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Investments

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

6. Investments

SECURITIES AVAILABLE FOR SALE

The following table presents the amortized cost and fair value of our available for sale securities:


(in millions)		Amortized Cost		Allowance for Credit Losses(a)		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2023
Bonds available for sale:
U.S. government and government sponsored entities	$	6,456	$	—	$	4	$	(506)	$	5,954
Obligations of states, municipalities and political subdivisions		11,781		—		39		(1,374)		10,446
Non-U.S. governments		13,559		(4)		68		(1,899)		11,724
Corporate debt		151,989		(87)		806		(26,617)		126,091
Mortgage-backed, asset-backed and collateralized:
RMBS		19,643		(33)		826		(1,705)		18,731
CMBS		15,143		(13)		18		(1,638)		13,510
CLO/ABS		30,120		(1)		120		(1,755)		28,484
Total mortgage-backed, asset-backed and collateralized		64,906		(47)		964		(5,098)		60,725
Total bonds available for sale(b)	$	248,691	$	(138)	$	1,881	$	(35,494)	$	214,940
December 31, 2022
Bonds available for sale:
U.S. government and government sponsored entities	$	7,094	$	—	$	21	$	(496)	$	6,619
Obligations of states, municipalities and political subdivisions		13,195		—		99		(1,195)		12,099
Non-U.S. governments		15,133		(6)		91		(1,733)		13,485
Corporate debt		160,242		(132)		1,152		(23,423)		137,839
Mortgage-backed, asset-backed and collateralized:
RMBS		19,584		(37)		807		(1,537)		18,817
CMBS		15,610		(11)		14		(1,420)		14,193
CLO/ABS		25,135		—		38		(2,069)		23,104
Total mortgage-backed, asset-backed and collateralized		60,329		(48)		859		(5,026)		56,114
Total bonds available for sale(b)	$	255,993	$	(186)	$	2,222	$	(31,873)	$	226,156

(a)Represents the allowance for credit losses that has been recognized. Changes in the allowance for credit losses are recorded through Net realized gains (losses) and are not recognized in OCI.

(b)At September 30, 2023 and December 31, 2022, the fair value of bonds available for sale held by us that were below investment grade or not rated totaled $17.4 billion or 8 percent and $22.3 billion or 10 percent, respectively.

Securities Available for Sale in a Loss Position for Which No Allowance for Credit Loss Has Been Recorded

The following table summarizes the fair value and gross unrealized losses on our available for sale securities, aggregated by major investment category and length of time that individual securities have been in a continuous unrealized loss position for which no allowance for credit loss has been recorded:


		Less than 12 Months				12 Months or More				Total
(in millions)		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2023
Bonds available for sale:
U.S. government and government sponsored entities	$	4,708	$	307	$	816	$	199	$	5,524	$	506
Obligations of states, municipalities and political subdivisions		5,378		589		4,099		785		9,477		1,374
Non-U.S. governments		6,831		965		3,578		928		10,409		1,893
Corporate debt		53,646		10,739		62,852		15,812		116,498		26,551
RMBS		7,529		705		5,481		961		13,010		1,666
CMBS		6,322		770		5,851		860		12,173		1,630
CLO/ABS		10,794		536		11,640		1,219		22,434		1,755
Total bonds available for sale	$	95,208	$	14,611	$	94,317	$	20,764	$	189,525	$	35,375




December 31, 2022
Bonds available for sale:
U.S. government and government sponsored entities	$	3,493	$	368	$	1,816	$	128	$	5,309	$	496
Obligations of states, municipalities and political subdivisions		8,697		1,180		73		15		8,770		1,195
Non-U.S. governments		10,702		1,526		779		191		11,481		1,717
Corporate debt		110,683		19,756		13,778		3,609		124,461		23,365
RMBS		10,953		1,293		1,005		182		11,958		1,475
CMBS		11,620		1,094		1,728		326		13,348		1,420
CLO/ABS		16,852		1,388		4,307		681		21,159		2,069
Total bonds available for sale	$	173,000	$	26,605	$	23,486	$	5,132	$	196,486	$	31,737

