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Debt Level 1 (Notes) | 12 Months Ended
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Dec. 31, 2015
Debt Disclosure [Abstract] |
Debt | Company’s long-term debt securities are issued by either HFSG Holding Company or HLI, and are unsecured obligations of HFSG Holding Company or HLI, and rank on a parity with all other unsecured and unsubordinated indebtedness of HFSG Holding Company or HLI. Debt is carried net of discount. Short-term and long-term debt by issuance are as follows:
| As of December 31,
| 2015 | 2014
Revolving Credit Facilities | $ | — |  | $ | — |
Senior Notes and Debentures |  |  |  |
4.0% Notes, due 2015 | — |  | 289 |
7.3% Notes, due 2015 | — |  | 167 |
5.5% Notes, due 2016 | 275 |  | 275 |
5.375% Notes, due 2017 | 416 |  | 415 |
4.0% Notes, due 2017 | — |  | 295 |
6.3% Notes, due 2018 | 320 |  | 320 |
6.0% Notes, due 2019 | 413 |  | 413 |
5.5% Notes, due 2020 | 499 |  | 499 |
5.125% Notes, due 2022 | 797 |  | 797 |
7.65% Notes, due 2027 | 80 |  | 80 |
7.375% Notes, due 2031 | 63 |  | 63 |
5.95% Notes, due 2036 | 299 |  | 299 |
6.625% Notes, due 2040 | 295 |  | 295 |
6.1% Notes, due 2041 | 326 |  | 326 |
6.625% Notes, due 2042 | 178 |  | 178 |
4.3% Notes, due 2043 | 298 |  | 298 |
Junior Subordinated Debentures |  |  |  |
7.875% Notes, due 2042 | 600 |  | 600 |
8.125% Notes, due 2068 | 500 |  | 500 |
Total Notes and Debentures | 5,359 |  | 6,109 |
Less: Current maturities | 275 |  | 456 |
Long-Term Debt | 5,084 |  | 5,653 |
Total Debt | $ | 5,359 |  | $ | 6,109 |
The effective interest rate on the 6.1% senior notes due 2041 is 7.9%. The effective interest rate on the remaining notes does not differ materially from the stated rate. The Company incurred interest expense of $357, $376 and $397 on long-term debt for the years ended December 31, 2015, 2014 and 2013, respectively. Collateralized Advances Hartford Life Insurance Company (“HLIC”), an indirect wholly owned subsidiary, is a member of the Federal Home Loan Bank of Boston (“FHLBB”). Membership allows HLIC access to collateralized advances, which may be used to support various spread-based businesses and enhance liquidity management. FHLBB membership requires the company to own member stock and advances require the purchase of activity stock. The amount of advances that can be taken are dependent on the asset types pledged to secure the advances. The Connecticut Department of Insurance (“CTDOI”) will permit HLIC to pledge up to $1.2 billion in qualifying assets to secure FHLBB advances for 2016. The pledge limit is recalculated annually based on statutory admitted assets and capital and surplus. HLIC would need to seek the prior approval of the CTDOI in order to exceed these limits. As of December 31, 2015, HLIC had no advances outstanding under the FHLBB facility. Senior Notes On March 30, 2015, the Company repaid its $289, 4.0% senior notes at maturity. On May 27, 2015, the Company redeemed for cash the entire $296 aggregate principal amount outstanding of 4.0% senior notes due October 15, 2017 for $317 including a make-whole premium. On November 2, 2015, the Company repaid its $167, 7.3% senior notes at maturity. The Company funded the maturities of the 4.0% and 7.3% senior notes along with the redemption of the 4.0% senior notes with cash on hand. Junior Subordinated Debentures
Issue | Face Value | Interest Rate [1] | Call Date | Interest Rate Subsequent to Call Date [2] | Final Maturity
7.875% Debentures | $ | 600 |  | 7.875 | % | [2] | April 15, 2022 | 3 Month LIBOR + 5.596% | April 15, 2042
8.125% Debentures [3] | $ | 500 |  | 8.125 | % | [4] | June 15, 2018 | 3 Month LIBOR + 4.6025% | June 15, 2068
[1] | Interest rate in effect until call date.
[2] | Payable quarterly in arrears.
[3] | The 8.125% debentures have a scheduled maturity date of June 15, 2038. The Company is required to use reasonable efforts to sell certain qualifying replacement securities in order to repay the debentures at the scheduled maturity date.
[4] | Payable semi-annually in arrears.
