Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 15, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MGIC INVESTMENT CORP | ||
Entity Central Index Key | 876,437 | ||
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 | $ 2 | ||
Entity Common Stock, Shares Outstanding | 340,990,121 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Securities, available-for-sale, at fair value: | ||
Fixed income (amortized cost, 2016 - $4,717,211; 2015 - $4,684,148) | $ 4,685,222 | $ 4,657,561 |
Equity securities | 7,128 | 5,645 |
Total investment portfolio | 4,692,350 | 4,663,206 |
Cash and cash equivalents | 155,410 | 181,120 |
Accrued investment income | 44,073 | 40,224 |
Reinsurance recoverable on loss reserves | 50,493 | 44,487 |
Reinsurance recoverable on paid losses | 4,964 | 3,319 |
Premiums receivable | 52,392 | 48,469 |
Home office and equipment, net | 36,088 | 30,095 |
Deferred insurance policy acquisition costs | 17,759 | 15,241 |
Deferred income taxes, net | 607,655 | 762,080 |
Other assets | 73,345 | 80,102 |
Total assets | 5,734,529 | 5,868,343 |
Liabilities: | ||
Loss reserves | 1,438,813 | 1,893,402 |
Unearned premiums | 329,737 | 279,973 |
FHLB Advance | 155,000 | 0 |
Senior notes | 417,406 | 0 |
Convertible senior notes | 349,461 | 822,301 |
Convertible junior subordinated debentures | 256,872 | 389,522 |
Other liabilities | 238,398 | 247,005 |
Total liabilities | 3,185,687 | 3,632,203 |
Contingencies | ||
Shareholders' equity: | ||
Common stock (one dollar par value, shares authorized 1,000,000; shares issued 2016 - 359,400; 2015 - 340,097; outstanding 2016 - 340,663; 2015 - 339,657) | 359,400 | 340,097 |
Paid-in capital | 1,782,337 | 1,670,238 |
Treasury stock (shares at cost 2016 - 18,737; 2015 - 440) | (150,359) | (3,362) |
Accumulated other comprehensive loss, net of tax | (75,100) | (60,880) |
Retained earnings | 632,564 | 290,047 |
Total shareholders' equity | 2,548,842 | 2,236,140 |
Total liabilities and shareholders' equity | $ 5,734,529 | $ 5,868,343 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Fixed income, amortized cost | $ 4,717,211 | $ 4,684,148 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 359,400,000 | 340,097,000 |
Common stock, shares outstanding (in shares) | 340,663,000 | 339,657,000 |
Treasury stock, shares at cost (in shares) | 18,737,000 | 440,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Premiums written: | |||
Direct | $ 1,107,923,000 | $ 1,074,490,000 | $ 999,943,000 |
Assumed | 1,053,000 | 1,178,000 | 1,653,000 |
Ceded | (133,885,000) | (55,391,000) | (119,634,000) |
Net premiums written | 975,091,000 | 1,020,277,000 | 881,962,000 |
Increase in unearned premiums | (49,865,000) | (124,055,000) | (37,591,000) |
Net premiums earned | 925,226,000 | 896,222,000 | 844,371,000 |
Investment income, net of expenses | 110,666,000 | 103,741,000 | 87,647,000 |
Net realized investment gains (losses): | |||
Total other-than-temporary impairment losses | 0 | 0 | (144,000) |
Portion of losses recognized in other comprehensive income (loss), before taxes | 0 | 0 | 0 |
Net impairment losses recognized in earnings | 0 | 0 | (144,000) |
Other realized investment gains | 8,932,000 | 28,361,000 | 1,501,000 |
Net realized investment gains | 8,932,000 | 28,361,000 | 1,357,000 |
Other revenue | 17,659,000 | 12,964,000 | 9,259,000 |
Total revenues | 1,062,483,000 | 1,041,288,000 | 942,634,000 |
Losses and expenses: | |||
Losses incurred, net | 240,157,000 | 343,547,000 | 496,077,000 |
Change in premium deficiency reserve | 0 | (23,751,000) | (24,710,000) |
Amortization of deferred policy acquisition costs | 9,646,000 | 8,789,000 | 7,618,000 |
Other underwriting and operating expenses, net | 150,763,000 | 155,577,000 | 138,441,000 |
Interest expense | 56,672,000 | 68,932,000 | 69,648,000 |
Loss on debt extinguishment | 90,531,000 | 507,000 | 837,000 |
Total losses and expenses | 547,769,000 | 553,601,000 | 687,911,000 |
Income before tax | 514,714,000 | 487,687,000 | 254,723,000 |
Provision for (benefit from) income taxes | 172,197,000 | (684,313,000) | 2,774,000 |
Net income | $ 342,517,000 | $ 1,172,000,000 | $ 251,949,000 |
Earnings per share: | |||
Basic (in dollars per share) | $ 1 | $ 3.45 | $ 0.74 |
Diluted (in dollars per share) | $ 0.86 | $ 2.60 | $ 0.64 |
Weighted average common shares outstanding - basic (in shares) | 342,890 | 339,552 | 338,523 |
Weighted average common shares outstanding - diluted (in shares) | 431,992 | 468,039 | 413,522 |
Dividends per share (in dollars per share) | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||||||||||
Net income | $ 107,487 | $ 56,618 | $ 109,221 | $ 69,191 | $ 102,418 | $ 822,852 | $ 113,654 | $ 133,076 | $ 342,517 | $ 1,172,000 | $ 251,949 |
Other comprehensive (loss) income, net of tax: | |||||||||||
Change in unrealized investment gains and losses | (3,649) | 40,403 | 91,139 | ||||||||
Benefit plans adjustment | (9,620) | (15,714) | (52,112) | ||||||||
Foreign currency translation adjustment | (951) | (4,228) | (2,642) | ||||||||
Other comprehensive (loss) income, net of tax | (14,220) | 20,461 | 36,385 | ||||||||
Comprehensive income | $ 328,297 | $ 1,192,461 | $ 288,334 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Paid-in capital | Treasury stock | Accumulated other comprehensive loss | Retained earnings (deficit) |
Balance, beginning of year at Dec. 31, 2013 | $ 340,047 | $ 1,661,269 | $ (64,435) | $ (117,726) | $ (1,074,617) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issuance | 0 | 0 | ||||
Net common stock issued under share-based compensation plans | 0 | 0 | ||||
Reissuance of treasury stock, net | (6,680) | 31,498 | (29,790) | |||
Tax benefit from share-based compensation | 0 | |||||
Equity compensation | 9,003 | |||||
Reacquisition of convertible junior subordinated debentures-equity component | 0 | |||||
Purchases of common stock | 0 | |||||
Other comprehensive (loss) income | $ 36,385 | 36,385 | ||||
Net income | 251,949 | 251,949 | ||||
Balance, end of year at Dec. 31, 2014 | 1,036,903 | 340,047 | 1,663,592 | (32,937) | (81,341) | (852,458) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issuance | 0 | 0 | ||||
Net common stock issued under share-based compensation plans | 50 | (478) | ||||
Reissuance of treasury stock, net | (6,894) | 29,575 | (29,495) | |||
Tax benefit from share-based compensation | 2,116 | |||||
Equity compensation | 11,902 | |||||
Reacquisition of convertible junior subordinated debentures-equity component | 0 | |||||
Purchases of common stock | 0 | |||||
Other comprehensive (loss) income | 20,461 | 20,461 | ||||
Net income | 1,172,000 | 1,172,000 | ||||
Balance, end of year at Dec. 31, 2015 | 2,236,140 | 340,097 | 1,670,238 | (3,362) | (60,880) | 290,047 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issuance | 18,313 | 113,146 | ||||
Net common stock issued under share-based compensation plans | 990 | (6,020) | ||||
Reissuance of treasury stock, net | (130) | 130 | 0 | |||
Tax benefit from share-based compensation | 67 | |||||
Equity compensation | 11,373 | |||||
Reacquisition of convertible junior subordinated debentures-equity component | (6,337) | |||||
Purchases of common stock | (147,127) | |||||
Other comprehensive (loss) income | (14,220) | (14,220) | ||||
Net income | 342,517 | 342,517 | ||||
Balance, end of year at Dec. 31, 2016 | $ 2,548,842 | $ 359,400 | $ 1,782,337 | $ (150,359) | $ (75,100) | $ 632,564 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 342,517 | $ 1,172,000 | $ 251,949 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and other amortization | 61,342 | 52,559 | 48,861 |
Deferred tax expense (benefit) | 162,356 | (692,810) | 312 |
Net realized investment gains | (8,932) | (28,361) | (1,357) |
Loss on debt extinguishment | 90,531 | 507 | 837 |
Excess tax benefits related to share-based compensation | (67) | (2,117) | 0 |
Change in certain assets and liabilities: | |||
Accrued investment income | (3,849) | (9,706) | 1,142 |
Prepaid reinsurance premium | 101 | 47,457 | (11,380) |
Reinsurance recoverable on loss reserves | (6,006) | 13,354 | 6,244 |
Reinsurance recoverable on paid losses | (1,645) | 3,105 | 4,001 |
Premiums receivable | (3,923) | 8,973 | 4,859 |
Deferred insurance policy acquisition costs | (2,518) | (3,001) | (2,519) |
Profit commission receivable | (747) | 64,525 | (89,132) |
Loss reserves | (454,589) | (503,405) | (664,594) |
Premium deficiency reserve | 0 | (23,751) | (24,710) |
Unearned premiums | 49,764 | 76,559 | 48,935 |
Return premium accrual | (18,800) | (9,600) | 22,200 |
Income taxes payable - current | 1,123 | 2,518 | (674) |
Other, net | 13,005 | (16,770) | (251) |
Net cash provided by (used in) operating activities | 219,663 | 152,036 | (405,277) |
Purchases of investments: | |||
Fixed income | (1,360,386) | (2,462,844) | (1,979,917) |
Equity securities | (3,197) | (2,623) | (94) |
Proceeds from sales of fixed income | 728,042 | 1,796,153 | 1,147,624 |
Proceeds from maturity of fixed income | 547,444 | 559,774 | 1,129,087 |
Proceeds from sale of equity securities | 5,257 | 0 | 0 |
Net decrease in payables for securities | 0 | 0 | 13 |
Net decrease in restricted cash | 0 | 17,212 | 228 |
Additions to property and equipment | (10,552) | (4,630) | (4,707) |
Net cash (used in) provided by investing activities | (93,392) | (96,958) | 292,234 |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 573,094 | 0 | 0 |
Repayment of long-term debt | 0 | (61,953) | (20,772) |
Repurchase of convertible senior notes | (363,778) | (11,152) | 0 |
Payment of original issue discount - convertible senior notes | (11,250) | (345) | (158) |
Purchase of convertible junior subordinated debentures | (100,860) | 0 | 0 |
Payment of original issue discount-convertible junior subordinated debentures | (41,540) | 0 | 0 |
Cash portion of loss on debt extinguishment | (59,460) | (507) | (837) |
Repurchase of common stock | (147,127) | 0 | 0 |
Payment of debt issuance costs | (1,127) | 0 | 0 |
Excess tax benefits related to share-based compensation | 67 | 2,117 | 0 |
Net cash used in financing activities | (151,981) | (71,840) | (21,767) |
Net decrease in cash and cash equivalents | (25,710) | (16,762) | (134,810) |
Cash and cash equivalents at beginning of year | 181,120 | 197,882 | 332,692 |
Cash and cash equivalents at end of year | $ 155,410 | $ 181,120 | $ 197,882 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2016 | |
Nature of Business [Abstract] | |
Nature of Business | Nature of Business MGIC Investment Corporation is a holding company which, through Mortgage Guaranty Insurance Corporation ("MGIC"), is principally engaged in the mortgage insurance business. We provide mortgage insurance to lenders throughout the United States and to government sponsored entities to protect against loss from defaults on low down payment residential mortgage loans. Our principal product is primary mortgage insurance. Primary insurance provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure or sale approved by us. Through certain other non-insurance subsidiaries, we also provide various services for the mortgage finance industry, such as contract underwriting, analysis of loan originations and portfolios, and mortgage lead generation. An insurance subsidiary of MGIC provides credit insurance for certain mortgages under Fannie Mae and Freddie Mac (the "GSEs") credit risk transfer programs. At December 31, 2016 , our direct domestic primary insurance in force ("IIF") was $182.0 billion , which represents the principal balance in our records of all mortgage loans that we insure, and our direct domestic primary risk in force ("RIF") was $47.2 billion , which represents the insurance in force multiplied by the insurance coverage percentage. Substantially all of our insurance written since 2008 has been for loans purchased by the GSEs. We operate under the Private Mortgage Insurer Eligibility Requirements ("PMIERs") of the GSEs that became effective December 31, 2015, and were most recently revised in December 2016. The financial requirements of the PMIERs require a mortgage insurer’s "Available Assets" (generally only the most liquid assets of an insurer) to equal or exceed its "Minimum Required Assets" (which are based on an insurer's book and are calculated from tables of factors with several risk dimensions and are subject to a floor amount). Based on our interpretation of the PMIERs, as of December 31, 2016 , MGIC’s Available Assets are in excess of its Minimum Required Assets; and MGIC is in compliance with the requirements of the PMIERs and eligible to insure loans purchased by the GSEs. The revisions to the PMIERs in December 2016 had no impact on our calculation of Available Assets or Minimum Required Assets, and did not impact our operations. |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), as codified in the Accounting Standards Codification ("ASC"). Our consolidated financial statements include the accounts of MGIC Investment Corporation and its majority-owned subsidiaries. Intercompany transactions and balances have been eliminated. In accordance with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We have considered subsequent events through the date of this filing. Reclassifications Certain reclassifications to 2015 and 2014 amounts have been made in the accompanying consolidated financial statements to conform to the 2016 presentation. See Note 3 - "Significant Accounting Policies" for a discussion of our adoption of accounting guidance in 2016 related to: (1) the presentation of debt issuance costs in the first quarter of 2016, and (2) clarification of certain cash receipts and cash payments. Both of the adopted accounting updates were retrospectively applied to all periods presented, as applicable. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Cash and Cash Equivalents We consider money market funds and investments with original maturities of three months or less to be cash equivalents. Fair value measurements The authoritative guidance around fair value established a framework for measuring fair value. Fair value is disclosed using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value and includes Levels 1, 2, and 3. To determine the fair value of securities available-for-sale in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including data published in market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. This model combines all inputs to arrive at a value assigned to each security. Quality controls are performed by the independent pricing sources throughout this process, which include reviewing tolerance reports, trading information, data changes, and directional moves compared to market moves. In addition, on a quarterly basis, we perform quality controls over values received from the pricing sources which also include reviewing tolerance reports, trading information, data changes, and directional moves compared to market moves. We have not made any adjustments to the prices obtained from the independent pricing sources. In accordance with fair value accounting guidance, we applied the following fair value hierarchy in order to measure fair value for assets and liabilities: Level 1 - Quoted prices for identical instruments in active markets that we can access. Financial assets utilizing Level 1 inputs primarily include U.S. Treasury securities, equity securities, and Australian government and semi government securities. Level 2 - Quoted prices for similar instruments in active markets that we can access; quoted prices for identical or similar instruments in markets that are not active; and inputs, other than quoted prices, that are observable in the marketplace for the instrument. The observable inputs are used in valuation models to calculate the fair value of the instruments. Financial assets utilizing Level 2 inputs primarily include obligations of U.S. government corporations and agencies, corporate bonds, mortgage-backed securities, asset-backed securities, and most municipal bonds. The independent pricing sources utilize these approaches to determine the fair value of the instruments in Level 2 of the fair value hierarchy based on type of instrument: Corporate Debt & U.S. Government and Agency Bonds are evaluated by surveying the dealer community, obtaining relevant trade data, benchmark quotes and spreads and incorporating this information into the evaluation process. Obligations of U.S. States & Political Subdivisions are evaluated by tracking, capturing, and analyzing quotes for active issues and trades reported via the Municipal Securities Rulemaking Board records. Daily briefings and reviews of current economic conditions, trading levels, spread relationships, and the slope of the yield curve provide further data for evaluation. Residential Mortgage-Backed Securities ("RMBS") are evaluated by monitoring interest rate movements, and other pertinent data daily. Incoming market data is enriched to derive spread, yield and/or price data as appropriate, enabling known data points to be extrapolated for valuation application across a range of related securities. Commercial Mortgage-Backed Securities ("CMBS") are evaluated using valuation techniques that reflect market participants’ assumptions and maximize the use of relevant observable inputs including quoted prices for similar assets, benchmark yield curves and market corroborated inputs. Evaluation utilizes regular reviews of the inputs for securities covered, including executed trades, broker quotes, credit information, collateral attributes and/or cash flow waterfall as applicable. Asset-Backed Securities ("ABS") are evaluated using spreads and other information solicited from market buy-and-sell-side sources, including primary and secondary dealers, portfolio managers, and research analysts. Cash flows are generated for each tranche, benchmark yields are determined, and deal collateral performance and tranche level attributes including trade activity, bids, and offers are applied, resulting in tranche specific prices. Collateralized loan obligations ("CLO") Collateralized Loan Obligations are evaluated by manager rating, seniority in the capital structure, assumptions about prepayment, default and recovery and their impact on cash flow generation. Loan level net asset values are determined and aggregated for tranches and as a final step prices are checked against available recent trade activity. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or value drivers are unobservable or from par values for equity securities restricted in their ability to be redeemed or sold. The inputs used to derive the fair value of Level 3 securities reflect our own assumptions about the assumptions a market participant would use in pricing an asset or liability. Financial assets utilizing Level 3 inputs primarily include equity securities that can only be redeemed or sold at their par value and only to the security issuer and certain state premium tax credit investments. Our non-financial assets that are classified as Level 3 securities consist of real estate acquired through claim settlement. The fair value of real estate acquired is the lower of our acquisition cost or a percentage of the appraised value. The percentage applied to the appraised value is based upon our historical sales experience adjusted for current trends. Investments Our entire investment portfolio is classified as available-for-sale and is reported at fair value or, for certain equity securities carried at cost, amounts that approximate fair value. The related unrealized investment gains or losses are, after considering the related tax expense or benefit, recognized as a component of accumulated other comprehensive income (loss) in shareholders' equity. Realized investment gains and losses are reported in income based upon specific identification of securities sold. (See Note 5 – “Investments.” ) Each quarter we perform reviews of our investments in order to determine whether declines in fair value below amortized cost were considered other-than-temporary. In evaluating whether a decline in fair value is other-than-temporary, we consider several factors including, but not limited to: ▪ our intent to sell the security or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; ▪ the present value of the discounted cash flows we expect to collect compared to the amortized cost basis of the security; ▪ extent and duration of the decline; ▪ failure of the issuer to make scheduled interest or principal payments; ▪ change in rating below investment grade; and ▪ adverse conditions specifically related to the security, an industry, or a geographic area. Based on our evaluation, we will record an other-than-temporary impairment ("OTTI") adjustment on a security if we intend to sell the impaired security, if it is more likely than not that we will be required to sell the impaired security prior to recovery of its amortized cost basis, or if the present value of the discounted cash flows we expect to collect is less than the amortized cost basis of the security. If the fair value of a security is below its amortized cost at the time of our intent to sell, the security is classified as other-than-temporarily impaired and the full amount of the impairment is recognized as a loss in the statement of operations. Otherwise, when a security is considered to be other-than-temporarily impaired, the losses are separated into the portion of the loss that represents the credit loss and the portion that is due to other factors. The credit loss portion is recognized as a loss in the statement of operations, while the loss due to other factors is recognized in accumulated other comprehensive loss, net of taxes. A credit loss is determined to exist if the present value of the discounted cash flows, using the security’s original yield, expected to be collected from the security is less than the cost basis of the security. Home office and equipment Home office and equipment is carried at cost net of depreciation. For financial reporting purposes, depreciation is determined on a straight-line basis for the home office and equipment over estimated lives ranging from 3 to 45 years. For income tax purposes, we use accelerated depreciation methods. Home office and equipment is shown net of accumulated depreciation of $30.6 million , $26.1 million and $54.9 million as of December 31, 2016 , 2015 and 2014 , respectively. Depreciation expense for the years ended December 31, 2016 , 2015 and 2014 was $4.6 million , $3.2 million and $2.2 million , respectively. Deferred Insurance Policy Acquisition Costs Costs directly associated with the successful acquisition of mortgage insurance business, consisting of employee compensation and other policy issuance and underwriting expenses, are initially deferred and reported as deferred insurance policy acquisition costs ("DAC"). The deferred costs are net of any ceding commissions received associated with our reinsurance agreements. For each underwriting year of business, these costs are amortized to income in proportion to estimated gross profits over the estimated life of the policies. We utilize anticipated investment income in our calculation. This includes accruing interest on the unamortized balance of DAC. The estimates for each underwriting year are reviewed quarterly and updated when necessary to reflect actual experience and any changes to key variables such as persistency or loss development. If a premium deficiency exists (in other words, no gross profit is expected), we reduce the related DAC by the amount of the deficiency or to zero through a charge to current period earnings. If the deficiency is more than the related DAC balance, we then establish a premium deficiency reserve equal to the excess, through a charge to current period earnings. Loss Reserves Reserves are established for insurance losses and loss adjustment expenses ("LAE") when we receive notices of default on insured mortgage loans. We consider a loan in default when it is two or more payments past due. Even though the accounting standard, ASC 944, regarding accounting and reporting by insurance entities specifically excludes mortgage insurance from its guidance relating to loss reserves, we establish loss reserves using the general principles contained in the insurance standard. However, consistent with industry standards for mortgage insurers, we do not establish loss reserves for future claims on insured loans which are not currently in default. Loss reserves are established by estimating the number of loans in our inventory of delinquent loans that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity. Our loss estimates are established based upon historical experience, including rescission and loan modification activity. Adjustments to reserve estimates are reflected in the financial statements in the years in which the adjustments are made. The liability for reinsurance assumed is based on information provided by the ceding companies. Reserves are also established for estimated losses from defaults occurring prior to the close of an accounting period on notices of default not yet reported to us. These incurred but not reported ("IBNR") reserves are also established using estimated claim rates and claim severities. Reserves are also established for the estimated costs of settling claims, including legal and other expenses and general expenses of administering the claims settlement process. Reserves are also ceded to reinsurers under our reinsurance agreements. (See Note 8 – “Loss Reserves” and Note 9 – “Reinsurance.” ) Premium Deficiency Reserve After our loss reserves are initially established, we perform premium deficiency tests using our best estimate assumptions as of the testing date. Premium deficiency reserves are established, if necessary, when the present value of expected future losses and expenses exceeds the present value of expected future premium and already established reserves. The discount rate used in the calculation of the premium deficiency reserve is based upon our pre-tax investment yield at year-end. Products are grouped for premium deficiency testing purposes based on similarities in the way the products are acquired, serviced and measured for profitability. The calculation of premium deficiency reserves requires the use of significant judgments and estimates to determine the present value of future premium and present value of expected losses and expenses on our business. The calculation of future premium depends on, among other things, assumptions about persistency and repayment patterns on underlying loans. The calculation of expected losses and expenses depends on assumptions relating to severity of claims and claim rates on current defaults, and expected defaults in future periods. These assumptions also include an estimate of expected rescission activity. Similar to our loss reserve estimates, our estimates for premium deficiency reserves could be adversely affected by several factors, including a deterioration of regional or economic conditions leading to a reduction in borrowers' income and thus their ability to make mortgage payments, and a drop in housing values can influence the willingness of borrowers with sufficient resources to make mortgage payments to do so when the mortgage balance exceeds the value of the home, which could expose us to greater losses. Assumptions used in calculating the deficiency reserves can also be affected by volatility in the current housing and mortgage lending industries. To the extent premium patterns and actual loss experience differ from the assumptions used in calculating the premium deficiency reserves, the differences between the actual results and our estimate will affect future period earnings and could be material. We previously established a premium deficiency reserve in 2007 on our Wall Street Bulk business, which we also ceased writing in that year. As of December 31, 2015 a premium deficiency reserve was no longer required. Changes in the premium deficiency reserve from period to period were primarily due to the recognition of previously estimated premiums, losses, and expenses, and changes in our assumptions relating to the present value of expected future premiums, losses, and expenses on the remaining Wall Street Bulk IIF. Our consolidated statements of operations for the years ended December 31, 2015 and 2014 were affected by decreases in our premium deficiency reserves of $24 million and $25 million , respectively. The decreases represented the net result of actual premiums, losses and expenses as well as a net change in assumptions for these periods. Revenue Recognition We write policies which are guaranteed renewable contracts at the insured's option on a monthly, single, or annual premium basis. We have no ability to reunderwrite or reprice these contracts. Premiums written on monthly premium policies are earned as coverage is provided. Premiums written on single premium policies and annual premium policies are initially deferred as unearned premium reserve and earned over the estimated policy life. Premiums written on policies covering more than one year are amortized over the policy life in relationship to the anticipated incurred loss pattern based on historical experience. Premiums written on annual premium policies are earned on a monthly pro rata basis. When a policy is cancelled for a reason other than rescission or claim payment, all premium that is non-refundable is immediately earned. Any refundable premium is returned to the servicer or borrower. When a policy is cancelled due to rescission, all previously collected premium is returned to the servicer and when a policy is cancelled because a claim is paid, we return any premium received since the date of default. The liability associated with our estimate of premium to be returned is accrued for separately and included in "Other liabilities" on our consolidated balance sheets. When a premium deficiency exists the premium refund liability is included in “Premium deficiency reserves” on our consolidated balance sheets. Changes in these liabilities affect premiums written and earned and change in premium deficiency reserve, respectively. The actual return of premium for all periods affects premiums written and earned. Policy cancellations also lower the persistency rate which is a variable used in calculating the rate of amortization of deferred insurance policy acquisition costs. Fee income of our non-insurance subsidiaries is earned and recognized as the services are provided and the customer is obligated to pay. Fee income consists primarily of contract underwriting and related fee-based services provided to lenders and is included in “Other revenue” on the consolidated statements of operations. Income Taxes Deferred income taxes are provided under the liability method, which recognizes the future tax effects of temporary differences between amounts reported in the consolidated financial statements and the tax bases of these items. The expected tax effects are computed at the enacted regular federal statutory tax rate. Using this method, we have recorded a net deferred tax asset primarily due to net operating losses incurred in prior years. On a quarterly basis, we review the need to maintain a deferred tax asset valuation allowance as an offset to the net deferred tax asset, before valuation allowance. We analyze several factors, among which are the severity and frequency of operating losses, our capacity for the carryback or carryforward of any losses, the existence and current level of taxable operating income, operating results on a three year cumulative basis, the expected occurrence of future income or loss, the expiration dates of the carryforwards, the cyclical nature of our operating results, and available tax planning strategies. Based on our analysis, we reduced our benefit from income tax through the recognition of a valuation allowance from the first quarter of 2009 through the second quarter of 2015. In the third quarter of 2015, as discussed in Note 12 –“Income Taxes,” we concluded that it was more likely than not that our deferred tax assets would be fully realizable and we reversed the valuation allowance. We provide for uncertain tax positions and the related interest and penalties based on our assessment of whether a tax benefit is more likely than not to be sustained under any examination by taxing authorities. Benefit Plans We have a non-contributory defined benefit pension plan covering substantially all employees, as well as a supplemental executive retirement plan. Retirement benefits are based on compensation and years of service. We recognize these retirement benefit costs over the period during which employees render the service that qualifies them for benefits. Our policy is to fund pension cost as required under the Employee Retirement Income Security Act of 1974. We offer both medical and dental benefits for retired domestic employees, their eligible spouses and dependents until the retiree reaches the age of 65 . Under the plan retirees pay a premium for these benefits. We accrue the estimated costs of retiree medical and dental benefits over the period during which employees render the service that qualifies them for benefits. (See Note 11 – “Benefit Plans.” ) Reinsurance Loss reserves and unearned premiums are reported before taking credit for amounts ceded under reinsurance agreements. Ceded loss reserves are reflected as "Reinsurance recoverable on loss reserves." Ceded unearned premiums are included in “Other assets.” Amounts due from reinsurers on paid claims are reflected as “Reinsurance recoverable on paid losses.” Ceded premiums payable are included in “Other liabilities.” Any profit commissions are included with “Premiums written – Ceded” and any ceding commissions are included with “Other underwriting and operating expenses, net.” We remain liable for all insurance ceded. (See Note 9 – “Reinsurance.” ) Share-Based Compensation We have certain share-based compensation plans. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period which generally corresponds to the vesting period. The fair value of awards classified as liabilities is remeasured at each reporting period until the award is settled. Awards under our plans generally vest over periods ranging from one to three years. (See Note 15 – “Share-based Compensation Plans.” ) Earnings per Share Basic earnings per share ("EPS") is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. We calculate diluted EPS using the treasury stock method and if-converted method. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if our unvested restricted stock units result in the issuance of common stock. Under the if-converted method, diluted EPS reflects the potential dilution that could occur if our convertible debt instruments result in the issuance of common stock. The determination of potentially issuable shares does not consider the satisfaction of the conversion requirements and the shares are included in the determination of diluted EPS as of the beginning of the period, if dilutive. We have several debt issuances that could result in contingently issuable shares and consider each potential issuance of shares separately to reflect the maximum potential dilution. Nonetheless, our dilutive common stock equivalents may not reflect all of the contingently issuable shares that could be required to be issued upon any debt conversion. For purposes of calculating basic and diluted EPS, vested restricted stock and restricted stock units ("RSUs") are considered outstanding. Related party transactions There were no related party transactions during 2016 , 2015 or 2014 . Recent accounting and reporting developments Standard Summary of guidance Effects on financial statements and/or disclosures Presentation of Debt Issuance Costs • Requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. • Adopted March 31, 2016 with retrospective application to prior periods. • Does not impact the amortization method for these costs. • There was no material impact on the consolidated balance sheets, and no impact on our statements of operations. • For further information, see Note 7. "Debt." Accounting for Share-Based Compensation When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period • Requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. • Adopted March 31, 2016 with application to performance based awards granted in 2016. • Compensation cost should be recognized in the period in which it become probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. • There was no material impact on our consolidated financial statements. • If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. • For further information, see Note 15. "Share-based Compensation Plans" . Disclosures about Short-Duration Contracts • Requires expanded disclosures designed to provide additional insight into an insurance entity's ability to underwrite and anticipate costs associated with claims. • This standard is not considered applicable to our business and therefore we have not adopted these disclosure requirements. • Disclosures include information about incurred and paid claims development, on a net of reinsurance basis, for the number of years claims incurred typically remain outstanding not to exceed ten years. • Expanded disclosures also include more transparent information about significant changes in methodologies and assumptions used to estimate claims, and the timing, frequency, and severity of claims. Classification of Certain Cash Receipts and Cash Payments • Provides specific guidance on the presentation of certain cash flow items including, but not limited to, debt prepayment and debt issuance costs and proceeds from the settlement of insurance claims. • Adopted December 31, 2016 with application to prior periods. • Cash flows related to debt prepayment and debt issuance transactions have been reclassified as financing activities from operating activities. • For further information on the impact our transactions had on our cash and cash equivalents see our consolidated statements of cash flows . Financial Accounting Standards Board ("FASB") Standards Issued but not yet Adopted Standard Summary of guidance Effects on financial statements and/or disclosures Recognition and Measurement of Financial Assets and Financial Liabilities Issued January 2016 • Requires equity investments, except those accounted for under the equity method of accounting that have a readily determinable fair value to be measured at fair value with changes in fair value recognized in earnings. • Required effective date: January 1, 2018. • Equity investments that do not have readily determinable fair values may be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. A qualitative assessment for impairment is required for equity investments without readily determinable fair values. • The potential impact from the adoption of this guidance is not expected to have a material impact our consolidated balance sheets, consolidated statements of operations, or liquidity. • Requires recognition of a cumulative effect adjustment to retained earnings as of the beginning of the reporting period of adoption. • For further information on our current equity investments see Note 5. "Investments." Improvements to Employee Share-Based Compensation Accounting Issued March 2016 • Requires that, prospectively, all tax effects related to share-based compensation be made through the statement of operations at the time of settlement, rather than recognizing excess tax benefits within paid-in capital. • Required effective date: January 1, 2017. • Removes the requirement to delay recognition of a tax benefit until it reduces current taxes payable. This change is required to be applied on a modified retrospective basis. • We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements. • Requires all tax related cash flows resulting from share-based compensation to be reported as operating activities, a change from the existing requirement to present tax benefits as an inflow from financing activities and an outflow from operating activities. • Entities, for tax withholding purposes, will be allowed to withhold an amount of shares up to an employee's maximum individual tax rate (as opposed to the minimum statutory tax rate) in the relevant jurisdiction without resulting in liability classification of the award. Measurement of Credit Losses on Financial Statements Issued June 2016 • Requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial instruments. Entities are required to use a current expected credit loss ("CECL") methodology that incorporates their forecasts of future economic conditions, unless such forecast is not reasonable or supportable, in which case the entity will revert to historical loss experience. • Required effective date: January 1, 2020. • Amends existing guidance for available-for-sale fixed income securities to incorporate an allowance, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which the fair value is less than amortized cost. The guidance will allow for reversals of impairment losses in the event that the credit of an issuer improves. The length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. • We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements, but do not expect it to have a material impact. • Updated guidance is not prescriptive about certain aspects of estimating expected credit losses, including the specific methodology to use, and therefore will require significant judgment in application. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings Per Share The computation of basic EPS includes as "participating securities" unvested share-based compensation awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, under the "two-class" method. Our participating securities are composed of vested restricted stock and restricted stock units with non-forfeitable rights to dividends (of which none have been declared since the issuance of these participating securities). For each of the years ended December 31, 2016 , 2015 , and 2014 , participating securities of 0.1 million have been included in basic EPS. The computation of diluted EPS for the years ended December 31, 2016 , 2015 , and 2014 includes weighted average unvested restricted stock units outstanding of 1.5 million , 2.1 million , and 3.1 million , respectively. For the years ended December 31, 2016 and 2015 , all of our outstanding Convertible Senior Notes and Convertible Junior Subordinated Debentures are reflected in diluted earnings per share using the “if-converted” method. Under this method, if dilutive, the common stock related to the outstanding Convertible Senior Notes and/or Convertible Junior Debentures is assumed issued as of the beginning of the reporting period and the related interest expense, net of tax, is added back to earnings in calculating diluted EPS. For the year ended December 31, 2014 our 5% Notes and 9% Debentures were not included in calculating diluted EPS as the result was anti-dilutive under the "if-converted" method. The following table reconciles basic and diluted EPS amounts: (In thousands, except per share data) Years Ended December 31, 2016 2015 2014 Basic earnings per share: Net income $ 342,517 $ 1,172,000 $ 251,949 Weighted average common shares outstanding 342,890 339,552 338,523 Basic income per share $ 1.00 $ 3.45 $ 0.74 Diluted earnings per share: Net income $ 342,517 $ 1,172,000 $ 251,949 Interest expense, net of tax (1) : 2% Notes 6,111 7,928 12,197 5% Notes 6,362 12,228 — 9% Debentures 15,893 22,786 — Diluted income available to common shareholders $ 370,883 $ 1,214,942 $ 264,146 Weighted-average shares - Basic 342,890 339,552 338,523 Effect of dilutive securities: Unvested restricted stock units 1,470 2,113 3,082 2% Notes 54,450 71,917 71,917 5% Notes 13,107 25,603 — 9% Debentures 20,075 28,854 — Weighted-average shares - Diluted 431,992 468,039 413,522 Diluted earnings per share $ 0.86 $ 2.60 $ 0.64 Anti-dilutive securities (in millions) — — 54.5 (1) Interest expense for the years ended December 31, 2016 and December 31, 2015 has been tax effected at a rate of 35% . Due to the valuation allowance recorded against deferred tax assets, interest expense for the year ended December 31, 2014 was not tax effected. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments [Abstract] | |
