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Fair Value of Financial Instruments (Tables) | 3 Months Ended
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Mar. 31, 2023
Fair Value Disclosures [Abstract] |
Carrying Amount and Estimated Fair Value of Assets and Liabilities on Recurring Basis | The carrying amounts and estimated fair values of our financial instruments for which the disclosure of fair values is required, including financial assets and liabilities measured and carried at fair value on a recurring basis, with the exception of investment contracts, portions of other long-term investments and debt, which are disclosed later within this footnote, was summarized according to the hierarchy previously described, as follows:
| March 31, 2023
| Level 1 |  | Level 2 |  | Level 3 |  | NAV |  | Fair Value |  |
Assets | (In millions) |  |
Cash and cash equivalents | $ | 2,821 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,821 |  |  |
Fixed maturity securities, available-for-sale: |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities | — |  |  | 5,592 |  |  | 6,300 |  |  | — |  |  | 11,892 |  |  |
Commercial mortgage-backed securities | — |  |  | 3,686 |  |  | 29 |  |  | — |  |  | 3,715 |  |  |
Corporates | 25 |  |  | 14,262 |  |  | 1,544 |  |  | — |  |  | 15,831 |  |  |
Hybrids | 97 |  |  | 683 |  |  | — |  |  | — |  |  | 780 |  |  |
Municipals | — |  |  | 1,597 |  |  | 32 |  |  | — |  |  | 1,629 |  |  |
Residential mortgage-backed securities | — |  |  | 1,657 |  |  | 12 |  |  | — |  |  | 1,669 |  |  |
U.S. Government | 318 |  |  | 11 |  |  | — |  |  | — |  |  | 329 |  |  |
Foreign Governments | — |  |  | 249 |  |  | 16 |  |  | — |  |  | 265 |  |  |
Short term investments | 1,315 |  |  | 8 |  |  | 23 |  |  | — |  |  | 1,346 |  |  |
Preferred securities | 285 |  |  | 565 |  |  | 1 |  |  | — |  |  | 851 |  |  |
Equity securities | 681 |  |  | — |  |  | 11 |  |  | 42 |  |  | 734 |  |  |
Derivative investments | — |  |  | 432 |  |  | — |  |  | — |  |  | 432 |  |  |
Investment in unconsolidated affiliates | — |  |  | — |  |  | 107 |  |  | — |  |  | 107 |  |  |
Reinsurance related embedded derivative, included in other assets | — |  |  | 260 |  |  | — |  |  | — |  |  | 260 |  |  |
Market risk benefits asset | — |  |  | — |  |  | 106 |  |  | — |  |  | 106 |  |  |
Other long-term investments | — |  |  | — |  |  | 48 |  |  | — |  |  | 48 |  |  |
Total financial assets at fair value | $ | 5,542 |  |  | $ | 29,002 |  |  | $ | 8,229 |  |  | $ | 42 |  |  | $ | 42,815 |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |  |  |  |  |
FIA/ IUL embedded derivatives, included in contractholder funds | — |  |  | — |  |  | 3,569 |  |  | — |  |  | 3,569 |  |  |
Market risk benefits liability | $ | — |  |  | $ | — |  |  | $ | 324 |  |  | $ | — |  |  | $ | 324 |  |  |
Total financial liabilities at fair value | $ | — |  |  | $ | — |  |  | $ | 3,893 |  |  | $ | — |  |  | $ | 3,893 |  |  |
| December 31, 2022
| Level 1 |  | Level 2 |  | Level 3 |  | NAV |  | Fair Value |  |
Assets | (In millions) |  |
Cash and cash equivalents | $ | 2,286 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,286 |  |  |
