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Investments (Tables) | 9 Months Ended
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Sep. 30, 2020
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Amortized Cost And Fair Value Of Available-For-Sale And Held-To-Maturity Investment Portfolios | The following table presents the amortized cost, allowance for credit losses, corresponding gross unrealized gains and losses and fair value for AFS and HTM investments in the Company’s consolidated investment portfolio as of September 30, 2020:
|  | September 30, 2020
In millions |  | Amortized Cost |  | Allowance for Credit Losses |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agency |  | $ | 918 |  |  | $ | - |  |  | $ | 85 |  |  | $ | - |  |  | $ | 1,003 |
State and municipal bonds |  |  | 159 |  |  |  | - |  |  |  | 31 |  |  |  | - |  |  |  | 190 |
Foreign governments |  |  | 12 |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 13 |
Corporate obligations |  |  | 870 |  |  |  | - |  |  |  | 68 |  |  |  | (4 | ) |  |  | 934 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed agency |  |  | 281 |  |  |  | - |  |  |  | 8 |  |  |  | - |  |  |  | 289 |
Residential mortgage-backed non-agency |  |  | 23 |  |  |  | - |  |  |  | 3 |  |  |  | - |  |  |  | 26 |
Commercial mortgage-backed |  |  | 17 |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 18 |
Asset-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collateralized debt obligations |  |  | 125 |  |  |  | - |  |  |  | - |  |  |  | (4 | ) |  |  | 121 |
Other asset-backed |  |  | 106 |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 107 |
Total AFS investments |  | $ | 2,511 |  |  | $ | - |  |  | $ | 198 |  |  | $ | (8 | ) |  | $ | 2,701 |
HTM Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets of consolidated VIEs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate obligations |  | $ | 575 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 575 |
Total HTM investments |  | $ | 575 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 575 |
The following table presents the amortized cost, fair value, corresponding gross unrealized gains and losses and OTTI for AFS and HTM investments in the Company’s consolidated investment portfolio as of December 31, 2019:
|  | December 31, 2019
In millions |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Other-Than- Temporary Impairments (1)
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agency |  | $ | 838 |  |  | $ | 46 |  |  | $ | (2 | ) |  | $ | 882 |  |  | $ | - |
State and municipal bonds |  |  | 178 |  |  |  | 22 |  |  |  | - |  |  |  | 200 |  |  |  | - |
Foreign governments |  |  | 8 |  |  |  | 1 |  |  |  | - |  |  |  | 9 |  |  |  | - |
Corporate obligations |  |  | 1,140 |  |  |  | 52 |  |  |  | (1 | ) |  |  | 1,191 |  |  |  | - |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed agency |  |  | 317 |  |  |  | 3 |  |  |  | - |  |  |  | 320 |  |  |  | - |
Residential mortgage-backed non-agency |  |  | 23 |  |  |  | 1 |  |  |  | (5 | ) |  |  | 19 |  |  |  | - |
Commercial mortgage-backed |  |  | 20 |  |  |  | - |  |  |  | - |  |  |  | 20 |  |  |  | - |
Asset-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collateralized debt obligations |  |  | 139 |  |  |  | - |  |  |  | (2 | ) |  |  | 137 |  |  |  | - |
Other asset-backed |  |  | 321 |  |  |  | 1 |  |  |  | (1 | ) |  |  | 321 |  |  |  | - |
Total AFS investments |  | $ | 2,984 |  |  | $ | 126 |  |  | $ | (11 | ) |  | $ | 3,099 |  |  | $ | - |
HTM Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets of consolidated VIEs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate obligations |  | $ | 890 |  |  | $ | 2 |  |  | $ | - |  |  | $ | 892 |  |  | $ | - |
Total HTM investments |  | $ | 890 |  |  | $ | 2 |  |  | $ | - |  |  | $ | 892 |  |  | $ | - |
(1) - | Represents unrealized gains or losses on OTTI securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI.
