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INVESTMENTS | 9 Months Ended
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Sep. 30, 2017
Investments [Abstract] |
INVESTMENTS | INVESTMENTS Investment Holdings The amortized cost for the Company's investments in debt and perpetual securities, the cost for equity securities and the fair values of these investments are shown in the following tables.
| September 30, 2017
(In millions) | Cost or Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities available for sale, carried at fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Japan government and agencies |  | $ | 27,027 |  |  |  |  | $ | 3,272 |  |  |  |  | $ | 423 |  |  |  |  | $ | 29,876 |  |
Municipalities |  | 315 |  |  |  |  | 26 |  |  |  |  | 15 |  |  |  |  | 326 |  |
Mortgage- and asset-backed securities |  | 248 |  |  |  |  | 29 |  |  |  |  | 0 |  |  |  |  | 277 |  |
Public utilities |  | 1,643 |  |  |  |  | 369 |  |  |  |  | 7 |  |  |  |  | 2,005 |  |
Sovereign and supranational |  | 1,428 |  |  |  |  | 190 |  |  |  |  | 3 |  |  |  |  | 1,615 |  |
Banks/financial institutions |  | 3,307 |  |  |  |  | 494 |  |  |  |  | 59 |  |  |  |  | 3,742 |  |
Other corporate |  | 3,811 |  |  |  |  | 771 |  |  |  |  | 25 |  |  |  |  | 4,557 |  |
Total yen-denominated |  | 37,779 |  |  |  |  | 5,151 |  |  |  |  | 532 |  |  |  |  | 42,398 |  |
U.S. dollar-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agencies |  | 150 |  |  |  |  | 12 |  |  |  |  | 0 |  |  |  |  | 162 |  |
Municipalities |  | 818 |  |  |  |  | 148 |  |  |  |  | 0 |  |  |  |  | 966 |  |
Mortgage- and asset-backed securities |  | 166 |  |  |  |  | 13 |  |  |  |  | 0 |  |  |  |  | 179 |  |
Public utilities |  | 5,231 |  |  |  |  | 813 |  |  |  |  | 34 |  |  |  |  | 6,010 |  |
Sovereign and supranational |  | 325 |  |  |  |  | 89 |  |  |  |  | 0 |  |  |  |  | 414 |  |
Banks/financial institutions |  | 2,683 |  |  |  |  | 592 |  |  |  |  | 7 |  |  |  |  | 3,268 |  |
Other corporate |  | 25,092 |  |  |  |  | 2,388 |  |  |  |  | 462 |  |  |  |  | 27,018 |  |
Total U.S. dollar-denominated |  | 34,465 |  |  |  |  | 4,055 |  |  |  |  | 503 |  |  |  |  | 38,017 |  |
Total fixed maturities |  | 72,244 |  |  |  |  | 9,206 |  |  |  |  | 1,035 |  |  |  |  | 80,415 |  |
Perpetual securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks/financial institutions |  | 1,308 |  |  |  |  | 277 |  |  |  |  | 32 |  |  |  |  | 1,553 |  |
Other corporate |  | 195 |  |  |  |  | 41 |  |  |  |  | 0 |  |  |  |  | 236 |  |
U.S. dollar-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks/financial institutions |  | 46 |  |  |  |  | 28 |  |  |  |  | 0 |  |  |  |  | 74 |  |
Total perpetual securities |  | 1,549 |  |  |  |  | 346 |  |  |  |  | 32 |  |  |  |  | 1,863 |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 555 |  |  |  |  | 95 |  |  |  |  | 2 |  |  |  |  | 648 |  |
U.S. dollar-denominated |  | 256 |  |  |  |  | 30 |  |  |  |  | 6 |  |  |  |  | 280 |  |
Total equity securities |  | 811 |  |  |  |  | 125 |  |  |  |  | 8 |  |  |  |  | 928 |  |
Total securities available for sale |  | $ | 74,604 |  |  |  |  | $ | 9,677 |  |  |  |  | $ | 1,075 |  |  |  |  | $ | 83,206 |  |
| September 30, 2017
(In millions) | Cost or Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities held to maturity, carried at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Japan government and agencies |  | $ | 21,385 |  |  |  |  | $ | 5,070 |  |  |  |  | $ | 0 |  |  |  |  | $ | 26,455 |  |
Municipalities |  | 359 |  |  |  |  | 104 |  |  |  |  | 0 |  |  |  |  | 463 |  |
Mortgage- and asset-backed securities |  | 27 |  |  |  |  | 2 |  |  |  |  | 0 |  |  |  |  | 29 |  |
Public utilities |  | 3,308 |  |  |  |  | 426 |  |  |  |  | 0 |  |  |  |  | 3,734 |  |
Sovereign and supranational |  | 1,527 |  |  |  |  | 319 |  |  |  |  | 0 |  |  |  |  | 1,846 |  |
Banks/financial institutions |  | 2,700 |  |  |  |  | 205 |  |  |  |  | 18 |  |  |  |  | 2,887 |  |
Other corporate |  | 2,692 |  |  |  |  | 493 |  |  |  |  | 0 |  |  |  |  | 3,185 |  |
Total yen-denominated |  | 31,998 |  |  |  |  | 6,619 |  |  |  |  | 18 |  |  |  |  | 38,599 |  |
Total securities held to maturity |  | $ | 31,998 |  |  |  |  | $ | 6,619 |  |  |  |  | $ | 18 |  |  |  |  | $ | 38,599 |  |
| December 31, 2016
(In millions) | Cost or Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities available for sale, carried at fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Japan government and agencies |  | $ | 22,857 |  |  |  |  | $ | 3,359 |  |  |  |  | $ | 160 |  |  |  |  | $ | 26,056 |  |
