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Contracts Accounted for as Insurance (Tables)
 12 Months Ended
Dec. 31, 2017
Insurance [Abstract]  
Net Earned Premiums
Net Earned Premiums
 
 
Year Ended December 31,
 
2017
 
2016
 
2015
 
(in millions)
Scheduled net earned premiums
$
385

 
$
381

 
$
416

Accelerations
 
 
 
 
 
Refundings
269

 
390

 
294

Terminations
17

 
79

 
37

Total Accelerations
286

 
469

 
331

Accretion of discount on net premiums receivable
17

 
14

 
17

  Financial guaranty insurance net earned premiums
688

 
864

 
764

Other
2

 
0

 
2

  Net earned premiums (1)
$
690

 
$
864

 
$
766

 ___________________
(1)
Excludes $15 million, $16 million and $21 million for the year ended December 31, 2017, 2016 and 2015, respectively, related to consolidated FG VIEs.
Gross Premium Receivable, Net of Commissions on Assumed Business Roll Forward
Expected Collections of
Financial Guaranty Insurance Gross Premiums Receivable,
Net of Commissions on Assumed Business
(Undiscounted)

 
As of December 31, 2017
 
(in millions)
2018 (January 1 – March 31)
$
38

2018 (April 1 – June 30)
31

2018 (July 1 – September 30)
22

2018 (October 1 – December 31)
18

2019
82

2020
78

2021
77

2022
70

2023-2027
289

2028-2032
193

2033-2037
106

After 2037
105

Total(1)
$
1,109

____________________
(1)
Excludes expected cash collections on FG VIEs of $12 million.
Gross Premium Receivable,
Net of Commissions on Assumed Business
Roll Forward

 
Year Ended December 31,
 
2017
 
2016
 
2015
 
(in millions)
December 31,
$
576

 
$
693

 
$
729

FG insurance
 
 
 
 
 
Premiums receivable from acquisitions (see Note 2)
270

 
18

 
2

Gross written premiums on new business, net of commissions
301

 
193

 
198

Gross premiums received, net of commissions
(301
)
 
(258
)
 
(206
)
Adjustments:
 
 
 
 
 
Changes in the expected term
(8
)
 
(38
)
 
(19
)
Accretion of discount, net of commissions on assumed business
12

 
9

 
18

Foreign exchange translation
64

 
(41
)
 
(25
)
Consolidation/deconsolidation of FG VIEs
0

 
0

 
(4
)
Subtotal (1)
914

 
576

 
693

Other
1

 
0

 
—

December 31,
$
915

 
$
576

 
$
693

____________________
(1)
Excludes $10 million, $11 million and $17 million as of December 31, 2017 , 2016 and 2015, respectively, related to consolidated FG VIEs.
Schedule of Net Earned Premiums
Scheduled Financial Guaranty Insurance Net Earned Premiums
 
 
As of December 31, 2017
 
(in millions)
2018 (January 1 – March 31)
$
89

2018 (April 1 – June 30)
88

2018 (July 1 – September 30)
84

2018 (October 1 – December 31)
82

Subtotal 2018
343

2019
295

2020
266

2021
244

2022
223

2023-2027
866

2028-2032
565

2033-2037
324

After 2037
281

Net deferred premium revenue(1)
3,407

Future accretion
188

Total future net earned premiums
$
3,595

 ____________________
(1)
Excludes scheduled net earned premiums on consolidated FG VIEs of $76 million, non-financial guaranty business net earned premium of $9 million and contra-paid related to FG VIEs of $17 million.
Selected Information for Policies Paid in Installments
Selected Information for Financial Guaranty Insurance
Policies Paid in Installments

 
As of
December 31, 2017
 
As of
December 31, 2016
 
(dollars in millions)
Premiums receivable, net of commission payable
$
914

 
$
576

Gross deferred premium revenue
1,205

 
1,041

Weighted-average risk-free rate used to discount premiums
2.3
%
 
3.0
%
Weighted-average period of premiums receivable (in years)
9.2

 
9.1
Rollforward of Deferred Acquisition Costs
Rollforward of
Deferred Acquisition Costs

 
Year Ended December 31,
 
2017
 
2016
 
2015
 
(in millions)
December 31,
$
106

 
$
114

 
$
121

DAC adjustments from acquisitions (see Note 2)
(2
)
 
0

 
1

Costs deferred during the period:
 
 
 
 
 
Commissions on assumed and ceded business
0

 
(2
)
 
(1
)
Premium taxes
5

 
4

 
2

Compensation and other acquisition costs
11

 
9

 
11

Total
16

 
11

 
12

Costs amortized during the period
(19
)
 
(19
)
 
(20
)
December 31,
$
101

 
$
106

 
$
114
Loss and LAE Reserve and Salvage and Subrogation Recoverable Net of Reinsurance Insurance Contracts

Net Reserve (Salvage)

 
As of
December 31, 2017
 
As of
December 31, 2016
 
(in millions)
Public finance:
 
 
 
U.S. public finance
$
901

 
$
625

Non-U.S. public finance
21

 
21

Public finance
922

 
646

Structured finance:
 
 
 
U.S. RMBS
(59
)
 
