Investments

6 Months Ended

Jun. 30, 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 June 30, 2012, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,072	$	85	$	—	$	2,157
Obligations of states, municipalities and political subdivisions:
Pre-refunded	7,720		585		—		8,305
All other	28,430		2,231		15		30,646
Total obligations of states, municipalities and political subdivisions	36,150		2,816		15		38,951
Debt securities issued by foreign governments	2,250		85		1		2,334
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	3,075		250		7		3,318
All other corporate bonds	16,740		1,207		33		17,914
Redeemable preferred stock	26		5		—		31
Total	$	60,313	$	4,448	$	56	$	64,705

	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 $8.31 billion and $7.33 billion at June 30, 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 June 30, 2012, in millions)	Cost		Gains		Losses		Value
Common stock	$	340	$	130	$	3	$	467
Non-redeemable preferred stock	96		33		1		128
Total	$	436	$	163	$	4	$	595

			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 June 30, 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 June 30, 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	$	919	$	—	$	—	$	—	$	919	$	—
Obligations of states, municipalities and political subdivisions	1,286		12		30		3		1,316		15
Debt securities issued by foreign governments	151		1		—		—		151		1
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	70		1		145		6		215		7
All other corporate bonds	803		16		137		17		940		33
Total fixed maturities	3,229		30		312		26		3,541		56
Equity securities
Common stock	56		2		4		1		60		3
Non-redeemable preferred stock	34		1		5		—		39		1
Total equity securities	90		3		9		1		99		4
Total	$	3,319	$	33	$	321	$	27	$	3,640	$	60

	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 June 30, 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	$	—	$	—	$	—	$	—	$	—
Other	2		—		—		9		11
Total fixed maturities	2		—		—		9		11
Equity securities	—		—		—		—		—
Total	$	2	$	—	$	—	$	9	$	11

Impairment Charges

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

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2012		2011		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	2		2		3		4
All other corporate bonds	1		1		3		3
Redeemable preferred stock	—		—		—		—
Total fixed maturities	3		3		6		7
Equity securities
Common stock	—		1		—		1
Non-redeemable preferred stock	—		—		—		—
Total equity securities	—		1		—		1
Other investments	1		—		2		—
Total	$	4	$	4	$	8	$	8

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 (loss) for which a portion of the OTTI was recognized in other comprehensive income:

	2012
(for the three months ended June 30, in millions)	Cumulative OTTI Credit Losses Recognized for Securities Held, Beginning of Period		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	$	59	$	—	$	2	$	—	$	—	$	61
All other corporate bonds	97		—		1		—		1		99
Total fixed maturities	$	156	$	—	$	3	$	—	$	1	$	160

(for the six months ended June 30, in millions)
Fixed maturities
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	$	58	$	—	$	3	$	—	$	—	$	61
All other corporate bonds	94		—		3		—		2		99
Total fixed maturities	$	152	$	—	$	6	$	—	$	2	$	160

	2011
(for the three months ended June 30, in millions)	Cumulative OTTI Credit Losses Recognized for Securities Held, Beginning of Period		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	$	49	$	—	$	2	$	—	$	—	$	51
All other corporate bonds	90		—		1		—		1		92
Total fixed maturities	$	139	$	—	$	3	$	—	$	1	$	143

(for the six months ended June 30, in millions)
Fixed maturities
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	$	47	$	—	$	4	$	—		$	—	$	51
All other corporate bonds	88		1		2		(1		)	2		92
Total fixed maturities	$	135	$	1	$	6	$	(1	)	$	2	$	143