Fair Value Measurement (Tables)
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9 Months Ended |
Sep. 30, 2026 |
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| Fair Value Disclosures [Abstract] |
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| Fair Value Hierarchy of Financial Instruments Carried at Fair Value |
Amounts recorded at fair value in the Company’s condensed consolidated financial statements are presented in the tables below.
Fair Value Hierarchy of Financial Instruments Carried at Fair Value As of September 30, 2026 | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Hierarchy | | | | Level 1 | | Level 2 | | Level 3 | | Total | | (in millions) | | Assets: | | | | | | | | | Fixed-maturity securities, available-for-sale: | | | | | | | | | Obligations of state and political subdivisions | $ | — | | | $ | 1,341 | | | $ | 9 | | | $ | 1,350 | | | U.S. government and agencies | — | | | 43 | | | — | | | 43 | | | Corporate securities | — | | | 3,118 | | | 158 | | | 3,276 | | | Mortgage-backed securities: | | | | | | | | | RMBS | — | | | 542 | | | 147 | | | 689 | | | CMBS | — | | | 249 | | | 17 | | | 266 | | | Asset-backed securities | — | | | 174 | | | 484 | | | 658 | | | Non-U.S. government securities | — | | | 224 | | | — | | | 224 | | | Total fixed-maturity securities, available-for-sale | — | | | 5,691 | | | 815 | | | 6,506 | | | Fixed-maturity securities, trading | — | | | 82 | | | 3 | | | 85 | | | Short-term investments | 945 | | | 5 | | | — | | | 950 | | | Other invested assets (1) | — | | | — | | | 3 | | | 3 | | | Funds withheld | — | | | — | | | 267 | | | 267 | | | FG VIEs’ assets | 12 | | | 8 | | | 138 | | | 158 | | | Other assets | 81 | | | 75 | | | 24 | | | 180 | | | Total assets carried at fair value | $ | 1,038 | | | $ | 5,861 | | | $ | 1,250 | | | $ | 8,149 | | | Liabilities: | | | | | | | | | FG VIEs’ liabilities (2) | $ | — | | | $ | — | | | $ | 140 | | | $ | 140 | | | Other liabilities | — | | | 4 | | | 20 | | | 24 | | | Total liabilities carried at fair value | $ | — | | | $ | 4 | | | $ | 160 | | | $ | 164 | |
Fair Value Hierarchy of Financial Instruments Carried at Fair Value As of December 31, 2025 | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Hierarchy | | | | Level 1 | | Level 2 | | Level 3 | | Total | | (in millions) | | Assets: | | | | | | | | | Fixed-maturity securities, available-for sale: | | | | | | | | | Obligations of state and political subdivisions | $ | — | | | $ | 1,759 | | | $ | 10 | | | $ | 1,769 | | | U.S. government and agencies | — | | | 52 | | | — | | | 52 | | | Corporate securities | — | | | 2,784 | | | 168 | | | 2,952 | | | Mortgage-backed securities: | | | | | | | | | RMBS | — | | | 471 | | | 144 | | | 615 | | | CMBS | — | | | 198 | | | — | | | 198 | | | Asset-backed securities | — | | | 154 | | | 511 | | | 665 | | | Non-U.S. government securities | — | | | 118 | | | — | | | 118 | | | Total fixed-maturity securities, available-for-sale | — | | | 5,536 | | | 833 | | | 6,369 | | | Fixed-maturity securities, trading | — | | | 120 | | | 4 | | | 124 | | | Short-term investments | 898 | | | 5 | | | — | | | 903 | | | Other invested assets (1) | — | | | — | | | 3 | | | 3 | | | FG VIEs’ assets | 15 | | | 7 | | | 150 | | | 172 | | | Assets of CIVs, equity securities | — | | | — | | | 167 | | | 167 | | | Other assets | 81 | | | 65 | | | 28 | | | 174 | | | Total assets carried at fair value | $ | 994 | | | $ | 5,733 | | | $ | 1,185 | | | $ | 7,912 | | | Liabilities: | | | | | | | | | FG VIEs’ liabilities (2) | $ | — | | | $ | — | | | $ | 197 | | | $ | 197 | | | Other liabilities | — | | | — | | | 21 | | | 21 | | | Total liabilities carried at fair value | $ | — | | | $ | — | | | $ | 218 | | | $ | 218 | |
___________________ (1) Other invested assets include Level 3 mortgage loans that are recorded at fair value on a non-recurring basis. (2) FG VIEs’ liabilities include those with and without recourse, some of which are measured at fair value on a nonrecurring basis as of December 31, 2025. See Note 10. Variable Interest Entities.
