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Contracts Accounted for as Insurance (Tables)
 12 Months Ended
Dec. 31, 2016
Insurance [Abstract]  
Net Earned Premiums
Net Earned Premiums
 
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(in millions)
Scheduled net earned premiums
$
381

 
$
416

 
$
415

Accelerations
 
 
 
 
 
Refundings
390

 
294

 
133

Terminations
79

 
37

 
3

Total Accelerations
469

 
331

 
136

Accretion of discount on net premiums receivable
14

 
17

 
16

  Financial guaranty insurance net earned premiums
864

 
764

 
567

Other
0

 
2

 
3

  Net earned premiums (1)
$
864

 
$
766

 
$
570

 ___________________
(1)
Excludes $16 million, $21 million and $32 million for the year ended December 31, 2016, 2015 and 2014, respectively, related to consolidated FG VIEs.
Components of Unearned Premium Reserve
Components of
Unearned Premium Reserve
 
 
As of December 31, 2016
 
As of December 31, 2015
 
Gross
 
Ceded
 
Net(1)
 
Gross
 
Ceded
 
Net(1)
 
(in millions)
Deferred premium revenue
$
3,548

 
$
206

 
$
3,342

 
$
4,008

 
$
238

 
$
3,770

Contra-paid(2)
(37
)
 
0

 
(37
)
 
(12
)
 
(6
)
 
(6
)
Unearned premium reserve
$
3,511

 
$
206

 
$
3,305

 
$
3,996

 
$
232

 
$
3,764

 ____________________
(1)
Excludes $90 million and $110 million of deferred premium revenue and $25 million and $30 million of contra-paid related to FG VIEs as of December 31, 2016 and December 31, 2015, respectively.

(2)
See "Financial Guaranty Insurance Losses – Insurance Contracts' Loss Information" below for an explanation of "contra-paid".
Gross Premium Receivable, Net of Commissions on Assumed Business Roll Forward
Expected Collections of
Financial Guaranty Insurance Gross Premiums Receivable,
Net of Commissions on Assumed Business
(Undiscounted)

 
As of December 31, 2016
 
(in millions)
2017 (January 1 – March 31)
$
27

2017 (April 1 – June 30)
21

2017 (July 1 – September 30)
14

2017 (October 1 – December 31)
16

2018
58

2019
52

2020
50

2021
49

2022-2026
179

2027-2031
120

2032-2036
80

After 2036
65

Total(1)
$
731

____________________
(1)
Excludes expected cash collections on FG VIEs of $13 million.
Gross Premium Receivable,
Net of Commissions on Assumed Business
Roll Forward

 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(in millions)
Beginning of period, December 31
$
693

 
$
729

 
$
876

Premiums receivable from acquisitions (see Note 2)
18

 
2

 
—

Gross written premiums on new business, net of commissions on assumed business
193

 
198

 
171

Gross premiums received, net of commissions on assumed business
(258
)
 
(206
)
 
(230
)
Adjustments:
 
 
 
 
 
Changes in the expected term
(38
)
 
(19
)
 
(66
)
Accretion of discount, net of commissions on assumed business
9

 
18

 
10

Foreign exchange translation
(41
)
 
(25
)
 
(31
)
Consolidation/deconsolidation of FG VIEs
0

 
(4
)
 
(1
)
End of period, December 31 (1)
$
576

 
$
693

 
$
729

____________________
(1)
Excludes $11 million, $17 million and $19 million as of December 31, 2016 , 2015 and 2014, respectively, related to consolidated FG VIEs.
Schedule of Net Earned Premiums
Scheduled Financial Guaranty Insurance Net Earned Premiums
 
 
As of December 31, 2016
 
(in millions)
2017 (January 1 – March 31)
$
89

2017 (April 1 – June 30)
87

2017 (July 1 – September 30)
82

2017 (October 1 – December 31)
80

Subtotal 2017
338

2018
304

2019
268

2020
243

2021
223

2022-2026
856

2027-2031
545

2032-2036
315

After 2036
250

Net deferred premium revenue(1)
3,342

Future accretion
145

Total future net earned premiums
$
3,487

 ____________________
(1)
Excludes scheduled net earned premiums on consolidated FG VIEs of $90 million.
Selected Information for Policies Paid in Installments
Selected Information for Financial Guaranty Insurance
Policies Paid in Installments

