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Investments

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

5. Investments

SECURITIES AVAILABLE FOR SALE

The following table presents the amortized cost and fair value of our available for sale securities:


(in millions)		Amortized Cost		Allowance for Credit Losses(a)		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2022
Bonds available for sale:
U.S. government and government sponsored entities	$	8,524	$	—	$	48	$	(426)	$	8,146
Obligations of states, municipalities and political subdivisions		13,013		—		256		(669)		12,600
Non-U.S. governments		15,065		(71)		123		(1,443)		13,674
Corporate debt		158,714		(77)		1,724		(17,620)		142,741
Mortgage-backed, asset-backed and collateralized:
RMBS		20,060		(26)		1,125		(986)		20,173
CMBS		15,740		—		67		(920)		14,887
CDO/ABS		21,761		(1)		34		(1,280)		20,514
Total mortgage-backed, asset-backed and collateralized		57,561		(27)		1,226		(3,186)		55,574
Total bonds available for sale(b)	$	252,877	$	(175)	$	3,377	$	(23,344)	$	232,735
December 31, 2021
Bonds available for sale:
U.S. government and government sponsored entities	$	7,874	$	—	$	347	$	(27)	$	8,194
Obligations of states, municipalities and political subdivisions		12,760		—		1,782		(15)		14,527
Non-U.S. governments		15,858		—		719		(247)		16,330
Corporate debt		163,064		(89)		13,892		(1,259)		175,608
Mortgage-backed, asset-backed and collateralized:
RMBS		25,027		(9)		2,422		(153)		27,287
CMBS		15,333		—		555		(79)		15,809
CDO/ABS		19,294		—		276		(123)		19,447
Total mortgage-backed, asset-backed and collateralized		59,654		(9)		3,253		(355)		62,543
Total bonds available for sale(b)	$	259,210	$	(98)	$	19,993	$	(1,903)	$	277,202

(a)Represents the allowance for credit losses that has been recognized. Changes in the allowance for credit losses are recorded through Net realized gains (losses) and are not recognized in Other comprehensive income (loss).

(b)At June 30, 2022 and December 31, 2021, bonds available for sale held by us that were below investment grade or not rated totaled $22.9 billion or 10 percent and $27.0 billion or 10 percent, respectively.

Securities Available for Sale in a Loss Position for Which No Allowance for Credit Loss Has Been Recorded

The following table summarizes the fair value and gross unrealized losses on our available for sale securities, aggregated by major investment category and length of time that individual securities have been in a continuous unrealized loss position for which no allowance for credit loss has been recorded:


		Less than 12 Months				12 Months or More				Total
(in millions)		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
June 30, 2022
Bonds available for sale:
U.S. government and government sponsored entities	$	6,962	$	387	$	439	$	39	$	7,401	$	426
Obligations of states, municipalities and political subdivisions		6,802		641		99		28		6,901		669
Non-U.S. governments		9,110		988		1,658		455		10,768		1,443
Corporate debt		109,879		15,019		10,125		2,588		120,004		17,607
RMBS		10,351		809		914		123		11,265		932
CMBS		13,057		893		230		27		13,287		920
CDO/ABS		18,433		1,211		696		69		19,129		1,280
Total bonds available for sale	$	174,594	$	19,948	$	14,161	$	3,329	$	188,755	$	23,277
December 31, 2021
Bonds available for sale:
U.S. government and government sponsored entities	$	3,696	$	14	$	447	$	13	$	4,143	$	27
Obligations of states, municipalities and political subdivisions		714		11		57		4		771		15
Non-U.S. governments		4,644		115		1,324		132		5,968		247
Corporate debt		31,914		720		8,819		467		40,733		1,187
RMBS		5,362		102		1,154		46		6,516		148
CMBS		3,980		63		153		16		4,133		79
CDO/ABS		8,263		112		339		11		8,602		123
Total bonds available for sale	$	58,573	$	1,137	$	12,293	$	689	$	70,866	$	1,826