Fixed maturity securities, available-for-sale: |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities | — |  |  | 5,204 |  |  | 6,263 |  |  | — |  |  | 11,467 |  |  |
Commercial mortgage-backed securities | — |  |  | 3,026 |  |  | 37 |  |  | — |  |  | 3,063 |  |  |
Corporates | 40 |  |  | 12,857 |  |  | 1,440 |  |  | — |  |  | 14,337 |  |  |
Hybrids | 93 |  |  | 638 |  |  | — |  |  | — |  |  | 731 |  |  |
Municipals | — |  |  | 1,431 |  |  | 29 |  |  | — |  |  | 1,460 |  |  |
Residential mortgage-backed securities | — |  |  | 1,225 |  |  | 302 |  |  | — |  |  | 1,527 |  |  |
U.S. Government | 260 |  |  | 11 |  |  | — |  |  | — |  |  | 271 |  |  |
Foreign Governments | — |  |  | 223 |  |  | 16 |  |  | — |  |  | 239 |  |  |
Short term investments | 2,590 |  |  | — |  |  | — |  |  | — |  |  | 2,590 |  |  |
Preferred securities | 320 |  |  | 582 |  |  | 1 |  |  | — |  |  | 903 |  |  |
Equity securities | 621 |  |  | — |  |  | 10 |  |  | 47 |  |  | 678 |  |  |
Derivative investments | — |  |  | 244 |  |  | — |  |  | — |  |  | 244 |  |  |
Investment in unconsolidated affiliates | — |  |  | — |  |  | 23 |  |  | — |  |  | 23 |  |  |
Reinsurance related embedded derivative, included in other assets | — |  |  | 279 |  |  | — |  |  | — |  |  | 279 |  |  |
Market risk benefits asset | — |  |  | — |  |  | 117 |  |  | — |  |  | 117 |  |  |
Other long-term investments | — |  |  | — |  |  | 48 |  |  | — |  |  | 48 |  |  |
Total financial assets at fair value | $ | 6,210 |  |  | $ | 25,720 |  |  | $ | 8,286 |  |  | $ | 47 |  |  | $ | 40,263 |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |  |  |  |  |
FIA/ IUL embedded derivatives, included in contractholder funds | — |  |  | — |  |  | 3,115 |  |  | — |  |  | 3,115 |  |  |
Market risk benefits liability | — |  |  | — |  |  | 282 |  |  | — |  |  | 282 |  |  |
Total financial liabilities at fair value | $ | — |  |  | $ | — |  |  | $ | 3,397 |  |  | $ | — |  |  | $ | 3,397 |  |  |
The following tables provide the carrying value and estimated fair value of our financial instruments that are carried on the unaudited Condensed Consolidated Balance Sheets at amounts other than fair value, summarized according to the fair value hierarchy previously described.
| March 31, 2023
| Level 1 |  | Level 2 |  | Level 3 |  | NAV |  | Total Estimated Fair Value |  | Carrying Amount
Assets | (In millions)
FHLB common stock | $ | — |  |  | $ | 106 |  |  | $ | — |  |  | $ | — |  |  | $ | 106 |  |  | $ | 106 |
Commercial mortgage loans | — |  |  | — |  |  | 2,178 |  |  | — |  |  | 2,178 |  |  | 2,458 |
Residential mortgage loans | — |  |  | — |  |  | 2,323 |  |  | — |  |  | 2,323 |  |  | 2,526 |
Investments in unconsolidated affiliates | — |  |  | — |  |  | 4 |  |  | 2,558 |  |  | 2,562 |  |  | 2,562 |
Policy loans | — |  |  | — |  |  | 55 |  |  | — |  |  | 55 |  |  | 55 |
Other invested assets | 91 |  |  | — |  |  | 11 |  |  | — |  |  | 102 |  |  | 102 |
Company-owned life insurance | — |  |  | — |  |  | 381 |  |  | — |  |  | 381 |  |  | 381 |
Trade and notes receivables, net of allowance | — |  |  | — |  |  | 428 |  |  | — |  |  | 428 |  |  | 428 |
Total | $ | 91 |  |  | $ | 106 |  |  | $ | 5,380 |  |  | $ | 2,558 |  |  | $ | 8,135 |  |  | $ | 8,618 |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Investment contracts, included in contractholder funds | $ | — |  |  | $ | — |  |  | $ | 36,117 |  |  | $ | — |  |  | $ | 36,117 |  |  | $ | 39,809 |
