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Financial Guarantee Insurance Contracts (Tables)
 12 Months Ended
Dec. 31, 2023
Insurance [Line Items]  
Effect of Reinsurance on Premiums Written and Earned
The effect of reinsurance on premiums written and earned was as follows:
Year Ended
December 31,		DirectAssumed
Ceded
Net
Premiums
2023:
Written$249 $40 $244 $44 
Earned224 18 164 78 
2022:
Written$127 $— $104 $23 
Earned126 — 69 56 
2021:
Written$2 $— $35 $(33)
Earned62 — 15 47 
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 31,202320222021
United States65 $41 $27 
United Kingdom11 13 14 
Other international2 3 6 
Total78 $56 $47 
Premium Receivables, including Credit Impairments
Premium receivables at December 31, 2023 and 2022 were $290 and $269, respectively.
Below is the gross premium receivable roll-forward, net of the allowance for credit losses, for the affected periods:
Year Ended December 31,
202320222021
Beginning premium receivable$269 $323 $370 
Premiums written on new business, net of commissions
210 117 10 
Premium receipts(208)(139)(43)
Adjustments for changes in expected and contractual cash flows for contracts (1)
6 (31)(27)
Accretion of premium receivable discount for contracts8 8 8 
Consolidation of VIEs
(1)— — 
Changes to allowance for credit losses1 4 8 
Other adjustments (including foreign exchange) (2)
4 (12)(4)
Ending premium receivable (3)
$290 $269 $323 
(1)Adjustments for changes in expected and contractual cash flows are primarily due to indexation offset by reductions in insured exposure as a result of early policy terminations and unscheduled principal paydowns for financial guarantee policies.
(2)Includes foreign exchange gains/(losses) of $4, ($13) and $(2) for 2023, 2022,and 2021 respectively.
(3)Premium receivable includes premiums to be received in foreign denominated currencies most notably in British Pounds and Euros. At December 31, 2023, 2022 and 2021 premium receivables include British Pounds of $72 (£57), $71 (£59) and $108 (£80), respectively, and Euros of $13 (€12), $14 (€13) and $16 (€14), respectively.
Management evaluates premium receivables for expected credit losses ("credit impairment") in accordance with the CECL
standard, which is further described in Note 2. Basis of Presentation and Significant Accounting Policies. The key indicator management uses to assess the credit quality of legacy financial guarantee premium receivables is Ambac's internal risk classifications for the insured obligation determined by the Risk Management Group.
Below is the amortized cost basis of financial guarantee premium receivables by risk classification code and asset class as of December 31, 2023 and 2022:
Surveillance Categories as of December 31, 2023Surveillance Categories as of December 31, 2022
Type of Guaranteed BondIIAIIIIIIVTotalIIAIIIIIIVTotal
Public Finance:
Housing revenue$131 $3 $5 $— $— $139 $140 $3 $5 $— $— $148 
Other1 — — — — 1 2 — — — — 2 
Total Public Finance133 3 5 — — 140 142 3 5 — — 150 
Structured Finance:
Mortgage-backed and home equity— — — — 11 12 — — — — 11 11 
Student loan— — — 7 — 7 1 1 — 7 — 8 
Other4 — — — — 4 4 — — — — 4 
Total Structured Finance4 — — 7 11 22 5 1 — 7 11 24 
International:
Sovereign/sub-sovereign51 13 — — — 64 49 7 — 9 — 64 
Investor-owned and public utilities18 — — — — 18 18 — — — — 18 
Other3 — — — — 3 2 — — — — 2 
Total International72 13 — — — 85 70 7 — 9 — 85 
Total (1) (2)
$210 $16 $5 $7 $11 $248 $217 $10 $5 $16 $11 $259 
(1)    Excludes specialty property and casualty premium receivables of $46 and $16 at December 31, 2023 and 2022, respectively and has recorded an allowance for credit losses of less than a million in both periods.
(2)    The underwriting origination dates for all policies included are greater than five years prior to the current reporting date.
