10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 1-9583

MBIA INC.

(Exact name of registrant as specified in its charter)

Connecticut	06-1185706
(State of incorporation)	(I.R.S. Employer Identification No.)
1 Manhattanville Road, Suite 301, Purchase, New York	10577
(Address of principal executive offices)	(Zip Code)

(914) 273-4545

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ Accelerated filer  ¨ Non-accelerated filer  ¨ Smaller reporting company  ¨

Indicate by check mark whether the Registrant is shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  þ

As of October 29, 2015, 152,955,415 shares of Common Stock, par value $1 per share, were outstanding.

		PAGE
PART I FINANCIAL INFORMATION
Item 1.	Financial Statements MBIA Inc. and Subsidiaries (Unaudited)
	Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014 (Unaudited)		1
	Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014 (Unaudited)		2
	Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and 2014 (Unaudited)		3
	Consolidated Statement of Changes in Shareholders’ Equity for the nine months ended September 30, 2015 (Unaudited)		4
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 (Unaudited)		5
	Notes to Consolidated Financial Statements (Unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		60
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		95
Item 4.	Controls and Procedures		97
PART II OTHER INFORMATION
Item 1.	Legal Proceedings		98
Item 1A.	Risk Factors		98
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		99
Item 5.	Other Information		100
Item 6.	Exhibits		101
SIGNATURES			102

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

This quarterly report of MBIA Inc. (“MBIA”, the “Company”, “we”, “us” or “our”) includes statements that are not historical or current facts and are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe”, “anticipate”, “project”, “plan”, “expect”, “estimate”, “intend”, “will likely result”, “looking forward”, or “will continue” and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. MBIA cautions readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. We undertake no obligation to publicly correct or update any forward-looking statement if the Company later becomes aware that such result is not likely to be achieved.

The following are some of the factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying the Company’s forward-looking statements:

• increased credit losses or impairments on public finance obligations we insure issued by state, local and territorial governments and finance authorities that are experiencing fiscal stress;

• the possibility that MBIA Corp. will have inadequate liquidity or resources to pay claims as a result of higher than expected losses on certain structured finance transactions, or as a result of or a delay or failure in collecting expected recoveries;

• the possibility that loss reserve estimates are not adequate to cover potential claims;

• a disruption in the cash flow from our subsidiaries or an inability to access capital and our exposure to significant fluctuations in liquidity and asset values within the global credit markets as a result of collateral posting requirements;

• our ability to fully implement our strategic plan, including our ability to maintain high stable ratings for National Public Finance Guarantee Corporation and generate investor demand for our financial guarantees;

• deterioration in the economic environment and financial markets in the United States or abroad, and adverse developments in European sovereign credit performance, real estate market performance, credit spreads, interest rates and foreign currency levels;

• the effects of governmental regulation, including insurance laws, securities laws, tax laws, legal precedents and accounting rules; and

• uncertainties that have not been identified at this time.

The above factors provide a summary of and are qualified in their entirety by the risk factors discussed under “Risk Factors” in Part I, Item 1A of MBIA Inc.’s Annual Report on Form 10-K for the year ended December 31, 2014. In addition, refer to “Risk Factors” in Part II, Item 1A and “Note 1: Business Developments and Risks and Uncertainties” in the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a discussion of certain risks and uncertainties related to our financial statements.

This quarterly report of MBIA Inc. also includes statements of the opinion and belief of MBIA management which may be forward-looking statements subject to the preceding cautionary disclosure. Unless otherwise indicated herein, the basis for each statement of opinion or belief of MBIA management in this report is the relevant industry or subject matter experience and views of certain members of MBIA’s management. Accordingly, MBIA cautions readers not to place undue reliance on any such statements, because like all statements of opinion or belief they are not statements of fact and may prove to be incorrect. We undertake no obligation to publicly correct or update any statement of opinion or belief if the Company later becomes aware that such statement of opinion or belief was not or is not then accurate. In addition, readers are cautioned that each statement of opinion or belief may be further qualified by disclosures set forth elsewhere in this report or in other disclosures by MBIA.

PART 1 FINANCIAL INFORMATION

Item 1. Financial Statements

MBIA INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions except share and per share amounts)

	September 30, 2015		December 31, 2014
Assets
Investments:
Fixed-maturity securities held as available-for-sale, at fair value (amortized cost $5,177 and $5,036)	$	5,221	$	5,129
Investments carried at fair value		176		207
Investments pledged as collateral, at fair value (amortized cost $298 and $441)		272		408
Short-term investments held as available-for-sale, at fair value (amortized cost $828 and $1,069)		829		1,069
Other investments (includes investments at fair value of $13 and $13)		16		17
Total investments		6,514		6,830
Cash and cash equivalents		462		729
Premiums receivable		789		875
Deferred acquisition costs		182		217
Insurance loss recoverable		437		533
Assets held for sale		-		802
Deferred income taxes, net		996		1,028
Other assets		198		229
Assets of consolidated variable interest entities:
Cash		30		53
Investments held-to-maturity, at amortized cost (fair value $2,442 and $2,632)		2,707		2,757
Fixed-maturity securities at fair value		985		421
Loans receivable at fair value		1,351		1,431
Loan repurchase commitments		394		379
Derivative assets		6		-
Total assets	$	15,051	$	16,284
Liabilities and Equity
Liabilities:
Unearned premium revenue	$	1,699	$	1,986
Loss and loss adjustment expense reserves		480		506
Long-term debt		1,882		1,810
Medium-term notes (includes financial instruments carried at fair value of $170 and $197)		1,033		1,201
Investment agreements		485		547
Derivative liabilities		339		437
Liabilities held for sale		-		772
Other liabilities		196		271
Liabilities of consolidated variable interest entities:
Variable interest entity notes (includes financial instruments carried at fair value of $2,460 and $2,047)		5,166		4,804
Derivative liabilities		57		-
Total liabilities		11,337		12,334
Commitments and contingencies (See Note 13)
Equity:
Preferred stock, par value $1 per share; authorized shares—10,000,000; issued and outstanding—none		-		-
Common stock, par value $1 per share; authorized shares—400,000,000; issued shares—281,820,698 and 281,352,782		282		281
Additional paid-in capital		3,133		3,128
Retained earnings		2,956		2,858
Accumulated other comprehensive income (loss), net of tax of $23 and $7		(10)		21
Treasury stock, at cost—128,874,339 and 89,409,887 shares		(2,659)		(2,359)
Total shareholders’ equity of MBIA Inc.		3,702		3,929
Preferred stock of subsidiary and noncontrolling interest		12		21
Total equity		3,714		3,950
Total liabilities and equity	$	15,051	$	16,284

The accompanying notes are an integral part of the consolidated financial statements.

1

MBIA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In millions except share and per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Revenues:
Premiums earned:
Scheduled premiums earned	$	47	$	64	$	153	$	196
Refunding premiums earned		37		52		123		97
Premiums earned (net of ceded premiums of $2, $4, $7 and $8)		84		116		276		293
Net investment income		38		44		112		136
Fees and reimbursements		1		17		4		25
Change in fair value of insured derivatives:
Realized gains (losses) and other settlements on insured derivatives		(18)		(24)		(30)		(417)
Unrealized gains (losses) on insured derivatives		21		48		121		863
Net change in fair value of insured derivatives		3		24		91		446
Net gains (losses) on financial instruments at fair value and foreign exchange		(55)		57		20		63
Investment losses related to other-than-temporary impairments:
Investment losses related to other-than-temporary impairments		(1)		(93)		(10)		(93)
Other-than-temporary impairments recognized in accumulated other comprehensive income (loss)		(2)		79		-		79
Net investment losses related to other-than-temporary impairments		(3)		(14)		(10)		(14)
Net gains (losses) on extinguishment of debt		-		-		(1)		3
Other net realized gains (losses)		(1)		30		18		31
Revenues of consolidated variable interest entities:
Net investment income		12		12		37		37
Net gains (losses) on financial instruments at fair value and foreign exchange		13		8		9		34
Net gains (losses) on extinguishment of debt		-		-		-		4
Other net realized gains (losses)		-		(3)		-		(3)
Total revenues		92		291		556		1,055
Expenses:
Losses and loss adjustment		39		20		79		82
Amortization of deferred acquisition costs		11		13		37		31
Operating		35		46		102		141
Interest		49		52		149		158
Expenses of consolidated variable interest entities:
Operating		3		2		10		6
Interest		10		10		29		30
Total expenses		147		143		406		448
Income (loss) before income taxes		(55)		148		150		607
Provision (benefit) for income taxes		(20)		(25)		52		58
Net income (loss)	$	(35)	$	173	$	98	$	549
Net income (loss) per common share:
Basic	$	(0.23)	$	0.90	$	0.56	$	2.83
Diluted	$	(0.23)	$	0.80	$	0.55	$	2.62
Weighted average number of common shares outstanding:
Basic		155,239,723		187,104,785		169,610,370		188,428,870
Diluted		155,239,723		188,424,318		170,566,386		191,616,723

The accompanying notes are an integral part of the consolidated financial statements.

2

MBIA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(In millions)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Net income (loss)	$	(35)	$	173	$	98	$	549
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) arising during the period		51		1		(35)		185
Provision (benefit) for income taxes		19		-		(11)		64
Total		32		1		(24)		121
Reclassification adjustments for (gains) losses included in net income (loss)		6		-		10		15
Provision (benefit) for income taxes		1		-		3		6
Total		5		-		7		9
Available-for-sale securities with other-than-temporary impairments:
Other-than-temporary impairments and unrealized gains (losses) arising during the period		(1)		(79)		(5)		(80)
Provision (benefit) for income taxes		(1)		(28)		(2)		(29)
Total		-		(51)		(3)		(51)
Reclassification adjustments for (gains) losses included in net income (loss)		3		-		3		7
Provision (benefit) for income taxes		1		-		1		2
Total		2		-		2		5
Foreign currency translation:
Foreign currency translation gains (losses)		(18)		(30)		(19)		(23)
Provision (benefit) for income taxes		(5)		(10)		(6)		(7)
Total		(13)		(20)		(13)		(16)
Reclassification adjustments for (gains) losses included in net income (loss)		-		-		-		4
Total other comprehensive income (loss)		26		(70)		(31)		72
Comprehensive income (loss)	$	(9)	$	103	$	67	$	621

The accompanying notes are an integral part of the consolidated financial statements.

3

MBIA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For The Nine Months Ended September 30, 2015

(In millions except share amounts)

	Common Stock				Additional Paid-in		Retained		Accumulated Other Comprehensive		Treasury Stock				Total Shareholders’ Equity		Preferred Stock of Subsidiary and Noncontrolling Interest				Total
	Shares		Amount		Capital		Earnings		Income (Loss)		Shares		Amount		of MBIA Inc.		Shares		Amount		Equity
Balance, December 31, 2014		281,352,782	$	281	$	3,128	$	2,858	$	21		(89,409,887)	$	(2,359)	$	3,929		1,315	$	21	$	3,950
ASU 2015-02 transition adjustment		-		-		-		-		-		-		-		-		-		(9)		(9)
Net income (loss)		-		-		-		98		-		-		-		98		-		-		98
Other comprehensive income (loss)		-		-		-		-		(31)		-		-		(31)		-		-		(31)
Share-based compensation,net of tax of $9		467,916		1		5		-		-		(523,289)		(3)		3		-		-		3
Treasury shares acquired under share repurchase program		-		-		-		-		-		(38,941,163)		(297)		(297)		-		-		(297)
Balance, September 30, 2015		281,820,698	$	282	$	3,133	$	2,956	$	(10)		(128,874,339)	$	(2,659)	$	3,702		1,315	$	12	$	3,714

The accompanying notes are an integral part of the consolidated financial statements.

4

MBIA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)

	Nine Months Ended September 30,
	2015		2014
Cash flows from operating activities:
Premiums, fees and reimbursements received	$	66	$	122
Investment income received		263		317
Errors and omissions insurance recoveries received		-		30
Insured derivative commutations and losses paid		(42)		(401)
Financial guarantee losses and loss adjustment expenses paid		(68)		(181)
Proceeds from recoveries and reinsurance		61		93
Operating and employee related expenses paid		(99)		(198)
Interest paid, net of interest converted to principal		(130)		(136)
Income taxes (paid) received		(9)		4
Net cash provided (used) by operating activities		42		(350)
Cash flows from investing activities:
Purchases of available-for-sale investments		(1,497)		(1,220)
Sales of available-for-sale investments		630		594
Paydowns and maturities of available-for-sale investments		463		379
Purchases of investments at fair value		(324)		(457)
Sales, paydowns and maturities of investments at fair value		447		550
Sales, paydowns and maturities (purchases) of short-term investments, net		582		318
Sales, paydowns and maturities of held-to-maturity investments		50		29
Purchases of loans at fair value		-		(195)
Paydowns and maturities of loans at fair value		172		172
Consolidation of variable interest entities including cash acquired		7		221
Deconsolidation of variable interest entities		-		(1)
(Payments) proceeds for derivative settlements		33		(23)
Collateral (to) from swap counterparty		(64)		99
Capital expenditures		(3)		(9)
Other investing		47		-
Net cash provided (used) by investing activities		543		457
Cash flows from financing activities:
Proceeds from investment agreements		21		23
Principal paydowns of investment agreements		(88)		(72)
Principal paydowns of medium-term notes		(116)		(166)
Principal paydowns of variable interest entity notes		(392)		(516)
Principal paydowns of long-term debt		(11)		-
Purchases of treasury stock		(300)		(23)
Net cash provided (used) by financing activities		(886)		(754)
Effect of exchange rate changes on cash and cash equivalents		11		(5)
Net increase (decrease) in cash and cash equivalents		(290)		(652)
Cash and cash equivalents—beginning of period		782		1,258
Cash and cash equivalents—end of period	$	492	$	606
Reconciliation of net income (loss) to net cash provided (used) by operating activities:
Net income (loss)	$	98	$	549
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Change in:
Premiums receivable		63		92
Deferred acquisition costs		35		30
Unearned premium revenue		(274)		(303)
Loss and loss adjustment expense reserves		(24)		(124)
Insurance loss recoverable		96		119
Accrued interest payable		78		79
Realized (gains) losses and other settlements on insured derivatives		-		30
Unrealized (gains) losses on insured derivatives		(121)		(863)
Net (gains) losses on financial instruments at fair value and foreign exchange		(29)		(97)
Other net realized (gains) losses		(18)		(28)
Deferred income tax provision (benefit)		50		49
Interest on variable interest entities, net		51		56
Other operating		37		61
Total adjustments to net income (loss)		(56)		(899)
Net cash provided (used) by operating activities	$	42	$	(350)

The accompanying notes are an integral part of the consolidated financial statements.

5

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 1: Business Developments and Risks and Uncertainties

Summary

MBIA Inc., together with its consolidated subsidiaries, (collectively, “MBIA” or the “Company”) operates one of the largest financial guarantee insurance businesses in the industry and was a provider of asset management and advisory services. MBIA manages three operating segments: 1) United States (“U.S.”) public finance insurance; 2) international and structured finance insurance; and 3) corporate. The Company’s U.S. public finance insurance business is primarily operated through National Public Finance Guarantee Corporation and its subsidiaries (“National”) and its international and structured finance insurance business is primarily operated through MBIA Insurance Corporation and its subsidiaries (“MBIA Corp.”). Unless otherwise indicated or the context otherwise requires, references to “MBIA Corp.” are to MBIA Insurance Corporation, together with its subsidiaries, MBIA UK Insurance Limited (“MBIA UK”) and MBIA Mexico S.A. de C.V (“MBIA Mexico”).

Prior to 2015, MBIA managed two other operating segments, advisory services and conduit. The advisory services segment was primarily operated through Cutwater Holdings, LLC and its subsidiaries (“Cutwater”). Effective on January 1, 2015, the Company exited its advisory services business through the sale of Cutwater. During the second quarter of 2014, the Company dissolved its conduit segment through the liquidation of Meridian Funding Company, LLC (“Meridian”). Refer to “Note 10: Business Segments” for further information about the Company’s operating segments.

Business Developments

National Ratings and New Business Opportunities

National’s ability to write new business and compete with other financial guarantors is largely dependent on the financial strength ratings assigned to National by major rating agencies. As of September 30, 2015, the major rating agencies affirmed the following ratings of National: AA+ with a stable outlook by Kroll Bond Rating Agency; AA- with a stable outlook by Standard & Poor’s Financial Services LLC (“S&P”); and A3 with a negative outlook by Moody’s Investors Service, Inc. (“Moody’s”).

National seeks to generate shareholder value through appropriate risk adjusted pricing; however, current market conditions and the competitive landscape may limit National’s new business opportunities and its abilities to price and underwrite risk with attractive returns. Refer to “Risks and Uncertainties” below for a discussion of business risks related to National’s insured portfolio.

Sale of MBIA Inc. Common Stock

During the nine months ended September 30, 2015, investment funds affiliated with Warburg Pincus LLC (“Warburg”), the largest holder of MBIA Inc. common stock, sold all of its 45.7 million shares of the Company’s common stock. Warburg received all of the net proceeds from this offering. In connection with this sale, National and the Company repurchased 8 million shares and 7.6 million shares, respectively.

Held For Sale Classifications

Armonk, New York Facility

During the nine months ended September 30, 2015, the Company sold its Armonk, New York facility and recorded an impairment charge of $4 million to adjust the carrying amount to the sale price less costs to sell. The impairment charge was reflected in the results of the Company’s U.S. public finance insurance segment and included in “Other net realized gains (losses)” on the Company’s consolidated statements of operations.

Sale of Cutwater Business

As a result of the agreement to sell Cutwater, the assets and liabilities of Cutwater were classified as held for sale as of December 31, 2014 and presented within “Assets held for sale” and “Liabilities held for sale” on the Company’s consolidated balance sheet and measured at the lower of its carrying value or fair value less costs to sell. The Company completed this sale effective January 1, 2015, and recorded a gain of approximately $24 million. This gain was reflected in the results of the Company’s corporate segment and included in “Other net realized gains (losses)” on the Company’s consolidated statements of operations.

6

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 1: Business Developments and Risks and Uncertainties (continued)

Assets and Liabilities Held for Sale by Major Category

The following table summarizes the components of assets and liabilities held for sale as of December 31, 2014:

In millions	December 31, 2014
Assets
Investments carried at fair value	$	6
Cash and cash equivalents		15
Facility		26
Other assets		4
Assets of consolidated variable interest entities:
Cash		40
Loans receivable at fair value		711
Total assets held for sale	$	802
Liabilities
Other liabilities	$	18
Liabilities of consolidated variable interest entities:
Variable interest entity notes		431
Payable for loans purchased		323
Total liabilities held for sale	$	772

Risks and Uncertainties

The Company’s financial statements include estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The outcome of certain significant risks and uncertainties could cause the Company to revise its estimates and assumptions or could cause actual results to differ from the Company’s estimates. The discussion below highlights the significant risks and uncertainties that could have a material effect on the Company’s financial statements and business objectives in future periods.

U.S. Public Finance Market Conditions

National’s insured portfolio continued to perform satisfactorily against a backdrop of strengthening domestic economic activity. While this trend will generally benefit tax revenues and fees charged for essential municipal services which secure National’s insured bond portfolio, some state and local governments and territory obligors National insures remain under financial and budgetary stress. This could lead to an increase in defaults by such entities on the payment of their obligations and losses or impairments on a greater number of the Company’s insured transactions. The Company monitors and analyzes these situations and other stressed credits closely, and the overall extent and duration of this stress is uncertain.

7

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 1: Business Developments and Risks and Uncertainties (continued)

MBIA Corp. Recoveries and Insured Portfolio

MBIA Corp.’s primary focus is the collection of excess spread and put-back recoveries and the mitigation of MBIA Corp.’s insurance exposures, primarily through commutations of insurance policies. MBIA Corp. may make negotiated settlement payments to counterparties and/or forego its right to all or some termination premiums when it commutes insurance exposures.

The amount and timing of projected collections from excess spread from second-lien residential mortgage-backed securities (“RMBS”) and the put-back recoverable from Credit Suisse Securities (USA) LLC, DLJ Mortgage Capital, Inc., and Select Portfolio Servicing Inc. (collectively, “Credit Suisse”) are uncertain. Further, the remaining insured portfolio, aside from these exposures, could deteriorate and result in additional significant loss reserves and claim payments. Management’s expected liquidity and capital forecasts for MBIA Corp., which include expected put-back recoveries from Credit Suisse and excess spread recoveries, reflect adequate resources to pay claims when due. However, if MBIA Corp. experiences higher than expected claim payments or is unable to terminate the remaining exposures that represent substantial risk to the Company, MBIA Corp. may ultimately have insufficient resources to continue to pay claims, which could cause the New York State Department of Financial Services (“NYSDFS”) to put MBIA Insurance Corporation, exclusive of MBIA UK and MBIA Mexico, into a rehabilitation or liquidation proceeding. Given the separation of MBIA Inc. and MBIA Corp. as distinct legal entities, the absence of any material intercompany lending agreements or cross defaults between the entities, and the lack of reliance by MBIA Inc. on MBIA Corp. for the receipt of dividends, the Company does not believe that a rehabilitation or liquidation proceeding of MBIA Insurance Corporation by NYSDFS would have any significant long-term liquidity impact on MBIA Inc. or result in a liquidation or similar proceeding of MBIA UK or MBIA Mexico. Such a proceeding could have material adverse consequences for MBIA Corp., including the termination of insured credit default swaps (“CDS”) contracts for which counterparties may assert market-based claims, the acceleration of debt obligations issued by affiliates and insured by MBIA Corp., the loss of control of MBIA Insurance Corporation to a rehabilitator or liquidator, and unplanned costs.

Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” for information about MBIA Corp.’s loss reserves and recoveries.

Corporate Liquidity

As of September 30, 2015 and December 31, 2014, the liquidity position of MBIA Inc. was $306 million and $498 million, respectively. The term “liquidity position” refers to cash and liquid assets available for general liquidity purposes. During the nine months ended September 30, 2015, $228 million was released to MBIA Inc. under the MBIA group’s tax sharing agreement (the “Tax Escrow Account”). Subsequent to September 30, 2015, National declared and paid a dividend of $114 million to its ultimate parent, MBIA Inc. Based on the Company’s projections of National’s dividends, payments into the Tax Escrow Account, and other cash inflows, the Company expects that MBIA Inc. will have sufficient cash to satisfy its debt service and general corporate needs. However, MBIA Inc. continues to have liquidity risk which could be triggered by deterioration in the performance of invested assets, interruption of or reduction in dividends received from operating subsidiaries, impaired access to the capital markets, as well as other factors which cannot be anticipated at this time. Furthermore, failure by MBIA Inc. to settle liabilities that are also insured by MBIA Corp. could result in claims on MBIA Corp.

Note 2: Significant Accounting Policies

The Company has disclosed its significant accounting policies in “Note 2: Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The following significant accounting policies provide an update to those included in the Company’s Annual Report on Form 10-K.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual periods. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (U.S.), but in the opinion of management such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company’s consolidated financial position and results of operations. All material intercompany balances and transactions have been eliminated.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. As additional information becomes available or actual amounts become determinable, the recorded estimates are revised and reflected in operating results.

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MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 2. Significant Accounting Policies (continued)

The results of operations for the three and nine months ended September 30, 2015 may not be indicative of the results that may be expected for the year ending December 31, 2015. The December 31, 2014 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP for annual periods. Certain amounts have been reclassified in the prior year’s financial statements to conform to the current presentation. Such reclassifications had no impact on total revenues, expenses, assets, liabilities, shareholders’ equity, operating cash flows, investing cash flows, or financing cash flows for all periods presented.

Note 3: Recent Accounting Pronouncements

Recently Adopted Accounting Standards

Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08)

In April of 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU 2014-08 changes the criteria for determining whether a disposal of a component or group of components of an entity qualifies for discontinued operations presentation and requires new disclosures. ASU 2014-08 amends the definition of discontinued operation to a disposal of components of an entity that represent strategic shifts that have, or will have, a major effect on an entity’s operations and financial results. ASU 2014-08 was effective for interim and annual periods beginning January 1, 2015. The adoption of ASU 2014-08 did not affect the Company’s consolidated financial statements.

Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (ASU 2014-11)

In June of 2014, the FASB issued ASU 2014-11, “Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.” The repurchase agreements and similar transactions guidance is amended by ASU 2014-11 to change the accounting for i.) repurchase-to-maturity transactions to secured borrowing accounting and ii.) linked repurchase financing transactions to secured borrowing accounting. ASU 2014-11 amends disclosure requirements for transfers accounted for as sales, and for repurchase transactions accounted for as secured borrowings. ASU 2014-11 was effective for interim and annual periods beginning January 1, 2015. The adoption of ASU 2014-11 did not affect the Company’s consolidated financial statements.

Consolidation (Topic 810): Amendments to the Consolidation Analysis (ASU 2015-02)

In February of 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” ASU 2015-02 amends the accounting guidance for consolidation of legal entities including consolidated variable interest entities (“VIEs”). ASU 2015-02 eliminates the specialized consolidation model and guidance for limited partnerships, amends the conditions for evaluating whether a fee paid to a decision maker or a service provider represents a variable interest in a VIE, amends the related party guidance for the determination of the primary beneficiary of a VIE, and requires certain investment funds designed as VIEs, except money market funds, to apply the amended consolidation guidance. ASU 2015-02 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted, and is applied on a retrospective or modified retrospective basis. The Company adopted ASU 2015-02 in the second quarter of 2015, and deconsolidated a VIE upon adoption. The adoption of ASU 2015-02 did not materially impact the Company’s consolidated financial statements.

The Company has not adopted any other new accounting pronouncements that had a material impact on its consolidated financial statements.

Recent Accounting Developments

Revenue from Contracts with Customers (Topic 606) (ASU 2014-09) and Deferral of the Effective Date (ASU 2015-14)

In May of 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 amends the accounting guidance for recognizing revenue for the transfer of goods or services from contracts with customers unless those contracts are within the scope of other accounting standards. In August of 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606) — Deferral of the Effective Date.” ASU 2015-14 defers the effective date of ASU 2014-09 to interim and annual periods beginning January 1, 2018, and is applied on a retrospective or modified retrospective basis. The Company is evaluating the impact of adopting ASU 2014-09.

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MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 3: Recent Accounting Pronouncements (continued)

Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (A Consensus of the FASB Emerging Issues Task Force) (ASU 2014-12)

In June of 2014, the FASB issued ASU 2014-12, “Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” ASU 2014-12 requires that a performance target that affects vesting of share-based payment awards and that could be achieved after an employee’s requisite service period be accounted for as a performance condition. ASU 2014-12 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted, and is applied on a prospective basis or retrospective basis. The adoption of ASU 2014-12 is not expected to materially impact the Company’s consolidated financial statements.

Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (ASU 2014-13)

In August of 2014, the FASB issued ASU 2014-13, “Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity.” ASU 2014-13 applies to a consolidated collateralized financing entity defined as a consolidated VIE that holds financial assets and issues beneficial interests in those financial assets that are classified as financial liabilities. The Company may elect to measure the financial assets and the financial liabilities of a consolidated collateralized financing entity using a measurement alternative provided in ASU 2014-13. The measurement alternative requires both the financial assets and the financial liabilities of the consolidated collateralized financing entity to be measured using the more observable of the fair value of the financial assets and the fair value of the financial liabilities with the changes in fair value recognized to earnings. Upon adoption, a reporting entity may apply the measurement alternative to existing consolidated collateralized financing entities. ASU 2014-13 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted. The adoption of ASU 2014-13 is not expected to materially impact the Company’s consolidated financial statements.

Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15)

In August of 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ending December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The adoption of ASU 2014-15 is not expected to materially impact the Company’s consolidated financial statements.

Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03)

In April of 2015, the FASB issued ASU 2015-03, “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires debt issuance costs related to a debt liability measured at amortized cost to be reported in the balance sheet as a direct deduction from the face amount of the debt liability. ASU 2015-03 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted, and is applied on a retrospective basis. The adoption of ASU 2015-03 is not expected to materially impact the Company’s consolidated financial statements.

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MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 4: Variable Interest Entities

Through MBIA’s international and structured finance insurance segment, the Company provides credit protection to issuers of obligations that may involve issuer-sponsored special purpose entities (“SPEs”). An SPE may be considered a VIE to the extent the SPE’s total equity at risk is not sufficient to permit the SPE to finance its activities without additional subordinated financial support or its equity investors lack any one of the following characteristics: (i) the power to direct the activities of the SPE that most significantly impact the entity’s economic performance or (ii) the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity. A holder of a variable interest or interests in a VIE is required to assess whether it has a controlling financial interest, and thus is required to consolidate the entity as primary beneficiary. An assessment of a controlling financial interest identifies the primary beneficiary as the variable interest holder that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. An ongoing reassessment of controlling financial interest is required to be performed based on any substantive changes in facts and circumstances involving the VIE and its variable interests.

The Company evaluates issuer-sponsored SPEs initially to determine if an entity is a VIE, and is required to reconsider its initial determination if certain events occur. For all entities determined to be VIEs, MBIA performs an ongoing reassessment to determine whether its guarantee to provide credit protection on obligations issued by VIEs provides the Company with a controlling financial interest. Based on its ongoing reassessment of controlling financial interest, the Company determines whether a VIE is required to be consolidated or deconsolidated.

The Company makes its determination for consolidation based on a qualitative assessment of the purpose and design of a VIE, the terms and characteristics of variable interests of an entity, and the risks a VIE is designed to create and pass through to holders of variable interests. The Company generally provides credit protection on obligations issued by VIEs, and holds certain contractual rights according to the purpose and design of a VIE. The Company may have the ability to direct certain activities of a VIE depending on facts and circumstances, including the occurrence of certain contingent events, and these activities may be considered the activities of a VIE that most significantly impact the entity’s economic performance. The Company generally considers its guarantee of principal and interest payments of insured obligations, given nonperformance by a VIE, to be an obligation to absorb losses of the entity that could potentially be significant to the VIE. At the time the Company determines it has the ability to direct the activities of a VIE that most significantly impact the economic performance of the entity based on facts and circumstances, MBIA is deemed to have a controlling financial interest in the VIE and is required to consolidate the entity as primary beneficiary. The Company performs an ongoing reassessment of controlling financial interest that may result in consolidation or deconsolidation of any VIE.

The Company’s advisory services segment provided asset management and advisory services to VIEs. During 2014, the Company consolidated three VIEs as the primary beneficiary, pursuant to this segment’s activities. As of December 31, 2014, the Company held approximately $4 million of the subordinated notes issued by one of the VIEs. The Company had no obligation or commitment to provide additional financial support or liquidity to these VIEs. Effective January 1, 2015, the Company completed the sale of its Cutwater business and deconsolidated these VIEs. Refer to “Note 1: Business Developments and Risks and Uncertainties” for additional information about the sale of Cutwater.

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MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 4: Variable Interest Entities (continued)

Nonconsolidated VIEs

Insurance

The following tables present the total assets of nonconsolidated VIEs in which the Company holds a variable interest as of September 30, 2015 and December 31, 2014, through its insurance operations. The following tables also present the Company’s maximum exposure to loss for nonconsolidated VIEs and carrying values of the assets and liabilities for its interests in these VIEs as of September 30, 2015 and December 31, 2014. The Company has aggregated nonconsolidated VIEs based on the underlying credit exposure of the insured obligation. The nature of the Company’s variable interests in nonconsolidated VIEs is related to financial guarantees, insured CDS contracts and any investments in obligations issued by nonconsolidated VIEs.

	September 30, 2015
					Carrying Value of Assets						Carrying Value of Liabilities
	VIE		Maximum Exposure				Premiums		Insurance Loss		Unearned Premium		Loss and Loss Adjustment Expense		Derivative
In millions	Assets		to Loss		Investments(1)		Receivable(2)		Recoverable(3)		Revenue(4)		Reserves(5)		Liabilities(6)
Insurance:
Global structured finance:
Collateralized debt obligations	$	6,666	$	3,853	$	90	$	14	$	-	$	10	$	108	$	17
Mortgage-backed residential		12,130		6,436		24		33		426		32		275		-
Mortgage-backed commercial		329		233		-		1		-		1		-		-
Consumer asset-backed		5,706		1,778		-		14		-		12		8		-
Corporate asset-backed		5,310		3,629		-		29		6		34		-		-
Total global structured finance		30,141		15,929		114		91		432		89		391		17
Global public finance		44,801		15,373		-		164		-		194		-		-
Total insurance	$	74,942	$	31,302	$	114	$	255	$	432	$	283	$	391	$	17

(1) - Reported within “Investments” on MBIA’s consolidated balance sheets.

(2) - Reported within “Premiums receivable” on MBIA’s consolidated balance sheets.

(3) - Reported within “Insurance loss recoverable” on MBIA’s consolidated balance sheets.

(4) - Reported within “Unearned premium revenue” on MBIA’s consolidated balance sheets.

(5) - Reported within “Loss and loss adjustment expense reserves” on MBIA’s consolidated balance sheets.

(6) - Reported within “Derivative liabilities” on MBIA’s consolidated balance sheets.

	December 31, 2014
					Carrying Value of Assets						Carrying Value of Liabilities
	VIE		Maximum Exposure				Premiums		Insurance Loss		Unearned Premium		Loss and Loss Adjustment Expense		Derivative
In millions	Assets		to Loss		Investments(1)		Receivable(2)		Recoverable(3)		Revenue(4)		Reserves(5)		Liabilities(6)
Insurance:
Global structured finance:
Collateralized debt obligations	$	8,613	$	5,623	$	110	$	24	$	-	$	20	$	70	$	102
Mortgage-backed residential		14,136		7,459		9		41		518		39		307		-
Mortgage-backed commercial		571		279		-		1		-		1		-		-
Consumer asset-backed		6,008		1,989		-		16		-		14		12		-
Corporate asset-backed		6,612		4,608		-		41		6		47		-		-
Total global structured finance		35,940		19,958		119		123		524		121		389		102
Global public finance		49,686		16,698		-		179		-		211		-		-
Total insurance	$	85,626	$	36,656	$	119	$	302	$	524	$	332	$	389	$	102

(1) - Reported within “Investments” on MBIA’s consolidated balance sheets.

(2) - Reported within “Premiums receivable” on MBIA’s consolidated balance sheets.

(3) - Reported within “Insurance loss recoverable” on MBIA’s consolidated balance sheets.

(4) - Reported within “Unearned premium revenue” on MBIA’s consolidated balance sheets.

(5) - Reported within “Loss and loss adjustment expense reserves” on MBIA’s consolidated balance sheets.

(6) - Reported within “Derivative liabilities” on MBIA’s consolidated balance sheets.

The maximum exposure to loss as a result of MBIA’s variable interests in VIEs is represented by insurance in force. Insurance in force is the maximum future payments of principal and interest which may be required under commitments to make payments on insured obligations issued by nonconsolidated VIEs.

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MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 4: Variable Interest Entities (continued)

Consolidated VIEs

The carrying amounts of assets and liabilities of consolidated VIEs were $5.5 billion and $5.2 billion, respectively, as of September 30, 2015, and $5.0 billion and $4.8 billion, respectively, as of December 31, 2014. The carrying amounts of assets and liabilities are presented separately in “Assets of consolidated variable interest entities” and “Liabilities of consolidated variable interest entities” on the Company’s consolidated balance sheets. The carrying amounts of assets and liabilities of consolidated VIEs in the Company’s advisory services segment were $751 million and $754 million, respectively, as of December 31, 2014, and are presented separately in “Assets held for sale” and “Liabilities held for sale” on the Company’s consolidated balance sheets. VIEs are consolidated or deconsolidated based on an ongoing reassessment of controlling financial interest, when events occur or circumstances arise, and whether the ability to exercise rights that constitute power to direct activities of any VIEs are present according to the design and characteristics of these entities. One additional VIE was consolidated during the nine months ended September 30, 2015 and one additional VIE was consolidated during the nine months ended September 30, 2014.

Holders of insured obligations of issuer-sponsored VIEs related to the Company’s international and structured finance insurance segment do not have recourse to the general assets of MBIA. In the event of nonpayment of an insured obligation issued by a consolidated VIE, the Company is obligated to pay principal and interest, when due, on the respective insured obligation only. The Company’s exposure to consolidated VIEs is limited to the credit protection provided on insured obligations and any additional variable interests held by MBIA.

Note 5: Loss and Loss Adjustment Expense Reserves

Loss and Loss Adjustment Expense Process

U.S. Public Finance Insurance

U.S. public finance insured transactions consist of municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, student loan issuers, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. The Company estimates future losses by using probability-weighted scenarios that are customized to each insured transaction. Future loss estimates consider debt service due for each insured transaction, which includes par outstanding and interest due.

As of September 30, 2015 and December 31, 2014, the Company established loss and loss adjustment expense (“LAE”) reserves totaling $31 million and $45 million, respectively, related to U.S. public finance issues. As of December 31, 2014, the Company established insurance loss recoverable of $4 million related to U.S. public finance issues.

Certain local governments remain under financial and budgetary stress and a few have filed for protection under the United States Bankruptcy Code, or have entered into state statutory proceedings established to assist municipalities in managing through periods of severe fiscal stress. This could lead to an increase in defaults by such entities on the payment of their obligations and losses or impairments on a greater number of the Company’s insured transactions. The Company monitors and analyzes these situations closely, however, the overall extent and duration of such events are uncertain and the filing for protection under the United States Bankruptcy Code or entering state statutory proceedings does not necessarily result in a default or indicate that an ultimate loss will occur. As of September 30, 2015 and December 31, 2014, the Company had $76.6 billion and $98.9 billion, respectively, of gross par outstanding on general obligations, of which $79 million and $152 million, respectively, were reflected on the Company’s “Classified List.” Capital appreciation bonds are reported at the par amount at the time of issuance of the insurance policy. Refer to “Note 6: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for additional information on the Company’s surveillance categories.

13

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 5: Loss and Loss Adjustment Expense Reserves (continued)

International and Structured Finance Insurance

The international and structured finance insurance segment’s case basis reserves and insurance loss recoveries recorded in accordance with GAAP do not include estimates for policies insuring credit derivatives or losses and recoveries on financial guarantee VIEs that are eliminated in consolidation. Policies insuring credit derivative contracts are accounted for as derivatives and are carried at fair value in the Company’s consolidated financial statements under GAAP. The fair values of insured derivative contracts are influenced by a variety of market and transaction-specific factors that may be unrelated to potential future claim payments under the Company’s insurance policies. In the absence of credit impairments on insured derivative contracts or the early termination of such contracts at a loss, the cumulative unrealized losses recorded from these contracts should reverse before or at the maturity of the contracts. Since the Company’s insured credit derivatives have similar terms, conditions, risks, and economic profiles to its financial guarantee insurance policies, the Company evaluates them for impairment in the same way that it estimates loss and LAE for its financial guarantee policies. Refer to “Note 8: Derivative Instruments” for a further discussion of the Company’s use of derivatives and their impact on the Company’s consolidated financial statements.

RMBS Case Basis Reserves and Recoveries (Financial Guarantees)

The Company’s RMBS reserves and recoveries relate to financial guarantee insurance policies. The Company calculated RMBS case basis reserves as of September 30, 2015 for both second and first-lien RMBS transactions using a process called the “Roll Rate Methodology.” The Roll Rate Methodology is a multi-step process using a database of loan level information, a proprietary internal cash flow model, and a commercially available model to estimate potential losses and recoveries on insured bonds. “Roll Rate” is defined as the probability that current loans become delinquent and that loans in the delinquent pipeline are charged-off or liquidated. Generally, Roll Rates are calculated for the previous three months and averaged. The loss reserve estimates are based on a probability-weighted average of three scenarios of loan losses (base case, stress case, and an additional stress case).

In calculating ultimate cumulative losses for RMBS, the Company estimates the amount of second-lien loans that are expected to be charged-off (deemed uncollectible by servicers of the transactions) or first-lien loans liquidated in the future. Refer to “Note 6: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for additional information on the Company’s second and first-lien Roll Rate Methodology.

Second-lien RMBS Reserves

The Company’s second-lien RMBS case basis reserves as of September 30, 2015 relate to RMBS backed by home equity lines of credit (“HELOC”) and closed-end second mortgages (“CES”). As of September 30, 2015 and December 31, 2014, the Company established loss and LAE reserves totaling $47 million and $70 million, respectively, related to second-lien RMBS issues after the elimination of $22 million and $21 million, respectively, as a result of consolidating VIEs.

The Company monitors portfolio performance on a monthly basis against projected performance, reviewing delinquencies, Roll Rates, and prepayment rates (including voluntary and involuntary). However, loan performance remains difficult to predict and losses may exceed expectations. In the event of a material deviation in actual performance from projected performance, the Company would increase or decrease the case basis reserves accordingly. If actual performance were to remain at the current levels for six additional months compared to the probability-weighted outcome currently used by the Company, the addition to the case basis reserves would be approximately $32 million.

Second-lien RMBS Recoveries

The Company primarily records two types of recoveries related to insured second-lien RMBS exposures: excess spread that is generated from performing loans in the insured transactions; and “put-back” claims related to those mortgage loans whose inclusion in insured securitizations failed to comply with representations and warranties (“ineligible loans”).

Excess Spread

As of September 30, 2015 and December 31, 2014, the Company recorded estimated recoveries of $411 million and $523 million, respectively, for the reimbursement of past and future expected claims through excess spread in insured second-lien RMBS transactions after the elimination of $99 million and $137 million, respectively, as a result of consolidating VIEs. As of September 30, 2015, $398 million and $13 million were included in “Insurance loss recoverable” and “Loss and loss adjustment expense reserves” on the Company’s consolidated balance sheets, respectively, after the elimination of $96 million and $3 million, respectively, as a result of consolidating VIEs. As of December 31, 2014, $496 million and $27 million were included in “Insurance loss recoverable” and “Loss and loss adjustment expense reserves” on the Company’s consolidated balance sheets, respectively, after the elimination of $132 million and $5 million, respectively, as a result of consolidating VIEs.

14

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 5: Loss and Loss Adjustment Expense Reserves (continued)

Excess spread is generated by performing loans within insured second-lien RMBS securitizations and is the difference between interest inflows on mortgage loan collateral and interest outflows on insured beneficial interests. The amount of excess spread depends on the future loss trends (which include future delinquency trends, average time to charge-off delinquent loans, and the availability of pool mortgage insurance), the future spread between Prime and London Interbank Offered Rate interest rates, and borrower refinancing behavior which results in voluntary prepayments. Minor deviations in loss trends and voluntary prepayments may substantially impact the amounts collected from excess spread.

Ineligible Mortgage Loans

To date, MBIA has settled the majority of the Company’s put-back claims. Only its claims against Credit Suisse remain outstanding. Settlement amounts have been consistent with the put-back recoveries previously included in the Company’s financial statements.

The contract claim remaining with Credit Suisse is related to the inclusion of ineligible mortgage loans in the 2007-2 Home Equity Mortgage Trust securitization. Credit Suisse has challenged the Company’s assessment of the ineligibility of individual mortgage loans and the dispute is the subject of litigation for which there is no assurance that the Company will prevail.

As of September 30, 2015 and December 31, 2014, the Company recorded estimated recoveries of $394 million and $379 million, respectively, related to its Credit Suisse put-back claims, reflected in “Loan repurchase commitments” presented under the heading “Assets of consolidated variable interest entities” on the Company’s consolidated balance sheets.

Based on the Company’s assessment of the strength of its contractual put-back rights against Credit Suisse, which it is pursuing through litigation claims, as well as on its prior settlements with other sellers/servicers and success of other monolines in litigation against other sellers/servicers, the Company believes it will prevail in enforcing its contractual rights and that it is entitled to collect the full amount of its incurred losses, which totaled $424 million through September 30, 2015. The Company is also entitled to collect interest on amounts paid; it believes that in context of its put-back litigation, the appropriate rate should be the New York State statutory rate. However, the Company currently calculates its put-back recoveries using the contractual interest rate, which is lower than the New York State statutory rate.

Notwithstanding the foregoing, uncertainty remains with respect to the ultimate outcome of the litigation with Credit Suisse, which is contemplated in the scenario based-modeling the Company uses. The Credit Suisse recovery scenarios are based on the amount of incurred losses measured against certain probabilities of ultimate resolution of the dispute with Credit Suisse. Most of the probability weight is assigned to partial recovery scenarios and are discounted using the current risk-free discount rates associated with the underlying transaction’s cash flows.

The Company continues to consider all relevant facts and circumstances in developing its assumptions on expected cash inflows, probability of potential recoveries (including the outcome of litigation) and recovery period. The estimated amount and likelihood of potential recoveries are expected to be revised and supplemented to the extent there are developments in the pending litigation and/or changes to the financial condition of Credit Suisse. While the Company believes it will be successful in realizing its recoveries from its contract claims against Credit Suisse, the ultimate amounts recovered may be materially different from those recorded by the Company given the inherent uncertainty of the manner of resolving the claims (e.g., litigation) and the assumptions used in the required estimation process for accounting purposes which are based, in part, on judgments and other information that are not easily corroborated by historical data or other relevant benchmarks.

First-lien RMBS Reserves

The Company’s first-lien RMBS case basis reserves as of September 30, 2015, which primarily relate to RMBS backed by alternative A-paper and subprime mortgage loans, were determined using the Roll Rate Methodology. As of September 30, 2015 and December 31, 2014, the Company’s loss and LAE reserves were $246 million and $263 million, respectively, related to first-lien RMBS issues.

CDO Reserves

The Company also has loss and LAE reserves on certain transactions within its collateralized debt obligation (“CDO”) portfolio, including its multi-sector CDO and high-yield corporate CDO asset classes. MBIA’s insured multi-sector CDOs are transactions that include a variety of collateral ranging from corporate bonds to structured finance assets (which includes but are not limited to RMBS-related collateral, multi-sector and corporate CDOs). These transactions were insured as either financial guarantee insurance policies or credit derivatives with the majority currently insured in the form of financial guarantees. MBIA’s high yield corporate CDO portfolio comprises middle-market/special-opportunity corporate loan transactions. These transactions were insured as financial guarantee insurance policies.

15

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 5: Loss and Loss Adjustment Expense Reserves (continued)

As of September 30, 2015 and December 31, 2014, the Company’s loss and LAE reserves were $149 million and $111 million, respectively, related to the total CDO financial guarantee insurance portfolio after the elimination of $226 million and $225 million, respectively, as a result of consolidating VIEs. For the three and nine months ended September 30, 2015, the Company incurred $5 million and $39 million, respectively, of losses and LAE recorded in earnings related to the total CDO financial guarantee insurance portfolio after the elimination of $14 million and $1 million, respectively, of expense as a result of consolidating VIEs. In the event of further deteriorating performance of the collateral referenced or held in the total CDO portfolio, the amount of losses estimated by the Company could increase substantially.

Refer to “Note 6: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for additional information on the Company’s process for estimating reserves on these policies. The methods and assumptions for estimating reserves require substantial judgment of the future performance of each transaction. Actual losses will be a function of the proportion of collateral in the pools that default and the loss severities associated with those defaults.

Loss and LAE Activity

Financial Guarantee Insurance Losses (Excluding Derivative and Consolidated VIEs)

The Company’s financial guarantee insurance losses and LAE, net of reinsurance for the three and nine months ended September 30, 2015 and 2014 are presented in the following table:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
U.S. Public Finance Insurance Segment	$	(7)	$	(8)	$	(5)	$	(5)
International and Structured Finance Insurance Segment:
Second-lien RMBS		24		16		52		88
First-lien RMBS		18		12		2		39
Other(1)		4		-		30		(40)
Losses and LAE expense (benefit)	$	39	$	20	$	79	$	82

(1) - Includes CDOs, non-U.S. public finance and other issues.

For the three months ended September 30, 2015, losses and LAE primarily related to decreases in projected collections from excess spread within the insured second-lien RMBS securitizations and increases in expected payments on first-lien RMBS securitizations.

For the three months ended September 30, 2014, losses and LAE primarily related to decreases of expected recoveries on an international road transaction and projected collections from excess spread within insured second-lien RMBS securitizations, partially offset by decreases in expected payments on an international road transaction.

For the nine months ended September 30, 2015, losses and LAE primarily related to decreases in projected collections from excess spread within the insured second-lien RMBS securitizations and increases in expected payments on CDOs.

For the nine months ended September 30, 2014, losses and LAE primarily related to decreases in projected collections from excess spread within the insured second-lien RMBS securitizations, partially offset by decreases in expected payments of an international road transaction.

Costs associated with remediating insured obligations assigned to the Company’s surveillance categories are recorded as LAE and included in “Losses and loss adjustment” expenses on the Company’s consolidated statements of operations. For the three months ended September 30, 2015 and 2014, gross LAE related to remediating insured obligations were $5 million and $3 million, respectively. For the nine months ended September 30, 2015 and 2014, gross LAE related to remediating insured obligations were $10 million and $37 million, respectively.

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MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 5: Loss and Loss Adjustment Expense Reserves (continued)

The following table provides information about the financial guarantees and related claim liability included in each of MBIA’s surveillance categories as of September 30, 2015:

	Surveillance Categories
	Caution		Caution		Caution
	List		List		List		Classified
$ in millions	Low		Medium		High		List		Total
Number of policies		156		19		76		166		417
Number of issues(1)		15		6		6		116		143
Remaining weighted average contract period (in years)		7.0		8.2		14.5		6.8		7.6
Gross insured contractual payments outstanding:(2)
Principal	$	4,566	$	250	$	1,213	$	6,712	$	12,741
Interest		3,451		113		847		2,547		6,958
Total	$	8,017	$	363	$	2,060	$	9,259	$	19,699
Gross Claim Liability	$	-	$	-	$	-	$	876	$	876
Less:
Gross Potential Recoveries		-		-		-		755		755
Discount, net(3)		-		-		-		79		79
Net claim liability (recoverable)	$	-	$	-	$	-	$	42	$	42
Unearned premium revenue	$	69	$	2	$	26	$	60	$	157

(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.

(2) - Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.

(3) - Represents discount related to Gross Claim Liability and Gross Potential Recoveries.

The following table provides information about the financial guarantees and related claim liability included in each of MBIA’s surveillance categories as of December 31, 2014:

	Surveillance Categories
	Caution		Caution		Caution
	List		List		List		Classified
$ in millions	Low		Medium		High		List		Total
Number of policies		38		98		4		175		315
Number of issues(1)		18		7		3		119		147
Remaining weighted average contract period (in years)		7.2		12.0		10.1		7.0		7.7
Gross insured contractual payments outstanding:(2)
Principal	$	1,757	$	1,372	$	133	$	8,001	$	11,263
Interest		696		819		68		3,037		4,620
Total	$	2,453	$	2,191	$	201	$	11,038	$	15,883
Gross Claim Liability	$	-	$	-	$	-	$	850	$	850
Less:
Gross Potential Recoveries		-		-		-		860		860
Discount, net(3)		-		-		-		14		14
Net claim liability (recoverable)	$	-	$	-	$	-	$	(24)	$	(24)
Unearned premium revenue	$	63	$	19	$	5	$	80	$	167

(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.

(2) - Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.

(3) - Represents discount related to Gross Claim Liability and Gross Potential Recoveries.

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MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 5: Loss and Loss Adjustment Expense Reserves (continued)

The gross claim liability in the preceding tables represents the Company’s estimate of undiscounted probability-weighted future claim payments. As of September 30, 2015, the gross claim liability primarily related to insured first-lien RMBS issues and CDOs. As of December 31, 2014, the gross claim liability primarily related to insured first and second-lien RMBS issues, CDOs and an international road transaction.

The gross potential recoveries represent the Company’s estimate of undiscounted probability-weighted recoveries of actual claim payments and recoveries of estimated future claim payments. As of September 30, 2015, the gross potential recoveries principally related to insured second-lien RMBS. As of December 31, 2014, the gross potential recoveries principally related to insured second-lien RMBS and U.S. public finance issues. The Company’s recoveries have been, and remain based on either salvage rights, the rights conferred to MBIA through the transactional documents (inclusive of the insurance agreement), or subrogation rights embedded within financial guarantee insurance policies. Expected salvage and subrogation recoveries, as well as recoveries from other remediation efforts, reduce the Company’s claim liability. Once a claim payment has been made, the claim liability has been satisfied and MBIA’s right to recovery is no longer considered an offset to future expected claim payments, it is recorded as a salvage asset. The amount of recoveries recorded by the Company is limited to paid claims plus the present value of projected future claim payments. As claim payments are made, the recorded amount of potential recoveries may exceed the remaining amount of the claim liability for a given policy. The gross claim liability and gross potential recoveries reflect the elimination of claim liabilities and potential recoveries related to VIEs consolidated by the Company.

The following table presents the components of the Company’s loss and LAE reserves and insurance loss recoverable as reported on the Company’s consolidated balance sheets as of September 30, 2015 and December 31, 2014 for insured obligations within MBIA’s “Classified List.” The loss reserves (claim liability) and insurance claim loss recoverable included in the following table represent the present value of the probability-weighted future claim payments and recoveries reported in the preceding tables.

	As of		As of
In millions	September 30, 2015		December 31, 2014
Loss reserves (claim liability)	$	447	$	464
LAE reserves		33		42
Loss and LAE reserves	$	480	$	506
Insurance claim loss recoverable	$	(437)	$	(533)
LAE insurance loss recoverable		-		-
Insurance loss recoverable	$	(437)	$	(533)
Reinsurance recoverable on unpaid losses	$	6	$	6
Reinsurance recoverable on unpaid LAE reserves		-		1
Reinsurance recoverable on paid and unpaid losses	$	6	$	7

As of September 30, 2015, loss and LAE reserves include $700 million of reserves for expected future payments, partially offset by expected recoveries of such future payments of $220 million. As of December 31, 2014, loss and LAE reserves include $653 million of reserves for expected future payments, partially offset by expected recoveries of such future payments of $147 million.

As of September 30, 2015 and December 31, 2014, the insurance loss recoverable primarily related to expected future recoveries on second-lien RMBS transactions resulting from excess spread generated by performing loans in such transactions. The decrease in insurance loss recoverable was primarily due to actual collections from excess spread within insured second-lien RMBS securitizations.

The following table presents changes in the Company’s loss and LAE reserves for the nine months ended September 30, 2015. Changes in loss and LAE reserves attributable to the accretion of the claim liability discount, changes in discount rates, changes in amount and timing of estimated payments and recoveries, changes in assumptions and changes in LAE reserves are recorded in “Losses and loss adjustment” expenses in the Company’s consolidated statements of operations. As of September 30, 2015, the weighted average risk-free rate used to discount the Company’s loss reserves (claim liability) was 1.56%. LAE reserves are generally expected to be settled within a one-year period and are not discounted.

In millions		Changes in Loss and LAE Reserves for the Nine Months Ended September 30, 2015
Gross Loss and LAE Reserves as of December 31, 2014		Loss Payments for Cases with Reserves		Accretion of Claim Liability Discount		Changes in Discount Rates		Changes in Assumptions		Changes in Unearned Premium Revenue		Changes in LAE Reserves		Other(1)		Gross Loss and LAE Reserves as of September 30, 2015
$	506	$	(42)	$	6	$	(28)	$	46	$	13	$	(9)	$	(12)	$	480

(1) - Primarily changes in amount and timing of payments.

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MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 5: Loss and Loss Adjustment Expense Reserves (continued)

The decrease in the Company’s gross loss and LAE reserves reflected in the preceding table was primarily related to actual loss payments associated with first and second-lien RMBS issues and changes in discount rates on U.S. public finance issues. These were partially offset by changes in assumptions on U.S. public finance issues and changes in timing of payments on insured first and second-lien RMBS issues.

Current period changes in the Company’s estimate of potential recoveries may be recorded as an insurance loss recoverable asset, netted against the gross loss and LAE reserve liability, or both. The following table presents changes in the Company’s insurance loss recoverable and changes in recoveries on unpaid losses reported within the Company’s claim liability for the nine months ended September 30, 2015. Changes in insurance loss recoverable attributable to the accretion of the discount on the recoverable, changes in discount rates, changes in amount and timing of estimated collections, changes in assumptions and changes in LAE recoveries are recorded in “Losses and loss adjustment” expenses in the Company’s consolidated statements of operations.

			Changes in Insurance Loss Recoverable and Recoveries on Unpaid Losses for the Nine Months Ended September 30, 2015
In millions	As of December 31, 2014		Collections for Cases with Recoveries		Accretion of Recoveries		Changes in Discount Rates		Changes in Assumptions		Changes in LAE Recoveries		Other(1)		As of September 30, 2015
Insurance loss recoverable	$	533	$	(56)	$	6	$	6	$	(24)	$	-	$	(28)	$	437
Recoveries on unpaid losses		147		-		2		1		71		(1)		-		220
Total	$	680	$	(56)	$	8	$	7	$	47	$	(1)	$	(28)	$	657

(1) - Primarily changes in amount and timing of collections.

The decrease in the Company’s insurance loss recoverable and recoveries on unpaid losses during 2015 was primarily due to changes in assumptions on first and second-lien RMBS issues and an international road transaction, actual collections associated with first and second-lien RMBS issues and changes in the amount of expected collections on first and second-lien RMBS issues. These were partially offset by changes in assumptions on CDOs.

Note 6: Fair Value of Financial Instruments

Fair Value Measurement

Fair value is a market-based measurement considered from the perspective of a market participant. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those which it believes market participants would use in pricing an asset or liability at the measurement date. The fair value measurement of financial instruments held or issued by the Company are determined through the use of observable market data when available. Market data is obtained from a variety of third-party sources, including dealer quotes. If dealer quotes are not available for an instrument that is infrequently traded, the Company uses alternate valuation methods, including either dealer quotes for similar instruments or modeling using market data inputs. The use of alternate valuation methods generally requires considerable judgment in the application of estimates and assumptions and changes to such estimates and assumptions may produce materially different fair values.

The accounting guidance for fair value measurement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available and reliable. Observable inputs are those the Company believes that market participants would use in pricing an asset or liability based on available market data. Unobservable inputs are those that reflect the Company’s beliefs about the assumptions market participants would use in pricing an asset or liability based on available information. The fair value hierarchy is categorized into three levels based on the observability and reliability of inputs, as follows:

• Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company can access. Valuations are based on quoted prices that are readily and regularly available in an active market, with significant trading volumes.

• Level 2—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 2 assets include debt securities with quoted prices that are traded less frequently than exchange-traded instruments, securities which are priced using observable inputs and derivative contracts whose values are determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

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MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

• Level 3—Valuations based on inputs that are unobservable and supported by little or no market activity and that are significant to the overall fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques where significant inputs are unobservable, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The availability of observable inputs can vary from financial instrument to financial instrument and period to period and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, and other characteristics particular to the product. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company assigns the level in the fair value hierarchy for which the fair value measurement in its entirety falls, based on the least observable input that is significant to the fair value measurement.

Financial Assets (excluding derivative assets)

Financial assets, excluding derivative assets, held by the Company primarily consist of investments in debt securities. Substantially all of the Company’s investments are priced by independent third parties, including pricing services and brokers. Typically, the Company receives one pricing service value or broker quote for each instrument, which represents a non-binding indication of value. The Company reviews the assumptions, inputs and methodologies used by pricing services and brokers to obtain reasonable assurance that the prices used in its valuations reflect fair value. When the Company believes a third-party quotation differs significantly from its internally developed expectation of fair value, whether higher or lower, the Company reviews its data or assumptions with the provider. This review includes comparing significant assumptions such as prepayment speeds, default ratios, forward yield curves, credit spreads and other significant quantitative inputs to internal assumptions, and working with the price provider to reconcile the differences. The price provider may subsequently provide an updated price. In the event that the price provider does not update its price, and the Company still does not agree with the price provided, the Company will obtain a price from another third-party provider or use an internally developed price which it believes represents the fair value of the investment. The fair values of investments for which internal prices were used were not significant to the aggregate fair value of the Company’s investment portfolio as of September 30, 2015 or December 31, 2014. All challenges to third-party prices are reviewed by staff of the Company with relevant expertise to ensure reasonableness of assumptions.

Financial Liabilities (excluding derivative liabilities)

Financial liabilities, excluding derivative liabilities, issued by the Company primarily consist of debt issued for general corporate purposes within its corporate segment, medium-term notes (“MTNs”), investment agreements, debt issued by consolidated VIEs and warrants. Investment agreements, MTNs, and corporate debt are typically recorded at face value adjusted for premiums or discounts. The majority of the financial liabilities that the Company has elected to fair value or that require fair value reporting or disclosures are valued based on the estimated value of the underlying collateral, the Company’s or a third-party’s estimate of discounted cash flow model estimates, or quoted market values for similar products. These valuations include adjustments for expected nonperformance risk of the Company.

Derivative Liabilities

The Company’s derivative liabilities are primarily insured credit derivatives that reference structured pools of cash securities and CDS. The Company generally insured the most senior liabilities of such transactions, and at the inception of transactions its exposure generally had more subordination than needed to achieve triple-A ratings from credit rating agencies. The types of collateral underlying its insured derivatives consist of cash securities and CDS referencing primarily corporate obligations, asset-backed securities (“ABS”), RMBS, commercial mortgage-backed securities (“CMBS”), commercial real estate (“CRE”) loans, and CDOs.

The Company’s insured credit derivative contracts are non-traded structured credit derivative transactions. Since insured derivatives are highly customized and there is generally no observable market for these derivatives, the Company estimates their fair values in a hypothetical market based on internal and third-party models simulating what a similar company would charge to assume the Company’s position in the transaction at the measurement date. This pricing would be based on the expected loss of the exposure. The Company reviews its valuation model results on a quarterly basis to assess the appropriateness of the assumptions and results in light of current market activity and conditions. This review is performed by internal staff with relevant expertise. If live market spreads or securities prices are observable for similar transactions, those spreads are an integral part of the analysis. New insured transactions that resemble existing (previously insured) transactions, if any, would be considered, as well as negotiated settlements of existing transactions.

20

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

The Company may from time to time make changes in its valuation techniques if the change results in a measurement that it believes is equally or more representative of fair value under current circumstances.

Internal Review Process

All significant financial assets and liabilities are reviewed by a committee created by the Company to ensure compliance with the Company’s policies and risk procedures in the development of fair values of financial assets and liabilities. This valuation committee reviews, among other things, key assumptions used for internally developed prices, significant changes in sources and uses of inputs, including changes in model approaches, and any adjustments from third-party inputs or prices to internally developed inputs or prices. The committee also reviews any significant impairment or improvements in fair values of the financial instruments from prior periods. Occasionally, the committee will consult with the Company’s valuation experts to better understand key methods and assumptions used for the determination of fair value, including understanding significant changes in fair values. The committee is comprised of senior finance team members with relevant experience in the financial instruments their committee is responsible for. For each quarter, the committee documents their agreement with the fair values developed by management of the Company as reported in the quarterly and annual financial statements.

Valuation Techniques

Valuation techniques for financial instruments measured at fair value or disclosed at fair value are described below.

Fixed-Maturity Securities (including short-term investments) Held as Available-For-Sale, Investments Carried at Fair Value, Investments Pledged as Collateral, Investments Held-to-Maturity, and Other Investments

These investments include investments in U.S. Treasury and government agencies, state and municipal bonds, foreign governments, corporate obligations, mortgage-backed securities (“MBS”), ABS, money market securities, and perpetual debt and equity securities.

These investments are generally valued based on recently executed transaction prices or quoted market prices. When quoted market prices are not available, fair value is generally determined using quoted prices of similar investments or a valuation model based on observable and unobservable inputs. Inputs vary depending on the type of investment. Observable inputs include contractual cash flows, interest rate yield curves, CDS spreads, prepayment and volatility scores, diversity scores, cross-currency basis index spreads, and credit spreads for structures similar to the financial instrument in terms of issuer, maturity and seniority. Unobservable inputs include cash flow projections and the value of any credit enhancement.

The fair value of the held-to-maturity (“HTM”) investments is determined using discounted cash flow models. Key inputs include unobservable cash flows projected over the expected term of the investment discounted using observable interest rate yield curves of similar securities.

Investments based on quoted market prices of identical investments in active markets are classified as Level 1 of the fair value hierarchy. Level 1 investments generally consist of U.S. Treasury and government agency, foreign government, money market securities and perpetual debt and equity securities. Quoted market prices of investments in less active markets, as well as investments which are valued based on other than quoted prices for which the inputs are observable, such as interest rate yield curves, are categorized in Level 2 of the fair value hierarchy. Investments that contain significant inputs that are not observable are categorized as Level 3.

Cash and Cash Equivalents, Receivable for Investments Sold, Securities Sold Not Yet Purchased, Payable for Investments Purchased, and Accrued Investment Income

The carrying amounts of cash and cash equivalents, receivable for investments sold, securities sold, not yet purchased, payable for investments purchased, and accrued investment income approximate fair values due to the short-term nature and credit worthiness of these instruments. These items are categorized in Level 1 or Level 2 of the fair value hierarchy.

Loans Receivable at Fair Value

Loans receivable at fair value are comprised of loans held by consolidated VIEs consisting of corporate and residential mortgage loans. Fair values of commercial loans are obtained from a pricing service and determined using actively quoted prices obtained from multiple market participants. Fair values of residential mortgage loans are determined using quoted prices for MBS issued by the respective VIE and adjusted for the fair values of the financial guarantees provided by MBIA Corp. on the related MBS. Loans receivable at fair value are categorized in Level 2 or Level 3 of the fair value hierarchy based on the input that is significant to the fair value measurement in its entirety.

21

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

Loan Repurchase Commitments

Loan repurchase commitments are obligations owed by the sellers/servicers of mortgage loans to either MBIA as reimbursement of paid claims or to the RMBS trusts as defined in the transaction documents. Loan repurchase commitments are assets of the consolidated VIEs. This asset represents the rights of MBIA against the sellers/servicers for breaches of representations and warranties that the securitized residential mortgage loans sold to the trust to comply with stated underwriting guidelines and for the sellers/servicers to cure, replace, or repurchase mortgage loans. Fair value measurements of loan repurchase commitments represent the amounts owed by the sellers/servicers to MBIA as reimbursement of paid claims. Loan repurchase commitments are not securities and no quoted prices or comparable market transaction information are observable or available. Loan repurchase commitments at fair value are categorized in Level 3 of the fair value hierarchy. Fair values of loan repurchase commitments are determined using discounted cash flow techniques based on inputs including:

• breach rates representing the rate at which the sellers/servicers failed to comply with stated representations and warranties;

• recovery rates representing the estimates of future cash flows for the asset, including estimates about possible variations in the amount of cash flows expected to be collected;

• expectations about possible variations in the timing of collections of the cash flows; and

• time value of money, represented by the rate on risk-free monetary assets.

Long-term Debt

Long-term debt consists of notes, debentures, surplus notes and accrued interest on this debt. The fair value of long-term notes, debentures and surplus notes are estimated based on quoted prices for the identical or similar securities. The fair value of the accrued interest expense on the surplus notes due in 2033 is determined based on the scheduled interest payments discounted by the market’s perception of the credit risk related to the repayment of the surplus notes. The credit risk related to the repayment of the surplus notes is based on recent trades of the surplus notes. The deferred interest payment will be due on the first business day on or after which the Company obtains approval to make such payment.

The carrying amounts of accrued interest expense on all other long-term debt approximate fair value due to the short-term nature of these instruments. Long-term debt is categorized as Level 2 of the fair value hierarchy.

Medium-Term Notes

The fair values of certain MTNs are based on quoted market prices provided by third-party sources, where available. When quoted market prices are not available, the Company applies a matrix pricing grid based on the quoted market prices received and the MTNs’ stated maturity and interest rate to determine fair value. Nonperformance risk is included in the quoted market prices and the matrix pricing grid. The Company has elected to record these MTNs at fair value as they contain embedded derivatives which cannot accurately be separated from the host debt instrument and fair valued separately, therefore, these MTNs are carried at fair value with changes in fair value reflected in earnings. The remaining MTNs, which are not carried at fair value, do not contain embedded derivatives. As these MTNs are illiquid and the prices reflect significant unobservable inputs, they are categorized as Level 3 of the fair value hierarchy.

Investment Agreements

The fair values of investment agreements are determined using discounted cash flow techniques based on contractual cash flows and observable interest rates currently being offered for similar agreements with comparable maturity dates. Investment agreements contain collateralization and termination agreements that substantially mitigate the nonperformance risk of the Company. As the terms of the notes are private, and the timing and amount of contractual cash flows are not observable, these investment agreements are categorized as Level 3 of the fair value hierarchy.

Variable Interest Entity Notes

The fair values of VIE notes are determined based on recently executed transaction prices or quoted prices where observable. When position-specific quoted prices are not observable, fair values are based on quoted prices of similar securities. Fair values based on quoted prices of similar securities may be adjusted for factors unique to the securities, including any credit enhancement. When observable quoted prices are not available, fair value is determined based on discounted cash flow techniques of the underlying collateral using observable and unobservable inputs. Observable inputs include interest rate yield curves and bond spreads of similar securities. Unobservable inputs include the value of any credit enhancement. VIE notes are categorized in Level 2 or Level 3 of the fair value hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety.

22

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

Variable Interest Entity Derivatives

The VIEs have entered into derivative transactions consisting of cross currency swaps, interest rate derivatives and interest rate caps. Fair values of over-the-counter (“OTC”) derivatives are determined using valuation models based on observable and/or unobservable inputs. These observable and market-based inputs include interest rates and volatilities. These derivatives are categorized in Level 2 or Level 3 of the fair value hierarchy based on the input that is significant to the fair value measurement in its entirety.

Derivatives

The corporate segment has entered into derivative transactions primarily consisting of interest rate swaps. Fair values of OTC derivatives are determined using valuation models based on observable inputs, nonperformance risk of the Company’s own credit and nonperformance risk of the counterparties. Observable and market-based inputs include interest rate yields, credit spreads and volatilities. These derivatives are categorized in Level 2 or Level 3 of the fair value hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety.

The Company has policies and procedures in place regarding counterparties, including review and approval of the counterparty and the Company’s exposure limit, collateral posting requirements, collateral monitoring and margin calls on collateral. The Company manages counterparty credit risk on an individual counterparty basis through master netting agreements covering derivative transactions in the corporate segment. These agreements allow the Company to contractually net amounts due from a counterparty with those amounts due to such counterparty when certain triggering events occur. The Company only executes swaps under master netting agreements, which typically contain mutual credit downgrade provisions that generally provide the ability to require assignment or termination in the event either the Company or the counterparty is downgraded below a specified credit rating. The netting agreements minimize the potential for losses related to credit exposure and thus serve to mitigate the Company’s nonperformance risk under these derivatives.

In certain cases, the Company also manages credit risk through collateral agreements that give the Company the right to hold or the obligation to provide collateral when the current market value of derivative contracts exceeds an exposure threshold. Under these agreements, the Company may provide U.S. Treasury and other highly rated securities or cash to secure the derivative. The delivery of high-quality collateral can minimize credit exposure and mitigate the potential for nonperformance risk impacting the fair values of the derivatives.

Derivatives—Insurance

The derivative contracts insured by the Company cannot be legally traded and generally do not have observable market prices. The Company determines the fair values of insured credit derivatives using valuation models. The valuation models are consistently applied from period to period, with refinements to the fair value estimation approach being applied as and when the information becomes available. Negotiated settlements are also considered when determining fair value to validate the fair value estimates determined by the valuation models and to determine the best available estimate of fair value from the perspective of a market participant.

Approximately 88% of the balance sheet fair value of insured credit derivatives as of September 30, 2015 was valued based on the Binomial Expansion Technique (“BET”) Model. Approximately 12% of the balance sheet fair value of insured credit derivatives as of September 30, 2015 was valued based on the internally developed Direct Price Model and the Dual Default model. The valuation of insured derivatives includes the impact of its credit standing. All of these derivatives are categorized as Level 3 of the fair value hierarchy as their fair value is derived using significant unobservable inputs.

The Company has also entered into a derivative contract as a result of a commutation. The fair value of the derivative is determined using a discounted cash flow model. Key inputs include unobservable cash flows projected over the expected term of the derivative, discounted using observable discount rates and CDS spreads.

Description of the BET Model

Valuation Model Overview

The Company uses the BET Model to estimate what a bond insurer would charge to guarantee a transaction at the measurement date, based on the market-implied default risk of the underlying collateral and the remaining structural protection in a deductible or subordination.

23

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

Inputs to the process of determining fair value for structured transactions using the BET Model include estimates of collateral loss, allocation of loss to separate tranches of the capital structure, and calculation of the change in value.

BET Model Inputs

a. Credit spreads

The average spread of collateral is a key input as the Company assumes credit spreads reflect the market’s assessment of default probability. Collateral assets are generally considered on an average basis rather than being modeled on an individual basis. Spreads are obtained from market data sources published by third parties (e.g., dealer spread tables for assets most closely resembling collateral within the Company’s transactions) as well as collateral-specific spreads on the underlying reference obligations provided by trustees or market sources. The Company also calculates spreads based on quoted prices and on internal assumptions about expected life, when pricing information is available and spread information is not.

Over time, the data inputs change as new sources become available, existing sources are discontinued or are no longer considered to be reliable or the most appropriate. It is the Company’s preference to use more observable spread inputs defined above. However, the Company may on occasion move to less observable spread inputs due to the discontinuation of data sources or due to the Company considering certain spread inputs no longer representative of market spreads.

b. Diversity Scores

Diversity scores are a means of estimating the diversification in a portfolio. The diversity score estimates the number of uncorrelated assets that are assumed to have the same loss distribution as the actual portfolio of correlated assets. While diversity score is a required input into the BET model, due to current high levels of default within the collateral of the structures, diversity score does not have a significant impact on valuation.

c. Recovery Rate

The recovery rate represents the percentage of par expected to be recovered after an asset defaults, indicating the severity of a potential loss. MBIA generally uses rating agency recovery assumptions which may be adjusted to account for differences between the collateral used by the rating agencies and the actual collateral in MBIA-insured transactions. The Company may also adjust rating agency assumptions based on the performance of the collateral manager and on empirical market data.

d. Nonperformance Risk

The Company’s valuation methodology for insured credit derivative liabilities incorporates MBIA Corp.’s own nonperformance risk. The Company calculates the fair value by discounting the market value loss estimated through the BET Model at discount rates which include MBIA Corp.’s CDS spreads as of September 30, 2015. The CDS spreads assigned to each deal are based on the weighted average life of the deal. The Company limits the nonperformance impact so that the derivative liability could not be lower than MBIA Corp.’s recovery derivative price multiplied by the unadjusted derivative liability.

Overall Model Results

As of September 30, 2015 and December 31, 2014, the Company’s net insured CDS derivative liability was $121 million and $244 million, respectively, based on the results of the aforementioned models. A significant driver of changes in fair value is MBIA Corp.’s nonperformance risk. In aggregate, the nonperformance calculation resulted in a pre-tax net insured derivative liability that was $42 million and $92 million lower than the net liability that would have been estimated if MBIA Corp. excluded nonperformance risk in its valuation as of September 30, 2015 and December 31, 2014, respectively. Nonperformance risk is a fair value concept and does not contradict MBIA Corp.’s internal view, based on fundamental credit analysis of MBIA Corp.’s economic condition, that MBIA Corp. will be able to pay all claims when due.

Warrants

Stock warrants issued by the Company are valued using the Black-Scholes model and are recorded at fair value. Inputs into the warrant valuation include the Company’s stock price, a volatility parameter, interest rates, and dividend data. As all significant inputs are market-based and observable, warrants are categorized as Level 2 of the fair value hierarchy.

24

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

Facility

In the fourth quarter of 2013, the Company approved and initiated a plan to sell its Armonk, New York facility and classified it as held for sale as of December 31, 2014. In May of 2015, the Company completed the sale of this facility. As of December 31, 2014, fair market value was estimated based on an independent third-party appraisal. This item is categorized as Level 2 of the fair value hierarchy.

Financial Guarantees

Gross Financial Guarantees—The fair value of gross financial guarantees is determined using discounted cash flow techniques based on inputs that include (i) assumptions of expected losses on financial guarantee policies where loss reserves have not been recognized, (ii) amount of losses expected on financial guarantee policies where loss reserves have been established, net of expected recoveries, (iii) the cost of capital reserves required to support the financial guarantee liability, (iv) operating expenses, and (v) discount rates. The MBIA Corp. CDS spread and recovery rate are used as the discount rate for MBIA Corp., while the CDS spread and recovery rate of a similar municipal bond insurance company are used as the discount rate for National, as National does not have a published CDS spread and recovery rate.

The carrying value of the Company’s gross financial guarantees consists of unearned premium revenue and loss and LAE reserves, net of the insurance loss recoverable as reported on MBIA’s consolidated balance sheets.

Ceded Financial Guarantees—The fair value of ceded financial guarantees is determined by applying the percentage ceded to reinsurers to the related fair value of the gross financial guarantees. The carrying value of ceded financial guarantees consists of prepaid reinsurance premiums and reinsurance recoverable on paid and unpaid losses as reported within “Other assets” on the Company’s consolidated balance sheets.

Significant Unobservable Inputs

The following tables provide quantitative information regarding the significant unobservable inputs used by the Company for assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014. These tables exclude inputs used to measure fair value that are not developed by the Company, such as broker prices and other third-party pricing service valuations.

In millions	Fair Value as of September 30, 2015		Valuation Techniques	Unobservable Input	Range (Weighted Average)
Assets of consolidated VIEs:
Loans receivable at fair value	$	1,351	Market prices adjusted for financial guarantees provided to VIE obligations	Impact of financial guarantee		0% - 6% (2%)
Loan repurchase commitments		394	Discounted cash flow	Recovery rates(1)
				Breach rates(1)
Liabilities of consolidated VIEs:
Variable interest entity notes		1,310	Market prices of VIE assets adjusted for financial guarantees provided	Impact of financial guarantee		0% - 44% (9%)
Credit derivative liabilities, net:
CMBS		105	BET Model	Recovery rates		25% - 90% (66%)
				Nonperformance risk		19% - 29% (21%)
				Weighted average life (in years)		1.1 - 1.7 (1.4)
				CMBS spreads		0% - 67% (20%)
Multi-sector CDO		5	Direct Price Model	Nonperformance risk		48% - 48% (48%)
Other		11	BET Model and Dual Default	Recovery rates		42% - 45% (45%)
				Nonperformance risk		48% - 48% (48%)
				Weighted average life (in years)		0.8 - 7.4 (2.1)
Other derivative liabilities		22	Discounted cash flow	Cash flows		$0 - $83 ($42)(2)

(1) - Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty.

(2) - Midpoint of cash flows are used for the weighted average.

