Financial Guaranty Insurance Premiums

The portfolio of outstanding exposures discussed in Note 4, Outstanding Exposure, includes financial guaranty contracts that meet the definition of insurance contracts as well as those that meet the definition of a derivative under GAAP. Amounts presented in this note relate to financial guaranty insurance contracts, unless otherwise noted. See Note 9, Financial Guaranty Contracts Accounted for as Credit Derivatives for amounts that relate to CDS.

Net Earned Premiums



	Second Quarter				Six Months
	2015		2014		2015		2014
	(in millions)
Scheduled net earned premiums	$	118	$	106	$	214	$	213
Acceleration of net earned premiums	96		24		137		43
Accretion of discount on net premiums receivable	5		5		9		11
Financial guaranty insurance net earned premiums	219		135		360		267
Other	0		1		1		1
Net earned premiums(1)	$	219	$	136	$	361	$	268

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(1)	Excludes $5 million and $5 million for Second Quarter 2015 and 2014, respectively, and $10 million and $22 million for Six Months 2015 and 2014, respectively, related to consolidated financial guaranty ("FG") VIEs.

Components of Unearned Premium Reserve



	As of June 30, 2015							As of December 31, 2014
	Gross		Ceded			Net(1)		Gross		Ceded			Net(1)
	(in millions)
Deferred premium revenue:
Financial guaranty insurance	$	4,312	$	289		$	4,023	$	4,167	$	387		$	3,780
Other	1		—			1		0		—			0
Deferred premium revenue	$	4,313	$	289		$	4,024	$	4,167	$	387		$	3,780
Contra-paid (2)	76		(7		)	83		94		(6		)	100
Unearned premium reserve	$	4,389	$	282		$	4,107	$	4,261	$	381		$	3,880

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(1)	Excludes $125 million and $125 million of deferred premium revenue, and $37 million and $42 million of contra-paid related to FG VIEs as of June 30, 2015 and December 31, 2014, respectively.


(2)	See Note 7, "Financial Guaranty Insurance Losses– Insurance Contracts' Loss Information" for an explanation of "contra-paid".

Gross Premium Receivable,

Net of Commissions on Assumed Business

Roll Forward



	Six Months
	2015			2014
	(in millions)
Beginning of period, December 31	$	729		$	876
Premiums receivable acquired in Radian Asset Acquisition on April 1, 2015	2			—
Gross premium written, net of commissions on assumed business	61			61
Gross premiums received, net of commissions on assumed business	(79		)	(97		)
Adjustments:
Changes in the expected term	(9		)	(13		)
Accretion of discount, net of commissions on assumed business	10			12
Foreign exchange translation	(8		)	9
Consolidation/deconsolidation of FG VIEs	(4		)	1
Other adjustments	0			—
End of period, June 30 (1)	$	702		$	849

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(1)	Excludes $23 million and $18 million as of June 30, 2015 and June 30, 2014, respectively, related to consolidated FG VIEs. Excludes $1 million related to non-financial guaranty line of business as of June 30, 2015.

Foreign exchange translation relates to installment premium receivables denominated in currencies other than the U.S. dollar. Approximately 50% and 51% of installment premiums at June 30, 2015 and December 31, 2014, respectively, are denominated in currencies other than the U.S. dollar, primarily the Euro and British Pound Sterling.

The timing and cumulative amount of actual collections may differ from expected collections in the tables below due to factors such as foreign exchange rate fluctuations, counterparty collectability issues, accelerations, commutations and changes in expected lives.

Expected Collections of

Financial Guaranty Gross Premiums Receivable,

Net of Commissions on Assumed Business

(Undiscounted)



	As of June 30, 2015
	(in millions)
2015 (July 1 – September 30)	$	25
2015 (October 1 – December 31)	23
2016	77
2017	69
2018	62
2019	58
2020-2024	244
2025-2029	158
2030-2034	111
After 2034	101
Total(1)	$	928

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(1)	Excludes expected cash collections on FG VIEs of $29 million.

Scheduled Financial Guaranty Net Earned Premiums



	As of June 30, 2015
	(in millions)
2015 (July 1 – September 30)	$	103
2015 (October 1 – December 31)	100
2016	383
2017	334
2018	302
2019	276
2020-2024	1,080
2025-2029	690
2030-2034	413
After 2034	342
Net deferred premium revenue(1)	4,023
Future accretion	206
Total future net earned premiums	$	4,229

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(1)	Excludes scheduled net earned premiums on consolidated FG VIEs of $125 million.

Selected Information for Financial Guaranty Policies Paid in Installments



	As of June 30, 2015			As of December 31, 2014
	(dollars in millions)
Premiums receivable, net of commission payable	$	702		$	729
Gross deferred premium revenue	1,302			1,370
Weighted-average risk-free rate used to discount premiums	3.4		%	3.5		%
Weighted-average period of premiums receivable (in years)	9.4			9.4