WISCONSIN | 39-1486475 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
MGIC PLAZA, 250 EAST KILBOURN AVENUE, | ||
MILWAUKEE, WISCONSIN | 53202 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class: | Common Stock, Par Value $1 Per Share | |
Common Share Purchase Rights | ||
Name of Each Exchange on Which | ||
Registered: | New York Stock Exchange |
Title of Class: | None |
Large accelerated filer ☒ | Accelerated filer ☐ |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
Document | Part and Item Number of Form 10-K Into Which Incorporated* | |
Proxy Statement for the 2015 Annual Meeting of Shareholders | Items 10 through 14 of Part III |
PART I | |||
Item 1. | |||
Item 1A. | |||
Item 1B. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
PART II | |||
Item 5. | |||
Item 6. | |||
Item 7. | |||
Item 7A. | |||
Item 8. | |||
Item 9. | |||
Item 9A. | |||
Item 9B. | |||
PART III | |||
Item 10. | |||
Item 11. | |||
Item 12. | |||
Item 13. | |||
Item 14. | |||
PART IV | |||
Item 15. | |||
EX-10.2.14 | |||
EX-10.2.15 | |||
EX-10.6 | |||
EX-21 | |||
EX-23 | |||
EX-31.1 | |||
EX-31.2 | |||
EX-32 | |||
EX-99.26 |
• | Increased new insurance written from $33.4 billion in 2014 to $43.0 billion in 2015. The new insurance written is consistent with the Company's risk and return goals and increased insurance in force by 6% year-over-year. |
• | Successfully renegotiated external reinsurance transaction in a manner that affords it full credit under the revised private mortgage insurer eligibility requirements ("PMIERs") of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) for risk ceded under the transaction. |
• | Met the revised financial requirements of the PMIERs by their effective date with a comfortable cushion. |
• | Worked with the private mortgage insurance industry to influence changes to the draft PMIERs before they became effective. |
• | Maintained our traditionally low expense base. |
• | Successfully transitioned key senior executive roles, including Chief Executive Officer and Chief Risk Officer. |
• | Whether competition from other mortgage insurers, the FHA and the VA will result in a loss of our market share, a decrease in our revenues as a result of price competition or an increase in our losses as a result of the effects of competition on underwriting guidelines. |
• | Whether private mortgage insurance will remain a significant credit enhancement alternative for low down payment single family mortgages. An increase in the use of alternatives to private mortgage insurance, such as credit-linked note transactions executed in the capital markets, or a possible restructuring or change in the charters of the GSEs, could significantly affect our business. |
December 31, | |||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
(In billions) | |||||||||||||||||||
Direct Primary Insurance In Force | $ | 174.5 | $ | 164.9 | $ | 158.7 | $ | 162.1 | $ | 172.9 | |||||||||
Direct Primary Risk In Force | $ | 45.5 | $ | 42.9 | $ | 41.1 | $ | 41.7 | $ | 44.5 |
Top 10 Jurisdictions | |||
California | 7.8 | % | |
Florida | 6.3 | % | |
Texas | 6.3 | % | |
Pennsylvania | 5.2 | % | |
Ohio | 4.8 | % | |
Illinois | 4.1 | % | |
Michigan | 3.7 | % | |
New York | 3.4 | % | |
Georgia | 3.3 | % | |
Washington | 3.3 | % | |
Total | 48.2 | % |
Top 10 Core-Based Statistical Areas | |||
Chicago-Naperville-Arlington Heights | 2.7 | % | |
Atlanta-Sandy Springs-Roswell | 2.4 | % | |
Minneapolis-St. Paul-Bloomington | 2.0 | % | |
Houston-Woodlands-Sugar Land | 2.0 | % | |
Washington-Arlington-Alexandria | 1.9 | % | |
Philadelphia | 1.9 | % | |
Los Angeles-Long Beach-Glendale | 1.8 | % | |
Portland-Vancouver-Hillsboro | 1.5 | % | |
Denver-Aurora-Lakewood | 1.4 | % | |
Seattle-Bellevue-Everett | 1.4 | % | |
Total | 19.0 | % |
Insurance in Force | Risk in Force | ||||||||||||
Policy Year | Total (In millions) | Percent of Total | Total (In millions) | Percent of Total | |||||||||
2004 and prior | $ | 7,933 | 4.5 | % | $ | 2,251 | 5.0 | % | |||||
2005 | 6,855 | 3.9 | % | 1,952 | 4.3 | % | |||||||
2006 | 11,358 | 6.5 | % | 3,103 | 6.8 | % | |||||||
2007 | 24,712 | 14.2 | % | 6,357 | 14.0 | % | |||||||
2008 | 12,944 | 7.4 | % | 3,268 | 7.2 | % | |||||||
2009 | 3,419 | 2.0 | % | 783 | 1.7 | % | |||||||
2010 | 2,783 | 1.6 | % | 755 | 1.7 | % | |||||||
2011 | 4,301 | 2.4 | % | 1,160 | 2.5 | % | |||||||
2012 | 12,315 | 7.1 | % | 3,298 | 7.3 | % | |||||||
2013 | 19,224 | 11.0 | % | 5,092 | 11.2 | % | |||||||
2014 | 28,574 | 16.4 | % | 7,333 | 16.1 | % | |||||||
2015 | 40,096 | 23.0 | % | 10,110 | 22.2 | % | |||||||
Total | $ | 174,514 | 100.0 | % | $ | 45,462 | 100.0 | % |
December 31, 2015 | December 31, 2014 | ||||||
Primary Risk in Force (In Millions): | $ | 45,462 | $ | 42,946 | |||
Loan-to-value ratios:(1) | |||||||
95.01% and above | 16.2 | % | 18.7 | % | |||
90.01-95% | 48.0 | % | 44.5 | % | |||
85.01-90% | 29.8 | % | 30.4 | % | |||
80.01-85% | 4.5 | % | 4.6 | % | |||
80% and below | 1.5 | % | 1.8 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Loan Type: | |||||||
Fixed(2) | 96.4 | % | 95.9 | % | |||
Adjustable rate mortgages (“ARMs”)(3) | 3.6 | % | 4.1 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Original Insured Loan Amount:(4) | |||||||
Conforming loan limit and below | 96.0 | % | 96.1 | % | |||
Non-conforming | 4.0 | % | 3.9 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Mortgage Term: | |||||||
15-years and under | 2.7 | % | 3.1 | % | |||
Over 15 years | 97.3 | % | 96.9 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Property Type: | |||||||
Single-family detached | 87.4 | % | 87.0 | % | |||
Condominium/Townhouse/Other attached | 11.9 | % | 12.3 | % | |||
Other(5) | 0.7 | % | 0.7 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Occupancy Status: | |||||||
Owner occupied | 96.8 | % | 96.4 | % | |||
Second home | 2.2 | % | 2.3 | % | |||
Investor property | 1.0 | % | 1.3 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Documentation: | |||||||
Reduced documentation(6) | 3.9 | % | 4.8 | % | |||
Full documentation | 96.1 | % | 95.2 | % | |||
Total | 100.0 | % | 100.0 | % | |||
FICO Score:(7) | |||||||
Prime (FICO 620 and above) | 95.1 | % | 94.4 | % | |||
A Minus (FICO 575 – 619) | 3.5 | % | 4.3 | % | |||
Subprime (FICO below 575) | 1.4 | % | 1.3 | % | |||
Total | 100.0 | % | 100.0 | % |
(1) | Loan-to-value ratio represents the ratio (expressed as a percentage) of the dollar amount of the first mortgage loan to the value of the property at the time the loan became insured and does not reflect subsequent housing price appreciation or depreciation. Subordinate mortgages may also be present. |
(2) | Includes fixed rate mortgages with temporary buydowns (where in effect the applicable interest rate is typically reduced by one or two percentage points during the first two years of the loan), ARMs in which the initial interest rate is fixed for at least five years and balloon payment mortgages (a loan with a maturity, typically five to seven years, that is shorter than the loan’s amortization period). |
(3) | Includes ARMs where payments adjust fully with interest rate adjustments. Also includes pay option ARMs and other ARMs with negative amortization features, which collectively at December 31, 2015 and 2014, represented 0.7% and 0.9%, respectively, of primary risk in force. As indicated in note (2), does not include ARMs in which the initial interest rate is fixed for at least five years. As of December 31, 2015 and 2014, ARMs with loan-to-value ratios in excess of 90% represented 0.7% and 0.9%, respectively, of primary risk in force. |
(4) | Loans within the conforming loan limit have an original principal balance that does not exceed the maximum original principal balance of loans that the GSEs are eligible to purchase. The conforming loan limit, for one unit properties, is subject to annual adjustment and was $417,000 for 2007 and early 2008; this amount was temporarily increased to up to $729,500 in the most costly communities in early 2008 and remained at such level through September 30, 2011. The limit was decreased to $417,000 although it remains $625,500 in high cost communities for loans originated after September 30, 2011. Non-conforming loans are loans with an original principal balance above the conforming loan limit. |
(5) | Includes cooperatives and manufactured homes deemed to be real estate. |
(6) | Reduced documentation loans, many of which are commonly referred to as “Alt-A” loans, are originated under programs in which there is a reduced level of verification or disclosure compared to traditional mortgage loan underwriting, including programs in which the borrower’s income and/or assets are disclosed in the loan application but there is no verification of those disclosures and programs in which there is no disclosure of income or assets in the loan application. In accordance with industry practice, loans approved by GSE and other automated underwriting (AU) systems under “doc waiver” programs that did not require verification of borrower income are classified by us as “full documentation.” Based in part on information provided by the GSEs, we estimate full documentation loans of this type were approximately 4% of 2007 new insurance written. Information for other periods is not available. We understand these AU systems granted such doc waivers for loans they judged to have higher credit quality. We also understand that the GSEs terminated their “doc waiver” programs in the second half of 2008. |
(7) | Represents the FICO score at loan origination. The weighted average “decision FICO score” at loan origination for new insurance written in 2015 and 2014 was 744 and 743, respectively. The FICO score for a loan with multiple borrowers is the lowest of the borrowers’ decision FICO scores. A borrower’s “decision FICO score” is determined as follows: if there are three FICO scores available, the middle FICO score is used; if two FICO scores are available, the lower of the two is used; if only one FICO score is available, it is used. A FICO score is a score based on a borrower’s credit history generated by a model developed by Fair Isaac Corporation. |
• | the borrower’s credit profile, including the borrower’s credit history, debt-to-income ratios and cash reserves, and the willingness of a borrower with sufficient resources to make mortgage payments when the mortgage balance exceeds the value of the home; |
• | the loan product, which encompasses the loan-to-value ratio, the type of loan instrument, including whether the instrument provides for fixed or variable payments and the amortization schedule, the type of property and the purpose of the loan; |
• | origination practices of lenders and the percentage of coverage on insured loans; |
• | the size of insured loans; and |
• | the condition of the economy, including the direction of change in housing values and employment, in the area in which the property is located. |
• | for loans to borrowers with lower FICO scores compared to loans to borrowers with higher FICO scores; |
• | for loans with less than full underwriting documentation compared to loans with full underwriting documentation; |
• | during periods of economic contraction and housing price depreciation, including when these conditions may not be nationwide, compared to periods of economic expansion and housing price appreciation; |
• | for loans with higher loan-to-value ratios compared to loans with lower loan-to-value ratios; |
• | for ARMs when the reset interest rate significantly exceeds the interest rate at the time of loan origination; |
• | for loans that permit the deferral of principal amortization compared to loans that require principal amortization with each monthly payment; |
• | for loans in which the original loan amount exceeds the conforming loan limit compared to loans below that limit; and |
• | for cash out refinance loans compared to rate and term refinance loans. |
December 31, | ||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||
PRIMARY INSURANCE | ||||||||||||||
Insured loans in force | 992,188 | 968,748 | 960,163 | 1,006,346 | 1,090,086 | |||||||||
Loans in default (1) | 62,633 | 79,901 | 103,328 | 139,845 | 175,639 | |||||||||
Default rate – all loans | 6.3 | % | 8.3 | % | 10.8 | % | 13.9 | % | 16.1 | % | ||||
Prime loans in default (2) | 40,214 | 50,307 | 65,724 | 90,270 | 112,403 | |||||||||
Default rate – prime loans | 4.5 | % | 5.8 | % | 7.8 | % | 10.4 | % | 12.2 | % | ||||
A-minus loans in default (2) | 10,451 | 13,021 | 16,496 | 20,884 | 25,989 | |||||||||
Default rate – A-minus loans | 25.7 | % | 27.6 | % | 30.4 | % | 32.9 | % | 35.1 | % | ||||
Subprime loans in default (2) | 4,080 | 5,228 | 6,391 | 7,668 | 9,326 | |||||||||
Default rate – subprime loans | 31.2 | % | 35.2 | % | 38.7 | % | 40.8 | % | 43.6 | % | ||||
Reduced documentation loans delinquent (3) | 7,888 | 11,345 | 14,717 | 21,023 | 27,921 | |||||||||
Default rate – reduced doc loans | 22.0 | % | 27.1 | % | 30.4 | % | 35.2 | % | 38.0 | % | ||||
POOL INSURANCE | ||||||||||||||
Insured loans in force (4) | 52,189 | 62,869 | 87,584 | 119,061 | 374,228 | |||||||||
Loans in default | 2,739 | 3,797 | 6,563 | 8,594 | 32,971 | |||||||||
Default rate | 5.3 | % | 6.0 | % | 7.5 | % | 7.2 | % | 8.8 | % |
(1) | At December 31, 2015, 2014, 2013, 2011 and 2011, 2,769, 4,746, 6,948, 11,731 and 12,610 loans in default, respectively, were in our claims received inventory. |
(2) | We define prime loans as those having FICO scores of 620 or greater, A-minus loans as those having FICO scores of 575-619, and subprime credit loans as those having FICO scores of less than 575, all as reported to MGIC at the time a commitment to insure is issued. In this annual report we classify loans without complete documentation as “reduced documentation” loans regardless of FICO score rather than as prime, “A-” or “subprime” loans; in the table above, such loans appear only in the reduced documentation category and they do not appear in any of the other categories. |
(3) | In accordance with industry practice, loans approved by GSE and other automated underwriting (AU) systems under “doc waiver” programs that do not require verification of borrower income are classified by us as “full documentation.” Based in part on information provided by the GSEs, we estimate full documentation loans of this type were approximately 4% of 2007 new insurance written. Information for other periods is not available. We understand these AU systems granted such doc waivers for loans they judged to have higher credit quality. We also understand that the GSEs terminated their “doc waiver” programs in the second half of 2008. |
(4) | The number of loans insured under pool policies declined significantly from 2011 to 2012, partly due to the cancellation of certain pool policies due to the exhaustion of their aggregate loss limits. |
December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Florida | 10.1 | % | 17.7 | % | 27.5 | % | ||
Illinois | 7.1 | 10.3 | 14.3 | |||||
Maryland | 9.4 | 12.8 | 17.1 | |||||
New Jersey | 15.6 | 18.7 | 21.9 | |||||
California | 4.1 | 5.9 | 8.2 | |||||
Pennsylvania | 6.5 | 8.3 | 10.1 | |||||
New York | 12.7 | 15.0 | 16.6 | |||||
Ohio | 5.2 | 6.5 | 8.5 | |||||
Washington | 4.0 | 5.6 | 8.3 | |||||
Georgia | 6.5 | 8.2 | 10.7 | |||||
Connecticut | 7.1 | 9.8 | 13.4 | |||||
Michigan | 4.1 | 5.5 | 7.4 | |||||
Virginia | 4.9 | 6.4 | 8.0 | |||||
Wisconsin | 3.8 | 5.1 | 6.3 | |||||
Massachusetts | 7.4 | 8.5 | 9.8 | |||||
All other jurisdictions | 5.7 | 7.0 | 8.9 |
Net paid claims (In millions) | |||||||||||
2015 | 2014 | 2013 | |||||||||
Prime (FICO 620 & >) | $ | 510 | $ | 755 | $ | 1,163 | |||||
A-Minus (FICO 575-619) | 96 | 124 | 179 | ||||||||
Subprime (FICO < 575) | 37 | 38 | 50 | ||||||||
Reduced doc (All FICOs) (1) | 134 | 157 | 219 | ||||||||
Pool (2) | 68 | 84 | 104 | ||||||||
Other (3) | 5 | 1 | 107 | ||||||||
Direct losses paid | $ | 850 | $ | 1,159 | $ | 1,822 | |||||
Reinsurance | (23 | ) | (34 | ) | (61 | ) | |||||
Net losses paid | $ | 827 | $ | 1,125 | $ | 1,761 | |||||
LAE | 22 | 29 | 36 | ||||||||
Net losses and LAE before terminations | $ | 849 | $ | 1,154 | $ | 1,797 | |||||
Reinsurance terminations | (15 | ) | — | (3 | ) | ||||||
Net losses and LAE paid | $ | 834 | $ | 1,154 | $ | 1,794 |
(1) | In this annual report we classify loans without complete documentation as “reduced documentation” loans regardless of FICO score rather than as prime, “A-” or “subprime” loans; in the table above, such loans appear only in the reduced documentation category and they do not appear in any of the other categories. |
(2) | Each of 2015, 2014 and 2013 includes $42 million paid under the terms of the settlement with Freddie Mac as discussed under Note 9 – “Loss Reserves” to our consolidated financial statements in Item 8. |
(3) | 2013 includes $105 million associated with the implementation of the Countrywide settlement as discussed in Note 20 – “Litigation and Contingencies” to our consolidated financial statements in Item 8. |
U.S. government securities | No limit | |
Pre-refunded municipals escrowed in Treasury securities | No limit | |
U.S. government agencies (in total)(1) | 15% of portfolio market value | |
Securities rated “AA” or “AAA” | 3% of portfolio market value | |
Securities rated “BBB” or “A” | 2% of portfolio market value | |
Foreign governments & foreign domiciled securities (in total) | 10% of portfolio market value | |
Individual AAA rated foreign countries | 3% of portfolio market value | |
Individual below AAA rated foreign countries | 1% of portfolio market value |
(1) | As used with respect to our investment portfolio, U.S. government agencies include GSEs (which, in the sector table below are included as part of U.S. Treasuries) and Federal Home Loan Banks. |
Percentage of Portfolio’s Fair Value | ||
1. Corporate | 46.3 | % |
2. Tax-Exempt Municipals | 20.6 | |
3. Taxable Municipals | 16.2 | |
4. GNMA Pass-through Certificates | 5.5 | |
5. Asset Backed | 5.5 | |
6. U.S. Treasuries | 3.4 | |
7. Escrowed/Prerefunded Municipals | 1.6 | |
8. Foreign Debt | 0.7 | |
9. Other | 0.2 | |
100.0 | % |
Fair Value (In thousands) | |||
1. New York State Dormitory Authority Rev | $ | 56,752 | |
2. JP Morgan Chase | 47,293 | ||
3. Goldman Sachs Group Inc | 42,050 | ||
4. Wells Fargo & Co | 41,004 | ||
5. Morgan Stanley | 36,139 | ||
6. New York, NY | 35,584 | ||
7. Chicago Airport Rev | 34,666 | ||
8. Bear Stearns Commercial Mortgage | 34,118 | ||
9. Metropolitan Transit Authority New York | 32,464 | ||
10. Citigroup Inc | 32,057 | ||
$ | 392,127 |
• | Arch Mortgage Insurance Company, |
• | Essent Guaranty, Inc., |
• | Genworth Mortgage Insurance Corporation, |
• | National Mortgage Insurance Corporation, |
• | Radian Guaranty Inc., and |
• | United Guaranty Residential Insurance Company. |
• | lenders using FHA, VA and other government mortgage insurance programs, |
• | lenders and other investors holding mortgages in portfolio and self-insuring, |
• | investors (including the GSEs) using risk mitigation techniques other than private mortgage insurance, such as obtaining insurance from non-mortgage insurers and engaging in credit-linked note transactions executed in the capital markets; using other risk mitigation techniques in conjunction with reduced levels of private mortgage insurance coverage; or accepting credit risk without credit enhancement, and |
• | lenders originating mortgages using piggyback structures to avoid private mortgage insurance, such as a first mortgage with an 80% loan-to-value ratio and a second mortgage with a 10%, 15% or 20% loan-to-value ratio (referred to as 80-10-10, 80-15-5 or 80-20 loans, respectively) rather than a first mortgage with a 90%, 95% or 100% loan-to-value ratio that has private mortgage insurance. |
• | the level of private mortgage insurance coverage, subject to the limitations of the GSEs’ charters (which may be changed by federal legislation), when private mortgage insurance is used as the required credit enhancement on low down payment mortgages, |
• | the amount of loan level price adjustments and guaranty fees (which result in higher costs to borrowers) that the GSEs assess on loans that require mortgage insurance, |
• | whether the GSEs influence the mortgage lender’s selection of the mortgage insurer providing coverage and, if so, any transactions that are related to that selection, |
• | the underwriting standards that determine what loans are eligible for purchase by the GSEs, which can affect the quality of the risk insured by the mortgage insurer and the availability of mortgage loans, |
• | the terms on which mortgage insurance coverage can be canceled before reaching the cancellation thresholds established by law, |
• | the programs established by the GSEs intended to avoid or mitigate loss on insured mortgages and the circumstances in which mortgage servicers must implement such programs, |
• | the terms that the GSEs require to be included in mortgage insurance policies for loans that they purchase, |
• | the extent to which the GSEs intervene in mortgage insurers’ rescission practices or rescission settlement practices with lenders. For additional information, see our risk factor titled “We are involved in legal proceedings and are subject to the risk of additional legal proceedings in the future,” and |
• | the maximum loan limits of the GSEs in comparison to those of the FHA and other investors. |
• | The GSEs may reduce the amount of credit they allow under the PMIERs for the risk ceded under our quota share reinsurance transaction. The GSEs’ ongoing approval of that transaction is subject to several conditions and the transaction will be reviewed under the PMIERs at least annually by the GSEs. For more information about the transaction, see our risk factor titled “The mix of business we write affects the likelihood of losses occurring, our Minimum Required Assets under the PMIERs, and our premium yields.” |
• | The GSEs could make the PMIERs more onerous in the future; in this regard, the PMIERs provide that the tables of factors that determine Minimum Required Assets will be updated every two years and may be updated more frequently to reflect changes in macroeconomic conditions or loan performance. The GSEs will provide notice 180 days prior to the effective date of table updates. In addition, the GSEs may amend the PMIERs at any time. |
• | Our future operating results may be negatively impacted by the matters discussed in the rest of these risk factors. Such matters could decrease our revenues, increase our losses or require the use of assets, thereby creating a shortfall in Available Assets. |
• | Should additional capital be needed by MGIC in the future, additional capital contributions from our holding company may not be available due to competing demands on holding company resources, including for repayment of debt. |
• | restrictions on mortgage credit due to more stringent underwriting standards, liquidity issues and risk-retention requirements associated with non-QRM loans affecting lenders, |
• | the level of home mortgage interest rates and the deductibility of mortgage interest for income tax purposes, |
• | the health of the domestic economy as well as conditions in regional and local economies and the level of consumer confidence, |
• | housing affordability, |
• | population trends, including the rate of household formation, |
• | the rate of home price appreciation, which in times of heavy refinancing can affect whether refinanced loans have loan-to-value ratios that require private mortgage insurance, and |
• | government housing policy encouraging loans to first-time homebuyers. |
Name and Age | Title | |
Patrick Sinks, 59 | President and Chief Executive Officer of MGIC Investment Corporation and MGIC; Director of MGIC Investment Corporation and MGIC | |
Timothy J. Mattke, 40 | Executive Vice President and Chief Financial Officer of MGIC Investment Corporation and MGIC | |
Jeffrey H. Lane, 66 | Executive Vice President, General Counsel and Secretary of MGIC Investment Corporation and MGIC | |
Stephen C. Mackey, 55 | Executive Vice President and Chief Risk Officer of MGIC Investment Corporation and MGIC | |
Gregory A. Chi, 55 | Senior Vice President–Information Services and Chief Information Officer of MGIC | |
James J. Hughes, 53 | Senior Vice President – Sales and Business Development of MGIC |
2015 | 2014 | ||||||||||||
Quarter | High | Low | High | Low | |||||||||
First | $ | 9.96 | 8.00 | $ | 9.46 | 7.92 | |||||||
Second | 11.55 | 9.47 | 9.50 | 7.65 | |||||||||
Third | 11.72 | 9.07 | 9.50 | 7.16 | |||||||||
Fourth | 10.05 | 8.72 | 9.67 | 7.27 |
As of and for the Years Ended December 31, | ||||||||||||||||||||
(In thousands, except per share data) | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
Summary of Operations | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Net premiums written | $ | 1,020,277 | $ | 881,962 | $ | 923,481 | $ | 1,017,832 | $ | 1,064,380 | ||||||||||
Net premiums earned | 896,222 | 844,371 | 943,051 | 1,033,170 | 1,123,835 | |||||||||||||||
Investment income, net | 103,741 | 87,647 | 80,739 | 121,640 | 201,270 | |||||||||||||||
Realized investment gains, net including net impairment losses | 28,361 | 1,357 | 5,731 | 195,409 | 142,715 | |||||||||||||||
Other revenue | 12,457 | 8,422 | 9,914 | 28,145 | 36,459 | |||||||||||||||
Total revenues | 1,040,781 | 941,797 | 1,039,435 | 1,378,364 | 1,504,279 | |||||||||||||||
Losses and expenses: | ||||||||||||||||||||
Losses incurred, net | 343,547 | 496,077 | 838,726 | 2,067,253 | 1,714,707 | |||||||||||||||
Change in premium deficiency reserve | (23,751 | ) | (24,710 | ) | (25,320 | ) | (61,036 | ) | (44,150 | ) | ||||||||||
Underwriting and other expenses | 164,366 | 146,059 | 192,518 | 201,447 | 214,750 | |||||||||||||||
Interest expense | 68,932 | 69,648 | 79,663 | 99,344 | 103,271 | |||||||||||||||
Total losses and expenses | 553,094 | 687,074 | 1,085,587 | 2,307,008 | 1,988,578 | |||||||||||||||
Income (loss) before tax | 487,687 | 254,723 | (46,152 | ) | (928,644 | ) | (484,299 | ) | ||||||||||||
(Benefit from) provision for income taxes (1) | (684,313 | ) | 2,774 | 3,696 | (1,565 | ) | 1,593 | |||||||||||||
Net income (loss) | $ | 1,172,000 | $ | 251,949 | $ | (49,848 | ) | $ | (927,079 | ) | $ | (485,892 | ) | |||||||
Weighted average common shares outstanding (2) | 468,039 | 413,547 | 311,754 | 201,892 | 201,019 | |||||||||||||||
Diluted income (loss) per share | $ | 2.60 | $ | 0.64 | $ | (0.16 | ) | $ | (4.59 | ) | $ | (2.42 | ) | |||||||
Dividends per share | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Balance sheet data | ||||||||||||||||||||
Total investments | $ | 4,663,206 | $ | 4,612,669 | $ | 4,866,819 | $ | 4,230,275 | $ | 5,823,647 | ||||||||||
Cash and cash equivalents | 181,120 | 197,882 | 332,692 | 1,027,625 | 995,799 | |||||||||||||||
Total assets | 5,879,545 | 5,266,434 | 5,601,390 | 5,574,324 | 7,216,230 | |||||||||||||||
Loss reserves | 1,893,402 | 2,396,807 | 3,061,401 | 4,056,843 | 4,557,512 | |||||||||||||||
Premium deficiency reserve | — | 23,751 | 48,461 | 73,781 | 134,817 | |||||||||||||||
Short- and long-term debt (3) | — | 61,918 | 82,773 | 99,910 | 170,515 | |||||||||||||||
Convertible senior notes | 833,503 | 845,000 | 845,000 | 345,000 | 345,000 | |||||||||||||||
Convertible junior debentures | 389,522 | 389,522 | 389,522 | 379,609 | 344,422 | |||||||||||||||
Shareholders' equity | 2,236,140 | 1,036,903 | 744,538 | 196,940 | 1,196,815 | |||||||||||||||
Book value per share | 6.58 | 3.06 | 2.20 | 0.97 | 5.95 |
(1) | In the third quarter of 2015 we reversed the valuation allowance against our deferred tax assets. See Note 14 – "Income Taxes" to our consolidated financial statements in Item 8 for a discussion of the reversal of the valuation allowance and impact on our consolidated financial statements. |
(2) | Includes dilutive shares in years with net income. See Note 3 – "Summary of Significant Accounting Policies" to our consolidated financial statements in Item 8 for a discussion of our Earnings Per Share. |
(3) | As discussed in Note 8 – "Debt" to our consolidated financial statements in Item 8, our 5.375% Senior Notes matured on November 1, 2015 and were repaid with cash at our holding company. |
Other data | |||||||||||||||
Years Ended December 31, | |||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||
New primary insurance written ($ millions) | 43,031 | 33,439 | 29,796 | 24,125 | 14,234 | ||||||||||
New primary risk written ($ millions) | 10,824 | 8,530 | 7,541 | 5,949 | 3,525 | ||||||||||
Insurance in force (at year-end) ($ millions) | |||||||||||||||
Direct primary insurance | 174,514 | 164,919 | 158,723 | 162,082 | 178,873 | ||||||||||
Risk in force (at year-end) ($ millions) | |||||||||||||||
Direct primary risk in force | 45,462 | 42,946 | 41,060 | 41,735 | 44,462 | ||||||||||
Direct pool risk in force | |||||||||||||||
With aggregate loss limits | 271 | 303 | 376 | 439 | 674 | ||||||||||
Without aggregate loss limits | 388 | 505 | 636 | 879 | 1,177 | ||||||||||
Primary loans in default ratios | |||||||||||||||
Policies in force | 992,188 | 968,748 | 960,163 | 1,006,346 | 1,090,086 | ||||||||||
Loans in default | 62,633 | 79,901 | 103,328 | 139,845 | 175,639 | ||||||||||
Percentage of loans in default | 6.31 | % | 8.25 | % | 10.76 | % | 13.90 | % | 16.11 | % | |||||
Insurance operating ratios (GAAP) (1) | |||||||||||||||
Loss ratio | 38.3 | % | 58.8 | % | 88.9 | % | 200.1 | % | 152.6 | % | |||||
Expense ratio | 14.9 | % | 14.7 | % | 18.6 | % | 15.2 | % | 16.0 | % | |||||
Risk-to-capital ratio (statutory) | |||||||||||||||
Mortgage Guaranty Insurance Corporation | 12.1:1 | 14.6:1 | 15.8:1 | 44.7:1 | 20.3:1 | ||||||||||
MGIC Indemnity Corporation | 3.6:1 | 1.1:1 | 1.3:1 | 1.2:1 | — | ||||||||||
Combined insurance companies | 13.6:1 | 16.4:1 | 18.4:1 | 47.8:1 | 22.2:1 |
(1) | The loss ratio is the ratio, expressed as a percentage of the sum of incurred losses and loss adjustment expenses to net premiums earned. The expense ratio is the ratio, expressed as a percentage, of the combined insurance operations underwriting expenses to net premium written. |
• | The GSEs may reduce the amount of credit they allow under the PMIERs for the risk ceded under our quota share reinsurance transaction. The GSEs’ ongoing approval of that transaction is subject to several conditions and the transaction will be reviewed under the PMIERs at least annually by the GSEs. For more information about the transaction, see our risk factor titled “The mix of business we write affects the likelihood of losses occurring, our Minimum Required Assets under the PMIERs, and our premium yields” in Item 1A. |
• | The GSEs could make the PMIERs more onerous in the future; in this regard, the PMIERs provide that the tables of factors that determine Minimum Required Assets will be updated every two years and may be updated more frequently to reflect changes in macroeconomic conditions or loan performance. The GSEs will provide notice 180 days prior to the effective date of table updates. In addition, the GSEs may amend the PMIERs at any time. |
• | Our future operating results may be negatively impacted by the matters discussed in our risk factors. Such matters could decrease our revenues, increase our losses or require the use of assets, thereby creating a shortfall in Available Assets. |
• | Should additional capital be needed by MGIC in the future, additional capital contributions from our holding company may not be available due to competing demands on holding company resources, including for repayment of debt. |
Policy Year | HARP (1) Modifications | HAMP Modifications | Other Modifications | |||
2003 and Prior | 10.9% | 17.3% | 14.6% | |||
2004 | 17.5% | 17.2% | 12.8% | |||
2005 | 23.2% | 17.9% | 12.7% | |||
2006 | 26.5% | 19.6% | 13.0% | |||
2007 | 36.5% | 19.3% | 8.3% | |||
2008 | 50.6% | 11.6% | 4.1% | |||
2009 | 24.1% | 1.3% | 1.0% | |||
2010 - 2015 | —% | 0.1% | —% | |||
Total | 12.6% | 6.6% | 3.6% |
(1) | Includes proprietary programs that are substantially the same as HARP. |
• | Premiums written and earned |
• | New insurance written, which increases insurance in force, and is the aggregate principal amount of the mortgages that are insured during a period. Many factors affect new insurance written, including the volume of low down payment home mortgage originations and competition to provide credit enhancement on those mortgages, including competition from the FHA, the VA, other mortgage insurers, GSE programs that may reduce or eliminate the demand for mortgage insurance and other alternatives to mortgage insurance. New insurance written does not include loans previously insured by us which are modified, such as loans modified under HARP. |
• | Cancellations, which reduce insurance in force. Cancellations due to refinancings are affected by the level of current mortgage interest rates compared to the mortgage coupon rates throughout the in force book. Cancellations due to refinancings are also affected by current home values compared to values when the loans in the in force book became insured and the terms on which mortgage credit is available. Cancellations also include rescissions, which require us to return any premiums received related to the rescinded policy, and policies cancelled due to claim payment, which require us to return any premium received from the date of default. Finally, cancellations are affected by home price appreciation, which can give homeowners the right to cancel the mortgage insurance on their loans. |
• | Premium rates, which are affected by product type, competitive pressures, the risk characteristics of the loans insured and the percentage of coverage on the loans. The substantial majority of our monthly mortgage insurance premiums are under a premium plan in which, for the first ten years of the policy, the amount of premium is determined by multiplying the initial premium rate by the original loan balance; thereafter, the premium declines because a lower premium rate is used for the remaining life of the policy. However, for loans that have utilized HARP, the initial ten-year period resets to begin as of the date of the HARP transaction. The remainder of our monthly premiums are under a premium plan in which premiums are determined by a fixed percentage of the loan’s amortizing balance over the life of the policy. |
• | Premiums ceded, net of a profit commission, under reinsurance agreements. See Note 11 – “Reinsurance” to our consolidated financial statements in Item 8 for a discussion of our reinsurance agreements. |
• | Investment income |
• | Losses incurred |
• | The state of the economy, including unemployment and housing values, each of which affects the likelihood that loans will become delinquent and whether loans that are delinquent cure their delinquency. The level of new delinquencies has historically followed a seasonal pattern, with new delinquencies in the first part of the year lower than new delinquencies in the latter part of the year, though this pattern can be affected by the state of the economy and local housing markets. |
• | The product mix of the in force book, with loans having higher risk characteristics generally resulting in higher delinquencies and claims. |
• | The size of loans insured, with higher average loan amounts tending to increase losses incurred. |
• | The percentage of coverage on insured loans, with deeper average coverage tending to increase incurred losses. |
• | Changes in housing values, which affect our ability to mitigate our losses through sales of properties with delinquent mortgages as well as borrower willingness to continue to make mortgage payments when the value of the home is below the mortgage balance. |
• | The rate at which we rescind policies. Our estimated loss reserves reflect mitigation from rescissions of policies and denials of claims. We collectively refer to such rescissions and denials as “rescissions” and variations of this term. |
• | The distribution of claims over the life of a book. Historically, the first few years after loans are originated are a period of relatively low claims, with claims increasing substantially for several years subsequent and then declining, although persistency (percentage of insurance remaining in force from one year prior), the condition of the economy, including unemployment and housing prices, and other factors can affect this pattern. For example, a weak economy or housing price declines can lead to claims from older books increasing, continuing at stable levels or experiencing a lower rate of decline. See further information under “Mortgage Insurance Earnings and Cash Flow Cycle” below. |
• | Losses ceded under reinsurance agreements. See Note 11 – “Reinsurance” to our consolidated financial statements in Item 8 for a discussion of our reinsurance agreements. |
• | Changes in premium deficiency reserve |
• | Underwriting and other expenses |
• | Interest expense |
2015 | 2014 | 2013 | |||||||||
Total Primary NIW (In billions) | $ | 43.0 | $ | 33.4 | $ | 29.8 | |||||
Refinance volume as a % of primary NIW | 19 | % | 13 | % | 26 | % |
(In billions) | 2015 | 2014 | 2013 | |||||||||
NIW | $ | 43.0 | $ | 33.4 | $ | 29.8 | ||||||
Cancellations | (33.4 | ) | (27.2 | ) | (33.2 | ) | ||||||
Change in primary insurance in force | $ | 9.6 | $ | 6.2 | $ | (3.4 | ) | |||||
Direct primary insurance in force as of December 31, | $ | 174.5 | $ | 164.9 | $ | 158.7 | ||||||
Direct primary risk in force as of December 31, | $ | 45.5 | $ | 42.9 | $ | 41.1 |
• | We receive the benefit of a profit commission through a reduction in the premiums we cede. The profit commission varies directly and inversely with the level of losses on a "dollar for dollar" basis and is eliminated at levels of losses that we do not expect to occur. This means that lower levels of losses result in a higher profit commission and less benefit from ceded losses; higher levels of losses result in more benefit from ceded losses and a lower profit commission (or for levels of losses we do not expect, its elimination). |
• | We receive the benefit of a ceding commission through a reduction in underwriting expenses equal to 20% of premiums ceded (before the effect of the profit commission). |
As of and For the Years Ended December 31, | ||||||||||||
(Dollars in thousands) | 2015 | 2014 | 2013 | |||||||||
New insurance written subject to quota share reinsurance agreements | 91 | % | 90 | % | 75 | % | ||||||
Insurance in force subject to quota share reinsurance agreements | 73 | % | 56 | % | 49 | % | ||||||
Insurance in force subject to captive reinsurance agreements | 3 | % | 5 | % | 7 | % | ||||||
2015 QSR Transaction (1) | ||||||||||||
Ceded premiums written, net of profit commission | $ | 52,588 | ||||||||||
% of direct premiums written | 5 | % | ||||||||||
Ceded premiums earned, net of profit commission | $ | 52,588 | ||||||||||
% of direct premiums earned | 5 | % | ||||||||||
Ceding commissions | $ | 20,582 | ||||||||||
Ceded risk in force | $ | 9,886,952 | ||||||||||
2013 QSR Transaction (1) | ||||||||||||
Ceded premiums written, net of profit commission | $ | (11,355 | ) | $ | 100,031 | $ | 49,672 | |||||
% of direct premiums written | (1 | )% | 10 | % | 5 | % | ||||||
Ceded premiums earned, net of profit commission | $ | 35,999 | $ | 88,528 | $ | 13,822 | ||||||
% of direct premiums earned | 4 | % | 9 | % | 1 | % | ||||||
Ceding commissions | $ | 10,234 | $ | 37,833 | $ | 10,408 | ||||||
Ceded risk in force | $ | — | $ | 8,229,173 | $ | 7,159,901 | ||||||
Captives | ||||||||||||
Ceded premiums written | $ | 13,547 | $ | 18,794 | $ | 23,815 | ||||||
% of direct premiums written | 1 | % | 2 | % | 2 | % | ||||||
Ceded premiums earned | $ | 13,650 | $ | 18,917 | $ | 23,956 | ||||||
% of direct premiums earned | 1 | % | 2 | % | 2 | % | ||||||
Risk in force subject to captives | 3 | % | 5 | % | 6 | % |
December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Total loans delinquent | 62,633 | 79,901 | 103,328 | |||||
Percentage of loans delinquent (default rate) | 6.31 | % | 8.25 | % | 10.76 | % | ||
Prime loans delinquent (1) | 40,214 | 50,307 | 65,724 | |||||
Percentage of prime loans delinquent (default rate) | 4.46 | % | 5.82 | % | 7.82 | % | ||
A-minus loans delinquent (1) | 10,451 | 13,021 | 16,496 | |||||
Percentage of A-minus loans delinquent (default rate) | 25.67 | % | 27.61 | % | 30.41 | % | ||
Subprime credit loans delinquent (1) | 4,080 | 5,228 | 6,391 | |||||
Percentage of subprime credit loans (default rate) | 31.22 | % | 35.20 | % | 38.70 | % | ||
Reduced documentation loans delinquent (2) | 7,888 | 11,345 | 14,717 | |||||
Percentage of reduced documentation loans delinquent (default rate) | 21.98 | % | 27.08 | % | 30.41 | % |
Gross Reserves | December 31, | ||||||||||
2015 | 2014 | 2013 | |||||||||
Primary: | |||||||||||
Direct loss reserves (in millions) | $ | 1,807 | $ | 2,246 | $ | 2,834 | |||||
Ending default inventory | 62,633 | 79,901 | 103,328 | ||||||||
Average direct reserve per default | $ | 28,859 | $ | 28,107 | $ | 27,425 | |||||
Primary claims received inventory included in ending default inventory | 2,769 | 4,746 | 6,948 | ||||||||
Pool (1): | |||||||||||
Direct loss reserves (in millions): | |||||||||||
With aggregate loss limits | $ | 34 | $ | 53 | $ | 82 | |||||
Without aggregate loss limits | 9 | 12 | 17 | ||||||||
Reserves related to Freddie Mac settlement (2) | 42 | 84 | 126 | ||||||||
Total pool direct loss reserves | $ | 85 | $ | 149 | $ | 225 | |||||
Ending default inventory: | |||||||||||
With aggregate loss limits | 2,126 | 3,020 | 5,496 | ||||||||
Without aggregate loss limits | 613 | 777 | 1,067 | ||||||||
Total pool ending default inventory | 2,739 | 3,797 | 6,563 | ||||||||
Pool claims received inventory included in ending default inventory | 60 | 99 | 173 | ||||||||
Other gross reserves (in millions) | $ | 1 | $ | 2 | $ | 2 |
(1) | Since a number of our pool policies include aggregate loss limits and/or deductibles, we do not disclose an average direct reserve per default for our pool business. |
(2) | See our Form 8-K filed with the Securities and Exchange Commission on November 30, 2012 for a discussion of our settlement with Freddie Mac regarding a pool policy. |
Primary Default Inventory by Region | ||||||||
Region | 2015 | 2014 | 2013 | |||||
Great Lakes | 7,486 | 9,329 | 12,049 | |||||
Mid-Atlantic | 3,523 | 4,416 | 5,469 | |||||
New England | 3,291 | 4,117 | 5,056 | |||||
North Central | 6,437 | 8,499 | 11,225 | |||||
Northeast | 10,973 | 13,152 | 15,223 | |||||
Pacific | 4,587 | 6,242 | 8,313 | |||||
Plains | 2,117 | 2,427 | 3,156 | |||||
South Central | 7,342 | 9,045 | 11,606 | |||||
Southeast | 16,877 | 22,674 | 31,231 | |||||
Total | 62,633 | 79,901 | 103,328 |
Primary Loss Reserves by Region (In millions) | |||||||||||
Region | 2015 | 2014 | 2013 | ||||||||
Great Lakes | $ | 127 | $ | 139 | $ | 206 | |||||
Mid-Atlantic | 101 | 123 | 123 | ||||||||
New England | 113 | 125 | 139 | ||||||||
North Central | 170 | 222 | 313 | ||||||||
Northeast | 433 | 446 | 417 | ||||||||
Pacific | 176 | 250 | 360 | ||||||||
Plains | 32 | 35 | 53 | ||||||||
South Central | 92 | 133 | 192 | ||||||||
Southeast | 437 | 641 | 849 | ||||||||
Total before IBNR and LAE | $ | 1,681 | $ | 2,114 | $ | 2,652 | |||||
IBNR and LAE | 126 | 132 | 182 | ||||||||
Total | $ | 1,807 | $ | 2,246 | $ | 2,834 |
Great Lakes: IN, KY, MI, OH | Pacific: CA, HI, NV, OR, WA |
Mid-Atlantic: DC, DE, MD, VA, WV | Plains: IA, ID, KS, MT, ND, NE, SD, WY |
New England: CT, MA, ME, NH, RI, VT | South Central: AK, AZ, CO, LA, NM, OK,TX, UT |
