8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 5, 2007

Radian Group Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-11356	23-2691170
(Commission File Number)	(IRS Employer Identification No.)

1601 Market Street, Philadelphia, Pennsylvania	19103
(Address of principal executive offices)	(Zip Code)

(215) 231-1000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 9, 2007, we posted to our website a quarterly operating supplement for the fourth quarter of 2006, providing financial and other statistical information for our financial guaranty business. The quarterly operating supplement is furnished as Exhibit 99.1 to this report.

The information included in, or furnished with, this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As previously disclosed, Radian’s board of directors approved a “freeze,” effective December 31, 2006, of the Radian Group Inc. Pension Plan (the “Pension Plan”) aimed at preparing for the future termination of the Pension Plan. On February 5, 2007, upon the recommendation of the Compensation and Human Resources Committee of Radian’s board of directors, Radian’s board approved the termination of the Pension Plan, effective June 1, 2007, and also approved the following additional amendments to the Pension Plan:

• Acceleration of vesting in accrued benefits under the Pension Plan for all participants in the plan who are employees of Radian or its affiliates at any time between December 31, 2006 and the date of termination of the plan; and

• Enhancement of the distribution options under the Pension Plan to offer an immediate annuity option and an immediate lump sum option in connection with the termination of the plan.

We expect to record an insignificant settlement loss upon termination of the Pension Plan, which remains subject to regulatory approval. A copy of the Pension Plan amendment is filed as Exhibit 10.1 to this report and is incorporated into this Item 5.02 as if fully set forth herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

+*10.1	Amendment No. 5 to Radian Group Inc. Pension Plan (Amended and Restated January 1, 1997), dated February 5, 2007.
†99.1	Radian Asset Assurance Inc. – Quarterly Operating Supplement, Fourth Quarter 2006.

+ Management contract.

* Filed herewith.

† Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RADIAN GROUP INC.
Date: February 9, 2007	By:	/s/ Edward J. Hoffman
		Edward J. Hoffman
		Vice President, Securities Counsel

EXHIBIT INDEX

Exhibit No.	Description
+*10.1	Amendment No. 5 to Radian Group Inc. Pension Plan (Amended and Restated January 1, 1997), dated February 5, 2007.
†99.1	Radian Asset Assurance Inc. – Quarterly Operating Supplement, Fourth Quarter 2006.

+ Management contract.

* Filed herewith.

† Furnished herewith.

EX-10.1

Exhibit 10.1

Radian Group Inc. Pension Plan

Amended and Restated Effective January 1, 1997

Amendment No. 5

WHEREAS, Radian Group Inc. (the “Company”) maintains the Radian Group Inc. Pension Plan (the “Plan”) amended and restated in its entirety effective January 1, 1997 for the benefit of its eligible employees and the eligible employees of the Participating Employers; and

WHEREAS, the Company, pursuant to the provisions of Sections 15.1 and 15.2 of the Plan, has the ability to amend and terminate the Plan by action of its Board of Directors; and

WHEREAS, the Company desires to terminate the Plan effective June 1, 2007 and to make certain amendments in connection with this termination.

NOW, THEREFORE, the Plan is hereby amended, effective June 1, 2007, except as otherwise specified below, in the following respects:

1. Article XV shall be amended by adding a new Section 15.6 entitled “Plan Termination” at the end thereof to read as follows:

“15.6 Plan Termination. The Plan is terminated effective June 1, 2007.”

2. Article VI shall be amended by adding a new Section 6.8 entitled “Special Distribution Options” at the end thereof to read as follows:

“6.8 Special Distribution Options.

(a) Immediate Lump Sum - Notwithstanding any provision in the Plan to the contrary, Participants who are Employees of the Company, a Participating Employer or any Affiliate at any time between December 31, 2006 and June 1, 2007 shall be eligible to elect, in lieu of any other available form of benefit and only in connection with the Plan termination, to receive an immediate single lump sum payment. Such election shall be made at the time and in the manner prescribed by the Plan Administrator. Additionally, such election shall be made in accordance with the requirements of this Article VI and any additional procedures established by the Plan Administrator in connection with the termination of the Plan. In the absence of an election within the applicable election period, the Participant shall be deemed to have elected to defer payment commencement until a later date (if allowed). The single lump sum payment option described in this paragraph must be elected when initially offered. This option will not be available after annuity contracts are purchased in connection with the termination of the Plan.

The lump sum payment under this Section shall be equal to the present value of the benefit, using the Actuarial Equivalent

assumptions applicable for lump sum payments, that the Participant could have received under Section 5.2; provided, however, the actuarial reduction factors for early payment under Section 5.2 shall be applicable after the Participant’s Early Retirement Date which shall be determined as if the Participant continued employment until reaching his Early Retirement Date.