Investments | Investments The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio as of December 31, 2016 and 2015 are shown below: December 31, 2016 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses (1) Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 73,847 $ 407 $ (724 ) $ 73,530 Obligations of U.S. states and political subdivisions 2,147,458 20,983 (25,425 ) 2,143,016 Corporate debt securities 1,756,461 6,059 (18,610 ) 1,743,910 ABS 59,519 74 (28 ) 59,565 RMBS 231,733 102 (7,626 ) 224,209 CMBS 327,042 769 (7,994 ) 319,817 CLOs 121,151 226 (202 ) 121,175 Total debt securities 4,717,211 28,620 (60,609 ) 4,685,222 Equity securities 7,144 8 (24 ) 7,128 Total investment portfolio $ 4,724,355 $ 28,628 $ (60,633 ) $ 4,692,350 December 31, 2015 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses (1) Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 160,393 $ 2,133 $ (1,942 ) $ 160,584 Obligations of U.S. states and political subdivisions 1,766,407 33,410 (7,290 ) 1,792,527 Corporate debt securities 2,046,697 2,836 (44,770 ) 2,004,763 ABS 116,764 56 (203 ) 116,617 RMBS 265,879 161 (8,392 ) 257,648 CMBS 237,304 162 (3,975 ) 233,491 CLOs 61,345 3 (1,148 ) 60,200 Debt securities issued by foreign sovereign governments 29,359 2,474 (102 ) 31,731 Total debt securities 4,684,148 41,235 (67,822 ) 4,657,561 Equity securities 5,625 38 (18 ) 5,645 Total investment portfolio $ 4,689,773 $ 41,273 $ (67,840 ) $ 4,663,206 (1) There were no OTTI losses recorded in other comprehensive (loss) income as of December 31, 2016 and 2015 . During the first quarter of 2016 we substantially liquidated our Australian entities and repatriated most assets, including proceeds from the monetization of our Australian investment portfolio. As of December 31, 2016 we held no investments in foreign sovereign governments. As of December 31, 2015 our foreign investments primarily consisted of Australian government and semi government securities. As discussed in Note 7 - "Debt" we are required to maintain collateral of at least 102% of the outstanding principal balance of the FHLB Advance. As of December 31, 2016 that collateral is included in our total investment portfolio amount shown above with a total fair value of $164.4 million . The amortized cost and fair values of debt securities as of December 31, 2016 , by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most asset-backed and mortgage-backed securities and collateralized loan obligations provide for periodic payments throughout their lives, they are listed below in separate categories. December 31, 2016 (In thousands) Amortized Cost Fair Value Due in one year or less $ 433,464 $ 433,770 Due after one year through five years 1,211,034 1,212,650 Due after five years through ten years 1,157,091 1,139,552 Due after ten years 1,176,177 1,174,484 3,977,766 3,960,456 ABS 59,519 59,565 RMBS 231,733 224,209 CMBS 327,042 319,817 CLOs 121,151 121,175 Total as of December 31, 2016 $ 4,717,211 $ 4,685,222 At December 31, 2016 and 2015 , the investment portfolio had gross unrealized losses of $61 million and $68 million , respectively. For those securities in an unrealized loss position, the length of time the securities were in such a position, as measured by their month-end fair values, is as follows: December 31, 2016 Less Than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 48,642 $ (724 ) $ — $ — $ 48,642 $ (724 ) Obligations of U.S. states and political subdivisions 1,136,676 (24,918 ) 13,681 (507 ) 1,150,357 (25,425 ) Corporate debt securities 915,777 (16,771 ) 35,769 (1,839 ) 951,546 (18,610 ) ABS 3,366 (28 ) 656 — 4,022 (28 ) RMBS 46,493 (857 ) 171,326 (6,769 ) 217,819 (7,626 ) CMBS 205,545 (7,529 ) 38,587 (465 ) 244,132 (7,994 ) CLOs 13,278 (73 ) 34,760 (129 ) 48,038 (202 ) Equity securities 568 (15 ) 137 (9 ) 705 (24 ) Total investment portfolio $ 2,370,345 $ (50,915 ) $ 294,916 $ (9,718 ) $ 2,665,261 $ (60,633 ) December 31, 2015 Less Than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 60,548 $ (1,467 ) $ 1,923 $ (475 ) $ 62,471 $ (1,942 ) Obligations of U.S. states and political subdivisions 417,615 (6,404 ) 37,014 (886 ) 454,629 (7,290 ) Corporate debt securities 1,470,628 (38,519 ) 114,982 (6,251 ) 1,585,610 (44,770 ) ABS 86,604 (173 ) 5,546 (30 ) 92,150 (203 ) RMBS 35,064 (312 ) 209,882 (8,080 ) 244,946 (8,392 ) CMBS 134,488 (2,361 ) 69,927 (1,614 ) 204,415 (3,975 ) CLOs — — 51,750 (1,148 ) 51,750 (1,148 ) Debt securities issued by foreign sovereign governments 4,463 (102 ) — — 4,463 (102 ) Equity securities 355 (8 ) 171 (10 ) 526 (18 ) Total investment portfolio $ 2,209,765 $ (49,346 ) $ 491,195 $ (18,494 ) $ 2,700,960 $ (67,840 ) The unrealized losses in all categories of our investments as of December 31, 2016 and 2015 were primarily caused by changes in interest rates between the time of purchase and the respective year end. There were 607 and 303 securities in an unrealized loss position as of December 31, 2016 and 2015 , respectively. As of December 31, 2016 , the fair value as a percent of amortized cost of the securities in an unrealized loss position was 98% and approximately 14% of the securities in an unrealized loss position were backed by the U.S. Government. There were no OTTI losses in earnings during 2016 and 2015 . We recognized OTTI losses of $0.1 million during 2014 . For the years ended December 31, 2016 , 2015 , and 2014 , there were no credit losses recognized in earnings for which a portion of an OTTI loss was recognized in accumulated other comprehensive loss. The source of net investment income is as follows: (In thousands) 2016 2015 2014 Fixed income $ 112,513 $ 105,882 $ 89,437 Equity securities 182 208 227 Cash equivalents 754 191 179 Other 433 455 711 Investment income 113,882 106,736 90,554 Investment expenses (3,216 ) (2,995 ) (2,907 ) Net investment income $ 110,666 $ 103,741 $ 87,647 The net realized investment gains, including impairment losses, and change in net unrealized gains (losses) of investments are as follows: (In thousands) 2016 2015 2014 Net realized investment gains on investments: Fixed income $ 5,310 $ 28,335 $ 1,000 Equity securities 3,622 26 356 Other — — 1 Total net realized investment gains $ 8,932 $ 28,361 $ 1,357 Change in net unrealized gains (losses): Fixed income $ (5,403 ) $ (33,687 ) $ 91,718 Equity securities (36 ) (32 ) 66 Other 14 1 (4 ) Total (decrease) increase in net unrealized gains/losses $ (5,425 ) $ (33,718 ) $ 91,780 The gross realized gains, gross realized losses and impairment losses are as follows: (In thousands) 2016 2015 2014 Gross realized gains $ 11,909 $ 30,039 $ 4,966 Gross realized losses (2,977 ) (1,678 ) (3,465 ) Other-than-temporary-impairment losses — — (144 ) Net realized gains on securities $ 8,932 $ 28,361 $ 1,357 We had $13.6 million and $18.9 million of investments at fair value on deposit with various states as of December 31, 2016 and 2015 , respectively, due to regulatory requirements of those state insurance departments. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets measured at fair value included those listed, by hierarchy level, in the following tables as of December 31, 2016 and 2015 : December 31, 2016 (In thousands) Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 73,530 $ 30,690 $ 42,840 $ — Obligations of U.S. states and political subdivisions 2,143,016 — 2,142,325 691 Corporate debt securities 1,743,910 — 1,743,910 — ABS 59,565 — 59,565 — RMBS 224,209 — 224,209 — CMBS 319,817 — 319,817 — CLOs 121,175 — 121,175 — Total debt securities 4,685,222 30,690 4,653,841 691 Equity securities (1) 7,128 2,860 — 4,268 Total investments $ 4,692,350 $ 33,550 $ 4,653,841 $ 4,959 Real estate acquired (2) $ 11,748 $ — $ — $ 11,748 December 31, 2015 (In thousands) Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 160,584 $ 46,197 $ 114,387 $ — Obligations of U.S. states and political subdivisions 1,792,527 — 1,791,299 1,228 Corporate debt securities 2,004,763 — 2,004,763 — ABS 116,617 — 116,617 — RMBS 257,648 — 257,648 — CMBS 233,491 — 233,491 — CLOs 60,200 — 60,200 — Debt securities issued by foreign sovereign governments 31,731 31,731 — — Total debt securities 4,657,561 77,928 4,578,405 1,228 Equity securities (1) 5,645 2,790 — 2,855 Total investments $ 4,663,206 $ 80,718 $ 4,578,405 $ 4,083 Real estate acquired (2) $ 12,149 $ — $ — $ 12,149 (1) Equity securities in Level 3 are carried at cost, which approximates fair value. (2) Real estate acquired through claim settlement, which is held for sale, is reported in other assets on the consolidated balance sheets. For assets and liabilities measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the years ended December 31, 2016 , 2015 , and 2014 is shown in the following tables. There were no transfers into or out of Level 3 in those years and there we no losses included in earnings for those years attributable to the change in unrealized losses on assets still held at the end of each applicable year. Level 3 reconciliations: (In thousands) Obligations of U.S. States and Political Subdivisions Equity Securities Total Investments Real Estate Acquired Balance at December 31, 2015 $ 1,228 $ 2,855 $ 4,083 $ 12,149 Total realized/unrealized gains (losses): Included in earnings and reported as net realized investment gains — 3,579 3,579 — Included in earnings and reported as losses incurred, net — — — (1,142 ) Purchases — 4,258 4,258 36,859 Sales (537 ) (6,424 ) (6,961 ) (36,118 ) Balance at December 31, 2016 $ 691 $ 4,268 $ 4,959 $ 11,748 (In thousands) Obligations of U.S. States and Political Subdivisions Equity Securities Total Investments Real Estate Acquired Balance at December 31, 2014 $ 1,846 $ 321 $ 2,167 $ 12,658 Total realized/unrealized gains (losses): Included in earnings and reported as losses incurred, net — — — (2,322 ) Purchases 7 2,534 2,541 34,624 Sales (625 ) — (625 ) (32,811 ) Balance at December 31, 2015 $ 1,228 $ 2,855 $ 4,083 $ 12,149 (In thousands) Obligations of U.S. States and Political Subdivisions Equity Securities Total Investments Real Estate Acquired Balance at December 31, 2013 $ 2,423 $ 321 $ 2,744 $ 13,280 Total realized/unrealized gains (losses): Included in earnings and reported as losses incurred, net — — — (4,129 ) Purchases 30 — 30 42,247 Sales (607 ) — (607 ) (38,740 ) Balance at December 31, 2014 $ 1,846 $ 321 $ 2,167 $ 12,658 Authoritative guidance over disclosures about the fair value of financial instruments requires additional disclosure for financial instruments not measured at fair value. Certain financial instruments, including insurance contracts, are excluded from these fair value disclosure requirements. The carrying values of cash and cash equivalents (Level 1) and accrued investment income (Level 2) approximated their fair values. As of December 31, 2016 , the majority of the $5.0 million balance of Level 3 securities are equity securities that can only be redeemed or sold at their par value and only to the security issuer, with the remainder of the balance held in a state premium tax credit investment. The state premium tax credit investment has an average maturity of less than 3 years and a credit rating of AAA, and its balance reflects its remaining scheduled payments discounted at an average annual rate of 7.1% . As of December 31, 2015 our Level 3 securities were equity securities that can only be redeemed or sold at their par value and only to the security issuer and state premium tax credit investments. As of December 31, 2014 the majority of our Level 3 securities were state premium tax credit investments. Additional fair value disclosures related to our investment portfolio are included in Note 5 – “Investments. ” We incur financial liabilities in the normal course of our business. The following table presents the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at December 31, 2016 and 2015 . The fair values of our 5% Notes, 2% Notes, 5.75% Notes, and 9% Debentures were based on observable market prices and the fair value of the FHLB Advance was estimated using discounted cash flows on current incremental borrowing rates for similar borrowing arrangements, and in all cases they are categorized as Level 2. See Note 7 - "Debt" for a description of the financial liabilities in the table below. December 31, 2016 December 31, 2015 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Financial liabilities: FHLB Advance $ 155,000 $ 151,905 n/a n/a 5% Notes 144,789 147,679 331,546 345,616 2% Notes 204,672 308,605 490,755 701,955 5.75% Notes 417,406 445,987 n/a n/a 9% Debentures 256,872 323,040 389,522 455,067 Total financial liabilities $ 1,178,739 $ 1,377,216 $ 1,211,823 $ 1,502,638 The 5% Notes, 2% Notes, 5.75% Notes, and 9% Debentures are obligations of our holding company, MGIC Investment Corporation, and not of its subsidiaries. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt Accounting standard update As of March 31, 2016 we adopted the accounting update related to the presentation of debt issuance costs in the consolidated financial statements. The change in accounting guidance has been applied retrospectively to prior periods. As a result, a reclassification of approximately $11.2 million of debt issuance costs was made on our December 31, 2015 balance sheet, resulting in a reduction to other assets and a reduction to long-term debt; there was no impact on our consolidated statements of operations or retained earnings. The impact of the reclassification of debt issuance costs on our outstanding debt obligations as of December 31, 2015 is as follows. December 31, 2015 (In millions) As previously reported Adjustment As Adjusted 5% Notes $ 333.5 $ (2.0 ) $ 331.5 2% Notes 500.0 (9.2 ) 490.8 9% Debentures 389.5 — 389.5 Total long-term debt $ 1,223.0 $ (11.2 ) $ 1,211.8 Long-term debt Long-term debt as of December 31, 2016 and 2015 consisted of the following obligations. December 31, (In millions) 2016 2015 FHLB Advance $ 155.0 $ — 5% Notes 145.0 333.5 2% Notes 207.6 500.0 5.75% Notes 425.0 — 9% Debentures 256.9 389.5 Long-term debt, par value 1,189.5 1,223.0 Less: debt issuance costs 10.8 11.2 Long-term debt, carrying value $ 1,178.7 $ 1,211.8 Interest payments, on a consolidated basis, for our debt obligations existing during 2016 and 2015 appear below. Years Ended December 31, (In millions) 2016 2015 5.375% Notes $ — $ 3.3 FHLB Advance 2.4 — 5% Notes 10.6 17.3 2% Notes 9.1 10.0 5.75% Notes — — 9% Debentures 27.4 35.1 Total interest payments $ 49.5 $ 65.7 5.75% Notes In August 2016, we issued $425 million aggregate principal amount of 5.75% Senior Notes due in 2023 (" 5.75% Notes") and received net proceeds, after the deduction of underwriting fees, of $418.1 million . Interest on the 5.75% Notes is payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2017. We have the option to redeem these notes, in whole or in part, at any time or from time to time prior to maturity at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the notes to be redeemed and (ii) the make-whole amount, which is the sum of the present values of the remaining scheduled payments of principal and interest discounted at the treasury rate defined in the notes plus 50 basis points, plus, in each case, accrued interest thereon to, but excluding, the redemption date. In addition to underwriting fees, we incurred approximately $1.2 million of other expenses associated with the issuance of these notes. 5.75% Notes have covenants customary for securities of this nature, including customary events of default and further provide that the trustee or holders of at least 25% in aggregate principal amount of the outstanding 5.75% Notes may declare them immediately due and payable upon the occurrence of certain events of default after the expiration of the applicable grace period. In addition, in the case of an event of default arising from certain events of bankruptcy, insolvency or reorganization relating to the Company or any of its significant subsidiaries, the 5.75% Notes will become due and payable immediately. This description is not intended to be complete in all respects and is qualified in its entirety by the terms of the 5.75% Notes, including their covenants and events of default. 5.75% Notes issuance were primarily used as (i) cash consideration to repurchase a portion of our 2% Notes, and (ii) to repurchase the shares issued as partial consideration in the repurchases of our 2% Notes, as further described below. The remaining proceeds are being held for general corporate purposes. FHLB Advance In February 2016, MGIC borrowed $155.0 million in the form of a fixed rate advance from the Federal Home Loan Bank of Chicago ("FHLB Advance"). Interest on the Advance is payable monthly at an annual rate, fixed for the term of the Advance, of 1.91% . The principal of the Advance matures on February 10, 2023 . MGIC may prepay the Advance at any time. Such prepayment would be below par if interest rates have risen after the Advance was originated, or above par if interest rates have declined. The Advance is secured by eligible collateral whose market value must be maintained at 102% of the principal balance of the Advance. MGIC provided eligible collateral from its investment portfolio. 5.375% Notes We repaid the outstanding 5.375% Notes with cash at the holding company on November 2, 2015. Interest on these notes was payable semi-annually in arrears on May 1 and November 1 each year. The repayment of our Senior Notes had no material impact on our financial position or liquidity. 5% Notes As of December 31, 2016 and 2015 we had outstanding $145.0 million and $333.5 million , respectively, principal amount of 5% Notes due in 2017 (" 5% Notes"). In 2016, we repurchased $188.5 million in aggregate principal of our 5% Notes at a purchase price of $195.5 million , plus accrued interest using funds held at our holding company. In 2015, we purchased $11.5 million in aggregate principal of our 5% Notes at a purchase price of $12.0 million , plus accrued interest, using funds held at our holding company. In each of 2016 and 2015, the excess of the purchase price over carrying value, plus the write-off of unamortized issuance costs on the par value repurchased, is reflected as a loss on debt extinguishment on our consolidated statements of operations. Our 5% Notes repurchase in 2015 reduced our potentially dilutive shares by approximately 0.9 million shares, and our 2016 5% Notes repurchases reduced our potentially dilutive shares by approximately 14.0 million shares. Interest on the 5% Notes is payable semi-annually in arrears on May 1 and November 1 of each year. The 5% Notes will mature on May 1, 2017 . The 5% Notes are convertible, at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.4186 shares per $1,000 principal amount at any time prior to the maturity date. This represents an initial conversion price of approximately $13.44 per share. These 5% Notes will be equal in right of payment to our other senior debt and will be senior in right of payment to our 9% Debentures. Debt issuance costs are being amortized to interest expense over the contractual life of the 5% Notes. We have 10.8 million authorized shares reserved for conversion under our 5% Notes. The provisions of the 5% Notes are complex. Covenants in the 5% Notes include a requirement to notify holders in advance of certain events and that we and the designated subsidiaries preserve our corporate existence, rights and franchises unless we or any such subsidiary determines that such preservation is no longer necessary in the conduct of its business and that the loss thereof is not disadvantageous to the holders of the 5% Notes. A designated subsidiary is any of our consolidated subsidiaries which has shareholders' equity of at least 15% of our consolidated shareholders' equity. Further, the notes are subject to the indenture between us and the trustee that, among other terms, includes provisions that would constitute an event of default under the indenture. Upon such a default, the trustee could accelerate the maturity of the notes independent of any action by holders of the 5% Notes. This description is not intended to be complete in all respect and is qualified in its entirety by the terms of the 5% Notes, including their covenants and events of default. We were in compliance with all covenants at December 31, 2016 . 2% Notes As of December 31, 2016 and 2015 , we had outstanding $207.6 million and $500.0 million , respectively, principal amount of our 2% Notes due in 2020 (" 2% Notes"). In the third quarter of 2016, we entered into privately negotiated agreements to repurchase $292.4 million in aggregate principal of our outstanding 2% Notes at a purchase price of $362.1 million , plus accrued interest. We funded the purchases with $230.7 million in cash, using proceeds from the issuance of our 5.75% Notes, and by issuing to certain sellers approximately 18.3 million shares of our common stock. The excess of the purchase price over carrying value, plus the write-off of unamortized issuance costs on the par value repurchased, is reflected as a loss on debt extinguishment on our consolidated statements of operations for the year ended December 31, 2016 . The shares issued as consideration for the notes repurchases have been repurchased as of December 31, 2016 using cash from our 5.75% Notes issuance. The repurchases of the 2% Notes reduced potentially dilutive shares by approximately 42.1 million shares, without considering the shares issued as partial consideration in the purchases of the 2% Notes or the repurchase of shares to offset such shares issued. Interest on the 2% Notes is payable semi-annually in arrears on April 1 and October 1 of each year. Debt issuance costs are being amortized to interest expense over the contractual life of the 2% Notes. The 2% Notes will mature on April 1, 2020 , unless earlier repurchased by us or converted. Prior to January 1, 2020, the 2% Convertible Senior Notes are convertible only upon satisfaction of one or more conditions. One such condition is that during any calendar quarter commencing after March 31, 2014, the last reported sale price of our common stock for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter be greater than or equal to 130% of the applicable conversion price on each applicable trading day. This condition was met for the quarter ended December 31, 2016. The 2% Notes are convertible at an initial conversion rate, which is subject to adjustment, of 143.8332 shares per $1,000 principal amount. This represents an initial conversion price of approximately $6.95 per share. 130% of such conversion price is approximately $9.04 . On or after January 1, 2020, holders may convert their notes irrespective of satisfaction of the conditions. Prior to April 10, 2017, the notes will not be redeemable. On any business day on or after April 10, 2017 we may redeem for cash all or part of the notes, at our option, at a redemption price equal to 100% of the principal amount of the notes being redeemed, plus any accrued and unpaid interest, if the closing sale price of our common stock exceeds 130% of the then prevailing conversion price of the notes for at least 20 of the 30 trading days preceding notice of the redemption. We have 29.9 million authorized shares reserved for conversion under our 2% Notes. The provisions of the 2% Notes are complex. Covenants in the 2% Notes include a requirement to notify holders in advance of certain events and that we and the designated subsidiaries (defined above) preserve our corporate existence, rights and franchises unless we or any such subsidiary determines that such preservation is no longer necessary in the conduct of its business and that the loss thereof is not disadvantageous to holders of the 2% Notes. Further, the notes are subject to the indenture between us and the trustee that, among other terms, includes provisions that would constitute an event of default under the indenture. Upon such a default, the trustee could accelerate the maturity of the notes independent of any action by holders of the 2% Notes. This description is not intended to be complete in all respect and is qualified in its entirety by the terms of the 2% Notes, including their covenants and events of default. We were in compliance with all covenants at December 31, 2016 . These 2% Notes will be equal in right of payment to our other senior debt and will be senior in right of payment to our 9% Debentures. 9% Debentures As of December 31, 2016 and 2015 we had outstanding $256.9 million and $389.5 million , respectively, principal amount of our 9% Debentures due in 2063 (" 9% Debentures"). In February 2016, MGIC purchased $132.7 million in aggregate principal of our outstanding 9% Debentures at a purchase price of $150.7 million , plus accrued interest. The 9% Debentures include a conversion feature that allows us, at our option, to make a cash payment to converting holders in lieu of issuing shares of common stock upon conversion of the 9% Debentures. The accounting standards applicable to extinguishment of debt with a cash conversion feature require the consideration paid to be allocated between the extinguishment of the liability component and reacquisition of the equity component. The purchase of the 9% Debentures resulted in an $8.3 million loss on debt extinguishment on the consolidated statement of operations for the year ended December 31, 2016 , which represents the difference between the fair value and the carrying value of the liability component on the purchase date. In addition, our shareholders’ equity was separately reduced by $6.3 million related to the reacquisition of the equity component. For GAAP accounting purposes, the 9% Debentures owned by MGIC are considered retired and are eliminated in our consolidated financial statements and the underlying common stock equivalents, approximately 9.8 million shares, are not included in the computation of diluted shares. The 9% Debentures are currently convertible, at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.0741 common shares per $1,000 principal amount of the 9% Debentures at any time prior to the maturity date. This represents an initial conversion price of approximately $13.50 per share. If a holder elects to convert their 9% Debentures, deferred interest owed on the 9% Debentures being converted is also converted into shares of our common stock. The conversion rate for any deferred interest is based on the average price that our shares traded at during a 5 -day period immediately prior to the election to convert. In lieu of issuing shares of common stock upon conversion of the 9% Debentures, we may, at our option, make a cash payment to converting holders for all or some of the shares of our common stock otherwise issuable upon conversion. We have 19.0 million authorized shares reserved for conversion under our 9% debentures. We may redeem the 9% Debentures in whole or in part from time to time, at our option, at a redemption price equal to 100% of the principal amount of the 9% Debentures being redeemed, plus any accrued and unpaid interest, if the closing sale price of our common stock exceeds 130% of the then prevailing conversion price of the 9% Debentures for at least 20 of the 30 trading days preceding notice of the redemption. 130% of such conversion price is $17.55 . Interest on the 9% Debentures is payable semi-annually in arrears on April 1 and October 1 of each year. As long as no event of default with respect to the debentures has occurred and is continuing, we may defer interest, under an optional deferral provision, for one or more consecutive interest periods up to 10 years without giving rise to an event of default. Deferred interest will accrue additional interest at the rate then applicable to the debentures. During an optional deferral period we may not pay or declare dividends on our common stock. 9% Debentures is deferred, we are required, not later than a specified time, to use reasonable commercial efforts to begin selling qualifying securities to persons who are not our affiliates. The specified time is one business day after we pay interest on the 9% Debentures that was not deferred, or if earlier, the fifth anniversary of the scheduled interest payment date on which the deferral started. Qualifying securities are common stock, certain warrants and certain non-cumulative perpetual preferred stock. The requirement to use such efforts to sell such securities is called the Alternative Payment Mechanism. The net proceeds of Alternative Payment Mechanism sales are to be applied to the payment of deferred interest, including the compound portion. We cannot pay deferred interest other than from the net proceeds of Alternative Payment Mechanism sales, except at the final maturity of the debentures or at the ten th anniversary of the start of the interest deferral. The Alternative Payment Mechanism does not require us to sell common stock or warrants before the fifth anniversary of the interest payment date on which that deferral started if the net proceeds (counting any net proceeds of those securities previously sold under the Alternative Payment Mechanism) would exceed the 2% cap. The 2% cap is 2% of the average closing price of our common stock times the number of our outstanding shares of common stock. The average price is determined over a specified period ending before the issuance of the common stock or warrants being sold, and the number of outstanding shares is determined as of the date of our most recent publicly released financial statements. We are not required to issue under the Alternative Payment Mechanism a total of more than 10 million shares of common stock, including shares underlying qualifying warrants. In addition, we may not issue under the Alternative Payment Mechanism qualifying preferred stock if the total net proceeds of all issuances would exceed 25% of the aggregate principal amount of the debentures. The Alternative Payment Mechanism does not apply during any period between scheduled interest payment dates if there is a “market disruption event” that occurs over a specified portion of such period. Market disruption events include any material adverse change in domestic or international economic or financial conditions. The provisions of the 9% Debentures are complex. The description above is not intended to be complete in all respects. Moreover, that description is qualified in its entirety by the terms of the 9% Debentures, including their covenants and events of default. We were in compliance with all covenants at December 31, 2016 . The 9% Debentures rank junior to all of our existing and future senior indebtedness. |
Loss Reserves
Loss Reserves | 12 Months Ended |
Dec. 31, 2016 | |
Insurance Loss Reserves [Abstract] | |
Loss Reserves | Loss Reserves As described in Note 3 – “Summary of Significant Accounting Policies – Loss Reserves,” we establish reserves to recognize the estimated liability for losses and LAE related to defaults on insured mortgage loans. Loss reserves are established by estimating the number of loans in our inventory of delinquent loans that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity. Estimation of losses is inherently judgmental. The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy, including unemployment, the current and future strength of local housing markets; exposure on insured loans; the amount of time between default and claim filing, and curtailments and rescissions. The actual amount of the claim payments may be substantially different than our loss reserve estimates. Our estimates could be adversely affected by several factors, including a deterioration of regional or national economic conditions, including unemployment, leading to a reduction in borrowers’ income and thus their ability to make mortgage payments, and a drop in housing values which may affect borrower willingness to continue to make mortgage payments when the value of the home is below the mortgage balance. Changes to our estimates could result in a material impact to our results of operations and capital position, even in a stable economic environment. The “Losses incurred” section of the table below shows losses incurred on defaults that occurred in the current year and in prior years. The amount of losses incurred relating to defaults that occurred in the current year represents the estimated amount to be ultimately paid on such defaults. The amount of losses incurred relating to defaults that occurred in prior years represents the actual claim rate and severity associated with those defaults resolved in the current year differing from the estimated liability at the prior year-end, as well as a re-estimation of amounts to be ultimately paid on defaults continuing from the end of the prior year. This re-estimation of the claim rate and severity is the result of our review of current trends in the default inventory, such as percentages of defaults that have resulted in a claim, the amount of the claims relative to the average loan exposure, changes in the relative level of defaults by geography and changes in average loan exposure. Losses incurred on default notices received in the current year decreased in 2016 compared to 2015 , and in 2015 compared to 2014 , primarily due to a decrease in the number of new defaults, net of cures, as well as a decrease in the estimated claim rate on recently reported defaults. The “Losses paid” section of the table below shows the breakdown between claims paid on new default notices in the current year, and claims paid on defaults from prior years. Until a few years ago, it took, on average, approximately twelve months for a default that is not cured to develop into a paid claim. Over the past several years, the average time it takes to receive a claim associated with a default has increased. This is, in part, due to new loss mitigation protocols established by servicers and to changes in some state foreclosure laws that may include, for example, a requirement for additional review and/or mediation processes. It is difficult to estimate how long it may take for current and future defaults that do not cure to develop into paid claims. During 2016, our losses paid included $53 million associated with settlements for claims paying practices and NPL settlements. These settlements reduced our delinquent inventory by 1,273 notices. During 2015, our losses paid included $ 10 million associated with settlements for claim paying practices. These settlements reduced our delinquent inventory by 1,121 notices. These settlements had no material impact on our losses incurred in either year. The liability associated with our estimate of premiums to be refunded on expected claim payments is accrued for separately at December 31, 2016 and 2015 and approximated $85 million and $102 million , respectively. This liability was included in "Other liabilities" on our consolidated balance sheets. In each of 2016, 2015, and 2014, we paid $42 million in connection with a 2012 settlement agreement with Freddie Mac regarding the aggregate loss limit under certain pool insurance policies. The final payment under that settlement agreement was made on December 1, 2016. The following table provides a reconciliation of beginning and ending loss reserves for each of the past three years: (In thousands) 2016 2015 2014 Reserve at beginning of year $ 1,893,402 $ 2,396,807 $ 3,061,401 Less reinsurance recoverable 44,487 57,841 64,085 Net reserve at beginning of year 1,848,915 2,338,966 2,997,316 Losses incurred: Losses and LAE incurred in respect of default notices received in: Current year 387,815 453,849 596,436 Prior years (1) (147,658 ) (110,302 ) (100,359 ) Total losses incurred 240,157 343,547 496,077 Losses paid: Losses and LAE paid in respect of default notices received in: Current year 14,823 25,980 32,919 Prior years 689,258 823,058 1,121,508 Reinsurance terminations (2) (3,329 ) (15,440 ) — Total losses paid 700,752 833,598 1,154,427 Net reserve at end of year 1,388,320 1,848,915 2,338,966 Plus reinsurance recoverables 50,493 44,487 57,841 Reserve at end of year $ 1,438,813 $ 1,893,402 $ 2,396,807 (1) A negative number for prior year losses incurred indicates a redundancy of prior year loss reserves. See table below for more information about prior year loss development. (2) In a termination, the reinsurance agreement is cancelled, with no future premium ceded and funds for any incurred but unpaid losses transferred to us. The transferred funds result in an increase in our investment portfolio (including cash and cash equivalents) and a decrease in net losses paid (reduction to losses incurred). In addition, there is an offsetting decrease in the reinsurance recoverable (increase in losses incurred), and thus there is no net impact to losses incurred. (See Note 9 – “Reinsurance” ) For the years ended December 31, 2016 , 2015 and 2014 we experienced favorable prior year loss reserve development. This development was, in part, due to the resolution of approximately 63% , 60% and 58% for the years ended December 31, 2016 , 2015 and 2014 , respectively, of the prior year default inventory. In 2016 , 2015, and 2014 we experienced improved cure rates on prior year defaults. Additionally, during 2015 the claim rate development was favorably impacted by re-estimations of previously recorded reserves relating to disputes on our claims paying practices and adjustments to IBNR. The favorable development for the years ended 2016 and 2015 was offset, in part, by an increase in the estimated severity on prior year defaults remaining in the delinquent inventory. The decrease in the estimated severity in 2014 was based on the resolution of the prior year default inventory. The prior year development of the reserves in 2016 , 2015 and 2014 is reflected in the table below. (In millions) 2016 2015 2014 Decrease in estimated claim rate on primary defaults $ (148 ) $ (141 ) $ (43 ) Increase (decrease) in estimated severity on primary defaults 9 43 (35 ) Change in estimates related to pool reserves, LAE reserves, reinsurance and other (9 ) (12 ) (22 ) Total prior year loss development (1) $ (148 ) $ (110 ) $ (100 ) (1) A negative number for prior year loss development indicates a redundancy of prior year loss reserves. Default Inventory A rollforward of our primary default inventory for the years ended December 31, 2016 , 2015 and 2014 appears in the table below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers. 2016 2015 2014 Default inventory at beginning of year 62,633 79,901 103,328 New Notices 67,434 74,315 88,844 Cures (65,516 ) (73,610 ) (87,278 ) Paids (including those charged to a deductible or captive) (12,367 ) (16,004 ) (23,494 ) Rescissions and denials (629 ) (848 ) (1,306 ) Other items removed from inventory (1,273 ) (1,121 ) (193 ) Default inventory at end of year 50,282 62,633 79,901 The decrease in the primary default inventory experienced during 2016 and 2015 was generally across all markets and all book years prior to 2013. In 2016 and 2015 , the percentage of loans in the inventory that had been in default for 12 or more consecutive months had decreased compared to the respective prior years. Historically as a default ages it becomes more likely to result in a claim. The percentage of loans that have been in default for 12 or more consecutive months and the number of loans in our primary claims received inventory have been affected by our suspended rescissions and the resolution of certain of those rescissions discussed below and in Note 17 - "Litigation and Contingencies" . The number of consecutive months that a borrower has been delinquent is shown in the table below. Consecutive months in default December 31, 2016 2015 2014 3 months or less 12,194 24 % 13,053 21 % 15,319 19 % 4 - 11 months 13,450 27 % 15,763 25 % 19,710 25 % 12 months or more (1) 24,638 49 % 33,817 54 % 44,872 56 % Total primary default inventory 50,282 100 % 62,633 100 % 79,901 100 % Primary claims received inventory included in ending default inventory 1,385 3 % 2,769 4 % 4,746 6 % (1) Approximately 47% , 50% and 53% of the primary default inventory in default for 12 consecutive months or more has been in default for at least 36 consecutive months as of December 31, 2016 , 2015 and 2014 , respectively. The length of time a loan is in the default inventory can differ from the number of payments that the borrower has not made or is considered delinquent. These differences typically result from a borrower making monthly payments that do not result in the loan becoming fully current. The number of payments that a borrower is delinquent is shown in the table below. Number of payments delinquent December 31, 2016 2015 2014 3 payments or less 18,419 36 % 20,360 33 % 23,253 29 % 4 - 11 payments 12,892 26 % 15,092 24 % 19,427 24 % 12 payments or more 18,971 38 % 27,181 43 % 37,221 47 % Total primary default inventory 50,282 100 % 62,633 100 % 79,901 100 % Pool insurance default inventory decreased to 1,883 at December 31, 2016 from 2,739 at December 31, 2015 and 3,797 at December 31, 2014 . Claims paying practices Our loss reserving methodology incorporates our estimates of future rescissions. A variance between ultimate actual rescission rates and our estimates, as a result of the outcome of litigation, settlements or other factors, could materially affect our losses. The liability associated with our estimate of premiums to be refunded on expected future rescissions is accrued for separately. At December 31, 2016 and 2015 the estimate of this liability totaled $5 million and $7 million , respectively. This liability was included in "Other liabilities" on our consolidated balance sheets. For information about discussions and legal proceedings with customers with respect to our claims paying practices, including settlements that we believe are probable, as defined in ASC 450-20, see Note 17 – “Litigation and Contingencies.” |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2016 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance Our consolidated financial statements reflect the effects of assumed and ceded reinsurance transactions. Assumed reinsurance refers to the acceptance of certain insurance risks that other insurance companies have underwritten. Ceded reinsurance involves transferring certain insurance risks (along with the related earned premiums) we have underwritten to other insurance companies who agree to share these risks. The primary purpose of ceded reinsurance is to protect us, at a cost, against a fixed percentage of losses arising from policies covered by the agreement; however we also utilize reinsurance to manage our capital requirements under PMIERs. Reinsurance is currently placed on a quota-share basis, but we also have captive reinsurance agreements that remain in effect. The reinsurance agreements we have entered into are discussed below. The effect of all reinsurance agreements on premiums earned and losses incurred, which is reflected in the consolidated statements of operations, is as follows: Years ended December 31, (In thousands) 2016 2015 2014 Premiums earned: Direct $ 1,058,545 $ 997,892 $ 950,973 Assumed 662 1,178 1,653 Ceded (133,981 ) (102,848 ) (108,255 ) Net premiums earned $ 925,226 $ 896,222 $ 844,371 Losses incurred: Direct $ 273,207 $ 369,680 $ 524,051 Assumed 1,138 1,552 2,012 Ceded (34,188 ) (27,685 ) (29,986 ) Net losses incurred $ 240,157 $ 343,547 $ 496,077 Quota share reinsurance 2015 QSR Transaction We utilize a quota-share reinsurance agreement with a group of unaffiliated reinsurers, each with an insurer financial strength rating of A- or better by Standard and Poor's Rating Services, A.M. Best, or both, to manage our exposure to losses resulting from our mortgage guaranty policies and to provide reinsurance capital credit under the PMIERs. Our 2015 quota share reinsurance agreement("2015 QSR Transaction"), which became effective July 1, 2015 provides coverage on policies that were in the 2013 quota share reinsurance agreement ("2013 QSR Transaction"); additional qualifying in force policies as of the agreement effective date which either had no history of defaults, or where a single default had been cured for twelve or more months at the agreement effective date; and all qualifying new insurance written through December 31, 2016. The agreement cedes losses incurred and premiums on or after the effective date through December 31, 2024, at which time the agreement expires. Early termination of the agreement can be elected by us effective December 31, 2018 for a fee, or under specified scenarios for no fee upon prior written notice, including if we will receive less than 90% of the full credit amount under the PMIERs for the risk ceded in any required calculation period. The 2015 QSR Transaction increased the amount of our IIF covered by reinsurance and will increase the amount of premiums and losses ceded. A higher level of losses ceded will reduce our profit commission. The structure of the 2015 QSR Transaction is a 30% quota share for all policies covered, with a 20% ceding commission as well as a profit commission. Generally, under the 2015 QSR Transaction, we will receive a profit commission provided that the loss ratio on the loans covered under the agreement remains below 60% . 