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| Fair Value Assets Measured on Recurring Basis |
The tables below present a roll forward of the Company’s Level 3 financial instruments carried at fair value on a recurring basis during third quarter 2026, third quarter 2025, nine months 2026 and nine months 2025.
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Third Quarter 2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fixed-Maturity Securities, Available-for-Sale | | | | | | | | | | | | | Obligations
of State and
Political
Subdivisions | | Corporate | | RMBS | | CMBS | | Asset-
Backed
Securities | | Fixed-Maturity Securities, Trading | | Funds Withheld | | FG VIEs’
Assets | | | | Other
(7) | | | (in millions) | | Fair value as of June 30, 2026 | $ | 10 | | | $ | 160 | | | $ | 155 | | | $ | — | | | $ | 463 | | | $ | 4 | | | $ | 296 | | | $ | 143 | | | | | $ | 22 | | | | Assured Life Re Acquisition-measurement period adjustment | — | | | — | | | — | | | — | | | — | | | — | | | (6) | | | — | | | | | — | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | | | | | | | | | | | | | | | | | Net income (loss) | — | | | 1 | | (1) | 2 | | (1) | — | | | 3 | | (1) | — | | | 2 | | (6) | (1) | | (2) | | | (1) | | (3) | | Other comprehensive income (loss) | — | | | (3) | | | (4) | | | — | | | (3) | | | — | | | — | | | — | | | | | (1) | | | | Purchases | — | | | — | | | — | | | — | | | 52 | | | — | | | — | | | — | | | | | — | | | | Sales | — | | | — | | | — | | | — | | | (2) | | | — | | | — | | | — | | | | | — | | | | Settlements | (1) | | | — | | | (6) | | | — | | | (29) | | | (1) | | | (25) | | | (4) | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | Transfers into Level 3 | — | | | — | | | — | | | 17 | | | — | | | — | | | — | | | — | | | | | — | | | | Fair value as of September 30, 2026 | $ | 9 | | | $ | 158 | | | $ | 147 | | | $ | 17 | | | $ | 484 | | | $ | 3 | | | $ | 267 | | | $ | 138 | | | | | $ | 20 | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2026 included in: | | | | | | | | | | | | | | | | | | | | | | Earnings | | | | | | | | | | | $ | — | | | $ | 2 | | (6) | $ | (2) | | (2) | | | $ | (1) | | (3) | | OCI | $ | — | | | $ | (3) | | | $ | (4) | | | $ | — | | | $ | (3) | | | | | | | | | | | $ | (1) | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Third Quarter 2026 | | | | | | | | | | | | | | | | Credit Derivative
Liability, net (5) | | FG VIEs’ Liabilities (8) | | | (in millions) | | Fair value as of June 30, 2026 | $ | (14) | | | $ | (147) | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | Net income (loss) | 2 | | (6) | 3 | | (2) | | Other comprehensive income (loss) | — | | | — | | | | Settlements | (2) | | | 4 | | | | Fair value as of September 30, 2026 | $ | (14) | | | $ | (140) | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2026 included in: | | | | | | Earnings | $ | 1 | | (6) | $ | 3 | | (2) | | OCI | | | $ | 1 | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Third Quarter 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fixed-Maturity Securities, Available-for-Sale | | | | | | | | | | Obligations
of State and
Political
Subdivisions | | Corporate | | RMBS | | Asset-
Backed
Securities | | Fixed-Maturity Securities, Trading | | FG VIEs’
Assets | | Assets of CIVs | | Other
(7) | | | (in millions) | | Fair value as of June 30, 2025 | $ | 10 | | | $ | 84 | | | $ | 142 | | | $ | 977 | | | $ | 4 | | | $ | 153 | | | $ | 121 | | | $ | 5 | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | | | | | | | | | | | | | Net income (loss) | — | | | 1 | | (1) | 3 | | (1) | 3 | | (1) | 1 | | (9) | 7 | | (2) | 11 | | (4) | 9 | | (3) | | Other comprehensive income (loss) | — | | | 10 | | | 6 | | | (3) | | | — | | | — | | | — | | | 1 | | | | Purchases | — | | | 73 | | | — | | | 40 | | | — | | | — | | | — | | | — | | | | Sales | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | Settlements | — | | | — | | | (6) | | | (496) | | | (1) | | | (6) | | | — | | | — | | | | Deconsolidations | — | | | — | | | — | | | — | | | — | | | (9) | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair value as of September 30, 2025 | $ | 10 | | | $ | 168 | | | $ | 145 | | | $ | 521 | | | $ | 4 | | | $ | 145 | | | $ | 132 | | | $ | 15 | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2025 included in: | | | | | | | | | | | | | | | | | | Earnings | | | | | | | | | $ | — | | | $ | 6 | | (2) | $ | 11 | | (4) | $ | 9 | | (3) | | OCI | $ | — | | | $ | 10 | | | $ | 6 | | | $ | (2) | | | | | | | | | $ | 1 | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Third Quarter 2025 | | | | | | | | | | | | | | | | Credit Derivative
