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Reinsurance (Tables)
 12 Months Ended
Dec. 31, 2019
Insurance [Abstract]  
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.
Ceded Reinsurance
Ceded Reinsurance (1)

 
As of December 31,
 
2019
 
2018
 
(in millions)
Ceded premium payable, net of commissions
$
20

 
$
26

Ceded expected loss to be recovered (paid)
11

 
14

Financial guaranty ceded par outstanding (2)
1,349

 
2,389

Specialty ceded exposure (see Note 5)
303

 
239

____________________
(1)
The total collateral posted by all non-affiliated reinsurers required to post, or that had agreed to post, collateral as of December 31, 2019 and December 31, 2018 was approximately $68 million and $80 million, respectively. Such collateral is posted (i) in the case of certain reinsurers not authorized or "accredited" in the U.S., in order for the Company to receive credit for the liabilities ceded to such reinsurers in statutory financial statements, and (ii) in the case of certain reinsurers authorized in the U.S., on terms negotiated with the Company.
(2)
Of the total par ceded to unrated or BIG rated reinsurers, $224 million and $236 million is rated BIG as of December 31, 2019 and December 31, 2018, respectively.
Net Effect of Commutations and Cancellations of Assumed Reinsurance Contracts
Commutations of Ceded Reinsurance Contracts  

 
Year Ended December 31,
 
2019
 
2018
 
2017
 
(in millions)
Increase in net unearned premium reserve
$
15

 
$
64

 
$
82

Increase in net par outstanding
1,069

 
1,457

 
5,107

Commutation gains (losses)
1

 
(16
)
 
328