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Premium Deficiency Reserve (Tables)
 6 Months Ended
Jun. 30, 2014
Premium Deficiency Reserve [Abstract]  
Components of premium deficiency reserve
The components of the premium deficiency reserve at June 30, 2014, December 31, 2013 and June 30, 2013 appear in the table below.

 
 
June 30,
2014
  
December 31,
2013
  
June 30,
2013
 
 
 
(In millions)
 
Present value of expected future paid losses and expenses, net of expected future premium
 
$
(591
)
 
$
(669
)
 
$
(749
)
 
            
Established loss reserves
  
556
   
621
   
688
 
 
            
Net deficiency
 
$
(35
)
 
$
(48
)
 
$
(61
)
Reconciliation of beginning and ending balances in the premium deficiency reserve
The decrease in the premium deficiency reserve for the three and six months ended June 30, 2014 was $8 million and $13 million, respectively, as shown in the table below, which represents the net result of actual premiums, losses and expenses as well as a net change in assumptions for these periods. The net change in assumptions for both the three and six months ended June 30, 2014 is primarily related to higher estimated ultimate premiums and lower estimated ultimate losses.
 
 
 
Three Months Ended
  
Six Months Ended
 
 
 
June 30, 2014
 
 
 
(In millions)
 
 
 
  
  
  
 
Premium Deficiency Reserve at beginning of period
 
  
$
(43
)
 
  
$
(48
)
 
 
      
     
Paid claims and loss adjustment expenses
 
$
44
      
$
92
     
Decrease in loss reserves
  
(23
)
      
(65
)
    
Premium earned
  
(21
)
      
(42
)
    
Effects of present valuing on future premiums, losses and expenses
  
(2
)
      
(5
)
    
                
Change in premium deficiency reserve to reflect actual premium, losses and expenses recognized
      
(2
)
      
(20
)
 
                
Change in premium deficiency reserve to reflect change in assumptions relating to future premiums, losses, expenses and discount rate (1)
      
10
       
33
 
 
                
Premium Deficiency Reserve at end of period
     
$
(35
)
     
$
(35
)
 
(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, 2013 was $11 million and $13 million, respectively, as shown in the table below. The net change in assumptions for the three months ended June 30, 2013 is primarily related to higher estimated ultimate premiums and lower estimated ultimate losses.  The net change in the 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
)