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ITEM 8 / NOTE 7. INVESTMENTS.....................................................................................................................................................................................Securities Available for Sale in a Loss Position..............................................................................................................................................................................................The following table summarizes the fair value and gross unrealized losses on our available for salesecurities, aggregated by major investment category and length of time that individual securities have beenin a continuous unrealized loss position:Less than 12 Months 12 Months or More TotalGross Gross GrossFair Unrealized Fair Unrealized Fair Unrealized(in millions) Value Losses Value Losses Value LossesDecember 31, 2012Bonds available for sale:U.S. government and government sponsored entitiesObligations of states, municipalities and political subdivisionsNon-U.S. governmentsCorporate debtRMBSCMBSCDO/ABSTotal bonds available for saleEquity securities available for sale:Common stockPreferred stockMutual fundsTotal equity securities available for saleTotal$ 153 $ 1 $ – $ – $ 153 $ 1692 11 114 11 806 221,555 19 442 25 1,997 448,483 201 3,229 263 11,712 464597 28 1,661 289 2,258 317406 11 1,595 365 2,001 376391 1 1,510 171 1,901 17212,277 272 8,551 1,124 20,828 1,396247 36 18 1 265 37– – – – – –3 – – – 3 –250 36 18 1 268 37$ 12,527 $ 308 $ 8,569 $ 1,125 $ 21,096 $ 1,433December 31, 2011Bonds available for sale:U.S. government and government sponsored entities $ 142 $ 1 $ – $ – $ 142 $ 1Obligations of states, municipalities and political subdivisions 174 1 669 72 843 73Non-U.S. governments 3,992 67 424 35 4,416 102Corporate debt 18,099 937 5,907 788 24,006 1,725RMBS 10,624 714 4,148 849 14,772 1,563CMBS 1,697 185 1,724 788 3,421 973CDO/ABS 1,680 50 1,682 423 3,362 473Total bonds available for sale 36,408 1,955 14,554 2,955 50,962 4,910Equity securities available for sale:Common stock 608 100 – – 608 100Preferred stock 6 – – – 6 –Mutual funds 2 1 – – 2 1Total equity securities available for sale 616 101 – – 616 101Total $ 37,024 $ 2,056 $ 14,554 $ 2,955 $ 51,578 $ 5,011At December 31, 2012, we held 3,637 and 198 individual fixed maturity and equity securities, respectively, that werein an unrealized loss position, of which 1,385 individual fixed maturity securities were in a continuous unrealized lossposition for longer than 12 months. We did not recognize the unrealized losses in earnings on these fixed maturitysecurities at December 31, 2012, because we neither intend to sell the securities nor do we believe that it is morelikely than not that it will be required to sell these securities before recovery of their amortized cost basis.Furthermore, we expect to recover the entire amortized cost basis of these securities. In performing this evaluation,we considered the recovery periods for securities in previous periods of broad market declines. For fixed maturitysecurities with significant declines, we performed fundamental credit analysis on a security-by-security basis, whichincluded consideration of credit enhancements, expected defaults on underlying collateral, review of relevant industryanalyst reports and forecasts and other available market data...................................................................................................................................................................................................................................254 AIG 2012 Form 10-K