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Investments

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Fixed Maturities and Equity Securities

Available-for-sale and FVO fixed maturities were as follows as of December 31, 2018:



	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Embedded Derivatives⁽²⁾		Fair Value		OTTI⁽³⁾⁽⁴⁾
Fixed maturities:
U.S. Treasuries	$	651	$	87	$	—	$	—	$	738	$	—
U.S. Government agencies and authorities	—		—		—		—		—		—
State, municipalities and political subdivisions	754		18		8		—		764		—
U.S. corporate public securities	7,908		288		181		—		8,015		—
U.S. corporate private securities	3,686		73		106		—		3,653		—
Foreign corporate public securities and foreign governments⁽¹⁾	2,551		69		80		—		2,540		—
Foreign corporate private securities⁽¹⁾	3,235		37		97		—		3,175		—

Residential mortgage-backed securities:
Agency	1,989		54		20		4		2,027		—
Non-Agency	977		39		12		5		1,009		3
Total Residential mortgage-backed securities	2,966		93		32		9		3,036		3
Commercial mortgage-backed securities	1,917		16		28		—		1,905		—
Other asset-backed securities	1,230		6		28		—		1,208		2

Total fixed maturities, including securities pledged	24,898		687		560		9		25,034		5
Less: Securities pledged	867		45		30		—		882		—
Total fixed maturities	24,031		642		530		9		24,152		5

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Consolidated Statements of Operations.

⁽³⁾ Represents OTTI reported as a component of Other comprehensive income (loss).

⁽⁴⁾ Amount excludes $137 of net unrealized gains on impaired available-for-sale securities.

Available-for-sale and FVO fixed maturities and equity securities were as follows as of December 31, 2017:



	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Embedded Derivatives⁽²⁾		Fair Value		OTTI⁽³⁾⁽⁴⁾
Fixed maturities:
U.S. Treasuries	$	547	$	109	$	—	$	—	$	656	$	—
U.S. Government agencies and authorities	3		—		—		—		3		—
State, municipalities and political subdivisions	842		40		4		—		878		—
U.S. corporate public securities	8,476		786		26		—		9,236		—
U.S. corporate private securities	3,387		148		38		—		3,497		—
Foreign corporate public securities and foreign governments⁽¹⁾	2,594		192		9		—		2,777		—
Foreign corporate private securities⁽¹⁾	3,105		155		45		—		3,215		7

Residential mortgage-backed securities:
Agency	1,878		65		17		6		1,932		—
Non-Agency	639		54		2		6		697		4
Total Residential mortgage-backed securities	2,517		119		19		12		2,629		4
Commercial mortgage-backed securities	1,437		39		6		—		1,470		—
Other asset-backed securities	671		11		1		—		681		2

Total fixed maturities, including securities pledged	23,579		1,599		148		12		25,042		13
Less: Securities pledged	864		104		8		—		960		—
Total fixed maturities	22,715		1,495		140		12		24,082		13
Equity securities	45		15		—		—		60		—
Total fixed maturities and equity securities investments	$	22,760	$	1,510	$	140	$	12	$	24,142	$	13

⁽¹⁾ Primarily U.S. dollar denominated.

⁽³⁾ Represents OTTI reported as a component of Other comprehensive income (loss).

⁽⁴⁾ Amount excludes $190 of net unrealized gains on impaired available-for-sale securities.

The amortized cost and fair value of fixed maturities, including securities pledged, as of December 31, 2018, are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called or prepaid. MBS and Other ABS are shown separately because they are not due at a single maturity date.



	Amortized Cost		Fair Value
Due to mature:
One year or less	$	548	$	552
After one year through five years	4,184		4,203
After five years through ten years	5,971		5,864
After ten years	8,082		8,266
Mortgage-backed securities	4,883		4,941
Other asset-backed securities	1,230		1,208
Fixed maturities, including securities pledged	$	24,898	$	25,034

The investment portfolio is monitored to maintain a diversified portfolio on an ongoing basis. Credit risk is mitigated by monitoring concentrations by issuer, sector and geographic stratification and limiting exposure to any one issuer.

As of December 31, 2018 and 2017, the Company did not have any investments in a single issuer, other than obligations of the U.S. Government and government agencies, with a carrying value in excess of 10% of the Company's consolidated Shareholder's equity.

