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Investments and Cash (Tables)
 12 Months Ended
Dec. 31, 2012
Investments 1 [abstract]  
Net Investment Income
Net Investment Income
 
 
Year Ended December 31,
 
2012
 
2011
 
2010
 
(in millions)
Income from fixed maturity securities
$
407

 
$
399

 
$
360

Income from short-term investments
1

 
1

 
3

Income from assets acquired in refinancing transactions
5

 
5

 
7

Gross investment income
413

 
405

 
370

Investment expenses
(9
)
 
(9
)
 
(9
)
Net investment income
$
404

 
$
396

 
$
361
Net Realized Investment Gains (Losses)
Net Realized Investment Gains (Losses)
 
 
Year Ended December 31,
 
2012
 
2011
 
2010
 
(in millions)
Realized gains on investment portfolio
$
42

 
$
36

 
$
31

Realized losses on investment portfolio
(24
)
 
(9
)
 
(6
)
OTTI
 
 
 
 
 
Intent to sell
0

 
(5
)
 
(4
)
Credit component of OTTI securities
(17
)
 
(40
)
 
(23
)
OTTI
(17
)
 
(45
)
 
(27
)
Net realized investment gains (losses)
$
1

 
$
(18
)
 
$
(2
)
Roll Forward of Credit Losses in the Investment Portfolio
Roll Forward of Credit Losses in the Investment Portfolio

 
Year Ended December 31,
 
2012
 
2011
 
2010
 
(in millions)
Balance, beginning of period
$
47

 
$
27

 
$
20

Additions for credit losses on securities for which an OTTI was not previously recognized
14

 
27

 
7

Eliminations of securities issued by FG VIEs
—

 
(14
)
 
—

Reductions for securities sold during the period
—

 
(6
)
 
—

Additions for credit losses on securities for which an OTTI was previously recognized
3

 
13

 
0

Balance, end of period
$
64

 
$
47

 
$
27
Fixed Maturity Securities and Short Term Investments by Security Type
Fixed Maturity Securities and Short Term Investments
by Security Type 
As of December 31, 2012

Investment Category
 
Percent
of
Total(1)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
AOCI(2)
Gain
(Loss) on
Securities
with
OTTI
 
Weighted
Average
Credit
Quality
 (3)
 
 
(dollars in millions)
Fixed maturity securities:
 
 

 
 

 
 

 
 

 
 

 
 

 
 
U.S. government and agencies
 
7
%
 
$
732

 
$
62

 
$
0

 
$
794

 
$
—

 
AA+
Obligations of state and political subdivisions
 
51

 
5,153

 
489

 
(11
)
 
5,631

 
9

 
AA
Corporate securities
 
9

 
930

 
80

 
0

 
1,010

 
0

 
AA-
Mortgage-backed securities(4):
 
0

 
 
 
 
 
 

 
 
 
 

 

RMBS
 
13

 
1,281

 
62

 
(77
)
 
1,266

 
(59
)
 
A+
CMBS
 
5

 
482

 
38

 
0

 
520

 
—

 
AAA
Asset-backed securities
 
5

 
482

 
59

 
(10
)
 
531

 
43

 
BIG
Foreign government securities
 
3

 
286

 
18

 
0

 
304

 
0

 
AAA
Total fixed maturity securities
 
92

 
9,346

 
808

 
(98
)
 
10,056

 
(7
)
 
AA-
Short-term investments
 
8

 
817

 
0

 
0

 
817

 
—

 
AAA
Total investment portfolio
 
100
%
 
$
10,163

 
$
808

 
$
(98
)
 
$
10,873

 
$
(7
)
 
AA-

Fixed Maturity Securities and Short Term Investments
by Security Type 
As of December 31, 2011 
Investment Category
 
Percent
of
Total(1)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
AOCI
Gain
(Loss) on
Securities
with
OTTI
 
Weighted
Average
Credit
Quality
 (3)
 
 
(dollars in millions)
Fixed maturity securities:
 
 

 
 

 
 

 
 

 
 

 
 

 
 
U.S. government and agencies
 
8
%
 
$
850

 
$
72

 
$
0

 
$
922

 
$
—

 
AA+
Obligations of state and political subdivisions
 
49

 
5,097

 
359

 
(1
)
 
5,455

 
6

 
AA
Corporate securities
 
10

 
989

 
52

 
(2
)
 