 
As of
December 31, 2016
 
As of
December 31, 2015
 
(dollars in millions)
Premiums receivable, net of commission payable
$
576

 
$
693

Gross deferred premium revenue
1,041

 
1,240

Weighted-average risk-free rate used to discount premiums
3.0
%
 
3.1
%
Weighted-average period of premiums receivable (in years)
9.1

 
9.4
Rollforward of Deferred Acquisition Costs
Rollforward of
Deferred Acquisition Costs

 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(in millions)
Beginning of period
$
114

 
$
121

 
$
124

DAC adjustments from acquisitions (see Note 2)
0

 
1

 
—

Costs deferred during the period:
 
 
 
 
 
Commissions on assumed and ceded business
(2
)
 
(1
)
 
7

Premium taxes
4

 
2

 
3

Compensation and other acquisition costs
9

 
11

 
10

Total
11

 
12

 
20

Costs amortized during the period
(19
)
 
(20
)
 
(23
)
End of period
$
106

 
$
114

 
$
121
Loss and LAE Reserve and Salvage and Subrogation Recoverable Net of Reinsurance Insurance Contracts
Loss and LAE Reserve and Salvage and Subrogation Recoverable
Net of Reinsurance
Insurance Contracts
 
 
As of December 31, 2016
 
As of December 31, 2015
 
Loss and
LAE
Reserve, net
 
Salvage and
Subrogation
Recoverable, net 
 
Net Reserve (Recoverable)
 
Loss and
LAE
Reserve, net
 
Salvage and
Subrogation
Recoverable, net 
 
Net Reserve (Recoverable)
 
(in millions)
Public finance:
 
 
 
 
 
 
 
 
 
 
 
U.S. public finance
$
711

 
$
86

 
$
625

 
$
604

 
$
7

 
$
597

Non-U.S. public finance
21

 
—

 
21

 
25

 
—

 
25

Public finance
732

 
86

 
646

 
629

 
7

 
622

Structured finance:
 
 
 
 
 
 
 
 
 
 
 
U.S. RMBS
283

 
262

 
21

 
262

 
116

 
146

Triple-X life insurance transactions
36

 
—

 
36

 
82

 
—

 
82

Other structured finance
60

 
—

 
60

 
99

 
—

 
99

Structured finance
379

 
262

 
117

 
443

 
116

 
327

Subtotal
1,111

 
348

 
763

 
1,072

 
123

 
949

Other recoverable (payable)
—

 
(1
)
 
1

 
—

 
3

 
(3
)
Subtotal
1,111

 
347

 
764

 
1,072

 
126

 
946

Elimination of losses attributable to FG VIEs
(64
)
 
—

 
(64
)
 
(74
)
 
0

 
(74
)
Total (1)
$
1,047

 
$
347

 
$
700

 
$
998

 
$
126

 
$
872

______________
(1)                                 See “Components of Net Reserves (Salvage)” table for loss and LAE reserve and salvage and subrogation recoverable components.
Components of Net Reserves (Salvage) Insurance Contracts
Components of Net Reserves (Salvage)

 
As of
December 31, 2016
 
As of
December 31, 2015
 
(in millions)
Loss and LAE reserve
$
1,127

 
$
1,067

Reinsurance recoverable on unpaid losses
(80
)
 
(69
)
Loss and LAE reserve, net
1,047

 
998

Salvage and subrogation recoverable
(365
)
 
(126
)
Salvage and subrogation payable(1)
17

 
3

Other payable (recoverable)
1

 
(3
)
Salvage and subrogation recoverable, net, and other recoverable
(347
)
 
(126
)
Net reserves (salvage)
$
700

 
$
872

____________________
(1)          Recorded as a component of reinsurance balances payable.
Reconciliation of Net Expected Loss to be Paid and Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts
Reconciliation of Net Expected Loss to be Paid and
Net Expected Loss to be Expensed
Financial Guaranty Insurance Contracts
 
 
As of December 31, 2016
 
(in millions)
Net expected loss to be paid - financial guaranty insurance (1)
$
1,083

Contra-paid, net
37

Salvage and subrogation recoverable, net of reinsurance
348

Loss and LAE reserve - financial guaranty insurance contracts, net of reinsurance
(1,046
)
Other recoverable (payable)
(1
)
Net expected loss to be expensed (present value) (2)
$
421

____________________
(1)
See "Net Expected Loss to be Paid (Recovered) by Accounting Model" table in Note 5, Expected Loss to be Paid.

