Management’s Discussion and Analysis of Financial Condition and Results of Operations–(Continued) The Allstate Financial investment portfolio decreased to $61.50 billion at December 31, 2008, from $74.25 billion at December 31, 2007, due to unrealized net capital losses, net reductions in contractholder funds, net realized capital losses, and lower funds associated with collateral received in conjunction with securities lending, partially offset by capital contributions from AIC.
The Corporate and Other investment portfolio decreased to $3.66 billion at December 31, 2008, from $3.82 billion at December 31, 2007, primarily due to cash flows used in financing activities and a $1.00 billion capital contribution to AIC.
Total investments at amortized cost related to collateral received in connection with securities lending business activities and collateral posted by counterparties related to derivative transactions decreased to $340 million at December 31, 2008, from $3.46 billion at December 31, 2007.
As of December 31, 2008, these investments are included as a component of short-term investments.
At December 31, 2007, these investments were carried at fair value and $2.85 billion were classified in fixed income securities and $549 million were classified in short-term investments.
Securities lending activities are primarily used as an investment yield enhancement, and are conducted with third parties such as brokerage firms.
We obtain collateral, typically in the form of cash, in an amount generally equal to 102% to 105% of the fair value of domestic and foreign securities, respectively, and monitor the market value of the securities loaned on a daily basis with additional collateral obtained as necessary.
The cash we receive is invested in short-term and fixed income investments, and an offsetting liability to return the collateral is recorded in other liabilities and accrued expenses.
We obtain fair values of our fixed income and equity securities and exchange traded and non-exchange traded derivative contracts from several sources and methods.
For a discussion of these sources and methods, see the Application of Critical Accounting Estimates section of the MD&A.
We may utilize derivative financial instruments to help manage the exposure to interest rate risk, and to a lesser extent currency and credit risks, from the fixed income securities portfolio as well as exposure to equity price risk from the equity securities portfolio.
For a more detailed discussion of interest rate, currency, credit and equity price risks and our use of derivative financial instruments, see the Net realized capital gains and losses and Market Risk sections of the MD&A and Note 6 of the consolidated financial statements.
Fixed income securities See Note 5 of the consolidated financial statements for a table showing the amortized cost, unrealized gains, unrealized losses and fair value for each type of fixed income security for the years ended December 31, 2008 and 2007.
The following table shows fixed income securities by type.
## Table 0 ##
At December 31, 2008, 95.2% of the consolidated fixed income securities portfolio was rated investment grade, which is defined as a security having a rating from the NAIC of 1 or 2; a rating of Aaa, Aa, A or Baa from Moody’s, a rating of AAA, AA, A or BBB from S&P’s, Fitch or Dominion or a rating of aaa, aa, a, or bbb from
Management’s Discussion and Analysis of Financial Condition and Results of Operations–(Continued) Financial Ratings and Strength The following table summarizes our debt, commercial paper and insurance financial strength ratings.
## Table 1 ##
Our ratings are influenced by many factors including our operating and financial performance, asset quality, liquidity, asset/liability management, overall portfolio mix, financial leverage (i. e. , debt), exposure to risks such as catastrophes and the current level of operating leverage.
On February 2, 2009, A. M.  Best affirmed The Allstate Corporation’s debt rating of a- as well as the A+ financial strength ratings of AIC and ALIC.
A. M.  Best also affirmed the commercial paper rating of AMB-1.
The outlook for all ratings remained stable.
In October 2008, A. M.  Best had downgraded The Allstate Corporation’s debt rating to a- from a.
On January 29, 2009, S&P downgraded the rating for The Allstate Corporation to A- from A+, the financial strength ratings for AIC and ALIC to AA- from AA, and the commercial paper rating of The Allstate Corporation to A-2 from A-1.
The outlook for all ratings remained negative.
In October 2008, the outlook had been revised to negative from stable.
On January 29, 2009, Moody’s downgraded the rating for The Allstate Corporation to A3 from A2, the financial strength rating of AIC to Aa3 from Aa2, the financial strength rating of ALIC to A1 from Aa3, and the commercial paper rating of The Allstate Corporation to P-2 from P-1.
The outlook for all ratings was revised to stable from negative.
In October 2008, Moody’s downgraded The Allstate Corporation to A2 from A1 and the financial strength ratings of ALIC to Aa3 from Aa2.
We have distinct and separately capitalized groups of subsidiaries licensed to sell property and casualty insurance in New Jersey and Florida that maintain separate group ratings.