(b) Immediate Annuity – Notwithstanding any provision in the Plan to the contrary, Participants who are Employees of the Company, a Participating Employer or any Affiliate at any time between December 31, 2006 and June 1, 2007 shall be eligible to elect, in lieu of any other available form of benefit and only in connection with the Plan termination, to receive an immediate annuity payment (in any of the available forms under Sections 6.3 and 6.4). Such election shall be made at the time and in the manner prescribed by the Plan Administrator. Additionally, such election shall be made in accordance with the requirements of this Article VI and any additional procedures established by the Plan Administrator in connection with the termination of the Plan. In the absence of an election within the applicable election period, the Participant shall be deemed to have elected to defer payment commencement until a later date (if allowed). The immediate annuity payment option described in this paragraph must be elected when initially offered. This option will not be available after annuity contracts are purchased in connection with the termination of the Plan.

The immediate annuity payable under this Section shall be the Actuarial Equivalent of the lump sum payment described above in Section 6.8(a).

Any election under this Section 6.8 shall remain subject to any notice and consent requirements in accordance with applicable law and the Plan document.”

3. Effective as of the date of adoption of this Amendment No. 5, the fifth paragraph of Section 15.1 shall be amended to read as follows:

“Notwithstanding the foregoing, the Executive Vice President – Human Resources, any other executive officer of the Company or a committee delegated by the Plan Administrator (by a majority of its members), may adopt any Plan amendments that (a) are designed to implement contractual commitments by the Company, (b) reflect changes approved in substance by the Board, or (c) make changes not involving material cost increases for purposes of legal compliance, clarity, administrative convenience or otherwise. No further administrative action shall be required for such amendment to be effective (except to the extent otherwise required by resolution of the Board).”

4. Section 15.2 shall be amended by adding a new paragraph after the existing third paragraph to read as follows:

“Notwithstanding any provision in the Plan to the contrary, Participants who are Employees of the Company, a Participating Employer or any Affiliate at any time between December 31, 2006 and June 1, 2007 shall be fully vested in their Accrued Benefit.”

WITNESS WHEREOF, Radian Group Inc. has caused this Amendment No. 5 to be executed by its duly authorized party this 5th day of February, 2007.

Radian Group Inc.
By:	/s/ Robert E. Croner
Title:	Executive Vice President, Human Resources

EX-99.1

Exhibit 99.1

Quarterly

Operating Supplement

Fourth Quarter 2006

Table of Contents

	Page
Introductory Note	2
Company Profile	2
Company Information	2
Consolidated GAAP Income Statements	3
Consolidated GAAP Balance Sheets	4
Consolidated Gross Premiums Written by Product	5
Consolidated Net Premiums Earned by Product	5
Consolidated Net Unearned Premium Amortization and Estimated Future Installment Premiums	5
Consolidated Selected Loss Information	6
Consolidated Selected Derivative Information	7
Consolidated Investment Portfolio Highlights	8
Consolidated Insured Portfolio Highlights	9
Consolidated CDO Exposure	15
Consolidated Explanatory Notes	16
Safe Harbor Statement	17

1 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Table of Contents

Radian Asset Assurance Inc.

Quarterly Operating Supplement

December 31, 2006

Introductory Note

This operating supplement presents financial information for Radian Asset Assurance Inc. (Radian) and its consolidated subsidiaries on a GAAP basis. Please visit our website at www.radian.biz on or about March 12, 2007 for selected statutory information.

Company Profile

Radian, founded in 1985 and rated AA by Standard & Poor’s, a division of The McGraw-Hill Companies (S&P), and Fitch Ratings and Aa3 by Moody’s Investor Service (Moody’s), is a leading financial guarantor of structured finance and public finance transactions. As a direct writer of financial guaranty insurance for municipal bonds, asset-backed securities and structured transactions, Radian plays an important role in extending the benefits of insurance to a broad range of institutions and securities issuers. Radian is also a leading provider of reinsurance to the major monoline financial guarantors. In addition, Radian provides Trade Credit reinsurance, which was placed in runoff in 2005.

Radian is a subsidiary of Radian Group Inc. (NYSE: RDN), a global credit risk management company headquartered in Philadelphia with significant operations in both New York and London.

Company Information

Radian Asset Assurance Inc.	Contact:
335 Madison Avenue	John C. DeLuca
New York, New York 10017	Senior Vice President
1 877 337.4925 (within the U.S.)	Director of Marketing, Public Finance
1 212 983.3100	1 212 984.9222
www.radian.biz	john.deluca@radian.biz

2 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Introductory Note / Company Profile / Company Information

Radian Asset Assurance Inc.

