Note 11 - Losses and Loss Adjustment Expenses Level 3 (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Liability for Future Policy Benefits, by Product Segment [Table Text Block]

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



	Year Ended December 31,
(In thousands)	2016		2015
Reserves for losses by category:
Prime	$	379,845	$	480,481
Alt-A	148,006		203,706
A minus and below	101,653		129,352
IBNR and other (1)	71,107		83,066
LAE	18,630		26,108
Reinsurance recoverable (2)	6,816		8,286
Total primary reserves	726,057		930,999
Pool	31,853		42,084
IBNR and other	673		1,118
LAE	932		1,335
Reinsurance recoverable (2)	35		—
Total pool reserves	33,493		44,537
Total first-lien reserves	759,550		975,536
Second-lien and other (3)	719		863
Total reserve for losses	$	760,269	$	976,399

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(1)	Primarily related to expected payments under the Freddie Mac Agreement.


(2)	Represents ceded losses on captive transactions, the QSR Transactions and the Single Premium QSR Transaction.


(3)	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 our Second-lien PDR:



	Year Ended December 31,
(In thousands)	2016			2015			2014
Balance at January 1,	$	976,399		$	1,560,032		$	2,164,353
Less: reinsurance recoverables (1)	8,286			26,665			38,363
Balance at January 1, net of reinsurance recoverables	968,113			1,533,367			2,125,990
Add losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)	206,383			229,061			351,184
Prior years	(3,516		)	(29,647		)	(105,545		)
Total incurred	202,867			199,414			245,639
Deduct paid claims and LAE related to:
Current year (2)	11,410			10,837			13,562
Prior years	406,152			753,831			824,700
Total paid	417,562			764,668			838,262
Balance at end of period, net of reinsurance recoverables	753,418			968,113			1,533,367
Add: reinsurance recoverables (1)	6,851			8,286			26,665
Balance at December 31,	$	760,269		$	976,399		$	1,560,032

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(1)	Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. See Note 8 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.

Short-duration Insurance Contracts, Claims Development [Table Text Block]

The information about net incurred losses and paid claims development for the years ended prior to 2016 is presented as supplementary information.



	Incurred Losses, Net of Reinsurance
	Year Ended December 31,																				As of December 31, 2016
($ in thousands)																					Total of IBNR Liabilities Plus Expected Development on Reported Claims (1)		Cumulative Number of Reported Defaults (2)
	Unaudited
Default Year	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007	$	1,119,529	$	1,211,075	$	1,051,097	$	1,126,173	$	1,131,490	$	1,135,617	$	1,179,600	$	1,174,723	$	1,175,919	$	1,178,745	$	46,136	152,336
2008			1,957,510		1,715,144		1,969,581		2,009,551		2,018,794		2,074,295		2,088,719		2,110,922		2,115,083		13,021		215,837
2009					1,671,239		1,894,783		1,930,263		1,939,479		1,974,568		1,991,796		2,016,412		2,018,907		1,896		213,836
2010							1,102,856		1,215,136		1,192,482		1,195,056		1,207,774		1,220,289		1,218,264		858		146,324
2011									1,058,625		1,152,016		1,052,277		1,050,555		1,062,579		1,061,161		881		118,972
2012											803,831		763,969		711,213		720,502		715,646		858		89,845
2013													505,732		405,334		401,444		404,333		936		71,749
2014															337,784		247,074		265,891		1,304		58,215
2015																	222,555		198,186		2,277		49,825
2016																			201,016		3,540		46,264
																	Total		$	9,377,232

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(1)	Represents reserves as of December 31, 2016 related to IBNR liabilities and expected development on claims paid related to the Freddie Mac Agreement. As described above, we paid an initial claim amount related to that agreement in 2013.

(2)

Represents total number of new default notices received in each calendar year as compiled monthly based on reports received from loan servicers. As reflected in our Default to Claim Rate assumptions, a significant portion of reported defaults generally do not result in a claim. In certain instances, a defaulted loan may cure, and then subsequently re-default in a later period. Consistent with our reserving practice, each new event of default is treated as a unique occurrence and therefore certain loans that cure and re-default may be included as a reported default in multiple periods.



	Cumulative Paid Claims, Net of Reinsurance
	Year Ended December 31,
(In thousands)
	Unaudited
Default Year	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007	$	100,435	$	649,961	$	860,777	$	995,161	$	1,055,536	$	1,076,665	$	1,098,686	$	1,111,468	$	1,130,932	$	1,140,053
2008			189,458		740,578		1,297,867		1,635,069		1,744,559		1,872,804		1,932,283		2,022,019		2,051,495
2009					136,413		619,496		1,236,210		1,471,264		1,711,019		1,807,031		1,921,134		1,958,660
2010							11,810		394,278		700,316		956,598		1,055,935		1,145,497		1,178,546
2011									40,392		323,216		756,820		892,959		982,830		1,016,855
2012											19,200		295,332		528,744		631,982		672,271
2013													34,504		191,040		307,361		357,087
2014															13,108		115,852		200,422
2015																	10,479		84,271
2016																			11,061
																	Total		$	8,670,721
									All outstanding liabilities before 2007, net of reinsurance										27,327
					Liabilities for claims, net of reinsurance (1)														$	733,838

______________________


(1)	Calculated as follows:



(In thousands)
Incurred losses, net of reinsurance	$	9,377,232
Add: All outstanding liabilities before 2007, net of reinsurance	27,327
Less: Cumulative paid claims, net of reinsurance	8,670,721
Liabilities for claims, net of reinsurance	$	733,838

Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Table Text Block]

The following table provides a reconciliation of the net incurred losses and paid claims development tables above to the reserve for losses and LAE in the consolidated balance sheet at December 31, 2016:



(In thousands)	December 31, 2016
Net outstanding liabilities - Mortgage Insurance:
Reserve for losses and LAE, net of reinsurance	$	733,838
Reinsurance recoverables on unpaid claims	6,851
Unallocated LAE	19,580
Total gross reserve for losses and LAE	$	760,269

Short-duration Insurance Contracts, Schedule of Historical Claims Duration [Table Text Block]

The following is supplementary information about average historical claims duration as of December 31, 2016, representing the average distribution of when claims are paid relative to the year of default:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance (Unaudited)
Years	1	2	3	4	5	6	7	8	9	10
Mortgage Insurance	5.6%	34.2%	29.2%	14.2%	7.4%	4.6%	3.3%	2.4%	1.5%	0.8%