Distribution By Contractual Maturity Of Available-For-Sale and Held-To-Maturity Investments |
|  | AFS Securities |  | HTM Securities
|  |  |  |  |  | Consolidated VIEs
In millions |  | Net Amortized Cost |  | Fair Value |  | Net Amortized Cost |  | Fair Value
Due in one year or less |  | $ | 560 |  |  | $ | 562 |  |  | $ | - |  |  | $ | - |
Due after one year through five years |  |  | 473 |  |  |  | 490 |  |  |  | - |  |  |  | - |
Due after five years through ten years |  |  | 269 |  |  |  | 297 |  |  |  | - |  |  |  | - |
Due after ten years |  |  | 657 |  |  |  | 791 |  |  |  | 575 |  |  |  | 575 |
Mortgage-backed and asset-backed |  |  | 552 |  |  |  | 561 |  |  |  | - |  |  |  | - |
Total fixed-maturity investments |  | $ | 2,511 |  |  | $ | 2,701 |  |  | $ | 575 |  |  | $ | 575 |
Gross Unrealized Losses Related To Available-For-Sale And Held-To-Maturity Investments |
|  | September 30, 2020
|  | Less than 12 Months |  | 12 Months or Longer |  | Total
In millions |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agency |  | $ | 124 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 124 |  |  | $ | - |
State and municipal bonds |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | - |
Corporate obligations |  |  | 124 |  |  |  | (3 | ) |  |  | 7 |  |  |  | (1 | ) |  |  | 131 |  |  |  | (4 | )
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed agency |  |  | 57 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 57 |  |  |  | - |
Residential mortgage-backed non-agency |  |  | - |  |  |  | - |  |  |  | 2 |  |  |  | - |  |  |  | 2 |  |  |  | - |
Commercial mortgage-backed |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | 5 |  |  |  | - |
Asset-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collateralized debt obligations |  |  | 41 |  |  |  | (1 | ) |  |  | 80 |  |  |  | (3 | ) |  |  | 121 |  |  |  | (4 | )
Other asset-backed |  |  | 35 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 35 |  |  |  | - |
Total AFS investments |  | $ | 382 |  |  | $ | (4 | ) |  | $ | 94 |  |  | $ | (4 | ) |  | $ | 476 |  |  | $ | (8 | )
|  | December 31, 2019
|  | Less than 12 Months |  | 12 Months or Longer |  | Total
In millions |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agency |  | $ | 148 |  |  | $ | (1 | ) |  | $ | 79 |  |  | $ | (1 | ) |  | $ | 227 |  |  | $ | (2 | )
State and municipal bonds |  |  | 11 |  |  |  | - |  |  |  | 15 |  |  |  | - |  |  |  | 26 |  |  |  | - |
Corporate obligations |  |  | 53 |  |  |  | (1 | ) |  |  | 10 |  |  |  | - |  |  |  | 63 |  |  |  | (1 | )
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed agency |  |  | 62 |  |  |  | - |  |  |  | 7 |  |  |  | - |  |  |  | 69 |  |  |  | - |
Residential mortgage-backed non-agency |  |  | - |  |  |  | - |  |  |  | 11 |  |  |  | (5 | ) |  |  | 11 |  |  |  | (5 | )
Commercial mortgage-backed |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |
Asset-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collateralized debt obligations |  |  | 44 |  |  |  | - |  |  |  | 77 |  |  |  | (2 | ) |  |  | 121 |  |  |  | (2 | )
Other asset-backed |  |  | 48 |  |  |  | (1 | ) |  |  | 7 |  |  |  | - |  |  |  | 55 |  |  |  | (1 | )
Total AFS investments |  | $ | 371 |  |  | $ | (3 | ) |  | $ | 206 |  |  | $ | (8 | ) |  | $ | 577 |  |  | $ | (11 | )
Distribution Of Securities By Percentage Of Fair Value Below Book Value By More Than 5% |
|  | AFS Securities
Percentage of Fair Value Below Book Value |  | Number of Securities |  | Book Value (in millions) |  | Fair Value (in millions)
> 5% to 15% |  |  | 10 |  |  | $ | 20 |  |  | $ | 18 |
> 15% to 25% |  |  | 2 |  |  |  | - |  |  |  | - |
> 25% to 50% |  |  | 2 |  |  |  | 1 |  |  |  | 1 |
> 50% |  |  | 2 |  |  |  | - |  |  |  | - |
Total |  |  | 16 |  |  | $ | 21 |  |  | $ | 19 |
Securities Held In Unrealized Loss Position And Insured By Financial Guarantor and The Related Insurance Loss Reserve On Company Insured Investments |
In millions |  | Fair Value |  |  | Unrealized Loss |  |  | Insurance Loss Reserve (1) |
Mortgage-backed |  | $ | 1 |  |  |  | - |  |  |  | - |
Total |  | $ | 1 |  |  | $ | - |  |  | $ | - |
| (1) - | Insurance loss reserve estimates are based on the proportion of par value owned to the total amount of par value insured.