2013 QSR Transaction Effective July 1, 2015 , we settled our 2013 QSR Transaction by commutation. The settlement included unearned premiums, loss reserves, and profit commission. The commutation resulted in an increase in net premiums written and earned of $69.4 million and $11.6 million , respectively, and a decrease in ceding commissions of $11.6 million in the third quarter of 2015. Receipt of our profit commission of $142.5 million , in addition to other premium and loss amounts, was also completed as part of the settlement. 2017 QSR Transaction We have agreed to terms on a quota-share reinsurance agreement for 2017 ("2017 QSR Transaction") with a group of unaffiliated reinsurers, each with an insurer financial strength rating of A- or better by Standard and Poor's, A.M. Best or both, to manage our exposure to losses resulting from our mortgage guaranty policies and to provide reinsurance capital credit under the PMIERs. The GSEs have approved the terms of our proposed 2017 QSR Transaction. The 2017 QSR Transaction is expected to be executed during the first quarter of 2017 with an effective date retroactive to January 1, 2017, and will provide coverage on new business written January 1, 2017 through December 29, 2017 that meets certain eligibility requirements. Under the agreed upon terms, the 2017 QSR Transaction will cede losses incurred and premiums on or after the effective date through December 31, 2028, at which time the agreement expires. Early termination of the agreement can be elected by us effective December 31, 2021 for a fee, or under specified scenarios for no fee upon prior written notice, including if we will receive less than 90% of the full credit amount under the PMIERs for the risk ceded in any required calculation period. The agreed upon structure of the 2017 QSR Transaction is a 30% quota share for all policies covered, with a 20% ceding commission as well as a profit commission. Generally, under the 2017 QSR Transaction, we will receive a profit commission provided that the loss ratio on the loans covered under the agreement remains below 60% . Following is a summary of our quota share reinsurance agreements, excluding captive agreements, for 2016 , 2015 and 2014 . Years ended December 31, (In thousands) 2016 2015 2014 2015 QSR Transaction (Effective July 1, 2015) Ceded premiums written, net of profit commission (1) $ 125,460 $ 52,588 n/a Ceded premiums earned, net of profit commission (1) 125,460 52,588 n/a Ceded losses incurred 30,201 11,424 n/a Ceding commissions (2) 47,629 20,582 n/a Profit commission 112,685 50,322 n/a 2013 QSR Transaction Ceded premiums written, net of profit commission n/a $ (11,355 ) (3) $ 100,031 Ceded premiums earned, net of profit commission n/a 35,999 (3) 88,528 Ceded losses incurred n/a 6,060 15,163 Ceding commissions (2) n/a 10,235 (3) 37,833 Profit commission n/a 62,525 (3) 89,133 (1) As of July 1, 2015, premiums are ceded on an earned and received basis as defined in our 2015 QSR Transaction. (2) Ceding commissions are reported within Other underwriting and operating expenses, net on the consolidated statements of operations. (3) The year ended December 31, 2015 includes the non-recurring impact of commuting our 2013 QSR Transaction. The commutation had no impact on ceded losses incurred. Under the terms of 2015 QSR Transaction, reinsurance premiums, ceding commission and profit commission are settled net on a quarterly basis. The reinsurance premium due after deducting the related ceding commission and profit commission is reported within "Other liabilities" on the consolidated balance sheets. The reinsurance recoverable on loss reserves related to our 2015 QSR Transaction was $31.8 million as of December 31, 2016 and $10.9 million as of December 31, 2015 . The reinsurance recoverable balance is secured by funds on deposit from the reinsurers which are based on the funding requirements of PMIERs that address ceded risk. Captive reinsurance In the past, MGIC also obtained captive reinsurance. In a captive reinsurance arrangement, the reinsurer is affiliated with the lender for whom MGIC provides mortgage insurance. As part of our settlement with the CFPB in 2013 and with the Minnesota Department of Commerce in 2015, MGIC has agreed to not enter into any new captive reinsurance agreement or reinsure any new loans under any existing captive reinsurance agreement for a period of ten years subsequent to the respective settlements. In accordance with the CFPB settlement, all of our active captive arrangements were placed into run-off. In addition, the GSEs will not approve any future reinsurance or risk sharing transaction with a mortgage enterprise or an affiliate of a mortgage enterprise. The reinsurance recoverable on loss reserves related to captive agreements was $19 million at December 31, 2016 which was supported by $91 million of trust assets, while at December 31, 2015 the reinsurance recoverable on loss reserves related to captive agreements was $34 million which was supported by $137 million of trust assets. Each captive reinsurer is required to maintain a separate trust account to support its combined reinsured risk on all annual books. MGIC is the sole beneficiary of the trusts. |
Other Comprehensive (Loss) Inco
Other Comprehensive (Loss) Income | 12 Months Ended |
Dec. 31, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other Comprehensive (Loss) Income | Other Comprehensive (Loss) Income The pretax components of our other comprehensive (loss) income and related income tax benefit (expense) for the years ended December 31, 2016 , 2015 and 2014 are included in the table below: (In thousands) 2016 2015 2014 Net unrealized investment (losses) gains arising during the year $ (5,425 ) $ (33,718 ) $ 91,782 Income tax benefit (expense) 1,776 11,738 (32,017 ) Valuation allowance (1) — 62,383 31,374 Net of taxes (3,649 ) 40,403 91,139 Net changes in benefit plan assets and obligations (14,799 ) (12,818 ) (52,112 ) Income tax benefit 5,179 4,487 18,239 Valuation allowance (1) — (7,383 ) (18,239 ) Net of taxes (9,620 ) (15,714 ) (52,112 ) Net changes in unrealized foreign currency translation adjustment (1,463 ) (5,699 ) (4,067 ) Income tax benefit 512 2,000 1,425 Valuation allowance (1) — (529 ) — Net of taxes (951 ) (4,228 ) (2,642 ) Total other comprehensive (loss) income (21,687 ) (52,235 ) 35,603 Total income tax benefit, net of valuation allowance 7,467 72,696 782 Total other comprehensive (loss) income, net of tax $ (14,220 ) $ 20,461 $ 36,385 (1) See Note 12 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets. The pretax and related income tax (expense) benefit components of the amounts reclassified from our accumulated other comprehensive loss to our consolidated statements of operations for the years ended December 31, 2016 , 2015 and 2014 are included in the table below: (In thousands) 2016 2015 2014 Reclassification adjustment for net realized gains (losses) included in net income (1) $ 6,207 $ 11,693 $ (6,816 ) Income tax (expense) benefit (2,050 ) (4,076 ) 2,402 Valuation allowance (2) — 3,635 (2,502 ) Net of taxes 4,157 11,252 (6,916 ) Reclassification adjustment related to benefit plan assets and obligations (3) 1,480 2,184 6,930 Income tax expense (518 ) (764 ) (2,425 ) Valuation allowance (2) — 574 2,425 Net of taxes 962 1,994 6,930 Reclassification adjustment related to foreign currency (4) 1,467 — — Income tax expense (513 ) — — Net of taxes 954 — — Total reclassifications 9,154 13,877 114 Total income tax expense, net of valuation allowance (3,081 ) (631 ) (100 ) Total reclassifications, net of tax $ 6,073 $ 13,246 $ 14 (1) Increases (decreases) Net realized investment gains on the consolidated statements of operations. (2) See Note 12 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets. (3) Decreases (increases) Other underwriting and operating expenses, net on the consolidated statements of operations. (4) Increases (decreases) Other revenue on the consolidated statements of operations. A rollforward of accumulated other comprehensive loss ("AOCL") for the years ended December 31, 2016 , 2015 , and 2014 , including amounts reclassified from accumulated other comprehensive loss, are included in the table below. (In thousands) Net unrealized gains and losses on available-for-sale securities Net benefit plan assets and obligations recognized in shareholders' equity Net unrealized foreign currency translation Total AOCL Balance, December 31, 2013, net of tax $ (148,690 ) $ 23,174 $ 7,790 $ (117,726 ) Other comprehensive income (loss) before reclassifications 84,223 (45,182 ) (2,642 ) 36,399 Less: Amounts reclassified from AOCL (6,916 ) 6,930 — 14 Balance, December 31, 2014, net of tax (57,551 ) (28,938 ) 5,148 (81,341 ) Other comprehensive income (loss) before reclassifications 51,655 (13,720 ) (4,228 ) 33,707 Less: Amounts reclassified from AOCL 11,252 1,994 — 13,246 Balance, December 31, 2015, net of tax (17,148 ) (44,652 ) 920 (60,880 ) Other comprehensive income (loss) before reclassifications 508 (8,658 ) 3 (8,147 ) Less: Amounts reclassified from AOCL 4,157 962 954 6,073 Balance, December 31, 2016, net of tax $ (20,797 ) $ (54,272 ) $ (31 ) (75,100 ) |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Benefit Plans We have a non-contributory defined benefit pension plan covering substantially all domestic employees, as well as a supplemental executive retirement plan. We also offer both medical and dental benefits for retired domestic employees and their eligible spouses under a postretirement benefit plan. The following tables provide the components of aggregate annual net periodic benefit cost for each of the years ended December 31, 2016 , 2015 , and 2014 and changes in the benefit obligation and the funded status of the pension, supplemental executive retirement and other postretirement benefit plans as recognized in the consolidated balance sheets as of December 31, 2016 and 2015 . Components of Net Periodic Benefit Cost Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2014 12/31/2016 12/31/2015 12/31/2014 1. Company Service Cost $ 9,130 $ 10,256 $ 8,565 $ 751 $ 833 $ 659 2. Interest Cost 15,906 15,847 15,987 704 697 653 3. Expected Return on Assets (19,508 ) (21,109 ) (21,030 ) (4,886 ) (4,991 ) (4,648 ) 4. Other Adjustments — — — — — — Subtotal 5,528 4,994 3,522 (3,431 ) (3,461 ) (3,336 ) 5. Amortization of : a. Net Transition Obligation/(Asset) — — — — — — b. Net Prior Service Cost/(Credit) (687 ) (845 ) (930 ) (6,649 ) (6,649 ) (6,649 ) c. Net Losses/(Gains) 5,856 5,485 1,083 — (175 ) (435 ) Total Amortization 5,169 4,640 153 (6,649 ) (6,824 ) (7,084 ) 6. Net Periodic Benefit Cost 10,697 9,634 3,675 (10,080 ) (10,285 ) (10,420 ) 7. Cost of settlements or curtailments 1,277 3,172 302 — — — 8. Total Expense for Year $ 11,974 $ 12,806 $ 3,977 $ (10,080 ) $ (10,285 ) $ (10,420 ) Development of Funded Status Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 Actuarial Value of Benefit Obligations 1. Measurement Date 12/31/2016 12/31/2015 12/31/2016 12/31/2015 2. Accumulated Benefit Obligation $ 360,423 $ 338,450 $ 17,378 $ 16,423 Funded Status/Asset (Liability) on the Consolidated Balance Sheet 1. Projected Benefit Obligation $ (369,808 ) $ (349,483 ) $ (17,378 ) $ (16,423 ) 2. Plan Assets at Fair Value 360,900 350,107 70,408 65,568 3. Funded Status - Overfunded/Asset N/A $ 624 $ 53,030 $ 49,145 4. Funded Status - Underfunded/Liability (8,908 ) N/A N/A N/A Accumulated Other Comprehensive Income (Loss) Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. Net Actuarial (Gain)/Loss $ 103,861 $ 95,636 $ (6,088 ) $ (5,311 ) 2. Net Prior Service Cost/(Credit) (2,286 ) (2,989 ) (11,991 ) (18,640 ) 3. Net Transition Obligation/(Asset) — — — — 4. Total at Year End $ 101,575 $ 92,647 $ (18,079 ) $ (23,951 ) The amortization of gains and losses resulting from actual experience different from assumed experience or changes in assumptions including discount rates is included as a component of Net Periodic Benefit Cost/(Income) for the year. The gain or loss in excess of a 10% corridor is amortized by the average remaining service period of participating employees expected to receive benefits under the plan. The changes in the projected benefit obligation are as follows: Change in Projected Benefit/Accumulated Benefit Obligation Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. Benefit Obligation at Beginning of Year $ 349,483 $ 379,324 $ 16,423 $ 18,225 2. Company Service Cost 9,130 10,256 751 833 3. Interest Cost 15,906 15,847 704 697 4. Plan Participants' Contributions — — 408 361 5. Net Actuarial (Gain)/Loss due to Assumption Changes 14,450 (24,118 ) 497 (2,083 ) 6. Net Actuarial (Gain)/Loss due to Plan Experience 5,428 7,155 357 (397 ) 7. Benefit Payments from Fund (1) (21,831 ) (32,646 ) (1,678 ) (1,147 ) 8. Benefit Payments Directly by Company (2,669 ) (7,661 ) — — 9. Plan Amendments 16 19 — — 10. Other Adjustment (105 ) 1,307 (84 ) (66 ) 11. Benefit Obligation at End of Year $ 369,808 $ 349,483 $ 17,378 $ 16,423 (1) Includes lump sum payments of $11.2 million and $22.4 million in 2016 and 2015, respectively, from our pension plan to eligible participants, which were former employees with vested benefits. The increase in our pension and supplemental executive retirement plans obligation in 2016 compare to 2015 was primarily due to a decrease in the discount rate used to calculate the obligation and a lower amount of benefits paid from the fund. The increase in our other postretirement plan obligation was primarily due a decrease in the discount rate used to calculate the obligation. The changes in the fair value of the net assets available for plan benefits are as follows: Change in Plan Assets Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. Fair Value of Plan Assets at Beginning of Year $ 350,107 $ 378,701 $ 65,568 $ 66,940 2. Company Contributions 11,369 17,311 — — 3. Plan Participants' Contributions — — 408 361 4. Benefit Payments from Fund (21,831 ) (32,646 ) (1,678 ) (1,147 ) 5. Benefit Payments paid directly by Company (2,669 ) (7,661 ) — — 6. Actual Return on Assets 23,924 (5,094 ) 6,518 (225 ) 7. Other Adjustment — (504 ) (408 ) (361 ) 8. Fair Value of Plan Assets at End of Year $ 360,900 $ 350,107 $ 70,408 $ 65,568 Change in Accumulated Other Comprehensive Income (Loss) ("AOCI") Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. AOCI in Prior Year $ 92,647 $ 89,390 $ (23,951 ) $ (33,511 ) 2. Increase/(Decrease) in AOCI a. Recognized during year - Prior Service (Cost)/Credit 687 845 6,649 6,649 b. Recognized during year - Net Actuarial (Losses)/Gains (5,856 ) (5,485 ) — 175 c. Occurring during year - Prior Service Cost 16 19 — — d. Occurring during year - Net Actuarial Losses/(Gains) 15,358 11,050 (777 ) 2,736 e. Occurring during year - Net Settlement Losses/(Gains) (1,277 ) (3,172 ) — — f. Other adjustments — — — — 3. AOCI in Current Year $ 101,575 $ 92,647 $ (18,079 ) $ (23,951 ) Amortizations Expected to be Recognized During Next Fiscal Year Ending Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2017 12/31/2017 1. Amortization of Net Transition Obligation/(Asset) $ — $ — 2. Amortization of Prior Service Cost/(Credit) (428 ) (6,649 ) 3. Amortization of Net Losses/(Gains) 6,141 — The projected benefit obligations, net periodic benefit costs and accumulated postretirement benefit obligation for the plans were determined using the following weighted average assumptions. Actuarial Assumptions Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits 12/31/2016 12/31/2015 12/31/2016 12/31/2015 Weighted-Average Assumptions Used to Determine Benefit Obligations at year end 1. Discount Rate 4.30 % 4.65 % 3.95 % 4.30 % 2. Rate of Compensation Increase 3.00 % 3.00 % N/A N/A Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Year 1. Discount Rate 4.65 % 4.25 % 4.30 % 4.00 % 2. Expected Long-term Return on Plan Assets 5.75 % 5.75 % 7.50 % 7.50 % 3. Rate of Compensation Increase 3.00 % 3.00 % N/A N/A Assumed Health Care Cost Trend Rates at year end 1. Health Care Cost Trend Rate Assumed for Next Year N/A N/A 6.50 % 7.00 % 2. Rate to Which the Cost Trend Rate is Assumed to Decline (Ultimate Trend Rate) N/A N/A 5.00 % 5.00 % 3. Year That the Rate Reaches the Ultimate Trend Rate N/A N/A 2020 2020 In selecting a discount rate, we performed a hypothetical cash flow bond matching exercise, matching our expected pension plan and postretirement medical plan cash flows, respectively, against a selected portfolio of high quality corporate bonds. The modeling was performed using a bond portfolio of noncallable bonds with at least $50 million outstanding. The average yield of these hypothetical bond portfolios was used as the benchmark for determining the discount rate. In selecting the expected long-term rate of return on assets, we considered the average rate of earnings expected on the classes of funds invested or to be invested to provide for the benefits of these plans. This included considering the trusts' targeted asset allocation for the year and the expected returns likely to be earned over the next 20 years . The year-end asset allocations of the plans are as follows: Plan Assets Pension Plan Other Postretirement Benefits 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. Equity Securities 23 % 20 % 100 % 100 % 2. Debt Securities 77 % 80 % — % — % 3. Total 100 % 100 % 100 % 100 % In accordance with fair value guidance, we applied the following fair value hierarchy in order to measure fair value of our benefit plan assets: Level 1 – Quoted prices for identical instruments in active markets that we can access. Financial assets utilizing Level 1 inputs include equity securities, mutual funds, money market funds, certain U.S. Treasury securities and exchange traded funds ("ETFs"). Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and inputs, other than quoted prices, that are observable in the marketplace for the instrument. The observable inputs are used in valuation models to calculate the fair value of the instruments. Financial assets utilizing Level 2 inputs include certain municipal, corporate and foreign bonds, obligations of U.S. government corporations and agencies, and pooled equity accounts. To determine the fair value of securities in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. In addition, on a quarterly basis, we perform quality controls over values received from the pricing source (the “Trustee”) which include comparing values to other independent pricing sources. In addition, we review annually the Trustee’s auditor’s report on internal controls in order to determine that their controls around valuing securities are operating effectively. We have not made any adjustments to the prices obtained from the independent sources. The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2016 and 2015 . There were no securities that utilized Level 3 inputs. Pension Plan Assets at Fair Value as of December 31, 2016 (In thousands) Level 1 Level 2 Total Domestic Mutual Funds $ 11,805 $ — $ 11,805 Corporate Bonds — 178,412 178,412 U.S. Government Securities 6,761 354 7,115 Municipal Bonds — 63,492 63,492 Foreign Bonds — 27,917 27,917 ETFs 5,694 — 5,694 Pooled Equity Accounts — 66,465 66,465 Total Assets at fair value $ 24,260 $ 336,640 $ 360,900 Pension Plan Assets at Fair Value as of December 31, 2015 (In thousands) Level 1 Level 2 Total Domestic Mutual Funds $ 1,442 $ — $ 1,442 Corporate Bonds — 188,332 188,332 U.S. Government Securities 3,133 497 3,630 Municipal Bonds — 61,206 61,206 Foreign Bonds — 25,251 25,251 ETFs 5,676 — 5,676 Pooled Equity Accounts — 64,570 64,570 Total Assets at fair value $ 10,251 $ 339,856 $ 350,107 The pension plan has implemented a strategy to reduce risk through the use of a targeted funded ratio. The liability driven component is key to the asset allocation. The liability driven component seeks to align the duration of the fixed income asset allocation with the expected duration of the plan liabilities or benefit payments. Overall asset allocation is dynamic and specifies target allocation weights and ranges based on the funded status. An improvement in funded status results in the de-risking of the portfolio, allocating more funds to fixed income and less to equity. A decline in funded status would result in a higher allocation to equity. The maximum equity allocation is 40% . The equity investments utilize combinations of mutual funds, ETFs, and pooled equity account structures focused on the following strategies: Strategy Objective Investment types Return seeking growth Funded ratio improvement over the long term ● Global quality growth ● Global low volatility Return seeking bridge Downside protection in the event of a declining equity market ● Enduring asset ● Durable company The fixed income objective is to preserve capital and to provide monthly cash flows for the payment of plan liabilities. Fixed income investments can include government, government agency, corporate, mortgage-backed, asset-backed, and municipal securities, and other classes of bonds. The duration of the fixed income portfolio has an objective of being within one year of the duration of the accumulated benefit obligation. The fixed income investments have an objective of a weighted average credit of A3/A-/A- by Moody’s, S&P, and Fitch, respectively. The following table sets forth the other postretirement benefits plan assets at fair value as of December 31, 2016 and 2015 . All are Level 1 assets. Other Postretirement Benefits Plan Assets at Fair Value as of December 31, 2016 (In thousands) Level 1 Total Domestic Mutual Funds $ 54,426 $ 54,426 International Mutual Funds 15,982 15,982 Total Assets at fair value $ 70,408 $ 70,408 Other Postretirement Benefits Plan Assets at Fair Value as of December 31, 2015 (In thousands) Level 1 Total Domestic Mutual Funds $ 49,887 $ 49,887 International Mutual Funds 15,681 15,681 Total Assets at fair value $ 65,568 $ 65,568 Our postretirement plan portfolio is designed to achieve the following objectives over each market cycle and for at least 5 years: • Total return should exceed growth in the Consumer Price Index by 5.75% annually • Achieve competitive investment results The primary focus in developing asset allocation ranges for the portfolio is the assessment of the portfolio's investment objectives and the level of risk that is acceptable to obtain those objectives. To achieve these goals the minimum and maximum allocation ranges for fixed income securities and equity securities are: Minimum Maximum Equities (long only) 70 % 100 % Real estate 0 % 15 % Commodities 0 % 10 % Fixed income/Cash 0 % 10 % Given the long term nature of this portfolio and the lack of any immediate need for significant cash flow, it is anticipated that the equity investments will consist of growth stocks and will typically be at the higher end of the allocation ranges above. Investment in international mutual funds is limited to a maximum of 30% of the equity range. The allocation as of December 31, 2016 included 3% that was primarily invested in equity securities of emerging market countries and another 20% was invested in securities of companies primarily based in Europe and the Pacific Basin. The following tables show the current and estimated future contributions and benefit payments. Company Contributions Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2016 Company Contributions for the Year Ending: 1. Current $ 11,369 $ — 2. Current + 1 9,500 — Benefit Payments (Total) Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2016 Actual Benefit Payments for the Year Ending: 1. Current $ 24,500 $ 1,355 Expected Benefit Payments for the Year Ending: 2. Current + 1 21,831 847 3. Current + 2 23,439 978 4. Current + 3 26,927 1,068 5. Current + 4 27,199 1,257 6. Current + 5 27,151 1,410 7. Current + 6 - 10 146,471 8,574 Health care sensitivities For measurement purposes, a 7.0% health care trend rate was used for benefits for retirees before they reach age 65 years for 2016. In 2017, the rate is assumed to be 6.5% , decreasing to 5.0% by 2020 and remaining at this level beyond. Assumed health care cost trend rates have a significant effect on the amounts reported for the other postretirement benefits plan. A 1 percentage point change in the health care trend rate assumption would have the following effects on other postretirement benefits: (In thousands) 1-Percentage Point Increase 1-Percentage Point Decrease Effect on total service and interest cost components $ 237 $ (205 ) Effect on postretirement benefit obligation 2,382 (2,102 ) Profit sharing and 401(k) We have a profit sharing and 401(k) savings plan for employees. At the discretion of the Board of Directors, we may make a contribution of up to 5% of each participant's eligible compensation. We provide a matching 401(k) savings contribution for employees on their before-tax contributions at a rate of 80% of the first $1,000 contributed and 40% of the next $2,000 contributed. For employees hired after January 1, 2014, the match is 100% up to 4% contributed. We recognized expenses related to these plans of $5.9 million , $5.1 million and $5.0 million in 2016 , 2015 and 2014 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Net deferred tax assets and liabilities as of December 31, 2016 and 2015 are as follows: (In thousands) 2016 2015 Total deferred tax assets $ 636,449 $ 791,286 Total deferred tax liabilities (28,794 ) (29,206 ) Net deferred tax asset $ 607,655 $ 762,080 The components of the net deferred tax asset as of December 31, 2016 and 2015 are as follows: (In thousands) 2016 2015 Unearned premium reserves $ 40,153 $ 33,262 Benefit plans (12,350 ) (14,283 ) Federal net operating loss 520,812 680,975 Loss reserves 10,883 15,536 Unrealized depreciation in investments 11,211 8,904 Mortgage investments 17,751 17,386 Deferred compensation 12,517 12,927 Other, net 6,678 7,373 Net deferred tax asset 607,655 762,080 We review the need to maintain a deferred tax asset valuation allowance on a quarterly basis. We analyze several factors, among which are the severity and frequency of operating losses, our capacity for the carryback or carryforward of any losses, the existence and current level of taxable operating income, operating results on a three year cumulative basis, the expected occurrence of future income or loss, the expiration dates of the carryforwards, the cyclical nature of our operating results, and available tax planning strategies. Based on our analysis, we reduced our benefit from income tax through the recognition of a valuation allowance from the first quarter of 2009 through the second quarter of 2015. In the third quarter of 2015, we concluded that it was more likely than not that our deferred tax assets would be fully realizable and that the valuation allowance was no longer necessary and we reversed the valuation allowance. For the year ended December 31, 2015, we reversed $161.1 million of our valuation allowance based on income from 2015. The portion of the valuation allowance reversed related to deferred tax assets that are expected to be realized in future years, totaling $747.5 million , is treated as a discrete period item and is recognized as a component of the tax provision in continuing operations in the period of release. Furthermore, in determining the discrete period impact from the reversal, we removed the prior period disproportionate tax effects that had arisen in other comprehensive income because of the valuation allowance. This reduced the amount of tax benefit included in net income and resulted in an allocation of tax benefit of $60.8 million to components of other comprehensive income. The following table provides a rollforward of our deferred tax asset valuation allowance for the year ended December 31, 2015. (In millions) For the year ended December 31, 2015 Balance at December 31, 2014 $ 902.3 Reduction in tax provision in current year (161.1 ) Amounts recorded in other comprehensive income in the current year 6.3 Change in valuation allowance for deferred tax assets in the current year (154.8 ) Reduction in tax provision for amounts to be realized in future years (686.7 ) Amounts recorded in other comprehensive income to be realized in future years (60.8 ) Change in valuation allowance for deferred tax assets realizable in future years (747.5 ) Balance at December 31, 2015 $ — The effect of the change in valuation allowance on the provision for (benefit from) income taxes was as follows: (In thousands) 2016 2015 2014 Provision for income taxes before valuation allowance $ 172,197 $ 163,497 $ 91,607 Change in valuation allowance — (161,158 ) (88,833 ) Reversal of the valuation allowance — (686,652 ) — Provision for (benefit from) income taxes $ 172,197 $ (684,313 ) $ 2,774 The total valuation allowance as of December 31, 2014 was $902.3 million . The remaining valuation allowance was reversed in the third quarter of 2015. The change in the valuation allowance that was included in other comprehensive income was a decrease of $54.5 million , and $13.1 million for the years ended December 31, 2015 and 2014 , respectively. Giving full effect to the carryback of net operating losses for federal income tax purposes, we have approximately $1,489 million of net operating loss ("NOL") carryforwards on a regular tax basis and $589 million of net operating loss carryforwards for computing the alternative minimum tax as of December 31, 2016 . Any unutilized carryforwards are scheduled to expire at the end of tax years 2030 through 2033. The following summarizes the components of the provision for (benefit from) income taxes: (In thousands) 2016 2015 2014 Current Federal $ 9,470 $ 8,067 $ 2,391 Deferred Federal 160,657 (686,652 ) 1 Other 2,070 (5,728 ) 382 Provision for (benefit from) income taxes $ 172,197 $ (684,313 ) $ 2,774 We paid $4.5 million , $5.4 million , and $1.3 million in federal income tax in 2016 , 2015 and 2014 , respectively. The reconciliation of the federal statutory income tax rate to the effective tax provision (benefit) rate is as follows: 2016 2015 2014 Federal statutory income tax rate 35.0 % 35.0 % 35.0 % Valuation allowance — % (173.8 )% (34.9 )% Tax exempt municipal bond interest (1.9 )% (0.8 )% (0.4 )% Other, net 0.4 % (0.7 )% 1.4 % Effective tax provision (benefit) rate 33.5 % (140.3 )% 1.1 % As previously disclosed, the Internal Revenue Service ("IRS") completed examinations of our federal income tax returns for the years 2000 through 2007 and issued proposed assessments for taxes, interest and penalties related to our treatment of the flow-through income and loss from an investment in a portfolio of residual interests of Real Estate Mortgage Investment Conduits ("REMICs"). The IRS indicated that it did not believe that, for various reasons, we had established sufficient tax basis in the REMIC residual interests to deduct the losses from taxable income. We appealed these assessments within the IRS and in August 2010, we reached a tentative settlement agreement with the IRS which was not finalized. In 2014, we received Notices of Deficiency (commonly referred to as “ 90 day letters ”) covering the 2000-2007 tax years. The Notices of Deficiency reflect taxes and penalties related to the REMIC matters of $197.5 million and at December 31, 2016 , there would also be interest related to these matters of approximately $200.6 million . In 2007, we made a payment of $65.2 million to the United States Department of the Treasury which will reduce any amounts we would ultimately owe. The Notices of Deficiency also reflect additional amounts due of $261.4 million , which are primarily associated with the disallowance of the carryback of the 2009 net operating loss to the 2004-2007 tax years. We believe the IRS included the carryback adjustments as a precaution to keep open the statute of limitations on collection of the tax that was refunded when this loss was carried back, and not because the IRS actually intends to disallow the carryback permanently. Depending on the outcome of this matter, additional state income taxes and state interest may become due when a final resolution is reached. As of December 31, 2016 , those state taxes and interest would approximate $50.7 million . In addition, there could also be state tax penalties. Our total amount of unrecognized tax benefits as of December 31, 2016 is $108.2 million , which represents the tax benefits generated by the REMIC portfolio included in our tax returns that we have not taken benefit for in our financial statements, including any related interest. We filed a petition with the U.S. Tax Court contesting most of the IRS’ proposed adjustments reflected in the Notices of Deficiency and the IRS filed an answer to our petition which continued to assert their claim. The case has twice been scheduled for trial and in each instance, the parties jointly filed, and the U.S. Tax Court approved (most recently in February 2016), motions for continuance to postpone the trial date. Also in February 2016, the U.S. Tax Court approved a joint motion to consolidate for trial, briefing, and opinion, our case with similar cases of Radian Group, Inc., as successor to Enhance Financial Services Group, Inc., et al. In January 2017, the parties informed the Tax Court that they had reached a basis for settlement of the major issues in the case. Any agreed settlement terms will ultimately be subject to review by the Joint Committee on Taxation ("JCT") before a settlement can be completed and there is no assurance that a settlement will be completed. Based on information that we currently have regarding the status of our ongoing dispute, we expect to record a provision for additional taxes and interest of $15 to $25 million in the first quarter of 2017. Should a settlement not be completed, ongoing litigation to resolve our dispute with the IRS could be lengthy and costly in terms of legal fees and related expenses. We would need to make further adjustments, which could be material, to our tax provision and liabilities if our view of the probability of success in this matter changes, and the ultimate resolution of this matter could have a material negative impact on our effective tax rate, results of operations, cash flows, available assets and statutory capital. In this regard, see Note 14 - "Statutory Information." In October 2014, we received a Revenue Agent’s Report from the IRS related to the examination of our federal income tax returns for the years 2011 and 2012. The result of this examination had no material effect on the financial statements. Under current guidance, when evaluating a tax position for recognition and measurement, an entity shall presume that the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. The interpretation adopts a benefit recognition model with a two-step approach, a more-likely-than-not threshold for recognition and derecognition, and a measurement attribute that is the greatest amount of benefit that is cumulatively greater than 50% likely of being realized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (In thousands) 2016 2015 2014 Balance at beginning of year $ 107,120 $ 106,230 $ 105,366 Additions based on tax positions related to the current year — — — Additions for tax positions of prior years 1,125 890 864 Reductions for tax positions of prior years — — — Settlements — — — Balance at end of year $ 108,245 $ 107,120 $ 106,230 The total amount of the unrecognized tax benefits, related to our aforementioned REMIC issue, which would affect our effective tax rate, is $94.6 million . We recognize interest accrued and penalties related to unrecognized tax benefits in income taxes. During 2016, we recognized $1.1 million in interest. As of December 31, 2016 and 2015 , we had $28.9 million and $27.8 million of accrued interest related to uncertain tax positions, respectively. The statute of limitations related to the consolidated federal income tax return is closed for all years prior to 2000. It is reasonably possible that our 2000-2007 federal tax case will be resolved, other than through litigation. If it is resolved under the basis of settlement as disclosed above, our total unrecognized tax benefits would be reduced by $108.2 million during 2017. After taking into account prior payments and the effect of available net operating loss carrybacks, any net cash outflows would approximate $52 million . |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders' Equity As described in Note 7 - "Debt" , we entered into privately negotiated agreements to repurchase, for cash, together with, in certain cases, shares of our common stock, $292.4 million aggregate principal amount of our outstanding 2% Notes. We issued approximately 18.3 million shares of our common stock as partial consideration under these agreements. As of December 31, 2016 we have repurchased all of the shares issued as partial consideration for our 2% Notes repurchases. The weighted average price paid for the share repurchases was $8.03 , which includes commissions, and the aggregate purchase amount was $147.1 million . As described in Note 7 - "Debt" the purchase of a portion of our 9% Debentures by MGIC, and corresponding elimination of the purchased 9% Debentures in consolidation, resulted in a reduction to our consolidated shareholders' equity of approximately $6.3 million as of December 31, 2016 . This reduction represents the allocated portion of the consideration paid to reacquire the equity component of the 9% Debentures, net of tax. The reduction was recognized in paid-in capital and was less than the amount ascribed to paid-in capital at original issuance of the 9% Debentures. Our Amended and Restated Rights Agreement dated July 23, 2015 seeks to diminish the risk that our ability to use our NOLs to reduce potential future federal income tax obligations may become substantially limited and to deter certain abusive takeover practices. The benefit of the NOLs would be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, if we were to experience an “ownership change” as defined by Section 382 of the Internal Revenue Code. Under the Agreement each outstanding share of our Common Stock is accompanied by one Right. The Distribution Date occurs on the earlier of ten days after a public announcement that a person has become an Acquiring Person, or ten business days after a person announces or begins a tender offer in which consummation of such offer would result in a person becoming an Acquiring Person. An Acquiring Person is any person that becomes, by itself or together with its affiliates and associates, a beneficial owner of 5% or more of the shares of our Common Stock then outstanding, but excludes, among others, certain exempt and grandfathered persons as defined in the Agreement. The Rights are not exercisable until the Distribution Date. Each Right will initially entitle shareholders to buy one-tenth of one share of our Common Stock at a Purchase Price of $45 per full share (equivalent to $4.50 for each one-tenth share), subject to adjustment. Each exercisable Right (subject to certain limitations) will entitle its holder to purchase, at the Rights’ then-current Purchase Price, a number of our shares of Common Stock (or if after the Shares Acquisition Date, we are acquired in a business combination, common shares of the acquiror) having a market value at the time equal to twice the Purchase Price. The Rights will expire on August 1, 2018 , or earlier as described in the Agreement. The Rights are redeemable at a price of $0.001 per Right at any time prior to the time a person becomes an Acquiring Person. Other than certain amendments, the Board of Directors may amend the Rights in any respect without the consent of the holders of the Rights. |