At June 30, 2022, we held 33,843 individual fixed maturity securities that were in an unrealized loss position and for which no allowance for credit losses has been recorded (including 4,273 individual fixed maturity securities that were in a continuous unrealized loss position for 12 months or more). At December 31, 2021, we held 15,029 individual fixed maturity securities that were in an unrealized loss position and for which no allowance for credit losses has been recorded (including 2,644 individual fixed maturity securities that were in a continuous unrealized loss position for 12 months or more). We did not recognize the unrealized losses in earnings on these fixed maturity securities at June 30, 2022 because it was determined that such losses were due to non-credit factors. Additionally, we neither intend to sell the securities nor do we believe that it is more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. For fixed maturity securities with significant declines, we performed fundamental credit analyses on a security-by-security basis, which included consideration of credit enhancements, liquidity position, expected defaults, industry and sector analysis, forecasts and available market data.

Contractual Maturities of Fixed Maturity Securities Available for Sale

The following table presents the amortized cost and fair value of fixed maturity securities available for sale by contractual maturity:


		Total Fixed Maturity Securities Available for Sale
(in millions)		Amortized Cost, Net of Allowance		Fair Value
June 30, 2022
Due in one year or less	$	7,507	$	7,478
Due after one year through five years		49,832		48,172
Due after five years through ten years		44,844		41,309
Due after ten years		92,985		80,202
Mortgage-backed, asset-backed and collateralized		57,534		55,574
Total	$	252,702	$	232,735

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

The following table presents the gross realized gains and gross realized losses from sales or maturities of our available for sale securities:


		Three Months Ended June 30,								Six Months Ended June 30,
		2022			2021					2022			2021
(in millions)		Gross Realized Gains		Gross Realized Losses		Gross Realized Gains		Gross Realized Losses		Gross Realized Gains		Gross Realized Losses		Gross Realized Gains		Gross Realized Losses
Fixed maturity securities	$	186	$	790	$	290	$	155	$	283	$	1,026	$	750	$	226

For the three- and six-month periods ended June 30, 2022, the aggregate fair value of available for sale securities sold was $9.2 billion and $14.0 billion, respectively, which resulted in net realized gains (losses) of $(604) million and $(743) million, respectively. Included within the net realized gains (losses) are $(122) million and $(154) million of net realized gains (losses) for the three- and six-month periods ended June 30, 2022, respectively, which relate to Fortitude Re funds withheld assets. These net realized gains (losses) are included in Net realized gains (losses) on Fortitude Re funds withheld assets.

For the three- and six-month periods ended June 30, 2021, the aggregate fair value of available for sale securities sold was $6.0 billion and $12.4 billion, respectively, which resulted in net realized gains of $135 million and $524 million, respectively. Included within the net realized gains are $95 million and $390 million of net realized gains for the three- and six-month periods ended June 30, 2021, respectively, which relate to Fortitude Re funds withheld assets. These net realized gains are included in Net realized gains (losses) on Fortitude Re funds withheld assets.

OTHER SECURITIES MEASURED AT FAIR VALUE

The following table presents the fair value of fixed maturity securities measured at fair value based on our election of the fair value option, which are reported in the other bond securities caption in the financial statements, and equity securities measured at fair value:


(in millions)		June 30, 2022				December 31, 2021
		Fair Value	Percent of Total			Fair Value	Percent of Total
Fixed maturity securities:
U.S. government and government sponsored entities	$	1,620	22	%	$	1,750	25	%
Obligations of states, municipalities and political subdivisions		99	1			97	1
Non-U.S. governments		76	1			76	1
Corporate debt		1,661	22			1,050	15
Mortgage-backed, asset-backed and collateralized:
RMBS		294	4			411	6
CMBS		321	4			315	4
CDO/ABS and other collateralized		2,827	38			2,579	37
Total mortgage-backed, asset-backed and collateralized		3,442	46			3,305	47
Total fixed maturity securities		6,898	92			6,278	89
Equity securities		629	8			739	11
Total	$	7,527	100	%	$	7,017	100	%

OTHER INVESTED ASSETS

The following table summarizes the carrying amount of other invested assets:


(in millions)		June 30, 2022		December 31, 2021

Alternative investments(a)(b)	$	11,520	$	10,951
Investment real estate(c)		2,565		2,727
All other investments(d)		1,955		1,990
Total	$	16,040	$	15,668

(a)At June 30, 2022, included hedge funds of $1.6 billion and private equity funds of $9.9 billion. At December 31, 2021, included hedge funds of $2.0 billion, private equity funds of $8.9 billion.

