Note 9 - Losses and LAE (Tables)

9 Months Ended

Sep. 30, 2015

Reserve for Losses and LAE by category [Table Text Block]

The following table shows our reserve for losses and LAE by category at the end of each period indicated:



(In thousands)	September 30, 2015		December 31, 2014
Reserve for losses by category:
Prime	$	519,572	$	700,174
Alt-A	234,772		292,293
A minus and below	137,441		179,103
IBNR and other	107,179		223,114
LAE	41,464		56,164
Reinsurance recoverable (1)	11,071		26,665
Total primary reserve	1,051,499		1,477,513
Pool	43,234		75,785
IBNR and other	949		1,775
LAE	1,983		3,542
Total pool reserve	46,166		81,102
Total First-lien reserve	1,097,665		1,558,615
Second-lien and other (2)	905		1,417
Total reserve for losses	$	1,098,570	$	1,560,032

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(1)	Primarily represents ceded losses on captive transactions and the QSR Transactions.


(2)	Does not include our Second-lien PDR that is included in other liabilities.

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

The following table presents information relating to our reserve for losses, including our IBNR reserve and LAE but excluding Second-lien PDR, for the periods indicated:



	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2015		2014			2015			2014
Balance at beginning of period	$	1,204,792	$	1,714,681		$	1,560,032		$	2,164,353
Less reinsurance recoverables (1)	11,677		22,458			26,665			38,363
Balance at beginning of period, net of reinsurance recoverables	1,193,115		1,692,223			1,533,367			2,125,990
Add losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2) (3)	50,436		72,408			184,490			256,729
Prior years (3)	13,037		(23,851		)	(42,158		)	(94,747		)
Total incurred	63,473		48,557			142,332			161,982
Deduct paid claims and LAE related to:
Current year (2)	2,841		4,784			3,417			5,587
Prior years	166,248		169,066			584,783			715,455
Total paid	169,089		173,850			588,200			721,042
Balance at end of period, net of reinsurance recoverables	1,087,499		1,566,930			1,087,499			1,566,930
Add reinsurance recoverables (1)	11,071		21,201			11,071			21,201
Balance at end of period	$	1,098,570	$	1,588,131		$	1,098,570		$	1,588,131

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(1)	Related to ceded losses on captive reinsurance transactions and the QSR Transactions. See Note 7 for additional information.


(2)	Related to underlying defaulted loans with a most recent default notice dated 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.

(3)

Amounts previously reported for losses and LAE incurred in respect of default notices reported and unreported in current year and prior years have been reclassified to correct an error. There was no net change to total incurred losses in any period as a result of these reclassifications. For the three and nine months ended September 30, 2014, the amounts previously reported for losses and LAE incurred in respect of default notices reported and unreported in current year have been revised downward by approximately $34.5 million and $82.8 million, respectively, with an equal and offsetting adjustment to the amount previously reported for default notices reported and unreported in prior years. For the years ended December 31, 2014, 2013 and 2012, the amounts previously reported related to losses and LAE incurred from current year default notices should have been lower by approximately $71.8 million, $65.0 million and $75.7 million, respectively, with equal and offsetting adjustments to the incurred loss amounts related to prior years’ default notices.