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Investments and Cash (Tables)
 12 Months Ended
Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]  
Net Investment Income
Net Investment Income
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
 
(in millions)
Income from fixed-maturity securities managed by third parties
$
335


$
324


$
322

Income from internally managed securities:
 
 
 
 
 
Fixed maturities
61


74


74

Other
37

 
14

 
5

Gross investment income
433


412


401

Investment expenses
(10
)

(9
)

(8
)
Net investment income
$
423

 
$
403

 
$
393
Net Realized Investment Gains (Losses)
Net Realized Investment Gains (Losses)
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
 
(in millions)
Gross realized gains on available-for-sale securities
$
44

 
$
14

 
$
73

Gross realized gains on other assets in investment portfolio
2

 
8

 
40

Gross realized losses on available-for-sale securities
(15
)
 
(5
)
 
(12
)
Gross realized losses on other assets in investment portfolio
(10
)
 
(2
)
 
(7
)
Other-than-temporary impairment
(47
)
 
(75
)
 
(42
)
Net realized investment gains (losses)
$
(26
)
 
$
(60
)
 
$
52
Roll Forward of Credit Losses in the Investment Portfolio
Roll Forward of Credit Losses
in the Investment Portfolio

 
Year Ended December 31,
 
2015
 
2014
 
2013
 
(in millions)
Balance, beginning of period
$
124

 
$
80

 
$
64

Additions for credit losses on securities for which an other-than-temporary-impairment was not previously recognized
3

 
64

 
18

Eliminations of securities issued by FG VIEs
—

 
(15
)
 
—

Reductions for securities sold and other settlement during the period
(28
)
 
(12
)
 
(21
)
Additions for credit losses on securities for which an other-than-temporary-impairment was previously recognized
9

 
7

 
19

Balance, end of period
$
108

 
$
124

 
$
80
Fixed Maturity Securities and Short Term Investments by Security Type
Fixed-Maturity Securities and Short-Term Investments
by Security Type 
As of December 31, 2015

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

 
 

 
 

 
 

 
 

 
 

 
 
Obligations of state and political subdivisions
 
52
%
 
$
5,528

 
$
323

 
$
(10
)
 
$
5,841

 
$
5

 
AA
U.S. government and agencies
 
3

 
377

 
23

 
0

 
400

 
—

 
AA+
Corporate securities
 
14

 
1,505

 
38

 
(23
)
 
1,520

 
(13
)
 
A-
Mortgage-backed securities(4):
 
—

 
 
 
 
 
 

 
 
 
 

 

RMBS
 
11

 
1,238

 
29

 
(22
)
 
1,245

 
(7
)
 
A
CMBS
 
5

 
506

 
9

 
(2
)
 
513

 
—

 
AAA
Asset-backed securities
 
8

 
831

 
4

 
(10
)
 
825

 
(6
)
 
B+
Foreign government securities
 
3

 
290

 
4

 
(11
)
 
283

 
—

 
AA+
Total fixed-maturity securities
 
96

 
10,275

 
430

 
(78
)
 
10,627

 
(21
)
 
A+
Short-term investments
 
4

 
396

 
0

 
0

 
396

 
—

 
AA-
Total investment portfolio
 
100
%
 
$
10,671

 
$
430

 
$
(78
)
 
$
11,023

 
$
(21
)
 
A+

Fixed-Maturity Securities and Short-Term Investments
by Security Type 
As of December 31, 2014

Investment Category
 
Percent
of
Total(1)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
AOCI
Gain
(Loss) on
Securities
with
Other-Than-Temporary Impairment
 
Weighted
Average
Credit
Rating
 (3)
 
 
(dollars in millions)
Fixed-maturity securities:
 
 

 
 

 
 

 
 

 
 

 
 

 
 
Obligations of state and political subdivisions
 
50
%
 
$
5,416

 
$
380

 
$
(1
)
 
$
5,795

 
$
7

 
AA
U.S. government and agencies
 
6

 
635

 
31

 
(1
)
 
665

 
—

 
AA+
Corporate securities
 
12

 
1,320

 
53

 
(5
)
 
1,368

 
(2
)
 
A
Mortgage-backed securities(4):
 
 

 
 

 
 

 
 

 
 

 
 

 
 
RMBS
 
12

 
1,255

 
51

 
(21
)
 
1,285

 
0

 
A-
CMBS
 
6

 
639

 
20

 
0

 
659

 
—

 
AAA
Asset-backed securities
 
4

 
411

 
9

 
(3
)
 
417

 
3

 
BBB-
Foreign government securities
 
3

 
296

 
8

 
(2
)
 
302

 
—

 
AA+
Total fixed-maturity securities
 
93

 
9,972

 
552

 
(33
)
 
10,491

 
8

 
AA-
Short-term investments
 
7

 
767

 
0

 
0

 
767

 
0

 
AA+
Total investment portfolio
 
100
%
 
$
10,739

 
$
552

 
$
(33
)
 
$
11,258

 
$
8

 
AA-
____________________
(1)
Based on amortized cost.
 