Summarized Future Gross Undiscounted Premiums Expected to be Collected and Future Expected Premiums Earned, Net of Reinsurance
The following table summarizes the future Legacy Financial Guarantee gross undiscounted premiums to be collected and future premiums earned, net of reinsurance at December 31, 2023:
Future Premiums
to be
Collected (1)
Future
Premiums
to be
Earned Net of
Reinsurance (2)
Three months ended:
March 31, 2024$8 $5 
June 30, 20246 4 
September 30, 20247 4 
December 31, 20245 4 
Twelve months ended:
December 31, 202526 16 
December 31, 202625 16 
December 31, 202724 15 
December 31, 202823 14 
Five years ended:
December 31, 203393 55 
December 31, 203854 28 
December 31, 204325 9 
December 31, 204812 4 
December 31, 20532 1 
Total$310 $173 
(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. 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 Below are the components of the loss and loss adjustment expense reserves and the subrogation recoverable asset at December 31, 2023 and 2022:
December 31, 2023:December 31, 2022:
LFGLFG
SPCPresent Value of Expected
Net Cash Flow		SPCPresent Value of Expected
Net Cash Flow
Balance Sheet Line ItemGross Loss and
Loss Expense
Reserves		Claims and
Loss Expenses		RecoveriesUnearned
Premium
Revenue		Gross Loss and
Loss Expense
Reserves		Gross Loss and
Loss Expense
Reserves		Claims and
Loss Expenses		RecoveriesUnearned
Premium
Revenue		Gross Loss and
Loss Expense
Reserves
Loss and loss adjustment expense reserves$197 $779 $(55)$(28)$893 $90 $787 $(44)$(28)$805 
Subrogation recoverable— 1 (139)— (137)— 5 (276)— (271)
Totals$197 $780 $(194)$(28)$756 $90 $791 $(319)$(28)$534 
SPC = Specialty Property and Casualty, LFG = Legacy Financial Guarantee
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.
Year Ended December 31,202320222021
Beginning gross loss and loss adjustment expense reserves$534 $(522)$(397)
Reinsurance recoverable115 56 33 
Beginning balance of net loss and loss adjustment expense reserves419 (578)(430)
Losses and loss expenses (benefit) incurred:
Current year37 4 — 
Prior years(69)(401)(89)
Total (1)(2)
(32)(397)(88)
Loss and loss adjustment expenses (recovered) paid:
Current year4 7 — 
Prior years(194)(1,867)59 
Total(190)(1,860)59 
Foreign exchange effect— (2)— 
Ending net loss and loss adjustment expense reserves577 883 (578)
Impact of VIE consolidation (3)
(7)(464)— 
Reinsurance recoverable (4)
186 115 56 
Ending gross loss and loss adjustment expense reserves756 534 (522)
(1)Total losses and loss expenses (benefit) includes $(110), $(41) and $5 for the years ended December 31, 2023, 2022 and 2021, 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) for the Legacy Financial Guarantee Insurance segment. The losses and loss expense (benefit) incurred associated with changes in estimated R&W's for the year ended December 31, 2023, 2022 and 2021 was $0, $(123) and $20, respectively. Refer to Note 1. Background and Business
Description to the Consolidated Financial Statements in this Annual Report on Form 10-K for details of the RMBS litigation settlements reached in October and December 2022.
(3)Ambac consolidated one, three and zero LFG VIEs during the years ended December 31, 2023, 2022 and 2021, respectively as further discussed in Note 11. Variable Interest Entities.
(4)Represents reinsurance recoverable on future loss and loss adjustment expenses. Additionally, the Balance Sheet line "Reinsurance recoverable on paid and unpaid losses" includes reinsurance recoverables (payables) of $8, $0 and $0 as of December 31, 2023, 2022 and 2021, respectively, related to previously presented loss and loss adjustment 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 adjustment expense reserves or subrogation recoverable at December 31, 2023 and 2022, excluding consolidated VIEs. 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, 2023 and 2022 was 3.9% and 3.9%, respectively.
