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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Quantitative Information Regarding The Significant Unobservable Inputs For Certain Assets And Liabilities Measured At Fair Value On A Recurring Basis

		Fair Value
		as of				Range
		June 30,				(Weighted
In millions		2013		Valuation Techniques	Unobservable Input	Average)
Assets of consolidated VIEs:
	Loans receivable at fair value	$	1,790	Quoted market prices adjusted for financial	Impact of financial guarantee	0% - 18% (4%)
				guarantees provided to VIE obligations
	Loan repurchase commitments		1,115	Discounted cash flow	Recovery rates	10% - 66% (34%)
					Breach rates	67% - 92% (77%)

Liabilities of consolidated VIEs:
	Variable interest entity notes		824	Quoted market prices of VIE assets	Impact of financial guarantee	0% - 29% (10%)
				adjusted for financial guarantees provided

Credit derivative liabilities, net:
	CMBS		1,024	BET Model	Recovery rates	25% - 90% (60%)
					Nonperformance risk	9% - 53% (23%)
					Weighted average life (in years)	1.6 - 28.5 (3.8)
					CMBS spreads	1.2% - 25.3% (12%)
	Multi-sector CDO		15	Direct Price Model	Nonperformance risk	53% - 53% (53%)
	Other		609	BET Model	Recovery rates	42% - 70% (47%)
					Nonperformance risk	13% - 23% (21%)
					Weighted average life (in years)	0.2 - 3.8 (2.3)

		Fair Value
		as of				Range
		December 31,				(Weighted
In millions		2012		Valuation Techniques	Unobservable Input	Average)
Assets of consolidated VIEs:
	Loans receivable at fair value	$	1,881	Quoted market prices adjusted for financial	Impact of financial guarantee	0% - 14% (3%)
				guarantees provided to VIE obligations
	Loan repurchase commitments		1,086	Discounted cash flow	Recovery rates	10% - 75% (47%)
					Breach rates	66% - 94% (78%)

Liabilities of consolidated VIEs:
	Variable interest entity notes		1,932	Quoted market prices of VIE assets	Impact of financial guarantee	0% - 23% (6%)
				adjusted for financial guarantees provided

Credit derivative liabilities, net:
	CMBS		1,590	BET Model	Recovery rates	21% - 90% (51%)
					Nonperformance risk	19% - 59% (58%)
					Weighted average life (in years)	0.1 - 5.6 (4.4)
					CMBS spreads	1% - 23% (13%)
	Multi-sector CDO		525	Direct Price Model	Nonperformance risk	59% - 59% (59%)
	Other		806	BET Model	Recovery rates	42% - 75% (47%)
					Nonperformance risk	42% - 59% (58%)
					Weighted average life (in years)	0.1 - 19.6 (3.0)

Company's Assets And Liabilities Measured At Fair Value On Recurring Basis

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		June 30,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2013
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency			$	1,021	$	220	$	0		$	0	$	1,241
	State and municipal bonds				0		1,394		63	⁽¹⁾		0		1,457
	Foreign governments				94		90		3	⁽¹⁾		0		187
	Corporate obligations				0		1,119		63	⁽¹⁾		0		1,182
	Mortgage-backed securities:
		Residential mortgage-backed agency			0		907		3	⁽¹⁾		0		910
		Residential mortgage-backed non-agency			0		80		1	⁽¹⁾		0		81
		Commercial mortgage-backed			0		26		13	⁽¹⁾		0		39
	Asset-backed securities:
		Collateralized debt obligations			0		68		85	⁽¹⁾		0		153
		Other asset-backed			0		85		64	⁽¹⁾		0		149
			Total fixed-maturity investments		1,115		3,989		295			0		5,399
Money market securities					1,067		1		0			0		1,068
Perpetual debt and equity securities					26		14		10	⁽¹⁾		0		50
Cash and cash equivalents					928		0		0			0		928
Derivative assets:
	Non-insured derivative assets:
		Interest rate derivatives			0		62		0			(59)		3
			Total derivative assets		0		62		0			(59)		3

