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Loss Reserves (Tables)
 9 Months Ended
Sep. 30, 2018
Insurance Loss Reserves [Abstract]  
Reconciliation of beginning and ending loss reserves
Table 12.1 provides a reconciliation of beginning and ending loss reserves as of and for the nine months ended September 30, 2018 and 2017.
 
Table
12.1
 
 
 
 
Development of reserves for losses and loss adjustment expenses
 
 
 
Nine months ended September 30,
(In thousands)
 
2018
 
2017
Reserve at beginning of period
 
$
985,635

 
$
1,438,813

Less reinsurance recoverable
 
48,474

 
50,493

 
Net reserve at beginning of period
 
937,161

 
1,388,320

 
 
 
 
 
 
 
Losses incurred:
 
 
 
 
 
Losses and LAE incurred in respect of delinquency notices received in:
 
 
 
 
 
Current year
 
155,808

 
219,485

 
Prior years (1)
 
(146,931
)
 
(134,780
)
 
Total losses incurred
 
8,877

 
84,705

 
 
 
 
 
 
 
Losses paid:
 
 
 
 
 
Losses and LAE paid in respect of delinquency notices received in:
 
 
 
 
 
Current year
 
2,449

 
5,474

 
Prior years
 
257,808

 
407,977

 
Reinsurance terminations
 
(1,984
)
 
301

 
Total losses paid
 
258,273

 
413,752

 
Net reserve at end of period
 
687,765

 
1,059,273

 
Plus reinsurance recoverables
 
33,281

 
45,878

 
Reserve at end of period
 
$
721,046

 
$
1,105,151

(1) 
A negative number for prior year losses incurred indicates a redundancy of prior year loss reserves. See the following table for more information about prior year loss development.
Prior year development of the reserves
The prior year development of the reserves in the first nine months of 2018 and 2017 is reflected in table 12.2 below.
 
Table
12.2
 
 
 
 
Reserve development on previously received delinquencies
 
 
 
Nine months ended September 30,
(in millions)
 
2018
 
2017
Decrease in estimated claim rate on primary defaults
 
$
(184
)
 
$
(138
)
Increase in estimated severity on primary defaults
 
22

 
(2
)
 
Change in estimates related to pool reserves, LAE reserves and reinsurance
 
15

 
5

 
Total prior year loss development (1)
 
$
(147
)
 
$
(135
)
(1) 
A negative number for prior year loss development indicates a redundancy of prior year loss reserves.
Rollforward of primary delinquent inventory
A rollforward of our primary delinquent inventory for the three and nine months ended September 30, 2018 and 2017 appears in table 12.3 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 accuracy of the data provided by servicers, the number of business days in a month, transfers of servicing between loan servicers and whether all servicers have provided the reports in a given month.
 
Table
12.3
 
 
 
 
 
 
 
 
Delinquent inventory rollforward
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
Delinquent inventory at beginning of period
 
36,037

 
41,317

 
46,556

 
50,282

 
New notices
 
13,569

 
15,950

 
40,351

 
45,352

 
Cures
 
(14,197
)
 
(13,546
)
 
(47,620
)
 
(45,382
)
 
Paids (including those charged to a deductible or captive)
 
(1,374
)
 
(2,195
)
 
(4,446
)
 
(7,403
)
 
Rescissions and denials
 
(56
)
 
(82
)
 
(200
)
 
(277
)
 
Other items removed from inventory
 
(581
)
 
(209
)
 
(1,243
)
 
(1,337
)
 
Delinquent inventory at end of period
 
33,398

 
41,235

 
33,398

 
41,235
Aging of the primary delinquent inventory
Table 12.4 below shows the number of consecutive months a borrower is delinquent.
 
Table
12.4
 
 
 
 
 
 
 
 
 
 
 
Delinquent inventory - consecutive months in default
 
September 30, 2018
 
December 31, 2017
 
September 30, 2017
3 months or less
9,484

 
28
%
 
17,119

 
37
%
 
11,331

 
27
%
4-11 months
9,564

 
29
%
 
12,050

 
26
%
 
11,092

 
27
%
 
12 months or more (1) (2)
14,350

 
43
%
 
17,387

 
37
%
 
18,812

 
46
%
 
Total primary delinquent inventory
33,398

 
100
%
 
46,556

 
100
%
 
41,235

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Primary claims received inventory included in ending delinquent inventory:
766

 
2
%
 
954

 
2
%
 
1,063

 
3
%
(1) 
Approximately 39%, 45%, and 45% of the primary delinquent inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of September 30, 2018, December 31, 2017, and September 30, 2017, respectively.
(2) 
The majority of items removed from our delinquent inventory due to commutations of NPLs during the nine months ended September 30, 2018 were delinquent for 12 consecutive months or more as of December 31, 2017.

Number of payments delinquent
Table 12.5 below shows the number of payments that a borrower is delinquent.
 
Table
12.5
 
 
 
 
 
 
 
 
 
 
 
Delinquent inventory - number of payments delinquent
 
September 30, 2018
 
December 31, 2017
 
September 30, 2017
3 payments or less
14,813

 
44
%
 
21,678

 
46
%
 
16,916

 
41
%
4-11 payments
9,156

 
28
%
 
12,446

 
27
%
 
10,583

 
26
%
12 payments or more (1) (2)
9,429

 
28
%
 
12,432

 
27
%
 
13,736

 
33
%
 
Total primary delinquent inventory
33,398

 
100
%
 
46,556

 
100
%
 
41,235

 
100
%

(1) 
Approximately 39%, 43%, and 43% of the primary delinquent inventory with 12 payments or more delinquent has at least 36 payments delinquent as of September 30, 2018, December 31, 2017, and September 30, 2017, respectively.
(2) 
The majority of items removed from our delinquent inventory due to commutations of NPLs during the nine months ended September 30, 2018 had 12 or more payments delinquent as of December 31, 2017.