25

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

In millions	Fair Value as of December 31, 2014		Valuation Techniques	Unobservable Input	Range (Weighted Average)
Assets of consolidated VIEs:
Loans receivable at fair value	$	1,431	Market prices adjusted for financial guarantees provided to VIE obligations	Impact of financial guarantee		0% - 10% (2%)
Loan repurchase commitments		379	Discounted cash flow	Recovery rates(1)
				Breach rates(1)
Liabilities of consolidated VIEs:
Variable interest entity notes		735	Market prices of VIE assets adjusted for financial guarantees provided	Impact of financial guarantee		0% - 35% (16%)
Credit derivative liabilities, net:
CMBS		224	BET Model	Recovery rates		25% - 90% (59%)
				Nonperformance risk		12% - 29% (25%)
				Weighted average life (in years)		1.3 - 3.2 (2.3)
				CMBS spreads		0% - 41% (19%)
Multi-sector CDO		9	Direct Price Model	Nonperformance risk		53% - 53% (53%)
Other		11	BET Model and Dual Default	Recovery rates		42% - 45% (45%)
				Nonperformance risk		41% - 51% (50%)
				Weighted average life (in years)		0.2 - 7.9 (1.1)
Other derivative liabilities		24	Discounted cash flow	Cash flows		$0 - $83 ($42)(2)

(1) - Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty.

(2) - Midpoint of cash flows are used for the weighted average.

Sensitivity of Significant Unobservable Inputs

The significant unobservable input used in the fair value measurement of the Company’s loans receivable at fair value of consolidated VIEs is the impact of the financial guarantee. The fair value of loans receivable is calculated by subtracting the value of the financial guarantee from the market value of VIE liabilities. The value of a financial guarantee is estimated by the Company as the present value of expected cash payments under the policy. As expected cash payments provided by the Company under the insurance policy increase, there is a lower expected cash flow on the underlying loans receivable of the VIE. This results in a lower fair value of the loans receivable in relation to the obligations of the VIE.

The significant unobservable inputs used in the fair value measurement of the Company’s loan repurchase commitments of consolidated VIEs are the recovery rates and breach rates. Recovery rates reflect the estimates of future cash flows reduced for litigation delays and risks and/or potential financial distress of the sellers/servicers. The estimated recoveries of the loan repurchase commitments may differ from the actual recoveries that may be received in the future. Breach rates represent the rate at which mortgages fail to comply with stated representations and warranties of the sellers/servicers. Significant increases or decreases in the recovery rates and the breach rates would result in significantly higher or lower fair values of the loan repurchase commitments, respectively. Additionally, changes in the legal environment and the ability of the counterparties to pay would impact the recovery rate assumptions, which could significantly impact the fair value measurement. Any significant challenges by the counterparties to the Company’s determination of breaches of representations and warranties could significantly adversely impact the fair value measurement. Recovery rates and breach rates are determined independently. Changes in one input will not necessarily have any impact on the other input.

The significant unobservable input used in the fair value measurement of the Company’s VIE notes of consolidated VIEs is the impact of the financial guarantee. The fair value of VIE notes is calculated by adding the value of the financial guarantee to the market value of VIE assets. The value of a financial guarantee is estimated by the Company as the present value of expected cash payments under the policy. As the value of the guarantee provided by the Company to the obligations issued by the VIE increases, the credit support adds value to the liabilities of the VIE. This results in an increase in the fair value of the liabilities of the VIE.

26

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

The significant unobservable inputs used in the fair value measurement of MBIA Corp.’s CMBS credit derivatives, which are valued using the BET Model, are CMBS spreads, recovery rates, nonperformance risk and weighted average life. The CMBS spread is an indicator of credit risk of the collateral securities. The recovery rate represents the percentage of notional expected to be recovered after an asset defaults, indicating the severity of a potential loss. The nonperformance risk is an assumption of MBIA Corp.’s own ability to pay and whether MBIA Corp. will have the necessary resources to pay the obligations as they come due. Weighted average life is based on the Company’s estimate of when the principal of the underlying collateral of the CMBS structure will be repaid. A significant increase or decrease in CMBS spreads would result in an increase or decrease in the fair value of the derivative liability, respectively. A significant increase in weighted average life can result in an increase or decrease in the fair value of the derivative liability, depending on the discount rate and the timing of significant losses. Any significant increase or decrease in recovery rates, or MBIA Corp.’s nonperformance risk would result in a decrease or increase in the fair value of the derivative liabilities, respectively. CMBS spreads, recovery rates, nonperformance risk and weighted average lives are determined independently. Changes in one input will not necessarily have any impact on the other inputs.

The significant unobservable input used in the fair value measurement of MBIA Corp.’s multi-sector CDO credit derivatives, which are valued using the Direct Price Model, is nonperformance risk. The nonperformance risk is an assumption of MBIA Corp.’s own ability to pay and whether MBIA Corp. will have the necessary resources to pay the obligations as they come due. Any significant increase or decrease in MBIA Corp.’s nonperformance risk would result in a decrease or increase in the fair value of the derivative liabilities, respectively.

The significant unobservable inputs used in the fair value measurement of MBIA Corp.’s other credit derivatives, which are valued using the BET Model and Dual Default, are recovery rates, nonperformance risk and weighted average life. The recovery rate represents the percentage of notional expected to be recovered after an asset defaults, indicating the severity of a potential loss. The nonperformance risk is an assumption of MBIA Corp.’s own ability to pay and whether MBIA Corp. will have the necessary resources to pay the obligations as they come due. Weighted average life is based on MBIA Corp.’s estimate of when the principal of the underlying collateral will be repaid. A significant increase in weighted average life can result in an increase or decrease in the fair value of the derivative liability, depending on the discount rate and the timing of significant losses. Any significant increase or decrease in recovery rates or MBIA Corp.’s nonperformance risk would result in a decrease or increase in the fair value of the derivative liabilities, respectively. Recovery rates, nonperformance risk and weighted average lives are determined independently. Changes in one input will not necessarily have any impact on the other inputs.

The significant unobservable input used in the fair value measurement of MBIA Corp.’s other derivatives, which are valued using a discounted cash flow model, is the estimates of future cash flows discounted using market rates and CDS spreads. Any significant increase or decrease in future cash flows would result in an increase or decrease in the fair value of the derivative liability, respectively.

27

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

Fair Value Measurements

The following tables present the fair value of the Company’s assets (including short-term investments) and liabilities measured and reported at fair value on a recurring basis as of September 30, 2015 and December 31, 2014:

	Fair Value Measurements at Reporting Date Using
In millions	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Counterparty and Cash Collateral Netting		Balance as of September 30, 2015
Assets:
Fixed-maturity investments:
U.S. Treasury and government agency	$	744	$	112	$	-		$	-	$	856
State and municipal bonds		-		1,804		47	(1)		-		1,851
Foreign governments		141		67		5	(1)		-		213
Corporate obligations		-		1,717		8	(1)		-		1,725
Mortgage-backed securities:
Residential mortgage-backed agency		-		1,043		-			-		1,043
Residential mortgage-backed non-agency		-		56		-			-		56
Commercial mortgage-backed		-		16		-			-		16
Asset-backed securities:
Collateralized debt obligations		-		3		61	(1)		-		64
Other asset-backed		-		310		57	(1)		-		367
Total fixed-maturity investments		885		5,128		178			-		6,191
Money market securities		111		-		-			-		111
Perpetual debt and equity securities		17		192		-			-		209
Cash and cash equivalents		462		-		-			-		462
Derivative assets:
Non-insured derivative assets:
Interest rate derivatives		-		3		-			(1)		2

28

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

	Fair Value Measurements at Reporting Date Using
In millions	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Counterparty and Cash Collateral Netting		Balance as of September 30, 2015
Assets of consolidated VIEs:
Corporate obligations		-		47		11	(1)		-		58
Mortgage-backed securities:
Residential mortgage-backed non-agency		-		183		-			-		183
Commercial mortgage-backed		-		699		-			-		699
Asset-backed securities:
Collateralized debt obligations		-		16		-			-		16
Other asset-backed		-		20		9	(1)		-		29
Cash		30		-		-			-		30
Loans receivable at fair value:
Residential loans receivable		-		-		1,244			-		1,244
Other loans receivable		-		-		107			-		107
Loan repurchase commitments		-		-		394			-		394
Derivative assets:
Currency derivatives		-		-		6	(1)		-		6
Total assets	$	1,505	$	6,288	$	1,949		$	(1)	$	9,741
Liabilities:
Medium-term notes	$	-	$	-	$	170	(1)	$	-	$	170
Derivative liabilities:
Insured derivatives:
Credit derivatives		-		3		121			-		124
Non-insured derivatives:
Interest rate derivatives		-		255		-			(62)		193
Other		-		-		22			-		22
Other liabilities:
Warrants		-		17		-			-		17
Securities sold, not yet purchased		18		-		-			-		18
Liabilities of consolidated VIEs:
Variable interest entity notes		-		1,150		1,310			-		2,460
Derivative liabilities:
Interest rate derivatives		-		57		-			-		57
Total liabilities	$	18	$	1,482	$	1,623		$	(62)	$	3,061

(1) - Unobservable inputs are either not developed by the Company or do not significantly impact the overall fair values of the aggregate financial assets and liabilities.

29

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

	Fair Value Measurements at Reporting Date Using
In millions	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Counterparty and Cash Collateral Netting		Balance as of December 31, 2014
Assets:
Fixed-maturity investments:
U.S. Treasury and government agency	$	573	$	118	$	-		$	-	$	691
State and municipal bonds		-		1,724		8	(1)		-		1,732
Foreign governments		221		63		6	(1)		-		290
Corporate obligations		-		2,048		10	(1)		-		2,058
Mortgage-backed securities:
Residential mortgage-backed agency		-		1,162		-			-		1,162
Residential mortgage-backed non-agency		-		56		-			-		56
Commercial mortgage-backed		-		20		2	(1)		-		22
Asset-backed securities:
Collateralized debt obligations		-		6		87	(1)		-		93
Other asset-backed		-		156		85	(1)		-		241
Total fixed-maturity investments		794		5,353		198			-		6,345
Money market securities		428		-		-			-		428
Perpetual debt and equity securities		22		31		-			-		53
Cash and cash equivalents		729		-		-			-		729
Derivative assets:
Non-insured derivative assets:
Interest rate derivatives		-		83		-			(81)		2
Assets held for sale:
Equity securities		6		-		-			-		6
Loans receivable at fair value		-		711		-			-		711
Cash and cash equivalents		55		-		-			-		55

30

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

	Fair Value Measurements at Reporting Date Using
In millions	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Counterparty and Cash Collateral Netting		Balance as of December 31, 2014
Assets of consolidated VIEs:
Corporate obligations		-		10		55	(1)		-		65
Mortgage-backed securities:
Residential mortgage-backed non-agency		-		194		3	(1)		-		197
Commercial mortgage-backed		-		86		-			-		86
Asset-backed securities:
Collateralized debt obligations		-		7		5	(1)		-		12
Other asset-backed		-		35		26	(1)		-		61
Cash		53		-		-			-		53
Loans receivable at fair value:
Residential loans receivable		-		-		1,431			-		1,431
Loan repurchase commitments		-		-		379			-		379
Total assets	$	2,087	$	6,510	$	2,097		$	(81)	$	10,613
Liabilities:
Medium-term notes	$	-	$	-	$	197	(1)	$	-	$	197
Derivative liabilities:
Insured derivatives:
Credit derivatives		-		2		244			-		246
Non-insured derivatives:
Interest rate derivatives		-		248		-			(81)		167
Other		-		-		24			-		24
Liabilities held for sale:
Variable interest entity notes		-		431		-			-		431
Payable for loans purchased		-		323		-			-		323
Other liabilities:
Warrants		-		28		-			-		28
Liabilities of consolidated VIEs:
Variable interest entity notes		-		1,312		735			-		2,047
Total liabilities	$	-	$	2,344	$	1,200		$	(81)	$	3,463

(1) - Unobservable inputs are either not developed by the Company or do not significantly impact the overall fair values of the aggregate financial assets and liabilities.

Level 3 assets at fair value as of September 30, 2015 and December 31, 2014 represented approximately 20% of total assets measured at fair value. Level 3 liabilities at fair value as of September 30, 2015 and December 31, 2014 represented approximately 53% and 35%, respectively, of total liabilities measured at fair value.

31

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

The following tables present the fair values and carrying values of the Company’s assets and liabilities that are disclosed at fair value but not reported at fair value on the Company’s consolidated balance sheets as of September 30, 2015 and December 31, 2014:

	Fair Value Measurements at Reporting Date Using
In millions	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value Balance as of September 30, 2015		Carry Value Balance as of September 30, 2015
Assets:
Other investments	$	-	$	-	$	3	$	3	$	3
Accrued investment income(1)		-		42		-		42		42
Receivable for investments sold(1)		-		38		-		38		38
Assets of consolidated VIEs:
Investments held-to-maturity		-		-		2,442		2,442		2,707
Total assets	$	-	$	80	$	2,445	$	2,525	$	2,790
Liabilities:
Long-term debt	$	-	$	1,008	$	-	$	1,008	$	1,882
Medium-term notes		-		-		574		574		863
Investment agreements		-		-		638		638		485
Payable for investments purchased(2)		-		19		-		19		19
Liabilities of consolidated VIEs:
Variable interest entity notes		-		-		2,661		2,661		2,706
Total liabilities	$	-	$	1,027	$	3,873	$	4,900	$	5,955
Financial Guarantees:
Gross	$	-	$	-	$	3,799	$	3,799	$	1,742
Ceded		-		-		107		107		58

(1) - Reported within “Other assets” on MBIA’s consolidated balance sheets.

(2) - Reported within “Other liabilities” on MBIA’s consolidated balance sheets.

	Fair Value Measurements at Reporting Date Using
In millions	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value Balance as of December 31, 2014		Carry Value Balance as of December 31, 2014
Assets:
Other investments	$	-	$	-	$	4	$	4	$	4
Accrued investment income(1)		-		43		-		43		43
Receivable for investments sold(1)		-		69		-		69		69
Assets held for sale Facility		-		26		-		26		26
Assets of consolidated VIEs:
Investments held-to-maturity		-		-		2,632		2,632		2,757
Total assets	$	-	$	138	$	2,636	$	2,774	$	2,899
Liabilities:
Long-term debt	$	-	$	1,172	$	-	$	1,172	$	1,810
Medium-term notes		-		-		801		801		1,004
Investment agreements		-		-		705		705		547
Payable for investments purchased(2)		-		42		-		42		42
Liabilities of consolidated VIEs:
Variable interest entity notes		-		-		2,779		2,779		2,757
Total liabilities	$	-	$	1,214	$	4,285	$	5,499	$	6,160
Financial Guarantees:
Gross	$	-	$	-	$	4,051	$	4,051	$	1,959
Ceded		-		-		109		109		65

(1) - Reported within “Other assets” on MBIA’s consolidated balance sheets.

(2) - Reported within “Other liabilities” on MBIA’s consolidated balance sheets.

32

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

The following tables present information about changes in Level 3 assets (including short-term investments) and liabilities measured at fair value on a recurring basis for the three months ended September 30, 2015 and 2014:

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2015

In millions	Balance, Beginning of Period		Realized Gains / (Losses)		Unrealized Gains / (Losses) Included in Earnings		Unrealized Gains / (Losses) Included in OCI		Foreign Exchange Recognized in OCI or Earnings		Purchases		Issuances		Settlements		Sales		Transfers into Level 3(1)		Transfers out of Level 3(1)		Ending Balance		Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets still held as of September 30, 2015
Assets:
Foreign governments	$	5	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	5	$	-
Corporate obligations		8		-		-		-		-		-		-		-		-		-		-		8		-
Commercial mortgage-backed		1		-		-		-		-		-		-		-		-		-		(1)		-		-
Collateralized debt obligations		67		-		-		1		-		-		-		(4)		-		-		(3)		61		-
Other asset-backed		83		-		-		-		-		-		-		(2)		-		-		(24)		57		-
State and municipal bonds		5		-		-		-		-		45		-		(3)		-		-		-		47		-
Assets of consolidated VIEs:
Corporate obligations		35		-		1		-		-		-		-		-		-		3		(28)		11		-
Residential mortgage- backed non-agency		5		-		-		-		-		-		-		-		-		-		(5)		-		-
Collateralized debt obligations		4		-		5		-		-		-		-		-		-		-		(9)		-		-
Other asset-backed		17		-		-		-		-		-		-		(1)		-		-		(7)		9		-
Loans receivable- residential		1,318		-		(12)		-		-		-		-		(62)		-		-		-		1,244		(12)
Loans receivable- other		108		-		(1)		-		-		-		-		-		-		-		-		107		(1)
Loan repurchase commitments		388		-		6		-		-		-		-		-		-		-		-		394		6
Currency derivatives, net		2		-		1		-		3		-		-		-		-		-		-		6		4
Total assets	$	2,046	$	-	$	-	$	1	$	3	$	45	$	-	$	(72)	$	-	$	3	$	(77)	$	1,949	$	(3)

In millions	Balance, Beginning of Period		Realized (Gains) / Losses		Unrealized (Gains) / Losses Included in Earnings		Unrealized (Gains) / Losses Included in OCI		Foreign Exchange Recognized in OCI or Earnings		Purchases		Issuances		Settlements		Sales		Transfers into Level 3(1)		Transfers out of Level 3(1)		Ending Balance		Change in Unrealized (Gains) Losses for the Period Included in Earnings for Liabilities still held as of September 30, 2015
Liabilities:
Medium-term notes	$	166	$	-	$	4	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	170	$	4
Credit derivatives, net		144		18		(21)		-		-		-		-		(20)		-		-		-		121		(21)
Other derivatives		21		-		1		-		-		-		-		-		-		-		-		22		1
Liabilities of consolidated VIEs:
VIE notes		1,374		-		1		-		-		-		-		(65)		-		-		-		1,310		1
Total liabilities	$	1,705	$	18	$	(15)	$	-	$	-	$	-	$	-	$	(85)	$	-	$	-	$	-	$	1,623	$	(15)

(1) - Transferred in and out at the end of the period.

33

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2014

In millions	Balance, Beginning of Period		Realized Gains / (Losses)		Unrealized Gains / (Losses) Included in Earnings		Unrealized Gains / (Losses) Included in OCI		Foreign Exchange Recognized in OCI or Earnings		Purchases		Issuances		Settlements		Sales		Transfers into Level 3(1)		Transfers out of Level 3(1)		Ending Balance		Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets still held as of September 30, 2014
Assets:
Foreign governments	$	5	$	-	$	-	$	-	$	-	$	-	$	-	$	(6)	$	-	$	7	$	-	$	6	$	-
Corporate obligations		34		-		-		-		(1)		3		-		(1)		(1)		4		-		38		-
Residential mortgage- backed agency		8		-		-		-		-		-		-		(8)		-		-		-		-		-
Commercial mortgage-backed		1		-		-		-		-		-		-		-		-		-		-		1		-
Collateralized debt obligations		95		-		-		-		-		-		-		(3)		-		-		-		92		-
Other asset-backed		82		-		-		(4)		-		-		-		(4)		-		21		(1)		94		-
State and municipal bonds		57		-		-		-		-		-		-		(1)		-		2		-		58		-
Perpetual debt and equity securities		13		-		-		-		-		-		-		-		-		-		-		13		-
Assets of consolidated VIEs:
Corporate obligations		62		-		-		-		-		-		-		-		-		7		-		69		-
Residential mortgage- backed non-agency		4		-		-		-		-		-		-		-		-		-		-		4		-
Commercial
Collateralized debt obligations		6		-		-		-		-		-		-		-		-		-		-		6		-
Other asset-backed		26		-		-		-		-		-		-		(1)		-		14		-		39		-
Loans receivable		1,539		-		12		-		-		-		-		(56)		-		-		-		1,495		12
Loan repurchase commitments		363		-		2		-		-		-		-		-		-		-		-		365		2
Total assets	$	2,295	$	-	$	14	$	(4)	$	(1)	$	3	$	-	$	(80)	$	(1)	$	55	$	(1)	$	2,280	$	14

In millions	Balance, Beginning of Period		Realized (Gains) / Losses		Unrealized (Gains) / Losses Included in Earnings		Unrealized (Gains) / Losses Included in OCI		Foreign Exchange Recognized in OCI or Earnings		Purchases		Issuances		Settlements		Sales		Transfers into Level 3(1)		Transfers out of Level 3(1)		Ending Balance		Change in Unrealized (Gains) Losses for the Period Included in Earnings for Liabilities still held as of September 30, 2014
Liabilities:
Medium-term notes	$	217	$	-	$	2	$	-	$	(17)	$	-	$	-	$	-	$	-	$	-	$	-	$	202	$	(15)
Credit derivatives, net		332		24		(48)		-		-		-		-		(24)		-		-		-		284		(14)
Other derivatives, net		33		-		5		-		-		-		-		-		-		-		-		38		5
Liabilities of consolidated VIEs:
VIE notes		802		-		4		-		-		-		-		(60)		-		-		-		746		4
Currency derivatives, net		11		-		(3)		-		(1)		-		-		-		-		-		-		7		(4)
Total liabilities	$	1,395	$	24	$	(40)	$	-	$	(18)	$	-	$	-	$	(84)	$	-	$	-	$	-	$	1,277	$	(24)

(1) - Transferred in and out at the end of the period.

34

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

Transfers into and out of Level 3 were $3 million and $77 million, respectively, for the three months ended September 30, 2015. Transfers into and out of Level 2 were $77 million and $3 million, respectively, for the three months ended September 30, 2015. Transfers into Level 3 were principally related to corporate obligations, where inputs, which are significant to their valuation, became unobservable during the quarter. Corporate obligations, other ABS and CDOs comprised the majority of the instruments transferred out of Level 3 where inputs, which are significant to their valuation, became observable during the quarter. These inputs included spreads, prepayment speeds, default speeds, default severities, yield curves observable at commonly quoted intervals, and market corroborated inputs. There were no transfers into or out of Level 1.

Transfers into and out of Level 3 were $55 million and $1 million, respectively, for the three months ended September 30, 2014. Transfers into and out of Level 2 were $1 million and $55 million, respectively, for the three months ended September 30, 2014. Transfers into Level 3 were principally related to other ABS, corporate obligations and foreign government securities, where inputs, which are significant to their valuation, became unobservable during the quarter. Other ABS comprised the majority of the instruments transferred out of Level 3 where inputs, which are significant to their valuation, became observable during the quarter. These inputs included spreads, prepayment speeds, default speeds, default severities, yield curves observable at commonly quoted intervals, and market corroborated inputs. There were no transfers into or out of Level 1.

All Level 1, 2 and 3 designations are made at the end of each accounting period.

The following tables present information about changes in Level 3 assets (including short-term investments) and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2015 and 2014:

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2015

In millions	Balance, Beginning of Year		Realized Gains / (Losses)		Unrealized Gains / (Losses) Included in Earnings		Unrealized Gains / (Losses) Included in OCI		Foreign Exchange Recognized in OCI or Earnings		Purchases		Issuances		Settlements		Sales		Transfers into Level 3(1)		Transfers out of Level 3(1)		Ending Balance		Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets still held as of September 30, 2015
Assets:
Foreign governments	$	6	$	-	$	-	$	-	$	(1)	$	-	$	-	$	-	$	-	$	-	$	-	$	5	$	-
Corporate obligations		10		-		-		-		-		-		-		-		-		15		(17)		8		-
Commercial mortgage-backed		2		-		-		-		-		-		-		-		-		1		(3)		-		-
Collateralized debt obligations		87		-		-		3		-		-		-		(18)		(8)		1		(4)		61		-
Other asset-backed		85		(2)		-		1		-		4		-		(9)		(8)		12		(26)		57		-
State and municipal bonds		8		-		-		-		-		45		-		(4)		-		-		(2)		47		-
Assets of consolidated VIEs:
Corporate obligations		55		-		-		-		-		-		-		(6)		-		3		(41)		11		-
Residential mortgage- backed non-agency		3		-		1		-		-		-		-		(1)		-		2		(5)		-		-
Collateralized debt obligations		5		-		5		-		-		-		-		-		-		-		(10)		-		-
Other asset-backed		26		-		2		-		-		-		-		(5)		-		-		(14)		9		-
Loans receivable- residential		1,431		-		(15)		-		-		-		-		(172)		-		-		-		1,244		(15)
Loans receivable-other		-		-		(1)		-		-		108		-		-		-		-		-		107		(1)
Loan repurchase commitments		379		-		15		-		-		-		-		-		-		-		-		394		15
Currency derivatives net		-		-		-		-		6		-		-		-		-		-		-		6		6
Total assets	$	2,097	$	(2)	$	7	$	4	$	5	$	157	$	-	$	(215)	$	(16)	$	34	$	(122)	$	1,949	$	5

35

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

In millions	Balance, Beginning of Year		Realized (Gains) / Losses		Unrealized (Gains) / Losses Included in Earnings		Unrealized (Gains) / Losses Included in OCI		Foreign Exchange Recognized in OCI or Earnings		Purchases		Issuances		Settlements		Sales		Transfers into Level 3(1)		Transfers out of Level 3(1)		Ending Balance		Change in Unrealized (Gains) Losses for the Period Included in Earnings for Liabilities still held as of September 30, 2015
Liabilities:
Medium-term notes	$	197	$	-	$	(11)	$	-	$	(16)	$	-	$	-	$	-	$	-	$	-	$	-	$	170	$	(27)
Credit derivatives, net		244		30		(121)		-		-		-		-		(32)		-		-		-		121		(109)
Other derivatives, net		24		-		(2)		-		-		-		-		-		-		-		-		22		(2)
Liabilities of consolidated VIEs:
VIE notes		735		-		22		-		-		695		-		(142)		-		-		-		1,310		22
Total liabilities	$	1,200	$	30	$	(112)	$	-	$	(16)	$	695	$	-	$	(174)	$	-	$	-	$	-	$	1,623	$	(116)

(1) - Transferred in and out at the end of the period.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2014

In millions	Balance, Beginning of Year		Realized Gains / (Losses)		Unrealized Gains / (Losses) Included in Earnings		Unrealized Gains / (Losses) Included in OCI		Foreign Exchange Recognized in OCI or Earnings		Purchases		Issuances		Settlements		Sales		Transfers into Level 3(1)		Transfers out of Level 3(1)		Ending Balance		Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets still held as of September 30, 2014
Assets:
Foreign governments	$	12	$	-	$	-	$	-	$	-	$	-	$	-	$	(15)	$	-	$	9	$	-	$	6	$	-
Corporate obligations		48		3		3		(4)		(1)		9		-		(3)		(23)		7		(1)		38		2
Residential mortgage- backed agency		-		-		-		-		-		-		-		(8)		-		37		(29)		-		-
Residential mortgage- backed non-agency		6		-		-		(1)		-		-		-		-		-		-		(5)		-		-
Commercial mortgage-backed		14		-		-		-		-		-		-		(14)		-		2		(1)		1		-
Collateralized debt obligations		82		(2)		1		27		-		5		-		(9)		(41)		36		(7)		92		-
Other asset-backed		58				-		4		-		11		-		(8)		(1)		51		(21)		94		-
State and municipal bonds		19		-		-		1		-		-		-		(3)		(3)		46		(2)		58		-
Perpetual debt and equity securities		11		-		2		-		-		-		-		-		-		4		(4)		13		2
Assets of consolidated VIEs:
Corporate obligations		48		-		-		-		-		-		-		(4)		-		25		-		69		-
Residential mortgage- backed non-agency		4		-		(1)		-		-		-		-		(1)		-		2		-		4		-
Commercial mortgage-backed		3		-		(3)		-		-		-		-		-		-		-		-		-		-
Collateralized debt obligations		22		-		(10)		-		-		-		-		(4)		-		1		(3)		6		1
Other asset-backed		54		-		(16)		-		-		-		-		(7)		-		18		(10)		39		-
Loans receivable		1,612		-		48		-		-		-		-		(165)		-		-		-		1,495		48
Loan repurchase commitments		359		-		6		-		-		-		-		-		-		-		-		365		6
Total assets	$	2,352	$	1	$	30	$	27	$	(1)	$	25	$	-	$	(241)	$	(68)	$	238	$	(83)	$	2,280	$	59

36

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

In millions	Balance, Beginning of Year		Realized (Gains) / Losses		Unrealized (Gains) / Losses Included in Earnings		Unrealized (Gains) / Losses Included in OCI		Foreign Exchange Recognized in OCI or Earnings		Purchases		Issuances		Settlements		Sales			Transfers into Level 3(1)		Transfers out of Level 3(1)		Ending Balance		Change in Unrealized (Gains) Losses for the Period Included in Earnings for Liabilities still held as of September 30, 2014
Liabilities:
Medium-term notes	$	203	$	-	$	17	$	-	$	(18)	$	-	$	-	$	-	$			$	-	$	-	$	202	$	(1)
Credit derivatives, net		1,147		388		(863)		-		-		-		-		(388)		-			-		-		284		20
Other derivatives, net		-		30		8		-		-		-		-		-		-			-		-		38		8
Liabilities of consolidated VIEs:
VIE notes		940		-		40		-		-		-		3		(196)		(41)			-		-		746		37
Currency derivatives, net		11		-		(3)		-		(1)		-		-		-		-			-		-		7		(4)
Total liabilities	$	2,301	$	418	$	(801)	$	-	$	(19)	$	-	$	3	$	(584)	$	(41)	(2)	$	-	$	-	$	1,277	$	60

(1) - Transferred in and out at the end of the period.

(2) - Primarily relates to the deconsolidation of VIEs.

Transfers into and out of Level 3 were $34 million and $122 million, respectively, for the nine months ended September 30, 2015. Transfers into and out of Level 2 were $122 million and $34 million, respectively, for the nine months ended September 30, 2015. Transfers into Level 3 were principally related to corporate obligations and other ABS, where inputs, which are significant to their valuation, became unobservable during the period. Corporate obligations, other ABS and CDOs comprised the majority of the instruments transferred out of Level 3 where inputs, which are significant to their valuation, became observable during the period. These inputs included spreads, prepayment speeds, default speeds, default severities, yield curves observable at commonly quoted intervals, and market corroborated inputs. There were no transfers into or out of Level 1.

Transfers into and out of Level 3 were $238 million and $83 million, respectively, for the nine months ended September 30, 2014. Transfers into and out of Level 2 were $83 million and $238 million, respectively, for the nine months ended September 30, 2014. Transfers into Level 3 were principally related to other ABS, state and municipal bonds, RMBS agency, CDOs and corporate obligations, where inputs, which are significant to their valuation, became unobservable during the period. RMBS agency and other ABS comprised the majority of the instruments transferred out of Level 3 where inputs, which are significant to their valuation, became observable during the period. These inputs included spreads, prepayment speeds, default speeds, default severities, yield curves observable at commonly quoted intervals, and market corroborated inputs. There were no transfers into or out of Level 1.

All Level 1, 2 and 3 designations are made at the end of each accounting period.

37

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

Gains and losses (realized and unrealized) included in earnings related to Level 3 assets and liabilities for the three months ended September 30, 2015 and 2014 are reported on the Company’s consolidated statements of operations as follows:

	Three Months Ended September 30, 2015				Three Months Ended September 30, 2014
In millions	Total Gains (Losses) Included in Earnings		Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets and Liabilities still held as of September 30, 2015		Total Gains (Losses) Included in Earnings		Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets and Liabilities still held as of September 30, 2014
Revenues:
Unrealized gains (losses) on insured derivatives	$	21	$	21	$	48	$	14
Realized gains (losses) and other settlements on insured derivatives		(18)		-		(24)		-
Net gains (losses) on financial instruments at fair value and foreign exchange		(5)		(5)		9		10
Revenues of consolidated VIEs:
Net gains (losses) on financial instruments at fair value and foreign exchange		2		(4)		14		14
Total	$	-	$	12	$	47	$	38

Gains and losses (realized and unrealized) included in earnings relating to Level 3 assets and liabilities for the nine months ended September 30, 2015 and 2014 are reported on the Company’s consolidated statements of operations as follows:

	Nine Months Ended September 30, 2015				Nine Months Ended September 30, 2014
In millions	Total Gains (Losses) Included in Earnings		Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets and Liabilities still held as of September 30, 2015		Total Gains (Losses) Included in Earnings		Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets and Liabilities still held as of September 30, 2014
Revenues:
Unrealized gains (losses) on insured derivatives	$	121	$	109	$	863	$	(20)
Realized gains (losses) and other settlements on insured derivatives		(30)		-		(418)		-
Net gains (losses) on financial instruments at fair value and foreign exchange		26		29		(1)		(3)
Revenues of consolidated VIEs:
Net gains (losses) on financial instruments at fair value and foreign exchange		(9)		(17)		(12)		22
Total	$	108	$	121	$	432	$	(1)

38

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Fair Value of Financial Instruments (continued)

Fair Value Option

The Company elected to record at fair value certain financial instruments that have been consolidated in connection with the adoption of the accounting guidance for consolidation of VIEs, among others.

The following table presents the changes in fair value included in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 for financial instruments for which the fair value option was elected:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Investments carried at fair value(1)	$	(2)	$	-	$	(1)	$	2
Fixed-maturity securities held at fair value-VIE(2)		(20)		(3)		(93)		(71)
Loans receivable at fair value:
Residential mortgage loans(2)		(74)		(45)		(187)		(118)
Other loans(2)		-		(2)		-		(2)
Loan repurchase commitments(2)		6		1		15		6
Medium-term notes(1)		(3)		15		27		1
Variable interest entity notes (2)		122		87		283		256

(1) - Reported within “Net gains (losses) on financial instruments at fair value and foreign exchange” on MBIA’s consolidated statements of operations.

(2) - Reported within “Net gains (losses) on financial instruments at fair value and foreign exchange-VIE” on MBIA’s consolidated statements of operations.

The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding as of September 30, 2015 and December 31, 2014 for loans and notes for which the fair value option was elected:

	As of September 30, 2015						As of December 31, 2014
In millions	Contractual Outstanding Principal		Fair Value		Difference		Contractual Outstanding Principal		Fair Value		Difference
Loans receivable at fair value:
Residential mortgage loans	$	1,331	$	1,233	$	98	$	1,554	$	1,377	$	177
Residential mortgage loans (90 days or more past due)		194		11		183		227		54		173
Other loans		107		107		-		721		711		10
Other loans (90 days or more past due)		73		-		73		-		-		-
Total loans receivable at fair value	$	1,705	$	1,351	$	354	$	2,502	$	2,142	$	360
Variable interest entity notes	$	3,758	$	2,460	$	1,298	$	3,584	$	2,479	$	1,105
Medium-term notes	$	223	$	170	$	53	$	242	$	197	$	45

Substantially all gains and losses included in earnings during the periods ended September 30, 2015 and 2014 on loans receivable and VIE notes reported in the preceding table are attributable to credit risk. This is primarily due to the high rate of defaults on loans and the collateral supporting the VIE notes, resulting in depressed pricing of the financial instruments.

Note 7: Investments

Investments, excluding those elected under the fair value option, include debt and equity securities classified as either available-for-sale (“AFS”) or HTM. Other AFS investments primarily comprised money market funds.

39

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)

The following tables present the amortized cost, fair value, corresponding gross unrealized gains and losses and other-than-temporary impairments (“OTTI”) for AFS and HTM investments in the Company’s consolidated investment portfolio as of September 30, 2015 and December 31, 2014:

	September 30, 2015
In millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-Than- Temporary Impairments(1)
AFS Investments
Fixed-maturity investments:
U.S. Treasury and government agency	$	818	$	39	$	(1)	$	856	$	-
State and municipal bonds		1,779		83		(11)		1,851		-
Foreign governments		212		3		(2)		213		-
Corporate obligations		1,772		31		(104)		1,699		(88)
Mortgage-backed securities:
Residential mortgage-backed agency		1,034		14		(5)		1,043		-
Residential mortgage-backed non-agency		58		3		(5)		56		(4)
Commercial mortgage-backed		16		-		-		16		-
Asset-backed securities:
Collateralized debt obligations		82		-		(20)		62		-
Other asset-backed		371		2		(10)		363		-
Total fixed-maturity investments		6,142		175		(158)		6,159		(92)
Money market securities		111		-		-		111		-
Perpetual debt and equity securities		12		1		-		13		-
Total AFS investments	$	6,265	$	176	$	(158)	$	6,283	$	(92)
HTM Investments
Assets of consolidated VIEs:
Corporate obligations	$	2,707	$	12	$	(277)	$	2,442	$	-
Total HTM investments	$	2,707	$	12	$	(277)	$	2,442	$	-

(1) - Represents unrealized gains or losses on OTTI securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI.

40

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)

	December 31, 2014
In millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-Than- Temporary Impairments(1)
AFS Investments
Fixed-maturity investments:
U.S. Treasury and government agency	$	631	$	39	$	(3)	$	667	$	-
State and municipal bonds		1,644		94		(8)		1,730		-
Foreign governments		283		7		-		290		-
Corporate obligations		1,984		44		(92)		1,936		(86)
Mortgage-backed securities:
Residential mortgage-backed agency		1,116		17		(7)		1,126		-
Residential mortgage-backed non-agency		54		3		(4)		53		(4)
Commercial mortgage-backed		19		1		-		20		-
Asset-backed securities:
Collateralized debt obligations		113		-		(21)		92		-
Other asset-backed		231		3		(12)		222		-
Total fixed-maturity investments		6,075		208		(147)		6,136		(90)
Money market securities		422		-		-		422		-
Perpetual debt and equity securities		12		1		-		13		-
Total AFS investments	$	6,509	$	209	$	(147)	$	6,571	$	(90)
HTM Investments
Assets of consolidated VIEs:
Corporate obligations	$	2,757	$	77	$	(202)	$	2,632	$	-
Total HTM investments	$	2,757	$	77	$	(202)	$	2,632	$	-

(1) - Represents unrealized gains or losses on OTTI securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI.

The following table presents the distribution by contractual maturity of AFS and HTM fixed-maturity securities at amortized cost and fair value as of September 30, 2015. Contractual maturity may differ from expected maturity as borrowers may have the right to call or prepay obligations.

	AFS Securities				HTM Securities
					Consolidated VIEs
In millions	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	671	$	672	$	-	$	-
Due after one year through five years		1,442		1,460		-		-
Due after five years through ten years		923		953		-		-
Due after ten years		1,545		1,534		2,707		2,442
Mortgage-backed and asset-backed		1,561		1,540		-		-
Total fixed-maturity investments	$	6,142	$	6,159	$	2,707	$	2,442

Deposited and Pledged Securities

The fair value of securities on deposit with various regulatory authorities as of September 30, 2015 and December 31, 2014 was $10 million. These deposits are required to comply with state insurance laws.

Investment agreement obligations require the Company to pledge securities as collateral. Securities pledged in connection with investment agreements may not be repledged by the investment agreement counterparty. As of September 30, 2015 and December 31, 2014, the fair value of securities pledged as collateral for these investment agreements approximated $487 million and $532 million, respectively. The Company’s collateral as of September 30, 2015 consisted principally of U.S. Treasury and government agency and state and municipal bonds, and was primarily held with major U.S. banks. Additionally, the Company pledged cash and money market securities as collateral under investment agreements in the amount of $21 million and $26 million as of September 30, 2015 and December 31, 2014, respectively.

41

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)

Impaired Investments

The following tables present the gross unrealized losses related to AFS and HTM investments as of September 30, 2015 and December 31, 2014:

	September 30, 2015
	Less than 12 Months				12 Months or Longer				Total
In millions	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AFS Investments
Fixed-maturity investments:
U.S. Treasury and government agency	$	136	$	(1)	$	50	$	-	$	186	$	(1)
State and municipal bonds		351		(7)		42		(4)		393		(11)
Foreign governments		21		(1)		3		(1)		24		(2)
Corporate obligations		539		(13)		71		(91)		610		(104)
Mortgage-backed securities:
Residential mortgage-backed agency		264		(1)		181		(4)		445		(5)
Residential mortgage-backed non-agency		24		(1)		18		(4)		42		(5)
Commercial mortgage-backed		7		-		1		-		8		-
Asset-backed securities:
Collateralized debt obligations		-		-		61		(20)		61		(20)
Other asset-backed		203		(1)		43		(9)		246		(10)
Total fixed-maturity investments		1,545		(25)		470		(133)		2,015		(158)
Perpetual debt and equity securities		2		-		2		-		4		-
Total AFS investments	$	1,547	$	(25)	$	472	$	(133)	$	2,019	$	(158)
HTM Investments
Assets of consolidated VIEs:
Corporate obligations	$	1,096	$	(23)	$	321	$	(254)	$	1,417	$	(277)
Total HTM investments	$	1,096	$	(23)	$	321	$	(254)	$	1,417	$	(277)

	December 31, 2014
	Less than 12 Months				12 Months or Longer				Total
In millions	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AFS Investments
Fixed-maturity investments:
U.S. Treasury and government agency	$	197	$	-	$	175	$	(3)	$	372	$	(3)
State and municipal bonds		60		(1)		257		(7)		317		(8)
Foreign governments		20		-		-		-		20		-
Corporate obligations		468		(1)		251		(91)		719		(92)
Mortgage-backed securities:
Residential mortgage-backed agency		16		-		387		(7)		403		(7)
Residential mortgage-backed non-agency		10		-		19		(4)		29		(4)
Commercial mortgage-backed		4		-		6		-		10		-
Asset-backed securities:
Collateralized debt obligations		1		-		81		(21)		82		(21)
Other asset-backed		69		-		44		(12)		113		(12)
Total fixed-maturity investments		845		(2)		1,220		(145)		2,065		(147)
Perpetual debt and equity securities		6		-		-		-		6		-
Total AFS investments	$	851	$	(2)	$	1,220	$	(145)	$	2,071	$	(147)
HTM Investments
Assets of consolidated VIEs:
Corporate obligations	$	-	$	-	$	373	$	(202)	$	373	$	(202)
Total HTM investments	$	-	$	-	$	373	$	(202)	$	373	$	(202)

42

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)

Gross unrealized losses on AFS and HTM securities increased as of September 30, 2015 compared with December 31, 2014 primarily due to widening of credit spreads for corporate obligations.

With the weighting applied on the fair value of each security relative to the total fair value, the weighted average contractual maturity of securities in an unrealized loss position as of September 30, 2015 and December 31, 2014 was 19 and 13 years, respectively. As of September 30, 2015 and December 31, 2014, there were 66 and 143 securities, respectively, that were in an unrealized loss position for a continuous twelve-month period or longer, of which, fair values of 23 were below book value by more than 5%.

The following table presents the distribution of securities in an unrealized loss position for a continuous twelve-month period or longer where fair value was below book value by more than 5% as of September 30, 2015:

	AFS Securities						HTM Securities
Percentage of Fair Value Below Book Value	Number of Securities		Book Value (in millions)		Fair Value (in millions)		Number of Securities		Book Value (in millions)		Fair Value (in millions)
> 5% to 15%		7	$	13	$	13		-	$	-	$	-
> 15% to 25%		8		82		65		-		-		-
> 25% to 50%		5		5		3		1		575		321
> 50%		2		122		17		-		-		-
Total		22	$	222	$	98		1	$	575	$	321

The following table presents the fair value and gross unrealized loss by credit rating category of ABS, MBS and corporate obligations included in the Company’s consolidated AFS investment portfolio, as of September 30, 2015, for which fair value was less than amortized cost. The credit ratings are based on ratings from Moody’s as of September 30, 2015 or an alternate ratings source, such as S&P, when a security is not rated by Moody’s. For investments that are insured by various third-party guarantee insurers, the credit rating reflects the higher of the insurer’s rating or the underlying bond’s rating.

In millions	Aaa				Aa				A				Baa				Below Investment Grade				Not Rated				Total
Asset Type	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
ABS	$	153	$	(1)	$	88	$	(1)	$	1	$	-	$	2	$	-	$	62	$	(28)	$	1	$	-	$	307	$	(30)
MBS		446		(4)		2		-		3		-		5		-		26		(2)		13		(4)		495		(10)
Corporate obligations		78		(1)		179		(3)		260		(4)		71		(6)		8		-		14		(90)		610		(104)
Total	$	677	$	(6)	$	269	$	(4)	$	264	$	(4)	$	78	$	(6)	$	96	$	(30)	$	28	$	(94)	$	1,412	$	(144)

Corporate obligations in the table above include a security in the not rated category, for which the Company recorded an additional credit loss impairment for the nine months ended September 30, 2015. Refer to “Credit Loss Rollforward” section within the OTTI section for further information.

The total ABS, MBS and corporate obligations reported in the preceding table include those which are guaranteed by financial guarantors. In addition, the following table presents information on ABS and MBS guaranteed by the Company and third-party financial guarantors.

			Insured Securities Rated Below Investment Grade without the Effect of Guarantee
	Average Credit Rating with the Effect of Guarantee	Average Credit Rating without the Effect of Guarantee	(in millions)
Asset Type			Fair Value		Percentage
ABS	Below Investment Grade	Below Investment Grade	$	60		65%
MBS	Below Investment Grade	Below Investment Grade	$	19		100%

Refer to the table in the “Determination of Credit Loss Guaranteed by the Company and Other Third-Party Guarantors” section within the OTTI section of this note for information on the insured securities included in the table above.

The Company concluded that it does not have the intent to sell securities in an unrealized loss position and it is more likely than not, that it would not have to sell these securities before recovery of their cost basis. In making this conclusion, the Company examined the cash flow projections for its investment portfolios, the potential sources and uses of cash in its businesses, and the cash resources available to its business other than sales of securities. It also considered the existence of any risk management or other plans as of September 30, 2015 that would require the sale of impaired securities. Impaired securities that the Company intends to sell before the expected recovery of such securities’ fair values have been written down to fair value.

43

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)

Other-Than-Temporary Impairments

Evaluating AFS Securities for OTTI

The Company has an ongoing review process for all securities in its investment portfolio, including a quarterly assessment of OTTI. This evaluation includes both qualitative and quantitative considerations. In assessing whether a decline in value is related to a credit loss, the Company considers several factors, including but not limited to (i) the magnitude and duration of declines in fair value; (ii) the reasons for the declines in fair value, such as general credit spread movements in each asset-backed sector, transaction-specific changes in credit spreads, credit rating downgrades, modeled defaults, and principal and interest payment priorities within each investment structure; and (iii) any guarantees associated with a security such as those provided by financial guarantee insurance companies, including MBIA Corp. and National.

In calculating credit-related losses, the Company utilizes cash flow modeling based on the type of security. The Company’s cash flow analysis considers all sources of cash, including credit enhancement, that support the payment of amounts owed by an issuer of a security. This includes the consideration of cash expected to be provided by financial guarantors, including MBIA Corp. and National, resulting from an actual or potential insurance policy claim. In general, any change in the amount and/or timing of cash flows received or expected to be received, whether or not such cash flows are contractually defined, is reflected in the Company’s cash flow analysis for purposes of assessing an OTTI loss on an impaired security.

Each quarter, an internal committee, comprising staff that is independent of the Company’s evaluation process for determining OTTI of securities, reviews and approves the valuation of investments. Among other responsibilities, this committee ensures that the Company’s process for identifying and calculating OTTI, including the use of models and assumptions, is reasonable and complies with the Company’s internal policy.

Determination of Credit Loss on ABS, MBS and Corporate Obligations

ABS investments are evaluated for OTTI using historical collateral performance, deal waterfall and structural protections, credit ratings, and forward looking projections of collateral performance based on business and economic conditions specific to each collateral type and risk. The underlying collateral is evaluated to identify any specific performance concerns, and stress scenarios are considered in forecasting ultimate returns of principal. Based on this evaluation, if a principal default is projected for a security, estimated future cash flows are discounted at the security’s interest rate used to recognize interest income on the security. For CDO investments, the Company utilizes the same tools as its RMBS investments discussed below, aggregating the bond level cash flows to the CDO investment level. If the present value of cash flows is less than the Company’s amortized cost for the security, the difference is recorded as an OTTI loss.

RMBS investments are evaluated for OTTI using several quantitative tools. Loan level data is obtained and analyzed in a model that produces prepayment, default, and severity vectors. The model utilizes macro inputs, including housing price assumptions and interest rates. The vector outputs are used as inputs to a third-party cash flow model, which considers deal waterfall dynamics and structural features, to generate cash flows for an RMBS investment. The expected cash flows of the security are then discounted at the interest rate used to recognize interest income of the security to arrive at a present value amount. If the present value of the cash flows is less than the Company’s amortized cost for the investment, the difference is recorded as an OTTI loss.

Corporate obligation investments are evaluated for OTTI using credit analysis techniques. The Company’s analysis includes a detailed review of a number of quantitative and qualitative factors impacting the value of an individual security. These factors include the interest rate of the security (fixed or floating), the security’s current market spread, any collateral supporting the security, the security’s position in the issuer’s capital structure, and credit rating upgrades or downgrades. Additionally, these factors include an assessment of various issuer-related credit metrics including market capitalization, earnings, cash flow, capitalization, interest coverage, leverage, liquidity, management and a third-party quantitative default probability model. The Company’s analysis is augmented by comparing market prices for similar securities of other issuers in the same sector, as well as any recent corporate or government actions that may impact the ultimate return of principal. If the Company determines that a principal default is projected, a recovery analysis is performed using the above data. If the Company’s estimated recovery value for the security is less than its amortized cost, the difference is recorded as an OTTI loss.

44

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)

Determination of Credit Loss Guaranteed by the Company and Other Third-Party Guarantors

The Company does not record OTTI related to credit concerns about issuers of securities insured by MBIA Corp. and National since investors in these securities, including MBIA, are guaranteed payment of principal and interest when due by MBIA. Securities insured by the Company, whether or not owned by the Company, are evaluated for impairment as part of its insurance surveillance process and, therefore, losses on securities insured by the Company are recorded in accordance with its loss reserving policy. Refer to “Note 2: Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for information about the Company’s loss reserving policy and “Note 5: Loss and Loss Adjustment Expense Reserves” for information about loss reserves.

In considering cash expected to be provided from other third-party financial guarantors, the Company assesses the financial guarantor’s ability to make claim payments under a variety of scenarios that test the guarantor’s ultimate claims paying ability. The weighted average outcome of these scenarios, combined with the cash flows provided by the insured security, are used to determine the recoverability of the Company’s amortized cost.

The following table provides information about securities held by the Company as of September 30, 2015 that were in an unrealized loss position and insured by a financial guarantor, along with the amount of insurance loss reserves corresponding to the par amount owned by the Company:

In millions	Fair Value		Unrealized Loss		Insurance  Loss Reserve(2)
Asset-backed:
MBIA(1)	$	93	$	(28)	$	20
Mortgage-backed:
MBIA(1)		19		(1)		14
Other:
MBIA(1)		79		(4)		-
Other		1		-		-
Total other		80		(4)		-
Total	$	192	$	(33)	$	34

(1) - Includes investments insured by MBIA Corp. and National.

(2) - Insurance loss reserve estimates are based on the proportion of par value owned to the total amount of par value insured.

Credit Loss Rollforward

The portion of certain OTTI losses on fixed-maturity securities that does not represent credit losses is recognized in accumulated other comprehensive income (loss) (“AOCI”). For these impairments, the net amount recognized in earnings represents the difference between the amortized cost of the security and the net present value of its projected future discounted cash flows prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in AOCI. The following table presents the amount of credit loss impairments recognized in earnings on fixed-maturity securities held by MBIA as of the dates indicated, for which a portion of the OTTI losses was recognized in AOCI, and the corresponding changes in such amounts. The additional credit loss impairments for the three and nine months ended September 30, 2015 and 2014, primarily related to a corporate obligation that incurred liquidity concerns, ongoing credit risk and other adverse financial conditions.

In millions	Three Months Ended September 30,				Nine Months Ended September 30,
Credit Losses Recognized in Earnings Related to Other-Than-Temporary Impairments	2015		2014		2015		2014
Beginning balance	$	22	$	-	$	16	$	175
Additions for credit loss impairments recognized in the current period on securities not previously impaired		-		14		-		14
Additions for credit loss impairments recognized in the current period on securities previously impaired		3		-		9		-
Reductions for credit loss impairments previously recognized on securities sold during the period		-		-		-		(174)
Reductions for increases in cash flows expected to be collected over the remaining life of the security		-		-		-		(1)
Ending balance	$	25	$	14	$	25	$	14

45

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)

Sales of Available-for-Sale Investments

Gross realized gains and losses are recorded within “Net gains (losses) on financial instruments at fair value and foreign exchange” on the Company’s consolidated statements of operations. The proceeds and the gross realized gains and losses from sales of fixed-maturity securities held as AFS for the three and nine months ended September 30, 2015 and 2014 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Proceeds from sales	$	251	$	131	$	630	$	594
Gross realized gains	$	6	$	4	$	14	$	61
Gross realized losses	$	(2)	$	-	$	(11)	$	(13)

Note 8: Derivative Instruments

Overview

MBIA has entered into derivative instruments through its financial guarantee of CDS and certain other derivative contracts for purposes of managing risks associated with existing assets and liabilities. In certain instances, the Company purchased or issued securities that contain embedded derivatives that were separated from the host contract and accounted for as derivative instruments. In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determined by the location of the related security. Derivative instruments are recorded at fair value on the Company’s consolidated balance sheets with the changes in fair value recorded on the Company’s consolidated statements of operations within “Unrealized gains (losses) on insured derivatives,” for the insured derivatives, or “Net gains (losses) on financial instruments at fair value and foreign exchange” for the embedded derivatives. Refer to “Note 6: Fair Value of Financial Instruments” for the method of determining the fair value of derivative instruments.

U.S. Public Finance Insurance

The Company’s derivative exposure within its U.S. public finance insurance operations primarily consists of insured interest rate and inflation-linked swaps related to insured U.S. public finance debt issues. These derivatives do not qualify for the financial guarantee scope exception and are accounted for as derivative instruments.

International and Structured Finance Insurance

The Company entered into derivative instruments that it viewed as an extension of its core financial guarantee business that do not qualify for the financial guarantee scope exception and, therefore, are accounted for as derivative instruments. These insured CDS contracts, primarily referencing corporate obligations, ABS, RMBS, CMBS, CRE loans and CDOs, are intended to be held for the entire term of the contract absent a negotiated settlement with the counterparty. The Company’s derivative exposure within its international and structured finance insurance segment also includes insured interest rate and inflation-linked swaps related to insured debt issues.

Changes in the fair value of derivatives, excluding insured derivatives, are recorded each period in current earnings within “Net gains (losses) on financial instruments at fair value and foreign exchange.” Changes in the fair value of insured derivatives are recorded each period in current earnings within “Net change in fair value of insured derivatives.” The net change in the fair value of the Company’s insured derivatives has two primary components: (i) realized gains (losses) and other settlements on insured derivatives and (ii) unrealized gains (losses) on insured derivatives. “Realized gains (losses) and other settlements on insured derivatives” include (i) premiums received and receivable on sold CDS contracts, (ii) premiums paid and payable to reinsurers in respect to CDS contracts, (iii) net amounts received or paid on reinsurance commutations, (iv) losses paid and payable to CDS contract counterparties due to the occurrence of a credit event or settlement agreement, (v) losses recovered and recoverable on purchased CDS contracts due to the occurrence of a credit event or settlement agreement and (vi) fees relating to CDS contracts. “Unrealized gains (losses) on insured derivatives” includes all other changes in fair value of the insured derivative contracts.

The Company has also entered into a derivative contract as a result of a commutation occurring in 2014. Changes in the fair value of the Company’s non-insured derivative are included in “Net gains (losses) on financial instruments at fair value and foreign exchange” on the Company’s consolidated statements of operations.

46

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 8: Derivative Instruments (continued)

Variable Interest Entities

VIEs consolidated by the Company have entered into derivative instruments consisting of interest rate swaps, interest rate caps and cross currency swaps. Interest rate swaps and interest rate caps are entered into to mitigate the risks associated with fluctuations in interest rates or fair values of certain contracts. Cross currency swaps are entered into to manage the variability in cash flows resulting from fluctuations in foreign currency rates.

Corporate

The Company has entered into derivative instruments primarily consisting of interest rate swaps. Interest rate swaps are entered into to manage the risks associated with fluctuations in interest rates or fair values of certain contracts.

Changes in the fair value of these derivatives are recorded on the Company’s consolidated statements of operations within “Net gains (losses) on financial instruments at fair value and foreign exchange.”

Credit Derivatives Sold

The following tables present information about credit derivatives sold by the Company’s insurance operations that were outstanding as of September 30, 2015 and December 31, 2014. Credit ratings represent the lower of underlying ratings assigned to the collateral by Moody’s, S&P or MBIA.

$ in millions	As of September 30, 2015
	Notional Value
Credit Derivatives Sold	Weighted Average Remaining Expected Maturity		AAA		AA		A		BBB		Below Investment Grade		Total Notional		Fair Value Asset (Liability)
Insured credit default swaps		2.1 Years	$	2,018	$	-	$	304	$	-	$	996	$	3,318	$	(121)
Insured swaps		16.7 Years		-		111		2,739		957		21		3,828		(3)
Total notional			$	2,018	$	111	$	3,043	$	957	$	1,017	$	7,146
Total fair value			$	-	$	-	$	(3)	$	(2)	$	(119)			$	(124)

$ in millions	As of December 31, 2014
	Notional Value
Credit Derivatives Sold	Weighted Average Remaining Expected Maturity		AAA		AA		A		BBB		Below Investment Grade		Total Notional		Fair Value Asset (Liability)
Insured credit default swaps		1.6 Years	$	6,914	$	246	$	968	$	193	$	1,160	$	9,481	$	(244)
Insured swaps		16.7 Years		-		117		2,935		970		22		4,044		(2)
Total notional			$	6,914	$	363	$	3,903	$	1,163	$	1,182	$	13,525
Total fair value			$	(2)	$	-	$	(2)	$	(2)	$	(240)			$	(246)

Internal credit ratings assigned by MBIA on the underlying collateral are derived by the Company’s surveillance group. In assigning an internal rating, current status reports from issuers and trustees, as well as publicly available transaction-specific information, are reviewed. Also, where appropriate, cash flow analyses and collateral valuations are considered. The maximum potential amount of future payments (undiscounted) on CDS contracts are estimated as the notional value plus any additional debt service costs, such as interest or other amounts owing on CDS contracts. The maximum amount of future debt service payments that MBIA may be required to make under these guarantees as of September 30, 2015 is $3.5 billion. The maximum potential amount of future payments (undiscounted) on insured swaps are estimated as the notional value of such contracts.

MBIA may hold recourse provisions with third parties in derivative instruments through both reinsurance and subrogation rights. MBIA’s reinsurance arrangements provide that in the event MBIA pays a claim under a guarantee of a derivative contract, MBIA has the right to collect amounts from any reinsurers that have reinsured the guarantee on either a proportional or non-proportional basis, depending upon the underlying reinsurance agreement. MBIA may also have recourse through subrogation rights whereby if MBIA makes a claim payment, it may be entitled to any rights of the insured counterparty, including the right to any assets held as collateral.

47

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 8: Derivative Instruments (continued)

Counterparty Credit Risk

The Company manages counterparty credit risk on an individual counterparty basis through master netting agreements covering derivative instruments in the corporate segment. These agreements allow the Company to contractually net amounts due from a counterparty with those amounts due to such counterparty when certain triggering events occur. The Company only executes swaps under master netting agreements, which typically contain mutual credit downgrade provisions that generally provide the ability to require assignment or termination in the event either MBIA or the counterparty is downgraded below a specified credit rating.

Under these agreements, the Company may receive or provide U.S. Treasury and other highly rated securities or cash to secure counterparties’ exposure to the Company or its exposure to counterparties, respectively. Such collateral is available to the holder to pay for replacing the counterparty in the event that the counterparty defaults. As of September 30, 2015, the Company did not hold cash collateral to derivative counterparties but posted cash collateral to derivative counterparties of $80 million. Of this amount, $61 million is netted within “Derivative liabilities” and $19 million is included within “Other liabilities” as cash collateral netted against accrued interest on derivative liabilities. As of December 31, 2014, the Company did not hold cash collateral to derivative counterparties but posted cash collateral to derivative counterparties of $12 million. All of the $12 million is included within “Other liabilities” as cash collateral netted against accrued interest on derivative liabilities. As of September 30, 2015, the Company had securities with a fair value of $245 million posted to derivative counterparties and this amount is included within “Fixed-maturity securities held as available-for-sale, at fair value” on the Company’s consolidated balance sheet. As of December 31, 2014, the Company had securities with a fair value of $198 million posted to derivative counterparties and this amount is included within “Fixed-maturity securities held as available-for-sale, at fair value” on the Company’s consolidated balance sheet.

As of September 30, 2015 and December 31, 2014, the fair value on one Credit Support Annex (“CSA”) was $3 million and $2 million, respectively. This CSA governs collateral posting requirements between MBIA and its derivative counterparties. The Company did not receive collateral due to the Company’s credit rating, which was below the CSA minimum credit ratings level for holding counterparty collateral. As of September 30, 2015 and December 31, 2014, the counterparty was rated A2 by Moody’s and A by S&P.

Financial Statement Presentation

The fair value of amounts recognized for eligible derivative contracts executed with the same counterparty under a master netting agreement, including any cash collateral that may have been received or posted by the Company, is presented on a net basis in accordance with accounting guidance for the offsetting of fair value amounts related to derivative instruments. Insured CDS and insured swaps are not subject to master netting agreements. VIE derivative assets and liabilities are not presented net of any master netting agreements. Counterparty netting of derivative assets and liabilities offsets balances in “Interest rate swaps” as of September 30, 2015 and December 31, 2014.

As of September 30, 2015, the total fair value of the Company’s derivative assets, after counterparty netting of $1 million, was $15 million, of which $9 million was reported within “Other assets” and “Derivative assets” presented under “Assets of consolidated variable interest entities” on the Company’s consolidated balance sheets. Embedded derivatives of $6 million were reported within “Medium-term notes” on the Company’s consolidated balance sheets.

As of September 30, 2015, the total fair value of the Company’s derivative liabilities, after counterparty netting of $1 million and cash collateral posted by the company of $61 million, was $411 million, of which $396 million was reported within “Derivative liabilities” and “Derivative liabilities” presented under “Liabilities of consolidated variable interest entities” on the Company’s consolidated balance sheets. Embedded derivatives of $15 million were reported within “Medium-term notes” on the Company’s consolidated balance sheets.

48

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 8: Derivative Instruments (continued)

The following table presents the total fair value of the Company’s derivative assets and liabilities by instrument and balance sheet location, before counterparty netting and posting of cash collateral, as of September 30, 2015:

In millions			Derivative Assets(1)			Derivative Liabilities(1)
Derivative Instruments	Notional Amount Outstanding		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Not designated as hedging instruments:
Insured credit default swaps	$	3,318	Other assets	$	-	Derivative liabilities	$	(121)
Insured swaps		3,828	Other assets		-	Derivative liabilities		(3)
Interest rate swaps		1,155	Other assets		4	Derivative liabilities		(255)
Interest rate swaps-VIE		903	Derivative assets-VIE		-	Derivative liabilities-VIE		(57)
Interest rate swaps-embedded		406	Medium-term notes		6	Medium-term notes		(15)
Currency swaps-VIE		81	Derivative assets-VIE		6	Derivative liabilities-VIE		-
All other		83	Other assets		-	Derivative liabilities		(22)
All other-VIE		241	Derivative assets-VIE		-	Derivative liabilities-VIE		-
All other-embedded		12	Other investments		-	Other investments		-
Total non-designated derivatives	$	10,027		$	16		$	(473)

(1) - In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determined by the location of the related host contract.

As of December 31, 2014, the total fair value of the Company’s derivative assets, after counterparty netting of $81 million, was $10 million, of which $2 million was reported within “Other assets” on the Company’s consolidated balance sheets. Embedded derivatives of $8 million were reported within “Medium-term notes” on the Company’s consolidated balance sheets.

As of December 31, 2014, the total fair value of the Company’s derivative liabilities, after counterparty netting of $81 million was $456 million, of which $437 million was reported within “Derivative liabilities” and “Derivative liabilities” presented under “Liabilities of consolidated variable interest entities” on the Company’s consolidated balance sheets. Embedded derivatives of $19 million were reported within “Medium-term notes” and “Other investments” on the Company’s consolidated balance sheets.

The following table presents the total fair value of the Company’s derivative assets and liabilities by instrument and balance sheet location, before counterparty netting and posting of cash collateral, as of December 31, 2014:

In millions			Derivative Assets(1)			Derivative Liabilities(1)
Derivative Instruments	Notional Amount Outstanding		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Not designated as hedging instruments:
Insured credit default swaps	$	9,481	Other assets	$	-	Derivative liabilities	$	(244)
Insured swaps		4,044	Other assets		-	Derivative liabilities		(2)
Interest rate swaps		1,450	Other assets		83	Derivative liabilities		(248)
Interest rate swaps-embedded		437	Medium-term notes		8	Medium-term notes		(19)
Currency swaps-VIE		91	Derivative assets-VIE		-	Derivative liabilities-VIE		-
All other		83	Other assets		-	Derivative liabilities		(24)
All other-VIE		241	Derivative assets-VIE		-	Derivative liabilities-VIE		-
All other-embedded		12	Other investments		-	Other investments		-
Total non-designated derivatives	$	15,839		$	91		$	(537	)

(1) - In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determined by the location of the related host contract.

49

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 8: Derivative Instruments (continued)

The following table presents the effect of derivative instruments on the consolidated statements of operations for the three months ended September 30, 2015:

In millions
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Net Gain (Loss) Recognized in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	21
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(18)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(45)
Interest rate swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		8
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		4
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		(1)
Total		$	(31	)

The following table presents the effect of derivative instruments on the consolidated statements of operations for the three months ended September 30, 2014:

In millions
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Net Gain (Loss) Recognized in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	48
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(24)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(7)
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		4
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		(5)
Total		$	16

The following table presents the effect of derivative instruments on the consolidated statements of operations for the nine months ended September 30, 2015:

In millions
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Net Gain (Loss) Recognized in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	121
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(30)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(112)
Interest rate swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		18
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		5
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		2
Total		$	4

The following table presents the effect of derivative instruments on the consolidated statements of operations for the nine months ended September 30, 2014:

In millions
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Net Gain (Loss) Recognized in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	848
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(387)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(52)
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		4
All other	Unrealized gains (losses) on insured derivatives		15
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		(8)
All other	Realized gains (losses) and other settlements on insured derivatives		(30)
Total		$	390

50

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 9: Income Taxes

The Company’s income taxes and the related effective tax rates for the three and nine months ended September 30, 2015 and 2014 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Income (loss) before income taxes	$	(55)	$	148	$	150	$	607
Provision (benefit) for income taxes	$	(20)	$	(25)	$	52	$	58
Effective tax rate		36.4%		-16.9%		34.7%		9.6%

For the nine months ended September 30, 2015, the Company’s effective tax rate applied to its income before income taxes approximates the U.S. statutory tax rate. For the nine months ended September 30, 2014, the Company’s effective tax rate applied to its income before income taxes was lower than the U.S. statutory tax rate primarily as a result of the decrease in the valuation allowance against its deferred tax asset.

The Company’s 2014 and 2015 provision for income taxes for interim financial periods is not based on an estimated annual effective rate due to the variability in fair value of its derivative liabilities, which prevents the Company from projecting a reliable estimated annual effective tax rate and income before taxes for either year. A discrete calculation of the provision is performed for each interim period.

Deferred Tax Asset, Net of Valuation Allowance

The Company establishes a valuation allowance against its deferred tax asset when it is more likely than not that all or a portion of the deferred tax asset will not be realized. All evidence, both positive and negative, needs to be identified and considered in making the determination. Future realization of the existing deferred tax asset ultimately depends, in part, on the generation of sufficient taxable income of appropriate character (for example, ordinary income versus capital gains) within the carryforward period available under the tax law.

As of September 30, 2015 and December 31, 2014, the Company’s net deferred tax asset was approximately $1.0 billion, with no valuation allowance as a result of a tax planning strategy to use unrealized gains that are included in “Accumulated other comprehensive income (loss)” on the Company’s consolidated balance sheets against the deferred tax asset related to any remaining asset impairments.

In accordance with accounting guidance for income taxes, the netting of deferred taxes between different taxpaying jurisdictions is not permitted. As of September 30, 2015, there was also a non U.S. deferred tax liability of $29 million included in “Other liabilities” on the Company’s consolidated balance sheet.

Tax Sharing Agreement

The Company has a tax sharing agreement among its members effective January 1, 1987. The agreement was amended and restated effective September 8, 2011 to change the method of calculating each domestic insurer’s tax liability to the method permitted by paragraph 3(a) of Department Circular Letter #33 (1979). The agreement was submitted to the NYSDFS for review and non-disapproval pursuant to Section 1505 of the New York Insurance Law. The Company’s tax sharing agreement is filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for informational purposes only. Refer to “Note 2: Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for further discussion on the Company’s tax sharing agreement.

Accounting for Uncertainty in Income Taxes

The Company’s policy is to record and disclose any change in unrecognized tax benefit (“UTB”) and related interest and/or penalties to income tax in the consolidated statements of operations. The Company includes interest as a component of income tax expense. As of September 30, 2015 and December 31, 2014, the Company had no UTB outstanding.

MBIA and its U.S. subsidiaries file a U.S. consolidated federal income tax return. Federal income tax returns through 2011 have been examined or surveyed.

The tax authorities in the United Kingdom have been auditing MBIA UK for tax years 2005 through 2012. In April of 2015, MBIA UK received correspondence from the HM Revenue & Customs closing the audit for the years under examination with no change in taxable income.

51

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 9: Income Taxes (continued)

As of September 30, 2015, the Company’s net operating loss (“NOL”) is approximately $3.0 billion. The NOL will expire between tax years 2029 through 2034. As of September 30, 2015, the Company has an alternative minimum tax credit carryforward of $22 million, which does not expire.

Note 10: Business Segments

As defined by segment reporting, an operating segment is a component of a company (i) that engages in business activities from which it earns revenue and incurs expenses, (ii) whose operating results are regularly reviewed by the Chief Operating Decision Maker to assess the performance of the segment and to make decisions about the allocation of resources to the segment and, (iii) for which discrete financial information is available.

The Company manages its businesses across three operating segments: 1) U.S. public finance insurance; 2) international and structured finance insurance; and 3) corporate. The Company’s U.S. public finance insurance business is operated through National and its international and structured finance insurance business is operated through MBIA Corp. Prior to 2015, the Company managed two other operating segments, advisory services and conduit. During 2014, the Company dissolved its conduit segment by extinguishing the remaining liabilities of the segment and liquidating the Company’s remaining conduit, Meridian, and effective January 1, 2015, the Company exited its advisory services business with the completed sale of Cutwater to a subsidiary of The Bank of New York Mellon Corporation.

The following sections provide a description of each of the Company’s reportable operating segments.

U.S. Public Finance Insurance

The Company’s U.S. public finance insurance segment is principally conducted through National. The financial guarantees issued by National provide unconditional and irrevocable guarantees of the payment of the principal of, and interest or other amounts owing on, U.S. public finance insured obligations when due. The obligations are not subject to acceleration, except that National may have the right, at its discretion, to accelerate insured obligations upon default or otherwise. National issues financial guarantees for municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, student loan issuers, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. Municipal bonds and privately issued bonds used for the financing of public purpose projects are generally supported by taxes, assessments, fees or tariffs related to the use of these projects, lease payments or other similar types of revenue streams.

International and Structured Finance Insurance

The Company’s international and structured finance insurance segment is principally conducted through MBIA Corp. The financial guarantees issued by MBIA Corp. generally provide unconditional and irrevocable guarantees of the payment of principal of, and interest or other amounts owing on, non-U.S. public finance and global structured finance insured obligations when due, or in the event MBIA Corp. has the right, at its discretion, to accelerate insured obligations upon default or otherwise, upon MBIA Corp.’s acceleration. Certain guaranteed investment contracts written by MBIA Inc. are insured by MBIA Corp., and if MBIA Inc. were to have insufficient assets to pay amounts due upon maturity or termination, MBIA Corp. would make such payments. MBIA Corp. also insures debt obligations of the following affiliates:

• MBIA Inc.;

• MBIA Global Funding, LLC (“GFL”);

• MBIA Investment Management Corp. (“IMC”); and

• LaCrosse Financial Products, LLC, a wholly-owned affiliate, in which MBIA Corp. has written insurance policies guaranteeing the obligations under CDS, including termination payments that may become due upon certain events including the insolvency or payment default of the financial guarantor or the CDS issuer.

52

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 10: Business Segments (continued)

MBIA Corp. insures non-U.S. public finance and global structured finance insured obligations, including asset-backed obligations. MBIA Corp. has insured sovereign-related and sub-sovereign bonds, utilities, privately issued bonds used for the financing of projects that include toll roads, bridges, airports, public transportation facilities, and other types of infrastructure projects serving a substantial public purpose. Global structured finance and asset-backed obligations typically are securities repayable from expected cash flows generated by a specified pool of assets, such as residential and commercial mortgages, insurance policies, consumer loans, corporate loans and bonds, trade and export receivables, and leases for equipment, aircraft and real estate property. MBIA Corp. has also written policies guaranteeing obligations under certain other derivative contracts, including termination payments that may become due upon certain insolvency or payment defaults of the financial guarantor or the issuer. The Company is no longer insuring new credit derivative contracts except for transactions related to the restructuring or reduction of existing derivative exposure. MBIA Corp. has not written any meaningful amount of business since 2008.

Corporate

The Company’s corporate segment consists of general corporate activities, including providing general support services to MBIA’s other operating businesses and asset and capital management. General support services are provided by the Company’s service company, MBIA Services Corporation (“MBIA Services”). MBIA Services provides various support services including, among others, management, legal, accounting, treasury, information technology, and insurance portfolio surveillance, on a fee-for-service basis. Capital management includes activities related to servicing obligations issued by MBIA Inc. and its subsidiaries, GFL and IMC. MBIA Inc. issued debt to finance the operations of the MBIA group. It also provided customized products for funds that are invested as part of asset-backed or structured product transactions. GFL raised funds through the issuance of MTNs with varying maturities, which were in turn guaranteed by MBIA Corp. GFL lent the proceeds of these MTN issuances to MBIA Inc. IMC, along with MBIA Inc., provided customized investment agreements, guaranteed by MBIA Corp., for bond proceeds and other public funds for such purposes as construction, loan origination, escrow and debt service or other reserve fund requirements. The company ceased issuing these MTNs and investment agreements and the outstanding liability balances and corresponding asset balances have declined over time as liabilities mature, terminate or are retired. All of the debt within the corporate segment is managed collectively and is serviced by the financial resources available to MBIA Inc. Asset management activities provide for opportunities in investments and provide general liquidity support to MBIA Inc.

Advisory Services

The advisory services segment primarily consisted of the operations of Cutwater Investor Services Corp. and Cutwater Asset Management Corp. and was a fee-for-service investment management business focused on fixed-income markets. Effective with the January 1, 2015 sale of Cutwater, MBIA has no business activities within its advisory services segment.

Conduit

The Company’s conduit segment was operated through Meridian and administered through MBIA Asset Finance, LLC. Assets financed by Meridian were funded by MTNs. In 2014, the Company extinguished the remaining liabilities of this segment and liquidated Meridian.

53

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 10: Business Segments (continued)

Segments Results

The following tables provide the Company’s segment results for the three months ended September 30, 2015 and 2014:

	Three Months Ended September 30, 2015
In millions	U.S. Public Finance Insurance		Corporate		International and Structured Finance Insurance		Eliminations			Consolidated
Revenues(1)	$	90	$	5	$	28	$	-		$	123
Net change in fair value of insured derivatives		-		-		3		-			3
Net gains (losses) on financial instruments at fair value and foreign exchange		1		(45)		(11)		-			(55)
Net investment losses related to other-than-temporary impairments		(3)		-		-		-			(3)
Other net realized gains (losses)		-		(1)		-		-			(1)
Revenues of consolidated VIEs		-		-		25		-			25
Inter-segment revenues(2)		8		16		15		(39)			-
Total revenues		96		(25)		60		(39)			92
Losses and loss adjustment		(7)		-		46		-			39
Operating		11		18		17		-			46
Interest		-		24		25		-			49
Expenses of consolidated VIEs		-		-		13		-			13
Inter-segment expenses(2)		21		1		17		(39)			-
Total expenses		25		43		118		(39)			147
Income (loss) before income taxes		71		(68)		(58)		-			(55)
Provision (benefit) for income taxes		25		(25)		(20)		-			(20)
Net income (loss)	$	46	$	(43)	$	(38)	$	-		$	(35)
Identifiable assets	$	5,432	$	2,514	$	10,084	$	(2,979)	(3)	$	15,051

(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees.

(2) - Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables.

(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

	Three Months Ended September 30, 2014
In millions	U.S. Public Finance Insurance		Corporate		International and Structured Finance Insurance		Advisory Services		Eliminations			Consolidated
Revenues(1)	$	100	$	7	$	67	$	3	$	-		$	177
Net change in fair value of insured derivatives		-		-		24		-		-			24
Net gains (losses) on financial instruments at fair value and foreign exchange		2		68		(13)		-		-			57
Net investment losses related to other-than-temporary impairments		(14)		-		-		-		-			(14)
Net gains (losses) on Other net realized gains (losses)		18		1		11		-		-			30
Revenues of consolidated VIEs		-		-		21		(4)		-			17
Inter-segment revenues(2)		7		12		12		5		(36)			-
Total revenues		113		88		122		4		(36)			291
Losses and loss adjustment		(8)		-		28		-		-			20
Operating		9		25		17		8		-			59
Interest		-		26		26		-		-			52
Expenses of consolidated VIEs		-		-		12		-		-			12
Inter-segment expenses(2)		18		-		16		2		(36)			-
Total expenses		19		51		99		10		(36)			143
Income (loss) before income taxes		94		37		23		(6)		-			148
Provision (benefit) for income taxes		38		(70)		9		(2)		-			(25)
Net income (loss)	$	56	$	107	$	14	$	(4)	$	-		$	173
Identifiable assets	$	6,132	$	2,735	$	10,373	$	481	$	(3,520)	(3)	$	16,201

(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.

(2) - Represents intercompany premium income and expense, intercompany asset management fees and expenses and intercompany interest income and expense pertaining to intercompany receivables and payables.

(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

54

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 10: Business Segments (continued)

The following tables provide the Company’s segment results for the nine months ended September 30, 2015 and 2014:

	Nine Months Ended September 30, 2015
In millions	U.S. Public Finance Insurance		Corporate		International and Structured Finance Insurance		Eliminations			Consolidated
Revenues(1)	$	288	$	18	$	86	$	-		$	392
Net change in fair value of insured derivatives		-		-		91		-			91
Net gains (losses) on financial instruments at fair value and foreign exchange		4		35		(19)		-			20
Net investment losses related to other-than-temporary impairments		(9)		(1)		-		-			(10)
Net gains (losses) on extinguishment of debt		-		(1)		-		-			(1)
Other net realized gains (losses)		(4)		22		-		-			18
Revenues of consolidated VIEs		-		-		46		-			46
Inter-segment revenues(2)		26		53		48		(127)			-
Total revenues		305		126		252		(127)			556
Losses and loss adjustment		(5)		-		84		-			79
Operating		29		56		54		-			139
Interest		-		73		76		-			149
Expenses of consolidated VIEs		-		-		39		-			39
Inter-segment expenses(2)		67		3		50		(120)			-
Total expenses		91		132		303		(120)			406
Income (loss) before income taxes		214		(6)		(51)		(7)			150
Provision (benefit) for income taxes		74		-		(19)		(3)			52
Net income (loss)	$	140	$	(6)	$	(32)	$	(4)		$	98
Identifiable assets	$	5,432	$	2,514	$	10,084	$	(2,979)	(3)	$	15,051

(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees.

