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Financial Guarantee Insurance Contracts (Tables)
 3 Months Ended
Mar. 31, 2021
Insurance [Line Items]  
Schedule of Loss And Loss Expense Reserves And Subrogation Recoverable Table [Table Text Block] at March 31, 2021 and December 31, 2020:
March 31, 2021:December 31, 2020:
Present Value of Expected
Net Cash Flows		Unearned
Premium
Revenue		Gross Loss and
Loss Expense
Reserves		Present Value of Expected
Net Cash Flows		Unearned
Premium
Revenue		Gross Loss and
Loss Expense
Reserves
Balance Sheet Line ItemClaims and
Loss Expenses		RecoveriesClaims and
Loss Expenses		Recoveries
Loss and loss expense reserves$1,831 $(102)$(67)$1,662 $2,060 $(229)$(72)$1,759 
Subrogation recoverable99 (2,175)— (2,076)100 (2,256)— (2,156)
Totals$1,930 $(2,277)$(67)$(414)$2,160 $(2,486)$(72)$(397)
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
The estimated future amortization expense for intangible assets is as follows:
Amortization expense
Insurance Intangible Asset (1) (2)
Other Intangible AssetsTotal
2021 (Nine months)$28 $2 $30 
202235 3 37 
202331 3 34 
202429 3 31 
202526 3 29 
Thereafter207 22 229 
(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. 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 have the right to call or prepay certain obligations. If those obligations 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 insurance intangible amortization period is 7.4 years.
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:
Three Months Ended March 31,20212020
Beginning premium receivable$370 $416 
Adjustment to initially apply ASU 2016-13— (3)
Premium receipts(12)(12)
Adjustments for changes in expected and contractual cash flows (1)
(8)10 
Accretion of premium receivable discount2 2 
Changes to allowance for credit losses4 (2)
Other adjustments (including foreign exchange)— (8)
Ending premium receivable (2)
$356 $403 
(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 March 31, 2021 and 2020, premium receivables include British
Pounds of $122 (£89) and $128 (£103), respectively, and Euros of $21 (€18) and $24 (€22), respectively.
Effect of Reinsurance on Premiums Written and Earned
The effect of reinsurance on premiums written and earned was as follows:
Three Months Ended March 31,
20212020
WrittenEarnedWrittenEarned
Direct$(2)$17 $11 $13 
Assumed— — — 1 
Ceded7 3 (1)3 
Net premiums$(9)$14 $12 $10 
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:
Three Months Ended March 31,20212020
United States$7 $7 
United Kingdom3 4 
Other international3 — 
Total$14 $10 
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 March 31, 2021:
Future Premiums
to be
Collected (1)
Future
Premiums to
be Earned Net of
Reinsurance (2)
Three months ended:
June 30, 2021$8 $8 
September 30, 20219 8 
December 31, 20218 8 
Twelve months ended:
December 31, 202234 31 
December 31, 202333 29 
December 31, 202432 28 
December 31, 202530 26 
Five years ended:
December 31, 2030129 110 
December 31, 203590 71 
December 31, 204042 29 
December 31, 204519 11 
December 31, 20507 4 
December 31, 20551 — 
Total$443 $364 
(1)Future premiums to be collected are undiscounted, gross of allowance for credit losses, 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 in the Notes to Consolidated Financial Statements included in Ambac's Annual Report on Form 10-K for the year ended December 31, 2020. 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
Premiums Receivable by Risk Classification Code [Table Text Block] Below is the amortized cost basis of premium receivables by risk classification code and asset class as of March 31, 2021 and December 31, 2020:
Surveillance Categories as of March 31, 2021
Type of Guaranteed BondIIAIIIIIIVTotal
Public Finance:
Housing revenue$152 $13 $— $— $— $165 
Other2 — — — — 2 
Total Public Finance154 13 — — — 167 
Structured Finance:
Mortgage-backed and home equity2 — 1 3 14 20 
Structured insurance14 — — — — 14 
Student loan2 — 2 10 — 14 
Other7 — — — — 7 
Total Structured Finance25 — 3 13 14 55 
International:
Sovereign/sub-sovereign86 12 — 12 — 111 
Investor-owned and public utilities30 — — — — 30 
Other6 — — — — 6 
Total International123 12 — 12 — 148 
Total (1)
$302 $25 $3 $25 $14 $369 
Surveillance Categories as of December 31, 2020
Type of Guaranteed BondIIAIIIIIIVTotal
Public Finance:
Housing revenue$155 $13 $— $— $— $168 
Other2 15 — — — 17 
Total Public Finance157 27 — — — 185 
Structured Finance:
Mortgage-backed and home equity3 — 1 3 15 22 
Structured insurance14 — — — — 14 
Student loan3 — 2 11 — 16 
Other7 — — — — 7 
Total Structured Finance27 — 3 14 15 59 
International:
Sovereign/sub-sovereign82 13 — 13 — 108 
Investor-owned and public utilities31 — — — — 31 
Other5 — — — — 5 
Total International118 13 — 13 — 144 
Total (1)
$302 $40 $3 $27 $15 $387 
(1)    The underwriting origination dates for all policies included are greater than five years prior to the current reporting date.
Premium Receivable, Allowance for Credit Loss [Table Text Block]
Below is a rollforward of the premium receivable allowance for credit losses as of March 31, 2021 and 2020:
Three Months Ended March 31,20212020
Beginning balance (1)
$17 $9 
Current period provision (2)
(4)5 
Write-offs of the allowance— — 
Recoveries of previously written-off amounts— — 
Ending balance$13 $14 
(1)At December 31, 2019, $9 of premiums receivable were deemed uncollectible as determined under prior GAAP rules.
