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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

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
		September 30,				(Weighted
In millions		2016		Valuation Techniques	Unobservable Input	Average)
Assets of consolidated VIEs:
	Loans receivable at fair value	$	995	Market prices adjusted for financial	Impact of financial guarantee	0% - 24% (2%)
				guarantees provided to VIE obligations
				Discounted cash flow	Multiples⁽¹⁾

	Loan repurchase commitments		404	Discounted cash flow	Recovery rates⁽²⁾
					Breach rates⁽²⁾

Liabilities of consolidated VIEs:
	Variable interest entity notes		498	Market prices of VIE assets	Impact of financial guarantee	0% - 56% (23%)
				adjusted for financial guarantees provided

Credit derivative liabilities, net:
	CMBS		82	BET Model	Recovery rates	25% - 90% (44%)
					Nonperformance risk	22% - 39% (39%)
					Weighted average life (in years)	0.8 - 3.4 (1.9)
					CMBS spreads	0% - 49% (34%)
	Multi-sector CDO		2	Direct Price Model	Nonperformance risk	58% - 58% (58%)
	Other		1	BET Model and Dual Default	Nonperformance risk	51% - 51% (51%)
					Weighted average life (in years)	5.7 - 5.7 (5.7)
Other derivative liabilities			19	Discounted cash flow	Cash flows	$0 - $83 ($42)⁽³⁾

____________
(1) - Unobservable inputs are not developed by the Company.
(2) - Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty.
(3) - Midpoint of cash flows are used for the weighted average.

		Fair Value
		as of				Range
		December 31,				(Weighted
In millions		2015		Valuation Techniques	Unobservable Input	Average)
Assets of consolidated VIEs:
	Loans receivable at fair value	$	1,292	Market prices adjusted for financial	Impact of financial guarantee	0% - 5% (1%)
				guarantees provided to VIE obligations
	Loan repurchase commitments		396	Discounted cash flow	Recovery rates⁽¹⁾
					Breach rates⁽¹⁾

Liabilities of consolidated VIEs:
	Variable interest entity notes		1,267	Market prices of VIE assets	Impact of financial guarantee	0% - 37% (14%)
				adjusted for financial guarantees provided

Credit derivative liabilities, net:
	CMBS		72	BET Model	Recovery rates	25% - 90% (66%)
					Nonperformance risk	33% - 55% (54%)
					Weighted average life (in years)	1.1 - 3.2 (1.6)
					CMBS spreads	0% - 59% (19%)
	Multi-sector CDO		3	Direct Price Model	Nonperformance risk	59% - 59% (59%)
	Other		10	BET Model and Dual Default	Recovery rates	42% - 45% (43%)
					Nonperformance risk	59% - 59% (59%)
					Weighted average life (in years)	0.5 - 7.3 (1.9)
Other derivative liabilities			18	Discounted cash flow	Cash flows	$0 - $83 ($42)⁽²⁾
	____________
	(1) - Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty.
	(2) - Midpoint of cash flows are used for the weighted average.

