AIG 2008 Annual Report Download - page 254

(d) Fair Value of Investment Securities:
The amortized cost or cost and fair value of AIG’s available for sale and held to maturity securities were
as follows:
Amortized
Cost or
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Amortized
Cost or
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2008 December 31, 2007
(In millions)
Available for sale(a):
U.S. government and
government sponsored
entities . . . . . . . . . . . . . . $ 4,433 $ 331 $ (59) $ 4,705 $ 7,956 $ 333 $ (37) $ 8,252
Obligations of states,
municipalities and political
subdivisions. . . . . . . . . . . 62,718 1,150 (2,611) 61,257 46,087 927 (160) 46,854
Non-U.S. governments . . . . . 62,176 6,560 (1,199) 67,537 67,023 3,920 (743) 70,200
Corporate debt(b) ........ 194,481 4,661 (13,523) 185,619 239,822 6,215 (4,518) 241,519
Mortgage-backed, asset-
backed and collateralized:
RMBS . . . . . . . . . . . . . . 32,092 645 (2,985) 29,752 89,851 433 (5,504) 84,780
CMBS . . . . . . . . . . . . . . 14,205 126 (3,105) 11,226 23,918 237 (1,156) 22,999
CDO/ABS . . . . . . . . . . . . 6,741 233 (843) 6,131 10,844 196 (593) 10,447
AIGFP(c) ............ 217 — — 217 16,369 355 (450) 16,274
Total Mortgage-backed,
asset-backed and
collateralized . . . . . . . . . . 53,255 1,004 (6,933) 47,326 140,982 1,221 (7,703) 134,500
Totalbonds .............. 377,063 13,706 (24,325) 366,444 501,870 12,616 (13,161) 501,325
Equity securities . . . . . . . . . . . 8,381 1,146 (719) 8,808 15,188 5,547 (463) 20,272
Total................... 385,444 14,852 (25,044) 375,252 517,058 18,163 (13,624) 521,597
Held to maturity(d): ........ $—$—$—$—$ 21,581 $ 609 $ (33) $ 22,157
(a) At December 31, 2007, included AIGFP available for sale securities with a fair value of $39.3 billion, for which
AIGFP elected the fair value option effective January 1, 2008, consisting primarily of corporate debt,
mortgage-backed, asset-backed and collateralized securities. At December 31, 2008, the fair value of these
securities was $26.1 billion. At December 31, 2008 and 2007, fixed maturities held by AIG that were below
investment grade or not rated totaled $19.4 billion and $27.0 billion, respectively. During the third quarter of
2008, AIG changed its intent to hold until maturity certain tax-exempt municipal securities held by its insurance
subsidiaries. As a result, all securities previously classified as held to maturity are now classified in the
available for sale category. See Note 1 to the Consolidated Financial Statements for additional information.
Fixed maturity securities reported on the balance sheet include $442 million of short-term investments included
in Securities lending invested collateral.
(b) Excluding AIGFP, corporate debt securities by industry categories were primarily in financial institutions and
utilities at 42 percent and 13 percent, respectively, at December 31, 2008 and 42 percent and 11 percent,
respectively, at December 31, 2007.
(c) The December 31, 2007 amounts represent total AIGFP investments in mortgage-backed, asset-backed and
collateralized securities for which AIGFP has elected the fair value option effective January 1, 2008. At
December 31, 2008, the fair value of these securities was $12.4 billion. The December 31, 2008 amounts
represent securities for which AIGFP has not elected the fair value option.
(d) Represents obligations of states, municipalities and political subdivisions. In 2008, AIG changed its intent to
hold such securities to maturity.
248 AIG 2008 Form 10-K
American International Group, Inc., and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)