The following tables present the composition of the U.S. and foreign corporate securities within the fixed maturity portfolio by industry category as of the dates indicated:



	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Fair Value
December 31, 2018
Communications	$	1,139	$	55	$	21	$	1,173
Financial	2,707		101		47		2,761
Industrial and other companies	7,604		152		214		7,542
Energy	1,884		55		81		1,858
Utilities	2,974		80		74		2,980
Transportation	729		14		17		726
Total	$	17,037	$	457	$	454	$	17,040

December 31, 2017
Communications	$	1,145	$	114	$	1	$	1,258
Financial	2,750		185		4		2,931
Industrial and other companies	7,953		532		65		8,420
Energy	1,970		159		33		2,096
Utilities	2,725		216		11		2,930
Transportation	697		52		2		747
Total	$	17,240	$	1,258	$	116	$	18,382

Fixed Maturities

The Company invests in various categories of CMOs, including CMOs that are not agency-backed, that are subject to different degrees of risk from changes in interest rates and defaults. The principal risks inherent in holding CMOs are prepayment and extension risks related to significant decreases and increases in interest rates resulting in the prepayment of principal from the underlying mortgages, either earlier or later than originally anticipated. As of December 31, 2018 and 2017, approximately 52.5% and 52.1%, respectively, of the Company's CMO holdings, were invested in the above mentioned types of CMOs such as interest-only or principal-only strips, that are subject to more prepayment and extension risk than traditional CMOs.

Public corporate fixed maturity securities are distinguished from private corporate fixed maturity securities based upon the manner in which they are transacted. Public corporate fixed maturity securities are issued initially through market intermediaries on a registered basis or pursuant to Rule 144A under the Securities Act of 1933 (the "Securities Act") and are traded on the secondary market through brokers acting as principal. Private corporate fixed maturity securities are originally issued by borrowers directly to investors pursuant to Section 4(a)(2) of the Securities Act, and are traded in the secondary market directly with counterparties, either without the participation of a broker or in agency transactions.

Repurchase Agreements

As of December 31, 2018 and 2017, the Company did not have any securities pledged in dollar rolls, repurchase agreement transactions or reverse repurchase agreements.

Securities Lending

As of December 31, 2018 and 2017, the fair value of loaned securities was $759 and $799, respectively, and is included in Securities pledged on the Consolidated Balance Sheets.

If cash is received as collateral, the lending agent retains the cash collateral and invests it in short-term liquid assets on behalf of the Company. As of December 31, 2018 and 2017, cash collateral retained by the lending agent and invested in short-term liquid assets on the Company's behalf was $719 and $744, respectively, and is recorded in Short-term investments under securities loan agreements, including collateral delivered on the Consolidated Balance Sheets. As of December 31, 2018 and 2017, liabilities to return collateral of $719 and $744, respectively, are included in Payables under securities loan agreements, including collateral held, on the Consolidated Balance Sheets.

The Company accepts non-cash collateral in the form of securities. The securities retained as collateral by the lending agent may not be sold or re-pledged, except in the event of default, and are not reflected on the Company’s Consolidated Balance Sheets. This collateral generally consists of U.S. Treasury, U.S. Government agency securities and MBS pools. As of December 31, 2018 and 2017, the fair value of securities retained as collateral by the lending agent on the Company’s behalf was $67 and $61, respectively.

The following table presents borrowings under securities lending transactions by asset class pledged for the dates indicated:



	December 31, 2018¹⁾⁽²⁾		December 31, 2017⁽¹⁾⁽²⁾
U.S. Treasuries	$	92	$	177
U.S. corporate public securities	523		460
Foreign corporate public securities and foreign governments	170		168
Equity Securities	1		—
Payables under securities loan agreements	$	786	$	805

⁽¹⁾As of December 31, 2018 and December 31, 2017, borrowings under securities lending transactions include cash collateral of $719 and $744, respectively.

⁽²⁾As of December 31, 2018 and December 31, 2017, borrowings under securities lending transactions include non-cash collateral of $67 and $61, respectively.

The Company's securities lending activities are conducted on an overnight basis, and all securities loaned can be recalled at any time. The Company does not offset assets and liabilities associated with its securities lending program.