Debt | — |  |  | 3,308 |  |  | — |  |  | — |  |  | 3,308 |  |  | 3,696 |
Total | $ | — |  |  | $ | 3,308 |  |  | $ | 36,117 |  |  | $ | — |  |  | $ | 39,425 |  |  | $ | 43,505 |
| December 31, 2022
| Level 1 |  | Level 2 |  | Level 3 |  | NAV |  | Total Estimated Fair Value |  | Carrying Amount
Assets | (In millions)
FHLB common stock | $ | — |  |  | $ | 99 |  |  | $ | — |  |  | $ | — |  |  | $ | 99 |  |  | $ | 99 |
Commercial mortgage loans | — |  |  | — |  |  | 2,083 |  |  | — |  |  | 2,083 |  |  | 2,406 |
Residential mortgage loans | — |  |  | — |  |  | 1,892 |  |  | — |  |  | 1,892 |  |  | 2,148 |
Investments in unconsolidated affiliates | — |  |  | — |  |  | 5 |  |  | 2,427 |  |  | 2,432 |  |  | 2,432 |
Policy loans | — |  |  | — |  |  | 52 |  |  | — |  |  | 52 |  |  | 52 |
Other invested assets | 93 |  |  | — |  |  | 16 |  |  | — |  |  | 109 |  |  | 109 |
Company-owned life insurance | — |  |  | — |  |  | 363 |  |  | — |  |  | 363 |  |  | 363 |
Trade and notes receivables, net of allowance | — |  |  | — |  |  | 467 |  |  | — |  |  | 467 |  |  | 467 |
Total | $ | 93 |  |  | $ | 99 |  |  | $ | 4,878 |  |  | $ | 2,427 |  |  | $ | 7,497 |  |  | $ | 8,076 |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Investment contracts, included in contractholder funds | $ | — |  |  | $ | — |  |  | $ | 34,464 |  |  | $ | — |  |  | $ | 34,464 |  |  | $ | 38,412 |
Debt | — |  |  | 2,776 |  |  | — |  |  | — |  |  | 2,776 |  |  | 3,238 |
Total | $ | — |  |  | $ | 2,776 |  |  | $ | 34,464 |  |  | $ | — |  |  | $ | 37,240 |  |  | $ | 41,650 |
Quantitative Information Regarding Significant Unobservable Inputs Used for Recurring Level Three Fair Value Measurements of Financial Instruments | Quantitative information regarding significant unobservable inputs used for recurring Level 3 fair value measurements of financial instruments carried at fair value as of March 31, 2023 and December 31, 2022 are as follows:
| Fair Value at |  | Valuation Technique |  | Unobservable Input(s) |  | Range (Weighted average)
| March 31, 2023 |  |  |
| (In millions) |  |  |  | March 31, 2023
Assets |  |  |  |  |  |  |
Asset-backed securities | $ | 6,019 |  |  | Broker-quoted |  | Offered quotes |  | 54.2% - 187.27% (93.86%)
Asset-backed securities | 281 |  |  | Third-Party Valuation |  | Offered quotes |  | 39.43% - 102.60% (62.83%)
Commercial mortgage-backed securities | 12 |  |  | Broker-quoted |  | Offered quotes |  | 95.34% - 101.25% (99.34%)
Commercial mortgage-backed securities | 17 |  |  | Third-Party Valuation |  | Offered quotes |  | 73.36% - 88.60% (82.26%)
Corporates | 682 |  |  | Broker-quoted |  | Offered quotes |  | 80.24% - 104.74% (95.90%)
Corporates | 11 |  |  | Discounted Cash Flow |  | Discount Rate |  | 44.00% - 100.00% (75.18%)
Corporates | 851 |  |  | Third-Party Valuation |  | Offered quotes |  | 0.00% - 105.32% (90.85%)
Municipals | 32 |  |  | Third-Party Valuation |  | Offered quotes |  | 104.38% - 104.38% (104.38%)
Residential mortgage-backed securities | 8 |  |  | Broker-quoted |  | Offered quotes |  | 0.00% - 98.38% (98.18%)