At September 30, 2023, we held 32,663 individual fixed maturity securities that were in an unrealized loss position and for which no allowance for credit losses has been recorded (including 17,596 individual fixed maturity securities that were in a continuous unrealized loss position for 12 months or more). At December 31, 2022, we held 36,549 individual fixed maturity securities that were in an unrealized loss position and for which no allowance for credit losses has been recorded (including 4,048 individual fixed maturity securities that were in a continuous unrealized loss position for 12 months or more). We did not recognize the unrealized losses in earnings on these fixed maturity securities at September 30, 2023 because it was determined that such losses were due to non-credit factors. Additionally, we neither intend to sell the securities nor do we believe that it is more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. For fixed maturity securities with significant declines, we performed fundamental credit analyses on a security-by-security basis, which included consideration of credit enhancements, liquidity position, expected defaults, industry and sector analysis, forecasts and available market data.

Contractual Maturities of Fixed Maturity Securities Available for Sale

The following table presents the amortized cost and fair value of fixed maturity securities available for sale by contractual maturity:


September 30, 2023		Total Fixed Maturity Securities Available for Sale
(in millions)		Amortized Cost, Net of Allowance		Fair Value

Due in one year or less	$	8,243	$	8,120
Due after one year through five years		46,097		43,640
Due after five years through ten years		40,730		35,826
Due after ten years		88,624		66,629
Mortgage-backed, asset-backed and collateralized		64,859		60,725
Total	$	248,553	$	214,940

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

The following table presents the gross realized gains and gross realized losses from sales or maturities of our available for sale securities:


	Three Months Ended September 30,								Nine Months Ended September 30,
	2023				2022				2023				2022
(in millions)		Gross Realized Gains		Gross Realized Losses		Gross Realized Gains		Gross Realized Losses		Gross Realized Gains		Gross Realized Losses		Gross Realized Gains		Gross Realized Losses
Fixed maturity securities	$	18	$	181	$	123	$	254	$	247	$	1,203	$	406	$	1,280

For the three and nine months ended September 30, 2023, the aggregate fair value of available for sale securities sold was $3.1 billion and $19.7 billion, respectively, which resulted in net realized gains (losses) of $(163) million and $(956) million, respectively. Included within the net realized gains (losses) are $(6) million and $(125) million of net realized gains (losses) for the three and nine months ended September 30, 2023, respectively, which relate to Fortitude Re funds withheld assets. These net realized gains (losses) are included in Net realized gains (losses) on Fortitude Re funds withheld assets.

For the three and nine months ended September 30, 2022, the aggregate fair value of available for sale securities sold was $2.0 billion and $16.0 billion, respectively, which resulted in net realized gains (losses) of $(131) million and $(874) million, respectively. Included within the net realized gains (losses) are $(64) million and $(218) million of net realized gains (losses) for the three and nine months ended September 30, 2022, respectively, which relate to Fortitude Re funds withheld assets. These net realized gains (losses) are included in Net realized gains (losses) on Fortitude Re funds withheld assets.

OTHER SECURITIES MEASURED AT FAIR VALUE

The following table presents the fair value of fixed maturity securities measured at fair value based on our election of the fair value option, which are reported in the other bond securities caption in the financial statements, and equity securities measured at fair value:


(in millions)		September 30, 2023				December 31, 2022
		Fair Value	Percent of Total			Fair Value	Percent of Total
Fixed maturity securities:

Obligations of states, municipalities and political subdivisions	$	91	2	%	$	111	2	%
Non-U.S. governments		33	1			66	1
Corporate debt		2,624	49			2,392	47
Mortgage-backed, asset-backed and collateralized:
RMBS		267	5			286	6
CMBS		278	5			331	7
CLO/ABS and other collateralized		1,547	29			1,299	26
Total mortgage-backed, asset-backed and collateralized		2,092	39			1,916	39
Total fixed maturity securities		4,840	91			4,485	89
Equity securities		515	9			575	11
Total	$	5,355	100	%	$	5,060	100	%

OTHER INVESTED ASSETS

The following table summarizes the carrying amounts of other invested assets:


(in millions)		September 30, 2023		December 31, 2022
Alternative investments(a)(b)	$	11,643	$	11,809
Investment real estate(c)		2,208		2,153
All other investments(d)		2,203		1,991
Total	$	16,054	$	15,953

(a)At September 30, 2023, included hedge funds of $0.9 billion and private equity funds of $10.8 billion. At December 31, 2022, included hedge funds of $1.4 billion and private equity funds of $10.4 billion.