Consolidated GAAP Income Statements* ($ Thousands)

(Unaudited)

	Quarter ended						Twelve months ended
	December 31 2006			December 31 2005			December 31 2006			December 31 2005
Revenues
Gross premiums written	$	76,395		$	67,703		$	262,448		$	222,944
Ceded premiums written		(158	)		(306	)		(2,595	)		(3,363	)
Net premiums written		76,237			67,397			259,853			219,581
Increase in deferred premium revenue		(27,490	)		(16,198	)		(60,280	)		(13,458	)
Premiums earned		48,747			51,199			199,573			206,123
Net investment income		24,526			22,303			92,656			87,497
(Loss) gain on sale of investments		(43	)		4,198			1,505			12,350
Change in fair value of derivative instruments		21,245			(33,323	)		12,384			6,053
Total revenues		94,475			44,377			306,118			312,023
Expenses
Losses and loss adjustment expenses		4,179			6,075			21,849			31,445
Policy acquisition costs		10,320			13,167			46,263			52,354
Other operating expenses		13,600			18,928			59,543			65,919
Other expense		4,137			4,031			15,059			14,035
Total expenses		32,236			42,201			142,714			163,753
Income before income taxes		62,239			2,176			163,404			148,270
Income tax expense (benefit)		16,671			(3,463	)		36,116			32,556
Net income	$	45,568		$	5,639		$	127,288		$	115,714
Financial Ratios
Loss and LAE Ratio		8.6	%		11.9	%		10.9	%		15.3	%
Underwriting Expense Ratio		49.1	%		62.7	%		53.0	%		57.4	%
Combined Ratio		57.7	%		74.6	%		63.9	%		72.7	%

* See Consolidated Explanatory Notes on page 16.

3 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated GAAP Income Statements

Radian Asset Assurance Inc.

Consolidated GAAP Balance Sheets* ($ Thousands)**

(Unaudited)

	December 31 2006		December 31 2005
Assets
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $2,111,479 and $1,934,133)	$	2,171,578	$	1,987,565
Trading securities, at fair value (cost $17,459 and $17,318)		28,340		23,264
Common stock, at fair value (cost $931 and $931)		1,152		1,164
Short-term investments		93,042		101,691
Total Investments		2,294,112		2,113,684
Cash and cash equivalents		2,371		5,925
Accrued interest and dividends receivable		27,860		26,372
Premiums and other receivables		25,760		39,824
Deferred policy acquisition costs		153,094		140,658
Prepaid reinsurance premiums		1,184		1,546
Reinsurance recoverable on unpaid losses		2,259		2,699
Prepaid federal income taxes		14,995		14,995
Federal income tax recoverable		409		3,163
Credit derivatives		94,381		23,385
Other assets		7,752		10,954
Total Assets	$	2,624,177	$	2,383,205
Liabilities and Shareholder’s Equity
Liabilities
Losses and loss adjustment expenses	$	173,990	$	186,425
Reinsurance payable on paid losses and loss adjustment expenses		1,853		6,142
Deferred premium revenue		694,680		634,424
Deferred federal income taxes		109,849		66,231
Payable to affiliates		5,141		8,065
Accrued expenses and other liabilities		32,388		21,439
Total Liabilities		1,017,901		922,726
Shareholder’s Equity
Common stock — $150 par value
Authorized, issued and outstanding — 100,000 shares		15,000		15,000
Additional paid-in capital		600,654		590,579
Retained earnings		944,996		817,708
Accumulated other comprehensive income		45,626		37,192
Total Shareholder’s Equity		1,606,276		1,460,479
Total Liabilities and Shareholder’s Equity	$	2,624,177	$	2,383,205

* See Consolidated Explanatory Notes on page 16.

** Except share amounts.

4 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated GAAP Balance Sheets

Radian Asset Assurance Inc.

Consolidated Gross Premiums Written by Product* ($ Thousands)

	Quarter ended						Twelve months ended
	December 31 2006		December 31 2005		Percent Change		December 31 2006		December 31 2005			Percent Change
Public Finance Direct	$	30,647	$	21,860	40.2	%	$	80,242	$	73,146		9.7	%
Structured Finance Direct		19,053		18,951	0.5	%		78,367		71,559		9.5	%
Public Finance Reinsurance		20,526		16,443	24.8	%		81,065		77,797		4.2	%
Structured Finance Reinsurance		5,950		4,294	38.6	%		18,869		20,649		–8.6	%
Trade Credit Reinsurance		219		6,155	–96.4	%		3,905		34,535		–88.7	%
		76,395		67,703	12.8	%		262,448		277,686		–5.5	%
Impact of Recapture		—		—	—			—		(54,742	)	100.0	%
	$	76,395	$	67,703	12.8	%	$	262,448	$	222,944		17.7	%

Consolidated Net Premiums Earned by Product* ($ Thousands)

	Quarter ended						Twelve months ended
	December 31 2006		December 31 2005		Percent Change		December 31 2006		December 31 2005			Percent Change
Public Finance Direct	$	9,335	$	7,866	18.7	%	$	33,016	$	32,533		1.5	%
Structured Finance Direct		23,105		22,310	3.6	%		90,092		79,408		13.5	%
Public Finance Reinsurance		9,510		8,752	8.7	%		37,765		34,413		9.7	%
Structured Finance Reinsurance		5,516		4,877	13.1	%		21,278		20,440		4.1	%
Trade Credit Reinsurance		1,281		7,394	–82.7	%		17,422		43,868		–60.3	%
		48,747		51,199	–4.8	%		199,573		210,662		–5.3	%
Impact of Recapture		—		—	—			—		(4,539	)	100.0	%
	$	48,747	$	51,199	–4.8	%	$	199,573	$	206,123		–3.2	%