North Central: IL, MN, MO, WI | Southeast: AL, AR, FL, GA, MS, NC, SC, TN, Puerto Rico |
Northeast: NJ, NY, PA |
* | Jurisdictions in italics are those that predominately use a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed. |
Primary Average Claim | |||||||||||
2015 | 2014 | 2013* | |||||||||
Florida | $ | 59,433 | $ | 53,511 | $ | 53,647 | |||||
Illinois | 50,168 | 48,176 | 47,872 | ||||||||
Maryland | 77,789 | 66,140 | 71,754 | ||||||||
New Jersey | 74,491 | 74,257 | 73,321 | ||||||||
California | 83,699 | 82,630 | 84,862 | ||||||||
All other jurisdictions | 40,531 | 39,203 | 40,327 | ||||||||
All jurisdictions | $ | 48,248 | $ | 45,596 | $ | 46,375 |
Primary Average Loan Size | |||||||||||
2015 | 2014 | 2013 | |||||||||
Total insurance in force | $ | 175,890 | $ | 170,240 | $ | 165,310 | |||||
Prime (FICO 620 & >) | 178,690 | 172,990 | 167,660 | ||||||||
A-Minus (FICO 575-619) | 126,870 | 126,420 | 127,280 | ||||||||
Subprime (FICO < 575) | 116,690 | 117,310 | 118,510 | ||||||||
Reduced doc (All FICOs) (1) | 182,610 | 181,480 | 183,050 |
(1) | In this report we classify loans without complete documentation as "reduced documentation" loans regardless of FICO credit score rather than as prime, "A-" or "subprime" loans; in the table above, such loans appear only in the reduced documentation category and they do not appear in any of the other categories. |
Primary Average Loan Size | |||||||||||
2015 | 2014 | 2013 | |||||||||
Florida | $ | 184,620 | $ | 177,981 | $ | 172,869 | |||||
Illinois | 157,957 | 155,335 | 154,694 | ||||||||
Maryland | 243,505 | 239,875 | 236,840 | ||||||||
New Jersey | 244,473 | 240,846 | 239,189 | ||||||||
California | 286,181 | 283,228 | 282,660 | ||||||||
All other jurisdictions | 166,068 | 160,314 | 155,196 |
Net Paid Claims | ||||||||||||
(In millions) | 2015 | 2014 | 2013 | |||||||||
Prime (FICO 620 & >) | $ | 510 | $ | 755 | $ | 1,163 | ||||||
A-Minus (FICO 575-619) | 96 | 124 | 179 | |||||||||
Subprime (FICO < 575) | 37 | 38 | 50 | |||||||||
Reduced doc (All FICOs) (1) | 134 | 157 | 219 | |||||||||
Pool (2) | 68 | 84 | 104 | |||||||||
Other (3) | 5 | 1 | 107 | |||||||||
Direct losses paid | 850 | 1,159 | 1,822 | |||||||||
Reinsurance | (23 | ) | (34 | ) | (61 | ) | ||||||
Net losses paid | 827 | 1,125 | 1,761 | |||||||||
LAE | 22 | 29 | 36 | |||||||||
Net losses and LAE paid before terminations | 849 | 1,154 | 1,797 | |||||||||
Reinsurance terminations | (15 | ) | — | (3 | ) | |||||||
Net losses and LAE paid | $ | 834 | $ | 1,154 | $ | 1,794 |
(1) | In this report we classify loans without complete documentation as "reduced documentation" loans regardless of FICO credit score rather than as prime, "A-" or "subprime" loans; in the table above, such loans appear only in the reduced documentation category and they do not appear in any of the other categories. |
(2) | 2015, 2014 and 2013 each include $42 million paid under the terms of our settlement with Freddie Mac as discussed in Note 9 - "Loss Reserves" to our consolidated financial statements in Item 8. |
(3) | 2013 includes $105 million associated with the implementation of the Countrywide settlement as discussed in Note 20 - "Litigation and Contingencies" to our consolidated financial statements in Item 8. |
Paid Claims by Jurisdiction | ||||||||||||
(In millions) | 2015 | 2014 | 2013* | |||||||||
Florida | $ | 159 | $ | 247 | $ | 297 | ||||||
Illinois | 61 | 91 | 139 | |||||||||
Maryland | 45 | 49 | 51 | |||||||||
New Jersey | 44 | 38 | 33 | |||||||||
California | 39 | 57 | 147 | |||||||||
Pennsylvania | 33 | 42 | 46 | |||||||||
New York | 31 | 27 | 20 | |||||||||
Ohio | 27 | 41 | 60 | |||||||||
Washington | 25 | 38 | 69 | |||||||||
Georgia | 19 | 29 | 58 | |||||||||
Connecticut | 18 | 18 | 14 | |||||||||
Michigan | 17 | 29 | 57 | |||||||||
Virginia | 17 | 19 | 31 | |||||||||
Wisconsin | 16 | 21 | 41 | |||||||||
Massachusetts | 15 | 12 | 22 | |||||||||
All other jurisdictions | 211 | 316 | 526 | |||||||||
$ | 777 | $ | 1,074 | $ | 1,611 | |||||||
Other (Pool, LAE, Reinsurance and Other) | 57 | 80 | 183 | |||||||||
Net losses and LAE paid | $ | 834 | $ | 1,154 | $ | 1,794 |
* | In 2013 the claims paid associated with our settlement agreement with Countrywide is included in "Other" above and not in the specific jurisdiction disclosure. |
Default Inventory by Jurisdiction | ||||||||
2015 | 2014 | 2013 | ||||||
Florida | 5,903 | 9,442 | 14,685 | |||||
Illinois | 3,301 | 4,481 | 6,167 | |||||
Maryland | 1,609 | 2,119 | 2,791 | |||||
New Jersey | 3,498 | 4,077 | 4,646 | |||||
California | 2,019 | 2,777 | 3,656 | |||||
Pennsylvania | 3,574 | 4,480 | 5,449 | |||||
New York | 3,901 | 4,595 | 5,128 | |||||
Ohio | 3,209 | 3,908 | 5,055 | |||||
Washington | 1,049 | 1,415 | 1,986 | |||||
Georgia | 2,225 | 2,726 | 3,515 | |||||
Connecticut | 832 | 1,095 | 1,393 | |||||
Michigan | 1,877 | 2,447 | 3,284 | |||||
Virginia | 1,109 | 1,355 | 1,598 | |||||
Wisconsin | 1,378 | 1,797 | 2,176 | |||||
Massachusetts | 1,390 | 1,631 | 1,904 | |||||
All other jurisdictions | 25,759 | 31,556 | 39,895 | |||||
62,633 | 79,901 | 103,328 |
Default Inventory by Policy Year | ||||||||
Policy year: | 2015 | 2014 | 2013 | |||||
2004 and prior | 14,599 | 19,797 | 26,190 | |||||
2005 | 7,890 | 10,630 | 13,728 | |||||
2006 | 11,853 | 15,529 | 20,055 | |||||
2007 | 20,000 | 25,232 | 33,085 | |||||
2008 | 5,418 | 6,721 | 8,714 | |||||
2009 | 515 | 648 | 749 | |||||
2010 | 274 | 300 | 327 | |||||
2011 | 246 | 260 | 243 | |||||
2012 | 388 | 316 | 189 | |||||
2013 | 615 | 335 | 48 | |||||
2014 | 672 | 133 | — | |||||
2015 | 163 | — | — | |||||
62,633 | 79,901 | 103,328 |
• | Investment Portfolio 2015 Highlights |
◦ | Investments totaled $4.7 billion as of December 31, 2015, increasing from $4.6 billion as of December 31, 2014. |
◦ | Net investment income was $103.7 million in 2015, an increase of 18.4% from $87.6 million in 2014. |
◦ | Net realized investment gains were $28.4 million in 2015 compared to $1.4 million in 2014. |
• | Investments outlook |
• | Investment Portfolio Composition |
Years ended December 31, | ||||||||||||
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Total cash and cash equivalents provided by (used in): | ||||||||||||
Operating activities | $ | 152,036 | $ | (405,277 | ) | $ | (970,711 | ) | ||||
Investing activities | (96,958 | ) | 292,234 | (854,947 | ) | |||||||
Financing activities | (71,840 | ) | (21,767 | ) | 1,130,725 | |||||||
Decrease in cash and cash equivalents | $ | (16,762 | ) | $ | (134,810 | ) | $ | (694,933 | ) |
Sources | Uses | |
Premiums received | Claim payments | |
Loss payments from reinsurers | Ceded premium to reinsurers | |
Investment income | Interest expense | |
Operating expenses |
Sources | Uses | |
Proceeds from fixed maturity securities sold, called or matured | Purchases of fixed maturity securities | |
Decreases in restricted cash | Purchases of equity securities | |
Increases in restricted cash | ||
Purchase of property and equipment |
Sources | Uses | |
Proceeds from debt offerings | Repayment/repurchase of debt | |
Proceeds from stock offerings | ||
Tax benefits related to share based compensation plans |
(In thousands, except ratio) | 2015 | 2014 | 2013 | |||||||||
Common stock, paid-in capital, retained earnings (deficit), less treasury stock | $ | 2,297,020 | $ | 1,118,244 | $ | 862,264 | ||||||
Accumulated other comprehensive loss, net of tax | (60,880 | ) | (81,341 | ) | (117,726 | ) | ||||||
Total shareholders' equity | 2,236,140 | 1,036,903 | 744,538 | |||||||||
Debt | 1,223,025 | 1,296,475 | 1,317,405 | |||||||||
Total capital resources | $ | 3,459,165 | $ | 2,333,378 | $ | 2,061,943 | ||||||
Ratio of debt to shareholders' equity | 54.7 | % | 125.0 | % | 176.9 | % |
Description | Outstanding Par (In millions) | Interest per annum | Annual interest cost (In millions) | Maturity | ||||
Convertible Senior Notes | $333.5 | 5% | $17 | May 2017 | ||||
Convertible Senior Notes | $500.0 | 2% | $10 | April 2020 | ||||
Convertible Junior Subordinated Debentures | $389.5 | 9% | $35 | April 2063 |
December 31, | ||||||||
(In millions, except ratio) | 2015 | 2014 | ||||||
Risk in force - net (1) | $ | 27,301 | $ | 25,735 | ||||
Statutory policyholders' surplus | $ | 1,574 | $ | 1,518 | ||||
Statutory contingency reserve | 691 | 247 | ||||||
Statutory policyholders' position | $ | 2,265 | $ | 1,765 | ||||
Risk-to-capital | 12.1:1 | 14.6:1 |
(1) | Risk in force – net, as shown in the table above, is net of reinsurance and exposure on policies currently in default and for which loss reserves have been established. |
December 31, | ||||||||
(In millions, except ratio) | 2015 | 2014 | ||||||
Risk in force - net (1) | $ | 33,072 | $ | 31,272 | ||||
Statutory policyholders' surplus | $ | 1,608 | $ | 1,585 | ||||
Statutory contingency reserve | 827 | 318 | ||||||
Statutory policyholders' position | $ | 2,435 | $ | 1,903 | ||||
Risk-to-capital | 13.6:1 | 16.4:1 |
(1) | Risk in force – net, as shown in the table above, is net of reinsurance and exposure on policies currently in default ($3.2 billion at December 31, 2015 and $3.8 billion at December 31, 2014) and for which loss reserves have been established. |
Contractual Obligations: | Payments due by period | |||||||||||||||||||
Less than | More than | |||||||||||||||||||
(In millions) | Total | 1 year | 1-3 years | 3-5 years | 5 years | |||||||||||||||
Long-term debt obligations | $ | 2,958.2 | $ | 61.7 | $ | 432.0 | $ | 585.1 | $ | 1,879.4 | ||||||||||
Operating lease obligations | 2.9 | 0.7 | 1.1 | 1.0 | 0.1 | |||||||||||||||
Tax obligations | 19.0 | — | 19.0 | — | — | |||||||||||||||
Purchase obligations | 2.7 | 2.0 | 0.7 | — | — | |||||||||||||||
Pension, SERP and other post-retirement benefit plans | 274.9 | 23.8 | 46.9 | 55.2 | 149.0 | |||||||||||||||
Other long-term liabilities | 1,893.3 | 852.0 | 795.2 | 246.1 | — | |||||||||||||||
Total | $ | 5,151.0 | 940.2 | $ | 1,294.9 | $ | 887.4 | $ | 2,028.5 |
(In thousands) | Losses incurred related to prior years (1) | Reserve at end of prior year | ||||||
2015 | $ | (110,302 | ) | $ | 2,396,807 | |||
2014 | (100,359 | ) | 3,061,401 | |||||
2013 | (59,687 | ) | 4,056,843 | |||||
2012 | 573,120 | 4,557,512 | ||||||
2011 | (99,328 | ) | 5,884,171 |
(1) | A positive number for a prior year indicates a deficiency of loss reserves, and a negative number for a prior year indicates a redundancy of loss reserves. |
▪ | our intent to sell the security or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; |
▪ | the present value of the discounted cash flows we expect to collect compared to the amortized cost basis of the security; |
▪ | extent and duration of the decline; |
▪ | failure of the issuer to make scheduled interest or principal payments; |
▪ | change in rating below investment grade; and |
▪ | adverse conditions specifically related to the security, an industry, or a geographic area. |
Page No. | |
December 31, | ||||||||
(In thousands) | 2015 | 2014 | ||||||
ASSETS | ||||||||
Investment portfolio (notes 6 and 7): | ||||||||
Securities, available-for-sale, at fair value: | ||||||||
Fixed maturities (amortized cost, 2015 - $4,684,148; 2014 - $4,602,514) | $ | 4,657,561 | $ | 4,609,614 | ||||
Equity securities | 5,645 | 3,055 | ||||||
Total investment portfolio | 4,663,206 | 4,612,669 | ||||||
Cash and cash equivalents | 181,120 | 197,882 | ||||||
Restricted cash and cash equivalents (note 2) | — | 17,212 | ||||||
Accrued investment income | 40,224 | 30,518 | ||||||
Prepaid reinsurance premiums (note 11) | 166 | 47,623 | ||||||
Reinsurance recoverable on loss reserves (note 11) | 44,487 | 57,841 | ||||||
Reinsurance recoverable on paid losses (note 11) | 3,319 | 6,424 | ||||||
Premiums receivable | 48,469 | 57,442 | ||||||
Home office and equipment, net | 30,095 | 28,693 | ||||||
Deferred insurance policy acquisition costs | 15,241 | 12,240 | ||||||
Profit commission receivable (note 11) | — | 91,500 | ||||||
Deferred income taxes, net (note 14) | 762,080 | — | ||||||
Other assets | 91,138 | 106,390 | ||||||
Total assets | $ | 5,879,545 | $ | 5,266,434 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Liabilities: | ||||||||
Loss reserves (notes 9 and 11) | $ | 1,893,402 | $ | 2,396,807 | ||||
Premium deficiency reserve (note 10) | — | 23,751 | ||||||
Unearned premiums | 279,973 | 203,414 | ||||||
Senior notes (note 8) | — | 61,918 | ||||||
Convertible senior notes (note 8) | 833,503 | 845,000 | ||||||
Convertible junior debentures (note 8) | 389,522 | 389,522 | ||||||
Other liabilities | 247,005 | 309,119 | ||||||
Total liabilities | 3,643,405 | 4,229,531 | ||||||
Contingencies (note 20) | ||||||||
Shareholders' equity (note 15): | ||||||||
Common stock (one dollar par value, shares authorized 1,000,000; shares issued 2015 - 340,097; 2014 - 340,047; outstanding 2015 - 339,657; 2014 - 338,560) | 340,097 | 340,047 | ||||||
Paid-in capital | 1,670,238 | 1,663,592 | ||||||
Treasury stock (shares at cost 2015 - 440; 2014 - 1,487) | (3,362 | ) | (32,937 | ) | ||||
Accumulated other comprehensive loss, net of tax (note 12) | (60,880 | ) | (81,341 | ) | ||||
Retained earnings (deficit) | 290,047 | (852,458 | ) | |||||
Total shareholders' equity | 2,236,140 | 1,036,903 | ||||||
Total liabilities and shareholders' equity | $ | 5,879,545 | $ | 5,266,434 |
Years Ended December 31, | ||||||||||||
(In thousands, except per share data) | 2015 | 2014 | 2013 | |||||||||
Revenues: | ||||||||||||
Premiums written: | ||||||||||||
Direct | $ | 1,074,490 | $ | 999,943 | $ | 994,910 | ||||||
Assumed | 1,178 | 1,653 | 2,074 | |||||||||
Ceded (note 11) | (55,391 | ) | (119,634 | ) | (73,503 | ) | ||||||
Net premiums written | 1,020,277 | 881,962 | 923,481 | |||||||||
(Increase) decrease in unearned premiums | (124,055 | ) | (37,591 | ) | 19,570 | |||||||
Net premiums earned (note 11) | 896,222 | 844,371 | 943,051 | |||||||||
Investment income, net of expenses (note 6) | 103,741 | 87,647 | 80,739 | |||||||||
Net realized investment gains (losses) (note 6): | ||||||||||||
Total other-than-temporary impairment losses | — | (144 | ) | (328 | ) | |||||||
Portion of losses recognized in other comprehensive income (loss), before taxes (note 12) | — | — | — | |||||||||
Net impairment losses recognized in earnings | — | (144 | ) | (328 | ) | |||||||
Other realized investment gains | 28,361 | 1,501 | 6,059 | |||||||||
Net realized investment gains | 28,361 | 1,357 | 5,731 | |||||||||
Other revenue | 12,457 | 8,422 | 9,914 | |||||||||
Total revenues | 1,040,781 | 941,797 | 1,039,435 | |||||||||
Losses and expenses: | ||||||||||||
Losses incurred, net (notes 9 and 11) | 343,547 | 496,077 | 838,726 | |||||||||
Change in premium deficiency reserve (note 10) | (23,751 | ) | (24,710 | ) | (25,320 | ) | ||||||
Amortization of deferred policy acquisition costs | 8,789 | 7,618 | 10,641 | |||||||||
Other underwriting and operating expenses, net (note 11) | 155,577 | 138,441 | 181,877 | |||||||||
Interest expense (note 8) | 68,932 | 69,648 | 79,663 | |||||||||
Total losses and expenses | 553,094 | 687,074 | 1,085,587 | |||||||||
Income (loss) before tax | 487,687 | 254,723 | (46,152 | ) | ||||||||
(Benefit from) provision for income taxes (note 14) | (684,313 | ) | 2,774 | 3,696 | ||||||||
Net income (loss) | $ | 1,172,000 | $ | 251,949 | $ | (49,848 | ) | |||||
Income (loss) per share (note 3): | ||||||||||||
Basic | $ | 3.45 | $ | 0.74 | $ | (0.16 | ) | |||||
Diluted | $ | 2.60 | $ | 0.64 | $ | (0.16 | ) | |||||
Weighted average common shares outstanding - basic (note 3) | 339,552 | 338,523 | 311,754 | |||||||||
Weighted average common shares outstanding - diluted (note 3) | 468,039 | 413,522 | 311,754 | |||||||||
Dividends per share | $ | — | $ | — | $ | — |
Years Ended December 31, | ||||||||||||
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Net income (loss) | $ | 1,172,000 | $ | 251,949 | $ | (49,848 | ) | |||||
Other comprehensive income (loss), net of tax (note 12): | ||||||||||||
Change in unrealized investment gains and losses (note 6) | 40,403 | 91,139 | (123,591 | ) | ||||||||
Benefit plans adjustment (note 13) | (15,714 | ) | (52,112 | ) | 68,038 | |||||||
Foreign currency translation adjustment | (4,228 | ) | (2,642 | ) | (14,010 | ) | ||||||
Other comprehensive income (loss), net of tax | 20,461 | 36,385 | (69,563 | ) | ||||||||
Comprehensive income (loss) | $ | 1,192,461 | $ | 288,334 | $ | (119,411 | ) |
Years Ended December 31, | ||||||||||||
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Common stock | ||||||||||||
Balance, beginning of year | $ | 340,047 | $ | 340,047 | $ | 205,047 | ||||||
Common stock issuance | — | — | 135,000 | |||||||||
Net common stock issued under share-based compensation plans | 50 | — | — | |||||||||
Balance, end of year | 340,097 | 340,047 | 340,047 | |||||||||
Paid-in capital | ||||||||||||
Balance, beginning of year | 1,663,592 | 1,661,269 | 1,135,296 | |||||||||
Common stock issuance | — | — | 528,335 | |||||||||
Net common stock issued under share-based compensation plans | (478 | ) | — | — | ||||||||
Reissuance of treasury stock, net | (6,894 | ) | (6,680 | ) | (7,892 | ) | ||||||
Tax benefit from share-based compensation | 2,116 | — | — | |||||||||
Equity compensation | 11,902 | 9,003 | 5,530 | |||||||||
Balance, end of year | 1,670,238 | 1,663,592 | 1,661,269 | |||||||||
Treasury stock | ||||||||||||
Balance, beginning of year | (32,937 | ) | (64,435 | ) | (104,959 | ) | ||||||
Reissuance of treasury stock, net | 29,575 | 31,498 | 40,524 | |||||||||
Balance, end of year | (3,362 | ) | (32,937 | ) | (64,435 | ) | ||||||
Accumulated other comprehensive loss | ||||||||||||
Balance, beginning of year | (81,341 | ) | (117,726 | ) | (48,163 | ) | ||||||
Other comprehensive income (loss) | 20,461 | 36,385 | (69,563 | ) | ||||||||
Balance, end of year | (60,880 | ) | (81,341 | ) | (117,726 | ) | ||||||
Retained earnings (deficit) | ||||||||||||
Balance, beginning of year | (852,458 | ) | (1,074,617 | ) | (990,281 | ) | ||||||
Net income (loss) | 1,172,000 | 251,949 | (49,848 | ) | ||||||||
Reissuance of treasury stock, net | (29,495 | ) | (29,790 | ) | (34,488 | ) | ||||||
Balance, end of year | 290,047 | (852,458 | ) | (1,074,617 | ) | |||||||
Total shareholders' equity | $ | 2,236,140 | $ | 1,036,903 | $ | 744,538 |
Years Ended December 31, | ||||||||||||
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 1,172,000 | $ | 251,949 | $ | (49,848 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and other amortization | 52,559 | 48,861 | 69,203 | |||||||||
Deferred tax (benefit) expense | (692,810 | ) | 312 | 590 | ||||||||
Realized investment gains, net | (28,361 | ) | (1,501 | ) | (6,059 | ) | ||||||
Net investment impairment losses | — | 144 | 328 | |||||||||
Loss on repurchase of senior notes | 507 | 837 | — | |||||||||
Excess tax benefits related to share-based compensation | (2,117 | ) | — | — | ||||||||
Change in certain assets and liabilities: | ||||||||||||
Accrued investment income | (9,706 | ) | 1,142 | (4,417 | ) | |||||||
Prepaid reinsurance premium | 47,457 | (11,380 | ) | (35,402 | ) | |||||||
Reinsurance recoverable on loss reserves | 13,354 | 6,244 | 40,763 | |||||||||
Reinsurance recoverable on paid losses | 3,105 | 4,001 | 5,180 | |||||||||
Premiums receivable | 8,973 | 4,859 | 5,527 | |||||||||
Deferred insurance policy acquisition costs | (3,001 | ) | (2,519 | ) | 1,524 | |||||||
Profit commission receivable | 64,525 | (89,132 | ) | (2,368 | ) | |||||||
Loss reserves | (503,405 | ) | (664,594 | ) | (995,442 | ) | ||||||
Premium deficiency reserve | (23,751 | ) | (24,710 | ) | (25,320 | ) | ||||||
Unearned premiums | 76,559 | 48,935 | 15,639 | |||||||||
Return premium accrual | (9,600 | ) | 22,200 | (11,800 | ) | |||||||
Income taxes payable - current | 2,518 | (674 | ) | 598 | ||||||||
Other, net | (16,770 | ) | (251 | ) | 20,593 | |||||||
Net cash provided by (used in) operating activities | 152,036 | (405,277 | ) | (970,711 | ) | |||||||
Cash flows from investing activities: | ||||||||||||
Purchases of investments: | ||||||||||||
Fixed maturities | (2,462,844 | ) | (1,979,917 | ) | (3,248,602 | ) | ||||||
Equity securities | (2,623 | ) | (94 | ) | (111 | ) | ||||||
Proceeds from sales of fixed maturities | 1,796,153 | 1,147,624 | 1,054,985 | |||||||||
Proceeds from maturity of fixed maturities | 559,774 | 1,129,087 | 1,357,028 | |||||||||
Net decrease in payables for securities | — | 13 | 13 | |||||||||
Net decrease (increase) in restricted cash | 17,212 | 228 | (17,440 | ) | ||||||||
Additions to property and equipment | (4,630 | ) | (4,707 | ) | (820 | ) | ||||||
Net cash (used in) provided by investing activities | (96,958 | ) | 292,234 | (854,947 | ) | |||||||
Cash flows from financing activities: | ||||||||||||
Net proceeds from convertible senior notes | — | — | 484,625 | |||||||||
Common stock shares issued | — | — | 663,335 | |||||||||
Repayment of long-term debt | (73,957 | ) | (21,767 | ) | (17,235 | ) | ||||||
Excess tax benefits related to share-based compensation | 2,117 | — | — | |||||||||
Net cash (used in) provided by financing activities | (71,840 | ) | (21,767 | ) | 1,130,725 | |||||||
Net decrease in cash and cash equivalents | (16,762 | ) | (134,810 | ) | (694,933 | ) | ||||||
Cash and cash equivalents at beginning of year | 197,882 | 332,692 | 1,027,625 | |||||||||
Cash and cash equivalents at end of year | $ | 181,120 | $ | 197,882 | $ | 332,692 |
▪ | our intent to sell the security or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; |
▪ | the present value of the discounted cash flows we expect to collect compared to the amortized cost basis of the security; |
▪ | extent and duration of the decline; |
▪ | failure of the issuer to make scheduled interest or principal payments; |
▪ | change in rating below investment grade; and |
▪ | adverse conditions specifically related to the security, an industry, or a geographic area. |
Years Ended December 31, | ||||||||||||
(In thousands, except per share data) | 2015 | 2014 | 2013 | |||||||||
Basic earnings (loss) per share: | ||||||||||||
Net income (loss) | $ | 1,172,000 | $ | 251,949 | $ | (49,848 | ) | |||||
Weighted average common shares outstanding | 339,552 | 338,523 | 311,754 | |||||||||
Basic income (loss) per share | $ | 3.45 | $ | 0.74 | $ | (0.16 | ) | |||||
Diluted earnings (loss) per share: | ||||||||||||
Net income (loss) | $ | 1,172,000 | $ | 251,949 | $ | (49,848 | ) | |||||
Interest expense, net of tax (1): | ||||||||||||
2% Convertible Senior Notes due 2020 | 7,928 | 12,197 | — | |||||||||
5% Convertible Senior Notes due 2017 | 12,228 | — | — | |||||||||
9% Convertible Junior Subordinated Debentures due 2063 | 22,786 | — | — | |||||||||
Diluted income available to common shareholders | $ | 1,214,942 | $ | 264,146 | $ | (49,848 | ) | |||||
Weighted-average shares - Basic | 339,552 | 338,523 | 311,754 | |||||||||
Effect of dilutive securities: | ||||||||||||
Unvested restricted stock units | 2,113 | 3,082 | — | |||||||||
2% Convertible Senior Notes due 2020 | 71,917 | 71,917 | — | |||||||||
5% Convertible Senior Notes due 2017 | 25,603 | — | — | |||||||||
9% Convertible Junior Subordinated Debentures due 2063 | 28,854 | — | — | |||||||||
Weighted-average shares - Diluted | 468,039 | 413,522 | 311,754 | |||||||||
Diluted income (loss) per share | $ | 2.60 | $ | 0.64 | $ | (0.16 | ) | |||||
Anti-dilutive securities (in millions) | — | 54.5 | 130.1 |
(1) | The year ended December 31, 2015 has been tax effected at a rate of 35%. Due to the valuation allowance recorded against deferred tax assets the year ended December 31, 2014 was not tax effected. |
December 31, 2015 | ||||||||||||||||
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses (1) | Fair Value | ||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 160,393 | $ | 2,133 | $ | (1,942 | ) | $ | 160,584 | |||||||
Obligations of U.S. states and political subdivisions | 1,766,407 | 33,410 | (7,290 | ) | 1,792,527 | |||||||||||
Corporate debt securities | 2,046,697 | 2,836 | (44,770 | ) | 2,004,763 | |||||||||||
Asset-backed securities | 116,764 | 56 | (203 | ) | 116,617 | |||||||||||
Residential mortgage-backed securities | 265,879 | 161 | (8,392 | ) | 257,648 | |||||||||||
Commercial mortgage-backed securities | 237,304 | 162 | (3,975 | ) | 233,491 | |||||||||||
Collateralized loan obligations | 61,345 | 3 | (1,148 | ) | 60,200 | |||||||||||
Debt securities issued by foreign sovereign governments | 29,359 | 2,474 | (102 | ) | 31,731 | |||||||||||
Total debt securities | 4,684,148 | 41,235 | (67,822 | ) | 4,657,561 | |||||||||||
Equity securities | 5,625 | 38 | (18 | ) | 5,645 | |||||||||||
Total investment portfolio | $ | 4,689,773 | $ | 41,273 | $ | (67,840 | ) | $ | 4,663,206 |
December 31, 2014 | ||||||||||||||||
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses (1) | Fair Value | ||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 349,153 | $ | 2,752 | $ | (5,130 | ) | $ | 346,775 | |||||||
Obligations of U.S. states and political subdivisions | 844,942 | 12,961 | (2,761 | ) | 855,142 | |||||||||||
Corporate debt securities | 2,418,991 | 16,325 | (10,035 | ) | 2,425,281 | |||||||||||
Asset-backed securities | 286,260 | 535 | (140 | ) | 286,655 | |||||||||||
Residential mortgage-backed securities | 329,983 | 254 | (9,000 | ) | 321,237 | |||||||||||
Commercial mortgage-backed securities | 276,215 | 1,221 | (2,158 | ) | 275,278 | |||||||||||
Collateralized loan obligations | 61,340 | — | (1,264 | ) | 60,076 | |||||||||||
Debt securities issued by foreign sovereign governments | 35,630 | 3,540 | — | 39,170 | ||||||||||||
Total debt securities | 4,602,514 | 37,588 | (30,488 | ) | 4,609,614 | |||||||||||
Equity securities | 3,003 | 61 | (9 | ) | 3,055 | |||||||||||
Total investment portfolio | $ | 4,605,517 | $ | 37,649 | $ | (30,497 | ) | $ | 4,612,669 |
(1) | There were no other-than-temporary impairment losses recorded in other comprehensive income (loss) as of December 31, 2015 and 2014. |
December 31, 2015 | ||||||||
(In thousands) | Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 280,697 | $ | 281,063 | ||||
Due after one year through five years | 1,450,854 | 1,450,315 | ||||||
Due after five years through ten years | 1,207,011 | 1,176,468 | ||||||
Due after ten years | 1,064,294 | 1,081,759 | ||||||
4,002,856 | 3,989,605 | |||||||
Asset-backed securities | 116,764 | 116,617 | ||||||
Residential mortgage-backed securities | 265,879 | 257,648 | ||||||
Commercial mortgage-backed securities | 237,304 | 233,491 | ||||||
Collateralized loan obligations | 61,345 | 60,200 | ||||||
Total as of December 31, 2015 | $ | 4,684,148 | $ | 4,657,561 |
December 31, 2015 | Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
(In thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 60,548 | $ | (1,467 | ) | $ | 1,923 | $ | (475 | ) | $ | 62,471 | $ | (1,942 | ) | |||||||||
Obligations of U.S. states and political subdivisions | 417,615 | (6,404 | ) | 37,014 | (886 | ) | 454,629 | (7,290 | ) | |||||||||||||||
Corporate debt securities | 1,470,628 | (38,519 | ) | 114,982 | (6,251 | ) | 1,585,610 | (44,770 | ) | |||||||||||||||
Asset-backed securities | 86,604 | (173 | ) | 5,546 | (30 | ) | 92,150 | (203 | ) | |||||||||||||||
Residential mortgage-backed securities | 35,064 | (312 | ) | 209,882 | (8,080 | ) | 244,946 | (8,392 | ) | |||||||||||||||
Commercial mortgage-backed securities | 134,488 | (2,361 | ) | 69,927 | (1,614 | ) | 204,415 | (3,975 | ) | |||||||||||||||
Collateralized loan obligations | — | — | 51,750 | (1,148 | ) | 51,750 | (1,148 | ) | ||||||||||||||||
Debt securities issued by foreign sovereign governments | 4,463 | (102 | ) | — | — | 4,463 | (102 | ) | ||||||||||||||||
Equity securities | 355 | (8 | ) | 171 | (10 | ) | 526 | (18 | ) | |||||||||||||||
Total investment portfolio | $ | 2,209,765 | $ | (49,346 | ) | $ | 491,195 | $ | (18,494 | ) | $ | 2,700,960 | $ | (67,840 | ) |
December 31, 2014 | Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
(In thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 58,166 | $ | (138 | ) | $ | 232,351 | $ | (4,992 | ) | $ | 290,517 | $ | (5,130 | ) | |||||||||
Obligations of U.S. states and political subdivisions | 166,408 | (1,066 | ) | 114,465 | (1,695 | ) | 280,873 | (2,761 | ) | |||||||||||||||
Corporate debt securities | 816,555 | (5,259 | ) | 243,208 | (4,776 | ) | 1,059,763 | (10,035 | ) | |||||||||||||||
Asset-backed securities | 54,491 | (80 | ) | 11,895 | (60 | ) | 66,386 | (140 | ) | |||||||||||||||
Residential mortgage-backed securities | 24,168 | (34 | ) | 263,002 | (8,966 | ) | 287,170 | (9,000 | ) | |||||||||||||||
Commercial mortgage-backed securities | 89,301 | (810 | ) | 110,652 | (1,348 | ) | 199,953 | (2,158 | ) | |||||||||||||||
Collateralized loan obligations | — | — | 60,076 | (1,264 | ) | 60,076 | (1,264 | ) | ||||||||||||||||
Debt securities issued by foreign sovereign governments | — | — | — | — | — | — | ||||||||||||||||||
Equity securities | 167 | (1 | ) | 235 | (8 | ) | 402 | (9 | ) | |||||||||||||||
Total investment portfolio | $ | 1,209,256 | $ | (7,388 | ) | $ | 1,035,884 | $ | (23,109 | ) | $ | 2,245,140 | $ | (30,497 | ) |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Fixed maturities | $ | 105,882 | $ | 89,437 | $ | 82,168 | ||||||
Equity securities | 208 | 227 | 229 | |||||||||
Cash equivalents | 191 | 179 | 353 | |||||||||
Other | 455 | 711 | 675 | |||||||||
Investment income | 106,736 | 90,554 | 83,425 | |||||||||
Investment expenses | (2,995 | ) | (2,907 | ) | (2,686 | ) | ||||||
Net investment income | $ | 103,741 | $ | 87,647 | $ | 80,739 |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Net realized investment gains on investments: | ||||||||||||
Fixed maturities | $ | 28,335 | $ | 1,000 | $ | 3,274 | ||||||
Equity securities | 26 | 356 | 1,068 | |||||||||
Other | — | 1 | 1,389 | |||||||||
Total net realized investment gains | $ | 28,361 | $ | 1,357 | $ | 5,731 | ||||||
Change in net unrealized gains (losses): | ||||||||||||
Fixed maturities | $ | (33,687 | ) | $ | 91,718 | $ | (126,020 | ) | ||||
Equity securities | (32 | ) | 66 | (153 | ) | |||||||
Other | — | — | — | |||||||||
Total (decrease) increase in net unrealized gains/losses | $ | (33,719 | ) | $ | 91,784 | $ | (126,173 | ) |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Gross realized gains | $ | 30,039 | $ | 4,966 | $ | 11,043 | ||||||
Gross realized losses | (1,678 | ) | (3,465 | ) | (4,984 | ) | ||||||
Other-than-temporary-impairment losses | — | (144 | ) | (328 | ) | |||||||
Net realized gains on securities | $ | 28,361 | $ | 1,357 | $ | 5,731 |
December 31, 2015 | ||||||||||||||||
(In thousands) | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 160,584 | $ | 46,197 | $ | 114,387 | $ | — | ||||||||
Obligations of U.S. states and political subdivisions | 1,792,527 | — | 1,791,299 | 1,228 | ||||||||||||
Corporate debt securities | 2,004,763 | — | 2,004,763 | — | ||||||||||||
Asset-backed securities | 116,617 | — | 116,617 | — | ||||||||||||
Residential mortgage-backed securities | 257,648 | — | 257,648 | — | ||||||||||||
Commercial mortgage-backed securities | 233,491 | — | 233,491 | — | ||||||||||||
Collateralized loan obligations | 60,200 | — | 60,200 | — | ||||||||||||
Debt securities issued by foreign sovereign governments | 31,731 | 31,731 | — | — | ||||||||||||
Total debt securities | 4,657,561 | 77,928 | 4,578,405 | 1,228 | ||||||||||||
Equity securities (1) | 5,645 | 2,790 | — | 2,855 | ||||||||||||
Total investments | $ | 4,663,206 | $ | 80,718 | $ | 4,578,405 | $ | 4,083 | ||||||||
Real estate acquired (2) | $ | 12,149 | $ | — | $ | — | $ | 12,149 |
December 31, 2014 | ||||||||||||||||
(In thousands) | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 346,775 | $ | 188,824 | $ | 157,951 | $ | — | ||||||||
Obligations of U.S. states and political subdivisions | 855,142 | — | 853,296 | 1,846 | ||||||||||||
Corporate debt securities | 2,425,281 | — | 2,425,281 | — | ||||||||||||
Asset-backed securities | 286,655 | — | 286,655 | — | ||||||||||||
Residential mortgage-backed securities | 321,237 | — | 321,237 | — | ||||||||||||
Commercial mortgage-backed securities | 275,278 | — | 275,278 | — | ||||||||||||
Collateralized loan obligations | 60,076 | — | 60,076 | — | ||||||||||||
Debt securities issued by foreign sovereign governments | 39,170 | 39,170 | — | — | ||||||||||||
Total debt securities | 4,609,614 | 227,994 | 4,379,774 | 1,846 | ||||||||||||
Equity securities (1) | 3,055 | 2,734 | — | 321 | ||||||||||||
Total investments | $ | 4,612,669 | $ | 230,728 | $ | 4,379,774 | $ | 2,167 | ||||||||
Real estate acquired (2) | $ | 12,658 | $ | — | $ | — | $ | 12,658 |
(1) | Equity securities in Level 3 are carried at cost, which approximates fair value. |
(2) | Real estate acquired through claim settlement, which is held for sale, is reported in other assets on the consolidated balance sheets. |
(In thousands) | Obligations of U.S. States and Political Subdivisions | Equity Securities | Total Investments | Real Estate Acquired | ||||||||||||
Balance at December 31, 2014 | $ | 1,846 | $ | 321 | $ | 2,167 | $ | 12,658 | ||||||||
Total realized/unrealized gains (losses): | ||||||||||||||||
Included in earnings and reported as losses incurred, net | — | — | — | (2,322 | ) | |||||||||||
Purchases | 7 | 2,534 | 2,541 | 34,624 | ||||||||||||
Sales | (625 | ) | — | (625 | ) | (32,811 | ) | |||||||||
Balance at December 31, 2015 | $ | 1,228 | $ | 2,855 | $ | 4,083 | $ | 12,149 |
(In thousands) | Obligations of U.S. States and Political Subdivisions | Equity Securities | Total Investments | Real Estate Acquired | ||||||||||||
Balance at December 31, 2013 | $ | 2,423 | $ | 321 | $ | 2,744 | $ | 13,280 | ||||||||
Total realized/unrealized gains (losses): | ||||||||||||||||
Included in earnings and reported as losses incurred, net | — | — | — | (4,129 | ) | |||||||||||
Purchases | 30 | — | 30 | 42,247 | ||||||||||||
Sales | (607 | ) | — | (607 | ) | (38,740 | ) | |||||||||
Balance at December 31, 2014 | $ | 1,846 | $ | 321 | $ | 2,167 | $ | 12,658 |
(In thousands) | Obligations of U.S. States and Political Subdivisions | Corporate Debt Securities | Equity Securities | Total Investments | Real Estate Acquired | |||||||||||||||
Balance at December 31, 2012 | $ | 3,130 | $ | 17,114 | $ | 321 | $ | 20,565 | $ | 3,463 | ||||||||||
Total realized/unrealized gains (losses): | ||||||||||||||||||||
Included in earnings and reported as realized investment gains (losses), net | — | (225 | ) | — | (225 | ) | — | |||||||||||||
Included in earnings and reported as losses incurred, net | — | — | — | — | (4,959 | ) | ||||||||||||||
Included in other comprehensive income | — | — | — | — | — | |||||||||||||||
Purchases | 30 | — | — | 30 | 39,188 | |||||||||||||||
Sales | (737 | ) | (16,889 | ) | — | (17,626 | ) | (24,412 | ) | |||||||||||
Balance at December 31, 2013 | $ | 2,423 | $ | — | $ | 321 | $ | 2,744 | $ | 13,280 |
(In thousands) | Par Value | Fair Value | ||||||
December 31, 2015 | ||||||||
Financial liabilities: | ||||||||
Convertible Senior Notes due 2017 | $ | 333,503 | $ | 345,616 | ||||
Convertible Senior Notes due 2020 | 500,000 | 701,955 | ||||||
Convertible Junior Subordinated Debentures due 2063 | 389,522 | 455,067 | ||||||
Total financial liabilities | $ | 1,223,025 | $ | 1,502,638 | ||||
December 31, 2014 | ||||||||
Financial liabilities: | ||||||||
Senior Notes | $ | 61,953 | $ | 63,618 | ||||
Convertible Senior Notes due 2017 | 345,000 | 387,997 | ||||||
Convertible Senior Notes due 2020 | 500,000 | 735,075 | ||||||
Convertible Junior Subordinated Debentures due 2063 | 389,522 | 500,201 | ||||||
Total financial liabilities | $ | 1,296,475 | $ | 1,686,891 |
December 31, | ||||||||
(In millions) | 2015 | 2014 | ||||||
Senior Notes, interest at 5.375% per annum, due November 2015 | $ | — | $ | 61.9 | ||||
Convertible Senior Notes, interest at 5% per annum, due May 2017 | 333.5 | 345.0 | ||||||
Convertible Senior Notes, interest at 2% per annum, due April 2020 | 500.0 | 500.0 | ||||||
Convertible Junior Subordinated Debentures, interest at 9% per annum, due April 2063 | 389.5 | 389.5 | ||||||
Total debt | 1,223.0 | 1,296.4 | ||||||
Less current portion of debt | — | (61.9 | ) | |||||
Total long-term debt | $ | 1,223.0 | $ | 1,234.5 |
Years Ended December 31, | ||||||||
(In millions) | 2015 | 2014 | ||||||
Senior Notes, interest at 5.375% per annum, due November 2015 | $ | 3.3 | $ | 3.6 | ||||
Convertible Senior Notes, interest at 5% per annum, due May 2017 | 17.3 | 17.3 | ||||||
Convertible Senior Notes, interest at 2% per annum, due April 2020 | 10.0 | 10.0 | ||||||
Convertible Junior Subordinated Debentures, interest at 9% per annum, due April 2063 | 35.1 | 35.1 | ||||||
Total interest payments | $ | 65.7 | $ | 66.0 |
• | Purchased $127.7 million in par value of our 5% Notes due in 2017 with funds held at our holding company; |
• | MGIC purchased $132.7 million of par value of our 9% Debentures using funds obtained from the proceeds of the borrowing from the Federal Home Loan Bank of Chicago (the "FHLBC") referred to below as the Advance; and |
• | MGIC borrowed $155.0 million from the FHLBC in February 2016 in the form of a fixed rate advance (the "Advance"). Interest is payable monthly at an annual rate, fixed for the term of the Advance, of 1.91%. The principal of the Advance matures on February 10, 2023, but we may prepay the Advance at any time. Such prepayment would be below par if interest rates have risen since the origination date of the Advance, or above par if interest rates have declined. |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Reserve at beginning of year | $ | 2,396,807 | $ | 3,061,401 | $ | 4,056,843 | ||||||
Less reinsurance recoverable | 57,841 | 64,085 | 104,848 | |||||||||
Net reserve at beginning of year | 2,338,966 | 2,997,316 | 3,951,995 | |||||||||
Losses incurred: | ||||||||||||
Losses and LAE incurred in respect of default notices received in: | ||||||||||||
Current year | 453,849 | 596,436 | 898,413 | |||||||||
Prior years (1) | (110,302 | ) | (100,359 | ) | (59,687 | ) | ||||||
Subtotal | 343,547 | 496,077 | 838,726 | |||||||||
Losses paid: | ||||||||||||
Losses and LAE paid in respect of default notices received in: | ||||||||||||
Current year | 25,980 | 32,919 | 73,470 | |||||||||
Prior years | 823,058 | 1,121,508 | 1,722,923 | |||||||||
Reinsurance terminations (2) | (15,440 | ) | — | (2,988 | ) | |||||||
Subtotal | 833,598 | 1,154,427 | 1,793,405 | |||||||||
Net reserve at end of year | 1,848,915 | 2,338,966 | 2,997,316 | |||||||||
Plus reinsurance recoverables | 44,487 | 57,841 | 64,085 | |||||||||
Reserve at end of year | $ | 1,893,402 | $ | 2,396,807 | $ | 3,061,401 |
(1) | A negative number for prior year losses incurred indicates a redundancy of prior year loss reserves. See table below regarding prior year loss development. |
(2) | In a termination, the reinsurance agreement is cancelled, with no future premium ceded and funds for any incurred but unpaid losses transferred to us. The transferred funds result in an increase in our investment portfolio (including cash and cash equivalents) and a decrease in net losses paid (reduction to losses incurred). In addition, there is an offsetting decrease in the reinsurance recoverable (increase in losses incurred), and thus there is no net impact to losses incurred. (See Note 11 – “Reinsurance”) |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Prior year loss development: | ||||||||||||
(Decrease) increase in estimated claim rate on primary defaults | $ | (141 | ) | $ | (43 | ) | $ | 10 | ||||
Increase (decrease) in estimated severity on primary defaults | 43 | (35 | ) | (50 | ) | |||||||
Change in estimates related to pool reserves, LAE reserves, reinsurance and other | (12 | ) | (22 | ) | (20 | ) | ||||||
Total prior year loss development (1) | $ | (110 | ) | $ | (100 | ) | $ | (60 | ) |
2015 | 2014 | 2013 | ||||||
Default inventory at beginning of year | 79,901 | 103,328 | 139,845 | |||||
New Notices | 74,315 | 88,844 | 106,823 | |||||
Cures | (73,610 | ) | (87,278 | ) | (104,390 | ) | ||
Paids (including those charged to a deductible or captive) | (16,004 | ) | (23,494 | ) | (34,738 | ) | ||
Rescissions and denials | (848 | ) | (1,306 | ) | (1,939 | ) | ||
Items removed from inventory resulting from settlements | (1,121 | ) | (193 | ) | (2,273 | ) | ||
Default inventory at end of year | 62,633 | 79,901 | 103,328 |
Aging of the Primary Default Inventory | |||||||||||||||||
December 31, | |||||||||||||||||
2015 | 2014 | 2013 | |||||||||||||||
Consecutive months in default | |||||||||||||||||
3 months or less | 13,053 | 21 | % | 15,319 | 19 | % | 18,941 | 18 | % | ||||||||
4 - 11 months | 15,763 | 25 | % | 19,710 | 25 | % | 24,514 | 24 | % | ||||||||
12 months or more (1) | 33,817 | 54 | % | 44,872 | 56 | % | 59,873 | 58 | % | ||||||||
Total primary default inventory | 62,633 | 100 | % | 79,901 | 100 | % | 103,328 | 100 | % | ||||||||
Primary claims received inventory included in ending default inventory (2) | 2,769 | 4 | % | 4,746 | 6 | % | 6,948 | 7 | % |
(1) | Approximately 50%, 53% and 49% of the primary default inventory in default for 12 consecutive months or more has been in default for at least 36 consecutive months as of December 31, 2015, 2014 and 2013, respectively. |
(2) | Our claims received inventory includes suspended rescissions, as we have voluntarily suspended rescissions of coverage related to loans that we believed would be included in a potential resolution. As of December 31, 2015, rescissions of coverage on approximately 435 loans had been voluntarily suspended. |
Number of Primary Payments Delinquent | |||||||||||||||||
December 31, | |||||||||||||||||
2015 | 2014 | 2013 | |||||||||||||||
3 payments or less | 20,360 | 33 | % | 23,253 | 29 | % | 28,095 | 27 | % | ||||||||
4 - 11 payments | 15,092 | 24 | % | 19,427 | 24 | % | 24,605 | 24 | % | ||||||||
12 payments or more | 27,181 | 43 | % | 37,221 | 47 | % | 50,628 | 49 | % | ||||||||
Total primary default inventory | 62,633 | 100 | % | 79,901 | 100 | % | 103,328 | 100 | % |
Years ended December 31, | ||||||||||||
(In thousands) | 2015 | 2014 | 2013 | |||||||||
2013 QSR Transaction | ||||||||||||
Ceded premiums written, net of profit commission | $ | (11,355 | ) | (1) | $ | 100,031 | $ | 49,672 | ||||
Ceded premiums earned, net of profit commission | 35,999 | (1) | 88,528 | 13,821 | ||||||||
Ceded losses incurred | 6,060 | 15,163 | 176 | |||||||||
Ceding commissions (2) | 10,235 | (1) | 37,833 | 10,408 | ||||||||
Profit commission | 62,525 | (1) | 89,133 | 2,368 | ||||||||
2015 QSR Transaction (Effective July 1, 2015) | ||||||||||||
Ceded premiums written, net of profit commission (3) | $ | 52,588 | ||||||||||
Ceded premiums earned, net of profit commission (3) | 52,588 | |||||||||||
Ceded losses incurred | 11,424 | |||||||||||
Ceding commissions (2) | 20,582 | |||||||||||
Profit commission | 50,322 |
(1) | The year ended December 31, 2015 includes the non-recurring impact of commuting our 2013 QSR Transaction. The commutation had no impact on ceded losses incurred. |
(2) | Ceding commissions are reported within Other underwriting and operating expenses, net on the consolidated statements of operations. |
(3) | As of July 1, 2015, premiums are ceded on an earned and received basis as defined in our 2015 QSR Transaction. |
Years ended December 31, | ||||||||||||
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Premiums earned: | ||||||||||||
Direct | $ | 997,892 | $ | 950,973 | $ | 979,078 | ||||||
Assumed | 1,178 | 1,653 | 2,074 | |||||||||
Ceded | (102,848 | ) | (108,255 | ) | (38,101 | ) | ||||||
Net premiums earned | $ | 896,222 | $ | 844,371 | $ | 943,051 | ||||||
