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Investment Securities
12 Months Ended
Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities    

AVAILABLE-FOR-SALE SECURITIES

Cost/amortized cost, unrealized gains and losses, and fair value of fixed maturity available-for-sale securities by type were as follows:
(dollars in millions)
 
Cost/
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 

 
 

 
 

 
 

Fixed maturity available-for-sale securities:
 
 

 
 

 
 

 
 

U.S. government and government sponsored entities
 
$
21

 
$

 
$

 
$
21

Obligations of states, municipalities, and political subdivisions
 
91

 

 
(1
)
 
90

Certificates of deposit and commercial paper
 
63

 

 

 
63

Non-U.S. government and government sponsored entities
 
145

 

 
(2
)
 
143

Corporate debt
 
1,027

 
2

 
(32
)
 
997

Mortgage-backed, asset-backed, and collateralized:
 
 

 
 

 
 

 
 
RMBS
 
130

 

 
(2
)
 
128

CMBS
 
72

 

 
(1
)
 
71

CDO/ABS
 
94

 
1

 
(1
)
 
94

Total
 
$
1,643

 
$
3

 
$
(39
)
 
$
1,607

 
 
 
 
 
 
 
 
 
December 31, 2017
 
 

 
 

 
 

 
 

Fixed maturity available-for-sale securities:
 
 

 
 

 
 

 
 

U.S. government and government sponsored entities
 
$
28

 
$

 
$

 
$
28

Obligations of states, municipalities, and political subdivisions
 
135

 

 

 
135

Certificates of deposit and commercial paper
 
60

 

 

 
60

Non-U.S. government and government sponsored entities
 
126

 

 
(1
)
 
125

Corporate debt
 
941

 
12

 
(5
)
 
948

Mortgage-backed, asset-backed, and collateralized:
 
 

 
 

 
 

 
 
RMBS
 
100

 

 
(1
)
 
99

CMBS
 
88

 

 
(1
)
 
87

CDO/ABS
 
96

 

 

 
96

Total
 
$
1,574

 
$
12

 
$
(8
)
 
$
1,578



Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position were as follows:
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
(dollars in millions)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 

 
 

 
 

 
 

 
 

 
 

U.S. government and government sponsored entities
 
$
3

 
$

 
$
16

 
$

 
$
19

 
$

Obligations of states, municipalities, and political subdivisions
 
10

 

 
57

 
(1
)
 
67

 
(1
)
Non-U.S. government and government sponsored entities
 
19

 
(1
)
 
97

 
(1
)
 
116

 
(2
)
Corporate debt
 
377

 
(14
)
 
448

 
(18
)
 
825

 
(32
)
RMBS
 
23

 

 
78

 
(2
)
 
101

 
(2
)
CMBS
 
10

 

 
54

 
(1
)
 
64

 
(1
)
CDO/ABS
 
18

 

 
33

 
(1
)
 
51

 
(1
)
Total
 
$
460

 
$
(15
)
 
$
783

 
$
(24
)
 
$
1,243

 
$
(39
)
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 

 
 

 
 

 
 

 
 

 
 

U.S. government and government sponsored entities
 
$
21

 
$

 
$
3

 
$

 
$
24

 
$

Obligations of states, municipalities, and political subdivisions
 
65

 

 
20

 

 
85

 

Non-U.S. government and government sponsored entities
 
89

 
(1
)
 
13

 

 
102

 
(1
)
Corporate debt
 
387

 
(3
)
 
93

 
(2
)
 
480

 
(5
)
RMBS
 
40

 

 
25

 
(1
)
 
65

 
(1
)
CMBS
 
40

 

 
38

 
(1
)
 
78

 
(1
)
CDO/ABS
 
48

 

 
26

 

 
74

 

Total
 
$
690

 
$
(4
)
 
$
218

 
$
(4
)
 
$
908

 
$
(8
)


On a lot basis, we had 1,767 and 1,229 investment securities in an unrealized loss position at December 31, 2018 and December 31, 2017, respectively. We do not consider the unrealized losses to be credit-related, as these unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase. Additionally, at December 31, 2018, other-than-temporary impairments on investment securities that we intend to sell were immaterial. We do not have plans to sell any of the remaining investment securities with unrealized losses as of December 31, 2018, and we believe it is more likely than not that we would not be required to sell such investment securities before recovery of their amortized cost.

We continue to monitor unrealized loss positions for potential impairments. During 2018, other-than-temporary impairment credit losses, primarily on corporate debt, in investment revenues were immaterial. No impairment was recognized during 2017 and 2016.

There were no material additions or reductions in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities during 2018, 2017, and 2016.

The proceeds of available-for-sale securities sold or redeemed and the resulting net realized gains (losses) were as follows:
(dollars in millions)
 
 
 
 
 
 
Years Ended December 31,
 
2018
 
2017
 
2016
 
 
 
 
 
 
 
Proceeds from sales and redemptions
 
$
341

 
$
508

 
$
518

 
 
 
 
 
 
 
Realized gains
 
$
1

 
$
15

 
$
16

Realized losses
 
(2
)
 
(1
)
 
(1
)
Net realized gains (losses)
 
$
(1
)
 
$
14

 
$
15



Contractual maturities of fixed-maturity available-for-sale securities at December 31, 2018 were as follows:
(dollars in millions)
 
Fair
Value
 
Amortized
Cost
 
 
 
 
 
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
 
 

 
 

Due in 1 year or less
 
$
184

 
$
184

Due after 1 year through 5 years
 
526

 
534

Due after 5 years through 10 years
 
410

 
421

Due after 10 years
 
194

 
208

Mortgage-backed, asset-backed, and collateralized securities
 
293

 
296

Total
 
$
1,607

 
$
1,643



Actual maturities may differ from contractual maturities since issuers and borrowers may have the right to call or prepay obligations. We may sell investment securities before maturity for general corporate and working capital purposes and to achieve certain investment strategies.

The fair value of securities on deposit with third parties totaled $515 million and $537 million at December 31, 2018 and 2017, respectively.

OTHER SECURITIES

The fair value of other securities by type was as follows:
(dollars in millions)
 
 
 
 
December 31,
 
2018
 
2017
 
 
 
 
 
Fixed maturity other securities:
 
 

 
 

Bonds
 
 

 
 

Non-U.S. government and government sponsored entities
 
$
1

 
$
1

Corporate debt
 
43

 
68

Mortgage-backed, asset-backed, and collateralized bonds
 
2

 
5

Total bonds
 
46

 
74

Preferred stock (a)
 
19

 
20

Common stock (a)
 
21

 
23

Other long-term investments
 
1

 
1

Total (b)
 
$
87

 
$
118


                                     
(a)
The Company employs an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments.

(b) Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of $1 million at December 31, 2017, which is classified as a restricted investment and carried at cost.

Net unrealized losses on other securities held at December 31, 2018 were $7 million. Net unrealized gains and losses during 2017 and 2016 were immaterial.

Net realized gains and losses on other securities sold or redeemed during 2018 and 2017 were immaterial. During 2016, the net realized gains on other securities sold or redeemed were $7 million. We report these gains and losses in investment revenues.

Other securities are those securities for which the fair value option was elected. Our remaining trading securities were sold in the first quarter of 2016.