
7,856

CMBS
—

 
5,679

 
41

 
5,720

Foreign government
—

 
4,996

 
10

 
5,006

Total fixed maturity securities AFS
11,487

 
145,283

 
12,794

 
169,564

Short-term investments
1,077

 
789

 
17

 
1,883

Residential mortgage loans — FVO
—

 
—

 
188

 
188

Other investments
396

 
56

 
799

 
1,251

Derivative assets: (1)
 
 
 
 
 
 
 
Interest rate
—

 
5,690

 
80

 
5,770

Foreign currency exchange rate
—

 
1,642

 
—

 
1,642

Credit
—

 
172

 
32

 
204

Equity market
—

 
439

 
25

 
464

Total derivative assets
—

 
7,943

 
137

 
8,080

Separate account assets (2)
22,753

 
94,192

 
922

 
117,867

Total assets (3)
$
35,713

 
$
248,263

 
$
14,857

 
$
298,833

Liabilities
 
 
 
 
 
 
 
Derivative liabilities: (1)
 
 
 
 
 
 
 
Interest rate
$
—

 
$
167

 
$
191

 
$
358

Foreign currency exchange rate
—

 
1,225

 
—

 
1,225

Credit
—

 
11

 
1

 
12

Equity market
5

 
485

 
17

 
507

Total derivative liabilities
5

 
1,888

 
209

 
2,102

Embedded derivatives within liability host contracts (4)
—

 
—

 
1,325

 
1,325

Separate account liabilities (2)
1

 
14

 
7

 
22

Total liabilities
$
6

 
$
1,902

 
$
1,541

 
$
3,449

__________________
(1)
Derivative assets are presented within other invested assets on the interim condensed consolidated balance sheets and derivative liabilities are presented within other liabilities on the interim condensed consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the interim condensed consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables.
(2)
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. Separate account liabilities presented in the tables above represent derivative liabilities.
(3)
Total assets included in the fair value hierarchy exclude other limited partnership interests that are measured at estimated fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient. At March 31, 2020 and December 31, 2019, the estimated fair value of such investments was $88 million and $90 million, respectively.
(4)
Embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities on the interim condensed consolidated balance sheets.
The following describes the valuation methodologies used to measure assets and liabilities at fair value.
Investments
Securities, Short-term Investments and Other Investments
When available, the estimated fair value of these financial instruments is based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company’s securities holdings and valuation of these securities does not involve management’s judgment.
When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies, giving priority to observable inputs. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. When observable inputs are not available, the market standard valuation methodologies rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs can be based in large part on management’s judgment or estimation and cannot be supported by reference to market activity. Even though these inputs are unobservable, management believes they are consistent with what other market participants would use when pricing such securities and are considered appropriate given the circumstances.
The estimated fair value of other investments is determined on a basis consistent with the methodologies described herein for securities.
The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy are presented below. The primary valuation approaches are the market approach, which considers recent prices from market transactions involving identical or similar assets or liabilities, and the income approach, which converts expected future amounts (e.g. cash flows) to a single current, discounted amount. The valuation of most instruments listed below is determined using independent pricing sources, matrix pricing, discounted cash flow methodologies or other similar techniques that use either observable market inputs or unobservable inputs.
Instrument
 
Level 2
Observable Inputs
Level 3
Unobservable Inputs
Fixed maturity securities AFS
U.S. corporate and Foreign corporate securities
 
Valuation Approaches: Principally the market and income approaches.
Valuation Approaches: Principally the market approach.
 
Key Inputs:
Key Inputs:
 
•
quoted prices in markets that are not active
•
illiquidity premium
 
•
benchmark yields; spreads off benchmark yields; new issuances; issuer ratings
•
delta spread adjustments to reflect specific credit-related issues
 
•
trades of identical or comparable securities; duration
•
credit spreads
 
•
privately-placed securities are valued using the additional key inputs:
•
quoted prices in markets that are not active for identical or similar
securities that are less liquid and based on lower levels of trading
activity than securities classified in Level 2
 
 
•
market yield curve; call provisions
 
 
 
•
observable prices and spreads for similar public or private securities that
incorporate the credit quality and industry sector of the issuer
•

independent non-binding broker quotations
 
 
•
delta spread adjustments to reflect specific credit-related issues
 
 
U.S. government and agency securities, Municipals and Foreign government securities
 
Valuation Approaches: Principally the market approach.
Valuation Approaches: Principally the market approach.
 
Key Inputs:
Key Inputs:
 
•
quoted prices in markets that are not active
•
independent non-binding broker quotations
 
•
benchmark U.S. Treasury yield or other yields
•
quoted prices in markets that are not active for identical or similar
securities that are less liquid and based on lower levels of trading
activity than securities classified in Level 2
 
•
the spread off the U.S. Treasury yield curve for the identical security
 
 
•
issuer ratings and issuer spreads; broker-dealer quotes
•
credit spreads
 
•
comparable securities that are actively traded
 
 
Structured Products
 
Valuation Approaches: Principally the market and income approaches.
Valuation Approaches: Principally the market and income approaches.
 
Key Inputs:
Key Inputs:
 
•
quoted prices in markets that are not active
•
credit spreads
 
•
spreads for actively traded securities; spreads off benchmark yields
•
quoted prices in markets that are not active for identical or similar
securities that are less liquid and based on lower levels of trading
activity than securities classified in Level 2
 
•
expected prepayment speeds and volumes
 
 
•
current and forecasted loss severity; ratings; geographic region
•
independent non-binding broker quotations
 
•
weighted average coupon and weighted average maturity
•
credit ratings
 
•
average delinquency rates; debt-service coverage ratios
 
 
 
•
credit ratings
 
 
 
•
issuance-specific information, including, but not limited to:
 
 
 
 
•
collateral type; structure of the security; vintage of the loans
 
 
 
 
•
payment terms of the underlying assets
 
 
 
 
•
payment priority within the tranche; deal performance
 
 
Instrument
Level 2
Observable Inputs
Level 3
Unobservable Inputs
Short-term investments and Other investments
 
•
Certain short-term investments and other investments are of a similar nature and class to the fixed maturity securities AFS described above; while certain other investments are similar to equity securities. The valuation approaches and observable inputs used in their valuation are also similar to those described above. Other investments contain equity securities valued using quoted pries in markets that are not considered active.
•
Certain short-term investments and other investments are of a similar nature and class to the fixed maturity securities AFS described above; while certain other investments are similar to equity securities. The valuation approaches and unobservable inputs used in their valuation are also similar to those described above. Other investments contain equity securities that use key unobservable inputs such as credit ratings; issuance structures, in addition to those described above for fixed maturities AFS.
Residential mortgage loans — FVO
 
•
N/A
Valuation Approaches: Principally the market approach.
 
 
 
Valuation Techniques and Key Inputs: These investments are based primarily on matrix pricing or other similar techniques that utilize inputs from mortgage servicers that are unobservable or cannot be derived principally from, or corroborated by, observable market data.
Separate account assets and Separate account liabilities (1)
Mutual funds and hedge funds without readily determinable fair values as prices are not published publicly
 
Key Input:
•
N/A
 
•
quoted prices or reported NAV provided by the fund managers
 
 
Other limited partnership interests
 
•

N/A
Valued giving consideration to the underlying holdings
of the partnerships and adjusting, if appropriate.
 
 
 
Key Inputs:
 
 
 
•
liquidity; bid/ask spreads; performance record of the fund manager
 
 
 
•
other relevant variables that may impact the exit value of the particular
partnership interest
__________________
(1)
Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests, fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. Fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents are similar in nature to the instruments described under “— Securities, Short-term Investments and Other Investments” and “— Derivatives — Freestanding Derivatives.”
Derivatives
The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models.
The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral and OTC-cleared derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and management believes they are consistent with what other market participants would use when pricing such instruments.
Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives and could materially affect net income.
The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is, in part, due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period.
Freestanding Derivatives
Level 2 Valuation Approaches and Key Inputs:
This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3.
Level 3 Valuation Approaches and Key Inputs:
These valuation methodologies generally use the same inputs as described in the corresponding sections for Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data.
Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. Key inputs are as follows:
Instrument
 
Interest Rate
 
Foreign Currency
Exchange Rate
 
Credit
 
Equity Market
Inputs common to Level 2 and Level 3 by instrument type
•
swap yield curves
•
swap yield curves
•
swap yield curves
•
swap yield curves
•
basis curves
•
basis curves
•
credit curves
•
spot equity index levels
•
interest rate volatility (1)
•
currency spot rates
•
recovery rates
•
dividend yield curves
 
 
 
•
cross currency basis curves
 
 
•
equity volatility (1)
 
 
 
 
 
 
 
 
 
Level 3
•
swap yield curves (2)
•
swap yield curves (2)
•
swap yield curves (2)
•
dividend yield curves (2)
 
•
basis curves (2)
•
basis curves (2)
•
credit curves (2)
•
equity volatility (1), (2)
 
•
repurchase rates
•
cross currency basis curves (2)
•

credit spreads
•
correlation between model
inputs (1)
 
 
 
•
currency correlation
•
repurchase rates
 
 
 
 
 
 
 
•
independent non-binding
broker quotations
 
 
__________________
(1)
Option-based only.
(2)
Extrapolation beyond the observable limits of the curve(s).
Embedded Derivatives
Embedded derivatives principally include certain direct and assumed variable annuity guarantees, annuity contracts, and investment risk within funds withheld related to certain reinsurance agreements. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income.
The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs contain embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets.
The Company calculates the fair value of these embedded derivatives, which is estimated as the present value of projected future benefits minus the present value of projected future fees using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, projecting future cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk-free rates.
Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience.
The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries as compared to MetLife, Inc.
Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income.
The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as described in “— Investments — Securities, Short-term Investments and Other Investments.” The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities on the consolidated balance sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income.
Embedded Derivatives Within Asset and Liability Host Contracts
Level 3 Valuation Approaches and Key Inputs:
Direct and assumed guaranteed minimum benefits
These embedded derivatives are principally valued using the income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curves, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curves and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin.
Embedded derivatives within funds withheld related to certain ceded reinsurance
These embedded derivatives are principally valued using the income approach. The valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curves and the fair value of assets within the reference portfolio. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include the fair value of certain assets within the reference portfolio which are not observable in the market and cannot be derived principally from, or corroborated by, observable market data.
Transfers between Levels
Overall, transfers between levels occur when there are changes in the observability of inputs and market activity.
Transfers into or out of Level 3:
Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable.
Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)
The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:
 
 
 
 
 
 
 
March 31, 2020
 
December 31, 2019
 
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 AFS (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. corporate and foreign corporate
•
Matrix pricing
 
•
Offered quotes (4)
 
—
-
191
 
104
 
5
-
145
 
110
 
Increase
 
•
Market pricing

•
Quoted prices (4)

20
-
130

98

25
-
131

101

Increase
RMBS
•
Market pricing
 
•
Quoted prices (4)
 
—
-
126
 
89
 
—
-
119
 
95
 
Increase (5)
ABS
•
Market pricing
 
•
Quoted prices (4)
 
5
-
101
 
90
 
8
-
101
 
98
 
Increase (5)
Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate
•
Present value techniques
 
•
Swap yield (6)
 
66
-
147
 
117
 
190
-
251
 
 
 
Increase (7)
 
 
 
 
•
Repurchase rates (8)
 
(18)
-
—
 
(10)
 
(6)
-
6
 
 
 
Decrease (7)
Foreign currency exchange rate
•
Present value techniques
 
•
Swap yield (6)
 
(23)
-
(12)
 
(18)
 
(22)
-
(5)
 
 
 
Increase (7)
Credit
•
Present value techniques
 
•
Credit spreads (9)
 
98
-
104
 
100
 
96
-
100
 
 
 
Decrease (7)
 
•
Consensus pricing
 
•
Offered quotes (10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity market
•
Present value techniques or option pricing models
 
•
Volatility (11)
 
29%
-
56%

32%

14%
-
23%
 
 
 
Increase (7)
 
 
 
 
•
Correlation (12)
 
10%
-
30%

13%

10%
-
30%
 
 
 
 
Embedded derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct and assumed guaranteed minimum benefits
•
Option pricing techniques
 
•
Mortality rates:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ages 0 - 40
 
0.01%
-
0.18%
 
0.06%
 
0.01%
-
0.18%
 
 
 
Decrease (13)
 
 
 
 
 
Ages 41 - 60
 
0.04%
-
0.57%
 
0.30%
 
0.04%
-
0.57%
 
 
 
Decrease (13)
 
 
 
 
 
Ages 61 - 115
 
0.26%
-
100%
 
1.90%
 
0.26%
-
100%
 
 
 
Decrease (13)
 
 
 
 
•
Lapse rates:
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Durations 1 - 10
 
0.25%
-
100%
 
7.90%
 
0.25%
-
100%
 
 
 
Decrease (14)
 
 
 
 
 
Durations 11 - 20
 
3%
-
100%
 
6.40%
 
3%
-
100%
 
 
 
Decrease (14)
 
 
 
 
 
Durations 21 - 116
 
2%
-
100%
 
6.40%
 
2%
-
100%
 
 
 
Decrease (14)
 
 
 
 
•
Utilization rates
 
0%
-
22%
 
0.90%
 
0%
-
22%
 
 
 
Increase (15)
 
 
 
 
•
Withdrawal rates
 
0.25%
-
10%
 
4.23%
 
0.25%
-
10%
 
 
 
(16)
 
 
 
 
•
Long-term equity volatilities
 
16.24%
-
21.65%
 
18.30%
 
16.24%
-
21.65%
 
 
 
Increase (17)
 
 
 
 
•
Nonperformance risk spread
 
0.08%
-
0.56%
 
0.49%
 
0.03%
-
0.43%
 
 
 
Decrease (18)
__________________
(1)
The weighted average for fixed maturity securities AFS and derivatives is determined based on the estimated fair value of the securities. The weighted average for embedded derivatives is determined based on a combination of account values and experience data.
(2)
The impact of a decrease in input would have resulted in the opposite impact on estimated fair value. For embedded derivatives, changes to direct and assumed guaranteed minimum benefits are based on liability positions.
(3)
Significant increases (decreases) in expected default rates in isolation would have resulted in substantially lower (higher) valuations.
(4)
Range and weighted average are presented in accordance with the market convention for fixed maturity securities AFS of dollars per hundred dollars of par.
(5)
Changes in the assumptions used for the probability of default would have been 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.
(6)
Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are 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.
(7)
Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions.
(8)
Ranges represent different repurchase rates utilized as components within the valuation methodology and are presented in basis points.
(9)
Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps.
(10)
At both March 31, 2020 and December 31, 2019, 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)
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.
(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 contractholders 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.
Generally, all other classes of assets and liabilities classified within Level 3 that are not included in the preceding table use the same valuation techniques and significant unobservable inputs as previously described for Level 3. The sensitivity of the estimated fair value to changes in the significant unobservable inputs for these other assets and liabilities is similar in nature to that described in the preceding table.
The following tables summarize the change of all assets (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):
 
 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
 
 
Fixed Maturity Securities AFS
 
 
 
 
Corporate (6)

Structured Products
 
Foreign Government

Municipals
 
Short-term
Investments
 
 
(In millions)
Three Months Ended March 31, 2020
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
9,382

 
$
3,395

 
$
10

 
$
7

 
$
17

Total realized/unrealized gains (losses) included in net income (loss) (1), (2)
 
(58
)
 
10

 
—

 
—

 
—

Total realized/unrealized gains (losses) included in AOCI
 
(766
)
 
(287
)
 
(3
)
 
—

 
—

Purchases (3)
 
1,660

 
257

 
26

 
—

 
352

Sales (3)
 
(515
)
 
(161
)
 
—

 
—

 
(1
)
Issuances (3)
 
—

 
—

 
—

 
—

 
—

Settlements (3)
 
—

 
—

 
—

 
—

 
—

Transfers into Level 3 (4)
 
3,594

 
45

 
1

 
—

 
—

Transfers out of Level 3 (4)
 
(319
)
 
(19
)
 
(1
)
 
(7
)
 
(14
)
Balance, end of period
 
$
12,978

 
$
3,240

 
$
33

 
$
—

 
$
354

Three Months Ended March 31, 2019
 


 
 
 


 
 
 


Balance, beginning of period
 
$
7,101

 
$
3,541

 
$
10

 
$
—

 
$
25

Total realized/unrealized gains (losses) included in net income (loss) (1), (2)
 
(2
)
 
13

 
—

 
—

 
—

Total realized/unrealized gains (losses) included in AOCI
 
230

 
19

 
—

 
—

 
—

Purchases (3)
 
330

 
128

 
11

 
—

 
102

Sales (3)
 
(168
)
 
(131
)
 
—

 
—

 
—

Issuances (3)
 
—

 
—

 
—

 
—

 
—

Settlements (3)
 
—

 
—

 
—

 
—

 
—

Transfers into Level 3 (4)
 
190

 
—

 
—

 
—

 
—

Transfers out of Level 3 (4)
 
(351
)
 
(256
)
 
—

 
—

 
—

Balance, end of period
 
$
7,330

 
$
3,314

 
$
21

 
$
—

 
$
127

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2020: (5)
 
$
(58
)
 
$
10

 
$
—

 
$
—

 
$
—

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2019: (5)
 
$
(2
)
 
$
13

 
$
—

 
$
—

 
$
—

Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2020 (5)
 
$
(770
)
 
$
(287
)
 
$
(3
)
 
$
—

 
$
—

 
 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
 
 
Residential
Mortgage
Loans - FVO
 
Other
 Investments
 
Net
Derivatives (7)
 
Net Embedded
Derivatives (8)
 
Separate
Accounts (9) 
 
 
(In millions)
Three Months Ended March 31, 2020
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
188

 
$
799

 
$
(72
)
 
$
(1,325
)
 
$
915

Total realized/unrealized gains (losses) included in net income (loss) (1), (2)
 
2

 
(48
)
 
266

 
(1,073
)
 
(9
)
Total realized/unrealized gains (losses) included in AOCI
 
—

 
—

 
1,111

 
—

 
—

Purchases (3)
 
—

 
15

 
—

 
—

 
85

Sales (3)
 
(5
)
 
(33
)
 
—

 
—

 
(56
)
Issuances (3)
 
—

 
—

 
—

 
—

 
(1
)
Settlements (3)
 
(5
)
 
—

 
(113
)
 
(44
)
 
—

Transfers into Level 3 (4)
 
—

 
—

 
—

 
—

 
10

Transfers out of Level 3 (4)
 
—

 
(78
)
 
—

 
—

 
(17
)
Balance, end of period
 
$
180

 
$
655

 
$
1,192

 
$
(2,442
)
 
$
927

Three Months Ended March 31, 2019
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
299

 
$
571

 
$
(192
)
 
$
(704
)
 
$
937

Total realized/unrealized gains (losses) included in net income (loss) (1), (2)
 
2

 
51

 
35

 
(98
)
 
3

Total realized/unrealized gains (losses) included in AOCI
 
—

 
—

 
98

 
—

 
—

Purchases (3)
 
—

 
2

 
—

 
—

 
80

Sales (3)
 
(16
)
 
(20
)
 
—

 
—

 
(122
)
Issuances (3)
 
—

 
—

 
—

 
—

 
2

Settlements (3)
 
(9
)
 
—

 
(28
)
 
(45
)
 
(1
)
Transfers into Level 3 (4)
 
—

 
—

 
—

 
—

 
—

Transfers out of Level 3 (4)
 
—

 
—

 
—

 
—

 
(2
)
Balance, end of period
 
$
276

 
$
604

 
$
(87
)
 
$
(847
)
 
$
897

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2020: (5)
 
$
—

 
$
(40
)
 
$
222

 
$
(1,071
)
 
$
—

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2019: (5)
 
$
—

 
$
44

 
$
37

 
$
(97
)
 
$
—

Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2020 (5)
 
$
—

 
$
—

 
$
1,060

 
$
—

 
$
—

__________________
(1)
Amortization of premium/accretion of discount is included within net investment income. Impairments charged to net income (loss) on securities are included in net investment gains (losses), while changes in estimated fair value of residential mortgage loans — FVO are included in net investment income. Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported 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)
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) and included in AOCI relate to assets and liabilities still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).
(6)
Comprised of U.S. and foreign corporate securities.
(7)
Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
(8)
Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
(9)
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 (loss). For the purpose of this disclosure, these changes are presented within net investment gains (losses). Separate account assets and liabilities are presented net for the purposes of the rollforward.
Fair Value Option
The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. The following table presents information for residential mortgage loans, which are accounted for under the FVO and were initially measured at fair value.
 
March 31, 2020
 
December 31, 2019
 
(In millions)
Unpaid principal balance
$
196

 
$
209

Difference between estimated fair value and unpaid principal balance
(16
)
 
(21
)
Carrying value at estimated fair value
$
180

 
$
188

Loans in nonaccrual status
$
43

 
$
47

Loans more than 90 days past due
$
18

 
$
18

Loans in nonaccrual status or more than 90 days past due, or both — difference between aggregate estimated fair value and unpaid principal balance
$
(16
)
 
$
(19
)

Fair Value of Financial Instruments Carried at Other Than Fair Value
The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities loaned and other transactions, short-term debt and those short-term investments that are not securities, such as time deposits, and therefore are not included in the three-level hierarchy table disclosed in the “— Recurring Fair Value Measurements” section. The Company believes that due to the short-term nature of these excluded assets, which are primarily classified in Level 2, the estimated fair value approximates carrying value. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure.
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:
 
March 31, 2020
 
 
 
Fair Value Hierarchy
 
 
 
Carrying
Value
 
Level 1
 
Level 2
 
Level 3
 
Total
Estimated
Fair Value
 
(In millions)
Assets
 
 
 
 
 
 
 
 
 
Mortgage loans
$
65,861

 
$
—

 
$
—

 
$
67,699

 
$
67,699

Policy loans
$
6,103

 
$
—

 
$
266

 
$
7,331

 
$
7,597

Other invested assets
$
3,010

 
$
—

 
$
2,755

 
$
89

 
$
2,844

Premiums, reinsurance and other
receivables
$
14,087

 
$
—

 
$
435

 
$
14,621

 
$
15,056

Liabilities
 
 
 
 
 
 
 
 
 
Policyholder account balances
$
74,765

 
$
—

 
$
—

 
$
80,299

 
$
80,299

Long-term debt
$
1,621

 
$
—

 
$
1,824

 
$
—

 
$
1,824

Other liabilities
$
14,467

 
$
—

 
$
1,857

 
$
13,023

 
$
14,880

Separate account liabilities
$
54,516

 
$
—

 
$
54,516

 
$
—

 
$
54,516

 
December 31, 2019
 
 
 
Fair Value Hierarchy
 
 
 
Carrying
Value
 
Level 1
 
Level 2
 
Level 3
 
Total
Estimated
Fair Value
 
(In millions)
Assets
 
 
 
 
 
 
 
 
 
Mortgage loans
$
65,361

 
$
—

 
$
—

 
$
67,680

 
$
67,680

Policy loans
$
6,100

 
$
—

 
$
263

 
$
6,935

 
$
7,198

Other invested assets
$
2,964

 
$
—

 
$
2,708

 
$
158

 
$
2,866

Premiums, reinsurance and other
receivables
$
14,042

 
$
—

 
$
367

 
$
14,488

 
$
14,855

Liabilities
 
 
 
 
 
 
 
 
 
Policyholder account balances
$
73,693

 
$
—

 
$
—

 
$
75,885

 
$
75,885

Long-term debt
$
1,543

 
$
—

 
$
1,888

 
$
—

 
$
1,888

Other liabilities
$
12,789

 
$
—

 
$
113

 
$
12,819

 
$
12,932

Separate account liabilities
$
52,830

 
$
—

 
$
52,830

 
$
—

 
$
52,830
v3.20.1
Equity
 3 Months Ended
Mar. 31, 2020
Equity [Abstract]  
Equity 8. Equity
Accumulated Other Comprehensive Income (Loss)
Information regarding changes in the balances of each component of AOCI attributable to Metropolitan Life Insurance Company was as follows:
 
Three Months
Ended
March 31, 2020
 
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
$
8,876

 
$
1,620

 
$
(97
)
 
$
(374
)
 
$
10,025

OCI before reclassifications
(2,219
)
 
3,291

 
16

 
—

 
1,088

Deferred income tax benefit (expense)
494

 
(691
)
 
(5
)
 
—

 
(202
)
AOCI before reclassifications, net of income tax
7,151

 
4,220

 
(86
)
 
(374
)
 
10,911

Amounts reclassified from AOCI
33

 
439

 
—

 
9

 
481

Deferred income tax benefit (expense)
(7
)
 
(92
)
 
—

 
(2
)
 
(101
)
Amounts reclassified from AOCI, net of income tax
26

 
347

 
—

 
7

 
380

Balance, end of period
$
7,177

 
$
4,567

 
$
(86
)
 
$
(367
)
 
$
11,291

 
Three Months
Ended
March 31, 2019
 
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
$
2,515

 
$
1,382

 
$
(74
)
 
$
(261
)
 
$
3,562

OCI before reclassifications
3,604

 
94

 
(3
)
 
(1
)
 
3,694

Deferred income tax benefit (expense)
(754
)
 
(21
)
 
3

 
—

 
(772
)
AOCI before reclassifications, net of income tax
5,365

 
1,455

 
(74
)
 
(262
)
 
6,484

Amounts reclassified from AOCI
58

 
(45
)
 
—

 
6

 
19

Deferred income tax benefit (expense)
(12
)
 
10

 
—

 
(1
)
 
(3
)
Amounts reclassified from AOCI, net of income tax
46

 
(35
)
 
—

 
5

 
16

Cumulative effects of changes in accounting principles
(1
)
 
22

 
—

 
—

 
21

Deferred income tax benefit (expense), cumulative effects of changes in accounting principles
—

 
(4
)
 
—

 
—

 
(4
)
Cumulative effects of changes in accounting principles, net of income tax (2)
(1
)
 
18

 
—

 
—

 
17

Balance, end of period
$
5,410

 
$
1,438

 
$
(74
)
 
$
(257
)
 
$
6,517

__________________
(1)
See Note 5 for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI, and the policyholder dividend obligation.
(2)
See Note 1 of the Notes to the Consolidated Financial Statements included in the 2019 Annual Report for further information on adoption of new accounting pronouncements.
Information regarding amounts reclassified out of each component of AOCI was as follows:
 
 
Three Months
Ended
March 31,
 
 
 
 
2020
 
2019
 
 
AOCI Components
 
Amounts Reclassified from AOCI
 
Consolidated Statements of
Operations and
Comprehensive Income (Loss)
Locations
 
 
(In millions)
 
 
Net unrealized investment gains (losses):
 
 
 
 
 
 
Net unrealized investment gains (losses)
 
$
(26
)
 
$
(41
)
 
Net investment gains (losses)
Net unrealized investment gains (losses)
 
(6
)
 
—

 
Net investment income
Net unrealized investment gains (losses)
 
(1
)
 
(17
)
 
Net derivative gains (losses)
Net unrealized investment gains (losses), before income tax
 
(33
)
 
(58
)
 
 
Income tax (expense) benefit
 
7

 
12

 
 
Net unrealized investment gains (losses), net of income tax
 
(26
)
 
(46
)
 
 
Unrealized gains (losses) on derivatives - cash flow hedges:
 
 
 
 
 
 
Interest rate derivatives
 
6

 
5

 
Net investment income
Interest rate derivatives
 
6

 
(6
)
 
Net investment gains (losses)
Foreign currency exchange rate derivatives
 
—

 
(1
)
 
Net investment income
Foreign currency exchange rate derivatives
 
(451
)
 
47

 
Net investment gains (losses)
Gains (losses) on cash flow hedges, before income tax
 
(439
)
 
45

 
 
Income tax (expense) benefit
 
92

 
(10
)
 
 
Gains (losses) on cash flow hedges, net of income tax
 
(347
)
 
35

 
 
Defined benefit plans adjustment: (1)
 
 
 
 
 
 
Amortization of net actuarial gains (losses)
 
(10
)
 
(7
)
 
 
Amortization of prior service (costs) credit
 
1

 
1

 
 
Amortization of defined benefit plan items, before income tax
 
(9
)
 
(6
)
 
 
Income tax (expense) benefit
 
2

 
1

 
 
Amortization of defined benefit plan items, net of income tax
 
(7
)
 
(5
)
 
 
Total reclassifications, net of income tax
 
$
(380
)
 
$
(16
)
 
 
__________________
(1)
These AOCI components are included in the computation of net periodic benefit costs. See Note 10.
v3.20.1
Other Revenues and Other Expenses
 3 Months Ended
Mar. 31, 2020
Other Income and Expenses [Abstract]  
Other Income and Other Expense Disclosure . Other Revenues and Other Expenses
Other Revenues
Information on other revenues, which primarily includes fees related to service contracts from customers, was as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
Prepaid legal plans
 
$
95

 
$
81

Recordkeeping and administrative services (1)
 
49

 
50

Administrative services-only contracts
 
56

 
53

Other revenue from service contracts from customers
 
9

 
19

Total revenues from service contracts from customers
 
209

 
203

Other
 
164

 
198

Total other revenues
 
$
373

 
$
401

__________________
(1)
Related to products and businesses no longer actively marketed by the Company.
Other Expenses
Information on other expenses was as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
General and administrative expenses (1)
 
$
595

 
$
570

Pension, postretirement and postemployment benefit costs
 
9

 
26

Premium taxes, other taxes, and licenses & fees
 
97

 
77

Commissions and other variable expenses
 
472

 
441

Capitalization of DAC
 
(10
)
 
(12
)
Amortization of DAC and VOBA
 
103

 
19

Interest expense on debt
 
25

 
27

Total other expenses
 
$
1,291

 
$
1,148


__________________
(1)
Includes $28 million and ($58) million for the three months ended March 31, 2020 and 2019, respectively, for the net change in cash surrender value of investments in certain life insurance policies, net of premiums paid.
Affiliated Expenses
Commissions and other variable expenses, capitalization of DAC and amortization of DAC and VOBA include the impact of affiliated reinsurance transactions. See Note 13 for a discussion of affiliated expenses included in the table above.
v3.20.1
Employee Benefit Plans
 3 Months Ended
Mar. 31, 2020
Retirement Benefits [Abstract]  
Employee Benefit Plans 10. Employee Benefit Plans
Pension and Other Postretirement Benefit Plans
Metropolitan Life Insurance Company sponsors nonqualified defined benefit pension plans covering employees who meet specified eligibility requirements and provides certain postretirement medical and life insurance benefits for retired employees.
The components of net periodic benefit costs, reported in other expenses, were as follows for pension benefits:
 
Three Months
Ended
March 31,
 
2020
 
2019
 
(In millions)
Service costs
$
5

 
$
4

Interest costs
10

 
12

Amortization of net actuarial (gains) losses
10

 
7

Amortization of prior service costs (credit)
(1
)
 
(1
)
Allocated to affiliates
(5
)
 