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		June 30,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2013
Assets of consolidated VIEs:
	Corporate obligations				0		48		48	⁽¹⁾		0		96
	Mortgage-backed securities:
		Residential mortgage-backed non-agency			0		265		2	⁽¹⁾		0		267
		Commercial mortgage-backed			0		109		4	⁽¹⁾		0		113
	Asset-backed securities:
		Collateralized debt obligations			0		20		35	⁽¹⁾		0		55
		Other asset-backed			0		69		63	⁽¹⁾		0		132
	Money market securities				321		0		0			0		321
	Cash				78		0		0			0		78
	Loans receivable				0		0		1,790			0		1,790
	Loan repurchase commitments				0		0		1,115			0		1,115
	Interest rate derivatives				0		1		0			0		1
Total assets				$	3,535	$	4,578	$	3,362		$	(59)	$	11,416
Liabilities:
Medium-term notes				$	0	$	0	$	188	⁽¹⁾	$	0	$	188
Derivative liabilities:
	Insured derivatives:
		Credit derivatives			0		7		1,648			0		1,655
	Non-insured derivatives:
		Interest rate derivatives			0		209		0			(209)		0
		Currency derivatives			0		1		0			(1)		0
Other liabilities:
	Warrants				0		85		0			0		85
Liabilities of consolidated VIEs:
	Variable interest entity notes				0		1,766		824			0		2,590
	Derivative liabilities:
		Interest rate derivatives			0		2		0			0		2
		Currency derivatives			0		0		16	⁽¹⁾		0		16
Total liabilities				$	0	$	2,070	$	2,676		$	(210)	$	4,536
____________
(1) - Unobservable inputs are either not developed by the Company or do not significantly impact the overall fair values of the aggregate financial assets and liabilities.

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		December 31,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2012
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency			$	784	$	100	$	0		$	0	$	884
	State and municipal bonds				0		1,429		103	⁽¹⁾		0		1,532
	Foreign governments				86		107		3	⁽¹⁾		0		196
	Corporate obligations				0		1,140		76	⁽¹⁾		0		1,216
	Mortgage-backed securities:
		Residential mortgage-backed agency			0		988		0			0		988
		Residential mortgage-backed non-agency			0		94		4	⁽¹⁾		0		98
		Commercial mortgage-backed			0		20		28	⁽¹⁾		0		48
	Asset-backed securities:
		Collateralized debt obligations			0		65		31	⁽¹⁾		0		96
		Other asset-backed			0		119		26	⁽¹⁾		0		145
			Total fixed-maturity investments		870		4,062		271			0		5,203
Money market securities					585		8		0			0		593
Perpetual debt and equity securities					23		20		14	⁽¹⁾		0		57
Cash and cash equivalents					814		0		0			0		814
Derivative assets:
	Non-insured derivative assets:
		Interest rate derivatives			0		89		5	⁽¹⁾		(90)		4
			Total derivative assets		0		89		5			(90)		4

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets		Other		Significant			Counterparty
				for Identical		Observable		Unobservable			and Cash		Balance as of
				Assets		Inputs		Inputs			Collateral		December 31,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2012
Assets of consolidated VIEs:
	State and municipal bonds				0		41		0			0		41
	Corporate obligations				0		215		78	⁽¹⁾		0		293
	Mortgage-backed securities:
		Residential mortgage-backed non-agency			0		869		6	⁽¹⁾		0		875
		Commercial mortgage-backed			0		410		7	⁽¹⁾		0		417
	Asset-backed securities:
		Collateralized debt obligations			0		215		125	⁽¹⁾		0		340
		Other asset-backed			0		120		64	⁽¹⁾		0		184
	Money market securities				210		0		0			0		210
	Cash				176		0		0			0		176
	Loans receivable				0		0		1,881			0		1,881
	Loan repurchase commitments				0		0		1,086			0		1,086
Total assets				$	2,678	$	6,049	$	3,537		$	(90)	$	12,174
Liabilities:
Medium-term notes				$	0	$	0	$	165	⁽¹⁾	$	0	$	165
Derivative liabilities:
	Insured derivatives:
		Credit derivatives			0		13		2,921			0		2,934
	Non-insured derivatives:
		Interest rate derivatives			0		287		4	⁽¹⁾		(293)		(2)
		Currency derivatives			0		1		1	⁽¹⁾		0		2
Other liabilities:
	Warrants				0		6		0			0		6
Liabilities of consolidated VIEs:
	Variable interest entity notes				0		1,727		1,932			0		3,659
	Derivative liabilities:
		Interest rate derivatives			0		141		0			0		141
		Currency derivatives			0		0		21	⁽¹⁾		0		21
Total liabilities				$	0	$	2,175	$	5,044		$	(293)	$	6,926
____________
(1) - Unobservable inputs are either not developed by the Company or do not significantly impact the overall fair values of the aggregate financial assets and liabilities.

