(3)Book value per share is calculated as equity at December 31 of each year presented divided by actual shares outstanding at December 31 of each year presented.
We cannot be certain how the outbreak of COVID-19 and the steps taken to attempt to mitigate its spread will impact our future results of operations. We continually monitor mortgage origination trends and believe that, based on our ability to produce industry leading operating margins through all economic cycles, we are well positioned to adjust our operations for adverse changes in real estate activity and to take advantage of increased volume when demand increases.
In connection with the acquisition of F&G, on April 22, 2020, we entered into the Term Loan, which provides for an aggregate principal borrowing of $1.0 billion (the "Term Loan Agreement") with Bank of America, N.A., as administrative agent (in such capacity, the "Administrative Agent"), JPMorgan Chase Bank, N.A., as syndication agent, and the other lenders party thereto from time to time (the “Term Lenders”), pursuant to which the Term Lenders provided the $1.0 billion delayed draw Term Loan. On June 1, 2020, we drew down the full $1.0 billion in aggregate borrowing under the Term Loan to fund a portion of the acquisition of F&G. On June 12, 2020 we repaid $640 million of principal on the Term Loan. On July 31, 2020, we repaid an additional $100 million of principal. On September 15, 2020, we repaid the remaining $260 million of principal under the Term Loan. As of December 31, 2020, we had no principal outstanding under the Term Loan. For further information related to the Term Loan refer to Note G Notes Payable.
The methodology for determining the amortization of DAC, DSI and VOBA varies by product type. For all insurance contracts accounted for under long-duration contract deposit accounting, amortization is based on assumptions consistent with those used in the development of the underlying contract liabilities adjusted for emerging experience and expected trends. For all of the insurance intangibles (DAC, DSI and VOBA), the balances are generally amortized over the lives of the policies in relation to the expected emergence of estimated gross profits (“EGPs”) from investment income, surrender charges and other product fees, less policy benefits, maintenance expenses, mortality, and expense margins. Recognized gains (losses) on investments and changes in fair value of the embedded derivative on our FIA and IUL products are included in actual gross profits in the period realized as described further below. Amortization is reported within Depreciation and amortization in the accompanying Consolidated Statements of Earnings.
•elimination of dividends received by FNF related to its holdings of F&G's common and preferred shares prior to the acquisition;
At this time, the Company is unable to ascertain its liability, if any, and is unable to make an estimate of a reasonably possible claim loss for any of the unresolved claims due to the complex nature of the claims and litigation, the early procedural status of each claim (involving unresolved questions of fact without any rulings on the merits or determinations of liability), the extent of discovery not yet conducted, potential insurance coverage, and an incomplete evaluation of possible defenses, counterclaims, crossclaims or third-party claims that may exist. Moreover, it is likely that in some instances, the claims listed above are duplicative. As further information becomes available, the Company will continue to evaluate the adequacy of its consolidated reserve for title claim losses. As of December 31, 2020, the Company believes that its reserves are adequate to cover losses related to this matter and other claims.
When a determination is made to classify an asset or liability within Level 3 of the fair value hierarchy, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. Because certain securities trade in less liquid or illiquid markets with limited or no pricing information, the determination of fair value for these securities is inherently more difficult. In addition to the unobservable inputs, Level 3 fair value investments may include observable components, which are components that are actively quoted or can be validated to market-based sources.
withdrew its investment on the balance sheet date. Therefore, the key unobservable input used in the Black-Scholes model is the value of the fund. As the value of the fund increases or decreases, the fair value of the embedded derivative will increase or decrease. See further discussion on the available-for-sale embedded derivative in Note F Derivative Financial Instruments.
Company owned life insurance (COLI) is a life insurance program used to finance certain employee benefit expenses. The fair value of COLI is based on net realizable value, which is generally cash surrender value. COLI is classified as Level 3 within the fair value hierarchy.
The fair value of debt is based on quoted market prices. The inputs used to measure the fair value of our outstanding debt are classified as Level 2 within the fair value hierarchy.
Following the adoption of ASU 2016-13 and the related targeted improvements and transition relief amendments (see Note Y Recent Accounting Pronouncements for further details) effective January 1, 2020, we regularly review AFS securities for declines in fair value that we determine to be credit related. For our fixed maturity securities, we generally consider the following in determining whether our unrealized losses are credit related, and if so, the magnitude of the credit loss:
Included in equity securities as of December 31, 2020 and December 31, 2019 are 5,706,134 shares of Cannae common stock (NYSE: CNNE), which were purchased during the fourth quarter of 2017 in connection with the split-off of our former portfolio company investments to Cannae. The fair value of our related party investment based on quoted market prices is $253 million and $212 million as of December 31, 2020 and December 31, 2019, respectively.
Our insurance subsidiaries are subject to regulations that restrict their ability to pay dividends or make other distributions of cash or property to their immediate parent company without prior approval from the Department of Insurance of their respective states of domicile. As of December 31, 2020, $2,559 million of our net assets are restricted from dividend payments without prior approval from the Departments of Insurance. During 2021, our title insurers can pay or make distributions to us of approximately $551 million, without prior approval.
The combined statutory capital and surplus of our title insurers was approximately $1,699 million and $1,581 million as of December 31, 2020 and 2019, respectively. The combined statutory net earnings of our title insurance subsidiaries were $629 million, $583 million, and $625 million for the years ended December 31, 2020, 2019, and 2018, respectively.
capital requirements for each underwritten title company is less than $1 million. These companies were in compliance with their respective minimum net worth and working capital requirements at December 31, 2020.
Our net deferred tax liability was $292 million and $284 million as of December 31, 2020, and 2019, respectively. The significant changes in the deferred taxes are as follows: the deferred tax liability for investment securities increased by $526 million primarily due to unrealized gains recorded for investment securities and the acquisition of F&G ($68 million was related to unrealized gains in our title business, $383 million was related to unrealized gains of F&G and $75 million was related to F&G mortgage loans and other investment related deferreds). The deferred tax liability relating to partnerships and amortization increased by $29 million and $35 million, respectively, primarily related to the acquisition of F&G related deferred tax items. The increase in the deferred tax asset relating to employee benefits of $23 million is also primarily related to the acquisition of F&G. Other notable deferred assets solely related to the F&G acquisition are the deferred tax assets for: life insurance and claim related adjustments of $861 million, capital loss carryover of $35 million, funds held under reinsurance agreements of $85 million and basis differences in held for sale assets of $19 million. Other notable deferred tax liabilities solely related to the F&G acquisition are the deferred tax liabilities for: value of business acquired of $308 million, derivatives of $38 million, funds withheld under reinsurance agreements of $58 million and transition reserve on new reserve method of $43 million.
FNF stock options transactions under the F&G Omnibus Incentive Plan for 2020 are as follows: