Investments

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

Fixed Maturities and Equity Securities

Available-for-sale and fair value option ("FVO") fixed maturities were as follows as of March 31, 2019:

	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Embedded Derivatives(2)		Fair Value		OTTI(3)(4)
Fixed maturities:
U.S. Treasuries	$	464	$	103	$	—	$	—	$	567	$	—
U.S. Government agencies and authorities	—		—		—		—		—		—
State, municipalities and political subdivisions	755		37		3		—		789		—
U.S. corporate public securities	7,511		516		55		—		7,972		—
U.S. corporate private securities	3,753		175		42		—		3,886		—
Foreign corporate public securities and foreign governments(1)	2,536		132		32		—		2,636		—
Foreign corporate private securities(1)	3,237		105		17		—		3,325		—
Residential mortgage-backed securities:
Agency	2,022		66		11		4		2,081		—
Non-Agency	1,123		43		7		5		1,164		3
Total Residential mortgage-backed securities	3,145		109		18		9		3,245		3
Commercial mortgage-backed securities	2,126		41		14		—		2,153		—
Other asset-backed securities	1,336		9		16		—		1,329		1
Total fixed maturities, including securities pledged	24,863		1,227		197		9		25,902		4
Less: Securities pledged	948		81		11		—		1,018		—
Total fixed maturities	$	23,915	$	1,146	$	186	$	9	$	24,884	$	4

⁽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 Condensed Consolidated Statements of Operations.

⁽³⁾ Represents Other-than-Temporary-Impairments ("OTTI") reported as a component of Other comprehensive income (loss).

⁽⁴⁾ Amount excludes $160 of net unrealized gains on impaired available-for-sale 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 Condensed 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.

The amortized cost and fair value of fixed maturities, including securities pledged, as of March 31, 2019, are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called or prepaid. Mortgage-backed securities ("MBS") and Other asset-backed securities ("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	$	563	$	568
After one year through five years	3,738		3,845
After five years through ten years	5,758		5,911
After ten years	8,197		8,851
Mortgage-backed securities	5,271		5,398
Other asset-backed securities	1,336		1,329
Fixed maturities, including securities pledged	$	24,863	$	25,902

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 March 31, 2019 and December 31, 2018, 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 Total 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
March 31, 2019
Communications	$	1,064	$	94	$	5	$	1,153
Financial	2,695		174		12		2,857
Industrial and other companies	7,404		327		54		7,677
Energy	1,808		116		42		1,882
Utilities	2,914		156		22		3,048
Transportation	810		42		6		846
Total	$	16,695	$	909	$	141	$	17,463
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

Fixed Maturities:

The Company has elected the FVO for certain of its fixed maturities to better match the measurement of assets and liabilities in the Condensed Consolidated Statements of Operations. Certain collateralized mortgage obligations ("CMOs"), primarily interest-only and principal-only strips, are accounted for as hybrid instruments and reported at fair value with changes in the fair value recorded in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.

The Company invests in various categories of Collateralized Mortgage Obligations ("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 March 31, 2019 and December 31, 2018, approximately 50.8% and 52.5%, 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 March 31, 2019 and December 31, 2018, the Company did not have any securities pledged in dollar rolls, repurchase agreement transactions or reverse repurchase agreements.

Securities Lending

As of March 31, 2019 and December 31, 2018, the fair value of loaned securities was $887 and $759, respectively, and is included in Securities pledged on the Condensed 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 March 31, 2019 and December 31, 2018, cash collateral retained by the lending agent and invested in short-term liquid assets on the Company's behalf was $811 and $719, respectively, and is recorded in Short-term investments under securities loan agreements, including collateral delivered on the Condensed Consolidated Balance Sheets. As of March 31, 2019 and December 31, 2018, liabilities to return collateral of $811 and $719, respectively, are included in Payables under securities loan agreements, including collateral held, on the Condensed 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 Condensed Consolidated Balance Sheets. This collateral generally consists of U.S. Treasury, U.S. Government agency securities and MBS pools. As of March 31, 2019 and December 31, 2018, the fair value of securities retained as collateral by the lending agent on the Company’s behalf was $106 and $67, respectively.

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

	March 31, 2019 (1)(2)		December 31, 2018 (1)(2)
U.S. Treasuries	$	118	$	92
U.S. corporate public securities	603		523
Foreign corporate public securities and foreign governments	196		170
Equity Securities	—		1
Payables under securities loan agreements	$	917	$	786

⁽¹⁾ As of March 31, 2019 and December 31, 2018, borrowings under securities lending transactions include cash collateral of $811 and $719, respectively.

