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Reinsurance and Other Monoline Exposures (Tables)
 12 Months Ended
Dec. 31, 2017
Insurance [Abstract]  
Effects of Reinsurance on Statement of Operations
The following table presents the components of premiums and losses reported in the consolidated statements of operations and the contribution of the Company's Assumed and Ceded Businesses (both financial guaranty and non-financial guaranty).

Effect of Reinsurance on Statement of Operations

 
Year Ended December 31,
 
2017
 
2016
 
2015
 
(in millions)
Premiums Written:
 
 
 
 
 
Direct
$
297

 
$
165

 
$
164

Assumed(1)
10

 
(11
)
 
17

Ceded(2)
18

 
(17
)
 
10

Net
$
325

 
$
137

 
$
191

Premiums Earned:
 
 
 
 
 
Direct
$
693

 
$
887

 
$
792

Assumed
27

 
27

 
40

Ceded
(30
)
 
(50
)
 
(66
)
Net
$
690

 
$
864

 
$
766

Loss and LAE:
 
 
 
 
 
Direct
$
404

 
$
327

 
$
399

Assumed
11

 
0

 
45

Ceded
(27
)
 
(32
)
 
(20
)
Net
$
388

 
$
295

 
$
424

____________________
(1)
Negative assumed premiums written were due to changes in expected debt service schedules.

(2)
Positive ceded premiums written were due to commutations and changes in expected debt service schedules.
Exposure by Reinsurer
Exposure to Reinsurers (1)

 
As of December 31,
 
2017
 
2016
 
(in millions)
Due (To) From:
 
 
 
Assumed premium, net of commissions
$
53

 
$
65

Ceded premium, net of commissions
(42
)
 
(46
)
Assumed expected loss to be paid
(71
)
 
(70
)
Ceded expected loss to be paid
29

 
87

Par Outstanding:
 
 
 
Ceded par outstanding (2)
4,434

 
11,156

Assumed par outstanding
8,383

 
13,264

Second-to-pay insured par outstanding (3)
6,605

 
11,539

____________________
(1)
The total collateral posted by all non-affiliated reinsurers required to post, or that had agreed to post, collateral as of December 31, 2017 and December 31, 2016 was approximately $118 million and $387 million, respectively.
(2)
Of the total ceded par to unrated or BIG rated reinsurers, $296 million and $384 million is rated BIG as of December 31, 2017 and December 31, 2016, respectively.
(3)
The par on second-to-pay exposure where the primary insurer and underlying transaction rating are both BIG and/or not rated is $204 million and $788 million as of December 31, 2017 and December 31, 2016, respectively. Second-to-pay insured par outstanding represents transactions the Company has insured that were previously insured by such other monoline financial guaranty insurers. The Company underwrites such transactions based on the underlying insured obligation without regard to the primary insurer.
Net Effect of Commutations and Cancellations of Assumed Reinsurance Contracts
Commutations of Ceded Reinsurance Contracts  

 
Year Ended December 31,
 
2017
 
2016
 
2015
 
(in millions)
Increase (decrease) in net unearned premium reserve
$
82

 
$
—

 
$
23

Increase (decrease) in net par outstanding
5,107

 
28

 
855

Commutation gains (losses)
328

 
8

 
28