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Financial Guarantee Insurance Contracts (Tables)
 9 Months Ended
Sep. 30, 2019
Insurance [Line Items]  
Schedule of Loss And Loss Expense Reserves And Subrogation Recoverable Table [Table Text Block] Below are the components of the Loss and loss expense reserves liability and the Subrogation recoverable asset at September 30, 2019 and December 31, 2018:
 
 
Present Value of Expected
Net Cash Flows
 
Unearned
Premium
Revenue
 
Gross Loss and
Loss Expense
Reserves
Balance Sheet Line Item
 
Claims and
Loss Expenses
 
Recoveries
 
 
September 30, 2019:
 
 
 
 
 
 
 
 
Loss and loss expense reserves
 
$
1,803,743

 
$
(225,967
)
 
$
(55,472
)
 
$
1,522,304

Subrogation recoverable
 
135,599

 
(2,217,867
)
 
—

 
(2,082,268
)
Totals
 
$
1,939,342

 
$
(2,443,834
)
 
$
(55,472
)
 
$
(559,964
)
 
 
 
 
 
 
 
 
 
December 31, 2018:
 
 
 
 
 
 
 
 
Loss and loss expense reserves
 
$
2,246,335

 
$
(313,595
)
 
$
(106,662
)
 
$
1,826,078

Subrogation recoverable
 
175,694

 
(2,108,654
)
 
—

 
(1,932,960
)
Totals
 
$
2,422,029

 
$
(2,422,249
)
 
$
(106,662
)
 
$
(106,882
)
Summary of Gross Premium Receivable Roll-Forward (Direct and Assumed Contracts)
Below is the gross premium receivable roll-forward for the affected periods:
 
 
Nine Months Ended September 30,
 
 
2019
 
2018
Beginning premium receivable
 
$
495,391

 
$
586,312

Premium receipts
 
(36,778
)
 
(42,660
)
Adjustments for changes in expected and contractual cash flows (1)
 
(32,593
)
 
(34,088
)
Accretion of premium receivable discount
 
8,775

 
11,211

Deconsolidation of certain VIEs

3,239

 
—

Changes to uncollectable premiums
 
(6,921
)
 
2,473

Other adjustments (including foreign exchange)
 
(16,369
)
 
(6,051
)
Ending premium receivable (2)
 
$
414,744

 
$
517,197


(1)
Adjustments for changes in expected and contractual cash flows primarily due to reductions in insured exposure as a result of early policy terminations and unscheduled principal paydowns.
(2)
Premium receivable includes premiums to be received in foreign denominated currencies most notably in British Pounds and Euros. At September 30, 2019 and 2018, premium receivables include British Pounds of $124,406 (£101,168) and $136,925 (£104,988), respectively, and Euros of $22,091 (€20,264) and $32,613 (€28,085), respectively.
Effect of Reinsurance on Premiums Written and Earned
The effect of reinsurance on premiums written and earned for the respective periods was as follows:
 
Three Months Ended September 30,
 
2019
 
2018
 
Written
 
Earned
 
Written
 
Earned
Direct
$
(13,480
)
 
$
13,097

 
$
(22,954
)
 
$
27,559

Assumed
—

 
19

 
—

 
20

Ceded (1)
22,873

 
2,650

 
(789
)
 
1,939

Net premiums
$
(36,353
)
 
$
10,466

 
$
(22,165
)
 
$
25,640


 
Nine Months Ended September 30,
 
2019
 
2018
 
Written
 
Earned
 
Written
 
Earned
Direct
$
(30,739
)
 
$
52,596

 
$
(19,304
)
 
$
87,506

Assumed
—

 
59

 
—

 
59

Ceded (1)
22,030

 
6,598

 
(1,832
)
 
5,206

Net premiums
$
(52,769
)
 
$
46,057

 
$
(17,472
)
 
$
82,359
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]
The following table summarizes net premiums earned by location of risk for the respective periods:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
United States
$
10,588

 
$
19,539

 
$
44,457

 
$
64,009

United Kingdom
4,354

 
4,523

 
12,769

 
14,337

Other international
(4,476
)
 
1,578

 
(11,169
)
 
4,013

Total
$
10,466

 
$
25,640

 
$
46,057

 
$
82,359
Summarized Future Gross Undiscounted Premiums Expected to be Collected and Future Expected Premiums Earned, Net of Reinsurance
The table below summarizes the future gross undiscounted premiums to be collected and future premiums earned, net of reinsurance at September 30, 2019:
 