Statutory Information
Statutory Information | 12 Months Ended |
Dec. 31, 2016 | |
Statutory Capital [Abstract] | |
Statutory Information | Statutory Information Statutory Accounting Principles The statutory financial statements of our insurance companies are presented on the basis of accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin (the "OCI"), which has adopted the National Association of Insurance Commissioners ("NAIC") statutory accounting practices as the basis of its statutory accounting practices ("SSAP"). In converting from statutory to GAAP, typical adjustments include deferral of policy acquisition costs, the inclusion of net unrealized holding gains or losses in shareholders' equity relating to fixed maturities and the inclusion of statutory non-admitted assets. In addition to the typical adjustments from statutory to GAAP, mortgage insurance companies are required to maintain contingency loss reserves equal to 50% of premiums earned under SSAP and practices prescribed by the OCI, Such amounts cannot be withdrawn for a period of ten years except as permitted by insurance regulations. With regulatory approval a mortgage guaranty insurance company may make early withdrawals from the contingency reserve when incurred losses exceed 35% of net premiums earned in a calendar year. For the year ended 2016 , MGIC's losses incurred were 26% of net premiums earned. Changes in contingency loss reserves impact the statutory statement of operations. Contingency loss reserves are not reflected as liabilities under GAAP and changes in contingency loss reserves do not impact the GAAP statements of operations. A premium deficiency reserve that may be recorded on a GAAP basis when the present value of expected future losses and expenses exceeds the present value of expected future premiums and already established loss reserves, may not be recorded on a statutory basis if the present value of expected future premiums and already established loss reserves and statutory contingency reserves, exceeds the present value of expected future losses and expenses. On a GAAP basis, when calculating a premium deficiency reserve policies are grouped based on how they are acquired, serviced and measured. On a statutory basis, a premium deficiency reserve is calculated on all policies in force. The statutory net income (loss), policyholders' surplus and contingency reserve liability of the insurance subsidiaries of our holding company are show in the following table. The statutory net loss in 2015 was driven by the dissolution of an MGIC non-insurance subsidiary. The surplus amounts included in the following table are the combined policyholders' surplus of our insurance operations as utilized in our risk-to-capital calculations. As of and for the Years Ended December 31, (In thousands) 2016 2015 2014 Statutory net income (loss) $ 106,326 $ (72,767 ) (1) $ 13,203 Statutory policyholders' surplus 1,506,475 1,608,214 (1) 1,585,164 Contingency reserve 1,360,088 826,706 318,247 (1) The dissolution of an MGIC non-insurance subsidiary in 2015 had no impact on statutory surplus as the equity value of the investment was fully reflected in surplus as an unrealized loss prior to 2015. The surplus contributions made to MGIC and dividends paid by MGIC and distributions from other insurance subsidiaries to us, are shown in the table below. Years Ended December 31, (In thousands) 2016 2015 2014 Additions to the surplus of MGIC from parent company funds $ 36,025 — — Dividends paid by MGIC to the parent company $ 64,000 — — Distributions from other insurance subsidiaries to the parent company $ 52,001 38,500 — Statutory Capital Requirements The insurance laws of 16 jurisdictions, including Wisconsin, our domiciliary state, require a mortgage insurer to maintain a minimum amount of statutory capital relative to the RIF (or a similar measure) in order for the mortgage insurer to continue to write new business. We refer to these requirements as the “State Capital Requirements” and, together with the GSE Financial Requirements, the “Financial Requirements.” While they vary among jurisdictions, the most common State Capital Requirements allow for a maximum risk-to-capital ratio of 25 to 1 . A risk-to-capital ratio will increase if (i) the percentage decrease in capital exceeds the percentage decrease in insured risk, or (ii) the percentage increase in capital is less than the percentage increase in insured risk. Wisconsin does not regulate capital by using a risk-to-capital measure but instead requires a minimum policyholder position ("MPP"). The “policyholder position” of a mortgage insurer is its net worth or surplus, contingency reserve and a portion of the reserves for unearned premiums. At December 31, 2016 , MGIC’s risk-to-capital ratio was 10.7 to 1 , below the maximum allowed by the jurisdictions with State Capital Requirements and its policyholder position was $1.6 billion above the required MPP of $1.1 billion . In calculating our risk-to-capital ratio and MPP, we are allowed full credit for the risk ceded under our reinsurance transaction with a group of unaffiliated reinsurers. It is possible that under the revised State Capital Requirements discussed below, MGIC will not be allowed full credit for the risk ceded to the reinsurers. If MGIC is not allowed an agreed level of credit under either the State Capital Requirements or the PMIERs, MGIC may terminate the reinsurance agreement, without penalty. At this time, we expect MGIC to continue to comply with the current State Capital Requirements; however, you should read the rest of these financial statement footnotes for information about matters that could negatively affect such compliance. At December 31, 2016 , the risk-to-capital ratio of our combined insurance operations (which includes a reinsurance affiliate) was 12.0 to 1 . Reinsurance transactions with our affiliate permit MGIC to write insurance with a higher coverage percentage than it could on its own under certain state-specific requirements. A higher risk-to-capital ratio on a combined basis may indicate that, in order for MGIC to continue to utilize reinsurance arrangements with its reinsurance affiliate, additional capital contributions to the affiliate could be needed. The NAIC previously announced that it plans to revise the minimum capital and surplus requirements for mortgage insurers that are provided for in its Mortgage Guaranty Insurance Model Act. In May 2016, a working group of state regulators released an exposure draft of a risk-based capital framework to establish capital requirements for mortgage insurers, although no date has been established by which the NAIC must propose revisions to the capital requirements. We continue to evaluate the impact of the framework contained in the exposure draft, including the potential impact of certain items that have not yet been completely addressed by the framework which include: the treatment of ceded risk, minimum capital floors, and action level triggers. Currently we believe that the PMIERs contain the more restrictive capital requirements in most circumstances. While MGIC currently meets the State Capital Requirements of Wisconsin and all other jurisdictions, it could be prevented from writing new business in the future in all jurisdictions if it fails to meet the State Capital Requirements of Wisconsin, or it could be prevented from writing new business in a particular jurisdiction if it fails to meet the State Capital Requirements of that jurisdiction and in each case MGIC does not obtain a waiver of such requirements. It is possible that regulatory action by one or more jurisdictions, including those that do not have specific State Capital Requirements, may prevent MGIC from continuing to write new insurance in such jurisdictions. If we are unable to write business in all jurisdictions, lenders may be unwilling to procure insurance from us anywhere. In addition, a lender’s assessment of the future ability of our insurance operations to meet the State Capital Requirements or the PMIERs may affect its willingness to procure insurance from us. A possible future failure by MGIC to meet the State Capital Requirements or the PMIERs will not necessarily mean that MGIC lacks sufficient resources to pay claims on its insurance liabilities. While we believe MGIC has sufficient claims paying resources to meet its claim obligations on its IIF on a timely basis, you should read the rest of these financial statement footnotes for information about matters that could negatively affect MGIC’s claims paying resources. Dividend restrictions In 2016, MGIC paid a total of $64 million in dividends to our holding company, its first dividends since 2008, and we expect MGIC to continue to pay quarterly dividends. During 2016, distributions of $52 million were paid to our holding company from other insurance subsidiaries. These distributions were completed in conjunction with the transfer of risk and the final dissolution of those insurance entities during 2016. Our holding company subsequently contributed the majority of the funds to MGIC in relation to the transfer of risk. During 2015, distributions of $38.5 million were paid to our holding company from other insurance subsidiaries. MGIC is subject to statutory regulations as to payment of dividends. The maximum amount of dividends that MGIC may pay in any twelve-month period without regulatory approval by the OCI is the lesser of adjusted statutory net income or 10% of statutory policyholders' surplus as of the preceding calendar year end. Adjusted statutory net income is defined for this purpose to be the greater of statutory net income, net of realized investment gains, for the calendar year preceding the date of the dividend or statutory net income, net of realized investment gains, for the three calendar years preceding the date of the dividend less dividends paid within the first two of the preceding three calendar years. The OCI recognizes only statutory accounting practices prescribed or permitted by the State of Wisconsin for determining and reporting the financial condition and results of operations of an insurance company. The OCI has adopted certain prescribed accounting practices that differ from those found in other states. Specifically, Wisconsin domiciled companies record changes in the contingency reserves through the income statement as a change in underwriting deduction. As a result, in periods in which MGIC is increasing contingency reserves, statutory net income is lowered. For the year ended December 31, 2016 , MGIC’s statutory net income was reduced by $490 million to account for the increase in contingency reserves. |
Share-based Compensation Plans
Share-based Compensation Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Plans | Share-based Compensation Plans We have certain share-based compensation plans. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period which generally corresponds to the vesting period. The fair value of awards classified as liabilities is remeasured at each reporting period until the award is settled. Awards under our plans generally vest over periods ranging from one to three years . We have an omnibus incentive plan that was adopted on April 23, 2015. When the 2015 plan was adopted, no further awards could be made under our previous 2011 plan. The purpose of the 2015 plan is to motivate and incent performance by, and to retain the services of, key employees and non-employee directors through receipt of equity-based and other incentive awards under the plan. The maximum number of shares of stock that can be awarded under the 2015 plan is 10.0 million . Awards issued under the plan that are subsequently forfeited will not count against the limit on the maximum number of shares that may be issued under the plan. The 2015 plan provides for the award of stock options, stock appreciation rights, restricted stock and restricted stock units, as well as cash incentive awards. No awards may be granted after April 23, 2025 under the 2015 plan. The vesting provisions of options, restricted stock and restricted stock units are determined at the time of grant. Shares issued under the 2015 plan will be newly issued shares. The compensation cost that has been charged against income for share-based plans was $11.4 million , $11.9 million , and $9.2 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. The related income tax benefit recognized for share-based plans was $4.0 million and $4.2 million for the years ended December 31, 2016 and 2015, respectively. The related income tax benefit, before valuation allowance, recognized for share-based plans was, and $3.2 million for the year ended December 31, 2014 . A summary of restricted stock or restricted stock unit (collectively called “restricted stock”) activity during 2016 is as follows: Weighted Average Grant Date Fair Market Value Shares Restricted stock outstanding at December 31, 2015 $ 7.97 3,319,467 Granted 5.66 1,689,300 Vested 7.00 (1,707,711 ) Forfeited 4.24 (154,384 ) Restricted stock outstanding at December 31, 2016 $ 7.44 3,146,672 At December 31, 2016 , the 3.1 million shares of restricted stock outstanding consisted of 2.3 million shares that are subject to performance conditions (“performance shares”) and 0.8 million shares that are subject only to service conditions (“time vested shares”). The weighted-average grant date fair value of restricted stock granted during 2015 and 2014 was $9.03 and $8.43 , respectively. The fair value of restricted stock granted is the closing price of the common stock on the New York Stock Exchange on the date of grant. The total fair value of restricted stock vested during 2016 , 2015 and 2014 was $12.2 million , $17.2 million , and $12.1 million , respectively. As of December 31, 2016 , there was $11.7 million of total unrecognized compensation cost related to non-vested share-based compensation agreements granted under the plans. Of this total, $8.9 million of unrecognized compensation costs relate to performance shares and $2.8 million relates to time vested shares. A portion of the unrecognized costs associated with the performance shares may or may not be recognized in future periods, depending upon whether or not the performance and service conditions are met. The cost associated with the time vested shares is expected to be recognized over a weighted-average period of 1.3 years . At December 31, 2016 , 8.3 million shares were available for future grant under the 2015 omnibus incentive plan. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases | Leases We lease certain office space as well as data processing equipment and autos under operating leases that expire during the next five years . Generally, rental payments are fixed. Total rental expense under operating leases was $2.1 million in 2016 , $2.2 million in 2015 , and $2.8 million in 2014 . At December 31, 2016 , minimum future operating lease payments are as follows (in thousands): 2017 $ 665 2018 676 2019 688 2020 490 2021 and thereafter 46 Total $ 2,565 |
Litigation and Contingencies
Litigation and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies Before paying an insurance claim, we review the loan and servicing files to determine the appropriateness of the claim amount. When reviewing the files, we may determine that we have the right to rescind coverage on the loan. We refer to insurance rescissions and denials of claims collectively as “rescissions” and variations of that term. In addition, all of our insurance policies provide that we can reduce or deny a claim if the servicer did not comply with its obligations under our insurance policy. We call such reduction of claims “curtailments.” In 2015 and 2016 , curtailments reduced our average claim paid by approximately 6.7% and 5.5% , respectively. Our loss reserving methodology incorporates our estimates of future rescissions, curtailments, and reversals of rescissions and curtailments. A variance between ultimate actual rescission, curtailment, and reversal rates and our estimates, as a result of the outcome of litigation, settlements or other factors, could materially affect our losses. When the insured disputes our right to rescind coverage or curtail claims, we generally engage in discussions in an attempt to settle the dispute. If we are unable to reach a settlement, the outcome of a dispute ultimately would be determined by legal proceedings. Under ASC 450-20, until a liability associated with settlement discussions or legal proceedings becomes probable and can be reasonably estimated, we consider our claim payment or rescission resolved for financial reporting purposes and do not accrue an estimated loss. Where we determine that a loss is probable and can be reasonably estimated we have recorded our best estimate of our probable loss. If we are not able to implement settlements we consider probable, we intend to defend MGIC vigorously against any related legal proceedings. In addition to matters for which we have recorded a probable loss, we are involved in other discussions and/or proceedings with insureds with respect to our claims paying practices. Although it is reasonably possible that when these matters are resolved we will not prevail in all cases, we are unable to make a reasonable estimate or range of estimates of the potential liability. We estimate the maximum exposure associated with matters where a loss is reasonably possible to be approximately $295 million , although we believe (but can give no assurance that) we will ultimately resolve these matters for significantly less than this amount. This estimate of our maximum exposure does not include interest or consequential or exemplary damages. Mortgage insurers, including MGIC, have been involved in litigation and regulatory actions related to alleged violations of the anti-referral fee provisions of RESPA, and the notice provisions of the FCRA. While these proceedings in the aggregate have not resulted in material liability for MGIC, there can be no assurance that the outcome of future proceedings under these laws, if any, would have a material adverse affect on us. In addition, various regulators, including the CFPB, state insurance commissioners and state attorneys general may bring other actions seeking various forms of relief in connection with alleged violations of RESPA. The insurance law provisions of many states prohibit paying for the referral of insurance business and provide various mechanisms to enforce this prohibition. While we believe our practices are in conformity with applicable laws and regulations, it is not possible to predict the eventual scope, duration or outcome of any such reviews or investigations nor is it possible to predict their effect on us or the mortgage insurance industry. Through a non-insurance subsidiary, we utilize our underwriting skills to provide an outsourced underwriting service to our customers known as contract underwriting. As part of the contract underwriting activities, that subsidiary is responsible for the quality of the underwriting decisions in accordance with the terms of the contract underwriting agreements with customers. That subsidiary may be required to provide certain remedies to its customers if certain standards relating to the quality of our underwriting work are not met, and we have an established reserve for such future obligations. Claims for remedies may be made a number of years after the underwriting work was performed. Beginning in the second half of 2009, our subsidiary experienced an increase in claims for contract underwriting remedies, which continued throughout 2012. The related contract underwriting remedy expense for the years ended December 31, 2016 , 2015 , and 2014 , respectively, was immaterial to our consolidated financial statements. In addition to the matters described above, we are involved in other legal proceedings in the ordinary course of business. In our opinion, based on the facts known at this time, the ultimate resolution of these ordinary course legal proceedings will not have a material adverse effect on our financial position or consolidated results of operations. See Note 12 – “Income Taxes” for a description of federal income tax contingencies. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Data | Unaudited Quarterly Financial Data 2016: Quarter Full (In thousands, except per share data) First Second Third Fourth Year Net premiums earned $ 221,341 $ 231,456 $ 237,376 $ 235,053 $ 925,226 Investment income, net of expenses 27,809 27,248 27,515 28,094 110,666 Realized gains 3,056 836 5,092 (52 ) 8,932 Other revenue 6,373 3,994 3,867 3,425 17,659 Loss incurred, net 85,012 46,590 60,897 47,658 240,157 Underwriting and other expenses, net 56,439 49,837 53,981 56,824 217,081 Loss on debt extinguishment 13,440 1,868 75,223 — 90,531 Provision for income tax 34,497 56,018 27,131 54,551 172,197 Net income 69,191 109,221 56,618 107,487 342,517 Income per share (a) (b) : Basic 0.20 0.32 0.16 0.31 1.00 Diluted 0.17 0.26 0.14 0.28 0.86 2015: Quarter Full (In thousands, except per share data) First Second Third Fourth Year Net premiums earned $ 217,288 $ 213,508 $ 239,234 $ 226,192 $ 896,222 Investment income, net of expenses 24,120 25,756 25,939 27,926 103,741 Realized (losses) gains 26,327 166 640 1,228 28,361 Other revenue 2,480 3,699 3,698 3,087 12,964 Loss incurred, net 81,785 90,238 76,458 95,066 343,547 Underwriting and other expenses, net 51,969 37,915 65,805 53,858 209,547 Loss on debt extinguishment — — — 507 507 Provision for (benefit from) income tax 3,385 1,322 (695,604 ) 6,584 (684,313 ) Net income 133,076 113,654 822,852 102,418 1,172,000 Income per share (a) (b) : Basic 0.39 0.33 2.42 0.30 3.45 Diluted 0.32 0.28 1.78 0.24 2.60 (a) Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of the quarterly per share data may not equal the per share data for the year. (b) In periods where convertible debt instruments are dilutive to earnings per share the “if-converted” method of computing diluted EPS requires an interest expense adjustment, net of tax, to net income available to shareholders. The interest expense adjustment was not tax effected for the first and second quarter of 2015 due to our valuation allowance on deferred tax assets. See Note 4 – “Earnings Per Share” for further discussion on our calculation of diluted EPS. |
SCHEDULE I - SUMMARY OF INVESTM
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Investments, Other than Investments in Related Parties [Abstract] | |
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES | SCHEDULE I — SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2016 (In thousands) Type of Investment Amortized Cost Fair Value Amount at which shown in the balance sheet Fixed income: Bonds: United States Government and government agencies and authorities $ 73,847 $ 73,530 $ 73,530 States, municipalities and political subdivisions 2,147,458 2,143,016 2,143,016 Foreign governments — — — Public utilities 176,184 175,084 175,084 Asset-backed securities 59,519 59,565 59,565 Collateralized loan obligations 121,151 121,174 121,174 Mortgage-backed 558,775 544,026 544,026 All other corporate bonds 1,580,278 1,568,827 1,568,827 Total fixed income 4,717,212 4,685,222 4,685,222 Equity securities: Common stocks: Industrial, miscellaneous and all other 7,144 7,128 7,128 Total equity securities 7,144 7,128 7,128 Total investments $ 4,724,356 $ 4,692,350 $ 4,692,350 |
SCHEDULE II - CONDENSED FINANCI
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED BALANCE SHEETS PARENT COMPANY ONLY December 31, (In thousands) 2016 2015 ASSETS Fixed income (amortized cost, 2016 – $247,396; 2015 – $385,281) $ 245,435 $ 382,565 Cash and cash equivalents 37,666 19,417 Investment in subsidiaries, at equity in net assets 3,150,671 2,903,944 Accounts receivable - affiliates 780 938 Income taxes - current and deferred 289,703 151,318 Accrued investment income 1,749 3,700 Other assets 80 123 Total assets $ 3,726,084 $ 3,462,005 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Senior notes $ 417,406 $ — Convertible senior notes 349,461 822,301 Convertible junior subordinated debentures 389,522 389,522 Accrued interest 20,853 14,042 Total liabilities 1,177,242 1,225,865 Shareholders’ equity: Common stock, (one dollar par value, shares authorized 1,000,000; shares issued 2016 – 359,400; 2015 – 340,097; outstanding 2016 – 340,663; 2015 – 339,657) 359,400 340,097 Paid-in capital 1,782,337 1,670,238 Treasury stock (shares at cost 2016 – 18,737; 2015 – 440) (150,359 ) (3,362 ) Accumulated other comprehensive loss, net of tax (75,100 ) (60,880 ) Retained earnings 632,564 290,047 Total shareholders’ equity 2,548,842 2,236,140 Total liabilities and shareholders’ equity $ 3,726,084 $ 3,462,005 See accompanying supplementary notes to Parent Company condensed financial statements. MGIC INVESTMENT CORPORATION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF OPERATIONS PARENT COMPANY ONLY Years Ended December 31, (In thousands) 2016 2015 2014 Revenues: Investment income, net of expenses $ 3,807 $ 7,586 $ 6,985 Net realized investment gains 646 357 395 Total revenues 4,453 7,943 7,380 Expenses: Operating expenses 1,409 582 546 Interest expense 64,598 68,932 69,648 Loss on debt extinguishment 82,234 507 837 Total expenses 148,241 70,021 71,031 Loss before tax (143,788 ) (62,078 ) (63,651 ) Benefit from income taxes (52,575 ) (125,487 ) — Equity in net income of subsidiaries 433,730 1,108,591 315,600 Net income 342,517 1,172,000 251,949 Other comprehensive (loss) income, net of tax (14,220 ) 20,461 36,385 Comprehensive income $ 328,297 $ 1,192,461 $ 288,334 See accompanying supplementary notes to Parent Company condensed financial statements. MGIC INVESTMENT CORPORATION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF CASH FLOWS PARENT COMPANY ONLY Years Ended December 31, (In thousands) 2016 2015 2014 Cash flows from operating activities: Net income $ 342,517 $ 1,172,000 $ 251,949 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in net income of subsidiaries (433,730 ) (1,108,591 ) (315,600 ) Dividends received from subsidiaries 64,000 6,500 — Deferred tax benefit (55,988 ) (125,532 ) — Loss on debt extinguishment 82,234 507 837 Other 11,625 22,342 14,025 Change in certain assets and liabilities: Accounts receivable - affiliates 158 (626 ) 68 Income taxes receivable 3,602 (8,308 ) 480 Accrued investment income 1,951 (265 ) 194 Accrued interest 6,811 (652 ) (188 ) Net cash provided by (used in) operating activities 23,180 (42,625 ) (48,235 ) Cash flows from investing activities: Capital distributions from subsidiaries 51,987 32,000 — Capital contributions to subsidiaries (36,025 ) — — Purchase of fixed income (194,751 ) (295,010 ) (553,538 ) Sale of fixed income 330,142 386,385 613,322 Net cash provided by investing activities 151,353 123,375 59,784 Cash flows from financing activities: Net proceeds from issuance of long-term debt 416,967 — — Repayment of long-term debt — (61,953 ) (21,767 ) Repurchase of convertible senior notes (426,191 ) (12,004 ) — Repurchase of common stock (147,127 ) — — Excess tax benefits related to share-based compensation 67 2,117 — Net cash used in financing activities (156,284 ) (71,840 ) (21,767 ) Net increase (decrease) in cash and cash equivalents 18,249 8,910 (10,218 ) Cash and cash equivalents at beginning of year 19,417 10,507 20,725 Cash and cash equivalents at end of year $ 37,666 $ 19,417 $ 10,507 See accompanying supplementary notes to Parent Company condensed financial statements. SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY SUPPLEMENTARY NOTES Note A The accompanying Parent Company financial statements should be read in conjunction with the consolidated financial statements and notes to consolidated financial statements appearing this annual report. Note B Our insurance subsidiaries are subject to statutory regulations as to maintenance of policyholders’ surplus and payment of dividends. The maximum amount of dividends that the insurance subsidiaries may pay in any twelve-month period without regulatory approval by the OCI is the lesser of adjusted statutory net income or 10% of statutory policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is defined for this purpose to be the greater of statutory net income, net of realized investment gains, for the calendar year preceding the date of the dividend or statutory net income, net of realized investment gains, for the three calendar years preceding the date of the dividend less dividends paid within the first two of the preceding three calendar years. The payment of dividends from our insurance subsidiaries is the principal source of cash inflow for MGIC Investment Corporation, our holding company, other than investment income and raising capital in the public markets. The payment of dividends by our insurance subsidiaries is restricted by insurance regulation as discussed above. MGIC is the principal source of dividend-paying capacity and, in 2016, it paid a total of $64 million in dividends to our holding company, its first dividends since 2008, and we expect MGIC to continue to pay quarterly dividends. During 2016, distributions of $52 million were paid to our holding company from other insurance subsidiaries. These distributions were completed in conjunction with the transfer of risk and the final dissolution of those insurance entities during 2016. Our holding company subsequently contributed the majority of the funds, approximately $36 million , to MGIC in relation to the transfer of risk. During 2015, distributions of $38.5 million , which includes dividends of $6.5 million , were paid to the holding company from other insurance subsidiaries. No dividends were paid to the holding company by our insurance subsidiaries in 2014 and no contributions were made to our insurance subsidiaries in 2015 or 2014. Note C The senior notes, convertible senior notes and convertible junior subordinated debentures (" 9% Debentures"), discussed in Note 7 – “Debt” to our consolidated financial statements, are obligations of MGIC Investment Corporation, our holding company, and not of its subsidiaries. In February 2016, MGIC purchased $132.7 million in aggregate principal of the 9% Debentures. The details of this transaction are discussed in Note 7 – “Debt” to our consolidated financial statements. The 9% Debentures owned by MGIC remain obligations of our holding company. The carrying amount outstanding of the 9% Debentures of $389.5 million is reported on the Parent Company only condensed balance sheet. For GAAP accounting purposes, the 9% Debentures owned by MGIC are eliminated in our consolidated financial statements. |
SCHEDULE IV - REINSURANCE
SCHEDULE IV - REINSURANCE | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |
SCHEDULE IV - REINSURANCE | SCHEDULE IV — REINSURANCE MORTGAGE INSURANCE PREMIUMS EARNED Years Ended December 31, 2016, 2015 and 2014 (Dollars in thousands) Gross Amount Ceded to Other Companies Assumed From Other Companies Net Amount Percentage of Amount Assumed to Net Years ended December 31, 2016 $ 1,058,545 $ 133,981 $ 662 $ 925,226 0.1 % 2015 997,892 102,848 1,178 896,222 0.1 % 2014 950,973 108,255 1,653 844,371 0.2 % |
Significant Accounting Polici29
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), as codified in the Accounting Standards Codification ("ASC"). Our consolidated financial statements include the accounts of MGIC Investment Corporation and its majority-owned subsidiaries. Intercompany transactions and balances have been eliminated. In accordance with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We have considered subsequent events through the date of this filing. |
Reclassifications | Certain reclassifications to 2015 and 2014 amounts have been made in the accompanying consolidated financial statements to conform to the 2016 presentation. |
Cash and Cash Equivalents | We consider money market funds and investments with original maturities of three months or less to be cash equivalents. |
Fair value measurements | The authoritative guidance around fair value established a framework for measuring fair value. Fair value is disclosed using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value and includes Levels 1, 2, and 3. To determine the fair value of securities available-for-sale in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including data published in market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. This model combines all inputs to arrive at a value assigned to each security. Quality controls are performed by the independent pricing sources throughout this process, which include reviewing tolerance reports, trading information, data changes, and directional moves compared to market moves. In addition, on a quarterly basis, we perform quality controls over values received from the pricing sources which also include reviewing tolerance reports, trading information, data changes, and directional moves compared to market moves. We have not made any adjustments to the prices obtained from the independent pricing sources. In accordance with fair value accounting guidance, we applied the following fair value hierarchy in order to measure fair value for assets and liabilities: Level 1 - Quoted prices for identical instruments in active markets that we can access. Financial assets utilizing Level 1 inputs primarily include U.S. Treasury securities, equity securities, and Australian government and semi government securities. Level 2 - Quoted prices for similar instruments in active markets that we can access; quoted prices for identical or similar instruments in markets that are not active; and inputs, other than quoted prices, that are observable in the marketplace for the instrument. The observable inputs are used in valuation models to calculate the fair value of the instruments. Financial assets utilizing Level 2 inputs primarily include obligations of U.S. government corporations and agencies, corporate bonds, mortgage-backed securities, asset-backed securities, and most municipal bonds. The independent pricing sources utilize these approaches to determine the fair value of the instruments in Level 2 of the fair value hierarchy based on type of instrument: Corporate Debt & U.S. Government and Agency Bonds are evaluated by surveying the dealer community, obtaining relevant trade data, benchmark quotes and spreads and incorporating this information into the evaluation process. Obligations of U.S. States & Political Subdivisions are evaluated by tracking, capturing, and analyzing quotes for active issues and trades reported via the Municipal Securities Rulemaking Board records. Daily briefings and reviews of current economic conditions, trading levels, spread relationships, and the slope of the yield curve provide further data for evaluation. Residential Mortgage-Backed Securities ("RMBS") are evaluated by monitoring interest rate movements, and other pertinent data daily. Incoming market data is enriched to derive spread, yield and/or price data as appropriate, enabling known data points to be extrapolated for valuation application across a range of related securities. Commercial Mortgage-Backed Securities ("CMBS") are evaluated using valuation techniques that reflect market participants’ assumptions and maximize the use of relevant observable inputs including quoted prices for similar assets, benchmark yield curves and market corroborated inputs. Evaluation utilizes regular reviews of the inputs for securities covered, including executed trades, broker quotes, credit information, collateral attributes and/or cash flow waterfall as applicable. Asset-Backed Securities ("ABS") are evaluated using spreads and other information solicited from market buy-and-sell-side sources, including primary and secondary dealers, portfolio managers, and research analysts. Cash flows are generated for each tranche, benchmark yields are determined, and deal collateral performance and tranche level attributes including trade activity, bids, and offers are applied, resulting in tranche specific prices. Collateralized loan obligations ("CLO") Collateralized Loan Obligations are evaluated by manager rating, seniority in the capital structure, assumptions about prepayment, default and recovery and their impact on cash flow generation. Loan level net asset values are determined and aggregated for tranches and as a final step prices are checked against available recent trade activity. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or value drivers are unobservable or from par values for equity securities restricted in their ability to be redeemed or sold. The inputs used to derive the fair value of Level 3 securities reflect our own assumptions about the assumptions a market participant would use in pricing an asset or liability. Financial assets utilizing Level 3 inputs primarily include equity securities that can only be redeemed or sold at their par value and only to the security issuer and certain state premium tax credit investments. Our non-financial assets that are classified as Level 3 securities consist of real estate acquired through claim settlement. The fair value of real estate acquired is the lower of our acquisition cost or a percentage of the appraised value. The percentage applied to the appraised value is based upon our historical sales experience adjusted for current trends. |
Investments | Our entire investment portfolio is classified as available-for-sale and is reported at fair value or, for certain equity securities carried at cost, amounts that approximate fair value. The related unrealized investment gains or losses are, after considering the related tax expense or benefit, recognized as a component of accumulated other comprehensive income (loss) in shareholders' equity. Realized investment gains and losses are reported in income based upon specific identification of securities sold. (See Note 5 – “Investments.” ) Each quarter we perform reviews of our investments in order to determine whether declines in fair value below amortized cost were considered other-than-temporary. In evaluating whether a decline in fair value is other-than-temporary, we consider several factors including, but not limited to: ▪ our intent to sell the security or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; ▪ the present value of the discounted cash flows we expect to collect compared to the amortized cost basis of the security; ▪ extent and duration of the decline; ▪ failure of the issuer to make scheduled interest or principal payments; ▪ change in rating below investment grade; and ▪ adverse conditions specifically related to the security, an industry, or a geographic area. Based on our evaluation, we will record an other-than-temporary impairment ("OTTI") adjustment on a security if we intend to sell the impaired security, if it is more likely than not that we will be required to sell the impaired security prior to recovery of its amortized cost basis, or if the present value of the discounted cash flows we expect to collect is less than the amortized cost basis of the security. If the fair value of a security is below its amortized cost at the time of our intent to sell, the security is classified as other-than-temporarily impaired and the full amount of the impairment is recognized as a loss in the statement of operations. Otherwise, when a security is considered to be other-than-temporarily impaired, the losses are separated into the portion of the loss that represents the credit loss and the portion that is due to other factors. The credit loss portion is recognized as a loss in the statement of operations, while the loss due to other factors is recognized in accumulated other comprehensive loss, net of taxes. A credit loss is determined to exist if the present value of the discounted cash flows, using the security’s original yield, expected to be collected from the security is less than the cost basis of the security. |
