Note 8 - Losses and LAE Level 3 (Tables)

6 Months Ended

Jun. 30, 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)	June 30, 2012		December 31, 2011
Mortgage insurance reserves	$	3,155,343	$	3,247,900
Financial guaranty reserves	94,937		63,002
Total reserve for losses and LAE	$	3,250,280	$	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 June 30,					Six Months Ended June 30,
(In thousands)	2012			2011		2012		2011
Balance at beginning of period	$	3,230,938		$	3,542,797	$	3,247,900	$	3,524,971
Less reinsurance recoverables (1)	118,071			192,258		151,569		223,254
Balance at beginning of period, net of reinsurance recoverables	3,112,867			3,350,539		3,096,331		3,301,717
Add losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)	218,929			246,433		437,274		437,119
Prior years	(10,851		)	23,559		5,533		246,846
Total incurred	208,078			269,992		442,807		683,965
Deduct paid claims and LAE related to:
Current year (2)	273			1,364		273		2,201
Prior years	263,174			511,249		481,367		875,563
Total paid	263,447			512,613		481,640		877,764
Balance at end of period, net of reinsurance recoverables	3,057,498			3,107,918		3,057,498		3,107,918
Add reinsurance recoverables (1)	97,845			160,664		97,845		160,664
Balance at end of period	$	3,155,343		$	3,268,582	$	3,155,343	$	3,268,582

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(1) Related to ceded losses on captive reinsurance transactions, Smart Home and quota share reinsurance 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The following table illustrates the total amount of first-lien claims submitted to us for payment that have been rescinded since January 1, 2009, and then subsequently were challenged (“rebutted”) by the lenders and policyholders, but have not been reinstated, for the period from January 1, 2009 through June 30, 2012. Prior to January 1, 2009, rebutted claims were not material.

(In millions)	As of June 30, 2012
First loss position	$	531.9
Second loss position	192.7
Total non-overturned rebuttals on rescinded first-lien claims	$	724.6

The following table shows the projected net cumulative denial and rescission rates, net of both actual and expected reinstatements, as of June 30, 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)
Q4 2009	20.1%	100%
Q1 2010	18.1%	100%
Q2 2010	17.2%	99%
Q3 2010	15.5%	99%
Q4 2010	16.9%	99%
Q1 2011	20.4%	98%
Q2 2011	22.6%	94%
Q3 2011	25.5%	88%
Q4 2011	22.3%	79%

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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 June 30, 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. As discussed in footnote (2) below, 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 first and second quarters 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.

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

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2012		2011		2012		2011
Rescissions—first loss position	$	51.8	$	126.6	$	91.9	$	220.4
Denials—first loss position	174.3		14.2		350.7		38.8
Total first loss position (1)	226.1		140.8		442.6		259.2
Rescissions—second loss position	12.9		41.2		25.5		72.2
Denials—second loss position	18.4		11.0		54.4		13.7
Total second loss position (2)	31.3		52.2		79.9		85.9
Total first-lien claims submitted for payment that were rescinded or denied (3)	$	257.4	$	193.0	$	522.5	$	345.1

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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 claims may not have resulted in a claim payment obligation absent the rescission or denial, 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.