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Fair Value Measurements (Tables) | 12 Months Ended
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Dec. 31, 2017
Fair Value Disclosures [Abstract] |
Assets and liabilities measured at fair value | Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions):
| Level 1 |  | Level 2 |  | Level 3 |  | Total
December 31, 2017 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Available for sale (“AFS”) fixed maturities: |  |  |  |  |  |  |
U.S. Government and government agencies | $ | 122 |  |  | $ | 112 |  |  | $ | 8 |  |  | $ | 242 |
States, municipalities and political subdivisions | — |  |  | 6,975 |  |  | 148 |  |  | 7,123 |
Foreign government | — |  |  | 127 |  |  | — |  |  | 127 |
Residential MBS | — |  |  | 3,105 |  |  | 122 |  |  | 3,227 |
Commercial MBS | — |  |  | 926 |  |  | 36 |  |  | 962 |
Asset-backed securities (“ABS”) | — |  |  | 7,218 |  |  | 744 |  |  | 7,962 |
Corporate and other | 30 |  |  | 17,662 |  |  | 1,044 |  |  | 18,736 |
Total AFS fixed maturities | 152 |  |  | 36,125 |  |  | 2,102 |  |  | 38,379 |
Trading fixed maturities | 44 |  |  | 304 |  |  | — |  |  | 348 |
Equity securities — AFS and trading | 1,411 |  |  | 86 |  |  | 165 |  |  | 1,662 |
Assets of managed investment entities (“MIE”) | 307 |  |  | 4,572 |  |  | 23 |  |  | 4,902 |
Variable annuity assets (separate accounts) (*) | — |  |  | 644 |  |  | — |  |  | 644 |
Equity index call options | — |  |  | 701 |  |  | — |  |  | 701 |
Other assets — derivatives | — |  |  | — |  |  | — |  |  | — |
Total assets accounted for at fair value | $ | 1,914 |  |  | $ | 42,432 |  |  | $ | 2,290 |  |  | $ | 46,636 |
Liabilities: |  |  |  |  |  |  |
Liabilities of managed investment entities | $ | 293 |  |  | $ | 4,372 |  |  | $ | 22 |  |  | $ | 4,687 |
Derivatives in annuity benefits accumulated | — |  |  | — |  |  | 2,542 |  |  | 2,542 |
Other liabilities — derivatives | — |  |  | 35 |  |  | — |  |  | 35 |
Total liabilities accounted for at fair value | $ | 293 |  |  | $ | 4,407 |  |  | $ | 2,564 |  |  | $ | 7,264 |
December 31, 2016 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Available for sale fixed maturities: |  |  |  |  |  |  |
U.S. Government and government agencies | $ | 133 |  |  | $ | 174 |  |  | $ | 8 |  |  | $ | 315 |
States, municipalities and political subdivisions | — |  |  | 6,641 |  |  | 140 |  |  | 6,781 |
Foreign government | — |  |  | 136 |  |  | — |  |  | 136 |
Residential MBS | — |  |  | 3,445 |  |  | 190 |  |  | 3,635 |
Commercial MBS | — |  |  | 1,468 |  |  | 25 |  |  | 1,493 |
Asset-backed securities | — |  |  | 5,475 |  |  | 484 |  |  | 5,959 |
Corporate and other | 29 |  |  | 15,484 |  |  | 712 |  |  | 16,225 |
Total AFS fixed maturities | 162 |  |  | 32,823 |  |  | 1,559 |  |  | 34,544 |
Trading fixed maturities | 30 |  |  | 329 |  |  | — |  |  | 359 |
Equity securities — AFS and trading | 1,305 |  |  | 79 |  |  | 174 |  |  | 1,558 |
Assets of managed investment entities | 380 |  |  | 4,356 |  |  | 29 |  |  | 4,765 |
Variable annuity assets (separate accounts) (*) | — |  |  | 600 |  |  | — |  |  | 600 |
Equity index call options | — |  |  | 492 |  |  | — |  |  | 492 |
Other assets — derivatives | — |  |  | 1 |  |  | — |  |  | 1 |
Total assets accounted for at fair value | $ | 1,877 |  |  | $ | 38,680 |  |  | $ | 1,762 |  |  | $ | 42,319 |
Liabilities: |  |  |  |  |  |  |
Liabilities of managed investment entities | $ | 363 |  |  | $ | 4,158 |  |  | $ | 28 |  |  | $ | 4,549 |
Derivatives in annuity benefits accumulated | — |  |  | — |  |  | 1,759 |  |  | 1,759 |
Derivatives in long-term debt | — |  |  | (1 | ) |  | — |  |  | (1 | )
Other liabilities — derivatives | — |  |  | 30 |  |  | — |  |  | 30 |
Total liabilities accounted for at fair value | $ | 363 |  |  | $ | 4,187 |  |  | $ | 1,787 |  |  | $ | 6,337 |
(*) Variable annuity liabilities equal the fair value of variable annuity assets.