The ratings of these groups are influenced by the risks that relate specifically to each group.
Many mortgage companies require property owners to have insurance from an insurance carrier with a secure financial strength rating from an accredited rating agency.
Allstate New Jersey Insurance Company and Encompass Insurance Company of New Jersey, which write auto and homeowners insurance, are rated A- by A. M.  Best.
Allstate New Jersey Insurance Company also has a Demotech rating of A’’.
On October 29, 2008, A. M.  Best placed The Allstate Corporation’s subsidiary in Florida, Allstate Floridian, under review with negative implications based upon the uncertainty regarding the FHCF’s ability to fund its reimbursement obligations.
However, as no catastrophes occurred through the end of the season, A. M.  Best removed Allstate Floridian from review and placed it on negative outlook while affirming its rating of B+.
Effective May 8, 2008, ALIC, AIC and the Corporation entered into a one-year Amended and Restated Intercompany Liquidity Agreement (‘‘Liquidity Agreement’’) replacing the Intercompany Liquidity Agreement between ALIC and AIC, dated January 1, 2008.
The agreement allows for short-term advances of funds to be made between parties for liquidity and other general corporate purposes.
It shall be automatically renewed for subsequent one-year terms unless terminated by the parties.
The Liquidity Agreement does not establish a commitment to advance funds on the part of either party.
ALIC and AIC each serve as a lender and borrower and the Corporation serves only as a lender.
AIC also has a capital support agreement with ALIC effective December 14, 2007.
Under the capital support agreement, AIC is committed to provide capital to ALIC to allow for profitable growth while maintaining an adequate capital level.
The maximum amount of potential funding under the intercompany and capital support agreements is $1.00 billion.
Allstate’s domestic property-liability and life insurance subsidiaries prepare their statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the insurance department of the applicable state of domicile.
Statutory surplus is a measure that is often used as a basis for determining dividend paying capacity, operating leverage and premium growth capacity, and it is also reviewed by rating agencies in determining their ratings.
As of December 31, 2008, AIC’s statutory surplus is approximately $13.0 billion compared to $18.0 billion at December 31, 2007.
These amounts include ALIC’s statutory surplus of $3.2 billion at December 31, 2008, compared to $2.6 billion at December 31, 2007.
The decrease is the result of dividends paid to The Allstate Corporation, net loss and unrealized losses on equity securities and investments in ALIC.
We have received approval from the Illinois Division of Insurance for the use of two permitted practices in the statutory-basis financial statements related to areas in which statutory accounting is not reflective of the underlying economics during this period of extreme market conditions caused by the current economic crisis.
The first permitted practice relates to the statutory accounting for deferred taxes and applies to AIC and ALIC.
Management’s Discussion and Analysis of Financial Condition and Results of Operations–(Continued) (7) Balance sheet liabilities not included in the table above include unearned and advance premiums of $10.79 billion and deferred tax liabilities netted in the net deferred tax asset of $3.79 billion.
These items were excluded as they do not meet the definition of a contractual liability as we are not contractually obligated to pay these amounts to third parties.
Rather, they represent an accounting mechanism that allows us to present our financial statements on an accrual basis.
In addition, other liabilities of $708 million were not included in the table above because they did not represent a contractual obligation or the amount and timing of their eventual payment was sufficiently uncertain.
(8) Net unrecognized tax benefits relate to Financial Accounting Standards Board Interpretation No.48, ‘‘Accounting for Uncertainty in Income Taxes’’ (‘‘FIN 48’’).
We believe it is reasonably possible that the FIN 48 liability balance will not significantly increase or decrease within the next 12 months.
The resolution of this obligation may be for an amount different than what we have accrued.
Our contractual commitments as of December 31, 2008 and the payments due by period are shown in the following table.
## Table 2 ##
Contractual commitments represent investment commitments such as private placements, limited partnership interests and mortgage loans.
We have agreements in place for services we conduct, generally at cost, between subsidiaries relating to insurance, reinsurance, loans and capitalization.
All material inter-company transactions have appropriately been eliminated in consolidation.
Inter-company transactions among insurance subsidiaries and affiliates have been approved by the appropriate departments of insurance as required.
For a more detailed discussion of our off-balance sheet arrangements, see Note 6 of the consolidated financial statements.
ENTERPRISE RISK AND RETURN MANAGEMENT Allstate has established enterprise risk and return management (‘‘ERRM’’) processes and infrastructure to effectively manage risk within our tolerances while optimizing risk adjusted returns.