(b)The majority of our hedge fund investments are redeemable upon a single month or quarter’s notice, though redemption terms vary from single, immediate withdrawals, to withdrawals staggered up to eight quarters. Some of the portfolio consists of illiquid run-off or “side-pocket” positions whose liquidation horizons are uncertain and likely beyond a year after submission of the redemption notice.

(c)Represents values net of accumulated depreciation. At September 30, 2023 and December 31, 2022, the accumulated depreciation was $820 million and $786 million, respectively.

(d)Includes AIG's ownership interest in Fortitude Group Holdings, LLC (FRL), which is recorded using the measurement alternative for equity securities. Our investment in FRL totaled $156 million and $156 million at September 30, 2023 and December 31, 2022, respectively.

NET INVESTMENT INCOME

The following table presents the components of Net investment income:


Three Months Ended September 30,	2023						2022
(in millions)	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total
Available for sale fixed maturity securities, including short-term investments	$	2,697	$	221	$	2,918	$	2,150	$	256	$	2,406
Other fixed maturity securities(a)		(2)		(37)		(39)		(73)		(168)		(241)
Equity securities		41		—		41		16		—		16
Interest on mortgage and other loans		631		61		692		515		53		568
Alternative investments(b)		26		25		51		(49)		11		(38)
Real estate		8		—		8		14		—		14
Other investments(c)		64		2		66		83		11		94
Total investment income		3,465		272		3,737		2,656		163		2,819
Investment expenses		173		8		181		143		8		151
Net investment income	$	3,292	$	264	$	3,556	$	2,513	$	155	$	2,668


Nine Months Ended September 30,	2023						2022
(in millions)	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets		Total		Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets		Total
Available for sale fixed maturity securities, including short-term investments	$	7,872	$	696	$	8,568	$	6,338	$	824	$	7,162
Other fixed maturity securities(a)		18		79		97		(449)		(466)		(915)
Equity securities		135		—		135		(41)		—		(41)
Interest on mortgage and other loans		1,823		178		2,001		1,428		150		1,578
Alternative investments(b)		249		69		318		729		138		867
Real estate		28		—		28		46		—		46
Other investments(c)		100		2		102		277		14		291
Total investment income		10,225		1,024		11,249		8,328		660		8,988
Investment expenses		566		23		589		453		26		479
Net investment income	$	9,659	$	1,001	$	10,660	$	7,875	$	634	$	8,509

(a)Included in the three and nine months ended September 30, 2022 were income (loss) of $(57) million and $(208) million, respectively, related to fixed maturity securities measured at fair value that economically hedge liabilities described in (c) below.

(b)Included income from hedge funds, private equity funds and affordable housing partnerships. Hedge funds are recorded as of the balance sheet date. Private equity funds are generally reported on a one-quarter lag.

(c)Included in the three and nine months ended September 30, 2023 were income (loss) of $(1) million and $(5) million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above. Included in the three and nine months ended September 30, 2022 were income (loss) of $62 million and $194 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above.

NET REALIZED GAINS AND LOSSES

Net realized gains and losses are determined by specific identification. The net realized gains and losses are generated primarily from the following sources:

•Sales of available for sale fixed maturity securities, real estate and other alternative investments.

•Reductions to the amortized cost basis of available for sale fixed maturity securities that have been written down due to our intent to sell them or it being more likely than not that we will be required to sell them.

•Changes in the allowance for credit losses on bonds available for sale, mortgage and other loans receivable, and loans commitments.

•Most changes in the fair value of free standing and embedded derivatives, including changes in the non-performance adjustment are included in Net realized gains (losses). However, changes in derivatives designated as hedging instruments when the fair value of the hedged item is not reported in Net realized gains (losses) are excluded from Net realized gains (losses). Additionally, in conjunction with the adoption of LDTI, changes in the fair value of free standing derivatives that hedge certain MRBs are excluded from Net realized gains (losses).

