Note 7 - Losses and LAE Level 3 (Tables)

3 Months Ended

Mar. 31, 2012

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)	March 31, 2012		December 31, 2011
Mortgage insurance reserves	$	3,230,938	$	3,247,900
Financial guaranty reserves	85,426		63,002
Total reserve for losses and LAE	$	3,316,364	$	3,310,902

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 March 31,
(In thousands)	2012		2011
Balance at beginning of period	$	3,247,900	$	3,524,971
Less reinsurance recoverables (1)	151,569		223,254
Balance at beginning of period, net of reinsurance recoverables	3,096,331		3,301,717
Add losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)	218,345		190,686
Prior years	16,384		223,287
Total incurred	234,729		413,973
Deduct paid claims and LAE related to:
Current year (2)	—		837
Prior years	218,193		364,314
Total paid	218,193		365,151
Balance at end of period, net of reinsurance recoverables	3,112,867		3,350,539
Add reinsurance recoverables (1)	118,071		192,258
Balance at end of period	$	3,230,938	$	3,542,797

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The following table illustrates the amount of first-lien claims submitted to us for payment that were rescinded or denied, for the periods indicated, net of reinstatements within each period:

	Three Months Ended March 31,
(In millions)	2012			2011
Rescissions—first loss position	$	36.6		$	93.8
Denials—first loss position	176.4			24.6
Total first loss position (1)	213.0			118.4
Rescissions—second loss position	(3.3		)	31.0
Denials—second loss position	36.0			2.7
Total second loss position (2)	32.7			33.7
Total first-lien claims submitted for payment that were rescinded or denied (3)	$	245.7		$	152.1

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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 an amount related to 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 March 31, 2012.

(In millions)	As of March 31, 2012
First loss position	$	484.6
Second loss position	212.1
Total non-overturned rebuttals on rescinded first-lien claims	$	696.7

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 $56.5 million and $57.2 million as of March 31, 2012 and December 31, 2011, respectively.

Rescission and denial rates in 2011 and 2012 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 projected net cumulative denial and rescission rates, net of both actual and expected reinstatements, as of March 31, 2012, on our total first-lien portfolio for each quarter in which the claims were received for the periods indicated:

Claim Received Quarter	Projected Net Cumulative Rescission/Denial Rates for Each Quarter (1)	Percentage of Claims Resolved (2)
Q3 2009	22.4%	100%
Q4 2009	20.1%	100%
Q1 2010	18.1%	100%
Q2 2010	17.1%	99%
Q3 2010	15.3%	99%
Q4 2010	16.8%	99%
Q1 2011	19.3%	96%
Q2 2011	20.5%	90%
Q3 2011	18.0%	72%

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(1) Projected net cumulative rescission/denial rates represent the ratio of claims rescinded or denied to claims received (by claim count). Rescissions and denials are net of actual reinstatements, plus our current estimate for expected reinstatements of previously rescinded or denied claims. These amounts represent the cumulative rates for each quarter as of March 31, 2012. 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 differences between estimated and actual 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 or overturned, respectively. For the fourth quarter of 2011 and the first quarter of 2012, a significant portion of claims received for those quarters have not been internally resolved; therefore, we do not believe the cumulative rescission/denial rates for those periods are presently meaningful and therefore they are not presented.