Fair Value Hierarchy Table Presents The Company's Assets And Liabilities Not Recorded At Fair Value On The Company's Consolidated Balance Sheet

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in		Significant		Significant		Fair Value		Carry Value
		Active Markets for		Other Observable		Unobservable		Balance as of		Balance as of
		Identical Assets		Inputs		Inputs		June 30,		June 30,
In millions		(Level 1)		(Level 2)		(Level 3)		2013		2013
Assets:
	Other investments	$	0	$	0	$	9	$	9	$	9
	Accrued investment income⁽¹⁾		42		0		0		42		42
	Receivable for investments sold⁽¹⁾		12		0		0		12		12
	Net cash collateral pledged⁽¹⁾		55		0		0		55		55
Assets of consolidated VIEs:
	Investments held-to-maturity		0		0		2,690		2,690		2,818
Total assets		$	109	$	0	$	2,699	$	2,808	$	2,936
Liabilities:
	Investment agreements	$	0	$	0	$	931	$	931	$	775
	Medium-term notes		0		0		1,018		1,018		1,373
	Long-term debt		0		1,371		0		1,371		1,524
	Payable for investments purchased⁽²⁾		43		0		0		43		43
	Accrued interest expense⁽²⁾		9		100		0		109		125
Liabilities of consolidated VIEs:
	Variable interest entity notes		0		0		2,965		2,965		3,117
Total liabilities		$	52	$	1,471	$	4,914	$	6,437	$	6,957
Financial Guarantees:
	Gross	$	0	$	0	$	3,677	$	3,677	$	2,507
	Ceded		0		0		85		85		85
__________
(1) - Reported within "Other assets" on MBIA's consolidated balance sheets.
(2) - Reported within "Other liabilities" on MBIA's consolidated balance sheets.

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in		Significant		Significant		Fair Value		Carry Value
		Active Markets for		Other Observable		Unobservable		Balance as of		Balance as of
		Identical Assets		Inputs		Inputs		December 31,		December 31,
In millions		(Level 1)		(Level 2)		(Level 3)		2012		2012
Assets:
	Other investments	$	0	$	0	$	9	$	9	$	9
	Accrued investment income⁽¹⁾		43		0		0		43		43
	Receivable for investments sold⁽¹⁾		17		0		0		17		17
	Net cash collateral pledged⁽¹⁾		66		0		0		66		66
Assets of consolidated VIEs:
	Investments held-to-maturity		0		0		2,674		2,674		2,829
Total assets		$	126	$	0	$	2,683	$	2,809	$	2,964
Liabilities:
	Investment agreements	$	0	$	0	$	1,175	$	1,175	$	944
	Medium-term notes		0		0		860		860		1,433
	Long-term debt		0		692		0		692		1,662
	Payable for investments purchased⁽²⁾		50		0		0		50		50
	Accrued interest expense⁽²⁾		9		10		0		19		70
Liabilities of consolidated VIEs:
	Variable interest entity notes		0		0		3,147		3,147		3,465
Total liabilities		$	59	$	702	$	5,182	$	5,943	$	7,624
Financial Guarantees:
	Gross	$	0	$	0	$	650	$	650	$	143
	Ceded		0		0		97		97		91
__________
(1) - Reported within "Other assets" on MBIA's consolidated balance sheets.
(2) - Reported within "Other liabilities" on MBIA's consolidated balance sheets.

