Note 8 - Losses and LAE (Tables)

9 Months Ended

Sep. 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)	September 30, 2012		December 31, 2011
Mortgage insurance reserves	$	3,046,706	$	3,247,900
Financial guaranty reserves	72,891		63,002
Total reserve for losses and LAE	$	3,119,597	$	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 September 30,						Nine Months Ended September 30,
(In thousands)	2012			2011			2012			2011
Balance at beginning of period	$	3,155,343		$	3,268,582		$	3,247,900		$	3,524,971
Less reinsurance recoverables (1)	97,845			160,664			151,569			223,254
Balance at beginning of period, net of reinsurance recoverables	3,057,498			3,107,918			3,096,331			3,301,717
Add losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)	248,806			338,360			686,080			775,479
Prior years	(77,001		)	(61,761		)	(71,468		)	185,085
Total incurred	171,805			276,599			614,612			960,564
Deduct paid claims and LAE related to:
Current year (2)	2,912			59,693			3,185			61,894
Prior years	269,486			270,203			750,853			1,145,766
Total paid	272,398			329,896			754,038			1,207,660
Balance at end of period, net of reinsurance recoverables	2,956,905			3,054,621			2,956,905			3,054,621
Add reinsurance recoverables (1)	89,801			160,233			89,801			160,233
Balance at end of period	$	3,046,706		$	3,214,854		$	3,046,706		$	3,214,854

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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 shows the projected net cumulative denial and rescission rates in our total first-lien portfolio, net of both actual and expected reinstatements, as of September 30, 2012, with respect to claims received in each quarter indicated below:

Claim Received Quarter	Projected Net Cumulative Rescission/Denial Rates for Each Quarter (1)	Percentage of Claims Resolved (2)
Q1 2010	18.3%	100%
Q2 2010	17.4%	100%
Q3 2010	15.7%	100%
Q4 2010	17.1%	99%
Q1 2011	20.6%	99%
Q2 2011	24.4%	97%
Q3 2011	29.5%	95%
Q4 2011	28.4%	90%
Q1 2012	25.7%	76%

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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 September 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 second and third 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 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 September 30, 2012. Prior to January 1, 2009, rebutted claims were not material.

(In millions)	As of September 30, 2012
First loss position	$	566.9
Second loss position	201.8
Total non-overturned rebuttals on rescinded first-lien claims	$	768.7

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 September 30,				Nine Months Ended September 30,
(In millions)	2012		2011		2012		2011
Rescissions—first loss position	$	75.8	$	93.2	$	164.1	$	313.6
Denials—first loss position	105.8		35.4		456.6		74.2
Total first loss position (1)	181.6		128.6		620.7		387.8
Rescissions—second loss position	20.0		28.5		29.6		100.7
Denials—second loss position	26.1		8.4		80.5		22.1
Total second loss position (2)	46.1		36.9		110.1		122.8
Total first-lien claims submitted for payment that were rescinded or denied (3)	$	227.7	$	165.5	$	730.8	$	510.6

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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 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.