(2)The three months ended March 31, 2020, includes $3 from the adoption of CECL.
Summary of Loss Reserve Roll-Forward, Net of Subrogation Recoverable and Reinsurance
Below is the loss and loss reserve expense roll-forward, net of subrogation recoverable and reinsurance, for the affected periods:
Three Months Ended March 31,20212020
Beginning gross loss and loss expense reserves$(397)$(482)
Reinsurance recoverable33 26 
Beginning balance of net loss and loss expense reserves(430)(508)
Losses and loss expenses (benefit):
Current year— 27 
Prior years
8 90 
Total (1) (2)
8 117 
Loss and loss expenses paid (recovered):
Current year— — 
Prior years25 39 
Total
25 39 
Foreign exchange effect
— — 
Ending net loss and loss expense reserves
(447)(430)
Reinsurance recoverable (3)
33 35 
Ending gross loss and loss expense reserves$(414)$(395)
(1)Total losses and loss expenses (benefit) includes $(1) and $(10) for the three months ended March 31, 2021 and 2020, respectively, related to ceded reinsurance.
(2)Ambac records the impact of estimated recoveries related to securitized loans in RMBS transactions that breached certain representations and warranties ("R&W's) by transaction sponsors within losses and loss expenses (benefit). The losses and loss expense (benefit) incurred associated with changes in estimated R&W's for the three months ended March 31, 2021 and 2020, was $3 and $(36), respectively.
(3)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 and $1 as of March 31, 2021 and 2020, 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
The tables below summarize information related to policies currently included in Ambac’s loss and loss expense reserves or subrogation recoverable at March 31, 2021 and December 31, 2020. 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 March 31, 2021 and December 31, 2020,was 1.8% and 1.1%, respectively.
Surveillance Categories as of March 31, 2021
IIAIIIIIIVVTotal
Number of policies36 25 17 15 131 5 229 
Remaining weighted-average contract period (in years) (1)
101881613715
Gross insured contractual payments outstanding:
Principal$738 $1,158 $599 $1,421 $3,124 $47 $7,087 
Interest255 1,078 479 199 1,376 25 3,413 
Total$994 $2,236 $1,078 $1,620 $4,500 $72 $10,500 
Gross undiscounted claim liability$3 $49 $41 $581 $1,498 $72 $2,245 
Discount, gross claim liability— (4)(1)(138)(224)(5)(372)
Gross claim liability before all subrogation and before reinsurance
3 46 40 443 1,274 67 1,872 
Less:
Gross RMBS subrogation (2)
— — — — (1,749)— (1,749)
Discount, RMBS subrogation— — — — 2 — 2 
Discounted RMBS subrogation, before reinsurance
— — — — (1,748)— (1,748)
Less:
Gross other subrogation (3)
— — — (36)(510)(12)(559)
Discount, other subrogation— — — 2 25 2 30 
Discounted other subrogation, before reinsurance
— — — (34)(485)(10)(530)
Gross claim liability, net of all subrogation and discounts, before reinsurance
3 46 40 409 (959)56 (405)
Less: Unearned premium revenue(2)(14)(5)(16)(29)(1)(67)
Plus: Loss expense reserves2 — 1 5 49 — 57 
Gross loss and loss expense reserves$2 $32 $36 $398 $(938)$56 $(414)
Reinsurance recoverable reported on Balance Sheet (4)
$— $7 $10 $24 $(8)$— $33 
(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 the Balance Sheet includes reinsurance recoverables of $33 related to future loss and loss expenses and $0 related to presented loss and loss expenses and subrogation.
Surveillance Categories as of December 31, 2020
IIAIIIIIIVVTotal
Number of policies40 25 15 15 132 5 232 
Remaining weighted-average contract period (in years) (1)
101881614714
Gross insured contractual payments outstanding:
Principal$842 $1,375 $595 $1,469 $3,246 $47 $7,573 
Interest279 1,011 484 215 1,427 26 3,443 
Total$1,121 $2,386 $1,079 $1,685 $4,673 $72 $11,016 
Gross undiscounted claim liability$3 $49 $40 $541 $1,690 $72 $2,395 
Discount, gross claim liability— (2)(1)(85)(213)(3)(303)
Gross claim liability before all subrogation and before reinsurance
3 47 40 456 1,477 69 2,092 
Less:
Gross RMBS subrogation (2)
— — — — (1,753)— (1,753)
Discount, RMBS subrogation— — — — 3 — 3 
Discounted RMBS subrogation, before reinsurance
— — — — (1,751)— (1,751)
Less:
Gross other subrogation (3)
— — — (36)(706)(12)(755)
Discount, other subrogation— — — 1 18 1 20 
Discounted other subrogation, before reinsurance
— — — (35)(689)(11)(735)
Gross claim liability, net of all subrogation and discounts, before reinsurance
3 47 39 421 (963)58 (394)
Less: Unearned premium revenue(2)(16)(5)(17)(30)(1)(72)
Plus: Loss expense reserves1 2 1 5 59 — 68 
Gross loss and loss expense reserves$2 $32 $35 $409 $(933)$57 $(397)
Reinsurance recoverable reported on Balance Sheet (4)
$— $6 $9 $24 $(6)$— $33 
(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 the Balance Sheet includes reinsurance recoverables of $33 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
Below is the rollforward of RMBS R&W subrogation for the affected periods:
Three Months Ended March 31,20212020
Discounted R&W subrogation (gross of reinsurance) at beginning of period$1,751 $1,727 
All other changes (1)
(3)$36 
Discounted R&W subrogation (gross of reinsurance) at end of period$1,748 $1,764 
(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/or the projected timing of recoveries.