Home office and equipment | Home office and equipment is carried at cost net of depreciation. For financial reporting purposes, depreciation is determined on a straight-line basis for the home office and equipment over estimated lives ranging from 3 to 45 years. For income tax purposes, we use accelerated depreciation methods. |
Deferred Insurance Policy Acquisition Costs | Costs directly associated with the successful acquisition of mortgage insurance business, consisting of employee compensation and other policy issuance and underwriting expenses, are initially deferred and reported as deferred insurance policy acquisition costs ("DAC"). The deferred costs are net of any ceding commissions received associated with our reinsurance agreements. For each underwriting year of business, these costs are amortized to income in proportion to estimated gross profits over the estimated life of the policies. We utilize anticipated investment income in our calculation. This includes accruing interest on the unamortized balance of DAC. The estimates for each underwriting year are reviewed quarterly and updated when necessary to reflect actual experience and any changes to key variables such as persistency or loss development. If a premium deficiency exists (in other words, no gross profit is expected), we reduce the related DAC by the amount of the deficiency or to zero through a charge to current period earnings. If the deficiency is more than the related DAC balance, we then establish a premium deficiency reserve equal to the excess, through a charge to current period earnings. |
Loss Reserves | Reserves are established for insurance losses and loss adjustment expenses ("LAE") when we receive notices of default on insured mortgage loans. We consider a loan in default when it is two or more payments past due. Even though the accounting standard, ASC 944, regarding accounting and reporting by insurance entities specifically excludes mortgage insurance from its guidance relating to loss reserves, we establish loss reserves using the general principles contained in the insurance standard. However, consistent with industry standards for mortgage insurers, we do not establish loss reserves for future claims on insured loans which are not currently in default. Loss reserves are established by estimating the number of loans in our inventory of delinquent loans that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity. Our loss estimates are established based upon historical experience, including rescission and loan modification activity. Adjustments to reserve estimates are reflected in the financial statements in the years in which the adjustments are made. The liability for reinsurance assumed is based on information provided by the ceding companies. Reserves are also established for estimated losses from defaults occurring prior to the close of an accounting period on notices of default not yet reported to us. These incurred but not reported ("IBNR") reserves are also established using estimated claim rates and claim severities. Reserves are also established for the estimated costs of settling claims, including legal and other expenses and general expenses of administering the claims settlement process. Reserves are also ceded to reinsurers under our reinsurance agreements. |
Premium Deficiency Reserve | After our loss reserves are initially established, we perform premium deficiency tests using our best estimate assumptions as of the testing date. Premium deficiency reserves are established, if necessary, when the present value of expected future losses and expenses exceeds the present value of expected future premium and already established reserves. The discount rate used in the calculation of the premium deficiency reserve is based upon our pre-tax investment yield at year-end. Products are grouped for premium deficiency testing purposes based on similarities in the way the products are acquired, serviced and measured for profitability. The calculation of premium deficiency reserves requires the use of significant judgments and estimates to determine the present value of future premium and present value of expected losses and expenses on our business. The calculation of future premium depends on, among other things, assumptions about persistency and repayment patterns on underlying loans. The calculation of expected losses and expenses depends on assumptions relating to severity of claims and claim rates on current defaults, and expected defaults in future periods. These assumptions also include an estimate of expected rescission activity. Similar to our loss reserve estimates, our estimates for premium deficiency reserves could be adversely affected by several factors, including a deterioration of regional or economic conditions leading to a reduction in borrowers' income and thus their ability to make mortgage payments, and a drop in housing values can influence the willingness of borrowers with sufficient resources to make mortgage payments to do so when the mortgage balance exceeds the value of the home, which could expose us to greater losses. Assumptions used in calculating the deficiency reserves can also be affected by volatility in the current housing and mortgage lending industries. To the extent premium patterns and actual loss experience differ from the assumptions used in calculating the premium deficiency reserves, the differences between the actual results and our estimate will affect future period earnings and could be material. We previously established a premium deficiency reserve in 2007 on our Wall Street Bulk business, which we also ceased writing in that year. As of December 31, 2015 a premium deficiency reserve was no longer required. Changes in the premium deficiency reserve from period to period were primarily due to the recognition of previously estimated premiums, losses, and expenses, and changes in our assumptions relating to the present value of expected future premiums, losses, and expenses on the remaining Wall Street Bulk IIF. Our consolidated statements of operations for the years ended December 31, 2015 and 2014 were affected by decreases in our premium deficiency reserves of $24 million and $25 million , respectively. The decreases represented the net result of actual premiums, losses and expenses as well as a net change in assumptions for these periods. |
Revenue Recognition | We write policies which are guaranteed renewable contracts at the insured's option on a monthly, single, or annual premium basis. We have no ability to reunderwrite or reprice these contracts. Premiums written on monthly premium policies are earned as coverage is provided. Premiums written on single premium policies and annual premium policies are initially deferred as unearned premium reserve and earned over the estimated policy life. Premiums written on policies covering more than one year are amortized over the policy life in relationship to the anticipated incurred loss pattern based on historical experience. Premiums written on annual premium policies are earned on a monthly pro rata basis. When a policy is cancelled for a reason other than rescission or claim payment, all premium that is non-refundable is immediately earned. Any refundable premium is returned to the servicer or borrower. When a policy is cancelled due to rescission, all previously collected premium is returned to the servicer and when a policy is cancelled because a claim is paid, we return any premium received since the date of default. The liability associated with our estimate of premium to be returned is accrued for separately and included in "Other liabilities" on our consolidated balance sheets. When a premium deficiency exists the premium refund liability is included in “Premium deficiency reserves” on our consolidated balance sheets. Changes in these liabilities affect premiums written and earned and change in premium deficiency reserve, respectively. The actual return of premium for all periods affects premiums written and earned. Policy cancellations also lower the persistency rate which is a variable used in calculating the rate of amortization of deferred insurance policy acquisition costs. Fee income of our non-insurance subsidiaries is earned and recognized as the services are provided and the customer is obligated to pay. Fee income consists primarily of contract underwriting and related fee-based services provided to lenders and is included in “Other revenue” on the consolidated statements of operations. |
Income Taxes | Deferred income taxes are provided under the liability method, which recognizes the future tax effects of temporary differences between amounts reported in the consolidated financial statements and the tax bases of these items. The expected tax effects are computed at the enacted regular federal statutory tax rate. Using this method, we have recorded a net deferred tax asset primarily due to net operating losses incurred in prior years. On a quarterly basis, we review the need to maintain a deferred tax asset valuation allowance as an offset to the net deferred tax asset, before valuation allowance. We analyze several factors, among which are the severity and frequency of operating losses, our capacity for the carryback or carryforward of any losses, the existence and current level of taxable operating income, operating results on a three year cumulative basis, the expected occurrence of future income or loss, the expiration dates of the carryforwards, the cyclical nature of our operating results, and available tax planning strategies. Based on our analysis, we reduced our benefit from income tax through the recognition of a valuation allowance from the first quarter of 2009 through the second quarter of 2015. In the third quarter of 2015, as discussed in Note 12 –“Income Taxes,” we concluded that it was more likely than not that our deferred tax assets would be fully realizable and we reversed the valuation allowance. We provide for uncertain tax positions and the related interest and penalties based on our assessment of whether a tax benefit is more likely than not to be sustained under any examination by taxing authorities. |
Benefit Plans | We have a non-contributory defined benefit pension plan covering substantially all employees, as well as a supplemental executive retirement plan. Retirement benefits are based on compensation and years of service. We recognize these retirement benefit costs over the period during which employees render the service that qualifies them for benefits. Our policy is to fund pension cost as required under the Employee Retirement Income Security Act of 1974. We offer both medical and dental benefits for retired domestic employees, their eligible spouses and dependents until the retiree reaches the age of 65 . Under the plan retirees pay a premium for these benefits. We accrue the estimated costs of retiree medical and dental benefits over the period during which employees render the service that qualifies them for benefits. |
Reinsurance | Loss reserves and unearned premiums are reported before taking credit for amounts ceded under reinsurance agreements. Ceded loss reserves are reflected as "Reinsurance recoverable on loss reserves." Ceded unearned premiums are included in “Other assets.” Amounts due from reinsurers on paid claims are reflected as “Reinsurance recoverable on paid losses.” Ceded premiums payable are included in “Other liabilities.” Any profit commissions are included with “Premiums written – Ceded” and any ceding commissions are included with “Other underwriting and operating expenses, net.” We remain liable for all insurance ceded. |
Share-Based Compensation | We have certain share-based compensation plans. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period which generally corresponds to the vesting period. The fair value of awards classified as liabilities is remeasured at each reporting period until the award is settled. Awards under our plans generally vest over periods ranging from one to three years. |
Earnings per Share | Basic earnings per share ("EPS") is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. We calculate diluted EPS using the treasury stock method and if-converted method. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if our unvested restricted stock units result in the issuance of common stock. Under the if-converted method, diluted EPS reflects the potential dilution that could occur if our convertible debt instruments result in the issuance of common stock. The determination of potentially issuable shares does not consider the satisfaction of the conversion requirements and the shares are included in the determination of diluted EPS as of the beginning of the period, if dilutive. We have several debt issuances that could result in contingently issuable shares and consider each potential issuance of shares separately to reflect the maximum potential dilution. Nonetheless, our dilutive common stock equivalents may not reflect all of the contingently issuable shares that could be required to be issued upon any debt conversion. For purposes of calculating basic and diluted EPS, vested restricted stock and restricted stock units ("RSUs") are considered outstanding. |
Recent accounting and reporting developments | Standard Summary of guidance Effects on financial statements and/or disclosures Presentation of Debt Issuance Costs • Requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. • Adopted March 31, 2016 with retrospective application to prior periods. • Does not impact the amortization method for these costs. • There was no material impact on the consolidated balance sheets, and no impact on our statements of operations. • For further information, see Note 7. "Debt." Accounting for Share-Based Compensation When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period • Requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. • Adopted March 31, 2016 with application to performance based awards granted in 2016. • Compensation cost should be recognized in the period in which it become probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. • There was no material impact on our consolidated financial statements. • If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. • For further information, see Note 15. "Share-based Compensation Plans" . Disclosures about Short-Duration Contracts • Requires expanded disclosures designed to provide additional insight into an insurance entity's ability to underwrite and anticipate costs associated with claims. • This standard is not considered applicable to our business and therefore we have not adopted these disclosure requirements. • Disclosures include information about incurred and paid claims development, on a net of reinsurance basis, for the number of years claims incurred typically remain outstanding not to exceed ten years. • Expanded disclosures also include more transparent information about significant changes in methodologies and assumptions used to estimate claims, and the timing, frequency, and severity of claims. Classification of Certain Cash Receipts and Cash Payments • Provides specific guidance on the presentation of certain cash flow items including, but not limited to, debt prepayment and debt issuance costs and proceeds from the settlement of insurance claims. • Adopted December 31, 2016 with application to prior periods. • Cash flows related to debt prepayment and debt issuance transactions have been reclassified as financing activities from operating activities. • For further information on the impact our transactions had on our cash and cash equivalents see our consolidated statements of cash flows . Financial Accounting Standards Board ("FASB") Standards Issued but not yet Adopted Standard Summary of guidance Effects on financial statements and/or disclosures Recognition and Measurement of Financial Assets and Financial Liabilities Issued January 2016 • Requires equity investments, except those accounted for under the equity method of accounting that have a readily determinable fair value to be measured at fair value with changes in fair value recognized in earnings. • Required effective date: January 1, 2018. • Equity investments that do not have readily determinable fair values may be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. A qualitative assessment for impairment is required for equity investments without readily determinable fair values. • The potential impact from the adoption of this guidance is not expected to have a material impact our consolidated balance sheets, consolidated statements of operations, or liquidity. • Requires recognition of a cumulative effect adjustment to retained earnings as of the beginning of the reporting period of adoption. • For further information on our current equity investments see Note 5. "Investments." Improvements to Employee Share-Based Compensation Accounting Issued March 2016 • Requires that, prospectively, all tax effects related to share-based compensation be made through the statement of operations at the time of settlement, rather than recognizing excess tax benefits within paid-in capital. • Required effective date: January 1, 2017. • Removes the requirement to delay recognition of a tax benefit until it reduces current taxes payable. This change is required to be applied on a modified retrospective basis. • We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements. • Requires all tax related cash flows resulting from share-based compensation to be reported as operating activities, a change from the existing requirement to present tax benefits as an inflow from financing activities and an outflow from operating activities. • Entities, for tax withholding purposes, will be allowed to withhold an amount of shares up to an employee's maximum individual tax rate (as opposed to the minimum statutory tax rate) in the relevant jurisdiction without resulting in liability classification of the award. Measurement of Credit Losses on Financial Statements Issued June 2016 • Requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial instruments. Entities are required to use a current expected credit loss ("CECL") methodology that incorporates their forecasts of future economic conditions, unless such forecast is not reasonable or supportable, in which case the entity will revert to historical loss experience. • Required effective date: January 1, 2020. • Amends existing guidance for available-for-sale fixed income securities to incorporate an allowance, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which the fair value is less than amortized cost. The guidance will allow for reversals of impairment losses in the event that the credit of an issuer improves. The length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. • We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements, but do not expect it to have a material impact. • Updated guidance is not prescriptive about certain aspects of estimating expected credit losses, including the specific methodology to use, and therefore will require significant judgment in application. |
Significant Accounting Polici30
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Recent Accounting and Reporting Developments | Standard Summary of guidance Effects on financial statements and/or disclosures Presentation of Debt Issuance Costs • Requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. • Adopted March 31, 2016 with retrospective application to prior periods. • Does not impact the amortization method for these costs. • There was no material impact on the consolidated balance sheets, and no impact on our statements of operations. • For further information, see Note 7. "Debt." Accounting for Share-Based Compensation When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period • Requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. • Adopted March 31, 2016 with application to performance based awards granted in 2016. • Compensation cost should be recognized in the period in which it become probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. • There was no material impact on our consolidated financial statements. • If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. • For further information, see Note 15. "Share-based Compensation Plans" . Disclosures about Short-Duration Contracts • Requires expanded disclosures designed to provide additional insight into an insurance entity's ability to underwrite and anticipate costs associated with claims. • This standard is not considered applicable to our business and therefore we have not adopted these disclosure requirements. • Disclosures include information about incurred and paid claims development, on a net of reinsurance basis, for the number of years claims incurred typically remain outstanding not to exceed ten years. • Expanded disclosures also include more transparent information about significant changes in methodologies and assumptions used to estimate claims, and the timing, frequency, and severity of claims. Classification of Certain Cash Receipts and Cash Payments • Provides specific guidance on the presentation of certain cash flow items including, but not limited to, debt prepayment and debt issuance costs and proceeds from the settlement of insurance claims. • Adopted December 31, 2016 with application to prior periods. • Cash flows related to debt prepayment and debt issuance transactions have been reclassified as financing activities from operating activities. • For further information on the impact our transactions had on our cash and cash equivalents see our consolidated statements of cash flows . Financial Accounting Standards Board ("FASB") Standards Issued but not yet Adopted Standard Summary of guidance Effects on financial statements and/or disclosures Recognition and Measurement of Financial Assets and Financial Liabilities Issued January 2016 • Requires equity investments, except those accounted for under the equity method of accounting that have a readily determinable fair value to be measured at fair value with changes in fair value recognized in earnings. • Required effective date: January 1, 2018. • Equity investments that do not have readily determinable fair values may be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. A qualitative assessment for impairment is required for equity investments without readily determinable fair values. • The potential impact from the adoption of this guidance is not expected to have a material impact our consolidated balance sheets, consolidated statements of operations, or liquidity. • Requires recognition of a cumulative effect adjustment to retained earnings as of the beginning of the reporting period of adoption. • For further information on our current equity investments see Note 5. "Investments." Improvements to Employee Share-Based Compensation Accounting Issued March 2016 • Requires that, prospectively, all tax effects related to share-based compensation be made through the statement of operations at the time of settlement, rather than recognizing excess tax benefits within paid-in capital. • Required effective date: January 1, 2017. • Removes the requirement to delay recognition of a tax benefit until it reduces current taxes payable. This change is required to be applied on a modified retrospective basis. • We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements. • Requires all tax related cash flows resulting from share-based compensation to be reported as operating activities, a change from the existing requirement to present tax benefits as an inflow from financing activities and an outflow from operating activities. • Entities, for tax withholding purposes, will be allowed to withhold an amount of shares up to an employee's maximum individual tax rate (as opposed to the minimum statutory tax rate) in the relevant jurisdiction without resulting in liability classification of the award. Measurement of Credit Losses on Financial Statements Issued June 2016 • Requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial instruments. Entities are required to use a current expected credit loss ("CECL") methodology that incorporates their forecasts of future economic conditions, unless such forecast is not reasonable or supportable, in which case the entity will revert to historical loss experience. • Required effective date: January 1, 2020. • Amends existing guidance for available-for-sale fixed income securities to incorporate an allowance, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which the fair value is less than amortized cost. The guidance will allow for reversals of impairment losses in the event that the credit of an issuer improves. The length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. • We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements, but do not expect it to have a material impact. • Updated guidance is not prescriptive about certain aspects of estimating expected credit losses, including the specific methodology to use, and therefore will require significant judgment in application. The impact of the reclassification of debt issuance costs on our outstanding debt obligations as of December 31, 2015 is as follows. December 31, 2015 (In millions) As previously reported Adjustment As Adjusted 5% Notes $ 333.5 $ (2.0 ) $ 331.5 2% Notes 500.0 (9.2 ) 490.8 9% Debentures 389.5 — 389.5 Total long-term debt $ 1,223.0 $ (11.2 ) $ 1,211.8 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Calculation of earnings (loss) per share | The following table reconciles basic and diluted EPS amounts: (In thousands, except per share data) Years Ended December 31, 2016 2015 2014 Basic earnings per share: Net income $ 342,517 $ 1,172,000 $ 251,949 Weighted average common shares outstanding 342,890 339,552 338,523 Basic income per share $ 1.00 $ 3.45 $ 0.74 Diluted earnings per share: Net income $ 342,517 $ 1,172,000 $ 251,949 Interest expense, net of tax (1) : 2% Notes 6,111 7,928 12,197 5% Notes 6,362 12,228 — 9% Debentures 15,893 22,786 — Diluted income available to common shareholders $ 370,883 $ 1,214,942 $ 264,146 Weighted-average shares - Basic 342,890 339,552 338,523 Effect of dilutive securities: Unvested restricted stock units 1,470 2,113 3,082 2% Notes 54,450 71,917 71,917 5% Notes 13,107 25,603 — 9% Debentures 20,075 28,854 — Weighted-average shares - Diluted 431,992 468,039 413,522 Diluted earnings per share $ 0.86 $ 2.60 $ 0.64 Anti-dilutive securities (in millions) — — 54.5 (1) Interest expense for the years ended December 31, 2016 and December 31, 2015 has been tax effected at a rate of 35% . Due to the valuation allowance recorded against deferred tax assets, interest expense for the year ended December 31, 2014 was not tax effected. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments [Abstract] | |
Amortized cost, gross unrealized gains and losses and fair value of investment portfolio | The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio as of December 31, 2016 and 2015 are shown below: December 31, 2016 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses (1) Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 73,847 $ 407 $ (724 ) $ 73,530 Obligations of U.S. states and political subdivisions 2,147,458 20,983 (25,425 ) 2,143,016 Corporate debt securities 1,756,461 6,059 (18,610 ) 1,743,910 ABS 59,519 74 (28 ) 59,565 RMBS 231,733 102 (7,626 ) 224,209 CMBS 327,042 769 (7,994 ) 319,817 CLOs 121,151 226 (202 ) 121,175 Total debt securities 4,717,211 28,620 (60,609 ) 4,685,222 Equity securities 7,144 8 (24 ) 7,128 Total investment portfolio $ 4,724,355 $ 28,628 $ (60,633 ) $ 4,692,350 December 31, 2015 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses (1) Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 160,393 $ 2,133 $ (1,942 ) $ 160,584 Obligations of U.S. states and political subdivisions 1,766,407 33,410 (7,290 ) 1,792,527 Corporate debt securities 2,046,697 2,836 (44,770 ) 2,004,763 ABS 116,764 56 (203 ) 116,617 RMBS 265,879 161 (8,392 ) 257,648 CMBS 237,304 162 (3,975 ) 233,491 CLOs 61,345 3 (1,148 ) 60,200 Debt securities issued by foreign sovereign governments 29,359 2,474 (102 ) 31,731 Total debt securities 4,684,148 41,235 (67,822 ) 4,657,561 Equity securities 5,625 38 (18 ) 5,645 Total investment portfolio $ 4,689,773 $ 41,273 $ (67,840 ) $ 4,663,206 (1) There were no OTTI losses recorded in other comprehensive (loss) income as of December 31, 2016 and 2015 . |
Amortized cost and fair values of debt securities by contractual maturity | The amortized cost and fair values of debt securities as of December 31, 2016 , by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most asset-backed and mortgage-backed securities and collateralized loan obligations provide for periodic payments throughout their lives, they are listed below in separate categories. December 31, 2016 (In thousands) Amortized Cost Fair Value Due in one year or less $ 433,464 $ 433,770 Due after one year through five years 1,211,034 1,212,650 Due after five years through ten years 1,157,091 1,139,552 Due after ten years 1,176,177 1,174,484 3,977,766 3,960,456 ABS 59,519 59,565 RMBS 231,733 224,209 CMBS 327,042 319,817 CLOs 121,151 121,175 Total as of December 31, 2016 $ 4,717,211 $ 4,685,222 |
Aging of the fair values of securities in an unrealized loss position | For those securities in an unrealized loss position, the length of time the securities were in such a position, as measured by their month-end fair values, is as follows: December 31, 2016 Less Than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 48,642 $ (724 ) $ — $ — $ 48,642 $ (724 ) Obligations of U.S. states and political subdivisions 1,136,676 (24,918 ) 13,681 (507 ) 1,150,357 (25,425 ) Corporate debt securities 915,777 (16,771 ) 35,769 (1,839 ) 951,546 (18,610 ) ABS 3,366 (28 ) 656 — 4,022 (28 ) RMBS 46,493 (857 ) 171,326 (6,769 ) 217,819 (7,626 ) CMBS 205,545 (7,529 ) 38,587 (465 ) 244,132 (7,994 ) CLOs 13,278 (73 ) 34,760 (129 ) 48,038 (202 ) Equity securities 568 (15 ) 137 (9 ) 705 (24 ) Total investment portfolio $ 2,370,345 $ (50,915 ) $ 294,916 $ (9,718 ) $ 2,665,261 $ (60,633 ) December 31, 2015 Less Than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 60,548 $ (1,467 ) $ 1,923 $ (475 ) $ 62,471 $ (1,942 ) Obligations of U.S. states and political subdivisions 417,615 (6,404 ) 37,014 (886 ) 454,629 (7,290 ) Corporate debt securities 1,470,628 (38,519 ) 114,982 (6,251 ) 1,585,610 (44,770 ) ABS 86,604 (173 ) 5,546 (30 ) 92,150 (203 ) RMBS 35,064 (312 ) 209,882 (8,080 ) 244,946 (8,392 ) CMBS 134,488 (2,361 ) 69,927 (1,614 ) 204,415 (3,975 ) CLOs — — 51,750 (1,148 ) 51,750 (1,148 ) Debt securities issued by foreign sovereign governments 4,463 (102 ) — — 4,463 (102 ) Equity securities 355 (8 ) 171 (10 ) 526 (18 ) Total investment portfolio $ 2,209,765 $ (49,346 ) $ 491,195 $ (18,494 ) $ 2,700,960 $ (67,840 ) |
Net investment income | The source of net investment income is as follows: (In thousands) 2016 2015 2014 Fixed income $ 112,513 $ 105,882 $ 89,437 Equity securities 182 208 227 Cash equivalents 754 191 179 Other 433 455 711 Investment income 113,882 106,736 90,554 Investment expenses (3,216 ) (2,995 ) (2,907 ) Net investment income $ 110,666 $ 103,741 $ 87,647 |
Net realized investment gains (losses), including impairment losses, and change in net unrealized appreciation (depreciation) of investments | The net realized investment gains, including impairment losses, and change in net unrealized gains (losses) of investments are as follows: (In thousands) 2016 2015 2014 Net realized investment gains on investments: Fixed income $ 5,310 $ 28,335 $ 1,000 Equity securities 3,622 26 356 Other — — 1 Total net realized investment gains $ 8,932 $ 28,361 $ 1,357 Change in net unrealized gains (losses): Fixed income $ (5,403 ) $ (33,687 ) $ 91,718 Equity securities (36 ) (32 ) 66 Other 14 1 (4 ) Total (decrease) increase in net unrealized gains/losses $ (5,425 ) $ (33,718 ) $ 91,780 |
Gross realized gains, gross realized losses and impairment losses | The gross realized gains, gross realized losses and impairment losses are as follows: (In thousands) 2016 2015 2014 Gross realized gains $ 11,909 $ 30,039 $ 4,966 Gross realized losses (2,977 ) (1,678 ) (3,465 ) Other-than-temporary-impairment losses — — (144 ) Net realized gains on securities $ 8,932 $ 28,361 $ 1,357 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements for items measured at fair value | Assets measured at fair value included those listed, by hierarchy level, in the following tables as of December 31, 2016 and 2015 : December 31, 2016 (In thousands) Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 73,530 $ 30,690 $ 42,840 $ — Obligations of U.S. states and political subdivisions 2,143,016 — 2,142,325 691 Corporate debt securities 1,743,910 — 1,743,910 — ABS 59,565 — 59,565 — RMBS 224,209 — 224,209 — CMBS 319,817 — 319,817 — CLOs 121,175 — 121,175 — Total debt securities 4,685,222 30,690 4,653,841 691 Equity securities (1) 7,128 2,860 — 4,268 Total investments $ 4,692,350 $ 33,550 $ 4,653,841 $ 4,959 Real estate acquired (2) $ 11,748 $ — $ — $ 11,748 December 31, 2015 (In thousands) Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 160,584 $ 46,197 $ 114,387 $ — Obligations of U.S. states and political subdivisions 1,792,527 — 1,791,299 1,228 Corporate debt securities 2,004,763 — 2,004,763 — ABS 116,617 — 116,617 — RMBS 257,648 — 257,648 — CMBS 233,491 — 233,491 — CLOs 60,200 — 60,200 — Debt securities issued by foreign sovereign governments 31,731 31,731 — — Total debt securities 4,657,561 77,928 4,578,405 1,228 Equity securities (1) 5,645 2,790 — 2,855 Total investments $ 4,663,206 $ 80,718 $ 4,578,405 $ 4,083 Real estate acquired (2) $ 12,149 $ — $ — $ 12,149 (1) Equity securities in Level 3 are carried at cost, which approximates fair value. (2) Real estate acquired through claim settlement, which is held for sale, is reported in other assets on the consolidated balance sheets. |
Reconciliation of beginning and ending balance for assets and liabilities measured at fair value with significant unobservable inputs (level 3) | For assets and liabilities measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the years ended December 31, 2016 , 2015 , and 2014 is shown in the following tables. There were no transfers into or out of Level 3 in those years and there we no losses included in earnings for those years attributable to the change in unrealized losses on assets still held at the end of each applicable year. Level 3 reconciliations: (In thousands) Obligations of U.S. States and Political Subdivisions Equity Securities Total Investments Real Estate Acquired Balance at December 31, 2015 $ 1,228 $ 2,855 $ 4,083 $ 12,149 Total realized/unrealized gains (losses): Included in earnings and reported as net realized investment gains — 3,579 3,579 — Included in earnings and reported as losses incurred, net — — — (1,142 ) Purchases — 4,258 4,258 36,859 Sales (537 ) (6,424 ) (6,961 ) (36,118 ) Balance at December 31, 2016 $ 691 $ 4,268 $ 4,959 $ 11,748 (In thousands) Obligations of U.S. States and Political Subdivisions Equity Securities Total Investments Real Estate Acquired Balance at December 31, 2014 $ 1,846 $ 321 $ 2,167 $ 12,658 Total realized/unrealized gains (losses): Included in earnings and reported as losses incurred, net — — — (2,322 ) Purchases 7 2,534 2,541 34,624 Sales (625 ) — (625 ) (32,811 ) Balance at December 31, 2015 $ 1,228 $ 2,855 $ 4,083 $ 12,149 (In thousands) Obligations of U.S. States and Political Subdivisions Equity Securities Total Investments Real Estate Acquired Balance at December 31, 2013 $ 2,423 $ 321 $ 2,744 $ 13,280 Total realized/unrealized gains (losses): Included in earnings and reported as losses incurred, net — — — (4,129 ) Purchases 30 — 30 42,247 Sales (607 ) — (607 ) (38,740 ) Balance at December 31, 2014 $ 1,846 $ 321 $ 2,167 $ 12,658 |
Schedule of carrying value and fair value of financial liabilities measured on a recurring basis | The following table presents the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at December 31, 2016 and 2015 . The fair values of our 5% Notes, 2% Notes, 5.75% Notes, and 9% Debentures were based on observable market prices and the fair value of the FHLB Advance was estimated using discounted cash flows on current incremental borrowing rates for similar borrowing arrangements, and in all cases they are categorized as Level 2. See Note 7 - "Debt" for a description of the financial liabilities in the table below. December 31, 2016 December 31, 2015 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Financial liabilities: FHLB Advance $ 155,000 $ 151,905 n/a n/a 5% Notes 144,789 147,679 331,546 345,616 2% Notes 204,672 308,605 490,755 701,955 5.75% Notes 417,406 445,987 n/a n/a 9% Debentures 256,872 323,040 389,522 455,067 Total financial liabilities $ 1,178,739 $ 1,377,216 $ 1,211,823 $ 1,502,638 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Recent Accounting and Reporting Developments | Standard Summary of guidance Effects on financial statements and/or disclosures Presentation of Debt Issuance Costs • Requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. • Adopted March 31, 2016 with retrospective application to prior periods. • Does not impact the amortization method for these costs. • There was no material impact on the consolidated balance sheets, and no impact on our statements of operations. • For further information, see Note 7. "Debt." Accounting for Share-Based Compensation When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period • Requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. • Adopted March 31, 2016 with application to performance based awards granted in 2016. • Compensation cost should be recognized in the period in which it become probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. • There was no material impact on our consolidated financial statements. • If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. • For further information, see Note 15. "Share-based Compensation Plans" . Disclosures about Short-Duration Contracts • Requires expanded disclosures designed to provide additional insight into an insurance entity's ability to underwrite and anticipate costs associated with claims. • This standard is not considered applicable to our business and therefore we have not adopted these disclosure requirements. • Disclosures include information about incurred and paid claims development, on a net of reinsurance basis, for the number of years claims incurred typically remain outstanding not to exceed ten years. • Expanded disclosures also include more transparent information about significant changes in methodologies and assumptions used to estimate claims, and the timing, frequency, and severity of claims. Classification of Certain Cash Receipts and Cash Payments • Provides specific guidance on the presentation of certain cash flow items including, but not limited to, debt prepayment and debt issuance costs and proceeds from the settlement of insurance claims. • Adopted December 31, 2016 with application to prior periods. • Cash flows related to debt prepayment and debt issuance transactions have been reclassified as financing activities from operating activities. • For further information on the impact our transactions had on our cash and cash equivalents see our consolidated statements of cash flows . Financial Accounting Standards Board ("FASB") Standards Issued but not yet Adopted Standard Summary of guidance Effects on financial statements and/or disclosures Recognition and Measurement of Financial Assets and Financial Liabilities Issued January 2016 • Requires equity investments, except those accounted for under the equity method of accounting that have a readily determinable fair value to be measured at fair value with changes in fair value recognized in earnings. • Required effective date: January 1, 2018. • Equity investments that do not have readily determinable fair values may be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. A qualitative assessment for impairment is required for equity investments without readily determinable fair values. • The potential impact from the adoption of this guidance is not expected to have a material impact our consolidated balance sheets, consolidated statements of operations, or liquidity. • Requires recognition of a cumulative effect adjustment to retained earnings as of the beginning of the reporting period of adoption. • For further information on our current equity investments see Note 5. "Investments." Improvements to Employee Share-Based Compensation Accounting Issued March 2016 • Requires that, prospectively, all tax effects related to share-based compensation be made through the statement of operations at the time of settlement, rather than recognizing excess tax benefits within paid-in capital. • Required effective date: January 1, 2017. • Removes the requirement to delay recognition of a tax benefit until it reduces current taxes payable. This change is required to be applied on a modified retrospective basis. • We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements. • Requires all tax related cash flows resulting from share-based compensation to be reported as operating activities, a change from the existing requirement to present tax benefits as an inflow from financing activities and an outflow from operating activities. • Entities, for tax withholding purposes, will be allowed to withhold an amount of shares up to an employee's maximum individual tax rate (as opposed to the minimum statutory tax rate) in the relevant jurisdiction without resulting in liability classification of the award. Measurement of Credit Losses on Financial Statements Issued June 2016 • Requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial instruments. Entities are required to use a current expected credit loss ("CECL") methodology that incorporates their forecasts of future economic conditions, unless such forecast is not reasonable or supportable, in which case the entity will revert to historical loss experience. • Required effective date: January 1, 2020. • Amends existing guidance for available-for-sale fixed income securities to incorporate an allowance, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which the fair value is less than amortized cost. The guidance will allow for reversals of impairment losses in the event that the credit of an issuer improves. The length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. • We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements, but do not expect it to have a material impact. • Updated guidance is not prescriptive about certain aspects of estimating expected credit losses, including the specific methodology to use, and therefore will require significant judgment in application. The impact of the reclassification of debt issuance costs on our outstanding debt obligations as of December 31, 2015 is as follows. December 31, 2015 (In millions) As previously reported Adjustment As Adjusted 5% Notes $ 333.5 $ (2.0 ) $ 331.5 2% Notes 500.0 (9.2 ) 490.8 9% Debentures 389.5 — 389.5 Total long-term debt $ 1,223.0 $ (11.2 ) $ 1,211.8 |