1,039

 
0

 
A+
Mortgage-backed securities(4):
 
 

 
 

 
 

 
 

 
 

 
 

 
 
RMBS
 
14

 
1,454

 
64

 
(90
)
 
1,428

 
(35
)
 
AA
CMBS
 
5

 
476

 
24

 
0

 
500

 
2

 
AAA
Asset-backed securities
 
4

 
439

 
38

 
(19
)
 
458

 
29

 
BBB-
Foreign government securities
 
3

 
333

 
13

 
(6
)
 
340

 
—

 
AAA
Total fixed maturity securities
 
93

 
9,638

 
622

 
(118
)
 
10,142

 
2

 
AA
Short-term investments
 
7

 
734

 
—

 
—

 
734

 
—

 
AAA
Total investment portfolio
 
100
%
 
$
10,372

 
$
622

 
$
(118
)
 
$
10,876

 
$
2

 
AA
____________________
(1)
Based on amortized cost.
 
(2)
Accumulated Other Comprehensive Income ("AOCI").
 
(3)
Ratings in the tables above represent the lower of the Moody’s and S&P classifications except for bonds purchased for loss mitigation or risk management strategies, which use internal ratings classifications. The Company’s portfolio consists primarily of high-quality, liquid instruments.
 
(4)
Government-agency obligations were approximately 61% of mortgage backed securities as of December 31, 2012 and 66% as of December 31, 2011 based on fair value.

Fair Value of Available-for-Sale Municipal Bond Portfolio by State
ce.
 
Fair Value of Available-for-Sale Municipal Bond Portfolio by State
As of December 31, 2012

 
State
 
State
General
Obligation
 
Local
General
Obligation
 
Revenue
 
Fair
Value
 
Amortized
Cost
 
Average
Credit
Rating
 
 
(in millions)
Texas
 
$
88

 
$
345

 
$
342

 
$
775

 
$
708

 
AA
New York
 
22

 
58

 
593

 
673

 
620

 
AA
California
 
23

 
77

 
359

 
459

 
425

 
A+
Florida
 
47

 
50

 
259

 
356

 
319

 
AA-
Illinois
 
15

 
84

 
188

 
287

 
260

 
A+
Massachusetts
 
42

 
18

 
165

 
225

 
199

 
AA
Washington
 
33

 
40

 
145

 
218

 
200

 
AA
Arizona
 
—

 
8

 
180

 
188

 
171

 
AA
Georgia
 
14

 
20

 
108

 
142

 
132

 
A+
Pennsylvania
 
68

 
32

 
40

 
140

 
129

 
AA-
All others
 
229

 
248

 
1,195

 
1,672

 
1,533

 
AA
Total
 
$
581

 
$
980

 
$
3,574

 
$
5,135

 
$
4,696

 
AA-
 
Fair Value of Available-for-Sale Municipal Bond Portfolio by State
As of December 31, 2011

State
 
State
General
Obligation
 
Local
General
Obligation
 
Revenue
 
Fair
Value
 
Amortized
Cost
 
Average
Credit
Rating
 
 
(in millions)
Texas
 
$
86

 
$
342

 
$
346

 
$
774

 
$
724

 
AA
New York
 
12

 
60

 
623

 
695

 
654

 
AA
California
 
19

 
51

 
297

 
367

 
336

 
AA
Florida
 
34

 
62

 
247

 
343

 
317

 
AA
Illinois
 
16

 
87

 
197

 
300

 
281

 
AA
Massachusetts
 
43

 
9

 
164

 
216

 
199

 
AA
Washington
 
38

 
53

 
123

 
214

 
200

 
AA
Arizona
 
—

 
8

 
164

 
172

 
163

 
AA
Ohio
 
—

 
53

 
86

 
139

 
129

 
AA
Michigan
 
—

 
37

 
99

 
136

 
129

 
AA
All others
 
311

 
271

 
1,114

 
1,696

 
1,588

 
AA
Total
 
$
559

 
$
1,033

 
$
3,460

 
$
5,052

 
$
4,720

 
AA
 
Revenue Sources
Revenue Sources
 
 
 
As of December 31, 2012
 
As of December 31, 2011
Type
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
 
(in millions)
Tax backed
 
$
720

 
$
656

 
$
717

 
$
670

Transportation
 
717

 
646

 
800

 
749

Water and sewer
 
567

 
520

 
530

 
501

Municipal utilities
 
567

 
519

 
529

 
494

Higher education
 
430

 
389

 
332

 
307

Healthcare
 
323

 
296

 
273

 
258

All others
 
250

 
247

 
279

 
264

Total
 
$
3,574

 
$
3,273

 
$
3,460

 
$
3,243
Fixed Maturity Securities Gross Unrealized Loss by Length of Time
on.
 