Future Premiums
to be
Collected (1)
 
Future
Premiums to
be Earned Net of
Reinsurance (1)
Three months ended:
 
 
 
December 31, 2019
$
11,888

 
$
10,507

Twelve months ended:
 
 
 
December 31, 2020
41,442

 
40,407

December 31, 2021
35,601

 
36,938

December 31, 2022
35,292

 
34,531

December 31, 2023
33,792

 
32,345

Five years ended:
 
 
 
December 31, 2028
147,828

 
135,566

December 31, 2033
108,291

 
90,347

December 31, 2038
57,282

 
46,459

December 31, 2043
24,772

 
16,205

December 31, 2048
11,298

 
6,637

December 31, 2053
2,251

 
1,314

December 31, 2058
31

 
20

Total
$
509,768

 
$
451,276

(1)
Future premiums to be collected are undiscounted and are used to derive the discounted premium receivable asset recorded on Ambac's balance sheet. Future premiums to be earned, net of reinsurance relate to the unearned premiums liability and deferred ceded premium asset recorded on Ambac’s balance sheet. The use of contractual lives for many bond types which do not have homogeneous pools of underlying collateral is required in the calculation of the premium receivable, as further described in Note 2. Basis of Presentation and Significant Accounting Policies in the Notes to Consolidated Financial Statements included in Ambac's Annual Report on Form 10-K for the year ended December 31, 2018. This results in a different premium receivable balance than if expected lives were considered. If installment paying policies are retired or prepay early, premiums reflected in the premium receivable asset and amounts reported in the above table for such policies may not be collected. Future premiums to be earned also considers the use of contractual lives for many bond types which do not have homogeneous pools of underlying collateral, which may result in different unearned premium than if expected lives were considered. If those bonds types are retired early, premium earnings may be negative in the period of call or refinancing.
Summary of Loss Reserve Roll-Forward, Net of Subrogation Recoverable and Reinsurance
Below is the loss and loss expense reserve roll-forward, net of subrogation recoverable and reinsurance, for the affected periods:
 
Nine Months Ended September 30,
 
2019
 
2018
Beginning gross loss and loss expense reserves
$
(106,882
)
 
$
4,113,802

Reinsurance recoverable
22,623

 
40,658

Beginning balance of net loss and loss expense reserves
(129,505
)
 
4,073,144

Losses and loss expenses (benefit):
 
 
 
Current year
659

 
976

Prior years
(84,593
)
 
(182,291
)
Total (1) (2) (3)
(83,934
)
 
(181,315
)
Loss and loss expenses paid (recovered):
 
 
 
Current year
32

 
143

Prior years (3)
298,909

 
3,937,561

Total
298,941

 
3,937,704

Foreign exchange effect
(1,174
)
 
(9,578
)
Ending net loss and loss expense reserves
(513,554
)
 
(55,453
)
Impact of VIE consolidation
(72,159
)
 
—

Reinsurance recoverable (4)
25,749

 
25,326

Ending gross loss and loss expense reserves
$
(559,964
)
 
$
(30,127
)

(1)
Total losses and loss expenses (benefit) includes $(5,999) and $(123) for the nine months ended September 30, 2019 and 2018, respectively, related to ceded reinsurance.
(2)
Ambac records the impact of estimated recoveries related to securitized loans in RMBS transactions that breached certain representations and warranties ("R&W"s) by transaction sponsors within losses and loss expenses (benefit). The losses and loss expense (benefit) incurred associated with changes in estimated R&Ws for the nine months ended September 30, 2019 and 2018 was $15,365 and $56,928, respectively.
(3)
On February 12, 2018, Deferred Amounts and Interest Accrued on Deferred Amounts in the amount of $3,000,158 and $856,834, respectively were settled in connection with the Rehabilitation Exit Transactions. 2018 includes a $288,204 loss and loss expense benefit on these settled Deferred Amounts.
(4)
Represents reinsurance recoverable on future loss and loss expenses. Additionally, the Balance Sheet line "Reinsurance recoverable on paid and unpaid losses" includes reinsurance recoverables (payables) of $287 and $185 as of September 30, 2019 and 2018, respectively, related to previously presented loss and loss expenses and subrogation.
Summary of Information Related to Policies Currently Included in Ambac's Loss Reserves or Subrogation Recoverable