Residential mortgage-backed securities | 4 |  |  | Third-Party Valuation |  | Offered quotes |  | 94.93%
Foreign Governments | 16 |  |  | Third-Party Valuation |  | Offered quotes |  | 99.20% - 99.44% (99.28%)
Investment in unconsolidated affiliates | 107 |  |  | Market Comparable Company Analysis |  | EBITDA multiple |  | 5x-14x (12.1x)
Short term investments | 23 |  |  | Broker-quoted |  | Offered quotes |  | 100.00% - 100.00% (100.00%)
Preferred securities | 1 |  |  | Discounted Cash Flow |  | Discount rate |  | 100.00% - 100.00% (100.00%)
Equity securities | 7 |  |  | Broker Quoted |  | Offered quotes |  | $68.50 - $68.50 ($68.50)
Equity securities | 4 |  |  | Discounted Cash Flow |  | Discount rate |  | 11.16% - 11.16% (11.16%)
|  |  | Market Comparable Company Analysis |  | EBITDA multiple |  | 7.8x - 7.8x (7.8x)
Other long-term investments: |  |  |  |  |  |  |
Available-for-sale embedded derivative | 25 |  |  | Black Scholes model |  | Market value of fund |  | 100.00%
Secured borrowing receivable | 10 |  |  | Broker-quoted |  | Offered quotes |  | 100.00% - 100.00% (100.00%)
Credit Linked Note | 13 |  |  | Broker-quoted |  | Offered quotes |  | 96.23%
Market risk benefits asset | 106 |  |  | Discounted Cash Flow |  | Mortality |  | 100.00% - 100.00% (100.00%)
|  |  |  |  | Surrender rates |  | 0.25% - 10.00% (5.03%)
|  |  |  |  | Partial withdrawal rates |  | 2.00% - 21.74% (2.49%)
|  |  |  |  | Non-performance spread |  | 0.48% - 1.42% (1.31%)
|  |  |  |  | GMWB utilization |  | 50.00% - 60.00% (50.89%)
Total financial assets at fair value | $ | 8,229 |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |
Derivative investments: |  |  |  |  |  |  |
FIA/ IUL embedded derivatives, included in contractholder funds | $ | 3,569 |  |  | Discounted cash flow |  | Market value of option |  | 0.00% - 28.31% (1.54%)
|  |  |  |  | Swap rates |  | 3.48% - 4.97% (4.23%)
|  |  |  |  | Mortality multiplier |  | 100.00% - 100.00% (100.00%)
|  |  |  |  | Surrender rates |  | 0.25% - 70.00% (6.57%)
|  |  |  |  | Partial withdrawals |  | 2.00% - 32.26% (2.74%)
|  |  |  |  | Non-performance spread |  | 0.48% - 1.42% (1.31%)
|  |  |  |  | Option cost |  | 0.07% - 5.67% (2.11%)
Market risk benefits liability | 324 |  |  | Discounted cash flow |  | Mortality |  | 100.00% - 100.00% (100.00%)
|  |  |  |  | Surrender rates |  | 0.25% - 10.00% (5.03%)
|  |  |  |  | Partial withdrawal rates |  | 2.00% - 21.74% (2.49%)
|  |  |  |  | Non-performance spread |  | 0.48% - 1.42% (1.31%)
|  |  |  |  | GMWB utilization |  | 0.48% - 1.42% (50.89%)
Total financial liabilities at fair value | $ | 3,893 |  |  |  |  |  |  |
| Fair Value at |  | Valuation Technique |  | Unobservable Input(s) |  | Range (Weighted average)
| December 31, 2022 |  |  |
| (In millions) |  |  |  | December 31, 2022
Assets |  |  |  |  |  |  |
Asset-backed securities | $ | 5,916 |  |  | Broker-quoted |  | Offered quotes |  | 52.85% - 117.17% (94.18%)
Asset-backed securities | 347 |  |  | Third-Party Valuation |  | Offered quotes |  | 41.43% - 210.50% (67.99%)
Commercial mortgage-backed securities | 20 |  |  | Broker-quoted |  | Offered quotes |  | 109.02% - 109.02% (109.02%)
