XML 74 R12.htm IDEA: XBRL DOCUMENT

Investments

9 Months Ended

Sep. 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
September 30, 2022
Bonds available for sale:
U.S. government and government sponsored entities	$	8,609	$	—	$	20	$	(679)	$	7,950
Obligations of states, municipalities and political subdivisions		13,072		—		75		(1,256)		11,891
Non-U.S. governments		14,866		(9)		92		(1,942)		13,007
Corporate debt		157,955		(75)		1,024		(25,568)		133,336
Mortgage-backed, asset-backed and collateralized:
RMBS		19,174		(30)		908		(1,545)		18,507
CMBS		15,272		—		12		(1,353)		13,931
CDO/ABS		23,035		(1)		57		(1,946)		21,145
Total mortgage-backed, asset-backed and collateralized		57,481		(31)		977		(4,844)		53,583
Total bonds available for sale(b)	$	251,983	$	(115)	$	2,188	$	(34,289)	$	219,767
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 September 30, 2022 and December 31, 2021, bonds available for sale held by us that were below investment grade or not rated totaled $22.4 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
September 30, 2022
Bonds available for sale:
U.S. government and government sponsored entities	$	6,560	$	588	$	947	$	91	$	7,507	$	679
Obligations of states, municipalities and political subdivisions		9,854		1,225		144		31		9,998		1,256
Non-U.S. governments		8,824		1,387		2,382		529		11,206		1,916
Corporate debt		110,817		22,151		11,263		3,345		122,080		25,496
RMBS		10,909		1,362		513		96		11,422		1,458
CMBS		13,068		1,312		335		41		13,403		1,353
CDO/ABS		19,110		1,788		1,030		158		20,140		1,946
Total bonds available for sale	$	179,142	$	29,813	$	16,614	$	4,291	$	195,756	$	34,104
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 September 30, 2022, we held 36,267 individual fixed maturity securities that were in an unrealized loss position and for which no allowance for credit losses has been recorded (including 5,241 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 September 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
September 30, 2022
Due in one year or less	$	8,048	$	7,972
Due after one year through five years		50,823		48,051
Due after five years through ten years		44,127		38,775
Due after ten years		91,420		71,386
Mortgage-backed, asset-backed and collateralized		57,450		53,583
Total	$	251,868	$	219,767

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 September 30,								Nine Months Ended September 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	$	123	$	254	$	348	$	123	$	406	$	1,280	$	1,098	$	349

For the three- and nine-month periods ended September 30, 2022, the aggregate fair value of available for sale securities sold was $2.0 billion and $16.0 billion, respectively, which resulted in net realized gains (losses) of $(131) million and $(874) million, respectively. Included within the net realized gains (losses) are $(64) million and $(218) million of net realized gains (losses) for the three- and nine-month periods ended September 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 nine-month periods ended September 30, 2021, the aggregate fair value of available for sale securities sold was $6.7 billion and $19.1 billion, respectively, which resulted in net realized gains (losses) of $225 million and $749 million, respectively. Included within the net realized gains (losses) are $159 million and $549 million of net realized gains (losses) for the three- and nine-month periods ended September 30, 2021, 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.

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)		September 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	$	1,565	20	%	$	1,750	25	%
Obligations of states, municipalities and political subdivisions		111	1			97	1
Non-U.S. governments		64	1			76	1
Corporate debt		2,034	26			1,050	15
Mortgage-backed, asset-backed and collateralized:
RMBS		341	4			411	6
CMBS		391	5			315	4
CDO/ABS and other collateralized		2,625	34			2,579	37
Total mortgage-backed, asset-backed and collateralized		3,357	43			3,305	47
Total fixed maturity securities		7,131	91			6,278	89
Equity securities		608	9			739	11
Total	$	7,739	100	%	$	7,017	100	%

OTHER INVESTED ASSETS

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


(in millions)		September 30, 2022		December 31, 2021
Alternative investments(a)(b)	$	11,625	$	10,951
Investment real estate(c)		2,205		2,727
All other investments(d)		1,964		1,990
Total	$	15,794	$	15,668

(a)At September 30, 2022, included hedge funds of $1.5 billion and private equity funds of $10.1 billion. At December 31, 2021, included hedge funds of $2.0 billion, private equity funds of $8.9 billion.