Fair value measurements, Levels 1 and 2 transfers | The transfers between Level 1 and Level 2 for the years ended December 31, 2017, 2016 and 2015 are reflected in the table below at fair value as of the end of the reporting period (dollars in millions):
| Level 2 To Level 1 Transfers |  | Level 1 To Level 2 Transfers
| # of Transfers |  | Fair Value |  | # of Transfers |  | Fair Value
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
Perpetual preferred stocks | 4 |  |  | 6 |  |  | 5 |  |  | $ | 23 |  |  | $ | 35 |  |  | $ | 19 |  |  | 2 |  |  | 7 |  |  | 7 |  |  | $ | 11 |  |  | $ | 28 |  |  | $ | 31 |
Common stocks | — |  |  | 3 |  |  | 7 |  |  | — |  |  | — |  |  | 80 |  |  | 1 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |
Redeemable preferred stocks | — |  |  | — |  |  | 2 |  |  | — |  |  | — |  |  | 11 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Unobservable inputs used by management in determining fair value of embedded derivatives | The following table presents information about the unobservable inputs used by management in determining fair value of these embedded derivatives. See Note F — “Derivatives.”
| Unobservable Input |  | Range |
| Adjustment for insurance subsidiary’s credit risk |  | 0.2% – 2.0% over the risk free rate |
| Risk margin for uncertainty in cash flows |  | 0.70% reduction in the discount rate |
| Surrenders |  | 3% – 23% of indexed account value |
| Partial surrenders |  | 2% – 10% of indexed account value |
| Annuitizations |  | 0.1% – 1% of indexed account value |
| Deaths |  | 1.6% – 8.0% of indexed account value |
| Budgeted option costs |  | 2.4% – 3.6% of indexed account value |
Changes in asset balances of Level 3 financial assets | Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2017, 2016 and 2015 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period.
|  |  | Total realized/unrealized gains (losses) included in |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2016 |  | Net earnings |  | Other comprehensive income (loss) |  | Purchases and issuances |  | Sales and settlements |  | Transfer into Level 3 |  | Transfer out of Level 3 |  | Balance at December 31, 2017
AFS fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency | $ | 8 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 8 |
State and municipal | 140 |  |  | — |  |  | 2 |  |  | — |  |  | (2 | ) |  | 10 |  |  | (2 | ) |  | 148 |
Residential MBS | 190 |  |  | (4 | ) |  | 2 |  |  | 1 |  |  | (40 | ) |  | 44 |  |  | (71 | ) |  | 122 |
Commercial MBS | 25 |  |  | 2 |  |  | — |  |  | 15 |  |  | (10 | ) |  | 4 |  |  | — |  |  | 36 |
Asset-backed securities | 484 |  |  | — |  |  | 1 |  |  | 410 |  |  | (132 | ) |  | 202 |  |  | (221 | ) |  | 744 |
Corporate and other | 712 |  |  | (5 | ) |  | 2 |  |  | 606 |  |  | (237 | ) |  | 29 |  |  | (63 | ) |  | 1,044 |
Total AFS fixed maturities | 1,559 |  |  | (7 | ) |  | 7 |  |  | 1,032 |  |  | (421 | ) |  | 289 |  |  | (357 | ) |  | 2,102 |
Equity securities | 174 |  |  | (21 | ) |  | 10 |  |  | 38 |  |  | (16 | ) |  | — |  |  | (20 | ) |  | 165 |
Assets of MIE | 29 |  |  | (11 | ) |  | — |  |  | 9 |  |  | — |  |  | — |  |  | (4 | ) |  | 23 |
Total Level 3 assets | $ | 1,762 |  |  | $ | (39 | ) |  | $ | 17 |  |  | $ | 1,079 |  |  | $ | (437 | ) |  | $ | 289 |  |  | $ | (381 | ) |  | $ | 2,290 |
Embedded derivatives (a) | $ | (1,759 | ) |  | $ | (589 | ) |  | $ | — |  |  | $ | (300 | ) |  | $ | 106 |  |  | $ | — |  |  | $ | — |  |  | $ | (2,542 | )
Total Level 3 liabilities (b) | $ | (1,759 | ) |  | $ | (589 | ) |  | $ | — |  |  | $ | (300 | ) |  | $ | 106 |  |  | $ | — |  |  | $ | — |  |  | $ | (2,542 | )
(a) | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $25 million in 2017.