Commercial mortgage-backed securities | 17 |  |  | Third-Party Valuation |  | Offered quotes |  | 74.66% - 88.48% (82.74%)
Corporates | 602 |  |  | Broker-quoted |  | Offered quotes |  | 79.16% - 102.53% (94.16%)
Corporates | 826 |  |  | Third-Party Evaluation |  | Offered quotes |  | —% - 104.96% (89.69%)
Corporates | 12 |  |  | Discounted Cash Flow |  | Discount Rate |  | 44.00% - 100.00% (77.02%)
Municipals | 29 |  |  | Third-Party Evaluation |  | Offered quotes |  | 93.95% - 93.95% (93.95%)
Foreign governments | 16 |  | Third-Party Evaluation |  | Offered quotes |  | 99.78% - 102.29% (100.56%)
Investment in unconsolidated affiliates | 23 |  |  | Market Comparable Company Analysis |  | EBITDA multiple |  | 5x-5.50x
Residential mortgage-backed securities | 302 |  | Broker-quoted |  | Offered quotes |  | —% - 91.04% (86.38%)
Preferred Securities | 1 |  | Discounted Cash Flow |  | Discount rate |  | 100.00%
Equity securities | 6 |  | Broker-quoted |  | Offered Quotes |  | $64.25 - $64.25 ($64.25)
Equity securities | 4 |  |  | Discounted Cash Flow |  | Discount Rate |  | 11.10% - 11.10% (11.10%)
|  |  | Market Comparable Company Analysis |  | EBITDA multiple |  | 5.6x - 5.6x (5.6x)
Other long-term investments: |  |  |  |  |  |  |
Available-for-sale embedded derivative | 23 |  |  | Black Scholes model |  | Market value of fund |  | 100.00%
Secured borrowing receivable | 10 |  |  | Broker-quoted |  | Offered quotes |  | 100.00% - 100.00% (100.00%)
Credit Linked Note | 15 |  |  | Broker-quoted |  | Offered quotes |  | 96.23%
Market risk benefits asset | 117 |  |  | Discounted Cash Flow |  | Mortality |  | 100.00% - 100.00% (100.00%)
|  |  |  |  | Surrender rates |  | 0.25% - 10.00% (4.69%)
|  |  |  |  | Partial withdrawal rates |  | 2.00% - 21.74% (2.49%)
|  |  |  |  | Non-performance spread |  | 0.48% - 1.44% (1.30%)
|  |  |  |  | GMWB utilization |  | 50.00% - 60.00% (50.94%)
Total financial assets at fair value | $ | 8,286 |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |
Derivative investments: |  |  |  |  |  |  |
FIA/ IUL embedded derivatives, included in contractholder funds | 3,115 |  |  | Discounted cash flow |  | Market value of option |  | —% - 23.90% (87.00%)
|  |  |  |  | Swap rates |  | 3.88% - 4.73% (4.31%)
|  |  |  |  | Mortality multiplier |  | 100.00% - 100.00% (100.00%)
|  |  |  |  | Surrender rates |  | 0.25% - 70.00% (6.57%)
|  |  |  |  | Partial withdrawals |  | 2.00% - 29.41% (2.73%)
|  |  |  |  | Non-performance spread |  | 0.48% - 1.44% (1.30%)
|  |  |  |  | Option cost |  | 0.07% - 4.97% (1.89%)
Market risk benefits liability | 282 |  |  | Discounted Cash Flow |  | Mortality |  | 100.00% - 100.00% (100.00%)
|  |  |  |  | Surrender rates |  | 0.25% - 10.00% (4.69%)
|  |  |  |  | Partial withdrawal rates |  | 2.00% - 21.74% (2.49%)
|  |  |  |  | Non-performance spread |  | 0.48% - 1.44% (1.30%)
|  |  |  |  | GMWB utilization |  | 50.00% - 60.00% (50.94%)
Total financial liabilities at fair value | $ | 3,397 |  |  |  |  |  |  |
Changes in Fair Value of Financial Instruments - Assets | The following tables summarize changes to the Company’s financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the three months ended March 31, 2023 and 2022. The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.