Municipalities |  | 246 |  |  |  |  | 29 |  |  |  |  | 8 |  |  |  |  | 267 |  |
Mortgage- and asset-backed securities |  | 1,096 |  |  |  |  | 33 |  |  |  |  | 8 |  |  |  |  | 1,121 |  |
Public utilities |  | 1,533 |  |  |  |  | 318 |  |  |  |  | 3 |  |  |  |  | 1,848 |  |
Sovereign and supranational |  | 862 |  |  |  |  | 186 |  |  |  |  | 5 |  |  |  |  | 1,043 |  |
Banks/financial institutions |  | 2,673 |  |  |  |  | 403 |  |  |  |  | 74 |  |  |  |  | 3,002 |  |
Other corporate |  | 3,192 |  |  |  |  | 623 |  |  |  |  | 3 |  |  |  |  | 3,812 |  |
Total yen-denominated |  | 32,459 |  |  |  |  | 4,951 |  |  |  |  | 261 |  |  |  |  | 37,149 |  |
U.S dollar-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agencies |  | 148 |  |  |  |  | 10 |  |  |  |  | 0 |  |  |  |  | 158 |  |
Municipalities |  | 894 |  |  |  |  | 142 |  |  |  |  | 8 |  |  |  |  | 1,028 |  |
Mortgage- and asset-backed securities |  | 196 |  |  |  |  | 20 |  |  |  |  | 0 |  |  |  |  | 216 |  |
Public utilities |  | 5,205 |  |  |  |  | 690 |  |  |  |  | 60 |  |  |  |  | 5,835 |  |
Sovereign and supranational |  | 335 |  |  |  |  | 91 |  |  |  |  | 0 |  |  |  |  | 426 |  |
Banks/financial institutions |  | 2,570 |  |  |  |  | 507 |  |  |  |  | 16 |  |  |  |  | 3,061 |  |
Other corporate |  | 24,556 |  |  |  |  | 2,021 |  |  |  |  | 690 |  |  |  |  | 25,887 |  |
Total U.S. dollar-denominated |  | 33,904 |  |  |  |  | 3,481 |  |  |  |  | 774 |  |  |  |  | 36,611 |  |
Total fixed maturities |  | 66,363 |  |  |  |  | 8,432 |  |  |  |  | 1,035 |  |  |  |  | 73,760 |  |
Perpetual securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks/financial institutions |  | 1,266 |  |  |  |  | 128 |  |  |  |  | 49 |  |  |  |  | 1,345 |  |
Other corporate |  | 189 |  |  |  |  | 24 |  |  |  |  | 0 |  |  |  |  | 213 |  |
U.S. dollar-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banks/financial institutions |  | 51 |  |  |  |  | 24 |  |  |  |  | 0 |  |  |  |  | 75 |  |
Total perpetual securities |  | 1,506 |  |  |  |  | 176 |  |  |  |  | 49 |  |  |  |  | 1,633 |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 624 |  |  |  |  | 83 |  |  |  |  | 2 |  |  |  |  | 705 |  |
U.S. dollar-denominated |  | 579 |  |  |  |  | 31 |  |  |  |  | 6 |  |  |  |  | 604 |  |
Total equity securities |  | 1,203 |  |  |  |  | 114 |  |  |  |  | 8 |  |  |  |  | 1,309 |  |
Total securities available for sale |  | $ | 69,072 |  |  |  |  | $ | 8,722 |  |  |  |  | $ | 1,092 |  |  |  |  | $ | 76,702 |  |
| December 31, 2016
(In millions) | Cost or Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities held to maturity, carried at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Japan government and agencies |  | $ | 20,702 |  |  |  |  | $ | 5,338 |  |  |  |  | $ | 0 |  |  |  |  | $ | 26,040 |  |
Municipalities |  | 350 |  |  |  |  | 107 |  |  |  |  | 0 |  |  |  |  | 457 |  |
Mortgage- and asset-backed securities |  | 30 |  |  |  |  | 2 |  |  |  |  | 0 |  |  |  |  | 32 |  |
Public utilities |  | 3,201 |  |  |  |  | 358 |  |  |  |  | 23 |  |  |  |  | 3,536 |  |
Sovereign and supranational |  | 2,602 |  |  |  |  | 283 |  |  |  |  | 8 |  |  |  |  | 2,877 |  |
Banks/financial institutions |  | 3,731 |  |  |  |  | 195 |  |  |  |  | 26 |  |  |  |  | 3,900 |  |
Other corporate |  | 2,734 |  |  |  |  | 452 |  |  |  |  | 7 |  |  |  |  | 3,179 |  |
Total yen-denominated |  | 33,350 |  |  |  |  | 6,735 |  |  |  |  | 64 |  |  |  |  | 40,021 |  |
Total securities held to maturity |  | $ | 33,350 |  |  |  |  | $ | 6,735 |  |  |  |  | $ | 64 |  |  |  |  | $ | 40,021 |  |
The methods of determining the fair values of the Company's investments in fixed-maturity securities, perpetual securities and equity securities are described in Note 5. During the third quarter of 2017, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category. During the second quarter of 2017, the Company reclassified three investments from the held-to-maturity category to the available-for-sale category as a result of the issuers' credit rating being downgraded to below investment grade. At the time of the transfer, the securities had an amortized cost of $773 million and an unrealized gain of $47 million. During the first quarter of 2017, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category. During the first nine months of 2016, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category. Contractual and Economic Maturities The contractual maturities of the Company's investments in fixed maturities at September 30, 2017, were as follows:
| Aflac Japan |  | Aflac U.S.
