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Investment Securities
 9 Months Ended
Sep. 30, 2015
Investments, Debt and Equity Securities [Abstract]  
Investment Securities

NOTE 3. INVESTMENT SECURITIES

Substantially all of our investment securities are classified as available-for-sale. These comprise mainly investment-grade debt securities supporting obligations to annuitants and policyholders in our run-off insurance operations

September 30, 2015December 31, 2014
GrossGrossGrossGross
AmortizedunrealizedunrealizedEstimatedAmortizedunrealizedunrealizedEstimated
(In millions)costgainslossesfair valuecostgainslossesfair value
Debt
U.S. corporate$19,975$3,102$(178)$22,899$19,810$3,962$(69)$23,703
   State and municipal3,972439(71)4,3404,173555(53)4,675
   Residential mortgage-backed(a)90584(5)9841,544153(5)1,692
   Commercial mortgage-backed2,295121(12)2,4052,903170(10)3,063
   Asset-backed1071(10)973048(17)295
   Corporate – non-U.S.769101(3)867908109(1)1,016
   Government – non-U.S.1,094158(1)1,2521,560152(2)1,710
   U.S. government and federal agency3,78399-3,8821,95756-2,013
Equity
   Available-for-sale11316(4)12510924(1)132
   Trading19--1921--21
Total$33,032$4,121$(285)$36,868$33,289$5,189$(158)$38,320

(a) Substantially collateralized by U.S. mortgages. At September 30, 2015, $961 million related to securities issued by government-sponsored entities and $23 million related to securities of private-label issuers. Securities issued by private-label issuers are collateralized primarily by pools of individual direct mortgage loans of financial institutions.

The fair value of investment securities decreased to $36,868 million at September 30, 2015, from $38,320 million at December 31, 2014,

ESTIMATED FAIR VALUE AND GROSS UNREALIZED LOSSES OF AVAILABLE-FOR-SALE INVESTMENT SECURITIES
In loss position for
Less than 12 months12 months or more
Gross Gross
EstimatedunrealizedEstimatedunrealized
(In millions)fair valuelosses(a)fair valuelosses(a)
September 30, 2015
Debt
   U.S. corporate$2,161$(130)$335$(48)
   State and municipal544(16)155(55)
   Residential mortgage-backed175(2)77(3)
   Commercial mortgage-backed351(8)26(4)
   Asset-backed--48(10)
   Corporate – non-U.S.41(3)3-
   Government – non-U.S.292(1)--
   U.S. government and federal agency450-1-
Equity38(4)--
Total$4,052$(164)$645$(121)(b)
December 31, 2014
Debt
   U.S. corporate$554$(16)$836$(53)
   State and municipal67(1)308(52)
   Residential mortgage-backed30-146(5)
   Commercial mortgage-backed165(1)204(9)
   Asset-backed9-42(17)
   Corporate – non-U.S.42(1)3-
   Government – non-U.S.677(2)14-
   U.S. government and federal agency705-1-
Equity6(1)--
Total$2,255$(22)$1,554$(136)

(a) Included gross unrealized losses of $1 million related to securities that had other-than-temporary impairments previously recognized at September 30, 2015.

(b) Includes debt securities held to support obligations to holders of GICs all of which are considered to be investment-grade by the major rating agencies at September 30, 2015.  

We regularly review investment securities for other-than-temporary impairment (OTTI) using both qualitative and quantitative criteria. For debt securities, our qualitative review considers our ability and intent to hold the security and the financial condition of and near-term prospects for the issuer, including whether the issuer is in compliance with the terms and covenants of the security. Our quantitative review considers whether there has been an adverse change in expected future cash flows. Unrealized losses are not indicative of the amount of credit loss that would be recognized and at September 30, 2015 are primarily due to increases in market yields subsequent to our purchase of the securities. We presently do not intend to sell the vast majority of our debt securities that are in an unrealized loss position and believe that it is not more likely than not that we will be required to sell the vast majority of these securities before anticipated recovery of our amortized cost. The methodologies and significant inputs used to measure the amount of credit loss for our investment securities during 2015 have not changed. For equity securities, we consider the duration and the severity of the unrealized loss. We believe that the unrealized loss associated with our equity securities will be recovered within the foreseeable future.

