Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Major Jurisdictions

The following are the major jurisdictions in which Ambac and its subsidiaries operate and the earliest tax years subject to examination:

Jurisdiction	Tax Year
United States	2010
New York State	2013
New York City	2018
United Kingdom	2020
Italy	2019

Significant Portions of Deferred Tax Liabilities and Deferred Tax Assets

The tax effects of temporary differences that give rise to significant portions of the deferred tax liabilities and deferred tax assets at December 31, 2023 and 2022, are presented below:

December 31,	2023		2022
Deferred tax liabilities:
Insurance intangible	$	51	$	56
Unearned premiums and credit fees	23		24
Variable interest entities	—		4
Other	3		1
Total deferred tax liabilities	77		85
Deferred tax assets:
Net operating loss carryforward	714		725
Interest expense carryforward	58		66
Loss reserves	42		38
Debentures	22		15
State capital loss carryforward	8		8
Compensation	5		6
Investments	—		6
Other	4		4
Subtotal deferred tax assets	853		867
Valuation allowance	795		796
Total deferred tax assets	58		70
Net deferred tax liability	$	19	$	15

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

U.S. and foreign components of pre-tax income (loss) were as follows:

Year Ended December 31,	2023		2022		2021
U.S.	$	(29)	$	511	$	(32)
Foreign	41		13		34
Total	$	12	$	525	$	2

Schedule of Components of Income Tax Expense (Benefit)

The components of the provision (benefit) for income taxes were as follows:

Year Ended December 31,	2023		2022		2021
Current taxes
U.S. state and local	$	1	$	—	$	2
Foreign	8		7		10
Total current taxes	8		6		12
Deferred taxes
Domestic	(2)		—		—
Foreign	1		(4)		6
Total deferred taxes	$	(1)	$	(4)	$	6
Provision for income taxes	$	7	$	2	$	18

Schedule Of Income Taxes Charged Credited Directly To Equity

The total effect of income taxes on net income and stockholders’ equity for the years ended December 31, 2023, 2022 and 2021 is as follows:

Year Ended December 31,	2023		2022		2021
Total income taxes charged to net income	$	7	$	2	$	18
Income taxes charged (credited) to stockholders’ equity:
Unrealized gains (losses) on investment securities, including foreign exchange	12		(47)		(3)
Change in retirement benefits	(1)		—		—
Credit Risk Changes to Fair Value Options	—		—		—
Valuation allowance to equity	(9)		41		1
Total charged to stockholders’ equity:	2		(6)		(2)
Total effect of income taxes	$	9	$	(4)	$	16

Schedule of Effective Income Tax Rate Reconciliation

Year Ended December 31,	2023		2022		2021
Total income taxes charged to net income	$	7	$	2	$	18
Income taxes charged (credited) to stockholders’ equity:
Unrealized gains (losses) on investment securities, including foreign exchange	12		(47)		(3)
Change in retirement benefits	(1)		—		—
Credit Risk Changes to Fair Value Options	—		—		—
Valuation allowance to equity	(9)		41		1
Total charged to stockholders’ equity:	2		(6)		(2)
Total effect of income taxes	$	9	$	(4)	$	16

Reconciliation of U.S. Federal Statutory Income Tax Rate to Actual Income Tax Rate

The tax provisions in the accompanying Consolidated Statements of Total Comprehensive Loss reflect effective tax rates differing from prevailing Federal corporate income tax rates. The following is a reconciliation of these differences:

Year Ended December 31,	2023				2022				2021
Tax on income (loss) at statutory rate	$	3	21	%	$	110	21	%	$	—	21	%
Changes in expected tax resulting from:
Tax-exempt interest	—		—	%	(1)		—	%	(2)		(114)	%
Foreign taxes	9		70	%	4		1	%	8		448	%
State Income Taxes	—		(1)	%	(1)		—	%	14		794	%
Return to Provision	15		118	%	—		—	%	—		—	%
Variable Interest Entities	(24)		(197)	%	25		5	%	—		—	%
Valuation allowance	2		13	%	(131)		(25)	%	(4)		(230)	%
Other, net	4		35	%	(4)		(1)	%	1		72	%
Tax expense on income (loss)	$	7	60	%	$	2	1	%	$	18	991	%

Schedule of Net Operating Loss And Tax Credit Carryovers

As of December 31, 2023, the Company has (i) $3,400 of NOLs, which if not utilized will begin expiring in 2030, and will fully expire in 2042, and (ii) $274 of interest expense tax deduction carryover, which has an indefinite carryforward period but is limited in any particular year based on certain provisions.