| Three months ended March 31, 2023
| Balance at Beginning of Period |  |  |  | Total Gains (Losses) |  | Purchases |  | Sales |  | Settlements |  | Net transfer In (Out) of Level 3 (a) |  | Balance at End of Period |  | Change in Unrealized Gains (Losses) Incl in OCI
|  |  | Included in Earnings |  | Included in AOCI |  |  |  |  |  |
Assets | (In millions)
Fixed maturity securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities | $ | 6,263 |  |  |  |  | $ | (8) |  |  | $ | 18 |  |  | $ | 416 |  |  | $ | (83) |  |  | $ | (235) |  |  | $ | (71) |  |  | $ | 6,300 |  |  | $ | 18 |
Commercial mortgage-backed securities | 37 |  |  |  |  | — |  |  | 1 |  |  | 12 |  |  | — |  |  | — |  |  | (21) |  |  | 29 |  |  | 1 |
Corporates | 1,440 |  |  |  |  | (1) |  |  | (23) |  |  | 133 |  |  | — |  |  | (5) |  |  | — |  |  | 1,544 |  |  | (23) |
Municipals | 29 |  |  |  |  | — |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 32 |  |  | 3 |
Residential mortgage-backed securities | 302 |  |  |  |  | 1 |  |  | 8 |  |  | 8 |  |  | — |  |  | (8) |  |  | (299) |  |  | 12 |  |  | 8 |
Foreign Governments | 16 |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 16 |  |  | — |
Investment in unconsolidated affiliates | 23 |  |  |  |  | — |  |  | — |  |  | 84 |  |  | — |  |  | — |  |  | — |  |  | 107 |  |  | — |
Short term investments | — |  |  |  |  | — |  |  | — |  |  | 23 |  |  | — |  |  | — |  |  | — |  |  | 23 |  |  | — |
Preferred securities | 1 |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |
Equity securities | 10 |  |  |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 11 |  |  | — |
Other long-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale embedded derivative | 23 |  |  |  |  | — |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 25 |  |  | 2 |
Credit linked note | 15 |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2) |  |  | — |  |  | 13 |  |  | — |
Secured borrowing receivable | 10 |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 10 |  |  | — |
Subtotal Level 3 assets at fair value | $ | 8,169 |  |  |  |  | $ | (8) |  |  | $ | 9 |  |  | $ | 677 |  |  | $ | (83) |  |  | $ | (250) |  |  | $ | (391) |  |  | $ | 8,123 |  | $ | 8,123 |  | $ | 9 |
Market risk benefits asset | 117 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 106 |  |  |
Total Level 3 assets at fair value | $ | 8,286 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 8,229 |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FIA/ IUL embedded derivatives, included in contractholder funds | 3,115 |  |  |  |  | 385 |  |  | — |  |  | 96 |  |  | — |  |  | (27) |  |  | — |  |  | 3,569 |  |  | — |
Subtotal Level 3 liabilities at fair value | $ | 3,115 |  |  |  |  | $ | 385 |  |  | $ | — |  |  | $ | 96 |  |  | $ | — |  |  | $ | (27) |  |  | $ | — |  |  | $ | 3,569 |  |  | $ | — |
Market risk benefits liability | 282 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 324 |  |  |
Total Level 3 liabilities at fair value | $ | 3,397 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 3,893 |  |  |
(a) The net transfers out of Level 3 during the three months ended March 31, 2023 were exclusively to Level 2.
