A $1.2 billion increase in federal and foreign taxes and a $3.8 billion reduction in net realized capital losses
boosted total industry net income by $1.4 billion from the same prior-year period to $18.8 billion.
Q2 NII excludes 29c of realized capital losses
. NAV as of June 30, 2019 was $346.8M, or $13.45 per common share, which is 25c per common share lower than the company's NAV as of March 31, and $3.06 per common share lower than the company's NAV as of June 30, 2018.
Realized capital losses
reduced revenues by $894 million.
The industry reported a significant decline in statutory earnings and modest realized capital losses
that affected net income during the first quarter, despite an overall increase in revenue, the report said.
(the "Investment Adviser") are consistent with the investment advisory and management agreement between the Company and the Investment Adviser (the "Investment Management Agreement"), and are based only on actual Adjusted Realized Capital Gains computed net of all Adjusted Realized Capital Losses
and Adjusted Unrealized Capital Depreciation on a cumulative basis from inception through the end of each calendar year as if the entire portfolio was sold at fair value.
In the previous quarter, AIG reported larger-than-expected quarterly net loss of $1.5 per share, which it attributed to realized capital losses
and restructuring costs.
* Offsetting capital gains: A critical assumption is that the client will have realized gains to offset; realized capital losses
can only offset a small amount of ordinary income each year.
Industry members also had sizable pretax operating gains, net operating gains, realized capital losses
, unrealized capital gains, net operating gains and positive net income.
Whereas the deduction of net capital losses is set at a low level, realized capital losses
are fully deductible, provided that they are offset by realized capital gains each year.
"With the financial crisis and Great Recession fading into history, insurers' realized capital losses
on impaired investments dropped from $13.9 billion in nine-months 2009 to $3.2 billion in nine-months 2010 and $2.5 billion in both nine-months 2011 and nine-months 2012."
In any given tax year, realized capital losses
in excess of capital gains are deductible from ordinary income to noncorporate taxpayers up to $3,000.
By "selling" the tax-exempt bonds from its investment portfolio to trusts it owned, AIG's general insurance segment understated its reported realized capital losses
by as much as $205 million, or 61 percent.