We have a senior management committee called the Enterprise Risk & Return Council (‘‘ERRC’’) which is responsible for overseeing enterprise risks.
Enterprise risk and return management is a disciplined, holistic, integrated and interactive approach to risk that is conducted under an overall framework which: ● Increases transparency thereby providing additional insight when setting enterprise strategy ● Identifies potential events that could have a significant impact on Allstate ● Proactively manages risk and optimizes our overall profile consistent with Allstate’s risk appetite ● Provides greater assurance of achieving Allstate’s objectives ● Allows Allstate to pursue a return commensurate with the risks taken Allstate’s Board of Directors and Audit Committee provide enterprise risk management oversight by reviewing enterprise principles, guidelines and limits for Allstate’s significant risks and by monitoring major risk exposures, trends and actions management has taken to control these risks.
Allstate’s primary risk exposures result from the capital markets, followed by catastrophes and operational risk events.
Allstate has been proactive in the face of financial market and economic turbulence by responding quickly to reduce exposures in ‘‘at risk’’ asset classes, implementing risk mitigation and return optimization programs designed to protect our investment portfolio values, and enhancing our liquidity position through a series of actions.
Risk management is primarily executed within the business units where risk is undertaken.
Our risk management programs include appropriate governance policies with established tolerances and risk limits, stochastic modeling software and analyses, risk identification, evaluation, prioritization, treatment and monitoring practices and effective communication and reporting.
Chief Risk Officers and managers in the various business units are responsible for managing, measuring, evaluating, and reporting risks as appropriate in their respective areas within the risk appetite of the overall enterprise.
This includes items such as monitoring appropriate tolerances and managing exposure to catastrophes; managing the impacts to invested assets and liabilities

<table><tr><td> ($ in millions) </td><td> Fair value at December 31, 2008</td><td>% to Total Investments</td><td> Fair value at December 31, 2007</td><td> % to Total Investments</td></tr><tr><td>U.S. government and agencies</td><td>$4,234</td><td>4.4%</td><td>$4,421</td><td>3.7%</td></tr><tr><td>Municipal</td><td>21,848</td><td>22.8</td><td>25,307</td><td>21.3</td></tr><tr><td>Corporate</td><td>27,627</td><td>28.8</td><td>38,467</td><td>32.3</td></tr><tr><td>Foreign government</td><td>2,675</td><td>2.8</td><td>2,936</td><td>2.5</td></tr><tr><td>Mortgage-backed securities ("MBS")</td><td>4,492</td><td>4.7</td><td>6,959</td><td>5.8</td></tr><tr><td>CMBS</td><td>3,846</td><td>4.0</td><td>7,617</td><td>6.4</td></tr><tr><td>ABS</td><td>3,860</td><td>4.0</td><td>8,679</td><td>7.3</td></tr><tr><td>Redeemable preferred stock</td><td>26</td><td>—</td><td>65</td><td>0.1</td></tr><tr><td>Total fixed income securities</td><td>$68,608</td><td>71.5%</td><td>$94,451</td><td>79.4%</td></tr></table>
<table><tr><td> </td><td> Moody's</td><td> Standard & Poor's</td><td> A.M. Best</td></tr><tr><td>The Allstate Corporation (senior long-term debt)</td><td>A3</td><td>A-</td><td>a-</td></tr><tr><td>The Allstate Corporation (commercial paper)</td><td>P-2</td><td>A-2</td><td>AMB-1</td></tr><tr><td>AIC (insurance financial strength)</td><td>Aa3</td><td>AA-</td><td>A+</td></tr><tr><td>Allstate Life Insurance Company (insurance financial strength)</td><td>A1</td><td>AA-</td><td>A+</td></tr></table>
<table><tr><td> ($ in millions) </td><td> Total</td><td> Less than 1 year</td><td> 1-3 years</td><td> 4-5 years</td><td> Over 5 years</td></tr><tr><td>Other commitments—conditional</td><td>$13</td><td>$11</td><td>$2</td><td>$—</td><td>$—</td></tr><tr><td>Other commitments—unconditional</td><td>1,945</td><td>216</td><td>1,052</td><td>616</td><td>61</td></tr><tr><td>Total commitments</td><td>$1,958</td><td>$227</td><td>$1,054</td><td>$616</td><td>$61</td></tr></table>

Question: Which year has the greatest proportion of Corporate to Total fixed income securities for Fair value?