(b)At June 30, 2022, approximately 58 percent of our hedge fund portfolio is available for redemption in 2022. The remaining 42 percent will be available for redemption between 2023 and 2028.

(c)Represents values net of accumulated depreciation. At June 30, 2022 and December 31, 2021, the accumulated depreciation was $813 million and $778 million, respectively.

(d)Includes AIG's ownership interest in Fortitude Group Holdings, LLC (FRL), which is recorded using the measurement alternative for equity securities. Our investment in FRL totaled $156 million and $100 million at June 30, 2022 and December 31, 2021, respectively.

NET INVESTMENT INCOME

The following table presents the components of Net investment income:


Three Months Ended June 30,	2022						2021
(in millions)	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total
Available for sale fixed maturity securities, including short-term investments	$	2,147	$	267	$	2,414	$	2,130	$	361	$	2,491
Other fixed maturity securities(a)		(175)		(180)		(355)		93		6		99
Equity securities		(30)		—		(30)		(13)		—		(13)
Interest on mortgage and other loans		460		51		511		446		57		503
Alternative investments(b)		109		56		165		579		92		671
Real estate		32		—		32		57		—		57
Other investments(c)		37		3		40		(19)		1		(18)
Total investment income		2,580		197		2,777		3,273		517		3,790
Investment expenses		164		9		173		105		10		115
Net investment income	$	2,416	$	188	$	2,604	$	3,168	$	507	$	3,675


Six Months Ended June 30,	2022						2021
(in millions)	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets		Total		Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets		Total
Available for sale fixed maturity securities, including short-term investments	$	4,188	$	568	$	4,756	$	4,308	$	738	$	5,046
Other fixed maturity securities(a)		(376)		(298)		(674)		(9)		6		(3)
Equity securities		(57)		—		(57)		9		—		9
Interest on mortgage and other loans		913		97		1,010		860		104		964
Alternative investments(b)		778		127		905		1,151		161		1,312
Real estate		32		—		32		116		—		116
Other investments(c)		194		3		197		121		2		123
Total investment income		5,672		497		6,169		6,556		1,011		7,567
Investment expenses		310		18		328		217		18		235
Net investment income	$	5,362	$	479	$	5,841	$	6,339	$	993	$	7,332

(a)Included in the three- and six-month periods ended June 30, 2022 were income (loss) of $(55) million and $(151) million, respectively, related to fixed maturity securities measured at fair value that economically hedge liabilities described in (c) below. Included in the three- and six-month periods ended June 30, 2021 were income (loss) of $35 million and $(46) million, respectively, related to fixed maturity securities measured at fair value that economically hedge liabilities described in (c) below.

(b)Included income from hedge funds, private equity funds and affordable housing partnerships. Hedge funds are recorded as of the balance sheet date. Private equity funds are generally reported on a one-quarter lag.

(c)Included in the three- and six-month periods ended June 30, 2022 were income (loss) of $41 million and $132 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above. Included in the three- and six-month periods ended June 30, 2021 were income (loss) of $(40) million and $43 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above.