21

Other structured finance
40

 
96

Structured finance
(19
)
 
117

Subtotal
903

 
763

Other recoverable (payable)
(4
)
 
1

Subtotal
899

 
764

Elimination of losses attributable to FG VIEs
(55
)
 
(64
)
Total
$
844

 
$
700
Components of Net Reserves (Salvage) Insurance Contracts
Components of Net Reserves (Salvage)

 
As of
December 31, 2017
 
As of
December 31, 2016
 
(in millions)
Loss and LAE reserve
$
1,444

 
$
1,127

Reinsurance recoverable on unpaid losses
(44
)
 
(80
)
Loss and LAE reserve, net
1,400

 
1,047

Salvage and subrogation recoverable
(572
)
 
(365
)
Salvage and subrogation payable(1)
20

 
17

Other payable (recoverable)
(4
)
 
1

Salvage and subrogation recoverable, net, and other recoverable
(556
)
 
(347
)
Net reserves (salvage)
$
844

 
$
700

____________________
(1)          Recorded as a component of reinsurance balances payable.
Reconciliation of Net Expected Loss to be Paid and Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts
Reconciliation of Net Expected Loss to be Paid and
Net Expected Loss to be Expensed
Financial Guaranty Insurance Contracts
 
 
As of
December 31, 2017
 
(in millions)
Net expected loss to be paid - financial guaranty insurance (1)
$
1,226

Contra-paid, net
59

Salvage and subrogation recoverable, net of reinsurance
552

Loss and LAE reserve - financial guaranty insurance contracts, net of reinsurance
(1,399
)
Other recoverable (payable)
4

Net expected loss to be expensed (present value) (2)
$
442

____________________
(1)
See "Net Expected Loss to be Paid (Recovered) by Accounting Model" table in Note 5, Expected Loss to be Paid.

(2)
Excludes $52 million as of December 31, 2017 related to consolidated FG VIEs.
Net Expected Loss to be Expensed Insurance Contracts
Net Expected Loss to be Expensed
Financial Guaranty Insurance Contracts
 
 
As of
December 31, 2017
 
(in millions)
2018 (January 1 – March 31)
$
8

2018 (April 1 – June 30)
9

2018 (July 1 – September 30)
10

2018 (October 1 – December 31)
10

Subtotal 2018
37

2019
42

2020
39

2021
35

2022
32

2023-2027
131

2028-2032
78

2033-2037
36

After 2037
12

Net expected loss to be expensed
442

Future accretion
88

Total expected future loss and LAE
$
530

 
Loss and LAE Reported on the Consolidated Statements of Operations
Loss and LAE
Reported on the
Consolidated Statements of Operations
 
 
Year Ended December 31,
 
2017
 
2016
 
2015
 
(in millions)
Public finance:
 
 
 
 
 
U.S. public finance
$
553

 
$
307

 
$
392

Non-U.S. public finance
(4
)
 
(3
)
 
1

Public finance
549

 
304

 
393

Structured finance:
 
 
 
 
 
U.S. RMBS
(106
)
 
37

 
54

Other structured finance
(48
)
 
(39
)
 
5

Structured finance
(154
)
 
(2
)
 
59

Loss and LAE on insurance contracts before FG VIE consolidation
395

 
302

 
452

Gain (loss) related to FG VIE consolidation
(7
)
 
(7
)
 
(28
)
Loss and LAE
$
388

 
$
295

 
$
424
BIG Net Par Outstanding and Number of Risks
BIG Net Par Outstanding
and Number of Risks
As of December 31, 2017

 
 
Net Par Outstanding
 
Number of Risks(2)
Description
 
Financial
Guaranty
Insurance(1)
 
Credit
Derivative
 
Total
 
Financial
Guaranty
Insurance(1)
 
Credit
Derivative
 
Total
 
 
(dollars in millions)
BIG:
 
 

 
 

 
 

 
 

 
 

 
 

Category 1
 
$
4,301

 
$
227

 
$
4,528

 
139

 
7

 
146

Category 2
 
1,344

 
17

 
1,361

 
46

 
3

 
49

Category 3
 
6,255

 
94

 
6,349

 
150

 
9

 
159

Total BIG
 
$
11,900

 
$
338

 
$
12,238

 
335

 
19

 
354


BIG Net Par Outstanding
and Number of Risks
As of December 31, 2016
 
 
 
Net Par Outstanding
 
Number of Risks(2)
Description
 
Financial
Guaranty
Insurance(1)
 
Credit
Derivative
 
Total
 
Financial
Guaranty
Insurance(1)
 
Credit
Derivative
 
Total
 
 
(dollars in millions)
BIG:
 
 

 
 

 
 

 
 

 
 

 
 

Category 1
 
$
3,861

 
$
634

 
$
4,495

 
165

 
10

 
175

Category 2
 
3,857

 
202

 
4,059

 
79

 
6

 
85

Category 3
 
4,383

 
137

 
4,520

 
148

 
9

 
157

Total BIG
 
$
12,101

 
$
973

 
$
13,074

 
392

 
25

 
417

_____________________
(1)    Includes net par outstanding for VIEs.
(2)
A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments.
Financial Guaranty Insurance
BIG Transaction Loss Summary
As of December 31, 2017
 