The tables below summarize information related to policies currently included in Ambac’s loss and loss expense reserves or subrogation recoverable at September 30, 2019 and December 31, 2018. Gross par exposures include capital appreciation bonds which are reported at the par amount at the time of issuance of the insurance policy as opposed to the current accreted value of the bond. The weighted average risk-free rate used to discount loss reserves at September 30, 2019 and December 31, 2018 was 1.8% and 2.8%, respectively.
Surveillance Categories as of September 30, 2019
 
I
 
IA
 
II
 
III
 
IV
 
V
 
Total
Number of policies
34

 
20

 
11

 
17

 
136

 
3

 
221

Remaining weighted-average contract period (in years) (1)
8

 
18

 
10

 
17

 
15

 
3

 
15

Gross insured contractual payments outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
$
748,982

 
$
649,596

 
$
137,345

 
$
900,525

 
$
3,890,338

 
$
37,962

 
$
6,364,748

Interest
371,462

 
582,864

 
74,611

 
398,722

 
1,692,337

 
12,413

 
3,132,409

Total
$
1,120,444

 
$
1,232,460

 
$
211,956

 
$
1,299,247

 
$
5,582,675

 
$
50,375

 
$
9,497,157

Gross undiscounted claim liability
$
2,037

 
$
53,685

 
$
12,569

 
$
523,533

 
$
1,710,357

 
$
50,343

 
$
2,352,524

Discount, gross claim liability
(144
)
 
(5,129
)
 
(894
)
 
(134,783
)
 
(343,293
)
 
(2,090
)
 
(486,333
)
Gross claim liability before all subrogation and before reinsurance
1,893

 
48,556

 
11,675

 
388,750

 
1,367,064

 
48,253

 
1,866,191

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross RMBS subrogation (2)
—

 
—

 
—

 
—

 
(1,784,421
)
 
—

 
(1,784,421
)
Discount, RMBS subrogation
—

 
—

 
—

 
—

 
29,477

 
—

 
29,477

Discounted RMBS subrogation, before reinsurance
—

 
—

 
—

 
—

 
(1,754,944
)
 
—

 
(1,754,944
)
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross other subrogation (3)
(21
)
 
—

 
—

 
(41,723
)
 
(682,464
)
 
(12,758
)
 
(736,966
)
Discount, other subrogation
2

 
—

 
—

 
3,812

 
41,743

 
2,519

 
48,076

Discounted other subrogation, before reinsurance
(19
)
 
—

 
—

 
(37,911
)
 
(640,721
)
 
(10,239
)
 
(688,890
)
Gross claim liability, net of all subrogation and discounts, before reinsurance
1,874

 
48,556

 
11,675

 
350,839

 
(1,028,601
)
 
38,014

 
(577,643
)
Less: Unearned premium revenue
(1,405
)
 
(9,307
)
 
(840
)
 
(7,902
)
 
(35,854
)
 
(164
)
 
(55,472
)
Plus: Loss expense reserves
837

 
341

 
975

 
5,236

 
65,762

 
—

 
73,151

Gross loss and loss expense reserves
$
1,306

 
$
39,590

 
$
11,810

 
$
348,173

 
$
(998,693
)
 
$
37,850

 
$
(559,964
)
Reinsurance recoverable reported on Balance Sheet (4)
$
140

 
$
9,417

 
$
3,962

 
$
23,604

 
$
(11,087
)
 
$
—

 
$
26,036

 
(1)
Remaining weighted-average contract period is weighted based on projected gross claims over the lives of the respective policies.
(2)
RMBS subrogation represents Ambac’s estimate of subrogation recoveries from RMBS transaction sponsors for R&W breaches.
(3)
Other subrogation represents subrogation related to excess spread and other contractual cash flows on public finance and structured finance transactions, including RMBS.
(4)
Reinsurance recoverable reported on the Balance Sheet includes reinsurance recoverables of $25,749 related to future loss and loss expenses and $287 related to presented loss and loss expenses and subrogation.
Surveillance Categories as of December 31, 2018
 
I
 
IA
 
II
 
III
 
IV
 
V
 
Total
Number of policies
21

 
28

 
18

 
16

 
145

 
3

 
231

Remaining weighted-average contract period (in years) (1)
9

 
19

 
9

 
22

 
14

 
3

 
16

Gross insured contractual payments outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
$
916,530

