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Note 13 - Statutory Information (Notes) | 3 Months Ended
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Mar. 31, 2015
Statutory Information [Abstract] |
Statutory Information | Statutory Information We prepare our statutory financial statements in accordance with the accounting practices required or permitted, if applicable, by the insurance departments of the respective states of domicile of our insurance subsidiaries. Required statutory accounting practices are established by a variety of publications of the NAIC as well as state laws, regulations and general administrative rules. In addition, insurance departments have the right to permit other specific practices that may deviate from prescribed practices. As of March 31, 2015, our use of any prescribed or permitted statutory accounting practices did not result in reported statutory surplus or risk-based capital being significantly different from what would have been reported had NAIC statutory accounting practices been followed. The state insurance regulations include various capital requirements and dividend restrictions based on our insurance subsidiaries’ statutory financial position and results of operations, as described below. Failure to maintain adequate levels of capital could lead to intervention by the various insurance regulatory authorities, which could materially and adversely affect our business, business prospects and financial condition. As of March 31, 2015, the amount of restricted net assets held by our consolidated insurance subsidiaries (which represents our equity investment in those insurance subsidiaries) totaled $3.0 billion of our consolidated net assets. Radian Guaranty Radian Guaranty’s statutory net income, statutory policyholders’ surplus and contingency reserve as of and for the periods indicated were as follows:
(In millions) | As of and for the Three Months Ended March 31, 2015 |  | As of and for the Year Ended December 31, 2014
Statutory net income | $ | 110.8 |  |  | $ | 273.7 |
Statutory policyholders’ surplus | 1,349.4 |  |  | 1,325.2 |
Contingency reserve | 487.6 |  |  | 389.4 |
Under state insurance regulations, Radian Guaranty is required to maintain minimum surplus levels and, in certain states, a minimum ratio of statutory capital relative to the level of net RIF, or “Risk-to-capital.” The sixteen RBC States currently impose a Statutory RBC Requirement. The most common Statutory RBC Requirement is that a mortgage insurer’s Risk-to-capital may not exceed 25 to 1. In certain of the RBC States, a mortgage insurer must satisfy an MPP Requirement. The statutory capital requirements for the non-RBC States are de minimis (ranging from $1 million to $5 million); however, the insurance laws of these states generally grant broad supervisory powers to state agencies or officials to enforce rules or exercise discretion affecting almost every significant aspect of the insurance business, including the power to revoke or restrict an insurance company’s ability to write new business. Unless an RBC State grants a waiver or other form of relief, if a mortgage insurer is not in compliance with the Statutory RBC Requirement of that state, the mortgage insurer may be prohibited from writing new mortgage insurance business in that state. Radian Guaranty’s domiciliary state, Pennsylvania, is not one of the RBC States. For both the three months ended March 31, 2015 and the year ended December 31, 2014, the RBC States accounted for approximately 56.3%, of Radian Guaranty’s total primary NIW. Radian Guaranty was in compliance with the Statutory RBC Requirements or MPP Requirements, as applicable, in each of the RBC States as of March 31, 2015. See Note 1 for information regarding potential changes to the Model Act, which may result in more stringent Statutory RBC Requirements and MPP Requirements in states that adopt the Model Act, as well as the GSE eligibility requirements that were issued as final PMIERs on April 17, 2015. Radian Guaranty’s Risk-to-capital calculation appears in the table below. For purposes of the Risk-to-capital calculation, as well as the Risk-to-capital requirements imposed by certain states, statutory capital is defined as the sum of statutory policyholders’ surplus (i.e., statutory capital and surplus) plus statutory contingency reserves.
| March 31, 2015 |  | December 31, 2014
($ in millions) |  |  |
RIF, net (1) | $ | 31,324.0 |  |  | $ | 30,615.7 |
Statutory policyholders’ surplus | $ | 1,349.4 |  |  | $ | 1,325.2 |
Contingency reserve | 487.6 |  |  | 389.4 |
Statutory capital | $ | 1,837.0 |  |  | $ | 1,714.6 |
Risk-to-capital | 17.1:1 |  | 17.9:1
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(1) | Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans.
The reduction in Radian Guaranty’s Risk-to-capital in the first three months of 2015 was primarily due to increases in statutory net income and contingency reserves, partially offset by an increase in net RIF at Radian Guaranty. We have actively managed Radian Guaranty’s capital position in various ways, including: (1) through internal and external reinsurance arrangements; (2) by seeking opportunities to reduce our risk exposure through negotiated transactions; and (3) by contributing additional capital from Radian Group. Given our current financial projections for Radian Guaranty, which are subject to risks and uncertainties, we expect Radian Guaranty’s Risk-to-capital to decrease over time. Radian Asset Assurance Radian Asset Assurance was our financial guaranty subsidiary and was, until the April 1, 2015 sale date, domiciled and licensed in New York as a monoline financial guaranty insurer. It was also licensed under the New York insurance laws to write some types of surety insurance and credit insurance. See Note 2 for additional information related to discontinued operations.

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