Liability, net (5) | | FG VIEs’ Liabilities (8) | | | (in millions) | | Fair value as of June 30, 2025 | $ | (29) | | | $ | (161) | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | Net income (loss) | 5 | | (6) | (4) | | (2) | | Other comprehensive income (loss) | — | | | 1 | | | | Settlements | (2) | | | 5 | | | | | | | | | Fair value as of September 30, 2025 | $ | (26) | | | $ | (159) | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2025 included in: | | | | | | Earnings | $ | 3 | | (6) | $ | (4) | | (2) | | OCI | | | $ | 1 | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Nine Months 2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fixed-Maturity Securities, Available-for-Sale | | | | | | | | | | | | Obligations
of State and
Political
Subdivisions | | Corporate | | RMBS | | CMBS | | Asset-
Backed
Securities | | Fixed-Maturity Securities, Trading | | Funds Withheld | | FG VIEs’
Assets | | Assets of CIVs | | Other
(7) | | | (in millions) | | Fair value as of December 31, 2025 | $ | 10 | | | $ | 168 | | | $ | 144 | | | $ | — | | | $ | 511 | | | $ | 4 | | | $ | — | | | $ | 150 | | | $ | 167 | | | $ | 24 | | | | Assured Life Re Acquisition | — | | | — | | | — | | | — | | | — | | | — | | | 287 | | | — | | | — | | | — | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | | | | | | | | | | | | | | | | | Net income (loss) | — | | | 3 | | (1) | 6 | | (1) | — | | | 1 | | (1) | — | | | 9 | | (6) | 2 | | (2) | 4 | | (4) | (3) | | (3) | | Other comprehensive income (loss) | — | | | (13) | | | 12 | | | — | | | (29) | | | — | | | — | | | — | | | — | | | (1) | | | | Purchases | — | | | — | | | 2 | | | — | | | 114 | | | — | | | — | | | — | | | — | | | — | | | | Sales | — | | | — | | | — | | | — | | | (2) | | | — | | | (29) | | | — | | | — | | | — | | | | Settlements | (1) | | | — | | | (17) | | | — | | | (111) | | | (6) | | | — | | | (14) | | | (165) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | Deconsolidations | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (6) | | | — | | | | Transfers into Level 3 | — | | | — | | | — | | | 17 | | | — | | | 5 | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | Fair value as of September 30, 2026 | $ | 9 | | | $ | 158 | | | $ | 147 | | | $ | 17 | | | $ | 484 | | | $ | 3 | | | $ | 267 | | | $ | 138 | | | $ | — | | | $ | 20 | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2026 included in: | | | | | | | | | | | | | | | | | | | | | | Earnings | | | | | | | | | | | $ | (1) | | (9) | $ | 9 | | (6) | $ | — | | | $ | — | | | $ | (3) | | (3) | | OCI | $ | — | | | $ | (13) | | | $ | 12 | | | $ | — | | | $ | (29) | | | | | | | | | | | $ | (1) | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Nine Months 2026 | | | | | | | | | | | | | | | | Credit Derivative
Liability, net (5) | | FG VIEs’ Liabilities (8) | | | (in millions) | | Fair value as of December 31, 2025 | $ | (15) | | | $ | (156) | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | Net income (loss) | 5 | | (6) | 2 | | (2) | | Other comprehensive income (loss) | — | | | 2 | | | | Settlements | (4) | | | 12 | | | | | | | | | Fair value as of September 30, 2026 | $ | (14) | | | $ | (140) | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2026 included in: | | | | | | Earnings | $ | 1 | | | $ | 3 | | | | OCI | | | $ | 3 | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Nine Months 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fixed-Maturity Securities, Available-for-Sale | | | | | | | | | | | Obligations
of State and
Political
Subdivisions | | Corporate | | RMBS | | Asset-
Backed
Securities | | Fixed-Maturity Securities, Trading | | FG VIEs’
Assets | | Assets of CIVs | | Other
(7) | | | (in millions) | | Fair value as of December 31, 2024 | $ | 10 | | | $ | — | | | $ | 145 | | | $ | 1,031 | | | $ | 5 | | | $ | 147 | | | $ | 99 | | | $ | 5 | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | | | | | | | | | | | | | Net income (loss) | 2 | | (1) | 1 | | (1) | 7 | | (1) | 21 | | (1) | 1 | | (9) | 14 | | (2) | 33 | | (4) | 10 | | (3) | | Other comprehensive income (loss) | — | | | 20 | | | 12 | | | 8 | | | — | | | — | | | — | | | — | | | | Purchases | — | | | 147 | | | — | | | 40 | | | — | | | — | | | — | | | — | | | | Sales | — | | | — | | | — | | | (12) | | | — | | | — | | | — | | | — | | | | Settlements | (2) | | | — | | | (19) | | | (567) | | | (2) | | | (16) | | | — | | | — | | | | Consolidations | — | | | — | | | — | | | — | | | — | | | 9 | | | — | | | — | | | | Deconsolidations | — | | | — | | | — | | | — | | | — | | | (9) | | | — | | | — | | | | Fair value as of September 30, 2025 | $ | 10 | | | $ | 168 | | | $ | 145 | | | $ | 521 | | | $ | 4 | | | $ | 145 | | | $ | 132 | | | $ | 15 | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2025 included in: | | | | | | | | | | | | | | | | | | Earnings | | | | | | | | | $ | — | | | $ | 11 | | (2) | $ | 33 | | (4) | $ | 10 | | (3) | | OCI | $ | — | | | $ | 20 | | | $ | 12 | | | $ | (20) | | | | | | | | | $ | — | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Nine Months 2025 | | | | | | | | | | | | | | | | Credit Derivative
Liability, net (5) | | FG VIEs’ Liabilities (8) | | | (in millions) | | Fair value as of December 31, 2024 | $ | (29) | | | $ | (164) | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | Net income (loss) | 110 | | (6) | (9) | | (2) | | Other comprehensive income (loss) | — | | | 1 | | | | Settlements | (107) | | | 13 | | | | Fair value as of September 30, 2025 | $ | (26) | | | $ | (159) | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2025 included in: | | | | | | Earnings | $ | 3 | | (6) | $ | (8) | | (2) | | OCI | | | $ | 1 | | |
____________________ (1)Included in “net realized investment gains (losses)” or “net investment income.” (2)Reported in “gains (losses) on financial guaranty variable interest entities.” (3)Reported in “fair value gains (losses) on committed capital securities,” “net investment income” or “other income (loss).” (4)Reported in “fair value gains (losses) on consolidated investment vehicles.” (5)Represents the net position of credit derivatives. Credit derivative assets (reported in “other assets”) and credit derivative liabilities (reported in “other liabilities”) are shown as either assets or liabilities in the condensed consolidated balance sheets. (6)Reported in “fair value gains (losses) on derivatives.” (7)Includes CCS and other invested assets. (8)Includes FG VIEs’ liabilities with recourse and FG VIEs’ liabilities without recourse. (9)Reported in “fair value gains (losses) on trading securities.”
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| Fair Value, Liabilities Measured on Recurring Basis |
The tables below present a roll forward of the Company’s Level 3 financial instruments carried at fair value on a recurring basis during third quarter 2026, third quarter 2025, nine months 2026 and nine months 2025.
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Third Quarter 2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fixed-Maturity Securities, Available-for-Sale | | | | | | | | | | | | | Obligations
of State and
Political
Subdivisions | | Corporate | | RMBS | | CMBS | | Asset-
Backed
Securities | | Fixed-Maturity Securities, Trading | | Funds Withheld | | FG VIEs’
Assets | | | | Other
(7) | | | (in millions) | | Fair value as of June 30, 2026 | $ | 10 | | | $ | 160 | | | $ | 155 | | | $ | — | | | $ | 463 | | | $ | 4 | | | $ | 296 | | | $ | 143 | | | | | $ | 22 | | | | Assured Life Re Acquisition-measurement period adjustment | — | | | — | | | — | | | — | | | — | | | — | | | (6) | | | — | | | | | — | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | | | | | | | | | | | | | | | | | Net income (loss) | — | | | 1 | | (1) | 2 | | (1) | — | | | 3 | | (1) | — | | | 2 | | (6) | (1) | | (2) | | | (1) | | (3) | | Other comprehensive income (loss) | — | | | (3) | | | (4) | | | — | | | (3) | | | — | | | — | | | — | | | | | (1) | | | | Purchases | — | | | — | | | — | | | — | | | 52 | | | — | | | — | | | — | | | | | — | | | | Sales | — | | | — | | | — | | | — | | | (2) | | | — | | | — | | | — | | | | | — | | | | Settlements | (1) | | | — | | | (6) | | | — | | | (29) | | | (1) | | | (25) | | | (4) | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | Transfers into Level 3 | — | | | — | | | — | | | 17 | | | — | | | — | | | — | | | — | | | | | — | | | | Fair value as of September 30, 2026 | $ | 9 | | | $ | 158 | | | $ | 147 | | | $ | 17 | | | $ | 484 | | | $ | 3 | | | $ | 267 | | | $ | 138 | | | | | $ | 20 | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2026 included in: | | | | | | | | | | | | | | | | | | | | | | Earnings | | | | | | | | | | | $ | — | | | $ | 2 | | (6) | $ | (2) | | (2) | | | $ | (1) | | (3) | | OCI | $ | — | | | $ | (3) | | | $ | (4) | | | $ | — | | | $ | (3) | | | | | | | | | | | $ | (1) | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Third Quarter 2026 | | | | | | | | | | | | | | | | Credit Derivative