 
$
708,249

 
$
622,820

 
$
1,705,464

 
$
5,407,202

 
$
43,140

 
$
9,403,405

Interest
487,702

 
631,708

 
293,293

 
6,979,130

 
2,177,539

 
13,401

 
10,582,773

Total
$
1,404,232

 
$
1,339,957

 
$
916,113

 
$
8,684,594

 
$
7,584,741

 
$
56,541

 
$
19,986,178

Gross undiscounted claim liability
$
4,019

 
$
63,712

 
$
36,000

 
$
992,019

 
$
2,295,968

 
$
56,510

 
$
3,448,228

Discount, gross claim liability
(481
)
 
(13,008
)
 
(3,069
)
 
(433,709
)
 
(637,548
)
 
(4,143
)
 
(1,091,958
)
Gross claim liability before all subrogation and before reinsurance
3,538

 
50,704

 
32,931

 
558,310

 
1,658,420

 
52,367

 
2,356,270

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross RMBS subrogation (2)
—

 
—

 
—

 
—

 
(1,809,937
)
 
—

 
(1,809,937
)
Discount, RMBS subrogation
—

 
—

 
—

 
—

 
39,391

 
—

 
39,391

Discounted RMBS subrogation, before reinsurance
—

 
—

 
—

 
—

 
(1,770,546
)
 
—

 
(1,770,546
)
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross other subrogation (3)
—

 
(10,816
)
 
—

 
(136,541
)
 
(624,654
)
 
(12,880
)
 
(784,891
)
Discount, other subrogation
—

 
7,318

 
—

 
67,008

 
55,088

 
3,774

 
133,188

Discounted other subrogation, before reinsurance
—

 
(3,498
)
 
—

 
(69,533
)
 
(569,566
)
 
(9,106
)
 
(651,703
)
Gross claim liability, net of all subrogation and discounts, before reinsurance
3,538

 
47,206

 
32,931

 
488,777

 
(681,692
)
 
43,261

 
(65,979
)
Less: Unearned premium revenue
(943
)
 
(10,073
)
 
(5,085
)
 
(36,365
)
 
(53,987
)
 
(209
)
 
(106,662
)
Plus: Loss expense reserves
1,369

 
4,253

 
2,564

 
(5,926
)
 
63,499

 
—

 
65,759

Gross loss and loss expense reserves
$
3,964

 
$
41,386

 
$
30,410

 
$
446,486

 
$
(672,180
)
 
$
43,052

 
$
(106,882
)
Reinsurance recoverable reported on Balance Sheet (4)
$
367

 
$
7,285

 
$
4,223

 
$
26,096

 
$
(14,838
)
 
$
—

 
$
23,133

(1)
Remaining weighted-average contract period is weighted based on projected gross claims over the lives of the respective policies.
(2)
RMBS subrogation represents Ambac’s estimate of subrogation recoveries from RMBS transaction sponsors for R&W breaches.
(3)
Other subrogation represents subrogation related to excess spread and other contractual cash flows on public finance and structured finance transactions, including RMBS.
(4)
Reinsurance recoverable reported on Balance Sheet includes reinsurance recoverables of $22,623 related to future loss and loss expenses and $510 related
to presented loss and loss expenses and subrogation.
Summary of Rollforward of RMBS Subrogation, by Estimation Approach
Below is the rollforward of R&W subrogation for the affected periods:
 
Nine Months Ended September 30,
 
2019
 
2018
Discounted R&W subrogation (gross of reinsurance) at beginning of period
$
1,770,546

 
$
1,834,387

Changes recognized during the period:
 
 
 
Impact of sponsor actions (1)
—

 
—

All other changes (2)
(15,602
)
 
(58,139
)
Discounted R&W subrogation (gross of reinsurance) at end of period
$
1,754,944

 
$
1,776,248

(1)
Sponsor actions include loan repurchases, direct payments to Ambac and other contributions from sponsors.
(2)
All other changes which may impact RMBS R&W subrogation recoveries include changes in actual or projected collateral performance, changes in the creditworthiness of a sponsor and/or the projected timing of recoveries.
Insurance Intangible Asset [Member]  
Insurance [Line Items]  
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]
The estimated future amortization expense for the net insurance intangible asset is as follows:
Amortization expense (1)
 
 
2019 (three months)
 
$
11,918

2020
 
44,390

2021
 
39,019

2022
 
35,425

2023
 
32,266

Thereafter
 
270,506

(1)  
Future amortization considers the use of contractual lives for many bond types which do not have homogeneous pools of underlying collateral. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay certain obligations. If those bonds types are retired early, amortization expense may differ in the period of call or refinancing.