Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 20, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | ASSURED GUARANTY LTD | ||
Entity Central Index Key | 1,273,813 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
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 | $ 4,900,141,702 | ||
Entity Common Stock, Shares Outstanding | 115,328,631 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Investment portfolio: | ||
Fixed-maturity securities, available-for-sale, at fair value (amortized cost of $10,187 and $9,974) | $ 10,674 | $ 10,233 |
Short-term investments, at fair value | 627 | 590 |
Other invested assets | 94 | 162 |
Total investment portfolio | 11,395 | 10,985 |
Cash | 144 | 118 |
Premiums receivable, net of commissions payable | 915 | 576 |
Ceded unearned premium reserve | 119 | 206 |
Deferred acquisition costs | 101 | 106 |
Reinsurance recoverable on unpaid losses | 44 | 80 |
Salvage and subrogation recoverable | 572 | 365 |
Credit derivative assets | 2 | 13 |
Deferred tax asset, net | 98 | 497 |
Current income tax receivable | 21 | 12 |
Financial guaranty variable interest entities’ assets, at fair value | 700 | 876 |
Other assets | 322 | 317 |
Total assets | 14,433 | 14,151 |
Liabilities and shareholders’ equity | ||
Unearned premium reserve | 3,475 | 3,511 |
Loss and loss adjustment expense reserve | 1,444 | 1,127 |
Reinsurance balances payable, net | 61 | 64 |
Long-term debt | 1,292 | 1,306 |
Credit derivative liabilities | 271 | 402 |
Financial guaranty variable interest entities’ liabilities with recourse, at fair value | 627 | 807 |
Financial guaranty variable interest entities’ liabilities without recourse, at fair value | 130 | 151 |
Other liabilities | 294 | 279 |
Total liabilities | 7,594 | 7,647 |
Commitments and contingencies (see Note 15) | ||
Common stock ($0.01 par value, 500,000,000 shares authorized; 116,020,852 and 127,988,230 shares issued and outstanding) | 1 | 1 |
Additional paid-in capital | 573 | 1,060 |
Retained earnings | 5,892 | 5,289 |
Accumulated other comprehensive income, net of tax of $89 and $70 | 372 | 149 |
Deferred equity compensation | 1 | 5 |
Total shareholders’ equity | 6,839 | 6,504 |
Total liabilities and shareholders’ equity | $ 14,433 | $ 14,151 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Fixed-maturity securities, available-for-sale, at fair value | $ 10,187 | $ 9,974 |
Common stock par value (per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 116,020,852 | 127,988,230 |
Common stock, shares outstanding | 116,020,852 | 127,988,230 |
Accumulated other comprehensive income, tax provision | $ 89 | $ 70 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Net earned premiums | $ 690 | $ 864 | $ 766 |
Net investment income | 418 | 408 | 423 |
Net realized investment gains (losses): | |||
Other-than-temporary impairment losses | (33) | (47) | (47) |
Less: portion of other-than-temporary impairment loss recognized in other comprehensive income | 10 | 4 | 0 |
Net impairment loss | (43) | (51) | (47) |
Other net realized investment gains (losses) | 83 | 22 | 21 |
Net realized investment gains (losses) | 40 | (29) | (26) |
Net change in fair value of credit derivatives: | |||
Realized gains (losses) and other settlements | (10) | 29 | (18) |
Net unrealized gains (losses) | 121 | 69 | 746 |
Net change in fair value of credit derivatives | 111 | 98 | 728 |
Fair value gains (losses) on committed capital securities | (2) | 0 | 27 |
Fair value gains (losses) on financial guaranty variable interest entities | 30 | 38 | 38 |
Bargain purchase gain and settlement of pre-existing relationships, net | 58 | 259 | 214 |
Other income (loss) | 394 | 39 | 37 |
Total revenues | 1,739 | 1,677 | 2,207 |
Expenses | |||
Loss and loss adjustment expenses | 388 | 295 | 424 |
Amortization of deferred acquisition costs | 19 | 18 | 20 |
Interest expense | 97 | 102 | 101 |
Other operating expenses | 244 | 245 | 231 |
Total expenses | 748 | 660 | 776 |
Income (loss) before income taxes | 991 | 1,017 | 1,431 |
Provision (benefit) for income taxes | |||
Current | 11 | 117 | 75 |
Deferred | 250 | 19 | 300 |
Total provision (benefit) for income taxes | 261 | 136 | 375 |
Net income (loss) | $ 730 | $ 881 | $ 1,056 |
Earnings per share: | |||
Basic (in dollars per share) | $ 6.05 | $ 6.61 | $ 7.12 |
Diluted (in dollars per share) | 5.96 | 6.56 | 7.08 |
Dividends (in dollars per share) | $ 0.57 | $ 0.52 | $ 0.48 |
Consolidated Statements of Ope5
Consolidated Statements of Operations Consolidated Statement of Operations - Parenthetical - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Gain from commutations | $ 328 | $ 8 | $ 28 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 730 | $ 881 | $ 1,056 |
Unrealized holding gains (losses) arising during the period on: | |||
Investments with no other-than-temporary impairment, net of tax provision (benefit) of $61, $(34) and $(36) | 128 | (71) | (93) |
Investments with other-than-temporary impairment, net of tax provision (benefit) of $36, $(5) and $(23) | 69 | (9) | (43) |
Unrealized holding gains (losses) arising during the period, net of tax | 197 | (80) | (136) |
Less: reclassification adjustment for gains (losses) included in net income (loss), net of tax provision (benefit) of $24, $(10) and $(7) | 44 | (16) | (10) |
Change in net unrealized gains (losses) on investments | 153 | (64) | (126) |
Other, net of tax provision | 14 | (24) | (7) |
Other comprehensive income (loss) | 167 | (88) | (133) |
Comprehensive income (loss) | $ 897 | $ 793 | $ 923 |
Consolidated Statements of Com7
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Investments with no other-than-temporary impairment, tax provision (benefit) | $ 61 | $ (34) | $ (36) |
Investments with other-than-temporary impairment, tax provision (benefit) | 36 | (5) | (23) |
Reclassification adjustment for gains (losses) included in net income (loss), tax provision (benefit) | $ 24 | $ (10) | $ (7) |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Deferred Equity Compensation [Member] |
Beginning balance (in shares) at Dec. 31, 2014 | 158,306,661 | |||||
Beginning balance at Dec. 31, 2014 | $ 5,758 | $ 2 | $ 1,887 | $ 3,494 | $ 370 | $ 5 |
Increase (Decrease) in Shareholders' Equity | ||||||
Net Income | 1,056 | 1,056 | ||||
Dividends (2015 $0.48, 2016 $0.52, 2017 $0.57 per share) | (72) | (72) | ||||
Common stock repurchases (in shares) | (20,995,419) | |||||
Common stock repurchases | (555) | $ (1) | (554) | |||
Share-based compensation and other (in shares) | 617,310 | |||||
Share-based compensation and other | 9 | $ 0 | 9 | |||
Other comprehensive loss | (133) | (133) | ||||
Ending balance (in shares) at Dec. 31, 2015 | 137,928,552 | |||||
Ending balance at Dec. 31, 2015 | 6,063 | $ 1 | 1,342 | 4,478 | 237 | 5 |
Increase (Decrease) in Shareholders' Equity | ||||||
Net Income | 881 | 881 | ||||
Dividends (2015 $0.48, 2016 $0.52, 2017 $0.57 per share) | (70) | (70) | ||||
Common stock repurchases (in shares) | (10,721,248) | |||||
Common stock repurchases | (306) | $ 0 | (306) | |||
Share-based compensation and other (in shares) | 780,926 | |||||
Share-based compensation and other | 24 | 24 | ||||
Other comprehensive loss | (88) | (88) | ||||
Ending balance (in shares) at Dec. 31, 2016 | 127,988,230 | |||||
Ending balance at Dec. 31, 2016 | 6,504 | $ 1 | 1,060 | 5,289 | 149 | 5 |
Increase (Decrease) in Shareholders' Equity | ||||||
Net Income | 730 | 730 | ||||
Dividends (2015 $0.48, 2016 $0.52, 2017 $0.57 per share) | (70) | (70) | ||||
Common stock repurchases (in shares) | (12,669,643) | |||||
Common stock repurchases | (501) | $ 0 | (501) | |||
Share-based compensation and other (in shares) | 702,265 | |||||
Share-based compensation and other | 10 | $ 0 | 14 | (4) | ||
Other comprehensive loss | 167 | 167 | ||||
Reclassification of stranded tax effects | 0 | (56) | 56 | |||
Other | (1) | (1) | ||||
Ending balance (in shares) at Dec. 31, 2017 | 116,020,852 | |||||
Ending balance at Dec. 31, 2017 | $ 6,839 | $ 1 | $ 573 | $ 5,892 | $ 372 | $ 1 |
Consolidated Statement of Shar9
Consolidated Statement of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||
Dividends (in dollars per share) | $ 0.1425 | $ 0.1425 | $ 0.1425 | $ 0.1425 | $ 0.13 | $ 0.13 | $ 0.13 | $ 0.13 | $ 0.57 | $ 0.52 | $ 0.48 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Activities: | |||
Net Income | $ 730 | $ 881 | $ 1,056 |
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||
Non-cash interest and operating expenses | 26 | 39 | 27 |
Net amortization of premium (discount) on investments | (46) | (34) | (25) |
Provision (benefit) for deferred income taxes | 250 | 19 | 300 |
Net realized investment losses (gains) | (40) | 29 | 17 |
Net unrealized losses (gains) on credit derivatives | (121) | (69) | (746) |
Fair value losses (gains) on committed capital securities | 2 | 0 | (27) |
Bargain purchase gain and settlement of pre-existing relationships | (58) | (259) | (214) |
Change in deferred acquisition costs | 2 | 9 | 9 |
Change in premiums receivable, net of premiums and commissions payable | (69) | 128 | (8) |
Change in ceded unearned premium reserve | 90 | 22 | 79 |
Change in unearned premium reserve | (424) | (777) | (744) |
Change in loss and loss adjustment expense reserve, net | 142 | (105) | 244 |
Change in current income tax | (10) | 27 | (45) |
Change in financial guaranty variable interest entities' assets and liabilities, net | (15) | (24) | (6) |
Other | (26) | (18) | 12 |
Net cash flows provided by (used in) operating activities | 433 | (132) | (71) |
Fixed-maturity securities: | |||
Purchases | (2,552) | (1,646) | (2,577) |
Sales | 1,701 | 1,365 | 2,107 |
Maturities | 821 | 1,155 | 898 |
Net sales (purchases) of short-term investments | 74 | 17 | 897 |
Net proceeds from paydowns on financial guaranty variable interest entities’ assets | 147 | 629 | 400 |
Acquisitions, net of cash acquired (see Note 2) | 95 | (435) | (800) |
Other | 59 | (9) | 69 |
Net cash flows provided by (used in) investing activities | 345 | 1,076 | 994 |
Financing activities | |||
Dividends paid | (70) | (69) | (72) |
Repurchases of common stock | (501) | (306) | (555) |
Repurchases of common stock to pay withholding taxes | (13) | (2) | (7) |
Net paydowns of FG VIE liabilities | (157) | (611) | (214) |
Paydown of long-term debt | (30) | (2) | (4) |
Proceeds from option exercises | 5 | 12 | 5 |
Net cash flows provided by (used in) financing activities | (766) | (978) | (847) |
Effect of foreign exchange rate changes | 5 | (5) | (4) |
Increase (decrease) in cash and restricted cash | 17 | (39) | 72 |
Cash and restricted cash at beginning of period | 127 | 166 | 94 |
Cash and restricted cash at beginning of period | 144 | 127 | 166 |
Supplemental cash flow information | |||
Income taxes | 10 | 74 | 103 |
Interest | $ 77 | $ 95 | $ 95 |
Business and Basis of Presentat
Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation Business Assured Guaranty Ltd. (AGL and, together with its subsidiaries, Assured Guaranty or the Company) is a Bermuda-based holding company that provides, through its operating subsidiaries, credit protection products to the United States (U.S.) and international public finance (including infrastructure) and structured finance markets. The Company applies its credit underwriting judgment, risk management skills and capital markets experience primarily to offer financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. If an obligor defaults on a scheduled payment due on an obligation, including a scheduled principal or interest payment (debt service), the Company is required under its unconditional and irrevocable financial guaranty to pay the amount of the shortfall to the holder of the obligation. The Company markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities as well as to investors in such obligations. The Company guarantees obligations issued principally in the U.S. and the United Kingdom (U.K.), and also guarantees obligations issued in other countries and regions, including Australia and Western Europe. The Company also provides other forms of insurance (non-financial guaranty insurance) that are in line with its risk profile and benefit from its underwriting experience. In the past, the Company sold credit protection by issuing policies that guaranteed payment obligations under credit derivatives, primarily credit default swaps (CDS). Contracts accounted for as credit derivatives are generally structured such that the circumstances giving rise to the Company’s obligation to make loss payments are similar to those for financial guaranty insurance contracts. The Company’s credit derivative transactions are governed by International Swaps and Derivative Association, Inc. (ISDA) documentation. The Company has not entered into any new CDS in order to sell credit protection in the U.S. since the beginning of 2009, when regulatory guidelines were issued that limited the terms under which such protection could be sold. The capital and margin requirements applicable under the Dodd-Frank Wall Street Reform and Consumer Protection Act also contributed to the Company not entering into such new CDS in the U.S. since 2009. The Company actively pursues opportunities to terminate existing CDS, which terminations have the effect of reducing future fair value volatility in income and/or reducing rating agency capital charges. Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and, in the opinion of management, reflect all material adjustments that are of a normal recurring nature, necessary for a fair statement of the financial condition, results of operations and cash flows of the Company and its consolidated variable interest entities (VIEs) for the periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The 2016 and 2015 financial information in Note 21, Subsidiary Information reflects transfers of businesses between entities within the consolidated group that occurred in the current reporting period, consistently for all prior periods presented. The consolidated financial statements include the accounts of AGL, its direct and indirect subsidiaries and its consolidated VIEs. Intercompany accounts and transactions between and among all consolidated entities have been eliminated. Certain prior-year balances have been reclassified to conform to the current year's presentation. The Company's principal insurance company subsidiaries are: • Assured Guaranty Municipal Corp. (AGM), domiciled in New York; • Municipal Assurance Corp. (MAC), domiciled in New York; • Assured Guaranty Corp. (AGC), domiciled in Maryland; • Assured Guaranty (Europe) plc (AGE), organized in the U.K.; and • Assured Guaranty Re Ltd. (AG Re) and Assured Guaranty Re Overseas Ltd. (AGRO), domiciled in Bermuda. The Company’s organizational structure includes various holding companies, two of which - Assured Guaranty US Holdings Inc. (AGUS) and Assured Guaranty Municipal Holdings Inc. (AGMH) - have public debt outstanding. See Note 16, Long-Term Debt and Credit Facilities and Note 21, Subsidiary Information. The Company is actively working to combine the operations of its European subsidiaries, AGE, Assured Guaranty (UK) plc (AGUK), Assured Guaranty (London) plc (AGLN) and CIFG Europe S.A. (CIFGE), through a multi-step transaction, which ultimately is expected to result in AGUK, AGLN and CIFGE transferring their insurance portfolios to and merging with and into AGE. Any such combination will be subject to regulatory and court approvals. As a result, the Company cannot predict when, or if, such combination will be completed, and, if so, what conditions may be attached. Significant Accounting Policies The Company revalues assets, liabilities, revenue and expenses denominated in non-U.S. currencies into U.S. dollars using applicable exchange rates. Gains and losses relating to translating foreign functional currency financial statements for U.S. GAAP reporting are recorded in other comprehensive income (loss) (OCI). Gains and losses relating to transactions in foreign denominations in subsidiaries where the functional currency is the U.S. dollar, are reported in the consolidated statement of operations. The chief operating decision maker manages the operations of the Company at a consolidated level. Therefore, all results of operations are reported as one segment. Other significant accounting policies are included in the following notes. Significant Accounting Policies Acquisitions Note 2 Expected loss to be paid (insurance, credit derivatives and financial guaranty (FG) VIE contracts) Note 5 Contracts accounted for as insurance (premium revenue recognition, loss and loss adjustment expense and policy acquisition cost) Note 6 Fair value measurement Note 7 Credit derivatives (at fair value) Note 8 Variable interest entities (at fair value) Note 9 Investments and cash Note 10 Income taxes Note 12 Long term debt Note 16 Earnings per share Note 17 Stock based compensation Note 19 Adopted Accounting Standards Accounting for the 2017 Tax Cuts and Jobs Act In January 2018, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 (SAB 118), providing guidance to companies on the accounting for the income tax effects of the 2017 Tax Cuts and Jobs Act (Tax Act) in financial statements for the period that includes the date of enactment, December 22, 2017. SAB 118 states that: • for income tax effects of the Tax Act for which the accounting is incomplete and for which the Company cannot reasonably estimate an amount, qualitative disclosures must be provided; • for income tax effects of the Tax Act for which the accounting is incomplete but for which the Company has determined a reasonable estimate and recorded a provisional amount, disclosures of such items; and • for income tax effects of the Tax Act for which the Company has completed its accounting and determined a final amount, disclosure of such amounts. For those effects for which the accounting has not been completed by the time the financial statements that include the enactment date are released, SAB 118 allows for a measurement period not to extend beyond one year after the enactment date to adjust those tax effects. In 2017, the Company recorded a provisional tax expense of $61 million attributable to the Tax Act. See Note 12, Income Taxes for the Company’s disclosures regarding the effects of the Tax Act. In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Comprehensive Income , which allows entities to elect to reclassify, from AOCI to retained earnings, stranded tax effects resulting from the Tax Act. Under existing U.S. GAAP, deferred tax assets and liabilities are required to be adjusted for the effect of a change in tax laws or rates, with the effect included in income from continuing operations in the reporting period that includes the enactment date, even in situations in which the related income tax effects of items in accumulated other comprehensive income (AOCI) were originally recognized in other comprehensive income (rather than in net income). This results in the tax rate for items within AOCI continuing to be recorded at the previous tax rate (stranded tax effects). The Company adopted this ASU in its 2017 financial statements and elected to reclassify approximately $56 million from AOCI to retained earnings, which is primarily attributable to the reduction in the corporate tax rate. Statement of Cash Flows In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the Emerging Issues Task Force), which addresses the presentation of changes in restricted cash and restricted cash equivalents in the statement of cash flows with the objective of reducing the existing diversity in practice. Under the ASU, entities are required to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the ASU requires a reconciliation be presented either on the face of the statement of cash flows or in the notes to the financial statements showing the totals in the statement of cash flows to the related captions in the balance sheet. The ASU was adopted on January 1, 2017 and was applied retrospectively. The required reconciliation is shown in Note 10, Investments and Cash. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force), which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The ASU was adopted on January 1, 2017 and did not have an effect on the Company’s consolidated statements of cash flows for the periods presented. Share-Based Payments In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment , which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The new guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also allows an employer to repurchase more of an employee’s shares than it previously could for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The ASU was adopted on January 1, 2017 with no material effect on the consolidated financial statements. Future Application of Accounting Standards Income Taxes In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory, which removes the current prohibition against immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. Under the ASU, the selling (transferring) entity is required to recognize a current income tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. The ASU is to be applied on a modified retrospective basis (i.e. by recording a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is adopted). The ASU was adopted on January 1, 2018 with no material effect on the consolidated financial statements. Financial Instruments In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities . The amendments in this ASU are intended to make targeted improvements to GAAP by addressing certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Amendments under this ASU apply to the Company's FG VIE liabilities, for which the Company has historically elected to measure through the income statement under the fair value option, and to certain equity securities in the Company’s investment portfolio. For FG VIE liabilities, the portion of the change in fair value caused by instrument specific credit risk will be separately presented in OCI as opposed to the income statement. Equity securities, except those that are accounted for under the equity method of accounting or that resulted in consolidation of the investee by the Company, will need to be accounted for at fair value with changes in fair value recognized through net income instead of OCI. Effective January 1, 2018, the Company adopted this ASU with a cumulative-effect adjustment to the statement of financial position as of January 1, 2018. This resulted in a reclassification of a $32 million loss, net of tax, from retained earnings to AOCI. Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB issued ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Topic 310-20) - Premium Amortization on Purchased Callable Debt Securities . This ASU shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. This ASU has no effect on the accounting for purchased callable debt securities held at a discount. It is to be applied using a modified retrospective approach and the ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company does not expect this ASU to have a material effect on its consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This ASU requires lessees to present right-of-use assets and lease liabilities on the balance sheet. ASU 2016-02 is to be applied using a modified retrospective approach and is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company intends to adopt this ASU on January 1, 2019. The Company is evaluating the effect that this ASU will have on its consolidated financial statements. The Company currently accounts for its lease agreements where the Company is the lessee as operating leases and, therefore, recognizes its lease expense on a straight-line basis. See Note 15, Commitments and Contingencies for additional information on the Company's leases. Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this ASU are intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions will be required to use forward-looking information to better inform their credit loss estimates as a result of the ASU. While many of the loss estimation techniques applied today will still be permitted, the inputs to those techniques will change to reflect the full amount of expected credit losses. The ASU requires enhanced disclosures to help investors and other financial statement users to better understand significant estimates and judgments used in estimating credit losses, as well as credit quality and underwriting standards of an organization’s portfolio. In addition, the ASU amends the accounting for credit losses on available-for-sale securities and purchased financial assets with credit deterioration. The ASU also eliminates the concept of “other than temporary” from the impairment model for certain available-for-sale securities. Accordingly, the ASU states that an entity must use an allowance approach, must limit the allowance to an amount by which the security’s fair value is less than its amortized cost basis, may not consider the length of time fair value has been less than amortized cost, and may not consider recoveries in fair value after the balance sheet date when assessing whether a credit loss exists. For purchased financial assets with credit deterioration, the ASU requires an entity’s method for measuring credit losses to be consistent with its method for measuring expected losses for originated and purchased non-credit-deteriorated assets. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For debt securities classified as available-for-sale, entities will be required to record a cumulative-effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is adopted. The changes to the impairment model for available-for-sale securities and changes to purchased financial assets with credit deterioration are to be applied prospectively. The Company is evaluating the effect that this ASU will have on its consolidated financial statements. See Note 10, Investments and Cash for the Company's current accounting policy with respect to available-for-sale securities. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Accounting Policies Consistent with one of its key business strategies of supplementing its book of business through acquisitions, the Company has acquired three financial guaranty companies since January 1, 2015, as described below. The acquisitions were accounted for under the acquisition method of accounting which requires that the assets and liabilities acquired be recorded at fair value. The Company exercised significant judgment to determine the fair value of the assets it acquired and liabilities it assumed in each of the acquisitions. The most significant of these determinations related to the valuation of the acquired financial guaranty insurance contracts. On an aggregate basis, the acquired companies' contractual premiums for financial guaranty insurance contracts acquired were less than the premiums a market participant of similar credit quality would demand to acquire those contracts at the date of acquisition (particularly for below-investment-grade (BIG) transactions) resulting in a significant amount of the purchase price being allocated to these contracts. For information on the methodology used to measure the fair value of assets acquired and liabilities assumed in the acquisitions, see Note 7, Fair Value Measurement. The fair value of the Company's stand-ready obligation on the date of acquisition is recorded in unearned premium reserve. Thereafter, loss reserves and loss and loss adjustment expenses (LAE) are recorded in accordance with the Company's accounting policy described in the Note 5, Expected Losses to be Paid, and Note 6, Contracts Accounted for as Insurance. The excess of the fair value of net assets acquired over the consideration transferred was recorded as a bargain purchase gain in "bargain purchase gain and settlement of pre-existing relationships" in net income. In addition, the Company and each of the acquired companies had pre-existing reinsurance relationships, which were effectively settled at fair value on the acquisition dates. The gain or loss on settlement of these pre-existing reinsurance relationships represents the net difference between the historical assumed or ceded balances that were recorded by the Company and the fair value of ceded or assumed balances acquired. MBIA UK Insurance Limited On January 10, 2017 (the MBIA UK Acquisition Date), AGC completed its acquisition of MBIA UK Insurance Limited (MBIA UK), the U.K. operating subsidiary of MBIA Insurance Corporation (MBIA) (the MBIA UK Acquisition). As consideration for the outstanding shares of MBIA UK plus $23 million in cash, AGC exchanged all its holdings of notes issued in the Zohar II 2005-1 transaction (Zohar II Notes), which were insured by MBIA. AGC’s Zohar II Notes had total outstanding principal of approximately $347 million and fair value of $334 million as of the MBIA UK Acquisition Date. The MBIA UK Acquisition added approximately $12 billion of net par insured on January 10, 2017. MBIA UK was renamed Assured Guaranty (London) Ltd. and on June 1, 2017, was re-registered as a public limited company (plc). Further, AGLN was sold by AGC to AGM and then contributed by AGM to AGE on June 26, 2017. See Note 1, Business and Basis of Presentation for additional information on the Company's European subsidiaries combination. The following table shows the net effect of the MBIA UK Acquisition, including the effects of the settlement of pre-existing relationships. Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships Net effect of Settlement of Pre-existing Relationships Net Effect of MBIA UK Acquisition (in millions) Purchase price (1) $ 334 $ — $ 334 Identifiable assets acquired: Investments 459 — 459 Cash 72 — 72 Premiums receivable, net of commissions payable 274 (4 ) 270 Other assets 16 (6 ) 10 Total assets 821 (10 ) 811 Liabilities assumed: Unearned premium reserves 389 (6 ) 383 Current tax payable 25 — 25 Other liabilities 4 (5 ) (1 ) Total liabilities 418 (11 ) 407 Net assets of MBIA UK 403 1 404 Cash acquired from MBIA Holdings 23 — 23 Deferred tax liability (36 ) — (36 ) Net asset effect of MBIA UK Acquisition 390 1 391 Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax 56 1 57 Deferred tax — 1 1 Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax $ 56 $ 2 $ 58 _____________________ (1) The purchase price of $334 million was allocated as follows: (1) $329 million for the purchase of net assets of $385 million , and (2) the settlement of pre-existing relationships between MBIA UK and Assured Guaranty at a fair value of $5 million The Company believes the bargain purchase gain resulted from MBIA's strategy to address its insurance obligations with regards to the Zohar II Notes, the issuers of which MBIA did not expect would have sufficient funds to repay such notes in full on the scheduled maturity date of such notes in January 2017. Revenue and net income (excluding the effects of subsequent tax reform) related to MBIA UK from the MBIA UK Acquisition Date through December 31, 2017 included in the consolidated statement of operations were approximately $192 million and $139 million , respectively, including the bargain purchase gain, settlement of pre-existing relationships, activity during the year and realized gain on the disposition of AGC's Zohar II Notes. For 2017 , the Company recognized transaction expenses related to the MBIA UK Acquisition of $7 million , comprising primarily legal and financial advisors fees. Unaudited Pro Forma Results of Operations The following unaudited pro forma information presents the combined results of operations of Assured Guaranty and MBIA UK as if the acquisition had been completed on January 1, 2016, as required under GAAP. The pro forma accounts include the estimated historical results of the Company and MBIA UK and pro forma adjustments primarily comprising the earning of the unearned premium reserve and the expected losses that would be recognized in net income for each prior period presented, as well as the accounting for bargain purchase gain, settlement of pre-existing relationships, the realized gain on the disposition of the Zohar II Notes and MBIA UK acquisition related expenses, all net of tax at the applicable statutory rate. The unaudited pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined company had the companies actually been combined as of January 1, 2016, nor is it indicative of the results of operations in future periods. The Company did not include any pro forma combined financial information for 2017 as substantially all of MBIA UK's results of operations for 2017 are included in the year ended December 31, 2017 consolidated statements of operations. Unaudited Pro Forma Results of Operations Year Ended December 31, 2016 (in millions, except per share amounts) Pro forma revenues $ 1,849 Pro forma net income 1,005 Pro forma earnings per share (EPS): Basic 7.55 Diluted 7.49 CIFG Holding Inc. On July 1, 2016, AGC acquired all of the issued and outstanding capital stock of CIFG Holding Inc. (CIFGH, and together with its subsidiaries, CIFG) (the CIFG Acquisition), the parent of financial guaranty insurer CIFG Assurance North America, Inc. (CIFGNA), for $450.6 million in cash. AGUS previously owned 1.6% of the outstanding shares of CIFGH, for which it received $7.1 million in consideration from AGC, resulting in a net consolidated purchase price of $443 million . AGC merged CIFGNA with and into AGC, with AGC as the surviving company, on July 5, 2016. The CIFG Acquisition added $4.2 billion of net par insured on July 1, 2016. At the time of the CIFG Acquisition, CIFGNA had a subsidiary financial guaranty company domiciled in France, CIFGE, which had been put into run-off and surrendered its licenses. CIFGNA had reinsured all of CIFGE’s outstanding financial guaranty business and also had issued a “second-to-pay policy” pursuant to which CIFGNA guaranteed the full and complete payment of any shortfall in amounts due from CIFGE on its insured portfolio; AGC assumed these obligations as part of the CIFGNA merger with and into AGC. CIFGE remains a separate subsidiary in runoff, now indirectly owned by AGM. See Note 1, Business and Basis of Presentation for additional information on the Company's European subsidiaries combination. The following table shows the net effect of the CIFG Acquisition, including the effects of the settlement of pre-existing relationships. Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships Net effect of Settlement of Pre-existing Relationships Net Effect of CIFG Acquisition (in millions) Cash Purchase Price (1) $ 443 $ — $ 443 Identifiable assets acquired: Investments 770 — 770 Cash 8 — 8 Premiums receivable, net of commissions payable 18 — 18 Ceded unearned premium reserve 173 (173 ) — Deferred acquisition costs 1 (1 ) — Salvage and subrogation recoverable 23 — 23 Credit derivative assets 1 — 1 Deferred tax asset, net 194 34 228 Other assets 4 — 4 Total assets 1,192 (140 ) 1,052 Liabilities assumed: Unearned premium reserves 306 (10 ) 296 Loss and loss adjustment expense reserve 1 (66 ) (65 ) Credit derivative liabilities 68 0 68 Other liabilities 17 — 17 Total liabilities 392 (76 ) 316 Net asset effect of CIFG Acquisition 800 (64 ) 736 Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, after-tax 357 (64 ) 293 Deferred tax — (34 ) (34 ) Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, pre-tax $ 357 $ (98 ) $ 259 _____________________ (1) The cash purchase price of $443 million represents the cash transferred for the acquisition which was allocated as follows: (1) $270 million for the purchase of net assets of $627 million , and (2) the settlement of pre-existing relationships between CIFGH and Assured Guaranty at a fair value of $173 million . The bargain purchase gain reflects the fair value of CIFGH’s assets and liabilities, as well as tax attributes that were recorded in deferred taxes comprising net operating losses (NOL) (after Internal Revenue Code change in control provisions) and other temporary book-to-tax differences for which CIFGH had recorded a full valuation allowance. The Company believes the bargain purchase gain resulted from the nature of the financial guaranty business and the desire of investors in CIFGH to monetize their investments in CIFGH. Revenue and net income related to CIFGH from the CIFG Acquisition Date through 2016 included in the consolidated statement of operations were approximately $307 million and $323 million , respectively. For 2016, the Company recognized transaction expenses related to the CIFG Acquisition of $6 million , comprising primarily legal and financial advisors fees. The Company has determined that the presentation of pro forma information is impractical for the CIFG Acquisition as historical financial records are not available on a U.S. GAAP basis. Radian Asset Assurance Inc. On April 1, 2015 (Radian Acquisition Date), AGC completed the acquisition (Radian Asset Acquisition) of all of the issued and outstanding capital stock of financial guaranty insurer Radian Asset Assurance Inc. (Radian Asset) for $804.5 million ; the cash consideration was paid from AGC's available funds and from the proceeds of a $200 million loan from AGC’s direct parent, AGUS. AGC repaid the loan in full to AGUS on April 14, 2015. Radian Asset was merged with and into AGC, with AGC as the surviving company of the merger. The Radian Asset Acquisition added $13.6 billion to the Company's net par outstanding on April 1, 2015. The following table shows the net effect of the Radian Asset Acquisition at the Radian Acquisition Date, including the effects of the settlement of pre-existing relationships. Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships Net effect of Settlement of Pre-existing Relationships Net Effect of Radian Asset Acquisition (in millions) Cash purchase price(1) $ 804 $ — $ 804 Identifiable assets acquired: Investments 1,473 — 1,473 Cash 4 — 4 Ceded unearned premium reserve (3 ) (65 ) (68 ) Credit derivative assets 30 — 30 Deferred tax asset, net 263 (56 ) 207 Financial guaranty variable interest entities’ assets 122 — 122 Other assets 86 (67 ) 19 Total assets 1,975 (188 ) 1,787 Liabilities assumed: Unearned premium reserves 697 (216 ) 481 Credit derivative liabilities 271 (26 ) 245 Financial guaranty variable interest entities’ liabilities 118 — 118 Other liabilities 30 (49 ) (19 ) Total liabilities 1,116 (291 ) 825 Net asset effect of Radian Asset Acquisition 859 103 962 Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, after-tax 55 103 158 Deferred tax — 56 56 Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, pre-tax $ 55 $ 159 $ 214 _____________________ (1) The cash purchase price of $804 million was the cash transferred for the acquisition which was allocated as follows: (1) $987 million for the purchase of net assets of $1,042 million , and (2) the settlement of pre-existing relationships between Radian Asset and Assured Guaranty at a fair value of $ (183) million . The Company believes the bargain purchase resulted from the announced desire of Radian Guaranty Inc. to focus its business strategy on the mortgage and real estate markets and to monetize its investment in Radian Asset and thereby accelerate its ability to comply with the financial requirements of the final Private Mortgage Insurer Eligibility Requirements. Revenue and net income related to Radian Asset from the Radian Acquisition Date through December 31, 2015 included in the consolidated statement of operations were approximately $560 million and $366 million , respectively. For 2015, the Company recognized transaction expenses related to the Radian Asset Acquisition of $12 million , comprising primarily legal and financial advisors fees. Unaudited Pro Forma Results of Operations The following unaudited pro forma information presents the combined results of operations of Assured Guaranty and Radian Asset as if the acquisition had been completed on January 1, 2014, as required under GAAP. The pro forma accounts include the estimated historical results of the Company and Radian Asset and pro forma adjustments primarily comprising the earning of the unearned premium reserve and the expected losses that would be recognized in net income for each prior period presented, as well as the accounting for bargain purchase gain, settlement of pre-existing relationships and Radian Asset acquisition related expenses, all net of tax at the applicable statutory rate. The unaudited pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined company had the companies actually been combined as of January 1, 2014, nor is it indicative of the results of operations in future periods. Unaudited Pro Forma Results of Operations Year Ended December 31, 2015 (in millions, except per share amounts) Pro forma revenues $ 2,030 Pro forma net income 922 Pro forma EPS: Basic 6.22 Diluted 6.18 |
Rating Actions
Rating Actions | 12 Months Ended |
Dec. 31, 2017 | |
Rating Actions [Abstract] | |
Rating Actions | Ratings The financial strength ratings (or similar ratings) for the Company’s insurance companies, along with the date of the most recent rating action (or confirmation) by the rating agency, are shown in the table below. Ratings are subject to continuous rating agency review and revision or withdrawal at any time. In addition, the Company periodically assesses the value of each rating assigned to each of its companies, and as a result of such assessment may request that a rating agency add or drop a rating from certain of its companies. S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC Kroll Bond Rating Agency Moody’s Investors Service, Inc. A.M. Best Company, Inc. AGM AA (stable) (6/26/17) AA+ (stable) (1/23/18) A2 (stable) (8/8/16) — AGC AA (stable) (6/26/17) AA (stable) (12/1/17) (1) — MAC AA (stable) (6/26/17) AA+ (stable) (7/14/17) — — AG Re AA (stable) (6/26/17) — — — AGRO AA (stable) (6/26/17) — — A+ (stable) (6/15/17) AGE AA (stable) (6/26/17) — A2 (stable) (8/8/16) — AGUK AA (stable) (6/26/17) — (1) — AGLN BB (positive) (1/12/17) — (2) — CIFGE — — — — ____________________ (1) AGC requested that Moody’s Investors Service, Inc. (Moody's) withdraw its financial strength ratings of AGC and AGUK in January 2017, but Moody's denied that request. Moody’s continues to rate AGC A3 (stable) and AGUK A3; Moody's put AGUK on review for upgrade on June 27, 2017, following its transfer to AGM. (2) Assured Guaranty did not request that Moody's rate AGLN. Moody's continues to rate AGLN, and upgraded its rating to Baa2 (stable) on January 13, 2017, following its acquisition by AGC, and then to Baa1 on review for further upgrade on June 27, 2017, following its transfer to AGM. There can be no assurance that any of the rating agencies will not take negative action on their financial strength ratings of AGL's insurance subsidiaries in the future. For a discussion of the effects of rating actions on the Company, see Note 6, Contracts Accounted for as Insurance, and Note 13, Reinsurance and Other Monoline Exposures. |
Outstanding Exposure
Outstanding Exposure | 12 Months Ended |
Dec. 31, 2017 | |
Outstanding Exposure Disclosure | |
Outstanding Exposure | Outstanding Exposure The Company primarily writes financial guaranty contracts in insurance form. Until 2009, the Company also wrote some of its financial guaranty contacts in credit derivative form, and has acquired or reinsured portfolios both before and after 2009 that include financial guaranty contracts in credit derivative form. Whether written as an insurance contract or as a credit derivative, the Company considers these financial guaranty contracts. The Company also writes a relatively small amount of non-financial guaranty insurance. The Company seeks to limit its exposure to losses by underwriting obligations that it views as investment grade at inception, although, as part of its loss mitigation strategy for existing troubled exposures, it may underwrite new issuances that it views as BIG. The Company diversifies its insured portfolio across asset classes and, in the structured finance portfolio, requires rigorous subordination or collateralization requirements. Reinsurance may be used in order to reduce net exposure to certain insured transactions. Public finance obligations insured by the Company consist primarily of general obligation bonds supported by the taxing powers of U.S. state or municipal governmental authorities, as well as tax-supported bonds, revenue bonds and other obligations supported by covenants from state or municipal governmental authorities or other municipal obligors to impose and collect fees and charges for public services or specific infrastructure projects. The Company also includes within public finance obligations those obligations backed by the cash flow from leases or other revenues from projects serving substantial public purposes, including utilities, toll roads, health care facilities and government office buildings. The Company also includes within public finance similar obligations issued by territorial and non-U.S. sovereign and sub-sovereign issuers and governmental authorities. Structured finance obligations insured by the Company are generally issued by special purpose entities, including VIEs, and backed by pools of assets having an ascertainable cash flow or market value or other specialized financial obligations. Some of these VIEs are consolidated as described in Note 9, Consolidated Variable Interest Entities. Unless otherwise specified, the outstanding par and debt service amounts presented in this note include outstanding exposures on VIEs whether or not they are consolidated. Significant Risk Management Activities The Portfolio Risk Management Committee, which includes members of senior management and senior risk and surveillance officers, sets specific risk policies and limits and is responsible for enterprise risk management, establishing the Company's risk appetite, credit underwriting of new business, surveillance and work-out. All transactions in the insured portfolio are assigned internal credit ratings, which are updated based on changes in transaction credit quality. As part of the surveillance process, the Company monitors trends and changes in transaction credit quality, and recommends such remedial actions as may be necessary or appropriate. The Company also develops strategies to enforce its contractual rights and remedies and to mitigate its losses, engage in negotiation discussions with transaction participants and, when necessary, manage the Company's litigation proceedings. Surveillance Categories The Company segregates its insured portfolio into investment grade and BIG surveillance categories to facilitate the appropriate allocation of resources to monitoring and loss mitigation efforts and to aid in establishing the appropriate cycle for periodic review for each exposure. BIG exposures include all exposures with internal credit ratings below BBB-. The Company’s internal credit ratings are based on internal assessments of the likelihood of default and loss severity in the event of default. Internal credit ratings are expressed on a ratings scale similar to that used by the rating agencies and are generally reflective of an approach similar to that employed by the rating agencies, except that the Company's internal credit ratings focus on future performance rather than lifetime performance. The Company monitors its insured portfolio and refreshes its internal credit ratings on individual exposures in quarterly, semi-annual or annual cycles based on the Company’s view of the exposure’s quality, loss potential, volatility and sector. Ratings on exposures in sectors identified as under the most stress or with the most potential volatility are reviewed every quarter. For assumed exposures, the Company may use the ceding company’s credit ratings of transactions where it is impractical for it to assign its own rating. Exposures identified as BIG are subjected to further review to determine the probability of a loss. See Note 5, Expected Loss to be Paid, for additional information. Surveillance personnel then assign each BIG transaction to the appropriate BIG surveillance category based upon whether a future loss is expected and whether a claim has been paid. The Company uses a tax-equivalent yield, which reflects long-term trends in interest rates, to calculate the present value of projected payments and recoveries and determine whether a future loss is expected in order to assign the appropriate BIG surveillance category to a transaction. On the other hand, the Company uses risk-free rates, which are determined each quarter, to calculate the expected loss for financial statement measurement purposes. More extensive monitoring and intervention is employed for all BIG surveillance categories, with internal credit ratings reviewed quarterly. The Company expects “future losses” on a transaction when the Company believes there is at least a 50% chance that, on a present value basis, it will pay more claims on that transaction in the future than it will have reimbursed. The three BIG categories are: • BIG Category 1: Below-investment-grade transactions showing sufficient deterioration to make future losses possible, but for which none are currently expected. • BIG Category 2: Below-investment-grade transactions for which future losses are expected but for which no claims (other than liquidity claims, which are claims that the Company expects to be reimbursed within one year) have yet been paid. • BIG Category 3: Below-investment-grade transactions for which future losses are expected and on which claims (other than liquidity claims) have been paid. Unless otherwise noted, ratings disclosed herein on the Company's insured portfolio reflect its internal ratings. The Company classifies those portions of risks benefiting from reimbursement obligations collateralized by eligible assets held in trust in acceptable reimbursement structures as the higher of 'AA' or their current internal rating. Financial Guaranty Exposure The Company purchases securities that it has insured, and for which it has expected losses to be paid, in order to mitigate the economic effect of insured losses (loss mitigation securities). The Company excludes amounts attributable to loss mitigation securities from par and debt service outstanding, which amounts are included in the investment portfolio, because it manages such securities as investments and not insurance exposure. As of December 31, 2017 and December 31, 2016 , the Company excluded $2.0 billion and $2.1 billion , respectively, of net par attributable to loss mitigation securities (which are mostly BIG), and other loss mitigation strategies. The following table presents the gross and net debt service for financial guaranty contracts. Financial Guaranty Debt Service Outstanding Gross Debt Service Outstanding Net Debt Service Outstanding December 31, December 31, December 31, December 31, (in millions) Public finance $ 393,010 $ 425,849 $ 386,092 $ 409,447 Structured finance 15,482 29,151 15,026 28,088 Total financial guaranty $ 408,492 $ 455,000 $ 401,118 $ 437,535 In addition to amounts shown in the tables above, the Company had outstanding commitments to provide guaranties of $69 million as of the date of this filing. The commitments are contingent on the satisfaction of all conditions set forth in them and may expire unused or be canceled at the counterparty’s request. Therefore, the total commitment amount does not necessarily reflect actual future guaranteed amounts. Financial Guaranty Portfolio by Internal Rating As of December 31, 2017 Public Finance Public Finance Non-U.S. Structured Finance U.S Structured Finance Non-U.S Total Rating Net Par % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % (dollars in millions) AAA $ 877 0.4 % $ 2,541 5.9 % $ 1,655 14.7 % $ 319 22.5 % $ 5,392 2.1 % AA 30,016 14.3 205 0.5 3,915 34.9 76 5.4 34,212 12.9 A 118,620 56.7 13,936 32.5 1,630 14.5 210 14.9 134,396 50.7 BBB 52,739 25.2 24,509 57.1 763 6.8 703 49.7 78,714 29.7 BIG 7,140 3.4 1,731 4.0 3,261 29.1 106 7.5 12,238 4.6 Total net par outstanding $ 209,392 100.0 % $ 42,922 100.0 % $ 11,224 100.0 % $ 1,414 100.0 % $ 264,952 100.0 % Financial Guaranty Portfolio by Internal Rating As of December 31, 2016 Public Finance U.S. Public Finance Non-U.S. Structured Finance U.S Structured Finance Non-U.S Total Rating Category Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % (dollars in millions) AAA $ 2,066 0.8 % $ 2,221 8.4 % $ 9,757 44.2 % $ 1,447 47.0 % $ 15,491 5.2 % AA 46,420 19.0 170 0.6 5,773 26.2 127 4.1 52,490 17.7 A 133,829 54.7 6,270 23.8 1,589 7.2 456 14.8 142,144 48.0 BBB 55,103 22.5 16,378 62.1 879 4.0 759 24.6 73,119 24.7 BIG 7,380 3.0 1,342 5.1 4,059 18.4 293 9.5 13,074 4.4 Total net par outstanding $ 244,798 100.0 % $ 26,381 100.0 % $ 22,057 100.0 % $ 3,082 100.0 % $ 296,318 100.0 % Financial Guaranty Portfolio by Sector Gross Par Outstanding Net Par Outstanding Sector As of As of As of As of (in millions) Public finance: U.S.: General obligation $ 91,531 $ 110,167 $ 90,705 $ 107,717 Tax backed 44,783 51,325 44,350 49,931 Municipal utilities 32,584 38,442 32,357 37,603 Transportation 17,193 19,915 17,030 19,403 Healthcare 9,087 11,940 8,763 11,238 Higher education 8,210 10,114 8,195 10,085 Infrastructure finance 4,259 3,902 4,216 3,769 Housing revenue 1,336 1,593 1,319 1,559 Investor-owned utilities 523 697 523 697 Other public finance 1,935 2,810 1,934 2,796 Total public finance—U.S. 211,441 250,905 209,392 244,798 Non-U.S.: Infrastructure finance 18,916 11,818 18,234 10,731 Regulated utilities 17,691 11,395 16,689 9,263 Pooled infrastructure 1,561 1,621 1,561 1,513 Other public finance 6,692 5,653 6,438 4,874 Total public finance—non-U.S. 44,860 30,487 42,922 26,381 Total public finance 256,301 281,392 252,314 271,179 Structured finance: U.S.: Residential Mortgage-Backed Securities (RMBS) 4,864 5,933 4,818 5,637 Consumer receivables 1,591 1,707 1,590 1,652 Insurance securitizations 1,825 2,355 1,449 2,308 Financial products 1,418 1,540 1,418 1,540 Pooled corporate obligations 1,347 10,273 1,347 10,050 Commercial receivables 146 234 146 230 Other structured finance 461 689 456 640 Total structured finance—U.S. 11,652 22,731 11,224 22,057 Non-U.S.: RMBS 655 661 637 604 Commercial receivables 296 373 296 356 Pooled corporate obligations 157 1,716 157 1,535 Other structured finance 325 601 324 587 Total structured finance—non-U.S. 1,433 3,351 1,414 3,082 Total structured finance 13,085 26,082 12,638 25,139 Total net par outstanding $ 269,386 $ 307,474 $ 264,952 $ 296,318 Actual maturities of insured obligations could differ from contractual maturities because borrowers have the right to call or prepay certain obligations. The expected maturities of structured finance obligations are, in general, considerably shorter than the contractual maturities for such obligations. Expected Amortization of Net Par Outstanding As of December 31, 2017 Public Finance Structured Finance Total (in millions) 0 to 5 years $ 78,860 $ 6,106 $ 84,966 5 to 10 years 51,541 2,632 54,173 10 to 15 years 45,634 1,718 47,352 15 to 20 years 34,974 1,892 36,866 20 years and above 41,305 290 41,595 Total net par outstanding $ 252,314 $ 12,638 $ 264,952 Components of BIG Net Par Outstanding As of December 31, 2017 BIG Net Par Outstanding Net Par BIG 1 BIG 2 BIG 3 Total BIG Outstanding (in millions) Public finance: U.S. public finance $ 2,368 $ 663 $ 4,109 $ 7,140 $ 209,392 Non-U.S. public finance 1,455 276 — 1,731 42,922 Public finance 3,823 939 4,109 8,871 252,314 Structured finance: U.S. RMBS 374 304 2,083 2,761 4,818 Triple-X life insurance transactions — — 85 85 1,199 Trust preferred securities (TruPS) 161 — — 161 1,349 Other structured finance 170 118 72 360 5,272 Structured finance 705 422 2,240 3,367 12,638 Total $ 4,528 $ 1,361 $ 6,349 $ 12,238 $ 264,952 Components of BIG Net Par Outstanding As of December 31, 2016 BIG Net Par Outstanding Net Par BIG 1 BIG 2 BIG 3 Total BIG Outstanding (in millions) Public finance: U.S. public finance $ 2,402 $ 3,123 $ 1,855 $ 7,380 $ 244,798 Non-U.S. public finance 1,288 54 — 1,342 26,381 Public finance 3,690 3,177 1,855 8,722 271,179 Structured finance: U.S. RMBS 197 493 2,461 3,151 5,637 Triple-X life insurance transactions — — 126 126 2,057 TruPS 304 126 — 430 1,892 Other structured finance 304 263 78 645 15,553 Structured finance 805 882 2,665 4,352 25,139 Total $ 4,495 $ 4,059 $ 4,520 $ 13,074 $ 296,318 BIG Net Par Outstanding and Number of Risks As of December 31, 2017 Net Par Outstanding Number of Risks(2) Description Financial Guaranty Insurance(1) Credit Derivative Total Financial Guaranty Insurance(1) Credit Derivative Total (dollars in millions) BIG: Category 1 $ 4,301 $ 227 $ 4,528 139 7 146 Category 2 1,344 17 1,361 46 3 49 Category 3 6,255 94 6,349 150 9 159 Total BIG $ 11,900 $ 338 $ 12,238 335 19 354 BIG Net Par Outstanding and Number of Risks As of December 31, 2016 Net Par Outstanding Number of Risks(2) Description Financial Guaranty Insurance(1) Credit Derivative Total Financial Guaranty Insurance(1) Credit Derivative Total (dollars in millions) BIG: Category 1 $ 3,861 $ 634 $ 4,495 165 10 175 Category 2 3,857 202 4,059 79 6 85 Category 3 4,383 137 4,520 148 9 157 Total BIG $ 12,101 $ 973 $ 13,074 392 25 417 _____________________ (1) Includes net par outstanding for VIEs. (2) A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments. The Company seeks to maintain a diversified portfolio of insured obligations designed to spread its risk across a number of geographic areas. Geographic Distribution of Net Par Outstanding As of December 31, 2017 Number of Risks Net Par Outstanding Percent of Total Net Par Outstanding (dollars in millions) U.S.: U.S. Public finance: California 1,368 $ 36,507 13.8 % Texas 1,229 19,027 7.2 Pennsylvania 744 18,061 6.8 Illinois 702 17,044 6.4 New York 871 15,672 5.9 New Jersey 444 12,441 4.7 Florida 294 10,272 3.9 Michigan 439 6,353 2.4 Puerto Rico 18 4,968 1.9 Alabama 296 4,808 1.8 Other 3,112 64,239 24.3 Total U.S. public finance 9,517 209,392 79.1 U.S. Structured finance (multiple states) 512 11,224 4.2 Total U.S. 10,029 220,616 83.3 Non-U.S.: United Kingdom 126 30,062 11.3 France 10 3,167 1.2 Canada 9 2,690 1.0 Australia 12 2,309 0.9 Italy 9 1,497 0.6 Other 44 4,611 1.7 Total non-U.S. 210 44,336 16.7 Total 10,239 $ 264,952 100.0 % Exposure to Puerto Rico The Company has insured exposure to general obligation bonds of the Commonwealth of Puerto Rico (Puerto Rico or the Commonwealth) and various obligations of its related authorities and public corporations aggregating $5.0 billion net par as of December 31, 2017 , all of which is rated BIG. Puerto Rico experienced significant general fund budget deficits and a challenging economic environment since at least the financial crisis. Beginning on January 1, 2016, a number of Puerto Rico exposures have defaulted on bond payments, and the Company has now paid claims on all of its Puerto Rico exposures except for Puerto Rico Aqueduct and Sewer Authority (PRASA), Municipal Finance Agency (MFA) and University of Puerto Rico (U of PR). On November 30, 2015 and December 8, 2015, the former governor of Puerto Rico (the Former Governor) issued executive orders (Clawback Orders) directing the Puerto Rico Department of Treasury and the Puerto Rico Tourism Company to "claw back" certain taxes pledged to secure the payment of bonds issued by the Puerto Rico Highways and Transportation Authority (PRHTA), Puerto Rico Infrastructure Financing Authority (PRIFA), and Puerto Rico Convention Center District Authority (PRCCDA). The Puerto Rico exposures insured by the Company subject to clawback are shown in the table “Puerto Rico Net Par Outstanding” below. On June 30, 2016, the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) was signed into law by the President of the United States. PROMESA established a seven-member federal financial oversight board (Oversight Board) with authority to require that balanced budgets and fiscal plans be adopted and implemented by Puerto Rico. PROMESA provides a legal framework under which the debt of the Commonwealth and its related authorities and public corporations may be voluntarily restructured, and grants the Oversight Board the sole authority to file restructuring petitions in a federal court to restructure the debt of the Commonwealth and its related authorities and public corporations if voluntary negotiations fail, provided that any such restructuring must be in accordance with an Oversight Board approved fiscal plan that respects the liens and priorities provided under Puerto Rico law. In May and July 2017 the Oversight Board filed petitions under Title III of PROMESA with the Federal District Court of Puerto Rico for the Commonwealth, the Puerto Rico Sales Tax Financing Corporation (COFINA), PRHTA, and Puerto Rico Electric Power Authority (PREPA). Title III of PROMESA provides for a process analogous to a voluntary bankruptcy process under chapter 9 of the United States Bankruptcy Code (Bankruptcy Code). Judge Laura Taylor Swain of the Southern District of New York was selected by Chief Justice John Roberts of the United States Supreme Court to preside over any legal proceedings under PROMESA. Judge Swain has selected a team of five federal judges to act as mediators for certain issues and disputes. On September 20, 2017, Hurricane Maria made landfall in Puerto Rico as a Category 4 hurricane on the Saffir-Simpson scale, causing loss of life and widespread devastation in the Commonwealth. Damage to the Commonwealth’s infrastructure, including the power grid, water system and transportation system, was extensive, and rebuilding and economic recovery are expected to take years. While the federal government is expected to provide substantial resources for relief and rebuilding -- which is expected to help economic activity and address the Commonwealth’s infrastructure needs in the intermediate and longer term -- economic activity in general and tourism in particular, as well as tax collections, have declined in the aftermath of the storm, and out migration to the mainland also has increased. In December 2017 the Tax Act was enacted. Many of the provisions under the new law are geared toward increasing production in the U.S. and discouraging companies from having operations or intangibles off-shore. Since Puerto Rico is considered a foreign territory under the U.S. tax system, it is possible the new law may have adverse consequences to Puerto Rico’s economy. However, the Company is unable to predict the full impact of the new law on Puerto Rico. On January 24, 2018, Puerto Rico released new fiscal plans for the Commonwealth, PRASA and PREPA. In response to comments from the Oversight Board and the enactment of a significant federal disaster relief package by the U.S. Congress, Puerto Rico released a further revised Commonwealth fiscal plan on February 12, 2018. The further revised Commonwealth fiscal plan indicates a primary budget surplus of $2.8 billion that would be available for debt service over the six -year forecast period (as compared to contractual debt service of approximately $17.5 billion over the same period). The PREPA fiscal plan is silent as to the treatment of legacy debt and the current governor of Puerto Rico (the Governor) announced an intention to privatize PREPA. The PRASA fiscal plan projects cash flows available for debt service to equal approximately 47% of aggregate debt service during the five -year projection period, based on projection assumptions (including receipt of certain federal funding). The Company believes that a number of the actions taken by the Commonwealth, the Oversight Board and others with respect to obligations the Company insures are illegal or unconstitutional or both, and has taken legal action, and may take additional legal action in the future, to enforce its rights with respect to these matters. See “Puerto Rico Recovery Litigation” below. Litigation and mediation related to the Commonwealth’s debt have been delayed by Hurricane Maria. The final form and timing of responses to Puerto Rico’s financial distress and the devastation of Hurricane Maria eventually taken by the federal government or implemented under the auspices of PROMESA and the Oversight Board or otherwise, and the final impact, after resolution of legal challenges, of any such responses on obligations insured by the Company, are uncertain. The Company groups its Puerto Rico exposure into three categories: • Constitutionally Guaranteed. The Company includes in this category public debt benefiting from Article VI of the Constitution of the Commonwealth, which expressly provides that interest and principal payments on the public debt are to be paid before other disbursements are made. • Public Corporations – Certain Revenues Potentially Subject to Clawback. The Company includes in this category the debt of public corporations for which applicable law permits the Commonwealth to claw back, subject to certain conditions and for the payment of public debt, at least a portion of the revenues supporting the bonds the Company insures. As a constitutional condition to clawback, available Commonwealth revenues for any fiscal year must be insufficient to pay Commonwealth debt service before the payment of any appropriations for that year. The Company believes that this condition has not been satisfied to date, and accordingly that the Commonwealth has not to date been entitled to claw back revenues supporting debt insured by the Company. Prior to the enactment of PROMESA, the Company sued various Puerto Rico governmental officials in the United States District Court, District of Puerto Rico asserting that Puerto Rico's attempt to "claw back" pledged taxes is unconstitutional, and demanding declaratory and injunctive relief. See "Puerto Rico Recovery Litigation" below. • Other Public Corporations. The Company includes in this category the debt of public corporations that are supported by revenues it does not believe are subject to clawback. Constitutionally Guaranteed General Obligation. As of December 31, 2017 , the Company had $1,419 million insured net par outstanding of the general obligations of Puerto Rico, which are supported by the good faith, credit and taxing power of the Commonwealth. Despite the requirements of Article VI of its Constitution, the Commonwealth defaulted on the debt service payment due on July 1, 2016, and the Company has been making claim payments on these bonds since that date. As noted above, the Oversight Board filed a petition under Title III of PROMESA with respect to the Commonwealth. Also as noted above, on February 12, 2018, Puerto Rico released a further revised Commonwealth fiscal plan indicates a primary budget surplus of $2.8 billion that would be available for debt service over the six -year forecast period (as compared to contractual debt service of approximately $17.5 billion over the same period). The Company does not believe the Commonwealth’s fiscal plan in its current form complies with certain mandatory requirements of PROMESA. Puerto Rico Public Buildings Authority (PBA). As of December 31, 2017 , the Company had $141 million insured net par outstanding of PBA bonds, which are supported by a pledge of the rents due under leases of government facilities to departments, agencies, instrumentalities and municipalities of the Commonwealth, and that benefit from a Commonwealth guaranty supported by a pledge of the Commonwealth’s good faith, credit and taxing power. Despite the requirements of Article VI of its Constitution, the PBA defaulted on most of the debt service payment due on July 1, 2016, and the Company has been making claim payments on these bonds since then. Public Corporations - Certain Revenues Potentially Subject to Clawback PRHTA. As of December 31, 2017 , the Company had $882 million insured net par outstanding of PRHTA (transportation revenue) bonds and $495 million insured net par of PRHTA (highways revenue) bonds. The transportation revenue bonds are secured by a subordinate gross lien on gasoline and gas oil and diesel oil taxes, motor vehicle license fees and certain tolls, plus a first lien on up to $120 million annually of taxes on crude oil, unfinished oil and derivative products. The highways revenue bonds are secured by a gross lien on gasoline and gas oil and diesel oil taxes, motor vehicle license fees and certain tolls. The non-toll revenues consisting of excise taxes and fees collected by the Commonwealth on behalf of PRHTA and its bondholders that are statutorily allocated to PRHTA and its bondholders are potentially subject to clawback. Despite the presence of funds in relevant debt service accounts that the Company believes should have been employed to fund debt service, PRHTA defaulted on the full July 1, 2017 insured debt service payment, and the Company has been making claim payments on these bonds since that date. PRCCDA. As of December 31, 2017 , the Company had $152 million insured net par outstanding of PRCCDA bonds, which are secured by certain hotel tax revenues. These revenues are sensitive to the level of economic activity in the area and are potentially subject to clawback. There were sufficient funds in the PRCCDA bond accounts to make only partial payments on the July 1, 2017 PRCCDA bond payments guaranteed by the Company, and the Company has been making claim payments on these bonds since that date. PRIFA. As of December 31, 2017 , the Company had $18 million insured net par outstanding of PRIFA bonds, which are secured primarily by the return to Puerto Rico of federal excise taxes paid on rum. These revenues are potentially subject to the clawback. The Company has been making claim payments in the PRIFA bonds since January 2016. Other Public Corporations PREPA. As of December 31, 2017 , the Company had $853 million insured net par outstanding of PREPA obligations, which are secured by a lien on the revenues of the electric system. On December 24, 2015, AGM and AGC entered into a Restructuring Support Agreement (RSA) with PREPA, an ad hoc group of uninsured bondholders and a group of fuel-line lenders that subject to certain conditions, would have resulted in, among other things, modernization of the utility and a restructuring of current debt. The Oversight Board did not certify the RSA under Title VI of PROMESA as the Company believes was required by PROMESA, but rather, on July 2, 2017, commenced proceedings for PREPA under Title III of PROMESA. The Company has been making claim payments on these bonds since July 1, 2017. As noted above, on January 24, 2018, PREPA released a new fiscal plan that is silent with respect to the treatment of its legacy debt, and the Governor announced an intention to privatize PREPA. The Company believes that a number of the actions taken by the Commonwealth, the Oversight Board and others with respect to the PREPA obligations it insures and the RSA are illegal or unconstitutional or both, and has taken legal action, and may take additional legal action in the future, to enforce its rights with respect to these matters. See “Puerto Rico Recovery Litigation” below. PRASA. As of December 31, 2017 , the Company had $373 million of insured net par outstanding to PRASA bonds, which are secured by a lien on the gross revenues of the water and sewer system. On September 15, 2015, PRASA entered into a settlement with the U.S.Department of Justice and the U.S. Environmental Protection Agency that requires it to spend $1.6 billion to upgrade and improve its sewer system island-wide. The PRASA bond accounts contained sufficient funds to make the PRASA bond payments due through the date of this filing that were guaranteed by the Company, and those payments were made in full. As noted above, on January 24, 2018, PRASA released a new fiscal plan for PRASA that projects cash flows available for debt service to equal approximately 47% of aggregate debt service during the five -year projection period, based on projection assumptions (including receipt of certain federal funding). MFA. As of December 31, 2017 , the Company had $360 million net par outstanding of bonds issued by MFA secured by a lien on local property tax revenues. The MFA bond accounts contained sufficient funds to make the MFA bond payments due through the date of this filing that were guaranteed by the Company, and those payments were made in full. COFINA. As of December 31, 2017 , the Company had $272 million insured net par outstanding of junior COFINA bonds, which are secured primarily by a second lien on certain sales and use taxes. As noted above, the Oversight Board filed a petition on behalf of the Commonwealth under Title III of PROMESA. COFINA bond debt service payments were not made on August 1, 2017, and the Company made its first claim payments on these bonds. The Company has continued to make claim payments on these bonds. U of PR. As of December 31, 2017 , the Company had $1 million insured net par outstanding of U of PR bonds, which are general obligations of the university and are secured by a subordinate lien on the proceeds, profits and other income of the University, subject to a senior pledge and lien for the benefit of outstanding university system revenue bonds. As of the date of this filing, all debt service payments on U of PR bonds insured by the Company have been made. Puerto Rico Recovery Litigation The Company believes that a number of the actions taken by the Commonwealth, the Oversight Board and others with respect to obligations it insures are illegal or unconstitutional or both, and has taken legal action, and may take additional legal action in the future, to enforce its rights with respect to these matters. On January 7, 2016, AGM, AGC and Ambac Assurance Corporation (Ambac) commenced an action for declaratory judgment and injunctive relief in the U.S. District Court for the District of Puerto Rico (Federal District Court in Puerto Rico) to invalidate the executive orders issued by the Former Governor on November 30, 2015 and December 8, 2015 directing that the Secretary of the Treasury of the Commonwealth of Puerto Rico and the Puerto Rico Tourism Company claw back certain taxes and revenues pledged to secure the payment of bonds issued by the PRHTA, the PRCCDA and the PRIFA. The Commonwealth defendants filed a motion to dismiss the action for lack of subject matter jurisdiction, which the Court denied on October 4, 2016. On October 14, 2016, the Commonwealth defendants filed a notice of PROMESA automatic stay. While the PROMESA automatic stay expired on May 1, 2017, on May 17, 2017, the Court stayed the action under Title III of PROMESA. On May 16, 2017, The Bank of New York Mellon, as trustee for the bonds issued by COFINA, filed an adversary complaint for interpleader and declaratory relief with the Federal District Court in Puerto Rico to resolve competing and conflicting demands made by various groups of COFINA bondholders, insurers of certain COFINA Bonds and COFINA, regarding funds held by the trustee for certain COFINA bond debt service payments scheduled to occur on and after June 1, 2017. On May 19, 2017, an order to show cause was entered permitting AGC and AGM to intervene in this matter. While AGM has insured COFINA Bonds, AGC has not. On June 3, 2017, AGC and AGM filed an adversary complaint in Federal District Court in Puerto Rico seeking (i) a judgment declaring that the application of pledged special revenues to the payment of the PRHTA Bonds is not subject to the PROMESA Title III au |
Expected Loss to be Paid
Expected Loss to be Paid | 12 Months Ended |
Dec. 31, 2017 | |
Expected Losses [Abstract] | |