Summary of Allowance for Credit Losses on HTM Investments |
|  |  |  | Three Months Ended September 30, 2020 |  |
In millions |  | Balance Beginning of Period |  | Current period provision for expected credit losses |  | Initial allowance recognized for PCD assets |  | Write-Offs |  | Recoveries |  | Balance as of September 30, 2020
HTM Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets of consolidated VIEs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate obligations |  | $ | 23 |  |  | $ | (23 | ) |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Total Allowance on HTM investments |  | $ | 23 |  |  | $ | (23 | ) |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
|  |  |  | Nine Months Ended September 30, 2020 |  |
In millions |  | Balance as of January 1, 2020 (1) |  | Current period provision for expected credit losses |  | Initial allowance recognized for PCD assets |  | Write-Offs |  | Recoveries |  | Balance as of September 30, 2020
HTM Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets of consolidated VIEs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate obligations |  | $ | 37 |  |  | $ | (37 | ) |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Total Allowance on HTM investments |  | $ | 37 |  |  | $ | (37 | ) |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
(1) - | Represents transition adjustment upon adoption of ASU 2016-13.
Credit Losses Recognized In Earnings Related To OTTI Losses Recognized In Accumulated Other Comprehensive Income (Loss) |
In millions |  | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
Credit Losses Recognized in Earnings Related to Other-Than-Temporary Impairments
Beginning balance |  | $ | 74 |  |  | $ | 37 |
Additions for credit loss impairments recognized in the current period on securities previously impaired |  |  | - |  |  |  | 37 |
Ending balance |  | $ | 74 |  |  | $ | 74 |
Gross Realized Gains and Losses From Sales Of Available-For-Sale Securities |
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
In millions |  | 2020 |  | 2019 |  | 2020 |  | 2019
Proceeds from sales |  | $ | 293 |  |  | $ | 508 |  |  | $ | 862 |  |  | $ | 1,875 |
Gross realized gains |  | $ | 22 |  |  | $ | 79 |  |  | $ | 53 |  |  | $ | 100 |
Gross realized losses |  | $ | (2 | ) |  | $ | - |  |  | $ | (14 | ) |  | $ | (3 | )
Portion Of Unrealized Gains Losses Recognized On Equity Investments |
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
In millions |  | 2020 |  | 2019 |  | 2020 |  | 2019
Net gains (losses) recognized during the period on equity securities |  | $ | 4 |  |  | $ | 2 |  |  | $ | (1 | ) |  | $ | 9 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net gains (losses) recognized during the period on equity securities sold during the period |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |
Unrealized gains (losses) recognized during the period on equity securities still held at the reporting date |  | $ | 4 |  |  | $ | 2 |  |  | $ | (1 | ) |  | $ | 8 |

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