Note 10 - Losses and LAE Level 3 (Tables)

12 Months Ended

Dec. 31, 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:



	December 31,
(In thousands)	2011		2010
Mortgage insurance reserves	$	3,247,900	$	3,524,971
Financial guaranty reserves (1)	63,002		71,764
Total reserve for losses and LAE	$	3,310,902	$	3,596,735

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(1)	Includes reserve for losses and LAE for our trade credit reinsurance and surety business of $2.5 million and $4.3 million at December 31, 2011 and 2010, respectively.

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:



	Year Ended December 31,
(In thousands)	2011		2010		2009
Mortgage Insurance
Balance at January 1	$	3,524,971	$	3,450,538	$	2,989,994
Less reinsurance recoverables (1)	223,254		621,644		491,836
Balance at January 1, net of reinsurance recoverables	3,301,717		2,828,894		2,498,158
Add losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)	1,127,079		1,173,035		1,712,477
Prior years	166,778		557,766		(411,650		)
Total incurred	1,293,857		1,730,801		1,300,827
Deduct paid claims and LAE related to:
Current year (2)	39,642		54,410		138,717
Prior years	1,459,601		1,203,568		831,374
Total paid	1,499,243		1,257,978		970,091
Balance at end of period, net of reinsurance recoverables	3,096,331		3,301,717		2,828,894
Add reinsurance recoverables (1)	151,569		223,254		621,644
Balance at December 31	$	3,247,900	$	3,524,971	$	3,450,538

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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 claims submitted to us for payment that were rescinded or denied, for the periods indicated, net of reinstatements within each period:



	Year Ended December 31,
(In millions)	2011		2010		2009
Rescissions—first loss position	$	360.0	$	339.2	$	330.7
Denials—first loss position	133.9		200.2		67.4
Total first loss position (1)	493.9		539.4		398.1
Rescissions—second loss position	114.2		199.1		372.9
Denials—second loss position	37.0		61.5		54.6
Total second loss position (2)	151.2		260.6		427.5
Total first-lien claims submitted for payment that were rescinded or denied (3)	$	645.1	$	800.0	$	825.6

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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.

Our reported rescission and denial activity in any given period is subject to future challenges by our lender customers. Recent trends in insurance rescissions and claim denial activity reflect lenders challenging a greater number of rescissions and denials, and the overall challenges have been more effective (i.e., producing new or additional information that supports a reinstatement of coverage or a claim payment). Reinstatements of policies and resubmissions of claims that had been rescinded or denied as of the prior year-end, totaled $114.5 million in 2011, compared to $43.7 million in 2010. As a result of these trends, we expect that a larger portion of previously rescinded policies will be reinstated and previously denied claims will be resubmitted with the required documentation and ultimately paid, and have considered this expectation in developing our IBNR reserve estimate. This estimate, which currently primarily consists of our estimate of the future reinstatements of previously rescinded policies and denied claims, was $170.6 million and $39.5 million at December 31, 2011 and December 31, 2010, respectively.

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 December 31, 2011.



(In millions)	As of December 31, 2011
First loss position	$	460.7
Second loss position	191.8
Total non-overturned rebuttals on rescinded first-lien claims	$	652.5

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 consolidated balance sheets, was $57.2 million and $43.5 million as of December 31, 2011 and 2010, respectively.

Rescission and denial rates in 2011 have been affected by an increase in the number of claims received that we are reviewing for potential violations of our insurance policies. The following table shows the cumulative denial and rescission rates, net of reinstatements, as of December 31, 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	23.8	%	100	%
Q2 2009	25.6	%	100	%
Q3 2009	22.7	%	100	%
Q4 2009	20.8	%	100	%
Q1 2010	18.9	%	99	%
Q2 2010	18.3	%	99	%
Q3 2010	16.6	%	98	%
Q4 2010	18.2	%	97	%
Q1 2011	21.4	%	92	%
Q2 2011	22.6	%	79	%

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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 December 31, 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/denial 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 third and fourth 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

Schedule of Liability for Future Policy Benefits, by Product Segment [Table Text Block]

The following table shows our mortgage insurance reserve for losses and LAE by category at the end of each period indicated:



	Year Ended December 31,
(In thousands)	2011		2010
Reserves for losses by category:
Prime	$	1,748,412	$	1,607,741
Alt-A	612,423		687,960
A minus and below	370,806		413,137
Reinsurance recoverable (1)	151,569		223,254
Total primary reserves	2,883,210		2,932,092
Pool insurance	353,583		566,565
Total first-lien reserves	3,236,793		3,498,657
Second-lien (2)	11,070		26,161
Other	37		153
Total reserve for losses	$	3,247,900	$	3,524,971

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(1)	Represents ceded losses on captive transactions and Smart Home.


(2)	Does not include second-lien premium deficiency reserve.

- Definition

The entire disclosure for the present values of future benefits to be paid to or on behalf of policyholders and related expenses less the present value of future net premiums using assumptions such as estimates of expected investment yields, mortality, morbidity, terminations and expenses, applicable at the time the insurance contracts are made and unpaid claim costs relating to insurance contracts including estimates of costs relating to incurred but not reported claims based on the estimated ultimate cost of settling the claims (including effects of inflation and other societal and economic factors), using past experience adjusted for current trends and any other factors that would modify past experience by element such as business segment, country and interest rate range.

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- Definition

Tabular disclosure of the activity in the reserve for settling insured claims and expenses incurred in the claims settlement process for the period. The estimated liability includes the amount of money that will be required for future payments of (a) claims that have been reported to the insurer, (b) claims related to insured events that have occurred but that have not been reported to the insurer as of the date the liability is estimated, and (c) claim adjustment expenses. Claim adjustment expenses include costs incurred in the claim settlement process such as legal fees; outside adjuster fees; and costs to record, process, and adjust claims.

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