(b)At September 30, 2022, approximately 56 percent of our hedge fund portfolio is available for redemption in 2022. The remaining 44 percent will be available for redemption between 2023 and 2028.

(c)Represents values net of accumulated depreciation. At September 30, 2022 and December 31, 2021, the accumulated depreciation was $774 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 September 30, 2022 and December 31, 2021, respectively.

NET INVESTMENT INCOME

The following table presents the components of Net investment income:


Three Months Ended September 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	$	2,150	$	256	$	2,406	$	2,173	$	374	$	2,547
Other fixed maturity securities(a)		(73)		(168)		(241)		32		3		35
Equity securities		16		—		16		(45)		—		(45)
Interest on mortgage and other loans		515		53		568		435		50		485
Alternative investments(b)		(49)		11		(38)		616		77		693
Real estate		14		—		14		99		—		99
Other investments(c)		83		11		94		41		1		42
Total investment income		2,656		163		2,819		3,351		505		3,856
Investment expenses		143		8		151		131		10		141
Net investment income	$	2,513	$	155	$	2,668	$	3,220	$	495	$	3,715


Nine Months Ended September 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	$	6,338	$	824	$	7,162	$	6,481	$	1,112	$	7,593
Other fixed maturity securities(a)		(449)		(466)		(915)		23		9		32
Equity securities		(41)		—		(41)		(36)		—		(36)
Interest on mortgage and other loans		1,428		150		1,578		1,295		154		1,449
Alternative investments(b)		729		138		867		1,767		238		2,005
Real estate		46		—		46		215		—		215
Other investments(c)		277		14		291		162		3		165
Total investment income		8,328		660		8,988		9,907		1,516		11,423
Investment expenses		453		26		479		348		28		376
Net investment income	$	7,875	$	634	$	8,509	$	9,559	$	1,488	$	11,047

(a)Included in the three- and nine-month periods ended September 30, 2022 were income (loss) of $(57) million and $(208) million, respectively, related to fixed maturity securities measured at fair value that economically hedge liabilities described in (c) below. Included in the three- and nine-month periods ended September 30, 2021 were income (loss) of $(3) million and $(49) 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 nine-month periods ended September 30, 2022 were income (loss) of $62 million and $194 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 nine-month periods ended September 30, 2021 were income (loss) of $9 million and $52 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 September 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	$	(67)	$	(64)	$	(131)	$	66	$	159	$	225


Change in allowance for credit losses on fixed maturity securities		(1)		7		6		3		1		4
Change in allowance for credit losses on loans		(26)		(24)		(50)		22		3		25
Foreign exchange transactions		(244)		(22)		(266)		(127)		(9)		(136)
Variable annuity embedded derivatives, net of related hedges		441		—		441		(39)		—		(39)
All other derivatives and hedge accounting		1,240		(13)		1,227		317		(15)		302
Sales of alternative investments and real estate investments		137		32		169		336		52		388
Other		24		(2)		22		101		(1)		100
Net realized gains (losses) – excluding Fortitude Re funds withheld embedded derivative		1,504		(86)		1,418		679		190		869
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative		—		1,757		1,757		—		(209)		(209)
Net realized gains (losses)	$	1,504	$	1,671	$	3,175	$	679	$	(19)	$	660


Nine Months Ended September 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	$	(656)	$	(218)	$	(874)	$	200	$	549	$	749