Liability, net (5) | | FG VIEs’ Liabilities (8) | | | (in millions) | | Fair value as of June 30, 2026 | $ | (14) | | | $ | (147) | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | Net income (loss) | 2 | | (6) | 3 | | (2) | | Other comprehensive income (loss) | — | | | — | | | | Settlements | (2) | | | 4 | | | | Fair value as of September 30, 2026 | $ | (14) | | | $ | (140) | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2026 included in: | | | | | | Earnings | $ | 1 | | (6) | $ | 3 | | (2) | | OCI | | | $ | 1 | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Third Quarter 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fixed-Maturity Securities, Available-for-Sale | | | | | | | | | | Obligations
of State and
Political
Subdivisions | | Corporate | | RMBS | | Asset-
Backed
Securities | | Fixed-Maturity Securities, Trading | | FG VIEs’
Assets | | Assets of CIVs | | Other
(7) | | | (in millions) | | Fair value as of June 30, 2025 | $ | 10 | | | $ | 84 | | | $ | 142 | | | $ | 977 | | | $ | 4 | | | $ | 153 | | | $ | 121 | | | $ | 5 | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | | | | | | | | | | | | | Net income (loss) | — | | | 1 | | (1) | 3 | | (1) | 3 | | (1) | 1 | | (9) | 7 | | (2) | 11 | | (4) | 9 | | (3) | | Other comprehensive income (loss) | — | | | 10 | | | 6 | | | (3) | | | — | | | — | | | — | | | 1 | | | | Purchases | — | | | 73 | | | — | | | 40 | | | — | | | — | | | — | | | — | | | | Sales | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | Settlements | — | | | — | | | (6) | | | (496) | | | (1) | | | (6) | | | — | | | — | | | | Deconsolidations | — | | | — | | | — | | | — | | | — | | | (9) | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair value as of September 30, 2025 | $ | 10 | | | $ | 168 | | | $ | 145 | | | $ | 521 | | | $ | 4 | | | $ | 145 | | | $ | 132 | | | $ | 15 | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2025 included in: | | | | | | | | | | | | | | | | | | Earnings | | | | | | | | | $ | — | | | $ | 6 | | (2) | $ | 11 | | (4) | $ | 9 | | (3) | | OCI | $ | — | | | $ | 10 | | | $ | 6 | | | $ | (2) | | | | | | | | | $ | 1 | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Third Quarter 2025 | | | | | | | | | | | | | | | | Credit Derivative
Liability, net (5) | | FG VIEs’ Liabilities (8) | | | (in millions) | | Fair value as of June 30, 2025 | $ | (29) | | | $ | (161) | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | Net income (loss) | 5 | | (6) | (4) | | (2) | | Other comprehensive income (loss) | — | | | 1 | | | | Settlements | (2) | | | 5 | | | | | | | | | Fair value as of September 30, 2025 | $ | (26) | | | $ | (159) | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2025 included in: | | | | | | Earnings | $ | 3 | | (6) | $ | (4) | | (2) | | OCI | | | $ | 1 | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Nine Months 2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fixed-Maturity Securities, Available-for-Sale | | | | | | | | | | | | Obligations
of State and
Political
Subdivisions | | Corporate | | RMBS | | CMBS | | Asset-
Backed
Securities | | Fixed-Maturity Securities, Trading | | Funds Withheld | | FG VIEs’
Assets | | Assets of CIVs | | Other
(7) | | | (in millions) | | Fair value as of December 31, 2025 | $ | 10 | | | $ | 168 | | | $ | 144 | | | $ | — | | | $ | 511 | | | $ | 4 | | | $ | — | | | $ | 150 | | | $ | 167 | | | $ | 24 | | | | Assured Life Re Acquisition | — | | | — | | | — | | | — | | | — | | | — | | | 287 | | | — | | | — | | | — | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | | | | | | | | | | | | | | | | | Net income (loss) | — | | | 3 | | (1) | 6 | | (1) | — | | | 1 | | (1) | — | | | 9 | | (6) | 2 | | (2) | 4 | | (4) | (3) | | (3) | | Other comprehensive income (loss) | — | | | (13) | | | 12 | | | — | | | (29) | | | — | | | — | | | — | | | — | | | (1) | | | | Purchases | — | | | — | | | 2 | | | — | | | 114 | | | — | | | — | | | — | | | — | | | — | | | | Sales | — | | | — | | | — | | | — | | | (2) | | | — | | | (29) | | | — | | | — | | | — | | | | Settlements | (1) | | | — | | | (17) | | | — | | | (111) | | | (6) | | | — | | | (14) | | | (165) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | Deconsolidations | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (6) | | | — | | | | Transfers into Level 3 | — | | | — | | | — | | | 17 | | | — | | | 5 | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | Fair value as of September 30, 2026 | $ | 9 | | | $ | 158 | | | $ | 147 | | | $ | 17 | | | $ | 484 | | | $ | 3 | | | $ | 267 | | | $ | 138 | | | $ | — | | | $ | 20 | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2026 included in: | | | | | | | | | | | | | | | | | | | | | | Earnings | | | | | | | | | | | $ | (1) | | (9) | $ | 9 | | (6) | $ | — | | | $ | — | | | $ | (3) | | (3) | | OCI | $ | — | | | $ | (13) | | | $ | 12 | | | $ | — | | | $ | (29) | | | | | | | | | | | $ | (1) | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Nine Months 2026 | | | | | | | | | | | | | | | | Credit Derivative