(b) | As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets.
|  |  | Total realized/unrealized gains (losses) included in |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2015 |  | Net earnings |  | Other comprehensive income (loss) |  | Purchases and issuances |  | Sales and settlements |  | Transfer into Level 3 |  | Transfer out of Level 3 |  | Balance at December 31, 2016
AFS fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency | $ | 15 |  |  | $ | (8 | ) |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 8 |
State and municipal | 89 |  |  | — |  |  | (4 | ) |  | 57 |  |  | (2 | ) |  | — |  |  | — |  |  | 140 |
Residential MBS | 224 |  |  | (4 | ) |  | (2 | ) |  | 8 |  |  | (28 | ) |  | 34 |  |  | (42 | ) |  | 190 |
Commercial MBS | 39 |  |  | (1 | ) |  | — |  |  | — |  |  | (7 | ) |  | — |  |  | (6 | ) |  | 25 |
Asset-backed securities | 470 |  |  | (1 | ) |  | 1 |  |  | 50 |  |  | (52 | ) |  | 60 |  |  | (44 | ) |  | 484 |
Corporate and other | 633 |  |  | — |  |  | (10 | ) |  | 176 |  |  | (100 | ) |  | 30 |  |  | (17 | ) |  | 712 |
Total AFS fixed maturities | 1,470 |  |  | (14 | ) |  | (14 | ) |  | 291 |  |  | (189 | ) |  | 124 |  |  | (109 | ) |  | 1,559 |
Equity securities | 140 |  |  | (12 | ) |  | 35 |  |  | 44 |  |  | (28 | ) |  | 15 |  |  | (20 | ) |  | 174 |
Assets of MIE | 26 |  |  | (9 | ) |  | — |  |  | 12 |  |  | — |  |  | — |  |  | — |  |  | 29 |
Total Level 3 assets | $ | 1,636 |  |  | $ | (35 | ) |  | $ | 21 |  |  | $ | 347 |  |  | $ | (217 | ) |  | $ | 139 |  |  | $ | (129 | ) |  | $ | 1,762 |
Embedded derivatives (a) | $ | (1,369 | ) |  | $ | (211 | ) |  | $ | — |  |  | $ | (277 | ) |  | $ | 98 |  |  | $ | — |  |  | $ | — |  |  | $ | (1,759 | )
Total Level 3 liabilities (b) | $ | (1,369 | ) |  | $ | (211 | ) |  | $ | — |  |  | $ | (277 | ) |  | $ | 98 |  |  | $ | — |  |  | $ | — |  |  | $ | (1,759 | )
(a) | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016.
(b) | As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets.
