v3.26.1
Contracts Accounted for as Financial Guaranty Insurance
 3 Months Ended
Mar. 31, 2026
Insurance [Abstract]  
Contracts Accounted for as Financial Guaranty Insurance Contracts Accounted for as Financial Guaranty Insurance
The portfolio of outstanding exposures discussed in Note 4. Outstanding Exposure, and Note 5. Expected Loss to be Paid (Recovered), includes contracts that are accounted for as FG insurance contracts, credit derivatives and consolidated FG VIEs. Amounts presented in this note relate only to contracts accounted for as FG insurance, unless otherwise specified. See Note 8. Derivatives, for amounts related to CDS, and Note 10. Variable Interest Entities, for amounts related to consolidated FG VIEs.

Premiums

Net Earned Premiums
 First Quarter
 20262025
 (in millions)
FG insurance:
Scheduled net earned premiums$76 $76 
Accelerations from refundings, terminations and modifications (1)(6)5 
Accretion of discount on net premiums receivable10 9 
FG insurance net earned premiums80 90 
Specialty net earned premiums2 1 
  Net earned premiums$82 $91 
____________________
(1)    Negative net earned premiums for first quarter 2026 resulted from significant modifications to FG insurance contracts.
Gross Premium Receivable,
Net of Commissions Payable on Assumed Business and Allowance for Credit Losses
Roll Forward
 First Quarter
 20262025
 (in millions)
Beginning of year$1,572 $1,551 
Less: Specialty insurance premium receivable2 1 
FG insurance premiums receivable1,570 1,550 
New business and supplemental premiums, net of commissions72 39 
Gross premiums received, net of commissions (74)(58)
Adjustments:
Changes in the expected term and debt service assumptions(4)(5)
Accretion of discount, net of commissions on assumed business2 8 
Foreign exchange gain (loss) on remeasurement(25)33 
FG insurance premium receivable1,541 1,567 
Specialty insurance premium receivable2 1 
March 31,$1,543 $1,568 

Approximately 67% and 68% of gross premiums receivable, net of commissions payable, as of March 31, 2026 and December 31, 2025, respectively, are denominated in currencies other than the U.S. dollar, primarily the pound sterling and euro.
 
The timing and cumulative amount of actual collections and net earned premiums may differ from those of expected collections and of expected net earned premiums in the table below due to factors such as foreign exchange rate fluctuations, counterparty collectability issues, accelerations, commutations, restructurings, changes in the consumer price indices, changes in expected lives, new business and changes in ratings of the insured obligations and/or the Company’s FG insurance subsidiaries.
FG Insurance
Expected Future Premium Collections and Earnings
 As of March 31, 2026
Future Net Premiums to be Earned (2)
Future Premiums
to be Collected (1)		Earnings of Deferred Premium RevenueAccretion of
Discount		Total
 (in millions)
2026 (April 1 - June 30)$82 $81 $10 $91 
2026 (July 1 - September 30)52 79 10 89 
2026 (October 1 - December 31)31 77 10 87 
Subtotal 2026165 237 30 267 
2027139 289 37 326 
2028129 270 34 304 
2029115 250 32 282 
2030102 232 30 262 
2031-2035417 902 128 1,030 
2036-2040331 584 92 676 
2041-2045250 387 60 447 
2046-2050187 248 33 281 
2051-2055106 120 14 134 
After 2055101 86 10 96 
Total$2,042 $3,605 $500 $4,105 
____________________
(1)    Net of assumed commissions payable.
(2)    Net of reinsurance.

Selected Information for FG Insurance Policies with Premiums Paid in Installments
As of
 March 31, 2026December 31, 2025
 (dollars in millions)
Premiums receivable, net of commissions payable$1,541$1,570
Deferred premium revenue$1,825$1,831
Weighted-average risk-free rate used to discount premiums2.8%2.7%
Weighted-average period of premiums receivable (in years)11.711.7

FG Insurance Contracts’ Losses Reported in the Condensed Consolidated Financial Statements

Loss and LAE reserve and salvage and subrogation recoverable are discounted at risk-free rates for FG insurance obligations that ranged from 1.93% to 5.68% with a weighted average of 4.17% as of March 31, 2026 and 1.93% to 5.35% with a weighted average of 3.93% as of December 31, 2025.
The following table provides information on net reserve (salvage), which includes loss and LAE reserve and salvage and subrogation recoverable, both net of reinsurance.