Liability, net (5) | | FG VIEs’ Liabilities (8) | | | (in millions) | | Fair value as of December 31, 2025 | $ | (15) | | | $ | (156) | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | Net income (loss) | 5 | | (6) | 2 | | (2) | | Other comprehensive income (loss) | — | | | 2 | | | | Settlements | (4) | | | 12 | | | | | | | | | Fair value as of September 30, 2026 | $ | (14) | | | $ | (140) | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2026 included in: | | | | | | Earnings | $ | 1 | | | $ | 3 | | | | OCI | | | $ | 3 | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Nine Months 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fixed-Maturity Securities, Available-for-Sale | | | | | | | | | | | Obligations
of State and
Political
Subdivisions | | Corporate | | RMBS | | Asset-
Backed
Securities | | Fixed-Maturity Securities, Trading | | FG VIEs’
Assets | | Assets of CIVs | | Other
(7) | | | (in millions) | | Fair value as of December 31, 2024 | $ | 10 | | | $ | — | | | $ | 145 | | | $ | 1,031 | | | $ | 5 | | | $ | 147 | | | $ | 99 | | | $ | 5 | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | | | | | | | | | | | | | Net income (loss) | 2 | | (1) | 1 | | (1) | 7 | | (1) | 21 | | (1) | 1 | | (9) | 14 | | (2) | 33 | | (4) | 10 | | (3) | | Other comprehensive income (loss) | — | | | 20 | | | 12 | | | 8 | | | — | | | — | | | — | | | — | | | | Purchases | — | | | 147 | | | — | | | 40 | | | — | | | — | | | — | | | — | | | | Sales | — | | | — | | | — | | | (12) | | | — | | | — | | | — | | | — | | | | Settlements | (2) | | | — | | | (19) | | | (567) | | | (2) | | | (16) | | | — | | | — | | | | Consolidations | — | | | — | | | — | | | — | | | — | | | 9 | | | — | | | — | | | | Deconsolidations | — | | | — | | | — | | | — | | | — | | | (9) | | | — | | | — | | | | Fair value as of September 30, 2025 | $ | 10 | | | $ | 168 | | | $ | 145 | | | $ | 521 | | | $ | 4 | | | $ | 145 | | | $ | 132 | | | $ | 15 | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2025 included in: | | | | | | | | | | | | | | | | | | Earnings | | | | | | | | | $ | — | | | $ | 11 | | (2) | $ | 33 | | (4) | $ | 10 | | (3) | | OCI | $ | — | | | $ | 20 | | | $ | 12 | | | $ | (20) | | | | | | | | | $ | — | | |
Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Nine Months 2025 | | | | | | | | | | | | | | | | Credit Derivative
Liability, net (5) | | FG VIEs’ Liabilities (8) | | | (in millions) | | Fair value as of December 31, 2024 | $ | (29) | | | $ | (164) | | | | Total pre-tax realized and unrealized gains (losses) recorded in: | | | | | | Net income (loss) | 110 | | (6) | (9) | | (2) | | Other comprehensive income (loss) | — | | | 1 | | | | Settlements | (107) | | | 13 | | | | Fair value as of September 30, 2025 | $ | (26) | | | $ | (159) | | | Change in unrealized gains (losses) related to financial instruments held as of September 30, 2025 included in: | | | | | | Earnings | $ | 3 | | (6) | $ | (8) | | (2) | | OCI | | | $ | 1 | | |
____________________ (1)Included in “net realized investment gains (losses)” or “net investment income.” (2)Reported in “gains (losses) on financial guaranty variable interest entities.” (3)Reported in “fair value gains (losses) on committed capital securities,” “net investment income” or “other income (loss).” (4)Reported in “fair value gains (losses) on consolidated investment vehicles.” (5)Represents the net position of credit derivatives. Credit derivative assets (reported in “other assets”) and credit derivative liabilities (reported in “other liabilities”) are shown as either assets or liabilities in the condensed consolidated balance sheets. (6)Reported in “fair value gains (losses) on derivatives.” (7)Includes CCS and other invested assets. (8)Includes FG VIEs’ liabilities with recourse and FG VIEs’ liabilities without recourse. (9)Reported in “fair value gains (losses) on trading securities.”