•Foreign exchange gains and losses resulting from foreign currency transactions.

•Changes in fair value of the embedded derivative related to the Fortitude Re funds withheld assets.

The following table presents the components of Net realized gains (losses):


Three Months Ended September 30,		2023						2022
(in millions)	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total
Sales of fixed maturity securities	$	(157)	$	(6)	$	(163)	$	(67)	$	(64)	$	(131)


Change in allowance for credit losses on fixed maturity securities		(47)		(7)		(54)		(1)		7		6
Change in allowance for credit losses on loans		(41)		(22)		(63)		(26)		(24)		(50)
Foreign exchange transactions		(165)		(38)		(203)		(242)		(22)		(264)
Index-linked interest credited embedded derivatives, net of related hedges		129		—		129		34		—		34
All other derivatives and hedge accounting*		377		(149)		228		1,044		(13)		1,031
Sales of alternative investments and real estate investments		65		(1)		64		137		32		169
Other		10		(4)		6		22		(2)		20
Net realized gains (losses) – excluding Fortitude Re funds withheld embedded derivative		171		(227)		(56)		901		(86)		815
Net realized gains on Fortitude Re funds withheld embedded derivative		—		1,137		1,137		—		1,757		1,757
Net realized gains	$	171	$	910	$	1,081	$	901	$	1,671	$	2,572


Nine Months Ended September 30,	2023						2022
(in millions)	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total
Sales of fixed maturity securities	$	(831)	$	(125)	$	(956)	$	(656)	$	(218)	$	(874)

Change in allowance for credit losses on fixed maturity securities		(119)		(9)		(128)		(101)		(34)		(135)
Change in allowance for credit losses on loans		(129)		(48)		(177)		(21)		(26)		(47)
Foreign exchange transactions		160		(11)		149		(484)		(46)		(530)
Index-linked interest credited embedded derivatives, net of related hedges		(190)		—		(190)		217		—		217
All other derivatives and hedge accounting*		186		(198)		(12)		2,126		(21)		2,105
Sales of alternative investments and real estate investments		73		(1)		72		160		35		195
Other		(31)		(4)		(35)		3		(2)		1
Net realized gains (losses) – excluding Fortitude Re funds withheld embedded derivative		(881)		(396)		(1,277)		1,244		(312)		932
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative		—		152		152		—		7,851		7,851
Net realized gains (losses)	$	(881)	$	(244)	$	(1,125)	$	1,244	$	7,539	$	8,783

*Derivative activity related to hedging MRBs is recorded in Change in the fair value of MRBs, net. For additional disclosures about MRBs, see Note 13.

CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS

The following table presents the increase (decrease) in unrealized appreciation (depreciation) of our available for sale securities and other investments:


	Three Months Ended September 30,				Nine Months Ended September 30,

(in millions)		2023		2022		2023		2022
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturity securities	$	(7,033)	$	(12,134)	$	(3,962)	$	(50,191)
Other investments		—		—		—		(14)
Total increase (decrease) in unrealized appreciation (depreciation) of investments*	$	(7,033)	$	(12,134)	$	(3,962)	$	(50,205)

*Excludes net unrealized gains and losses attributable to businesses held for sale at September 30, 2023.

The following table summarizes the unrealized gains and losses recognized in Net investment income during the reporting period on equity securities and other investments still held at the reporting date:


Three Months Ended September 30,		2023						2022
(in millions)		Equities		Other Invested Assets		Total		Equities		Other Invested Assets		Total
Net gains (losses) recognized during the period on equity securities and other investments	$	41	$	102	$	143	$	16	$	(98)	$	(82)
Less: Net gains (losses) recognized during the period on equity securities and other investments sold during the period		19		(2)		17		26		13		39
Unrealized gains (losses) recognized during the reporting period on equity securities and other investments still held at the reporting date	$	22	$	104	$	126	$	(10)	$	(111)	$	(121)