Changes In Level 3 Assets Measured At Fair Value On A Recurring Basis

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended June 30, 2013
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings
					Gains /		Unrealized		Foreign																for Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		June 30,
In millions	of Period		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2013
Assets:
Foreign governments	$	8	$	0	$	0	$	0	$	0	$	0	$	0	$	(8)	$	0	$	3	$	0	$	3	$	0
Corporate obligations		57		0		1		3		0		2		0		0		0		0		0		63		1
Residential mortgage-
backed agency		0		0		0		0		0		0		0		0		0		3		0		3		0
Residential mortgage-
backed non-agency		1		0		0		0		0		0		0		0		0		0		0		1		0
Commercial
mortgage-backed		13		0		0		0		0		0		0		0		0		0		0		13		0
Collateralized debt
obligations		37		(1)		0		2		0		61		0		(8)		(5)		9		(10)		85		1
Other asset-backed		67		0		0		(1)		0		3		0		(3)		0		2		(4)		64		0
State and municipal
bonds		23		0		0		0		0		0		0		(2)		0		42		0		63		0
Perpetual debt and equity securities		10		0		0		0		0		0		0		0		0		0		0		10		0
Assets of
consolidated VIEs:
Corporate obligations		79		(4)		(6)		6		0		0		0		(2)		(25)		0		0		48		(1)
Residential mortgage-
backed non-agency		6		0		(1)		0		0		0		0		0		0		0		(3)		2		0
Commercial
mortgage-backed		28		0		0		0		0		0		0		0		(24)		0		0		4		0
Collateralized debt
obligations		117		0		0		5		0		0		0		(1)		(86)		0		0		35		3
Other asset-backed		47		0		14		0		0		0		0		(6)		(2)		10		0		63		11
Loans receivable		1,819		0		212		0		0		0		0		(68)		(173)		0		0		1,790		212
Loan repurchase
commitments		1,176		0		49		0		0		0		0		(110)		0		0		0		1,115		49
Total assets	$	3,488	$	(5)	$	269	$	15	$	0	$	66	$	0	$	(208)	$	(315)	$	69	$	(17)	$	3,362	$	276

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended June 30, 2012
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings for
					Gains /		Unrealized		Foreign																Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		June 30,
In millions	of Period		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2012
Assets:
Foreign governments	$	12	$	0	$	0	$	0	$	(1)	$	7	$	0	$	(3)	$	(3)	$	0	$	0	$	12	$	0
Corporate obligations		185		0		2		13		(2)		16		0		(15)		(115)		14		0		98		2
Residential mortgage-
backed agency		9		0		0		0		0		0		0		0		0		4		(9)		4		0
Residential mortgage-
backed non-agency		14		0		0		(4)		0		0		0		(5)		(1)		26		0		30		0
Commercial
mortgage-backed		25		0		0		2		0		0		0		0		0		0		0		27		0
Collateralized debt
obligations		35		(1)		0		3		0		0		0		(4)		(7)		4		(1)		29		0
Other asset-backed		115		(2)		0		10		0		2		0		(2)		(50)		4		(5)		72		0
State and municipal
bonds		27		0		0		0		0		0		0		(2)		0		0		0		25		0
Perpetual debt and equity securities		10		0		0		0		0		0		0		0		0		3		0		13		0
Assets of
consolidated VIEs:
Corporate obligations		75		0		(6)		(6)		0		28		0		(2)		0		6		0		95		0
Residential mortgage-
backed non-agency		25		0		1		0		0		0		0		(2)		(15)		1		0		10		0
Commercial
mortgage-backed		15		0		1		0		0		0		0		(1)		(8)		5		0		12		1
Collateralized debt
obligations		218		0		(2)		(3)		0		0		0		0		(75)		2		0		140		6
Other asset-backed		71		0		3		0		0		4		0		(3)		(36)		3		0		42		2
Loans receivable		2,025		0		(49)		0		0		0		0		(71)		(2)		0		0		1,903		(49)
Loan repurchase
commitments		1,076		0		(44)		0		0		0		0		0		0		0		0		1,032		(44)
Total assets	$	3,937	$	(3)	$	(94)	$	15	$	(3)	$	57	$	0	$	(110)	$	(312)	$	72	$	(15)	$	3,544	$	(82)

