
	Third Quarter				Nine Months
	2022		2021		2022		2021
	(in millions)
Financial guaranty insurance:
Scheduled net earned premiums	70		81		$	219	$	242
Accelerations from refundings and terminations (1)	12		8		145		39
Accretion of discount on net premiums receivable	6		13		18		24
Financial guaranty insurance net earned premiums	88		102		382		305
Specialty net earned premiums	1		—		3		2
Net earned premiums	$	89	$	102	$	385	$	307

(1) Nine months 2022 accelerations include $104 million related to the March Puerto Rico Resolutions. See Note 3, Outstanding Exposure for additional information.


	Nine Months
	2022		2021
	(in millions)
Beginning of year	$	1,372	$	1,372
Less: Specialty insurance premium receivable	1		1
Financial guaranty insurance premiums receivable	1,371		1,371
Gross written premiums on new business, net of commissions	232		270
Gross premiums received, net of commissions	(258)		(274)
Adjustments:
Changes in the expected term and debt service assumptions	(5)		6
Accretion of discount, net of commissions on assumed business	18		22
Foreign exchange gain (loss) on remeasurement	(181)		(22)
Expected recovery of premiums previously written off	—		4
Financial guaranty insurance premium receivable (1)	1,177		1,377
Specialty insurance premium receivable	1		1
September 30,	$	1,178	$	1,378

Approximately 76% and 78% of gross premiums receivable, net of commissions payable at September 30, 2022 and December 31, 2021, respectively, are denominated in currencies other than the U.S. dollar, primarily the pound sterling and euro.

The timing and cumulative amount of actual collections and net earned premiums may differ from those of expected collections and of expected net earned premiums in the table below due to factors such as foreign exchange rate fluctuations, counterparty collectability issues, accelerations, commutations, restructurings, changes in the consumer price index, changes in expected lives and new business.


	As of September 30, 2022
	Future Gross Premiums to be Collected (1)		Future Net Premiums to be Earned (2)
	(in millions)
2022 (October 1 - December 31)	$	27	$	71
2023	105		271
2024	82		256
2025	80		240
2026	78		224
2027-2031	328		927
2032-2036	236		650
2037-2041	159		396
After 2041	329		555
Total	$	1,423	3,590
Future accretion			248
Total future net earned premiums			$	3,838


	As of
	September 30, 2022		December 31, 2021
	(dollars in millions)
Premiums receivable, net of commissions payable	$	1,177	$	1,371
Deferred premium revenue	1,618		1,663
Weighted-average risk-free rate used to discount premiums	1.7%		1.6%
Weighted-average period of premiums receivable (in years)	12.9		12.7

Loss reserves and salvage are discounted at risk-free rates for U.S. dollar denominated financial guaranty insurance obligations that ranged from 2.98% to 4.18% with a weighted average of 3.97% as of September 30, 2022 and 0.00% to 1.98% with a weighted average of 1.02% as of December 31, 2021.

The following tables provide information on net reserve (salvage), which includes loss and LAE reserves and salvage and subrogation recoverable, both net of reinsurance.


	As of
Sector	September 30, 2022		December 31, 2021
	(in millions)
Public finance:
U.S. public finance	$	549	$	60
Non-U.S. public finance	1		1
Public finance	550		61
Structured finance:
U.S. RMBS	(96)		(24)
Other structured finance	41		42
Structured finance	(55)		18
Total	$	495	$	79


	As of
	September 30, 2022		December 31, 2021
	(in millions)
Loss and LAE reserve	$	882	$	869
Reinsurance recoverable on unpaid losses (1)	(3)		(5)
Loss and LAE reserve, net	879		864
Salvage and subrogation recoverable	(385)		(801)
Salvage and subrogation reinsurance payable (2)	1		16
Salvage and subrogation recoverable, net	(384)		(785)
Net reserve (salvage)	$	495	$	79

The table below provides a reconciliation of net expected loss to be paid (recovered) for financial guaranty insurance contracts to net expected loss to be expensed. Expected loss to be paid (recovered) for financial guaranty insurance contracts differs from expected loss to be expensed due to: (i) the contra-paid, which represents the claim payments made and recoveries received that have not yet been recognized in the statements of operations; (ii) salvage and subrogation recoverable for transactions that are in a net recovery position where the Company has not yet received recoveries on claims previously paid (and therefore recognized in income but not yet received); and (iii) loss reserves that have already been established (and therefore expensed but not yet paid).