NET REALIZED GAINS AND LOSSES

The following table presents the components of Net realized gains (losses):


Three Months Ended June 30,		2022						2021
(in millions)	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total
Sales of fixed maturity securities	$	(482)	$	(122)	$	(604)	$	40	$	95	$	135

Change in allowance for credit losses on fixed maturity securities		(47)		(1)		(48)		10		4		14
Change in allowance for credit losses on loans		24		6		30		67		8		75
Foreign exchange transactions		(231)		(15)		(246)		139		9		148
Variable annuity embedded derivatives, net of related hedges		454		—		454		(53)		—		(53)
All other derivatives and hedge accounting		970		48		1,018		(336)		60		(276)
Sales of alternative investments and real estate investments		7		2		9		31		(3)		28
Other		7		(4)		3		59		—		59
Net realized gains (losses) – excluding Fortitude Re funds withheld embedded derivative		702		(86)		616		(43)		173		130
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative		—		2,776		2,776		—		(2,056)		(2,056)
Net realized gains (losses)	$	702	$	2,690	$	3,392	$	(43)	$	(1,883)	$	(1,926)


Six Months Ended June 30,	2022						2021
(in millions)	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total	Excluding Fortitude Re Funds Withheld Assets		Fortitude Re Funds Withheld Assets			Total
Sales of fixed maturity securities	$	(589)	$	(154)	$	(743)	$	134	$	390	$	524

Change in allowance for credit losses on fixed maturity securities		(100)		(41)		(141)		61		6		67
Change in allowance for credit losses on loans		5		(2)		3		108		3		111
Foreign exchange transactions		(245)		(24)		(269)		90		3		93
Variable annuity embedded derivatives, net of related hedges		960		—		960		36		—		36
All other derivatives and hedge accounting		1,909		(8)		1,901		15		(57)		(42)
Sales of alternative investments and real estate investments		23		3		26		57		1		58
Other		(20)		—		(20)		151		—		151
Net realized gains (losses) – excluding Fortitude Re funds withheld embedded derivative		1,943		(226)		1,717		652		346		998
Net realized gains on Fortitude Re funds withheld embedded derivative		—		6,094		6,094		—		326		326
Net realized gains	$	1,943	$	5,868	$	7,811	$	652	$	672	$	1,324

CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS

The following table presents the increase (decrease) in unrealized appreciation (depreciation) of our available for sale securities and other investments:


		Three Months Ended June 30,				Six Months Ended June 30,
(in millions)		2022		2021		2022		2021
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturity securities	$	(17,897)	$	5,851	$	(38,057)	$	(5,798)
Other investments		(7)		(5)		(14)		(5)
Total increase (decrease) in unrealized appreciation (depreciation) of investments	$	(17,904)	$	5,846	$	(38,071)	$	(5,803)

The following table summarizes the unrealized gains and losses recognized in Net investment income during the reporting period on equity securities and other investments still held at the reporting date:


Three Months Ended June 30,		2022						2021
(in millions)		Equities		Other Invested Assets		Total		Equities		Other Invested Assets		Total
Net gains (losses) recognized during the period on equity securities and other investments	$	(30)	$	(71)	$	(101)	$	(13)	$	543	$	530
Less: Net losses recognized during the period on equity securities and other investments sold during the period		(1)		(33)		(34)		(179)		(9)		(188)
Unrealized gains (losses) recognized during the reporting period on equity securities and other investments still held at the reporting date	$	(29)	$	(38)	$	(67)	$	166	$	552	$	718


Six Months Ended June 30,		2022						2021
(in millions)		Equities		Other Invested Assets		Total		Equities		Other Invested Assets		Total
Net gains (losses) recognized during the period on equity securities and other investments	$	(57)	$	404	$	347	$	9	$	1,013	$	1,022
Less: Net gains (losses) recognized during the period on equity securities and other investments sold during the period		93		(36)		57		(200)		15		(185)
Unrealized gains (losses) recognized during the reporting period on equity securities and other investments still held at the reporting date	$	(150)	$	440	$	290	$	209	$	998	$	1,207

EVALUATING INVESTMENTS FOR AN ALLOWANCE FOR CREDIT LOSSES

For a discussion of our policy for evaluating investments for an allowance for credit losses, see Note 5 to the Consolidated Financial Statements in the 2021 Annual Report.