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended June 30, 2013
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings for
					Gains /		Unrealized		Foreign																Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		June 30,
In millions	of Year		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2013
Assets:
Foreign governments	$	3	$	0	$	0	$	0	$	0	$	0	$	0	$	(8)	$	0	$	11	$	(3)	$	3	$	0
Corporate obligations		76		2		5		4		(1)		2		0		(1)		(24)		0		0		63		5
Residential mortgage-
backed agency		0		0		0		0		0		0		0		0		0		3		0		3		0
Residential mortgage-
backed non-agency		4		0		0		0		0		0		0		(3)		0		0		0		1		0
Commercial
mortgage-backed		28		0		0		4		0		0		0		0		(19)		1		(1)		13		0
Collateralized debt
obligations		31		(2)		0		4		0		61		0		(12)		(5)		19		(11)		85		1
Other asset-backed		26		0		0		(1)		0		4		0		(5)		0		44		(4)		64		0
State and municipal
bonds		103		2		0		(1)		0		0		0		(3)		(12)		42		(68)		63		0
Perpetual debt and equity securities		14		0		0		0		(1)		0		0		0		0		0		(3)		10		0
Assets of
consolidated VIEs:
Corporate obligations		78		(4)		(8)		6		0		0		0		(3)		(24)		3		0		48		(1)
Residential mortgage-
backed non-agency		6		0		6		0		0		0		0		(7)		0		1		(4)		2		0
Commercial
mortgage-backed		7		0		1		0		0		0		0		0		(24)		20		0		4		1
Collateralized debt
obligations		125		0		(9)		5		0		0		0		(1)		(85)		1		(1)		35		4
Other asset-backed		64		0		0		0		0		0		0		(9)		(2)		10		0		63		4
Loans receivable		1,881		0		221		0		0		0		0		(137)		(175)		0		0		1,790		207
Loan repurchase
commitments		1,086		0		139		0		0		0		0		(110)		0		0		0		1,115		139
Total assets	$	3,532	$	(2)	$	355	$	21	$	(2)	$	67	$	0	$	(299)	$	(370)	$	155	$	(95)	$	3,362	$	360

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended June 30, 2012
																									Change in
																									Unrealized
																									Gains
																									(Losses) for
																									the Period
																									Included in
					Unrealized																				Earnings for
					Gains /		Unrealized		Foreign																Assets
					(Losses)		Gains /		Exchange																still held
	Balance,		Realized		Included		(Losses)		Recognized										Transfers		Transfers				as of
	Beginning		Gains /		in		Included		in OCI or										into		out of		Ending		June 30,
In millions	of Year		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2012
Assets:
Foreign governments	$	11	$	0	$	0	$	0	$	0	$	13	$	0	$	(9)	$	(3)	$	0	$	0	$	12	$	0
Corporate obligations		207		(15)		5		26		0		15		0		(16)		(138)		14		0		98		5
Residential mortgage-
backed agency		8		0		0		1		0		0		0		0		0		4		(9)		4		0
Residential mortgage-
backed non-agency		17		0		0		(3)		0		0		0		(7)		(1)		26		(2)		30		0
Commercial
mortgage-backed		24		0		0		4		0		0		0		0		0		0		(1)		27		0
Collateralized debt
obligations		60		(4)		0		9		0		0		0		(9)		(10)		10		(27)		29		0
Other asset-backed		317		(61)		0		73		0		4		0		(8)		(252)		6		(7)		72		0
State and municipal
bonds		28		0		0		0		0		0		0		(3)		0		0		0		25		0
Perpetual debt and equity securities		11		0		0		0		0		0		0		0		0		4		(2)		13		0
Assets of
consolidated VIEs:
Corporate obligations		69		0		(5)		(6)		0		28		0		(3)		0		12		0		95		1
Residential mortgage-
backed non-agency		21		0		6		0		0		0		0		(4)		(15)		3		(1)		10		5
Commercial
mortgage-backed		22		0		2		0		0		0		0		(3)		(8)		5		(6)		12		1
Collateralized debt
obligations		203		0		0		(2)		0		0		0		0		(75)		14		0		140		7
Other asset-backed		67		0		5		0		0		4		0		(3)		(36)		5		0		42		4
Loans receivable		2,046		0		(10)		0		0		0		0		(131)		(2)		0		0		1,903		(10)
Loan repurchase
commitments		1,077		0		(45)		0		0		0		0		0		0		0		0		1,032		(45)
Total assets	$	4,188	$	(80)	$	(42)	$	102	$	0	$	64	$	0	$	(196)	$	(540)	$	103	$	(55)	$	3,544	$	(32)