(In millions) | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 175 |  |  |  |  | $ | 181 |  |  |  |  | $ | 53 |  |  |  |  | $ | 54 |  |
Due after one year through five years |  | 5,734 |  |  |  |  | 6,029 |  |  |  |  | 637 |  |  |  |  | 682 |  |
Due after five years through 10 years |  | 9,078 |  |  |  |  | 9,668 |  |  |  |  | 3,253 |  |  |  |  | 3,529 |  |
Due after 10 years |  | 43,860 |  |  |  |  | 49,502 |  |  |  |  | 8,443 |  |  |  |  | 9,698 |  |
Mortgage- and asset-backed securities |  | 290 |  |  |  |  | 330 |  |  |  |  | 40 |  |  |  |  | 42 |  |
Total fixed maturities available for sale |  | $ | 59,137 |  |  |  |  | $ | 65,710 |  |  |  |  | $ | 12,426 |  |  |  |  | $ | 14,005 |  |
Held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 488 |  |  |  |  | $ | 497 |  |  |  |  | $ | 0 |  |  |  |  | $ | 0 |  |
Due after one year through five years |  | 923 |  |  |  |  | 970 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Due after five years through 10 years |  | 1,638 |  |  |  |  | 1,810 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Due after 10 years |  | 28,922 |  |  |  |  | 35,293 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Mortgage- and asset-backed securities |  | 27 |  |  |  |  | 29 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Total fixed maturities held to maturity |  | $ | 31,998 |  |  |  |  | $ | 38,599 |  |  |  |  | $ | 0 |  |  |  |  | $ | 0 |  |
At September 30, 2017, the Parent Company and other business segments had portfolios of available-for-sale fixed-maturity securities totaling $681 million at amortized cost and $700 million at fair value, which are not included in the table above. Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations with or without call or prepayment penalties. The majority of the Company's perpetual securities are subordinated to other debt obligations of the issuer, but rank higher than the issuer's equity securities. Perpetual securities have characteristics of both debt and equity investments, along with unique features that create economic maturity dates for the securities. Although perpetual securities have no contractual maturity date, they have stated interest coupons that were fixed at their issuance and subsequently change to a floating short-term interest rate after some period of time. The instruments are generally callable by the issuer at the time of changing from a fixed coupon rate to a new variable rate of interest, which is determined by the combination of some market index plus a fixed amount of basis points. The net effect is to create an expected maturity date for the instrument. The economic maturities of the Company's investments in perpetual securities, which were all reported as available for sale at September 30, 2017, were as follows:
| Aflac Japan |  | Aflac U.S.