Schedule of debt | Long-term debt as of December 31, 2016 and 2015 consisted of the following obligations. December 31, (In millions) 2016 2015 FHLB Advance $ 155.0 $ — 5% Notes 145.0 333.5 2% Notes 207.6 500.0 5.75% Notes 425.0 — 9% Debentures 256.9 389.5 Long-term debt, par value 1,189.5 1,223.0 Less: debt issuance costs 10.8 11.2 Long-term debt, carrying value $ 1,178.7 $ 1,211.8 |
Interest Payments Made | Interest payments, on a consolidated basis, for our debt obligations existing during 2016 and 2015 appear below. Years Ended December 31, (In millions) 2016 2015 5.375% Notes $ — $ 3.3 FHLB Advance 2.4 — 5% Notes 10.6 17.3 2% Notes 9.1 10.0 5.75% Notes — — 9% Debentures 27.4 35.1 Total interest payments $ 49.5 $ 65.7 |
Loss Reserves (Tables)
Loss Reserves (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Insurance Loss Reserves [Abstract] | |
Reconciliation of beginning and ending loss reserves | The following table provides a reconciliation of beginning and ending loss reserves for each of the past three years: (In thousands) 2016 2015 2014 Reserve at beginning of year $ 1,893,402 $ 2,396,807 $ 3,061,401 Less reinsurance recoverable 44,487 57,841 64,085 Net reserve at beginning of year 1,848,915 2,338,966 2,997,316 Losses incurred: Losses and LAE incurred in respect of default notices received in: Current year 387,815 453,849 596,436 Prior years (1) (147,658 ) (110,302 ) (100,359 ) Total losses incurred 240,157 343,547 496,077 Losses paid: Losses and LAE paid in respect of default notices received in: Current year 14,823 25,980 32,919 Prior years 689,258 823,058 1,121,508 Reinsurance terminations (2) (3,329 ) (15,440 ) — Total losses paid 700,752 833,598 1,154,427 Net reserve at end of year 1,388,320 1,848,915 2,338,966 Plus reinsurance recoverables 50,493 44,487 57,841 Reserve at end of year $ 1,438,813 $ 1,893,402 $ 2,396,807 (1) A negative number for prior year losses incurred indicates a redundancy of prior year loss reserves. See table below for more information about prior year loss development. (2) In a termination, the reinsurance agreement is cancelled, with no future premium ceded and funds for any incurred but unpaid losses transferred to us. The transferred funds result in an increase in our investment portfolio (including cash and cash equivalents) and a decrease in net losses paid (reduction to losses incurred). In addition, there is an offsetting decrease in the reinsurance recoverable (increase in losses incurred), and thus there is no net impact to losses incurred. (See Note 9 – “Reinsurance” ) |
Prior year development of the reserves | The prior year development of the reserves in 2016 , 2015 and 2014 is reflected in the table below. (In millions) 2016 2015 2014 Decrease in estimated claim rate on primary defaults $ (148 ) $ (141 ) $ (43 ) Increase (decrease) in estimated severity on primary defaults 9 43 (35 ) Change in estimates related to pool reserves, LAE reserves, reinsurance and other (9 ) (12 ) (22 ) Total prior year loss development (1) $ (148 ) $ (110 ) $ (100 ) (1) A negative number for prior year loss development indicates a redundancy of prior year loss reserves. |
Rollforward of primary default inventory | A rollforward of our primary default inventory for the years ended December 31, 2016 , 2015 and 2014 appears in the table below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers. 2016 2015 2014 Default inventory at beginning of year 62,633 79,901 103,328 New Notices 67,434 74,315 88,844 Cures (65,516 ) (73,610 ) (87,278 ) Paids (including those charged to a deductible or captive) (12,367 ) (16,004 ) (23,494 ) Rescissions and denials (629 ) (848 ) (1,306 ) Other items removed from inventory (1,273 ) (1,121 ) (193 ) Default inventory at end of year 50,282 62,633 79,901 |
Aging of the primary default inventory | The percentage of loans that have been in default for 12 or more consecutive months and the number of loans in our primary claims received inventory have been affected by our suspended rescissions and the resolution of certain of those rescissions discussed below and in Note 17 - "Litigation and Contingencies" . The number of consecutive months that a borrower has been delinquent is shown in the table below. Consecutive months in default December 31, 2016 2015 2014 3 months or less 12,194 24 % 13,053 21 % 15,319 19 % 4 - 11 months 13,450 27 % 15,763 25 % 19,710 25 % 12 months or more (1) 24,638 49 % 33,817 54 % 44,872 56 % Total primary default inventory 50,282 100 % 62,633 100 % 79,901 100 % Primary claims received inventory included in ending default inventory 1,385 3 % 2,769 4 % 4,746 6 % (1) Approximately 47% , 50% and 53% of the primary default inventory in default for 12 consecutive months or more has been in default for at least 36 consecutive months as of December 31, 2016 , 2015 and 2014 , respectively. |
Number of payments delinquent | The number of payments that a borrower is delinquent is shown in the table below. Number of payments delinquent December 31, 2016 2015 2014 3 payments or less 18,419 36 % 20,360 33 % 23,253 29 % 4 - 11 payments 12,892 26 % 15,092 24 % 19,427 24 % 12 payments or more 18,971 38 % 27,181 43 % 37,221 47 % Total primary default inventory 50,282 100 % 62,633 100 % 79,901 100 % |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Reinsurance Disclosures [Abstract] | |
Effect of reinsurance agreements on premiums earned and losses incurred | The effect of all reinsurance agreements on premiums earned and losses incurred, which is reflected in the consolidated statements of operations, is as follows: Years ended December 31, (In thousands) 2016 2015 2014 Premiums earned: Direct $ 1,058,545 $ 997,892 $ 950,973 Assumed 662 1,178 1,653 Ceded (133,981 ) (102,848 ) (108,255 ) Net premiums earned $ 925,226 $ 896,222 $ 844,371 Losses incurred: Direct $ 273,207 $ 369,680 $ 524,051 Assumed 1,138 1,552 2,012 Ceded (34,188 ) (27,685 ) (29,986 ) Net losses incurred $ 240,157 $ 343,547 $ 496,077 |
Quota share reinsurance, excluding captive agreements | Following is a summary of our quota share reinsurance agreements, excluding captive agreements, for 2016 , 2015 and 2014 . Years ended December 31, (In thousands) 2016 2015 2014 2015 QSR Transaction (Effective July 1, 2015) Ceded premiums written, net of profit commission (1) $ 125,460 $ 52,588 n/a Ceded premiums earned, net of profit commission (1) 125,460 52,588 n/a Ceded losses incurred 30,201 11,424 n/a Ceding commissions (2) 47,629 20,582 n/a Profit commission 112,685 50,322 n/a 2013 QSR Transaction Ceded premiums written, net of profit commission n/a $ (11,355 ) (3) $ 100,031 Ceded premiums earned, net of profit commission n/a 35,999 (3) 88,528 Ceded losses incurred n/a 6,060 15,163 Ceding commissions (2) n/a 10,235 (3) 37,833 Profit commission n/a 62,525 (3) 89,133 (1) As of July 1, 2015, premiums are ceded on an earned and received basis as defined in our 2015 QSR Transaction. (2) Ceding commissions are reported within Other underwriting and operating expenses, net on the consolidated statements of operations. (3) The year ended December 31, 2015 includes the non-recurring impact of commuting our 2013 QSR Transaction. The commutation had no impact on ceded losses incurred. |
Other Comprehensive (Loss) In37
Other Comprehensive (Loss) Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other comprehensive income | The pretax components of our other comprehensive (loss) income and related income tax benefit (expense) for the years ended December 31, 2016 , 2015 and 2014 are included in the table below: (In thousands) 2016 2015 2014 Net unrealized investment (losses) gains arising during the year $ (5,425 ) $ (33,718 ) $ 91,782 Income tax benefit (expense) 1,776 11,738 (32,017 ) Valuation allowance (1) — 62,383 31,374 Net of taxes (3,649 ) 40,403 91,139 Net changes in benefit plan assets and obligations (14,799 ) (12,818 ) (52,112 ) Income tax benefit 5,179 4,487 18,239 Valuation allowance (1) — (7,383 ) (18,239 ) Net of taxes (9,620 ) (15,714 ) (52,112 ) Net changes in unrealized foreign currency translation adjustment (1,463 ) (5,699 ) (4,067 ) Income tax benefit 512 2,000 1,425 Valuation allowance (1) — (529 ) — Net of taxes (951 ) (4,228 ) (2,642 ) Total other comprehensive (loss) income (21,687 ) (52,235 ) 35,603 Total income tax benefit, net of valuation allowance 7,467 72,696 782 Total other comprehensive (loss) income, net of tax $ (14,220 ) $ 20,461 $ 36,385 (1) See Note 12 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets. |
Reclassification out of accumulated other comprehensive income | The pretax and related income tax (expense) benefit components of the amounts reclassified from our accumulated other comprehensive loss to our consolidated statements of operations for the years ended December 31, 2016 , 2015 and 2014 are included in the table below: (In thousands) 2016 2015 2014 Reclassification adjustment for net realized gains (losses) included in net income (1) $ 6,207 $ 11,693 $ (6,816 ) Income tax (expense) benefit (2,050 ) (4,076 ) 2,402 Valuation allowance (2) — 3,635 (2,502 ) Net of taxes 4,157 11,252 (6,916 ) Reclassification adjustment related to benefit plan assets and obligations (3) 1,480 2,184 6,930 Income tax expense (518 ) (764 ) (2,425 ) Valuation allowance (2) — 574 2,425 Net of taxes 962 1,994 6,930 Reclassification adjustment related to foreign currency (4) 1,467 — — Income tax expense (513 ) — — Net of taxes 954 — — Total reclassifications 9,154 13,877 114 Total income tax expense, net of valuation allowance (3,081 ) (631 ) (100 ) Total reclassifications, net of tax $ 6,073 $ 13,246 $ 14 (1) Increases (decreases) Net realized investment gains on the consolidated statements of operations. (2) See Note 12 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets. (3) Decreases (increases) Other underwriting and operating expenses, net on the consolidated statements of operations. (4) Increases (decreases) Other revenue on the consolidated statements of operations. |
Accumulated other comprehensive income (loss) | A rollforward of accumulated other comprehensive loss ("AOCL") for the years ended December 31, 2016 , 2015 , and 2014 , including amounts reclassified from accumulated other comprehensive loss, are included in the table below. (In thousands) Net unrealized gains and losses on available-for-sale securities Net benefit plan assets and obligations recognized in shareholders' equity Net unrealized foreign currency translation Total AOCL Balance, December 31, 2013, net of tax $ (148,690 ) $ 23,174 $ 7,790 $ (117,726 ) Other comprehensive income (loss) before reclassifications 84,223 (45,182 ) (2,642 ) 36,399 Less: Amounts reclassified from AOCL (6,916 ) 6,930 — 14 Balance, December 31, 2014, net of tax (57,551 ) (28,938 ) 5,148 (81,341 ) Other comprehensive income (loss) before reclassifications 51,655 (13,720 ) (4,228 ) 33,707 Less: Amounts reclassified from AOCL 11,252 1,994 — 13,246 Balance, December 31, 2015, net of tax (17,148 ) (44,652 ) 920 (60,880 ) Other comprehensive income (loss) before reclassifications 508 (8,658 ) 3 (8,147 ) Less: Amounts reclassified from AOCL 4,157 962 954 6,073 Balance, December 31, 2016, net of tax $ (20,797 ) $ (54,272 ) $ (31 ) (75,100 ) |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of net periodic benefit cost | The following tables provide the components of aggregate annual net periodic benefit cost for each of the years ended December 31, 2016 , 2015 , and 2014 and changes in the benefit obligation and the funded status of the pension, supplemental executive retirement and other postretirement benefit plans as recognized in the consolidated balance sheets as of December 31, 2016 and 2015 . Components of Net Periodic Benefit Cost Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2014 12/31/2016 12/31/2015 12/31/2014 1. Company Service Cost $ 9,130 $ 10,256 $ 8,565 $ 751 $ 833 $ 659 2. Interest Cost 15,906 15,847 15,987 704 697 653 3. Expected Return on Assets (19,508 ) (21,109 ) (21,030 ) (4,886 ) (4,991 ) (4,648 ) 4. Other Adjustments — — — — — — Subtotal 5,528 4,994 3,522 (3,431 ) (3,461 ) (3,336 ) 5. Amortization of : a. Net Transition Obligation/(Asset) — — — — — — b. Net Prior Service Cost/(Credit) (687 ) (845 ) (930 ) (6,649 ) (6,649 ) (6,649 ) c. Net Losses/(Gains) 5,856 5,485 1,083 — (175 ) (435 ) Total Amortization 5,169 4,640 153 (6,649 ) (6,824 ) (7,084 ) 6. Net Periodic Benefit Cost 10,697 9,634 3,675 (10,080 ) (10,285 ) (10,420 ) 7. Cost of settlements or curtailments 1,277 3,172 302 — — — 8. Total Expense for Year $ 11,974 $ 12,806 $ 3,977 $ (10,080 ) $ (10,285 ) $ (10,420 ) |
Development of funded status | Development of Funded Status Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 Actuarial Value of Benefit Obligations 1. Measurement Date 12/31/2016 12/31/2015 12/31/2016 12/31/2015 2. Accumulated Benefit Obligation $ 360,423 $ 338,450 $ 17,378 $ 16,423 Funded Status/Asset (Liability) on the Consolidated Balance Sheet 1. Projected Benefit Obligation $ (369,808 ) $ (349,483 ) $ (17,378 ) $ (16,423 ) 2. Plan Assets at Fair Value 360,900 350,107 70,408 65,568 3. Funded Status - Overfunded/Asset N/A $ 624 $ 53,030 $ 49,145 4. Funded Status - Underfunded/Liability (8,908 ) N/A N/A N/A Accumulated Other Comprehensive Income (Loss) Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. Net Actuarial (Gain)/Loss $ 103,861 $ 95,636 $ (6,088 ) $ (5,311 ) 2. Net Prior Service Cost/(Credit) (2,286 ) (2,989 ) (11,991 ) (18,640 ) 3. Net Transition Obligation/(Asset) — — — — 4. Total at Year End $ 101,575 $ 92,647 $ (18,079 ) $ (23,951 ) |
Change in projected benefit obligation | The changes in the projected benefit obligation are as follows: Change in Projected Benefit/Accumulated Benefit Obligation Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. Benefit Obligation at Beginning of Year $ 349,483 $ 379,324 $ 16,423 $ 18,225 2. Company Service Cost 9,130 10,256 751 833 3. Interest Cost 15,906 15,847 704 697 4. Plan Participants' Contributions — — 408 361 5. Net Actuarial (Gain)/Loss due to Assumption Changes 14,450 (24,118 ) 497 (2,083 ) 6. Net Actuarial (Gain)/Loss due to Plan Experience 5,428 7,155 357 (397 ) 7. Benefit Payments from Fund (1) (21,831 ) (32,646 ) (1,678 ) (1,147 ) 8. Benefit Payments Directly by Company (2,669 ) (7,661 ) — — 9. Plan Amendments 16 19 — — 10. Other Adjustment (105 ) 1,307 (84 ) (66 ) 11. Benefit Obligation at End of Year $ 369,808 $ 349,483 $ 17,378 $ 16,423 (1) Includes lump sum payments of $11.2 million and $22.4 million in 2016 and 2015, respectively, from our pension plan to eligible participants, which were former employees with vested benefits. |
Change in plan assets | The changes in the fair value of the net assets available for plan benefits are as follows: Change in Plan Assets Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. Fair Value of Plan Assets at Beginning of Year $ 350,107 $ 378,701 $ 65,568 $ 66,940 2. Company Contributions 11,369 17,311 — — 3. Plan Participants' Contributions — — 408 361 4. Benefit Payments from Fund (21,831 ) (32,646 ) (1,678 ) (1,147 ) 5. Benefit Payments paid directly by Company (2,669 ) (7,661 ) — — 6. Actual Return on Assets 23,924 (5,094 ) 6,518 (225 ) 7. Other Adjustment — (504 ) (408 ) (361 ) 8. Fair Value of Plan Assets at End of Year $ 360,900 $ 350,107 $ 70,408 $ 65,568 |
Change in accumulated other comprehensive income (AOCI) | Change in Accumulated Other Comprehensive Income (Loss) ("AOCI") Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. AOCI in Prior Year $ 92,647 $ 89,390 $ (23,951 ) $ (33,511 ) 2. Increase/(Decrease) in AOCI a. Recognized during year - Prior Service (Cost)/Credit 687 845 6,649 6,649 b. Recognized during year - Net Actuarial (Losses)/Gains (5,856 ) (5,485 ) — 175 c. Occurring during year - Prior Service Cost 16 19 — — d. Occurring during year - Net Actuarial Losses/(Gains) 15,358 11,050 (777 ) 2,736 e. Occurring during year - Net Settlement Losses/(Gains) (1,277 ) (3,172 ) — — f. Other adjustments — — — — 3. AOCI in Current Year $ 101,575 $ 92,647 $ (18,079 ) $ (23,951 ) |
Amortizations expected to be recognized during next fiscal year | Amortizations Expected to be Recognized During Next Fiscal Year Ending Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2017 12/31/2017 1. Amortization of Net Transition Obligation/(Asset) $ — $ — 2. Amortization of Prior Service Cost/(Credit) (428 ) (6,649 ) 3. Amortization of Net Losses/(Gains) 6,141 — |
Actuarial assumptions | The projected benefit obligations, net periodic benefit costs and accumulated postretirement benefit obligation for the plans were determined using the following weighted average assumptions. Actuarial Assumptions Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits 12/31/2016 12/31/2015 12/31/2016 12/31/2015 Weighted-Average Assumptions Used to Determine Benefit Obligations at year end 1. Discount Rate 4.30 % 4.65 % 3.95 % 4.30 % 2. Rate of Compensation Increase 3.00 % 3.00 % N/A N/A Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Year 1. Discount Rate 4.65 % 4.25 % 4.30 % 4.00 % 2. Expected Long-term Return on Plan Assets 5.75 % 5.75 % 7.50 % 7.50 % 3. Rate of Compensation Increase 3.00 % 3.00 % N/A N/A Assumed Health Care Cost Trend Rates at year end 1. Health Care Cost Trend Rate Assumed for Next Year N/A N/A 6.50 % 7.00 % 2. Rate to Which the Cost Trend Rate is Assumed to Decline (Ultimate Trend Rate) N/A N/A 5.00 % 5.00 % 3. Year That the Rate Reaches the Ultimate Trend Rate N/A N/A 2020 2020 |
Year-end asset allocations of the plans | The year-end asset allocations of the plans are as follows: Plan Assets Pension Plan Other Postretirement Benefits 12/31/2016 12/31/2015 12/31/2016 12/31/2015 1. Equity Securities 23 % 20 % 100 % 100 % 2. Debt Securities 77 % 80 % — % — % 3. Total 100 % 100 % 100 % 100 % |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |
Schedule of investment allocation strategies | The equity investments utilize combinations of mutual funds, ETFs, and pooled equity account structures focused on the following strategies: Strategy Objective Investment types Return seeking growth Funded ratio improvement over the long term ● Global quality growth ● Global low volatility Return seeking bridge Downside protection in the event of a declining equity market ● Enduring asset ● Durable company |
Minimum and maximum allocation ranges for fixed income securities and equity securities | The primary focus in developing asset allocation ranges for the portfolio is the assessment of the portfolio's investment objectives and the level of risk that is acceptable to obtain those objectives. To achieve these goals the minimum and maximum allocation ranges for fixed income securities and equity securities are: Minimum Maximum Equities (long only) 70 % 100 % Real estate 0 % 15 % Commodities 0 % 10 % Fixed income/Cash 0 % 10 % |
Actual and estimated future contributions and actual and estimated future benefit payments | The following tables show the current and estimated future contributions and benefit payments. Company Contributions Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2016 Company Contributions for the Year Ending: 1. Current $ 11,369 $ — 2. Current + 1 9,500 — Benefit Payments (Total) Pension and Supplemental Executive Retirement Plans Other Postretirement Benefits (In thousands) 12/31/2016 12/31/2016 Actual Benefit Payments for the Year Ending: 1. Current $ 24,500 $ 1,355 Expected Benefit Payments for the Year Ending: 2. Current + 1 21,831 847 3. Current + 2 23,439 978 4. Current + 3 26,927 1,068 5. Current + 4 27,199 1,257 6. Current + 5 27,151 1,410 7. Current + 6 - 10 146,471 8,574 |
Effect of a 1% change in the health care trend rate assumption | A 1 percentage point change in the health care trend rate assumption would have the following effects on other postretirement benefits: (In thousands) 1-Percentage Point Increase 1-Percentage Point Decrease Effect on total service and interest cost components $ 237 $ (205 ) Effect on postretirement benefit obligation 2,382 (2,102 ) |
Pension Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |
Fair value of plan assets | The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2016 and 2015 . There were no securities that utilized Level 3 inputs. Pension Plan Assets at Fair Value as of December 31, 2016 (In thousands) Level 1 Level 2 Total Domestic Mutual Funds $ 11,805 $ — $ 11,805 Corporate Bonds — 178,412 178,412 U.S. Government Securities 6,761 354 7,115 Municipal Bonds — 63,492 63,492 Foreign Bonds — 27,917 27,917 ETFs 5,694 — 5,694 Pooled Equity Accounts — 66,465 66,465 Total Assets at fair value $ 24,260 $ 336,640 $ 360,900 Pension Plan Assets at Fair Value as of December 31, 2015 (In thousands) Level 1 Level 2 Total Domestic Mutual Funds $ 1,442 $ — $ 1,442 Corporate Bonds — 188,332 188,332 U.S. Government Securities 3,133 497 3,630 Municipal Bonds — 61,206 61,206 Foreign Bonds — 25,251 25,251 ETFs 5,676 — 5,676 Pooled Equity Accounts — 64,570 64,570 Total Assets at fair value $ 10,251 $ 339,856 $ 350,107 |
Other Postretirement Benefit Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |
Fair value of plan assets | The following table sets forth the other postretirement benefits plan assets at fair value as of December 31, 2016 and 2015 . All are Level 1 assets. Other Postretirement Benefits Plan Assets at Fair Value as of December 31, 2016 (In thousands) Level 1 Total Domestic Mutual Funds $ 54,426 $ 54,426 International Mutual Funds 15,982 15,982 Total Assets at fair value $ 70,408 $ 70,408 Other Postretirement Benefits Plan Assets at Fair Value as of December 31, 2015 (In thousands) Level 1 Total Domestic Mutual Funds $ 49,887 $ 49,887 International Mutual Funds 15,681 15,681 Total Assets at fair value $ 65,568 $ 65,568 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Net deferred tax assets and liabilities | Net deferred tax assets and liabilities as of December 31, 2016 and 2015 are as follows: (In thousands) 2016 2015 Total deferred tax assets $ 636,449 $ 791,286 Total deferred tax liabilities (28,794 ) (29,206 ) Net deferred tax asset $ 607,655 $ 762,080 |
Components of the net deferred tax asset (liability) | The components of the net deferred tax asset as of December 31, 2016 and 2015 are as follows: (In thousands) 2016 2015 Unearned premium reserves $ 40,153 $ 33,262 Benefit plans (12,350 ) (14,283 ) Federal net operating loss 520,812 680,975 Loss reserves 10,883 15,536 Unrealized depreciation in investments 11,211 8,904 Mortgage investments 17,751 17,386 Deferred compensation 12,517 12,927 Other, net 6,678 7,373 Net deferred tax asset 607,655 762,080 |
Summary of valuation allowance | The following table provides a rollforward of our deferred tax asset valuation allowance for the year ended December 31, 2015. (In millions) For the year ended December 31, 2015 Balance at December 31, 2014 $ 902.3 Reduction in tax provision in current year (161.1 ) Amounts recorded in other comprehensive income in the current year 6.3 Change in valuation allowance for deferred tax assets in the current year (154.8 ) Reduction in tax provision for amounts to be realized in future years (686.7 ) Amounts recorded in other comprehensive income to be realized in future years (60.8 ) Change in valuation allowance for deferred tax assets realizable in future years (747.5 ) Balance at December 31, 2015 $ — |
Tax provision (benefit) | The effect of the change in valuation allowance on the provision for (benefit from) income taxes was as follows: (In thousands) 2016 2015 2014 Provision for income taxes before valuation allowance $ 172,197 $ 163,497 $ 91,607 Change in valuation allowance — (161,158 ) (88,833 ) Reversal of the valuation allowance — (686,652 ) — Provision for (benefit from) income taxes $ 172,197 $ (684,313 ) $ 2,774 |
Components of the provision for (benefit from) income taxes | The following summarizes the components of the provision for (benefit from) income taxes: (In thousands) 2016 2015 2014 Current Federal $ 9,470 $ 8,067 $ 2,391 Deferred Federal 160,657 (686,652 ) 1 Other 2,070 (5,728 ) 382 Provision for (benefit from) income taxes $ 172,197 $ (684,313 ) $ 2,774 |
Reconciliation of federal statutory income tax rate | The reconciliation of the federal statutory income tax rate to the effective tax provision (benefit) rate is as follows: 2016 2015 2014 Federal statutory income tax rate 35.0 % 35.0 % 35.0 % Valuation allowance — % (173.8 )% (34.9 )% Tax exempt municipal bond interest (1.9 )% (0.8 )% (0.4 )% Other, net 0.4 % (0.7 )% 1.4 % Effective tax provision (benefit) rate 33.5 % (140.3 )% 1.1 % |
Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (In thousands) 2016 2015 2014 Balance at beginning of year $ 107,120 $ 106,230 $ 105,366 Additions based on tax positions related to the current year — — — Additions for tax positions of prior years 1,125 890 864 Reductions for tax positions of prior years — — — Settlements — — — Balance at end of year $ 108,245 $ 107,120 $ 106,230 |
Statutory Information (Tables)
Statutory Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Statutory Capital [Abstract] | |
Summary of amounts disclosed under statutory accounting practices | The statutory net income (loss), policyholders' surplus and contingency reserve liability of the insurance subsidiaries of our holding company are show in the following table. The statutory net loss in 2015 was driven by the dissolution of an MGIC non-insurance subsidiary. The surplus amounts included in the following table are the combined policyholders' surplus of our insurance operations as utilized in our risk-to-capital calculations. As of and for the Years Ended December 31, (In thousands) 2016 2015 2014 Statutory net income (loss) $ 106,326 $ (72,767 ) (1) $ 13,203 Statutory policyholders' surplus 1,506,475 1,608,214 (1) 1,585,164 Contingency reserve 1,360,088 826,706 318,247 (1) The dissolution of an MGIC non-insurance subsidiary in 2015 had no impact on statutory surplus as the equity value of the investment was fully reflected in surplus as an unrealized loss prior to 2015. The surplus contributions made to MGIC and dividends paid by MGIC and distributions from other insurance subsidiaries to us, are shown in the table below. Years Ended December 31, (In thousands) 2016 2015 2014 Additions to the surplus of MGIC from parent company funds $ 36,025 — — Dividends paid by MGIC to the parent company $ 64,000 — — Distributions from other insurance subsidiaries to the parent company $ 52,001 38,500 — |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of restricted stock or restricted stock unit activity | A summary of restricted stock or restricted stock unit (collectively called “restricted stock”) activity during 2016 is as follows: Weighted Average Grant Date Fair Market Value Shares Restricted stock outstanding at December 31, 2015 $ 7.97 3,319,467 Granted 5.66 1,689,300 Vested 7.00 (1,707,711 ) Forfeited 4.24 (154,384 ) Restricted stock outstanding at December 31, 2016 $ 7.44 3,146,672 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Minimum future operating lease payments | At December 31, 2016 , minimum future operating lease payments are as follows (in thousands): 2017 $ 665 2018 676 2019 688 2020 490 2021 and thereafter 46 Total $ 2,565 |
Unaudited Quarterly Financial43
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited quarterly financial data | 2016: Quarter Full (In thousands, except per share data) First Second Third Fourth Year Net premiums earned $ 221,341 $ 231,456 $ 237,376 $ 235,053 $ 925,226 Investment income, net of expenses 27,809 27,248 27,515 28,094 110,666 Realized gains 3,056 836 5,092 (52 ) 8,932 Other revenue 6,373 3,994 3,867 3,425 17,659 Loss incurred, net 85,012 46,590 60,897 47,658 240,157 Underwriting and other expenses, net 56,439 49,837 53,981 56,824 217,081 Loss on debt extinguishment 13,440 1,868 75,223 — 90,531 Provision for income tax 34,497 56,018 27,131 54,551 172,197 Net income 69,191 109,221 56,618 107,487 342,517 Income per share (a) (b) : Basic 0.20 0.32 0.16 0.31 1.00 Diluted 0.17 0.26 0.14 0.28 0.86 2015: Quarter Full (In thousands, except per share data) First Second Third Fourth Year Net premiums earned $ 217,288 $ 213,508 $ 239,234 $ 226,192 $ 896,222 Investment income, net of expenses 24,120 25,756 25,939 27,926 103,741 Realized (losses) gains 26,327 166 640 1,228 28,361 Other revenue 2,480 3,699 3,698 3,087 12,964 Loss incurred, net 81,785 90,238 76,458 95,066 343,547 Underwriting and other expenses, net 51,969 37,915 65,805 53,858 209,547 Loss on debt extinguishment — — — 507 507 Provision for (benefit from) income tax 3,385 1,322 (695,604 ) 6,584 (684,313 ) Net income 133,076 113,654 822,852 102,418 1,172,000 Income per share (a) (b) : Basic 0.39 0.33 2.42 0.30 3.45 Diluted 0.32 0.28 1.78 0.24 2.60 (a) Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of the quarterly per share data may not equal the per share data for the year. (b) In periods where convertible debt instruments are dilutive to earnings per share the “if-converted” method of computing diluted EPS requires an interest expense adjustment, net of tax, to net income available to shareholders. The interest expense adjustment was not tax effected for the first and second quarter of 2015 due to our valuation allowance on deferred tax assets. See Note 4 – “Earnings Per Share” for further discussion on our calculation of diluted EPS. |
Nature of Business (Details)
Nature of Business (Details) $ in Billions | Dec. 31, 2016USD ($) |
Nature of Business [Abstract] | |
Direct domestic primary insurance in force | $ 182 |
Direct domestic primary risk in force | $ 47.2 |
Significant Accounting Polici45
Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)Payment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Home office and equipment [Abstract] | |||
Accumulated depreciation of home office and equipment | $ 30,600,000 | $ 26,100,000 | $ 54,900,000 |
Depreciation expense of home office and equipment | $ 4,600,000 | 3,200,000 | 2,200,000 |
Minimum number of payments past due to be in default | Payment | 2 | ||
Change in premium deficiency reserve | $ 0 | 23,751,000 | 24,710,000 |
Threshold period for amortization | 1 year | ||
Maximum age for qualified employees for both medical and dental benefits | 65 years | ||
Related party transaction amount | $ 0 | $ 0 | $ 0 |
Minimum | |||
Home office and equipment [Abstract] | |||
Estimated useful life | 3 years | ||
Award vesting period | 1 year | ||
Maximum | |||
Home office and equipment [Abstract] | |||
Estimated useful life | 45 years | ||
Award vesting period | 3 years |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||||||||||
Participating securities (as shares) | 100 | 100 | 100 | ||||||||
Basic earnings per share [Abstract] | |||||||||||
Net income | $ 107,487 | $ 56,618 | $ 109,221 | $ 69,191 | $ 102,418 | $ 822,852 | $ 113,654 | $ 133,076 | $ 342,517 | $ 1,172,000 | $ 251,949 |
Weighted average common shares outstanding - basic (in shares) | 342,890 | 339,552 | 338,523 | ||||||||
Basic income per share (in dollars per share) | $ 0.31 | $ 0.16 | $ 0.32 | $ 0.20 | $ 0.30 | $ 2.42 | $ 0.33 | $ 0.39 | $ 1 | $ 3.45 | $ 0.74 |
Diluted earnings per share [Abstract] | |||||||||||
Net income | $ 107,487 | $ 56,618 | $ 109,221 | $ 69,191 | $ 102,418 | $ 822,852 | $ 113,654 | $ 133,076 | $ 342,517 | $ 1,172,000 | $ 251,949 |
Diluted income available to common shareholders | $ 370,883 | $ 1,214,942 | $ 264,146 | ||||||||
Weighted-average shares - Basic (in shares) | 342,890 | 339,552 | 338,523 | ||||||||
Effect of dilutive securities [Abstract] | |||||||||||
Weighted-average shares - Diluted (in shares) | 431,992 | 468,039 | 413,522 | ||||||||
Diluted income per share (in dollars per share) | $ 0.28 | $ 0.14 | $ 0.26 | $ 0.17 | $ 0.24 | $ 1.78 | $ 0.28 | $ 0.32 | $ 0.86 | $ 2.60 | $ 0.64 |
Antidilutive securities (in shares) | 0 | 0 | 54,500 | ||||||||
Federal statutory income tax rate (in hundredths) | 35.00% | 35.00% | 35.00% | ||||||||
2% Convertible Senior Notes due 2020 | |||||||||||
Diluted earnings per share [Abstract] | |||||||||||
Dilutive securities | $ 6,111 | $ 7,928 | $ 12,197 | ||||||||
Effect of dilutive securities [Abstract] | |||||||||||
Dilutive securities (in shares) | 54,450 | 71,917 | 71,917 | ||||||||
Stated interest rate (in hundredths) | 2.00% | 2.00% | |||||||||
5% Convertible Senior Notes due 2017 | |||||||||||
Diluted earnings per share [Abstract] | |||||||||||
Dilutive securities | $ 6,362 | $ 12,228 | $ 0 | ||||||||
Effect of dilutive securities [Abstract] | |||||||||||
Dilutive securities (in shares) | 13,107 | 25,603 | 0 | ||||||||
Stated interest rate (in hundredths) | 5.00% | 5.00% | |||||||||
9% Convertible Junior Subordinated Debentures due 2063 | |||||||||||
Diluted earnings per share [Abstract] | |||||||||||
Dilutive securities | $ 15,893 | $ 22,786 | $ 0 | ||||||||
Effect of dilutive securities [Abstract] | |||||||||||
Dilutive securities (in shares) | 20,075 | 28,854 | 0 | ||||||||
Stated interest rate (in hundredths) | 9.00% | 9.00% | |||||||||
Unvested Restricted Stock Units | |||||||||||
Effect of dilutive securities [Abstract] | |||||||||||
Dilutive securities - Share based compensation (in shares) | 1,470 | 2,113 | 3,082 |
Investments (Details)
Investments (Details) | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2016 | Dec. 31, 2016USD ($)security | Dec. 31, 2015USD ($)security | Dec. 31, 2014USD ($) | |
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | $ 4,717,211,000 | $ 4,684,148,000 | ||
Total at end of period | 4,685,222,000 | 4,657,561,000 | ||
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract] | ||||
Fair Value | 7,128,000 | 5,645,000 | ||
Total Investment Portfolio [Abstract] | ||||
Amortized Cost | 4,724,355,000 | 4,689,773,000 | ||
Gross Unrealized Gains | 28,628,000 | 41,273,000 | ||
Gross Unrealized Losses | (60,633,000) | (67,840,000) | ||
Fair Value | $ 4,692,350,000 | 4,663,206,000 | ||
Collateral, principal balance of FHLB (as a percent) | 102.00% | 102.00% | ||
Collateral, principal balance of FHLB | $ 164,400,000 | |||
Maturities, Amortized Cost [Abstract] | ||||
Due in one year or less | 433,464,000 | |||
Due after one year through five years | 1,211,034,000 | |||
Due after five years through ten years | 1,157,091,000 | |||
Due after ten years | 1,176,177,000 | |||
Total debt securities with single maturity date | 3,977,766,000 | |||
Total at end of period | 4,717,211,000 | 4,684,148,000 | ||
Maturities, Fair Value [Abstract] | ||||
Due in one year or less | 433,770,000 | |||
Due after one year through five years | 1,212,650,000 | |||
Due after five years through ten years | 1,139,552,000 | |||
Due after ten years | 1,174,484,000 | |||
Total debt securities with single maturity date | 3,960,456,000 | |||
Total at end of period | 4,685,222,000 | 4,657,561,000 | ||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 2,370,345,000 | 2,209,765,000 | ||
12 months or greater | 294,916,000 | 491,195,000 | ||
Total investment portfolio | 2,665,261,000 | 2,700,960,000 | ||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (50,915,000) | (49,346,000) | ||
12 months or greater | (9,718,000) | (18,494,000) | ||
Total investment portfolio | $ (60,633,000) | $ (67,840,000) | ||
Number of securities in unrealized loss position | security | 607 | 303 | ||
For securities in an unrealized loss position, percentage of fair value to amortized cost (in hundredths) | 98.00% | |||
For securities in an unrealized loss position, percentage backed by the U.S. Government (in hundredths) | 14.00% | |||
Recognized other than temporary impairments | $ 0 | $ 0 | $ 144,000 | |
Assets held by insurance regulatory requirements | 13,600,000 | 18,900,000 | ||
Total debt securities | ||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | 4,717,211,000 | 4,684,148,000 | ||
Gross Unrealized Gains | 28,620,000 | 41,235,000 | ||
Gross Unrealized Losses | (60,609,000) | (67,822,000) | ||
Total at end of period | 4,685,222,000 | 4,657,561,000 | ||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 4,685,222,000 | 4,657,561,000 | ||
Maturities, Amortized Cost [Abstract] | ||||
Total at end of period | 4,717,211,000 | 4,684,148,000 | ||
Maturities, Fair Value [Abstract] | ||||
Total at end of period | 4,685,222,000 | 4,657,561,000 | ||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | 73,847,000 | 160,393,000 | ||
Gross Unrealized Gains | 407,000 | 2,133,000 | ||
Gross Unrealized Losses | (724,000) | (1,942,000) | ||
Total at end of period | 73,530,000 | 160,584,000 | ||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 73,530,000 | 160,584,000 | ||
Maturities, Amortized Cost [Abstract] | ||||
Total at end of period | 73,847,000 | 160,393,000 | ||
Maturities, Fair Value [Abstract] | ||||
Total at end of period | 73,530,000 | 160,584,000 | ||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 48,642,000 | 60,548,000 | ||
12 months or greater | 0 | 1,923,000 | ||
Total investment portfolio | 48,642,000 | 62,471,000 | ||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (724,000) | (1,467,000) | ||
12 months or greater | 0 | (475,000) | ||
Total investment portfolio | (724,000) | (1,942,000) | ||
Obligations of U.S. states and political subdivisions | ||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | 2,147,458,000 | 1,766,407,000 | ||
Gross Unrealized Gains | 20,983,000 | 33,410,000 | ||
Gross Unrealized Losses | (25,425,000) | (7,290,000) | ||
Total at end of period | 2,143,016,000 | 1,792,527,000 | ||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 2,143,016,000 | 1,792,527,000 | ||
Maturities, Amortized Cost [Abstract] | ||||
Total at end of period | 2,147,458,000 | 1,766,407,000 | ||
Maturities, Fair Value [Abstract] | ||||
Total at end of period | 2,143,016,000 | 1,792,527,000 | ||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 1,136,676,000 | 417,615,000 | ||
12 months or greater | 13,681,000 | 37,014,000 | ||
Total investment portfolio | 1,150,357,000 | 454,629,000 | ||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (24,918,000) | (6,404,000) | ||
12 months or greater | (507,000) | (886,000) | ||
Total investment portfolio | (25,425,000) | (7,290,000) | ||
Corporate debt securities | ||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | 1,756,461,000 | 2,046,697,000 | ||
Gross Unrealized Gains | 6,059,000 | 2,836,000 | ||
Gross Unrealized Losses | (18,610,000) | (44,770,000) | ||
Total at end of period | 1,743,910,000 | 2,004,763,000 | ||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 1,743,910,000 | 2,004,763,000 | ||
Maturities, Amortized Cost [Abstract] | ||||
Total at end of period | 1,756,461,000 | 2,046,697,000 | ||
Maturities, Fair Value [Abstract] | ||||
Total at end of period | 1,743,910,000 | 2,004,763,000 | ||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 915,777,000 | 1,470,628,000 | ||
12 months or greater | 35,769,000 | 114,982,000 | ||
Total investment portfolio | 951,546,000 | 1,585,610,000 | ||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (16,771,000) | (38,519,000) | ||
12 months or greater | (1,839,000) | (6,251,000) | ||
Total investment portfolio | (18,610,000) | (44,770,000) | ||
ABS | ||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | 59,519,000 | 116,764,000 | ||
Gross Unrealized Gains | 74,000 | 56,000 | ||
Gross Unrealized Losses | (28,000) | (203,000) | ||
Total at end of period | 59,565,000 | 116,617,000 | ||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 59,565,000 | 116,617,000 | ||
Maturities, Amortized Cost [Abstract] | ||||
Debt securities without single maturity date | 59,519,000 | |||
Total at end of period | 59,519,000 | 116,764,000 | ||
Maturities, Fair Value [Abstract] | ||||
Debt securities without single maturity date | 59,565,000 | |||
Total at end of period | 59,565,000 | 116,617,000 | ||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 3,366,000 | 86,604,000 | ||
12 months or greater | 656,000 | 5,546,000 | ||
Total investment portfolio | 4,022,000 | 92,150,000 | ||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (28,000) | (173,000) | ||
12 months or greater | 0 | (30,000) | ||
Total investment portfolio | (28,000) | (203,000) | ||
RMBS | ||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | 231,733,000 | 265,879,000 | ||
Gross Unrealized Gains | 102,000 | 161,000 | ||
Gross Unrealized Losses | (7,626,000) | (8,392,000) | ||
Total at end of period | 224,209,000 | 257,648,000 | ||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 224,209,000 | 257,648,000 | ||
Maturities, Amortized Cost [Abstract] | ||||
Debt securities without single maturity date | 231,733,000 | |||
Total at end of period | 231,733,000 | 265,879,000 | ||
Maturities, Fair Value [Abstract] | ||||
Debt securities without single maturity date | 224,209,000 | |||
Total at end of period | 224,209,000 | 257,648,000 | ||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 46,493,000 | 35,064,000 | ||
