Contracts Accounted for as Financial Guaranty Insurance (Tables)

9 Months Ended

Sep. 30, 2026


	Third Quarter				Nine Months
	2026		2025		2026		2025
	(in millions)
Financial guaranty insurance:
Scheduled net earned premiums	$	80	$	77	$	236	$	228
Accelerations from refundings, terminations and modifications	18		5		23		14
Accretion of discount on net premiums receivable	12		10		32		28
Financial guaranty insurance net earned premiums	110		92		291		270
Specialty net earned premiums	2		2		5		4
Net earned premiums	$	112	$	94	$	296	$	274

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


	Nine Months
	2026		2025
	(in millions)
Beginning of year	$	1,572	$	1,551
Less: Specialty insurance premium receivable	2		1
Financial guaranty insurance premiums receivable	1,570		1,550
New business and supplemental premiums, net of commissions	275		214
Gross premiums received, net of commissions	(299)		(265)
Adjustments:
Changes in the expected term and debt service assumptions	(2)		(23)
Accretion of discount, net of commissions on assumed business	22		26
Foreign exchange gain (loss) on remeasurement	(23)		81
Change in allowance for credit losses	(3)		(1)
Financial guaranty insurance premium receivable	1,540		1,582
Specialty insurance premium receivable	2		1
As of September 30,	$	1,542	$	1,583

Financial Guaranty Insurance

Expected Future Premium Collections and Earnings


	As of September 30, 2026
			Future Net Premiums to be Earned (2)
	Future Premiums to be Collected (1)		Earnings of Deferred Premium Revenue		Accretion of Discount		Total
	(in millions)

2026 (October 1 - December 31)	$	68	$	81	$	11	$	92

2027	164		303		40		343
2028	133		280		38		318
2029	117		257		35		292
2030	105		239		34		273
2031-2035	436		937		144		1,081
2036-2040	354		611		106		717
2041-2045	273		409		72		481
2046-2050	208		266		42		308
2051-2055	123		133		20		153
After 2055	126		103		17		120
Total	$	2,107	$	3,619	$	559	$	4,178

____________________

(1) Net of assumed commissions payable. The future premiums to be collected are not adjusted for the allowance for credit losses.

(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
	September 30, 2026		December 31, 2025
	(dollars in millions)
Premiums receivable, net of commissions payable	$	1,540	$	1,570
Deferred premium revenue	$	1,815	$	1,831
Weighted-average risk-free rate used to discount premiums	3.0%		2.7%
Weighted-average period of premiums receivable (in years)	12.1		11.7

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 reserve and salvage and subrogation recoverable, both net of reinsurance.

Net Reserve (Salvage) by Sector


	As of
Sector	September 30, 2026		December 31, 2025
	(in millions)
Public finance:
U.S. public finance	$	(137)	$	(66)
Non-U.S. public finance	33		18
Public finance	(104)		(48)
Structured finance:
U.S. RMBS	(125)		(150)
Other structured finance	58		59
Structured finance	(67)		(91)
Total	$	(171)	$	(139)

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 September 30, 2026
	(in millions)
Net expected loss to be paid (recovered) - Financial guaranty insurance	$	101
Contra-paid, net	22
Salvage and subrogation recoverable, net	450
Loss and LAE reserve - Financial guaranty insurance contracts, net of reinsurance	(279)
Net expected loss to be expensed (present value)	$	294

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, changes in foreign exchange rates, changes in ratings of insured obligations 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 September 30, 2026
	(in millions)
2026 (October 1 - December 31)	$	3
2027	15
2028	18
2029	17
2030	17
2031-2035	83
2036-2040	50
2041-2045	38
2046-2050	34
2051-2055	16
After 2055	3
Net expected loss to be expensed (present value)	294
Future expected accretion	(8)
Total expected future loss and LAE	$	286

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 financial guaranty insurance contracts.

Loss and LAE (Benefit) by Sector


	Third Quarter				Nine Months
Sector	2026		2025		2026		2025
	(in millions)
Public finance:
U.S. public finance	$	—	$	(5)	$	9	$	46
Non-U.S. public finance	1		(2)		12		18
Public finance	1		(7)		21		64
Structured finance:
U.S. RMBS	—		(25)		1		(25)
Other structured finance	1		2		1		(1)
Structured finance	1		(23)		2		(26)
Loss and LAE (benefit)	$	2	$	(30)	$	23	$	38

BIG Net Par Outstanding and Number of Risks

Financial Guaranty Portfolio

BIG Net Par Outstanding and Number of Risks

As of September 30, 2026


	Net Par Outstanding						Number of Risks (2)
Description	Financial Guaranty Insurance (1)		Credit Derivatives		Total		Financial Guaranty Insurance (1)	Credit Derivatives	Total
	(dollars in billions)
BIG 1	$	3.11	$	0.03	$	3.14	80	3	83
BIG 2	3.82		—		3.82		14	1	15
BIG 3	1.06		—		1.06		92	3	95
Total BIG	$	7.99	$	0.03	$	8.02	186	7	193

Financial Guaranty Portfolio

BIG Net Par Outstanding and Number of Risks

As of December 31, 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 billions)
BIG 1	$	3.71	$	0.03	$	3.74	87	3	90
BIG 2	3.81		—		3.81		13	1	14
BIG 3	1.21		—		1.21		95	3	98
Total BIG	$	8.73	$	0.03	$	8.76	195	7	202

_____________________

(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 September 30, 2026


	Gross								Net Total BIG
	BIG 1		BIG 2		BIG 3		Total BIG
	(dollars in billions)
Number of risks (1)	80		14		92		186		186
Remaining weighted-average period (in years)	14.9		23.4		5.5		19.0		19.1

Outstanding exposure:
Par	$	3.12	$	3.82	$	1.06	$	8.00	$	7.99
Interest	2.34		4.81		0.28		7.43		7.43
Total (2)	$	5.46	$	8.63	$	1.34	$	15.43	$	15.42

	Gross								Net Total BIG
	BIG 1		BIG 2		BIG 3		Total BIG
	(in millions)
Expected cash outflows (inflows)	$	906	$	1,146	$	1,101	$	3,153	$	3,147
Potential recoveries (3)	(1,165)		(868)		(1,031)		(3,064)		(3,054)
Subtotal	(259)		278		70		89		93
Discount	119		(94)		(17)		8		8
Expected losses to be paid (recovered)	$	(140)	$	184	$	53	$	97	$	101

Deferred premium revenue	$	147	$	157	$	93	$	397	$	397
Reserves (salvage)	$	(226)	$	74	$	(22)	$	(174)	$	(171)

Financial Guaranty Insurance

BIG Transaction Loss Summary

As of December 31, 2025


	Gross								Net Total BIG
	BIG 1		BIG 2		BIG 3		Total BIG
	(dollars in billions)
Number of risks (1)	87		13		95		195		195
Remaining weighted-average period (in years)	14.0		24.1		5.4		18.7		18.7

Outstanding exposure:
Par	$	3.73	$	3.81	$	1.21	$	8.75	$	8.73
Interest	2.52		4.84		0.32		7.68		7.68
Total (2)	$	6.25	$	8.65	$	1.53	$	16.43	$	16.41

	Gross								Net Total BIG
	BIG 1		BIG 2		BIG 3		Total 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
Discount	47		(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 primarily to exposures that were previously BIG and for which claims have been paid in the past.