6. 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 exclude the exposures of policies that insure bonds which have been called, pre-refunded or refunded. The gross par amount of financial guarantees outstanding was $86,373,000 and $119,235,000 at December 31, 2016 and 2015, respectively. The par amount of financial guarantees outstanding, net of reinsurance, was $79,346,000 and $108,299,000 at December 31, 2016 and 2015, respectively.

As of December 31, 2016 and 2015, the guarantee portfolio was diversified by type of guaranteed bond as shown in the following table:



Net Par Outstanding December 31,	2016		2015
Public Finance:
Lease and tax-backed revenue	$	15,688,000	$	22,060,000
General obligation	9,867,000		15,946,000
Housing revenue	6,508,000		6,810,000
Utility revenue	4,298,000		8,218,000
Transportation revenue	3,860,000		5,589,000
Higher education	2,339,000		3,439,000
Health care revenue	1,484,000		2,234,000
Other	1,018,000		1,140,000
Total Public Finance	45,062,000		65,436,000
Structured Finance:
Mortgage-backed and home equity	9,383,000		11,387,000
Investor-owned utilities	3,833,000		4,921,000
Student loan	1,388,000		2,323,000
Asset-backed ⁽¹⁾	565,000		1,140,000
CDOs	132,000		306,000
Other	1,650,000		1,737,000
Total Structured Finance	16,951,000		21,814,000
International Finance:
Investor-owned and public utilities	6,168,000		7,208,000
Sovereign/sub-sovereign	5,211,000		6,218,000
Asset-backed ⁽¹⁾	2,951,000		3,870,000
Transportation	1,700,000		2,118,000
Mortgage-backed and home equity	254,000		347,000
CDOs	186,000		190,000
Other	863,000		1,098,000
Total International Finance	17,333,000		21,049,000
Total	$	79,346,000	$	108,299,000


(1)	At December 31, 2016 and 2015, all asset-backed net par amounts outstanding relate to commercial asset-based transactions.

As of December 31, 2016 and 2015, the International Finance guaranteed portfolio by location of risk was as outlined in the table below:



Net Par Outstanding December 31,	2016		2015
United Kingdom	$	12,798,000	$	15,494,000
Australia	1,393,000		1,851,000
Italy	898,000		948,000
Austria	696,000		737,000
France	286,000		288,000
Internationally diversified ⁽¹⁾	648,000		974,000
Other international	614,000		757,000
Total International Finance	$	17,333,000	$	21,049,000


(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) were $137,745,000 and $188,853,000 at December 31, 2016 and 2015, respectively. Net financial guarantees in force (after giving effect to reinsurance) were $126,306,000 and $171,000,000 as of December 31, 2016 and 2015, respectively.

In the United States, California and New York were the states with the highest aggregate net par amounts in force, accounting for 13.0% and 5.4% of the total at December 31, 2016, respectively. No other state accounted for more than 5.0%. The highest single insured risk represented 2.1% of the aggregate net par amount guaranteed.