Contracts Accounted for as Insurance (Tables)

6 Months Ended

Jun. 30, 2025


	Second Quarter				Six Months
	2025		2024		2025		2024
	(in millions)
Financial guaranty insurance:
Scheduled net earned premiums	$	75	$	72	$	151	$	143
Accelerations from refundings and terminations	4		3		9		42
Accretion of discount on net premiums receivable	9		8		18		15
Financial guaranty insurance net earned premiums	88		83		178		200
Specialty net earned premiums	1		1		2		3
Net earned premiums	$	89	$	84	$	180	$	203

Gross Premium Receivable, Net of Commissions Payable on Assumed Business Roll Forward

Gross Premium Receivable,

Net of Commissions Payable on Assumed Business and Allowance for Credit Losses

Roll Forward


	Six Months
	2025		2024
	(in millions)
Beginning of year	$	1,551	$	1,468
Less: Specialty insurance premium receivable	1		1
Financial guaranty insurance premiums receivable	1,550		1,467
New business and supplemental premiums, net of commissions	124		220
Gross premiums received, net of commissions	(154)		(188)
Adjustments:
Changes in the expected term and debt service assumptions	(7)		(29)
Accretion of discount, net of commissions on assumed business	17		11
Foreign exchange gain (loss) on remeasurement	101		(10)
Change in allowance for credit losses	(1)		—
Financial guaranty insurance premium receivable	1,630		1,471
Specialty insurance premium receivable	1		1
June 30,	$	1,631	$	1,472

Financial Guaranty Insurance

Expected Future Premium Collections and Earnings


	As of June 30, 2025
			Future Net Premiums to be Earned (2)
	Future Premiums to be Collected (1)		Earnings of Deferred Premium Revenue		Accretion of Discount		Total
	(in millions)
2025 (July 1 - September 30)	$	76	$	77	$	10	$	87
2025 (October 1 - December 31)	43		76		10		86
Subtotal 2025	119		153		20		173
2026	141		286		37		323
2027	132		267		34		301
2028	125		253		32		285
2029	113		236		30		266
2030-2034	446		939		127		1,066
2035-2039	342		615		92		707
2040-2044	262		405		61		466
2045-2049	198		268		35		303
2050-2054	121		139		15		154
After 2054	129		108		13		121
Total	$	2,128	$	3,669	$	496	$	4,165

____________________

(1) Net of assumed commissions payable.

(2) Net of reinsurance.

Selected Information for Policies Paid in Installments

Selected Information for Financial Guaranty Insurance Policies with Premiums Paid in Installments


	As of
	June 30, 2025		December 31, 2024
	(dollars in millions)
Premiums receivable, net of commissions payable	$	1,630	$	1,550
Deferred premium revenue	1,870		1,901
Weighted-average risk-free rate used to discount premiums	2.5%		2.5%
Weighted-average period of premiums receivable (in years)	12.1		12.3

Loss and LAE Reserve and Salvage and Subrogation Recoverable Net of Reinsurance Insurance Contracts

The following table provides information on net reserve (salvage), which includes loss and LAE reserves and salvage and subrogation recoverable, both net of reinsurance.

Net Reserve (Salvage) by Sector


	As of
Sector	June 30, 2025		December 31, 2024
	(in millions)
Public finance:
U.S. public finance	$	19	$	(14)
Non-U.S. public finance	25		5
Public finance	44		(9)
Structured finance:
U.S. RMBS	(138)		(151)
Other structured finance	28		33
Structured finance	(110)		(118)
Total	$	(66)	$	(127)

Reconciliation of Net Expected Loss to be Paid and Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts

The table below provides a reconciliation of net expected loss to be paid (recovered) for financial guaranty insurance contracts to net expected loss to be expensed. Expected loss to be paid (recovered) for financial guaranty insurance contracts differs from expected loss to be expensed due to: (i) the contra-paid, which represents the claim payments made and recoveries received that have not yet been recognized in the statements of operations; (ii) salvage and subrogation recoverable for transactions that are in a net recovery position where the Company has not yet received recoveries on claims previously paid (and therefore recognized in income but not yet received); and (iii) loss reserves that have already been established (and therefore expensed but not yet paid).

Reconciliation of Net Expected Loss to be Paid (Recovered) to Net Expected Loss to be Expensed

Financial Guaranty Insurance Contracts


	As of June 30, 2025
	(in millions)
Net expected loss to be paid (recovered) - financial guaranty insurance	$	170
Contra-paid, net	23
Salvage and subrogation recoverable, net	380
Loss and LAE reserve - financial guaranty insurance contracts, net of reinsurance	(313)
Net expected loss to be expensed (present value)	$	260

Net Expected Loss to be Expensed Insurance Contracts

The following table provides a schedule of the expected timing of financial guaranty net expected losses to be expensed. The amount and timing of actual loss and LAE may differ from the estimates shown below due to factors such as accelerations, commutations, changes in expected lives and updates to loss estimates. This table excludes amounts related to FG VIEs, which are eliminated in consolidation.

