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Loss Reserves (Tables)
 12 Months Ended
Dec. 31, 2015
Insurance Loss Reserves [Abstract]  
Reconciliation of beginning and ending loss reserves
The following table provides a reconciliation of beginning and ending loss reserves for each of the past three years:

(In thousands)
 
2015
 
2014
 
2013
Reserve at beginning of year
 
$
2,396,807

 
$
3,061,401

 
$
4,056,843

Less reinsurance recoverable
 
57,841

 
64,085

 
104,848

Net reserve at beginning of year
 
2,338,966

 
2,997,316

 
3,951,995

 
 
 
 
 
 
 
Losses incurred:
 
 
 
 
 
 
Losses and LAE incurred in respect of default notices received in:
 
 
 
 
 
 
Current year
 
453,849

 
596,436

 
898,413

Prior years (1)
 
(110,302
)
 
(100,359
)
 
(59,687
)
Subtotal
 
343,547

 
496,077

 
838,726

 
 
 
 
 
 
 
Losses paid:
 
 
 
 
 
 
Losses and LAE paid in respect of default notices received in:
 
 
 
 
 
 
Current year
 
25,980

 
32,919

 
73,470

Prior years
 
823,058

 
1,121,508

 
1,722,923

Reinsurance terminations (2)
 
(15,440
)
 
—

 
(2,988
)
Subtotal
 
833,598

 
1,154,427

 
1,793,405

Net reserve at end of year
 
1,848,915

 
2,338,966

 
2,997,316

Plus reinsurance recoverables
 
44,487

 
57,841

 
64,085

 
 
 
 
 
 
 
Reserve at end of year
 
$
1,893,402

 
$
2,396,807

 
$
3,061,401

(1)
A negative number for prior year losses incurred indicates a redundancy of prior year loss reserves. See table below regarding prior year loss development.
(2)
In a termination, the reinsurance agreement is cancelled, with no future premium ceded and funds for any incurred but unpaid losses transferred to us. The transferred funds result in an increase in our investment portfolio (including cash and cash equivalents) and a decrease in net losses paid (reduction to losses incurred). In addition, there is an offsetting decrease in the reinsurance recoverable (increase in losses incurred), and thus there is no net impact to losses incurred. (See Note 11 – “Reinsurance”)
Prior year development of the reserves
The prior year development of the reserves in 2015, 2014 and 2013 is reflected in the table below.
(In millions)
 
2015
 
2014
 
2013
Prior year loss development:
 
 
 
 
 
 
(Decrease) increase in estimated claim rate on primary defaults
 
$
(141
)
 
$
(43
)
 
$
10

Increase (decrease) in estimated severity on primary defaults
 
43

 
(35
)
 
(50
)
Change in estimates related to pool reserves, LAE reserves, reinsurance and other
 
(12
)
 
(22
)
 
(20
)
Total prior year loss development (1)
 
$
(110
)
 
$
(100
)
 
$
(60
)
(1) A negative number for prior year loss development indicates a redundancy of prior year loss reserves.
Rollforward of primary default inventory

A rollforward of our primary default inventory for the years ended December 31, 2015, 2014 and 2013 appears in the table below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers.
 
2015
 
2014
 
2013
Default inventory at beginning of year
79,901

 
103,328

 
139,845

New Notices
74,315

 
88,844

 
106,823

Cures
(73,610
)
 
(87,278
)
 
(104,390
)
Paids (including those charged to a deductible or captive)
(16,004
)
 
(23,494
)
 
(34,738
)
Rescissions and denials
(848
)
 
(1,306
)
 
(1,939
)
Items removed from inventory resulting from settlements
(1,121
)
 
(193
)
 
(2,273
)
Default inventory at end of year
62,633

 
79,901

 
103,328
Aging of the primary default inventory
The percentage of loans that have been in default for 12 or more consecutive months has been affected by our suspended rescissions discussed below.
Aging of the Primary Default Inventory
 
December 31,
 
2015
 
2014
 
2013
Consecutive months in default
 
 
 
 
 
 
 
 
 
 
 
3 months or less
13,053

 
21
%
 
15,319

 
19
%
 
18,941

 
18
%
4 - 11 months
15,763

 
25
%
 
19,710

 
25
%
 
24,514

 
24
%
12 months or more (1)
33,817

 
54
%
 
44,872

 
56
%
 
59,873

 
58
%
Total primary default inventory
62,633

 
100
%
 
79,901

 
100
%
 
103,328

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
Primary claims received inventory included in ending default inventory (2)
2,769

 
4
%
 
4,746

 
6
%
 
6,948

 
7
%
(1)
Approximately 50%, 53% and 49% of the primary default inventory in default for 12 consecutive months or more has been in default for at least 36 consecutive months as of December 31, 2015, 2014 and 2013, respectively.
(2)
Our claims received inventory includes suspended rescissions, as we have voluntarily suspended rescissions of coverage related to loans that we believed would be included in a potential resolution. As of December 31, 2015, rescissions of coverage on approximately 435 loans had been voluntarily suspended.
Number of payments delinquent
The number of payments that a borrower is delinquent is shown in the table below.
Number of Primary Payments Delinquent
 
December 31,
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
3 payments or less
20,360

 
33
%
 
23,253

 
29
%
 
28,095

 
27
%
4 - 11 payments
15,092

 
24
%
 
19,427

 
24
%
 
24,605

 
24
%
12 payments or more
27,181

 
43
%
 
37,221

 
47
%
 
50,628

 
49
%
Total primary default inventory
62,633

 
100
%
 
79,901

 
100
%
 
103,328

 
100
%