Surveillance Categories as of December 31, 2023Surveillance Categories as of December 31, 2022
IIAIIIIIIVVTotalIIAIIIIIIVVTotal
Number of policies18 8 9 13 88 5 141 37 6 9 12 93 5 162 
Remaining weighted-average contract period (in years) (1)
99131312712719141412714
Gross insured contractual payments outstanding:
Principal$429 $1,084 $430 $394 $1,473 $27 $3,838 $709 $200 $459 $1,000 $1,646 $34 $4,047 
Interest75 328 262 139 600 17 1,421 526 198 286 156 565 19 1,750 
Total$505 $1,412 $692 $534 $2,073 $44 $5,259 $1,235 $399 $745 $1,156 $2,210 $53 $5,797 
Gross undiscounted claim liability$1 $19 $41 $324 $772 $44 $1,202 $4 $4 $43 $446 $729 $53 $1,279 
Discount, gross claim liability— (2)(7)(86)(323)(8)(426)(1)(1)(7)(162)(316)(9)(496)
Gross claim liability before all subrogation and before reinsurance$1 $17 $34 $239 $450 $36 $777 $3 $3 $36 $284 $413 $43 $783 
Less:
Gross RMBS subrogation (2)
$— $— $— $— $— $— $— $— $— $— $— $(140)$— $(140)
Discount, RMBS subrogation— — — — — — — — — — — — — — 
Discounted RMBS subrogation, before reinsurance— — — — — — — — — — — (140)— (140)
Less:
Gross other subrogation (3)
(13)(2)— (27)(208)(11)(263)(14)(4)— (31)(172)(12)(233)
Discount, other subrogation2 — — 4 60 3 69 2 — — 5 42 4 54 
Discounted other subrogation, before reinsurance(11)(2)— (23)(149)(8)(194)(12)(3)— (26)(130)(8)(179)
Gross claim liability, net of all subrogation and discounts, before reinsurance$(10)$15 $34 $215 $301 $28 $583 $(9)$— $36 $258 $143 $35 $464 
Less: Unearned premium revenue$— $(12)$(4)$— $(10)$(1)$(28)$(2)$(2)$(5)$(8)$(10)$(1)$(28)
Plus: Loss expense reserves— 3 — — 1 — 4 1 1 — 2 4 — 8 
Gross loss and loss adjustment expense reserves
$(10)$6 $30 $215 $292 $27 $559 $(10)$(2)$32 $252 $137 $34 $444 
Reinsurance recoverable reported on Balance Sheet (4)
$1 $— $8 $18 $3 $— $30 $1 $— $8 $21 $3 $— $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 $30 and $33 related to future loss and loss adjustment expenses and $8 and $0 related to presented loss and loss adjustment expenses and subrogation at December 31, 2023 and 2022, respectively.
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense ntangible asset and accumulated amortization are included in the Consolidated Balance Sheets, as shown below.
December 31,20232022
Finite-lived Intangible Assets:
Insurance intangible:
Gross carrying value$1,258 $1,247 
Accumulated amortization1,013 981 
Net insurance intangible asset245 266 
Other intangibles:
Gross Carrying value57 52 
Accumulated amortization10 6 
Net other intangible assets47 47 
Total finite-lived intangible assets$292 $312 
Indefinite-lived Intangible Assets:
Insurance licenses$14 $14 
Total intangible assets$307 $326 
Premium Receivable, Allowance for Credit Loss
Below is a rollforward of the premium receivable allowance for credit losses as of December 31, 2023 and 2022:
Year Ended December 31,202320222021
Beginning balance$5 $9 $17 
Current period provision (benefit)(1)(4)(6)
Write-offs of the allowance— — (2)
Recoveries of previously written-off amounts— — — 
Ending balance$4 $5 $9 
Schedule of Financial Guarantee Insurance In Force By Bond Type
As of December 31, 2023 and 2022, the legacy financial guarantee portfolio consisted of the types of guaranteed bonds as shown in the following table:
Net Par Outstanding December 31, (1)
20232022
Public Finance:
Housing revenue (2)
$3,443 $5,491 
Lease and tax-backed revenue1,542 1,979 
General obligation1,051 1,301 
Other1,526 1,776 
Total Public Finance7,562 10,547 
Structured Finance:
Mortgage-backed and home equity1,712 1,930 
Investor-owned utilities1,077 1,103 
Other526 579 
Total Structured Finance3,315 3,612 
International Finance:
Sovereign/sub-sovereign4,221 4,077 
Investor-owned and public utilities2,855 2,583 
Asset-backed and other862 1,083 
Transportation726 711 
Total International Finance8,664 8,454 
Total$19,541 $22,613 
(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 $3,371 and $5,400 of Military Housing net par at December 31, 2023 and 2022, respectively.
