CNA Financial Corporation provides the following information from its 2018 10-K report:

Investments

The Company classifies its fixed maturity securities as either available-for-sale or trading, and as such, they are carried at fair value. Changes in fair value of trading securities are reported within Net investment income on the Consolidated Statements of Operations. Changes in fair value related to available-for-sale securities are reported as a component of other comprehensive income. Losses may be recognized within Net realized investment gains (losses) on the Consolidated Statements of Operations when a decline in value is determined by the Company to be other-than-temporary.

a. At what amount is its investment portfolio reflected on its balance sheet? In your answer identify its fair value, cost, and any unrealized gains and losses.

b. How are its unrealized gains and/or losses reflected in CNA's balance sheet and income statement?

c. How are any impairment losses and the gains and losses realized from the sale of securities reflected in CNA's balance sheet and income statement?

Transcribed Image Text:

Cost or Gross Gross Estimated Amortized Unrealized Unrealized Cost Fair December 31, 2018 ($ millions) Gains Losses Value Fixed maturity securities available-for-sale: Corporate and other bonds..... States, municipali ties, and political subdivisions... $ 791 1,076 $18,764 $395 $19,160 9,681 10,748 Asset-backed: 4,815 2,200 Residential mortgage-backed. Commercial mortgage-backed Other asset-backed.. Total asset-backed. 68 57 4,826 28 32 2,196 1,975 11 24 1,962 8,990 107 113 8,984 U.S. Treasury and obligations of government- sponsored enterprises.. Foreign government.... Redeemable preferred stock. 156 3 159 480 481 10 10 1,982 Total fixed maturity securities available-for-sale... Total fixed maturity securities trading.... Total fixed maturity securities... ,. 38,081 521 39,542 4 4 $38,085 $1,982 $521 $39,546