Note 7 - Reinsurance

6 Months Ended

Jun. 30, 2015

Reinsurance Disclosures [Abstract]

Reinsurance

Reinsurance

The effect of reinsurance on net premiums written and earned is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Net premiums written-insurance:
Direct	$	258,198		$	238,590		$	513,446		$	467,859
Assumed	8			10			55			20
Ceded	(7,124		)	(16,653		)	(20,511		)	(32,979		)
Net premiums written-insurance	$	251,082		$	221,947		$	492,990		$	434,900
Net premiums earned-insurance:
Direct	$	249,797		$	221,171		$	491,961		$	437,047
Assumed	10			12			23			24
Ceded	(12,370		)	(17,537		)	(29,952		)	(34,663		)
Net premiums earned-insurance	$	237,437		$	203,646		$	462,032		$	402,408

In 2012, Radian Guaranty entered into two separate QSR agreements with a third-party reinsurance provider. As of June 30, 2015, RIF ceded under the Initial QSR Transaction and the Second QSR Transaction was approximately $1.0 billion and $1.4 billion, respectively.

The Second QSR Transaction provides that, effective December 31, 2015, Radian Guaranty will have the ability, at its option, to recapture half of the reinsurance ceded with respect to conventional GSE loans, which would result in Radian Guaranty reassuming the related RIF potentially in exchange for a payment of a profit commission amount from the reinsurer. Our results for the three and six months ended June 30, 2015 include an accrual of $5.8 million for this potential profit commission, based on experience to date for the Second QSR Transaction and our current expectation to exercise our option to recapture ceded RIF.

The following tables show the amounts related to the QSR Transactions for the periods indicated:

	Initial QSR Transaction
	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2015		2014		2015		2014
Ceded premiums written	$	3,822	$	5,046	$	7,889	$	10,350
Ceded premiums earned	6,424		6,803		12,442		13,610
Ceding commissions written	828		1,262		1,708		2,588

	Second QSR Transaction
	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2015		2014		2015		2014
Ceded premiums written	$	395	$	8,072	$	6,924	$	15,365
Ceded premiums earned	3,039		7,197		11,807		13,782
Ceding commissions written	2,154		2,825		4,439		5,378

Radian Guaranty has ceded the maximum amount permitted under the QSR Transactions (up to $1.6 billion of ceded RIF for each); therefore, Radian Guaranty is no longer ceding NIW under these transactions. Effective January 1, 2015, the ceding commission was reduced from 25% to 20% for two-thirds of the reinsurance ceded under the Initial QSR Transaction. Ceded losses to date under the QSR Transactions have been immaterial.