Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities |
AVAILABLE-FOR-SALE SECURITIES Cost/amortized cost, allowance for credit losses, unrealized gains and losses, and fair value of fixed maturity available-for-sale securities by type were as follows:
* There was no allowance for credit losses related to our investment securities as of March 31, 2020.
* The balances reported as of December 31, 2019 are not subject to the adoption of ASU 2016-13 on January 1, 2020 and continue to be reported under ASC 320, Investments – Debt and Equity Securities. As of March 31, 2020, interest receivables reported in “Other assets” totaled $13 million, and no amounts were reversed from investment revenue for available-for-sale securities. Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position without an allowance for credit losses were as follows:
* The balances reported as of December 31, 2019 are not subject to the adoption of ASU 2016-13 on January 1, 2020 and continue to be reported under ASC 320, Investments – Debt and Equity Securities. On a lot basis, we had 865 and 398 investment securities in an unrealized loss position at March 31, 2020 and December 31, 2019, 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 March 31, 2020, there were no credit impairments on investment securities that we intend to sell. We do not have plans to sell any of the remaining investment securities with unrealized losses as of March 31, 2020, 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 credit impairments. During the three months ended March 31, 2020, there were no credit impairments related to our investment securities. Therefore, there were no material additions or reductions in the allowance for credit losses (impairments recognized or reversed in earnings) on credit impaired available-for-sale securities during the three months ended March 31, 2020. Prior to the adoption of ASU 2016-13, other-than-temporary impairment losses, primarily on corporate debt, in investment revenues were immaterial during the three months ended March 31, 2019. 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 the three months ended March 31, 2019. The proceeds of available-for-sale securities sold or redeemed during the three months ended March 31, 2020 and 2019 totaled $58 million and $29 million, respectively. The net realized gains and losses were immaterial during the three months ended March 31, 2020 and 2019. Contractual maturities of fixed-maturity available-for-sale securities at March 31, 2020 were as follows:
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 $605 million and $633 million at March 31, 2020 and December 31, 2019, respectively. OTHER SECURITIES The fair value of other securities by type was as follows:
* We employ an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments. Net unrealized losses on other securities held were $13 million for the three months ended March 31, 2020. Net unrealized gains on other securities held were $4 million for the three months ended March 31, 2019. We report these net unrealized gains and losses in investment revenue. Net realized gains and losses on other securities sold or redeemed are included in investment revenue and were immaterial for the three months ended March 31, 2020 and 2019. We report these net gains and losses in investment revenue. Other securities include equity securities and those securities for which the fair value option was elected.
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