INVESTMENTS

Fixed Maturities

The amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows:



	Amortized		Gross Unrealized				Fair
(at March 31, 2019, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,029	$	7	$	6	$	2,030
Obligations of states, municipalities and political subdivisions:
Local general obligation	14,879		468		14		15,333
Revenue	9,757		336		8		10,085
State general obligation	1,300		37		2		1,335
Pre-refunded	2,515		79		—		2,594
Total obligations of states, municipalities and political subdivisions	28,451		920		24		29,347
Debt securities issued by foreign governments	1,184		12		2		1,194
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	2,601		64		16		2,649
All other corporate bonds	29,873		482		156		30,199
Redeemable preferred stock	78		3		—		81
Total	$	64,216	$	1,488	$	204	$	65,500



	Amortized		Gross Unrealized				Fair
(at December 31, 2018, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,076	$	4	$	16	$	2,064
Obligations of states, municipalities and political subdivisions:
Local general obligation	14,473		219		120		14,572
Revenue	9,755		172		74		9,853
State general obligation	1,329		18		13		1,334
Pre-refunded	2,772		80		—		2,852
Total obligations of states, municipalities and political subdivisions	28,329		489		207		28,611
Debt securities issued by foreign governments	1,255		7		5		1,257
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	2,557		54		38		2,573
All other corporate bonds	29,307		156		583		28,880
Redeemable preferred stock	77		2		—		79
Total	$	63,601	$	712	$	849	$	63,464

Pre-refunded bonds of $2.59 billion and $2.85 billion at March 31, 2019 and December 31, 2018, respectively, were bonds for which states or municipalities have established irrevocable trusts, almost exclusively comprised of U.S. Treasury securities and obligations of U.S. government and government agencies and authorities. These trusts were created to fund the payment of principal and interest due under the bonds.

Proceeds from sales of fixed maturities classified as available for sale were $769 million and $1.09 billion during the three months ended March 31, 2019 and 2018, respectively. Gross gains of $21 million and $6 million and gross losses of $4 million and $6 million were realized on those sales during the three months ended March 31, 2019 and 2018, respectively.

Equity Securities

The cost and fair value of investments in equity securities were as follows:



							Fair
(at March 31, 2019, in millions)	Cost		Gross Gains		Gross Losses		Value
Public common stock	$	339	$	24	$	6	$	357
Non-redeemable preferred stock	36		7		—		43
Total	$	375	$	31	$	6	$	400



							Fair
(at December 31, 2018, in millions)	Cost		Gross Gains		Gross Losses		Value
Public common stock	$	338	$	2	$	24	$	316
Non-redeemable preferred stock	44		8		—		52
Total	$	382	$	10	$	24	$	368

For the three months ended March 31, 2019, the Company recognized $39 million of net gains on equity securities still held as of March 31, 2019. For the three months ended March 31, 2018, the Company recognized $13 million of net losses on equity securities still held as of March 31, 2018.

Unrealized Investment Losses

The following tables summarize, for all investments in an unrealized loss position at March 31, 2019 and December 31, 2018, the aggregate fair value and gross unrealized loss by length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4 herein and in note 4 of notes to the consolidated financial statements in the Company’s 2018 Annual Report. The Company also relies upon estimates of several factors in its review and evaluation of individual investments, using the process described in note 1 of notes to the consolidated financial statements in the Company’s 2018 Annual Report to determine whether such investments are other-than-temporarily impaired.



	Less than 12 months				12 months or longer				Total
(at March 31, 2019, in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	51	$	—	$	1,056	$	6	$	1,107	$	6
Obligations of states, municipalities and political subdivisions	103		—		2,464		24		2,567		24
Debt securities issued by foreign governments	15		—		255		2		270		2
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	32		—		1,333		16		1,365		16
All other corporate bonds	551		7		9,622		149		10,173		156
Total fixed maturities	$	752	$	7	$	14,730	$	197	$	15,482	$	204



	Less than 12 months				12 months or longer				Total
(at December 31, 2018, in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	484	$	5	$	1,011	$	11	$	1,495	$	16
Obligations of states, municipalities and political subdivisions	5,241		82		3,298		125		8,539		207
Debt securities issued by foreign governments	96		—		328		5		424		5
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	593		9		1,070		29		1,663		38
All other corporate bonds	12,622		303		6,872		280		19,494		583
Total fixed maturities	$	19,036	$	399	$	12,579	$	450	$	31,615	$	849

At March 31, 2019, the amount of gross unrealized losses for all fixed maturity investments reported at fair value for which fair value was less than 80% of amortized cost was not significant.

Impairment Charges

Impairment charges included in net realized investment gains (losses) in the consolidated statement of income were $1 million and $0 for the three months ended March 31, 2019 and 2018, respectively.

The cumulative amount of credit losses on fixed maturities held at March 31, 2019 and 2018 that were recognized in the consolidated statement of income from other-than-temporary impairments (OTTI) and for which a portion of the OTTI was recognized in other comprehensive income (loss) in the consolidated balance sheet was $56 million and $75 million, respectively. These credit losses represent less than 1% of the fixed maturity portfolio on a pre-tax basis and less than 1% of shareholders’ equity on an after-tax basis at both dates. There were no significant changes in the credit component of OTTI during the three months ended March 31, 2019 and 2018 compared to what was disclosed in note 3 of notes to the consolidated financial statements in the Company’s 2018 Annual Report.