(2) - Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables.

(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

55

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 10: Business Segments (continued)

	Nine Months Ended September 30, 2014
In millions	U.S. Public Finance Insurance		Corporate		International and Structured Finance Insurance		Advisory Services		Conduit		Eliminations			Consolidated
Revenues(1)	$	272	$	30	$	142	$	10	$	-	$	-		$	454
Net change in fair value of insured derivatives		1		-		445		-		-		-			446
Net gains (losses) on financial instruments at fair value and foreign exchange		21		56		(11)		(3)		-		-			63
Net investment losses related to other-than-temporary impairments		(14)		-		-		-		-		-			(14)
Net gains (losses) on extinguishment of debt		-		3		-		-		-		-			3
Other net realized gains (losses)		18		2		11		-		-		-			31
Revenues of consolidated VIEs		-		-		72		(4)		4		-			72
Inter-segment revenues(2)		30		38		36		17		(1)		(120)			-
Total revenues		328		129		695		20		3		(120)			1,055
Losses and loss adjustment		(5)		-		87		-		-		-			82
Operating		29		64		49		30		-		-			172
Interest		-		78		80		-		-		-			158
Expenses of consolidated VIEs		-		-		36		-		-		-			36
Inter-segment expenses(2)		56		7		51		5		9		(128)			-
Total expenses		80		149		303		35		9		(128)			448
Income (loss) before income taxes		248		(20)		392		(15)		(6)		8			607
Provision (benefit) for income taxes		90		(167)		137		(3)		(2)		3			58
Net income (loss)	$	158	$	147	$	255	$	(12)	$	(4)	$	5		$	549
Identifiable assets	$	6,132	$	2,735	$	10,373	$	481	$	-	$	(3,520)	(3)	$	16,201

(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.

(2) - Represents intercompany premium income and expense, intercompany asset management fees and expenses and intercompany interest income and expense pertaining to intercompany receivables and payables.

(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

Premiums on financial guarantees and insured derivatives reported within the Company’s insurance segments are generated within and outside the U.S. The following table summarizes premiums earned on financial guarantees and insured derivatives by geographic location of risk for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Total premiums earned:
United States	$	71	$	78	$	232	$	216
United Kingdom		8		9		23		28
Europe (excluding United Kingdom)		2		2		4		6
Internationally diversified		1		4		3		7
Central and South America		7		26		20		42
Asia		-		1		2		3
Other		1		2		4		6
Total	$	90	$	122	$	288	$	308

Note 11: Earnings Per Share

Earnings per share is calculated using the two-class method in which earnings are allocated to common stock and participating securities based on their rights to receive nonforfeitable dividends or dividend equivalents. The Company grants restricted stock and restricted stock units to certain employees and non-employee directors in accordance with the Company’s long-term incentive programs, which entitle the participants to receive nonforfeitable dividends or dividend equivalents during the vesting period on the same basis as those dividends are paid to common shareholders. These unvested stock awards represent participating securities. During periods of net income, the calculation of earnings per share exclude the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. During periods of net loss, no effect is given to participating securities in the numerator and the denominator excludes the dilutive impact of these securities since they do not share in the losses of the Company.

56

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 11: Earnings Per Share (continued)

Basic earnings per share excludes dilution and is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the dilutive effect of all stock options, warrants and unvested restricted stock outstanding during the period that could potentially result in the issuance of common stock. The dilution from stock options, warrants and unvested restricted stock are calculated by applying the two-class method and using the treasury stock method. The treasury stock method assumes the proceeds from the exercise of stock options and warrants or the unrecognized compensation expense from unvested restricted stock will be used to purchase shares of the Company’s common stock at the average market price during the period. For the three months ended September 30, 2015 and 2014, there were 18,807,517 and 32,450,109, respectively, of stock options, warrants and unvested restricted stock outstanding that were antidilutive. For the nine months ended September 30, 2015 and 2014, there were 17,975,504 and 31,817,467, respectively of stock options, warrants and unvested restricted stock outstanding that were antidilutive.

The following table presents the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions except share and per share amounts	2015		2014		2015		2014
Basic earnings per share:
Net income (loss)	$	(35)	$	173	$	98	$	549
Less: undistributed earnings allocated to participating securities		-		5		3		15
Net income (loss) available to common shareholders		(35)		168		95		534
Basic weighted average shares(1)		155,239,723		187,104,785		169,610,370		188,428,870
Net income (loss) per basic common share:	$	(0.23)	$	0.90	$	0.56	$	2.83
Diluted earnings per share:
Net income (loss)		(35)		173		98		549
Less: undistributed earnings allocated to participating securities		-		5		3		14
Less: mark-to-market gain (loss) on warrants		-		18		-		32
Net income (loss) available to common shareholders		(35)		150		95		503
Basic weighted average shares(1)		155,239,723		187,104,785		169,610,370		188,428,870
Effect of common stock equivalents:
Stock options		-		1,029,777		956,016		1,126,134
Warrants		-		289,756		-		2,061,719
Diluted weighted average shares		155,239,723		188,424,318		170,566,386		191,616,723
Net income (loss) per diluted common share:	$	(0.23)	$	0.80	$	0.55	$	2.62

(1) - Includes 600,826 and 270,142 of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the three months ended September 30, 2015 and 2014, respectively. Includes 619,889 and 315,018 of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the nine months ended September 30, 2015 and 2014, respectively.

57

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 12: Accumulated Other Comprehensive Income

The following table presents the changes in the components of AOCI for the nine months ended September 30, 2015:

In millions	Unrealized Gains (Losses) on AFS Securities, Net		Foreign Currency Translation, Net		Total
Balance, December 31, 2014	$	34	$	(13)	$	21
Other comprehensive income (loss) before reclassifications		(27)		(13)		(40)
Amounts reclassified from AOCI		9		-		9
Total other comprehensive income (loss)		(18)		(13)		(31)
Balance, September 30, 2015	$	16	$	(26)	$	(10)

The following table presents the details of the reclassifications from AOCI for the three and nine months ended September 30, 2015 and 2014:

In millions	Amounts Reclassified from AOCI
	Three Months Ended September 30,				Nine Months Ended September 30,
Details about AOCI Components	2015		2014		2015		2014		Affected Line Item on the Consolidated Statements of Operations
Unrealized gains (losses) on AFS securities:
Realized gain (loss) on sale of securities	$	(5)	$	-	$	(6)	$	(20)	Net gains (losses) on financial instruments at fair value and foreign exchange
OTTI		(3)		-		(3)		-	Net investment losses related to OTTI
Amortization on securities		(1)		-		(4)		(2)	Net investment income
		(9)		-		(13)		(22)	Income (loss) before income taxes
		(2)		-		(4)		(8)	Provision (benefit) for income taxes
		(7)		-		(9)		(14)	Net income (loss)
Foreign currency translation:
Realized gain (loss) on liquidation of foreign entity		-		-		-		(4)	Net gains (losses) on financial instruments at fair value and foreign exchange
Total reclassifications for the period	$	(7)	$	-	$	(9)	$	(18)	Net income (loss)

Note 13: Commitments and Contingencies

The following commitments and contingencies provide an update of those discussed in “Note 21: Commitments and Contingencies” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, and should be read in conjunction with the complete descriptions provided in the aforementioned Form 10-K.

Litigation

MBIA Insurance Corp. v. Credit Suisse Securities (USA) LLC, et al.; Index No. 603751/2009 (N.Y. Sup. Ct., N.Y. County)

On March 2, 2015, the court issued an order scheduling expert discovery to conclude by February of 2016.

MBIA Insurance Corp. v. J.P. Morgan Securities LLC (f/k/a Bear, Stearns & Co. Inc.); Index No. 64676/2012 (N.Y. Sup. Ct., County of Westchester)

On September 9, 2014, the court granted in part MBIA Corp.’s motion to file an amended complaint. MBIA filed its amended complaint on September 29, 2014. J.P. Morgan filed its answer to the amended complaint on October 10, 2014. The parties each cross-appealed the September 9, 2014 decision and those appeals were fully submitted as of June 8, 2015. J.P. Morgan’s motion for summary judgment was fully briefed as of October 15, 2015.

Lynn Tilton and Patriarch Partners XV, LLC v. MBIA Inc. and MBIA Insurance Corp.; Index No. 68880/2015 (N.Y. Sup. Ct., County of Westchester)

On November 2, 2015, Lynn Tilton and Patriarch Partners XV, LLC filed a complaint in New York State Supreme Court, Westchester County, against MBIA Inc. and MBIA Corp., alleging fraudulent inducement and related claims arising from purported promises made by MBIA in connection with insurance policies issued by MBIA Corp. on certain collateralized loan obligations managed by Ms. Tilton and her affiliated Patriarch entities, and seeking damages.

Ambac Bond Insurance Coverage Cases, Coordinated Proceeding Case No. JCCP 4555 (Super. Ct. of Cal., County of San Francisco)

An appeal of the dismissal of the plaintiff’s anti-trust claim under California’s Cartwright Act is pending. An appeal is also pending of the March 26, 2014 decision granting in part the Bond Insurer defendants’ motions for reimbursement of legal fees incurred in connection with the motion to strike pursuant to California’s Anti-SLAPP statute.

58

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 13: Commitments and Contingencies (continued)

The Company is defending against the aforementioned actions in which it is a defendant and expects ultimately to prevail on the merits. There is no assurance, however, that the Company will prevail in these actions. Adverse rulings in these actions could have a material adverse effect on the Company’s ability to implement its strategy and on its business, results of operations, cash flows and financial condition. At this stage of the litigation, there has not been a determination as to the amount, if any, of damages. Accordingly, the Company is not able to estimate any amount of loss or range of loss.

There are no other material lawsuits pending or, to the knowledge of the Company, threatened, to which the Company or any of its subsidiaries is a party.

Lease Commitments

The Company has a lease agreement for its headquarters in Purchase, New York. The initial lease term expires in 2030 with the option to terminate the lease in 2025 upon the payment of a termination amount. This lease agreement included an incentive amount to fund certain leasehold improvements, renewal options, escalation clauses and a free rent period. The lease agreement has been classified as an operating lease, and operating rent expense has been recognized on a straight-line basis since the second quarter of 2014.

Note 14: Subsequent Events

Refer to “Note 13: Commitments and Contingencies” for information about legal proceedings that occurred after September 30, 2015.

59

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

MBIA Inc. (“MBIA”, the “Company”, “we”, “us”, or “our”) operates one of the largest financial guarantee insurance businesses in the industry. MBIA manages three operating segments: 1) United States (“U.S.”) public finance insurance; 2) corporate; and 3) international and structured finance insurance. Our U.S. public finance insurance business is primarily operated through National Public Finance Guarantee Corporation (“National”), our corporate segment is operated through MBIA Inc. and several of its subsidiaries, including our service company, MBIA Services Corporation (“MBIA Services”) and is generally referred to as (“MBIA Inc.”), and our international and structured finance insurance business is primarily operated through MBIA Insurance Corporation and its subsidiaries (“MBIA Corp.”). Unless otherwise indicated or the context otherwise requires, references to “MBIA Corp.” are to MBIA Insurance Corporation, together with its subsidiaries, MBIA UK Insurance Limited (“MBIA UK”) and MBIA Mexico S.A. de C.V (“MBIA Mexico”).

The primary strategies of our U.S. public finance insurance segment are to generate new insurance business in National, consistent with our portfolio management and return requirements, and to maximize the economics of our existing insured portfolio through effective surveillance and remediation. The primary strategies of our international and structured finance insurance segment are to preserve value, maintain adequate liquidity, reduce exposure risk and mitigate insurance loss. We do not expect to write new business in our international and structured finance insurance segment in the foreseeable future. Our corporate segment consists of general corporate activities, including providing general support services to MBIA’s other operating businesses and asset and capital management.

Prior to 2015, MBIA managed two other operating segments, advisory services and conduit. Our advisory services segment was operated primarily through Cutwater Holdings, LLC and its subsidiaries (“Cutwater”). Effective on January 1, 2015, we exited our advisory business through the sale of Cutwater. In the second quarter of 2014, we exited our conduit business through the liquidation of Meridian Funding Company, LLC (“Meridian”).

EXECUTIVE OVERVIEW

National

National is the largest U.S. public finance-only bond insurer in the financial guarantee industry as measured by total insured gross par outstanding of $177.4 billion as of September 30, 2015. Our primary strategy is to insure new issue and secondary market municipal bonds while providing ongoing surveillance of National’s existing insured portfolio. Since achieving double-A ratings in 2014, National has insured $782 million of gross par exposure. National’s ability to write new business and to compete with other financial guarantors is largely dependent on the financial strength ratings assigned to National by major rating agencies. As of September 30, 2015, the major rating agencies have assigned the following ratings to National: AA+ with a stable outlook by Kroll Bond Rating Agency; AA- with a stable outlook by Standard & Poor’s Financial Services LLC (“S&P”); and A3 with a negative outlook by Moody’s Investors Service, Inc. (“Moody’s”).

National pursues opportunities for new business across the spectrum of municipal sectors where it maintains underwriting criteria. Based on our underwriting and pricing criteria, the majority of our new business is in the general obligation, tax-backed and revenue bond sectors. In addition to the new issue market, we are pursuing opportunities in the secondary market with respect to bonds issued in recent years that were not insured and that meet our underwriting criteria.

National seeks to generate shareholder value through appropriate risk-adjusted pricing; however, current market conditions and the competitive landscape limit National’s new business opportunities and its ability to price and underwrite risk with attractive returns.

Prevailing interest rate levels and credit spreads have affected demand for financial guarantee insurance. Currently the market features both lower interest rates and narrower spreads between insured and uninsured obligations. The purchase of insurance during such periods will generally provide lower cost savings to the issuer compared to periods of higher rates and wider spreads. Financial guarantee insurance competes in nearly all instances with the issuer’s alternative of foregoing insurance. If the interest savings from insurance are not greater than the cost of the insurance, the issuer will generally choose to issue bonds without insurance. As a result, some issuers choose to issue on an uninsured basis. At the same time, investors may choose to forego the purchase of insured bonds to increase the yield on their investments. As interest rates rise, we expect more favorable new business opportunities in the U.S. public finance market.

Given that National’s insurance policies protect policyholders from potential defaults and guarantee payments of scheduled principal and interest, we believe current stress in the municipal sector will increase the demand for National’s insurance product. Refer to the “U.S. Public Finance Insurance” section for additional information on National’s new business.

60

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

EXECUTIVE OVERVIEW (continued)

Overall our U.S. public finance insured portfolio continues to perform satisfactorily against a backdrop of relatively stable domestic economic activity. While this trend will generally benefit the tax revenues and fees charged for essential municipal services which secure our insured bond portfolio, some state, local governments and territory obligors we insure, remain under financial and budgetary stress. This could lead to an increase in defaults by such entities on the payment of their obligations and losses or impairments on a greater number of our insured transactions. We continue to monitor and analyze these situations and other stressed credits closely, and the overall extent and duration of this stress is uncertain.

Exposure to Puerto Rico

As of September 30, 2015, National had $4.3 billion of gross par outstanding ($4.7 billion of gross par outstanding when including accreted interest on capital appreciation bonds (“CABs”)) related to the Commonwealth of Puerto Rico and certain of its instrumentalities (“Puerto Rico”). Puerto Rico is experiencing fiscal stress due to, among other things, Puerto Rico’s structural budget imbalance, a stagnating local economy, net migration of people and a high debt burden. However, it has attempted to address its significant economic challenges by passing a balanced general fund budget for the fiscal year ending June 30, 2016 and approving a proposed tax reform bill. Refer to the “U.S. Public Finance Insurance Puerto Rico Exposures” section for additional information on our Puerto Rico exposures.

MBIA Inc.

During the nine months ended September 30, 2015, the Company repurchased 38.9 million common shares of MBIA Inc. and $50 million par value outstanding of our debt obligations. MBIA Inc. has issued debt to finance the operations of its subsidiaries. This debt, which includes MBIA Inc. senior notes, medium-term notes (“MTNs”) issued by MBIA Global Funding, LLC (“GFL”), and investment agreements issued by MBIA Investment Management Corp. (“IMC”) and MBIA Inc., are collectively managed and serviced with the financial resources available to MBIA Inc. We pledge high-quality securities as collateral for our investment agreements. Our MBIA Inc. senior notes, MTNs and investment agreements are serviced by available liquidity. Our debt will decrease over time primarily through payments of scheduled maturities and opportunistic calls and buybacks. Our strategy is to further reduce our leverage using cash primarily generated from operations to repurchase or retire debt while balancing this with share repurchases when management deems appropriate. Refer to the “Capital Resources” section for further information on our buybacks. Based on MBIA Inc.’s debt service requirements and expected operating expenses, we expect that MBIA Inc. will have sufficient cash to satisfy its debt obligations and its general corporate needs over time from expected subsidiary dividends, additional anticipated releases under the MBIA group’s tax sharing agreement (the “Tax Escrow Account”), investment income and potential securities issuance; however, there can be no assurance that such sources will be adequate or that we will have access to the capital markets when needed. For further information, see “Strategic Plan Related and Other Risk Factors” in Part I, Item 1A, “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. MBIA Inc. also manages assets, which generates income to provide general liquidity support to MBIA Inc. Refer to the “Liquidity – MBIA Inc. Liquidity” section for information on MBIA Inc.’s liquidity.

MBIA Corp.

MBIA Corp.’s primary objective is to maximize the margin of safety for its policyholders and the future recoveries of subordinate claimants. We intend to accomplish this by reducing exposure risk and mitigating potential losses on MBIA Corp.’s insurance exposures, maximizing the collection of excess spread and put-back recoveries and value preservation. MBIA Corp. has significant negative statutory earned surplus and has no current capacity to pay dividends. In addition, since July 15, 2012, the New York State Department of Financial Services (“NYSDFS”) has not approved any payments on MBIA Corp.’s outstanding surplus notes. MBIA Corp. has contributed to the Company’s net operating loss carryforward (“NOL”), which is used in the calculation of our consolidated income taxes and maintains a substantial NOL. As a result of its NOL, when MBIA Corp. is profitable, it is not expected to make any tax payments to the Tax Escrow Account. Based on MBIA Corp.’s current projected earnings and our expectation that it will not write new business for the foreseeable future, we believe it is unlikely that MBIA Corp. will generate sufficient income to fully use its NOL. Refer to the “Capital Resources – MBIA Corp.” section for additional information on MBIA Corp.’s surplus notes and statutory capital.

MBIA Corp. continues to successfully manage its liquidity risks and satisfy all payment obligations when due. For the nine months ended September 30, 2015, recoveries from excess spread on second-lien residential mortgage-backed securities (“RMBS”) continued to exceed paid claims and loss adjustment expense (“LAE”). There can be no assurance this trend will continue. Our liquidity forecasts project adequate resources to pay expected claims, but if MBIA Corp. experiences materially-elevated claims payments or does not substantially collect our projected amounts of excess spread or the put-back recoverable from Credit Suisse for ineligible mortgages, it could experience liquidity shortfalls.

61

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

EXECUTIVE OVERVIEW (continued)

If MBIA Corp. were to experience liquidity shortfalls in the future, it may have insufficient resources to continue to pay claims, which may cause the NYSDFS to put MBIA Insurance Corporation into a rehabilitation or liquidation proceeding. Given the separation of MBIA Inc. and MBIA Corp. as distinct legal entities, the absence of any material intercompany lending agreements or cross defaults between the entities, and the lack of reliance by MBIA Inc. on MBIA Corp. for the receipt of dividends, we do not believe that a rehabilitation or liquidation proceeding of MBIA Insurance Corporation by the NYSDFS would have any significant long-term liquidity impact on MBIA Inc. or result in a liquidation or similar proceeding of MBIA UK. Refer to the “Liquidity – MBIA Corp. Liquidity” section for additional information on MBIA Corp.’s liquidity position.

Other

During the nine months ended September 30, 2015, investment funds affiliated with Warburg Pincus LLC (“Warburg”), the largest holder of MBIA Inc. common stock, sold all of its 45.7 million shares of the Company’s common stock. In connection with this sale, National and the Company repurchased 8 million shares and 7.6 million shares, respectively.

Economic and Financial Market Trends

The U.S. economy showed signs of sustained growth during the third quarter of 2015 with continued improvements in housing and consumer spending. The unemployment rate remained at a seven-year low despite a slowdown of job creation. While overall employment improved, wage growth was flat and was accompanied by a low labor force participation rate. Based on economic trends, including the Federal Reserve’s concerns about global developments, we expect that any increase in the federal funds rate will likely be modest and delayed until the end of this year or, more likely, early 2016.

During the third quarter of 2015, the European Central Banks’ Quantitative Easing program continued to have a generally positive impact throughout much of Europe as deflationary concerns showed signs of receding and economic growth, employment and bank lending improved. These positive signs, however, are somewhat offset by concerns about the slowing growth in China and other emerging markets, the migrant crisis and Greece’s ability to enact the economic and structural reforms required by the third bailout program. In the aggregate, conditions in Europe, China and other key markets remain uncertain and any material adverse impact on these economies may have implications for continued U.S. growth and further delay any increase in the federal funds rate by the Federal Reserve. We do not insure any sovereign or sub-sovereign debt from Greece and do not have any direct or indirect Greece sovereign debt holdings included in our investment portfolios. Information concerning our interest and foreign exchange rate sensitivity appears in Part I, Item 3, “Quantitative and Qualitative Disclosures about Market Risk.”

Economic and financial market trends could impact MBIA’s business outlook and its financial results. Many states and municipalities have experienced growing tax collections and appreciation in local level assessed valuations which drive property taxes. The consistent gradual improvement of economic indicators at the state and local levels that strengthen the credit quality of the issuers of our insured municipal bonds is expected to improve the performance of our insured U.S. public finance portfolio and could reduce the amount of National’s incurred losses. A decrease in oil prices which benefits consumers could have a positive impact on certain sales taxes to the extent consumer spending increases as a result. However, some states and municipalities will experience a decrease in revenues where their economies are reliant on the oil and gas industries.

An ongoing low interest rate environment will adversely impact the demand for municipal bond insurance since there is a lower economic benefit for issuers from the use of bond insurance as well as National’s ability to price risk at levels that meet its underwriting objectives and returns since the spread between an uninsured bond and an insured bond is narrower, resulting in less spread for the payment of premium for bond insurance.

62

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

EXECUTIVE OVERVIEW (continued)

Financial Highlights

The following table presents our financial highlights. A detailed discussion of our financial results is presented within the “Results of Operations” section included herein. Refer to the “Capital Resources—Insurance Statutory Capital” section for a discussion of National’s and MBIA Corp.’s capital positions under statutory accounting principles (“U.S. STAT”).

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions except for per share amounts	2015		2014		2015		2014
Net income (loss)	$	(35)	$	173	$	98	$	549
Net income (loss) per diluted share		(0.23)		0.80		0.55		2.62
Combined operating income (loss)(1)		24		120		77		163
Combined operating income (loss) per diluted share(1)		0.15		0.63		0.45		0.85
Gross par exposure insured		129		300		439		300

(1) - Combined operating income (loss) and combined operating income (loss) per diluted share are non-GAAP measures. Refer to the following “Results of Operations” section for a discussion of operating income (loss) and operating income (loss) per diluted share and a reconciliation of GAAP net income to operating income (loss) and GAAP net income per diluted share to operating income (loss) per diluted share.

In millions except for per share amounts	As of September 30, 2015		As of December 31, 2014
Shareholders’ equity of MBIA Inc.	$	3,702	$	3,929
Book value per share		24.20		20.47
Adjusted book value per share(1)		29.55		24.87

(1) - Adjusted book value per share is a non-GAAP measure. Refer to the following “Results of Operations” section for a discussion of adjusted book value and a reconciliation of GAAP book value per share to adjusted book value per share.

CRITICAL ACCOUNTING ESTIMATES

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which requires the use of estimates and assumptions. Management has discussed and reviewed the development, selection, and disclosure of critical accounting estimates with the Company’s Audit Committee. Our most critical accounting estimates include loss and LAE reserves, valuation of financial instruments, and deferred income taxes, since these estimates require significant judgment. Any modifications in these estimates could materially impact our financial results.

For a discussion of the Company’s critical accounting estimates, see “Critical Accounting Estimates” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. In addition, refer to “Note 5: Loss and Loss Adjustment Expense Reserves” and “Note 6: Fair Value of Financial Instruments” in the Notes to Consolidated Financial Statements for a current description of estimates used in our insurance loss reserving process and information about our financial assets and liabilities that are accounted for at fair value, including valuation techniques and significant inputs.

RECENT ACCOUNTING PRONOUNCEMENTS

Refer to “Note 3: Recent Accounting Pronouncements” in the Notes to Consolidated Financial Statements for a discussion of accounting guidance recently adopted by the Company.

63

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS

Summary of Consolidated Results

The following table presents a summary of our consolidated financial results for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions except for share and per share amounts	2015		2014		2015		2014
Total revenues	$	92	$	291	$	556	$	1,055
Total expenses		147		143		406		448
Income (loss) before income taxes		(55)		148		150		607
Provision (benefit) for income taxes		(20)		(25)		52		58
Net income (loss)	$	(35)	$	173	$	98	$	549
Net income (loss) per common share:
Basic	$	(0.23)	$	0.90	$	0.56	$	2.83
Diluted	$	(0.23)	$	0.80	$	0.55	$	2.62
Weighted average number of common shares outstanding:
Basic		155,239,723		187,104,785		169,610,370		188,428,870
Diluted		155,239,723		188,424,318		170,566,386		191,616,723

Consolidated total revenues for the three months ended September 30, 2015 included $55 million of net losses on financial instruments at fair value and foreign exchange compared with $57 million of net gains for the same period of 2014. The net losses on financial instruments at fair value and foreign exchange in 2015 were principally due to mark-to-market changes of our interest rate swaps. The net gains on financial instruments at fair value and foreign exchange in 2014 were principally due to foreign currency exchange gains on Euro denominated liabilities. Consolidated total expenses for the three months ended September 30, 2015 included $39 million of net insurance loss and LAE compared with $20 million for the same period of 2014. The increase in net insurance loss and LAE was principally due to increases in losses in our insured first-lien RMBS and collateralized debt obligations (“CDOs”) exposures.

Consolidated total revenues for the nine months ended September 30, 2015 included $91 million of net gains on insured derivatives compared with $446 million of net gains for the same period of 2014. The net gains on insured derivatives in 2015 were principally the result of refining the credit rating of underlying collateral, partially offset by claim payments. The net gains on insured derivatives in 2014 were principally the result of commuting derivative liabilities at prices below their fair values, partially offset by settlement and claim payments. Consolidated total expenses for the nine months ended September 30, 2015 included $79 million of net insurance loss and LAE compared with $82 million for the same period of 2014. The decrease in net insurance loss and LAE in 2015 when compared with 2014 was principally related to decreases in certain RMBS exposures, partially offset by an increase in losses in our CDO exposures.

64

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

Operating Income (Loss)

In addition to our results prepared in accordance with GAAP, we also analyze the operating performance of the Company using operating income (loss) and operating income (loss) per diluted common share, both non-GAAP measures. Since operating income (loss) is used by management to assess performance and make business decisions, we consider operating income (loss) and operating income (loss) per diluted common share fundamental measures of periodic financial performance which are useful in understanding our results. Operating income (loss) and operating income (loss) per diluted common share are not substitutes for net income (loss) and net income (loss) per diluted common share determined in accordance with GAAP, and our definitions of operating income (loss) and operating income (loss) per diluted common share may differ from those used by other companies.

Operating income (loss) and operating income (loss) per diluted common share include the combined after-tax results of our U.S. public finance insurance and corporate segments and remove the after-tax results of activities that are not part of our ongoing business strategy. This includes the activities of our international and structured finance insurance, advisory services and conduit segments (collectively, “Non-Core Segments”). We do not expect to write new business in our international and structured finance insurance segment in the foreseeable future due to its current ratings, accumulated losses and non-policy claims. We exited our advisory services segment through the sale of Cutwater effective January 1, 2015, and in the second quarter of 2014, we liquidated our conduit segment.

In addition to removing our Non-Core Segments, operating income (loss) is adjusted for the following:

• Elimination of the after-tax impact of mark-to-market gains (losses) on financial instruments that primarily include interest rate swaps and hybrid financial instruments. Also eliminated are the mark-to market gains (losses) on warrants issued by the Company. All of these amounts fluctuate based on market interest rates, credit spreads, MBIA Inc.’s common stock price and other market factors.

• Elimination of the after-tax impact of foreign exchange gains (losses) on the remeasurement of certain assets and liabilities and transactions in non-functional currencies. Given the possibility of volatility in foreign exchange markets, we exclude the impact of foreign exchange gains (losses) to provide a measurement of comparability of operating income (loss).

• Elimination of the after-tax impact of gains (losses) on the sale of investments, net investment losses related to other-than-temporary impairments (“OTTI”) and net gains (losses) on extinguishment of debt since the timing of these transactions are subject to management’s assessment of market opportunities and capital liquidity positions.

• Elimination of the after-tax impact of the gain on the sale of Cutwater.

• Elimination of deferred income tax valuation allowance on these adjustments.

65

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

The following table presents our combined operating income (loss) and operating income (loss) per diluted common share (both non-GAAP measures) and provides reconciliations of GAAP net income (loss) to operating income (loss) and GAAP net income (loss) per diluted common share to operating income (loss) per diluted common share for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2015		2014		2015		2014
Net income (loss)	$	(35)	$	173	$	98	$	549
Less: net income of Non-Core Segments, including eliminations		(38)		10		(36)		244
Less: after-tax adjustments:
Mark-to-market gains (losses) on financial instruments(1)		(19)		18		19		4
Foreign exchange gains (losses)(1)		1		39		29		38
Net gains (losses) on sales of investments(1)		-		1		4		26
Net investment losses related to OTTI		(2)		(10)		(7)		(10)
Net gains (losses) on extinguishment of debt		-		-		-		2
Other net realized gains (losses)(2)		(1)		-		12		-
Tax valuation allowance on adjustments(3)		-		(5)		-		82
Operating income (loss)	$	24	$	120	$	77	$	163
Operating income (loss) per diluted common share(4)	$	0.15	$	0.63	$	0.45	$	0.85
Weighted average diluted shares used in calculation		155		188		171		192

(1) - Gross amounts are reported within “Net gains (losses) on financial instruments at fair value and foreign exchange” and the corresponding tax effects are reported within “Provision (benefit) for income taxes” on the Company’s consolidated statements of operations.

(2) - Primarily relates to the after-tax gain on the sale of Cutwater.

(3) - Reported within “Provision (benefit) for income taxes” on the Company’s consolidated statements of operations.

(4) - Operating income (loss) per diluted common share is calculated by taking operating income (loss) divided by GAAP weighted average number of diluted common shares outstanding.

Adjusted Book Value

In addition to book value per share, we also analyze adjusted book value (“ABV”) per share, a non-GAAP measure. We consider ABV a measure of fundamental value of the Company and the change in ABV an important measure of financial performance. ABV adjusts GAAP book value to remove the after-tax results of activities in our Non-Core Segments. In addition, ABV adjusts for certain items which the Company believes will reverse from GAAP book value through GAAP earnings and other comprehensive income, as well as to add in the impact of certain items which the Company believes will be realized in GAAP book value in future periods. The Company has limited such adjustments to those items that it deems to be important to fundamental value and performance and which the likelihood and amount can be reasonably estimated. We have presented ABV to allow investors and analysts to evaluate the Company using the same measure that MBIA’s management regularly uses to measure financial performance and value. ABV is not a substitute for and should not be viewed in isolation of GAAP book value, and our definition of ABV may differ from that used by other companies.

66

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

As of September 30, 2015, ABV per share was $29.55, an increase from $24.87 as of December 31, 2014. The increase in ABV per share was primarily driven by a decrease in common shares outstanding from the share repurchases made by the Company during 2015. The following table provides a reconciliation of consolidated book value per share to consolidated ABV per share:

In millions except share and per share amounts	As of September 30, 2015		As of December 31, 2014
Total shareholders’ equity of MBIA Inc.	$	3,702	$	3,929
Common shares outstanding		152,946,359		191,942,895
Book value per share	$	24.20	$	20.47
Reverse book value of Non-Core Segments (after-tax)(1)		1.89		1.16
Reverse net unrealized (gains) losses included in other comprehensive income (after-tax)		(0.04)		(0.15)
Add net unearned premium revenue (after-tax)(2)		3.50		3.39
Total adjustments per share		5.35		4.40
Adjusted book value per share	$	29.55	$	24.87

(1) - The book value for Non-Core Segments, primarily the international and structured finance insurance segment, does not provide significant economic or shareholder value to MBIA Inc. Amounts are net of any deferred taxes available to MBIA Inc.

(2) - Consists of financial guarantee premiums, net of deferred acquisition costs. The discount rate on financial guarantee installment premiums was the risk-free rate as defined by the accounting principles for financial guarantee insurance contracts.

U.S. Public Finance Insurance

Our U.S. public finance insurance business is primarily conducted through National. The financial guarantees issued by National provide unconditional and irrevocable guarantees of the payment of the principal of, and interest or other amounts owing on, insured obligations when due or, in the event National has exercised, at its discretion, the right to accelerate the payment under its policies upon the acceleration of the underlying insured obligations due to default or otherwise. National’s guarantees insure municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, healthcare institutions, higher educational facilities, student loan issuers, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. Municipal bonds and privately issued bonds used for the financing of public purpose projects are generally supported by taxes, assessments, user fees or tariffs related to the use of these projects, lease payments or other similar types of revenue streams.

The following table presents our U.S. public finance insurance segment results for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Percent Change		Nine Months Ended September 30,				Percent Change
In millions	2015		2014				2015		2014
Net premiums earned	$	68	$	74		-8%	$	226	$	206		10%
Net investment income		29		30		-3%		86		90		-4%
Fees and reimbursements		1		3		-67%		2		6		-67%
Realized gains (losses) and other settlements on insured derivatives		-		-		-%		-		1		-100%
Net gains (losses) on financial instruments at fair value and foreign exchange		1		2		-50%		4		21		-81%
Net investment losses related to other-than-temporary impairments		(3)		(14)		-79%		(9)		(14)		-36%
Other net realized gains (losses)		-		18		-100%		(4)		18		-122%
Total revenues		96		113		-15%		305		328		-7%
Losses and loss adjustment		(7)		(8)		-13%		(5)		(5)		-%
Amortization of deferred acquisition costs		15		14		7%		49		43		14%
Operating		17		13		31%		47		42		12%
Total expenses		25		19		32%		91		80		14%
Income (loss) before income taxes		71		94		-24%		214		248		-14%
Provision (benefit) for income taxes		25		38		-34%		74		90		-18%
Net income (loss)	$	46	$	56		-18%	$	140	$	158		-11%

67

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

During the nine months ended September 30, 2015, National insured $439 million of gross par exposure in the primary and secondary markets and had $3 million in net premiums written. Low interest rates, narrow spreads and competitive pricing levels continue to severely limit new business opportunities. National supports the credit enhancement needs of municipal debt issuers across the U.S. National maintains underwriting criteria for most municipal risk types and pursues opportunities for new business across the spectrum of municipal sectors. The majority of its new business is in the general obligation, tax-backed and revenue bond sectors.

OPERATING INCOME (LOSS) In addition to the above results, we also analyze the operating performance of our U.S. public finance insurance segment using operating income (loss), a non-GAAP measure. We believe operating income (loss), as used by management, is useful for an understanding of the results of operations of the Company. Operating income (loss) is not a substitute for net income (loss) determined in accordance with GAAP, and our definition of operating income (loss) may differ from that used by other companies.

The following table presents a reconciliation of GAAP net income (loss) to operating income (loss) for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Net income (loss)	$	46	$	56	$	140	$	158
Less: after-tax adjustments:
Net gains (losses) on sales of investments(1)		-		1		2		9
Net investment losses related to OTTI		(2)		(10)		(6)		(10)
Tax valuation allowance on adjustments(2)		-		(5)		-		(5)
Operating income (loss)	$	48	$	70	$	144	$	164

(1) - Gross amounts are reported within “Net gains (losses) on financial instruments at fair value and foreign exchange” and the corresponding tax effects are reported within “Provision (benefit) for income taxes” on the Company’s consolidated statements of operations.

(2) - Reported within “Provision (benefit) for income taxes” on the Company’s consolidated statements of operations.

NET PREMIUMS EARNED Net premiums earned on financial guarantees represent gross premiums earned net of premiums ceded to reinsurers, and include scheduled premium earnings and premium earnings from refunded issues. The decrease in net premiums earned for the three months ended September 30, 2015 compared with the same period of 2014 resulted from a decrease in scheduled premiums earned of $10 million, partially offset by an increase in refunded premiums earned of $4 million. The increase in net premiums earned for the nine months ended September 30, 2015 compared with the same period of 2014 resulted from an increase in refunded premiums earned of $44 million, partially offset by a decrease in scheduled premiums earned of $24 million. Scheduled premium earnings declined due to the refunding and maturity of insured issues within our U.S. public finance portfolio. Refunding activity over the past several years has accelerated premium earnings in prior periods and reduced the amount of scheduled premiums that would have been earned in the current period.

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The decrease in net gains (losses) on financial instruments at fair value and foreign exchange for the nine months ended September 30, 2015 when compared with the same period of 2014 was primarily due to a decrease in net realized gains from the sales of securities from the ongoing management of our U.S. public finance insurance investment portfolio and unfavorable mark-to-market fluctuations on financial instruments.

NET INVESTMENT LOSSES RELATED TO OTHER-THAN-TEMPORARY IMPAIRMENTS Net investment losses related to OTTI for the three and nine months ended September 30, 2015 and 2014 were primarily related to one impaired security for which a loss was recognized as the difference between its amortized cost and the net present value of its projected cash flows. This OTTI resulted from liquidity concerns and other adverse financial conditions of the issuer. Refer to the “Liquidity” section included herein for additional information about impaired investments.

OTHER NET REALIZED GAINS (LOSSES) For the nine months ended September 30, 2015, other net realized gains (losses) related to an impairment charge on our Armonk, New York facility to adjust the carrying amount to its sales price less costs to sell. For the three and nine months ended September 30, 2014, other realized gains (losses) related to an insurance recovery on an errors and omissions liability policy.

LOSS AND LOSS ADJUSTMENT EXPENSES National’s portfolio surveillance group is responsible for monitoring our U.S. public finance segment’s insured obligations. The level and frequency of monitoring of any insured obligation depends on the type, size, rating and performance of the insured issue.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements for a description of the Company’s loss reserving policy and additional information related to its loss reserves.

The following table presents information about our U.S. public finance insurance loss and LAE expenses for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Percent Change		Nine Months Ended September 30,				Percent Change
In millions	2015		2014				2015		2014
Loss and LAE related to actual and expected payments	$	(5)	$	(24)		-79%	$	(6)	$	(26)		-77%
Recoveries of actual and expected payments		(2)		16		-113%		1		21		-95%
Gross losses incurred		(7)		(8)		-13%		(5)		(5)		-%
Reinsurance		-		-		-%		-		-		-%
Losses and loss adjustment expenses	$	(7)	$	(8)		-13%	$	(5)	$	(5)		-%

The benefit in losses and LAE for the three and nine months ended September 30, 2015 primarily related to decreases in reserves for certain municipal utilities driven by decreases in interest rates used to discount reserves and recoveries. The benefit in losses and LAE for the three months ended September 30, 2014 primarily related to decreases in reserves for certain general obligation bonds. The benefit in losses and LAE for the nine months ended September 30, 2014 primarily related to decreases in reserves for certain general obligation bonds, partially offset by losses related to certain Puerto Rico exposures.

The following table presents information about our U.S. public finance insurance loss and LAE reserves and recoverables as of September 30, 2015 and December 31, 2014:

In millions	September 30, 2015		December 31, 2014		Percent Change
Assets:
Insurance loss recoverable	$	-	$	4		-100%
Reinsurance recoverable on paid and unpaid losses (1)		-		1		-100%
Liabilities:
Gross loss and LAE reserves		54		70		-23%
Expected recoveries on unpaid losses		(23)		(25)		-8%
Loss and LAE reserves	$	31	$	45		-31%

(1) - Reported within “Other assets” on our consolidated balance sheets.

Loss and LAE reserves as of September 30, 2015 decreased compared with December 31, 2014 primarily as a result of decreases in expected payments on certain municipal utilities and certain general obligation bonds.

Included in our U.S. public finance loss and LAE reserves are both reserves for insured obligations for which a payment default has occurred and National has already paid a claim and also for which a payment default has not yet occurred, but a claim is expected in the future. The following table includes LAE reserves, but excludes par outstanding, as of December 31, 2014 for one issue that had no expected future claim payments, but for which National was obligated to pay LAE incurred in prior periods. As of September 30, 2015 and December 31, 2014, loss and LAE reserves comprised the following:

$ in millions	Number of Issues (1)				Loss and LAE Reserve				Par Outstanding
	September 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014
Gross of reinsurance:
Issues with defaults		3		4	$	13	$	19	$	52	$	123
Issues without defaults		5		7		18		26		1,430		1,501
Total gross of reinsurance		8		11	$	31	$	45	$	1,482	$	1,624

(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.

69

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

POLICY ACQUISITION COSTS AND OPERATING EXPENSES U.S. public finance insurance segment expenses for the three and nine months ended September 30, 2015 and 2014 are presented in the following table:

	Three Months Ended September 30,				Percent Change		Nine Months Ended September 30,				Percent Change
In millions	2015		2014				2015		2014
Gross expenses	$	17	$	13		31%	$	47	$	42		12%
Amortization of deferred acquisition costs	$	15	$	14		7%	$	49	$	43		14%
Operating		17		13		31%		47		42		12%
Total insurance operating expenses	$	32	$	27		19%	$	96	$	85		13%

Gross expenses represent total insurance expenses before the deferral of any policy acquisition costs. Gross expenses increased for the three and nine months ended September 30, 2015 compared with the same periods of 2014 primarily due to an increase in compensation expense, partially offset by a decrease in legal and litigation related costs.

Amortization of deferred acquisition costs increased for the three and nine months ended September 30, 2015 compared with the same periods of 2014 due to higher refunding activity in 2015. We did not defer a material amount of policy acquisition costs during the nine months ended September 30, 2015 or 2014.

INSURED PORTFOLIO EXPOSURE Financial guarantee insurance companies use a variety of approaches to assess the underlying credit risk profile of their insured portfolios. MBIA uses both an internally developed credit rating system as well as third-party rating sources in the analysis of credit quality measures of its insured portfolio. In evaluating credit risk, we obtain, when available, the underlying rating of the insured obligation before the benefit of its insurance policy from nationally recognized rating agencies, Moody’s and S&P. Other companies within the financial guarantee industry may report credit quality information based upon internal ratings that would not be comparable to our presentation. We maintain internal ratings on our entire portfolio, and our ratings may be higher or lower than the ratings assigned by Moody’s or S&P.

The following table presents the credit quality distribution of MBIA’s U.S. public finance outstanding gross par insured as of September 30, 2015 and December 31, 2014. CABs are reported at the par amount at the time of issuance of the insurance policy. All ratings are as of the period presented and represent S&P ratings. If transactions are not rated by S&P, a Moody’s equivalent rating is used. If transactions are not rated by either S&P or Moody’s, an internal equivalent rating is used.

	Gross Par Outstanding
In millions	September 30, 2015				December 31, 2014
Rating	Amount		%		Amount		%
AAA	$	7,711		4.3%	$	11,364		5.1%
AA		85,770		48.4%		107,399		48.3%
A		61,428		34.6%		80,744		36.3%
BBB		15,371		8.7%		17,131		7.7%
Below investment grade		7,075		4.0%		5,655		2.6%
Total	$	177,355		100.0%	$	222,293		100.0%

70

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

U.S. Public Finance Insurance Puerto Rico Exposures

The following is a summary of exposures within the insured portfolio of our U.S. public finance insurance segment related to Puerto Rico as of September 30, 2015.

In millions	Gross Par Outstanding		Gross Par Outstanding Plus CAB Accreted Interest		Debt Service Outstanding		National Internal Rating
Puerto Rico Electric Power Authority (PREPA)(1)	$	1,354	$	1,372	$	1,994	d
Puerto Rico Commonwealth GO(1)		985		1,023		1,402	bb1
Puerto Rico Highway and Transportation Authority Transportation Revenue (PRHTA)(1)		783		784		1,471	b3
Puerto Rico Sales Tax Financing Corporation (COFINA)(1)		684		1,025		4,170	a3
Puerto Rico Government Development Bank GO (GDB)(2)		267		267		273	bb1
Puerto Rico Highway and Transportation Authority Highway Revenue (PRHTA)(1)		87		88		127	bb2
University of Puerto Rico System Revenue		89		89		134	bbb3
Inter American University of Puerto Rico Inc.		28		28		38	a3
Puerto Rico Industrial Development Company		13		13		13	bbb2
Total	$	4,290	$	4,689	$	9,622

(1) - Includes CABs that reflect the gross par amount at the time of issuance of the insurance policy.

(2) - Additionally secured by the guarantee of the Commonwealth of Puerto Rico.

For many years Puerto Rico’s economy has suffered from stagnation that has led to recurring budget deficits and increased borrowing to finance such deficits. As a result of mounting debt and, more recently, concerns about the sustainability of its debt level, deteriorating credit ratings and lack of market confidence, have constrained access to the capital markets straining liquidity for Puerto Rico and its municipalities. Although Puerto Rico has tried to address its significant financial challenges through various fiscal policies and by the passage of a balanced general fund budget, it continues to experience fiscal stress that could lead to defaults on its debt obligations.

The Public Corporations Debt Enforcement and Recovery Act (the “Recovery Act”) that sought to establish a bankruptcy framework for certain public corporations of Puerto Rico was determined to be unconstitutional by the U.S. District Court in Puerto Rico, and this ruling was upheld by the First Circuit Court of Appeals. Puerto Rico has sought review of the Recovery Act by filing a petition for certiorari to the Supreme Court of the United States.

In the second quarter of 2015, Puerto Rico increased its sales and use tax from 7% to 11.5% and mandated the conversion to a value added tax system in April of 2016 in an effort to raise additional general fund revenues. The Governor of Puerto Rico formed a working group to address significant, projected general fund deficits over the next several years. The working group delivered its Puerto Rico Fiscal and Economic Growth Plan (the “Plan”) in September of 2015. The Plan indicates that, absent any meaningful fiscal and structural reforms, the government will incur a $27.8 billion cumulative deficit between fiscal year 2016 and fiscal year 2020. The Plan proposes to reduce the Commonwealth’s sizable deficits through a combination of revenue increases and spending cuts, as well as by realizing benefits from economic growth from spending initiatives. However, even with the implementation of these measures, the Plan projects a $14.0 billion cumulative deficit. The report further projects that the Commonwealth will exhaust its liquidity in November of 2015, and that the GDB will exhaust its liquidity before December of 2015.

On July 1, 2015, PREPA made its debt service payments in full, and as scheduled from the combination of funds held by the Trustee and operating cash. As a result, there were no claims on any of National’s insurance policies. To ensure that PREPA maintains sufficient operating liquidity, the then-forbearing bond insurers, including National, agreed to provide $128 million of short-term financing through the purchase of interest-bearing securities on July 31, 2015 with repayment in full of outstanding principal and accrued interest by a mandatory redemption upon the consummation of a restructuring with the forbearing bond insurers prior to December 15, 2015 or a mandatory defeasance on December 15, 2015. The scheduled maturity date of these securities is January 1, 2016 and National’s share of the total $128 million of short-term financing is $45 million. These securities were issued under PREPA’s existing Power Revenue Bond Trust Agreement as parity indebtedness with the same terms and rights to repayment as PREPA’s existing revenue debt.

71

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

National’s forbearance with PREPA expired in September of 2015 without a further extension, though discussions with PREPA continue. In August of 2015, ad hoc bondholders (representing approximately $3.0 billion, or 37.0% of the power revenue bonds) and PREPA agreed to a non-binding term sheet detailing economic terms of a restructuring. The deal calls for the exchange of existing revenue bonds into a securitization at 85.0% of par. Additionally, PREPA reached a tentative agreement with its bank lenders that would reduce the interest rate on $700 million of debt and extend its repayment for at least six years. Both the ad hoc bondholders and fuel line lenders continue to operate under the forbearance agreement.

In September of 2015, National filed a petition with the Puerto Rico Energy Commission (the “PREC”) requesting (i) conclusion of a PREPA rate review within four months and (ii) an immediate 4.2 cent per kWh temporary increase in PREPA’s base electricity rate. The PREC denied National’s request, citing insufficient information regarding’s PREPA’s operations and financial performance necessary to conduct a rate review. In October of 2015, National filed an appeal of this decision with the Puerto Rico Court of Appeals. Also in October of 2015, National and Assured Guaranty filed a petition to intervene into the ongoing proceeding in which PREC is evaluating the Integrated Resource Plan that PREPA submitted in final form in September of 2015.

With regard to PRHTA, legislation was passed in the first quarter of 2015 that provides for (i) an increase in the aggregate petroleum products tax from $9.25 per barrel to $15.50 per barrel, and (ii) the reallocation of a portion of the petroleum products tax from PRHTA to another entity upon the occurrence of certain events including the transfer of certain PRHTA debt obligations to another entity for repayment. While the tax increase has become effective, the transfer of certain debt obligations has not occurred.

Other than Inter American University of Puerto Rico Inc., S&P, Fitch Ratings and/or Moody’s have downgraded the ratings of all Puerto Rico issuers to below investment grade with a negative outlook due to narrowing liquidity, sluggish economic growth and persistent structural deficits. Although we have downgraded our internal rating for certain Puerto Rico insured debt, including that of the Commonwealth, the GDB, PREPA and PRHTA, to below investment grade, all of the insured obligations included in the preceding table are presently current on debt service payments (with PREPA using debt service reserve funds to pay its July 1, 2014, January 1, 2015, and a portion of its July 1, 2015 debt service payments).

Scheduled gross debt service due on our Puerto Rico exposures for the three months ending December 31, 2015 and each of the subsequent four years ending December 31 and thereafter are presented in the following table:

	As of September 30, 2015
	Three Months Ending December 31, 2015
In millions			2016		2017		2018		2019		Thereafter		Total
Puerto Rico Electric Power Authority (PREPA)	$	-	$	174	$	184	$	120	$	177	$	1,339	$	1,994
Puerto Rico Commonwealth GO		-		192		72		108		231		799		1,402
Puerto Rico Highway and Transportation Authority Transportation Revenue (PRHTA)		-		47		42		47		39		1,296		1,471
Puerto Rico Sales Tax Financing Corporation (COFINA)		-		-		-		-		-		4,170		4,170
Puerto Rico Government Development Bank GO		273		-		-		-		-		-		273
Puerto Rico Highway and Transportation Authority Highway Revenue (PRHTA)		-		5		22		6		16		78		127
University of Puerto Rico System Revenue		-		7		8		7		7		105		134
Inter American University of Puerto Rico Inc.		2		3		3		3		3		24		38
Puerto Rico Industrial Development Company		-		13		-		-		-		-		13
Total	$	275	$	441	$	331	$	291	$	473	$	7,811	$	9,622

72

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

Corporate

Our corporate segment consists of general corporate activities, including providing general support services to MBIA Inc.’s subsidiaries, asset and capital management and other business development activities. General support services are provided by our service company, MBIA Services, which provides various support services including, among others, management, legal, accounting, treasury, information technology, and insurance portfolio surveillance, on a fee-for-service basis. Asset, liability and capital management includes activities related to servicing obligations issued by MBIA Inc. and its subsidiaries, GFL and IMC. MBIA Inc. issued debt to finance the operations of the MBIA group. It also provided customized products for funds that were invested as part of asset-backed or structured product transactions. GFL raised funds through the issuance of MTNs with varying maturities, which were in turn guaranteed by MBIA Corp. GFL lent the proceeds of these MTN issuances to MBIA Inc. IMC, along with MBIA Inc., provided customized investment agreements, guaranteed by MBIA Corp., for bond proceeds and other public funds for such purposes as construction, loan origination, escrow and debt service or other reserve fund requirements. The Company ceased issuing these MTNs and investment agreements and the outstanding liability balances and corresponding asset balances have declined over time as liabilities mature, terminate or are retired. All of the debt within the corporate segment is managed collectively and is serviced by the financial resources available to MBIA Inc. Asset management activities provide for opportunities in investments and provide general liquidity support to MBIA Inc.

The following table summarizes the consolidated results of our corporate segment for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Percent Change		Nine Months Ended September 30,				Percent Change
In millions	2015		2014				2015		2014
Net investment income	$	8	$	8		-%	$	26	$	29		-10%
Fees		13		12		8%		39		47		-17%
Net gains (losses) on financial instruments at fair value and foreign exchange		(45)		68		n/m		41		54		-24%
Net investment losses related to other-than-temporary impairments		-		-		-%		(1)		-		n/m
Net gains (losses) on extinguishment of debt		-		-		-%		(1)		3		-133%
Other net realized gains (losses)		(1)		-		n/m		22		1		n/m
Revenues of consolidated VIEs:
Other net realized gains (losses)		-		-		-%		-		(5)		-100%
Total revenues		(25)		88		-128%		126		129		-2%
Operating		19		24		-21%		58		66		-12%
Interest		24		27		-11%		74		83		-11%
Total expenses		43		51		-16%		132		149		-11%
Income (loss) before income taxes		(68)		37		n/m		(6)		(20)		-70%
Provision (benefit) for income taxes		(25)		(70)		-64%		-		(167)		-100%
Net income (loss)	$	(43)	$	107		-140%	$	(6)	$	147		-104%

n/m - Percent change not meaningful.

FEES The decrease in fees for the nine months ended September 30, 2015 compared with the same period of 2014 was primarily due to a decrease in fees paid by our conduit segment for administrative and other services. During the second quarter of 2014, we completed the winding down of our conduit segment.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The unfavorable changes in net gains (losses) on financial instruments at fair value and foreign exchange for the three months ended September 30, 2015 compared with the same period of 2014 were primarily due to a decrease in foreign exchange gains on Euro denominated liabilities, an increase in losses from mark-to-market changes of our interest rate swaps and other hybrid financial instruments and a decrease in gains from the changes in the fair value of the outstanding warrants issued on MBIA Inc. common stock. The changes in the fair value of outstanding warrants were primarily attributable to volatility and MBIA Inc.’s common stock price, which are used in the valuation of the warrants. The unfavorable changes in net gains (losses) on financial instruments at fair value and foreign exchange for the nine months ended September 30, 2015 compared with the same period of 2014 were primarily due to an increase in losses from mark-to-market changes of our interest rate swaps and other hybrid financial instruments, a decrease in gains from the changes in the fair value of the outstanding warrants issued on MBIA Inc. common stock and a decrease in net realized gains from asset sales, partially offset by gains from the termination of derivatives.

OTHER NET REALIZED GAINS (LOSSES) The increase in other net realized gains for the nine months ended September 30, 2015 compared with the same period of 2014 was primarily due to the gain from the sale of Cutwater.

REVENUES OF CONSOLIDATED VIEs For the nine months ended September 30, 2014, total revenues of consolidated variable interest entities (“VIEs”) related to net losses as a result of the deconsolidation of a VIE.

INTEREST EXPENSE Interest expense decreased for the three and nine months ended September 30, 2015 compared with the same periods of 2014 primarily due to the continued maturity and repurchases of liabilities by the Company.

PROVISION (BENEFIT) FOR INCOME TAXES The benefit for income taxes for the nine months ended September 30, 2014 was higher than the statutory rate of 35% principally due to the decrease in our valuation allowance against our deferred tax asset from asset sales of previously impaired assets and a decrease in our reserve for uncertain tax positions.

OPERATING INCOME (LOSS) In addition to the above results, we also analyze the operating performance of our corporate segment using operating income (loss), a non-GAAP measure. We believe operating income (loss), as used by management, is useful for an understanding of the results of operations of the Company. Operating income (loss) is not a substitute for net income (loss) determined in accordance with GAAP, and our definition of operating income (loss) may differ from that used by other companies.

The following table presents a reconciliation of GAAP net income (loss) to operating income (loss) for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Net income (loss)	$	(43)	$	107	$	(6)	$	147
Less: after-tax adjustments:
Mark-to-market gains (losses) on financial instruments(1)		(19)		18		19		4
Foreign exchange gains (losses)(1)		1		39		29		38
Net gains (losses) on sales of investments(1)		-		-		2		17
Net investment losses related to OTTI		-		-		(1)		-
Net gains (losses) on extinguishment of debt		-		-		-		2
Other net realized gains (losses)(2)		(1)		-		12		-
Tax valuation allowance on adjustments(3)		-		-		-		87
Operating income (loss)	$	(24)	$	50	$	(67)	$	(1)

(1) - Gross amounts are reported within “Net gains (losses) on financial instruments at fair value and foreign exchange” and the corresponding tax effects are reported within “Provision (benefit) for income taxes” on the Company’s consolidated statements of operations.

(2) - Relates to the after-tax gain on the sale of Cutwater.

(3) - Reported within “Provision (benefit) for income taxes” on the Company’s consolidated statements of operations.

74

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

International and Structured Finance Insurance

Our international and structured finance insurance business is principally operated through MBIA Corp. The financial guarantees issued by MBIA Corp. generally provide unconditional and irrevocable guarantees of the payment of the principal of, and interest or other amounts owing on, non-U.S. public finance and global structured finance insured obligations when due or, in the event MBIA Corp. has the right, at its discretion, to accelerate insured obligations upon default or otherwise, upon MBIA Corp.’s acceleration. Certain guaranteed investment contracts written by MBIA Inc. are insured by MBIA Corp., and if MBIA Inc. or such subsidiaries were to have insufficient assets to pay amounts due upon maturity or termination, MBIA Corp. would make such payments under its insurance policies. MBIA Corp. also insured debt obligations of other affiliates, including GFL and IMC. MBIA Corp. has also written insurance policies guaranteeing the obligations under credit default swaps (“CDS”) contracts of an affiliate, LaCrosse Financial Products, LLC (“LaCrosse”), and certain other derivative contracts, which may include termination payments that may become due in certain events, including the insolvency or payment defaults of MBIA Corp. or LaCrosse. MBIA Insurance Corporation also provides reinsurance to its insurance subsidiaries.

MBIA Corp. insures non-U.S. public finance and global structured finance, including asset-backed obligations. MBIA Corp. has insured sovereign-related and sub-sovereign bonds, utilities, privately issued bonds used for the financing of projects that include toll roads, bridges, airports, public transportation facilities, and other types of infrastructure projects serving a substantial public purpose. Global structured finance and asset-backed obligations typically are securities repayable from cash flows generated by a specified pool of assets, such as residential and commercial mortgages, insurance policies, consumer loans, corporate loans and bonds, trade and export receivables, and leases for equipment, aircraft and real estate property. We no longer insure new credit derivative contracts except for transactions related to the restructuring or reduction of existing derivative exposure.

The following table presents our international and structured finance insurance segment results for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Percent Change		Nine Months Ended September 30,				Percent Change
In millions	2015		2014				2015		2014
Net premiums earned	$	25	$	49		-49%	$	75	$	113		-34%
Net investment income		3		4		-25%		9		12		-25%
Fees and reimbursements		15		26		-42%		50		56		-11%
Change in fair value of insured derivatives:
Realized gains (losses) and other settlements on insured derivatives		(18)		(24)		-25%		(30)		(418)		-93%
Unrealized gains (losses) on insured derivatives		21		48		-56%		121		863		-86%
Net change in fair value of insured derivatives		3		24		-88%		91		445		-80%
Net gains (losses) on financial instruments at fair value and foreign exchange		(11)		(13)		-15%		(19)		(11)		73%
Other net realized gains (losses)		-		12		-100%		-		11		-100%
Revenues of consolidated VIEs:
Net investment income		12		12		-%		37		37		-%
Net gains (losses) on financial instruments at fair value and foreign exchange		13		8		63%		9		32		-72%
Total revenues		60		122		-51%		252		695		-64%
Losses and loss adjustment		46		28		64%		84		87		-3%
Amortization of deferred acquisition costs		18		19		-5%		59		54		9%
Operating		13		12		8%		38		42		-10%
Interest		28		28		-%		83		83		-%
Expenses of consolidated VIEs:
Operating		3		2		50%		10		7		43%
Interest		10		10		-%		29		30		-3%
Total expenses		118		99		19%		303		303		-%
Income (loss) before income taxes		(58)		23		n/m		(51)		392		-113%
Provision (benefit) for income taxes		(20)		9		n/m		(19)		137		-114%
Net income (loss)	$	(38)	$	14		n/m	$	(32)	$	255		-113%

n/m - Percent change not meaningful.

75

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

For the three and nine months ended September 30, 2015 and 2014, we did not have any new international and structured finance insurance writings. We do not expect to write new business in our international and structured finance insurance segment in the foreseeable future due to its current ratings, accumulated losses and non-policy claims. Our primary objectives are risk reduction, loss mitigation and value preservation. As of September 30, 2015, MBIA Corp.’s total insured gross par outstanding was $44.3 billion. Since December 31, 2007, our total insured gross par outstanding has decreased approximately 87% from $331.2 billion. Furthermore, MBIA UK is no longer permitted to write new business and any new financial guarantee insurance would require regulatory approval.

NET PREMIUMS EARNED Our international and structured finance insurance segment generates net premiums from insurance policies accounted for as financial guarantee contracts. Certain premiums may be eliminated in our consolidated financial statements as a result of the Company consolidating VIEs. In addition, we generate net premiums from insured credit derivatives that are included in “Realized gains (losses) and other settlements on insured derivatives” on our consolidated statements of operations. The following table provides net premiums earned from our financial guarantee contracts for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Percent Change		Nine Months Ended September 30,				Percent Change
In millions	2015		2014				2015		2014
Net premiums earned:
U.S.	$	7	$	8		-13%	$	21	$	26		-19%
Non-U.S.		18		41		-56%		54		87		-38%
Total net premiums earned	$	25	$	49		-49%	$	75	$	113		-34%
VIEs (eliminated in consolidation)	$	3	$	4		-25%	$	9	$	11		-18%

Net premiums earned represent gross premiums earned net of premiums ceded to reinsurers, and include scheduled premium earnings and premium earnings from refunded issues. Net premiums earned decreased for the three and nine months ended September 30, 2015 compared with the same periods of 2014 primarily due to a decrease in refunded premiums earned from the termination of a policy in 2014 and a decrease in scheduled premiums earned from the maturity and early settlement of insured transactions with no writings of new insurance policies.

FEES AND REIMBURSEMENTS The decreases in fees and reimbursements for the three and nine months ended September 30, 2015 compared with the same periods of 2014 were primarily due to decreases in termination and waiver and consent fees related to ongoing management of our international and structured finance insurance business, partially offset by an increase in ceding commission income from National. Due to the transaction-specific nature inherent in fees and reimbursements, these revenues can vary significantly from period to period.

NET CHANGE IN FAIR VALUE OF INSURED DERIVATIVES The following table presents the net premiums and fees earned related to derivatives and the components of the net change in fair value of insured derivatives for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Percent		Nine Months Ended September 30,				Percent
In millions	2015		2014		Change		2015		2014		Change
Net premiums and fees earned on insured derivatives	$	5	$	6		-17%	$	12	$	14		-14%
Realized gains (losses) on insured derivatives		(23)		(30)		-23%		(42)		(432)		-90%
Realized gains (losses) and other settlements on insured derivatives		(18)		(24)		-25%		(30)		(418)		-93%
Unrealized gains (losses) on insured derivatives		21		48		-56%		121		863		-86%
Net change in fair value of insured derivatives	$	3	$	24		-88%	$	91	$	445		-80%

The Company no longer insures new credit derivative contracts except in transactions related to the restructuring or reduction of existing derivative exposure. Premiums earned related to insured credit derivatives will decrease over time as a result of settlements prior to maturity and scheduled amortizations. For the three and nine months ended September 30, 2015, realized losses on insured derivatives resulted from claim payments on commercial mortgage-backed securities (“CMBS”) transactions.

Unrealized gains on insured derivatives for the three months ended September 30, 2015 were primarily the result of refining the credit rating of underlying collateral, shorter transaction life and the effects of principal amortization. For the three months ended September 30, 2014, unrealized gains on insured derivatives were principally associated with the reversal of unrealized losses from commutations and the effects of MBIA’s nonperformance risk on its derivative liabilities. For the nine months ended September 30, 2015, unrealized gains on insured derivatives were principally the result of refining the credit rating of underlying collateral. For the nine months ended September 30, 2014, unrealized gains on insured derivatives were principally associated with the reversal of unrealized losses from commutations.

76

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

As of September 30, 2015, the cost of five year CDS referencing MBIA Corp. was 29.58% upfront plus 5% per annum compared with 13.88% upfront plus 5% per annum as of September 30, 2014. As of September 30, 2015 and December 31, 2014, the fair value of MBIA Corp.’s insured CDS liability was $121 million and $244 million, respectively. Our mark-to-market on insured credit derivatives uses the most appropriate of the one to ten year CDS cost for each transaction, and those costs ranged from 12.24% upfront plus 5% per annum to 30.7% upfront plus 5% per annum as of September 30, 2015. As of September 30, 2014, those costs ranged from 3.25% upfront plus 5% per annum to 16.75% upfront plus 5% per annum.

As of September 30, 2015, MBIA Corp. had $3.3 billion of gross par outstanding on insured credit derivatives compared with $9.5 billion as of December 31, 2014. During the nine months ended September 30, 2015, eight insured issues matured or terminated that totaled $5.9 billion in gross par outstanding. As of September 30, 2015, 11 insured issues remained, of which 3 insured issues with total gross par outstanding of $2.2 billion are scheduled to mature by the end of 2016.

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The net losses on financial instruments at fair value and foreign exchange for the three months ended September 30, 2015 were primarily due to foreign currency exchange losses on the sale of Euro denominated long-term debt. The net losses on financial instruments at fair value and foreign exchange for the nine months ended September 30, 2015 were primarily due to realized losses from foreign currency revaluation of Chilean Unidad de Fomento denominated unearned premium revenue and foreign currency exchange losses on the sale of Euro denominated long-term debt.

OTHER NET REALIZED GAINS (LOSSES) Other net realized gains (losses) for the three and nine months ended September 30, 2014 primarily related to an insurance recovery received on an errors and omissions liability policy.

REVENUES OF CONSOLIDATED VIEs For the three months ended September 30, 2015, total revenues of VIEs were $25 million compared with total revenues of $20 million for the same period of 2014. This increase was primarily due to an increase in net gains from second-lien RMBS put-back claims on ineligible mortgage loans. For the nine months ended September 30, 2015, total revenues of consolidated VIEs were $46 million compared with total revenues of $69 million for the same period of 2014. This decrease was primarily due to lower mark-to-market gains on assets of consolidated VIEs due to lower expected payments. We elected to record at fair value certain instruments that are consolidated under accounting guidance for consolidation of VIEs, and as such, changes in fair value are reflected in earnings.

LOSS AND LOSS ADJUSTMENT EXPENSES MBIA’s insured portfolio management group within our international and structured finance insurance business is responsible for monitoring international and structured finance insured obligations. The level and frequency of monitoring of any insured obligation depends on the type, size, rating and performance of the insured issue.

Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements for a description of the Company’s loss reserving policy and additional information related to its loss reserves.

Summary of Financial Guarantee Insurance Losses and LAE

The following table presents information about our financial guarantee insurance losses and LAE recorded in accordance with GAAP for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,				Percent Change		Nine Months Ended September 30,				Percent Change
In millions	2015		2014				2015		2014
Losses and LAE related to expected payments	$	18	$	(34)		n/m	$	123	$	(30)		n/m
Recoveries of expected payments		28		62		-55%		(39)		117		-133%
Gross losses incurred		46		28		64%		84		87		-3%
Reinsurance		-		-		-%		-		-		-%
Losses and loss adjustment expenses	$	46	$	28		64%	$	84	$	87		-3%

n/m - Percent change not meaningful.

For the three months ended September 30, 2015, losses and LAE primarily related to decreases in projected collections from excess spread within the insured second-lien RMBS securitizations and increases in expected payments on first-lien RMBS securitizations.

77

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

For the three months ended September 30, 2014, losses and LAE primarily related to decreases of expected recoveries on an international road transaction and projected collections from excess spread within insured second-lien RMBS securitizations, partially offset by decreases in expected payments on an international road transaction.

For the nine months ended September 30, 2015, losses and LAE primarily related to decreases in projected collections from excess spread within the insured second-lien RMBS securitizations and increases in expected payments on CDOs.

For the nine months ended September 30, 2014, losses and LAE primarily related to decreases in projected collections from excess spread within the insured second-lien RMBS securitizations, partially offset by decreases in expected payments of an international road transaction.

Excess spread is generated by performing loans within insured second-lien RMBS securitizations and is the difference between interest inflows on mortgage loan collateral and interest outflows on insured beneficial interests. The amount of excess spread depends on future loss trends (which include future delinquency trends, average time to charge-off delinquent loans and the availability of pool mortgage insurance), the future spread between prime and London Interbank Offered Rate interest rates, and borrower refinancing behavior which results in voluntary prepayments. Minor deviations in loss trends and voluntary prepayments may substantially impact the amounts we collect from excess spread.

For the three and nine months ended September 30, 2015, losses and LAE incurred included the elimination of $18 million and $38 million of expenses, respectively, as a result of the consolidation of VIEs. The $18 million expense elimination included gross losses related to expected payments of $23 million, partially offset by gross recoveries of expected payments of $5 million. The $38 million expense elimination included gross losses related to expected payments of $33 million and gross recoveries of expected payments of $5 million.

For the three and nine months ended September 30, 2014, losses and LAE incurred included the elimination of $34 million and $41 million of expenses, respectively, as a result of the consolidation of VIEs. The $34 million expense elimination included gross losses related to expected payments of $15 million and gross recoveries of expected payments of $19 million. The $41 million expense elimination included gross losses related to expected payments of $23 million and gross recoveries of expected payments of $18 million.

The Company’s insurance loss recoverable represents expected potential recoveries of paid claims based on probability-weighted net cash inflows discounted at applicable risk-free rates as of the measurement date. The loss and LAE reserves represent the present value of the difference between cash payments we expect to make on the insured transactions and the excess spread we expect from the performing mortgage loans in the securitizations. As payments are made, a portion of those expected future receipts is recorded within “Insurance loss recoverable” on our consolidated balance sheets. The payments that we make virtually all go to reduce the principal balances of the securitizations. The following table presents information about our insurance loss recoverable and reserves as of September 30, 2015 and December 31, 2014.

In millions	September 30, 2015		December 31, 2014		Percent Change
Assets:
Insurance loss recoverable	$	437	$	529		-17%
Reinsurance recoverable on paid and unpaid losses(1)		6		6		-%
Liabilities:
Gross loss and LAE reserves		646		583		11%
Expected recoveries on unpaid losses		(197)		(122)		61%
Loss and LAE reserves	$	449	$	461		-3%
Insurance loss recoverable - ceded(2)	$	1	$	1		-%

(1) - Reported within “Other assets” on our consolidated balance sheets.

(2) - Reported within “Other liabilities” on our consolidated balance sheets.

78

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

As of September 30, 2015, loss and LAE reserves included $293 million, after eliminating $22 million related to our consolidated VIEs, of our remaining insured first and second-lien RMBS exposure.

Included in MBIA Corp.’s loss and LAE reserves are both reserves for insured obligations for which a payment default has occurred and MBIA Corp. has already paid a claim and also for which a payment default has not yet occurred but a claim is expected in the future. The following table includes LAE reserves, but excludes par outstanding, as of September 30, 2015 and December 31, 2014 for one and two issues, respectively, that had no expected future claim payments or par outstanding, but for which MBIA Corp. was obligated to pay LAE incurred in prior periods. As of September 30, 2015 and December 31, 2014, loss and LAE reserves comprised the following:

	Number of Issues(1)				Loss and LAE Reserve				Par Outstanding
	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
$ in millions	2015		2014		2015		2014		2015		2014
Gross of reinsurance:
Issues with defaults		103		104	$	303	$	344	$	4,087	$	4,885
Issues without defaults		6		7		146		117		1,143		1,492
Total gross of reinsurance		109		111	$	449	$	461	$	5,230	$	6,377

(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.

POLICY ACQUISITION COSTS AND OPERATING EXPENSES International and structured finance insurance segment expenses for the three and nine months ended September 30, 2015 and 2014 are presented in the following table:

	Three Months Ended September 30,				Percent Change		Nine Months Ended September 30,				Percent Change
In millions	2015		2014				2015		2014
Gross expenses	$	13	$	13		-%	$	39	$	44		-11%
Amortization of deferred acquisition costs	$	18	$	19		-5%	$	59	$	54		9%
Operating		13		12		8%		38		42		-10%
Total insurance operating expenses	$	31	$	31		-%	$	97	$	96		1%

Gross expenses represent total insurance expenses before the deferral of any policy acquisition costs. Gross expenses decreased for the nine months ended September 30, 2015 compared with the same period of 2014 primarily due to decreases in compensation expense, legal and litigation related costs and consulting fees. The increase in the amortization of deferred acquisition costs for the nine months ended September 30, 2015 compared with the same period of 2014 is due to higher refunding activity in 2015. Operating expenses decreased for the nine months ended September 30, 2015 compared with the same period of 2014 due to decreases in gross expenses. We did not defer a material amount of policy acquisition costs during the first nine months of 2015 or 2014. Policy acquisition costs in these periods were primarily related to commissions and premium taxes on installment policies written in prior periods.

INSURED PORTFOLIO EXPOSURE The credit quality of our international and structured finance insured portfolio is assessed in the same manner as our U.S. public finance insured portfolio. As of September 30, 2015 and December 31, 2014, 21% of our international and structured finance insured portfolio, was rated below investment grade, before giving effect to MBIA’s guarantees, based on MBIA’s internal ratings, which are generally more current than the underlying ratings provided by S&P and Moody’s for this subset of our insured portfolio.

79

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

European Sovereign Debt Exposure

Uncertainties regarding European sovereign debt have affected the global economy. Outside the U.S. financial guarantee insurance has been used by issuers of sovereign-related and sub-sovereign bonds, structured finance securities, utility debt and financing for public purpose projects, among others. MBIA does not insure any direct European sovereign debt. However, we do insure both structured finance and public finance obligations in select international markets. MBIA’s indirect European sovereign insured debt exposure totaled $6.5 billion as of September 30, 2015 and included obligations of sovereign-related and sub-sovereign issuers, such as regions, departments, and sovereign-owned entities that are supported by a sovereign state, region or department. Of the $6.5 billion of insured gross par outstanding, $509 million and $205 million were related to Spain and Ireland, respectively. The remaining $5.8 billion was related to the United Kingdom (“UK”). We do not insure any sovereign or sub-sovereign debt from Greece and our remaining exposure in Portugal matured in the third quarter of 2015. We closely monitor our existing insured European portfolios on an ongoing basis. We consider country risk, including economic and political factors, the type and quality of local regulatory oversight, the strength of the legal framework in each country and the stability of the local institutional framework. We also monitor local accounting, regulatory and legal requirements, local financial market developments, the impact of exchange rates and local demand dynamics. A default by one or more sovereign issuers could have an adverse effect on our insured debt exposures. The Company has an immaterial amount of direct and indirect European sovereign debt holdings, with no direct or indirect Greece sovereign debt holdings, included in its investment portfolios.

International and Structured Finance Insurance Selected Portfolio Exposures

The following is a summary of selected significant exposures within the insured portfolio of our international and structured finance insurance segment. Many of these sectors are and have been considered volatile over the past several years. We may experience considerable incurred losses and future expected payments in certain of these sectors. There can be no assurance that the loss reserves described below will be sufficient or that we will not experience losses on transactions on which we currently have no loss reserves, in particular if the economy deteriorates.

Residential Mortgage Exposure

MBIA Corp. insures mortgage-backed securities (“MBS”) backed by residential mortgage loans, including second-lien RMBS transactions (revolving home equity lines of credit (“HELOC”) loans and closed-end second mortgages (“CES”)). MBIA Corp. also insures MBS backed by first-lien alternative A-paper (“Alt-A”) and subprime mortgage loans directly through RMBS securitizations. There was considerable stress and deterioration in the mortgage market since 2008 reflected by heightened delinquencies and losses, particularly related to Alt-A and subprime mortgage loans originated during 2005, 2006 and 2007.

The following table presents the gross par outstanding of MBIA Corp.’s total direct RMBS insured exposure as of September 30, 2015 and December 31, 2014. Amounts include the gross par outstanding related to transactions that the Company consolidates under accounting guidance for VIEs.

In millions	Gross Par Outstanding as of
	September 30, 2015		December 31, 2014		Percent Change
Collateral Type
HELOC Second-lien	$	1,970	$	2,296		-14%
CES Second-lien		1,869		2,180		-14%
Alt-A First-lien(1)		1,633		1,807		-10%
Subprime First-lien(2)		749		838		-11%
Prime First-lien		105		144		-27%
Total	$	6,326	$	7,265		-13%

(1) -Includes international exposure of $459 million and $511 million as of September 30, 2015 and December 31, 2014, respectively.

(2) -Includes international exposure of $4 million as of December 31, 2014.

