Investments

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

Fixed Maturities

Available-for-sale and FVO fixed maturities were as follows as of December 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	$	565	$	129	$	3	$	—	$	691	$	—
U.S. Government agencies and authorities	19		—		—		—		19		—
State, municipalities and political subdivisions	747		68		—		—		815		—
U.S. corporate public securities	7,103		941		13		—		8,031		—
U.S. corporate private securities	3,776		306		16		—		4,066		—
Foreign corporate public securities and foreign governments(1)	2,417		265		3		—		2,679		—
Foreign corporate private securities(1)	3,171		205		1		—		3,375		—
Residential mortgage-backed securities	3,685		125		11		11		3,810		2
Commercial mortgage-backed securities	2,381		122		3		—		2,500		—
Other asset-backed securities	1,472		15		13		—		1,474		1
Total fixed maturities, including securities pledged	25,336		2,176		63		11		27,460		3
Less: Securities pledged	749		85		6		—		828		—
Total fixed maturities	$	24,587	$	2,091	$	57	$	11	$	26,632	$	3

⁽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 $194 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	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.

The amortized cost and fair value of fixed maturities, including securities pledged, as of December 31, 2019, 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	$	607	$	615
After one year through five years	3,564		3,728
After five years through ten years	5,672		6,108
After ten years	7,955		9,225
Mortgage-backed securities	6,066		6,310
Other asset-backed securities	1,472		1,474
Fixed maturities, including securities pledged	$	25,336	$	27,460

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, 2019 and 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 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, 2019
Communications	$	1,002	$	156	$	—	$	1,158
Financial	2,650		302		—		2,952
Industrial and other companies	7,053		667		11		7,709
Energy	1,675		185		18		1,842
Utilities	2,913		294		1		3,206
Transportation	856		78		2		932
Total	$	16,149	$	1,682	$	32	$	17,799
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

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, 2019 and 2018, approximately 48.4% 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 December 31, 2019 and 2018, the Company did not have any securities pledged in dollar rolls, repurchase agreement transactions or reverse repurchase agreements.

Securities Lending

As of December 31, 2019 and 2018, the fair value of loaned securities was $715 and $759, 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, 2019 and 2018, cash collateral retained by the lending agent and invested in short-term liquid assets on the Company's behalf was $650 and $719, respectively, and is recorded in Short-term investments under securities loan agreements, including collateral delivered on the Consolidated Balance Sheets. As of December 31, 2019 and 2018, liabilities to return collateral of $650 and $719, 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, 2019 and 2018, the fair value of securities retained as collateral by the lending agent on the Company’s behalf was $91 and $67, respectively.

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

	December 31, 2019(1)(2)		December 31, 2018(1)(2)
U.S. Treasuries	$	109	$	92
U.S. corporate public securities	447		523
Foreign corporate public securities and foreign governments	185		170
Equity Securities	—		1
Payables under securities loan agreements	$	741	$	786

⁽¹⁾ As of December 31, 2019 and December 31, 2018, borrowings under securities lending transactions include cash collateral of $650 and $719, respectively.

⁽²⁾ As of December 31, 2019 and December 31, 2018, borrowings under securities lending transactions include non-cash collateral of $91 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

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 $738 and $583 as of December 31, 2019 and 2018, 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, 2019:

	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
U.S. Treasuries	$	68	$	3		$	12	$	—	*	$	80	$	3
U.S. Government, agencies and authorities	18		—		*	—		—			18		—		*
State, municipalities and political subdivisions	21		—		*	—		—			21		—		*
U.S. corporate public securities	97		3			131		10			228		13
U.S. corporate private securities	75		—		*	134		16			209		16
Foreign corporate public securities and foreign governments	6		—		*	53		3			59		3
Foreign corporate private securities	21		—		*	56		1			77		1
Residential mortgage-backed	535		6			139		5			674		11
Commercial mortgage-backed	331		3			18		—		*	349		3
Other asset-backed	217		2			500		11			717		13
Total	$	1,389	$	17		$	1,043	$	46		$	2,432	$	63
Total number of securities in an unrealized loss position	289					278					567
*Less than $1.

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:

	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
U.S. Treasuries	$	—	$	—	$	15	$	—	$	15	$	—	*
State, municipalities and political subdivisions	191		3		88		5		279		8
U.S. corporate public securities	3,060		131		535		50		3,595		181
U.S. corporate private securities	1,502		40		579		66		2,081		106
Foreign corporate public securities and foreign governments	1,159		54		169		26		1,328		80
Foreign corporate private securities	1,504		77		221		20		1,725		97
Residential mortgage-backed	560		11		412		21		972		32
Commercial mortgage-backed	865		16		312		12		1,177		28
Other asset-backed	892		27		61		1		953		28
Total	$	9,733	$	359	$	2,392	$	201	$	12,125	$	560
Total number of securities in an unrealized loss position	1,894				550				2,444
*Less than $1.

