Debt Securities

12 Months Ended

Dec. 31, 2021

Available For Sale Securities [Abstract]

NOTE 4. Debt Securities:

Investments in debt securities, classified as available-for-sale, are as follows:

	Amortized cost		Gross unrealized					Estimated fair value
(in millions)	Amortized cost		gains		losses			Estimated fair value
December 31, 2021
U.S. Treasury bonds	$	123	$	1	$	(1	)	$	123
Municipal bonds		1,607		59		(17	)		1,649
Foreign government bonds		228		2		(3	)		227
Governmental agency bonds		175		3		(1	)		177
Governmental agency mortgage-backed securities		5,620		34		(47	)		5,607
U.S. corporate debt securities		1,071		19		(9	)		1,081
Foreign corporate debt securities		493		9		(4	)		498
	$	9,317	$	127	$	(82	)	$	9,362
December 31, 2020
U.S. Treasury bonds	$	80	$	1	$	—		$	81
Municipal bonds		1,168		81		(1	)		1,248
Foreign government bonds		194		6		(1	)		199
Governmental agency bonds		254		10		—			264
Governmental agency mortgage-backed securities		3,402		74		(2	)		3,474
U.S. corporate debt securities		638		44		—			682
Foreign corporate debt securities		385		22		—			407
	$	6,121	$	238	$	(4	)	$	6,355

Sales of debt securities resulted in realized gains of $29 million, $18 million and $12 million, realized losses of $9 million, $3 million and $6 million, and proceeds of $1.1 billion, $759 million and $1.1 billion for the years ended December 31, 2021, 2020 and 2019, respectively.

Investments in debt securities in an unrealized loss position, based on length of time, are as follows:

	Less than 12 months					12 months or longer					Total
(in millions)	Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses
December 31, 2021
U.S. Treasury bonds	$	76	$	(1	)	$	—	$	—		$	76	$	(1	)
Municipal bonds		684		(17	)		—		—			684		(17	)
Foreign government bonds		103		(1	)		33		(2	)		136		(3	)
Governmental agency bonds		73		(1	)		—		—			73		(1	)
Governmental agency mortgage-backed securities		4,036		(47	)		—		—			4,036		(47	)
U.S. corporate debt securities		533		(9	)		—		—			533		(9	)
Foreign corporate debt securities		234		(4	)		—		—			234		(4	)
	$	5,739	$	(80	)	$	33	$	(2	)	$	5,772	$	(82	)
December 31, 2020
Municipal bonds		74		(1	)		—		—			74		(1	)
Foreign government bonds		67		(1	)		—		—			67		(1	)
Governmental agency mortgage-backed securities		288		(1	)		100		(1	)		388		(2	)
	$	429	$	(3	)	$	100	$	(1	)	$	529	$	(4	)

Based on the Company’s review of its debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, it determined that the losses were due to non-credit factors. As such, the Company does not consider these securities to be credit impaired at December 31, 2021.

In determining credit losses on its debt securities in an unrealized loss position, the Company considers certain factors that may include, among others, severity of the unrealized loss, security type, industry sector, credit rating, profitability and stock performance.

Investments in debt securities at December 31, 2021, by contractual maturities, are as follows:

(in millions)	Due in one year or less		Due after one through five years		Due after five through ten years		Due after ten years		Total
U.S. Treasury bonds
Amortized cost	$	16	$	58	$	25	$	24	$	123
Estimated fair value	$	16	$	58	$	25	$	24	$	123
Municipal bonds
Amortized cost		24		103		812		668		1,607
Estimated fair value		25		107		829		688		1,649
Foreign government bonds
Amortized cost		38		107		73		10		228
Estimated fair value		38		108		71		10		227
Governmental agency bonds
Amortized cost		18		58		32		67		175
Estimated fair value		18		59		32		68		177
U.S. corporate debt securities
Amortized cost		45		546		402		78		1,071
Estimated fair value		45		553		401		82		1,081
Foreign corporate debt securities
Amortized cost		35		267		145		46		493
Estimated fair value		36		269		145		48		498
Total debt securities, excluding mortgage-backed securities
Amortized cost	$	176	$	1,139	$	1,489	$	893	$	3,697
Estimated fair value	$	178	$	1,154	$	1,503	$	920	$	3,755
Total mortgage-backed securities
Amortized cost										5,620
Estimated fair value										5,607
Total debt securities
Amortized cost									$	9,317
Estimated fair value									$	9,362

Mortgage-backed securities, which include contractual terms to maturity, are not categorized by contractual maturity as borrowers may have the right to call or prepay obligations with, or without, call or prepayment penalties.

The composition of the debt securities portfolio at December 31, 2021, by credit rating, is as follows:

	A- or higher A				BBB+ to BBB-				Non-Investment Grade				Total
(dollars in millions)	Estimated fair value		Percentage		Estimated fair value		Percentage		Estimated fair value		Percentage		Estimated fair value
Debt securities:
U.S. Treasury bonds	$	123		100.0	$	—		—	$	—		—	$	123
Municipal bonds		1,605		97.3		43		2.6		1		0.1		1,649
Foreign government bonds		214		94.3		10		4.4		3		1.3		227
Governmental agency bonds		177		100.0		—		—		—		—		177
Governmental agency mortgage-backed securities		5,607		100.0		—		—		—		—		5,607
U.S. corporate debt securities		447		41.4		436		40.3		198		18.3		1,081
Foreign corporate debt securities		206		41.4		243		48.8		49		9.8		498
	$	8,379		89.5	$	732		7.8	$	251		2.7	$	9,362

Included in debt securities at December 31, 2021, were bank loans totaling $159 million, of which $154 million were non-investment grade; high yield corporate debt securities totaling $83 million, all of which were non-investment grade; and emerging market debt securities totaling $93 million, of which $13 million were non-investment grade.

The composition of the debt securities portfolio in an unrealized loss position at December 31, 2021, by credit rating, is as follows:

	A- or higher A				BBB+ to BBB-				Non-Investment Grade				Total
(dollars in millions)	Estimated fair value		Percentage		Estimated fair value		Percentage		Estimated fair value		Percentage		Estimated fair value
Debt securities:
U.S. Treasury bonds	$	76		100.0	$	—		—	$	—		—	$	76
Municipal bonds		666		97.4		17		2.5		1		0.1		684
Foreign government bonds		131		96.4		4		2.9		1		0.7		136
Governmental agency bonds		73		100.0		—		—		—		—		73
Governmental agency mortgage-backed securities		4,036		100.0		—		—		—		—		4,036
U.S. corporate debt securities		252		47.3		177		33.2		104		19.5		533
Foreign corporate debt securities		115		49.2		93		39.7		26		11.1		234
	$	5,349		92.7	$	291		5.0	$	132		2.3	$	5,772

Debt securities in an unrealized loss position at December 31, 2021, included bank loans totaling $86 million, of which $84 million were non-investment grade; high yield corporate debt securities totaling $41 million, all of which were non-investment grade; and emerging market debt securities totaling $43 million, of which $6 million were non-investment grade.

The credit ratings in the above tables reflect published ratings obtained from globally recognized securities rating agencies. If a security was rated differently among the rating agencies, the lowest rating was selected. Governmental agency mortgage-backed securities are not rated by any of the ratings agencies; however, these securities have been included in the above table in the “A- or higher” rating category because the payments of principal and interest are guaranteed by the governmental agency that issued the security.