(2)
Accumulated OCI. See also Note 20, Other Comprehensive Income.
 
(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 54% of mortgage backed securities as of December 31, 2015 and 44% as of December 31, 2014 based on fair value.
Fair Value of Available-for-Sale Municipal Bond Portfolio by State
Fair Value of Available-for-Sale Portfolio of
Obligations of State and Political Subdivisions
As of December 31, 2015 (1)
 
State
 
State
General
Obligation
 
Local
General
Obligation
 
Revenue Bonds
 
Fair
Value
 
Amortized
Cost
 
Average
Credit
Rating
 
 
(in millions)
Fixed-maturity securities:
 
 
 
 
 
 
 
 
 
 
 
 
New York
 
$
13

 
$
59

 
$
571

 
$
643

 
$
610

 
AA
Texas
 
28

 
224

 
325

 
577

 
542

 
AA
California
 
78

 
66

 
411

 
555

 
521

 
A+
Washington
 
59

 
79

 
200

 
338

 
323

 
AA
Florida
 
17

 
—

 
268

 
285

 
266

 
AA-
Illinois
 
47

 
69

 
128

 
244

 
234

 
A
Massachusetts
 
75

 
—

 
148

 
223

 
207

 
AA
Arizona
 
—

 
10

 
181

 
191

 
181

 
AA
Pennsylvania
 
48

 
26

 
47

 
121

 
115

 
A
Ohio
 
17

 
14

 
83

 
114

 
106

 
AA
All others
 
156

 
168

 
1,148

 
1,472

 
1,396

 
AA-
Subtotal
 
538

 
715

 
3,510

 
4,763

 
4,501

 
AA-
Short-term investments (2)
 
—

 
—

 
60

 
60

 
60

 
CC
Total
 
$
538

 
$
715

 
$
3,570

 
$
4,823

 
$
4,561

 
AA-

Fair Value of Available-for-Sale Portfolio of
Obligations of State and Political Subdivisions
As of December 31, 2014 (1)

State
 
State
General
Obligation
 
Local
General
Obligation
 
Revenue Bonds
 
Fair
Value
 
Amortized
Cost
 
Average
Credit
Rating
 
 
(in millions)
Fixed-maturity securities:
 
 
 
 
 
 
 
 
 
 
 
 
Texas
 
$
60

 
$
293

 
$
305

 
$
658

 
$
613

 
 AA
New York
 
13

 
41

 
551

 
605

 
571

 
 AA
California
 
45

 
70

 
377

 
492

 
449

 
 A+
Florida
 
47

 
34

 
256

 
337

 
311

 
 AA-
Illinois
 
20

 
99

 
177

 
296

 
275

 
 A+
Washington
 
67

 
48

 
163

 
278

 
262

 
AA
Massachusetts
 
46

 
8

 
169

 
223

 
204

 
AA
Arizona
 
—

 
7

 
170

 
177

 
165

 
 AA
Michigan
 
—

 
—

 
132

 
132

 
122

 
 AA-
Ohio
 
6

 
40

 
82

 
128

 
119

 
 AA
All others
 
276

 
251

 
1,096

 
1,623

 
1,528

 
 AA-
Total
 
$
580

 
$
891

 
$
3,478

 
$
4,949

 
$
4,619

 
AA-
____________________
(1)
Excludes $1,078 million and $846 million as of December 31, 2015 and 2014, respectively, of pre-refunded bonds, at fair value. The credit ratings are based on the underlying ratings and do not include any benefit from bond insurance.