(2)
Excludes $64 million as of December 31, 2016 related to consolidated FG VIEs.
Net Expected Loss to be Expensed Insurance Contracts
Net Expected Loss to be Expensed
Financial Guaranty Insurance Contracts
 
 
As of December 31, 2016
 
(in millions)
2017 (January 1 – March 31)
$
8

2017 (April 1 – June 30)
10

2017 (July 1 – September 30)
8

2017 (October 1 – December 31)
9

Subtotal 2017
35

2018
34

2019
32

2020
32

2021
28

2022-2026
117

2027-2031
82

2032-2036
44

After 2036
17

Net expected loss to be expensed
421

Future accretion
373

Total expected future loss and LAE
$
794

 
Loss and LAE Reported on the Consolidated Statements of Operations
Loss and LAE
Reported on the
Consolidated Statements of Operations
 
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(in millions)
Public finance:
 
 
 
 
 
U.S. public finance
$
307

 
$
392

 
$
192

Non-U.S. public finance
(3
)
 
1

 
(1
)
Public finance
304

 
393

 
191

Structured finance:
 
 
 
 
 
U.S. RMBS
37

 
54

 
(129
)
Triple-X life insurance transactions
(22
)
 
16

 
85

Other structured finance
(17
)
 
(11
)
 
9

Structured finance
(2
)
 
59

 
(35
)
Loss and LAE on insurance contracts before FG VIE consolidation
302

 
452

 
156

Gain (loss) related to FG VIE consolidation
(7
)
 
(28
)
 
(30
)
Loss and LAE
$
295

 
$
424

 
$
126
BIG Net Par Outstanding and Number of Risks
BIG Net Par Outstanding
and Number of Risks
As of December 31, 2016

 
 
Net Par Outstanding
 
Number of Risks(2)
Description
 
Financial
Guaranty
Insurance(1)
 
Credit
Derivative
 
Total
 
Financial
Guaranty
Insurance(1)
 
Credit
Derivative
 
Total
 
 
(dollars in millions)
BIG:
 
 

 
 

 
 

 
 

 
 

 
 

Category 1
 
$
3,861

 
$
634

 
$
4,495

 
165

 
10

 
175

Category 2
 
3,857

 
202

 
4,059

 
79

 
6

 
85

Category 3
 
4,383

 
137

 
4,520

 
148

 
9

 
157

Total BIG
 
$
12,101

 
$
973

 
$
13,074

 
392

 
25

 
417



BIG Net Par Outstanding
and Number of Risks
As of December 31, 2015

 
 
Net Par Outstanding
 
Number of Risks(2)
Description
 
Financial
Guaranty
Insurance(1)
 
Credit
Derivative
 
Total
 
Financial
Guaranty
Insurance(1)
 
Credit
Derivative
 
Total
 
 
(dollars in millions)
BIG:
 
 

 
 

 
 

 
 

 
 

 
 

Category 1
 
$
7,019

 
$
1,004

 
$
8,023

 
202

 
12

 
214

Category 2
 
3,655

 
474

 
4,129

 
85

 
8

 
93

Category 3
 
2,900

 
131

 
3,031

 
132

 
12

 
144

Total BIG
 
$
13,574

 
$
1,609

 
$
15,183

 
419

 
32

 
451

_____________________
(1)    Includes net par outstanding for VIEs.

(2)
A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments.
Financial Guaranty Insurance
BIG Transaction Loss Summary
As of December 31, 2016
 
 
BIG Categories
 
BIG 1
 
BIG 2
 
BIG 3
 
Total
BIG, Net
 
Effect of
Consolidating
FG VIEs
 
Total
 
Gross
 
Ceded
 
Gross
 
Ceded
 
Gross
 
Ceded
 
 
 
 
(dollars in millions)
Number of risks(1)
165

 
(35
)
 
79

 
(11
)
 
148

 
(49
)
 
392

 
—

 
392

Remaining weighted-average contract period (in years)
8.6

 
7.0

 
13.2

 
10.5

 
8.1

 
6.0

 
10.1

 
—

 
10.1

Outstanding exposure:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Principal
$
4,187

 
$
(326
)
 
$
4,273

 
$
(416
)
 
$
4,703

 
$
(320
)
 
$
12,101

 
$
—

 
$
12,101

Interest
1,932

 
(140
)
 
2,926

 
(219
)
 
1,867

 
(87
)
 
6,279

 
—

 
6,279

Total(2)
$
6,119

 
$
(466
)
 
$
7,199

 
$
(635
)
 
$
6,570

 
$
(407
)
 
$
18,380

 
$
—

 
$
18,380

Expected cash outflows (inflows)
$
172

 
$
(19
)
 
