Note 10 - Financial Guaranty Insurance Contracts Level 3 (Tables)

12 Months Ended

Dec. 31, 2013

Financial Guaranty Insurance Contracts [Abstract]

Schedule of Insured Financial Obligations with Credit Deterioration [Table Text Block]

The following table includes information as of December 31, 2013 regarding our financial guaranty claim liabilities on non-derivative transactions, segregated by the surveillance categories that we use in monitoring the risks related to these contracts:



	Surveillance Categories
($ in thousands)	Performing		Special Mention		Intensified Surveillance			Case Reserve			Total
Number of policies	7		105		59			85			256
Remaining weighted-average contract period (in years)	22		18		20			18			19
Insured contractual payments outstanding:
Principal	$	1,576	$	714,891	$	570,011		$	116,625		$	1,403,103
Interest	162		405,588		307,286			33,468			746,504
Total	$	1,738	$	1,120,479	$	877,297		$	150,093		$	2,149,607
Gross claim liability	$	1	$	19,077	$	229,385		$	34,096		$	282,559
Less:
Gross potential recoveries	—		6,493		365,843			57,586			429,922
Discount, net	—		439		(177,390		)	(1,210		)	(178,161		)
Net claim liability/(asset) (prior to reduction for unearned premium)	$	1	$	12,145	$	40,932		$	(22,280	)	$	30,798
Unearned premium revenue	$	6	$	13,660	$	9,207		$	—		$	22,873
Net claim liability/(asset) reported in the balance sheet	$	—	$	6,294	$	35,444		$	(22,280	)	$	19,458
Reinsurance recoverables	$	—	$	—	$	—		$	—		$	—

Schedule of Premium Receivable and Unearned with Accretion Detail and Weighted Average Risk-Free Rate [Table Text Block]

The present values of premiums receivable and unearned premiums that are received on an installment basis as of December 31, 2013 and 2012 are as follows:



	December 31,
(In thousands)	2013		2012
Premiums receivable	$	25,150	$	28,929
Unearned premiums	26,964		33,605

The accretion of these balances is included either in premiums written and premiums earned (for premiums receivable) or policy acquisition costs (for commissions) on our consolidated statements of operations. The accretion included in premiums earned and policy acquisition costs for the years ended December 31, 2013 and 2012 was as follows:



	December 31,
(In thousands)	2013		2012
Premiums written	$	874	$	999
Premiums earned	874		999
Policy acquisition costs	189		212

Future Premiums To Be Collected On Financial Guaranty Contracts [Table Text Block]

The following table shows the nominal (non-discounted) premiums, net of commissions, that are expected to be collected on financial guaranty contracts with installment premiums as of December 31, 2013:



(In thousands)	Future Expected Premium Payments
1^st quarter 2014	$	780
2^nd quarter 2014	638
3^rd quarter 2014	1,015
4^th quarter 2014	452
2014	2,885
2015	2,689
2016	2,656
2017	2,235
2018	2,000
2014 - 2018	12,465
2019 - 2023	7,683
2024 - 2028	4,466
2029 - 2033	2,987
After 2033	3,993
Total	$	31,594

Rollforward of Financial Guaranty NPV of Premiums Receivable [Table Text Block]

The following table shows the rollforward of the net present value of premiums receivable as of December 31, 2013 and 2012:



	December 31,
(In thousands)	2013			2012
Balance at January 1	$	28,929		$	34,287
Payments received	(3,603		)	(4,033		)
Accretion	685			787
Adjustments to installment premiums	442			(1,007		)
Foreign exchange revaluation	(84		)	40
Recaptures/commutation	(1,219		)	(1,145		)
Balance at December 31	$	25,150		$	28,929

Adjustments to Premiums Earned Financial Guaranty Contracts [Table Text Block]

Premiums earned were affected by the following for the years ended December 31, 2013 and 2012:



	December 31,
(In thousands)	2013			2012
Refundings	$	30,593		$	33,985
Recaptures/Commutations	(2,447		)	(16,269		)
Adjustments to installment premiums, gross of commissions	1,204			(2,277		)
Unearned premium acceleration upon establishment of case reserves	155			1,109
Foreign exchange revaluation, gross of commissions	(122		)	46
Reinsurance agreements	—			(5,996		)
Total adjustment to premiums earned	$	29,383		$	10,598

Financial Guarantee Insurance Contracts Future Premium Revenue to be Recognized [Table Text Block]

The following table shows the expected contractual premium revenue from our existing financial guaranty portfolio, assuming no refundings of any financial guaranty obligations, as of December 31, 2013.