Changes In Level 3 Liabilities Measured At Fair Value On A Recurring Basis

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		June 30,
In millions	of Period		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2013
Liabilities:
Medium-term notes	$	181	$	0	$	5	$	0	$	2	$	0	$	0	$	0	$	0	$	0	$	0	$	188	$	7
Credit derivatives, net		2,994		1,532		(1,350)		0		0		0		0		(1,532)		0		4		0		1,648		162
Interest rate
derivatives, net		(1)		0		1		0		1		0		0		0		0		0		(1)		0		(6)
Currency
derivatives, net		1		0		(1)		0		1		0		0		0		0		0		(1)		0		0
Liabilities of
consolidated VIEs:
VIE notes		1,901		0		24		0		0		0		0		(26)		(1,075)		0		0		824		24
Currency
derivatives, net		23		0		(4)		0		(3)		0		0		0		0		0		0		16		(7)
Total liabilities	$	5,099	$	1,532	$	(1,325)	$	0	$	1	$	0	$	0	$	(1,558)	$	(1,075)	$	4	$	(2)	$	2,676	$	180
_______________
(1) - Transferred in and out at the end of the period.

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		June 30,
In millions	of Period		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2012
Liabilities:
Medium-term notes	$	174	$	0	$	(16)	$	0	$	(7)	$	0	$	0	$	0	$	0	$	0	$	0	$	151	$	(16)
Credit derivatives, net		4,487		443		(1,202)		0		0		0		0		(443)		0		0		0		3,285		(641)
Interest rate
derivatives, net		(4)		0		0		0		0		0		0		0		0		0		0		(4)		0
Liabilities of
consolidated VIEs:
VIE notes		2,864		0		62		0		0		0		0		(76)		(983)		0		0		1,867		62
Credit derivatives, net		82		0		0		0		0		0		0		0		(82)		0		0		0		0
Currency derivatives,
net		19		0		2		0		0		0		0		0		0		0		0		21		2
Total liabilities	$	7,622	$	443	$	(1,154)	$	0	$	(7)	$	0	$	0	$	(519)	$	(1,065)	$	0	$	0	$	5,320	$	(593)
_______________
(1) - Transferred in and out at the end of the period.

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		June 30,
In millions	of Year		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2013
Liabilities:
Medium-term notes	$	165	$	0	$	25	$	0	$	(2)	$	0	$	0	$	0	$	0	$	0	$	0	$	188	$	23
Credit derivatives, net		2,921		1,521		(1,277)		0		0		0		0		(1,521)		0		4		0		1,648		218
Interest rate
derivatives, net		(1)		0		2		0		0		0		0		0		0		0		(1)		0		(6)
Currency
derivatives, net		1		0		0		0		0		0		0		0		0		0		(1)		0		0
Liabilities of
consolidated VIEs:
VIE notes		1,932		0		146		0		0		0		0		(178)		(1,076)		0		0		824		59
Currency derivatives,
net		21		0		(5)		0		0		0		0		0		0		0		0		16		(5)
Total liabilities	$	5,039	$	1,521	$	(1,109)	$	0	$	(2)	$	0	$	0	$	(1,699)	$	(1,076)	$	4	$	(2)	$	2,676	$	289
_______________
(1) - Transferred in and out at the end of the period.

																									Change in
																									Unrealized
																									(Gains)
																									Losses for
																									the Period
																									Included in
					Unrealized																				Earnings for
					(Gains) /		Unrealized		Foreign																Liabilities
					Losses		(Gains) /		Exchange																still held
	Balance,		Realized		Included		Losses		Recognized										Transfers		Transfers				as of
	Beginning		(Gains) /		in		Included		in OCI or										into		out of		Ending		June 30,
In millions	of Year		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2012
Liabilities:
Medium-term notes	$	165	$	0	$	(11)	$	0	$	(3)	$	0	$	0	$	0	$	0	$	0	$	0	$	151	$	(11)
Credit derivatives, net		4,790		463		(1,505)		0		0		0		0		(463)		0		0		0		3,285		(571)
Interest rate
derivatives, net		(3)		0		(1)		0		0		0		0		0		0		0		0		(4)		7
Liabilities of
consolidated VIEs:
VIE notes		2,889		0		221		0		0		0		0		(260)		(983)		0		0		1,867		165
Credit derivatives, net		80		0		2		0		0		0		0		0		(82)		0		0		0		0
Currency derivatives,
net		17		0		4		0		0		0		0		0		0		0		0		21		4
Total liabilities	$	7,938	$	463	$	(1,290)	$	0	$	(3)	$	0	$	0	$	(723)	$	(1,065)	$	0	$	0	$	5,320	$	(406)
_______________
(1) - Transferred in and out at the end of the period.

