The same day (December 5) AIG tells the federal government (in a regulatory filing) that its auditor has found a «material weakness» in its valuation of the swaps and expands its prior disclosures of
unrealized losses almost 6 billion dollars through November of 2007.
Most insurers invest entirely in fixed income, so investors
almost always look at returns based on net income excluding changes in comprehensive income (where the impact of the equity portfolio shows up) over equity ecxluding AOCI (
unrealized gains /
losses).