(In millions) | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Due in one year or less |  | $ | 84 |  |  |  |  | $ | 85 |  |  |  |  | $ | 0 |  |  |  |  | $ | 0 |  |
Due after one year through five years |  | 194 |  |  |  |  | 236 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Due after 10 years |  | 1,232 |  |  |  |  | 1,482 |  |  |  |  | 39 |  |  |  |  | 60 |  |
Total perpetual securities available for sale |  | $ | 1,510 |  |  |  |  | $ | 1,803 |  |  |  |  | $ | 39 |  |  |  |  | $ | 60 |  |
Investment Concentrations The Company's process for investing in credit-related investments begins with an independent approach to underwriting each issuer's fundamental credit quality. The Company evaluates independently those factors that it believes could influence an issuer's ability to make payments under the contractual terms of the Company's instruments. This includes a thorough analysis of a variety of items including the issuer's country of domicile (including political, legal, and financial considerations); the industry in which the issuer competes (with an analysis of industry structure, end-market dynamics, and regulation); company specific issues (such as management, assets, earnings, cash generation, and capital needs); and contractual provisions of the instrument (such as financial covenants and position in the capital structure). The Company further evaluates the investment considering broad business and portfolio management objectives, including asset/liability needs, portfolio diversification, and expected income. Investment exposures that individually exceeded 10% of shareholders' equity were as follows:
| September 30, 2017 |  | December 31, 2016
(In millions) | Credit Rating |  | Amortized Cost |  | Fair Value |  | Credit Rating |  | Amortized Cost |  | Fair Value
Japan National Government(1) | A |  | $47,637 |  | $55,444 |  | A |  | $42,931 |  | $51,345
(1)Japan Government Bonds (JGBs) or JGB-backed securities Realized Investment Gains and Losses Information regarding pretax realized gains and losses from investments is as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30, |
(In millions) | 2017 |  | 2016 |  | 2017 |  | 2016 |
Realized investment gains (losses): |  |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |  |
Available for sale: |  |  |  |  |  |  |  |
Gross gains from sales | $ | 10 |  |  | $ | 2 |  |  | $ | 27 |  |  | $ | 10 |  |
Gross losses from sales | (8 | ) |  | (22 | ) |  | (38 | ) |  | (38 | ) |
Net gains (losses) from redemptions | 14 |  |  | 1 |  |  | (24 | ) |  | 88 |  |
Other-than-temporary impairment losses | (2 | ) |  | (1 | ) |  | (9 | ) |  | (23 | ) |
Total fixed maturities | 14 |  |  | (20 | ) |  | (44 | ) |  | 37 |  |
Perpetual securities: |  |  |  |  |  |  |  |
Available for sale: |  |  |  |  |  |  |  |
Net gains (losses) from redemptions | 0 |  |  | 0 |  |  | 4 |  |  | 40 |  |
Other-than-temporary impairment losses | 0 |  |  | 0 |  |  | 0 |  |  | (2 | ) |
Total perpetual securities | 0 |  |  | 0 |  |  | 4 |  |  | 38 |  |
Equity securities: |  |  |  |  |  |  |  |
Gross gains from sales | 54 |  |  | 5 |  |  | 102 |  |  | 10 |  |
Gross losses from sales | (9 | ) |  | 0 |  |  | (11 | ) |  | (10 | ) |
Other-than-temporary impairment losses | (6 | ) |  | (22 | ) |  | (18 | ) |  | (46 | ) |
Total equity securities | 39 |  |  | (17 | ) |  | 73 |  |  | (46 | ) |
Derivatives and other: |  |  |  |  |  |  |  |
Derivative gains (losses) | (40 | ) |  | (107 | ) |  | (143 | ) |  | (278 | ) |
Foreign currency gains (losses) | 17 |  |  | (20 | ) |  | (56 | ) |  | (109 | ) |
Total derivatives and other | (23 | ) |  | (127 | ) |  | (199 | ) |  | (387 | ) |
Total realized investment gains (losses) | $ | 30 |  |  | $ | (164 | ) |  | $ | (166 | ) |  | $ | (358 | ) |
Prior year foreign currency transaction gains and losses have been reclassified to conform to current-year reporting classifications Unrealized Investment Gains and Losses Effect on Shareholders’ Equity The net effect on shareholders’ equity of unrealized gains and losses from investment securities was as follows:
(In millions) | September 30, 2017 |  | December 31, 2016
Unrealized gains (losses) on securities available for sale |  | $ | 8,602 |  |  |  |  | $ | 7,630 |  |
Deferred income taxes |  | (3,165 | ) |  |  |  | (2,825 | ) |
Shareholders’ equity, unrealized gains (losses) on investment securities |  | $ | 5,437 |  |  |  |  | $ | 4,805 |  |
Gross Unrealized Loss Aging The following tables show the fair values and gross unrealized losses of the Company's available-for-sale and held-to-maturity investments that were in an unrealized loss position, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.