(6
)
Net periodic benefit costs (credit)
$
19

 
$
16
v3.20.1
Income Tax
 3 Months Ended
Mar. 31, 2020
Income Tax Disclosure [Abstract]  
Income Tax
11. Income Tax
For the three months ended March 31, 2020, the effective tax rate on income (loss) before provision for income tax was 18%. The Company’s effective tax rate for the three months ended March 31, 2020 differed from the U.S. statutory rate primarily due to tax benefits related to non-taxable investment income, tax credits and the finalization of bankruptcy proceedings for a leveraged lease investment.
For the three months ended March 31, 2019, the effective tax rate on income (loss) before provision for income tax was zero. The Company’s effective tax rate for the three months ended March 31, 2019 differed from the U.S. statutory rate primarily due to tax benefits related to non-taxable investment income and tax credits.
v3.20.1
Contingencies, Commitments and Guarantees
 3 Months Ended
Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Contingencies, Commitments and Guarantees
12. Contingencies, Commitments and Guarantees
Contingencies
Litigation
The Company is a defendant in a large number of litigation matters. Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed below and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, mortgage lender, employer, investor, investment advisor, broker-dealer, and taxpayer.
The Company also receives and responds to subpoenas or other inquiries seeking a broad range of information from state regulators, including state insurance commissioners; state attorneys general or other state governmental authorities; federal regulators, including the U.S. Securities and Exchange Commission; federal governmental authorities, including congressional committees; and the Financial Industry Regulatory Authority, as well as from local and national regulators and government authorities in jurisdictions outside the United States where the Company conducts business. The issues involved in information requests and regulatory matters vary widely, but can include inquiries or investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. The Company cooperates in these inquiries.
In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.
It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for a number of the matters noted below. It is possible that some of the matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably estimated at March 31, 2020. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known to management, management does not believe any such charges are likely to have a material effect on the Company’s financial position. Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.
Matters as to Which an Estimate Can Be Made
For some of the matters disclosed below, the Company is able to estimate a reasonably possible range of loss. For matters where a loss is believed to be reasonably possible, but not probable, the Company has not made an accrual. As of March 31, 2020, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to $175 million.
Matters as to Which an Estimate Cannot Be Made
For other matters disclosed below, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.
Asbestos-Related Claims
Metropolitan Life Insurance Company is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. Metropolitan Life Insurance Company has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products nor has Metropolitan Life Insurance Company issued liability or workers’ compensation insurance to companies in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities of one or more of Metropolitan Life Insurance Company’s employees during the period from the 1920’s through approximately the 1950’s and allege that Metropolitan Life Insurance Company learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. Metropolitan Life Insurance Company believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury and factors unrelated to the ultimate legal merit of the claims asserted against Metropolitan Life Insurance Company. Metropolitan Life Insurance Company employs a number of resolution strategies to manage its asbestos loss exposure, including seeking resolution of pending litigation by judicial rulings and settling individual or groups of claims or lawsuits under appropriate circumstances.
Claims asserted against Metropolitan Life Insurance Company have included negligence, intentional tort and conspiracy concerning the health risks associated with asbestos. Metropolitan Life Insurance Company’s defenses (beyond denial of certain factual allegations) include that: (i) Metropolitan Life Insurance Company owed no duty to the plaintiffs — it had no special relationship with the plaintiffs and did not manufacture, produce, distribute or sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs did not rely on any actions of Metropolitan Life Insurance Company; (iii) Metropolitan Life Insurance Company’s conduct was not the cause of the plaintiffs’ injuries; (iv) plaintiffs’ exposure occurred after the dangers of asbestos were known; and (v) the applicable time with respect to filing suit has expired. During the course of the litigation, certain trial courts have granted motions dismissing claims against Metropolitan Life Insurance Company, while other trial courts have denied Metropolitan Life Insurance Company’s motions. There can be no assurance that Metropolitan Life Insurance Company will receive favorable decisions on motions in the future. While most cases brought to date have settled, Metropolitan Life Insurance Company intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials.
As reported in the 2019 Annual Report, Metropolitan Life Insurance Company received approximately 3,187 asbestos-related claims in 2019. For the three months ended March 31, 2020 and 2019, Metropolitan Life Insurance Company received approximately 596 and 843 new asbestos-related claims, respectively. See Note 16 of the Notes to the Consolidated Financial Statements included in the 2019 Annual Report for historical information concerning asbestos claims and Metropolitan Life Insurance Company’s update in its recorded liability at December 31, 2019. The number of asbestos cases that may be brought, the aggregate amount of any liability that Metropolitan Life Insurance Company may incur, and the total amount paid in settlements in any given year are uncertain and may vary significantly from year to year.
The ability of Metropolitan Life Insurance Company to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict the numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and severity of disease in pending and future claims, the impact of the number of new claims filed in a particular jurisdiction and variations in the law in the jurisdictions in which claims are filed, the possible impact of tort reform efforts, the willingness of courts to allow plaintiffs to pursue claims against Metropolitan Life Insurance Company when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future adverse verdicts and their amounts.
The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the future. In the Company’s judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is reasonably possible that the Company’s total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that future charges to income may be necessary. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material effect on the Company’s financial position.
The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. Metropolitan Life Insurance Company’s recorded asbestos liability is based on its estimation of the following elements, as informed by the facts presently known to it, its understanding of current law and its past experiences: (i) the probable and reasonably estimable liability for asbestos claims already asserted against Metropolitan Life Insurance Company, including claims settled but not yet paid; (ii) the probable and reasonably estimable liability for asbestos claims not yet asserted against Metropolitan Life Insurance Company, but which Metropolitan Life Insurance Company believes are reasonably probable of assertion; and (iii) the legal defense costs associated with the foregoing claims. Significant assumptions underlying Metropolitan Life Insurance Company’s analysis of the adequacy of its recorded liability with respect to asbestos litigation include: (i) the number of future claims; (ii) the cost to resolve claims; and (iii) the cost to defend claims.
Metropolitan Life Insurance Company reevaluates on a quarterly and annual basis its exposure from asbestos litigation, including studying its claims experience, reviewing external literature regarding asbestos claims experience in the United States, assessing relevant trends impacting asbestos liability and considering numerous variables that can affect its asbestos liability exposure on an overall or per claim basis. These variables include bankruptcies of other companies involved in asbestos litigation, legislative and judicial developments, the number of pending claims involving serious disease, the number of new claims filed against it and other defendants and the jurisdictions in which claims are pending. Based upon its regular reevaluation of its exposure from asbestos litigation, Metropolitan Life Insurance Company has updated its liability analysis for asbestos-related claims through March 31, 2020.
Newman v. Metropolitan Life Insurance Company (N.D. Ill., filed March 23, 2016)
Plaintiff filed this putative class action alleging causes of action for breach of contract, fraud, and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, on behalf of herself and all persons over age 65 who selected a Reduced Pay at Age 65 payment feature on their long-term care insurance policies and whose premium rates were increased after age 65. Plaintiff seeks unspecified compensatory, statutory and punitive damages, as well as recessionary and injunctive relief. On April 12, 2017, the court granted Metropolitan Life Insurance Company’s motion to dismiss the action. Plaintiff appealed this ruling and the United States Court of Appeals for the Seventh Circuit reversed and remanded the case to the district court for further proceedings. On February 20, 2020, the district court approved a nationwide class settlement of the case. Metropolitan Life Insurance Company accrued the full amount of the expected settlement payment in prior periods.
Julian & McKinney v. Metropolitan Life Insurance Company (S.D.N.Y., filed February 9, 2017)
Plaintiffs filed this putative class and collective action on behalf of themselves and all current and former long-term disability (“LTD”) claims specialists between February 2011 and the present for alleged wage and hour violations under the Fair Labor Standards Act, the New York Labor Law, and the Connecticut Minimum Wage Act. The suit alleges that Metropolitan Life Insurance Company improperly reclassified the plaintiffs and similarly situated LTD claims specialists from non-exempt to exempt from overtime pay in November 2013. As a result, they and members of the putative class were no longer eligible for overtime pay even though they allege they continued to work more than 40 hours per week. Plaintiffs seek unspecified compensatory and punitive damages, as well as other relief. On March 22, 2018, the court conditionally certified the case as a collective action, requiring that notice be mailed to LTD claims specialists who worked for Metropolitan Life Insurance Company from February 8, 2014 to the present. Metropolitan Life Insurance Company intends to defend this action vigorously.
Total Asset Recovery Services, LLC. v. MetLife, Inc., et al. (Supreme Court of the State of New York, County of New York, filed December 27, 2017)
Total Asset Recovery Services (“The Relator”) brought an action under the qui tam provision of the New York False Claims Act (the “Act”) on behalf of itself and the State of New York. The Relator originally filed this action under seal in 2010, and the complaint was unsealed on December 19, 2017. The Relator alleges that MetLife, Inc., Metropolitan Life Insurance Company and several other insurance companies violated the Act by filing false unclaimed property reports with the State of New York from 1986 to 2017, to avoid having to escheat the proceeds of more than 25,000 life insurance policies, including policies for which the defendants escheated funds as part of their demutualizations in the late 1990s. The Relator seeks treble damages and other relief. On April 3, 2019, the court granted MetLife, Inc.’s and Metropolitan Life Insurance Company’s motion to dismiss and dismissed the complaint in its entirety. The Relator filed an appeal with the Appellate Division of the New York State Supreme Court, First Division.
Miller, et al. v. Metropolitan Life Insurance Company (S.D.N.Y., filed January 4, 2019)
Plaintiffs filed a second amended complaint in this putative class action, purporting to assert claims on behalf of all persons who replaced their MetLife Optional Term Life or Group Universal Life policy with a Group Variable Universal Life policy wherein Metropolitan Life Insurance Company allegedly charged smoker rates for certain non-smokers. Plaintiffs seek unspecified compensatory and punitive damages, as well as other relief. On September 17, 2019, the court granted Metropolitan Life Insurance Company’s motion to dismiss plaintiffs’ second amended complaint and dismissed the case in its entirety. Plaintiffs filed an appeal with the United States Court of Appeals for the Second Circuit.
Matters Related to Group Annuity Benefits
In 2018, the Company announced that it identified a material weakness in its internal control over financial reporting related to the practices and procedures for estimating reserves for certain group annuity benefits. Several regulators have made inquiries into this issue and it is possible that other jurisdictions may pursue similar investigations or inquiries. The Company is exposed to lawsuits, and could be exposed to additional legal actions relating to these issues. These may result in payments, including damages, fines, penalties, interest and other amounts assessed or awarded by courts or regulatory authorities under applicable escheat, tax, securities, Employee Retirement Income Security Act of 1974, or other laws or regulations. The Company could incur significant costs in connection with these actions.
Litigation Matters
Atkins et. al. v. MetLife, Inc., et. al. (D.Nev., filed November 18, 2019)
Plaintiffs filed this putative class action on behalf of all persons due benefits under group annuity contracts but who did not receive the entire amount to which they were entitled. Plaintiffs assert claims for breach of contract, breach of fiduciary duty, breach of implied covenant of good faith and fair dealing, unjust enrichment, and conversion based on allegations that the defendants failed to timely pay annuity benefits to certain group annuitants. Plaintiffs seek declaratory and injunctive relief, as well as unspecified compensatory and punitive damages, and other relief. On April 17, 2020, the parties filed a stipulation of voluntarily dismissal of the action without prejudice.
Commitments
Mortgage Loan Commitments
The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $2.5 billion and $3.7 billion at March 31, 2020 and December 31, 2019, respectively.
Commitments to Fund Partnership Investments, Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments
The Company commits to fund partnership investments and to lend funds under bank credit facilities, bridge loans and private corporate bond investments. The amounts of these unfunded commitments were $4.3 billion and $4.6 billion at March 31, 2020 and December 31, 2019, respectively.
Guarantees
In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $377 million, with a cumulative maximum of $505 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments.
In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future.
The Company’s recorded liabilities were $3 million at both March 31, 2020 and December 31, 2019 for indemnities, guarantees and commitments.
v3.20.1
Related Party Transactions
 3 Months Ended
Mar. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions 13. Related Party Transactions
Service Agreements
The Company has entered into various agreements with affiliates for services necessary to conduct its activities. Typical services provided under these agreements include personnel, policy administrative functions and distribution services. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual cost incurred by the Company and/or its affiliate. Expenses and fees incurred with affiliates related to these agreements, recorded in other expenses, were $611 million and $736 million for the three months ended March 31, 2020 and 2019, respectively. Total revenues received from affiliates related to these agreements were $10 million and $7 million for the three months ended March 31, 2020 and 2019, respectively.
The Company had net payables to affiliates, related to the items discussed above, of $148 million and $250 million at March 31, 2020 and December 31, 2019, respectively.
See Notes 5 and 10 for additional information on related party transactions.
Related Party Reinsurance Transactions
The Company has reinsurance agreements with certain of MetLife, Inc.’s subsidiaries, including MetLife Reinsurance Company of Charleston (“MRC”), MetLife Reinsurance Company of Vermont, and Metropolitan Tower Life Insurance Company, all of which are related parties.
Information regarding the significant effects of affiliated reinsurance on the interim condensed consolidated statements of operations and comprehensive income (loss) was as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
Premiums
 
 
 
 
Reinsurance assumed
 
$
2

 
$
3

Reinsurance ceded
 
(29
)
 
(32
)
Net premiums
 
$
(27
)
 
$
(29
)
Universal life and investment-type product policy fees
 
 
 
 
Reinsurance assumed
 
$
—

 
$
—

Reinsurance ceded
 
1

 
(6
)
Net universal life and investment-type product policy fees
 
$
1

 
$
(6
)
Other revenues
 
 
 
 
Reinsurance assumed
 
$
(9
)
 
$
(4
)
Reinsurance ceded
 
132

 
127

Net other revenues
 
$
123

 
$
123

Policyholder benefits and claims
 
 
 
 
Reinsurance assumed
 
$
1

 
$
1

Reinsurance ceded
 
(35
)
 
(33
)
Net policyholder benefits and claims
 
$
(34
)
 
$
(32
)
Interest credited to policyholder account balances
 
 
 
 
Reinsurance assumed
 
$
7

 
$
7

Reinsurance ceded
 
(3
)
 
(3
)
Net interest credited to policyholder account balances
 
$
4

 
$
4

Other expenses
 
 
 
 
Reinsurance assumed
 
$
—

 
$
—

Reinsurance ceded
 
135

 
125

Net other expenses
 
$
135

 
$
125


Information regarding the significant effects of affiliated reinsurance on the interim condensed consolidated balance sheets was as follows at:
 
March 31, 2020
 
December 31, 2019
 
Assumed
 
Ceded
 
Assumed
 
Ceded
 
(In millions)
Assets
 
 
 
 
 
 
 
Premiums, reinsurance and other receivables
$
—

 
$
12,548

 
$
—

 
$
12,584

Deferred policy acquisition costs and value of business acquired
—

 
(163
)
 
—

 
(160
)
Total assets
$
—

 
$
12,385

 
$
—

 
$
12,424

Liabilities
 
 
 
 
 
 
 
Future policy benefits
$
54

 
$
(11
)
 
$
55

 
$
(6
)
Policyholder account balances
128

 
—

 
131

 
—

Other policy-related balances
1

 
8

 
1

 
9

Other liabilities
835

 
12,557

 
824

 
12,695

Total liabilities
$
1,018

 
$
12,554

 
$
1,011

 
$
12,698


The Company ceded two blocks of business to an affiliate on a 75% coinsurance with funds withheld basis. Certain contractual features of these agreements qualify as embedded derivatives, which are separately accounted for at estimated fair value on the Company’s consolidated balance sheets. The embedded derivatives related to the funds withheld associated with these reinsurance agreements are included within other liabilities and were $36 million and $21 million at March 31, 2020 and December 31, 2019, respectively. Net derivative gains (losses) associated with these embedded derivatives were ($15) million and ($8) million for the three months ended March 31, 2020 and 2019, respectively.
Certain contractual features of the closed block agreement with MRC create an embedded derivative, which is separately accounted for at estimated fair value on the Company’s consolidated balance sheets. The embedded derivative related to the funds withheld associated with this reinsurance agreement was included within other liabilities and was $907 million and $996 million at March 31, 2020 and December 31, 2019, respectively. Net derivative gains (losses) associated with the embedded derivative were $89 million and ($222) million for the three months ended March 31, 2020 and 2019, respectively.
v3.20.1
Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain, including the novel coronavirus COVID-19 pandemic. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates.
Consolidation of Subsidiaries
The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2019 consolidated balance sheet data was derived from audited consolidated financial statements included in Metropolitan Life Insurance Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2019 Annual Report.
Consolidation
The accompanying interim condensed consolidated financial statements include the accounts of Metropolitan Life Insurance Company and its subsidiaries, as well as partnerships and joint ventures in which the Company has control, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated.
The Company uses the equity method of accounting or the fair value option (“FVO”) for real estate joint ventures and other limited partnership interests (“investee”) when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings in net investment income on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period.
Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity.
Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item.
Reclassification
Reclassifications
Certain amounts in the prior year periods’ interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform to the 2020 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements.
New Accounting Pronouncements
Summary of Significant Accounting Policies
The following are the Company’s significant accounting policies updated for the January 1, 2020 adoption of new accounting pronouncements related to investments.
Net Investment Income and Net Investment Gains (Losses)
Income from investments is reported within net investment income, unless otherwise stated herein. Gains and losses on sales of investments, intent-to-sell impairments, as well as provisions for credit loss in the allowance for credit loss (“ACL”) on fixed maturity securities available-for-sale (“AFS”), mortgage loans and investments in leases and subsequent changes in the ACL or for impairment losses on real estate investments, are reported within net investment gains (losses), unless otherwise stated herein. Accrued investment income is presented separately on the consolidated balance sheet and excluded from the carrying value of the related investments, primarily fixed maturity securities and mortgage loans.
Fixed Maturity Securities
The majority of the Company’s fixed maturity securities are classified as AFS and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income (loss) (“OCI”), net of policy-related amounts and deferred income taxes. All security transactions are recorded on a trade date basis. Sales of securities are determined on a specific identification basis.
Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premium and accretion of discount and is based on the estimated economic life of the securities, which for mortgage-backed and asset-backed securities considers the estimated timing and amount of prepayments of the underlying loans. See also Note 7 “— Fixed Maturity Securities AFS — Methodology for Amortization of Premium and Accretion of Discount on Structured Products” in the Notes to the Consolidated Financial Statements included in the 2019 Annual Report. The amortization of premium and accretion of discount also takes into consideration call and maturity dates.
The Company periodically evaluates its fixed maturity securities AFS for impairment. The assessment of whether impairments have occurred is based on management’s case-by-case evaluation of the underlying reasons for the decline in estimated fair value as described in Note 5 “— Fixed Maturity Securities Available-for-Sale — Evaluation of Fixed Maturity Securities AFS for Credit Loss.”
Prior to January 1, 2020, the Company applied other than temporary impairment (“OTTI”) guidance for securities in an unrealized loss position. An OTTI was recognized in earnings within net investment gains (losses) when it was anticipated that the amortized cost would not be recovered. When either: (i) the Company had the intent to sell the security, or (ii) it was more likely than not that the Company would be required to sell the security before recovery, the reduction of amortized cost and the OTTI recognized in earnings was the entire difference between the security’s amortized cost and estimated fair value. If neither of these conditions existed, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected was recognized as a reduction of amortized cost and an OTTI in earnings. If the estimated fair value was less than the present value of projected future cash flows expected to be collected, this portion of OTTI related to other-than-credit factors was recorded in OCI.
On January 1, 2020, the Company adopted accounting standards update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) using a modified retrospective approach. Under ASU 2016-13, for securities in an unrealized loss position, a credit loss is recognized in earnings within net investment gains (losses) when it is anticipated that the amortized cost will not be recovered. When either: (i) the Company has the intent to sell the security, or (ii) it is more likely than not that the Company will be required to sell the security before recovery, the reduction of amortized cost and the loss recognized in earnings is the entire difference between the security’s amortized cost and estimated fair value. If neither of these conditions exists, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected is recognized as a “credit loss” by establishing an ACL with a corresponding charge to earnings in net investment gains (losses). However, the ACL is limited by the amount that the fair value is less than the amortized cost. This limitation is known as the “fair value floor”. If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of the decline in value related to other-than-credit factors (“noncredit loss”) is recorded in OCI.
The new guidance also replaces the model for purchased credit impaired (“PCI”) fixed maturity securities AFS and financing receivables and requires the establishment of an ACL at acquisition, which is added to the purchase price to establish the initial amortized cost of the investment. Upon adoption, the replacement of the PCI model did not have a material impact on the Company’s interim condensed consolidated financial statements.
Mortgage Loans
ASU 2016-13 requires an ACL based on the expectation of lifetime credit loss on financing receivables carried at amortized cost, including, but not limited to, mortgage loans and leveraged and direct financing leases, as described in Note 5.
The Company disaggregates its mortgage loan investments into three portfolio segments: commercial, agricultural and residential. Also included in commercial mortgage loans are revolving line of credit loans collateralized by commercial properties. The accounting policies that are applicable to all portfolio segments are presented below and the accounting policies related to each of the portfolio segments are included in Note 5.
Mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, and are net of ACL. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premium and accretion of discount.
The Company ceases to accrue interest when the collection of interest is not considered probable, which is based on a current evaluation of the status of the borrower including the number of days past due. When a loan is placed on non-accrual status, uncollected past due accrued interest income that is considered uncollectible is charged-off against net investment income. Generally, the accrual of interest income resumes after all delinquent amounts are paid and management believes all future principal and interest payments will be collected. The Company records cash receipts on non-accruing loans in accordance with the loan agreement. The Company records charge-offs upon the realization of a credit loss, typically through foreclosure or after a decision is made to sell a loan, or for residential loans when, after considering the individual consumer’s financial status, management believes amounts are not collectible. Gain or loss upon charge-off is recorded, net of previously established ACL, in net investment gains (losses). Cash recoveries on principal amounts previously charged-off are generally recorded in net investment gains.
Also included in mortgage loans are residential mortgage loans for which the FVO was elected, and which are stated at estimated fair value. Changes in estimated fair value are recognized in net investment income.
Adoption of New Accounting Pronouncements
Except as noted below, the ASUs adopted by the Company effective January 1, 2020 did not have a material impact on its consolidated financial statements or disclosures.
Standard
Description
Effective Date and Method of Adoption
Impact on Financial Statements
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, with certain exceptions.

Effective for contract modifications made between March 12, 2020 and December 31, 2022

The new guidance will reduce the operational and financial impacts of contract modifications that replace a reference rate, such as London InterBank Offered Rate (LIBOR), affected by reference rate reform. The adoption of the new guidance did not have an impact on the Company’s interim condensed consolidated financial statements. The Company will continue to evaluate the impacts of reference rate reform on contract modifications and hedging relationships through December 31, 2022.
ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
The new guidance simplifies the former two-step goodwill impairment test by eliminating Step 2 of the test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The new guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any.
January 1, 2020, the Company adopted, using a prospective approach.
The adoption of the new guidance reduced the complexity involved with the evaluation of goodwill for impairment. The impact of the new guidance will depend on the outcomes of future goodwill impairment tests.
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as clarified and amended by ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses; ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments; ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief; and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses
This new guidance requires an ACL based on the expectation of lifetime credit loss on financing receivables carried at amortized cost, including, but not limited to, mortgage loans, premium receivables, reinsurance receivables and leveraged and direct financing leases.

The former model for OTTI on fixed maturity securities AFS has been modified and requires the recording of an ACL instead of a reduction of the amortized cost. Any improvements in expected future cash flows will no longer be reflected as a prospective yield adjustment, but instead will be reflected as a reduction in the ACL. The new guidance also replaces the model for PCI fixed maturity securities AFS and financing receivables and requires the establishment of an ACL at acquisition, which is added to the purchase price to establish the initial amortized cost of the investment.

The new guidance also requires enhanced disclosures.
January 1, 2020 for substantially all financial assets, the Company adopted using a modified retrospective approach. For previously impaired fixed maturity securities AFS and certain fixed maturity securities AFS acquired with evidence of credit quality deterioration since origination, the Company adopted prospectively on January 1, 2020.
The adoption of this guidance resulted in a $113 million, net of income tax, decrease to retained earnings primarily related to the Company’s mortgage loan investments. The Company has included the required disclosures within Note 5.
Investments
Maturities of Fixed Maturity Securities AFS
Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities AFS not due at a single maturity date have been presented in the year of final contractual maturity. Structured Products are shown separately, as they are not due at a single maturity.
Evaluation and Measurement Methodologies
Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (i) the extent to which the estimated fair value has been below amortized cost, (ii) adverse conditions specifically related to a security, an industry sector or sub-sector, or an economically depressed geographic area, adverse change in the financial condition of the issuer of the security, changes in technology, discontinuance of a segment of the business that may affect future earnings, and changes in the quality of credit enhancement, (iii) payment structure of the security and likelihood of the issuer being able to make payments, (iv) failure of the issuer to make scheduled interest and principal payments, (v) the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted natural resources, (vi) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers, (vii) with respect to Structured Products, changes in forecasted cash flows after considering the changes in the financial condition of the underlying loan obligors and quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security, (viii) changes in the rating of the security by a rating agency, and (ix) other subjective factors, including concentrations and information obtained from regulators.
The methodology and significant inputs used to determine the amount of credit loss are as follows:
•
The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security at the time of purchase for fixed-rate securities and the spot rate at the date of evaluation of credit loss for floating-rate securities.
•
When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall credit loss evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management’s single best estimate, the most likely outcome in a range of possible outcomes, after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; any private and public sector programs to restructure foreign government securities and municipals; and changes to the rating of the security or the issuer by rating agencies.
•
Additional considerations are made when assessing the unique features that apply to certain Structured Products including, but not limited to: the quality of underlying collateral, historical performance of the underlying loan obligors, historical rent and vacancy levels, changes in the financial condition of the underlying loan obligors, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, changes in the quality of credit enhancement and the payment priority within the tranche structure of the security.
With respect to securities that have attributes of debt and equity (“perpetual hybrid securities”), consideration is given in the credit loss analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments.
After the adoption of new guidance on January 1, 2020, in periods subsequent to the recognition of an initial ACL on a security, the Company reassesses credit loss quarterly. Subsequent increases or decreases in the expected cash flow from the security result in corresponding decreases or increases in the ACL which are recorded within net investment gains (losses); however, the previously recorded ACL is not reduced to an amount below zero. Full or partial write-offs are deducted from the ACL in the period the security, or a portion, is considered uncollectible. Recoveries of amounts previously written off are recorded to the ACL in the period received. When the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, any ACL is written off and the amortized cost is written down to estimated fair value through a charge within net investment gains (losses), which becomes the new amortized cost of the security.
In accordance with the previous guidance, methodologies to evaluate the recoverability of a security in an unrealized loss position were similar, except: (i) the length of time estimated fair value had been below amortized cost was considered for securities, and (ii) for non-functional currency denominated securities, the impact from weakening non-functional currencies on securities that were near maturity was considered in the evaluation. In addition, measurement methodologies were similar, except: (i) a fair value floor was not utilized to limit the credit loss recognized, (ii) the amortized cost of securities was adjusted for the OTTI to the expected recoverable amount and an ACL was not utilized, (iii) subsequent to a credit loss being recognized, increases in expected cash flows from the security did not result in an immediate increase in valuation recognized in earnings through net investment gains (losses) from reduction of the ACL instead such increases in value were recorded as unrealized gains in OCI, and (iv) in periods subsequent to the recognition of OTTI on a security, the Company accounted for the impaired security as if it had been purchased on the measurement date of the impairment; accordingly, the discount (or reduced premium) based on the new cost basis was accreted over the remaining term of the security in a prospective manner based on the amount and timing of estimated future cash flows.
Allowance for Credit Loss Methodology
After the adoption of new guidance on January 1, 2020, the Company records an allowance for expected credit loss in an amount that represents the portion of the amortized cost basis of mortgage loans that the Company does not expect to collect, resulting in mortgage loans being presented at the net amount expected to be collected. In determining the Company’s ACL, management: (i) pools mortgage loans that share similar risk characteristics, (ii) considers lifetime credit loss expected over the contractual term of its mortgage loans adjusted for expected prepayments and any extensions, and (iii) considers past events, current economic conditions and forecasts of future economic conditions. Each of the Company’s commercial, agricultural and residential mortgage loan portfolio segments are evaluated separately. The ACL is calculated for each mortgage loan portfolio segment based on inputs unique to each loan portfolio segment. On a quarterly basis, mortgage loans within a portfolio segment that share similar risk characteristics, such as internal risk ratings or consumer credit scores, are pooled for calculation of ACL. On an ongoing basis, mortgage loans with dissimilar risk characteristics (i.e., loans with significant declines in credit quality), collateral dependent mortgage loans (i.e., when the borrower is experiencing financial difficulty, including when foreclosure is reasonable possible or probable) and reasonably expected troubled debt restructurings (i.e., the Company grants concessions to borrower that is experiencing financial difficulties) are evaluated individually for credit loss. The ACL for loans evaluated individually are established using the same methodologies for all three portfolio segments. For example, the ACL for a collateral dependent loan is established as the excess of amortized cost over the estimated fair value of the loan’s underlying collateral, less selling cost when foreclosure is probable. Accordingly, the change in the estimated fair value of collateral dependent loans, which are evaluated individually for credit loss, is recorded as a change in the ACL which is recorded on a quarterly basis as a charge or credit to earnings in net investment gains (losses).
In accordance with the previous guidance, evaluation and measurement methodologies in determining the ACL were similar, except: (i) credit loss was recognized when incurred (when it was probable, based on current information and events, that all amounts due under the loan agreement would not be collected), (ii) pooling of loans with similar risk characteristics was permitted, but not required, (iii) forecasts of future economic conditions were not considered in the evaluation, (iv) measurement of the expected credit loss over the contractual term, or expected term, was not considered in the measurement, and (v) the credit loss for loans evaluated individually could also be determined using either discounted cash flows using the loans original effective interest rate or observable market prices.
Commercial and Agricultural Mortgage Loan Portfolio Segments
Commercial and agricultural mortgage loan ACL are calculated in a similar manner. Within each loan portfolio segment, commercial and agricultural, loans are pooled by internal risk rating. Estimated lifetime loss rates, which vary by internal risk rating, are applied to the amortized cost of each loan, excluding accrued investment income, on a quarterly basis to develop the ACL. Internal risk ratings are based on an assessment of the loan’s credit quality, which can change over time. The estimated lifetime loss rates are based on several loan portfolio segment-specific factors, including (i) the Company’s experience with defaults and loss severity, (ii) expected default and loss severity over the forecast period, (iii) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, (iv) loan specific characteristics including loan-to-value ratios, and (v) internal risk ratings. These evaluations are revised as conditions change and new information becomes available. The Company uses its several decades of historical default and loss severity experience which capture multiple economic cycles. The Company uses a forecast of economic assumptions for a two-year period for most of its commercial and agricultural mortgage loans, while a one-year period is used for loans originated in certain markets. After the applicable forecast period, the Company reverts to its historical loss experience using a straight-line basis over two years. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, recent loss and recovery trend experience as compared to historical loss and recovery experience, and loan specific characteristics including debt service coverage ratios. In estimating lifetime credit loss expected over the term of its commercial mortgage loans, the Company adjusts for expected prepayment and extension experience during the forecast period using historical prepayment and extension experience considering the expected position in the economic cycle and the loan profile (i.e., floating rate, shorter-term fixed rate and longer-term fixed rate) and after the forecast period using long-term historical prepayment experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. In estimating lifetime credit loss expected over the term of its agricultural mortgage loans, the Company’s experience is much less sensitive to the position in the economic cycle and by loan profile; accordingly historical prepayment experience is used, while extension terms are not prevalent with the Company’s agricultural mortgage loans.
Commercial mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt service coverage ratios and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. Agricultural mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios and borrower creditworthiness, as well as reviews on a geographic and property-type basis. The monitoring process for agricultural mortgage loans also focuses on higher risk loans.
For commercial mortgage loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial mortgage loan portfolio. Loan-to-value ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and the values utilized in calculating the ratio are updated routinely. In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part of the Company’s ongoing review of its commercial mortgage loan portfolio.
For agricultural mortgage loans, the Company’s primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated.
Commitments to lend: After loans are approved, the Company makes commitments to lend and, typically, borrowers draw down on some or all of the commitments. The timing of mortgage loan funding is based on the commitment expiration dates. A liability for expected credit loss for unfunded commercial and agricultural mortgage loan commitments is recorded within net investment gains (losses). The liability is based on estimated lifetime loss rates as described above and the amount of the outstanding commitments, which for lines of credit, considers estimated utilization rates. When the commitment is funded or expires, the liability is adjusted accordingly.
Residential Mortgage Loan Portfolio Segment
The Company’s residential mortgage loan portfolio is comprised primarily of purchased closed end, amortizing residential mortgage loans, including both performing loans purchased within 12 months of origination and reperforming loans purchased after they have been performing for at least 12 months post-modification. Residential mortgage loans are pooled by loan type (i.e., new origination and reperforming) and pooled by similar risk profiles (including consumer credit score and loan-to-value ratios). Estimated lifetime loss rates, which vary by loan type and risk profile, are applied to the amortized cost of each loan excluding accrued investment income on a quarterly basis to develop the ACL. The estimated lifetime loss rates are based on several factors, including (i) industry historical experience and expected results over the forecast period for defaults, (ii) loss severity, (iii) prepayment rates, (iv) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, and (v) loan pool specific characteristics including consumer credit scores, loan-to-value ratios, payment history and home prices. These evaluations are revised as conditions change and new information becomes available. The Company uses industry historical experience which captures multiple economic cycles as the Company has purchased most of its residential mortgage loans in the last five years. The Company uses a forecast of economic assumptions for a two-year period for most of its residential mortgage loans. After the applicable forecast period, the Company immediately reverts to industry historical loss experience.
For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss.
The Company defines delinquency consistent with industry practice, when mortgage loans are past due more than two or more months, as applicable, by portfolio segment.
Past Due and Nonaccrual Mortgage Loans
Leveraged and Direct Financing Leases
Leased Real Estate Investments - Operating Leases
The Company has elected a practical expedient of not separating non-lease components related to reimbursement of property operating costs from associated lease components. These property operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over the same period of time as the operating lease. Therefore, the combined component is accounted for as a single operating lease.In determining the ACL, management: (i) pools leases that share similar risk characteristics, (ii) considers lifetime credit loss expected over the contractual term of the lease, and (iii) considers past events, current economic conditions and forecasts of future economic conditions. Leases with dissimilar risk characteristics are evaluated individually for credit loss. Lifetime credit loss on leveraged and direct financing lease receivables is estimated using a probability of default and loss given default model, where the probability of default incorporates third party credit ratings of the lessee and the related historical default data.
Variable Interest Entities
The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity.
Derivatives
Accounting for Derivatives
Freestanding Derivatives
Freestanding derivatives are carried on the Company’s balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement.
Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivative’s carrying value in other invested assets or other liabilities.
If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows:
Statement of Operations Presentation:
Derivative:
Policyholder benefits and claims
• 
Economic hedges of variable annuity guarantees included in
future policy benefits
Net investment income
• 
Economic hedges of equity method investments in joint
ventures
Hedge Accounting
To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows:
•
Fair value hedge - a hedge of the estimated fair value of a recognized asset or liability - in the same line item as the earnings effect of the hedged item. The carrying value of the hedged recognized asset or liability is adjusted for changes in its estimated fair value due to the hedged risk.
•
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 - in OCI and reclassified into the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.
The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported on the statement of operations within interest income or interest expense to match the location of the hedged item.
In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument’s effectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income.
The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, (ii) the derivative expires, is sold, terminated, or exercised, (iii) it is no longer probable that the hedged forecasted transaction will occur, or (iv) the derivative is de-designated as a hedging instrument.
When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurring, the changes in estimated fair value of derivatives recorded in OCI related to discontinued cash flow hedges are released into the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.
When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable of occurring are recognized immediately in net investment gains (losses).
In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses).
Embedded Derivatives
The Company issues certain products, which include variable annuities and investment contracts, and is a party to certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if:
•
the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated 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.
Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent “excess” fees and are reported in universal life and investment-type product policy fees.
Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Certain of the Company’s OTC derivatives are cleared and settled through central clearing counterparties (“OTC-cleared”), while others are bilateral contracts between two counterparties (“OTC-bilateral”). The types of derivatives the Company uses include swaps, forwards, futures and option contracts. To a lesser extent, the Company uses credit default swaps and structured interest rate swaps to synthetically replicate investment risks and returns which are not readily available in the cash markets.
The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities and (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities.
The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities, (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments, and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments.
The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company’s derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements.
Employee Benefit Plans Metropolitan Life Insurance Company sponsors nonqualified defined benefit pension plans covering employees who meet specified eligibility requirements and provides certain postretirement medical and life insurance benefits for retired employees.
Closed Block
On April 7, 2000 (the “Demutualization Date”), Metropolitan Life Insurance Company converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance approving Metropolitan Life Insurance Company’s plan of reorganization, as amended (the “Plan of Reorganization”). On the Demutualization Date, Metropolitan Life Insurance Company established a closed block for the benefit of holders of certain individual life insurance policies of Metropolitan Life Insurance Company.
Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides outside of the closed block, is based upon cumulative actual and expected earnings within the closed block. Accordingly, the Company’s net income continues to be sensitive to the actual performance of the closed block.
v3.20.1
Segment Information (Tables)
 3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Segment Reporting Information, by Segment
Three Months Ended March 31, 2020
 