The debentures are unsecured, subordinated and junior in right of payment and upon liquidation to all of the Company’s existing and future senior indebtedness. In addition, the debentures are effectively subordinated to all of the Company’s subsidiaries’ existing and future indebtedness and other liabilities, including obligations to policyholders. The debentures do not limit the Company’s or the Company’s subsidiaries’ ability to incur additional debt, including debt that ranks senior in right of payment and upon liquidation to the debentures. The Company has the right to defer interest payments for up to ten consecutive years without giving rise to an event of default. Deferred interest will continue to accrue and will accrue additional interest at the then applicable interest rate. If the Company defers interest payments, the Company generally may not make payments on or redeem or purchase any shares of its capital stock or any of its debt securities or guarantees that rank upon liquidation, dissolution or winding up equally with or junior to the debentures, subject to certain limited exceptions. If the Company defers interest on the 8.125% debentures for five consecutive years or, if earlier, pays current interest during a deferral period, the Company will be required to pay deferred interest from proceeds from the sale of certain qualifying securities. The 7.875% and 8.125% debentures may be redeemed in whole prior to the call date upon certain tax or rating agency events, at a price equal to the greater of 100% of the principal amount being redeemed and the applicable make-whole amount plus any accrued and unpaid interest. The Company may elect to redeem the 8.125% debentures in whole or part at its option prior to the call date at a price equal to the greater of 100% of the principal amount being redeemed and the applicable make-whole amount plus any accrued and unpaid interest. The Company may elect to redeem the 7.875% and 8.125% debentures in whole or in part on or after the call date for the principal amount being redeemed plus accrued and unpaid interest to the date of redemption. In connection with the offering of the 8.125% debentures, the Company entered into a replacement capital covenant ("RCC") for the benefit of holders of one or more designated series of the Company's indebtedness, initially the Company’s 6.1% notes due 2041. Under the terms of the RCC, if the Company redeems the 8.125% debentures at any time prior to June 15, 2048 it can only do so with the proceeds from the sale of certain qualifying replacement securities. Long-Term Debt Maturities Long-term debt maturities (at par values), as of December 31, 2015 are summarized as follows:
2016 | $ | 275 |
2017 | 416 |
2018 | 320 |
2019 | 413 |
2020 | 500 |
Thereafter | 3,525 |
Shelf Registrations On August 9, 2013, the Company filed with the Securities and Exchange Commission (the “SEC”) an automatic shelf registration statement (Registration No. 333-190506) for the potential offering and sale of debt and equity securities. The registration statement allows for the following types of securities to be offered: debt securities, junior subordinated debt securities, preferred stock, common stock, depositary shares, warrants, stock purchase contracts, and stock purchase units. In that The Hartford is a well-known seasoned issuer, as defined in Rule 405 under the Securities Act of 1933, the registration statement went effective immediately upon filing and The Hartford may offer and sell an unlimited amount of securities under the registration statement during the three-year life of the registration statement. Contingent Capital Facility The Company is party to a put option agreement that provides The Hartford with the right to require the Glen Meadow ABC Trust, a Delaware statutory trust, at any time and from time to time, to purchase The Hartford’s junior subordinated notes in a maximum aggregate principal amount not to exceed $500. Under the Put Option Agreement, The Hartford pays the Glen Meadow ABC Trust premiums on a periodic basis, calculated with respect to the aggregate principal amount of notes that The Hartford had the right to put to the Glen Meadow ABC Trust for such period. The Hartford has agreed to reimburse the Glen Meadow ABC Trust for certain fees and ordinary expenses. The Company holds a variable interest in the Glen Meadow ABC Trust where the Company is not the primary beneficiary. As a result, the Company did not consolidate the Glen Meadow ABC Trust. As of December 31, 2015, The Hartford has not exercised its right to require Glen Meadow ABC Trust to purchase the notes. As a result, the notes remain a source of capital for the HFSG Holding Company. Revolving Credit Facilities The Company has a senior unsecured five-year revolving credit facility (the “Credit Facility”) that provides for borrowing capacity up to$1.0 billion of unsecured credit through October 31, 2019 available in U.S. dollars, Euro, Sterling, Canadian dollars and Japanese Yen. As of December 31, 2015, no borrowings were outstanding under the Credit Facility. As of December 31, 2015, the Company was in compliance with all financial covenants within the Credit Facility. Commercial Paper The Hartford’s maximum borrowings available under its commercial paper program are $1.0 billion. The Company is dependent upon market conditions to access short-term financing through the issuance of commercial paper to investors. As of December 31, 2015, there was no commercial paper outstanding.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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