Consolidated Net Unearned Premium Amortization and Estimated Future Installment Premiums**

As of December 31, 2006

($ Millions)	Ending Net Unearned Premiums		Unearned Premium Amortization		Future Installments		Total Premium Earnings
2007	$	603.3	$	90.2	$	68.7	$	158.9
2008		541.5		61.8		67.6		129.4
2009		490.4		51.1		58.9		110.0
2010		446.0		44.4		45.3		89.7
2011		404.7		41.3		38.4		79.7
2007 – 2011		404.7		288.8		278.9		567.7
2012 – 2016		233.9		170.8		83.6		254.4
2017 – 2021		116.1		117.8		30.2		148.0
2022 – 2026		44.3		71.8		20.3		92.1
After 2026		—		44.3		26.7		71.0
Total		—	$	693.5	$	439.7	$	1,133.2

* See Consolidated Explanatory Notes on page 16.

** This table depicts the expected amortization of the unearned premium for the existing financial guaranty portfolio, assuming no advance refundings as of December 31, 2006. Expected maturities will differ from contractual maturities because borrowers have the right to call or repay financial guaranty obligations. Unearned premium amounts are net of prepaid reinsurance.

5 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated: Gross Premiums Written / Net Premiums Earned / Net Unearned Premium

Radian Asset Assurance Inc.

Consolidated Selected Loss Information*

($ Thousands)

Components of Claims Paid and Incurred Losses and Loss Adjustment Expenses

	Quarter ended						Twelve months ended
	December 31 2006			December 31 2005			December 31 2006			December 31 2005
Claims Paid
Trade Credit	$	1,368		$	6,183		$	13,669		$	19,284
Financial Guaranty		(30	)		(1,944	)		6,787			9,340
Conseco Finance Corp		3,513			6,181			15,763			29,574
Total	$	4,851		$	10,420		$	36,219		$	58,198
Incurred Losses and Loss Adjustment Expenses
Trade Credit	$	88		$	2,209		$	6,180		$	15,947
Financial Guaranty		4,091			3,866			16,951			15,498
Conseco Finance Corp		—			—			(1,282	)		—
Total	$	4,179		$	6,075		$	21,849		$	31,445
Net (recoveries) payments under derivative contracts	$	(729	)	$	(1,419	)	$	63,548		$	(7,594	)

Components of Losses and Loss Adjustment Expense Reserves

	December 31 2006		December 31 2005
Financial Guaranty
Case	$	42,459	$	53,928
Allocated non-specific		26,185		27,750
Unallocated non-specific		60,431		54,878
		129,075		136,556
Trade Credit and Other
Case		20,770		19,051
IBNR		24,145		30,818
		44,915		49,869
Total	$	173,990	$	186,425

* See Consolidated Explanatory Notes on page 16.

6 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated Selected Loss Information

Radian Asset Assurance Inc.

Consolidated Selected Derivative Information*

($ Millions)

Balance Sheet Information

	December 31 2006		December 31 2005
Notional value.	$	43,728.0	$	22,724.8
Gross unrealized gains	$	118.7	$	95.5
Gross unrealized losses		24.3		72.1
Net gains	$	94.4	$	23.4

Income Statement Information

	Quarter ended					Twelve months ended
	December 31 2006		December 31 2005			December 31 2006		December 31 2005
Gains (losses) on trading securities	$	4.2	$	(0.6	)	$	4.9	$	0.4
Net gains (losses) recorded on derivatives		17.0		(32.7	)		7.4		5.7
Change in fair value of derivative instruments	$	21.2	$	(33.3	)	$	12.3	$	6.1

Net Gains and (Losses)

	December 31 2006			December 31 2005
Balance at January 1	$	23.4		$	25.3
Net gains recorded		7.4			5.7
Settlements of derivatives contracts:
Defaults
Recoveries		(4.5	)		(7.7	)
Payments .		68.1			0.1
Early termination receipts . .		—			—
Balance at end of period	$	94.4		$	23.4

* See Consolidated Explanatory Notes on page 16.

7 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Selected Consolidated Derivative Information

Radian Asset Assurance Inc.

