Investments (Tables)

12 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Summary of Amortized Cost and Estimated Fair Value of Available-for-Sale Investments, Excluding VIE Investments

The amortized cost and estimated fair value of available-for-sale investments, excluding VIE investments, at December 31, 2021 and 2020 were as follows:

	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2021
Fixed maturity securities:
Municipal obligations	$	315	$	—	$	28	$	3	$	340
Corporate obligations	612		—		10		9		613
Foreign obligations	89		—		—		2		87
U.S. government obligations	45		—		1		1		45
Residential mortgage-backed securities	182		—		70		—		252
Collateralized debt obligations	128		—		—		—		128
Other asset-backed securities (2)	234		—		32		—		265
	1,605		—		141		16		1,730
Short-term	415		—		—		—		414
	2,020		—		141		16		2,145
Fixed maturity securities pledged as collateral:
U.S. government obligations	15		—		—		—		15
Short-term	105		—		—		—		105
	120		—		—		—		120
Total available-for-sale investments	$	2,140	$	—	$	141	$	16	$	2,265

	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2020
Fixed maturity securities:
Municipal obligations	$	321	—		37		—		358
Corporate obligations (1)	1,059		—		24		6		1,077
Foreign obligations	97		—		1		—		98
U.S. government obligations	105		—		2		1		106
Residential mortgage-backed securities	256		—		46		—		302
Collateralized debt obligations	74		—		—		—		74
Other asset-backed securities (2)	263		—		40		—		303
	2,175		—		149		8		2,317
Short-term	492		—		—		—		492
	2,667		—		149		8		2,809
Fixed maturity securities pledged as collateral:
U.S. government obligations	15		—		—		—		15
Short-term	125		—		—		—		125
	140		—		—		—		140
Total available-for-sale investments	2,807		$	—	$	149	$	8	$	2,949

(1)Includes Ambac's holdings of the LSNI Secured Notes issued in connection with the Rehabilitation Exit Transactions.

(2)Consists primarily of Ambac's holdings of military housing and student loan securities.

Summary of Amortized Cost and Estimated Fair Value of Available-for-Sale Investments, Excluding VIE Investments Held by Successor Ambac, by Contractual Maturity

The amortized cost and estimated fair value of available-for-sale investments, excluding VIE investments, at December 31, 2021, by contractual maturity, were as follows:

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	565	$	565
Due after one year through five years	457		457
Due after five years through ten years	406		411
Due after ten years	168		188
	1,596		1,620
Residential mortgage-backed securities	182		252
Collateralized debt obligations	128		128
Other asset-backed securities	234		265
Total	$	2,140	$	2,265

Summary of Gross Unrealized Losses and Fair Values of Ambac's Available-for-Sale Investments

The following table shows gross unrealized losses and fair values of Ambac’s available-for-sale investments, excluding VIE investments, which at December 31, 2021, did not have an allowance for credit losses under the CECL standard. This information is aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at December 31, 2021 and 2020:

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
December 31, 2021
Fixed maturity securities:
Municipal obligations	$	117	$	3	$	2	$	—	$	118	$	3
Corporate obligations	363		8		17		1		380		9
Foreign obligations	75		2		3		—		78		2
U.S. government obligations	25		—		2		—		27		1
Residential mortgage-backed securities	—		—		1		—		2		—
Collateralized debt obligations	68		—		3		—		71		—
Other asset-backed securities	6		—		—		—		6		—
	654		14		28		1		682		16
Short-term	114		—		13		—		128		—
	768		14		41		1		810		16
Fixed maturity securities, pledged as collateral:
U.S. government obligations	15		—		—		—		15		—
Total collateralized investments	15		—		—		—		15		—
Total temporarily impaired securities	$	783	$	14	$	41	$	1	$	825	$	16