Variable Interest Entities

The Company holds certain VIEs for investment purposes. VIEs may be in the form of private placement securities, structured securities, securitization transactions, or limited partnerships. The Company has reviewed each of its holdings and determined that consolidation of these investments in the Company's financial statements is not required, as the Company is not the primary beneficiary, because the Company does not have both the power to direct the activities that most significantly impact the entity's economic performance and the obligation or right to potentially significant losses or benefits, for any of its investments in VIEs. The Company did not provide any non-contractual financial support and its carrying value represents the Company's exposure to loss. The carrying value of the investments in VIEs was $583 and $411 as of December 31, 2018 and 2017, respectively; these investments are included in Limited partnerships/corporations on the Consolidated Balance Sheets. Income and losses recognized on these investments are reported in Net investment income in the Consolidated Statements of Operations.

Securitizations

The Company invests in various tranches of securitization entities, including RMBS, CMBS and ABS. Through its investments, the Company is not obligated to provide any financial or other support to these entities. Each of the RMBS, CMBS and ABS entities are thinly capitalized by design and considered VIEs. The Company's involvement with these entities is limited to that of a passive investor. The Company has no unilateral right to appoint or remove the servicer, special servicer or investment manager, which are generally viewed to have the power to direct the activities that most significantly impact the securitization entities' economic performance, in any of these entities, nor does the Company function in any of these roles. The Company, through its investments or other arrangements, does not have the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity. Therefore, the Company is not the primary beneficiary and will not consolidate any of the RMBS, CMBS and ABS entities in which it holds investments. These investments are accounted for as investments available-for-sale as described in the Business, Basis of Presentation and Significant Accounting Policies Note to these Consolidated Financial Statements and unrealized capital gains (losses) on these securities are recorded directly in AOCI, except for certain RMBS that are accounted for under the FVO for which changes in fair value are reflected in Other net realized gains (losses) in the Consolidated Statements of Operations. The Company’s maximum exposure to loss on these structured investments is limited to the amount of its investment.

Unrealized Capital Losses

Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of December 31, 2018:



	Six Months or Less Below Amortized Cost				More Than Six Months and Twelve Months or Less Below Amortized Cost				More Than Twelve Months Below Amortized Cost				Total
	Fair Value		Unrealized Capital Losses		Fair Value		Unrealized Capital Losses		Fair Value		Unrealized Capital Losses		Fair Value		Unrealized Capital Losses
U.S. Treasuries	$	—	$	—	$	—	$	—	$	15	$	—	$	15	$	—
State, municipalities and political subdivisions	60		—		131		3		88		5		279		8
U.S. corporate public securities	1,285		37		1,775		94		535		50		3,595		181
U.S. corporate private securities	639		13		863		27		579		66		2,081		106
Foreign corporate public securities and foreign governments	503		12		656		42		169		26		1,328		80
Foreign corporate private securities	604		10		900		67		221		20		1,725		97
Residential mortgage-backed	345		6		215		5		412		21		972		32
Commercial mortgage-backed	447		6		418		10		312		12		1,177		28
Other asset-backed	476		11		416		16		61		1		953		28
Total	$	4,359	$	95	$	5,374	$	264	$	2,392	$	201	$	12,125	$	560



	Six Months or Less Below Amortized Cost				More Than Six Months and Twelve Months or Less Below Amortized Cost				More Than Twelve Months Below Amortized Cost				Total
	Fair Value		Unrealized Capital Losses		Fair Value		Unrealized Capital Losses		Fair Value		Unrealized Capital Losses		Fair Value		Unrealized Capital Losses
U.S. Treasuries	$	18	$	—	$	—	$	—	$	12	$	—	$	30	$	—
State, municipalities and political subdivisions	34		—		1		—		91		4		126		4
U.S. corporate public securities	504		11		—		—		304		15		808		26
U.S. corporate private securities	226		2		46		2		499		34		771		38
Foreign corporate public securities and foreign governments	148		1		5		—		99		8		252		9
Foreign corporate private securities	135		38		13		—		161		7		309		45
Residential mortgage-backed	263		5		26		1		438		13		727		19
Commercial mortgage-backed	436		5		19		—		50		1		505		6
Other asset-backed	95		1		9		—		38		—		142		1
Total	$	1,859	$	63	$	119	$	3	$	1,692	$	82	$	3,670	$	148

Of the unrealized capital losses aged more than twelve months, the average market value of the related fixed maturities was 92.2% and 95.4% of the average book value as of December 31, 2018 and 2017, respectively.

Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive months as indicated in the tables below, were as follows as of the dates indicated:



	Amortized Cost				Unrealized Capital Losses				Number of Securities
	< 20%		> 20%		< 20%		> 20%		< 20%	> 20%
December 31, 2018
Six months or less below amortized cost	$	4,531	$	88	$	106	$	21	826	25
More than six months and twelve months or less below amortized cost	5,535		73		235		27		1,063	6
More than twelve months below amortized cost	2,378		80		144		27		519	5
Total	$	12,444	$	241	$	485	$	75	2,408	36

December 31, 2017
Six months or less below amortized cost	$	1,883	$	67	$	30	$	38	433	7
More than six months and twelve months or less below amortized cost	128		7		4		2		37	1
More than twelve months below amortized cost	1,661		72		53		21		335	7
Total	$	3,672	$	146	$	87	$	61	805	15

Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, by market sector for instances in which fair value declined below amortized cost by greater than or less than 20% were as follows as of the dates indicated:



	Amortized Cost				Unrealized Capital Losses				Number of Securities
	< 20%		> 20%		< 20%		> 20%		< 20%	> 20%
December 31, 2018
U.S. Treasuries	$	15	$	—	$	—	$	—	5	—
State, municipalities and political subdivisions	287		—		8		—		132	—
U.S. corporate public securities	3,721		55		164		17		796	8
U.S. corporate private securities	2,120		67		84		22		245	2
Foreign corporate public securities and foreign governments	1,348		60		65		15		307	9
Foreign corporate private securities	1,765		57		76		21		157	6
Residential mortgage-backed	1,004		—		32		—		301	8
Commercial mortgage-backed	1,205		—		28		—		228	—
Other asset-backed	979		2		28		—		237	3
Total	$	12,444	$	241	$	485	$	75	2,408	36

December 31, 2017
U.S. Treasuries	$	30	$	—	$	—	$	—	6	—
State, municipalities and political subdivisions	130		—		4		—		96	—
U.S. corporate public securities	828		6		24		2		167	2
U.S. corporate private securities	743		66		18		20		71	2
Foreign corporate public securities and foreign governments	254		7		7		2		61	1
Foreign corporate private securities	288		66		8		37		35	6
Residential mortgage-backed	746		—		19		—		194	3
Commercial mortgage-backed	511		—		6		—		131	—
Other asset-backed	142		1		1		—		44	1
Total	$	3,672	$	146	$	87	$	61	805	15

Investments with fair values less than amortized cost are included in the Company's other-than-temporary impairment analysis. Impairments were recognized as disclosed in the "Evaluating Securities for Other-Than-Temporary Impairments" section below. The Company evaluates non-agency RMBS and ABS for "other-than-temporary impairments" each quarter based on actual and projected cash flows after considering the quality and updated loan-to-value ratios reflecting current home prices of underlying collateral, forecasted loss severity, the payment priority within the tranche structure of the security and amount of any credit enhancements. The Company's assessment of current levels of cash flows compared to estimated cash flows at the time the securities were acquired (typically pre-2008) indicates the amount and the pace of projected cash flows from the underlying collateral has generally been lower and slower, respectively. However, since cash flows are typically projected at a trust level, the impairment review incorporates the security's position within the trust structure as well as credit enhancement remaining in the trust to determine whether an impairment is warranted. Therefore, while lower and slower cash flows will impact the trust, the effect on the valuation of a particular security within the trust will also be dependent upon the trust structure. Where the assessment continues to project full recovery of principal and interest on schedule, the Company has not recorded an impairment. Based on this analysis, the Company determined that the remaining investments in an unrealized loss position were not other-than-temporarily impaired and therefore no further other-than-temporary impairment was necessary.

Troubled Debt Restructuring

The Company invests in high quality, well performing portfolios of commercial mortgage loans and private placements. Under certain circumstances, modifications are granted to these contracts. Each modification is evaluated as to whether a troubled debt restructuring has occurred. A modification is a troubled debt restructuring when the borrower is in financial difficulty and the creditor makes concessions. Generally, the types of concessions may include reducing the face amount or maturity amount of the debt as originally stated, reducing the contractual interest rate, extending the maturity date at an interest rate lower than current market interest rates and/or reducing accrued interest. The Company considers the amount, timing and extent of the concession granted in determining any impairment or changes in the specific valuation allowance recorded in connection with the troubled debt restructuring. A valuation allowance may have been recorded prior to the quarter when the loan is modified in a troubled debt restructuring. Accordingly, the carrying value (net of the specific valuation allowance) before and after modification through a troubled debt restructuring may not change significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. As of December 31, 2018, the Company did not have any new commercial mortgage loan or private placement troubled debt restructuring. As of December 31, 2017, the Company did not have any new commercial mortgage loan troubled debt restructuring and had one private placement troubled debt restructuring with a pre-modification and post-modification carrying value of $3.