 
BIG Categories
 
BIG 1
 
BIG 2
 
BIG 3
 
Total
BIG, Net
 
Effect of
Consolidating
FG VIEs
 
Total
 
Gross
 
Ceded
 
Gross
 
Ceded
 
Gross
 
Ceded
 
 
 
 
(dollars in millions)
Number of risks(1)
139

 
(22
)
 
46

 
(3
)
 
150

 
(41
)
 
335

 
—

 
335

Remaining weighted-average contract period (in years)
8.9

 
7.3

 
14.0

 
2.9

 
9.6

 
9.3

 
9.9

 
—

 
9.9

Outstanding exposure:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Principal
$
4,397

 
$
(96
)
 
$
1,352

 
$
(8
)
 
$
6,445

 
$
(190
)
 
$
11,900

 
$
—

 
$
11,900

Interest
2,110

 
(42
)
 
1,002

 
(1
)
 
3,098

 
(86
)
 
6,081

 
—

 
6,081

Total(2)
$
6,507

 
$
(138
)
 
$
2,354

 
$
(9
)
 
$
9,543

 
$
(276
)
 
$
17,981

 
$
—

 
$
17,981

Expected cash outflows (inflows)
$
186

 
$
(5
)
 
$
492

 
$
(1
)
 
$
3,785

 
$
(104
)
 
$
4,353

 
$
(307
)
 
$
4,046

Potential recoveries(3)
(595
)
 
20

 
(145
)
 
0

 
(2,273
)
 
67

 
$
(2,926
)
 
194

 
(2,732
)
Subtotal
(409
)
 
15

 
347

 
(1
)
 
1,512

 
(37
)
 
1,427

 
(113
)
 
1,314

Discount
66

 
(4
)
 
(93
)
 
0

 
(78
)
 
(2
)
 
(111
)
 
23

 
(88
)
Present value of expected cash flows
$
(343
)
 
$
11

 
$
254

 
$
(1
)
 
$
1,434

 
$
(39
)
 
$
1,316

 
$
(90
)
 
$
1,226

Deferred premium revenue
$
112

 
$
(5
)
 
$
129

 
$
0

 
$
540

 
$
(6
)
 
$
770

 
$
(74
)
 
$
696

Reserves (salvage)
$
(380
)
 
$
11

 
$
202

 
$
(1
)
 
$
1,100

 
$
(34
)
 
$
898

 
$
(55
)
 
$
843

 

Financial Guaranty Insurance
BIG Transaction Loss Summary
As of December 31, 2016
 
 
BIG Categories
 
BIG 1
 
BIG 2
 
BIG 3
 
Total
BIG, Net
 
Effect of
Consolidating
FG VIEs
 
Total
 
Gross
 
Ceded
 
Gross
 
Ceded
 
Gross
 
Ceded
 
 
(dollars in millions)
Number of risks(1)
165

 
(35
)
 
79

 
(11
)
 
148

 
(49
)
 
392

 
—

 
392

Remaining weighted-average contract period (in years)
8.6

 
7.0

 
13.2

 
10.5

 
8.1

 
6.0

 
10.1

 
—

 
10.1

Outstanding exposure:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Principal
$
4,187

 
$
(326
)
 
$
4,273

 
$
(416
)
 
$
4,703

 
$
(320
)
 
$
12,101

 
$
—

 
$
12,101

Interest
1,932

 
(140
)
 
2,926

 
(219
)
 
1,867

 
(87
)
 
6,279

 
—

 
6,279

Total(2)
$
6,119

 
$
(466
)
 
$
7,199

 
$
(635
)
 
$
6,570

 
$
(407
)
 
$
18,380

 
$
—

 
$
18,380

Expected cash outflows (inflows)
172

 
(19
)
 
1,404

 
(86
)
 
1,435

 
(65
)
 
2,841

 
(326
)
 
2,515

Potential recoveries(3)
(440
)
 
23

 
(146
)
 
4

 
(743
)
 
45

 
(1,257
)
 
198

 
(1,059
)
Subtotal
(268
)
 
4

 
1,258

 
(82
)
 
692

 
(20
)
 
1,584

 
(128
)
 
1,456

Discount
61

 
(4
)
 
(355
)
 
19

 
(114
)
 
(4
)
 
(397
)
 
24

 
(373
)
Present value of expected cash flows
(207
)
 
0


903

 
(63
)
 
578

 
(24
)
 
1,187

 
(104
)
 
1,083

Deferred premium revenue
$
131

 
$
(5
)
 
$
246

 
$
(6
)
 
$
476

 
$
(30
)
 
$
812

 
$
(86
)
 
$
726

Reserves (salvage)
$
(255
)
 
$
5

 
$
738

 
$
(58
)
 
$
343

 
$
(10
)
 
$
763

 
$
(64
)
 
$
699

____________________
(1)
A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments. The ceded number of risks represents the number of risks for which the Company ceded a portion of its exposure.

(2)
Includes BIG amounts related to FG VIEs.

(3)
Includes excess spread and R&W receivables and payables.