Nine Months Ended September 30,		2023						2022
(in millions)		Equities		Other Invested Assets		Total		Equities		Other Invested Assets		Total
Net gains (losses) recognized during the period on equity securities and other investments	$	135	$	399	$	534	$	(41)	$	306	$	265
Less: Net gains (losses) recognized during the period on equity securities and other investments sold during the period		159		16		175		119		(23)		96
Unrealized gains (losses) recognized during the reporting period on equity securities and other investments still held at the reporting date	$	(24)	$	383	$	359	$	(160)	$	329	$	169

EVALUATING INVESTMENTS FOR AN ALLOWANCE FOR CREDIT LOSSES

For a discussion of our policy for evaluating investments for an allowance for credit losses, see Note 5 to the Consolidated Financial Statements in the 2022 Annual Report.

Credit Impairments

The following table presents a rollforward of the changes in allowance for credit losses on available for sale fixed maturity securities by major investment category:


Three Months Ended September 30,		2023						2022
(in millions)	Structured		Non- Structured			Total	Structured		Non- Structured			Total
Balance, beginning of period	$	47	$	78	$	125	$	26	$	149	$	175
Additions:
Securities for which allowance for credit losses were not previously recorded		12		65		77		6		25		31


Reductions:
Securities sold during the period		(1)		(16)		(17)		(1)		(45)		(46)
Addition to (release of) the allowance for credit losses on securities that had an allowance recorded in a previous period, for which there was no intent to sell before recovery of amortized cost basis		4		(27)		(23)		—		(37)		(37)
Write-offs charged against the allowance		(15)		(12)		(27)		—		(7)		(7)
Other		—		3		3		(1)		—		(1)
Balance, end of period	$	47	$	91	$	138	$	30	$	85	$	115


Nine Months Ended September 30,	2023						2022
(in millions)	Structured		Non- Structured			Total	Structured		Non- Structured			Total
Balance, beginning of year	$	46	$	140	$	186	$	8	$	90	$	98
Additions:
Securities for which allowance for credit losses were not previously recorded		30		127		157		57		181		238


Reductions:
Securities sold during the period		(4)		(42)		(46)		(2)		(86)		(88)
Addition to (release of) the allowance for credit losses on securities that had an allowance recorded in a previous period, for which there was no intent to sell before recovery of amortized cost basis		—		(29)		(29)		(32)		(71)		(103)
Write-offs charged against the allowance		(25)		(99)		(124)		—		(29)		(29)
Other		—		(6)		(6)		(1)		—		(1)
Balance, end of period	$	47	$	91	$	138	$	30	$	85	$	115

Purchased Credit Deteriorated (PCD) Securities

We purchase certain RMBS securities that have experienced more-than-insignificant deterioration in credit quality since origination. These are referred to as PCD assets. At the time of purchase an allowance is recognized for these PCD assets by adding it to the purchase price to arrive at the initial amortized cost. There is no credit loss expense recognized upon acquisition of a PCD asset. When determining the initial allowance for credit losses, management considers the historical performance of underlying assets and available market information as well as bond-specific structural considerations, such as credit enhancement and the priority of payment structure of the security. In addition, the process of estimating future cash flows includes, but is not limited to, the following critical inputs:

•Current delinquency rates;

•Expected default rates and the timing of such defaults;

•Loss severity and the timing of any recovery; and

•Expected prepayment speeds.

Subsequent to the acquisition date, the PCD assets follow the same accounting as other structured securities that are not high credit quality.

We did not purchase securities with more than insignificant credit deterioration since their origination during the nine months ended September 30, 2023 and 2022.

PLEDGED INVESTMENTS

Secured Financing and Similar Arrangements

We enter into secured financing transactions whereby certain securities are sold under agreements to repurchase (repurchase agreements), in which we transfer securities in exchange for cash, with an agreement by us to repurchase the same or substantially similar securities. Our secured financing transactions also include those that involve the transfer of securities to financial institutions in exchange for cash (securities lending agreements). In all of these secured financing transactions, the securities transferred by us (pledged collateral) may be sold or repledged by the counterparties. These agreements are recorded at their contracted amounts plus accrued interest, other than those that are accounted for at fair value.