Net Expected Loss to be Expensed

Financial Guaranty Insurance Contracts


	As of June 30, 2025
	(in millions)
2025 (July 1 - September 30)	$	3
2025 (October 1 - December 31)	4
Subtotal 2025	7
2026	14
2027	17
2028	19
2029	19
2030-2034	80
2035-2039	39
2040-2044	20
2045-2049	26
2050-2054	17
After 2054	2
Net expected loss to be expensed (present value)	260
Future expected accretion	36
Total expected future loss and LAE	$	296

Loss and LAE Reported on the Consolidated Statements of Operations

The following table presents the loss and LAE (benefit) reported in the condensed consolidated statements of operations by sector for insurance contracts.

Loss and LAE (Benefit) by Sector


	Second Quarter				Six Months
Sector	2025		2024		2025		2024
	(in millions)
Public finance:
U.S. public finance	$	15	$	1	$	51	$	(1)
Non-U.S. public finance	14		—		20		—
Public finance	29		1		71		(1)
Structured finance:
U.S. RMBS	$	—	$	(5)	—		(3)
Other structured finance	(1)		2		(3)		1
Structured finance	(1)		(3)		(3)		(2)
Loss and LAE (benefit)	$	28	$	(2)	$	68	$	(3)

BIG Net Par Outstanding and Number of Risks

Financial Guaranty Portfolio

BIG Net Par Outstanding and Number of Risks

As of June 30, 2025


	Net Par Outstanding						Number of Risks (2)
Description	Financial Guaranty Insurance (1)		Credit Derivatives		Total		Financial Guaranty Insurance (1)	Credit Derivatives	Total
	(dollars in millions)
BIG 1	$	5,528	$	26	$	5,554	91	3	94
BIG 2	3,546		4		3,550		13	1	14
BIG 3	1,404		—		1,404		98	3	101
Total BIG	$	10,478	$	30	$	10,508	202	7	209

Financial Guaranty Portfolio

BIG Net Par Outstanding and Number of Risks

As of December 31, 2024


	Net Par Outstanding						Number of Risks (2)
Description	Financial Guaranty Insurance (1)		Credit Derivatives		Total		Financial Guaranty Insurance (1)	Credit Derivatives	Total
	(dollars in millions)
BIG 1	$	8,074	$	28	$	8,102	98	3	101
BIG 2	702		4		706		12	1	13
BIG 3	1,374		—		1,374		97	3	100
Total BIG	$	10,150	$	32	$	10,182	207	7	214

_____________________

(1) Includes FG VIEs.

(2) A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments

The following tables provide information on financial guaranty insurance contracts categorized as BIG.

Financial Guaranty Insurance

BIG Transaction Loss Summary

As of June 30, 2025


	Gross								Net Total BIG
	BIG 1		BIG 2		BIG 3		Total BIG
	(dollars in millions)
Number of risks (1)	91		13		98		202		202
Remaining weighted-average period (in years)	11.6		24.5		5.5		16.8		16.8

Outstanding exposure:
Par	$	5,534	$	3,546	$	1,412	$	10,492	$	10,478
Interest	3,395		4,899		392		8,686		8,684
Total (2)	$	8,929	$	8,445	$	1,804	$	19,178	$	19,162

Expected cash outflows (inflows)	$	129	$	2,659	$	1,342	$	4,130	$	4,121
Potential recoveries (3)	(367)		(2,412)		(1,146)		(3,925)		(3,915)
Subtotal	(238)		247		196		205		206
Discount	45		(63)		(18)		(36)		(36)
Expected losses to be paid (recovered)	$	(193)	$	184	$	178	$	169	$	170

Deferred premium revenue	$	198	$	142	$	112	$	452	$	452
Reserves (salvage)	$	(235)	$	76	$	91	$	(68)	$	(67)

Financial Guaranty Insurance

BIG Transaction Loss Summary

As of December 31, 2024


	Gross								Net Total BIG
	BIG 1		BIG 2		BIG 3		Total BIG
	(dollars in millions)
Number of risks (1)	98		12		97		207		207
Remaining weighted-average period (in years)	18.6		8.8		6.1		16.6		16.6

Outstanding exposure:
Par	$	8,080	$	702	$	1,382	$	10,164	$	10,150
Interest	7,546		371		421		8,338		8,335
Total (2)	$	15,626	$	1,073	$	1,803	$	18,502	$	18,485

Expected cash outflows (inflows)	$	4,016	$	342	$	1,307	$	5,665	$	5,656
Potential recoveries (3)	(4,201)		(293)		(1,132)		(5,626)		(5,616)
Subtotal	(185)		49		175		39		40
Discount	43		29		(23)		49		49
Expected losses to be paid (recovered)	$	(142)	$	78	$	152	$	88	$	89

Deferred premium revenue	$	333	$	49	$	116	$	498	$	498
Reserves (salvage)	$	(226)	$	35	$	62	$	(129)	$	(128)

____________________

(1)A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments.

(2)Includes amounts related to FG VIEs.

(3)Represents expected inflows from future payments by obligors pursuant to restructuring agreements, settlements, excess spread on any underlying collateral and other estimated recoveries. Potential recoveries also include recoveries on certain investment grade credits, related mainly to exposures that were previously BIG and for which claims have been paid in the past.