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
December 31, 2020
Fixed maturity securities:
Municipal obligations	$	25	$	—	$	6	$	—	$	31	$	—
Corporate obligations	543		6		—		—		543		6
Foreign obligations	3		—		—		—		3		—
U.S. government obligations	17		1		—		—		17		1
Residential mortgage-backed securities	14		—		—		—		14		—
Collateralized debt obligations	27		—		15		—		42		—
Other asset-backed securities	—		—		4		—		4		—
	629		7		25		—		654		8
Short-term	187		—		—		—		187		—
	816		7		25		—		841		8
Fixed maturity securities, pledged as collateral:
U.S. government obligations	—		—		—		—		—		—
Total collateralized investments	—		—		—		—		—		—
Total securities	$	816	$	7	$	25	$	—	$	841	$	8

Summary of Amounts Included in Net Realized (Losses) Gains and Other-Than-Temporary Impairments

The following table details amounts included in net investment gains (losses) and impairments included in earnings for the affected periods:

Year Ended December 31,	2021		2020		2019
Gross realized gains on securities	$	14	$	38	$	64
Gross realized losses on securities	(2)		(12)		(5)
Foreign exchange (losses) gains	(5)		(4)		22
Credit impairments	—		—		—
Intent / requirement to sell impairments	—		—		—
Net realized gains (losses)	$	7	$	22	$	81

Summary of Roll-Forward of Ambac's Cumulative Credit Losses on Debt Securities for Which Portion of Other-than-Temporary Impairment was Recognized in Other Comprehensive Income

Year Ended December 31,	2019
Balance, beginning of period	$	12
Reductions for credit impairments previously recognized on:
Securities that matured or were sold during the period	(1)
Balance, end of period	$	12

Summary of Fair Value, Including Financial Guarantee, and Weighted-Average Underlying Rating, Excluding Financial Guarantee, of Insured Securities

The following table represents the fair value and weighted-average underlying rating of insured securities in Ambac's investment portfolio at December 31, 2021 and 2020, respectively: 

	Municipal Obligations		Corporate Obligations (2)		Mortgage and Asset- backed Securities		Total		Weighted Average Underlying Rating (1)
December 31, 2021:
Ambac Assurance Corporation	$	316	$	—	$	439	$	754	B
National Public Finance Guarantee Corporation	2		—		—		2		BBB-
Assured Guaranty Municipal Corporation	1		—		—		1		A-
Total	$	318	$	—	$	439	$	757	B
December 31, 2020:
Ambac Assurance Corporation	$	320	$	465	$	481	$	1,266	CCC+
National Public Finance Guarantee Corporation	6		—		—		6		BBB-
Assured Guaranty Municipal Corporation	1		—		—		1		C
Total	$	327	$	465	$	481	$	1,273	CCC+

(1)Ratings are based on the lower of Standard & Poor’s or Moody’s rating. If unavailable, Ambac’s internal rating is used.

(2)Represents Ambac's holdings of LSNI Secured Notes issued in connection with the Rehabilitation Exit Transactions. These secured notes were insured by AAC. As further described in Note 1. Background and Business Description, on July 6, 2021, the LSNI Secured Notes were fully redeemed.

Summary of Net Investment Income

Net investment income (loss) was comprised of the following for the affected periods:

Year Ended December 31,	2021		2020		2019
Fixed maturity securities	$	78	$	103	$	183
Short-term investments	—		5		17
Loans	—		1		1
Investment expense	(6)		(6)		(6)
Securities available-for-sale and short-term	74		103		196
Other investments	66		19		32
Total net investment income (loss)	$	139	$	122	$	227

Net investment income (loss) from Other investments primarily represents changes in fair value on equity securities including certain pooled investment funds, and income from investment limited partnerships and other equity interests accounted for under the equity method.

The portion of net unrealized gains (losses) related to securities classified as trading and equity securities, excluding those reported using the equity method, still held at the end of each period is as follows:

Year Ended December 31,	2021		2020		2019
Net gains (losses) recognized during the period on trading securities	$	23	$	—	$	24
Less: net gains (losses) recognized during the reporting period on trading securities sold during the period	1		(18)		7
Unrealized gains (losses) recognized during the reporting period on trading securities still held at the reporting date	$	22	$	18	$	17