Pledged collateral levels are monitored daily and are generally maintained at an agreed-upon percentage of the fair value of the amounts borrowed during the life of the transactions. In the event of a decline in the fair value of the pledged collateral under these secured financing transactions, we may be required to transfer cash or additional securities as pledged collateral under these agreements. At the termination of the transactions, we and our counterparties are obligated to return the amounts borrowed and the securities transferred, respectively.

The following table presents the fair value of securities pledged to counterparties under secured financing transactions, including repurchase and securities lending agreements:


(in millions)		September 30, 2023		December 31, 2022
Fixed maturity securities available for sale	$	764	$	2,968

At September 30, 2023 and December 31, 2022, amounts borrowed under repurchase and securities lending agreements totaled $733 million and $3.1 billion, respectively.

The following table presents the fair value of securities pledged under our repurchase agreements by collateral type and by remaining contractual maturity:


	Remaining Contractual Maturity of the Agreements
(in millions)	Overnight and Continuous		up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
September 30, 2023
Bonds available for sale:

Non-U.S. governments	$	—	$	38	$	—	$	—	$	—	$	38
Corporate debt	34		692		—		—		—		726
Total	$	34	$	730	$	—	$	—	$	—	$	764


	Remaining Contractual Maturity of the Agreements
(in millions)	Overnight and Continuous		up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
December 31, 2022
Bonds available for sale:
Non-U.S. governments	$	—	$	20	$	—	$	—	$	—	$	20
Corporate debt	—		2,371		577		—		—		2,948
Total	$	—	$	2,391	$	577	$	—	$	—	$	2,968

We also enter into agreements in which securities are purchased by us under reverse repurchase agreements, which are accounted for as secured financing transactions and reported as short-term investments or other assets, depending on their terms. These agreements are recorded at their contracted resale amounts plus accrued interest, other than those that are accounted for at fair value. In all reverse repurchase transactions, we take possession of or obtain a security interest in the related securities, and we have the right to sell or repledge this collateral received.

The following table presents information on the fair value of securities pledged to us under reverse repurchase agreements:


(in millions)		September 30, 2023		December 31, 2022
Securities collateral pledged to us	$	1,131	$	—

At September 30, 2023, the carrying value of reverse repurchase agreements totaled $1.1 billion.

All secured financing transactions are collateralized and margined on a daily basis consistent with market standards and subject to enforceable master netting arrangements with rights of set off. We do not currently offset any such transactions.

Insurance – Statutory and Other Deposits

The total carrying value of cash and securities deposited by our insurance subsidiaries under requirements of regulatory authorities or other insurance-related arrangements, including certain annuity-related obligations and certain reinsurance contracts, was $13.8 billion and $13.6 billion at September 30, 2023 and December 31, 2022, respectively.

Other Pledges and Restrictions

Certain of our subsidiaries are members of Federal Home Loan Banks (FHLBs) and such membership requires the members to own stock in these FHLBs. We owned an aggregate of $283 million and $239 million of stock in FHLBs at September 30, 2023 and December 31, 2022, respectively. In addition, our subsidiaries have pledged securities available for sale and residential loans associated with borrowings and funding agreements from FHLBs, with a fair value of $6.5 billion and $2.9 billion, respectively, at September 30, 2023 and $5.8 billion and $1.8 billion, respectively, at December 31, 2022.

Certain GIAs have provisions that require collateral to be posted or payments to be made by us upon a downgrade of our long-term debt ratings. The actual amount of collateral required to be posted to the counterparties in the event of such downgrades, and the aggregate amount of payments that we could be required to make, depend on market conditions, the fair value of outstanding affected transactions and other factors prevailing at and after the time of the downgrade. The fair value of securities pledged as collateral with respect to these obligations was approximately $101 million and $63 million, at September 30, 2023 and December 31, 2022, respectively. This collateral primarily consists of securities of the U.S. government and government sponsored entities and generally cannot be repledged or resold by the counterparties.

Investments held in escrow accounts or otherwise subject to restriction as to their use were $302 million and $301 million, comprised of bonds available for sale and short-term investments at September 30, 2023 and December 31, 2022, respectively.

Reinsurance transactions between AIG and Fortitude Re were structured as modco and loss portfolio transfer arrangements with funds withheld.