U.S.
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
4,510

 
$
738

 
$
—

 
$
5,248

 
$
—

 
$
5,248

Universal life and investment-type product policy fees
 
262

 
244

 
—

 
506

 
22

 
528

Net investment income
 
1,634

 
1,166

 
(70
)
 
2,730

 
(86
)
 
2,644

Other revenues
 
214

 
26

 
133

 
373

 
—

 
373

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
(182
)
 
(182
)
Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
3,555

 
3,555

Total revenues
 
6,620

 
2,174

 
63

 
8,857

 
3,309

 
12,166

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
4,561

 
1,397

 
—

 
5,958

 
(31
)
 
5,927

Interest credited to policyholder account balances
 
442

 
173

 
—

 
615

 
(4
)
 
611

Capitalization of DAC
 
(14
)
 
4

 
—

 
(10
)
 
—

 
(10
)
Amortization of DAC and VOBA
 
14

 
79

 
—

 
93

 
10

 
103

Interest expense on debt
 
2

 
2

 
21

 
25

 
—

 
25

Other expenses
 
794

 
200

 
178

 
1,172

 
1

 
1,173

Total expenses
 
5,799

 
1,855

 
199

 
7,853

 
(24
)
 
7,829

Provision for income tax expense (benefit)
 
175

 
62

 
(147
)
 
90

 
700

 
790

Adjusted earnings
 
$
646

 
$
257

 
$
11

 
914

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
3,309

 
 
 
 
Total expenses
 
 
 
 
 
 
 
24

 
 
 
 
Provision for income tax (expense) benefit
 
 
 
 
 
 
 
(700
)
 
 
 
 
Net income (loss)
 
$
3,547

 
 
 
$
3,547


Three Months Ended March 31, 2019
 
U.S.
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
4,302

 
$
750

 
$
—

 
$
5,052

 
$
—

 
$
5,052

Universal life and investment-type product policy fees
 
264

 
217

 
—

 
481

 
22

 
503

Net investment income
 
1,638

 
1,139

 
(57
)
 
2,720

 
(75
)
 
2,645

Other revenues
 
204

 
63

 
134

 
401

 
—

 
401

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
(54
)
 
(54
)
Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
(310
)
 
(310
)
Total revenues
 
6,408

 
2,169

 
77

 
8,654

 
(417
)
 
8,237

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
4,438

 
1,398

 
—

 
5,836

 
83

 
5,919

Interest credited to policyholder account balances
 
487

 
178

 
—

 
665

 
(3
)
 
662

Capitalization of DAC
 
(15
)
 
3

 
—

 
(12
)
 
—

 
(12
)
Amortization of DAC and VOBA
 
14

 
47

 
—

 
61

 
(42
)
 
19

Interest expense on debt
 
3

 
2

 
22

 
27

 
—

 
27

Other expenses
 
723

 
200

 
191

 
1,114

 
—

 
1,114

Total expenses
 
5,650

 
1,828

 
213

 
7,691

 
38

 
7,729

Provision for income tax expense (benefit)
 
157

 
67

 
(128
)
 
96

 
(96
)
 
—

Adjusted earnings
 
$
601

 
$
274

 
$
(8
)
 
867

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
(417
)
 
 
 
 
Total expenses
 
 
 
 
 
 
 
(38
)
 
 
 
 
Provision for income tax (expense) benefit
 
 
 
 
 
 
 
96

 
 
 
 
Net income (loss)
 
$
508

 
 
 
$
508


The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:
 
March 31, 2020
 
December 31, 2019
 
(In millions)
U.S.
$
252,519

 
$
246,319

MetLife Holdings
153,301

 
156,327

Corporate & Other
37,294

 
28,171

Total
$
443,114

 
$
430,817
v3.20.1
Insurance (Tables)
 3 Months Ended
Mar. 31, 2020
Insurance [Abstract]  
Guarantees related to Annuity, Universal and Variable Life Contracts
Information regarding the Company’s guarantee exposure, which includes direct business, but excludes offsets from hedging or reinsurance, if any, was as follows at:
 
 
March 31, 2020
 
December 31, 2019
 
 
In the
Event of Death
 
At
Annuitization
 
In the
Event of Death
 
At
Annuitization
 
 
(Dollars in millions)
 
Annuity Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Variable Annuity Guarantees:
 
 
 
 
 
 
 
 
 
 
 
 
Total account value (1), (2)
 
$
42,277

 
 
$
18,200

 
 
$
49,207

 
 
$
21,472

 
Separate account value (1)
 
$
32,768

 
 
$
17,376

 
 
$
39,679

 
 
$
20,666

 
Net amount at risk
 
$
2,972

(3
)
 
$
1,035

(4
)
 
$
1,195

(3
)
 
$
524

(4
)
Average attained age of contractholders
 
68 years

 
 
66 years

 
 
68 years

 
 
66 years

 
Other Annuity Guarantees:
 
 
 
 
 
 
 
 
 
 
 
 
Total account value (1), (2)
 
N/A

 
 
$
142

 
 
N/A

 
 
$
143

 
Net amount at risk
 
N/A

 
 
$
77

(5
)
 
N/A

 
 
$
80

(5
)
Average attained age of contractholders
 
N/A

 
 
54 years

 
 
N/A

 
 
54 years

 
 
March 31, 2020
 
December 31, 2019
 
Secondary
Guarantees
 
Paid-Up
Guarantees
 
Secondary
Guarantees
 
Paid-Up
Guarantees
 
(Dollars in millions)
Universal and Variable Life Contracts:
 
 
 
 
 
 
 
Total account value (1), (2)
$
4,304

 
$
887

 
$
4,909

 
$
899

Net amount at risk (6)
$
41,387

 
$
5,782

 
$
41,385

 
$
5,884

Average attained age of policyholders
57 years

 
64 years

 
57 years

 
64 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 the contractholder’s investments in the general account and separate account, if applicable.
(3)
Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death.
(4)
Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved.
(5)
Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These amounts represent the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date.
(6)
Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.
Liabilities for Unpaid Claims and Claim Expenses
Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:


Three Months
Ended
March 31,


2020

2019


(In millions)
Balance, beginning of period

$
13,140

 
$
12,590

Less: Reinsurance recoverables

1,525

 
1,497

Net balance, beginning of period

11,615

 
11,093

Incurred related to:

 
 
 
Current period

4,734

 
4,295

Prior periods (1)

(64
)
 
87

Total incurred

4,670

 
4,382

Paid related to:

 
 
 
Current period

(2,240
)
 
(1,931
)
Prior periods

(2,409
)
 
(2,201
)
Total paid

(4,649
)
 
(4,132
)
Net balance, end of period

11,636

 
11,343

Add: Reinsurance recoverables

1,661

 
1,537

Balance, end of period (included in future policy benefits and other policy-related balances)

$
13,297

 
$
12,880

__________________
(1)
For the three months ended March 31, 2020, claims and claim adjustment expenses associated with prior periods decreased due to favorable claims experience in the current period. For the three months ended March 31, 2019, claims and claim adjustment expenses associated with prior periods increased due to events incurred in prior periods but reported in the current period.
v3.20.1
Closed Block (Tables)
 3 Months Ended
Mar. 31, 2020
Closed Block Disclosure [Abstract]  
Closed block liabilities and assets
Information regarding the closed block liabilities and assets designated to the closed block was as follows at:
 
 
March 31, 2020
 
December 31, 2019
 
 
(In millions)
Closed Block Liabilities
 
 
 
 
Future policy benefits
 
$
39,214

 
$
39,379

Other policy-related balances
 
340

 
423

Policyholder dividends payable
 
431

 
432

Policyholder dividend obligation
 
1,677

 
2,020

Deferred income tax liability
 
82

 
79

Other liabilities
 
169

 
81

Total closed block liabilities
 
41,913

 
42,414

Assets Designated to the Closed Block
 
 
 
 
Investments:
 
 
 
 
Fixed maturity securities available-for-sale, at estimated fair value
 
25,332

 
25,977

Mortgage loans
 
6,995

 
7,052

Policy loans
 
4,478

 
4,489

Real estate and real estate joint ventures
 
556

 
544

Other invested assets
 
934

 
416

Total investments
 
38,295

 
38,478

Cash and cash equivalents
 
148

 
448

Accrued investment income
 
427

 
419

Premiums, reinsurance and other receivables
 
67

 
75

Current income tax recoverable
 
90

 
91

Total assets designated to the closed block
 
39,027

 
39,511

Excess of closed block liabilities over assets designated to the closed block
 
2,886

 
2,903

AOCI:
 
 
 
 
Unrealized investment gains (losses), net of income tax
 
2,008

 
2,453

Unrealized gains (losses) on derivatives, net of income tax
 
314

 
97

Allocated to policyholder dividend obligation, net of income tax
 
(1,325
)
 
(1,596
)
Total amounts included in AOCI
 
997

 
954

Maximum future earnings to be recognized from closed block assets and liabilities
 
$
3,883

 
$
3,857
Closed block policyholder dividend obligation
Information regarding the closed block policyholder dividend obligation was as follows:
 
 
Three Months
Ended
March 31, 2020
 
Year 
 Ended 
 December 31, 2019
 
 
(In millions)
Balance, beginning of period
 
$
2,020

 
$
428

Change in unrealized investment and derivative gains (losses)
 
(343
)
 
1,592

Balance, end of period
 
$
1,677

 
$
2,020
Closed block revenues and expenses
Information regarding the closed block revenues and expenses was as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
Revenues
 
 
 
 
Premiums
 
$
367

 
$
367

Net investment income
 
407

 
428

Net investment gains (losses)
 
(19
)
 
(1
)
Net derivative gains (losses)
 
26

 
3

Total revenues
 
781

 
797

Expenses
 
 
 
 
Policyholder benefits and claims
 
550

 
539

Policyholder dividends
 
219

 
228

Other expenses
 
27

 
29

Total expenses
 
796

 
796

Revenues, net of expenses before provision for income tax expense (benefit)
 
(15
)
 
1

Provision for income tax expense (benefit)
 
(3
)
 
—

Revenues, net of expenses and provision for income tax expense (benefit)
 
$
(12
)
 
$
1
v3.20.1
Investments (Tables)
 3 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Fixed Maturity Available-for-Sale and Equity Securities
The following table presents the fixed maturity securities AFS by sector. U.S. corporate and foreign corporate sectors include redeemable preferred stock. Residential mortgage-backed securities (“RMBS”) includes agency, prime, alternative and sub-prime mortgage-backed securities. Asset-backed securities (“ABS”) includes securities collateralized by corporate loans and consumer loans. Municipals includes taxable and tax-exempt revenue bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple commercial mortgage loans. RMBS, ABS and CMBS are collectively, “Structured Products.” In accordance with new guidance adopted January 1, 2020 regarding expected credit loss, securities that incurred a credit loss after December 31, 2019 and were still held as of March 31, 2020, are presented net of ACL. In accordance with previous guidance, both the temporary loss and OTTI loss are presented for securities that were in an unrealized loss position as of December 31, 2019.
 
March 31, 2020
 
December 31, 2019
 
Amortized
Cost
 

 
Gross Unrealized
 
Estimated
Fair
Value
 
Amortized
Cost
 
Gross Unrealized
 
Estimated
Fair
Value
 
ACL
 

Gains
 
Losses
 

Gains
 
Temporary
Losses
 
OTTI
Losses (1)
 
 
(In millions)
U.S. corporate
$
52,744

 
$
(44
)
 
$
4,839

 
$
1,704

 
$
55,835

 
$
52,446

 
$
6,236

 
$
223

 
$
—

 
$
58,459

U.S. government and agency
26,491

 
—

 
7,248

 
4

 
33,735

 
25,568

 
3,706

 
26

 
—

 
29,248

Foreign corporate
28,400

 
—

 
1,144

 
1,898

 
27,646

 
28,421

 
2,397

 
517

 
—

 
30,301

RMBS
23,297

 
—

 
1,285

 
329

 
24,253

 
21,476

 
1,324

 
59

 
(32
)
 
22,773

ABS
11,395

 
—

 
23

 
838

 
10,580

 
10,215

 
47

 
61

 
—

 
10,201

Municipals
6,830

 
—

 
1,491

 
28

 
8,293

 
6,419

 
1,450

 
13

 
—

 
7,856

CMBS
5,944

 
—

 
105

 
276

 
5,773

 
5,523

 
214

 
17

 
—

 
5,720

Foreign government
4,441

 
(6
)
 
509

 
177

 
4,767

 
4,329

 
724

 
47

 
—

 
5,006

Total fixed maturity securities AFS
$
159,542


$
(50
)

$
16,644


$
5,254


$
170,882


$
154,397


$
16,098


$
963


$
(32
)

$
169,564

__________________
(1)
Noncredit OTTI losses included in AOCI in an unrealized gain position are due to increases in estimated fair value subsequent to initial recognition of noncredit loss on such securities. See also “— Net Unrealized Investment Gains (Losses).”
Available-for-sale fixed maturity securities by contractual maturity date
The amortized cost net of ACL, and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at March 31, 2020:
 
Due in One
Year or Less
 
Due After
 One Year
Through
Five Years
 
Due After
Five Years
Through Ten
Years
 
Due After Ten Years
 
Structured
Products
 
Total Fixed
Maturity
Securities AFS
 
(In millions)
Amortized cost net of ACL
$
10,463

 
$
22,630

 
$
27,851

 
$
57,912

 
$
40,636

 
$
159,492

Estimated fair value
$
10,466

 
$
22,191

 
$
28,620

 
$
68,999

 
$
40,606

 
$
170,882
Continuous Gross Unrealized Loss and OTTI Loss for Fixed Maturity Securities Available-for-Sale
The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position by sector and aggregated by length of time that the securities have been in a continuous unrealized loss position. Included in the table below are securities without an ACL as of March 31, 2020, in accordance with new guidance adopted January 1, 2020. Also included in the table below are all securities in an unrealized loss position as of December 31, 2019, in accordance with previous guidance.
 
March 31, 2020
 
December 31, 2019
 
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
 
(Dollars in millions)
U.S. corporate
$
14,778

 
$
1,569

 
$
357

 
$
130

 
$
2,036

 
$
77

 
$
1,304

 
$
146

U.S. government and agency
419

 
4

 
—

 
—

 
1,552

 
26

 
29

 
—

Foreign corporate
13,684

 
1,776

 
654

 
123

 
1,368

 
93

 
3,499

 
424

RMBS
4,718

 
314

 
197

 
16

 
1,479

 
15

 
524

 
12

ABS
7,248

 
591

 
2,251

 
247

 
2,428

 
13

 
3,778

 
48

Municipals
621

 
28

 
1

 
—

 
508

 
13

 
1

 
—

CMBS
2,824

 
250

 
156

 
26

 
857

 
5

 
212

 
12

Foreign government
1,313

 
132

 
154

 
42

 
149

 
6

 
215

 
41

Total fixed maturity securities AFS
$
45,605

 
$
4,664

 
$
3,770

 
$
584

 
$
10,377

 
$
248

 
$
9,562

 
$
683

Investment grade
$
37,895

 
$
3,403

 
$
3,470

 
$
448

 
$
9,288

 
$
190

 
$
8,233

 
$
530

Below investment grade
7,710

 
1,261

 
300

 
136

 
1,089

 
58

 
1,329

 
153

Total fixed maturity securities AFS
$
45,605

 
$
4,664

 
$
3,770

 
$
584

 
$
10,377

 
$
248

 
$
9,562

 
$
683

Total number of securities in an
unrealized loss position
4,708

 
 
 
458

 
 
 
1,059

 
 
 
802

 
 
Debt Securities, Available-for-sale, Allowance for Credit Loss [Table Text Block]
The rollforward of ACL for fixed maturity securities AFS by sector is as follows:
 
U.S. Corporate
 
Foreign Government
 
Total
 
(In millions)
Three Months Ended March 31, 2020
 
 
 
 
 
Balance, beginning of period
$
—

 
$
—

 
$
—

Additions:
 
 
 
 
 
Securities for which credit loss was not previously recorded
(44
)
 
(6
)
 
(50
)
Balance, end of period
$
(44
)
 
$
(6
)
 
$
(50
)
Disclosure of Mortgage Loans Net of Valuation Allowance
Mortgage loans are summarized as follows at:
 
March 31, 2020
 
December 31, 2019
 
Carrying
Value
 
% of
Total
 
Carrying
Value
 
% of
Total
 
(Dollars in millions)
Mortgage loans:
 
 
 
 
 
 
 
Commercial
$
37,845

 
57.3
 %
 
$
37,311

 
56.9
 %
Agricultural
15,497

 
23.4

 
15,705

 
23.9

Residential
12,936

 
19.6

 
12,575

 
19.2

Total amortized cost
66,278

 
100.3

 
65,591

 
100.0

Allowance for credit loss
(417
)
 
(0.6
)
 
(289
)
 
(0.4
)
Subtotal mortgage loans, net
65,861

 
99.7

 
65,302

 
99.6

Residential — FVO
180

 
0.3

 
188

 
0.3

Total mortgage loans held-for-investment, net
$
66,041

 
100.0
 %
 
$
65,490

 
99.9
 %
Mortgage loans held-for-sale
—


—


59


0.1

Total mortgage loans, net
$
66,041


100.0
 %

$
65,549


100.0
 %
Allowance for Loan and Lease Losses, Provision for Loss, Net
The changes in the ACL, by portfolio segment, were as follows:

Three Months
Ended
March 31,
 
2020

2019
 
Commercial

Agricultural

Residential

Total

Commercial

Agricultural

Residential

Total
 
(In millions)
Balance, beginning of period
$
186


$
49


$
54


$
289


$
190


$
44


$
57


$
291

Adoption of new credit loss guidance
(87
)
 
32

 
154

 
99

 
—

 
—

 
—

 
—

Provision (release)
14


(5
)

23


32


4


1


1


6

Charge-offs, net of recoveries
—


—


(3
)

(3
)

—


—


(2
)

(2
)
Balance, end of period
$
113


$
76


$
228


$
417


$
194


$
45


$
56


$
295
Schedule of Past Due and Non Accrual Mortgage Loans The past due and nonaccrual mortgage loans at amortized cost, prior to ACL, by portfolio segment, were as follows at:
 
Past Due
 
Greater than 90 Days Past Due
and Still Accruing Interest
 
Nonaccrual
 
March 31, 2020
 
December 31, 2019
 
March 31, 2020
 
December 31, 2019
 
March 31, 2020
 
December 31, 2019
 
(In millions)
Commercial
$
—

 
$
—

 
$
—

 
$
—

 
$
167

 
$
167

Agricultural
267

 
124

 
121

 
2

 
161

 
137

Residential
371

 
377

 
—

 
—

 
371

 
377

Total
$
638

 
$
501

 
$
121

 
$
2

 
$
699

 
$
681
Disclosure Real Estate and Real Estate Joint Ventures Real estate investments, by income type, as well as income earned, are as follows at and for the periods indicated:
 
March 31, 2020
 
December 31, 2019
 
Three Months 
 Ended 
March 31,
 
 
 
2020
 
2019
 
Carrying Value
 
Income
 
(In millions)
Leased real estate investments
$
1,602

 
$
1,586

 
$
46

 
$
41

Other real estate investments
418

 
419

 
34

 
30

Real estate joint ventures
4,839

 
4,654

 
7

 
(5
)
Total real estate and real estate joint ventures
$
6,859

 
$
6,659

 
$
87

 
$
66
Components of net unrealized investment gains (losses) included in accumulated other comprehensive income (loss)
The components of net unrealized investment gains (losses), included in AOCI, were as follows:
 
March 31, 2020
 
December 31, 2019
 
(In millions)
Fixed maturity securities AFS
$
11,406

 
$
15,145

Fixed maturity securities AFS with noncredit OTTI losses included in AOCI
—

 
32

Total fixed maturity securities AFS
11,406

 
15,177

Derivatives
5,773

 
2,043

Other
346

 
210

Subtotal
17,525

 
17,430

Amounts allocated from:
 
 
 
Future policy benefits
(55
)
 
(1,121
)
DAC, VOBA and DSI
(1,011
)
 
(1,051
)
Policyholder dividend obligation
(1,677
)
 
(2,020
)
Subtotal
(2,743
)
 
(4,192
)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
—

 
(7
)
Deferred income tax benefit (expense)
(3,038
)
 
(2,735
)
Net unrealized investment gains (losses)
$
11,744

 
$
10,496


The changes in net unrealized investment gains (losses) were as follows:
 
Three Months
Ended
March 31, 2020
 
(In millions)
Balance, beginning of period
$
10,496

Fixed maturity securities AFS on which noncredit OTTI losses have been recognized
(32
)
Unrealized investment gains (losses) during the period
127

Unrealized investment gains (losses) relating to:
 
Future policy benefits
1,066

DAC, VOBA and DSI
40

Policyholder dividend obligation
343

Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
7

Deferred income tax benefit (expense)
(303
)
Balance, end of period
$
11,744

Change in net unrealized investment gains (losses)
$
1,248
Securities Lending and Repurchase Agreements
A summary of the remaining contractual maturities of securities lending agreements and repurchase agreements is as follows:
 
March 31, 2020
 
December 31, 2019
 
Remaining Maturities
 
 
 
Remaining Maturities
 
 
 
Open (1)
 
1 
Month
or Less
 
Over
 1 to 6
Months
 
Over 6 Months to 1 Year
 
Total
 
Open (1)
 
1 Month
or Less
 
Over
1 to 6
Months
 
Over 6 Months to 1 Year
 
Total
 
(In millions)
Cash collateral liability by loaned security type:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities lending:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency
$
3,335

 
$
5,926

 
$
5,482

 
$
—

 
$
14,743

 
$
2,260

 
$
5,040

 
$
5,491

 
$
—

 
$
12,791

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repurchase agreements:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency
$
—

 
$
2,700

 
$
—

 
$
—

 
$
2,700

 
$
—

 
$
2,310

 
$
—

 
$
—

 
$
2,310

__________________
(1)
The related loaned security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral.
A summary of the outstanding securities lending and repurchase agreements is as follows:
 
 
March 31, 2020
 
December 31, 2019
 
 
Securities (1)
 
 
 
 
 
Securities (1)
 
 
 
 
Estimated Fair Value
 
Cash Collateral Received from Counterparties (2), (3)
 
Reinvestment Portfolio at Estimated Fair Value
 
Estimated Fair Value
 
Cash Collateral Received from Counterparties (2), (3)
 
Reinvestment Portfolio at Estimated Fair Value
 
 
(In millions)
Securities lending
 
$
14,338

 
$
14,743

 
$
14,610

 
$
12,455

 
$
12,791

 
$
12,847

Repurchase agreements
 
$
2,746

 
$
2,700

 
$
2,676

 
$
2,333

 
$
2,310

 
$
2,320

__________________
(1)
Securities on loan in connection with these programs are included within fixed maturity securities AFS, short-term investments and cash equivalents.
(2)
In connection with securities lending, in addition to cash collateral received, the Company received from counterparties security collateral of $21 million and $0 at March 31, 2020 and December 31, 2019, respectively, which may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements.
(3)
The liability for cash collateral for these programs is included within payables for collateral under securities loaned, other transactions and other liabilities.
Invested Assets on Deposit, Held in Trust and Pledged as Collateral
Invested assets on deposit and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value at:
 
March 31, 2020
 
December 31, 2019
 
(In millions)
Invested assets on deposit (regulatory deposits)
$
111

 
$
62

Invested assets pledged as collateral (1)
23,158

 
20,659

Total invested assets on deposit and pledged as collateral
$
23,269


$
20,721

__________________
(1)
The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4 of the Notes to the Consolidated Financial Statements included in the 2019 Annual Report) and derivative transactions (see Note 6).
Components of Net Investment Income
The components of net investment income were as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
Investment income:
 
 
 
 
Fixed maturity securities AFS
 
$
1,658

 
$
1,768

Equity securities
 
9

 
9

Mortgage loans
 
718

 
764

Policy loans
 
77

 
76

Real estate and real estate joint ventures
 
87

 
66

Other limited partnership interests
 
215

 
85

Cash, cash equivalents and short-term investments
 
43

 
43

FVO Securities (1)
 
(34
)
 
23

Operating joint ventures
 
21

 
11

Other
 
75

 
59

Subtotal
 
2,869


2,904

Less: Investment expenses
 
225

 
259

Net investment income
 
$
2,644


$
2,645

__________________
(1)
Changes in estimated fair value subsequent to purchase for investments still held as of the end of the respective periods and included in net investment income were principally from equity linked notes included within securities for which the FVO has been elected (“FVO Securities”) and were ($34) million and $23 million for the three months ended March 31, 2020 and 2019, respectively.
Components of Net Investment Gains (Losses)
The components of net investment gains (losses) were as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
(In millions)
Total gains (losses) on fixed maturity securities AFS:
 
 
 
 
Net credit loss (provision) release (1)
 
$
(77
)
 
$
(8
)
Net gains (losses) on sales and disposals
 
(4
)
 
(32
)
Total gains (losses) on fixed maturity securities AFS
 
(81
)

(40
)
Total gains (losses) on equity securities:
 

 

Net gains (losses) on sales and disposals
 
9

 
9

Change in estimated fair value (2)
 
(145
)
 
57

Total gains (losses) on equity securities
 
(136
)

66

Mortgage loans
 
(45
)
 
(14
)
Real estate and real estate joint ventures
 
1

 
3

Other (3)
 
30

 
(50
)
Subtotal
 
(231
)

(35
)
Change in estimated fair value of other limited partnership interests and real estate joint ventures
 
1

 
(16
)
Non-investment portfolio gains (losses)
 
48

 
(3
)
Subtotal
 
49


(19
)
Total net investment gains (losses)
 
$
(182
)

$
(54
)

__________________
(1)
Net credit loss provision by sector for the three months ended March 31, 2019 was $6 million Industrial and $2 million RMBS. See “— Rollforward of Allowance for Credit Loss for Fixed Maturity Securities AFS By Sector.” Due to the adoption of new guidance on January 1, 2020, prior period OTTI loss is presented as credit loss.
(2)
Changes in estimated fair value subsequent to purchase for equity securities still held as of the end of the period included in net investment gains (losses) were ($138) million and $56 million for the three months ended March 31, 2020 and 2019, respectively.
(3)
Other gains (losses) included tax credit partnership impairment losses of ($78) million and a renewable energy partnership disposal gain of $46 million for the three months ended March 31, 2019.
Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains and losses Proceeds from sales or disposals and the components of net investment gains (losses) were as shown in the table below:
 
Three Months
Ended
March 31,
 
2020
 
2019
 
(In millions)
Proceeds
$
5,464

 
$
10,665

Gross investment gains
$
61

 
$
135

Gross investment losses
(65
)
 
(167
)
Net credit loss (provision) release
(77
)
 
(8
)
Net investment gains (losses)
$
(81
)
 
$
(40
)
Schedule of Related Party Transactions
Recurring related party investments and related net investment income were as follows at and for the periods ended:
 
 
 
 
March 31, 2020
 
December 31, 2019
 
Three Months
Ended
March 31,
 
 
 
 
 
 
2020
 
2019
Investment Type/Balance Sheet Category
 
Related Party
 
Carrying Value
 
Net Investment Income
 
 
 
 
(In millions)
Affiliated investments (1)
 
MetLife, Inc.
 