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		September 30,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2016
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency			$	1,059	$	119	$	-		$	-	$	1,178
	State and municipal bonds				-		1,584		4	⁽¹⁾		-		1,588
	Foreign governments				112		50		6	⁽¹⁾		-		168
	Corporate obligations				-		1,753		1	⁽¹⁾		-		1,754
	Mortgage-backed securities:
		Residential mortgage-backed agency			-		922		-			-		922
		Residential mortgage-backed non-agency			-		44		-			-		44
		Commercial mortgage-backed			-		43		1	⁽¹⁾		-		44
	Asset-backed securities:
		Collateralized debt obligations			-		8		17	⁽¹⁾		-		25
		Other asset-backed			-		366		38	⁽¹⁾		-		404
			Total fixed-maturity investments		1,171		4,889		67			-		6,127
Money market securities					190		-		-			-		190
Perpetual debt and equity securities					23		17		-			-		40
Cash and cash equivalents					191		-		-			-		191
Derivative assets:
	Non-insured derivative assets:
		Interest rate derivatives			-		4		-			(1)		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		September 30,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2016
Assets of consolidated VIEs:
	Corporate obligations				-		31		3	⁽¹⁾		-		34
	Mortgage-backed securities:
		Residential mortgage-backed non-agency			-		156		-			-		156
		Commercial mortgage-backed			-		49		3	⁽¹⁾		-		52
	Asset-backed securities:
		Collateralized debt obligations			-		9		1	⁽¹⁾		-		10
		Other asset-backed			-		17		1	⁽¹⁾		-		18
	Cash				25		-		-			-		25
	Loans receivable at fair value:
		Residential loans receivable			-		-		995			-		995
		Other loans receivable			-		-		147	⁽¹⁾		-		147
	Loan repurchase commitments				-		-		404			-		404
	Derivative assets:
		Currency derivatives			-		-		13	⁽¹⁾		-		13
Total assets				$	1,600	$	5,172	$	1,634		$	(1)	$	8,405
Liabilities:
Medium-term notes				$	-	$	-	$	106	⁽¹⁾	$	-	$	106
Derivative liabilities:
	Insured derivatives:
		Credit derivatives			-		2		85			-		87
	Non-insured derivatives:
		Interest rate derivatives			-		296		-			(19)		277
		Other			-		-		19			-		19
Other liabilities:
	Warrants				-		13		-			-		13
Liabilities of consolidated VIEs:
	Variable interest entity notes				-		935		498			-		1,433
Total liabilities				$	-	$	1,246	$	708		$	(19)	$	1,935
____________
(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		2015
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency			$	866	$	110	$	-		$	-	$	976
	State and municipal bonds				-		1,685		41	⁽¹⁾		-		1,726
	Foreign governments				153		43		2	⁽¹⁾		-		198
	Corporate obligations				-		1,450		7	⁽¹⁾		-		1,457
	Mortgage-backed securities:
		Residential mortgage-backed agency			-		993		-			-		993
		Residential mortgage-backed non-agency			-		51		-			-		51
		Commercial mortgage-backed			-		31		-			-		31
	Asset-backed securities:
		Collateralized debt obligations			-		5		29	⁽¹⁾		-		34
		Other asset-backed			-		281		38	⁽¹⁾		-		319
			Total fixed-maturity investments		1,019		4,649		117			-		5,785
Money market securities					354		-		-			-		354
Perpetual debt and equity securities					18		190		-			-		208
Cash and cash equivalents					464		-		-			-		464
Derivative assets:
	Non-insured derivative assets:
		Interest rate derivatives			-		4		-			(1)		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		December 31,
In millions				(Level 1)		(Level 2)		(Level 3)			Netting		2015
Assets of consolidated VIEs:
	Corporate obligations				-		39		11	⁽¹⁾		-		50
	Mortgage-backed securities:
		Residential mortgage-backed non-agency			-		172		-			-		172
		Commercial mortgage-backed			-		672		-			-		672
	Asset-backed securities:
		Collateralized debt obligations			-		13		1	⁽¹⁾		-		14
		Other asset-backed			-		18		6	⁽¹⁾		-		24
	Cash				58		-		-			-		58
	Loans receivable at fair value:
		Residential loans receivable			-		-		1,185			-		1,185
		Other loans receivable			-		-		107			-		107
	Loan repurchase commitments				-		-		396			-		396
	Derivative assets:
		Currency derivatives			-		-		11	⁽¹⁾		-		11
Total assets				$	1,913	$	5,757	$	1,834		$	(1)	$	9,503
Liabilities:
Medium-term notes				$	-	$	-	$	161	⁽¹⁾	$	-	$	161
Derivative liabilities:
	Insured derivatives:
		Credit derivatives			-		3		85			-		88
	Non-insured derivatives:
		Interest rate derivatives			-		240		-			(32)		208
		Other			-		-		18			-		18
Other liabilities:
	Warrants				-		18		-			-		18
	Securities sold, not yet purchased				18		-		-			-		18
Liabilities of consolidated VIEs:
	Variable interest entity notes				-		1,095		1,267			-		2,362
	Derivative liabilities:
		Interest rate derivatives			-		45		-			-		45
Total liabilities				$	18	$	1,401	$	1,531		$	(32)	$	2,918
____________
(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		September 30,		September 30,
In millions		(Level 1)		(Level 2)		(Level 3)		2016		2016
Assets:
	Other investments	$	-	$	-	$	3	$	3	$	3
	Accrued investment income⁽¹⁾		-		41		-		41		41
	Receivable for investments sold⁽¹⁾		-		23		-		23		23
Assets of consolidated VIEs:
	Investments held-to-maturity		-		-		573		573		890
Total assets		$	-	$	64	$	576	$	640	$	957
Liabilities:
	Long-term debt	$	-	$	976	$	-	$	976	$	1,975
	Medium-term notes		-		-		485		485		826
	Investment agreements		-		-		571		571		418
	Payable for investments purchased⁽²⁾		-		50		-		50		50
Liabilities of consolidated VIEs:
	Variable interest entity notes		-		-		777		777		890
Total liabilities		$	-	$	1,026	$	1,833	$	2,859	$	4,159
Financial Guarantees:
	Gross	$	-	$	-	$	3,141	$	3,141	$	1,329
	Ceded		-		-		107		107		52
__________
(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)		2015		2015
Assets:
	Other investments	$	-	$	-	$	3	$	3	$	3
	Accrued investment income⁽¹⁾		-		38		-		38		38
	Receivable for investments sold⁽¹⁾		-		26		-		26		26
Assets of consolidated VIEs:
	Investments held-to-maturity		-		-		2,401		2,401		2,689
Total assets		$	-	$	64	$	2,404	$	2,468	$	2,756
Liabilities:
	Long-term debt	$	-	$	762	$	-	$	762	$	1,889
	Medium-term notes		-		-		534		534		855
	Investment agreements		-		-		595		595		462
	Payable for investments purchased⁽²⁾		-		36		-		36		36
Liabilities of consolidated VIEs:
	Variable interest entity notes		-		-		2,596		2,596		2,689
Total liabilities		$	-	$	798	$	3,725	$	4,523	$	5,931
Financial Guarantees:
	Gross	$	-	$	-	$	3,093	$	3,093	$	1,530
	Ceded		-		-		94		94		56
__________
(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 September 30, 2016
																									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		September 30,
In millions	of Period		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2016
Assets:
Foreign governments	$	7	$	-	$	-	$	-	$	-	$	5	$	-	$	(6)	$	-	$	-	$	-	$	6	$	-
Corporate obligations		2		-		-		-		-		-		-		(1)		-		-		-		1		-
Commercial
mortgage-backed		-		-		-		-		-		-		-		-		-		1		-		1		-
Collateralized debt
obligations		20		-		-		-		-		-		-		(3)		-		-		-		17		-
Other asset-backed		41		-		-		-		-		-		-		-		-		-		(3)		38		-
State and municipal
bonds		124		-		-		-		-		-		-		-		-		2		(122)		4		-
Assets of
consolidated VIEs:
Corporate obligations		3		-		-		-		-		-		-		-		-		-		-		3		-
Residential mortgage-
backed non-agency		1		-		(1)		-		-		-		-		-		-		-		-		-		-
Commercial
mortgage-backed		2		-		(1)		-		-		-		-		-		-		2		-		3		(1)
Collateralized debt
obligations		1		-		-		-		-		-		-		-		-		-		-		1		-
Other asset-backed		4		-		-		-		-		-		-		-		-		-		(3)		1		-
Loans receivable-
residential		1,045		-		25		-		-		-		-		(75)		-		-		-		995		25
Loans receivable- other		147		-		-		-		-		-		-		-		-		-		-		147		-
Loan repurchase
commitments		401		-		3		-		-		-		-		-		-		-		-		404		3
Currency
derivatives, net		9		-		-		-		4		-		-		-		-		-		-		13		4
Total assets	$	1,807	$	-	$	26	$	-	$	4	$	5	$	-	$	(85)	$	-	$	5	$	(128)	$	1,634	$	31

