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HELD-FOR-SALE CLASSIFICATION
 3 Months Ended
Mar. 31, 2017
HELD-FOR-SALE CLASSIFICATION  
HELD-FOR-SALE CLASSIFICATION

4. Held-For-Sale Classification

Held-For-Sale Classification

We report a business as held-for-sale when management has approved the sale or received approval to sell the business and is committed to a formal plan, the business is available for immediate sale, the business is being actively marketed, the sale is anticipated to occur during the next 12 months and certain other specified criteria are met. A business classified as held-for-sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value, a loss is recognized.

Assets and liabilities related to the businesses classified as held-for-sale are separately reported in our Consolidated Balance Sheets beginning in the period in which the business is classified as held-for-sale.

At March 31, 2017, the following businesses were reported as held-for-sale:

United Guaranty Asia

On August 15, 2016, we entered into a definitive agreement to sell our 100 percent interest in United Guaranty Corporation (UGC) and certain related affiliates to Arch Capital Group Ltd. (Arch). This transaction closed on December 31, 2016 and we received proceeds of approximately $3.3 billion, consisting of $2.2 billion of cash, and approximately $1.1 billion of newly issued Arch convertible non-voting common-equivalent preferred stock. We also received $261 million in pre-closing dividends from UGC in the fourth quarter of 2016. However, due to pending regulatory approvals, United Guaranty Asia was not included in the December 31, 2016 closing and $40 million of cash consideration was retained by Arch. The closing with respect to United Guaranty Asia is expected to occur prior to year-end 2017, at which time AIG will receive the remaining consideration.

Sale of Certain Insurance Subsidiary Operations to Fairfax

On October 18, 2016, we entered into agreements to sell certain insurance operations to Fairfax Financial Holdings Limited (Fairfax). The agreements include the sale of our subsidiary operations in Argentina, Chile, Colombia, Uruguay and Venezuela, as well as insurance operations in Turkey. Fairfax will also acquire renewal rights for the portfolios of local business written by our operations in Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia, and assume certain of our operating assets and employees. Total cash consideration to us is expected to be approximately $234 million. The closing of the sales in Czech Republic, Hungary and Slovakia occurred on April 30, 2017, and the sale of the operations in Turkey closed on May 2, 2017. The remaining sales are subject to obtaining the relevant regulatory approvals and other customary closing conditions.

AIG Fuji Life Insurance

On November 14, 2016, we entered into an agreement to sell Fuji Life to FWD Group, the insurance arm of Pacific Century Group. The transaction closed on April 30, 2017.

The following table summarizes the components of assets and liabilities held-for-sale on the Condensed Consolidated Balance Sheets at March 31, 2017 and December 31, 2016:

March 31,December 31,
(in millions)20172016
Assets:
Fixed maturity securities$5,438$6,045
Equity securities14149
Mortgage and other loans receivable, net121137
Other invested assets2442
Short-term investments181130
Cash81133
Accrued investment income2221
Premiums and other receivables, net of allowance393351
Reinsurance assets, net of allowance138
Deferred policy acquisition costs422471
Other assets264273
Assets of businesses held for sale7,1937,720
Less: Loss Accrual(605)(521)
Total assets held for sale$6,588$7,199
Liabilities:
Liability for unpaid losses and loss adjustment expenses$489$402
Unearned premiums333297
Future policy benefits for life and accident and health insurance contracts4,1404,579
Other policyholder funds327378
Long-term debt108-
Other liabilities374450
Total liabilities held for sale$5,771$6,106