Expected Loss to be Paid | Expected Loss to be Paid Management compiles and analyzes loss information for all exposures on a consistent basis, in order to effectively evaluate and manage the economics and liquidity of the entire insured portfolio. The Company monitors and assigns ratings and calculates expected losses in the same manner for all its exposures regardless of form or differing accounting models. This note provides information regarding expected claim payments to be made under all contracts in the insured portfolio. Expected loss to be paid is important from a liquidity perspective in that it represents the present value of amounts that the Company expects to pay or recover in future periods for all contracts. The expected loss to be paid is equal to the present value of expected future cash outflows for claim and LAE payments, net of inflows for expected salvage and subrogation (e.g., excess spread on the underlying collateral, and estimated recoveries, including those for breaches of representations and warranties (R&W)), using current risk-free rates. Expected cash outflows and inflows are probability weighted cash flows that reflect management's assumptions about the likelihood of all possible outcomes based on all information available to it. Those assumptions consider the relevant facts and circumstances and are consistent with the information tracked and monitored through the Company's risk-management activities. The Company updates the discount rates each quarter and reflects the effect of such changes in economic loss development. Net expected loss to be paid is defined as expected loss to be paid, net of amounts ceded to reinsurers. In circumstances where the Company has purchased its own insured obligations that have expected losses, expected loss to be paid is reduced by the proportionate share of the insured obligation that is held in the investment portfolio. The difference between the purchase price of the obligation and the fair value excluding the value of the Company's insurance is treated as a paid loss. Assets that are purchased by the Company are recorded in the investment portfolio, at fair value excluding the value of the Company's insurance. Additionally, in certain cases, issuers of insured obligations elected, or the Company and an issuer mutually agreed as part of a negotiation, to deliver the underlying collateral or insured obligation to the Company. See Note 10, Investments and Cash and Note 7, Fair Value Measurement. Economic loss development represents the change in net expected loss to be paid attributable to the effects of changes in assumptions based on observed market trends, changes in discount rates, accretion of discount and the economic effects of loss mitigation efforts. The insured portfolio includes policies accounted for under three separate accounting models depending on the characteristics of the contract and the Company's control rights. The three models are: (1) insurance as described in "Financial Guaranty Insurance Losses" in Note 6, Contracts Accounted for as Insurance, (2) derivative as described in Note 7, Fair Value Measurement and Note 8, Contracts Accounted for as Credit Derivatives, and (3) VIE consolidation as described in Note 9, Consolidated Variable Interest Entities. The Company has paid and expects to pay future losses (net of recoveries) on policies which fall under each of the three accounting models. Loss Estimation Process The Company’s loss reserve committees estimate expected loss to be paid for all contracts by reviewing analyses that consider various scenarios with corresponding probabilities assigned to them. Depending upon the nature of the risk, the Company’s view of the potential size of any loss and the information available to the Company, that analysis may be based upon individually developed cash flow models, internal credit rating assessments, sector-driven loss severity assumptions and/or judgmental assessments. In the case of its assumed business, the Company may conduct its own analysis as just described or, depending on the Company’s view of the potential size of any loss and the information available to the Company, the Company may use loss estimates provided by ceding insurers. The Company monitors the performance of its transactions with expected losses and each quarter the Company’s loss reserve committees review and refresh their loss projection assumptions, scenarios and the probabilities they assign to those scenarios based on actual developments during the quarter and their view of future performance. The financial guaranties issued by the Company insure the credit performance of the guaranteed obligations over an extended period of time, in some cases over 30 years , and in most circumstances the Company has no right to cancel such financial guaranties. As a result, the Company's estimate of ultimate losses on a policy is subject to significant uncertainty over the life of the insured transaction. Credit performance can be adversely affected by economic, fiscal and financial market variability over the life of most contracts. The determination of expected loss to be paid is an inherently subjective process involving numerous estimates, assumptions and judgments by management, using both internal and external data sources with regard to frequency, severity of loss, economic projections, governmental actions, negotiations and other factors that affect credit performance. These estimates, assumptions and judgments, and the factors on which they are based, may change materially over a reporting period, and as a result the Company’s loss estimates may change materially over that same period. Changes over a reporting period in the Company’s loss estimates for municipal obligations supported by specified revenue streams, such as revenue bonds issued by toll road authorities, municipal utilities or airport authorities, generally will be influenced by factors impacting their revenue levels, such as changes in demand; changing demographics; and other economic factors, especially if the obligations do not benefit from financial support from other tax revenues or governmental authorities. Changes over a reporting period in the Company’s loss estimates for its tax-supported public finance transactions generally will be influenced by factors impacting the public issuer’s ability and willingness to pay, such as changes in the economy and population of the relevant area; changes in the issuer’s ability or willingness to raise taxes, decrease spending or receive federal assistance; new legislation; rating agency actions that affect the issuer’s ability to refinance maturing obligations or issue new debt at a reasonable cost; changes in the priority or amount of pensions and other obligations owed to workers; developments in restructuring or settlement negotiations; and other political and economic factors. Changes in loss estimates may also be affected by the Company's loss mitigation efforts. Changes in the Company’s loss estimates for structured finance transactions generally will be influenced by factors impacting the performance of the assets supporting those transactions. For example, changes over a reporting period in the Company’s loss estimates for its RMBS transactions may be influenced by such factors as the level and timing of loan defaults experienced; changes in housing prices; results from the Company's loss mitigation activities; and other variables. The Company does not use traditional actuarial approaches to determine its estimates of expected losses. Actual losses will ultimately depend on future events or transaction performance and may be influenced by many interrelated factors that are difficult to predict. As a result, the Company's current projections of losses may be subject to considerable volatility and may not reflect the Company's ultimate claims paid. In some instances, the terms of the Company's policy gives it the option to pay principal losses that have been recognized in the transaction but which it is not yet required to pay, thereby reducing the amount of guaranteed interest due in the future. The Company has sometimes exercised this option, which uses cash but reduces projected future losses. The following tables present a roll forward of net expected loss to be paid for all contracts. The Company used risk-free rates for U.S. dollar denominated obligations that ranged from 0.0% to 2.78% with a weighted average of 2.38% as of December 31, 2017 and 0.0% to 3.23% with a weighted average of 2.73% as of December 31, 2016 . Expected losses to be paid for transactions denominated in currencies other than the U.S. dollar represented approximately 3.7% and 2.8% of the total as of December 31, 2017 and December 31, 2016 , respectively. Net Expected Loss to be Paid Roll Forward Year Ended December 31, 2017 2016 (in millions) Net expected loss to be paid, beginning of period $ 1,198 $ 1,391 Net expected loss to be paid on the MBIA UK portfolio as of January 10, 2017 21 — Net expected loss to be paid on the CIFG portfolio as of July 1, 2016 — 22 Economic loss development (benefit) due to: Accretion of discount 33 26 Changes in discount rates 25 (15 ) Changes in timing and assumptions 255 128 Total economic loss development (benefit) 313 139 Net (paid) recovered losses (229 ) (354 ) Net expected loss to be paid, end of period $ 1,303 $ 1,198 Net Expected Loss to be Paid Roll Forward by Sector Year Ended December 31, 2017 Net Expected Net Expected Economic Loss Development / (Benefit) (Paid) Recovered Losses (1) Net Expected (in millions) Public finance: U.S. public finance $ 871 $ — $ 554 $ (268 ) $ 1,157 Non-U.S. public finance 33 13 (5 ) 5 46 Public finance 904 13 549 (263 ) 1,203 Structured finance: U.S. RMBS 206 — (181 ) 48 73 Other structured finance 88 8 (55 ) (14 ) 27 Structured finance 294 8 (236 ) 34 100 Total $ 1,198 $ 21 $ 313 $ (229 ) $ 1,303 Net Expected Loss to be Paid Roll Forward by Sector Year Ended December 31, 2016 Net Expected Net Expected Economic Loss Development / (Benefit) (Paid) Recovered Losses (1) Net Expected (in millions) Public finance: U.S. public finance $ 771 $ 40 $ 276 $ (216 ) $ 871 Non-U.S. public finance 38 2 (7 ) — 33 Public finance 809 42 269 (216 ) 904 Structured finance: U.S. RMBS 409 (22 ) (91 ) (90 ) 206 Other structured finance 173 2 (39 ) (48 ) 88 Structured finance 582 (20 ) (130 ) (138 ) 294 Total $ 1,391 $ 22 $ 139 $ (354 ) $ 1,198 ____________________ (1) Net of ceded paid losses, whether or not such amounts have been settled with reinsurers. Ceded paid losses are typically settled 45 days after the end of the reporting period. Such amounts are recorded in reinsurance recoverable on paid losses included in other assets. The Company paid $24 million and $16 million in LAE for the years ended December 31, 2017 and 2016 , respectively. (2) Includes expected LAE to be paid of $23 million as of December 31, 2017 and $12 million as of December 31, 2016 . The following table presents the present value of net expected loss to be paid and the net economic loss development for all contracts by accounting model. Net Expected Loss to be Paid (Recovered) and Net Economic Loss Development (Benefit) By Accounting Model Net Expected Loss to be Paid (Recovered) Net Economic Loss Development (Benefit) As of As of Year Ended Year Ended (in millions) Financial guaranty insurance $ 1,226 $ 1,083 $ 353 $ 164 FG VIEs (1) and other 91 105 (6 ) (8 ) Credit derivatives (2) (14 ) 10 (34 ) (17 ) Total $ 1,303 $ 1,198 $ 313 $ 139 ____________________ (1) See Note 9, Consolidated Variable Interest Entities. (2) See Note 8, Contracts Accounted for as Credit Derivatives. Selected U.S. Public Finance Transactions The Company insures general obligation bonds of the Commonwealth of Puerto Rico and various obligations of its related authorities and public corporations aggregating $5.0 billion net par as of December 31, 2017 , all of which are BIG. For additional information regarding the Company's exposure to general obligations of the Commonwealth of Puerto Rico and various obligations of its related authorities and public corporations, see "Exposure to Puerto Rico" in Note 4, Outstanding Exposure. As of December 31, 2017 , the Company has insured $341 million net par outstanding of general obligation bonds issued by the City of Hartford, Connecticut, which has recently experienced financial distress. The Company rates $339 million net par of that BIG, with the remainder being a second-to-pay policy rated investment grade. The mayor of Hartford announced that the city would be unable to meet its financial obligations by early November 2017 if the State of Connecticut failed to enact a budget, and hired bankruptcy consultants. On October 31, 2017, the State adopted a budget providing for substantial payments to the City, placing the City under State oversight and providing an avenue for the City to issue debt backed by the State. While these are welcome developments, the City remains in financial distress and its bonds are still rated BIG by the Company. The Company has approximately $19 million of net par exposure as of December 31, 2017 to bonds issued by Parkway East Public Improvement District (District), which is located in Madison County, Mississippi (the County). The bonds, which are rated BIG, are payable from special assessments on properties within the District, as well as amounts paid under a contribution agreement with the County in which the County covenants that it will provide funds in the event special assessments are not sufficient to make a debt service payment. The special assessments have not been sufficient to pay debt service in full. In earlier years, the County provided funding to cover the balance of the debt service requirement, but subsequently claimed the District’s failure to reimburse it within the two years stipulated in the contribution agreement means that the County is not required to provide funding until it is reimbursed. On May 31, 2017, the United States Court of Appeals for the Fifth Circuit reversed a district court ruling favorable to the Company in its declaratory judgment action disputing the County’s interpretation. See “Recovery Litigation” below. On February 25, 2015, a plan of adjustment resolving the bankruptcy filing of the City of Stockton, California under chapter 9 of the U.S. Bankruptcy Code became effective. As of December 31, 2017 , the Company’s net par subject to the plan consists of $113 million of pension obligation bonds. As part of the plan of adjustment, the City will repay any claims paid on the pension obligation bonds from certain fixed payments and certain variable payments contingent on the City's revenue growth. The Company projects that its total net expected loss across its troubled U.S. public finance exposures as of December 31, 2017 , including those mentioned above, will be $1,157 million , compared with a net expected loss of $871 million as of December 31, 2016 . Economic loss development in 2017 was $554 million , which was primarily attributable to Puerto Rico exposures. Selected Non - U.S. Public Finance Transactions The Company insures and reinsures exposures with sub-sovereign exposure to various Spanish and Portuguese issuers where a Spanish and Portuguese sovereign default may cause the sub-sovereigns also to default. The Company's exposure net of reinsurance to these Spanish and Portuguese exposures is $461 million and $74 million , respectively. The Company rates all of these exposures BIG due to the financial condition of Spain and Portugal and their dependence on the sovereign. The Company's Hungary exposure is to infrastructure bonds dependent on payments from Hungarian governmental entities. The Company's exposure, net of reinsurance, to these Hungarian exposures is $218 million , all of which is rated BIG. As part of the MBIA UK Acquisition, the Company now also insures an obligation backed by the availability and toll revenues of a major arterial road into a city in the U.K. with $222 million of net par outstanding as of December 31, 2017 . This transaction has been underperforming due to lower traffic volume and higher costs compared with expectations at underwriting. These transactions, together with other non-U.S. public finance insured obligations, had expected loss to be paid of $46 million as of December 31, 2017 , compared with $33 million as of December 31, 2016 . The MBIA UK Acquisition added $13 million of net expected loss as of January 2017. The economic benefit of approximately $5 million during 2017 was due mainly to the improved internal outlook of certain European sovereigns and sub-sovereign entities. U.S. RMBS The Company projects losses on its insured U.S. RMBS on a transaction-by-transaction basis by projecting the performance of the underlying pool of mortgages over time and then applying the structural features (i.e., payment priorities and tranching) of the RMBS and any expected R&W recoveries/payables to the projected performance of the collateral over time. The resulting projected claim payments or reimbursements are then discounted using risk-free rates. The further behind a mortgage borrower falls in making payments, the more likely it is that he or she will default. The rate at which borrowers from a particular delinquency category (number of monthly payments behind) eventually default is referred to as the “liquidation rate.” The Company derives its liquidation rate assumptions from observed roll rates, which are the rates at which loans progress from one delinquency category to the next and eventually to default and liquidation. The Company applies liquidation rates to the mortgage loan collateral in each delinquency category and makes certain timing assumptions to project near-term mortgage collateral defaults from loans that are currently delinquent. Mortgage borrowers that are not more than one payment behind (generally considered performing borrowers) have demonstrated an ability and willingness to pay throughout the recession and mortgage crisis, and as a result are viewed as less likely to default than delinquent borrowers. Performing borrowers that eventually default will also need to progress through delinquency categories before any defaults occur. The Company projects how many of the currently performing loans will default and when they will default, by first converting the projected near term defaults of delinquent borrowers derived from liquidation rates into a vector of conditional default rates (CDR), then projecting how the CDR will develop over time. Loans that are defaulted pursuant to the CDR after the near-term liquidation of currently delinquent loans represent defaults of currently performing loans and projected re-performing loans. A CDR is the outstanding principal amount of defaulted loans liquidated in the current month divided by the remaining outstanding amount of the whole pool of loans (or “collateral pool balance”). The collateral pool balance decreases over time as a result of scheduled principal payments, partial and whole principal prepayments, and defaults. In order to derive collateral pool losses from the collateral pool defaults it has projected, the Company applies a loss severity. The loss severity is the amount of loss the transaction experiences on a defaulted loan after the application of net proceeds from the disposal of the underlying property. The Company projects loss severities by sector and vintage based on its experience to date. The Company continues to update its evaluation of these loss severities as new information becomes available. The Company had been enforcing claims for breaches of R&W regarding the characteristics of the loans included in the collateral pools. The Company calculates R&W recoveries and payables to include in its cash flow projections based on its agreements with R&W providers. The Company projects the overall future cash flow from a collateral pool by adjusting the payment stream from the principal and interest contractually due on the underlying mortgages for the collateral losses it projects as described above; assumed voluntary prepayments; and servicer advances. The Company then applies an individual model of the structure of the transaction to the projected future cash flow from that transaction’s collateral pool to project the Company’s future claims and claim reimbursements for that individual transaction. Finally, the projected claims and reimbursements are discounted using risk-free rates. The Company runs several sets of assumptions regarding mortgage collateral performance, or scenarios, and probability weights them. The Company's RMBS loss projection methodology assumes that the housing and mortgage markets will continue improving. Each period the Company makes a judgment as to whether to change the assumptions it uses to make RMBS loss projections based on its observation during the period of the performance of its insured transactions (including early stage delinquencies, late stage delinquencies and loss severity) as well as the residential property market and economy in general, and, to the extent it observes changes, it makes a judgment as whether those changes are normal fluctuations or part of a trend. U.S. RMBS Loss Projections Based on its observation during the period of the performance of its insured transactions (including delinquencies, liquidation rates and loss severities) as well as the residential property market and economy in general, the Company chose to make the changes to the assumptions it uses to project RMBS losses shown in the tables of assumptions in the sections below. In 2017 the economic loss development was $1 million for first lien U.S. RMBS and the economic benefit was $182 million for second lien U.S. RMBS. In 2016 the economic benefit was $68 million for first lien U.S. RMBS and $23 million for second lien U.S. RMBS. U.S. First Lien RMBS Loss Projections: Alt-A First Lien, Option ARM, Subprime and Prime The majority of projected losses in first lien RMBS transactions are expected to come from non-performing mortgage loans (those that are or in the past twelve months have been two or more payments behind, have been modified, are in foreclosure, or have been foreclosed upon). Changes in the amount of non-performing loans from the amount projected in the previous period are one of the primary drivers of loss development in this portfolio. In order to determine the number of defaults resulting from these delinquent and foreclosed loans, the Company applies a liquidation rate assumption to loans in each of various non-performing categories. The Company arrived at its liquidation rates based on data purchased from a third party provider and assumptions about how delays in the foreclosure process and loan modifications may ultimately affect the rate at which loans are liquidated. Each quarter the Company reviews the most recent twelve months of this data and (if necessary) adjusts its liquidation rates based on its observations. The following table shows liquidation assumptions for various non-performing categories. First Lien Liquidation Rates December 31, 2017 December 31, 2016 December 31, 2015 Delinquent/Modified in the Previous 12 Months Alt A and Prime 20% 25% 25% Option ARM 20 25 25 Subprime 20 25 25 30 – 59 Days Delinquent Alt A and Prime 30 35 35 Option ARM 35 35 40 Subprime 40 40 45 60 – 89 Days Delinquent Alt A and Prime 40 45 45 Option ARM 50 50 50 Subprime 50 50 55 90+ Days Delinquent Alt A and Prime 55 55 55 Option ARM 60 55 60 Subprime 55 55 60 Bankruptcy Alt A and Prime 45 45 45 Option ARM 50 50 50 Subprime 40 40 40 Foreclosure Alt A and Prime 65 65 65 Option ARM 70 65 70 Subprime 65 65 70 Real Estate Owned All 100 100 100 While the Company uses liquidation rates as described above to project defaults of non-performing loans (including current loans modified or delinquent within the last 12 months), it projects defaults on presently current loans by applying a CDR trend. The start of that CDR trend is based on the defaults the Company projects will emerge from currently nonperforming, recently nonperforming and modified loans. The total amount of expected defaults from the non-performing loans is translated into a constant CDR ( i.e ., the CDR plateau), which, if applied for each of the next 36 months, would be sufficient to produce approximately the amount of defaults that were calculated to emerge from the various delinquency categories. The CDR thus calculated individually on the delinquent collateral pool for each RMBS is then used as the starting point for the CDR curve used to project defaults of the presently performing loans. In the most heavily weighted scenario (the base case), after the initial 36 -month CDR plateau period, each transaction’s CDR is projected to improve over 12 months to an intermediate CDR (calculated as 20% of its CDR plateau); that intermediate CDR is held constant for 36 months and then trails off in steps to a final CDR of 5% of the CDR plateau. In the base case, the Company assumes the final CDR will be reached 5.5 years after the initial 36 -month CDR plateau period. Under the Company’s methodology, defaults projected to occur in the first 36 months represent defaults that can be attributed to loans that were modified or delinquent in the last 12 months or that are currently delinquent or in foreclosure, while the defaults projected to occur using the projected CDR trend after the first 36 month period represent defaults attributable to borrowers that are currently performing or are projected to reperform. Another important driver of loss projections is loss severity, which is the amount of loss the transaction incurs on a loan after the application of net proceeds from the disposal of the underlying property. Loss severities experienced in first lien transactions have reached historically high levels, and the Company is assuming in the base case that these high levels generally will continue for another 18 months. The Company determines its initial loss severity based on actual recent experience. Each quarter the Company reviews available data and (if necessary) adjusts its severities based on its observations. The Company then assumes that loss severities begin returning to levels consistent with underwriting assumptions beginning after the initial 18 month period, declining to 40% in the base case over 2.5 years . The following table shows the range as well as the average, weighted by outstanding net insured par, for key assumptions used in the calculation of expected loss to be paid for individual transactions for direct vintage 2004 - 2008 first lien U.S. RMBS. Key Assumptions in Base Case Expected Loss Estimates First Lien RMBS As of As of As of Range Weighted Average Range Weighted Average Range Weighted Average Alt-A First Lien Plateau CDR 1.3 % – 9.8% 5.2% 1.0 % – 13.5% 5.7% 1.7 % – 26.4% 6.4% Final CDR 0.1 % – 0.5% 0.3% 0.0 % – 0.7% 0.3% 0.1 % – 1.3% 0.3% Initial loss severity: 2005 and prior 60% 60% 60% 2006 80% 80% 70% 2007+ 70% 70% 65% Option ARM Plateau CDR 2.5 % – 7.0% 5.9% 3.2 % – 7.0% 5.6% 3.5 % – 10.3% 7.8% Final CDR 0.1 % – 0.3% 0.3% 0.2 % – 0.3% 0.3% 0.2 % – 0.5% 0.4% Initial loss severity: 2005 and prior 60% 60% 60% 2006 70% 70% 70% 2007+ 75% 75% 65% Subprime Plateau CDR 3.5 % – 13.1% 7.8% 2.8 % – 14.1% 8.1% 4.7 % – 13.2% 9.5% Final CDR 0.2 % – 0.7% 0.4% 0.1 % – 0.7% 0.4% 0.2 % – 0.7% 0.4% Initial loss severity: 2005 and prior 80% 80% 75% 2006 90% 90% 90% 2007+ 95% 90% 90% The rate at which the principal amount of loans is voluntarily prepaid may impact both the amount of losses projected (since that amount is a function of the CDR, the loss severity and the loan balance over time) as well as the amount of excess spread (the amount by which the interest paid by the borrowers on the underlying loan exceeds the amount of interest owed on the insured obligations). The assumption for the voluntary conditional prepayment rate (CPR) follows a similar pattern to that of the CDR. The current level of voluntary prepayments is assumed to continue for the plateau period before gradually increasing over 12 months to the final CPR, which is assumed to be 15% in the base case. For transactions where the initial CPR is higher than the final CPR, the initial CPR is held constant and the final CPR is not used. These CPR assumptions are the same as those the Company used for December 31, 2016 . In estimating expected losses, the Company modeled and probability weighted sensitivities for first lien transactions by varying its assumptions of how fast a recovery is expected to occur. One of the variables used to model sensitivities was how quickly the CDR returned to its modeled equilibrium, which was defined as 5% of the initial CDR. The Company also stressed CPR and the speed of recovery of loss severity rates. The Company probability weighted a total of five scenarios as of December 31, 2017 . Total expected loss to be paid on all first lien U.S. RMBS was $123 million and $119 million as of December 31, 2017 and December 31, 2016 , respectively. The Company used a similar approach to establish its pessimistic and optimistic scenarios as of December 31, 2017 as it used as of December 31, 2016 , increasing and decreasing the periods of stress from those used in the base case. In the Company's most stressful scenario where loss severities were assumed to rise and then recover over nine years and the initial ramp-down of the CDR was assumed to occur over 15 months, expected loss to be paid would increase from current projections by approximately $71 million for all first lien U.S. RMBS transactions. In the Company's least stressful scenario where the CDR plateau was six months shorter ( 30 months, effectively assuming that liquidation rates would improve) and the CDR recovery was more pronounced, (including an initial ramp-down of the CDR over nine months), expected loss to be paid would decrease from current projections by approximately $51 million for all first lien U.S. RMBS transactions. U.S. Second Lien RMBS Loss Projections Second lien RMBS transactions include both home equity lines of credit (HELOC) and closed end second lien mortgages. The Company believes the primary variable affecting its expected losses in second lien RMBS transactions is the amount and timing of future losses in the collateral pool supporting the transactions. Expected losses are also a function of the structure of the transaction, the voluntary prepayment rate (typically also referred to as CPR of the collateral), the interest rate environment, and assumptions about loss severity. In second lien transactions the projection of near-term defaults from currently delinquent loans is relatively straightforward because loans in second lien transactions are generally “charged off” (treated as defaulted) by the securitization’s servicer once the loan is 180 days past due. The Company estimates the amount of loans that will default over the next six months by calculating current representative liquidation rates. Similar to first liens, the Company then calculates a CDR for six months, which is the period over which the currently delinquent collateral is expected to be liquidated. That CDR is then used as the basis for the plateau CDR period that follows the embedded plateau losses. For the base case scenario, the CDR (the plateau CDR) was held constant for six months. Once the plateau period has ended, the CDR is assumed to gradually trend down in uniform increments to its final long-term steady state CDR. (The long-term steady state CDR is calculated as the constant CDR that would have yielded the amount of losses originally expected at underwriting.) In the base case scenario, the time over which the CDR trends down to its final CDR is 28 months. Therefore, the total stress period for second lien transactions is 34 months, comprising six months of delinquent data and 28 months of decrease to the steady state CDR, the same as of December 31, 2016 . HELOC loans generally permit the borrower to pay only interest for an initial period (often ten years) and, after that period, require the borrower to make both the monthly interest payment and a monthly principal payment. This causes the borrower's total monthly payment to increase, sometimes substantially, at the end of the initial interest-only period. In the prior periods, as the HELOC loans underlying the Company's insured HELOC transactions reached their principal amortization period, the Company incorporated an assumption that a percentage of loans reaching their principal amortization periods would default around the time of the |
Contracts Accounted for as Insu
Contracts Accounted for as Insurance | 12 Months Ended |
Dec. 31, 2017 | |
Insurance [Abstract] | |
Contracts Accounted for as Insurance | Contracts Accounted for as Insurance Premiums The portfolio of outstanding exposures discussed in Note 4, Outstanding Exposure, includes contracts that meet the definition of insurance contracts, contracts that meet the definition of a derivative, and contracts that are accounted for as consolidated FG VIEs. Amounts presented in this note relate to insurance contracts. See Note 8, Contracts Accounted for as Credit Derivatives for amounts that relate to CDS and Note 9, Consolidated Variable Interest Entities for amounts that relate to FG VIEs. Accounting Policies Accounting for financial guaranty contracts that meet the scope exception under derivative accounting guidance are subject to industry specific guidance for financial guaranty insurance. The accounting for contracts that fall under the financial guaranty insurance definition are consistent whether the contract was written on a direct basis, assumed from another financial guarantor under a reinsurance treaty, ceded to another insurer under a reinsurance treaty, or acquired in a business combination. Premiums receivable comprise the present value of contractual or expected future premium collections discounted using risk free rates. Unearned premium reserve represents deferred premium revenue, less claim payments made and recoveries received that have not yet been recognized in the statement of operations (contra-paid). The following discussion relates to the deferred premium revenue component of the unearned premium reserve, while the contra-paid is discussed below under "Financial Guaranty Insurance Losses." The amount of deferred premium revenue at contract inception is determined as follows: • For premiums received upfront on financial guaranty insurance contracts that were originally underwritten by the Company, deferred premium revenue is equal to the amount of cash received. Upfront premiums typically relate to public finance transactions. • For premiums received in installments on financial guaranty insurance contracts that were originally underwritten by the Company, deferred premium revenue is the present value of either (1) contractual premiums due or (2) in cases where the underlying collateral is comprised of homogeneous pools of assets, the expected premiums to be collected over the life of the contract. To be considered a homogeneous pool of assets, prepayments must be contractually allowable, the amount of prepayments must be probable, and the timing and amount of prepayments must be reasonably estimable. When the Company adjusts prepayment assumptions or expected premium collections, an adjustment is recorded to the deferred premium revenue, with a corresponding adjustment to the premium receivable. Premiums receivable are discounted at the risk-free rate at inception and such discount rate is updated only when changes to prepayment assumptions are made that change the expected date of final maturity. Installment premiums typically relate to structured finance transactions, where the insurance premium rate is determined at the inception of the contract but the insured par is subject to prepayment throughout the life of the transaction. • For financial guaranty insurance contracts acquired in a business combination, deferred premium revenue is equal to the fair value of the Company's stand-ready obligation portion of the insurance contract at the date of acquisition based on what a hypothetical similarly rated financial guaranty insurer would have charged for the contract at that date and not the actual cash flows under the insurance contract. The amount of deferred premium revenue may differ significantly from cash collections due primarily to fair value adjustments recorded in connection with a business combination. The Company recognizes deferred premium revenue as earned premium over the contractual period or expected period of the contract in proportion to the amount of insurance protection provided. As premium revenue is recognized, a corresponding decrease to the deferred premium revenue is recorded. The amount of insurance protection provided is a function of the insured principal amount outstanding. Accordingly, the proportionate share of premium revenue recognized in a given reporting period is a constant rate calculated based on the relationship between the insured principal amounts outstanding in the reporting period compared with the sum of each of the insured principal amounts outstanding for all periods. When an insured financial obligation is retired before its maturity, the financial guaranty insurance contract is extinguished. Any nonrefundable deferred premium revenue related to that contract is accelerated and recognized as premium revenue. When a premium receivable balance is deemed uncollectible, it is written off to bad debt expense. For assumed reinsurance contracts, net earned premiums reported in the consolidated statements of operations are calculated based upon data received from ceding companies, however, some ceding companies report premium data between 30 and 90 days after the end of the reporting period. The Company estimates net earned premiums for the lag period. Differences between such estimates and actual amounts are recorded in the period in which the actual amounts are determined. When installment premiums are related to assumed reinsurance contracts, the Company assesses the credit quality and liquidity of the ceding companies and the impact of any potential regulatory constraints to determine the collectability of such amounts. Deferred premium revenue ceded to reinsurers (ceded unearned premium reserve) is recorded as an asset. Direct, assumed and ceded earned premiums are presented together as net earned premiums in the statement of operations, and comprise the following: Net Earned Premiums Year Ended December 31, 2017 2016 2015 (in millions) Scheduled net earned premiums $ 385 $ 381 $ 416 Accelerations Refundings 269 390 294 Terminations 17 79 37 Total Accelerations 286 469 331 Accretion of discount on net premiums receivable 17 14 17 Financial guaranty insurance net earned premiums 688 864 764 Other 2 0 2 Net earned premiums (1) $ 690 $ 864 $ 766 ___________________ (1) Excludes $15 million , $16 million and $21 million for the year ended December 31, 2017 , 2016 and 2015 , respectively, related to consolidated FG VIEs. Gross Premium Receivable, Net of Commissions on Assumed Business Roll Forward Year Ended December 31, 2017 2016 2015 (in millions) December 31, $ 576 $ 693 $ 729 FG insurance Premiums receivable from acquisitions (see Note 2) 270 18 2 Gross written premiums on new business, net of commissions 301 193 198 Gross premiums received, net of commissions (301 ) (258 ) (206 ) Adjustments: Changes in the expected term (8 ) (38 ) (19 ) Accretion of discount, net of commissions on assumed business 12 9 18 Foreign exchange translation 64 (41 ) (25 ) Consolidation/deconsolidation of FG VIEs 0 0 (4 ) Subtotal (1) 914 576 693 Other 1 0 — December 31, $ 915 $ 576 $ 693 ____________________ (1) Excludes $10 million , $11 million and $17 million as of December 31, 2017 , 2016 and 2015 , respectively, related to consolidated FG VIEs. Foreign exchange translation relates to installment premiums receivable denominated in currencies other than the U.S. dollar. As of December 31, 2017 , 72% of installment premiums are denominated in currencies other than the U.S. dollar, primarily the euro and pound sterling. This represents an increase from 50% as of December 31, 2016 , due mainly to the acquisition of MBIA UK. The timing and cumulative amount of actual collections may differ from expected collections in the tables below due to factors such as foreign exchange rate fluctuations, counterparty collectability issues, accelerations, commutations and changes in expected lives. Expected Collections of Financial Guaranty Insurance Gross Premiums Receivable, Net of Commissions on Assumed Business (Undiscounted) As of December 31, 2017 (in millions) 2018 (January 1 – March 31) $ 38 2018 (April 1 – June 30) 31 2018 (July 1 – September 30) 22 2018 (October 1 – December 31) 18 2019 82 2020 78 2021 77 2022 70 2023-2027 289 2028-2032 193 2033-2037 106 After 2037 105 Total(1) $ 1,109 ____________________ (1) Excludes expected cash collections on FG VIEs of $12 million . Scheduled Financial Guaranty Insurance Net Earned Premiums As of December 31, 2017 (in millions) 2018 (January 1 – March 31) $ 89 2018 (April 1 – June 30) 88 2018 (July 1 – September 30) 84 2018 (October 1 – December 31) 82 Subtotal 2018 343 2019 295 2020 266 2021 244 2022 223 2023-2027 866 2028-2032 565 2033-2037 324 After 2037 281 Net deferred premium revenue(1) 3,407 Future accretion 188 Total future net earned premiums $ 3,595 ____________________ (1) Excludes scheduled net earned premiums on consolidated FG VIEs of $76 million , non-financial guaranty business net earned premium of $9 million and contra-paid related to FG VIEs of $17 million . Selected Information for Financial Guaranty Insurance Policies Paid in Installments As of As of (dollars in millions) Premiums receivable, net of commission payable $ 914 $ 576 Gross deferred premium revenue 1,205 1,041 Weighted-average risk-free rate used to discount premiums 2.3 % 3.0 % Weighted-average period of premiums receivable (in years) 9.2 9.1 Financial Guaranty Insurance Acquisition Costs Accounting Policy Policy acquisition costs that are directly related and essential to successful insurance contract acquisition, as well as ceding commission income on ceded reinsurance contracts are deferred and reported net. Amortization of deferred policy acquisition costs includes the accretion of discount on ceding commission receivable and payable. Capitalized policy acquisition costs include expenses such as ceding commission expense on assumed reinsurance contracts and the cost of underwriting personnel attributable to successful underwriting efforts. Ceding commission expense on assumed reinsurance contracts and ceding commission income on ceded reinsurance contracts that are associated with premiums received in installments are calculated at their contractually defined commission rates, discounted consistent with premiums receivable for all future periods, and included in deferred acquisition costs (DAC), with a corresponding offset to net premiums receivable or reinsurance balances payable. Management uses its judgment in determining the type and amount of costs to be deferred. The Company conducts an annual study to determine which operating costs qualify for deferral. Costs incurred for soliciting potential customers, market research, training, administration, unsuccessful acquisition efforts, and product development as well as all overhead type costs are charged to expense as incurred. DAC is amortized in proportion to net earned premiums. When an insured obligation is retired early, the remaining related DAC is recognized at that time. Expected losses and LAE, investment income, and the remaining costs of servicing the insured or reinsured business, are considered in determining the recoverability of DAC. Rollforward of Deferred Acquisition Costs Year Ended December 31, 2017 2016 2015 (in millions) December 31, $ 106 $ 114 $ 121 DAC adjustments from acquisitions (see Note 2) (2 ) 0 1 Costs deferred during the period: Commissions on assumed and ceded business 0 (2 ) (1 ) Premium taxes 5 4 2 Compensation and other acquisition costs 11 9 11 Total 16 11 12 Costs amortized during the period (19 ) (19 ) (20 ) December 31, $ 101 $ 106 $ 114 Financial Guaranty Insurance Losses Accounting Policies Loss and LAE Reserve Loss and LAE reserve reported on the balance sheet relates only to direct and assumed reinsurance contracts that are accounted for as insurance, substantially all of which are financial guaranty insurance contracts. The corresponding reserve ceded to reinsurers is reported as reinsurance recoverable on unpaid losses. As discussed in Note 7, Fair Value Measurement, contracts that meet the definition of a derivative, as well as consolidated FG VIE assets and liabilities, are recorded separately at fair value. Any expected losses related to consolidated FG VIEs are eliminated upon consolidation. Under financial guaranty insurance accounting, the sum of unearned premium reserve and loss and LAE reserve represents the Company's stand‑ready obligation. Unearned premium reserve is deferred premium revenue, less claim payments and recoveries received that have not yet been recognized in the statement of operations (contra-paid). At contract inception, the entire stand-ready obligation is represented by unearned premium reserve. A loss and LAE reserve for an insurance contract is recorded only to the extent, and for the amount, that expected loss to be paid plus contra-paid (“total losses”) exceed the deferred premium revenue, on a contract by contract basis. As a result, the Company has expected loss to be paid that has not yet been expensed. Such amounts will be recognized in future periods as deferred premium revenue amortizes into income. When a claim or LAE payment is made on a contract, it first reduces any recorded loss and LAE reserve. To the extent there is no loss and LAE reserve on a contract, then such claim payment is recorded as “contra-paid,” which reduces the unearned premium reserve. The contra-paid is recognized in the line item “loss and LAE” in the consolidated statement of operations when and for the amount that total losses exceed the remaining deferred premium revenue on the insurance contract. Loss and LAE in the consolidated statement of operations is presented net of cessions to reinsurers. Salvage and Subrogation Recoverable When the Company becomes entitled to the cash flow from the underlying collateral of an insured exposure under salvage and subrogation rights as a result of a claim payment or estimated future claim payment, it reduces the expected loss to be paid on the contract. Such reduction in expected loss to be paid can result in one of the following: • a reduction in the corresponding loss and LAE reserve with a benefit to the income statement, • no entry recorded, if “total loss” is not in excess of deferred premium revenue, or • the recording of a salvage asset with a benefit to the income statement if the transaction is in a net recovery position at the reporting date. The Company recognizes the expected recovery of claim payments (including recoveries from settlement with R&W providers) made by an acquired subsidiary prior to the date of acquisition, consistent with its policy for recognizing recoveries on all financial guaranty insurance contracts. To the extent that the estimated amount of recoveries increases or decreases due to changes in facts and circumstances, the Company would recognize a benefit or expense consistent with how changes in the expected recovery of all other claim payments are recorded. The ceded component of salvage and subrogation recoverable is recorded in the line item reinsurance balances payable. Expected Loss to be Expensed Expected loss to be expensed represents past or expected future net claim payments that have not yet been expensed. Such amounts will be expensed in future periods as deferred premium revenue amortizes into income on financial guaranty insurance policies. Expected loss to be expensed is the Company's projection of incurred losses that will be recognized in future periods, excluding accretion of discount. Insurance Contracts' Loss Information The following table provides information on net reserve (salvage), comprised of loss and LAE reserves and salvage and subrogation recoverable, both net of reinsurance. The Company used risk-free rates for U.S. dollar denominated financial guaranty insurance obligations that ranged from 0.0% to 2.78% with a weighted average of 2.39% as of December 31, 2017 and 0.0% to 3.23% with a weighted average of 2.74% as of December 31, 2016 . Net Reserve (Salvage) As of As of (in millions) Public finance: U.S. public finance $ 901 $ 625 Non-U.S. public finance 21 21 Public finance 922 646 Structured finance: U.S. RMBS (59 ) 21 Other structured finance 40 96 Structured finance (19 ) 117 Subtotal 903 763 Other recoverable (payable) (4 ) 1 Subtotal 899 764 Elimination of losses attributable to FG VIEs (55 ) (64 ) Total $ 844 $ 700 Components of Net Reserves (Salvage) As of As of (in millions) Loss and LAE reserve $ 1,444 $ 1,127 Reinsurance recoverable on unpaid losses (44 ) (80 ) Loss and LAE reserve, net 1,400 1,047 Salvage and subrogation recoverable (572 ) (365 ) Salvage and subrogation payable(1) 20 17 Other payable (recoverable) (4 ) 1 Salvage and subrogation recoverable, net, and other recoverable (556 ) (347 ) Net reserves (salvage) $ 844 $ 700 ____________________ (1) Recorded as a component of reinsurance balances payable. The table below provides a reconciliation of net expected loss to be paid to net expected loss to be expensed. Expected loss to be paid differs from expected loss to be expensed due to: (i) the contra-paid which represent the claim payments made and recoveries received that have not yet been recognized in the statement of operations, (ii) salvage and subrogation recoverable for transactions that are in a net recovery position where the Company has not yet received recoveries on claims previously paid (and therefore recognized in income but not yet received), and (iii) loss reserves that have already been established (and therefore expensed but not yet paid). Reconciliation of Net Expected Loss to be Paid and Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts As of (in millions) Net expected loss to be paid - financial guaranty insurance (1) $ 1,226 Contra-paid, net 59 Salvage and subrogation recoverable, net of reinsurance 552 Loss and LAE reserve - financial guaranty insurance contracts, net of reinsurance (1,399 ) Other recoverable (payable) 4 Net expected loss to be expensed (present value) (2) $ 442 ____________________ (1) See "Net Expected Loss to be Paid (Recovered) by Accounting Model" table in Note 5, Expected Loss to be Paid. (2) Excludes $52 million as of December 31, 2017 related to consolidated FG VIEs. The following table provides a schedule of the expected timing of net expected losses to be expensed. The amount and timing of actual loss and LAE may differ from the estimates shown below due to factors such as accelerations, commutations, changes in expected lives and updates to loss estimates. This table excludes amounts related to FG VIEs, which are eliminated in consolidation. Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts As of (in millions) 2018 (January 1 – March 31) $ 8 2018 (April 1 – June 30) 9 2018 (July 1 – September 30) 10 2018 (October 1 – December 31) 10 Subtotal 2018 37 2019 42 2020 39 2021 35 2022 32 2023-2027 131 2028-2032 78 2033-2037 36 After 2037 12 Net expected loss to be expensed 442 Future accretion 88 Total expected future loss and LAE $ 530 The following table presents the loss and LAE recorded in the consolidated statements of operations by sector for insurance contracts. Amounts presented are net of reinsurance. Loss and LAE Reported on the Consolidated Statements of Operations Year Ended December 31, 2017 2016 2015 (in millions) Public finance: U.S. public finance $ 553 $ 307 $ 392 Non-U.S. public finance (4 ) (3 ) 1 Public finance 549 304 393 Structured finance: U.S. RMBS (106 ) 37 54 Other structured finance (48 ) (39 ) 5 Structured finance (154 ) (2 ) 59 Loss and LAE on insurance contracts before FG VIE consolidation 395 302 452 Gain (loss) related to FG VIE consolidation (7 ) (7 ) (28 ) Loss and LAE $ 388 $ 295 $ 424 The following table provides information on financial guaranty insurance contracts categorized as BIG. Financial Guaranty Insurance BIG Transaction Loss Summary As of December 31, 2017 BIG Categories BIG 1 BIG 2 BIG 3 Total BIG, Net Effect of Consolidating FG VIEs Total Gross Ceded Gross Ceded Gross Ceded (dollars in millions) Number of risks(1) 139 (22 ) 46 (3 ) 150 (41 ) 335 — 335 Remaining weighted-average contract period (in years) 8.9 7.3 14.0 2.9 9.6 9.3 9.9 — 9.9 Outstanding exposure: Principal $ 4,397 $ (96 ) $ 1,352 $ (8 ) $ 6,445 $ (190 ) $ 11,900 $ — $ 11,900 Interest 2,110 (42 ) 1,002 (1 ) 3,098 (86 ) 6,081 — 6,081 Total(2) $ 6,507 $ (138 ) $ 2,354 $ (9 ) $ 9,543 $ (276 ) $ 17,981 $ — $ 17,981 Expected cash outflows (inflows) $ 186 $ (5 ) $ 492 $ (1 ) $ 3,785 $ (104 ) $ 4,353 $ (307 ) $ 4,046 Potential recoveries(3) (595 ) 20 (145 ) 0 (2,273 ) 67 $ (2,926 ) 194 (2,732 ) Subtotal (409 ) 15 347 (1 ) 1,512 (37 ) 1,427 (113 ) 1,314 Discount 66 (4 ) (93 ) 0 (78 ) (2 ) (111 ) 23 (88 ) Present value of expected cash flows $ (343 ) $ 11 $ 254 $ (1 ) $ 1,434 $ (39 ) $ 1,316 $ (90 ) $ 1,226 Deferred premium revenue $ 112 $ (5 ) $ 129 $ 0 $ 540 $ (6 ) $ 770 $ (74 ) $ 696 Reserves (salvage) $ (380 ) $ 11 $ 202 $ (1 ) $ 1,100 $ (34 ) $ 898 $ (55 ) $ 843 Financial Guaranty Insurance BIG Transaction Loss Summary As of December 31, 2016 BIG Categories BIG 1 BIG 2 BIG 3 Total BIG, Net Effect of Consolidating FG VIEs Total Gross Ceded Gross Ceded Gross Ceded (dollars in millions) Number of risks(1) 165 (35 ) 79 (11 ) 148 (49 ) 392 — 392 Remaining weighted-average contract period (in years) 8.6 7.0 13.2 10.5 8.1 6.0 10.1 — 10.1 Outstanding exposure: Principal $ 4,187 $ (326 ) $ 4,273 $ (416 ) $ 4,703 $ (320 ) $ 12,101 $ — $ 12,101 Interest 1,932 (140 ) 2,926 (219 ) 1,867 (87 ) 6,279 — 6,279 Total(2) $ 6,119 $ (466 ) $ 7,199 $ (635 ) $ 6,570 $ (407 ) $ 18,380 $ — $ 18,380 Expected cash outflows (inflows) 172 (19 ) 1,404 (86 ) 1,435 (65 ) 2,841 (326 ) 2,515 Potential recoveries(3) (440 ) 23 (146 ) 4 (743 ) 45 (1,257 ) 198 (1,059 ) Subtotal (268 ) 4 1,258 (82 ) 692 (20 ) 1,584 (128 ) 1,456 Discount 61 (4 ) (355 ) 19 (114 ) (4 ) (397 ) 24 (373 ) Present value of expected cash flows (207 ) 0 903 (63 ) 578 (24 ) 1,187 (104 ) 1,083 Deferred premium revenue $ 131 $ (5 ) $ 246 $ (6 ) $ 476 $ (30 ) $ 812 $ (86 ) $ 726 Reserves (salvage) $ (255 ) $ 5 $ 738 $ (58 ) $ 343 $ (10 ) $ 763 $ (64 ) $ 699 ____________________ (1) A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments. The ceded number of risks represents the number of risks for which the Company ceded a portion of its exposure. (2) Includes BIG amounts related to FG VIEs. (3) Includes excess spread and R&W receivables and payables. Ratings Impact on Financial Guaranty Business A downgrade of one of AGL’s insurance subsidiaries may result in increased claims under financial guaranties issued by the Company, if the insured obligors were unable to pay. For example, AGM has issued financial guaranty insurance policies in respect of the obligations of municipal obligors under interest rate swaps. AGM insures periodic payments owed by the municipal obligors to the bank counterparties. In certain cases, AGM also insures termination payments that may be owed by the municipal obligors to the bank counterparties. If (i) AGM has been downgraded below the rating trigger set forth in a swap under which it has insured the termination payment, which rating trigger varies on a transaction by transaction basis; (ii) the municipal obligor has the right to cure by, but has failed in, posting collateral, replacing AGM or otherwise curing the downgrade of AGM; (iii) the transaction documents include as a condition that an event of default or termination event with respect to the municipal obligor has occurred, such as the rating of the municipal obligor being downgraded past a specified level, and such condition has been met; (iv) the bank counterparty has elected to terminate the swap; (v) a termination payment is payable by the municipal obligor; and (vi) the municipal obligor has failed to make the termination payment payable by it, then AGM would be required to pay the termination payment due by the municipal obligor, in an amount not to exceed the policy limit set forth in the financial guaranty insurance policy. At AGM's current financial strength ratings, if the conditions giving rise to the obligation of AGM to make a termination payment under the swap termination policies were all satisfied, then AGM could pay claims in an amount not exceeding approximately $133 million in respect of such termination payments. Taking into consideration whether the rating of the municipal obligor is below any applicable specified trigger, if the financial strength ratings of AGM were further downgraded below "A" by S&P or below "A2" by Moody's, and the conditions giving rise to the obligation of AGM to make a payment under the swap policies were all satisfied, then AGM could pay claims in an additional amount not exceeding approximately $260 million in respect of such termination payments. As another example, with respect to variable rate demand obligations (VRDOs) for which a bank has agreed to provide a liquidity facility, a downgrade of AGM or AGC may provide the bank with the right to give notice to bondholders that the bank will terminate the liquidity facility, causing the bondholders to tender their bonds to the bank. Bonds held by the bank accrue interest at a “bank bond rate” that is higher than the rate otherwise borne by the bond (typically the prime rate plus 2.00% — 3.00% , and capped at the lesser of 25% and the maximum legal limit). In the event the bank holds such bonds for longer than a specified period of time, usually 90 - 180 days , the bank has the right to demand accelerated repayment of bond principal, usually through payment of equal installments over a period of not less than five years . In the event that a municipal obligor is unable to pay interest accruing at the bank bond rate or to pay principal during the shortened amortization period, a claim could be submitted to AGM or AGC under its financial guaranty policy. As of December 31, 2017 , AGM and AGC had insured approximately $3.7 billion net par of VRDOs, of which approximately $0.1 billion of net par constituted VRDOs issued by municipal obligors rated BBB- or lower pursuant to the Company’s internal rating. The specific terms relating to the rating levels that trigger the bank’s termination right, and whether it is triggered by a downgrade by one rating agency or a downgrade by all rating agencies then rating the insurer, vary depending on the transaction. In addition, AGM may be required to pay claims in respect of AGMH’s former financial products business if Dexia SA and its affiliates, from which the Company had purchased AGMH and its subsidiaries, do not comply with their obligations following a downgrade of the financial strength rating of AGM. A downgrade of the financial strength rating of AGM could trigger a payment obligation of AGM in respect to AGMH's former guaranteed investment contracts (GIC) business. Most GICs insured by AGM allow for the termination of the GIC contract and a withdrawal of GIC funds at the option of the GIC holder in the event of a downgrade of AGM below a specified threshold, generally below A- by S&P or A3 by Moody's. AGMH's former subsidiary FSA Asset Management LLC is expected to have sufficient eligible and liquid assets to satisfy any expected withdrawal and collateral posting obligations resulting from future rating actions affecting AGM. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The Company carries a significant portion of its assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., exit price). The price represents the price available in the principal market for the asset or liability. If there is no principal market, then the price is based on a hypothetical market that maximizes the value received for an asset or minimizes the amount paid for a liability (i.e., the most advantageous market). Fair value is based on quoted market prices, where available. If listed prices or quotes are not available, fair value is based on either internally developed models that primarily use, as inputs, market-based or independently sourced market parameters, including but not limited to yield curves, interest rates and debt prices or with the assistance of an independent third-party using a discounted cash flow approach and the third party’s proprietary pricing models. In addition to market information, models also incorporate transaction details, such as maturity of the instrument and contractual features designed to reduce the Company’s credit exposure, such as collateral rights as applicable. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments include amounts to reflect counterparty credit quality, the Company’s creditworthiness and constraints on liquidity. As markets and products develop and the pricing for certain products becomes more or less transparent, the Company may refine its methodologies and assumptions. During 2017 , no changes were made to the Company’s valuation models that had or are expected to have, a material impact on the Company’s consolidated balance sheets or statements of operations and comprehensive income. The Company’s methods for calculating fair value produce a fair value that may not be indicative of net realizable value or reflective of future fair values. The use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The categorization within the fair value hierarchy is determined based on whether the inputs to valuation techniques used to measure fair value are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Company estimates of market assumptions. The fair value hierarchy prioritizes model inputs into three broad levels as follows, with Level 1 being the highest and Level 3 the lowest. An asset's or liability’s categorization is based on the lowest level of significant input to its valuation. Level 1—Quoted prices for identical instruments in active markets. The Company generally defines an active market as a market in which trading occurs at significant volumes. Active markets generally are more liquid and have a lower bid-ask spread than an inactive market. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and observable inputs other than quoted prices, such as interest rates or yield curves and other inputs derived from or corroborated by observable market inputs. Level 3—Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation. Transfers between Levels 1, 2 and 3 are recognized at the end of the period when the transfer occurs. The Company reviews the classification between Levels 1, 2 and 3 quarterly to determine whether a transfer is necessary. During the periods presented, there were no transfers between Level 1 and Level 2. There was a transfer of a fixed-maturity security from Level 2 into Level 3 during 2017 because starting in the second quarter of 2017 the price of the security includes a significant unobservable assumption. There were transfers of fixed-maturity securities from Level 2 into Level 3 during 2016 because of a lack of observability relating to the valuation inputs and collateral pricing. Measured and Carried at Fair Value Fixed-Maturity Securities and Short-Term Investments The fair value of bonds in the investment portfolio is generally based on prices received from third party pricing services or alternative pricing sources with reasonable levels of price transparency. The pricing services prepare estimates of fair value measurements using their pricing models, which take into account: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, industry and economic events and sector groupings. Additional valuation factors that can be taken into account are nominal spreads and liquidity adjustments. The pricing services evaluate each asset class based on relevant market and credit information, perceived market movements, and sector news. Benchmark yields have in many cases taken priority over reported trades for securities that trade less frequently or those that are distressed trades, and therefore may not be indicative of the market. The extent of the use of each input is dependent on the asset class and the market conditions. The valuation of fixed-maturity investments is more subjective when markets are less liquid due to the lack of market based inputs. Short-term investments, that are traded in active markets, are classified within Level 1 in the fair value hierarchy and their value is based on quoted market prices. Securities such as discount notes are classified within Level 2 because these securities are typically not actively traded due to their approaching maturity and, as such, their cost approximates fair value. Annually, the Company reviews each pricing service’s procedures, controls and models, as well as the competency of the pricing service’s key personnel. In addition, on a quarterly basis, the Company holds a meeting of the internal valuation committee (comprised of individuals within the Company with market, valuation, accounting, and/or finance experience) that reviews and approves prices and assumptions used by the pricing services. The Company, on a quarterly basis: • reviews methodologies for Level 3 securities, any model updates and inputs for Level 3 securities, and compares such information to management’s own market information and, where applicable, the internal models, • reviews internally developed analytic packages for all securities that highlight, at a CUSIP level, price changes from the previous quarter to the current quarter, and evaluates, documents, and resolves any significant pricing differences with the assistance of the third party pricing source, and • compares prices received from different third party pricing sources for Level 3, and evaluates, documents the rationale for, and resolves any significant pricing differences for Level 3. As of December 31, 2017 , the Company used models to price 93 securities (primarily securities that were purchased or obtained for loss mitigation or other risk management purposes), which were 11% or $1,265 million of the Company’s fixed-maturity securities and short-term investments at fair value. Most Level 3 securities were priced with the assistance of an independent third-party. The pricing is based on a discounted cash flow approach using the third-party’s proprietary pricing models. The models use inputs such as projected prepayment speeds; severity assumptions; recovery lag assumptions; estimated default rates (determined on the basis of an analysis of collateral attributes, historical collateral performance, borrower profiles and other features relevant to the evaluation of collateral credit quality); home price appreciation/depreciation rates based on macroeconomic forecasts and recent trading activity. The yield used to discount the projected cash flows is determined by reviewing various attributes of the bond including collateral type, weighted average life, sensitivity to losses, vintage, and convexity, in conjunction with market data on comparable securities. Significant changes to any of these inputs could materially change the expected timing of cash flows within these securities which is a significant factor in determining the fair value of the securities. Other Invested Assets As of December 31, 2017 and December 31, 2016 , other invested assets include investments carried and measured at fair value on a recurring basis of $48 million and $52 million , respectively, and include primarily an investment in the global property catastrophe risk market and an investment in a fund that invests primarily in senior loans and bonds. Fair values for the majority of these investments are based on their respective net asset value (NAV) per share or equivalent. Other Assets Committed Capital Securities The fair value of committed capital securities (CCS), which is recorded in “other assets” on the consolidated balance sheets, represents the difference between the present value of remaining expected put option premium payments under AGC’s CCS (the AGC CCS) and AGM’s Committed Preferred Trust Securities (the AGM CPS) agreements, and the estimated present value that the Company would hypothetically have to pay currently for a comparable security (see Note 16, Long Term Debt and Credit Facilities). The AGC CCS and AGM CPS are carried at fair value with changes in fair value recorded in the consolidated statement of operations. The estimated current cost of the Company’s CCS is based on several factors, including AGM and AGC CDS spreads, London Interbank Offered Rate (LIBOR) curve projections, the Company's publicly traded debt and the term the securities are estimated to remain outstanding. Supplemental Executive Retirement Plans The Company classifies the fair value measurement of the assets of the Company's various supplemental executive retirement plans as either Level 1 or Level 2. The fair value of these assets is valued based on the observable published daily values of the underlying mutual fund included in the aforementioned plans (Level 1) or based upon the NAV of the funds if a published daily value is not available (Level 2). The NAV's are based on observable information. Contracts Accounted for as Credit Derivatives The Company’s credit derivatives consist primarily of insured CDS contracts, and also include interest rate swaps that fall under derivative accounting standards requiring fair value accounting through the statement of operations. The following is a description of the fair value methodology applied to the Company's insured CDS that are accounted for as credit derivatives, which constitute the vast majority of the net credit derivative liability in the consolidated balance sheets. The Company did not enter into CDS with the intent to trade these contracts and the Company may not unilaterally terminate a CDS contract absent an event of default or termination event that entitles the Company to terminate such contracts; however, the Company has mutually agreed with various counterparties to terminate certain CDS transactions. In transactions where the counterparty does not have the right to terminate, such transactions are generally terminated for an amount that approximates the present value of future premiums or for a negotiated amount, rather than at fair value. The terms of the Company’s CDS contracts differ from more standardized credit derivative contracts sold by companies outside the financial guaranty industry. The non-standard terms generally include the absence of collateral support agreements or immediate settlement provisions. In addition, the Company employs relatively high attachment points and does not exit derivatives it sells, except under specific circumstances such as mutual agreements with counterparties. Management considers the non-standard terms of its credit derivative contracts in determining the fair value of these contracts. Due to the lack of quoted prices and other observable inputs for its instruments or for similar instruments, the Company determines the fair value of its credit derivative contracts primarily through internally developed, proprietary models that use both observable and unobservable market data inputs. There is no established market where financial guaranty insured credit derivatives are actively traded, therefore, management has determined that the exit market for the Company’s credit derivatives is a hypothetical one based on its entry market. Management has tracked the historical pricing of the Company’s transactions to establish historical price points in the hypothetical market that are used in the fair value calculation. These contracts are classified as Level 3 in the fair value hierarchy since there is reliance on at least one unobservable input deemed significant to the valuation model, most importantly the Company’s estimate of the value of the non-standard terms and conditions of its credit derivative contracts and how the Company’s own credit spread affects the pricing of its transactions. The fair value of the Company’s credit derivative contracts represents the difference between the present value of remaining premiums the Company expects to receive or pay and the estimated present value of premiums that a financial guarantor of comparable credit-worthiness would hypothetically charge or pay at the reporting date for the same protection. The fair value of the Company’s credit derivatives depends on a number of factors, including notional amount of the contract, expected term, credit spreads, changes in interest rates, the credit ratings of referenced entities, the Company’s own credit risk and remaining contractual cash flows. The expected remaining contractual premium cash flows are the most readily observable inputs since they are based on the CDS contractual terms. Credit spreads capture the effect of recovery rates and performance of underlying assets of these contracts, among other factors. Consistent with previous years, market conditions at December 31, 2017 were such that market prices of the Company’s CDS contracts were not available. Assumptions and Inputs The various inputs and assumptions that are key to the establishment of the Company’s fair value for CDS contracts are as follows: the gross spread, the allocation of gross spread among the bank profit, net spread and hedge cost, and the weighted average life which is based on debt service schedules. The Company obtains gross spreads on its outstanding contracts from market data sources published by third parties (e.g., dealer spread tables for the collateral similar to assets within the Company’s transactions), as well as collateral-specific spreads provided by trustees or obtained from market sources. The bank profit represents the profit the originator, usually an investment bank, realizes for structuring and funding the transaction; the net spread represents the premiums paid to the Company for the Company’s credit protection provided; and the hedge cost represents the cost of CDS protection purchased by the originator to hedge its counterparty credit risk exposure to the Company. With respect to CDS transactions for which there is an expected claim payment within the next twelve months, the allocation of gross spread reflects a higher allocation to the cost of credit rather than the bank profit component. In the current market, it is assumed that a bank would be willing to accept a lower profit on distressed transactions in order to remove these transactions from its financial statements. The following spread hierarchy is utilized in determining which source of gross spread to use. Market sources determine credit spreads by reviewing new issuance pricing for specific asset classes and receiving price quotes from their trading desks for the specific asset in question. Management validates these quotes by cross-referencing quotes received from one market source against quotes received from another market source to ensure reasonableness. In addition, the Company compares the relative change in price quotes received from one quarter to another, with the relative change experienced by published market indices for a specific asset class. Collateral specific spreads obtained from third-party, independent market sources are un-published spread quotes from market participants or market traders who are not trustees. Management obtains this information as the result of direct communication with these sources as part of the valuation process. • Actual collateral specific credit spreads (if up-to-date and reliable market-based spreads are available). • Transactions priced or closed during a specific quarter within a specific asset class and specific rating. No transactions closed during the periods presented. • Credit spreads interpolated based upon market indices adjusted to reflect the non-standard terms of the Company's CDS contracts. • Credit spreads provided by the counterparty of the CDS. • Credit spreads extrapolated based upon transactions of similar asset classes, similar ratings, and similar time to maturity. Information by Credit Spread Type (1) As of As of Based on actual collateral specific spreads 14 % 7 % Based on market indices 48 % 77 % Provided by the CDS counterparty 38 % 16 % Total 100 % 100 % ____________________ (1) Based on par. The shift in sources of credit spreads away from market indices was a function of the run-off of collateralized loan obligations (CLOs) and synthetic CLO exposures during the period which had priced using market indices in the past. The rates used to discount future expected premium cash flows ranged from 1.72% to 2.55% at December 31, 2017 and 1.00% to 2.55% at December 31, 2016 . The Company interpolates a curve based on the historical relationship between the premium the Company receives when a credit derivative is closed to the daily closing price of the market index related to the specific asset class and rating of the transaction. This curve indicates expected credit spreads at each indicative level on the related market index. For transactions with unique terms or characteristics where no price quotes are available, management extrapolates credit spreads based on a similar transaction for which the Company has received a spread quote from one of the first three sources within the Company’s spread hierarchy. This alternative transaction will be within the same asset class, have similar underlying assets, similar credit ratings, and similar time to maturity. The Company then calculates the percentage of relative spread change quarter over quarter for the alternative transaction. This percentage change is then applied to the historical credit spread of the transaction for which no price quote was received in order to calculate the transaction's current spread. The premium the Company receives is referred to as the “net spread.” The Company’s pricing model takes into account not only how credit spreads on risks that it assumes affect pricing, but also how the Company’s own credit spread affects the pricing of its transactions. The Company’s own credit risk is factored into the determination of net spread based on the impact of changes in the quoted market price for credit protection bought on the Company, as reflected by quoted market prices on CDS referencing AGC or AGM. For credit spreads on the Company’s name the Company obtains the quoted price of CDS contracts traded on AGC and AGM from market data sources published by third parties. The cost to acquire CDS protection referencing AGC or AGM affects the amount of spread on CDS transactions that the Company retains and, hence, their fair value. As the cost to acquire CDS protection referencing AGC or AGM increases, the amount of premium the Company retains on a transaction generally decreases. In the Company’s valuation model, the premium the Company captures is not permitted to go below the minimum rate that the Company would currently charge to assume similar risks. This assumption can have the effect of mitigating the amount of unrealized gains that are recognized on certain CDS contracts. Given the current market conditions and the Company’s own credit spreads, approximately 16% and 19% based on fair value, of the Company's CDS contracts are fair valued using this minimum premium as of December 31, 2017 and December 31, 2016 , respectively. The percentage of transactions that price using the minimum premiums fluctuates due to changes in AGC's credit spreads. In general when AGC's credit spreads narrow, the cost to hedge AGC's name declines and more transactions price above previously established floor levels. Meanwhile, when AGC's credit spreads widen, the cost to hedge AGC's name increases causing more transactions to price at previously established floor levels. Due to the low volume of CDS contracts remaining in AGM's portfolio, changes in AGM's credit spreads do not significantly affect the overall percentage of transactions fair valued using the minimum premium. The Company corroborates the assumptions in its fair value model, including the portion of exposure to AGC and AGM hedged by its counterparties, with independent third parties each reporting period. The current level of AGC’s and AGM’s own credit spread has resulted in the bank or transaction originator hedging a significant portion of its exposure to AGC and AGM. This reduces the amount of contractual cash flows AGC and AGM can capture as premium for selling its protection. The amount of premium a financial guaranty insurance market participant can demand is inversely related to the cost of credit protection on the insurance company as measured by market credit spreads assuming all other assumptions remain constant. This is because the buyers of credit protection typically hedge a portion of their risk to the financial guarantor, due to the fact that the contractual terms of the Company's contracts typically do not require the posting of collateral by the guarantor. The extent of the hedge depends on the types of instruments insured and the current market conditions. A credit derivative liability on protection sold is the result of contractual cash inflows on in-force transactions that are less than what a hypothetical financial guarantor could receive if it sold protection on the same risk as of the reporting date. If the Company were able to freely exchange these contracts (i.e., assuming its contracts did not contain proscriptions on transfer and there was a viable exchange market), it would realize a loss representing the difference between the lower contractual premiums to which it is entitled and the current market premiums for a similar contract. The Company determines the fair value of its CDS contracts by applying the difference between the current net spread and the contractual net spread for the remaining duration of each contract to the notional value of its CDS contracts and taking the present value of such amounts discounted at the corresponding LIBOR over the weighted average remaining life of the contract. Strengths and Weaknesses of Model The Company’s credit derivative valuation model, like any financial model, has certain strengths and weaknesses. The primary strengths of the Company’s CDS modeling techniques are: • The model takes into account the transaction structure and the key drivers of market value. • The model maximizes the use of market-driven inputs whenever they are available. • The model is a consistent approach to valuing positions. The primary weaknesses of the Company’s CDS modeling techniques are: • There is no exit market or any actual exit transactions, therefore, the Company’s exit market is a hypothetical one based on the Company’s entry market. • There is a very limited market in which to validate the reasonableness of the fair values developed by the Company’s model. • The markets for the inputs to the model are highly illiquid, which impacts their reliability. • Due to the non-standard terms under which the Company enters into derivative contracts, the fair value of its credit derivatives may not reflect the same prices observed in an actively traded market of credit derivatives that do not contain terms and conditions similar to those observed in the financial guaranty market. Fair Value Option on FG VIEs’ Assets and Liabilities The Company elected the fair value option for all the FG VIEs’ assets and liabilities and classifies them as Level 3 in the fair value hierarchy as the lowest level input that is significant to their fair value is unobservable. The prices are generally determined with the assistance of an independent third-party, based on a discounted cash flow approach. The FG VIEs issued securities collateralized by first lien and second lien RMBS as well as loans and receivables. The fair value of the Company’s FG VIE assets is generally sensitive to changes related to estimated prepayment speeds; estimated default rates (determined on the basis of an analysis of collateral attributes such as: historical collateral performance, borrower profiles and other features relevant to the evaluation of collateral credit quality); yields implied by market prices for similar securities; and house price depreciation/appreciation rates based on macroeconomic forecasts. Significant changes to some of these inputs could materially change the market value of the FG VIE’s assets and the implied collateral losses within the transaction. In general, the fair value of the FG VIE assets is most sensitive to changes in the projected collateral losses, where an increase in collateral losses typically leads to a decrease in the fair value of FG VIE assets, while a decrease in collateral losses typically leads to an increase in the fair value of FG VIE assets. The third-party utilizes an internal model to determine an appropriate yield at which to discount the cash flows of the security, by factoring in collateral types, weighted-average lives, and other structural attributes specific to the security being priced. The expected yield is further calibrated by utilizing algorithms designed to aggregate market color, received by the independent third-party, on comparable bonds. The models to price the FG VIEs’ liabilities used, where appropriate, the same inputs used in determining fair value of FG VIE assets and, for those liabilities insured by the Company, the benefit from the Company's insurance policy guaranteeing the timely payment of principal and interest, taking into account the Company's own credit risk. Significant changes to any of the inputs described above could materially change the timing of expected losses within the insured transaction which is a significant factor in determining the implied benefit from the Company’s insurance policy guaranteeing the timely payment of principal and interest for the tranches of debt issued by the FG VIE that is insured by the Company. In general, extending the timing of expected loss payments by the Company into the future typically leads to a decrease in the value of the Company’s insurance and a decrease in the fair value of the Company’s FG VIE liabilities with recourse, while a shortening of the timing of expected loss payments by the Company typically leads to an increase in the value of the Company’s insurance and an increase in the fair value of the Company’s FG VIE liabilities with recourse. Not Carried at Fair Value Financial Guaranty Insurance Contracts For financial guaranty insurance contracts that are acquired in a business combination, the Company measures each contract at fair value on the date of acquisition, and then follows insurance accounting guidance on a recurring basis thereafter. In addition, the Company discloses the fair value of its outstanding financial guaranty insurance contracts. In both cases, fair value is based on management’s estimate of what a similarly rated financial guaranty insurance company would demand to acquire the Company’s in-force book of financial guaranty insurance business. It is based on a variety of factors that may include pricing assumptions management has observed for portfolio transfers, commutations, and acquisitions that have occurred in the financial guaranty market, as well as prices observed in the credit derivative market with an adjustment for illiquidity so that the terms would be similar to a financial guaranty insurance contract, and includes adjustments to the carrying value of unearned premium reserve for stressed losses, ceding commissions and return on capital. The Company classified this fair value measurement as Level 3. Long-Term Debt The Company’s long-term debt, excluding notes payable, is valued by broker-dealers using third party independent pricing sources and standard market conventions. The market conventions utilize market quotations, market transactions for the Company’s comparable instruments, and to a lesser extent, similar instruments in the broader insurance industry. The fair value measurement was classified as Level 2 in the fair value hierarchy. The fair value of the notes payable was determined by calculating the present value of the expected cash flows. The fair value measurement was classified as Level 3 in the fair value hierarchy. Other Invested Assets As of December 31, 2016, other invested assets not carried at fair value consisted primarily of an investment in a guaranteed investment contract, which matured in 2017. The fair value of the guaranteed investment contract approximated its carrying value due to its short term nature and was classified as Level 2 in the fair value hierarchy. Other Assets and Other Liabilities The Company’s other assets and other liabilities consist predominantly of accrued interest, receivables for securities sold and payables for securities purchased, the carrying values of which approximate fair value. Financial Instruments Carried at Fair Value Amounts recorded at fair value in the Company’s financial statements are presented in the tables below. Fair Value Hierarchy of Financial Instruments Carried at Fair Value As of December 31, 2017 Fair Value Hierarchy Fair Value Level 1 Level 2 Level 3 (in millions) Assets: Investment portfolio, available-for-sale: Fixed-maturity securities Obligations of state and political subdivisions $ 5,760 $ — $ 5,684 $ 76 U.S. government and agencies 285 — 285 — Corporate securities 2,018 — 1,951 67 Mortgage-backed securities: RMBS 861 — 527 334 Commercial mortgage-backed securities (CMBS) 549 — 549 — Asset-backed securities 896 — 109 787 Foreign government securities 305 — 305 — Total fixed-maturity securities 10,674 — 9,410 1,264 Short-term investments 627 464 162 1 Other invested assets (1) 7 — 0 7 Credit derivative assets 2 — — 2 FG VIEs’ assets, at fair value 700 — — 700 Other assets 121 25 36 60 Total assets carried at fair value $ 12,131 $ 489 $ 9,608 $ 2,034 Liabilities: Credit derivative liabilities $ 271 $ — $ — $ 271 FG VIEs’ liabilities with recourse, at fair value 627 — — 627 FG VIEs’ liabilities without recourse, at fair value 130 — — 130 Total liabilities carried at fair value $ 1,028 $ — $ — $ 1,028 Fair Value Hierarchy of Financial Instruments Carried at Fair Value As of December 31, 2016 Fair Value Hierarchy Fair Value Level 1 Level 2 Level 3 (in millions) Assets: Investment portfolio, available-for-sale: Fixed-maturity securities Obligations of state and political subdivisions $ 5,432 $ — $ 5,393 $ 39 U.S. government and agencies 440 — 440 — Corporate securities 1,613 — 1,553 60 Mortgage-backed securities: RMBS 987 — 622 365 CMBS 583 — 583 — Asset-backed securities 945 — 140 805 Foreign government securities 233 — 233 — Total fixed-maturity securities 10,233 — 8,964 1,269 Short-term investments 590 319 271 — Other invested assets(1) 8 — 0 8 Credit derivative assets 13 — — 13 FG VIEs’ assets, at fair value 876 — — 876 Other assets 114 24 28 62 Total assets carried at fair value $ 11,834 $ 343 $ 9,263 $ 2,228 Liabilities: Credit derivative liabilities $ 402 $ — $ — $ 402 FG VIEs’ liabilities with recourse, at fair value 807 — — 807 FG VIEs’ liabilities without recourse, a |
Contracts Accounted for as Cred
Contracts Accounted for as Credit Derivatives | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Contracts Accounted for as Credit Derivatives | Contracts Accounted for as Credit Derivatives The Company has a portfolio of financial guaranty contracts that meet the definition of a derivative in accordance with GAAP (primarily CDS). The credit derivative portfolio also includes interest rate swaps. Credit derivative transactions are governed by ISDA documentation and have different characteristics from financial guaranty insurance contracts. For example, the Company’s control rights with respect to a reference obligation under a credit derivative may be more limited than when the Company issues a financial guaranty insurance contract. In addition, there are more circumstances under which the Company may be obligated to make payments. Similar to a financial guaranty insurance contract, the Company would be obligated to pay if the obligor failed to make a scheduled payment of principal or interest in full. However, the Company may also be required to pay if the obligor becomes bankrupt or if the reference obligation were restructured if, after negotiation, those credit events are specified in the documentation for the credit derivative transactions. Furthermore, the Company may be required to make a payment due to an event that is unrelated to the performance of the obligation referenced in the credit derivative. If events of default or termination events specified in the credit derivative documentation were to occur, the non-defaulting or the non-affected party, which may be either the Company or the counterparty, depending upon the circumstances, may decide to terminate a credit derivative prior to maturity. In that case, the Company may be required to make a termination payment to its swap counterparty upon such termination. Absent such an event of default or termination event, the Company may not unilaterally terminate a CDS contract; however, the Company on occasion has mutually agreed with various counterparties to terminate certain CDS transactions. Accounting Policy Credit derivatives are recorded at fair value. Changes in fair value are recorded in “net change in fair value of credit derivatives” on the consolidated statement of operations. Realized gains (losses) and other settlements on credit derivatives include credit derivative premiums received and receivable for credit protection the Company has sold under its insured CDS contracts, premiums paid and payable for credit protection the Company has purchased, claims paid and payable and received and receivable related to insured credit events under these contracts, ceding commission expense or income and realized gains or losses related to their early termination. Fair value of credit derivatives is reflected as either net assets or net liabilities determined on a contract by contract basis in the Company's consolidated balance sheets. See Note 7, Fair Value Measurement, for a discussion on the fair value methodology for credit derivatives. Credit Derivative Net Par Outstanding by Sector The estimated remaining weighted average life of credit derivatives was 11.7 years at December 31, 2017 and 5.3 years at December 31, 2016 . The increase in the weighted average life of the credit derivative portfolio was primarily attributable to the run-off of short-dated pooled corporate obligations. The components of the Company’s credit derivative net par outstanding are presented below. Credit Derivatives As of December 31, 2017 As of December 31, 2016 Asset Type Net Par Outstanding Weighted Average Credit Rating Net Par Outstanding Weighted Average Credit Rating (dollars in millions) Pooled corporate obligations: CLO /collateralized bond obligations $ — -- $ 2,022 AAA Synthetic investment grade pooled corporate — -- 7,224 AAA TruPS CDOs 878 A 1,179 BBB+ Total pooled corporate obligations 878 A 10,425 AAA U.S. RMBS 916 AA 1,142 AA- Pooled infrastructure 1,561 AAA 1,513 AAA Infrastructure finance 572 A 1,021 BBB+ Other(1) 2,280 A- 2,896 A Total $ 6,207 AA- $ 16,997 AA+ ____________________ (1) This comprises numerous transactions across various asset classes, such as commercial receivables, international RMBS, regulated utilities and consumer receivables. The underlying collateral in TruPS CDOs consists primarily of subordinated debt instruments such as TruPS issued by bank holding companies and similar instruments issued by insurance companies, real estate investment trusts and other real estate related issuers. Due to the fact that the debt is subordinated, TruPS CDOs were typically structured with higher levels of embedded credit enhancement, which allowed the Company to mitigate the risks associated with TruPS CDOs. Distribution of Credit Derivative Net Par Outstanding by Internal Rating As of December 31, 2017 As of December 31, 2016 Ratings Net Par Outstanding % of Total Net Par Outstanding % of Total (dollars in millions) AAA $ 2,144 34.6 % $ 10,967 64.6 % AA 1,170 18.8 2,167 12.7 A 1,517 24.5 1,499 8.8 BBB 1,038 16.7 1,391 8.2 BIG 338 5.4 973 5.7 Credit derivative net par outstanding $ 6,207 100.0 % $ 16,997 100.0 % Fair Value of Credit Derivatives Net Change in Fair Value of Credit Derivative Gain (Loss) Year Ended December 31, 2017 2016 2015 (in millions) Realized gains on credit derivatives $ 17 $ 56 $ 63 Net credit derivative losses (paid and payable) recovered and recoverable and other settlements (27 ) (27 ) (81 ) Realized gains (losses) and other settlements (10 ) 29 (18 ) Net unrealized gains (losses): Pooled corporate obligations 35 (16 ) 147 U.S. RMBS 23 22 396 Pooled infrastructure 5 17 17 Infrastructure finance 4 4 0 Other 54 42 186 Net unrealized gains (losses) 121 69 746 Net change in fair value of credit derivatives $ 111 $ 98 $ 728 Terminations and Settlements of Direct Credit Derivative Contracts Year Ended December 31, 2017 2016 2015 (in millions) Net par of terminated credit derivative contracts $ 331 $ 3,811 $ 2,777 Realized gains on credit derivatives 0 20 13 Net credit derivative losses (paid and payable) recovered and recoverable and other settlements (15 ) — (116 ) Net unrealized gains (losses) on credit derivatives 26 103 465 During 2017, unrealized fair value gains were generated primarily as a result of CDS terminations, run-off of net par outstanding, and price improvements on the underlying collateral of the Company’s CDS. The termination of several CDS transactions in the pooled corporate CLO , U.S. RMBS and Other sectors was the primary driver of the unrealized fair value gains. The cost to buy protection in AGC’s and AGM’s name, specifically the five-year CDS spread, did not change materially during the period, and therefore did not have a material impact on the Company’s unrealized fair value gains and losses on CDS. During 2016, unrealized fair value gains were generated primarily as a result of CDS terminations in the U.S. RMBS and other sectors, run-off of CDS par and price improvements on the underlying collateral of the Company’s CDS. The majority of the CDS transactions that were terminated were as a result of settlement agreements with several CDS counterparties. The unrealized fair value gains were partially offset by unrealized losses resulting from wider implied net spreads across all sectors. The wider implied net spreads were primarily a result of the decreased cost to buy protection in AGC’s and AGM’s name, as the market cost of AGC’s and AGM’s credit protection decreased significantly during the period. For those CDS transactions that were pricing at or above their floor levels, when the cost of purchasing CDS protection on AGC and AGM, which management refers to as the CDS spread on AGC and AGM, decreased the implied spreads that the Company would expect to receive on these transactions increased. During 2015, unrealized fair value gains were generated primarily as a result of CDS terminations. The Company reached a settlement agreement with one CDS counterparty to terminate five Alt-A first lien CDS transactions resulting in unrealized fair value gains of $213 million and was the primary driver of the unrealized fair value gains in the U.S. RMBS sector. The Company also terminated a CMBS transaction, a Triple-X life insurance securitization transaction, and a distressed middle market CLO securitization during the period and recognized unrealized fair value gains of $41 million , $99 million and $99 million , respectively. These were the primary drivers of the unrealized fair value gains in the CMBS, Other, and pooled corporate CLO sectors, respectively, during the period. The remainder of the fair value gains for the period were a result of tighter implied net spreads across all sectors. The tighter implied net spreads were primarily a result of the increased cost to buy protection in AGC’s and AGM’s name, particularly for the one year CDS spread. For those CDS transactions that were pricing at or above their floor levels, when the cost of purchasing CDS protection on AGC and AGM increased, the implied spreads that the Company would expect to receive on these transactions decreased. Finally, during 2015, there was a refinement in methodology to address an instance in a U.S. RMBS transaction where the Company now expects recoveries. This refinement resulted in approximately $49 million in fair value gains in 2015. The impact of changes in credit spreads will vary based upon the volume, tenor, interest rates, and other market conditions at the time these fair values are determined. In addition, since each transaction has unique collateral and structural terms, the underlying change in fair value of each transaction may vary considerably. The fair value of credit derivative contracts also reflects the change in the Company’s own credit cost based on the price to purchase credit protection on AGC and AGM. The Company determines its own credit risk based on quoted CDS prices traded on the Company at each balance sheet date. CDS Spread on AGC and AGM Quoted price of CDS contract (in basis points) As of As of As of Five-year CDS spread: AGC 163 158 376 AGM 145 158 366 One-year CDS spread AGC 70 35 139 AGM 28 29 131 Fair Value of Credit Derivatives Assets (Liabilities) and Effect of AGC and AGM Credit Spreads As of As of (in millions) Fair value of credit derivatives before effect of AGC and AGM credit spreads $ (555 ) $ (811 ) Plus: Effect of AGC and AGM credit spreads 286 422 Net fair value of credit derivatives $ (269 ) $ (389 ) The fair value of CDS contracts at December 31, 2017 , before considering the implications of AGC’s and AGM’s credit spreads, is a direct result of continued wide credit spreads in the fixed income security markets and ratings downgrades. The asset classes that remain most affected are TruPS, pooled infrastructure and infrastructure finance securities, as well as 2005-2007 vintages of Alt-A, Option ARM and subprime RMBS transactions. The mark to market benefit between December 31, 2017 and December 31, 2016 , resulted primarily from several CDS terminations, run-off of net par outstanding, and a narrowing of credit spreads related to the Company's TruPS and U.S. RMBS obligations. Management believes that the trading level of AGC’s and AGM’s credit spreads over the past several years has been due to the correlation between AGC’s and AGM’s risk profile and the current risk profile of the broader financial markets. Offsetting the benefit attributable to AGC’s and AGM’s credit spread were higher credit spreads in the fixed income security markets. The higher credit spreads in the fixed income security market are due to the lack of liquidity in the TruPS CDO, and pooled infrastructure markets as well as continuing market concerns over the 2005-2007 vintages of RMBS. The following table presents the fair value and the present value of expected claim payments or recoveries (i.e., net expected loss to be paid as described in Note 5) for contracts accounted for as derivatives. Net Fair Value and Expected Losses of Credit Derivatives As of As of (in millions) Fair value of credit derivative asset (liability), net $ (269 ) $ (389 ) Expected loss to be (paid) recovered 14 (10 ) Collateral Posting for Certain Credit Derivative Contracts The transaction documentation for $497 million of the CDS insured by AGC requires AGC to post collateral, in some cases subject to a cap, to secure its obligation to make payments under such contracts. Eligible collateral is generally cash or U.S. government or agency securities; eligible collateral other than cash is valued at a discount to the face amount. The table below summarizes AGC’s CDS collateral posting requirements as of December 31, 2017 and December 31, 2016 . AGC Insured CDS Collateral Posting Requirements As of As of (in millions) Gross par of CDS with collateral posting requirement $ 497 $ 690 Maximum posting requirement 464 674 Collateral posted 18 116 The reduction in the collateral posting requirement is primarily attributable to the termination in February 2017 by the Company of its remaining CDS contracts with one of its counterparties as to which it had a posting requirement; the CDS contracts related to approximately $183 million in gross par and $73 million of collateral posted as of December 31, 2016. Sensitivity to Changes in Credit Spread The following table summarizes the estimated change in fair values on the net balance of the Company’s credit derivative positions assuming immediate parallel shifts in credit spreads on AGC and AGM and on the risks that they both assume. Effect of Changes in Credit Spread As of December 31, 2017 Credit Spreads(1) Estimated Net Fair Value (Pre-Tax) Estimated Change in Gain/(Loss) (Pre-Tax) (in millions) 100% widening in spreads $ (501 ) $ (232 ) 50% widening in spreads (385 ) (116 ) 25% widening in spreads (327 ) (58 ) 10% widening in spreads (292 ) (23 ) Base Scenario (269 ) — 10% narrowing in spreads (250 ) 19 25% narrowing in spreads (222 ) 47 50% narrowing in spreads (174 ) 95 ____________________ (1) Includes the effects of spreads on both the underlying asset classes and the Company’s own credit spread. |