As of December 31, 2018 and 2017, the Company did not have any commercial mortgage loans or private placements modified in a troubled debt restructuring with a subsequent payment default.

Mortgage Loans on Real Estate

The Company diversifies its commercial mortgage loan portfolio by geographic region and property type to reduce concentration risk. The Company manages risk when originating commercial mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate. Subsequently, the Company continuously evaluates mortgage loans based on relevant current information including a review of loan-specific credit quality, property characteristics and market trends. The components to evaluate debt service coverage are received and reviewed at least annually to determine the level of risk.

The following table summarizes the Company's investment in mortgage loans as of the dates indicated:



	December 31, 2018								December 31, 2017
	Impaired		Non Impaired			Total			Impaired		Non Impaired			Total
Commercial mortgage loans	$	4	$	4,915		$	4,919		$	4	$	4,907		$	4,911
Collective valuation allowance for losses	N/A		(1		)	(1		)	N/A		(1		)	(1		)
Total net commercial mortgage loans	$	4	$	4,914		$	4,918		$	4	$	4,906		$	4,910

N/A - Not Applicable

There were no impairments taken on the mortgage loan portfolio for the years ended December 31, 2018, 2017 and 2016.

The following table summarizes the activity in the allowance for losses for commercial mortgage loans for the periods indicated:



	December 31, 2018		December 31, 2017
Collective valuation allowance for losses, balance at January 1	$	1	$	1
Addition to (reduction of) allowance for losses	—		—
Collective valuation allowance for losses, end of period	$	1	$	1

The carrying values and unpaid principal balances of impaired mortgage loans were as follows as of the dates indicated:



	December 31, 2018		December 31, 2017
Impaired loans without allowances for losses	$	4	$	4
Less: Allowances for losses on impaired loans	—		—
Impaired loans, net	$	4	$	4
Unpaid principal balance of impaired loans	$	5	$	6

As of December 31, 2018 and 2017, the Company did not have any impaired loans with allowances for losses.

There were no mortgage loans in the Company's portfolio in process of foreclosure as of December 31, 2018 and 2017.

There was one loan 60 days or less in arrears, with respect to principal and interest as of December 31, 2018, with a total amortized cost of $6. There were no loans in arrears, with respect to principal and interest as of December 31, 2017.

The following table presents information on the average investment during the period in impaired loans and interest income recognized on impaired and troubled debt restructured loans for the periods indicated:



	Year Ended December 31,
	2018		2017		2016
Impaired loans, average investment during the period (amortized cost)⁽¹⁾	$	4	$	4	$	8
Interest income recognized on impaired loans, on an accrual basis⁽¹⁾	—		—		—
Interest income recognized on impaired loans, on a cash basis⁽¹⁾	—		—		—
Interest income recognized on troubled debt restructured loans, on an accrual basis	—		—		—

⁽¹⁾ Includes amounts for Troubled debt restructured loans.

Loan-to-value ("LTV") and debt service coverage ("DSC") ratios are measures commonly used to assess the risk and quality of mortgage loans. The LTV ratio, calculated at time of origination, is expressed as a percentage of the amount of the loan relative to the value of the underlying property. A LTV ratio in excess of 100% indicates the unpaid loan amount exceeds the underlying collateral. The DSC ratio, based upon the most recently received financial statements, is expressed as a percentage of the amount of a property's net income to its debt service payments. A DSC ratio of less than 1.0 indicates that a property's operations do not generate sufficient income to cover debt payments. These ratios are utilized as part of the review process described above.