Collateralized Debt Obligations and Related Instruments

As part of our international and structured finance insurance activities, MBIA Corp. typically provided guarantees on senior and, in a limited number of cases, mezzanine tranches of CDOs, as well as protection on structured CMBS pools and corporate securities, and CDS referencing such securities. The following discussion, including reported amounts and percentages, includes insured CDO transactions consolidated by the Company as VIEs.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

As of September 30, 2015, MBIA Corp.’s $6.7 billion CDO portfolio represented 15% of its total insured gross par outstanding of $44.3 billion. As of December 31, 2014, MBIA Corp.’s $13.8 billion CDO portfolio represented 25% of its total insured gross par outstanding of $55.2 billion. In addition to the below table, MBIA Corp. insures approximately $475 million in commercial real estate (“CRE”) loan pools, comprising both European and domestic assets. The distribution of our insured CDO and related instruments portfolio by collateral type is presented in the following table:

In millions	Gross Par Outstanding as of
	September 30,		December 31,		Percent
Collateral Type	2015		2014		Change
Multi-sector CDOs	$	726	$	960		-24%
Investment grade corporate CDOs		1,200		6,824		-82%
High yield corporate CDOs		2,956		3,740		-21%
Structured CMBS pools		1,114		1,498		-26%
CRE CDOs		733		825		-11%
Total	$	6,729	$	13,847		-51%

Loss Remediation Transactions

We may seek to purchase, directly or indirectly, obligations guaranteed by MBIA or seek to commute policies. The amount of insurance exposure reduced, if any, and the nature of any such actions will depend on market conditions, pricing levels from time to time, and other considerations. In some cases, these activities may result in a reduction of loss reserves, but in all cases they are intended to limit our ultimate losses and reduce the future volatility in loss development on the related policies. Our ability to purchase guaranteed obligations and to commute policies will depend on management’s assessment of available liquidity.

U.S. Public Finance and International and Structured Finance Reinsurance

Reinsurance enables the Company to cede exposure for purposes of syndicating risk and increasing its capacity to write new business while complying with its single risk and credit guidelines. When a reinsurer is downgraded by one or more of the rating agencies, less capital credit is given to MBIA under rating agency models and the overall value of the reinsurance to MBIA is reduced. The Company generally retains the right to reassume the business ceded to reinsurers under certain circumstances, including a reinsurer’s rating downgrade below specified thresholds. The following table presents information about our reinsurance agreements as of September 30, 2015 for our U.S. public finance and international and structured finance insurance operations:

In millions
Reinsurers	Standard & Poor’s Rating (Status)	Moody’s Rating (Status)	Ceded Par Outstanding		Letters of Credit/Trust Accounts		Reinsurance Recoverable(1)
Assured Guaranty Re Ltd.	AA (Stable Outlook)	WR(2)	$	3,267	$	30	$	-
Assured Guaranty Corp.	AA (Stable Outlook)	A3 (Negative Outlook)		1,761		-		6
Overseas Private Investment Corporation	AA+ (Stable Outlook)	Aaa (Stable Outlook)		253		-		-
Others	A- or above	A2 or above		125		3		-
Total			$	5,406	$	33	$	6

(1) - Total reinsurance recoverable is primarily recoverables on unpaid losses.

(2) - Represents a withdrawal of ratings.

MBIA requires certain unauthorized reinsurers to maintain bank letters of credit or establish trust accounts to cover liabilities ceded to such reinsurers under reinsurance contracts. The Company remains liable on a primary basis for all reinsured risk. Based on MBIA’s assessment of the credit risk of its reinsurers and expected claims under the reinsurance agreements, MBIA believes that its reinsurers remain capable of meeting their obligations, although there can be no assurance of such in the future.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

As of September 30, 2015, the aggregate amount of insured par outstanding ceded by MBIA to reinsurers under reinsurance agreements was $5.4 billion compared with $6.1 billion as of December 31, 2014. As of September 30, 2015, $4.4 billion of the ceded par outstanding was ceded from our U.S. public finance insurance segment and $1.0 billion was ceded from our international and structured finance insurance segment. Under National’s reinsurance agreement with MBIA Corp., if a reinsurer of MBIA Corp. is unable to pay claims ceded by MBIA Corp. on U.S. public finance exposure, National will assume liability for such ceded claim payments.

Advisory Services

Until January of 2015, we conducted our asset management and advisory business primarily through Cutwater. Cutwater had provided advisory services, including cash management, discretionary asset management and structured products on a fee-for-service basis. Effective January 1, 2015, we completed the sale of Cutwater to a subsidiary of the Bank of New York Mellon Corporation and exited our advisory services business.

The following table summarizes the results and assets under management of our advisory services segment for the three and nine months ended September 30, 2014. These results include revenues and expenses from transactions with the Company’s other segments.

	Three Months Ended		Nine Months Ended
In millions	September 30, 2014		September 30, 2014
Fees	$	8	$	27
Net gains (losses) of financial instruments at fair value and foreign exchange		-		(3)
Revenues of consolidated VIEs		(4)		(4)
Total revenues		4		20
Operating expenses		10		35
Income (loss) before income taxes		(6)		(15)
Provision (benefit) for income taxes		(2)		(3)
Net income (loss)	$	(4)	$	(12)
Ending assets under management:
Third-party	$	11,623	$	11,623
Insurance		5,963		5,963
Corporate		4,297		4,297
Total ending assets under management	$	21,883	$	21,883
Average third-party assets under management	$	11,899	$	12,306

Conduit

In 2014, the Company’s conduit segment was operated through Meridian and administered through MBIA Asset Finance, LLC. Assets held by Meridian were funded by MTNs. In the second quarter of 2014, we retired the remaining $129 million of outstanding MTNs issued by Meridian and dissolved the conduit segment. Certain of MBIA’s consolidated subsidiaries had received fees for services provided to Meridian. The following table presents the results of our conduit segment for the nine months ended September 30, 2014. These results include revenues and expenses from transactions with the Company’s other segments.

	Nine Months Ended
In millions	September 30, 2014
Revenues of consolidated VIEs:
Net investment income	$	(1)
Net gains (losses) on extinguishment of debt		4
Total revenues		3
Expenses of consolidated VIEs:
Operating		9
Income (loss) before income taxes		(6)
Provision (benefit) for income taxes		(2)
Net income (loss)	$	(4)

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RESULTS OF OPERATIONS (continued)

Taxes

Provision for Income Taxes

The Company’s income taxes and the related effective tax rates for the three and nine months ended September 30, 2015 and 2014 are presented in the following table:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Income (loss) before income taxes	$	(55)	$	148	$	150	$	607
Provision (benefit) for income taxes	$	(20)	$	(25)	$	52	$	58
Effective tax rate		36.4%		-16.9%		34.7%		9.6%

For the nine months ended September 30, 2014, our effective tax rate applied to our income (loss) before income taxes was lower than the U.S. statutory tax rate of 35% primarily due to the decrease in our valuation allowance against our deferred tax asset from asset sales of previously impaired assets and a decrease in our reserve for uncertain tax positions.

The Company is party to a tax allocation agreement with members of its holding company system effective January 1, 1987. The agreement was amended and restated effective September 8, 2011 to change the method of calculating each domestic insurer’s tax liability to the method permitted by paragraph 3(a) of Department Circular Letter #33 (1979). The agreement was submitted to the NYSDFS for review and non-disapproval pursuant to Section 1505 of the New York Insurance Law (“NYIL”).

Refer to “Note 9: Income Taxes” in the Notes to Consolidated Financial Statements for a further discussion of income taxes, including the Company’s valuation allowance against deferred tax assets and its accounting for tax uncertainties.

CAPITAL RESOURCES

The Company manages its capital resources to minimize its cost of capital while maintaining appropriate claims-paying resources (“CPR”) for National and MBIA Corp. The Company’s capital resources consist of total shareholders’ equity, total debt issued by MBIA Inc. for general corporate purposes, and surplus notes issued by MBIA Corp. Total capital resources were $5.2 billion and $5.4 billion as of September 30, 2015 and December 31, 2014, respectively. MBIA Inc. uses its capital resources to support the business activities of its subsidiaries. As of September 30, 2015, MBIA Inc.’s investments in subsidiaries totaled $4.1 billion.

In addition, MBIA Inc. also supports the MTN and investment agreement obligations issued by the Company. We seek to maintain sufficient liquidity and capital resources to meet the Company’s general corporate needs and debt service. As of September 30, 2015 and December 31, 2014, net debt of MBIA Inc., which primarily comprised long-term debt, MTNs, investment agreements and derivative liabilities net of cash and investments at amortized cost and a tax receivable from subsidiaries, totaled $963 million and $740 million, respectively. Based on MBIA Inc.’s debt service requirements and expected operating expenses, we expect that MBIA Inc. will have sufficient cash to satisfy its net debt and its general corporate needs over time from distributions from its operating subsidiaries; however, there can be no assurance that MBIA Inc. will have sufficient cash in the event of unanticipated operating expenses. In addition, the Company may also consider raising third-party capital. For further information, see “Strategic Plan Related and Other Risk Factors” in Part I, Item 1A, “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and “Liquidity—MBIA Inc. Liquidity” section for additional information about MBIA Inc.’s liquidity.

Securities Repurchases

Repurchases of debt and common stock may be made from time to time in the open market or in private transactions as permitted by securities laws and other legal requirements. We may also choose to redeem debt obligations where permitted by the relevant agreements. MBIA Inc. or its subsidiaries may repurchase or redeem outstanding common shares of MBIA Inc. and outstanding debt obligations at prices that we deem to be economically advantageous.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

CAPITAL RESOURCES (continued)

Equity securities

The Company’s share repurchases for the nine months ended September 30, 2015 are presented in the following table:

In millions, except per share amounts	Total Number of Shares Purchased		Average Price Paid Per Share
Period
First Quarter of 2015		8.6	$	8.83
Second Quarter of 2015		11.6		8.76
Third Quarter of 2015		18.7		6.39
Total		38.9	$	7.63

On July 29, 2015, the Company’s Board of Directors authorized the repurchase by the Company or its subsidiaries of up to $100 million of its outstanding shares under a new share repurchase authorization, which superseded and terminated the prior authorization. The prior authorization had $61 million available for future repurchases at the time it was terminated. As of September 30, 2015, there was no remaining authorized capacity under the July 29, 2015 repurchase program.

On October 28, 2015, the Company’s Board of Directors authorized the repurchase by the Company or its subsidiaries of up to $100 million of its outstanding shares under a new share repurchase authorization.

Debt securities

During the nine months ended September 30, 2015, we repurchased $40 million par value outstanding of GFL MTNs issued by our corporate segment at a weighted average cost of approximately 100% of par value. Also, we repurchased $10 million par value outstanding of the 7.00% Debentures due 2025 issued by our corporate segment at a weighted average cost of approximately 105% of par value.

Insurance Statutory Capital

National and MBIA Insurance Corporation are incorporated and licensed in, and are subject to primary insurance regulation and supervision by, the State of New York. MBIA UK is authorized by the Prudential Regulation Authority (“PRA”) and regulated by the Financial Conduct Authority and the PRA in the UK. MBIA Mexico is regulated by the Comisión Nacional de Seguros y Fianzas in Mexico. National and MBIA Insurance Corporation each are required to file detailed annual financial statements, as well as interim financial statements, with the NYSDFS and similar supervisory agencies in each of the other jurisdictions in which it is licensed. These financial statements are prepared in accordance with New York State and the National Association of Insurance Commissioners’ statements of U.S. STAT and assist our regulators in evaluating minimum standards of solvency, including minimum capital requirements, and business conduct. MBIA UK is required to file annual regulatory returns with the PRA.

National

Capital and Surplus

National reported total statutory capital of $3.4 billion as of September 30, 2015 compared with $3.3 billion as of December 31, 2014. As of September 30, 2015, statutory capital comprised $1.0 billion of contingency reserves and $2.4 billion of policyholders’ surplus. National had statutory net income of $203 million for the nine months ended September 30, 2015. As of September 30, 2015, National’s unassigned surplus was $1.9 billion.

Under statutory accounting and NYIL, National’s purchase of 8 million shares of MBIA Inc. common stock in the second quarter of 2015 is recorded as an investment and measured at fair value. However, the value of the investment that can be admitted is subject to limitation. As of September 30, 2015, the fair value and admitted value of the MBIA Inc. common shares owned by National were $44 million and $17 million, respectively.

In order to maintain its New York State financial guarantee insurance license, National is required to maintain a minimum of $65 million of policyholders’ surplus. National is also required to maintain contingency reserves to provide protection to policyholders in the event of extreme losses in adverse economic events. Refer to the following “MBIA Corp.—Capital and Surplus” section for additional information about contingency reserves under the NYIL. As of September 30, 2015 and December 31, 2014, National was not in compliance with certain of its single risk limits but was in compliance with its aggregate risk limits.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

CAPITAL RESOURCES (continued)

NYIL regulates the payment of dividends by financial guarantee insurance companies and provides that such companies may not declare or distribute dividends except out of statutory earned surplus. Under NYIL, the sum of (i) the amount of dividends declared or distributed during the preceding 12-month period and (ii) the dividend to be declared may not exceed the lesser of (a) 10% of policyholders’ surplus, as reported in the latest statutory financial statements or (b) 100% of adjusted net investment income for such 12-month period (the net investment income for such 12-month period plus the excess, if any, of net investment income over dividends declared or distributed during the two-year period preceding such 12-month period), unless the Superintendent of the NYSDFS approves a greater dividend distribution based upon a finding that the insurer will retain sufficient surplus to support its obligations.

National had positive earned surplus as of September 30, 2015, which provides National with dividend capacity. As a condition to the NYSDFS’ approval of the simultaneous repurchase and reverse repurchase agreements (“Asset Swap”) between MBIA Inc. and National, the NYSDFS requested that, until the notional amount of the Asset Swap has been reduced to 5% or less of National’s admitted assets, each of MBIA Inc., MBIA Corp. and National provide the NYSDFS with three months prior notice, or such shorter period as the NYSDFS may permit, of its intent to initiate cash dividends on shares of its common stock. As of September 30, 2015, the notional amount of the Asset Swap was below the 5% of National’s admitted assets. Subsequent to September 30, 2015, National declared and paid a dividend of $114 million to its ultimate parent, MBIA Inc. For the foreseeable future, we expect the as of right declared and paid dividend amounts from National to be limited by the adjusted net investment income calculation.

Claims-Paying Resources (Statutory Basis)

CPR is a key measure of the resources available to National to pay claims under its insurance policies. CPR consists of total financial resources and reserves calculated on a statutory basis. CPR has been a common measure used by financial guarantee insurance companies to report and compare resources and continues to be used by MBIA’s management to evaluate changes in such resources. We have provided CPR to allow investors and analysts to evaluate National using the same measure that MBIA’s management uses to evaluate National’s resources to pay claims under its insurance policies. There is no directly comparable GAAP measure. Our calculation of CPR may differ from the calculation of CPR reported by other companies.

National’s CPR and components thereto, as of September 30, 2015 and December 31, 2014 are presented in the following table:

	As of September 30,		As of December 31,
In millions	2015		2014
Policyholders’ surplus	$	2,445	$	2,190
Contingency reserves		960		1,076
Statutory capital		3,405		3,266
Unearned premium reserve		1,134		1,375
Present value of installment premiums (1)		203		216
Premium resources (2)		1,337		1,591
Net loss and LAE reserves (1)		(20)		(13)
Salvage reserves		100		106
Gross loss and LAE reserve		80		93
Total claims-paying resources	$	4,822	$	4,950

(1) - Calculated using a discount rate of 2.90% as of September 30, 2015 and December 31, 2014.

(2) - Includes financial guarantee and insured credit derivative related premiums.

MBIA Corp.

Capital and Surplus

MBIA Corp. reported total statutory capital of $813 million as of September 30, 2015 compared with $859 million as of December 31, 2014. As of September 30, 2015, statutory capital comprised $270 million of contingency reserves and $543 million of policyholders’ surplus. For the nine months ended September 30, 2015, MBIA Corp. had a statutory net loss of $55 million. MBIA Corp.’s policyholders’ surplus as of September 30, 2015 included a negative unassigned surplus of $1.5 billion. As of September 30, 2015, MBIA Corp.’s policyholders’ surplus was negatively impacted by $126 million because under NYIL it was not permitted to treat as an admitted asset the portion of its investment in subsidiaries in excess of 60% of net admitted assets less the par value of common and preferred stock and liabilities. This overage was primarily caused by a decrease in MBIA Corp.’s policyholders’ surplus due to insured losses in the past. MBIA Corp.’s policyholders’ surplus may be further negatively impacted if future additional insured losses are incurred and the percentage of its assets invested in subsidiaries continues to increase.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

CAPITAL RESOURCES (continued)

As of September 30, 2015, MBIA Corp. recognized estimated recoveries of $387 million, net of reinsurance on a statutory basis related to put-backs of ineligible mortgage loans in its insured transactions and $442 million related to excess spread recoveries on second-lien RMBS, net of reinsurance. These excess spread recoveries represented 54% of MBIA Corp.’s statutory capital as of September 30, 2015. There can be no assurance that we will be successful or that we will not be delayed in realizing these recoveries. Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements for additional information about these recoveries.

Under NYIL, MBIA Corp. is also required to establish a contingency reserve to provide protection to policyholders in the event of extreme losses in adverse economic events. The amount of the reserve is based on the percentage of principal insured or premiums earned, depending on the type of obligation (net of collateral, reinsurance, refunding, refinancings and certain insured securities). Reductions in the contingency reserve may be recognized based on excessive reserves and under certain stipulated conditions, subject to the approval of the Superintendent of the NYSDFS. As a result of regulatory approved reductions, MBIA Corp.’s contingency reserves of $270 million as of September 30, 2015 represented reserves on 45 of the 355 outstanding credits insured by MBIA Corp.

In order to maintain its New York State financial guarantee insurance license, MBIA Corp. is required to maintain a minimum of $65 million of policyholders’ surplus. Under NYIL, MBIA Corp. is required to invest its minimum surplus and contingency reserves and 50% of its loss reserves and unearned premium reserves in certain qualifying assets. As of September 30, 2015, MBIA Corp. maintained its minimum requirement of policyholders’ surplus and had enough qualifying assets to support its contingency reserves. As of September 30, 2015, MBIA Corp. was in compliance with its aggregate risk limits under the NYIL. If MBIA Corp. is not in compliance with its aggregate risk limits, the NYSDFS may prevent MBIA Corp. from transacting any new financial guarantee insurance business until it no longer exceeds the limitations. If new overages occur with respect to its single risk limits in 2015, MBIA Corp. will report them to the NYSDFS. In 2014, MBIA Corp. reported additional overages to the NYSDFS with respect to its single risk limits due to changes in its statutory capital.

In connection with MBIA Corp. obtaining approval from the NYSDFS to release excessive contingency reserves in previous periods, MBIA Corp. agreed that it would not pay any dividends without prior approval from the NYSDFS. Due to its significant negative earned surplus, MBIA Corp. has not had the statutory capacity to pay dividends since December 31, 2009. Based on estimated future income, MBIA Corp. is not expected to have any statutory capacity to pay any dividends for the foreseeable future.

As of September 30, 2015, the par amount outstanding of MBIA Corp.’s 14% Fixed-to-Floating Rate Surplus Notes due January 15, 2033 (the “Surplus Notes”) was $953 million. Section 1307 of the Insurance Law and the Fiscal Agency Agreement governing the surplus notes (the “Fiscal Agency Agreement”), which was approved as it relates to Section 1307 by the NYSDFS in connection with the issuance of the Surplus Notes, each impose restrictions on the payments of principal and interest (or the redemption price or any make-whole premium) on the Surplus Notes (“Surplus Note Payments”). Section 1307 of the Insurance Law provides that any payments on surplus notes issued by an insurer “shall be repaid only out of free and divisible surplus of such insurer with the approval of the superintendent whenever, in his judgment, the financial condition of such insurer warrants.” The Superintendent has broad discretion in determining whether to allow us to make Surplus Note Payments. We are not aware of any guidelines or interpretations that govern the exercise of the Superintendent’s discretion under Section 1307 in determining whether the financial condition of an insurer warrants the making of such payments. The Fiscal Agency Agreement provides that (a) Surplus Note Payments may be made only with the prior approval of the Superintendent, whenever, in his judgment, the financial condition of MBIA Corp. warrants, and (b) any such Surplus Note Payments may only be made to the extent MBIA Corp. has sufficient “Eligible Surplus” to make such payment. The Fiscal Agency Agreement defines “Eligible Surplus” as MBIA Corp. “surplus as regards policyholders,” less the sum of its “common capital stock” and “preferred capital stock”, as shown on its annual and quarterly statements filed with state insurance regulatory authorities. While the insurance law does not explicitly set forth the calculation of “free and divisible surplus”, MBIA believes that the calculation of Eligible Surplus, as set forth in the Fiscal Agency Agreement and as accepted by the NYSDFS, is the appropriate calculation of “free and divisible surplus”. MBIA Corp.’s “free and divisible” surplus, determined as set forth above, was $252 million as of September 30, 2015 representing an increase of $1 million from December 31, 2014. MBIA Corp. is required to seek the Superintendent’s approval to make payments of interest and principal when scheduled on the Surplus Notes. There is no assurance the Superintendent will approve Surplus Note Payments. Notwithstanding the sufficiency of MBIA Corp.’s Eligible Surplus available for the payment of Surplus Note Payments, the NYSDFS may deny approval of any Surplus Note Payments if the Superintendent concludes that MBIA Corp.’s financial condition does not warrant such approval.

The NYSDFS has not approved MBIA Corp.’s requests to make interest payments on the Surplus Notes since, and including, the January 15, 2013 interest payment. The NYSDFS has cited both MBIA Corp.’s liquidity and financial condition as well as the availability of “free and divisible surplus” as the basis for such non-approvals. As of October 15, 2015, the scheduled interest payment date, there was $369 million of unpaid interest on the Surplus Notes. The unpaid interest on the Surplus Notes will become due on the first business day on or after which MBIA Corp. obtains approval to pay some or all of such accrued and unpaid interest. No interest has been accrued or will accrue on the deferred interest.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

CAPITAL RESOURCES (continued)

Claims-Paying Resources (Statutory Basis)

CPR is a key measure of the resources available to MBIA Corp. to pay claims under its insurance policies. CPR consists of total financial resources and reserves calculated on a statutory basis. CPR has been a common measure used by financial guarantee insurance companies to report and compare resources, and continues to be used by MBIA’s management to evaluate changes in such resources. We have provided CPR to allow investors and analysts to evaluate MBIA Corp., using the same measure that MBIA’s management uses to evaluate MBIA Corp.’s resources to pay claims under its insurance policies. There is no directly comparable GAAP measure. Our calculation of CPR may differ from the calculation of CPR reported by other companies.

MBIA Corp.’s CPR and components thereto, as of September 30, 2015 and December 31, 2014 are presented in the following table:

In millions	As of September 30, 2015		As of December 31, 2014
Policyholders’ surplus	$	543	$	542
Contingency reserves		270		317
Statutory capital		813		859
Unearned premium reserve		382		434
Present value of installment premiums (1)		575		662
Premium resources (2)		957		1,096
Net loss and LAE reserves (1)		(181)		(237)
Salvage reserves (3)		848		938
Gross loss and LAE reserve		667		701
Total claims-paying resources	$	2,437	$	2,656

(1) - Calculated using a discount rate of 5.17% as of September 30, 2015 and December 31, 2014.

(2) - Includes financial guarantee and insured credit derivative related premiums.

(3) - This amount primarily consists of expected recoveries related to the Company’s excess spread and put-backs.

LIQUIDITY

We use a liquidity risk management framework, the primary objective of which is to match liquidity resources to needs. We monitor our cash and liquid asset resources using daily cash forecasting and stress-scenario testing. Members of MBIA’s senior management meet regularly to review liquidity metrics, discuss contingency plans and establish target liquidity levels. We evaluate and manage liquidity on a legal-entity basis to take into account the legal, regulatory and other limitations on available liquidity resources within the enterprise. The following is a discussion of our liquidity resources and requirements for our holding company and our insurance subsidiaries.

National Liquidity

The primary sources of cash within National include:

• principal and interest receipts on assets held in its investment portfolio; and

• the collection of premiums.

The primary uses of cash within National include:

• payments of operating expenses and taxes; and

• loss payments on insured transactions.

The insurance policies issued or reinsured by National provide unconditional and irrevocable guarantees of payments of the principal of, and interest or other amounts owing on, insured obligations when due. In the event of a default in payment of principal, interest or other insured amounts by an issuer, National generally promises to make funds available in the insured amount within one to three business days following notification. In some cases, the amount due can be substantial, particularly if the default occurs on a transaction to which National has a large notional exposure or on a transaction structured with large, bullet-type principal maturities. The fact that the U.S. public finance insurance segment’s financial guarantee contracts generally cannot be accelerated by a party other than the insurer helps to mitigate liquidity risk in this segment.

National maintains an Asset Swap facility with MBIA Inc. which provides MBIA Inc. with eligible assets to pledge under investment agreements and derivative contracts. As of September 30, 2015, the notional amount used under each of these agreements was $219 million and the fair value of collateral pledged by National and MBIA Inc. under these agreements was $228 million and $234 million, respectively. The net average interest rate on these transactions was 0.26% and 0.24% for the nine months ended September 30, 2015 and 2014, respectively.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

LIQUIDITY (continued)

As of September 30, 2015, National held cash and short-term investments of $428 million, of which $387 million was highly liquid and comprised highly rated commercial paper, money market funds and municipal, U.S. agency and corporate bonds. As of December 31, 2014, National held cash and short-term investments of $595 million, of which $528 million was highly liquid and comprised commercial paper, money market funds, and highly rated municipal, U.S. agency and corporate bonds.

Corporate Liquidity

Corporate’s liquidity resources support our MBIA Inc. entity. The primary sources of cash available to MBIA Inc. to meet its liquidity needs include:

• available cash and liquid assets not subject to collateral posting requirements;

• dividends from subsidiaries;

• payments under tax sharing agreements from subsidiaries;

• principal and interest receipts on assets held in its investment portfolio; and

• access to capital markets.

The primary uses of cash within MBIA Inc. include:

• servicing outstanding corporate debt instruments, the intercompany loans that support MTNs issued by GFL and investment agreements;

• managing collateral requirements under hedging arrangements, investment agreements and the Asset Swap;

• making payments related to interest rate swaps;

• managing investments including investments in subsidiaries; and

• payments of operating expenses.

Based on our projections of National’s and MBIA Corp.’s future earnings and losses, we expect that for the foreseeable future National will be the primary source of dividends and tax sharing agreement payments to MBIA Inc. There can be no assurance as to the amount and timing of any such dividends or payments under the tax sharing agreements. Subsequent to September 30, 2015, National declared and paid a dividend of $114 million to its ultimate parent, MBIA Inc. For the foreseeable future, we expect the as of right declared and paid dividend amounts from National to be limited based on net investment income and to be substantially lower than previous dividends. Refer to the “Capital Resources—Insurance Statutory Capital” section for additional information on payments of dividends. In addition, we do not expect MBIA Inc. to receive distributions from MBIA Corp. for the foreseeable future.

During the nine months ended September 30, 2015, $228 million was released to MBIA Inc. under the MBIA group tax sharing agreement and related escrow agreement. This amount represented National’s liability under the tax sharing agreement for the 2012 tax year, which was released from escrow pursuant to the terms under the tax sharing agreement following the expiration of National’s two-year net operating loss carry-back period under U.S. tax rules. As of September 30, 2015, $283 million was held in escrow for the 2013 through the 2015 tax years. Based on our projections of National’s taxable income and the market performance of the Tax Escrow Account, we expect to release $105 million from the Tax Escrow Account related to the 2013 tax year in January of 2016. There can be no assurance that payments under the Tax Escrow Account from subsidiaries will be released to MBIA Inc.

Currently, the majority of the cash and securities of MBIA Inc. is pledged against investment agreement liabilities, derivatives and the Asset Swap, which limits its ability to raise liquidity through asset sales. If the market value or rating eligibility of the assets which are pledged against MBIA Inc.’s obligations were to decline, we would be required to pledge additional eligible assets in order to meet minimum required collateral amounts against these liabilities. To mitigate these risks, we seek to maintain cash and liquidity resources that we believe will be sufficient to make all payments due on our obligations and to meet other financial requirements, such as posting collateral. Contingent liquidity resources include: (1) accessing the capital markets; (2) sales of invested assets exposed to credit spread stress risk, which may occur at losses and increase MBIA Inc.’s net debt; and (3) termination and settlement of interest rate swap agreements. These actions, if taken, are expected to result in either additional liquidity or reduced exposure to adverse credit spread movements. There can be no assurance that these actions will be sufficient to fully mitigate this risk. Information concerning our credit spread sensitivity appears in Part I, Item 3, “Quantitative and Qualitative Disclosures about Market Risk.”

As of September 30, 2015 and December 31, 2014, the liquidity positions of MBIA Inc. comprising cash and liquid assets for general corporate purposes, excluding the amounts held in escrow under its tax sharing agreement, were $306 million and $498 million, respectively.

88

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

LIQUIDITY (continued)

MBIA Corp. Liquidity

The primary sources of cash within MBIA Corp. include:

• the collection of installment premiums;

• our ability to collect on recoveries associated with loss payments; and

• principal and interest receipts on assets held in its investment portfolio.

The primary uses of cash within MBIA Corp. include:

• loss payments on insured transactions;

• payments made to commute insured exposures;

• payments of principal and interest related to its surplus notes, to the extent approved by the NYSDFS. Refer to “Capital Resources—Insurance Statutory Capital” for a discussion on the non-approval of requests to the NYSDFS to pay interest on its surplus notes; and

• payments of operating expenses.

Insured transactions that require payment in full of the principal insured at maturity could present liquidity risk for MBIA Corp. as any salvage recoveries from such payments could be recovered over time but after the payment of the principal amount. MBIA Corp. has insured transactions with substantial principal amounts due at maturity that are scheduled to mature in the near term. MBIA Corp. is generally required to satisfy claims within one to three business days, and as a result seeks to identify potential claims in advance through our monitoring process. While our financial guarantee policies generally cannot be accelerated, thereby helping to mitigate liquidity risk, insurance of CDS and certain other derivative contracts may, in certain circumstances, including the occurrence of certain insolvency or payment defaults, be subject to termination by the counterparty, triggering a claim for the fair value of the contract. In order to monitor liquidity risk and maintain appropriate liquidity resources, we use the same methodology as we use to monitor credit quality and losses within our insured portfolio, including stress scenarios. Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements for a discussion of our loss process.

MBIA Corp. has recorded expected excess spread recoveries of $510 million as of September 30, 2015 associated with insured second-lien RMBS issues, including recoveries related to consolidated VIEs. MBIA Corp. has also recorded expected recoveries related to its claims against Credit Suisse related to ineligible loans included in an MBIA Corp. insured RMBS transaction. There can be no assurance that we will be successful or that we will not be delayed in realizing these recoveries. During the nine months ended September 30, 2015, MBIA Corp. collected $69 million of excess spread recoveries related to insured second-lien RMBS issues. During the nine months ended September 30, 2015, recoveries on second-lien RMBS issues exceeded paid claims and LAE by $12 million.

The liquidity position of MBIA Corp. has been stressed due to ongoing payments on second-lien RMBS exposures, payments on its remaining CMBS exposures and payments to counterparties in consideration for the commutation of insured transactions, which have resulted in a substantial reduction of exposure and potential loss volatility. Depending on the amount of actual future claims, including claims on insured exposures that in some cases may require large bullet payments, and the amount of future cash inflows, in particular in excess spread and put-back recoverables, MBIA Corp. may not have sufficient liquid assets to pay its claims. While future commutation opportunities will be limited due to the portfolio reduction that has already taken place, management’s assessment of available liquidity will be factored in any commutation decision. Also, future commutation payments on insured transactions to counterparties will depend on management’s assessment of available liquidity or ability to secure other sources of financing. In the event that we experience other unexpected liquidity requirements, we may have insufficient resources to meet our obligations or insufficient qualifying assets to support our surplus and reserves, and may seek to increase liquidity through financing transactions. There can be no assurance that we will be successful in generating sufficient cash to meet our obligations.

As of September 30, 2015, MBIA Corp. held cash and investments of $1.1 billion, of which $399 million comprised cash and highly liquid assets that were immediately available to MBIA Corp. Included in the $1.1 billion was $670 million of cash and investments held by MBIA Insurance Corporation’s subsidiaries. As of December 31, 2014, MBIA Corp. held cash and investments of $1.2 billion, of which $443 million comprised cash and highly liquid assets that were immediately available to MBIA Corp. Included in the $1.2 billion was $701 million of cash and investments held by MBIA Insurance Corporation’s subsidiaries. Currently, MBIA UK can only pay dividends to MBIA Insurance Corporation with the approval of the PRA; however, there is no certainty as to when such consent would be provided. Based on MBIA Corp.’s liquidity position and our assessment of payment risks on insured exposures, we believe that MBIA Corp.’s liquidity resources, including expected cash inflows, will adequately provide for anticipated cash outflows, including expected future claim payments.

89

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

LIQUIDITY (continued)

Consolidated Cash Flows

Information about our consolidated cash flows by category is presented on our consolidated statements of cash flows. The following table presents a summary of our consolidated cash flows for the nine months ended September 30, 2015 and 2014:

	Nine Months Ended September 30,				Percent Change
In millions	2015		2014
Statement of cash flow data:
Net cash provided (used) by:
Operating activities	$	42	$	(350)		n/m
Investing activities		543		457		19%
Financing activities		(886)		(754)		18%
Effect of exchange rate changes on cash and cash equivalents		11		(5)		n/m
Cash and cash equivalents—beginning of period		782		1,258		-38%
Cash and cash equivalents—end of period	$	492	$	606		-19%

n/m - Percent change not meaningful.

Operating activities

Net cash provided by operating activities increased for the nine months ended September 30, 2015 compared with the same period of 2014 primarily due to decreases in insured derivative commutations and financial guarantee losses and LAE payments of $472 million, partially offset by decreases in investment income and proceeds from recoveries and reinsurance received of $86 million.

Investing activities

Net cash provided by investing activities increased for the nine months ended September 30, 2015 compared with the same period of 2014 primarily due to increases in net proceeds from purchases, sales, paydowns and maturities of investments and loans receivable of $353 million and proceeds from derivative settlements of $56 million, partially offset by decreases in cash acquired from consolidated VIEs of $214 million and collateral posting of $163 million.

Financing activities

Net cash used by financing activities increased for the nine months ended September 30, 2015 compared with the same period of 2014 primarily due to an increase in the purchase of treasury stock of $277 million partially offset by a decrease in the principal paydown of medium-term and VIE notes of $174 million.

90

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

LIQUIDITY (continued)

Investments

The following discussion of investments, including references to consolidated investments, excludes investments reported under “Assets of consolidated variable interest entities” on our consolidated balance sheets. Investments of VIEs support the repayment of VIE obligations and are not available to settle obligations of MBIA. Our available-for-sale (“AFS”) investments comprise high-quality fixed-income securities and short-term investments. The following table presents our investment portfolio as of September 30, 2015 and December 31, 2014:

In millions	As of September 30, 2015		As of December 31, 2014		Percent Change
Available-for-sale investments:
U.S. public finance insurance
Amortized cost	$	4,295	$	4,390		-2%
Unrealized net gain (loss)		(27)		(7)		n/m
Fair value		4,268		4,383		-3%
International and structured finance insurance
Amortized cost		822		654		26%
Unrealized net gain (loss)		7		20		-65%
Fair value		829		674		23%
Corporate
Amortized cost		1,148		1,465		-22%
Unrealized net gain (loss)		38		49		-22%
Fair value		1,186		1,514		-22%
Total available-for-sale investments:
Amortized cost		6,265		6,509		-4%
Unrealized net gain (loss)		18		62		-71%
Total available-for-sale investments at fair value		6,283		6,571		-4%

91

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

LIQUIDITY (continued)

In millions	As of September 30, 2015		As of December 31, 2014		Percent Change
Investments carried at fair value:
U.S. public finance insurance
Amortized cost		112		144		-22%
Unrealized net gain (loss)		22		(1)		n/m
Fair value		134		143		-6%
International and structured finance insurance
Amortized cost		1		-		n/m
Unrealized net gain (loss)		-		-		-%
Fair value		1		-		n/m
Corporate
Amortized cost		95		112		-15%
Unrealized net gain (loss)		(2)		-		n/m
Fair value		93		112		-17%
Total investments carried at fair value:
Amortized cost		208		256		-19%
Unrealized net gain (loss)		20		(1)		n/m
Total investments carried at fair value		228		255		-11%
Other investments at amortized cost:
U.S. public finance insurance		3		4		-25%
Total other investments at amortized cost		3		4		-25%
Consolidated investments at carrying value	$	6,514	$	6,830		-5%

n/m - Percent change not meaningful.

The fair value of the Company’s investments is based on prices which include quoted prices in active markets and prices based on market-based inputs that are either directly or indirectly observable, as well as prices from dealers in relevant markets. Differences between fair value and amortized cost arise primarily as a result of changes in interest rates and general market credit spreads occurring after a fixed-income security is purchased, although other factors may also influence fair value, including specific credit-related changes, supply and demand forces and other market factors. When the Company holds an AFS investment to maturity, any unrealized gain or loss currently recorded in accumulated other comprehensive income (loss) in the shareholders’ equity section of the balance sheet is reversed. As a result, the Company would realize a value substantially equal to amortized cost. However, when investments are sold prior to maturity, the Company will realize any difference between amortized cost and the sale price of an investment as a realized gain or loss within its consolidated statements of operations.

Credit Quality

The credit quality distribution of the Company’s AFS fixed-maturity investment portfolios, excluding short-term investments, based on ratings from Moody’s as of September 30, 2015 is presented in the following table. Alternate ratings sources, such as S&P or the best estimate of the ratings assigned by the Company, have been used for a small percentage of securities that are not rated by Moody’s.

	U.S. Public Finance Insurance				International and Structured Finance Insurance				Corporate				Total
			% of				% of				% of				% of
			Fixed-				Fixed-				Fixed-				Fixed-
	Fair		Income		Fair		Income		Fair		Income		Fair		Income
In millions	Value		Investments		Value		Investments		Value		Investments		Value		Investments
Available-for-sale:
Aaa	$	1,698		44%	$	171		33%	$	442		47%	$	2,311		43%
Aa		1,298		33%		238		46%		70		7%		1,606		30%
A		736		19%		84		16%		294		31%		1,114		21%
Baa		119		3%		8		2%		67		7%		194		3%
Below investment grade		22		1%		17		3%		47		5%		86		2%
Not rated		17		0%		-		0%		26		3%		43		1%
Total	$	3,890		100%	$	518		100%	$	946		100%	$	5,354		100%
Short-term investments		369				311				236				916
Investments carried at fair value		134				1				93				228
Other investments		12				-				4				16
Consolidated investments at carrying value	$	4,405			$	830			$	1,279			$	6,514

92

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

LIQUIDITY (continued)

As of September 30, 2015, the weighted average credit quality of the Company’s AFS investment portfolios, excluding short-term and other investments, as presented in the preceding table are as follows:

	U.S. Public Finance Insurance	International and Structured Finance Insurance	Corporate
Weighted average credit quality ratings	Aa	Aa	Aa

Insured Investments

MBIA’s consolidated investment portfolio includes investments that are insured by various financial guarantee insurers (“Insured Investments”), including investments insured by National and MBIA Corp. (“Company-Insured Investments”). As of September 30, 2015, Insured Investments at fair value represented $585 million or 9% of consolidated investments, of which $414 million or 6% of consolidated investments were Company-Insured Investments. As of September 30, 2015, based on the actual or estimated underlying ratings of our consolidated investment portfolio, without giving effect to financial guarantees, the weighted average rating of only the Insured Investments in the investment portfolio would be in the Baa range.

In purchasing Insured Investments, the Company independently assesses the underlying credit quality, structure and liquidity of each investment, in addition to the creditworthiness of the insurer. Insured Investments are diverse by sector, issuer and size of holding. The Company assigns underlying ratings to its Insured Investments without giving effect to financial guarantees based on underlying ratings assigned by Moody’s, or another external agency when a rating is not published by Moody’s. When an external underlying rating is not available, the underlying rating is based on the Company’s best estimate of the rating of such investment. A downgrade of a financial guarantee insurer has historically had an adverse effect on the fair value of investments insured by the downgraded financial guarantee insurer. If MBIA determines that declines in the fair values of Insured Investments are other-than-temporary, the Company will record a realized loss through earnings.

The underlying ratings of the Company-Insured Investments as of September 30, 2015 are reflected in the following table. Amounts represent the fair value of such investments including the benefit of the MBIA guarantee. The ratings in the following table are based on ratings from Moody’s. Alternate ratings sources, such as S&P, have been used for a small percentage of securities that are not rated by Moody’s.

In millions	U.S.  Public Finance Insurance		International and Structured  Finance Insurance		Corporate		Total
Underlying Ratings Scale
National:
Aa	$	-	$	-	$	31	$	31
A		124		-		161		285
Total National	$	124	$	-	$	192	$	316
MBIA Corp.:
Aa		-		-		33		33
Baa		-		-		7		7
Below investment grade		-		13		45		58
Total MBIA Corp.	$	-	$	13	$	85	$	98
Total Company-Insured Investments	$	124	$	13	$	277	$	414

Without giving effect to the National and MBIA Corp. guarantees of the Company-Insured Investments in the consolidated investment portfolio, as of September 30, 2015, based on actual or estimated underlying ratings, the weighted average rating of the consolidated investment portfolio was in the Aa range. The weighted average rating of only the Company-Insured Investments was in the Baa range, and investments rated below investment grade in the Company-Insured Investments were 4% of the total consolidated investment portfolio.

Impaired Investments

As of September 30, 2015 and December 31, 2014, we held impaired AFS investments (investments for which fair value was less than amortized cost) with a fair value of $2.0 billion and $2.1 billion, respectively.

93

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

LIQUIDITY (continued)

We analyze impaired investments within our investment portfolio for OTTI on a quarterly basis. Key factors considered when assessing OTTI include but are not limited to: (a) structural and economic factors among security types that represent our largest exposure to credit impairment losses; (b) the duration and severity of the unrealized losses (i.e., a decline in the market value of a security by 20% or more at the time of the review, or 5% impaired at the time of review with a fair value below amortized cost for a consecutive 12-month period); and (c) the results of various cash flow modeling techniques. Our cash flow analysis considers all sources of cash, including credit enhancement, that support the payment of amounts owed by an issuer of a security. This includes the consideration of cash to be provided by financial guarantors, including MBIA Corp., resulting from an actual or potential insurance policy claim.

Refer to “Note 7: Investments” in the Notes to Consolidated Financial Statements for a detailed discussion about impaired investments.

Debt Obligations

Principal payments due under our debt obligations for the three months ending December 31, 2015 and each of the subsequent four years ending December 31 and thereafter are presented in the following table. The repayment of principal on our surplus notes is reflected in 2018, which is the next call date. Principal payments under investment agreements are based on scheduled withdrawal dates. All other principal payments are based on contractual maturity dates. Foreign currency denominated liabilities are presented in U.S. dollars using applicable exchange rates as of September 30, 2015, and liabilities issued at a discount reflect principal amounts due at maturity.

	As of September 30, 2015
In millions	Three Months Ending December 31, 2015		2016		2017		2018		2019		Thereafter		Total
International and structured finance insurance segment:
Variable interest entity notes	$	274	$	498	$	513	$	466	$	331	$	2,986	$	5,068
Surplus notes		-		-		-		940		-		-		940
Corporate segment:
Long-term debt		-		-		-		-		-		573		573
Medium-term notes		-		115		40		59		56		1,112		1,382
Investment agreements		4		37		56		17		8		427		549
Total	$	278	$	650	$	609	$	1,482	$	395	$	5,098	$	8,512

94

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company’s market risk exposures relate to changes in interest rates, foreign exchange rates and credit spreads that affect the fair value of its financial instruments, namely investment securities, MTNs, investment agreement liabilities and certain derivative transactions. The Company’s investment portfolio holdings are primarily U.S. dollar-denominated fixed-income securities including municipal bonds, U.S. government bonds, MBS, collateralized mortgage obligations, corporate bonds and ABS. In periods of rising and/or volatile interest rates, foreign exchange rates and credit spreads, profitability could be adversely affected should the Company have to liquidate these securities.

MBIA minimizes its exposure to interest rate risk, foreign exchange risk and credit spread movement through active portfolio management to ensure a proper mix of the types of securities held and to stagger the maturities of its fixed-income securities.

Interest Rate Sensitivity

Interest rate sensitivity can be estimated by projecting a hypothetical instantaneous increase or decrease in interest rates. The following table presents the estimated pre-tax change in fair value of the Company’s financial instruments as of September 30, 2015 from instantaneous shifts in interest rates:

	Change in Interest Rates
In millions	300 Basis Point Decrease		200 Basis Point Decrease		100 Basis Point Decrease		100 Basis Point Increase		200 Basis Point Increase		300 Basis Point Increase
Estimated change in fair value	$	309	$	211	$	119	$	(132)	$	(257)	$	(372)

Foreign Exchange Rate Sensitivity

The Company is exposed to foreign exchange rate risk in respect of assets and liabilities denominated in currencies other than U.S. dollars. In addition to our international insurance business, some of the remaining liabilities included in our corporate segment are denominated in currencies other than U.S. dollars. Also, the Company regularly makes investments denominated in foreign currencies. The majority of the Company’s foreign exchange rate risks is with the pound sterling and the euro. Foreign exchange rate sensitivity can be estimated by projecting a hypothetical instantaneous increase or decrease in foreign exchange rates. The following table presents the estimated pre-tax change in fair value of the Company’s financial instruments as of September 30, 2015 from instantaneous shifts in foreign exchange rates:

	Change in Foreign Exchange Rates
	Dollar Weakens				Dollar Strengthens
In millions	20%		10%		10%		20%
Estimated change in fair value	$	(12)	$	(6)	$	6	$	12

Credit Spread Sensitivity

Credit spread sensitivity can be estimated by projecting a hypothetical instantaneous increase or decrease in credit spreads. The following table presents the estimated pre-tax change in fair value of the Company’s financial instruments as of September 30, 2015 from instantaneous shifts in credit spread curves. It was assumed that all credit spreads move by the same amount. It is more likely that the actual changes in credit spreads will vary by security. National’s investment portfolio would generally be expected to experience lower credit spread volatility than other investment portfolios since National has higher credit quality and portfolio composition in sectors that have been less volatile historically. The changes in fair value reflect partially offsetting effects as the value of the investment portfolios generally changes in an opposite direction from the liability portfolio.

	Change in Credit Spreads
In millions	50 Basis Point Decrease		50 Basis Point Increase		200 Basis Point Increase
Estimated change in fair value	$	130	$	(81)	$	(362)

Credit Derivatives Sensitivity

MBIA Corp. issued insurance policies insuring payments due on structured credit derivative contracts which are marked-to-market through earnings under the accounting principles for derivatives and hedging activities. The majority of these structured CDSs related to structured finance transactions with underlying reference obligations of cash securities and CDSs referencing liabilities of corporations or of other structured finance securitizations. The asset classes of the underlying reference obligations included corporate, ABS, RMBS and CMBS. These transactions were usually underwritten at or above a triple-A credit rating level. As of September 30, 2015, approximately 61% of the tranches insured by the Company were rated triple-A.

95

Item 3. Quantitative and Qualitative Disclosures About Market Risk (continued)

As changes in fair value can be caused by factors unrelated to the performance of MBIA Corp.’s business and credit portfolio, including general market conditions and perceptions of credit risk, as well as market use of credit derivatives for hedging purposes unrelated to the specific referenced credits in addition to events that affect particular credit derivative exposures, the application of fair value accounting will cause the Company’s earnings to be more volatile than would be suggested by the underlying performance of MBIA’s business operations and credit portfolio.

The following tables reflect sensitivities to changes in credit spreads, credit rating, recovery rates and MBIA Corp.’s upfront credit spreads. Each table stands on its own and should be read independently of each other. Refer to “Note 6: Fair Value of Financial Instruments” in the Notes to Consolidated Financial Statements for further information about the Company’s financial assets and liabilities that are accounted for at fair value, including valuation techniques and disclosures required by GAAP.

Sensitivity to changes in credit spreads can be estimated by projecting a hypothetical instantaneous shift in credit spread curves. The following table presents the estimated pre-tax change in fair value and the cumulative estimated net fair value of MBIA Corp.’s credit derivatives portfolio of instantaneous shifts in credit spreads as of September 30, 2015. In scenarios where credit spreads decreased, a floor of zero was used.

	Change in Credit Spreads
	(International and Structured Finance Insurance)
In millions	600 Basis Point Decrease		200 Basis Point Decrease		50 Basis Point Decrease		0 Basis Point Change		50 Basis Point Increase		200 Basis Point Increase		600 Basis Point Increase
Estimated pre-tax net gains (losses)	$	21	$	8	$	2	$	-	$	(2)	$	(8)	$	(25)
Estimated net fair value	$	(100)	$	(113)	$	(119)	$	(121)	$	(123)	$	(129)	$	(146)

Actual shifts in credit spread curves will vary based on the credit quality of the underlying reference obligations. In general, within any asset class, higher credit rated reference obligations will exhibit less credit spread movement than lower credit rated reference obligations. Additionally, the degree of credit spread movement can vary significantly for different asset classes. The basis point change presented in the preceding table, however, represents a fixed basis point change in referenced obligation credit spreads across all credit quality rating categories and asset classes and, therefore, the actual impact of spread changes would vary from this presentation depending on the credit rating and distribution across asset classes, both of which will adjust over time depending on new business written and runoff of the existing portfolio.

The following table presents the estimated pre-tax change in fair value and the cumulative estimated net fair value of MBIA Corp.’s insured credit derivatives portfolio by projecting a hypothetical change in the credit ratings as of September 30, 2015. A notch represents a one-step movement up or down in the credit rating.

	Change in Credit Ratings
	(International and Structured Finance Insurance)
In millions	Three Notch Increase		One Notch Increase		No Change		One Notch Decrease		Three Notch Decrease
Estimated pre-tax net gains (losses)	$	36	$	5	$	-	$	(22)	$	(61)
Estimated net fair value	$	(85)	$	(116)	$	(121)	$	(143)	$	(182)

Recovery rates on defaulted collateral are an input into MBIA Corp.’s valuation model. Sensitivity to changes in the recovery rate assumptions used by MBIA Corp. can be estimated by projecting a hypothetical change in these assumptions. The following table presents the estimated pre-tax change in fair value and the cumulative estimated net fair value of MBIA Corp.’s insured credit derivatives portfolio based on a change in the recovery rate assumptions as of September 30, 2015.

	Change in Recovery Rates (International and Structured Finance Insurance)
In millions	20% Increase		10% Increase		No Change		10% Decrease		20% Decrease
Estimated pre-tax net gains (losses)	$	12	$	6	$	-	$	(7)	$	(13)
Estimated net fair value	$	(109)	$	(115)	$	(121)	$	(128)	$	(134)

96

Item 3. Quantitative and Qualitative Disclosures About Market Risk (continued)

Accounting principles for fair value measurements require MBIA Corp. to incorporate its own nonperformance risk in its valuation methodology. Sensitivity to changes in MBIA Corp.’s credit spreads can be estimated by projecting a hypothetical change in this assumption. The following table presents the estimated pre-tax change in fair value and the cumulative estimated net fair value of MBIA Corp.’s insured credit derivative portfolio. The actual upfront spread used in the valuation as of September 30, 2015 ranged from 12.24% to 30.7% based on the tenor of each transaction. The below amounts include an additional annual running credit spread of 5%.

	MBIA Corp.’s Upfront Credit Spread
	(International and Structured Finance Insurance)
In millions	Increase by 15 Percentage Points		Increase by 7 Percentage Points		No Change		Decrease to 0 Percentage Points
Estimated pre-tax net gains (losses)	$	20	$	9	$	-	$	(24)
Estimated net fair value	$	(101)	$	(112)	$	(121)	$	(145)

MBIA Corp.’s insurance of structured credit derivatives typically remain in place until the maturity of the derivative. With respect to MBIA Corp.’s insured structured credit derivatives, in the absence of credit impairments or the termination of derivatives at losses, the cumulative unrealized losses should reverse before or at maturity of the contracts. Additionally, in the event of the termination and settlement of a contract prior to maturity, any resulting gain or loss upon settlement will be recorded in our consolidated financial statements.

Warrants Sensitivity

Warrants issued by the Company to purchase shares of MBIA Inc. common stock are recorded at fair value in the Company’s balance sheet and changes in fair value are recorded through earnings. The Company values these warrants using the Black-Scholes model. Refer to “Note 6: Fair Value of Financial Instruments” in the Notes to Consolidated Financial Statements for further information about the valuation of warrants issued by the Company.

While several factors influence the value of the Company’s warrants, including stock price, stock volatility, interest rates and dividends, changes in the value of the Company’s warrants are primarily driven by changes in the Company’s stock price and volatility. The following tables present the estimated pre-tax change in fair value and the estimated aggregate fair value of the Company’s warrants assuming hypothetical stock price and volatility changes as of September 30, 2015. Each table stands on its own and should be read independently of each other.

	Change in Stock Price
In millions	25% Increase		10% Increase		No Change		10% Decrease		25% Decrease
Estimated pre-tax net gains (losses)	$	(10)	$	(3)	$	-	$	4	$	8
Estimated net fair value	$	(27)	$	(20)	$	(17)	$	(13)	$	(9)
	Change in Stock Volatility
In millions	10% Increase		5% Increase		No Change		5% Decrease		10% Decrease
Estimated pre-tax net gains (losses)	$	(4)	$	(2)	$	-	$	3	$	5
Estimated net fair value	$	(21)	$	(19)	$	(17)	$	(14)	$	(12)

Item 4. Controls and Procedures

As of the end of the period covered by this report, an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934) was performed under the supervision and with the participation of the Company’s senior management, including the Chief Executive Officer and the Chief Financial Officer. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report. In addition, there have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter to which this report relates that have materially affected, or are likely to materially affect, the Company’s internal control over financial reporting.

97

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of the Company’s litigation and related matters, see “Note 13: Commitments and Contingencies” in the Notes to Consolidated Financial Statements of MBIA Inc. and Subsidiaries in Part I, Item 1. In the normal course of operating its businesses, MBIA Inc. may be involved in various legal proceedings. As a courtesy, the Company posts on its website under the section “Legal Proceedings,” selected information and documents in reference to selected legal proceedings in which the Company is the plaintiff or the defendant. The Company will not necessarily post all documents for each proceeding and undertakes no obligation to revise or update them to reflect changes in events or expectations. The complete official court docket can be publicly accessed by contacting the clerk’s office of the respective court where each litigation is pending.

Item 1A. Risk Factors

The following should be read in conjunction with and supplements the risk factors described under Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Insured Portfolio Loss Related Risk Factors

Some of the state, local and territorial governments and finance authorities that issue public finance obligations we insure are experiencing unprecedented fiscal stress that could result in increased credit losses or impairments on those obligations

We have historically experienced low levels of defaults in our United States (“U.S.”) public finance insured portfolio, including during the financial crisis that began in mid-2007. Although the financial conditions of many state, local and territorial governments and finance authorities that issue the obligations we insure have improved since the financial crisis, some issuers continue to report unprecedented fiscal stress that has required them to significantly raise taxes or cut spending in order to satisfy their obligations. In particular, certain jurisdictions have significantly underfunded pension liabilities which are placing additional stress on their finances and are particularly challenging to restructure either through negotiation or under Chapter 9 of the United States Bankruptcy Code. If the issuers of the obligations in our public finance portfolio are unable to raise taxes, cut spending, or receive state or federal assistance, we may experience losses or impairments on those obligations, which could materially and adversely affect our business, financial condition and results of operations. This severe financial stress could result in more Chapter 9 proceedings in states where municipal issuers are permitted to seek bankruptcy protection. In these proceedings, which remain rare, the resolution of bondholder claims (and by extension those of bond insurers) remains uncertain and subject to further litigation in several pending cases.

As of September 30, 2015, National had $4.3 billion of gross insured par exposure plus $399 million in accreted interest on its insured capital appreciation bonds related to the Commonwealth of Puerto Rico and certain of its instrumentalities (“Puerto Rico”). Refer to the “U.S. Public Finance Insurance Puerto Rico Exposures” section in Part I, Item 2 of this Form 10-Q for additional information on our Puerto Rico exposures. Puerto Rico is experiencing fiscal stress and constrained liquidity due to, among other things, Puerto Rico’s structural budget imbalance, limited access to the capital markets, a stagnating local economy, net migration of people out of Puerto Rico and a high debt burden. Although Puerto Rico has tried to address its significant financial challenges through various fiscal policies and by the passage of a balanced general fund budget, it continues to experience significant fiscal stress. In recent months the Governor of Puerto Rico has stated that the island’s approximately $72 billion in debt was “not payable” and has actively lobbied the US Congress for bankruptcy reform and other Federal support. Furthermore, the Governor formed a working group to study and make recommendations regarding Puerto Rico’s short- and long-term challenges. In September of 2015, this working group released a report that projected a sizable deficit of available cash resources to expenses and debt service over the next five years absent meaningful fiscal and structural reform, and concluded that a voluntary adjustment of the terms of the Commonwealth’s debt is necessary.

98

Item 1A. Risk Factors (continued)

We continue to believe, based on our analysis of Puerto Rico’s fiscal and structural circumstances, the details of our insured exposures, and our legal and contractual rights, that all of our insured Puerto Rico related debt will ultimately be substantially repaid. Nevertheless, the Commonwealth or its instrumentalities may be unable or unwilling to pay their obligations as and when due, in which case National would be required to pay claims of unpaid principal and interest when due under its insurance policies, which could be material. In particular, National has guaranteed the payment of $273 million of debt service from bonds issued by the Government Development Bank of Puerto Rico (“GDB”) that are due on December 1, 2015. The GDB’s payment obligation is guaranteed by the government of Puerto Rico. There is no assurance, however, that the GDB will be able to make such payment or that Puerto Rico will honor its guarantee, in which case National will pay under its guarantee. While National would seek to recover any claim payments it makes under its guarantees, there is no assurance that it will be able to recover such payments. To the extent that its claims payments are ultimately substantially greater than its claims recoveries, National may experience material losses on those obligations, which could materially and adversely affect our business, financial condition and results of operations. Finally, if the Commonwealth and/or certain Puerto Rico instrumentalities were granted access to Chapter 9 under the federal Bankruptcy law, as has been proposed by various Federal legislators and recommended by the Obama Administration, any such filing could result in substantial delays in payments on the National insured bonds issued by such instrumentalities and could provide a mechanism to bind National and other creditors to a plan of reorganization that results in an impairment of the National insured debt for such instrumentalities. In addition, allowing Puerto Rico access to Chapter 9 could have an adverse impact on the municipal finance market as a whole due to likely concerns by investors and other market participants about states that experience significant financial stress, which currently are not eligible for bankruptcy protection under Chapter 9, will also be given access to Chapter 9 in the future.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the nine months ended September 30, 2015, investment funds affiliated with Warburg, the largest holder of MBIA Inc. common stock, sold all of its 45.7 million shares of the Company’s common stock. In connection with this sale, National and the Company repurchased 8 million shares and 7.6 million shares, respectively.

On July 29, 2015, the Company’s Board of Directors authorized the repurchase by the Company or its subsidiaries of up to $100 million of its outstanding shares under a new share repurchase authorization, which superseded and terminated the prior authorization. The prior authorization had $61 million available for future repurchases at the time it was terminated. As of September 30, 2015, there was no remaining authorized capacity under the July 29, 2015 repurchase program.

On October 28, 2015, the Company’s Board of Directors authorized the repurchase by the Company or its subsidiaries of up to $100 million of its outstanding shares under a new share repurchase authorization. The table below presents repurchases made by the Company in each month during the third quarter of 2015:

					Total Number		Maximum
	Total		Average		of Shares		Amount That May
	Number		Price		Purchased as		Be Purchased
	of Shares		Paid Per		Part of Publicly		Under the Plan
Month	Purchased (1)		Share		Announced Plan		(in millions)
July		3,270,683	$	6.07		3,269,611	$	100
August		15,847,045		6.45		15,495,816		-
September		1,045		6.79		-		-
		19,118,773	$	6.39		18,765,427	$	-

(1) - Includes 353,346 shares purchased in open market transactions as investments in the Company’s non-qualified deferred compensation plan.

99

Item 5. Other Information

Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934

Pursuant to Section 13(r) of the Securities Exchange Act of 1934, we may be required to disclose in our annual and quarterly reports to the Securities and Exchange Commission (the “SEC”), whether we or any of our “affiliates” knowingly engaged in certain activities, transactions or dealings relating to Iran or with certain individuals or entities targeted by US economic sanctions. Disclosure is generally required even where the activities, transactions or dealings were conducted in compliance with applicable law. Because the SEC defines the term “affiliate” broadly, it includes any entity under common “control” with us (and the term “control” is also construed broadly by the SEC).

The description of the activities below has been provided to the Company by Warburg Pincus LLC (“WP”), affiliates of which: (i) beneficially own more than 10% of our outstanding common stock and are members of our board of directors and (ii) beneficially own more than 10% of the equity interests of, and have the right to designate members of the board of directors of Santander Asset Management Investment Holdings Limited (“SAMIH”). SAMIH may therefore be deemed to be under common “control” with MBIA Inc.; however, this statement is not meant to be an admission that common control exists.

The disclosure below relates solely to activities conducted by SAMIH and its non-U.S. affiliates that may be deemed to be under common “control” with MBIA Inc. The disclosure does not relate to any activities conducted by the Company or by WP and does not involve our or WP’s management. Neither the Company nor WP has had any involvement in or control over the disclosed activities of SAMIH, and neither the Company nor WP has independently verified or participated in the preparation of the disclosure. Neither the Company nor WP is representing as to the accuracy or completeness of the disclosure nor do we or WP undertake any obligation to correct or update it.

The Company understands that SAMIH’s affiliates intend to disclose in their next annual or quarterly SEC report that:

“(a) Santander UK plc (“Santander UK”) holds frozen savings and one current account for two customers resident in the United Kingdom (“U.K.”) who are currently designated by the United States (“U.S.”) for terrorism. The accounts held by each customer were blocked after the customer’s designation and have remained blocked and dormant throughout the nine months ended September 30, 2015. Revenue generated by Santander UK on these accounts is negligible.

(b) An Iranian national, resident in the U.K., who is currently designated by the U.S. under the Iranian Financial Sanctions Regulations and the Weapons of Mass Destruction Proliferators Sanctions Regulations (“NPWMD”), holds a mortgage with Santander UK that was issued prior to any such designation. No further drawdown has been made (or would be permitted) under this mortgage although Santander UK continues to receive repayment installments. In the nine months ended September 30, 2015, total revenue in connection with the mortgage was approximately £2,928 while net profits were negligible relative to the overall profits of Santander UK. Santander UK does not intend to enter into any new relationships with this customer, and any disbursements will only be made in accordance with applicable sanctions. The same Iranian national also holds two investment accounts with Santander ISA Managers Limited. The accounts have remained frozen during the nine months ended September 30, 2015. The investment returns are being automatically reinvested, and no disbursements have been made to the customer. Total revenue for the Santander group in connection with the investment accounts was approximately £161 and net profits in the nine months ended September 30, 2015 were negligible relative to the overall profits of Santander.

(c) In addition, during the third quarter of 2015 two additional Santander UK customers were designated. First, a UK national designated by the U.S. under the Specially Designated Global Terrorist (“SDGT”) sanctions program who is on the U.S. Specially Designated National (“SDN”) list. This customer holds a bank account which generated revenue of approximately £183 during the third quarter of 2015. A stop was placed on the account. Net profits in the third quarter of 2015 were negligible relative to the overall profits of Santander. Second, a UK national also designated by the U.S. under the SDGT sanctions program and on the U.S. SDN list, held a bank account. No transactions were made in the third quarter of 2015 and the account is blocked and in arrears.”

100

Item 6. Exhibits

+31.1.	Chief Executive Officer - Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
+31.2.	Chief Financial Officer - Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1.	Chief Executive Officer - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2.	Chief Financial Officer - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
+101.	Additional Exhibits - MBIA Inc. and Subsidiaries Consolidated Financial Statements and Notes to Consolidated Financial Statements from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015, formatted in XBRL.

+ Filed Herewith

* Furnished Herewith

101

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MBIA Inc. Registrant
Date: November 4, 2015	/s/ C. Edward Chaplin
	C. Edward Chaplin
	Chief Financial Officer
Date: November 4, 2015	/s/ Douglas C. Hamilton
	Douglas C. Hamilton
	Controller (Principal Accounting Officer)

102

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph W. Brown, certify that:

1. I have reviewed the Quarterly Report of MBIA Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”);

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Report;

4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) disclosed in this Report that there were no changes in the Company’s internal control over financial reporting that occurred during the Company’s third quarter of 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and to the audit committee of the board of directors:

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

/s/ Joseph W. Brown

Joseph W. Brown

Chief Executive Officer

November 4, 2015

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, C. Edward Chaplin, certify that:

1. I have reviewed the Quarterly Report of MBIA Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”);

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Report;

4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) disclosed in this Report that there were no changes in the Company’s internal control over financial reporting that occurred during the Company’s third quarter of 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and to the audit committee of the board of directors:

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

/s/ C. Edward Chaplin

C. Edward Chaplin

Chief Financial Officer

November 4, 2015

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MBIA Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph W. Brown, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Joseph W. Brown

Joseph W. Brown

Chief Executive Officer

November 4, 2015

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MBIA Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, C. Edward Chaplin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ C. Edward Chaplin

C. Edward Chaplin

Chief Financial Officer

November 4, 2015

XML

Variable Interest Entities (Summary Of Nonconsolidated VIEs Assets And Liabilities) (Detail) - USD ($) $ in Millions		Sep. 30, 2015	Dec. 31, 2014
Variable Interest Entity [Line Items]
Insurance loss recoverable		$ 437	$ 533
Global Structured Finance [Member]
Variable Interest Entity [Line Items]
VIE Assets		30,141	35,940
Maximum Exposure to Loss		15,929	19,958
Investments	[1]	114	119
Premiums receivable	[2]	91	123
Insurance loss recoverable		432	524	[3]
Unearned premium revenue	[4]	89	121
Loss and loss adjustment expense reserves	[5]	391	389
Derivative liabilities	[6]	17	102
Global Structured Finance [Member] | Collateralized Debt Obligations [Member]
Variable Interest Entity [Line Items]
VIE Assets		6,666	8,613
Maximum Exposure to Loss		3,853	5,623
Investments	[1]	90	110
Premiums receivable	[2]	14	24
Unearned premium revenue	[4]	10	20
Loss and loss adjustment expense reserves	[5]	108	70
Derivative liabilities	[6]	17	102
Global Structured Finance [Member] | Residential Mortgage Backed Securities [Member]
Variable Interest Entity [Line Items]
VIE Assets		12,130	14,136
Maximum Exposure to Loss		6,436	7,459
Investments	[1]	24	9
Premiums receivable	[2]	33	41
Insurance loss recoverable	[3]	426	518
Unearned premium revenue	[4]	32	39
Loss and loss adjustment expense reserves	[5]	275	307
Global Structured Finance [Member] | Commercial Mortgage Backed Securities [Member]
Variable Interest Entity [Line Items]
VIE Assets		329	571
Maximum Exposure to Loss		233	279
Premiums receivable	[2]	1	1
Unearned premium revenue	[4]	1	1
Global Structured Finance [Member] | Consumer Asset Backed [Member]
Variable Interest Entity [Line Items]
VIE Assets		5,706	6,008
Maximum Exposure to Loss		1,778	1,989
Premiums receivable	[2]	14	16
Unearned premium revenue	[4]	12	14
Loss and loss adjustment expense reserves	[5]	8	12
Global Structured Finance [Member] | Corporate Asset Backed [Member]
Variable Interest Entity [Line Items]
VIE Assets		5,310	6,612
Maximum Exposure to Loss		3,629	4,608
Premiums receivable	[2]	29	41
Insurance loss recoverable	[3]	6	6
Unearned premium revenue	[4]	34	47
Global Public Finance [Member]
Variable Interest Entity [Line Items]
VIE Assets		44,801	49,686
Maximum Exposure to Loss		15,373	16,698
Premiums receivable	[2]	164	179
Unearned premium revenue	[4]	194	211
Total Insurance [Member]
Variable Interest Entity [Line Items]
VIE Assets		74,942	85,626
Maximum Exposure to Loss		31,302	36,656
Investments	[1]	114	119
Premiums receivable	[2]	255	302
Insurance loss recoverable	[3]	432	524
Unearned premium revenue	[4]	283	332
Loss and loss adjustment expense reserves	[5]	391	389
Derivative liabilities	[6]	$ 17	$ 102

[1] Reported within Investments on MBIA's consolidated balance sheets.

[2] Reported within Premiums receivable on MBIA's consolidated balance sheets.

[3] Reported within Insurance loss recoverable on MBIA's consolidated balance sheets.

[4] Reported within Unearned premium revenue on MBIA's consolidated balance sheets.

[5] Reported within Loss and loss adjustment expense reserves on MBIA's consolidated balance sheets.

[6] Reported within Derivative liabilities on MBIA's consolidated balance sheets.

XML

Fair Value Of Financial Instruments (Aggregate Fair Value And Remaining Contractual Principal Balance Outstanding On Fair Value Option) (Detail) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Non Variable Interest Entity [Member]
Schedule Of Fair Value Of Separate Accounts By Major Category Of Investment [Line Items]
Medium-term notes, contractual outstanding principal	$ 223	$ 242
Medium-term notes, fair value	170	197
Medium-term notes, difference	53	45
Variable Interest Entity [Member]
Schedule Of Fair Value Of Separate Accounts By Major Category Of Investment [Line Items]
Loans receivable, contractual outstanding principal	1,705	2,502
Variable interest entity notes, contractual outstanding principal	3,758	3,584
Loans receivable, fair value	1,351	2,142
Variable interest entity notes, fair value	2,460	2,479
Loans receivable, difference	354	360
Variable interest entity notes, difference	1,298	1,105
Residential Mortgage Loans [Member] | Variable Interest Entity [Member]
Schedule Of Fair Value Of Separate Accounts By Major Category Of Investment [Line Items]
Loans receivable, contractual outstanding principal	1,331	1,554
Loans receivable, 90 days or more past due, contractual outstanding principal	194	227
Loans receivable, fair value	1,233	1,377
Loans receivable, 90 days or more past due, fair value	11	54
Loans receivable, difference	98	177
Loans receivable, 90 days or more past due, difference	183	173
Other Loans [Member] | Variable Interest Entity [Member]
Schedule Of Fair Value Of Separate Accounts By Major Category Of Investment [Line Items]
Loans receivable, contractual outstanding principal	107	721
Loans receivable, 90 days or more past due, contractual outstanding principal	73
Loans receivable, fair value	107	711
Loans receivable, difference	0	$ 10
Loans receivable, 90 days or more past due, difference	$ 73

XML

Fair Value Of Financial Instruments (Quantitative Information Regarding The Significant Unobservable Inputs For Certain Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Detail) $ in Millions	Sep. 30, 2015 USD ($) Y	Dec. 31, 2014 USD ($) Y
Other Derivative Liabilities [Member] | Discounted cash flow [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value, liabilities	$ 22	$ 24
Discounted Cash Flows [Member] | Other Derivative Liabilities [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range dollars	0	0
Discounted Cash Flows [Member] | Other Derivative Liabilities [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range dollars	83	83
Discounted Cash Flows [Member] | Other Derivative Liabilities [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range dollars	42	42
Credit Derivatives [Member] | Commercial Mortgage Backed Securities [Member] | BET Model [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value, liabilities	105	224
Credit Derivatives [Member] | Multi Sector C D O [Member] | Direct Price Model [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value, liabilities	5	9
Credit Derivatives [Member] | Other Derivative Liabilities [Member] | BET And Dual Default Valuation Models [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value, liabilities	$ 11	$ 11
Credit Derivatives [Member] | Recovery Rates [Member] | Commercial Mortgage Backed Securities [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	25.00%	25.00%
Credit Derivatives [Member] | Recovery Rates [Member] | Commercial Mortgage Backed Securities [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	90.00%	90.00%
Credit Derivatives [Member] | Recovery Rates [Member] | Commercial Mortgage Backed Securities [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	66.00%	59.00%
Credit Derivatives [Member] | Recovery Rates [Member] | Other Derivative Liabilities [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	42.00%	42.00%
Credit Derivatives [Member] | Recovery Rates [Member] | Other Derivative Liabilities [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	45.00%	45.00%
Credit Derivatives [Member] | Recovery Rates [Member] | Other Derivative Liabilities [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	45.00%	45.00%
Credit Derivatives [Member] | Nonperformance Risk [Member] | Commercial Mortgage Backed Securities [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	19.00%	12.00%
Credit Derivatives [Member] | Nonperformance Risk [Member] | Commercial Mortgage Backed Securities [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	29.00%	29.00%
Credit Derivatives [Member] | Nonperformance Risk [Member] | Commercial Mortgage Backed Securities [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	21.00%	25.00%
Credit Derivatives [Member] | Nonperformance Risk [Member] | Multi Sector C D O [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	48.00%	53.00%
Credit Derivatives [Member] | Nonperformance Risk [Member] | Multi Sector C D O [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	48.00%	53.00%
Credit Derivatives [Member] | Nonperformance Risk [Member] | Multi Sector C D O [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	48.00%	53.00%
Credit Derivatives [Member] | Nonperformance Risk [Member] | Other Derivative Liabilities [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	48.00%	41.00%
Credit Derivatives [Member] | Nonperformance Risk [Member] | Other Derivative Liabilities [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	48.00%	51.00%
Credit Derivatives [Member] | Nonperformance Risk [Member] | Other Derivative Liabilities [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	48.00%	50.00%
Credit Derivatives [Member] | Weighted Average Life [Member] | Commercial Mortgage Backed Securities [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Weighted Average (in years) | Y	1.1	1.3
Credit Derivatives [Member] | Weighted Average Life [Member] | Commercial Mortgage Backed Securities [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Weighted Average (in years) | Y	1.7	3.2
Credit Derivatives [Member] | Weighted Average Life [Member] | Commercial Mortgage Backed Securities [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Weighted Average (in years) | Y	1.4	2.3
Credit Derivatives [Member] | Weighted Average Life [Member] | Other Derivative Liabilities [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Weighted Average (in years) | Y	0.8	0.2
Credit Derivatives [Member] | Weighted Average Life [Member] | Other Derivative Liabilities [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Weighted Average (in years) | Y	7.4	7.9
Credit Derivatives [Member] | Weighted Average Life [Member] | Other Derivative Liabilities [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Weighted Average (in years) | Y	2.1	1.1
Credit Derivatives [Member] | Commercial Mortgage Backed Securities Spreads [Member] | Commercial Mortgage Backed Securities [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	0.00%	0.00%
Credit Derivatives [Member] | Commercial Mortgage Backed Securities Spreads [Member] | Commercial Mortgage Backed Securities [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	67.00%	41.00%
Credit Derivatives [Member] | Commercial Mortgage Backed Securities Spreads [Member] | Commercial Mortgage Backed Securities [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	20.00%	19.00%
Loans Receivable [Member] | Variable Interest Entity Primary Beneficiary [Member] | Quoted market prices adjusted for financial guarantees provided to VIE obligations [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, assets	$ 1,351	$ 1,431
Loans Receivable [Member] | Variable Interest Entity Primary Beneficiary [Member] | Impact Of Financial Guarantee [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	0.00%	0.00%
Loans Receivable [Member] | Variable Interest Entity Primary Beneficiary [Member] | Impact Of Financial Guarantee [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	6.00%	10.00%
Loans Receivable [Member] | Variable Interest Entity Primary Beneficiary [Member] | Impact Of Financial Guarantee [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	2.00%	2.00%
Loan Repurchase Commitments [Member] | Variable Interest Entity Primary Beneficiary [Member] | Discounted cash flow [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, assets	$ 394	$ 379
Variable Interest Entity Notes [Member] | Variable Interest Entity Primary Beneficiary [Member] | Quoted market prices of VIE assets adjusted for financial guarantees provided [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value, liabilities	$ 1,310	$ 735
Variable Interest Entity Notes [Member] | Variable Interest Entity Primary Beneficiary [Member] | Impact Of Financial Guarantee [Member] | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	0.00%	0.00%
Variable Interest Entity Notes [Member] | Variable Interest Entity Primary Beneficiary [Member] | Impact Of Financial Guarantee [Member] | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	44.00%	35.00%
Variable Interest Entity Notes [Member] | Variable Interest Entity Primary Beneficiary [Member] | Impact Of Financial Guarantee [Member] | Weighted Average [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Range percentage	9.00%	16.00%

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Income Taxes (Income Taxes And Related Effective Tax Rates) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Disclosure Income Taxes Income Taxes And Related Effective Tax Rates [Abstract]
Income (loss) before income taxes	$ (55)	$ 148	$ 150	$ 607
Provision (benefit) for income taxes	$ (20)	$ (25)	$ 52	$ 58
Effective tax rate	36.40%	(16.90%)	34.70%	9.60%

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Investments (Narrative) (Detail) $ in Millions	3 Months Ended	12 Months Ended
	Sep. 30, 2015 USD ($) security	Dec. 31, 2014 USD ($) security
Schedule Of Investments [Line Items]
Fair value of securities on deposit with various regulatory authorities	$ 10	$ 10
Fair value of securities pledged as collateral	487	532
Cash and money market securities pledged as collateral under investment agreements	$ 21	$ 26
Weighted average contractual maturity period in years for securities in an unrealized loss position	19 years	13 years
Number of securities in unrealized loss position for a continuous 12 month period | security	66	143
Rate that a security's fair value is below book value	5.00%
Fair Value Below Book Value Greater Than Five Percent [Member]
Schedule Of Investments [Line Items]
Number of securities in unrealized loss position for a continuous 12 month period | security	23	23

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Commitments and Contingencies (Narrative) (Detail)	Sep. 30, 2015 Lawsuits
Commitments and Contingencies [Abstract]
Other material lawsuits pending	0

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Loss And Loss Adjustment Expense Reserves (Schedule Of Insurance Loss Recoverable And Changes In Recoveries On Unpaid Losses) (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($)
Loss And Loss Adjustment Expense Recoveries [Line Items]
Gross Reserve beginning balance, Insurance loss recoverable	$ 533
Gross Reserve beginning balance, Total	680
Collections for Cases with Recoveries	(56)
Accretion of Recoveries	8
Changes in Discount Rates	7
Changes in Assumptions	47
Changes in LAE Recoveries	(1)
Other	(28)	[1]
Gross Reserve ending balance, Insurance loss recoverable	437
Gross Reserve ending balance, Total	657
Insurance Loss Recoverable [Member]
Loss And Loss Adjustment Expense Recoveries [Line Items]
Collections for Cases with Recoveries	(56)
Accretion of Recoveries	6
Changes in Discount Rates	6
Changes in Assumptions	(24)
Changes in LAE Recoveries	0
Other	(28)	[1]
Recoveries On Unpaid Losses [Member]
Loss And Loss Adjustment Expense Recoveries [Line Items]
Gross Reserve beginning balance,Recoveries on unpaid losses	147
Collections for Cases with Recoveries	0
Accretion of Recoveries	2
Changes in Discount Rates	1
Changes in Assumptions	71
Changes in LAE Recoveries	(1)
Other	0	[1]
Gross Reserve ending balance, Recoveries on unpaid losses	$ 220

[1] Primarily changes in amount and timing of collections.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Schedule Of Basic And Diluted Earnings Per Share

		Three Months Ended September 30,				Nine Months Ended September 30,
In millions except share and per share amounts		2015		2014		2015			2014
Basic earnings per share:
Net income (loss)		$	(35)	$	173	$	98	$	549
Less: undistributed earnings allocated to participating securities			-		5		3		15
Net income (loss) available to common shareholders			(35)		168		95		534
Basic weighted average shares (1)			155,239,723		187,104,785		169,610,370		188,428,870
Net income (loss) per basic common share:		$	(0.23)	$	0.90	$	0.56	$	2.83
Diluted earnings per share:
Net income (loss)			(35)		173		98		549
Less: undistributed earnings allocated to participating securities			-		5		3		14
Less: mark-to-market gain (loss) on warrants			-		18		-		32
Net income (loss) available to common shareholders			(35)		150		95		503
Basic weighted average shares (1)			155,239,723		187,104,785		169,610,370		188,428,870
Effect of common stock equivalents:
	Stock options		-		1,029,777		956,016		1,126,134
	Warrants		-		289,756		-		2,061,719
Diluted weighted average shares			155,239,723		188,424,318		170,566,386		191,616,723
Net income (loss) per diluted common share:		$	(0.23)	$	0.80	$	0.55	$	2.62
_________
(1) - Includes 600,826 and 270,142 of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the three months ended September 30, 2015 and 2014, respectively. Includes 619,889 and 315,018 of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the nine months ended September 30, 2015 and 2014, respectively.

