HELD-FOR-SALE CLASSIFICATION

9 Months Ended

Sep. 30, 2017

4. Held-For-Sale Classification

Held-For-Sale Classification

We report a business as held-for-sale when management has approved the sale or received approval to sell the business and is committed to a formal plan, the business is available for immediate sale, the business is being actively marketed, the sale is anticipated to occur during the next 12 months and certain other specified criteria are met. A business classified as held-for-sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value, a loss is recognized.

Assets and liabilities related to the businesses classified as held-for-sale are separately reported in our Consolidated Balance Sheets beginning in the period in which the business is classified as held-for-sale.

Fuji Life and AIG United Guaranty Insurance (Asia) Limited, both previously classified as held-for-sale, were sold on April 30, 2017 and July 1, 2017, respectively. At September 30, 2017, we had no businesses classified as held-for-sale.

On October 18, 2016, we entered into agreements to sell certain insurance operations to Fairfax Financial Holdings Limited (Fairfax). The agreements include the sale of our subsidiary operations in Argentina, Chile, Colombia, Uruguay, Venezuela and Turkey. Fairfax will also acquire renewal rights for the portfolios of local business written by our operations in Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia, and assume certain of our operating assets and employees. Total cash consideration to us is expected to be approximately $234 million. The transaction is closing on a country-by-country basis as the regulatory approvals are obtained. In the second quarter of 2017, the sale of operations in Turkey as well as the renewal rights in Bulgaria, the Czech Republic, Hungary, Poland and Slovakia were completed, which resulted in total cash proceeds of $48 million. In the third quarter of 2017, the sale of the operations in Colombia, Chile and Argentina were completed, which resulted in cash proceeds of $168 million. Substantially all of the operations and renewal rights that we agreed to sell Fairfax were sold at September 30, 2017.

The following table summarizes the components of assets and liabilities held-for-sale on the Condensed Consolidated Balance Sheets at December 31, 2016*:

	December 31,
(in millions)		2016
Assets:
Fixed maturity securities	$	6,045
Equity securities		149
Mortgage and other loans receivable, net		137
Other invested assets		2
Short-term investments		130
Cash		133
Accrued investment income		21
Premiums and other receivables, net of allowance		351
Reinsurance assets, net of allowance		8
Deferred policy acquisition costs		471
Other assets		273
Assets of businesses held for sale		7,720
Less: Loss Accrual		(521)
Total assets held for sale	$	7,199
Liabilities:
Liability for unpaid losses and loss adjustment expenses	$	402
Unearned premiums		297
Future policy benefits for life and accident and health insurance contracts		4,579
Other policyholder funds		378
Other liabilities		450
Total liabilities held for sale	$	6,106

* Excludes net intercompany assets of $384 million at December 31, 2016, that are eliminated in consolidation.