Note 7. Investment gains/losses and other-than-temporary impairment losses on investments

Investment gains/losses are summarized below (in millions).

	Second Quarter						First Six Months
	2012			2011			2012			2011
Fixed maturity securities —
Gross gains from sales and other disposals	$	58		$	94		$	91		$	176
Gross losses from sales and other disposals		(329	)		(4	)		(345	)		(4	)
Equity securities —
Gross gains from sales and other disposals		385			1,267			573			1,268
Gross losses from sales and other disposals		(7	)		(4	)		(7	)		(14	)
Other		18			(64	)		44			(38	)
	$	125		$	1,289		$	356		$	1,388

Net investment gains/losses are reflected in the Consolidated Statements of Earnings as follows.

	Second Quarter				First Six Months
	2012		2011		2012		2011
Insurance and other	$	102	$	1,128	$	332	$	1,214
Finance and financial products		23		161		24		174
	$	125	$	1,289	$	356	$	1,388

In the second quarter of 2011, we realized an investment gain of $1.25 billion from the redemption of our investment in GS Preferred.

Other-than-temporary impairment (“OTTI”) losses were as follows (in millions).

	Second Quarter				First Six Months
	2012		2011		2012		2011
Equity securities	$	—	$	—	$	—	$	506
Fixed maturity securities		—		—		337		—
	$	—	$	—	$	337	$	506

We record investments in equity and fixed maturity securities classified as available-for-sale at fair value and record the difference between fair value and cost in other comprehensive income. OTTI losses recognized in earnings represent reductions in the cost basis of the investment, but not the fair value. Accordingly, such losses that are included in earnings are generally offset by a corresponding credit to other comprehensive income and therefore have no net effect on shareholders’ equity as of the balance sheet date.

In the first quarter of 2012, we recorded OTTI losses of $337 million on certain fixed maturity investments issued by Texas Competitive Electric Holdings where we concluded that we were unlikely to receive all of the remaining contractual interest and principal amounts when due. In the first quarter of 2011, we recorded OTTI losses of $506 million related to certain of our investments in equity securities. The OTTI losses included $337 million with respect to 103.6 million shares of our investment in Wells Fargo & Company (“Wells Fargo”) common stock. These shares had an aggregate original cost of $3,621 million. At that time, we also held an additional 255.4 million shares of Wells Fargo which were acquired at an aggregate cost of $4,394 million and which had unrealized gains of $3,704 million as of March 31, 2011. Due to the length of time that certain of our Wells Fargo shares were in a continuous unrealized loss position and because we account for realized gains and losses from dispositions on a specific identification basis, accounting regulations required us to record the unrealized losses in earnings. However, the unrealized gains were not reflected in earnings but were instead recorded directly in shareholders’ equity as a component of accumulated other comprehensive income.