Acquisitions (Tables)

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Schedule of fair values of assets and liabilities acquired from acquisition

The following table shows the net effect of the CIFG Acquisition, including the effects of the settlement of pre-existing relationships.

	Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships		Net effect of Settlement of Pre-existing Relationships			Net Effect of CIFG Acquisition
	(in millions)
Cash Purchase Price (1)	$	443	$	—		$	443
Identifiable assets acquired:
Investments	770		—			770
Cash	8		—			8
Premiums receivable, net of commissions payable	18		—			18
Ceded unearned premium reserve	173		(173		)	—
Deferred acquisition costs	1		(1		)	—
Salvage and subrogation recoverable	23		—			23
Credit derivative assets	1		—			1
Deferred tax asset, net	194		34			228
Other assets	4		—			4
Total assets	1,192		(140		)	1,052
Liabilities assumed:
Unearned premium reserves	306		(10		)	296
Loss and loss adjustment expense reserve	1		(66		)	(65		)
Credit derivative liabilities	68		0			68
Other liabilities	17		—			17
Total liabilities	392		(76		)	316
Net asset effect of CIFG Acquisition	800		(64		)	736
Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, after-tax	357		(64		)	293
Deferred tax	—		(34		)	(34		)
Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, pre-tax	$	357	$	(98	)	$	259

_____________________

(1) The cash purchase price of $443 million was the cash transferred for the acquisition which was allocated as follows: (1) $270 million for the purchase of net assets of $627 million, and (2) the settlement of pre-existing relationships between CIFG and Assured Guaranty at a fair value of $173 million.

Schedule of settlement of pre-existing relationships

The following table shows the net effect of the CIFG Acquisition, including the effects of the settlement of pre-existing relationships.

	Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships		Net effect of Settlement of Pre-existing Relationships			Net Effect of CIFG Acquisition
	(in millions)
Cash Purchase Price (1)	$	443	$	—		$	443
Identifiable assets acquired:
Investments	770		—			770
Cash	8		—			8
Premiums receivable, net of commissions payable	18		—			18
Ceded unearned premium reserve	173		(173		)	—
Deferred acquisition costs	1		(1		)	—
Salvage and subrogation recoverable	23		—			23
Credit derivative assets	1		—			1
Deferred tax asset, net	194		34			228
Other assets	4		—			4
Total assets	1,192		(140		)	1,052
Liabilities assumed:
Unearned premium reserves	306		(10		)	296
Loss and loss adjustment expense reserve	1		(66		)	(65		)
Credit derivative liabilities	68		0			68
Other liabilities	17		—			17
Total liabilities	392		(76		)	316
Net asset effect of CIFG Acquisition	800		(64		)	736
Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, after-tax	357		(64		)	293
Deferred tax	—		(34		)	(34		)
Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, pre-tax	$	357	$	(98	)	$	259

_____________________

(1) The cash purchase price of $443 million was the cash transferred for the acquisition which was allocated as follows: (1) $270 million for the purchase of net assets of $627 million, and (2) the settlement of pre-existing relationships between CIFG and Assured Guaranty at a fair value of $173 million.

Schedule of business combination related expenses

CIFG Acquisition-Related Expenses

	Third Quarter 2016		Nine Months 2016
	(in millions)
Professional services	$	1	$	2
Financial advisory fees	3		4
Total	$	4	$	6