Consolidated Variable Interest
Consolidated Variable Interest Entities | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Variable Interest Entities | Consolidated Variable Interest Entities Consolidated FG VIEs The Company provides financial guaranties with respect to debt obligations of special purpose entities, including VIEs. Assured Guaranty does not act as the servicer or collateral manager for any VIE obligations insured by its companies. The transaction structure generally provides certain financial protections to the Company. This financial protection can take several forms, the most common of which are overcollateralization, first loss protection (or subordination) and excess spread. In the case of overcollateralization (i.e., the principal amount of the securitized assets exceeds the principal amount of the structured finance obligations guaranteed by the Company), the structure allows defaults of the securitized assets before a default is experienced on the structured finance obligation guaranteed by the Company. In the case of first loss, the financial guaranty insurance policy only covers a senior layer of losses experienced by multiple obligations issued by special purpose entities, including VIEs. The first loss exposure with respect to the assets is either retained by the seller or sold off in the form of equity or mezzanine debt to other investors. In the case of excess spread, the financial assets contributed to special purpose entities, including VIEs, generate interest income that are in excess of the interest payments on the debt issued by the special purpose entity. Such excess spread is typically distributed through the transaction’s cash flow waterfall and may be used to create additional credit enhancement, applied to redeem debt issued by the special purpose entities, including VIEs (thereby, creating additional overcollateralization), or distributed to equity or other investors in the transaction. Assured Guaranty is not primarily liable for the debt obligations issued by the VIEs it insures and would only be required to make payments on those insured debt obligations in the event that the issuer of such debt obligations defaults on any principal or interest due and only for the amount of the shortfall. AGL’s and its subsidiaries’ creditors do not have any rights with regard to the collateral supporting the debt issued by the FG VIEs. Proceeds from sales, maturities, prepayments and interest from such underlying collateral may only be used to pay debt service on VIE liabilities. Net fair value gains and losses on FG VIEs are expected to reverse to zero at maturity of the VIE debt, except for net premiums received and net claims paid by Assured Guaranty under the financial guaranty insurance contract. The Company’s estimate of expected loss to be paid for FG VIEs is included in Note 5, Expected Loss to be Paid. Accounting Policy The Company evaluates whether it is the primary beneficiary of its VIEs. If the Company concludes that it is the primary beneficiary, it is required to consolidate the entire VIE in the Company's financial statements and eliminate the effects of the financial guaranty insurance contracts issued by AGM and AGC on the consolidated FG VIEs debt obligations. The primary beneficiary of a VIE is the enterprise that has both 1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance; and 2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. As part of the terms of its financial guaranty contracts, the Company, under its insurance contract, obtains certain protective rights with respect to the VIE that give the Company additional controls over a VIE. These protective rights are triggered by the occurrence of certain events, such as failure to be in compliance with a covenant due to poor deal performance or a deterioration in a servicer or collateral manager's financial condition. At deal inception, the Company typically is not deemed to control a VIE; however, once a trigger event occurs, the Company's control of the VIE typically increases. The Company continuously evaluates its power to direct the activities that most significantly impact the economic performance of VIEs that have debt obligations insured by the Company and, accordingly, where the Company is obligated to absorb VIE losses or receive benefits that could potentially be significant to the VIE. The Company is deemed to be the control party for certain VIEs under GAAP, typically when its protective rights give it the power to both terminate and replace the deal servicer, which are characteristics specific to the Company's financial guaranty contracts. If the protective rights that could make the Company the control party have not been triggered, then the VIE is not consolidated. If the Company is deemed no longer to have those protective rights, the VIE is deconsolidated. The FG VIEs' liabilities that are insured by the Company are considered to be with recourse, because the Company guarantees the payment of principal and interest regardless of the performance of the related FG VIEs' assets. FG VIEs' liabilities that are not insured by the Company are considered to be without recourse, because the payment of principal and interest of these liabilities is wholly dependent on the performance of the FG VIEs' assets. The Company has limited contractual rights to obtain the financial records of its consolidated FG VIEs. The FG VIEs do not prepare separate GAAP financial statements; therefore, the Company compiles GAAP financial information for them based on trustee reports prepared by and received from third parties. Such trustee reports are not available to the Company until approximately 30 days after the end of any given period. The time required to perform adequate reconciliations and analyses of the information in these trustee reports results in a one quarter lag in reporting the FG VIEs' activities. The Company records the fair value of FG VIE assets and liabilities based on modeled prices. The Company updates the model assumptions each reporting period for the most recent available information, which incorporates the impact of material events that may have occurred since the quarter lag date. The net change in the fair value of consolidated FG VIE assets and liabilities is recorded in "fair value gains (losses) on FG VIEs" in the consolidated statements of operations. Interest income and interest expense are derived from the trustee reports and also included in “fair value gains (losses) on FG VIEs.” The Company has elected the fair value option for assets and liabilities classified as FG VIEs' assets and liabilities because the carrying amount transition method was not practical. The cash flows generated by the FG VIE assets are classified as cash flows from investing activities. Paydowns of FG liabilities are supported by the cash flows generated by FG VIE assets, and for liabilities with recourse, possibly claim payments made by AGM or AGC under its financial guaranty insurance contracts. Paydowns of FG liabilities both with and without recourse are classified as cash flows used in financing activities by the Company. Interest income, interest expense and other expenses of the FG VIE assets and liabilities are classified as operating cash flows. Claim payments made by AGC and AGM under the financial guaranty contracts issued to the FG VIEs are eliminated upon consolidation and therefore such claim payments are treated as paydowns of FG VIE liabilities as a financing activity as opposed to an operating activity of AGM and AGC. Consolidated FG VIEs Number of FG VIEs Consolidated Year Ended December 31, 2017 2016 2015 Beginning of the period, December 31 32 34 32 Radian Asset Acquisition — — 4 Consolidated (1) 2 1 1 Deconsolidated (1) (2 ) (2 ) (1 ) Matured — (1 ) (2 ) End of the period, December 31 32 32 34 ____________________ (1) Net loss on consolidation and deconsolidation was de minimis in 2017 and 2016 . Net loss on consolidation was $26 million in 2015 and was recorded in "fair value gains (losses) on FG VIEs" in the consolidated statement of operations. The total unpaid principal balance for the FG VIEs’ assets that were over 90 days or more past due was approximately $99 million at December 31, 2017 and $137 million at December 31, 2016 . The aggregate unpaid principal of the FG VIEs’ assets was approximately $361 million greater than the aggregate fair value at December 31, 2017 . The aggregate unpaid principal of the FG VIEs’ assets was approximately $432 million greater than the aggregate fair value at December 31, 2016 . The change in the instrument-specific credit risk of the FG VIEs’ assets held as of December 31, 2017 that was recorded in the consolidated statements of operations for 2017 were gains of $35 million . The change in the instrument-specific credit risk of the FG VIEs’ assets held as of December 31, 2016 that was recorded in the consolidated statements of operations for 2016 were gains of $55 million . The change in the instrument-specific credit risk of the FG VIEs’ assets for 2015 were gains of $90 million . To calculate the instrument specific credit risk, the changes in the fair value of the FG VIE assets are allocated between changes that are due to the instrument specific credit risk and changes due to other factors, including interest rates. The instrument specific credit risk amount is determined by using expected contractual cash flows versus current expected cash flows discounted at original contractual rate. The net present value is calculated by discounting the expected cash flows of the underlying security, at the relevant effective interest rate. The unpaid principal for FG VIE liabilities with recourse, which represent obligations insured by AGC or AGM, was $674 million and $871 million as of December 31, 2017 and December 31, 2016 , respectively. FG VIE liabilities with recourse will mature at various dates ranging from 2025 to 2038 . The aggregate unpaid principal balance of the FG VIE liabilities with and without recourse was approximately $73 million greater than the aggregate fair value of the FG VIEs’ liabilities as of December 31, 2017 . The aggregate unpaid principal balance was approximately $109 million greater than the aggregate fair value of the FG VIEs’ liabilities as of December 31, 2016 . The table below shows the carrying value of the consolidated FG VIEs’ assets and liabilities in the consolidated financial statements, segregated by the types of assets that collateralize their respective debt obligations for FG VIE liabilities with recourse. Consolidated FG VIEs By Type of Collateral As of December 31, 2017 As of December 31, 2016 Assets Liabilities Assets Liabilities (in millions) With recourse: U.S. RMBS first lien $ 362 $ 385 $ 473 $ 509 U.S. RMBS second lien 144 177 178 223 Manufactured housing 64 65 74 75 Total with recourse 570 627 725 807 Without recourse 130 130 151 151 Total $ 700 $ 757 $ 876 $ 958 The consolidation of FG VIEs affects net income and shareholders' equity due to (i) changes in fair value gains (losses) on FG VIE assets and liabilities, (ii) the elimination of premiums and losses related to the AGC and AGM FG VIE liabilities with recourse and (iii) the elimination of investment balances related to the Company’s purchase of AGC and AGM insured FG VIE debt. Upon consolidation of a FG VIE, the related insurance and, if applicable, the related investment balances, are considered intercompany transactions and therefore eliminated. Such eliminations are included in the table below to present the full effect of consolidating FG VIEs. Effect of Consolidating FG VIEs on Net Income (Loss), Cash Flows From Operating Activities and Shareholders’ Equity Year Ended December 31, 2017 2016 2015 (in millions) Net earned premiums $ (15 ) $ (16 ) $ (21 ) Net investment income (5 ) (10 ) (32 ) Net realized investment gains (losses) 0 1 10 Fair value gains (losses) on FG VIEs 30 38 38 Bargain purchase gain — — 2 Loss and LAE 7 7 28 Effect on income before tax 17 20 25 Less: tax provision (benefit) 6 7 8 Effect on net income (loss) $ 11 $ 13 $ 17 Effect on cash flows from operating activities $ 19 $ 24 $ 43 As of As of (in millions) Effect on shareholders’ equity (decrease) increase $ 2 $ (9 ) Fair value gains (losses) on FG VIEs represent the net change in fair value on the consolidated FG VIEs’ assets and liabilities. In 2017, the Company recorded a pre-tax net fair value gain on consolidated FG VIEs of $30 million . The primary driver of the 2017 gain in fair value of FG VIE assets and liabilities is price appreciation on the FG VIE assets resulting from improvement in the underlying collateral. In 2016, the Company recorded a pre-tax net fair value gain on consolidated FG VIEs of $38 million . The primary driver of the 2016 gain in fair value of FG VIE assets and liabilities was net mark-to-market gains due to price appreciation resulting from improvements in the underlying collateral of HELOC RMBS assets of the FG VIEs. In 2015, the Company recorded a pre-tax net fair value gain on consolidated FG VIEs of $38 million which was primarily driven by price appreciation on the Company's FG VIE assets during the year that resulted from improvements in the underlying collateral, as well as large principal paydowns made on the Company's FG VIEs. Other Consolidated VIEs In certain instances where the Company consolidates a VIE that was established as part of a loss mitigation negotiated settlement agreement that results in the termination of the original insured financial guaranty insurance or credit derivative contract the Company classifies the assets and liabilities of those VIEs in the line items that most accurately reflect the nature of the items, as opposed to within the FG VIE assets and FG VIE liabilities. Non-Consolidated VIEs As of December 31, 2017 and December 31, 2016 , the Company had financial guaranty contracts outstanding for approximately 510 and 600 VIEs, respectively, that it did not consolidate based on the Company’s analyses which indicate that it is not the primary beneficiary of any other VIEs. The Company’s exposure provided through its financial guaranties with respect to debt obligations of special purpose entities is included within net par outstanding in Note 4, Outstanding Exposure. |
Investments and Cash
Investments and Cash | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments and Cash | Investments and Cash Accounting Policy The vast majority of the Company's investment portfolio is composed of fixed-maturity and short-term investments, classified as available-for-sale at the time of purchase (approximately 99.2% based on fair value as of December 31, 2017 ), and therefore carried at fair value. Changes in fair value for other-than-temporarily-impaired (OTTI) securities are bifurcated between credit losses and non-credit changes in fair value. The credit loss on OTTI securities is recorded in the statement of operations and the non-credit component of the change in fair value of securities, whether OTTI or not, is recorded in OCI. For securities in an unrealized loss position where the Company has the intent to sell or it is more-likely-than-not that it will be required to sell the security before recovery, the entire impairment loss (i.e., the difference between the security's fair value and its amortized cost) is recorded in the consolidated statements of operations. Credit losses reduce the amortized cost of impaired securities. The amortized cost basis is adjusted for accretion and amortization (using the effective interest method) with a corresponding entry recorded in net investment income. Realized gains and losses on sales of investments are determined using the specific identification method. Realized loss includes amounts recorded for other-than-temporary impairments on debt securities and the declines in fair value of securities for which the Company has the intent to sell the security or inability to hold until recovery of amortized cost. For mortgage‑backed securities, and any other holdings for which there is prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any necessary adjustments due to changes in effective yields and maturities are recognized in net investment income using the retrospective method. Loss mitigation securities are generally purchased at a discount and are accounted for based on their underlying investment type, excluding the effects of the Company’s insurance. Interest income on loss mitigation securities is recognized on a level yield basis over the remaining life of the security. Short-term investments, which are those investments with a maturity of less than one year at time of purchase, are carried at fair value and include amounts deposited in money market funds. Other invested assets, as of December 31, 2017, primarily include an investment in the limited partnership interest of a fund that invests in the equity of private equity managers and a minority interest in an independent investment advisory firm specializing in separately managed accounts, both of which are accounted for under the equity method, and preferred stocks, which are carried at fair value with changes in unrealized gains and losses recorded in OCI. Cash consists of cash on hand and demand deposits. As a result of the lag in reporting FG VIEs, cash and short-term investments do not reflect cash outflow to the holders of the debt issued by the FG VIEs for claim payments made by the Company's insurance subsidiaries to the consolidated FG VIEs until the subsequent reporting period. Assessment for Other-Than Temporary Impairments The Company has a formal review process to determine other-than-temporary-impairment for securities in its investment portfolio where there is no intent to sell and it is not more-likely-than-not that it will be required to sell the security before recovery. Factors considered when assessing impairment include: • a decline in the market value of a security by 20% or more below amortized cost for a continuous period of at least six months ; • a decline in the market value of a security for a continuous period of 12 months; • recent credit downgrades of the applicable security or the issuer by rating agencies; • the financial condition of the applicable issuer; • whether loss of investment principal is anticipated; • the impact of foreign exchange rates; and • whether scheduled interest payments are past due. The Company assesses the ability to recover the amortized cost by comparing the net present value of projected future cash flows with the amortized cost of the security. If the security is in an unrealized loss position and its net present value is less than the amortized cost of the investment, an other-than-temporary impairment is recorded. The net present value is calculated by discounting the Company's estimate of projected future cash flows at the effective interest rate implicit in the debt security at the time of purchase. The Company's estimates of projected future cash flows are driven by assumptions regarding probability of default and estimates regarding timing and amount of recoveries associated with a default. The Company develops these estimates using information based on historical experience, credit analysis and market observable data, such as industry analyst reports and forecasts, sector credit ratings and other relevant data. For mortgage‑backed and asset backed securities, cash flow estimates also include prepayment and other assumptions regarding the underlying collateral including default rates, recoveries and changes in value. The assumptions used in these projections requires the use of significant management judgment. The Company's assessment of a decline in value included management's current assessment of the factors noted above. The Company also seeks advice from its outside investment managers. If that assessment changes in the future, the Company may ultimately record a loss after having originally concluded that the decline in value was temporary. Net Investment Income and Realized Gains (Losses) Net investment income is a function of the yield that the Company earns on invested assets and the size of the portfolio. The investment yield is a function of market interest rates at the time of investment as well as the type, credit quality and maturity of the invested assets. Accrued investment income, which is recorded in Other Assets, was $97 million and $91 million as of December 31, 2017 and December 31, 2016 , respectively. Net Investment Income Year Ended December 31, 2017 2016 2015 (in millions) Income from fixed-maturity securities managed by third parties $ 298 $ 306 $ 335 Income from internally managed securities: Fixed maturities 120 103 61 Other 9 8 37 Gross investment income 427 417 433 Investment expenses (9 ) (9 ) (10 ) Net investment income $ 418 $ 408 $ 423 Net Realized Investment Gains (Losses) Year Ended December 31, 2017 2016 2015 (in millions) Gross realized gains on available-for-sale securities (1) $ 95 $ 28 $ 44 Gross realized losses on available-for-sale securities (12 ) (8 ) (15 ) Net realized gains (losses) on other invested assets 0 2 (8 ) Other-than-temporary impairment (43 ) (51 ) (47 ) Net realized investment gains (losses) $ 40 $ (29 ) $ (26 ) ____________________ (1) Year ended December 31, 2017 includes a gain on Zohar II Notes used as consideration for the MBIA UK Acquisition. See Note 2, Acquisitions. The following table presents the roll-forward of the credit losses of fixed-maturity securities for which the Company has recognized an other-than-temporary-impairment and where the portion of the fair value adjustment related to other factors was recognized in OCI. Roll Forward of Credit Losses in the Investment Portfolio Year Ended December 31, 2017 2016 2015 (in millions) Balance, beginning of period $ 134 $ 108 $ 124 Additions for credit losses on securities for which an other-than-temporary-impairment was not previously recognized 13 3 3 Reductions for securities sold and other settlements (4 ) (4 ) (28 ) Additions for credit losses on securities for which an other-than-temporary-impairment was previously recognized 19 27 9 Balance, end of period $ 162 $ 134 $ 108 Investment Portfolio Fixed-Maturity Securities and Short-Term Investments by Security Type As of December 31, 2017 Investment Category Percent of Total(1) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment Weighted Average Credit Rating (3) (dollars in millions) Fixed-maturity securities: Obligations of state and political subdivisions 51 % $ 5,504 $ 267 $ (11 ) $ 5,760 $ 23 AA U.S. government and agencies 2 272 14 (1 ) 285 — AA+ Corporate securities 18 1,973 63 (18 ) 2,018 (6 ) A Mortgage-backed securities(4): — RMBS 8 852 26 (17 ) 861 (1 ) BBB+ CMBS 5 540 12 (3 ) 549 — AAA Asset-backed securities 7 730 166 0 896 136 B Foreign government securities 3 316 6 (17 ) 305 0 AA Total fixed-maturity securities 94 10,187 554 (67 ) 10,674 152 A+ Short-term investments 6 627 0 0 627 — AAA Total investment portfolio 100 % $ 10,814 $ 554 $ (67 ) $ 11,301 152 A+ Fixed-Maturity Securities and Short-Term Investments by Security Type As of December 31, 2016 Investment Category Percent of Total(1) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value AOCI(2) Weighted Average Credit Rating (3) (dollars in millions) Fixed-maturity securities: Obligations of state and political subdivisions 50 % $ 5,269 $ 202 $ (39 ) $ 5,432 $ 13 AA U.S. government and agencies 4 424 17 (1 ) 440 — AA+ Corporate securities 15 1,612 32 (31 ) 1,613 (8 ) A- Mortgage-backed securities(4): RMBS 9 998 27 (38 ) 987 (21 ) A- CMBS 5 575 13 (5 ) 583 — AAA Asset-backed securities 8 835 110 0 945 33 B Foreign government securities 3 261 4 (32 ) 233 — AA Total fixed-maturity securities 94 9,974 405 (146 ) 10,233 17 A+ Short-term investments 6 590 0 0 590 — AAA Total investment portfolio 100 % $ 10,564 $ 405 $ (146 ) $ 10,823 $ 17 A+ ____________________ (1) Based on amortized cost. (2) Also refer to Note 20, Other Comprehensive Income. (3) Ratings in the tables above represent the lower of the Moody’s and S&P Global Ratings, a division of Standard & Poor's Financial Services LLC (S&P) classifications except for bonds purchased for loss mitigation or risk management strategies, which use internal ratings classifications. The Company’s portfolio consists primarily of high-quality, liquid instruments. (4) Government-agency obligations were approximately 39% of mortgage backed securities as of December 31, 2017 and 42% as of December 31, 2016 based on fair value. The Company’s investment portfolio in tax-exempt and taxable municipal securities includes issuances by a wide number of municipal authorities across the U.S. and its territories. The following tables present the fair value of the Company’s available-for-sale portfolio of obligations of state and political subdivisions as of December 31, 2017 and December 31, 2016 by state. Fair Value of Available-for-Sale Portfolio of Obligations of State and Political Subdivisions As of December 31, 2017 (1) State State General Obligation Local General Obligation Revenue Bonds Fair Value Amortized Cost Average Credit Rating (in millions) Fixed-maturity securities: New York $ 13 $ 44 $ 568 $ 625 $ 598 AA California 76 83 421 580 527 A Texas 17 212 321 550 528 AA Washington 93 87 214 394 381 AA Florida 5 17 244 266 254 AA- Massachusetts 70 — 151 221 208 AA Illinois 18 51 131 200 189 A Ohio 16 22 102 140 136 AA Pennsylvania 33 21 76 130 125 A+ District of Columbia 43 — 85 128 123 AA All others 138 263 1,233 1,634 1,577 AA- Total $ 522 $ 800 $ 3,546 $ 4,868 $ 4,646 AA- Fair Value of Available-for-Sale Portfolio of Obligations of State and Political Subdivisions As of December 31, 2016 (1) State State General Obligation Local General Obligation Revenue Bonds Fair Value Amortized Cost Average Credit Rating (in millions) Fixed-maturity securities: New York $ 13 $ 38 $ 570 $ 621 $ 604 AA California 73 62 391 526 497 A+ Texas 16 186 316 518 503 AA Washington 81 68 201 350 348 AA Florida 16 11 247 274 266 AA- Massachusetts 74 — 149 223 215 AA Illinois 18 65 127 210 205 A+ Arizona — 3 122 125 122 AA Georgia — 9 104 113 109 A+ Pennsylvania 38 17 58 113 111 A+ All others 153 155 1,085 1,393 1,364 AA- Total $ 482 $ 614 $ 3,370 $ 4,466 $ 4,344 AA- ____________________ (1) Excludes $892 million and $966 million as of December 31, 2017 and 2016 , respectively, of pre-refunded bonds, at fair value. The credit ratings are based on the underlying ratings and do not include any benefit from bond insurance. The revenue bond portfolio is comprised primarily of essential service revenue bonds issued by transportation authorities and other utilities, water and sewer authorities, universities and healthcare providers. Revenue Bonds Sources of Funds As of December 31, 2017 As of December 31, 2016 Type Fair Value Amortized Cost Fair Value Amortized Cost (in millions) Fixed-maturity securities: Transportation $ 955 $ 889 $ 860 $ 824 Water and sewer 670 641 545 531 Tax backed 600 570 617 601 Higher education 515 492 513 499 Municipal utilities 324 315 365 360 Healthcare 308 293 310 298 All others 174 169 160 158 Total $ 3,546 $ 3,369 $ 3,370 $ 3,271 The following tables summarize, for all fixed-maturity securities in an unrealized loss position, the aggregate fair value and gross unrealized loss by length of time the amounts have continuously been in an unrealized loss position. Fixed-Maturity Securities Gross Unrealized Loss by Length of Time As of December 31, 2017 Less than 12 months 12 months or more Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (dollars in millions) Obligations of state and political subdivisions $ 166 $ (4 ) $ 281 $ (7 ) $ 447 $ (11 ) U.S. government and agencies 151 0 18 (1 ) 169 (1 ) Corporate securities 201 (1 ) 240 (17 ) 441 (18 ) Mortgage-backed securities: RMBS 191 (5 ) 213 (12 ) 404 (17 ) CMBS 29 0 80 (3 ) 109 (3 ) Asset-backed securities 48 0 3 0 51 0 Foreign government securities 20 0 140 (17 ) 160 (17 ) Total $ 806 $ (10 ) $ 975 $ (57 ) $ 1,781 $ (67 ) Number of securities(1) 244 264 499 Number of securities with other-than-temporary impairment(1) 17 15 31 Fixed-Maturity Securities Gross Unrealized Loss by Length of Time As of December 31, 2016 Less than 12 months 12 months or more Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (dollars in millions) Obligations of state and political subdivisions $ 1,110 $ (38 ) $ 6 $ (1 ) $ 1,116 $ (39 ) U.S. government and agencies 87 (1 ) — — 87 (1 ) Corporate securities 492 (11 ) 118 (20 ) 610 (31 ) Mortgage-backed securities: RMBS 391 (23 ) 94 (15 ) 485 (38 ) CMBS 165 (5 ) — — 165 (5 ) Asset-backed securities 36 0 0 0 36 0 Foreign government securities 44 (5 ) 114 (27 ) 158 (32 ) Total $ 2,325 $ (83 ) $ 332 $ (63 ) $ 2,657 $ (146 ) Number of securities(1) 622 60 676 Number of securities with other-than-temporary impairment 8 9 17 ___________________ (1) The number of securities does not add across because lots consisting of the same securities have been purchased at different times and appear in both categories above (i.e., less than 12 months and 12 months or more). If a security appears in both categories, it is counted only once in the total column. Of the securities in an unrealized loss position for 12 months or more as of December 31, 2017 , 28 securities had unrealized losses greater than 10% of book value. The total unrealized loss for these securities as of December 31, 2017 was $27 million . As of December 31, 2016 , of the securities in an unrealized loss position for 12 months or more, 41 securities had unrealized losses greater than 10% of book value with an unrealized loss of $59 million . The Company has determined that the unrealized losses recorded as of December 31, 2017 and December 31, 2016 were yield-related and not the result of other-than-temporary-impairment. The amortized cost and estimated fair value of available-for-sale fixed-maturity securities by contractual maturity as of December 31, 2017 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. Distribution of Fixed-Maturity Securities by Contractual Maturity As of December 31, 2017 Amortized Cost Estimated Fair Value (in millions) Due within one year $ 254 $ 256 Due after one year through five years 1,574 1,604 Due after five years through 10 years 2,368 2,443 Due after 10 years 4,599 4,961 Mortgage-backed securities: RMBS 852 861 CMBS 540 549 Total $ 10,187 $ 10,674 Based on fair value, investments and restricted cash that are either held in trust for the benefit of third party ceding insurers in accordance with statutory requirements, placed on deposit to fulfill state licensing requirements, or otherwise restricted total $269 million and $285 million , as of December 31, 2017 and December 31, 2016 , respectively. The investment portfolio also contains securities that are held in trust by certain AGL subsidiaries for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements in the amount of $1,677 million and $1,420 million , based on fair value as of December 31, 2017 and December 31, 2016 , respectively. The fair value of the Company’s pledged securities to secure its obligations under its CDS exposure totaled $18 million and $116 million as of December 31, 2017 and December 31, 2016 , respectively. See Note 8, Contracts Accounted for as Credit Derivatives, for more information. No material investments of the Company were non-income producing for years ended December 31, 2017 and 2016 , respectively. Externally Managed Portfolio As of December 31, 2017, the majority of the investment portfolio is managed by six outside managers (including Wasmer, Schroeder & Company LLC, in which the Company has a minority interest as indicated below), and a seventh outside manager was added in January 2018. The Company has established detailed guidelines regarding credit quality, exposure to a particular sector and exposure to a particular obligor within a sector. The Company's investment guidelines generally do not permit its outside managers to purchase securities rated lower than A- by S&P or A3 by Moody’s, excluding a minimal allocation to corporate securities not rated lower than BBB by S&P or Baa2 by Moody’s. Internally Managed Portfolio The investment portfolio tables shown above include both assets managed externally and internally. In the table below, more detailed information is provided for the component of the total investment portfolio that is internally managed (excluding short-term investments). The internally managed portfolio (other than short term investments) represents approximately 12% and 15% of the investment portfolio, on a fair value basis as of December 31, 2017 and December 31, 2016 , respectively. The internally managed portfolio consists primarily of the Company's investments in securities for (i) loss mitigation purposes, (ii) other risk management purposes and (iii) where the Company believes a particular security presents an attractive investment opportunity. One of the Company's strategies for mitigating losses has been to purchase loss mitigation securities, at discounted prices. In addition, the Company holds other invested assets that were obtained or purchased as part of negotiated settlements with insured counterparties or under the terms of the financial guaranties (other risk management assets). Alternative investments include various funds investing in both equity and debt securities and catastrophe bonds as well as investments in investment managers. In February 2017 the Company agreed to purchase up to $100 million of limited partnership interests in a fund that invests in the equity of private equity managers. Separately, in September 2017 the Company acquired a minority interest in Wasmer, Schroeder & Company LLC, an independent investment advisory firm specializing in separately managed accounts (SMAs). Internally Managed Portfolio Carrying Value As of December 31, 2017 2016 (in millions) Assets purchased for loss mitigation and other risk management purposes: Fixed-maturity securities, at fair value $ 1,231 $ 1,492 Other invested assets 20 107 Alternative investments 69 48 Other 5 7 Total $ 1,325 $ 1,654 Cash and Restricted Cash The following table provides a reconciliation of the cash reported on the consolidated balance sheets and the cash and restricted cash reported in the statements of cash flows. Cash and Restricted Cash As of December 31, 2017 2016 2015 2014 (in millions) Cash $ 144 $ 118 $ 166 $ 75 Restricted cash (1) 0 9 0 19 Total cash and restricted cash $ 144 $ 127 $ 166 $ 94 ____________________ (1) Amounts relate to cash held in trust accounts and are reported in other assets in consolidated balance sheets. See Note 13, Reinsurance and Other Monoline Exposures, for more information. |
Insurance Company Regulatory Re
Insurance Company Regulatory Requirements | 12 Months Ended |
Dec. 31, 2017 | |
Insurance Company Regulatory Requirements [Abstract] | |
Insurance Company Regulatory Requirements | Insurance Company Regulatory Requirements The following table summarizes the equity and income amounts reported to local regulatory bodies in the U.S. and Bermuda for insurance company subsidiaries within the group. The discussion that follows describes the basis of accounting and differences to U.S. GAAP. Insurance Regulatory Amounts Reported Policyholders' Surplus Net Income (Loss) As of December 31, Year Ended December 31, 2017 2016 2017 2016 2015 (in millions) U.S. statutory companies: AGM(1) $ 2,254 $ 2,321 $ 152 $ 191 $ 217 AGC(1)(2) 2,073 1,896 219 108 (92 ) MAC 270 487 32 142 102 Bermuda statutory company: AG Re 1,294 1,255 156 139 51 ____________________ (1) Policyholders' surplus of AGM and AGC include their indirect share of MAC. AGM and AGC own approximately 61% and 39% , respectively, of the outstanding stock of Municipal Assurance Holdings Inc. (MAC Holdings), which owns 100% of the outstanding common stock of MAC. (2) As indicated in Note 2, Acquisitions, AGC completed the acquisition of MBIA UK (now AGLN) on January 10, 2017, CIFGH (the parent company of CIFGNA) on July 1, 2016 and Radian Asset on April 1, 2015. As mentioned in Note 1, Business and Basis of Presentation, AGC sold AGLN to AGM on June 26, 2017. Both CIFGNA and Radian Asset were merged with and into AGC, with AGC as the surviving company of the merger. The impact to AGC's policyholders' surplus was a decrease of approximately $36 million from the MBIA UK acquisition, on a statutory basis, as of January 10, 2017, and an increase of $287 million from the CIFGH acquisition, on a statutory basis, as of July 1, 2016. Basis of Regulatory Financial Reporting United States Each of the Company's U.S. domiciled insurance companies' ability to pay dividends depends, among other things, upon their financial condition, results of operations, cash requirements, compliance with rating agency requirements, and is also subject to restrictions contained in the insurance laws and related regulations of their state of domicile and other states. Financial statements prepared in accordance with accounting practices prescribed or permitted by local insurance regulatory authorities differ in certain respects from GAAP. The Company's U.S. domiciled insurance companies prepare statutory financial statements in accordance with accounting practices prescribed or permitted by the National Association of Insurance Commissioners (NAIC) and their respective insurance departments. Prescribed statutory accounting practices are set forth in the NAIC Accounting Practices and Procedures Manual. The Company has no permitted accounting practices on a statutory basis, except for those related to CIFGNA which was merged into AGC in 2016 and therefore subject to statutory merger accounting requiring the restatement of prior year balances of AGC to include CIFGNA. On the CIFG Acquisition Date, accounting policies were conformed with AGC's accounting policies which do not include any permitted practices. GAAP differs in certain significant respects from U.S. insurance companies' statutory accounting practices prescribed or permitted by insurance regulatory authorities. The principal differences result from the following statutory accounting practices: • upfront premiums are earned when related principal and interest have expired rather than earned over the expected period of coverage; • acquisition costs are charged to expense as incurred rather than over the period that related premiums are earned; • a contingency reserve is computed based on statutory requirements, whereas no such reserve is required under GAAP; • certain assets designated as “non-admitted assets” are charged directly to statutory surplus, rather than reflected as assets under GAAP; • investments in subsidiaries are carried on the balance sheet on the equity basis, to the extent admissible, rather than consolidated with the parent; • the amount of deferred tax assets that may be admitted is subject to an adjusted surplus threshold and is generally limited to the lesser of those assets the Company expects to realize within three years of the balance sheet date or fifteen percent of the Company's adjusted surplus. This realization period and surplus percentage is subject to change based on the amount of adjusted surplus. Under GAAP there is no non-admitted asset determination, rather a valuation allowance is recorded to reduce the deferred tax asset to an amount that is more likely than not to be realized; • insured credit derivatives are accounted for as insurance contracts rather than as derivative contracts measured at fair value; • bonds are generally carried at amortized cost rather than fair value; • insured obligations of VIEs and refinancing vehicles debt, where the Company is deemed the primary beneficiary, are accounted for as insurance contracts. Under GAAP, such VIEs and refinancing vehicles are consolidated and any transactions with the Company are eliminated; • surplus notes are recognized as surplus and each payment of principal and interest is recorded only upon approval of the insurance regulator rather than liabilities with periodic accrual of interest; • acquisitions are accounted for as either statutory purchases or statutory mergers, rather than the purchase method under GAAP; • losses are discounted at a rate of 4.0% or 4.5% , recorded when the loss is deemed probable and without consideration of the deferred premium revenue. Under GAAP, expected losses are discounted at the risk free rate at the end of each reporting period and are recorded only to the extent they exceed deferred premium revenue; • the present value of installment premiums and commissions are not recorded on the balance sheet as they are under GAAP; and • mergers of acquired companies are treated as statutory mergers at historical balances and financial statements are retroactively revised assuming the merger occurred at the beginning of the prior year, rather than prospectively beginning with the date of acquisition at fair value under GAAP. Contingency Reserves From time to time, AGM and AGC have obtained the approval of their regulators to release contingency reserves based on losses or because the accumulated reserve is deemed excessive in relation to the insurer's outstanding insured obligations. In 2017, on the latter basis, AGM obtained the New York State Department of Financial Services' (NYDFS's) approval for a contingency reserve release of approximately $246 million and AGC obtained the Maryland Insurance Administration's (MIA's) approval for a contingency reserve release of approximately $134 million . In 2016, AGM obtained the NYDFS's approval for a contingency reserve release of approximately $175 million and AGC obtained the MIA's approval for a contingency reserve release of approximately $152 million . In addition, MAC also released approximately $62 million and $53 million of contingency reserves in 2017 and 2016, respectively, which consisted of the assumed contingency reserves maintained by MAC, as reinsurer of AGM, in respect of the same obligations that were the subject of AGM's $246 million and $175 million releases in 2017 and 2016, respectively. With respect to the regular, quarterly contributions to contingency reserves required by the applicable Maryland and New York laws and regulations, such laws and regulations permit the discontinuation of such quarterly contributions to a company’s contingency reserves when such company’s aggregate contingency reserves for a particular line of business (i.e., municipal or non-municipal) exceed the sum of the company’s outstanding principal for each specified category of obligations within the particular line of business multiplied by the specified contingency reserve factor for each such category. In accordance with such laws and regulations, and with the approval of the MIA and the NYDFS, respectively, AGC ceased making quarterly contributions to its contingency reserves for both municipal and non-municipal business and AGM ceased making quarterly contributions to its contingency reserves for non-municipal business, in each case beginning in the fourth quarter of 2014. Such cessations are expected to continue for as long as AGC and AGM satisfy the foregoing condition for their applicable lines of business. Bermuda AG Re, a Bermuda regulated Class 3B insurer, prepares its statutory financial statements in conformity with the accounting principles set forth in the Insurance Act 1978, amendments thereto and related regulations. As of December 31, 2016, the Bermuda Monetary Authority (Authority) now requires insurers to prepare statutory financial statements in accordance with the particular accounting principles adopted by the insurer (which, in the case of AG Re, are U.S. GAAP), subject to certain adjustments. The principal difference relates to certain assets designated as “non-admitted assets” which are charged directly to statutory surplus rather than reflected as assets as they are under U.S. GAAP. United Kingdom AGE prepares its solvency and condition report based on Prudential Regulation Authority (PRA) and Solvency II Regulations (Solvency II). AGE adopted the full framework required by Solvency II on January 1, 2016, which is the date they became effective. In calculating its Own Funds (regulatory capital resources under Solvency II), AGE starts with its UK GAAP Balance Sheet and makes the adjustments required by Solvency II. The significant adjustments relate to reinsurance recoverable, future premiums and reinsurance commissions receivable, provision for unearned premiums and unexpired risks provisions, technical provision, future reinsurance premiums payable, and reinsurance commissions deferred. As of December 31, 2017 and December 31, 2016, AGE's Own Funds were in excess of its Solvency Capital Requirement. Insurance Company Dividends and Capital Dividends and Return of Capital By Insurance Company Subsidiaries Year Ended December 31, 2017 2016 2015 (in millions) Dividends paid by AGC to AGUS $ 107 $ 79 $ 90 Dividends paid by AGM to AGMH 196 247 215 Dividends paid by AG Re to AGL 125 100 150 Dividends paid by MAC to MAC Holdings (1) 36 — — Redemption of common stock by AGM to AGMH 101 300 — Redemption of common stock by MAC to MAC Holdings (1) 250 — — Repayment of surplus note by MAC to AGM — 100 — Repayment of surplus note by MAC to MAC Holdings (1) — 300 — Repayment of surplus note by AGM to AGMH — — 25 ____________________ (1) MAC Holdings distributed nearly the entire amounts to AGM and AGC, in proportion to their ownership percentages. On December 21, 2017, the MIA approved AGC's request to repurchase its shares of common stock from its direct parent, AGUS. AGC paid $200 million in January 2018. United States Under New York insurance law, AGM and MAC may only pay dividends out of "earned surplus," which is the portion of the company's surplus that represents the net earnings, gains or profits (after deduction of all losses) that have not been distributed to shareholders as dividends, transferred to stated capital or capital surplus, or applied to other purposes permitted by law, but does not include unrealized appreciation of assets. AGM and MAC may each pay dividends without the prior approval of the New York Superintendent of Financial Services (New York Superintendent) that, together with all dividends declared or distributed by it during the preceding 12 months, do not exceed the lesser of 10% of its policyholders' surplus (as of its last annual or quarterly statement filed with the New York Superintendent) or 100% of its adjusted net investment income during that period. The maximum amount available during 2018 for AGM to distribute as dividends without regulatory approval is estimated to be approximately $190 million . Of such $190 million , approximately $73 million is available for distribution in the first quarter of 2018. The maximum amount available during 2018 for MAC to distribute as dividends to MAC Holdings, which is owned by AGM and AGC, without regulatory approval is estimated to be approximately $27 million , of which approximately $3 million is available for distribution in the first quarter of 2018. Under Maryland's insurance law, AGC may, with prior notice to the Maryland Insurance Commissioner, pay an ordinary dividend that, together with all dividends paid in the prior 12 months, does not exceed the lesser of 10% of its policyholders' surplus (as of the prior December 31) or 100% of its adjusted net investment income during that period. The maximum amount available during 2018 for AGC to distribute as ordinary dividends is approximately $133 million . Of such $133 million , approximately $54 million is available for distribution in the first quarter of 2018. Bermuda For AG Re, any distribution (including repurchase of shares) of any share capital, contributed surplus or other statutory capital that would reduce its total statutory capital by 15% or more of its total statutory capital as set out in its previous year's financial statements requires the prior approval of the Authority. Separately, dividends are paid out of an insurer's statutory surplus and cannot exceed that surplus. Further, annual dividends cannot exceed 25% of total statutory capital and surplus as set out in its previous year's financial statements, which is $324 million , without AG Re certifying to the Authority that it will continue to meet required margins. As of December 31, 2016, the Authority now requires insurers to prepare statutory financial statements in accordance with the particular accounting principles adopted by the insurer (which, in the case of AG Re, are U.S. GAAP), subject to certain adjustments. As a result of this new requirement, certain assets previously non-admitted by AG Re are now admitted, resulting in an increase to AG Re’s statutory capital and surplus limitation. Based on the foregoing limitations, in 2018 AG Re has the capacity to (i) make capital distributions in an aggregate amount up to $128 million without the prior approval of the Authority and (ii) declare and pay dividends in an aggregate amount up to approximately $324 million as of December 31, 2017 . Such dividend capacity can be further limited by the actual amount of AG Re’s unencumbered assets, which amount changes from time to time due in part to collateral posting requirements. As of December 31, 2017 , AG Re had unencumbered assets of approximately $554 million . United Kingdom U.K. company law prohibits each of AGE, AGLN and AGUK from declaring a dividend to its shareholders unless it has “profits available for distribution.” The determination of whether a company has profits available for distribution is based on its accumulated realized profits less its accumulated realized losses. While the U.K. insurance regulatory laws impose no statutory restrictions on a general insurer's ability to declare a dividend, the PRA's capital requirements may in practice act as a restriction on dividends. In addition, AGLN currently must confirm that the PRA does not object to the payment of any dividend to its parent company before AGLN makes any dividend payment. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Accounting Policy The provision for income taxes consists of an amount for taxes currently payable and an amount for deferred taxes. Deferred income taxes are provided for temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities, using enacted rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded to reduce the deferred tax asset to an amount that is more likely than not to be realized. Non-interest-bearing tax and loss bonds are purchased in the amount of the tax benefit that results from deducting contingency reserves as provided under Internal Revenue Code Section 832(e). The Company records the purchase of tax and loss bonds in deferred taxes. The Company recognizes tax benefits only if a tax position is “more likely than not” to prevail. Overview AGL, and its "Bermuda Subsidiaries," which consist of AG Re, AGRO, and Cedar Personnel Ltd., are not subject to any income, withholding or capital gains taxes under current Bermuda law. The Company has received an assurance from the Minister of Finance in Bermuda that, in the event of any taxes being imposed, AGL and its Bermuda Subsidiaries will be exempt from taxation in Bermuda until March 31, 2035. AGL's U.S. and U.K. subsidiaries are subject to income taxes imposed by U.S. and U.K. authorities, respectively, and file applicable tax returns. In addition, AGRO, a Bermuda domiciled company, has elected under Section 953(d) of the U.S. Internal Revenue Code (the Code) to be taxed as a U.S. domestic corporation. In November 2013, AGL became tax resident in the U.K. although it remains a Bermuda-based company and its administrative and head office functions continue to be carried on in Bermuda. As a U.K. tax resident company, AGL is required to file a corporation tax return with Her Majesty’s Revenue & Customs (HMRC). AGL is subject to U.K. corporation tax in respect of its worldwide profits (both income and capital gains), subject to any applicable exemptions. The blended rate of corporation tax was at 19.25% for 2017. AGL has also registered in the U.K. to report its Value Added Tax (VAT) liability. The current rate of VAT is 20% . Assured Guaranty expects that the dividends AGL receives from its direct subsidiaries will be exempt from U.K. corporation tax due to the exemption in section 931D of the U.K. Corporation Tax Act 2009. In addition, any dividends paid by AGL to its shareholders should not be subject to any withholding tax in the U.K. Assured Guaranty does not expect any profits of non-U.K. resident members of the group to be taxed under the U.K. "controlled foreign companies" regime and has obtained a clearance from HMRC confirming this on the basis of current facts. AGUS files a consolidated federal income tax return with all of its U.S. subsidiaries. AGE, the Company’s U.K. subsidiary, had previously elected under U.S. Internal Revenue Code Section 953(d) to be taxed as a U.S. company. In January 2017, AGE filed a request with the U.S. Internal Revenue Service (IRS) to revoke the election, which was approved in May 2017. As a result of the revocation of the Section 953(d) election, AGE will no longer be liable to pay future U.S. taxes beginning in 2017. On January 10, 2017, AGC purchased MBIA UK, a U.K. based insurance company. After the purchase, MBIA UK changed its name to AGLN and continues to file its tax returns in the U.K. as a separate entity. For additional information on the MBIA UK Acquisition, see Note 2, Acquisitions. Assured Guaranty Overseas US Holdings Inc. and its subsidiaries AGRO and AG Intermediary Inc. file their own consolidated federal income tax return. Effect of the Tax Act On December 22, 2017, the Tax Act was signed into law. The Tax Act changed many items of U.S. corporate income taxation, including a reduction of the corporate income tax rate from 35% to 21% , implementation of a territorial tax system and imposition of a tax on deemed repatriated earnings of non-U.S. subsidiaries. At December 31, 2017, the Company had not completed accounting for the tax effects of the Tax Act; however, the Company made a reasonable estimate of the effects on the existing deferred tax balances and the one-time transition tax. The Company recognized a provisional amount of $61 million , which is included as a component of income tax expense from continuing operations. The Company will continue to assess its provision for income taxes as future guidance is issued. Any adjustments, if necessary, during the measurement period guidance outlined in Staff Accounting Bulletin No. 118 will be included in net earnings from continuing operations as an adjustment to income tax expense in the reporting period when such adjustments are determined. Provisional Amounts Deferred Tax Assets and Liabilities The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21% . However, the Company is still analyzing certain aspects of the Tax Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of its deferred tax balance was $37 million . Foreign Tax Effects The one-time transition tax is based on total post-1986 earnings and profits (E&P) for which the Company had previously deferred U.S. income taxes. The Company recorded a provisional amount for its one-time transition tax liability on non-U.S. subsidiaries less realizable foreign tax credits (FTCs) and a write off of deferred tax liabilities on unremitted earnings, resulting in an increase in income tax expense of $24 million . The Company has not yet completed its calculation of the total post-1986 foreign E&P for these non-U.S. subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when the Company finalizes the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation. The table below summarizes the impact of the Tax Act on the consolidated statements of operations. Summary of the Tax Act Effect Year Ended December 31, 2017 (in millions) Transition tax $ 93 Foreign tax credit realized (31 ) Write down of unremitted earnings (38 ) Net impact of repatriation 24 Write down of deferred tax asset due to tax rate change 37 Net impact of Tax Act $ 61 Provision for Income Taxes The effective tax rates reflect the proportion of income recognized by each of the Company’s operating subsidiaries, with U.S. subsidiaries taxed at the U.S. marginal corporate income tax rate of 35% , U.K. subsidiaries taxed at the U.K. blended marginal corporate tax rate of 19.25% unless taxed as a U.S. controlled foreign corporation, and no taxes for the Company’s Bermuda Subsidiaries unless subject to U.S. tax by election. For periods subsequent to April 1, 2017, the U.K. corporation tax rate has been reduced to 19% . For the periods between April 1, 2015 and March 31, 2017, the U.K. corporation tax rate was 20% . The Company’s overall effective tax rate fluctuates based on the distribution of income across jurisdictions. A reconciliation of the difference between the provision for income taxes and the expected tax provision at statutory rates in taxable jurisdictions is presented below. Effective Tax Rate Reconciliation Year Ended December 31, 2017 2016 2015 (in millions) Expected tax provision (benefit) at statutory rates in taxable jurisdictions $ 300 $ 316 $ 443 Tax-exempt interest (49 ) (49 ) (54 ) Goodwill impairment and gain on bargain purchase price (20 ) (125 ) (19 ) Change in liability for uncertain tax positions (26 ) 11 12 Effect of provision to tax return filing adjustments (8 ) (15 ) (11 ) State taxes 9 3 1 Effect of Tax Act 61 — — Other (6 ) (5 ) 3 Total provision (benefit) for income taxes $ 261 $ 136 $ 375 Effective tax rate 26.3 % 13.4 % 26.2 % The change in liability for uncertain tax positions for 2017 is driven by the closure of the 2009 – 2012 IRS Audit, see "Audits" below for further discussion. The expected tax provision at statutory rates in taxable jurisdictions is calculated as the sum of pretax income in each jurisdiction multiplied by the statutory tax rate of the jurisdiction by which it will be taxed. Pretax income of the Company’s subsidiaries which are not U.S. or U.K. domiciled but are subject to U.S. or U.K. tax by election, establishment of tax residency or as controlled foreign corporations, are included at the U.S. or U.K. statutory tax rate. Where there is a pretax loss in one jurisdiction and pretax income in another, the total combined expected tax rate may be higher or lower than any of the individual statutory rates. The following table presents pretax income and revenue by jurisdiction. Pretax Income (Loss) by Tax Jurisdiction Year Ended December 31, 2017 2016 2015 (in millions) United States $ 873 $ 921 $ 1,284 Bermuda 145 126 177 U.K. (27 ) (30 ) (30 ) Total $ 991 $ 1,017 $ 1,431 Revenue by Tax Jurisdiction Year Ended December 31, 2017 2016 2015 (in millions) United States $ 1,543 $ 1,442 $ 1,853 Bermuda 216 239 361 U.K. (20 ) (4 ) (7 ) Total $ 1,739 $ 1,677 $ 2,207 Pretax income by jurisdiction may be disproportionate to revenue by jurisdiction to the extent that insurance losses incurred are disproportionate. Components of Net Deferred Tax Assets As of December 31, 2017 2016 (in millions) Deferred tax assets: Unrealized losses on credit derivative financial instruments, net $ 20 $ 66 Unearned premium reserves, net 124 229 Loss and LAE reserve — 216 Tax and loss bonds — 50 Alternative minimum tax credit 59 17 Foreign tax credit 43 20 DAC — 29 Investment basis difference 63 76 Deferred compensation 21 40 Net operating loss 38 64 FG VIE 13 14 Other 14 29 Total deferred income tax assets 395 850 Deferred tax liabilities: Contingency reserves — 82 Public debt 53 91 Unrealized appreciation on investments 91 84 Unrealized gains on CCS 13 22 Market discount 28 22 Loss and LAE reserve 27 — DAC 12 — Deferred balances related to non-US affiliates 16 3 Other 14 30 Total deferred income tax liabilities 254 334 Less: Valuation allowance 43 19 Net deferred income tax asset $ 98 $ 497 As of December 31, 2017 , the Company had alternative minimum tax credits of $59 million which, pursuant to the Tax Act, are available as a credit to offset regular tax liability over the next three years with any excess refundable by 2021. During 2017 the Company generated $31 million of FTC to carry forward as a result of the Tax Act’s deemed repatriation of previously untaxed unremitted foreign earnings. The Company has established a full valuation allowance against the entire FTC balance. See the valuation allowance discussion below. As part of the CIFG Acquisition, the Company acquired $189 million of NOL which will begin to expire in 2033. The NOL has been limited under Internal Revenue Code Section 382 due to a change in control as a result of the acquisition. As of December 31, 2017 , the Company had $182 million of NOL’s available to offset its future U.S. taxable income. Valuation Allowance The Company has $12 million of FTC from previous acquisitions and $31 million of FTC due to the Tax Act for use against regular tax in future years. FTCs will begin to expire in 2020 and will fully expire by 2027. In analyzing the future realizability of FTCs, the Company notes limitations on future foreign source income due to overall foreign losses as negative evidence. After reviewing positive and negative evidence, the Company came to the conclusion that it is more likely than not that the FTC of $43 million will not be utilized, and therefore recorded a valuation allowance with respect to this tax attribute. The Company came to the conclusion that it is more likely than not that the remaining net deferred tax asset will be fully realized after weighing all positive and negative evidence available as required under GAAP. The positive evidence that was considered included the cumulative income the Company has earned over the last three years, and the significant unearned premium income to be included in taxable income. The positive evidence outweighs any negative evidence that exists. As such, the Company believes that no valuation allowance is necessary in connection with this deferred tax asset. The Company will continue to analyze the need for a valuation allowance on a quarterly basis. Audits As of December 31, 2017 , AGUS had open tax years with the U.S. Internal Revenue Service (IRS) for 2013 to present. In December 2016, the IRS issued a Revenue Agent Report (RAR) which did not identify any material adjustments that were not already accounted for in the prior periods. In April 2017, the Company received a final letter from the IRS to close the audit with no additional findings or changes, and as a result the Company released previously recorded uncertain tax position reserves and accrued interest of approximately $37 million in the second quarter of 2017. Assured Guaranty Oversees US Holdings Inc. has open tax years of 2014 forward. The Company's U.K. subsidiaries are not currently under examination and have open tax years of 2015 forward. CIFGNA, which was acquired by AGC during 2016, is not currently under examination and has open tax years of 2014 to present. The Company's French subsidiary, CIFGE, is under examination for the period January 1, 2015 through December 31, 2016, and has open tax years of 2014 to present. Uncertain Tax Positions The following table provides a reconciliation of the beginning and ending balances of the total liability for unrecognized tax positions. 2017 2016 2015 (in millions) Balance as of January 1, $ 50 $ 40 $ 28 Effect of provision to tax return filing adjustments 8 6 10 Increase in unrecognized tax positions as a result of position taken during the current period 1 4 2 Decrease in unrecognized tax positions as a result of settlement of positions taken during the prior period (31 ) — — Balance as of December 31, $ 28 $ 50 $ 40 The Company's policy is to recognize interest related to uncertain tax positions in income tax expense and has accrued $1 million for 2017 , $2 million for 2016 and $1 million for 2015 . As of December 31, 2017 and December 31, 2016 , the Company has accrued $3 million and $7 million of interest, respectively. The total amount of reserves for unrecognized tax positions, including accrued interest, as of December 31, 2017 would affect the effective tax rate, if recognized. The reduction in reserves is driven by the closure of the 2009- 2012 IRS Audit. |
Reinsurance and Other Monoline
Reinsurance and Other Monoline Exposures | 12 Months Ended |
Dec. 31, 2017 | |
Insurance [Abstract] | |
Reinsurance and Other Monoline Exposures | Reinsurance and Other Monoline Exposures The Company assumes exposure (Assumed Business) and may cede portions of exposure it has insured (Ceded Business) in exchange for premiums, net of ceding commissions. Substantially all of the Company’s Assumed Business and Ceded Business relates to financial guaranty insurance, except for a modest amount that relates to non-financial guaranty business assumed by AGRO. The Company historically entered into, and with respect to new business originated by AGRO continues to enter into, ceded reinsurance contracts in order to obtain greater business diversification and reduce the net potential loss from large risks. Accounting Policy For business assumed and ceded, the accounting model of the underlying direct financial guaranty contract dictates the accounting model used for the reinsurance contract (except for those eliminated as FG VIEs). For any assumed or ceded financial guaranty insurance premiums and losses, the accounting models described in Note 6 are followed. For any assumed or ceded credit derivative contracts, the accounting model in Note 8 is followed. Assumed and Ceded Financial Guaranty Business The Company assumes financial guaranty business (Assumed Financial Guaranty Business) from third party insurers, primarily other monoline financial guaranty companies. Under these relationships, the Company assumes a portion of the ceding company’s insured risk in exchange for a portion of the ceding company's premium for the insured risk (typically, net of a ceding commission). The Company’s facultative and treaty agreements are generally subject to termination at the option of the ceding company: • if the Company fails to meet certain financial and regulatory criteria and to maintain a specified minimum financial strength rating, or • upon certain changes of control of the Company. Upon termination under these conditions, the Company may be required (under some of its reinsurance agreements) to return to the ceding company unearned premiums (net of ceding commissions) and loss reserves calculated on a statutory basis of accounting, attributable to reinsurance assumed pursuant to such agreements after which the Company would be released from liability with respect to the Assumed Financial Guaranty Business. Upon the occurrence of the conditions set forth in the first bullet above, whether or not an agreement is terminated, the Company may be required to obtain a letter of credit or alternative form of security to collateralize its obligation to perform under such agreement or it may be obligated to increase the level of ceding commission paid. The downgrade of the financial strength ratings of AG Re or of AGC gives certain ceding companies the right to recapture business they had ceded to AG Re and AGC, which would lead to a reduction in the Company's unearned premium reserve and related earnings on such reserve. With respect to a significant portion of the Company's in-force Assumed Financial Guaranty Business, based on AG Re's and AGC's current ratings and subject to the terms of each reinsurance agreement, the third party ceding company may have the right to recapture business it had ceded to AG Re and/or AGC, and in connection therewith, to receive payment from AG Re or AGC of an amount equal to the statutory unearned premium (net of ceding commissions) and statutory loss reserves (if any) associated with that business, plus, in certain cases, an additional required payment. As of December 31, 2017 , if each third party insurer ceding business to AG Re and/or AGC had a right to recapture such business, and chose to exercise such right, the aggregate amounts that AG Re and AGC could be required to pay to all such companies would be approximately $46 million and $15 million , respectively. The Company has ceded financial guaranty business to non-affiliated companies to limit its exposure to risk. Under these relationships, the Company ceded a portion of its insured risk to the reinsurer in exchange for the reinsurer receiving a share of the Company's premiums for the insured risk (typically, net of a ceding commission). The Company remains primarily liable for all risks it directly underwrites and is required to pay all gross claims. It then seeks reimbursement from the reinsurer for its proportionate share of claims. The Company may be exposed to risk for this exposure if it were required to pay the gross claims and not be able to collect ceded claims from an assuming company experiencing financial distress. A number of the financial guaranty insurers to which the Company has ceded par have experienced financial distress and been downgraded by the rating agencies as a result. In addition, state insurance regulators have intervened with respect to some of these insurers. The Company’s ceded contracts generally allow the Company to recapture ceded financial guaranty business after certain triggering events, such as reinsurer downgrades. The following table presents the components of premiums and losses reported in the consolidated statements of operations and the contribution of the Company's Assumed and Ceded Businesses (both financial guaranty and non-financial guaranty). Effect of Reinsurance on Statement of Operations Year Ended December 31, 2017 2016 2015 (in millions) Premiums Written: Direct $ 297 $ 165 $ 164 Assumed(1) 10 (11 ) 17 Ceded(2) 18 (17 ) 10 Net $ 325 $ 137 $ 191 Premiums Earned: Direct $ 693 $ 887 $ 792 Assumed 27 27 40 Ceded (30 ) (50 ) (66 ) Net $ 690 $ 864 $ 766 Loss and LAE: Direct $ 404 $ 327 $ 399 Assumed 11 0 45 Ceded (27 ) (32 ) (20 ) Net $ 388 $ 295 $ 424 ____________________ (1) Negative assumed premiums written were due to changes in expected debt service schedules. (2) Positive ceded premiums written were due to commutations and changes in expected debt service schedules. In addition to the items presented in the table above, the Company records in the consolidated statements of operations, the effect of assumed and ceded credit derivative exposures. These amounts were losses of $0.8 million in 2017 , $27 million in 2016 and $3 million in 2015 . Exposure to Reinsurers (1) As of December 31, 2017 2016 (in millions) Due (To) From: Assumed premium, net of commissions $ 53 $ 65 Ceded premium, net of commissions (42 ) (46 ) Assumed expected loss to be paid (71 ) (70 ) Ceded expected loss to be paid 29 87 Par Outstanding: Ceded par outstanding (2) 4,434 11,156 Assumed par outstanding 8,383 13,264 Second-to-pay insured par outstanding (3) 6,605 11,539 ____________________ (1) The total collateral posted by all non-affiliated reinsurers required to post, or that had agreed to post, collateral as of December 31, 2017 and December 31, 2016 was approximately $118 million and $387 million , respectively. (2) Of the total ceded par to unrated or BIG rated reinsurers, $296 million and $384 million is rated BIG as of December 31, 2017 and December 31, 2016 , respectively. (3) The par on second-to-pay exposure where the primary insurer and underlying transaction rating are both BIG and/or not rated is $204 million and $788 million as of December 31, 2017 and December 31, 2016 , respectively. Second-to-pay insured par outstanding represents transactions the Company has insured that were previously insured by such other monoline financial guaranty insurers. The Company underwrites such transactions based on the underlying insured obligation without regard to the primary insurer. In accordance with U.S. statutory accounting requirements and U.S. insurance laws and regulations, in order for the Company to receive credit for liabilities ceded to reinsurers domiciled outside of the U.S., such reinsurers must secure their liabilities to the Company. These reinsurers are required to post collateral for the benefit of the Company in an amount at least equal to the sum of their ceded unearned premium reserve, loss reserves and contingency reserves all calculated on a statutory basis of accounting. In addition, certain authorized reinsurers post collateral on terms negotiated with the Company. Commutations During the first quarter of 2017, the Company entered into a commutation agreement to reassume the entire portfolio previously ceded to one of its unaffiliated reinsurers, consisting predominantly (over 97% ) of U.S. public finance and international public and project finance exposures. During the third quarter of 2017, the Company entered into two commutation agreements. In one case, it reassumed the entire portfolio previously ceded to one of its unaffiliated reinsurers under quota share reinsurance, consisting predominantly of U.S. public finance and international public and project finance exposures. In the other case, it reassumed a portion of the portfolio previously ceded to one of its other unaffiliated reinsurers. The table below summarizes the effect of commutations. Commutations of Ceded Reinsurance Contracts Year Ended December 31, 2017 2016 2015 (in millions) Increase (decrease) in net unearned premium reserve $ 82 $ — $ 23 Increase (decrease) in net par outstanding 5,107 28 855 Commutation gains (losses) 328 8 28 Excess of Loss Reinsurance Facility Effective January 1, 2018, AGC, AGM and MAC entered into a $400 million aggregate excess of loss reinsurance facility of which $180 million was placed with an unaffiliated reinsurer. This facility replaces a similar $400 million aggregate excess of loss reinsurance facility, of which $360 million was placed with unaffiliated reinsurers, that AGC, AGM and MAC had entered into effective January 1, 2016 and which terminated on December 31, 2017. The new facility covers losses occurring either from January 1, 2018 through December 31, 2024, or January 1, 2019 through December 31, 2025, at the option of AGC, AGM and MAC. It terminates on January 1, 2020, unless AGC, AGM and MAC choose to extend it. The new facility covers certain U.S. public finance exposures insured or reinsured by AGC, AGM and MAC as of September 30, 2017, excluding exposures that were rated non-investment grade as of December 31, 2017 by Moody’s or S&P or internally by AGC, AGM or MAC and is subject to certain per credit limits. Among the exposures excluded are those associated with the Commonwealth of Puerto Rico and its related authorities and public corporations. The new facility attaches when AGC’s, AGM’s and MAC’s net losses (net of AGC’s and AGM's reinsurance (including from affiliates) and net of recoveries) exceed $0.8 billion in the aggregate. The new facility covers a portion of the next $400 million of losses, with the reinsurer assuming $180 million of the $400 million of losses and AGC, AGM and MAC jointly retaining the remaining $220 million . The reinsurer is required to be rated at least AA- or to post collateral sufficient to provide AGM, AGC and MAC with the same reinsurance credit as reinsurers rated AA-. AGM, AGC and MAC are obligated to pay the reinsurer its share of recoveries relating to losses during the coverage period in the covered portfolio. AGC, AGM and MAC paid approximately $3.2 million of premiums in 2018 for the term January 1, 2018 through December 31, 2018 and deposited approximately $3.2 million in cash into a trust account for the benefit of the reinsurer to be used to pay the premiums for 2019. The main differences between the new facility and the prior facility that terminated on December 31, 2017 are the reinsurance attachment point ( $0.8 billion versus $1.25 billion ), the total reinsurance coverage ( $180 million part of $400 million versus $360 million part of $400 million ) and the annual premium ( $3.2 million versus $9 million ). Reinsurance of SGI’s Insured Portfolio On February 2, 2018, AGC entered into an agreement with SGI to reinsure, generally on a 100% quota share basis, substantially all of SGI’s insured portfolio. The transaction also includes the commutation of a book of business ceded to SGI by AGM. The transactions reinsured and commuted will total approximately $14.5 billion . As consideration for the transaction, at closing, SGI will pay $360 million and assign installment premiums estimated to total $55 million in present value to Assured Guaranty. The reinsured portfolio consists predominantly of public finance and infrastructure obligations that meet AGC’s new business underwriting criteria. Additionally, on behalf of SGI, AGC will provide certain administrative services on the assumed portfolio, including surveillance, risk management, and claims processing. The transaction is subject to regulatory approval and other closing conditions, and is expected to close by the end of the second quarter of 2018. Assumed and Ceded Non-Financial Guaranty Business As described in Note 4, Outstanding Exposure, Non-Financial Guaranty Insurance, the Company, through AGRO, assumes non-financial guaranty business from third party insurers (Assumed Non-Financial Guaranty Business). It also retrocedes some of this business to third party reinsurers. The downgrade of AGRO’s financial strength rating by S&P below “A” would require AGRO to post, as of December 31, 2017 , an estimated $4 million of collateral in respect of certain of its Assumed Non-Financial Guaranty Business. A further downgrade of AGRO’s S&P rating below A- would give the company ceding such business the right to recapture the business for AGRO’s collateral amount, and, if also accompanied by a downgrade of AGRO's financial strength rating by A.M. Best Company, Inc. below A-, would also require AGRO to post, as of December 31, 2017 , an estimated $9 million of collateral in respect of a different portion of AGRO’s Assumed Non-Financial Guaranty Business. AGRO’s ceded contracts generally have equivalent provisions requiring the assuming reinsurer to post collateral and/or allowing AGRO to recapture the ceded business upon certain triggering events, such as reinsurer rating downgrades. Other Monoline Exposure As of December 31, 2017 , based on fair value, the Company had fixed-maturity securities in its investment portfolio consisting of $91 million insured by National Public Finance Guarantee Corporation, $68 million insured by Ambac and $8 million insured by other guarantors. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Wellington Management Company, LLP (Wellington) and BlackRock Financial Management, Inc. (BlackRock), each own more than 5% of the Company's common shares, and each are investment managers for a portion of the Company's investment portfolio. The net expenses from transactions with Wellington and BlackRock were approximately $4.1 million in 2017 and $ 4.2 million in 2016 . The net expenses from transactions with Wellington were $1.9 million in 2015 . As of December 31, 2017 and 2016 there were no other significant amounts payable to or amounts receivable from related parties, other than compensation in the ordinary course of business. The Company used a portion of its share repurchase program to repurchase 297,131 common shares from its Chief Executive Officer and 23,062 common shares from its then General Counsel on January 6, 2017. The shares were purchased at the closing price of a common share of the Company on the New York Stock Exchange on January 6, 2017. Separately, these officers also received 297,131 and 23,062 common shares, respectively, on January 6, 2017 in settlement of 297,131 share units and 23,062 share units held by them in the employer stock fund of the Assured Guaranty Ltd. Supplemental Employee Retirement Plan (the AGL SERP). The distribution of shares occurred in January 2017 pursuant to the terms of an amendment adopted in 2011 to the AGL SERP. Such amendment was adopted to comply with requirements of Section 409A of the Code and Section 457A of the Code, which required all grandfathered amounts (within the meaning of Section 457A of the Code), including the units in the employer stock fund in the AGL SERP, to be included in the income of the applicable participant no later than 2017. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases AGL and its subsidiaries are party to various lease agreements accounted for as operating leases. The Company leases and occupies approximately 103,500 square feet in New York City through 2032. Subject to certain conditions, the Company has an option to renew the lease for five years at a fair market rent. In addition, AGL and its subsidiaries lease additional office space in various locations under non-cancelable operating leases which expire at various dates through 2029. Rent expense was $8.7 million in 2017 , $ 13.4 million in 2016 and $ 10.5 million in 2015 . The future minimum rental payments as of December 31, 2017 are as follows: Future Minimum Rental Payments Year (in millions) 2018 $ 8 2019 9 2020 9 2021 8 2022 9 Thereafter 80 Total $ 123 Legal Proceedings Lawsuits arise in the ordinary course of the Company’s business. It is the opinion of the Company’s management, based upon the information available, that the expected outcome of litigation against the Company, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position or liquidity, although an adverse resolution of litigation against the Company in a fiscal quarter or year could have a material adverse effect on the Company’s results of operations in a particular quarter or year. In addition, in the ordinary course of their respective businesses, certain of AGL's subsidiaries assert claims in legal proceedings against third parties to recover losses paid in prior periods or prevent losses in the future. For example, the Company has commenced a number of legal actions in the U.S. District Court for the District of Puerto Rico to enforce its rights with respect to the obligations it insures of Puerto Rico and various of its related authorities and public corporations. See the "Exposure to Puerto Rico" section of Note 4, Outstanding Exposure, for a description of such actions. Also refer to the "Recovery Litigation" section of Note 5, Expected Loss to be Paid, for a description of recovery litigation unrelated to Puerto Rico. The amounts, if any, the Company will recover in these and other proceedings to recover losses are uncertain, and recoveries, or failure to obtain recoveries, in any one or more of these proceedings during any quarter or year could be material to the Company's results of operations in that particular quarter or year. The Company also receives subpoenas duces tecum and interrogatories from regulators from time to time. Accounting Policy The Company establishes accruals for litigation and regulatory matters to the extent it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but if the matter is material, it is disclosed, including matters discussed below. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews. Litigation On November 28, 2011, Lehman Brothers International (Europe) (in administration) (LBIE) sued AG Financial Products Inc. (AGFP), an affiliate of AGC which in the past had provided credit protection to counterparties under CDS. AGC acts as the credit support provider of AGFP under these CDS. LBIE’s complaint, which was filed in the Supreme Court of the State of New York, alleged that AGFP improperly terminated nine credit derivative transactions between LBIE and AGFP and improperly calculated the termination payment in connection with the termination of 28 other credit derivative transactions between LBIE and AGFP. Following defaults by LBIE, AGFP properly terminated the transactions in question in compliance with the agreement between AGFP and LBIE, and calculated the termination payment properly. AGFP calculated that LBIE owes AGFP approximately $29 million in connection with the termination of the credit derivative transactions, whereas LBIE asserted in the complaint that AGFP owes LBIE a termination payment of approximately $1.4 billion . On February 3, 2012, AGFP filed a motion to dismiss certain of the counts in the complaint, and on March 15, 2013, the court granted AGFP's motion to dismiss the count relating to improper termination of the nine credit derivative transactions and denied AGFP's motion to dismiss the counts relating to the remaining transactions. On February 22, 2016, AGFP filed a motion for summary judgment on the remaining causes of action asserted by LBIE and on AGFP's counterclaims. LBIE's administrators disclosed in an April 10, 2015 report to LBIE’s unsecured creditors that LBIE's valuation expert has calculated LBIE's claim for damages in aggregate for the 28 transactions to range between a minimum of approximately $200 million and a maximum of approximately $500 million , depending on what adjustment, if any, is made for AGFP's credit risk and excluding any applicable interest. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Credit Facilities | Long-Term Debt and Credit Facilities Accounting Policy Long-term debt is recorded at principal amounts net of any unamortized original issue discount or premium and unamortized fair value adjustment for AGMH debt (as of the date of the AGMH acquisition). Discounts and acquisition date fair value adjustments are accreted into interest expense over the life of the applicable debt. Long Term Debt The Company has outstanding long-term debt comprising primarily debt issued by AGUS and AGMH. All of such debt is fully and unconditionally guaranteed by AGL; AGL's guarantee of the junior subordinated debentures is on a junior subordinated basis. Debt Issued by AGUS 7 % Senior Notes. On May 18, 2004, AGUS issued $200 million of 7 % Senior Notes due 2034 ( 7 % Senior Notes) for net proceeds of $197 million . Although the coupon on the Senior Notes is 7 %, the effective rate is approximately 6.4% , taking into account the effect of a cash flow hedge executed by the Company in March 2004. The notes are redeemable, in whole or in part at their principal amount plus accrued and unpaid interest to the date of redemption or, if greater, the make-whole redemption price. 5 % Senior Notes. On June 20, 2014, AGUS issued $500 million of 5 % Senior Notes due 2024 ( 5 % Senior Notes) for net proceeds of $495 million . The notes are guaranteed by AGL. The net proceeds from the sale of the notes were used for general corporate purposes, including the purchase of AGL common shares. The notes are redeemable, in whole or in part at their principal amount plus accrued and unpaid interest to the date of redemption or, if greater, the make-whole redemption price. Series A Enhanced Junior Subordinated Debentures. On December 20, 2006, AGUS issued $150 million of Debentures due 2066. The Debentures paid a fixed 6.4% rate of interest until December 15, 2016, and thereafter pay a floating rate of interest, reset quarterly, at a rate equal to three month LIBOR plus a margin equal to 2.38% . AGUS may select at one or more times to defer payment of interest for one or more consecutive periods for up to ten years. Any unpaid interest bears interest at the then applicable rate. AGUS may not defer interest past the maturity date. The debentures are redeemable, in whole or in part at their principal amount plus accrued and unpaid interest to the date of redemption. Debt Issued by AGMH 6 7/8 % QUIBS. On December 19, 2001, AGMH issued $100 million face amount of 6 7/8 % QUIBS due December 15, 2101, which are redeemable without premium or penalty in whole or in part at their principal amount plus accrued and unpaid interest to the date of redemption. 6.25 % Notes. On November 26, 2002, AGMH issued $230 million face amount of 6.25 % Notes due November 1, 2102, which are redeemable without premium or penalty in whole or in part at their principal amount plus accrued and unpaid interest to the date of redemption. 5.6 % Notes. On July 31, 2003, AGMH issued $100 million face amount of 5.6 % Notes due July 15, 2103, which are redeemable without premium or penalty in whole or in part at their principal amount plus accrued and unpaid interest to the date of redemption. Junior Subordinated Debentures. On November 22, 2006, AGMH issued $300 million face amount of Junior Subordinated Debentures with a scheduled maturity date of December 15, 2036 and a final repayment date of December 15, 2066. The final repayment date of December 15, 2066 may be automatically extended up to four times in five -year increments provided certain conditions are met. The debentures are redeemable, in whole or in part, at any time prior to December 15, 2036 at their principal amount plus accrued and unpaid interest to the date of redemption or, if greater, the make-whole redemption price. Interest on the debentures will accrue from November 22, 2006 to December 15, 2036 at the annual rate of 6.4% . If any amount of the debentures remains outstanding after December 15, 2036, then the principal amount of the outstanding debentures will bear interest at a floating interest rate equal to one -month LIBOR plus 2.215% until repaid. AGMH may elect at one or more times to defer payment of interest on the debentures for one or more consecutive interest periods that do not exceed ten years. In connection with the completion of this offering, AGMH entered into a replacement capital covenant for the benefit of persons that buy, hold or sell a specified series of AGMH long-term indebtedness ranking senior to the debentures. Under the covenant, the debentures will not be repaid, redeemed, repurchased or defeased by AGMH or any of its subsidiaries on or before the date that is 20 years prior to the final repayment date, except to the extent that AGMH has received proceeds from the sale of replacement capital securities. The proceeds from this offering were used to pay a dividend to the shareholders of AGMH. The principal and carrying values of the Company’s long-term debt are presented in the table below. Principal and Carrying Amounts of Debt As of December 31, 2017 As of December 31, 2016 Principal Carrying Value Principal Carrying Value (in millions) AGUS: 7% Senior Notes (1) $ 200 $ 197 $ 200 $ 197 5% Senior Notes (1) 500 496 500 496 Series A Enhanced Junior Subordinated Debentures (2) 150 150 150 150 Total AGUS 850 843 850 843 AGMH(3): 6 7 / 8 % QUIBS (1) 100 70 100 69 6.25% Notes (1) 230 142 230 141 5.6% Notes (1) 100 57 100 56 Junior Subordinated Debentures (2) 300 192 300 187 Total AGMH 730 461 730 453 AGM(3): AGM Notes Payable 6 6 9 10 Total AGM 6 6 9 10 Purchased debt (4) (28 ) (18 ) — — Total $ 1,558 $ 1,292 $ 1,589 $ 1,306 ____________________ (1) AGL fully and unconditionally guarantees these obligations. (2) Guaranteed by AGL on a junior subordinated basis. (3) Carrying amounts are different than principal amounts due primarily to fair value adjustments at the AGMH acquisition date, which are accreted or amortized into interest expense over the remaining terms of these obligations. (4) In 2017, AGUS purchased $28 million principal amount of AGMH's outstanding Junior Subordinated Debentures. The Company recognized a $9 million loss on extinguishment of debt, which is included in other income. Principal payments due under the long-term debt are as follows: Expected Maturity Schedule of Debt As of December 31, 2017 AGUS AGMH AGM Total (1) (in millions) 2018-2022 $ — $ — $ 5 $ 5 2023-2042 700 — 1 701 2043-2062 — — — — 2063-2082 150 300 — 450 Thereafter — 430 — 430 Total $ 850 $ 730 $ 6 $ 1,586 ____________________ (1) Includes AGMH's purchased debt. Interest Expense Year Ended December 31, 2017 2016 2015 (in millions) AGUS: 7% Senior Notes $ 13 $ 13 $ 13 5% Senior Notes 26 26 26 Series A Enhanced Junior Subordinated Debentures 5 9 10 Total AGUS 44 48 49 AGMH: 6 7 / 8 % QUIBS 7 7 7 6.25% Notes 16 16 16 5.6% Notes 6 6 6 Junior Subordinated Debentures 25 25 25 Total AGMH 54 54 54 AGM: Notes Payable 0 0 (2 ) Total AGM 0 0 (2 ) Purchased debt (1 ) — — Total $ 97 $ 102 $ 101 Intercompany Credit Facility and Intercompany Debt On October 25, 2013, AGL, as borrower, and AGUS, as lender, entered into a revolving credit facility pursuant to which AGL may, from time to time, borrow for general corporate purposes. Under the credit facility, AGUS committed to lend a principal amount not exceeding $225 million in the aggregate. Such commitment terminates on October 25, 2018 (the loan termination date). The unpaid principal amount of each loan will bear interest at a fixed rate equal to 100% of the then applicable Federal short-term or mid-term interest rate, as the case may be, as determined under Section 1274(d) of the Code, and interest on all loans will be computed for the actual number of days elapsed on the basis of a year consisting of 360 days. Accrued interest on all loans will be paid on the last day of each June and December, beginning on December 31, 2013, and at maturity. AGL must repay the then unpaid principal amounts of the loans by the third anniversary of the loan termination date. No amounts are currently outstanding under the credit facility. In addition, in 2012 AGUS borrowed $90 million from its affiliate AGRO to fund the acquisition of MAC. During 2017 and 2016, AGUS repaid $10 million and $20 million , respectively, in outstanding principal as well as accrued and unpaid interest, and the parties agreed to extend the maturity date of the loan from May 2017 to November 2019. As of December 31, 2017 , $60 million remained outstanding. Committed Capital Securities Each of AGC and AGM have entered into put agreements with four separate custodial trusts allowing AGC and AGM, respectively, to issue an aggregate of $200 million of non-cumulative redeemable perpetual preferred securities to the trusts in exchange for cash. The custodial trusts were created for the primary purpose of issuing $50 million face amount of CCS, investing the proceeds in high-quality assets and entering into put options with AGC or AGM, as applicable. The Company does not consider itself to be the primary beneficiary of the trusts and the trusts are not consolidated in Assured Guaranty's financial statements. The trusts provide AGC and AGM access to new equity capital at their respective sole discretion through the exercise of the put options. Upon AGC's or AGM's exercise of its put option, the relevant trust will liquidate its portfolio of eligible assets and use the proceeds to purchase the AGC or AGM preferred stock, as applicable. AGC or AGM may use the proceeds from its sale of preferred stock to the trusts for any purpose, including the payment of claims. The put agreements have no scheduled termination date or maturity. However, each put agreement will terminate if (subject to certain grace periods) specified events occur. Both AGC and AGM continue to have the ability to exercise their respective put options and cause the related trusts to purchase their preferred stock. Prior to 2008 or 2007, the amounts paid on the CCS were established through an auction process. All of those auctions failed in 2008 or 2007, and the rates paid on the CCS increased to their respective maximums. The annualized rate on the AGC CCS is one-month LIBOR plus 250 basis points, and the annualized rate on the AGM CPS is one-month LIBOR plus 200 basis points. See Note 7, Fair Value Measurement, –Other Assets–Committed Capital Securities, for a fair value measurement discussion. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Accounting Policy The Company computes EPS using a two-class method, which is an earnings allocation formula that determines EPS for (i) each class of common stock (the Company has a single class of common stock), and (ii) participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Restricted stock awards and share units under the AGC supplemental executive retirement plan (AGC SERP) are considered participating securities as they received non-forfeitable rights to dividends (or dividend equivalents) as common stock. Basic EPS is then calculated by dividing net (loss) income available to common shareholders of Assured Guaranty by the weighted‑average number of common shares outstanding during the period. Diluted EPS adjusts basic EPS for the effects of restricted stock, restricted stock units, stock options and other potentially dilutive financial instruments (dilutive securities), only in the periods in which such effect is dilutive. The effect of the dilutive securities is reflected in diluted EPS by application of the more dilutive of (1) the treasury stock method or (2) the two-class method assuming nonvested shares are not converted into common shares. Computation of Earnings Per Share Year Ended December 31, 2017 2016 2015 (in millions, except per share amounts) Basic EPS: Net income (loss) attributable to AGL $ 730 $ 881 1,056 Less: Distributed and undistributed income (loss) available to nonvested shareholders 1 1 1 Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 729 $ 880 1,055 Basic shares 120.6 133.0 148.1 Basic EPS $ 6.05 $ 6.61 $ 7.12 Diluted EPS: Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 729 $ 880 $ 1,055 Plus: Re-allocation of undistributed income (loss) available to nonvested shareholders of AGL and subsidiaries 0 0 0 Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, diluted $ 729 $ 880 $ 1,055 Basic shares 120.6 133.0 148.1 Dilutive securities: Options and restricted stock awards 1.7 1.1 0.9 Diluted shares 122.3 134.1 149.0 Diluted EPS $ 5.96 $ 6.56 $ 7.08 Potentially dilutive securities excluded from computation of EPS because of antidilutive effect 0.1 0.3 0.5 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Share Issuances AGL has authorized share capital of $ 5 million divided into 500,000,000 shares with a par value $ 0.01 per share. Except as described below, AGL's common shares have no preemptive rights or other rights to subscribe for additional common shares, no rights of redemption, conversion or exchange and no sinking fund rights. In the event of liquidation, dissolution or winding-up, the holders of AGL's common shares are entitled to share equally, in proportion to the number of common shares held by such holder, in AGL's assets, if any remain after the payment of all its liabilities and the liquidation preference of any outstanding preferred shares. Under certain circumstances, AGL has the right to purchase all or a portion of the shares held by a shareholder at fair market value. All of the common shares are fully paid and non assessable. Holders of AGL's common shares are entitled to receive dividends as lawfully may be declared from time to time by AGL's Board of Directors (the Board). In general, and except as provided below, shareholders have one vote for each common share held by them and are entitled to vote with respect to their fully paid shares at all meetings of shareholders. However, if, and so long as, the common shares (and other of AGL's shares) of a shareholder are treated as "controlled shares" (as determined pursuant to section 958 of the Code) of any U.S. Person and such controlled shares constitute 9.5% or more of the votes conferred by AGL's issued and outstanding shares, the voting rights with respect to the controlled shares owned by such U.S. Person shall be limited, in the aggregate, to a voting power of less than 9.5% of the voting power of all issued and outstanding shares, under a formula specified in AGL's Bye-laws. The formula is applied repeatedly until there is no U.S. Person whose controlled shares constitute 9.5% or more of the voting power of all issued and outstanding shares and who generally would be required to recognize income with respect to AGL under the Code if AGL were a controlled foreign corporation as defined in the Code and if the ownership threshold under the Code were 9.5% (as defined in AGL's Bye-Laws as a 9.5% U.S. Shareholder). Subject to AGL's Bye-Laws and Bermuda law, AGL's Board has the power to issue any of AGL's unissued shares as it determines, including the issuance of any shares or class of shares with preferred, deferred or other special rights. Under AGL's Bye-Laws and subject to Bermuda law, if AGL's Board determines that any ownership of AGL's shares may result in adverse tax, legal or regulatory consequences to the Company, any of the Company's subsidiaries or any of its shareholders or indirect holders of shares or its Affiliates (other than such as AGL's Board considers de minimis), the Company has the option, but not the obligation, to require such shareholder to sell to AGL or to a third party to whom AGL assigns the repurchase right the minimum number of common shares necessary to avoid or cure any such adverse consequences at a price determined in the discretion of the Board to represent the shares' fair market value (as defined in AGL's Bye-Laws). In addition, AGL's Board may determine that shares held carry different voting rights when it deems it appropriate to do so to (i) avoid the existence of any 9.5% U.S. Shareholder; and (ii) avoid adverse tax, legal or regulatory consequences to AGL or any of its subsidiaries or any direct or indirect holder of shares or its affiliates. "Controlled shares" includes, among other things, all shares of AGL that such U.S. Person is deemed to own directly, indirectly or constructively (within the meaning of section 958 of the Code). Further, these provisions do not apply in the event one shareholder owns greater than 75% of the voting power of all issued and outstanding shares. Under these provisions, certain shareholders may have their voting rights limited to less than one vote per share, while other shareholders may have voting rights in excess of one vote per share. Moreover, these provisions could have the effect of reducing the votes of certain shareholders who would not otherwise be subject to the 9.5% limitation by virtue of their direct share ownership. AGL's Bye-laws provide that it will use its best efforts to notify shareholders of their voting interests prior to any vote to be taken by them. Share Repurchases The Board of Directors (the Board) most recently authorized share repurchases on November 1, 2017, for an additional $300 million . The total remaining capacity for share repurchases under Board authorizations was $305 million as of February 23, 2018 . The Company expects to repurchase shares from time to time in the open market or in privately negotiated transactions. The timing, form and amount of the share repurchases under the program are at the discretion of management and will depend on a variety of factors, including funds available at the parent company, other potential uses for such funds, market conditions, the Company's capital position, legal requirements and other factors. The repurchase program may be modified, extended or terminated by the Board at any time. It does not have an expiration date. As indicated in Note 14, Related Party Transactions, in 2017 the Company repurchased shares from its Chief Executive Officer and former General Counsel. Share Repurchases Year Number of Shares Repurchased Total Payments (in millions) Average Price Paid Per Share 2015 20,995,419 $ 555 $ 26.43 2016 10,721,248 $ 306 $ 28.53 2017 12,669,643 $ 501 $ 39.57 2018 (through February 23, 2018 on a settlement date basis) 1,230,941 $ 43 $ 34.90 Deferred Compensation Each of the Chief Executive Officer and the former General Counsel of the Company elected to invest a portion of his AGL SERP account in the employer stock fund within the AGL SERP. Each unit in the employer stock fund represents the right to receive one AGL common share upon a distribution from the AGL SERP. Each unit equals the number of AGL common shares which could have been purchased with the value of the account deemed invested in the employer stock fund as of the date of such election. The election to invest in the employer stock fund is irrevocable (i.e., any portion of a AGL SERP account allocated to the employer stock fund and invested in units shall remain allocated to the employer stock fund until the participant receives a distribution from AGL SERP). At the same time such investment elections were made, the Company purchased AGL common shares and placed such shares in trust to be distributed to the Chief Executive Officer and the former General Counsel upon a distribution from the AGL SERP in settlement of their units invested in the employer stock fund. As of December 31, 2016 , the Company had 320,193 shares in the trust. The Company recorded the purchase of such shares in “deferred equity compensation” in the consolidated balance sheet. As indicated in Note 14, Related Party Transactions, on January 6, 2017, the 320,193 shares were distributed in settlement of the AGL SERP units and therefore, there are no shares remaining in trust. Certain executives of the Company elected to invest a portion of their AGC SERP accounts in the employer stock fund in the AGC SERP. Each unit in the employer stock fund represents the right to receive one AGL common share upon a distribution from the AGC SERP. Each unit equals the number of AGL common shares which could have been purchased with the value of the account deemed invested in the employer stock fund as of the date of such election. As of December 31, 2017 and 2016 , there were 74,309 and 74,309 units, respectively, in the AGC SERP. See Note 19, Employee Benefit Plans. Dividends Any determination to pay cash dividends is at the discretion of the Company's Board, and depends upon the Company's results of operations, cash flows from operating activities, its financial position, capital requirements, general business conditions, legal, tax, regulatory, rating agency and contractual restrictions on the payment of dividends, other potential uses for such funds, and any other factors the Company's Board deems relevant. For more information concerning regulatory constraints that affect the Company's ability to pay dividends, see Note 11, Insurance Company Regulatory Requirements. On February 21, 2018, the Company declared a quarterly dividend of $ 0.16 per common share, an increase of nearly 12% from a quarterly dividend of $ 0.1425 per common share paid in 2017. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Accounting Policy Share-based compensation expense is based on the grant date fair value using the grant date closing price, the lattice, Monte Carlo or Black-Scholes-Merton (Black-Scholes) pricing models. The Company amortizes the fair value of share-based awards on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods, with the exception of retirement‑eligible employees. For retirement-eligible employees, certain awards contain retirement provisions and therefore are amortized over the period through the date the employee first becomes eligible to retire and is no longer required to provide service to earn part or all of the award. The fair value of each award under the Assured Guaranty Ltd. Employee Stock Purchase Plan is estimated at the beginning of each offering period using the Black-Scholes option valuation model. The expense for Performance Retention Plan awards is recognized straight-line over the requisite service period, with the exception of retirement eligible employees. For retirement eligible employees, the expense is recognized immediately. Assured Guaranty Ltd. 2004 Long-Term Incentive Plan Under the Assured Guaranty Ltd. 2004 Long-Term Incentive Plan, as amended (the Incentive Plan), the number of AGL common shares that may be delivered under the Incentive Plan may not exceed 18,670,000 . In the event of certain transactions affecting AGL's common shares, the number or type of shares subject to the Incentive Plan, the number and type of shares subject to outstanding awards under the Incentive Plan, and the exercise price of awards under the Incentive Plan, may be adjusted. The Incentive Plan authorizes the grant of incentive stock options, non-qualified stock options, stock appreciation rights, and full value awards that are based on AGL's common shares. The grant of full value awards may be in return for a participant's previously performed services, or in return for the participant surrendering other compensation that may be due, or may be contingent on the achievement of performance or other objectives during a specified period, or may be subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of one or more goals relating to completion of service by the participant, or achievement of performance or other objectives. Awards under the Incentive Plan may accelerate and become vested upon a change in control of AGL. The Incentive Plan is administered by the Compensation Committee of the Board, except as otherwise determined by the Board. The Board may amend or terminate the Incentive Plan. As of December 31, 2017 , 10,034,895 common shares were available for grant under the Incentive Plan. Time Vested Stock Options Stock options are generally granted once a year with exercise prices equal to the closing price on the date of grant. To date, the Company has only issued non-qualified stock options. All stock options, except for performance stock options, granted to employees vest in equal annual installments over a three -year period and expire seven years or ten years from the date of grant. Stock options granted to directors vest over one year and expire in seven years or ten years from grant date. None of the Company's options, except for performance stock options, have a performance or market condition. Time Vested Stock Options Options for Common Shares Weighted Average Exercise Price Number of Exercisable Options Balance as of December 31, 2016 1,170,593 $ 18.43 1,145,356 Options granted — — Options exercised (331,639 ) 21.02 Options forfeited/expired — — Balance as of December 31, 2017 838,954 $ 17.41 838,954 As of December 31, 2017 , the aggregate intrinsic value and weighted average remaining contractual term of stock options outstanding were $14 million and 1.4 years , respectively. As of December 31, 2017 , the aggregate intrinsic value and weighted average remaining contractual term of exercisable stock options were $14 million and 1.4 years , respectively. No options were granted in 2017, 2016 and 2015. As of December 31, 2017 , there were no unexpensed outstanding non-vested options. The total intrinsic value of stock options exercised during the years ended December 31, 2017 , 2016 and 2015 was $6.6 million , $4.6 million and $2.8 million , respectively. During the years ended December 31, 2017 , 2016 and 2015 , $4.7 million , $12 million and $4.9 million , respectively, was received from the exercise of stock options. In order to satisfy stock option exercises, the Company issues new shares. The tax benefit from stock options exercised during 2017 was $1.8 million . Performance Stock Options The Company grants performance stock options under the Incentive Plan. These awards are non-qualified stock options with exercise prices equal to the closing price of an AGL common share on the applicable date of grant. These awards vest 35% , 50% or 100% , if the price of AGL's common shares using the highest 40 -day average share price during the relevant three -year performance period reaches certain hurdles. If the share price is between the specified levels, the vesting level will be interpolated accordingly. These awards expire seven years from the date of grant. Performance Stock Options Options for Common Shares Weighted Average Exercise Price Number of Exercisable Options Balance as of December 31, 2016 221,409 $ 17.89 221,409 Options granted — — Options exercised (30,508 ) 18.45 Options forfeited/expired — — Balance as of December 31, 2017 190,901 $ 17.80 190,901 As of December 31, 2017 , the aggregate intrinsic value and weighted average remaining contractual term of performance stock options outstanding were $3 million and 1.3 years , respectively. As of December 31, 2017 , the aggregate intrinsic value and weighted average remaining contractual term of exercisable performance stock options were $3 million and 1.3 years , respectively. No options were granted in 2017 , 2016 and 2015 . As of December 31, 2017 , there were no unexpensed outstanding nonvested performance stock options. The total intrinsic value of performance stock options exercised during the years ended December 31, 2017 , 2016 and 2015 was $699 thousand , $41 thousand and $75 thousand , respectively. During the years ended December 31, 2017 , 2016 and 2015 , $206 thousand , $106 thousand and $98 thousand , respectively, was received from the exercise of performance stock options. In order to satisfy stock option exercises, the Company issues new shares. Restricted Stock Awards Restricted stock awards are valued based on the closing price of the underlying shares at the date of grant (adjusted for the timing of dividends). Restricted stock awards to employees generally vest in equal annual installments over a four -year period and restricted stock awards to outside directors vest in full in one year. Restricted stock awards to employees are amortized on a straight-line basis over the requisite service periods of the awards, and restricted stock awards to outside directors are amortized over one year, which are generally the vesting periods, with the exception of retirement‑eligible employees, discussed above. Restricted Stock Award Activity Nonvested Shares Number of Shares Weighted Average Grant Date Fair Value Per Share Nonvested at December 31, 2016 58,858 $ 25.57 Granted 50,225 37.93 Vested (58,858 ) 25.57 Forfeited — — Nonvested at December 31, 2017 50,225 $ 37.93 As of December 31, 2017 the total unrecognized compensation cost related to outstanding nonvested restricted stock awards was $0.7 million , which the Company expects to recognize over the weighted‑average remaining service period of 0.4 years . The total fair value of shares vested during the years ended December 31, 2017 , 2016 and 2015 was $1.5 million , $1.6 million and $ 1 million , respectively. Restricted Stock Units Restricted stock units are valued based on the closing price of the underlying shares at the date of grant. Restricted stock units awarded to employees have vesting terms similar to those of the restricted stock awards and are delivered on the vesting date. The Company has granted restricted stock units to directors of the Company. Restricted stock units awarded to directors vested over a one -year period and were delivered in January 2017. Restricted Stock Unit Activity Nonvested Stock Units Number of Stock Units Weighted Average Grant Date Fair Value Per Share Nonvested at December 31, 2016 945,509 $ 24.01 Granted 245,735 41.37 Vested (289,176 ) 22.74 Forfeited (47,449 ) 23.35 Nonvested at December 31, 2017 854,619 $ 29.67 As of December 31, 2017 , the total unrecognized compensation cost related to outstanding nonvested restricted stock units was $12.7 million , which the Company expects to recognize over the weighted‑average remaining service period of 1.8 years . The total fair value of restricted stock units delivered during the years ended December 31, 2017 , 2016 and 2015 was $7 million , $2 million and $6 million , respectively. Performance Restricted Stock Units The Company has granted performance restricted stock units under the Incentive Plan. These awards vest 35% , 50% , 100% , or 200% , if the price of AGL's common shares using the highest 40 -day average share price during the relevant three -year performance period reaches certain hurdles. If the share price is between the specified levels, the vesting level will be interpolated accordingly. Performance Restricted Stock Unit Activity Performance Restricted Stock Units Number of Performance Share Units Weighted Average Grant Date Fair Value Per Share Nonvested at December 31, 2016 609,435 $ 26.22 Granted (1) 315,896 53.74 Delivered (318,467 ) 25.17 Forfeited — — Nonvested at December 31, 2017 (2) 606,864 $ 33.80 ____________________ (1) Includes 155,000 performance restricted stock units that were granted prior to 2017 at a weighted average grant date fair value of $25.17 , but met performance hurdles and vested in February 2017. The weighted average grant date fair value per share excludes these shares. (2) Excludes 426,670 performance restricted stock units that have met performance hurdles and will be eligible for vesting after December 31, 2017. As of December 31, 2017 , the total unrecognized compensation cost related to outstanding nonvested performance share units was $8.8 million , which the Company expects to recognize over the weighted‑average remaining service period of 1.8 years . The total value of performance restricted stock units delivered during the years ended December 31, 2017 , 2016 and 2015 was based on grant date fair value and was $8 million , $2 million and $6 million , respectively. The Company uses a Monte Carlo model to value its performance restricted stock units. Monte Carlo Pricing Weighted Average Assumptions 2017 2016 2015 Dividend yield 1.37 % 2.12 % 1.90 % Expected volatility 25.19 % 30.84 % 32.20 % Risk free interest rate 1.48 % 0.90 % 0.82 % Weighted average grant date fair value $ 53.74 $ 25.62 $ 28.31 The expected dividend yield is based on the current expected annual dividend and share price on the grant date. The expected volatility is estimated at the date of grant based on an average of the 3 -year historical share price volatility and implied volatilities of certain at-the-money actively traded call options in the Company. The risk-free interest rate is the implied 3 -year yield currently available on U.S. Treasury zero-coupon issues at the date of grant. The expected life is based on the 18 -month term of the performance period. Employee Stock Purchase Plan The Company established the AGL Employee Stock Purchase Plan (Stock Purchase Plan) in accordance with Internal Revenue Code Section 423, and participation is available to all eligible employees. Maximum annual purchases by participants are limited to the number of whole shares that can be purchased by an amount equal to 10% of the participant's compensation or, if less, shares having a value of $25,000 . Participants may purchase shares at a purchase price equal to 85% of the lesser of the fair market value of the stock on the first day or the last day of the subscription period. The Company has reserved for issuance and purchases under the Stock Purchase Plan 600,000 Assured Guaranty Ltd. common shares. The fair value of each award under the Stock Purchase Plan is estimated at the beginning of each offering period using the Black‑Scholes option‑pricing model and the following assumptions: a) the expected dividend yield is based on the current expected annual dividend and share price on the grant date; b) the expected volatility is estimated at the date of grant based on the historical share price volatility, calculated on a daily basis; c) the risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant; and d) the expected life is based on the term of the offering period. Stock Purchase Plan Year Ended December 31, 2017 2016 2015 (dollars in millions) Proceeds from purchase of shares by employees $ 1.0 $ 0.9 $ 0.8 Number of shares issued by the Company 33,666 39,055 38,565 Recorded in share-based compensation, net of deferral $ 0.3 $ 0.2 $ 0.2 Share‑Based Compensation Expense The following table presents stock based compensation costs and the effect of deferring such costs as policy acquisition costs, pre-tax. Amortization of previously deferred stock compensation costs is not shown in the table below. Share‑Based Compensation Expense Summary Year Ended December 31, 2017 2016 2015 (in millions) Share‑based compensation expense $ 16 $ 13 $ 10 Share‑based compensation capitalized as DAC 0.6 0.4 0.5 Income tax benefit 2 3 2 Defined Contribution Plan The Company maintains a savings incentive plan, which is qualified under Section 401(a) of the Internal Revenue Code for U.S. employees. The savings incentive plan is available to eligible full-time employees upon hire. Eligible participants could contribute a percentage of their salary subject to a maximum of $18,000 for 2017 . Contributions are matched by the Company at a rate of 100% up to 6% of participant's compensation, subject to IRS limitations. Any amounts over the IRS limits are contributed to and matched by the Company into a nonqualified supplemental executive retirement plan for employees eligible to participate in such nonqualified plan. The Company also makes a core contribution of 6% of the participant's compensation to the qualified plan, subject to IRS limitations, and the nonqualified supplemental executive retirement plan for eligible employees, regardless of whether the employee contributes to the plan(s). Employees become fully vested in Company contributions after one year of service, as defined in the plan. Plan eligibility is immediate upon hire. The Company also maintains similar non-qualified plans for non-U.S. employees. The Company recognized defined contribution expenses of $11 million , $11 million and $10 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Cash-Based Compensation Plans The Company maintains a Performance Retention Plan (PRP) that permits the grant of deferred cash based awards to selected employees. Generally, each PRP award is divided into three installments that vest over four years. The cash payment depends on growth in certain measures of intrinsic value and financial return defined in each PRP award agreement. The Company recognized performance retention plan expenses of $12 million , $12 million and $11 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. The Company’s executive officers are eligible to receive compensation under a non-equity incentive plan. The amount of compensation payable is subject to a performance goal being met. The Compensation Committee then uses discretion to determine the actual amount of cash incentive compensation payable to each executive officer for such performance year based on factors and criteria as determined by the Compensation Committee, provided that such discretion cannot be used to increase the amount that was determined to be payable to each executive officer. For an applicable performance year, the Compensation Committee establishes target financial performance measures for the Company and individual non-financial objectives for the executive officers. Most employees other than executive officers are eligible to receive discretionary bonuses. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Other Comprehensive Income | Other Comprehensive Income The following tables present the changes in each component of AOCI and the effect of reclassifications out of AOCI on the respective line items in net income. Changes in Accumulated Other Comprehensive Income by Component Year Ended December 31, 2017 Net Unrealized Gains (Losses) on Investments with no Other-Than-Temporary Impairment Net Unrealized Gains (Losses) on Investments with Other-Than-Temporary Impairment Cumulative Translation Adjustment Cash Flow Hedge Total Accumulated Other Comprehensive Income (in millions) Balance, December 31, 2016 $ 171 $ 10 $ (39 ) $ 7 $ 149 Reclassification of stranded tax effects (see Note 1) 38 21 (5 ) 2 56 Other comprehensive income (loss) before reclassifications 128 69 15 — 212 Amounts reclassified from AOCI to: Net realized investment gains (losses) (71 ) 31 — — (40 ) Net investment income (27 ) (1 ) — — (28 ) Interest expense — — — (1 ) (1 ) Total before tax (98 ) 30 — (1 ) (69 ) Tax (provision) benefit 34 (10 ) — 0 24 Total amount reclassified from AOCI, net of tax (64 ) 20 — (1 ) (45 ) Net current period other comprehensive income (loss) 64 89 15 (1 ) 167 Balance, December 31, 2017 $ 273 $ 120 $ (29 ) $ 8 $ 372 Changes in Accumulated Other Comprehensive Income by Component Year Ended December 31, 2016 Net Unrealized Gains (Losses) on Investments with no Other-Than-Temporary Impairment Net Unrealized Gains (Losses) on Investments with Other-Than-Temporary Impairment Cumulative Translation Adjustment Cash Flow Hedge Total (in millions) Balance, December 31, 2015 $ 260 $ (15 ) $ (16 ) $ 8 $ 237 Other comprehensive income (loss) before reclassifications (71 ) (9 ) (23 ) — (103 ) Amounts reclassified from AOCI to: Net realized investment gains (losses) (23 ) 52 — — 29 Net investment income (3 ) — — — (3 ) Interest expense — — — (1 ) (1 ) Total before tax (26 ) 52 — (1 ) 25 Tax (provision) benefit 8 (18 ) — 0 (10 ) Total amount reclassified from AOCI, net of tax (18 ) 34 — (1 ) 15 Net current period other comprehensive income (loss) (89 ) 25 (23 ) (1 ) (88 ) Balance, December 31, 2016 $ 171 $ 10 $ (39 ) $ 7 $ 149 Changes in Accumulated Other Comprehensive Income by Component Year Ended December 31, 2015 Net Unrealized Gains (Losses) on Investments with no Other-Than-Temporary Impairment Net Unrealized Gains (Losses) on Investments with Other-Than-Temporary Impairment Cumulative Translation Adjustment Cash Flow Total (in millions) Balance, December 31, 2014 $ 367 $ 4 $ (10 ) $ 9 $ 370 Other comprehensive income (loss) before reclassifications (93 ) (43 ) (6 ) — (142 ) Amounts reclassified from AOCI to: Net realized investment gains (losses) (11 ) 37 — — 26 Net investment income (9 ) — — — (9 ) Interest expense — — — (1 ) (1 ) Total before tax (20 ) 37 — (1 ) 16 Tax (provision) benefit 6 (13 ) — 0 (7 ) Total amount reclassified from AOCI, net of tax (14 ) 24 — (1 ) 9 Net current period other comprehensive income (loss) (107 ) (19 ) (6 ) (1 ) (133 ) Balance, December 31, 2015 $ 260 $ (15 ) $ (16 ) $ 8 $ 237 |
Subsidiary Information
Subsidiary Information | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Subsidiary Information | Subsidiary Information The following tables present the condensed consolidating financial information for AGUS and AGMH, 100%-owned subsidiaries of AGL, which have issued publicly traded debt securities (see Note 16, Long Term Debt and Credit Facilities). The information for AGL, AGUS and AGMH presents its subsidiaries on the equity method of accounting. The following tables reflect transfers of businesses between entities within the consolidated group that occurred in the current reporting period consistently for all prior periods presented. CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2017 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) ASSETS Total investment portfolio and cash $ 36 $ 319 $ 28 $ 11,484 $ (328 ) $ 11,539 Investment in subsidiaries 6,794 6,126 4,048 216 (17,184 ) — Premiums receivable, net of commissions payable — — — 1,074 (159 ) 915 Ceded unearned premium reserve — — — 1,002 (883 ) 119 Deferred acquisition costs — — — 144 (43 ) 101 Reinsurance recoverable on unpaid losses — — — 433 (389 ) 44 Credit derivative assets — — — 39 (37 ) 2 Deferred tax asset, net — 59 — 93 (54 ) 98 Intercompany receivable — — — 60 (60 ) — Financial guaranty variable interest entities’ assets, at fair value — — — 700 — 700 Other 26 0 40 1,171 (322 ) 915 TOTAL ASSETS $ 6,856 $ 6,504 $ 4,116 $ 16,416 $ (19,459 ) $ 14,433 LIABILITIES AND SHAREHOLDERS’ EQUITY Unearned premium reserves — — — 4,423 (948 ) 3,475 Loss and LAE reserve — — — 1,793 (349 ) 1,444 Long-term debt — 843 461 6 (18 ) 1,292 Intercompany payable — 60 — 300 (360 ) — Credit derivative liabilities — — — 308 (37 ) 271 Deferred tax liabilities, net — 51 — (51 ) — Financial guaranty variable interest entities’ liabilities, at fair value — — — 757 — 757 Other 17 59 20 740 (481 ) 355 TOTAL LIABILITIES 17 962 532 8,327 (2,244 ) 7,594 TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO ASSURED GUARANTY LTD. 6,839 5,542 3,584 7,873 (16,999 ) 6,839 Noncontrolling interest — — — 216 (216 ) — TOTAL SHAREHOLDERS’ EQUITY 6,839 5,542 3,584 8,089 (17,215 ) 6,839 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 6,856 $ 6,504 $ 4,116 $ 16,416 $ (19,459 ) $ 14,433 CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2016 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) ASSETS Total investment portfolio and cash $ 36 $ 384 $ 22 $ 11,029 $ (368 ) $ 11,103 Investment in subsidiaries 6,164 5,696 3,799 296 (15,955 ) — Premiums receivable, net of commissions payable — — — 699 (123 ) 576 Ceded unearned premium reserve — — — 1,099 (893 ) 206 Deferred acquisition costs — — — 156 (50 ) 106 Reinsurance recoverable on unpaid losses — — — 484 (404 ) 80 Credit derivative assets — — — 69 (56 ) 13 Deferred tax asset, net — 16 — 597 (116 ) 497 Intercompany receivable — — — 70 (70 ) — Financial guaranty variable interest entities’ assets, at fair value — — — 876 — 876 Dividend receivable from affiliate 300 — — — (300 ) — Other 11 78 26 801 (222 ) 694 TOTAL ASSETS $ 6,511 $ 6,174 $ 3,847 $ 16,176 $ (18,557 ) $ 14,151 LIABILITIES AND SHAREHOLDERS’ EQUITY Unearned premium reserves — — — 4,488 (977 ) 3,511 Loss and LAE reserve — — — 1,596 (469 ) 1,127 Long-term debt — 843 453 10 — 1,306 Intercompany payable — 70 — 300 (370 ) — Credit derivative liabilities — — — 458 (56 ) 402 Deferred tax liabilities, net — — 88 — (88 ) — Financial guaranty variable interest entities’ liabilities, at fair value — — — 958 — 958 Dividend payable to affiliate — 300 — — (300 ) — Other 7 3 14 665 (346 ) 343 TOTAL LIABILITIES 7 1,216 555 8,475 (2,606 ) 7,647 TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO ASSURED GUARANTY LTD. 6,504 4,958 3,292 7,405 (15,655 ) 6,504 Noncontrolling interest — — — 296 (296 ) — TOTAL SHAREHOLDERS’ EQUITY 6,504 4,958 3,292 7,701 (15,951 ) 6,504 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 6,511 $ 6,174 $ 3,847 $ 16,176 $ (18,557 ) $ 14,151 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2017 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) REVENUES Net earned premiums $ — $ — $ — $ 728 $ (38 ) $ 690 Net investment income 0 2 0 427 (11 ) 418 Net realized investment gains (losses) — 0 0 45 (5 ) 40 Net change in fair value of credit derivatives: Realized gains (losses) and other settlements — — — (10 ) 0 (10 ) Net unrealized gains (losses) — — — 121 — 121 Net change in fair value of credit derivatives — — — 111 0 111 Bargain purchase gain and settlement of pre-existing relationships — — — 58 — 58 Other 10 — — 608 (196 ) 422 TOTAL REVENUES 10 2 0 1,977 (250 ) 1,739 EXPENSES Loss and LAE — — — 327 61 388 Amortization of deferred acquisition costs — — — 26 (7 ) 19 Interest expense — 47 54 11 (15 ) 97 Other operating expenses 38 12 1 394 (201 ) 244 TOTAL EXPENSES 38 59 55 758 (162 ) 748 INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES (28 ) (57 ) (55 ) 1,219 (88 ) 991 Total (provision) benefit for income taxes — 17 54 (359 ) 27 (261 ) Equity in net earnings of subsidiaries 758 636 395 32 (1,821 ) — NET INCOME (LOSS) 730 596 394 892 (1,882 ) 730 Less: noncontrolling interest — — — 32 (32 ) — NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD. $ 730 $ 596 $ 394 $ 860 $ (1,850 ) $ 730 COMPREHENSIVE INCOME (LOSS) $ 897 $ 754 $ 482 $ 1,084 $ (2,320 ) $ 897 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2016 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) REVENUES Net earned premiums $ — $ — $ — $ 892 $ (28 ) $ 864 Net investment income 0 0 0 412 (4 ) 408 Net realized investment gains (losses) 0 2 0 (28 ) (3 ) (29 ) Net change in fair value of credit derivatives: Realized gains (losses) and other settlements — — — 29 0 29 Net unrealized gains (losses) — — — 69 — 69 Net change in fair value of credit derivatives — — — 98 — 98 Bargain purchase gain and settlement of pre-existing relationships — — — 257 2 259 Other 0 — — 78 (1 ) 77 TOTAL REVENUES 0 2 0 1,709 (34 ) 1,677 EXPENSES Loss and LAE — — — 296 (1 ) 295 Amortization of deferred acquisition costs — — — 30 (12 ) 18 Interest expense — 52 54 10 (14 ) 102 Other operating expenses 29 2 2 217 (5 ) 245 TOTAL EXPENSES 29 54 56 553 (32 ) 660 INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES (29 ) (52 ) (56 ) 1,156 (2 ) 1,017 Total (provision) benefit for income taxes — 18 20 (175 ) 1 (136 ) Equity in net earnings of subsidiaries 910 794 274 44 (2,022 ) — NET INCOME (LOSS) 881 760 238 1,025 (2,023 ) 881 Less: noncontrolling interest — — — 44 (44 ) — NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD. $ 881 $ 760 $ 238 $ 981 $ (1,979 ) $ 881 COMPREHENSIVE INCOME (LOSS) $ 793 $ 685 $ 144 $ 953 $ (1,782 ) $ 793 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2015 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) REVENUES Net earned premiums $ — $ — $ — $ 783 $ (17 ) $ 766 Net investment income 0 1 0 432 (10 ) 423 Net realized investment gains (losses) 0 0 1 (19 ) (8 ) (26 ) Net change in fair value of credit derivatives: Realized gains (losses) and other settlements — — — (18 ) 0 (18 ) Net unrealized gains (losses) — — — 773 (27 ) 746 Net change in fair value of credit derivatives — — — 755 (27 ) 728 Bargain purchase gain and settlement of pre-existing relationships — — — 54 160 214 Other — 0 — 102 0 102 TOTAL REVENUES 0 1 1 2,107 98 2,207 EXPENSES Loss and LAE — — — 434 (10 ) 424 Amortization of deferred acquisition costs — — — 29 (9 ) 20 Interest expense — 52 54 14 (19 ) 101 Other operating expenses 30 1 1 202 (3 ) 231 TOTAL EXPENSES 30 53 55 679 (41 ) 776 INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES (30 ) (52 ) (54 ) 1,428 139 1,431 Total (provision) benefit for income taxes — 18 19 (365 ) (47 ) (375 ) Equity in net earnings of subsidiaries 1,086 923 464 39 (2,512 ) — NET INCOME (LOSS) 1,056 889 429 1,102 (2,420 ) 1,056 Less: noncontrolling interest — — — 39 (39 ) — NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD. $ 1,056 $ 889 $ 429 $ 1,063 $ (2,381 ) $ 1,056 COMPREHENSIVE INCOME (LOSS) $ 923 $ 787 $ 348 $ 967 $ (2,102 ) $ 923 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2017 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) Net cash flows provided by (used in) operating activities $ 579 $ 442 $ 158 $ 477 $ (1,223 ) $ 433 Cash flows from investing activities Fixed-maturity securities: Purchases — (158 ) (17 ) (2,404 ) 27 (2,552 ) Sales — 112 21 1,568 — 1,701 Maturities — 13 0 808 — 821 Sales (purchases) of short-term investments, net 0 131 (8 ) (49 ) — 74 Net proceeds from FG VIE assets — — — 147 — 147 Investment in subsidiaries — (28 ) — (139 ) 167 — Intercompany debt — — — 10 (10 ) — Proceeds from sale of subsidiaries — — — 139 (139 ) — Proceeds from return of capital from subsidiaries — — 101 70 (171 ) — Acquisition of MBIA UK, net of cash acquired — — — 95 — 95 Other — — — 59 — 59 Net cash flows provided by (used in) investing activities 0 70 97 304 (126 ) 345 Cash flows from financing activities Return of capital — — — (70 ) 70 — Capital contribution — — 25 3 (28 ) — Dividends paid (70 ) (470 ) (278 ) (475 ) 1,223 (70 ) Repurchases of common stock (501 ) — — (101 ) 101 (501 ) Repurchases of common stock to pay withholding taxes (13 ) — — — — (13 ) Net paydowns of FG VIE liabilities — — — (157 ) — (157 ) Paydown of long-term debt — — — (3 ) (27 ) (30 ) Proceeds from options exercises 5 — — — — 5 Intercompany debt — (10 ) — — 10 — Net cash flows provided by (used in) financing activities (579 ) (480 ) (253 ) (803 ) 1,349 (766 ) Effect of exchange rate changes — — — 5 — 5 Increase (decrease) in cash and restricted cash 0 32 2 (17 ) — 17 Cash and restricted cash at beginning of period 0 1 0 126 — 127 Cash and restricted cash at end of period $ 0 $ 33 $ 2 $ 109 $ — $ 144 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2016 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) Net cash flows provided by (used in) operating activities $ 391 $ 533 $ 213 $ 72 $ (1,341 ) $ (132 ) Cash flows from investing activities Fixed-maturity securities: Purchases (4 ) (143 ) (10 ) (1,489 ) — (1,646 ) Sales 4 24 12 1,325 — 1,365 Maturities — 30 — 1,125 — 1,155 Sales (purchases) of short-term investments, net (26 ) (237 ) (10 ) 290 — 17 Net proceeds from FG VIE assets — — — 629 — 629 Intercompany debt — — — 20 (20 ) — Proceeds from return of capital from subsidiaries — — 300 4 (304 ) — Acquisition of CIFG, net of cash acquired — — — (442 ) 7 (435 ) Other — 7 — (9 ) (7 ) (9 ) Net cash flows provided by (used in) investing activities (26 ) (319 ) 292 1,453 (324 ) 1,076 Cash flows from financing activities — Return of capital — — — (4 ) 4 — Dividends paid (69 ) (288 ) (513 ) (540 ) 1,341 (69 ) Repurchases of common stock (306 ) — — (300 ) 300 (306 ) Repurchases of common stock to pay withholding taxes (2 ) — — — — (2 ) Net paydowns of FG VIE liabilities — — — (611 ) — (611 ) Paydown of long-term debt — — — (2 ) — (2 ) Proceeds from options exercised 12 — — — — 12 Intercompany debt — (20 ) — — 20 — Net cash flows provided by (used in) financing activities (365 ) (308 ) (513 ) (1,457 ) 1,665 (978 ) Effect of exchange rate changes — — — (5 ) — (5 ) Increase (decrease) in cash and restricted cash — (94 ) (8 ) 63 — (39 ) Cash and restricted cash at beginning of period 0 95 8 63 — 166 Cash and restricted cash at end of period $ 0 $ 1 $ 0 $ 126 $ — $ 127 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2015 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) Net cash flows provided by (used in) operating activities $ 513 $ 408 $ 185 $ 33 $ (1,210 ) $ (71 ) Cash flows from investing activities Fixed-maturity securities: Purchases — (72 ) (21 ) (2,550 ) 66 (2,577 ) Sales — 177 30 1,900 — 2,107 Maturities — 9 — 889 — 898 Sales (purchases) of short-term investments, net 116 33 19 729 — 897 Net proceeds from FG VIE assets — — — 400 — 400 Proceeds from repayment of surplus notes — — 25 — (25 ) — Acquisition of Radian Asset, net of cash acquired — — — (800 ) — (800 ) Other — (5 ) — 74 — 69 Net cash flows provided by (used in) investing activities 116 142 53 642 41 994 Cash flows from financing activities Return of capital — — — (25 ) 25 — Dividends paid (72 ) (455 ) (234 ) (455 ) 1,144 (72 ) Repurchases of common stock (555 ) — — — — (555 ) Repurchases of common stock to pay withholding taxes (7 ) — — — — (7 ) Net paydowns of FG VIE liabilities — — — (214 ) — (214 ) Paydown of long-term debt — — — (4 ) — (4 ) Proceeds from options exercised 5 — — — — 5 Net cash flows provided by (used in) financing activities (629 ) (455 ) (234 ) (698 ) 1,169 (847 ) Effect of exchange rate changes — — — (4 ) — (4 ) Increase (decrease) in cash and restricted cash — 95 4 (27 ) — 72 Cash and restricted cash at beginning of period 0 0 4 90 — 94 Cash and restricted cash at end of period $ 0 $ 95 $ 8 $ 63 $ — $ 166 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) A summary of selected quarterly information follows: 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year (dollars in millions, except per share data) Revenues Net earned premiums $ 164 $ 162 $ 186 $ 178 $ 690 Net investment income 122 101 99 96 418 Net realized investment gains (losses) 32 15 7 (14 ) 40 Net change in fair value of credit derivatives 54 (6 ) 58 5 111 Fair value gains (losses) on CCS (2 ) 2 (4 ) 2 (2 ) Fair value gains (losses) on FG VIEs 10 12 3 5 30 Bargain purchase gain and settlement of pre-existing relationships 58 — — — 58 Other income (loss) 89 22 274 9 394 Expenses Loss and LAE 59 72 223 34 388 Amortization of DAC 4 4 5 6 19 Interest expense 24 25 24 24 97 Other operating expenses 68 57 58 61 244 Income (loss) before provision for income taxes 372 150 313 156 991 Provision (benefit) for income taxes 55 (3 ) 105 104 261 Net income (loss) 317 153 208 52 730 Earnings (loss) per share(1): Basic $ 2.53 $ 1.26 $ 1.75 $ 0.44 $ 6.05 Diluted $ 2.49 $ 1.24 $ 1.72 $ 0.44 $ 5.96 Dividends per share $ 0.1425 $ 0.1425 $ 0.1425 $ 0.1425 $ 0.57 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year (dollars in millions, except per share data) Revenues Net earned premiums $ 183 $ 214 $ 231 $ 236 $ 864 Net investment income 99 98 94 117 408 Net realized investment gains (losses) (13 ) 10 (2 ) (24 ) (29 ) Net change in fair value of credit derivatives (60 ) 63 21 74 98 Fair value gains (losses) on CCS (16 ) (11 ) (23 ) 50 0 Fair value gains (losses) on FG VIEs 18 4 (11 ) 27 38 Bargain purchase gain and settlement of pre-existing relationships — — 259 — 259 Other income (loss) 34 18 (3 ) (10 ) 39 Expenses Loss and LAE 90 102 (9 ) 112 295 Amortization of DAC 4 5 4 5 18 Interest expense 26 25 26 25 102 Other operating expenses 60 63 65 57 245 Income (loss) before provision for income taxes 65 201 480 271 1,017 Provision (benefit) for income taxes 6 55 1 74 136 Net income (loss) 59 146 479 197 881 Earnings (loss) per share(1): Basic $ 0.43 $ 1.09 $ 3.63 $ 1.51 $ 6.61 Diluted $ 0.43 $ 1.09 $ 3.60 $ 1.49 $ 6.56 Dividends per share $ 0.13 $ 0.13 $ 0.13 $ 0.13 $ 0.52 ____________________ (1) Per share amounts for the quarters and the full years have each been calculated separately. Accordingly, quarterly amounts may not sum up to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive. |
Business and Basis of Present33
Business and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and, in the opinion of management, reflect all material adjustments that are of a normal recurring nature, necessary for a fair statement of the financial condition, results of operations and cash flows of the Company and its consolidated variable interest entities (VIEs) for the periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Accounting Policies | Accounting Policies Consistent with one of its key business strategies of supplementing its book of business through acquisitions, the Company has acquired three financial guaranty companies since January 1, 2015, as described below. The acquisitions were accounted for under the acquisition method of accounting which requires that the assets and liabilities acquired be recorded at fair value. The Company exercised significant judgment to determine the fair value of the assets it acquired and liabilities it assumed in each of the acquisitions. The most significant of these determinations related to the valuation of the acquired financial guaranty insurance contracts. On an aggregate basis, the acquired companies' contractual premiums for financial guaranty insurance contracts acquired were less than the premiums a market participant of similar credit quality would demand to acquire those contracts at the date of acquisition (particularly for below-investment-grade (BIG) transactions) resulting in a significant amount of the purchase price being allocated to these contracts. For information on the methodology used to measure the fair value of assets acquired and liabilities assumed in the acquisitions, see Note 7, Fair Value Measurement. The fair value of the Company's stand-ready obligation on the date of acquisition is recorded in unearned premium reserve. Thereafter, loss reserves and loss and loss adjustment expenses (LAE) are recorded in accordance with the Company's accounting policy described in the Note 5, Expected Losses to be Paid, and Note 6, Contracts Accounted for as Insurance. The excess of the fair value of net assets acquired over the consideration transferred was recorded as a bargain purchase gain in "bargain purchase gain and settlement of pre-existing relationships" in net income. In addition, the Company and each of the acquired companies had pre-existing reinsurance relationships, which were effectively settled at fair value on the acquisition dates. The gain or loss on settlement of these pre-existing reinsurance relationships represents the net difference between the historical assumed or ceded balances that were recorded by the Company and the fair value of ceded or assumed balances acquired. |
Consolidation | The consolidated financial statements include the accounts of AGL, its direct and indirect subsidiaries and its consolidated VIEs. Intercompany accounts and transactions between and among all consolidated entities have been eliminated. |
Reclassification | Certain prior-year balances have been reclassified to conform to the current year's presentation. |
Foreign Currency Transactions and Translations | The Company revalues assets, liabilities, revenue and expenses denominated in non-U.S. currencies into U.S. dollars using applicable exchange rates. Gains and losses relating to translating foreign functional currency financial statements for U.S. GAAP reporting are recorded in other comprehensive income (loss) (OCI). Gains and losses relating to transactions in foreign denominations in subsidiaries where the functional currency is the U.S. dollar, are reported in the consolidated statement of operations. |
New Accounting Pronouncements | Future Application of Accounting Standards Income Taxes In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory, which removes the current prohibition against immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. Under the ASU, the selling (transferring) entity is required to recognize a current income tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. The ASU is to be applied on a modified retrospective basis (i.e. by recording a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is adopted). The ASU was adopted on January 1, 2018 with no material effect on the consolidated financial statements. Financial Instruments In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities . The amendments in this ASU are intended to make targeted improvements to GAAP by addressing certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Amendments under this ASU apply to the Company's FG VIE liabilities, for which the Company has historically elected to measure through the income statement under the fair value option, and to certain equity securities in the Company’s investment portfolio. For FG VIE liabilities, the portion of the change in fair value caused by instrument specific credit risk will be separately presented in OCI as opposed to the income statement. Equity securities, except those that are accounted for under the equity method of accounting or that resulted in consolidation of the investee by the Company, will need to be accounted for at fair value with changes in fair value recognized through net income instead of OCI. Effective January 1, 2018, the Company adopted this ASU with a cumulative-effect adjustment to the statement of financial position as of January 1, 2018. This resulted in a reclassification of a $32 million loss, net of tax, from retained earnings to AOCI. Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB issued ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Topic 310-20) - Premium Amortization on Purchased Callable Debt Securities . This ASU shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. This ASU has no effect on the accounting for purchased callable debt securities held at a discount. It is to be applied using a modified retrospective approach and the ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company does not expect this ASU to have a material effect on its consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This ASU requires lessees to present right-of-use assets and lease liabilities on the balance sheet. ASU 2016-02 is to be applied using a modified retrospective approach and is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company intends to adopt this ASU on January 1, 2019. The Company is evaluating the effect that this ASU will have on its consolidated financial statements. The Company currently accounts for its lease agreements where the Company is the lessee as operating leases and, therefore, recognizes its lease expense on a straight-line basis. See Note 15, Commitments and Contingencies for additional information on the Company's leases. Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this ASU are intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions will be required to use forward-looking information to better inform their credit loss estimates as a result of the ASU. While many of the loss estimation techniques applied today will still be permitted, the inputs to those techniques will change to reflect the full amount of expected credit losses. The ASU requires enhanced disclosures to help investors and other financial statement users to better understand significant estimates and judgments used in estimating credit losses, as well as credit quality and underwriting standards of an organization’s portfolio. In addition, the ASU amends the accounting for credit losses on available-for-sale securities and purchased financial assets with credit deterioration. The ASU also eliminates the concept of “other than temporary” from the impairment model for certain available-for-sale securities. Accordingly, the ASU states that an entity must use an allowance approach, must limit the allowance to an amount by which the security’s fair value is less than its amortized cost basis, may not consider the length of time fair value has been less than amortized cost, and may not consider recoveries in fair value after the balance sheet date when assessing whether a credit loss exists. For purchased financial assets with credit deterioration, the ASU requires an entity’s method for measuring credit losses to be consistent with its method for measuring expected losses for originated and purchased non-credit-deteriorated assets. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For debt securities classified as available-for-sale, entities will be required to record a cumulative-effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is adopted. The changes to the impairment model for available-for-sale securities and changes to purchased financial assets with credit deterioration are to be applied prospectively. The Company is evaluating the effect that this ASU will have on its consolidated financial statements. See Note 10, Investments and Cash for the Company's current accounting policy with respect to available-for-sale securities. |
Debt | Long-term debt is recorded at principal amounts net of any unamortized original issue discount or premium and unamortized fair value adjustment for AGMH debt (as of the date of the AGMH acquisition). Discounts and acquisition date fair value adjustments are accreted into interest expense over the life of the applicable debt. |
Revenue Recognition, Deferred Revenue | Accounting for financial guaranty contracts that meet the scope exception under derivative accounting guidance are subject to industry specific guidance for financial guaranty insurance. The accounting for contracts that fall under the financial guaranty insurance definition are consistent whether the contract was written on a direct basis, assumed from another financial guarantor under a reinsurance treaty, ceded to another insurer under a reinsurance treaty, or acquired in a business combination. Premiums receivable comprise the present value of contractual or expected future premium collections discounted using risk free rates. Unearned premium reserve represents deferred premium revenue, less claim payments made and recoveries received that have not yet been recognized in the statement of operations (contra-paid). The following discussion relates to the deferred premium revenue component of the unearned premium reserve, while the contra-paid is discussed below under "Financial Guaranty Insurance Losses." The amount of deferred premium revenue at contract inception is determined as follows: • For premiums received upfront on financial guaranty insurance contracts that were originally underwritten by the Company, deferred premium revenue is equal to the amount of cash received. Upfront premiums typically relate to public finance transactions. • For premiums received in installments on financial guaranty insurance contracts that were originally underwritten by the Company, deferred premium revenue is the present value of either (1) contractual premiums due or (2) in cases where the underlying collateral is comprised of homogeneous pools of assets, the expected premiums to be collected over the life of the contract. To be considered a homogeneous pool of assets, prepayments must be contractually allowable, the amount of prepayments must be probable, and the timing and amount of prepayments must be reasonably estimable. When the Company adjusts prepayment assumptions or expected premium collections, an adjustment is recorded to the deferred premium revenue, with a corresponding adjustment to the premium receivable. Premiums receivable are discounted at the risk-free rate at inception and such discount rate is updated only when changes to prepayment assumptions are made that change the expected date of final maturity. Installment premiums typically relate to structured finance transactions, where the insurance premium rate is determined at the inception of the contract but the insured par is subject to prepayment throughout the life of the transaction. • For financial guaranty insurance contracts acquired in a business combination, deferred premium revenue is equal to the fair value of the Company's stand-ready obligation portion of the insurance contract at the date of acquisition based on what a hypothetical similarly rated financial guaranty insurer would have charged for the contract at that date and not the actual cash flows under the insurance contract. The amount of deferred premium revenue may differ significantly from cash collections due primarily to fair value adjustments recorded in connection with a business combination. The Company recognizes deferred premium revenue as earned premium over the contractual period or expected period of the contract in proportion to the amount of insurance protection provided. As premium revenue is recognized, a corresponding decrease to the deferred premium revenue is recorded. The amount of insurance protection provided is a function of the insured principal amount outstanding. Accordingly, the proportionate share of premium revenue recognized in a given reporting period is a constant rate calculated based on the relationship between the insured principal amounts outstanding in the reporting period compared with the sum of each of the insured principal amounts outstanding for all periods. When an insured financial obligation is retired before its maturity, the financial guaranty insurance contract is extinguished. Any nonrefundable deferred premium revenue related to that contract is accelerated and recognized as premium revenue. When a premium receivable balance is deemed uncollectible, it is written off to bad debt expense. For assumed reinsurance contracts, net earned premiums reported in the consolidated statements of operations are calculated based upon data received from ceding companies, however, some ceding companies report premium data between 30 and 90 days after the end of the reporting period. The Company estimates net earned premiums for the lag period. Differences between such estimates and actual amounts are recorded in the period in which the actual amounts are determined. When installment premiums are related to assumed reinsurance contracts, the Company assesses the credit quality and liquidity of the ceding companies and the impact of any potential regulatory constraints to determine the collectability of such amounts. Deferred premium revenue ceded to reinsurers (ceded unearned premium reserve) is recorded as an asset. Direct, assumed and ceded earned premiums are presented together as net earned premiums in the statement of operations, and comprise the following: |
Policy Acquisition Costs | Policy acquisition costs that are directly related and essential to successful insurance contract acquisition, as well as ceding commission income on ceded reinsurance contracts are deferred and reported net. Amortization of deferred policy acquisition costs includes the accretion of discount on ceding commission receivable and payable. Capitalized policy acquisition costs include expenses such as ceding commission expense on assumed reinsurance contracts and the cost of underwriting personnel attributable to successful underwriting efforts. Ceding commission expense on assumed reinsurance contracts and ceding commission income on ceded reinsurance contracts that are associated with premiums received in installments are calculated at their contractually defined commission rates, discounted consistent with premiums receivable for all future periods, and included in deferred acquisition costs (DAC), with a corresponding offset to net premiums receivable or reinsurance balances payable. Management uses its judgment in determining the type and amount of costs to be deferred. The Company conducts an annual study to determine which operating costs qualify for deferral. Costs incurred for soliciting potential customers, market research, training, administration, unsuccessful acquisition efforts, and product development as well as all overhead type costs are charged to expense as incurred. DAC is amortized in proportion to net earned premiums. When an insured obligation is retired early, the remaining related DAC is recognized at that time. Expected losses and LAE, investment income, and the remaining costs of servicing the insured or reinsured business, are considered in determining the recoverability of DAC. |
Fair Value of Financial Instruments | The Company carries a significant portion of its assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., exit price). The price represents the price available in the principal market for the asset or liability. If there is no principal market, then the price is based on a hypothetical market that maximizes the value received for an asset or minimizes the amount paid for a liability (i.e., the most advantageous market). Fair value is based on quoted market prices, where available. If listed prices or quotes are not available, fair value is based on either internally developed models that primarily use, as inputs, market-based or independently sourced market parameters, including but not limited to yield curves, interest rates and debt prices or with the assistance of an independent third-party using a discounted cash flow approach and the third party’s proprietary pricing models. In addition to market information, models also incorporate transaction details, such as maturity of the instrument and contractual features designed to reduce the Company’s credit exposure, such as collateral rights as applicable. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments include amounts to reflect counterparty credit quality, the Company’s creditworthiness and constraints on liquidity. As markets and products develop and the pricing for certain products becomes more or less transparent, the Company may refine its methodologies and assumptions. During 2017 , no changes were made to the Company’s valuation models that had or are expected to have, a material impact on the Company’s consolidated balance sheets or statements of operations and comprehensive income. The Company’s methods for calculating fair value produce a fair value that may not be indicative of net realizable value or reflective of future fair values. The use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The categorization within the fair value hierarchy is determined based on whether the inputs to valuation techniques used to measure fair value are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Company estimates of market assumptions. The fair value hierarchy prioritizes model inputs into three broad levels as follows, with Level 1 being the highest and Level 3 the lowest. An asset's or liability’s categorization is based on the lowest level of significant input to its valuation. Level 1—Quoted prices for identical instruments in active markets. The Company generally defines an active market as a market in which trading occurs at significant volumes. Active markets generally are more liquid and have a lower bid-ask spread than an inactive market. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and observable inputs other than quoted prices, such as interest rates or yield curves and other inputs derived from or corroborated by observable market inputs. Level 3—Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation. Transfers between Levels 1, 2 and 3 are recognized at the end of the period when the transfer occurs. The Company reviews the classification between Levels 1, 2 and 3 quarterly to determine whether a transfer is necessary. |
Salvage and Subrogation Recoverable | Salvage and Subrogation Recoverable When the Company becomes entitled to the cash flow from the underlying collateral of an insured exposure under salvage and subrogation rights as a result of a claim payment or estimated future claim payment, it reduces the expected loss to be paid on the contract. Such reduction in expected loss to be paid can result in one of the following: • a reduction in the corresponding loss and LAE reserve with a benefit to the income statement, • no entry recorded, if “total loss” is not in excess of deferred premium revenue, or • the recording of a salvage asset with a benefit to the income statement if the transaction is in a net recovery position at the reporting date. The Company recognizes the expected recovery of claim payments (including recoveries from settlement with R&W providers) made by an acquired subsidiary prior to the date of acquisition, consistent with its policy for recognizing recoveries on all financial guaranty insurance contracts. To the extent that the estimated amount of recoveries increases or decreases due to changes in facts and circumstances, the Company would recognize a benefit or expense consistent with how changes in the expected recovery of all other claim payments are recorded. The ceded component of salvage and subrogation recoverable is recorded in the line item reinsurance balances payable. |
Accounting Models | Expected Loss to be Expensed Expected loss to be expensed represents past or expected future net claim payments that have not yet been expensed. Such amounts will be expensed in future periods as deferred premium revenue amortizes into income on financial guaranty insurance policies. Expected loss to be expensed is the Company's projection of incurred losses that will be recognized in future periods, excluding accretion of discount. |
Credit Derivatives | Credit derivatives are recorded at fair value. Changes in fair value are recorded in “net change in fair value of credit derivatives” on the consolidated statement of operations. Realized gains (losses) and other settlements on credit derivatives include credit derivative premiums received and receivable for credit protection the Company has sold under its insured CDS contracts, premiums paid and payable for credit protection the Company has purchased, claims paid and payable and received and receivable related to insured credit events under these contracts, ceding commission expense or income and realized gains or losses related to their early termination. Fair value of credit derivatives is reflected as either net assets or net liabilities determined on a contract by contract basis in the Company's consolidated balance sheets. See Note 7, Fair Value Measurement, for a discussion on the fair value methodology for credit derivatives. |
Consolidation, Variable Interest Entity | The Company evaluates whether it is the primary beneficiary of its VIEs. If the Company concludes that it is the primary beneficiary, it is required to consolidate the entire VIE in the Company's financial statements and eliminate the effects of the financial guaranty insurance contracts issued by AGM and AGC on the consolidated FG VIEs debt obligations. The primary beneficiary of a VIE is the enterprise that has both 1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance; and 2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. As part of the terms of its financial guaranty contracts, the Company, under its insurance contract, obtains certain protective rights with respect to the VIE that give the Company additional controls over a VIE. These protective rights are triggered by the occurrence of certain events, such as failure to be in compliance with a covenant due to poor deal performance or a deterioration in a servicer or collateral manager's financial condition. At deal inception, the Company typically is not deemed to control a VIE; however, once a trigger event occurs, the Company's control of the VIE typically increases. The Company continuously evaluates its power to direct the activities that most significantly impact the economic performance of VIEs that have debt obligations insured by the Company and, accordingly, where the Company is obligated to absorb VIE losses or receive benefits that could potentially be significant to the VIE. The Company is deemed to be the control party for certain VIEs under GAAP, typically when its protective rights give it the power to both terminate and replace the deal servicer, which are characteristics specific to the Company's financial guaranty contracts. If the protective rights that could make the Company the control party have not been triggered, then the VIE is not consolidated. If the Company is deemed no longer to have those protective rights, the VIE is deconsolidated. The FG VIEs' liabilities that are insured by the Company are considered to be with recourse, because the Company guarantees the payment of principal and interest regardless of the performance of the related FG VIEs' assets. FG VIEs' liabilities that are not insured by the Company are considered to be without recourse, because the payment of principal and interest of these liabilities is wholly dependent on the performance of the FG VIEs' assets. The Company has limited contractual rights to obtain the financial records of its consolidated FG VIEs. The FG VIEs do not prepare separate GAAP financial statements; therefore, the Company compiles GAAP financial information for them based on trustee reports prepared by and received from third parties. Such trustee reports are not available to the Company until approximately 30 days after the end of any given period. The time required to perform adequate reconciliations and analyses of the information in these trustee reports results in a one quarter lag in reporting the FG VIEs' activities. The Company records the fair value of FG VIE assets and liabilities based on modeled prices. The Company updates the model assumptions each reporting period for the most recent available information, which incorporates the impact of material events that may have occurred since the quarter lag date. The net change in the fair value of consolidated FG VIE assets and liabilities is recorded in "fair value gains (losses) on FG VIEs" in the consolidated statements of operations. Interest income and interest expense are derived from the trustee reports and also included in “fair value gains (losses) on FG VIEs.” The Company has elected the fair value option for assets and liabilities classified as FG VIEs' assets and liabilities because the carrying amount transition method was not practical. The cash flows generated by the FG VIE assets are classified as cash flows from investing activities. Paydowns of FG liabilities are supported by the cash flows generated by FG VIE assets, and for liabilities with recourse, possibly claim payments made by AGM or AGC under its financial guaranty insurance contracts. Paydowns of FG liabilities both with and without recourse are classified as cash flows used in financing activities by the Company. Interest income, interest expense and other expenses of the FG VIE assets and liabilities are classified as operating cash flows. Claim payments made by AGC and AGM under the financial guaranty contracts issued to the FG VIEs are eliminated upon consolidation and therefore such claim payments are treated as paydowns of FG VIE liabilities as a financing activity as opposed to an operating activity of AGM and AGC. |
Investments and Cash | The vast majority of the Company's investment portfolio is composed of fixed-maturity and short-term investments, classified as available-for-sale at the time of purchase (approximately 99.2% based on fair value as of December 31, 2017 ), and therefore carried at fair value. Changes in fair value for other-than-temporarily-impaired (OTTI) securities are bifurcated between credit losses and non-credit changes in fair value. The credit loss on OTTI securities is recorded in the statement of operations and the non-credit component of the change in fair value of securities, whether OTTI or not, is recorded in OCI. For securities in an unrealized loss position where the Company has the intent to sell or it is more-likely-than-not that it will be required to sell the security before recovery, the entire impairment loss (i.e., the difference between the security's fair value and its amortized cost) is recorded in the consolidated statements of operations. Credit losses reduce the amortized cost of impaired securities. The amortized cost basis is adjusted for accretion and amortization (using the effective interest method) with a corresponding entry recorded in net investment income. Realized gains and losses on sales of investments are determined using the specific identification method. Realized loss includes amounts recorded for other-than-temporary impairments on debt securities and the declines in fair value of securities for which the Company has the intent to sell the security or inability to hold until recovery of amortized cost. For mortgage‑backed securities, and any other holdings for which there is prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any necessary adjustments due to changes in effective yields and maturities are recognized in net investment income using the retrospective method. Loss mitigation securities are generally purchased at a discount and are accounted for based on their underlying investment type, excluding the effects of the Company’s insurance. Interest income on loss mitigation securities is recognized on a level yield basis over the remaining life of the security. Short-term investments, which are those investments with a maturity of less than one year at time of purchase, are carried at fair value and include amounts deposited in money market funds. Other invested assets, as of December 31, 2017, primarily include an investment in the limited partnership interest of a fund that invests in the equity of private equity managers and a minority interest in an independent investment advisory firm specializing in separately managed accounts, both of which are accounted for under the equity method, and preferred stocks, which are carried at fair value with changes in unrealized gains and losses recorded in OCI. |
Income Tax | The provision for income taxes consists of an amount for taxes currently payable and an amount for deferred taxes. Deferred income taxes are provided for temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities, using enacted rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded to reduce the deferred tax asset to an amount that is more likely than not to be realized. Non-interest-bearing tax and loss bonds are purchased in the amount of the tax benefit that results from deducting contingency reserves as provided under Internal Revenue Code Section 832(e). The Company records the purchase of tax and loss bonds in deferred taxes. The Company recognizes tax benefits only if a tax position is “more likely than not” to prevail. |
