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Loss Reserves (Tables) | 12 Months Ended
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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 | %

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