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Financial Guarantee Insurance Contracts (Tables)
 12 Months Ended
Dec. 31, 2019
Insurance [Line Items]  
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]
The following table summarizes net premiums earned by location of risk:
Year Ended
December 31,
 
2019
 
2018
 
2017
United States
 
$
55

 
$
88

 
$
134

United Kingdom
 
17

 
19

 
33

Other international
 
(6
)
 
5

 
8

Total
 
$
66

 
$
111

 
$
175
Summary of Gross Premium Receivable Roll-Forward (Direct and Assumed Contracts)
Below is the gross premium receivable roll-forward (direct and assumed contracts) for the affected periods:
Year Ended
December 31,
2019
 
2018
 
2017
Beginning premium receivable
$
495

 
$
586

 
$
661

Premium receipts
(48
)
 
(56
)
 
(82
)
Adjustments for changes in expected and contractual cash flows (1)
(38
)
 
(42
)
 
(30
)
Accretion of premium receivable discount
11

 
15

 
16

Deconsolidation of certain VIEs
3

 
—

 
—

Changes to uncollectable premiums
(2
)
 
2

 
—

Other adjustments (including foreign exchange)
(6
)
 
(10
)
 
21

Ending premium receivable (2)
$
416

 
$
495

 
$
586


(1)
Adjustments for changes in expected and contractual cash flows primarily due to reductions in insured exposure as a result of early policy terminations and unscheduled principal paydowns.
(2)
Premium receivable includes premiums to be received in foreign denominated currencies most notably in British Pounds and Euros. At December 31, 2019, 2018 and 2017 premium receivables include British Pounds of $129 (£97), $131 (£103) and $152 (£112), respectively, and Euros of $26 (€23), $31 (€27) and $36 (€30), respectively.
Schedule Of Reinsurance Recoverable And Provision By Category Of Reinsurer [Table Text Block]
The following table represents the percentage ceded to reinsurers and unsecured reinsurance recoverable at December 31, 2019.
Reinsurers
 
Percentage
Ceded Par
 
Net Unsecured
Reinsurance
Recoverable (1)
Assured Guaranty Re Ltd
 
47%
 
$
—

Build America Mutual Assurance Company (2)
 
42
 
36

Assured Guaranty Corporation
 
8
 
5

Sompo Japan Nipponkoa Insurance, Inc.
 
3
 
—

Total
 
100%
 
$
41

(1)
Represents reinsurance recoverables on paid and unpaid losses and deferred ceded premiums, net of ceded premium payables due to reinsurers, letters of credit, and collateral posted for the benefit of Ambac Assurance.
(2)
Build America Mutual Assurance Company has an S&P rating of AA.
Effect of Reinsurance on Premiums Written and Earned
The effect of reinsurance on premiums written and earned was as follows:
Year Ended
December 31,
Direct
 
Assumed
 
Ceded (1)
 
Net
Premiums
2019:
 
 
 
 
 
 
 
Written
$
(28
)
 
$
—

 
$
31

 
$
(60
)
Earned
75

 
—

 
10

 
66

2018:
 
 
 
 
 
 
 
Written
$
(24
)
 
$
—

 
$
17

 
$
(41
)
Earned
119

 
—

 
8

 
111

2017:
 
 
 
 
 
 
 
Written
$
(14
)
 
$
—

 
$
(2
)
 
$
(12
)
Earned
190

 
—

 
15

 
175


(1)
Includes ceded premium activity related to the execution of reinsurance transactions in the years ended December 31, 2019 and 2018.
Summarized Future Gross Undiscounted Premiums Expected to be Collected and Future Expected Premiums Earned, Net of Reinsurance
The table below summarizes the future gross undiscounted premiums to be collected and future premiums earned, net of reinsurance at December 31, 2019:
 
Future Premiums
to be
Collected (1)
 
Future
Premiums
to be
Earned Net of
Reinsurance (2)
Three months ended:
 
 
 
March 31, 2020
$
14

 
$
10

June 30, 2020
11

 
10

September 30, 2020
10

 
10

December 31, 2020
9

 
10

Twelve months ended:
 
 
 
December 31, 2021
37

 
36

December 31, 2022
36

 
34

December 31, 2023
34

 
32

December 31, 2024
33

 
30

Five years ended:
 
 
 