Credit Impairments

The following table presents a rollforward of the changes in allowance for credit losses on available for sale fixed maturity securities by major investment category:


Three Months Ended June 30,		2022						2021
(in millions)	Structured		Non-Structured			Total	Structured		Non- Structured			Total
Balance, beginning of period	$	15	$	176	$	191	$	14	$	108	$	122
Additions:
Securities for which allowance for credit losses were not previously recorded		2		28		30		6		15		21


Reductions:
Securities sold during the period		(1)		(40)		(41)		(2)		(3)		(5)
Addition to (release of) the allowance for credit losses on securities that had an allowance recorded in a previous period, for which there was no intent to sell before recovery of amortized cost basis		10		8		18		(8)		(27)		(35)
Write-offs charged against the allowance		—		(22)		(22)		—		(6)		(6)
Other		—		(1)		(1)		—		—		—
Balance, end of period	$	26	$	149	$	175	$	10	$	87	$	97



Six Months Ended June 30,		2022						2021
(in millions)	Structured		Non-Structured			Total	Structured		Non- Structured			Total
Balance, beginning of period	$	8	$	90	$	98	$	17	$	169	$	186
Additions:
Securities for which allowance for credit losses were not previously recorded		51		156		207		8		28		36


Reductions:
Securities sold during the period		(1)		(41)		(42)		(3)		(7)		(10)
Addition to (release of) the allowance for credit losses on securities that had an allowance recorded in a previous period, for which there was no intent to sell before recovery of amortized cost basis		(32)		(34)		(66)		(12)		(91)		(103)
Write-offs charged against the allowance		—		(22)		(22)		—		(12)		(12)
Other		—		—		—		—		—		—
Balance, end of period	$	26	$	149	$	175	$	10	$	87	$	97

Purchased Credit Deteriorated (PCD) Securities

We purchase certain RMBS securities that have experienced more-than-insignificant deterioration in credit quality since origination. These are referred to as PCD assets. At the time of purchase an allowance is recognized for these PCD assets by adding it to the purchase price to arrive at the initial amortized cost. There is no credit loss expense recognized upon acquisition of a PCD asset. When determining the initial allowance for credit losses, management considers the historical performance of underlying assets and available market information as well as bond-specific structural considerations, such as credit enhancement and the priority of payment structure of the security. In addition, the process of estimating future cash flows includes, but is not limited to, the following critical inputs:

•Current delinquency rates;

•Expected default rates and the timing of such defaults;

•Loss severity and the timing of any recovery; and

•Expected prepayment speeds.

Subsequent to the acquisition date, the PCD assets follow the same accounting as other structured securities that are not high credit quality.

We did not purchase securities with more than insignificant credit deterioration since their origination during the six-month periods ended June 30, 2022 and 2021.

PLEDGED INVESTMENTS

Secured Financing and Similar Arrangements

We enter into secured financing transactions whereby certain securities are sold under agreements to repurchase (repurchase agreements), in which we transfer securities in exchange for cash, with an agreement by us to repurchase the same or substantially similar securities. Our secured financing transactions also include those that involve the transfer of securities to financial institutions in exchange for cash (securities lending agreements). In all of these secured financing transactions, the securities transferred by us (pledged collateral) may be sold or repledged by the counterparties. These agreements are recorded at their contracted amounts plus accrued interest, other than those that are accounted for at fair value.

Pledged collateral levels are monitored daily and are generally maintained at an agreed-upon percentage of the fair value of the amounts borrowed during the life of the transactions. In the event of a decline in the fair value of the pledged collateral under these secured financing transactions, we may be required to transfer cash or additional securities as pledged collateral under these agreements. At the termination of the transactions, we and our counterparties are obligated to return the amounts borrowed and the securities transferred, respectively.

The following table presents the fair value of securities pledged to counterparties under secured financing transactions, including repurchase and securities lending agreements:


(in millions)		June 30, 2022		December 31, 2021
Fixed maturity securities available for sale	$	2,937	$	3,583

At June 30, 2022 and December 31, 2021, amounts borrowed under repurchase and securities lending agreements totaled $3.5 billion and $3.7 billion, respectively.

