Note 7 - Losses and LAE Level 3 (Tables)

9 Months Ended

Sep. 30, 2011

Losses and LAE Mortgage Insurance [Abstract]

Loss Reserves By Segment [Table Text Block]

Our reserve for losses and LAE, as of the dates indicated, consisted of:

(In thousands)	September 30, 2011		December 31, 2010
Mortgage insurance reserves	$	3,214,854	$	3,524,971
Financial guaranty reserves	45,702		71,764
Total reserve for losses and LAE	$	3,260,556	$	3,596,735

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block]

The following table presents information relating to our mortgage insurance reserves for losses and LAE as of the dates indicated:

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2011			2010		2011		2010
Balance at beginning of period	$	3,268,582		$	3,656,746	$	3,524,971	$	3,450,538
Less reinsurance recoverables (1)	160,664			565,737		223,254		621,644
Balance at beginning of period, net of reinsurance recoverables	3,107,918			3,091,009		3,301,717		2,828,894
Add losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)	338,360			260,755		775,479		751,313
Prior years	(61,761		)	87,045		185,085		553,200
Total incurred	276,599			347,800		960,564		1,304,513
Deduct paid claims and LAE related to:
Current year (2)	59,693			15,811		61,894		20,326
Prior years	270,203			478,379		1,145,766		1,168,462
Total paid	329,896			494,190		1,207,660		1,188,788
Balance at end of period, net of reinsurance recoverables	3,054,621			2,944,619		3,054,621		2,944,619
Add reinsurance recoverables (1)	160,233			559,562		160,233		559,562
Balance at end of period	$	3,214,854		$	3,504,181	$	3,214,854	$	3,504,181

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(1) Related to ceded losses on captive reinsurance transactions and Smart Home. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Off-Balance Sheet Arrangements" for additional information regarding our Smart Home transactions.

(2) Related to underlying defaulted loans with a most recent date of default notice in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default.

Rescissions And Denials [Table Text Block]

The following table illustrates the amount of first-lien mortgage ("first-lien") claims submitted to us for payment that were rescinded or denied, for the periods indicated, net of reinstatements within each period:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2011		2010		2011		2010
Rescissions—first loss position	$	93.2	$	62.2	$	313.6	$	266.8
Denials—first loss position	35.4		91.7		74.2		123.8
Total first loss position (1)	128.6		153.9		387.8		390.6
Rescissions—second loss position	28.5		18.6		100.7		176.6
Denials—second loss position	8.4		28.4		22.1		52.2
Total second loss position (2)	36.9		47.0		122.8		228.8
Total first-lien claims submitted for payment that were rescinded or denied (3)	$	165.5	$	200.9	$	510.6	$	619.4

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(1) Related to claims from policies in which we were in a first loss position and would have paid the claim absent the rescission or denial.

(2) Related to claims from policies in which we were in a second loss position. These rescissions or denials may not have resulted in a claim payment obligation due to deductibles and other exposure limitations included in our policies.

(3) Includes a small number of submitted claims that were subsequently withdrawn by the insured.

The following table illustrates the total amount of first-lien claims submitted to us for payment that have been rescinded since January 1, 2009, and then subsequently were challenged ("rebutted") by the lenders and policyholders, but not reinstated, for the period from January 1, 2009, through September 30, 2011.

(In millions)	As of September 30, 2011
First loss position	$	448.2
Second loss position	189.4
Total non-overturned rebuttals on rescinded first-lien claims	$	637.6

While the total potential claim amount of non-overturned rebuttals outstanding represents all challenged rescissions for which coverage has not been reinstated, our ongoing, active discussions with our lender customers typically involve only a small number of these non-overturned rebuttals. Accordingly, we expect that some portion of these rescinded claims may be reinstated in future periods. Absent litigation or other legal proceedings in which we are not successful, we do not expect that these discussions are likely to result in settlements that would materially impact our liquidity or results of operations.

We also accrue for the premiums that we expect to refund to our lender customers in connection with our estimated insurance rescission activity. Our accrued liability for such refunds, which is included within accounts payable and accrued expenses on our condensed consolidated balance sheets, was $52.1 million and $43.5 million as of September 30, 2011, and December 31, 2010, respectively.

The following table shows the cumulative denial and rescission rates, net of reinstatements, as of September 30, 2011, on our total first-lien portfolio for each quarter in which the claims were received for the periods indicated:

Claim Received Quarter	Cumulative Rescission/Denial Rate for Each Quarter (1)		Percentage of Claims Resolved (2)
Q1 2009	24.2	%	100	%
Q2 2009	25.9	%	100	%
Q3 2009	23.1	%	99	%
Q4 2009	21.2	%	99	%
Q1 2010	19.3	%	99	%
Q2 2010	18.8	%	98	%
Q3 2010	17.0	%	97	%
Q4 2010	18.0	%	92	%
Q1 2011	19.8	%	84	%

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(1) Rescission/Denial rates represent the ratio of claims rescinded or denied to claims received (by claim count) and represent (as of September 30, 2011) the cumulative rate for each quarter based on number of claims received during that quarter. Until all of the claims received during the periods shown have been internally resolved, the rescission rates for each quarter will be subject to change. These rates also will remain subject to change based on reinstatements of previously rescinded policies or denied claims.

(2) The percentage of claims resolved for each quarter presented in the table above, represents the number of claims that have been internally resolved as a percentage of the total number of claims received for that specific quarter. A claim is considered internally resolved when it is either paid or it is concluded that the claim should be denied or rescinded, though such denials or rescissions could be challenged and, potentially reinstated. For the second and third quarters of 2011, a significant portion of claims received for those quarters have not been internally resolved; therefore, we do not believe the cumulative rescission rates for those periods are presently meaningful.