| Three months ended March 31, 2022
| Balance at Beginning of Period |  | Total Gains (Losses) |  | Purchases |  | Sales |  | Settlements |  | Net transfer In (Out) of Level 3 (a) |  | Balance at End of Period |  | Change in Unrealized Gains (Losses) Incl in OCI
|  | Included in Earnings |  | Included in AOCI |  |  |  |  |  |
Assets | (In millions)
Fixed maturity securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities | $ | 3,959 |  |  | $ | — |  |  | $ | (130) |  |  | $ | 400 |  |  | $ | — |  |  | $ | (152) |  |  | $ | 84 |  |  | $ | 4,161 |  |  | $ | (138) |
Commercial mortgage-backed securities | 35 |  |  | — |  |  | (2) |  |  | — |  |  | — |  |  | — |  |  | 7 |  |  | 40 |  |  | (2) |
Corporates | 1,135 |  |  | — |  |  | (74) |  |  | 80 |  |  | — |  |  | (26) |  |  | 26 |  |  | 1,141 |  |  | (73) |
Municipals | 43 |  |  | — |  |  | (6) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 37 |  |  | (5) |
Foreign Governments | 18 |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 17 |  |  | (1) |
Investment in unconsolidated affiliates | 21 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 21 |  |  | — |
Short term investments | 321 |  |  | — |  |  | (1) |  |  | 20 |  |  | — |  |  | — |  |  | (321) |  |  | 19 |  |  | (1) |
Preferred securities | 2 |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | (1) |
Equity securities | 9 |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 10 |  |  | — |
Other long-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale embedded derivative | 34 |  |  | (4) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 30 |  |  | — |
Credit linked note | 23 |  |  | — |  |  | (3) |  |  | — |  |  | — |  |  | (1) |  |  | — |  |  | 19 |  |  | — |
Subtotal Level 3 assets at fair value | $ | 5,600 |  |  | $ | (4) |  |  | $ | (218) |  |  | $ | 501 |  |  | $ | — |  |  | $ | (179) |  |  | $ | (204) |  |  | $ | 5,496 |  |  | $ | (221) |
Market risk benefits asset | 41 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 29 |  |  |
Total Level 3 assets at fair value | $ | 5,641 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 5,525 |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FIA embedded derivatives, included in contractholder funds | 3,883 |  |  | (584) |  |  | — |  |  | 126 |  |  | — |  |  | (30) |  |  | — |  |  | 3,395 |  |  | — |
Subtotal Level 3 liabilities at fair value | $ | 3,883 |  |  | $ | (584) |  |  | $ | — |  |  | $ | 126 |  |  | $ | — |  |  | $ | (30) |  |  | $ | — |  |  | $ | 3,395 |  |  | $ | — |
Market risk benefits liability | 469 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 486 |  |  |
Total Level 3 liabilities at fair value | $ | 4,352 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 3,881 |  |  |
Changes in Fair Value of Financial Instruments - Liabilities | The following tables summarize changes to the Company’s financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the three months ended March 31, 2023 and 2022. The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.
| Three months ended March 31, 2023
| Balance at Beginning of Period |  |  |  | Total Gains (Losses) |  | Purchases |  | Sales |  | Settlements |  | Net transfer In (Out) of Level 3 (a) |  | Balance at End of Period |  | Change in Unrealized Gains (Losses) Incl in OCI
|  |  | Included in Earnings |  | Included in AOCI |  |  |  |  |  |
Assets | (In millions)
Fixed maturity securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities | $ | 6,263 |  |  |  |  | $ | (8) |  |  | $ | 18 |  |  | $ | 416 |  |  | $ | (83) |  |  | $ | (235) |  |  | $ | (71) |  |  | $ | 6,300 |  |  | $ | 18 |
Commercial mortgage-backed securities | 37 |  |  |  |  | — |  |  | 1 |  |  | 12 |  |  | — |  |  | — |  |  | (21) |  |  | 29 |  |  | 1 |
Corporates | 1,440 |  |  |  |  | (1) |  |  | (23) |  |  | 133 |  |  | — |  |  | (5) |  |  | — |  |  | 1,544 |  |  | (23) |
Municipals | 29 |  |  |  |  | — |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 32 |  |  | 3 |
Residential mortgage-backed securities | 302 |  |  |  |  | 1 |  |  | 8 |  |  | 8 |  |  | — |  |  | (8) |  |  | (299) |  |  | 12 |  |  | 8 |
Foreign Governments | 16 |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 16 |  |  | — |
Investment in unconsolidated affiliates | 23 |  |  |  |  | — |  |  | — |  |  | 84 |  |  | — |  |  | — |  |  | — |  |  | 107 |  |  | — |
Short term investments | — |  |  |  |  | — |  |  | — |  |  | 23 |  |  | — |  |  | — |  |  | — |  |  | 23 |  |  | — |
