In our mortgage insurance and title insurance businesses, we use reinsurance as part of our risk distribution strategy, including to manage our capital position and risk profile. See Note 8 of Notes to Consolidated Financial Statements in our 2018 Form 10-K for more information about our use of reinsurance in our title insurance business.



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2019			2018			2019				2018
Net premiums written—insurance:
Direct	$	287,000		$	279,137		$	828,022			$	820,449
Assumed (1)	2,608			1,987			7,528				4,803
Ceded (2)	(15,455		)	(24,348		)	(39,900		)		(76,162		)
Net premiums written—insurance	$	274,153		$	256,776		$	795,650			$	749,090

Net premiums earned—insurance:
Direct	$	305,493		$	272,505		$	919,507		(3)	$	796,448
Assumed (1)	2,614			1,994			7,545				4,822
Ceded (2)	(26,922		)	(16,068		)	(83,189		)	(3)	(48,945		)
Net premiums earned—insurance	$	281,185		$	258,431		$	843,863		(3)	$	752,325

Ceding commissions earned	$	12,153		$	8,373		$	37,191		(3)	$	25,728
Ceded losses	771			1,191			4,326				3,356

In 2012, Radian Guaranty entered into the QSR Program with a third-party reinsurance provider. Radian Guaranty has ceded the maximum amount permitted under the QSR Program and is no longer ceding additional NIW under this program. RIF ceded under the QSR Program was $0.7 billion and $1.0 billion as of September 30, 2019 and 2018, respectively.

In the first quarter of 2016, Radian Guaranty entered into the 2016 Single Premium QSR Agreement with a panel of third-party reinsurers. As of January 1, 2018, Radian Guaranty is no longer ceding additional NIW under this arrangement. RIF ceded under the 2016 Single Premium QSR Agreement was $5.7 billion and $6.4 billion as of September 30, 2019 and 2018, respectively.

In October 2017, Radian Guaranty entered into the 2018 Single Premium QSR Agreement with a panel of third-party reinsurers. Under the 2018 Single Premium QSR Agreement, we expect to cede up to 65% of our Single Premium NIW beginning with the business written in January 2018, subject to certain conditions that may affect the amount ceded, including a limitation on ceded premiums written equal to $335 million for policies issued between January 1, 2018 and December 31, 2019. Notwithstanding this limitation, the parties may mutually agree to amend the agreement, including with respect to any limitations on the amounts of insurance that may be ceded. RIF ceded under the 2018 Single Premium QSR Agreement was $2.9 billion and $1.6 billion as of September 30, 2019 and 2018, respectively.

Since the fourth quarter of 2018, Radian Guaranty has entered into two fully collateralized reinsurance arrangements with the Eagle Re Issuers. Total ceded premiums earned under our Excess-of-Loss Program were $7.5 million and $18.4 million for the three and nine months ended September 30, 2019, respectively.

The Eagle Re 2018-1 reinsurance agreement, entered into in November 2018, provides for up to $434.0 million of aggregate excess-of-loss reinsurance coverage for a specified percentage of mortgage insurance losses on new defaults on an existing portfolio of eligible Recurring Premium Policies issued between January 1, 2017 and December 31, 2017, with an initial RIF of $9.1 billion. In addition, Radian Guaranty entered into a separate excess-of-loss reinsurance agreement for up to $21.4 million of coverage, representing a pro rata share of the credit risk alongside the risk assumed by Eagle Re 2018-1 on

those Recurring Premium Policies. Eagle Re 2018-1 financed its coverage by issuing mortgage insurance-linked notes in an aggregate amount of $434.0 million to eligible third-party capital markets investors in an unregistered private offering. Radian Guaranty and its affiliates have retained the first-loss layer of $204.9 million of aggregate losses, as well as any losses in excess of the outstanding reinsurance coverage amount.

The Eagle Re 2019-1 reinsurance agreement, entered into in April 2019, provides for up to $562.0 million of aggregate excess-of-loss reinsurance coverage for a specified percentage of mortgage insurance losses on new defaults on an existing portfolio of eligible Recurring Premium Policies issued between January 1, 2018 and December 31, 2018, with an initial RIF of $10.7 billion. Eagle Re 2019-1 financed its coverage by issuing mortgage insurance-linked notes in an aggregate amount of $562.0 million to eligible third-party capital markets investors in an unregistered private offering. Radian Guaranty and its affiliates have retained the first-loss layer of $267.6 million of aggregate losses, as well as any losses in excess of the outstanding reinsurance coverage amount.

The aggregate excess-of-loss reinsurance coverage for these transactions decreases over a ten-year period as the principal balances of the underlying covered mortgages decrease and as any claims are paid by the applicable Eagle Re Issuer or the mortgage insurance is canceled. The outstanding reinsurance coverage amount will begin amortizing after an initial period in which a target level of credit enhancement is obtained and will stop amortizing if certain thresholds are reached, such as if the reinsured mortgages were to experience an elevated level of delinquencies or certain credit enhancement tests were not maintained. Radian Guaranty has rights to terminate the reinsurance agreements upon the occurrence of certain events.

The Eagle Re Issuers are not subsidiaries or affiliates of Radian Guaranty. Based on the accounting guidance that addresses VIEs, we have not consolidated any of the Eagle Re Issuers in our consolidated financial statements, because Radian does not have: (i) the power to direct the activities that most significantly affect the Eagle Re Issuers’ economic performances or (ii) the obligation to absorb losses or the right to receive benefits from the Eagle Re Issuers that potentially could be significant to the Eagle Re Issuers. See Note 2 of Notes to Consolidated Financial Statements in our 2018 Form 10-K for more information on our accounting treatment of VIEs.

The Eagle Re Issuers represent our only VIEs as of September 30, 2019. The following table presents the total assets of the Eagle Re Issuers as well as Radian Guaranty’s maximum exposure to loss associated with each Eagle Re Issuer, as of the dates indicated.



	At September 30, 2019
			Maximum Exposure to Loss
(In thousands)	Total VIE Assets (1)		On - Balance Sheet			Off - Balance Sheet (2)		Total
Eagle Re 2018-1	$	408,586	$	1,493	(3)	$	408,586	$	410,079
Eagle Re 2019-1	562,036		2,202		(3)	562,036		564,238
Total	$	970,622	$	3,695		$	970,622	$	974,317

	At December 31, 2018
			Maximum Exposure to Loss
(In thousands)	Total VIE Assets (1)		On - Balance Sheet			Off - Balance Sheet (2)		Total
Eagle Re 2018-1	$	434,034	$	1,114	(3)	$	434,034	$	435,148
Total	$	434,034	$	1,114		$	434,034	$	435,148

Although we use reinsurance as one of our risk management tools, reinsurance does not relieve us of our obligations to our policyholders. In the event the reinsurers are unable to meet their obligations to us, our insurance subsidiaries would be liable for any defaulted amounts. However, consistent with the PMIERs reinsurer counterparty collateral requirements, Radian Guaranty’s reinsurers have established a trust to help secure our potential cash recoveries. In addition, for the Single Premium QSR Program, Radian Guaranty holds amounts received from ceded premiums written to collateralize the reinsurers’ obligations, which are reported in reinsurance funds withheld on our condensed consolidated balance sheets. Any loss recoveries and profit commissions paid to Radian Guaranty related to the Single Premium QSR Program are expected to be realized from this account.