Reinsurance Recoverable, Credit Quality Indicator The following table sets forth our three most significant reinsurers by amount of reinsurance recoverable as of December 31, 2023.
Reinsurers
Type of Insurance
Rating
 (1)
Reinsurance
Recoverable
(2)
Unsecured
Recoverable
(3)
General Reinsurance CompanySpecialty P&CA++$81 $69 
QBE Insurance CorporationSpecialty P&CA38 38 
Assured Guaranty Re Ltd.Financial
Guarantee		AA25 — 
All other
reinsurers
50 21 
Total recoverables
$195 $128 
(1)Represents financial strength ratings from S&P for financial guarantee reinsurers and AM Best for specialty P&C reinsurers.
(2)Represents reinsurance recoverables on paid and unpaid losses. Unsecured amounts from QBE Insurance Corporation is also supported by an unlimited, uncapped indemnity from Enstar Holdings (US).
(3)Reinsurance recoverables reduced by ceded premiums payables due to reinsurers, letters of credit, and collateral posted for the benefit of Ambac.
Short-Duration Insurance Contracts, Schedule of Historical Claims Duration
The claim development tables that follow present, by accident year, incurred and cumulative paid claims and allocated claim adjustment expense on a historical basis. This claim development information is presented on an undiscounted, net of reinsurance basis since 2021, Everspan's entry into the Specialty P&C business. The claim development tables also provide the historical average annual percentage payout of incurred claims by age, net of reinsurance, as supplementary information (identified as unaudited in the tables below). The historical average annual percentage payout for incurred claims is subject to variability due to the impact of both large claim activity and subrogation recoveries, among other items.
Commercial Auto
Incurred Claims and Allocated LAE, Net of Reinsurance
Accident YearYear ended December 31,IBNR Reserves at December 31, 2023Cumulative Number of Reported Claims
202120222023
Unaudited
2021$— $— $1 $— 75
20228 8 3 1,112
202319 10 2,531
Total$28 
Cumulative Paid Claims and Allocated Claim Adjustment Expenses,
Net of Reinsurance
Accident YearYear ended December 31,Liability for Loss and Loss Adjustment Expenses, Net of Reinsurance
202120222023
Unaudited
2021$— $— $— 
20221 2 2021 -Before
20234 20232021
Total6 22 — 
Total net liability22 
Average Annual Percentage Payout of Incurred Claims by Age,
Net of Reinsurance
Unaudited
Years123
9.3 %2.9 %10.7 %
Other
Incurred Claims and Allocated LAE, Net of Reinsurance
Accident YearYear Ended December 31,IBNR Reserves at December 31, 2023Cumulative Number of Reported Claims
202120222023
Unaudited
2021$— $— $— $— 0
2022— — — 646
202316 8 11,595
Total$16 
Cumulative Paid Claims and Allocated LAE,
Net of Reinsurance
Accident YearYear Ended December 31,Liability for Loss and Loss Adjustment Expenses, Net of Reinsurance
202120222023
Unaudited
2021$— $— $— 
2022— — 2021 -Before
20232 20232021
Total2 14 — 
Total net liability14 
Average Annual Percentage Payout of Incurred Claims by Age,
Net of Reinsurance
Unaudited
Years123
3.1 %0.9 %— %