Losses incurred: | ||||||||||||
Direct | $ | 369,680 | $ | 524,051 | $ | 863,871 | ||||||
Assumed | 1,552 | 2,012 | 2,645 | |||||||||
Ceded | (27,685 | ) | (29,986 | ) | (27,790 | ) | ||||||
Net losses incurred | $ | 343,547 | $ | 496,077 | $ | 838,726 |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Net unrealized investment (losses) gains arising during the year | $ | (33,718 | ) | $ | 91,782 | $ | (126,175 | ) | ||||
Income tax benefit (expense) | 11,738 | (32,017 | ) | 43,732 | ||||||||
Valuation allowance (1) | 62,383 | 31,374 | (41,148 | ) | ||||||||
Net of taxes | 40,403 | 91,139 | (123,591 | ) | ||||||||
Net changes in benefit plan assets and obligations | (12,818 | ) | (52,112 | ) | 68,038 | |||||||
Income tax benefit (expense) | 4,487 | 18,239 | (23,813 | ) | ||||||||
Valuation allowance (1) | (7,383 | ) | (18,239 | ) | 23,813 | |||||||
Net of taxes | (15,714 | ) | (52,112 | ) | 68,038 | |||||||
Net changes in unrealized foreign currency translation adjustment | (5,699 | ) | (4,067 | ) | (21,563 | ) | ||||||
Income tax benefit | 2,000 | 1,425 | 7,553 | |||||||||
Valuation allowance (1) | (529 | ) | — | — | ||||||||
Net of taxes | (4,228 | ) | (2,642 | ) | (14,010 | ) | ||||||
Total other comprehensive (loss) income | (52,235 | ) | 35,603 | (79,700 | ) | |||||||
Total income tax benefit, net of valuation allowance | 72,696 | 782 | 10,137 | |||||||||
Total other comprehensive income, net of tax | $ | 20,461 | $ | 36,385 | $ | (69,563 | ) |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Reclassification adjustment for net realized gains (losses) included in net income (loss) (1) | $ | 11,693 | $ | (6,816 | ) | $ | 3,246 | |||||
Income tax (expense) benefit | (4,076 | ) | 2,402 | (924 | ) | |||||||
Valuation allowance (3) | 3,635 | (2,502 | ) | (349 | ) | |||||||
Net of taxes | 11,252 | (6,916 | ) | 1,973 | ||||||||
Reclassification adjustment related to benefit plan assets and obligations (2) | 2,184 | 6,930 | 1 | |||||||||
Income tax expense | (764 | ) | (2,425 | ) | — | |||||||
Valuation allowance (3) | 574 | 2,425 | — | |||||||||
Net of taxes | 1,994 | 6,930 | 1 | |||||||||
Total reclassifications | 13,877 | 114 | 3,247 | |||||||||
Total income tax expense, net of valuation allowance | (631 | ) | (100 | ) | (1,273 | ) | ||||||
Total reclassifications, net of tax | $ | 13,246 | $ | 14 | $ | 1,974 |
(In thousands) | Net unrealized gains and losses on available-for-sale securities | Net benefit plan assets and obligations recognized in shareholders' equity | Net unrealized foreign currency translation | Total accumulated other comprehensive loss | ||||||||||||
Balance, December 31, 2012, net of tax | $ | (25,099 | ) | $ | (44,864 | ) | $ | 21,800 | $ | (48,163 | ) | |||||
Other comprehensive income (loss) before reclassifications | (121,618 | ) | 68,039 | (14,010 | ) | (67,589 | ) | |||||||||
Less: Amounts reclassified from AOCL | 1,973 | 1 | — | 1,974 | ||||||||||||
Balance, December 31, 2013, net of tax | (148,690 | ) | 23,174 | 7,790 | (117,726 | ) | ||||||||||
Other comprehensive income (loss) before reclassifications | 84,223 | (45,182 | ) | (2,642 | ) | 36,399 | ||||||||||
Less: Amounts reclassified from AOCL | (6,916 | ) | 6,930 | — | 14 | |||||||||||
Balance, December 31, 2014, net of tax | (57,551 | ) | (28,938 | ) | 5,148 | (81,341 | ) | |||||||||
Other comprehensive income (loss) before reclassifications | 51,655 | (13,720 | ) | (4,228 | ) | 33,707 | ||||||||||
Less: Amounts reclassified from AOCL | 11,252 | 1,994 | — | 13,246 | ||||||||||||
Balance, December 31, 2015, net of tax | $ | (17,148 | ) | $ | (44,652 | ) | $ | 920 | (60,880 | ) |
Components of Net Periodic Benefit Cost | ||||||||||||||||||||||||
Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | |||||||||||||||||||||||
(In thousands) | 12/31/2015 | 12/31/2014 | 12/31/2013 | 12/31/2015 | 12/31/2014 | 12/31/2013 | ||||||||||||||||||
1. Company Service Cost | $ | 10,256 | $ | 8,565 | $ | 11,338 | $ | 833 | $ | 659 | $ | 812 | ||||||||||||
2. Interest Cost | 15,847 | 15,987 | 15,289 | 697 | 653 | 618 | ||||||||||||||||||
3. Expected Return on Assets | (21,109 | ) | (21,030 | ) | (20,144 | ) | (4,991 | ) | (4,648 | ) | (3,679 | ) | ||||||||||||
4. Other Adjustments | — | — | — | — | — | — | ||||||||||||||||||
Subtotal | 4,994 | 3,522 | 6,483 | (3,461 | ) | (3,336 | ) | (2,249 | ) | |||||||||||||||
5. Amortization of : | ||||||||||||||||||||||||
a. Net Transition Obligation/(Asset) | — | — | — | — | — | — | ||||||||||||||||||
b. Net Prior Service Cost/(Credit) | (845 | ) | (930 | ) | 503 | (6,649 | ) | (6,649 | ) | (6,649 | ) | |||||||||||||
c. Net Losses/(Gains) | 5,485 | 1,083 | 6,145 | (175 | ) | (435 | ) | — | ||||||||||||||||
Total Amortization | 4,640 | 153 | 6,648 | (6,824 | ) | (7,084 | ) | (6,649 | ) | |||||||||||||||
6. Net Periodic Benefit Cost | 9,634 | 3,675 | 13,131 | (10,285 | ) | (10,420 | ) | (8,898 | ) | |||||||||||||||
7. Cost of settlements or curtailments | 3,172 | 302 | — | — | — | — | ||||||||||||||||||
8. Total Expense for Year | $ | 12,806 | $ | 3,977 | $ | 13,131 | $ | (10,285 | ) | $ | (10,420 | ) | $ | (8,898 | ) |
Development of Funded Status | ||||||||||||||||
Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | |||||||||||||||
(In thousands) | 12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | ||||||||||||
Actuarial Value of Benefit Obligations | ||||||||||||||||
1.Measurement Date | 12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | ||||||||||||
2. Accumulated Benefit Obligation | $ | 338,450 | $ | 366,440 | $ | 16,423 | $ | 18,225 | ||||||||
Funded Status/Asset (Liability) on the Consolidated Balance Sheet | ||||||||||||||||
1. Projected Benefit Obligation | $ | (349,483 | ) | $ | (379,324 | ) | $ | (16,423 | ) | $ | (18,225 | ) | ||||
2. Plan Assets at Fair Value | 350,107 | 378,701 | 65,568 | 66,940 | ||||||||||||
3. Funded Status - Overfunded/Asset | 624 | N/A | $ | 49,145 | $ | 48,715 | ||||||||||
4. Funded Status - Underfunded/Liability | N/A | (623 | ) | N/A | N/A |
Accumulated Other Comprehensive Income | ||||||||||||||||
Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | |||||||||||||||
(In thousands) | 12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | ||||||||||||
1. Net Actuarial (Gain)/Loss | $ | 95,636 | $ | 93,243 | $ | (5,311 | ) | $ | (8,222 | ) | ||||||
2. Net Prior Service Cost/(Credit) | (2,989 | ) | (3,853 | ) | (18,640 | ) | (25,289 | ) | ||||||||
3. Net Transition Obligation/(Asset) | — | — | — | — | ||||||||||||
4. Total at Year End | $ | 92,647 | $ | 89,390 | $ | (23,951 | ) | $ | (33,511 | ) |
Change in Projected Benefit/Accumulated Benefit Obligation | ||||||||||||||||
Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | |||||||||||||||
(In thousands) | 12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | ||||||||||||
1. Benefit Obligation at Beginning of Year | $ | 379,324 | $ | 317,606 | $ | 18,225 | $ | 15,764 | ||||||||
2. Company Service Cost | 10,256 | 8,565 | 833 | 659 | ||||||||||||
3. Interest Cost | 15,847 | 15,987 | 697 | 653 | ||||||||||||
4. Plan Participants' Contributions | — | — | 361 | 336 | ||||||||||||
5. Net Actuarial (Gain)/Loss due to Assumption Changes | (24,118 | ) | 59,901 | (2,083 | ) | 2,276 | ||||||||||
6. Net Actuarial (Gain)/Loss due to Plan Experience | 7,155 | (55 | ) | (397 | ) | (855 | ) | |||||||||
7. Benefit Payments from Fund (1) | (32,646 | ) | (21,539 | ) | (1,147 | ) | (645 | ) | ||||||||
8. Benefit Payments Directly by Company | (7,661 | ) | (1,404 | ) | — | — | ||||||||||
9. Plan Amendments | 19 | (1 | ) | — | — | |||||||||||
10. Other Adjustment | 1,307 | 264 | (66 | ) | 37 | |||||||||||
11. Benefit Obligation at End of Year | $ | 349,483 | $ | 379,324 | $ | 16,423 | $ | 18,225 |
(1) | Includes lump sum payments of $22.4 million and $11.8 million in 2015 and 2014, respectively, from our pension plan to eligible participants, which were former employees with vested benefits. |
Change in Plan Assets | ||||||||||||||||
Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | |||||||||||||||
(In thousands) | 12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | ||||||||||||
1. Fair Value of Plan Assets at Beginning of Year | $ | 378,701 | $ | 355,704 | $ | 66,940 | $ | 62,298 | ||||||||
2. Company Contributions | 17,311 | 9,504 | — | — | ||||||||||||
3. Plan Participants' Contributions | — | — | 361 | 336 | ||||||||||||
4. Benefit Payments from Fund | (32,646 | ) | (21,539 | ) | (1,147 | ) | (645 | ) | ||||||||
5. Benefit Payments paid directly by Company | (7,661 | ) | (1,404 | ) | — | — | ||||||||||
6. Actual Return on Assets | (5,094 | ) | 36,436 | (225 | ) | 5,250 | ||||||||||
7. Other Adjustment | (504 | ) | — | (361 | ) | (299 | ) | |||||||||
8. Fair Value of Plan Assets at End of Year | $ | 350,107 | $ | 378,701 | $ | 65,568 | $ | 66,940 |
Change in Accumulated Other Comprehensive Income (AOCI) | ||||||||||||||||
Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | |||||||||||||||
(In thousands) | 12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | ||||||||||||
1. AOCI in Prior Year | $ | 89,390 | $ | 45,143 | $ | (33,511 | ) | $ | (41,377 | ) | ||||||
2. Increase/(Decrease) in AOCI | ||||||||||||||||
a. Recognized during year - Prior Service (Cost)/Credit | 845 | 930 | 6,649 | 6,649 | ||||||||||||
b. Recognized during year - Net Actuarial (Losses)/Gains | (5,485 | ) | (1,083 | ) | 175 | 435 | ||||||||||
c. Occurring during year - Prior Service Cost | 19 | (1 | ) | — | — | |||||||||||
d. Occurring during year - Net Actuarial Losses/(Gains) | 11,050 | 44,703 | 2,736 | 782 | ||||||||||||
f. Occurring during year - Net Settlement Losses/(Gains) | (3,172 | ) | (302 | ) | — | — | ||||||||||
e. Other adjustments | — | — | — | — | ||||||||||||
3. AOCI in Current Year | $ | 92,647 | $ | 89,390 | $ | (23,951 | ) | $ | (33,511 | ) |
Amortizations Expected to be Recognized During Next Fiscal Year Ending | ||||||||
(In thousands) | Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | ||||||
12/31/2016 | 12/31/2016 | |||||||
1. Amortization of Net Transition Obligation/(Asset) | $ | — | $ | — | ||||
2. Amortization of Prior Service Cost/(Credit) | (689 | ) | (6,649 | ) | ||||
3. Amortization of Net Losses/(Gains) | 5,443 | — |
Actuarial Assumptions | |||||||||||
Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | ||||||||||
12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | ||||||||
Weighted-Average Assumptions Used to Determine | |||||||||||
Benefit Obligations at year end | |||||||||||
1. Discount Rate | 4.65 | % | 4.25 | % | 4.30 | % | 4.00 | % | |||
2. Rate of Compensation Increase | 3.00 | % | 3.00 | % | N/A | N/A | |||||
Weighted-Average Assumptions Used to Determine | |||||||||||
Net Periodic Benefit Cost for Year | |||||||||||
1. Discount Rate | 4.25 | % | 5.15 | % | 4.00 | % | 4.75 | % | |||
2. Expected Long-term Return on Plan Assets | 5.75 | % | 6.00 | % | 7.50 | % | 7.50 | % | |||
3. Rate of Compensation Increase | 3.00 | % | 3.00 | % | N/A | N/A | |||||
Assumed Health Care Cost Trend Rates at year end | |||||||||||
1. Health Care Cost Trend Rate Assumed for Next Year | N/A | N/A | 7.00 | % | 7.00 | % | |||||
2. Rate to Which the Cost Trend Rate is Assumed to Decline (Ultimate Trend Rate) | N/A | N/A | 5.00 | % | 5.00 | % | |||||
3. Year That the Rate Reaches the Ultimate Trend Rate | N/A | N/A | 2020 | 2019 |
Plan Assets | |||||||||||
Pension Plan | Other Postretirement Benefits | ||||||||||
12/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | ||||||||
Allocation of Assets at year end | |||||||||||
1. Equity Securities | 20 | % | 22 | % | 100 | % | 100 | % | |||
2. Debt Securities | 80 | % | 78 | % | — | % | — | % | |||
3. Total | 100 | % | 100 | % | 100 | % | 100 | % |
Pension Plan | ||||||||||||
Assets at Fair Value as of December 31, 2015 | ||||||||||||
(In thousands) | Level 1 | Level 2 | Total | |||||||||
Domestic Mutual Funds | $ | 1,442 | $ | — | $ | 1,442 | ||||||
Corporate Bonds | — | 188,332 | 188,332 | |||||||||
U.S. Government Securities | 3,133 | 497 | 3,630 | |||||||||
Municipals | — | 61,206 | 61,206 | |||||||||
Foreign Bonds | — | 25,251 | 25,251 | |||||||||
ETF's | 5,676 | — | 5,676 | |||||||||
Pooled Equity Accounts | — | 64,570 | 64,570 | |||||||||
Total Assets at fair value | $ | 10,251 | $ | 339,856 | $ | 350,107 |
Pension Plan | ||||||||||||
Assets at Fair Value as of December 31, 2014 | ||||||||||||
(In thousands) | Level 1 | Level 2 | Total | |||||||||
Domestic Mutual Funds | $ | 9,913 | $ | — | $ | 9,913 | ||||||
Corporate Bonds | — | 200,732 | 200,732 | |||||||||
U.S. Government Securities | 5,327 | 1,234 | 6,561 | |||||||||
Municipals | — | 65,214 | 65,214 | |||||||||
Foreign Bonds | — | 23,028 | 23,028 | |||||||||
ETF's | 5,636 | — | 5,636 | |||||||||
Pooled Equity Accounts | — | 67,617 | 67,617 | |||||||||
Total Assets at fair value | $ | 20,876 | $ | 357,825 | $ | 378,701 |
Strategy | Objective | Investment types | |||
Return seeking growth | Funded ratio improvement over the long term | ● | Global quality growth | ||
● | Global low volatility | ||||
Return seeking bridge | Downside protection in the event of a declining | ● | Enduring asset | ||
equity market | ● | Durable company |
Other Postretirement Benefits Plan | ||||||||
Assets at Fair Value as of December 31, 2015 | ||||||||
(In thousands) | Level 1 | Total | ||||||
Domestic Mutual Funds | $ | 49,887 | $ | 49,887 | ||||
International Mutual Funds | 15,681 | 15,681 | ||||||
Total Assets at fair value | $ | 65,568 | $ | 65,568 |
Other Postretirement Benefits Plan | ||||||||
Assets at Fair Value as of December 31, 2014 | ||||||||
(In thousands) | Level 1 | Total | ||||||
Domestic Mutual Funds | $ | 50,710 | $ | 50,710 | ||||
International Mutual Funds | 16,230 | 16,230 | ||||||
Total Assets at fair value | $ | 66,940 | $ | 66,940 |
• | Total return should exceed growth in the Consumer Price Index by 5.75% annually |
• | Achieve competitive investment results |
Minimum | Maximum | ||||
Equities (long only) | 70 | % | 100 | % | |
Real estate | 0 | % | 15 | % | |
Commodities | 0 | % | 10 | % | |
Fixed income/Cash | 0 | % | 10 | % |
Company Contributions | ||||||||
Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | |||||||
(In thousands) | 12/31/2015 | 12/31/2015 | ||||||
Company Contributions for the Year Ending: | ||||||||
1. Current | $ | 17,311 | $ | — | ||||
2. Current + 1 | 11,350 | — |
Benefit Payments (Total) | ||||||||
Pension and Supplemental Executive Retirement Plans | Other Postretirement Benefits | |||||||
(In thousands) | 12/31/2015 | 12/31/2015 | ||||||
Actual Benefit Payments for the Year Ending: | ||||||||
1. Current | $ | 40,307 | $ | 851 | ||||
Expected Benefit Payments for the Year Ending: | ||||||||
2. Current + 1 | 22,992 | 779 | ||||||
3. Current + 2 | 21,773 | 819 | ||||||
4. Current + 3 | 23,353 | 997 | ||||||
5. Current + 4 | 26,065 | 1,079 | ||||||
6. Current + 5 | 26,761 | 1,288 | ||||||
7. Current + 6 - 10 | 140,707 | 8,247 |
(In thousands) | 1-Percentage Point Increase | 1-Percentage Point Decrease | ||||||
Effect on total service and interest cost components | $ | 304 | $ | (253 | ) | |||
Effect on postretirement benefit obligation | 2,221 | (1,959 | ) |
(In thousands) | 2015 | 2014 | ||||||
Total deferred tax assets | $ | 791,286 | $ | 933,576 | ||||
Total deferred tax liabilities | (29,206 | ) | (33,789 | ) | ||||
Net deferred tax asset before valuation allowance | 762,080 | 899,787 | ||||||
Valuation allowance | — | (902,289 | ) | |||||
Net deferred tax asset (liability) | $ | 762,080 | $ | (2,502 | ) |
(In thousands) | 2015 | 2014 | ||||||
Unearned premium reserves | $ | 33,262 | $ | 12,296 | ||||
Benefit plans | (14,283 | ) | (13,900 | ) | ||||
Federal net operating loss | 680,975 | 845,616 | ||||||
Loss reserves | 15,536 | 23,069 | ||||||
Unrealized (appreciation) depreciation in investments | 8,904 | (2,800 | ) | |||||
Mortgage investments | 17,386 | 15,346 | ||||||
Deferred compensation | 12,927 | 11,955 | ||||||
Premium deficiency reserves | — | 8,313 | ||||||
Other, net | 7,373 | (108 | ) | |||||
Net deferred tax asset before valuation allowance | 762,080 | 899,787 | ||||||
Valuation allowance | — | (902,289 | ) | |||||
Net deferred tax asset (liability) | $ | 762,080 | $ | (2,502 | ) |
(In millions) | For the year ended December 31, 2015 | |||
Balance at December 31, 2014 | $ | 902.3 | ||
Reduction in tax provision in current year | (161.1 | ) | ||
Amounts recorded in other comprehensive income in the current year | 6.3 | |||
Change in valuation allowance for deferred tax assets in the current year | (154.8 | ) | ||
Reduction in tax provision for amounts to be realized in future years | (686.7 | ) | ||
Amounts recorded in other comprehensive income to be realized in future years | (60.8 | ) | ||
Change in valuation allowance for deferred tax assets realizable in future years | (747.5 | ) | ||
Balance at December 31, 2015 | $ | — |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Provision for (benefit from) income taxes before valuation allowance | $ | 163,497 | $ | 91,607 | $ | (17,239 | ) | |||||
Change in valuation allowance | (161,158 | ) | (88,833 | ) | 20,935 | |||||||
Reversal of the valuation allowance | (686,652 | ) | — | — | ||||||||
(Benefit from) provision for income taxes | $ | (684,313 | ) | $ | 2,774 | $ | 3,696 |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Current Federal | $ | 8,067 | $ | 2,391 | $ | 916 | ||||||
Deferred Federal | (686,652 | ) | 1 | 7 | ||||||||
Other | (5,728 | ) | 382 | 2,773 | ||||||||
(Benefit from) provision for income taxes | $ | (684,313 | ) | $ | 2,774 | $ | 3,696 |
2015 | 2014 | 2013 | ||||||
Federal statutory income tax rate | 35.0 | % | 35.0 | % | (35.0 | )% | ||
Valuation allowance | (173.8 | )% | (34.9 | )% | 45.4 | % | ||
Tax exempt municipal bond interest | (0.8 | )% | (0.4 | )% | (3.7 | )% | ||
Other, net | (0.7 | )% | 1.4 | % | 1.3 | % | ||
Effective tax rate (benefit) provision | (140.3 | )% | 1.1 | % | 8.0 | % |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Balance at beginning of year | $ | 106,230 | $ | 105,366 | $ | 104,550 | ||||||
Additions based on tax positions related to the current year | — | — | — | |||||||||
Additions for tax positions of prior years | 890 | 864 | 816 | |||||||||
Reductions for tax positions of prior years | — | — | — | |||||||||
Settlements | — | — | — | |||||||||
Balance at end of year | $ | 107,120 | $ | 106,230 | $ | 105,366 |
(In thousands) | Net (loss) income | Surplus | Contingency Reserve | |||||||||
Years Ended December 31, | ||||||||||||
2015 | $ | (72,767 | ) | (1) | $ | 1,608,214 | (1) | $ | 826,706 | |||
2014 | 13,203 | 1,585,164 | 318,247 | |||||||||
2013 | (8,046 | ) | 1,584,121 | 18,558 |
(1) | The dissolution of an MGIC non-insurance subsidiary in 2015 had no impact on statutory surplus as the equity value of the investment was fully reflected in surplus as an unrealized loss prior to 2015. |
(In thousands) | Additions to the surplus of MGIC from parent company funds | Additions to the surplus of other insurance subsidiaries from parent company funds | Dividends paid by MGIC to the parent company | Dividends paid by other insurance subsidiaries to the parent company | ||||||||||||
Years Ended December 31, | ||||||||||||||||
2015 | $ | — | $ | — | $ | — | $ | 38,500 | ||||||||
2014 | — | — | — | — | ||||||||||||
2013 | 800,000 | — | — | — |
Weighted Average Grant Date Fair Market Value | Shares | |||||
Restricted stock outstanding at December 31, 2014 | $ | 6.33 | 3,852,391 | |||
Granted | 9.03 | 1,554,100 | ||||
Vested | 5.92 | (1,893,116 | ) | |||
Forfeited | 4.39 | (193,908 | ) | |||
Restricted stock outstanding at December 31, 2015 | $ | 7.97 | 3,319,467 |
2016 | $ | 742 | |
2017 | 636 | ||
2018 | 486 | ||
2019 | 498 | ||
2020 and thereafter | 512 | ||
Total | $ | 2,874 |
2015: | Quarter | Full | ||||||||||||||||||
(In thousands, except per share data) | First | Second | Third | Fourth | Year | |||||||||||||||
Net premiums earned | $ | 217,288 | $ | 213,508 | $ | 239,234 | $ | 226,192 | $ | 896,222 | ||||||||||
Investment income, net of expenses | 24,120 | 25,756 | 25,939 | 27,926 | 103,741 | |||||||||||||||
Realized gains | 26,327 | 166 | 640 | 1,228 | 28,361 | |||||||||||||||
Other revenue | 2,480 | 3,699 | 3,698 | 2,580 | 12,457 | |||||||||||||||
Loss incurred, net | 81,785 | 90,238 | 76,458 | 95,066 | 343,547 | |||||||||||||||
Underwriting and other expenses, net | 51,969 | 37,915 | 65,805 | 53,858 | 209,547 | |||||||||||||||
Provision (benefit) for income tax | 3,385 | 1,322 | (695,604 | ) | 6,584 | (684,313 | ) | |||||||||||||
Net income | 133,076 | 113,654 | 822,852 | 102,418 | 1,172,000 | |||||||||||||||
Income per share (a) (b): | ||||||||||||||||||||
Basic | 0.39 | 0.33 | 2.42 | 0.30 | 3.45 | |||||||||||||||
Diluted | 0.32 | 0.28 | 1.78 | 0.24 | 2.60 |
2014: | Quarter | Full | ||||||||||||||||||
(In thousands, except per share data) | First | Second | Third | Fourth | Year | |||||||||||||||
Net premiums earned | $ | 214,261 | $ | 207,486 | $ | 209,035 | $ | 213,589 | $ | 844,371 | ||||||||||
Investment income, net of expenses | 20,156 | 21,180 | 22,355 | 23,956 | 87,647 | |||||||||||||||
Realized (losses) gains | (231 | ) | 522 | 632 | 434 | 1,357 | ||||||||||||||
Other revenue | 896 | 2,048 | 3,093 | 2,385 | 8,422 | |||||||||||||||
Loss incurred, net | 122,608 | 141,141 | 115,254 | 117,074 | 496,077 | |||||||||||||||
Underwriting and other expenses, net | 51,766 | 43,455 | 47,595 | 48,181 | 190,997 | |||||||||||||||
Provision for income tax | 726 | 1,118 | 249 | 681 | 2,774 | |||||||||||||||
Net income | 59,982 | 45,522 | 72,017 | 74,428 | 251,949 | |||||||||||||||
Income per share (a) (b): | ||||||||||||||||||||
Basic | 0.18 | 0.13 | 0.21 | 0.22 | 0.74 | |||||||||||||||
Diluted | 0.15 | 0.12 | 0.18 | 0.19 | 0.64 |
(a) | Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of the quarterly per share data may not equal the per share data for the year. |
(b) | In periods where convertible debt instruments are dilutive to earnings per share the “if-converted” method of computing diluted EPS requires an interest expense adjustment, net of tax, to net income available to shareholders. The interest expense adjustment was not tax effected for all 2014 periods presented due to our valuation allowance on deferred tax assets. See Note 3 – “Summary of Significant Accounting Policies” for further discussion. |
(a) | (b) | (c) | ||||||||
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||
Equity compensation plans approved by security holders | 3,310,734 | (1) | $ | — | 9,970,000 | (2) | ||||
Equity compensation plans not approved by security holders | — | — | — | |||||||
Total | 3,310,734 | (1) | $ | — | 9,970,000 | (2) |
(1) | Includes 30,000 restricted stock units (RSUs) granted under our 2015 Omnibus Incentive Plan (the “2015 Plan”) that are subject to performance conditions. Includes 3,238,648 RSUs granted under our 2011 Omnibus Incentive Plan (the “2011 Plan”) for which shares will be issued if certain criteria are met. Of the RSUs granted under the 2011 Plan, 2,415,443 RSUs are subject to performance conditions and the remaining RSUs are subject to service conditions. Also includes 42,086 vested RSUs granted under our 2002 Stock Incentive Plan for which shares will be issued in the future. |
(2) | Reflects shares available for granting. All of these shares are available under our 2015 Plan. |
1. | Financial statements. The following financial statements are filed in Item 8 of this annual report: |
Consolidated balance sheets at December 31, 2015 and 2014 | |
Consolidated statements of operations for each of the three years in the period ended December 31, 2015 | |
Consolidated statements of comprehensive income for each of the three years in the period ended December 31, 2015 | |
Consolidated statements of shareholders’ equity for each of the three years in the period ended December 31, 2015 | |
Consolidated statements of cash flows for each of the three years in the period ended December 31, 2015 | |
Notes to consolidated financial statements | |
Report of independent registered public accounting firm |
2. | Financial statement schedules. The following financial statement schedules are filed as part of this Form 10-K and appear immediately following the signature page: |
Report of independent registered public accounting firm on financial statement schedules | |
Schedules at and for the specified years in the three-year period ended December 31, 2015: | |
Schedule I - Summary of investments, other than investments in related parties | |
Schedule II - Condensed financial information of Registrant | |
Schedule IV – Reinsurance | |
All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedules, or because the information required is included in the consolidated financial statements and notes thereto. |
3. | Exhibits. The accompanying Index to Exhibits is incorporated by reference in answer to this portion of this Item and, except as otherwise indicated in the next sentence, the Exhibits listed in such Index are filed as part of this Form 10-K. Exhibit 32 is not filed as part of this Form 10-K but accompanies this Form 10-K. |
/s/ Patrick Sinks | |
Patrick Sinks | |
President, Chief Executive Officer and Director |
/s/ Patrick Sinks | /s/ Curt S. Culver | |
Patrick Sinks | Curt S. Culver, Director | |
President, Chief Executive Officer and Director | ||
/s/ Timothy A. Holt | ||
/s/ Timothy J. Mattke | Timothy A. Holt, Director | |
Timothy J. Mattke | ||
Executive Vice President and | ||
Chief Financial Officer | /s/ Kenneth M. Jastrow, II | |
(Principal Financial Officer) | Kenneth M. Jastrow, II, Director | |
/s/ Julie K. Sperber | /s/ Michael E. Lehman | |
Julie K. Sperber | Michael E. Lehman, Director | |
Vice President, Controller and | ||
Chief Accounting Officer | ||
(Principal Accounting Officer) | /s/ Donald T. Nicolaisen | |
Donald T. Nicolaisen, Director | ||
/s/ Daniel A. Arrigoni | ||
Daniel A. Arrigoni, Director | /s/ Gary A. Poliner | |
Gary A. Poliner, Director | ||
/s/ Cassandra C. Carr | ||
Cassandra C. Carr, Director | /s/ Mark M. Zandi | |
Mark M. Zandi, Director | ||
/s/ C. Edward Chaplin | ||
C. Edward Chaplin, Director | ||
(In thousands) Type of Investment | Amortized Cost | Fair Value | Amount at which shown in the balance sheet | |||||||||
Fixed maturities: | ||||||||||||
Bonds: | ||||||||||||
United States Government and government agencies and authorities | $ | 160,393 | $ | 160,584 | $ | 160,584 | ||||||
States, municipalities and political subdivisions | 1,766,407 | 1,792,527 | 1,792,527 | |||||||||
Foreign governments | 29,359 | 31,731 | 31,731 | |||||||||
Public utilities | 182,945 | 179,209 | 179,209 | |||||||||
Asset-backed securities | 116,764 | 116,617 | 116,617 | |||||||||
Collateralized loan obligations | 61,345 | 60,200 | 60,200 | |||||||||
Mortgage-backed | 503,183 | 491,139 | 491,139 | |||||||||
All other corporate bonds | 1,863,752 | 1,825,554 | 1,825,554 | |||||||||
Total fixed maturities | 4,684,148 | 4,657,561 | 4,657,561 | |||||||||
Equity securities: | ||||||||||||
Common stocks: | ||||||||||||
Industrial, miscellaneous and all other | 5,625 | 5,645 | 5,645 | |||||||||
Total equity securities | 5,625 | 5,645 | 5,645 | |||||||||
Total investments | $ | 4,689,773 | $ | 4,663,206 | $ | 4,663,206 |
(In thousands) | 2015 | 2014 | ||||||
ASSETS | ||||||||
Fixed maturities (amortized cost, 2015 – $385,281; 2014 – $482,629) | $ | 382,565 | $ | 480,125 | ||||
Cash and cash equivalents | 19,417 | 10,507 | ||||||
Investment in subsidiaries, at equity in net assets | 2,903,944 | 1,821,024 | ||||||
Accounts receivable - affiliates | 938 | 312 | ||||||
Income taxes - current and deferred | 151,318 | 17,478 | ||||||
Accrued investment income | 3,700 | 3,435 | ||||||
Other assets | 11,325 | 15,156 | ||||||
Total assets | $ | 3,473,207 | $ | 2,348,037 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Liabilities: | ||||||||
Senior notes | $ | — | $ | 61,918 | ||||
Convertible senior notes | 833,503 | 845,000 | ||||||
Convertible junior debentures | 389,522 | 389,522 | ||||||
Accrued interest | 14,042 | 14,694 | ||||||
Total liabilities | 1,237,067 | 1,311,134 | ||||||
Shareholders’ equity: | ||||||||
Common stock, (one dollar par value, shares authorized 1,000,000; shares issued 2015 – 340,097; 2014 – 340,047; outstanding 2015 – 339,657; 2014 – 338,560) | 340,097 | 340,047 | ||||||
Paid-in capital | 1,670,238 | 1,663,592 | ||||||
Treasury stock (shares at cost, 2015 – 440; 2014 – 1,487) | (3,362 | ) | (32,937 | ) | ||||
Accumulated other comprehensive loss, net of tax | (60,880 | ) | (81,341 | ) | ||||
Retained earnings (deficit) | 290,047 | (852,458 | ) | |||||
Total shareholders’ equity | 2,236,140 | 1,036,903 | ||||||
Total liabilities and shareholders’ equity | $ | 3,473,207 | $ | 2,348,037 |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Revenues: | ||||||||||||
Investment income, net of expenses | $ | 7,586 | $ | 6,985 | $ | 5,033 | ||||||
Net realized investment gains | 357 | 395 | 830 | |||||||||
Total revenues | 7,943 | 7,380 | 5,863 | |||||||||
Expenses: | ||||||||||||
Operating expenses and other | 1,089 | 1,383 | 511 | |||||||||
Interest expense | 68,932 | 69,648 | 79,663 | |||||||||
Total expenses | 70,021 | 71,031 | 80,174 | |||||||||
Loss before tax | (62,078 | ) | (63,651 | ) | (74,311 | ) | ||||||
Benefit from income taxes | (125,487 | ) | — | — | ||||||||
Equity in net income of subsidiaries | 1,108,591 | 315,600 | 24,463 | |||||||||
Net income (loss) | 1,172,000 | 251,949 | (49,848 | ) | ||||||||
Other comprehensive income (loss), net of tax | 20,461 | 36,385 | (69,563 | ) | ||||||||
Comprehensive income (loss) | $ | 1,192,461 | $ | 288,334 | $ | (119,411 | ) |
(In thousands) | 2015 | 2014 | 2013 | |||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 1,172,000 | $ | 251,949 | $ | (49,848 | ) | |||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||
Equity in net income of subsidiaries | (1,108,591 | ) | (315,600 | ) | (24,463 | ) | ||||||
Dividends received from subsidiaries | 6,500 | — | — | |||||||||
Deferred tax benefit | (125,532 | ) | — | — | ||||||||
Other | 22,849 | 14,862 | 21,693 | |||||||||
Change in certain assets and liabilities: | ||||||||||||
Accounts receivable - affiliates | (626 | ) | 68 | 289 | ||||||||
Income taxes receivable | (8,308 | ) | 480 | (3 | ) | |||||||
Accrued investment income | (265 | ) | 194 | (2,611 | ) | |||||||
Accrued interest | (652 | ) | (188 | ) | (15,577 | ) | ||||||
Net cash used in operating activities | (42,625 | ) | (48,235 | ) | (70,520 | ) | ||||||
Cash flows from investing activities: | ||||||||||||
Capital distributions from (contributions to) subsidiaries | 32,000 | — | (800,000 | ) | ||||||||
Purchase of fixed maturities | (295,010 | ) | (553,538 | ) | (563,968 | ) | ||||||
Sale of fixed maturities | 386,385 | 613,322 | 148,608 | |||||||||
Net cash provided by (used in) investing activities | 123,375 | 59,784 | (1,215,360 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||
Net proceeds from convertible senior notes | — | — | 484,625 | |||||||||
Common stock shares issued | — | — | 663,335 | |||||||||
Repayment of long-term debt | (73,957 | ) | (21,767 | ) | (17,235 | ) | ||||||
Excess tax benefits related to share-based compensation | 2,117 | — | — | |||||||||
Net cash (used in) provided by financing activities | (71,840 | ) | (21,767 | ) | 1,130,725 | |||||||
Net increase (decrease) in cash and cash equivalents | 8,910 | (10,218 | ) | (155,155 | ) | |||||||
Cash and cash equivalents at beginning of year | 10,507 | 20,725 | 175,880 | |||||||||
Cash and cash equivalents at end of year | $ | 19,417 | $ | 10,507 | $ | 20,725 |
(Dollars in thousands) | Gross Amount | Ceded to Other Companies | Assumed From Other Companies | Net Amount | Percentage of Amount Assumed to Net | ||||||||||||||
Years ended December 31, | |||||||||||||||||||
2015 | $ | 997,892 | $ | 102,848 | $ | 1,178 | $ | 896,222 | 0.1 | % | |||||||||
2014 | 950,973 | 108,255 | 1,653 | 844,371 | 0.2 | % | |||||||||||||
2013 | 979,078 | 38,101 | 2,074 | 943,051 | 0.2 | % |
• | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements provide to be inaccurate; |
• | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
• | may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and |
• | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
Incorporated by Reference | ||||||||
Exhibit Number | Description of Exhibit | Form | Exhibit(s) | Filing Date | ||||
3.1 | Articles of Incorporation, as amended. | 10-Q | 3.1 | August 8, 2013 | ||||
3.2 | Amended and Restated Bylaws, as amended. | 8-K | 3.2 | July 25, 2014 | ||||
4.1 | Articles of Incorporation (included within Exhibit 3.1). | 10-Q | 3.1 | August 8, 2013 | ||||
4.2 | Amended and Restated Bylaws (included as Exhibit 3.2). | 8-K | 3.2 | July 25, 2014 | ||||
4.3 | Amended and Restated Rights Agreement, dated as of July 23, 2015, between MGIC Investment Corporation and Wells Fargo Bank, National Association, which includes as Exhibit A thereto the Form of Right Certificate, as Exhibit B thereto the Summary of Rights to Purchase Common Shares, and as Exhibit C thereto the Form of Representation and Request Letter. | 8-A/A | 4.1 | July 24, 2015 | ||||
4.4 | Indenture, dated as of October 15, 2000, between the MGIC Investment Corporation and Bank One Trust Company, National Association, as Trustee. [File 001-10816] | 8-K | 4.1 | October 19, 2000 | ||||
4.5 | Supplemental Indenture, dated as of April 26, 2010, between MGIC Investment Corporation and U.S. Bank National Association (as successor to Bank One Trust Company, National Association), as Trustee, under the Indenture, dated as of October 15, 2000, between the Company and the Trustee. | 8-K | 4.1 | April 30, 2010 | ||||
4.6 | Indenture, dated as of March 28, 2008, between U.S. Bank National Association, as trustee, and MGIC Investment Corporation. [File 001‑10816] | 10-Q | 4.6 | May 12, 2008 |
Incorporated by Reference | ||||||||
Exhibit Number | Description of Exhibit | Form | Exhibit(s) | Filing Date | ||||
4.7 | Second Supplemental Indenture, dated as of March 15, 2013, between MGIC Investment Corporation and U.S. Bank National Association (as successor to Bank One Trust Company, National Association), as Trustee, under the Indenture, dated as of October 15, 2000, between the Company and the Trustee. | 8-K | 4.1 | March 15, 2013 | ||||
[We are a party to various other agreements with respect to our long-term debt. These agreements are not being filed pursuant to Reg. S-K Item 601(b) (4) (iii) (A). We hereby agree to furnish a copy of such agreements to the Commission upon its request.] | ||||||||
10.2.4 | Form of Restricted Stock and Restricted Stock Unit Agreement (for Directors) under 2002 Stock Incentive Plan. [File 001‑10816] * | 10-K | 10.2.4 | March 16, 2005 | ||||
10.2.5 | Form of Incorporated Terms to Restricted Stock and Restricted Stock Unit Agreement (for Directors) under 2002 Stock Incentive Plan. [File 001‑10816] * | 10-K | 10.2.5 | March 16, 2005 | ||||
10.2.10 | Form of Restricted Stock Unit Agreement under 2011 Omnibus Incentive Plan (Adopted January 2013). * | 10-K | 10.2.10 | February 28, 2014 | ||||
10.2.11 | Form of Incorporated Terms to Restricted Stock Unit Agreement under 2011 Omnibus Incentive Plan (Adopted January 2013). * | 10-K | 10.2.11 | February 28, 2014 | ||||
10.2.12 | Form of Restricted Stock Unit Agreement under 2011 Omnibus Incentive Plan (Adopted January 2014). * | 10-K | 10.2.12 | February 27, 2015 | ||||
10.2.13 | Form of Incorporated Terms to Restricted Stock Unit Agreement under 2011 Omnibus Incentive Plan (Adopted January 2014). * | 10-K | 10.2.13 | February 27, 2015 | ||||
10.2.14 | Form of Restricted Stock Unit Agreement under 2011 Omnibus Incentive Plan (Adopted January 2015). * † | |||||||
10.2.15 | Form of Incorporated Terms to Restricted Stock Unit Agreement under 2011 Omnibus Incentive Plan (Adopted January 2015). * † | |||||||
10.3 | MGIC Investment Corporation 1991 Stock Incentive Plan. [File 001‑10816] * | 10-K | 10.7 | March 29, 2000 | ||||
10.3.1 | MGIC Investment Corporation 2002 Stock Incentive Plan, as amended. * | 10-K | 10/3/2001 | March 1, 2011 | ||||
10.3.2 | MGIC Investment Corporation 2011 Omnibus Incentive Plan. * | DEF 14A | App. B | March 31, 2011 | ||||
10.3.3 | MGIC Investment Corporation 2015 Omnibus Incentive Plan * | DEF 14A | App. A | March 24, 2015 | ||||
10.5 | Two Forms of Restricted Stock Award Agreement under 1991 Stock Incentive Plan. [File 001‑10816] * | 10-K | 10.10 | March 29, 2000 |
Incorporated by Reference | ||||||||
Exhibit Number | Description of Exhibit | Form | Exhibit(s) | Filing Date | ||||
10.6 | Executive Bonus Plan. * † | |||||||
10.7 | Supplemental Executive Retirement Plan. * | 8-K | 10.7 | January 29, 2014 | ||||
10.8 | MGIC Investment Corporation Deferred Compensation Plan for Non-Employee Directors, as amended.* | 10-K | 10.8 | February 27, 2015 | ||||
10.9 | MGIC Investment Corporation 1993 Restricted Stock Plan for Non-Employee Directors. [File 001‑10816] * | 10-K | 10.24 | March 25, 1994 | ||||
10.10 | Two Forms of Award Agreement under MGIC Investment Corporation 1993 Restricted Stock Plan for Non-Employee Directors.* | 10-Q | 10.27 and 10.28 | August 12, 1994 | ||||
10.11.1 | Form of Key Executive Employment and Severance Agreement. * | 10-K | 10.11.1 | February 27, 2015 | ||||
10.11.2 | Form of Incorporated Terms to Key Executive Employment and Severance Agreement. * † | 10-K | 10.11.2 | February 27, 2015 | ||||
10.12 | Form of Agreement Not to Compete. * | 10-K | 10.12 | March 1, 2013 | ||||
10.14 | Confidential Settlement Agreement and Release dated as of April 19, 2013 (“BANA Agreement”), by and between Mortgage Guaranty Insurance Corporation and Bank of America, N.A. (as a successor to BAC Home Loans Servicing f/k/a Countrywide Home Loans Servicing LP), on its own behalf and as successor in interest by de jure merger to Countrywide Bank FSB, formerly Treasury Bank. Countrywide Home Loans, Inc. is also a party to the BANA Agreement solely to the extent specified in BANA Agreement. ** | 8-K | 10.1 | April 25, 2013 | ||||
10.15 | Confidential Settlement Agreement and Release dated as of April 19, 2013 (“CHL Agreement”), by and between Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the CHL Agreement). ** | 8-K | 10.2 | April 25, 2013 | ||||
10.16 | Consulting Agreement between J. Michael Lauer and Mortgage Guaranty Insurance Corporation dated as of March 3, 2014. * | 10-K | 10.2 | February 28, 2014 | ||||
10.17 | Amended & Restated Confidential Settlement Agreement and Release dated as of March 2, 2015 (“A&R Agreement”), by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the A&R Agreement) ** | 8-K | 10.1 | March 5, 2015 | ||||
21 | Direct and Indirect Subsidiaries. † | |||||||
23 | Consent of Independent Registered Public Accounting Firm. † |
Incorporated by Reference | ||||||||
Exhibit Number | Description of Exhibit | Form | Exhibit(s) | Filing Date | ||||
31.1 | Certification of CEO under Section 302 of the Sarbanes-Oxley Act of 2002. † | |||||||
31.2 | Certification of CFO under Section 302 of the Sarbanes-Oxley Act of 2002. † | |||||||
32 | Certification of CEO and CFO under Section 906 of the Sarbanes-Oxley Act of 2002 (as indicated in Item 15 of this Annual Report on Form 10-K, this Exhibit is not being “filed”). †† | |||||||
99.1 | Mortgage Guaranty Insurance Corporation’s “Flow” Master Insurance Policy and Declaration Page, Restated to Include Selected Endorsements. | 10-K | 99.1 | March 2, 2009 | ||||
99.2 | Endorsement to Mortgage Guaranty Insurance Corporation’s “Flow” Master Insurance Policy Applicable to Lenders with Delegated Underwriting Authority. | 10-K | 99.2 | March 2, 2009 | ||||
99.7 | Specimen Gold Cert Endorsement | 10-Q | 99.7 | May 10, 2012 | ||||
99.8 | Amendment to BANA Confidential Settlement Agreement and Release made as of September 24, 2013 by and between Mortgage Guaranty Insurance Corporation and Bank of America, N.A. (as a successor to BAC Home Loans Servicing f/k/a Countrywide Home Loans Servicing LP), on its own behalf and as successor in interest by de jure merger to Countrywide Bank FSB, formerly Treasury Bank. Countrywide Home Loans, Inc. is also a party to the settlement agreement only to the extent specified in the settlement agreement. ** | 10-Q | 10.14.1 | November 8, 2013 | ||||
99.9 | Amendment to Confidential Settlement Agreement and Release made as of September 24, 2013 by and between Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) ** | 10-Q | 10.14.1 | November 8, 2013 | ||||
99.10 | Letter Agreement dated October 9, 2013 among Fannie Mae, Bank of America, N.A., Countrywide Home Loans, Inc. and Mortgage Guaranty Insurance Corporation. ** | 10-K | 99.10 | February 28, 2014 | ||||
99.11 | Letter Agreement October 9, 2013 among Bank of America, N.A., Countrywide Home Loans, Inc. and Mortgage Guaranty Insurance Corporation. ** | 10-K | 99.11 | February 28, 2014 | ||||
99.12 | Second Amendment to Confidential Settlement Agreement and Release made as of November 8, 2013 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) | 10-K | 99.12 | February 28, 2014 | ||||
99.13 | Third Amendment to Confidential Settlement Agreement and Release made as of March 13, 2014 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) | 10-Q | 99.13 | May 9, 2014 |
Incorporated by Reference | ||||||||
Exhibit Number | Description of Exhibit | Form | Exhibit(s) | Filing Date | ||||
99.14 | Second Amendment to BANA Confidential Settlement Agreement and Release made as of June 5, 2014 by and between Mortgage Guaranty Insurance Corporation and Bank of America, N.A. (as a successor to BAC Home Loans Servicing f/k/a Countrywide Home Loans Servicing LP), on its own behalf and as successor in interest by de jure merger to Countrywide Bank FSB, formerly Treasury Bank. Countrywide Home Loans, Inc. is also a party to the settlement agreement only to the extent specified in the settlement agreement. ** | 10-Q | 99.14 | August 8, 2014 | ||||
99.15 | Fourth Amendment to Confidential Settlement Agreement and Release made as of May 19, 2014 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) | 10-Q | 99.15 | August 8, 2014 | ||||
99.16 | Fifth Amendment to Confidential Settlement Agreement and Release made as of June 5, 2014 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) ** | 10-Q | 99.16 | August 8, 2014 | ||||
99.17 | Sixth Amendment to Confidential Settlement Agreement and Release made as of August 31, 2014 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) | 10-Q | 99.17 | November 7, 2014 | ||||
99.18 | Seventh Amendment to Confidential Settlement Agreement and Release made as of September 11, 2014 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) | 10-Q | 99.18 | November 7, 2014 | ||||
99.19 | Mortgage Guaranty Insurance Corporation’s “Flow” Master Insurance Policy for loans with a mortgage insurance application date on or after October 1, 2014 | 10-Q | 99.19 | November 7, 2014 | ||||
99.20 | Eighth Amendment to Confidential Settlement Agreement and Release made as of October 30, 2014 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) † | 10-K | 99.20 | February 27, 2015 | ||||
99.21 | Ninth Amendment to Confidential Settlement Agreement and Release made as of November 30, 2014 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) † | 10-K | 99.21 | February 27, 2015 | ||||
99.22 | Tenth Amendment to Confidential Settlement Agreement and Release made as of January 29, 2015 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) † | 10-K | 99.22 | February 27, 2015 | ||||