$
1,821

 
$
1,810

 
$
9

 
$
8

Affiliated investments (2)
 
American Life Insurance Company
 
100

 
100

 
1

 
1

Affiliated investments (3)
 
Metropolitan Property and Casualty Insurance Company
 
315

 
315

 
2

 
3

Other invested assets
 
 
 
$
2,236

 
$
2,225

 
$
12

 
$
12

________________
(1)
Represents an investment in affiliated senior notes. The affiliated senior notes have maturity dates from September 2020 to October 2029 and bear interest, payable semi-annually, at a rate per annum ranging from 0.82% to 3.14%. See Note 7 of the Notes to the Consolidated Financial Statements included in the 2019 Annual Report for further information.
(2)
Represents an investment in an affiliated surplus note. The surplus note, which bears interest at a fixed rate of 3.17%, payable semiannually, is due June 2020.
(3)
Represents an investment in affiliated preferred stock. Dividends are payable quarterly at a variable rate.
Commercial Mortgage Loans  
Accounts, Notes, Loans and Financing Receivable [Line Items]  
Disclosure of the mortgage loans portfolio segment by the recorded investment, prior to valuation allowances, by credit quality indicator categories
The amortized cost of commercial mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2020:
 
 
2020
 
2019
 
2018
 
2017
 
2016
 
Prior
 
Revolving Loans
 
Total
 
% of Total
 
 
(Dollars in millions)
Loan-to-value ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less than 65%
 
$
819

 
$
4,016

 
$
4,837

 
$
3,557

 
$
4,073

 
$
10,344

 
$
2,886

 
$
30,532

 
80.7
%
65% to 75%
 
372

 
1,749

 
1,213

 
888

 
791

 
987

 
—

 
6,000

 
15.8

76% to 80%
 
—

 
—

 
—

 
288

 
103

 
326

 
—

 
717

 
1.9

Greater than 80%
 
—

 
—

 
—

 
401

 
28

 
167

 
—

 
596

 
1.6

Total
 
$
1,191

 
$
5,765

 
$
6,050

 
$
5,134

 
$
4,995

 
$
11,824

 
$
2,886

 
$
37,845

 
100.0
%
Debt service coverage ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
> 1.20x
 
$
1,185

 
$
5,496

 
$
5,811

 
$
4,688

 
$
4,765

 
$
10,979

 
$
2,886

 
$
35,810

 
94.6
%
1.00x - 1.20x
 
—

 
—

 
38

 
77

 
192

 
749

 
—

 
1,056

 
2.8

<1.00x
 
6

 
269

 
201

 
369

 
38

 
96

 
—

 
979

 
2.6

Total
 
$
1,191

 
$
5,765

 
$
6,050

 
$
5,134

 
$
4,995

 
$
11,824

 
$
2,886

 
$
37,845

 
100.0
%
Residential Mortgage Loans  
Accounts, Notes, Loans and Financing Receivable [Line Items]  
Disclosure of the mortgage loans portfolio segment by the recorded investment, prior to valuation allowances, by credit quality indicator categories
The amortized cost of residential mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2020:
 
 
2020
 
2019
 
2018
 
2017
 
2016
 
Prior
 
Revolving Loans
 
Total
 
% of Total
 
 
(Dollars in millions)
Performance indicators:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performing
 
$
160

 
$
2,155

 
$
1,321

 
$
404

 
$
170

 
$
8,355

 
$
—

 
$
12,565

 
97.1
%
Nonperforming (1)
 
—

 
3

 
5

 
—

 
1

 
362

 
—

 
371

 
2.9

Total
 
$
160

 
$
2,158

 
$
1,326

 
$
404

 
$
171

 
$
8,717

 
$
—

 
$
12,936

 
100.0
%
__________________
(1)
Includes residential mortgage loans in process of foreclosure of $119 million and $117 million at March 31, 2020 and December 31, 2019, respectively.
Agricultural Mortgage Loans  
Accounts, Notes, Loans and Financing Receivable [Line Items]  
Disclosure of the mortgage loans portfolio segment by the recorded investment, prior to valuation allowances, by credit quality indicator categories
The amortized cost of agricultural mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2020:
 
 
2020
 
2019
 
2018
 
2017
 
2016
 
Prior
 
Revolving Loans
 
Total
 
% of Total
 
 
(Dollars in millions)
Loan-to-value ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less than 65%
 
$
257

 
$
2,173

 
$
2,723

 
$
1,056

 
$
2,754

 
$
5,026

 
$
847

 
$
14,836

 
95.7
%
65% to 75%
 
8

 
182

 
61

 
77

 
27

 
237

 
11

 
603

 
3.9

76% to 80%
 
—

 
—

 
8

 
—

 
—

 
6

 
2

 
16

 
0.1

Greater than 80%
 
—

 
—

 
—

 
—

 
—

 
42

 
—

 
42

 
0.3

Total
 
$
265

 
$
2,355

 
$
2,792

 
$
1,133

 
$
2,781

 
$
5,311

 
$
860

 
$
15,497

 
100.0
%
Variable Interest Entity, Primary Beneficiary  
Accounts, Notes, Loans and Financing Receivable [Line Items]  
Schedule of Variable Interest Entities
The following table presents the total assets and total liabilities relating to investment-related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:
 
March 31, 2020
 
December 31, 2019
 
Total
Assets
 
Total
Liabilities
 
Total
Assets
 
Total
Liabilities
 
(In millions)
Real estate joint ventures (1)
$
1,410

 
$
—

 
$
1,378

 
$
—

Investment fund (primarily mortgage loans) (2)
204

 
—

 
211

 
—

Renewable energy partnership (3)
95

 
—

 
94

 
—

Other investments (3)
10

 
5

 
10

 
5

Total
$
1,719


$
5


$
1,693


$
5

__________________
(1)
The Company’s investment in these affiliated real estate joint ventures was $1.3 billion and $1.2 billion at March 31, 2020 and December 31, 2019, respectively. Other affiliates’ investments in these affiliated real estate joint ventures were $133 million and $129 million at March 31, 2020 and December 31, 2019, respectively.
(2)
The Company’s investment in this affiliated investment fund was $166 million and $172 million at March 31, 2020 and December 31, 2019, respectively. An affiliate had an investment in this affiliated investment fund of $38 million and $39 million at March 31, 2020 and December 31, 2019, respectively.
(3)
Assets of the renewable energy partnership and other investments primarily consisted of other invested assets.
Variable Interest Entity, Not Primary Beneficiary  
Accounts, Notes, Loans and Financing Receivable [Line Items]  
Schedule of Variable Interest Entities
The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:
 
March 31, 2020
 
December 31, 2019
 
Carrying
Amount
 
Maximum
Exposure
to Loss (1)
 
Carrying
Amount
 
Maximum
Exposure
to Loss (1)
 
(In millions)
Fixed maturity securities AFS:
 
 
 
 
 
 
 
Structured Products (2)
$
39,108

 
$
39,108

 
$
37,119

 
$
37,119

U.S. and foreign corporate
1,055

 
1,055

 
1,098

 
1,098

Other limited partnership interests
4,734

 
7,766

 
4,461

 
7,423

Other invested assets
1,503

 
1,608

 
1,554

 
1,677

Real estate joint ventures
11

 
14

 
25

 
28

Total
$
46,411


$
49,551


$
44,257


$
47,345

__________________
(1)
The maximum exposure to loss relating to fixed maturity 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 and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. 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 $7 million and $6 million at March 31, 2020 and December 31, 2019, 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 in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.
v3.20.1
Derivatives (Tables)
 3 Months Ended
Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location
The following table presents the primary underlying risk exposure, gross notional amount, and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:
 
 
 
 
March 31, 2020
 
December 31, 2019
 
 
Primary Underlying Risk Exposure
 
Gross
Notional
Amount
 
Estimated Fair Value
 
Gross
Notional
Amount
 
Estimated Fair Value
 
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
 
 
(In millions)
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Interest rate
 
$
3,231

 
$
3,393

 
$
10

 
$
2,370

 
$
2,668

 
$
2

Foreign currency swaps
 
Foreign currency exchange rate
 
1,250

 
64

 
—

 
1,250

 
12

 
17

Subtotal
 
 
 
4,481

 
3,457

 
10

 
3,620

 
2,680

 
19

Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Interest rate
 
4,734

 
156

 
27

 
3,324

 
125

 
27

Interest rate forwards
 
Interest rate
 
6,259

 
969

 
—

 
6,793

 
75

 
142

Foreign currency swaps
 
Foreign currency exchange rate
 
27,392

 
3,102

 
1,758

 
27,240

 
1,199

 
1,103

Subtotal
 
 
 
38,385

 
4,227

 
1,785

 
37,357

 
1,399

 
1,272

Total qualifying hedges
 
 
 
42,866

 
7,684

 
1,795

 
40,977

 
4,079

 
1,291

Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Interest rate
 
50,562

 
4,319

 
635

 
38,820

 
2,296

 
133

Interest rate floors
 
Interest rate
 
12,701

 
424

 
—

 
12,701

 
156

 
—

Interest rate caps
 
Interest rate
 
55,006

 
21

 
—

 
42,622

 
18

 
5

Interest rate futures
 
Interest rate
 
724

 
—

 
—

 
745

 
—

 
—

Interest rate options
 
Interest rate
 
25,105

 
772

 
—

 
24,944

 
427

 
—

Interest rate total return swaps
 
Interest rate
 
1,048

 
180

 
—

 
1,048

 
5

 
49

Synthetic GICs
 
Interest rate
 
17,201

 
—

 
—

 
16,498

 
—

 
—

Foreign currency swaps
 
Foreign currency exchange rate
 
6,009

 
721

 
85

 
6,124

 
419

 
97

Foreign currency forwards
 
Foreign currency exchange rate
 
846

 
18

 
14

 
1,001

 
12

 
8

Credit default swaps — purchased
 
Credit
 
863

 
39

 
1

 
888

 
4

 
11

Credit default swaps — written
 
Credit
 
8,518

 
26

 
76

 
8,711

 
200

 
1

Equity futures
 
Equity market
 
561

 
7

 
1

 
2,039

 
—

 
5

Equity index options
 
Equity market
 
21,783

 
997

 
184

 
23,104

 
447

 
417

Equity variance swaps
 
Equity market
 
637

 
12

 
10

 
637

 
17

 
17

Equity total return swaps
 
Equity market
 
716

 
175

 
1

 
716

 
—

 
68

Total non-designated or nonqualifying derivatives
 
202,280

 
7,711

 
1,007

 
180,598

 
4,001

 
811

Total
 
 
 
$
245,146

 
$
15,395

 
$
2,802

 
$
221,575

 
$
8,080

 
$
2,102
Components of Net Derivatives Gains (Losses)
 
 
Three Months Ended March 31, 2020
 
 
Net Investment Income
 
Net Investment Gains (Losses)
 
Net Derivative Gains (Losses)
 
Policyholder Benefits and Claims
 
Interest Credited to Policyholder Account Balances
 
Other Expenses
 
OCI
 
 
(In millions)
Gain (Loss) on Fair Value Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives designated as hedging instruments (1)
 
$
(10
)
 
$
—

 
$
—

 
$
774

 
$
—

 
$
—

 
N/A

Hedged items
 
4

 
—

 
—

 
(769
)
 
—

 
—

 
N/A

Foreign currency exchange rate derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives designated as hedging instruments (1)
 
69

 
—

 
—

 
—

 
—

 
—

 
N/A

Hedged items
 
(62
)
 
—

 
—

 
—

 
—

 
—

 
N/A

Amount excluded from the assessment of hedge effectiveness
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A

Subtotal
 
1

 
—

 
—

 
5

 
—

 
—

 
N/A

Gain (Loss) on Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
$
2,002

Amount of gains (losses) reclassified from AOCI into income
 
6

 
6

 
—

 
—

 
—

 
—

 
(12
)
Foreign currency exchange rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
1,289

Amount of gains (losses) reclassified from AOCI into income
 
—

 
(451
)
 
—

 
—

 
—

 
—

 
451

Foreign currency transaction gains (losses) on hedged items
 
—

 
457

 
—

 
—

 
—

 
—

 
—

Credit derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
—

Amount of gains (losses) reclassified from AOCI into income
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
6

 
12

 
—

 
—

 
—

 
—

 
3,730

Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives (1)
 
(4
)
 
—

 
3,394

 
—

 
—

 
—

 
N/A

Foreign currency exchange rate derivatives (1)
 
—

 
—

 
374

 
—

 
—

 
—

 
N/A

Credit derivatives — purchased (1)
 
—

 
—

 
45

 
—

 
—

 
—

 
N/A

Credit derivatives — written (1)
 
—

 
—

 
(234
)
 
—

 
—

 
—

 
N/A

Equity derivatives (1)
 
—

 
—

 
1,081

 
131

 
—

 
—

 
N/A

Foreign currency transaction gains (losses) on hedged items
 
—

 
—

 
(112
)
 
—

 
—

 
—

 
N/A

Subtotal
 
(4
)
 
—

 
4,548

 
131

 
—

 
—

 
N/A

Earned income on derivatives
 
82

 
—

 
80

 
38

 
(44
)
 
—

 
—

Embedded derivatives (2)
 
N/A

 
N/A

 
(1,073
)
 
—

 
N/A

 
N/A

 
N/A

Total
 
$
85

 
$
12

 
$
3,555

 
$
174

 
$
(44
)
 
$
—

 
$
3,730

 
 
Three Months Ended March 31, 2019
 
 
Net Investment Income
 
Net Investment Gains (Losses)
 
Net Derivative Gains (Losses)
 
Policyholder Benefits and Claims
 
Interest Credited to Policyholder Account Balances
 
Other Expenses
 
OCI
 
 
(In millions)
Gain (Loss) on Fair Value Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives designated as hedging instruments (1)
 
$
(3
)
 
$
—

 
$
—

 
$
127

 
$
—

 
$
—

 
N/A

Hedged items
 
3

 
—

 
—

 
(128
)
 
—

 
—

 
N/A

Foreign currency exchange rate derivatives:
 


 


 


 


 


 


 


Derivatives designated as hedging instruments (1)
 
(29
)
 
—

 
—

 
—

 
—

 
—

 
N/A

Hedged items
 
28

 
—

 
—

 
—

 
—

 
—

 
N/A

Amount excluded from the assessment of hedge effectiveness
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A

Subtotal
 
(1
)
 
—

 
—

 
(1
)
 
—

 
—

 
N/A

Gain (Loss) on Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
$
242

Amount of gains (losses) reclassified from AOCI into income
 
5

 
(6
)
 
—

 
—

 
—

 
—

 
1

Foreign currency exchange rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
(126
)
Amount of gains (losses) reclassified from AOCI into income
 
(1
)
 
47

 
—

 
—

 
—

 
—

 
(46
)
Foreign currency transaction gains (losses) on hedged items
 
—

 
(56
)
 
—

 
—

 
—

 
—

 
—

Credit derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
—

Amount of gains (losses) reclassified from AOCI into income
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
4

 
(15
)
 
—

 
—

 
—

 
—

 
71

Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives (1)
 
(1
)
 
—

 
141

 
—

 
—

 
—

 
N/A

Foreign currency exchange rate derivatives (1)
 
—

 
—

 
(61
)
 
—

 
—

 
—

 
N/A

Credit derivatives — purchased (1)
 
—

 
—

 
(10
)
 
—

 
—

 
—

 
N/A

Credit derivatives — written (1)
 
—

 
—

 
92

 
—

 
—

 
—

 
N/A

Equity derivatives (1)
 
—

 
—

 
(482
)
 
(68
)
 
—

 
—

 
N/A

Foreign currency transaction gains (losses) on hedged items
 
—

 
—

 
37

 
—

 
—

 
—

 
N/A

Subtotal
 
(1
)
 
—

 
(283
)
 
(68
)
 
—

 
—

 
N/A

Earned income on derivatives
 
70

 
—

 
71

 
31

 
(32
)
 
—

 
—

Embedded derivatives (2)
 
N/A

 
N/A

 
(98
)
 
—

 
N/A

 
N/A

 
N/A

Total
 
$
72

 
$
(15
)
 
$
(310
)
 
$
(38
)
 
$
(32
)
 
$
—

 
$
71

__________________
(1)
Excludes earned income on derivatives.
(2)
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 $111 million and ($11) million for the three months ended March 31, 2020 and 2019, respectively.
Net derivatives gains (losses) recognized on fair value derivatives and the related hedged items
The following table presents the balance sheet classification, carrying amount and cumulative fair value hedging adjustments for items designated and qualifying as hedged items in fair value hedges:
Balance Sheet Line Item
 
Carrying Amount of the
Hedged
Assets/(Liabilities)
 
Cumulative Amount
of Fair Value Hedging Adjustments
Included in the Carrying Amount of Hedged
Assets/(Liabilities) (1)
 
 
March 31, 2020
 
December 31, 2019
 
March 31, 2020
 
December 31, 2019
 
 
(In millions)
Fixed maturity securities AFS
 
$
380

 
$
404

 
$
(1
)
 
$
(1
)
Mortgage loans
 
$
1,019

 
$
1,127

 
$
15

 
$
2

Future policy benefits
 
$
(5,705
)
 
$
(4,475
)
 
$
(1,677
)
 
$
(908
)
__________________
(1)
At both March 31, 2020 and December 31, 2019, the hedging adjustments on discontinued hedging relationships includes ($1) million
Schedule of estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps
The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:
 
 
March 31, 2020
 
December 31, 2019
Rating Agency Designation of Referenced
Credit Obligations (1)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
 
(Dollars in millions)
Aaa/Aa/A
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
$
1

 
$
84

 
1.1

 
$
1

 
$
94

 
1.7

Credit default swaps referencing indices
 
—

 
2,210

 
2.2

 
34

 
2,099

 
2.3

Subtotal
 
1

 
2,294

 
2.1

 
35

 
2,193

 
2.2

Baa
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
(2
)
 
164

 
2.2

 
2

 
124

 
1.6

Credit default swaps referencing indices
 
(34
)
 
5,814

 
5.3

 
141

 
6,165

 
5.0

Subtotal
 
(36
)
 
5,978

 
5.2

 
143

 
6,289

 
5.0

Ba
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
(2
)
 
20

 
2.5

 
—

 
—

 
—

Credit default swaps referencing indices
 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
(2
)
 
20

 
2.5

 
—

 
—

 
—

B
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
—

 
10

 
0.2

 
—

 
10

 
0.5

Credit default swaps referencing indices
 
(13
)
 
216

 
4.7

 
21

 
219

 
5.0

Subtotal
 
(13
)
 
226

 
4.5

 
21

 
229

 
4.8

Total
 
$
(50
)
 
$
8,518

 
4.4

 
$
199

 
$
8,711

 
4.3

__________________
(1)
The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.
(2)
The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.
(3)
Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or municipals.
Estimated Fair Value of Derivative Assets and Liabilities after Master Netting Agreements and Cash Collateral
The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
 
 
March 31, 2020
 
December 31, 2019
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)
 
$
14,718

 
$
2,289

 
$
7,974

 
$
2,035

OTC-cleared (1)
 
816

 
548

 
191

 
53

Exchange-traded
 
7

 
1

 
—

 
5

Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)
 
15,541

 
2,838

 
8,165

 
2,093

Gross amounts not offset on the interim condensed consolidated balance sheets:
 


 


 


 


Gross estimated fair value of derivatives: (2)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(2,236
)
 
(2,236
)
 
(1,915
)
 
(1,915
)
OTC-cleared
 
(400
)
 
(400
)
 
(25
)
 
(25
)
Exchange-traded
 
—

 
—

 
—

 
—

Cash collateral: (3), (4)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(10,270
)
 
—

 
(4,808
)
 
—

OTC-cleared
 
—

 
(26
)
 
(165
)
 
—

Exchange-traded
 
—

 
—

 
—

 
—

Securities collateral: (5)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(2,178
)
 
(51
)
 
(1,246
)
 
(114
)
OTC-cleared
 
—

 
(122
)
 
—

 
(28
)
Exchange-traded
 
—

 
(1
)
 
—

 
(5
)
Net amount after application of master netting agreements and collateral
 
$
457

 
$
2

 
$
6

 
$
6

__________________
(1)
At March 31, 2020 and December 31, 2019, derivative assets included income (expense) accruals reported in accrued investment income or in other liabilities of $146 million and $85 million, respectively, and derivative liabilities included (income) expense accruals reported in accrued investment income or in other liabilities of $36 million and ($9) 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 by the Company for OTC-bilateral and OTC-cleared derivatives, where the centralized clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.
(4)
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 on the balance sheet. 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 March 31, 2020 and December 31, 2019, the Company received excess cash collateral of $170 million and $290 million, respectively, and provided no excess cash collateral for either period.
(5)
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at March 31, 2020, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge 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 March 31, 2020 and December 31, 2019, the Company received excess securities collateral with an estimated fair value of $265 million and $97 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At March 31, 2020 and December 31, 2019, the Company provided excess securities collateral with an estimated fair value of $107 million and $48 million, respectively, for its OTC-bilateral derivatives, $1.4 billion and $462 million, respectively, for its OTC-cleared derivatives, and $85 million and $90 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
Estimated Fair Value of Derivative Assets and Liabilities after Master Netting Agreements and Cash Collateral
The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
 
 
March 31, 2020
 
December 31, 2019
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)
 
$
14,718

 
$
2,289

 
$
7,974

 
$
2,035

OTC-cleared (1)
 
816

 
548

 
191

 
53

Exchange-traded
 
7

 
1

 
—

 
5

Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)
 
15,541

 
2,838

 
8,165

 
2,093

Gross amounts not offset on the interim condensed consolidated balance sheets:
 


 


 


 


Gross estimated fair value of derivatives: (2)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(2,236
)
 
(2,236
)
 
(1,915
)
 
(1,915
)
OTC-cleared
 
(400
)
 
(400
)
 
(25
)
 
(25
)
Exchange-traded
 
—

 
—

 
—

 
—

Cash collateral: (3), (4)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(10,270
)
 
—

 
(4,808
)
 
—

OTC-cleared
 
—

 
(26
)
 
(165
)
 
—

Exchange-traded
 
—

 
—

 
—

 
—

Securities collateral: (5)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(2,178
)
 
(51
)
 
(1,246
)
 
(114
)
OTC-cleared
 
—

 
(122
)
 
—

 
(28
)
Exchange-traded
 
—

 
(1
)
 
—

 
(5
)
Net amount after application of master netting agreements and collateral
 
$
457

 
$
2

 
$
6

 
$
6

__________________
(1)
At March 31, 2020 and December 31, 2019, derivative assets included income (expense) accruals reported in accrued investment income or in other liabilities of $146 million and $85 million, respectively, and derivative liabilities included (income) expense accruals reported in accrued investment income or in other liabilities of $36 million and ($9) 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 by the Company for OTC-bilateral and OTC-cleared derivatives, where the centralized clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.
(4)
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 on the balance sheet. 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 March 31, 2020 and December 31, 2019, the Company received excess cash collateral of $170 million and $290 million, respectively, and provided no excess cash collateral for either period.
(5)
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at March 31, 2020, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge 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 March 31, 2020 and December 31, 2019, the Company received excess securities collateral with an estimated fair value of $265 million and $97 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At March 31, 2020 and December 31, 2019, the Company provided excess securities collateral with an estimated fair value of $107 million and $48 million, respectively, for its OTC-bilateral derivatives, $1.4 billion and $462 million, respectively, for its OTC-cleared derivatives, and $85 million and $90 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
Derivative Instruments, Gain (Loss) [Line Items]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
6. Derivatives
Accounting for Derivatives
Freestanding Derivatives
Freestanding derivatives are carried on the Company’s balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement.
Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivative’s carrying value in other invested assets or other liabilities.
If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows:
Statement of Operations Presentation:
Derivative:
Policyholder benefits and claims
• 
Economic hedges of variable annuity guarantees included in
future policy benefits
Net investment income
• 
Economic hedges of equity method investments in joint
ventures
Hedge Accounting
To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows:
•
Fair value hedge - a hedge of the estimated fair value of a recognized asset or liability - in the same line item as the earnings effect of the hedged item. The carrying value of the hedged recognized asset or liability is adjusted for changes in its estimated fair value due to the hedged risk.
•
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 - in OCI and reclassified into the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.
The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported on the statement of operations within interest income or interest expense to match the location of the hedged item.
In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument’s effectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income.
The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, (ii) the derivative expires, is sold, terminated, or exercised, (iii) it is no longer probable that the hedged forecasted transaction will occur, or (iv) the derivative is de-designated as a hedging instrument.
When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurring, the changes in estimated fair value of derivatives recorded in OCI related to discontinued cash flow hedges are released into the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.
When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable of occurring are recognized immediately in net investment gains (losses).
In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses).
Embedded Derivatives
The Company issues certain products, which include variable annuities and investment contracts, and is a party to certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if:
•
the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated 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.
Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent “excess” fees and are reported in universal life and investment-type product policy fees.
See Note 7 for information about the fair value hierarchy for derivatives.
Derivative Strategies
The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives.
Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Certain of the Company’s OTC derivatives are cleared and settled through central clearing counterparties (“OTC-cleared”), while others are bilateral contracts between two counterparties (“OTC-bilateral”). The types of derivatives the Company uses include swaps, forwards, futures and option contracts. To a lesser extent, the Company uses credit default swaps and structured interest rate swaps to synthetically replicate investment risks and returns which are not readily available in the cash markets.
Interest Rate Derivatives
The Company uses a variety of interest rate derivatives to reduce its exposure to changes in interest rates, including interest rate swaps, interest rate total return swaps, caps, floors, swaptions, futures and forwards.
Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional amount. The Company utilizes interest rate swaps in fair value, cash flow and nonqualifying hedging relationships.
The Company uses structured interest rate swaps to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. government and agency, or other fixed maturity securities AFS. Structured interest rate swaps are included in interest rate swaps and are not designated as hedging instruments.
Interest rate total return swaps are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and a benchmark interest rate, calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. Interest rate total return swaps are used by the Company to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate total return swaps in nonqualifying hedging relationships.
The Company purchases interest rate caps primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities, and interest rate floors primarily to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in nonqualifying hedging relationships.
In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate securities, to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts and to pledge initial margin based on futures exchange requirements. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring, to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance, and to hedge minimum guarantees embedded in certain variable annuity products issued by the Company. The Company utilizes exchange-traded interest rate futures in nonqualifying hedging relationships.
Swaptions are used by the Company to hedge interest rate risk associated with the Company’s long-term liabilities and invested assets. A swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium for purchased swaptions and receives a premium for written swaptions. The Company utilizes swaptions in nonqualifying hedging relationships. Swaptions are included in interest rate options.
The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in cash flow and nonqualifying hedging relationships.
A synthetic guaranteed interest contract (“GIC”) is a contract that simulates the performance of a traditional GIC through the use of financial instruments. The contractholder owns the underlying assets, and the Company provides a guarantee (or “wrap”) on the participant funds for an annual risk charge. The Company’s maximum exposure to loss on synthetic GICs is the notional amount, in the event the values of all of the underlying assets were reduced to zero. The Company’s risk is substantially lower due to contractual provisions that limit the portfolio to high quality assets, which are pre-approved and monitored for compliance, as well as the collection of risk charges. In addition, the crediting rates reset periodically to amortize market value gains and losses over a period equal to the duration of the wrapped portfolio, subject to a 0% floor. While plan participants may transact at book value, contractholder withdrawals may only occur immediately at market value, or at book value paid over a period of time per contract provisions. Synthetic GICs are not designated as hedging instruments.
Foreign Currency Exchange Rate Derivatives
The Company uses foreign currency exchange rate derivatives, including foreign currency swaps and foreign currency forwards, to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies.
In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company utilizes foreign currency swaps in fair value, cash flow and nonqualifying hedging relationships.
In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. The Company utilizes foreign currency forwards in nonqualifying hedging relationships.
Credit Derivatives
The Company enters into purchased credit default swaps to hedge against credit-related changes in the value of its investments. In a credit default swap transaction, the Company agrees with another party to pay, at specified intervals, a premium to hedge credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional amount in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit events vary by type of issuer but typically include bankruptcy, failure to pay debt obligations and involuntary restructuring for corporate obligors, as well as repudiation, moratorium or governmental intervention for sovereign obligors. In each case, payout on a credit default swap is triggered only after the Credit Derivatives Determinations Committee of the International Swaps and Derivatives Association, Inc. (“ISDA”) deems that a credit event has occurred. The Company utilizes credit default swaps in nonqualifying hedging relationships.
The Company enters into written credit default swaps to synthetically create credit investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and one or more cash instruments, such as U.S. government and agency, or other fixed maturity securities AFS. These credit default swaps are not designated as hedging instruments.
The Company enters into forwards to lock in the price to be paid for forward purchases of certain securities. The price is agreed upon at the time of the contract and payment for the contract is made at a specified future date. When the primary purpose of entering into these transactions is to hedge against the risk of changes in purchase price due to changes in credit spreads, the Company designates these transactions as credit forwards. The Company utilizes credit forwards in cash flow hedging relationships.
Equity Derivatives
The Company uses a variety of equity derivatives to reduce its exposure to equity market risk, including equity index options, equity variance swaps, exchange-traded equity futures and equity total return swaps.
Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products issued by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the underlying equity index within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise and the strike price. Certain of these contracts may also contain settlement provisions linked to interest rates. In certain instances, the Company may enter into a combination of transactions to hedge adverse changes in equity indices within a pre-determined range through the purchase and sale of options. The Company utilizes equity index options in nonqualifying hedging relationships.
Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products issued by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. The Company utilizes equity variance swaps in nonqualifying hedging relationships.
In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of equity securities, to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts and to pledge initial margin based on futures exchange requirements. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge minimum guarantees embedded in certain variable annuity products issued by the Company. The Company utilizes exchange-traded equity futures in nonqualifying hedging relationships.
In an equity total return swap, the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and a benchmark interest rate, calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. The Company uses equity total return swaps to hedge its equity market guarantees in certain of its insurance products. Equity total return swaps can be used as hedges or to synthetically create investments. The Company utilizes equity total return swaps in nonqualifying hedging relationships.
Primary Risks Managed by Derivatives
The following table presents the primary underlying risk exposure, gross notional amount, and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:
 
 
 
 
March 31, 2020
 
December 31, 2019
 
 
Primary Underlying Risk Exposure
 
Gross
Notional
Amount
 
Estimated Fair Value
 
Gross
Notional
Amount
 
Estimated Fair Value
 
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
 
 
(In millions)
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Interest rate
 
$
3,231

 
$
3,393

 
$
10

 
$
2,370

 
$
2,668

 
$
2

Foreign currency swaps
 
Foreign currency exchange rate
 
1,250

 
64

 
—

 
1,250

 
12

 
17

Subtotal
 
 
 
4,481

 
3,457

 
10

 
3,620

 
2,680

 
19

Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Interest rate
 
4,734

 
156

 
27

 
3,324

 
125

 
27

Interest rate forwards
 
Interest rate
 
6,259

 
969

 
—

 
6,793

 
75

 
142

Foreign currency swaps
 
Foreign currency exchange rate
 
27,392

 
3,102

 
1,758

 
27,240

 
1,199

 
1,103

Subtotal
 
 
 
38,385

 
4,227

 
1,785

 
37,357

 
1,399

 
1,272

Total qualifying hedges
 
 
 
42,866

 
7,684

 
1,795

 
40,977

 
4,079

 
1,291

Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Interest rate
 
50,562

 
4,319

 
635

 
38,820

 
2,296

 
133

Interest rate floors
 
Interest rate
 
12,701

 
424

 
—

 
12,701

 
156

 
—

Interest rate caps
 
Interest rate
 
55,006

 
21

 
—

 
42,622

 
18

 
5

Interest rate futures
 
Interest rate
 
724

 
—

 
—

 
745

 
—

 
—

Interest rate options
 
Interest rate
 
25,105

 
772

 
—

 
24,944

 
427

 
—

Interest rate total return swaps
 
Interest rate
 
1,048

 
180

 
—

 
1,048

 
5

 
49

Synthetic GICs
 
Interest rate
 
17,201

 
—

 
—

 
16,498

 
—

 
—

Foreign currency swaps
 
Foreign currency exchange rate
 
6,009

 
721

 
85

 
6,124

 
419

 
97

Foreign currency forwards
 
Foreign currency exchange rate
 
846

 
18

 
14

 
1,001

 
12

 
8

Credit default swaps — purchased
 
Credit
 
863

 
39

 
1

 
888

 
4

 
11

Credit default swaps — written
 
Credit
 
8,518

 
26

 
76

 
8,711

 
200

 
1

Equity futures
 
Equity market
 
561

 
7

 
1

 
2,039

 
—

 
5

Equity index options
 
Equity market
 
21,783

 
997

 
184

 
23,104

 
447

 
417

Equity variance swaps
 
Equity market
 
637

 
12

 
10

 
637

 
17

 
17

Equity total return swaps
 
Equity market
 
716

 
175

 
1

 
716

 
—

 
68

Total non-designated or nonqualifying derivatives
 
202,280

 
7,711

 
1,007

 
180,598

 
4,001

 
811

Total
 
 
 
$
245,146

 
$
15,395

 
$
2,802

 
$
221,575

 
$
8,080

 
$
2,102


Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both March 31, 2020 and December 31, 2019. The Company’s use of derivatives includes (i) derivatives that serve as macro hedges of the Company’s exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules, (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship, (iii) derivatives that economically hedge embedded derivatives that do not qualify for hedge accounting because the changes in estimated fair value of the embedded derivatives are already recorded in net income, and (iv) written credit default swaps and interest rate swaps that are used to synthetically create investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged.
The Effects of Derivatives on the Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
The following table presents the consolidated financial statement location and amount of gain (loss) recognized on fair value, cash flow, nonqualifying hedging relationships and embedded derivatives:
 
 
Three Months Ended March 31, 2020
 
 
Net Investment Income
 
Net Investment Gains (Losses)
 
Net Derivative Gains (Losses)
 
Policyholder Benefits and Claims
 
Interest Credited to Policyholder Account Balances
 
Other Expenses
 
OCI
 
 
(In millions)
Gain (Loss) on Fair Value Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives designated as hedging instruments (1)
 
$
(10
)
 
$
—

 
$
—

 
$
774

 
$
—

 
$
—

 
N/A

Hedged items
 
4

 
—

 
—

 
(769
)
 
—

 
—

 
N/A

Foreign currency exchange rate derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives designated as hedging instruments (1)
 
69

 
—

 
—

 
—

 
—

 
—

 
N/A

Hedged items
 
(62
)
 
—

 
—

 
—

 
—

 
—

 
N/A

Amount excluded from the assessment of hedge effectiveness
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A

Subtotal
 
1

 
—

 
—

 
5

 
—

 
—

 
N/A

Gain (Loss) on Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
$
2,002

Amount of gains (losses) reclassified from AOCI into income
 
6

 
6

 
—

 
—

 
—

 
—

 
(12
)
Foreign currency exchange rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
1,289

Amount of gains (losses) reclassified from AOCI into income
 
—

 
(451
)
 
—

 
—

 
—

 
—

 
451

Foreign currency transaction gains (losses) on hedged items
 
—

 
457

 
—

 
—

 
—

 
—

 
—

Credit derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
—

Amount of gains (losses) reclassified from AOCI into income
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
6

 
12

 
—

 
—

 
—

 
—

 
3,730

Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives (1)
 
(4
)
 
—

 
3,394

 
—

 
—

 
—

 
N/A

Foreign currency exchange rate derivatives (1)
 
—

 
—

 
374

 
—

 
—

 
—

 
N/A

Credit derivatives — purchased (1)
 
—

 
—

 
45

 
—

 
—

 
—

 
N/A

Credit derivatives — written (1)
 
—

 
—

 
(234
)
 
—

 
—

 
—

 
N/A

Equity derivatives (1)
 
—

 
—

 
1,081

 
131

 
—

 
—

 
N/A

Foreign currency transaction gains (losses) on hedged items
 
—

 
—

 
(112
)
 
—

 
—

 
—

 
N/A

Subtotal
 
(4
)
 
—

 
4,548

 
131

 
—

 
—

 
N/A

Earned income on derivatives
 
82

 
—

 
80

 
38

 
(44
)
 
—

 
—

Embedded derivatives (2)
 
N/A

 
N/A

 
(1,073
)
 
—

 
N/A

 
N/A

 
N/A

Total
 
$
85

 
$
12

 
$
3,555

 
$
174

 
$
(44
)
 
$
—

 
$
3,730

 
 
Three Months Ended March 31, 2019
 
 
Net Investment Income
 
Net Investment Gains (Losses)
 
Net Derivative Gains (Losses)
 
Policyholder Benefits and Claims
 
Interest Credited to Policyholder Account Balances
 
Other Expenses
 
OCI
 
 
(In millions)
Gain (Loss) on Fair Value Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives designated as hedging instruments (1)
 
$
(3
)
 
$
—

 
$
—

 
$
127

 
$
—

 
$
—

 
N/A

Hedged items
 
3

 
—

 
—

 
(128
)
 
—

 
—

 
N/A

Foreign currency exchange rate derivatives:
 


 


 


 


 


 


 


Derivatives designated as hedging instruments (1)
 
(29
)
 
—

 
—

 
—

 
—

 
—

 
N/A

Hedged items
 
28

 
—

 
—

 
—

 
—

 
—

 
N/A

Amount excluded from the assessment of hedge effectiveness
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A

Subtotal
 
(1
)
 
—

 
—

 
(1
)
 
—

 
—

 
N/A

Gain (Loss) on Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
$
242

Amount of gains (losses) reclassified from AOCI into income
 
5

 
(6
)
 
—

 
—

 
—

 
—

 
1

Foreign currency exchange rate derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
(126
)
Amount of gains (losses) reclassified from AOCI into income
 
(1
)
 
47

 
—

 
—

 
—

 
—

 
(46
)
Foreign currency transaction gains (losses) on hedged items
 
—

 
(56
)
 
—

 
—

 
—

 
—

 
—

Credit derivatives: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of gains (losses) deferred in AOCI
 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
N/A

 
—

Amount of gains (losses) reclassified from AOCI into income
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
4

 
(15
)
 
—

 
—

 
—

 
—

 
71

Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives (1)
 
(1
)
 
—

 
141

 
—

 
—

 
—

 
N/A

Foreign currency exchange rate derivatives (1)
 
—

 
—

 
(61
)
 
—

 
—

 
—

 
N/A

Credit derivatives — purchased (1)
 
—

 
—

 
(10
)
 
—

 
—

 
—

 
N/A

Credit derivatives — written (1)
 
—

 
—

 
92

 
—

 
—

 
—

 
N/A

Equity derivatives (1)
 
—

 
—

 
(482
)
 
(68
)
 
—

 
—

 
N/A

Foreign currency transaction gains (losses) on hedged items
 
—

 
—

 
37

 
—

 
—

 
—

 
N/A

Subtotal
 
(1
)
 
—

 
(283
)
 
(68
)
 
—

 
—

 
N/A

Earned income on derivatives
 
70

 
—

 
71

 
31

 
(32
)
 
—

 
—

Embedded derivatives (2)
 
N/A

 
N/A

 
(98
)
 
—

 
N/A

 
N/A

 
N/A

Total
 
$
72

 
$
(15
)
 
$
(310
)
 
$
(38
)
 
$
(32
)
 
$
—

 
$
71

__________________
(1)
Excludes earned income on derivatives.
(2)
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 $111 million and ($11) million for the three months ended March 31, 2020 and 2019, respectively.
Fair Value Hedges
The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities and (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities.
The following table presents the balance sheet classification, carrying amount and cumulative fair value hedging adjustments for items designated and qualifying as hedged items in fair value hedges:
Balance Sheet Line Item
 
Carrying Amount of the
Hedged
Assets/(Liabilities)
 
Cumulative Amount
of Fair Value Hedging Adjustments
Included in the Carrying Amount of Hedged
Assets/(Liabilities) (1)
 
 
March 31, 2020
 
December 31, 2019
 
March 31, 2020
 
December 31, 2019
 
 
(In millions)
Fixed maturity securities AFS
 
$
380

 
$
404

 
$
(1
)
 
$
(1
)
Mortgage loans
 
$
1,019

 
$
1,127

 
$
15

 
$
2

Future policy benefits
 
$
(5,705
)
 
$
(4,475
)
 
$
(1,677
)
 
$
(908
)
__________________
(1)
At both March 31, 2020 and December 31, 2019, the hedging adjustments on discontinued hedging relationships includes ($1) million.
All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
Cash Flow Hedges
The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities, (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments, and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments.
In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into income. These amounts were $1 million and $2 million for the three months ended March 31, 2020 and 2019, respectively.
At March 31, 2020 and December 31, 2019, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed nine years and eight years, respectively.
At March 31, 2020 and December 31, 2019, the balance in AOCI associated with cash flow hedges was $5.8 billion and $2.0 billion, respectively.
All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
At March 31, 2020, the Company expected to reclassify ($16) million of deferred net gains (losses) on derivatives in AOCI, to earnings within the next 12 months.
Credit Derivatives
In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the nonqualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company’s maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $8.5 billion and $8.7 billion at March 31, 2020 and December 31, 2019, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. At March 31, 2020 and December 31, 2019, the Company would have paid $50 million and received $199 million, respectively, to terminate all of these contracts.
The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:
 
 
March 31, 2020
 
December 31, 2019
Rating Agency Designation of Referenced
Credit Obligations (1)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
Estimated
Fair Value
of Credit
Default
Swaps
 
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
 
Weighted
Average
Years to
Maturity (2)
 
 
(Dollars in millions)
Aaa/Aa/A
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
$
1

 
$
84

 
1.1

 
$
1

 
$
94

 
1.7

Credit default swaps referencing indices
 
—

 
2,210

 
2.2

 
34

 
2,099

 
2.3

Subtotal
 
1

 
2,294

 
2.1

 
35

 
2,193

 
2.2

Baa
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
(2
)
 
164

 
2.2

 
2

 
124

 
1.6

Credit default swaps referencing indices
 
(34
)
 
5,814

 
5.3

 
141

 
6,165

 
5.0

Subtotal
 
(36
)
 
5,978

 
5.2

 
143

 
6,289

 
5.0

Ba
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
(2
)
 
20

 
2.5

 
—

 
—

 
—

Credit default swaps referencing indices
 
—

 
—

 
—

 
—

 
—

 
—

Subtotal
 
(2
)
 
20

 
2.5

 
—

 
—

 
—

B
 
 
 
 
 
 
 
 
 
 
 
 
Single name credit default swaps (3)
 
—

 
10

 
0.2

 
—

 
10

 
0.5

Credit default swaps referencing indices
 
(13
)
 
216

 
4.7

 
21

 
219

 
5.0

Subtotal
 
(13
)
 
226

 
4.5

 
21

 
229

 
4.8

Total
 
$
(50
)
 
$
8,518

 
4.4

 
$
199

 
$
8,711

 
4.3

__________________
(1)
The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.
(2)
The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.
(3)
Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or municipals.
Credit Risk on Freestanding Derivatives
The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company’s derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements.
The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties and establishing and monitoring exposure limits. The Company’s OTC-bilateral derivative transactions are governed by ISDA Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, the Company is permitted to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions. All of the Company’s ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives.