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| Schedule of Quantitative Information About Level 3 Liabilities, Fair Value Measurements |
Quantitative Information About Level 3 Fair Value Inputs As of September 30, 2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Instrument Description | | Fair Value Assets (Liabilities)
(in millions) | | Significant Unobservable Inputs | | Range | | Weighted Average (3) | | Investments (2): | | | | | | | | | | Fixed-maturity securities, available-for-sale (1): | | | | | | | | | | | | Obligations of state and political subdivisions | | $ | 9 | | | Yield | | 5.3 | % | - | 15.5% | | 8.3% | | Corporate | | 158 | | | Yield | | 6.5 | % | - | 9.5% | | 6.7% | | RMBS | | 147 | | | Conditional prepayment rate (CPR) | | 0.0 | % | - | 18.5% | | 4.5% | | | | | CDR | | 1.2 | % | - | 18.5% | | 5.6% | | | | | Loss severity | | 40.0 | % | - | 125.0% | | 66.1% | | | | | Yield | | 8.1 | % | - | 10.9% | | 8.8% | | CMBS | | 17 | | | Yield | | 9.7% | | | | Asset-backed securities: | | | | | | | | | | | | CLOs | | 423 | | | Discount margin | | 0.4 | % | - | 2.9% | | 1.4% | | | | | Yield | | 12.2 | % | - | 34.9% | | 21.0% | | Others | | 61 | | | Yield | | 9.0% | | | | Fixed-maturity securities, trading (1) | | 3 | | | Yield | | 16.0 | % | - | 17.0% | | 16.4% | | Funds withheld (4) | | 267 | | | Discount margin | | 0.6 | % | - | 69.0% | | 4.2% | | FG VIEs’ assets (1) | | 138 | | | CPR | | 0.4 | % | - | 27.6% | | 6.3% | | | | | CDR | | 1.2 | % | - | 41.0% | | 10.6% | | | | | Loss severity | | 45.0 | % | - | 100.0% | | 83.9% | | | | | Yield | | 6.8 | % | - | 10.2% | | 7.9% | | Other assets (1) | | 18 | | | Implied Yield | | 6.6 | % | - | 7.1% | | 6.9% | | | | | Term (years) | | 10 years | | | | Credit derivative liabilities, net (1) | | (14) | | | Hedge cost (in basis points) (bps) | | 11.0 | - | 27.0 | | 15.1 | | | | | Bank profit (in bps) | | 63.3 | - | 244.9 | | 122.2 | | | | | Internal credit rating | | AAA | - | CCC | | A+ | | | | | Discount rates of future expected premium cash flows | | 4.4 | % | - | 5.1% | | 5.0% | | FG VIEs’ liabilities (1) | | (140) | | | CPR | | 0.4 | % | - | 27.6% | | 6.3% | | | | | CDR | | 1.2 | % | - | 41.0% | | 10.6% | | | | | Loss severity | | 45.0 | % | - | 100.0% | | 83.9% | | | | | Yield | | 5.8 | % | - | 9.7% | | 7.6% |
___________________ (1) Discounted cash flows are used as the primary valuation technique. (2) Excludes several investments reported in “other invested assets” with a fair value of $3 million. (3) Weighted average is calculated as a percentage of current par outstanding for all categories except for “fixed-maturity securities, trading,” and “funds withheld” for which it is calculated as a percentage of fair value. (4) $53 million of funds withheld is backed by Level 3 assets for which the discounted cash flows are used as the primary valuation technique. Quantitative Information About Level 3 Fair Value Inputs As of December 31, 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Instrument Description | | Fair Value Assets (Liabilities)
(in millions) | | Significant Unobservable Inputs | | Range | | Weighted Average (4) | | Investments (2): | | | | | | | | | | | | Fixed-maturity securities, available-for-sale (1): | | | | | | | | | | | | Obligations of state and political subdivisions | | $ | 10 | | | Yield | | 5.2 | % | - | 15.0% | | 6.6% | | Corporate | | 168 | | | Yield | | 5.0 | % | - | 8.0% | | 5.2% | | RMBS | | 144 | | | CPR | | 0.0 | % | - | 21.3% | | 4.1% | | | | | CDR | | 1.2 | % | - | 18.6% | | 5.6% | | | | | Loss severity | | 50.0 | % | - | 125.0% | | 79.2% | | | | | Yield | | 7.0 | % | - | 9.9% | | 8.3% | | Asset-backed securities: | | | | | | | | | | | | CLOs | | 456 | | | Discount margin | | 1.0 | % | - | 2.9% | | 1.7% | | | | | Yield | | 11.0 | % | - | 26.5% | | 19.0% | | Others | | 55 | | Yield | | 9.1% | | | | Fixed-maturity securities, trading (1) | | 4 | | | Yield | | 0.1 | % | - | 8.8% | | 4.4% | | FG VIEs’ assets (1) | | 150 | | | CPR | | 0.2 | % | - | 27.5% | | 5.3% | | | | | CDR | | 1.2 | % | - | 41.0% | | 10.5% | | | | | Loss severity | | 45.0 | % | - | 100.0% | | 83.6% | | | | | Yield | | 6.0 | % | - | 9.8% | | 8.7% | | Assets of CIVs (3) | | 167 | | | Discount rate | | 23.3% | | | | | | | Market multiple-price to book | | 1.00x | | | | | | | Market multiple-price to earnings | | 5.75x | | | | | | | Terminal growth rate | | 4.0% | | | | | | | Exit multiple-price to book | | 1.00x | | | | | | | Exit multiple-price to earnings | | 5.50x | | | Other assets (1) | | 22 | | | Implied Yield | | 6.4 | % | - | 6.9% | | 6.6% | | | | | Term (years) | | 10 years | | | | Credit derivative liabilities, net (1) | | (15) | | | Hedge cost (in bps) | | 11.5 | - | 27.4 | | 15.1 | | | | | Bank profit (in bps) | | 66.0 | - | 261.9 | | 124.7 | | | | | Internal credit rating | | AAA | - | CCC | | A | | | | | Discount rates of future expected premium cash flows | | 3.3 | % | - | 4.5% | | 4.3% | | FG VIEs’ liabilities (1) | | (197) | | | CPR | | 0.2 | % | - | 27.5% | | 5.3% | | | | | CDR | | 1.2 | % | - | 41.0% | | 10.5% | | | | | Loss severity | | 45.0 | % | - | 100.0% | | 83.6% | | | | | Yield | | 5.0 | % | - | 9.8% | | 6.5% |
____________________ (1) Discounted cash flows are used as the primary valuation technique. (2) Excludes several investments reported in “other invested assets” with a fair value of $3 million. (3) The primary valuation technique uses the income and/or market approach. (4) Weighted average is calculated as a percentage of current par outstanding for all categories except for assets of CIVs and “fixed-maturity securities, trading” for which it is calculated as a percentage of fair value.
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| Schedule of Financial Instruments Not Carried at Fair Value |
The carrying amount and estimated fair value of the Company’s financial instruments not carried at fair value are presented in the following table.
Fair Value of Financial Instruments Not Carried at Fair Value | | | | | | | | | | | | | | | | | | | | | | | | | As of September 30, 2026 | | As of December 31, 2025 | | Carrying
Amount | | Estimated
Fair Value | | Carrying
Amount | | Estimated
Fair Value | | (in millions) | | Assets (liabilities): | | | | | | | | | Other assets (including other invested assets) (1) | $ | 268 | | | $ | 274 | | | $ | 90 | | | $ | 91 | | | Financial guaranty insurance contracts (2) | (1,906) | | | (2,796) | | | (1,906) | | | (1,485) | | | Policyholder account balances for annuity reinsurance contracts | (248) | | | (255) | | | — | | | — | | | Long-term debt | (1,707) | | | (1,526) | | | (1,704) | | | (1,610) | | | FG VIEs’ liabilities | (39) | | | (38) | | | — | | | — | | | Other liabilities (1) | (27) | | | (27) | | | (18) | | | (18) | |
____________________ (1) The Company’s other assets and other liabilities primarily consist of accrued interest and receivables for securities sold and payables for securities purchased, for which the carrying value approximates fair value. Other assets as of September 30, 2026 also include loans issued by a U.S. infrastructure project and a U.K. regulated utility to which the Company has insured exposure. Valuations for these loans were based on either observed market pricing of comparable securities or a discounted cash flow analysis using market-derived spread assumptions. The Company classified the fair value of loans as Level 3 in the fair value hierarchy. (2) Carrying amount includes the assets and liabilities related to financial guaranty insurance contract premiums, losses and salvage and subrogation and other recoverables net of reinsurance.
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