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Business Segments (Summary Of Premiums Earned On Financial Guarantees And Insured Derivatives By Geographic Location Of Risk) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting Information [Line Items]
Total premiums earned	$ 90	$ 122	$ 288	$ 308
United States [Member]
Segment Reporting Information [Line Items]
Total premiums earned	71	78	232	216
United Kingdom [Member]
Segment Reporting Information [Line Items]
Total premiums earned	8	9	23	28
Europe Excluding United Kingdom [Member]
Segment Reporting Information [Line Items]
Total premiums earned	2	2	4	6
Internationally Diversified [Member]
Segment Reporting Information [Line Items]
Total premiums earned	1	4	3	7
Central And South America [Member]
Segment Reporting Information [Line Items]
Total premiums earned	7	26	20	42
Asia [Member]
Segment Reporting Information [Line Items]
Total premiums earned	0	1	2	3
Other [Member]
Segment Reporting Information [Line Items]
Total premiums earned	$ 1	$ 2	$ 4	$ 6

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Investments (Distribution By Contractual Maturity Of Available-For-Sale and Held-To-Maturity Investments) (Detail) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Held To Maturity Securities [Abstract]
Total Held-To-Maturity, amortized cost	$ 2,707	$ 2,757
Total Held-To-Maturity, fair value	2,442	$ 2,632
Fixed Maturities [Member]
Available For Sale Securities [Abstract]
Due in one year or less	671
Due after one year through five years	1,442
Due after five years through ten years	923
Due after ten years	1,545
Mortgage-Backed and Asset-Backed	1,561
Total Available-For-Sale, amortized cost	6,142
Due in one year or less	672
Due after one year through five years	1,460
Due after five years through ten years	953
Due after ten years	1,534
Mortgage-Backed and Asset-Backed	1,540
Total Available-For-Sale, fair value	6,159
Fixed Maturities [Member] | Variable Interest Entity Primary Beneficiary [Member]
Held To Maturity Securities [Abstract]
Due in one year or less	0
Due after one year through five years	0
Due after five years through ten years	0
Due after ten years	2,707
Mortgage-Backed and Asset-Backed	0
Total Held-To-Maturity, amortized cost	2,707
Due in one year or less	0
Due after one year through five years	0
Due after five years through ten years	0
Due after ten years	2,442
Mortgage-Backed and Asset-Backed	0
Total Held-To-Maturity, fair value	$ 2,442

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Accumulated Other Comprehensive Income (Changes In The Components Of AOCI) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Beginning balance			$ 21
Other comprehensive income (loss) before reclassification			(40)
Amounts reclassified from AOCI			9
Total other comprehensive income (loss)	$ 26	$ (70)	(31)	$ 72
Ending balance	(10)		(10)
Unrealized gains (losses) on AFS, net [Member]
Beginning balance			34
Other comprehensive income (loss) before reclassification			(27)
Amounts reclassified from AOCI			9
Total other comprehensive income (loss)			(18)
Ending balance	16		16
Foreign currency translation, net [Member]
Beginning balance			(13)
Other comprehensive income (loss) before reclassification			(13)
Amounts reclassified from AOCI			0
Total other comprehensive income (loss)			(13)
Ending balance	$ (26)		$ (26)

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Accumulated Other Comprehensive Income (Details Of The Reclassification From AOCI) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net gains (losses) on financial instruments at fair value and foreign exchange	$ (55)	$ 57	$ 20	$ 63
Income (loss) before income taxes	(55)	148	150	607
Provision (benefit) for income taxes	(20)	(25)	52	58
Net income (loss)	(35)	173	98	549
Amounts reclassified from AOCI [Member]
Net income (loss)	(7)	0	(9)	(18)
Unrealized gains (losses) on AFS, net [Member] | Amounts reclassified from AOCI [Member]
Net gains (losses) on financial instruments at fair value and foreign exchange	(5)	0	(6)	(20)
Other-than-temporary impairments recognized in accumulated other comprehensive income (loss)	(3)	0	(3)	0
Net investment income	(1)	0	(4)	(2)
Income (loss) before income taxes	(9)	0	(13)	(22)
Provision (benefit) for income taxes	(2)	0	(4)	(8)
Net income (loss)	(7)	0	(9)	(14)
Foreign currency translation, net [Member] | Amounts reclassified from AOCI [Member]
Net gains (losses) on financial instruments at fair value and foreign exchange	$ 0	$ 0	$ 0	$ (4)

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Business Segments (Narrative) (Detail) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)
Disclosure Business Segments Summary Of Companys Segment Results [Abstract]
Number of operating segments		3
Extinguishment Of Debt [Line Items]
Net gains (losses) on extinguishment of debt	$ 0	$ (1)	$ 3

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Business Developments and Risks and Uncertainties (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Assets And Liabilities Held For Sale

In millions			December 31, 2014
Assets
	Investments carried at fair value		$	6
	Cash and cash equivalents			15
	Facility			26
	Other assets			4
	Assets of consolidated variable interest entities:
		Cash		40
		Loans receivable at fair value		711
		Total assets held for sale	$	802
Liabilities
	Other liabilities		$	18
	Liabilities of consolidated variable interest entities:
		Variable interest entity notes		431
		Payable for loans purchased		323
		Total liabilities held for sale	$	772

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Fair Value Of Financial Instruments (Fair Value Hierarchy Table Presents The Company's Assets And Liabilities At Fair Value Not Recorded On The Company's Consolidated Balance Sheet) (Detail) - USD ($) $ in Millions		Sep. 30, 2015	Dec. 31, 2014
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Assets held for sale		$ 0	$ 802
Investments held-to-maturity, fair value		2,442	2,632
Value Disclosed At Fair Value Not Recorded At Fair Value [Member] | Fair Value Inputs Level 1 [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Total assets		0	0
Total liabilities		0	0
Value Disclosed At Fair Value Not Recorded At Fair Value [Member] | Fair Value Inputs Level 2 [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Accrued investment income	[1]	42	43
Receivable for investments sold	[1]	38	69
Total assets		80	138
Long-term debt		1,008	1,172
Payable for investments purchased	[2]	19	42
Total liabilities		1,027	1,214
Value Disclosed At Fair Value Not Recorded At Fair Value [Member] | Fair Value Inputs Level 2 [Member] | Facilities [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Assets held for sale			26
Value Disclosed At Fair Value Not Recorded At Fair Value [Member] | Fair Value Inputs Level 3 [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Other investments		3	4
Total assets		2,445	2,636
Investment agreements		638	705
Medium-term notes		574	801
Total liabilities		3,873	4,285
Gross		3,799	4,051
Ceded		107	109
Value Disclosed At Fair Value Not Recorded At Fair Value [Member] | Fair Value Inputs Level 3 [Member] | Variable Interest Entity Primary Beneficiary [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Investments held-to-maturity, fair value		2,442	2,632
Variable interest entity notes		2,661	2,779
Carrying Reported Amount Fair Value Disclosure [Member] | Value Disclosed At Fair Value Not Recorded At Fair Value [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Other investments		3	4
Accrued investment income	[1]	42	43
Receivable for investments sold	[1]	38	69
Total assets		2,790	2,899
Investment agreements		485	547
Medium-term notes		863	1,004
Long-term debt		1,882	1,810
Payable for investments purchased	[2]	19	42
Total liabilities		5,955	6,160
Gross		1,742	1,959
Ceded		58	65
Carrying Reported Amount Fair Value Disclosure [Member] | Value Disclosed At Fair Value Not Recorded At Fair Value [Member] | Facilities [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Assets held for sale			26
Carrying Reported Amount Fair Value Disclosure [Member] | Value Disclosed At Fair Value Not Recorded At Fair Value [Member] | Variable Interest Entity Primary Beneficiary [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Investments held-to-maturity, fair value		2,707	2,757
Variable interest entity notes		2,706	2,757
Fair Value [Member] | Value Disclosed At Fair Value Not Recorded At Fair Value [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Other investments		3	4
Accrued investment income	[1]	42	43
Receivable for investments sold	[1]	38	69
Total assets		2,525	2,774
Investment agreements		638	705
Medium-term notes		574	801
Long-term debt		1,008	1,172
Payable for investments purchased	[2]	19	42
Total liabilities		4,900	5,499
Gross		3,799	4,051
Ceded		107	109
Fair Value [Member] | Value Disclosed At Fair Value Not Recorded At Fair Value [Member] | Facilities [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Assets held for sale			26
Fair Value [Member] | Value Disclosed At Fair Value Not Recorded At Fair Value [Member] | Variable Interest Entity Primary Beneficiary [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Investments held-to-maturity, fair value		2,442	2,632
Variable interest entity notes		$ 2,661	$ 2,779

[1] Reported within "Other assets" on MBIA's consolidated balance sheets.

[2] Reported within "Other liabilities" on MBIA's consolidated balance sheets.

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Loss And Loss Adjustment Expense Reserves (Schedule Of Losses And Loss Adjustment Expenses) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder Benefits And Claims Incurred Net	$ 39	$ 20	$ 79	$ 82
U S Public Finance Insurance [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder Benefits And Claims Incurred Net	(7)	(8)	(5)	(5)
Second-Lien RMBS [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder Benefits And Claims Incurred Net	24	16	52	88
First-Lien RMBS [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder Benefits And Claims Incurred Net	18	12	2	39
Other [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder Benefits And Claims Incurred Net	$ 4	$ 0	$ 30	$ (40)

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Earnings Per Share (Computation Of Basic And Diluted Earnings Per Share) (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Basic earnings per share: [Abstract]
Net income (loss)	$ (35)	$ 173	$ 98	$ 549
Less: Undistributed earnings allocated to participating securities	0	5	3	15
Net income (loss) available to common stockholders	$ (35)	$ 168	$ 95	$ 534
Basic weighted average shares	155,239,723	187,104,785	169,610,370	188,428,870
Net income (loss) per basic common share	$ (0.23)	$ 0.9	$ 0.56	$ 2.83
Diluted earnings per share: [Abstract]
Net income (loss)	$ (35)	$ 173	$ 98	$ 549
Less: Undistributed earnings allocated to participating securities	0	5	3	14
Less: mark-to-market gain (loss) on warrants	0	18	0	32
Net income (loss) available to common stockholders	$ (35)	$ 150	$ 95	$ 503
Basic weighted average shares	155,239,723	187,104,785	169,610,370	188,428,870
Stock options	0	1,029,777	956,016	1,126,134
Warants	0	289,756	0	2,061,719
Diluted weighted average shares	155,239,723	188,424,318	170,566,386	191,616,723
Net income (loss) per diluted common share	$ (0.23)	$ 0.8	$ 0.55	$ 2.62
Unvested Restricted Stock And Units That Receive Nonforfeitable Dividends Or Dividend Equivalents That Have Met Service Condition	600,826	270,142	619,889	315,018

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Recent Accounting Pronouncements (Narrative) (Detail)	9 Months Ended
	Sep. 30, 2015
Disclosure Variable Interest Entities Narrative [Abstract]
Number of variable interest entities deconsolidated	1

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Fair Value Of Financial Instruments (Realized And Unrealized Gains And Losses Included In Earnings Pertaining To Level 3 Assets And Liabilities) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Unrealized gains (losses) on insured derivatives			$ 121	$ 863
Net gains (losses) on financial instruments at fair value and foreign exchange	$ (55)	$ 57	20	63
Net investment losses related to other-than-temporary impairments	(3)	(14)	(10)	(14)
Fair Value Inputs Level 3 [Member] | Total Gains Losses Included In Earnings [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Unrealized gains (losses) on insured derivatives	21	48	121	863
Realized gains and other settlements on insured derivatives	(18)	(24)	(30)	(418)
Net gains (losses) on financial instruments at fair value and foreign exchange	(5)	9	26	(1)
Total revenues	0	47	108	432
Fair Value Inputs Level 3 [Member] | Change In Unrealized Gains Losses For Period Included In Earnings For Assets And Liabilities Still Held [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Unrealized gains (losses) on insured derivatives	21	14	109	(20)
Net gains (losses) on financial instruments at fair value and foreign exchange	(5)	10	29	(3)
Total revenues	12	38	121	(1)
Fair Value Inputs Level 3 [Member] | Variable Interest Entity Primary Beneficiary [Member] | Total Gains Losses Included In Earnings [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange	2	14	(9)	(12)
Fair Value Inputs Level 3 [Member] | Variable Interest Entity Primary Beneficiary [Member] | Change In Unrealized Gains Losses For Period Included In Earnings For Assets And Liabilities Still Held [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange	$ (4)	$ 14	$ (17)	$ 22

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Derivative Instruments (Total Fair Value Of Company's Derivative Assets And Liabilities By Instrument And Balance Sheet Location, Before Counterparty Netting) (Detail) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Millions		Sep. 30, 2015	Dec. 31, 2014
Derivative [Line Items]
Derivative notional amount		$ 10,027	$ 15,839
Derivative Liabilities [Member]
Derivative [Line Items]
Derivative Liabilities, Not designated, Fair Value	[1]	(473)	(537)
Derivative Assets [Member]
Derivative [Line Items]
Derivative Assets, Not designated, Fair Value	[1]	16	91
Interest Rate Swap [Member]
Derivative [Line Items]
Derivative notional amount		1,155	1,450
Interest Rate Swap [Member] | Derivative Liabilities [Member]
Derivative [Line Items]
Derivative Liabilities, Not designated, Fair Value	[1]	(255)	(248)
Interest Rate Swap [Member] | Other Assets [Member]
Derivative [Line Items]
Derivative Assets, Not designated, Fair Value	[1]	4	83
Credit Default Swap [Member]
Derivative [Line Items]
Derivative notional amount		3,318	9,481
Credit Default Swap [Member] | Derivative Liabilities [Member]
Derivative [Line Items]
Derivative Liabilities, Not designated, Fair Value	[1]	(121)	(244)
Insured Swaps [Member]
Derivative [Line Items]
Derivative notional amount		3,828	4,044
Insured Swaps [Member] | Derivative Liabilities [Member]
Derivative [Line Items]
Derivative Liabilities, Not designated, Fair Value	[1]	(3)	(2)
Interest Rate Swaps V I E [Member]
Derivative [Line Items]
Derivative notional amount		903
Interest Rate Swaps V I E [Member] | Derivative Liabilities V I E [Member]
Derivative [Line Items]
Derivative Liabilities, Not designated, Fair Value		(57)
Interest Rate Swaps V I E [Member] | Derivative Assets V I E [Member]
Derivative [Line Items]
Derivative Assets, Not designated, Fair Value		0
Interest Rate Swaps Embedded [Member]
Derivative [Line Items]
Derivative notional amount		406	437
Interest Rate Swaps Embedded [Member] | Medium Term Notes [Member]
Derivative [Line Items]
Derivative Assets, Not designated, Fair Value	[1]	6	8
Derivative Liabilities, Not designated, Fair Value	[1]	(15)	(19)
Currency Swaps Vie [Member]
Derivative [Line Items]
Derivative notional amount		81	91
Currency Swaps Vie [Member] | Derivative Assets V I E [Member]
Derivative [Line Items]
Derivative Assets, Not designated, Fair Value		6
All Other [Member]
Derivative [Line Items]
Derivative notional amount		83	83
All Other [Member] | Derivative Liabilities [Member]
Derivative [Line Items]
Derivative Liabilities, Not designated, Fair Value	[1]	(22)	(24)
All Other V I E [Member]
Derivative [Line Items]
Derivative notional amount		241	241
All Other Embedded [Member]
Derivative [Line Items]
Derivative notional amount		$ 12	$ 12

[1] In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company's embedded derivative instruments is determined by the location of the related host contract

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Investments (Average Credit Ratings For Securities Rated Below Investment Grade Without The Effect Of Financial Guarantees) (Detail) $ in Millions	Sep. 30, 2015 USD ($)
Asset-backed [Member]
Schedule Of Investments [Line Items]
Fair Value Of Securities Rated Below Investment Grade Without Giving Effect To Benefit Of Guarantees Provided By Financial Guarantors	$ 60
Percentage Of Securities Rated Below Investment Grade Without Giving Effect To Benefit Of Guarantees Provided By Financial Guarantors	65.00%
Mortgage-backed [Member]
Schedule Of Investments [Line Items]
Fair Value Of Securities Rated Below Investment Grade Without Giving Effect To Benefit Of Guarantees Provided By Financial Guarantors	$ 19
Percentage Of Securities Rated Below Investment Grade Without Giving Effect To Benefit Of Guarantees Provided By Financial Guarantors	100.00%
Corporate Obligations [Member]
Schedule Of Investments [Line Items]
Fair Value Of Securities Rated Below Investment Grade Without Giving Effect To Benefit Of Guarantees Provided By Financial Guarantors	$ 0
Percentage Of Securities Rated Below Investment Grade Without Giving Effect To Benefit Of Guarantees Provided By Financial Guarantors	0.00%

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Fair Value Of Financial Instruments (Narrative) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Percentage of insured credit derivatives, value under Direct Price Model and Dual-Default Model	12.00%		12.00%
Net insured derivative liability	$ 121		$ 121		$ 244
Impact of including the nonperformance risk in valuation of pre-tax net insured derivative liability	$ 42		$ 42		$ 92
Percentage of level 3 assets at fair value in total assets measured at fair value value	20.00%		20.00%		20.00%
Percentage of level 3 liabilities at fair value in total liabilities measured at fair value	53.00%		53.00%		35.00%
Transfers into Level 3	$ 3	$ 55	$ 34	$ 238
Transfers out of Level 3	77	1	122	83
Transfers into Level 2	77	1	122	83
Transfers out of Level 2	3	55	$ 34	$ 238
Transfers into or out of Level 1	$ 0	$ 0
B E T Valuation Model [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Percentage of insured credit derivatives, fair value using the BET model	88.00%		88.00%

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Consolidated Statements Of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Premiums, fees and reimbursements received	$ 66	$ 122
Investment income received	263	317
Errors and omissions insurance recoveries received	0	30
Insured derivative commutations and losses paid	(42)	(401)
Financial guarantee losses and loss adjustment expenses paid	(68)	(181)
Proceeds from recoveries and reinsurance	61	93
Operating and employee related expenses paid	(99)	(198)
Interest paid, net of interest converted to principal	(130)	(136)
Income taxes (paid) received	(9)	4
Net cash provided (used) by operating activities	42	(350)
Cash flows from investing activities:
Purchases of available-for-sale investments	(1,497)	(1,220)
Sales of available-for-sale investments	630	594
Paydowns and maturities of available-for-sale investments	463	379
Purchases of investments at fair value	(324)	(457)
Sales, paydowns and maturities of investments at fair value	447	550
Sales, paydowns and maturities (purchases) of short-term investments, net	582	318
Sales, paydowns and maturities of held-to-maturity investments	50	29
Purchases of loans at fair value	0	(195)
Paydowns and maturities of loans at fair value	172	172
Consolidation of variable interest entities including cash acquired	7	221
Deconsolidation of variable interest entities	0	(1)
(Payments) proceeds for derivative settlements	33	(23)
Collateral (to) from swap counterparty	(64)	99
Capital expenditures	(3)	(9)
Other investing	47	0
Net cash provided (used) by investing activities	543	457
Cash flows from financing activities:
Proceeds from investment agreements	21	23
Principal paydowns of investment agreements	(88)	(72)
Principal paydowns of medium-term notes	(116)	(166)
Principal paydowns of variable interest entity notes	(392)	(516)
Principal paydowns of long-term debt	(11)	0
Purchases of treasury stock	(300)	(23)
Net cash provided (used) by financing activities	(886)	(754)
Effect of exchange rate changes on cash and cash equivalents	11	(5)
Net increase (decrease) in cash and cash equivalents	(290)	(652)
Cash and cash equivalents - beginning of period	782	1,258
Cash and cash equivalents - end of period	492	606
Reconciliation of net income (loss) to net cash provided (used) by operating activities: [Abstract]
Net income (loss)	98	549
Change in: [Abstract]
Premiums receivable	63	92
Deferred acquisition costs	35	30
Unearned premium revenue	(274)	(303)
Loss and loss adjustment expense reserves	(24)	(124)
Insurance loss recoverable	96	119
Accrued interest payable	78	79
Realized (gains) losses and other settlements on insured derivatives	0	30
Unrealized (gains) losses on insured derivatives	(121)	(863)
Net (gains) losses on financial instruments at fair value and foreign exchange	(29)	(97)
Other net realized (gains) losses	(18)	(28)
Deferred income tax provision (benefit)	50	49
Interest on variable interest entities, net	51	56
Other operating	37	61
Total adjustments to net income (loss)	(56)	(899)
Net cash provided (used) by operating activities	$ 42	$ (350)

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Investments (Securities Held In Unrealized Loss Position And Insured By Financial Guarantor) (Detail) - USD ($) $ in Millions		Sep. 30, 2015	Dec. 31, 2014
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value		$ 2,019	$ 2,071
Wrapped Securities [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value		192
Gross unrealized losses		(33)
Loss and loss adjustment expense reserves	[1]	34
Asset-backed [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value		307
Gross unrealized losses		(30)
Asset-backed [Member] | Wrapped Securities [Member] | Mbia Corp And National [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value	[2]	93
Gross unrealized losses	[2]	(28)
Loss and loss adjustment expense reserves	[1],[2]	20
Mortgage-backed [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value		495
Gross unrealized losses		(10)
Mortgage-backed [Member] | Wrapped Securities [Member] | Mbia Corp And National [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value	[2]	19
Gross unrealized losses	[2]	(1)
Loss and loss adjustment expense reserves	[1],[2]	14
Corporate Obligations [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value		610
Gross unrealized losses		(104)
Corporate Obligations [Member] | Wrapped Securities [Member] | Mbia Corp And National [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value	[2]	0
Gross unrealized losses	[2]	0
Loss and loss adjustment expense reserves	[1],[2]	0
All Other Securities [Member] | Wrapped Securities [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value		80
Gross unrealized losses		(4)
Loss and loss adjustment expense reserves	[1]	0
All Other Securities [Member] | Wrapped Securities [Member] | Mbia Corp And National [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value	[2]	79
Gross unrealized losses	[2]	(4)
Loss and loss adjustment expense reserves	[1],[2]	0
All Other Securities [Member] | Wrapped Securities [Member] | Other Insurers [Member]
Schedule Of Investments [Line Items]
Total Available-For-Sale, Fair Value		1
Gross unrealized losses		0
Loss and loss adjustment expense reserves	[1]	$ 0

[1] Insurance loss reserve estimates are based on the proportion of par value owned to the total amount of par value insured.

[2] Includes investments insured by MBIA Corp. and National.

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Loss And Loss Adjustment Expense Reserves (Schedule Of Financial Guarantees And Related Claim Liability) (Detail) $ in Millions		3 Months Ended	12 Months Ended
		Sep. 30, 2015 USD ($) issue policy	Dec. 31, 2014 USD ($) issue policy
Loss And Loss Adjustment Expense Reserves [Line Items]
Number of policies | policy		417	315
Number of issues | issue	[1]	143	147
Remaining weighted average contract period (in years)		7 years 7 months 6 days	7 years 8 months 12 days
Principal	[2]	$ 12,741	$ 11,263
Interest	[2]	6,958	4,620
Total	[2]	19,699	15,883
Gross claim liability		876	850
Less: Gross potential recoveries		755	860
Discount, net	[3]	79	14
Net claim liability (recoverable)		42	(24)
Unearned premium revenue		$ 157	$ 167
Caution List Low [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Number of policies | policy		156	38
Number of issues | issue	[1]	15	18
Remaining weighted average contract period (in years)		7 years	7 years 2 months 12 days
Principal	[2]	$ 4,566	$ 1,757
Interest	[2]	3,451	696
Total	[2]	8,017	2,453
Gross claim liability		0	0
Less: Gross potential recoveries		0	0
Discount, net	[3]	0	0
Net claim liability (recoverable)		0	0
Unearned premium revenue		$ 69	$ 63
Caution List Medium [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Number of policies | policy		19	98
Number of issues | issue	[1]	6	7
Remaining weighted average contract period (in years)		8 years 2 months 12 days	12 years
Principal	[2]	$ 250	$ 1,372
Interest	[2]	113	819
Total	[2]	363	2,191
Gross claim liability		0	0
Less: Gross potential recoveries		0	0
Discount, net	[3]	0	0
Net claim liability (recoverable)		0	0
Unearned premium revenue		$ 2	$ 19
Caution List High [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Number of policies | policy		76	4
Number of issues | issue	[1]	6	3
Remaining weighted average contract period (in years)		14 years 6 months	10 years 1 month 6 days
Principal	[2]	$ 1,213	$ 133
Interest	[2]	847	68
Total	[2]	2,060	201
Gross claim liability		0	0
Less: Gross potential recoveries		0	0
Discount, net	[3]	0	0
Net claim liability (recoverable)		0	0
Unearned premium revenue		$ 26	$ 5
Classified List [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Number of policies | policy		166	175
Number of issues | issue	[1]	116	119
Remaining weighted average contract period (in years)		6 years 9 months 18 days	7 years
Principal	[2]	$ 6,712	$ 8,001
Interest	[2]	2,547	3,037
Total	[2]	9,259	11,038
Gross claim liability		876	850
Less: Gross potential recoveries		755	860
Discount, net	[3]	79	14
Net claim liability (recoverable)		42	(24)
Unearned premium revenue		$ 60	$ 80

[1] An issue represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.

[2] Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.

[3] Represents discount related to Gross Claim Liability and Gross Potential Recoveries.

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Investments (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Amortized Cost And Fair Value Of Available-For-Sale And Held-To-Maturity Investment Portfolios

				September 30, 2015
						Gross		Gross				Other-Than-
				Amortized		Unrealized		Unrealized		Fair		Temporary
In millions				Cost		Gains		Losses		Value		Impairments(1)
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency			$	818	$	39	$	(1)	$	856	$	-
	State and municipal bonds				1,779		83		(11)		1,851		-
	Foreign governments				212		3		(2)		213		-
	Corporate obligations				1,772		31		(104)		1,699		(88)
	Mortgage-backed securities:
		Residential mortgage-backed agency			1,034		14		(5)		1,043		-
		Residential mortgage-backed non-agency			58		3		(5)		56		(4)
		Commercial mortgage-backed			16		-		-		16		-
	Asset-backed securities:
		Collateralized debt obligations			82		-		(20)		62		-
		Other asset-backed			371		2		(10)		363		-
			Total fixed-maturity investments		6,142		175		(158)		6,159		(92)
Money market securities					111		-		-		111		-
Perpetual debt and equity securities					12		1		-		13		-
Total AFS investments				$	6,265	$	176	$	(158)	$	6,283	$	(92)
HTM Investments
Assets of consolidated VIEs:
	Corporate obligations			$	2,707	$	12	$	(277)	$	2,442	$	-
Total HTM investments				$	2,707	$	12	$	(277)	$	2,442	$	-
_______________
(1) - Represents unrealized gains or losses on OTTI securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI.

				December 31, 2014
						Gross		Gross				Other-Than-
				Amortized		Unrealized		Unrealized		Fair		Temporary
In millions				Cost		Gains		Losses		Value		Impairments(1)
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency			$	631	$	39	$	(3)	$	667	$	-
	State and municipal bonds				1,644		94		(8)		1,730		-
	Foreign governments				283		7		-		290		-
	Corporate obligations				1,984		44		(92)		1,936		(86)
	Mortgage-backed securities:
		Residential mortgage-backed agency			1,116		17		(7)		1,126		-
		Residential mortgage-backed non-agency			54		3		(4)		53		(4)
		Commercial mortgage-backed			19		1		-		20		-
	Asset-backed securities:
		Collateralized debt obligations			113		-		(21)		92		-
		Other asset-backed			231		3		(12)		222		-
			Total fixed-maturity investments		6,075		208		(147)		6,136		(90)
Money market securities					422		-		-		422		-
Perpetual debt and equity securities					12		1		-		13		-
Total AFS investments				$	6,509	$	209	$	(147)	$	6,571	$	(90)
HTM Investments
Assets of consolidated VIEs:
	Corporate obligations			$	2,757	$	77	$	(202)	$	2,632	$	-
Total HTM investments				$	2,757	$	77	$	(202)	$	2,632	$	-
_______________
(1) - Represents unrealized gains or losses on OTTI securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI.

Distribution By Contractual Maturity Of Available-For-Sale and Held-To-Maturity Investments

	AFS Securities				HTM Securities
					Consolidated VIEs
	Amortized				Amortized
In millions	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	671	$	672	$	-	$	-
Due after one year through five years		1,442		1,460		-		-
Due after five years through ten years		923		953		-		-
Due after ten years		1,545		1,534		2,707		2,442
Mortgage-backed and asset-backed		1,561		1,540		-		-
Total fixed-maturity investments	$	6,142	$	6,159	$	2,707	$	2,442

Gross Unrealized Losses Related To Available-For-Sale And Held-To-Maturity Investments

				September 30, 2015
				Less than 12 Months				12 Months or Longer				Total
				Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
In millions				Value		Losses		Value		Losses		Value		Losses
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency			$	136	$	(1)	$	50	$	-	$	186	$	(1)
	State and municipal bonds				351		(7)		42		(4)		393		(11)
	Foreign governments				21		(1)		3		(1)		24		(2)
	Corporate obligations				539		(13)		71		(91)		610		(104)
	Mortgage-backed securities:
		Residential mortgage-backed agency			264		(1)		181		(4)		445		(5)
		Residential mortgage-backed non-agency			24		(1)		18		(4)		42		(5)
		Commercial mortgage-backed			7		-		1		-		8		-
	Asset-backed securities:
		Collateralized debt obligations			-		-		61		(20)		61		(20)
		Other asset-backed			203		(1)		43		(9)		246		(10)
			Total fixed-maturity investments		1,545		(25)		470		(133)		2,015		(158)
Perpetual debt and equity securities					2		-		2		-		4		-
Total AFS investments				$	1,547	$	(25)	$	472	$	(133)	$	2,019	$	(158)
HTM Investments
Assets of consolidated VIEs:
	Corporate obligations			$	1,096	$	(23)	$	321	$	(254)	$	1,417	$	(277)
Total HTM investments				$	1,096	$	(23)	$	321	$	(254)	$	1,417	$	(277)

				December 31, 2014
				Less than 12 Months				12 Months or Longer				Total
				Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
In millions				Value		Losses		Value		Losses		Value		Losses
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency			$	197	$	-	$	175	$	(3)	$	372	$	(3)
	State and municipal bonds				60		(1)		257		(7)		317		(8)
	Foreign governments				20		-		-		-		20		-
	Corporate obligations				468		(1)		251		(91)		719		(92)
	Mortgage-backed securities:
		Residential mortgage-backed agency			16		-		387		(7)		403		(7)
		Residential mortgage-backed non-agency			10		-		19		(4)		29		(4)
		Commercial mortgage-backed			4		-		6		-		10		-
	Asset-backed securities:
		Collateralized debt obligations			1		-		81		(21)		82		(21)
		Other asset-backed			69		-		44		(12)		113		(12)
			Total fixed-maturity investments		845		(2)		1,220		(145)		2,065		(147)
Perpetual debt and equity securities					6		-		-		-		6		-
Total AFS investments				$	851	$	(2)	$	1,220	$	(145)	$	2,071	$	(147)
HTM Investments
Assets of consolidated VIEs:
	Corporate obligations			$	-	$	-	$	373	$	(202)	$	373	$	(202)
Total HTM investments				$	-	$	-	$	373	$	(202)	$	373	$	(202)

Distribution Of Securities By Percentage Of Fair Value Below Book Value By More Than 5%

	AFS Securities					HTM Securities
Percentage of Fair Value	Number of	Book Value		Fair Value		Number of	Book Value		Fair Value
Below Book Value	Securities	(in millions)		(in millions)		Securities	(in millions)		(in millions)
> 5% to 15%	7	$	13	$	13	-	$	-	$	-
> 15% to 25%	8		82		65	-		-		-
> 25% to 50%	5		5		3	1		575		321
> 50%	2		122		17	-		-		-
Total	22	$	222	$	98	1	$	575	$	321

Fair Values And Gross Unrealized Losses By Credit Rating Category Of ABS, MBS and Corporate Obligations

																		Below
In millions		Aaa				Aa				A				Baa				Investment Grade				Not Rated				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Asset Type		Value		Loss		Value		Loss		Value		Loss		Value		Loss		Value		Loss		Value		Loss		Value		Loss
ABS		$	153	$	(1)	$	88	$	(1)	$	1	$	-	$	2	$	-	$	62	$	(28)	$	1	$	-	$	307	$	(30)
MBS			446		(4)		2		-		3		-		5		-		26		(2)		13		(4)		495		(10)
Corporate obligations			78		(1)		179		(3)		260		(4)		71		(6)		8		-		14		(90)		610		(104)
	Total	$	677	$	(6)	$	269	$	(4)	$	264	$	(4)	$	78	$	(6)	$	96	$	(30)	$	28	$	(94)	$	1,412	$	(144)

Average Credit Ratings and Fair Value and Percentage Of Guaranteed ABS MBS and Corporate Obligations Below Investment Grade

			Insured Securities Rated Below
			Investment Grade without the
			Effect of Guarantee
	Average Credit Rating with the	Average Credit Rating without the	(in millions)
Asset Type	Effect of Guarantee	Effect of Guarantee	Fair Value		Percentage
ABS	Below Investment Grade	Below Investment Grade	$	60	65	%
MBS	Below Investment Grade	Below Investment Grade	$	19	100	%

Securities Held In Unrealized Loss Position And Insured By Financial Guarantor and The Related Insurance Loss Reserve On Company Insured Investments

					Unrealized		Insurance Loss
In millions			Fair Value		Loss		Reserve (2)
Asset-backed:
	MBIA(1)		$	93	$	(28)	$	20
Mortgage-backed:
	MBIA(1)			19		(1)		14
Other:
	MBIA(1)			79		(4)		-
	Other			1		-		-
		Total other		80		(4)		-
Total			$	192	$	(33)	$	34
_______________
(1) - Includes investments insured by MBIA Corp. and National.
(2) - Insurance loss reserve estimates are based on the proportion of par value owned to the total amount of par value insured.

Credit Losses Recognized In Earnings Related To OTTI Losses Recognized In Accumulated Other Comprehensive Income (Loss)

In millions		Three Months Ended September 30,				Nine Months Ended September 30,
Credit Losses Recognized in Earnings Related to Other-Than-Temporary Impairments		2015			2014	2015			2014
Beginning balance		$	22	$	-	$	16	$	175
Additions for credit loss impairments recognized in the current period on securities not
	previously impaired		-		14		-		14
Additions for credit loss impairments recognized in the current period on securities
	previously impaired		3		-		9		-
Reductions for credit loss impairments previously recognized on securities sold during
	the period		-		-		-		(174)
Reductions for increases in cash flows expected to be collected over the remaining
	life of the security		-		-		-		(1)
Ending balance		$	25	$	14	$	25	$	14

Gross Realized Gains and Losses From Sales Of Available-For-Sale Securities

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Proceeds from sales	$	251	$	131	$	630	$	594
Gross realized gains	$	6	$	4	$	14	$	61
Gross realized losses	$	(2)	$	-	$	(11)	$	(13)

XML

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Quantitative Information Regarding The Significant Unobservable Inputs For Certain Assets And Liabilities Measured At Fair Value On A Recurring Basis

		Fair Value
		as of				Range
		September 30,				(Weighted
In millions		2015		Valuation Techniques	Unobservable Input	Average)
Assets of consolidated VIEs:
	Loans receivable at fair value	$	1,351	Market prices adjusted for financial	Impact of financial guarantee	0% - 6% (2%)
				guarantees provided to VIE obligations
	Loan repurchase commitments		394	Discounted cash flow	Recovery rates(1)
					Breach rates(1)
Liabilities of consolidated VIEs:
	Variable interest entity notes		1,310	Market prices of VIE assets	Impact of financial guarantee	0% - 44% (9%)
				adjusted for financial guarantees provided
Credit derivative liabilities, net:
	CMBS		105	BET Model	Recovery rates	25% - 90% (66%)
					Nonperformance risk	19% - 29% (21%)
					Weighted average life (in years)	1.1 - 1.7 (1.4)
					CMBS spreads	0% - 67% (20%)
	Multi-sector CDO		5	Direct Price Model	Nonperformance risk	48% - 48% (48%)
	Other		11	BET Model and Dual Default	Recovery rates	42% - 45% (45%)
					Nonperformance risk	48% - 48% (48%)
					Weighted average life (in years)	0.8 - 7.4 (2.1)
Other derivative liabilities			22	Discounted cash flow	Cash flows	$0 - $83 ($42)(2)
____________
(1) - Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty.
(2) - Midpoint of cash flows are used for the weighted average.

		Fair Value
		as of				Range
		December 31,				(Weighted
In millions		2014		Valuation Techniques	Unobservable Input	Average)
Assets of consolidated VIEs:
	Loans receivable at fair value	$	1,431	Market prices adjusted for financial	Impact of financial guarantee	0% - 10% (2%)
				guarantees provided to VIE obligations
	Loan repurchase commitments		379	Discounted cash flow	Recovery rates(1)
					Breach rates(1)
Liabilities of consolidated VIEs:
	Variable interest entity notes		735	Market prices of VIE assets	Impact of financial guarantee	0% - 35% (16%)
				adjusted for financial guarantees provided
Credit derivative liabilities, net:
	CMBS		224	BET Model	Recovery rates	25% - 90% (59%)
					Nonperformance risk	12% - 29% (25%)
					Weighted average life (in years)	1.3 - 3.2 (2.3)
					CMBS spreads	0% - 41% (19%)
	Multi-sector CDO		9	Direct Price Model	Nonperformance risk	53% - 53% (53%)
	Other		11	BET Model and Dual Default	Recovery rates	42% - 45% (45%)
					Nonperformance risk	41% - 51% (50%)
					Weighted average life (in years)	0.2 - 7.9 (1.1)
Other derivative liabilities			24	Discounted cash flow	Cash flows	$0 - $83 ($42)(2)
	____________
	(1) - Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty.
	(2) - Midpoint of cash flows are used for the weighted average.

Company's Assets And Liabilities Measured At Fair Value On Recurring Basis

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		September 30,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2015
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency			$	744	$	112	$	-		$	-	$	856
	State and municipal bonds				-		1,804		47	(1)		-		1,851
	Foreign governments				141		67		5	(1)		-		213
	Corporate obligations				-		1,717		8	(1)		-		1,725
	Mortgage-backed securities:
		Residential mortgage-backed agency			-		1,043		-			-		1,043
		Residential mortgage-backed non-agency			-		56		-			-		56
		Commercial mortgage-backed			-		16		-			-		16
	Asset-backed securities:
		Collateralized debt obligations			-		3		61	(1)		-		64
		Other asset-backed			-		310		57	(1)		-		367
			Total fixed-maturity investments		885		5,128		178			-		6,191
Money market securities					111		-		-			-		111
Perpetual debt and equity securities					17		192		-			-		209
Cash and cash equivalents					462		-		-			-		462
Derivative assets:
	Non-insured derivative assets:
		Interest rate derivatives			-		3		-			(1)		2
				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		September 30,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2015
Assets of consolidated VIEs:
	Corporate obligations				-		47		11	(1)		-		58
	Mortgage-backed securities:
		Residential mortgage-backed non-agency			-		183		-			-		183
		Commercial mortgage-backed			-		699		-			-		699
	Asset-backed securities:
		Collateralized debt obligations			-		16		-			-		16
		Other asset-backed			-		20		9	(1)		-		29
	Cash				30		-		-			-		30
	Loans receivable at fair value:
		Residential loans receivable			-		-		1,244			-		1,244
		Other loans receivable			-		-		107			-		107
	Loan repurchase commitments				-		-		394			-		394
	Derivative assets:
		Currency derivatives			-		-		6	(1)		-		6
Total assets				$	1,505	$	6,288	$	1,949		$	(1)	$	9,741
Liabilities:
Medium-term notes				$	-	$	-	$	170	(1)	$	-	$	170
Derivative liabilities:
	Insured derivatives:
		Credit derivatives			-		3		121			-		124
	Non-insured derivatives:
		Interest rate derivatives			-		255		-			(62)		193
		Other			-		-		22			-		22
Other liabilities:
	Warrants				-		17		-			-		17
	Securities sold, not yet purchased				18		-		-			-		18
Liabilities of consolidated VIEs:
	Variable interest entity notes				-		1,150		1,310			-		2,460
	Derivative liabilities:
		Interest rate derivatives			-		57		-			-		57
Total liabilities				$	18	$	1,482	$	1,623		$	(62)	$	3,061
____________
(1) - Unobservable inputs are either not developed by the Company or do not significantly impact the overall fair values of the aggregate financial assets and liabilities.

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		December 31,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2014
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency			$	573	$	118	$	-		$	-	$	691
	State and municipal bonds				-		1,724		8	(1)		-		1,732
	Foreign governments				221		63		6	(1)		-		290
	Corporate obligations				-		2,048		10	(1)		-		2,058
	Mortgage-backed securities:
		Residential mortgage-backed agency			-		1,162		-			-		1,162
		Residential mortgage-backed non-agency			-		56		-			-		56
		Commercial mortgage-backed			-		20		2	(1)		-		22
	Asset-backed securities:
		Collateralized debt obligations			-		6		87	(1)		-		93
		Other asset-backed			-		156		85	(1)		-		241
			Total fixed-maturity investments		794		5,353		198			-		6,345
Money market securities					428		-		-			-		428
Perpetual debt and equity securities					22		31		-			-		53
Cash and cash equivalents					729		-		-			-		729
Derivative assets:
	Non-insured derivative assets:
		Interest rate derivatives			-		83		-			(81)		2
Assets held for sale:
	Equity securities				6		-		-			-		6
	Loans receivable at fair value				-		711		-			-		711
	Cash and cash equivalents				55		-		-			-		55
				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		December 31,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2014
Assets of consolidated VIEs:
	Corporate obligations				-		10		55	(1)		-		65
	Mortgage-backed securities:
		Residential mortgage-backed non-agency			-		194		3	(1)		-		197
		Commercial mortgage-backed			-		86		-			-		86
	Asset-backed securities:
		Collateralized debt obligations			-		7		5	(1)		-		12
		Other asset-backed			-		35		26	(1)		-		61
	Cash				53		-		-			-		53
	Loans receivable at fair value:
		Residential loans receivable			-		-		1,431			-		1,431
	Loan repurchase commitments				-		-		379			-		379
Total assets				$	2,087	$	6,510	$	2,097		$	(81)	$	10,613
Liabilities:
Medium-term notes				$	-	$	-	$	197	(1)	$	-	$	197
Derivative liabilities:
	Insured derivatives:
		Credit derivatives			-		2		244			-		246
	Non-insured derivatives:
		Interest rate derivatives			-		248		-			(81)		167
		Other			-		-		24			-		24
Liabilities held for sale:
	Variable interest entity notes				-		431		-			-		431
	Payable for loans purchased				-		323		-			-		323
Other liabilities:
	Warrants				-		28		-			-		28
Liabilities of consolidated VIEs:
	Variable interest entity notes				-		1,312		735			-		2,047
Total liabilities				$	-	$	2,344	$	1,200		$	(81)	$	3,463
____________
(1) - Unobservable inputs are either not developed by the Company or do not significantly impact the overall fair values of the aggregate financial assets and liabilities.

Fair Value Hierarchy Table Presents The Company's Assets And Liabilities Not Recorded At Fair Value On The Company's Consolidated Balance Sheet

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in		Significant		Significant		Fair Value		Carry Value
		Active Markets for		Other Observable		Unobservable		Balance as of		Balance as of
		Identical Assets		Inputs		Inputs		September 30,		September 30,
In millions		(Level 1)		(Level 2)		(Level 3)		2015		2015
Assets:
	Other investments	$	-	$	-	$	3	$	3	$	3
	Accrued investment income(1)		-		42		-		42		42
	Receivable for investments sold(1)		-		38		-		38		38
Assets of consolidated VIEs:
	Investments held-to-maturity		-		-		2,442		2,442		2,707
Total assets		$	-	$	80	$	2,445	$	2,525	$	2,790
Liabilities:
	Long-term debt	$	-	$	1,008	$	-	$	1,008	$	1,882
	Medium-term notes		-		-		574		574		863
	Investment agreements		-		-		638		638		485
	Payable for investments purchased(2)		-		19		-		19		19
Liabilities of consolidated VIEs:
	Variable interest entity notes		-		-		2,661		2,661		2,706
Total liabilities		$	-	$	1,027	$	3,873	$	4,900	$	5,955
Financial Guarantees:
	Gross	$	-	$	-	$	3,799	$	3,799	$	1,742
	Ceded		-		-		107		107		58
__________
(1) - Reported within "Other assets" on MBIA's consolidated balance sheets.
(2) - Reported within "Other liabilities" on MBIA's consolidated balance sheets.

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in		Significant		Significant		Fair Value		Carry Value
		Active Markets for		Other Observable		Unobservable		Balance as of		Balance as of
		Identical Assets		Inputs		Inputs		December 31,		December 31,
In millions		(Level 1)		(Level 2)		(Level 3)		2014		2014
Assets:
	Other investments	$	-	$	-	$	4	$	4	$	4
	Accrued investment income(1)		-		43		-		43		43
	Receivable for investments sold(1)		-		69		-		69		69
Assets held for sale
	Facility		-		26		-		26		26
Assets of consolidated VIEs:
	Investments held-to-maturity		-		-		2,632		2,632		2,757
Total assets		$	-	$	138	$	2,636	$	2,774	$	2,899
Liabilities:
	Long-term debt	$	-	$	1,172	$	-	$	1,172	$	1,810
	Medium-term notes		-		-		801		801		1,004
	Investment agreements		-		-		705		705		547
	Payable for investments purchased(2)		-		42		-		42		42
Liabilities of consolidated VIEs:
	Variable interest entity notes		-		-		2,779		2,779		2,757
Total liabilities		$	-	$	1,214	$	4,285	$	5,499	$	6,160
Financial Guarantees:
	Gross	$	-	$	-	$	4,051	$	4,051	$	1,959
	Ceded		-		-		109		109		65
__________
(1) - Reported within "Other assets" on MBIA's consolidated balance sheets.
(2) - Reported within "Other liabilities" on MBIA's consolidated balance sheets.

Changes In Level 3 Assets Measured At Fair Value On A Recurring Basis

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2015
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings
					Gains /		Unrealized		Foreign																for Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Period		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2015
Assets:
Foreign governments	$	5	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	5	$	-
Corporate obligations		8		-		-		-		-		-		-		-		-		-		-		8		-
Commercial
mortgage-backed		1		-		-		-		-		-		-		-		-		-		(1)		-		-
Collateralized debt
obligations		67		-		-		1		-		-		-		(4)		-		-		(3)		61		-
Other asset-backed		83		-		-		-		-		-		-		(2)		-		-		(24)		57		-
State and municipal
bonds		5		-		-		-		-		45		-		(3)		-		-		-		47		-
Assets of
consolidated VIEs:
Corporate obligations		35		-		1		-		-		-		-		-		-		3		(28)		11		-
Residential mortgage-
backed non-agency		5		-		-		-		-		-		-		-		-		-		(5)		-		-
Collateralized debt
obligations		4		-		5		-		-		-		-		-		-		-		(9)		-		-
Other asset-backed		17		-		-		-		-		-		-		(1)		-		-		(7)		9		-
Loans receivable-
residential		1,318		-		(12)		-		-		-		-		(62)		-		-		-		1,244		(12)
Loans receivable- other		108		-		(1)		-		-		-		-		-		-		-		-		107		(1)
Loan repurchase
commitments		388		-		6		-		-		-		-		-		-		-		-		394		6
Currency
derivatives, net		2		-		1		-		3		-		-		-		-		-		-		6		4
Total assets	$	2,046	$	-	$	-	$	1	$	3	$	45	$	-	$	(72)	$	-	$	3	$	(77)	$	1,949	$	(3)

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2014
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings for
					Gains /		Unrealized		Foreign																Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Period		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2014
Assets:
Foreign governments	$	5	$	-	$	-	$	-	$	-	$	-	$	-	$	(6)	$	-	$	7	$	-	$	6	$	-
Corporate obligations		34		-		-		-		(1)		3		-		(1)		(1)		4		-		38		-
Residential mortgage-
backed agency		8		-		-		-		-		-		-		(8)		-		-		-		-		-
Commercial
mortgage-backed		1		-		-		-		-		-		-		-		-		-		-		1		-
Collateralized debt
obligations		95		-		-		-		-		-		-		(3)		-		-		-		92		-
Other asset-backed		82		-		-		(4)		-		-		-		(4)		-		21		(1)		94		-
State and municipal
bonds		57		-		-		-		-		-		-		(1)		-		2		-		58		-
Perpetual debt and equity securities		13		-		-		-		-		-		-		-		-		-		-		13		-
Assets of
consolidated VIEs:
Corporate obligations		62		-		-		-		-		-		-		-		-		7		-		69		-
Residential mortgage-
backed non-agency		4		-		-		-		-		-		-		-		-		-		-		4		-
Commercial
Collateralized debt
obligations		6		-		-		-		-		-		-		-		-		-		-		6		-
Other asset-backed		26		-		-		-		-		-		-		(1)		-		14		-		39		-
Loans receivable		1,539		-		12		-		-		-		-		(56)		-		-		-		1,495		12
Loan repurchase
commitments		363		-		2		-		-		-		-		-		-		-		-		365		2
Total assets	$	2,295	$	-	$	14	$	(4)	$	(1)	$	3	$	-	$	(80)	$	(1)	$	55	$	(1)	$	2,280	$	14

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2015
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings for
					Gains /		Unrealized		Foreign																Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Year		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2015
Assets:
Foreign governments	$	6	$	-	$	-	$	-	$	(1)	$	-	$	-	$	-	$	-	$	-	$	-	$	5	$	-
Corporate obligations		10		-		-		-		-		-		-		-		-		15		(17)		8		-
Commercial
mortgage-backed		2		-		-		-		-		-		-		-		-		1		(3)		-		-
Collateralized debt
obligations		87		-		-		3		-		-		-		(18)		(8)		1		(4)		61		-
Other asset-backed		85		(2)		-		1		-		4		-		(9)		(8)		12		(26)		57		-
State and municipal
bonds		8		-		-		-		-		45		-		(4)		-		-		(2)		47		-
Assets of
consolidated VIEs:
Corporate obligations		55		-		-		-		-		-		-		(6)		-		3		(41)		11		-
Residential mortgage-
backed non-agency		3		-		1		-		-		-		-		(1)		-		2		(5)		-		-
Collateralized debt
obligations		5		-		5		-		-		-		-		-		-		-		(10)		-		-
Other asset-backed		26		-		2		-		-		-		-		(5)		-		-		(14)		9		-
Loans receivable- residential		1,431		-		(15)		-		-		-		-		(172)		-		-		-		1,244		(15)
Loans receivable-other		-		-		(1)		-		-		108		-		-		-		-		-		107		(1)
Loan repurchase
commitments		379		-		15		-		-		-		-		-		-		-		-		394		15
Currency
derivatives net		-		-		-		-		6		-		-		-		-		-		-		6		6
Total assets	$	2,097	$	(2)	$	7	$	4	$	5	$	157	$	-	$	(215)	$	(16)	$	34	$	(122)	$	1,949	$	5

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2014
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings for
					Gains /		Unrealized		Foreign																Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Year		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2014
Assets:
Foreign governments	$	12	$	-	$	-	$	-	$	-	$	-	$	-	$	(15)	$	-	$	9	$	-	$	6	$	-
Corporate obligations		48		3		3		(4)		(1)		9		-		(3)		(23)		7		(1)		38		2
Residential mortgage-
backed agency		-		-		-		-		-		-		-		(8)		-		37		(29)		-		-
Residential mortgage-
backed non-agency		6		-		-		(1)		-		-		-		-		-		-		(5)		-		-
Commercial
mortgage-backed		14		-		-		-		-		-		-		(14)		-		2		(1)		1		-
Collateralized debt
obligations		82		(2)		1		27		-		5		-		(9)		(41)		36		(7)		92		-
Other asset-backed		58				-		4		-		11		-		(8)		(1)		51		(21)		94		-
State and municipal
bonds		19		-		-		1		-		-		-		(3)		(3)		46		(2)		58		-
Perpetual debt and equity
securities		11		-		2		-		-		-		-		-		-		4		(4)		13		2
Assets of
consolidated VIEs:
Corporate obligations		48		-		-		-		-		-		-		(4)		-		25		-		69		-
Residential mortgage-
backed non-agency		4		-		(1)		-		-		-		-		(1)		-		2		-		4		-
Commercial
mortgage-backed		3		-		(3)		-		-		-		-		-		-		-		-		-		-
Collateralized debt
obligations		22		-		(10)		-		-		-		-		(4)		-		1		(3)		6		1
Other asset-backed		54		-		(16)		-		-		-		-		(7)		-		18		(10)		39		-
Loans receivable		1,612		-		48		-		-		-		-		(165)		-		-		-		1,495		48
Loan repurchase
commitments		359		-		6		-		-		-		-		-		-		-		-		365		6
Total assets	$	2,352	$	1	$	30	$	27	$	(1)	$	25	$	-	$	(241)	$	(68)	$	238	$	(83)	$	2,280	$	59

Changes In Level 3 Liabilities Measured At Fair Value On A Recurring Basis

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Period		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2015
Liabilities:
Medium-term notes	$	166	$	-	$	4	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	170	$	4
Credit derivatives, net		144		18		(21)		-		-		-		-		(20)		-		-		-		121		(21)
Other
derivatives		21		-		1		-		-		-		-		-		-		-		-		22		1
Liabilities of
consolidated VIEs:
VIE notes		1,374		-		1		-		-		-		-		(65)		-		-		-		1,310		1
Total liabilities	$	1,705	$	18	$	(15)	$	-	$	-	$	-	$	-	$	(85)	$	-	$	-	$	-	$	1,623	$	(15)
_______________
(1) - Transferred in and out at the end of the period.

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Period		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2014
Liabilities:
Medium-term notes	$	217	$	-	$	2	$	-	$	(17)	$	-	$	-	$	-	$	-	$	-	$	-	$	202	$	(15)
Credit derivatives, net		332		24		(48)		-		-		-		-		(24)		-		-		-		284		(14)
Other
derivatives, net		33		-		5		-		-		-		-		-		-		-		-		38		5
Liabilities of
consolidated VIEs:
VIE notes		802		-		4		-		-		-		-		(60)		-		-		-		746		4
Currency derivatives,
net		11		-		(3)		-		(1)		-		-		-		-		-		-		7		(4)
Total liabilities	$	1,395	$	24	$	(40)	$	-	$	(18)	$	-	$	-	$	(84)	$	-	$	-	$	-	$	1,277	$	(24)
_______________
(1) - Transferred in and out at the end of the period.

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Year		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2015
Liabilities:
Medium-term notes	$	197	$	-	$	(11)	$	-	$	(16)	$	-	$	-	$	-	$	-	$	-	$	-	$	170	$	(27)
Credit derivatives, net		244		30		(121)		-		-		-		-		(32)		-		-		-		121		(109)
Other
derivatives, net		24		-		(2)		-		-		-		-		-		-		-		-		22		(2)
Liabilities of
consolidated VIEs:
VIE notes		735		-		22		-		-		695		-		(142)		-		-		-		1,310		22
Total liabilities	$	1,200	$	30	$	(112)	$	-	$	(16)	$	695	$	-	$	(174)	$	-	$	-	$	-	$	1,623	$	(116)
_______________
(1) - Transferred in and out at the end of the period.

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Year		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2014
Liabilities:
Medium-term notes	$	203	$	-	$	17	$	-	$	(18)	$	-	$	-	$	-	$		$	-	$	-	$	202	$	(1)
Credit derivatives, net		1,147		388		(863)		-		-		-		-		(388)		-		-		-		284		20
Other derivatives, net		-		30		8		-		-		-		-		-		-		-		-		38		8
Liabilities of
consolidated VIEs:
VIE notes		940		-		40		-		-		-		3		(196)		(41)		-		-		746		37
Currency derivatives, net		11		-		(3)		-		(1)		-		-		-		-		-		-		7		(4)
Total liabilities	$	2,301	$	418	$	(801)	$	-	$	(19)	$	-	$	3	$	(584)	$	(41)(2)	$	-	$	-	$	1,277	$	60
_______________
(1) - Transferred in and out at the end of the period.
(2) - Primarily relates to the deconsolidation of VIEs.

Gains And Losses (Realized And Unrealized) Included In Earnings Pertaining To Level 3 Assets And Liabilities

		Three Months Ended September 30, 2015				Three Months Ended September 30, 2014
				Change in				Change in
				Unrealized				Unrealized
				Gains (Losses)				Gains (Losses)
				for the				for the
				Period Included				Period Included
				in Earnings				in Earnings
				for Assets				for Assets
				and				and
		Total Gains		Liabilities still		Total Gains		Liabilities still
		(Losses)		held as of		(Losses)		held as of
		Included		September 30,		Included		September 30,
In millions		in Earnings		2015		in Earnings		2014
Revenues:
	Unrealized gains (losses) on
	insured derivatives	$	21	$	21	$	48	$	14
	Realized gains (losses) and other
	settlements on insured derivatives		(18)		-		(24)		-
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		(5)		(5)		9		10
	Revenues of consolidated VIEs:
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		2		(4)		14		14
Total		$	-	$	12	$	47	$	38

		Nine Months Ended September 30, 2015				Nine Months Ended September 30, 2014
				Change in				Change in
				Unrealized				Unrealized
				Gains (Losses)				Gains (Losses)
				for the				for the
				Period Included				Period Included
				in Earnings				in Earnings
				for Assets				for Assets
				and				and
		Total Gains		Liabilities still		Total Gains		Liabilities still
		(Losses)		held as of		(Losses)		held as of
		Included		September 30,		Included		September 30,
In millions		in Earnings		2015		in Earnings		2014
Revenues:
	Unrealized gains (losses) on
	insured derivatives	$	121	$	109	$	863	$	(20)
	Realized gains (losses) and other
	settlements on insured derivatives		(30)		-		(418)		-
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		26		29		(1)		(3)
	Revenues of consolidated VIEs:
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		(9)		(17)		(12)		22
Total		$	108	$	121	$	432	$	(1)

Changes In Fair Value Included In The Company's Consolidated Statements Of Operations

		Three Months Ended September 30,				Nine Months Ended September 30,
In millions		2015		2014		2015		2014
Investments carried at fair value(1)		$	(2)	$	-	$	(1)	$	2
Fixed-maturity securities held at fair value-VIE(2)			(20)		(3)		(93)		(71)
Loans receivable at fair value:
	Residential mortgage loans(2)		(74)		(45)		(187)		(118)
	Other loans(2)		-		(2)		-		(2)
Loan repurchase commitments(2)			6		1		15		6
Medium-term notes(1)			(3)		15		27		1
Variable interest entity notes (2)			122		87		283		256
___________
(1) - Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange" on MBIA's consolidated statements of operations.
(2) - Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange-VIE" on MBIA's consolidated statements of operations.

Difference Between Aggregate Fair Value And The Aggregate Remaining Contractual Principal Balance Outstanding

		As of September 30, 2015							As of December 31, 2014
		Contractual						Contractual
		Outstanding		Fair				Outstanding		Fair
In millions		Principal		Value		Difference		Principal		Value		Difference
Loans receivable at fair value:
	Residential mortgage loans	$	1,331	$	1,233	$	98	$	1,554	$	1,377	$	177
	Residential mortgage loans (90 days or more past due)		194		11		183		227		54		173
	Other loans		107		107		-		721		711		10
	Other loans (90 days or more past due)		73		-		73		-		-		-
Total loans receivable at fair value		$	1,705	$	1,351	$	354	$	2,502	$	2,142	$	360
Variable interest entity notes		$	3,758	$	2,460	$	1,298	$	3,584	$	2,479	$	1,105
Medium-term notes		$	223	$	170	$	53	$	242	$	197	$	45

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Investments (Amortized Cost And Fair Value Of Available-For-Sale and Held-To-Maturity Investment Portfolios) (Detail) - USD ($) $ in Millions		Sep. 30, 2015	Dec. 31, 2014
Available For Sale Securities [Abstract]
Amortized cost		$ 6,265	$ 6,509
Gross unrealized gains		176	209
Gross unrealized losses		(158)	(147)
Total available-for-sale, fair value		6,283	6,571
Other-than-temporary impairments	[1]	(92)	(90)
Held To Maturity Securities [Abstract]
Amortized cost		2,707	2,757
Gross unrealized gains		12	77
Gross unrealized losses		(277)	(202)
Total Held-To-Maturity, fair value		2,442	2,632
Other-Than-Temporary Impairments	[1]	0	0
Corporate Obligations [Member] | Variable Interest Entity Primary Beneficiary [Member]
Held To Maturity Securities [Abstract]
Amortized cost		2,707	2,757
Gross unrealized gains		12	77
Gross unrealized losses		(277)	(202)
Total Held-To-Maturity, fair value		2,442	2,632
Other-Than-Temporary Impairments	[1]	0	0
Money Market Securities [Member]
Available For Sale Securities [Abstract]
Amortized cost		111	422
Gross unrealized gains		0	0
Gross unrealized losses		0	0
Total available-for-sale, fair value		111	422
Other-than-temporary impairments	[1]	0	0
Perpetual Debt And Equity Securities [Member]
Available For Sale Securities [Abstract]
Amortized cost		12	12
Gross unrealized gains		1	1
Gross unrealized losses		0	0
Total available-for-sale, fair value		13	13
Other-than-temporary impairments	[1]	0	0
Fixed Maturities [Member]
Available For Sale Securities [Abstract]
Amortized cost		6,142	6,075
Gross unrealized gains		175	208
Gross unrealized losses		(158)	(147)
Total available-for-sale, fair value		6,159	6,136
Other-than-temporary impairments	[1]	(92)	(90)
Fixed Maturities [Member] | Variable Interest Entity Primary Beneficiary [Member]
Held To Maturity Securities [Abstract]
Amortized cost		2,707
Total Held-To-Maturity, fair value		2,442
Fixed Maturities [Member] | U S Treasury And Government [Member]
Available For Sale Securities [Abstract]
Amortized cost		818	631
Gross unrealized gains		39	39
Gross unrealized losses		(1)	(3)
Total available-for-sale, fair value		856	667
Other-than-temporary impairments	[1]	0	0
Fixed Maturities [Member] | US States And Political Subdivisions [Member]
Available For Sale Securities [Abstract]
Amortized cost		1,779	1,644
Gross unrealized gains		83	94
Gross unrealized losses		(11)	(8)
Total available-for-sale, fair value		1,851	1,730
Other-than-temporary impairments	[1]	0	0
Fixed Maturities [Member] | Foreign Governments [Member]
Available For Sale Securities [Abstract]
Amortized cost		212	283
Gross unrealized gains		3	7
Gross unrealized losses		(2)	0
Total available-for-sale, fair value		213	290
Other-than-temporary impairments	[1]	0	0
Fixed Maturities [Member] | Corporate Obligations [Member]
Available For Sale Securities [Abstract]
Amortized cost		1,772	1,984
Gross unrealized gains		31	44
Gross unrealized losses		(104)	(92)
Total available-for-sale, fair value		1,699	1,936
Other-than-temporary impairments	[1]	(88)	(86)
Fixed Maturities [Member] | Residential Mortgage-Backed Agency [Member]
Available For Sale Securities [Abstract]
Amortized cost		1,034	1,116
Gross unrealized gains		14	17
Gross unrealized losses		(5)	(7)
Total available-for-sale, fair value		1,043	1,126
Other-than-temporary impairments	[1]	0	0
Fixed Maturities [Member] | Residential Mortgage-Backed Non-Agency [Member]
Available For Sale Securities [Abstract]
Amortized cost		58	54
Gross unrealized gains		3	3
Gross unrealized losses		(5)	(4)
Total available-for-sale, fair value		56	53
Other-than-temporary impairments	[1]	(4)	(4)
Fixed Maturities [Member] | Commercial Mortgage-Backed [Member]
Available For Sale Securities [Abstract]
Amortized cost		16	19
Gross unrealized gains		0	1
Gross unrealized losses		0	0
Total available-for-sale, fair value		16	20
Other-than-temporary impairments	[1]	0	0
Fixed Maturities [Member] | Collateralized Debt Obligations [Member]
Available For Sale Securities [Abstract]
Amortized cost		82	113
Gross unrealized gains		0	0
Gross unrealized losses		(20)	(21)
Total available-for-sale, fair value		62	92
Other-than-temporary impairments	[1]	0	0
Fixed Maturities [Member] | Other Asset-Backed [Member]
Available For Sale Securities [Abstract]
Amortized cost		371	231
Gross unrealized gains		2	3
Gross unrealized losses		(10)	(12)
Total available-for-sale, fair value		363	222
Other-than-temporary impairments	[1]	$ 0	$ 0

[1] Represents unrealized gains or losses on other than temporarily impaired securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI.

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Loss And Loss Adjustment Expense Reserves (Schedule Of Present Value Of The Probability-Weighted Future Claim Payments And Recoveries) (Detail) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Loss And Loss Adjustment Expense Reserves [Line Items]
LAE insurance loss recoverable	$ 0	$ 0
Insurance loss recoverable	(437)	(533)
Reinsurance recoverable on unpaid losses	6	6
Reinsurance recoverable on unpaid LAE	0	1
Reinsurance recoverable on paid and unpaid losses	6	7
Loss Reserves Claim Liability [Member] | Classified [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Loss and loss adjustment expense reserves	447	464
Lae Reserves [Member] | Classified [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Loss and loss adjustment expense reserves	33	42
Loss And Lae Reserves [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Loss and loss adjustment expense reserves	$ 480	$ 506

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Credit Derivatives Sold

$ in millions	As of September 30, 2015
		Notional Value
Credit Derivatives Sold	Weighted Average Remaining Expected Maturity		AAA		AA		A		BBB		Below Investment Grade		Total Notional		Fair Value Asset (Liability)
Insured credit default swaps	2.1 Years	$	2,018	$	-	$	304	$	-	$	996	$	3,318	$	(121)
Insured swaps	16.7 Years		-		111		2,739		957		21		3,828		(3)
Total notional		$	2,018	$	111	$	3,043	$	957	$	1,017	$	7,146
Total fair value		$	-	$	-	$	(3)	$	(2)	$	(119)			$	(124)

$ in millions	As of December 31, 2014
		Notional Value
Credit Derivatives Sold	Weighted Average Remaining Expected Maturity		AAA		AA		A		BBB		Below Investment Grade		Total Notional		Fair Value Asset (Liability)
Insured credit default swaps	1.6 Years	$	6,914	$	246	$	968	$	193	$	1,160	$	9,481	$	(244)
Insured swaps	16.7 Years		-		117		2,935		970		22		4,044		(2)
Total notional		$	6,914	$	363	$	3,903	$	1,163	$	1,182	$	13,525
Total fair value		$	(2)	$	-	$	(2)	$	(2)	$	(240)			$	(246)

Total Fair Value Of Company's Derivative Assets And Liabilities By Instrument And Balance Sheet Location, Before Counterparty Netting

In millions				Derivative Assets (1)			Derivative Liabilities (1)
		Notional
		Amount			Fair			Fair
Derivative Instruments		Outstanding		Balance Sheet Location	Value		Balance Sheet Location	Value
Not designated as hedging instruments:
	Insured credit default swaps	$	3,318	Other assets	$	-	Derivative liabilities	$	(121)
	Insured swaps		3,828	Other assets		-	Derivative liabilities		(3)
	Interest rate swaps		1,155	Other assets		4	Derivative liabilities		(255)
	Interest rate swaps-VIE		903	Derivative assets-VIE		-	Derivative liabilities-VIE		(57)
	Interest rate swaps-embedded		406	Medium-term notes		6	Medium-term notes		(15)
	Currency swaps-VIE		81	Derivative assets-VIE		6	Derivative liabilities-VIE		-
	All other		83	Other assets		-	Derivative liabilities		(22)
	All other-VIE		241	Derivative assets-VIE		-	Derivative liabilities-VIE		-
	All other-embedded		12	Other investments		-	Other investments		-
Total non-designated derivatives		$	10,027		$	16		$	(473)
__________
(1) - In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determined
	by the location of the related host contract.

In millions				Derivative Assets (1)			Derivative Liabilities (1)
			Notional
			Amount		Fair			Fair
Derivative Instruments			Outstanding	Balance Sheet Location	Value		Balance Sheet Location	Value
Not designated as hedging instruments:
	Insured credit default swaps	$	9,481	Other assets	$	-	Derivative liabilities	$	(244)
	Insured swaps		4,044	Other assets		-	Derivative liabilities		(2)
	Interest rate swaps		1,450	Other assets		83	Derivative liabilities		(248)
	Interest rate swaps-embedded		437	Medium-term notes		8	Medium-term notes		(19)
	Currency swaps-VIE		91	Derivative assets-VIE		-	Derivative liabilities-VIE		-
	All other		83	Other assets		-	Derivative liabilities		(24)
	All other-VIE		241	Derivative assets-VIE		-	Derivative liabilities-VIE		-
	All other-embedded		12	Other investments		-	Other investments		-
Total non-designated derivatives		$	15,839		$	91		$	(537)
__________
(1) - In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determined
	by the location of the related host contract.

Effect Of Derivative Instruments On Consolidated Statements Of Operations

In millions
		Net Gain
		(Loss)
Derivatives Not Designated as		Recognized
Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	21
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(18)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(45)
Interest rate swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		8
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		4
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		(1)
Total		$	(31)

In millions
		Net Gain
		(Loss)
Derivatives Not Designated as		Recognized
Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	48
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(24)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(7)
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		4
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		(5)
Total		$	16

In millions		Net Gain
		(Loss)
Derivatives Not Designated as		Recognized
Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	121
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(30)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(112)
Interest rate swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		18
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		5
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		2
Total		$	4

In millions		Net Gain
		(Loss)
Derivatives Not Designated as		Recognized
Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	848
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(387)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(52)
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		4
All other	Unrealized gains (losses) on insured derivatives		15
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		(8)
All other	Realized gains (losses) and other settlements on insured derivatives		(30)
Total		$	390

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Income tax rate reconciliation from statutory to effective tax rate

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Income (loss) before income taxes	$	(55)	$	148	$	150	$	607
Provision (benefit) for income taxes	$	(20)	$	(25)	$	52	$	58
Effective tax rate		36.4%		-16.9%		34.7%		9.6%

XML

Consolidated Statement Of Changes In Shareholders' Equity (Parenthetical) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($)
Share-based compensation, net of tax of $9	$ 9

XML

Business Segments (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Summary of company's segment results

			Three Months Ended September 30, 2015
			U.S.				International
			Public				and Structured
			Finance				Finance
In millions			Insurance		Corporate		Insurance		Eliminations			Consolidated
Revenues(1)			$	90	$	5	$	28	$	-		$	123
Net change in fair value of insured derivatives				-		-		3		-			3
Net gains (losses) on financial instruments at fair value and
	foreign exchange			1		(45)		(11)		-			(55)
Net investment losses related to other-than-temporary impairments				(3)		-		-		-			(3)
Other net realized gains (losses)				-		(1)		-		-			(1)
Revenues of consolidated VIEs				-		-		25		-			25
Inter-segment revenues(2)				8		16		15		(39)			-
		Total revenues		96		(25)		60		(39)			92
Losses and loss adjustment				(7)		-		46		-			39
Operating				11		18		17		-			46
Interest				-		24		25		-			49
Expenses of consolidated VIEs				-		-		13		-			13
Inter-segment expenses(2)				21		1		17		(39)			-
		Total expenses		25		43		118		(39)			147
Income (loss) before income taxes				71		(68)		(58)		-			(55)
Provision (benefit) for income taxes				25		(25)		(20)		-			(20)
Net income (loss)			$	46	$	(43)	$	(38)	$	-		$	(35)
Identifiable assets			$	5,432	$	2,514	$	10,084	$	(2,979)	(3)	$	15,051
________________
(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees.
(2) - Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables.
(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

			Three Months Ended September 30, 2014
			U.S.				International
			Public				and Structured
			Finance				Finance		Advisory
In millions			Insurance		Corporate		Insurance		Services		Eliminations			Consolidated
Revenues(1)			$	100	$	7	$	67	$	3	$	-		$	177
Net change in fair value of
	insured derivatives			-		-		24		-		-			24
Net gains (losses) on financial
	instruments at fair value and
	foreign exchange			2		68		(13)		-		-			57
Net investment losses related
	to other-than-temporary
	impairments			(14)		-		-		-		-			(14)
Net gains (losses) on
Other net realized gains (losses)				18		1		11		-		-			30
Revenues of consolidated VIEs				-		-		21		(4)		-			17
Inter-segment revenues(2)				7		12		12		5		(36)			-
		Total revenues		113		88		122		4		(36)			291
Losses and loss adjustment				(8)		-		28		-		-			20
Operating				9		25		17		8		-			59
Interest				-		26		26		-		-			52
Expenses of consolidated VIEs				-		-		12		-		-			12
Inter-segment expenses(2)				18		-		16		2		(36)			-
		Total expenses		19		51		99		10		(36)			143
Income (loss) before income taxes				94		37		23		(6)		-			148
Provision (benefit) for income taxes				38		(70)		9		(2)		-			(25)
Net income (loss)			$	56	$	107	$	14	$	(4)	$	-		$	173
Identifiable assets			$	6,132	$	2,735	$	10,373	$	481	$	(3,520)	(3)	$	16,201
________________
(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.
(2) - Represents intercompany premium income and expense, intercompany asset management fees and expenses and intercompany interest income and expense pertaining to intercompany
receivables and payables.
(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

			Nine Months Ended September 30, 2015
			U.S.				International
			Public				and Structured
			Finance				Finance
In millions			Insurance		Corporate		Insurance		Eliminations			Consolidated
Revenues(1)			$	288	$	18	$	86	$	-		$	392
Net change in fair value of insured derivatives				-		-		91		-			91
Net gains (losses) on financial instruments at fair value and
	foreign exchange			4		35		(19)		-			20
Net investment losses related to other-than-temporary impairments				(9)		(1)		-		-			(10)
Net gains (losses) on extinguishment of debt				-		(1)		-		-			(1)
Other net realized gains (losses)				(4)		22		-		-			18
Revenues of consolidated VIEs				-		-		46		-			46
Inter-segment revenues(2)				26		53		48		(127)			-
		Total revenues		305		126		252		(127)			556
Losses and loss adjustment				(5)		-		84		-			79
Operating				29		56		54		-			139
Interest				-		73		76		-			149
Expenses of consolidated VIEs				-		-		39		-			39
Inter-segment expenses(2)				67		3		50		(120)			-
		Total expenses		91		132		303		(120)			406
Income (loss) before income taxes				214		(6)		(51)		(7)			150
Provision (benefit) for income taxes				74		-		(19)		(3)			52
Net income (loss)			$	140	$	(6)	$	(32)	$	(4)		$	98
Identifiable assets			$	5,432	$	2,514	$	10,084	$	(2,979)	(3)	$	15,051
________________
(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees.
(2) - Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables.
(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

			Nine Months Ended September 30, 2014
			U.S.				International
			Public				and Structured
			Finance				Finance		Advisory
In millions			Insurance		Corporate		Insurance		Services		Conduit		Eliminations			Consolidated
Revenues(1)			$	272	$	30	$	142	$	10	$	-	$	-		$	454
Net change in fair value of
	insured derivatives			1		-		445		-		-		-			446
Net gains (losses) on financial
	instruments at fair value and
	foreign exchange			21		56		(11)		(3)		-		-			63
Net investment losses related
	to other-than-temporary
	impairments			(14)		-		-		-		-		-			(14)
Net gains (losses) on
	extinguishment of debt			-		3		-		-		-		-			3
Other net realized gains (losses)				18		2		11		-		-		-			31
Revenues of consolidated VIEs				-		-		72		(4)		4		-			72
Inter-segment revenues(2)				30		38		36		17		(1)		(120)			-
		Total revenues		328		129		695		20		3		(120)			1,055
Losses and loss adjustment				(5)		-		87		-		-		-			82
Operating				29		64		49		30		-		-			172
Interest				-		78		80		-		-		-			158
Expenses of consolidated VIEs				-		-		36		-		-		-			36
Inter-segment expenses(2)				56		7		51		5		9		(128)			-
		Total expenses		80		149		303		35		9		(128)			448
Income (loss) before income taxes				248		(20)		392		(15)		(6)		8			607
Provision (benefit) for income taxes				90		(167)		137		(3)		(2)		3			58
Net income (loss)			$	158	$	147	$	255	$	(12)	$	(4)	$	5		$	549
Identifiable assets			$	6,132	$	2,735	$	10,373	$	481	$	-	$	(3,520)	(3)	$	16,201
________________
(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.
(2) - Represents intercompany premium income and expense, intercompany asset management fees and expenses and intercompany interest income and expense pertaining to intercompany
receivables and payables.
(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

Summary Of premiums earned on financial guarantees and insured derivatives by geographic location of risk

		Three Months Ended September 30,				Nine Months Ended September 30,
In millions			2015		2014		2015		2014
Total premiums earned:
	United States	$	71	$	78	$	232	$	216
	United Kingdom		8		9		23		28
	Europe (excluding United Kingdom)		2		2		4		6
	Internationally diversified		1		4		3		7
	Central and South America		7		26		20		42
	Asia		-		1		2		3
	Other		1		2		4		6
Total		$	90	$	122	$	288	$	308

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Loss And Loss Adjustment Expense Reserves (RMBS Reserves) (Narrative) (Detail) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Loss And Loss Adjustment Expense Reserves [Line Items]
Insurance loss recoverable		$ 437		$ 437		$ 533
Schedule Of Insured Financial Obligations With Credit Deterioration Insured Contractual Payments Outstanding Principal	[1]	12,741		12,741		11,263
Policyholder (Benefits) And Claims Incurred Net		39	$ 20	79	$ 82
Contract claims on ineligible mortgage loans inception to date, incurred loss on transactions		424		424
Loss And Lae Reserves [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Loss and loss adjustment expense reserves		480		480		506
Expected recoveries of future payments		220		220		147
First Lien R M B S Reserves [Member] | Loss And Lae Reserves [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Loss and loss adjustment expense reserves		246		246		263
Second Lien Rmbs And Heloc And Ces [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Addition to case basis reserves if losses remain at peak levels		32
Second Lien Rmbs And Heloc And Ces [Member] | Excess Spread [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Insurance loss recoverable		398		398		496
Total excess spread recoveries		411		411		523
Expected recoveries of future payments		13		13		27
Second Lien Rmbs And Heloc And Ces [Member] | Excess Spread [Member] | Variable Interest Entity Primary Beneficiary [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Insurance loss recoverable		96		96		132
Total excess spread recoveries		99		99		137
Expected recoveries of future payments		3		3		5
U S Public Finance Insurance [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Loss and loss adjustment expense reserves		31		31		45
Insurance loss recoverable						4
Policyholder (Benefits) And Claims Incurred Net		(7)	$ (8)	(5)	$ (5)
U S Public Finance Insurance [Member] | General obligations
Loss And Loss Adjustment Expense Reserves [Line Items]
Schedule Of Insured Financial Obligations With Credit Deterioration Insured Contractual Payments Outstanding Principal		76,600		76,600		98,900
U S Public Finance Insurance [Member] | General obligations | Classified [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Schedule Of Insured Financial Obligations With Credit Deterioration Insured Contractual Payments Outstanding Principal		79		79		152
Second Lien R M B S Securitizations [Member] | Loss And Lae Reserves [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Loss and loss adjustment expense reserves		47		47		70
Second Lien R M B S Securitizations [Member] | Variable Interest Entity Primary Beneficiary [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Loss and loss adjustment expense reserves		$ 22		$ 22		$ 21

[1] Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.

