Travelers 2015 Annual Report Download - page 244

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. CONTINGENCIES, COMMITMENTS AND GUARANTEES (Continued)
Other Commitments and Guarantees
Commitments
Investment Commitments—The Company has unfunded commitments to private equity limited
partnerships and real estate partnerships in which it invests. These commitments totaled $1.71 billion
and $1.63 billion at December 31, 2015 and 2014, respectively.
Guarantees
In the ordinary course of selling businesses to third parties, the Company has agreed to indemnify
purchasers for losses arising out of breaches of representations and warranties with respect to the
businesses being sold, covenants and obligations of the Company and/or its subsidiaries and, in certain
cases, obligations arising from certain liabilities and the imposition of additional taxes due to either a
change in the tax law or an adverse interpretation of the tax law. Such indemnification provisions
generally are applicable from the closing date to the expiration of the relevant statutes of limitations,
although, in some cases, there may be agreed upon term limitations or no term limitations. Certain of
these contingent obligations are subject to deductibles which have to be incurred by the obligee before
the Company is obligated to make payments. The maximum amount of the Company’s contingent
obligation for indemnifications related to the sale of businesses that are quantifiable was $391 million
at December 31, 2015, of which $2 million was recognized on the balance sheet at that date.
The Company also has contingent obligations for guarantees related to certain investments, third-
party loans related to certain investments, certain insurance policy obligations of former insurance
subsidiaries and various other indemnifications. The Company also provides standard indemnifications
to service providers in the normal course of business. The indemnification clauses are often standard
contractual terms. The maximum amount of the Company’s obligation for guarantees of certain
investments and third-party loans related to certain investments that are quantifiable was $150 million
at December 31, 2015, approximately $75 million of which is indemnified by a third party. The
maximum amount of the Company’s obligation related to the guarantee of certain insurance policy
obligations of a former insurance subsidiary was $480 million at December 31, 2015, all of which is
indemnified by a third party.
Certain of the guarantees and indemnifications described above have no stated or notional
amounts or limitation to the maximum potential future payments, and, accordingly, the Company is
unable to develop an estimate of the maximum potential payments for such arrangements.
17. NONCASH INVESTING AND FINANCING ACTIVITIES
There were no material noncash financing or investing activities during the years ended
December 31, 2015, 2014 and 2013.
18. CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND
SUBSIDIARIES
The following consolidating financial statements of the Company have been prepared pursuant to
Rule 3-10 of Regulation S-X. These consolidating financial statements have been prepared from the
Company’s financial information on the same basis of accounting as the consolidated financial
statements. The Travelers Companies, Inc. (excluding its subsidiaries, TRV) has fully and
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