Financial Guarantees in Force (Notes)

12 Months Ended

Dec. 31, 2020

Guarantees [Abstract]

Financial Guarantees in Force

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 include 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 as opposed to the current accreted value of the bonds. Financial guarantees outstanding exclude the exposures of policies that insure bonds which have been called, pre-refunded or refunded and excludes exposure of the policies insuring the Sitka Senior Secured Notes and LSNI Secured Notes as defined in Note 1. Background and Business Description. The gross par amount of financial guarantees outstanding was $34,122 and $39,070 at December 31, 2021 and 2020, respectively. The par amount of financial guarantees outstanding, net of reinsurance, was $28,020 and $33,888 at December 31, 2021 and 2020, respectively. As of December 31, 2021, the aggregate amount of financial guarantee insured par ceded to reinsurers under reinsurance agreements was $6,102 with the largest reinsurer accounting for $2,695 or 7.9% of gross par outstanding at December 31, 2021.

As of December 31, 2021 and 2020, the financial guarantee portfolio consisted of the types of guaranteed bonds as shown in the following table:

Net Par Outstanding December 31, (1)	2021		2020
Public Finance:
Housing revenue (2)	$	5,610	$	5,855
Lease and tax-backed revenue	3,196		4,179
General obligation	1,612		2,345
Other	1,942		3,118
Total Public Finance	12,360		15,497
Structured Finance:
Mortgage-backed and home equity	2,724		3,635
Investor-owned utilities	1,556		1,617
Other	624		1,085
Total Structured Finance	4,904		6,337
International Finance:
Sovereign/sub-sovereign	5,141		5,270
Investor-owned and public utilities	3,283		3,899
Asset-backed and other	1,276		1,374
Transportation	1,056		1,511
Total International Finance	10,756		12,054
Total	$	28,020	$	33,888

(1)Net Par Outstanding includes 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.

(2)Includes $5,490 and $5,575 of Military Housing net par at December 31, 2021 and 2020, respectively.

As of December 31, 2021 and 2020, the financial guaranteed portfolio by location of risk was as outlined in the table below:

Net Par Outstanding December 31,	2021		2020
United States	$	17,264	$	21,834
United Kingdom	9,255		9,711
Italy	718		803
Austria	343		707
France	219		277
Australia	203		420
Other international	18		136
Total	$	28,020	$	33,888

Gross financial guarantees in force (principal and interest) were $54,272 and $61,895 at December 31, 2021 and 2020, respectively. Net financial guarantees in force (after giving effect to reinsurance) were $42,653 and $51,603 as of December 31, 2021 and 2020, respectively.

In the United States, Colorado and California were the states with the highest aggregate net par amounts in force, accounting for 8.3% and 5.1% of the total at December 31, 2021, respectively. No other state accounted for more than 4%. The highest single insured risk represented 3.3% of the aggregate net par amount guaranteed.