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Premium deficiency reserves (Tables)
 12 Months Ended
Dec. 31, 2011
Premium Deficiency Reserve [Abstract]  
Components of the premium deficiency reserve
The components of the premium deficiency reserve at December 31, 2011, 2010 and 2009 appear in the table below.

   
December 31,
 
   
2011
  
2010
  
2009
 
   
(In millions)
 
Present value of expected future premium
 $494  $506  $427 
              
Present value of expected future paid losses
            
and expenses
  (1,455)  (1,760)  (2,157)
              
Net present value of future cash flows
  (961)  (1,254)  (1,730)
              
Established loss reserves
  826   1,075   1,537 
              
Net deficiency
 $(135) $(179) $(193)
Reconciliation of beginning and ending balances in the premium deficiency reserve
 
Year ended December 31,
 
   
2011
  
2010
  
2009
 
   
(In millions)
 
                    
Premium Deficiency Reserve at beginning of period
    $(179)    $(193)    $(454)
Adjustment to premium deficiency reserve (1)
     -      (37)     - 
Adjusted premium deficiency reserve at beginning of period
     (179)     (230)     (454)
                       
Paid claims and loss adjustment expenses
 $334      $426      $584     
Decrease in loss reserves
  (249)      (425)      (360)    
Premium earned
  (120)      (128)      (156)    
Effects of present valuing on future premiums, losses and expenses
  (8)      (25)      21     
                          
Change in premium deficiency reserve to reflect actual premium, losses and expenses recognized
      (43)      (152)      89 
                          
Change in premium deficiency reserve to reflect change in assumptions relating to future premiums, losses expenses and discount rate (2)
      87       203       172 
                          
Premium Deficiency Reserve at end of period
     $(135)     $(179)     $(193)

               (1) In periods prior to 2010 an estimate of premium to be refunded in conjunction with claim payments was included in Loss Reserves. In 2010, we separately stated this liability in Premium deficency reserve on the consolidated balance sheet. (See Note 3 - "Summary of significant accounting policies - Revenue recognition")

               (2) A positive number for changes in assumptions relating to premiums, losses, expenses and discount rate indicates a redundancy of prior premium deficiency reserves.