| September 30, 2017
| Total |  | Less than 12 months |  | 12 months or longer
(In millions) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Fixed Maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Japan government and agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | $ | 6,404 |  |  |  |  | $ | 423 |  |  |  |  | $ | 6,208 |  |  |  |  | $ | 399 |  |  |  |  | $ | 196 |  |  |  |  | $ | 24 |  |
Municipalities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 152 |  |  |  |  | 15 |  |  |  |  | 62 |  |  |  |  | 3 |  |  |  |  | 90 |  |  |  |  | 12 |  |
Public utilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 879 |  |  |  |  | 34 |  |  |  |  | 252 |  |  |  |  | 4 |  |  |  |  | 627 |  |  |  |  | 30 |  |
Yen-denominated |  | 95 |  |  |  |  | 7 |  |  |  |  | 69 |  |  |  |  | 6 |  |  |  |  | 26 |  |  |  |  | 1 |  |
Sovereign and supranational: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 352 |  |  |  |  | 3 |  |  |  |  | 352 |  |  |  |  | 3 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Banks/financial institutions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 188 |  |  |  |  | 7 |  |  |  |  | 145 |  |  |  |  | 3 |  |  |  |  | 43 |  |  |  |  | 4 |  |
Yen-denominated |  | 1,616 |  |  |  |  | 77 |  |  |  |  | 637 |  |  |  |  | 29 |  |  |  |  | 979 |  |  |  |  | 48 |  |
Other corporate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 7,886 |  |  |  |  | 462 |  |  |  |  | 2,803 |  |  |  |  | 52 |  |  |  |  | 5,083 |  |  |  |  | 410 |  |
Yen-denominated |  | 424 |  |  |  |  | 25 |  |  |  |  | 386 |  |  |  |  | 24 |  |  |  |  | 38 |  |  |  |  | 1 |  |
Total fixed maturities |  | 17,996 |  |  |  |  | 1,053 |  |  |  |  | 10,914 |  |  |  |  | 523 |  |  |  |  | 7,082 |  |  |  |  | 530 |  |
Perpetual securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 340 |  |  |  |  | 32 |  |  |  |  | 0 |  |  |  |  | 0 |  |  |  |  | 340 |  |  |  |  | 32 |  |
Total perpetual securities |  | 340 |  |  |  |  | 32 |  |  |  |  | 0 |  |  |  |  | 0 |  |  |  |  | 340 |  |  |  |  | 32 |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 58 |  |  |  |  | 6 |  |  |  |  | 50 |  |  |  |  | 5 |  |  |  |  | 8 |  |  |  |  | 1 |  |
Yen-denominated |  | 72 |  |  |  |  | 2 |  |  |  |  | 67 |  |  |  |  | 1 |  |  |  |  | 5 |  |  |  |  | 1 |  |
Total equity securities |  | 130 |  |  |  |  | 8 |  |  |  |  | 117 |  |  |  |  | 6 |  |  |  |  | 13 |  |  |  |  | 2 |  |
Total |  | $ | 18,466 |  |  |  |  | $ | 1,093 |  |  |  |  | $ | 11,031 |  |  |  |  | $ | 529 |  |  |  |  | $ | 7,435 |  |  |  |  | $ | 564 |  |
| December 31, 2016
| Total |  | Less than 12 months |  | 12 months or longer
(In millions) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Fixed Maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Japan government and agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | $ | 3,958 |  |  |  |  | $ | 160 |  |  |  |  | $ | 3,958 |  |  |  |  | $ | 160 |  |  |  |  | $ | 0 |  |  |  |  | $ | 0 |  |
Municipalities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 44 |  |  |  |  | 8 |  |  |  |  | 0 |  |  |  |  | 0 |  |  |  |  | 44 |  |  |  |  | 8 |  |
Yen-denominated |  | 105 |  |  |  |  | 8 |  |  |  |  | 105 |  |  |  |  | 8 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Mortgage- and asset- backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 713 |  |  |  |  | 8 |  |  |  |  | 713 |  |  |  |  | 8 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Public utilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 1,265 |  |  |  |  | 60 |  |  |  |  | 790 |  |  |  |  | 32 |  |  |  |  | 475 |  |  |  |  | 28 |  |
Yen-denominated |  | 635 |  |  |  |  | 26 |  |  |  |  | 347 |  |  |  |  | 14 |  |  |  |  | 288 |  |  |  |  | 12 |  |
Sovereign and supranational: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 244 |  |  |  |  | 13 |  |  |  |  | 38 |  |  |  |  | 5 |  |  |  |  | 206 |  |  |  |  | 8 |  |
Banks/financial institutions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 268 |  |  |  |  | 16 |  |  |  |  | 238 |  |  |  |  | 10 |  |  |  |  | 30 |  |  |  |  | 6 |  |
Yen-denominated |  | 1,521 |  |  |  |  | 100 |  |  |  |  | 636 |  |  |  |  | 19 |  |  |  |  | 885 |  |  |  |  | 81 |  |
Other corporate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 10,462 |  |  |  |  | 690 |  |  |  |  | 7,252 |  |  |  |  | 346 |  |  |  |  | 3,210 |  |  |  |  | 344 |  |
Yen-denominated |  | 321 |  |  |  |  | 10 |  |  |  |  | 321 |  |  |  |  | 10 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Total fixed maturities |  | 19,536 |  |  |  |  | 1,099 |  |  |  |  | 14,398 |  |  |  |  | 612 |  |  |  |  | 5,138 |  |  |  |  | 487 |  |
Perpetual securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 479 |  |  |  |  | 49 |  |  |  |  | 85 |  |  |  |  | 1 |  |  |  |  | 394 |  |  |  |  | 48 |  |
Total perpetual securities |  | 479 |  |  |  |  | 49 |  |  |  |  | 85 |  |  |  |  | 1 |  |  |  |  | 394 |  |  |  |  | 48 |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 211 |  |  |  |  | 6 |  |  |  |  | 211 |  |  |  |  | 6 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Yen-denominated |  | 49 |  |  |  |  | 2 |  |  |  |  | 49 |  |  |  |  | 2 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Total equity securities |  | 260 |  |  |  |  | 8 |  |  |  |  | 260 |  |  |  |  | 8 |  |  |  |  | 0 |  |  |  |  | 0 |  |
Total |  | $ | 20,275 |  |  |  |  | $ | 1,156 |  |  |  |  | $ | 14,743 |  |  |  |  | $ | 621 |  |  |  |  | $ | 5,532 |  |  |  |  | $ | 535 |  |
