Travelers 2010 Annual Report Download - page 196

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. INVESTMENTS (Continued)
In the second quarter of 2009, the Company adopted updated accounting guidance that changed
the reporting of other-than-temporary impairments (OTTI). As a result, the credit component of OTTI
on fixed maturities was reported separately effective April 1, 2009, the date of adoption.
The following tables present a roll-forward of the credit component of OTTI on fixed maturities
recognized in the consolidated statement of income for which a portion of the OTTI was recognized in
accumulated other changes in equity from nonowner sources for the year ended December 31, 2010
and the period April 1, 2009 through December 31, 2009:
Cumulative
OTTI Credit Additions for Additions for Cumulative
Losses OTTI Securities OTTI Securities Reductions Adjustments to OTTI Credit
Recognized for Where No Where Credit Due to Book Value of Losses
Securities Credit Losses Losses Have Sales/Defaults Credit-Impaired Recognized for
Held, Were Been of Credit- Securities due Securities Still
Year ended December 31, 2010 Beginning of Previously Previously Impaired to Changes Held, End of
(in millions) Period Recognized Recognized Securities in Cash Flows Period
Fixed maturities
Mortgage-backed securities, collateralized
mortgage obligations and pass-through
securities ..................... $ 46 $— $ 4 $ (3) $— $ 47
All other corporate bonds ............. 93 — 5 (13) 3 88
Total fixed maturities .............. $139 $— $ 9 $(16) $ 3 $135
Cumulative Additions for
OTTI Credit Additions for OTTI Adjustments Cumulative
Losses OTTI Securities Securities Reductions to Book Value OTTI Credit
Recognized for Where No Where Credit Due to of Credit- Losses
Securities Credit Losses Losses Have Sales/Defaults Impaired Recognized for
April 1, 2009 through Held, Were Been of Credit- Securities due Securities Still
December 31, 2009 Beginning of Previously Previously Impaired to Changes in Held, End of
(in millions) Period Recognized Recognized Securities Cash Flows Period
Fixed maturities
Mortgage-backed securities, collateralized
mortgage obligations and pass-through
securities ..................... $ 13 $17 $13 $ — $ 3 $ 46
All other corporate bonds ............. 82 9 14 (14) 2 93
Total fixed maturities .............. $ 95 $26 $27 $(14) $ 5 $139
184