December 31, 2029
143

 
124

December 31, 2034
102

 
82

December 31, 2039
47

 
38

December 31, 2044
22

 
14

December 31, 2049
9

 
5

December 31, 2054
1

 
1

Total
$
508

 
$
436

(1)
Future premiums to be collected are undiscounted and are used to derive the discounted premium receivable asset recorded on Ambac's balance sheet.
(2)
Future premiums to be earned, net of reinsurance relate to the unearned premiums liability and deferred ceded premium asset recorded on Ambac’s balance sheet. The use of contractual lives for many bond types which do not have homogeneous pools of underlying collateral is required in the calculation of the premium receivable as further described in Note 2. Basis of Presentation and Significant Accounting Policies. This results in a different premium receivable balance than if expected lives were considered. If installment paying policies are retired or prepay early, premiums reflected in the premium receivable asset and amounts reported in the above table for such policies may not be collected. Future premiums to be earned also considers the use of contractual lives for many bond types which do not have homogeneous pools of underlying collateral, which may result in different unearned premium than if expected lives were considered. If those bonds types are retired early, premium earnings may be negative in the period of call or refinancing.
Schedule of Loss And Loss Expense Reserves And Subrogation Recoverable Table [Table Text Block] Below are the components of the Loss and loss expense reserves liability and the Subrogation recoverable asset at December 31, 2019 and 2018:
 
Present Value of Expected
Net Cash Flows
 
Unearned
Premium
Revenue
 
Gross Loss and
Loss Expense
Reserves
Balance Sheet Line Item
Claims and
Loss Expenses
 
Recoveries
 
 
December 31, 2019:
 
 
 
 
 
 
 
Loss and loss expense reserves
$
1,835

 
$
(233
)
 
$
(54
)
 
$
1,548

Subrogation recoverable
131

 
(2,160
)
 
—

 
(2,029
)
Totals
$
1,966

 
$
(2,394
)
 
$
(54
)
 
$
(482
)
 
 
 
 
 
 
 
 
December 31, 2018:
 
 
 
 
 
 
 
Loss and loss expense reserves
$
2,246

 
$
(314
)
 
$
(107
)
 
$
1,826

Subrogation recoverable
176

 
(2,109
)
 
—

 
(1,933
)
Totals
$
2,422

 
$
(2,422
)
 
$
(107
)
 
$
(107
)
Summary of Loss Reserve Roll-Forward, Net of Subrogation Recoverable and Reinsurance
Below is the loss and loss expense reserve roll-forward, net of subrogation recoverable and reinsurance, for the affected periods.
Year Ended
December 31,
2019
 
2018
 
2017
Beginning gross loss and loss expense reserves
$
(107
)
 
$
4,114

 
$
3,696

Reinsurance recoverable
23

 
41

 
31

Beginning balance of net loss and loss expense reserves
(130
)
 
4,073

 
3,665

Losses and loss expenses (benefit) incurred:
 
 
 
 
 
Current year
1

 
5

 
6

Prior years (1)
12

 
(228
)
 
507

Total (2)(3)
13

 
(224
)
 
513

Loss and loss expenses (recovered) paid:
 
 
 
 
 
Current year
—

 
—

 
1

Prior years (1)
318

 
3,963

 
133

Total
318

 
3,964

 
134

Foreign exchange effect
(1
)
 
(15
)
 
29

Ending net loss and loss expense reserves
(436
)
 
(130
)
 
4,073

Impact of VIE consolidation
(72
)
 
—

 
—

Reinsurance recoverable (4)
26

 
23

 
41

Ending gross loss and loss expense reserves
(482
)
 
(107
)
 
4,114


(1)
2018 loss and loss expenses (recovered) paid includes the settlement of Deferred Amounts and Interest Accrued on Deferred Amounts in the amount of $3,000 and $857, respectively in connection with the Rehabilitation Exit Transactions through a combination of cash, surplus notes and secured notes. 2018 loss and loss expenses incurred includes a $288 loss and loss expense benefit on these settled Deferred Amounts.
(2)
Total losses and loss expenses (benefit) includes $(7), $(2) and $20 for the years ended December 31, 2019, 2018 and 2017, respectively, related to ceded reinsurance.
(3)
Ambac records the impact of estimated recoveries related to securitized loans in RMBS transactions that breached certain representations and warranties within losses and loss expenses (benefit). The losses and loss expense (benefit) incurred associated with changes in estimated representation and warranty recoveries for the year ended December 31, 2019, 2018 and 2017 was $42, $62 and $72, respectively.
(4)
Represents reinsurance recoverable on future loss and loss expenses. Additionally, the Balance Sheet line "Reinsurance recoverable on paid and unpaid losses" includes reinsurance recoverables (payables) of $0, $1 and $0 as of December 31, 2019, 2018 and 2017, respectively, related to previously presented loss and loss expenses and subrogation.
Summary of Information Related to Policies Currently Included in Ambac's Loss Reserves or Subrogation Recoverable tables below summarize information related to policies currently included in Ambac’s loss and loss expense reserves or subrogation recoverable at December 31, 2019 and 2018. Gross par exposures include capital appreciation bonds which are reported at the par amount at the time of issuance of the insurance policy as opposed to the current accreted value of the bond. The weighted average risk-free rate used to discount loss reserves at December 31, 2019 and 2018 was 2.1% and 2.8%, respectively.
 