$
1,404

 
$
(86
)
 
$
1,435

 
$
(65
)
 
$
2,841

 
$
(326
)
 
$
2,515

Potential recoveries
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Undiscounted R&W
120

 
(3
)
 
(2
)
 
—

 
(62
)
 
1

 
54

 
—

 
54

Other(3)
(560
)
 
26

 
(144
)
 
4

 
(681
)
 
44

 
(1,311
)
 
198

 
(1,113
)
Total potential recoveries
(440
)
 
23

 
(146
)
 
4

 
(743
)
 
45

 
(1,257
)
 
198

 
(1,059
)
Subtotal
(268
)
 
4

 
1,258

 
(82
)
 
692

 
(20
)
 
1,584

 
(128
)
 
1,456

Discount
61

 
(4
)
 
(355
)
 
19

 
(114
)
 
(4
)
 
(397
)
 
24

 
(373
)
Present value of expected cash flows
$
(207
)
 
$
0

 
$
903

 
$
(63
)
 
$
578

 
$
(24
)
 
$
1,187

 
$
(104
)
 
$
1,083

Deferred premium revenue
$
131

 
$
(5
)
 
$
246

 
$
(6
)
 
$
476

 
$
(30
)
 
$
812

 
$
(86
)
 
$
726

Reserves (salvage)
$
(255
)
 
$
5

 
$
738

 
$
(58
)
 
$
343

 
$
(10
)
 
$
763

 
$
(64
)
 
$
699

 

Financial Guaranty Insurance
BIG Transaction Loss Summary
As of December 31, 2015
 
 
BIG Categories
 
BIG 1
 
BIG 2
 
BIG 3
 
Total
BIG, Net
 
Effect of
Consolidating
FG VIEs
 
Total
 
Gross
 
Ceded
 
Gross
 
Ceded
 
Gross
 
Ceded
 
 
(dollars in millions)
Number of risks(1)
202

 
(46
)
 
85

 
(13
)
 
132

 
(44
)
 
419

 
—

 
419

Remaining weighted-average contract period (in years)
10.0

 
8.7

 
13.8

 
9.5

 
7.7

 
5.9

 
10.7

 
—

 
10.7

Outstanding exposure:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Principal
$
7,751

 
$
(732
)
 
$
3,895

 
$
(240
)
 
$
3,087

 
$
(187
)
 
$
13,574

 
$
—

 
$
13,574

Interest
4,109

 
(354
)
 
2,805

 
(110
)
 
1,011

 
(42
)
 
7,419

 
—

 
7,419

Total(2)
$
11,860

 
$
(1,086
)
 
$
6,700

 
$
(350
)
 
$
4,098

 
$
(229
)
 
$
20,993

 
$
—

 
$
20,993

Expected cash outflows (inflows)
386

 
(42
)
 
1,158

 
(60
)
 
1,464

 
(53
)
 
2,853

 
(343
)
 
2,510

Potential recoveries
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Undiscounted R&W
69

 
(2
)
 
(49
)
 
1

 
(85
)
 
5

 
(61
)
 
7

 
(54
)
Other(3)
(372
)
 
12

 
(167
)
 
8

 
(672
)
 
24

 
(1,167
)
 
182

 
(985
)
Total potential recoveries
(303
)
 
10

 
(216
)
 
9

 
(757
)
 
29

 
(1,228
)
 
189

 
(1,039
)
Subtotal
83

 
(32
)
 
942

 
(51
)
 
707

 
(24
)
 
1,625

 
(154
)
 
1,471

Discount
22

 
5

 
(237
)
 
11

 
27

 
(94
)
 
(266
)
 
34

 
(232
)
Present value of expected cash flows
$
105

 
$
(27
)
 
$
705

 
$
(40
)
 
$
734

 
$
(118
)
 
$
1,359

 
$
(120
)
 
$
1,239

Deferred premium revenue
$
371

 
$
(37
)
 
$
150

 
$
(4
)
 
$
386

 
$
(32
)
 
$
834

 
$
(100
)
 
$
734

Reserves (salvage)
$
2

 
$
(19
)
 
$
591

 
$
(38
)
 
$
404

 
$
(9
)
 
$
931

 
$
(74
)
 
$
857

____________________
(1)
A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments. The ceded number of risks represents the number of risks for which the Company ceded a portion of its exposure.

(2)
Includes BIG amounts related to FG VIEs.

(3)
Includes excess spread.