Consolidated Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Number of FG VIEs Consolidated



	Six Months
	2015	2014

Beginning of the period, December 31	32	40
Radian Asset Acquisition	4	—
Consolidated (1)	1	1
Deconsolidated (1)	—	(8	)
Matured	—	(2	)
End of the period, June 30	37	31

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(1)	Net loss on consolidation was $26 million in Six Months 2015, and net gain on deconsolidation was $120 million in Six Months 2014, and recorded in “fair value gains (losses) on FG VIEs” in the consolidated statement of operations.

Effect of Consolidating FG VIEs on Net Income,

Cash Flows From Operating Activities and Shareholders’ Equity



	Second Quarter						Six Months
	2015			2014			2015			2014
	(in millions)
Net earned premiums	$	(5	)	$	(5	)	$	(10	)	$	(22	)
Net investment income	(3		)	(3		)	(6		)	(6		)
Net realized investment gains (losses)	3			(5		)	3			(5		)
Fair value gains (losses) on FG VIEs	5			25			(2		)	182
Bargain purchase gain	2			—			2			—
Other income (loss)	0			0			0			(2		)
Loss and LAE	2			8			7			7
Effect on net income before tax	4			20			(6		)	154
Less: tax provision (benefit)	1			7			(3		)	54
Effect on net income (loss)	$	3		$	13		$	(3	)	$	100

Effect on cash flows from operating activities	$	15		$	47		$	33		$	39



	As of June 30, 2015			As of December 31, 2014
	(in millions)
Effect on shareholders’ equity (decrease) increase	$	(40	)	$	(44	)

Consolidated FG VIEs

By Type of Collateral



	As of June 30, 2015 (1)				As of December 31, 2014
	Assets		Liabilities		Assets		Liabilities
	(in millions)
With recourse:
U.S. RMBS first lien	$	743	$	594	$	632	$	581
U.S. RMBS second lien	223		312		238		327
Other	455		455		369		369
Total with recourse	1,421		1,361		1,239		1,277
Without recourse	180		171		163		142
Total	$	1,601	$	1,532	$	1,402	$	1,419

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(1)	The June 30, 2015 amounts include $119 million of FG VIE assets and $115 million of FG VIE liabilities acquired from Radian Asset.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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