Consolidated Investment Portfolio Highlights*

($ Millions)

Asset Quality**	Book Value (12/31/2006)		Percent of Book Value		Book Value (12/31/2005)		Percent of Book Value
AAA	$	1,573.2	68.5	%	$	1,422.0	67.3	%
AA		404.4	17.6	%		397.0	18.8	%
A		172.6	7.5	%		169.9	8.0	%
BBB		132.4	5.8	%		116.8	5.5	%
BIG		3.5	0.2	%		—	0.0	%
NR		5.8	0.3	%		6.5	0.3	%
Other		2.2	0.1	%		1.5	0.1	%
Total	$	2,294.1	100.0	%	$	2,113.7	100.0	%

Asset Class	Book Value (12/31/2006)		Percent of Book Value		Book Value (12/31/2005)		Percent of Book Value
Municipal Bonds	$	1,703.6	74.2	%	$	1,537.0	72.7	%
Taxable Bonds		344.2	15.0	%		366.3	17.3	%
Convertible Bonds		116.5	5.1	%		107.5	5.1	%
Short-Term		93.0	4.1	%		70.5	3.4	%
Other		36.8	1.6	%		32.4	1.5	%
Total	$	2,294.1	100.0	%	$	2,113.7	100.0	%

* See Consolidated Explanatory Notes on page 16.

** Average duration of 5.6 years and 5.8 years at 12/31/2006 and 12/31/2005, respectively.

8 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated Investment Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights* ($ Millions)

Consolidated Gross Par Originated

	Quarter ended
	December 31, 2006						December 31, 2005
	Direct		Assumed**		Total		Direct		Assumed**		Total
Public Finance	$	1,448	$	1,544	$	2,992	$	1,239	$	2,254	$	3,493
Structured Finance		5,994		815		6,809		3,638		1,207		4,845
Total	$	7,442	$	2,359	$	9,801	$	4,877	$	3,461	$	8,338
	Twelve months ended
	December 31, 2006						December 31, 2005
	Direct		Assumed**		Total		Direct		Assumed**		Total
Public Finance	$	3,304	$	6,486	$	9,790	$	3,008	$	6,824	$	9,832
Structured Finance		22,990		2,113		25,103		12,513		2,369		14,882
Total	$	26,294	$	8,599	$	34,893	$	15,521	$	9,193	$	24,714

Sector Breakout

	Net Par Outstanding (12/31/2006)		Percent of total Net Par		Net Par Outstanding (12/31/2005)		Percent of total Net Par
Public Finance
General Obligations	$	16,760	16.1	%	$	15,160	19.8	%
Healthcare		10,198	9.8	%		8,727	11.4	%
Utilities		6,269	6.0	%		5,686	7.4	%
Transportation		5,426	5.2	%		4,739	6.2	%
Tax Backed		5,269	5.1	%		4,540	5.9	%
Education		4,095	3.9	%		3,513	4.6	%
Investor-Owned Utilities		2,355	2.3	%		1,690	2.2	%
Long Term Care		1,464	1.4	%		1,292	1.7	%
Housing		793	0.8	%		618	0.8	%
Other Public Finance		1,184	1.1	%		1,278	1.7	%
Subtotal Public Finance	$	53,813	51.7	%	$	47,243	61.7	%
Structured Finance
Collateralized Debt Obligations	$	43,990	42.3	%	$	22,736	29.7	%
Asset Backed – Consumer		1,310	1.3	%		1,714	2.2	%
Asset Backed – Commercial and Other		1,109	1.1	%		1,784	2.3	%
Asset Backed – Mortgage and MBS		1,023	1.0	%		1,287	1.7	%
Other Structured Finance		2,721	2.6	%		1,810	2.4	%
Subtotal Structured Finance		50,153	48.3	%		29,331	38.3	%
Total	$	103,966	100.0	%	$	76,574	100.0	%

* See Consolidated Explanatory Notes on page 16.

** Reflects one quarter lag

9 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Rating Distribution**

Rating**	Net Par Outstanding (12/31/2006)		Percent of total Net Par		Net Par Outstanding (12/31/2005)		Percent of total Net Par
Public Finance
AAA	$	1,371	1.3	%	$	1,380	1.8	%
AA		16,436	15.8	%		13,664	17.8	%
A		18,715	18.0	%		18,036	23.6	%
BBB		15,808	15.2	%		12,922	16.9	%
Below Investment Grade		1,293	1.2	%		902	1.2	%
Not Rated		190	0.2	%		339	0.4	%
Subtotal Public Finance	$	53,813	51.7	%	$	47,243	61.7	%
Structured Finance
AAA	$	41,800	40.2	%	$	21,155	27.6	%
AA		2,976	2.9	%		2,727	3.6	%
A		1,481	1.5	%		1,288	1.7	%
BBB		2,511	2.4	%		3,012	3.9	%
Below Investment Grade		119	0.1	%		552	0.7	%
Not Rated		1,266	1.2	%		597	0.8	%
Subtotal Structured Finance	$	50,153	48.3	%	$	29,331	38.3	%
Total
AAA	$	43,171	41.5	%	$	22,535	29.4	%
AA		19,412	18.7	%		16,391	21.4	%
A		20,196	19.5	%		19,324	25.3	%
BBB		18,319	17.6	%		15,934	20.8	%
Below Investment Grade		1,412	1.3	%		1,454	1.9	%
Not Rated		1,456	1.4	%		936	1.2	%
Total	$	103,966	100.0	%	$	76,574	100.0	%

* See Consolidated Explanatory Notes on page 16.

