AIG 2015 Annual Report Download - page 288

ITEM 8 / NOTE 9. VARIABLE INTEREST ENTITIES
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288
December 31, 2014
Assets:
Bonds available for sale $ - $ 11,459 $ - $ - $ 35 $ 11,494
Other bond securities - 7,251 615 - 40 7,906
Mortgage and other loans receivable - 2,398 - - 162 2,560
Other invested assets 577 651 - 1,684 29 2,941
Other(a) 40 1,447 140 49 76 1,752
Total assets(b) $ 617 $ 23,206 $ 755 $ 1,733 $ 342 $ 26,653
Liabilities:
Long-term debt $ 69 $ 1,370 $ 52 $ 199 $ 7 $ 1,697
Other(c) 32 276 - 101 37 446
Total liabilities $ 101 $ 1,646 $ 52 $ 300 $ 44 $ 2,143
(a) Comprised primarily of Short-term investments, Premiums and other receivables or Other assets at December 31, 2015 and 2014.
(b) The assets of each VIE can be used only to settle specific obligations of that VIE.
(c) Comprised primarily of Other liabilities and Derivative liabilities, at fair value, at both December 31, 2015 and 2014.
(d) At December 31, 2015 and 2014, off-balance sheet exposure primarily consisting of commitments to real estate and investment entities was $131.2 million
and $56.4 million, respectively.
(e) Includes the effect of consolidating previously unconsolidated partnerships.
We calculate our maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional
amount of VIE assets or liabilities where we have also provided credit protection to the VIE with the VIE as the referenced
obligation, and (iii) other commitments and guarantees to the VIE. Interest holders in VIEs sponsored by us generally have
recourse only to the assets and cash flows of the VIEs and do not have recourse to us, except in limited circumstances when
we have provided a guarantee to the VIE’s interest holders.
The following table presents total assets of unconsolidated VIEs in which we hold a variable interest, as well as our
maximum exposure to loss associated with these VIEs:
Maximum Exposure to Loss
Total VIE On-Balance Off-Balance
(in millions) Assets Sheet(a) Sheet Total
December 31, 2015
Real estate and investment entities $21,951 $3,072 $ 398 $3,470
Affordable housing partnerships 5,255 774 -774
Other 1,110 215 1,000 1,215
Tot al $28,316 $4,061 $ 1,398 $5,459
December 31, 2014
Real estate and investment entities $ 19,949 $ 2,785 $ 454 $ 3,239
Affordable housing partnerships 7,911 425 - 425
Other(c) 1,959 304 992 (b) 1,296
Total $ 29,819 $ 3,514 $ 1,446 $ 4,960
(a) At December 31, 2015 and 2014, $3.8 billion and $3.2 billion, respectively, of our total unconsolidated VIE assets were recorded as Other invested assets.
(b) These amounts represent our estimate of the maximum exposure to loss under certain insurance policies issued to VIEs if a hypothetical loss occurred to the
extent of the full amount of the insured value. Our insurance policies cover defined risks and our estimate of liability is included in our insurance reserves on the
balance sheet.
(c) The On-Balance and Off-Balance sheet amounts have been revised from $32 million and $0 to $304 million and $992 million, respectively, to correct the
Maximum Exposure to Loss as of December 31, 2014, which are not considered material to previously issued financial statements.
Real Estate and Investment Entities
Through our insurance operations and AIG Global Real Estate, we are an investor in various real estate investment entities,
some of which are VIEs. These investments are typically with unaffiliated third-party developers via a partnership or limited
liability company structure. The VIEs’ activities consist of the development or redevelopment of commercial, industrial and