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2015
																									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		September 30,
In millions	of Period		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2015
Assets:
Foreign governments	$	5	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	5	$	-
Corporate obligations		8		-		-		-		-		-		-		-		-		-		-		8		-
Commercial
mortgage-backed		1		-		-		-		-		-		-		-		-		-		(1)		-		-
Collateralized debt
obligations		67		-		-		1		-		-		-		(4)		-		-		(3)		61		-
Other asset-backed		83		-		-		-		-		-		-		(2)		-		-		(24)		57		-
State and municipal
bonds		5		-		-		-		-		45		-		(3)		-		-		-		47		-
Assets of
consolidated VIEs:
Corporate obligations		35		-		1		-		-		-		-		-		-		3		(28)		11		-
Residential mortgage-
backed non-agency		5		-		-		-		-		-		-		-		-		-		(5)		-		-
Collateralized debt
obligations		4		-		5		-		-		-		-		-		-		-		(9)		-		-
Other asset-backed		17		-		-		-		-		-		-		(1)		-		-		(7)		9		-
Loans receivable-
residential		1,318		-		(12)		-		-		-		-		(62)		-		-		-		1,244		(12)
Loans receivable-other		108		-		(1)		-		-		-		-		-		-		-		-		107		(1)
Loan repurchase commitments		388		-		6		-		-		-		-		-		-		-		-		394		6
Currency derivatives, net		2		-		1		-		3		-		-		-		-		-		-		6		4
Total assets	$	2,046	$	-	$	-	$	1	$	3	$	45	$	-	$	(72)	$	-	$	3	$	(77)	$	1,949	$	(3)