** Indicated ratings category reflects the highest rating assigned to the underlying obligation from the three rating agencies (S&P, Moody’s and Fitch), or, if no such rating has been assigned, Radian’s rating estimate of the obligation utilizing rating agency models and methodologies to the extent available. Radian’s rating estimates are subject to revision at any time and may differ from the credit ratings ultimately assigned by the three rating agencies.

10 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Geographic Diversification

	Net Par Outstanding (12/31/2006)		Percent of total Net Par		Net Par Outstanding (12/31/2005)		Percent of total Net Par
Domestic public finance
California	$	6,185	5.9	%	$	5,182	6.8	%
New York		5,051	4.9	%		4,835	6.3	%
Texas		4,158	4.0	%		3,625	4.7	%
Florida		3,245	3.1	%		2,681	3.5	%
Pennsylvania		2,892	2.8	%		2,907	3.8	%
Illinois		2,881	2.8	%		2,654	3.5	%
New Jersey		2,250	2.2	%		1,994	2.6	%
Massachusetts		2,238	2.2	%		2,178	2.8	%
Washington		1,775	1.7	%		1,549	2.0	%
Colorado		1,409	1.3	%		1,165	1.5	%
Top ten states – domestic public finance subtotal		32,084	30.9	%		28,770	37.5	%
Total of other states – domestic public finance		18,685	17.9	%		16,960	22.2	%
Total domestic public finance		50,769	48.8	%		45,730	59.7	%
Domestic structured finance		37,205	35.8	%		24,595	32.1	%
International public and structured finance		15,992	15.4	%		6,249	8.2	%
Total	$	103,966	100.0	%	$	76,574	100.0	%

* See Consolidated Explanatory Notes on page 16.

11 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights* ($ Millions)

25 Largest Public Finance Exposures

Obligor	Net Par Outstanding (12/31/2006)		Percent of total Net Par		Rating**
New York, NY – G.O.	$	738	0.7	%	AA–
California – G.O.		611	0.6	%	A+
Port Authority of New York & New Jersey		551	0.5	%	AA–
Chicago, IL – G.O.		464	0.4	%	AA
Washington – G.O.		371	0.4	%	Aa1
Massachusetts – G.O.		364	0.4	%	AA
New Jersey Economic Development Authority School Facilities		314	0.3	%	AA–
New York City Municipal Water Finance, NY		313	0.3	%	AA+
Long Island Power Authority, NY		298	0.3	%	A–
New Jersey Transportation Trust Fund Authority		295	0.3	%	AA–
Illinois Toll Highway Authority		289	0.3	%	AA–
Jefferson County, AL – Sewer Revenue		275	0.3	%	A
Massachusetts School Building Authority		264	0.3	%	AA
Los Angeles Unified School District, CA		259	0.2	%	AA–
Houston Airport System, TX		256	0.2	%	A1
Illinois – G.O.		253	0.2	%	AA
Puerto Rico – G.O.		251	0.2	%	BBB
New Jersey Turnpike Authority		249	0.2	%	A
California Economic Recovery Bonds		235	0.2	%	AA–
San Francisco International Airport, CA		217	0.2	%	A1
Denver Colorado Airport System		211	0.2	%	A+
Detroit, MI – G.O.		207	0.2	%	BBB
Dallas Fort Worth International Airport, TX		205	0.2	%	A+
Metropolitan Transportation Authority, NY		196	0.2	%	A
Detroit, MI – Water and Sewer Revenue		193	0.2	%	A+
Total	$	7,879	7.5	%

Largest Structured Finance Exposures

Radian’s largest Structured Finance exposures consist of the following:

• One $600 million transaction representing a Static Synthetic Investment Grade Corporate CDO rated AAA.

• One $519 million transaction representing a Managed Synthetic Investment Grade Asset-Backed CDO rated AAA.

• Twenty five transactions ($450 million each) representing Static Synthetic Investment Grade Corporate CDO’s rated AAA.

• One $450 million transaction representing a Second-to-Pay CDO rated AAA.

• One $450 million transaction representing a Static Synthetic Investment Grade Asset-Backed CDO rated AAA.

These 29 transactions combine to total $13.27 billion, or 12.76% of Radian’s Net Par Outstanding as of December 31, 2006.

* See Consolidated Explanatory Notes on page 16.

** Indicated ratings category reflects the highest rating assigned to the underlying obligation from the three rating agencies (S&P, Moody’s and Fitch), or, if no such rating has been assigned, Radian’s rating estimate of the obligation utilizing rating agency models and methodologies to the extent available. Radian’s rating estimates are subject to revision at any time and may differ from the credit ratings ultimately assigned by the three rating agencies.