The Company’s OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivatives.
See Note 7 for a description of the impact of credit risk on the valuation of derivatives.
The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
 
 
March 31, 2020
 
December 31, 2019
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)
 
$
14,718

 
$
2,289

 
$
7,974

 
$
2,035

OTC-cleared (1)
 
816

 
548

 
191

 
53

Exchange-traded
 
7

 
1

 
—

 
5

Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)
 
15,541

 
2,838

 
8,165

 
2,093

Gross amounts not offset on the interim condensed consolidated balance sheets:
 


 


 


 


Gross estimated fair value of derivatives: (2)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(2,236
)
 
(2,236
)
 
(1,915
)
 
(1,915
)
OTC-cleared
 
(400
)
 
(400
)
 
(25
)
 
(25
)
Exchange-traded
 
—

 
—

 
—

 
—

Cash collateral: (3), (4)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(10,270
)
 
—

 
(4,808
)
 
—

OTC-cleared
 
—

 
(26
)
 
(165
)
 
—

Exchange-traded
 
—

 
—

 
—

 
—

Securities collateral: (5)
 
 
 
 
 
 
 
 
OTC-bilateral
 
(2,178
)
 
(51
)
 
(1,246
)
 
(114
)
OTC-cleared
 
—

 
(122
)
 
—

 
(28
)
Exchange-traded
 
—

 
(1
)
 
—

 
(5
)
Net amount after application of master netting agreements and collateral
 
$
457

 
$
2

 
$
6

 
$
6

__________________
(1)
At March 31, 2020 and December 31, 2019, derivative assets included income (expense) accruals reported in accrued investment income or in other liabilities of $146 million and $85 million, respectively, and derivative liabilities included (income) expense accruals reported in accrued investment income or in other liabilities of $36 million and ($9) 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 by the Company for OTC-bilateral and OTC-cleared derivatives, where the centralized clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.
(4)
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 on the balance sheet. 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 March 31, 2020 and December 31, 2019, the Company received excess cash collateral of $170 million and $290 million, respectively, and provided no excess cash collateral for either period.
(5)
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at March 31, 2020, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge 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 March 31, 2020 and December 31, 2019, the Company received excess securities collateral with an estimated fair value of $265 million and $97 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At March 31, 2020 and December 31, 2019, the Company provided excess securities collateral with an estimated fair value of $107 million and $48 million, respectively, for its OTC-bilateral derivatives, $1.4 billion and $462 million, respectively, for its OTC-cleared derivatives, and $85 million and $90 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
The Company’s collateral arrangements for its OTC-bilateral derivatives require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that counterparty reaches a minimum transfer amount. All of the Company’s netting agreements for derivatives contain provisions that require both Metropolitan Life Insurance Company and the counterparty to maintain a specific investment grade financial strength or credit rating from each of Moody’s and S&P. If a party’s financial strength or credit ratings were to fall below that specific investment grade financial strength or credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party’s reasonable valuation of the derivatives.
The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that were in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged.
 
 
March 31, 2020
 
December 31, 2019
 
 
Derivatives
Subject to
Financial
Strength-
Contingent
Provisions
 
Derivatives
Not Subject
to Financial
Strength-
Contingent
Provisions
 
Total
 
Derivatives
Subject to
Financial
Strength-
Contingent
Provisions
 
Derivatives
Not Subject
to Financial
Strength-
Contingent
Provisions
 
Total
 
 
(In millions)
Estimated Fair Value of Derivatives in a Net
Liability Position (1)
 
$
52

 
$
—

 
$
52

 
$
120

 
$
—

 
$
120

Estimated Fair Value of Collateral Provided:
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities AFS
 
$
51

 
$
—

 
$
51

 
$
135

 
$
—

 
$
135

__________________
(1)
After taking into consideration the existence of netting agreements.
Embedded Derivatives
The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives.
The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:
 
 
Balance Sheet Location
 
March 31, 2020
 
December 31, 2019
 
 
 
 
(In millions)
Embedded derivatives within liability host contracts:
 
 
 
 
 
 
Direct guaranteed minimum benefits
 
Policyholder account balances
 
$
1,428

 
$
175

Assumed guaranteed minimum benefits
 
Policyholder account balances
 
7

 
3

Funds withheld on ceded reinsurance (including affiliated)
 
Other liabilities
 
943

 
1,017

Fixed annuities with equity indexed returns
 
Policyholder account balances
 
62

 
130

Other guarantees
 
Policyholder account balances
 
2

 
—

Embedded derivatives within liability host contracts
 
$
2,442

 
$
1,325
Schedule of Derivative Instruments
The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that were in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged.
 
 
March 31, 2020
 
December 31, 2019
 
 
Derivatives
Subject to
Financial
Strength-
Contingent
Provisions
 
Derivatives
Not Subject
to Financial
Strength-
Contingent
Provisions
 
Total
 
Derivatives
Subject to
Financial
Strength-
Contingent
Provisions
 
Derivatives
Not Subject
to Financial
Strength-
Contingent
Provisions
 
Total
 
 
(In millions)
Estimated Fair Value of Derivatives in a Net
Liability Position (1)
 
$
52

 
$
—

 
$
52

 
$
120

 
$
—

 
$
120

Estimated Fair Value of Collateral Provided:
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities AFS
 
$
51

 
$
—

 
$
51

 
$
135

 
$
—

 
$
135

__________________
(1)
After taking into consideration the existence of netting agreements.
Embedded Derivative Financial Instruments [Member]  
Derivative Instruments, Gain (Loss) [Line Items]  
Schedule of Derivative Instruments
The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:
 
 
Balance Sheet Location
 
March 31, 2020
 
December 31, 2019
 
 
 
 
(In millions)
Embedded derivatives within liability host contracts:
 
 
 
 
 
 
Direct guaranteed minimum benefits
 
Policyholder account balances
 
$
1,428

 
$
175

Assumed guaranteed minimum benefits
 
Policyholder account balances
 
7

 
3

Funds withheld on ceded reinsurance (including affiliated)
 
Other liabilities
 
943

 
1,017

Fixed annuities with equity indexed returns
 
Policyholder account balances
 
62

 
130

Other guarantees
 
Policyholder account balances
 
2

 
—

Embedded derivatives within liability host contracts
 
$
2,442

 
$
1,325
v3.20.1
Fair Value (Tables)
 3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Recurring Fair Value Measurements
The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at:
 
March 31, 2020
 
Fair Value Hierarchy
 
 
 
Level 1
 
Level 2
 
Level 3
 
Total 
Estimated
Fair Value
 
(In millions)
Assets
 
 
 
 
 
 
 
Fixed maturity securities AFS:
 
 
 
 
 
 
 
U.S. corporate
$
—

 
$
49,313

 
$
6,522

 
$
55,835

U.S. government and agency
11,591

 
22,144

 
—

 
33,735

Foreign corporate
—

 
21,190

 
6,456

 
27,646

RMBS
161

 
21,689

 
2,403

 
24,253

ABS
—

 
9,778

 
802

 
10,580

Municipals
—

 
8,293

 
—

 
8,293

CMBS
—

 
5,738

 
35

 
5,773

Foreign government
—

 
4,734

 
33

 
4,767

Total fixed maturity securities AFS
11,752

 
142,879

 
16,251

 
170,882

Short-term investments
2,159

 
1,761

 
354

 
4,274

Residential mortgage loans — FVO
—

 
—

 
180

 
180

Other investments
282

 
155

 
655

 
1,092

Derivative assets: (1)
 
 
 
 
 
 
 
Interest rate
—

 
9,085

 
1,149

 
10,234

Foreign currency exchange rate
—

 
3,895

 
10

 
3,905

Credit
—

 
45

 
20

 
65

Equity market
7

 
1,140

 
44

 
1,191

Total derivative assets
7

 
14,165

 
1,223

 
15,395

Separate account assets (2)
22,995

 
87,604

 
942

 
111,541

Total assets (3)
$
37,195

 
$
246,564

 
$
19,605

 
$
303,364

Liabilities
 
 
 
 
 
 
 
Derivative liabilities: (1)
 
 
 
 
 
 
 
Interest rate
$
—

 
$
672

 
$
—

 
$
672

Foreign currency exchange rate
—

 
1,857

 
—

 
1,857

Credit
—

 
56

 
21

 
77

Equity market
1

 
185

 
10

 
196

Total derivative liabilities
1

 
2,770

 
31

 
2,802

Embedded derivatives within liability host contracts (4)
—

 
—

 
2,442

 
2,442

Separate account liabilities (2)
4

 
46

 
15

 
65

Total liabilities
$
5

 
$
2,816

 
$
2,488

 
$
5,309

 
December 31, 2019
 
Fair Value Hierarchy
 
 
 
Level 1
 
Level 2
 
Level 3
 
Total 
Estimated
Fair Value
 
(In millions)
Assets
 
 
 
 
 
 
 
Fixed maturity securities AFS:
 
 
 
 
 
 
 
U.S. corporate
$
—

 
$
53,975

 
$
4,484

 
$
58,459

Foreign corporate
—

 
25,403

 
4,898

 
30,301

U.S. government and agency
11,484

 
17,764

 
—

 
29,248

RMBS
3

 
20,158

 
2,612

 
22,773

ABS
—

 
9,459

 
742

 
10,201

Municipals
—

 
7,849

 
7

 
7,856

CMBS
—

 
5,679

 
41

 
5,720

Foreign government
—

 
4,996

 
10

 
5,006

Total fixed maturity securities AFS
11,487

 
145,283

 
12,794

 
169,564

Short-term investments
1,077

 
789

 
17

 
1,883

Residential mortgage loans — FVO
—

 
—

 
188

 
188

Other investments
396

 
56

 
799

 
1,251

Derivative assets: (1)
 
 
 
 
 
 
 
Interest rate
—

 
5,690

 
80

 
5,770

Foreign currency exchange rate
—

 
1,642

 
—

 
1,642

Credit
—

 
172

 
32

 
204

Equity market
—

 
439

 
25

 
464

Total derivative assets
—

 
7,943

 
137

 
8,080

Separate account assets (2)
22,753

 
94,192

 
922

 
117,867

Total assets (3)
$
35,713

 
$
248,263

 
$
14,857

 
$
298,833

Liabilities
 
 
 
 
 
 
 
Derivative liabilities: (1)
 
 
 
 
 
 
 
Interest rate
$
—

 
$
167

 
$
191

 
$
358

Foreign currency exchange rate
—

 
1,225

 
—

 
1,225

Credit
—

 
11

 
1

 
12

Equity market
5

 
485

 
17

 
507

Total derivative liabilities
5

 
1,888

 
209

 
2,102

Embedded derivatives within liability host contracts (4)
—

 
—

 
1,325

 
1,325

Separate account liabilities (2)
1

 
14

 
7

 
22

Total liabilities
$
6

 
$
1,902

 
$
1,541

 
$
3,449

__________________
(1)
Derivative assets are presented within other invested assets on the interim condensed consolidated balance sheets and derivative liabilities are presented within other liabilities on the interim condensed consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the interim condensed consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables.
(2)
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. Separate account liabilities presented in the tables above represent derivative liabilities.
(3)
Total assets included in the fair value hierarchy exclude other limited partnership interests that are measured at estimated fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient. At March 31, 2020 and December 31, 2019, the estimated fair value of such investments was $88 million and $90 million, respectively.
(4)
Embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities on the interim condensed consolidated balance sheets.
Fair Value Inputs, Quantitative Information
The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:
 
 
 
 
 
 
 
March 31, 2020
 
December 31, 2019
 
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 AFS (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. corporate and foreign corporate
•
Matrix pricing
 
•
Offered quotes (4)
 
—
-
191
 
104
 
5
-
145
 
110
 
Increase
 
•
Market pricing

•
Quoted prices (4)

20
-
130

98

25
-
131

101

Increase
RMBS
•
Market pricing
 
•
Quoted prices (4)
 
—
-
126
 
89
 
—
-
119
 
95
 
Increase (5)
ABS
•
Market pricing
 
•
Quoted prices (4)
 
5
-
101
 
90
 
8
-
101
 
98
 
Increase (5)
Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate
•
Present value techniques
 
•
Swap yield (6)
 
66
-
147
 
117
 
190
-
251
 
 
 
Increase (7)
 
 
 
 
•
Repurchase rates (8)
 
(18)
-
—
 
(10)
 
(6)
-
6
 
 
 
Decrease (7)
Foreign currency exchange rate
•
Present value techniques
 
•
Swap yield (6)
 
(23)
-
(12)
 
(18)
 
(22)
-
(5)
 
 
 
Increase (7)
Credit
•
Present value techniques
 
•
Credit spreads (9)
 
98
-
104
 
100
 
96
-
100
 
 
 
Decrease (7)
 
•
Consensus pricing
 
•
Offered quotes (10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity market
•
Present value techniques or option pricing models
 
•
Volatility (11)
 
29%
-
56%

32%

14%
-
23%
 
 
 
Increase (7)
 
 
 
 
•
Correlation (12)
 
10%
-
30%

13%

10%
-
30%
 
 
 
 
Embedded derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct and assumed guaranteed minimum benefits
•
Option pricing techniques
 
•
Mortality rates:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ages 0 - 40
 
0.01%
-
0.18%
 
0.06%
 
0.01%
-
0.18%
 
 
 
Decrease (13)
 
 
 
 
 
Ages 41 - 60
 
0.04%
-
0.57%
 
0.30%
 
0.04%
-
0.57%
 
 
 
Decrease (13)
 
 
 
 
 
Ages 61 - 115
 
0.26%
-
100%
 
1.90%
 
0.26%
-
100%
 
 
 
Decrease (13)
 
 
 
 
•
Lapse rates:
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Durations 1 - 10
 
0.25%
-
100%
 
7.90%
 
0.25%
-
100%
 
 
 
Decrease (14)
 
 
 
 
 
Durations 11 - 20
 
3%
-
100%
 
6.40%
 
3%
-
100%
 
 
 
Decrease (14)
 
 
 
 
 
Durations 21 - 116
 
2%
-
100%
 
6.40%
 
2%
-
100%
 
 
 
Decrease (14)
 
 
 
 
•
Utilization rates
 
0%
-
22%
 
0.90%
 
0%
-
22%
 
 
 
Increase (15)
 
 
 
 
•
Withdrawal rates
 
0.25%
-
10%
 
4.23%
 
0.25%
-
10%
 
 
 
(16)
 
 
 
 
•
Long-term equity volatilities
 
16.24%
-
21.65%
 
18.30%
 
16.24%
-
21.65%
 
 
 
Increase (17)
 
 
 
 
•
Nonperformance risk spread
 
0.08%
-
0.56%
 
0.49%
 
0.03%
-
0.43%
 
 
 
Decrease (18)
__________________
(1)
The weighted average for fixed maturity securities AFS and derivatives is determined based on the estimated fair value of the securities. The weighted average for embedded derivatives is determined based on a combination of account values and experience data.
(2)
The impact of a decrease in input would have resulted in the opposite impact on estimated fair value. For embedded derivatives, changes to direct and assumed guaranteed minimum benefits are based on liability positions.
(3)
Significant increases (decreases) in expected default rates in isolation would have resulted in substantially lower (higher) valuations.
(4)
Range and weighted average are presented in accordance with the market convention for fixed maturity securities AFS of dollars per hundred dollars of par.
(5)
Changes in the assumptions used for the probability of default would have been 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.
(6)
Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are 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.
(7)
Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions.
(8)
Ranges represent different repurchase rates utilized as components within the valuation methodology and are presented in basis points.
(9)
Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps.
(10)
At both March 31, 2020 and December 31, 2019, 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)
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.
(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 contractholders 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, Measured on Recurring Basis, Unobservable Input Reconciliation
The following tables summarize the change of all assets (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):
 
 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
 
 
Fixed Maturity Securities AFS
 
 
 
 
Corporate (6)

Structured Products
 
Foreign Government

Municipals
 
Short-term
Investments
 
 
(In millions)
Three Months Ended March 31, 2020
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
9,382

 
$
3,395

 
$
10

 
$
7

 
$
17

Total realized/unrealized gains (losses) included in net income (loss) (1), (2)
 
(58
)
 
10

 
—

 
—

 
—

Total realized/unrealized gains (losses) included in AOCI
 
(766
)
 
(287
)
 
(3
)
 
—

 
—

Purchases (3)
 
1,660

 
257

 
26

 
—

 
352

Sales (3)
 
(515
)
 
(161
)
 
—

 
—

 
(1
)
Issuances (3)
 
—

 
—

 
—

 
—

 
—

Settlements (3)
 
—

 
—

 
—

 
—

 
—

Transfers into Level 3 (4)
 
3,594

 
45

 
1

 
—

 
—

Transfers out of Level 3 (4)
 
(319
)
 
(19
)
 
(1
)
 
(7
)
 
(14
)
Balance, end of period
 
$
12,978

 
$
3,240

 
$
33

 
$
—

 
$
354

Three Months Ended March 31, 2019
 


 
 
 


 
 
 


Balance, beginning of period
 
$
7,101

 
$
3,541

 
$
10

 
$
—

 
$
25

Total realized/unrealized gains (losses) included in net income (loss) (1), (2)
 
(2
)
 
13

 
—

 
—

 
—

Total realized/unrealized gains (losses) included in AOCI
 
230

 
19

 
—

 
—

 
—

Purchases (3)
 
330

 
128

 
11

 
—

 
102

Sales (3)
 
(168
)
 
(131
)
 
—

 
—

 
—

Issuances (3)
 
—

 
—

 
—

 
—

 
—

Settlements (3)
 
—

 
—

 
—

 
—

 
—

Transfers into Level 3 (4)
 
190

 
—

 
—

 
—

 
—

Transfers out of Level 3 (4)
 
(351
)
 
(256
)
 
—

 
—

 
—

Balance, end of period
 
$
7,330

 
$
3,314

 
$
21

 
$
—

 
$
127

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2020: (5)
 
$
(58
)
 
$
10

 
$
—

 
$
—

 
$
—

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2019: (5)
 
$
(2
)
 
$
13

 
$
—

 
$
—

 
$
—

Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2020 (5)
 
$
(770
)
 
$
(287
)
 
$
(3
)
 
$
—

 
$
—

 
 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
 
 
Residential
Mortgage
Loans - FVO
 
Other
 Investments
 
Net
Derivatives (7)
 
Net Embedded
Derivatives (8)
 
Separate
Accounts (9) 
 
 
(In millions)
Three Months Ended March 31, 2020
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
188

 
$
799

 
$
(72
)
 
$
(1,325
)
 
$
915

Total realized/unrealized gains (losses) included in net income (loss) (1), (2)
 
2

 
(48
)
 
266

 
(1,073
)
 
(9
)
Total realized/unrealized gains (losses) included in AOCI
 
—

 
—

 
1,111

 
—

 
—

Purchases (3)
 
—

 
15

 
—

 
—

 
85

Sales (3)
 
(5
)
 
(33
)
 
—

 
—

 
(56
)
Issuances (3)
 
—

 
—

 
—

 
—

 
(1
)
Settlements (3)
 
(5
)
 
—

 
(113
)
 
(44
)
 
—

Transfers into Level 3 (4)
 
—

 
—

 
—

 
—

 
10

Transfers out of Level 3 (4)
 
—

 
(78
)
 
—

 
—

 
(17
)
Balance, end of period
 
$
180

 
$
655

 
$
1,192

 
$
(2,442
)
 
$
927

Three Months Ended March 31, 2019
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
299

 
$
571

 
$
(192
)
 
$
(704
)
 
$
937

Total realized/unrealized gains (losses) included in net income (loss) (1), (2)
 
2

 
51

 
35

 
(98
)
 
3

Total realized/unrealized gains (losses) included in AOCI
 
—

 
—

 
98

 
—

 
—

Purchases (3)
 
—

 
2

 
—

 
—

 
80

Sales (3)
 
(16
)
 
(20
)
 
—

 
—

 
(122
)
Issuances (3)
 
—

 
—

 
—

 
—

 
2

Settlements (3)
 
(9
)
 
—

 
(28
)
 
(45
)
 
(1
)
Transfers into Level 3 (4)
 
—

 
—

 
—

 
—

 
—

Transfers out of Level 3 (4)
 
—

 
—

 
—

 
—

 
(2
)
Balance, end of period
 
$
276

 
$
604

 
$
(87
)
 
$
(847
)
 
$
897

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2020: (5)
 
$
—

 
$
(40
)
 
$
222

 
$
(1,071
)
 
$
—

Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2019: (5)
 
$
—

 
$
44

 
$
37

 
$
(97
)
 
$
—

Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2020 (5)
 
$
—

 
$
—

 
$
1,060

 
$
—

 
$
—

__________________
(1)
Amortization of premium/accretion of discount is included within net investment income. Impairments charged to net income (loss) on securities are included in net investment gains (losses), while changes in estimated fair value of residential mortgage loans — FVO are included in net investment income. Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported 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)
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) and included in AOCI relate to assets and liabilities still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).
(6)
Comprised of U.S. and foreign corporate securities.
(7)
Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
(8)
Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
(9)
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 (loss). For the purpose of this disclosure, these changes are presented within net investment gains (losses). Separate account assets and liabilities are presented net for the purposes of the rollforward.
Fair Value Option
Fair Value Option
The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. The following table presents information for residential mortgage loans, which are accounted for under the FVO and were initially measured at fair value.
 
March 31, 2020
 
December 31, 2019
 
(In millions)
Unpaid principal balance
$
196

 
$
209

Difference between estimated fair value and unpaid principal balance
(16
)
 
(21
)
Carrying value at estimated fair value
$
180

 
$
188

Loans in nonaccrual status
$
43

 
$
47

Loans more than 90 days past due
$
18

 
$
18

Loans in nonaccrual status or more than 90 days past due, or both — difference between aggregate estimated fair value and unpaid principal balance
$
(16
)
 
$
(19
)
Fair Value of Financial Instruments Carried at Other Than Fair Value
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:
 
March 31, 2020
 
 
 
Fair Value Hierarchy
 
 
 
Carrying
Value
 
Level 1
 
Level 2
 
Level 3
 
Total
Estimated
Fair Value
 
(In millions)
Assets
 
 
 
 
 
 
 
 
 
Mortgage loans
$
65,861

 
$
—

 
$
—

 
$
67,699

 
$
67,699

Policy loans
$
6,103

 
$
—

 
$
266

 
$
7,331

 
$
7,597

Other invested assets
$
3,010

 
$
—

 
$
2,755

 
$
89

 
$
2,844

Premiums, reinsurance and other
receivables
$
14,087

 
$
—

 
$
435

 
$
14,621

 
$
15,056

Liabilities
 
 
 
 
 
 
 
 
 
Policyholder account balances
$
74,765

 
$
—

 
$
—

 
$
80,299

 
$
80,299

Long-term debt
$
1,621

 
$
—

 
$
1,824

 
$
—

 
$
1,824

Other liabilities
$
14,467

 
$
—

 
$
1,857

 
$
13,023

 
$
14,880

Separate account liabilities
$
54,516

 
$
—

 
$
54,516

 
$
—

 
$
54,516

 
December 31, 2019
 
 
 
Fair Value Hierarchy
 
 
 
Carrying
Value
 
Level 1
 
Level 2
 
Level 3
 
Total
Estimated
Fair Value
 
(In millions)
Assets
 
 
 
 
 
 
 
 
 
Mortgage loans
$
65,361

 
$
—

 
$
—

 
$
67,680

 
$
67,680

Policy loans
$
6,100

 
$
—

 
$
263

 
$
6,935

 
$
7,198

Other invested assets
$
2,964

 
$
—

 
$
2,708

 
$
158

 
$
2,866

Premiums, reinsurance and other
receivables
$
14,042

 
$
—

 
$
367

 
$
14,488

 
$
14,855

Liabilities
 
 
 
 
 
 
 
 
 
Policyholder account balances
$
73,693

 
$
—

 
$
—

 
$
75,885

 
$
75,885

Long-term debt
$
1,543

 
$
—

 
$
1,888

 
$
—

 
$
1,888

Other liabilities
$
12,789

 
$
—

 
$
113

 
$
12,819

 
$
12,932

Separate account liabilities
$
52,830

 
$
—

 
$
52,830

 
$
—

 
$
52,830
v3.20.1
Equity (Tables)
 3 Months Ended
Mar. 31, 2020
Equity [Abstract]  
Components of Accumulated Other Comprehensive Income (Loss)
Information regarding changes in the balances of each component of AOCI attributable to Metropolitan Life Insurance Company was as follows:
 
Three Months
Ended
March 31, 2020
 
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
$
8,876

 
$
1,620

 
$
(97
)
 
$
(374
)
 
$
10,025

OCI before reclassifications
(2,219
)
 
3,291

 
16

 
—

 
1,088

Deferred income tax benefit (expense)
494

 
(691
)
 
(5
)
 
—

 
(202
)
AOCI before reclassifications, net of income tax
7,151

 
4,220

 
(86
)
 
(374
)
 
10,911

Amounts reclassified from AOCI
33

 
439

 
—

 
9

 
481

Deferred income tax benefit (expense)
(7
)
 
(92
)
 
—

 
(2
)
 
(101
)
Amounts reclassified from AOCI, net of income tax
26

 
347

 
—

 
7

 
380

Balance, end of period
$
7,177

 
$
4,567

 
$
(86
)
 
$
(367
)
 
$
11,291

 
Three Months
Ended
March 31, 2019
 
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
$
2,515

 
$
1,382

 
$
(74
)
 
$
(261
)
 
$
3,562

OCI before reclassifications
3,604

 
94

 
(3
)
 
(1
)
 
3,694

Deferred income tax benefit (expense)
(754
)
 
(21
)
 
3

 
—

 
(772
)
AOCI before reclassifications, net of income tax
5,365

 
1,455

 
(74
)
 
(262
)
 
6,484

Amounts reclassified from AOCI
58

 
(45
)
 
—

 
6

 
19

Deferred income tax benefit (expense)
(12
)
 
10

 
—

 
(1
)
 
(3
)
Amounts reclassified from AOCI, net of income tax
46

 
(35
)
 
—

 
5

 
16

Cumulative effects of changes in accounting principles
(1
)
 
22

 
—

 
—

 
21

Deferred income tax benefit (expense), cumulative effects of changes in accounting principles
—

 
(4
)
 
—

 
—

 
(4
)
Cumulative effects of changes in accounting principles, net of income tax (2)
(1
)
 
18

 
—

 
—

 
17

Balance, end of period
$
5,410

 
$
1,438

 
$
(74
)
 
$
(257
)
 
$
6,517

__________________
(1)
See Note 5 for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI, and the policyholder dividend obligation.
(2)
See Note 1 of the Notes to the Consolidated Financial Statements included in the 2019 Annual Report for further information on adoption of new accounting pronouncements.
Reclassification out of Accumulated Other Comprehensive Income (Loss)
Information regarding amounts reclassified out of each component of AOCI was as follows:
 
 
Three Months
Ended
March 31,
 
 
 
 
2020
 
2019
 
 
AOCI Components
 
Amounts Reclassified from AOCI
 
Consolidated Statements of
Operations and
Comprehensive Income (Loss)
Locations
 
 
(In millions)
 
 
Net unrealized investment gains (losses):
 
 
 
 
 
 
Net unrealized investment gains (losses)
 
$
(26
)
 
$
(41
)
 
Net investment gains (losses)
Net unrealized investment gains (losses)
 
(6
)
 
—

 
Net investment income
Net unrealized investment gains (losses)
 
(1
)
 
(17
)
 
Net derivative gains (losses)
Net unrealized investment gains (losses), before income tax
 
(33
)
 
(58
)
 
 
Income tax (expense) benefit
 
7

 
12

 
 
Net unrealized investment gains (losses), net of income tax
 
(26
)
 
(46
)
 
 
Unrealized gains (losses) on derivatives - cash flow hedges:
 
 
 
 
 
 
Interest rate derivatives
 
6

 
5

 
Net investment income
Interest rate derivatives
 
6

 
(6
)
 
Net investment gains (losses)
Foreign currency exchange rate derivatives
 
—

 
(1
)
 
Net investment income
Foreign currency exchange rate derivatives
 
(451
)
 
47

 
Net investment gains (losses)
Gains (losses) on cash flow hedges, before income tax
 
(439
)
 
45

 
 
Income tax (expense) benefit
 
92

 
(10
)
 
 
Gains (losses) on cash flow hedges, net of income tax
 
(347
)
 
35

 
 
Defined benefit plans adjustment: (1)
 
 
 
 
 
 
Amortization of net actuarial gains (losses)
 
(10
)
 
(7
)
 
 
Amortization of prior service (costs) credit
 
1

 
1

 
 
Amortization of defined benefit plan items, before income tax
 
(9
)
 
(6
)
 
 
Income tax (expense) benefit
 
2

 
1

 
 
