Reinsurance (Tables)

12 Months Ended

Dec. 31, 2020

Effects of Reinsurance on Statement of Operations

Effect of Reinsurance on Statement of Operations


	Year Ended December 31,
	2020		2019		2018
	(in millions)
Premiums Written:
Direct	$	453	$	663	$	288
Assumed	1		14		324
Ceded (1)	13		10		14
Net	$	467	$	687	$	626
Premiums Earned:
Direct	$	448	$	429	$	509
Assumed	41		54		51
Ceded	(4)		(7)		(12)
Net	$	485	$	476	$	548
Loss and LAE:
Direct	$	182	$	101	$	68
Assumed	24		2		(1)
Ceded	(3)		(10)		(3)
Net	$	203	$	93	$	64

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(1) Positive ceded premiums written were due to commutations and changes in expected debt service schedules.

Ceded Reinsurance

Ceded Reinsurance (1)


	As of December 31,
	2020		2019
	(in millions)
Ceded premium payable, net of commissions	$	4	$	20
Ceded expected loss to be recovered (paid)	(23)		11
Financial guaranty ceded par outstanding (2)	418		1,349
Specialty ceded exposure (see Note 4)	556		303

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(1) The total collateral posted by all non-affiliated reinsurers required to post, or that had agreed to post, collateral as of December 31, 2020 and December 31, 2019 was approximately $18 million and $68 million, respectively. Such collateral is posted (i) in the case of certain reinsurers not authorized or "accredited" in the U.S., in order for the Company to receive credit for the liabilities ceded to such reinsurers in statutory financial statements, and (ii) in the case of certain reinsurers authorized in the U.S., on terms negotiated with the Company.

(2) Of the total par ceded to BIG rated reinsurers, $74 million and $224 million is rated BIG as of December 31, 2020 and December 31, 2019, respectively.

Net Effect of Commutations and Cancellations of Assumed Reinsurance Contracts

Commutations of Ceded Reinsurance Contracts


	Year Ended December 31,
	2020		2019		2018
	(in millions)
Increase in net unearned premium reserve	$	5	$	15	$	64
Increase in net par outstanding	336		1,069		1,457
Commutation gains (losses)	38		1		(16)