Preferred securities | 1 |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |
Equity securities | 10 |  |  |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 11 |  |  | — |
Other long-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale embedded derivative | 23 |  |  |  |  | — |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 25 |  |  | 2 |
Credit linked note | 15 |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2) |  |  | — |  |  | 13 |  |  | — |
Secured borrowing receivable | 10 |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 10 |  |  | — |
Subtotal Level 3 assets at fair value | $ | 8,169 |  |  |  |  | $ | (8) |  |  | $ | 9 |  |  | $ | 677 |  |  | $ | (83) |  |  | $ | (250) |  |  | $ | (391) |  |  | $ | 8,123 |  | $ | 8,123 |  | $ | 9 |
Market risk benefits asset | 117 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 106 |  |  |
Total Level 3 assets at fair value | $ | 8,286 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 8,229 |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FIA/ IUL embedded derivatives, included in contractholder funds | 3,115 |  |  |  |  | 385 |  |  | — |  |  | 96 |  |  | — |  |  | (27) |  |  | — |  |  | 3,569 |  |  | — |
Subtotal Level 3 liabilities at fair value | $ | 3,115 |  |  |  |  | $ | 385 |  |  | $ | — |  |  | $ | 96 |  |  | $ | — |  |  | $ | (27) |  |  | $ | — |  |  | $ | 3,569 |  |  | $ | — |
Market risk benefits liability | 282 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 324 |  |  |
Total Level 3 liabilities at fair value | $ | 3,397 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 3,893 |  |  |
(a) The net transfers out of Level 3 during the three months ended March 31, 2023 were exclusively to Level 2.
| Three months ended March 31, 2022
| Balance at Beginning of Period |  | Total Gains (Losses) |  | Purchases |  | Sales |  | Settlements |  | Net transfer In (Out) of Level 3 (a) |  | Balance at End of Period |  | Change in Unrealized Gains (Losses) Incl in OCI
|  | Included in Earnings |  | Included in AOCI |  |  |  |  |  |
Assets | (In millions)
Fixed maturity securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities | $ | 3,959 |  |  | $ | — |  |  | $ | (130) |  |  | $ | 400 |  |  | $ | — |  |  | $ | (152) |  |  | $ | 84 |  |  | $ | 4,161 |  |  | $ | (138) |
Commercial mortgage-backed securities | 35 |  |  | — |  |  | (2) |  |  | — |  |  | — |  |  | — |  |  | 7 |  |  | 40 |  |  | (2) |
Corporates | 1,135 |  |  | — |  |  | (74) |  |  | 80 |  |  | — |  |  | (26) |  |  | 26 |  |  | 1,141 |  |  | (73) |
Municipals | 43 |  |  | — |  |  | (6) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 37 |  |  | (5) |
Foreign Governments | 18 |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 17 |  |  | (1) |
Investment in unconsolidated affiliates | 21 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 21 |  |  | — |
Short term investments | 321 |  |  | — |  |  | (1) |  |  | 20 |  |  | — |  |  | — |  |  | (321) |  |  | 19 |  |  | (1) |
Preferred securities | 2 |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | (1) |
Equity securities | 9 |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 10 |  |  | — |
Other long-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale embedded derivative | 34 |  |  | (4) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 30 |  |  | — |
Credit linked note | 23 |  |  | — |  |  | (3) |  |  | — |  |  | — |  |  | (1) |  |  | — |  |  | 19 |  |  | — |
Subtotal Level 3 assets at fair value | $ | 5,600 |  |  | $ | (4) |  |  | $ | (218) |  |  | $ | 501 |  |  | $ | — |  |  | $ | (179) |  |  | $ | (204) |  |  | $ | 5,496 |  |  | $ | (221) |
Market risk benefits asset | 41 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 29 |  |  |
Total Level 3 assets at fair value | $ | 5,641 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 5,525 |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FIA embedded derivatives, included in contractholder funds | 3,883 |  |  | (584) |  |  | — |  |  | 126 |  |  | — |  |  | (30) |  |  | — |  |  | 3,395 |  |  | — |
Subtotal Level 3 liabilities at fair value | $ | 3,883 |  |  | $ | (584) |  |  | $ | — |  |  | $ | 126 |  |  | $ | — |  |  | $ | (30) |  |  | $ | — |  |  | $ | 3,395 |  |  | $ | — |
Market risk benefits liability | 469 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 486 |  |  |
Total Level 3 liabilities at fair value | $ | 4,352 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 3,881 |  |  |

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