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2016
																									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		September 30,
In millions	of Year		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2016
Assets:
Foreign governments	$	2	$	-	$	-	$	-	$	(1)	$	10	$	-	$	(5)	$	-	$	-	$	-	$	6	$	-
Corporate obligations		7		-		-		-		-		-		-		-		-		-		(6)		1		-
Commercial
mortgage-backed		-		-		-		-		-		-		-		-		-		1		-		1		-
Collateralized debt
obligations		29		-		-		18		-		-		-		(30)		-		-		-		17		-
Other asset-backed		38		(1)		(1)		8		-		-		-		(3)		-		-		(3)		38		(1)
State and municipal
bonds		41		-		-		-		-		122		-		(39)		-		2		(122)		4		-
Assets of
consolidated VIEs:
Corporate obligations		11		-		(4)		-		-		-		-		(1)		-		2		(5)		3		-
Residential mortgage-
backed non-agency		-		-		(1)		-		-		-		-		-		-		1		-		-		-
Commercial
mortgage-backed		-		-		(1)		-		-		-		-		-		-		4		-		3		(1)
Collateralized debt
obligations		1		-		-		-		-		-		-		-		-		-		-		1		-
Other asset-backed		6		-		(6)		-		-		-		-		-		-		4		(3)		1		-
Loans receivable- residential		1,185		-		(5)		-		-		-		-		(185)		-		-		-		995		(5)
Loans receivable-other		107		-		1		-		-		146		-		-		(107)		-		-		147		1
Loan repurchase
commitments		396		-		8		-		-		-		-		-		-		-		-		404		8
Currency
derivatives net		11		-		(2)		-		4		-		-		-		-		-		-		13		2
Total assets	$	1,834	$	(1)	$	(11)	$	26	$	3	$	278	$	-	$	(263)	$	(107)	$	14	$	(139)	$	1,634	$	4