The following tables present the LTV and DSC ratios as of the dates indicated:



	Recorded Investment
	Debt Service Coverage Ratios
	> 1.5x		>1.25x - 1.5x		>1.0x - 1.25x		< 1.0x		Commercial mortgage loans secured by land or construction loans		Total		% of Total
December 31, 2018 ⁽¹⁾
Loan-to-Value Ratios:
0% - 50%	$	284	$	24	$	23	$	—	$	—	$	331	6.7	%
>50% - 60%	1,133		40		11		—		—		1,184		24.1	%
>60% - 70%	2,070		328		503		34		26		2,961		60.2	%
>70% - 80%	213		87		66		19		4		389		7.9	%
>80% and above	18		5		10		—		21		54		1.1	%
Total	$	3,718	$	484	$	613	$	53	$	51	$	4,919	100.0	%
⁽¹⁾ Balances do not include collective valuation allowance for losses.
	Recorded Investment
	Debt Service Coverage Ratios
	> 1.5x		>1.25x - 1.5x		>1.0x - 1.25x		< 1.0x		Commercial mortgage loans secured by land or construction loans		Total		% of Total
December 31, 2017 ⁽¹⁾
Loan-to-Value Ratios:
0% - 50%	$	297	$	30	$	—	$	14	$	—	$	341	6.9	%
>50% - 60%	1,205		25		21		—		5		1,256		25.7	%
>60% - 70%	2,241		228		534		39		—		3,042		61.9	%
>70% - 80%	154		57		45		—		6		262		5.3	%
>80% and above	5		—		—		1		4		10		0.2	%
Total	$	3,902	$	340	$	600	$	54	$	15	$	4,911	100.0	%

⁽¹⁾ Balances do not include collective valuation allowance for losses.

Properties collateralizing mortgage loans are geographically dispersed throughout the United States, as well as diversified by property type, as reflected in the following tables as of the dates indicated:



	December 31, 2018 ⁽¹⁾				December 31, 2017 ⁽¹⁾
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
Commercial Mortgage Loans by U.S. Region:
Pacific	$	994	20.2	%	$	985	20.1	%
South Atlantic	1,011		20.5	%	982		20.0	%
Middle Atlantic	1,039		21.2	%	1,097		22.4	%
West South Central	566		11.5	%	552		11.2	%
Mountain	458		9.3	%	457		9.3	%
East North Central	465		9.5	%	468		9.5	%
New England	75		1.5	%	77		1.6	%
West North Central	258		5.2	%	243		4.9	%
East South Central	53		1.1	%	50		1.0	%
Total Commercial mortgage loans	$	4,919	100.0	%	$	4,911	100.0	%

⁽¹⁾ Balances do not include collective valuation allowance for losses.



	December 31, 2018 ⁽¹⁾				December 31, 2017 ⁽¹⁾
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
Commercial Mortgage Loans by Property Type:
Retail	$	1,335	27.2	%	$	1,383	28.1	%
Industrial	1,323		26.9	%	1,326		27.0	%
Apartments	1,104		22.4	%	948		19.3	%
Office	791		16.1	%	829		16.9	%
Hotel/Motel	111		2.3	%	177		3.6	%
Mixed Use	46		0.9	%	52		1.1	%
Other	209		4.2	%	196		4.0	%
Total Commercial mortgage loans	$	4,919	100.0	%	$	4,911	100.0	%

⁽¹⁾ Balances do not include collective valuation allowance for losses.

The following table presents mortgages by year of origination as of the dates indicated:



	December 31, 2018 ⁽¹⁾		December 31, 2017 ⁽¹⁾
Year of Origination:
2018	$	375	$	—
2017	1,108		1,086
2016	906		867
2015	589		703
2014	490		538
2013	585		644
2012 and prior	866		1,073
Total Commercial mortgage loans	$	4,919	$	4,911

⁽¹⁾ Balances do not include collective valuation allowance for losses.

Evaluating Securities for Other-Than-Temporary Impairments

The Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, including fixed maturity securities, in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily impaired.

The following table identifies the Company's credit-related and intent-related impairments included in the Consolidated Statements of Operations, excluding impairments included in Other comprehensive income (loss) by type for the periods indicated:



	Year Ended December 31,
	2018				2017				2016
	Impairment			No. of Securities	Impairment			No. of Securities	Impairment		No. of Securities
U.S. corporate public securities	$	6		2	$	—	*	3	$	3	2
Foreign corporate public securities and foreign governments⁽¹⁾	2			3	2			3	12		3
Foreign corporate private securities⁽¹⁾	9			1	9			2	1		2
Residential mortgage-backed	3			58	1			17	3		25
Commercial mortgage-backed	—		*	1	—		*	1	—		—
Other asset-backed	—		*	1	—			—	—		—
Total	$	20		66	$	12		26	$	19	32
⁽¹⁾Primarily U.S. dollar denominated.

*Less than $1.