12 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Below Investment Grade Exposure by Sector

Sector	Net Par Outstanding (12/31/2006)		Percent of total Net Par
Public Finance
General Obligations	$	833	0.8	%
Tax Backed		99	0.1	%
Healthcare		97	0.1	%
Education		81	0.1	%
Long Term Care		56	0.1	%
Utilities		56	0.1	%
Housing		23	0.0	%
Transportation		4	0.0	%
Other Public Finance		44	0.0	%
Subtotal Public Finance		1,293	1.3	%
Structured Finance
Asset Backed – Consumer		81	0.1	%
Collateralized Debt Obligations		8	0.0	%
Asset Backed – Commercial and Other		30	0.0	%
Subtotal Structured Finance		119	0.1	%
Total	$	1,412	1.4	%
10 Largest Health Care Exposures
Obligor	Net Par Outstanding (12/31/2006)		Percent of total Net Par		Rating**
MedStar Health	$	119	0.1	%	BBB+
Kaiser Permanente		109	0.1	%	A+
Methodist Hospital		105	0.1	%	AA
Consort Healthcare Limited		105	0.1	%	BBB–
Adventist Health System		100	0.1	%	A+
Ascension Health		98	0.1	%	AA
Catholic Healthcare West		96	0.1	%	A
Bon Secours Health System Inc		96	0.1	%	A–
Stanford Health Services		91	0.1	%	A
Sutter Health		86	0.1	%	AA–
Total	$	1,005	1.0	%

* See Consolidated Explanatory Notes on page 16.

** Indicated ratings category reflects the highest rating assigned to the underlying obligation from the three rating agencies (S&P, Moody’s and Fitch), or, if no such rating has been assigned, Radian’s rating estimate of the obligation utilizing rating agency models and methodologies to the extent available. Radian’s rating estimates are subject to revision at any time and may differ from the credit ratings ultimately assigned by the three rating agencies.

13 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated Insured Portfolio Highlights*

($ Millions)

Net Debt Service Amortization

	Scheduled Net Debt Service Amortization as of 12/31/2006		Ending Net Debt Service Outstanding
2007	$	8,597	$	135,131
2008		6,677		128,454
2009		8,909		119,545
2010		9,413		110,132
2011		6,450		103,682
2012-2016		46,517		57,165
2017-2021		20,279		36,886
2022-2026		15,276		21,610
After 2026		21,610		—
Total	$	143,728

* See Consolidated Explanatory Notes on page 16.

14 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated Insured Portfolio Highlights

Radian Asset Assurance Inc.

Consolidated CDO Exposure* ($ Millions)

Total CDO Exposure

	Net Par Outstanding (12/31/2006)		Percent of Total CDO Net Par		Net Par Outstanding (12/31/2005)		Percent of Total CDO Net Par
Direct	$	42,110	95.7	%	$	21,442	94.3	%
Assumed		1,879	4.3	%		1,294	5.7	%
Total	$	43,989	100.0	%	$	22,736	100.0	%

Total CDO Portfolio Rating Distribution**

	Net Par Outstanding (12/31/2006)		Percent of Total CDO Net Par		Net Par Outstanding (12/31/2005)		Percent of Total CDO Net Par
AAA	$	40,448	92.0	%	$	18,267	80.3	%
AA		2,357	5.4	%		2,470	10.9	%
A		505	1.1	%		604	2.7	%
BBB		271	0.6	%		982	4.3	%
Below Investment Grade		8	0.0	%		413	1.8	%
Not Rated		400	0.9	%		—	0.0	%
Total	$	43,989	100.0	%	$	22,736	100.0	%

Direct CDO Underlying Asset Types

	Direct CDO Net Par Outstanding (12/31/2006)		Percent of Direct CDO Net Par		Direct CDO Net Par Outstanding (12/31/2005)		Percent of Direct CDO Net Par
Corporates	$	36,319	86.2	%	$	20,019	93.4	%
Other		5,791	13.8	%		1,423	6.6	%
Total	$	42,110	100.0	%	$	21,442	100.0	%

* See Consolidated Explanatory Notes on page 16.

** Indicated ratings category reflects the highest rating assigned to the underlying obligation from the three rating agencies (S&P, Moody’s and Fitch), or, if no such rating has been assigned, Radian’s rating estimate of the obligation utilizing rating agency models and methodologies to the extent available. Radian’s rating estimates are subject to revision at any time and may differ from the credit ratings ultimately assigned by the three rating agencies.

15 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated CDO Exposure

Radian Asset Assurance Inc.

Consolidated Explanatory Notes

1. The accompanying unaudited GAAP financial information includes the accounts of Radian, Radian Asset Assurance Limited, Radian Financial Products Limited, Van-American Insurance Agency, Inc. and Asset Recovery Solutions.

These unaudited consolidated financial statements do not include all of the information and disclosures required by generally accepted accounting principles. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, including the Report of Independent Registered Public Accounting Firm for Radian for the year ended December 31, 2005, as filed in accordance with 15c2-12 of the Securities Exchange Act of 1934.

