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



	Third Quarter				Nine Months
	2015		2014		2015		2014
	(in millions)
Scheduled net earned premiums	$	104	$	105	$	318	$	318
Acceleration of net earned premiums	105		36		242		79
Accretion of discount on net premiums receivable	4		3		13		14
Financial guaranty insurance net earned premiums	213		144		573		411
Other	0		0		1		1
Net earned premiums(1)	$	213	$	144	$	574	$	412

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(1)	Excludes $6 million and $5 million for Third Quarter 2015 and 2014, respectively, and $16 million and $27 million for Nine Months 2015 and 2014, respectively, related to consolidated financial guaranty ("FG") VIEs.

Components of Unearned Premium Reserve



	As of September 30, 2015									As of December 31, 2014
	Gross			Ceded			Net(1)			Gross		Ceded			Net(1)
	(in millions)
Deferred premium revenue:
Financial guaranty insurance	$	4,126		$	271		$	3,855		$	4,167	$	387		$	3,780
Other	0			—			0			0		—			0
Deferred premium revenue	$	4,126		$	271		$	3,855		$	4,167	$	387		$	3,780
Contra-paid (2)	(14		)	(8		)	(6		)	94		(6		)	100
Unearned premium reserve	$	4,112		$	263		$	3,849		$	4,261	$	381		$	3,880

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(1)	Excludes $120 million and $125 million of deferred premium revenue, and $35 million and $42 million of contra-paid related to FG VIEs as of September 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



	Nine 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	103			116
Gross premiums received, net of commissions on assumed business	(140		)	(172		)
Adjustments:
Changes in the expected term	(11		)	(21		)
Accretion of discount, net of commissions on assumed business	15			17
Foreign exchange translation	(18		)	(16		)
Consolidation/deconsolidation of FG VIEs	(4		)	1
End of period, September 30 (1)	$	676		$	801

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(1)	Excludes $23 million and $18 million as of September 30, 2015 and September 30, 2014, respectively, related to consolidated FG VIEs.

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 September 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 September 30, 2015
	(in millions)
2015 (October 1 – December 31)	$	25
2016	77
2017	68
2018	61
2019	57
2020-2024	240
2025-2029	155
2030-2034	108
After 2034	99
Total(1)	$	890

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(1)	Excludes expected cash collections on FG VIEs of $28 million.

Scheduled Financial Guaranty Net Earned Premiums



	As of September 30, 2015
	(in millions)
2015 (October 1 – December 31)	$	99
2016	379
2017	331
2018	299
2019	272
2020-2024	1,066
2025-2029	678
2030-2034	405
After 2034	326
Net deferred premium revenue(1)	3,855
Future accretion	197
Total future net earned premiums	$	4,052

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(1)	Excludes scheduled net earned premiums on consolidated FG VIEs of $120 million.

Selected Information for Financial Guaranty Policies Paid in Installments



	As of September 30, 2015			As of December 31, 2014
	(dollars in millions)
Premiums receivable, net of commission payable	$	676		$	729
Gross deferred premium revenue	1,250			1,370
Weighted-average risk-free rate used to discount premiums	3.4		%	3.5		%
Weighted-average period of premiums receivable (in years)	9.3			9.4