Assumption of Insured Portfolio and Business Combinations (Tables)

12 Months Ended

Dec. 31, 2018

Business Acquisition [Line Items]

Effects of Reinsurance on Statement of Operations

	Commutation			Assumption			Total
	(in millions)
Cash	$	20		$	343		$	363
Premiums receivable/payable, net of commissions	$	16		$	45		$	61
Unearned premium reserve, net	(56		)	(319		)	(375		)
Credit derivative liability, net	—			(68		)	(68		)
Other	2			(1		)	1
Impact to net assets (liabilities), excluding cash	$	(38	)	$	(343	)	$	(381	)
Commutation loss	$	18		$	—		$	18

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,
	2018			2017			2016
	(in millions)
Premiums Written:
Direct	$	288		$	297		$	165
Assumed (1)	324			10			(11		)
Ceded (2)	14			18			(17		)
Net	$	626		$	325		$	137
Premiums Earned:
Direct	$	509		$	693		$	887
Assumed	51			27			27
Ceded	(12		)	(30		)	(50		)
Net	$	548		$	690		$	864
Loss and LAE:
Direct	$	68		$	404		$	327
Assumed	(1		)	11			—
Ceded	(3		)	(27		)	(32		)
Net	$	64		$	388		$	295

____________________

(1) Negative assumed premiums written were due to changes in expected debt service schedules. Includes business assumed from SGI pursuant to the SGI Transaction.

(2) Positive ceded premiums written were due to commutations and changes in expected debt service schedules.

MBIA UK [Member]

Business Acquisition [Line Items]

Schedule of settlement of pre-existing relationships

The following table shows the net effect of the MBIA UK Acquisition on January 10, 2017, 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 MBIA UK Acquisition
	(in millions)
Purchase price (1)	$	334		$	—		$	334
Identifiable assets acquired:
Investments	459			—			459
Cash	72			—			72
Premiums receivable, net of commissions payable	274			(4		)	270
Other assets	16			(6		)	10
Total assets	821			(10		)	811
Liabilities assumed:
Unearned premium reserves	389			(6		)	383
Current tax payable	25			—			25
Other liabilities	4			(5		)	(1		)
Total liabilities	418			(11		)	407
Net assets of MBIA UK	403			1			404
Cash acquired from MBIA Holdings	23			—			23
Deferred tax liability	(36		)	—			(36		)
Net asset effect of MBIA UK Acquisition	390			1			391
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax	56			1			57
Deferred tax	—			1			1
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax	$	56		$	2		$	58

_____________________

(1) The purchase price of $334 million was allocated as follows: (1) $329 million for the purchase of net assets of $385 million, and (2) the settlement of pre-existing relationships between MBIA UK and Assured Guaranty at a fair value of $5 million

Schedule of fair values of assets and liabilities acquired from acquisition

The following table shows the net effect of the MBIA UK Acquisition on January 10, 2017, 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 MBIA UK Acquisition
	(in millions)
Purchase price (1)	$	334		$	—		$	334
Identifiable assets acquired:
Investments	459			—			459
Cash	72			—			72
Premiums receivable, net of commissions payable	274			(4		)	270
Other assets	16			(6		)	10
Total assets	821			(10		)	811
Liabilities assumed:
Unearned premium reserves	389			(6		)	383
Current tax payable	25			—			25
Other liabilities	4			(5		)	(1		)
Total liabilities	418			(11		)	407
Net assets of MBIA UK	403			1			404
Cash acquired from MBIA Holdings	23			—			23
Deferred tax liability	(36		)	—			(36		)
Net asset effect of MBIA UK Acquisition	390			1			391
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax	56			1			57
Deferred tax	—			1			1
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax	$	56		$	2		$	58

_____________________

(1) The purchase price of $334 million was allocated as follows: (1) $329 million for the purchase of net assets of $385 million, and (2) the settlement of pre-existing relationships between MBIA UK and Assured Guaranty at a fair value of $5 million

Schedule of unaudited pro forma results of operations

Unaudited Pro Forma Results of Operations

	Year Ended December 31, 2016
	(in millions, except per share amounts)
Pro forma revenues	$	1,849
Pro forma net income	1,005
Pro forma earnings per share (EPS):
Basic	7.55
Diluted	7.49

CIFG Holding Inc. [Member]

Business Acquisition [Line Items]

Schedule of settlement of pre-existing relationships

The following table shows the net effect of the CIFG Acquisition on July 1, 2016, 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		—			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 represents 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 CIFGH and Assured Guaranty at a fair value of $173 million.

Schedule of fair values of assets and liabilities acquired from acquisition

The following table shows the net effect of the CIFG Acquisition on July 1, 2016, 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		—			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 represents 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 CIFGH and Assured Guaranty at a fair value of $173 million.