Gains And Losses (Realized And Unrealized) Included In Earnings Pertaining To Level 3 Assets And Liabilities


		Three Months Ended June 30, 2013				Three Months Ended June 30, 2012
				Change in				Change in
				Unrealized				Unrealized
				Gains (Losses)				Gains (Losses)
				for the				for the
				Period Included				Period Included
				in Earnings				in Earnings
				for Assets				for Assets
				and				and
		Total Gains		Liabilities still		Total Gains		Liabilities still
		(Losses)		held as of		(Losses)		held as of
		Included		June 30,		Included		June 30,
In millions		in Earnings		2013		in Earnings		2012
Revenues:
	Unrealized gains (losses) on
	insured derivatives	$	1,350	$	(162)	$	1,202	$	641
	Realized gains (losses) and other
	settlements on insured derivatives		(1,532)		0		(443)		0
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		(8)		1		18		18
	Net investment losses related to
	other-than-temporary impairments		0		0		(3)		0
	Revenues of consolidated VIEs:
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		244		257		(160)		(148)
Total		$	54	$	96	$	614	$	511


		Six Months Ended June 30, 2013				Six Months Ended June 30, 2012
				Change in				Change in
				Unrealized				Unrealized
				Gains (Losses)				Gains (Losses)
				for the				for the
				Period Included				Period Included
				in Earnings				in Earnings
				for Assets				for Assets
				and				and
		Total Gains		Liabilities still		Total Gains		Liabilities still
		(Losses)		held as of		(Losses)		held as of
		Included		June 30,		Included		June 30,
In millions		in Earnings		2013		in Earnings		2012
Revenues:
	Net investment income	$	0	$	0	$	(5)	$	0
	Unrealized gains (losses) on
	insured derivatives		1,277		(218)		1,505		571
	Realized gains (losses) and other
	settlements on insured derivatives		(1,521)		0		(463)		0
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		(18)		(11)		2		9
	Net investment losses related to
	other-than-temporary impairments		0		0		(60)		0
	Revenues of consolidated VIEs:
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		205		300		(274)		(206)
Total		$	(57)	$	71	$	705	$	374

Changes In Fair Value Included In The Company's Consolidated Statements Of Operations

		Net Gains (Losses) on Financial Instruments
		at Fair Value and Foreign Exchange
		Three Months Ended June 30,				Six Months Ended June 30,
In millions		2013		2012		2013		2012
Fixed-maturity securities held at fair value		$	(16)	$	(56)	$	2	$	(57)
Loans receivable at fair value:
	Residential mortgage loans		145		(117)		71		(99)
	Other loans		-		(2)		13		(41)
Loan repurchase commitments			50		44		139		43
Long-term debt			(160)		135		(79)		128

Difference Between Aggregate Fair Value And The Aggregate Remaining Contractual Principal Balance Outstanding

		As of June 30, 2013							As of December 31, 2012
		Contractual						Contractual
		Outstanding		Fair				Outstanding		Fair
In millions		Principal		Value		Difference		Principal		Value		Difference
Loans receivable at fair value:
	Residential mortgage loans	$	2,025	$	1,704	$	321	$	2,307	$	1,735	$	572
	Residential mortgage loans (90 days or more past due)		228		86		142		244		54		190
	Other loans		0		0		0		22		22		0
	Other loans (90 days or more past due)		0		0		0		197		70		127
Total loans receivable at fair value		$	2,253	$	1,790	$	463	$	2,770	$	1,881	$	889

Variable interest entity notes		$	4,013	$	2,590	$	1,423	$	9,021	$	3,659	$	5,362

- Definition

Tabular disclosure related to assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a recurring and/or nonrecurring basis in periods after initial recognition. Disclosures include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3) as well as transfers between levels 1 and 2.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19279-110258

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19190-110258

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 6

-Footnote 4

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Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a,b,bb)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2C

-URI http://asc.fasb.org/extlink&oid=7578670&loc=SL7498348-110258

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 33

-Subparagraph a, b

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

Tabular disclosure of the amount of gains or losses for the period included in earnings or resulted in a change to net assets, have arisen from the use of significant unobservable inputs (level 3) to measure the fair value of assets, liabilities, and financial instruments classified in shareholders' equity.

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References+ Details

- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 17

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph d, e

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details

- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined) which are not recognized in the financial statements (off-balance sheet) because they fail to meet some other criterion for recognition.

+ References

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+ Details