Reinsurance Accounting | For business assumed and ceded, the accounting model of the underlying direct financial guaranty contract dictates the accounting model used for the reinsurance contract (except for those eliminated as FG VIEs). For any assumed or ceded financial guaranty insurance premiums and losses, the accounting models described in Note 6 are followed. For any assumed or ceded credit derivative contracts, the accounting model in Note 8 is followed |
Share-based Compensation | Share-based compensation expense is based on the grant date fair value using the grant date closing price, the lattice, Monte Carlo or Black-Scholes-Merton (Black-Scholes) pricing models. The Company amortizes the fair value of share-based awards on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods, with the exception of retirement‑eligible employees. For retirement-eligible employees, certain awards contain retirement provisions and therefore are amortized over the period through the date the employee first becomes eligible to retire and is no longer required to provide service to earn part or all of the award. The fair value of each award under the Assured Guaranty Ltd. Employee Stock Purchase Plan is estimated at the beginning of each offering period using the Black-Scholes option valuation model. The expense for Performance Retention Plan awards is recognized straight-line over the requisite service period, with the exception of retirement eligible employees. For retirement eligible employees, the expense is recognized immediately. |
Compensation Related Costs | Share-based compensation expense is based on the grant date fair value using the grant date closing price, the lattice, Monte Carlo or Black-Scholes-Merton (Black-Scholes) pricing models. The Company amortizes the fair value of share-based awards on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods, with the exception of retirement‑eligible employees. For retirement-eligible employees, certain awards contain retirement provisions and therefore are amortized over the period through the date the employee first becomes eligible to retire and is no longer required to provide service to earn part or all of the award. The fair value of each award under the Assured Guaranty Ltd. Employee Stock Purchase Plan is estimated at the beginning of each offering period using the Black-Scholes option valuation model. The expense for Performance Retention Plan awards is recognized straight-line over the requisite service period, with the exception of retirement eligible employees. For retirement eligible employees, the expense is recognized immediately. |
Cash and Cash Equivalents | Cash consists of cash on hand and demand deposits. As a result of the lag in reporting FG VIEs, cash and short-term investments do not reflect cash outflow to the holders of the debt issued by the FG VIEs for claim payments made by the Company's insurance subsidiaries to the consolidated FG VIEs until the subsequent reporting period. |
Loss and Loss Adjustment Expense Reserve | Loss and LAE Reserve Loss and LAE reserve reported on the balance sheet relates only to direct and assumed reinsurance contracts that are accounted for as insurance, substantially all of which are financial guaranty insurance contracts. The corresponding reserve ceded to reinsurers is reported as reinsurance recoverable on unpaid losses. As discussed in Note 7, Fair Value Measurement, contracts that meet the definition of a derivative, as well as consolidated FG VIE assets and liabilities, are recorded separately at fair value. Any expected losses related to consolidated FG VIEs are eliminated upon consolidation. Under financial guaranty insurance accounting, the sum of unearned premium reserve and loss and LAE reserve represents the Company's stand‑ready obligation. Unearned premium reserve is deferred premium revenue, less claim payments and recoveries received that have not yet been recognized in the statement of operations (contra-paid). At contract inception, the entire stand-ready obligation is represented by unearned premium reserve. A loss and LAE reserve for an insurance contract is recorded only to the extent, and for the amount, that expected loss to be paid plus contra-paid (“total losses”) exceed the deferred premium revenue, on a contract by contract basis. As a result, the Company has expected loss to be paid that has not yet been expensed. Such amounts will be recognized in future periods as deferred premium revenue amortizes into income. When a claim or LAE payment is made on a contract, it first reduces any recorded loss and LAE reserve. To the extent there is no loss and LAE reserve on a contract, then such claim payment is recorded as “contra-paid,” which reduces the unearned premium reserve. The contra-paid is recognized in the line item “loss and LAE” in the consolidated statement of operations when and for the amount that total losses exceed the remaining deferred premium revenue on the insurance contract. Loss and LAE in the consolidated statement of operations is presented net of cessions to reinsurers. |
Commitments and Contingencies | Accounting Policy The Company establishes accruals for litigation and regulatory matters to the extent it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but if the matter is material, it is disclosed, including matters discussed below. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews. |
Earnings Per Share | The Company computes EPS using a two-class method, which is an earnings allocation formula that determines EPS for (i) each class of common stock (the Company has a single class of common stock), and (ii) participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Restricted stock awards and share units under the AGC supplemental executive retirement plan (AGC SERP) are considered participating securities as they received non-forfeitable rights to dividends (or dividend equivalents) as common stock. Basic EPS is then calculated by dividing net (loss) income available to common shareholders of Assured Guaranty by the weighted‑average number of common shares outstanding during the period. Diluted EPS adjusts basic EPS for the effects of restricted stock, restricted stock units, stock options and other potentially dilutive financial instruments (dilutive securities), only in the periods in which such effect is dilutive. The effect of the dilutive securities is reflected in diluted EPS by application of the more dilutive of (1) the treasury stock method or (2) the two-class method assuming nonvested shares are not converted into common shares. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
MBIA UK [Member] | |
Business Acquisition [Line Items] | |
Schedule of settlement of pre-existing relationships | The following table shows the net effect of the MBIA UK Acquisition, including the effects of the settlement of pre-existing relationships. Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships Net effect of Settlement of Pre-existing Relationships Net Effect of MBIA UK Acquisition (in millions) Purchase price (1) $ 334 $ — $ 334 Identifiable assets acquired: Investments 459 — 459 Cash 72 — 72 Premiums receivable, net of commissions payable 274 (4 ) 270 Other assets 16 (6 ) 10 Total assets 821 (10 ) 811 Liabilities assumed: Unearned premium reserves 389 (6 ) 383 Current tax payable 25 — 25 Other liabilities 4 (5 ) (1 ) Total liabilities 418 (11 ) 407 Net assets of MBIA UK 403 1 404 Cash acquired from MBIA Holdings 23 — 23 Deferred tax liability (36 ) — (36 ) Net asset effect of MBIA UK Acquisition 390 1 391 Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax 56 1 57 Deferred tax — 1 1 Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax $ 56 $ 2 $ 58 _____________________ (1) The purchase price of $334 million was allocated as follows: (1) $329 million for the purchase of net assets of $385 million , and (2) the settlement of pre-existing relationships between MBIA UK and Assured Guaranty at a fair value of $5 million |
Schedule of fair values of assets and liabilities acquired from acquisition | The following table shows the net effect of the MBIA UK Acquisition, including the effects of the settlement of pre-existing relationships. Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships Net effect of Settlement of Pre-existing Relationships Net Effect of MBIA UK Acquisition (in millions) Purchase price (1) $ 334 $ — $ 334 Identifiable assets acquired: Investments 459 — 459 Cash 72 — 72 Premiums receivable, net of commissions payable 274 (4 ) 270 Other assets 16 (6 ) 10 Total assets 821 (10 ) 811 Liabilities assumed: Unearned premium reserves 389 (6 ) 383 Current tax payable 25 — 25 Other liabilities 4 (5 ) (1 ) Total liabilities 418 (11 ) 407 Net assets of MBIA UK 403 1 404 Cash acquired from MBIA Holdings 23 — 23 Deferred tax liability (36 ) — (36 ) Net asset effect of MBIA UK Acquisition 390 1 391 Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax 56 1 57 Deferred tax — 1 1 Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax $ 56 $ 2 $ 58 _____________________ (1) The purchase price of $334 million was allocated as follows: (1) $329 million for the purchase of net assets of $385 million , and (2) the settlement of pre-existing relationships between MBIA UK and Assured Guaranty at a fair value of $5 million |
Schedule of unaudited pro forma results of operations | Unaudited Pro Forma Results of Operations Year Ended December 31, 2016 (in millions, except per share amounts) Pro forma revenues $ 1,849 Pro forma net income 1,005 Pro forma earnings per share (EPS): Basic 7.55 Diluted 7.49 |
CIFG Holding Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of settlement of pre-existing relationships | The following table shows the net effect of the CIFG Acquisition, including the effects of the settlement of pre-existing relationships. Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships Net effect of Settlement of Pre-existing Relationships Net Effect of CIFG Acquisition (in millions) Cash Purchase Price (1) $ 443 $ — $ 443 Identifiable assets acquired: Investments 770 — 770 Cash 8 — 8 Premiums receivable, net of commissions payable 18 — 18 Ceded unearned premium reserve 173 (173 ) — Deferred acquisition costs 1 (1 ) — Salvage and subrogation recoverable 23 — 23 Credit derivative assets 1 — 1 Deferred tax asset, net 194 34 228 Other assets 4 — 4 Total assets 1,192 (140 ) 1,052 Liabilities assumed: Unearned premium reserves 306 (10 ) 296 Loss and loss adjustment expense reserve 1 (66 ) (65 ) Credit derivative liabilities 68 0 68 Other liabilities 17 — 17 Total liabilities 392 (76 ) 316 Net asset effect of CIFG Acquisition 800 (64 ) 736 Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, after-tax 357 (64 ) 293 Deferred tax — (34 ) (34 ) Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, pre-tax $ 357 $ (98 ) $ 259 _____________________ (1) The cash purchase price of $443 million represents the cash transferred for the acquisition which was allocated as follows: (1) $270 million for the purchase of net assets of $627 million , and (2) the settlement of pre-existing relationships between CIFGH and Assured Guaranty at a fair value of $173 million . |
Schedule of fair values of assets and liabilities acquired from acquisition | The following table shows the net effect of the CIFG Acquisition, including the effects of the settlement of pre-existing relationships. Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships Net effect of Settlement of Pre-existing Relationships Net Effect of CIFG Acquisition (in millions) Cash Purchase Price (1) $ 443 $ — $ 443 Identifiable assets acquired: Investments 770 — 770 Cash 8 — 8 Premiums receivable, net of commissions payable 18 — 18 Ceded unearned premium reserve 173 (173 ) — Deferred acquisition costs 1 (1 ) — Salvage and subrogation recoverable 23 — 23 Credit derivative assets 1 — 1 Deferred tax asset, net 194 34 228 Other assets 4 — 4 Total assets 1,192 (140 ) 1,052 Liabilities assumed: Unearned premium reserves 306 (10 ) 296 Loss and loss adjustment expense reserve 1 (66 ) (65 ) Credit derivative liabilities 68 0 68 Other liabilities 17 — 17 Total liabilities 392 (76 ) 316 Net asset effect of CIFG Acquisition 800 (64 ) 736 Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, after-tax 357 (64 ) 293 Deferred tax — (34 ) (34 ) Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, pre-tax $ 357 $ (98 ) $ 259 _____________________ (1) The cash purchase price of $443 million represents the cash transferred for the acquisition which was allocated as follows: (1) $270 million for the purchase of net assets of $627 million , and (2) the settlement of pre-existing relationships between CIFGH and Assured Guaranty at a fair value of $173 million . |
Radian [Member] | |
Business Acquisition [Line Items] | |
Schedule of settlement of pre-existing relationships | The following table shows the net effect of the Radian Asset Acquisition at the Radian Acquisition Date, including the effects of the settlement of pre-existing relationships. Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships Net effect of Settlement of Pre-existing Relationships Net Effect of Radian Asset Acquisition (in millions) Cash purchase price(1) $ 804 $ — $ 804 Identifiable assets acquired: Investments 1,473 — 1,473 Cash 4 — 4 Ceded unearned premium reserve (3 ) (65 ) (68 ) Credit derivative assets 30 — 30 Deferred tax asset, net 263 (56 ) 207 Financial guaranty variable interest entities’ assets 122 — 122 Other assets 86 (67 ) 19 Total assets 1,975 (188 ) 1,787 Liabilities assumed: Unearned premium reserves 697 (216 ) 481 Credit derivative liabilities 271 (26 ) 245 Financial guaranty variable interest entities’ liabilities 118 — 118 Other liabilities 30 (49 ) (19 ) Total liabilities 1,116 (291 ) 825 Net asset effect of Radian Asset Acquisition 859 103 962 Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, after-tax 55 103 158 Deferred tax — 56 56 Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, pre-tax $ 55 $ 159 $ 214 _____________________ (1) The cash purchase price of $804 million was the cash transferred for the acquisition which was allocated as follows: (1) $987 million for the purchase of net assets of $1,042 million , and (2) the settlement of pre-existing relationships between Radian Asset and Assured Guaranty at a fair value of $ (183) million . |
Schedule of fair values of assets and liabilities acquired from acquisition | The following table shows the net effect of the Radian Asset Acquisition at the Radian Acquisition Date, including the effects of the settlement of pre-existing relationships. Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships Net effect of Settlement of Pre-existing Relationships Net Effect of Radian Asset Acquisition (in millions) Cash purchase price(1) $ 804 $ — $ 804 Identifiable assets acquired: Investments 1,473 — 1,473 Cash 4 — 4 Ceded unearned premium reserve (3 ) (65 ) (68 ) Credit derivative assets 30 — 30 Deferred tax asset, net 263 (56 ) 207 Financial guaranty variable interest entities’ assets 122 — 122 Other assets 86 (67 ) 19 Total assets 1,975 (188 ) 1,787 Liabilities assumed: Unearned premium reserves 697 (216 ) 481 Credit derivative liabilities 271 (26 ) 245 Financial guaranty variable interest entities’ liabilities 118 — 118 Other liabilities 30 (49 ) (19 ) Total liabilities 1,116 (291 ) 825 Net asset effect of Radian Asset Acquisition 859 103 962 Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, after-tax 55 103 158 Deferred tax — 56 56 Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, pre-tax $ 55 $ 159 $ 214 _____________________ (1) The cash purchase price of $804 million was the cash transferred for the acquisition which was allocated as follows: (1) $987 million for the purchase of net assets of $1,042 million , and (2) the settlement of pre-existing relationships between Radian Asset and Assured Guaranty at a fair value of $ (183) million . |
Schedule of unaudited pro forma results of operations | Unaudited Pro Forma Results of Operations Year Ended December 31, 2015 (in millions, except per share amounts) Pro forma revenues $ 2,030 Pro forma net income 922 Pro forma EPS: Basic 6.22 Diluted 6.18 |
Rating Actions (Tables)
Rating Actions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Rating Actions [Abstract] | |
Schedule of Credit Quality Indicators | The financial strength ratings (or similar ratings) for the Company’s insurance companies, along with the date of the most recent rating action (or confirmation) by the rating agency, are shown in the table below. Ratings are subject to continuous rating agency review and revision or withdrawal at any time. In addition, the Company periodically assesses the value of each rating assigned to each of its companies, and as a result of such assessment may request that a rating agency add or drop a rating from certain of its companies. S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC Kroll Bond Rating Agency Moody’s Investors Service, Inc. A.M. Best Company, Inc. AGM AA (stable) (6/26/17) AA+ (stable) (1/23/18) A2 (stable) (8/8/16) — AGC AA (stable) (6/26/17) AA (stable) (12/1/17) (1) — MAC AA (stable) (6/26/17) AA+ (stable) (7/14/17) — — AG Re AA (stable) (6/26/17) — — — AGRO AA (stable) (6/26/17) — — A+ (stable) (6/15/17) AGE AA (stable) (6/26/17) — A2 (stable) (8/8/16) — AGUK AA (stable) (6/26/17) — (1) — AGLN BB (positive) (1/12/17) — (2) — CIFGE — — — — ____________________ (1) AGC requested that Moody’s Investors Service, Inc. (Moody's) withdraw its financial strength ratings of AGC and AGUK in January 2017, but Moody's denied that request. Moody’s continues to rate AGC A3 (stable) and AGUK A3; Moody's put AGUK on review for upgrade on June 27, 2017, following its transfer to AGM. (2) Assured Guaranty did not request that Moody's rate AGLN. Moody's continues to rate AGLN, and upgraded its rating to Baa2 (stable) on January 13, 2017, following its acquisition by AGC, and then to Baa1 on review for further upgrade on June 27, 2017, following its transfer to AGM. |
Outstanding Exposure (Tables)
Outstanding Exposure (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of Insured Financial Obligations [Line Items] | |
Debt Service Outstanding | Financial Guaranty Debt Service Outstanding Gross Debt Service Outstanding Net Debt Service Outstanding December 31, December 31, December 31, December 31, (in millions) Public finance $ 393,010 $ 425,849 $ 386,092 $ 409,447 Structured finance 15,482 29,151 15,026 28,088 Total financial guaranty $ 408,492 $ 455,000 $ 401,118 $ 437,535 |
Financial Guaranty Portfolio by Internal Rating | Financial Guaranty Portfolio by Internal Rating As of December 31, 2017 Public Finance Public Finance Non-U.S. Structured Finance U.S Structured Finance Non-U.S Total Rating Net Par % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % (dollars in millions) AAA $ 877 0.4 % $ 2,541 5.9 % $ 1,655 14.7 % $ 319 22.5 % $ 5,392 2.1 % AA 30,016 14.3 205 0.5 3,915 34.9 76 5.4 34,212 12.9 A 118,620 56.7 13,936 32.5 1,630 14.5 210 14.9 134,396 50.7 BBB 52,739 25.2 24,509 57.1 763 6.8 703 49.7 78,714 29.7 BIG 7,140 3.4 1,731 4.0 3,261 29.1 106 7.5 12,238 4.6 Total net par outstanding $ 209,392 100.0 % $ 42,922 100.0 % $ 11,224 100.0 % $ 1,414 100.0 % $ 264,952 100.0 % Financial Guaranty Portfolio by Internal Rating As of December 31, 2016 Public Finance U.S. Public Finance Non-U.S. Structured Finance U.S Structured Finance Non-U.S Total Rating Category Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % (dollars in millions) AAA $ 2,066 0.8 % $ 2,221 8.4 % $ 9,757 44.2 % $ 1,447 47.0 % $ 15,491 5.2 % AA 46,420 19.0 170 0.6 5,773 26.2 127 4.1 52,490 17.7 A 133,829 54.7 6,270 23.8 1,589 7.2 456 14.8 142,144 48.0 BBB 55,103 22.5 16,378 62.1 879 4.0 759 24.6 73,119 24.7 BIG 7,380 3.0 1,342 5.1 4,059 18.4 293 9.5 13,074 4.4 Total net par outstanding $ 244,798 100.0 % $ 26,381 100.0 % $ 22,057 100.0 % $ 3,082 100.0 % $ 296,318 100.0 % |
Financial Guaranty Portfolio by Asset Class | Financial Guaranty Portfolio by Sector Gross Par Outstanding Net Par Outstanding Sector As of As of As of As of (in millions) Public finance: U.S.: General obligation $ 91,531 $ 110,167 $ 90,705 $ 107,717 Tax backed 44,783 51,325 44,350 49,931 Municipal utilities 32,584 38,442 32,357 37,603 Transportation 17,193 19,915 17,030 19,403 Healthcare 9,087 11,940 8,763 11,238 Higher education 8,210 10,114 8,195 10,085 Infrastructure finance 4,259 3,902 4,216 3,769 Housing revenue 1,336 1,593 1,319 1,559 Investor-owned utilities 523 697 523 697 Other public finance 1,935 2,810 1,934 2,796 Total public finance—U.S. 211,441 250,905 209,392 244,798 Non-U.S.: Infrastructure finance 18,916 11,818 18,234 10,731 Regulated utilities 17,691 11,395 16,689 9,263 Pooled infrastructure 1,561 1,621 1,561 1,513 Other public finance 6,692 5,653 6,438 4,874 Total public finance—non-U.S. 44,860 30,487 42,922 26,381 Total public finance 256,301 281,392 252,314 271,179 Structured finance: U.S.: Residential Mortgage-Backed Securities (RMBS) 4,864 5,933 4,818 5,637 Consumer receivables 1,591 1,707 1,590 1,652 Insurance securitizations 1,825 2,355 1,449 2,308 Financial products 1,418 1,540 1,418 1,540 Pooled corporate obligations 1,347 10,273 1,347 10,050 Commercial receivables 146 234 146 230 Other structured finance 461 689 456 640 Total structured finance—U.S. 11,652 22,731 11,224 22,057 Non-U.S.: RMBS 655 661 637 604 Commercial receivables 296 373 296 356 Pooled corporate obligations 157 1,716 157 1,535 Other structured finance 325 601 324 587 Total structured finance—non-U.S. 1,433 3,351 1,414 3,082 Total structured finance 13,085 26,082 12,638 25,139 Total net par outstanding $ 269,386 $ 307,474 $ 264,952 $ 296,318 |
Expected Amortization of Net Par Outstanding | Expected Amortization of Net Par Outstanding As of December 31, 2017 Public Finance Structured Finance Total (in millions) 0 to 5 years $ 78,860 $ 6,106 $ 84,966 5 to 10 years 51,541 2,632 54,173 10 to 15 years 45,634 1,718 47,352 15 to 20 years 34,974 1,892 36,866 20 years and above 41,305 290 41,595 Total net par outstanding $ 252,314 $ 12,638 $ 264,952 |
Components of BIG Net Par Outstanding (Insurance and Credit Derivative Form) | Components of BIG Net Par Outstanding As of December 31, 2017 BIG Net Par Outstanding Net Par BIG 1 BIG 2 BIG 3 Total BIG Outstanding (in millions) Public finance: U.S. public finance $ 2,368 $ 663 $ 4,109 $ 7,140 $ 209,392 Non-U.S. public finance 1,455 276 — 1,731 42,922 Public finance 3,823 939 4,109 8,871 252,314 Structured finance: U.S. RMBS 374 304 2,083 2,761 4,818 Triple-X life insurance transactions — — 85 85 1,199 Trust preferred securities (TruPS) 161 — — 161 1,349 Other structured finance 170 118 72 360 5,272 Structured finance 705 422 2,240 3,367 12,638 Total $ 4,528 $ 1,361 $ 6,349 $ 12,238 $ 264,952 Components of BIG Net Par Outstanding As of December 31, 2016 BIG Net Par Outstanding Net Par BIG 1 BIG 2 BIG 3 Total BIG Outstanding (in millions) Public finance: U.S. public finance $ 2,402 $ 3,123 $ 1,855 $ 7,380 $ 244,798 Non-U.S. public finance 1,288 54 — 1,342 26,381 Public finance 3,690 3,177 1,855 8,722 271,179 Structured finance: U.S. RMBS 197 493 2,461 3,151 5,637 Triple-X life insurance transactions — — 126 126 2,057 TruPS 304 126 — 430 1,892 Other structured finance 304 263 78 645 15,553 Structured finance 805 882 2,665 4,352 25,139 Total $ 4,495 $ 4,059 $ 4,520 $ 13,074 $ 296,318 |
BIG Net Par Outstanding and Number of Risks | BIG Net Par Outstanding and Number of Risks As of December 31, 2017 Net Par Outstanding Number of Risks(2) Description Financial Guaranty Insurance(1) Credit Derivative Total Financial Guaranty Insurance(1) Credit Derivative Total (dollars in millions) BIG: Category 1 $ 4,301 $ 227 $ 4,528 139 7 146 Category 2 1,344 17 1,361 46 3 49 Category 3 6,255 94 6,349 150 9 159 Total BIG $ 11,900 $ 338 $ 12,238 335 19 354 BIG Net Par Outstanding and Number of Risks As of December 31, 2016 Net Par Outstanding Number of Risks(2) Description Financial Guaranty Insurance(1) Credit Derivative Total Financial Guaranty Insurance(1) Credit Derivative Total (dollars in millions) BIG: Category 1 $ 3,861 $ 634 $ 4,495 165 10 175 Category 2 3,857 202 4,059 79 6 85 Category 3 4,383 137 4,520 148 9 157 Total BIG $ 12,101 $ 973 $ 13,074 392 25 417 _____________________ (1) Includes net par outstanding for VIEs. (2) A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments. Financial Guaranty Insurance BIG Transaction Loss Summary As of December 31, 2017 BIG Categories BIG 1 BIG 2 BIG 3 Total BIG, Net Effect of Consolidating FG VIEs Total Gross Ceded Gross Ceded Gross Ceded (dollars in millions) Number of risks(1) 139 (22 ) 46 (3 ) 150 (41 ) 335 — 335 Remaining weighted-average contract period (in years) 8.9 7.3 14.0 2.9 9.6 9.3 9.9 — 9.9 Outstanding exposure: Principal $ 4,397 $ (96 ) $ 1,352 $ (8 ) $ 6,445 $ (190 ) $ 11,900 $ — $ 11,900 Interest 2,110 (42 ) 1,002 (1 ) 3,098 (86 ) 6,081 — 6,081 Total(2) $ 6,507 $ (138 ) $ 2,354 $ (9 ) $ 9,543 $ (276 ) $ 17,981 $ — $ 17,981 Expected cash outflows (inflows) $ 186 $ (5 ) $ 492 $ (1 ) $ 3,785 $ (104 ) $ 4,353 $ (307 ) $ 4,046 Potential recoveries(3) (595 ) 20 (145 ) 0 (2,273 ) 67 $ (2,926 ) 194 (2,732 ) Subtotal (409 ) 15 347 (1 ) 1,512 (37 ) 1,427 (113 ) 1,314 Discount 66 (4 ) (93 ) 0 (78 ) (2 ) (111 ) 23 (88 ) Present value of expected cash flows $ (343 ) $ 11 $ 254 $ (1 ) $ 1,434 $ (39 ) $ 1,316 $ (90 ) $ 1,226 Deferred premium revenue $ 112 $ (5 ) $ 129 $ 0 $ 540 $ (6 ) $ 770 $ (74 ) $ 696 Reserves (salvage) $ (380 ) $ 11 $ 202 $ (1 ) $ 1,100 $ (34 ) $ 898 $ (55 ) $ 843 Financial Guaranty Insurance BIG Transaction Loss Summary As of December 31, 2016 BIG Categories BIG 1 BIG 2 BIG 3 Total BIG, Net Effect of Consolidating FG VIEs Total Gross Ceded Gross Ceded Gross Ceded (dollars in millions) Number of risks(1) 165 (35 ) 79 (11 ) 148 (49 ) 392 — 392 Remaining weighted-average contract period (in years) 8.6 7.0 13.2 10.5 8.1 6.0 10.1 — 10.1 Outstanding exposure: Principal $ 4,187 $ (326 ) $ 4,273 $ (416 ) $ 4,703 $ (320 ) $ 12,101 $ — $ 12,101 Interest 1,932 (140 ) 2,926 (219 ) 1,867 (87 ) 6,279 — 6,279 Total(2) $ 6,119 $ (466 ) $ 7,199 $ (635 ) $ 6,570 $ (407 ) $ 18,380 $ — $ 18,380 Expected cash outflows (inflows) 172 (19 ) 1,404 (86 ) 1,435 (65 ) 2,841 (326 ) 2,515 Potential recoveries(3) (440 ) 23 (146 ) 4 (743 ) 45 (1,257 ) 198 (1,059 ) Subtotal (268 ) 4 1,258 (82 ) 692 (20 ) 1,584 (128 ) 1,456 Discount 61 (4 ) (355 ) 19 (114 ) (4 ) (397 ) 24 (373 ) Present value of expected cash flows (207 ) 0 903 (63 ) 578 (24 ) 1,187 (104 ) 1,083 Deferred premium revenue $ 131 $ (5 ) $ 246 $ (6 ) $ 476 $ (30 ) $ 812 $ (86 ) $ 726 Reserves (salvage) $ (255 ) $ 5 $ 738 $ (58 ) $ 343 $ (10 ) $ 763 $ (64 ) $ 699 ____________________ (1) A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments. The ceded number of risks represents the number of risks for which the Company ceded a portion of its exposure. (2) Includes BIG amounts related to FG VIEs. (3) Includes excess spread and R&W receivables and payables. |
Schedule of Geographic Exposure of Net Par Outstanding | Geographic Distribution of Net Par Outstanding As of December 31, 2017 Number of Risks Net Par Outstanding Percent of Total Net Par Outstanding (dollars in millions) U.S.: U.S. Public finance: California 1,368 $ 36,507 13.8 % Texas 1,229 19,027 7.2 Pennsylvania 744 18,061 6.8 Illinois 702 17,044 6.4 New York 871 15,672 5.9 New Jersey 444 12,441 4.7 Florida 294 10,272 3.9 Michigan 439 6,353 2.4 Puerto Rico 18 4,968 1.9 Alabama 296 4,808 1.8 Other 3,112 64,239 24.3 Total U.S. public finance 9,517 209,392 79.1 U.S. Structured finance (multiple states) 512 11,224 4.2 Total U.S. 10,029 220,616 83.3 Non-U.S.: United Kingdom 126 30,062 11.3 France 10 3,167 1.2 Canada 9 2,690 1.0 Australia 12 2,309 0.9 Italy 9 1,497 0.6 Other 44 4,611 1.7 Total non-U.S. 210 44,336 16.7 Total 10,239 $ 264,952 100.0 % |
Puerto Rico [Member] | |
Schedule of Insured Financial Obligations [Line Items] | |
BIG Net Par Outstanding and Number of Risks | Amortization Schedule of Puerto Rico Net Par Outstanding and Net Debt Service Outstanding As of December 31, 2017 Scheduled Net Par Amortization Scheduled Net Debt Service Amortization (in millions) 2018 (January 1 - March 31) $ 0 $ 123 2018 (April 1 - June 30) 0 3 2018 (July 1 - September 30) 200 322 2018 (October 1 - December 31) 0 3 Subtotal 2018 200 451 2019 223 464 2020 285 516 2021 147 364 2022 137 345 2023-2027 1,229 2,129 2028-2032 812 1,436 2033-2037 1,217 1,572 2038-2042 453 602 2043-2047 263 316 Total $ 4,966 $ 8,195 |
Gross Par and Gross Debt Service Outstanding | Puerto Rico Gross Par and Gross Debt Service Outstanding Gross Par Outstanding Gross Debt Service Outstanding December 31, December 31, December 31, December 31, (in millions) Exposure to Puerto Rico $ 5,186 $ 5,435 $ 8,514 $ 9,038 |
Schedule of Geographic Exposure of Net Par Outstanding | Puerto Rico Net Par Outstanding (1) As of As of (in millions) Commonwealth Constitutionally Guaranteed Commonwealth of Puerto Rico - General Obligation Bonds (2) $ 1,419 $ 1,476 PBA 141 169 Public Corporations - Certain Revenues Potentially Subject to Clawback PRHTA (Transportation revenue) (2) 882 918 PRHTA (Highways revenue) (2) 495 350 PRCCDA 152 152 PRIFA 18 18 Other Public Corporations PREPA (2) 853 724 PRASA 373 373 MFA 360 334 COFINA (2) 272 271 U of PR 1 1 Total net exposure to Puerto Rico $ 4,966 $ 4,786 ____________________ (1) The December 31, 2017 amounts include $389 million (which comprises $36 million of General Obligation Bonds, $134 million of PREPA, $144 million of PRHTA (Highways revenue), and $75 million of MFA) related to 2017 commutations of previously ceded business. See Note 13, Reinsurance and Other Monoline Exposures, for more information. (2) As of the date of this filing, the Oversight Board has certified a filing under Title III of PROMESA for these exposures. |
Expected Loss to be Paid (Table
Expected Loss to be Paid (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Expected Losses [Abstract] | |
Net Expected Loss to be Paid After Net Expected Recoveries for Breaches of R&W Roll Forward | Net Expected Loss to be Paid Roll Forward Year Ended December 31, 2017 2016 (in millions) Net expected loss to be paid, beginning of period $ 1,198 $ 1,391 Net expected loss to be paid on the MBIA UK portfolio as of January 10, 2017 21 — Net expected loss to be paid on the CIFG portfolio as of July 1, 2016 — 22 Economic loss development (benefit) due to: Accretion of discount 33 26 Changes in discount rates 25 (15 ) Changes in timing and assumptions 255 128 Total economic loss development (benefit) 313 139 Net (paid) recovered losses (229 ) (354 ) Net expected loss to be paid, end of period $ 1,303 $ 1,198 Net Expected Loss to be Paid Roll Forward by Sector Year Ended December 31, 2017 Net Expected Net Expected Economic Loss Development / (Benefit) (Paid) Recovered Losses (1) Net Expected (in millions) Public finance: U.S. public finance $ 871 $ — $ 554 $ (268 ) $ 1,157 Non-U.S. public finance 33 13 (5 ) 5 46 Public finance 904 13 549 (263 ) 1,203 Structured finance: U.S. RMBS 206 — (181 ) 48 73 Other structured finance 88 8 (55 ) (14 ) 27 Structured finance 294 8 (236 ) 34 100 Total $ 1,198 $ 21 $ 313 $ (229 ) $ 1,303 Net Expected Loss to be Paid Roll Forward by Sector Year Ended December 31, 2016 Net Expected Net Expected Economic Loss Development / (Benefit) (Paid) Recovered Losses (1) Net Expected (in millions) Public finance: U.S. public finance $ 771 $ 40 $ 276 $ (216 ) $ 871 Non-U.S. public finance 38 2 (7 ) — 33 Public finance 809 42 269 (216 ) 904 Structured finance: U.S. RMBS 409 (22 ) (91 ) (90 ) 206 Other structured finance 173 2 (39 ) (48 ) 88 Structured finance 582 (20 ) (130 ) (138 ) 294 Total $ 1,391 $ 22 $ 139 $ (354 ) $ 1,198 ____________________ (1) Net of ceded paid losses, whether or not such amounts have been settled with reinsurers. Ceded paid losses are typically settled 45 days after the end of the reporting period. Such amounts are recorded in reinsurance recoverable on paid losses included in other assets. The Company paid $24 million and $16 million in LAE for the years ended December 31, 2017 and 2016 , respectively. (2) Includes expected LAE to be paid of $23 million as of December 31, 2017 and $12 million as of December 31, 2016 . |
Net Expected Loss to be Paid By Accounting Model | Net Expected Loss to be Paid (Recovered) and Net Economic Loss Development (Benefit) By Accounting Model Net Expected Loss to be Paid (Recovered) Net Economic Loss Development (Benefit) As of As of Year Ended Year Ended (in millions) Financial guaranty insurance $ 1,226 $ 1,083 $ 353 $ 164 FG VIEs (1) and other 91 105 (6 ) (8 ) Credit derivatives (2) (14 ) 10 (34 ) (17 ) Total $ 1,303 $ 1,198 $ 313 $ 139 ____________________ (1) See Note 9, Consolidated Variable Interest Entities. (2) See Note 8, Contracts Accounted for as Credit Derivatives. |
Schedule of Net Economic Loss Development | Net Expected Loss to be Paid (Recovered) and Net Economic Loss Development (Benefit) By Accounting Model Net Expected Loss to be Paid (Recovered) Net Economic Loss Development (Benefit) As of As of Year Ended Year Ended (in millions) Financial guaranty insurance $ 1,226 $ 1,083 $ 353 $ 164 FG VIEs (1) and other 91 105 (6 ) (8 ) Credit derivatives (2) (14 ) 10 (34 ) (17 ) Total $ 1,303 $ 1,198 $ 313 $ 139 ____________________ (1) See Note 9, Consolidated Variable Interest Entities. (2) See Note 8, Contracts Accounted for as Credit Derivatives. |
Liquidation Rates and Key Assumptions in Base Case Expected Loss Estimates First Lien RMBS | First Lien Liquidation Rates December 31, 2017 December 31, 2016 December 31, 2015 Delinquent/Modified in the Previous 12 Months Alt A and Prime 20% 25% 25% Option ARM 20 25 25 Subprime 20 25 25 30 – 59 Days Delinquent Alt A and Prime 30 35 35 Option ARM 35 35 40 Subprime 40 40 45 60 – 89 Days Delinquent Alt A and Prime 40 45 45 Option ARM 50 50 50 Subprime 50 50 55 90+ Days Delinquent Alt A and Prime 55 55 55 Option ARM 60 55 60 Subprime 55 55 60 Bankruptcy Alt A and Prime 45 45 45 Option ARM 50 50 50 Subprime 40 40 40 Foreclosure Alt A and Prime 65 65 65 Option ARM 70 65 70 Subprime 65 65 70 Real Estate Owned All 100 100 100 Key Assumptions in Base Case Expected Loss Estimates First Lien RMBS As of As of As of Range Weighted Average Range Weighted Average Range Weighted Average Alt-A First Lien Plateau CDR 1.3 % – 9.8% 5.2% 1.0 % – 13.5% 5.7% 1.7 % – 26.4% 6.4% Final CDR 0.1 % – 0.5% 0.3% 0.0 % – 0.7% 0.3% 0.1 % – 1.3% 0.3% Initial loss severity: 2005 and prior 60% 60% 60% 2006 80% 80% 70% 2007+ 70% 70% 65% Option ARM Plateau CDR 2.5 % – 7.0% 5.9% 3.2 % – 7.0% 5.6% 3.5 % – 10.3% 7.8% Final CDR 0.1 % – 0.3% 0.3% 0.2 % – 0.3% 0.3% 0.2 % – 0.5% 0.4% Initial loss severity: 2005 and prior 60% 60% 60% 2006 70% 70% 70% 2007+ 75% 75% 65% Subprime Plateau CDR 3.5 % – 13.1% 7.8% 2.8 % – 14.1% 8.1% 4.7 % – 13.2% 9.5% Final CDR 0.2 % – 0.7% 0.4% 0.1 % – 0.7% 0.4% 0.2 % – 0.7% 0.4% Initial loss severity: 2005 and prior 80% 80% 75% 2006 90% 90% 90% 2007+ 95% 90% 90% |
Key Assumptions in Base Case Expected Loss Estimates Second Lien RMBS | Key Assumptions in Base Case Expected Loss Estimates HELOCs As of As of As of Range Weighted Average Range Weighted Average Range Weighted Average Plateau CDR 2.7 % – 19.9% 11.4% 3.5 % – 24.8% 13.6% 4.9 % – 23.5% 10.3% Final CDR trended down to 2.5 % – 3.2% 2.5% 0.5 % – 3.2% 1.3% 0.5 % – 3.2% 1.2% Liquidation rates: Delinquent/Modified in the Previous 12 Months 20% 25% 25% 30 – 59 Days Delinquent 45 50 50 60 – 89 Days Delinquent 60 65 65 90+ Days Delinquent 75 80 75 Bankruptcy 55 55 55 Foreclosure 70 75 75 Real Estate Owned 100 100 100 Loss severity 98% 98% 98% |
Contracts Accounted for as In38
Contracts Accounted for as Insurance (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Insurance [Abstract] | |
Net Earned Premiums | Net Earned Premiums Year Ended December 31, 2017 2016 2015 (in millions) Scheduled net earned premiums $ 385 $ 381 $ 416 Accelerations Refundings 269 390 294 Terminations 17 79 37 Total Accelerations 286 469 331 Accretion of discount on net premiums receivable 17 14 17 Financial guaranty insurance net earned premiums 688 864 764 Other 2 0 2 Net earned premiums (1) $ 690 $ 864 $ 766 ___________________ (1) Excludes $15 million , $16 million and $21 million for the year ended December 31, 2017 , 2016 and 2015 , respectively, related to consolidated FG VIEs. |
Gross Premium Receivable, Net of Commissions on Assumed Business Roll Forward | Expected Collections of Financial Guaranty Insurance Gross Premiums Receivable, Net of Commissions on Assumed Business (Undiscounted) As of December 31, 2017 (in millions) 2018 (January 1 – March 31) $ 38 2018 (April 1 – June 30) 31 2018 (July 1 – September 30) 22 2018 (October 1 – December 31) 18 2019 82 2020 78 2021 77 2022 70 2023-2027 289 2028-2032 193 2033-2037 106 After 2037 105 Total(1) $ 1,109 ____________________ (1) Excludes expected cash collections on FG VIEs of $12 million . Gross Premium Receivable, Net of Commissions on Assumed Business Roll Forward Year Ended December 31, 2017 2016 2015 (in millions) December 31, $ 576 $ 693 $ 729 FG insurance Premiums receivable from acquisitions (see Note 2) 270 18 2 Gross written premiums on new business, net of commissions 301 193 198 Gross premiums received, net of commissions (301 ) (258 ) (206 ) Adjustments: Changes in the expected term (8 ) (38 ) (19 ) Accretion of discount, net of commissions on assumed business 12 9 18 Foreign exchange translation 64 (41 ) (25 ) Consolidation/deconsolidation of FG VIEs 0 0 (4 ) Subtotal (1) 914 576 693 Other 1 0 — December 31, $ 915 $ 576 $ 693 ____________________ (1) Excludes $10 million , $11 million and $17 million as of December 31, 2017 , 2016 and 2015 , respectively, related to consolidated FG VIEs. |
Schedule of Net Earned Premiums | Scheduled Financial Guaranty Insurance Net Earned Premiums As of December 31, 2017 (in millions) 2018 (January 1 – March 31) $ 89 2018 (April 1 – June 30) 88 2018 (July 1 – September 30) 84 2018 (October 1 – December 31) 82 Subtotal 2018 343 2019 295 2020 266 2021 244 2022 223 2023-2027 866 2028-2032 565 2033-2037 324 After 2037 281 Net deferred premium revenue(1) 3,407 Future accretion 188 Total future net earned premiums $ 3,595 ____________________ (1) Excludes scheduled net earned premiums on consolidated FG VIEs of $76 million , non-financial guaranty business net earned premium of $9 million and contra-paid related to FG VIEs of $17 million . |
Selected Information for Policies Paid in Installments | Selected Information for Financial Guaranty Insurance Policies Paid in Installments As of As of (dollars in millions) Premiums receivable, net of commission payable $ 914 $ 576 Gross deferred premium revenue 1,205 1,041 Weighted-average risk-free rate used to discount premiums 2.3 % 3.0 % Weighted-average period of premiums receivable (in years) 9.2 9.1 |
Rollforward of Deferred Acquisition Costs | Rollforward of Deferred Acquisition Costs Year Ended December 31, 2017 2016 2015 (in millions) December 31, $ 106 $ 114 $ 121 DAC adjustments from acquisitions (see Note 2) (2 ) 0 1 Costs deferred during the period: Commissions on assumed and ceded business 0 (2 ) (1 ) Premium taxes 5 4 2 Compensation and other acquisition costs 11 9 11 Total 16 11 12 Costs amortized during the period (19 ) (19 ) (20 ) December 31, $ 101 $ 106 $ 114 |
Loss and LAE Reserve and Salvage and Subrogation Recoverable Net of Reinsurance Insurance Contracts | Net Reserve (Salvage) As of As of (in millions) Public finance: U.S. public finance $ 901 $ 625 Non-U.S. public finance 21 21 Public finance 922 646 Structured finance: U.S. RMBS (59 ) 21 Other structured finance 40 96 Structured finance (19 ) 117 Subtotal 903 763 Other recoverable (payable) (4 ) 1 Subtotal 899 764 Elimination of losses attributable to FG VIEs (55 ) (64 ) Total $ 844 $ 700 |
Components of Net Reserves (Salvage) Insurance Contracts | Components of Net Reserves (Salvage) As of As of (in millions) Loss and LAE reserve $ 1,444 $ 1,127 Reinsurance recoverable on unpaid losses (44 ) (80 ) Loss and LAE reserve, net 1,400 1,047 Salvage and subrogation recoverable (572 ) (365 ) Salvage and subrogation payable(1) 20 17 Other payable (recoverable) (4 ) 1 Salvage and subrogation recoverable, net, and other recoverable (556 ) (347 ) Net reserves (salvage) $ 844 $ 700 ____________________ (1) Recorded as a component of reinsurance balances payable. |
Reconciliation of Net Expected Loss to be Paid and Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts | Reconciliation of Net Expected Loss to be Paid and Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts As of (in millions) Net expected loss to be paid - financial guaranty insurance (1) $ 1,226 Contra-paid, net 59 Salvage and subrogation recoverable, net of reinsurance 552 Loss and LAE reserve - financial guaranty insurance contracts, net of reinsurance (1,399 ) Other recoverable (payable) 4 Net expected loss to be expensed (present value) (2) $ 442 ____________________ (1) See "Net Expected Loss to be Paid (Recovered) by Accounting Model" table in Note 5, Expected Loss to be Paid. (2) Excludes $52 million as of December 31, 2017 related to consolidated FG VIEs. |
Net Expected Loss to be Expensed Insurance Contracts | Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts As of (in millions) 2018 (January 1 – March 31) $ 8 2018 (April 1 – June 30) 9 2018 (July 1 – September 30) 10 2018 (October 1 – December 31) 10 Subtotal 2018 37 2019 42 2020 39 2021 35 2022 32 2023-2027 131 2028-2032 78 2033-2037 36 After 2037 12 Net expected loss to be expensed 442 Future accretion 88 Total expected future loss and LAE $ 530 |
Loss and LAE Reported on the Consolidated Statements of Operations | Loss and LAE Reported on the Consolidated Statements of Operations Year Ended December 31, 2017 2016 2015 (in millions) Public finance: U.S. public finance $ 553 $ 307 $ 392 Non-U.S. public finance (4 ) (3 ) 1 Public finance 549 304 393 Structured finance: U.S. RMBS (106 ) 37 54 Other structured finance (48 ) (39 ) 5 Structured finance (154 ) (2 ) 59 Loss and LAE on insurance contracts before FG VIE consolidation 395 302 452 Gain (loss) related to FG VIE consolidation (7 ) (7 ) (28 ) Loss and LAE $ 388 $ 295 $ 424 |
BIG Net Par Outstanding and Number of Risks | BIG Net Par Outstanding and Number of Risks As of December 31, 2017 Net Par Outstanding Number of Risks(2) Description Financial Guaranty Insurance(1) Credit Derivative Total Financial Guaranty Insurance(1) Credit Derivative Total (dollars in millions) BIG: Category 1 $ 4,301 $ 227 $ 4,528 139 7 146 Category 2 1,344 17 1,361 46 3 49 Category 3 6,255 94 6,349 150 9 159 Total BIG $ 11,900 $ 338 $ 12,238 335 19 354 BIG Net Par Outstanding and Number of Risks As of December 31, 2016 Net Par Outstanding Number of Risks(2) Description Financial Guaranty Insurance(1) Credit Derivative Total Financial Guaranty Insurance(1) Credit Derivative Total (dollars in millions) BIG: Category 1 $ 3,861 $ 634 $ 4,495 165 10 175 Category 2 3,857 202 4,059 79 6 85 Category 3 4,383 137 4,520 148 9 157 Total BIG $ 12,101 $ 973 $ 13,074 392 25 417 _____________________ (1) Includes net par outstanding for VIEs. (2) A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments. Financial Guaranty Insurance BIG Transaction Loss Summary As of December 31, 2017 BIG Categories BIG 1 BIG 2 BIG 3 Total BIG, Net Effect of Consolidating FG VIEs Total Gross Ceded Gross Ceded Gross Ceded (dollars in millions) Number of risks(1) 139 (22 ) 46 (3 ) 150 (41 ) 335 — 335 Remaining weighted-average contract period (in years) 8.9 7.3 14.0 2.9 9.6 9.3 9.9 — 9.9 Outstanding exposure: Principal $ 4,397 $ (96 ) $ 1,352 $ (8 ) $ 6,445 $ (190 ) $ 11,900 $ — $ 11,900 Interest 2,110 (42 ) 1,002 (1 ) 3,098 (86 ) 6,081 — 6,081 Total(2) $ 6,507 $ (138 ) $ 2,354 $ (9 ) $ 9,543 $ (276 ) $ 17,981 $ — $ 17,981 Expected cash outflows (inflows) $ 186 $ (5 ) $ 492 $ (1 ) $ 3,785 $ (104 ) $ 4,353 $ (307 ) $ 4,046 Potential recoveries(3) (595 ) 20 (145 ) 0 (2,273 ) 67 $ (2,926 ) 194 (2,732 ) Subtotal (409 ) 15 347 (1 ) 1,512 (37 ) 1,427 (113 ) 1,314 Discount 66 (4 ) (93 ) 0 (78 ) (2 ) (111 ) 23 (88 ) Present value of expected cash flows $ (343 ) $ 11 $ 254 $ (1 ) $ 1,434 $ (39 ) $ 1,316 $ (90 ) $ 1,226 Deferred premium revenue $ 112 $ (5 ) $ 129 $ 0 $ 540 $ (6 ) $ 770 $ (74 ) $ 696 Reserves (salvage) $ (380 ) $ 11 $ 202 $ (1 ) $ 1,100 $ (34 ) $ 898 $ (55 ) $ 843 Financial Guaranty Insurance BIG Transaction Loss Summary As of December 31, 2016 BIG Categories BIG 1 BIG 2 BIG 3 Total BIG, Net Effect of Consolidating FG VIEs Total Gross Ceded Gross Ceded Gross Ceded (dollars in millions) Number of risks(1) 165 (35 ) 79 (11 ) 148 (49 ) 392 — 392 Remaining weighted-average contract period (in years) 8.6 7.0 13.2 10.5 8.1 6.0 10.1 — 10.1 Outstanding exposure: Principal $ 4,187 $ (326 ) $ 4,273 $ (416 ) $ 4,703 $ (320 ) $ 12,101 $ — $ 12,101 Interest 1,932 (140 ) 2,926 (219 ) 1,867 (87 ) 6,279 — 6,279 Total(2) $ 6,119 $ (466 ) $ 7,199 $ (635 ) $ 6,570 $ (407 ) $ 18,380 $ — $ 18,380 Expected cash outflows (inflows) 172 (19 ) 1,404 (86 ) 1,435 (65 ) 2,841 (326 ) 2,515 Potential recoveries(3) (440 ) 23 (146 ) 4 (743 ) 45 (1,257 ) 198 (1,059 ) Subtotal (268 ) 4 1,258 (82 ) 692 (20 ) 1,584 (128 ) 1,456 Discount 61 (4 ) (355 ) 19 (114 ) (4 ) (397 ) 24 (373 ) Present value of expected cash flows (207 ) 0 903 (63 ) 578 (24 ) 1,187 (104 ) 1,083 Deferred premium revenue $ 131 $ (5 ) $ 246 $ (6 ) $ 476 $ (30 ) $ 812 $ (86 ) $ 726 Reserves (salvage) $ (255 ) $ 5 $ 738 $ (58 ) $ 343 $ (10 ) $ 763 $ (64 ) $ 699 ____________________ (1) A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments. The ceded number of risks represents the number of risks for which the Company ceded a portion of its exposure. (2) Includes BIG amounts related to FG VIEs. (3) Includes excess spread and R&W receivables and payables. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Information by Credit Spread Type | Information by Credit Spread Type (1) As of As of Based on actual collateral specific spreads 14 % 7 % Based on market indices 48 % 77 % Provided by the CDS counterparty 38 % 16 % Total 100 % 100 % ____________________ (1) Based on par. |
Fair Value Hierarchy of Financial Instruments Carried at Fair Value | Fair Value Hierarchy of Financial Instruments Carried at Fair Value As of December 31, 2017 Fair Value Hierarchy Fair Value Level 1 Level 2 Level 3 (in millions) Assets: Investment portfolio, available-for-sale: Fixed-maturity securities Obligations of state and political subdivisions $ 5,760 $ — $ 5,684 $ 76 U.S. government and agencies 285 — 285 — Corporate securities 2,018 — 1,951 67 Mortgage-backed securities: RMBS 861 — 527 334 Commercial mortgage-backed securities (CMBS) 549 — 549 — Asset-backed securities 896 — 109 787 Foreign government securities 305 — 305 — Total fixed-maturity securities 10,674 — 9,410 1,264 Short-term investments 627 464 162 1 Other invested assets (1) 7 — 0 7 Credit derivative assets 2 — — 2 FG VIEs’ assets, at fair value 700 — — 700 Other assets 121 25 36 60 Total assets carried at fair value $ 12,131 $ 489 $ 9,608 $ 2,034 Liabilities: Credit derivative liabilities $ 271 $ — $ — $ 271 FG VIEs’ liabilities with recourse, at fair value 627 — — 627 FG VIEs’ liabilities without recourse, at fair value 130 — — 130 Total liabilities carried at fair value $ 1,028 $ — $ — $ 1,028 Fair Value Hierarchy of Financial Instruments Carried at Fair Value As of December 31, 2016 Fair Value Hierarchy Fair Value Level 1 Level 2 Level 3 (in millions) Assets: Investment portfolio, available-for-sale: Fixed-maturity securities Obligations of state and political subdivisions $ 5,432 $ — $ 5,393 $ 39 U.S. government and agencies 440 — 440 — Corporate securities 1,613 — 1,553 60 Mortgage-backed securities: RMBS 987 — 622 365 CMBS 583 — 583 — Asset-backed securities 945 — 140 805 Foreign government securities 233 — 233 — Total fixed-maturity securities 10,233 — 8,964 1,269 Short-term investments 590 319 271 — Other invested assets(1) 8 — 0 8 Credit derivative assets 13 — — 13 FG VIEs’ assets, at fair value 876 — — 876 Other assets 114 24 28 62 Total assets carried at fair value $ 11,834 $ 343 $ 9,263 $ 2,228 Liabilities: Credit derivative liabilities $ 402 $ — $ — $ 402 FG VIEs’ liabilities with recourse, at fair value 807 — — 807 FG VIEs’ liabilities without recourse, at fair value 151 — — 151 Total liabilities carried at fair value $ 1,360 $ — $ — $ 1,360 ____________________ (1) Excluded from the table above are investments of $45 million and $48 million as of December 31, 2017 and December 31, 2016 , respectively, measured using NAV per share. Includes Level 3 mortgage loans that are recorded at fair value on a non-recurring basis. |
Fair Value Assets Measured on Recurring Basis | Fair Value Level 3 Rollforward Recurring Basis Year Ended December 31, 2017 Fixed-Maturity Securities Obligations Corporate Securities RMBS Asset- FG VIEs’ Other Credit FG VIEs' Liabilities with Recourse, FG VIEs' Liabilities without Recourse, (in millions) Fair value as of December 31, 2016 $ 39 $ 60 $ 365 $ 805 $ 876 $ 65 $ (389 ) $ (807 ) $ (151 ) MBIA UK Acquisition — — — 7 — — — — — Total pretax realized and unrealized gains/(losses) recorded in: (1) Net income (loss) (13 ) (2 ) 6 (2 ) 27 (2 ) 113 (2 ) 37 (3 ) (2 ) (4 ) 107 (6 ) (16 ) (3 ) (6 ) (3 ) Other comprehensive income (loss) (2 ) 1 23 56 — 0 — — — Purchases — — 42 173 — 1 — — — Settlements (2 ) — (123 ) (367 ) (147 ) — 13 145 12 FG VIE consolidations — — — — 39 — — 0 (39 ) FG VIE deconsolidations — — — — (105 ) — — 51 54 Transfers into Level 3 54 — — — — — — — — Fair value as of December 31, 2017 $ 76 $ 67 $ 334 $ 787 $ 700 $ 64 $ (269 ) $ (627 ) $ (130 ) Change in unrealized gains/(losses) related to financial instruments held as of December 31, 2017 $ (2 ) $ 1 $ 23 $ 123 $ 59 (3 ) $ (2 ) (4 ) $ 96 (6 ) $ (11 ) (3 ) $ (6 ) (3 ) Fair Value Level 3 Rollforward Recurring Basis Year Ended December 31, 2016 Fixed-Maturity Securities Obligations Corporate Securities RMBS Asset- Short-Term Investments FG VIEs’ Other Credit FG VIEs' Liabilities with Recourse, FG VIEs' Liabilities without Recourse, (in millions) Fair value as of December 31, 2015 $ 8 $ 71 $ 348 $ 657 $ 60 $ 1,261 $ 65 $ (365 ) $ (1,225 ) $ (124 ) CIFG Acquisition 1 — 20 36 0 — — (67 ) — — Total pretax realized and unrealized gains/(losses) recorded in: (1) Net income (loss) 2 (2 ) (16 ) (2 ) 10 (2 ) 51 (2 ) 0 (2 ) 167 (3 ) 0 (4 ) 74 (6 ) (125 ) (3 ) (18 ) (3 ) Other comprehensive income (loss) (4 ) 5 (13 ) 116 0 — 0 — — — Purchases 33 — 70 76 — — — — — — Settlements (1 ) — (70 ) (139 ) (60 ) (629 ) — (31 ) 597 14 FG VIE consolidations — — — — — 97 — — (54 ) (43 ) FG VIE deconsolidations — — 0 — — (20 ) — — — 20 Transfers into Level 3 — — — 8 — — — — — — Fair value as of December 31, 2016 $ 39 $ 60 $ 365 $ 805 $ — $ 876 $ 65 $ (389 ) $ (807 ) $ (151 ) Change in unrealized gains/(losses) related to financial instruments held as of December 31, 2016 $ (4 ) $ 5 $ (15 ) $ 116 $ — $ 93 (3 ) $ 0 (4 ) $ (33 ) (6 ) $ (12 ) (3 ) $ (17 ) (3 ) ____________________ (1) Realized and unrealized gains (losses) from changes in values of Level 3 financial instruments represent gains (losses) from changes in values of those financial instruments only for the periods in which the instruments were classified as Level 3. (2) Included in net realized investment gains (losses) and net investment income. (3) Included in fair value gains (losses) on FG VIEs. (4) Recorded in fair value gains (losses) on CCS, net realized investment gains (losses), net investment income and other income. (5) Represents net position of credit derivatives. The consolidated balance sheet presents gross assets and liabilities based on net counterparty exposure. (6) Reported in net change in fair value of credit derivatives and other income. (7) Includes short-term investments, CCS and other invested assets. (8) Includes CCS and other invested assets. |
Fair Value, Liabilities Measured on Recurring Basis | The tables below present a roll forward of the Company’s Level 3 financial instruments carried at fair value on a recurring basis during the years ended December 31, 2017 and 2016 . Fair Value Level 3 Rollforward Recurring Basis Year Ended December 31, 2017 Fixed-Maturity Securities Obligations Corporate Securities RMBS Asset- FG VIEs’ Other Credit FG VIEs' Liabilities with Recourse, FG VIEs' Liabilities without Recourse, (in millions) Fair value as of December 31, 2016 $ 39 $ 60 $ 365 $ 805 $ 876 $ 65 $ (389 ) $ (807 ) $ (151 ) MBIA UK Acquisition — — — 7 — — — — — Total pretax realized and unrealized gains/(losses) recorded in: (1) Net income (loss) (13 ) (2 ) 6 (2 ) 27 (2 ) 113 (2 ) 37 (3 ) (2 ) (4 ) 107 (6 ) (16 ) (3 ) (6 ) (3 ) Other comprehensive income (loss) (2 ) 1 23 56 — 0 — — — Purchases — — 42 173 — 1 — — — Settlements (2 ) — (123 ) (367 ) (147 ) — 13 145 12 FG VIE consolidations — — — — 39 — — 0 (39 ) FG VIE deconsolidations — — — — (105 ) — — 51 54 Transfers into Level 3 54 — — — — — — — — Fair value as of December 31, 2017 $ 76 $ 67 $ 334 $ 787 $ 700 $ 64 $ (269 ) $ (627 ) $ (130 ) Change in unrealized gains/(losses) related to financial instruments held as of December 31, 2017 $ (2 ) $ 1 $ 23 $ 123 $ 59 (3 ) $ (2 ) (4 ) $ 96 (6 ) $ (11 ) (3 ) $ (6 ) (3 ) Fair Value Level 3 Rollforward Recurring Basis Year Ended December 31, 2016 Fixed-Maturity Securities Obligations Corporate Securities RMBS Asset- Short-Term Investments FG VIEs’ Other Credit FG VIEs' Liabilities with Recourse, FG VIEs' Liabilities without Recourse, (in millions) Fair value as of December 31, 2015 $ 8 $ 71 $ 348 $ 657 $ 60 $ 1,261 $ 65 $ (365 ) $ (1,225 ) $ (124 ) CIFG Acquisition 1 — 20 36 0 — — (67 ) — — Total pretax realized and unrealized gains/(losses) recorded in: (1) Net income (loss) 2 (2 ) (16 ) (2 ) 10 (2 ) 51 (2 ) 0 (2 ) 167 (3 ) 0 (4 ) 74 (6 ) (125 ) (3 ) (18 ) (3 ) Other comprehensive income (loss) (4 ) 5 (13 ) 116 0 — 0 — — — Purchases 33 — 70 76 — — — — — — Settlements (1 ) — (70 ) (139 ) (60 ) (629 ) — (31 ) 597 14 FG VIE consolidations — — — — — 97 — — (54 ) (43 ) FG VIE deconsolidations — — 0 — — (20 ) — — — 20 Transfers into Level 3 — — — 8 — — — — — — Fair value as of December 31, 2016 $ 39 $ 60 $ 365 $ 805 $ — $ 876 $ 65 $ (389 ) $ (807 ) $ (151 ) Change in unrealized gains/(losses) related to financial instruments held as of December 31, 2016 $ (4 ) $ 5 $ (15 ) $ 116 $ — $ 93 (3 ) $ 0 (4 ) $ (33 ) (6 ) $ (12 ) (3 ) $ (17 ) (3 ) ____________________ (1) Realized and unrealized gains (losses) from changes in values of Level 3 financial instruments represent gains (losses) from changes in values of those financial instruments only for the periods in which the instruments were classified as Level 3. (2) Included in net realized investment gains (losses) and net investment income. (3) Included in fair value gains (losses) on FG VIEs. (4) Recorded in fair value gains (losses) on CCS, net realized investment gains (losses), net investment income and other income. (5) Represents net position of credit derivatives. The consolidated balance sheet presents gross assets and liabilities based on net counterparty exposure. (6) Reported in net change in fair value of credit derivatives and other income. (7) Includes short-term investments, CCS and other invested assets. (8) Includes CCS and other invested assets. |
Schedule of Quantitative Information About Level 3 Assets, Fair Value Measurements | uantitative Information About Level 3 Fair Value Inputs At December 31, 2017 Financial Instrument Description(1) Fair Value at Significant Unobservable Inputs Range Weighted Average as a Percentage of Current Par Outstanding Assets (2): Fixed-maturity securities: Obligations of state and political subdivisions $ 76 Yield 4.5 % - 40.8% 12.5% Corporate securities 67 Yield 22.5% RMBS 334 CPR 1.3 % - 17.4% 6.4% CDR 1.5 % - 9.2% 5.9% Loss severity 40.0 % - 125.0% 82.5% Yield 4.0 % - 7.5% 5.6% Asset-backed securities: Triple-X life insurance transactions 613 Yield 6.2 % - 6.4% 6.3% CLO/TruPS 116 Yield 2.6 % - 4.6% 3.3% Others 58 Yield 10.7% FG VIEs’ assets, at fair value 700 CPR 3.0 % - 14.9% 9.5% CDR 1.3 % - 21.7% 5.4% Loss severity 60.0 % - 100.0% 79.6% Yield 3.7 % - 10.0% 6.2% Other assets 60 Implied Yield 5.2 % - 5.9% 5.5% Term (years) 10 years Liabilities: Credit derivative liabilities, net (269 ) Year 1 loss estimates 0.0 % - 42.0% 3.3% Hedge cost (in bps) 17.6 - 122.6 48.1 Bank profit (in bps) 6.0 - 852.5 107.5 Internal floor (in bps) 8.0 - 30.0 21.8 Internal credit rating AAA - CCC AA- FG VIEs’ liabilities, at fair value (757 ) CPR 3.0 % - 14.9% 9.5% CDR 1.3 % - 21.7% 5.4% Loss severity 60.0 % - 100.0% 79.6% Yield 3.4 % - 10.0% 4.9% ____________________ (1) Discounted cash flow is used as valuation technique for all financial instruments. (2) Excludes short-term investments with fair value of $1 million and several investments recorded in other invested assets with fair value of $7 million . Quantitative Information About Level 3 Fair Value Inputs At December 31, 2016 Financial Instrument Description(1) Fair Value at Significant Unobservable Inputs Range Weighted Average as a Percentage of Current Par Outstanding Assets (2): Fixed-maturity securities : Obligations of state and political subdivisions $ 39 Yield 4.3 % - 22.8% 11.1% Corporate securities 60 Yield 20.1% RMBS 365 CPR 1.6 % - 17.0% 4.6% CDR 1.5 % - 10.1% 6.7% Loss severity 30.0 % - 100.0% 77.8% Yield 3.3 % - 9.7% 6.0% Asset-backed securities: Triple-X life insurance transactions 425 Yield 5.7 % - 6.0% 5.8% Collateralized debt obligations (CDO) 332 Yield 10.0% CLO/TruPS 19 Yield 1.5 % - 4.8% 3.1% Others 29 Yield 7.2% FG VIEs’ assets, at fair value 876 CPR 3.5 % - 12.0% 7.8% CDR 2.5 % - 21.6% 5.7% Loss severity 35.0 % - 100.0% 78.6% Yield 2.9 % - 20.0% 6.5% Other assets 62 Implied Yield 4.5 % - 5.1% 4.8% Term (years) 10 years Liabilities: Credit derivative liabilities, net (389 ) Year 1 loss estimates 0.0 % - 38.0% 1.3% Hedge cost (in bps) 7.2 - 118.1 24.5 Bank profit (in bps) 3.8 - 825.0 61.8 Internal floor (in bps) 7.0 - 100.0 13.9 Internal credit rating AAA - CCC AA+ FG VIEs’ liabilities, at fair value (958 ) CPR 3.5 % - 12.0% 7.8% CDR 2.5 % - 21.6% 5.7% Loss severity 35.0 % - 100.0% 78.6% Yield 2.4 % - 20.0% 5.0% ____________________ (1) Discounted cash flow is used as valuation technique for all financial instruments. (2) Excludes several investments recorded in other invested assets with fair value of $8 million . |
Schedule of Quantitative Information About Level 3 Liabilities, Fair Value Measurements | Quantitative Information About Level 3 Fair Value Inputs At December 31, 2017 Financial Instrument Description(1) Fair Value at Significant Unobservable Inputs Range Weighted Average as a Percentage of Current Par Outstanding Assets (2): Fixed-maturity securities: Obligations of state and political subdivisions $ 76 Yield 4.5 % - 40.8% 12.5% Corporate securities 67 Yield 22.5% RMBS 334 CPR 1.3 % - 17.4% 6.4% CDR 1.5 % - 9.2% 5.9% Loss severity 40.0 % - 125.0% 82.5% Yield 4.0 % - 7.5% 5.6% Asset-backed securities: Triple-X life insurance transactions 613 Yield 6.2 % - 6.4% 6.3% CLO/TruPS 116 Yield 2.6 % - 4.6% 3.3% Others 58 Yield 10.7% FG VIEs’ assets, at fair value 700 CPR 3.0 % - 14.9% 9.5% CDR 1.3 % - 21.7% 5.4% Loss severity 60.0 % - 100.0% 79.6% Yield 3.7 % - 10.0% 6.2% Other assets 60 Implied Yield 5.2 % - 5.9% 5.5% Term (years) 10 years Liabilities: Credit derivative liabilities, net (269 ) Year 1 loss estimates 0.0 % - 42.0% 3.3% Hedge cost (in bps) 17.6 - 122.6 48.1 Bank profit (in bps) 6.0 - 852.5 107.5 Internal floor (in bps) 8.0 - 30.0 21.8 Internal credit rating AAA - CCC AA- FG VIEs’ liabilities, at fair value (757 ) CPR 3.0 % - 14.9% 9.5% CDR 1.3 % - 21.7% 5.4% Loss severity 60.0 % - 100.0% 79.6% Yield 3.4 % - 10.0% 4.9% ____________________ (1) Discounted cash flow is used as valuation technique for all financial instruments. (2) Excludes short-term investments with fair value of $1 million and several investments recorded in other invested assets with fair value of $7 million . Quantitative Information About Level 3 Fair Value Inputs At December 31, 2016 Financial Instrument Description(1) Fair Value at Significant Unobservable Inputs Range Weighted Average as a Percentage of Current Par Outstanding Assets (2): Fixed-maturity securities : Obligations of state and political subdivisions $ 39 Yield 4.3 % - 22.8% 11.1% Corporate securities 60 Yield 20.1% RMBS 365 CPR 1.6 % - 17.0% 4.6% CDR 1.5 % - 10.1% 6.7% Loss severity 30.0 % - 100.0% 77.8% Yield 3.3 % - 9.7% 6.0% Asset-backed securities: Triple-X life insurance transactions 425 Yield 5.7 % - 6.0% 5.8% Collateralized debt obligations (CDO) 332 Yield 10.0% CLO/TruPS 19 Yield 1.5 % - 4.8% 3.1% Others 29 Yield 7.2% FG VIEs’ assets, at fair value 876 CPR 3.5 % - 12.0% 7.8% CDR 2.5 % - 21.6% 5.7% Loss severity 35.0 % - 100.0% 78.6% Yield 2.9 % - 20.0% 6.5% Other assets 62 Implied Yield 4.5 % - 5.1% 4.8% Term (years) 10 years Liabilities: Credit derivative liabilities, net (389 ) Year 1 loss estimates 0.0 % - 38.0% 1.3% Hedge cost (in bps) 7.2 - 118.1 24.5 Bank profit (in bps) 3.8 - 825.0 61.8 Internal floor (in bps) 7.0 - 100.0 13.9 Internal credit rating AAA - CCC AA+ FG VIEs’ liabilities, at fair value (958 ) CPR 3.5 % - 12.0% 7.8% CDR 2.5 % - 21.6% 5.7% Loss severity 35.0 % - 100.0% 78.6% Yield 2.4 % - 20.0% 5.0% ____________________ (1) Discounted cash flow is used as valuation technique for all financial instruments. (2) Excludes several investments recorded in other invested assets with fair value of $8 million . |
Fair Value of Financial Instruments | The carrying amount and estimated fair value of the Company’s financial instruments are presented in the following table. Fair Value of Financial Instruments As of As of Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value (in millions) Assets: Fixed-maturity securities $ 10,674 $ 10,674 $ 10,233 $ 10,233 Short-term investments 627 627 590 590 Other invested assets 60 61 146 147 Credit derivative assets 2 2 13 13 FG VIEs’ assets, at fair value 700 700 876 876 Other assets 218 218 205 205 Liabilities: Financial guaranty insurance contracts (1) 3,330 7,104 3,483 8,738 Long-term debt 1,292 1,627 1,306 1,546 Credit derivative liabilities 271 271 402 402 FG VIEs’ liabilities with recourse, at fair value 627 627 807 807 FG VIEs’ liabilities without recourse, at fair value 130 130 151 151 Other liabilities 55 55 12 12 ____________________ (1) Carrying amount includes the assets and liabilities related to financial guaranty insurance contract premiums, losses, and salvage and subrogation and other recoverables net of reinsurance. |
Contracts Accounted for as Cr40
Contracts Accounted for as Credit Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Credit Derivatives Subordination and Ratings and Net Par Outstanding by Internal Rating | Credit Derivatives As of December 31, 2017 As of December 31, 2016 Asset Type Net Par Outstanding Weighted Average Credit Rating Net Par Outstanding Weighted Average Credit Rating (dollars in millions) Pooled corporate obligations: CLO /collateralized bond obligations $ — -- $ 2,022 AAA Synthetic investment grade pooled corporate — -- 7,224 AAA TruPS CDOs 878 A 1,179 BBB+ Total pooled corporate obligations 878 A 10,425 AAA U.S. RMBS 916 AA 1,142 AA- Pooled infrastructure 1,561 AAA 1,513 AAA Infrastructure finance 572 A 1,021 BBB+ Other(1) 2,280 A- 2,896 A Total $ 6,207 AA- $ 16,997 AA+ ____________________ (1) This comprises numerous transactions across various asset classes, such as commercial receivables, international RMBS, regulated utilities and consumer receivables. Distribution of Credit Derivative Net Par Outstanding by Internal Rating As of December 31, 2017 As of December 31, 2016 Ratings Net Par Outstanding % of Total Net Par Outstanding % of Total (dollars in millions) AAA $ 2,144 34.6 % $ 10,967 64.6 % AA 1,170 18.8 2,167 12.7 A 1,517 24.5 1,499 8.8 BBB 1,038 16.7 1,391 8.2 BIG 338 5.4 973 5.7 Credit derivative net par outstanding $ 6,207 100.0 % $ 16,997 100.0 % |
Net Change in Fair Value of Credit Derivatives | Net Change in Fair Value of Credit Derivative Gain (Loss) Year Ended December 31, 2017 2016 2015 (in millions) Realized gains on credit derivatives $ 17 $ 56 $ 63 Net credit derivative losses (paid and payable) recovered and recoverable and other settlements (27 ) (27 ) (81 ) Realized gains (losses) and other settlements (10 ) 29 (18 ) Net unrealized gains (losses): Pooled corporate obligations 35 (16 ) 147 U.S. RMBS 23 22 396 Pooled infrastructure 5 17 17 Infrastructure finance 4 4 0 Other 54 42 186 Net unrealized gains (losses) 121 69 746 Net change in fair value of credit derivatives $ 111 $ 98 $ 728 |
Net Par and Accelerations of Credit Derivative Revenues from Termination of CDS Contracts | Terminations and Settlements of Direct Credit Derivative Contracts Year Ended December 31, 2017 2016 2015 (in millions) Net par of terminated credit derivative contracts $ 331 $ 3,811 $ 2,777 Realized gains on credit derivatives 0 20 13 Net credit derivative losses (paid and payable) recovered and recoverable and other settlements (15 ) — (116 ) Net unrealized gains (losses) on credit derivatives 26 103 465 |
CDS Spread on AGC and AGM | CDS Spread on AGC and AGM Quoted price of CDS contract (in basis points) As of As of As of Five-year CDS spread: AGC 163 158 376 AGM 145 158 366 One-year CDS spread AGC 70 35 139 AGM 28 29 131 |
Fair Value of Credit Derivatives and Effect of AGC and AGM Credit Spreads | Fair Value of Credit Derivatives Assets (Liabilities) and Effect of AGC and AGM Credit Spreads As of As of (in millions) Fair value of credit derivatives before effect of AGC and AGM credit spreads $ (555 ) $ (811 ) Plus: Effect of AGC and AGM credit spreads 286 422 Net fair value of credit derivatives $ (269 ) $ (389 ) |
Net Fair Value and Expected Losses of Credit Derivatives by Sector | Net Fair Value and Expected Losses of Credit Derivatives As of As of (in millions) Fair value of credit derivative asset (liability), net $ (269 ) $ (389 ) Expected loss to be (paid) recovered 14 (10 ) |
Schedule of Collateral Posting Requirements for Credit Derivative Contracts | AGC Insured CDS Collateral Posting Requirements As of As of (in millions) Gross par of CDS with collateral posting requirement $ 497 $ 690 Maximum posting requirement 464 674 Collateral posted 18 116 |
Effects of Changes in Credit Spread | Effect of Changes in Credit Spread As of December 31, 2017 Credit Spreads(1) Estimated Net Fair Value (Pre-Tax) Estimated Change in Gain/(Loss) (Pre-Tax) (in millions) 100% widening in spreads $ (501 ) $ (232 ) 50% widening in spreads (385 ) (116 ) 25% widening in spreads (327 ) (58 ) 10% widening in spreads (292 ) (23 ) Base Scenario (269 ) — 10% narrowing in spreads (250 ) 19 25% narrowing in spreads (222 ) 47 50% narrowing in spreads (174 ) 95 ____________________ (1) Includes the effects of spreads on both the underlying asset classes and the Company’s own credit spread. |
Consolidated Variable Interes41
Consolidated Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Consolidated FG VIE's | Number of FG VIEs Consolidated Year Ended December 31, 2017 2016 2015 Beginning of the period, December 31 32 34 32 Radian Asset Acquisition — — 4 Consolidated (1) 2 1 1 Deconsolidated (1) (2 ) (2 ) (1 ) Matured — (1 ) (2 ) End of the period, December 31 32 32 34 ____________________ (1) Net loss on consolidation and deconsolidation was de minimis in 2017 and 2016 . Net loss on consolidation was $26 million in 2015 and was recorded in "fair value gains (losses) on FG VIEs" in the consolidated statement of operations. Consolidated FG VIEs By Type of Collateral As of December 31, 2017 As of December 31, 2016 Assets Liabilities Assets Liabilities (in millions) With recourse: U.S. RMBS first lien $ 362 $ 385 $ 473 $ 509 U.S. RMBS second lien 144 177 178 223 Manufactured housing 64 65 74 75 Total with recourse 570 627 725 807 Without recourse 130 130 151 151 Total $ 700 $ 757 $ 876 $ 958 Effect of Consolidating FG VIEs on Net Income (Loss), Cash Flows From Operating Activities and Shareholders’ Equity Year Ended December 31, 2017 2016 2015 (in millions) Net earned premiums $ (15 ) $ (16 ) $ (21 ) Net investment income (5 ) (10 ) (32 ) Net realized investment gains (losses) 0 1 10 Fair value gains (losses) on FG VIEs 30 38 38 Bargain purchase gain — — 2 Loss and LAE 7 7 28 Effect on income before tax 17 20 25 Less: tax provision (benefit) 6 7 8 Effect on net income (loss) $ 11 $ 13 $ 17 Effect on cash flows from operating activities $ 19 $ 24 $ 43 As of As of (in millions) Effect on shareholders’ equity (decrease) increase $ 2 $ (9 ) |
Investments and Cash (Tables)
Investments and Cash (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Net Investment Income | Net Investment Income Year Ended December 31, 2017 2016 2015 (in millions) Income from fixed-maturity securities managed by third parties $ 298 $ 306 $ 335 Income from internally managed securities: Fixed maturities 120 103 61 Other 9 8 37 Gross investment income 427 417 433 Investment expenses (9 ) (9 ) (10 ) Net investment income $ 418 $ 408 $ 423 |
Net Realized Investment Gains (Losses) | Net Realized Investment Gains (Losses) Year Ended December 31, 2017 2016 2015 (in millions) Gross realized gains on available-for-sale securities (1) $ 95 $ 28 $ 44 Gross realized losses on available-for-sale securities (12 ) (8 ) (15 ) Net realized gains (losses) on other invested assets 0 2 (8 ) Other-than-temporary impairment (43 ) (51 ) (47 ) Net realized investment gains (losses) $ 40 $ (29 ) $ (26 ) ____________________ (1) Year ended December 31, 2017 includes a gain on Zohar II Notes used as consideration for the MBIA UK Acquisition. See Note 2, Acquisitions. |
Roll Forward of Credit Losses in the Investment Portfolio | Roll Forward of Credit Losses in the Investment Portfolio Year Ended December 31, 2017 2016 2015 (in millions) Balance, beginning of period $ 134 $ 108 $ 124 Additions for credit losses on securities for which an other-than-temporary-impairment was not previously recognized 13 3 3 Reductions for securities sold and other settlements (4 ) (4 ) (28 ) Additions for credit losses on securities for which an other-than-temporary-impairment was previously recognized 19 27 9 Balance, end of period $ 162 $ 134 $ 108 |
Fixed Maturity Securities and Short Term Investments by Security Type | Fixed-Maturity Securities and Short-Term Investments by Security Type As of December 31, 2017 Investment Category Percent of Total(1) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment Weighted Average Credit Rating (3) (dollars in millions) Fixed-maturity securities: Obligations of state and political subdivisions 51 % $ 5,504 $ 267 $ (11 ) $ 5,760 $ 23 AA U.S. government and agencies 2 272 14 (1 ) 285 — AA+ Corporate securities 18 1,973 63 (18 ) 2,018 (6 ) A Mortgage-backed securities(4): — RMBS 8 852 26 (17 ) 861 (1 ) BBB+ CMBS 5 540 12 (3 ) 549 — AAA Asset-backed securities 7 730 166 0 896 136 B Foreign government securities 3 316 6 (17 ) 305 0 AA Total fixed-maturity securities 94 10,187 554 (67 ) 10,674 152 A+ Short-term investments 6 627 0 0 627 — AAA Total investment portfolio 100 % $ 10,814 $ 554 $ (67 ) $ 11,301 152 A+ Fixed-Maturity Securities and Short-Term Investments by Security Type As of December 31, 2016 Investment Category Percent of Total(1) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value AOCI(2) Weighted Average Credit Rating (3) (dollars in millions) Fixed-maturity securities: Obligations of state and political subdivisions 50 % $ 5,269 $ 202 $ (39 ) $ 5,432 $ 13 AA U.S. government and agencies 4 424 17 (1 ) 440 — AA+ Corporate securities 15 1,612 32 (31 ) 1,613 (8 ) A- Mortgage-backed securities(4): RMBS 9 998 27 (38 ) 987 (21 ) A- CMBS 5 575 13 (5 ) 583 — AAA Asset-backed securities 8 835 110 0 945 33 B Foreign government securities 3 261 4 (32 ) 233 — AA Total fixed-maturity securities 94 9,974 405 (146 ) 10,233 17 A+ Short-term investments 6 590 0 0 590 — AAA Total investment portfolio 100 % $ 10,564 $ 405 $ (146 ) $ 10,823 $ 17 A+ ____________________ (1) Based on amortized cost. (2) Also refer to Note 20, Other Comprehensive Income. (3) Ratings in the tables above represent the lower of the Moody’s and S&P Global Ratings, a division of Standard & Poor's Financial Services LLC (S&P) classifications except for bonds purchased for loss mitigation or risk management strategies, which use internal ratings classifications. The Company’s portfolio consists primarily of high-quality, liquid instruments. (4) Government-agency obligations were approximately 39% of mortgage backed securities as of December 31, 2017 and 42% as of December 31, 2016 based on fair value. |
Fair Value of Available-for-Sale Municipal Bond Portfolio by State | Fair Value of Available-for-Sale Portfolio of Obligations of State and Political Subdivisions As of December 31, 2017 (1) State State General Obligation Local General Obligation Revenue Bonds Fair Value Amortized Cost Average Credit Rating (in millions) Fixed-maturity securities: New York $ 13 $ 44 $ 568 $ 625 $ 598 AA California 76 83 421 580 527 A Texas 17 212 321 550 528 AA Washington 93 87 214 394 381 AA Florida 5 17 244 266 254 AA- Massachusetts 70 — 151 221 208 AA Illinois 18 51 131 200 189 A Ohio 16 22 102 140 136 AA Pennsylvania 33 21 76 130 125 A+ District of Columbia 43 — 85 128 123 AA All others 138 263 1,233 1,634 1,577 AA- Total $ 522 $ 800 $ 3,546 $ 4,868 $ 4,646 AA- Fair Value of Available-for-Sale Portfolio of Obligations of State and Political Subdivisions As of December 31, 2016 (1) State State General Obligation Local General Obligation Revenue Bonds Fair Value Amortized Cost Average Credit Rating (in millions) Fixed-maturity securities: New York $ 13 $ 38 $ 570 $ 621 $ 604 AA California 73 62 391 526 497 A+ Texas 16 186 316 518 503 AA Washington 81 68 201 350 348 AA Florida 16 11 247 274 266 AA- Massachusetts 74 — 149 223 215 AA Illinois 18 65 127 210 205 A+ Arizona — 3 122 125 122 AA Georgia — 9 104 113 109 A+ Pennsylvania 38 17 58 113 111 A+ All others 153 155 1,085 1,393 1,364 AA- Total $ 482 $ 614 $ 3,370 $ 4,466 $ 4,344 AA- ____________________ (1) Excludes $892 million and $966 million as of December 31, 2017 and 2016 , respectively, of pre-refunded bonds, at fair value. The credit ratings are based on the underlying ratings and do not include any benefit from bond insurance. |
Revenue Sources | Revenue Bonds Sources of Funds As of December 31, 2017 As of December 31, 2016 Type Fair Value Amortized Cost Fair Value Amortized Cost (in millions) Fixed-maturity securities: Transportation $ 955 $ 889 $ 860 $ 824 Water and sewer 670 641 545 531 Tax backed 600 570 617 601 Higher education 515 492 513 499 Municipal utilities 324 315 365 360 Healthcare 308 293 310 298 All others 174 169 160 158 Total $ 3,546 $ 3,369 $ 3,370 $ 3,271 |
Fixed Maturity Securities Gross Unrealized Loss by Length of Time | Fixed-Maturity Securities Gross Unrealized Loss by Length of Time As of December 31, 2017 Less than 12 months 12 months or more Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (dollars in millions) Obligations of state and political subdivisions $ 166 $ (4 ) $ 281 $ (7 ) $ 447 $ (11 ) U.S. government and agencies 151 0 18 (1 ) 169 (1 ) Corporate securities 201 (1 ) 240 (17 ) 441 (18 ) Mortgage-backed securities: RMBS 191 (5 ) 213 (12 ) 404 (17 ) CMBS 29 0 80 (3 ) 109 (3 ) Asset-backed securities 48 0 3 0 51 0 Foreign government securities 20 0 140 (17 ) 160 (17 ) Total $ 806 $ (10 ) $ 975 $ (57 ) $ 1,781 $ (67 ) Number of securities(1) 244 264 499 Number of securities with other-than-temporary impairment(1) 17 15 31 Fixed-Maturity Securities Gross Unrealized Loss by Length of Time As of December 31, 2016 Less than 12 months 12 months or more Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (dollars in millions) Obligations of state and political subdivisions $ 1,110 $ (38 ) $ 6 $ (1 ) $ 1,116 $ (39 ) U.S. government and agencies 87 (1 ) — — 87 (1 ) Corporate securities 492 (11 ) 118 (20 ) 610 (31 ) Mortgage-backed securities: RMBS 391 (23 ) 94 (15 ) 485 (38 ) CMBS 165 (5 ) — — 165 (5 ) Asset-backed securities 36 0 0 0 36 0 Foreign government securities 44 (5 ) 114 (27 ) 158 (32 ) Total $ 2,325 $ (83 ) $ 332 $ (63 ) $ 2,657 $ (146 ) Number of securities(1) 622 60 676 Number of securities with other-than-temporary impairment 8 9 17 ___________________ (1) The number of securities does not add across because lots consisting of the same securities have been purchased at different times and appear in both categories above (i.e., less than 12 months and 12 months or more). If a security appears in both categories, it is counted only once in the total column. |
Distribution of Fixed Maturity Securities by Contractual Maturity | Distribution of Fixed-Maturity Securities by Contractual Maturity As of December 31, 2017 Amortized Cost Estimated Fair Value (in millions) Due within one year $ 254 $ 256 Due after one year through five years 1,574 1,604 Due after five years through 10 years 2,368 2,443 Due after 10 years 4,599 4,961 Mortgage-backed securities: RMBS 852 861 CMBS 540 549 Total $ 10,187 $ 10,674 |
Internally Managed Investment Portfolio | Internally Managed Portfolio Carrying Value As of December 31, 2017 2016 (in millions) Assets purchased for loss mitigation and other risk management purposes: Fixed-maturity securities, at fair value $ 1,231 $ 1,492 Other invested assets 20 107 Alternative investments 69 48 Other 5 7 Total $ 1,325 $ 1,654 |
Restrictions on Cash and Cash Equivalents | Cash and Restricted Cash As of December 31, 2017 2016 2015 2014 (in millions) Cash $ 144 $ 118 $ 166 $ 75 Restricted cash (1) 0 9 0 19 Total cash and restricted cash $ 144 $ 127 $ 166 $ 94 ____________________ (1) Amounts relate to cash held in trust accounts and are reported in other assets in consolidated balance sheets. See Note 13, Reinsurance and Other Monoline Exposures, for more information. |
Insurance Company Regulatory 43
Insurance Company Regulatory Requirements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Insurance Company Regulatory Requirements [Abstract] | |
Schedule of Statutory Capital and Surplus and Net Income | Insurance Regulatory Amounts Reported Policyholders' Surplus Net Income (Loss) As of December 31, Year Ended December 31, 2017 2016 2017 2016 2015 (in millions) U.S. statutory companies: AGM(1) $ 2,254 $ 2,321 $ 152 $ 191 $ 217 AGC(1)(2) 2,073 1,896 219 108 (92 ) MAC 270 487 32 142 102 Bermuda statutory company: AG Re 1,294 1,255 156 139 51 ____________________ (1) Policyholders' surplus of AGM and AGC include their indirect share of MAC. AGM and AGC own approximately 61% and 39% , respectively, of the outstanding stock of Municipal Assurance Holdings Inc. (MAC Holdings), which owns 100% of the outstanding common stock of MAC. (2) As indicated in Note 2, Acquisitions, AGC completed the acquisition of MBIA UK (now AGLN) on January 10, 2017, CIFGH (the parent company of CIFGNA) on July 1, 2016 and Radian Asset on April 1, 2015. As mentioned in Note 1, Business and Basis of Presentation, AGC sold AGLN to AGM on June 26, 2017. Both CIFGNA and Radian Asset were merged with and into AGC, with AGC as the surviving company of the merger. The impact to AGC's policyholders' surplus was a decrease of approximately $36 million from the MBIA UK acquisition, on a statutory basis, as of January 10, 2017, and an increase of $287 million from the CIFGH acquisition, on a statutory basis, as of July 1, 2016. |
Schedule of Dividends Paid by Insurance Company Subsidiaries | Dividends and Return of Capital By Insurance Company Subsidiaries Year Ended December 31, 2017 2016 2015 (in millions) Dividends paid by AGC to AGUS $ 107 $ 79 $ 90 Dividends paid by AGM to AGMH 196 247 215 Dividends paid by AG Re to AGL 125 100 150 Dividends paid by MAC to MAC Holdings (1) 36 — — Redemption of common stock by AGM to AGMH 101 300 — Redemption of common stock by MAC to MAC Holdings (1) 250 — — Repayment of surplus note by MAC to AGM — 100 — Repayment of surplus note by MAC to MAC Holdings (1) — 300 — Repayment of surplus note by AGM to AGMH — — 25 ____________________ (1) MAC Holdings distributed nearly the entire amounts to AGM and AGC, in proportion to their ownership percentages. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Impact of Tax Cuts and Jobs Act of 2017 | The table below summarizes the impact of the Tax Act on the consolidated statements of operations. Summary of the Tax Act Effect Year Ended December 31, 2017 (in millions) Transition tax $ 93 Foreign tax credit realized (31 ) Write down of unremitted earnings (38 ) Net impact of repatriation 24 Write down of deferred tax asset due to tax rate change 37 Net impact of Tax Act $ 61 |
Effective Tax Rate Reconciliation | A reconciliation of the difference between the provision for income taxes and the expected tax provision at statutory rates in taxable jurisdictions is presented below. Effective Tax Rate Reconciliation Year Ended December 31, 2017 2016 2015 (in millions) Expected tax provision (benefit) at statutory rates in taxable jurisdictions $ 300 $ 316 $ 443 Tax-exempt interest (49 ) (49 ) (54 ) Goodwill impairment and gain on bargain purchase price (20 ) (125 ) (19 ) Change in liability for uncertain tax positions (26 ) 11 12 Effect of provision to tax return filing adjustments (8 ) (15 ) (11 ) State taxes 9 3 1 Effect of Tax Act 61 — — Other (6 ) (5 ) 3 Total provision (benefit) for income taxes $ 261 $ 136 $ 375 Effective tax rate 26.3 % 13.4 % 26.2 % |
Pretax Income (Loss) by Tax Jurisdiction | The following table presents pretax income and revenue by jurisdiction. Pretax Income (Loss) by Tax Jurisdiction Year Ended December 31, 2017 2016 2015 (in millions) United States $ 873 $ 921 $ 1,284 Bermuda 145 126 177 U.K. (27 ) (30 ) (30 ) Total $ 991 $ 1,017 $ 1,431 |
Revenue by Tax Jurisdiction | Revenue by Tax Jurisdiction Year Ended December 31, 2017 2016 2015 (in millions) United States $ 1,543 $ 1,442 $ 1,853 Bermuda 216 239 361 U.K. (20 ) (4 ) (7 ) Total $ 1,739 $ 1,677 $ 2,207 |
Components of Deferred Tax Assets and Liabilities | Components of Net Deferred Tax Assets As of December 31, 2017 2016 (in millions) Deferred tax assets: Unrealized losses on credit derivative financial instruments, net $ 20 $ 66 Unearned premium reserves, net 124 229 Loss and LAE reserve — 216 Tax and loss bonds — 50 Alternative minimum tax credit 59 17 Foreign tax credit 43 20 DAC — 29 Investment basis difference 63 76 Deferred compensation 21 40 Net operating loss 38 64 FG VIE 13 14 Other 14 29 Total deferred income tax assets 395 850 Deferred tax liabilities: Contingency reserves — 82 Public debt 53 91 Unrealized appreciation on investments 91 84 Unrealized gains on CCS 13 22 Market discount 28 22 Loss and LAE reserve 27 — DAC 12 — Deferred balances related to non-US affiliates 16 3 Other 14 30 Total deferred income tax liabilities 254 334 Less: Valuation allowance 43 19 Net deferred income tax asset $ 98 $ 497 |
Reconciliation of Uncertain Tax Positions | The following table provides a reconciliation of the beginning and ending balances of the total liability for unrecognized tax positions. 2017 2016 2015 (in millions) Balance as of January 1, $ 50 $ 40 $ 28 Effect of provision to tax return filing adjustments 8 6 10 Increase in unrecognized tax positions as a result of position taken during the current period 1 4 2 Decrease in unrecognized tax positions as a result of settlement of positions taken during the prior period (31 ) — — Balance as of December 31, $ 28 $ 50 $ 40 |
Reinsurance and Other Monolin45
Reinsurance and Other Monoline Exposures (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Insurance [Abstract] | |
Effects of Reinsurance on Statement of Operations | The following table presents the components of premiums and losses reported in the consolidated statements of operations and the contribution of the Company's Assumed and Ceded Businesses (both financial guaranty and non-financial guaranty). Effect of Reinsurance on Statement of Operations Year Ended December 31, 2017 2016 2015 (in millions) Premiums Written: Direct $ 297 $ 165 $ 164 Assumed(1) 10 (11 ) 17 Ceded(2) 18 (17 ) 10 Net $ 325 $ 137 $ 191 Premiums Earned: Direct $ 693 $ 887 $ 792 Assumed 27 27 40 Ceded (30 ) (50 ) (66 ) Net $ 690 $ 864 $ 766 Loss and LAE: Direct $ 404 $ 327 $ 399 Assumed 11 0 45 Ceded (27 ) (32 ) (20 ) Net $ 388 $ 295 $ 424 ____________________ (1) Negative assumed premiums written were due to changes in expected debt service schedules. (2) Positive ceded premiums written were due to commutations and changes in expected debt service schedules. |
Exposure by Reinsurer | Exposure to Reinsurers (1) As of December 31, 2017 2016 (in millions) Due (To) From: Assumed premium, net of commissions $ 53 $ 65 Ceded premium, net of commissions (42 ) (46 ) Assumed expected loss to be paid (71 ) (70 ) Ceded expected loss to be paid 29 87 Par Outstanding: Ceded par outstanding (2) 4,434 11,156 Assumed par outstanding 8,383 13,264 Second-to-pay insured par outstanding (3) 6,605 11,539 ____________________ (1) The total collateral posted by all non-affiliated reinsurers required to post, or that had agreed to post, collateral as of December 31, 2017 and December 31, 2016 was approximately $118 million and $387 million , respectively. (2) Of the total ceded par to unrated or BIG rated reinsurers, $296 million and $384 million is rated BIG as of December 31, 2017 and December 31, 2016 , respectively. (3) The par on second-to-pay exposure where the primary insurer and underlying transaction rating are both BIG and/or not rated is $204 million and $788 million as of December 31, 2017 and December 31, 2016 , respectively. Second-to-pay insured par outstanding represents transactions the Company has insured that were previously insured by such other monoline financial guaranty insurers. The Company underwrites such transactions based on the underlying insured obligation without regard to the primary insurer. |
Net Effect of Commutations and Cancellations of Assumed Reinsurance Contracts | Commutations of Ceded Reinsurance Contracts Year Ended December 31, 2017 2016 2015 (in millions) Increase (decrease) in net unearned premium reserve $ 82 $ — $ 23 Increase (decrease) in net par outstanding 5,107 28 855 Commutation gains (losses) 328 8 28 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Rental Payments | Future Minimum Rental Payments Year (in millions) 2018 $ 8 2019 9 2020 9 2021 8 2022 9 Thereafter 80 Total $ 123 |
Long-Term Debt and Credit Fac47
Long-Term Debt and Credit Facilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Principal and Carrying Amounts of Debt | Principal and Carrying Amounts of Debt As of December 31, 2017 As of December 31, 2016 Principal Carrying Value Principal Carrying Value (in millions) AGUS: 7% Senior Notes (1) $ 200 $ 197 $ 200 $ 197 5% Senior Notes (1) 500 496 500 496 Series A Enhanced Junior Subordinated Debentures (2) 150 150 150 150 Total AGUS 850 843 850 843 AGMH(3): 6 7 / 8 % QUIBS (1) 100 70 100 69 6.25% Notes (1) 230 142 230 141 5.6% Notes (1) 100 57 100 56 Junior Subordinated Debentures (2) 300 192 300 187 Total AGMH 730 461 730 453 AGM(3): AGM Notes Payable 6 6 9 10 Total AGM 6 6 9 10 Purchased debt (4) (28 ) (18 ) — — Total $ 1,558 $ 1,292 $ 1,589 $ 1,306 ____________________ (1) AGL fully and unconditionally guarantees these obligations. (2) Guaranteed by AGL on a junior subordinated basis. (3) Carrying amounts are different than principal amounts due primarily to fair value adjustments at the AGMH acquisition date, which are accreted or amortized into interest expense over the remaining terms of these obligations. (4) In 2017, AGUS purchased $28 million principal amount of AGMH's outstanding Junior Subordinated Debentures. The Company recognized a $9 million loss on extinguishment of debt, which is included in other income. |