XML

Fair Value Of Financial Instruments (Gains And Losses On Fair Value Option Included In The Company's Consolidated Statements Of Operations) (Detail) - USD ($) $ in Millions		3 Months Ended				9 Months Ended
		Sep. 30, 2015		Sep. 30, 2014		Sep. 30, 2015	Sep. 30, 2014
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange		$ (55)		$ 57		$ 20	$ 63
Non Variable Interest Entity [Member]
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange		(55)		57		20	63
Variable Interest Entity [Member]
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange		13		8		9	34
Variable Interest Entity [Member] | Loan Repurchase Commitments [Member]
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange	[1]	6		1		15	6
Investments Carried At Fair Value [Member] | Non Variable Interest Entity [Member]
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange		(2)	[2]	0	[2]	(1)	2	[2]
Fixed Maturity Securities Held At Fair Value - VIE [Member] | Variable Interest Entity [Member]
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange	[1]	(20)		(3)		(93)	(71)
Residential Mortgage Loans [Member] | Variable Interest Entity [Member]
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange	[1]	(74)		(45)		(187)	(118)
Other Loans [Member] | Variable Interest Entity [Member]
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange	[1]			(2)			(2)
Medium Term Notes [Member] | Non Variable Interest Entity [Member]
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange	[2]	(3)		15		27	1
Variable Interest Entity Notes [Member] | Variable Interest Entity [Member]
Accounts Notes And Loans Receivable [Line Items]
Net gains (losses) on financial instruments at fair value and foreign exchange	[1]	$ 122		$ 87		$ 283	$ 256

[1] Reported within Net gains (losses) of financial instruments at fair value and foreign exchange-VIE on MBIA's consolidated statements of operations.

[2] Reported within Net gains (losses) of financial instruments at fair value and foreign exchange on MBIA's consolidated statements of operations.

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Business Segments (Summary Of Company's Segment Results) (Detail) - USD ($) $ in Millions		3 Months Ended				9 Months Ended
		Sep. 30, 2015		Sep. 30, 2014		Sep. 30, 2015		Sep. 30, 2014		Dec. 31, 2014
Segment Reporting Information [Line Items]
Revenues		$ 123	[1]	$ 177	[2]	$ 392	[1]	$ 454	[2]
Net change in fair value of insured derivatives		3		24		91		446
Net gains (losses) on financial instruments at fair value and foreign exchange		(55)		57		20		63
Net investment losses related to other-than-temporary impairments		(3)		(14)		(10)		(14)
Net gains (losses) on extinguishment of debt		0				(1)		3
Other net realized gains (losses)		(1)		30		18		31
Revenues of consolidated VIEs		25		17		46		72
Inter-segment revenues		0	[3]	0	[4]	0	[3]	0	[4]
Total revenues		92		291		556		1,055
Losses and loss adjustment		39		20		79		82
Operating		46		59		139		172
Interest		49		52		149		158
Expenses of consolidated VIEs		13		12		39		36
Inter-segment expenses		0	[3]	0	[4]	0	[3]	0	[4]
Total expenses		147		143		406		448
Income (loss) before income taxes		(55)		148		150		607
Provision (benefit) for income taxes		(20)		(25)		52		58
Net income (loss)		(35)		173		98		549
Identifiable assets		15,051		16,201		15,051		16,201		$ 16,284
U S Public Finance Insurance [Member]
Segment Reporting Information [Line Items]
Losses and loss adjustment		(7)		(8)		(5)		(5)
Operating Segments [Member] | U S Public Finance Insurance [Member]
Segment Reporting Information [Line Items]
Revenues		90	[1]	100	[2]	288	[1]	272	[2]
Net change in fair value of insured derivatives								1
Net gains (losses) on financial instruments at fair value and foreign exchange		1		2		4		21
Net investment losses related to other-than-temporary impairments		(3)		(14)		(9)		(14)
Other net realized gains (losses)		0		18		(4)		18
Inter-segment revenues		8	[3]	7	[4]	26	[3]	30	[4]
Total revenues		96		113		305		328
Losses and loss adjustment		(7)		(8)		(5)		(5)
Operating		11		9		29		29
Inter-segment expenses		21	[3]	18	[4]	67	[3]	56	[4]
Total expenses		25		19		91		80
Income (loss) before income taxes		71		94		214		248
Provision (benefit) for income taxes		25		38		74		90
Net income (loss)		46		56		140		158
Identifiable assets		5,432		6,132		5,432		6,132
Operating Segments [Member] | Corporate Operations [Member]
Segment Reporting Information [Line Items]
Revenues		5	[1]	7	[2]	18	[1]	30	[2]
Net gains (losses) on financial instruments at fair value and foreign exchange		(45)		68		35		56
Net investment losses related to other-than-temporary impairments		0				(1)
Net gains (losses) on extinguishment of debt		0				(1)		3
Other net realized gains (losses)		(1)		1		22		2
Inter-segment revenues		16	[3]	12	[4]	53	[3]	38	[4]
Total revenues		(25)		88		126		129
Losses and loss adjustment						0
Operating		18		25		56		64
Interest		24		26		73		78
Inter-segment expenses		1	[3]			3	[3]	7	[4]
Total expenses		43		51		132		149
Income (loss) before income taxes		(68)		37		(6)		(20)
Provision (benefit) for income taxes		(25)		(70)		0		(167)
Net income (loss)		(43)		107		(6)		147
Identifiable assets		2,514		2,735		2,514		2,735
Operating Segments [Member] | International And Structured Finance Insurance [Member]
Segment Reporting Information [Line Items]
Revenues		28	[1]	67	[2]	86	[1]	142	[2]
Net change in fair value of insured derivatives		3		24		91		445
Net gains (losses) on financial instruments at fair value and foreign exchange		(11)		(13)		(19)		(11)
Other net realized gains (losses)				11				11
Revenues of consolidated VIEs		25		21		46		72
Inter-segment revenues		15	[3]	12	[4]	48	[3]	36	[4]
Total revenues		60		122		252		695
Losses and loss adjustment		46		28		84		87
Operating		17		17		54		49
Interest		25		26		76		80
Expenses of consolidated VIEs		13		12		39		36
Inter-segment expenses		17	[3]	16	[4]	50	[3]	51	[4]
Total expenses		118		99		303		303
Income (loss) before income taxes		(58)		23		(51)		392
Provision (benefit) for income taxes		(20)		9		(19)		137
Net income (loss)		(38)		14		(32)		255
Identifiable assets		10,084		10,373		10,084		10,373
Operating Segments [Member] | Advisory Services [Member]
Segment Reporting Information [Line Items]
Revenues	[2]			3				10
Net gains (losses) on financial instruments at fair value and foreign exchange								(3)
Revenues of consolidated VIEs				(4)				(4)
Inter-segment revenues	[4]			5				17
Total revenues				4				20
Operating				8				30
Inter-segment expenses	[4]			2				5
Total expenses				10				35
Income (loss) before income taxes				(6)				(15)
Provision (benefit) for income taxes				(2)				(3)
Net income (loss)				(4)				(12)
Identifiable assets				481				481
Operating Segments [Member] | Conduit [Member]
Segment Reporting Information [Line Items]
Revenues of consolidated VIEs								4
Inter-segment revenues	[4]							(1)
Total revenues				0				3
Inter-segment expenses	[4]			0				9
Total expenses				0				9
Income (loss) before income taxes				0				(6)
Provision (benefit) for income taxes				0				(2)
Net income (loss)				0				(4)
Intersegment Elimination [Member]
Segment Reporting Information [Line Items]
Inter-segment revenues		(39)	[3]	(36)	[4]	(127)	[3]	(120)	[4]
Total revenues		(39)		(36)		(127)		(120)
Inter-segment expenses		(39)	[3]	(36)	[4]	(120)	[3]	(128)	[4]
Total expenses		(39)		(36)		(120)		(128)
Income (loss) before income taxes		0		0		(7)		8
Provision (benefit) for income taxes		0		0		(3)		3
Net income (loss)		0		0		(4)		5
Identifiable assets	[5]	$ (2,979)		$ (3,520)		$ (2,979)		$ (3,520)

[1] Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees.

[2] Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.

[3] Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables.

[4] Represents intercompany premium income and expense, intercompany asset management fees and expenses and intercompany interest income and expense pertaining to intercompany receivables and payables.

[5] Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

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Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 492	$ 782
Insurance loss recoverable	437	533
Assets held for sale	0	802
Deferred income taxes, net	1,000	1,000
Investments held-to-maturity, at amortized cost (fair value $2,442 and $2,632)	2,707	2,757
Total assets	15,051	16,284
Liabilities:
Liabilities held for sale	0	772
Total liabilities	$ 11,337	$ 12,334
Commitments and contingencies (See Note 13)
Equity:
Preferred stock, par value $1 per share; authorized shares--10,000,000; issued and outstanding--none	$ 0	$ 0
Common stock, par value $1 per share; authorized shares--400,000,000; issued shares--281,820,698 and 281,352,782	282	281
Additional paid-in capital	3,133	3,128
Retained earnings	2,956	2,858
Accumulated other comprehensive income (loss), net of tax of $23 and $7	(10)	21
Treasury stock, at cost--128,874,339 and 89,409,887 shares	(2,659)	(2,359)
Total shareholders' equity of MBIA Inc.	3,702	3,929
Preferred stock of subsidiary and noncontrolling interest	12	21
Total equity	3,714	3,950
Total liabilities and equity	15,051	16,284
Non Variable Interest Entity [Member]
Assets
Fixed-maturity securities held as available-for-sale, at fair value (amortized cost $5,177 and $5,036)	5,221	5,129
Investments carried at fair value	176	207
Investments pledged as collateral, at fair value (amortized cost $298 and $441)	272	408
Short-term investments held as available-for-sale, at fair value (amortized cost $828 and $1,069)	829	1,069
Other investments (includes investments at fair value of $13 and $13)	16	17
Total investments	6,514	6,830
Cash and cash equivalents	462	729
Premiums receivable	789	875
Deferred acquisition costs	182	217
Insurance loss recoverable	437	533
Deferred income taxes, net	996	1,028
Other assets	198	229
Liabilities:
Unearned premium revenue	1,699	1,986
Loss and loss adjustment expense reserves	480	506
Long-term debt	1,882	1,810
Medium-term notes (includes financial instruments carried at fair value of $170 and $197)	1,033	1,201
Investment agreements	485	547
Derivative liabilities	339	437
Other liabilities	196	271
Variable Interest Entity Primary Beneficiary [Member]
Assets
Investments carried at fair value	985	421
Cash	30	53
Investments held-to-maturity, at amortized cost (fair value $2,442 and $2,632)	2,707	2,757
Loans receivable at fair value	1,351	1,431
Loan repurchase commitments	394	379
Derivative assets	6	0
Liabilities:
Derivative liabilities	57	0
Variable interest entity notes (includes financial instruments carried at fair value of $2,460 and $2,047)	$ 5,166	$ 4,804

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Loss And Loss Adjustment Expense Reserves (Schedule Of Loss And Loss Adjustment Expenses Reserves) (Detail) - USD ($) $ in Millions		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014
Loss And Loss Adjustment Expense Reserves [Line Items]
Changes in unearned premium revenue		$ 274	$ 303
Changes in LAE reserves		24	$ 124
Loss And Lae Reserves [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Gross loss and LAE reserve, beginning balance		506
Loss payments for cases with reserves		(42)
Accretion of claim liability discount		6
Changes in discount rates		(28)
Changes in assumptions		46
Changes in unearned premium revenue		13
Changes in LAE reserves		(9)
Other	[1]	(12)
Gross loss and LAE reserve, ending balance		$ 480

[1] Primarily changes in amount and timing of payments.

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Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statements of Comprehensive Income (Loss)
Net income (loss)	$ (35)	$ 173	$ 98	$ 549
Unrealized gains (losses) on available-for-sale securities: [Abstract]
Unrealized gains (losses) arising during the period	51	1	(35)	185
Provision (benefit) for income taxes	19	0	(11)	64
Total	32	1	(24)	121
Reclassification adjustments for (gains) losses included in net income (loss)	6	0	10	15
Provision (benefit) for income taxes	1	0	3	6
Total	5	0	7	9
Available-for-sale securities with other-than-temporary impairments: [Abstract]
Other-than-temporary impairments and unrealized gains (losses) arising during the period	(1)	(79)	(5)	(80)
Provision (benefit) for income taxes	(1)	(28)	(2)	(29)
Total	0	(51)	(3)	(51)
Reclassification adjustments for (gains) losses included in net income (loss)	3	0	3	7
Provision (benefit) for income taxes	1	0	1	2
Total	2	0	2	5
Foreign currency translation: [Abstract]
Foreign currency translation gains (losses)	(18)	(30)	(19)	(23)
Provision (benefit) for income taxes	(5)	(10)	(6)	(7)
Total	(13)	(20)	(13)	(16)
Reclassification adjustments for (gains) losses included in net income (loss)	0	0	0	4
Total other comprehensive income (loss)	26	(70)	(31)	72
Comprehensive income (loss)	$ (9)	$ 103	$ 67	$ 621

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Investments (Distribution Of Securities By Percentage Of Fair Value Below Book Value By More Than 5% For A Continuous Twelve Month Period Or Longer) (Detail) $ in Millions	Sep. 30, 2015 USD ($) security	Dec. 31, 2014 USD ($)
Available For Sale Securities [Abstract]
Fixed-maturity securities held as available-for-sale, amortized cost	$ 6,265	$ 6,509
Available For Sale Securities	6,283	6,571
Held To Maturity Securities [Abstract]
Held-To-Maturity Securities Amortized Cost	2,707	2,757
Held-To-Maturity Securities Fair Value	$ 2,442	$ 2,632
> 5% To 15% [Member]
Held To Maturity Securities [Abstract]
Percentage Of Fair Value Below Book Value Minimum	5.00%
Percentage Of Fair Value Below Book Value Maximum	15.00%
> 5% To 15% [Member] | Unrealized loss position > 12 months
Available For Sale Securities [Abstract]
Number of available-for-sale securities in unrealized loss position | security	7
Fixed-maturity securities held as available-for-sale, amortized cost	$ 13
Available For Sale Securities	$ 13
Held To Maturity Securities [Abstract]
Number of Held-To-Maturity Securities in unrealized loss position | security	0
Held-To-Maturity Securities Amortized Cost	$ 0
Held-To-Maturity Securities Fair Value	$ 0
> 15% To 25% [Member]
Held To Maturity Securities [Abstract]
Percentage Of Fair Value Below Book Value Minimum	15.00%
Percentage Of Fair Value Below Book Value Maximum	25.00%
> 15% To 25% [Member] | Unrealized loss position > 12 months
Available For Sale Securities [Abstract]
Number of available-for-sale securities in unrealized loss position | security	8
Fixed-maturity securities held as available-for-sale, amortized cost	$ 82
Available For Sale Securities	$ 65
Held To Maturity Securities [Abstract]
Number of Held-To-Maturity Securities in unrealized loss position | security	0
Held-To-Maturity Securities Amortized Cost	$ 0
Held-To-Maturity Securities Fair Value	$ 0
> 25% To 50% [Member]
Held To Maturity Securities [Abstract]
Percentage Of Fair Value Below Book Value Minimum	25.00%
Percentage Of Fair Value Below Book Value Maximum	50.00%
> 25% To 50% [Member] | Unrealized loss position > 12 months
Available For Sale Securities [Abstract]
Number of available-for-sale securities in unrealized loss position | security	5
Fixed-maturity securities held as available-for-sale, amortized cost	$ 5
Available For Sale Securities	$ 3
Held To Maturity Securities [Abstract]
Number of Held-To-Maturity Securities in unrealized loss position | security	1
Held-To-Maturity Securities Amortized Cost	$ 575
Held-To-Maturity Securities Fair Value	$ 321
> 50% [Member]
Held To Maturity Securities [Abstract]
Percentage Of Fair Value Below Book Value Minimum	50.00%
> 50% [Member] | Unrealized loss position > 12 months
Available For Sale Securities [Abstract]
Number of available-for-sale securities in unrealized loss position | security	2
Fixed-maturity securities held as available-for-sale, amortized cost	$ 122
Available For Sale Securities	$ 17
Held To Maturity Securities [Abstract]
Number of Held-To-Maturity Securities in unrealized loss position | security	0
Held-To-Maturity Securities Amortized Cost	$ 0
Held-To-Maturity Securities Fair Value	$ 0
Greater Than 5% [Member] | Unrealized loss position > 12 months
Available For Sale Securities [Abstract]
Number of available-for-sale securities in unrealized loss position | security	22
Fixed-maturity securities held as available-for-sale, amortized cost	$ 222
Available For Sale Securities	$ 98
Held To Maturity Securities [Abstract]
Number of Held-To-Maturity Securities in unrealized loss position | security	1
Held-To-Maturity Securities Amortized Cost	$ 575
Held-To-Maturity Securities Fair Value	$ 321

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Business Developments And Risks And Uncertainties (Narrative) (Detail) shares in Millions, $ in Millions		9 Months Ended
	Oct. 05, 2015 USD ($)	Sep. 30, 2015 USD ($) shares	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Number of operating segments		3
Cutwater sale effective date		Jan. 01, 2015
Mbia Inc [Member]
Business Acquisition [Line Items]
Gain on sale of subsidiary		$ 24
Liquid assets		306	$ 498
Amount released from tax escrow account		$ 228
Treasury stock shares acquired | shares		7.6
National [Member]
Business Acquisition [Line Items]
Impairment of real estate		$ 4
Treasury stock shares acquired | shares		8.0
National [Member] | SubsequentEvent [Member]
Business Acquisition [Line Items]
Dividends from subsidiaries	$ 114
Warburg Pincus [Member]
Business Acquisition [Line Items]
Common Stock Shares Sold | shares		45.7

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Derivative Instruments (Narrative) (Detail) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)
Derivative [Line Items]
Maximum amount of future guarantee payments	$ 3,500
Cash collateral posted to derivative counterparties	80	$ 12
Securities posted as collateral to derivative counterparties	$ 245	$ 198
Number of credit support annexes	1	1
Fair value of Credit Support Annex	$ 3	$ 2
Amount of counterparty netting	1	81
Derivative assets, after counterparty netting	15	10
Other assets and other assets of consolidated VIEs, after counterparty netting and embedded reclass	9	2
Counterparty netting	1	81
Derivative liabilities, after counterparty netting and posting of cash collateral	411	456
Derivative liabilities and derivative liabilities of consolidated VIEs, after counterparty netting and embedded reclass	396	437
Derivative Liabilities [Member]
Derivative [Line Items]
Cash collateral posted to derivative counterparties	61	0
Other Liabilities [Member]
Derivative [Line Items]
Cash collateral posted to derivative counterparties	19	12
Other Assets [Member]
Derivative [Line Items]
Cash collateral posted to derivative counterparties		0
Medium Term Notes And Other Investments [Member] | Embedded [Member]
Derivative [Line Items]
Embedded derivative assets	6	8
Total derivative liabilities	$ 15	$ 19

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Commitments and Contingencies

Note 13: Commitments and Contingencies

The following commitments and contingencies provide an update of those discussed in “Note 21: Commitments and Contingencies” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31,2014, and should be read in conjunction with the complete descriptions provided in the aforementioned Form 10-K.

Litigation

MBIA Insurance Corp. v. Credit Suisse Securities (USA) LLC, et al.; Index No. 603751/2009 (N.Y. Sup. Ct., N.Y. County)

On March 2, 2015, the court issued an order scheduling expert discovery to conclude by February of 2016.

MBIA Insurance Corp. v. J.P. Morgan Securities LLC (f/k/a Bear, Stearns & Co. Inc.); Index No. 64676/2012 (N.Y. Sup. Ct., County of Westchester)

On September 9, 2014, the court granted in part MBIA Corp.’s motion to file an amended complaint. MBIA filed its amended complaint on September 29, 2014. J.P. Morgan filed its answer to the amended complaint on October 10, 2014. The parties eachcross-appealed the September 9, 2014 decision and those appeals were fully submitted as of June 8, 2015. J.P. Morgan’s motion for summary judgment was fully briefed as of October 15, 2015.

Lynn Tilton and Patriarch Partners XV, LLC v. MBIA Inc. and MBIA Insurance Corp.; Index No. 68880/2015 (N.Y. Sup. Ct., County of Westchester)

On November 2, 2015, Lynn Tilton and Patriarch Partners XV, LLC filed a complaint in New York State Supreme Court, Westchester County, against MBIA Inc. and MBIA Corp., alleging fraudulent inducement and related claims arising from purported promises made by MBIA in connection with insurance policies issued by MBIA Corp. on certain collateralized loan obligations managed by Ms. Tilton and her affiliated Patriarch entities, and seeking damages.

Ambac Bond Insurance Coverage Cases, Coordinated Proceeding Case No. JCCP 4555 (Super. Ct. of Cal., County of San Francisco)

An appeal of the dismissal of the plaintiff’s anti-trust claim under California’s Cartwright Act is pending. An appeal is also pending of the March 26, 2014 decision granting in part the Bond Insurer defendants’ motions for reimbursement of legal fees incurred in connection with the motion to strike pursuant to California’s Anti-SLAPP statute.

The Company is defending against the aforementioned actions in which it is a defendant and expects ultimately to prevail on the merits. There is no assurance, however, that the Company will prevail in these actions. Adverse rulings in these actions could have a material adverse effect on the Company’s ability to implement its strategy and on its business, results of operations, cash flows and financial condition. At this stage of the litigation, there has not been a determination as to the amount, if any, of damages. Accordingly, the Company is not able to estimate any amount of loss or range of loss.

There are no other material lawsuits pending or, to the knowledge of the Company, threatened, to which the Company or any of its subsidiaries is a party.

Lease Commitments

The Company has a lease agreement for its headquarters in Purchase, New York. The initial lease term expires in 2030 with the option to terminate the lease in 2025 upon the payment of a termination amount. This lease agreement included an incentive amount to fund certain leasehold improvements, renewal options, escalation clauses and a free rent period. The lease agreement has been classified as an operating lease, and operating rent expense has been recognized on a straight-line basis sincethe second quarter of 2014.

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Business Developments And Risks And Uncertainties (Assets And Liabilities Held For Sale) (Detail) $ in Millions	Dec. 31, 2014 USD ($)
Assets And Liabilities Held For Sale By Major Category [Line Items]
Assets held for sale	$ 802
Liabilities held for sale	772
Investments At Fair Value [Member]
Assets And Liabilities Held For Sale By Major Category [Line Items]
Assets held for sale	6
Cash And Cash Equivalents [Member]
Assets And Liabilities Held For Sale By Major Category [Line Items]
Assets held for sale	15
Facility [Member]
Assets And Liabilities Held For Sale By Major Category [Line Items]
Assets held for sale	26
Other Assets [Member]
Assets And Liabilities Held For Sale By Major Category [Line Items]
Assets held for sale	4
Cash [Member]
Assets And Liabilities Held For Sale By Major Category [Line Items]
Assets held for sale	40
Loans Receivable [Member]
Assets And Liabilities Held For Sale By Major Category [Line Items]
Assets held for sale	711
Other Liabilities [Member]
Assets And Liabilities Held For Sale By Major Category [Line Items]
Liabilities held for sale	18
Variable Interest Entities Notes [Member]
Assets And Liabilities Held For Sale By Major Category [Line Items]
Liabilities held for sale	431
Payable For Loans Purchased [Member]
Assets And Liabilities Held For Sale By Major Category [Line Items]
Liabilities held for sale	$ 323

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual periods. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31,2014. The accompanying consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (U.S.), but in the opinion of management such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company’s consolidated financial position and results of operations. All material intercompany balances and transactions have been eliminated.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. As additional information becomes available or actual amounts become determinable, the recorded estimates are revised and reflected in operating results.

The results of operations for the three and nine months endedSeptember 30,2015 may not be indicative of the results that may be expected for the year ending December 31,2015. The December 31,2014 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP for annual periods. Certain amounts have been reclassified in the prior year’s financial statements to conform to the current presentation. Such reclassifications had no impact on total revenues, expenses, assets, liabilities, shareholders’ equity, operating cash flows, investing cash flows, or financing cash flows for all periods presented.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360):Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08)

In April of 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU 2014-08 changes the criteria for determining whether a disposal of a component or group of components of an entity qualifies for discontinued operations presentation and requires new disclosures. ASU 2014-08 amends the definition of discontinued operation to a disposal of components of an entity that represent strategic shifts that have, or will have, a major effect on an entity’s operations and financial results. ASU 2014-08 was effective for interim and annual periods beginning January 1, 2015. The adoption of ASU 2014-08 did not affect the Company’s consolidated financial statements.

Transfers and Servicing (Topic 860):Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (ASU 2014-11)

In June of 2014, the FASB issued ASU 2014-11, “Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.” The repurchase agreements and similar transactions guidance is amended by ASU 2014-11 to change the accounting for i.) repurchase-to-maturity transactions to secured borrowing accounting and ii.) linked repurchase financing transactions to secured borrowing accounting. ASU 2014-11 amends disclosure requirements for transfers accounted for as sales, and for repurchase transactions accounted for as secured borrowings. ASU 2014-11 was effective for interim and annual periods beginning January 1, 2015. The adoption of ASU 2014-11 did not affect the Company’s consolidated financial statements.

Consolidation (Topic 810):Amendments to the Consolidation Analysis (ASU 2015-02)

In February of 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810):Amendments to the Consolidation Analysis.” ASU 2015-02 amends the accounting guidance for consolidation of legal entities including consolidated variable interest entities (“VIEs”). ASU 2015-02 eliminates the specialized consolidation model and guidance for limited partnerships, amends the conditions for evaluating whether a fee paid to a decision maker or a service provider represents a variable interest in a VIE, amends the related party guidance for the determination of the primary beneficiary of a VIE, and requires certain investment funds designed as VIEs, except money market funds, to apply the amended consolidation guidance. ASU 2015-02 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted, and is applied on a retrospective or modified retrospective basis. The Company adopted ASU 2015-02 in the second quarter of 2015, and deconsolidated a VIE upon adoption. The adoption of ASU 2015-02 did not materially impact the Company’s consolidated financial statements.

The Company has not adopted any other new accounting pronouncements that had a material impact on its consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

Recent Accounting Developments

Revenue from Contracts with Customers (Topic 606) (ASU 2014-09) and Deferral of the Effective Date(ASU 2015-14)

In May of 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 amends the accounting guidance for recognizing revenue for the transfer of goods or services from contracts with customers unless those contracts are within the scope of other accounting standards. In August of 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606)— Deferral of the Effective Date.”ASU 2015-14 defers the effective date of ASU 2014-09 to interim and annual periods beginning January 1, 2018, and is applied on a retrospective or modified retrospective basis. The Company is evaluating the impact of adopting ASU 2014-09.

Compensation-Stock Compensation (Topic 718):Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (A Consensus of the FASB Emerging Issues Task Force) (ASU 2014-12)

In June of 2014, the FASB issued ASU 2014-12, “Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” ASU 2014-12 requires that a performance target that affects vesting of share-based payment awards and that could be achieved after an employee’s requisite service period be accounted for as a performance condition. ASU 2014-12 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted, and is applied on a prospective basis or retrospective basis. The adoption of ASU 2014-12 is not expected to materially impact the Company’s consolidated financial statements.

Consolidation (Topic 810):Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (ASU 2014-13)

In August of 2014, the FASB issued ASU 2014-13, “Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity.”ASU 2014-13 applies to a consolidated collateralized financing entity defined as a consolidated VIE that holds financial assets and issues beneficial interests in those financial assets that are classified as financial liabilities. The Company may elect to measure the financial assets and the financial liabilities of a consolidated collateralized financing entity using a measurement alternative provided in ASU 2014-13. The measurement alternative requires both the financial assets and the financial liabilities of the consolidated collateralized financing entity to be measured using the more observable of the fair value of the financial assets and the fair value of the financial liabilities with the changes in fair value recognized to earnings. Upon adoption, a reporting entity may apply the measurement alternative to existing consolidated collateralized financing entities. ASU 2014-13 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted. The adoption of ASU 2014-13 is not expected to materially impact the Company’s consolidated financial statements.

Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern(ASU 2014-15)

In August of 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ending December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The adoption of ASU 2014-15 is not expected to materially impact the Company’s consolidated financial statements.

Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03)

In April of 2015, the FASB issued ASU 2015-03, “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires debt issuance costs related to a debt liability measured at amortized cost to be reported in the balance sheet as a direct deduction from the face amount of the debt liability. ASU 2015-03 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted, and is applied on a retrospective basis. The adoption of ASU 2015-03 is not expected to materially impact the Company’s consolidated financial statements.

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Derivative Instruments (Effect Of Derivative Instruments On Consolidated Statements Of Operations) (Detail) - Nondesignated [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Derivative [Line Items]
Net gain/(loss) recognized in income	$ (31)	$ 16	$ 4	$ 390
Unrealized Gains Losses On Insured Derivatives [Member] | Credit Default Swap [Member]
Derivative [Line Items]
Net gain/(loss) recognized in income	21	48	121	848
Unrealized Gains Losses On Insured Derivatives [Member] | All Other [Member]
Derivative [Line Items]
Net gain/(loss) recognized in income	0	0		15
Realized Gains Losses And Other Settlements On Insured Derivatives [Member] | Credit Default Swap [Member]
Derivative [Line Items]
Net gain/(loss) recognized in income	(18)	(24)	(30)	(387)
Realized Gains Losses And Other Settlements On Insured Derivatives [Member] | All Other [Member]
Derivative [Line Items]
Net gain/(loss) recognized in income	0	0		(30)
Foreign Exchange And Other Derivative Financial Instruments [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Net gain/(loss) recognized in income	(45)	(7)	(112)	(52)
Foreign Exchange And Other Derivative Financial Instruments [Member] | Currency Swap [Member]
Derivative [Line Items]
Net gain/(loss) recognized in income		0
Foreign Exchange And Other Derivative Financial Instruments [Member] | All Other [Member]
Derivative [Line Items]
Net gain/(loss) recognized in income	(1)	(5)	2	(8)
Foreign Exchange And Other Derivative Financial Instruments Attributable To V I E [Member] | Interest Rate Swaps V I E [Member]
Derivative [Line Items]
Net gain/(loss) recognized in income	8	0	18
Foreign Exchange And Other Derivative Financial Instruments Attributable To V I E [Member] | Currency Swaps Vie [Member]
Derivative [Line Items]
Net gain/(loss) recognized in income	$ 4	$ 4	$ 5	$ 4

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Consolidated Statement Of Changes In Shareholders' Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Millions	Total	Parent [Member]	Common Stock [Member]	Additional Paid In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Preferred Stock [Member]	Preferred Stock Of Subsidiary And Noncontrolling Interest [Member]
Balance at Dec. 31, 2014	$ 3,950	$ 3,929	$ 281	$ 3,128	$ 2,858	$ 21	$ (2,359)		$ 21
Balance (in common stock shares) at Dec. 31, 2014	281,352,782		281,352,782				(89,409,887)
Balance (in preferred stock shares) at Dec. 31, 2014	0							1,315
ASU 2015-02 Transition Adjustment	$ (9)								(9)
Net income (loss)	98	98			98
Other comprehensive income (loss)	(31)	(31)				(31)
Share-based compensation, net of tax of $9	3	3	$ 1	5			$ (3)
Share-based compensation (in shares)			467,916				(523,289)
Treasury shares acquired	(297)	(297)					$ (297)
Treasury shares acquired (in shares)							(38,941,163)
Balance at Sep. 30, 2015	$ 3,714	$ 3,702	$ 282	$ 3,133	$ 2,956	$ (10)	$ (2,659)		$ 12
Balance (in common stock shares) at Sep. 30, 2015	281,820,698		281,820,698				(128,874,339)
Balance (in preferred stock shares) at Sep. 30, 2015	0							1,315

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Fixed-maturity securities held as available-for-sale, amortized cost	$ 6,265	$ 6,509
Investments held-to-maturity, fair value	$ 2,442	$ 2,632
Preferred stock, par value	$ 1	$ 1
Preferred stock, authorized shares	10,000,000	10,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 1	$ 1
Common stock, authorized shares	400,000,000	400,000,000
Common stock, issued shares	281,820,698	281,352,782
Accumulated other comprehensive income (loss), taxes	$ 23	$ 7
Treasury stock, shares	128,874,339	89,409,887
Non Variable Interest Entity [Member]
Fixed-maturity securities held as available-for-sale, amortized cost	$ 5,177	$ 5,036
Investments pledged as collateral, amortized cost	298	441
Short-term investments held as available-for-sale, amortized cost	828	1,069
Other investments, fair value	13	13
Medium-term notes, financial instruments carried at fair value	170	197
Variable Interest Entity Primary Beneficiary [Member]
Investments held-to-maturity, fair value	2,442	2,632
Variable interest entity notes, financial instruments carried at fair value	$ 2,460	$ 2,047

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Derivative Instruments

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Derivative Instruments

Note 8: Derivative Instruments

Overview

MBIA has entered into derivative instruments through its financial guarantee of CDS and certain other derivative contracts for purposes of managing risks associated with existing assets and liabilities. In certain instances, the Company purchased or issued securities that contain embedded derivatives that were separated from the host contract and accounted for as derivative instruments. In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determinedby the location of the related security.Derivative instruments are recorded at fair value on the Company’s consolidated balance sheets with the changes in fair value recorded on the Company’s consolidated statements of operations within “Unrealized gains (losses) on insured derivatives,” for the insured derivatives, or “Net gains (losses) on financial instruments at fair value and foreign exchange” for the embedded derivatives.Refer to “Note 6: Fair Value of Financial Instruments” for themethod of determining the fair value of derivative instruments.

U.S. Public Finance Insurance

The Company’s derivative exposure within its U.S. public finance insurance operations primarily consists of insured interest rate and inflation-linked swaps related to insured U.S. public finance debt issues. These derivatives do not qualify for the financial guarantee scope exception and are accounted for as derivative instruments.

Internationaland StructuredFinanceInsurance

The Company entered into derivative instruments that it viewed as an extension of its core financial guarantee business that do not qualify for the financial guarantee scope exception and, therefore, are accounted for as derivative instruments. These insured CDS contracts, primarily referencing corporate obligations, ABS, RMBS, CMBS, CRE loans and CDOs, are intended to be held for the entire term of the contract absent a negotiated settlement with the counterparty.The Company’s derivative exposure within its international and structured finance insurance segment also includes insured interest rate and inflation-linked swaps related to insured debt issues.

Changes in the fair value of derivatives, excluding insured derivatives, are recorded each period in current earnings within “Net gains (losses) on financial instruments at fair value and foreign exchange.” Changes in the fair value of insured derivatives are recorded each period in current earnings within “Net change in fair value of insured derivatives.” The net change in the fair value of the Company’s insured derivatives has two primary components: (i) realized gains (losses) and other settlements on insured derivatives and (ii) unrealized gains (losses) on insured derivatives. “Realized gains (losses) and other settlements on insured derivatives” include (i) premiums received and receivable on sold CDS contracts, (ii) premiums paid and payable to reinsurers in respect to CDS contracts, (iii) net amounts received or paid on reinsurance commutations, (iv) losses paid and payable to CDS contract counterparties due to the occurrence of a credit event or settlement agreement, (v) losses recovered and recoverable on purchased CDS contracts due to the occurrence of a credit event or settlement agreement and (vi) fees relating to CDS contracts. “Unrealized gains (losses) on insured derivatives” includes all other changes in fair value of the insured derivative contracts.

The Company has also entered into a derivative contract as a result of a commutation occurring in 2014. Changes in the fair value of the Company’s non-insured derivative are included in “Net gains (losses) on financial instruments at fair value and foreign exchange” on the Company’s consolidated statements of operations.

Variable Interest Entities

VIEs consolidated by the Company have entered into derivative instruments consisting of interest rate swaps, interest rate caps and cross currency swaps. Interest rate swaps and interest rate caps are entered into to mitigate the risks associated with fluctuations in interest rates or fair values of certain contracts.Cross currency swaps are entered into to manage the variability in cash flows resulting from fluctuations in foreign currency rates.

Corporate

The Company has entered into derivative instruments primarily consisting of interest rate swaps. Interest rate swaps are entered into to manage the risks associated with fluctuations in interest rates or fair values of certain contracts.

Changes in the fair value of these derivatives are recorded on the Company’s consolidated statements of operations within “Net gains (losses) on financial instruments at fair value and foreign exchange.”

Credit Derivatives Sold

The following tables present information about credit derivatives sold by the Company’s insurance operations that were outstanding as of September 30,2015 and December 31,2014. Credit ratings represent the lower of underlying ratings assigned to the collateral by Moody’s, S&P or MBIA.

$ in millions	As of September 30, 2015
		Notional Value
Credit Derivatives Sold	Weighted Average Remaining Expected Maturity		AAA		AA		A		BBB		Below Investment Grade		Total Notional		Fair Value Asset (Liability)
Insured credit default swaps	2.1 Years	$	2,018	$	-	$	304	$	-	$	996	$	3,318	$	(121)
Insured swaps	16.7 Years		-		111		2,739		957		21		3,828		(3)
Total notional		$	2,018	$	111	$	3,043	$	957	$	1,017	$	7,146
Total fair value		$	-	$	-	$	(3)	$	(2)	$	(119)			$	(124)

$ in millions	As of December 31, 2014
		Notional Value
Credit Derivatives Sold	Weighted Average Remaining Expected Maturity		AAA		AA		A		BBB		Below Investment Grade		Total Notional		Fair Value Asset (Liability)
Insured credit default swaps	1.6 Years	$	6,914	$	246	$	968	$	193	$	1,160	$	9,481	$	(244)
Insured swaps	16.7 Years		-		117		2,935		970		22		4,044		(2)
Total notional		$	6,914	$	363	$	3,903	$	1,163	$	1,182	$	13,525
Total fair value		$	(2)	$	-	$	(2)	$	(2)	$	(240)			$	(246)

Internal credit ratings assigned by MBIA on the underlying collateral are derived bythe Company’ssurveillance group.In assigning aninternal rating,currentstatusreportsfromissuersand trustees,aswell aspubliclyavailable transaction-specificinformation,are reviewed.Also,where appropriate,cash flowanalysesand collateralvaluationsare considered.Themaximumpotentialamountoffuturepayments(undiscounted)onCDScontractsareestimatedasthe notionalvalue plusanyadditional debtservicecosts,suchasinterestorotheramountsowing on CDScontracts.The maximumamountoffuture debt service paymentsthatMBIAmaybe required tomake undertheseguarantees as of September 30,2015is $3.5 billion.The maximumpotential amountoffuture payments(undiscounted)on insuredswapsare estimated asthe notionalvalue ofsuchcontracts.

MBIAmayhold recourse provisionswiththird partiesin derivativeinstrumentsthroughboth reinsuranceandsubrogation rights.MBIA’sreinsurance arrangementsprovidethatin the eventMBIApaysa claimundera guarantee ofa derivative contract,MBIAhasthe rightto collectamountsfromanyreinsurersthathave reinsuredthe guarantee on eithera proportional ornon-proportional basis,depending upon theunderlying reinsuranceagreement.MBIAmayalso have recourse throughsubrogation rightswherebyifMBIAmakesa claimpayment,itmay beentitled to anyrightsofthe insured counterparty,including the rightto anyassetsheld ascollateral.

Counterparty Credit Risk

The Company manages counterparty credit risk on an individual counterparty basis through master netting agreements covering derivative instruments in the corporate segment. These agreements allow the Company to contractually net amounts due from a counterparty with those amounts due to such counterparty when certain triggering events occur. The Company only executes swaps under master netting agreements, which typically contain mutual credit downgrade provisions that generally provide the ability to require assignment or termination in the event either MBIA or the counterparty is downgraded below a specified credit rating.

Under these agreements, the Company may receive or provide U.S. Treasury and other highly rated securities or cash to secure counterparties’ exposure to the Company or its exposure to counterparties, respectively. Such collateral is available to the holder to pay for replacing the counterparty in the event that the counterparty defaults. As of September 30,2015, the Company did not hold cash collateral to derivative counterparties but posted cash collateral to derivative counterparties of $80 million. Of this amount, $61 million is netted within “Derivative liabilities” and $19 million is included within “Other liabilities” as cash collateral netted against accrued interest on derivative liabilities. As of December 31,2014, the Company did not hold cash collateral to derivative counterparties but posted cash collateral to derivative counterparties of $12 million. All of the $12 million is included within “Other liabilities” as cash collateral netted against accrued interest on derivative liabilities. As of September 30,2015, the Company had securities with a fair value of $245 million posted to derivative counterparties and this amount is included within “Fixed-maturity securities held as available-for-sale, at fair value” on the Company’s consolidated balance sheet. As of December 31,2014, the Company had securities with a fair value of $198 million posted to derivative counterparties and this amount is included within “Fixed-maturity securities held as available-for-sale, at fair value” on the Company’s consolidated balance sheet.

As of September 30,2015 andDecember 31,2014, the fair value on one Credit Support Annex (“CSA”) was $3million and $2 million, respectively.This CSA governs collateral posting requirements between MBIA and its derivative counterparties. The Company did not receive collateral due to the Company’s credit rating, which was below the CSA minimum credit ratings level for holding counterparty collateral. As of September 30,2015 and December 31,2014, the counterparty was rated A2 by Moody’s and A by S&P.

Financial Statement Presentation

The fair value of amounts recognized for eligible derivative contracts executed with the same counterparty under a master netting agreement, including any cash collateral that may have been received or posted by the Company, is presented on a net basis in accordance with accounting guidance for the offsetting of fair value amounts related to derivative instruments. Insured CDS and insured swaps are not subject to master netting agreements. VIE derivative assets and liabilities are not presented net of any master netting agreements.Counterparty netting of derivative assets and liabilities offsets balances in “Interest rate swaps” as of September 30,2015 and December 31,2014.

As of September 30,2015, the total fair value of the Company’s derivative assets, after counterparty netting of $1 million, was $15 million, of which $9 million was reported within “Other assets” and “Derivative assets” presented under “Assets of consolidated variable interest entities” on the Company’s consolidated balance sheets. Embedded derivatives of $6 million were reported within “Medium-term notes” on the Company’s consolidated balance sheets.

As of September 30,2015, the total fair value of the Company’s derivative liabilities, after counterparty netting of$1 million and cash collateral posted by the company of $61 million, was $411million, of which $396 million was reported within “Derivative liabilities” and “Derivative liabilities” presented under “Liabilities of consolidated variable interest entities” on the Company’s consolidated balance sheets. Embedded derivatives of $15 million were reported within “Medium-term notes” on the Company’s consolidated balance sheets.

The following table presents the total fair value of the Company’s derivative assets and liabilities by instrument and balance sheet location, before counterparty netting and posting ofcash collateral, as of September 30,2015:

In millions				Derivative Assets (1)			Derivative Liabilities (1)
		Notional
		Amount			Fair			Fair
Derivative Instruments		Outstanding		Balance Sheet Location	Value		Balance Sheet Location	Value
Not designated as hedging instruments:
	Insured credit default swaps	$	3,318	Other assets	$	-	Derivative liabilities	$	(121)
	Insured swaps		3,828	Other assets		-	Derivative liabilities		(3)
	Interest rate swaps		1,155	Other assets		4	Derivative liabilities		(255)
	Interest rate swaps-VIE		903	Derivative assets-VIE		-	Derivative liabilities-VIE		(57)
	Interest rate swaps-embedded		406	Medium-term notes		6	Medium-term notes		(15)
	Currency swaps-VIE		81	Derivative assets-VIE		6	Derivative liabilities-VIE		-
	All other		83	Other assets		-	Derivative liabilities		(22)
	All other-VIE		241	Derivative assets-VIE		-	Derivative liabilities-VIE		-
	All other-embedded		12	Other investments		-	Other investments		-
Total non-designated derivatives		$	10,027		$	16		$	(473)
__________
(1) - In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determined
	by the location of the related host contract.

As of December 31,2014, the total fair value of the Company’s derivative assets, after counterparty netting of $81 million, was $10 million, of which $2 million was reported within “Other assets” on the Company’s consolidated balance sheets. Embedded derivatives of $8 million were reported within “Medium-term notes” on the Company’s consolidated balance sheets.

As of December 31,2014, the total fair value of the Company’s derivative liabilities, after counterparty netting of $81 million was $456million, ofwhich $437 million was reported within “Derivative liabilities” and “Derivative liabilities” presented under “Liabilities of consolidated variable interest entities” on the Company’s consolidated balance sheets. Embedded derivatives of $19 million were reported within “Medium-term notes” and “Other investments” on the Company’s consolidated balance sheets.

The following table presents the total fair value of the Company’s derivative assets and liabilities by instrument and balance sheet location, before counterparty netting and posting of cash collateral, as of December 31,2014:

In millions				Derivative Assets (1)			Derivative Liabilities (1)
			Notional
			Amount		Fair			Fair
Derivative Instruments			Outstanding	Balance Sheet Location	Value		Balance Sheet Location	Value
Not designated as hedging instruments:
	Insured credit default swaps	$	9,481	Other assets	$	-	Derivative liabilities	$	(244)
	Insured swaps		4,044	Other assets		-	Derivative liabilities		(2)
	Interest rate swaps		1,450	Other assets		83	Derivative liabilities		(248)
	Interest rate swaps-embedded		437	Medium-term notes		8	Medium-term notes		(19)
	Currency swaps-VIE		91	Derivative assets-VIE		-	Derivative liabilities-VIE		-
	All other		83	Other assets		-	Derivative liabilities		(24)
	All other-VIE		241	Derivative assets-VIE		-	Derivative liabilities-VIE		-
	All other-embedded		12	Other investments		-	Other investments		-
Total non-designated derivatives		$	15,839		$	91		$	(537)
__________
(1) - In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determined
	by the location of the related host contract.

Thefollowing tablepresentsthe effectofderivativeinstrumentson the consolidated statementsofoperationsforthe three months endedSeptember 30,2015:

In millions
		Net Gain
		(Loss)
Derivatives Not Designated as		Recognized
Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	21
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(18)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(45)
Interest rate swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		8
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		4
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		(1)
Total		$	(31)

Thefollowing tablepresentsthe effectofderivativeinstrumentson the consolidated statementsofoperationsforthe three months endedSeptember 30,2014:

In millions
		Net Gain
		(Loss)
Derivatives Not Designated as		Recognized
Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	48
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(24)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(7)
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		4
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		(5)
Total		$	16

Thefollowing tablepresentsthe effectofderivativeinstrumentson the consolidated statementsofoperationsforthe nine months endedSeptember 30,2015:

In millions		Net Gain
		(Loss)
Derivatives Not Designated as		Recognized
Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	121
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(30)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(112)
Interest rate swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		18
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		5
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		2
Total		$	4

Thefollowing tablepresentsthe effectofderivativeinstrumentson the consolidated statementsofoperationsforthe nine months endedSeptember 30,2014:

In millions		Net Gain
		(Loss)
Derivatives Not Designated as		Recognized
Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	in Income
Insured credit default swaps	Unrealized gains (losses) on insured derivatives	$	848
Insured credit default swaps	Realized gains (losses) and other settlements on insured derivatives		(387)
Interest rate swaps	Net gains (losses) on financial instruments at fair value and foreign exchange		(52)
Currency swaps-VIE	Net gains (losses) on financial instruments at fair value and foreign exchange-VIE		4
All other	Unrealized gains (losses) on insured derivatives		15
All other	Net gains (losses) on financial instruments at fair value and foreign exchange		(8)
All other	Realized gains (losses) and other settlements on insured derivatives		(30)
Total		$	390

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 29, 2015
Document Documentand Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Trading Symbol	MBI
Entity Registrant Name	MBIA INC
Entity Central Index Key	0000814585
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		152,955,415
Entity Current Reporting Status	Yes

XML

Income Taxes

3 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Income Taxes

Note 9: Income Taxes

The Company’sincome taxesandtherelatedeffective taxratesforthe three and nine months endedSeptember 30,2015and2014are asfollows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Income (loss) before income taxes	$	(55)	$	148	$	150	$	607
Provision (benefit) for income taxes	$	(20)	$	(25)	$	52	$	58
Effective tax rate		36.4%		-16.9%		34.7%		9.6%

For the nine months ended September 30,2015, the Company’s effective tax rate applied to its income before income taxes approximates the U.S. statutory tax rate.For the nine months ended September 30,2014, the Company’s effective tax rate applied to its income before income taxes was lowerthan the U.S. statutory tax rate primarily as a result of the decrease in the valuation allowance against its deferred tax asset.

The Company's 2014 and 2015 provision for income taxes for interim financial periods is not based on an estimated annual effective rate due to thevariability in fair value of its derivative liabilities, which prevents the Company from projecting a reliable estimated annual effective tax rate and income before taxes for either year.A discrete calculation of the provision is performedfor each interim period.

Deferred Tax Asset, Net of Valuation Allowance

The Company establishes a valuation allowance against its deferred tax asset when it is more likely than not that all or a portion of the deferred tax asset will not be realized. All evidence, both positive and negative, needs to be identified and considered in making the determination. Future realization of the existing deferred tax asset ultimately depends, in part, on the generation of sufficient taxable income of appropriate character (for example, ordinary income versus capital gains) within the carryforward period available under the tax law.

As of September 30,2015 and December 31, 2014, the Company’s net deferred tax asset was approximately $1.0 billion, with no valuation allowance as a result of a tax planning strategy to use unrealized gains that are included in “Accumulated other comprehensive income (loss)” on the Company’s consolidated balance sheets against the deferred tax asset related to any remaining asset impairments.

In accordance with accounting guidance for income taxes, the netting of deferred taxes between different taxpaying jurisdictions is not permitted. As of September 30,2015, there was also a non U.S. deferred tax liability of $29 million included in “Other liabilities” on the Company’s consolidated balance sheet.

Tax Sharing Agreement

The Company has a tax sharing agreement among its members effective January 1, 1987. The agreement was amended and restated effective September 8, 2011 to change the method of calculating each domestic insurer’s tax liability to the method permitted by paragraph 3(a) of Department Circular Letter #33 (1979). The agreement was submitted to the NYSDFS for review and non-disapproval pursuant to Section 1505 of the New York Insurance Law.The Company’s tax sharing agreement is filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for informational purposes only. Refer to “Note 2: Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for further discussion on the Company’s tax sharing agreement.

AccountingforUncertaintyinIncomeTaxes

The Company’spolicyis torecordanddiscloseanychange inunrecognized tax benefit (“UTB”)andrelatedinterestand/orpenalties toincometaxintheconsolidatedstatementsofoperations. The Company includes interest as a component of income tax expense. As of September 30,2015 and December 31,2014, the Company had no UTB outstanding.

MBIA and its U.S. subsidiaries file a U.S. consolidated federal income tax return. Federal income tax returns through 2011 have been examined or surveyed.

The tax authorities in the United Kingdomhave been auditing MBIA UK for tax years 2005 through 2012. In April of 2015, MBIA UK received correspondence from the HM Revenue & Customs closing the audit for the years under examination with no change in taxable income.

As of September 30,2015, the Company’s net operating loss (“NOL”) is approximately $3.0 billion.The NOL will expire between tax years 2029 through 2034. As of September 30,2015, the Company has an alternative minimum tax credit carryforward of $22 million, which does not expire.

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Consolidated Statements Of Operations - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Change in fair value of insured derivatives:
Unrealized gains (losses) on insured derivatives			$ 121	$ 863
Net change in fair value of insured derivatives	$ 3	$ 24	91	446
Net gains (losses) on financial instruments at fair value and foreign exchange	(55)	57	20	63
Investment losses related to other-than-temporary impairments:
Net investment losses related to other-than-temporary impairments	(3)	(14)	(10)	(14)
Net gains (losses) on extinguishment of debt	0		(1)	3
Other net realized gains (losses)	(1)	30	18	31
Total revenues	92	291	556	1,055
Expenses:
Losses and loss adjustment	39	20	79	82
Interest	49	52	149	158
Total expenses	147	143	406	448
Income (loss) before income taxes	(55)	148	150	607
Provision (benefit) for income taxes	(20)	(25)	52	58
Net income (loss)	$ (35)	$ 173	$ 98	$ 549
Net income (loss) per common share:
Net income (loss) per basic common share	$ (0.23)	$ 0.9	$ 0.56	$ 2.83
Net income (loss) per diluted common share	$ (0.23)	$ 0.8	$ 0.55	$ 2.62
Weighted average number of common shares outstanding:
Basic	155,239,723	187,104,785	169,610,370	188,428,870
Diluted	155,239,723	188,424,318	170,566,386	191,616,723
Non Variable Interest Entity [Member]
Premiums earned:
Scheduled premiums earned	$ 47	$ 64	$ 153	$ 196
Refunding premiums earned	37	52	123	97
Premiums earned (net of ceded premiums of $2, $4, $7 and $8)	84	116	276	293
Net investment income	38	44	112	136
Fees and reimbursements	1	17	4	25
Change in fair value of insured derivatives:
Realized gains (losses) and other settlements on insured derivatives	(18)	(24)	(30)	(417)
Unrealized gains (losses) on insured derivatives	21	48	121	863
Net change in fair value of insured derivatives	3	24	91	446
Net gains (losses) on financial instruments at fair value and foreign exchange	(55)	57	20	63
Investment losses related to other-than-temporary impairments:
Investment losses related to other-than-temporary impairments	(1)	(93)	(10)	(93)
Other-than-temporary impairments recognized in accumulated other comprehensive income (loss)	(2)	79	0	79
Net investment losses related to other-than-temporary impairments	(3)	(14)	(10)	(14)
Net gains (losses) on extinguishment of debt	0	0	(1)	3
Other net realized gains (losses)	(1)	30	18	31
Expenses:
Losses and loss adjustment	39	20	79	82
Amortization of deferred acquisition costs	11	13	37	31
Operating	35	46	102	141
Interest	49	52	149	158
Variable Interest Entity Primary Beneficiary [Member]
Premiums earned:
Net investment income	12	12	37	37
Change in fair value of insured derivatives:
Net gains (losses) on financial instruments at fair value and foreign exchange	13	8	9	34
Investment losses related to other-than-temporary impairments:
Net gains (losses) on extinguishment of debt	0	0	0	4
Other net realized gains (losses)	0	(3)	0	(3)
Expenses:
Operating	3	2	10	6
Interest	$ 10	$ 10	$ 29	$ 30

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Recent Accounting Pronouncements

Note 3: Recent Accounting Pronouncements

Recently Adopted Accounting Standards

Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360):Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08)

In April of 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU 2014-08 changes the criteria for determining whether a disposal of a component or group of components of an entity qualifies for discontinued operations presentation and requires new disclosures. ASU 2014-08 amends the definition of discontinued operation to a disposal of components of an entity that represent strategic shifts that have, or will have, a major effect on an entity’s operations and financial results. ASU 2014-08 was effective for interim and annual periods beginning January 1, 2015. The adoption of ASU 2014-08 did not affect the Company’s consolidated financial statements.

Transfers and Servicing (Topic 860):Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (ASU 2014-11)

In June of 2014, the FASB issued ASU 2014-11, “Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.” The repurchase agreements and similar transactions guidance is amended by ASU 2014-11 to change the accounting for i.) repurchase-to-maturity transactions to secured borrowing accounting and ii.) linked repurchase financing transactions to secured borrowing accounting. ASU 2014-11 amends disclosure requirements for transfers accounted for as sales, and for repurchase transactions accounted for as secured borrowings. ASU 2014-11 was effective for interim and annual periods beginning January 1, 2015. The adoption of ASU 2014-11 did not affect the Company’s consolidated financial statements.

Consolidation (Topic 810):Amendments to the Consolidation Analysis (ASU 2015-02)

In February of 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810):Amendments to the Consolidation Analysis.” ASU 2015-02 amends the accounting guidance for consolidation of legal entities including consolidated variable interest entities (“VIEs”). ASU 2015-02 eliminates the specialized consolidation model and guidance for limited partnerships, amends the conditions for evaluating whether a fee paid to a decision maker or a service provider represents a variable interest in a VIE, amends the related party guidance for the determination of the primary beneficiary of a VIE, and requires certain investment funds designed as VIEs, except money market funds, to apply the amended consolidation guidance. ASU 2015-02 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted, and is applied on a retrospective or modified retrospective basis. The Company adopted ASU 2015-02 in the second quarter of 2015, and deconsolidated a VIE upon adoption. The adoption of ASU 2015-02 did not materially impact the Company’s consolidated financial statements.

The Company has not adopted any other new accounting pronouncements that had a material impact on its consolidated financial statements.

Recent Accounting Developments

Revenue from Contracts with Customers (Topic 606) (ASU 2014-09) and Deferral of the Effective Date(ASU 2015-14)

In May of 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 amends the accounting guidance for recognizing revenue for the transfer of goods or services from contracts with customers unless those contracts are within the scope of other accounting standards. In August of 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606)— Deferral of the Effective Date.”ASU 2015-14 defers the effective date of ASU 2014-09 to interim and annual periods beginning January 1, 2018, and is applied on a retrospective or modified retrospective basis. The Company is evaluating the impact of adopting ASU 2014-09.

Compensation-Stock Compensation (Topic 718):Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (A Consensus of the FASB Emerging Issues Task Force) (ASU 2014-12)

In June of 2014, the FASB issued ASU 2014-12, “Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” ASU 2014-12 requires that a performance target that affects vesting of share-based payment awards and that could be achieved after an employee’s requisite service period be accounted for as a performance condition. ASU 2014-12 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted, and is applied on a prospective basis or retrospective basis. The adoption of ASU 2014-12 is not expected to materially impact the Company’s consolidated financial statements.

Consolidation (Topic 810):Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (ASU 2014-13)

In August of 2014, the FASB issued ASU 2014-13, “Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity.”ASU 2014-13 applies to a consolidated collateralized financing entity defined as a consolidated VIE that holds financial assets and issues beneficial interests in those financial assets that are classified as financial liabilities. The Company may elect to measure the financial assets and the financial liabilities of a consolidated collateralized financing entity using a measurement alternative provided in ASU 2014-13. The measurement alternative requires both the financial assets and the financial liabilities of the consolidated collateralized financing entity to be measured using the more observable of the fair value of the financial assets and the fair value of the financial liabilities with the changes in fair value recognized to earnings. Upon adoption, a reporting entity may apply the measurement alternative to existing consolidated collateralized financing entities. ASU 2014-13 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted. The adoption of ASU 2014-13 is not expected to materially impact the Company’s consolidated financial statements.

Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern(ASU 2014-15)

In August of 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ending December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The adoption of ASU 2014-15 is not expected to materially impact the Company’s consolidated financial statements.

Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03)

In April of 2015, the FASB issued ASU 2015-03, “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires debt issuance costs related to a debt liability measured at amortized cost to be reported in the balance sheet as a direct deduction from the face amount of the debt liability. ASU 2015-03 is effective for interim and annual periods beginning January 1, 2016 with early adoption permitted, and is applied on a retrospective basis. The adoption of ASU 2015-03 is not expected to materially impact the Company’s consolidated financial statements.

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Significant Accounting Policies

Note 2: Significant Accounting Policies

The Company has disclosed its significant accounting policies in “Note 2: Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31,2014. The following significant accounting policies provide an update to those included in the Company’s Annual Report on Form 10-K.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual periods. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31,2014. The accompanying consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (U.S.), but in the opinion of management such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company’s consolidated financial position and results of operations. All material intercompany balances and transactions have been eliminated.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. As additional information becomes available or actual amounts become determinable, the recorded estimates are revised and reflected in operating results.

The results of operations for the three and nine months endedSeptember 30,2015 may not be indicative of the results that may be expected for the year ending December 31,2015. The December 31,2014 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP for annual periods. Certain amounts have been reclassified in the prior year’s financial statements to conform to the current presentation. Such reclassifications had no impact on total revenues, expenses, assets, liabilities, shareholders’ equity, operating cash flows, investing cash flows, or financing cash flows for all periods presented.

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Subsequent Events

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Subsequent Events

Note 14: Subsequent Events

Referto “Note 13: Commitments and Contingencies”forinformationaboutlegal proceedingsthatoccurred after September 30,2015.

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Business Segments

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Business Segments

Note 10: Business Segments

As defined by segment reporting, an operating segment is a component of a company (i) that engages in business activities from which it earns revenue and incurs expenses, (ii) whose operating results are regularly reviewed by the Chief Operating Decision Maker to assess the performance of the segment and to make decisions about the allocation of resources to the segment and, (iii) for which discrete financial information is available.

The Company manages its businesses across three operating segments: 1) U.S. public finance insurance; 2) international and structured finance insurance; and 3) corporate. The Company’s U.S. public finance insurance business is operated through National and its international and structured finance insurance business is operated through MBIA Corp. Prior to 2015, the Company managed two other operating segments, advisory services and conduit. During 2014, the Company dissolved its conduit segment by extinguishing the remaining liabilities of the segment and liquidating the Company’s remaining conduit, Meridian,and effective January 1, 2015, the Company exited its advisory services business with the completed sale of Cutwater to a subsidiary of The Bank of New York Mellon Corporation.

The following sections provide a description of each of the Company’s reportable operating segments.

U.S. Public Finance Insurance

The Company’s U.S. public finance insurance segment is principally conducted through National. The financial guarantees issued by National provide unconditional and irrevocable guarantees of the payment of the principal of, and interest or other amounts owing on, U.S. public finance insured obligations when due. The obligations are not subject to acceleration, except that National may have the right, at its discretion, to accelerate insured obligations upon default or otherwise. National issues financial guarantees for municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, student loan issuers, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. Municipal bonds and privately issued bonds used for the financing of public purpose projects are generally supported by taxes, assessments, fees or tariffs related to the use of these projects, lease payments or other similar types of revenue streams.

International and Structured Finance Insurance

The Company’s international and structured finance insurance segment is principally conducted through MBIA Corp. The financial guarantees issued by MBIA Corp. generally provide unconditional and irrevocable guarantees of the payment of principal of, and interest or other amounts owing on, non-U.S. public finance and global structured finance insured obligations when due, or in the event MBIA Corp. has the right, at its discretion, to accelerate insured obligations upon default or otherwise, upon MBIA Corp.’s acceleration. Certain guaranteed investment contracts written by MBIA Inc. are insured by MBIA Corp., and if MBIA Inc. were to have insufficient assets to pay amounts due upon maturity or termination, MBIA Corp. would make such payments. MBIA Corp. also insures debt obligations of the following affiliates:

• MBIA Inc.;
• MBIA Global Funding, LLC (“GFL”);
• MBIA Investment Management Corp. (“IMC”); and
• LaCrosse Financial Products, LLC, a wholly-owned affiliate, in which MBIA Corp. has written insurance policies guaranteeing the obligations under CDS, including termination payments that may become due upon certain events including the insolvency or payment default of the financial guarantor or the CDS issuer.

MBIA Corp. insures non-U.S. public finance and global structured finance insured obligations, including asset-backed obligations. MBIA Corp. has insured sovereign-related and sub-sovereign bonds, utilities, privately issued bonds used for the financing of projects that include toll roads, bridges, airports, public transportation facilities, and other types of infrastructure projects serving a substantial public purpose. Global structured finance and asset-backed obligations typically are securities repayable from expected cash flows generated by a specified pool of assets, such as residential and commercial mortgages, insurance policies, consumer loans, corporate loans and bonds, trade and export receivables, and leases for equipment, aircraft and real estate property. MBIA Corp. has also written policies guaranteeing obligations under certain other derivative contracts, including termination payments that may become due upon certain insolvency or payment defaults of the financial guarantor or the issuer. The Company is no longer insuring new credit derivative contracts except for transactions related to the restructuring or reduction of existing derivative exposure. MBIA Corp. has not written any meaningful amount of business since 2008.

Corporate

The Company’s corporate segment consists of general corporate activities, including providing general support services to MBIA’s other operating businesses and assetand capital management. General support services are provided by the Company’s service company, MBIA Services Corporation (“MBIA Services”).MBIA Services provides various support services including, among others, management, legal, accounting, treasury, information technology, and insurance portfolio surveillance, on a fee-for-service basis. Capital management includes activities related to servicing obligations issued by MBIA Inc. and its subsidiaries, GFL and IMC. MBIA Inc. issued debt to finance the operations of the MBIA group. It also provided customized products for funds that are invested as part of asset-backed or structured product transactions. GFL raised funds through the issuance of MTNs with varying maturities, which were in turn guaranteed by MBIA Corp. GFL lent the proceeds of these MTN issuances to MBIA Inc. IMC, along with MBIA Inc., provided customized investment agreements, guaranteed by MBIA Corp., for bond proceeds and other public funds for such purposes as construction, loan origination, escrow and debt service or other reserve fund requirements. The company ceased issuing these MTNs and investment agreements and the outstanding liability balances and corresponding asset balances have declined over time as liabilities mature, terminate or are retired. All of the debt within the corporate segment is managed collectively and is serviced by the financial resources available to MBIA Inc. Asset management activities provide for opportunities in investments and provide general liquidity support to MBIA Inc.

Advisory Services

The advisory services segment primarily consisted of the operations of Cutwater Investor Services Corp. and Cutwater Asset Management Corp. and was a fee-for-service investment management business focused on fixed-income markets. Effective with the January 1, 2015 sale of Cutwater, MBIA has no business activities within its advisory services segment.

Conduit

The Company’s conduit segment was operated through Meridian and administered through MBIA Asset Finance, LLC. Assets financed by Meridian were funded by MTNs. In 2014, the Company extinguished the remaining liabilities of this segment and liquidated Meridian.

Segments Results

The following tables provide the Company’s segment results for the three months endedSeptember 30,2015 and 2014:

			Three Months Ended September 30, 2015
			U.S.				International
			Public				and Structured
			Finance				Finance
In millions			Insurance		Corporate		Insurance		Eliminations			Consolidated
Revenues(1)			$	90	$	5	$	28	$	-		$	123
Net change in fair value of insured derivatives				-		-		3		-			3
Net gains (losses) on financial instruments at fair value and
	foreign exchange			1		(45)		(11)		-			(55)
Net investment losses related to other-than-temporary impairments				(3)		-		-		-			(3)
Other net realized gains (losses)				-		(1)		-		-			(1)
Revenues of consolidated VIEs				-		-		25		-			25
Inter-segment revenues(2)				8		16		15		(39)			-
		Total revenues		96		(25)		60		(39)			92
Losses and loss adjustment				(7)		-		46		-			39
Operating				11		18		17		-			46
Interest				-		24		25		-			49
Expenses of consolidated VIEs				-		-		13		-			13
Inter-segment expenses(2)				21		1		17		(39)			-
		Total expenses		25		43		118		(39)			147
Income (loss) before income taxes				71		(68)		(58)		-			(55)
Provision (benefit) for income taxes				25		(25)		(20)		-			(20)
Net income (loss)			$	46	$	(43)	$	(38)	$	-		$	(35)
Identifiable assets			$	5,432	$	2,514	$	10,084	$	(2,979)	(3)	$	15,051
________________
(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees.
(2) - Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables.
(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

			Three Months Ended September 30, 2014
			U.S.				International
			Public				and Structured
			Finance				Finance		Advisory
In millions			Insurance		Corporate		Insurance		Services		Eliminations			Consolidated
Revenues(1)			$	100	$	7	$	67	$	3	$	-		$	177
Net change in fair value of
	insured derivatives			-		-		24		-		-			24
Net gains (losses) on financial
	instruments at fair value and
	foreign exchange			2		68		(13)		-		-			57
Net investment losses related
	to other-than-temporary
	impairments			(14)		-		-		-		-			(14)
Net gains (losses) on
Other net realized gains (losses)				18		1		11		-		-			30
Revenues of consolidated VIEs				-		-		21		(4)		-			17
Inter-segment revenues(2)				7		12		12		5		(36)			-
		Total revenues		113		88		122		4		(36)			291
Losses and loss adjustment				(8)		-		28		-		-			20
Operating				9		25		17		8		-			59
Interest				-		26		26		-		-			52
Expenses of consolidated VIEs				-		-		12		-		-			12
Inter-segment expenses(2)				18		-		16		2		(36)			-
		Total expenses		19		51		99		10		(36)			143
Income (loss) before income taxes				94		37		23		(6)		-			148
Provision (benefit) for income taxes				38		(70)		9		(2)		-			(25)
Net income (loss)			$	56	$	107	$	14	$	(4)	$	-		$	173
Identifiable assets			$	6,132	$	2,735	$	10,373	$	481	$	(3,520)	(3)	$	16,201
________________
(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.
(2) - Represents intercompany premium income and expense, intercompany asset management fees and expenses and intercompany interest income and expense pertaining to intercompany
receivables and payables.
(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

Thefollowing tablesprovide theCompany’s segment resultsforthe nine months endedSeptember 30,2015and 2014:

			Nine Months Ended September 30, 2015
			U.S.				International
			Public				and Structured
			Finance				Finance
In millions			Insurance		Corporate		Insurance		Eliminations			Consolidated
Revenues(1)			$	288	$	18	$	86	$	-		$	392
Net change in fair value of insured derivatives				-		-		91		-			91
Net gains (losses) on financial instruments at fair value and
	foreign exchange			4		35		(19)		-			20
Net investment losses related to other-than-temporary impairments				(9)		(1)		-		-			(10)
Net gains (losses) on extinguishment of debt				-		(1)		-		-			(1)
Other net realized gains (losses)				(4)		22		-		-			18
Revenues of consolidated VIEs				-		-		46		-			46
Inter-segment revenues(2)				26		53		48		(127)			-
		Total revenues		305		126		252		(127)			556
Losses and loss adjustment				(5)		-		84		-			79
Operating				29		56		54		-			139
Interest				-		73		76		-			149
Expenses of consolidated VIEs				-		-		39		-			39
Inter-segment expenses(2)				67		3		50		(120)			-
		Total expenses		91		132		303		(120)			406
Income (loss) before income taxes				214		(6)		(51)		(7)			150
Provision (benefit) for income taxes				74		-		(19)		(3)			52
Net income (loss)			$	140	$	(6)	$	(32)	$	(4)		$	98
Identifiable assets			$	5,432	$	2,514	$	10,084	$	(2,979)	(3)	$	15,051
________________
(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees.
(2) - Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables.
(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

			Nine Months Ended September 30, 2014
			U.S.				International
			Public				and Structured
			Finance				Finance		Advisory
In millions			Insurance		Corporate		Insurance		Services		Conduit		Eliminations			Consolidated
Revenues(1)			$	272	$	30	$	142	$	10	$	-	$	-		$	454
Net change in fair value of
	insured derivatives			1		-		445		-		-		-			446
Net gains (losses) on financial
	instruments at fair value and
	foreign exchange			21		56		(11)		(3)		-		-			63
Net investment losses related
	to other-than-temporary
	impairments			(14)		-		-		-		-		-			(14)
Net gains (losses) on
	extinguishment of debt			-		3		-		-		-		-			3
Other net realized gains (losses)				18		2		11		-		-		-			31
Revenues of consolidated VIEs				-		-		72		(4)		4		-			72
Inter-segment revenues(2)				30		38		36		17		(1)		(120)			-
		Total revenues		328		129		695		20		3		(120)			1,055
Losses and loss adjustment				(5)		-		87		-		-		-			82
Operating				29		64		49		30		-		-			172
Interest				-		78		80		-		-		-			158
Expenses of consolidated VIEs				-		-		36		-		-		-			36
Inter-segment expenses(2)				56		7		51		5		9		(128)			-
		Total expenses		80		149		303		35		9		(128)			448
Income (loss) before income taxes				248		(20)		392		(15)		(6)		8			607
Provision (benefit) for income taxes				90		(167)		137		(3)		(2)		3			58
Net income (loss)			$	158	$	147	$	255	$	(12)	$	(4)	$	5		$	549
Identifiable assets			$	6,132	$	2,735	$	10,373	$	481	$	-	$	(3,520)	(3)	$	16,201
________________
(1) - Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.
(2) - Represents intercompany premium income and expense, intercompany asset management fees and expenses and intercompany interest income and expense pertaining to intercompany
receivables and payables.
(3) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.

Premiumson financial guaranteesandinsured derivativesreported within theCompany’sinsurance segmentsare generated within andoutside the U.S.The following table summarizespremiumsearned on financial guaranteesand insured derivativesbygeographiclocationofrisk forthe three and nine months endedSeptember 30,2015 and 2014:

		Three Months Ended September 30,				Nine Months Ended September 30,
In millions			2015		2014		2015		2014
Total premiums earned:
	United States	$	71	$	78	$	232	$	216
	United Kingdom		8		9		23		28
	Europe (excluding United Kingdom)		2		2		4		6
	Internationally diversified		1		4		3		7
	Central and South America		7		26		20		42
	Asia		-		1		2		3
	Other		1		2		4		6
Total		$	90	$	122	$	288	$	308

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Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Fair Value Measurement

Note 6: Fair Value of Financial Instruments

Fair Value Measurement

Fair value is a market-based measurement considered from the perspective of a market participant. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those which it believes market participants would use in pricing an asset or liability at the measurement date. The fair value measurement of financial instruments held or issued by the Company are determined through the use of observable market data when available. Market data is obtained from a variety of third-party sources, including dealer quotes. If dealer quotes are not available for an instrument that is infrequently traded, the Company uses alternate valuation methods, including either dealer quotes for similar instruments or modeling using market data inputs. The use of alternate valuation methods generally requires considerable judgment in the application of estimates and assumptions and changes to such estimates and assumptions may produce materially different fair values.

The accounting guidance for fair value measurement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available and reliable. Observable inputs are those the Company believes that market participants would use in pricing an asset or liability based on available market data. Unobservable inputs are those that reflect the Company’s beliefs about the assumptions market participants would use in pricing an asset or liability based on available information. The fair value hierarchy is categorized into three levels based on the observability and reliability of inputs, as follows:

• Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company can access. Valuations are based on quoted prices that are readily and regularly available in an active market, with significant trading volumes.
• Level 2—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 2 assets include debt securities with quoted prices that are traded less frequently than exchange-traded instruments, securities which are priced using observable inputs and derivative contracts whose values are determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.
• Level 3—Valuations based on inputs that are unobservable and supported by little or no market activity and that are significant to the overall fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques where significant inputs are unobservable, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The availability of observable inputs can vary from financial instrument to financial instrument and period to period and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, and other characteristics particular to the product. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company assigns the level in the fair value hierarchy for which the fair value measurement in its entirety falls, based on the least observable input that is significant to the fair value measurement.

Financial Assets (excluding derivative assets)

Financial assets, excluding derivative assets, held by the Company primarily consist of investments in debt securities. Substantially all of the Company’s investments are priced by independent third parties, including pricing services and brokers. Typically, the Company receives one pricing service value or broker quote for each instrument, which represents a non-binding indication of value. The Company reviews the assumptions, inputs and methodologies used by pricing services and brokers to obtain reasonable assurance that the prices used in its valuations reflect fair value. When the Company believes a third-party quotation differs significantly from its internally developed expectation of fair value, whether higher or lower, the Company reviews its data or assumptions with the provider. This review includes comparing significant assumptions such as prepayment speeds, default ratios, forward yield curves, credit spreads and other significant quantitative inputs to internal assumptions, and working with the price provider to reconcile the differences. The price provider may subsequently provide an updated price. In the event that the price provider does not update its price, and the Company still does not agree with the price provided, the Company will obtain a price from another third-party provider or use an internally developed price which it believes represents the fair value of the investment. The fair values of investments for which internal prices were used were not significant to the aggregate fair value of the Company’s investment portfolio as of September 30,2015 orDecember 31,2014. All challenges to third-party prices are reviewed by staff of the Company with relevant expertise to ensure reasonableness of assumptions.

Financial Liabilities (excluding derivative liabilities)

Financial liabilities, excluding derivative liabilities, issued by the Company primarily consist of debt issued for general corporate purposes within its corporate segment, medium-term notes (“MTNs”), investment agreements, debt issued by consolidated VIEs and warrants. Investment agreements, MTNs, and corporate debt are typically recorded at face value adjusted for premiums or discounts. The majority of the financial liabilities that the Company has elected to fair value or that require fair value reporting or disclosures are valued based on the estimated value of the underlying collateral, the Company’s or a third-party’s estimate of discounted cash flow model estimates, or quoted market values for similar products. These valuations include adjustments for expected nonperformance risk of the Company.

