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INVESTMENT SECURITIES
 3 Months Ended
Mar. 31, 2015
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES
INVESTMENT SECURITIES
Investment securities classified as current and long-term were as follows at March 31, 2015 and December 31, 2014, respectively:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(in millions)
March 31, 2015
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government
corporations and agencies:
 
 
 
 
 
 
 
U.S. Treasury and agency obligations
$
356

 
$
10

 
$
—

 
$
366

Mortgage-backed securities
1,704

 
56

 
(2
)
 
1,758

Tax-exempt municipal securities
2,628

 
132

 
(4
)
 
2,756

Mortgage-backed securities:
 
 
 
 
 
 
 
Residential
16

 
—

 
—

 
16

Commercial
890

 
21

 
(20
)
 
891

Asset-backed securities
138

 
1

 
—

 
139

Corporate debt securities
3,318

 
333

 
(5
)
 
3,646

Total debt securities
$
9,050

 
$
553

 
$
(31
)
 
$
9,572

December 31, 2014
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government
corporations and agencies:
 
 
 
 
 
 
 
U.S. Treasury and agency obligations
$
365

 
$
10

 
$
(1
)
 
$
374

Mortgage-backed securities
1,453

 
50

 
(5
)
 
1,498

Tax-exempt municipal securities
2,931

 
140

 
(3
)
 
3,068

Mortgage-backed securities:
 
 
 
 
 
 
 
Residential
17

 
—

 
—

 
17

Commercial
846

 
16

 
(19
)
 
843

Asset-backed securities
28

 
1

 
—

 
29

Corporate debt securities
3,432

 
299

 
(13
)
 
3,718

Total debt securities
$
9,072

 
$
516

 
$
(41
)
 
$
9,547


Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at March 31, 2015 and December 31, 2014, respectively:
 
Less than 12 months
 
12 months or more
 
Total
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
(in millions)
March 31, 2015
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and other U.S.
government corporations
and agencies:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
obligations
$
47

 
$
—

 
$
24

 
$
—

 
$
71

 
$
—

Mortgage-backed
securities
57

 
—

 
98

 
(2
)
 
155

 
(2
)
Tax-exempt municipal
securities
265

 
(3
)
 
30

 
(1
)
 
295

 
(4
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Residential
—

 
—

 
5

 
—

 
5

 
—

Commercial
50

 
(1
)
 
262

 
(19
)
 
312

 
(20
)
Asset-backed securities
27

 
—

 
—

 
—

 
27

 
—

Corporate debt securities
173

 
(3
)
 
40

 
(2
)
 
213

 
(5
)
Total debt securities
$
619

 
$
(7
)
 
$
459

 
$
(24
)
 
$
1,078

 
$
(31
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and other U.S.
government corporations
and agencies:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
obligations
$
79

 
$
—

 
$
80

 
$
(1
)
 
$
159

 
$
(1
)
Mortgage-backed
securities
22

 
—

 
320

 
(5
)
 
342

 
(5
)
Tax-exempt municipal
securities
131

 
(1
)
 
118

 
(2
)
 
249

 
(3
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Residential
1

 
—

 
4

 
—

 
5

 
—

Commercial
31

 
(1
)
 
267

 
(18
)
 
298

 
(19
)
Asset-backed securities
13

 
—

 
—

 
—

 
13

 
—

Corporate debt securities
219

 
(6
)
 
128

 
(7
)
 
347

 
(13
)
Total debt securities
$
496

 
$
(8
)
 
$
917

 
$
(33
)
 
$
1,413

 
$
(41
)

Approximately 97% of our debt securities were investment-grade quality, with a weighted average credit rating of AA- by S&P at March 31, 2015. Most of the debt securities that were below investment-grade were rated BB, the higher end of the below investment-grade rating scale. At March 31, 2015, 7% of our tax-exempt municipal securities were pre-refunded, generally with U.S. government and agency securities. Tax-exempt municipal securities that were not pre-refunded were diversified among general obligation bonds of U.S. states and local municipalities as well as special revenue bonds. General obligation bonds, which are backed by the taxing power and full faith of the issuer, accounted for 35% of the tax-exempt municipals that were not pre-refunded in the portfolio. Special revenue bonds, issued by a municipality to finance a specific public works project such as utilities, water and sewer, transportation, or education, and supported by the revenues of that project, accounted for the remaining 65% of these municipals. Our general obligation bonds are diversified across the United States with no individual state exceeding 9%. In addition, 16% of our tax-exempt securities were insured by bond insurers and had an equivalent weighted average S&P credit rating of AA exclusive of the bond insurers’ guarantee. Our investment policy limits investments in a single issuer and requires diversification among various asset types.
The recoverability of our non-agency commercial mortgage-backed securities is supported by factors such as seniority, underlying collateral characteristics and credit enhancements. At March 31, 2015, these commercial mortgage-backed securities primarily were composed of senior tranches having high credit support. The weighted average credit rating of all commercial mortgage-backed securities was AA+ at March 31, 2015.
The percentage of corporate securities associated with the financial services industry was 22% at March 31, 2015 and 21% at December 31, 2014.
All issuers of securities we own that were trading at an unrealized loss at March 31, 2015 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time the securities were purchased. At March 31, 2015, we did not intend to sell the securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these securities before recovery of their amortized cost basis. As a result, we believe that the securities with an unrealized loss were not other-than-temporarily impaired at March 31, 2015.
The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the three months ended March 31, 2015 and 2014:
 
Three months ended
March 31,
 
2015
 
2014
 
(in millions)
Gross realized gains
$
17

 
$
1

Gross realized losses
(8
)
 
—

Net realized capital gains
$
9

 
$
1


There were no material other-than-temporary impairments for the three months ended March 31, 2015 or 2014.
The contractual maturities of debt securities available for sale at March 31, 2015, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
Amortized
Cost
 
Fair
Value
 
(in millions)
Due within one year
$
478

 
$
482

Due after one year through five years
1,918

 
2,033

Due after five years through ten years
1,795

 
1,906

Due after ten years
2,111

 
2,347

Mortgage and asset-backed securities
2,748

 
2,804

Total debt securities
$
9,050

 
$
9,572