Amortization of defined benefit plan items, net of income tax
 
(7
)
 
(5
)
 
 
Total reclassifications, net of income tax
 
$
(380
)
 
$
(16
)
 
 
__________________
(1)
These AOCI components are included in the computation of net periodic benefit costs. See Note 10.
v3.20.1
Other Revenues and Other Expenses (Tables)
 3 Months Ended
Mar. 31, 2020
Other Income and Expenses [Abstract]  
Disaggregation of Revenue
Information on other revenues, which primarily includes fees related to service contracts from customers, was as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
Prepaid legal plans
 
$
95

 
$
81

Recordkeeping and administrative services (1)
 
49

 
50

Administrative services-only contracts
 
56

 
53

Other revenue from service contracts from customers
 
9

 
19

Total revenues from service contracts from customers
 
209

 
203

Other
 
164

 
198

Total other revenues
 
$
373

 
$
401

__________________
(1)
Related to products and businesses no longer actively marketed by the Company.
Other Expenses
Information on other expenses was as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
General and administrative expenses (1)
 
$
595

 
$
570

Pension, postretirement and postemployment benefit costs
 
9

 
26

Premium taxes, other taxes, and licenses & fees
 
97

 
77

Commissions and other variable expenses
 
472

 
441

Capitalization of DAC
 
(10
)
 
(12
)
Amortization of DAC and VOBA
 
103

 
19

Interest expense on debt
 
25

 
27

Total other expenses
 
$
1,291

 
$
1,148


__________________
(1)
Includes $28 million and ($58) million for the three months ended March 31, 2020 and 2019, respectively, for the net change in cash surrender value of investments in certain life insurance policies, net of premiums paid.
v3.20.1
Employee Benefit Plans (Tables)
 3 Months Ended
Mar. 31, 2020
Retirement Benefits [Abstract]  
Net periodic benefit costs
The components of net periodic benefit costs, reported in other expenses, were as follows for pension benefits:
 
Three Months
Ended
March 31,
 
2020
 
2019
 
(In millions)
Service costs
$
5

 
$
4

Interest costs
10

 
12

Amortization of net actuarial (gains) losses
10

 
7

Amortization of prior service costs (credit)
(1
)
 
(1
)
Allocated to affiliates
(5
)
 
(6
)
Net periodic benefit costs (credit)
$
19

 
$
16
v3.20.1
Related Party Transactions (Tables)
 3 Months Ended
Mar. 31, 2020
Related Party Transactions [Abstract]  
Effects of reinsurance
Information regarding the significant effects of affiliated reinsurance on the interim condensed consolidated statements of operations and comprehensive income (loss) was as follows:
 
 
Three Months
Ended
March 31,
 
 
2020
 
2019
 
 
(In millions)
Premiums
 
 
 
 
Reinsurance assumed
 
$
2

 
$
3

Reinsurance ceded
 
(29
)
 
(32
)
Net premiums
 
$
(27
)
 
$
(29
)
Universal life and investment-type product policy fees
 
 
 
 
Reinsurance assumed
 
$
—

 
$
—

Reinsurance ceded
 
1

 
(6
)
Net universal life and investment-type product policy fees
 
$
1

 
$
(6
)
Other revenues
 
 
 
 
Reinsurance assumed
 
$
(9
)
 
$
(4
)
Reinsurance ceded
 
132

 
127

Net other revenues
 
$
123

 
$
123

Policyholder benefits and claims
 
 
 
 
Reinsurance assumed
 
$
1

 
$
1

Reinsurance ceded
 
(35
)
 
(33
)
Net policyholder benefits and claims
 
$
(34
)
 
$
(32
)
Interest credited to policyholder account balances
 
 
 
 
Reinsurance assumed
 
$
7

 
$
7

Reinsurance ceded
 
(3
)
 
(3
)
Net interest credited to policyholder account balances
 
$
4

 
$
4

Other expenses
 
 
 
 
Reinsurance assumed
 
$
—

 
$
—

Reinsurance ceded
 
135

 
125

Net other expenses
 
$
135

 
$
125


Information regarding the significant effects of affiliated reinsurance on the interim condensed consolidated balance sheets was as follows at:
 
March 31, 2020
 
December 31, 2019
 
Assumed
 
Ceded
 
Assumed
 
Ceded
 
(In millions)
Assets
 
 
 
 
 
 
 
Premiums, reinsurance and other receivables
$
—

 
$
12,548

 
$
—

 
$
12,584

Deferred policy acquisition costs and value of business acquired
—

 
(163
)
 
—

 
(160
)
Total assets
$
—

 
$
12,385

 
$
—

 
$
12,424

Liabilities
 
 
 
 
 
 
 
Future policy benefits
$
54

 
$
(11
)
 
