Question-and-Answer Session
Operator
Thank you. [Operator Instructions].
Your first question is coming from Bob Glasspiegel with Langen McAlenney.
Robert Glasspiegel - Langen McAlenney
Good morning and let me say I appreciate your answer. And Jimmy I share your confusion at the stock reaction today. I do sense from investor sort of nervousness about the overall investment picture and your Company’s exposure to what's happen in the third quarter. So, I was wondering if you would? you want to share with us any sort of incremental changes in the portfolio to date in the third quarter with the treasury rally were you are well positioned to benefit from? as I expect in? whether you are playing offense or defense on the margin with the significant changes that have happened in July?
James S. Tisch - President and Chief Executive Officer
I am not going to talk about what we have done in our portfolio since the end of the quarter. But I think that a lot of the reactions of Loews and CNA stock to our earnings report related to the other then temporary impairments that we took. And please explain the one but let me just add a little bit to this discussions. We managed today and for the past 30 years, we have managed CNA portfolio differently than most other insurance companies had managed their portfolio. Typically, when an insurance company manages the portfolio, they buy an asset, they put it there and they buy a bond, they put it their portfolio and they wake up five, 10 or 20 years later or whatever and the bond matures. That is typically not what happened in the CNA portfolio. When we managed the portfolio, we have a more active portfolio management start.
We buy securities and we sell securities. And the reason that we do this is because we believe that we can add value by moving from one security to another, from one sector of the market another. And so, as I said that’s been our modus operandi for 30 years and I would happily stack up all performance record versus those of our peers in the insurance industry. What's happened more recently is that the accounting rule has been tweaked and changed slightly. And the result of it is that most of the portfolio that we have, we carry are available for sale. And the way the rules work today on securities that are carried available for sale, is that if at the end of the quarter that individual security is at a loss, doesn’t matter if it’s a penny, a point or 20 points. If it’s at a loss, you have to state an intention to hold that security to recovery of the loss, and if you can’t make that assertion, then you have to take an impairment law. They are what’s call other than temporary impairment law. The result of this is that we very much want to keep as much of our portfolio available for sales so that we can trade it to capitalize on changes in the market. So, therefore, we take as big a impairment charge as we can so that we can keep as much as of our portfolio open and available for sale. And so what you are seeing is an impairment charge that took place, due to the significant increase in interest rate that occurred in the second quarter, and very little of that impairment charge actually resulted from deteriorating credit in our portfolio. There is also at this time, I understand, tremendous sensitivity about CDO’s and sub prime securities, and let me just review for a minute the mortgage portfolio that we have at CNA. CNA has a mortgage portfolio of just under $11.7 billion, of that 3.8% is in CDO debt, but of that in CDO debt substantial portion in fact most of that is in commercial CDO’s and mostly we are rated A.
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