Incorporated by Reference | ||||||||
Exhibit Number | Description of Exhibit | Form | Exhibit(s) | Filing Date | ||||
99.23 | Eleventh Amendment to Confidential Settlement Agreement and Release made as of February 6, 2015 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) † | 10-K | 99.23 | February 27, 2015 | ||||
99.24 | Twelfth Amendment to Confidential Settlement Agreement and Release made as of February 13, 2015 by and among Mortgage Guaranty Insurance Corporation, Countrywide Home Loans, Inc. and Bank of America, N.A., in its capacity as master servicer or servicer of Subject Loans (as defined in the settlement agreement) † | 10-K | 99.24 | February 27, 2015 | ||||
99.25 | Endorsement to Mortgage Guaranty Insurance Corporation’s “Flow” Master Insurance Policy Applicable to Lenders with Delegated Underwriting Authority, for loans with a mortgage insurance application date on or after October 1, 2014 | 10-Q | 99.3 | May 7, 2015 | ||||
99.26 | Advances, Collateral Pledge, and Security Agreement dated as of July 21, 2015 between the Federal Home Loan Bank of Chicago and Mortgage Guaranty Insurance Corporation † | |||||||
101 | The following financial information from MGIC Investment Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2015 and 2014 (ii) Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, (iv) Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2015, 2014, and 2013, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013, and (vi) the Notes to Consolidated Financial Statements. |
* | Denotes a management contract or compensatory plan. |
** | Certain portions of these Exhibits are redacted and covered by a confidential treatment request that has been granted. Omitted portions have been filed separately with the Securities and Exchange Commission. |
† | Filed herewith. |
†† | Furnished herewith. |
Date of Agreement: | As of January 26, 2015 |
MGIC INVESTMENT CORPORATION By: Title: Authorized Signer | |
Sign Here: | Name: |
Beneficiary Name: Address of Beneficiary: Beneficiary Tax Identification No: | |
* * * * | |
Time Vested RSUs: | |
Time Vested Restricted Stock Units: | |
Time Vested RSUs Release Date: | |
Goal: | |
Performance RSUs: | |
Performance Restricted Stock Units: | |
Performance RSUs Release Date: | |
Performance RSUs Vesting Metric: | |
General: | |
Holding Period: | |
Dividend Start Date: | |
1. | MGIC Assurance Corporation |
2. | MGIC Australia Pty Limited(2) |
3. | MGIC Credit Assurance Corporation |
4. | MGIC Indemnity Corporation |
5. | MGIC Insurance Services Corporation |
6. | MGIC Investor Services Corporation |
7. | MGIC Mortgage and Consumer Asset I, LLC(3) |
8. | MGIC Mortgage and Consumer Asset II, LLC(3) |
9. | MGIC Mortgage Reinsurance Corporation |
10. | MGIC Mortgage Services, LLC |
11. | MGIC Reinsurance Corporation |
12. | MGIC Reinsurance Corporation of Vermont(4) |
13. | MGIC Reinsurance Corporation of Wisconsin |
14. | MGIC Residential Reinsurance Corporation |
15. | MIC Reinsurance Corporation of Wisconsin |
16. | MIC Reinsurance Corporation |
17. | MGICA Pty Limited(2) |
18. | Mortgage Guaranty Insurance Corporation |
(1) | Except as otherwise noted in a footnote, all companies listed are 100% directly or indirectly owned by the registrant and all are incorporated in Wisconsin. |
(2) | Organized under Australian law. |
(3) | Organized under Delaware law. |
(4) | Organized under Vermont law. |
1. | I have reviewed this annual report on Form 10-K of MGIC Investment Corporation; |
2. | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Patrick Sinks |
Patrick Sinks |
Chief Executive Officer |
(Principal Executive Officer) |
1. | I have reviewed this annual report on Form 10-K of MGIC Investment Corporation; |
2. | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Timothy J. Mattke |
Timothy J. Mattke |
Chief Financial Officer |
(Principal Financial Officer) |
(1) | the Annual Report on Form 10-K of the Company for the year ended December 31, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Patrick Sinks |
Patrick Sinks |
Chief Executive Officer |
/s/ Timothy J. Mattke |
Timothy J. Mattke |
Chief Financial Officer |
(a) | (1) If an Event of Default has occurred and is continuing, the Bank may at its option, and without notice to or request from the Member, or |
(1) | Terminate any consent given hereunder; |
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Document and Entity Information - USD ($) $ in Billions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Feb. 12, 2016 |
Jun. 30, 2015 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MGIC INVESTMENT CORP | ||
Entity Central Index Key | 0000876437 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 3.8 | ||
Entity Common Stock, Shares Outstanding | 340,008,569 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Jun. 30, 2013 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Fixed maturities, amortized cost | $ 4,684,148 | $ 4,602,514 | |
Shareholders' equity | |||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 680,000,000 |
Common stock, shares issued (in shares) | 340,097,000 | 340,047,000 | |
Common stock, shares outstanding (in shares) | 339,657,000 | 338,560,000 | |
Treasury stock, shares at cost (in shares) | 440,000 | 1,487,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||||
Premiums written: | |||||||||
Direct | $ 1,074,490 | $ 999,943 | $ 994,910 | ||||||
Assumed | 1,178 | 1,653 | 2,074 | ||||||
Ceded | (55,391) | (119,634) | (73,503) | ||||||
Net premiums written | 1,020,277 | 881,962 | 923,481 | ||||||
(Increase) decrease in unearned premiums | (124,055) | (37,591) | 19,570 | ||||||
Net premiums earned | 896,222 | 844,371 | 943,051 | ||||||
Investment income, net of expenses | 103,741 | 87,647 | 80,739 | ||||||
Net realized investment gains (losses) | |||||||||
Total other-than-temporary impairment losses | 0 | (144) | (328) | ||||||
Portion of losses recognized in other comprehensive income (loss), before taxes | 0 | 0 | 0 | ||||||
Net impairment losses recognized in earnings | 0 | (144) | (328) | ||||||
Other realized investment gains | 28,361 | 1,501 | 6,059 | ||||||
Net realized investment gains | 28,361 | 1,357 | 5,731 | ||||||
Other revenue | 12,457 | 8,422 | 9,914 | ||||||
Total revenues | 1,040,781 | 941,797 | 1,039,435 | ||||||
Losses and expenses: | |||||||||
Losses incurred, net | 343,547 | 496,077 | 838,726 | ||||||
Change in premium deficiency reserve | (23,751) | (24,710) | (25,320) | ||||||
Amortization of deferred policy acquisition costs | 8,789 | 7,618 | 10,641 | ||||||
Other underwriting and operating expenses, net | 155,577 | 138,441 | 181,877 | ||||||
Interest expense | 68,932 | 69,648 | 79,663 | ||||||
Total losses and expenses | 553,094 | 687,074 | 1,085,587 | ||||||
Income (loss) before tax | 487,687 | 254,723 | (46,152) | ||||||
(Benefit from) provision for income tax | (684,313) | 2,774 | 3,696 | ||||||
Net income (loss) | $ 1,172,000 | $ 251,949 | $ (49,848) | ||||||
Income (loss) per share | |||||||||
Basic (in dollars per share) | $ 3.45 | [1],[2] | $ 0.74 | [1] | $ (0.16) | ||||
Diluted (in dollars per share) | $ 2.60 | [1],[2] | $ 0.64 | [1] | $ (0.16) | ||||
Weighted average common shares outstanding - basic (in shares) | 339,552 | 338,523 | 311,754 | ||||||
Weighted average common shares outstanding - diluted (in shares) | 468,039 | 413,522 | 311,754 | ||||||
Dividends per share (in dollars per share) | $ 0 | $ 0 | $ 0 | ||||||
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 1,172,000 | $ 251,949 | $ (49,848) |
Other comprehensive income (loss), net of tax | |||
Change in unrealized investment gains and losses | 40,403 | 91,139 | (123,591) |
Benefit plans adjustment | (15,714) | (52,112) | 68,038 |
Foreign currency translation adjustment | (4,228) | (2,642) | (14,010) |
Total other comprehensive income, net of tax | 20,461 | 36,385 | (69,563) |
Comprehensive income (loss) | $ 1,192,461 | $ 288,334 | $ (119,411) |
Nature of Business |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Nature of Business [Abstract] | |
Nature of Business | Nature of Business MGIC Investment Corporation is a holding company which, through Mortgage Guaranty Insurance Corporation (“MGIC”) and several other subsidiaries, is principally engaged in the mortgage insurance business. We provide mortgage insurance to lenders throughout the United States and to government sponsored entities to protect against loss from defaults on low down payment residential mortgage loans. Our principal product is primary mortgage insurance. Primary insurance provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure or sale approved by us. Through certain other non-insurance subsidiaries, we also provide various services for the mortgage finance industry, such as contract underwriting, analysis of loan originations and portfolios, and mortgage lead generation. We began writing business in Australia in June 2007. We stopped writing new business in Australia in 2008 and in the fourth quarter of 2015 we settled all of our remaining risk in force. Our Australian operations, including amounts settled, are included in our consolidated financial statements; however they are not material to our consolidated results. At December 31, 2015, our direct domestic primary insurance in force was $174.5 billion, which represents the principal balance in our records of all mortgage loans that we insure, and our direct domestic primary risk in force was $45.5 billion, which represents the insurance in force multiplied by the insurance coverage percentage. |
Basis of Presentation |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”), as codified in the Accounting Standards Codification. In accordance with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of MGIC Investment Corporation and its majority-owned subsidiaries. All intercompany transactions have been eliminated. Cash and Cash Equivalents We consider money market funds and investments with original maturities of three months or less to be cash equivalents. Restricted cash and cash equivalents During the second quarter of 2013, approximately $60.3 million was placed in escrow in connection with the two agreements we entered into to resolve our dispute with Countrywide Home Loans (“CHL”) and its affiliate, Bank of America, N.A., as successor to Countrywide Home Loans Servicing LP (“BANA” and collectively with CHL, “Countrywide”) regarding rescissions. In the fourth quarter of 2013, approximately $42.9 million was released from escrow in connection with the BANA agreement and approximately $17.2 million remained in escrow in connection with the CHL agreement as of December 31, 2014. In the first quarter of 2015, the remaining escrow funds were disbursed to us pursuant to the amended and restated settlement agreement and release entered into with CHL on March 2, 2015. See additional discussion of these settlement agreements in Note 20 – “Litigation and contingencies.” Reclassifications Certain reclassifications have been made in the accompanying consolidated financial statements to 2014 and 2013 amounts to conform to the 2015 presentation. For the years ended December 31, 2014 and 2013 cash used for additions to property and equipment was previously presented as "Other" within cash flows from operating activities and is presented separately as "Additions to property and equipment" within cash flows from investing activities for the year ended December 31, 2015. This revision is not material to amounts reported or disclosed by us in prior years. Subsequent Events We have considered subsequent events through the date of this filing. Refer to Note 8 – "Debt" for disclosure of debt transactions executed subsequent to December 31, 2015 through the date of this filing and also Note 3 – "Summary of Significant Accounting Policies" for the resulting impact on potentially dilutive shares. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Fair value measurements To determine the fair value of securities available-for-sale in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including data published in market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. This model combines all inputs to arrive at a value assigned to each security. Quality controls are performed by the independent pricing sources throughout this process, which include reviewing tolerance reports, trading information, data changes, and directional moves compared to market moves. In addition, on a quarterly basis, we perform quality controls over values received from the pricing sources which also include reviewing tolerance reports, trading information, data changes, and directional moves compared to market moves. We have not made any adjustments to the prices obtained from the independent pricing sources. In accordance with fair value guidance, we applied the following fair value hierarchy in order to measure fair value for assets and liabilities: Level 1 - Quoted prices for identical instruments in active markets that we can access. Financial assets utilizing Level 1 inputs primarily include U.S. Treasury securities, equity securities, and Australian government and semi government securities. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and inputs, other than quoted prices, that are observable in the marketplace for the financial instrument. The observable inputs are used in valuation models to calculate the fair value of the financial instruments. Financial assets utilizing Level 2 inputs primarily include obligations of U.S. government corporations and agencies, corporate bonds, mortgage-backed securities, and certain municipal bonds. The independent pricing sources utilize these approaches based on type of investment: Corporate Debt & U.S. Government and Agency Bonds are evaluated by surveying the dealer community, obtaining relevant trade data, benchmark quotes and spreads and incorporating this information into the evaluation process. Obligations of U.S. States & Political Subdivisions are evaluated by tracking, capturing, and analyzing quotes for active issues and trades reported via the Municipal Securities Rulemaking Board records. Daily briefings and reviews of current economic conditions, trading levels, spread relationships, and the slope of the yield curve provide further data for evaluation. Residential Mortgage-Backed Securities are evaluated by monitoring interest rate movements, and other pertinent data daily. Incoming market data is enriched to derive spread, yield and/or price data as appropriate, enabling known data points to be extrapolated for valuation application across a range of related securities. Commercial Mortgage-Backed Securities are evaluated using valuation techniques that reflect market participants’ assumptions and maximize the use of relevant observable inputs including quoted prices for similar assets, benchmark yield curves and market corroborated inputs. Evaluation utilizes regular reviews of the inputs for securities covered, including executed trades, broker quotes, credit information, collateral attributes and/or cash flow waterfall as applicable. Asset-Backed Securities are evaluated using spreads and other information solicited from market buy- and sell-side sources, including primary and secondary dealers, portfolio managers, and research analysts. Cash flows are generated for each tranche, benchmark yields are determined, and deal collateral performance and tranche level attributes including market color as available are used, resulting in tranche-specific spreads. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or value drivers are unobservable or from par values for equity securities restricted in their ability to be redeemed or sold. Level 3 inputs reflect our own assumptions about the assumptions a market participant would use in pricing an asset or liability. Financial assets utilizing Level 3 inputs primarily include equity securities that can only be redeemed or sold at their par value and only to the security issuer and certain state premium tax credit investments. Our non-financial assets that are classified as Level 3 securities consist of real estate acquired through claim settlement. The fair value of real estate acquired is the lower of our acquisition cost or a percentage of the appraised value. The percentage applied to the appraised value is based upon our historical sales experience adjusted for current trends. Investments Our entire investment portfolio is classified as available-for-sale and is reported at fair value or, for certain equity securities carried at cost, amounts that approximate fair value. The related unrealized investment gains or losses are, after considering the related tax expense or benefit, recognized as a component of accumulated other comprehensive income (loss) in shareholders' equity. Realized investment gains and losses are reported in income based upon specific identification of securities sold. (See Note 6 – “Investments.”) Each quarter we perform reviews of our investments in order to determine whether declines in fair value below amortized cost were considered other-than-temporary. In evaluating whether a decline in fair value is other-than-temporary, we consider several factors including, but not limited to:
Based on our evaluation, we will record an other-than-temporary impairment adjustment on a security if we intend to sell the impaired security, if it is more likely than not that we will be required to sell the impaired security prior to recovery of its amortized cost basis, or if the present value of the discounted cash flows we expect to collect is less than the amortized cost basis of the security. If the fair value of a security is below its amortized cost at the time of our intent to sell, the security is classified as other-than-temporarily impaired and the full amount of the impairment is recognized as a loss in the statement of operations. Otherwise, when a security is considered to be other-than-temporarily impaired, the losses are separated into the portion of the loss that represents the credit loss and the portion that is due to other factors. The credit loss portion is recognized as a loss in the statement of operations, while the loss due to other factors is recognized in accumulated other comprehensive loss, net of taxes. A credit loss is determined to exist if the present value of the discounted cash flows, using the security’s original yield, expected to be collected from the security is less than the cost basis of the security. Home office and equipment Home office and equipment is carried at cost net of depreciation. For financial reporting purposes, depreciation is determined on a straight-line basis for the home office, equipment and data processing hardware over estimated lives of 45, 5 and 3 years, respectively. For income tax purposes, we use accelerated depreciation methods. Home office and equipment is shown net of accumulated depreciation of $26.1 million, $54.9 million and $53.0 million as of December 31, 2015, 2014 and 2013, respectively. Depreciation expense for the years ended December 31, 2015, 2014 and 2013 was $3.2 million, $2.2 million and $1.8 million, respectively. Deferred Insurance Policy Acquisition Costs Costs directly associated with the successful acquisition of mortgage insurance business, consisting of employee compensation and other policy issuance and underwriting expenses, are initially deferred and reported as deferred insurance policy acquisition costs (“DAC”). The deferred costs are net of any ceding commissions received associated with our reinsurance agreements. For each underwriting year of business, these costs are amortized to income in proportion to estimated gross profits over the estimated life of the policies. We utilize anticipated investment income in our calculation. This includes accruing interest on the unamortized balance of DAC. The estimates for each underwriting year are reviewed quarterly and updated when necessary to reflect actual experience and any changes to key variables such as persistency or loss development. If a premium deficiency exists (in other words, no gross profit is expected), we reduce the related DAC by the amount of the deficiency or to zero through a charge to current period earnings. If the deficiency is more than the related DAC balance, we then establish a premium deficiency reserve equal to the excess, through a charge to current period earnings. Loss Reserves Reserves are established for insurance losses and loss adjustment expenses when we receive notices of default on insured mortgage loans. We consider a loan in default when it is two or more payments past due. Even though the accounting standard, Accounting Standards Codification (“ASC”) 944, regarding accounting and reporting by insurance entities specifically excludes mortgage insurance from its guidance relating to loss reserves, we establish loss reserves using the general principles contained in the insurance standard. However, consistent with industry standards for mortgage insurers, we do not establish loss reserves for future claims on insured loans which are not currently in default. Loss reserves are established by estimating the number of loans in our inventory of delinquent loans that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity. Our loss estimates are established based upon historical experience, including rescission and loan modification activity. Adjustments to reserve estimates are reflected in the financial statements in the years in which the adjustments are made. The liability for reinsurance assumed is based on information provided by the ceding companies. Reserves are also established for estimated losses from defaults occurring prior to the close of an accounting period on notices of default not yet reported to us. These incurred but not reported (“IBNR”) reserves are also established using estimated claim rates and claim severities. Reserves also provide for the estimated costs of settling claims, including legal and other expenses and general expenses of administering the claims settlement process. Reserves are also ceded to reinsurers under our reinsurance agreements. (See Note 9 – “Loss Reserves” and Note 11 – “Reinsurance.”) Premium Deficiency Reserve After our loss reserves are initially established, we perform premium deficiency tests using our best estimate assumptions as of the testing date. Premium deficiency reserves are established, if necessary, when the present value of expected future losses and expenses exceeds the present value of expected future premium and already established reserves. The discount rate used in the calculation of the premium deficiency reserve is based upon our pre-tax investment yield at year-end. Products are grouped for premium deficiency purposes based on similarities in the way the products are acquired, serviced and measured for profitability. Calculations of premium deficiency reserves require the use of significant judgments and estimates to determine the present value of future premium and present value of expected losses and expenses on our business. The present value of future premium relies on, among other factors, assumptions about persistency and repayment patterns on underlying loans. The present value of expected losses and expenses depends on assumptions relating to severity of claims and claim rates on current defaults, and expected defaults in future periods. These assumptions also include an estimate of expected rescission activity. Assumptions used in calculating the deficiency reserves can be affected by volatility in the current housing and mortgage lending industries and these effects could be material. To the extent premium patterns and actual loss experience differ from the assumptions used in calculating the premium deficiency reserves, the differences between the actual results and our estimate will affect future period earnings. (See Note 10 - “Premium Deficiency Reserve.”) Revenue Recognition We write policies which are guaranteed renewable contracts at the insured's option on a monthly, single, or annual premium basis. We have no ability to reunderwrite or reprice these contracts. Premiums written on monthly premium policies are earned as coverage is provided. Premiums written on single premium policies and annual premium policies are initially deferred as unearned premium reserve and earned over the policy life. Premiums written on policies covering more than one year are amortized over the policy life in relationship to the anticipated incurred loss pattern based on historical experience. Premiums written on annual premium policies are earned on a monthly pro rata basis. When a policy is cancelled for a reason other than rescission or claim payment, all premium that is non-refundable is immediately earned. Any refundable premium is returned to the servicer or borrower. Cancellations also include rescissions and policies cancelled due to claim payment. When a policy is rescinded, all previously collected premium is returned to the servicer and when a claim is paid we return any premium received since the date of default. The liability associated with our estimate of premium to be returned is accrued for separately and included in "Other liabilities" on our consolidated balance sheets. When a premium deficiency exists a separate component of the premium refund liability is included in “Premium deficiency reserves” on our consolidated balance sheets. Changes in these liabilities affect premiums written and earned and change in premium deficiency reserve, respectively. The actual return of premium for all periods affects premiums written and earned. Policy cancellations also lower the persistency rate which is a variable used in calculating the rate of amortization of deferred insurance policy acquisition costs. Fee income of our non-insurance subsidiaries is earned and recognized as the services are provided and the customer is obligated to pay. Fee income consists primarily of contract underwriting and related fee-based services provided to lenders and is included in “Other revenue” on the consolidated statements of operations. Income Taxes Deferred income taxes are provided under the liability method, which recognizes the future tax effects of temporary differences between amounts reported in the financial statements and the tax bases of these items. The expected tax effects are computed at the enacted regular federal tax rate. Using this method, we have recorded a net deferred tax asset primarily due to net operating losses incurred in prior years. On a quarterly basis, we review the need to maintain a deferred tax asset valuation allowance as an offset to the net deferred tax asset, before valuation allowance. We analyze several factors, among which are the severity and frequency of operating losses, our capacity for the carryback or carryforward of any losses, the existence and current level of taxable operating income, operating results on a three year cumulative basis, the expected occurrence of future income or loss, the expiration dates of the carryforwards, the cyclical nature of our operating results, and available tax planning strategies. Based on our analysis, we reduced our benefit from income tax through the recognition of a valuation allowance from the first quarter of 2009 through the second quarter of 2015. In the third quarter of 2015, as discussed in Note 14 –“Income Taxes,” we concluded that it was more likely than not that our deferred tax assets would be fully realizable and that the valuation allowance was no longer necessary. Therefore, we reversed the valuation allowance. We provide for uncertain tax positions and the related interest and penalties based on our assessment of whether a tax benefit is more likely than not to be sustained under any examination by taxing authorities. Benefit Plans We have a non-contributory defined benefit pension plan covering substantially all employees, as well as a supplemental executive retirement plan. Retirement benefits are based on compensation and years of service. We recognize these retirement benefit costs over the period during which employees render the service that qualifies them for benefits. Our policy is to fund pension cost as required under the Employee Retirement Income Security Act of 1974. We offer both medical and dental benefits for retired domestic employees, their eligible spouses and dependents until the retiree reaches the age of 65. Under the plan retirees pay a premium for these benefits. We accrue the estimated costs of retiree medical and dental benefits over the period during which employees render the service that qualifies them for benefits. (See Note 13 – “Benefit Plans.”) Reinsurance Loss reserves and unearned premiums are reported before taking credit for amounts ceded under reinsurance agreements. Ceded loss reserves are reflected as "Reinsurance recoverable on loss reserves." Ceded unearned premiums are reflected as “Prepaid reinsurance premiums.” Amounts due from reinsurers on paid claims are reflected as “Reinsurance recoverable on paid losses.” Ceded premiums payable are included in “Other liabilities.” Any profit commissions are included with “Premiums written – Ceded” and any ceding commissions are included with “Other underwriting and operating expenses, net.” We remain liable for all insurance ceded. (See Note 11 – “Reinsurance.”) Foreign Currency Translation Assets and liabilities denominated in a foreign currency are translated at the year-end exchange rates. Operating results are translated at average rates of exchange prevailing during the year. Unrealized gains and losses, net of deferred taxes, resulting from translation are included in accumulated other comprehensive loss in shareholders’ equity. Gains and losses resulting from transactions in a foreign currency are recorded in current period net income (loss) at the rate on the transaction date. Share-Based Compensation We have certain share-based compensation plans. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period which generally corresponds to the vesting period. The fair value of awards classified as liabilities is remeasured at each reporting period until the award is settled. Awards under our plans generally vest over periods ranging from one to three years. (See Note 18 – “Share-based Compensation Plans.”) Earnings per Share Basic earnings per share (“EPS”) is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. We calculate diluted EPS using the treasury stock method and if-converted method. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if unvested restricted stock units or granted stock options result in the issuance of common stock. Under the if-converted method, diluted EPS reflects the potential dilution that could occur if our convertible debt instruments result in the issuance of common stock. The determination of potentially issuable shares does not consider the satisfaction of the conversion requirements and the shares are included in the determination of diluted EPS as of the beginning of the period, if dilutive. We have several debt issuances that could potentially result in contingently issuable shares and consider each potential issuance of shares separately to reflect the maximum potential dilution. Accordingly, our dilutive common stock equivalents may not reflect all of the contingently issuable shares that could be required to be issued upon any debt conversion. For purposes of calculating basic and diluted EPS, vested restricted stock and restricted stock units are considered outstanding. GAAP requires unvested share-based compensation awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, to be treated as participating securities and included in the computation of EPS pursuant to the two-class method. Our participating securities are composed of vested restricted stock and restricted stock units with non-forfeitable rights to dividends. There have been no dividends declared by us since the issuance of these participating securities and there has been no reduction to net income available to common shareholders. For the years ended December 31, 2015 and 2014, participating securities of 0.1 million have been included in basic EPS, respectively, and 0.1 million have been excluded for the year ended December 31, 2013 as they were anti-dilutive due to our net loss. The computation of diluted EPS for the years ended December 31, 2015 and 2014 include the weighted average unvested restricted stock units outstanding of 2.1 million and 3.1 million, respectively. As a result of reporting a net loss in 2013, unvested restricted stock awards were anti-dilutive for the year and accordingly not included in the computation of diluted weighted average shares. For the year ended December 31, 2015, all of our outstanding Convertible Senior Notes and Convertible Junior Subordinated Debentures are reflected in diluted earnings per share using the “if-converted” method. Under this method, if dilutive, the common stock related to the outstanding Convertible Senior Notes and/or Convertible Junior Debentures is assumed issued as of the beginning of the reporting period and the related interest expense, net of tax, is added back to earnings in calculating diluted EPS. The following table reconciles basic and diluted EPS amounts:
As discussed in Note 8 - "Debt," we purchased $127.7 million par value of our 5% Convertible Senior Notes due May 2017 ("5% Notes") and MGIC purchased $132.7 million par value of our 9% Convertible Junior Subordinated Debentures due April 2063 ("9% Debentures") in the first quarter of 2016 through the date of this filing. These purchases effectively retired the debt instruments for GAAP accounting purposes. The purchases of the 5% Notes and 9% Debentures reduced our potentially dilutive shares by approximately 9.5 million and 9.8 million shares, respectively. |
New Accounting Policies |
12 Months Ended |
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Dec. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Policies | New Accounting Policies In January 2016, the Financial Accounting Standards Board ("FASB") issued updated guidance to address the recognition, measurement, presentation, and disclosure of certain financial instruments. The updated guidance requires equity investments, except those accounted for under the equity method of accounting, that have a readily determinable fair value to be measured at fair value with changes in fair value recognized in net income. Equity investments that do not have readily determinable fair values may be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. A qualitative assessment for impairment is required for equity investments without readily determinable fair values. The updated guidance also eliminates the requirement to disclose the method and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost on the balance sheet. The updated guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods and will require recognition of a cumulative effect adjustment at adoption. We do not currently expect the adoption of this guidance to impact our financial position or liquidity. In May 2015, the FASB issued updated guidance requiring expanded disclosures for insurance entities that issue short-duration contracts. The expanded disclosures are designed to provide additional insight into an insurance entity's ability to underwrite and anticipate costs associated with claims. The disclosures include information about incurred and paid claims development, on a net of reinsurance basis, for the number of years claims incurred typically remain outstanding, not to exceed ten years. Each period presented in the disclosure about claims development that precedes the current reporting periods is considered supplementary information. The expanded disclosures also include more transparent information about significant changes in methodologies and assumptions used to estimate claims, and the timing, frequency, and severity of claims. The disclosures required by this update are effective for annual periods beginning after December 31, 2015, and interim periods within annual periods beginning after December 31, 2016, and is to be applied retrospectively. We are evaluating the impact, if any, of the new disclosure requirements. In April 2015, the FASB issued updated guidance related to the presentation of debt issuance costs. The new standard requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual and interim reporting periods beginning after December 15, 2015, but early adoption is permitted. As of December 31, 2015 debt issuance costs of approximately $11 million associated with our Convertible Senior Notes are recorded in "Other assets" on the consolidated balance sheet. We will adopt this amended guidance in the first quarter of 2016. In June 2014, the FASB issued updated guidance to resolve diversity in practice concerning employee shared-based compensation that contains performance targets that could be achieved after the requisite service period. The updated guidance requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. The total amount of compensation cost recognized during and after the service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. This updated guidance is effective for annual and interim periods beginning after December 15, 2015. We will adopt this guidance in the first quarter of 2016, which will likely reduce the service periods utilized to recognize expense on certain share-based compensation awards granted in 2016 relative to the service period in the grant terms. The impact is not expected to be material to our consolidated financial statements. In May 2014, the FASB issued updated guidance to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, our fee income related to contract underwriting and other fee-based services provided to lenders will be subject to this guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The guidance is effective for reporting periods beginning after December 15, 2017 with early adoption for reporting periods beginning after December 15, 2016 permitted. We are currently evaluating the impact of this update, but it is not expected to have a material impact on our consolidated financial statements and disclosures. |
Related Party Transactions |
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Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions There were no related party transactions during 2015, 2014 or 2013. |
Investments |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio as of December 31, 2015 and 2014 are shown below:
Our foreign investments primarily consist of the investment portfolio supporting our Australian domiciled subsidiary. The portfolio is comprised of Australian government and semi government securities, representing 87% of the market value of our foreign investments with the remaining 7% invested in corporate securities and 6% in cash equivalents. Eighty-nine percent of the Australian portfolio is rated AAA, by one or more of Moody’s, Standard & Poor’s and Fitch Ratings, and the remaining 11% is rated AA. As of December 31, 2015, the investment portfolio fair value in our Australian operations was approximately $34 million. The amortized cost and fair values of debt securities as of December 31, 2015, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most asset-backed and mortgage-backed securities and collateralized loan obligations provide for periodic payments throughout their lives, they are listed below in separate categories.
At December 31, 2015 and 2014, the investment portfolio had gross unrealized losses of $67.8 million and $30.5 million, respectively. For those securities in an unrealized loss position, the length of time the securities were in such a position, as measured by their month-end fair values, is as follows:
The unrealized losses in all categories of our investments as of December 31, 2015 were primarily caused by the difference in interest rates at December 31, 2015 compared to interest rates at the time of purchase. There were 303 and 423 securities in an unrealized loss position as of December 31, 2015 and 2014, respectively. As of December 31, 2015, the fair value as a percent of amortized cost of the securities in an unrealized loss position was 98% and approximately 15% of the securities in an unrealized loss position were backed by the U.S. Government. There were no other-than-temporary impairment (“OTTI”) losses in earnings during 2015. We recognized OTTI losses of $0.1 million and $0.3 million during 2014 and 2013, respectively. For the years ended December 31, 2015, 2014, and 2013, there were no credit losses recognized in earnings for which a portion of an OTTI loss was recognized in accumulated other comprehensive loss. The source of net investment income is as follows:
The net realized investment gains, including impairment losses, and change in net unrealized gains (losses) of investments are as follows:
The gross realized gains, gross realized losses and impairment losses are as follows:
We had $18.9 million and $20.2 million of investments at fair value on deposit with various states as of December 31, 2015 and 2014, respectively, due to regulatory requirements of those state insurance departments. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets measured at fair value included those listed, by hierarchy level, in the following tables as of December 31, 2015 and 2014:
For assets and liabilities measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the years ended December 31, 2015, 2014, and 2013 is shown in the following tables. There were no transfers into or out of Level 3 in those years and there we no losses included in earnings for those years attributable to the change in unrealized losses on assets still held at the end of each applicable year.
Authoritative guidance over disclosures about the fair value of financial instruments requires additional disclosure for financial instruments not measured at fair value. Certain financial instruments, including insurance contracts, are excluded from these fair value disclosure requirements. The carrying values of cash and cash equivalents (Level 1) and accrued investment income (Level 2) approximated their fair values. As of December 31, 2015, the majority of the $4.1 million balance of Level 3 securities are equity securities that can only be redeemed or sold at their par value and only to the security issuer, with the remainder of the balance held in state premium tax credit investments. The state premium tax credit investments have an average maturity of less than 5 years and credit ratings of AA+ or higher, and their balance reflects their remaining scheduled payments discounted at an average annual rate of 7.2%. As of December 31, 2014 the majority of our Level 3 securities were state premium tax credit investments. During 2013 we sold our remaining auction rate securities. Additional fair value disclosures related to our investment portfolio are included in Note 6 – “Investments.” We incur financial liabilities in the normal course of our business. The following tables present the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at December 31, 2015 and 2014. The fair values of our Senior Notes, Convertible Senior Notes and Convertible Junior Debentures were determined using available pricing for these notes, debentures, or similar instruments and they are categorized as Level 2 as described in Note 3 – “Summary of Significant Accounting Policies - Fair Value Measurements.”
