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Premium Deficiency Reserve (Tables)
 6 Months Ended
Jun. 30, 2013
Premium Deficiency Reserve [Abstract]  
Components of premium deficiency reserve
The components of the premium deficiency reserve at June 30, 2013, December 31, 2012 and June 30, 2012 appear in the table below.

 
 
June 30,
  
December 31,
  
June 30,
 
 
 
2013
  
2012
  
2012
 
 
 
(In millions)
 
Present value of expected future paid losses and expenses, net of expected future premium
 
$
(749
)
 
$
(840
)
 
$
(899
)
 
            
Established loss reserves
  
688
   
766
   
806
 
 
            
Net deficiency
 
$
(61
)
 
$
(74
)
 
$
(93
)
Reconciliation of beginning and ending balances in the premium deficiency reserve
The net change in assumptions for the six months ended June 30, 2013 is primarily related to higher estimated ultimate premiums, offset by higher estimated ultimate losses.

 
 
Three Months Ended
  
Six Months Ended
 
 
 
June 30, 2013
 
 
 
(In millions)
 
 
 
  
  
  
 
Premium Deficiency Reserve at beginning of period
 
  
$
(72
)
 
  
$
(74
)
 
 
      
     
Paid claims and loss adjustment expenses
 
$
63
      
$
121
     
Decrease in loss reserves
  
(48
)
      
(78
)
    
Premium earned
  
(25
)
      
(48
)
    
Effects of present valuing on future premiums, losses and expenses
  
(2
)
      
(1
)
    
 
                
Change in premium deficiency reserve to reflect actual premium, losses and expenses recognized
      
(12
)
      
(6
)
Change in premium deficiency reserve to reflect change in assumptions relating to future premiums, losses, expenses and discount rate (1)
      
23
       
19
 
 
                
Premium Deficiency Reserve at end of period
     
$
(61
)
     
$
(61
)

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

The decrease in the premium deficiency reserve for the three and six months ended June 30, 2012 was $27 million and $42 million, respectively, as shown in the table below.  The net change in assumptions for both the three and six months ended June 30, 2012 was primarily related to higher estimated ultimate losses.
 
 
 
Three Months Ended
  
Six Months Ended
 
 
 
June 30, 2012
 
 
 
(In millions)
 
 
 
  
  
  
 
Premium Deficiency Reserve at beginning of period
 
  
$
(121
)
 
  
$
(135
)
 
 
      
     
Paid claims and loss adjustment expenses
 
$
76
      
$
152
     
Decrease in loss reserves
  
24
       
(20
)
    
Premium earned
  
(25
)
      
(53
)
    
Effects of present valuing on future premiums, losses and expenses
  
2
       
2
     
 
                
Change in premium deficiency reserve to reflect actual premium, losses and expenses recognized
      
77
       
81
 
 
                
Change in premium deficiency reserve to reflect change in assumptions relating to future premiums, losses, expenses and discount rate (1)
      
(49
)
      
(39
)
 
                
Premium Deficiency Reserve at end of period
     
$
(93
)
     
$
(93
)

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