(2)    Matured in the first quarter of 2016.
Revenue Sources
Revenue Bonds
Sources of Funds
 
 
 
As of December 31, 2015
 
As of December 31, 2014
Type
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
 
(in millions)
Fixed-maturity securities:
 
 
 
 
 
 
 
 
Transportation
 
$
867

 
$
815

 
$
796

 
$
733

Water and sewer
 
612

 
576

 
563

 
527

Tax backed
 
610

 
576

 
551

 
514

Higher education
 
518

 
487

 
527

 
492

Municipal utilities
 
414

 
393

 
512

 
479

Healthcare
 
344

 
321

 
346

 
317

All others
 
145

 
141

 
183

 
173

Subtotal
 
3,510

 
3,309

 
3,478

 
3,235

Short-term investments (1)
 
60

 
60

 
—

 
—

Total
 
$
3,570

 
$
3,369

 
$
3,478

 
$
3,235
Fixed Maturity Securities Gross Unrealized Loss by Length of Time
Fixed-Maturity Securities
Gross Unrealized Loss by Length of Time
As of December 31, 2015
 
 
Less than 12 months
 
12 months or more
 
Total
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
(dollars in millions)
Obligations of state and political subdivisions
$
316

 
$
(10
)
 
$
7

 
$
0

 
$
323

 
$
(10
)
U.S. government and agencies
77

 
0

 
—

 
—

 
77

 
0

Corporate securities
381

 
(8
)
 
95

 
(15
)
 
476

 
(23
)
Mortgage-backed securities:
 
 
 
 
 
 
 

 


 


RMBS
438

 
(8
)
 
90

 
(14
)
 
528

 
(22
)
CMBS
140

 
(2
)
 
2

 
0

 
142

 
(2
)
Asset-backed securities
517

 
(10
)
 
—

 
—

 
517

 
(10
)
Foreign government securities
97

 
(4
)
 
82

 
(7
)
 
179

 
(11
)
Total
$
1,966

 
$
(42
)
 
$
276

 
$
(36
)
 
$
2,242

 
$
(78
)
Number of securities(1)
 

 
335

 
 

 
71

 
 

 
396

Number of securities with other-than-temporary impairment
 

 
9

 
 

 
4

 
 

 
13

 
Fixed-Maturity Securities
Gross Unrealized Loss by Length of Time
As of December 31, 2014

 
Less than 12 months
 
12 months or more
 
Total
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
(dollars in millions)
Obligations of state and political subdivisions
$
64

 
$
0

 
$
25

 
$
(1
)
 
$
89

 
$
(1
)
U.S. government and agencies
139

 
0

 
68

 
(1
)
 
207

 
(1
)
Corporate securities
189

 
(3
)
 
104

 
(2
)
 
293

 
(5
)
Mortgage-backed securities:
 

 
 

 
 

 
 

 
 
 
 
RMBS
205

 
(3
)
 
159

 
(18
)
 
364

 
(21
)
CMBS
36

 
0

 
19

 
0

 
55

 
0

Asset-backed securities
56

 
(2
)
 
18

 
(1
)
 
74

 
(3
)
Foreign government securities
108

 
(2
)
 
0

 
0

 
108

 
(2
)
Total
$
797

 
$
(10
)
 
$
393

 
$
(23
)
 
$
1,190

 
$
(33
)
Number of securities(1)
 

 
125

 
 

 
82

 
 

 
198

Number of securities with other-than-temporary impairment
 

 
3

 
 

 
7

 
 

 
10

___________________
(1)
The number of securities does not add across because lots of the same securities have been purchased at different times and appear in both categories above (i.e., Less than 12 months and 12 months or more). If a security appears in both categories, it is counted only once in the total column.
Distribution of Fixed Maturity Securities by Contractual Maturity
Distribution of Fixed-Maturity Securities
by Contractual Maturity
As of December 31, 2015
 
 
Amortized
Cost
 
Estimated
Fair Value
 
(in millions)
Due within one year
$
234

 
$
233

Due after one year through five years
1,911

 
1,965

Due after five years through 10 years
2,169

 
2,257

Due after 10 years
4,217

 
4,414

Mortgage-backed securities:
 

 
 

RMBS
1,238

 
1,245

CMBS
506

 
513

Total
$
10,275

 
$
10,627
Internally Managed Investment Portfolio
Internally Managed Portfolio
Carrying Value

 
As of December 31,
 
2015
 
2014
 
(in millions)
Assets purchased for loss mitigation and other risk management purposes:
 
 
 
   Fixed-maturity securities, at fair value
$
1,266

 
$
835

   Other invested assets
114

 
46

Other
55

 
79

Total
$
1,435

 
$
960