 
Surveillance Categories as of December 31, 2019
 
 
I
 
IA
 
II
 
III
 
IV
 
V
 
Total
Number of policies
 
34

 
18

 
11

 
16

 
139

 
3

 
221

Remaining weighted-average contract period (in years) (1)
 
8

 
21

 
9

 
17

 
14

 
3

 
15

Gross insured contractual payments outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
$
668

 
$
510

 
$
277

 
$
857

 
$
3,819

 
$
37

 
$
6,168

Interest
 
340

 
507

 
128

 
366

 
1,678

 
11

 
3,029

Total
 
$
1,007

 
$
1,016

 
$
404

 
$
1,223

 
$
5,498

 
$
48

 
$
9,197

Gross undiscounted claim liability
 
$
2

 
$
44

 
$
21

 
$
541

 
$
1,778

 
$
48

 
$
2,434

Discount, gross claim liability
 
—

 
(5
)
 
(1
)
 
(152
)
 
(381
)
 
(2
)
 
(541
)
Gross claim liability before all subrogation and before reinsurance
 
$
2

 
$
39

 
$
20

 
$
389

 
$
1,397

 
$
46

 
$
1,893

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross RMBS subrogation (2)
 
$
—

 
$
—

 
$
—

 
$
—

 
$
(1,777
)
 
$
—

 
$
(1,777
)
Discount, RMBS subrogation
 
—

 
—

 
—

 
—

 
49

 
—

 
49

Discounted RMBS subrogation, before reinsurance
 
—

 
—

 
—

 
—

 
(1,727
)
 
—

 
(1,727
)
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross other subrogation (3)
 
—

 
—

 
—

 
(41
)
 
(666
)
 
(13
)
 
(720
)
Discount, other subrogation
 
—

 
—

 
—

 
4

 
47

 
3

 
53

Discounted other subrogation, before reinsurance
 
—

 
—

 
—

 
(37
)
 
(620
)
 
(10
)
 
(666
)
Gross claim liability, net of all subrogation and discounts, before reinsurance
 
$
2

 
$
39

 
$
20

 
$
353

 
$
(950
)
 
$
36

 
$
(501
)
Less: Unearned premium revenue
 
$
(1
)
 
$
(9
)
 
$
(1
)
 
$
(7
)
 
$
(35
)
 
$
—

 
$
(54
)
Plus: Loss expense reserves
 
1

 
1

 
1

 
4

 
67

 
—

 
73

Gross loss and loss expense reserves
 
$
1

 
$
30

 
$
20

 
$
349

 
$
(918
)
 
$
36

 
$
(482
)
Reinsurance recoverable reported on Balance Sheet (4)
 
$
—

 
$
6

 
$
7

 
$
24

 
$
(10
)
 
$
—

 
$
26

(1)
Remaining weighted-average contract period is weighted based on projected gross claims over the lives of the respective policies.
(2)
RMBS subrogation represents Ambac’s estimate of subrogation recoveries from RMBS transaction sponsors for representation and warranty ("R&W") breaches.
(3)
Other subrogation represents subrogation related to excess spread and other contractual cash flows on public finance and structured finance transactions including RMBS.
(4)
Reinsurance recoverable reported on Balance Sheet includes reinsurance recoverables of $26 related to future loss and loss expenses and $0 related to presented loss and loss expenses and subrogation.
 