Derivative Liabilities

The Company’s derivative liabilities are primarily insured credit derivatives that reference structured pools of cash securities and CDS. The Company generally insured the most senior liabilities of such transactions, and at the inception of transactions its exposure generally had more subordination than needed to achieve triple-A ratings from credit rating agencies. The types of collateral underlying its insured derivatives consist of cash securities and CDS referencing primarily corporate obligations, asset-backed securities (“ABS”), RMBS, commercial mortgage-backed securities (“CMBS”), commercial real estate (“CRE”) loans, and CDOs.

The Company’s insured credit derivative contracts are non-traded structured credit derivative transactions. Since insured derivatives are highly customized and there is generally no observable market for these derivatives, the Company estimates their fair values in a hypothetical market based on internal and third-party models simulating what a similar company would charge to assume the Company’s position in the transaction at the measurement date. This pricing would be based on the expected loss of the exposure. The Company reviews its valuation model results on a quarterly basis to assess the appropriateness of the assumptions and results in light of current market activity and conditions. This review is performed by internal staff with relevant expertise. If live market spreads or securities prices are observable for similar transactions, those spreads are an integral part of the analysis. New insured transactions that resemble existing (previously insured) transactions, if any, would be considered, as well as negotiated settlements of existing transactions.

The Company may from time to time make changes in its valuation techniques if the change results in a measurement that it believes is equally or more representative of fair value under current circumstances.

Internal Review Process

All significant financial assets and liabilities are reviewed by a committee created by the Company to ensure compliance with the Company’s policies and risk procedures in the development of fair values of financial assets and liabilities. This valuation committee reviews, among other things, key assumptions used for internally developed prices, significant changes in sources and uses of inputs, including changes in model approaches, and any adjustments from third-party inputs or prices to internally developed inputs or prices. The committee also reviews any significant impairment or improvements in fair values of the financial instruments from prior periods. Occasionally, the committee will consult with the Company’s valuation experts to better understand key methods and assumptions used for the determination of fair value, including understanding significant changes in fair values. The committee is comprised of senior finance team members with relevant experience in the financial instruments their committee is responsible for. For each quarter, the committee documents their agreement with the fair values developed by management of the Company as reported in the quarterly and annual financial statements.

Valuation Techniques

Valuation techniques for financial instruments measured at fair value or disclosed at fair value are described below.

Fixed-Maturity Securities (including short-term investments) Held as Available-For-Sale, Investments Carried at Fair Value, Investments Pledged as Collateral, Investments Held-to-Maturity, and Other Investments

These investments include investments in U.S. Treasury and government agencies, state and municipal bonds, foreign governments, corporate obligations, mortgage-backed securities (“MBS”), ABS, money market securities, and perpetual debt and equity securities.

These investments are generally valued based on recently executed transaction prices or quoted market prices. When quoted market prices are not available, fair value is generally determined using quoted prices of similar investments or a valuation model based on observable and unobservable inputs. Inputs vary depending on the type of investment. Observable inputs include contractual cash flows, interest rate yield curves, CDS spreads, prepayment and volatility scores, diversity scores, cross-currency basis index spreads, and credit spreads for structures similar to the financial instrument in terms of issuer, maturity and seniority. Unobservable inputs include cash flow projections and the value of any credit enhancement.

The fair value of the held-to-maturity (“HTM”) investments is determined using discounted cash flow models. Key inputs include unobservable cash flows projected over the expected term of the investment discounted using observable interest rate yield curves of similar securities.

Investments based on quoted market prices of identical investments in active markets are classified as Level 1 of the fair value hierarchy. Level 1 investments generally consist of U.S. Treasury and government agency, foreign government, money market securities and perpetual debt and equity securities. Quoted market prices of investments in less active markets, as well as investments which are valued based on other than quoted prices for which the inputs are observable, such as interest rate yield curves, are categorized in Level 2 of the fair value hierarchy. Investments that contain significant inputs that are not observable are categorized as Level 3.

Cash and Cash Equivalents, Receivable for Investments Sold, Securities Sold Not Yet Purchased, Payable for Investments Purchased, and Accrued Investment Income

The carrying amounts of cash and cash equivalents, receivable for investments sold, securities sold, not yet purchased, payable for investments purchased, and accrued investment income approximate fair values due to the short-term nature and credit worthiness of these instruments. These items are categorized in Level 1 or Level 2 of the fair value hierarchy.

Loans Receivable at Fair Value

Loans receivable at fair value are comprised of loans held by consolidated VIEs consisting of corporate and residential mortgage loans. Fair values of commercial loans are obtained from a pricing service and determined using actively quoted prices obtained from multiple market participants. Fair values of residential mortgage loans are determined using quoted prices for MBS issued by the respective VIE and adjusted for the fair values of the financial guarantees provided by MBIA Corp. on the related MBS. Loans receivable at fair value are categorized in Level 2 or Level 3 of the fair value hierarchy based on the input that is significant to the fair value measurement in its entirety.

Loan Repurchase Commitments

Loan repurchase commitments are obligations owed by the sellers/servicers of mortgage loans to either MBIA as reimbursement of paid claims or to the RMBS trusts as defined in the transaction documents. Loan repurchase commitments are assets of the consolidated VIEs. This asset represents the rights of MBIA against the sellers/servicers for breaches of representations and warranties that the securitized residential mortgage loans sold to the trust to comply with stated underwriting guidelines and for the sellers/servicers to cure, replace, or repurchase mortgage loans. Fair value measurements of loan repurchase commitments represent the amounts owed by the sellers/servicers to MBIA as reimbursement of paid claims. Loan repurchase commitments are not securities and no quoted prices or comparable market transaction information are observable or available. Loan repurchase commitments at fair value are categorized in Level 3 of the fair value hierarchy. Fair values of loan repurchase commitments are determined using discounted cash flow techniques based on inputs including:

• breach rates representing the rate at which the sellers/servicers failed to comply with stated representations and warranties;

• recovery rates representing the estimates of future cash flows for the asset, including estimates about possible variations in the amount of cash flows expected to be collected;

• expectations about possible variations in the timing of collections of the cash flows; and

• time value of money, represented by the rate on risk-free monetary assets.

Long-term Debt

Long-term debt consists of notes, debentures, surplus notes and accrued interest on this debt. The fair value of long-term notes, debentures and surplus notes are estimated based on quoted prices for the identical or similar securities. The fair value of the accrued interest expense on the surplus notes due in 2033 is determined based on the scheduled interest payments discounted by the market’s perception of the credit risk related to the repayment of the surplus notes. The credit risk related to the repayment of the surplus notes is based on recent trades of the surplus notes. The deferred interest payment will be due on the first business day on or after which the Company obtains approval to make such payment.

The carrying amounts of accrued interest expense on all other long-term debt approximate fair value due to the short-term nature of these instruments. Long-term debt is categorized as Level 2 of the fair value hierarchy.

Medium-Term Notes

The fair values of certain MTNs are based on quoted market prices provided by third-party sources, where available. When quoted market prices are not available, the Company applies a matrix pricing grid based on the quoted market prices received and the MTNs’ stated maturity and interest rate to determine fair value. Nonperformance risk is included in the quoted market prices and the matrix pricing grid. The Company has elected to record these MTNs at fair value as they contain embedded derivatives which cannot accurately be separated from the host debt instrument and fair valued separately, therefore, these MTNs are carried at fair value with changes in fair value reflected in earnings. The remaining MTNs, which are not carried at fair value, do not contain embedded derivatives. As these MTNs are illiquid and the prices reflect significant unobservable inputs, they are categorized as Level 3 of the fair value hierarchy.

Investment Agreements

The fair values of investment agreements are determined using discounted cash flow techniques based on contractual cash flows and observable interest rates currently being offered for similar agreements with comparable maturity dates. Investment agreements contain collateralization and termination agreements that substantially mitigate the nonperformance risk of the Company. As the terms of the notes are private, and the timing and amount of contractual cash flows are not observable, these investment agreements are categorized as Level 3 of the fair value hierarchy.

Variable Interest Entity Notes

The fair values of VIE notes are determined based on recently executed transaction prices or quoted prices where observable. When position-specific quoted prices are not observable, fair values are based on quoted prices of similar securities. Fair values based on quoted prices of similar securities may be adjusted for factors unique to the securities, including any credit enhancement. When observable quoted prices are not available, fair value is determined based on discounted cash flow techniques of the underlying collateral using observable and unobservable inputs. Observable inputs include interest rate yield curves and bond spreads of similar securities. Unobservable inputs include the value of any credit enhancement. VIE notes are categorized in Level 2 or Level 3 of the fair value hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety.

Variable Interest Entity Derivatives

The VIEs have entered into derivative transactions consisting of cross currency swaps, interest rate derivatives and interest rate caps. Fair values of over-the-counter (“OTC”) derivatives are determined using valuation models based on observable and/or unobservable inputs. These observable and market-based inputs include interest rates and volatilities. These derivatives are categorized in Level 2 or Level 3 of the fair value hierarchy based on the input that is significant to the fair value measurement in its entirety.

Derivatives

The corporate segment has entered into derivative transactions primarily consisting of interest rate swaps. Fair values of OTC derivatives are determined using valuation models based on observable inputs, nonperformance risk of the Company’s own credit and nonperformance risk of the counterparties. Observable and market-based inputs include interest rate yields, credit spreads and volatilities. These derivatives are categorized in Level 2 or Level 3 of the fair value hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety.

The Company has policies and procedures in place regarding counterparties, including review and approval of the counterparty and the Company’s exposure limit, collateral posting requirements, collateral monitoring and margin calls on collateral. The Company manages counterparty credit risk on an individual counterparty basis through master netting agreements covering derivative transactions in the corporate segment. These agreements allow the Company to contractually net amounts due from a counterparty with those amounts due to such counterparty when certain triggering events occur. The Company only executes swaps under master netting agreements, which typically contain mutual credit downgrade provisions that generally provide the ability to require assignment or termination in the event either the Company or the counterparty is downgraded below a specified credit rating. The netting agreements minimize the potential for losses related to credit exposure and thus serve to mitigate the Company’s nonperformance risk under these derivatives.

In certain cases, the Company also manages credit risk through collateral agreements that give the Company the right to hold or the obligation to provide collateral when the current market value of derivative contracts exceeds an exposure threshold. Under these agreements, the Company may provide U.S. Treasury and other highly rated securities or cash to secure the derivative. The delivery of high-quality collateral can minimize credit exposure and mitigate the potential for nonperformance risk impacting the fair values of the derivatives.

Derivatives—Insurance

The derivative contracts insured by the Company cannot be legally traded and generally do not have observable market prices. The Company determines the fair values of insured credit derivatives using valuation models. The valuation models are consistently applied from period to period, with refinements to the fair value estimation approach being applied as and when the information becomes available. Negotiated settlements are also considered when determining fair value to validate the fair value estimates determined by the valuation models and to determine the best available estimate of fair value from the perspective of a market participant.

Approximately 88% of the balance sheet fair value of insured credit derivatives as of September 30,2015 was valued based on the Binomial Expansion Technique (“BET”) Model. Approximately 12% of the balance sheet fair value of insured credit derivatives as of September 30,2015 was valued based on the internally developed Direct Price Model and the Dual Default model. The valuation of insured derivatives includes the impact of its credit standing. All of these derivatives are categorized as Level 3 of the fair value hierarchy as their fair value is derived using significant unobservable inputs.

The Company has also entered into a derivative contract as a result of a commutation. The fair value of the derivative is determined using a discounted cash flow model. Key inputs include unobservable cash flows projected over the expected term of the derivative, discounted using observable discount rates and CDS spreads.

Description of the BET Model

Valuation Model Overview

The Company uses the BET Model to estimate what a bond insurer would charge to guarantee a transaction at the measurement date, based on the market-implied default risk of the underlying collateral and the remaining structural protection in a deductible or subordination.

Inputs to the process of determining fair value for structured transactions using the BET Model include estimates of collateral loss, allocation of loss to separate tranches of the capital structure, and calculation of the change in value.

BET Model Inputs

a. Credit spreads

The average spread of collateral is a key input as the Company assumes credit spreads reflect the market’s assessment of default probability. Collateral assets are generally considered on an average basis rather than being modeled on an individual basis. Spreads are obtained from market data sources published by third parties (e.g., dealer spread tables for assets most closely resembling collateral within the Company’s transactions) as well as collateral-specific spreads on the underlying reference obligations provided by trustees or market sources. The Company also calculates spreads based on quoted prices and on internal assumptions about expected life, when pricing information is available and spread information is not.

Over time, the data inputs change as new sources become available, existing sources are discontinued or are no longer considered to be reliable or the most appropriate. It is the Company’s preference to use more observable spread inputs defined above. However, the Company may on occasion move to less observable spread inputs due to the discontinuation of data sources or due to the Company considering certain spread inputs no longer representative of market spreads.

b. Diversity Scores

Diversity scores are a means of estimating the diversification in a portfolio. The diversity score estimates the number of uncorrelated assets that are assumed to have the same loss distribution as the actual portfolio of correlated assets. While diversity score is a required input into the BET model, due to current high levels of default within the collateral of the structures, diversity score does not have a significant impact on valuation.

c. Recovery Rate

The recovery rate represents the percentage of par expected to be recovered after an asset defaults, indicating the severity of a potential loss. MBIA generally uses rating agency recovery assumptions which may be adjusted to account for differences between the collateral used by the rating agencies and the actual collateral in MBIA-insured transactions. The Company may also adjust rating agency assumptions based on the performance of the collateral manager and on empirical market data.

d. Nonperformance Risk

The Company’s valuation methodology for insured credit derivative liabilities incorporates MBIA Corp.’s own nonperformance risk. The Company calculates the fair value by discounting the market value loss estimated through the BET Model at discount rates which include MBIA Corp.’s CDS spreads as of September 30,2015. The CDS spreads assigned to each deal are based on theweighted average life of the deal. The Company limits the nonperformance impact so that the derivative liability could not be lower than MBIA Corp.’s recovery derivative price multiplied by the unadjusted derivative liability.

Overall Model Results

As of September 30,2015 and December 31,2014, the Company’s net insured CDS derivative liability was $121 million and $244 million, respectively, based on the results of the aforementioned models. A significant driver of changes in fair value is MBIA Corp.’s nonperformance risk. In aggregate, the nonperformance calculation resulted in a pre-tax net insured derivative liability that was $42 million and $92 million lower than the net liability that would have been estimated if MBIA Corp. excluded nonperformance risk in its valuation as of September 30,2015 and December 31,2014, respectively. Nonperformance risk is a fair value concept and does not contradict MBIA Corp.’s internal view, based on fundamental credit analysis of MBIA Corp.’s economic condition, that MBIA Corp. will be able to pay all claims when due.

Warrants

Stock warrants issued by the Company are valued using the Black-Scholes model and are recorded at fair value. Inputs into the warrant valuation include the Company’s stock price, a volatility parameter, interest rates, and dividend data. As all significant inputs are market-based and observable, warrants are categorized as Level 2 of the fair value hierarchy.

Facility

In the fourth quarter of 2013, the Company approved and initiated a plan to sell its Armonk, New York facility and classified it as held for sale as of December 31,2014. In May of 2015, the Company completed the sale of this facility. As of December 31, 2014, fair market value was estimated based on an independent third-party appraisal. This item is categorized as Level 2 of the fair value hierarchy.

Financial Guarantees

Gross Financial Guarantees —The fair value of gross financial guarantees is determined using discounted cash flow techniques based on inputs that include (i) assumptions of expected losses on financial guarantee policies where loss reserves have not been recognized, (ii) amount of losses expected on financial guarantee policies where loss reserves have been established, net of expected recoveries, (iii) the cost of capital reserves required to support the financial guarantee liability, (iv) operating expenses, and (v) discount rates. The MBIA Corp. CDS spread and recovery rate are used as the discount rate for MBIA Corp., while the CDS spread and recovery rate of a similar municipal bond insurance company are used as the discount rate for National, as National does not have a published CDS spread and recovery rate.

The carrying value of the Company’s gross financial guarantees consists of unearned premium revenue and loss and LAE reserves, net of the insurance loss recoverable as reported on MBIA’s consolidated balance sheets.

Ceded Financial Guarantees — The fair value of ceded financial guarantees is determined by applying the percentage ceded to reinsurers to the related fair value of the gross financial guarantees. The carrying value of ceded financial guarantees consists of prepaid reinsurance premiums and reinsurance recoverable on paid and unpaid losses as reported within “Other assets” on the Company’s consolidated balance sheets.

Significant Unobservable Inputs

The following tables provide quantitative information regarding the significant unobservable inputs used by the Company for assets and liabilities measured at fair value on a recurring basis as of September 30,2015and December 31,2014. These tables exclude inputs used to measure fair value that are not developed by the Company, such as broker prices and other third-party pricing service valuations.

		Fair Value
		as of				Range
		September 30,				(Weighted
In millions		2015		Valuation Techniques	Unobservable Input	Average)
Assets of consolidated VIEs:
	Loans receivable at fair value	$	1,351	Market prices adjusted for financial	Impact of financial guarantee	0% - 6% (2%)
				guarantees provided to VIE obligations
	Loan repurchase commitments		394	Discounted cash flow	Recovery rates(1)
					Breach rates(1)
Liabilities of consolidated VIEs:
	Variable interest entity notes		1,310	Market prices of VIE assets	Impact of financial guarantee	0% - 44% (9%)
				adjusted for financial guarantees provided
Credit derivative liabilities, net:
	CMBS		105	BET Model	Recovery rates	25% - 90% (66%)
					Nonperformance risk	19% - 29% (21%)
					Weighted average life (in years)	1.1 - 1.7 (1.4)
					CMBS spreads	0% - 67% (20%)
	Multi-sector CDO		5	Direct Price Model	Nonperformance risk	48% - 48% (48%)
	Other		11	BET Model and Dual Default	Recovery rates	42% - 45% (45%)
					Nonperformance risk	48% - 48% (48%)
					Weighted average life (in years)	0.8 - 7.4 (2.1)
Other derivative liabilities			22	Discounted cash flow	Cash flows	$0 - $83 ($42)(2)
____________
(1) - Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty.
(2) - Midpoint of cash flows are used for the weighted average.

		Fair Value
		as of				Range
		December 31,				(Weighted
In millions		2014		Valuation Techniques	Unobservable Input	Average)
Assets of consolidated VIEs:
	Loans receivable at fair value	$	1,431	Market prices adjusted for financial	Impact of financial guarantee	0% - 10% (2%)
				guarantees provided to VIE obligations
	Loan repurchase commitments		379	Discounted cash flow	Recovery rates(1)
					Breach rates(1)
Liabilities of consolidated VIEs:
	Variable interest entity notes		735	Market prices of VIE assets	Impact of financial guarantee	0% - 35% (16%)
				adjusted for financial guarantees provided
Credit derivative liabilities, net:
	CMBS		224	BET Model	Recovery rates	25% - 90% (59%)
					Nonperformance risk	12% - 29% (25%)
					Weighted average life (in years)	1.3 - 3.2 (2.3)
					CMBS spreads	0% - 41% (19%)
	Multi-sector CDO		9	Direct Price Model	Nonperformance risk	53% - 53% (53%)
	Other		11	BET Model and Dual Default	Recovery rates	42% - 45% (45%)
					Nonperformance risk	41% - 51% (50%)
					Weighted average life (in years)	0.2 - 7.9 (1.1)
Other derivative liabilities			24	Discounted cash flow	Cash flows	$0 - $83 ($42)(2)
	____________
	(1) - Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty.
	(2) - Midpoint of cash flows are used for the weighted average.

Sensitivity of Significant Unobservable Inputs

The significant unobservable input used in the fair value measurement of the Company’s loans receivable at fair value of consolidated VIEs is the impact of the financial guarantee. The fair value of loans receivable is calculated by subtracting the value of the financial guarantee from the market value of VIE liabilities. The value of a financial guarantee is estimated by the Company as the present value of expected cash payments under the policy. As expected cash payments provided by the Company under the insurance policy increase, there is a lower expected cash flow on the underlying loans receivable of the VIE. This results in a lower fair value of the loans receivable in relation to the obligations of the VIE.

The significant unobservable inputs used in the fair value measurement of the Company’s loan repurchase commitments of consolidated VIEs are the recovery rates and breach rates. Recovery rates reflect the estimates of future cash flows reduced for litigation delays and risks and/or potential financial distress of the sellers/servicers. The estimated recoveries of the loan repurchase commitments may differ from the actual recoveries that may be received in the future. Breach rates represent the rate at which mortgages fail to comply with stated representations and warranties of the sellers/servicers. Significant increases or decreases in the recovery rates and the breach rates would result in significantly higher or lower fair values of the loan repurchase commitments, respectively. Additionally, changes in the legal environment and the ability of the counterparties to pay would impact the recovery rate assumptions, which could significantly impact the fair value measurement. Any significant challenges by the counterparties to the Company’s determination of breaches of representations and warranties could significantly adversely impact the fair value measurement. Recovery rates and breach rates are determined independently. Changes in one input will not necessarily have any impact on the other input.

The significant unobservable input used in the fair value measurement of the Company’s VIE notes of consolidated VIEs is the impact of the financial guarantee. The fair value of VIE notes is calculated by adding the value of the financial guarantee to the market value of VIE assets. The value of a financial guarantee is estimated by the Company as the present value of expected cash payments under the policy. As the value of the guarantee provided by the Company to the obligations issued by the VIE increases, the credit support adds value to the liabilities of the VIE. This results in an increase in the fair value of the liabilities of the VIE.

The significant unobservable inputs used in the fair value measurement of MBIA Corp.’s CMBS credit derivatives, which are valued using the BET Model, are CMBSspreads, recovery rates, nonperformance risk and weighted average life. The CMBS spread is an indicator of credit risk of the collateral securities. The recovery rate represents the percentage of notional expected to be recovered after an asset defaults, indicating the severity of a potential loss. The nonperformance risk is an assumption of MBIA Corp.’s own ability to pay and whether MBIA Corp. will have the necessary resources to pay the obligations as they come due. Weighted average life is based on the Company’s estimate of when the principal of the underlying collateral of the CMBS structure will be repaid.A significant increase or decrease in CMBS spreads would result in an increase or decrease in the fair value of the derivative liability, respectively. A significant increase in weighted average life can result in an increase or decrease in the fair value of the derivative liability, depending on the discount rate and the timing of significant losses. Any significant increase or decrease in recovery rates, or MBIA Corp.’s nonperformance riskwould result in a decrease or increase in the fair value of the derivative liabilities, respectively. CMBS spreads, recovery rates, nonperformance risk and weighted average lives are determined independently. Changes in one input will not necessarily have any impact on the other inputs.

The significant unobservable input used in the fair value measurement of MBIA Corp.’s multi-sector CDO credit derivatives, which are valued using the Direct Price Model, is nonperformance risk. The nonperformance risk is an assumption of MBIA Corp.’s own ability to pay and whether MBIA Corp. will have the necessary resources to pay the obligations as they come due. Any significant increase or decrease in MBIA Corp.’s nonperformance risk would result in a decrease or increase in the fair value of the derivative liabilities, respectively.

The significant unobservable inputs used in the fair value measurement of MBIA Corp.’s other credit derivatives, which are valued using the BET Model and Dual Default, are recovery rates, nonperformance risk and weighted average life. The recovery rate represents the percentage of notional expected to be recovered after an asset defaults, indicating the severity of a potential loss. The nonperformance risk is an assumption of MBIA Corp.’s own ability to pay and whether MBIA Corp. will have the necessary resources to pay the obligations as they come due. Weighted average life is based on MBIA Corp.’s estimate of when the principal of the underlying collateral will be repaid. A significant increase in weighted average life can result in an increase or decrease in the fair value of the derivative liability, depending on the discount rate and the timing of significant losses. Any significant increase or decrease in recovery rates or MBIA Corp.’s nonperformance risk would result in a decrease or increase in the fair value of the derivative liabilities, respectively. Recovery rates, nonperformance risk and weighted average lives are determined independently. Changes in one input will not necessarily have any impact on the other inputs.

The significant unobservable input used in the fair value measurement of MBIA Corp.’s other derivatives, which are valued using a discounted cash flow model, isthe estimates of future cash flows discounted using market rates and CDS spreads. Any significant increase or decrease in future cash flows would result in anincrease or decrease in the fair value of the derivative liability, respectively.

Fair Value Measurements

The following tables present the fair value of the Company’s assets (including short-term investments) and liabilities measured and reported at fair value on a recurring basis as of September 30,2015andDecember 31,2014:

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		September 30,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2015
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency			$	744	$	112	$	-		$	-	$	856
	State and municipal bonds				-		1,804		47	(1)		-		1,851
	Foreign governments				141		67		5	(1)		-		213
	Corporate obligations				-		1,717		8	(1)		-		1,725
	Mortgage-backed securities:
		Residential mortgage-backed agency			-		1,043		-			-		1,043
		Residential mortgage-backed non-agency			-		56		-			-		56
		Commercial mortgage-backed			-		16		-			-		16
	Asset-backed securities:
		Collateralized debt obligations			-		3		61	(1)		-		64
		Other asset-backed			-		310		57	(1)		-		367
			Total fixed-maturity investments		885		5,128		178			-		6,191
Money market securities					111		-		-			-		111
Perpetual debt and equity securities					17		192		-			-		209
Cash and cash equivalents					462		-		-			-		462
Derivative assets:
	Non-insured derivative assets:
		Interest rate derivatives			-		3		-			(1)		2
				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		September 30,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2015
Assets of consolidated VIEs:
	Corporate obligations				-		47		11	(1)		-		58
	Mortgage-backed securities:
		Residential mortgage-backed non-agency			-		183		-			-		183
		Commercial mortgage-backed			-		699		-			-		699
	Asset-backed securities:
		Collateralized debt obligations			-		16		-			-		16
		Other asset-backed			-		20		9	(1)		-		29
	Cash				30		-		-			-		30
	Loans receivable at fair value:
		Residential loans receivable			-		-		1,244			-		1,244
		Other loans receivable			-		-		107			-		107
	Loan repurchase commitments				-		-		394			-		394
	Derivative assets:
		Currency derivatives			-		-		6	(1)		-		6
Total assets				$	1,505	$	6,288	$	1,949		$	(1)	$	9,741
Liabilities:
Medium-term notes				$	-	$	-	$	170	(1)	$	-	$	170
Derivative liabilities:
	Insured derivatives:
		Credit derivatives			-		3		121			-		124
	Non-insured derivatives:
		Interest rate derivatives			-		255		-			(62)		193
		Other			-		-		22			-		22
Other liabilities:
	Warrants				-		17		-			-		17
	Securities sold, not yet purchased				18		-		-			-		18
Liabilities of consolidated VIEs:
	Variable interest entity notes				-		1,150		1,310			-		2,460
	Derivative liabilities:
		Interest rate derivatives			-		57		-			-		57
Total liabilities				$	18	$	1,482	$	1,623		$	(62)	$	3,061
____________
(1) - Unobservable inputs are either not developed by the Company or do not significantly impact the overall fair values of the aggregate financial assets and liabilities.

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		December 31,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2014
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency			$	573	$	118	$	-		$	-	$	691
	State and municipal bonds				-		1,724		8	(1)		-		1,732
	Foreign governments				221		63		6	(1)		-		290
	Corporate obligations				-		2,048		10	(1)		-		2,058
	Mortgage-backed securities:
		Residential mortgage-backed agency			-		1,162		-			-		1,162
		Residential mortgage-backed non-agency			-		56		-			-		56
		Commercial mortgage-backed			-		20		2	(1)		-		22
	Asset-backed securities:
		Collateralized debt obligations			-		6		87	(1)		-		93
		Other asset-backed			-		156		85	(1)		-		241
			Total fixed-maturity investments		794		5,353		198			-		6,345
Money market securities					428		-		-			-		428
Perpetual debt and equity securities					22		31		-			-		53
Cash and cash equivalents					729		-		-			-		729
Derivative assets:
	Non-insured derivative assets:
		Interest rate derivatives			-		83		-			(81)		2
Assets held for sale:
	Equity securities				6		-		-			-		6
	Loans receivable at fair value				-		711		-			-		711
	Cash and cash equivalents				55		-		-			-		55
				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		December 31,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2014
Assets of consolidated VIEs:
	Corporate obligations				-		10		55	(1)		-		65
	Mortgage-backed securities:
		Residential mortgage-backed non-agency			-		194		3	(1)		-		197
		Commercial mortgage-backed			-		86		-			-		86
	Asset-backed securities:
		Collateralized debt obligations			-		7		5	(1)		-		12
		Other asset-backed			-		35		26	(1)		-		61
	Cash				53		-		-			-		53
	Loans receivable at fair value:
		Residential loans receivable			-		-		1,431			-		1,431
	Loan repurchase commitments				-		-		379			-		379
Total assets				$	2,087	$	6,510	$	2,097		$	(81)	$	10,613
Liabilities:
Medium-term notes				$	-	$	-	$	197	(1)	$	-	$	197
Derivative liabilities:
	Insured derivatives:
		Credit derivatives			-		2		244			-		246
	Non-insured derivatives:
		Interest rate derivatives			-		248		-			(81)		167
		Other			-		-		24			-		24
Liabilities held for sale:
	Variable interest entity notes				-		431		-			-		431
	Payable for loans purchased				-		323		-			-		323
Other liabilities:
	Warrants				-		28		-			-		28
Liabilities of consolidated VIEs:
	Variable interest entity notes				-		1,312		735			-		2,047
Total liabilities				$	-	$	2,344	$	1,200		$	(81)	$	3,463
____________
(1) - Unobservable inputs are either not developed by the Company or do not significantly impact the overall fair values of the aggregate financial assets and liabilities.

Level 3 assets at fair value as of September 30,2015 and December 31,2014 represented approximately 20% of total assets measured at fair value. Level 3 liabilities at fair value as of September 30,2015 and December 31,2014 represented approximately 53% and 35%, respectively, of total liabilities measured at fair value.

The following tables present the fair values and carrying values of the Company’s assets and liabilities that are disclosed at fair value but not reported at fair value on the Company’s consolidated balance sheets as of September 30,2015 and December 31,2014:

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in		Significant		Significant		Fair Value		Carry Value
		Active Markets for		Other Observable		Unobservable		Balance as of		Balance as of
		Identical Assets		Inputs		Inputs		September 30,		September 30,
In millions		(Level 1)		(Level 2)		(Level 3)		2015		2015
Assets:
	Other investments	$	-	$	-	$	3	$	3	$	3
	Accrued investment income(1)		-		42		-		42		42
	Receivable for investments sold(1)		-		38		-		38		38
Assets of consolidated VIEs:
	Investments held-to-maturity		-		-		2,442		2,442		2,707
Total assets		$	-	$	80	$	2,445	$	2,525	$	2,790
Liabilities:
	Long-term debt	$	-	$	1,008	$	-	$	1,008	$	1,882
	Medium-term notes		-		-		574		574		863
	Investment agreements		-		-		638		638		485
	Payable for investments purchased(2)		-		19		-		19		19
Liabilities of consolidated VIEs:
	Variable interest entity notes		-		-		2,661		2,661		2,706
Total liabilities		$	-	$	1,027	$	3,873	$	4,900	$	5,955
Financial Guarantees:
	Gross	$	-	$	-	$	3,799	$	3,799	$	1,742
	Ceded		-		-		107		107		58
__________
(1) - Reported within "Other assets" on MBIA's consolidated balance sheets.
(2) - Reported within "Other liabilities" on MBIA's consolidated balance sheets.

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in		Significant		Significant		Fair Value		Carry Value
		Active Markets for		Other Observable		Unobservable		Balance as of		Balance as of
		Identical Assets		Inputs		Inputs		December 31,		December 31,
In millions		(Level 1)		(Level 2)		(Level 3)		2014		2014
Assets:
	Other investments	$	-	$	-	$	4	$	4	$	4
	Accrued investment income(1)		-		43		-		43		43
	Receivable for investments sold(1)		-		69		-		69		69
Assets held for sale
	Facility		-		26		-		26		26
Assets of consolidated VIEs:
	Investments held-to-maturity		-		-		2,632		2,632		2,757
Total assets		$	-	$	138	$	2,636	$	2,774	$	2,899
Liabilities:
	Long-term debt	$	-	$	1,172	$	-	$	1,172	$	1,810
	Medium-term notes		-		-		801		801		1,004
	Investment agreements		-		-		705		705		547
	Payable for investments purchased(2)		-		42		-		42		42
Liabilities of consolidated VIEs:
	Variable interest entity notes		-		-		2,779		2,779		2,757
Total liabilities		$	-	$	1,214	$	4,285	$	5,499	$	6,160
Financial Guarantees:
	Gross	$	-	$	-	$	4,051	$	4,051	$	1,959
	Ceded		-		-		109		109		65
__________
(1) - Reported within "Other assets" on MBIA's consolidated balance sheets.
(2) - Reported within "Other liabilities" on MBIA's consolidated balance sheets.

Thefollowing tablespresentinformation aboutchangesin Level 3 assets(includingshort-terminvestments)andliabilitiesmeasuredatfairvalue on a recurring basisforthethree months endedSeptember 30,2015and 2014:

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2015
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings
					Gains /		Unrealized		Foreign																for Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Period		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2015
Assets:
Foreign governments	$	5	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	5	$	-
Corporate obligations		8		-		-		-		-		-		-		-		-		-		-		8		-
Commercial
mortgage-backed		1		-		-		-		-		-		-		-		-		-		(1)		-		-
Collateralized debt
obligations		67		-		-		1		-		-		-		(4)		-		-		(3)		61		-
Other asset-backed		83		-		-		-		-		-		-		(2)		-		-		(24)		57		-
State and municipal
bonds		5		-		-		-		-		45		-		(3)		-		-		-		47		-
Assets of
consolidated VIEs:
Corporate obligations		35		-		1		-		-		-		-		-		-		3		(28)		11		-
Residential mortgage-
backed non-agency		5		-		-		-		-		-		-		-		-		-		(5)		-		-
Collateralized debt
obligations		4		-		5		-		-		-		-		-		-		-		(9)		-		-
Other asset-backed		17		-		-		-		-		-		-		(1)		-		-		(7)		9		-
Loans receivable-
residential		1,318		-		(12)		-		-		-		-		(62)		-		-		-		1,244		(12)
Loans receivable- other		108		-		(1)		-		-		-		-		-		-		-		-		107		(1)
Loan repurchase
commitments		388		-		6		-		-		-		-		-		-		-		-		394		6
Currency
derivatives, net		2		-		1		-		3		-		-		-		-		-		-		6		4
Total assets	$	2,046	$	-	$	-	$	1	$	3	$	45	$	-	$	(72)	$	-	$	3	$	(77)	$	1,949	$	(3)

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Period		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2015
Liabilities:
Medium-term notes	$	166	$	-	$	4	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	170	$	4
Credit derivatives, net		144		18		(21)		-		-		-		-		(20)		-		-		-		121		(21)
Other
derivatives		21		-		1		-		-		-		-		-		-		-		-		22		1
Liabilities of
consolidated VIEs:
VIE notes		1,374		-		1		-		-		-		-		(65)		-		-		-		1,310		1
Total liabilities	$	1,705	$	18	$	(15)	$	-	$	-	$	-	$	-	$	(85)	$	-	$	-	$	-	$	1,623	$	(15)
_______________
(1) - Transferred in and out at the end of the period.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2014
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings for
					Gains /		Unrealized		Foreign																Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Period		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2014
Assets:
Foreign governments	$	5	$	-	$	-	$	-	$	-	$	-	$	-	$	(6)	$	-	$	7	$	-	$	6	$	-
Corporate obligations		34		-		-		-		(1)		3		-		(1)		(1)		4		-		38		-
Residential mortgage-
backed agency		8		-		-		-		-		-		-		(8)		-		-		-		-		-
Commercial
mortgage-backed		1		-		-		-		-		-		-		-		-		-		-		1		-
Collateralized debt
obligations		95		-		-		-		-		-		-		(3)		-		-		-		92		-
Other asset-backed		82		-		-		(4)		-		-		-		(4)		-		21		(1)		94		-
State and municipal
bonds		57		-		-		-		-		-		-		(1)		-		2		-		58		-
Perpetual debt and equity securities		13		-		-		-		-		-		-		-		-		-		-		13		-
Assets of
consolidated VIEs:
Corporate obligations		62		-		-		-		-		-		-		-		-		7		-		69		-
Residential mortgage-
backed non-agency		4		-		-		-		-		-		-		-		-		-		-		4		-
Commercial
Collateralized debt
obligations		6		-		-		-		-		-		-		-		-		-		-		6		-
Other asset-backed		26		-		-		-		-		-		-		(1)		-		14		-		39		-
Loans receivable		1,539		-		12		-		-		-		-		(56)		-		-		-		1,495		12
Loan repurchase
commitments		363		-		2		-		-		-		-		-		-		-		-		365		2
Total assets	$	2,295	$	-	$	14	$	(4)	$	(1)	$	3	$	-	$	(80)	$	(1)	$	55	$	(1)	$	2,280	$	14

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Period		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2014
Liabilities:
Medium-term notes	$	217	$	-	$	2	$	-	$	(17)	$	-	$	-	$	-	$	-	$	-	$	-	$	202	$	(15)
Credit derivatives, net		332		24		(48)		-		-		-		-		(24)		-		-		-		284		(14)
Other
derivatives, net		33		-		5		-		-		-		-		-		-		-		-		38		5
Liabilities of
consolidated VIEs:
VIE notes		802		-		4		-		-		-		-		(60)		-		-		-		746		4
Currency derivatives,
net		11		-		(3)		-		(1)		-		-		-		-		-		-		7		(4)
Total liabilities	$	1,395	$	24	$	(40)	$	-	$	(18)	$	-	$	-	$	(84)	$	-	$	-	$	-	$	1,277	$	(24)
_______________
(1) - Transferred in and out at the end of the period.

Transfers into and out of Level 3 were $3 million and $77 million, respectively, for the three months endedSeptember 30,2015. Transfers into and out of Level 2 were $77 million and $3 million, respectively, for the three months endedSeptember 30,2015. Transfers into Level 3 were principally related to corporate obligations, where inputs, which are significant to their valuation, became unobservable during the quarter. Corporate obligations, other ABS and CDOs comprised the majority of the instruments transferred out of Level 3 where inputs, which are significant to their valuation, became observable during the quarter. These inputs included spreads, prepayment speeds, default speeds, default severities, yield curves observable at commonly quoted intervals, and market corroborated inputs. There were no transfers into or out of Level 1.

Transfers into and out of Level 3 were $55 million and $1 million, respectively, for the three months endedSeptember 30,2014. Transfers into and out of Level 2 were $1 million and $55 million, respectively, for the three months endedSeptember 30,2014. Transfers into Level 3 were principally related to other ABS, corporate obligations and foreign government securities, where inputs, which are significant to their valuation, became unobservable during the quarter.Other ABS comprised the majority of the instruments transferred out of Level 3 where inputs, which are significant to their valuation, became observable during the quarter. These inputs included spreads, prepayment speeds, default speeds, default severities, yield curves observable at commonly quoted intervals, and market corroborated inputs. There were no transfers into or out of Level 1.

All Level 1, 2 and 3 designations are made at the end of each accounting period.

Thefollowing tablespresentinformation aboutchangesin Level 3 assets(includingshort-terminvestments)andliabilitiesmeasuredatfairvalue on a recurring basisforthenine months endedSeptember 30,2015and 2014:

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2015
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings for
					Gains /		Unrealized		Foreign																Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Year		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2015
Assets:
Foreign governments	$	6	$	-	$	-	$	-	$	(1)	$	-	$	-	$	-	$	-	$	-	$	-	$	5	$	-
Corporate obligations		10		-		-		-		-		-		-		-		-		15		(17)		8		-
Commercial
mortgage-backed		2		-		-		-		-		-		-		-		-		1		(3)		-		-
Collateralized debt
obligations		87		-		-		3		-		-		-		(18)		(8)		1		(4)		61		-
Other asset-backed		85		(2)		-		1		-		4		-		(9)		(8)		12		(26)		57		-
State and municipal
bonds		8		-		-		-		-		45		-		(4)		-		-		(2)		47		-
Assets of
consolidated VIEs:
Corporate obligations		55		-		-		-		-		-		-		(6)		-		3		(41)		11		-
Residential mortgage-
backed non-agency		3		-		1		-		-		-		-		(1)		-		2		(5)		-		-
Collateralized debt
obligations		5		-		5		-		-		-		-		-		-		-		(10)		-		-
Other asset-backed		26		-		2		-		-		-		-		(5)		-		-		(14)		9		-
Loans receivable- residential		1,431		-		(15)		-		-		-		-		(172)		-		-		-		1,244		(15)
Loans receivable-other		-		-		(1)		-		-		108		-		-		-		-		-		107		(1)
Loan repurchase
commitments		379		-		15		-		-		-		-		-		-		-		-		394		15
Currency
derivatives net		-		-		-		-		6		-		-		-		-		-		-		6		6
Total assets	$	2,097	$	(2)	$	7	$	4	$	5	$	157	$	-	$	(215)	$	(16)	$	34	$	(122)	$	1,949	$	5

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Year		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2015
Liabilities:
Medium-term notes	$	197	$	-	$	(11)	$	-	$	(16)	$	-	$	-	$	-	$	-	$	-	$	-	$	170	$	(27)
Credit derivatives, net		244		30		(121)		-		-		-		-		(32)		-		-		-		121		(109)
Other
derivatives, net		24		-		(2)		-		-		-		-		-		-		-		-		22		(2)
Liabilities of
consolidated VIEs:
VIE notes		735		-		22		-		-		695		-		(142)		-		-		-		1,310		22
Total liabilities	$	1,200	$	30	$	(112)	$	-	$	(16)	$	695	$	-	$	(174)	$	-	$	-	$	-	$	1,623	$	(116)
_______________
(1) - Transferred in and out at the end of the period.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2014
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings for
					Gains /		Unrealized		Foreign																Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Year		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2014
Assets:
Foreign governments	$	12	$	-	$	-	$	-	$	-	$	-	$	-	$	(15)	$	-	$	9	$	-	$	6	$	-
Corporate obligations		48		3		3		(4)		(1)		9		-		(3)		(23)		7		(1)		38		2
Residential mortgage-
backed agency		-		-		-		-		-		-		-		(8)		-		37		(29)		-		-
Residential mortgage-
backed non-agency		6		-		-		(1)		-		-		-		-		-		-		(5)		-		-
Commercial
mortgage-backed		14		-		-		-		-		-		-		(14)		-		2		(1)		1		-
Collateralized debt
obligations		82		(2)		1		27		-		5		-		(9)		(41)		36		(7)		92		-
Other asset-backed		58				-		4		-		11		-		(8)		(1)		51		(21)		94		-
State and municipal
bonds		19		-		-		1		-		-		-		(3)		(3)		46		(2)		58		-
Perpetual debt and equity
securities		11		-		2		-		-		-		-		-		-		4		(4)		13		2
Assets of
consolidated VIEs:
Corporate obligations		48		-		-		-		-		-		-		(4)		-		25		-		69		-
Residential mortgage-
backed non-agency		4		-		(1)		-		-		-		-		(1)		-		2		-		4		-
Commercial
mortgage-backed		3		-		(3)		-		-		-		-		-		-		-		-		-		-
Collateralized debt
obligations		22		-		(10)		-		-		-		-		(4)		-		1		(3)		6		1
Other asset-backed		54		-		(16)		-		-		-		-		(7)		-		18		(10)		39		-
Loans receivable		1,612		-		48		-		-		-		-		(165)		-		-		-		1,495		48
Loan repurchase
commitments		359		-		6		-		-		-		-		-		-		-		-		365		6
Total assets	$	2,352	$	1	$	30	$	27	$	(1)	$	25	$	-	$	(241)	$	(68)	$	238	$	(83)	$	2,280	$	59

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		September 30,
In millions	of Year		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3(1)		Level 3(1)		Balance		2014
Liabilities:
Medium-term notes	$	203	$	-	$	17	$	-	$	(18)	$	-	$	-	$	-	$		$	-	$	-	$	202	$	(1)
Credit derivatives, net		1,147		388		(863)		-		-		-		-		(388)		-		-		-		284		20
Other derivatives, net		-		30		8		-		-		-		-		-		-		-		-		38		8
Liabilities of
consolidated VIEs:
VIE notes		940		-		40		-		-		-		3		(196)		(41)		-		-		746		37
Currency derivatives, net		11		-		(3)		-		(1)		-		-		-		-		-		-		7		(4)
Total liabilities	$	2,301	$	418	$	(801)	$	-	$	(19)	$	-	$	3	$	(584)	$	(41)(2)	$	-	$	-	$	1,277	$	60
_______________
(1) - Transferred in and out at the end of the period.
(2) - Primarily relates to the deconsolidation of VIEs.

Transfers into and out of Level 3 were $34 million and $122 million, respectively, for the nine months endedSeptember 30,2015. Transfers into and out of Level 2 were $122 million and $34 million, respectively, for the nine months endedSeptember 30,2015. Transfers into Level 3 were principally related to corporate obligations and other ABS, where inputs, which are significant to their valuation, became unobservable during the period. Corporate obligations, other ABS and CDOs comprised the majority of the instruments transferred out of Level 3 where inputs, which are significant to their valuation, became observable during the period. These inputs included spreads, prepayment speeds, default speeds, default severities, yield curves observable at commonly quoted intervals, and market corroborated inputs. There were no transfers into or out of Level 1.

Transfers into and out of Level 3 were $238 million and $83 million, respectively, for the nine months endedSeptember 30,2014. Transfers into and out of Level 2 were $83 million and $238 million, respectively, for the nine months endedSeptember 30,2014. Transfers into Level 3 were principally related to other ABS, state and municipal bonds, RMBS agency, CDOs and corporate obligations, where inputs, which are significant to their valuation, became unobservable during the period. RMBS agency and other ABS comprised the majority of the instruments transferred out of Level 3 where inputs, which are significant to their valuation, became observable during the period. These inputs included spreads, prepayment speeds, default speeds, default severities, yield curves observable at commonly quoted intervals, and market corroborated inputs. There were no transfers into or out of Level 1.

All Level 1, 2 and 3 designations are made at the end of each accounting period.

Gains and losses (realized and unrealized) included in earnings related to Level 3 assets and liabilities for the three months endedSeptember 30,2015 and 2014 are reported on the Company’s consolidated statements of operations as follows:

		Three Months Ended September 30, 2015				Three Months Ended September 30, 2014
				Change in				Change in
				Unrealized				Unrealized
				Gains (Losses)				Gains (Losses)
				for the				for the
				Period Included				Period Included
				in Earnings				in Earnings
				for Assets				for Assets
				and				and
		Total Gains		Liabilities still		Total Gains		Liabilities still
		(Losses)		held as of		(Losses)		held as of
		Included		September 30,		Included		September 30,
In millions		in Earnings		2015		in Earnings		2014
Revenues:
	Unrealized gains (losses) on
	insured derivatives	$	21	$	21	$	48	$	14
	Realized gains (losses) and other
	settlements on insured derivatives		(18)		-		(24)		-
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		(5)		(5)		9		10
	Revenues of consolidated VIEs:
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		2		(4)		14		14
Total		$	-	$	12	$	47	$	38

Gainsandlosses(realizedandunrealized)included in earningsrelating to Level 3 assetsand liabilitiesforthe nine months endedSeptember 30,2015 and2014are reportedonthe Company’s consolidated statementsofoperationsasfollows:

		Nine Months Ended September 30, 2015				Nine Months Ended September 30, 2014
				Change in				Change in
				Unrealized				Unrealized
				Gains (Losses)				Gains (Losses)
				for the				for the
				Period Included				Period Included
				in Earnings				in Earnings
				for Assets				for Assets
				and				and
		Total Gains		Liabilities still		Total Gains		Liabilities still
		(Losses)		held as of		(Losses)		held as of
		Included		September 30,		Included		September 30,
In millions		in Earnings		2015		in Earnings		2014
Revenues:
	Unrealized gains (losses) on
	insured derivatives	$	121	$	109	$	863	$	(20)
	Realized gains (losses) and other
	settlements on insured derivatives		(30)		-		(418)		-
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		26		29		(1)		(3)
	Revenues of consolidated VIEs:
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		(9)		(17)		(12)		22
Total		$	108	$	121	$	432	$	(1)

Fair Value Option

The Company elected to record at fair value certain financial instruments that have been consolidated in connection with the adoption of the accounting guidance for consolidation of VIEs, among others.

The following table presents the changes in fair value included in the Company’s consolidated statements of operations for the three and nine months endedSeptember 30,2015 and 2014for financial instruments for which the fair value option was elected:

		Three Months Ended September 30,				Nine Months Ended September 30,
In millions		2015		2014		2015		2014
Investments carried at fair value(1)		$	(2)	$	-	$	(1)	$	2
Fixed-maturity securities held at fair value-VIE(2)			(20)		(3)		(93)		(71)
Loans receivable at fair value:
	Residential mortgage loans(2)		(74)		(45)		(187)		(118)
	Other loans(2)		-		(2)		-		(2)
Loan repurchase commitments(2)			6		1		15		6
Medium-term notes(1)			(3)		15		27		1
Variable interest entity notes (2)			122		87		283		256
___________
(1) - Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange" on MBIA's consolidated statements of operations.
(2) - Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange-VIE" on MBIA's consolidated statements of operations.

Thefollowing table reflectsthe difference between the aggregatefairvalue and theaggregate remaining contractual principal balance outstanding asofSeptember 30,2015and December 31,2014forloans andnotes forwhichthe fairvalueoptionwaselected:

		As of September 30, 2015							As of December 31, 2014
		Contractual						Contractual
		Outstanding		Fair				Outstanding		Fair
In millions		Principal		Value		Difference		Principal		Value		Difference
Loans receivable at fair value:
	Residential mortgage loans	$	1,331	$	1,233	$	98	$	1,554	$	1,377	$	177
	Residential mortgage loans (90 days or more past due)		194		11		183		227		54		173
	Other loans		107		107		-		721		711		10
	Other loans (90 days or more past due)		73		-		73		-		-		-
Total loans receivable at fair value		$	1,705	$	1,351	$	354	$	2,502	$	2,142	$	360
Variable interest entity notes		$	3,758	$	2,460	$	1,298	$	3,584	$	2,479	$	1,105
Medium-term notes		$	223	$	170	$	53	$	242	$	197	$	45

Substantiallyall gainsandlossesincludedinearningsduringthe periodsendedSeptember 30,2015and 2014onloans receivable andVIE notes reported in the preceding table are attributable tocredit risk. Thisisprimarilydue tothe highrate ofdefaultsonloansandthe collateral supportingthe VIE notes, resultingindepressedpricingofthe financial instruments.

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Investments (Credit Ratings Of Asset-Backed And Mortgage-Backed Securities And Corporate Obligations In Available-For-Sale Investments For Which Fair Value Was Less Than Amortized Cost) (Detail) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Schedule Of Available For Sale Securities [Line Items]
Fair value	$ 2,019	$ 2,071
Asset-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	307
Gross unrealized losses	(30)
Mortgage-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	495
Gross unrealized losses	(10)
Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	610
Gross unrealized losses	(104)
Total ABS MBS and Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	1,412
Gross unrealized losses	(144)
Moody's Aaa [Member] | Asset-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	153
Gross unrealized losses	(1)
Moody's Aaa [Member] | Mortgage-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	446
Gross unrealized losses	(4)
Moody's Aaa [Member] | Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	78
Gross unrealized losses	(1)
Moody's Aaa [Member] | Total ABS MBS and Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	677
Gross unrealized losses	(6)
Moodys Aa 1 Rating [Member] | Asset-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	88
Gross unrealized losses	(1)
Moodys Aa 1 Rating [Member] | Mortgage-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	2
Gross unrealized losses	0
Moodys Aa 1 Rating [Member] | Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	179
Gross unrealized losses	(3)
Moodys Aa 1 Rating [Member] | Total ABS MBS and Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	269
Gross unrealized losses	(4)
Moody's A1 [Member] | Asset-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	1
Gross unrealized losses	0
Moody's A1 [Member] | Mortgage-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	3
Gross unrealized losses	0
Moody's A1 [Member] | Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	260
Gross unrealized losses	(4)
Moody's A1 [Member] | Total ABS MBS and Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	264
Gross unrealized losses	(4)
Moody's Baa 1 Rating [Member] | Asset-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	2
Gross unrealized losses	0
Moody's Baa 1 Rating [Member] | Mortgage-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	5
Gross unrealized losses	0
Moody's Baa 1 Rating [Member] | Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	71
Gross unrealized losses	(6)
Moody's Baa 1 Rating [Member] | Total ABS MBS and Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	78
Gross unrealized losses	(6)
Below Investment Grade [Member] | Asset-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	62
Gross unrealized losses	(28)
Below Investment Grade [Member] | Mortgage-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	26
Gross unrealized losses	(2)
Below Investment Grade [Member] | Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	8
Gross unrealized losses	0
Below Investment Grade [Member] | Total ABS MBS and Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	96
Gross unrealized losses	(30)
Not Rated [Member] | Asset-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	1
Gross unrealized losses	0
Not Rated [Member] | Mortgage-backed [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	13
Gross unrealized losses	(4)
Not Rated [Member] | Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	14
Gross unrealized losses	(90)
Not Rated [Member] | Total ABS MBS and Corporate Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair value	28
Gross unrealized losses	$ (94)

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Variable Interest Entities

3 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Variable Interest Entities

Note 4: Variable Interest Entities

Through MBIA’sinternational and structured finance insurance segment, the Company provides credit protection to issuers of obligations that may involve issuer-sponsored special purpose entities (“SPEs”). An SPE may be considered a VIE to the extent the SPE’s total equity at risk is not sufficient to permit the SPE to finance its activities without additional subordinated financial support or its equity investors lack any one of the following characteristics: (i) the power to direct the activities of the SPE that most significantly impact the entity’s economic performance or (ii) the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity. A holder of a variable interest or interests in a VIE is required to assess whether it has a controlling financial interest, and thus is required to consolidate the entity as primary beneficiary. An assessment of a controlling financial interest identifies the primary beneficiary as the variable interest holder that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. An ongoing reassessment of controlling financial interest is required to be performed based on any substantive changes in facts and circumstances involving the VIE and its variable interests.

The Company evaluates issuer-sponsored SPEs initially to determine if an entity is a VIE, and is required to reconsider its initial determination if certain events occur. For all entities determined to be VIEs, MBIA performs an ongoing reassessment to determine whether its guarantee to provide credit protection on obligations issued by VIEs provides the Company with a controlling financial interest. Based on its ongoing reassessment of controlling financial interest, the Company determines whether a VIE is required to be consolidated or deconsolidated.

The Company makes its determination for consolidation based on a qualitative assessment of the purpose and design of a VIE, the terms and characteristics of variable interests of an entity, and the risks a VIE is designed to create and pass through to holders of variable interests. The Company generally provides credit protection on obligations issued by VIEs, and holds certain contractual rights according to the purpose and design of a VIE. The Company may have the ability to direct certain activities of a VIE depending on facts and circumstances, including the occurrence of certain contingent events, and these activities may be considered the activities of a VIE that most significantly impact the entity’s economic performance. The Company generally considers its guarantee of principal and interest payments of insured obligations, given nonperformance by a VIE, to be an obligation to absorb losses of the entity that could potentially be significant to the VIE. At the time the Company determines it has the ability to direct the activities of a VIE that most significantly impact the economic performance of the entity based on facts and circumstances, MBIA is deemed to have a controlling financial interest in the VIE and is required to consolidate the entity as primary beneficiary. The Company performs an ongoing reassessment of controlling financial interest that may result in consolidation or deconsolidation of any VIE.

The Company’s advisory services segment provided asset management and advisory services to VIEs. During 2014, the Company consolidated three VIEs as the primary beneficiary, pursuant to this segment’s activities. As of December 31, 2014, the Company heldapproximately $4 million of the subordinated notes issued by one of the VIEs. The Company had no obligation or commitment to provide additional financial support or liquidity to these VIEs. Effective January 1, 2015, the Company completed the sale of its Cutwater business and deconsolidated these VIEs. Refer to “Note 1: Business Developments and Risks and Uncertainties” for additional information about the sale of Cutwater.

NonconsolidatedVIEs

Insurance

Thefollowing tablespresentthe total assetsofnonconsolidated VIEsin which theCompanyholdsa variableinterestas ofSeptember 30,2015andDecember 31,2014, through its insurance operations.The followingtablesalso presentthe Company’smaximumexposure toloss fornonconsolidated VIEsand carrying valuesofthe assetsand liabilitiesforitsinterestsin theseVIEsasofSeptember 30,2015and December 31,2014.The Companyhasaggregated nonconsolidated VIEsbased onthe underlying creditexposure ofthe insured obligation.The nature oftheCompany’svariable interestsin nonconsolidated VIEsisrelated tofinancial guarantees,insured CDScontractsand anyinvestmentsinobligationsissued by nonconsolidated VIEs.

			September 30, 2015
							Carrying Value of Assets						Carrying Value of Liabilities
															Loss and Loss
					Maximum								Unearned		Adjustment
			VIE		Exposure				Premiums		Insurance Loss		Premium		Expense		Derivative
In millions			Assets		to Loss		Investments(1)		Receivable(2)		Recoverable(3)		Revenue(4)		Reserves(5)		Liabilities(6)
Insurance:
	Global structured finance:
		Collateralized debt obligations	$	6,666	$	3,853	$	90	$	14	$	-	$	10	$	108	$	17
		Mortgage-backed residential		12,130		6,436		24		33		426		32		275		-
		Mortgage-backed commercial		329		233		-		1		-		1		-		-
		Consumer asset-backed		5,706		1,778		-		14		-		12		8		-
		Corporate asset-backed		5,310		3,629		-		29		6		34		-		-
	Total global structured finance			30,141		15,929		114		91		432		89		391		17
	Global public finance			44,801		15,373		-		164		-		194		-		-
Total insurance			$	74,942	$	31,302	$	114	$	255	$	432	$	283	$	391	$	17
__________
(1) - Reported within "Investments" on MBIA's consolidated balance sheets.
(2) - Reported within "Premiums receivable" on MBIA's consolidated balance sheets.
(3) - Reported within "Insurance loss recoverable" on MBIA's consolidated balance sheets.
(4) - Reported within "Unearned premium revenue" on MBIA's consolidated balance sheets.
(5) - Reported within "Loss and loss adjustment expense reserves" on MBIA's consolidated balance sheets.
(6) - Reported within "Derivative liabilities" on MBIA's consolidated balance sheets.

			December 31, 2014
							Carrying Value of Assets						Carrying Value of Liabilities
															Loss and Loss
					Maximum								Unearned		Adjustment
			VIE		Exposure				Premiums		Insurance Loss		Premium		Expense		Derivative
In millions			Assets		to Loss		Investments(1)		Receivable(2)		Recoverable(3)		Revenue(4)		Reserves(5)		Liabilities(6)
Insurance:
	Global structured finance:
		Collateralized debt obligations	$	8,613	$	5,623	$	110	$	24	$	-	$	20	$	70	$	102
		Mortgage-backed residential		14,136		7,459		9		41		518		39		307		-
		Mortgage-backed commercial		571		279		-		1		-		1		-		-
		Consumer asset-backed		6,008		1,989		-		16		-		14		12		-
		Corporate asset-backed		6,612		4,608		-		41		6		47		-		-
	Total global structured finance			35,940		19,958		119		123		524		121		389		102
	Global public finance			49,686		16,698		-		179		-		211		-		-
Total insurance			$	85,626	$	36,656	$	119	$	302	$	524	$	332	$	389	$	102
__________
(1) - Reported within "Investments" on MBIA's consolidated balance sheets.
(2) - Reported within "Premiums receivable" on MBIA's consolidated balance sheets.
(3) - Reported within "Insurance loss recoverable" on MBIA's consolidated balance sheets.
(4) - Reported within "Unearned premium revenue" on MBIA's consolidated balance sheets.
(5) - Reported within "Loss and loss adjustment expense reserves" on MBIA's consolidated balance sheets.
(6) - Reported within "Derivative liabilities" on MBIA's consolidated balance sheets.

The maximum exposure to loss as a result of MBIA’s variable interests in VIEs is represented by insurance in force. Insurance in force is the maximum future payments of principal and interestwhich maybe required under commitments to make paymentson insuredobligations issuedby nonconsolidatedVIEs.

Consolidated VIEs

The carrying amounts of assets and liabilities of consolidated VIEs were $5.5 billion and $5.2 billion, respectively, as of September 30,2015, and $5.0 billion and $4.8 billion, respectively, as of December 31, 2014. The carrying amounts of assets and liabilities are presented separately in “Assets of consolidated variable interest entities” and “Liabilities of consolidated variable interest entities” on the Company’s consolidated balance sheets. The carrying amounts of assets and liabilities of consolidated VIEs in the Company’s advisory services segment were $751 million and $754 million, respectively, as of December 31, 2014, and are presented separately in “Assets held for sale” and “Liabilities held for sale” on the Company’s consolidated balance sheets. VIEs are consolidated or deconsolidated based on an ongoing reassessment of controlling financial interest, when events occur or circumstances arise, and whether the ability to exercise rights that constitute power to direct activities of any VIEs are present according to the design and characteristics of these entities. One additional VIE was consolidated during the nine months ended September 30,2015 and one additional VIE was consolidated during the nine months ended September 30,2014.

Holders of insured obligations of issuer-sponsored VIEs related to the Company’s international and structured finance insurance segment do not have recourse to the general assets of MBIA. In the event of nonpayment of an insured obligation issued by a consolidated VIE, the Company is obligated to pay principal and interest, when due, on the respective insured obligation only. The Company’s exposure to consolidated VIEs is limited to the credit protection provided on insured obligations and any additional variable interests held by MBIA.

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Loss and Loss Adjustment Expense Reserves

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Loss and Loss Adjustment Expense Reserves

Note 5: Loss and Loss Adjustment Expense Reserves

Loss and Loss Adjustment Expense Process

U.S. Public Finance Insurance

U.S. public finance insured transactions consist of municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, student loan issuers, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. The Company estimates future losses by using probability-weighted scenarios that are customized to each insured transaction. Future loss estimates consider debt service due for each insured transaction, which includes par outstanding and interest due.

As of September 30,2015 and December 31, 2014, the Company established loss and loss adjustment expense (“LAE”) reserves totaling $31 million and $45 million, respectively, related to U.S. public finance issues. As of December 31, 2014, the Company established insurance loss recoverable of $4 million related to U.S. public finance issues.

Certain local governments remain under financial and budgetary stress and a few have filed for protection under the United States Bankruptcy Code, or have entered into state statutory proceedings established to assist municipalities in managing through periods of severe fiscal stress. This could lead to an increase in defaults by such entities on the payment of their obligations and losses or impairments on a greater number of the Company’s insured transactions. The Company monitors and analyzes these situations closely, however, the overall extent and duration of such events are uncertain and the filing for protection under the United States Bankruptcy Code or entering state statutory proceedings does not necessarily result in a default or indicate that an ultimate loss will occur. As of September 30,2015 and December 31, 2014, the Company had $76.6 billion and $98.9 billion, respectively, of gross par outstanding on general obligations, of which $79 million and $152 million, respectively, were reflected on the Company’s “Classified List.” Capital appreciation bonds are reported at the par amount at the time of issuance of the insurance policy. Refer to “Note 6: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for additional information on the Company’s surveillance categories.

International and Structured Finance Insurance

The international and structured finance insurance segment’s case basis reserves and insurance loss recoveries recorded in accordance with GAAP do not include estimates for policies insuring credit derivatives or losses and recoveries on financial guarantee VIEs that are eliminated in consolidation. Policies insuring credit derivative contracts are accounted for as derivatives and are carried at fair value in the Company’s consolidated financial statements under GAAP. The fair values of insured derivative contracts are influenced by a variety of market and transaction-specific factors that may be unrelated to potential future claim payments under the Company’s insurance policies. In the absence of credit impairments on insured derivative contracts or the early termination of such contracts at a loss, the cumulative unrealized losses recorded from these contracts should reverse before or at the maturity of the contracts. Since the Company’s insured credit derivatives have similar terms, conditions, risks, and economic profiles to its financial guarantee insurance policies, the Company evaluates them for impairment in the same way that it estimates loss and LAE for its financial guarantee policies. Refer to “Note 8: Derivative Instruments” for a further discussion of the Company’s use of derivatives and their impact on the Company’s consolidated financial statements.

RMBS Case Basis Reserves and Recoveries (Financial Guarantees)

The Company’s RMBS reserves and recoveries relate to financial guarantee insurance policies. The Company calculated RMBS case basis reserves as of September 30,2015 for both second and first-lien RMBS transactions using a process called the “Roll Rate Methodology.” The Roll Rate Methodology is a multi-step process using a database of loan level information, a proprietary internal cash flow model, and a commercially available model to estimate potential losses and recoveries on insured bonds. “Roll Rate” is defined as the probability that current loans become delinquent and that loans in the delinquent pipeline are charged-off or liquidated. Generally, Roll Rates are calculated for the previous three months and averaged. The loss reserve estimates are based on a probability-weighted average of three scenarios of loan losses (base case, stress case, and an additional stress case).

In calculating ultimate cumulative losses for RMBS, the Company estimates the amount of second-lien loans that are expected to be charged-off (deemed uncollectible by servicers of the transactions) or first-lien loans liquidated in the future. Refer to “Note 6: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for additional information on the Company’s second and first-lien Roll Rate Methodology.

Second-lien RMBS Reserves

The Company’s second-lien RMBS case basis reserves as of September 30,2015 relate to RMBS backed by home equity lines of credit (“HELOC”) and closed-end second mortgages (“CES”).As of September 30,2015 and December 31, 2014, the Company established loss and LAE reserves totaling $47 million and $70 million, respectively, related to second-lien RMBS issues after the elimination of $22 million and $21 million, respectively, as a result of consolidating VIEs.

The Company monitors portfolio performance on a monthly basis against projected performance, reviewing delinquencies, Roll Rates, and prepayment rates (including voluntary and involuntary). However, loan performance remains difficult to predict and losses may exceed expectations. In the event of a material deviation in actual performance from projected performance, the Company would increase or decrease the case basis reserves accordingly. If actual performance were to remain at the current levels for six additional months compared to the probability-weightedoutcome currently used by the Company, the addition to the case basis reserveswould be approximately $32 million.

Second-lien RMBS Recoveries

The Company primarily records two types of recoveries related to insured second-lien RMBS exposures:excess spread that is generated from performing loans in the insured transactions; and “put-back” claims related to those mortgage loans whose inclusion in insured securitizations failed to comply with representations and warranties (“ineligible loans”).

Excess Spread

As of September 30,2015 and December 31, 2014, the Company recorded estimated recoveries of$411 million and $523 million, respectively, for the reimbursement of past and future expected claims through excess spread in insured second-lien RMBS transactions after the elimination of $99 million and $137 million, respectively, as a result of consolidating VIEs. As of September 30,2015, $398 million and $13 million were included in “Insurance loss recoverable” and “Loss and loss adjustment expense reserves” on the Company’s consolidated balance sheets, respectively, after the elimination of $96 million and $3 million, respectively, as a result of consolidating VIEs. As of December 31,2014, $496 million and $27 million were included in “Insurance loss recoverable” and “Loss and loss adjustment expense reserves” on the Company’s consolidated balance sheets, respectively, after the elimination of $132 million and $5 million, respectively, as a result of consolidating VIEs.

Excess spread is generated by performing loans within insured second-lien RMBS securitizations and is the difference between interest inflows on mortgage loan collateral and interest outflows on insured beneficial interests. The amount of excess spread depends on the future loss trends (which include future delinquency trends, average time to charge-off delinquent loans, and the availability of pool mortgage insurance), the future spread between Prime and London Interbank Offered Rate interest rates, and borrower refinancing behavior which results in voluntary prepayments. Minor deviations in loss trends and voluntary prepayments may substantially impact the amounts collected from excess spread.

Ineligible Mortgage Loans

To date, MBIAhas settled the majority of the Company’s put-back claims. Only its claims against Credit Suisse remain outstanding. Settlement amounts have been consistent with the put-back recoveries previously included in the Company’s financial statements.

The contract claim remaining with Credit Suisse is related to the inclusion of ineligible mortgage loans in the 2007-2 Home Equity Mortgage Trust securitization. Credit Suisse has challenged the Company’s assessment of the ineligibility of individual mortgage loans and the dispute is the subject of litigation for which there is no assurance that the Company will prevail.

As of September 30,2015 and December 31, 2014, the Company recorded estimated recoveriesof $394 million and $379 million, respectively, related to its Credit Suisseput-back claims, reflected in “Loan repurchase commitments” presented under the heading “Assets of consolidated variable interest entities” on the Company’s consolidated balance sheets.

Based on the Company’s assessment of the strength of its contractual put-back rights against Credit Suisse, which it is pursuing through litigation claims, as well as on its prior settlements with other sellers/servicers and success of other monolines in litigation against other sellers/servicers, the Company believes it will prevail in enforcing its contractual rights and that it is entitled to collect the full amount of its incurred losses, which totaled $424 million through September 30,2015. The Company is also entitled to collect interest on amounts paid; it believes that in context of its put-back litigation, the appropriate rate should be the New York State statutory rate. However, the Company currently calculates its put-back recoveries using the contractual interest rate, which is lower than the New York State statutory rate.

Notwithstanding the foregoing, uncertainty remains with respect to the ultimate outcome of the litigation with Credit Suisse, which is contemplated in the scenario based-modeling the Company uses. The Credit Suisse recovery scenarios are based on the amount of incurred losses measured against certain probabilities of ultimate resolution of the dispute with Credit Suisse. Most of the probability weight is assigned to partial recovery scenarios and are discounted using the current risk-free discount rates associated with the underlying transaction’s cash flows.

The Company continues to consider all relevant facts and circumstancesin developing its assumptions on expected cash inflows, probability of potential recoveries (including the outcome of litigation) and recovery period. The estimated amount and likelihood of potential recoveries are expected to be revised and supplemented to the extent there are developments in the pending litigation and/or changes to the financial condition of Credit Suisse. While the Company believes it will be successful in realizing its recoveries from its contract claims against Credit Suisse, the ultimate amounts recovered may be materially different from those recorded by the Company given the inherent uncertainty of the manner of resolving the claims (e.g., litigation) and the assumptions used in the required estimation process for accounting purposes which are based, in part, on judgments and other information that are not easily corroborated by historical data or other relevant benchmarks.

First-lien RMBS Reserves

The Company’s first-lien RMBS case basis reserves as of September 30,2015, which primarily relate to RMBS backed by alternative A-paper and subprime mortgage loans, were determined using the Roll Rate Methodology. As of September 30,2015 and December 31,2014, the Company’s loss and LAE reserves were $246 million and $263 million, respectively, related to first-lien RMBS issues.

CDO Reserves

The Company also has loss and LAE reserves on certain transactions within its collateralized debt obligation (“CDO”) portfolio, including its multi-sector CDO and high-yield corporate CDO asset classes. MBIA’s insured multi-sector CDOs are transactions that include a variety of collateral ranging from corporate bonds to structured finance assets (which includes but are not limited to RMBS-related collateral, multi-sector and corporate CDOs). These transactions were insured as either financial guarantee insurance policies or credit derivatives with the majority currently insured in the form of financial guarantees. MBIA’s high yield corporate CDO portfolio comprises middle-market/special-opportunity corporate loan transactions. These transactions were insured as financial guarantee insurance policies.

As of September 30,2015 and December 31, 2014, the Company’s loss and LAE reserves were $149 million and $111 million, respectively, related to the total CDO financial guarantee insurance portfolio after the elimination of $226 million and $225 million, respectively, as a result of consolidating VIEs. For the three and nine months endedSeptember 30,2015, the Company incurred $5 million and $39 million, respectively, of losses and LAE recorded in earnings related to the total CDO financial guarantee insurance portfolio after the elimination of $14 million and $1 million, respectively, of expense as a result of consolidating VIEs. In the event of further deteriorating performance of the collateral referenced or held in the total CDO portfolio, the amount of losses estimated by the Company could increase substantially.

Refer to “Note 6: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for additional information on the Company’s process for estimating reserves on these policies. The methods and assumptions for estimating reserves require substantial judgment of the future performance of each transaction. Actual losses will be a function of the proportion of collateral in the pools that default and the loss severities associated with those defaults.

Loss and LAE Activity

Financial Guarantee Insurance Losses (Excluding Derivative and Consolidated VIEs)

The Company’s financial guarantee insurance losses and LAE, net of reinsurance for the three and nine months endedSeptember 30,2015 and 2014 are presented in the following table:

		Three Months Ended September 30,				Nine Months Ended September 30,
In millions		2015		2014		2015		2014
U.S. Public Finance Insurance Segment		$	(7)	$	(8)	$	(5)	$	(5)
International and Structured Finance Insurance Segment:
	Second-lien RMBS		24		16		52		88
	First-lien RMBS		18		12		2		39
	Other(1)		4		-		30		(40)
Losses and LAE expense (benefit)		$	39	$	20	$	79	$	82
________________
(1) - Includes CDOs, non-U.S. public finance and other issues.

For the three months endedSeptember 30,2015, losses and LAE primarily related to decreases in projected collections from excess spread within the insured second-lien RMBS securitizations and increases in expected payments on first-lien RMBS securitizations.

For the three months endedSeptember 30,2014, losses and LAE primarily related to decreases of expected recoveries on an international road transaction and projected collections from excess spread within insured second-lien RMBS securitizations, partially offset by decreases in expected payments on an international road transaction.

For the nine months endedSeptember 30,2015, losses and LAE primarily related to decreases in projected collections from excess spread within the insured second-lien RMBS securitizations and increases in expected payments on CDOs.

For the nine months endedSeptember 30,2014, losses and LAE primarily related to decreases in projected collections from excess spread within the insured second-lien RMBS securitizations, partially offset by decreases in expected payments of an international road transaction.

Costs associated with remediating insured obligations assigned to the Company’s surveillance categories are recorded as LAE and included in “Losses and loss adjustment” expenses on the Company’s consolidated statements of operations. For the three months endedSeptember 30,2015 and 2014, gross LAE related to remediating insured obligations were $5 million and $3 million, respectively. For the nine months endedSeptember 30,2015 and 2014, gross LAE related to remediating insured obligations were $10 million and $37 million, respectively.

Thefollowing table providesinformationaboutthe financial guaranteesand related claimliabilityincluded in each of MBIA’ssurveillance categoriesasofSeptember 30,2015:

				Surveillance Categories
				Caution		Caution		Caution
				List		List		List		Classified
$ in millions				Low		Medium		High		List		Total
Number of policies					156		19		76		166		417
Number of issues(1)					15		6		6		116		143
Remaining weighted average contract
	period (in years)				7.0		8.2		14.5		6.8		7.6
Gross insured contractual payments
	outstanding:(2)
		Principal		$	4,566	$	250	$	1,213	$	6,712	$	12,741
		Interest			3,451		113		847		2,547		6,958
			Total	$	8,017	$	363	$	2,060	$	9,259	$	19,699
Gross Claim Liability				$	-	$	-	$	-	$	876	$	876
Less:
	Gross Potential Recoveries				-		-		-		755		755
	Discount, net(3)				-		-		-		79		79
Net claim liability (recoverable)				$	-	$	-	$	-	$	42	$	42
Unearned premium revenue				$	69	$	2	$	26	$	60	$	157
__________
(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.
(2) - Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.
(3) - Represents discount related to Gross Claim Liability and Gross Potential Recoveries.

Thefollowing table providesinformationaboutthe financial guaranteesand related claimliabilityincluded in each of MBIA’ssurveillance categoriesasofDecember 31,2014:

				Surveillance Categories
				Caution		Caution		Caution
				List		List		List		Classified
$ in millions				Low		Medium		High		List		Total
Number of policies					38		98		4		175		315
Number of issues(1)					18		7		3		119		147
Remaining weighted average contract
	period (in years)				7.2		12.0		10.1		7.0		7.7
Gross insured contractual payments
	outstanding:(2)
		Principal		$	1,757	$	1,372	$	133	$	8,001	$	11,263
		Interest			696		819		68		3,037		4,620
			Total	$	2,453	$	2,191	$	201	$	11,038	$	15,883
Gross Claim Liability				$	-	$	-	$	-	$	850	$	850
Less:
	Gross Potential Recoveries				-		-		-		860		860
	Discount, net(3)				-		-		-		14		14
Net claim liability (recoverable)				$	-	$	-	$	-	$	(24)	$	(24)
Unearned premium revenue				$	63	$	19	$	5	$	80	$	167
__________
(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.
(2) - Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.
(3) - Represents discount related to Gross Claim Liability and Gross Potential Recoveries.

The gross claim liability in the preceding tables represents the Company’s estimate of undiscounted probability-weighted future claim payments. As of September 30,2015, the gross claim liability primarily related to insured first-lien RMBS issues and CDOs. As of December 31,2014,the gross claim liability primarily related to insured first and second-lien RMBS issues, CDOs and an international road transaction.

The gross potential recoveriesrepresent the Company’s estimate of undiscounted probability-weighted recoveries of actual claim payments and recoveries of estimated future claim payments. As of September 30,2015,the gross potential recoveries principally related to insured second-lien RMBS. As of December 31, 2014,the gross potential recoveries principally related to insured second-lien RMBSand U.S. public finance issues. The Company’s recoveries have been, and remain based on either salvage rights, the rights conferred to MBIA through the transactional documents (inclusive of the insurance agreement), or subrogation rights embedded within financial guarantee insurance policies. Expected salvage and subrogation recoveries, as well as recoveries from other remediation efforts, reduce the Company’s claim liability. Once a claim payment has been made, the claim liability has been satisfied and MBIA’s right to recovery is no longer considered an offset to future expected claim payments, it is recorded as a salvage asset. The amount of recoveries recorded by the Company is limited to paid claims plus the present value of projected future claim payments. As claim payments are made, the recorded amount of potential recoveries may exceed the remaining amount of the claim liability for a given policy.The gross claim liability and gross potential recoveries reflect the elimination of claim liabilities and potential recoveries related to VIEs consolidated by the Company.

The following table presents the components of the Company’s loss and LAE reserves and insurance loss recoverable as reported on the Company’s consolidated balance sheets as of September 30,2015 and December 31, 2014 for insured obligations within MBIA’s “Classified List.” The loss reserves (claim liability) and insurance claim loss recoverable included in the following table represent the present value of the probability-weighted future claim payments and recoveries reported in the preceding tables.

		As of		As of
In millions		September 30, 2015		December 31, 2014
Loss reserves (claim liability)		$	447	$	464
LAE reserves			33		42
	Loss and LAE reserves	$	480	$	506
Insurance claim loss recoverable		$	(437)	$	(533)
LAE insurance loss recoverable			-		-
	Insurance loss recoverable	$	(437)	$	(533)
Reinsurance recoverable on unpaid losses		$	6	$	6
Reinsurance recoverable on unpaid LAE reserves			-		1
	Reinsurance recoverable on paid and unpaid losses	$	6	$	7

As of September 30,2015, loss and LAE reserves include $700million of reserves for expected future payments, partially offset by expected recoveries of such future payments of $220 million. As of December 31,2014, loss and LAE reserves include $653million of reserves for expected future payments, partially offset by expected recoveries of such future payments of $147 million.