12 months or greater | 171,326,000 | 209,882,000 | ||
Total investment portfolio | 217,819,000 | 244,946,000 | ||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (857,000) | (312,000) | ||
12 months or greater | (6,769,000) | (8,080,000) | ||
Total investment portfolio | (7,626,000) | (8,392,000) | ||
CMBS | ||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | 327,042,000 | 237,304,000 | ||
Gross Unrealized Gains | 769,000 | 162,000 | ||
Gross Unrealized Losses | (7,994,000) | (3,975,000) | ||
Total at end of period | 319,817,000 | 233,491,000 | ||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 319,817,000 | 233,491,000 | ||
Maturities, Amortized Cost [Abstract] | ||||
Debt securities without single maturity date | 327,042,000 | |||
Total at end of period | 327,042,000 | 237,304,000 | ||
Maturities, Fair Value [Abstract] | ||||
Debt securities without single maturity date | 319,817,000 | |||
Total at end of period | 319,817,000 | 233,491,000 | ||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 205,545,000 | 134,488,000 | ||
12 months or greater | 38,587,000 | 69,927,000 | ||
Total investment portfolio | 244,132,000 | 204,415,000 | ||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (7,529,000) | (2,361,000) | ||
12 months or greater | (465,000) | (1,614,000) | ||
Total investment portfolio | (7,994,000) | (3,975,000) | ||
CLOs | ||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | 121,151,000 | 61,345,000 | ||
Gross Unrealized Gains | 226,000 | 3,000 | ||
Gross Unrealized Losses | (202,000) | (1,148,000) | ||
Total at end of period | 121,175,000 | 60,200,000 | ||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 121,175,000 | 60,200,000 | ||
Maturities, Amortized Cost [Abstract] | ||||
Debt securities without single maturity date | 121,151,000 | |||
Total at end of period | 121,151,000 | 61,345,000 | ||
Maturities, Fair Value [Abstract] | ||||
Debt securities without single maturity date | 121,175,000 | |||
Total at end of period | 121,175,000 | 60,200,000 | ||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 13,278,000 | 0 | ||
12 months or greater | 34,760,000 | 51,750,000 | ||
Total investment portfolio | 48,038,000 | 51,750,000 | ||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (73,000) | 0 | ||
12 months or greater | (129,000) | (1,148,000) | ||
Total investment portfolio | (202,000) | (1,148,000) | ||
Debt securities issued by foreign sovereign governments | ||||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||||
Total at end of period | 29,359,000 | |||
Gross Unrealized Gains | 2,474,000 | |||
Gross Unrealized Losses | (102,000) | |||
Total at end of period | 31,731,000 | |||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 31,731,000 | |||
Maturities, Amortized Cost [Abstract] | ||||
Total at end of period | 29,359,000 | |||
Maturities, Fair Value [Abstract] | ||||
Total at end of period | 31,731,000 | |||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 4,463,000 | |||
12 months or greater | 0 | |||
Total investment portfolio | 4,463,000 | |||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (102,000) | |||
12 months or greater | 0 | |||
Total investment portfolio | (102,000) | |||
Equity securities | ||||
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract] | ||||
Amortized Cost | 7,144,000 | 5,625,000 | ||
Gross Unrealized Gains | 8,000 | 38,000 | ||
Gross Unrealized Losses | (24,000) | (18,000) | ||
Fair Value | 7,128,000 | 5,645,000 | ||
Total Investment Portfolio [Abstract] | ||||
Fair Value | 7,128,000 | 5,645,000 | ||
Continuous Unrealized Loss Portion, Fair Value [Abstract] | ||||
Less than 12 months | 568,000 | 355,000 | ||
12 months or greater | 137,000 | 171,000 | ||
Total investment portfolio | 705,000 | 526,000 | ||
Continuous Unrealized Loss Portion, Unrealized Loses [Abstract] | ||||
Less than 12 months | (15,000) | (8,000) | ||
12 months or greater | (9,000) | (10,000) | ||
Total investment portfolio | $ (24,000) | $ (18,000) |
Investments, Investment Income
Investments, Investment Income By Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | $ 113,882 | $ 106,736 | $ 90,554 | ||||||||
Investment expenses | (3,216) | (2,995) | (2,907) | ||||||||
Net investment income | $ 28,094 | $ 27,515 | $ 27,248 | $ 27,809 | $ 27,926 | $ 25,939 | $ 25,756 | $ 24,120 | 110,666 | 103,741 | 87,647 |
Fixed income | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | 112,513 | 105,882 | 89,437 | ||||||||
Equity securities | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | 182 | 208 | 227 | ||||||||
Cash equivalents | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | 754 | 191 | 179 | ||||||||
Other | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Investment income | $ 433 | $ 455 | $ 711 |
Investments, Gain (Loss) on Inv
Investments, Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | $ (52) | $ 5,092 | $ 836 | $ 3,056 | $ 1,228 | $ 640 | $ 166 | $ 26,327 | $ 8,932 | $ 28,361 | $ 1,357 |
Change in net unrealized gains (losses) | (5,425) | (33,718) | 91,780 | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Gross realized gains | 11,909 | 30,039 | 4,966 | ||||||||
Gross realized losses | (2,977) | (1,678) | (3,465) | ||||||||
Other-than-temporary-impairment losses | 0 | 0 | (144) | ||||||||
Net realized investment gains | $ (52) | $ 5,092 | $ 836 | $ 3,056 | $ 1,228 | $ 640 | $ 166 | $ 26,327 | 8,932 | 28,361 | 1,357 |
Available-for-Sale Securities | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | 8,932 | 28,361 | 1,357 | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Net realized investment gains | 8,932 | 28,361 | 1,357 | ||||||||
Available-for-Sale Securities | Fixed income | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | 5,310 | 28,335 | 1,000 | ||||||||
Change in net unrealized gains (losses) | (5,403) | (33,687) | 91,718 | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Net realized investment gains | 5,310 | 28,335 | 1,000 | ||||||||
Available-for-Sale Securities | Equity Securities | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | 3,622 | 26 | 356 | ||||||||
Change in net unrealized gains (losses) | (36) | (32) | 66 | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Net realized investment gains | 3,622 | 26 | 356 | ||||||||
Available-for-Sale Securities | Other | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Realized (losses) gains | 0 | 0 | 1 | ||||||||
Change in net unrealized gains (losses) | 14 | 1 | (4) | ||||||||
Gross realized gains, gross realized losses and impairment losses [Abstract] | |||||||||||
Net realized investment gains | $ 0 | $ 0 | $ 1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | $ 4,692,350 | $ 4,663,206 |
Real estate acquired | 11,748 | 12,149 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 33,550 | 80,718 |
Real estate acquired | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 4,653,841 | 4,578,405 |
Real estate acquired | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 4,959 | 4,083 |
Real estate acquired | 11,748 | 12,149 |
Total debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 4,685,222 | 4,657,561 |
Total debt securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 30,690 | 77,928 |
Total debt securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 4,653,841 | 4,578,405 |
Total debt securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 691 | 1,228 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 73,530 | 160,584 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 30,690 | 46,197 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 42,840 | 114,387 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Obligations of U.S. states and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 2,143,016 | 1,792,527 |
Obligations of U.S. states and political subdivisions | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Obligations of U.S. states and political subdivisions | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 2,142,325 | 1,791,299 |
Obligations of U.S. states and political subdivisions | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 691 | 1,228 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 1,743,910 | 2,004,763 |
Corporate debt securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Corporate debt securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 1,743,910 | 2,004,763 |
Corporate debt securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
ABS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 59,565 | 116,617 |
ABS | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
ABS | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 59,565 | 116,617 |
ABS | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
RMBS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 224,209 | 257,648 |
RMBS | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
RMBS | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 224,209 | 257,648 |
RMBS | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
CMBS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 319,817 | 233,491 |
CMBS | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
CMBS | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 319,817 | 233,491 |
CMBS | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
CLOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 121,175 | 60,200 |
CLOs | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
CLOs | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 121,175 | 60,200 |
CLOs | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Debt securities issued by foreign sovereign governments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 31,731 | |
Debt securities issued by foreign sovereign governments | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 31,731 | |
Debt securities issued by foreign sovereign governments | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | |
Debt securities issued by foreign sovereign governments | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | |
Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 7,128 | 5,645 |
Equity securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 2,860 | 2,790 |
Equity securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Equity securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | $ 4,268 | $ 2,855 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total realized/unrealized gains (losses) [Abstract] | |||
State premium tax credit investments, average maturity | 3 years | ||
Annual average discount rate (in hundredths) | 7.10% | ||
Total Investments [Member] | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | $ 4,083 | $ 2,167 | $ 2,744 |
Total realized/unrealized gains (losses) [Abstract] | |||
Included in earnings and reported as net realized investment gains | 3,579 | ||
Included in earnings and reported as losses incurred, net | 0 | 0 | 0 |
Purchases | 4,258 | 2,541 | 30 |
Sales | (6,961) | (625) | (607) |
Balance at end of period | 4,959 | 4,083 | 2,167 |
Obligations of U.S. states and political subdivisions | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 1,228 | 1,846 | 2,423 |
Total realized/unrealized gains (losses) [Abstract] | |||
Included in earnings and reported as net realized investment gains | 0 | ||
Included in earnings and reported as losses incurred, net | 0 | 0 | 0 |
Purchases | 0 | 7 | 30 |
Sales | (537) | (625) | (607) |
Balance at end of period | 691 | 1,228 | 1,846 |
Equity securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 2,855 | 321 | 321 |
Total realized/unrealized gains (losses) [Abstract] | |||
Included in earnings and reported as net realized investment gains | 3,579 | ||
Included in earnings and reported as losses incurred, net | 0 | 0 | 0 |
Purchases | 4,258 | 2,534 | 0 |
Sales | (6,424) | 0 | 0 |
Balance at end of period | 4,268 | 2,855 | 321 |
Real Estate Acquired | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 12,149 | 12,658 | 13,280 |
Total realized/unrealized gains (losses) [Abstract] | |||
Included in earnings and reported as net realized investment gains | 0 | ||
Included in earnings and reported as losses incurred, net | (1,142) | (2,322) | (4,129) |
Purchases | 36,859 | 34,624 | 42,247 |
Sales | (36,118) | (32,811) | (38,740) |
Balance at end of period | $ 11,748 | $ 12,149 | $ 12,658 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Measurements of Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Aug. 31, 2016 | Dec. 31, 2015 |
5% Convertible Senior Notes due 2017 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Stated interest rate (in hundredths) | 5.00% | ||
2% Convertible Senior Notes due 2020 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Stated interest rate (in hundredths) | 2.00% | ||
Senior Notes | 5.75% Senior Notes due 2023 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Stated interest rate (in hundredths) | 5.75% | 5.75% | |
9% Convertible Junior Subordinated Debentures due 2063 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Stated interest rate (in hundredths) | 9.00% | ||
Carrying Value | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
FHLB Advance | $ 155,000 | ||
5% Notes | 144,789 | $ 331,546 | |
2% Notes | 204,672 | 490,755 | |
5.75% Notes | 417,406 | ||
9% Debentures | 256,872 | 389,522 | |
Total financial liabilities | 1,178,739 | 1,211,823 | |
Fair Value | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
FHLB Advance | 151,905 | ||
5% Notes | 147,679 | 345,616 | |
2% Notes | 308,605 | 701,955 | |
5.75% Notes | 445,987 | ||
9% Debentures | 323,040 | 455,067 | |
Total financial liabilities | $ 1,377,216 | $ 1,502,638 |
Debt (Details)
Debt (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
Aug. 31, 2016USD ($) | Feb. 29, 2016USD ($) | Dec. 31, 2016USD ($)Period$ / sharesshares | Sep. 30, 2016USD ($)shares | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)Period$ / sharesshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($) | Feb. 26, 2016USD ($) | Nov. 02, 2015 | |
Debt Instrument [Line Items] | |||||||||||||||
Deferred issuance costs | $ 10,800,000 | $ 11,200,000 | $ 10,800,000 | $ 11,200,000 | |||||||||||
Repayments of Convertible Debt | $ 363,778,000 | 11,152,000 | $ 0 | ||||||||||||
FHLBC advances | $ 155,000,000 | ||||||||||||||
FHLBC fixed interest rate | 1.91% | ||||||||||||||
Collateral, principal balance of FHLB (as a percent) | 102.00% | 102.00% | |||||||||||||
Long-term debt, gross | 1,189,500,000 | 1,223,000,000 | $ 1,189,500,000 | 1,223,000,000 | |||||||||||
Repayment of long-term debt | 0 | 61,953,000 | 20,772,000 | ||||||||||||
Loss on debt extinguishment | $ 0 | $ 75,223,000 | $ 1,868,000 | $ 13,440,000 | 507,000 | $ 0 | $ 0 | $ 0 | $ 90,531,000 | 507,000 | $ 837,000 | ||||
Senior Notes | 5.75% Senior Notes due 2023 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stated interest rate (in hundredths) | 5.75% | 5.75% | 5.75% | ||||||||||||
Outstanding principal amount | $ 425,000,000 | ||||||||||||||
Proceeds from issuance of debt | $ 418,100,000 | ||||||||||||||
Redemption price, percentage (in hundredths) | 100.00% | ||||||||||||||
Other expenses associated with the issuance of notes | $ 1,200,000 | $ 1,200,000 | |||||||||||||
Ownership percentage threshold for declaration of due and payable | 25.00% | ||||||||||||||
Long-term debt, gross | $ 425,000,000 | 0 | $ 425,000,000 | 0 | |||||||||||
Senior Notes | 5.75% Senior Notes due 2023 | U.S. Treasury Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Basis spread on redemption premium (as a percent) | 0.50% | ||||||||||||||
Senior Notes | 5.375% Senior Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stated interest rate (in hundredths) | 5.375% | ||||||||||||||
Convertible Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stated interest rate (in hundredths) | 5.00% | 5.00% | |||||||||||||
Repayments of Convertible Debt | $ 195,500,000 | 12,000,000 | |||||||||||||
Long-term debt, gross | $ 145,000,000 | 333,500,000 | 145,000,000 | 333,500,000 | |||||||||||
Extinguishment of debt, amount | $ 188,500,000 | $ 11,500,000 | |||||||||||||
Reduction in shares for computation of earnings per share | shares | 14,000,000 | 900,000 | |||||||||||||
Conversion rate (in shares per $1,000 note) | shares | 74.4186 | ||||||||||||||
Principal amount of notes used in determining conversion rate | $ 1,000 | $ 1,000 | |||||||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 13.44 | $ 13.44 | |||||||||||||
Convertible debt, number of equity instruments reserved for conversion | shares | 10,800,000 | 10,800,000 | |||||||||||||
Minimum percentage of consolidated shareholders' equity that determines designated subsidiary status | 15.00% | 15.00% | |||||||||||||
Convertible Debt | 2% Convertible Senior Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stated interest rate (in hundredths) | 2.00% | 2.00% | |||||||||||||
Repayments of Convertible Debt | 230,700,000 | ||||||||||||||
Extinguishment of debt, amount | $ 292,400,000 | ||||||||||||||
Reduction in shares for computation of earnings per share | shares | 42,100,000 | ||||||||||||||
Repayments of long-term debt | $ 362,100,000 | ||||||||||||||
Repayments of debt (in shares) | shares | 18,300,000 | ||||||||||||||
2% Convertible Senior Notes due 2020 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stated interest rate (in hundredths) | 2.00% | 2.00% | |||||||||||||
Redemption price, percentage (in hundredths) | 100.00% | ||||||||||||||
Long-term debt, gross | $ 207,600,000 | 500,000,000 | $ 207,600,000 | $ 500,000,000 | |||||||||||
Conversion rate (in shares per $1,000 note) | shares | 143.8332 | ||||||||||||||
Principal amount of notes used in determining conversion rate | $ 1,000 | $ 1,000 | |||||||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 6.95 | $ 6.95 | |||||||||||||
Convertible debt, number of equity instruments reserved for conversion | shares | 29,900,000 | 29,900,000 | |||||||||||||
Minimum number of trading days | 20 days | ||||||||||||||
Maximum number of trading days | 30 days | ||||||||||||||
Percentage of conversion price (in hundredths) | 130.00% | 130.00% | |||||||||||||
130% of conversion price (in dollars per share) | $ / shares | $ 9.04 | $ 9.04 | |||||||||||||
Convertible Junior Subordinated Debentures Due 2063 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stated interest rate (in hundredths) | 9.00% | 9.00% | |||||||||||||
Redemption price, percentage (in hundredths) | 100.00% | ||||||||||||||
Long-term debt, gross | $ 256,900,000 | 389,500,000 | $ 256,900,000 | 389,500,000 | |||||||||||
Conversion rate (in shares per $1,000 note) | shares | 74.0741 | ||||||||||||||
Principal amount of notes used in determining conversion rate | $ 1,000 | $ 1,000 | |||||||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 13.50 | $ 13.50 | |||||||||||||
Convertible debt, number of equity instruments reserved for conversion | shares | 19,000,000 | 19,000,000 | |||||||||||||
Minimum number of trading days | 20 days | ||||||||||||||
Maximum number of trading days | 30 days | ||||||||||||||
Percentage of conversion price (in hundredths) | 130.00% | 130.00% | |||||||||||||
130% of conversion price (in dollars per share) | $ / shares | $ 17.55 | $ 17.55 | |||||||||||||
Period preceding election to convert | 5 days | ||||||||||||||
Minimum number of consecutive interest periods for which interest payments may be deferred | Period | 1 | 1 | |||||||||||||
Maximum period for which interest payments may be deferred without giving rise to an event of default | 10 years | ||||||||||||||
Period in which reasonable commercial efforts must begin, maximum | 1 day | ||||||||||||||
Anniversary payment release of the start of the interest deferral to the Alternative Payment Mechanism in lieu of the final maturity of the debentures | 10 years | ||||||||||||||
Net proceeds cap (in hundredths) | 2.00% | 2.00% | |||||||||||||
Maximum number of shares of common stock issuable under the Alternative Payment Mechanism (in shares) | shares | 10,000,000 | 10,000,000 | |||||||||||||
Maximum percentage of aggregate principal amount of the debentures (in hundredths) | 25.00% | 25.00% | |||||||||||||
Convertible Junior Debentures at 9% per annum, Due 2063 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stated interest rate (in hundredths) | 9.00% | 9.00% | |||||||||||||
Extinguishment of debt, amount | $ 132,700,000 | ||||||||||||||
Repayment of long-term debt | $ 150,700,000 | ||||||||||||||
Reduction in shares for computation of earnings per share | shares | 9,800,000 | ||||||||||||||
Loss on debt extinguishment | $ 8,300,000 | ||||||||||||||
Reacquisition of convertible junior subordinated debentures-equity component | $ 6,300,000 | ||||||||||||||
Accounting Standards Update 2015-03 | Long-term Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Deferred issuance costs | (11,200,000) | (11,200,000) | |||||||||||||
Accounting Standards Update 2015-03 | Other Assets | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Deferred issuance costs | $ (11,200,000) | $ (11,200,000) |
Debt - Summary of Obligations (
Debt - Summary of Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,189.5 | $ 1,223 |
Deferred issuance costs | 10.8 | 11.2 |
Total long-term debt | 1,178.7 | 1,211.8 |
Interest payments made | 49.5 | 65.7 |
Federal Home Loan Bank Advances (FHLB) | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 155 | 0 |
Interest payments made | 2.4 | 0 |
5% Convertible Senior Notes due 2017 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 145 | 333.5 |
Total long-term debt | 331.5 | |
Interest payments made | 10.6 | 17.3 |
2% Convertible Senior Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 207.6 | 500 |
Total long-term debt | 490.8 | |
Interest payments made | 9.1 | 10 |
Senior Notes | 5.75% Senior Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 425 | 0 |
Interest payments made | 0 | 0 |
Convertible Junior Subordinated Debentures Due 2063 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 256.9 | 389.5 |
Total long-term debt | 389.5 | |
Interest payments made | 27.4 | 35.1 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest payments made | $ 0 | $ 3.3 |
Debt - Impact of Accounting Cha
Debt - Impact of Accounting Changes (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | $ 1,178.7 | $ 1,211.8 |
As previously reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | 1,223 | |
Accounting Standards Update 2015-03 | Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | (11.2) | |
5% Convertible Senior Notes due 2017 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | 331.5 | |
5% Convertible Senior Notes due 2017 | As previously reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | 333.5 | |
5% Convertible Senior Notes due 2017 | Accounting Standards Update 2015-03 | Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | (2) | |
2% Convertible Senior Notes due 2020 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | 490.8 | |
2% Convertible Senior Notes due 2020 | As previously reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | 500 | |
2% Convertible Senior Notes due 2020 | Accounting Standards Update 2015-03 | Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | (9.2) | |
Convertible Junior Subordinated Debentures Due 2063 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | 389.5 | |
Convertible Junior Subordinated Debentures Due 2063 | As previously reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | 389.5 | |
Convertible Junior Subordinated Debentures Due 2063 | Accounting Standards Update 2015-03 | Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total long-term debt | $ 0 |
Loss Reserves - Reconciliation
Loss Reserves - Reconciliation of Changes in Loss Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loss Reserve [Roll Forward] | ||||
Reserve at beginning of year | $ 1,893,402 | $ 2,396,807 | $ 3,061,401 | |
Less reinsurance recoverable | 50,493 | 44,487 | 57,841 | $ 64,085 |
Net reserve at beginning of year | 1,388,320 | 1,848,915 | 2,338,966 | $ 2,997,316 |
Losses incurred: [Abstract] | ||||
Current year | 387,815 | 453,849 | 596,436 | |
Prior years | (147,658) | (110,302) | (100,359) | |
Total losses incurred | 240,157 | 343,547 | 496,077 | |
Losses paid [Abstract] | ||||
Current year | 14,823 | 25,980 | 32,919 | |
Prior years | 689,258 | 823,058 | 1,121,508 | |
Reinsurance terminations | (3,329) | (15,440) | 0 | |
Total losses paid | 700,752 | 833,598 | 1,154,427 | |
Reserve at end of year | $ 1,438,813 | $ 1,893,402 | $ 2,396,807 |
Loss Reserves - Prior Year Loss
Loss Reserves - Prior Year Loss Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Prior years | $ (147,658) | $ (110,302) | $ (100,359) |
Decrease in estimated claim rate on primary defaults | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Prior years | (148,000) | (141,000) | (43,000) |
Increase (decrease) in estimated severity on primary defaults | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Prior years | 9,000 | 43,000 | (35,000) |
Change in estimates related to pool reserves, LAE reserves, reinsurance and other | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Prior years | $ (9,000) | $ (12,000) | $ (22,000) |
Loss Reserves - Default Invento
Loss Reserves - Default Inventory Reconciliation (Details) - loan | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Primary Default Inventory [Roll Forward] | |||
Default inventory at beginning of year | 62,633 | 79,901 | 103,328 |
New Notices | 67,434 | 74,315 | 88,844 |
Cures | (65,516) | (73,610) | (87,278) |
Paids (including those charged to a deductible or captive) | (12,367) | (16,004) | (23,494) |
Rescissions and denials | (629) | (848) | (1,306) |
Other items removed from inventory | (1,273) | (1,121) | (193) |
Default inventory at end of year | 50,282 | 62,633 | 79,901 |
Loss Reserves - Aging of Primar
Loss Reserves - Aging of Primary Default Inventory and Number of Delinquent Payments (Details) - loan | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Aging of the Primary Default Inventory [Abstract] | ||||
3 months or less | 12,194 | 13,053 | 15,319 | |
3 months or less (in hundredths) | 24.00% | 21.00% | 19.00% | |
4 - 11 months | 13,450 | 15,763 | 19,710 | |
4 - 11 months (in hundredths) | 27.00% | 25.00% | 25.00% | |
12 months or more | 24,638 | 33,817 | 44,872 | |
12 months or more (in hundredths) | 49.00% | 54.00% | 56.00% | |
Total primary default inventory | 50,282 | 62,633 | 79,901 | 103,328 |
Total primary default inventory (in hundredths) | 100.00% | 100.00% | 100.00% | |
Primary claims received inventory included in ending default inventory | 1,385 | 2,769 | 4,746 | |
Primary claims received inventory included in ending default inventory (in hundredths) | 3.00% | 4.00% | 6.00% | |
Number of Payments Delinquent [Abstract] | ||||
3 payments or less | 18,419 | 20,360 | 23,253 | |
3 payments or less (in hundredths) | 36.00% | 33.00% | 29.00% | |
4 - 11 payments | 12,892 | 15,092 | 19,427 | |
4 - 11 payments (in hundredths) | 26.00% | 24.00% | 24.00% | |
12 payments or more | 18,971 | 27,181 | 37,221 | |
12 payments or more (in hundredths) | 38.00% | 43.00% | 47.00% | |
Total primary default inventory | 50,282 | 62,633 | 79,901 | 103,328 |
Total primary default inventory (in hundredths) | 100.00% | 100.00% | 100.00% |
Loss Reserves - Narrative (Deta
Loss Reserves - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)loan | Dec. 31, 2015USD ($)loan | Dec. 31, 2014USD ($)loan | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Losses for unpaid claims and adjustment expense | $ 689,258 | $ 823,058 | $ 1,121,508 |
Other items removed from inventory | loan | 1,273 | 1,121 | 193 |
Premium refund liability, expected claim payments | $ 85,000 | $ 102,000 | |
Percent of inventory in default for more than 36 consecutive months | 47.00% | 50.00% | 53.00% |
Pool insurance notice inventory (in number of loans) | loan | 1,883 | 2,739 | 3,797 |
Premium refund liability, expected future rescissions | $ 5,000 | $ 7,000 | |
Payments for Settlements | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Losses for unpaid claims and adjustment expense | 53,000 | 10,000 | |
Payments for Settlements | Freddie Mac | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Losses for unpaid claims and adjustment expense | $ 42,000 | $ 42,000 | $ 42,000 |
Decrease in estimated claim rate on primary defaults | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Percentage of prior year default inventory resolved (in hundredths) | 63.00% | 60.00% | 58.00% |
Reinsurance - Summary of Quota
Reinsurance - Summary of Quota Share Reinsurance Agreements (Details) - USD ($) $ in Thousands | Jul. 01, 2015 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Premiums Earned, Net [Abstract] | ||||||||||||
Premiums earned, direct | $ 1,058,545 | $ 997,892 | $ 950,973 | |||||||||
Premiums earned, assumed | 662 | 1,178 | 1,653 | |||||||||
Premiums earned, ceded | (133,981) | (102,848) | (108,255) | |||||||||
Net premiums earned | $ 235,053 | $ 237,376 | $ 231,456 | $ 221,341 | $ 226,192 | $ 239,234 | $ 213,508 | $ 217,288 | 925,226 | 896,222 | 844,371 | |
Policyholder Benefits and Claims Incurred, Net [Abstract] | ||||||||||||
Losses incurred, direct | 273,207 | 369,680 | 524,051 | |||||||||
Losses incurred, assumed | 1,138 | 1,552 | 2,012 | |||||||||
Losses incurred, ceded | (34,188) | (27,685) | (29,986) | |||||||||
Net losses incurred | $ 47,658 | $ 60,897 | $ 46,590 | $ 85,012 | $ 95,066 | 76,458 | $ 90,238 | $ 81,785 | 240,157 | 343,547 | 496,077 | |
Ceded premiums written, net of profit commission | 133,885 | 55,391 | 119,634 | |||||||||
Ceded premiums earned, net of profit commission | 133,981 | 102,848 | 108,255 | |||||||||
Ceded losses incurred | 34,188 | 27,685 | 29,986 | |||||||||
Quota Share Reinsurance Agreement, 2015 | ||||||||||||
Premiums Earned, Net [Abstract] | ||||||||||||
Premiums earned, ceded | (125,460) | (52,588) | ||||||||||
Policyholder Benefits and Claims Incurred, Net [Abstract] | ||||||||||||
Losses incurred, ceded | (30,201) | (11,424) | ||||||||||
Ceded premiums written, net of profit commission | 125,460 | 52,588 | ||||||||||
Ceded premiums earned, net of profit commission | 125,460 | 52,588 | ||||||||||
Ceded losses incurred | 30,201 | 11,424 | ||||||||||
Ceding commission | 47,629 | 20,582 | ||||||||||
Profit commission | $ 112,685 | 50,322 | ||||||||||
Quota Share Reinsurance Agreement, 2013 | ||||||||||||
Premiums Earned, Net [Abstract] | ||||||||||||
Premiums earned, ceded | (11,600) | (35,999) | (88,528) | |||||||||
Policyholder Benefits and Claims Incurred, Net [Abstract] | ||||||||||||
Losses incurred, ceded | (6,060) | (15,163) | ||||||||||
Ceded premiums written, net of profit commission | 69,400 | (11,355) | 100,031 | |||||||||
Ceded premiums earned, net of profit commission | 11,600 | 35,999 | 88,528 | |||||||||
Ceded losses incurred | 6,060 | 15,163 | ||||||||||
Ceding commission | $ 11,600 | 10,235 | 37,833 | |||||||||
Profit commission | $ 142,500 | $ 62,525 | $ 89,133 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) - USD ($) | Jul. 01, 2015 | Mar. 31, 2017 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Effects of Reinsurance [Line Items] | |||||||
Ceded premiums written, net of profit commission | $ 133,885,000 | $ 55,391,000 | $ 119,634,000 | ||||
Ceded to Other Companies | 133,981,000 | 102,848,000 | 108,255,000 | ||||
Less reinsurance recoverable | $ 50,493,000 | $ 44,487,000 | 57,841,000 | $ 64,085,000 | |||
Period of existing captive reinsurance agreement | 10 years | 10 years | |||||
Reinsurance recoverable on loss reserves related to captive agreements | $ 19,000,000 | $ 34,000,000 | |||||
Fair value of trust fund assets under our captive agreements | 91,000,000 | 137,000,000 | |||||
Quota Share Reinsurance Agreement, 2015 | |||||||
Effects of Reinsurance [Line Items] | |||||||
Contingent termination fee | $ 0 | ||||||
Threshold for private mortgage insurer eligibility requirements for termination election | 90.00% | ||||||
Quota share, percentage | 30.00% | ||||||
Ceding commission, percentage | 20.00% | ||||||
Loss ratio | 60.00% | ||||||
Ceded premiums written, net of profit commission | 125,460,000 | 52,588,000 | |||||
Ceded to Other Companies | 125,460,000 | 52,588,000 | |||||
Ceding commission | 47,629,000 | 20,582,000 | |||||
Profit commission | 112,685,000 | 50,322,000 | |||||
Less reinsurance recoverable | $ 31,800,000 | 10,900,000 | |||||
Quota Share Reinsurance Agreement, 2013 | |||||||
Effects of Reinsurance [Line Items] | |||||||
Ceded premiums written, net of profit commission | $ 69,400,000 | (11,355,000) | 100,031,000 | ||||
Ceded to Other Companies | 11,600,000 | 35,999,000 | 88,528,000 | ||||
Ceding commission | $ 11,600,000 | 10,235,000 | 37,833,000 | ||||
Profit commission | $ 142,500,000 | $ 62,525,000 | $ 89,133,000 | ||||
Quota Share Reinsurance Agreement, 2017 | Forecast | |||||||
Effects of Reinsurance [Line Items] | |||||||
Contingent termination fee | $ 0 | ||||||
Threshold for private mortgage insurer eligibility requirements for termination election | 90.00% | ||||||
Quota share, percentage | 30.00% | ||||||
Ceding commission, percentage | 20.00% | ||||||
Loss ratio | 60.00% |
Other Comprehensive (Loss) In63
Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of Other Comprehensive Income (Loss) [Abstract] | |||||||||||
Net unrealized investment (losses) gains arising during the year | $ (5,425) | $ (33,718) | $ 91,782 | ||||||||
Income tax benefit (expense) | 1,776 | 11,738 | (32,017) | ||||||||
Valuation allowance | 0 | 62,383 | 31,374 | ||||||||
Net of taxes | (3,649) | 40,403 | 91,139 | ||||||||
Net changes in benefit plan assets and obligations | (14,799) | (12,818) | (52,112) | ||||||||
Income tax benefit | 5,179 | 4,487 | 18,239 | ||||||||
Valuation allowance | 0 | (7,383) | (18,239) | ||||||||
Net of taxes | (9,620) | (15,714) | (52,112) | ||||||||
Net changes in unrealized foreign currency translation adjustment | (1,463) | (5,699) | (4,067) | ||||||||
Income tax benefit | 512 | 2,000 | 1,425 | ||||||||
Valuation allowance | 0 | (529) | 0 | ||||||||
Net of taxes | (951) | (4,228) | (2,642) | ||||||||
Total other comprehensive (loss) income | (21,687) | (52,235) | 35,603 | ||||||||
Total income tax benefit, net of valuation allowance | 7,467 | 72,696 | 782 | ||||||||
Other comprehensive (loss) income, net of tax | (14,220) | 20,461 | 36,385 | ||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | |||||||||||
Total reclassifications | 514,714 | 487,687 | 254,723 | ||||||||
Total income tax expense, net of valuation allowance | $ (54,551) | $ (27,131) | $ (56,018) | $ (34,497) | $ (6,584) | $ 695,604 | $ (1,322) | $ (3,385) | (172,197) | 684,313 | (2,774) |
Valuation allowance | 0 | 161,158 | 88,833 | ||||||||
Net income | 107,487 | $ 56,618 | $ 109,221 | 69,191 | 102,418 | $ 822,852 | $ 113,654 | 133,076 | 342,517 | 1,172,000 | 251,949 |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Balance, beginning of year | 2,236,140 | 1,036,903 | 2,236,140 | 1,036,903 | |||||||
Balance, end of year | 2,548,842 | 2,236,140 | 2,548,842 | 2,236,140 | 1,036,903 | ||||||
Accumulated other comprehensive loss | |||||||||||
Components of Other Comprehensive Income (Loss) [Abstract] | |||||||||||
Other comprehensive (loss) income, net of tax | (14,220) | 20,461 | 36,385 | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Balance, beginning of year | (60,880) | (81,341) | (60,880) | (81,341) | (117,726) | ||||||
Other comprehensive income (loss) before reclassifications | (8,147) | 33,707 | 36,399 | ||||||||
Less: Amounts reclassified from AOCL | 6,073 | 13,246 | 14 | ||||||||
Balance, end of year | (75,100) | (60,880) | (75,100) | (60,880) | (81,341) | ||||||
Net unrealized gains and losses on available-for-sale securities | |||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Balance, beginning of year | (17,148) | (57,551) | (17,148) | (57,551) | (148,690) | ||||||
Other comprehensive income (loss) before reclassifications | 508 | 51,655 | 84,223 | ||||||||
Less: Amounts reclassified from AOCL | 4,157 | 11,252 | (6,916) | ||||||||
Balance, end of year | (20,797) | (17,148) | (20,797) | (17,148) | (57,551) | ||||||
Net benefit plan assets and obligations recognized in shareholders' equity | |||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Balance, beginning of year | (44,652) | (28,938) | (44,652) | (28,938) | 23,174 | ||||||
Other comprehensive income (loss) before reclassifications | (8,658) | (13,720) | (45,182) | ||||||||
Less: Amounts reclassified from AOCL | 962 | 1,994 | 6,930 | ||||||||
Balance, end of year | (54,272) | (44,652) | (54,272) | (44,652) | (28,938) | ||||||
Net unrealized foreign currency translation | |||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Balance, beginning of year | $ 920 | $ 5,148 | 920 | 5,148 | 7,790 | ||||||
Other comprehensive income (loss) before reclassifications | 3 | (4,228) | (2,642) | ||||||||
Less: Amounts reclassified from AOCL | 954 | 0 | 0 | ||||||||
Balance, end of year | $ (31) | $ 920 | (31) | 920 | 5,148 | ||||||
Reclassification from Accumulated Other Comprehensive Income | |||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | |||||||||||
Total reclassifications | 9,154 | 13,877 | 114 | ||||||||
Total income tax expense, net of valuation allowance | (3,081) | (631) | (100) | ||||||||
Net income | 6,073 | 13,246 | 14 | ||||||||
Reclassification from Accumulated Other Comprehensive Income | Net unrealized gains and losses on available-for-sale securities | |||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | |||||||||||
Total reclassifications | 6,207 | 11,693 | (6,816) | ||||||||
Total income tax expense, net of valuation allowance | (2,050) | (4,076) | 2,402 | ||||||||
Valuation allowance | 0 | 3,635 | (2,502) | ||||||||
Net income | 4,157 | 11,252 | (6,916) | ||||||||
Reclassification from Accumulated Other Comprehensive Income | Net benefit plan assets and obligations recognized in shareholders' equity | |||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | |||||||||||
Total reclassifications | 1,480 | 2,184 | 6,930 | ||||||||
Total income tax expense, net of valuation allowance | (518) | (764) | (2,425) | ||||||||
Valuation allowance | 0 | 574 | 2,425 | ||||||||
Net income | 962 | 1,994 | 6,930 | ||||||||
Reclassification from Accumulated Other Comprehensive Income | Net unrealized foreign currency translation | |||||||||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | |||||||||||
Total reclassifications | 1,467 | 0 | 0 | ||||||||
Total income tax expense, net of valuation allowance | (513) | 0 | 0 | ||||||||
Net income | $ 954 | $ 0 | $ 0 |
Benefit Plans - Components of N
Benefit Plans - Components of Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension and Supplemental Executive Retirement Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Company Service Cost | $ 9,130 | $ 10,256 | $ 8,565 |
Interest Cost | 15,906 | 15,847 | 15,987 |
Expected Return on Assets | (19,508) | (21,109) | (21,030) |
Other Adjustments | 0 | 0 | 0 |
Subtotal | 5,528 | 4,994 | 3,522 |
Amortization of Net Transition Obligation/(Asset) | 0 | 0 | 0 |
Amortization of Net Prior Service Cost/(Credit) | (687) | (845) | (930) |
Amortization of Net Losses/(Gains) | 5,856 | 5,485 | 1,083 |
Total Amortization | 5,169 | 4,640 | 153 |
Net Periodic Benefit Cost | 10,697 | 9,634 | 3,675 |
Cost of settlements or curtailments | 1,277 | 3,172 | 302 |
Total Expense for Year | 11,974 | 12,806 | 3,977 |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Company Service Cost | 751 | 833 | 659 |
Interest Cost | 704 | 697 | 653 |
Expected Return on Assets | (4,886) | (4,991) | (4,648) |
Other Adjustments | 0 | 0 | 0 |
Subtotal | (3,431) | (3,461) | (3,336) |
Amortization of Net Transition Obligation/(Asset) | 0 | 0 | 0 |
Amortization of Net Prior Service Cost/(Credit) | (6,649) | (6,649) | (6,649) |
Amortization of Net Losses/(Gains) | 0 | (175) | (435) |
Total Amortization | (6,649) | (6,824) | (7,084) |
Net Periodic Benefit Cost | (10,080) | (10,285) | (10,420) |
Cost of settlements or curtailments | 0 | 0 | 0 |
Total Expense for Year | $ (10,080) | $ (10,285) | $ (10,420) |
Benefit Plans - Development of
Benefit Plans - Development of Funded Status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension and Supplemental Executive Retirement Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Measurement Date | December 31, 2016 | December 31, 2015 | |
Accumulated Benefit Obligation | $ 360,423 | $ 338,450 | |
Projected Benefit Obligation | (369,808) | (349,483) | $ (379,324) |
Plan Assets at Fair Value | 360,900 | 350,107 | 378,701 |
Funded Status - Overfunded/(Underfunded) | $ (8,908) | $ 624 | |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Measurement Date | December 31, 2016 | December 31, 2015 | |
Accumulated Benefit Obligation | $ 17,378 | $ 16,423 | |
Projected Benefit Obligation | (17,378) | (16,423) | (18,225) |
Plan Assets at Fair Value | 70,408 | 65,568 | $ 66,940 |
Funded Status - Overfunded/(Underfunded) | $ 53,030 | $ 49,145 |
Benefit Plans - Accumulated Oth
Benefit Plans - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Pension and Supplemental Executive Retirement Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net Actuarial (Gain)/Loss | $ 103,861 | $ 95,636 | |
Net Prior Service Cost/(Credit) | (2,286) | (2,989) | |
Net Transition Obligation/(Asset) | 0 | 0 | |
Total at Year End | 101,575 | 92,647 | $ 89,390 |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net Actuarial (Gain)/Loss | (6,088) | (5,311) | |
Net Prior Service Cost/(Credit) | (11,991) | (18,640) | |
Net Transition Obligation/(Asset) | 0 | 0 | |
Total at Year End | $ (18,079) | $ (23,951) | $ (33,511) |
Benefit Plans - Change in Proje
Benefit Plans - Change in Project Benefit/Accumulated Benefit Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension and Supplemental Executive Retirement Plans | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit Obligation at Beginning of Year | $ 349,483 | $ 379,324 | |
Company Service Cost | 9,130 | 10,256 | $ 8,565 |
Interest Cost | 15,906 | 15,847 | 15,987 |
Plan Participants' Contributions | 0 | 0 | |
Net Actuarial (Gain)/Loss due to Assumption Changes | 14,450 | (24,118) | |
Net Actuarial (Gain)/Loss due to Plan Experience | 5,428 | 7,155 | |
Benefit Payments from Fund | (21,831) | (32,646) | |