Expected Maturity Schedule of Debt | Expected Maturity Schedule of Debt As of December 31, 2017 AGUS AGMH AGM Total (1) (in millions) 2018-2022 $ — $ — $ 5 $ 5 2023-2042 700 — 1 701 2043-2062 — — — — 2063-2082 150 300 — 450 Thereafter — 430 — 430 Total $ 850 $ 730 $ 6 $ 1,586 |
Schedule of Interest Expense | Interest Expense Year Ended December 31, 2017 2016 2015 (in millions) AGUS: 7% Senior Notes $ 13 $ 13 $ 13 5% Senior Notes 26 26 26 Series A Enhanced Junior Subordinated Debentures 5 9 10 Total AGUS 44 48 49 AGMH: 6 7 / 8 % QUIBS 7 7 7 6.25% Notes 16 16 16 5.6% Notes 6 6 6 Junior Subordinated Debentures 25 25 25 Total AGMH 54 54 54 AGM: Notes Payable 0 0 (2 ) Total AGM 0 0 (2 ) Purchased debt (1 ) — — Total $ 97 $ 102 $ 101 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | Computation of Earnings Per Share Year Ended December 31, 2017 2016 2015 (in millions, except per share amounts) Basic EPS: Net income (loss) attributable to AGL $ 730 $ 881 1,056 Less: Distributed and undistributed income (loss) available to nonvested shareholders 1 1 1 Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 729 $ 880 1,055 Basic shares 120.6 133.0 148.1 Basic EPS $ 6.05 $ 6.61 $ 7.12 Diluted EPS: Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 729 $ 880 $ 1,055 Plus: Re-allocation of undistributed income (loss) available to nonvested shareholders of AGL and subsidiaries 0 0 0 Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, diluted $ 729 $ 880 $ 1,055 Basic shares 120.6 133.0 148.1 Dilutive securities: Options and restricted stock awards 1.7 1.1 0.9 Diluted shares 122.3 134.1 149.0 Diluted EPS $ 5.96 $ 6.56 $ 7.08 Potentially dilutive securities excluded from computation of EPS because of antidilutive effect 0.1 0.3 0.5 |
Schedule of antidilutive securities excluded from computation of earnings per share | Computation of Earnings Per Share Year Ended December 31, 2017 2016 2015 (in millions, except per share amounts) Basic EPS: Net income (loss) attributable to AGL $ 730 $ 881 1,056 Less: Distributed and undistributed income (loss) available to nonvested shareholders 1 1 1 Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 729 $ 880 1,055 Basic shares 120.6 133.0 148.1 Basic EPS $ 6.05 $ 6.61 $ 7.12 Diluted EPS: Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 729 $ 880 $ 1,055 Plus: Re-allocation of undistributed income (loss) available to nonvested shareholders of AGL and subsidiaries 0 0 0 Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, diluted $ 729 $ 880 $ 1,055 Basic shares 120.6 133.0 148.1 Dilutive securities: Options and restricted stock awards 1.7 1.1 0.9 Diluted shares 122.3 134.1 149.0 Diluted EPS $ 5.96 $ 6.56 $ 7.08 Potentially dilutive securities excluded from computation of EPS because of antidilutive effect 0.1 0.3 0.5 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Share Repurchases | Share Repurchases Year Number of Shares Repurchased Total Payments (in millions) Average Price Paid Per Share 2015 20,995,419 $ 555 $ 26.43 2016 10,721,248 $ 306 $ 28.53 2017 12,669,643 $ 501 $ 39.57 2018 (through February 23, 2018 on a settlement date basis) 1,230,941 $ 43 $ 34.90 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee benefit plans [Line Items] | |
Restricted Stock Award Activity | Restricted Stock Award Activity |
Schedule of Weighted Average Assumptions Used | The Company uses a Monte Carlo model to value its performance restricted stock units. Monte Carlo Pricing Weighted Average Assumptions |
Stock Purchase Plan | Stock Purchase Plan |
Share-Based Compensation Expense Summary | Share‑Based Compensation Expense Summary |
Stock Options [Member] | |
Employee benefit plans [Line Items] | |
Schedule of Stock Options | Time Vested Stock Options Options for Common Shares Weighted Average Exercise Price Number of Exercisable Options Balance as of December 31, 2016 1,170,593 $ 18.43 1,145,356 Options granted — — Options exercised (331,639 ) 21.02 Options forfeited/expired — — Balance as of December 31, 2017 838,954 $ 17.41 838,954 |
Performance Stock Options [Member] | |
Employee benefit plans [Line Items] | |
Schedule of Stock Options | Performance Stock Options |
Restricted Stock Units (RSUs) [Member] | |
Employee benefit plans [Line Items] | |
Restricted Stock Unit Activity (Excluding Dividend Equivalents) | Restricted Stock Unit Activity |
Performance Restricted Stock Units [Member] | |
Employee benefit plans [Line Items] | |
Restricted Stock Unit Activity (Excluding Dividend Equivalents) | Performance Restricted Stock Unit Activity Performance Restricted Stock Units Number of Performance Share Units Weighted Average Grant Date Fair Value Per Share Nonvested at December 31, 2016 609,435 $ 26.22 Granted (1) 315,896 53.74 Delivered (318,467 ) 25.17 Forfeited — — Nonvested at December 31, 2017 (2) 606,864 $ 33.80 ____________________ (1) Includes 155,000 performance restricted stock units that were granted prior to 2017 at a weighted average grant date fair value of $25.17 , but met performance hurdles and vested in February 2017. The weighted average grant date fair value per share excludes these shares. (2) Excludes 426,670 performance restricted stock units that have met performance hurdles and will be eligible for vesting after December 31, 2017 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income by Component | The following tables present the changes in each component of AOCI and the effect of reclassifications out of AOCI on the respective line items in net income. Changes in Accumulated Other Comprehensive Income by Component Year Ended December 31, 2017 Net Unrealized Gains (Losses) on Investments with no Other-Than-Temporary Impairment Net Unrealized Gains (Losses) on Investments with Other-Than-Temporary Impairment Cumulative Translation Adjustment Cash Flow Hedge Total Accumulated Other Comprehensive Income (in millions) Balance, December 31, 2016 $ 171 $ 10 $ (39 ) $ 7 $ 149 Reclassification of stranded tax effects (see Note 1) 38 21 (5 ) 2 56 Other comprehensive income (loss) before reclassifications 128 69 15 — 212 Amounts reclassified from AOCI to: Net realized investment gains (losses) (71 ) 31 — — (40 ) Net investment income (27 ) (1 ) — — (28 ) Interest expense — — — (1 ) (1 ) Total before tax (98 ) 30 — (1 ) (69 ) Tax (provision) benefit 34 (10 ) — 0 24 Total amount reclassified from AOCI, net of tax (64 ) 20 — (1 ) (45 ) Net current period other comprehensive income (loss) 64 89 15 (1 ) 167 Balance, December 31, 2017 $ 273 $ 120 $ (29 ) $ 8 $ 372 Changes in Accumulated Other Comprehensive Income by Component Year Ended December 31, 2016 Net Unrealized Gains (Losses) on Investments with no Other-Than-Temporary Impairment Net Unrealized Gains (Losses) on Investments with Other-Than-Temporary Impairment Cumulative Translation Adjustment Cash Flow Hedge Total (in millions) Balance, December 31, 2015 $ 260 $ (15 ) $ (16 ) $ 8 $ 237 Other comprehensive income (loss) before reclassifications (71 ) (9 ) (23 ) — (103 ) Amounts reclassified from AOCI to: Net realized investment gains (losses) (23 ) 52 — — 29 Net investment income (3 ) — — — (3 ) Interest expense — — — (1 ) (1 ) Total before tax (26 ) 52 — (1 ) 25 Tax (provision) benefit 8 (18 ) — 0 (10 ) Total amount reclassified from AOCI, net of tax (18 ) 34 — (1 ) 15 Net current period other comprehensive income (loss) (89 ) 25 (23 ) (1 ) (88 ) Balance, December 31, 2016 $ 171 $ 10 $ (39 ) $ 7 $ 149 Changes in Accumulated Other Comprehensive Income by Component Year Ended December 31, 2015 Net Unrealized Gains (Losses) on Investments with no Other-Than-Temporary Impairment Net Unrealized Gains (Losses) on Investments with Other-Than-Temporary Impairment Cumulative Translation Adjustment Cash Flow Total (in millions) Balance, December 31, 2014 $ 367 $ 4 $ (10 ) $ 9 $ 370 Other comprehensive income (loss) before reclassifications (93 ) (43 ) (6 ) — (142 ) Amounts reclassified from AOCI to: Net realized investment gains (losses) (11 ) 37 — — 26 Net investment income (9 ) — — — (9 ) Interest expense — — — (1 ) (1 ) Total before tax (20 ) 37 — (1 ) 16 Tax (provision) benefit 6 (13 ) — 0 (7 ) Total amount reclassified from AOCI, net of tax (14 ) 24 — (1 ) 9 Net current period other comprehensive income (loss) (107 ) (19 ) (6 ) (1 ) (133 ) Balance, December 31, 2015 $ 260 $ (15 ) $ (16 ) $ 8 $ 237 |
Subsidiary Information (Tables)
Subsidiary Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Balance Sheet | CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2017 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) ASSETS Total investment portfolio and cash $ 36 $ 319 $ 28 $ 11,484 $ (328 ) $ 11,539 Investment in subsidiaries 6,794 6,126 4,048 216 (17,184 ) — Premiums receivable, net of commissions payable — — — 1,074 (159 ) 915 Ceded unearned premium reserve — — — 1,002 (883 ) 119 Deferred acquisition costs — — — 144 (43 ) 101 Reinsurance recoverable on unpaid losses — — — 433 (389 ) 44 Credit derivative assets — — — 39 (37 ) 2 Deferred tax asset, net — 59 — 93 (54 ) 98 Intercompany receivable — — — 60 (60 ) — Financial guaranty variable interest entities’ assets, at fair value — — — 700 — 700 Other 26 0 40 1,171 (322 ) 915 TOTAL ASSETS $ 6,856 $ 6,504 $ 4,116 $ 16,416 $ (19,459 ) $ 14,433 LIABILITIES AND SHAREHOLDERS’ EQUITY Unearned premium reserves — — — 4,423 (948 ) 3,475 Loss and LAE reserve — — — 1,793 (349 ) 1,444 Long-term debt — 843 461 6 (18 ) 1,292 Intercompany payable — 60 — 300 (360 ) — Credit derivative liabilities — — — 308 (37 ) 271 Deferred tax liabilities, net — 51 — (51 ) — Financial guaranty variable interest entities’ liabilities, at fair value — — — 757 — 757 Other 17 59 20 740 (481 ) 355 TOTAL LIABILITIES 17 962 532 8,327 (2,244 ) 7,594 TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO ASSURED GUARANTY LTD. 6,839 5,542 3,584 7,873 (16,999 ) 6,839 Noncontrolling interest — — — 216 (216 ) — TOTAL SHAREHOLDERS’ EQUITY 6,839 5,542 3,584 8,089 (17,215 ) 6,839 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 6,856 $ 6,504 $ 4,116 $ 16,416 $ (19,459 ) $ 14,433 CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2016 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) ASSETS Total investment portfolio and cash $ 36 $ 384 $ 22 $ 11,029 $ (368 ) $ 11,103 Investment in subsidiaries 6,164 5,696 3,799 296 (15,955 ) — Premiums receivable, net of commissions payable — — — 699 (123 ) 576 Ceded unearned premium reserve — — — 1,099 (893 ) 206 Deferred acquisition costs — — — 156 (50 ) 106 Reinsurance recoverable on unpaid losses — — — 484 (404 ) 80 Credit derivative assets — — — 69 (56 ) 13 Deferred tax asset, net — 16 — 597 (116 ) 497 Intercompany receivable — — — 70 (70 ) — Financial guaranty variable interest entities’ assets, at fair value — — — 876 — 876 Dividend receivable from affiliate 300 — — — (300 ) — Other 11 78 26 801 (222 ) 694 TOTAL ASSETS $ 6,511 $ 6,174 $ 3,847 $ 16,176 $ (18,557 ) $ 14,151 LIABILITIES AND SHAREHOLDERS’ EQUITY Unearned premium reserves — — — 4,488 (977 ) 3,511 Loss and LAE reserve — — — 1,596 (469 ) 1,127 Long-term debt — 843 453 10 — 1,306 Intercompany payable — 70 — 300 (370 ) — Credit derivative liabilities — — — 458 (56 ) 402 Deferred tax liabilities, net — — 88 — (88 ) — Financial guaranty variable interest entities’ liabilities, at fair value — — — 958 — 958 Dividend payable to affiliate — 300 — — (300 ) — Other 7 3 14 665 (346 ) 343 TOTAL LIABILITIES 7 1,216 555 8,475 (2,606 ) 7,647 TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO ASSURED GUARANTY LTD. 6,504 4,958 3,292 7,405 (15,655 ) 6,504 Noncontrolling interest — — — 296 (296 ) — TOTAL SHAREHOLDERS’ EQUITY 6,504 4,958 3,292 7,701 (15,951 ) 6,504 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 6,511 $ 6,174 $ 3,847 $ 16,176 $ (18,557 ) $ 14,151 |
Condensed Consolidating Statement of Operations and Comprehensive Income | CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2017 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) REVENUES Net earned premiums $ — $ — $ — $ 728 $ (38 ) $ 690 Net investment income 0 2 0 427 (11 ) 418 Net realized investment gains (losses) — 0 0 45 (5 ) 40 Net change in fair value of credit derivatives: Realized gains (losses) and other settlements — — — (10 ) 0 (10 ) Net unrealized gains (losses) — — — 121 — 121 Net change in fair value of credit derivatives — — — 111 0 111 Bargain purchase gain and settlement of pre-existing relationships — — — 58 — 58 Other 10 — — 608 (196 ) 422 TOTAL REVENUES 10 2 0 1,977 (250 ) 1,739 EXPENSES Loss and LAE — — — 327 61 388 Amortization of deferred acquisition costs — — — 26 (7 ) 19 Interest expense — 47 54 11 (15 ) 97 Other operating expenses 38 12 1 394 (201 ) 244 TOTAL EXPENSES 38 59 55 758 (162 ) 748 INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES (28 ) (57 ) (55 ) 1,219 (88 ) 991 Total (provision) benefit for income taxes — 17 54 (359 ) 27 (261 ) Equity in net earnings of subsidiaries 758 636 395 32 (1,821 ) — NET INCOME (LOSS) 730 596 394 892 (1,882 ) 730 Less: noncontrolling interest — — — 32 (32 ) — NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD. $ 730 $ 596 $ 394 $ 860 $ (1,850 ) $ 730 COMPREHENSIVE INCOME (LOSS) $ 897 $ 754 $ 482 $ 1,084 $ (2,320 ) $ 897 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2016 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) REVENUES Net earned premiums $ — $ — $ — $ 892 $ (28 ) $ 864 Net investment income 0 0 0 412 (4 ) 408 Net realized investment gains (losses) 0 2 0 (28 ) (3 ) (29 ) Net change in fair value of credit derivatives: Realized gains (losses) and other settlements — — — 29 0 29 Net unrealized gains (losses) — — — 69 — 69 Net change in fair value of credit derivatives — — — 98 — 98 Bargain purchase gain and settlement of pre-existing relationships — — — 257 2 259 Other 0 — — 78 (1 ) 77 TOTAL REVENUES 0 2 0 1,709 (34 ) 1,677 EXPENSES Loss and LAE — — — 296 (1 ) 295 Amortization of deferred acquisition costs — — — 30 (12 ) 18 Interest expense — 52 54 10 (14 ) 102 Other operating expenses 29 2 2 217 (5 ) 245 TOTAL EXPENSES 29 54 56 553 (32 ) 660 INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES (29 ) (52 ) (56 ) 1,156 (2 ) 1,017 Total (provision) benefit for income taxes — 18 20 (175 ) 1 (136 ) Equity in net earnings of subsidiaries 910 794 274 44 (2,022 ) — NET INCOME (LOSS) 881 760 238 1,025 (2,023 ) 881 Less: noncontrolling interest — — — 44 (44 ) — NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD. $ 881 $ 760 $ 238 $ 981 $ (1,979 ) $ 881 COMPREHENSIVE INCOME (LOSS) $ 793 $ 685 $ 144 $ 953 $ (1,782 ) $ 793 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2015 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) REVENUES Net earned premiums $ — $ — $ — $ 783 $ (17 ) $ 766 Net investment income 0 1 0 432 (10 ) 423 Net realized investment gains (losses) 0 0 1 (19 ) (8 ) (26 ) Net change in fair value of credit derivatives: Realized gains (losses) and other settlements — — — (18 ) 0 (18 ) Net unrealized gains (losses) — — — 773 (27 ) 746 Net change in fair value of credit derivatives — — — 755 (27 ) 728 Bargain purchase gain and settlement of pre-existing relationships — — — 54 160 214 Other — 0 — 102 0 102 TOTAL REVENUES 0 1 1 2,107 98 2,207 EXPENSES Loss and LAE — — — 434 (10 ) 424 Amortization of deferred acquisition costs — — — 29 (9 ) 20 Interest expense — 52 54 14 (19 ) 101 Other operating expenses 30 1 1 202 (3 ) 231 TOTAL EXPENSES 30 53 55 679 (41 ) 776 INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES (30 ) (52 ) (54 ) 1,428 139 1,431 Total (provision) benefit for income taxes — 18 19 (365 ) (47 ) (375 ) Equity in net earnings of subsidiaries 1,086 923 464 39 (2,512 ) — NET INCOME (LOSS) 1,056 889 429 1,102 (2,420 ) 1,056 Less: noncontrolling interest — — — 39 (39 ) — NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD. $ 1,056 $ 889 $ 429 $ 1,063 $ (2,381 ) $ 1,056 COMPREHENSIVE INCOME (LOSS) $ 923 $ 787 $ 348 $ 967 $ (2,102 ) $ 923 |
Condensed Consolidating Statement of Cash Flows | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2017 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) Net cash flows provided by (used in) operating activities $ 579 $ 442 $ 158 $ 477 $ (1,223 ) $ 433 Cash flows from investing activities Fixed-maturity securities: Purchases — (158 ) (17 ) (2,404 ) 27 (2,552 ) Sales — 112 21 1,568 — 1,701 Maturities — 13 0 808 — 821 Sales (purchases) of short-term investments, net 0 131 (8 ) (49 ) — 74 Net proceeds from FG VIE assets — — — 147 — 147 Investment in subsidiaries — (28 ) — (139 ) 167 — Intercompany debt — — — 10 (10 ) — Proceeds from sale of subsidiaries — — — 139 (139 ) — Proceeds from return of capital from subsidiaries — — 101 70 (171 ) — Acquisition of MBIA UK, net of cash acquired — — — 95 — 95 Other — — — 59 — 59 Net cash flows provided by (used in) investing activities 0 70 97 304 (126 ) 345 Cash flows from financing activities Return of capital — — — (70 ) 70 — Capital contribution — — 25 3 (28 ) — Dividends paid (70 ) (470 ) (278 ) (475 ) 1,223 (70 ) Repurchases of common stock (501 ) — — (101 ) 101 (501 ) Repurchases of common stock to pay withholding taxes (13 ) — — — — (13 ) Net paydowns of FG VIE liabilities — — — (157 ) — (157 ) Paydown of long-term debt — — — (3 ) (27 ) (30 ) Proceeds from options exercises 5 — — — — 5 Intercompany debt — (10 ) — — 10 — Net cash flows provided by (used in) financing activities (579 ) (480 ) (253 ) (803 ) 1,349 (766 ) Effect of exchange rate changes — — — 5 — 5 Increase (decrease) in cash and restricted cash 0 32 2 (17 ) — 17 Cash and restricted cash at beginning of period 0 1 0 126 — 127 Cash and restricted cash at end of period $ 0 $ 33 $ 2 $ 109 $ — $ 144 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2016 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) Net cash flows provided by (used in) operating activities $ 391 $ 533 $ 213 $ 72 $ (1,341 ) $ (132 ) Cash flows from investing activities Fixed-maturity securities: Purchases (4 ) (143 ) (10 ) (1,489 ) — (1,646 ) Sales 4 24 12 1,325 — 1,365 Maturities — 30 — 1,125 — 1,155 Sales (purchases) of short-term investments, net (26 ) (237 ) (10 ) 290 — 17 Net proceeds from FG VIE assets — — — 629 — 629 Intercompany debt — — — 20 (20 ) — Proceeds from return of capital from subsidiaries — — 300 4 (304 ) — Acquisition of CIFG, net of cash acquired — — — (442 ) 7 (435 ) Other — 7 — (9 ) (7 ) (9 ) Net cash flows provided by (used in) investing activities (26 ) (319 ) 292 1,453 (324 ) 1,076 Cash flows from financing activities — Return of capital — — — (4 ) 4 — Dividends paid (69 ) (288 ) (513 ) (540 ) 1,341 (69 ) Repurchases of common stock (306 ) — — (300 ) 300 (306 ) Repurchases of common stock to pay withholding taxes (2 ) — — — — (2 ) Net paydowns of FG VIE liabilities — — — (611 ) — (611 ) Paydown of long-term debt — — — (2 ) — (2 ) Proceeds from options exercised 12 — — — — 12 Intercompany debt — (20 ) — — 20 — Net cash flows provided by (used in) financing activities (365 ) (308 ) (513 ) (1,457 ) 1,665 (978 ) Effect of exchange rate changes — — — (5 ) — (5 ) Increase (decrease) in cash and restricted cash — (94 ) (8 ) 63 — (39 ) Cash and restricted cash at beginning of period 0 95 8 63 — 166 Cash and restricted cash at end of period $ 0 $ 1 $ 0 $ 126 $ — $ 127 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2015 (in millions) Assured Guaranty Ltd. (Parent) AGUS (Issuer) AGMH (Issuer) Other Entities Consolidating Adjustments Assured Guaranty Ltd. (Consolidated) Net cash flows provided by (used in) operating activities $ 513 $ 408 $ 185 $ 33 $ (1,210 ) $ (71 ) Cash flows from investing activities Fixed-maturity securities: Purchases — (72 ) (21 ) (2,550 ) 66 (2,577 ) Sales — 177 30 1,900 — 2,107 Maturities — 9 — 889 — 898 Sales (purchases) of short-term investments, net 116 33 19 729 — 897 Net proceeds from FG VIE assets — — — 400 — 400 Proceeds from repayment of surplus notes — — 25 — (25 ) — Acquisition of Radian Asset, net of cash acquired — — — (800 ) — (800 ) Other — (5 ) — 74 — 69 Net cash flows provided by (used in) investing activities 116 142 53 642 41 994 Cash flows from financing activities Return of capital — — — (25 ) 25 — Dividends paid (72 ) (455 ) (234 ) (455 ) 1,144 (72 ) Repurchases of common stock (555 ) — — — — (555 ) Repurchases of common stock to pay withholding taxes (7 ) — — — — (7 ) Net paydowns of FG VIE liabilities — — — (214 ) — (214 ) Paydown of long-term debt — — — (4 ) — (4 ) Proceeds from options exercised 5 — — — — 5 Net cash flows provided by (used in) financing activities (629 ) (455 ) (234 ) (698 ) 1,169 (847 ) Effect of exchange rate changes — — — (4 ) — (4 ) Increase (decrease) in cash and restricted cash — 95 4 (27 ) — 72 Cash and restricted cash at beginning of period 0 0 4 90 — 94 Cash and restricted cash at end of period $ 0 $ 95 $ 8 $ 63 $ — $ 166 |
Quarterly Financial Informati53
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Information | A summary of selected quarterly information follows: 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year (dollars in millions, except per share data) Revenues Net earned premiums $ 164 $ 162 $ 186 $ 178 $ 690 Net investment income 122 101 99 96 418 Net realized investment gains (losses) 32 15 7 (14 ) 40 Net change in fair value of credit derivatives 54 (6 ) 58 5 111 Fair value gains (losses) on CCS (2 ) 2 (4 ) 2 (2 ) Fair value gains (losses) on FG VIEs 10 12 3 5 30 Bargain purchase gain and settlement of pre-existing relationships 58 — — — 58 Other income (loss) 89 22 274 9 394 Expenses Loss and LAE 59 72 223 34 388 Amortization of DAC 4 4 5 6 19 Interest expense 24 25 24 24 97 Other operating expenses 68 57 58 61 244 Income (loss) before provision for income taxes 372 150 313 156 991 Provision (benefit) for income taxes 55 (3 ) 105 104 261 Net income (loss) 317 153 208 52 730 Earnings (loss) per share(1): Basic $ 2.53 $ 1.26 $ 1.75 $ 0.44 $ 6.05 Diluted $ 2.49 $ 1.24 $ 1.72 $ 0.44 $ 5.96 Dividends per share $ 0.1425 $ 0.1425 $ 0.1425 $ 0.1425 $ 0.57 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year (dollars in millions, except per share data) Revenues Net earned premiums $ 183 $ 214 $ 231 $ 236 $ 864 Net investment income 99 98 94 117 408 Net realized investment gains (losses) (13 ) 10 (2 ) (24 ) (29 ) Net change in fair value of credit derivatives (60 ) 63 21 74 98 Fair value gains (losses) on CCS (16 ) (11 ) (23 ) 50 0 Fair value gains (losses) on FG VIEs 18 4 (11 ) 27 38 Bargain purchase gain and settlement of pre-existing relationships — — 259 — 259 Other income (loss) 34 18 (3 ) (10 ) 39 Expenses Loss and LAE 90 102 (9 ) 112 295 Amortization of DAC 4 5 4 5 18 Interest expense 26 25 26 25 102 Other operating expenses 60 63 65 57 245 Income (loss) before provision for income taxes 65 201 480 271 1,017 Provision (benefit) for income taxes 6 55 1 74 136 Net income (loss) 59 146 479 197 881 Earnings (loss) per share(1): Basic $ 0.43 $ 1.09 $ 3.63 $ 1.51 $ 6.61 Diluted $ 0.43 $ 1.09 $ 3.60 $ 1.49 $ 6.56 Dividends per share $ 0.13 $ 0.13 $ 0.13 $ 0.13 $ 0.52 ____________________ (1) Per share amounts for the quarters and the full years have each been calculated separately. Accordingly, quarterly amounts may not sum up to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive. |
Business and Basis of Present54
Business and Basis of Presentation (Details) $ in Millions | Jan. 01, 2018USD ($) | Dec. 22, 2017USD ($) | Dec. 31, 2017USD ($)segmentCompany |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of holding companies having outstanding public debt | Company | 2 | ||
Number of reportable segments | segment | 1 | ||
Item Effected [Line Items] | |||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit) | $ 61 | ||
Accumulated Other Comprehensive Income [Member] | |||
Item Effected [Line Items] | |||
Reclassification of stranded tax effects (see Note 1) | $ 56 | 56 | |
United States [Member] | |||
Item Effected [Line Items] | |||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit) | $ 61 | ||
Accounting Standards Update 2016-01 [Member] | Subsequent Event [Member] | |||
Item Effected [Line Items] | |||
Cumulative changes in fair value of FG VIE Liabilities, net of tax | $ 32 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | Jan. 10, 2017USD ($) | Jul. 01, 2016USD ($) | Apr. 01, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)Company |
Business Acquisition [Line Items] | |||||||||
Number of business acquired | Company | 3 | ||||||||
Acquisitions, net of cash acquired | $ 95 | $ (435) | $ (800) | ||||||
Net par amount outstanding | $ 296,318 | 264,952 | $ 296,318 | $ 264,952 | |||||
CIFG Holding Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash purchase price | $ 443 | ||||||||
Revenue | 307 | ||||||||
Net income (loss) | 323 | ||||||||
Acquisition related costs | $ 6 | ||||||||
Radian [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash purchase price | $ 804 | ||||||||
Net par amount outstanding assumed in business acquisition | 13,600 | ||||||||
Revenue | $ 560 | ||||||||
Net income (loss) | 366 | ||||||||
Acquisition related costs | $ 12 | ||||||||
MBIA UK [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash purchase price | $ 334 | ||||||||
Revenue | 192 | ||||||||
Net income (loss) | 139 | ||||||||
Acquisition related costs | $ 7 | ||||||||
Subsidiaries [Member] | CIFG Holding Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash purchase price | 450.6 | ||||||||
Subsidiaries [Member] | Radian [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash purchase price | 804.5 | ||||||||
Subsidiaries [Member] | MBIA UK [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash acquired from acquisition | 23 | ||||||||
Bond exchanged amount | 347 | ||||||||
Gross Par Outstanding, Fair Value | 334 | ||||||||
CIFG Holding Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Net par amount outstanding assumed in business acquisition | $ 4,200 | ||||||||
MBIA UK [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Net par amount outstanding | $ 12,000 | ||||||||
AGUS [Member] | CIFG Holding Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Ownership percentage by noncontrolling owners | 1.60% | ||||||||
Acquisitions, net of cash acquired | $ 7.1 | ||||||||
AGUS [Member] | Subsidiaries [Member] | Radian [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition loan from parent company | $ 200 |
Acquisitions - Assets and Liabi
Acquisitions - Assets and Liabilities Assumed (Details) - USD ($) $ in Millions | Jan. 10, 2017 | Jul. 01, 2016 | Apr. 01, 2015 |
Radian [Member] | |||
Business Acquisition [Line Items] | |||
Cash purchase price | $ 804 | ||
Identifiable assets acquired: | |||
Investments | 1,473 | ||
Cash | 4 | ||
Ceded unearned premium reserve, fair value of net assets acquired, before settlement of pre-existing relationships | (3) | ||
Ceded unearned premium reserve, net effect of settlement of pre-existing relationships | (65) | ||
Ceded unearned premium reserve, net effect of Radian asset acquisition | (68) | ||
Credit derivative assets | 30 | ||
Deferred tax assets, net, fair value of net assets acquired, before settlement of pre-existing relationships | 263 | ||
Deferred tax asset, net effect of settlement of pre-exiting relationships | (56) | ||
Deferred tax asset, net effect of CIFG acquisition | 207 | ||
Financial guaranty variable interest entities' assets | 122 | ||
Other assets, fair value of net assets acquired, before settlement of pre-existing relationships | 86 | ||
Other assets, net of settlement of pre-existing relationships | (67) | ||
Other assets, Net effect of MBIA UK Acquisition | 19 | ||
Total assets, fair value of net assets acquired, before settlement of pre-existing relationships | 1,975 | ||
Total assets, net of settlement of pre-existing relationships | (188) | ||
Total assets, Net effect of MBIA UK Acquisition | 1,787 | ||
Liabilities assumed: | |||
Unearned premium reserves, fair value of net assets acquired, before settlement of pre-existing relationships | 697 | ||
Unearned premium reserves, net of settlement of pre-existing relationships | (216) | ||
Unearned premium reserves, Net effect of MBIA UK Acquisition | 481 | ||
Credit derivative liabilities, fair value of net assets acquired before settlement of pre-existing relationships | 271 | ||
Credit derivative liabilities, net effect of settlement of pre-existing relationships | (26) | ||
Credit derivative liabilities, net effect of Radian asset acquisition | 245 | ||
Financial guaranty variable interest entities' liabilities | 118 | ||
Other liabilities, fair value of net assets acquired, before settlement of pre-existing relationships | 30 | ||
Other liabilities, net of settlement of pre-existing relationships | (49) | ||
Other liabilities, Net effect of MBIA UK Acquisition | (19) | ||
Total liabilities, fair value of net assets acquired, before settlement of pre-existing relationships | 1,116 | ||
Total liabilities, net of settlement of pre-existing relationships | (291) | ||
Total liabilities, Net effect of MBIA UK Acquisition | 825 | ||
Net assets effect of MBIA UK Acquisition, fair value of net assets acquired, before settlement of pre-existing relationships | 859 | ||
Net assets effect of MBIA UK Acquisition, net of settlement of pre-existing relationships | 103 | ||
Net asset effect of MBIA UK Acquisition, Net effect of MBIA UK Acquisition | 962 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after tax, fair value of net assets acquired, before settlement of pre-existing relationships | 55 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax, net of settlement of pre-existing relationships | 103 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax, Net effect of MBIA UK Acquisition | 158 | ||
Deferred tax, net of settlement of pre-existing relationships | 56 | ||
Deferred tax, Net effect of MBIA UK Acquisition | 56 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisitions, pre-tax, fair value of net assets acquired, before settlement of pre-existing relationships | 55 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax, net of settlement of pre-existing relationships | 159 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax, Net effect of MBIA UK Acquisition | 214 | ||
Assumed assets including pre-existing relationship | 1,042 | ||
Settlement of pre-existing relationship | (183) | ||
Consideration transferred | $ 987 | ||
CIFG Holding Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Cash purchase price | $ 443 | ||
Identifiable assets acquired: | |||
Investments | 770 | ||
Cash | 8 | ||
Premiums receivable, net of commissions payable, fair value of net assets acquired, before settlement of pre-existing relationships | 18 | ||
Ceded unearned premium reserve, fair value of net assets acquired, before settlement of pre-existing relationships | 173 | ||
Ceded unearned premium reserve, net effect of settlement of pre-existing relationships | (173) | ||
Deferred acquisition costs, fair value of net assets acquired, before settlement of pre-existing relationships | 1 | ||
Deferred acquisition costs, net effect of settlement of pre-existing relationships | (1) | ||
Salvage and subrogation recoverable | 23 | ||
Credit derivative assets | 1 | ||
Deferred tax assets, net, fair value of net assets acquired, before settlement of pre-existing relationships | 194 | ||
Deferred tax asset, net effect of settlement of pre-exiting relationships | 34 | ||
Deferred tax asset, net effect of CIFG acquisition | 228 | ||
Other assets, fair value of net assets acquired, before settlement of pre-existing relationships | 4 | ||
Total assets, fair value of net assets acquired, before settlement of pre-existing relationships | 1,192 | ||
Total assets, net of settlement of pre-existing relationships | (140) | ||
Total assets, Net effect of MBIA UK Acquisition | 1,052 | ||
Liabilities assumed: | |||
Unearned premium reserves, fair value of net assets acquired, before settlement of pre-existing relationships | 306 | ||
Unearned premium reserves, net of settlement of pre-existing relationships | (10) | ||
Unearned premium reserves, Net effect of MBIA UK Acquisition | 296 | ||
Loss and loss adjustments expense reserve, fair value of net assets acquired before settlements of pre-existing relationships | 1 | ||
Loss and loss adjustments expense reserve, net effect of settlement of pre-existing relationships | (66) | ||
Loss and loss adjustments expense reserve, net effect of CIFG acquisition | (65) | ||
Credit derivative liabilities, fair value of net assets acquired before settlement of pre-existing relationships | 68 | ||
Other liabilities, fair value of net assets acquired, before settlement of pre-existing relationships | 17 | ||
Total liabilities, fair value of net assets acquired, before settlement of pre-existing relationships | 392 | ||
Total liabilities, net of settlement of pre-existing relationships | (76) | ||
Total liabilities, Net effect of MBIA UK Acquisition | 316 | ||
Net assets effect of MBIA UK Acquisition, fair value of net assets acquired, before settlement of pre-existing relationships | 800 | ||
Net assets effect of MBIA UK Acquisition, net of settlement of pre-existing relationships | (64) | ||
Net asset effect of MBIA UK Acquisition, Net effect of MBIA UK Acquisition | 736 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after tax, fair value of net assets acquired, before settlement of pre-existing relationships | 357 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax, net of settlement of pre-existing relationships | (64) | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax, Net effect of MBIA UK Acquisition | 293 | ||
Deferred tax, net of settlement of pre-existing relationships | (34) | ||
Deferred tax, Net effect of MBIA UK Acquisition | (34) | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisitions, pre-tax, fair value of net assets acquired, before settlement of pre-existing relationships | 357 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax, net of settlement of pre-existing relationships | (98) | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax, Net effect of MBIA UK Acquisition | 259 | ||
Assumed assets including pre-existing relationship | 627 | ||
Settlement of pre-existing relationship | (173) | ||
Consideration transferred | $ 270 | ||
MBIA UK [Member] | |||
Business Acquisition [Line Items] | |||
Cash purchase price | $ 334 | ||
Identifiable assets acquired: | |||
Investments | 459 | ||
Cash | 72 | ||
Premiums receivable, net of commissions payable, fair value of net assets acquired, before settlement of pre-existing relationships | 274 | ||
Premiums receivable, net of commissions payable, net of settlement of pre-existing relationships | (4) | ||
Premiums receivable, net of commissions payable, net effect of MBIA UK Acquisition | 270 | ||
Other assets, fair value of net assets acquired, before settlement of pre-existing relationships | 16 | ||
Other assets, net of settlement of pre-existing relationships | (6) | ||
Other assets, Net effect of MBIA UK Acquisition | 10 | ||
Total assets, fair value of net assets acquired, before settlement of pre-existing relationships | 821 | ||
Total assets, net of settlement of pre-existing relationships | (10) | ||
Total assets, Net effect of MBIA UK Acquisition | 811 | ||
Liabilities assumed: | |||
Unearned premium reserves, fair value of net assets acquired, before settlement of pre-existing relationships | 389 | ||
Unearned premium reserves, net of settlement of pre-existing relationships | (6) | ||
Unearned premium reserves, Net effect of MBIA UK Acquisition | 383 | ||
Current tax payable, fair value of net assets acquired, before settlement of pre-existing relationships | 25 | ||
Current tax payable, net of settlement of pre-existing relationships | 0 | ||
Current tax payable, Net effect of MBIA UK Acquisition | 25 | ||
Other liabilities, fair value of net assets acquired, before settlement of pre-existing relationships | 4 | ||
Other liabilities, net of settlement of pre-existing relationships | (5) | ||
Other liabilities, Net effect of MBIA UK Acquisition | (1) | ||
Total liabilities, fair value of net assets acquired, before settlement of pre-existing relationships | 418 | ||
Total liabilities, net of settlement of pre-existing relationships | (11) | ||
Total liabilities, Net effect of MBIA UK Acquisition | 407 | ||
Net assets of MBIA UK, fair value of net assets acquired, before settlement of pre-existing relationships | 403 | ||
Net assets of MBIA UK, net of settlement of pre-existing relationships | 1 | ||
Net assets of MBIA UK, Net effect of MBIA UK Acquisition | 404 | ||
Cash acquired from MBIA Holdings, fair value of net assets acquired, before settlement of pre-existing relationships | 23 | ||
Cash acquired from MBIA Holdings, net of settlement of pre-existing relationships | 0 | ||
Cash acquired from MBIA Holdings, Net effect of MBIA UK Acquisition | 23 | ||
Deferred tax liability, fair value of net assets acquired, before settlement of pre-existing relationships | (36) | ||
Deferred tax liability, net of settlement of pre-existing relationships | 0 | ||
Deferred tax liability, Net effect of MBIA UK Acquisition | (36) | ||
Net assets effect of MBIA UK Acquisition, fair value of net assets acquired, before settlement of pre-existing relationships | 390 | ||
Net assets effect of MBIA UK Acquisition, net of settlement of pre-existing relationships | 1 | ||
Net asset effect of MBIA UK Acquisition, Net effect of MBIA UK Acquisition | 391 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after tax, fair value of net assets acquired, before settlement of pre-existing relationships | 56 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax, net of settlement of pre-existing relationships | 1 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, after-tax, Net effect of MBIA UK Acquisition | 57 | ||
Deferred tax, net of settlement of pre-existing relationships | 1 | ||
Deferred tax, Net effect of MBIA UK Acquisition | 1 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisitions, pre-tax, fair value of net assets acquired, before settlement of pre-existing relationships | 56 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax, net of settlement of pre-existing relationships | 2 | ||
Bargain purchase gain and settlement of pre-existing relationships resulting from MBIA UK Acquisition, pre-tax, Net effect of MBIA UK Acquisition | 58 | ||
Assumed assets including pre-existing relationship | 385 | ||
Settlement of pre-existing relationship | 5 | ||
Consideration transferred | $ 329 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
MBIA UK [Member] | ||
Business Acquisition [Line Items] | ||
Pro forma revenues | $ 1,849 | |
Pro forma net income | $ 1,005 | |
Pro forma earnings per share: | ||
Basic (in dollars per share) | $ 7.55 | |
Diluted (in dollars per share) | $ 7.49 | |
Radian [Member] | ||
Business Acquisition [Line Items] | ||
Pro forma revenues | $ 2,030 | |
Pro forma net income | $ 922 | |
Pro forma earnings per share: | ||
Basic (in dollars per share) | $ 6.22 | |
Diluted (in dollars per share) | $ 6.18 |
Outstanding Exposure - Debt Ser
Outstanding Exposure - Debt Service Outstanding (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Debt Service Outstanding | $ 408,492 | $ 455,000 |
Net debt service outstanding | 401,118 | 437,535 |
Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Debt Service Outstanding | 393,010 | 425,849 |
Net debt service outstanding | 386,092 | 409,447 |
Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Debt Service Outstanding | 15,482 | 29,151 |
Net debt service outstanding | $ 15,026 | $ 28,088 |
Outstanding Exposure - Financia
Outstanding Exposure - Financial Guaranty Portfolio by Internal Rating (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 264,952 | $ 296,318 |
% of total net par outstanding | 100.00% | 100.00% |
United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 220,616 | |
Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 44,336 | |
AAA [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 5,392 | $ 15,491 |
% of total net par outstanding | 2.10% | 5.20% |
AA [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 34,212 | $ 52,490 |
% of total net par outstanding | 12.90% | 17.70% |
A [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 134,396 | $ 142,144 |
% of total net par outstanding | 50.70% | 48.00% |
BBB [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 78,714 | $ 73,119 |
% of total net par outstanding | 29.70% | 24.70% |
BIG [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 12,238 | $ 13,074 |
% of total net par outstanding | 4.60% | 4.40% |
Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 252,314 | $ 271,179 |
Public Finance [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 209,392 | $ 244,798 |
% of total net par outstanding | 100.00% | 100.00% |
Public Finance [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 42,922 | $ 26,381 |
% of total net par outstanding | 100.00% | 100.00% |
Public Finance [Member] | AAA [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 877 | $ 2,066 |
% of total net par outstanding | 0.40% | 0.80% |
Public Finance [Member] | AAA [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 2,541 | $ 2,221 |
% of total net par outstanding | 5.90% | 8.40% |
Public Finance [Member] | AA [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 30,016 | $ 46,420 |
% of total net par outstanding | 14.30% | 19.00% |
Public Finance [Member] | AA [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 205 | $ 170 |
% of total net par outstanding | 0.50% | 0.60% |
Public Finance [Member] | A [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 118,620 | $ 133,829 |
% of total net par outstanding | 56.70% | 54.70% |
Public Finance [Member] | A [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 13,936 | $ 6,270 |
% of total net par outstanding | 32.50% | 23.80% |
Public Finance [Member] | BBB [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 52,739 | $ 55,103 |
% of total net par outstanding | 25.20% | 22.50% |
Public Finance [Member] | BBB [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 24,509 | $ 16,378 |
% of total net par outstanding | 57.10% | 62.10% |
Public Finance [Member] | BIG [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 8,871 | $ 8,722 |
Public Finance [Member] | BIG [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 7,140 | $ 7,380 |
% of total net par outstanding | 3.40% | 3.00% |
Public Finance [Member] | BIG [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 1,731 | $ 1,342 |
% of total net par outstanding | 4.00% | 5.10% |
Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 12,638 | $ 25,139 |
Structured Finance [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 11,224 | $ 22,057 |
% of total net par outstanding | 100.00% | 100.00% |
Structured Finance [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 1,414 | $ 3,082 |
% of total net par outstanding | 100.00% | 100.00% |
Structured Finance [Member] | AAA [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 1,655 | $ 9,757 |
% of total net par outstanding | 14.70% | 44.20% |
Structured Finance [Member] | AAA [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 319 | $ 1,447 |
% of total net par outstanding | 22.50% | 47.00% |
Structured Finance [Member] | AA [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 3,915 | $ 5,773 |
% of total net par outstanding | 34.90% | 26.20% |
Structured Finance [Member] | AA [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 76 | $ 127 |
% of total net par outstanding | 5.40% | 4.10% |
Structured Finance [Member] | A [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 1,630 | $ 1,589 |
% of total net par outstanding | 14.50% | 7.20% |
Structured Finance [Member] | A [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 210 | $ 456 |
% of total net par outstanding | 14.90% | 14.80% |
Structured Finance [Member] | BBB [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 763 | $ 879 |
% of total net par outstanding | 6.80% | 4.00% |
Structured Finance [Member] | BBB [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 703 | $ 759 |
% of total net par outstanding | 49.70% | 24.60% |
Structured Finance [Member] | BIG [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 3,367 | $ 4,352 |
Structured Finance [Member] | BIG [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 3,261 | $ 4,059 |
% of total net par outstanding | 29.10% | 18.40% |
Structured Finance [Member] | BIG [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 106 | $ 293 |
% of total net par outstanding | 7.50% | 9.50% |
Outstanding Exposure - Financ60
Outstanding Exposure - Financial Guaranty Portfolio by Asset Class (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | $ 269,386 | $ 307,474 |
Net Par Outstanding | 264,952 | 296,318 |
Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 256,301 | 281,392 |
Net Par Outstanding | 252,314 | 271,179 |
Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 13,085 | 26,082 |
Net Par Outstanding | 12,638 | 25,139 |
United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding | 220,616 | |
United States [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 211,441 | 250,905 |
Net Par Outstanding | 209,392 | 244,798 |
United States [Member] | Public Finance [Member] | General obligation [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 91,531 | 110,167 |
Net Par Outstanding | 90,705 | 107,717 |
United States [Member] | Public Finance [Member] | Tax backed [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 44,783 | 51,325 |
Net Par Outstanding | 44,350 | 49,931 |
United States [Member] | Public Finance [Member] | Municipal utilities [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 32,584 | 38,442 |
Net Par Outstanding | 32,357 | 37,603 |
United States [Member] | Public Finance [Member] | Transportation [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 17,193 | 19,915 |
Net Par Outstanding | 17,030 | 19,403 |
United States [Member] | Public Finance [Member] | Healthcare [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 9,087 | 11,940 |
Net Par Outstanding | 8,763 | 11,238 |
United States [Member] | Public Finance [Member] | Higher education [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 8,210 | 10,114 |
Net Par Outstanding | 8,195 | 10,085 |
United States [Member] | Public Finance [Member] | Infrastructure finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 4,259 | 3,902 |
Net Par Outstanding | 4,216 | 3,769 |
United States [Member] | Public Finance [Member] | Housing [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 1,336 | 1,593 |
Net Par Outstanding | 1,319 | 1,559 |
United States [Member] | Public Finance [Member] | Investor-owned utilities [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 523 | 697 |
Net Par Outstanding | 523 | 697 |
United States [Member] | Public Finance [Member] | Other public/structured finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 1,935 | 2,810 |
Net Par Outstanding | 1,934 | 2,796 |
United States [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 11,652 | 22,731 |
Net Par Outstanding | 11,224 | 22,057 |
United States [Member] | Structured Finance [Member] | Other public/structured finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 461 | 689 |
Net Par Outstanding | 456 | 640 |
United States [Member] | Structured Finance [Member] | Pooled corporate obligations [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 1,347 | 10,273 |
Net Par Outstanding | 1,347 | 10,050 |
United States [Member] | Structured Finance [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 4,864 | 5,933 |
Net Par Outstanding | 4,818 | 5,637 |
United States [Member] | Structured Finance [Member] | Consumer receivables [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 1,591 | 1,707 |
Net Par Outstanding | 1,590 | 1,652 |
United States [Member] | Structured Finance [Member] | Insurance Securitizations [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 1,825 | 2,355 |
Net Par Outstanding | 1,449 | 2,308 |
United States [Member] | Structured Finance [Member] | Financial product [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 1,418 | 1,540 |
Net Par Outstanding | 1,418 | 1,540 |
United States [Member] | Structured Finance [Member] | Commercial receivables [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 146 | 234 |
Net Par Outstanding | 146 | 230 |
Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding | 44,336 | |
Non United States [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 44,860 | 30,487 |
Net Par Outstanding | 42,922 | 26,381 |
Non United States [Member] | Public Finance [Member] | Infrastructure finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 18,916 | 11,818 |
Net Par Outstanding | 18,234 | 10,731 |
Non United States [Member] | Public Finance [Member] | Regulated utilities [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 17,691 | 11,395 |
Net Par Outstanding | 16,689 | 9,263 |
Non United States [Member] | Public Finance [Member] | Pooled infrastructure [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 1,561 | 1,621 |
Net Par Outstanding | 1,561 | 1,513 |
Non United States [Member] | Public Finance [Member] | Other public/structured finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 6,692 | 5,653 |
Net Par Outstanding | 6,438 | 4,874 |
Non United States [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 1,433 | 3,351 |
Net Par Outstanding | 1,414 | 3,082 |
Non United States [Member] | Structured Finance [Member] | Other public/structured finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 325 | 601 |
Net Par Outstanding | 324 | 587 |
Non United States [Member] | Structured Finance [Member] | Pooled corporate obligations [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 157 | 1,716 |
Net Par Outstanding | 157 | 1,535 |
Non United States [Member] | Structured Finance [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 655 | 661 |
Net Par Outstanding | 637 | 604 |
Non United States [Member] | Structured Finance [Member] | Commercial receivables [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 296 | 373 |
Net Par Outstanding | $ 296 | $ 356 |
Outstanding Exposure - Expected
Outstanding Exposure - Expected Amortization of Net Par Outstanding (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Expected Amortization of Net Par Outstanding [Abstract] | ||
0 to 5 years | $ 84,966 | |
5 to 10 years | 54,173 | |
10 to 15 years | 47,352 | |
15 to 20 years | 36,866 | |
20 years and above | 41,595 | |
Net Par Outstanding | 264,952 | $ 296,318 |
Public Finance [Member] | ||
Expected Amortization of Net Par Outstanding [Abstract] | ||
0 to 5 years | 78,860 | |
5 to 10 years | 51,541 | |
10 to 15 years | 45,634 | |
15 to 20 years | 34,974 | |
20 years and above | 41,305 | |
Net Par Outstanding | 252,314 | 271,179 |
Structured Finance [Member] | ||
Expected Amortization of Net Par Outstanding [Abstract] | ||
0 to 5 years | 6,106 | |
5 to 10 years | 2,632 | |
10 to 15 years | 1,718 | |
15 to 20 years | 1,892 | |
20 years and above | 290 | |
Net Par Outstanding | $ 12,638 | $ 25,139 |
Outstanding Exposure - Componen
Outstanding Exposure - Components of BIG Net Par Outstanding (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 264,952 | $ 296,318 |
Triple-X Life Insurance Transaction [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 1,199 | 2,057 |
Trust preferred securities (TruPS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 1,349 | 1,892 |
Other structured finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 5,272 | 15,553 |
Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 252,314 | 271,179 |
Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 12,638 | 25,139 |
BIG [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 12,238 | 13,074 |
BIG [Member] | Triple-X Life Insurance Transaction [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 85 | 126 |
BIG [Member] | Trust preferred securities (TruPS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 161 | 430 |
BIG [Member] | Other structured finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 360 | 645 |
BIG [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 8,871 | 8,722 |
BIG [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 3,367 | 4,352 |
BIG [Member] | BIG 1 [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 4,528 | 4,495 |
BIG [Member] | BIG 1 [Member] | Triple-X Life Insurance Transaction [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 0 | 0 |
BIG [Member] | BIG 1 [Member] | Trust preferred securities (TruPS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 161 | 304 |
BIG [Member] | BIG 1 [Member] | Other structured finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 170 | 304 |
BIG [Member] | BIG 1 [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 3,823 | 3,690 |
BIG [Member] | BIG 1 [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 705 | 805 |
BIG [Member] | BIG 2 [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 1,361 | 4,059 |
BIG [Member] | BIG 2 [Member] | Triple-X Life Insurance Transaction [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 0 | 0 |
BIG [Member] | BIG 2 [Member] | Trust preferred securities (TruPS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 0 | 126 |
BIG [Member] | BIG 2 [Member] | Other structured finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 118 | 263 |
BIG [Member] | BIG 2 [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 939 | 3,177 |
BIG [Member] | BIG 2 [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 422 | 882 |
BIG [Member] | BIG 3 [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 6,349 | 4,520 |
BIG [Member] | BIG 3 [Member] | Triple-X Life Insurance Transaction [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 85 | 126 |
BIG [Member] | BIG 3 [Member] | Trust preferred securities (TruPS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 0 | 0 |
BIG [Member] | BIG 3 [Member] | Other structured finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 72 | 78 |
BIG [Member] | BIG 3 [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 4,109 | 1,855 |
BIG [Member] | BIG 3 [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 2,240 | 2,665 |
United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 220,616 | |
United States [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 4,818 | 5,637 |
United States [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 209,392 | 244,798 |
United States [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 11,224 | 22,057 |
United States [Member] | BIG [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 2,761 | 3,151 |
United States [Member] | BIG [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 7,140 | 7,380 |
United States [Member] | BIG [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 3,261 | 4,059 |
United States [Member] | BIG [Member] | BIG 1 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 374 | 197 |
United States [Member] | BIG [Member] | BIG 1 [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 2,368 | 2,402 |
United States [Member] | BIG [Member] | BIG 2 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 304 | 493 |
United States [Member] | BIG [Member] | BIG 2 [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 663 | 3,123 |
United States [Member] | BIG [Member] | BIG 3 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 2,083 | 2,461 |
United States [Member] | BIG [Member] | BIG 3 [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 4,109 | 1,855 |
Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 44,336 | |
Non United States [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 42,922 | 26,381 |
Non United States [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 1,414 | 3,082 |
Non United States [Member] | BIG [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 1,731 | 1,342 |
Non United States [Member] | BIG [Member] | Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 106 | 293 |
Non United States [Member] | BIG [Member] | BIG 1 [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 1,455 | 1,288 |
Non United States [Member] | BIG [Member] | BIG 2 [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | 276 | 54 |
Non United States [Member] | BIG [Member] | BIG 3 [Member] | Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net par amount outstanding | $ 0 | $ 0 |
Outstanding Exposure - BIG Net
Outstanding Exposure - BIG Net Par Outstanding (Details) $ in Millions | Dec. 31, 2017USD ($)risk | Dec. 31, 2016USD ($)risk |
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding, Credit Derivative | $ 6,207 | $ 16,997 |
Net Par Outstanding | $ 264,952 | 296,318 |
Number of Risks | risk | 10,239 | |
BIG [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding, Financial Guaranty Insurance | $ 11,900 | 12,101 |
Net Par Outstanding, Credit Derivative | 338 | 973 |
Net Par Outstanding | $ 12,238 | $ 13,074 |
Number of Risks, Financial Guaranty Insurance | risk | 335 | 392 |
Number of Risks, Credit Derivative | risk | 19 | 25 |
Number of Risks | risk | 354 | 417 |
BIG [Member] | BIG 1 [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding, Financial Guaranty Insurance | $ 4,301 | $ 3,861 |
Net Par Outstanding, Credit Derivative | 227 | 634 |
Net Par Outstanding | $ 4,528 | $ 4,495 |
Number of Risks, Financial Guaranty Insurance | risk | 139 | 165 |
Number of Risks, Credit Derivative | risk | 7 | 10 |
Number of Risks | risk | 146 | 175 |
BIG [Member] | BIG 2 [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding, Financial Guaranty Insurance | $ 1,344 | $ 3,857 |
Net Par Outstanding, Credit Derivative | 17 | 202 |
Net Par Outstanding | $ 1,361 | $ 4,059 |
Number of Risks, Financial Guaranty Insurance | risk | 46 | 79 |
Number of Risks, Credit Derivative | risk | 3 | 6 |
Number of Risks | risk | 49 | 85 |
BIG [Member] | BIG 3 [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding, Financial Guaranty Insurance | $ 6,255 | $ 4,383 |
Net Par Outstanding, Credit Derivative | 94 | 137 |
Net Par Outstanding | $ 6,349 | $ 4,520 |
Number of Risks, Financial Guaranty Insurance | risk | 150 | 148 |
Number of Risks, Credit Derivative | risk | 9 | 9 |
Number of Risks | risk | 159 | 157 |
Outstanding Exposure - Geograph
Outstanding Exposure - Geographic Distribution of Net Par Outstanding (Details) $ in Millions | Dec. 31, 2017USD ($)risk | Dec. 31, 2016USD ($) |
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 10,239 | |
Net Par Outstanding | $ 264,952 | $ 296,318 |
Percent of Total Net Par Outstanding | 100.00% | |
United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 10,029 | |
Net Par Outstanding | $ 220,616 | |
Percent of Total Net Par Outstanding | 83.30% | |
Puerto Rico [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding | $ 4,966 | 4,786 |
Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 210 | |
Net Par Outstanding | $ 44,336 | |
Percent of Total Net Par Outstanding | 16.70% | |
United Kingdom [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 126 | |
Net Par Outstanding | $ 30,062 | |
Percent of Total Net Par Outstanding | 11.30% | |
France [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 10 | |
Net Par Outstanding | $ 3,167 | |
Percent of Total Net Par Outstanding | 1.20% | |
Canada [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 9 | |
Net Par Outstanding | $ 2,690 | |
Percent of Total Net Par Outstanding | 1.00% | |
Australia [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 12 | |
Net Par Outstanding | $ 2,309 | |
Percent of Total Net Par Outstanding | 0.90% | |
Italy [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 9 | |
Net Par Outstanding | $ 1,497 | |
Percent of Total Net Par Outstanding | 0.60% | |
Other Countries [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 44 | |
Net Par Outstanding | $ 4,611 | |
Percent of Total Net Par Outstanding | 1.70% | |
Public Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding | $ 252,314 | 271,179 |
Public Finance [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 9,517 | |
Net Par Outstanding | $ 209,392 | 244,798 |
Percent of Total Net Par Outstanding | 79.10% | |
Public Finance [Member] | California [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 1,368 | |
Net Par Outstanding | $ 36,507 | |
Percent of Total Net Par Outstanding | 13.80% | |
Public Finance [Member] | Texas [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 1,229 | |
Net Par Outstanding | $ 19,027 | |
Percent of Total Net Par Outstanding | 7.20% | |
Public Finance [Member] | Pennsylvania [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 744 | |
Net Par Outstanding | $ 18,061 | |
Percent of Total Net Par Outstanding | 6.80% | |
Public Finance [Member] | Illinois [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 702 | |
Net Par Outstanding | $ 17,044 | |
Percent of Total Net Par Outstanding | 6.40% | |
Public Finance [Member] | New York [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 871 | |
Net Par Outstanding | $ 15,672 | |
Percent of Total Net Par Outstanding | 5.90% | |
Public Finance [Member] | New Jersey [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 444 | |
Net Par Outstanding | $ 12,441 | |
Percent of Total Net Par Outstanding | 4.70% | |
Public Finance [Member] | Florida [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 294 | |
Net Par Outstanding | $ 10,272 | |
Percent of Total Net Par Outstanding | 3.90% | |
Public Finance [Member] | Michigan [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 439 | |
Net Par Outstanding | $ 6,353 | |
Percent of Total Net Par Outstanding | 2.40% | |
Public Finance [Member] | Puerto Rico [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 18 | |
Net Par Outstanding | $ 4,968 | |
Percent of Total Net Par Outstanding | 1.90% | |
Public Finance [Member] | Alabama [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 296 | |
Net Par Outstanding | $ 4,808 | |
Percent of Total Net Par Outstanding | 1.80% | |
Public Finance [Member] | Other States and U.S. Territories [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 3,112 | |
Net Par Outstanding | $ 64,239 | |
Percent of Total Net Par Outstanding | 24.30% | |
Public Finance [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding | $ 42,922 | 26,381 |
Structured Finance [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding | $ 12,638 | 25,139 |
Structured Finance [Member] | United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Number of Risks | risk | 512 | |
Net Par Outstanding | $ 11,224 | 22,057 |
Percent of Total Net Par Outstanding | 4.20% | |
Structured Finance [Member] | Non United States [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Net Par Outstanding | $ 1,414 | $ 3,082 |
Outstanding Exposure - Puerto R
Outstanding Exposure - Puerto Rico Gross Par and Gross Debt Service Outstanding (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | $ 269,386 | $ 307,474 |
Gross Debt Service Outstanding | 408,492 | 455,000 |
Puerto Rico [Member] | ||
Schedule of Insured Financial Obligations [Line Items] | ||
Gross Par Outstanding | 5,186 | 5,435 |
Gross Debt Service Outstanding | $ 8,514 | $ 9,038 |
Outstanding Exposure - Puerto66
Outstanding Exposure - Puerto Rico Net Par Outstanding (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)judge | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Schedule of Insured Financial Obligations [Line Items] | |||
Increase (decrease) in net par outstanding | $ (5,107) | $ (28) | $ (855) |
Net par amount outstanding | $ 264,952 | 296,318 | |
Number of Federal Judges | judge | 5 | ||
PREPA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Commonwealth debt service, period | 6 years | ||
Expected repayments of debt, percent | 47.00% | ||
PRASA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Commonwealth debt service, period | 5 years | ||
Puerto Rico [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | $ 4,966 | 4,786 | |
Puerto Rico [Member] | Commonwealth of Puerto Rico - General Obligation Bonds [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Increase (decrease) in net par outstanding | 36 | ||
Puerto Rico [Member] | PRHTA (Highway revenue) [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Increase (decrease) in net par outstanding | 144 | ||
Puerto Rico [Member] | PREPA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Increase (decrease) in net par outstanding | 134 | ||
Puerto Rico [Member] | MFA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Increase (decrease) in net par outstanding | 75 | ||
Puerto Rico [Member] | Commutation of Previously Ceded Business [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Increase (decrease) in net par outstanding | 389 | ||
Constitutionally Guaranteed [Member] | Puerto Rico [Member] | Commonwealth of Puerto Rico - General Obligation Bonds [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 1,419 | 1,476 | |
Constitutionally Guaranteed [Member] | Puerto Rico [Member] | Puerto Rico Public Buildings Authority [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 141 | 169 | |
Public Corporations - Certain Revenues Potentially Subject to Clawback [Member] | Puerto Rico [Member] | PRHTA (Transportation revenue) [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 882 | 918 | |
Public Corporations - Certain Revenues Potentially Subject to Clawback [Member] | Puerto Rico [Member] | PRHTA (Highway revenue) [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 495 | 350 | |
Public Corporations - Certain Revenues Potentially Subject to Clawback [Member] | Puerto Rico [Member] | PRCCDA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 152 | 152 | |
Public Corporations - Certain Revenues Potentially Subject to Clawback [Member] | Puerto Rico [Member] | PRIFA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 18 | 18 | |
Other Public Corporations [Member] | Puerto Rico [Member] | PREPA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 853 | 724 | |
Other Public Corporations [Member] | Puerto Rico [Member] | PRASA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 373 | 373 | |
Other Public Corporations [Member] | Puerto Rico [Member] | MFA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 360 | 334 | |
Other Public Corporations [Member] | Puerto Rico [Member] | COFINA [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | 272 | 271 | |
Other Public Corporations [Member] | Puerto Rico [Member] | U of PR [Member] | |||
Schedule of Insured Financial Obligations [Line Items] | |||
Net par amount outstanding | $ 1 | $ 1 |
Outstanding Exposure - Amortiza
Outstanding Exposure - Amortization Schedule of Puerto Rico BIG Net Par Outstanding and BIG Net Debt Service Outstanding (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Estimated BIG Net Par Amortization [Abstract] | ||
Net Par Outstanding | $ 264,952 | $ 296,318 |
Estimated BIG Net Debt Service Amortization [Abstract] | ||
Total | 401,118 | 437,535 |
Puerto Rico [Member] | ||
Estimated BIG Net Par Amortization [Abstract] | ||
2018 (January 1 - March 31) | 0 | |
2018 (April 1 - June 30) | 0 | |
2018 (July 1 - September 30) | 200 | |
2018 (October 1 - December 31) | 0 | |
Subtotal 2,018 | 200 | |
2,019 | 223 | |
2,020 | 285 | |
2,021 | 147 | |
2,022 | 137 | |
2023-2027 | 1,229 | |
2028-2032 | 812 | |
2033-2037 | 1,217 | |
2038-2042 | 453 | |
2043-2047 | 263 | |
Net Par Outstanding | 4,966 | $ 4,786 |
Estimated BIG Net Debt Service Amortization [Abstract] | ||
2018 (January 1 - March 31) | 123 | |
2018 (April 1 - June 30) | 3 | |
2018 (July 1 - September 30) | 322 | |
2018 (October 1 - December 31) | 3 | |
Subtotal 2,018 | 451 | |
2,019 | 464 | |
2,020 | 516 | |
2,021 | 364 | |
2,022 | 345 | |
2023-2027 | 2,129 | |
2028-2032 | 1,436 | |
2033-2037 | 1,572 | |
2038-2042 | 602 | |
2043-2047 | 316 | |
Total | $ 8,195 |
Outstanding Exposure - Narrativ
Outstanding Exposure - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2017 | Feb. 23, 2018 | Feb. 12, 2018 | Dec. 31, 2016 | Sep. 15, 2015 | |
Schedule of Insured Financial Obligations [Line Items] | |||||
Net debt service outstanding | $ 401,118,000,000 | $ 437,535,000,000 | |||
Net Par Outstanding | 264,952,000,000 | 296,318,000,000 | |||
Excess Of Loss Reinsurance [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net debt service outstanding | 675,000,000 | 390,000,000 | |||
3721 Aircraft [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net debt service outstanding | 140,000,000 | ||||
Structured Finance [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net debt service outstanding | 15,026,000,000 | 28,088,000,000 | |||
Net Par Outstanding | 12,638,000,000 | 25,139,000,000 | |||
Public Finance [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net debt service outstanding | 386,092,000,000 | 409,447,000,000 | |||
Net Par Outstanding | $ 252,314,000,000 | 271,179,000,000 | |||
BIG [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Maximum period of liquidity claims (in years) | 1 year | ||||
Loss mitigation securities held in investment portfolios excluding from net par | $ 2,000,000,000 | 2,100,000,000 | |||
Net Par Outstanding | 12,238,000,000 | 13,074,000,000 | |||
BIG [Member] | Structured Finance [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 3,367,000,000 | 4,352,000,000 | |||
BIG [Member] | Public Finance [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 8,871,000,000 | 8,722,000,000 | |||
Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net debt service outstanding | 8,195,000,000 | ||||
Net Par Outstanding | 4,966,000,000 | 4,786,000,000 | |||
Puerto Rico [Member] | Public Finance [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 4,968,000,000 | ||||
Puerto Rico [Member] | BIG [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 5,000,000,000 | ||||
VIRGIN ISLANDS, US | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 498,000,000 | ||||
VIRGIN ISLANDS, US | BIG [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 224,000,000 | ||||
VIRGIN ISLANDS, US | Internal Investment Grade [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | $ 274,000,000 | ||||
Minimum [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Constant discount rate (as a percent) | 4.00% | ||||
Probability of paying more claims than being reimbursed (as a percent) | 50.00% | ||||
Maximum [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Constant discount rate (as a percent) | 4.50% | ||||
Maximum [Member] | Excess Of Loss Reinsurance [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net debt service outstanding | $ 1,000,000,000 | ||||
PRHTA (Highway revenue) [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Insured Financial Obligations, Secured By Pledges | 120,000,000 | ||||
U.S. Justice Department and U.S. Environmental Protection Agency [Member] | PRASA [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Settlement agreement, required spending threshold | $ 1,600,000,000 | ||||
Constitutionally Guaranteed [Member] | Commonwealth of Puerto Rico - General Obligation Bonds [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 1,419,000,000 | 1,476,000,000 | |||
Constitutionally Guaranteed [Member] | Puerto Rico Public Buildings Authority [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 141,000,000 | 169,000,000 | |||
Public Corporations - Certain Revenues Potentially Subject to Clawback [Member] | PRHTA (Transportation revenue) [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 882,000,000 | 918,000,000 | |||
Public Corporations - Certain Revenues Potentially Subject to Clawback [Member] | PRHTA (Highway revenue) [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 495,000,000 | 350,000,000 | |||
Public Corporations - Certain Revenues Potentially Subject to Clawback [Member] | PRCCDA [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 152,000,000 | 152,000,000 | |||
Public Corporations - Certain Revenues Potentially Subject to Clawback [Member] | PRIFA [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 18,000,000 | 18,000,000 | |||
Other Public Corporations [Member] | PREPA [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 853,000,000 | 724,000,000 | |||
Other Public Corporations [Member] | Puerto Rico Municipal Finance Authority [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 360,000,000 | 334,000,000 | |||
Other Public Corporations [Member] | PRASA [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 373,000,000 | 373,000,000 | |||
Other Public Corporations [Member] | COFINA [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | 272,000,000 | 271,000,000 | |||
Other Public Corporations [Member] | U of PR [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Net Par Outstanding | $ 1,000,000 | $ 1,000,000 | |||
Subsequent Event [Member] | Commitment to Provide Guarantees [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Outstanding commitments to provide guaranties | $ 69,000,000 | ||||
Subsequent Event [Member] | Constitutionally Guaranteed [Member] | Commonwealth of Puerto Rico - General Obligation Bonds [Member] | Puerto Rico [Member] | |||||
Schedule of Insured Financial Obligations [Line Items] | |||||
Fiscal Plan, Commonwealth Contractual Debt Service | $ 17,500,000,000 | ||||
Insured Financial Obligations, Fiscal Plan Budget Surplus | $ 2,800,000,000 |
Expected Loss to be Paid - Net
Expected Loss to be Paid - Net Expected Loss to be Paid After Recoveries for Breaches of R&W (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Present Value of Net Expected Loss and Loss Adjustment Expenses to be Paid [Roll Forward] | ||
Beginning of Period, Net Expected Loss To Be Paid After Recoveries of R&W | $ 1,198 | $ 1,391 |
Net expected loss to be paid | 21 | 22 |
Total economic loss development (benefit) | 313 | 139 |
Accretion of discount | 33 | 26 |
Changes in discount rates | 25 | (15) |
Changes in timing and assumptions | 255 | 128 |
(Paid) Recovered Losses After Recoveries for R&W | (229) | (354) |
End of Period, Net Expected Loss To Be Paid After Recoveries of R&W | $ 1,303 | 1,198 |
Period after the end of the reporting period within which the ceded paid losses are typically settled (in days) | 45 days | |
Loss and LAE Reserve paid | $ 24 | 16 |
Expected LAE to be paid | 23 | 12 |
Public Finance [Member] | ||
Present Value of Net Expected Loss and Loss Adjustment Expenses to be Paid [Roll Forward] | ||
Beginning of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 904 | 809 |
Net expected loss to be paid | 13 | 42 |
Total economic loss development (benefit) | 549 | 269 |
(Paid) Recovered Losses After Recoveries for R&W | (263) | (216) |
End of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 1,203 | 904 |
Public Finance [Member] | United States [Member] | ||
Present Value of Net Expected Loss and Loss Adjustment Expenses to be Paid [Roll Forward] | ||
Beginning of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 871 | 771 |
Net expected loss to be paid | 0 | 40 |
Total economic loss development (benefit) | 554 | 276 |
(Paid) Recovered Losses After Recoveries for R&W | (268) | (216) |
End of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 1,157 | 871 |
Public Finance [Member] | Non United States [Member] | ||
Present Value of Net Expected Loss and Loss Adjustment Expenses to be Paid [Roll Forward] | ||
Beginning of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 33 | 38 |
Net expected loss to be paid | 13 | 2 |
Total economic loss development (benefit) | (5) | (7) |
(Paid) Recovered Losses After Recoveries for R&W | 5 | 0 |
End of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 46 | 33 |
Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||
Present Value of Net Expected Loss and Loss Adjustment Expenses to be Paid [Roll Forward] | ||
Beginning of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 206 | 409 |
Net expected loss to be paid | 0 | (22) |
Total economic loss development (benefit) | (181) | (91) |
(Paid) Recovered Losses After Recoveries for R&W | 48 | (90) |
End of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 73 | 206 |
Other structured finance [Member] | ||
Present Value of Net Expected Loss and Loss Adjustment Expenses to be Paid [Roll Forward] | ||
Beginning of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 88 | 173 |
Net expected loss to be paid | 8 | 2 |
Total economic loss development (benefit) | (55) | (39) |
(Paid) Recovered Losses After Recoveries for R&W | (14) | (48) |
End of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 27 | 88 |
Structured Finance [Member] | ||
Present Value of Net Expected Loss and Loss Adjustment Expenses to be Paid [Roll Forward] | ||
Beginning of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 294 | 582 |
Net expected loss to be paid | 8 | (20) |
Total economic loss development (benefit) | (236) | (130) |
(Paid) Recovered Losses After Recoveries for R&W | 34 | (138) |
End of Period, Net Expected Loss To Be Paid After Recoveries of R&W | 100 | 294 |
MBIA UK [Member] | ||
Present Value of Net Expected Loss and Loss Adjustment Expenses to be Paid [Roll Forward] | ||
Net expected loss to be paid | 21 | 0 |
CIFG Holding Inc. [Member] | ||
Present Value of Net Expected Loss and Loss Adjustment Expenses to be Paid [Roll Forward] | ||
Net expected loss to be paid | $ 0 | $ 22 |
Expected Loss to be Paid - Ne70
Expected Loss to be Paid - Net Expected Loss to be Paid (Recovered) and Net Economic Loss Development (Benefit) by Accounting Model (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Expected Losses to be Paid [Line Items] | |||
Net expected loss to be paid (recovered) after recoveries for R&W | $ 1,303 | $ 1,198 | $ 1,391 |
Total economic loss development (benefit) | 313 | 139 | |
Financial Guarantee Accounted for as Insurance Contracts [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Net expected loss to be paid (recovered) after recoveries for R&W | 1,226 | 1,083 | |
Total economic loss development (benefit) | 353 | 164 | |
Financial Guarantee Variable Interest Entities And Other [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Net expected loss to be paid (recovered) after recoveries for R&W | 91 | 105 | |
Total economic loss development (benefit) | (6) | (8) | |
Financial Guarantee Accounted for as Credit Derivatives [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Net expected loss to be paid (recovered) after recoveries for R&W | (14) | 10 | |
Total economic loss development (benefit) | $ (34) | $ (17) |
Expected Loss to be Paid - Liqu
Expected Loss to be Paid - Liquidation Rates and Key Assumptions in Base Case Expected Loss First Lien RMBS (Details) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Delinquent/Modified in Previous 12 Months [Member] | Alt-A and Prime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 20.00% | 25.00% | 25.00% |
Financing Receivable, Delinquent/Modified in Previous 12 Months [Member] | Option ARM [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 20.00% | 25.00% | 25.00% |
Financing Receivable, Delinquent/Modified in Previous 12 Months [Member] | Subprime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 20.00% | 25.00% | 25.00% |
Financing Receivables, 30 to 59 Days Past Due [Member] | Alt-A and Prime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 30.00% | 35.00% | 35.00% |
Financing Receivables, 30 to 59 Days Past Due [Member] | Option ARM [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 35.00% | 35.00% | 40.00% |
Financing Receivables, 30 to 59 Days Past Due [Member] | Subprime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 40.00% | 40.00% | 45.00% |
Financing Receivables, 60 to 89 Days Past Due [Member] | Alt-A and Prime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 40.00% | 45.00% | 45.00% |
Financing Receivables, 60 to 89 Days Past Due [Member] | Option ARM [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 50.00% | 50.00% | 50.00% |
Financing Receivables, 60 to 89 Days Past Due [Member] | Subprime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 50.00% | 50.00% | 55.00% |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Alt-A and Prime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 55.00% | 55.00% | 55.00% |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Option ARM [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 60.00% | 55.00% | 60.00% |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Subprime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 55.00% | 55.00% | 60.00% |
Financing Receivables, Bankruptcy [Member] | Alt-A and Prime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 45.00% | 45.00% | 45.00% |
Financing Receivables, Bankruptcy [Member] | Option ARM [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 50.00% | 50.00% | 50.00% |
Financing Receivables, Bankruptcy [Member] | Subprime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 40.00% | 40.00% | 40.00% |
Financing Receivable, Foreclosure [Member] | Alt-A and Prime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 65.00% | 65.00% | 65.00% |
Financing Receivable, Foreclosure [Member] | Option ARM [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 70.00% | 65.00% | 70.00% |
Financing Receivable, Foreclosure [Member] | Subprime [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 65.00% | 65.00% | 70.00% |
Financing Receivable, Real Estate Owned [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Liquidation Rate | 100.00% | 100.00% | 100.00% |
United States [Member] | Alt-A [Member] | 2005 and prior [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Initial loss severity | 60.00% | 60.00% | 60.00% |
United States [Member] | Alt-A [Member] | 2006 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Initial loss severity | 80.00% | 80.00% | 70.00% |
United States [Member] | Alt-A [Member] | 2007 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Initial loss severity | 70.00% | 70.00% | 65.00% |
United States [Member] | Alt-A [Member] | Minimum [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 1.30% | 1.00% | 1.70% |
Final CDR | 0.10% | 0.00% | 0.10% |
United States [Member] | Alt-A [Member] | Maximum [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 9.80% | 13.50% | 26.40% |
Final CDR | 0.50% | 0.70% | 1.30% |
United States [Member] | Alt-A [Member] | Weighted Average [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 5.20% | 5.70% | 6.40% |
Final CDR | 0.30% | 0.30% | 0.30% |
United States [Member] | Option ARM [Member] | 2005 and prior [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Initial loss severity | 60.00% | 60.00% | 60.00% |
United States [Member] | Option ARM [Member] | 2006 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Initial loss severity | 70.00% | 70.00% | 70.00% |
United States [Member] | Option ARM [Member] | 2007 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Initial loss severity | 75.00% | 75.00% | 65.00% |
United States [Member] | Option ARM [Member] | Minimum [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 2.50% | 3.20% | 3.50% |
Final CDR | 0.10% | 0.20% | 0.20% |
United States [Member] | Option ARM [Member] | Maximum [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 7.00% | 7.00% | 10.30% |
Final CDR | 0.30% | 0.30% | 0.50% |
United States [Member] | Option ARM [Member] | Weighted Average [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 5.90% | 5.60% | 7.80% |
Final CDR | 0.30% | 0.30% | 0.40% |
United States [Member] | Subprime [Member] | 2005 and prior [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Initial loss severity | 80.00% | 80.00% | 75.00% |
United States [Member] | Subprime [Member] | 2006 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Initial loss severity | 90.00% | 90.00% | 90.00% |
United States [Member] | Subprime [Member] | 2007 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Initial loss severity | 95.00% | 90.00% | 90.00% |
United States [Member] | Subprime [Member] | Minimum [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 3.50% | 2.80% | 4.70% |
Final CDR | 0.20% | 0.10% | 0.20% |
United States [Member] | Subprime [Member] | Maximum [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 13.10% | 14.10% | 13.20% |
Final CDR | 0.70% | 0.70% | 0.70% |
United States [Member] | Subprime [Member] | Weighted Average [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 7.80% | 8.10% | 9.50% |
Final CDR | 0.40% | 0.40% | 0.40% |
Expected Loss to be Paid - Key
Expected Loss to be Paid - Key Assumptions in Base Case Expected Loss (Details) - Residential Mortgage-Backed Securities (RMBS) [Member] - United States [Member] - Home equity lines of credit (HELOCs) [Member] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Expected Losses to be Paid [Line Items] | |||
Loss severity | 98.00% | 98.00% | 98.00% |
Minimum [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 2.70% | 3.50% | 4.90% |
Final CDR trended down to | 2.50% | 0.50% | 0.50% |
Maximum [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 19.90% | 24.80% | 23.50% |
Final CDR trended down to | 3.20% | 3.20% | 3.20% |
Weighted Average [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Plateau CDR | 11.40% | 13.60% | 10.30% |
Final CDR trended down to | 2.50% | 1.30% | 1.20% |
Financing Receivable, Modified in Previous 12 Months [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Insured Financial Obligations, Projected Loss Assumptions, Liquidation Rate | 20.00% | 25.00% | 25.00% |
Financing Receivables, 30 to 59 Days Past Due [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Insured Financial Obligations, Projected Loss Assumptions, Liquidation Rate | 45.00% | 50.00% | 50.00% |
Financing Receivables, 60 to 89 Days Past Due [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Insured Financial Obligations, Projected Loss Assumptions, Liquidation Rate | 60.00% | 65.00% | 65.00% |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Insured Financial Obligations, Projected Loss Assumptions, Liquidation Rate | 75.00% | 80.00% | 75.00% |
Financing Receivables, Bankruptcy [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Insured Financial Obligations, Projected Loss Assumptions, Liquidation Rate | 55.00% | 55.00% | 55.00% |
Financing Receivable, Foreclosure [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Insured Financial Obligations, Projected Loss Assumptions, Liquidation Rate | 70.00% | 75.00% | 75.00% |
Financing Receivable, Real Estate Owned [Member] | |||
Schedule of Expected Losses to be Paid [Line Items] | |||
Insured Financial Obligations, Projected Loss Assumptions, Liquidation Rate | 100.00% | 100.00% | 100.00% |
Expected Loss to be Paid - Narr
Expected Loss to be Paid - Narrative (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017USD ($)CurvePaymentscenario | Dec. 31, 2016USD ($)scenario | Jan. 31, 2017USD ($) | Dec. 31, 2015USD ($) | Nov. 26, 2012USD ($) | Feb. 05, 2009 | |
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Period of insured credit performance of guaranteed obligations (in some cases over) | 30 years | |||||
Discount factor (as a percent) | 2.38% | 2.73% | ||||
Net par amount outstanding | $ 264,952 | $ 296,318 | ||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | 1,303 | 1,198 | $ 1,391 | |||
Net expected loss to be paid | 21 | 22 | ||||
Total economic loss development (benefit) | $ (313) | $ (139) | ||||
Liquidation rate review period | 12 months | |||||
Minimum [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Risk free discount rate | 0.00% | 0.00% | ||||
Liquidation rates assumed | 25.00% | |||||
Maximum [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Risk free discount rate | 2.78% | 3.23% | ||||
Liquidation rates assumed | 100.00% | |||||
United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | $ 220,616 | |||||
Puerto Rico [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | $ 4,966 | $ 4,786 | ||||
Non United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Percent of total non-U.S. net expected losses to paid | 3.70% | 2.80% | ||||
Net par amount outstanding | $ 44,336 | |||||
Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 4,818 | $ 5,637 | ||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | 73 | 206 | 409 | |||
Net expected loss to be paid | 0 | (22) | ||||
