XML 37 R21.htm IDEA: XBRL DOCUMENT

Insurance in Force

12 Months Ended

Dec. 31, 2021

Note 13: Insurance in Force

The Company guarantees the payment of principal of, and interest or other amounts owing on, municipal, asset-backed, mortgage-backed and other

non-municipal

securities. The Company’s insurance in force represents the aggregate amount of the insured principal of, and interest or other amounts owing on, insured obligations. The Company’s ultimate exposure to credit loss in the event of nonperformance by the issuer of the insured obligation is represented by the insurance in force in the tables that follow.

The financial guarantees issued by the Company provide unconditional and irrevocable guarantees of the payment of the principal of, and interest or other amounts owing on, insured obligations when due. The obligations are generally not subject to acceleration, except in the event the Company has the right, at its discretion, to accelerate insured obligations upon default or otherwise. Payments to be made by the issuer on the bonds or notes may be backed by a pledge of revenues, reserve funds, letters of credit, investment contracts or collateral in the form of mortgages or other assets. The right to such funds or collateral would typically become National’s or MBIA Corp.’s upon the payment of a claim by either National or MBIA Corp.

As of December 31, 2021, insurance in force, which represents principal and interest or other amounts owing on insured obligations, had an expected maturity through

2058

. The distribution of MBIA Corp.’s and National’s combined insurance in force by geographic location, excluding financial obligations guaranteed by MBIA Corp. on behalf of affiliated companies, is presented in the following table:


	As of December 31,
$ in billions	2021				2020
Geographic Location	Insurance in Force		% of Insurance in Force		Insurance in Force		% of Insurance in Force
California	$	16.8		21.4%	$	20.0		21.9%
Illinois		8.2		10.4%		8.9		9.7%
New Jersey		4.5		5.8%		5.4		5.9%
Hawaii		3.9		5.0%		4.1		4.4%
Texas		3.1		4.0%		3.7		4.0%
Virginia		3.0		3.9%		3.2		3.6%
Puerto Rico		2.7		3.4%		2.9		3.2%
New York		2.4		3.0%		3.0		3.3%
Oregon		2.3		2.9%		2.7		2.9%
Colorado		2.0		2.5%		2.1		2.3%

Subtotal		48.9		62.3%		56.0		61.2%
Nationally Diversified		7.5		9.6%		8.7		9.5%
Other states		17.3		22.0%		19.8		21.7%

Total United States		73.7		93.9%		84.5		92.4%

Internationally Diversified		0.3		0.3%		0.3		0.3%
Country specific		4.5		5.8%		6.6		7.3%

Total non-United States		4.8		6.1%		6.9		7.6%

Total	$	78.5		100.0%	$	91.4		100.0%

The insurance in force and insured gross par outstanding by type of bond, excluding financial obligations guaranteed by MBIA Corp. on behalf of affiliated companies, are presented in the following table:


	As of December 31,
$ in billions	2021				2020
Bond type	Insurance in Force		Gross Par Amount		Insurance in Force		Gross Par Amount
Global public finance—United States:
General obligation (1)	$	22.1	$	10.7	$	25.0	$	12.1
Military housing		14.3		6.9		14.8		7.0
Tax-backed		14.2		6.8		15.7		7.9
Municipal utilities		8.7		6.0		10.6		7.3
Transportation		7.7		2.6		9.2		3.0
General obligation—lease		1.7		1.2		2.4		1.9
Higher education		1.3		1.0		1.5		1.1
Health care		1.0		0.7		1.2		0.8
Investor-owned utilities (2)		0.6		0.5		0.9		0.6
Other (3)		0.1		0.1		0.1		0.1
Municipal housing		—		—		0.1		0.1

Total United States		71.7		36.5		81.5		41.9

Global public finance—non-United States:
Sovereign-related and sub-sovereign (4)		2.0		1.6		2.8		2.1
Transportation		1.2		1.0		2.1		1.8
International utilities		0.5		0.5		0.9		0.8
Other (5)		0.1		0.1		0.1		0.1

Total non-United States		3.8		3.2		5.9		4.8

Total global public finance		75.5		39.7		87.4		46.7

Global structured finance:
Mortgage-backed residential		1.5		1.0		2.0		1.5
Corporate asset-backed (6)		0.6		0.4		0.8		0.6
Mortgage-backed commercial		0.4		0.2		0.5		0.2
Collateralized debt obligations		0.3		0.2		0.4		0.3
Consumer asset-backed		0.2		0.2		0.3		0.3

Total global structured finance		3.0		2.0		4.0		2.9

Total	$	78.5	$	41.7	$	91.4	$	49.6

(1)—Includes general obligation unlimited and limited (property) tax bonds, general fund obligation bonds and pension obligation bonds of states, cities, counties, schools and special districts.

