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Loss Reserves (Tables)
 9 Months Ended
Sep. 30, 2014
Loss Reserves [Abstract]  
Reconciliation of beginning and ending loss reserves
The following table provides a reconciliation of beginning and ending loss reserves for the nine months ended September 30, 2014 and 2013:
 
  
Nine Months Ended
September 30,
 
  
2014
  
2013
 
  
(In thousands)
 
     
Reserve at beginning of period
 
$
3,061,401
  
$
4,056,843
 
Less reinsurance recoverable
  
64,085
   
104,848
 
Net reserve at beginning of period
  
2,997,316
   
3,951,995
 
         
Losses incurred:
        
Losses and LAE incurred in respect of default notices related to:
        
Current year
  
454,390
   
686,454
 
Prior years (1)
  
(75,387
)
  
(43,783
)
Subtotal
  
379,003
   
642,671
 
         
Losses paid:
        
Losses and LAE paid in respect of default notices related to:
        
Current year
  
11,574
   
28,792
 
Prior years
  
895,061
   
1,286,833
 
Reinsurance terminations (2)
  
-
   
(3,332
)
Subtotal
  
906,635
   
1,312,293
 
         
Net reserve at end of period
  
2,469,684
   
3,282,373
 
Plus reinsurance recoverables
  
57,898
   
70,621
 
         
Reserve at end of period
 
$
2,527,582
  
$
3,352,994
 

(1)A negative number for prior year losses incurred indicates a redundancy of prior year loss reserves and a positive number for prior year losses incurred indicates a deficiency of prior year loss reserves.
(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.
Prior year development of the reserves
The prior year development of the reserves in the first nine months of 2014 and 2013 is reflected in the table below.

  
Nine Months Ended September 30,
 
  
2014
  
2013
 
  
(In millions)
 
Prior year loss development (1):
    
     
(Decrease) increase in estimated claim rate on primary defaults
 
$
(38
)
 
$
10
 
Decrease in estimated severity on primary defaults
  
(20
)
  
(40
)
Change in estimates related to pool reserves, LAE reserves and reinsurance
  
(17
)
  
(14
)
Total prior year loss development
 
$
(75
)
 
$
(44
)

(1)A negative number for prior year loss development indicates a redundancy of prior year loss reserves, and a positive number indicates a deficiency of prior year loss reserves.
Rollforward of primary default inventory
A rollforward of our primary default inventory for the three and nine months ended September 30, 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. Historically, losses incurred have followed a seasonal trend in which the second half of the year has weaker credit performance than the first half, with higher new notice activity and a lower cure rate.

  
Three Months Ended
September 30,
  
Nine Months Ended
September 30,
 
  
2014
  
2013
  
2014
  
2013
 
         
         
Default inventory at beginning of period
  
85,416
   
117,105
   
103,328
   
139,845
 
New Notices
  
22,927
   
27,755
   
67,451
   
81,044
 
Cures
  
(19,582
)
  
(24,105
)
  
(68,082
)
  
(80,677
)
Paids (including those charged to a deductible or captive)
  
(5,288
)
  
(8,659
)
  
(18,420
)
  
(27,155
)
Rescissions and denials
  
(319
)
  
(509
)
  
(1,123
)
  
(1,470
)
Default inventory at end of period
  
83,154
   
111,587
   
83,154
   
111,587
 
Aging of the primary default inventory
Aging of the Primary Default Inventory

  
September 30,
  
December 31,
  
September 30,
 
  
2014
  
2013
  
2013
 
             
Consecutive months in default
            
3 months or less
  
16,209
   
19
%
  
18,941
   
18
%
  
20,144
   
18
%
4 - 11 months
  
18,890
   
23
%
  
24,514
   
24
%
  
24,138
   
22
%
12 months or more
  
48,055
   
58
%
  
59,873
   
58
%
  
67,305
   
60
%
                         
Total primary default inventory
  
83,154
   
100
%
  
103,328
   
100
%
  
111,587
   
100
%
                         
Primary claims received inventory included in ending default inventory (1)
  
5,194
   
6
%
  
6,948
   
7
%
  
9,858
   
9
%

 (1) Our claims received inventory includes suspended rescissions, as we have voluntarily suspended rescissions of coverage related to certain loans that we believed would be included in a potential resolution. As of September 30, 2014, rescissions of coverage on approximately 1,575 loans had been voluntarily suspended.
Number of payments delinquent
Number of Payments Delinquent

  
September 30,
  
December 31,
  
September 30,
 
  
2014
  
2013
  
2013
 
             
             
3 payments or less
  
23,769
   
28
%
  
28,095
   
27
%
  
28,777
   
26
%
4 - 11 payments
  
18,985
   
23
%
  
24,605
   
24
%
  
25,089
   
22
%
12 payments or more
  
40,400
   
49
%
  
50,628
   
49
%
  
57,721
   
52
%
                         
Total primary default inventory
  
83,154
   
100
%
  
103,328
   
100
%
  
111,587
   
100
%