Total economic loss development (benefit) | $ 181 | 91 | ||||
Maximum number of payments behind to be considered performing borrower | Payment | 1 | |||||
Expected future recoverable (payable) for breached representations and warranties | $ 117 | (6) | ||||
Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | Minimum [Member] | Home equity lines of credit (HELOCs) [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Final CPR | 2.50% | |||||
Triple-X Life Insurance Transaction [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | $ 1,199 | 2,057 | ||||
Home equity lines of credit (HELOCs) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Initial period for which borrower can pay only interest payments | 10 years | |||||
Loan Modification, Extended Period for Which Borrower Can Pay Only Interest Payments | 5 years | |||||
Student Loan [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | $ 1,400 | |||||
Public Finance [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 252,314 | 271,179 | ||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | 1,203 | 904 | 809 | |||
Net expected loss to be paid | 13 | 42 | ||||
Total economic loss development (benefit) | (549) | (269) | ||||
Public Finance [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 209,392 | 244,798 | ||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | 1,157 | 871 | 771 | |||
Net expected loss to be paid | 0 | 40 | ||||
Total economic loss development (benefit) | (554) | (276) | ||||
Public Finance [Member] | Puerto Rico [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 4,968 | |||||
Total economic loss development (benefit) | (554) | |||||
Public Finance [Member] | City of Hartford, Connecticut [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 341 | |||||
Public Finance [Member] | Non United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 42,922 | 26,381 | ||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | 46 | 33 | 38 | |||
Net expected loss to be paid | 13 | 2 | ||||
Total economic loss development (benefit) | 5 | 7 | ||||
Public Finance Stockton General Fund [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 113 | |||||
Non-Infrastructure Public Finance [Member] | Spain [Member] | Sovereign and Sub Sovereign [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 461 | |||||
Non-Infrastructure Public Finance [Member] | Portugal [Member] | Sovereign and Sub Sovereign [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 74 | |||||
Other structured finance [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 5,272 | 15,553 | ||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | 27 | 88 | $ 173 | |||
Net expected loss to be paid | 8 | 2 | ||||
Total economic loss development (benefit) | 55 | 39 | ||||
BIG [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 12,238 | 13,074 | ||||
BIG [Member] | Puerto Rico [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 5,000 | |||||
BIG [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 2,761 | 3,151 | ||||
BIG [Member] | Triple-X Life Insurance Transaction [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 85 | 126 | ||||
BIG [Member] | Student Loan [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 114 | |||||
BIG [Member] | Public Finance [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 8,871 | 8,722 | ||||
BIG [Member] | Public Finance [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 7,140 | 7,380 | ||||
BIG [Member] | Public Finance [Member] | City of Hartford, Connecticut [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 339 | |||||
BIG [Member] | Public Finance [Member] | Non United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 1,731 | 1,342 | ||||
BIG [Member] | Non-Infrastructure Public Finance [Member] | Hungary [Member] | Sovereign and Sub Sovereign [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 218 | |||||
BIG [Member] | Other structured finance [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 360 | 645 | ||||
First Lien [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | 123 | 119 | ||||
Total economic loss development (benefit) | $ (1) | 68 | ||||
Number of delinquent payments | Payment | 2 | |||||
Projected loss assumptions, CDR, plateau rate, projection period | 36 months | |||||
Projected loss assumptions, Final CDR, Period for voluntary prepayments to continue | 12 months | |||||
Intermediate conditional default rate (as a percent) | 5.00% | |||||
Number of scenarios weighted in estimating expected losses | scenario | 5 | |||||
First Lien [Member] | Base Scenario [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Projected loss assumptions, CDR, plateau rate, projection period | 36 months | |||||
Period from plateau to intermediate conditional default rate (in months) | 12 months | |||||
Intermediate conditional default rate as a percentage of plateau conditional default rate | 20.00% | |||||
Period of constant intermediate conditional default rate (in months) | 36 months | |||||
Final conditional default rate as a percentage of plateau conditional default rate | 5.00% | |||||
Projected loss assumptions, Final CDR, Period for voluntary prepayments to continue | 5 years 6 months | |||||
Period for which estimated defaults are attributed to loans currently delinquent or in foreclosure | 36 months | |||||
Projected loss assumptions, loss severity, subsequent period | 18 months | |||||
Estimated loss severity rate, one through six months (as a percent) | 18 months | |||||
Loss severity (as a percent) | 40.00% | |||||
Projected loss assumptions, period to reach final loss severity rate | 2 years 6 months | |||||
Current conditional prepayment rate used in alternate scenario for loss estimate (as a percent) | 15.00% | |||||
First Lien [Member] | More Stressful Environment [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Period from plateau to intermediate conditional default rate (in months) | 15 months | |||||
Projected loss assumptions, period to reach final loss severity rate | 9 years | |||||
Projected loss assumptions, increase (decrease) in expected loss to be paid, net | $ 71 | |||||
First Lien [Member] | Least Stressful Environment [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Projected loss assumptions, CDR, plateau rate, projection period | 30 months | |||||
Period from plateau to intermediate conditional default rate (in months) | 9 months | |||||
Projected loss assumptions, increase (decrease) in expected loss to be paid, net | $ 51 | |||||
Decrease in the plateau period used to calculate potential change in loss estimate (in months) | 6 months | |||||
Second Lien [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | $ 50 | 87 | ||||
Total economic loss development (benefit) | $ 182 | $ 23 | ||||
Period from plateau to intermediate conditional default rate (in months) | 28 months | 28 months | ||||
Number of scenarios weighted in estimating expected losses | scenario | 5 | 5 | ||||
Period of loan default estimate | 6 months | |||||
Number of preceding months average liquidation rates used to estimate loan default rate | 6 months | |||||
Monthly delinquency, threshold period | 6 months | 6 months | ||||
Period of consistent CDR | 6 months | |||||
Stress period (in months) | 34 months | 34 months | ||||
Loss recovery assumption | 2.00% | |||||
Final CPR | 15.00% | |||||
Number of conditional default rate curves modeled in estimating losses | Curve | 5 | |||||
Second Lien [Member] | Base Scenario [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Period from plateau to intermediate conditional default rate (in months) | 28 months | |||||
Stress period (in months) | 34 months | |||||
Period of constant conditional default rate (in months) | 6 months | |||||
Second Lien [Member] | Base Scenario One [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Projected loss assumptions, CDR, plateau rate, projection period | 8 months | |||||
Period from plateau to intermediate conditional default rate (in months) | 31 months | |||||
Stress period (in months) | 39 months | |||||
Increase in conditional default rate ramp down period | 3 months | |||||
Second Lien [Member] | Base Scenario One [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | Home equity lines of credit (HELOCs) [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Change in estimate for increased conditional default rate plateau period | $ 12 | |||||
Second Lien [Member] | Based Scenario Two [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Stress period (in months) | 29 months | |||||
Period of constant conditional default rate (in months) | 4 months | |||||
Ultimate prepayment rate | 10.00% | |||||
Decreased conditional default rate ramp down period | 25 months | |||||
Second Lien [Member] | Based Scenario Two [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | Home equity lines of credit (HELOCs) [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Change in estimate for decreased conditional default rate ramp down period | $ 14 | |||||
Financial Guarantee Accounted for as Credit Derivatives [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | (14) | $ 10 | ||||
Total economic loss development (benefit) | 34 | 17 | ||||
Southern District of Mississippi Vs Madison County, Mississippi [Member] | Parkway East [Member] | Public Finance [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | $ 19 | |||||
Remaining principle amount after tender offer | 2 years | |||||
MBIA UK [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net expected loss to be paid | $ 21 | 0 | ||||
MBIA UK [Member] | Europe [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net par amount outstanding | 222 | |||||
MBIA UK [Member] | Public Finance [Member] | Non United States [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | $ 13 | |||||
CIFG Holding Inc. [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Net expected loss to be paid | $ 0 | $ 22 | ||||
ACA 2005-2 Collateralized Debt Obligations [Member] | Credit Default Swap [Member] | CIFG Holding Inc. [Member] | CIFG Holdings Inc. vs JP Morgan Securities LLC [Member] | Financial Guarantee Accounted for as Credit Derivatives [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | $ 400 | |||||
Libertas II Collateralized Debt Obligations [Member] | Credit Default Swap [Member] | CIFG Holding Inc. [Member] | CIFG Holdings Inc. vs JP Morgan Securities LLC [Member] | Financial Guarantee Accounted for as Credit Derivatives [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Liability for unpaid claims and claims adjustment expense, net largest single loss | $ 325 | |||||
Pending Litigation [Member] | CIFG Holding Inc. Vs. GreenPoint Mortgage Funding, Inc. [Member] | ||||||
Schedule of Expected Losses to be Paid [Line Items] | ||||||
Percentage of total principal related to HELOCs | 95.00% | |||||
Percentage of total principal related to close-end seconds | 5.00% |
Contracts Accounted for as In74
Contracts Accounted for as Insurance - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Guarantor Obligations [Line Items] | ||
Weighted average risk-free rates for U.S. dollar denominated financial guaranty insurance obligations | 2.39% | 2.74% |
Net par amount outstanding | $ 264,952 | $ 296,318 |
Variable Rate Demand Obligation [Member] | ||
Guarantor Obligations [Line Items] | ||
Rate basis for bank bond rate | prime rate | |
Bonds held by bank, minimum installment payment period | 5 years | |
Minimum [Member] | ||
Guarantor Obligations [Line Items] | ||
Financial Guarantee Insurance Contracts, Claim Liability, Risk Free Discount Rate | 0.00% | 0.00% |
Minimum [Member] | Variable Rate Demand Obligation [Member] | ||
Guarantor Obligations [Line Items] | ||
Bank bond rate (as a percent) | 2.00% | |
Threshold period of bonds held by bank for right of accelerated repayment (in days) | 90 days | |
Maximum [Member] | ||
Guarantor Obligations [Line Items] | ||
Financial Guarantee Insurance Contracts, Claim Liability, Risk Free Discount Rate | 2.78% | 3.23% |
Maximum [Member] | Variable Rate Demand Obligation [Member] | ||
Guarantor Obligations [Line Items] | ||
Bank bond rate (as a percent) | 3.00% | |
Bank bond capped rate (as a percent) | 25.00% | |
Threshold period of bonds held by bank for right of accelerated repayment (in days) | 180 days | |
Termination of Swap Obligation due to Rating Downgrade [Member] | Maximum [Member] | AGM [Member] | ||
Guarantor Obligations [Line Items] | ||
Increase in losses as a result of an adverse outcome, minimum | $ 133 | |
Termination of Swap Obligation due to Further Rating Downgrade [Member] | Maximum [Member] | AGM [Member] | ||
Guarantor Obligations [Line Items] | ||
Increase in losses as a result of an adverse outcome, minimum | 260 | |
Variable Rate Demand Obligation [Member] | AGM and AGC [Member] | ||
Guarantor Obligations [Line Items] | ||
Net par amount outstanding | 3,700 | |
Internal Credit, B Minus Rating [Member] | Variable Rate Demand Obligation [Member] | AGM and AGC [Member] | ||
Guarantor Obligations [Line Items] | ||
Net par amount outstanding | $ 100 | |
Foreign Currency Concentration Risk [Member] | Premiums Receivable [Member] | ||
Guarantor Obligations [Line Items] | ||
Percentage of installment premiums denominated in currencies other than the U.S. dollar | 72.00% | 50.00% |
Contracts Accounted for as In75
Contracts Accounted for as Insurance - Net Earned Premiums (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Financial Guarantee Insurance Premiums [Line Items] | |||||||||||
Scheduled net earned premiums | $ 385 | $ 381 | $ 416 | ||||||||
Accelerations | |||||||||||
Refundings | 269 | 390 | 294 | ||||||||
Terminations | 17 | 79 | 37 | ||||||||
Total Accelerations | 286 | 469 | 331 | ||||||||
Accretion of discount on net premiums receivable | 17 | 14 | 17 | ||||||||
Financial guaranty insurance net earned premiums | 688 | 864 | 764 | ||||||||
Other | 2 | 0 | 2 | ||||||||
Net | $ 178 | $ 186 | $ 162 | $ 164 | $ 236 | $ 231 | $ 214 | $ 183 | 690 | 864 | 766 |
Variable Interest Entity, Primary Beneficiary [Member] | |||||||||||
Accelerations | |||||||||||
Net | $ 15 | $ 16 | $ 21 |
Contracts Accounted for as In76
Contracts Accounted for as Insurance - Gross Premium Receivable Net of Commissions on Assumed Business Roll Forward (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Gross Premium Receivable Net of Ceding Commissions [Roll Forward] | |||
Beginning of period | $ 576 | $ 693 | $ 729 |
Premiums receivable from acquisitions (see Note 2) | 270 | 18 | 2 |
Gross written premiums on new business, net of commissions | 301 | 193 | 198 |
Gross premiums received, net of commissions | (301) | (258) | (206) |
Adjustments: | |||
Changes in the expected term | (8) | (38) | (19) |
Accretion of discount, net of commissions on assumed business | 12 | 9 | 18 |
Foreign exchange translation | 64 | (41) | (25) |
Consolidation/deconsolidation of FG VIEs | 0 | 0 | (4) |
Subtotal | 914 | 576 | 693 |
Other | 1 | 0 | 0 |
End of period | 915 | 576 | 693 |
Variable Interest Entity, Primary Beneficiary [Member] | |||
Gross Premium Receivable Net of Ceding Commissions [Roll Forward] | |||
Beginning of period | 11 | 17 | |
Adjustments: | |||
End of period | $ 10 | $ 11 | $ 17 |
Contracts Accounted for as In77
Contracts Accounted for as Insurance - Expected Collections of Gross Premiums Receivable Net of Commissions on Assumed Business (Details) $ in Millions | Dec. 31, 2017USD ($) |
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |
Financial Guarantee Insurance Premiums [Line Items] | |
2018 (January 1 – March 31) | $ 38 |
2018 (April 1 – June 30) | 31 |
2018 (July 1 – September 30) | 22 |
2018 (October 1 – December 31) | 18 |
2,019 | 82 |
2,020 | 78 |
2,021 | 77 |
2,022 | 70 |
2023-2027 | 289 |
2028-2032 | 193 |
2033-2037 | 106 |
After 2,037 | 105 |
Total | 1,109 |
Variable Interest Entity, Primary Beneficiary [Member] | |
Financial Guarantee Insurance Premiums [Line Items] | |
Cash collections on FG VIEs | $ 12 |
Contracts Accounted for as In78
Contracts Accounted for as Insurance - Scheduled Net Earned Premiums Insurance Contracts (Details) $ in Millions | Dec. 31, 2017USD ($) |
Financial Guarantee Insurance Premiums [Line Items] | |
Other deferred premium revenue | $ 9 |
Prepaid losses related to VIE's | 17 |
Financial Guarantee Insurance Product Line [Member] | |
Financial Guarantee Insurance Premiums [Line Items] | |
2018 (January 1 – March 31) | 89 |
2018 (April 1 – June 30) | 88 |
2018 (July 1 – September 30) | 84 |
2018 (October 1 – December 31) | 82 |
Subtotal 2,018 | 343 |
2,019 | 295 |
2,020 | 266 |
2,021 | 244 |
2,022 | 223 |
2023-2027 | 866 |
2028-2032 | 565 |
2033-2037 | 324 |
After 2,037 | 281 |
Net deferred premium revenue | 3,407 |
Future accretion | 188 |
Total future net earned premiums | 3,595 |
Variable Interest Entity, Primary Beneficiary [Member] | |
Financial Guarantee Insurance Premiums [Line Items] | |
Net deferred premium revenue | $ 76 |
Contracts Accounted for as In79
Contracts Accounted for as Insurance - Selected Information for Policies Paid In Installments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Financial Guarantee Insurance Premiums [Line Items] | ||||
Premiums receivable, net of commission payable | $ 915 | $ 576 | $ 693 | $ 729 |
Financial Guarantee Policies Paid in Installments [Member] | ||||
Financial Guarantee Insurance Premiums [Line Items] | ||||
Premiums receivable, net of commission payable | 914 | 576 | ||
Gross deferred premium revenue | $ 1,205 | $ 1,041 | ||
Weighted-average risk-free rate used to discount premiums (as a percent) | 2.30% | 3.00% | ||
Weighted-average period of premiums receivable (in years) | 9 years 2 months 24 days | 9 years 1 month 24 days |
Contracts Accounted for as In80
Contracts Accounted for as Insurance - Deferred Acquisition Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |||
Beginning of period | $ 106 | $ 114 | $ 121 |
DAC adjustments related to Radian Asset Acquisition on April 1, 2015 | (2) | 0 | 1 |
Costs deferred during the period: | |||
Commissions on assumed and ceded business | 0 | (2) | (1) |
Premium taxes | 5 | 4 | 2 |
Compensation and other acquisition costs | 11 | 9 | 11 |
Total | 16 | 11 | 12 |
Costs amortized during the period | (19) | (19) | (20) |
End of period | $ 101 | $ 106 | $ 114 |
Contracts Accounted for as In81
Contracts Accounted for as Insurance - Loss and LAE Reserve and Salvage and Subrogation Recoverable Net of Reinsurance (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | $ 844 | $ 700 |
Financial Guarantee Insurance And Other Product Line [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | (55) | (64) |
Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | 899 | 764 |
Public Finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | 922 | 646 |
Other structured finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | 40 | 96 |
Structured Finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | (19) | 117 |
Financial Guarantee [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | 903 | 763 |
Other [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | (4) | 1 |
United States [Member] | Public Finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | 901 | 625 |
United States [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | (59) | 21 |
Non United States [Member] | Public Finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | ||
Total | $ 21 | $ 21 |
Contracts Accounted for as In82
Contracts Accounted for as Insurance - Components of Net Reserves (Salvage) Insurance Contracts (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Insurance [Abstract] | ||
Loss and LAE reserve | $ 1,444 | $ 1,127 |
Reinsurance recoverable on unpaid losses | (44) | (80) |
Loss and LAE reserve, net | 1,400 | 1,047 |
Salvage and subrogation recoverable | (572) | (365) |
Salvage and subrogation payable | 20 | 17 |
Other payable (recoverable) | (4) | 1 |
Salvage and subrogation recoverable, net, and other recoverable | (556) | (347) |
Net reserves (salvage) | $ 844 | $ 700 |
Contracts Accounted for as In83
Contracts Accounted for as Insurance - Reconciliation of Net Expected Loss to be Paid and Expensed (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Guarantor Obligations [Line Items] | |||
Net expected loss to be paid (recovered) after recoveries for R&W | $ (1,303) | $ (1,198) | $ (1,391) |
Loss and LAE reserve - financial guaranty insurance contracts, net of reinsurance | (1,400) | (1,047) | |
Other recoverable (payable) | 4 | $ (1) | |
Net expected loss to be expensed (present value) | 442 | ||
Variable Interest Entity, Primary Beneficiary [Member] | |||
Guarantor Obligations [Line Items] | |||
Net expected loss to be expensed (present value) | 52 | ||
Financial Guarantee Insurance And Other Product Line [Member] | |||
Guarantor Obligations [Line Items] | |||
Net expected loss to be paid (recovered) after recoveries for R&W | 1,226 | ||
Contra-paid, net | 59 | ||
Salvage and subrogation recoverable, net of reinsurance | 552 | ||
Loss and LAE reserve - financial guaranty insurance contracts, net of reinsurance | (1,399) | ||
Other recoverable (payable) | 4 | ||
Net expected loss to be expensed (present value) | $ 442 |
Contracts Accounted for as In84
Contracts Accounted for as Insurance - Net Expected Loss to be Expensed Insurance Contracts (Details) $ in Millions | Dec. 31, 2017USD ($) |
Insurance [Abstract] | |
2018 (January 1 – March 31) | $ 8 |
2018 (April 1 – June 30) | 9 |
2018 (July 1 – September 30) | 10 |
2018 (October 1 – December 31) | 10 |
Subtotal 2,018 | 37 |
2,018 | 42 |
2,019 | 39 |
2,020 | 35 |
2,021 | 32 |
2022-2026 | 131 |
2027-2031 | 78 |
2032-2036 | 36 |
After 2,037 | 12 |
Net expected loss to be expensed | 442 |
Future accretion | 88 |
Total expected future loss and LAE | $ 530 |
Contracts Accounted for as In85
Contracts Accounted for as Insurance - Loss and LAE Reported on the Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | |||||||||||
Loss and LAE | $ 34 | $ 223 | $ 72 | $ 59 | $ 112 | $ (9) | $ 102 | $ 90 | $ 388 | $ 295 | $ 424 |
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||||||||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | |||||||||||
Loss and LAE | 395 | 302 | 452 | ||||||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||||||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | |||||||||||
Loss and LAE | (7) | (7) | (28) | ||||||||
Public Finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||||||||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | |||||||||||
Loss and LAE | 549 | 304 | 393 | ||||||||
Public Finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | United States [Member] | |||||||||||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | |||||||||||
Loss and LAE | 553 | 307 | 392 | ||||||||
Public Finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | Non United States [Member] | |||||||||||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | |||||||||||
Loss and LAE | (4) | (3) | 1 | ||||||||
Residential Mortgage-Backed Securities (RMBS) [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | United States [Member] | |||||||||||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | |||||||||||
Loss and LAE | (106) | 37 | 54 | ||||||||
Other structured finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||||||||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | |||||||||||
Loss and LAE | (48) | (39) | 5 | ||||||||
Structured Finance [Member] | Financial Guarantee Insurance And Other Product Line [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||||||||
Liability for Claims and Claims Adjustment Expense Including Salvage and Subrogation Recoverable [Line Items] | |||||||||||
Loss and LAE | $ (154) | $ (2) | $ 59 |
Contracts Accounted for as In86
Contracts Accounted for as Insurance - BIG Transaction Loss Summary (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)risk | Dec. 31, 2016USD ($)risk | |
Discount | ||
Total | $ (88) | |
Reserves (salvage) | ||
Total | $ 844 | $ 700 |
BIG [Member] | ||
Number of risks | ||
Total (in contracts) | risk | 335 | 392 |
Remaining weighted average contract period | ||
Total (in years) | 9 years 10 months 8 days | 10 years 1 month 2 days |
Principal | ||
Total | $ 11,900 | $ 12,101 |
Interest | ||
Total | 6,081 | 6,279 |
Total net outstanding exposure | ||
Total | 17,981 | 18,380 |
Expected cash outflows (inflows) | ||
Total | 4,046 | 2,515 |
Potential recoveries | ||
Total, Undiscounted R&W | (373) | |
Total, Other | 1,083 | |
Total | (2,732) | (1,059) |
Subtotal | ||
Total | 1,314 | 1,456 |
Discount | ||
Total | (88) | |
Present value of expected cash flows | ||
Net expected loss to be paid | 1,226 | |
Deferred premium revenue | ||
Total | 696 | 726 |
Reserves (salvage) | ||
Total | $ 843 | $ 699 |
BIG [Member] | BIG 1 [Member] | ||
Number of risks | ||
Total (in contracts) | risk | 139 | 165 |
Principal | ||
Total | $ 4,301 | $ 3,861 |
BIG [Member] | BIG 2 [Member] | ||
Number of risks | ||
Total (in contracts) | risk | 46 | 79 |
Principal | ||
Total | $ 1,344 | $ 3,857 |
BIG [Member] | BIG 3 [Member] | ||
Number of risks | ||
Total (in contracts) | risk | 150 | 148 |
Principal | ||
Total | $ 6,255 | $ 4,383 |
BIG [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||
Expected cash outflows (inflows) | ||
Total | (307) | (326) |
Potential recoveries | ||
Total, Undiscounted R&W | 24 | |
Total, Other | 104 | |
Total | 194 | 198 |
Subtotal | ||
Total | (113) | (128) |
Discount | ||
Total | 23 | |
Present value of expected cash flows | ||
Net expected loss to be paid | (90) | |
Deferred premium revenue | ||
Total | (74) | (86) |
Reserves (salvage) | ||
Total | $ (55) | $ (64) |
BIG [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||
Number of risks | ||
Total (in contracts) | risk | 335 | 392 |
Remaining weighted average contract period | ||
Total (in years) | 9 years 10 months 8 days | 10 years 1 month 2 days |
Principal | ||
Total | $ 11,900 | $ 12,101 |
Interest | ||
Total | 6,081 | 6,279 |
Total net outstanding exposure | ||
Total | 17,981 | 18,380 |
Expected cash outflows (inflows) | ||
Total | 4,353 | 2,841 |
Potential recoveries | ||
Total, Undiscounted R&W | (397) | |
Total, Other | 1,187 | |
Total | (2,926) | (1,257) |
Subtotal | ||
Total | 1,427 | 1,584 |
Discount | ||
Total | (111) | |
Present value of expected cash flows | ||
Net expected loss to be paid | 1,316 | |
Deferred premium revenue | ||
Total | 770 | 812 |
Reserves (salvage) | ||
Total | $ 898 | $ 763 |
BIG [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | BIG 1 [Member] | ||
Number of risks | ||
Ceded (in contracts) | risk | (22) | (35) |
Total (in contracts) | risk | 139 | 165 |
Remaining weighted average contract period | ||
Gross (in years) | 8 years 10 months 8 days | 8 years 7 months 2 days |
Ceded (in years) | 7 years 3 months 6 days | 7 years |
Principal | ||
Gross | $ 4,397 | $ 4,187 |
Ceded | (96) | (326) |
Interest | ||
Gross | 2,110 | 1,932 |
Ceded | (42) | (140) |
Total net outstanding exposure | ||
Gross | 6,507 | 6,119 |
Ceded | (138) | (466) |
Expected cash outflows (inflows) | ||
Gross | 186 | 172 |
Ceded | (5) | (19) |
Total | (343) | |
Potential recoveries | ||
Gross, Undiscounted R&W | 61 | |
Ceded, Undiscounted R&W | (4) | |
Gross, Other | 207 | |
Ceded, Other | 0 | |
Gross | (595) | (440) |
Ceded | 20 | 23 |
Subtotal | ||
Gross | (409) | (268) |
Ceded | 15 | 4 |
Discount | ||
Gross | 66 | |
Ceded | (4) | |
Present value of expected cash flows | ||
Ceded | 11 | |
Deferred premium revenue | ||
Gross | 112 | 131 |
Ceded | (5) | (5) |
Reserves (salvage) | ||
Gross | (380) | (255) |
Ceded | $ 11 | $ 5 |
BIG [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | BIG 2 [Member] | ||
Number of risks | ||
Ceded (in contracts) | risk | (3) | (11) |
Total (in contracts) | risk | 46 | 79 |
Remaining weighted average contract period | ||
Gross (in years) | 14 years | 13 years 2 months 4 days |
Ceded (in years) | 2 years 10 months 8 days | 10 years 6 months |
Principal | ||
Gross | $ 1,352 | $ 4,273 |
Ceded | (8) | (416) |
Interest | ||
Gross | 1,002 | 2,926 |
Ceded | (1) | (219) |
Total net outstanding exposure | ||
Gross | 2,354 | 7,199 |
Ceded | (9) | (635) |
Expected cash outflows (inflows) | ||
Gross | 492 | 1,404 |
Ceded | (1) | (86) |
Total | 254 | |
Potential recoveries | ||
Gross, Undiscounted R&W | (355) | |
Ceded, Undiscounted R&W | 19 | |
Gross, Other | (903) | |
Ceded, Other | (63) | |
Gross | (145) | (146) |
Ceded | 0 | 4 |
Subtotal | ||
Gross | 347 | 1,258 |
Ceded | (1) | (82) |
Discount | ||
Gross | (93) | |
Ceded | 0 | |
Present value of expected cash flows | ||
Ceded | (1) | |
Deferred premium revenue | ||
Gross | 129 | 246 |
Ceded | 0 | (6) |
Reserves (salvage) | ||
Gross | 202 | 738 |
Ceded | $ (1) | $ (58) |
BIG [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | BIG 3 [Member] | ||
Number of risks | ||
Ceded (in contracts) | risk | (41) | (49) |
Total (in contracts) | risk | 150 | 148 |
Remaining weighted average contract period | ||
Gross (in years) | 9 years 7 months 2 days | 8 years 1 month 2 days |
Ceded (in years) | 9 years 3 months 6 days | 6 years |
Principal | ||
Gross | $ 6,445 | $ 4,703 |
Ceded | (190) | (320) |
Interest | ||
Gross | 3,098 | 1,867 |
Ceded | (86) | (87) |
Total net outstanding exposure | ||
Gross | 9,543 | 6,570 |
Ceded | (276) | (407) |
Expected cash outflows (inflows) | ||
Gross | 3,785 | 1,435 |
Ceded | (104) | (65) |
Total | 1,434 | |
Potential recoveries | ||
Gross, Undiscounted R&W | (114) | |
Ceded, Undiscounted R&W | (4) | |
Gross, Other | (578) | |
Ceded, Other | (24) | |
Gross | (2,273) | (743) |
Ceded | 67 | 45 |
Subtotal | ||
Gross | 1,512 | 692 |
Ceded | (37) | (20) |
Discount | ||
Gross | (78) | |
Ceded | (2) | |
Present value of expected cash flows | ||
Ceded | (39) | |
Deferred premium revenue | ||
Gross | 540 | 476 |
Ceded | (6) | (30) |
Reserves (salvage) | ||
Gross | 1,100 | 343 |
Ceded | $ (34) | $ (10) |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)sourceSecurity | Dec. 31, 2016USD ($) | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Percentage of CDS contracts which are fair valued using minimum premium | 16.00% | 19.00% |
Recurring [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Other invested assets | $ 48 | $ 52 |
Recurring [Member] | Level 3 [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Number of fixed maturity securities valued using model processes | Security | 93 | |
Fixed maturity securities | $ 1,265 | |
Available-for-Sale Debt Securities and Short Term Investments [Member] | Recurring [Member] | Level 3 [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Percentage of fixed maturity securities valued using model processes to the Company's fixed-income securities and short-term investments at fair value | 11.00% | |
Credit Default Swap [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Number of sources of credit spread | source | 3 | |
Credit Default Swap [Member] | Recurring [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Discount factor (as a percent) | 1.72% | 1.00% |
Credit Default Swap [Member] | Recurring [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Discount factor (as a percent) | 2.55% | 2.55% |
Fair Value Measurement - Inform
Fair Value Measurement - Information by Credit Spread (Details) | Dec. 31, 2017 | Dec. 31, 2016 |
Based on actual collateral specific spreads [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Gross spread percentage | 14.00% | 7.00% |
Based on market indices [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Gross spread percentage | 48.00% | 77.00% |
Provided by the CDS counterparty [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Gross spread percentage | 38.00% | 16.00% |
Credit Default Swap [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Gross spread percentage | 100.00% | 100.00% |
Fair Value Measurement - Financ
Fair Value Measurement - Financial Instruments Carried at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Fixed-maturity securities | $ 11,301 | $ 10,823 |
Other invested assets | 94 | 162 |
Credit derivative assets | 2 | 13 |
Liabilities: | ||
Credit derivative liabilities | 271 | 402 |
Investment funds measured using Net Asset Value excluded from fair value hierarchy | 45 | 48 |
Recurring [Member] | ||
Assets: | ||
Other invested assets | 7 | 8 |
Credit derivative assets | 2 | 13 |
FG VIEs’ assets, at fair value | 700 | 876 |
Other assets | 121 | 114 |
Total assets carried at fair value | 12,131 | 11,834 |
Liabilities: | ||
Credit derivative liabilities | 271 | 402 |
FG VIEs’ liabilities with recourse, at fair value | 627 | 807 |
FG VIEs’ liabilities without recourse, at fair value | 130 | 151 |
Total liabilities carried at fair value | 1,028 | 1,360 |
Recurring [Member] | Level 1 [Member] | ||
Assets: | ||
Other invested assets | 0 | 0 |
Credit derivative assets | 0 | 0 |
FG VIEs’ assets, at fair value | 0 | 0 |
Other assets | 25 | 24 |
Total assets carried at fair value | 489 | 343 |
Liabilities: | ||
Credit derivative liabilities | 0 | 0 |
FG VIEs’ liabilities with recourse, at fair value | 0 | 0 |
FG VIEs’ liabilities without recourse, at fair value | 0 | 0 |
Total liabilities carried at fair value | 0 | 0 |
Recurring [Member] | Level 2 [Member] | ||
Assets: | ||
Other invested assets | 0 | 0 |
Credit derivative assets | 0 | 0 |
FG VIEs’ assets, at fair value | 0 | 0 |
Other assets | 36 | 28 |
Total assets carried at fair value | 9,608 | 9,263 |
Liabilities: | ||
Credit derivative liabilities | 0 | 0 |
FG VIEs’ liabilities with recourse, at fair value | 0 | 0 |
FG VIEs’ liabilities without recourse, at fair value | 0 | 0 |
Total liabilities carried at fair value | 0 | 0 |
Recurring [Member] | Level 3 [Member] | ||
Assets: | ||
Other invested assets | 7 | 8 |
Credit derivative assets | 2 | 13 |
FG VIEs’ assets, at fair value | 700 | 876 |
Other assets | 60 | 62 |
Total assets carried at fair value | 2,034 | 2,228 |
Liabilities: | ||
Credit derivative liabilities | 271 | 402 |
FG VIEs’ liabilities with recourse, at fair value | 627 | 807 |
FG VIEs’ liabilities without recourse, at fair value | 130 | 151 |
Total liabilities carried at fair value | 1,028 | 1,360 |
Fixed Maturities [Member] | ||
Assets: | ||
Fixed-maturity securities | 10,674 | 10,233 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | ||
Assets: | ||
Fixed-maturity securities | 5,760 | 5,432 |
Fixed Maturities [Member] | US Treasury and Government [Member] | ||
Assets: | ||
Fixed-maturity securities | 285 | 440 |
Fixed Maturities [Member] | Corporate securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 2,018 | 1,613 |
Fixed Maturities [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 861 | 987 |
Fixed Maturities [Member] | Commercial Mortgage Backed Securities (CMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 549 | 583 |
Fixed Maturities [Member] | Asset-backed Securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 896 | 945 |
Fixed Maturities [Member] | Foreign government securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 305 | 233 |
Fixed Maturities [Member] | Recurring [Member] | ||
Assets: | ||
Fixed-maturity securities | 10,674 | 10,233 |
Fixed Maturities [Member] | Recurring [Member] | Obligations of state and political subdivisions [Member] | ||
Assets: | ||
Fixed-maturity securities | 5,760 | 5,432 |
Fixed Maturities [Member] | Recurring [Member] | US Treasury and Government [Member] | ||
Assets: | ||
Fixed-maturity securities | 285 | 440 |
Fixed Maturities [Member] | Recurring [Member] | Corporate securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 2,018 | 1,613 |
Fixed Maturities [Member] | Recurring [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 861 | 987 |
Fixed Maturities [Member] | Recurring [Member] | Commercial Mortgage Backed Securities (CMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 549 | 583 |
Fixed Maturities [Member] | Recurring [Member] | Asset-backed Securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 896 | 945 |
Fixed Maturities [Member] | Recurring [Member] | Foreign government securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 305 | 233 |
Fixed Maturities [Member] | Recurring [Member] | Level 1 [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 1 [Member] | Obligations of state and political subdivisions [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 1 [Member] | US Treasury and Government [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 1 [Member] | Corporate securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 1 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 1 [Member] | Commercial Mortgage Backed Securities (CMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 1 [Member] | Asset-backed Securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 1 [Member] | Foreign government securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 2 [Member] | ||
Assets: | ||
Fixed-maturity securities | 9,410 | 8,964 |
Fixed Maturities [Member] | Recurring [Member] | Level 2 [Member] | Obligations of state and political subdivisions [Member] | ||
Assets: | ||
Fixed-maturity securities | 5,684 | 5,393 |
Fixed Maturities [Member] | Recurring [Member] | Level 2 [Member] | US Treasury and Government [Member] | ||
Assets: | ||
Fixed-maturity securities | 285 | 440 |
Fixed Maturities [Member] | Recurring [Member] | Level 2 [Member] | Corporate securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 1,951 | 1,553 |
Fixed Maturities [Member] | Recurring [Member] | Level 2 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 527 | 622 |
Fixed Maturities [Member] | Recurring [Member] | Level 2 [Member] | Commercial Mortgage Backed Securities (CMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 549 | 583 |
Fixed Maturities [Member] | Recurring [Member] | Level 2 [Member] | Asset-backed Securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 109 | 140 |
Fixed Maturities [Member] | Recurring [Member] | Level 2 [Member] | Foreign government securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 305 | 233 |
Fixed Maturities [Member] | Recurring [Member] | Level 3 [Member] | ||
Assets: | ||
Fixed-maturity securities | 1,264 | 1,269 |
Fixed Maturities [Member] | Recurring [Member] | Level 3 [Member] | Obligations of state and political subdivisions [Member] | ||
Assets: | ||
Fixed-maturity securities | 76 | 39 |
Fixed Maturities [Member] | Recurring [Member] | Level 3 [Member] | US Treasury and Government [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 3 [Member] | Corporate securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 67 | 60 |
Fixed Maturities [Member] | Recurring [Member] | Level 3 [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 334 | 365 |
Fixed Maturities [Member] | Recurring [Member] | Level 3 [Member] | Commercial Mortgage Backed Securities (CMBS) [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Recurring [Member] | Level 3 [Member] | Asset-backed Securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 787 | 805 |
Fixed Maturities [Member] | Recurring [Member] | Level 3 [Member] | Foreign government securities [Member] | ||
Assets: | ||
Fixed-maturity securities | 0 | 0 |
Short-term Investments [Member] | ||
Assets: | ||
Fixed-maturity securities | 627 | 590 |
Short-term Investments [Member] | Recurring [Member] | ||
Assets: | ||
Fixed-maturity securities | 627 | 590 |
Short-term Investments [Member] | Recurring [Member] | Level 1 [Member] | ||
Assets: | ||
Fixed-maturity securities | 464 | 319 |
Short-term Investments [Member] | Recurring [Member] | Level 2 [Member] | ||
Assets: | ||
Fixed-maturity securities | 162 | 271 |
Short-term Investments [Member] | Recurring [Member] | Level 3 [Member] | ||
Assets: | ||
Fixed-maturity securities | $ 1 | $ 0 |
- Fair Value Level 3 Rollforwar
- Fair Value Level 3 Rollforward Recurring Basis (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Short-term Investments [Member] | ||
Fair Value Level 3 Rollforward | ||
Fair value at beginning of period | $ 0 | $ 60 |
Acquisition | 0 | |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | 0 | |
Other comprehensive income (loss) | 0 | |
Purchases | 0 | |
Settlements | (60) | |
FG VIE consolidations | 0 | |
FG VIE deconsolidations | 0 | |
Transfers into Level 3 | 0 | |
Fair value at end of period | 0 | |
Change in unrealized gains/(losses) related to financial instruments held | 0 | |
FG VIEs' assets, at fair value [Member] | ||
Fair Value Level 3 Rollforward | ||
Fair value at beginning of period | 876 | 1,261 |
Acquisition | 0 | 0 |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | 37 | 167 |
Other comprehensive income (loss) | 0 | 0 |
Purchases | 0 | 0 |
Settlements | (147) | (629) |
FG VIE consolidations | 39 | 97 |
FG VIE deconsolidations | (105) | (20) |
Transfers into Level 3 | 0 | 0 |
Fair value at end of period | 700 | 876 |
Change in unrealized gains/(losses) related to financial instruments held | 59 | 93 |
Other Assets and Other Invested Assets [Member] | ||
Fair Value Level 3 Rollforward | ||
Fair value at beginning of period | 65 | 65 |
Acquisition | 0 | 0 |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | (2) | 0 |
Other comprehensive income (loss) | 0 | 0 |
Purchases | 1 | 0 |
Settlements | 0 | 0 |
FG VIE consolidations | 0 | 0 |
FG VIE deconsolidations | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Fair value at end of period | 64 | 65 |
Change in unrealized gains/(losses) related to financial instruments held | (2) | 0 |
Obligations of state and political subdivisions [Member] | Fixed Maturities [Member] | ||
Fair Value Level 3 Rollforward | ||
Fair value at beginning of period | 39 | 8 |
Acquisition | 0 | 1 |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | (13) | 2 |
Other comprehensive income (loss) | (2) | (4) |
Purchases | 0 | 33 |
Settlements | (2) | (1) |
FG VIE consolidations | 0 | 0 |
FG VIE deconsolidations | 0 | 0 |
Transfers into Level 3 | 54 | 0 |
Fair value at end of period | 76 | 39 |
Change in unrealized gains/(losses) related to financial instruments held | (2) | (4) |
Corporate securities [Member] | Fixed Maturities [Member] | ||
Fair Value Level 3 Rollforward | ||
Fair value at beginning of period | 60 | 71 |
Acquisition | 0 | 0 |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | 6 | (16) |
Other comprehensive income (loss) | 1 | 5 |
Purchases | 0 | 0 |
Settlements | 0 | 0 |
FG VIE consolidations | 0 | 0 |
FG VIE deconsolidations | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Fair value at end of period | 67 | 60 |
Change in unrealized gains/(losses) related to financial instruments held | 1 | 5 |
Residential Mortgage-Backed Securities (RMBS) [Member] | Fixed Maturities [Member] | ||
Fair Value Level 3 Rollforward | ||
Fair value at beginning of period | 365 | 348 |
Acquisition | 0 | 20 |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | 27 | 10 |
Other comprehensive income (loss) | 23 | (13) |
Purchases | 42 | 70 |
Settlements | (123) | (70) |
FG VIE consolidations | 0 | 0 |
FG VIE deconsolidations | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Fair value at end of period | 334 | 365 |
Change in unrealized gains/(losses) related to financial instruments held | 23 | (15) |
Asset-backed Securities [Member] | Fixed Maturities [Member] | ||
Fair Value Level 3 Rollforward | ||
Fair value at beginning of period | 805 | 657 |
Acquisition | 7 | 36 |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | 113 | 51 |
Other comprehensive income (loss) | 56 | 116 |
Purchases | 173 | 76 |
Settlements | (367) | (139) |
FG VIE consolidations | 0 | 0 |
FG VIE deconsolidations | 0 | 0 |
Transfers into Level 3 | 0 | 8 |
Fair value at end of period | 787 | 805 |
Change in unrealized gains/(losses) related to financial instruments held | 123 | 116 |
FG VIEs' liabilities with recourse, at fair value [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value at beginning of period | (807) | (1,225) |
MBIA UK Acquisition | 0 | 0 |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | (16) | (125) |
Other comprehensive income (loss) | 0 | 0 |
Purchases | 0 | 0 |
Settlements | 145 | 597 |
FG VIE consolidations | 0 | (54) |
FG VIE deconsolidations | 51 | 0 |
Transfers into Level 3 | 0 | 0 |
Fair value at end of period | (627) | (807) |
Change in unrealized gains/(losses) related to financial instruments held | (11) | (12) |
FG VIEs' liabilities without recourse, at fair value [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value at beginning of period | (151) | (124) |
MBIA UK Acquisition | 0 | 0 |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | (6) | (18) |
Other comprehensive income (loss) | 0 | 0 |
Purchases | 0 | 0 |
Settlements | 12 | 14 |
FG VIE consolidations | (39) | (43) |
FG VIE deconsolidations | 54 | 20 |
Transfers into Level 3 | 0 | 0 |
Fair value at end of period | (130) | (151) |
Change in unrealized gains/(losses) related to financial instruments held | (6) | (17) |
Credit Risk Contract [Member] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Fair value at beginning of period | (389) | (365) |
MBIA UK Acquisition | 0 | (67) |
Total pretax realized and unrealized gains/(losses) recorded in: | ||
Net income (loss) | 107 | 74 |
Other comprehensive income (loss) | 0 | 0 |
Purchases | 0 | 0 |
Settlements | 13 | (31) |
FG VIE consolidations | 0 | 0 |
FG VIE deconsolidations | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Fair value at end of period | (269) | (389) |
Change in unrealized gains (losses) related to financial instruments held | $ 96 | $ (33) |
- Quantitative Information - As
- Quantitative Information - Assets (Details) - Income Approach Valuation Technique [Member] - Level 3 [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Obligations of state and political subdivisions [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 76 | $ 39 |
Obligations of state and political subdivisions [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 4.50% | 4.30% |
Obligations of state and political subdivisions [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 40.80% | 22.80% |
Obligations of state and political subdivisions [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 12.50% | 11.10% |
Corporate securities [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 67 | $ 60 |
Yield (as a percent) | 22.50% | 20.10% |
Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 334 | $ 365 |
Residential Mortgage-Backed Securities (RMBS) [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 4.00% | 3.30% |
Conditional prepayment rate (as a percent) | 1.30% | 1.60% |
Conditional default rate (as a percent) | 1.50% | 1.50% |
Loss severity rate (as a percent) | 40.00% | 30.00% |
Residential Mortgage-Backed Securities (RMBS) [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 7.50% | 9.70% |
Conditional prepayment rate (as a percent) | 17.40% | 17.00% |
Conditional default rate (as a percent) | 9.20% | 10.10% |
Loss severity rate (as a percent) | 125.00% | 100.00% |
Residential Mortgage-Backed Securities (RMBS) [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 5.60% | 6.00% |
Conditional prepayment rate (as a percent) | 6.40% | 4.60% |
Conditional default rate (as a percent) | 5.90% | 6.70% |
Loss severity rate (as a percent) | 82.50% | 77.80% |
Triple-X Life Insurance Transaction [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 613 | $ 425 |
Triple-X Life Insurance Transaction [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 6.20% | 5.70% |
Triple-X Life Insurance Transaction [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 6.40% | 6.00% |
Triple-X Life Insurance Transaction [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 6.30% | 5.80% |
Pooled corporate obligations [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 332 | |
Yield (as a percent) | 10.00% | |
Collateralized Loan Obligations And TruPS [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 116 | $ 19 |
Collateralized Loan Obligations And TruPS [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 2.60% | 1.50% |
Collateralized Loan Obligations And TruPS [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 4.60% | 4.80% |
Collateralized Loan Obligations And TruPS [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 3.30% | 3.10% |
Other Asset Backed Securities [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 58 | $ 29 |
Yield (as a percent) | 10.70% | 7.20% |
Financial Guaranty Variable Interest Entities [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 700 | $ 876 |
Financial Guaranty Variable Interest Entities [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 3.70% | 2.90% |
Conditional prepayment rate (as a percent) | 3.00% | 3.50% |
Conditional default rate (as a percent) | 1.30% | 2.50% |
Loss severity rate (as a percent) | 60.00% | 35.00% |
Financial Guaranty Variable Interest Entities [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 10.00% | 20.00% |
Conditional prepayment rate (as a percent) | 14.90% | 12.00% |
Conditional default rate (as a percent) | 21.70% | 21.60% |
Loss severity rate (as a percent) | 100.00% | 100.00% |
Financial Guaranty Variable Interest Entities [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 6.20% | 6.50% |
Conditional prepayment rate (as a percent) | 9.50% | 7.80% |
Conditional default rate (as a percent) | 5.40% | 5.70% |
Loss severity rate (as a percent) | 79.60% | 78.60% |
Other Assets [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 60 | $ 62 |
Fair Value Inputs Term | 10 years | 10 years |
Other Assets [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 5.20% | 4.50% |
Other Assets [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 5.90% | 5.10% |
Other Assets [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield (as a percent) | 5.50% | 4.80% |
Short-term Investments [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 1 | |
Other invested assets [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Asset, fair value | $ 7 | $ 8 |
- Quantitative Information - Li
- Quantitative Information - Liabilities (Details) - Income Approach Valuation Technique [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Credit derivative liabilities, net [Member] | Minimum [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value Inputs Hedge Cost | 0.176% | 0.072% |
Fair Value Inputs Bank Profit | 0.06% | 0.038% |
Fair Value Inputs Internal Floor | 0.08% | 0.07% |
Credit derivative liabilities, net [Member] | Maximum [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value Inputs Hedge Cost | 1.226% | 1.181% |
Fair Value Inputs Bank Profit | 8.525% | 8.25% |
Fair Value Inputs Internal Floor | 0.30% | 1.00% |
Credit derivative liabilities, net [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value Inputs Hedge Cost | 0.481% | 0.245% |
Fair Value Inputs Bank Profit | 1.075% | 0.618% |
Fair Value Inputs Internal Floor | 0.218% | 0.139% |
Level 3 [Member] | Credit derivative liabilities, net [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Total liabilities carried at fair value | $ (269) | $ (389) |
Level 3 [Member] | Credit derivative liabilities, net [Member] | Minimum [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Year 1 loss estimates (as a percent) | 0.00% | 0.00% |
Level 3 [Member] | Credit derivative liabilities, net [Member] | Maximum [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Year 1 loss estimates (as a percent) | 42.00% | 38.00% |
Level 3 [Member] | Credit derivative liabilities, net [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Year 1 loss estimates (as a percent) | 3.30% | 1.30% |
Level 3 [Member] | Financial Guaranty Variable Interest Entities [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Total liabilities carried at fair value | $ (757) | $ (958) |
Level 3 [Member] | Financial Guaranty Variable Interest Entities [Member] | Minimum [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Conditional prepayment rate (as a percent) | 3.00% | 3.50% |
Conditional default rate (as a percent) | 1.30% | 2.50% |
Loss severity rate (as a percent) | 60.00% | 35.00% |
Yield (as a percent) | 3.40% | 2.40% |
Level 3 [Member] | Financial Guaranty Variable Interest Entities [Member] | Maximum [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Conditional prepayment rate (as a percent) | 14.90% | 12.00% |
Conditional default rate (as a percent) | 21.70% | 21.60% |
Loss severity rate (as a percent) | 100.00% | 100.00% |
Yield (as a percent) | 10.00% | 20.00% |
Level 3 [Member] | Financial Guaranty Variable Interest Entities [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Conditional prepayment rate (as a percent) | 9.50% | 7.80% |
Conditional default rate (as a percent) | 5.40% | 5.70% |
Loss severity rate (as a percent) | 79.60% | 78.60% |
Yield (as a percent) | 4.90% | 5.00% |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Fixed-maturity securities | $ 11,301 | $ 10,823 |
Short-term investments | 627 | 590 |
Other invested assets | 94 | 162 |
Credit derivative assets | 2 | 13 |
Liabilities: | ||
Credit derivative liabilities | 271 | 402 |
Carrying Amount [Member] | ||
Assets: | ||
Fixed-maturity securities | 10,674 | 10,233 |
Short-term investments | 627 | 590 |
Other invested assets | 60 | 146 |
Credit derivative assets | 2 | 13 |
FG VIEs’ assets, at fair value | 700 | 876 |
Other assets | 218 | 205 |
Liabilities: | ||
Financial guaranty insurance contracts | 3,330 | 3,483 |
Long-term debt | 1,292 | 1,306 |
Credit derivative liabilities | 271 | 402 |
FG VIEs’ liabilities with recourse, at fair value | 627 | 807 |
FG VIEs’ liabilities without recourse, at fair value | 130 | 151 |
Other liabilities | 55 | 12 |
Estimated Fair Value [Member] | ||
Assets: | ||
Fixed-maturity securities | 10,674 | 10,233 |
Short-term investments | 627 | 590 |
Other invested assets | 61 | 147 |
Credit derivative assets | 2 | 13 |
FG VIEs’ assets, at fair value | 700 | 876 |
Other assets | 218 | 205 |
Liabilities: | ||
Financial guaranty insurance contracts | 7,104 | 8,738 |
Long-term debt | 1,627 | 1,546 |
Credit derivative liabilities | 271 | 402 |
FG VIEs’ liabilities with recourse, at fair value | 627 | 807 |
FG VIEs’ liabilities without recourse, at fair value | 130 | 151 |
Other liabilities | $ 55 | $ 12 |
Contracts Accounted for as Cr94
Contracts Accounted for as Credit Derivatives - Credit Derivatives Subordination and Ratings (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Net Par Outstanding on Credit Derivatives | ||
Net Par Outstanding | $ 6,207 | $ 16,997 |
Pooled corporate obligations [Member] | ||
Net Par Outstanding on Credit Derivatives | ||
Net Par Outstanding | 878 | 10,425 |
Pooled corporate obligations [Member] | Collateralized Loan Obligations and Collateral Bond Obligations [Member] | ||
Net Par Outstanding on Credit Derivatives | ||
Net Par Outstanding | 0 | 2,022 |
Pooled corporate obligations [Member] | Synthetic investment grade pooled corporate [Member] | ||
Net Par Outstanding on Credit Derivatives | ||
Net Par Outstanding | 0 | 7,224 |
Pooled corporate obligations [Member] | TruPS CDOs [Member] | ||
Net Par Outstanding on Credit Derivatives | ||
Net Par Outstanding | 878 | 1,179 |
Residential Mortgage-Backed Securities (RMBS) [Member] | United States [Member] | ||
Net Par Outstanding on Credit Derivatives | ||
Net Par Outstanding | 916 | 1,142 |
Pooled infrastructure [Member] | ||
Net Par Outstanding on Credit Derivatives | ||
Net Par Outstanding | 1,561 | 1,513 |
Infrastructure finance [Member] | ||
Net Par Outstanding on Credit Derivatives | ||
Net Par Outstanding | 572 | 1,021 |
Other [Member] | ||
Net Par Outstanding on Credit Derivatives | ||
Net Par Outstanding | $ 2,280 | $ 2,896 |
Contracts Accounted for as Cr95
Contracts Accounted for as Credit Derivatives - Distribution of Credit Derivative Net Par Outstanding by Internal Rating (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Credit Derivatives | ||
Net Par Outstanding | $ 6,207 | $ 16,997 |
BIG [Member] | ||
Credit Derivatives | ||
Net Par Outstanding | 338 | 973 |
Credit Concentration Risk [Member] | Derivative, Aggregate Notional Amount [Member] | ||
Credit Derivatives | ||
Net Par Outstanding | $ 6,207 | $ 16,997 |
Percentage of installment premiums denominated in currencies other than the U.S. dollar | 100.00% | 100.00% |
Credit Concentration Risk [Member] | Derivative, Aggregate Notional Amount [Member] | Internal Credit Rating, AAA [Member] | ||
Credit Derivatives | ||
Net Par Outstanding | $ 2,144 | $ 10,967 |
Percentage of installment premiums denominated in currencies other than the U.S. dollar | 34.60% | 64.60% |
Credit Concentration Risk [Member] | Derivative, Aggregate Notional Amount [Member] | Internal Credit Rating, AA [Member] | ||
Credit Derivatives | ||
Net Par Outstanding | $ 1,170 | $ 2,167 |
Percentage of installment premiums denominated in currencies other than the U.S. dollar | 18.80% | 12.70% |
Credit Concentration Risk [Member] | Derivative, Aggregate Notional Amount [Member] | Internal Credit Rating, A [Member] | ||
Credit Derivatives | ||
Net Par Outstanding | $ 1,517 | $ 1,499 |
Percentage of installment premiums denominated in currencies other than the U.S. dollar | 24.50% | 8.80% |
Credit Concentration Risk [Member] | Derivative, Aggregate Notional Amount [Member] | Internal Credit Rating, BBB [Member] | ||
Credit Derivatives | ||
Net Par Outstanding | $ 1,038 | $ 1,391 |
Percentage of installment premiums denominated in currencies other than the U.S. dollar | 16.70% | 8.20% |
Credit Concentration Risk [Member] | Derivative, Aggregate Notional Amount [Member] | BIG [Member] | ||
Credit Derivatives | ||
Net Par Outstanding | $ 338 | $ 973 |
Percentage of installment premiums denominated in currencies other than the U.S. dollar | 5.40% | 5.70% |
Contracts Accounted for as Cr96
Contracts Accounted for as Credit Derivatives - Net Change in Fair Value of Credit Derivatives Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Credit Derivatives | |||||||||||
Realized gains on credit derivatives | $ 17 | $ 56 | $ 63 | ||||||||
Net credit derivative losses (paid and payable) recovered and recoverable and other settlements | (27) | (27) | (81) | ||||||||
Realized gains (losses) and other settlements | (10) | 29 | (18) | ||||||||
Net change in unrealized gains (losses) on credit derivatives | 121 | 69 | 746 | ||||||||
Net change in fair value of credit derivatives | $ 5 | $ 58 | $ (6) | $ 54 | $ 74 | $ 21 | $ 63 | $ (60) | 111 | 98 | 728 |
Pooled corporate obligations [Member] | |||||||||||
Credit Derivatives | |||||||||||
Net change in unrealized gains (losses) on credit derivatives | 35 | (16) | 147 | ||||||||
Pooled infrastructure [Member] | |||||||||||
Credit Derivatives | |||||||||||
Net change in unrealized gains (losses) on credit derivatives | 5 | 17 | 17 | ||||||||
Infrastructure finance [Member] | |||||||||||
Credit Derivatives | |||||||||||
Net change in unrealized gains (losses) on credit derivatives | 4 | 4 | 0 | ||||||||
Other [Member] | |||||||||||
Credit Derivatives | |||||||||||
Net change in unrealized gains (losses) on credit derivatives | 54 | 42 | 186 | ||||||||
United States [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||||||||||
Credit Derivatives | |||||||||||
Net change in unrealized gains (losses) on credit derivatives | 23 | 22 | 396 | ||||||||
Terminated And Settlement Of Credit Derivative Contracts [Member] | |||||||||||
Credit Derivatives | |||||||||||
Net change in unrealized gains (losses) on credit derivatives | 26 | 103 | 465 | ||||||||
Net par of terminated credit derivative contracts | 331 | 3,811 | 2,777 | ||||||||
Realized gains on credit derivatives | 0 | 20 | 13 | ||||||||
Net credit derivative losses (paid and payable) recovered and recoverable and other settlements | $ (15) | $ 0 | $ (116) |
Contracts Accounted for as Cr97
Contracts Accounted for as Credit Derivatives - CDS Spread and Components of Credit Derivative Assets (Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Credit Derivatives | |||
Fair value of credit derivatives before effect of AGC and AGM credit spreads | $ (555) | $ (811) | |
Plus: Effect of AGC and AGM credit spreads | 286 | 422 | |
Net fair value of credit derivatives | $ (269) | $ (389) | |
Credit Risk Contract, 5 Year Spread [Member] | AGC [Member] | |||
Credit Derivatives | |||
Quoted price of CDS contract (as a percent) | 1.63% | 1.58% | 3.76% |
Credit Risk Contract, 5 Year Spread [Member] | AGM [Member] | |||
Credit Derivatives | |||
Quoted price of CDS contract (as a percent) | 1.45% | 1.58% | 3.66% |
Credit Risk Contract, 1 Year Spread [Member] | AGC [Member] | |||
Credit Derivatives | |||
Quoted price of CDS contract (as a percent) | 0.70% | 0.35% | 1.39% |
Credit Risk Contract, 1 Year Spread [Member] | AGM [Member] | |||
Credit Derivatives | |||
Quoted price of CDS contract (as a percent) | 0.28% | 0.29% | 1.31% |
Contracts Accounted for as Cr98
Contracts Accounted for as Credit Derivatives - Net Fair Value and Expected Losses of Credit Derivatives by Sector (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Fair value of credit derivative asset (liability), net | $ (269) | $ (389) |
Expected Loss to be (Paid) Recovered | $ 14 | $ (10) |
Contracts Accounted for as Cr99
Contracts Accounted for as Credit Derivatives - Effect of Changes in Credit Spread (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Credit Risk Derivatives, 100 Percent Widening in Spreads, Effect on Fair Value | $ (501) | |
Credit Risk Derivatives, 50 Percent Widening in Spreads, Effect on Fair Value | (385) | |
Credit Risk Derivatives, 25 Percent Widening in Spreads, Effect on Fair Value | (327) | |
Credit Risk Derivatives, 10 Percent Widening in Spreads, Effect on Fair Value | (292) | |
Fair value of credit derivative asset (liability), net | (269) | $ (389) |
Credit Risk Derivatives, 10 Percent Narrowing in Spreads, Effect on Fair Value | (250) | |
Credit Risk Derivatives, 25 Percent Narrowing in Spreads, Effect on Fair Value | (222) | |
Credit Risk Derivatives, 50 Percent Narrowing in Spreads, Effect on Fair Value | (174) | |
Credit Risk Derivatives, 100 Percent Widening in Spreads, Effect on Unrealized Gain (Loss) | (232) | |
Credit Risk Derivatives, 50 Percent Widening in Spreads, Effect on Unrealized Gain (Loss) | (116) | |
Credit Risk Derivatives, 25 Percent Widening in Spreads, Effect on Unrealized Gain (Loss) | (58) | |
Credit Risk Derivatives, 10 Percent Widening in Spreads, Effect on Unrealized Gain (Loss) | (23) | |
Credit Risk Derivatives, Base Scenario, Effect on Unrealized Gain (Loss) | 0 | |
Credit Risk Derivatives, 10 Percent Narrowing in Spreads, Effect on Unrealized Gain (Loss) | 19 | |
Credit Risk Derivatives, 25 Percent Narrowing in Spreads, Effect on Unrealized Gain (Loss) | 47 | |
Credit Risk Derivatives, 50 Percent Narrowing in Spreads, Effect on Unrealized Gain (Loss) | $ 95 |
Contracts Accounted for as C100
Contracts Accounted for as Credit Derivatives - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)TransactionCounterparty | |
Credit Derivatives | |||
Estimated remaining weighted average life of credit derivatives (in years) | 11 years 8 months | 5 years 3 months 6 days | |
Net par outstanding | $ 6,207 | $ 16,997 | |
Fair value gains | $ 49 | ||
Collateral agreed to be posted | 18 | 116 | |
Market value collateralized debt obligations of corporate obligations [Member] | |||
Credit Derivatives | |||
Net par outstanding | 878 | 10,425 | |
Pooled infrastructure [Member] | |||
Credit Derivatives | |||
Net par outstanding | 1,561 | 1,513 | |
Commercial Mortgage Backed Securities (CMBS) [Member] | |||
Credit Derivatives | |||
Unrealized fair value gain on termination of transactions | 41 | ||
Triple-X Life Insurance Transaction [Member] | |||
Credit Derivatives | |||
Unrealized fair value gain on termination of transactions | $ 99 | ||
Collateral Debt Obligations, Collateral Cap Negotiated [Member] | |||
Credit Derivatives | |||
Credit Derivative, Gross Par Of Contracts Terminated | 183 | ||
Credit Derivative, Collateral Terminated | 73 | ||
Alt-A [Member] | First Lien [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | |||
Credit Derivatives | |||
Counterparties involved in transaction termination | Counterparty | 1 | ||
Number of transactions terminated | Transaction | 5 | ||
Unrealized fair value gain on termination of transactions | $ 213 | ||
Collateralized Loan Obligations and Collateral Bond Obligations [Member] | Market value collateralized debt obligations of corporate obligations [Member] | |||
Credit Derivatives | |||
Net par outstanding | $ 0 | $ 2,022 | |
Unrealized fair value gain on termination of transactions | $ 99 |
Contracts Accounted for as C101
Contracts Accounted for as Credit Derivatives - Collateral Posting Requirements (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Credit Derivatives | ||
Collateral agreed to be posted | $ 18 | $ 116 |
Collateral Debt Obligations, Credit Derivative Contracts, Gross Par with Collateral Posting Requirements [Member] | ||
Credit Derivatives | ||
Amount of par subject to collateral for which the amount of collateral is capped | 497 | 690 |
Collateral Debt Obligations, Maximum Posting Requirement [Member] | ||
Credit Derivatives | ||
Amount of par subject to collateral for which the amount of collateral is capped | 464 | 674 |
Collateral Debt Obligations, Collateral Posted [Member] | ||
Credit Derivatives | ||
Collateral agreed to be posted | $ 18 | $ 116 |
Consolidated Variable Intere102
Consolidated Variable Interest Entities - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)Entity | Dec. 31, 2016USD ($)Entity | Dec. 31, 2015USD ($)Entity | Dec. 31, 2014Entity | |
Variable Interest Entity [Line Items] | ||||
Net fair value gains and losses on FG VIEs are expected to reverse to zero at maturity of the VIE debt | $ 0 | |||
Trustee report general preparation period | 30 days | |||
Credit Risk Derivatives at Fair Value before Effect of Credit Spread Net 1 [Abstract] | ||||
Fair value gains (losses) on financial guaranty variable interest entities | $ 30,000,000 | $ 38,000,000 | $ 38,000,000 | |
Variable Interest Entity, Primary Beneficiary [Member] | ||||
Credit Risk Derivatives at Fair Value before Effect of Credit Spread Net 1 [Abstract] | ||||
Fair value gains (losses) on financial guaranty variable interest entities | $ 30,000,000 | $ 38,000,000 | $ 38,000,000 | |
Number of FG VIE's matured | Entity | 0 | 1 | 2 | |
Number of VIE that did not require consolidation | Entity | 32 | 32 | 34 | 32 |
Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure [Member] | ||||
Credit Risk Derivatives at Fair Value before Effect of Credit Spread Net 1 [Abstract] | ||||
Number of VIE that did not require consolidation | Entity | 510 | 600 | ||
Residential Mortgage Backed Securities and Other Insurance Products [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Credit Risk Derivatives at Fair Value before Effect of Credit Spread Net 1 [Abstract] | ||||
Total unpaid principal balance for the VIEs' assets that were over 90 days or more past due | $ 99,000,000 | $ 137,000,000 | ||
Difference between the aggregate unpaid principal and aggregate fair value of the VIEs' Assets | 361,000,000 | 432,000,000 | ||
Change in the instrument specific credit risk of the VIEs' assets | 35,000,000 | 55,000,000 | $ 90,000,000 | |
Unpaid principal for FG VIEs’ liabilities with recourse | 674,000,000 | 871,000,000 | ||
Unpaid principal for FG VIEs' liabilities with and without recourse | $ 73,000,000 | $ 109,000,000 |
Consolidated Variable Intere103
Consolidated Variable Interest Entities - Number of FG VIE's Consolidated (Details) - Variable Interest Entity, Primary Beneficiary [Member] $ in Millions | 12 Months Ended | ||
Dec. 31, 2017Entity | Dec. 31, 2016Entity | Dec. 31, 2015USD ($)Entity | |
Number of FG VIEs Consolidated [Roll Forward] | |||
Number of FG VIE's consolidated, beginning of period | 32 | 34 | 32 |
Number of FG VIE's, Radian Asset Acquisition | 0 | 0 | 4 |
Number of FG VIE's consolidated | 2 | 1 | 1 |
Number of FG VIE's deconsolidated | (2) | (2) | (1) |
Number of FG VIE's matured | 0 | (1) | (2) |
Number of FG VIE's consolidated, end of period | 32 | 32 | 34 |
Net loss on consolidation of VIEs | $ | $ (26) |
Consolidated Variable Intere104
Consolidated Variable Interest Entities - Consolidated FG VIE's By Type of Collateral (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Financial guaranty variable interest entities' assets with recourse, at fair value | $ 570 | $ 725 |
Financial guaranty variable interest entities’ liabilities with recourse, at fair value | 627 | 807 |
Financial guaranty variable interest entities' assets without recourse, at fair value | 130 | 151 |
Financial guaranty variable interest entities’ liabilities without recourse, at fair value | 130 | 151 |
Financial guaranty variable interest entities’ assets, at fair value | 700 | 876 |
Financial guaranty variable interest entities’ liabilities, at fair value | 757 | 958 |
Manufactured Housing Loans [Member] | ||
Variable Interest Entity [Line Items] | ||
Financial guaranty variable interest entities' assets with recourse, at fair value | 64 | 74 |
Financial guaranty variable interest entities’ liabilities with recourse, at fair value | 65 | 75 |
United States [Member] | First Lien [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Variable Interest Entity [Line Items] | ||
Financial guaranty variable interest entities' assets with recourse, at fair value | 362 | 473 |
Financial guaranty variable interest entities’ liabilities with recourse, at fair value | 385 | 509 |
United States [Member] | Second Lien [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Variable Interest Entity [Line Items] | ||
Financial guaranty variable interest entities' assets with recourse, at fair value | 144 | 178 |
Financial guaranty variable interest entities’ liabilities with recourse, at fair value | $ 177 | $ 223 |
Consolidated Variable Intere105
Consolidated Variable Interest Entities - Effect of Consolidating FG VIE's on Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Variable Interest Entity [Line Items] | |||||||||||
Net earned premiums | $ 178 | $ 186 | $ 162 | $ 164 | $ 236 | $ 231 | $ 214 | $ 183 | $ 690 | $ 864 | $ 766 |
Net investment income | 96 | 99 | 101 | 122 | 117 | 94 | 98 | 99 | 418 | 408 | 423 |
Net realized investment gains (losses) | (14) | 7 | 15 | 32 | (24) | (2) | 10 | (13) | 40 | (29) | (26) |
Fair value gains (losses) on financial guaranty variable interest entities | 30 | 38 | 38 | ||||||||
Loss and LAE | (34) | (223) | (72) | (59) | (112) | 9 | (102) | (90) | (388) | (295) | (424) |
Income (loss) before income taxes | 156 | 313 | 150 | 372 | 271 | 480 | 201 | 65 | 991 | 1,017 | 1,431 |
Provision (benefit) for income taxes | 104 | 105 | (3) | 55 | 74 | 1 | 55 | 6 | 261 | 136 | 375 |
Net income (loss) | $ 52 | $ 208 | $ 153 | $ 317 | $ 197 | $ 479 | $ 146 | $ 59 | 730 | 881 | 1,056 |
Net cash flows provided by (used in) operating activities | 433 | (132) | (71) | ||||||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Net earned premiums | (15) | (16) | (21) | ||||||||
Net investment income | (5) | (10) | (32) | ||||||||
Net realized investment gains (losses) | 0 | 1 | 10 | ||||||||
Fair value gains (losses) on financial guaranty variable interest entities | 30 | 38 | 38 | ||||||||
Bargain purchase gain | 0 | 0 | 2 | ||||||||
Loss and LAE | 7 | 7 | 28 | ||||||||
Income (loss) before income taxes | 17 | 20 | 25 | ||||||||
Provision (benefit) for income taxes | 6 | 7 | 8 | ||||||||
Net income (loss) | 11 | 13 | 17 | ||||||||
Net cash flows provided by (used in) operating activities | 19 | 24 | $ 43 | ||||||||
Effect on shareholders’ equity (decrease) increase | $ 2 | $ (9) |
Investments and Cash - Net Inve
Investments and Cash - Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Investment Income | |||||||||||
Gross investment income | $ 427 | $ 417 | $ 433 | ||||||||
Investment expenses | (9) | (9) | (10) | ||||||||
Net investment income | $ 96 | $ 99 | $ 101 | $ 122 | $ 117 | $ 94 | $ 98 | $ 99 | 418 | 408 | 423 |
Fixed Maturities, Managed Externally [Member] | |||||||||||
Net Investment Income | |||||||||||
Gross investment income | 298 | 306 | 335 | ||||||||
Fixed Maturities, Managed Internally [Member] | |||||||||||
Net Investment Income | |||||||||||
Gross investment income | 120 | 103 | 61 | ||||||||
Other Invested Assets, Internally Managed [Member] | |||||||||||
Net Investment Income | |||||||||||
Gross investment income | $ 9 | $ 8 | $ 37 |
Investments and Cash - Net Real
Investments and Cash - Net Realized Investment Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Realized Investment Gains (Losses) | |||||||||||
Gross realized gains on available-for-sale securities (1) | $ 95 | $ 28 | $ 44 | ||||||||
Gross realized losses on available-for-sale securities | (12) | (8) | (15) | ||||||||
Net realized gains (losses) on other invested assets | 0 | 2 | (8) | ||||||||
Other-than-temporary impairment | (43) | (51) | (47) | ||||||||
Net realized investment gains (losses) | $ (14) | $ 7 | $ 15 | $ 32 | $ (24) | $ (2) | $ 10 | $ (13) | $ 40 | $ (29) | $ (26) |
Investments and Cash - Roll For
Investments and Cash - Roll Forward of Credit Losses in the Investment Portfolio (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Roll Forward of Credit Losses in the Investment Portfolio | |||
Credit losses, beginning of period | $ 134 | $ 108 | $ 124 |
Additions for credit losses on securities for which an other-than-temporary-impairment was not previously recognized | 13 | 3 | 3 |
Reductions for securities sold and other settlements | (4) | (4) | (28) |
Additions for credit losses on securities for which an other-than-temporary-impairment was previously recognized | 19 | 27 | 9 |
Credit losses, end of period | $ 162 | $ 134 | $ 108 |
Investments and Cash - Fixed Ma
Investments and Cash - Fixed Maturity Securities and Short Term Investments (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Investments | ||
Percent of Total | 100.00% | 100.00% |
Amortized Cost | $ 10,814 | $ 10,564 |
Gross Unrealized Gains | 554 | 405 |
Gross Unrealized Losses | (67) | (146) |
Fixed-maturity securities | 11,301 | 10,823 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ 152 | $ 17 |
Mortgage backed securities consisting of government-agency obligations, percent | 39.00% | 42.00% |
Fixed Maturities [Member] | ||
Investments | ||
Percent of Total | 94.00% | 94.00% |
Amortized Cost | $ 10,187 | $ 9,974 |
Gross Unrealized Gains | 554 | 405 |
Gross Unrealized Losses | (67) | (146) |
Fixed-maturity securities | 10,674 | 10,233 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ 152 | $ 17 |
Short-term Investments [Member] | ||
Investments | ||
Percent of Total | 6.00% | 6.00% |
Amortized Cost | $ 627 | $ 590 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fixed-maturity securities | 627 | 590 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ 0 | $ 0 |
Obligations of state and political subdivisions [Member] | Fixed Maturities [Member] | ||
Investments | ||
Percent of Total | 51.00% | 50.00% |
Amortized Cost | $ 5,504 | $ 5,269 |
Gross Unrealized Gains | 267 | 202 |
Gross Unrealized Losses | (11) | (39) |
Fixed-maturity securities | 5,760 | 5,432 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ 23 | $ 13 |
US Treasury and Government [Member] | Fixed Maturities [Member] | ||
Investments | ||
Percent of Total | 2.00% | 4.00% |
Amortized Cost | $ 272 | $ 424 |
Gross Unrealized Gains | 14 | 17 |
Gross Unrealized Losses | (1) | (1) |
Fixed-maturity securities | 285 | 440 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ 0 | $ 0 |
Corporate securities [Member] | Fixed Maturities [Member] | ||
Investments | ||
Percent of Total | 18.00% | 15.00% |
Amortized Cost | $ 1,973 | $ 1,612 |
Gross Unrealized Gains | 63 | 32 |
Gross Unrealized Losses | (18) | (31) |
Fixed-maturity securities | 2,018 | 1,613 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ (6) | $ (8) |
Residential Mortgage-Backed Securities (RMBS) [Member] | Fixed Maturities [Member] | ||
Investments | ||
Percent of Total | 8.00% | 9.00% |
Amortized Cost | $ 852 | $ 998 |
Gross Unrealized Gains | 26 | 27 |
Gross Unrealized Losses | (17) | (38) |
Fixed-maturity securities | 861 | 987 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ (1) | $ (21) |
Commercial Mortgage Backed Securities (CMBS) [Member] | Fixed Maturities [Member] | ||
Investments | ||
Percent of Total | 5.00% | 5.00% |
Amortized Cost | $ 540 | $ 575 |
Gross Unrealized Gains | 12 | 13 |
Gross Unrealized Losses | (3) | (5) |
Fixed-maturity securities | 549 | 583 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ 0 | $ 0 |
Asset-backed Securities [Member] | Fixed Maturities [Member] | ||
Investments | ||
Percent of Total | 7.00% | 8.00% |
Amortized Cost | $ 730 | $ 835 |
Gross Unrealized Gains | 166 | 110 |
Gross Unrealized Losses | 0 | 0 |
Fixed-maturity securities | 896 | 945 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ 136 | $ 33 |
Foreign government securities [Member] | Fixed Maturities [Member] | ||
Investments | ||
Percent of Total | 3.00% | 3.00% |
Amortized Cost | $ 316 | $ 261 |
Gross Unrealized Gains | 6 | 4 |
Gross Unrealized Losses | (17) | (32) |
Fixed-maturity securities | 305 | 233 |
AOCI(2) Gain (Loss) on Securities with Other-Than-Temporary Impairment | $ 0 | $ 0 |
Investments and Cash - Fair Val
Investments and Cash - Fair Value of Available-for-Sale Municipal Bond Portfolio by State and Revenue Sources (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Revenue Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | $ 3,546 | $ 3,370 |
Amortized Cost | 3,369 | 3,271 |
Obligations of state and political subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities, available-for-sale, at fair value | 892 | 966 |
Fixed Maturities [Member] | State General Obligation [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 522 | 482 |
Fixed Maturities [Member] | State General Obligation [Member] | New York [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 13 | 13 |
Fixed Maturities [Member] | State General Obligation [Member] | California [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 76 | 73 |
Fixed Maturities [Member] | State General Obligation [Member] | Texas [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 17 | 16 |
Fixed Maturities [Member] | State General Obligation [Member] | Washington [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 93 | 81 |
Fixed Maturities [Member] | State General Obligation [Member] | Florida [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 5 | 16 |
Fixed Maturities [Member] | State General Obligation [Member] | Massachusetts [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 70 | 74 |
Fixed Maturities [Member] | State General Obligation [Member] | Illinois [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 18 | 18 |
Fixed Maturities [Member] | State General Obligation [Member] | Ohio [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 16 | |
Fixed Maturities [Member] | State General Obligation [Member] | Pennsylvania [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 33 | 38 |
Fixed Maturities [Member] | State General Obligation [Member] | District of Columbia [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 43 | |
Fixed Maturities [Member] | State General Obligation [Member] | Arizona [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 0 | |
Fixed Maturities [Member] | State General Obligation [Member] | Georgia [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 0 | |
Fixed Maturities [Member] | State General Obligation [Member] | All others [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 138 | 153 |
Fixed Maturities [Member] | Local General Obligation [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 800 | 614 |
Fixed Maturities [Member] | Local General Obligation [Member] | New York [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 44 | 38 |
Fixed Maturities [Member] | Local General Obligation [Member] | California [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 83 | 62 |
Fixed Maturities [Member] | Local General Obligation [Member] | Texas [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 212 | 186 |
Fixed Maturities [Member] | Local General Obligation [Member] | Washington [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 87 | 68 |
Fixed Maturities [Member] | Local General Obligation [Member] | Florida [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 17 | 11 |
Fixed Maturities [Member] | Local General Obligation [Member] | Massachusetts [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 0 | 0 |
Fixed Maturities [Member] | Local General Obligation [Member] | Illinois [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 51 | 65 |
Fixed Maturities [Member] | Local General Obligation [Member] | Ohio [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 22 | |
Fixed Maturities [Member] | Local General Obligation [Member] | Pennsylvania [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 21 | 17 |
Fixed Maturities [Member] | Local General Obligation [Member] | District of Columbia [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 0 | |
Fixed Maturities [Member] | Local General Obligation [Member] | Arizona [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 3 | |
Fixed Maturities [Member] | Local General Obligation [Member] | Georgia [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 9 | |
Fixed Maturities [Member] | Local General Obligation [Member] | All others [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 263 | 155 |
Fixed Maturities [Member] | Revenue Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 3,546 | 3,370 |
Fixed Maturities [Member] | Revenue Bonds [Member] | New York [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 568 | 570 |
Fixed Maturities [Member] | Revenue Bonds [Member] | California [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 421 | 391 |
Fixed Maturities [Member] | Revenue Bonds [Member] | Texas [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 321 | 316 |
Fixed Maturities [Member] | Revenue Bonds [Member] | Washington [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 214 | 201 |
Fixed Maturities [Member] | Revenue Bonds [Member] | Florida [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 244 | 247 |
Fixed Maturities [Member] | Revenue Bonds [Member] | Massachusetts [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 151 | 149 |
Fixed Maturities [Member] | Revenue Bonds [Member] | Illinois [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 131 | 127 |
Fixed Maturities [Member] | Revenue Bonds [Member] | Ohio [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 102 | |
Fixed Maturities [Member] | Revenue Bonds [Member] | Pennsylvania [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 76 | 58 |
Fixed Maturities [Member] | Revenue Bonds [Member] | District of Columbia [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 85 | |
Fixed Maturities [Member] | Revenue Bonds [Member] | Arizona [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 122 | |
Fixed Maturities [Member] | Revenue Bonds [Member] | Georgia [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 104 | |
Fixed Maturities [Member] | Revenue Bonds [Member] | All others [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 1,233 | 1,085 |
Fixed Maturities [Member] | Transportation [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 955 | 860 |
Amortized Cost | 889 | 824 |
Fixed Maturities [Member] | Water and Sewer [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 670 | 545 |
Amortized Cost | 641 | 531 |
Fixed Maturities [Member] | Tax backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 600 | 617 |
Amortized Cost | 570 | 601 |
Fixed Maturities [Member] | Higher education [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 515 | 513 |
Amortized Cost | 492 | 499 |
Fixed Maturities [Member] | Municipal utilities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 324 | 365 |
Amortized Cost | 315 | 360 |
Fixed Maturities [Member] | Healthcare [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 308 | 310 |
Amortized Cost | 293 | 298 |
Fixed Maturities [Member] | All Others [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 174 | 160 |
Amortized Cost | 169 | 158 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 4,868 | 4,466 |
Amortized Cost | 4,646 | 4,344 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | New York [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 625 | 621 |
Amortized Cost | 598 | 604 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | California [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 580 | 526 |
Amortized Cost | 527 | 497 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | Texas [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 550 | 518 |
Amortized Cost | 528 | 503 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | Washington [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 394 | 350 |
Amortized Cost | 381 | 348 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | Florida [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 266 | 274 |
Amortized Cost | 254 | 266 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | Massachusetts [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 221 | 223 |
Amortized Cost | 208 | 215 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | Illinois [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 200 | 210 |
Amortized Cost | 189 | 205 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | Ohio [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 140 | |
Amortized Cost | 136 | |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | Pennsylvania [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 130 | 113 |
Amortized Cost | 125 | 111 |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | District of Columbia [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 128 | |
Amortized Cost | 123 | |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | Arizona [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 125 | |
Amortized Cost | 122 | |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | Georgia [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 113 | |
Amortized Cost | 109 | |
Fixed Maturities [Member] | Obligations of state and political subdivisions [Member] | All others [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed-maturity securities | 1,634 | 1,393 |
Amortized Cost | $ 1,577 | $ 1,364 |
Investments and Cash - Gross Un
Investments and Cash - Gross Unrealized Loss by Length of Time (Details) $ in Millions | Dec. 31, 2017USD ($)Security | Dec. 31, 2016USD ($)Security |
Less than 12 months | ||
Fair value | $ 806 | $ 2,325 |
Unrealized loss | (10) | (83) |
12 months or more | ||
Fair Value | 975 | 332 |
Unrealized loss | (57) | (63) |
Total | ||
Fair value | 1,781 | 2,657 |
Unrealized loss | $ (67) | $ (146) |
Number of securities | ||
Less than 12 months (in securities) | Security | 244 | 622 |
12 months or more (in securities) | Security | 264 | 60 |
Total (in securities) | Security | 499 | 676 |
Number of securities with OTTI | ||
Less than 12 months (in securities) | Security | 17 | 8 |
12 months or more (in securities) | Security | 15 | 9 |
Total (in securities) | Security | 31 | 17 |
Obligations of state and political subdivisions [Member] | ||
Less than 12 months | ||
Fair value | $ 166 | $ 1,110 |
Unrealized loss | (4) | (38) |
12 months or more | ||
Fair Value | 281 | 6 |
Unrealized loss | (7) | (1) |
Total | ||
Fair value | 447 | 1,116 |
Unrealized loss | (11) | (39) |
US Treasury and Government [Member] | ||
Less than 12 months | ||
Fair value | 151 | 87 |
Unrealized loss | 0 | (1) |
12 months or more | ||
Fair Value | 18 | 0 |
Unrealized loss | (1) | 0 |
Total | ||
Fair value | 169 | 87 |
Unrealized loss | (1) | (1) |
Corporate securities [Member] | ||
Less than 12 months | ||
Fair value | 201 | 492 |
Unrealized loss | (1) | (11) |
12 months or more | ||
Fair Value | 240 | 118 |
Unrealized loss | (17) | (20) |
Total | ||
Fair value | 441 | 610 |
Unrealized loss | (18) | (31) |
Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Less than 12 months | ||
Fair value | 191 | 391 |