(2)—Includes investor owned utilities, industrial development and pollution control revenue bonds.

(3)—Includes stadium related financings and certain non-profit enterprises.

(4)—Includes regions, departments or their equivalent in each jurisdiction as well as sovereign owned entities that are supported by a sovereign state, region or department.

(5)—Includes municipal owned entities backed by sponsoring local government and tax backed transactions.

(6)—As of December 31, 2020, all remaining insurance in force and gross par relating to structured insurance securitizations was terminated.

Affiliated Financial Obligations Insured by MBIA Corp.

Investment agreement contracts and MTNs issued by the Company’s corporate segment and the Refinanced Facility issued by the Company’s international and structured finance insurance segment are insured by MBIA Corp. and are not included in the previous tables. If MBIA Inc. or these subsidiaries were to have insufficient assets to pay amounts due, MBIA Corp. would be obligated to make such payments under its insurance policies. As of December 31, 2021, the maximum amount of future payments that MBIA Corp. could be required to make

under these guarantees is $1.3 billion. These guarantees, which mature through 2037, were entered into on an arm’s length basis. MBIA Corp. has both direct recourse provisions and subrogation rights in these transactions. If MBIA Corp. is required to make a payment under any of these affiliate guarantees, it would have the right to seek reimbursement from such affiliate and to liquidate any collateral to recover amounts paid under the guarantee.

Reinsured Exposure

Reinsurance enables the Company to cede exposure for purposes of syndicating risk. The Company generally retains the right to reassume the business ceded to reinsurers under certain circumstances, including a reinsurer’s rating downgrade below specified thresholds. At this time, the Company does not intend to utilize reinsurance to decrease the insured exposure in its portfolio.

MBIA requires certain unauthorized reinsurers to maintain bank letters of credit or establish trust accounts to cover liabilities ceded to such reinsurers under reinsurance contracts. The Company remains liable on a primary basis for all reinsured risk. MBIA believes that its reinsurers remain capable of meeting their obligations, although, there can be no assurance of such in the future.

The aggregate amount of insurance in force ceded by MBIA to reinsurers was $2.2 billion and $3.0 billion as of December 31, 2021 and 2020, respectively.

As of December 31, 2021, the aggregate amount of insured par outstanding ceded by MBIA to reinsurers under reinsurance agreements was $1.0 billion compared with $1.5 billion as of December 31, 2020. As of December 31, 2021, $0.8 billion of the ceded par outstanding was ceded from the Company’s U.S. public finance insurance segment and $169 million was ceded from the Company’s international and structured finance insurance segment. Under National’s reinsurance agreement with MBIA Corp., if a reinsurer of MBIA Corp. is unable to pay claims ceded by MBIA Corp. on U.S. public finance exposure, National will assume liability for such ceded claim payments. The following table presents information about the Company’s reinsurance agreements as of December 31, 2021 for its U.S. public finance and international and structured finance insurance operations.


In millions
Reinsurers	Standard & Poor’s Rating (Status)		Moody’s Rating (Status)		Ceded Par Outstanding		Letters of Credit/Trust Accounts		Reinsurance Recoverable/ (Payable) (1)
Assured Guaranty Re Ltd.		AA		WR (2)	$	503	$	15	$	(2)
		(Stable Outlook)
Assured Guaranty Corp.		AA		A3		463		—		(45)
		(Stable Outlook)		(Stable Outlook)
Others		A+ or above		WR (2) or above		51		—		(1)

Total					$	1,017	$	15	$	(48)

(1)—Total reinsurance recoverable/(payable) is primarily related to recoverables on unpaid losses net of (payables) on salvage received.

(2)—Represents a withdrawal of ratings.