The above table includes $14, $12 and $1 of write-downs related to credit impairments for the years ended December 31, 2018, 2017 and 2016, respectively, in Other-than-temporary impairments, which are recognized in the Consolidated Statements of Operations. The remaining $6 and $18 in write-downs for the years ended December 31, 2018 and 2016, respectively, are related to intent impairments. There were immaterial write-downs related to intent impairments for the year ended December 31, 2017.

The following table summarizes these intent impairments, which are also recognized in earnings, by type for the periods indicated:



	Year Ended December 31,
	2018				2017				2016
	Impairment			No. of Securities	Impairment			No. of Securities	Impairment		No. of Securities
U.S. corporate public securities	$	5		2	$	—	*	3	$	4	1
Foreign corporate public securities and foreign governments⁽¹⁾	—			—	—			—	12		2
Residential mortgage-backed	1			22	—		*	6	2		4
Commercial mortgage-backed	—		*	1	—		*	1	—		—
Total	$	6	*	25	$	—	*	10	$	18	7
⁽¹⁾ Primarily U.S. dollar denominated.

*Less than $1.

The Company may sell securities during the period in which fair value has declined below amortized cost for fixed maturities. In certain situations, new factors, including changes in the business environment, can change the Company's previous intent to continue holding a security. Accordingly, these factors may lead the Company to record additional intent related capital losses.

The following table presents the amount of credit impairments on fixed maturities for which a portion of the OTTI loss was recognized in Other comprehensive income (loss) and the corresponding changes in such amounts for the periods indicated:



	Year Ended December 31,
	2018		2017		2016
Balance at January 1	$	16	$	9	$	19
Additional credit impairments:
On securities not previously impaired	—		9		—
On securities previously impaired	1		—		1
Reductions:
Securities intent impaired	12		—		—
Increase in cash flows	—		—		2
Securities sold, matured, prepaid or paid down	—		2		9
Balance at December 31	$	5	$	16	$	9

Net Investment Income

The following table summarizes Net investment income for the periods indicated:



	Year Ended December 31,
	2018		2017		2016
Fixed maturities	$	1,363	$	1,302	$	1,325
Equity securities	5		4		4
Mortgage loans on real estate	220		211		191
Policy loans	9		10		12
Short-term investments and cash equivalents	3		1		1
Other	95		60		30
Gross investment income	1,695		1,588		1,563
Less: investment expenses	72		68		62
Net investment income	$	1,623	$	1,520	$	1,501

As of December 31, 2018 and 2017, the Company had $1 and $3, respectively, of investments in fixed maturities that did not produce net investment income. Fixed maturities are moved to a non-accrual status when the investment defaults.

Interest income on fixed maturities is recorded when earned using an effective yield method, giving effect to amortization of premiums and accretion of discounts. Such interest income is recorded in Net investment income in the Consolidated Statements of Operations.

Net Realized Capital Gains (Losses)

Net realized capital gains (losses) comprise the difference between the amortized cost of investments and proceeds from sale and redemption, as well as losses incurred due to the credit-related and intent-related other-than-temporary impairment of investments. Realized investment gains and losses are also primarily generated from changes in fair value of embedded derivatives within products and fixed maturities, changes in fair value of fixed maturities recorded at FVO and changes in fair value including accruals on derivative instruments, except for effective cash flow hedges. Upon the adoption of ASU 2016-01 as of January 1, 2018, realized capital gains (losses) also include changes in fair value of equity securities. The cost of the investments on disposal is generally determined based on FIFO methodology.

Net realized capital gains (losses) were as follows for the periods indicated:



	Year Ended December 31,
	2018			2017			2016
Fixed maturities, available-for-sale, including securities pledged	$	(69	)	$	(29	)	$	(70	)
Fixed maturities, at fair value option	(227		)	(226		)	(201		)
Equity securities	(4		)	—			—
Derivatives	(36		)	9			51
Embedded derivatives - fixed maturities	(4		)	(5		)	(6		)
Guaranteed benefit derivatives	94			55			13
Other investments	4			(4		)	—
Net realized capital gains (losses)	$	(242	)	$	(200	)	$	(213	)

For the year ended December 31, 2018, the change in fair value of equity securities still held as of December 31, 2018 was $(4).

Proceeds from the sale of fixed maturities and equity securities, available-for-sale and the related gross realized gains and losses, before tax were as follows for the periods indicated:



	Year Ended December 31,
	2018		2017		2016
Proceeds on sales	$	2,498	$	2,916	$	1,825
Gross gains	14		30		20
Gross losses	50		39		85