$
55

 
$
(6
)
Policyholder account balances
128

 
—

 
131

 
—

Other policy-related balances
1

 
8

 
1

 
9

Other liabilities
835

 
12,557

 
824

 
12,695

Total liabilities
$
1,018

 
$
12,554

 
$
1,011

 
$
12,698
v3.20.1
Business, Basis of Presentation and Summary of Significant Accounting Policies (New Accounting Pronouncements) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Jan. 01, 2020
Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Retained Earnings (Accumulated Deficit) $ 12,986   $ 9,943
Accounting Standards Update 2016-13      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Retained Earnings (Accumulated Deficit)   $ 113  
v3.20.1
Business, Basis of Presentation and Summary of Significant Accounting Policies (Narrative) (Details)
 3 Months Ended
Mar. 31, 2020
Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of segments 2
v3.20.1
Segment Information (Earnings) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Revenues    
Premiums $ 5,248 $ 5,052
Universal life and investment-type product policy fees 528 503
Net investment income 2,644 2,645
Other revenues 373 401
Net investment gains (losses) (182) (54)
Net derivative gains (losses) 3,555 (310)
Total revenues 12,166 8,237
Expenses    
Policyholder benefits and claims and policyholder dividends 5,927 5,919
Interest credited to policyholder account balances 611 662
Capitalization of DAC (10) (12)
Amortization of DAC and VOBA 103 19
Interest expense on debt 25 27
Other Expenses 1,173 1,114
Total expenses 7,829 7,729
Provision for income tax expense (benefit) 790 0
Net income (loss) 3,547 508
Operating Segments    
Revenues    
Premiums 5,248 5,052
Universal life and investment-type product policy fees 506 481
Net investment income 2,730 2,720
Other revenues 373 401
Net investment gains (losses) 0 0
Net derivative gains (losses) 0 0
Total revenues 8,857 8,654
Expenses    
Policyholder benefits and claims and policyholder dividends 5,958 5,836
Interest credited to policyholder account balances 615 665
Capitalization of DAC (10) (12)
Amortization of DAC and VOBA 93 61
Interest expense on debt 25 27
Other Expenses 1,172 1,114
Total expenses 7,853 7,691
Provision for income tax expense (benefit) 90 96
Adjusted earnings 914 867
Operating Segments | U.S.    
Revenues    
Premiums 4,510 4,302
Universal life and investment-type product policy fees 262 264
Net investment income 1,634 1,638
Other revenues 214 204
Net investment gains (losses) 0 0
Net derivative gains (losses) 0 0
Total revenues 6,620 6,408
Expenses    
Policyholder benefits and claims and policyholder dividends 4,561 4,438
Interest credited to policyholder account balances 442 487
Capitalization of DAC (14) (15)
Amortization of DAC and VOBA 14 14
Interest expense on debt 2 3
Other Expenses 794 723
Total expenses 5,799 5,650
Provision for income tax expense (benefit) 175 157
Adjusted earnings 646 601
Operating Segments | MetLife Holdings    
Revenues    
Premiums 738 750
Universal life and investment-type product policy fees 244 217
Net investment income 1,166 1,139
Other revenues 26 63
Net investment gains (losses) 0 0
Net derivative gains (losses) 0 0
Total revenues 2,174 2,169
Expenses    
Policyholder benefits and claims and policyholder dividends 1,397 1,398
Interest credited to policyholder account balances 173 178
Capitalization of DAC 4 3
Amortization of DAC and VOBA 79 47
Interest expense on debt 2 2
Other Expenses 200 200
Total expenses 1,855 1,828
Provision for income tax expense (benefit) 62 67
Adjusted earnings 257 274
Operating Segments | Corporate & Other    
Revenues    
Premiums 0 0
Universal life and investment-type product policy fees 0 0
Net investment income (70) (57)
Other revenues 133 134
Net investment gains (losses) 0 0
Net derivative gains (losses) 0 0
Total revenues 63 77
Expenses    
Policyholder benefits and claims and policyholder dividends 0 0
Interest credited to policyholder account balances 0 0
Capitalization of DAC 0 0
Amortization of DAC and VOBA 0 0
Interest expense on debt 21 22
Other Expenses 178 191
Total expenses 199 213
Provision for income tax expense (benefit) (147) (128)
Adjusted earnings 11 (8)
Significant Reconciling Items    
Revenues    
Premiums 0 0
Universal life and investment-type product policy fees 22 22
Net investment income (86) (75)
Other revenues 0 0
Net investment gains (losses) (182) (54)
Net derivative gains (losses) 3,555 (310)
Total revenues 3,309 (417)
Expenses    
Policyholder benefits and claims and policyholder dividends (31) 83
Interest credited to policyholder account balances (4) (3)
Capitalization of DAC 0 0
Amortization of DAC and VOBA 10 (42)
Interest expense on debt 0 0
Other Expenses 1 0
Total expenses (24) 38
Provision for income tax expense (benefit) $ 700 $ (96)
v3.20.1
Segment Information (Total Assets) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Segment Reporting Information [Line Items]    
Total assets $ 443,114 $ 430,817
U.S.    
Segment Reporting Information [Line Items]    
Total assets 252,519 246,319
MetLife Holdings    
Segment Reporting Information [Line Items]    
Total assets 153,301 156,327
Corporate & Other    
Segment Reporting Information [Line Items]    
Total assets $ 37,294 $ 28,171
v3.20.1
Segment Information (Narrative) (Details)
 3 Months Ended
Mar. 31, 2020
Segment
Segment Reporting [Abstract]  
Number of segments 2
v3.20.1
Insurance (Guarantees Related to Annuity Contracts) (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Variable Annuity Guarantees: | Guaranteed Death Benefits    
Net Amount at Risk by Product and Guarantee [Line Items]    
Total account value $ 42,277 $ 49,207
Separate account value (1) 32,768 39,679
Net amount at risk $ 2,972 $ 1,195
Average attained age of contractholders 68 years 68 years
Variable Annuity Guarantees: | Guaranteed Annuitization Benefits    
Net Amount at Risk by Product and Guarantee [Line Items]    
Total account value $ 18,200 $ 21,472
Separate account value (1) 17,376 20,666
Net amount at risk $ 1,035 $ 524
Average attained age of contractholders 66 years 66 years
Other Annuity Guarantees: | Guaranteed Annuitization Benefits    
Net Amount at Risk by Product and Guarantee [Line Items]    
Total account value $ 142 $ 143
Net amount at risk $ 77 $ 80
Average attained age of contractholders 54 years 54 years
v3.20.1
Insurance (Guarantees Related to Universal and Variable Life Contracts) (Details) - Universal and Variable Life Contracts - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Secondary Guarantees    
Net Amount at Risk by Product and Guarantee [Line Items]    
Total account value (1), (2) $ 4,304 $ 4,909
Net amount at risk (6) $ 41,387 $ 41,385
Average attained age of policyholders 57 years 57 years
Paid-Up Guarantees    
Net Amount at Risk by Product and Guarantee [Line Items]    
Total account value (1), (2) $ 887 $ 899
Net amount at risk (6) $ 5,782 $ 5,884
Average attained age of policyholders 64 years 64 years
v3.20.1
Insurance (Rollforward of Unpaid Claims) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]    
Balance, beginning of period $ 13,140 $ 12,590
Less: Reinsurance recoverables 1,525 1,497
Net balance, beginning of period 11,615 11,093
Incurred related to:    
Current period 4,734 4,295
Prior periods (1) (64) 87
Total incurred 4,670 4,382
Paid related to:    
Current period (2,240) (1,931)
Prior periods (2,409) (2,201)
Total paid (4,649) (4,132)
Net balance, end of period 11,636 11,343
Add: Reinsurance recoverables 1,661 1,537
Balance, end of period (included in future policy benefits and other policy-related balances) $ 13,297 $ 12,880
v3.20.1
Closed Block (Liabilities and Assets) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Closed Block Liabilities      
Future policy benefits $ 39,214 $ 39,379  
Other policy-related balances 340 423  
Policyholder dividends payable 431 432  
Policyholder dividend obligation 1,677 2,020 $ 428
Deferred income tax liability 82 79  
Other liabilities 169 81  
Total closed block liabilities 41,913 42,414  
Assets Designated to the Closed Block      
Fixed maturity securities available-for-sale, at estimated fair value 25,332 25,977  
Mortgage loans 6,995 7,052  
Policy loans 4,478 4,489  
Real estate and real estate joint ventures 556 544  
Other invested assets 934 416  
Total investments 38,295 38,478  
Cash and cash equivalents 148 448  
Accrued investment income 427 419  
Premiums, reinsurance and other receivables 67 75  
Current income tax recoverable 90 91  
Total assets designated to the closed block 39,027 39,511  
Excess of closed block liabilities over assets designated to the closed block 2,886 2,903  
AOCI:      
Unrealized investment gains (losses), net of income tax 2,008 2,453  
Unrealized gains (losses) on derivatives, net of income tax 314 97  
Allocated to policyholder dividend obligation, net of income tax (1,325) (1,596)  
Total amounts included in AOCI 997 954  
Maximum future earnings to be recognized from closed block assets and liabilities $ 3,883 $ 3,857  
v3.20.1
Closed Block (Policyholder Dividend Obligation) (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Closed block policyholder dividend obligation    
Balance, beginning of period $ 2,020 $ 428
Change in unrealized investment and derivative gains (losses) (343) 1,592
Balance, end of period $ 1,677 $ 2,020
v3.20.1
Closed Block (Revenues and Expenses) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Revenues    
Premiums $ 367 $ 367
Net investment income 407 428
Net investment gains (losses) (19) (1)
Net derivative gains (losses) 26 3
Total revenues 781 797
Expenses    
Policyholder benefits and claims 550 539
Policyholder dividends 219 228
Other expenses 27 29
Total expenses 796 796
Revenues, net of expenses before provision for income tax expense (benefit) (15) 1
Provision for income tax expense (benefit) (3) 0
Revenues, net of expenses and provision for income tax expense (benefit) $ (12) $ 1
v3.20.1
Investments (Fixed Maturity Securities Available-For-Sale by Sector) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 159,542 $ 154,397
Amortized cost of fixed maturity securities valuation allowances (50) 0
Gross Unrealized OTTI Loss 0 (32)
Estimated Fair Value of Fixed Maturity Securities AFS 170,882 169,564
Fixed Maturity Securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized cost of fixed maturity securities valuation allowances (50)  
Gross Unrealized Gain 16,644 16,098
Gross Unrealized Temporary Loss 5,254 963
Gross Unrealized OTTI Loss   (32)
U.S. corporate    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 52,744 52,446
Amortized cost of fixed maturity securities valuation allowances (44) 0
Gross Unrealized Gain 4,839 6,236
Gross Unrealized Temporary Loss 1,704 223
Gross Unrealized OTTI Loss   0
Estimated Fair Value of Fixed Maturity Securities AFS 55,835 58,459
U.S. government and agency    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 26,491 25,568
Amortized cost of fixed maturity securities valuation allowances 0  
Gross Unrealized Gain 7,248 3,706
Gross Unrealized Temporary Loss 4 26
Gross Unrealized OTTI Loss   0
Estimated Fair Value of Fixed Maturity Securities AFS 33,735 29,248
Foreign corporate    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 28,400 28,421
Amortized cost of fixed maturity securities valuation allowances 0  
Gross Unrealized Gain 1,144 2,397
Gross Unrealized Temporary Loss 1,898 517
Gross Unrealized OTTI Loss   0
Estimated Fair Value of Fixed Maturity Securities AFS 27,646 30,301
RMBS    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 23,297 21,476
Amortized cost of fixed maturity securities valuation allowances 0  
Gross Unrealized Gain 1,285 1,324
Gross Unrealized Temporary Loss 329 59
Gross Unrealized OTTI Loss   (32)
Estimated Fair Value of Fixed Maturity Securities AFS 24,253 22,773
ABS    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 11,395 10,215
Amortized cost of fixed maturity securities valuation allowances 0  
Gross Unrealized Gain 23 47
Gross Unrealized Temporary Loss 838 61
Gross Unrealized OTTI Loss   0
Estimated Fair Value of Fixed Maturity Securities AFS 10,580 10,201
Municipals    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 6,830 6,419
Amortized cost of fixed maturity securities valuation allowances 0  
Gross Unrealized Gain 1,491 1,450
Gross Unrealized Temporary Loss 28 13
Gross Unrealized OTTI Loss   0
Estimated Fair Value of Fixed Maturity Securities AFS 8,293 7,856
CMBS    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 5,944 5,523
Amortized cost of fixed maturity securities valuation allowances 0  
Gross Unrealized Gain 105 214
Gross Unrealized Temporary Loss 276 17
Gross Unrealized OTTI Loss   0
Estimated Fair Value of Fixed Maturity Securities AFS 5,773 5,720
Foreign government    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 4,441 4,329
Amortized cost of fixed maturity securities valuation allowances (6) 0
Gross Unrealized Gain 509 724
Gross Unrealized Temporary Loss 177 47
Gross Unrealized OTTI Loss   0
Estimated Fair Value of Fixed Maturity Securities AFS $ 4,767 $ 5,006
v3.20.1
Investments (Maturities of Fixed Maturity Securities) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Available-for-sale Securities, Debt Maturities [Abstract]    
Amortized Cost, Due in one year or less $ 10,463  
Amortized Cost, Due after one year through five years 22,630  
Amortized Cost, Due after five years through ten years 27,851  
Amortized Cost, Due after ten years 57,912  
Amortized Cost, Structured Securities 40,636  
Amortized Cost, Subtotal 159,492  
Estimated Fair Value, Due in one year or less 10,466  
Estimated Fair Value, Due after one year through five years 22,191  
Estimated Fair Value, Due after five years through ten years 28,620  
Estimated Fair Value, Due after ten years 68,999  
Estimated Fair Value, Structured Securities 40,606  
Estimated Fair Value of Fixed Maturity Securities AFS $ 170,882 $ 169,564
v3.20.1
Investments Investments (Continuous Gross UFGL by FMS) Details (Details)
$ in Millions
Mar. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Debt Securities, Available-for-sale [Line Items]    
Total number of securities in an unrealized loss position less than 12 months 4,708 1,059
Total number of securities in an unrealized loss position equal or greater than 12 months 458 802
Fixed maturity securities AFS    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value $ 45,605 $ 10,377
Less than 12 months Gross Unrealized Loss 4,664 248
Equal to or Greater than 12 Months Estimated Fair Value 3,770 9,562
Equal to or Greater than 12 Months Gross Unrealized Loss 584 683
U.S. corporate    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 14,778 2,036
Less than 12 months Gross Unrealized Loss 1,569 77
Equal to or Greater than 12 Months Estimated Fair Value 357 1,304
Equal to or Greater than 12 Months Gross Unrealized Loss 130 146
U.S. government and agency    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 419 1,552
Less than 12 months Gross Unrealized Loss 4 26
Equal to or Greater than 12 Months Estimated Fair Value 0 29
Equal to or Greater than 12 Months Gross Unrealized Loss 0 0
Foreign corporate    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 13,684 1,368
Less than 12 months Gross Unrealized Loss 1,776 93
Equal to or Greater than 12 Months Estimated Fair Value 654 3,499
Equal to or Greater than 12 Months Gross Unrealized Loss 123 424
RMBS    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 4,718 1,479
Less than 12 months Gross Unrealized Loss 314 15
Equal to or Greater than 12 Months Estimated Fair Value 197 524
Equal to or Greater than 12 Months Gross Unrealized Loss 16 12
ABS    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 7,248 2,428
Less than 12 months Gross Unrealized Loss 591 13
Equal to or Greater than 12 Months Estimated Fair Value 2,251 3,778
Equal to or Greater than 12 Months Gross Unrealized Loss 247 48
Municipals    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 621 508
Less than 12 months Gross Unrealized Loss 28 13
Equal to or Greater than 12 Months Estimated Fair Value 1 1
Equal to or Greater than 12 Months Gross Unrealized Loss 0 0
CMBS    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 2,824 857
Less than 12 months Gross Unrealized Loss 250 5
Equal to or Greater than 12 Months Estimated Fair Value 156 212
Equal to or Greater than 12 Months Gross Unrealized Loss 26 12
Foreign government    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 1,313 149
Less than 12 months Gross Unrealized Loss 132 6
Equal to or Greater than 12 Months Estimated Fair Value 154 215
Equal to or Greater than 12 Months Gross Unrealized Loss 42 41
Investment Grade    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 37,895 9,288
Less than 12 months Gross Unrealized Loss 3,403 190
Equal to or Greater than 12 Months Estimated Fair Value 3,470 8,233
Equal to or Greater than 12 Months Gross Unrealized Loss 448 530
Below Investment Grade    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months Estimated Fair Value 7,710 1,089
Less than 12 months Gross Unrealized Loss 1,261 58
Equal to or Greater than 12 Months Estimated Fair Value 300 1,329
Equal to or Greater than 12 Months Gross Unrealized Loss $ 136 $ 153
v3.20.1
Investments Investments (ACL for Fixed Maturity Securities AFS by Sector) Details (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items]    
Amortized cost of fixed maturity securities valuation allowances $ (50) $ 0
Debt Securities, Available-for-sale, Allowance for Credit Loss, Not Previously Recorded (50)  
U.S. corporate    
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items]    
Amortized cost of fixed maturity securities valuation allowances (44) 0
Debt Securities, Available-for-sale, Allowance for Credit Loss, Not Previously Recorded (44)  
Foreign government    
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items]    
Amortized cost of fixed maturity securities valuation allowances (6) $ 0
Debt Securities, Available-for-sale, Allowance for Credit Loss, Not Previously Recorded $ (6)  
v3.20.1
Investments (Mortgage Loans by Portfolio Segment) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Mortgage Loans, Gross $ 66,278 $ 65,591
Allowance for Credit Loss (417) (289)
Subtotal mortgage loans, net 65,861 65,302
Mortgage Loans on Real Estate, Commercial and Consumer, Net 66,041 65,549
Total mortgage loans held-for-investment, net 66,041 65,490
Mortgage loans held-for-sale $ 0 $ 59
Percentage Of mortgage total recorded investment To Mortgage Loans On Real Estate Commercial and Consumer Net 100.30% 100.00%
Percentage of Allowance for Credit Losses to Mortgage Loans On Real Estate Commercial And Consumer Net (0.60%) (0.40%)
Percentage Of Mortgage Loans Held For Investment Net To Mortgage Loans On Real Estate Commercial And Consumer Net 99.70% 99.60%
Percentage Of Loans And Leases Receivable Consumer Other To Mortgage Loans On Real Estate Commercial And Consumer Net 0.30% 0.30%
Percentage of total mortgage loans held-for-investments 100.00% 99.90%
Percentage of mortgage loans held-for-sale 0.00% 0.10%
Percentage Of Mortgage Loans On Real Estate To Mortgage Loans On Real Estate Commercial And Consumer Net 100.00% 100.00%
Residential mortgage loans - FVO    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Mortgage Loans on Real Estate, Commercial and Consumer, Net $ 180 $ 188
Agricultural Mortgage Loans    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Mortgage Loans, Gross $ 15,497 $ 15,705
Percentage Of Mortgage Loans, Gross 23.40% 23.90%
Commercial Mortgage Loans    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Mortgage Loans, Gross $ 37,845 $ 37,311
Percentage Of Mortgage Loans, Gross 57.30% 56.90%
Residential Mortgage Loans    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Mortgage Loans, Gross $ 12,936 $ 12,575
Percentage Of Mortgage Loans, Gross 19.60% 19.20%
v3.20.1
Investments (ACL Rollforward by Portfolio Segment) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Balance, beginning of period $ 289 $ 291
Adoption of new credit loss guidance 99 0
Provision (release) 32 6
Charge-offs, net of recoveries (3) (2)
Balance, end of period 417 295
Commercial Mortgage Loans    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Balance, beginning of period 186 190
Adoption of new credit loss guidance (87) 0
Provision (release) 14 4
Charge-offs, net of recoveries 0 0
Balance, end of period 113 194
Residential Mortgage Loans    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Balance, beginning of period 54 57
Adoption of new credit loss guidance 154 0
Provision (release) 23 1
Charge-offs, net of recoveries (3) (2)
Balance, end of period 228 56
Agricultural Mortgage Loans    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Balance, beginning of period 49 44
Adoption of new credit loss guidance 32 0
Provision (release) (5) 1
Charge-offs, net of recoveries 0 0
Balance, end of period $ 76 $ 45
v3.20.1
Investments (Credit Quality of Commercial Mortgage Loans) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Mortgage Loans, Gross $ 66,278 $ 65,591
Commercial Mortgage Loans    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year 1,191  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 5,765  
Financing Receivable, Originated Two Years before Latest Fiscal Year 6,050  
Financing Receivable, Originated Three Years before Latest Fiscal Year 5,134  
Financing Receivable, Originated Four Years before Latest Fiscal Year 4,995  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 11,824  
Financing Receivable, Revolving 2,886  
Mortgage Loans, Gross $ 37,845 $ 37,311
Loans Receivable Commercial Mortgage Percentage 100.00%  
Commercial Mortgage Loans | Greater than 1.20x    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 1,185  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 5,496  
Financing Receivable, Originated Two Years before Latest Fiscal Year 5,811  
Financing Receivable, Originated Three Years before Latest Fiscal Year 4,688  
Financing Receivable, Originated Four Years before Latest Fiscal Year 4,765  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 10,979  
Financing Receivable, Revolving 2,886  
Mortgage Loans, Gross $ 35,810  
Loans Receivable Commercial Mortgage Percentage 94.60%  
Commercial Mortgage Loans | 1.00x - 1.20x    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 0  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 0  
Financing Receivable, Originated Two Years before Latest Fiscal Year 38  
Financing Receivable, Originated Three Years before Latest Fiscal Year 77  
Financing Receivable, Originated Four Years before Latest Fiscal Year 192  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 749  
Financing Receivable, Revolving 0  
Mortgage Loans, Gross $ 1,056  
Loans Receivable Commercial Mortgage Percentage 2.80%  
Commercial Mortgage Loans | Less than 1.00x    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 6  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 269  
Financing Receivable, Originated Two Years before Latest Fiscal Year 201  
Financing Receivable, Originated Three Years before Latest Fiscal Year 369  
Financing Receivable, Originated Four Years before Latest Fiscal Year 38  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 96  
Financing Receivable, Revolving 0  
Mortgage Loans, Gross $ 979  
Loans Receivable Commercial Mortgage Percentage 2.60%  
Commercial Mortgage Loans | Less than 65%    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 819  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 4,016  
Financing Receivable, Originated Two Years before Latest Fiscal Year 4,837  
Financing Receivable, Originated Three Years before Latest Fiscal Year 3,557  
Financing Receivable, Originated Four Years before Latest Fiscal Year 4,073  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 10,344  
Financing Receivable, Revolving 2,886  
Mortgage Loans, Gross $ 30,532  
Loans Receivable Commercial Mortgage Percentage 80.70%  
Commercial Mortgage Loans | 65% to 75%    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 372  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 1,749  
Financing Receivable, Originated Two Years before Latest Fiscal Year 1,213  
Financing Receivable, Originated Three Years before Latest Fiscal Year 888  
Financing Receivable, Originated Four Years before Latest Fiscal Year 791  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 987  
Financing Receivable, Revolving 0  
Mortgage Loans, Gross $ 6,000  
Loans Receivable Commercial Mortgage Percentage 15.80%  
Commercial Mortgage Loans | 76% to 80%    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 0  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 0  
Financing Receivable, Originated Two Years before Latest Fiscal Year 0  
Financing Receivable, Originated Three Years before Latest Fiscal Year 288  
Financing Receivable, Originated Four Years before Latest Fiscal Year 103  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 326  
Financing Receivable, Revolving 0  
Mortgage Loans, Gross $ 717  
Loans Receivable Commercial Mortgage Percentage 1.90%  
Commercial Mortgage Loans | Greater than 80%    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 0  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 0  
Financing Receivable, Originated Two Years before Latest Fiscal Year 0  
Financing Receivable, Originated Three Years before Latest Fiscal Year 401  
Financing Receivable, Originated Four Years before Latest Fiscal Year 28  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 167  
Financing Receivable, Revolving 0  
Mortgage Loans, Gross $ 596  
Loans Receivable Commercial Mortgage Percentage 1.60%  
v3.20.1
Investments (Credit Quality of Agricultural and Residential Mortgage Loans) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Mortgage Loans, Gross $ 66,278 $ 65,591
Mortgage Loans in Process of Foreclosure, Amount 119 117
Residential Mortgage Loans    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year 160  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 2,158  
Financing Receivable, Originated Two Years before Latest Fiscal Year 1,326  
Financing Receivable, Originated Three Years before Latest Fiscal Year 404  
Financing Receivable, Originated Four Years before Latest Fiscal Year 171  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 8,717  
Financing Receivable, Revolving 0  
Mortgage Loans, Gross $ 12,936 12,575
Loans Receivable Residential Mortgage Percentage 100.00%  
Residential Mortgage Loans | Performing    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 160  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 2,155  
Financing Receivable, Originated Two Years before Latest Fiscal Year 1,321  
Financing Receivable, Originated Three Years before Latest Fiscal Year 404  
Financing Receivable, Originated Four Years before Latest Fiscal Year 170  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 8,355  
Financing Receivable, Revolving 0  
Mortgage Loans, Gross $ 12,565  
Loans Receivable Residential Mortgage Percentage 97.10%  
Residential Mortgage Loans | Nonperforming    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 0  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 3  
Financing Receivable, Originated Two Years before Latest Fiscal Year 5  
Financing Receivable, Originated Three Years before Latest Fiscal Year 0  
Financing Receivable, Originated Four Years before Latest Fiscal Year 1  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 362  
Financing Receivable, Revolving 0  
Mortgage Loans, Gross $ 371  
Loans Receivable Residential Mortgage Percentage 2.90%  
Agricultural Mortgage Loans    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 265  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 2,355  
Financing Receivable, Originated Two Years before Latest Fiscal Year 2,792  
Financing Receivable, Originated Three Years before Latest Fiscal Year 1,133  
Financing Receivable, Originated Four Years before Latest Fiscal Year 2,781  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 5,311  
Financing Receivable, Revolving 860  
Mortgage Loans, Gross $ 15,497 $ 15,705
Loans Receivable Agricultural Mortgage Percentage 100.00%  
Agricultural Mortgage Loans | Less than 65%    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 257  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 2,173  
Financing Receivable, Originated Two Years before Latest Fiscal Year 2,723  
Financing Receivable, Originated Three Years before Latest Fiscal Year 1,056  
Financing Receivable, Originated Four Years before Latest Fiscal Year 2,754  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 5,026  
Financing Receivable, Revolving 847  
Mortgage Loans, Gross $ 14,836  
Loans Receivable Agricultural Mortgage Percentage 95.70%  
Agricultural Mortgage Loans | 65% to 75%    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 8  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 182  
Financing Receivable, Originated Two Years before Latest Fiscal Year 61  
Financing Receivable, Originated Three Years before Latest Fiscal Year 77  
Financing Receivable, Originated Four Years before Latest Fiscal Year 27  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 237  
Financing Receivable, Revolving 11  
Mortgage Loans, Gross $ 603  
Loans Receivable Agricultural Mortgage Percentage 3.90%  
Agricultural Mortgage Loans | 76% to 80%    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 0  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 0  
Financing Receivable, Originated Two Years before Latest Fiscal Year 8  
Financing Receivable, Originated Three Years before Latest Fiscal Year 0  
Financing Receivable, Originated Four Years before Latest Fiscal Year 0  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 6  
Financing Receivable, Revolving 2  
Mortgage Loans, Gross $ 16  
Loans Receivable Agricultural Mortgage Percentage 0.10%  
Agricultural Mortgage Loans | Greater than 80%    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Originated in Current Fiscal Year $ 0  
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year 0  
Financing Receivable, Originated Two Years before Latest Fiscal Year 0  
Financing Receivable, Originated Three Years before Latest Fiscal Year 0  
Financing Receivable, Originated Four Years before Latest Fiscal Year 0  
Financing Receivable, Originated Five or More Years before Latest Fiscal Year 42  
Financing Receivable, Revolving 0  
Mortgage Loans, Gross $ 42  
Loans Receivable Agricultural Mortgage Percentage 0.30%  
v3.20.1
Investments (Past Due and Interest Accrual Status of Mortgage Loans) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Past Due $ 638 $ 501  
Greater than 90 Days Past Due and Still Accruing Interest 121 2  
Financing Receivable, Nonaccrual 699 681  
Agricultural Mortgage Loans      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Past Due 267 124  
Greater than 90 Days Past Due and Still Accruing Interest 121 2  
Financing Receivable, Nonaccrual 161 137 $ 105
Commercial Mortgage Loans      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Past Due 0 0  
Greater than 90 Days Past Due and Still Accruing Interest 0 0  
Financing Receivable, Nonaccrual 167 167 167
Residential Mortgage Loans      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Past Due 371 377  
Greater than 90 Days Past Due and Still Accruing Interest 0 0  
Financing Receivable, Nonaccrual $ 371 $ 377 $ 402
v3.20.1
Investments (Real Estate and Real Estate Joint Ventures) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Real Estate [Line Items]      
Leased real estate investments, Carrying Value $ 1,602   $ 1,586
Other real estate investments, Carrying Value 418   419
Real estate joint ventures, Carrying Value 4,839   4,654
Real Estate Investments, Net 6,859   $ 6,659
Leased real estate investments      
Real Estate [Line Items]      
Operating Lease, Lease Income 46 $ 41  
Other real estate investments      
Real Estate [Line Items]      
Operating Lease, Lease Income 34 30  
Real estate joint ventures      
Real Estate [Line Items]      
Income (Loss) from Equity Method Investments 7 (5)  
Real estate and real estate joint ventures      
Real Estate [Line Items]      
Gross Investment Income, Operating $ 87 $ 66  
v3.20.1
Investments (Net Unrealized Investment Gains Losses) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Components of net unrealized investment gains (losses) included in accumulated other comprehensive loss    
Fixed maturity securities AFS $ 11,406 $ 15,145
Fixed maturity securities AFS with noncredit OTTI losses included in AOCI 0 32
Total fixed maturity securities AFS 11,406 15,177
Derivatives 5,773 2,043
Other 346 210
Subtotal 17,525 17,430
Future policy benefits (55) (1,121)
DAC, VOBA and DSI (1,011) (1,051)
Policyholder dividend obligation (1,677) (2,020)
Subtotal (2,743) (4,192)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI 0 (7)
Deferred income tax benefit (expense) (3,038) (2,735)
Net unrealized investment gains (losses) $ 11,744 $ 10,496
v3.20.1
Investments (Changes in Net Unrealized Investment Gains Losses) (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2020
USD ($)
Changes In Net Unrealized Investment Gains Losses Included In Accumulated Other Comprehensive Loss [Abstract]  
Balance, beginning of period $ 10,496
Fixed maturity securities AFS on which noncredit OTTI losses have been recognized (32)
Unrealized investment gains (losses) during the period 127
Unrealized investment gains (losses) relating to:  
Future policy benefits 1,066
DAC, VOBA and DSI 40
Policyholder dividend obligation 343
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI 7
Deferred income tax benefit (expense) (303)
Balance, end of period 11,744
Change in net unrealized investment gains (losses) $ 1,248
v3.20.1
Investments (Securities Lending and Repurchase Agreements) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties $ 14,743 $ 12,791
Reinvestment portfolio - estimated fair value 14,610 12,847
Security collateral on deposit from counterparties 21 0
Estimated fair value    
Securities Financing Transaction [Line Items]    
Securities loaned 14,338 12,455
Repurchase Agreements    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 2,700 2,310
Reinvestment portfolio - estimated fair value 2,676 2,320
Repurchase Agreements | Estimated fair value    
Securities Financing Transaction [Line Items]    
Securities Sold under Agreements to Repurchase $ 2,746 $ 2,333
v3.20.1
Investments (Securities Lending and Repurchase Agreements Remaining Tenor) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties $ 14,743 $ 12,791
U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 14,743 12,791
Open (1) | U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 3,335 2,260
1 Month or Less | U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 5,926 5,040
Over 1 to 6 Months | U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 5,482 5,491
Maturity 180 to 360 Days [Member] [Domain] | U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 0 0
Repurchase Agreements    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 2,700 2,310
Repurchase Agreements | U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 2,700 2,310
Repurchase Agreements | Open (1) | U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 0 0
Repurchase Agreements | 1 Month or Less | U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 2,700 2,310
Repurchase Agreements | Over 1 to 6 Months | U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties 0 0
Repurchase Agreements | Maturity 180 to 360 Days [Member] [Domain] | U.S. government and agency    
Securities Financing Transaction [Line Items]    
Cash collateral on deposit from counterparties $ 0 $ 0
v3.20.1
Investments (Invested Assets on Deposit, Held In Trust and Pledged as Collateral) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]    
Invested assets on deposit (regulatory deposits) $ 111 $ 62
Invested assets pledged as collateral (1) 23,158 20,659
Total invested assets on deposit and pledged as collateral $ 23,269 $ 20,721
v3.20.1
Investments (Consolidated Variable Interest Entities) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Variable Interest Entity [Line Items]    
Assets $ 443,114 $ 430,817
Liabilities 406,191 398,205
Consolidated Entities | Variable Interest Entity, Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 1,719 1,693
Liabilities 5 5
Real estate joint ventures | Variable Interest Entity, Primary Beneficiary | Parent Company    
Variable Interest Entity [Line Items]    
Assets 1,300 1,200
Real estate joint ventures | Variable Interest Entity, Primary Beneficiary | Affiliated Entity    
Variable Interest Entity [Line Items]    
Assets 133 129
Real estate joint ventures | Consolidated Entities | Variable Interest Entity, Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 1,410 1,378
Liabilities 0 0
Mortgage loans | Variable Interest Entity, Primary Beneficiary | Parent Company    
Variable Interest Entity [Line Items]    
Assets 166 172
Mortgage loans | Variable Interest Entity, Primary Beneficiary | Affiliated Entity    
Variable Interest Entity [Line Items]    
Assets 38 39
Mortgage loans | Consolidated Entities | Variable Interest Entity, Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 204 211
Liabilities 0 0
Renewable energy partnership | Consolidated Entities | Variable Interest Entity, Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 95 94
Liabilities 0 0
Other | Consolidated Entities | Variable Interest Entity, Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 10 10
Liabilities $ 5 $ 5
v3.20.1
Investments (Unconsolidated Variable Interest Entities) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Variable Interest Entity [Line Items]    
Assets $ 443,114 $ 430,817
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount 49,551 47,345
Tax Credits Guaranteed By Third Parties Amount That Reduces Maximum Exposure To Loss Related To Other Invested Assets 7 6
Variable Interest Entity, Not Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 46,411 44,257
Variable Interest Entity, Not Primary Beneficiary | Real estate joint ventures    
Variable Interest Entity [Line Items]    
Assets 11 25
Other invested assets    
Variable Interest Entity [Line Items]    
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount 1,608 1,677
Other limited partnership interests    
Variable Interest Entity [Line Items]    
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount 7,766 7,423
Real estate joint ventures    
Variable Interest Entity [Line Items]    
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount 14 28
Structured securities (RMBS, CMBS, and ABS)    
Variable Interest Entity [Line Items]    
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount 39,108 37,119
Structured securities (RMBS, CMBS, and ABS) | Variable Interest Entity, Not Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 39,108 37,119
U.S. and foreign corporate    
Variable Interest Entity [Line Items]    
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount 1,055 1,098
U.S. and foreign corporate | Variable Interest Entity, Not Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 1,055 1,098
Other limited partnership interests | Variable Interest Entity, Not Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets 4,734 4,461
Other invested assets | Variable Interest Entity, Not Primary Beneficiary    
Variable Interest Entity [Line Items]    
Assets $ 1,503 $ 1,554
v3.20.1
Investments (Net Investment Income) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Net Investment Income [Line Items]    
Less: Investment expenses $ 225 $ 259
Net investment income 2,644 2,645
Fixed maturity securities AFS    
Net Investment Income [Line Items]    
Gross Investment Income, Operating 1,658 1,768
Equity securities    
Net Investment Income [Line Items]    
Gross Investment Income, Operating 9 9
Mortgage loans    
Net Investment Income [Line Items]    
Gross Investment Income, Operating 718 764
Policy loans    
Net Investment Income [Line Items]    
Gross Investment Income, Operating 77 76
Real estate and real estate joint ventures    
Net Investment Income [Line Items]    
Gross Investment Income, Operating 87 66
Other limited partnership interests    
Net Investment Income [Line Items]    
Gross Investment Income, Operating 215 85
Cash, cash equivalents and short-term investments    
Net Investment Income [Line Items]    
Gross Investment Income, Operating 43 43
FVO securities - FVO general account securities    
Net Investment Income [Line Items]    
Gross Investment Income, Operating (34) 23
FVO securities, Change in Unrealized Holding Gain (Loss) (34) 23
Operating joint ventures    
Net Investment Income [Line Items]    
Gross Investment Income, Operating 21 11
Other    
Net Investment Income [Line Items]    
Gross Investment Income, Operating 75 59
Securities investment    
Net Investment Income [Line Items]    
Gross Investment Income, Operating $ 2,869 $ 2,904
v3.20.1
Investments (Components of Net Investment Gains Losses) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Marketable Securities, Gain (Loss) [Abstract]    
Fixed maturity securities AFS - net gains (losses) on sales and disposals $ (4) $ (32)
Equity securities - net gains (losses) on sales and disposals 9 9
Change In Estimated Fair Value Of Equity Securities (145) 57
Other net investment gains (losses):    
Mortgage loans (45) (14)
Real estate and real estate joint ventures 1 3
Other (3) 30 (50)
Subtotal - investment portfolio gains (losses) (231) (35)
Change In Estimated Fair Value Of Other Limited Partnership Interests And Real Estate Joint Ventures 1 (16)
Non-investment portfolio gains (losses) 48 (3)
Subtotal 49 (19)
Total net investment gains (losses) (182) (54)
Changes In Estimated Fair Value Subsequent To Purchase For Equity Securities (138) 56
Fixed Maturity Securities    
Marketable Securities, Gain (Loss) [Abstract]    
Total OTTI losses recognized in earnings   (8)
Current expected credit loss recognized in earnings (77)  
Net investment gains (losses) (81) (40)
Equity securities    
Marketable Securities, Gain (Loss) [Abstract]    
Net investment gains (losses) $ (136) 66
Industrial    
Marketable Securities, Gain (Loss) [Abstract]    
Total OTTI losses recognized in earnings   (6)
RMBS    
Marketable Securities, Gain (Loss) [Abstract]    
Total OTTI losses recognized in earnings   (2)
Tax credit partnerships    
Marketable Securities, Gain (Loss) [Abstract]    
Total OTTI losses recognized in earnings   (78)
Other limited partnership interests    
Other net investment gains (losses):    
Other (3)   $ 46
v3.20.1
Investments (Sales or Disposals and Impairments of Fixed Maturity AFS) (Details) - Fixed Maturity Securities - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Debt Securities, Available-for-sale [Line Items]    
Proceeds $ 5,464 $ 10,665
Gross investment gains 61 135
Gross investment losses (65) (167)
Current expected credit loss recognized in earnings (77)  
Total OTTI losses recognized in earnings   (8)
Net investment gains (losses) $ (81) $ (40)
v3.20.1
Investments (Recurring Related Party Investments) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Related Party Transaction [Line Items]      
Other Investments $ 24,230   $ 16,979
Metlife Inc      
Related Party Transaction [Line Items]      
Other Investments 1,821   1,810
Related Party Transaction, Other Revenues from Transactions with Related Party $ 9 $ 8  
Metlife Inc | Minimum      
Related Party Transaction [Line Items]      
Debt Instrument, Interest Rate, Stated Percentage 0.82%    
Debt Instrument, Maturity Date Sep. 30, 2020    
Metlife Inc | Maximum      
Related Party Transaction [Line Items]      
Debt Instrument, Interest Rate, Stated Percentage 3.14%    
Debt Instrument, Maturity Date Oct. 31, 2029    
American Life Insurance Company      
Related Party Transaction [Line Items]      
Other Investments $ 100   100
Related Party Transaction, Other Revenues from Transactions with Related Party $ 1 1  
Debt Instrument, Interest Rate, Stated Percentage 3.17%    
Debt Instrument, Maturity Date Jun. 30, 2020    
Metropolitan Property And Casualty Insurance Company      
Related Party Transaction [Line Items]      
Other Investments $ 315   315
Related Party Transaction, Other Revenues from Transactions with Related Party 2 3  
Affiliated Entity      
Related Party Transaction [Line Items]      
Other Investments 2,236   $ 2,225
Affiliated Entity | Other      
Related Party Transaction [Line Items]      
Related Party Transaction, Other Revenues from Transactions with Related Party $ 12 $ 12  
v3.20.1
Investments (Evaluation of Available-For-Sale Securities for OTTI and Evaluating Temporarily Impaired AFS Securities - Narrative) (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2020
USD ($)
Debt Securities, Available-for-sale [Line Items]  
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss $ 5,200
Fixed maturity securities without an allowance for credit loss  
Debt Securities, Available-for-sale [Line Items]  
Change in Gross Unrealized Temporary Loss (4,300)
Twelve Months Or Greater  
Debt Securities, Available-for-sale [Line Items]  
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss $ 584
Percentage of gross unrealized loss 11.00%
Twelve Months Or Greater | Investment Grade  
Debt Securities, Available-for-sale [Line Items]  
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss $ 448
Number of Securities 371
Percentage of gross unrealized loss 77.00%
Twelve Months Or Greater | Below Investment Grade  
Debt Securities, Available-for-sale [Line Items]  
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss $ 136
Number of Securities 87
Percentage of gross unrealized loss 23.00%
v3.20.1
Investments (Mortgage Loans - Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums $ 873   $ 852  
Financing Receivable, Purchase $ 1,000 $ 1,300    
Percentage of Mortgage Loans Classified as Performing 99.00%   99.00%  
Financing Receivable, Nonaccrual $ 699   $ 681  
Commercial Mortgage Loans        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Interest Receivable 150   155  
Financing Receivable, Nonaccrual 167   167 $ 167
Financing Receivable, Nonaccrual, No Allowance 0   0  
Residential Mortgage Loans        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Interest Receivable 85   89  
Financing Receivable, Nonaccrual 371   377 402
Financing Receivable, Nonaccrual, No Allowance 0   0  
Agricultural Mortgage Loans        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Interest Receivable 148   176  
Financing Receivable, Nonaccrual 161   137 $ 105
Financing Receivable, Nonaccrual, No Allowance $ 110   $ 93  
v3.20.1
Investments (Real Estate and Real Estate Joint Ventures - Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Real Estate [Line Items]      
Real Estate Acquired Through Foreclosure $ 32   $ 34
Real Estate Investment Property, Net 667   $ 652
Real estate and real estate joint ventures      
Real Estate [Line Items]      
Depreciation $ 16 $ 15  
v3.20.1
Investments (Leveraged and Direct Financing Leases - Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Investments, All Other Investments [Abstract]    
Leveraged Leases, net of allowance for credit losses $ 867  
Direct Financing Leases, net of allowance for credit losses 183  
Leveraged and Direct Financing Leases, Allowance for credit loss $ 29  
Leveraged Leases, Net Investment in Leveraged Leases Disclosure, Investment in Leveraged Leases, Net   $ 896
Direct Financing Lease, Net Investment in Lease   $ 189
Loans and Leases Receivable, Other Information The payment periods for leveraged leases generally range from one to 12 years, but in certain circumstances can be over 12 years, while the payment periods for direct financing leases generally range from one to 17 years.  
v3.20.1
Investments (Cash Equivalents - Narrative) (Details) - USD ($)
$ in Billions
Mar. 31, 2020
Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]    
Cash equivalents $ 8.1 $ 5.5
v3.20.1
Investments (Concentrations of Credit Risk - Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]      
Fair Value, Concentration of Risk, Investments $ 0   $ 0
Securities holdings exposure in single issuer greater than stated percentage of Company's equity 10.00% 10.00%  
v3.20.1
Investments (Invested Assets on Deposits and Pledged as Collateral - Narrative) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]    
Federal Home Loan Bank Stock $ 773 $ 737
v3.20.1
Investments (Net Investment Income - Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Equity Method Investments    
Net Investment Income [Line Items]    
Gross Investment Income, Operating $ 198 $ 36
v3.20.1
Investments (Net Investment Gains Losses - Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]    
Foreign Currency Transaction Gain (Loss) - Realized $ 49 $ (1)
v3.20.1
Investments (Related Party Investment Transactions - Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]    
Related Party Transaction, Purchases from Related Party $ 69 $ 76
v3.20.1
Derivatives (Primary Risks) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets $ 15,395 $ 8,080
Estimated Fair Value Liabilities 2,802 2,102
Derivative, Notional Amount 245,146 221,575
Derivatives Designated as Hedging Instruments:    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 7,684 4,079
Estimated Fair Value Liabilities 1,795 1,291
Derivative, Notional Amount 42,866 40,977
Derivatives Designated as Hedging Instruments: | Fair Value Hedges [Member]    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 3,457 2,680
Estimated Fair Value Liabilities 10 19
Derivative, Notional Amount 4,481 3,620
Derivatives Designated as Hedging Instruments: | Fair Value Hedges [Member] | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 3,393 2,668
Estimated Fair Value Liabilities 10 2
Derivative, Notional Amount 3,231 2,370
Derivatives Designated as Hedging Instruments: | Fair Value Hedges [Member] | Foreign currency swaps    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 64 12
Estimated Fair Value Liabilities 0 17
Derivative, Notional Amount 1,250 1,250
Derivatives Designated as Hedging Instruments: | Cash Flow Hedges [Member]    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 4,227 1,399
Estimated Fair Value Liabilities 1,785 1,272
Derivative, Notional Amount 38,385 37,357
Derivatives Designated as Hedging Instruments: | Cash Flow Hedges [Member] | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 156 125
Estimated Fair Value Liabilities 27 27
Derivative, Notional Amount 4,734 3,324
Derivatives Designated as Hedging Instruments: | Cash Flow Hedges [Member] | Interest rate forwards    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 969 75
Estimated Fair Value Liabilities 0 142
Derivative, Notional Amount 6,259 6,793
Derivatives Designated as Hedging Instruments: | Cash Flow Hedges [Member] | Foreign currency swaps    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 3,102 1,199
Estimated Fair Value Liabilities 1,758 1,103
Derivative, Notional Amount 27,392 27,240
Derivatives Not Designated or Not Qualifying as Hedging Instruments:    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 7,711 4,001
Estimated Fair Value Liabilities 1,007 811
Derivative, Notional Amount 202,280 180,598
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 4,319 2,296
Estimated Fair Value Liabilities 635 133
Derivative, Notional Amount 50,562 38,820
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Interest rate floors    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 424 156
Estimated Fair Value Liabilities 0 0
Derivative, Notional Amount 12,701 12,701
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Interest rate caps    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 21 18
Estimated Fair Value Liabilities 0 5
Derivative, Notional Amount 55,006 42,622
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Interest rate futures    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 0 0
Estimated Fair Value Liabilities 0 0
Derivative, Notional Amount 724 745
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Interest rate options    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 772 427
Estimated Fair Value Liabilities 0 0
Derivative, Notional Amount 25,105 24,944
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Synthetic GICs    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 0 0
Estimated Fair Value Liabilities 0 0
Derivative, Notional Amount 17,201 16,498
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Foreign currency swaps    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 721 419
Estimated Fair Value Liabilities 85 97
Derivative, Notional Amount 6,009 6,124
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Foreign currency forwards    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 18 12
Estimated Fair Value Liabilities 14 8
Derivative, Notional Amount 846 1,001
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Credit default swaps — purchased    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 39 4
Estimated Fair Value Liabilities 1 11
Derivative, Notional Amount 863 888
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Credit default swaps — written    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 26 200
Estimated Fair Value Liabilities 76 1
Derivative, Notional Amount 8,518 8,711
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Equity futures    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 7 0
Estimated Fair Value Liabilities 1 5
Derivative, Notional Amount 561 2,039
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Equity index options    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 997 447
Estimated Fair Value Liabilities 184 417
Derivative, Notional Amount 21,783 23,104
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Equity variance swaps    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 12 17
Estimated Fair Value Liabilities 10 17
Derivative, Notional Amount 637 637
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Equity Total Return Swaps [Member]    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 175 0
Estimated Fair Value Liabilities 1 68
Derivative, Notional Amount 716 716
Derivatives Not Designated or Not Qualifying as Hedging Instruments: | Equity total return swaps    
Derivatives, Fair Value [Line Items]    
Estimated Fair Value Assets 180 5
Estimated Fair Value Liabilities 0 49
Derivative, Notional Amount $ 1,048 $ 1,048
v3.20.1
Derivatives Derivatives (Effects on the Consolidated Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($)
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Derivative Instruments, Gain (Loss) [Line Items]    
Gain (Loss) on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring, Net $ 1,000,000 $ 2,000,000
Derivative, Gain (Loss) on Derivative, Net 3,555,000,000 (310,000,000)
Net Investment Income 2,644,000,000 2,645,000,000
Gain (Loss) on Investments (182,000,000) (54,000,000)
Net other expenses 1,291,000,000 1,148,000,000
Net policyholder benefits and claims 5,679,000,000 5,662,000,000
Interest credited to policyholder account balances 611,000,000 662,000,000
Nonperformance Risk [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net 111,000,000 (11,000,000)
Cash Flow Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income 6,000,000 4,000,000
Gain (Loss) on Investments 12,000,000 (15,000,000)
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Other Comprehensive Income (Loss), before Tax 3,730,000,000 71,000,000
Fair Value Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income 1,000,000 (1,000,000)
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 5,000,000 (1,000,000)
Interest credited to policyholder account balances 0 0