Net Reserve (Salvage) by Sector
As of
SectorMarch 31, 2026December 31, 2025
 (in millions)
Public finance:
U.S. public finance$(64)$(66)
Non-U.S. public finance 24 18 
Public finance(40)(48)
Structured finance:
U.S. RMBS(143)(150)
Other structured finance59 59 
Structured finance(84)(91)
Total$(124)$(139)

The table below provides a reconciliation of net expected loss to be paid (recovered) for FG insurance contracts to net expected loss to be expensed. Expected loss to be paid (recovered) for FG 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
FG Insurance Contracts
As of March 31, 2026
 (in millions)
Net expected loss to be paid (recovered) - FG insurance $129 
Contra-paid, net 22 
Salvage and subrogation recoverable, net433 
Loss and LAE reserve - FG insurance contracts, net of reinsurance(309)
Net expected loss to be expensed (present value)$275 

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, changes in foreign exchange rates and updates to loss estimates. This table excludes amounts related to FG VIEs, which are eliminated in consolidation.
Net Expected Loss to be Expensed
FG Insurance Contracts
 As of March 31, 2026
 (in millions)
2026 (April 1 - June 30)$4 
2026 (July 1 - September 30)3 
2026 (October 1 - December 31)3 
Subtotal 202610 
202718 
202818 
202918 
203016 
2031-203568 
2036-204042 
2041-204534 
2046-205032 
2051-205516 
After 20553 
Net expected loss to be expensed (present value)275 
Future expected accretion19 
Total expected future loss and LAE$294 
 
The following table presents the loss and LAE (benefit) reported in the condensed consolidated statements of operations by sector for FG insurance contracts.

Loss and LAE (Benefit) by Sector
 First Quarter
Sector20262025
(in millions)
Public finance:
U.S. public finance$12 $36 
Non-U.S. public finance7 6 
Public finance19 42 
Structured finance:
U.S. RMBS(1)— 
Other structured finance(1)(2)
Structured finance(2)(2)
Loss and LAE (benefit)$17 $40 
The following tables provide information on FG insurance contracts categorized as BIG.

FG Insurance
BIG Transaction Loss Summary
As of March 31, 2026
 GrossNet Total BIG
 BIG 1BIG 2BIG 3Total BIG
(dollars in billions)
Number of risks (1)86 14 92 192 192 
Remaining weighted-average period (in years)14.023.85.218.518.6
Outstanding exposure:    
Par$3.61 $3.82 $1.19 $8.62 $8.61 
Interest2.46 4.73 0.29 7.48 7.48 
Total (2)$6.07 $8.55 $1.48 $16.10 $16.09 
GrossNet Total BIG
BIG 1BIG 2BIG 3Total BIG
(in millions)
Expected cash outflows (inflows) $915 $1,127 $1,219 $3,261 $3,253 
Potential recoveries (3)(1,192)(835)(1,088)(3,115)(3,105)
Subtotal(277)292 131 146 148 
Discount85 (101)(3)(19)(19)
Expected losses to be paid (recovered)$(192)$191 $128 $127 $129 
Deferred premium revenue$161 $160 $99 $420 $420 
Reserves (salvage)$(251)$77 $48 $(126)$(124)
FG Insurance
BIG Transaction Loss Summary
As of December 31, 2025
 GrossNet Total BIG
 BIG 1BIG 2BIG 3Total BIG
(dollars in billions)
Number of risks (1)87 13 95 195 195 
Remaining weighted-average period (in years)14.024.15.418.718.7
Outstanding exposure: 
Par$3.73 $3.81 $1.21 $8.75 $8.73 
Interest2.52 4.84 0.32 7.68 7.68 
Total (2)$6.25 $8.65 $1.53 $16.43 $16.41 
GrossNet Total BIG
BIG 1BIG 2BIG 3Total BIG
(in millions)
Expected cash outflows (inflows) $172 $1,141 $1,242 $2,555 $2,547 
Potential recoveries (3)(445)(877)(1,110)(2,432)(2,422)
Subtotal(273)264 132 123 125 
Discount47 (77)(8)(38)(38)
Expected losses to be paid (recovered)$(226)$187 $124 $85 $87 
Deferred premium revenue$164 $162 $103 $429 $429 
Reserves (salvage)$(255)$71 $43 $(141)$(140)
____________________
(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.