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2015
																									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		September 30,
In millions	of Year		(Losses)		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2015
Assets:
Foreign governments	$	6	$	-	$	-	$	-	$	(1)	$	-	$	-	$	-	$	-	$	-	$	-	$	5	$	-
Corporate obligations		10		-		-		-		-		-		-		-		-		15		(17)		8		-
Commercial
mortgage-backed		2		-		-		-		-		-		-		-		-		1		(3)		-		-
Collateralized debt
obligations		87		-		-		3		-		-		-		(18)		(8)		1		(4)		61		-
Other asset-backed		85		(2)		-		1		-		4		-		(9)		(8)		12		(26)		57		-
State and municipal
bonds		8		-		-		-		-		45		-		(4)		-		-		(2)		47		-
Assets of
consolidated VIEs:
Corporate obligations		55		-		-		-		-		-		-		(6)		-		3		(41)		11		-
Residential mortgage-
backed non-agency		3		-		1		-		-		-		-		(1)		-		2		(5)		-		-
Collateralized debt
obligations		5		-		5		-		-		-		-		-		-		-		(10)		-		-
Other asset-backed		26		-		2		-		-		-		-		(5)		-		-		(14)		9		-
Loans receivable - residential		1,431		-		(15)		-		-		-		-		(172)		-		-		-		1,244		(15)
Loans receivable - other		-		-		(1)		-		-		108		-		-		-		-		-		107		(1)
Loan repurchase
commitments		379		-		15		-		-		-		-		-		-		-		-		394		15
Currency derivatives, net		-		-		-		-		6		-		-		-		-		-		-		6		6
Total assets	$	2,097	$	(2)	$	7	$	4	$	5	$	157	$	-	$	(215)	$	(16)	$	34	$	(122)	$	1,949	$	5

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		September 30,
In millions	of Period		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2016
Liabilities:
Medium-term notes	$	161	$	-	$	-	$	-	$	2	$	-	$	-	$	(57)	$	-	$	-	$	-	$	106	$	2
Credit derivatives, net		104		5		(19)		-		-		-		-		(5)		-		-		-		85		12
Other
derivatives		21		-		(2)		-		-		-		-		-		-		-		-		19		(2)
Liabilities of
consolidated VIEs:
VIE notes		523		-		2		-		-		-		-		(27)		-		-		-		498		2
Total liabilities	$	809	$	5	$	(19)	$	-	$	2	$	-	$	-	$	(89)	$	-	$	-	$	-	$	708	$	14
_______________
(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		September 30,
In millions	of Period		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2015
Liabilities:
Medium-term notes	$	166	$	-	$	4	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	170	$	4
Credit derivatives, net		144		18		(21)		-		-		-		-		(20)		-		-		-		121		(21)
Other
derivatives, net		21		-		1		-		-		-		-		-		-		-		-		22		1
Liabilities of
consolidated VIEs:
VIE notes		1,374		-		1		-		-		-		-		(65)		-		-		-		1,310		1
Total liabilities	$	1,705	$	18	$	(15)	$	-	$	-	$	-	$	-	$	(85)	$	-	$	-	$	-	$	1,623	$	(15)
_______________
(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		September 30,
In millions	of Year		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2016
Liabilities:
Medium-term notes	$	161	$	-	$	(4)	$	-	$	6	$	-	$	-	$	(57)	$	-	$	-	$	-	$	106	$	2
Credit derivatives, net		85		21		-		-		-		-		-		(21)		-		-		-		85		9
Other
derivatives, net		18		-		1		-		-		-		-		-		-		-		-		19		(1)
Liabilities of
consolidated VIEs:
VIE notes		1,267		-		(41)		-		-		9		-		(106)		(631)		-		-		498		(41)
Total liabilities	$	1,531	$	21	$	(44)	$	-	$	6	$	9	$	-	$	(184)	$	(631)	$	-	$	-	$	708	$	(31)
_______________
(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		September 30,
In millions	of Year		Losses		Earnings		in OCI		Earnings		Purchases		Issuances		Settlements		Sales		Level 3⁽¹⁾		Level 3⁽¹⁾		Balance		2015
Liabilities:
Medium-term notes	$	197	$	-	$	(11)	$	-	$	(16)	$	-	$	-	$	-	$	-	$	-	$	-	$	170	$	(27)
Credit derivatives, net		244		30		(121)		-		-		-		-		(32)		-		-		-		121		(109)
Other derivatives, net		24		-		(2)		-		-		-		-		-		-		-		-		22		(2)
Liabilities of
consolidated VIEs:
VIE notes		735		-		22		-		-		695		-		(142)		-		-		-		1,310		22
Total liabilities	$	1,200	$	30	$	(112)	$	-	$	(16)	$	695	$	-	$	(174)	$	-	$	-	$	-	$	1,623	$	(116)
_______________
(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 September 30, 2016				Three Months Ended September 30, 2015
				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		September 30,		Included		September 30,
In millions		in Earnings		2016		in Earnings		2015
Revenues:
	Unrealized gains (losses) on
	insured derivatives	$	19	$	(12)	$	21	$	21
	Realized gains (losses) and other
	settlements on insured derivatives		(5)		-		(18)		-
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		-		-		(5)		(5)
	Revenues of consolidated VIEs:
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		28		29		2		(4)
Total		$	42	$	17	$	-	$	12