⁽²⁾ As of March 31, 2019 and December 31, 2018, borrowings under securities lending transactions include non-cash collateral of $106 and $67, 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 ("VIEs")

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 $587 and $583 as of March 31, 2019 and December 31, 2018, respectively; these investments are included in Limited partnerships/corporations on the Condensed Consolidated Balance Sheets. Income and losses recognized on these investments are reported in Net investment income in the Condensed Consolidated Statements of Operations.

Securitizations

The Company invests in various tranches of securitization entities, including Residential mortgage-backed securities ("RMBS"), Commercial mortgage-backed securities ("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 does 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 Fair Value Measurements Note to these Condensed 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 capital gains (losses) in the Condensed 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 March 31, 2019:

	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	3		—		—		—		93		3		96		3
U.S. corporate public securities	132		3		283		6		883		46		1,298		55
U.S. corporate private securities	140		3		14		—		764		39		918		42
Foreign corporate public securities and foreign governments	67		1		85		3		495		28		647		32
Foreign corporate private securities	24		—		186		4		463		13		673		17
Residential mortgage-backed	313		4		45		—		463		14		821		18
Commercial mortgage-backed	237		2		79		1		355		11		671		14
Other asset-backed	318		4		389		9		95		3		802		16
Total	$	1,234	$	17	$	1,081	$	23	$	3,626	$	157	$	5,941	$	197

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

Of the unrealized capital losses aged more than twelve months, the average market value of the related fixed maturities was 95.9% and 92.2% of the average book value as of March 31, 2019 and December 31, 2018, 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%
March 31, 2019
Six months or less below amortized cost	$	1,405	$	22	$	34	$	5	277	10
More than six months and twelve months or less below amortized cost	1,108		—		24		—		218	6
More than twelve months below amortized cost	3,509		94		106		28		743	5
Total	$	6,022	$	116	$	164	$	33	1,238	21
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

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%
March 31, 2019
U.S. Treasuries	$	15	$	—	$	—	$	—	5	—
State, municipalities and political subdivisions	99		—		3		—		51	—
U.S. corporate public securities	1,328		25		46		9		286	3
U.S. corporate private securities	894		66		24		18		105	2
Foreign corporate public securities and foreign governments	656		23		26		6		132	6
Foreign corporate private securities	690		—		17		—		64	—
Residential mortgage-backed	837		2		18		—		250	10
Commercial mortgage-backed	685		—		14		—		129	—
Other asset-backed	818		—		16		—		216	—
Total	$	6,022	$	116	$	164	$	33	1,238	21
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

Investments with fair values less than amortized cost are included in the Company's other-than-temporary impairments 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 March 31, 2019, 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 cost basis of $74 and post-modification carrying value of $57. As of December 31, 2018, the Company did not have any new commercial mortgage loan or private placement troubled debt restructuring.

As of March 31, 2019 and December 31, 2018, 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:

	March 31, 2019								December 31, 2018
	Impaired		Non Impaired			Total			Impaired		Non Impaired			Total
Commercial mortgage loans	$	8	$	4,804		$	4,812		$	4	$	4,915		$	4,919
Collective valuation allowance for losses	N/A		(1		)	(1		)	N/A		(1		)	(1		)
Total net commercial mortgage loans	$	8	$	4,803		$	4,811		$	4	$	4,914		$	4,918
N/A- Not Applicable

There was one impairment of $2 on the mortgage loan portfolio for the three months ended March 31, 2019. There were no impairments on the mortgage loan portfolio for the three months ended March 31, 2018.

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

	March 31, 2019		December 31, 2018
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:

	March 31, 2019		December 31, 2018
Impaired loans without allowances for losses	$	8	$	4
Less: Allowances for losses on impaired loans	—		—
Impaired loans, net	$	8	$	4
Unpaid principal balance of impaired loans	$	12	$	5

As of March 31, 2019 and December 31, 2018 the Company did not have any impaired loans with allowances for losses.

As of March 31, 2019, the Company had one loan greater than 60 days in arrears, which is also in non-accrual status and in process of foreclosure, with an amortized cost of $4. There were no loans greater than 60 days in arrears and no mortgage loans in the Company's portfolio in process of foreclosure as of December 31, 2018.