Based on the Company's quarterly evaluation of its securities in a unrealized loss position, described below, the Company concluded that these securities were not other-than-temporarily impaired as of December 31, 2019. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases.

On a quarterly basis, the Company evaluates its available-for-sale investment portfolio to determine whether there has been an other-than-temporary decline in fair value below the amortized cost basis. All available-for-sale securities with fair values less than amortized cost are included in the Company’s evaluation. Generally, for non-structured securities, management considers the estimated fair value as the recovery value when available information does not indicate that another value is more appropriate. When information is identified that indicates a recovery value other than estimated fair value, management considers in the determination of recovery value the same consideration utilized in its overall impairment evaluation process, which incorporates available information and the Company’s best estimate of scenario based outcomes regarding the specific security and issuer. The Company also considers quality and amount of any credit enhancement; the security's position within the capital structure of the issuer; fundamentals of the industry and geographic area in which the security issuer operates; and the overall macroeconomic conditions. For structured securities, such as non-agency RMBS, CMBS, and ABS, the Company evaluates other-than-temporary impairments based on actual and projected cash flows, after considering the quality and updated loan-to-value ratios, reflecting current home prices of the underlying collateral, forecasted loss severity, the payment priority in the tranche and any credit enhancement within the structure. In assessing credit impairment, the Company performs discounted cash flow analysis comparing the current amortized cost of a security to the present value of the expected future cash flows, including estimated defaults, and prepayments. The discount rate is generally the effective interest rate of the fixed maturity prior to the impairment.

See the Business, Basis of Presentation and Significant Accounting Policies Note for the policy used to evaluate whether the investments are other-than-temporarily impaired.

Gross unrealized capital losses on fixed maturities, including securities pledged, decreased $497 from $560 to $63 for the year ended December 31, 2019. The decrease in gross unrealized capital losses was primarily due to declining interest rates and tightening credit spreads.

At December 31, 2019, $7 of the total $63 of gross unrealized losses were from 5 available-for-sale fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for 12 months or greater.

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 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,
	2019				2018				2017
	Impairment			No. of Securities	Impairment			No. of Securities	Impairment			No. of Securities
State municipalities, and political subdivisions	$	—	*	6	$	—		—	$	—		—
U.S. corporate public securities	11			25	6			2	—		*	3
U.S. corporate private securities	1			16	—			—	—			—
Foreign corporate public securities and foreign governments(1)	3			15	2			3	2			3
Foreign corporate private securities(1)	18			11	9			1	9			2
Residential mortgage-backed	4			71	3			58	1			17
Commercial mortgage-backed	—		*	18	—		*	1	—		*	1
Other asset-backed	3			73	—		*	1	—			—
Total	$	40		235	$	20		66	$	12		26
Credit Impairments	$	20			$	14			$	12
Intent Impairments	$	20			$	6			$	—
(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,
	2019		2018		2017
Balance at January 1	$	5	$	16	$	9
Additional credit impairments:
On securities not previously impaired	—		—		9
On securities previously impaired	—		1		—
Reductions:
Securities intent impaired	—		12		—
Increase in cash flows	—		—		—
Securities sold, matured, prepaid or paid down	1		—		2
Balance at December 31	$	4	$	5	$	16

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. For the year ended December 31, 2019, the Company had one new commercial mortgage loan troubled debt restructuring with a pre-modification carrying value of $2 and post-modification carrying value of $1. For year ended December 31, 2019, the Company had one new private placement troubled debt restructuring with a pre-modification cost basis of $74 and post-modification carrying value of $38. As of December 31, 2018, the Company did not have any new commercial mortgage loan troubled debt restructuring and had no private placement troubled debt restructuring.

As of December 31, 2019 and 2018, the Company did not have any private placements modified in a troubled debt restructuring with a subsequent payment default. As of December 31, 2019, the company had one commercial mortgage loan modified in a troubled debt restructuring with a subsequent payment default. As of December 31, 2018, the Company did not have any commercial mortgage loans 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, 2019						December 31, 2018
	Impaired		Non Impaired		Total		Impaired		Non Impaired			Total
Commercial mortgage loans	$	4	$	4,660	$	4,664	$	4	$	4,915		$	4,919
Collective valuation allowance for losses	—		—		—		N/A		(1		)	(1		)
Total net commercial mortgage loans	$	4	$	4,660	$	4,664	$	4	$	4,914		$	4,918

N/A - Not Applicable

There were two impairments taken of $3 on the mortgage loan portfolio for the year ended December 31, 2019. There were no impairments taken on the mortgage loan portfolio for the year ended December 31, 2018.

