Investments

3 Months Ended

Mar. 31, 2012

Investments disclosure

Investments disclosure [Text Block]

3.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, 2012, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,373	$	89	$	—	$	2,462
Obligations of states, municipalities and political subdivisions:
Pre-refunded	7,362		571		—		7,933
All other	28,971		2,137		26		31,082
Total obligations of states, municipalities and political subdivisions	36,333		2,708		26		39,015
Debt securities issued by foreign governments	2,314		78		1		2,391
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	3,227		253		11		3,469
All other corporate bonds	16,504		1,111		39		17,576
Redeemable preferred stock	26		4		—		30
Total	$	60,777	$	4,243	$	77	$	64,943

	Amortized		Gross Unrealized				Fair
(at December 31, 2011, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,396	$	101	$	—	$	2,497
Obligations of states, municipalities and political subdivisions:
Pre-refunded	6,820		513		1		7,332
All other	29,391		2,303		4		31,690
Total obligations of states, municipalities and political subdivisions	36,211		2,816		5		39,022
Debt securities issued by foreign governments	2,228		91		1		2,318
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	3,288		249		22		3,515
All other corporate bonds	15,845		1,066		61		16,850
Redeemable preferred stock	26		4		—		30
Total	$	59,994	$	4,327	$	89	$	64,232

Pre-refunded bonds of $7.93 billion and $7.33 billion at March 31, 2012 and December 31, 2011, respectively, were bonds for which an irrevocable trust has been established to fund the remaining payments of principal and interest.

Equity Securities

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

			Gross Unrealized				Fair
(at March 31, 2012, in millions)	Cost		Gains		Losses		Value
Common stock	$	320	$	133	$	2	$	451
Non-redeemable preferred stock	99		34		1		132
Total	$	419	$	167	$	3	$	583

			Gross Unrealized				Fair
(at December 31, 2011, in millions)	Cost		Gains		Losses		Value
Common stock	$	311	$	120	$	3	$	428
Non-redeemable preferred stock	103		29		1		131
Total	$	414	$	149	$	4	$	559

Unrealized Investment Losses

The following tables summarize, for all investments in an unrealized loss position at March 31, 2012 and December 31, 2011, the aggregate fair value and gross unrealized loss by length of time those securities have been continuously in an unrealized loss position.

	Less than 12 months				12 months or longer				Total
(at March 31, 2012, 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	$	1,072	$	—	$	—	$	—	$	1,072	$	—
Obligations of states, municipalities and political subdivisions	941		22		93		4		1,034		26
Debt securities issued by foreign governments	145		1		—		—		145		1
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	207		4		135		7		342		11
All other corporate bonds	1,204		23		110		16		1,314		39
Total fixed maturities	3,569		50		338		27		3,907		77
Equity securities
Common stock	56		2		—		—		56		2
Non-redeemable preferred stock	32		1		7		—		39		1
Total equity securities	88		3		7		—		95		3
Total	$	3,657	$	53	$	345	$	27	$	4,002	$	80

	Less than 12 months				12 months or longer				Total
(at December 31, 2011, 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	$	356	$	—	$	—	$	—	$	356	$	—
Obligations of states, municipalities and political subdivisions	27		—		191		5		218		5
Debt securities issued by foreign governments	96		1		2		—		98		1
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	362		12		155		10		517		22
All other corporate bonds	1,295		42		105		19		1,400		61
Total fixed maturities	2,136		55		453		34		2,589		89
Equity securities
Common stock	64		3		—		—		64		3
Non-redeemable preferred stock	37		1		7		—		44		1
Total equity securities	101		4		7		—		108		4
Total	$	2,237	$	59	$	460	$	34	$	2,697	$	93

The following table summarizes, for all fixed maturities and equity securities reported at fair value for which fair value is less than 80% of amortized cost at March 31, 2012, the gross unrealized investment loss by length of time those securities have continuously been in an unrealized loss position of greater than 20% of amortized cost:

	Period For Which Fair Value Is Less Than 80% of Amortized Cost
(in millions)	3 Months or Less		Greater Than 3 Months, 6 Months or Less		Greater Than 6 Months, 12 Months or Less		Greater Than 12 Months		Total
Fixed maturities
Mortgage-backed securities	$	—	$	1	$	—	$	—	$	1
Other	—		—		2		12		14
Total fixed maturities	—		1		2		12		15
Equity securities	—		—		—		—		—
Total	$	—	$	1	$	2	$	12	$	15

Impairment Charges

Impairment charges included in net realized investment gains in the consolidated statement of income were as follows:

(for the three months ended March 31, in millions)	2012		2011
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	—	$	—
Obligations of states, municipalities and political subdivisions	—		—
Debt securities issued by foreign governments	—		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1		2
All other corporate bonds	2		2
Redeemable preferred stock	—		—
Total fixed maturities	3		4
Equity securities
Common stock	—		—
Non-redeemable preferred stock	—		—
Total equity securities	—		—
Other investments	1		—
Total	$	4	$	4

The following tables present the changes during the reporting period in the credit component of other-than-temporary impairments (OTTI) on fixed maturities recognized in the consolidated statement of income for which a portion of the OTTI was recognized in other comprehensive income:

(for the three months ended March 31, 2012, in millions)	Cumulative OTTI Credit Losses Recognized for Securities Held, Beginning of Year		Additions for OTTI Securities Where No Credit Losses Were Previously Recognized		Additions for OTTI Securities Where Credit Losses Have Been Previously Recognized		Reductions Due to Sales/Defaults of Credit- Impaired Securities		Adjustments to Book Value of Credit- Impaired Securities due to Changes in Cash Flows		Cumulative OTTI Credit Losses Recognized for Securities Still Held, End of Period
Fixed maturities
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	$	58	$	—	$	1	$	—	$	—	$	59
All other corporate bonds	94		—		2		—		1		97
Total fixed maturities	$	152	$	—	$	3	$	—	$	1	$	156

(for the three months ended March 31, 2011, in millions)	Cumulative OTTI Credit Losses Recognized for Securities Held, Beginning of Year		Additions for OTTI Securities Where No Credit Losses Were Previously Recognized		Additions for OTTI Securities Where Credit Losses Have Been Previously Recognized		Reductions Due to Sales/Defaults of Credit- Impaired Securities			Adjustments to Book Value of Credit- Impaired Securities due to Changes in Cash Flows		Cumulative OTTI Credit Losses Recognized for Securities Still Held, End of Period
Fixed maturities
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	$	47	$	—	$	2	$	—		$	—	$	49
All other corporate bonds	88		1		1		(1		)	1		90
Total fixed maturities	$	135	$	1	$	3	$	(1	)	$	1	$	139