Unrealized loss | (5) | (23) |
12 months or more | ||
Fair Value | 213 | 94 |
Unrealized loss | (12) | (15) |
Total | ||
Fair value | 404 | 485 |
Unrealized loss | (17) | (38) |
Commercial Mortgage Backed Securities (CMBS) [Member] | ||
Less than 12 months | ||
Fair value | 29 | 165 |
Unrealized loss | 0 | (5) |
12 months or more | ||
Fair Value | 80 | 0 |
Unrealized loss | (3) | 0 |
Total | ||
Fair value | 109 | 165 |
Unrealized loss | (3) | (5) |
Asset-backed Securities [Member] | ||
Less than 12 months | ||
Fair value | 48 | 36 |
Unrealized loss | 0 | 0 |
12 months or more | ||
Fair Value | 3 | 0 |
Unrealized loss | 0 | 0 |
Total | ||
Fair value | 51 | 36 |
Unrealized loss | 0 | 0 |
Foreign government securities [Member] | ||
Less than 12 months | ||
Fair value | 20 | 44 |
Unrealized loss | 0 | (5) |
12 months or more | ||
Fair Value | 140 | 114 |
Unrealized loss | (17) | (27) |
Total | ||
Fair value | 160 | 158 |
Unrealized loss | $ (17) | $ (32) |
Investments and Cash - Distribu
Investments and Cash - Distribution of Fixed-Maturity Securities by Contractual Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Estimated Fair Value | ||
Amortized Cost | $ 10,814 | $ 10,564 |
Estimated fair value | 11,301 | 10,823 |
Fixed Maturities [Member] | ||
Amortized Cost | ||
Due within one year | 254 | |
Due after one year through five years | 1,574 | |
Due after five years through 10 years | 2,368 | |
Due after 10 years | 4,599 | |
Estimated Fair Value | ||
Due within one year | 256 | |
Due after one year through five years | 1,604 | |
Due after five years through 10 years | 2,443 | |
Due after 10 years | 4,961 | |
Amortized Cost | 10,187 | 9,974 |
Estimated fair value | 10,674 | 10,233 |
Fixed Maturities [Member] | Residential Mortgage-Backed Securities (RMBS) [Member] | ||
Estimated Fair Value | ||
Amortized Cost | 852 | 998 |
Estimated fair value | 861 | 987 |
Fixed Maturities [Member] | Commercial Mortgage Backed Securities (CMBS) [Member] | ||
Estimated Fair Value | ||
Amortized Cost | 540 | 575 |
Estimated fair value | $ 549 | $ 583 |
Investments and Cash - Internal
Investments and Cash - Internally Managed Investment Portfolio (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Cost-method Investments [Line Items] | ||
Fixed-maturity securities | $ 11,301 | $ 10,823 |
Other invested assets | 94 | 162 |
Total investment portfolio | 11,395 | 10,985 |
Fixed Maturities, Managed Internally [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Fixed-maturity securities | 1,231 | 1,492 |
Other Invested Assets, Internally Managed [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Other invested assets | 20 | 107 |
Alternative Investments [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Other invested assets | 69 | 48 |
Other [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Other invested assets | 5 | 7 |
Internally Managed Portfolio [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Total investment portfolio | $ 1,325 | $ 1,654 |
Investments and Cash - Narrativ
Investments and Cash - Narrative (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2017USD ($) | Dec. 31, 2017USD ($)Security | Dec. 31, 2016USD ($)Security | |
Investment [Line Items] | |||
Percentage of decline in market value of security below amortized cost, considered for assessing impairment of investments | 20.00% | ||
Continuous period of decline in market value below amortized costs considered for assessing impairment of investments | 6 months | ||
Continuous period of decline in market value of security, considered for assessing impairment of investments | 12 months | ||
Accrued investment income | $ 97 | $ 91 | |
Number of outside managers managing investment portfolio | 6 | ||
Number of securities with unrealized losses greater than 10% of book value for 12 months or more | Security | 28 | 41 | |
Total unrealized losses for securities having losses greater than 10% of book value for 12 months or more | $ 27 | $ 59 | |
Assets held-in-trust | 269 | 285 | |
Fair market value of company's pledged securities | 18 | 116 | |
Investments that were non-income producing during period | $ 0 | $ 0 | |
Investments [Member] | Available-for-sale Securities [Member] | |||
Investment [Line Items] | |||
Percentage of installment premiums denominated in currencies other than the U.S. dollar | 99.20% | ||
Investments [Member] | Internally Managed Portfolio [Member] | |||
Investment [Line Items] | |||
Percentage of installment premiums denominated in currencies other than the U.S. dollar | 12.00% | 15.00% | |
Assured Guaranty Subsidiaries [Member] | |||
Investment [Line Items] | |||
Assets held-in-trust | $ 1,677 | $ 1,420 | |
Future Equity Investments [Member] | |||
Investment [Line Items] | |||
Long-term Purchase Commitment, Amount | $ 100 |
Investments and Cash - Cash and
Investments and Cash - Cash and Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Investments, Debt and Equity Securities [Abstract] | ||||
Cash | $ 144 | $ 118 | $ 166 | $ 75 |
Restricted Cash | 0 | 9 | 0 | 19 |
Cash and Restricted Cash | $ 144 | $ 127 | $ 166 | $ 94 |
Insurance Company Regulatory116
Insurance Company Regulatory Requirements - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 21, 2017 | Jul. 01, 2016 | Jul. 17, 2013 | |
Statutory Accounting Practices [Line Items] | ||||||
Deferred tax assets, adjusted surplus threshold, realization period | 3 years | |||||
Deferred tax assets, adjusted surplus threshold, percent | 15.00% | |||||
Common stock, shares outstanding | 116,020,852 | 127,988,230 | ||||
Assured Guaranty Re [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Policyholders' surplus | $ 1,294 | $ 1,255 | ||||
AGC [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Policyholders' surplus | 2,073 | 1,896 | ||||
Contingency reserves, release of assets | 134 | 152 | ||||
Authorized repurchase amount | $ 200 | |||||
MAC [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Policyholders' surplus | 270 | 487 | ||||
Contingency reserves, release of reserves | 62 | 53 | ||||
AGM [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Policyholders' surplus | 2,254 | 2,321 | ||||
Contingency reserves, release of assets | 246 | 175 | ||||
Subsidiaries [Member] | Municipal Assurance Corp Holdings [Member] | AGM [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Holding company's percent ownership of common stock | 61.00% | |||||
Subsidiaries [Member] | Municipal Assurance Corp Holdings [Member] | MAC [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Holding company's percent ownership of common stock | 100.00% | |||||
Subsidiaries [Member] | Municipal Assurance Corp Holdings [Member] | AGC [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Holding company's percent ownership of common stock | 39.00% | |||||
Affiliated Entity [Member] | MAC [Member] | Municipal Assurance Corp Holdings [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Repayment of surplus notes | 0 | 300 | $ 0 | |||
Affiliated Entity [Member] | MAC [Member] | AGM [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Repayment of surplus notes | $ 0 | $ 100 | $ 0 | |||
New York [Member] | Assured Guaranty Municipal Corp And Municipal Assurance Corp [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Threshold for dividend payments as a percentage of policyholder surplus | 10.00% | |||||
Threshold for dividend payments, percentage of adjusted net investment income | 100.00% | |||||
New York [Member] | MAC [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Amount available for distribution, current year | $ 27 | |||||
Amount available for distribution, next fiscal quarter | 3 | |||||
New York [Member] | AGM [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Amount available for distribution, current year | 190 | |||||
Amount available for distribution, next fiscal quarter | $ 73 | |||||
Maryland [Member] | AGC [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Threshold for dividend payments as a percentage of policyholder surplus | 10.00% | |||||
Threshold for dividend payments, percentage of adjusted net investment income | 100.00% | |||||
Amount available for distribution, next fiscal quarter | $ 54 | |||||
Maryland [Member] | AGUS [Member] | AGC [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Amount available for distribution, current year | 133 | |||||
Bermuda [Member] | Assured Guaranty Re [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Amount available for distribution, current year | $ 324 | |||||
Dividend payment restrictions, percentage of statutory capital | 15.00% | |||||
Dividend restrictions on statutory capital and surplus (as a percent) | 25.00% | |||||
Capital distributions | $ 128 | |||||
Statutory surplus | 324 | |||||
Unencumbered assets | $ 554 | |||||
Minimum [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Rate at which present value of expected losses are discounted (as a percent) | 4.00% | |||||
Maximum [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Rate at which present value of expected losses are discounted (as a percent) | 4.50% | |||||
CIFG Holding Inc. [Member] | AGC [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Policyholders' surplus | $ 287 |
Insurance Company Regulatory117
Insurance Company Regulatory Requirements - Insurance Regulatory Amounts Reported (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 01, 2016 | Jul. 17, 2013 | |
AGM [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Policyholders' surplus | $ 2,254 | $ 2,321 | |||
Net Income (Loss) | 152 | 191 | $ 217 | ||
MAC [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Policyholders' surplus | 270 | 487 | |||
Net Income (Loss) | 32 | 142 | 102 | ||
AGC [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Policyholders' surplus | 2,073 | 1,896 | |||
Net Income (Loss) | 219 | 108 | (92) | ||
Assured Guaranty Re [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Policyholders' surplus | 1,294 | 1,255 | |||
Net Income (Loss) | $ 156 | $ 139 | $ 51 | ||
Subsidiaries [Member] | AGM [Member] | Municipal Assurance Corp Holdings [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Holding company's percent ownership of common stock | 61.00% | ||||
Subsidiaries [Member] | MAC [Member] | Municipal Assurance Corp Holdings [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Holding company's percent ownership of common stock | 100.00% | ||||
Subsidiaries [Member] | AGC [Member] | Municipal Assurance Corp Holdings [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Holding company's percent ownership of common stock | 39.00% | ||||
MBIA UK [Member] | AGC [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Policyholders' surplus | $ 36 | ||||
CIFG Holding Inc. [Member] | AGC [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Policyholders' surplus | $ 287 |
Insurance Company Regulatory118
Insurance Company Regulatory Requirements - Dividends and Surplus Notes By Insurance Company Subsidiaries (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statutory Accounting Practices [Line Items] | |||
Dividends paid | $ 70 | $ 69 | $ 72 |
AGUS [Member] | Affiliated Entity [Member] | AGC [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Dividends paid | 107 | 79 | 90 |
AGMH [Member] | Affiliated Entity [Member] | AGM [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Dividends paid | 196 | 247 | 215 |
Repayment of surplus notes | 0 | 0 | 25 |
Statutory Accounting Practices, Intercompany Transaction, Redemption of Common Stock | 101 | 300 | 0 |
Assured Guaranty LTD [Member] | Affiliated Entity [Member] | Assured Guaranty Re [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Dividends paid | 125 | 100 | 150 |
AGM [Member] | Affiliated Entity [Member] | MAC [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Repayment of surplus notes | 0 | 100 | 0 |
Municipal Assurance Corp Holdings [Member] | Affiliated Entity [Member] | MAC [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Dividends paid | 36 | 0 | 0 |
Repayment of surplus notes | 0 | 300 | 0 |
Statutory Accounting Practices, Intercompany Transaction, Redemption of Common Stock | $ 250 | $ 0 | $ 0 |
Income Taxes - Summary of Tax A
Income Taxes - Summary of Tax Act Effect (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Transition tax | $ 93 |
Foreign tax credit realized | (31) |
Write down of unremitted earnings | (38) |
Net impact of repatriation | 24 |
Write down of deferred tax asset due to tax rate change | 37 |
Net impact of Tax Act | $ 61 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Reconciliation and Pretax Income (Loss) and Revenue by Tax Jurisdiction (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pre-tax Income Taxes and Revenue [Line Items] | |||||||||||
Expected tax provision (benefit) at statutory rates in taxable jurisdictions | $ 300 | $ 316 | $ 443 | ||||||||
Tax-exempt interest | (49) | (49) | (54) | ||||||||
Goodwill impairment and gain on bargain purchase price | (20) | (125) | (19) | ||||||||
Change in liability for uncertain tax positions | (26) | 11 | 12 | ||||||||
Effect of provision to tax return filing adjustments | (8) | (15) | (11) | ||||||||
State taxes | 9 | 3 | 1 | ||||||||
Effect of Tax Act | 61 | 0 | 0 | ||||||||
Other | (6) | (5) | 3 | ||||||||
Total provision (benefit) for income taxes | $ 104 | $ 105 | $ (3) | $ 55 | $ 74 | $ 1 | $ 55 | $ 6 | $ 261 | $ 136 | $ 375 |
Effective tax rate (as a percent) | 26.30% | 13.40% | 26.20% | ||||||||
Income (loss) before provision for income taxes | $ 156 | $ 313 | $ 150 | $ 372 | $ 271 | $ 480 | $ 201 | $ 65 | $ 991 | $ 1,017 | $ 1,431 |
Revenue | 1,739 | 1,677 | 2,207 | ||||||||
United States [Member] | |||||||||||
Pre-tax Income Taxes and Revenue [Line Items] | |||||||||||
Income (loss) before provision for income taxes | 873 | 921 | 1,284 | ||||||||
Revenue | 1,543 | 1,442 | 1,853 | ||||||||
Bermuda [Member] | |||||||||||
Pre-tax Income Taxes and Revenue [Line Items] | |||||||||||
Income (loss) before provision for income taxes | 145 | 126 | 177 | ||||||||
Revenue | 216 | 239 | 361 | ||||||||
United Kingdom [Member] | |||||||||||
Pre-tax Income Taxes and Revenue [Line Items] | |||||||||||
Income (loss) before provision for income taxes | (27) | (30) | (30) | ||||||||
Revenue | $ (20) | $ (4) | $ (7) |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Unrealized losses on credit derivative financial instruments, net | $ 20 | $ 66 |
Unearned premium reserves, net | 124 | 229 |
Loss and LAE reserve | 0 | 216 |
Tax and loss bonds | 0 | 50 |
Alternative minimum tax credit | 59 | 17 |
Foreign tax credit | 43 | 20 |
DAC | 0 | 29 |
Investment basis difference | 63 | 76 |
Deferred compensation | 21 | 40 |
Net operating loss | 38 | 64 |
FG VIE | 13 | 14 |
Other | 14 | 29 |
Total deferred income tax assets | 395 | 850 |
Deferred tax liabilities: | ||
Contingency reserves | 0 | 82 |
Public debt | 53 | 91 |
Unrealized appreciation on investments | 91 | 84 |
Unrealized gains on CCS | 13 | 22 |
Market discount | 28 | 22 |
Loss and LAE reserve | 27 | 0 |
DAC | 12 | 0 |
Foreign BU | 16 | 3 |
Other | 14 | 30 |
Total deferred income tax liabilities | 254 | 334 |
Less: Valuation allowance | 43 | 19 |
Net deferred income tax asset | $ 98 | $ 497 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance as of January 1, | $ 50 | $ 40 | $ 28 |
Effect of provision to tax return filing adjustments | 8 | 6 | 10 |
Increase in unrecognized tax positions as a result of position taken during the current period | 1 | 4 | 2 |
Decrease in unrecognized tax positions as a result of settlement of positions taken during the prior period | (31) | 0 | 0 |
Balance as of December 31, | $ 28 | $ 50 | $ 40 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | Apr. 01, 2017 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2017 | Jul. 01, 2016 |
Income Taxes [Line Items] | |||||||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit) | $ 61 | ||||||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Change in Tax Rate, Deferred Tax Liability, Provisional Income Tax (Expense) Benefit | (37) | ||||||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense (Benefit) | $ 24 | ||||||
Document Fiscal Year Focus | 2,017 | ||||||
Foreign tax credit | $ 31 | ||||||
Less: Valuation allowance | $ 43 | $ 19 | |||||
Realization assessment period | 3 years | ||||||
Interest and penalties related to uncertain tax positions | $ 1 | 2 | $ 1 | ||||
Accrued interest for uncertain tax positions | 3 | $ 7 | |||||
Tax Adjustments, Settlements, and Unusual Provisions | $ 37 | ||||||
FTC from previous acquisitions | 12 | ||||||
FTC due to Tax Act | 31 | ||||||
FTC that are more than likely to not be utilized | $ 43 | ||||||
Foreign Tax Authority [Member] | |||||||
Income Taxes [Line Items] | |||||||
Corporate tax rate | 35.00% | ||||||
United Kingdom [Member] | |||||||
Income Taxes [Line Items] | |||||||
Corporate tax rate | 19.00% | 19.25% | 20.00% | ||||
Value added tax rate | 20.00% | ||||||
United States [Member] | |||||||
Income Taxes [Line Items] | |||||||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit) | $ 61 | ||||||
Alternative Minimum Tax Credit Carryforward [Member] | |||||||
Income Taxes [Line Items] | |||||||
Foreign tax credit | 59 | ||||||
CIFG Holding Inc. [Member] | |||||||
Income Taxes [Line Items] | |||||||
Operating Loss Carryforwards | $ 182 | $ 189 |
Reinsurance and Other Monoli124
Reinsurance and Other Monoline Exposures - Effect of Reinsurance on Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Premiums Written: | |||||||||||
Direct | $ 297 | $ 165 | $ 164 | ||||||||
Assumed | 10 | (11) | 17 | ||||||||
Ceded | 18 | (17) | 10 | ||||||||
Net | 325 | 137 | 191 | ||||||||
Premiums Earned: | |||||||||||
Direct | 693 | 887 | 792 | ||||||||
Assumed | 27 | 27 | 40 | ||||||||
Ceded | (30) | (50) | (66) | ||||||||
Net | $ 178 | $ 186 | $ 162 | $ 164 | $ 236 | $ 231 | $ 214 | $ 183 | 690 | 864 | 766 |
Loss and LAE: | |||||||||||
Direct | 404 | 327 | 399 | ||||||||
Assumed | 11 | 0 | 45 | ||||||||
Ceded | (27) | (32) | (20) | ||||||||
Net | $ 34 | $ 223 | $ 72 | $ 59 | $ 112 | $ (9) | $ 102 | $ 90 | $ 388 | $ 295 | $ 424 |
Reinsurance and Other Monoli125
Reinsurance and Other Monoline Exposures - Exposure by Reinsurer (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Ceded Credit Risk [Line Items] | |||
Assumed Premiums, Net of Commissions | $ 53 | $ 65 | |
Assumed | 10 | (11) | $ 17 |
Ceded premium, net of commissions | (42) | (46) | |
Assumed expected loss to be paid | (71) | (70) | |
Ceded expected loss to be paid | 29 | 87 | |
Insured Financial Obligations, Ceded Par Outstanding | 4,434 | 11,156 | |
Assumed par outstanding | 8,383 | 13,264 | |
Second-to pay insured par outstanding | 6,605 | 11,539 | |
Non-affiliated Reinsurers [Member] | |||
Ceded Credit Risk [Line Items] | |||
Collateral posted by non-affiliated reinsurers | 118 | 387 | |
Below Investment Grade, Rating Withdrawn Or Not Rated Reinsurer [Member] | External Credit Rating, Non Investment Grade [Member] | |||
Ceded Credit Risk [Line Items] | |||
Second-to pay insured par outstanding | 204 | 788 | |
Ceded par outstanding | $ 296 | $ 384 |
Reinsurance and Other Monoli126
Reinsurance and Other Monoline Exposures - Net Effect of Commutations of Ceded and Cancellations of Assumed Reinsurance Contracts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Insurance [Abstract] | |||
Increase (decrease) in net unearned premium reserve | $ 82 | $ 0 | $ 23 |
Increase (decrease) in net par outstanding | 5,107 | 28 | 855 |
Commutation gains (losses) | $ 328 | $ 8 | $ 28 |
Reinsurance and Other Monoli127
Reinsurance and Other Monoline Exposures - Reinsurance and Other Monoline Exposures (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Ceded Credit Risk [Line Items] | ||
Ceded Premium, net of Commissions | $ 42 | $ 46 |
Assumed Expected Loss to be Paid | 71 | 70 |
Ceded Expected Loss to be Paid | 29 | 87 |
Assumed par outstanding | 8,383 | 13,264 |
Second-to pay insured par outstanding | 6,605 | 11,539 |
Below Investment Grade, Rating Withdrawn Or Not Rated Reinsurer [Member] | External Credit Rating, Non Investment Grade [Member] | ||
Ceded Credit Risk [Line Items] | ||
Ceded par outstanding | 296 | 384 |
Second-to pay insured par outstanding | $ 204 | $ 788 |
Reinsurance and Other Monoli128
Reinsurance and Other Monoline Exposures - Narrative (Details) | Feb. 02, 2018USD ($) | Sep. 30, 2017commutation | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2018USD ($) | Jan. 01, 2016USD ($) |
Ceded Credit Risk [Line Items] | ||||||||||
Number of Commutation Agreements | commutation | 2 | |||||||||
Commutation Agreement Exposure, Percent | 97.00% | 97.00% | ||||||||
Gain (loss) on derivatives | $ (800,000) | $ (27,000,000) | $ (3,000,000) | |||||||
Document Fiscal Year Focus | 2,017 | |||||||||
Fixed-maturity securities | $ 11,301,000,000 | 10,823,000,000 | $ 11,301,000,000 | |||||||
Reinsurance balances payable, net | 61,000,000 | 64,000,000 | 61,000,000 | |||||||
Assured Guaranty Re [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Amounts could be required to pay if third party exercised right to recapture business | 46,000,000 | |||||||||
AGC [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Amounts could be required to pay if third party exercised right to recapture business | 15,000,000 | |||||||||
Fixed Maturities [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Fixed-maturity securities | 10,674,000,000 | $ 10,233,000,000 | 10,674,000,000 | |||||||
Fixed Maturities [Member] | National [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Fixed-maturity securities | 91,000,000 | 91,000,000 | ||||||||
Fixed Maturities [Member] | Ambac [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Fixed-maturity securities | 68,000,000 | 68,000,000 | ||||||||
Fixed Maturities [Member] | Other [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Fixed-maturity securities | 8,000,000 | 8,000,000 | ||||||||
Excess of Loss Reinsurance Facility [Member] | AGM, AGC and MAC [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Reinsurance retention policy, excess retention, amount reinsured | 360,000,000 | |||||||||
Minimum net losses required for attachment of excess of loss reinsurance facility | $ 800,000,000 | $ 1,250,000,000 | ||||||||
Amount of losses covered under the facility | 400,000,000 | $ 400,000,000 | ||||||||
Remaining amount of losses covered under the facility | 220,000,000 | |||||||||
Premiums paid during the period | 9,000,000 | |||||||||
Remaining insurance premium payable | $ 3,200,000 | |||||||||
Excess of Loss Reinsurance Facility [Member] | AGM, AGC and MAC [Member] | Subsequent Event [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Reinsurance retention policy, excess retention, amount reinsured | $ 180,000,000 | |||||||||
Premiums paid during the period | $ 3,200,000 | |||||||||
Reinsurance of SGI Insured Portfolio [Member] | AGC [Member] | Subsequent Event [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Reinsurance retention policy, excess retention, amount reinsured | $ 14,500,000,000 | |||||||||
Premiums paid during the period | $ 360,000,000 | |||||||||
Reinsurance Retention Policy, Quota Share Basis, Percent | 100.00% | |||||||||
Reinsurance balances payable, net | $ 55,000,000 | |||||||||
Standard & Poor's, A Rating [Member] | Uncollateralized [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Guaranty Liabilities | 4,000,000 | 4,000,000 | ||||||||
AM Best, A- Rating [Member] | Uncollateralized [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Guaranty Liabilities | $ 9,000,000 | $ 9,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 06, 2017 | |
Related Party Transaction [Line Items] | ||||
Net expenses from transactions with related parties | $ 4,100,000 | $ 4,200,000 | $ 1,900,000 | |
Accounts payable to related parties | 0 | 0 | ||
Accounts Receivable, Related Parties | $ 0 | $ 0 | ||
Wellington Management Company LLP [Member] | Common Stock [Member] | Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage by noncontrolling owners | 5.00% | |||
BlackRock [Member] | Common Stock [Member] | Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage by noncontrolling owners | 5.00% | |||
Chief Executive Officer [Member] | ||||
Related Party Transaction [Line Items] | ||||
Share repurchase program, repurchased amount (in shares) | 297,131 | |||
Deferred equity compensation (in shares) | 297,131 | |||
General Counsel [Member] | ||||
Related Party Transaction [Line Items] | ||||
Share repurchase program, repurchased amount (in shares) | 23,062 | |||
Shares to be paid in the future (in shares) | 23,062 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Rental Payments (Details) $ in Millions | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 8 |
2,019 | 9 |
2,020 | 9 |
2,021 | 8 |
2,022 | 9 |
Thereafter | 80 |
Total | $ 123 |
Commitments and Contingencie131
Commitments and Contingencies - Narrative (Details) ft² in Thousands, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017USD ($)ft² | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Apr. 10, 2015USD ($) | Nov. 28, 2011USD ($)Transaction | |
Commitments and Contingencies Legal Proceedings | |||||
Rent expense | $ 8.7 | $ 13.4 | $ 10.5 | ||
AGM [Member] | |||||
Commitments and Contingencies Legal Proceedings | |||||
Lease space | ft² | 104 | ||||
Renewal term | 5 years | ||||
LBIE vs. AG Financial Products [Member] | AG Financial Products Inc. [Member] | Guarantee Obligations [Member] | |||||
Commitments and Contingencies Legal Proceedings | |||||
Number of credit derivative transactions for which termination payment is alleged to be improperly calculated | Transaction | 9 | ||||
LBIE vs. AG Financial Products [Member] | Lehman Brothers International (Europe) [Member] | |||||
Commitments and Contingencies Legal Proceedings | |||||
Number of credit derivative transactions alleged to be improperly terminated | Transaction | 28 | ||||
Positive Outcome of Litigation [Member] | Pending Litigation [Member] | LBIE vs. AG Financial Products [Member] | AG Financial Products Inc. [Member] | |||||
Commitments and Contingencies Legal Proceedings | |||||
Termination payments which LBIE owes to AG Financial Products as per calculation of AG Financial Products | $ 29 | ||||
Positive Outcome of Litigation [Member] | Pending Litigation [Member] | LBIE vs. AG Financial Products [Member] | Lehman Brothers International (Europe) [Member] | |||||
Commitments and Contingencies Legal Proceedings | |||||
Termination payments which AG Financial Products owes to LBIE as per calculation of LBIE | $ 1,400 | ||||
Positive Outcome of Litigation [Member] | Minimum [Member] | LBIE vs. AG Financial Products [Member] | Lehman Brothers International (Europe) [Member] | |||||
Commitments and Contingencies Legal Proceedings | |||||
Gain contingency, unrecorded amount | $ 200 | ||||
Positive Outcome of Litigation [Member] | Maximum [Member] | LBIE vs. AG Financial Products [Member] | Lehman Brothers International (Europe) [Member] | |||||
Commitments and Contingencies Legal Proceedings | |||||
Gain contingency, unrecorded amount | $ 500 |
Long-Term Debt and Credit Fa132
Long-Term Debt and Credit Facilities - Narrative (Details) | Jun. 20, 2014USD ($) | Apr. 07, 2008 | Dec. 20, 2006USD ($)period | May 18, 2004USD ($) | Jun. 30, 2003 | Dec. 31, 2017USD ($)extension | Dec. 31, 2016USD ($) | Oct. 25, 2013USD ($) | Dec. 31, 2012USD ($) | Nov. 22, 2006USD ($) | Apr. 08, 2005USD ($)Trust | Jul. 31, 2003USD ($) | Nov. 26, 2002USD ($) | Dec. 19, 2001USD ($) |
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 1,558,000,000 | $ 1,589,000,000 | ||||||||||||
Intercompany debt | 0 | 0 | ||||||||||||
AGC Trust Preferred Securities [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Basis points | 2.50% | |||||||||||||
AGM Trust Preferred Securities [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Basis points | 2.00% | |||||||||||||
AGUS [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | 850,000,000 | 850,000,000 | ||||||||||||
AGM and AGC [Member] | AGM CPS securities [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum stock purchase obligation of each custodial trust | $ 200,000,000 | |||||||||||||
Number of custodial trusts | Trust | 4 | |||||||||||||
Aggregate maximum stock purchase obligation of the custodial trusts | $ 50,000,000 | |||||||||||||
AGM [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | 6,000,000 | 9,000,000 | ||||||||||||
AGM [Member] | AGM CPS securities [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Rate basis for income distributions | one-month LIBOR | |||||||||||||
AGC [Member] | AGM CPS securities [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Rate basis for income distributions | one-month LIBOR | |||||||||||||
AGMH [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | 730,000,000 | 730,000,000 | ||||||||||||
Junior Subordinated Debt [Member] | AGMH [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate of debt (as a percent) | 6.40% | |||||||||||||
Aggregate principal amount | $ 300,000,000 | 300,000,000 | $ 300,000,000 | |||||||||||
Interest rate, added to base rate (as a percent) | 2.215% | |||||||||||||
Number of times repayment date may be extended | extension | 4 | |||||||||||||
Junior Subordinated Debt [Member] | Maximum [Member] | AGMH [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Period for increments of repayment date extension | 5 years | |||||||||||||
Line of Credit [Member] | Revolving Credit Facility [Member] | Wilbur L. Ross [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate, as a percentage of Federal short-term or mid-term interest rate | 100.00% | |||||||||||||
Notes Payable, Other Payables [Member] | AGM [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 6,000,000 | 9,000,000 | ||||||||||||
5.6% Notes [Member] | Notes Payable, Other Payables [Member] | AGMH [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate of debt (as a percent) | 5.60% | |||||||||||||
Aggregate principal amount | $ 100,000,000 | 100,000,000 | $ 100,000,000 | |||||||||||
6.25% Notes [Member] | Notes Payable, Other Payables [Member] | AGMH [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate of debt (as a percent) | 6.25% | |||||||||||||
Aggregate principal amount | $ 230,000,000 | 230,000,000 | $ 230,000,000 | |||||||||||
6.875% QUIBS [Member] | Corporate securities [Member] | AGMH [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 100,000,000 | 100,000,000 | $ 100,000,000 | |||||||||||
Enhanced Junior Subordinated Debentures [Member] | Junior Subordinated Debt [Member] | AGUS [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 150,000,000 | |||||||||||||
Interest rate, added to base rate (as a percent) | 2.38% | |||||||||||||
Enhanced Junior Subordinated Debentures [Member] | Junior Subordinated Debt [Member] | AGMH [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Number of times interest payment may be deferred | 1 | |||||||||||||
Number of consecutive periods for which interest payments may be deferred | period | 1 | |||||||||||||
Period for which interest payment may be deferred (in years) | 10 years | |||||||||||||
Period prior to final repayment date before which debt cannot be repaid, redeemed, repurchased or defeased (in years) | 20 years | |||||||||||||
7% Senior Notes [Member] | Senior Notes [Member] | AGUS [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 200,000,000 | $ 200,000,000 | 200,000,000 | |||||||||||
Net proceeds from issuance of debt | $ 197,000,000 | |||||||||||||
Effective interest rate of debt (as a percent) | 6.40% | |||||||||||||
5% Senior Notes [Member] | Senior Notes [Member] | AGUS [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate of debt (as a percent) | 5.00% | |||||||||||||
Aggregate principal amount | $ 500,000,000 | $ 500,000,000 | 500,000,000 | |||||||||||
Net proceeds from issuance of debt | $ 495,000,000 | |||||||||||||
Intercompany Credit Facility [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | Wilbur L. Ross [Member] | Assured Guaranty LTD [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Related party, maximum borrowing capacity | $ 225,000,000 | |||||||||||||
Amounts currently outstanding | 0 | |||||||||||||
MAC [Member] | AGUS [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayments of Debt | 10,000,000 | $ 20,000,000 | ||||||||||||
Long-term Debt | $ 60,000,000 | $ 90,000,000 |
Long-Term Debt and Credit Fa133
Long-Term Debt and Credit Facilities - Principal and Carrying Amounts of Debt (Details) - USD ($) | 12 Months Ended | ||||||||
Dec. 31, 2017 | Dec. 31, 2016 | Jun. 20, 2014 | Dec. 20, 2006 | Nov. 22, 2006 | May 18, 2004 | Jul. 31, 2003 | Nov. 26, 2002 | Dec. 19, 2001 | |
Debt Instrument [Line Items] | |||||||||
Principal | $ 1,558,000,000 | $ 1,589,000,000 | |||||||
Carrying Value | 1,292,000,000 | 1,306,000,000 | |||||||
AGUS [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 850,000,000 | 850,000,000 | |||||||
Carrying Value | 843,000,000 | 843,000,000 | |||||||
AGMH [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 730,000,000 | 730,000,000 | |||||||
Carrying Value | 461,000,000 | 453,000,000 | |||||||
AGM [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 6,000,000 | 9,000,000 | |||||||
Carrying Value | 6,000,000 | 10,000,000 | |||||||
Senior Notes [Member] | AGUS [Member] | 7% Senior Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 200,000,000 | 200,000,000 | $ 200,000,000 | ||||||
Carrying Value | $ 197,000,000 | 197,000,000 | |||||||
Senior Notes [Member] | AGUS [Member] | 5% Senior Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate of debt (as a percent) | 5.00% | ||||||||
Principal | $ 500,000,000 | 500,000,000 | $ 500,000,000 | ||||||
Carrying Value | 496,000,000 | 496,000,000 | |||||||
Enhanced Junior Subordinated Debentures [Member] | AGUS [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 150,000,000 | 150,000,000 | |||||||
Carrying Value | 150,000,000 | 150,000,000 | |||||||
Corporate securities [Member] | AGMH [Member] | 6.875% QUIBS [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 100,000,000 | 100,000,000 | $ 100,000,000 | ||||||
Carrying Value | $ 70,000,000 | 69,000,000 | |||||||
Notes Payable, Other Payables [Member] | AGMH [Member] | 6.25% Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate of debt (as a percent) | 6.25% | ||||||||
Principal | $ 230,000,000 | 230,000,000 | $ 230,000,000 | ||||||
Carrying Value | $ 142,000,000 | 141,000,000 | |||||||
Notes Payable, Other Payables [Member] | AGMH [Member] | 5.6% Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate of debt (as a percent) | 5.60% | ||||||||
Principal | $ 100,000,000 | 100,000,000 | $ 100,000,000 | ||||||
Carrying Value | 57,000,000 | 56,000,000 | |||||||
Notes Payable, Other Payables [Member] | AGM [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 6,000,000 | 9,000,000 | |||||||
Carrying Value | 6,000,000 | 10,000,000 | |||||||
Junior Subordinated Debt [Member] | AGMH [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate of debt (as a percent) | 6.40% | ||||||||
Principal | 300,000,000 | 300,000,000 | $ 300,000,000 | ||||||
Carrying Value | 192,000,000 | 187,000,000 | |||||||
Consolidation, Eliminations [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | (28,000,000) | 0 | |||||||
Carrying Value | (18,000,000) | $ 0 | |||||||
AGMH [Member] | Consolidation, Eliminations [Member] | Junior Subordinated Debt [Member] | AGUS [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 28,000,000 | ||||||||
Loss on extinguishment of debt | $ 9,000,000 |
Long-Term Debt and Credit Fa134
Long-Term Debt and Credit Facilities - Expected Maturity Schedule of Debt (Details) $ in Millions | Dec. 31, 2017USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2018-2022 | $ 5 |
2023-2042 | 701 |
2043-2062 | 0 |
2063-2082 | 450 |
Thereafter | 430 |
Total | 1,586 |
AGUS [Member] | |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2018-2022 | 0 |
2023-2042 | 700 |
2043-2062 | 0 |
2063-2082 | 150 |
Thereafter | 0 |
Total | 850 |
AGMH [Member] | |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2018-2022 | 0 |
2023-2042 | 0 |
2043-2062 | 0 |
2063-2082 | 300 |
Thereafter | 430 |
Total | 730 |
AGM [Member] | |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2018-2022 | 5 |
2023-2042 | 1 |
2043-2062 | 0 |
2063-2082 | 0 |
Thereafter | 0 |
Total | $ 6 |
Long-Term Debt and Credit Fa135
Long-Term Debt and Credit Facilities - Interest Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Interest expense | $ 97 | $ 102 | $ 101 |
AGUS [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 44 | 48 | 49 |
AGMH [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 54 | 54 | 54 |
AGM [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 0 | 0 | (2) |
Senior Notes [Member] | AGUS [Member] | 7% Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 13 | 13 | 13 |
Senior Notes [Member] | AGUS [Member] | 5% Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 26 | 26 | 26 |
Series A Enhanced Junior Subordinated Debentures [Member] | AGUS [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 5 | 9 | 10 |
Corporate securities [Member] | AGMH [Member] | 6.875% QUIBS [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 7 | 7 | 7 |
Notes Payable, Other Payables [Member] | AGMH [Member] | 6.25% Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 16 | 16 | 16 |
Notes Payable, Other Payables [Member] | AGMH [Member] | 5.6% Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 6 | 6 | 6 |
Notes Payable, Other Payables [Member] | AGM [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 0 | 0 | (2) |
Junior Subordinated Debt [Member] | AGMH [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 25 | 25 | 25 |
Consolidation, Eliminations [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | $ (1) | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic EPS: | |||||||||||
Net income (loss) | $ 52 | $ 208 | $ 153 | $ 317 | $ 197 | $ 479 | $ 146 | $ 59 | $ 730 | $ 881 | $ 1,056 |
Less: Distributed and undistributed income (loss) available to nonvested shareholders | 1 | 1 | 1 | ||||||||
Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic | $ 729 | $ 880 | $ 1,055 | ||||||||
Basic shares (in shares) | 120.6 | 133 | 148.1 | ||||||||
Basic EPS (in dollars per share) | $ 0.44 | $ 1.75 | $ 1.26 | $ 2.53 | $ 1.51 | $ 3.63 | $ 1.09 | $ 0.43 | $ 6.05 | $ 6.61 | $ 7.12 |
Diluted EPS: | |||||||||||
Plus: Re-allocation of undistributed income (loss) available to nonvested shareholders of AGL and subsidiaries | $ 0 | $ 0 | $ 0 | ||||||||
Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, diluted | $ 729 | $ 880 | $ 1,055 | ||||||||
Basic shares (in shares) | 120.6 | 133 | 148.1 | ||||||||
Dilutive securities (in shares) | 1.7 | 1.1 | 0.9 | ||||||||
Diluted shares (in shares) | 122.3 | 134.1 | 149 | ||||||||
Diluted EPS (in dollars per share) | $ 0.44 | $ 1.72 | $ 1.24 | $ 2.49 | $ 1.49 | $ 3.60 | $ 1.09 | $ 0.43 | $ 5.96 | $ 6.56 | $ 7.08 |
Potentially dilutive securities excluded from computation of EPS because of antidilutive effect | 0.1 | 0.3 | 0.5 |
Shareholders' Equity - Share Is
Shareholders' Equity - Share Issuance (Details) | 12 Months Ended | |
Dec. 31, 2017USD ($)vote$ / sharesshares | Dec. 31, 2016$ / sharesshares | |
Equity [Abstract] | ||
Authorized share capital | $ | $ 5,000,000 | |
Common stock, shares authorized | shares | 500,000,000 | 500,000,000 |
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Number of votes per share of common stock | vote | 1 | |
Percentage of controlled shares | 9.50% | |
Percentage of voting power held by one shareholder | 75.00% |
Shareholders' Equity - Shares R
Shareholders' Equity - Shares Repurchased (Details) - USD ($) | 2 Months Ended | 12 Months Ended | ||||
Feb. 23, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 01, 2017 | Jan. 06, 2017 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Total payments | $ 501,000,000 | $ 306,000,000 | $ 555,000,000 | |||
Common Stock [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Authorized repurchase amount | $ 300,000,000 | |||||
Number of Shares Repurchased (in shares) | 12,669,643 | 10,721,248 | 20,995,419 | |||
Total payments | $ 501,000,000 | $ 306,000,000 | $ 555,000,000 | |||
Average price paid (in dollars per share) | $ 39.57 | $ 28.53 | $ 26.43 | |||
Subsequent Event [Member] | Common Stock [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | $ 305,000,000 | |||||
Number of Shares Repurchased (in shares) | 1,230,941 | |||||
Total payments | $ 43,000,000 | |||||
Average price paid (in dollars per share) | $ 34.90 | |||||
Chief Executive Officer [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Deferred equity compensation (in shares) | 297,131 |
Shareholders' Equity - Deferred
Shareholders' Equity - Deferred Compensation (Details) - Supplemental Employee Retirement Plan [Member] | Jan. 06, 2017shares | Dec. 31, 2017Unitshares | Dec. 31, 2016Unitshares |
AGC [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of AGL common shares represented by each unit in employer stock fund | 1 | ||
Number of units in AGC SERP (in units) | Unit | 74,309 | 74,309 | |
Chief Executive Officer and General Counsel [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of AGL common shares represented by each unit in employer stock fund | 1 | ||
Deferred Compensation Arrangement with Individual, Shares Issued | 320,193 | ||
Deferred equity compensation, shares | 0 | 320,193 |
Shareholders' Equity - Dividend
Shareholders' Equity - Dividends (Details) - $ / shares | Feb. 21, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Class of Stock [Line Items] | ||||||||||||
Dividends (in dollars per share) | $ 0.1425 | $ 0.1425 | $ 0.1425 | $ 0.1425 | $ 0.13 | $ 0.13 | $ 0.13 | $ 0.13 | $ 0.57 | $ 0.52 | $ 0.48 | |
Subsequent Event [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Dividends (in dollars per share) | $ 0.16 | |||||||||||
Increase in common stock dividend (as a percent) | 12.00% |
Employee Benefit Plans - Awards
Employee Benefit Plans - Awards Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options [Member] | |||
Summary of options issued and outstanding | |||
Balance at the beginning of the period (in shares) | 1,170,593 | ||
Options granted (in shares) | 0 | 0 | 0 |
Options exercised (in shares) | (331,639) | ||
Options forfeited/expired (in shares) | 0 | ||
Balance at the end of the period (in shares) | 838,954 | 1,170,593 | |
Weighted Average Exercise Price | |||
Balance at the beginning of the period (in dollars per share) | $ 18.43 | ||
Options granted (in dollars per share) | 0 | ||
Options exercised (in dollars per share) | 21.02 | ||
Options forfeited (in dollars per share) | 0 | ||
Balance at the end of the period (in dollars per share) | $ 17.41 | $ 18.43 | |
Number of Exercisable Options (in shares) | 838,954 | 1,145,356 | |
Performance Stock Options [Member] | |||
Summary of options issued and outstanding | |||
Balance at the beginning of the period (in shares) | 221,409 | ||
Options granted (in shares) | 0 | 0 | 0 |
Options exercised (in shares) | (30,508) | ||
Options forfeited/expired (in shares) | 0 | ||
Balance at the end of the period (in shares) | 190,901 | 221,409 | |
Weighted Average Exercise Price | |||
Balance at the beginning of the period (in dollars per share) | $ 17.89 | ||
Options granted (in dollars per share) | 0 | ||
Options exercised (in dollars per share) | 18.45 | ||
Options forfeited (in dollars per share) | 0 | ||
Balance at the end of the period (in dollars per share) | $ 17.80 | $ 17.89 | |
Number of Exercisable Options (in shares) | 190,901 | 221,409 | |
Restricted Stock Awards [Member] | |||
Restricted Stock Award and Restricted Stock Unit Activity | |||
Nonvested at the beginning of the period (in shares) | 58,858 | ||
Granted (in shares) | 50,225 | ||
Vested (in shares) | (58,858) | ||
Forfeited (in shares) | 0 | ||
Nonvested at the end of the period (in shares) | 50,225 | 58,858 | |
Weighted Average Grant-Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 25.57 | ||
Granted (in dollars per share) | 37.93 | ||
Vested (in dollars per share) | 25.57 | ||
Forfeited (in dollars per share) | 0 | ||
Nonvested at the end of the period (in dollars per share) | $ 37.93 | $ 25.57 | |
Restricted Stock Units (RSUs) [Member] | |||
Restricted Stock Award and Restricted Stock Unit Activity | |||
Nonvested at the beginning of the period (in shares) | 945,509 | ||
Granted (in shares) | 245,735 | ||
Vested (in shares) | (289,176) | ||
Forfeited (in shares) | (47,449) | ||
Nonvested at the end of the period (in shares) | 854,619 | 945,509 | |
Weighted Average Grant-Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 24.01 | ||
Granted (in dollars per share) | 41.37 | ||
Vested (in dollars per share) | 22.74 | ||
Forfeited (in dollars per share) | 23.35 | ||
Nonvested at the end of the period (in dollars per share) | 29.67 | $ 24.01 | |
Performance Restricted Stock Units [Member] | |||
Weighted Average Exercise Price | |||
Weighted Average Grant Date Fair Value (in dollars per share) | $ 53.74 | $ 25.62 | $ 28.31 |
Restricted Stock Award and Restricted Stock Unit Activity | |||
Nonvested at the beginning of the period (in shares) | 609,435 | ||
Granted (in shares) | 315,896 | 155,000 | |
Vested (in shares) | (318,467) | ||
Forfeited (in shares) | 0 | ||
Nonvested at the end of the period (in shares) | 606,864 | 609,435 | |
Weighted Average Grant-Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 26.22 | ||
Granted (in dollars per share) | 53.74 | $ 25.17 | |
Vested (in dollars per share) | 25.17 | ||
Forfeited (in dollars per share) | 0 | ||
Nonvested at the end of the period (in dollars per share) | $ 33.80 | $ 26.22 | |
Excluded due to nonperformance (in shares) | 426,670 |
Employee Benefit Plans - Weight
Employee Benefit Plans - Weighted Average Assumptions on Option Pricing (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee benefit plans [Line Items] | |||
Document Fiscal Year Focus | 2,017 | ||
Performance Restricted Stock Units [Member] | |||
Employee benefit plans [Line Items] | |||
Dividend yield (as a percent) | 1.37% | 2.12% | 1.90% |
Expected volatility (as a percent) | 25.19% | 30.84% | 32.20% |
Risk free interest rate (as a percent) | 1.48% | 0.90% | 0.82% |
Weighted average grant date fair value (in dollars per share) | $ 53.74 | $ 25.62 | $ 28.31 |
Employee Benefit Plans - Stock
Employee Benefit Plans - Stock Purchase Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee benefit plans [Line Items] | |||
Document Fiscal Year Focus | 2,017 | ||
Employee Stock [Member] | Employee Stock Purchase Plan [Member] | |||
Employee benefit plans [Line Items] | |||
Proceeds from purchase of shares by employees | $ 1 | $ 0.9 | $ 0.8 |
Number of shares issued by the Company | 33,666 | 39,055 | 38,565 |
Recorded in share-based compensation, net of deferral | $ 0.3 | $ 0.2 | $ 0.2 |
Employee Benefit Plans - Share-
Employee Benefit Plans - Share-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Document Fiscal Year Focus | 2,017 | ||
Share‑based compensation expense | $ 16 | $ 13 | $ 10 |
Share‑based compensation capitalized as DAC | 0.6 | 0.4 | 0.5 |
Income tax benefit | $ 2 | $ 3 | $ 2 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)installmentsshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | |
Employee benefit plans [Line Items] | |||
Proceeds from option exercises | $ 5,000,000 | $ 12,000,000 | $ 5,000,000 |
Expected volatility historical share price period | 3 years | ||
Expected term | 18 months | ||
Recognized contribution expense | $ 11,000,000 | $ 11,000,000 | $ 10,000,000 |
Stock Options [Member] | |||
Employee benefit plans [Line Items] | |||
Options granted (in shares) | shares | 0 | 0 | 0 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 0 | ||
Aggregate intrinsic value of awards outstanding | $ 14,000,000 | ||
Weighted average remaining contractual term of awards outstanding (in years) | 1 year 4 months 8 days | ||
Aggregate intrinsic value of exercisable awards | $ 14,000,000 | ||
Weighted average remaining contractual term of exercisable awards (in years) | 1 year 4 months 8 days | ||
Total intrinsic value of awards exercised | $ 6,600,000 | $ 4,600,000 | $ 2,800,000 |
Proceeds from option exercises | 4,700,000 | $ 12,000,000 | $ 4,900,000 |
Tax benefit from stock options exercised | $ 1,800,000 | ||
Stock Options [Member] | Employee [Member] | |||
Employee benefit plans [Line Items] | |||
Vesting period of awards (in years) | 3 years | ||
Stock Options [Member] | Employee [Member] | Minimum [Member] | |||
Employee benefit plans [Line Items] | |||
Years from grant date until expiration | 7 years | ||
Stock Options [Member] | Employee [Member] | Maximum [Member] | |||
Employee benefit plans [Line Items] | |||
Years from grant date until expiration | 10 years | ||
Stock Options [Member] | Directors [Member} | |||
Employee benefit plans [Line Items] | |||
Vesting period of awards (in years) | 1 year | ||
Stock Options [Member] | Directors [Member} | Minimum [Member] | |||
Employee benefit plans [Line Items] | |||
Years from grant date until expiration | 7 years | ||
Stock Options [Member] | Directors [Member} | Maximum [Member] | |||
Employee benefit plans [Line Items] | |||
Years from grant date until expiration | 10 years | ||
Performance Stock Options [Member] | |||
Employee benefit plans [Line Items] | |||
Options granted (in shares) | shares | 0 | 0 | 0 |
Vesting period of awards (in years) | 3 years | ||
Years from grant date until expiration | 7 years | ||
Aggregate intrinsic value of awards outstanding | $ 3,000,000 | ||
Weighted average remaining contractual term of awards outstanding (in years) | 1 year 3 months 6 days | ||
Aggregate intrinsic value of exercisable awards | $ 3,000,000 | ||
Weighted average remaining contractual term of exercisable awards (in years) | 1 year 3 months 6 days | ||
Total intrinsic value of awards exercised | $ 699,000 | $ 41,000 | $ 75,000 |
Proceeds from option exercises | $ 206,000 | 106,000 | 98,000 |
Period of highest average share price measurement on performance shares | 40 days | ||
Unrecognized compensation expense | $ 0 | ||
Restricted Stock Awards [Member] | |||
Employee benefit plans [Line Items] | |||
Expected weighted-average remaining service period for recognition of unrecognized compensation cost (in years) | 4 months 8 days | ||
Unrecognized compensation expense | $ 700,000 | ||
Total fair value of awards vested | $ 1,500,000 | 1,600,000 | 1,000,000 |
Restricted Stock Awards [Member] | Employee [Member] | |||
Employee benefit plans [Line Items] | |||
Vesting period of awards (in years) | 4 years | ||
Restricted Stock Awards [Member] | Directors [Member} | |||
Employee benefit plans [Line Items] | |||
Vesting period of awards (in years) | 1 year | ||
Restricted Stock Units (RSUs) [Member] | |||
Employee benefit plans [Line Items] | |||
Expected weighted-average remaining service period for recognition of unrecognized compensation cost (in years) | 1 year 9 months 6 days | ||
Unrecognized compensation expense | $ 12,700,000 | ||
Total fair value of awards delivered | $ 7,000,000 | 2,000,000 | 6,000,000 |
Restricted Stock Units (RSUs) [Member] | Directors [Member} | |||
Employee benefit plans [Line Items] | |||
Vesting period of awards (in years) | 1 year | ||
Performance Restricted Stock Units [Member] | |||
Employee benefit plans [Line Items] | |||
Vesting period of awards (in years) | 3 years | ||
Expected weighted-average remaining service period for recognition of unrecognized compensation cost (in years) | 1 year 9 months 6 days | ||
Period of highest average share price measurement on performance shares | 40 days | ||
Unrecognized compensation expense | $ 8,800,000 | ||
Total fair value of awards delivered | $ 8,000,000 | 2,000,000 | 6,000,000 |
Employee Stock Purchase Plan [Member] | Employee Stock [Member] | |||
Employee benefit plans [Line Items] | |||
Value of shares that can be purchased as a percentage of participant's compensation | 10.00% | ||
Value of shares that can be purchased | $ 25,000 | ||
Purchase price of shares as a percentage of the fair market value of the stock | 85.00% | ||
Capital shares reserved for future issuance | shares | 600,000 | ||
Assured Guaranty Ltd. 2004 Long-Term Incentive Plan [Member] | |||
Employee benefit plans [Line Items] | |||
Maximum number of common shares that may be delivered | shares | 18,670,000 | ||
Assured Guaranty Ltd. 2004 Long-Term Incentive Plan [Member] | Stock Options [Member] | |||
Employee benefit plans [Line Items] | |||
Number of common shares available for grant | shares | 10,034,895 | ||
Performance Period Hurdle, One [Member] | |||
Employee benefit plans [Line Items] | |||
Vesting percentage | 50.00% | ||
Vesting from prior period, percentage | 35.00% | ||
Performance Period Hurdle, One [Member] | Performance Stock Options [Member] | |||
Employee benefit plans [Line Items] | |||
Vesting percentage | 35.00% | ||
Performance Period Hurdle, Two [Member] | Performance Stock Options [Member] | |||
Employee benefit plans [Line Items] | |||
Vesting percentage | 50.00% | ||
Performance Period Hurdle, Two [Member] | Performance Restricted Stock Units [Member] | |||
Employee benefit plans [Line Items] | |||
Vesting percentage | 100.00% | ||
Performance Period Hurdle, Three [Member] | Performance Stock Options [Member] | |||
Employee benefit plans [Line Items] | |||
Vesting percentage | 100.00% | ||
Performance Period Hurdle, Three [Member] | Performance Restricted Stock Units [Member] | |||
Employee benefit plans [Line Items] | |||
Vesting percentage | 200.00% | ||
United States [Member] | |||
Employee benefit plans [Line Items] | |||
Core contribution made by the company as a percentage of participant's compensation | 6.00% | ||
Number of years of service to become fully vested | 1 year | ||
United States [Member] | 401 (k) Plan [Member] | |||
Employee benefit plans [Line Items] | |||
Maximum amount that can be contributed by eligible participants | $ 18,000 | ||
Percentage by which employer contribution matches up to 6% of participant's compensation | 100.00% | ||
Maximum percentage of participant's compensation eligible for employer contribution match | 6.00% | ||
Performance Retention Plan [Member] | |||
Employee benefit plans [Line Items] | |||
Number of installments for award vesting | installments | 3 | ||
Vesting period | 4 years | ||
Defined contribution expenses | $ 12,000,000 | $ 12,000,000 | $ 11,000,000 |
Other Comprehensive Income - C
Other Comprehensive Income - Changes in AOCI by Component (Details) - USD ($) $ in Millions | Dec. 22, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||||||||||
Beginning balance | $ 6,504 | $ 6,063 | $ 6,504 | $ 6,063 | $ 5,758 | |||||||
Amounts reclassified from AOCI to: | ||||||||||||
Net realized investment gains (losses) | $ (14) | $ 7 | $ 15 | 32 | $ (24) | $ (2) | $ 10 | (13) | 40 | (29) | (26) | |
Net investment income | 96 | 99 | 101 | 122 | 117 | 94 | 98 | 99 | 418 | 408 | 423 | |
Interest expense | (24) | (24) | (25) | (24) | (25) | (26) | (25) | (26) | (97) | (102) | (101) | |
Total (provision) benefit for income taxes | (104) | $ (105) | $ 3 | (55) | (74) | $ (1) | $ (55) | (6) | (261) | (136) | (375) | |
Ending balance | 6,839 | 6,504 | 6,839 | 6,504 | 6,063 | |||||||
Net Unrealized Gains (Losses) on Investments with no Other-Than-Temporary Impairment [Member] | ||||||||||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||||||||||
Beginning balance | 171 | 260 | 171 | 260 | 367 | |||||||
Reclassification of stranded tax effects (see Note 1) | 38 | |||||||||||
Other comprehensive income (loss) before reclassifications | 128 | (71) | (93) | |||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Total amount reclassified from AOCI, net of tax | (64) | (18) | (14) | |||||||||
Net current period other comprehensive income (loss) | 64 | (89) | (107) | |||||||||
Ending balance | 273 | 171 | 273 | 171 | 260 | |||||||
Net Unrealized Gains (Losses) on Investments with no Other-Than-Temporary Impairment [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Net realized investment gains (losses) | (71) | (23) | (11) | |||||||||
Net investment income | (27) | (3) | (9) | |||||||||
Interest expense | 0 | 0 | 0 | |||||||||
Total before tax | (98) | (26) | (20) | |||||||||
Total (provision) benefit for income taxes | 34 | 8 | 6 | |||||||||
Net Unrealized Gains (Losses) on Investments with Other-Than-Temporary Impairment [Member] | ||||||||||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||||||||||
Beginning balance | 10 | (15) | 10 | (15) | 4 | |||||||
Reclassification of stranded tax effects (see Note 1) | 21 | |||||||||||
Other comprehensive income (loss) before reclassifications | 69 | (9) | (43) | |||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Total amount reclassified from AOCI, net of tax | 20 | 34 | 24 | |||||||||
Net current period other comprehensive income (loss) | 89 | 25 | (19) | |||||||||
Ending balance | 120 | 10 | 120 | 10 | (15) | |||||||
Net Unrealized Gains (Losses) on Investments with Other-Than-Temporary Impairment [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Net realized investment gains (losses) | 31 | 52 | 37 | |||||||||
Net investment income | (1) | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | |||||||||
Total before tax | 30 | 52 | 37 | |||||||||
Total (provision) benefit for income taxes | (10) | (18) | (13) | |||||||||
Accumulated Translation Adjustment [Member] | ||||||||||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||||||||||
Beginning balance | (39) | (16) | (39) | (16) | (10) | |||||||
Reclassification of stranded tax effects (see Note 1) | (5) | |||||||||||
Other comprehensive income (loss) before reclassifications | 15 | (23) | (6) | |||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Total amount reclassified from AOCI, net of tax | 0 | 0 | 0 | |||||||||
Net current period other comprehensive income (loss) | 15 | (23) | (6) | |||||||||
Ending balance | (29) | (39) | (29) | (39) | (16) | |||||||
Accumulated Translation Adjustment [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Net realized investment gains (losses) | 0 | 0 | 0 | |||||||||
Net investment income | 0 | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | |||||||||
Total before tax | 0 | 0 | 0 | |||||||||
Total (provision) benefit for income taxes | 0 | 0 | 0 | |||||||||
Cash Flow Hedge [Member] | ||||||||||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||||||||||
Beginning balance | 7 | 8 | 7 | 8 | 9 | |||||||
Reclassification of stranded tax effects (see Note 1) | 2 | |||||||||||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | |||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Total amount reclassified from AOCI, net of tax | (1) | (1) | (1) | |||||||||
Net current period other comprehensive income (loss) | (1) | (1) | (1) | |||||||||
Ending balance | 8 | 7 | 8 | 7 | 8 | |||||||
Cash Flow Hedge [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Net realized investment gains (losses) | 0 | 0 | 0 | |||||||||
Net investment income | 0 | 0 | 0 | |||||||||
Interest expense | (1) | (1) | (1) | |||||||||
Total before tax | (1) | (1) | (1) | |||||||||
Total (provision) benefit for income taxes | 0 | 0 | 0 | |||||||||
Accumulated Other Comprehensive Income [Member] | ||||||||||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||||||||||
Beginning balance | $ 149 | $ 237 | 149 | 237 | 370 | |||||||
Reclassification of stranded tax effects (see Note 1) | $ 56 | 56 | ||||||||||
Other comprehensive income (loss) before reclassifications | 212 | (103) | (142) | |||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Total amount reclassified from AOCI, net of tax | (45) | 15 | 9 | |||||||||
Net current period other comprehensive income (loss) | 167 | (88) | (133) | |||||||||
Ending balance | $ 372 | $ 149 | 372 | 149 | 237 | |||||||
Accumulated Other Comprehensive Income [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||||
Amounts reclassified from AOCI to: | ||||||||||||
Net realized investment gains (losses) | (40) | 29 | 26 | |||||||||
Net investment income | (28) | (3) | (9) | |||||||||
Interest expense | (1) | (1) | (1) | |||||||||
Total before tax | (69) | 25 | 16 | |||||||||
Total (provision) benefit for income taxes | $ 24 | $ (10) | $ (7) |
Subsidiary Information - Conden
Subsidiary Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||||
Total investment portfolio and cash | $ 11,539 | $ 11,103 | ||
Investment in subsidiaries | 0 | 0 | ||
Premiums receivable, net of commissions payable | 915 | 576 | ||
Ceded unearned premium reserve | 119 | 206 | ||
Deferred acquisition costs | 101 | 106 | $ 114 | $ 121 |
Reinsurance recoverable on unpaid losses | 44 | 80 | ||
Credit derivative assets | 2 | 13 | ||
Deferred tax asset, net | 98 | 497 | ||
Intercompany receivable | 0 | 0 | ||
Financial guaranty variable interest entities’ assets, at fair value | 700 | 876 | ||
Dividend receivable from affiliate | 0 | |||
Other | 915 | 694 | ||
Total assets | 14,433 | 14,151 | ||
Liabilities and shareholders’ equity | ||||
Unearned premium reserve | 3,475 | 3,511 | ||
Loss and loss adjustment expense reserve | 1,444 | 1,127 | ||
Long-term debt | 1,292 | 1,306 | ||
Intercompany payable | 0 | 0 | ||
Credit derivative liabilities | 271 | 402 | ||
Deferred tax liabilities, net | 0 | 0 | ||
Financial guaranty variable interest entities’ liabilities, at fair value | 757 | 958 | ||
Dividend payable to affiliate | 0 | |||
Other | 355 | 343 | ||
Total liabilities | 7,594 | 7,647 | ||
Effect on shareholders’ equity (decrease) increase | 6,839 | 6,504 | $ 6,063 | $ 5,758 |
Noncontrolling interest | 0 | 0 | ||
Total shareholders' equity | 6,839 | 6,504 | ||
Total liabilities and shareholders’ equity | 14,433 | 14,151 | ||
Reportable Legal Entities [Member] | Assured Guaranty Ltd. (Parent) [Member] | ||||
Assets | ||||
Total investment portfolio and cash | 36 | 36 | ||
Investment in subsidiaries | 6,794 | 6,164 | ||
Premiums receivable, net of commissions payable | 0 | 0 | ||
Ceded unearned premium reserve | 0 | 0 | ||
Deferred acquisition costs | 0 | 0 | ||
Reinsurance recoverable on unpaid losses | 0 | 0 | ||
Credit derivative assets | 0 | 0 | ||
Deferred tax asset, net | 0 | 0 | ||
Intercompany receivable | 0 | 0 | ||
Financial guaranty variable interest entities’ assets, at fair value | 0 | 0 | ||
Dividend receivable from affiliate | 300 | |||
Other | 26 | 11 | ||
Total assets | 6,856 | 6,511 | ||
Liabilities and shareholders’ equity | ||||
Unearned premium reserve | 0 | 0 | ||
Loss and loss adjustment expense reserve | 0 | 0 | ||
Long-term debt | 0 | 0 | ||
Intercompany payable | 0 | 0 | ||
Credit derivative liabilities | 0 | 0 | ||
Deferred tax liabilities, net | 0 | |||
Financial guaranty variable interest entities’ liabilities, at fair value | 0 | 0 | ||
Dividend payable to affiliate | 0 | |||
Other | 17 | 7 | ||
Total liabilities | 17 | 7 | ||
Effect on shareholders’ equity (decrease) increase | 6,839 | 6,504 | ||
Noncontrolling interest | 0 | 0 | ||
Total shareholders' equity | 6,839 | 6,504 | ||
Total liabilities and shareholders’ equity | 6,856 | 6,511 | ||
Reportable Legal Entities [Member] | AGUS (Issuer) [Member] | ||||
Assets | ||||
Total investment portfolio and cash | 319 | 384 | ||
Investment in subsidiaries | 6,126 | 5,696 | ||
Premiums receivable, net of commissions payable | 0 | 0 | ||
Ceded unearned premium reserve | 0 | 0 | ||
Deferred acquisition costs | 0 | 0 | ||
Reinsurance recoverable on unpaid losses | 0 | 0 | ||
Credit derivative assets | 0 | 0 | ||
Deferred tax asset, net | 59 | 16 | ||
Intercompany receivable | 0 | 0 | ||
Financial guaranty variable interest entities’ assets, at fair value | 0 | 0 | ||
Dividend receivable from affiliate | 0 | |||
Other | 0 | 78 | ||
Total assets | 6,504 | 6,174 | ||
Liabilities and shareholders’ equity | ||||
Unearned premium reserve | 0 | 0 | ||
Loss and loss adjustment expense reserve | 0 | 0 | ||
Long-term debt | 843 | 843 | ||
Intercompany payable | 60 | 70 | ||
Credit derivative liabilities | 0 | 0 | ||
Deferred tax liabilities, net | 0 | 0 | ||
Financial guaranty variable interest entities’ liabilities, at fair value | 0 | 0 | ||
Dividend payable to affiliate | 300 | |||
Other | 59 | 3 | ||
Total liabilities | 962 | 1,216 | ||
Effect on shareholders’ equity (decrease) increase | 5,542 | 4,958 | ||
Noncontrolling interest | 0 | 0 | ||
Total shareholders' equity | 5,542 | 4,958 | ||
Total liabilities and shareholders’ equity | 6,504 | 6,174 | ||
Reportable Legal Entities [Member] | AGMH (Issuer) [Member] | ||||
Assets | ||||
Total investment portfolio and cash | 28 | 22 | ||
Investment in subsidiaries | 4,048 | 3,799 | ||
Premiums receivable, net of commissions payable | 0 | 0 | ||
Ceded unearned premium reserve | 0 | 0 | ||
Deferred acquisition costs | 0 | 0 | ||
Reinsurance recoverable on unpaid losses | 0 | 0 | ||
Credit derivative assets | 0 | 0 | ||
Deferred tax asset, net | 0 | 0 | ||
Intercompany receivable | 0 | 0 | ||
Financial guaranty variable interest entities’ assets, at fair value | 0 | 0 | ||
Dividend receivable from affiliate | 0 | |||
Other | 40 | 26 | ||
Total assets | 4,116 | 3,847 | ||
Liabilities and shareholders’ equity | ||||
Unearned premium reserve | 0 | 0 | ||
Loss and loss adjustment expense reserve | 0 | 0 | ||
Long-term debt | 461 | 453 | ||
Intercompany payable | 0 | 0 | ||
Credit derivative liabilities | 0 | 0 | ||
Deferred tax liabilities, net | 51 | 88 | ||
Financial guaranty variable interest entities’ liabilities, at fair value | 0 | 0 | ||
Dividend payable to affiliate | 0 | |||
Other | 20 | 14 | ||
Total liabilities | 532 | 555 | ||
Effect on shareholders’ equity (decrease) increase | 3,584 | 3,292 | ||
Noncontrolling interest | 0 | 0 | ||
Total shareholders' equity | 3,584 | 3,292 | ||
Total liabilities and shareholders’ equity | 4,116 | 3,847 | ||
Reportable Legal Entities [Member] | Other Entities [Member] | ||||
Assets | ||||
Total investment portfolio and cash | 11,484 | 11,029 | ||
Investment in subsidiaries | 216 | 296 | ||
Premiums receivable, net of commissions payable | 1,074 | 699 | ||
Ceded unearned premium reserve | 1,002 | 1,099 | ||
Deferred acquisition costs | 144 | 156 | ||
Reinsurance recoverable on unpaid losses | 433 | 484 | ||
Credit derivative assets | 39 | 69 | ||
Deferred tax asset, net | 93 | 597 | ||
Intercompany receivable | 60 | 70 | ||
Financial guaranty variable interest entities’ assets, at fair value | 700 | 876 | ||
Dividend receivable from affiliate | 0 | |||
Other | 1,171 | 801 | ||
Total assets | 16,416 | 16,176 | ||
Liabilities and shareholders’ equity | ||||
Unearned premium reserve | 4,423 | 4,488 | ||
Loss and loss adjustment expense reserve | 1,793 | 1,596 | ||
Long-term debt | 6 | 10 | ||
Intercompany payable | 300 | 300 | ||
Credit derivative liabilities | 308 | 458 | ||
Deferred tax liabilities, net | 0 | 0 | ||
Financial guaranty variable interest entities’ liabilities, at fair value | 757 | 958 | ||
Dividend payable to affiliate | 0 | |||
Other | 740 | 665 | ||
Total liabilities | 8,327 | 8,475 | ||
Effect on shareholders’ equity (decrease) increase | 7,873 | 7,405 | ||
Noncontrolling interest | 216 | 296 | ||
Total shareholders' equity | 8,089 | 7,701 | ||
Total liabilities and shareholders’ equity | 16,416 | 16,176 | ||
Consolidation, Eliminations [Member] | ||||
Assets | ||||
Total investment portfolio and cash | (328) | (368) | ||
Investment in subsidiaries | (17,184) | (15,955) | ||
Premiums receivable, net of commissions payable | (159) | (123) | ||
Ceded unearned premium reserve | (883) | (893) | ||
Deferred acquisition costs | (43) | (50) | ||
Reinsurance recoverable on unpaid losses | (389) | (404) | ||
Credit derivative assets | (37) | (56) | ||
Deferred tax asset, net | (54) | (116) | ||
Intercompany receivable | (60) | (70) | ||
Financial guaranty variable interest entities’ assets, at fair value | 0 | 0 | ||
Dividend receivable from affiliate | (300) | |||
Other | (322) | (222) | ||
Total assets | (19,459) | (18,557) | ||
Liabilities and shareholders’ equity | ||||
Unearned premium reserve | (948) | (977) | ||
Loss and loss adjustment expense reserve | (349) | (469) | ||
Long-term debt | (18) | 0 | ||
Intercompany payable | (360) | (370) | ||
Credit derivative liabilities | (37) | (56) | ||
Deferred tax liabilities, net | (51) | (88) | ||
Financial guaranty variable interest entities’ liabilities, at fair value | 0 | 0 | ||
Dividend payable to affiliate | (300) | |||
Other | (481) | (346) | ||
Total liabilities | (2,244) | (2,606) | ||
Effect on shareholders’ equity (decrease) increase | (16,999) | (15,655) | ||
Noncontrolling interest | (216) | (296) | ||
Total shareholders' equity | (17,215) | (15,951) | ||
Total liabilities and shareholders’ equity | $ (19,459) | $ (18,557) |
Subsidiary Information - Con148
Subsidiary Information - Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||||||||||
Net earned premiums | $ 178 | $ 186 | $ 162 | $ 164 | $ 236 | $ 231 | $ 214 | $ 183 | $ 690 | $ 864 | $ 766 |
Net investment income | 96 | 99 | 101 | 122 | 117 | 94 | 98 | 99 | 418 | 408 | 423 |
Net realized investment gains (losses) | (14) | 7 | 15 | 32 | (24) | (2) | 10 | (13) | 40 | (29) | (26) |
Net change in fair value of credit derivatives: | |||||||||||
Realized gains (losses) and other settlements | (10) | 29 | (18) | ||||||||
Net unrealized gains (losses) | 121 | 69 | 746 | ||||||||
Net change in fair value of credit derivatives | 5 | 58 | (6) | 54 | 74 | 21 | 63 | (60) | 111 | 98 | 728 |
Bargain purchase gain and settlement of pre-existing relationships | 0 | 0 | 0 | 58 | 0 | 259 | 0 | 0 | 58 | 259 | 214 |
Other | 422 | 77 | 102 | ||||||||
Total revenues | 1,739 | 1,677 | 2,207 | ||||||||
Expenses | |||||||||||
Loss and LAE | 34 | 223 | 72 | 59 | 112 | (9) | 102 | 90 | 388 | 295 | 424 |
Amortization of DAC | 6 | 5 | 4 | 4 | 5 | 4 | 5 | 4 | 19 | 18 | 20 |
Interest expense | 24 | 24 | 25 | 24 | 25 | 26 | 25 | 26 | 97 | 102 | 101 |
Other operating expenses | 61 | 58 | 57 | 68 | 57 | 65 | 63 | 60 | 244 | 245 | 231 |
Total expenses | 748 | 660 | 776 | ||||||||
Income (loss) before income taxes | 156 | 313 | 150 | 372 | 271 | 480 | 201 | 65 | 991 | 1,017 | 1,431 |
Total (provision) benefit for income taxes | (104) | (105) | 3 | (55) | (74) | (1) | (55) | (6) | (261) | (136) | (375) |
Equity in net earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Net income (loss) | 730 | 881 | 1,056 | ||||||||
Less: noncontrolling interest | 0 | 0 | 0 | ||||||||
Net income (loss) | $ 52 | $ 208 | $ 153 | $ 317 | $ 197 | $ 479 | $ 146 | $ 59 | 730 | 881 | 1,056 |
Comprehensive income (loss) | 897 | 793 | 923 | ||||||||
Reportable Legal Entities [Member] | Assured Guaranty Ltd. (Parent) [Member] | |||||||||||
Revenues | |||||||||||
Net earned premiums | 0 | 0 | 0 | ||||||||
Net investment income | 0 | 0 | 0 | ||||||||
Net realized investment gains (losses) | 0 | 0 | 0 | ||||||||
Net change in fair value of credit derivatives: | |||||||||||
Realized gains (losses) and other settlements | 0 | 0 | 0 | ||||||||
Net unrealized gains (losses) | 0 | 0 | 0 | ||||||||
Net change in fair value of credit derivatives | 0 | 0 | 0 | ||||||||
Bargain purchase gain and settlement of pre-existing relationships | 0 | 0 | 0 | ||||||||
Other | 10 | 0 | 0 | ||||||||
Total revenues | 10 | 0 | 0 | ||||||||
Expenses | |||||||||||
Loss and LAE | 0 | 0 | 0 | ||||||||
Amortization of DAC | 0 | 0 | 0 | ||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Other operating expenses | 38 | 29 | 30 | ||||||||
Total expenses | 38 | 29 | 30 | ||||||||
Income (loss) before income taxes | (28) | (29) | (30) | ||||||||
Total (provision) benefit for income taxes | 0 | 0 | 0 | ||||||||
Equity in net earnings of subsidiaries | 758 | 910 | 1,086 | ||||||||
Net income (loss) | 730 | 881 | 1,056 | ||||||||
Less: noncontrolling interest | 0 | 0 | 0 | ||||||||
Net income (loss) | 730 | 881 | 1,056 | ||||||||
Comprehensive income (loss) | 897 | 793 | 923 | ||||||||
Reportable Legal Entities [Member] | AGUS (Issuer) [Member] | |||||||||||
Revenues | |||||||||||
Net earned premiums | 0 | 0 | 0 | ||||||||
Net investment income | 2 | 0 | 1 | ||||||||
Net realized investment gains (losses) | 0 | 2 | 0 | ||||||||
Net change in fair value of credit derivatives: | |||||||||||
Realized gains (losses) and other settlements | 0 | 0 | 0 | ||||||||
Net unrealized gains (losses) | 0 | 0 | 0 | ||||||||
Net change in fair value of credit derivatives | 0 | 0 | 0 | ||||||||
Bargain purchase gain and settlement of pre-existing relationships | 0 | 0 | 0 | ||||||||
Other | 0 | 0 | 0 | ||||||||
Total revenues | 2 | 2 | 1 | ||||||||
Expenses | |||||||||||
Loss and LAE | 0 | 0 | 0 | ||||||||
Amortization of DAC | 0 | 0 | 0 | ||||||||
Interest expense | 47 | 52 | 52 | ||||||||
Other operating expenses | 12 | 2 | 1 | ||||||||
Total expenses | 59 | 54 | 53 | ||||||||
Income (loss) before income taxes | (57) | (52) | (52) | ||||||||
Total (provision) benefit for income taxes | 17 | 18 | 18 | ||||||||
Equity in net earnings of subsidiaries | 636 | 794 | 923 | ||||||||
Net income (loss) | 596 | 760 | 889 | ||||||||
Less: noncontrolling interest | 0 | 0 | 0 | ||||||||
Net income (loss) | 596 | 760 | 889 | ||||||||
Comprehensive income (loss) | 754 | 685 | 787 | ||||||||
Reportable Legal Entities [Member] | AGMH (Issuer) [Member] | |||||||||||
Revenues | |||||||||||
Net earned premiums | 0 | 0 | 0 | ||||||||
Net investment income | 0 | 0 | 0 | ||||||||
Net realized investment gains (losses) | 0 | 0 | 1 | ||||||||
Net change in fair value of credit derivatives: | |||||||||||
Realized gains (losses) and other settlements | 0 | 0 | 0 | ||||||||
Net unrealized gains (losses) | 0 | 0 | 0 | ||||||||
Net change in fair value of credit derivatives | 0 | 0 | 0 | ||||||||
Bargain purchase gain and settlement of pre-existing relationships | 0 | 0 | 0 | ||||||||
Other | 0 | 0 | 0 | ||||||||
Total revenues | 0 | 0 | 1 | ||||||||
Expenses | |||||||||||
Loss and LAE | 0 | 0 | 0 | ||||||||
Amortization of DAC | 0 | 0 | 0 | ||||||||
Interest expense | 54 | 54 | 54 | ||||||||
Other operating expenses | 1 | 2 | 1 | ||||||||
Total expenses | 55 | 56 | 55 | ||||||||
Income (loss) before income taxes | (55) | (56) | (54) | ||||||||
Total (provision) benefit for income taxes | 54 | 20 | 19 | ||||||||
Equity in net earnings of subsidiaries | 395 | 274 | 464 | ||||||||
Net income (loss) | 394 | 238 | 429 | ||||||||
Less: noncontrolling interest | 0 | 0 | 0 | ||||||||
Net income (loss) | 394 | 238 | 429 | ||||||||
Comprehensive income (loss) | 482 | 144 | 348 | ||||||||
Reportable Legal Entities [Member] | Other Entities [Member] | |||||||||||
Revenues | |||||||||||
Net earned premiums | 728 | 892 | 783 | ||||||||
Net investment income | 427 | 412 | 432 | ||||||||
Net realized investment gains (losses) | 45 | (28) | (19) | ||||||||
Net change in fair value of credit derivatives: | |||||||||||
Realized gains (losses) and other settlements | (10) | 29 | (18) | ||||||||
Net unrealized gains (losses) | 121 | 69 | 773 | ||||||||
Net change in fair value of credit derivatives | 111 | 98 | 755 | ||||||||
Bargain purchase gain and settlement of pre-existing relationships | 58 | 257 | 54 | ||||||||
Other | 608 | 78 | 102 | ||||||||
Total revenues | 1,977 | 1,709 | 2,107 | ||||||||
Expenses | |||||||||||
Loss and LAE | 327 | 296 | 434 | ||||||||
Amortization of DAC | 26 | 30 | 29 | ||||||||
Interest expense | 11 | 10 | 14 | ||||||||
Other operating expenses | 394 | 217 | 202 | ||||||||
Total expenses | 758 | 553 | 679 | ||||||||
Income (loss) before income taxes | 1,219 | 1,156 | 1,428 | ||||||||
Total (provision) benefit for income taxes | (359) | (175) | (365) | ||||||||
Equity in net earnings of subsidiaries | 32 | 44 | 39 | ||||||||
Net income (loss) | 892 | 1,025 | 1,102 | ||||||||
Less: noncontrolling interest | 32 | 44 | 39 | ||||||||
Net income (loss) | 860 | 981 | 1,063 | ||||||||
Comprehensive income (loss) | 1,084 | 953 | 967 | ||||||||
Consolidation, Eliminations [Member] | |||||||||||
Revenues | |||||||||||
Net earned premiums | (38) | (28) | (17) | ||||||||
Net investment income | (11) | (4) | (10) | ||||||||
Net realized investment gains (losses) | (5) | (3) | (8) | ||||||||
Net change in fair value of credit derivatives: | |||||||||||
Realized gains (losses) and other settlements | 0 | 0 | 0 | ||||||||
Net unrealized gains (losses) | 0 | 0 | (27) | ||||||||
Net change in fair value of credit derivatives | 0 | 0 | (27) | ||||||||
Bargain purchase gain and settlement of pre-existing relationships | 0 | 2 | 160 | ||||||||
Other | (196) | (1) | 0 | ||||||||
Total revenues | (250) | (34) | 98 | ||||||||
Expenses | |||||||||||
Loss and LAE | 61 | (1) | (10) | ||||||||
Amortization of DAC | (7) | (12) | (9) | ||||||||
Interest expense | (15) | (14) | (19) | ||||||||
Other operating expenses | (201) | (5) | (3) | ||||||||
Total expenses | (162) | (32) | (41) | ||||||||
Income (loss) before income taxes | (88) | (2) | 139 | ||||||||
Total (provision) benefit for income taxes | 27 | 1 | (47) | ||||||||
Equity in net earnings of subsidiaries | (1,821) | (2,022) | (2,512) | ||||||||
Net income (loss) | (1,882) | (2,023) | (2,420) | ||||||||
Less: noncontrolling interest | (32) | (44) | (39) | ||||||||
Net income (loss) | (1,850) | (1,979) | (2,381) | ||||||||
Comprehensive income (loss) | $ (2,320) | $ (1,782) | $ (2,102) |
Subsidiary Information - Con149
Subsidiary Information - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash flows provided by (used in) operating activities | $ 433 | $ (132) | $ (71) | |
Fixed-maturity securities: | ||||
Purchases | (2,552) | (1,646) | (2,577) | |
Sales | 1,701 | 1,365 | 2,107 | |
Maturities | 821 | 1,155 | 898 | |
Sales (purchases) of short-term investments, net | 74 | 17 | 897 | |
Net proceeds from FG VIE assets | 147 | 629 | 400 | |
Investment in subsidiaries | 0 | |||
Intercompany debt | 0 | 0 | ||
Proceeds from sale of subsidiaries | 0 | |||
Proceeds from return of capital from subsidiaries | 0 | 0 | 0 | |
Acquisitions, net of cash acquired | 95 | (435) | (800) | |
Other | 59 | (9) | 69 | |
Net cash flows provided by (used in) investing activities | 345 | 1,076 | 994 | |
Cash flows from financing activities | ||||
Return of capital | 0 | 0 | 0 | |
Proceeds from Contributed Capital | 0 | |||
Dividends paid | (70) | (69) | (72) | |
Repurchases of common stock | (501) | (306) | (555) | |
Repurchases of common stock to pay withholding taxes | (13) | (2) | (7) | |
Net paydowns of FG VIE liabilities | (157) | (611) | (214) | |
Paydown of long-term debt | (30) | (2) | (4) | |
Proceeds from option exercises | 5 | 12 | 5 | |
Intercompany debt | 0 | 0 | ||
Net cash flows provided by (used in) financing activities | (766) | (978) | (847) | |
Effect of foreign exchange rate changes | 5 | (5) | (4) | |
Increase (Decrease) in Cash and Restricted Cash | 17 | (39) | 72 | |
Cash and Restricted Cash | 144 | 127 | 166 | $ 94 |
Reportable Legal Entities [Member] | Assured Guaranty Ltd. (Parent) [Member] | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash flows provided by (used in) operating activities | 579 | 391 | 513 | |
Fixed-maturity securities: | ||||
Purchases | 0 | (4) | 0 | |
Sales | 0 | 4 | 0 | |
Maturities | 0 | 0 | 0 | |
Sales (purchases) of short-term investments, net | 0 | (26) | 116 | |
Net proceeds from FG VIE assets | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | |||
Intercompany debt | 0 | 0 | ||
Proceeds from sale of subsidiaries | 0 | |||
Proceeds from return of capital from subsidiaries | 0 | 0 | 0 | |
Acquisitions, net of cash acquired | 0 | 0 | 0 | |
Other | 0 | 0 | 0 | |
Net cash flows provided by (used in) investing activities | 0 | (26) | 116 | |
Cash flows from financing activities | ||||
Return of capital | 0 | 0 | 0 | |
Proceeds from Contributed Capital | 0 | |||
Dividends paid | (70) | (69) | (72) | |
Repurchases of common stock | (501) | (306) | (555) | |
Repurchases of common stock to pay withholding taxes | (13) | (2) | (7) | |
Net paydowns of FG VIE liabilities | 0 | 0 | 0 | |
Paydown of long-term debt | 0 | 0 | 0 | |
Proceeds from option exercises | 5 | 12 | 5 | |
Intercompany debt | 0 | 0 | ||
Net cash flows provided by (used in) financing activities | (579) | (365) | (629) | |
Effect of foreign exchange rate changes | 0 | 0 | 0 | |
Increase (Decrease) in Cash and Restricted Cash | 0 | 0 | 0 | |
Cash and Restricted Cash | 0 | 0 | 0 | 0 |
Reportable Legal Entities [Member] | AGUS (Issuer) [Member] | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash flows provided by (used in) operating activities | 442 | 533 | 408 | |
Fixed-maturity securities: | ||||
Purchases | (158) | (143) | (72) | |
Sales | 112 | 24 | 177 | |
Maturities | 13 | 30 | 9 | |
Sales (purchases) of short-term investments, net | 131 | (237) | 33 | |
Net proceeds from FG VIE assets | 0 | 0 | 0 | |
Investment in subsidiaries | (28) | |||
Intercompany debt | 0 | 0 | ||
Proceeds from sale of subsidiaries | 0 | |||
Proceeds from return of capital from subsidiaries | 0 | 0 | 0 | |
Acquisitions, net of cash acquired | 0 | 0 | 0 | |
Other | 0 | 7 | (5) | |
Net cash flows provided by (used in) investing activities | 70 | (319) | 142 | |
Cash flows from financing activities | ||||
Return of capital | 0 | 0 | 0 | |
Proceeds from Contributed Capital | 0 | |||
Dividends paid | (470) | (288) | (455) | |
Repurchases of common stock | 0 | 0 | 0 | |
Repurchases of common stock to pay withholding taxes | 0 | 0 | 0 | |
Net paydowns of FG VIE liabilities | 0 | 0 | 0 | |
Paydown of long-term debt | 0 | 0 | 0 | |
Proceeds from option exercises | 0 | 0 | 0 | |
Intercompany debt | (10) | (20) | ||
Net cash flows provided by (used in) financing activities | (480) | (308) | (455) | |
Effect of foreign exchange rate changes | 0 | 0 | 0 | |
Increase (Decrease) in Cash and Restricted Cash | 32 | (94) | 95 | |
Cash and Restricted Cash | 33 | 1 | 95 | 0 |
Reportable Legal Entities [Member] | AGMH (Issuer) [Member] | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash flows provided by (used in) operating activities | 158 | 213 | 185 | |
Fixed-maturity securities: | ||||
Purchases | (17) | (10) | (21) | |
Sales | 21 | 12 | 30 | |
Maturities | 0 | 0 | 0 | |
Sales (purchases) of short-term investments, net | (8) | (10) | 19 | |
Net proceeds from FG VIE assets | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | |||
Intercompany debt | 0 | 0 | ||
Proceeds from sale of subsidiaries | 0 | |||
Proceeds from return of capital from subsidiaries | 101 | 300 | 25 | |
Acquisitions, net of cash acquired | 0 | 0 | 0 | |
Other | 0 | 0 | 0 | |
Net cash flows provided by (used in) investing activities | 97 | 292 | 53 | |
Cash flows from financing activities | ||||
Return of capital | 0 | 0 | 0 | |
Proceeds from Contributed Capital | 25 | |||
Dividends paid | (278) | (513) | (234) | |
Repurchases of common stock | 0 | 0 | 0 | |
Repurchases of common stock to pay withholding taxes | 0 | 0 | 0 | |
Net paydowns of FG VIE liabilities | 0 | 0 | 0 | |
Paydown of long-term debt | 0 | 0 | 0 | |
Proceeds from option exercises | 0 | 0 | 0 | |
Intercompany debt | 0 | 0 | ||
Net cash flows provided by (used in) financing activities | (253) | (513) | (234) | |
Effect of foreign exchange rate changes | 0 | 0 | 0 | |
Increase (Decrease) in Cash and Restricted Cash | 2 | (8) | 4 | |
Cash and Restricted Cash | 2 | 0 | 8 | 4 |
Reportable Legal Entities [Member] | Other Entities [Member] | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash flows provided by (used in) operating activities | 477 | 72 | 33 | |
Fixed-maturity securities: | ||||
Purchases | (2,404) | (1,489) | (2,550) | |
Sales | 1,568 | 1,325 | 1,900 | |
Maturities | 808 | 1,125 | 889 | |
Sales (purchases) of short-term investments, net | (49) | 290 | 729 | |
Net proceeds from FG VIE assets | 147 | 629 | 400 | |
Investment in subsidiaries | (139) | |||
Intercompany debt | 10 | 20 | ||
Proceeds from sale of subsidiaries | 139 | |||
Proceeds from return of capital from subsidiaries | 70 | 4 | 0 | |
Acquisitions, net of cash acquired | 95 | (442) | (800) | |
Other | 59 | (9) | 74 | |
Net cash flows provided by (used in) investing activities | 304 | 1,453 | 642 | |
Cash flows from financing activities | ||||
Return of capital | (70) | (4) | (25) | |
Proceeds from Contributed Capital | 3 | |||
Dividends paid | (475) | (540) | (455) | |
Repurchases of common stock | (101) | (300) | 0 | |
Repurchases of common stock to pay withholding taxes | 0 | 0 | 0 | |
Net paydowns of FG VIE liabilities | (157) | (611) | (214) | |
Paydown of long-term debt | (3) | (2) | (4) | |
Proceeds from option exercises | 0 | 0 | 0 | |
Intercompany debt | 0 | 0 | ||
Net cash flows provided by (used in) financing activities | (803) | (1,457) | (698) | |
Effect of foreign exchange rate changes | 5 | (5) | (4) | |
Increase (Decrease) in Cash and Restricted Cash | (17) | 63 | (27) | |
Cash and Restricted Cash | 109 | 126 | 63 | 90 |
Consolidation, Eliminations [Member] | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash flows provided by (used in) operating activities | (1,223) | (1,341) | (1,210) | |
Fixed-maturity securities: | ||||
Purchases | 27 | 0 | 66 | |
Sales | 0 | 0 | 0 | |
Maturities | 0 | 0 | 0 | |
Sales (purchases) of short-term investments, net | 0 | 0 | 0 | |
Net proceeds from FG VIE assets | 0 | 0 | 0 | |
Investment in subsidiaries | 167 | |||
Intercompany debt | (10) | (20) | ||
Proceeds from sale of subsidiaries | (139) | |||
Proceeds from return of capital from subsidiaries | (171) | (304) | (25) | |
Acquisitions, net of cash acquired | 0 | 7 | 0 | |
Other | 0 | (7) | 0 | |
Net cash flows provided by (used in) investing activities | (126) | (324) | 41 | |
Cash flows from financing activities | ||||
Return of capital | 70 | 4 | 25 | |
Proceeds from Contributed Capital | (28) | |||
Dividends paid | 1,223 | 1,341 | 1,144 | |
Repurchases of common stock | 101 | 300 | 0 | |
Repurchases of common stock to pay withholding taxes | 0 | 0 | 0 | |
Net paydowns of FG VIE liabilities | 0 | 0 | 0 | |
Paydown of long-term debt | (27) | 0 | 0 | |
Proceeds from option exercises | 0 | 0 | 0 | |
Intercompany debt | 10 | 20 | ||
Net cash flows provided by (used in) financing activities | 1,349 | 1,665 | 1,169 | |
Effect of foreign exchange rate changes | 0 | 0 | 0 | |
Increase (Decrease) in Cash and Restricted Cash | 0 | 0 | 0 | |
Cash and Restricted Cash | $ 0 | $ 0 | $ 0 | $ 0 |
Quarterly Financial Informat150
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||||||||||
Net earned premiums | $ 178 | $ 186 | $ 162 | $ 164 | $ 236 | $ 231 | $ 214 | $ 183 | $ 690 | $ 864 | $ 766 |
Net investment income | 96 | 99 | 101 | 122 | 117 | 94 | 98 | 99 | 418 | 408 | 423 |
Net realized investment gains (losses) | (14) | 7 | 15 | 32 | (24) | (2) | 10 | (13) | 40 | (29) | (26) |
Net change in fair value of credit derivatives | 5 | 58 | (6) | 54 | 74 | 21 | 63 | (60) | 111 | 98 | 728 |
Fair value gains (losses) on CCS | 2 | (4) | 2 | (2) | 50 | (23) | (11) | (16) | (2) | 0 | 27 |
Fair value gains (losses) on FG VIEs | 5 | 3 | 12 | 10 | 27 | (11) | 4 | 18 | 30 | 38 | |
Bargain purchase gain and settlement of pre-existing relationships | 0 | 0 | 0 | 58 | 0 | 259 | 0 | 0 | 58 | 259 | 214 |
Other income (loss) | 9 | 274 | 22 | 89 | (10) | (3) | 18 | 34 | 394 | 39 | 37 |
Expenses | |||||||||||
Loss and LAE | 34 | 223 | 72 | 59 | 112 | (9) | 102 | 90 | 388 | 295 | 424 |
Amortization of DAC | 6 | 5 | 4 | 4 | 5 | 4 | 5 | 4 | 19 | 18 | 20 |
Interest expense | 24 | 24 | 25 | 24 | 25 | 26 | 25 | 26 | 97 | 102 | 101 |
Other operating expenses | 61 | 58 | 57 | 68 | 57 | 65 | 63 | 60 | 244 | 245 | 231 |
Income (loss) before income taxes | 156 | 313 | 150 | 372 | 271 | 480 | 201 | 65 | 991 | 1,017 | 1,431 |
Provision (benefit) for income taxes | 104 | 105 | (3) | 55 | 74 | 1 | 55 | 6 | 261 | 136 | 375 |
Net income (loss) | $ 52 | $ 208 | $ 153 | $ 317 | $ 197 | $ 479 | $ 146 | $ 59 | $ 730 | $ 881 | $ 1,056 |
Earnings per share: | |||||||||||
Basic (in dollars per share) | $ 0.44 | $ 1.75 | $ 1.26 | $ 2.53 | $ 1.51 | $ 3.63 | $ 1.09 | $ 0.43 | $ 6.05 | $ 6.61 | $ 7.12 |
Diluted (in dollars per share) | 0.44 | 1.72 | 1.24 | 2.49 | 1.49 | 3.60 | 1.09 | 0.43 | 5.96 | 6.56 | 7.08 |
Dividends (in dollars per share) | $ 0.1425 | $ 0.1425 | $ 0.1425 | $ 0.1425 | $ 0.13 | $ 0.13 | $ 0.13 | $ 0.13 | $ 0.57 | $ 0.52 | $ 0.48 |