|  |  |  |  | Total realized/unrealized gains (losses) included in |  |  |  |  |  |  |  |  |  |  |  |
Bal. at Dec. 31, 2014 |  | Impact of accounting change (b) |  | Net earnings |  | Other comprehensive income (loss) |  | Purchases and issuances |  | Sales and settlements |  | Transfer into Level 3 |  | Transfer out of Level 3 |  | Sale of subsidiaries |  | Bal. at Dec. 31, 2015
AFS fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency | $ | 15 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 15 |
State and municipal | 100 |  |  | — |  |  | — |  |  | (1 | ) |  | 34 |  |  | (1 | ) |  | 2 |  |  | (39 | ) |  | (6 | ) |  | 89 |
Residential MBS | 300 |  |  | — |  |  | (11 | ) |  | (1 | ) |  | — |  |  | (34 | ) |  | 86 |  |  | (88 | ) |  | (28 | ) |  | 224 |
Commercial MBS | 44 |  |  | — |  |  | (1 | ) |  | (1 | ) |  | — |  |  | (2 | ) |  | 4 |  |  | (1 | ) |  | (4 | ) |  | 39 |
Asset-backed securities | 226 |  |  | — |  |  | 1 |  |  | (7 | ) |  | 265 |  |  | (56 | ) |  | 53 |  |  | (10 | ) |  | (2 | ) |  | 470 |
Corporate and other | 546 |  |  | — |  |  | (5 | ) |  | (9 | ) |  | 161 |  |  | (90 | ) |  | 41 |  |  | (5 | ) |  | (6 | ) |  | 633 |
Total AFS fixed maturities | 1,231 |  |  | — |  |  | (16 | ) |  | (19 | ) |  | 460 |  |  | (183 | ) |  | 186 |  |  | (143 | ) |  | (46 | ) |  | 1,470 |
Equity securities | 93 |  |  | — |  |  | (4 | ) |  | (9 | ) |  | 77 |  |  | — |  |  | — |  |  | (17 | ) |  | — |  |  | 140 |
Assets of MIE | 31 |  |  | — |  |  | (11 | ) |  | — |  |  | 6 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 26 |
Total Level 3 assets | $ | 1,355 |  |  | $ | — |  |  | $ | (31 | ) |  | $ | (28 | ) |  | $ | 543 |  |  | $ | (183 | ) |  | $ | 186 |  |  | $ | (160 | ) |  | $ | (46 | ) |  | $ | 1,636 |
Liabilities of MIE | $ | (2,701 | ) |  | $ | 2,701 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Embedded derivatives (a) | (1,160 | ) |  | — |  |  | (17 | ) |  | — |  |  | (257 | ) |  | 65 |  |  | — |  |  | — |  |  | — |  |  | (1,369 | )
Total Level 3 liabilities | $ | (3,861 | ) |  | $ | 2,701 |  |  | $ | (17 | ) |  | $ | — |  |  | $ | (257 | ) |  | $ | 65 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (1,369 | )
(a) | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $28 million in 2015.
(b) | The impact of implementing new guidance adopted in 2015, as discussed in Note A — “Accounting Policies — Managed Investment Entities.”
Changes in liability balances of Level 3 financial liabilities | Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2017, 2016 and 2015 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period.
|  |  | Total realized/unrealized gains (losses) included in |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2016 |  | Net earnings |  | Other comprehensive income (loss) |  | Purchases and issuances |  | Sales and settlements |  | Transfer into Level 3 |  | Transfer out of Level 3 |  | Balance at December 31, 2017
AFS fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency | $ | 8 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 8 |
State and municipal | 140 |  |  | — |  |  | 2 |  |  | — |  |  | (2 | ) |  | 10 |  |  | (2 | ) |  | 148 |
Residential MBS | 190 |  |  | (4 | ) |  | 2 |  |  | 1 |  |  | (40 | ) |  | 44 |  |  | (71 | ) |  | 122 |
Commercial MBS | 25 |  |  | 2 |  |  | — |  |  | 15 |  |  | (10 | ) |  | 4 |  |  | — |  |  | 36 |
Asset-backed securities | 484 |  |  | — |  |  | 1 |  |  | 410 |  |  | (132 | ) |  | 202 |  |  | (221 | ) |  | 744 |
Corporate and other | 712 |  |  | (5 | ) |  | 2 |  |  | 606 |  |  | (237 | ) |  | 29 |  |  | (63 | ) |  | 1,044 |
Total AFS fixed maturities | 1,559 |  |  | (7 | ) |  | 7 |  |  | 1,032 |  |  | (421 | ) |  | 289 |  |  | (357 | ) |  | 2,102 |
Equity securities | 174 |  |  | (21 | ) |  | 10 |  |  | 38 |  |  | (16 | ) |  | — |  |  | (20 | ) |  | 165 |
Assets of MIE | 29 |  |  | (11 | ) |  | — |  |  | 9 |  |  | — |  |  | — |  |  | (4 | ) |  | 23 |
Total Level 3 assets | $ | 1,762 |  |  | $ | (39 | ) |  | $ | 17 |  |  | $ | 1,079 |  |  | $ | (437 | ) |  | $ | 289 |  |  | $ | (381 | ) |  | $ | 2,290 |
Embedded derivatives (a) | $ | (1,759 | ) |  | $ | (589 | ) |  | $ | — |  |  | $ | (300 | ) |  | $ | 106 |  |  | $ | — |  |  | $ | — |  |  | $ | (2,542 | )
Total Level 3 liabilities (b) | $ | (1,759 | ) |  | $ | (589 | ) |  | $ | — |  |  | $ | (300 | ) |  | $ | 106 |  |  | $ | — |  |  | $ | — |  |  | $ | (2,542 | )
(a) | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $25 million in 2017.