Analysis of Securities in Unrealized Loss Positions The unrealized losses on the Company's fixed maturity or perpetual securities investments have been primarily related to general market changes in interest rates, foreign exchange rates, and/or the levels of credit spreads rather than specific concerns with the issuer's ability to pay interest and repay principal. The unrealized losses on the Company's investments in equity securities are primarily related to foreign exchange rates, general market conditions which reflect prospects for the economy as a whole, or specific information pertaining to an industry or an individual company. For any significant declines in fair value of its fixed income or perpetual securities, the Company performs a more focused review of the related issuers' credit profile. For corporate issuers, the Company evaluates their assets, business profile including industry dynamics and competitive positioning, financial statements and other available financial data. For non-corporate issuers, the Company analyzes all sources of credit support, including issuer-specific factors. The Company utilizes information available in the public domain and, for certain private placement issuers, from consultations with the issuers directly. The Company also considers ratings from Nationally Recognized Statistical Rating Organizations (NRSROs), as well as the specific characteristics of the security it owns including seniority in the issuer's capital structure, covenant predictions, or other relevant features. From these reviews, the Company evaluates the issuers' continued ability to service the Company's investment through payment of interest and principal. For any significant declines in fair value of its equity securities, the Company reviews the severity of the security’s decline in fair value coupled with the length of time the fair value of the security has been below cost. The Company also performs a more focused review of the financial condition and near-term prospects of the issuer as well as general market conditions reflecting the prospects for the economy as a whole, and determines whether it has the intent to hold the securities until they recover in value. Assuming no credit-related factors develop, unrealized gains and losses on fixed maturities and perpetual securities are expected to diminish as investments near maturity. Based on its credit analysis, the Company believes that the issuers of its fixed maturity and perpetual security investments in the sectors shown in the table above have the ability to service their obligations to the Company. Other Investments The table below reflects the composition of the carrying value for other investments as of the periods presented.
(In millions) | September 30, 2017 |  | December 31, 2016
Other investments: |  |  |  |  |  |  |
Commercial mortgage loans |  | $ | 1,199 |  |  |  |  | $ | 855 |  |
Middle market loans |  | 798 |  |  |  |  | 319 |  |
Policy loans |  | 207 |  |  |  |  | 184 |  |
Short-term investments |  | 57 |  |  |  |  | 89 |  |
Other |  | 97 |  |  |  |  | 3 |  |
Total other investments |  | $ | 2,358 |  |  |  |  | $ | 1,450 |  |
Loans and Loan Receivables The Company classifies its commercial mortgage loans (CMLs) and middle market loans (MMLs) as held-for-investment and includes them in the other investments line on the consolidated balance sheets. The Company carries them on the balance sheet at amortized cost less an estimated allowance for loan losses. The Company's allowance for loan losses is established using both general and specific allowances. The general allowance is used for loans grouped by similar risk characteristics where a loan-specific or market-specific risk has not been identified, but for which the Company estimates probable incurred losses. The specific allowance is used on an individual loan basis when it is probable that a loss has been incurred. As of September 30, 2017, and December 31, 2016, the Company's allowance for loan losses was $8 million and $3 million, respectively. As of September 30, 2017, and December 31, 2016, the Company had no loans that were past due in regards to principal and/or interest payments. Additionally, the Company held no loans that were on nonaccrual status or considered impaired as of September 30, 2017, and December 31, 2016. The Company had no troubled debt restructurings during the nine months ended September 30, 2017 and 2016. Commercial Mortgage Loans Commercial mortgage loans include transitional real estate (TRE) loans. As of September 30, 2017, the Company had $103 million in outstanding commitments to fund commercial mortgage loans, inclusive of loans held in unit trust structures. These commitments are contingent on the final underwriting and due diligence to be performed. Middle Market Loans Middle market loans are generally considered to be below investment grade. The carrying value for middle market loans included an unfunded amount of $133 million and $91 million, as of September 30, 2017, and December 31, 2016, respectively, that is reflected in other liabilities on the consolidated balance sheets. As of September 30, 2017, the Company had commitments of approximately $530 million to fund potential future loan originations related to this investment program, inclusive of loans held in unit trust structures. These commitments are contingent upon the availability of middle market loans that meet the Company's underwriting criteria. Other Other investments primarily includes investments in limited partnerships. As of September 30, 2017, the Company had $365 million in outstanding commitments to fund