The Convertible Senior Notes and Convertible Junior Debentures are obligations of our holding company, MGIC Investment Corporation, and not of its subsidiaries. At December 31, 2015, we had approximately $402 million in cash and investments at our holding company. The net unrealized losses on our holding company investment portfolio were approximately $2.7 million at December 31, 2015. The modified duration of the holding company investment portfolio, excluding cash and cash equivalents, was 3.1 years at December 31, 2015. |
Debt |
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Debt | Debt Long-term debt as of December 31, 2015 and 2014 consisted of the following obligations.
Interest payments on our debt obligations existing during 2015 and 2014 appear below.
5.375% Senior Notes – due November 2015 As of December 31, 2014 we had outstanding $61.9 million of 5.375% Senior Notes due in November 2015, which we repaid with cash at the holding company on November 2, 2015. Interest on these notes was payable semi-annually in arrears on May 1 and November 1 each year. The repayment of our Senior Notes had no material impact on our financial position or liquidity. 5% Convertible Senior Notes – due May 2017 As of December 31, 2015 and 2014 we had outstanding $333.5 million and $345.0 million, respectively, principal amount of 5% Convertible Senior Notes due in May 2017. During 2015 we repurchased $11.5 million of par value and paid total cash consideration of $12 million. We funded the purchases with cash at the holding company. Our purchases of the Convertible Senior Notes due 2017 resulted in a pretax charge of approximately $0.5 million. Interest on the 5% Notes is payable semi-annually in arrears on May 1 and November 1 of each year. The 5% Notes will mature on May 1, 2017. The 5% Notes are convertible, at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.4186 shares per $1,000 principal amount at any time prior to the maturity date. This represents an initial conversion price of approximately $13.44 per share. These 5% Notes will be equal in right of payment to our other senior debt and will be senior in right of payment to our Convertible Junior Debentures. Debt issuance costs are being amortized to interest expense over the contractual life of the 5% Notes. The provisions of the 5% Notes are complex. Covenants in the 5% Notes include a requirement to notify holders in advance of certain events and that we and the designated subsidiaries preserve our corporate existence, rights and franchises unless we or any such subsidiary determines that such preservation is no longer necessary in the conduct of its business and that the loss thereof is not disadvantageous to the 5% Notes. A designated subsidiary is any of our consolidated subsidiaries which has shareholders' equity of at least 15% of our consolidated shareholders' equity. Further, the notes are subject to the indenture between us and the trustee that, among other terms, includes provisions that would constitute an event of default under the indenture. Upon such a default, the trustee could accelerate the maturity of the notes independent of any action by holders of the 5% Notes. This description is not intended to be complete in all respect and is qualified in its entirety by the terms of the 5% Notes, including their covenants and events of default. We were in compliance with all covenants at December 31, 2015. 2% Convertible Senior Notes – due April 2020 As of December 31, 2015 and 2014, we had outstanding $500 million principal amount of 2% Convertible Senior Notes due in 2020 which we issued in March 2013. We received net proceeds of approximately $484.6 million after deducting underwriting discount and offering expenses. See Note 15 – “Shareholders’ Equity” for information regarding the use of such proceeds. Interest on the 2% Notes is payable semi-annually in arrears on April 1 and October 1 of each year. The 2% Notes will mature on April 1, 2020, unless earlier repurchased by us or converted. Prior to January 1, 2020, the 2% Convertible Senior Notes are convertible only upon satisfaction of one or more conditions. One such condition is that during any calendar quarter commencing after March 31, 2014, the last reported sale price of our common stock for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter be greater than or equal to 130% of the applicable conversion price on each applicable trading day. The 2% Notes are convertible at an initial conversion rate, which is subject to adjustment, of 143.8332 shares per $1,000 principal amount. This represents an initial conversion price of approximately $6.95 per share. 130% of such conversion price is $9.03. On or after January 1, 2020, holders may convert their notes irrespective of satisfaction of the conditions. These 2% Notes will be equal in right of payment to our other senior debt and will be senior in right of payment to our Convertible Junior Debentures. Debt issuance costs will be amortized to interest expense over the contractual life of the 2% Notes. Prior to April 10, 2017, the notes will not be redeemable. On any business day on or after April 10, 2017 we may redeem for cash all or part of the notes, at our option, at a redemption price equal to 100% of the principal amount of the notes being redeemed, plus any accrued and unpaid interest, if the closing sale price of our common stock exceeds 130% of the then prevailing conversion price of the notes for at least 20 of the 30 trading days preceding notice of the redemption. The provisions of the 2% Notes are complex. Covenants in the 2% Notes include a requirement to notify holders in advance of certain events and that we and the designated subsidiaries (defined above) preserve our corporate existence, rights and franchises unless we or any such subsidiary determines that such preservation is no longer necessary in the conduct of its business and that the loss thereof is not disadvantageous to the 2% Notes. Further, the notes are subject to the indenture between us and the trustee that, among other terms, includes provisions that would constitute an event of default under the indenture. Upon such a default, the trustee could accelerate the maturity of the notes independent of any action by holders of the 2% Notes. This description is not intended to be complete in all respect and is qualified in its entirety by the terms of the 2% Notes, including their covenants and events of default. We were in compliance with all covenants at December 31, 2015. 9% Convertible Junior Subordinated Debentures – due April 2063 As of December 31, 2015 and 2014 we had outstanding $389.5 million principal amount of 9% Convertible Junior Subordinated Debentures due in 2063. The 9% Debentures are currently convertible, at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.0741 common shares per $1,000 principal amount of the 9% Debentures at any time prior to the maturity date. This represents an initial conversion price of approximately $13.50 per share. If a holder elects to convert their 9% Debentures, deferred interest owed on the 9% Debentures being converted is also converted into shares of our common stock. The conversion rate for any deferred interest is based on the average price that our shares traded at during a 5-day period immediately prior to the election to convert. In lieu of issuing shares of common stock upon conversion of the 9% Debentures, we may, at our option, make a cash payment to converting holders for all or some of the shares of our common stock otherwise issuable upon conversion. The 9% Debentures rank junior to all of our existing and future senior indebtedness. Interest on the 9% Debentures is payable semi-annually in arrears on April 1 and October 1 of each year. As long as no event of default with respect to the debentures has occurred and is continuing, we may defer interest, under an optional deferral provision, for one or more consecutive interest periods up to ten years without giving rise to an event of default. Deferred interest will accrue additional interest at the rate then applicable to the debentures. During an optional deferral period we may not pay or declare dividends on our common stock. When interest on the 9% Debentures is deferred, we are required, not later than a specified time, to use reasonable commercial efforts to begin selling qualifying securities to persons who are not our affiliates. The specified time is one business day after we pay interest on the 9% Debentures that was not deferred, or if earlier, the fifth anniversary of the scheduled interest payment date on which the deferral started. Qualifying securities are common stock, certain warrants and certain non-cumulative perpetual preferred stock. The requirement to use such efforts to sell such securities is called the Alternative Payment Mechanism. The net proceeds of Alternative Payment Mechanism sales are to be applied to the payment of deferred interest, including the compound portion. We cannot pay deferred interest other than from the net proceeds of Alternative Payment Mechanism sales, except at the final maturity of the debentures or at the tenth anniversary of the start of the interest deferral. The Alternative Payment Mechanism does not require us to sell common stock or warrants before the fifth anniversary of the interest payment date on which that deferral started if the net proceeds (counting any net proceeds of those securities previously sold under the Alternative Payment Mechanism) would exceed the 2% cap. The 2% cap is 2% of the average closing price of our common stock times the number of our outstanding shares of common stock. The average price is determined over a specified period ending before the issuance of the common stock or warrants being sold, and the number of outstanding shares is determined as of the date of our most recent publicly released financial statements. We are not required to issue under the Alternative Payment Mechanism a total of more than 10 million shares of common stock, including shares underlying qualifying warrants. In addition, we may not issue under the Alternative Payment Mechanism qualifying preferred stock if the total net proceeds of all issuances would exceed 25% of the aggregate principal amount of the debentures. The Alternative Payment Mechanism does not apply during any period between scheduled interest payment dates if there is a “market disruption event” that occurs over a specified portion of such period. Market disruption events include any material adverse change in domestic or international economic or financial conditions. The provisions of the 9% Debentures are complex. The description above is not intended to be complete in all respects. Moreover, that description is qualified in its entirety by the terms of the 9% Debentures, including their covenants and events of default. We were in compliance with all covenants at December 31, 2015. We may redeem the 9% Debentures in whole or in part from time to time, at our option, at a redemption price equal to 100% of the principal amount of the 9% Debentures being redeemed, plus any accrued and unpaid interest, if the closing sale price of our common stock exceeds 130% of the then prevailing conversion price of the 9% Debentures for at least 20 of the 30 trading days preceding notice of the redemption. 130% of such conversion price is $17.55. 2016 Debt Transactions During the first quarter of 2016 through the date of this filing we completed the following debt transactions:
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Loss Reserves | Loss Reserves As described in Note 3 – “Summary of Significant Accounting Policies – Loss Reserves,” we establish reserves to recognize the estimated liability for losses and loss adjustment expenses related to defaults on insured mortgage loans. Loss reserves are established by estimating the number of loans in our inventory of delinquent loans that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity. Estimation of losses is inherently judgmental. The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy, including unemployment, and the current and future strength of local housing markets. The actual amount of the claim payments may be substantially different than our loss reserve estimates. Our estimates could be adversely affected by several factors, including a deterioration of regional or national economic conditions, including unemployment, leading to a reduction in borrowers’ income and thus their ability to make mortgage payments, and a drop in housing values which may affect borrower willingness to continue to make mortgage payments when the value of the home is below the mortgage balance. Changes to our estimates could result in a material impact to our results of operations and capital position, even in a stable economic environment. The following table provides a reconciliation of beginning and ending loss reserves for each of the past three years:
The “Losses incurred” section of the table above shows losses incurred on default notices received in the current year and in prior years. The amount of losses incurred relating to default notices received in the current year represents the estimated amount to be ultimately paid on such default notices. The amount of losses incurred relating to default notices received in prior years represents the actual claim rate and severity associated with those default notices resolved in the current year differing from the estimated liability at the prior year-end, as well as a re-estimation of amounts to be ultimately paid on defaults remaining in inventory and estimated incurred but not reported items from the end of the prior year. This re-estimation of the estimated claim rate and estimated severity is the result of our review of current trends in the default inventory, such as percentages of defaults that have resulted in a claim, the amount of the claims, changes in the relative level of defaults by geography and changes in average loan exposure. Losses incurred on default notices received in the current year decreased in 2015 compared to 2014, and in 2014 compared to 2013, primarily due to a decrease in the number of new default notices received, net of cures, as well as a decrease in the estimated claim rate on recently reported delinquencies. The prior year development of the reserves in 2015, 2014 and 2013 is reflected in the table below.
(1) A negative number for prior year loss development indicates a redundancy of prior year loss reserves. The prior year loss development was based on the resolution of approximately 60%, 58% and 59% for the years ended December 31, 2015, 2014 and 2013, respectively, of the prior year default inventory, as well as a re-estimation of amounts to be ultimately paid on defaults remaining in inventory and estimated incurred but not reported items from the end of the prior year. In 2015, we recognized favorable development on our estimated claim rate as we experienced a higher cure rate on prior year default inventory. Additionally, during 2015 the claim rate was favorably impacted by re-estimations of previously recorded reserves relating to disputes on our claims paying practices and adjustments to incurred but not reported losses (IBNR). The favorable development for the year ended 2015 was offset, in part, by an increase in the estimated severity on prior year defaults remaining in the delinquent inventory. The decrease in the estimated severity in 2014 and 2013 was based on the resolution of the prior year default inventory. The “Losses paid” section of the table above shows the breakdown between claims paid on default notices received in the current year, claims paid on default notices received in prior years and the decrease in losses paid related to terminated reinsurance agreements as noted in footnote (2) of that table. Until a few years ago, it took, on average, approximately twelve months for a default that was not cured to develop into a paid claim. Over the past several years, the average time it takes to receive a claim associated with a default has increased. This is, in part, due to new loss mitigation protocols established by servicers and to changes in some state foreclosure laws that may include, for example, a requirement for additional review and/or mediation processes. It is difficult to estimate how long it may take for current and future defaults that do not cure to develop into paid claims. MGIC and Freddie Mac disagreed on the amount of the aggregate loss limit under certain pool insurance policies (the “Disputed Policies”). On December 1, 2012, an Agreement of Settlement, Compromise and Release (the “Settlement Agreement”) between MGIC, Freddie Mac and the FHFA became effective, settling their dispute regarding the Disputed Policies. Under the Settlement Agreement, MGIC is to pay Freddie Mac a total of $267.5 million in satisfaction of all obligations under the Disputed Policies. Of the total, $100 million was paid in December 2012, as required by the Settlement Agreement, and the remaining $167.5 million is being paid out in 48 equal monthly installments that began on January 2, 2013. The liability associated with our estimate of premiums to be refunded on expected claim payments is accrued for separately at December 31, 2015 and 2014 and approximated $102 million and $115 million, respectively. As of December 31, 2015, this liability was included in "Other liabilities" on our consolidated balance sheet. As of December 31, 2014, separate components of this liability are included in “Other liabilities” and “Premium deficiency reserve” on our consolidated balance sheet. A rollforward of our primary default inventory for the years ended December 31, 2015, 2014 and 2013 appears in the table below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers.
The decrease in the primary default inventory experienced during 2015 and 2014 was generally across all markets and all book years prior to 2012. In 2015 and 2014, the percentage of loans in the inventory that had been in default for 12 or more consecutive months had decreased compared to the prior years. Historically as a default ages it becomes more likely to result in a claim. The percentage of loans that have been in default for 12 or more consecutive months has been affected by our suspended rescissions discussed below.
The length of time a loan is in the default inventory can differ from the number of payments that the borrower has not made or is considered delinquent. These differences typically result from a borrower making monthly payments that do not result in the loan becoming fully current. The number of payments that a borrower is delinquent is shown in the table below.
Pool insurance default inventory decreased from 3,797 at December 31, 2014 to 2,739 at December 31, 2015. The pool insurance notice inventory was 6,563 at December 31, 2013. Claims paying practices Our loss reserving methodology incorporates our estimates of future rescissions. A variance between ultimate actual rescission rates and our estimates, as a result of the outcome of litigation, settlements or other factors, could materially affect our losses. The liability associated with our estimate of premiums to be refunded on expected future rescissions is accrued for separately. At December 31, 2015 and 2014 the estimate of this liability totaled $7 million and $28 million, respectively. As of December 31, 2015, this liability was included in "Other liabilities" on our consolidated balance sheet. As of December 31, 2014, separate components of this liability are included in “Other liabilities” and “Premium deficiency reserve” on our consolidated balance sheet. Changes in the liability affect premiums written and earned and change in premium deficiency reserve. For information about discussions and legal proceedings with customers with respect to our claims paying practices, including settlements that we believe are probable, as defined in ASC 450-20, see Note 20 – “Litigation and Contingencies.” |
Premium Deficiency Reserve |
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Premium Deficiency Reserve [Abstract] | |
Premium Deficiency Reserve | Premium Deficiency Reserve Beginning in 2007, when we stopped writing Wall Street Bulk business, we began to separately measure the performance of these transactions and establish a premium deficiency reserve related to this business. The premium deficiency reserve reflects the present value of expected future losses and expenses that exceed the present value of expected future premiums and established loss reserves. Each quarter, we re-estimate the premium deficiency reserve on the remaining Wall Street bulk insurance in force. The premium deficiency reserve primarily changes from quarter to quarter as a result of two factors. First, it changes as the actual premiums, losses and expenses that were previously estimated are recognized. Each period such items are reflected in our financial statements as earned premium, losses incurred and expenses. The difference between the amount and timing of actual earned premiums, losses incurred and expenses and our previous estimates used to establish the premium deficiency reserves has an effect (either positive or negative) on that period’s results. Second, the premium deficiency reserve changes as our assumptions relating to the present value of expected future premiums, losses and expenses on the remaining Wall Street bulk insurance in force change. Changes to these assumptions also have an effect on that period’s results. The decreases in the premium deficiency reserve for the years ended December 31, 2015, 2014 and 2013 were $24 million, $24 million, and $26 million, respectively. As of December 31, 2015, there was no premium deficiency reserve required. The decreases represent the net result of actual premiums, losses and expenses as well as a net change in assumptions for these periods. The change in assumptions for 2014 and 2013 are primarily related to higher estimated ultimate premiums resulting principally from an increase in the projected persistency rate, offset in part by higher estimated ultimate losses resulting principally from an increase in the number of projected claims that will ultimately be paid. The calculation of premium deficiency reserves requires the use of significant judgments and estimates to determine the present value of future premium and present value of expected losses and expenses on our business. The calculation of future premium depends on, among other things, assumptions about persistency and repayment patterns on underlying loans. The calculation of expected losses and expenses depends on assumptions relating to severity of claims and claim rates on current defaults, and expected defaults in future periods. These assumptions also include an estimate of expected rescission activity. Similar to our loss reserve estimates, our estimates for premium deficiency reserves could be adversely affected by several factors, including a deterioration of regional or economic conditions leading to a reduction in borrowers’ income and thus their ability to make mortgage payments, and a drop in housing values that could expose us to greater losses. Assumptions used in calculating the deficiency reserves can also be affected by volatility in the current housing and mortgage lending industries. To the extent premium patterns and actual loss experience differ from the assumptions used in calculating the premium deficiency reserves, the differences between the actual results and our estimates will affect future period earnings and could be material. |
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Reinsurance | Reinsurance Effective July 1, 2015, we settled our 2013 quota share reinsurance agreement ("2013 QSR Transaction") by commutation. The settlement included unearned premiums, loss reserves, and profit commission. The commutation resulted in an increase in net premiums written and earned of $69.4 million and $11.6 million, respectively, and a decrease in ceding commissions of $11.6 million in the third quarter of 2015. Receipt of our profit commission of $142.5 million, in addition to other premium and loss amounts, was also completed as part of the settlement. Effective July 1, 2015, we entered into a quota share reinsurance agreement ("2015 QSR Transaction") with a group of unaffiliated reinsurers that are the same as our 2013 QSR Transaction. Each of the reinsurers has an insurer financial strength rating of A- or better by Standard and Poor’s Rating Services, A.M. Best or both. The 2015 QSR Transaction will provide coverage on policies that were in the 2013 QSR Transaction; additional qualifying in force policies as of the agreement effective date which either had no history of defaults, or where a single default has been cured for twelve or more months at the agreement effective date; and all qualifying new insurance written through December 31, 2016. The agreement will provide coverage on losses incurred on or after the effective date with renewal premium through December 31, 2024, at which time the agreement expires. The 2015 QSR Transaction increases the amount of our insurance in force covered by reinsurance and will result in an increase in the amount of premiums and losses ceded. A higher level of losses ceded will reduce our profit commission and in turn will reduce our premium yield. Early termination of the agreement can be elected by us effective December 31, 2018 for a fee, or under specified scenarios for no fee upon prior written notice. Further, at our sole discretion we may elect to terminate the agreement if we will receive less than 90% of the full credit amount under the private mortgage insurer eligibility requirements ("PMIERs") of Fannie Mae and Freddie Mac (collectively, the "GSEs") for the risk ceded in any required calculation period. The structure of the 2015 QSR Transaction is a 30% quota share for all policies covered, with a 20% ceding commission as well as a profit commission. Generally, under the 2015 QSR Transaction, we will receive a profit commission provided that the loss ratio on the loans covered under the agreement remains below 60%. A summary of our quota share reinsurance agreements, excluding captive agreements, for 2015, 2014 and 2013 appears below.
Under the terms of 2015 QSR Transaction, reinsurance premiums, ceding commission and profit commission are settled net on a quarterly basis. The reinsurance premium due after deducting the related ceding commission and profit commission is reported within "Other liabilities" on the consolidated balance sheet as of December 31, 2015. As of December 31, 2014, we had accrued a profit commission receivable of $91.5 million. In the past, MGIC also obtained captive reinsurance. In a captive reinsurance arrangement, the reinsurer is affiliated with the lender for whom MGIC provides mortgage insurance. As part of our settlement with the Consumer Financial Protection Bureau (“CFPB”) in 2013 and with the Minnesota Department of Commerce in June 2015, discussed in Note 20 – “Litigation and Contingencies” MGIC has agreed to not enter into any new captive reinsurance agreement or reinsure any new loans under any existing captive reinsurance agreement for a period of ten years subsequent to the respective settlements. In accordance with the CFPB settlement, all of our active captive arrangements were placed into run-off. In addition, at the time PMIERs became effective on December 31, 2015, the GSEs will not approve any future reinsurance or risk sharing transaction with a mortgage enterprise or an affiliate of a mortgage enterprise. Captive agreements were generally written on an annual book of business and each captive reinsurer is required to maintain a separate trust account to support its combined reinsured risk on all annual books. MGIC is the sole beneficiary of the trusts, and the trust accounts are made up of capital deposits by the captive reinsurers, premium deposits by MGIC, and investment income earned. These amounts are held in the trust account and are available to pay reinsured losses. The reinsurance recoverable on loss reserves related to captive agreements was $34 million at December 31, 2015 which was supported by $137 million of trust assets, while at December 31, 2014 the reinsurance recoverable on loss reserves related to captive agreements was $45 million which was supported by $198 million of trust assets. The effect of all reinsurance agreements on premiums earned and losses incurred is as follows:
Generally, reinsurance recoverables on primary loss reserves, paid losses and prepaid reinsurance premiums are supported by trust funds or letters of credit. As such, we have not established an allowance against these recoverables. See Note 20 – “Litigation and Contingencies” for a discussion of requests or subpoenas for information regarding captive mortgage reinsurance arrangements. |
Other Comprehensive (Loss) Income |
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Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive (Loss) Income | Other Comprehensive (Loss) Income The pretax components of our other comprehensive (loss) income and related income tax benefit (expense) for the years ended December 31, 2015, 2014 and 2013 are included in the table below:
(1) See Note 14 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets. The pretax and related income tax (expense) benefit components of the amounts reclassified from our accumulated other comprehensive loss to our consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013 are included in the table below:
(1) Increases (decreases) Net realized investment gains on the consolidated statements of operations. (2) Decreases (increases) Other underwriting and operating expenses, net on the consolidated statements of operations. (3) See Note 14 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets. A rollforward of accumulated other comprehensive loss for the years ended December 31, 2015, 2014, and 2013, including amounts reclassified from accumulated other comprehensive loss, are included in the table below.
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Benefit Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Plans | Benefit Plans We have a non-contributory defined benefit pension plan covering substantially all domestic employees, as well as a supplemental executive retirement plan. We also offer both medical and dental benefits for retired domestic employees and their eligible spouses under a postretirement benefit plan. The following tables provide the components of aggregate annual net periodic benefit cost for each of the years ended December 31, 2015, 2014, and 2013 and changes in the benefit obligation and the funded status of the pension, supplemental executive retirement and other postretirement benefit plans as recognized in the consolidated balance sheet as of December 31, 2015 and 2014.
The amortization of gains and losses resulting from actual experience different from assumed experience or changes in assumptions including discount rates is included as a component of Net Periodic Benefit Cost/(Income) for the year. The gain or loss in excess of a 10% corridor is amortized by the average remaining service period of participating employees expected to receive benefits under the plan. The changes in the projected benefit obligation are as follows:
In the fourth quarter of 2014, the Society of Actuaries released new mortality tables as a result of their detailed study on the future life expectancies of pension plan participants. We have used these mortality tables, including updates to the mortality table projection scales, in calculating our year-end 2015 and 2014 retirement program obligations. We expect the mortality tables to receive regular annual updates that will impact our retirement plan obligations in future reporting periods. If all pension plan participants elected to receive their pension benefits in monthly payments, the new tables would have increased 2014 year-end obligations by $23.2 million. However, based on our experience, we estimate that 75% of our active pension plan participants will elect to receive their pension benefits in a lump sum, which under the terms of the pension plan, are calculated based on mortality assumptions prescribed by the IRS, not the Society of Actuaries. The combined effect of the new Society of Actuaries mortality tables and the 75% lump-sum election assumption was a net increase in 2014 year-end obligations of $14.6 million. In addition, the benefit obligation will also change due to changes in the actuarial assumptions applied, as shown in the table below, to determine the outstanding liability. The changes in the fair value of the net assets available for plan benefits are as follows:
The projected benefit obligations, net periodic benefit costs and accumulated postretirement benefit obligation for the plans were determined using the following weighted average assumptions.
In selecting a discount rate, we performed a hypothetical cash flow bond matching exercise, matching our expected pension plan and postretirement medical plan cash flows, respectively, against a selected portfolio of high quality corporate bonds. The modeling was performed using a bond portfolio of noncallable bonds with at least $50 million outstanding. The average yield of these hypothetical bond portfolios was used as the benchmark for determining the discount rate. In selecting the expected long-term rate of return on assets, we considered the average rate of earnings expected on the classes of funds invested or to be invested to provide for the benefits of these plans. This included considering the trusts' targeted asset allocation for the year and the expected returns likely to be earned over the next 20 years. The year-end asset allocations of the plans are as follows:
In accordance with fair value guidance, we applied the following fair value hierarchy in order to measure fair value of our benefit plan assets: Level 1 – Quoted prices for identical instruments in active markets that we have the ability to access. Financial assets utilizing Level 1 inputs include equity securities, mutual funds, money market funds, certain U.S. Treasury securities and exchange traded funds ("ETF’s"). Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and inputs, other than quoted prices, that are observable in the marketplace for the financial instrument. The observable inputs are used in valuation models to calculate the fair value of the financial instruments. Financial assets utilizing Level 2 inputs include certain municipal, corporate and foreign bonds, obligations of U.S. government corporations and agencies, and pooled equity accounts. Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. Level 3 inputs reflect our own assumptions about the assumptions a market participant would use in pricing an asset or liability. To determine the fair value of securities in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. In addition, on a quarterly basis, we perform quality controls over values received from the pricing source (the “Trustee”) which include comparing values to other independent pricing sources. In addition, we review annually the Trustee’s auditor’s report on internal controls in order to determine that their controls around valuing securities are operating effectively. We have not made any adjustments to the prices obtained from the independent sources. The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2015 and 2014. There were no securities that utilized Level 3 inputs.
The pension plan has implemented a strategy to reduce risk through the use of a targeted funded ratio. The liability driven component is key to the asset allocation. The liability driven component seeks to align the duration of the fixed income asset allocation with the expected duration of the plan liabilities or benefit payments. Overall asset allocation is dynamic and specifies target allocation weights and ranges based on the funded status. An improvement in funded status results in the de-risking of the portfolio, allocating more funds to fixed income and less to equity. A decline in funded status would result in a higher allocation to equity. The maximum equity allocation is 40%. The equity investments utilize combinations of mutual funds, ETFs, and pooled equity account structures focused on the following strategies:
The fixed income objective is to preserve capital and to provide monthly cash flows for the payment of plan liabilities. Fixed income investments can include government, government agency, corporate, mortgage-backed, asset-backed, and municipal securities, and other classes of bonds. The duration of the fixed income portfolio has an objective of being within one year of the duration of the accumulated benefit obligation. The fixed income investments have an objective of a weighted average credit of A3/A-/A- by Moody’s, S&P, and Fitch, respectively. The following table sets forth the other postretirement benefits plan assets at fair value as of December 31, 2015 and 2014. All are Level 1 assets.
Our postretirement plan portfolio is designed to achieve the following objectives over each market cycle and for at least 5 years:
The primary focus in developing asset allocation ranges for the portfolio is the assessment of the portfolio's investment objectives and the level of risk that is acceptable to obtain those objectives. To achieve these goals the minimum and maximum allocation ranges for fixed income securities and equity securities are:
Given the long term nature of this portfolio and the lack of any immediate need for significant cash flow, it is anticipated that the equity investments will consist of growth stocks and will typically be at the higher end of the allocation ranges above. Investment in international oriented funds is limited to a maximum of 30% of the equity range. The current international allocation is invested in two mutual funds with 3% of the equity allocation in a fund which has the objective of investing primarily in equity securities of emerging market countries, and 21% of the equity allocation in a fund investing in securities of companies based outside the United States. It invests in companies primarily based in Europe and the Pacific Basin, and primarily in equity investments although it may also hold cash, money market instruments, and fixed maturity securities depending on market conditions. The following tables show the current and estimated future contributions and benefit payments.
Health care sensitivities For measurement purposes, a 7.0% health care trend rate was used for benefits for retirees before they reach age 65 years for 2015. In 2016, the rate is assumed to be 7.0%, decreasing to 5.0% by 2020 and remaining at this level beyond. Assumed health care cost trend rates have a significant effect on the amounts reported for the other postretirement benefits plan. A 1 percentage point change in the health care trend rate assumption would have the following effects on other postretirement benefits:
We have a profit sharing and 401(k) savings plan for employees. At the discretion of the Board of Directors, we may make a contribution of up to 5% of each participant's eligible compensation. We provide a matching 401(k) savings contribution for employees on their before-tax contributions at a rate of 80% of the first $1,000 contributed and 40% of the next $2,000 contributed. For employees hired after January 1, 2014, the match is 100% up to 4% contributed. We recognized expenses related to these plans of $5.1 million, $5.0 million and $5.3 million in 2015, 2014 and 2013, respectively. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Net deferred tax assets and liabilities as of December 31, 2015 and 2014 are as follows:
The components of the net deferred tax asset (liability) as of December 31, 2015 and 2014 are as follows:
We review the need to maintain the deferred tax asset valuation allowance on a quarterly basis. We analyze several factors, among which are the severity and frequency of operating losses, our capacity for the carryback or carryforward of any losses, the existence and current level of taxable operating income, operating results on a three year cumulative basis, the expected occurrence of future income or loss, the expiration dates of the carryforwards, the cyclical nature of our operating results, and available tax planning strategies. Based on our analysis, we reduced our benefit from income tax through the recognition of a valuation allowance from the first quarter of 2009 through the second quarter of 2015. In the third quarter of 2015, based on our analysis, as described more fully below, we concluded that it was more likely than not that our deferred tax assets would be fully realizable and that the valuation allowance was no longer necessary. Therefore, we reversed the valuation allowance. For the year ended December 31, 2015, we reversed $161.1 million of our valuation allowance based on income from 2015. The portion of the valuation allowance reversed related to deferred tax assets that are expected to be realized in future years, totaling $747.5 million, is treated as a discrete period item and is recognized as a component of the tax provision in continuing operations in the period of release. Furthermore, in determining the discrete period impact from the reversal, we removed the prior period disproportionate tax effects that had arisen in other comprehensive income because of the valuation allowance. This reduced the amount of tax benefit included in net income and resulted in an allocation of tax benefit of $60.8 million to components of other comprehensive income. The following table provides a rollforward of our deferred tax asset valuation allowance for the year ended December 31, 2015.
In our analysis we evaluated both subjective and objective evidence and assigned a weight to each. Significant weight was given to our most recent operating results and our ability to sustain them. We have experienced a significant reduction in losses incurred as our level of default notices received and in inventory has declined, as the effects of the financial crisis continue to ebb. New insurance written in recent years has been of high quality and is expected to be profitable well into the future. Historically, the results of mortgage insurers have been cyclical, where periods of operating losses have been followed by significant amounts of income. All of these factors have had a positive effect on operating results. Our level of pre-tax income for each quarter of 2015 was at least $100 million. We viewed the recurring nature of our income as very important, objectively verifiable evidence and gave it great weight in our analysis. Based on the above, we believe that we will have significant sources of pre-tax income which will allow for utilization of our deferred tax assets. Generally, a significant component of any analysis for the recognition of deferred tax assets includes the objective observation of operating results for a period of time. In this regard, we considered the level of cumulative operating income, as adjusted for any permanent tax differences. There is no specific requirement that indicates the time span for this evaluation. In our evaluation, we used a three year period. Prior to the third quarter of 2015, this three year cumulative total had been materially negative for an extended period of time, which we considered to be objectively verifiable negative evidence which would not support the reversal of the valuation allowance. In the third quarter, this amount became positive, which we believe provided additional objectively verifiable evidence which supported the reversal of the valuation allowance. The three year cumulative pre-tax income is $687.3 million as of December 31, 2015. In the fourth quarter of 2013, our net operating loss carryforward (“NOL”) for U.S. federal regular income tax purposes reached $2.6 billion, which was the highest amount it attained. As of December 31, 2015, the estimated remaining NOLs total $1.9 billion, a reduction of $670 million in two years. At this rate, and without taking into account any improvement in earnings, we would utilize the NOL within six years. In addition to this history of the utilization of our NOLs, we considered that the amount of income that we have been generating has been increasing over time. In 2015, we reduced our NOLs by $471 million, whereas in 2014 that amount was $199 million. At the 2015 rate, we would utilize the NOLs on our return by the end of 2020. The earliest current expiration date for our NOLs is 2029. This recent history of positive earnings trends indicates that it is more likely than not that the NOLs would be utilized well before they expire. Further, we currently have no limitations under the change in control provisions of Internal Revenue Code Section 382, which would reduce our ability to utilize our NOLs. We have taken steps, primarily through our Amended and Restated Rights Agreement, to attempt to prevent any change in control which would limit the utilization of our NOLs. The effect of the change in valuation allowance on the provision for (benefit from) income taxes was as follows:
The change in the valuation allowance that was included in other comprehensive income was a decrease of $54.5 million, a decrease of $13.1 million, and an increase of $17.3 million for the years ended December 31, 2015, 2014 and 2013, respectively. The remaining valuation allowance was reversed in the third quarter of 2015. The total valuation allowance as of December 31, 2014 and 2013 was $902.3 million and $1,004.2 million, respectively. Giving full effect to the carryback of net operating losses for federal income tax purposes, we have approximately $1,946 million of net operating loss carryforwards on a regular tax basis and $1,051 million of net operating loss carryforwards for computing the alternative minimum tax as of December 31, 2015. Any unutilized carryforwards are scheduled to expire at the end of tax years 2029 through 2033. The following summarizes the components of the provision for (benefit from) income taxes:
We paid $5.4 million, $1.3 million, and $0.1 million in federal income tax in 2015, 2014 and 2013, respectively. The reconciliation of the federal statutory income tax rate to the effective tax rate (benefit) provision is as follows:
As previously disclosed, the Internal Revenue Service (“IRS”) completed examinations of our federal income tax returns for the years 2000 through 2007 and issued proposed assessments for taxes, interest and penalties related to our treatment of the flow-through income and loss from an investment in a portfolio of residual interests of Real Estate Mortgage Investment Conduits (“REMICs”). The IRS indicated that it did not believe that, for various reasons, we had established sufficient tax basis in the REMIC residual interests to deduct the losses from taxable income. We appealed these assessments within the IRS and in August 2010, we reached a tentative settlement agreement with the IRS which was not finalized. On September 10, 2014, we received Notices of Deficiency (commonly referred to as “90 day letters”) covering the 2000-2007 tax years. The Notices of Deficiency reflect taxes and penalties related to the REMIC matters of $197.5 million and at December 31, 2015, there would also be interest related to these matters of approximately $182.9 million. In 2007, we made a payment of $65.2 million to the United States Department of the Treasury which will reduce any amounts we would ultimately owe. The Notices of Deficiency also reflect additional amounts due of $261.4 million, which are primarily associated with the disallowance of the carryback of the 2009 net operating loss to the 2004-2007 tax years. We believe the IRS included the carryback adjustments as a precaution to keep open the statute of limitations on collection of the tax that was refunded when this loss was carried back, and not because the IRS actually intends to disallow the carryback permanently. We filed a petition with the U.S. Tax Court contesting most of the IRS' proposed adjustments reflected in the Notices of Deficiency and the IRS has filed an answer to our petition which continues to assert their claim. Litigation to resolve our dispute with the IRS could be lengthy and costly in terms of legal fees and related expenses. We can provide no assurance regarding the outcome of any such litigation or whether a compromised settlement with the IRS will ultimately be reached and finalized. Depending on the outcome of this matter, additional state income taxes and state interest may become due when a final resolution is reached. As of December 31, 2015, those state taxes and interest would approximate $48.8 million. In addition, there could also be state tax penalties. Our total amount of unrecognized tax benefits as of December 31, 2015 is $107.1 million, which represents the tax benefits generated by the REMIC portfolio included in our tax returns that we have not taken benefit for in our financial statements, including any related interest. We continue to believe that our previously recorded tax provisions and liabilities are appropriate. However, we would need to make appropriate adjustments, which could be material, to our tax provision and liabilities if our view of the probability of success in this matter changes, and the ultimate resolution of this matter could have a material negative impact on our effective tax rate, results of operations, cash flows, available assets and statutory capital. In this regard, see Note 17 – “Capital Requirements – Capital-GSEs.” In January 2013, we received a Revenue Agent’s Report from the IRS related to the examination of our federal income tax return for the year 2010. In October 2014, we received a Revenue Agent’s Report from the IRS related to the examination of our federal income tax returns for the years 2011 and 2012. The results of these examinations had no material effect on the financial statements. Under current guidance, when evaluating a tax position for recognition and measurement, an entity shall presume that the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. The interpretation adopts a benefit recognition model with a two-step approach, a more-likely-than-not threshold for recognition and derecognition, and a measurement attribute that is the greatest amount of benefit that is cumulatively greater than 50% likely of being realized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
The total amount of the unrecognized tax benefits, related to our aforementioned REMIC issue, which would affect our effective tax rate is $93.9 million. We recognize interest accrued and penalties related to unrecognized tax benefits in income taxes. During 2015, we recognized $0.9 million in interest. As of December 31, 2015 and 2014, we had $27.8 million and $26.9 million of accrued interest related to uncertain tax positions, respectively. The statute of limitations related to the consolidated federal income tax return is closed for all years prior to 2000. It is reasonably possible that our 2000-2007 federal tax case will be resolved, other than through litigation. If it is resolved under terms similar to our tentative settlement agreement that was not finalized, our total unrecognized tax benefits would be reduced by $107.1 million during 2016. After taking into account prior payments and the effect of available net operating loss carrybacks, any net cash outflows would approximate $26 million. |
Shareholders' Equity |
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Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders' Equity Our Amended and Restated Rights Agreement dated July 25, 2012, which was approved by shareholders, was amended and restated on July 23, 2015. It seeks to diminish the risk that our ability to use our NOLs to reduce potential future federal income tax obligations may become substantially limited and to deter certain abusive takeover practices. The benefit of the NOLs would be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, if we were to experience an “ownership change” as defined by Section 382 of the Internal Revenue Code. Under the Agreement each outstanding share of our Common Stock is accompanied by one Right. The Distribution Date occurs on the earlier of ten days after a public announcement that a person has become an Acquiring Person, or ten business days after a person announces or begins a tender offer in which consummation of such offer would result in a person becoming an Acquiring Person. An Acquiring Person is any person that becomes, by itself or together with its affiliates and associates, a beneficial owner of 5% or more of the shares of our Common Stock then outstanding, but excludes, among others, certain exempt and grandfathered persons as defined in the Agreement. The Rights are not exercisable until the Distribution Date. Each Right will initially entitle shareholders to buy one-tenth of one share of our Common Stock at a Purchase Price of $45 per full share (equivalent to $4.50 for each one-tenth share), subject to adjustment. Each exercisable Right (subject to certain limitations) will entitle its holder to purchase, at the Rights’ then-current Purchase Price, a number of our shares of Common Stock (or if after the Shares Acquisition Date, we are acquired in a business combination, common shares of the acquiror) having a market value at the time equal to twice the Purchase Price. The Rights will expire on August 1, 2018, or earlier as described in the Agreement. The Rights are redeemable at a price of $0.001 per Right at any time prior to the time a person becomes an Acquiring Person. Other than certain amendments, the Board of Directors may amend the Rights in any respect without the consent of the holders of the Rights. In March 2013 we completed the public offering and sale of 135 million shares of our common stock at a price of $5.15 per share. We received net proceeds of approximately $663.3 million, after deducting underwriting discount and offering expenses. The shares of common stock sold were newly issued shares. In March 2013 we also concurrently completed the sale of $500 million principal amount of 2% Convertible Senior Notes due in 2020. For more information, see Note 8 – “Debt.” In June 2013, we amended our Articles of Incorporation to increase our authorized common stock from 680 million shares to 1.0 billion shares. We have 28.9 million authorized shares reserved for conversion under our convertible junior subordinated debentures and 96.7 million authorized shares reserved for conversion under our convertible senior notes. (See Note 8 – “Debt”) |
Dividend Restrictions |
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Dec. 31, 2015 | |
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract] | |
Dividend Restrictions | Dividend Restrictions In the fourth quarter of 2008, our holding company suspended the payment of dividends to shareholders. The convertible senior notes and convertible debentures, discussed in Note 8 – “Debt,” are obligations of MGIC Investment Corporation, our holding company, and not of its subsidiaries. Our holding company has no material sources of cash inflows other than investment income, dividends from subsidiaries and capital raised in the public markets. MGIC is the principal source of dividend-paying capacity. Although MGIC has not paid any dividends to our holding company since 2008, we are discussing with the Office of the Commissioner of Insurance of the State of Wisconsin (the "OCI") the resumption of ongoing extraordinary dividends in 2016. During 2015, dividends of $38.5 million were paid to the holding company from other insurance subsidiaries. Our insurance subsidiaries are subject to state insurance regulations as to maintenance of policyholders' surplus and payment of dividends. The maximum amount of dividends that the insurance subsidiaries may pay in any twelve-month period without regulatory approval by the OCI is the lesser of adjusted statutory net income or 10% of statutory policyholders' surplus as of the preceding calendar year end. Adjusted statutory net income is defined for this purpose to be the greater of statutory net income, net of realized investment gains, for the calendar year preceding the date of the dividend or statutory net income, net of realized investment gains, for the three calendar years preceding the date of the dividend less dividends paid within the first two of the preceding three calendar years. |
Capital Requirements |
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Capital Requirements | Capital Requirements Capital - GSEs Substantially all of our insurance written since 2008 has been for loans purchased by the GSEs. The GSEs each revised its PMIERs effective December 31, 2015. The financial requirements of the PMIERs require a mortgage insurer’s “Available Assets” (generally only the most liquid assets of an insurer) to equal or exceed its “Minimum Required Assets” (which are based on an insurer’s book and are calculated from tables of factors with several risk dimensions and are subject to a floor amount). Based on our interpretation of the PMIERs, as of December 31, 2015, MGIC’s Available Assets are in excess of its Minimum Required Assets; and MGIC is in compliance with the financial requirements of the PMIERs and eligible to insure loans purchased by the GSEs. Statutory Accounting Principles The statutory financial statements of our insurance companies are presented on the basis of accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin, which has adopted the NAIC statutory accounting practices as the basis of its statutory accounting practices ("SSAP"). For the years 2014 and 2013 we utilized a permitted practice approved by the OCI to recognize a portion of our net deferred tax assets as admitted assets, discussed further below. In converting from statutory to GAAP, typical adjustments include deferral of policy acquisition costs, the inclusion of net unrealized holding gains or losses in shareholders' equity relating to fixed maturities and the inclusion of statutory non-admitted assets. Under a permitted practice effective September 30, 2012, the OCI had approved MGIC to report its net deferred tax asset as an admitted asset in an amount not to exceed 10% of adjusted surplus as regards policyholders, notwithstanding any contrary provisions of SSAP No. 101. Deferred tax assets of $138 million were included in MGIC’s statutory capital at December 31, 2014. Due to the deferred tax asset valuation allowance reversal as of September 30, 2015, MGIC no longer relies on the permitted practice and the deferred tax asset is admitted according to the stated provisions of SSAP No. 101. Under the stated provisions of SSAP No. 101, the admitted net deferred tax asset is 15% of adjusted surplus as regards policyholders. Net deferred tax assets of $205 million were included in MGIC's statutory capital as of December 31, 2015. In addition to the typical adjustments from statutory to GAAP, mortgage insurance companies are required to maintain contingency loss reserves equal to 50% of premiums earned under SSAP and practices prescribed by the OCI, Such amounts cannot be withdrawn for a period of ten years except as permitted by insurance regulations. With regulatory approval a mortgage guaranty insurance company may make early withdrawals from the contingency reserve when incurred losses exceed 35% of net premiums earned in a calendar year. For the year ended 2015, MGIC's losses incurred were 37% of net premiums earned. Changes in contingency loss reserves impact the statutory statement of operations. Contingency loss reserves are not reflected as liabilities under GAAP and changes in contingency loss reserves do not impact the GAAP statements of operations. A premium deficiency reserve that may be recorded on a GAAP basis when the present value of expected future losses and expenses exceeds the present value of expected future premiums and already established loss reserves, may not be recorded on a statutory basis if the present value of expected future premiums and already established loss reserves and statutory contingency reserves, exceeds the present value of expected future losses and expenses. On a GAAP basis, when calculating a premium deficiency reserve policies are grouped based on how they are acquired, serviced and measured. On a statutory basis, a premium deficiency reserve is calculated on all policies in force. The statutory net (loss) income, surplus and contingency reserve liability of the insurance subsidiaries of our holding company, as well as the surplus contributions made to MGIC and other insurance subsidiaries and dividends paid by MGIC and other insurance subsidiaries to us, are shown in the tables below. The statutory net loss in 2015 was driven by the dissolution of an MGIC non-insurance subsidiary. The surplus amounts included below are the combined surplus of our insurance operations as utilized in our risk-to-capital calculations.
Statutory Capital Requirements The insurance laws of 16 jurisdictions, including Wisconsin, our domiciliary state, require a mortgage insurer to maintain a minimum amount of statutory capital relative to the risk in force (or a similar measure) in order for the mortgage insurer to continue to write new business. We refer to these requirements as the “State Capital Requirements” and, together with the GSE Financial Requirements, the “Financial Requirements.” While they vary among jurisdictions, the most common State Capital Requirements allow for a maximum risk-to-capital ratio of 25 to 1. A risk-to-capital ratio will increase if (i) the percentage decrease in capital exceeds the percentage decrease in insured risk, or (ii) the percentage increase in capital is less than the percentage increase in insured risk. Wisconsin does not regulate capital by using a risk-to-capital measure but instead requires a minimum policyholder position (“MPP”). The “policyholder position” of a mortgage insurer is its net worth or surplus, contingency reserve and a portion of the reserves for unearned premiums. At December 31, 2015, MGIC’s risk-to-capital ratio was 12.1 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements and its policyholder position was $1.2 billion above the required MPP of $1.1 billion. In calculating our risk-to-capital ratio and MPP, we are allowed full credit for the risk ceded under our reinsurance transaction with a group of unaffiliated reinsurers. It is possible that under the revised State Capital Requirements discussed below, MGIC will not be allowed full credit for the risk ceded to the reinsurers. If MGIC is not allowed an agreed level of credit under either the State Capital Requirements or the PMIERs, MGIC may terminate the reinsurance agreement, without penalty. At this time, we expect MGIC to continue to comply with the current State Capital Requirements; however, you should read the rest of these financial statement footnotes for information about matters that could negatively affect such compliance. At December 31, 2015, the risk-to-capital ratio of our combined insurance operations (which includes reinsurance affiliates) was 13.6 to 1. Reinsurance agreements with affiliates permit MGIC to write insurance with a higher coverage percentage than it could on its own under certain state-specific requirements. A higher risk-to-capital ratio on a combined basis may indicate that, in order for MGIC to continue to utilize reinsurance agreements with its affiliates, additional capital contributions to the reinsurance affiliates could be needed. The NAIC previously announced that it plans to revise the minimum capital and surplus requirements for mortgage insurers that are provided for in its Mortgage Guaranty Insurance Model Act. A working group of state regulators is drafting the revisions, although no date has been established by which the NAIC must propose revisions to such requirements. Depending on the scope of revisions made by the NAIC, MGIC may be prevented from writing new business in the jurisdictions adopting such revisions. If MGIC fails to meet the State Capital Requirements of Wisconsin and is unable to obtain a waiver of them from the OCI, MGIC could be prevented from writing new business in all jurisdictions. If MGIC fails to meet the State Capital Requirements of a jurisdiction other than Wisconsin and is unable to obtain a waiver of them, MGIC could be prevented from writing new business in that particular jurisdiction. It is possible that regulatory action by one or more jurisdictions, including those that do not have specific State Capital Requirements, may prevent MGIC from continuing to write new insurance in such jurisdictions. If we are unable to write business in all jurisdictions, lenders may be unwilling to procure insurance from us anywhere. In addition, a lender’s assessment of the future ability of our insurance operations to meet the State Capital Requirements or the PMIERs may affect its willingness to procure insurance from us. A possible future failure by MGIC to meet the State Capital Requirements or the PMIERs will not necessarily mean that MGIC lacks sufficient resources to pay claims on its insurance liabilities. While we believe MGIC has sufficient claims paying resources to meet its claim obligations on its insurance in force on a timely basis, you should read the rest of these financial statement footnotes for information about matters that could negatively affect MGIC’s claims paying resources. |
Share-based Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Plans | Share-based Compensation Plans We have certain share-based compensation plans. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period which generally corresponds to the vesting period. The fair value of awards classified as liabilities is remeasured at each reporting period until the award is settled. Awards under our plans generally vest over periods ranging from one to three years. We have an omnibus incentive plan that was adopted on April 23, 2015. When the 2015 plan was adopted, no further awards could be made under our previous 2011 plan. The purpose of the 2015 plan is to motivate and incent performance by, and to retain the services of, key employees and non-employee directors through receipt of equity-based and other incentive awards under the plan. The maximum number of shares of stock that can be awarded under the 2015 plan is 10.0 million. Awards issued under the plan that are subsequently forfeited will not count against the limit on the maximum number of shares that may be issued under the plan. The 2015 plan provides for the award of stock options, stock appreciation rights, restricted stock and restricted stock units, as well as cash incentive awards. No awards may be granted after April 23, 2025 under the 2015 plan. The vesting provisions of options, restricted stock and restricted stock units are determined at the time of grant. Shares issued under the 2015 plan will be newly issued shares. The compensation cost that has been charged against income for share-based plans was $11.9 million, $9.2 million, and $6.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. The related income tax benefit, before valuation allowance, recognized for share-based plans was $4.2 million, $3.2 million, and $2.3 million for the years ended December 31, 2015, 2014 and 2013, respectively. See Note 14 – “Income Taxes” for a discussion of our valuation allowance. There have been no options granted since 2004, and no options exercised since 2007. At December 31, 2013, all 529,800 options outstanding were exercisable at a price of $68.20 each. All of these options expired in January 2014 without being exercised. A summary of restricted stock or restricted stock unit (collectively called “restricted stock”) activity during 2015 is as follows:
At December 31, 2015, the 3.3 million shares of restricted stock outstanding consisted of 2.4 million shares that are subject to performance conditions (“performance shares”) and 0.9 million shares that are subject only to service conditions (“time vested shares”). The weighted-average grant date fair value of restricted stock granted during 2014 and 2013 was $8.43 and $2.75, respectively. The fair value of restricted stock granted is the closing price of the common stock on the New York Stock Exchange on the date of grant. The total fair value of restricted stock vested during 2015, 2014 and 2013 was $17.2 million, $12.1 million, and $4.3 million, respectively. As of December 31, 2015, there was $14.2 million of total unrecognized compensation cost related to non-vested share-based compensation agreements granted under the plans. Of this total, $10.6 million of unrecognized compensation costs relate to performance shares and $3.6 million relates to time vested shares. A portion of the unrecognized costs associated with the performance shares may or may not be recognized in future periods, depending upon whether or not the performance and service conditions are met. The cost associated with the time vested shares is expected to be recognized over a weighted-average period of 1.6 years. In 2011, we granted 449,350 shares of restricted stock units that were to be settled as cash payments over the vesting period under our 2002 stock incentive plan. As of December 31, 2014, all shares granted under this award had either vested or been forfeited. Cash payments at vesting were $1.2 million in 2014. At December 31, 2015, 9.97 million shares were available for future grant under the 2015 omnibus incentive plan. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||
Leases | Leases We lease certain office space as well as data processing equipment and autos under operating leases that expire during the next six years. Generally, rental payments are fixed. Total rental expense under operating leases was $2.2 million in 2015, $2.8 million in 2014, and $4.6 million in 2013. At December 31, 2015, minimum future operating lease payments are as follows (in thousands):
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Litigation and Contingencies |
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Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies Before paying a claim, we review the loan and servicing files to determine the appropriateness of the claim amount. All of our insurance policies provide that we can reduce or deny a claim if the servicer did not comply with its obligations under our insurance policy, including the requirement to mitigate our loss by performing reasonable loss mitigation efforts or, for example, diligently pursuing a foreclosure or bankruptcy relief in a timely manner. We call such reduction of claims submitted to us “curtailments.” In each of 2014 and 2015, curtailments reduced our average claim paid by approximately 6.7%. After we pay a claim, servicers and insureds sometimes object to our curtailments and other adjustments. We review these objections if they are sent to us within 90 days after the claim was paid. When reviewing the loan file associated with a claim, we may determine that we have the right to rescind coverage on the loan. (We refer to insurance rescissions and denials of claims collectively as "rescissions" and variations of that term.) In recent quarters, approximately 5% of claims received in a quarter have been resolved by rescissions, down from the peak of approximately 28% in the first half of 2009. Our loss reserving methodology incorporates our estimates of future rescissions, reversals of rescissions and curtailments. A variance between ultimate actual rescission, reversal and curtailment rates and our estimates, as a result of the outcome of litigation, settlements or other factors, could materially affect our losses. If the insured disputes our right to rescind coverage, we generally engage in discussions in an attempt to settle the dispute. As part of those discussions, we may voluntarily suspend rescissions we believe may be part of a settlement. Certain settlements require GSE approval. The GSEs consented to settlement agreements we entered into with Countrywide Home Loans, Inc. (“CHL”) and its affiliate, Bank of America, N.A., as successor to Countrywide Home Loans Servicing LP, but there is no guarantee they will approve others. We have reached and implemented settlement agreements that do not require GSE approval, but they have not been material in the aggregate. If we are unable to reach a settlement, the outcome of a dispute ultimately would be determined by legal proceedings. Under our policies in effect prior to October 1, 2014, legal proceedings disputing our right to rescind coverage may be brought up to three years after the lender has obtained title to the property (typically through a foreclosure) or the property was sold in a sale that we approved, whichever is applicable, and under our master policy effective October 1, 2014, such proceedings may be brought up to two years from the date of the notice of rescission. In a few jurisdictions there is a longer time to bring such proceedings. Until a liability associated with a settlement agreement or litigation becomes probable and can be reasonably estimated, we consider our claim payment or rescission resolved for financial reporting purposes even though discussions and legal proceedings may have been initiated and are ongoing. Under ASC 450-20, an estimated loss from such discussions and proceedings is accrued for only if we determine that the loss is probable and can be reasonably estimated. The estimated impact that we have recorded is our best estimate of our loss from these matters. If we are not able to implement settlements we consider probable, we intend to defend MGIC vigorously against any related legal proceedings. In addition to the probable settlements for which we have recorded a loss, we are involved in other discussions and/or proceedings with insureds with respect to our claims paying practices. Although it is reasonably possible that when these matters are resolved we will not prevail in all cases, we are unable to make a reasonable estimate or range of estimates of the potential liability. We estimate the maximum exposure associated with matters where a loss is reasonably possible to be approximately $317 million, although we believe we will ultimately resolve these matters for significantly less than this amount. This estimate includes the maximum exposure for losses that we have determined are probable in excess of the provision we have recorded for such losses. The estimates of our maximum exposure referred to above do not include interest or consequential or exemplary damages. Mortgage insurers, including MGIC, have been involved in litigation alleging violations of the anti-referral fee provisions of the Real Estate Settlement Procedures Act, which is commonly known as RESPA, and the notice provisions of the Fair Credit Reporting Act, which is commonly known as FCRA. MGIC’s settlement of class action litigation against it under RESPA became final in October 2003. MGIC settled the named plaintiffs’ claims in litigation against it under FCRA in December 2004, following denial of class certification in June 2004. Since December 2006, class action litigation has been brought against a number of large lenders alleging that their captive mortgage reinsurance arrangements violated RESPA. Beginning in December 2011, MGIC, together with various mortgage lenders and other mortgage insurers, was named as a defendant in twelve lawsuits, alleged to be class actions, filed in various U.S. District Courts. The complaints in all of the cases alleged various causes of action related to the captive mortgage reinsurance arrangements of the mortgage lenders, including that the lenders’ captive reinsurers received excessive premiums in relation to the risk assumed by those captives, thereby violating RESPA. As of the end of the first quarter of 2015, MGIC had been dismissed from all twelve cases. There can be no assurance that we will not be subject to further litigation under RESPA (or FCRA) or that the outcome of any such litigation would not have a material adverse effect on us. In 2013, we entered into a settlement with the CFPB that resolved a federal investigation of MGIC’s participation in captive reinsurance arrangements without the CFPB or the court making any findings of wrongdoing. As part of the settlement, MGIC agreed that it would not enter into any new captive reinsurance agreement or reinsure any new loans under any existing captive reinsurance agreement for a period of ten years. MGIC had voluntarily suspended most of its captive arrangements in 2008 in response to market conditions and GSE requests. In connection with the settlement, MGIC paid a civil penalty of $2.65 million and the court issued an injunction prohibiting MGIC from violating any provisions of RESPA. In 2015, MGIC executed a Consent Order with the Minnesota Department of Commerce that resolved that department’s investigation of captive reinsurance matters without making any findings of wrongdoing. The Consent Order provided, among other things, that MGIC is prohibited from entering into any new captive reinsurance agreement or reinsuring any new loans under any existing captive reinsurance agreement for a period of ten years. Various regulators, including the CFPB, state insurance commissioners and state attorneys general may bring other actions seeking various forms of relief in connection with alleged violations of RESPA. The insurance law provisions of many states prohibit paying for the referral of insurance business and provide various mechanisms to enforce this prohibition. While we believe our practices are in conformity with applicable laws and regulations, it is not possible to predict the eventual scope, duration or outcome of any such reviews or investigations nor is it possible to predict their effect on us or the mortgage insurance industry. Through a non-insurance subsidiary, we utilize our underwriting skills to provide an outsourced underwriting service to our customers known as contract underwriting. As part of the contract underwriting activities, that subsidiary is responsible for the quality of the underwriting decisions in accordance with the terms of the contract underwriting agreements with customers. That subsidiary may be required to provide certain remedies to its customers if certain standards relating to the quality of our underwriting work are not met, and we have an established reserve for such future obligations. Claims for remedies may be made a number of years after the underwriting work was performed. Beginning in the second half of 2009, our subsidiary experienced an increase in claims for contract underwriting remedies, which continued throughout 2012. The related contract underwriting remedy expense was approximately $4 million and $5 million for the years ended December 31, 2014 and 2013, respectively. The underwriting remedy expense for 2015 was approximately $1 million, but may increase in the future. In addition to the matters described above, we are involved in other legal proceedings in the ordinary course of business. In our opinion, based on the facts known at this time, the ultimate resolution of these ordinary course legal proceedings will not have a material adverse effect on our financial position or results of operations. See Note 14 – “Income Taxes” for a description of federal income tax contingencies. |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited Quarterly Financial Data | Unaudited Quarterly Financial Data
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SCHEDULE I-SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES |
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Summary of Investments, Other than Investments in Related Parties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE I-SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | SCHEDULE I — SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2015
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SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT | SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED BALANCE SHEETS PARENT COMPANY ONLY December 31, 2015 and 2014
See accompanying supplementary notes to Parent Company condensed financial statements. MGIC INVESTMENT CORPORATION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF OPERATIONS PARENT COMPANY ONLY Years Ended December 31, 2015, 2014 and 2013
See accompanying supplementary notes to Parent Company condensed financial statements. MGIC INVESTMENT CORPORATION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF CASH FLOWS PARENT COMPANY ONLY Years Ended December 31, 2015, 2014 and 2013
See accompanying supplementary notes to Parent Company condensed financial statements. SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY SUPPLEMENTARY NOTES Note A The accompanying Parent Company financial statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements appearing in Item 8 of this annual report. Note B Our insurance subsidiaries are subject to statutory regulations as to maintenance of policyholders’ surplus and payment of dividends. The maximum amount of dividends that the insurance subsidiaries may pay in any twelve-month period without regulatory approval by the Office of the Commissioner of Insurance of the State of Wisconsin is the lesser of adjusted statutory net income or 10% of statutory policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is defined for this purpose to be the greater of statutory net income, net of realized investment gains, for the calendar year preceding the date of the dividend or statutory net income, net of realized investment gains, for the three calendar years preceding the date of the dividend less dividends paid within the first two of the preceding three calendar years. The convertible senior notes and convertible debentures, discussed in Note 8 – “Debt” to our consolidated financial statements in Item 8, are obligations of MGIC Investment Corporation, our holding company, and not of its subsidiaries. The payment of dividends from our insurance subsidiaries, which other than investment income and raising capital in the public markets, is the principal source of our holding company cash inflow, and is restricted by insurance regulation. MGIC is the principal source of dividend-paying capacity and OCI authorization is required for MGIC to pay dividends. Although MGIC has not paid any dividends to our holding company since 2008, we are discussing with the OCI the resumption of ongoing extraordinary dividends in 2016. During 2015, dividends of $38.5 million were paid to the holding company from other insurance subsidiaries. In the fourth quarter of 2008, we suspended the payment of dividends to shareholders. |
SCHEDULE IV-REINSURANCE |
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Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE IV-REINSURANCE | SCHEDULE IV — REINSURANCE MORTGAGE INSURANCE PREMIUMS EARNED Years Ended December 31, 2015, 2014 and 2013
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||
Basis of Presentation | The accompanying consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”), as codified in the Accounting Standards Codification. In accordance with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
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Principles of Consolidation | The consolidated financial statements include the accounts of MGIC Investment Corporation and its majority-owned subsidiaries. All intercompany transactions have been eliminated. |
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Cash and Cash Equivalents | We consider money market funds and investments with original maturities of three months or less to be cash equivalents. |
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Fair value measurements | To determine the fair value of securities available-for-sale in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including data published in market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. This model combines all inputs to arrive at a value assigned to each security. Quality controls are performed by the independent pricing sources throughout this process, which include reviewing tolerance reports, trading information, data changes, and directional moves compared to market moves. In addition, on a quarterly basis, we perform quality controls over values received from the pricing sources which also include reviewing tolerance reports, trading information, data changes, and directional moves compared to market moves. We have not made any adjustments to the prices obtained from the independent pricing sources. In accordance with fair value guidance, we applied the following fair value hierarchy in order to measure fair value for assets and liabilities: Level 1 - Quoted prices for identical instruments in active markets that we can access. Financial assets utilizing Level 1 inputs primarily include U.S. Treasury securities, equity securities, and Australian government and semi government securities. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and inputs, other than quoted prices, that are observable in the marketplace for the financial instrument. The observable inputs are used in valuation models to calculate the fair value of the financial instruments. Financial assets utilizing Level 2 inputs primarily include obligations of U.S. government corporations and agencies, corporate bonds, mortgage-backed securities, and certain municipal bonds. The independent pricing sources utilize these approaches based on type of investment: Corporate Debt & U.S. Government and Agency Bonds are evaluated by surveying the dealer community, obtaining relevant trade data, benchmark quotes and spreads and incorporating this information into the evaluation process. Obligations of U.S. States & Political Subdivisions are evaluated by tracking, capturing, and analyzing quotes for active issues and trades reported via the Municipal Securities Rulemaking Board records. Daily briefings and reviews of current economic conditions, trading levels, spread relationships, and the slope of the yield curve provide further data for evaluation. Residential Mortgage-Backed Securities are evaluated by monitoring interest rate movements, and other pertinent data daily. Incoming market data is enriched to derive spread, yield and/or price data as appropriate, enabling known data points to be extrapolated for valuation application across a range of related securities. Commercial Mortgage-Backed Securities are evaluated using valuation techniques that reflect market participants’ assumptions and maximize the use of relevant observable inputs including quoted prices for similar assets, benchmark yield curves and market corroborated inputs. Evaluation utilizes regular reviews of the inputs for securities covered, including executed trades, broker quotes, credit information, collateral attributes and/or cash flow waterfall as applicable. Asset-Backed Securities are evaluated using spreads and other information solicited from market buy- and sell-side sources, including primary and secondary dealers, portfolio managers, and research analysts. Cash flows are generated for each tranche, benchmark yields are determined, and deal collateral performance and tranche level attributes including market color as available are used, resulting in tranche-specific spreads. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or value drivers are unobservable or from par values for equity securities restricted in their ability to be redeemed or sold. Level 3 inputs reflect our own assumptions about the assumptions a market participant would use in pricing an asset or liability. Financial assets utilizing Level 3 inputs primarily include equity securities that can only be redeemed or sold at their par value and only to the security issuer and certain state premium tax credit investments. Our non-financial assets that are classified as Level 3 securities consist of real estate acquired through claim settlement. The fair value of real estate acquired is the lower of our acquisition cost or a percentage of the appraised value. The percentage applied to the appraised value is based upon our historical sales experience adjusted for current trends. |
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Investments | Our entire investment portfolio is classified as available-for-sale and is reported at fair value or, for certain equity securities carried at cost, amounts that approximate fair value. The related unrealized investment gains or losses are, after considering the related tax expense or benefit, recognized as a component of accumulated other comprehensive income (loss) in shareholders' equity. Realized investment gains and losses are reported in income based upon specific identification of securities sold. (See Note 6 – “Investments.”) Each quarter we perform reviews of our investments in order to determine whether declines in fair value below amortized cost were considered other-than-temporary. In evaluating whether a decline in fair value is other-than-temporary, we consider several factors including, but not limited to:
Based on our evaluation, we will record an other-than-temporary impairment adjustment on a security if we intend to sell the impaired security, if it is more likely than not that we will be required to sell the impaired security prior to recovery of its amortized cost basis, or if the present value of the discounted cash flows we expect to collect is less than the amortized cost basis of the security. If the fair value of a security is below its amortized cost at the time of our intent to sell, the security is classified as other-than-temporarily impaired and the full amount of the impairment is recognized as a loss in the statement of operations. Otherwise, when a security is considered to be other-than-temporarily impaired, the losses are separated into the portion of the loss that represents the credit loss and the portion that is due to other factors. The credit loss portion is recognized as a loss in the statement of operations, while the loss due to other factors is recognized in accumulated other comprehensive loss, net of taxes. A credit loss is determined to exist if the present value of the discounted cash flows, using the security’s original yield, expected to be collected from the security is less than the cost basis of the security. |
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Home office and equipment | Home office and equipment is carried at cost net of depreciation. For financial reporting purposes, depreciation is determined on a straight-line basis for the home office, equipment and data processing hardware over estimated lives of 45, 5 and 3 years, respectively. For income tax purposes, we use accelerated depreciation methods. Home office and equipment is shown net of accumulated depreciation of $26.1 million, $54.9 million and $53.0 million as of December 31, 2015, 2014 and 2013, respectively. Depreciation expense for the years ended December 31, 2015, 2014 and 2013 was $3.2 million, $2.2 million and $1.8 million, respectively. |
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Deferred Insurance Policy Acquisition Costs | Costs directly associated with the successful acquisition of mortgage insurance business, consisting of employee compensation and other policy issuance and underwriting expenses, are initially deferred and reported as deferred insurance policy acquisition costs (“DAC”). The deferred costs are net of any ceding commissions received associated with our reinsurance agreements. For each underwriting year of business, these costs are amortized to income in proportion to estimated gross profits over the estimated life of the policies. We utilize anticipated investment income in our calculation. This includes accruing interest on the unamortized balance of DAC. The estimates for each underwriting year are reviewed quarterly and updated when necessary to reflect actual experience and any changes to key variables such as persistency or loss development. If a premium deficiency exists (in other words, no gross profit is expected), we reduce the related DAC by the amount of the deficiency or to zero through a charge to current period earnings. If the deficiency is more than the related DAC balance, we then establish a premium deficiency reserve equal to the excess, through a charge to current period earnings. |
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Loss Reserves | Reserves are established for insurance losses and loss adjustment expenses when we receive notices of default on insured mortgage loans. We consider a loan in default when it is two or more payments past due. Even though the accounting standard, Accounting Standards Codification (“ASC”) 944, regarding accounting and reporting by insurance entities specifically excludes mortgage insurance from its guidance relating to loss reserves, we establish loss reserves using the general principles contained in the insurance standard. However, consistent with industry standards for mortgage insurers, we do not establish loss reserves for future claims on insured loans which are not currently in default. Loss reserves are established by estimating the number of loans in our inventory of delinquent loans that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity. Our loss estimates are established based upon historical experience, including rescission and loan modification activity. Adjustments to reserve estimates are reflected in the financial statements in the years in which the adjustments are made. The liability for reinsurance assumed is based on information provided by the ceding companies. Reserves are also established for estimated losses from defaults occurring prior to the close of an accounting period on notices of default not yet reported to us. These incurred but not reported (“IBNR”) reserves are also established using estimated claim rates and claim severities. Reserves also provide for the estimated costs of settling claims, including legal and other expenses and general expenses of administering the claims settlement process. Reserves are also ceded to reinsurers under our reinsurance agreements. |
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Premium Deficiency Reserve | After our loss reserves are initially established, we perform premium deficiency tests using our best estimate assumptions as of the testing date. Premium deficiency reserves are established, if necessary, when the present value of expected future losses and expenses exceeds the present value of expected future premium and already established reserves. The discount rate used in the calculation of the premium deficiency reserve is based upon our pre-tax investment yield at year-end. Products are grouped for premium deficiency purposes based on similarities in the way the products are acquired, serviced and measured for profitability. Calculations of premium deficiency reserves require the use of significant judgments and estimates to determine the present value of future premium and present value of expected losses and expenses on our business. The present value of future premium relies on, among other factors, assumptions about persistency and repayment patterns on underlying loans. The present value of expected losses and expenses depends on assumptions relating to severity of claims and claim rates on current defaults, and expected defaults in future periods. These assumptions also include an estimate of expected rescission activity. Assumptions used in calculating the deficiency reserves can be affected by volatility in the current housing and mortgage lending industries and these effects could be material. To the extent premium patterns and actual loss experience differ from the assumptions used in calculating the premium deficiency reserves, the differences between the actual results and our estimate will affect future period earnings. |
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Revenue Recognition | We write policies which are guaranteed renewable contracts at the insured's option on a monthly, single, or annual premium basis. We have no ability to reunderwrite or reprice these contracts. Premiums written on monthly premium policies are earned as coverage is provided. Premiums written on single premium policies and annual premium policies are initially deferred as unearned premium reserve and earned over the policy life. Premiums written on policies covering more than one year are amortized over the policy life in relationship to the anticipated incurred loss pattern based on historical experience. Premiums written on annual premium policies are earned on a monthly pro rata basis. When a policy is cancelled for a reason other than rescission or claim payment, all premium that is non-refundable is immediately earned. Any refundable premium is returned to the servicer or borrower. Cancellations also include rescissions and policies cancelled due to claim payment. When a policy is rescinded, all previously collected premium is returned to the servicer and when a claim is paid we return any premium received since the date of default. The liability associated with our estimate of premium to be returned is accrued for separately and included in "Other liabilities" on our consolidated balance sheets. When a premium deficiency exists a separate component of the premium refund liability is included in “Premium deficiency reserves” on our consolidated balance sheets. Changes in these liabilities affect premiums written and earned and change in premium deficiency reserve, respectively. The actual return of premium for all periods affects premiums written and earned. Policy cancellations also lower the persistency rate which is a variable used in calculating the rate of amortization of deferred insurance policy acquisition costs. Fee income of our non-insurance subsidiaries is earned and recognized as the services are provided and the customer is obligated to pay. Fee income consists primarily of contract underwriting and related fee-based services provided to lenders and is included in “Other revenue” on the consolidated statements of operations. |
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Income Taxes | Deferred income taxes are provided under the liability method, which recognizes the future tax effects of temporary differences between amounts reported in the financial statements and the tax bases of these items. The expected tax effects are computed at the enacted regular federal tax rate. Using this method, we have recorded a net deferred tax asset primarily due to net operating losses incurred in prior years. On a quarterly basis, we review the need to maintain a deferred tax asset valuation allowance as an offset to the net deferred tax asset, before valuation allowance. We analyze several factors, among which are the severity and frequency of operating losses, our capacity for the carryback or carryforward of any losses, the existence and current level of taxable operating income, operating results on a three year cumulative basis, the expected occurrence of future income or loss, the expiration dates of the carryforwards, the cyclical nature of our operating results, and available tax planning strategies. Based on our analysis, we reduced our benefit from income tax through the recognition of a valuation allowance from the first quarter of 2009 through the second quarter of 2015. In the third quarter of 2015, as discussed in Note 14 –“Income Taxes,” we concluded that it was more likely than not that our deferred tax assets would be fully realizable and that the valuation allowance was no longer necessary. Therefore, we reversed the valuation allowance. We provide for uncertain tax positions and the related interest and penalties based on our assessment of whether a tax benefit is more likely than not to be sustained under any examination by taxing authorities. |
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Benefit Plans | We have a non-contributory defined benefit pension plan covering substantially all employees, as well as a supplemental executive retirement plan. Retirement benefits are based on compensation and years of service. We recognize these retirement benefit costs over the period during which employees render the service that qualifies them for benefits. Our policy is to fund pension cost as required under the Employee Retirement Income Security Act of 1974. We offer both medical and dental benefits for retired domestic employees, their eligible spouses and dependents until the retiree reaches the age of 65. Under the plan retirees pay a premium for these benefits. We accrue the estimated costs of retiree medical and dental benefits over the period during which employees render the service that qualifies them for benefits. |
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Reinsurance | Loss reserves and unearned premiums are reported before taking credit for amounts ceded under reinsurance agreements. Ceded loss reserves are reflected as "Reinsurance recoverable on loss reserves." Ceded unearned premiums are reflected as “Prepaid reinsurance premiums.” Amounts due from reinsurers on paid claims are reflected as “Reinsurance recoverable on paid losses.” Ceded premiums payable are included in “Other liabilities.” Any profit commissions are included with “Premiums written – Ceded” and any ceding commissions are included with “Other underwriting and operating expenses, net.” We remain liable for all insurance ceded. |
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Foreign Currency Translation | Assets and liabilities denominated in a foreign currency are translated at the year-end exchange rates. Operating results are translated at average rates of exchange prevailing during the year. Unrealized gains and losses, net of deferred taxes, resulting from translation are included in accumulated other comprehensive loss in shareholders’ equity. Gains and losses resulting from transactions in a foreign currency are recorded in current period net income (loss) at the rate on the transaction date. |
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Share-Based Compensation | We have certain share-based compensation plans. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period which generally corresponds to the vesting period. The fair value of awards classified as liabilities is remeasured at each reporting period until the award is settled. |
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Earnings per Share | Basic earnings per share (“EPS”) is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. We calculate diluted EPS using the treasury stock method and if-converted method. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if unvested restricted stock units or granted stock options result in the issuance of common stock. Under the if-converted method, diluted EPS reflects the potential dilution that could occur if our convertible debt instruments result in the issuance of common stock. The determination of potentially issuable shares does not consider the satisfaction of the conversion requirements and the shares are included in the determination of diluted EPS as of the beginning of the period, if dilutive. We have several debt issuances that could potentially result in contingently issuable shares and consider each potential issuance of shares separately to reflect the maximum potential dilution. Accordingly, our dilutive common stock equivalents may not reflect all of the contingently issuable shares that could be required to be issued upon any debt conversion. For purposes of calculating basic and diluted EPS, vested restricted stock and restricted stock units are considered outstanding. GAAP requires unvested share-based compensation awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, to be treated as participating securities and included in the computation of EPS pursuant to the two-class method. Our participating securities are composed of vested restricted stock and restricted stock units with non-forfeitable rights to dividends. There have been no dividends declared by us since the issuance of these participating securities and there has been no reduction to net income available to common shareholders. For the years ended December 31, 2015 and 2014, participating securities of 0.1 million have been included in basic EPS, respectively, and 0.1 million have been excluded for the year ended December 31, 2013 as they were anti-dilutive due to our net loss. The computation of diluted EPS for the years ended December 31, 2015 and 2014 include the weighted average unvested restricted stock units outstanding of 2.1 million and 3.1 million, respectively. As a result of reporting a net loss in 2013, unvested restricted stock awards were anti-dilutive for the year and accordingly not included in the computation of diluted weighted average shares. For the year ended December 31, 2015, all of our outstanding Convertible Senior Notes and Convertible Junior Subordinated Debentures are reflected in diluted earnings per share using the “if-converted” method. Under this method, if dilutive, the common stock related to the outstanding Convertible Senior Notes and/or Convertible Junior Debentures is assumed issued as of the beginning of the reporting period and the related interest expense, net of tax, is added back to earnings in calculating diluted EPS. |
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New Accounting Policies | In January 2016, the Financial Accounting Standards Board ("FASB") issued updated guidance to address the recognition, measurement, presentation, and disclosure of certain financial instruments. The updated guidance requires equity investments, except those accounted for under the equity method of accounting, that have a readily determinable fair value to be measured at fair value with changes in fair value recognized in net income. Equity investments that do not have readily determinable fair values may be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. A qualitative assessment for impairment is required for equity investments without readily determinable fair values. The updated guidance also eliminates the requirement to disclose the method and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost on the balance sheet. The updated guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods and will require recognition of a cumulative effect adjustment at adoption. We do not currently expect the adoption of this guidance to impact our financial position or liquidity. In May 2015, the FASB issued updated guidance requiring expanded disclosures for insurance entities that issue short-duration contracts. The expanded disclosures are designed to provide additional insight into an insurance entity's ability to underwrite and anticipate costs associated with claims. The disclosures include information about incurred and paid claims development, on a net of reinsurance basis, for the number of years claims incurred typically remain outstanding, not to exceed ten years. Each period presented in the disclosure about claims development that precedes the current reporting periods is considered supplementary information. The expanded disclosures also include more transparent information about significant changes in methodologies and assumptions used to estimate claims, and the timing, frequency, and severity of claims. The disclosures required by this update are effective for annual periods beginning after December 31, 2015, and interim periods within annual periods beginning after December 31, 2016, and is to be applied retrospectively. We are evaluating the impact, if any, of the new disclosure requirements. In April 2015, the FASB issued updated guidance related to the presentation of debt issuance costs. The new standard requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual and interim reporting periods beginning after December 15, 2015, but early adoption is permitted. As of December 31, 2015 debt issuance costs of approximately $11 million associated with our Convertible Senior Notes are recorded in "Other assets" on the consolidated balance sheet. We will adopt this amended guidance in the first quarter of 2016. In June 2014, the FASB issued updated guidance to resolve diversity in practice concerning employee shared-based compensation that contains performance targets that could be achieved after the requisite service period. The updated guidance requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. The total amount of compensation cost recognized during and after the service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. This updated guidance is effective for annual and interim periods beginning after December 15, 2015. We will adopt this guidance in the first quarter of 2016, which will likely reduce the service periods utilized to recognize expense on certain share-based compensation awards granted in 2016 relative to the service period in the grant terms. The impact is not expected to be material to our consolidated financial statements. In May 2014, the FASB issued updated guidance to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, our fee income related to contract underwriting and other fee-based services provided to lenders will be subject to this guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The guidance is effective for reporting periods beginning after December 15, 2017 with early adoption for reporting periods beginning after December 15, 2016 permitted. We are currently evaluating the impact of this update, but it is not expected to have a material impact on our consolidated financial statements and disclosures. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share | The following table reconciles basic and diluted EPS amounts:
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Investments (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized cost, gross unrealized gains and losses and fair value of investment portfolio | The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio as of December 31, 2015 and 2014 are shown below:
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Amortized cost and fair values of debt securities by contractual maturity | The amortized cost and fair values of debt securities as of December 31, 2015, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most asset-backed and mortgage-backed securities and collateralized loan obligations provide for periodic payments throughout their lives, they are listed below in separate categories.
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Aging of the fair values of securities in an unrealized loss position | For those securities in an unrealized loss position, the length of time the securities were in such a position, as measured by their month-end fair values, is as follows:
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Net investment income | The source of net investment income is as follows:
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Net realized investment gains (losses), including impairment losses, and change in net unrealized appreciation (depreciation) of investments | The net realized investment gains, including impairment losses, and change in net unrealized gains (losses) of investments are as follows:
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Gross realized gains, gross realized losses and impairment losses | The gross realized gains, gross realized losses and impairment losses are as follows:
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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements for items measured at fair value | Assets measured at fair value included those listed, by hierarchy level, in the following tables as of December 31, 2015 and 2014:
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Reconciliation of beginning and ending balance for assets and liabilities measured at fair value with significant unobservable inputs (level 3) | For assets and liabilities measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the years ended December 31, 2015, 2014, and 2013 is shown in the following tables. There were no transfers into or out of Level 3 in those years and there we no losses included in earnings for those years attributable to the change in unrealized losses on assets still held at the end of each applicable year.
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Schedule of carrying value and fair value of financial liabilities measured on a recurring basis | The following tables present the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at December 31, 2015 and 2014. The fair values of our Senior Notes, Convertible Senior Notes and Convertible Junior Debentures were determined using available pricing for these notes, debentures, or similar instruments and they are categorized as Level 2 as described in Note 3 – “Summary of Significant Accounting Policies - Fair Value Measurements.”
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Debt (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | Long-term debt as of December 31, 2015 and 2014 consisted of the following obligations.
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Interest Payments Made | Interest payments on our debt obligations existing during 2015 and 2014 appear below.
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Loss Reserves (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance Loss Reserves [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of beginning and ending loss reserves | The following table provides a reconciliation of beginning and ending loss reserves for each of the past three years:
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Prior year development of the reserves | The prior year development of the reserves in 2015, 2014 and 2013 is reflected in the table below.
(1) A negative number for prior year loss development indicates a redundancy of prior year loss reserves. |
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Rollforward of primary default inventory | A rollforward of our primary default inventory for the years ended December 31, 2015, 2014 and 2013 appears in the table below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers.
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Aging of the primary default inventory | The percentage of loans that have been in default for 12 or more consecutive months has been affected by our suspended rescissions discussed below.
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Number of payments delinquent | The number of payments that a borrower is delinquent is shown in the table below.
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Reinsurance (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quota share reinsurance, excluding captive agreements | A summary of our quota share reinsurance agreements, excluding captive agreements, for 2015, 2014 and 2013 appears below.
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Effect of reinsurance agreements on premiums earned and losses incurred | The effect of all reinsurance agreements on premiums earned and losses incurred is as follows:
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Other Comprehensive (Loss) Income (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | The pretax components of our other comprehensive (loss) income and related income tax benefit (expense) for the years ended December 31, 2015, 2014 and 2013 are included in the table below:
(1) See Note 14 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets. |
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Reclassification out of accumulated other comprehensive income | The pretax and related income tax (expense) benefit components of the amounts reclassified from our accumulated other comprehensive loss to our consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013 are included in the table below:
(1) Increases (decreases) Net realized investment gains on the consolidated statements of operations. (2) Decreases (increases) Other underwriting and operating expenses, net on the consolidated statements of operations. (3) See Note 14 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets. |
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Accumulated other comprehensive income (loss) | A rollforward of accumulated other comprehensive loss for the years ended December 31, 2015, 2014, and 2013, including amounts reclassified from accumulated other comprehensive loss, are included in the table below.
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Benefit Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit cost | The following tables provide the components of aggregate annual net periodic benefit cost for each of the years ended December 31, 2015, 2014, and 2013 and changes in the benefit obligation and the funded status of the pension, supplemental executive retirement and other postretirement benefit plans as recognized in the consolidated balance sheet as of December 31, 2015 and 2014.
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Development of funded status |
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Change in projected benefit obligation | The changes in the projected benefit obligation are as follows:
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Change in plan assets | The changes in the fair value of the net assets available for plan benefits are as follows:
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Change in accumulated other comprehensive income (AOCI) |
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Amortizations expected to be recognized during next fiscal year |
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Actuarial assumptions | The projected benefit obligations, net periodic benefit costs and accumulated postretirement benefit obligation for the plans were determined using the following weighted average assumptions.
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Year-end asset allocations of the plans | The year-end asset allocations of the plans are as follows:
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Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investment allocation strategies | The equity investments utilize combinations of mutual funds, ETFs, and pooled equity account structures focused on the following strategies:
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Minimum and maximum allocation ranges for fixed income securities and equity securities | The primary focus in developing asset allocation ranges for the portfolio is the assessment of the portfolio's investment objectives and the level of risk that is acceptable to obtain those objectives. To achieve these goals the minimum and maximum allocation ranges for fixed income securities and equity securities are:
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Actual and estimated future contributions and actual and estimated future benefit payments | The following tables show the current and estimated future contributions and benefit payments.
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Effect of a 1% change in the health care trend rate assumption | A 1 percentage point change in the health care trend rate assumption would have the following effects on other postretirement benefits:
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Pension Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of plan assets | The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2015 and 2014. There were no securities that utilized Level 3 inputs.
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Other Postretirement Benefit Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of plan assets | The following table sets forth the other postretirement benefits plan assets at fair value as of December 31, 2015 and 2014. All are Level 1 assets.
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net deferred tax assets and liabilities | Net deferred tax assets and liabilities as of December 31, 2015 and 2014 are as follows:
|
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Components of the net deferred tax asset (liability) | The components of the net deferred tax asset (liability) as of December 31, 2015 and 2014 are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Valuation Allowance | The following table provides a rollforward of our deferred tax asset valuation allowance for the year ended December 31, 2015.