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:

	Three Months Ended March 31,
	2019		2018
Impaired loans, average investment during the period (amortized cost)(1)	$	6	$	4
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
March 31, 2019 (1)
Loan-to-Value Ratios:
0% - 50%	$	273	$	24	$	23	$	—	$	—	$	320	6.6	%
>50% - 60%	1,107		19		24		4		—		1,154		24.0	%
>60% - 70%	1,912		345		441		129		31		2,858		59.4	%
>70% - 80%	181		153		49		34		6		423		8.8	%
>80% and above	5		21		10		—		21		57		1.2	%
Total	$	3,478	$	562	$	547	$	167	$	58	$	4,812	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, 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.

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:

	March 31, 2019				December 31, 2018
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
Commercial Mortgage Loans by U.S. Region:
Pacific	$	1,003	20.8	%	$	994	20.2	%
South Atlantic	943		19.6	%	1,011		20.5	%
Middle Atlantic	1,033		21.5	%	1,039		21.2	%
West South Central	563		11.7	%	566		11.5	%
Mountain	459		9.5	%	458		9.3	%
East North Central	436		9.1	%	465		9.5	%
New England	90		1.9	%	75		1.5	%
West North Central	231		4.8	%	258		5.2	%
East South Central	54		1.1	%	53		1.1	%
Total Commercial mortgage loans	$	4,812	100.0	%	$	4,919	100.0	%

	March 31, 2019				December 31, 2018
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
Commercial Mortgage Loans by Property Type:
Retail	$	1,308	27.2	%	$	1,335	27.2	%
Industrial	1,299		27.0	%	1,323		26.9	%
Apartments	1,088		22.6	%	1,104		22.4	%
Office	747		15.5	%	791		16.1	%
Hotel/Motel	118		2.5	%	111		2.3	%
Mixed Use	45		0.9	%	46		0.9	%
Other	207		4.3	%	209		4.2	%
Total Commercial mortgage loans	$	4,812	100.0	%	$	4,919	100.0	%

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

	March 31, 2019 (1)		December 31, 2018 (1)
Year of Origination:
2019	$	97	$	—
2018	377		375
2017	1,066		1,108
2016	849		906
2015	586		589
2014	479		490
2013 and prior	1,358		1,451
Total Commercial mortgage loans	$	4,812	$	4,919

⁽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 Condensed Consolidated Statements of Operations, excluding impairments included in Other comprehensive income (loss) by type for the periods indicated:

	Three Months Ended March 31,
	2019				2018
	Impairment			No. of Securities	Impairment			No. of Securities
Foreign corporate private securities(1)	$	18		3	$	9		1
Residential mortgage-backed	—		*	10	—		*	6
Other asset-backed	—		*	2	—			—
Total	$	18		15	$	9		7
(1) Primarily U.S. dollar denominated.
*Less than $1.

The above table includes $18 and $9 of write-downs related to credit impairments for the three months ended March 31, 2019 and March 31, 2018, respectively, in other-than-temporary impairments, which are recognized in the Condensed Consolidated Statements of Operations. The remaining write-downs for the three months ended March 31, 2019 and March 31, 2018 related to intent impairments are immaterial.

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:

	Three Months Ended March 31,
	2019		2018
Balance at January 1	$	5	$	16
Additional credit impairments:
On securities previously impaired	—		—
Reductions:
Increase in cash flows	—		—
Securities sold, matured, prepaid or paid down	—		10
Balance at March 31	$	5	$	6

Net Investment Income

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

	Three Months Ended March 31,
	2019		2018
Fixed maturities	$	352	$	323
Equity securities	2		1
Mortgage loans on real estate	54		53
Policy loans	2		2
Short-term investments and cash equivalents	1		1
Other	1		19
Gross investment income	412		399
Less: Investment expenses	18		17
Net investment income	$	394	$	382

As of March 31, 2019 and December 31, 2018, the Company had $1 and $1, 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 Condensed 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 includes changes in fair value of equity securities.The cost of the investments on disposal is generally determined based on first-in-first-out ("FIFO") methodology.

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

	Three Months Ended March 31,
	2019			2018
Fixed maturities, available-for-sale, including securities pledged	$	(16	)	$	(14	)
Fixed maturities, at fair value option	24			(99		)
Equity securities	1			(2		)
Derivatives	(32		)	5
Embedded derivatives - fixed maturities	1			(2		)
Guaranteed benefit derivatives	—			20
Other investments	(2		)	5
Net realized capital gains (losses)	$	(24	)	$	(87	)

For the three months ended March 31, 2019 and 2018, the change in fair value of equity securities still held as of March 31, 2019 and 2018 was $1 and $(2), respectively.

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

	Three Months Ended March 31,
	2019		2018
Proceeds on sales	$	1,223	$	660
Gross gains	12		4
Gross losses	11		7