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INVESTMENT SECURITIES
 9 Months Ended
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES INVESTMENT SECURITIES
Investment securities classified as current and long-term were as follows at September 30, 2019 and December 31, 2018, respectively:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(in millions)
September 30, 2019
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government
corporations and agencies:
 
 
 
 
 
 
 
U.S. Treasury and agency obligations
$
373

 
$
2

 
$
(1
)
 
$
374

Mortgage-backed securities
3,543

 
101

 
(3
)
 
3,641

Tax-exempt municipal securities
1,465

 
36

 
—

 
1,501

Mortgage-backed securities:
 
 
 
 
 
 
 
Residential
—

 
—

 
—

 
—

Commercial
641

 
27

 
—

 
668

Asset-backed securities
1,030

 
3

 
(3
)
 
1,030

Corporate debt securities
3,509

 
84

 
(3
)
 
3,590

Total debt securities
$
10,561

 
$
253

 
$
(10
)
 
$
10,804

 
 
 
 
 
 
 
 
   We held $30 million of equity securities as of September 30, 2019 consisting of common stock.
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government
corporations and agencies:
 
 
 
 
 
 
 
U.S. Treasury and agency obligations
$
419

 
$
1

 
$
(3
)
 
$
417

Mortgage-backed securities
2,595

 
3

 
(54
)
 
2,544

Tax-exempt municipal securities
2,805

 
3

 
(37
)
 
2,771

Mortgage-backed securities:
 
 
 
 
 
 
 
Residential
55

 
—

 
—

 
55

Commercial
537

 
—

 
(14
)
 
523

Asset-backed securities
991

 
1

 
(7
)
 
985

Corporate debt securities
3,239

 
1

 
(98
)
 
3,142

Total debt securities
$
10,641

 
$
9

 
$
(213
)
 
$
10,437


Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at September 30, 2019 and December 31, 2018, respectively:
 
Less than 12 months
 
12 months or more
 
Total
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
(in millions)
September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and other U.S.
government corporations
and agencies:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
obligations
$
31

 
$
—

 
$
21

 
$
(1
)
 
$
52

 
$
(1
)
Mortgage-backed
securities
122

 
(1
)
 
269

 
(2
)
 
391

 
(3
)
Tax-exempt municipal
securities
—

 
—

 
207

 
—

 
207

 
—

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Residential
—

 
—

 
—

 
—

 
—

 
—

Commercial
24

 
—

 
55

 
—

 
79

 
—

Asset-backed securities
196

 
(1
)
 
420

 
(2
)
 
616

 
(3
)
Corporate debt securities
261

 
(1
)
 
191

 
(2
)
 
452

 
(3
)
Total debt securities
$
634

 
$
(3
)
 
$
1,163

 
$
(7
)
 
$
1,797

 
$
(10
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and other U.S.
government corporations
and agencies:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency
obligations
$
179

 
$
(1
)
 
$
153

 
$
(2
)
 
$
332

 
$
(3
)
Mortgage-backed
securities
956

 
(16
)
 
1,019

 
(38
)
 
1,975

 
(54
)
Tax-exempt municipal
securities
809

 
(9
)
 
1,648

 
(28
)
 
2,457

 
(37
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Residential
—

 
—

 
15

 
—

 
15

 
—

Commercial
372

 
(8
)
 
133

 
(6
)
 
505

 
(14
)
Asset-backed securities
824

 
(7
)
 
40

 
—

 
864

 
(7
)
Corporate debt securities
1,434

 
(35
)
 
1,439

 
(63
)
 
2,873

 
(98
)
Total debt securities
$
4,574

 
$
(76
)
 
$
4,447

 
$
(137
)
 
$
9,021

 
$
(213
)

Approximately 96% of our debt securities were investment-grade quality, with a weighted average credit rating of AA by Standard & Poor's Rating Service, or S&P, at September 30, 2019. Most of the debt securities that were below investment-grade were rated BB, the higher end of the below investment-grade rating scale. Tax-exempt municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education. Our general obligation bonds are diversified across the United States with no
individual state exceeding 1% of our total debt securities. Our investment policy limits investments in a single issuer and requires diversification among various asset types.
Our unrealized losses from all securities were generated from approximately 250 positions out of a total of approximately 1,530 positions at September 30, 2019. All issuers of securities we own that were trading at an unrealized loss at September 30, 2019 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time the securities were purchased. At September 30, 2019, we did not intend to sell the securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these securities before recovery of their amortized cost basis. As a result, we believe that the securities with an unrealized loss were not other-than-temporarily impaired at September 30, 2019.
The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the three and nine months ended September 30, 2019 and 2018:
 
Three months ended
September 30,
 
Nine months ended
September 30,
 
2019
 
2018
 
2019
 
2018
 
(in millions)
Gross realized gains
$
41

 
$
10

 
$
59

 
$
105

Gross realized losses
(23
)
 
(2
)
 
(36
)
 
(15
)
Net realized capital (losses) gains
$
18

 
$
8

 
$
23


$
90


There were no material other-than-temporary impairments for the three and nine months ended September 30, 2019 or 2018.
The contractual maturities of debt securities available for sale at September 30, 2019, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
Amortized
Cost
 
Fair
Value
 
(in millions)
Due within one year
$
839

 
$
840

Due after one year through five years
2,277

 
2,312

Due after five years through ten years
1,730

 
1,789

Due after ten years
501

 
524

Mortgage and asset-backed securities
5,214

 
5,339

Total debt securities
$
10,561

 
$
10,804