(b) | As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets.
|  |  | Total realized/unrealized gains (losses) included in |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2015 |  | Net earnings |  | Other comprehensive income (loss) |  | Purchases and issuances |  | Sales and settlements |  | Transfer into Level 3 |  | Transfer out of Level 3 |  | Balance at December 31, 2016
AFS fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency | $ | 15 |  |  | $ | (8 | ) |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 8 |
State and municipal | 89 |  |  | — |  |  | (4 | ) |  | 57 |  |  | (2 | ) |  | — |  |  | — |  |  | 140 |
Residential MBS | 224 |  |  | (4 | ) |  | (2 | ) |  | 8 |  |  | (28 | ) |  | 34 |  |  | (42 | ) |  | 190 |
Commercial MBS | 39 |  |  | (1 | ) |  | — |  |  | — |  |  | (7 | ) |  | — |  |  | (6 | ) |  | 25 |
Asset-backed securities | 470 |  |  | (1 | ) |  | 1 |  |  | 50 |  |  | (52 | ) |  | 60 |  |  | (44 | ) |  | 484 |
Corporate and other | 633 |  |  | — |  |  | (10 | ) |  | 176 |  |  | (100 | ) |  | 30 |  |  | (17 | ) |  | 712 |
Total AFS fixed maturities | 1,470 |  |  | (14 | ) |  | (14 | ) |  | 291 |  |  | (189 | ) |  | 124 |  |  | (109 | ) |  | 1,559 |
Equity securities | 140 |  |  | (12 | ) |  | 35 |  |  | 44 |  |  | (28 | ) |  | 15 |  |  | (20 | ) |  | 174 |
Assets of MIE | 26 |  |  | (9 | ) |  | — |  |  | 12 |  |  | — |  |  | — |  |  | — |  |  | 29 |
Total Level 3 assets | $ | 1,636 |  |  | $ | (35 | ) |  | $ | 21 |  |  | $ | 347 |  |  | $ | (217 | ) |  | $ | 139 |  |  | $ | (129 | ) |  | $ | 1,762 |
Embedded derivatives (a) | $ | (1,369 | ) |  | $ | (211 | ) |  | $ | — |  |  | $ | (277 | ) |  | $ | 98 |  |  | $ | — |  |  | $ | — |  |  | $ | (1,759 | )
Total Level 3 liabilities (b) | $ | (1,369 | ) |  | $ | (211 | ) |  | $ | — |  |  | $ | (277 | ) |  | $ | 98 |  |  | $ | — |  |  | $ | — |  |  | $ | (1,759 | )
(a) | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016.
(b) | As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets.
|  |  |  |  | Total realized/unrealized gains (losses) included in |  |  |  |  |  |  |  |  |  |  |  |
Bal. at Dec. 31, 2014 |  | Impact of accounting change (b) |  | Net earnings |  | Other comprehensive income (loss) |  | Purchases and issuances |  | Sales and settlements |  | Transfer into Level 3 |  | Transfer out of Level 3 |  | Sale of subsidiaries |  | Bal. at Dec. 31, 2015
AFS fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency | $ | 15 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 15 |
State and municipal | 100 |  |  | — |  |  | — |  |  | (1 | ) |  | 34 |  |  | (1 | ) |  | 2 |  |  | (39 | ) |  | (6 | ) |  | 89 |
Residential MBS | 300 |  |  | — |  |  | (11 | ) |  | (1 | ) |  | — |  |  | (34 | ) |  | 86 |  |  | (88 | ) |  | (28 | ) |  | 224 |
Commercial MBS | 44 |  |  | — |  |  | (1 | ) |  | (1 | ) |  | — |  |  | (2 | ) |  | 4 |  |  | (1 | ) |  | (4 | ) |  | 39 |
Asset-backed securities | 226 |  |  | — |  |  | 1 |  |  | (7 | ) |  | 265 |  |  | (56 | ) |  | 53 |  |  | (10 | ) |  | (2 | ) |  | 470 |
Corporate and other | 546 |  |  | — |  |  | (5 | ) |  | (9 | ) |  | 161 |  |  | (90 | ) |  | 41 |  |  | (5 | ) |  | (6 | ) |  | 633 |
