The Company categorizes its main risks as insurance risk, operational risk and financial risk.
Asset accumulation vehicles primarily require a fixed rate payment, often for a specified period of time, and fixed rate annuities contain surrender values that are based upon a market value adjusted formula if held for shorter periods. In addition, certain products such as corporate owned life insurance contracts and the general account portion of variable annuity products credit interest to policyholders subject to market conditions and minimum interest rate guarantees. As of December 31, 2017 and 2016, the Company had $4,728 and $5,187, respectively, of liabilities for fixed annuities and $120 and $194, respectively, of liabilities for guaranteed investment products.
In December 2017, the Company added hedge positions in the macro hedge program to reduce open equity risk exposure, which increased the sensitivity that changes in equity market returns would have on GAAP net income.
The fair values of the non-U.S. dollar denominated fixed maturities and equities at December 31, 2017 and 2016 were approximately $104 and $77, respectively. Included in these amounts are $5 and $5 at December 31, 2017 and 2016, respectively, related to non-U.S. dollar denominated fixed maturities and equities that directly support liabilities denominated in the same currencies. The currency risk of the remaining non-U.S. dollar denominated fixed maturities and equities are hedged with foreign currency swaps. The Company holds $216 of yen-denominated cash, of which $214 is derivative cash collateral pledged by counterparties and has an offsetting collateral liability. In addition, the Company holds $306 of euro-denominated cash which is hedged with foreign currency forwards.
The Company also enters into credit default swaps that assume credit risk as part of replication transactions. Replication transactions are used as an economical means to synthetically replicate the characteristics and performance of assets that are permissible investments under the Company’s investment policies. These swaps reference investment grade single corporate issuers and baskets, which include customized diversified portfolios of corporate issuers, which are established within sector concentration limits and may be divided into tranches which possess different credit ratings. As of December 31, 2017 and 2016, the notional amount related to credit derivatives that assume credit risk was $380 and $458, respectively, while the fair value was $3 and $4, respectively. These amounts do not include positions that are in offsetting relationships.
The Hartford has an intercompany liquidity agreement that allows for short-term advances of funds among The Hartford Financial Services Group, Inc. (“HFSG Holding Company”) and certain affiliates of up to $2.0 billion for liquidity and other general corporate purposes. The Connecticut Insurance Department ("CTDOI") granted approval for certain affiliated insurance companies that are parties to the agreement to treat receivables from a parent, including the HFSG Holding Company, as admitted assets for statutory accounting purposes. As of December 31, 2017, there were no amounts outstanding from the HFSG Holding Company.
Capital resources available to fund liquidity upon contractholder surrender or termination are a function of the legal entity in which the liquidity requirement resides. Obligations related to life and annuity insurance products will be generally funded by both HLIC and Hartford Life and Annuity Insurance Company ("HLAI"); obligations related to retirement and institutional investment products will be generally funded by HLIC.
The Company is a member of the Federal Home Loan Bank of Boston (“FHLBB”). Membership allows the Company access to collateralized advances, which may be used to support various spread-based business 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 the Company to pledge up to $0.9 billion in qualifying assets to secure FHLBB advances for 2018. The pledge limit is recalculated annually based on statutory admitted assets and capital and surplus. The Company would need to seek the prior approval of the CTDOI in order to exceed these limits. As of December 31, 2017, HLIC had no advances outstanding under the FHLBB facility.
Net cash provided by investing activities in 2017 primarily relates to net proceeds from available-for-sale securities of approximately $1.6 billion. Net cash provided by investing activities in 2016 primarily relates to net proceeds from available-for-sale securities of approximately $1.5 billion, partially offset by net payments for short-term investments of $769. Net cash provided by investing activities in 2015 primarily relates to net proceeds from short-term investments of approximately $1.6 billion.