 
Surveillance Categories as of December 31, 2018
 
 
I
 
IA
 
II
 
III
 
IV
 
V
 
Total
Number of policies
 
21

 
28

 
18

 
16

 
145

 
3

 
231

Remaining weighted-average contract period (in years) (1)
 
9

 
19

 
9

 
22

 
14

 
3

 
16

Gross insured contractual payments outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
$
917

 
$
708

 
$
623

 
$
1,705

 
$
5,407

 
$
43

 
$
9,403

Interest
 
488

 
632

 
293

 
6,979

 
2,178

 
13

 
10,583

Total
 
$
1,404

 
$
1,340

 
$
916

 
$
8,685

 
$
7,585

 
$
57

 
$
19,986

Gross undiscounted claim liability
 
$
4

 
$
64

 
$
36

 
$
992

 
$
2,296

 
$
57

 
$
3,448

Discount, gross claim liability
 
—

 
(13
)
 
(3
)
 
(434
)
 
(638
)
 
(4
)
 
(1,092
)
Gross claim liability before all subrogation and before reinsurance
 
$
4

 
$
51

 
$
33

 
$
558

 
$
1,658

 
$
52

 
$
2,356

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross RMBS subrogation (2)
 
$
—

 
$
—

 
$
—

 
$
—

 
$
(1,810
)
 
$
—

 
$
(1,810
)
Discount, RMBS subrogation
 
—

 
—

 
—

 
—

 
39

 
—

 
39

Discounted RMBS subrogation, before reinsurance
 
—

 
—

 
—

 
—

 
(1,771
)
 
—

 
(1,771
)
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross other subrogation (3)
 
—

 
(11
)
 
—

 
(137
)
 
(625
)
 
(13
)
 
(785
)
Discount, other subrogation
 
—

 
7

 
—

 
67

 
55

 
4

 
133

Discounted other subrogation, before reinsurance
 
—

 
(3
)
 
—

 
(70
)
 
(570
)
 
(9
)
 
(652
)
Gross claim liability, net of all subrogation and discounts, before reinsurance
 
$
4

 
$
47

 
$
33

 
$
489

 
$
(682
)
 
$
43

 
$
(66
)
Less: Unearned premium revenue
 
$
(1
)
 
$
(10
)
 
$
(5
)
 
$
(36
)
 
$
(54
)
 
$
—

 
$
(107
)
Plus: Loss expense reserves
 
1

 
4

 
3

 
(6
)
 
63

 
—

 
66

Gross loss and loss expense reserves
 
$
4

 
$
41

 
$
30

 
$
446

 
$
(672
)
 
$
43

 
$
(107
)
Reinsurance recoverable reported on Balance Sheet (4)
 
$
—

 
$
7

 
$
4

 
$
26

 
$
(15
)
 
$
—

 
$
23

(1)
Remaining weighted-average contract period is weighted based on projected gross claims over the lives of the respective policies.
(2)
RMBS subrogation represents Ambac's estimate of subrogation recoveries from RMBS transaction sponsors for R&W breaches.
(3)
Other subrogation represents subrogation related to excess spread and other contractual cash flows on public finance and structured finance transactions, including RMBS.
(4)
Reinsurance recoverable reported on Balance Sheet includes reinsurance recoverables of $23 related to future loss and loss expenses and $1 related to presented loss and loss expenses and subrogation.
Summary of Rollforward of RMBS Subrogation, by Estimation Approach w is the rollforward of RMBS R&W subrogation for the affected periods:
Year ended December 31,
2019
 
2018
 
2017
Discounted RMBS subrogation recovery
(gross of reinsurance) at beginning of year
$
1,771

 
$
1,834

 
$
1,907

All other changes (1)
(43
)
 
(64
)
 
(73
)
Discounted RMBS subrogation recovery (gross of reinsurance) at end of year
$
1,727

 
$
1,771

 
$
1,834

(1)
All other changes which may impact RMBS R&W subrogation recoveries include changes in actual or projected collateral performance, changes in the creditworthiness of a sponsor and the projected timing of recoveries. All other changes may also include estimates of potential sponsor settlements that may not have been subject to a sampling approach or have been executed, but the settlement amounts have not yet been received. Those that have not been subject to a sampling approach are not material to Ambac’s financial results and therefore are included in this table.
Insurance Intangible Asset [Member]  
Insurance [Line Items]  
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]
The estimated future amortization expense for the net insurance intangible asset is as follows:
Amortization expense (1) (2)
 
2020
$
45

2021
39

2022
36

2023
33

2024
30

Thereafter
244

(1)  
The insurance intangible asset will be amortized using a level-yield method based on par exposure of the related financial guarantee insurance or reinsurance contracts as described in Note 2. Basis of Presentation and Significant Accounting Policies. Future amortization considers the use of contractual lives for many bond types which do not have homogeneous pools of underlying collateral. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay certain obligations. If those bonds types are retired early, amortization expense may differ in the period of call or refinancing from the amounts provided in the table above.
(2)
The weighted-average amortizations period is 7.6 years.