alternative investments in limited partnerships. Variable Interest Entities (VIEs) As a condition of its involvement or investment in a VIE, the Company enters into certain protective rights and covenants that preclude changes in the structure of the VIE that would alter the creditworthiness of the Company's investment or its beneficial interest in the VIE. For those VIEs other than certain unit trust structures, the Company's involvement is passive in nature. The Company has not, nor has it been, required to purchase any securities issued in the future by these VIEs. The Company's ownership interest in VIEs is limited to holding the obligations issued by them. The Company has no direct or contingent obligations to fund the limited activities of these VIEs, nor does it have any direct or indirect financial guarantees related to the limited activities of these VIEs. The Company has not provided any assistance or any other type of financing support to any of the VIEs it invests in, nor does it have any intention to do so in the future. For those VIEs in which the Company holds debt obligations, the weighted-average lives of the Company's notes are very similar to the underlying collateral held by these VIEs where applicable. The Company also utilizes unit trust structures in its Aflac Japan segment to invest in various asset classes. As the sole investor of these VIEs, the Company is required to consolidate these entities under U.S. GAAP. The Company's risk of loss related to its interests in any of its VIEs is limited to the carrying value of the related investments held in the VIE. VIEs - Consolidated The following table presents the cost or amortized cost, fair value and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. Investments in Consolidated Variable Interest Entities
| September 30, 2017 |  | December 31, 2016
(In millions) | Cost or Amortized Cost |  | Fair Value |  | Cost or Amortized Cost |  | Fair Value
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities, available for sale |  | $ | 4,274 |  |  |  |  | $ | 5,224 |  |  |  |  | $ | 4,168 |  |  |  |  | $ | 4,982 |  |
Perpetual securities, available for sale |  | 239 |  |  |  |  | 211 |  |  |  |  | 237 |  |  |  |  | 208 |  |
Equity securities |  | 595 |  |  |  |  | 690 |  |  |  |  | 972 |  |  |  |  | 1,044 |  |
Other investments (1) |  | 1,500 |  |  |  |  | 1,491 |  |  |  |  | 819 |  |  |  |  | 789 |  |
Other assets (2) |  | 148 |  |  |  |  | 148 |  |  |  |  | 127 |  |  |  |  | 127 |  |
Total assets of consolidated VIEs |  | $ | 6,756 |  |  |  |  | $ | 7,764 |  |  |  |  | $ | 6,323 |  |  |  |  | $ | 7,150 |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other liabilities (2) |  | $ | 132 |  |  |  |  | $ | 132 |  |  |  |  | $ | 146 |  |  |  |  | $ | 146 |  |
Total liabilities of consolidated VIEs |  | $ | 132 |  |  |  |  | $ | 132 |  |  |  |  | $ | 146 |  |  |  |  | $ | 146 |  |
(1) Consists of CMLs, MMLs, and alternative investments in limited partnerships (2) Consists entirely of derivatives The Company is substantively the only investor in the consolidated VIEs listed in the table above. As the sole investor in these VIEs, the Company has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and is therefore considered to be the primary beneficiary of the VIEs that it consolidates. The Company also participates in substantially all of the variability created by these VIEs. The activities of these VIEs are limited to holding invested assets and foreign currency, and/or credit default swaps (CDS), as appropriate, and utilizing the cash flows from these securities to service its investment. Neither the Company nor any of its creditors are able to obtain the underlying collateral of the VIEs unless there is an event of default or other specified event. For those VIEs that contain a swap, the Company is not a direct counterparty to the swap contracts and has no control over them. The Company's loss exposure to these VIEs is limited to its original investment. The Company's consolidated VIEs do not rely on outside or ongoing sources of funding to support their activities beyond the underlying collateral and swap contracts, if applicable. With the exception of its investment in unit trust structures, the underlying collateral assets and funding of the Company's consolidated VIEs are generally static in nature and the underlying collateral and the reference corporate entities covered by any CDS contracts were all investment grade at the time of issuance. Investments in Unit Trust Structures The Company invests through unit trust structures in yen-denominated public equity securities, U.S. dollar-denominated public equity securities, bank loans, commercial mortgage loans, infrastructure debt, middle market loans, and alternative investments in limited partnerships. The Company is the only investor in these trusts and meets the requirements to consolidate these trusts under U.S. GAAP. The yen-denominated and U.S. dollar-denominated equity securities, bank loans and certain infrastructure debt are classified as available for sale in the financial statements. The commercial mortgage loans, middle market loans and certain infrastructure debt that meets the criteria to be classified as a loan are classified as loans held for investment and reflected in other investments on the consolidated balance sheets at amortized cost. Limited partnership investments are recognized as equity method investments. VIEs-Not Consolidated The table below reflects the amortized cost, fair value and balance sheet caption in which the Company's investment in VIEs not consolidated are reported. Investments in Variable Interest Entities Not Consolidated