Interest rate contracts | Cash Flow Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income 6,000,000 5,000,000
Gain (Loss) on Investments 6,000,000 (6,000,000)
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Other Comprehensive Income (Loss), before Tax (12,000,000) 1,000,000
Credit forwards [Member] | Cash Flow Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income 0 0
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Other Comprehensive Income (Loss), before Tax 0 0
Currency Swap [Member] | Cash Flow Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income 0 (1,000,000)
Gain (Loss) on Investments (451,000,000) 47,000,000
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Other Comprehensive Income (Loss), before Tax 451,000,000 (46,000,000)
Foreign Currency Gain (Loss) [Member] | Cash Flow Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income 0 0
Gain (Loss) on Investments 457,000,000 (56,000,000)
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Other Comprehensive Income (Loss), before Tax 0 0
Derivative [Member] | Fair Value Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income 0 0
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Derivative [Member] | Currency Swap [Member] | Fair Value Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income 69,000,000 (29,000,000)
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Derivative [Member] | Interest Rate Swap [Member] | Fair Value Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income (10,000,000) (3,000,000)
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 774,000,000 127,000,000
Interest credited to policyholder account balances 0 0
Fixed maturity securities AFS | Currency Swap [Member] | Fair Value Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income (62,000,000) 28,000,000
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Fixed maturity securities AFS | Interest Rate Swap [Member] | Fair Value Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 0 0
Net Investment Income 4,000,000 3,000,000
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims (769,000,000) (128,000,000)
Interest credited to policyholder account balances 0 0
Accumulated Other Comprehensive Income (Loss) | Credit forwards [Member] | Cash Flow Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Other Comprehensive Income (Loss), before Tax 0 0
Accumulated Other Comprehensive Income (Loss) | Currency Swap [Member] | Cash Flow Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Other Comprehensive Income (Loss), before Tax 1,289,000,000 (126,000,000)
Accumulated Other Comprehensive Income (Loss) | Interest Rate Swap [Member] | Cash Flow Hedging [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Other Comprehensive Income (Loss), before Tax 2,002,000,000 242,000,000
Not Designated as Hedging Instrument [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 4,548,000,000 (283,000,000)
Net Investment Income (4,000,000) (1,000,000)
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 131,000,000 (68,000,000)
Interest credited to policyholder account balances 0 0
Equity Market Risk [Member] | Not Designated as Hedging Instrument [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 1,081,000,000 (482,000,000)
Net Investment Income 0 0
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 131,000,000 (68,000,000)
Interest credited to policyholder account balances 0 0
Foreign Currency Gain (Loss) [Member] | Not Designated as Hedging Instrument [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net (112,000,000) 37,000,000
Net Investment Income 0 0
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Interest Rate Risk [Member] | Not Designated as Hedging Instrument [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 3,394,000,000 141,000,000
Net Investment Income (4,000,000) (1,000,000)
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Foreign Exchange [Member] | Not Designated as Hedging Instrument [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 374,000,000 (61,000,000)
Net Investment Income 0 0
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Credit Default Swap, Buying Protection [Member] | Not Designated as Hedging Instrument [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 45,000,000 (10,000,000)
Net Investment Income 0 0
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Credit Default Swap, Selling Protection [Member] | Not Designated as Hedging Instrument [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net (234,000,000) 92,000,000
Net Investment Income 0 0
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 0 0
Interest credited to policyholder account balances 0 0
Embedded Derivative Financial Instruments [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net (1,073,000,000) (98,000,000)
Net policyholder benefits and claims 0 0
Nonoperating Income (Expense) [Member] | Not Designated as Hedging Instrument [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivative, Gain (Loss) on Derivative, Net 80,000,000 71,000,000
Net Investment Income 82,000,000 70,000,000
Gain (Loss) on Investments 0 0
Net other expenses 0 0
Net policyholder benefits and claims 38,000,000 31,000,000
Interest credited to policyholder account balances (44,000,000) (32,000,000)
Other Comprehensive Income (Loss), before Tax 0 0
Effects of Derivatives on Consolidated Statements of Operations and Comprehensive Income (Loss) [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Net Investment Income 85,000,000 72,000,000
Gain (Loss) on Investments 12,000,000 (15,000,000)
Net other expenses 0 0
Net policyholder benefits and claims 174,000,000 (38,000,000)
Interest credited to policyholder account balances (44,000,000) (32,000,000)
Other Comprehensive Income (Loss), before Tax $ 3,730,000,000 $ 71,000,000
v3.20.1
Derivatives (Fair Value Hedges) (Details) - Designated as Hedging Instrument [Member] - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Mortgage loans    
Derivative Instruments, Gain (Loss) [Line Items]    
Debt Instruments, Carrying Amount $ 1,019 $ 1,127
Hedged Asset, Fair Value Hedge, Cumulative Increase (Decrease) 15 2
Future policy benefits [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Debt Instruments, Carrying Amount (5,705) (4,475)
Hedged Asset, Fair Value Hedge, Cumulative Increase (Decrease) (1,677) (908)
Fixed Maturities [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Hedged Asset, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) (1)  
Debt Instruments, Carrying Amount 380 404
Hedged Asset, Fair Value Hedge, Cumulative Increase (Decrease) $ (1) $ (1)
v3.20.1
Derivatives (Credit Derivatives) (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ (50)   $ 199
Maximum Amount of Future Payments under Credit Default Swaps $ 8,518   8,711
Weighted Average Years to Maturity 4 years 4 months 24 days 4 years 3 months 18 days  
Aaa/Aa/A      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ 1   35
Maximum Amount of Future Payments under Credit Default Swaps $ 2,294   2,193
Weighted Average Years to Maturity 2 years 1 month 6 days 2 years 2 months 12 days  
Aaa/Aa/A | Single name credit default swaps (3)      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ 1   1
Maximum Amount of Future Payments under Credit Default Swaps $ 84   94
Weighted Average Years to Maturity 1 year 1 month 6 days 1 year 8 months 12 days  
Aaa/Aa/A | Credit default swaps referencing indices      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ 0   34
Maximum Amount of Future Payments under Credit Default Swaps $ 2,210   2,099
Weighted Average Years to Maturity 2 years 2 months 12 days 2 years 3 months 18 days  
Baa [Member]      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ (36)   143
Maximum Amount of Future Payments under Credit Default Swaps $ 5,978   6,289
Weighted Average Years to Maturity 5 years 2 months 12 days 5 years  
Baa [Member] | Single name credit default swaps (3)      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ (2)   2
Maximum Amount of Future Payments under Credit Default Swaps $ 164   124
Weighted Average Years to Maturity 2 years 2 months 12 days 1 year 7 months 6 days  
Baa [Member] | Credit default swaps referencing indices      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ (34)   141
Maximum Amount of Future Payments under Credit Default Swaps $ 5,814   6,165
Weighted Average Years to Maturity 5 years 3 months 18 days 5 years  
Ba      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ (2)   0
Maximum Amount of Future Payments under Credit Default Swaps $ 20   $ 0
Weighted Average Years to Maturity 2 years 6 months   0 years
Ba | Single name credit default swaps (3)      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ (2)   $ 0
Maximum Amount of Future Payments under Credit Default Swaps $ 20   $ 0
Weighted Average Years to Maturity 2 years 6 months   0 years
Ba | Credit default swaps referencing indices      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ 0   $ 0
Maximum Amount of Future Payments under Credit Default Swaps $ 0   $ 0
Weighted Average Years to Maturity 0 years   0 years
B [Member]      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ (13)   $ 21
Maximum Amount of Future Payments under Credit Default Swaps $ 226   229
Weighted Average Years to Maturity 4 years 6 months 4 years 9 months 18 days  
B [Member] | Single name credit default swaps (3)      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ 0   0
Maximum Amount of Future Payments under Credit Default Swaps $ 10   $ 10
Weighted Average Years to Maturity 2 months 12 days   6 months
B [Member] | Credit default swaps referencing indices      
Credit Derivatives [Line Items]      
Estimated Fair Value of Credit Default Swaps $ (13)   $ 21
Maximum Amount of Future Payments under Credit Default Swaps $ 216   $ 219
Weighted Average Years to Maturity 4 years 8 months 12 days 5 years  
v3.20.1
Derivatives (Estimated Fair Value of Derivative Assets and Liabilities after Master Netting Agreements and Cash Collateral) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Offsetting Assets [Line Items]    
Derivative Asset, Fair Value, Gross Asset Excluding Accruals $ 15,541 $ 8,165
Derivative Liability, Fair Value, Gross Liability Excluding Accruals 2,838 2,093
Net amount of derivative assets after application of master netting agreements and cash collateral 457 6
Net amount of derivative liabilities after application of master netting agreements and cash collateral 2 6
Over the Counter [Member]    
Offsetting Assets [Line Items]    
Derivative Asset, Fair Value, Gross Asset Excluding Accruals 14,718 7,974
Derivative Liability, Fair Value, Gross Liability Excluding Accruals 2,289 2,035
Gross estimated fair value of derivative assets (2,236) (1,915)
Gross estimated fair value of derivative liabilities (2,236) (1,915)
Cash collateral on derivative assets (10,270) (4,808)
Cash collateral on derivative liabilities 0 0
Securities collateral on derivative assets (2,178) (1,246)
Securities collateral on derivative liabilities (51) (114)
Exchange Traded [Member]    
Offsetting Assets [Line Items]    
Derivative Asset, Fair Value, Gross Asset Excluding Accruals 7 0
Derivative Liability, Fair Value, Gross Liability Excluding Accruals 1 5
Gross estimated fair value of derivative assets 0 0
Gross estimated fair value of derivative liabilities 0 0
Cash collateral on derivative assets 0 0
Cash collateral on derivative liabilities 0 0
Securities collateral on derivative assets 0 0
Securities collateral on derivative liabilities (1) (5)
Cleared [Member]    
Offsetting Assets [Line Items]    
Derivative Asset, Fair Value, Gross Asset Excluding Accruals 816 191
Derivative Liability, Fair Value, Gross Liability Excluding Accruals 548 53
Gross estimated fair value of derivative assets (400) (25)
Gross estimated fair value of derivative liabilities (400) (25)
Cash collateral on derivative assets 0 (165)
Cash collateral on derivative liabilities (26) 0
Securities collateral on derivative assets 0 0
Securities collateral on derivative liabilities $ (122) $ (28)
v3.20.1
Derivatives (Credit Risk on Freestanding Derivatives) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Credit Derivatives [Line Items]    
Customer Securities for which Entity has Right to Sell or Repledge, Fair Value of Securities Sold or Repledged $ 0  
Estimated Fair Value of Derivatives in Net Liability Position 52 $ 120
Fixed Maturity Securities    
Credit Derivatives [Line Items]    
Estimated Fair Value of Collateral Provided 51 135
Estimated Fair Value of Derivatives in a Net Liability Position (1)    
Credit Derivatives [Line Items]    
Estimated Fair Value of Derivatives in Net Liability Position 52 120
Estimated Fair Value of Derivatives in a Net Liability Position (1) | Fixed Maturity Securities    
Credit Derivatives [Line Items]    
Estimated Fair Value of Collateral Provided 51 135
Estimated Fair Value of Collateral Provided:    
Credit Derivatives [Line Items]    
Estimated Fair Value of Derivatives in Net Liability Position 0 0
Estimated Fair Value of Collateral Provided: | Fixed Maturity Securities    
Credit Derivatives [Line Items]    
Estimated Fair Value of Collateral Provided $ 0 $ 0
v3.20.1
Derivatives (Embedded Derivatives) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Derivatives, Fair Value [Line Items]    
Embedded Derivative, Fair Value of Embedded Derivative Liability $ 2,442 $ 1,325
Direct guaranteed minimum benefits | Policyholder account balances    
Derivatives, Fair Value [Line Items]    
Embedded Derivative, Fair Value of Embedded Derivative Liability 1,428 175
Assumed guaranteed minimum benefits | Other policy-related balances [Member]    
Derivatives, Fair Value [Line Items]    
Embedded Derivative, Fair Value of Embedded Derivative Liability 7 3
Funds withheld on ceded reinsurance (including affiliated) | Other liabilities    
Derivatives, Fair Value [Line Items]    
Embedded Derivative, Fair Value of Embedded Derivative Liability 943 1,017
Fixed annuities with equity indexed returns | Policyholder account balances    
Derivatives, Fair Value [Line Items]    
Embedded Derivative, Fair Value of Embedded Derivative Liability 2 0
Fixed annuities with equity indexed returns [Member] | Policyholder account balances    
Derivatives, Fair Value [Line Items]    
Embedded Derivative, Fair Value of Embedded Derivative Liability $ 62 $ 130
v3.20.1
Derivatives (Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Derivatives, Fair Value [Line Items]      
Estimated Fair Value Assets $ 15,395   $ 8,080
Estimated Fair Value Liabilities 2,802   2,102
Maximum Amount of Future Payments under Credit Default Swaps 8,518   8,711
Credit Risk Derivative Assets, at Fair Value (50)    
Estimated Fair Value of Credit Default Swaps     $ 199
Derivative Instrument Detail [Abstract]      
Net amounts reclassified into net derivatives gains (losses) on discontinued cash flow hedges $ 1 $ 2  
Hedging exposure to variability in future cash flows for specific length of time 9 years   8 years
Accumulated Other Comprehensive Income Loss $ 5,800   $ 2,000
Deferred net gains (losses) expected to be reclassified to earnings (16)    
Excess cash collateral received on derivatives 170   290
Securities collateral received which the company is permitted to sell or repledge, amount that has been sold or repledged 0    
Over the Counter [Member]      
Derivatives, Fair Value [Line Items]      
Cash collateral on derivative assets (10,270)   (4,808)
Excess securities collateral received on derivatives 265   97
Excess securities collateral provided on derivatives 107   48
Exchange Traded [Member]      
Derivatives, Fair Value [Line Items]      
Cash collateral on derivative assets 0   0
Excess securities collateral received on derivatives 1,400   462
Excess securities collateral provided on derivatives 85   90
Nonperformance Risk [Member]      
Derivative Instruments, Gain (Loss) [Line Items]      
Embedded derivative gains (losses) 111 $ (11)  
Accrued Liabilities [Member]      
Derivatives, Fair Value [Line Items]      
Estimated Fair Value Assets 146   85
Estimated Fair Value Liabilities $ 36   $ (9)
v3.20.1
Fair Value (Recurring Fair Value Measurements) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS $ 170,882 $ 169,564
Short-term investments 4,274 1,883
Residential mortgage loans — FVO 66,041 65,549
Derivative assets 15,395 8,080
Separate account assets 111,541 117,867
Liabilities [Abstract]    
Derivative liabilities 2,802 2,102
Embedded derivatives within liability host contracts 2,442 1,325
Separate account liabilities 111,541 117,867
Residential mortgage loans - FVO    
Assets [Abstract]    
Residential mortgage loans — FVO 180 188
Recurring    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 170,882 169,564
Short-term investments 4,274 1,883
Other investments 1,092 1,251
Derivative assets 15,395 8,080
Separate account assets 111,541 117,867
Total assets 303,364 298,833
Liabilities [Abstract]    
Derivative liabilities 2,802 2,102
Embedded derivatives within liability host contracts 2,442 1,325
Total liabilities 5,309 3,449
Recurring | Interest rate contracts    
Assets [Abstract]    
Derivative assets 10,234 5,770
Liabilities [Abstract]    
Derivative liabilities 672 358
Recurring | Foreign currency exchange rate contracts    
Assets [Abstract]    
Derivative assets 3,905 1,642
Liabilities [Abstract]    
Derivative liabilities 1,857 1,225
Recurring | Credit contracts    
Assets [Abstract]    
Derivative assets 65 204
Liabilities [Abstract]    
Derivative liabilities 77 12
Recurring | Equity market contracts    
Assets [Abstract]    
Derivative assets 1,191 464
Liabilities [Abstract]    
Derivative liabilities 196 507
Recurring | Derivative Liabilities Within Separate Accounts    
Liabilities [Abstract]    
Separate account liabilities 65 22
Recurring | Residential mortgage loans - FVO    
Assets [Abstract]    
Residential mortgage loans — FVO 180 188
Recurring | U.S. corporate    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 55,835 58,459
Recurring | U.S. government and agency    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 33,735 29,248
Recurring | Foreign corporate    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 27,646 30,301
Recurring | RMBS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 24,253 22,773
Recurring | ABS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 10,580 10,201
Recurring | Municipals    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 8,293 7,856
Recurring | CMBS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 5,773 5,720
Recurring | Foreign government    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 4,767 5,006
Recurring | Level 1    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 11,752 11,487
Short-term investments 2,159 1,077
Other investments 282 396
Derivative assets 7 0
Separate account assets 22,995 22,753
Total assets 37,195 35,713
Liabilities [Abstract]    
Derivative liabilities 1 5
Embedded derivatives within liability host contracts 0 0
Total liabilities 5 6
Recurring | Level 1 | Interest rate contracts    
Assets [Abstract]    
Derivative assets 0 0
Liabilities [Abstract]    
Derivative liabilities 0 0
Recurring | Level 1 | Foreign currency exchange rate contracts    
Assets [Abstract]    
Derivative assets 0 0
Liabilities [Abstract]    
Derivative liabilities 0 0
Recurring | Level 1 | Credit contracts    
Assets [Abstract]    
Derivative assets 0 0
Liabilities [Abstract]    
Derivative liabilities 0 0
Recurring | Level 1 | Equity market contracts    
Assets [Abstract]    
Derivative assets 7 0
Liabilities [Abstract]    
Derivative liabilities 1 5
Recurring | Level 1 | Derivative Liabilities Within Separate Accounts    
Liabilities [Abstract]    
Separate account liabilities 4 1
Recurring | Level 1 | Residential mortgage loans - FVO    
Assets [Abstract]    
Residential mortgage loans — FVO 0 0
Recurring | Level 1 | U.S. corporate    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 0 0
Recurring | Level 1 | U.S. government and agency    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 11,591 11,484
Recurring | Level 1 | Foreign corporate    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 0 0
Recurring | Level 1 | RMBS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 161 3
Recurring | Level 1 | ABS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 0 0
Recurring | Level 1 | Municipals    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 0 0
Recurring | Level 1 | CMBS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 0 0
Recurring | Level 1 | Foreign government    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 0 0
Recurring | Level 2    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 142,879 145,283
Short-term investments 1,761 789
Other investments 155 56
Derivative assets 14,165 7,943
Separate account assets 87,604 94,192
Total assets 246,564 248,263
Liabilities [Abstract]    
Derivative liabilities 2,770 1,888
Embedded derivatives within liability host contracts 0 0
Total liabilities 2,816 1,902
Recurring | Level 2 | Interest rate contracts    
Assets [Abstract]    
Derivative assets 9,085 5,690
Liabilities [Abstract]    
Derivative liabilities 672 167
Recurring | Level 2 | Foreign currency exchange rate contracts    
Assets [Abstract]    
Derivative assets 3,895 1,642
Liabilities [Abstract]    
Derivative liabilities 1,857 1,225
Recurring | Level 2 | Credit contracts    
Assets [Abstract]    
Derivative assets 45 172
Liabilities [Abstract]    
Derivative liabilities 56 11
Recurring | Level 2 | Equity market contracts    
Assets [Abstract]    
Derivative assets 1,140 439
Liabilities [Abstract]    
Derivative liabilities 185 485
Recurring | Level 2 | Derivative Liabilities Within Separate Accounts    
Liabilities [Abstract]    
Separate account liabilities 46 14
Recurring | Level 2 | Residential mortgage loans - FVO    
Assets [Abstract]    
Residential mortgage loans — FVO 0 0
Recurring | Level 2 | U.S. corporate    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 49,313 53,975
Recurring | Level 2 | U.S. government and agency    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 22,144 17,764
Recurring | Level 2 | Foreign corporate    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 21,190 25,403
Recurring | Level 2 | RMBS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 21,689 20,158
Recurring | Level 2 | ABS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 9,778 9,459
Recurring | Level 2 | Municipals    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 8,293 7,849
Recurring | Level 2 | CMBS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 5,738 5,679
Recurring | Level 2 | Foreign government    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 4,734 4,996
Recurring | Level 3    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 16,251 12,794
Short-term investments 354 17
Other investments 655 799
Derivative assets 1,223 137
Separate account assets 942 922
Total assets 19,605 14,857
Liabilities [Abstract]    
Derivative liabilities 31 209
Embedded derivatives within liability host contracts 2,442 1,325
Total liabilities 2,488 1,541
Recurring | Level 3 | Interest rate contracts    
Assets [Abstract]    
Derivative assets 1,149 80
Liabilities [Abstract]    
Derivative liabilities 0 191
Recurring | Level 3 | Foreign currency exchange rate contracts    
Assets [Abstract]    
Derivative assets 10 0
Liabilities [Abstract]    
Derivative liabilities 0 0
Recurring | Level 3 | Credit contracts    
Assets [Abstract]    
Derivative assets 20 32
Liabilities [Abstract]    
Derivative liabilities 21 1
Recurring | Level 3 | Equity market contracts    
Assets [Abstract]    
Derivative assets 44 25
Liabilities [Abstract]    
Derivative liabilities 10 17
Recurring | Level 3 | Derivative Liabilities Within Separate Accounts    
Liabilities [Abstract]    
Separate account liabilities 15 7
Recurring | Level 3 | Residential mortgage loans - FVO    
Assets [Abstract]    
Residential mortgage loans — FVO 180 188
Recurring | Level 3 | U.S. corporate    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 6,522 4,484
Recurring | Level 3 | U.S. government and agency    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 0 0
Recurring | Level 3 | Foreign corporate    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 6,456 4,898
Recurring | Level 3 | RMBS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 2,403 2,612
Recurring | Level 3 | ABS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 802 742
Recurring | Level 3 | Municipals    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 0 7
Recurring | Level 3 | CMBS    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 35 41
Recurring | Level 3 | Foreign government    
Assets [Abstract]    
Estimated Fair Value of Fixed Maturity Securities AFS 33 10
Other limited partnership interests | Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments, Fair Value Disclosure $ 88 $ 90
v3.20.1
Fair Value (Quantitative Information) (Details)
Mar. 31, 2020
Dec. 31, 2019
Minimum | Interest rate contracts | Measurement Input, Swap Yield    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 66 190
Minimum | Interest rate contracts | Measurement Input, Repurchase Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input (18) (6)
Minimum | Foreign currency exchange rate contracts | Measurement Input, Swap Yield    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input (23) (22)
Minimum | Credit contracts | Measurement Input, Credit Spread    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 98 96
Minimum | Equity market contracts | Measurement Input, Price Volatility    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 0.29 0.14
Minimum | Equity market contracts | Measurement Input, Correlation    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 0.10 0.10
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Utilization Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0 0
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Withdrawal Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0025 0.0025
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Long-Term Equity Volatility    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.1624 0.1624
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Counterparty Credit Risk    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0008 0.0003
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Durations 1 - 10 | Measurement Input, Lapse Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0025 0.0025
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Durations 11 - 20 | Measurement Input, Lapse Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.03 0.03
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Durations 21 - 116 | Measurement Input, Lapse Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.02 0.02
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Ages 0 - 40 | Measurement Input, Mortality Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0001 0.0001
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Ages 41 - 60 | Measurement Input, Mortality Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0004 0.0004
Minimum | Embedded derivatives direct and assumed guaranteed minimum benefits | Ages 61 - 115 | Measurement Input, Mortality Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0026 0.0026
Minimum | U.S. corporate and foreign corporate | Valuation Technique, Matrix Pricing | Measurement Input, Offered Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 0 5
Minimum | U.S. corporate and foreign corporate | Valuation Technique, Market Approach | Measurement Input, Quoted Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 20 25
Minimum | RMBS | Valuation Technique, Market Approach | Measurement Input, Quoted Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 0 0
Minimum | ABS | Valuation Technique, Market Approach | Measurement Input, Quoted Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 5 8
Maximum | Interest rate contracts | Measurement Input, Swap Yield    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 147 251
Maximum | Interest rate contracts | Measurement Input, Repurchase Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 0 6
Maximum | Foreign currency exchange rate contracts | Measurement Input, Swap Yield    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input (12) (5)
Maximum | Credit contracts | Measurement Input, Credit Spread    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 104 100
Maximum | Equity market contracts | Measurement Input, Price Volatility    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 0.56 0.23
Maximum | Equity market contracts | Measurement Input, Correlation    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 0.30 0.30
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Utilization Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.22 0.22
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Withdrawal Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.10 0.10
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Long-Term Equity Volatility    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.2165 0.2165
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Counterparty Credit Risk    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0056 0.0043
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Durations 1 - 10 | Measurement Input, Lapse Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 1 1
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Durations 11 - 20 | Measurement Input, Lapse Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 1 1
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Durations 21 - 116 | Measurement Input, Lapse Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 1 1
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Ages 0 - 40 | Measurement Input, Mortality Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0018 0.0018
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Ages 41 - 60 | Measurement Input, Mortality Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0057 0.0057
Maximum | Embedded derivatives direct and assumed guaranteed minimum benefits | Ages 61 - 115 | Measurement Input, Mortality Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 1 1
Maximum | U.S. corporate and foreign corporate | Valuation Technique, Matrix Pricing | Measurement Input, Offered Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 191 145
Maximum | U.S. corporate and foreign corporate | Valuation Technique, Market Approach | Measurement Input, Quoted Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 130 131
Maximum | RMBS | Valuation Technique, Market Approach | Measurement Input, Quoted Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 126 119
Maximum | ABS | Valuation Technique, Market Approach | Measurement Input, Quoted Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 101 101
Weighted Average | Interest rate contracts | Measurement Input, Swap Yield    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 117  
Weighted Average | Interest rate contracts | Measurement Input, Repurchase Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input (10)  
Weighted Average | Foreign currency exchange rate contracts | Measurement Input, Swap Yield    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input (18)  
Weighted Average | Credit contracts | Measurement Input, Credit Spread    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 100  
Weighted Average | Equity market contracts | Measurement Input, Price Volatility    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 0.32  
Weighted Average | Equity market contracts | Measurement Input, Correlation    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative Asset (Liability) Net, Measurement Input 0.13  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Utilization Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0090  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Withdrawal Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0423  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Long-Term Equity Volatility    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.1830  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Measurement Input, Counterparty Credit Risk    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0049  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Durations 1 - 10 | Measurement Input, Lapse Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0790  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Durations 11 - 20 | Measurement Input, Lapse Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0640  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Durations 21 - 116 | Measurement Input, Lapse Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0640  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Ages 0 - 40 | Measurement Input, Mortality Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0006  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Ages 41 - 60 | Measurement Input, Mortality Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0030  
Weighted Average | Embedded derivatives direct and assumed guaranteed minimum benefits | Ages 61 - 115 | Measurement Input, Mortality Rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Embedded Derivative Asset (Liability) Net, Measurement Input 0.0190  
Weighted Average | U.S. corporate and foreign corporate | Valuation Technique, Matrix Pricing | Measurement Input, Offered Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 104 110
Weighted Average | U.S. corporate and foreign corporate | Valuation Technique, Market Approach | Measurement Input, Quoted Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 98 101
Weighted Average | RMBS | Valuation Technique, Market Approach | Measurement Input, Quoted Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 89 95
Weighted Average | ABS | Valuation Technique, Market Approach | Measurement Input, Quoted Price    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 90 98
v3.20.1
Fair Value (Unobservable Input Reconciliation) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Residential mortgage loans - FVO    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Balance, beginning of period $ 188 $ 299
Total realized/unrealized gains (losses) included in net income (loss) 2 2
Total realized/unrealized gains (losses) included in AOCI 0 0
Purchases 0 0
Sales (5) (16)
Issuances 0 0
Settlements (5) (9)
Transfers into Level 3 0 0
Transfers out of Level 3 0 0
Balance, end of period 180 276
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Net Derivatives    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 222 37
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 1,060  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Balance, beginning of period (72) (192)
Total realized/unrealized gains (losses) included in net income (loss) 266 35
Total realized/unrealized gains (losses) included in AOCI 1,111 98
Purchases 0 0
Sales 0 0
Issuances 0 0
Settlements (113) (28)
Transfers into Level 3 0 0
Transfers out of Level 3 0 0
Balance, end of period 1,192 (87)
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 222 37
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 1,060  
Net Embedded Derivatives    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period (1,071) (97)
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Balance, beginning of period (1,325) (704)
Total realized/unrealized gains (losses) included in net income (loss) (1,073) (98)
Total realized/unrealized gains (losses) included in AOCI 0 0
Purchases 0 0
Sales 0 0
Issuances 0 0
Settlements (44) (45)
Transfers into Level 3 0 0
Transfers out of Level 3 0 0
Balance, end of period (2,442) (847)
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period (1,071) (97)
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Corporate fixed maturity securities    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Balance, beginning of period 9,382 7,101
Total realized/unrealized gains (losses) included in net income (loss) (58) (2)
Total realized/unrealized gains (losses) included in AOCI (766) 230
Purchases 1,660 330
Sales (515) (168)
Issuances 0 0
Settlements 0 0
Transfers into Level 3 3,594 190
Transfers out of Level 3 (319) (351)
Balance, end of period 12,978 7,330
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period (58) (2)
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period (770)  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period (58) (2)
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period (770)  
Structured Securities    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Balance, beginning of period 3,395 3,541
Total realized/unrealized gains (losses) included in net income (loss) 10 13
Total realized/unrealized gains (losses) included in AOCI (287) 19
Purchases 257 128
Sales (161) (131)
Issuances 0 0
Settlements 0 0
Transfers into Level 3 45 0
Transfers out of Level 3 (19) (256)
Balance, end of period 3,240 3,314
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 10 13
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period (287)  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 10 13
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period (287)  
Foreign government    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Balance, beginning of period 10 10
Total realized/unrealized gains (losses) included in net income (loss) 0 0
Total realized/unrealized gains (losses) included in AOCI (3) 0
Purchases 26 11
Sales 0 0
Issuances 0 0
Settlements 0 0
Transfers into Level 3 1 0
Transfers out of Level 3 (1) 0
Balance, end of period 33 21
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period (3)  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period (3)  
Municipals    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Balance, beginning of period 7 0
Total realized/unrealized gains (losses) included in net income (loss) 0 0
Total realized/unrealized gains (losses) included in AOCI 0 0
Purchases 0 0
Sales 0 0
Issuances 0 0
Settlements 0 0
Transfers into Level 3 0 0
Transfers out of Level 3 (7) 0
Balance, end of period 0 0
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Short-term Investments    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Balance, beginning of period 17 25
Total realized/unrealized gains (losses) included in net income (loss) 0 0
Total realized/unrealized gains (losses) included in AOCI 0 0
Purchases 352 102
Sales (1) 0
Issuances 0 0
Settlements 0 0
Transfers into Level 3 0 0
Transfers out of Level 3 (14) 0
Balance, end of period 354 127
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Other Investments    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Balance, beginning of period 799 571
Total realized/unrealized gains (losses) included in net income (loss) (48) 51
Total realized/unrealized gains (losses) included in AOCI 0 0
Purchases 15 2
Sales (33) (20)
Issuances 0 0
Settlements 0 0
Transfers into Level 3 0 0
Transfers out of Level 3 (78) 0
Balance, end of period 655 604
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period (40) 44
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period (40) 44
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Separate Accounts    
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Balance, beginning of period 915 937
Total realized/unrealized gains (losses) included in net income (loss) (9) 3
Total realized/unrealized gains (losses) included in AOCI 0 0
Purchases 85 80
Sales (56) (122)
Issuances (1) 2
Settlements 0 (1)
Transfers into Level 3 10 0
Transfers out of Level 3 (17) (2)
Balance, end of period 927 897
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period 0  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at end of period 0 $ 0
Changes in unrealized gains (losses) included in AOCI for the instruments still held at end of period $ 0  
v3.20.1
Fair Value (Fair Value Option for Residential Mortgage Loans) (Details) - Residential mortgage loans - FVO - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Fair Value, Option, Quantitative Disclosures [Line Items]    
Unpaid principal balance $ 196 $ 209
Difference between estimated fair value and unpaid principal balance (16) (21)
Carrying value at estimated fair value 180 188
Loans in nonaccrual status 43 47
Loans more than 90 days past due 18 18
Loans in nonaccrual status or more than 90 days past due, or both - difference between aggregate estimated fair value and unpaid principal balance $ (16) $ (19)
v3.20.1
Fair Value (Financial Instruments Carried at Other Than Fair Value) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Assets    
Policy loans $ 6,103 $ 6,100
Liabilities    
Separate account liabilities 111,541 117,867
Carrying Value    
Assets    
Mortgage loans 65,861 65,361
Policy loans 6,103 6,100
Other invested assets 3,010 2,964
Premiums, reinsurance and other receivables 14,087 14,042
Liabilities    
Policyholder account balances 74,765 73,693
Long-term debt 1,621 1,543
Other liabilities 14,467 12,789
Separate account liabilities 54,516 52,830
Estimated Fair Value    
Assets    
Mortgage loans 67,699 67,680
Policy loans 7,597 7,198
Other invested assets 2,844 2,866
Premiums, reinsurance and other receivables 15,056 14,855
Liabilities    
Policyholder account balances 80,299 75,885
Long-term debt 1,824 1,888
Other liabilities 14,880 12,932
Separate account liabilities 54,516 52,830
Estimated Fair Value | Level 1    
Assets    
Mortgage loans 0 0
Policy loans 0 0
Other invested assets 0 0
Premiums, reinsurance and other receivables 0 0
Liabilities    
Policyholder account balances 0 0
Long-term debt 0 0
Other liabilities 0 0
Separate account liabilities 0 0
Estimated Fair Value | Level 2    
Assets    
Mortgage loans 0 0
Policy loans 266 263
Other invested assets 2,755 2,708
Premiums, reinsurance and other receivables 435 367
Liabilities    
Policyholder account balances 0 0
Long-term debt 1,824 1,888
Other liabilities 1,857 113
Separate account liabilities 54,516 52,830
Estimated Fair Value | Level 3    
Assets    
Mortgage loans 67,699 67,680
Policy loans 7,331 6,935
Other invested assets 89 158
Premiums, reinsurance and other receivables 14,621 14,488
Liabilities    
Policyholder account balances 80,299 75,885
Long-term debt 0 0
Other liabilities 13,023 12,819
Separate account liabilities $ 0 $ 0
v3.20.1
Equity (Components of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Balance, beginning of period $ 10,025 $ 3,562
OCI before reclassifications 1,088 3,694
Deferred income tax benefit (expense) (202) (772)
AOCI before reclassifications, net of income tax 10,911 6,484
Amounts reclassified from AOCI 481 19
Deferred income tax benefit (expense) (101) (3)
Amounts reclassified from AOCI, net of income tax 380 16
Balance, end of period 11,291 6,517
Unrealized Investment Gains (Losses), Net of Related Offsets    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Balance, beginning of period 8,876 2,515
OCI before reclassifications (2,219) 3,604
Deferred income tax benefit (expense) 494 (754)
AOCI before reclassifications, net of income tax 7,151 5,365
Amounts reclassified from AOCI 33 58
Deferred income tax benefit (expense) (7) (12)
Amounts reclassified from AOCI, net of income tax 26 46
Balance, end of period 7,177 5,410
Unrealized Gains (Losses) on Derivatives    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Balance, beginning of period 1,620 1,382
OCI before reclassifications 3,291 94
Deferred income tax benefit (expense) (691) (21)
AOCI before reclassifications, net of income tax 4,220 1,455
Amounts reclassified from AOCI 439 (45)
Deferred income tax benefit (expense) (92) 10
Amounts reclassified from AOCI, net of income tax 347 (35)
Balance, end of period 4,567 1,438
Foreign Currency Translation Adjustments    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Balance, beginning of period (97) (74)
OCI before reclassifications 16 (3)
Deferred income tax benefit (expense) (5) 3
AOCI before reclassifications, net of income tax (86) (74)
Amounts reclassified from AOCI 0 0
Deferred income tax benefit (expense) 0 0
Amounts reclassified from AOCI, net of income tax 0 0
Balance, end of period (86) (74)
Defined Benefit Plans Adjustment    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Balance, beginning of period (374) (261)
OCI before reclassifications 0 (1)
Deferred income tax benefit (expense) 0 0
AOCI before reclassifications, net of income tax (374) (262)
Amounts reclassified from AOCI 9 6
Deferred income tax benefit (expense) (2) (1)
Amounts reclassified from AOCI, net of income tax 7 5
Balance, end of period $ (367) (257)
Accounting Standards Update 2017-12    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Amounts reclassified from AOCI   21
Deferred income tax benefit (expense)   (4)
Amounts reclassified from AOCI, net of income tax   17
Accounting Standards Update 2017-12 | Unrealized Investment Gains (Losses), Net of Related Offsets    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Amounts reclassified from AOCI   (1)
Deferred income tax benefit (expense)   0
Amounts reclassified from AOCI, net of income tax   (1)
Accounting Standards Update 2017-12 | Unrealized Gains (Losses) on Derivatives    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Amounts reclassified from AOCI   22
Deferred income tax benefit (expense)   (4)
Amounts reclassified from AOCI, net of income tax   18
Accounting Standards Update 2017-12 | Foreign Currency Translation Adjustments    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Amounts reclassified from AOCI   0
Deferred income tax benefit (expense)   0
Amounts reclassified from AOCI, net of income tax   0
Accounting Standards Update 2017-12 | Defined Benefit Plans Adjustment    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Amounts reclassified from AOCI   0
Deferred income tax benefit (expense)   0
Amounts reclassified from AOCI, net of income tax   $ 0
v3.20.1
Equity (Reclassifications Out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Net investment gains (losses) $ (182) $ (54)
Net derivative gains (losses) 3,555 (310)
Net investment income 2,644 2,645
Income (loss) before provision for income tax 4,337 508
Income tax (expense) benefit (790) 0
Net income (loss) 3,547 508
Reclassification out of Accumulated Other Comprehensive Income    
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Net income (loss) (380) (16)
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Investment Gains (Losses), Net of Related Offsets    
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Net investment gains (losses) (26) (41)
Net derivative gains (losses) (1) (17)
Net investment income (6) 0
Income (loss) before provision for income tax (33) (58)
Income tax (expense) benefit 7 12
Net income (loss) (26) (46)
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains (Losses) on Derivatives    
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Income (loss) before provision for income tax (439) 45
Income tax (expense) benefit 92 (10)
Net income (loss) (347) 35
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains (Losses) on Derivatives | Interest rate derivatives    
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Net investment gains (losses) 6 (6)
Net investment income 6 5
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains (Losses) on Derivatives | Foreign currency swaps    
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Net investment gains (losses) (451) 47
Net investment income 0 (1)
Reclassification out of Accumulated Other Comprehensive Income | Defined Benefit Plans Adjustment    
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]    
Amortization of net actuarial gains (losses) (10) (7)
Amortization of prior service (costs) credit 1 1
Income (loss) before provision for income tax (9) (6)
Income tax (expense) benefit 2 1
Net income (loss) $ (7) $ (5)
v3.20.1
Other Revenues (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax $ 209 $ 203
Other revenues 373 401
Prepaid legal plans    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 95 81
Recordkeeping and administrative services    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 49 50
Administrative services-only contracts    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 56 53
Other revenue from service contracts from customers    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 9 19
Other Income    
Disaggregation of Revenue [Line Items]    
Other revenues $ 164 $ 198
v3.20.1
Other Expenses (Other Expenses) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Other Income and Expenses [Abstract]    
General and administrative expenses (1) $ 595 $ 570
Pension, postretirement and postemployment benefit costs 9 26
Premium taxes, other taxes, and licenses & fees 97 77
Commissions and other variable expenses 472 441
Capitalization of DAC (10) (12)
Amortization of DAC and VOBA 103 19
Interest expense on debt 25 27
Total other expenses 1,291 1,148
Net change in cash surrender value of investments, net of premiums paid $ 28 $ (58)
v3.20.1
Employee Benefit Plans (Net Periodic Benefit Costs) (Details) - Pension Benefits - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Net periodic benefit costs [Abstract]    
Service costs $ 5 $ 4
Interest costs 10 12
Amortization of net actuarial (gains) losses 10 7
Amortization of prior service costs (credit) (1) (1)
Allocated to affiliates 19 16
Net periodic benefit costs (credit) 19 16
Affiliated Entity    
Net periodic benefit costs [Abstract]    
Allocated to affiliates (5) (6)
Net periodic benefit costs (credit) $ (5) $ (6)
v3.20.1
Income Tax (Narrative) (Details)
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Income Tax Disclosure [Abstract]    
Effective Income Tax Rate Reconciliation, Percent 18.00% 0.00%
v3.20.1
Contingencies, Commitments and Guarantees (Contingencies - Narrative) (Details)
$ in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2020
USD ($)
Claims
Mar. 31, 2019
Claims
Dec. 31, 2019
Claims
Minimum      
Loss Contingencies      
Loss Contingency, Range of Possible Loss, Portion Not Accrued $ 0    
Maximum      
Loss Contingencies      
Loss Contingency, Range of Possible Loss, Portion Not Accrued $ 175    
Asbestos Related Claims      
Loss Contingencies      
Asbestos-Related Claims | Claims 596 843 3,187
v3.20.1
Contingencies, Commitments and Guarantees (Commitments and Guarantees - Narrative) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Contingencies, Commitments and Guarantees [Abstract]    
Liabilities for indemnities, guarantees and commitments $ 3 $ 3
Cumulative maximum indemnities and guarantees contractual limitation 505  
Minimum    
Contingencies, Commitments and Guarantees [Abstract]    
Indemnities and guarantees contractual limitation range 1  
Maximum    
Contingencies, Commitments and Guarantees [Abstract]    
Indemnities and guarantees contractual limitation range 377  
Mortgage Loan Commitments    
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]    
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability 2,500 3,700
Commitments to Fund Partnership Investments, Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments    
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]    
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability $ 4,300 $ 4,600
v3.20.1
Related Party Transactions (Service Agreements - Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Related Party Transaction [Line Items]      
Other expenses $ 1,291 $ 1,148  
Revenues 12,166 8,237  
Net receivables (payables) due from (to) affiliates (148)   $ (250)
Affiliated Entity | Services Necessary To Conduct The Company's Activities      
Related Party Transaction [Line Items]      
Other expenses 611 736  
Revenues $ 10 $ 7  
v3.20.1
Related Party Transactions (Effects of Affiliated Reinsurance on Statements of Operations) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Premiums:    
Net premiums $ 5,248 $ 5,052
Universal life and investment-type product policy fees:    
Net universal life and investment-type product policy fees 528 503
Other revenues:    
Net other revenues 373 401
Policyholder benefits and claims:    
Net policyholder benefits and claims 5,679 5,662
Interest Credited To Policyholder Account Balances [Abstract]    
Net interest credited to policyholder account balances 611 662
Other expenses:    
Net other expenses 1,291 1,148
Affiliated Entity | Assumed Reinsurance [Member]    
Premiums:    
Reinsurance assumed 2 3
Universal life and investment-type product policy fees:    
Reinsurance assumed 0 0
Other revenues:    
Reinsurance assumed (9) (4)
Policyholder benefits and claims:    
Reinsurance assumed 1 1
Interest Credited To Policyholder Account Balances [Abstract]    
Reinsurance assumed 7 7
Other expenses:    
Reinsurance assumed 0 0
Affiliated Entity | Ceded Reinsurance [Member]    
Premiums:    
Reinsurance ceded (29) (32)
Universal life and investment-type product policy fees:    
Reinsurance ceded (1) (6)
Other revenues:    
Reinsurance ceded 132 127
Policyholder benefits and claims:    
Reinsurance ceded (35) (33)
Interest Credited To Policyholder Account Balances [Abstract]    
Reinsurance ceded (3) (3)
Other expenses:    
Reinsurance ceded 135 125
Affiliated Entity | Reinsurance [Member]    
Premiums:    
Net premiums (27) (29)
Universal life and investment-type product policy fees:    
Net universal life and investment-type product policy fees 1 (6)
Other revenues:    
Net other revenues 123 123
Policyholder benefits and claims:    
Net policyholder benefits and claims (34) (32)
Interest Credited To Policyholder Account Balances [Abstract]    
Net interest credited to policyholder account balances 4 4
Other expenses:    
Net other expenses $ 135 $ 125
v3.20.1
Related Party Transactions (Effects of Affiliated Reinsurance on Balance Sheets) (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Assets    
Premiums, reinsurance and other receivables $ 23,384 $ 22,435
Deferred policy acquisition costs and value of business acquired 3,395 3,453
Liabilities:    
Policyholder account balances 95,116 91,708
Other policy-related balances 7,755 7,732
Other Liabilities 29,219 26,082
Assumed Reinsurance [Member] | Affiliated Entity    
Assets    
Premiums, reinsurance and other receivables 0 0
Deferred policy acquisition costs and value of business acquired 0 0
Total assets 0 0
Liabilities:    
Liability for Future Policy Benefit, before Reinsurance 54 55
Policyholder account balances 128 131
Other policy-related balances 1 1
Other Liabilities 835 824
Total liabilities 1,018 1,011
Ceded Reinsurance [Member] | Affiliated Entity    
Assets    
Premiums, reinsurance and other receivables 12,548 12,584
Deferred policy acquisition costs and value of business acquired (163) (160)
Total assets 12,385 12,424
Liabilities:    
Liability for Future Policy Benefit, before Reinsurance (11) (6)
Policyholder account balances 0 0
Other policy-related balances 8 9
Other Liabilities 12,557 12,695
Total liabilities $ 12,554 $ 12,698
v3.20.1
Related Party Transactions (Reinsurance Transactions - Narrative) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Reinsurance Disclosures [Abstract]      
Embedded Derivative, Fair Value of Embedded Derivative Liability $ 2,442   $ 1,325
Affiliated Entity | Funds Withheld On Ceded Reinsurance [Member]      
Reinsurance Disclosures [Abstract]      
Coinsurance Funds Withheld Basis, Percent 75.00%    
Embedded Derivative, Fair Value of Embedded Derivative Liability $ 36   21
Net derivatives gains (losses) (15) $ (8)  
Affiliated Entity | Closed Block Liabilities Ceded To MetLife Reinsurance Of Charleston [Member]      
Reinsurance Disclosures [Abstract]      
Embedded Derivative, Fair Value of Embedded Derivative Liability 907   $ 996
Net derivatives gains (losses) $ 89 $ (222)