Our corporate debt portfolio comprises securities issued by public and private corporations in various industries, primarily in the U.S. Substantially all of our corporate debt securities are rated investment grade by the major rating agencies.

Our RMBS portfolio is collateralized primarily by pools of individual, direct mortgage loans, of which substantially all are in a senior position in the capital structure of the deals, not other structured products such as collateralized debt obligations. Of the total RMBS held at September 30, 2015, $961 million and $23 million related to agency and non-agency securities, respectively. Additionally, $58 million was related to residential subprime credit securities, primarily supporting obligations to annuitants and policyholders in our run-off insurance operations. Substantially all of the subprime exposure is related to securities backed by mortgage loans originated in 2005 and prior and are investment grade.

Our commercial mortgage-backed securities (CMBS) portfolio is collateralized by both diversified pools of mortgages that were originated for securitization (conduit CMBS) and pools of large loans backed by high-quality properties (large loan CMBS), about half of which were originated in 2008 and prior. The vast majority of the securities in our CMBS portfolio have investment-grade credit ratings.

PRE-TAX, OTHER-THAN-TEMPORARY IMPAIRMENTS ON INVESTMENT SECURITIES
Three months ended September 30Nine months ended September 30
(In millions)2015201420152014
Total pre-tax, OTTI recognized$2$2$21$18
Pre-tax, OTTI recognized in AOCI---(4)
Pre-tax, OTTI recognized in earnings(a)$2$2$21$14

(a) Included pre-tax, other-than-temporary impairments recorded in earnings related to equity securities of $1 million and none in the three months ended September 30, 2015 and 2014, respectively and $1 million and $2 million in the nine months ended September 30, 2015 and 2014, respectively.

CHANGES IN CUMULATIVE CREDIT LOSS IMPAIRMENTS RECOGNIZED ON DEBT SECURITIES STILL HELD
Three months ended September 30Nine months ended September 30
(In millions)2015201420152014
Cumulative credit loss impairments recognized, beginning of period $6$255$8$306
Credit loss impairments recognized
on securities not previously impaired----
Incremental credit loss impairments recognized
on securities previously impaired -2-4
Less credit loss impairments previously recognized
on securities sold during the period or that we intend to sell --253
Cumulative credit loss impairments recognized, end of period$6$257$6$257

CONTRACTUAL MATURITIES OF INVESTMENT IN AVAILABLE-FOR-SALE DEBT SECURITIES
(EXCLUDING MORTGAGE-BACKED AND ASSET-BACKED SECURITIES)
AmortizedEstimated
(In millions)costfair value
Due
    Within one year$2,162$2,171
    After one year through five years4,6564,868
    After five years through ten years4,8545,217
    After ten years17,92120,983

We expect actual maturities to differ from contractual maturities because borrowers have the right to call or prepay certain obligations.

GROSS REALIZED GAINS AND LOSSES ON AVAILABLE-FOR-SALE INVESTMENT SECURITIES
Three months ended September 30Nine months ended September 30
(In millions)2015201420152014
Gains$21$1$122$37
Losses, including impairments(6)(5)(41)(18)
    Net$15$(4)$81$19

Although we generally do not have the intent to sell any specific securities at the end of the period, in the ordinary course of managing our investment securities portfolio, we may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield and liquidity requirements and the funding of claims and obligations to policyholders. In some of our bank subsidiaries, we maintain a certain level of purchases and sales volume principally of non-U.S. government debt securities. In these situations, fair value approximates carrying value for these securities.

Proceeds from investment securities sales and early redemptions by issuers totaled $6,022 million and $623 million in the three months ended September 30, 2015 and 2014, respectively, principally from sales of U.S. government and federal agency securities in Trinity and Synchrony Financial and short-term government securities in our bank subsidiaries.

Proceeds from investment securities sales and early redemptions by issuers totaled $9,322 million and $1,995 million in the nine months ended September 30, 2015 and 2014, respectively, principally from sales of short-term government securities in our bank subsidiaries and sales of U.S. corporate and CMBS securities in our run-off insurance operations. In addition, proceeds from investment securities sales in the nine months ended September 30, 2015 included $6,486 million principally from sales of U.S. government and federal agency securities, CMBS and RMBS at Trinity and Synchrony Financial.