2. In May 2004, Moody’s provided Radian with an initial insurance financial strength rating of Aa3. Prior to the merger of Radian Reinsurance Inc. (Radian Reinsurance) with and into Radian, Moody’s downgraded the insurance financial strength rating of Radian Reinsurance from Aa2 to Aa3. As a result of this downgrade, two of the primary insurer customers had the right to recapture previously written business ceded to Radian Reinsurance. One of these customers agreed, without cost to or concessions by Radian, to waive its recapture rights. Effective February 28, 2005, the remaining primary insurer customer with recapture rights recaptured approximately $7.4 billion of par in-force that it had ceded to Radian Reinsurance, including $54.7 million of premiums written through the recapture date, $4.5 million of which already had been treated as earned under GAAP and was required to be recorded as an immediate reduction of earned premium at the time of recapture. Also, in connection with the recapture in the first quarter of 2005, Radian was reimbursed for policy acquisition costs of approximately $17.1 million for which the carrying value under GAAP was $18.8 million. This required Radian to write-off policy acquisition costs of $1.7 million. The aggregate result of the recapture was a reduction in pre-tax income of $6.2 million. In March 2005, without cost to or concessions by Radian, this customer waived its remaining right to recapture an additional $5.2 billion of par in force that it had ceded to Radian through December 31, 2004.

3. During June, 2006 Standard & Poor’s affirmed the AA insurance financial strength rating of Radian, and revised upward its outlook to stable.

4. For the quarter ended December 31, 2006, the change in fair value of derivatives was a $21.2 million gain as compared to a $33.3 million loss for the same period in 2005. The fourth quarter 2005 included a $50.6 million loss on a credit that was settled in March 2006. Offsetting this loss were gains resulting from tightening of credit spreads which about equal to gains realized in 2006. Both 2006 and 2005 year to date periods had substantial gains resulting from the tightening of credit spreads. However both periods had losses from a credit that settled in March 2006. The losses on this transaction were $17.2 million in 2006 and $40.1 million in 2005.

5. At December 31, 2006, the mark to market on credit derivatives was $94.4 million compared to a mark to market of $23.4 million at December 31, 2005. The increase in the mark was primarily due to Radian paying $68.0 million to a counterparty in March 2006 in consideration for the termination of one credit.

16 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Consolidated Explanatory Notes

Safe Harbor Statement

All statements made in this document that address events or developments that we expect or anticipate may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management’s current views and assumptions with respect to future events. The forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties, including the following: changes in general financial and political conditions such as extended national or regional economic recessions (or expansions), changes in housing demand or mortgage originations, changes in housing values, population trends and changes in household formation patterns, changes in unemployment rates, changes or volatility in interest rates or consumer confidence, or changes in credit spreads; changes in investor perception of the strength of private mortgage insurers or financial guaranty providers, and risks faced by the businesses, municipalities or pools of assets covered by our insurance; the loss of a customer with whom we have a concentration of our insurance in force or the influence of large customers; increased severity or frequency of losses associated with certain of our products that are riskier than traditional mortgage insurance and municipal guaranty insurance policies; material changes in persistency rates of our mortgage insurance policies; downgrades of, or other ratings actions with respect to, our credit ratings or the insurance financial-strength ratings assigned by the major ratings agencies to our operating subsidiaries; heightened competition from other insurance providers and from alternative products to private mortgage insurance and financial guaranty insurance; changes in the charters or business practices of Fannie Mae and Freddie Mac; the application of federal or state consumers lending, insurance and other applicable laws and regulations, or unfavorable changes in these laws and regulations or the way they are interpreted including legislative and regulatory changes affecting demand for private mortgage insurance or financial guaranty insurance; the possibility that we may fail to estimate accurately the likelihood, magnitude and timing of losses in connection with establishing loss reserves for our mortgage insurance or financial guaranty businesses or to estimate accurately the fair value amounts of derivative financial guaranty contracts in determining gains and losses on these contracts; changes in accounting guidance from the SEC or the Financial Accounting Standards Board regarding income recognition and the treatment of loss reserves in the mortgage insurance or financial guaranty industries; changes in claims against mortgage insurance products resulting from the aging of our mortgage insurance policies; vulnerability to the performance of our strategic investments; changes in the availability of affordable or adequate reinsurance for our non-prime risk; legal and other limitations on the amount of dividends that Radian Group Inc. may receive from its insurance subsidiaries; international expansion of our mortgage insurance and financial guaranty businesses into new markets and risks associated with our international business activities. For more information regarding these risks and uncertainties as well as certain additional risks faced by us, please refer to the risk factors detailed in Item 1A of Part I of Radian Group Inc.’s annual report on Form 10-K for the year ended December 31, 2005 and the material changes to these risks set forth in Item 1A of Part II of Radian Group Inc.’s quarterly report on Form 10-Q for the quarter ended June 30, 2006. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which this information was publicly released. We do not intend to, and disclaim any duty or obligation to, update or revise any forward-looking statements made in this document to reflect new information, future events or for any other reason.

17 Quarterly Operating Supplement for the Period Ended Dec. 31, 2006 / Safe Harbor Statement