7. FINANCIAL GUARANTEES IN FORCE

Financial guarantees outstanding includes the exposures of policies that insure variable interest entities (“VIEs”) consolidated in accordance with ASC Topic 810, Consolidation. Financial guarantees outstanding includes the exposure of policies that insure capital appreciation bonds which are reported at the par amount at the time of issuance of the insurance policy. Financial guarantees outstanding excludes the exposures of policies that insure bonds which have been called, pre-refunded or refunded. The gross par amount of financial guarantees outstanding was $119,235,000 and $159,688,000 at December 31, 2015 and 2014, respectively. The par amount of financial guarantees outstanding, net of reinsurance, was $108,299,000 and $144,734,000 at December 31, 2015 and 2014, respectively.

As of December 31, 2015 and 2014, the guarantee portfolio was diversified by type of guaranteed bond as shown in the following table:



Net Par Outstanding December 31	2015		2014
Public Finance:
Lease and tax-backed revenue	$	22,060,000	$	33,411,000
General obligation	15,946,000		22,699,000
Utility revenue	8,218,000		11,687,000
Housing revenue	6,810,000		7,108,000
Transportation education	5,589,000		7,738,000
Higher education	3,439,000		6,389,000
Health care revenue	2,234,000		3,106,000
Other	1,140,000		1,310,000
Total Public Finance	65,436,000		93,448,000
Structured Finance:
Mortgage-backed and home equity	11,387,000		13,686,000
Investor-owned utilities	4,921,000		5,411,000
Student loan	2,323,000		3,390,000
Asset-backed ⁽¹⁾	1,140,000		1,335,000
CDOs	306,000		637,000
Other	1,737,000		1,875,000
Total Structured Finance	21,814,000		26,334,000
International Finance:
Investor-owned and public utilities	7,208,000		8,455,000
Sovereign/sub-sovereign	6,218,000		6,758,000
Asset-backed ⁽¹⁾	3,870,000		4,442,000
Transportation	2,118,000		3,425,000
Mortgage-backed and home equity	347,000		410,000
CDOs	190,000		233,000
Other	1,098,000		1,229,000
Total International Finance	21,049,000		24,952,000
Total	$	108,299,000	$	144,734,000


(1)	At December 31, 2015 and 2014, all asset-backed net par amounts outstanding relate to commercial asset-based transactions.

As of December 31, 2015 and 2014, the International Finance guaranteed portfolio is shown in the following table by location of risk:



Net Par Outstanding December 31	2015		2014
United Kingdom	$	15,494,000	$	17,998,000
Australia	1,851,000		2,168,000
Italy	948,000		1,415,000
Austria	737,000		841,000
France	288,000		88,000
Internationally diversified ⁽¹⁾	974,000		1,225,000
Other international	757,000		1,217,000
Total International Finance	$	21,049,000	$	24,952,000


(1)	Internationally diversified obligations represent pools of geographically diversified exposures which may include components of U.S. exposure.

Gross financial guarantees in force (principal and interest) was $188,853,000 and $253,383,000 at December 31, 2015 and 2014, respectively. Net financial guarantees in force (after giving effect to reinsurance) was $171,000,000 and $228,890,000 as of December 31, 2015 and 2014, respectively.

In the United States, California and New York were the states with the highest aggregate net par amounts in force, accounting for 14.3% and 5.3% of the total at December 31, 2015, respectively. No other state accounted for more than 5.0%. The highest single insured risk represented 1.6% of the aggregate net par amount guaranteed.