| September 30, 2017 |  | December 31, 2016
(In millions) | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities, available for sale |  | $ | 4,766 |  |  |  |  | $ | 5,439 |  |  |  |  | $ | 4,729 |  |  |  |  | $ | 5,261 |  |
Perpetual securities, available for sale |  | 177 |  |  |  |  | 220 |  |  |  |  | 172 |  |  |  |  | 200 |  |
Fixed maturities, held to maturity |  | 2,645 |  |  |  |  | 3,047 |  |  |  |  | 2,563 |  |  |  |  | 2,948 |  |
Other investments |  | 50 |  |  |  |  | 50 |  |  |  |  | 1 |  |  |  |  | 1 |  |
Total investments in VIEs not consolidated |  | $ | 7,638 |  |  |  |  | $ | 8,756 |  |  |  |  | $ | 7,465 |  |  |  |  | $ | 8,410 |  |
The Company holds alternative investments in limited partnerships that have been determined to be VIEs. These partnerships invest in private equity and structured investments. The Company’s maximum exposure to loss on these investments is limited to the amount of its investment. The Company is not the primary beneficiary of these VIEs and is therefore not required to consolidate them. The Company classifies these investments as Other investments in the consolidated balance sheets. Certain investments in VIEs that the Company is not required to consolidate are investments that are in the form of debt obligations from the VIEs that are irrevocably and unconditionally guaranteed by their corporate parents or sponsors. These VIEs are the primary financing vehicles used by their corporate sponsors to raise financing in the capital markets. The variable interests created by these VIEs are principally or solely a result of the debt instruments issued by them. The Company does not have the power to direct the activities that most significantly impact the entity's economic performance, nor does it have the obligation to absorb losses of the entity or the right to receive benefits from the entity. As such, the Company is not the primary beneficiary of these VIEs and is therefore not required to consolidate them. Securities Lending and Pledged Securities The Company lends fixed-maturity and public equity securities to financial institutions in short-term security-lending transactions. These short-term security-lending arrangements increase investment income with minimal risk. The Company's security lending policy requires that the fair value of the securities and/or unrestricted cash received as collateral be 102% or more of the fair value of the loaned securities. These securities continue to be carried as investment assets on the Company's balance sheet during the terms of the loans and are not reported as sales. The Company receives cash or other securities as collateral for such loans. For loans involving unrestricted cash or securities as collateral, the collateral is reported as an asset with a corresponding liability for the return of the collateral. Details of the Company's securities lending activities were as follows:
Securities Lending Transactions Accounted for as Secured Borrowings
September 30, 2017
Remaining Contractual Maturity of the Agreements
(In millions) | Overnight and Continuous(1) |  | Up to 30 days |  |  | Total
Securities lending transactions: |  |  |  |  |  |
Public utilities | $ | 37 |  |  | $ | 0 |  |  |  | $ | 37 |
Banks/financial institutions | 37 |  |  | 0 |  |  |  | 37 |
Other corporate | 434 |  |  | 0 |  |  |  | 434 |
Equity securities | 14 |  |  | 0 |  |  |  | 14 |
Total borrowings | $ | 522 |  |  | $ | 0 |  |  |  | $ | 522 |
Gross amount of recognized liabilities for securities lending transactions |  | $ | 522 |
Amounts related to agreements not included in offsetting disclosure in Note 4 |  | $ | 0 |
(1) These securities are pledged as collateral under the Company's U.S. securities lending program and can be called at its discretion; therefore, they are classified as Overnight and Continuous.
Securities Lending Transactions Accounted for as Secured Borrowings
December 31, 2016
Remaining Contractual Maturity of the Agreements
(In millions) | Overnight and Continuous(1) |  | Up to 30 days |  |  | Total
Securities lending transactions: |  |  |  |  |  |
Public utilities | $ | 62 |  |  | $ | 0 |  |  |  | $ | 62 |
Banks/financial institutions | 34 |  |  | 0 |  |  |  | 34 |
Other corporate | 430 |  |  | 0 |  |  |  | 430 |
Total borrowings | $ | 526 |  |  | $ | 0 |  |  |  | $ | 526 |
Gross amount of recognized liabilities for securities lending transactions |  | $ | 526 |
Amounts related to agreements not included in offsetting disclosure in Note 4 |  | $ | 0 |
(1) These securities are pledged as collateral under the Company's U.S. securities lending program and can be called at its discretion; therefore, they are classified as Overnight and Continuous. The Company did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of September 30, 2017, and December 31, 2016, respectively. Certain fixed-maturity securities can be pledged as collateral as part of derivative transactions, or pledged to support state deposit requirements or certain investment programs. For additional information regarding pledged securities related to derivative transactions, see Note 4.

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- Definition The entire disclosure for investments, including all tables. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Article 6 -Section 10 -Paragraph (c) -Subparagraph (1) + Details
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