Change in allowance for credit losses on fixed maturity securities		(101)		(34)		(135)		64		7		71
Change in allowance for credit losses on loans		(21)		(26)		(47)		130		6		136
Foreign exchange transactions		(489)		(46)		(535)		(37)		(6)		(43)
Variable annuity embedded derivatives, net of related hedges		1,401		—		1,401		(3)		—		(3)
All other derivatives and hedge accounting		3,149		(21)		3,128		332		(72)		260
Sales of alternative investments and real estate investments		160		35		195		393		53		446
Other		4		(2)		2		252		(1)		251
Net realized gains (losses) – excluding Fortitude Re funds withheld embedded derivative		3,447		(312)		3,135		1,331		536		1,867
Net realized gains on Fortitude Re funds withheld embedded derivative		—		7,851		7,851		—		117		117
Net realized gains	$	3,447	$	7,539	$	10,986	$	1,331	$	653	$	1,984

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 September 30,				Nine Months Ended September 30,
(in millions)		2022		2021		2022		2021
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturity securities	$	(12,134)	$	(2,065)	$	(50,191)	$	(7,863)
Other investments		—		—		(14)		(5)
Total increase (decrease) in unrealized appreciation (depreciation) of investments	$	(12,134)	$	(2,065)	$	(50,205)	$	(7,868)

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 September 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	$	16	$	(98)	$	(82)	$	(45)	$	471	$	426
Less: Net gains recognized during the period on equity securities and other investments sold during the period		26		13		39		8		23		31
Unrealized gains (losses) recognized during the reporting period on equity securities and other investments still held at the reporting date	$	(10)	$	(111)	$	(121)	$	(53)	$	448	$	395


Nine Months Ended September 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	$	(41)	$	306	$	265	$	(36)	$	1,484	$	1,448
Less: Net gains (losses) recognized during the period on equity securities and other investments sold during the period		119		(23)		96		(192)		38		(154)
Unrealized gains (losses) recognized during the reporting period on equity securities and other investments still held at the reporting date	$	(160)	$	329	$	169	$	156	$	1,446	$	1,602

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 September 30,		2022						2021
(in millions)	Structured		Non- Structured			Total	Structured		Non- Structured			Total
Balance, beginning of period	$	26	$	149	$	175	$	10	$	87	$	97
Additions:
Securities for which allowance for credit losses were not previously recorded		6		25		31		—		20		20


Reductions:
Securities sold during the period		(1)		(45)		(46)		—		(21)		(21)
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		—		(37)		(37)		(3)		(21)		(24)
Write-offs charged against the allowance		—		(7)		(7)		—		(6)		(6)
Other		(1)		—		(1)		—		—		—
Balance, end of period	$	30	$	85	$	115	$	7	$	59	$	66



Nine Months Ended September 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		57		181		238		8		48		56


Reductions:
Securities sold during the period		(2)		(86)		(88)		(3)		(28)		(31)
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)		(71)		(103)		(15)		(112)		(127)
Write-offs charged against the allowance		—		(29)		(29)		—		(18)		(18)
Other		(1)		—		(1)		—		—		—
Balance, end of period	$	30	$	85	$	115	$	7	$	59	$	66

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 nine-month periods ended September 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)		September 30, 2022		December 31, 2021
Fixed maturity securities available for sale	$	321	$	3,583

At September 30, 2022 and December 31, 2021, amounts borrowed under repurchase and securities lending agreements totaled $408 million 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
September 30, 2022
Bonds available for sale:
U.S. government and government sponsored entities	$	—	$	26	$	50	$	14	$	—	$	90
Non-U.S. governments		28		—		—		28		—		56
Corporate debt		175		—		—		—		—		175
Total	$	203	$	26	$	50	$	42	$	—	$	321


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

September 30, 2022

Bonds available for sale:

Obligations of states, municipalities and political subdivisions

—

Non-U.S. governments

—

Total

—


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)		September 30, 2022		December 31, 2021
Securities collateral pledged to us	$	265	$	1,839

At September 30, 2022 and December 31, 2021, the carrying value of reverse repurchase agreements totaled $270 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 $11.4 billion and $13.5 billion at September 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 $239 million and $211 million of stock in FHLBs at September 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 $5.5 billion and $1.8 billion, respectively, at September 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 September 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 $594 million and $514 million, comprised of bonds available for sale and short-term investments at September 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.