Total AFS fixed maturities | 1,231 |  |  | — |  |  | (16 | ) |  | (19 | ) |  | 460 |  |  | (183 | ) |  | 186 |  |  | (143 | ) |  | (46 | ) |  | 1,470 |
Equity securities | 93 |  |  | — |  |  | (4 | ) |  | (9 | ) |  | 77 |  |  | — |  |  | — |  |  | (17 | ) |  | — |  |  | 140 |
Assets of MIE | 31 |  |  | — |  |  | (11 | ) |  | — |  |  | 6 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 26 |
Total Level 3 assets | $ | 1,355 |  |  | $ | — |  |  | $ | (31 | ) |  | $ | (28 | ) |  | $ | 543 |  |  | $ | (183 | ) |  | $ | 186 |  |  | $ | (160 | ) |  | $ | (46 | ) |  | $ | 1,636 |
Liabilities of MIE | $ | (2,701 | ) |  | $ | 2,701 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Embedded derivatives (a) | (1,160 | ) |  | — |  |  | (17 | ) |  | — |  |  | (257 | ) |  | 65 |  |  | — |  |  | — |  |  | — |  |  | (1,369 | )
Total Level 3 liabilities | $ | (3,861 | ) |  | $ | 2,701 |  |  | $ | (17 | ) |  | $ | — |  |  | $ | (257 | ) |  | $ | 65 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (1,369 | )
(a) | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $28 million in 2015.
(b) | The impact of implementing new guidance adopted in 2015, as discussed in Note A — “Accounting Policies — Managed Investment Entities.”
Fair value of financial instruments | The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements at December 31 are summarized below (in millions):
| Carrying |  | Fair Value
| Value |  | Total |  | Level 1 |  | Level 2 |  | Level 3
2017 |  |  |  |  |  |  |  |  |
Financial assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 2,338 |  |  | $ | 2,338 |  |  | $ | 2,338 |  |  | $ | — |  |  | $ | — |
Mortgage loans | 1,125 |  |  | 1,119 |  |  | — |  |  | — |  |  | 1,119 |
Policy loans | 184 |  |  | 184 |  |  | — |  |  | — |  |  | 184 |
Total financial assets not accounted for at fair value | $ | 3,647 |  |  | $ | 3,641 |  |  | $ | 2,338 |  |  | $ | — |  |  | $ | 1,303 |
Financial liabilities: |  |  |  |  |  |  |  |  |
Annuity benefits accumulated (*) | $ | 33,110 |  |  | $ | 32,461 |  |  | $ | — |  |  | $ | — |  |  | $ | 32,461 |
Long-term debt | 1,301 |  |  | 1,354 |  |  | — |  |  | 1,351 |  |  | 3 |
Total financial liabilities not accounted for at fair value | $ | 34,411 |  |  | $ | 33,815 |  |  | $ | — |  |  | $ | 1,351 |  |  | $ | 32,464 |
2016 |  |  |  |  |  |  |  |  |
Financial assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 2,107 |  |  | $ | 2,107 |  |  | $ | 2,107 |  |  | $ | — |  |  | $ | — |
Mortgage loans | 1,147 |  |  | 1,146 |  |  | — |  |  | — |  |  | 1,146 |
Policy loans | 192 |  |  | 192 |  |  | — |  |  | — |  |  | 192 |
Total financial assets not accounted for at fair value | $ | 3,446 |  |  | $ | 3,445 |  |  | $ | 2,107 |  |  | $ | — |  |  | $ | 1,338 |
Financial liabilities: |  |  |  |  |  |  |  |  |
Annuity benefits accumulated (*) | $ | 29,703 |  |  | $ | 28,932 |  |  | $ | — |  |  | $ | — |  |  | $ | 28,932 |
Long-term debt | 1,284 |  |  | 1,356 |  |  | — |  |  | 1,353 |  |  | 3 |
Total financial liabilities not accounted for at fair value | $ | 30,987 |  |  | $ | 30,288 |  |  | $ | — |  |  | $ | 1,353 |  |  | $ | 28,935 |
(*) | Excludes $206 million and $204 million of life contingent annuities in the payout phase at December 31, 2017 and 2016, respectively.

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