The following table presents the fair value of securities pledged under our repurchase agreements by collateral type and by remaining contractual maturity:


		Remaining Contractual Maturity of the Agreements
(in millions)		Overnight and Continuous		up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
June 30, 2022
Bonds available for sale:
Non-U.S. governments	$	42	$	—	$	—	$	—	$	—	$	42
Corporate debt		219		61		—		—		—		280
Total	$	261	$	61	$	—	$	—	$	—	$	322


December 31, 2021
Bonds available for sale:
Non-U.S. governments	$	48	$	—	$	—	$	—	$	—	$	48
Corporate debt		128		61		22		—		—		211
Total	$	176	$	61	$	22	$	—	$	—	$	259

The following table presents the fair value of securities pledged under our securities lending agreements by collateral type and by remaining contractual maturity:


		Remaining Contractual Maturity of the Agreements
(in millions)		Overnight and Continuous		up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
June 30, 2022
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	—	$	197	$	—	$	—	$	—	$	197
Non-U.S. governments		—		457		13		—		—		470
Corporate debt		—		1,816		132		—		—		1,948
Other bond securities:
Non-U.S. governments		—		—		—		—		—		—
Corporate debt		—		—		—		—		—		—
Total	$	—	$	2,470	$	145	$	—	$	—	$	2,615


December 31, 2021
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	—	$	—	$	106	$	—	$	—	$	106
Non-U.S. governments		—		—		43		—		—		43
Corporate debt		—		534		2,641		—		—		3,175
Total	$	—	$	534	$	2,790	$	—	$	—	$	3,324

We also enter into agreements in which securities are purchased by us under agreements to resell (reverse repurchase agreements), which are accounted for as secured financing transactions and reported as short-term investments or other assets, depending on their terms. These agreements are recorded at their contracted resale amounts plus accrued interest, other than those that are accounted for at fair value. In all reverse repurchase transactions, we take possession of or obtain a security interest in the related securities, and we have the right to sell or repledge this collateral received.

The following table presents information on the fair value of securities pledged to us under reverse repurchase agreements:


(in millions)		June 30, 2022		December 31, 2021
Securities collateral pledged to us	$	411	$	1,839

At June 30, 2022 and December 31, 2021, the carrying value of reverse repurchase agreements totaled $409 million and $1.9 billion, respectively.

We do not currently offset any secured financing transactions. All such transactions are collateralized and margined on a daily basis consistent with market standards and subject to enforceable master netting arrangements with rights of set off.

Insurance – Statutory and Other Deposits

The total carrying value of cash and securities deposited by our insurance subsidiaries under requirements of regulatory authorities or other insurance-related arrangements, including certain annuity-related obligations and certain reinsurance contracts, was $12.1 billion and $13.5 billion at June 30, 2022 and December 31, 2021, respectively.

Other Pledges and Restrictions

Certain of our subsidiaries are members of Federal Home Loan Banks (FHLBs) and such membership requires the members to own stock in these FHLBs. We owned an aggregate of $213 million and $211 million of stock in FHLBs at June 30, 2022 and December 31, 2021, respectively. In addition, our subsidiaries have pledged securities available for sale and residential loans associated with borrowings and funding agreements from FHLBs, with a fair value of $4.8 billion and $2.0 billion, respectively, at June 30, 2022 and $5.1 billion and $1.5 billion, respectively, at December 31, 2021.

Certain GIAs have provisions that require collateral to be posted or payments to be made by us upon a downgrade of our long-term debt ratings. The actual amount of collateral required to be posted to the counterparties in the event of such downgrades, and the aggregate amount of payments that we could be required to make, depend on market conditions, the fair value of outstanding affected transactions and other factors prevailing at and after the time of the downgrade. The fair value of securities pledged as collateral with respect to these obligations was approximately $1.5 billion and $1.4 billion, at June 30, 2022 and December 31, 2021, respectively. This collateral primarily consists of securities of the U.S. government and government sponsored entities and generally cannot be repledged or resold by the counterparties.

Investments held in escrow accounts or otherwise subject to restriction as to their use were $571 million and $514 million, comprised of bonds available for sale and short-term investments at June 30, 2022 and December 31, 2021, respectively.

Reinsurance transactions between AIG and Fortitude Re were structured as modco and loss portfolio transfer arrangements with funds withheld.