AIG 2013 Annual Report Download - page 132

The Securities Valuation Office (SVO) of the NAIC evaluates the investments of U.S. insurers for statutory reporting
purposes and assigns fixed maturity securities to one of six categories called ‘NAIC Designations.’ In general, NAIC
Designations of ‘1’ highest quality, or ‘2’ high quality, include fixed maturity securities considered investment grade,
while NAIC Designations of ‘3’ through ‘6’ generally include fixed maturity securities referred to as below investment
grade. The NAIC has adopted revised rating methodologies for certain structured securities, including non-agency
RMBS and CMBS, which are intended to enable a more precise assessment of the value of such structured
securities and increase the accuracy in assessing expected losses to better determine the appropriate capital
requirement for such structured securities. These methodologies result in an improved NAIC Designation for such
securities compared to the rating typically assigned by the three major rating agencies. The following tables
summarize the ratings distribution of our fixed maturity security portfolio by NAIC Designation, and the distribution by
composite AIG credit rating, which is generally based on ratings of the three major rating agencies. See
Investments — Credit Ratings herein for a full description of the composite AIG credit ratings.
The following table presents the fixed maturity security portfolio of AIG Life and Retirement categorized by
NAIC Designation, at fair value:
Investment grade:
1
2
Subtotal investment grade
Below investment grade:
3
4
5
6
Subtotal below investment grade
Total
*Excludes $449 million of fixed maturity securities for which no NAIC Designation is available because they are not held in legal entities within
AIG Life and Retirement that require a statutory filing.
The following table presents the fixed maturity security portfolio of AIG Life and Retirement categorized by
composite AIG credit rating, at fair value:
Investment grade:
AAA/AA/A
BBB
Subtotal investment grade
Below investment grade:
BB
B
CCC and Lower
Subtotal below investment grade
Total
*Excludes $449 million of fixed maturity securities for which no NAIC Designation is available because they are not held in legal entities within
AIG Life and Retirement that require a statutory filing.
NAIC Designations
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AIG 2013 Form 10-K114
ITEM 7 / RESULTS OF OPERATIONS / AIG LIFE AND RETIREMENT
Other Fixed Mortgage Backed,
December 31, 2013 Maturity Asset Backed and
(in millions) NAIC Designation Securities Collateralized Total*
$ 45,561 $ 38,812 $ 84,373
62,070 1,458 63,528
107,631 40,270 147,901
4,345 635 4,980
2,194 347 2,541
380 229 609
108 581 689
7,027 1,792 8,819
$ 114,658 $ 42,062 $ 156,720
Other Fixed Mortgage Backed,
December 31, 2013 Maturity Asset Backed and
(in millions) Composite AIG Credit Rating Securities Collateralized Total*
$ 45,490 $ 23,545 $ 69,035
62,479 3,068 65,547
107,969 26,613 134,582
4,120 1,879 5,999
2,075 1,848 3,923
494 11,722 12,216
6,689 15,449 22,138
$ 114,658 $ 42,062 $ 156,720
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