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

	December 31, 2019			December 31, 2018
Collective valuation allowance for losses, balance at January 1	$	1		$	1
Addition to (reduction of) allowance for losses	(1		)	—
Collective valuation allowance for losses, end of period	$	—		$	1

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

	December 31, 2019		December 31, 2018
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	$	5

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

Commercial loans are placed on non-accrual status when 90 days in arrears if the Company has concerns regarding the collectability of future payments, or if a loan has matured without being paid off or extended.

As of December 31, 2019 and 2018, the Company had no loan greater than 60 days in arrears and there were no mortgage loans in the Company's portfolio in process of foreclosure. The Company foreclosed on two loans during the year ended December 31, 2019 with a carrying value of $6.

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,
	2019		2018		2017
Impaired loans, average investment during the period (amortized cost)(1)	$	9	$	4	$	4
Interest income recognized on impaired loans, on an accrual basis(1)	1		—		—
Interest income recognized on impaired loans, on a cash basis(1)	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, 2019 (1)
Loan-to-Value Ratios:
0% - 50%	$	359	$	12	$	9	$	—	$	—	$	380	8.1	%
>50% - 60%	1,090		45		10		28		—		1,173		25.2	%
>60% - 70%	1,774		432		253		93		—		2,552		54.7	%
>70% - 80%	282		84		74		69		—		509		10.9	%
>80% and above	30		14		—		6		—		50		1.1	%
Total	$	3,535	$	587	$	346	$	196	$	—	$	4,664	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:

	December 31, 2019				December 31, 2018
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
Commercial Mortgage Loans by U.S. Region:
Pacific	$	944	20.2	%	$	994	20.2	%
South Atlantic	966		20.7	%	1,011		20.5	%
Middle Atlantic	1,019		21.9	%	1,039		21.2	%
West South Central	537		11.5	%	566		11.5	%
Mountain	442		9.5	%	458		9.3	%
East North Central	383		8.2	%	465		9.5	%
New England	84		1.8	%	75		1.5	%
West North Central	212		4.5	%	258		5.2	%
East South Central	77		1.7	%	53		1.1	%
Total Commercial mortgage loans	$	4,664	100.0	%	$	4,919	100.0	%

 

	December 31, 2019				December 31, 2018
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
Commercial Mortgage Loans by Property Type:
Retail	$	1,198	25.7	%	$	1,335	27.2	%
Industrial	1,216		26.2	%	1,323		26.9	%
Apartments	1,185		25.4	%	1,104		22.4	%
Office	697		14.9	%	791		16.1	%
Hotel/Motel	127		2.7	%	111		2.3	%
Mixed Use	44		0.9	%	46		0.9	%
Other	197		4.2	%	209		4.2	%
Total Commercial mortgage loans	$	4,664	100.0	%	$	4,919	100.0	%

Net Investment Income

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

	Year Ended December 31,
	2019		2018		2017
Fixed maturities	$	1,432	$	1,363	$	1,302
Equity securities	6		5		4
Mortgage loans on real estate	224		220		211
Policy loans	7		9		10
Short-term investments and cash equivalents	3		3		1
Other	91		95		60
Gross investment income	1,763		1,695		1,588
Less: investment expenses	74		72		68
Net investment income	$	1,689	$	1,623	$	1,520

As of December 31, 2019 and 2018, the Company had $0 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 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. Net 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 first-in-first-out ("FIFO") methodology.

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

	Year Ended December 31,
	2019			2018			2017
Fixed maturities, available-for-sale, including securities pledged	$	11		$	(69	)	$	(29	)
Fixed maturities, at fair value option	(47		)	(227		)	(226		)
Equity securities	(16		)	(4		)	—
Derivatives	(82		)	(36		)	9
Embedded derivatives - fixed maturities	2			(4		)	(5		)
Guaranteed benefit derivatives	(11		)	94			55
Other investments	(1		)	4			(4		)
Net realized capital gains (losses)	$	(144	)	$	(242	)	$	(200	)

For the years ended December 31, 2019 and 2018, the change in fair value of equity securities still held as of December 31, 2019 and 2018 was $(16) and $(4), 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:

	Year Ended December 31,
	2019		2018		2017
Proceeds on sales	$	2,418	$	2,498	$	2,916
Gross gains	30		14		30
Gross losses	25		50		39