Benefit Payments Directly by Company | (2,669) | (7,661) | |
Plan Amendments | 16 | 19 | |
Other Adjustment | (105) | 1,307 | |
Benefit Obligation at End of Year | 369,808 | 349,483 | 379,324 |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit Obligation at Beginning of Year | 16,423 | 18,225 | |
Company Service Cost | 751 | 833 | 659 |
Interest Cost | 704 | 697 | 653 |
Plan Participants' Contributions | 408 | 361 | |
Net Actuarial (Gain)/Loss due to Assumption Changes | 497 | (2,083) | |
Net Actuarial (Gain)/Loss due to Plan Experience | 357 | (397) | |
Benefit Payments from Fund | (1,678) | (1,147) | |
Benefit Payments Directly by Company | 0 | 0 | |
Plan Amendments | 0 | 0 | |
Other Adjustment | (84) | (66) | |
Benefit Obligation at End of Year | $ 17,378 | $ 16,423 | $ 18,225 |
Benefit Plans - Change in Plan
Benefit Plans - Change in Plan Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and Supplemental Executive Retirement Plans | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair Value of Plan Assets at Beginning of Year | $ 350,107 | $ 378,701 |
Company Contributions | 11,369 | 17,311 |
Plan Participants' Contributions | 0 | 0 |
Benefit Payments from Fund | (21,831) | (32,646) |
Benefit Payments paid directly by Company | (2,669) | (7,661) |
Actual Return on Assets | 23,924 | (5,094) |
Other Adjustment | 0 | (504) |
Fair Value of Plan Assets at End of Year | 360,900 | 350,107 |
Other Postretirement Benefit Plan | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair Value of Plan Assets at Beginning of Year | 65,568 | 66,940 |
Company Contributions | 0 | 0 |
Plan Participants' Contributions | 408 | 361 |
Benefit Payments from Fund | (1,678) | (1,147) |
Benefit Payments paid directly by Company | 0 | 0 |
Actual Return on Assets | 6,518 | (225) |
Other Adjustment | (408) | (361) |
Fair Value of Plan Assets at End of Year | $ 70,408 | $ 65,568 |
Benefit Plans - Change in Accum
Benefit Plans - Change in Accumulated Other Comprehensive Income (AOCI) and Expected Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and Supplemental Executive Retirement Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
AOCI in Prior Year | $ 92,647 | $ 89,390 |
Recognized during year - Prior Service (Cost)/Credit | 687 | 845 |
Recognized during year - Net Actuarial (Losses)/Gains | (5,856) | (5,485) |
Occurring during year - Prior Service Cost | 16 | 19 |
Occurring during year - Net Actuarial Losses/(Gains) | 15,358 | 11,050 |
Occurring during year - Net Settlement Losses/(Gains) | (1,277) | (3,172) |
Other adjustments | 0 | 0 |
AOCI in Current Year | 101,575 | 92,647 |
Amortization of Net Transition Obligation/(Asset) | 0 | |
Amortization of Prior Service Cost/(Credit) | (428) | |
Amortization of Net Losses/(Gains) | 6,141 | |
Other Postretirement Benefit Plan | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
AOCI in Prior Year | (23,951) | (33,511) |
Recognized during year - Prior Service (Cost)/Credit | 6,649 | 6,649 |
Recognized during year - Net Actuarial (Losses)/Gains | 0 | 175 |
Occurring during year - Prior Service Cost | 0 | 0 |
Occurring during year - Net Actuarial Losses/(Gains) | (777) | 2,736 |
Occurring during year - Net Settlement Losses/(Gains) | 0 | 0 |
Other adjustments | 0 | 0 |
AOCI in Current Year | (18,079) | $ (23,951) |
Amortization of Net Transition Obligation/(Asset) | 0 | |
Amortization of Prior Service Cost/(Credit) | (6,649) | |
Amortization of Net Losses/(Gains) | $ 0 |
Benefit Plans - Actuarial Assum
Benefit Plans - Actuarial Assumptions and Year-End Asset Allocations (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and Supplemental Executive Retirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount Rate (in hundredths) | 4.30% | 4.65% |
Rate of Compensation Increase (in hundredths) | 3.00% | 3.00% |
Discount Rate (in hundredths) | 4.65% | 4.25% |
Expected Long-term Return on Plan Assets (in hundredths) | 5.75% | 5.75% |
Rate of Compensation Increase (in hundredths) | 3.00% | 3.00% |
Other Postretirement Benefit Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount Rate (in hundredths) | 3.95% | 4.30% |
Discount Rate (in hundredths) | 4.30% | 4.00% |
Expected Long-term Return on Plan Assets (in hundredths) | 7.50% | 7.50% |
Health Care Cost Trend Rate Assumed for Next Year (in hundredths) | 6.50% | 7.00% |
Rate to Which the Cost Trend Rate is Assumed to Decline (Ultimate Trend Rate) (in hundredths) | 5.00% | 5.00% |
Year That the Rate Reaches the Ultimate Trend Rate | 2,020 | 2,020 |
Weighted-average asset allocations of plans (in hundredths) | 100.00% | 100.00% |
Other Postretirement Benefit Plan | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 100.00% | 100.00% |
Other Postretirement Benefit Plan | Total debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 0.00% | 0.00% |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 100.00% | 100.00% |
Pension Plan | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 23.00% | 20.00% |
Pension Plan | Total debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocations of plans (in hundredths) | 77.00% | 80.00% |
Benefit Plans - Fair Value of P
Benefit Plans - Fair Value of Plan Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | $ 360,900 | $ 350,107 | |
Pension Plan | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 24,260 | 10,251 | |
Pension Plan | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 336,640 | 339,856 | |
Pension Plan | Domestic Mutual Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 11,805 | 1,442 | |
Pension Plan | Domestic Mutual Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 11,805 | 1,442 | |
Pension Plan | Domestic Mutual Funds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Corporate Bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 178,412 | 188,332 | |
Pension Plan | Corporate Bonds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Corporate Bonds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 178,412 | 188,332 | |
Pension Plan | U.S. Government Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 7,115 | 3,630 | |
Pension Plan | U.S. Government Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 6,761 | 3,133 | |
Pension Plan | U.S. Government Securities | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 354 | 497 | |
Pension Plan | Municipal Bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 63,492 | 61,206 | |
Pension Plan | Municipal Bonds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Municipal Bonds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 63,492 | 61,206 | |
Pension Plan | Foreign Bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 27,917 | 25,251 | |
Pension Plan | Foreign Bonds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Foreign Bonds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 27,917 | 25,251 | |
Pension Plan | Exchange traded fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 5,694 | 5,676 | |
Pension Plan | Exchange traded fund | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 5,694 | 5,676 | |
Pension Plan | Exchange traded fund | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Pooled Equity Accounts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 66,465 | 64,570 | |
Pension Plan | Pooled Equity Accounts | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 0 | 0 | |
Pension Plan | Pooled Equity Accounts | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 66,465 | 64,570 | |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 70,408 | 65,568 | $ 66,940 |
Other Postretirement Benefit Plan | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 70,408 | 65,568 | |
Other Postretirement Benefit Plan | Domestic Mutual Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 54,426 | 49,887 | |
Other Postretirement Benefit Plan | Domestic Mutual Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 54,426 | 49,887 | |
Other Postretirement Benefit Plan | International Mutual Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | 15,982 | 15,681 | |
Other Postretirement Benefit Plan | International Mutual Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan Assets at Fair Value | $ 15,982 | $ 15,681 |
Benefit Plans - Additional Disc
Benefit Plans - Additional Disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Effect of 1-percentage point increase on total service and interest cost component | $ 237 | |
Effect of 1-percentage point decrease on total service and interest cost components | (205) | |
Effect of 1-percentage point increase on postretirement benefit obligation | 2,382 | |
Effect of 1-percentage point decrease on postretirement benefit obligation | (2,102) | |
Other Postretirement Benefit Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Company Contributions | 0 | $ 0 |
Current plus 1 | 0 | |
Actual Benefit Payments for the Year Ending: Current | 1,355 | |
Expected Benefit Payments for the Year Ending: Current plus 1 | 847 | |
Expected Benefit Payments for the Year Ending: Current plus 2 | 978 | |
Expected Benefit Payments for the Year Ending: Current plus 3 | 1,068 | |
Expected Benefit Payments for the Year Ending: Current plus 4 | 1,257 | |
Expected Benefit Payments for the Year Ending: Current plus 5 | 1,410 | |
Expected Benefit Payments for the Year Ending: Current plus 6 - 10 | $ 8,574 | |
Other Postretirement Benefit Plan | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocations, minimum (in hundredths) | 70.00% | |
Target asset allocations, maximum (in hundredths) | 100.00% | |
Other Postretirement Benefit Plan | Real Estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocations, minimum (in hundredths) | 0.00% | |
Target asset allocations, maximum (in hundredths) | 15.00% | |
Other Postretirement Benefit Plan | Commodities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocations, minimum (in hundredths) | 0.00% | |
Target asset allocations, maximum (in hundredths) | 10.00% | |
Other Postretirement Benefit Plan | Fixed Income/Cash | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocations, minimum (in hundredths) | 0.00% | |
Target asset allocations, maximum (in hundredths) | 10.00% | |
Pension and Supplemental Executive Retirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Company Contributions | $ 11,369 | $ 17,311 |
Current plus 1 | 9,500 | |
Actual Benefit Payments for the Year Ending: Current | 24,500 | |
Expected Benefit Payments for the Year Ending: Current plus 1 | 21,831 | |
Expected Benefit Payments for the Year Ending: Current plus 2 | 23,439 | |
Expected Benefit Payments for the Year Ending: Current plus 3 | 26,927 | |
Expected Benefit Payments for the Year Ending: Current plus 4 | 27,199 | |
Expected Benefit Payments for the Year Ending: Current plus 5 | 27,151 | |
Expected Benefit Payments for the Year Ending: Current plus 6 - 10 | $ 146,471 |
Benefit Plans - Narrative (Deta
Benefit Plans - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Minimum percentages of gain loss consider for amortization (in hundredths) | 10.00% | ||
Minimum value of outstanding noncallable bonds used in hypothetical cash flow bond matching exercise | $ 50,000,000 | ||
Future earnings period used in determining the expected average rate of earnings | 20 years | ||
Minimum percentage return should exceed growth in consumer price index annually (in hundredths) | 5.75% | ||
Maximum investment in international mutual funds (in hundredths) | 30.00% | ||
Percent of international mutual funds equity allocation in emerging markets (in hundredths) | 3.00% | ||
Percent of international mutual funds equity allocation in companies primarily based in Europe and the Pacific Basin (in hundredths) | 20.00% | ||
Discretionary profit sharing contribution as a percentage of participant's eligible compensation (in hundredths) | 5.00% | ||
Matching contribution rate on employees' before-tax contributions, first contribution level (in hundredths) | 80.00% | ||
Employee contributions subject to employer match, first contribution level | $ 1,000 | ||
Matching contribution rate on employees' before-tax contributions, second contribution level (in hundredths) | 40.00% | ||
Employee contributions subject to employer match, second contribution level | $ 2,000 | ||
Matching contribution rate on employees' before-tax contributions, hired after 01/01/2014 (in hundredths) | 100.00% | ||
Employee contributions subject to employer match for employees hired after 01/01/2014 (in hundredths) | 4.00% | ||
Profit sharing and 401(k) savings plan expenses | $ 5,900,000 | $ 5,100,000 | $ 5,000,000 |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Lump sum pension plan benefit payments | $ 11,200,000 | $ 22,400,000 | |
Pension Plan | Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations, maximum (in hundredths) | 40.00% | ||
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care trend rate used for pre-65 benefits (in hundredths) | 7.00% | ||
Age of retirees at which retirement benefits under the plan are terminated | 65 years | ||
Health care trend rate used for pre-65 benefits in 2016 (in hundredths) | 6.50% | ||
Health care trend rate used for pre-65 benefits in 2020 (in hundredths) | 5.00% | ||
Other Postretirement Benefit Plan | Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations, maximum (in hundredths) | 100.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2007 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net deferred tax assets and liabilities [Abstract] | ||||||||||||||||
Total deferred tax assets | $ 636,449 | $ 791,286 | ||||||||||||||
Total deferred tax liabilities | (28,794) | (29,206) | ||||||||||||||
Net deferred tax asset | 607,655 | 762,080 | ||||||||||||||
Components of net deferred tax liability [Abstract] | ||||||||||||||||
Unearned premium reserves | 40,153 | 33,262 | ||||||||||||||
Benefit plans | (12,350) | (14,283) | ||||||||||||||
Federal net operating loss | 520,812 | 680,975 | ||||||||||||||
Loss reserves | 10,883 | 15,536 | ||||||||||||||
Unrealized depreciation in investments | 11,211 | 8,904 | ||||||||||||||
Mortgage investments | 17,751 | 17,386 | ||||||||||||||
Deferred compensation | 12,517 | 12,927 | ||||||||||||||
Other, net | 6,678 | 7,373 | ||||||||||||||
Net deferred tax asset | 607,655 | 762,080 | ||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Provision for income taxes before valuation allowance | $ 172,197 | $ 163,497 | $ 91,607 | |||||||||||||
Change in valuation allowance | 0 | (161,158) | (88,833) | |||||||||||||
Reversal of the valuation allowance | 0 | (686,652) | 0 | |||||||||||||
Provision for (benefit from) income taxes | $ 54,551 | $ 27,131 | $ 56,018 | $ 34,497 | $ 6,584 | $ (695,604) | $ 1,322 | $ 3,385 | 172,197 | (684,313) | 2,774 | |||||
Valuation allowance | 0 | $ 902,300 | ||||||||||||||
Change in deferred tax valuation allowance, included in other comprehensive income | (54,500) | (13,100) | ||||||||||||||
Net operating loss carryforwards, regular tax basis | 1,489,000 | |||||||||||||||
Net operating loss carryforwards for computing the alternative minimum tax | 589,000 | |||||||||||||||
Components of provisions for (benefit from) income taxes [Abstract] | ||||||||||||||||
Current Federal | 9,470 | 8,067 | 2,391 | |||||||||||||
Deferred Federal | 160,657 | (686,652) | 1 | |||||||||||||
Other | 2,070 | (5,728) | 382 | |||||||||||||
Provision for (benefit from) income taxes | 54,551 | $ 27,131 | $ 56,018 | 34,497 | 6,584 | $ (695,604) | $ 1,322 | 3,385 | 172,197 | (684,313) | 2,774 | |||||
Income taxes paid | $ 4,500 | $ 5,400 | $ 1,300 | |||||||||||||
Reconciliation of effective income tax rate [Abstract] | ||||||||||||||||
Federal statutory income tax rate (in hundredths) | 35.00% | 35.00% | 35.00% | |||||||||||||
Valuation allowance (in hundredths) | 0.00% | (173.80%) | (34.90%) | |||||||||||||
Tax exempt municipal bond interest (in hundredths) | (1.90%) | (0.80%) | (0.40%) | |||||||||||||
Other, net (in hundredths) | 0.40% | (0.70%) | 1.40% | |||||||||||||
Effective income tax provision (benefit) rate (in hundredths) | 33.50% | (140.30%) | 1.10% | |||||||||||||
Information regarding income tax examinations [Abstract] | ||||||||||||||||
Amount of IRS assessment for unpaid taxes and penalties related to REMIC issue | 197,500 | |||||||||||||||
Estimate of federal interest that may be due | 200,600 | |||||||||||||||
Amount of payment made related to the IRS assessment on the REMIC issue | $ 65,200 | |||||||||||||||
Amount of IRS assessment for unpaid taxes and penalties related to disallowance of carryback of 2009 net operating loss | 261,400 | |||||||||||||||
Estimate of additional state income taxes and interest that may be due | 50,700 | |||||||||||||||
Unrecognized tax benefits | $ 108,245 | 108,245 | 107,120 | 107,120 | 106,230 | $ 107,120 | $ 106,230 | $ 105,366 | 108,245 | 107,120 | $ 106,230 | |||||
Unrecognized tax benefits [Roll Forward] | ||||||||||||||||
Balance at beginning of year | 108,245 | $ 107,120 | $ 106,230 | 107,120 | 106,230 | 105,366 | ||||||||||
Additions based on tax positions related to the current year | 0 | 0 | 0 | |||||||||||||
Additions for tax positions of prior years | 1,125 | 890 | 864 | |||||||||||||
Reductions for tax positions of prior years | 0 | 0 | 0 | |||||||||||||
Settlements | 0 | 0 | 0 | |||||||||||||
Balance at end of year | $ 108,245 | $ 107,120 | 108,245 | 107,120 | $ 106,230 | |||||||||||
Unrecognized tax benefits [Abstract] | ||||||||||||||||
Total amount of unrecognized tax benefits that would affect effective tax rate | 94,600 | |||||||||||||||
Interest expense recognized during period | $ 1,100 | |||||||||||||||
Unrecognized tax benefits, accrued interest | 28,900 | $ 27,800 | ||||||||||||||
Significant change in unrecognized tax benefits | 108,200 | |||||||||||||||
Approximate net cash outflows upon resolution of IRS matters | $ 52,000 | |||||||||||||||
Deferred Tax Asset, Changes In Current Period | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | 154,800 | |||||||||||||||
Deferred Tax Asset, Changes In Current Period | Other Comprehensive Income (Loss) | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | (6,300) | |||||||||||||||
Deferred Tax Asset, Changes In Current Period | Income Tax Expense (Benefit) | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | 161,100 | |||||||||||||||
Deferred Tax Asset, Changes In Future Periods | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | 747,500 | |||||||||||||||
Deferred Tax Asset, Changes In Future Periods | Other Comprehensive Income (Loss) | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | 60,800 | |||||||||||||||
Deferred Tax Asset, Changes In Future Periods | Income Tax Expense (Benefit) | ||||||||||||||||
Tax provision (benefit) [Abstract] | ||||||||||||||||
Change in valuation allowance | $ 686,700 | |||||||||||||||
Forecast | Internal Revenue Service (IRS) | Minimum | ||||||||||||||||
Information regarding income tax examinations [Abstract] | ||||||||||||||||
Income Tax Examination, Estimate of Possible Loss | 15,000 | |||||||||||||||
Forecast | Internal Revenue Service (IRS) | Maximum | ||||||||||||||||
Information regarding income tax examinations [Abstract] | ||||||||||||||||
Income Tax Examination, Estimate of Possible Loss | $ 25,000 |
Income Taxes - Summary of Chang
Income Taxes - Summary of Changes In Tax Provisions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement In Deferred Tax Asset [Roll Forward] | |||
Balance at December 31, 2014 | $ 0 | $ 902,300 | |
Valuation allowance | $ 0 | 161,158 | $ 88,833 |
Balance at December 31, 2015 | 0 | $ 902,300 | |
Deferred Tax Asset, Changes In Current Period | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Valuation allowance | (154,800) | ||
Deferred Tax Asset, Changes In Current Period | Other Comprehensive Income (Loss) | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Valuation allowance | 6,300 | ||
Deferred Tax Asset, Changes In Current Period | Income Tax Expense (Benefit) | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Valuation allowance | (161,100) | ||
Deferred Tax Asset, Changes In Future Periods | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Valuation allowance | (747,500) | ||
Deferred Tax Asset, Changes In Future Periods | Other Comprehensive Income (Loss) | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Valuation allowance | (60,800) | ||
Deferred Tax Asset, Changes In Future Periods | Income Tax Expense (Benefit) | |||
Movement In Deferred Tax Asset [Roll Forward] | |||
Valuation allowance | $ (686,700) |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Feb. 29, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||
Shares repurchased, weighted average price per share | $ 8.03 | |||
Shares repurchased, value | $ 147.1 | |||
Shareholder rights accompanying each outstanding share of the company's common stock (in number of Rights) | 1 | |||
Common stock, beneficial ownership threshold to be considered an Acquiring Person (in hundredths) | 5.00% | |||
Purchase price (in dollars per share) | $ 45 | |||
Purchase price (in dollars per one-tenth share) | 4.50 | |||
Redemption price (in dollars per Right) | $ 0.001 | |||
Rights | ||||
Debt Instrument [Line Items] | ||||
Period after person becomes acquiring person | 10 days | |||
Common stock purchased per right | 0.1 | |||
5% Convertible Senior Notes due 2017 | ||||
Debt Instrument [Line Items] | ||||
Extinguishment of debt, amount | $ 188.5 | $ 11.5 | ||
Stated interest rate (in hundredths) | 5.00% | |||
5% Convertible Senior Notes due 2017 | 2% Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Extinguishment of debt, amount | $ 292.4 | |||
Stated interest rate (in hundredths) | 2.00% | |||
Repayments of debt (in shares) | 18,300,000 | |||
2% Convertible Senior Notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate (in hundredths) | 2.00% | |||
Convertible Junior Subordinated Debentures Due 2063 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate (in hundredths) | 9.00% | |||
9% Convertible Junior Subordinated Debentures due 2063 | ||||
Debt Instrument [Line Items] | ||||
Extinguishment of debt, amount | $ 132.7 | |||
Stated interest rate (in hundredths) | 9.00% | |||
Reacquisition of convertible junior subordinated debentures-equity component | $ 6.3 |
Statutory Information (Details)
Statutory Information (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)jurisdiction | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Statutory Capital [Abstract] | |||
Percentage of premiums earned required to be maintained as contingency loss reserves (in hundredths) | 50.00% | ||
Period that contingency loss reserves must be held (in years) | 10 years | ||
Percentage of net premiums earned that incurred losses must exceed to enable early withdrawals from contingency loss reserves (in hundredths) | 35.00% | ||
Related Party Transaction [Line Items] | |||
Statutory net income (loss) | $ 106,326,000 | $ (72,767,000) | $ 13,203,000 |
Statutory policyholders' surplus | 1,506,475,000 | 1,608,214,000 | 1,585,164,000 |
Contingency reserve | 1,360,088,000 | 826,706,000 | 318,247,000 |
Dividends paid to the parent company | $ 64,000,000 | ||
Statutory capital requirements [Abstract] | |||
Number of jurisdictions with risk-to-capital requirements | jurisdiction | 16 | ||
Maximum permitted risk-to-capital ratio commonly applied | 25 to 1 | ||
Risk-to-capital ratio on a combined basis at end of period | 12.0 to 1 | ||
Risk-to-capital ratio on combined insurance operations | 12 | ||
Percentage of statutory policyholders surplus used to determine maximum allowable dividends | 10.00% | ||
Maximum | |||
Statutory capital requirements [Abstract] | |||
Risk to capital ratio | 25 | ||
Mortgage Guaranty Insurance Corporation | |||
Related Party Transaction [Line Items] | |||
Loss ratio | 26.00% | ||
Additions to the surplus of MGIC from parent company funds | $ 36,025,000 | 0 | 0 |
Dividends paid to the parent company | $ 64,000,000 | 0 | 0 |
Statutory capital requirements [Abstract] | |||
Risk to capital ratio | 10.7 | ||
Risk to capital ratio at end of period | 10.7 to 1 | ||
Amount of policyholders position above or below required MPP | $ 1,600,000,000 | ||
Amount of required MPP | $ 1,100,000,000 | ||
Adjusted statutory net income measurement period | 3 years | ||
Adjusted statutory net income dividend payment measurement period | 2 years | ||
Adjustment to statutory net income | $ 490,000,000 | ||
Other Insurance Subsidiaries | |||
Related Party Transaction [Line Items] | |||
Dividends paid to the parent company | 6,500,000 | 0 | |
Distributions from other insurance subsidiaries to the parent company | $ 52,001,000 | $ 38,500,000 | $ 0 |
Share-based Compensation Plan78
Share-based Compensation Plans (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation cost | $ 11.4 | $ 11.9 | $ 9.2 |
Income tax benefit from compensation cost | $ 4 | $ 4.2 | $ 3.2 |
Shares [Roll Forward] | |||
Restricted stock outstanding at end of period (in shares) | 3,100,000 | ||
Restricted Stock/Restricted Stock Units | |||
Weighted average grant date fair market value [Abstract] | |||
Restricted stock outstanding at end of period (in dollars per share) | $ 7.97 | ||
Granted (in dollars per share) | 5.66 | $ 9.03 | $ 8.43 |
Vested (in dollars per share) | 7 | ||
Forfeited (in dollars per share) | 4.24 | ||
Restricted stock outstanding at end of period (in dollars per share) | $ 7.44 | $ 7.97 | |
Shares [Roll Forward] | |||
Restricted stock outstanding at beginning of period (in shares) | 3,319,467 | ||
Granted (in shares) | 1,689,300 | ||
Vested (in shares) | (1,707,711) | ||
Forfeited (in shares) | (154,384) | ||
Restricted stock outstanding at end of period (in shares) | 3,146,672 | 3,319,467 | |
Additional disclosures [Abstract] | |||
Restricted stock, performance shares (in shares) | 2,300,000 | ||
Restricted stock, time vested shares (in shares) | 800,000 | ||
Total fair value of restricted stock vested | $ 12.2 | $ 17.2 | $ 12.1 |
Unrecognized compensation cost | 11.7 | ||
Unrecognized compensation cost, performance shares | 8.9 | ||
Unrecognized compensation cost, time vested shares | $ 2.8 | ||
Weighted-average period for recognition of compensation cost | 1 year 3 months 18 days | ||
2015 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares can be awarded under the plan (in shares) | 10,000,000 | ||
Additional disclosures [Abstract] | |||
Shares available for future grants (in shares) | 8,300,000 | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Leases [Abstract] | |||
Remaining term of operating leases (in years) | 5 years | ||
Total rental expense under operating leases | $ 2,100 | $ 2,200 | $ 2,800 |
Minimum future operating lease payments [Abstract] | |||
2,017 | 665 | ||
2,018 | 676 | ||
2,019 | 688 | ||
2,020 | 490 | ||
2021 and thereafter | 46 | ||
Total | $ 2,565 |
Litigation and Contingencies (D
Litigation and Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Average paid claim reduction due to curtailments (in hundredths) | 5.50% | 6.70% |
Maximum exposure to loss | $ 295 |
Unaudited Quarterly Financial81
Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net premiums earned | $ 235,053 | $ 237,376 | $ 231,456 | $ 221,341 | $ 226,192 | $ 239,234 | $ 213,508 | $ 217,288 | $ 925,226 | $ 896,222 | $ 844,371 |
Investment income, net of expenses | 28,094 | 27,515 | 27,248 | 27,809 | 27,926 | 25,939 | 25,756 | 24,120 | 110,666 | 103,741 | 87,647 |
Realized (losses) gains | (52) | 5,092 | 836 | 3,056 | 1,228 | 640 | 166 | 26,327 | 8,932 | 28,361 | 1,357 |
Other revenue | 3,425 | 3,867 | 3,994 | 6,373 | 3,087 | 3,698 | 3,699 | 2,480 | 17,659 | 12,964 | 9,259 |
Loss incurred, net | 47,658 | 60,897 | 46,590 | 85,012 | 95,066 | 76,458 | 90,238 | 81,785 | 240,157 | 343,547 | 496,077 |
Underwriting and other expenses, net | 56,824 | 53,981 | 49,837 | 56,439 | 53,858 | 65,805 | 37,915 | 51,969 | 217,081 | 209,547 | |
Loss on debt extinguishment | 0 | 75,223 | 1,868 | 13,440 | 507 | 0 | 0 | 0 | 90,531 | 507 | 837 |
Provision for income tax | 54,551 | 27,131 | 56,018 | 34,497 | 6,584 | (695,604) | 1,322 | 3,385 | 172,197 | (684,313) | 2,774 |
Net income | $ 107,487 | $ 56,618 | $ 109,221 | $ 69,191 | $ 102,418 | $ 822,852 | $ 113,654 | $ 133,076 | $ 342,517 | $ 1,172,000 | $ 251,949 |
Earnings per Share [Abstract] | |||||||||||
Basic (in dollars per share) | $ 0.31 | $ 0.16 | $ 0.32 | $ 0.20 | $ 0.30 | $ 2.42 | $ 0.33 | $ 0.39 | $ 1 | $ 3.45 | $ 0.74 |
Diluted (in dollars per share) | $ 0.28 | $ 0.14 | $ 0.26 | $ 0.17 | $ 0.24 | $ 1.78 | $ 0.28 | $ 0.32 | $ 0.86 | $ 2.60 | $ 0.64 |
SCHEDULE I - SUMMARY OF INVES82
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | $ 4,724,356 |
Fair Value | 4,692,350 |
Amount at which shown in the balance sheet | 4,692,350 |
Fixed income | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 4,717,212 |
Fair Value | 4,685,222 |
Amount at which shown in the balance sheet | 4,685,222 |
Fixed income | U.S. Treasury securities and obligations of U.S. government corporations and agencies | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 73,847 |
Fair Value | 73,530 |
Amount at which shown in the balance sheet | 73,530 |
Fixed income | Obligations of U.S. states and political subdivisions | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 2,147,458 |
Fair Value | 2,143,016 |
Amount at which shown in the balance sheet | 2,143,016 |
Fixed income | Foreign governments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 0 |
Fair Value | 0 |
Amount at which shown in the balance sheet | 0 |
Fixed income | Public utilities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 176,184 |
Fair Value | 175,084 |
Amount at which shown in the balance sheet | 175,084 |
Fixed income | ABS | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 59,519 |
Fair Value | 59,565 |
Amount at which shown in the balance sheet | 59,565 |
Fixed income | Collateralized loan obligations | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 121,151 |
Fair Value | 121,174 |
Amount at which shown in the balance sheet | 121,174 |
Fixed income | Mortgage-backed | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 558,775 |
Fair Value | 544,026 |
Amount at which shown in the balance sheet | 544,026 |
Fixed income | All other corporate bonds | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 1,580,278 |
Fair Value | 1,568,827 |
Amount at which shown in the balance sheet | 1,568,827 |
Equity Securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 7,144 |
Fair Value | 7,128 |
Amount at which shown in the balance sheet | 7,128 |
Equity Securities | Industrial, miscellaneous and all other | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized Cost | 7,144 |
Fair Value | 7,128 |
Amount at which shown in the balance sheet | $ 7,128 |
SCHEDULE II - CONDENSED FINAN83
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
ASSETS | ||||||||||||||
Fixed income (amortized cost, 2016 – $247,396; 2015 – $385,281) | $ 4,685,222 | $ 4,657,561 | ||||||||||||
Cash and cash equivalents | $ 155,410 | $ 181,120 | $ 181,120 | $ 197,882 | $ 181,120 | $ 197,882 | $ 332,692 | 155,410 | 181,120 | $ 197,882 | ||||
Accrued investment income | 44,073 | 40,224 | ||||||||||||
Other assets | 73,345 | 80,102 | ||||||||||||
Total assets | 5,734,529 | 5,868,343 | ||||||||||||
Liabilities: | ||||||||||||||
Senior notes | 417,406 | 0 | ||||||||||||
Convertible senior notes | 349,461 | 822,301 | ||||||||||||
Convertible junior subordinated debentures | 256,872 | 389,522 | ||||||||||||
Total liabilities | 3,185,687 | 3,632,203 | ||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock (one dollar par value, shares authorized 1,000,000; shares issued 2016 - 359,400; 2015 - 340,097; outstanding 2016 - 340,663; 2015 - 339,657) | 359,400 | 340,097 | ||||||||||||
Paid-in capital | 1,782,337 | 1,670,238 | ||||||||||||
Treasury stock (shares at cost 2016 – 18,737; 2015 – 440) | (150,359) | (3,362) | ||||||||||||
Accumulated other comprehensive loss, net of tax | (75,100) | (60,880) | ||||||||||||
Retained earnings | 632,564 | 290,047 | ||||||||||||
Total shareholders' equity | 2,548,842 | 2,236,140 | 1,036,903 | |||||||||||
Total liabilities and shareholders' equity | 5,734,529 | 5,868,343 | ||||||||||||
Parenthetical information [Abstract] | ||||||||||||||
Fixed income, amortized cost | $ 4,717,211 | $ 4,684,148 | ||||||||||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||||||||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||||||||||||
Common stock, shares issued (in shares) | 359,400,000 | 340,097,000 | ||||||||||||
Common stock, shares outstanding (in shares) | 340,663,000 | 339,657,000 | ||||||||||||
Treasury stock, shares at cost (in shares) | 18,737,000 | 440,000 | ||||||||||||
Revenues: | ||||||||||||||
Investment income, net of expenses | 28,094 | $ 27,515 | $ 27,248 | 27,809 | 27,926 | $ 25,939 | $ 25,756 | 24,120 | 110,666 | 103,741 | 87,647 | |||
Realized (losses) gains | (52) | 5,092 | 836 | 3,056 | 1,228 | 640 | 166 | 26,327 | 8,932 | 28,361 | 1,357 | |||
Total revenues | 1,062,483 | 1,041,288 | 942,634 | |||||||||||
Expenses: | ||||||||||||||
Interest expense | 56,672 | 68,932 | 69,648 | |||||||||||
Loss on debt extinguishment | 0 | 75,223 | 1,868 | 13,440 | 507 | 0 | 0 | 0 | 90,531 | 507 | 837 | |||
Total losses and expenses | 547,769 | 553,601 | 687,911 | |||||||||||
Income before tax | 514,714 | 487,687 | 254,723 | |||||||||||
Provision for (benefit from) income taxes | 54,551 | 27,131 | 56,018 | 34,497 | 6,584 | (695,604) | 1,322 | 3,385 | 172,197 | (684,313) | 2,774 | |||
Net income | 107,487 | 56,618 | 109,221 | 69,191 | 102,418 | 822,852 | 113,654 | 133,076 | 342,517 | 1,172,000 | 251,949 | |||
Other comprehensive (loss) income, net of tax | (14,220) | 20,461 | 36,385 | |||||||||||
Comprehensive income | 328,297 | 1,192,461 | 288,334 | |||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | 107,487 | 56,618 | 109,221 | 69,191 | 102,418 | 822,852 | 113,654 | 133,076 | 342,517 | 1,172,000 | 251,949 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||
Deferred Federal | 160,657 | (686,652) | 1 | |||||||||||
Loss on debt extinguishment | 0 | $ 75,223 | $ 1,868 | 13,440 | 507 | $ 0 | $ 0 | 0 | 90,531 | 507 | 837 | |||
Change in certain assets and liabilities: | ||||||||||||||
Accrued investment income | (3,849) | (9,706) | 1,142 | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchase of fixed income | (1,360,386) | (2,462,844) | (1,979,917) | |||||||||||
Sale of fixed income | 728,042 | 1,796,153 | 1,147,624 | |||||||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from issuance of long-term debt | 573,094 | 0 | 0 | |||||||||||
Repayment of long-term debt | 0 | (61,953) | (20,772) | |||||||||||
Repurchase of convertible senior notes | (363,778) | (11,152) | 0 | |||||||||||
Repurchase of common stock | (147,127) | 0 | 0 | |||||||||||
Excess tax benefits related to share-based compensation | 67 | 2,117 | 0 | |||||||||||
Net decrease in cash and cash equivalents | (25,710) | (16,762) | (134,810) | |||||||||||
Cash and cash equivalents at beginning of year | 181,120 | 197,882 | 181,120 | 197,882 | 332,692 | |||||||||
Cash and cash equivalents at end of year | 155,410 | 181,120 | 155,410 | 181,120 | 197,882 | |||||||||
Parent Company | ||||||||||||||
ASSETS | ||||||||||||||
Fixed income (amortized cost, 2016 – $247,396; 2015 – $385,281) | $ 245,435 | $ 382,565 | ||||||||||||
Cash and cash equivalents | 37,666 | 19,417 | 19,417 | 10,507 | 19,417 | 10,507 | 20,725 | 37,666 | 19,417 | $ 10,507 | ||||
Investment in subsidiaries, at equity in net assets | 3,150,671 | 2,903,944 | ||||||||||||
Accounts receivable - affiliates | 780 | 938 | ||||||||||||
Income taxes - current and deferred | 289,703 | 151,318 | ||||||||||||
Accrued investment income | 1,749 | 3,700 | ||||||||||||
Other assets | 80 | 123 | ||||||||||||
Total assets | 3,726,084 | 3,462,005 | ||||||||||||
Liabilities: | ||||||||||||||
Senior notes | 417,406 | 0 | ||||||||||||
Convertible senior notes | 349,461 | 822,301 | ||||||||||||
Convertible junior subordinated debentures | 389,522 | 389,522 | ||||||||||||
Accrued interest | 20,853 | 14,042 | ||||||||||||
Total liabilities | 1,177,242 | 1,225,865 | ||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock (one dollar par value, shares authorized 1,000,000; shares issued 2016 - 359,400; 2015 - 340,097; outstanding 2016 - 340,663; 2015 - 339,657) | 359,400 | 340,097 | ||||||||||||
Paid-in capital | 1,782,337 | 1,670,238 | ||||||||||||
Treasury stock (shares at cost 2016 – 18,737; 2015 – 440) | (150,359) | (3,362) | ||||||||||||
Accumulated other comprehensive loss, net of tax | (75,100) | (60,880) | ||||||||||||
Retained earnings | 632,564 | 290,047 | ||||||||||||
Total shareholders' equity | 2,548,842 | 2,236,140 | ||||||||||||
Total liabilities and shareholders' equity | 3,726,084 | 3,462,005 | ||||||||||||
Parenthetical information [Abstract] | ||||||||||||||
Fixed income, amortized cost | $ 247,396 | $ 385,281 | ||||||||||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||||||||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||||||||||||
Common stock, shares issued (in shares) | 359,400,000 | 340,097,000 | ||||||||||||
Common stock, shares outstanding (in shares) | 340,663,000 | 339,657,000 | ||||||||||||
Treasury stock, shares at cost (in shares) | 18,737,000 | 440,000 | ||||||||||||
Revenues: | ||||||||||||||
Investment income, net of expenses | 3,807 | 7,586 | 6,985 | |||||||||||
Realized (losses) gains | 646 | 357 | 395 | |||||||||||
Total revenues | 4,453 | 7,943 | 7,380 | |||||||||||
Expenses: | ||||||||||||||
Operating expenses | 1,409 | 582 | 546 | |||||||||||
Interest expense | 64,598 | 68,932 | 69,648 | |||||||||||
Loss on debt extinguishment | 82,234 | 507 | 837 | |||||||||||
Total losses and expenses | 148,241 | 70,021 | 71,031 | |||||||||||
Income before tax | (143,788) | (62,078) | (63,651) | |||||||||||
Provision for (benefit from) income taxes | (52,575) | (125,487) | 0 | |||||||||||
Equity in net income of subsidiaries | 433,730 | 1,108,591 | 315,600 | |||||||||||
Net income | 342,517 | 1,172,000 | 251,949 | |||||||||||
Other comprehensive (loss) income, net of tax | (14,220) | 20,461 | 36,385 | |||||||||||
Comprehensive income | 328,297 | 1,192,461 | 288,334 | |||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | 342,517 | 1,172,000 | 251,949 | |||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||
Equity in net income of subsidiaries | (433,730) | (1,108,591) | (315,600) | |||||||||||
Dividends received from subsidiaries | 64,000 | 6,500 | 0 | |||||||||||
Deferred Federal | (55,988) | (125,532) | 0 | |||||||||||
Loss on debt extinguishment | 82,234 | 507 | 837 | |||||||||||
Other | 11,625 | 22,342 | 14,025 | |||||||||||
Change in certain assets and liabilities: | ||||||||||||||
Accounts receivable - affiliates | 158 | (626) | 68 | |||||||||||
Income taxes receivable | 3,602 | (8,308) | 480 | |||||||||||
Accrued investment income | 1,951 | (265) | 194 | |||||||||||
Accrued interest | 6,811 | (652) | (188) | |||||||||||
Net cash used in operating activities | 23,180 | (42,625) | (48,235) | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Capital distributions from subsidiaries | 51,987 | 32,000 | 0 | |||||||||||
Capital contributions to subsidiaries | (36,025) | 0 | 0 | |||||||||||
Purchase of fixed income | (194,751) | (295,010) | (553,538) | |||||||||||
Sale of fixed income | 330,142 | 386,385 | 613,322 | |||||||||||
Net cash provided by investing activities | 151,353 | 123,375 | 59,784 | |||||||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from issuance of long-term debt | 416,967 | 0 | 0 | |||||||||||
Repayment of long-term debt | 0 | (61,953) | (21,767) | |||||||||||
Repurchase of convertible senior notes | (426,191) | (12,004) | 0 | |||||||||||
Repurchase of common stock | (147,127) | 0 | 0 | |||||||||||
Excess tax benefits related to share-based compensation | 67 | 2,117 | 0 | |||||||||||
Net cash used in financing activities | (156,284) | (71,840) | (21,767) | |||||||||||
Net decrease in cash and cash equivalents | 18,249 | 8,910 | (10,218) | |||||||||||
Cash and cash equivalents at beginning of year | $ 19,417 | $ 10,507 | 19,417 | 10,507 | 20,725 | |||||||||
Cash and cash equivalents at end of year | $ 37,666 | $ 19,417 | $ 37,666 | $ 19,417 | $ 10,507 |
SCHEDULE II - CONDENSED FINAN84
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - SUPPLEMENTARY NOTES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplementary Insurance Information, by Segment [Line Items] | ||||
Percentage of statutory policyholders surplus used to determine maximum allowable dividends | 10.00% | |||
Dividends paid to the parent company | $ 64,000,000 | |||
Convertible junior subordinated debentures | $ 256,872,000 | $ 389,522,000 | ||
Mortgage Guaranty Insurance Corporation | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Adjusted statutory net income measurement period | 3 years | |||
Adjusted statutory net income dividend payment measurement period | 2 years | |||
Dividends paid to the parent company | $ 64,000,000 | 0 | $ 0 | |
Additions to the surplus of MGIC from parent company funds | 36,025,000 | 0 | 0 | |
Other Insurance Subsidiaries | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Dividends paid to the parent company | 6,500,000 | 0 | ||
Distributions from other insurance subsidiaries to the parent company | 52,001,000 | 38,500,000 | 0 | |
Proceeds from contribution from parent | 0 | $ 0 | ||
Parent Company | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Convertible junior subordinated debentures | $ 389,522,000 | $ 389,522,000 | ||
Convertible Junior Subordinated Debentures Due 2063 | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Stated interest rate (in hundredths) | 9.00% | |||
9% Convertible Junior Subordinated Debentures due 2063 | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Stated interest rate (in hundredths) | 9.00% | |||
Extinguishment of debt, amount | $ 132,700,000 |
SCHEDULE IV - REINSURANCE (Deta
SCHEDULE IV - REINSURANCE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |||
Gross Amount | $ 1,058,545 | $ 997,892 | $ 950,973 |
Ceded to Other Companies | 133,981 | 102,848 | 108,255 |
Assumed From Other Companies | 662 | 1,178 | 1,653 |
Net Amount | $ 925,226 | $ 896,222 | $ 844,371 |
Percentage of Amount Assumed to Net | 0.10% | 0.10% | 0.20% |