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Business Combinations and Assumption of Insured Portfolio (Tables)
 12 Months Ended
Dec. 31, 2019
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


Effect of Reinsurance on Statement of Operations

 
Year Ended December 31,
 
2019
 
2018
 
2017
 
(in millions)
Premiums Written:
 
 
 
 
 
Direct
$
663

 
$
288

 
$
297

Assumed
14

 
324

 
10

Ceded (1)
10

 
14

 
18

Net
$
687

 
$
626

 
$
325

Premiums Earned:
 
 
 
 
 
Direct
$
429

 
$
509

 
$
693

Assumed
54

 
51

 
27

Ceded
(7
)
 
(12
)
 
(30
)
Net
$
476

 
$
548

 
$
690

Loss and LAE:
 
 
 
 
 
Direct
$
101

 
$
68

 
$
404

Assumed
2

 
(1
)
 
11

Ceded
(10
)
 
(3
)
 
(27
)
Net
$
93

 
$
64

 
$
388

____________________
(1)
Positive ceded premiums written were due to commutations and changes in expected debt service schedules.
BlueMountain Capital Management, LLC [Member]  
Business Acquisition [Line Items]  
Schedule of fair values of assets and liabilities acquired from acquisition
The following table shows the net effect of the BlueMountain Acquisition on October 1, 2019.

 
 
Net Effect of
BlueMountain Acquisition
 
 
(in millions)
Cash purchase price
 
$
157

 
 
 
Identifiable assets acquired:
 
 
Investment portfolio
 
3

Cash
 
12

Intangible assets (1)
 
79

Other assets (2)
 
59

Total assets
 
153

 
 
 

Liabilities assumed:
 
 
Compensation payable (3)
 
61

Other liabilities
 
52

Total liabilities
 
113

Net assets of BlueMountain
 
40

Goodwill recognized from BlueMountain Acquisition (1)
 
$
117

_____________________
(1)    Presented in goodwill and other intangible assets on the consolidated balance sheets.

(2)
This includes a $5 million reduction of the right-of-use asset for unfavorable lease terms relative to market terms for leases acquired from BlueMountain.
Schedule of unaudited pro forma results of operations
Unaudited Pro Forma Results of Operations (1)

 
Year Ended
December 31, 2019
 
Year Ended
December 31, 2018
 
(dollars in millions)
Pro forma revenues
$
1,079

 
$
1,210

Pro forma net income
358

 
436

Pro forma earnings per share (EPS):
 
 
 
  Basic
3.60

 
3.96

  Diluted
3.57

 
3.92

_____________________
(1)
Pro forma adjustments were made for transaction expenses, amortization of intangible assets and income tax impact related to the BlueMountain Acquisition as if the companies had been combined as of January 1, 2018.
Schedule of Indefinite-lived Intangible Assets Acquired as Part of Business Combination
The following table presents details of the identified intangible assets acquired:

Finite-Lived
Intangible Assets Acquired
 
Fair Value
 
Estimated Weighted Average Useful Life
 
(in millions)
 
 
CLO contracts
$
42

 
9.0 years
Investment management contracts
24

 
4.8 years
CLO distribution network
9

 
5.0 years
Trade name
3

 
10.0 years
Favorable sublease
1

 
4.4 years
Total finite-lived intangible assets, net
$
79

 
MBIA UK [Member]  
Business Acquisition [Line Items]  
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