Fixed Maturity Securities
Gross Unrealized Loss by Length of Time
As of December 31, 2012
 
 
Less than 12 months
 
12 months or more
 
Total
 
Fair
value
 
Unrealized
loss
 
Fair
value
 
Unrealized
loss
 
Fair
value
 
Unrealized
loss
 
(dollars in millions)
U.S. government and agencies
$
62

 
$
0

 
$
—

 
$
—

 
$
62

 
$
0

Obligations of state and political subdivisions
79

 
(11
)
 
—

 
—

 
79

 
(11
)
Corporate securities
25

 
0

 
—

 
—

 
25

 
0

Mortgage-backed securities:
 
 
 
 
 
 
 

 


 


RMBS
108

 
(19
)
 
121

 
(58
)
 
229

 
(77
)
CMBS
5

 
0

 
—

 
—

 
5

 
0

Asset-backed securities
16

 
0

 
35

 
(10
)
 
51

 
(10
)
Foreign government securities
8

 
0

 
—

 
—

 
8

 
0

Total
$
303

 
$
(30
)
 
$
156

 
$
(68
)
 
$
459

 
$
(98
)
Number of securities
 

 
58

 
 

 
16

 
 

 
74

Number of securities with OTTI
 

 
5

 
 

 
6

 
 

 
11

 
Fixed Maturity Securities
Gross Unrealized Loss by Length of Time
As of December 31, 2011

 
Less than 12 months
 
12 months or more
 
Total
 
Fair
value
 
Unrealized
loss
 
Fair
value
 
Unrealized
loss
 
Fair
value
 
Unrealized
loss
 
(dollars in millions)
U.S. government and agencies
$
4

 
$
0

 
$
—

 
$
—

 
$
4

 
$
0

Obligations of state and political subdivisions
17

 
0

 
21

 
(1
)
 
38

 
(1
)
Corporate securities
80

 
(2
)
 
3

 
—

 
83

 
(2
)
Mortgage-backed securities:
 

 
 

 
 

 
 

 


 


RMBS
187

 
(68
)
 
36

 
(22
)
 
223

 
(90
)
CMBS
3

 
0

 
—

 
—

 
3

 
0

Asset-backed securities
—

 
—

 
26

 
(19
)
 
26

 
(19
)
Foreign government securities
141

 
(6
)
 
—

 
—

 
141

 
(6
)
Total
$
432

 
$
(76
)
 
$
86

 
$
(42
)
 
$
518

 
$
(118
)
Number of securities
 

 
56

 
 

 
20

 
 

 
76

Number of securities with OTTI
 

 
6

 
 

 
4

 
 

 
10

 
Of the securities in an unrealized loss posit
Distribution of Fixed Maturity Securities by Contractual Maturity
es.
 
Distribution of Fixed-Maturity Securities
by Contractual Maturity
As of December 31, 2012
 
 
Amortized
Cost
 
Estimated
Fair Value
 
(in millions)
Due within one year
$
315

 
$
318

Due after one year through five years
1,392

 
1,472

Due after five years through 10 years
2,284

 
2,525

Due after 10 years
3,592

 
3,955

Mortgage-backed securities:
 

 
 

RMBS
1,281

 
1,266

CMBS
482

 
520

Total
$
9,346

 
$
10,056

 
Under agreements w
Carrying Value of Bonds Acquired or Obtained for Loss Mitigations Purposes

Loss Mitigation Assets
Carrying Value
 
As of December 31,
 
2012
 
2011
 
(in millions)
Fixed maturity securities:
 
 
 
   Obligations of state and political subdivisions
$
35

 
$
9

   RMBS
215

 
134

   Asset-backed securities
306

 
235

Other invested assets:
 
 
 
   Assets acquired in refinancing transactions
72

 
107

   Other
42

 
52

Total
$
670

 
$
537