	As of September 30, 2022
	(in millions)
Net expected loss to be paid (recovered) - financial guaranty insurance	$	691
Contra-paid, net	18
Salvage and subrogation recoverable, net	384
Loss and LAE reserve - financial guaranty insurance contracts, net of reinsurance	(875)
Net expected loss to be expensed (present value)	$	218

The following table provides a schedule of the expected timing of net expected losses to be expensed. The amount and timing of actual loss and LAE may differ from the estimates shown below due to factors such as accelerations, commutations, changes in expected lives and updates to loss estimates. This table excludes amounts related to FG VIEs, which are eliminated in consolidation.


	As of September 30, 2022
	(in millions)
2022 (October 1 - December 31)	$	3
2023	16
2024	17
2025	16
2026	20
2027-2031	75
2032-2036	51
2037-2041	11
After 2041	9
Net expected loss to be expensed	218
Future accretion	163
Total expected future loss and LAE	$	381

The following table presents the loss and LAE reported in the condensed consolidated statements of operations by sector for insurance contracts. Amounts presented are net of reinsurance.


	Third Quarter				Nine Months
Sector	2022		2021		2022		2021
	(in millions)
Public finance:
U.S. public finance	$	1	$	(23)	$	67	$	7
Non-U.S. public finance	—		—		—		(9)
Public finance	1		(23)		67		(2)
Structured finance:
U.S. RMBS	(78)		(48)		$	(97)	$	(54)
Other structured finance	2		3		1		2
Structured finance	(76)		(45)		(96)		(52)
Loss and LAE (Benefit)	$	(75)	$	(68)	$	(29)	$	(54)

The primary difference between net economic loss development and the amount reported as “loss and LAE” in the consolidated statements of operations are that loss and LAE (benefit): (1) considers deferred premium revenue in the calculation of loss reserves for financial guaranty insurance contracts; (2) eliminates loss and LAE related to FG VIEs; and (3) does not include estimated losses on credit derivatives. The difference between public finance loss expense and economic benefit in nine months 2022 was primarily attributable to the release of unearned premium reserve associated with extinguished Puerto Rico policies that previously had expected losses.


	Gross								Net Total BIG
	BIG 1		BIG 2		BIG 3		Total BIG
	(dollars in millions)
Number of risks (1)	110		17		117		244		244
Remaining weighted-average period (in years)	11.4		8.9		8.0		9.5		9.6

Outstanding exposure:
Par	$	2,471	$	187	$	3,093	$	5,751	$	5,727
Interest	1,604		70		1,184		2,858		2,854
Total (2)	$	4,075	$	257	$	4,277	$	8,609	$	8,581

Expected cash outflows (inflows)	$	77	$	126	$	3,133	$	3,336	$	3,324
Potential recoveries (3)	(374)		(81)		(2,027)		(2,482)		(2,470)
Subtotal	(297)		45		1,106		854		854
Discount	35		(14)		(184)		(163)		(163)
Expected losses to be paid (recovered)	$	(262)	$	31	$	922	$	691	$	691

Deferred premium revenue	$	110	$	18	$	203	$	331	$	331
Reserves (salvage)	$	(294)	$	22	$	763	$	491	$	491


	Gross								Net Total BIG
	BIG 1		BIG 2		BIG 3		Total BIG
	(dollars in millions)
Number of risks (1)	117		16		129		262		262
Remaining weighted-average period (in years)	7.6		8.9		8.9		8.5		8.5

Outstanding exposure:
Par	$	2,437	$	177	$	4,745	$	7,359	$	7,293
Interest	1,000		36		1,942		2,978		2,962
Total (2)	$	3,437	$	213	$	6,687	$	10,337	$	10,255

Expected cash outflows (inflows)	$	111	$	40	$	4,820	$	4,971	$	4,918
Potential recoveries (3)	(656)		(10)		(3,829)		(4,495)		(4,430)
Subtotal	(545)		30		991		476		488
Discount	19		(3)		(145)		(129)		(129)
Expected losses to be paid (recovered)	$	(526)	$	27	$	846	$	347	$	359

Deferred premium revenue	$	85	$	2	$	350	$	437	$	435
Reserves (salvage)	$	(549)	$	25	$	584	$	60	$	74

(3)Represents expected inflows from future payments by obligors pursuant to restructuring agreements, settlements, excess spread on any underlying collateral and other estimated recoveries. Potential recoveries also include recoveries on certain investment grade credits, related mainly to exposures that were previously BIG and for which claims have been paid in the past.