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Tax provision (benefit) | The effect of the change in valuation allowance on the provision for (benefit from) income taxes was as follows:
|
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Components of the provision for (benefit from) income taxes | The following summarizes the components of the provision for (benefit from) income taxes:
|
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Reconciliation of federal statutory income tax rate | The reconciliation of the federal statutory income tax rate to the effective tax rate (benefit) provision is as follows:
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Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|
Capital Requirements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Statutory Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of amounts disclosed under statutory accounting practices | The surplus amounts included below are the combined surplus of our insurance operations as utilized in our risk-to-capital calculations.
|
Share-based Compensation Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restricted stock or restricted stock unit activity | A summary of restricted stock or restricted stock unit (collectively called “restricted stock”) activity during 2015 is as follows:
|
Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||
Minimum future operating lease payments | At December 31, 2015, minimum future operating lease payments are as follows (in thousands):
|
Unaudited Quarterly Financial Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited quarterly financial data |
|
Nature of Business (Details) $ in Billions |
Dec. 31, 2015
USD ($)
|
---|---|
Nature of Business [Abstract] | |
Direct domestic primary insurance in force | $ 174.5 |
Direct domestic primary risk in force | $ 45.5 |
Basis of Presentation (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2013
USD ($)
|
Jun. 30, 2013
USD ($)
agreement
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
(Increase) decrease in restricted cash | $ 42,900 | $ (60,300) | $ 17,212 | $ 228 | $ (17,440) |
Loss Contingencies [Line Items] | |||||
Restricted cash and cash equivalents | $ 0 | $ 17,212 | |||
Countrywide Home Loans | |||||
Loss Contingencies [Line Items] | |||||
Number of agreements settled | agreement | 2 |
New Accounting Policies (Details) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Other assets | New Accounting Pronouncement, Early Adoption, Effect | Convertible Senior Notes Due 2017 | Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Debt issuance costs | $ 11 |
Related Party Transactions (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Related Party Transactions [Abstract] | |||
Related party transaction amount | $ 0 | $ 0 | $ 0 |
Investments (Details) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015
USD ($)
security
|
Dec. 31, 2014
USD ($)
security
|
Dec. 31, 2013
USD ($)
|
||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | $ 4,684,148 | $ 4,602,514 | ||||||
Total at end of period | 4,657,561 | 4,609,614 | ||||||
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract] | ||||||||
Fair Value | 5,645 | 3,055 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Amortized Cost | 4,689,773 | 4,605,517 | ||||||
Gross Unrealized Gains | 41,273 | 37,649 | ||||||
Gross Unrealized Losses | [1] | (67,840) | (30,497) | |||||
Fair Value | $ 4,663,206 | 4,612,669 | ||||||
Percentage of foreign investments held in government semigovernment securities (in hundredths) | 87.00% | |||||||
Percentage of foreign investments held in corporate securities (in hundredths) | 7.00% | |||||||
Percentage of foreign investments held in cash equivalents (in hundredths) | 6.00% | |||||||
Percentage of Australian portfolio rated AAA | 89.00% | |||||||
Percentage of Australian portfolio rated AA | 11.00% | |||||||
Fair value investment portfolio in Australian operations | $ 34,000 | |||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Due in one year or less | 280,697 | |||||||
Due after one year through five years | 1,450,854 | |||||||
Due after five years through ten years | 1,207,011 | |||||||
Due after ten years | 1,064,294 | |||||||
Total debt securities with single maturity date | 4,002,856 | |||||||
Total at end of period | 4,684,148 | 4,602,514 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Due in one year or less | 281,063 | |||||||
Due after one year through five years | 1,450,315 | |||||||
Due after five years through ten years | 1,176,468 | |||||||
Due after ten years | 1,081,759 | |||||||
Total debt securities with single maturity date | 3,989,605 | |||||||
Total at end of period | 4,657,561 | 4,609,614 | ||||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 2,209,765 | 1,209,256 | ||||||
12 months or greater | 491,195 | 1,035,884 | ||||||
Total investment portfolio | 2,700,960 | 2,245,140 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | (49,346) | (7,388) | ||||||
12 months or greater | (18,494) | (23,109) | ||||||
Total unrealized losses | (67,840) | (30,497) | ||||||
Accumulated gross unrealized gain (loss) on available-for-sale securities | $ (67,800) | $ (30,500) | ||||||
Number of securities in unrealized loss position | security | 303 | 423 | ||||||
For securities in an unrealized loss position, percentage of weighted average fair value to amortized cost (in hundredths) | 98.00% | |||||||
For securities in an unrealized loss position, percentage backed by the U.S. Government (in hundredths) | 15.00% | |||||||
Recognized other than temporary impairments | $ 0 | $ 144 | $ 328 | |||||
Investments on deposit with various states | 18,900 | 20,200 | ||||||
Total Debt Securities | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | 4,684,148 | 4,602,514 | ||||||
Gross Unrealized Gains | 41,235 | 37,588 | ||||||
Gross Unrealized Losses | [1] | (67,822) | (30,488) | |||||
Total at end of period | 4,657,561 | 4,609,614 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | 4,657,561 | 4,609,614 | ||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Total at end of period | 4,684,148 | 4,602,514 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Total at end of period | 4,657,561 | 4,609,614 | ||||||
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | 160,393 | 349,153 | ||||||
Gross Unrealized Gains | 2,133 | 2,752 | ||||||
Gross Unrealized Losses | [1] | (1,942) | (5,130) | |||||
Total at end of period | 160,584 | 346,775 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | 160,584 | 346,775 | ||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Total at end of period | 160,393 | 349,153 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Total at end of period | 160,584 | 346,775 | ||||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 60,548 | 58,166 | ||||||
12 months or greater | 1,923 | 232,351 | ||||||
Total investment portfolio | 62,471 | 290,517 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | (1,467) | (138) | ||||||
12 months or greater | (475) | (4,992) | ||||||
Total unrealized losses | (1,942) | (5,130) | ||||||
Obligations of U.S. States and Political Subdivisions | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | 1,766,407 | 844,942 | ||||||
Gross Unrealized Gains | 33,410 | 12,961 | ||||||
Gross Unrealized Losses | [1] | (7,290) | (2,761) | |||||
Total at end of period | 1,792,527 | 855,142 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | 1,792,527 | 855,142 | ||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Total at end of period | 1,766,407 | 844,942 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Total at end of period | 1,792,527 | 855,142 | ||||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 417,615 | 166,408 | ||||||
12 months or greater | 37,014 | 114,465 | ||||||
Total investment portfolio | 454,629 | 280,873 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | (6,404) | (1,066) | ||||||
12 months or greater | (886) | (1,695) | ||||||
Total unrealized losses | (7,290) | (2,761) | ||||||
Corporate Debt Securities | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | 2,046,697 | 2,418,991 | ||||||
Gross Unrealized Gains | 2,836 | 16,325 | ||||||
Gross Unrealized Losses | [1] | (44,770) | (10,035) | |||||
Total at end of period | 2,004,763 | 2,425,281 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | 2,004,763 | 2,425,281 | ||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Total at end of period | 2,046,697 | 2,418,991 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Total at end of period | 2,004,763 | 2,425,281 | ||||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 1,470,628 | 816,555 | ||||||
12 months or greater | 114,982 | 243,208 | ||||||
Total investment portfolio | 1,585,610 | 1,059,763 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | (38,519) | (5,259) | ||||||
12 months or greater | (6,251) | (4,776) | ||||||
Total unrealized losses | (44,770) | (10,035) | ||||||
Asset-Backed Securities | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | 116,764 | 286,260 | ||||||
Gross Unrealized Gains | 56 | 535 | ||||||
Gross Unrealized Losses | [1] | (203) | (140) | |||||
Total at end of period | 116,617 | 286,655 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | 116,617 | 286,655 | ||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Debt securities without single maturity date | 116,764 | |||||||
Total at end of period | 116,764 | 286,260 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Debt securities without single maturity date | 116,617 | |||||||
Total at end of period | 116,617 | 286,655 | ||||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 86,604 | 54,491 | ||||||
12 months or greater | 5,546 | 11,895 | ||||||
Total investment portfolio | 92,150 | 66,386 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | (173) | (80) | ||||||
12 months or greater | (30) | (60) | ||||||
Total unrealized losses | (203) | (140) | ||||||
Residential Mortgage-Backed Securities | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | 265,879 | 329,983 | ||||||
Gross Unrealized Gains | 161 | 254 | ||||||
Gross Unrealized Losses | [1] | (8,392) | (9,000) | |||||
Total at end of period | 257,648 | 321,237 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | 257,648 | 321,237 | ||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Debt securities without single maturity date | 265,879 | |||||||
Total at end of period | 265,879 | 329,983 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Debt securities without single maturity date | 257,648 | |||||||
Total at end of period | 257,648 | 321,237 | ||||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 35,064 | 24,168 | ||||||
12 months or greater | 209,882 | 263,002 | ||||||
Total investment portfolio | 244,946 | 287,170 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | (312) | (34) | ||||||
12 months or greater | (8,080) | (8,966) | ||||||
Total unrealized losses | (8,392) | (9,000) | ||||||
Commercial Mortgage-Backed Securities | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | 237,304 | 276,215 | ||||||
Gross Unrealized Gains | 162 | 1,221 | ||||||
Gross Unrealized Losses | [1] | (3,975) | (2,158) | |||||
Total at end of period | 233,491 | 275,278 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | 233,491 | 275,278 | ||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Debt securities without single maturity date | 237,304 | |||||||
Total at end of period | 237,304 | 276,215 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Debt securities without single maturity date | 233,491 | |||||||
Total at end of period | 233,491 | 275,278 | ||||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 134,488 | 89,301 | ||||||
12 months or greater | 69,927 | 110,652 | ||||||
Total investment portfolio | 204,415 | 199,953 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | (2,361) | (810) | ||||||
12 months or greater | (1,614) | (1,348) | ||||||
Total unrealized losses | (3,975) | (2,158) | ||||||
Collateralized Loan Obligations | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | 61,345 | 61,340 | ||||||
Gross Unrealized Gains | 3 | 0 | ||||||
Gross Unrealized Losses | [1] | (1,148) | (1,264) | |||||
Total at end of period | 60,200 | 60,076 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | 60,200 | 60,076 | ||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Debt securities without single maturity date | 61,345 | |||||||
Total at end of period | 61,345 | 61,340 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Debt securities without single maturity date | 60,200 | |||||||
Total at end of period | 60,200 | 60,076 | ||||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 0 | 0 | ||||||
12 months or greater | 51,750 | 60,076 | ||||||
Total investment portfolio | 51,750 | 60,076 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | 0 | 0 | ||||||
12 months or greater | (1,148) | (1,264) | ||||||
Total unrealized losses | (1,148) | (1,264) | ||||||
Debt Securities Issued by Foreign Sovereign Governments | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||||||
Total at end of period | 29,359 | 35,630 | ||||||
Gross Unrealized Gains | 2,474 | 3,540 | ||||||
Gross Unrealized Losses | [1] | (102) | 0 | |||||
Total at end of period | 31,731 | 39,170 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | 31,731 | 39,170 | ||||||
Maturities, Amortized Cost [Abstract] | ||||||||
Total at end of period | 29,359 | 35,630 | ||||||
Maturities, Fair Value [Abstract] | ||||||||
Total at end of period | 31,731 | 39,170 | ||||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 4,463 | 0 | ||||||
12 months or greater | 0 | 0 | ||||||
Total investment portfolio | 4,463 | 0 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | (102) | 0 | ||||||
12 months or greater | 0 | 0 | ||||||
Total unrealized losses | (102) | 0 | ||||||
Equity Securities | ||||||||
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract] | ||||||||
Amortized Cost | 5,625 | 3,003 | ||||||
Gross Unrealized Gains | 38 | 61 | ||||||
Gross Unrealized Losses | [1] | (18) | (9) | |||||
Fair Value | 5,645 | 3,055 | ||||||
Total Investment Portfolio [Abstract] | ||||||||
Fair Value | [2] | 5,645 | 3,055 | |||||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||||||
Less than 12 months | 355 | 167 | ||||||
12 months or greater | 171 | 235 | ||||||
Total investment portfolio | 526 | 402 | ||||||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||||||
Less than 12 months | (8) | (1) | ||||||
12 months or greater | (10) | (8) | ||||||
Total unrealized losses | $ (18) | $ (9) | ||||||
|
Investments, Investment Income By Category (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | $ 106,736 | $ 90,554 | $ 83,425 | ||||||||
Investment expenses | (2,995) | (2,907) | (2,686) | ||||||||
Net investment income | $ 27,926 | $ 25,939 | $ 25,756 | $ 24,120 | $ 23,956 | $ 22,355 | $ 21,180 | $ 20,156 | 103,741 | 87,647 | 80,739 |
Total Debt Securities | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | 105,882 | 89,437 | 82,168 | ||||||||
Equity Securities | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | 208 | 227 | 229 | ||||||||
Cash Equivalents | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | 191 | 179 | 353 | ||||||||
Other | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | $ 455 | $ 711 | $ 675 |
Investments, Gain (Loss) on Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | $ 1,228 | $ 640 | $ 166 | $ 26,327 | $ 434 | $ 632 | $ 522 | $ (231) | $ 28,361 | $ 1,357 | $ 5,731 |
Change in net unrealized gains (losses) | (33,719) | 91,784 | (126,173) | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Gross realized gains | 30,039 | 4,966 | 11,043 | ||||||||
Gross realized losses | (1,678) | (3,465) | (4,984) | ||||||||
Other-than-temporary-impairment losses | 0 | (144) | (328) | ||||||||
Net realized investment gains | $ 1,228 | $ 640 | $ 166 | $ 26,327 | $ 434 | $ 632 | $ 522 | $ (231) | 28,361 | 1,357 | 5,731 |
Available-for-Sale Securities | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | 28,361 | 1,357 | 5,731 | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Net realized investment gains | 28,361 | 1,357 | 5,731 | ||||||||
Available-for-Sale Securities | Fixed Maturities | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | 28,335 | 1,000 | 3,274 | ||||||||
Change in net unrealized gains (losses) | (33,687) | 91,718 | (126,020) | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Net realized investment gains | 28,335 | 1,000 | 3,274 | ||||||||
Available-for-Sale Securities | Equity Securities | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | 26 | 356 | 1,068 | ||||||||
Change in net unrealized gains (losses) | (32) | 66 | (153) | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Net realized investment gains | 26 | 356 | 1,068 | ||||||||
Available-for-Sale Securities | Other | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | 0 | 1 | 1,389 | ||||||||
Change in net unrealized gains (losses) | 0 | 0 | 0 | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Net realized investment gains | $ 0 | $ 1 | $ 1,389 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
|||||
---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | $ 4,663,206 | $ 4,612,669 | |||||
Real estate acquired | [1] | 12,149 | 12,658 | ||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 80,718 | 230,728 | |||||
Real estate acquired | [1] | 0 | 0 | ||||
Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 4,578,405 | 4,379,774 | |||||
Real estate acquired | [1] | 0 | 0 | ||||
Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 4,083 | 2,167 | |||||
Real estate acquired | [1] | 12,149 | 12,658 | ||||
Total Debt Securities | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 4,657,561 | 4,609,614 | |||||
Total Debt Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 77,928 | 227,994 | |||||
Total Debt Securities | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 4,578,405 | 4,379,774 | |||||
Total Debt Securities | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 1,228 | 1,846 | |||||
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 160,584 | 346,775 | |||||
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 46,197 | 188,824 | |||||
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 114,387 | 157,951 | |||||
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Obligations of U.S. States and Political Subdivisions | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 1,792,527 | 855,142 | |||||
Obligations of U.S. States and Political Subdivisions | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Obligations of U.S. States and Political Subdivisions | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 1,791,299 | 853,296 | |||||
Obligations of U.S. States and Political Subdivisions | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 1,228 | 1,846 | |||||
Corporate Debt Securities | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 2,004,763 | 2,425,281 | |||||
Corporate Debt Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Corporate Debt Securities | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 2,004,763 | 2,425,281 | |||||
Corporate Debt Securities | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Asset-Backed Securities | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 116,617 | 286,655 | |||||
Asset-Backed Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Asset-Backed Securities | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 116,617 | 286,655 | |||||
Asset-Backed Securities | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Residential Mortgage-Backed Securities | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 257,648 | 321,237 | |||||
Residential Mortgage-Backed Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Residential Mortgage-Backed Securities | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 257,648 | 321,237 | |||||
Residential Mortgage-Backed Securities | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Commercial Mortgage-Backed Securities | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 233,491 | 275,278 | |||||
Commercial Mortgage-Backed Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Commercial Mortgage-Backed Securities | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 233,491 | 275,278 | |||||
Commercial Mortgage-Backed Securities | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Collateralized Loan Obligations | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 60,200 | 60,076 | |||||
Collateralized Loan Obligations | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Collateralized Loan Obligations | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 60,200 | 60,076 | |||||
Collateralized Loan Obligations | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Debt Securities Issued by Foreign Sovereign Governments | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 31,731 | 39,170 | |||||
Debt Securities Issued by Foreign Sovereign Governments | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 31,731 | 39,170 | |||||
Debt Securities Issued by Foreign Sovereign Governments | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Debt Securities Issued by Foreign Sovereign Governments | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | 0 | 0 | |||||
Equity Securities | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | [2] | 5,645 | 3,055 | ||||
Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | [2] | 2,790 | 2,734 | ||||
Equity Securities | Significant Other Observable Inputs (Level 2) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | [2] | 0 | 0 | ||||
Equity Securities | Significant Unobservable Inputs (Level 3) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total investments | [2] | $ 2,855 | $ 321 | ||||
|
Fair Value Measurements, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Total realized/unrealized gains (losses) [Abstract] | |||
State premium tax credit investments, average maturity | 5 years | ||
Annual average discount rate (in hundredths) | 7.20% | ||
Total Investments [Member] | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | $ 2,167 | $ 2,744 | $ 20,565 |
Total realized/unrealized gains (losses) [Abstract] | |||
Included in earnings and reported as realized investment gains (losses), net | (225) | ||
Included in earnings and reported as losses incurred, net | 0 | 0 | 0 |
Included in other comprehensive income | 0 | ||
Purchases | 2,541 | 30 | 30 |
Sales | (625) | (607) | (17,626) |
Balance at end of period | 4,083 | 2,167 | 2,744 |
Obligations of U.S. States and Political Subdivisions | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 1,846 | 2,423 | 3,130 |
Total realized/unrealized gains (losses) [Abstract] | |||
Included in earnings and reported as realized investment gains (losses), net | 0 | ||
Included in earnings and reported as losses incurred, net | 0 | 0 | 0 |
Included in other comprehensive income | 0 | ||
Purchases | 7 | 30 | 30 |
Sales | (625) | (607) | (737) |
Balance at end of period | 1,228 | 1,846 | 2,423 |
Corporate Debt Securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 0 | 17,114 | |
Total realized/unrealized gains (losses) [Abstract] | |||
Included in earnings and reported as realized investment gains (losses), net | (225) | ||
Included in earnings and reported as losses incurred, net | 0 | ||
Included in other comprehensive income | 0 | ||
Purchases | 0 | ||
Sales | (16,889) | ||
Balance at end of period | 0 | ||
Equity Securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 321 | 321 | 321 |
Total realized/unrealized gains (losses) [Abstract] | |||
Included in earnings and reported as realized investment gains (losses), net | 0 | ||
Included in earnings and reported as losses incurred, net | 0 | 0 | 0 |
Included in other comprehensive income | 0 | ||
Purchases | 2,534 | 0 | 0 |
Sales | 0 | 0 | 0 |
Balance at end of period | 2,855 | 321 | 321 |
Real Estate Acquired | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 12,658 | 13,280 | 3,463 |
Total realized/unrealized gains (losses) [Abstract] | |||
Included in earnings and reported as realized investment gains (losses), net | 0 | ||
Included in earnings and reported as losses incurred, net | (2,322) | (4,129) | (4,959) |
Included in other comprehensive income | 0 | ||
Purchases | 34,624 | 42,247 | 39,188 |
Sales | (32,811) | (38,740) | (24,412) |
Balance at end of period | $ 12,149 | $ 12,658 | $ 13,280 |
Fair Value Measurements - Recurring Measurements of Liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and investments | $ 402,000 | |
Net unrealized losses on holding company investment portfolio | $ 2,700 | |
Modified duration of holding company investment portfolio, excluding cash and cash equivalents | 3 years 1 month 6 days | |
Par Value | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Senior Notes | $ 61,953 | |
Convertible Senior Notes due 2017 | $ 333,503 | 345,000 |
Convertible Senior Notes due 2020 | 500,000 | 500,000 |
Convertible Junior Subordinated Debentures due 2063 | 389,522 | 389,522 |
Total financial liabilities | 1,223,025 | 1,296,475 |
Significant Other Observable Inputs (Level 2) | Estimate of Fair Value Measurement | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Senior Notes | 63,618 | |
Convertible Senior Notes due 2017 | 345,616 | 387,997 |
Convertible Senior Notes due 2020 | 701,955 | 735,075 |
Convertible Junior Subordinated Debentures due 2063 | 455,067 | 500,201 |
Total financial liabilities | $ 1,502,638 | $ 1,686,891 |
Debt (Details) |
1 Months Ended | 2 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Mar. 31, 2013
USD ($)
|
Feb. 26, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
Period
$ / shares
shares
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Debt Instrument [Line Items] | |||||
Long-term debt | $ 1,223,000,000 | $ 1,296,400,000 | |||
Stated interest rate (in hundredths) | 2.00% | ||||
Repurchased senior notes, fair value | $ 73,957,000 | 21,767,000 | $ 17,235,000 | ||
Pretax charge resulting from repurchase of notes | 507,000 | 837,000 | 0 | ||
Net proceeds from convertible senior notes | 0 | 0 | $ 484,625,000 | ||
Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
FHLBC advances | $ 155,000,000 | ||||
FHLBC fixed interest rate | 1.91% | ||||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 0 | 61,900,000 | |||
Minimum percentage of consolidated shareholders' equity that determines designated subsidiary status | 15.00% | ||||
Senior Notes | Senior Notes Due 2015 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 61,900,000 | ||||
Stated interest rate (in hundredths) | 5.375% | 5.375% | |||
Maturity date | Nov. 01, 2015 | Nov. 01, 2015 | |||
Convertible Senior Notes Due 2017 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 333,500,000 | $ 345,000,000 | |||
Stated interest rate (in hundredths) | 5.00% | 5.00% | |||
Maturity date | May 01, 2017 | May 01, 2017 | |||
Repurchased senior notes, fair value | $ 12,000,000 | ||||
Pretax charge resulting from repurchase of notes | $ (500,000) | ||||
Conversion rate (in shares per $1,000 note) | shares | 74.4186 | ||||
Principal amount of notes used in determining conversion rate | $ 1,000 | ||||
Initial conversion price (in dollars per share) | $ / shares | $ 13.44 | ||||
Extinguishment of debt, amount | $ 11,500,000 | ||||
Convertible Senior Notes Due 2017 | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Extinguishment of debt, amount | $ 127,700,000 | ||||
Convertible Senior Notes - due April 2020 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 500,000,000 | $ 500,000,000 | |||
Stated interest rate (in hundredths) | 2.00% | 2.00% | |||
Maturity date | Apr. 01, 2020 | Apr. 01, 2020 | |||
Conversion rate (in shares per $1,000 note) | shares | 143.8332 | ||||
Principal amount of notes used in determining conversion rate | $ 1,000 | ||||
Initial conversion price (in dollars per share) | $ / shares | $ 6.95 | ||||
Net proceeds from convertible senior notes | $ 484,600,000 | ||||
Minimum number of trading days | 20 days | ||||
Maximum number of trading days | 30 days | ||||
Percentage of conversion price (in hundredths) | 130.00% | ||||
130% of conversion price (in dollars per share) | $ / shares | $ 9.03 | ||||
Redemption price, percentage (in hundredths) | 100.00% | ||||
Convertible Junior Subordinated Debentures Due 2063 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 389,500,000 | $ 389,500,000 | |||
Stated interest rate (in hundredths) | 9.00% | 9.00% | |||
Maturity date | Apr. 01, 2063 | Apr. 01, 2063 | |||
Conversion rate (in shares per $1,000 note) | shares | 74.0741 | ||||
Principal amount of notes used in determining conversion rate | $ 1,000 | ||||
Initial conversion price (in dollars per share) | $ / shares | $ 13.50 | ||||
Minimum number of trading days | 20 days | ||||
Maximum number of trading days | 30 days | ||||
Percentage of conversion price (in hundredths) | 130.00% | ||||
130% of conversion price (in dollars per share) | $ / shares | $ 17.55 | ||||
Redemption price, percentage (in hundredths) | 100.00% | ||||
Period preceding election to convert | 5 days | ||||
Minimum number of consecutive interest periods for which interest payments may be deferred | Period | 1 | ||||
Maximum period for which interest payments may be deferred without giving rise to an event of default | 10 years | ||||
Period in which reasonable commercial efforts must begin, maximum | 1 day | ||||
Anniversary payment release of the start of the interest deferral to the Alternative Payment Mechanism in lieu of the final maturity of the debentures | tenth | ||||
Net proceeds cap (in hundredths) | 2.00% | ||||
Maximum number of shares of common stock issuable under the Alternative Payment Mechanism (in shares) | shares | 10,000,000 | ||||
Maximum percentage of aggregate principal amount of the debentures (in hundredths) | 25.00% | ||||
Convertible Junior Debentures at 9% per annum, Due 2063 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate (in hundredths) | 9.00% | ||||
Convertible Junior Debentures at 9% per annum, Due 2063 | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Extinguishment of debt, amount | $ 132,700,000 |
Debt - Summary of Obligations (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,223.0 | $ 1,296.4 |
Less current portion of debt | 0.0 | (61.9) |
Total long-term debt | $ 1,223.0 | 1,234.5 |
Stated interest rate (in hundredths) | 2.00% | |
Interest payments made | $ 65.7 | 66.0 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 0.0 | 61.9 |
Interest payments made | $ 3.3 | 3.6 |
Senior Notes | Senior Notes Due 2015 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 61.9 | |
Stated interest rate (in hundredths) | 5.375% | 5.375% |
Maturity date | Nov. 01, 2015 | Nov. 01, 2015 |
Convertible Senior Notes Due 2017 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 333.5 | $ 345.0 |
Stated interest rate (in hundredths) | 5.00% | 5.00% |
Maturity date | May 01, 2017 | May 01, 2017 |
Interest payments made | $ 17.3 | $ 17.3 |
Convertible Senior Notes - due April 2020 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 500.0 | $ 500.0 |
Stated interest rate (in hundredths) | 2.00% | 2.00% |
Maturity date | Apr. 01, 2020 | Apr. 01, 2020 |
Interest payments made | $ 10.0 | $ 10.0 |
Convertible Junior Subordinated Debentures Due 2063 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 389.5 | $ 389.5 |
Stated interest rate (in hundredths) | 9.00% | 9.00% |
Maturity date | Apr. 01, 2063 | Apr. 01, 2063 |
Interest payments made | $ 35.1 | $ 35.1 |
Loss Reserves - Reconciliation of Changes in Loss Reserves (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
||||||||
Loss Reserve [Roll Forward] | |||||||||||
Reserve at beginning of year | $ 2,396,807 | $ 3,061,401 | $ 4,056,843 | ||||||||
Less reinsurance recoverable | 44,487 | 57,841 | 64,085 | $ 104,848 | |||||||
Net reserve at beginning of year | 1,848,915 | 2,338,966 | 2,997,316 | $ 3,951,995 | |||||||
Losses incurred: [Abstract] | |||||||||||
Current year | 453,849 | 596,436 | 898,413 | ||||||||
Prior years | [1],[2] | (110,302) | (100,359) | (59,687) | |||||||
Subtotal | 343,547 | 496,077 | 838,726 | ||||||||
Losses paid [Abstract] | |||||||||||
Current year | 25,980 | 32,919 | 73,470 | ||||||||
Prior years | 823,058 | 1,121,508 | 1,722,923 | ||||||||
Reinsurance terminations | [3] | (15,440) | 0 | (2,988) | |||||||
Subtotal | 833,598 | 1,154,427 | 1,793,405 | ||||||||
Reserve at end of year | $ 1,893,402 | $ 2,396,807 | $ 3,061,401 | ||||||||
|
Loss Reserves - Prior Year Loss Reserves (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Prior years | [1],[2] | $ (110,302) | $ (100,359) | $ (59,687) | |||
(Decrease) Increase in Estimated Claim Rate on primary Defaults | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Prior years | (141,000) | (43,000) | 10,000 | ||||
Increase (Decrease) in Estimated Severity, Primary Defaults | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Prior years | 43,000 | (35,000) | (50,000) | ||||
Change in Estimates Related to Pool Reserves, LAE Reserves, Reinsurance and Other | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Prior years | $ (12,000) | $ (22,000) | $ (20,000) | ||||
|
Loss Reserves - Default Inventory Reconciliation (Details) - loan |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Primary Default Inventory [Roll Forward] | |||
Default inventory at beginning of year | 79,901 | 103,328 | 139,845 |
New Notices | 74,315 | 88,844 | 106,823 |
Cures | (73,610) | (87,278) | (104,390) |
Paids (including those charged to a deductible or captive) | (16,004) | (23,494) | (34,738) |
Rescissions and denials | (848) | (1,306) | (1,939) |
Items removed from inventory resulting from settlements | (1,121) | (193) | (2,273) |
Default inventory at end of year | 62,633 | 79,901 | 103,328 |
Loss Reserves - Aging of Primary Default Inventory and Number of Delinquent Payments (Details) - loan |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
|||||
---|---|---|---|---|---|---|---|---|---|
Aging of the Primary Default Inventory [Abstract] | |||||||||
3 months or less | 13,053 | 15,319 | 18,941 | ||||||
3 months or less (in hundredths) | 21.00% | 19.00% | 18.00% | ||||||
4 - 11 months | 15,763 | 19,710 | 24,514 | ||||||
4 - 11 months (in hundredths) | 25.00% | 25.00% | 24.00% | ||||||
12 months or more | [1] | 33,817 | 44,872 | 59,873 | |||||
12 months or more (in hundredths) | [1] | 54.00% | 56.00% | 58.00% | |||||
Total primary default inventory | 62,633 | 79,901 | 103,328 | 139,845 | |||||
Total primary default inventory (in hundredths) | 100.00% | 100.00% | 100.00% | ||||||
Primary claims received inventory included in ending default inventory | [2] | 2,769 | 4,746 | 6,948 | |||||
Primary claims received inventory included in ending default inventory (in hundredths) | [2] | 4.00% | 6.00% | 7.00% | |||||
Number of Payments Delinquent [Abstract] | |||||||||
3 payments or less | 20,360 | 23,253 | 28,095 | ||||||
3 payments or less (in hundredths) | 33.00% | 29.00% | 27.00% | ||||||
4 - 11 payments | 15,092 | 19,427 | 24,605 | ||||||
4 - 11 payments (in hundredths) | 24.00% | 24.00% | 24.00% | ||||||
12 payments or more | 27,181 | 37,221 | 50,628 | ||||||
12 payments or more (in hundredths) | 43.00% | 47.00% | 49.00% | ||||||
Total primary default inventory | 62,633 | 79,901 | 103,328 | 139,845 | |||||
Total primary default inventory (in hundredths) | 100.00% | 100.00% | 100.00% | ||||||
|
Loss Reserves - Narrative (Details) $ in Millions |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 01, 2012
USD ($)
Installment
|
Dec. 31, 2012
USD ($)
|
Dec. 31, 2015
USD ($)
loan
|
Dec. 31, 2014
USD ($)
loan
|
Dec. 31, 2013
loan
|
|
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Premium refund liability, expected claim payments | $ 102.0 | $ 115.0 | |||
Pool insurance notice inventory (in number of loans) | loan | 2,739 | 3,797 | 6,563 | ||
Percent of inventory in default for more than 36 consecutive months | 50.00% | 53.00% | 49.00% | ||
Number of rescindable loans affected by Company's decision to voluntarily suspend rescissions | loan | 435 | ||||
Premium refund liability, expected future rescissions | $ 7.0 | $ 28.0 | |||
Freddie Mac's Disagreement on Aggregate Loss Limit | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Obligations under the disputed policies | $ 267.5 | ||||
Amount paid as per settlement agreement | $ 100.0 | ||||
Remaining amount of unpaid settlement agreement | $ 167.5 | ||||
Number of installments to pay settlement agreement amount | Installment | 48 | ||||
(Decrease) Increase in Estimated Claim Rate on primary Defaults | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Percentage of prior year default inventory resolved (in hundredths) | 60.00% | 58.00% | 59.00% |
Premium Deficiency Reserve (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Premium Deficiency Reserve [Abstract] | |||
Change in premium deficiency reserve | $ (24) | $ (24) | $ (26) |
Reinsurance - Narrative (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2015 |
Sep. 30, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||||||||
Effects of Reinsurance [Line Items] | |||||||||||||||
Ceded premiums written, net of profit commission | $ 55,391,000 | $ 119,634,000 | $ 73,503,000 | ||||||||||||
Premiums earned, ceded | 102,848,000 | 108,255,000 | $ 38,101,000 | ||||||||||||
Profit commission receivable | $ 0 | $ 91,500,000 | |||||||||||||
Period of existing captive reinsurance agreement | 10 years | 10 years | 10 years | ||||||||||||
Reinsurance recoverable on loss reserves related to captive agreements | $ 34,000,000 | $ 45,000,000 | |||||||||||||
Fair value of trust fund assets under our captive agreements | 137,000,000 | 198,000,000 | |||||||||||||
Quota Share Reinsurance Agreement, 2013 | |||||||||||||||
Effects of Reinsurance [Line Items] | |||||||||||||||
Ceded premiums written, net of profit commission | $ 69,400,000 | (11,355,000) | [1] | 100,031,000 | $ 49,672,000 | ||||||||||
Premiums earned, ceded | 11,600,000 | 35,999,000 | [1] | 88,528,000 | 13,821,000 | ||||||||||
Reinsurance, ceding commission | $ 11,600,000 | 10,235,000 | [1],[2] | 37,833,000 | [2] | 10,408,000 | [2] | ||||||||
Profit commission | $ 142,500,000 | 62,525,000 | [1] | $ 89,133,000 | $ 2,368,000 | ||||||||||
Quota Share Reinsurance Agreement, 2015 | |||||||||||||||
Effects of Reinsurance [Line Items] | |||||||||||||||
Ceded premiums written, net of profit commission | [3] | 52,588,000 | |||||||||||||
Premiums earned, ceded | [3] | 52,588,000 | |||||||||||||
Reinsurance, ceding commission | [2] | 20,582,000 | |||||||||||||
Profit commission | $ 50,322,000 | ||||||||||||||
Contingent termination fee | $ 0 | ||||||||||||||
Threshold for private mortgage insurer eligibility requirements for termination election | 90.00% | ||||||||||||||
Quota share, percentage | 30.00% | ||||||||||||||
Ceding commission, percentage | 20.00% | ||||||||||||||
Loss ratio | 60.00% | ||||||||||||||
|
Reinsurance - Summary of Quota Share Reinsurance Agreements (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2015 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||||||||
Ceded premiums written, net of profit commission | $ 55,391 | $ 119,634 | $ 73,503 | |||||||||||||||||||
Ceded to Other Companies | 102,848 | 108,255 | 38,101 | |||||||||||||||||||
Ceded losses incurred | 27,685 | 29,986 | 27,790 | |||||||||||||||||||
Premiums Earned, Net [Abstract] | ||||||||||||||||||||||
Premiums earned, direct | 997,892 | 950,973 | 979,078 | |||||||||||||||||||
Premiums earned, assumed | 1,178 | 1,653 | 2,074 | |||||||||||||||||||
Premiums earned, ceded | (102,848) | (108,255) | (38,101) | |||||||||||||||||||
Net premiums earned | $ 226,192 | $ 239,234 | $ 213,508 | $ 217,288 | $ 213,589 | $ 209,035 | $ 207,486 | $ 214,261 | 896,222 | 844,371 | 943,051 | |||||||||||
Policyholder Benefits and Claims Incurred, Net [Abstract] | ||||||||||||||||||||||
Losses incurred, direct | 369,680 | 524,051 | 863,871 | |||||||||||||||||||
Losses incurred, assumed | 1,552 | 2,012 | 2,645 | |||||||||||||||||||
Losses incurred, ceded | (27,685) | (29,986) | (27,790) | |||||||||||||||||||
Net losses incurred | $ 95,066 | 76,458 | $ 90,238 | $ 81,785 | $ 117,074 | $ 115,254 | $ 141,141 | $ 122,608 | 343,547 | 496,077 | 838,726 | |||||||||||
Quota Share Reinsurance Agreement, 2013 | ||||||||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||||||||
Ceded premiums written, net of profit commission | 69,400 | (11,355) | [1] | 100,031 | 49,672 | |||||||||||||||||
Ceded to Other Companies | 11,600 | 35,999 | [1] | 88,528 | 13,821 | |||||||||||||||||
Ceded losses incurred | 6,060 | 15,163 | 176 | |||||||||||||||||||
Reinsurance, ceding commission | 11,600 | 10,235 | [1],[2] | 37,833 | [2] | 10,408 | [2] | |||||||||||||||
Profit commission | $ 142,500 | 62,525 | [1] | 89,133 | 2,368 | |||||||||||||||||
Premiums Earned, Net [Abstract] | ||||||||||||||||||||||
Premiums earned, ceded | $ (11,600) | (35,999) | [1] | (88,528) | (13,821) | |||||||||||||||||
Policyholder Benefits and Claims Incurred, Net [Abstract] | ||||||||||||||||||||||
Losses incurred, ceded | (6,060) | $ (15,163) | $ (176) | |||||||||||||||||||
Quota Share Reinsurance Agreement, 2015 | ||||||||||||||||||||||
Effects of Reinsurance [Line Items] | ||||||||||||||||||||||
Ceded premiums written, net of profit commission | [3] | 52,588 | ||||||||||||||||||||
Ceded to Other Companies | [3] | 52,588 | ||||||||||||||||||||
Ceded losses incurred | 11,424 | |||||||||||||||||||||
Reinsurance, ceding commission | [2] | 20,582 | ||||||||||||||||||||
Profit commission | 50,322 | |||||||||||||||||||||
Premiums Earned, Net [Abstract] | ||||||||||||||||||||||
Premiums earned, ceded | [3] | (52,588) | ||||||||||||||||||||
Policyholder Benefits and Claims Incurred, Net [Abstract] | ||||||||||||||||||||||
Losses incurred, ceded | $ (11,424) | |||||||||||||||||||||
|
Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||||||
Components of Other Comprehensive Income (Loss) [Abstract] | ||||||||||||||||||
Net unrealized investment (losses) gains arising during the year | $ (33,718) | $ 91,782 | $ (126,175) | |||||||||||||||
Income tax benefit (expense) | 11,738 | (32,017) | 43,732 | |||||||||||||||
Valuation allowance | [1] | 62,383 | 31,374 | (41,148) | ||||||||||||||
Net of taxes | 40,403 | 91,139 | (123,591) | |||||||||||||||
Net changes in benefit plan assets and obligations | (12,818) | (52,112) | 68,038 | |||||||||||||||
Income tax benefit (expense) | 4,487 | 18,239 | (23,813) | |||||||||||||||
Valuation allowance | [1] | (7,383) | (18,239) | 23,813 | ||||||||||||||
Net of taxes | (15,714) | (52,112) | 68,038 | |||||||||||||||
Net changes in unrealized foreign currency translation adjustment | (5,699) | (4,067) | (21,563) | |||||||||||||||
Income tax benefit | 2,000 | 1,425 | 7,553 | |||||||||||||||
Valuation allowance | [1] | (529) | 0 | 0 | ||||||||||||||
Net of taxes | (4,228) | (2,642) | (14,010) | |||||||||||||||
Total other comprehensive (loss) income | (52,235) | 35,603 | (79,700) | |||||||||||||||
Total income tax benefit, net of valuation allowance | 72,696 | 782 | 10,137 | |||||||||||||||
Other comprehensive income (loss), net of tax | 20,461 | 36,385 | (69,563) | |||||||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | ||||||||||||||||||
Total reclassifications | 487,687 | 254,723 | (46,152) | |||||||||||||||
Income tax (expense) benefit | (163,497) | (91,607) | 17,239 | |||||||||||||||
Change in valuation allowance | 161,158 | 88,833 | (20,935) | |||||||||||||||
Total income tax expense, net of valuation allowance | $ (6,584) | $ 695,604 | $ (1,322) | $ (3,385) | $ (681) | $ (249) | $ (1,118) | $ (726) | 684,313 | (2,774) | (3,696) | |||||||
Net income (loss) | 102,418 | $ 822,852 | $ 113,654 | 133,076 | 74,428 | $ 72,017 | $ 45,522 | 59,982 | 1,172,000 | 251,949 | (49,848) | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||||||||||||
Balance, beginning of year | 1,036,903 | 744,538 | 1,036,903 | 744,538 | ||||||||||||||
Balance, end of year | 2,236,140 | 1,036,903 | 2,236,140 | 1,036,903 | 744,538 | |||||||||||||
Accumulated other comprehensive loss | ||||||||||||||||||
Components of Other Comprehensive Income (Loss) [Abstract] | ||||||||||||||||||
Other comprehensive income (loss), net of tax | 20,461 | 36,385 | (69,563) | |||||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||||||||||||
Balance, beginning of year | (81,341) | (117,726) | (81,341) | (117,726) | (48,163) | |||||||||||||
Other comprehensive income (loss) before reclassifications | 33,707 | 36,399 | (67,589) | |||||||||||||||
Less: Amounts reclassified from AOCL | 13,246 | 14 | 1,974 | |||||||||||||||
Balance, end of year | (60,880) | (81,341) | (60,880) | (81,341) | (117,726) | |||||||||||||
Unrealized gains and losses on available-for- sale securities | ||||||||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||||||||||||
Balance, beginning of year | (57,551) | (148,690) | (57,551) | (148,690) | (25,099) | |||||||||||||
Other comprehensive income (loss) before reclassifications | 51,655 | 84,223 | (121,618) | |||||||||||||||
Less: Amounts reclassified from AOCL | 11,252 | (6,916) | 1,973 | |||||||||||||||
Balance, end of year | (17,148) | (57,551) | (17,148) | (57,551) | (148,690) | |||||||||||||
Defined benefit plans | ||||||||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||||||||||||
Balance, beginning of year | (28,938) | 23,174 | (28,938) | 23,174 | (44,864) | |||||||||||||
Other comprehensive income (loss) before reclassifications | (13,720) | (45,182) | 68,039 | |||||||||||||||
Less: Amounts reclassified from AOCL | 1,994 | 6,930 | 1 | |||||||||||||||
Balance, end of year | (44,652) | (28,938) | (44,652) | (28,938) | 23,174 | |||||||||||||
Accumulated foreign currency translation | ||||||||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||||||||||||
Balance, beginning of year | $ 5,148 | $ 7,790 | 5,148 | 7,790 | 21,800 | |||||||||||||
Other comprehensive income (loss) before reclassifications | (4,228) | (2,642) | (14,010) | |||||||||||||||
Less: Amounts reclassified from AOCL | 0 | 0 | 0 | |||||||||||||||
Balance, end of year | $ 920 | $ 5,148 | 920 | 5,148 | 7,790 | |||||||||||||
Reclassification from Accumulated Other Comprehensive Income | ||||||||||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | ||||||||||||||||||
Total reclassifications | 13,877 | 114 | 3,247 | |||||||||||||||
Total income tax expense, net of valuation allowance | (631) | (100) | (1,273) | |||||||||||||||
Net income (loss) | 13,246 | 14 | 1,974 | |||||||||||||||
Reclassification from Accumulated Other Comprehensive Income | Unrealized gains and losses on available-for- sale securities | ||||||||||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | ||||||||||||||||||
Total reclassifications | [2] | 11,693 | (6,816) | 3,246 | ||||||||||||||
Income tax (expense) benefit | (4,076) | 2,402 | (924) | |||||||||||||||
Change in valuation allowance | [1] | 3,635 | (2,502) | (349) | ||||||||||||||
Net income (loss) | 11,252 | (6,916) | 1,973 | |||||||||||||||
Reclassification from Accumulated Other Comprehensive Income | Defined benefit plans | ||||||||||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | ||||||||||||||||||