As of September 30,2015 and December 31, 2014, the insurance loss recoverable primarily related to expected future recoveries on second-lien RMBS transactions resulting from excess spread generated by performing loans in such transactions. The decrease in insurance loss recoverable wasprimarily due to actual collections from excess spread within insured second-lien RMBS securitizations.

The following table presents changes in the Company’s loss and LAE reserves for the nine months endedSeptember 30,2015. Changes in loss and LAE reserves attributable to the accretion of the claim liability discount, changes in discount rates, changes in amount and timingof estimated payments and recoveries, changes in assumptions and changes in LAE reserves are recorded in “Losses and loss adjustment” expenses in the Company’s consolidated statements of operations. As of September 30,2015, the weighted average risk-free rate used to discount the Company’s loss reserves (claim liability) was 1.56%. LAE reserves are generally expected to be settled within a one-year period and are not discounted.

In millions

Changes in Loss and LAE Reserves for the Nine Months Ended September 30, 2015

Gross Loss

Loss

Gross Loss

and LAE

Payments

Accretion

Changes in

and LAE

Reserves as of

for Cases

of Claim

Changes in

Unearned

Changes in

Reserves as of

December 31,

with

Liability

Discount

Changes in

Premium

LAE

September 30,

2014

Reserves

Discount

Rates

Assumptions

Revenue

Reserves

Other(1)

2015

$

506

$

(42)

$

6

$

(28)

$

46

$

13

$

(9)

$

(12)

$

480

____________

(1) - Primarily changes in amount and timing of payments.

The decrease in the Company’s gross loss and LAE reserves reflected in the preceding table was primarily related to actual loss payments associated with first and second-lien RMBS issues and changes in discount rates on U.S. public finance issues. These were partially offset by changes in assumptions on U.S. public finance issues and changes in timing of payments on insured first and second-lien RMBS issues.

CurrentperiodchangesintheCompany’sestimateofpotentialrecoveriesmayberecordedasaninsuranceloss recoverableasset,nettedagainstthegrosslossandLAEreserveliability,or both.The following table presents changes in the Company’s insurance loss recoverable and changes in recoveries on unpaid losses reported within the Company’s claim liability for the nine months endedSeptember 30,2015. Changes in insurance loss recoverable attributable to the accretion of the discount on the recoverable, changes in discount rates, changes in amount and timingof estimated collections, changes in assumptions and changes in LAE recoveries are recorded in “Losses and loss adjustment” expenses in the Company’s consolidated statements of operations.

				Changes in Insurance Loss Recoverable and Recoveries on Unpaid Losses
				for the Nine Months Ended September 30, 2015
				Collections
		As of		for Cases		Accretion		Changes in				Changes in				As of
		December 31,		with		of		Discount		Changes in		LAE				September 30,
In millions		2014		Recoveries		Recoveries		Rates		Assumptions		Recoveries		Other(1)		2015
Insurance loss
	recoverable	$	533	$	(56)	$	6	$	6	$	(24)	$	-	$	(28)	$	437
Recoveries on unpaid
	losses		147		-		2		1		71		(1)		-		220
Total		$	680	$	(56)	$	8	$	7	$	47	$	(1)	$	(28)	$	657
____________
(1) Primarily changes in amount and timing of collections.

Thedecrease in the Company’sinsuranceloss recoverableand recoveries on unpaid losses during2015was primarily duetochanges in assumptions on first and second-lien RMBS issues and an international road transaction, actual collections associated with first and second-lien RMBS issues and changes in the amount of expected collections on first and second-lien RMBS issues.These were partially offset by changes in assumptions on CDOs.

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Investments

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Investments

Note 7: Investments

Investments, excluding those elected under the fair value option, include debt and equity securities classified as either available-for-sale (“AFS”) or HTM. Other AFS investments primarily comprised money market funds.

Thefollowingtablespresenttheamortizedcost,fairvalue, corresponding gross unrealized gains and losses and other-than-temporaryimpairments (“OTTI”) for AFS and HTM investments in the Company’s consolidatedinvestmentportfolioasofSeptember 30,2015andDecember 31, 2014:

				September 30, 2015
						Gross		Gross				Other-Than-
				Amortized		Unrealized		Unrealized		Fair		Temporary
In millions				Cost		Gains		Losses		Value		Impairments(1)
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency			$	818	$	39	$	(1)	$	856	$	-
	State and municipal bonds				1,779		83		(11)		1,851		-
	Foreign governments				212		3		(2)		213		-
	Corporate obligations				1,772		31		(104)		1,699		(88)
	Mortgage-backed securities:
		Residential mortgage-backed agency			1,034		14		(5)		1,043		-
		Residential mortgage-backed non-agency			58		3		(5)		56		(4)
		Commercial mortgage-backed			16		-		-		16		-
	Asset-backed securities:
		Collateralized debt obligations			82		-		(20)		62		-
		Other asset-backed			371		2		(10)		363		-
			Total fixed-maturity investments		6,142		175		(158)		6,159		(92)
Money market securities					111		-		-		111		-
Perpetual debt and equity securities					12		1		-		13		-
Total AFS investments				$	6,265	$	176	$	(158)	$	6,283	$	(92)
HTM Investments
Assets of consolidated VIEs:
	Corporate obligations			$	2,707	$	12	$	(277)	$	2,442	$	-
Total HTM investments				$	2,707	$	12	$	(277)	$	2,442	$	-
_______________
(1) - Represents unrealized gains or losses on OTTI securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI.

				December 31, 2014
						Gross		Gross				Other-Than-
				Amortized		Unrealized		Unrealized		Fair		Temporary
In millions				Cost		Gains		Losses		Value		Impairments(1)
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency			$	631	$	39	$	(3)	$	667	$	-
	State and municipal bonds				1,644		94		(8)		1,730		-
	Foreign governments				283		7		-		290		-
	Corporate obligations				1,984		44		(92)		1,936		(86)
	Mortgage-backed securities:
		Residential mortgage-backed agency			1,116		17		(7)		1,126		-
		Residential mortgage-backed non-agency			54		3		(4)		53		(4)
		Commercial mortgage-backed			19		1		-		20		-
	Asset-backed securities:
		Collateralized debt obligations			113		-		(21)		92		-
		Other asset-backed			231		3		(12)		222		-
			Total fixed-maturity investments		6,075		208		(147)		6,136		(90)
Money market securities					422		-		-		422		-
Perpetual debt and equity securities					12		1		-		13		-
Total AFS investments				$	6,509	$	209	$	(147)	$	6,571	$	(90)
HTM Investments
Assets of consolidated VIEs:
	Corporate obligations			$	2,757	$	77	$	(202)	$	2,632	$	-
Total HTM investments				$	2,757	$	77	$	(202)	$	2,632	$	-
_______________
(1) - Represents unrealized gains or losses on OTTI securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI.

Thefollowing table presentsthe distribution bycontractual maturityofAFS and HTM fixed-maturitysecurities at amortizedcostand fairvalue asofSeptember 30,2015.Contractual maturitymaydifferfromexpected maturityasborrowers mayhave the rightto call orprepayobligations.

	AFS Securities				HTM Securities
					Consolidated VIEs
	Amortized				Amortized
In millions	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	671	$	672	$	-	$	-
Due after one year through five years		1,442		1,460		-		-
Due after five years through ten years		923		953		-		-
Due after ten years		1,545		1,534		2,707		2,442
Mortgage-backed and asset-backed		1,561		1,540		-		-
Total fixed-maturity investments	$	6,142	$	6,159	$	2,707	$	2,442

Deposited and Pledged Securities

Thefairvalue ofsecuritieson depositwith variousregulatoryauthoritiesasofSeptember 30,2015 and December 31, 2014was$10 million.Thesedepositsare required to complywith state insurance laws.

Investmentagreement obligations requirethe Companyto pledge securitiesascollateral. Securities pledged in connection with investment agreements may not be repledged by the investment agreement counterparty. AsofSeptember 30,2015and December 31, 2014,the fairvalue ofsecuritiespledged ascollateral for these investmentagreementsapproximated$487million and $532million,respectively.The Company’scollateral asofSeptember 30,2015consistedprincipallyofU.S.Treasuryand governmentagencyand state and municipal bonds,and wasprimarilyheld with majorU.S.banks.Additionally,the Companypledgedcash and moneymarketsecuritiesas collateral underinvestmentagreementsin theamountof$21 million and $26 million asofSeptember 30,2015and December 31, 2014,respectively.

Impaired Investments

The following tables present the gross unrealized losses related to AFS and HTM investments as of September 30,2015 and December 31, 2014:

				September 30, 2015
				Less than 12 Months				12 Months or Longer				Total
				Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
In millions				Value		Losses		Value		Losses		Value		Losses
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency			$	136	$	(1)	$	50	$	-	$	186	$	(1)
	State and municipal bonds				351		(7)		42		(4)		393		(11)
	Foreign governments				21		(1)		3		(1)		24		(2)
	Corporate obligations				539		(13)		71		(91)		610		(104)
	Mortgage-backed securities:
		Residential mortgage-backed agency			264		(1)		181		(4)		445		(5)
		Residential mortgage-backed non-agency			24		(1)		18		(4)		42		(5)
		Commercial mortgage-backed			7		-		1		-		8		-
	Asset-backed securities:
		Collateralized debt obligations			-		-		61		(20)		61		(20)
		Other asset-backed			203		(1)		43		(9)		246		(10)
			Total fixed-maturity investments		1,545		(25)		470		(133)		2,015		(158)
Perpetual debt and equity securities					2		-		2		-		4		-
Total AFS investments				$	1,547	$	(25)	$	472	$	(133)	$	2,019	$	(158)
HTM Investments
Assets of consolidated VIEs:
	Corporate obligations			$	1,096	$	(23)	$	321	$	(254)	$	1,417	$	(277)
Total HTM investments				$	1,096	$	(23)	$	321	$	(254)	$	1,417	$	(277)

				December 31, 2014
				Less than 12 Months				12 Months or Longer				Total
				Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
In millions				Value		Losses		Value		Losses		Value		Losses
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency			$	197	$	-	$	175	$	(3)	$	372	$	(3)
	State and municipal bonds				60		(1)		257		(7)		317		(8)
	Foreign governments				20		-		-		-		20		-
	Corporate obligations				468		(1)		251		(91)		719		(92)
	Mortgage-backed securities:
		Residential mortgage-backed agency			16		-		387		(7)		403		(7)
		Residential mortgage-backed non-agency			10		-		19		(4)		29		(4)
		Commercial mortgage-backed			4		-		6		-		10		-
	Asset-backed securities:
		Collateralized debt obligations			1		-		81		(21)		82		(21)
		Other asset-backed			69		-		44		(12)		113		(12)
			Total fixed-maturity investments		845		(2)		1,220		(145)		2,065		(147)
Perpetual debt and equity securities					6		-		-		-		6		-
Total AFS investments				$	851	$	(2)	$	1,220	$	(145)	$	2,071	$	(147)
HTM Investments
Assets of consolidated VIEs:
	Corporate obligations			$	-	$	-	$	373	$	(202)	$	373	$	(202)
Total HTM investments				$	-	$	-	$	373	$	(202)	$	373	$	(202)

Gross unrealized losses on AFS and HTMsecurities increased as of September 30,2015 compared with December 31,2014 primarily due to widening of credit spreads for corporate obligations.

With the weighting applied on the fair value of each security relative to the total fair value, the weighted average contractual maturity of securities in an unrealized loss position as of September 30,2015and December 31, 2014 was 19 and 13 years, respectively. As of September 30,2015and December 31, 2014, there were 66 and 143 securities, respectively, that were in an unrealized loss position for a continuous twelve-month period or longer, of which, fair values of 23were below book value by more than 5%.

The following table presents the distribution of securities in an unrealized loss position for a continuous twelve-month period or longer where fair value was below book value by more than 5% as of September 30,2015:

	AFS Securities					HTM Securities
Percentage of Fair Value	Number of	Book Value		Fair Value		Number of	Book Value		Fair Value
Below Book Value	Securities	(in millions)		(in millions)		Securities	(in millions)		(in millions)
> 5% to 15%	7	$	13	$	13	-	$	-	$	-
> 15% to 25%	8		82		65	-		-		-
> 25% to 50%	5		5		3	1		575		321
> 50%	2		122		17	-		-		-
Total	22	$	222	$	98	1	$	575	$	321

The following table presents the fair value and gross unrealized loss by credit rating category of ABS, MBS and corporate obligations included in the Company’s consolidated AFS investment portfolio, as of September 30,2015,for which fair value was less than amortized cost. The credit ratings are based on ratings from Moody’s as of September 30,2015or an alternate ratings source, such as S&P, when a security is not rated by Moody’s. For investments that are insured by various third-party guarantee insurers, the credit rating reflects the higher of the insurer’s rating or the underlying bond’s rating.

																		Below
In millions		Aaa				Aa				A				Baa				Investment Grade				Not Rated				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Asset Type		Value		Loss		Value		Loss		Value		Loss		Value		Loss		Value		Loss		Value		Loss		Value		Loss
ABS		$	153	$	(1)	$	88	$	(1)	$	1	$	-	$	2	$	-	$	62	$	(28)	$	1	$	-	$	307	$	(30)
MBS			446		(4)		2		-		3		-		5		-		26		(2)		13		(4)		495		(10)
Corporate obligations			78		(1)		179		(3)		260		(4)		71		(6)		8		-		14		(90)		610		(104)
	Total	$	677	$	(6)	$	269	$	(4)	$	264	$	(4)	$	78	$	(6)	$	96	$	(30)	$	28	$	(94)	$	1,412	$	(144)

Corporate obligations in the table above include a security in the not rated category, for which the Company recorded an additional credit loss impairment for the nine months endedSeptember 30,2015. Refer to “Credit Loss Rollforward” section within the OTTI section for further information.

The total ABS, MBS and corporate obligations reported in the preceding table include those which are guaranteed by financial guarantors. In addition, the following table presents information on ABS and MBS guaranteed by the Company and third-party financial guarantors.

			Insured Securities Rated Below
			Investment Grade without the
			Effect of Guarantee
	Average Credit Rating with the	Average Credit Rating without the	(in millions)
Asset Type	Effect of Guarantee	Effect of Guarantee	Fair Value		Percentage
ABS	Below Investment Grade	Below Investment Grade	$	60	65	%
MBS	Below Investment Grade	Below Investment Grade	$	19	100	%

Refer to the table in the “Determination of Credit Loss Guaranteed by the Company and Other Third-Party Guarantors” section within the OTTI section of this note for information on the insured securities included in the table above.

The Company concluded that it does not have the intent to sell securities in an unrealized loss position and it is more likely than not, that it would not have to sell these securities before recovery of their cost basis. In making this conclusion, the Company examined the cash flow projections for its investment portfolios, the potential sources and uses of cash in its businesses, and the cash resources available to its business other than sales of securities. It also considered the existence of any risk management or other plans as of September 30,2015that would require the sale of impaired securities. Impaired securities that the Company intends to sell before the expected recovery of such securities’ fair values have been written down to fair value.

Other-Than-Temporary Impairments

Evaluating AFS Securities for OTTI

The Company has an ongoing review process for all securities in its investment portfolio, including a quarterly assessment of OTTI. This evaluation includes both qualitative and quantitative considerations. In assessing whether a decline in value is related to a credit loss, the Company considers several factors, including but not limited to (i) the magnitude and duration of declines in fair value; (ii) the reasons for the declines in fair value, such as general credit spread movements in each asset-backed sector, transaction-specific changes in credit spreads, credit rating downgrades, modeled defaults, and principal and interest payment priorities within each investment structure; and (iii) any guarantees associated with a security such as those provided by financial guarantee insurance companies, including MBIA Corp. and National.

In calculating credit-related losses, the Company utilizes cash flow modeling based on the type of security. The Company’s cash flow analysis considers all sources of cash, including credit enhancement, that support the payment of amounts owed by an issuer of a security. This includes the consideration of cash expected to be provided by financial guarantors, including MBIA Corp. and National, resulting from an actual or potential insurance policy claim. In general, any change in the amount and/or timing of cash flows received or expected to be received, whether or not such cash flows are contractually defined, is reflected in the Company’s cash flow analysis for purposes of assessing an OTTI loss on an impaired security.

Each quarter, an internal committee, comprising staff that is independent of the Company’s evaluation process for determining OTTI of securities, reviews and approves the valuation of investments. Among other responsibilities, this committee ensures that the Company’s process for identifying and calculating OTTI, including the use of models and assumptions, is reasonable and complies with the Company’s internal policy.

Determination of Credit Loss on ABS, MBS and Corporate Obligations

ABS investments are evaluated for OTTI using historical collateral performance, deal waterfall and structural protections, credit ratings, and forward looking projections of collateral performance based on business and economic conditions specific to each collateral type and risk. The underlying collateral is evaluated to identify any specific performance concerns, and stress scenarios are considered in forecasting ultimate returns of principal. Based on this evaluation, if a principal default is projected for a security, estimated future cash flows are discounted at the security’s interest rate used to recognize interest income on the security. For CDO investments, the Company utilizes the same tools as its RMBS investments discussed below, aggregating the bond level cash flows to the CDO investment level. If the present value of cash flows is less than the Company’s amortized cost for the security, the difference is recorded as an OTTI loss.

RMBS investments are evaluated for OTTI using several quantitative tools. Loan level data is obtained and analyzed in a model that produces prepayment, default, and severity vectors. The model utilizes macro inputs, including housing price assumptions and interest rates. The vector outputs are used as inputs to a third-party cash flow model, which considers deal waterfall dynamics and structural features, to generate cash flows for an RMBS investment. The expected cash flows of the security are then discounted at the interest rate used to recognize interest income of the security to arrive at a present value amount. If the present value of the cash flows is less than the Company’s amortized cost for the investment, the difference is recorded as an OTTI loss.

Corporate obligation investments are evaluated for OTTI using credit analysis techniques. The Company’s analysis includes a detailed review of a number of quantitative and qualitative factors impacting the value of an individual security. These factors include the interest rate of the security (fixed or floating), the security’s current market spread, any collateral supporting the security, the security’s position in the issuer’s capital structure, and credit rating upgrades or downgrades. Additionally, these factors include an assessment of various issuer-related credit metrics including market capitalization, earnings, cash flow, capitalization, interest coverage, leverage, liquidity, management and a third-party quantitative default probability model. The Company’s analysis is augmented by comparing market prices for similar securities of other issuers in the same sector, as well as any recent corporate or government actions that may impact the ultimate return of principal. If the Company determines that a principal default is projected, a recovery analysis is performed using the above data. If the Company’s estimated recovery value for the security is less than its amortized cost, the difference is recorded as an OTTI loss.

Determination of Credit Loss Guaranteed by the Company and Other Third-Party Guarantors

The Company does not record OTTI related to credit concerns about issuers of securities insured by MBIA Corp. and National since investors in these securities, including MBIA, are guaranteed payment of principal and interest when due by MBIA. Securities insured by the Company, whether or not owned by the Company, are evaluated for impairment as part of its insurance surveillance process and, therefore, losses on securities insured by the Company are recorded in accordance with its loss reserving policy. Refer to “Note 2: Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31,2014for information about the Company’s loss reserving policy and “Note 5: Loss and Loss Adjustment Expense Reserves” for information about loss reserves.

In considering cash expected to be provided from other third-party financial guarantors, the Company assesses the financial guarantor’s ability to make claim payments under a variety of scenarios that test the guarantor’s ultimate claims paying ability. The weighted average outcome of these scenarios, combined with the cash flows provided by the insured security, are used to determine the recoverability of the Company’s amortized cost.

The following table provides information about securities held by the Company as of September 30,2015 that were in an unrealized loss position and insured by a financial guarantor, along with the amount of insurance loss reserves corresponding to the par amount owned by the Company:

					Unrealized		Insurance Loss
In millions			Fair Value		Loss		Reserve (2)
Asset-backed:
	MBIA(1)		$	93	$	(28)	$	20
Mortgage-backed:
	MBIA(1)			19		(1)		14
Other:
	MBIA(1)			79		(4)		-
	Other			1		-		-
		Total other		80		(4)		-
Total			$	192	$	(33)	$	34
_______________
(1) - Includes investments insured by MBIA Corp. and National.
(2) - Insurance loss reserve estimates are based on the proportion of par value owned to the total amount of par value insured.

Credit Loss Rollforward

Theportionofcertain OTTIlosseson fixed-maturitysecuritiesthatdoesnotrepresentcredit lossesisrecognized in accumulated other comprehensive income (loss) (“AOCI”).Fortheseimpairments,the netamount recognizedinearningsrepresentsthe difference between the amortized costofthe securityand thenetpresentvalue of itsprojected futurediscountedcash flowspriorto impairment.Anyremainingdifference between thefairvalue and amortizedcostisrecognizedinAOCI.The following tablepresentsthe amountofcreditlossimpairmentsrecognized in earningson fixed-maturitysecuritiesheldbyMBIAasofthe dates indicated,forwhich a portion ofthe OTTIlosseswasrecognized in AOCI, and thecorresponding changesin such amounts. The additional credit loss impairments for the three and nine months endedSeptember 30,2015 and 2014, primarily related to a corporate obligationthat incurred liquidity concerns, ongoing credit risk and other adverse financial conditions.

In millions		Three Months Ended September 30,				Nine Months Ended September 30,
Credit Losses Recognized in Earnings Related to Other-Than-Temporary Impairments		2015			2014	2015			2014
Beginning balance		$	22	$	-	$	16	$	175
Additions for credit loss impairments recognized in the current period on securities not
	previously impaired		-		14		-		14
Additions for credit loss impairments recognized in the current period on securities
	previously impaired		3		-		9		-
Reductions for credit loss impairments previously recognized on securities sold during
	the period		-		-		-		(174)
Reductions for increases in cash flows expected to be collected over the remaining
	life of the security		-		-		-		(1)
Ending balance		$	25	$	14	$	25	$	14

Sales of Available-for-Sale Investments

Gross realized gainsand losses are recorded within “Net gains (losses) on financial instruments at fair value and foreign exchange” on the Company’s consolidated statements of operations. The proceeds and the gross realized gains and losses from sales of fixed-maturity securities held as AFS for the three and nine months endedSeptember 30,2015 and 2014are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2015		2014		2015		2014
Proceeds from sales	$	251	$	131	$	630	$	594
Gross realized gains	$	6	$	4	$	14	$	61
Gross realized losses	$	(2)	$	-	$	(11)	$	(13)

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Investments (Net Realized Gains (Losses) From Sales Of Available-For-Sale Securities) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Investments [Abstract]
Proceeds from sales	$ 251	$ 131	$ 630	$ 594
Available For Sale Securities Realized Gain Loss [Abstract]
Gross realized gains	6	4	14	61
Gross realized losses	$ (2)	$ 0	$ (11)	$ (13)

XML

Derivative Instruments (Credit Derivatives Sold) (Detail) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Credit Default Swap [Member]
Derivative [Line Items]
Weighted average remaining expected maturity	2 years 1 month 6 days	1 year 7 months 6 days
Insured Swaps [Member]
Derivative [Line Items]
Weighted average remaining expected maturity	16 years 8 months 12 days	16 years 8 months 12 days
Insurance Operations [Member]
Derivative [Line Items]
Derivative notional amount	$ 7,146	$ 13,525
Total fair value of credit derivatives	(124)	(246)
Insurance Operations [Member] | Credit Default Swap [Member]
Derivative [Line Items]
Derivative notional amount	3,318	9,481
Total fair value of credit derivatives	(121)	(244)
Insurance Operations [Member] | Insured Swaps [Member]
Derivative [Line Items]
Derivative notional amount	3,828	4,044
Total fair value of credit derivatives	(3)	(2)
Insurance Operations [Member] | Other Credit Derivatives [Member]
Derivative [Line Items]
Derivative notional amount	0	0
Total fair value of credit derivatives	0	0
Credit Rating Aaa [Member] | Insurance Operations [Member]
Derivative [Line Items]
Derivative notional amount	2,018	6,914
Total fair value of credit derivatives	0	(2)
Credit Rating Aaa [Member] | Insurance Operations [Member] | Credit Default Swap [Member]
Derivative [Line Items]
Derivative notional amount	2,018	6,914
Credit Rating Aaa [Member] | Insurance Operations [Member] | Insured Swaps [Member]
Derivative [Line Items]
Derivative notional amount	0	0
Credit Rating Aaa [Member] | Insurance Operations [Member] | Other Credit Derivatives [Member]
Derivative [Line Items]
Derivative notional amount	0	0
Credit Rating Aa [Member] | Insurance Operations [Member]
Derivative [Line Items]
Derivative notional amount	111	363
Total fair value of credit derivatives	0	0
Credit Rating Aa [Member] | Insurance Operations [Member] | Credit Default Swap [Member]
Derivative [Line Items]
Derivative notional amount	0	246
Credit Rating Aa [Member] | Insurance Operations [Member] | Insured Swaps [Member]
Derivative [Line Items]
Derivative notional amount	111	117
Credit Rating Aa [Member] | Insurance Operations [Member] | Other Credit Derivatives [Member]
Derivative [Line Items]
Derivative notional amount	0	0
Credit Rating A [Member] | Insurance Operations [Member]
Derivative [Line Items]
Derivative notional amount	3,043	3,903
Total fair value of credit derivatives	(3)	(2)
Credit Rating A [Member] | Insurance Operations [Member] | Credit Default Swap [Member]
Derivative [Line Items]
Derivative notional amount	304	968
Credit Rating A [Member] | Insurance Operations [Member] | Insured Swaps [Member]
Derivative [Line Items]
Derivative notional amount	2,739	2,935
Credit Rating A [Member] | Insurance Operations [Member] | Other Credit Derivatives [Member]
Derivative [Line Items]
Derivative notional amount	0	0
Credit Rating Bbb [Member] | Insurance Operations [Member]
Derivative [Line Items]
Derivative notional amount	957	1,163
Total fair value of credit derivatives	(2)	(2)
Credit Rating Bbb [Member] | Insurance Operations [Member] | Credit Default Swap [Member]
Derivative [Line Items]
Derivative notional amount	0	193
Credit Rating Bbb [Member] | Insurance Operations [Member] | Insured Swaps [Member]
Derivative [Line Items]
Derivative notional amount	957	970
Credit Rating Bbb [Member] | Insurance Operations [Member] | Other Credit Derivatives [Member]
Derivative [Line Items]
Derivative notional amount	0	0
Credit Rating Below Investment Grade [Member] | Insurance Operations [Member]
Derivative [Line Items]
Derivative notional amount	1,017	1,182
Total fair value of credit derivatives	(119)	(240)
Credit Rating Below Investment Grade [Member] | Insurance Operations [Member] | Credit Default Swap [Member]
Derivative [Line Items]
Derivative notional amount	996	1,160
Credit Rating Below Investment Grade [Member] | Insurance Operations [Member] | Insured Swaps [Member]
Derivative [Line Items]
Derivative notional amount	21	22
Credit Rating Below Investment Grade [Member] | Insurance Operations [Member] | Other Credit Derivatives [Member]
Derivative [Line Items]
Derivative notional amount	$ 0	$ 0

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Investments (Credit Losses Recognized In Earnings Related To OTTI Losses Recognized In Accumulated Other Comprehensive Income (Loss)) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Other than temporary impairment credit lossesfor available for sale securities rollforward [Abstract]
Beginning Balance	$ 22	$ 0	$ 16	$ 175
Additions For Credit Loss Impairments Recognized In The Current Period On Securities Not Previous Impaired	0	14	0	14
Additions For Credit Loss Impairments Recognized In The Current Period On Securities Previously Impaired	3	0	9	0
Reductions For Credit Loss Impairments Previously Recognized On Securities Sold During The Period	0	0	0	(174)
Reductions For Increases In Cash Flows Expected To Be Collected Over The Remaining Life Of The Security	0	0	0	(1)
Ending Balance	$ 25	$ 14	$ 25	$ 14

XML

Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Changes In The Components Of AOCI

		Unrealized
		Gains (Losses)
		on AFS		Foreign Currency
In millions		Securities, Net		Translation, Net		Total
Balance, December 31, 2014		$	34	$	(13)	$	21
	Other comprehensive income (loss) before reclassifications		(27)		(13)		(40)
	Amounts reclassified from AOCI		9		-		9
Total other comprehensive income (loss)			(18)		(13)		(31)
Balance, September 30, 2015		$	16	$	(26)	$	(10)

Reclassifications From AOCI

In millions		Amounts Reclassified from AOCI
		Three Months Ended September 30,				Nine Months Ended September 30,
Details about AOCI Components		2015		2014		2015		2014		Affected Line Item on the Consolidated Statements of Operations
Unrealized gains (losses) on AFS securities:
	Realized gain (loss) on sale of securities	$	(5)	$	-	$	(6)	$	(20)	Net gains (losses) on financial instruments at fair value and foreign exchange
	OTTI		(3)		-		(3)		-	Net investment losses related to OTTI
	Amortization on securities		(1)		-		(4)		(2)	Net investment income
			(9)		-		(13)		(22)	Income (loss) before income taxes
			(2)		-		(4)		(8)	Provision (benefit) for income taxes
			(7)		-		(9)		(14)	Net income (loss)
Foreign currency translation:
	Realized gain (loss) on liquidation of foreign entity		-		-		-		(4)	Net gains (losses) on financial instruments at fair value and foreign exchange
Total reclassifications for the period		$	(7)	$	-	$	(9)	$	(18)	Net income (loss)

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Fair Value Of Financial Instruments (Changes In Level 3 Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Detail) - Fair Value Inputs Level 3 [Member] - USD ($) $ in Millions		3 Months Ended				9 Months Ended
		Sep. 30, 2015		Sep. 30, 2014		Sep. 30, 2015		Sep. 30, 2014
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		$ 2,046		$ 2,295		$ 2,097		$ 2,352
Realized gains/(losses), assets		0		0		(2)		1
Unrealized gains/(losses) included in earnings, assets		0		14		7		30
Unrealized gains/(losses) included in OCI, assets		1		(4)		4		27
Foreign exchange recognized in OCI or earnings, assets		3		(1)		5		(1)
Purchases, assets		45		3		157		25
Issuances, assets		0		0				0
Settlements, assets		(72)		(80)		(215)		(241)
Sales, assets		0		(1)		(16)		(68)
Transfers into level 3, assets	[1]	3		55		34		238
Transfers out of level 3, assets	[1]	(77)		(1)		(122)		(83)
Ending balance, fair value assets		1,949		2,280		1,949		2,280
Change in unrealized gains/(losses) for the period included in earnings for assets still held, assets		(3)		14		5		59
Beginning balance, fair value liabilities		1,705		1,395		1,200		2,301
Realized gains/(losses), liabilities		18		24		30		418
Unrealized gains/(losses included in earnings, liabilities		(15)		(40)		(112)		(801)
Unrealized gains/(losses) included in OCI, liabilities		0		0		0		0
Foreign exchange recognized in OCI or earnings, liabilities		0		(18)		(16)		(19)
Purchases, liabilities		0		0		695		0
Issuances, liabilities		0		0		0		3
Settlements, liabilities		(85)		(84)		(174)		(584)
Sales, liabilities	[2]	0		0		0		(41)
Transfers into Level 3, liabilities		0	[1]	0	[1]	0		0
Transfers out of Level 3, liabilities		0	[1]	0	[1]	0		0
Ending balance, fair value liabilities		1,623		1,277		1,623		1,277
Change in unrealized gains/(losses) for the period included in earnings for liabilities still held, liabilities		(15)		(24)		(116)		60
Residential Prime Financing Receivable [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		1,318		1,539		1,431		1,612
Unrealized gains/(losses) included in earnings, assets		(12)		12		(15)		48
Settlements, assets		(62)		(56)		(172)		(165)
Ending balance, fair value assets		1,244		1,495		1,244		1,495
Change in unrealized gains/(losses) for the period included in earnings for assets still held, assets		(12)		12		(15)		48
Other Loans Receivable [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		108				0
Unrealized gains/(losses) included in earnings, assets		(1)				(1)
Purchases, assets						108
Ending balance, fair value assets		107				107
Change in unrealized gains/(losses) for the period included in earnings for assets still held, assets		(1)				(1)
Loan Repurchase Commitments [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		388		363		379		359
Unrealized gains/(losses) included in earnings, assets		6		2		15		6
Ending balance, fair value assets		394		365		394		365
Change in unrealized gains/(losses) for the period included in earnings for assets still held, assets		6		2		15		6
State and municipal bonds [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		5		57		8		19
Unrealized gains/(losses) included in OCI, assets								1
Purchases, assets		45				45
Settlements, assets		(3)		(1)		(4)		(3)
Sales, assets								(3)
Transfers into level 3, assets				2				46	[1]
Transfers out of level 3, assets						(2)	[1]	(2)
Ending balance, fair value assets		47		58		47		58
Foreign Government Debt [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		5		5		6		12
Foreign exchange recognized in OCI or earnings, assets						(1)
Settlements, assets		0		(6)				(15)
Transfers into level 3, assets	[1]			7				9
Ending balance, fair value assets		5		6		5		6
Corporate Obligations [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		8		34		10		48
Realized gains/(losses), assets								3
Unrealized gains/(losses) included in earnings, assets								3
Unrealized gains/(losses) included in OCI, assets								(4)
Foreign exchange recognized in OCI or earnings, assets				(1)				(1)
Purchases, assets				3				9
Settlements, assets				(1)				(3)
Sales, assets				(1)				(23)
Transfers into level 3, assets		0	[1]	4		15	[1]	7	[1]
Transfers out of level 3, assets	[1]					(17)		(1)
Ending balance, fair value assets		8		38		8		38
Change in unrealized gains/(losses) for the period included in earnings for assets still held, assets								2
Corporate Obligations [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		35		62		55		48
Unrealized gains/(losses) included in earnings, assets		1
Settlements, assets						(6)		(4)
Transfers into level 3, assets		3		7		3		25	[1]
Transfers out of level 3, assets		(28)				(41)
Ending balance, fair value assets		11		69		11		69
Change in unrealized gains/(losses) for the period included in earnings for assets still held, assets								0
Residential Mortgage Backed Agency [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets				8				0
Settlements, assets				(8)				(8)
Transfers into level 3, assets	[1]							37
Transfers out of level 3, assets	[1]							(29)
Ending balance, fair value assets				0				0
Residential Mortgage Backed Non Agency [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets								6
Unrealized gains/(losses) included in OCI, assets								(1)
Transfers out of level 3, assets	[1]							(5)
Residential Mortgage Backed Non Agency [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		5		4		3		4
Unrealized gains/(losses) included in earnings, assets				0		1		(1)
Settlements, assets						(1)		(1)
Transfers into level 3, assets	[1]					2		2
Transfers out of level 3, assets		(5)				(5)
Ending balance, fair value assets		0		4		0		4
Commercial Mortgage Backed Securities [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		1		1		2		14
Settlements, assets				0				(14)
Transfers into level 3, assets						1		2	[1]
Transfers out of level 3, assets		(1)	[1]			(3)	[1]	(1)
Ending balance, fair value assets		0		1		0		1
Commercial Mortgage Backed Securities [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets								3
Unrealized gains/(losses) included in earnings, assets								(3)
Collateralized Debt Obligations [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		67		95		87		82
Realized gains/(losses), assets								(2)
Unrealized gains/(losses) included in earnings, assets								1
Unrealized gains/(losses) included in OCI, assets		1				3		27
Purchases, assets								5
Settlements, assets		(4)		(3)		(18)		(9)
Sales, assets						(8)		(41)
Transfers into level 3, assets	[1]					1		36
Transfers out of level 3, assets		(3)	[1]			(4)		(7)	[1]
Ending balance, fair value assets		61		92		61		92
Collateralized Debt Obligations [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		4		6		5		22
Unrealized gains/(losses) included in earnings, assets		5		0		5		(10)
Settlements, assets								(4)
Transfers into level 3, assets								1
Transfers out of level 3, assets		(9)	[1]			(10)		(3)	[1]
Ending balance, fair value assets		0		6		0		6
Change in unrealized gains/(losses) for the period included in earnings for assets still held, assets								1
Other Asset Backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		83		82		85		58
Realized gains/(losses), assets						(2)
Unrealized gains/(losses) included in OCI, assets				(4)		1		4
Purchases, assets						4		11
Settlements, assets		(2)		(4)		(9)		(8)
Sales, assets						(8)		(1)
Transfers into level 3, assets	[1]			21		12		51
Transfers out of level 3, assets	[1]	(24)		(1)		(26)		(21)
Ending balance, fair value assets		57		94		57		94
Other Asset Backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		17		26		26		54
Unrealized gains/(losses) included in earnings, assets						2		(16)
Settlements, assets		(1)		(1)		(5)		(7)
Transfers into level 3, assets				14				18	[1]
Transfers out of level 3, assets		(7)	[1]			(14)	[1]	(10)
Ending balance, fair value assets		9		39		9		39
Medium Term Notes [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value liabilities		166		217		197		203
Unrealized gains/(losses included in earnings, liabilities		4		2		(11)		17
Foreign exchange recognized in OCI or earnings, liabilities		0		(17)		(16)		(18)
Ending balance, fair value liabilities		170		202		170		202
Change in unrealized gains/(losses) for the period included in earnings for liabilities still held, liabilities		4		(15)		(27)		(1)
Credit Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value liabilities		144		332		244		1,147
Realized gains/(losses), liabilities		18		24		30		388
Unrealized gains/(losses included in earnings, liabilities		(21)		(48)		(121)		(863)
Settlements, liabilities		(20)		(24)		(32)		(388)
Ending balance, fair value liabilities		121		284		121		284
Change in unrealized gains/(losses) for the period included in earnings for liabilities still held, liabilities		(21)		(14)		(109)		20
Other Derivative Liabilities [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value liabilities		21		33		24		0
Realized gains/(losses), liabilities								30
Unrealized gains/(losses included in earnings, liabilities		1		5		(2)		8
Ending balance, fair value liabilities		22		38		22		38
Change in unrealized gains/(losses) for the period included in earnings for liabilities still held, liabilities		1		5		(2)		8
Variable Interest Entity Notes [Member] | Liabilities Of Consolidated Vies [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value liabilities		1,374		802		735		940
Unrealized gains/(losses included in earnings, liabilities		1		4		22		40
Purchases, liabilities						695
Issuances, liabilities								3
Settlements, liabilities		(65)		(60)		(142)		(196)
Sales, liabilities								(41)
Ending balance, fair value liabilities		1,310		746		1,310		746
Change in unrealized gains/(losses) for the period included in earnings for liabilities still held, liabilities		1		4		22		37
Currency Derivatives [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets		2				0
Unrealized gains/(losses) included in earnings, assets		1
Foreign exchange recognized in OCI or earnings, assets		3				6
Ending balance, fair value assets		6				6
Change in unrealized gains/(losses) for the period included in earnings for assets still held, assets		$ 4				$ 6
Currency Derivatives [Member] | Liabilities Of Consolidated Vies [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value liabilities				11				11
Unrealized gains/(losses included in earnings, liabilities				(3)				(3)
Foreign exchange recognized in OCI or earnings, liabilities				(1)				(1)
Ending balance, fair value liabilities				7				7
Change in unrealized gains/(losses) for the period included in earnings for liabilities still held, liabilities				(4)				(4)
Perpetual Debt And Equity Securities [Member]
Accounts Notes And Loans Receivable [Line Items]
Beginning balance, fair value assets				13				11
Unrealized gains/(losses) included in earnings, assets				0				2
Transfers into level 3, assets	[1]							4
Transfers out of level 3, assets	[1]							(4)
Ending balance, fair value assets				$ 13				13
Change in unrealized gains/(losses) for the period included in earnings for assets still held, assets								$ 2

[1] (1) - Transferred in and out at the end of the period.

[2] Primarily relates to the deconsolidation of VIEs.

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Accumulated Other Comprehensive Income [Text Block]

Note 12: Accumulated Other Comprehensive Income

Thefollowingtablepresentsthechanges in the components of AOCI forthenine months endedSeptember 30,2015:

		Unrealized
		Gains (Losses)
		on AFS		Foreign Currency
In millions		Securities, Net		Translation, Net		Total
Balance, December 31, 2014		$	34	$	(13)	$	21
	Other comprehensive income (loss) before reclassifications		(27)		(13)		(40)
	Amounts reclassified from AOCI		9		-		9
Total other comprehensive income (loss)			(18)		(13)		(31)
Balance, September 30, 2015		$	16	$	(26)	$	(10)

Thefollowingtablepresentsthe details of the reclassifications from AOCIforthethree and nine months endedSeptember 30,2015 and 2014:

In millions		Amounts Reclassified from AOCI
		Three Months Ended September 30,				Nine Months Ended September 30,
Details about AOCI Components		2015		2014		2015		2014		Affected Line Item on the Consolidated Statements of Operations
Unrealized gains (losses) on AFS securities:
	Realized gain (loss) on sale of securities	$	(5)	$	-	$	(6)	$	(20)	Net gains (losses) on financial instruments at fair value and foreign exchange
	OTTI		(3)		-		(3)		-	Net investment losses related to OTTI
	Amortization on securities		(1)		-		(4)		(2)	Net investment income
			(9)		-		(13)		(22)	Income (loss) before income taxes
			(2)		-		(4)		(8)	Provision (benefit) for income taxes
			(7)		-		(9)		(14)	Net income (loss)
Foreign currency translation:
	Realized gain (loss) on liquidation of foreign entity		-		-		-		(4)	Net gains (losses) on financial instruments at fair value and foreign exchange
Total reclassifications for the period		$	(7)	$	-	$	(9)	$	(18)	Net income (loss)

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Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Summary Of Nonconsolidated VIEs Assets And Liabilities

			September 30, 2015
							Carrying Value of Assets						Carrying Value of Liabilities
															Loss and Loss
					Maximum								Unearned		Adjustment
			VIE		Exposure				Premiums		Insurance Loss		Premium		Expense		Derivative
In millions			Assets		to Loss		Investments(1)		Receivable(2)		Recoverable(3)		Revenue(4)		Reserves(5)		Liabilities(6)
Insurance:
	Global structured finance:
		Collateralized debt obligations	$	6,666	$	3,853	$	90	$	14	$	-	$	10	$	108	$	17
		Mortgage-backed residential		12,130		6,436		24		33		426		32		275		-
		Mortgage-backed commercial		329		233		-		1		-		1		-		-
		Consumer asset-backed		5,706		1,778		-		14		-		12		8		-
		Corporate asset-backed		5,310		3,629		-		29		6		34		-		-
	Total global structured finance			30,141		15,929		114		91		432		89		391		17
	Global public finance			44,801		15,373		-		164		-		194		-		-
Total insurance			$	74,942	$	31,302	$	114	$	255	$	432	$	283	$	391	$	17
__________
(1) - Reported within "Investments" on MBIA's consolidated balance sheets.
(2) - Reported within "Premiums receivable" on MBIA's consolidated balance sheets.
(3) - Reported within "Insurance loss recoverable" on MBIA's consolidated balance sheets.
(4) - Reported within "Unearned premium revenue" on MBIA's consolidated balance sheets.
(5) - Reported within "Loss and loss adjustment expense reserves" on MBIA's consolidated balance sheets.
(6) - Reported within "Derivative liabilities" on MBIA's consolidated balance sheets.

			December 31, 2014
							Carrying Value of Assets						Carrying Value of Liabilities
															Loss and Loss
					Maximum								Unearned		Adjustment
			VIE		Exposure				Premiums		Insurance Loss		Premium		Expense		Derivative
In millions			Assets		to Loss		Investments(1)		Receivable(2)		Recoverable(3)		Revenue(4)		Reserves(5)		Liabilities(6)
Insurance:
	Global structured finance:
		Collateralized debt obligations	$	8,613	$	5,623	$	110	$	24	$	-	$	20	$	70	$	102
		Mortgage-backed residential		14,136		7,459		9		41		518		39		307		-
		Mortgage-backed commercial		571		279		-		1		-		1		-		-
		Consumer asset-backed		6,008		1,989		-		16		-		14		12		-
		Corporate asset-backed		6,612		4,608		-		41		6		47		-		-
	Total global structured finance			35,940		19,958		119		123		524		121		389		102
	Global public finance			49,686		16,698		-		179		-		211		-		-
Total insurance			$	85,626	$	36,656	$	119	$	302	$	524	$	332	$	389	$	102
__________
(1) - Reported within "Investments" on MBIA's consolidated balance sheets.
(2) - Reported within "Premiums receivable" on MBIA's consolidated balance sheets.
(3) - Reported within "Insurance loss recoverable" on MBIA's consolidated balance sheets.
(4) - Reported within "Unearned premium revenue" on MBIA's consolidated balance sheets.
(5) - Reported within "Loss and loss adjustment expense reserves" on MBIA's consolidated balance sheets.
(6) - Reported within "Derivative liabilities" on MBIA's consolidated balance sheets.

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Fair Value Of Financial Instruments (Company's Assets And Liabilities Measured At Fair Value On Recurring Basis) (Detail) - USD ($) $ in Millions		Sep. 30, 2015	Dec. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		$ 9,741	$ 10,613
Fair value financial liabilities measured on recurring basis		3,061	3,463
Variable Interest Entity Primary Beneficiary [Member] | Loan Repurchase Commitments [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		394	379
Corporate Obligations [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		58	65
Residential Mortgage Backed Non Agency [Member] | Mortgage-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		183	197
Commercial Mortgage Backed Securities [Member] | Mortgage-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		699	86
Collateralized Debt Obligations [Member] | Asset-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		16	12
Other Asset Backed [Member] | Asset-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		29	61
Money Market Securities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		111	428
Loans Receivable At Fair Value [Member] | Variable Interest Entity Primary Beneficiary [Member] | Residential Loans Receivable [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,244	1,431
Loans Receivable At Fair Value [Member] | Variable Interest Entity Primary Beneficiary [Member] | Other Loans Receivable [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		107
Medium Term Notes [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		170	197
Variable Interest Entity Notes [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		2,460	2,047
Perpetual Debt And Equity Securities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		209	53
Cash And Cash Equivalents [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		462	729
Fixed Maturities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		6,191	6,345
Fixed Maturities [Member] | U S Treasury And Government [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		856	691
Fixed Maturities [Member] | State and municipal bonds [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,851	1,732
Fixed Maturities [Member] | Foreign Government Debt [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		213	290
Fixed Maturities [Member] | Corporate Obligations [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,725	2,058
Fixed Maturities [Member] | Residential Mortgage Backed Agency [Member] | Mortgage-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,043	1,162
Fixed Maturities [Member] | Residential Mortgage Backed Non Agency [Member] | Mortgage-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		56	56
Fixed Maturities [Member] | Commercial Mortgage Backed Securities [Member] | Mortgage-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		16	22
Fixed Maturities [Member] | Collateralized Debt Obligations [Member] | Asset-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		64	93
Fixed Maturities [Member] | Other Asset Backed [Member] | Asset-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		367	241
Derivative Assets [Member] | Interest Rate Derivatives [Member] | Non Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		2	2
Derivative Assets [Member] | Interest Rate Derivatives [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		0
Derivative Assets [Member] | Currency Derivatives [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		6
Assets Held For Sale [Member] | Loans Receivable At Fair Value [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis			711
Assets Held For Sale [Member] | Equity Securities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis			6
Assets Held For Sale [Member] | Cash And Cash Equivalents [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis			55
Assets Of Consolidated V I Es [Member] | Cash And Cash Equivalents [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		30	53
Derivative Liabilities [Member] | Credit Derivatives [Member] | Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		124	246
Derivative Liabilities [Member] | Interest Rate Derivatives [Member] | Non Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		193	167
Derivative Liabilities [Member] | Interest Rate Derivatives [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		57
Derivative Liabilities [Member] | Other Derivatives [Member] | Non Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		22	24
Other Liabilities [Member] | Warrant [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		17	28
Other Liabilities [Member] | Securities Sold Not Yet Purchased [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		18
Liabilities Held For Sale [Member] | Variable Interest Entity Notes [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis			431
Liabilities Held For Sale [Member] | Payable For Loans Purchased [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis			323
Fair Value Inputs Level 1 [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,505	2,087
Fair value financial liabilities measured on recurring basis		18	0
Fair Value Inputs Level 1 [Member] | Money Market Securities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		111	428
Fair Value Inputs Level 1 [Member] | Perpetual Debt And Equity Securities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		17	22
Fair Value Inputs Level 1 [Member] | Cash And Cash Equivalents [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		462	729
Fair Value Inputs Level 1 [Member] | Fixed Maturities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		885	794
Fair Value Inputs Level 1 [Member] | Fixed Maturities [Member] | U S Treasury And Government [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		744	573
Fair Value Inputs Level 1 [Member] | Fixed Maturities [Member] | Foreign Government Debt [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		141	221
Fair Value Inputs Level 1 [Member] | Assets Held For Sale [Member] | Equity Securities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis			6
Fair Value Inputs Level 1 [Member] | Assets Held For Sale [Member] | Cash And Cash Equivalents [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis			55
Fair Value Inputs Level 1 [Member] | Assets Of Consolidated V I Es [Member] | Cash And Cash Equivalents [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		30	53
Fair Value Inputs Level 1 [Member] | Other Liabilities [Member] | Securities Sold Not Yet Purchased [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		18
Fair Value Inputs Level 2 [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		6,288	6,510
Fair value financial liabilities measured on recurring basis		1,482	2,344
Fair Value Inputs Level 2 [Member] | Corporate Obligations [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		47	10
Fair Value Inputs Level 2 [Member] | Residential Mortgage Backed Non Agency [Member] | Mortgage-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		183	194
Fair Value Inputs Level 2 [Member] | Commercial Mortgage Backed Securities [Member] | Mortgage-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		699	86
Fair Value Inputs Level 2 [Member] | Collateralized Debt Obligations [Member] | Asset-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		16	7
Fair Value Inputs Level 2 [Member] | Other Asset Backed [Member] | Asset-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		20	35
Fair Value Inputs Level 2 [Member] | Variable Interest Entity Notes [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		1,150	1,312
Fair Value Inputs Level 2 [Member] | Perpetual Debt And Equity Securities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		192	31
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		5,128	5,353
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member] | U S Treasury And Government [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		112	118
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member] | State and municipal bonds [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,804	1,724
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member] | Foreign Government Debt [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		67	63
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member] | Corporate Obligations [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,717	2,048
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member] | Residential Mortgage Backed Agency [Member] | Mortgage-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,043	1,162
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member] | Residential Mortgage Backed Non Agency [Member] | Mortgage-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		56	56
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member] | Commercial Mortgage Backed Securities [Member] | Mortgage-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		16	20
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member] | Collateralized Debt Obligations [Member] | Asset-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		3	6
Fair Value Inputs Level 2 [Member] | Fixed Maturities [Member] | Other Asset Backed [Member] | Asset-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		310	156
Fair Value Inputs Level 2 [Member] | Derivative Assets [Member] | Interest Rate Derivatives [Member] | Non Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		3	83
Fair Value Inputs Level 2 [Member] | Derivative Assets [Member] | Interest Rate Derivatives [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		0
Fair Value Inputs Level 2 [Member] | Assets Held For Sale [Member] | Loans Receivable At Fair Value [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis			711
Fair Value Inputs Level 2 [Member] | Derivative Liabilities [Member] | Credit Derivatives [Member] | Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		3	2
Fair Value Inputs Level 2 [Member] | Derivative Liabilities [Member] | Interest Rate Derivatives [Member] | Non Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		255	248
Fair Value Inputs Level 2 [Member] | Derivative Liabilities [Member] | Interest Rate Derivatives [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		57
Fair Value Inputs Level 2 [Member] | Other Liabilities [Member] | Warrant [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		17	28
Fair Value Inputs Level 2 [Member] | Liabilities Held For Sale [Member] | Variable Interest Entity Notes [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis			431
Fair Value Inputs Level 2 [Member] | Liabilities Held For Sale [Member] | Payable For Loans Purchased [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis			323
Fair Value Inputs Level 3 [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,949	2,097
Fair value financial liabilities measured on recurring basis		1,623	1,200
Fair Value Inputs Level 3 [Member] | Variable Interest Entity Primary Beneficiary [Member] | Loan Repurchase Commitments [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		394	379
Fair Value Inputs Level 3 [Member] | Corporate Obligations [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	11	55
Fair Value Inputs Level 3 [Member] | Residential Mortgage Backed Non Agency [Member] | Mortgage-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	0	3
Fair Value Inputs Level 3 [Member] | Collateralized Debt Obligations [Member] | Asset-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	0	5
Fair Value Inputs Level 3 [Member] | Other Asset Backed [Member] | Asset-backed [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	9	26
Fair Value Inputs Level 3 [Member] | Loans Receivable At Fair Value [Member] | Variable Interest Entity Primary Beneficiary [Member] | Residential Loans Receivable [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		1,244	1,431
Fair Value Inputs Level 3 [Member] | Loans Receivable At Fair Value [Member] | Variable Interest Entity Primary Beneficiary [Member] | Other Loans Receivable [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		107
Fair Value Inputs Level 3 [Member] | Medium Term Notes [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis	[1]	170	197
Fair Value Inputs Level 3 [Member] | Variable Interest Entity Notes [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		1,310	735
Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		178	198
Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member] | State and municipal bonds [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	47	8
Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member] | Foreign Government Debt [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	5	6
Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member] | Corporate Obligations [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	8	10
Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member] | Commercial Mortgage Backed Securities [Member] | Mortgage-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	0	2
Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member] | Collateralized Debt Obligations [Member] | Asset-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	61	87
Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member] | Other Asset Backed [Member] | Asset-backed [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis	[1]	57	85
Fair Value Inputs Level 3 [Member] | Derivative Assets [Member] | Currency Derivatives [Member] | Variable Interest Entity Primary Beneficiary [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		6
Fair Value Inputs Level 3 [Member] | Derivative Liabilities [Member] | Credit Derivatives [Member] | Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		121	244
Fair Value Inputs Level 3 [Member] | Derivative Liabilities [Member] | Other Derivatives [Member] | Non Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		22	24
Counterparty And Cash Collateral Netting [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		(1)	(81)
Fair value financial liabilities measured on recurring basis		(62)	(81)
Counterparty And Cash Collateral Netting [Member] | Derivative Assets [Member] | Interest Rate Derivatives [Member] | Non Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial assets measured on recurring basis		(1)	(81)
Counterparty And Cash Collateral Netting [Member] | Derivative Liabilities [Member] | Interest Rate Derivatives [Member] | Non Insured Derivatives [Member]
Accounts Notes And Loans Receivable [Line Items]
Fair value financial liabilities measured on recurring basis		$ (62)	$ (81)

[1] Unobservable inputs are either not developed by the Company or do not significantly impact the overall fair values of the aggregate financial assets and liabilities.

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Loss And Loss Adjustment Expense Reserves (Loss And LAE Activity) (Narrative) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder (Benefits) And Claims Incurred Net	$ 39	$ 20	$ 79	$ 82
Weighted average risk-free rate used to discount claim liability	1.56%
Insurance loss recoverable	$ 437		437		$ 533
CDO Portfolio [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder (Benefits) And Claims Incurred Net	5		39
CDO Portfolio [Member] | Variable Interest Entity Primary Beneficiary [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Elimination Of Loss And LAE Expense (Benefit) As Result Of Consolidating VIEs	14		1
Second Lien Residential Mortgage Backed Securities And Reserves [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder (Benefits) And Claims Incurred Net	24	16	52	88
First Lien Residential Mortgage Backed Securities [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder (Benefits) And Claims Incurred Net	18	12	2	39
Financial Guarantee [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Aggregate CDO Loss And LAE Reserves	149		149		111
Financial Guarantee [Member] | CDO Portfolio [Member] | Variable Interest Entity Primary Beneficiary [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Elimination Of Loss And Lae Reserves As Result Of Consolidating VIEs	226		226		225
Loss And Lae Reserves [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Reserves for expected future claim payments	700		700		653
Expected recoveries of future payments	220		220		147
Recoveries On Unpaid Losses [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Expected recoveries of future payments	220		220		147
Insurance Loss Recoverable [Member] | Classified [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Insurance claim loss recoverable	437		437		533
Insurance loss recoverable	437		437		533
Loan Repurchase Commitments [Member] | Second Lien Residential Mortgage Backed Securities And Reserves [Member] | Ineligible Loan Recoveries [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Total estimated insurance recoveries	394		394		$ 379
Remedial Actions For Insured Obligations [Member]
Loss And Loss Adjustment Expense Reserves [Line Items]
Policyholder (Benefits) And Claims Incurred Net	$ 5	$ 3	$ 10	$ 37

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Consolidated Statements Of Operations (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Non Variable Interest Entity [Member] | Financial Guarantee Insurance Segment [Member]
Ceded premiums earned	$ 2	$ 4	$ 7	$ 8

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Business Developments and Risks and Uncertainties

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Business Developments and Risks and Uncertainties

Note 1: Business Developments and Risks and Uncertainties

Summary

MBIA Inc., together with its consolidated subsidiaries, (collectively, “MBIA” or the “Company”) operates one of the largest financial guarantee insurance businesses in the industry and was a provider of asset management and advisory services. MBIA manages three operating segments: 1) United States (“U.S.”) public finance insurance; 2) international and structured finance insurance; and 3) corporate.The Company’s U.S. public finance insurance business is primarily operated through National Public Finance Guarantee Corporation and its subsidiaries (“National”) and its international and structured finance insurance business is primarily operated through MBIA Insurance Corporation and its subsidiaries (“MBIA Corp.”). Unless otherwise indicated or the context otherwise requires, references to “MBIA Corp.” are to MBIA Insurance Corporation, together with its subsidiaries, MBIA UK Insurance Limited (“MBIA UK”) and MBIA Mexico S.A. de C.V (“MBIA Mexico”).

Prior to 2015, MBIA managed two other operating segments, advisory services and conduit. The advisory services segment was primarily operated through Cutwater Holdings, LLC and its subsidiaries (“Cutwater”). Effective on January 1, 2015, the Company exited its advisory services business through the sale of Cutwater. During the second quarter of 2014, the Company dissolved its conduit segment through the liquidation of Meridian Funding Company, LLC (“Meridian”). Refer to “Note 10: Business Segments” for further information about the Company’s operating segments.

Business Developments

National Ratings and New Business Opportunities

National’s ability to write new business and compete with other financial guarantors is largely dependent on the financial strength ratings assigned to National by major rating agencies. As of September 30,2015, the major rating agencies affirmed the following ratings of National: AA+ with a stable outlook by Kroll Bond Rating Agency; AA- with a stable outlook by Standard & Poor’s Financial Services LLC (“S&P”); and A3 with a negative outlook by Moody’s Investors Service, Inc. (“Moody’s”).

National seeks to generate shareholder value through appropriate risk adjusted pricing; however, current market conditions and the competitive landscape may limit National’s new business opportunities and its abilities to price and underwrite risk with attractive returns. Refer to “Risks and Uncertainties” below for a discussion of business risks related to National’s insured portfolio.

Sale of MBIA Inc. Common Stock

During the nine months endedSeptember 30,2015, investment funds affiliated with Warburg Pincus LLC (“Warburg”), the largest holder of MBIA Inc. common stock, sold all of its 45.7 million shares of the Company’s common stock. Warburg received all of the net proceeds from this offering. In connection with this sale, National and the Company repurchased 8 million shares and 7.6 million shares, respectively.

Held For Sale Classifications

Armonk, New York Facility

During the nine months ended September 30,2015, the Company sold its Armonk, New York facility and recorded an impairment charge of $4 million to adjust the carrying amount to the sale price less costs to sell. The impairment charge was reflected in the results of the Company’s U.S. public finance insurance segment and included in “Other net realized gains (losses)” on the Company’s consolidated statements of operations.

Sale of Cutwater Business

As a result of the agreement to sell Cutwater, the assets and liabilities of Cutwater were classified as held for sale as of December 31, 2014 and presented within “Assets held for sale” and “Liabilities held for sale” on the Company’s consolidated balance sheet and measured at the lower of its carrying value or fair value less costs to sell. The Company completed this sale effective January 1, 2015, and recorded a gain of approximately $24 million. This gain was reflected in the results of the Company’s corporate segment and included in “Other net realized gains (losses)” on the Company’s consolidated statements of operations.

Assets and Liabilities Held for Sale by Major Category

The following table summarizes the components of assets and liabilities held for sale as of December 31,2014:

In millions			December 31, 2014
Assets
	Investments carried at fair value		$	6
	Cash and cash equivalents			15
	Facility			26
	Other assets			4
	Assets of consolidated variable interest entities:
		Cash		40
		Loans receivable at fair value		711
		Total assets held for sale	$	802
Liabilities
	Other liabilities		$	18
	Liabilities of consolidated variable interest entities:
		Variable interest entity notes		431
		Payable for loans purchased		323
		Total liabilities held for sale	$	772

Risks and Uncertainties

The Company’s financial statements include estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The outcome of certain significant risks and uncertainties could cause the Company to revise its estimates and assumptions or could cause actual results to differ from the Company’s estimates. The discussion below highlights the significant risks and uncertainties that could have a material effect on the Company’s financial statements and business objectives in future periods.

U.S. Public Finance Market Conditions

National’s insured portfolio continued to perform satisfactorily against a backdrop of strengthening domestic economic activity. While this trend will generally benefit tax revenues and fees charged for essential municipal services which secure National’s insured bond portfolio, some state and local governments and territory obligors National insures remain under financial and budgetary stress. This could lead to an increase in defaults by such entities on the payment of their obligations and losses or impairments on a greater number of the Company’s insured transactions. The Company monitors and analyzes these situations and other stressed credits closely, and the overall extent and duration of this stress is uncertain.

MBIA Corp. Recoveries and Insured Portfolio

MBIA Corp.’s primary focus is the collection of excess spread and put-back recoveries and the mitigation of MBIA Corp.’s insurance exposures, primarily through commutations of insurance policies. MBIA Corp. may make negotiated settlement payments to counterparties and/or forego its right to all or some termination premiums when it commutes insurance exposures.

The amount and timing of projected collections from excess spread from second-lien residential mortgage-backed securities (“RMBS”) and the put-back recoverable from Credit Suisse Securities (USA) LLC, DLJ Mortgage Capital, Inc., and Select Portfolio Servicing Inc. (collectively, “Credit Suisse”) are uncertain. Further, the remaining insured portfolio, aside from these exposures, could deteriorate and result in additional significant loss reserves and claim payments. Management’s expected liquidity and capital forecasts for MBIA Corp., which include expected put-back recoveries from Credit Suisseand excess spread recoveries, reflect adequate resources to pay claims when due. However, if MBIA Corp. experiences higher than expected claim payments or is unable to terminate the remaining exposures that represent substantial risk to the Company, MBIA Corp. may ultimately have insufficient resources to continue to pay claims, which could cause the New York State Department of Financial Services (“NYSDFS”) to put MBIA Insurance Corporation, exclusive of MBIA UK and MBIA Mexico, into a rehabilitation or liquidation proceeding. Given the separation of MBIA Inc. and MBIA Corp. as distinct legal entities, the absence of any material intercompany lending agreements or cross defaults between the entities, and the lack of reliance by MBIA Inc. on MBIA Corp. for the receipt of dividends, the Company does not believe that a rehabilitation or liquidation proceeding of MBIA Insurance Corporation by NYSDFS would have any significant long-term liquidity impact on MBIA Inc. or result in a liquidation or similar proceeding of MBIA UK or MBIA Mexico. Such a proceeding could have material adverse consequences for MBIA Corp., including the termination of insured credit default swaps (“CDS”) contracts for which counterparties may assert market-based claims, the acceleration of debt obligations issued by affiliates and insured by MBIA Corp., the loss of control of MBIA Insurance Corporation to a rehabilitator or liquidator, and unplanned costs.

Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” for information about MBIA Corp.’s loss reserves and recoveries.

Corporate Liquidity

As of September 30,2015 and December 31,2014, the liquidity position of MBIA Inc. was $306 million and $498 million, respectively. The term “liquidity position” refers to cash and liquid assets available for general liquidity purposes. During the nine months endedSeptember 30,2015, $228 million was released to MBIA Inc. under the MBIA group’s tax sharing agreement (the “Tax Escrow Account”). Subsequent to September 30, 2015, National declared and paid a dividend of $114 million to its ultimate parent, MBIA Inc. Based on the Company’s projections of National’s dividends, payments into the Tax Escrow Account, and other cash inflows, the Company expects that MBIA Inc. will have sufficient cash to satisfy its debt service and general corporate needs. However, MBIA Inc. continues to have liquidity risk which could be triggered by deterioration in the performance of invested assets, interruption of or reduction in dividends received from operating subsidiaries, impaired access to the capital markets, as well as other factors which cannot be anticipated at this time. Furthermore, failure by MBIA Inc. to settle liabilities that are also insured by MBIA Corp. could result in claims on MBIA Corp.

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Investments (Gross Unrealized Losses Related To Available-For-Sale And Held-To-Maturity Investments) (Detail) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Available For Sale Securities [Abstract]
Less than 12 months, fair value	$ 1,547	$ 851
Less than 12 months, unrealized losses	(25)	(2)
12 months or longer, fair value	472	1,220
12 months or longer, unrealized losses	(133)	(145)
Total available-for-sale, fair value	2,019	2,071
Total available-for-sale, unrealized losses	(158)	(147)
Held To Maturity Securities [Abstract]
Less than 12 months, fair value	1,096	0
Less than 12 months, unrealized losses	(23)	0
12 months or longer, fair value	321	373
12 months or longer, unrealized losses	(254)	(202)
Total held-to-maturity, fair value	1,417	373
Total held-to-maturity, unrealized losses	(277)	(202)
Corporate Obligations [Member] | Variable Interest Entity Primary Beneficiary [Member]
Held To Maturity Securities [Abstract]
Less than 12 months, fair value	1,096	0
Less than 12 months, unrealized losses	(23)	0
12 months or longer, fair value	321	373
12 months or longer, unrealized losses	(254)	(202)
Total held-to-maturity, fair value	1,417	373
Total held-to-maturity, unrealized losses	(277)	(202)
Perpetual Debt And Equity Securities [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	2	6
Less than 12 months, unrealized losses	0	0
12 months or longer, fair value	2	0
12 months or longer, unrealized losses	0	0
Total available-for-sale, fair value	4	6
Total available-for-sale, unrealized losses	0	0
Fixed Maturities [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	1,545	845
Less than 12 months, unrealized losses	(25)	(2)
12 months or longer, fair value	470	1,220
12 months or longer, unrealized losses	(133)	(145)
Total available-for-sale, fair value	2,015	2,065
Total available-for-sale, unrealized losses	(158)	(147)
Fixed Maturities [Member] | U S Treasury And Government [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	136	197
Less than 12 months, unrealized losses	(1)	0
12 months or longer, fair value	50	175
12 months or longer, unrealized losses	0	(3)
Total available-for-sale, fair value	186	372
Total available-for-sale, unrealized losses	(1)	(3)
Fixed Maturities [Member] | US States And Political Subdivisions [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	351	60
Less than 12 months, unrealized losses	(7)	(1)
12 months or longer, fair value	42	257
12 months or longer, unrealized losses	(4)	(7)
Total available-for-sale, fair value	393	317
Total available-for-sale, unrealized losses	(11)	(8)
Fixed Maturities [Member] | Foreign Government Debt [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	21	20
Less than 12 months, unrealized losses	(1)	0
12 months or longer, fair value	3	0
12 months or longer, unrealized losses	(1)	0
Total available-for-sale, fair value	24	20
Total available-for-sale, unrealized losses	(2)	0
Fixed Maturities [Member] | Corporate Obligations [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	539	468
Less than 12 months, unrealized losses	(13)	(1)
12 months or longer, fair value	71	251
12 months or longer, unrealized losses	(91)	(91)
Total available-for-sale, fair value	610	719
Total available-for-sale, unrealized losses	(104)	(92)
Fixed Maturities [Member] | Residential Mortgage Backed Agency [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	264	16
Less than 12 months, unrealized losses	(1)	0
12 months or longer, fair value	181	387
12 months or longer, unrealized losses	(4)	(7)
Total available-for-sale, fair value	445	403
Total available-for-sale, unrealized losses	(5)	(7)
Fixed Maturities [Member] | Residential Mortgage Backed Non Agency [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	24	10
Less than 12 months, unrealized losses	(1)	0
12 months or longer, fair value	18	19
12 months or longer, unrealized losses	(4)	(4)
Total available-for-sale, fair value	42	29
Total available-for-sale, unrealized losses	(5)	(4)
Fixed Maturities [Member] | Commercial Mortgage Backed Securities [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	7	4
Less than 12 months, unrealized losses	0	0
12 months or longer, fair value	1	6
12 months or longer, unrealized losses	0	0
Total available-for-sale, fair value	8	10
Total available-for-sale, unrealized losses	0	0
Fixed Maturities [Member] | Collateralized Debt Obligations [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	0	1
Less than 12 months, unrealized losses	0	0
12 months or longer, fair value	61	81
12 months or longer, unrealized losses	(20)	(21)
Total available-for-sale, fair value	61	82
Total available-for-sale, unrealized losses	(20)	(21)
Fixed Maturities [Member] | Other Asset Backed [Member]
Available For Sale Securities [Abstract]
Less than 12 months, fair value	203	69
Less than 12 months, unrealized losses	(1)	0
12 months or longer, fair value	43	44
12 months or longer, unrealized losses	(9)	(12)
Total available-for-sale, fair value	246	113
Total available-for-sale, unrealized losses	$ (10)	$ (12)

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Income Taxes (Narrative) (Detail) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Non Variable Interest Entities [Line Items]
Deferred income taxes, net	$ 1,000,000,000	$ 1,000,000,000
Non U.S. deferred tax liability	29,000,000
Valuation allowance	0	$ 0
NOL carryforward	3,000,000,000
Alternative minimum tax credit carryforward	$ 22,000,000

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Loss and Loss Adjustment Expense Reserves (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Schedule Of Losses And Loss Adjustment Expenses

		Three Months Ended September 30,				Nine Months Ended September 30,
In millions		2015		2014		2015		2014
U.S. Public Finance Insurance Segment		$	(7)	$	(8)	$	(5)	$	(5)
International and Structured Finance Insurance Segment:
	Second-lien RMBS		24		16		52		88
	First-lien RMBS		18		12		2		39
	Other(1)		4		-		30		(40)
Losses and LAE expense (benefit)		$	39	$	20	$	79	$	82
________________
(1) - Includes CDOs, non-U.S. public finance and other issues.

Schedule Of Financial Guarantees And Related Claim Liability

				Surveillance Categories
				Caution		Caution		Caution
				List		List		List		Classified
$ in millions				Low		Medium		High		List		Total
Number of policies					156		19		76		166		417
Number of issues(1)					15		6		6		116		143
Remaining weighted average contract
	period (in years)				7.0		8.2		14.5		6.8		7.6
Gross insured contractual payments
	outstanding:(2)
		Principal		$	4,566	$	250	$	1,213	$	6,712	$	12,741
		Interest			3,451		113		847		2,547		6,958
			Total	$	8,017	$	363	$	2,060	$	9,259	$	19,699
Gross Claim Liability				$	-	$	-	$	-	$	876	$	876
Less:
	Gross Potential Recoveries				-		-		-		755		755
	Discount, net(3)				-		-		-		79		79
Net claim liability (recoverable)				$	-	$	-	$	-	$	42	$	42
Unearned premium revenue				$	69	$	2	$	26	$	60	$	157
__________
(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.
(2) - Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.
(3) - Represents discount related to Gross Claim Liability and Gross Potential Recoveries.

				Surveillance Categories
				Caution		Caution		Caution
				List		List		List		Classified
$ in millions				Low		Medium		High		List		Total
Number of policies					38		98		4		175		315
Number of issues(1)					18		7		3		119		147
Remaining weighted average contract
	period (in years)				7.2		12.0		10.1		7.0		7.7
Gross insured contractual payments
	outstanding:(2)
		Principal		$	1,757	$	1,372	$	133	$	8,001	$	11,263
		Interest			696		819		68		3,037		4,620
			Total	$	2,453	$	2,191	$	201	$	11,038	$	15,883
Gross Claim Liability				$	-	$	-	$	-	$	850	$	850
Less:
	Gross Potential Recoveries				-		-		-		860		860
	Discount, net(3)				-		-		-		14		14
Net claim liability (recoverable)				$	-	$	-	$	-	$	(24)	$	(24)
Unearned premium revenue				$	63	$	19	$	5	$	80	$	167
__________
(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.
(2) - Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.
(3) - Represents discount related to Gross Claim Liability and Gross Potential Recoveries.

Present Value Of The Probability-Weighted Future Claim Payments And Recoveries

		As of		As of
In millions		September 30, 2015		December 31, 2014
Loss reserves (claim liability)		$	447	$	464
LAE reserves			33		42
	Loss and LAE reserves	$	480	$	506
Insurance claim loss recoverable		$	(437)	$	(533)
LAE insurance loss recoverable			-		-
	Insurance loss recoverable	$	(437)	$	(533)
Reinsurance recoverable on unpaid losses		$	6	$	6
Reinsurance recoverable on unpaid LAE reserves			-		1
	Reinsurance recoverable on paid and unpaid losses	$	6	$	7

Schedule Of Loss And Loss Adjustment Expenses Reserves

In millions

Changes in Loss and LAE Reserves for the Nine Months Ended September 30, 2015

Gross Loss

Loss

Gross Loss

and LAE

Payments

Accretion

Changes in

and LAE

Reserves as of

for Cases

of Claim

Changes in

Unearned

Changes in

Reserves as of

December 31,

with

Liability

Discount

Changes in

Premium

LAE

September 30,

2014

Reserves

Discount

Rates

Assumptions

Revenue

Reserves

Other(1)

2015

$

506

$

(42)

$

6

$

(28)

$

46

$

13

$

(9)

$

(12)

$

480

____________

(1) - Primarily changes in amount and timing of payments.

Schedule Of Insurance Loss Recoverable And Changes In Recoveries On Unpaid Losses

				Changes in Insurance Loss Recoverable and Recoveries on Unpaid Losses
				for the Nine Months Ended September 30, 2015
				Collections
		As of		for Cases		Accretion		Changes in				Changes in				As of
		December 31,		with		of		Discount		Changes in		LAE				September 30,
In millions		2014		Recoveries		Recoveries		Rates		Assumptions		Recoveries		Other(1)		2015
Insurance loss
	recoverable	$	533	$	(56)	$	6	$	6	$	(24)	$	-	$	(28)	$	437
Recoveries on unpaid
	losses		147		-		2		1		71		(1)		-		220
Total		$	680	$	(56)	$	8	$	7	$	47	$	(1)	$	(28)	$	657
____________
(1) Primarily changes in amount and timing of collections.

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Earnings Per Share (Narrative) (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Antidilutive Shares [Abstract]
Antidilutive stock options, restricted stock and warrants outstanding	18,807,517	32,450,109	17,975,504	31,817,467

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Variable Interest Entities (Narrative) (Detail) $ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014	Dec. 31, 2014 USD ($)
Variable Interest Entity [Line Items]
Carrying amounts of assets	$ 5,500		$ 5,000
Carrying amounts of liabilities	$ 5,200		4,800
Number of variable interest entities consolidated	1	1
Number of variable interest entities deconsolidated	1
Advisory Services [Member]
Variable Interest Entity [Line Items]
Carrying amounts of assets			751
Carrying amounts of liabilities			$ 754
Variable Interest Entity Primary Beneficiary [Member] | Advisory Services [Member]
Variable Interest Entity [Line Items]
Number of variable interest entities consolidated			3
Variable Interest Entity Primary Beneficiary [Member] | Collateral Loan Obligations [Member]
Variable Interest Entity [Line Items]
Investments carried at fair value			$ 4

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Earnings Per Share

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Earnings Per Share

Note 11: Earnings Per Share

Earnings per share is calculated using the two-class method in which earnings are allocated to common stock and participating securities based on their rights to receive nonforfeitable dividends or dividend equivalents. The Company grants restricted stock and restricted stock units to certain employees and non-employee directors in accordance with the Company’s long-term incentive programs, which entitle the participants to receive nonforfeitable dividends or dividend equivalents during the vesting period on the same basis as those dividends are paid to common shareholders. These unvested stock awards represent participating securities. During periods of net income, the calculation of earnings per share exclude the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. During periods of net loss, no effect is given to participating securities in the numerator and the denominator excludes the dilutive impact of these securities since they do not share in the losses of the Company.

Basic earnings per share excludes dilution and is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the dilutive effect of all stock options, warrants and unvested restricted stock outstanding during the period that could potentially result in the issuance of common stock. The dilution from stock options, warrants and unvested restricted stock are calculated by applying the two-class method and using the treasury stock method. The treasury stock method assumes the proceeds from the exercise of stock options and warrants or the unrecognized compensation expense from unvested restricted stock will be used to purchase shares of the Company’s common stock at the average market price during the period. For the three months endedSeptember 30,2015 and 2014, there were 18,807,517 and32,450,109 , respectively, of stock options, warrants and unvested restricted stock outstanding that were antidilutive. For the nine months endedSeptember 30,2015 and 2014, there were 17,975,504 and31,817,467 , respectively of stock options, warrants and unvested restricted stock outstanding that were antidilutive.

The following table presents the computation of basic and diluted earnings per share for the three and nine months endedSeptember 30,2015 and 2014:

		Three Months Ended September 30,				Nine Months Ended September 30,
In millions except share and per share amounts		2015		2014		2015			2014
Basic earnings per share:
Net income (loss)		$	(35)	$	173	$	98	$	549
Less: undistributed earnings allocated to participating securities			-		5		3		15
Net income (loss) available to common shareholders			(35)		168		95		534
Basic weighted average shares (1)			155,239,723		187,104,785		169,610,370		188,428,870
Net income (loss) per basic common share:		$	(0.23)	$	0.90	$	0.56	$	2.83
Diluted earnings per share:
Net income (loss)			(35)		173		98		549
Less: undistributed earnings allocated to participating securities			-		5		3		14
Less: mark-to-market gain (loss) on warrants			-		18		-		32
Net income (loss) available to common shareholders			(35)		150		95		503
Basic weighted average shares (1)			155,239,723		187,104,785		169,610,370		188,428,870
Effect of common stock equivalents:
	Stock options		-		1,029,777		956,016		1,126,134
	Warrants		-		289,756		-		2,061,719
Diluted weighted average shares			155,239,723		188,424,318		170,566,386		191,616,723
Net income (loss) per diluted common share:		$	(0.23)	$	0.80	$	0.55	$	2.62
_________
(1) - Includes 600,826 and 270,142 of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the three months ended September 30, 2015 and 2014, respectively. Includes 619,889 and 315,018 of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the nine months ended September 30, 2015 and 2014, respectively.