		Nine Months Ended September 30, 2016				Nine Months Ended September 30, 2015
				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		September 30,		Included		September 30,
In millions		in Earnings		2016		in Earnings		2015
Revenues:
	Unrealized gains (losses) on
	insured derivatives	$	-	$	(9)	$	121	$	109
	Realized gains (losses) and other
	settlements on insured derivatives		(21)		-		(30)		-
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		(5)		(2)		26		29
	Net investment losses related to
	other-than-temporary impairments		(1)		-		-		-
	Revenues of consolidated VIEs:
	Net gains (losses) on financial instruments
	at fair value and foreign exchange		35		46		(9)		(17)
Total		$	8	$	35	$	108	$	121

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

		Three Months Ended September 30,				Nine Months Ended September 30,
In millions		2016		2015		2016		2015
Investments carried at fair value⁽¹⁾		$	2	$	(2)	$	8	$	1
Fixed-maturity securities held at fair value-VIE⁽²⁾			(12)		(20)		(109)		(93)
Loans receivable at fair value:
	Residential mortgage loans⁽²⁾		(50)		(74)		(190)		(187)
Loan repurchase commitments⁽²⁾			3		6		8		15
Medium-term notes⁽¹⁾			(2)		(3)		(2)		27
Variable interest entity notes ⁽²⁾			70		122		307		283
___________
(1) - Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange" on MBIA's consolidated statements of operations.
(2) - Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange-VIE" on MBIA's consolidated statements of operations.

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

		As of September 30, 2016							As of December 31, 2015
		Contractual						Contractual
		Outstanding		Fair				Outstanding		Fair
In millions		Principal		Value		Difference		Principal		Value		Difference
Loans receivable at fair value:
	Residential mortgage loans	$	1,054	$	962	$	92	$	1,260	$	1,149	$	111
	Residential mortgage loans (90 days or more past due)		150		33		117		177		36		141
	Other loans		-		-		-		107		107		-
	Other loans (90 days or more past due)		147		147		-		75		-		75
Total loans receivable at fair value		$	1,351	$	1,142	$	209	$	1,619	$	1,292	$	327

Variable interest entity notes		$	2,551	$	1,433	$	1,118	$	3,663	$	2,362	$	1,301

Medium-term notes		$	169	$	106	$	63	$	217	$	161	$	56

- 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 + Details