Total reclassifications | [3] | 2,184 | 6,930 | 1 | ||||||||||||||
Income tax (expense) benefit | (764) | (2,425) | 0 | |||||||||||||||
Change in valuation allowance | [1] | 574 | 2,425 | 0 | ||||||||||||||
Net income (loss) | $ 1,994 | $ 6,930 | $ 1 | |||||||||||||||
|
Benefit Plans - Components of Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Pension and Supplemental Executive Retirement Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Company Service Cost | $ 10,256 | $ 8,565 | $ 11,338 |
Interest Cost | 15,847 | 15,987 | 15,289 |
Expected Return on Assets | (21,109) | (21,030) | (20,144) |
Other Adjustments | 0 | 0 | 0 |
Subtotal | 4,994 | 3,522 | 6,483 |
Amortization of Net Transition Obligation/(Asset) | 0 | 0 | 0 |
Amortization of Net Prior Service Cost/(Credit) | (845) | (930) | 503 |
Amortization of Net Losses/(Gains) | 5,485 | 1,083 | 6,145 |
Total Amortization | 4,640 | 153 | 6,648 |
Net Periodic Benefit Cost | 9,634 | 3,675 | 13,131 |
Cost of settlements or curtailments | 3,172 | 302 | 0 |
Total Expense for Year | 12,806 | 3,977 | 13,131 |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Company Service Cost | 833 | 659 | 812 |
Interest Cost | 697 | 653 | 618 |
Expected Return on Assets | (4,991) | (4,648) | (3,679) |
Other Adjustments | 0 | 0 | 0 |
Subtotal | (3,461) | (3,336) | (2,249) |
Amortization of Net Transition Obligation/(Asset) | 0 | 0 | 0 |
Amortization of Net Prior Service Cost/(Credit) | (6,649) | (6,649) | (6,649) |
Amortization of Net Losses/(Gains) | (175) | (435) | 0 |
Total Amortization | (6,824) | (7,084) | (6,649) |
Net Periodic Benefit Cost | (10,285) | (10,420) | (8,898) |
Cost of settlements or curtailments | 0 | 0 | 0 |
Total Expense for Year | $ (10,285) | $ (10,420) | $ (8,898) |
Benefit Plans - Development of Funded Status (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Pension and Supplemental Executive Retirement Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Measurement Date | 12/31/2015 | 12/31/2014 | |
Accumulated Benefit Obligation | $ 338,450 | $ 366,440 | |
Projected Benefit Obligation | (349,483) | (379,324) | $ (317,606) |
Plan Assets at Fair Value | 350,107 | 378,701 | 355,704 |
Funded Status - Overfunded/(Underfunded) | $ 624 | $ (623) | |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Measurement Date | 12/31/2015 | 12/31/2014 | |
Accumulated Benefit Obligation | $ 16,423 | $ 18,225 | |
Projected Benefit Obligation | (16,423) | (18,225) | (15,764) |
Plan Assets at Fair Value | 65,568 | 66,940 | $ 62,298 |
Funded Status - Overfunded/(Underfunded) | $ 49,145 | $ 48,715 |
Benefit Plans - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|
Pension and Supplemental Executive Retirement Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net Actuarial (Gain)/Loss | $ 95,636 | $ 93,243 | |
Net Prior Service Cost/(Credit) | (2,989) | (3,853) | |
Net Transition Obligation/(Asset) | 0 | 0 | |
Total at Year End | 92,647 | 89,390 | $ 45,143 |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net Actuarial (Gain)/Loss | (5,311) | (8,222) | |
Net Prior Service Cost/(Credit) | (18,640) | (25,289) | |
Net Transition Obligation/(Asset) | 0 | 0 | |
Total at Year End | $ (23,951) | $ (33,511) | $ (41,377) |
Benefit Plans - Change in Project Benefit/Accumulated Benefit Obligations (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||
Pension and Supplemental Executive Retirement Plans | ||||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||||
Benefit Obligation at Beginning of Year | $ 379,324 | $ 317,606 | ||||
Company Service Cost | 10,256 | 8,565 | $ 11,338 | |||
Interest Cost | 15,847 | 15,987 | 15,289 | |||
Plan Participants' Contributions | 0 | 0 | ||||
Net Actuarial (Gain)/Loss due to Assumption Changes | (24,118) | 59,901 | ||||
Net Actuarial (Gain)/Loss due to Plan Experience | 7,155 | (55) | ||||
Benefit Payments from Fund | [1] | (32,646) | (21,539) | |||
Benefit Payments Directly by Company | (7,661) | (1,404) | ||||
Plan Amendments | 19 | (1) | ||||
Other Adjustment | 1,307 | 264 | ||||
Benefit Obligation at End of Year | 349,483 | 379,324 | 317,606 | |||
Other Postretirement Benefit Plan | ||||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||||
Benefit Obligation at Beginning of Year | 18,225 | 15,764 | ||||
Company Service Cost | 833 | 659 | 812 | |||
Interest Cost | 697 | 653 | 618 | |||
Plan Participants' Contributions | 361 | 336 | ||||
Net Actuarial (Gain)/Loss due to Assumption Changes | (2,083) | 2,276 | ||||
Net Actuarial (Gain)/Loss due to Plan Experience | (397) | (855) | ||||
Benefit Payments from Fund | [1] | (1,147) | (645) | |||
Benefit Payments Directly by Company | 0 | 0 | ||||
Plan Amendments | 0 | 0 | ||||
Other Adjustment | (66) | 37 | ||||
Benefit Obligation at End of Year | $ 16,423 | $ 18,225 | $ 15,764 | |||
|
Benefit Plans - Change in Plan Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
||||
Pension and Supplemental Executive Retirement Plans | |||||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||||
Fair Value of Plan Assets at Beginning of Year | $ 378,701 | $ 355,704 | |||
Company Contributions | 17,311 | 9,504 | |||
Plan Participants' Contributions | 0 | 0 | |||
Benefit Payments from Fund | [1] | (32,646) | (21,539) | ||
Benefit Payments Directly by Company | (7,661) | (1,404) | |||
Actual Return on Assets | (5,094) | 36,436 | |||
Other Adjustment | (504) | 0 | |||
Fair Value of Plan Assets at End of Year | 350,107 | 378,701 | |||
Other Postretirement Benefit Plan | |||||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||||
Fair Value of Plan Assets at Beginning of Year | 66,940 | 62,298 | |||
Company Contributions | 0 | 0 | |||
Plan Participants' Contributions | 361 | 336 | |||
Benefit Payments from Fund | [1] | (1,147) | (645) | ||
Benefit Payments Directly by Company | 0 | 0 | |||
Actual Return on Assets | (225) | 5,250 | |||
Other Adjustment | (361) | (299) | |||
Fair Value of Plan Assets at End of Year | $ 65,568 | $ 66,940 | |||
|
Benefit Plans - Change in Accumulated Other Comprehensive Income (AOCI) and Expected Amortization (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Pension and Supplemental Executive Retirement Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
AOCI in Prior Year | $ 89,390 | $ 45,143 |
Recognized during year - Prior Service (Cost)/Credit | 845 | 930 |
Recognized during year - Net Actuarial (Losses)/Gains | (5,485) | (1,083) |
Occurring during year - Prior Service Cost | 19 | (1) |
Occurring during year - Net Actuarial Losses/(Gains) | 11,050 | 44,703 |
Occurring during year - Net Settlement Losses/(Gains) | (3,172) | (302) |
Other adjustments | 0 | 0 |
AOCI in Current Year | 92,647 | 89,390 |
Amortization of Net Transition Obligation/(Asset) | 0 | |
Amortization of Prior Service Cost/(Credit) | (689) | |
Amortization of Net Losses/(Gains) | 5,443 | |
Other Postretirement Benefit Plan | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
AOCI in Prior Year | (33,511) | (41,377) |
Recognized during year - Prior Service (Cost)/Credit | 6,649 | 6,649 |
Recognized during year - Net Actuarial (Losses)/Gains | 175 | 435 |
Occurring during year - Prior Service Cost | 0 | 0 |
Occurring during year - Net Actuarial Losses/(Gains) | 2,736 | 782 |
Occurring during year - Net Settlement Losses/(Gains) | 0 | 0 |
Other adjustments | 0 | 0 |
AOCI in Current Year | (23,951) | $ (33,511) |
Amortization of Net Transition Obligation/(Asset) | 0 | |
Amortization of Prior Service Cost/(Credit) | (6,649) | |
Amortization of Net Losses/(Gains) | $ 0 |
Benefit Plans - Actuarial Assumptions and Year-End Asset Allocations (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Pension and Supplemental Executive Retirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount Rate (in hundredths) | 4.65% | 4.25% |
Rate of Compensation Increase (in hundredths) | 3.00% | 3.00% |
Discount Rate (in hundredths) | 4.25% | 5.15% |
Expected Long-term Return on Plan Assets (in hundredths) | 5.75% | 6.00% |
Rate of Compensation Increase (in hundredths) | 3.00% | 3.00% |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 100.00% | 100.00% |
Pension Plan | Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 20.00% | 22.00% |
Pension Plan | Total Debt Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 80.00% | 78.00% |
Other Postretirement Benefit Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount Rate (in hundredths) | 4.30% | 4.00% |
Discount Rate (in hundredths) | 4.00% | 4.75% |
Expected Long-term Return on Plan Assets (in hundredths) | 7.50% | 7.50% |
Health Care Cost Trend Rate Assumed for Next Year (in hundredths) | 7.00% | 7.00% |
Rate to Which the Cost Trend Rate is Assumed to Decline (Ultimate Trend Rate) (in hundredths) | 5.00% | 5.00% |
Year That the Rate Reaches the Ultimate Trend Rate | 2020 | 2019 |
Weighted-average asset allocations of plans (in hundredths) | 100.00% | 100.00% |
Other Postretirement Benefit Plan | Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 100.00% | 100.00% |
Other Postretirement Benefit Plan | Total Debt Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 0.00% | 0.00% |
Benefit Plans - Fair Value of Plan Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | $ 350,107 | $ 378,701 | |
Pension Plan | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 10,251 | 20,876 | |
Pension Plan | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 339,856 | 357,825 | |
Pension Plan | Domestic Mutual Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 1,442 | 9,913 | |
Pension Plan | Domestic Mutual Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 1,442 | 9,913 | |
Pension Plan | Domestic Mutual Funds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Corporate Debt Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 188,332 | 200,732 | |
Pension Plan | Corporate Debt Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Corporate Debt Securities | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 188,332 | 200,732 | |
Pension Plan | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 3,630 | 6,561 | |
Pension Plan | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 3,133 | 5,327 | |
Pension Plan | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 497 | 1,234 | |
Pension Plan | Obligations of U.S. States and Political Subdivisions | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 61,206 | 65,214 | |
Pension Plan | Obligations of U.S. States and Political Subdivisions | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Obligations of U.S. States and Political Subdivisions | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 61,206 | 65,214 | |
Pension Plan | Foreign Debt Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 25,251 | 23,028 | |
Pension Plan | Foreign Debt Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Foreign Debt Securities | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 25,251 | 23,028 | |
Pension Plan | Exchange traded fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 5,676 | 5,636 | |
Pension Plan | Exchange traded fund | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 5,676 | 5,636 | |
Pension Plan | Exchange traded fund | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Pooled Equity Accounts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 64,570 | 67,617 | |
Pension Plan | Pooled Equity Accounts | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Pooled Equity Accounts | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 64,570 | 67,617 | |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 65,568 | 66,940 | $ 62,298 |
Other Postretirement Benefit Plan | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 65,568 | 66,940 | |
Other Postretirement Benefit Plan | Domestic Mutual Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 49,887 | 50,710 | |
Other Postretirement Benefit Plan | Domestic Mutual Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 49,887 | 50,710 | |
Other Postretirement Benefit Plan | International Mutual Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 15,681 | 16,230 | |
Other Postretirement Benefit Plan | International Mutual Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | $ 15,681 | $ 16,230 |
Benefit Plans - Additional Disclosures (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Effect of 1-percentage point increase on total service and interest cost component | $ 304 | |
Effect of 1-percentage point decrease on total service and interest cost components | (253) | |
Effect of 1-percentage point increase on postretirement benefit obligation | 2,221 | |
Effect of 1-percentage point decrease on postretirement benefit obligation | (1,959) | |
Other Postretirement Benefit Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Company Contributions | 0 | $ 0 |
Current plus 1 | 0 | |
Current | 851 | |
Current plus 1 | 779 | |
Current plus 2 | 819 | |
Current plus 3 | 997 | |
Current plus 4 | 1,079 | |
Current plus 5 | 1,288 | |
Current plus 6 - 10 | $ 8,247 | |
Other Postretirement Benefit Plan | Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocations, minimum (in hundredths) | 70.00% | |
Target asset allocations, maximum (in hundredths) | 100.00% | |
Other Postretirement Benefit Plan | Real Estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocations, minimum (in hundredths) | 0.00% | |
Target asset allocations, maximum (in hundredths) | 15.00% | |
Other Postretirement Benefit Plan | Commodities Investment | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocations, minimum (in hundredths) | 0.00% | |
Target asset allocations, maximum (in hundredths) | 10.00% | |
Other Postretirement Benefit Plan | Fixed Income Funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocations, minimum (in hundredths) | 0.00% | |
Target asset allocations, maximum (in hundredths) | 10.00% | |
Pension and Supplemental Executive Retirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Company Contributions | $ 17,311 | $ 9,504 |
Current plus 1 | 11,350 | |
Current | 40,307 | |
Current plus 1 | 22,992 | |
Current plus 2 | 21,773 | |
Current plus 3 | 23,353 | |
Current plus 4 | 26,065 | |
Current plus 5 | 26,761 | |
Current plus 6 - 10 | $ 140,707 |
Benefit Plans - Narrative (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
mutual_fund
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | |||
Minimum percentages of gain loss consider for amortization (in hundredths) | 10.00% | ||
Minimum value of outstanding noncallable bonds used in hypothetical cash flow bond matching exercise | $ 50,000,000 | ||
Future earnings period used in determining the expected average rate of earnings | 20 years | ||
Discretionary profit sharing contribution as a percentage of participant's eligible compensation (in hundredths) | 5.00% | ||
Minimum percentage return should exceed growth in consumer price index annually (in hundredths) | 5.75% | ||
Maximum investment in international oriented funds (in hundredths) | 30.00% | ||
Number of international mutual funds | mutual_fund | 2 | ||
Percent of international oriented funds equity allocation in emerging markets (in hundredths) | 3.00% | ||
Percent of international oriented funds equity allocation in companies based outside of the United States, primarily Europe and the Pacific Basin (in hundredths) | 21.00% | ||
Matching contribution rate on employees' before-tax contributions, first contribution level (in hundredths) | 80.00% | ||
Employee contributions subject to employer match, first contribution level | $ 1,000 | ||
Matching contribution rate on employees' before-tax contributions, second contribution level (in hundredths) | 40.00% | ||
Employee contributions subject to employer match, second contribution level | $ 2,000 | ||
Matching contribution rate on employees' before-tax contributions, hired after 01/01/2014 (in hundredths) | 100.00% | ||
Employee contributions subject to employer match for employees hired after 01/01/2014 (in hundredths) | 4.00% | ||
Profit sharing and 401(k) savings plan expenses | $ 5,100,000 | $ 5,000,000 | $ 5,300,000 |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Lump sum pension plan benefit payments | $ 22,400,000 | 11,800,000 | |
Total increase in benefit obligation using new mortality tables | 23,200,000 | ||
Percentage of participants electing lump sum payments (in hundredths) | 75.00% | ||
Increase in benefit obligation using new mortality tables and lump sum election assumption | $ 14,600,000 | ||
Pension Plan | Equity Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations, maximum (in hundredths) | 40.00% | ||
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Age of retirees at which retirement benefits under the plan are terminated | 65 years | ||
Health care trend rate used for pre-65 benefits (in hundredths) | 7.00% | ||
Health care trend rate used for pre-65 benefits in 2016 (in hundredths) | 7.00% | ||
Health care trend rate used for pre-65 benefits in 2020 (in hundredths) | 5.00% | ||
Other Postretirement Benefit Plan | Equity Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations, maximum (in hundredths) | 100.00% |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | 24 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2007 |
Dec. 31, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Net deferred tax assets and liabilities [Abstract] | ||||||||||||||||
Total deferred tax assets | $ 791,286 | $ 933,576 | ||||||||||||||
Total deferred tax liabilities | (29,206) | (33,789) | ||||||||||||||
Valuation allowance | 0 | (902,289) | $ (1,004,200) | |||||||||||||
Net deferred tax asset (liability) | 762,080 | |||||||||||||||
Net deferred tax asset (liability) | (2,502) | |||||||||||||||
Components of net deferred tax liability [Abstract] | ||||||||||||||||
Unearned premium reserves | 33,262 | 12,296 | ||||||||||||||
Benefit plans | (14,283) | (13,900) | ||||||||||||||
Federal net operating loss | 680,975 | 845,616 | ||||||||||||||
Loss reserves | 15,536 | 23,069 | ||||||||||||||
Unrealized (appreciation) depreciation in investments | (8,904) | 2,800 | ||||||||||||||
Mortgage investments | 17,386 | 15,346 | ||||||||||||||
Deferred compensation | 12,927 | 11,955 | ||||||||||||||
Premium deficiency reserves | 0 | 8,313 | ||||||||||||||
Other, net | (7,373) | 108 | ||||||||||||||
Net deferred tax asset before valuation allowance | 762,080 | 899,787 | ||||||||||||||
Valuation allowance | 0 | (902,289) | (1,004,200) | |||||||||||||
Net deferred tax asset (liability) | 762,080 | |||||||||||||||
Change in cumulative income position | 687,300 | |||||||||||||||
Net operating loss carryforwards, regular tax basis | 1,946,000 | |||||||||||||||
Operating loss carryforward utilized | $ 471,000 | $ 199,000 | ||||||||||||||
Change in deferred tax valuation allowance, included in other comprehensive income | (54,500) | (13,100) | $ 17,300 | |||||||||||||
Net operating loss carryforwards for computing the alternative minimum tax | 1,051,000 | |||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Provision for (benefit from) income taxes before valuation allowance | 163,497 | 91,607 | (17,239) | |||||||||||||
Change in valuation allowance | (161,158) | (88,833) | 20,935 | |||||||||||||
Reversal of the valuation allowance | (686,652) | 0 | 0 | |||||||||||||
(Benefit from) provision for income taxes | $ 6,584 | $ (695,604) | $ 1,322 | $ 3,385 | $ 681 | $ 249 | $ 1,118 | $ 726 | (684,313) | 2,774 | 3,696 | |||||
Components of provisions for (benefit from) income taxes [Abstract] | ||||||||||||||||
Current Federal | 8,067 | 2,391 | 916 | |||||||||||||
Deferred Federal | (686,652) | 1 | 7 | |||||||||||||
Other | (5,728) | 382 | 2,773 | |||||||||||||
(Benefit from) provision for income taxes | 6,584 | $ (695,604) | $ 1,322 | 3,385 | 681 | $ 249 | $ 1,118 | 726 | (684,313) | 2,774 | 3,696 | |||||
Income taxes paid | $ 5,400 | $ 1,300 | $ 100 | |||||||||||||
Reconciliation of effective income tax rate [Abstract] | ||||||||||||||||
Federal statutory income tax rate (in hundredths) | 35.00% | 35.00% | (35.00%) | |||||||||||||
Valuation allowance (in hundredths) | (173.80%) | (34.90%) | 45.40% | |||||||||||||
Tax exempt municipal bond interest (in hundredths) | (0.80%) | (0.40%) | (3.70%) | |||||||||||||
Other, net (in hundredths) | (0.70%) | 1.40% | 1.30% | |||||||||||||
Effective income tax rate (in hundredths) | (140.30%) | 1.10% | 8.00% | |||||||||||||
Information regarding income tax examinations [Abstract] | ||||||||||||||||
Amount of IRS assessment for unpaid taxes and penalties related to REMIC issue | 197,500 | |||||||||||||||
Estimate of federal interest that may be due | 182,900 | |||||||||||||||
Amount of payment made related to the IRS assessment on the REMIC issue | $ 65,200 | |||||||||||||||
Amount of IRS assessment for unpaid taxes and penalties related to disallowance of carryback of 2009 net operating loss | 261,400 | |||||||||||||||
Estimate of additional state income taxes and interest that may be due | 48,800 | |||||||||||||||
Unrecognized tax benefits | 107,120 | 106,230 | 106,230 | 105,366 | $ 106,230 | $ 105,366 | $ 104,550 | $ 105,366 | 107,120 | 106,230 | 105,366 | |||||
Unrecognized tax benefits [Roll Forward] | ||||||||||||||||
Balance at beginning of year | $ 106,230 | $ 105,366 | 106,230 | 105,366 | 104,550 | 105,366 | ||||||||||
Additions based on tax positions related to the current year | 0 | 0 | 0 | |||||||||||||
Additions for tax positions of prior years | 890 | 864 | 816 | |||||||||||||
Reductions for tax positions of prior years | 0 | 0 | 0 | |||||||||||||
Settlements | 0 | 0 | 0 | |||||||||||||
Balance at end of year | $ 107,120 | $ 106,230 | 107,120 | $ 106,230 | $ 105,366 | 107,120 | ||||||||||
Unrecognized tax benefits [Abstract] | ||||||||||||||||
Total amount of unrecognized tax benefits that would affect effective tax rate | 93,900 | |||||||||||||||
Interest expense recognized during period | $ 900 | |||||||||||||||
Unrecognized tax benefits, accrued interest | 27,800 | $ 26,900 | ||||||||||||||
Significant change in unrecognized tax benefits | 107,100 | |||||||||||||||
Approximate net cash outflows upon resolution of IRS matters | 26,000 | |||||||||||||||
Internal Revenue Service (IRS) | ||||||||||||||||
Components of net deferred tax liability [Abstract] | ||||||||||||||||
Net operating loss carryforwards, regular tax basis | $ 1,900,000 | $ 2,600,000 | ||||||||||||||
Operating loss carryforward utilized | $ 670,000 | |||||||||||||||
Operating loss carryforward, recognition period | 6 years | |||||||||||||||
Deferred Tax Asset, Changes In Current Period | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | $ 154,800 | |||||||||||||||
Deferred Tax Asset, Changes In Current Period | Other Comprehensive Income (Loss) | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | (6,300) | |||||||||||||||
Deferred Tax Asset, Changes In Current Period | Income Tax Expense (Benefit) | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | 161,100 | |||||||||||||||
Deferred Tax Asset, Changes In Future Periods | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | 747,500 | |||||||||||||||
Deferred Tax Asset, Changes In Future Periods | Other Comprehensive Income (Loss) | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | 60,800 | |||||||||||||||
Deferred Tax Asset, Changes In Future Periods | Income Tax Expense (Benefit) | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | $ 686,700 |
Income Taxes - Summary of Changes In Tax Provisions (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Movement In Deferred Tax Asset [Roll Forward] | |||
Balance at December 31, 2014 | $ 902,289 | $ 1,004,200 | |
Change in valuation allowance | 161,158 | 88,833 | $ (20,935) |
Balance at December 31, 2015 | 0 | $ 902,289 | $ 1,004,200 |
Deferred Tax Asset, Changes In Current Period | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Change in valuation allowance | (154,800) | ||
Deferred Tax Asset, Changes In Current Period | Other Comprehensive Income (Loss) | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Change in valuation allowance | 6,300 | ||
Deferred Tax Asset, Changes In Current Period | Income Tax Expense (Benefit) | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Change in valuation allowance | (161,100) | ||
Deferred Tax Asset, Changes In Future Periods | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Change in valuation allowance | (747,500) | ||
Deferred Tax Asset, Changes In Future Periods | Other Comprehensive Income (Loss) | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Change in valuation allowance | (60,800) | ||
Deferred Tax Asset, Changes In Future Periods | Income Tax Expense (Benefit) | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Change in valuation allowance | $ (686,700) |
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2013 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Jun. 30, 2013 |
|
Stockholders' Equity Note [Abstract] | |||||
Shareholder rights accompanying each outstanding share of the company's common stock (in number of Rights) | 1 | ||||
Common stock, beneficial ownership threshold to be considered an Acquiring Person (in hundredths) | 5.00% | ||||
Purchase price (in dollars per share) | $ 45 | ||||
Purchase price (in dollars per one-tenth share) | $ 4.50 | ||||
Common shares purchasable per right (in shares) | 0.1 | ||||
Redemption price (in dollars per Right) | $ 0.001 | ||||
Sale of common stock (in shares) | 135,000,000 | ||||
Sale of common stock, price per share (in dollars per share) | $ 5.15 | ||||
Sale of common stock, net proceeds | $ 663,300 | $ 0 | $ 0 | $ 663,335 | |
Debt Instrument [Line Items] | |||||
Stated interest rate (in hundredths) | 2.00% | ||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 680,000,000 | ||
Shares reserved for conversion under convertible debt (in shares) | 96,700,000 | ||||
Convertible Senior Notes - due April 2020 | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal amount | $ 500,000 | ||||
Stated interest rate (in hundredths) | 2.00% | 2.00% | |||
Convertible Junior Subordinated Debentures Due 2063 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate (in hundredths) | 9.00% | 9.00% | |||
Shares reserved for conversion under convertible debt (in shares) | 28,900,000 | ||||
Convertible Senior Notes Due 2017 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate (in hundredths) | 5.00% | 5.00% | |||
Rights | |||||
Debt Instrument [Line Items] | |||||
Period after person becomes acquiring person | 10 days |
Dividend Restrictions (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
year
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Dividends Payable [Line Items] | |||
Dividend restrictions | The maximum amount of dividends that the insurance subsidiaries may pay in any twelve-month period without regulatory approval by the OCI is the lesser of adjusted statutory net income or 10% of statutory policyholders' surplus as of the preceding calendar year end. | ||
Percentage of statutory policyholders' surplus used to determine maximum allowable dividends (in hundredths) | 10.00% | ||
Number of calendar years preceding the date of the dividend | 3 | ||
Number of calendar years subtracted from the calculation | 2 | ||
Other Insurance Subsidiaries | |||
Dividends Payable [Line Items] | |||
Dividends paid to the parent company | $ | $ 38,500 | $ 0 | $ 0 |
Capital Requirements (Details) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015
USD ($)
jurisdiction
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
Sep. 30, 2012 |
||||
Statutory Capital [Abstract] | |||||||
Percentage of surplus as regards policyholders (in hundredths) | 15.00% | 10.00% | |||||
Statutory deferred tax assets admitted | $ 205,000 | $ 138,000 | $ 138,000 | ||||
Percentage of premiums earned required to be maintained as contingency loss reserves (in hundredths) | 50.00% | ||||||
Period that contingency loss reserves must be held (in years) | 10 years | ||||||
Percentage of net premiums earned that incurred losses must exceed to enable early withdrawals from contingency loss reserves (in hundredths) | 35.00% | ||||||
Net (loss) income | $ (72,767) | [1] | 13,203 | (8,046) | |||
Surplus | 1,608,214 | [1] | 1,585,164 | 1,584,121 | |||
Contingency Reserve | $ 826,706 | 318,247 | 18,558 | ||||
Statutory capital requirements [Abstract] | |||||||
Number of jurisdictions with risk-to-capital requirements | jurisdiction | 16 | ||||||
Maximum permitted risk-to-capital ratio commonly applied | 25 to 1 | ||||||
Risk-to-capital ratio on a combined basis at end of period | 13.6 to 1 | ||||||
Risk-to-capital ratio on combined insurance operations | 13.6 | ||||||
Maximum | |||||||
Statutory capital requirements [Abstract] | |||||||
Risk to capital ratio | 25 | ||||||
Mortgage Guaranty Insurance Corporation | |||||||
Related Party Transaction [Line Items] | |||||||
Loss ratio | 37.00% | ||||||
Surplus contributions made to subsidiary by the parent company | $ 0 | 0 | 800,000 | ||||
Dividends paid to the parent company | $ 0 | 0 | 0 | ||||
Statutory capital requirements [Abstract] | |||||||
Risk to capital ratio | 12.1 | ||||||
Risk to capital ratio at end of period | 12.1 to 1 | ||||||
Amount of policyholders position above or below required MPP | $ 1,200,000 | ||||||
Amount of required MPP | 1,100,000 | ||||||
Other Insurance Subsidiaries | |||||||
Related Party Transaction [Line Items] | |||||||
Surplus contributions made to subsidiary by the parent company | 0 | 0 | 0 | ||||
Dividends paid to the parent company | $ 38,500 | $ 0 | $ 0 | ||||
|
Share-based Compensation Plans (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2011 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost | $ 11.9 | $ 9.2 | $ 6.6 | |
Income tax benefit from compensation cost | $ 4.2 | $ 3.2 | $ 2.3 | |
Summary of option activity [Abstract] | ||||
Options exercisable (in shares) | 529,800 | |||
Options exercisable, weighted average exercise price (in dollars per share) | $ 68.20 | |||
Shares [Roll Forward] | ||||
Restricted stock outstanding at end of period (in shares) | 3,300,000 | |||
Additional disclosures [Abstract] | ||||
Options granted in period, net of forfeitures (in shares) | 0 | 0 | 0 | |
Options exercised during period (in shares) | 0 | 0 | 0 | |
Restricted Stock/Restricted Stock Units | ||||
Weighted average grant date fair market value [Abstract] | ||||
Restricted stock outstanding at end of period (in dollars per share) | $ 6.33 | |||
Granted (in dollars per share) | 9.03 | $ 8.43 | $ 2.75 | |
Vested (in dollars per share) | 5.92 | |||
Forfeited (in dollars per share) | 4.39 | |||
Restricted stock outstanding at end of period (in dollars per share) | $ 7.97 | $ 6.33 | ||
Shares [Roll Forward] | ||||
Restricted stock outstanding at beginning of period (in shares) | 3,852,391 | |||
Granted (in shares) | 1,554,100 | |||
Vested (in shares) | (1,893,116) | |||
Forfeited (in shares) | (193,908) | |||
Restricted stock outstanding at end of period (in shares) | 3,319,467 | 3,852,391 | ||
Additional disclosures [Abstract] | ||||
Restricted stock, performance shares (in shares) | 2,400,000 | |||
Restricted stock, time vested shares (in shares) | 900,000 | |||
Total fair value of restricted stock vested | $ 17.2 | $ 12.1 | $ 4.3 | |
Unrecognized compensation cost | 14.2 | |||
Unrecognized compensation cost, performance shares | 10.6 | |||
Unrecognized compensation cost, time vested shares | $ 3.6 | |||
Weighted-average period for recognition of compensation cost | 1 year 7 months 6 days | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 1 year | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
2002 Plan | Restricted Stock Units (RSUs) | Cash Settled Award | ||||
Shares [Roll Forward] | ||||
Granted (in shares) | 449,350 | |||
Additional disclosures [Abstract] | ||||
Cash payments for vested shares | $ 1.2 | |||
2015 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of shares can be awarded under the plan (in shares) | 10,000,000 | |||
Additional disclosures [Abstract] | ||||
Shares available for future grants (in shares) | 9,970,000 |
Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Leases [Abstract] | |||
Remaining term of operating leases (in years) | 6 years | ||
Total rental expense under operating leases | $ 2,200 | $ 2,800 | $ 4,600 |
Minimum future operating lease payments [Abstract] | |||
2016 | 742 | ||
2017 | 636 | ||
2018 | 486 | ||
2019 | 498 | ||
2020 and thereafter | 512 | ||
Total | $ 2,874 |
Litigation and Contingencies (Details) $ in Thousands |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2009 |
Dec. 31, 2015
USD ($)
lawsuit
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Curtailments [Abstract] | ||||
Average paid claim reduction due to curtailments (in hundredths) | 6.70% | 6.70% | ||
Number of days after claim paid within which objection must be received for review | 90 days | |||
Claims resolved by rescissions [Abstract] | ||||
Percentage of claims received in a quarter resolved by rescission, lower range limit (in hundredths) | 5.00% | |||
Percentage of claims received in a quarter resolved by rescission, upper range limit (in hundredths) | 28.00% | |||
Statute of limitations to bring legal proceedings disputing right to rescind coverage | 3 years | |||
Statute of limitations to bring legal proceedings after notice of rescission | 2 years | |||
Maximum exposure to loss | $ 317,000 | |||
Period of existing captive reinsurance agreement | 10 years | 10 years | 10 years | |
Civil penalty | $ 2,650 | |||
Underwriting remedy expense | $ 1,000 | $ 4,000 | $ 5,000 | |
Class Action Complaint Under RESPA | Pending Litigation | ||||
Claims resolved by rescissions [Abstract] | ||||
Number of lawsuits | lawsuit | 12 |
Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||
Net premiums earned | $ 226,192 | $ 239,234 | $ 213,508 | $ 217,288 | $ 213,589 | $ 209,035 | $ 207,486 | $ 214,261 | $ 896,222 | $ 844,371 | $ 943,051 | ||||||||||||||
Investment income, net of expenses | 27,926 | 25,939 | 25,756 | 24,120 | 23,956 | 22,355 | 21,180 | 20,156 | 103,741 | 87,647 | 80,739 | ||||||||||||||
Realized (losses) gains | 1,228 | 640 | 166 | 26,327 | 434 | 632 | 522 | (231) | 28,361 | 1,357 | 5,731 | ||||||||||||||
Other revenue | 2,580 | 3,698 | 3,699 | 2,480 | 2,385 | 3,093 | 2,048 | 896 | 12,457 | 8,422 | 9,914 | ||||||||||||||
Loss incurred, net | 95,066 | 76,458 | 90,238 | 81,785 | 117,074 | 115,254 | 141,141 | 122,608 | 343,547 | 496,077 | 838,726 | ||||||||||||||
Underwriting and other expenses, net | 53,858 | 65,805 | 37,915 | 51,969 | 48,181 | 47,595 | 43,455 | 51,766 | 209,547 | 190,997 | |||||||||||||||
Provision (benefit) for income tax | 6,584 | (695,604) | 1,322 | 3,385 | 681 | 249 | 1,118 | 726 | (684,313) | 2,774 | 3,696 | ||||||||||||||
Net income (loss) | $ 102,418 | $ 822,852 | $ 113,654 | $ 133,076 | $ 74,428 | $ 72,017 | $ 45,522 | $ 59,982 | $ 1,172,000 | $ 251,949 | $ (49,848) | ||||||||||||||
Earnings per Share [Abstract] | |||||||||||||||||||||||||
Basic (in dollars per share) | $ 0.30 | [1],[2] | $ 2.42 | [1],[2] | $ 0.33 | [1],[2] | $ 0.39 | [1],[2] | $ 0.22 | [1] | $ 0.21 | [1] | $ 0.13 | [1] | $ 0.18 | [1] | $ 3.45 | [1],[2] | $ 0.74 | [1] | $ (0.16) | ||||
Diluted (in dollars per share) | $ 0.24 | [1],[2] | $ 1.78 | [1],[2] | $ 0.28 | [1],[2] | $ 0.32 | [1],[2] | $ 0.19 | [1] | $ 0.18 | [1] | $ 0.12 | [1] | $ 0.15 | [1] | $ 2.60 | [1],[2] | $ 0.64 | [1] | $ (0.16) | ||||
|
SCHEDULE I-SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | $ 4,689,773 |
Fair Value | 4,663,206 |
Amount at which shown in the balance sheet | 4,663,206 |
Fixed Maturities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 4,684,148 |
Fair Value | 4,657,561 |
Amount at which shown in the balance sheet | 4,657,561 |
Fixed Maturities | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 160,393 |
Fair Value | 160,584 |
Amount at which shown in the balance sheet | 160,584 |
Fixed Maturities | Obligations of U.S. States and Political Subdivisions | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 1,766,407 |
Fair Value | 1,792,527 |
Amount at which shown in the balance sheet | 1,792,527 |
Fixed Maturities | Foreign Governments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 29,359 |
Fair Value | 31,731 |
Amount at which shown in the balance sheet | 31,731 |
Fixed Maturities | Public Utilities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 182,945 |
Fair Value | 179,209 |
Amount at which shown in the balance sheet | 179,209 |
Fixed Maturities | Asset-Backed Securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 116,764 |
Fair Value | 116,617 |
Amount at which shown in the balance sheet | 116,617 |
Fixed Maturities | Collateralized Loan Obligations | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 61,345 |
Fair Value | 60,200 |
Amount at which shown in the balance sheet | 60,200 |
Fixed Maturities | Mortgage Backed Securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 503,183 |
Fair Value | 491,139 |
Amount at which shown in the balance sheet | 491,139 |
Fixed Maturities | All Other Corporate Bonds | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 1,863,752 |
Fair Value | 1,825,554 |
Amount at which shown in the balance sheet | 1,825,554 |
Equity Securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 5,625 |
Fair Value | 5,645 |
Amount at which shown in the balance sheet | 5,645 |
Equity Securities | Industrial, Miscellaneous, and All Others | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 5,625 |
Fair Value | 5,645 |
Amount at which shown in the balance sheet | $ 5,645 |
SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Jun. 30, 2013 |
|
ASSETS | ||||||||||||||||
Fixed maturities (amortized cost, 2015 – $385,281; 2014 – $482,629) | $ 4,657,561 | $ 4,609,614 | ||||||||||||||
Cash and cash equivalents | $ 181,120 | $ 197,882 | $ 197,882 | $ 332,692 | $ 197,882 | $ 332,692 | $ 1,027,625 | 181,120 | 197,882 | $ 332,692 | ||||||
Accrued investment income | 40,224 | 30,518 | ||||||||||||||
Other assets | 91,138 | 106,390 | ||||||||||||||
Total assets | 5,879,545 | 5,266,434 | ||||||||||||||
Liabilities: | ||||||||||||||||
Senior notes | 0 | 61,918 | ||||||||||||||
Convertible senior notes | 833,503 | 845,000 | ||||||||||||||
Convertible junior debentures | 389,522 | 389,522 | ||||||||||||||
Total liabilities | 3,643,405 | 4,229,531 | ||||||||||||||
Shareholders’ equity: | ||||||||||||||||
Common stock (one dollar par value, shares authorized 1,000,000; shares issued 2015 - 340,097; 2014 - 340,047; outstanding 2015 - 339,657; 2014 - 338,560) | 340,097 | 340,047 | ||||||||||||||
Paid-in capital | 1,670,238 | 1,663,592 | ||||||||||||||
Treasury stock (shares at cost, 2015 – 440; 2014 – 1,487) | (3,362) | (32,937) | ||||||||||||||
Accumulated other comprehensive loss, net of tax | (60,880) | (81,341) | ||||||||||||||
Retained earnings (deficit) | 290,047 | (852,458) | ||||||||||||||
Total shareholders' equity | 2,236,140 | 1,036,903 | 744,538 | |||||||||||||
Total liabilities and shareholders' equity | 5,879,545 | 5,266,434 | ||||||||||||||
Parenthetical information [Abstract] | ||||||||||||||||
Fixed maturities, amortized cost | $ 4,684,148 | $ 4,602,514 | ||||||||||||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||||||||||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 680,000,000 | |||||||||||||
Common stock, shares issued (in shares) | 340,097,000 | 340,047,000 | ||||||||||||||
Common stock, shares outstanding (in shares) | 339,657,000 | 338,560,000 | ||||||||||||||
Treasury stock, shares at cost (in shares) | 440,000 | 1,487,000 | ||||||||||||||
Revenues: | ||||||||||||||||
Investment income, net of expenses | 27,926 | $ 25,939 | $ 25,756 | 24,120 | 23,956 | $ 22,355 | $ 21,180 | 20,156 | 103,741 | 87,647 | 80,739 | |||||
Realized (losses) gains | 1,228 | 640 | 166 | 26,327 | 434 | 632 | 522 | (231) | 28,361 | 1,357 | 5,731 | |||||
Total revenues | 1,040,781 | 941,797 | 1,039,435 | |||||||||||||
Expenses: | ||||||||||||||||
Interest expense | 68,932 | 69,648 | 79,663 | |||||||||||||
Total losses and expenses | 553,094 | 687,074 | 1,085,587 | |||||||||||||
Income (loss) before tax | 487,687 | 254,723 | (46,152) | |||||||||||||
(Benefit from) provision for income tax | 6,584 | (695,604) | 1,322 | 3,385 | 681 | 249 | 1,118 | 726 | (684,313) | 2,774 | 3,696 | |||||
Net income (loss) | 102,418 | 822,852 | 113,654 | 133,076 | 74,428 | 72,017 | 45,522 | 59,982 | 1,172,000 | 251,949 | (49,848) | |||||
Other comprehensive income (loss), net of tax | 20,461 | 36,385 | (69,563) | |||||||||||||
Comprehensive income (loss) | 1,192,461 | 288,334 | (119,411) | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | 102,418 | $ 822,852 | $ 113,654 | 133,076 | 74,428 | $ 72,017 | $ 45,522 | 59,982 | 1,172,000 | 251,949 | (49,848) | |||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||
Deferred Federal | (686,652) | 1 | 7 | |||||||||||||
Change in certain assets and liabilities: | ||||||||||||||||
Accrued investment income | (9,706) | 1,142 | (4,417) | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of fixed maturities | (2,462,844) | (1,979,917) | (3,248,602) | |||||||||||||
Sale of fixed maturities | 1,796,153 | 1,147,624 | 1,054,985 | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net proceeds from convertible senior notes | 0 | 0 | 484,625 | |||||||||||||
Common stock shares issued | $ 663,300 | 0 | 0 | 663,335 | ||||||||||||
Excess tax benefits related to share-based compensation | 2,117 | 0 | 0 | |||||||||||||
Net decrease in cash and cash equivalents | (16,762) | (134,810) | (694,933) | |||||||||||||
Cash and cash equivalents at beginning of year | 197,882 | 332,692 | 197,882 | 332,692 | 1,027,625 | |||||||||||
Cash and cash equivalents at end of year | 181,120 | 197,882 | 181,120 | 197,882 | 332,692 | |||||||||||
Parent Company | ||||||||||||||||
ASSETS | ||||||||||||||||
Fixed maturities (amortized cost, 2015 – $385,281; 2014 – $482,629) | $ 382,565 | $ 480,125 | ||||||||||||||
Cash and cash equivalents | 19,417 | 10,507 | 10,507 | 20,725 | 10,507 | 20,725 | 175,880 | 19,417 | 10,507 | $ 20,725 | ||||||
Investment in subsidiaries, at equity in net assets | 2,903,944 | 1,821,024 | ||||||||||||||
Accounts receivable - affiliates | 938 | 312 | ||||||||||||||
Income taxes - current and deferred | 151,318 | 17,478 | ||||||||||||||
Accrued investment income | 3,700 | 3,435 | ||||||||||||||
Other assets | 11,325 | 15,156 | ||||||||||||||
Total assets | 3,473,207 | 2,348,037 | ||||||||||||||
Liabilities: | ||||||||||||||||
Senior notes | 0 | 61,918 | ||||||||||||||
Convertible senior notes | 833,503 | 845,000 | ||||||||||||||
Convertible junior debentures | 389,522 | 389,522 | ||||||||||||||
Accrued interest | 14,042 | 14,694 | ||||||||||||||
Total liabilities | 1,237,067 | 1,311,134 | ||||||||||||||
Shareholders’ equity: | ||||||||||||||||
Common stock (one dollar par value, shares authorized 1,000,000; shares issued 2015 - 340,097; 2014 - 340,047; outstanding 2015 - 339,657; 2014 - 338,560) | 340,097 | 340,047 | ||||||||||||||
Paid-in capital | 1,670,238 | 1,663,592 | ||||||||||||||
Treasury stock (shares at cost, 2015 – 440; 2014 – 1,487) | (3,362) | (32,937) | ||||||||||||||
Accumulated other comprehensive loss, net of tax | (60,880) | (81,341) | ||||||||||||||
Retained earnings (deficit) | 290,047 | (852,458) | ||||||||||||||
Total shareholders' equity | 2,236,140 | 1,036,903 | ||||||||||||||
Total liabilities and shareholders' equity | 3,473,207 | 2,348,037 | ||||||||||||||
Parenthetical information [Abstract] | ||||||||||||||||
Fixed maturities, amortized cost | $ 385,281 | $ 482,629 | ||||||||||||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||||||||||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||||||||||||||
Common stock, shares issued (in shares) | 340,097,000 | 340,047,000 | ||||||||||||||
Common stock, shares outstanding (in shares) | 339,657,000 | 338,560,000 | ||||||||||||||
Treasury stock, shares at cost (in shares) | 440,000 | 1,487,000 | ||||||||||||||
Revenues: | ||||||||||||||||
Investment income, net of expenses | 7,586 | 6,985 | 5,033 | |||||||||||||
Realized (losses) gains | 357 | 395 | 830 | |||||||||||||
Total revenues | 7,943 | 7,380 | 5,863 | |||||||||||||
Expenses: | ||||||||||||||||
Operating expenses and other | 1,089 | 1,383 | 511 | |||||||||||||
Interest expense | 68,932 | 69,648 | 79,663 | |||||||||||||
Total losses and expenses | 70,021 | 71,031 | 80,174 | |||||||||||||
Income (loss) before tax | (62,078) | (63,651) | (74,311) | |||||||||||||
(Benefit from) provision for income tax | (125,487) | 0 | 0 | |||||||||||||
Equity in net income of subsidiaries | 1,108,591 | 315,600 | 24,463 | |||||||||||||
Net income (loss) | 1,172,000 | 251,949 | (49,848) | |||||||||||||
Other comprehensive income (loss), net of tax | 20,461 | 36,385 | (69,563) | |||||||||||||
Comprehensive income (loss) | 1,192,461 | 288,334 | (119,411) | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | 1,172,000 | 251,949 | (49,848) | |||||||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||
Equity in net income of subsidiaries | (1,108,591) | (315,600) | (24,463) | |||||||||||||
Dividends received from subsidiaries | 6,500 | 0 | 0 | |||||||||||||
Deferred Federal | (125,532) | 0 | 0 | |||||||||||||
Other | 22,849 | 14,862 | 21,693 | |||||||||||||
Change in certain assets and liabilities: | ||||||||||||||||
Accounts receivable - affiliates | (626) | 68 | 289 | |||||||||||||
Income taxes receivable | (8,308) | 480 | (3) | |||||||||||||
Accrued investment income | (265) | 194 | (2,611) | |||||||||||||
Accrued interest | (652) | (188) | (15,577) | |||||||||||||
Net cash used in operating activities | (42,625) | (48,235) | (70,520) | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital distributions from (contributions to) subsidiaries | 32,000 | 0 | (800,000) | |||||||||||||
Purchase of fixed maturities | (295,010) | (553,538) | (563,968) | |||||||||||||
Sale of fixed maturities | 386,385 | 613,322 | 148,608 | |||||||||||||
Net cash provided by (used in) investing activities | 123,375 | 59,784 | (1,215,360) | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net proceeds from convertible senior notes | 0 | 0 | 484,625 | |||||||||||||
Common stock shares issued | 0 | 0 | 663,335 | |||||||||||||
Repayment of long-term debt | (73,957) | (21,767) | (17,235) | |||||||||||||
Excess tax benefits related to share-based compensation | 2,117 | 0 | 0 | |||||||||||||
Net cash (used in) provided by financing activities | (71,840) | (21,767) | 1,130,725 | |||||||||||||
Net decrease in cash and cash equivalents | 8,910 | (10,218) | (155,155) | |||||||||||||
Cash and cash equivalents at beginning of year | $ 10,507 | $ 20,725 | 10,507 | 20,725 | 175,880 | |||||||||||
Cash and cash equivalents at end of year | $ 19,417 | $ 10,507 | $ 19,417 | $ 10,507 | $ 20,725 |
SCHEDULE IV-REINSURANCE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |||
Gross Amount | $ 997,892 | $ 950,973 | $ 979,078 |
Ceded to Other Companies | 102,848 | 108,255 | 38,101 |
Assumed From Other Companies | 1,178 | 1,653 | 2,074 |
Net Amount | $ 896,222 | $ 844,371 | $ 943,051 |
Percentage of Amount Assumed to Net | 0.10% | 0.20% | 0.20% |
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