(In thousands)	Ending Net Unearned Premiums		Unearned Premium Amortization		Accretion		Total Premium Revenue
1^st quarter 2014	$	182,224	$	5,346	$	200	$	5,546
2^nd quarter 2014	176,117		6,107		197		6,304
3^rd quarter 2014	168,077		8,040		191		8,231
4^th quarter 2014	163,441		4,635		188		4,823
2014	163,441		24,128		776		24,904
2015	147,112		16,329		709		17,038
2016	133,624		13,488		666		14,154
2017	121,270		12,354		608		12,962
2018	109,664		11,606		554		12,160
2014 - 2018	109,664		77,905		3,313		81,218
2019 - 2023	61,772		47,892		2,114		50,006
2024 - 2028	30,304		31,468		1,345		32,813
2029 - 2033	12,767		17,537		856		18,393
After 2033	—		12,767		989		13,756
Total	$	—	$	187,569	$	8,617	$	196,186

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

The following table shows the significant components of changes in our financial guaranty claim liability for the years ended December 31, 2013, 2012 and 2011, excluding reserves related to our trade credit reinsurance and surety business of $1.6 million, $2.0 million and $2.5 million, respectively, which are excluded from the accounting standard regarding accounting for financial guaranty insurance contracts by insurance enterprises.



	Year Ended December 31,
(In thousands)	2013			2012			2011
Claim liability at January 1	$	64,291		$	60,550		$	67,447
Incurred losses and LAE:
(Decrease)/increase in gross claim liability	(28,313		)	188,222			68,082
Increase in gross potential recoveries	(79,968		)	(235,787		)	(76,105		)
Decrease in discount	110,007			84,646			7,506
Decrease in unearned premiums	2,213			95			4,668
Incurred losses and LAE	3,939			37,176			4,151
Paid losses and LAE:
Current year	(195		)	(4		)	—
Prior years	(48,577		)	(33,431		)	(11,048		)
Paid losses and LAE	(48,772		)	(33,435		)	(11,048		)
Claim liability at December 31	$	19,458		$	64,291		$	60,550
Components of incurred losses and LAE:
Claim liability established in current period	$	1,804		$	9,063		$	2,254
Changes in existing claim liabilities	2,135			28,113			1,897
Total incurred losses and LAE	$	3,939		$	37,176		$	4,151
Components of decrease in discount:
(Increase)/decrease in discount related to claim liabilities established in current period	$	(3	)	$	81,061		$	177
Decrease in discount related to existing claim liabilities	110,010			3,585			7,329
Total decrease in discount	$	110,007		$	84,646		$	7,506

Schedule or Description of Weighted Average Discount Rate [Table Text Block]

The weighted-average risk-free rates used to discount the gross claim liability and gross potential recoveries on our financial guaranty contracts were as follows, as of the dates indicated:



December 31, 2013	2.95	%
December 31, 2012	2.00	%
December 31, 2011	2.80	%
December 31, 2010	3.69	%

- Definition

Tabular disclosure of insured financial obligations with credit deterioration related to the claim liability on financial guarantee insurance contracts as of the end of each annual and interim reporting period detailing, at a minimum, the following for each surveillance category or grouping used to track and monitor the entity's insured financial obligations: (1) number of issued and outstanding financial guarantee insurance contracts; (2) remaining weighted average contract period; (3) insured contractual payments outstanding, segregating principal and interest; (4) gross claim liability; (5) gross potential recoveries; (6) net discount of both the claim liability and potential recoveries; (7) net claim liability; (8) reinsurance recoverable; and (9) unearned premium revenue.

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