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Loss Reserves (Tables)
 12 Months Ended
Dec. 31, 2014
Loss Reserves [Abstract]  
Reconciliation of beginning and ending loss reserves
The following table provides a reconciliation of beginning and ending loss reserves for each of the past three years:

  
2014
  
2013
  
2012
 
  
(In thousands)
 
       
Reserve at beginning of year
 
$
3,061,401
  
$
4,056,843
  
$
4,557,512
 
Less reinsurance recoverable
  
64,085
   
104,848
   
154,607
 
Net reserve at beginning of year
  
2,997,316
   
3,951,995
   
4,402,905
 
             
Losses incurred:
            
Losses and LAE incurred in respect of default notices received in:
            
Current year
  
596,436
   
898,413
   
1,494,133
 
Prior years (1)
  
(100,359
)
  
(59,687
)
  
573,120
 
Subtotal
  
496,077
   
838,726
   
2,067,253
 
             
Losses paid:
            
Losses and LAE paid in respect of default notices received in:
            
Current year
  
32,919
   
73,470
   
134,509
 
Prior years
  
1,121,508
   
1,722,923
   
2,389,985
 
Reinsurance terminations (2)
  
-
   
(2,988
)
  
(6,331
)
Subtotal
  
1,154,427
   
1,793,405
   
2,518,163
 
Net reserve at end of year
  
2,338,966
   
2,997,316
   
3,951,995
 
Plus reinsurance recoverables
  
57,841
   
64,085
   
104,848
 
             
Reserve at end of year
 
$
2,396,807
  
$
3,061,401
  
$
4,056,843
 

(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. See table below regarding prior year loss development.

(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. (See Note 11 – “Reinsurance”)
Prior year development of the reserves
The prior year development of the reserves in 2014, 2013 and 2012 is reflected in the table below.

  
2014
  
2013
  
2012
 
  
(In millions)
 
Prior year loss development:
      
       
Pool policy settlement (1)
 
$
-
  
$
-
  
$
267
 
             
(Decrease) increase in estimated claim rate on primary defaults
  
(43
)
  
10
   
260
 
Decrease in estimated severity on primary defaults
  
(35
)
  
(50
)
  
(70
)
Change in estimates related to pool reserves, LAE reserves, reinsurance and other (2)
  
(22
)
  
(20
)
  
116
 
Total prior year loss development
 
$
(100
)
 
$
(60
)
 
$
573
 

(1)
See below for a discussion of our settlement with Freddie Mac.
(2)
Includes approximately $100 million related to probable settlements regarding our claims paying practices in 2012
Rollforward of primary default inventory
A rollforward of our primary default inventory for the years ended December 31, 2014, 2013 and 2012 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 by transfers of servicing between loan servicers.

  
2014
  
2013
  
2012
 
       
       
Default inventory at beginning of year
  
103,328
   
139,845
   
175,639
 
New Notices
  
88,844
   
106,823
   
133,232
 
Cures
  
(87,278
)
  
(104,390
)
  
(120,248
)
Paids (including those charged to a deductible or captive)
  
(23,494
)
  
(34,738
)
  
(45,741
)
Rescissions and denials
  
(1,306
)
  
(1,939
)
  
(3,037
)
Items removed from inventory resulting from the Countrywide settlement on GSE loans
  
(193
)
  
(2,273
)
  
-
 
Default inventory at end of year
  
79,901
   
103,328
   
139,845
 
Aging of the primary default inventory
Aging of the Primary Default Inventory

  
December 31,
 
  
2014
  
2013
  
2012
 
             
Consecutive months in default
  
15,319
   
19
%
  
18,941
   
18
%
  
23,282
   
17
%
    3 months or less
4 - 11 months
  
19,710
   
25
%
  
24,514
   
24
%
  
34,688
   
25
%
12 months or more
  
44,872
   
56
%
  
59,873
   
58
%
  
81,875
   
58
%
                         
Total primary default inventory
  
79,901
   
100
%
  
103,328
   
100
%
  
139,845
   
100
%
                         
Primary claims received inventory included in ending default inventory (1)
  
4,746
   
6
%
  
6,948
   
7
%
  
11,731
   
8
%

(1)
Our claims received inventory includes suspended rescissions, as  we have voluntarily suspended rescissions of coverage related to loans that we believed would be included in a potential resolution. As of December 31, 2014, rescissions of coverage on approximately 1,425 loans had been voluntarily suspended.
Number of payments delinquent
Number of Primary Payments Delinquent

  
December 31,
 
  
2014
  
2013
  
2012
 
             
3 payments or less
  
23,253
   
29
%
  
28,095
   
27
%
  
34,245
   
24
%
4 - 11 payments
  
19,427
   
24
%
  
24,605
   
24
%
  
34,458
   
25
%
12 payments or more
  
37,221
   
47
%
  
50,628
   
49
%
  
71,142
   
51
%
                         
                         
Total primary default inventory
  
79,901
   
100
%
  
103,328
   
100
%
  
139,845
   
100
%