XML 32 R21.htm IDEA: XBRL DOCUMENT
v3.21.2

Note 11 - Losses and LAE (Note) | 9 Months Ended
--- | ---
Sep. 30, 2021
Insurance Loss Reserves [Abstract] |
Losses and Loss Adjustment Expense | Losses and LAE Our reserve for losses and LAE, at the end of each period indicated, consisted of the following.
Reserve for losses and LAE
(In thousands) |  | September 30, 2021 |  | December 31, 2020
Mortgage insurance loss reserves (1) |  | $ | 888,021 |  |  | $ | 844,107 |
Title insurance loss reserves |  | 5,134 |  |  | 4,306 |
Total reserve for losses and LAE |  | $ | 893,155 |  |  | $ | 848,413 |
(1)Primarily comprises first lien primary case reserves of $851.2 million and $799.5 million at September 30, 2021 and December 31, 2020, respectively. For the periods indicated, the following table presents information relating to our mortgage insurance reserve for losses, including our IBNR reserve and LAE, but excluding our second-lien mortgage loan premium deficiency reserve.
Rollforward of mortgage insurance reserve for losses
|  | Nine Months Ended September 30,
(In thousands) |  | 2021 |  | 2020
Balance at beginning of period |  | $ | 844,107 |  |  | $ | 401,273 |
Less: Reinsurance recoverables (1) |  | 71,769 |  |  | 14,594 |
Balance at beginning of period, net of reinsurance recoverables |  | 772,338 |  |  | 386,679 |
Add: Losses and LAE incurred in respect of default notices reported and unreported in: |  |  |  |
Current year (2) |  | 119,823 |  |  | 448,584 |
Prior years |  | (53,947) |  |  | (21,494) |
Total incurred |  | 65,876 |  |  | 427,090 |
Deduct: Paid claims and LAE related to: |  |  |  |
Current year (2) |  | 499 |  |  | 2,841 |
Prior years |  | 24,431 |  |  | 54,167 |
Total paid |  | 24,930 |  |  | 57,008 |
Balance at end of period, net of reinsurance recoverables |  | 813,284 |  |  | 756,761 |
Add: Reinsurance recoverables (1) |  | 74,737 |  |  | 64,947 |
Balance at end of period |  | $ | 888,021 |  |  | $ | 821,708 |
(1)Related to ceded losses recoverable, if any, on reinsurance transactions. See Note 8 for additional information. (2)Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. Reserve Activity Incurred Losses Case reserves established for new default notices were the primary driver of our total incurred losses for the nine months ended September 30, 2021 and 2020, and they were primarily impacted by the number of new primary default notices received in the period and our related gross Default to Claim Rate assumption applied to those new defaults. For the nine months ended September 30, 2021, we experienced a 70% decrease in the number of new primary default notices, compared to the nine months ended September 30, 2020, substantially all of which related to defaults subject to forbearance programs implemented in response to the COVID-19 pandemic. Our gross Default to Claim Rate assumption applied to new defaults was 8.0% as of September 30, 2021, compared to 8.5% as of September 30, 2020. This combination of fewer new default notices and a lower Default to Claim Rate assumption on new defaults was the primary driver of the decrease in losses incurred related to current year defaults for the nine months ended September 30, 2021, as compared to the first nine months of 2020. Our provision for losses during the first nine months of 2021 was positively impacted by favorable reserve development on prior year defaults, primarily as a result of more favorable trends in Cures than originally estimated, which resulted in, among other changes, a reduction from 8.5% to 8.0% in our Default to Claim Rate assumption for prior year default notices reported between April and December 2020 that was recorded as a change to our provision for losses during the second quarter of 2021. Our provision for losses during the first nine months of 2020 was also positively impacted by favorable reserve development on prior year defaults. The favorable development in 2020 was primarily driven by a reduction in certain Default to Claim Rate assumptions for those prior year defaults based on observed trends. During the third quarter of 2021, Hurricane Ida caused extensive property damage to areas of Louisiana, New York, New Jersey and Pennsylvania, as well as other general disruptions including power outages and flooding. Although the Primary Mortgage Insurance we write protects lenders from a portion of losses resulting from mortgage defaults, it generally does not provide protection against property loss or physical damage, including damage caused by hurricanes or other severe weather events or natural disasters. As of September 30, 2021, we do not expect to incur any material losses due to current or future defaults in FEMA Designated Areas related to Hurricane Ida. However, the future impact to our reserves or PMIERs Cushion may be affected by various factors, including the pace of economic recovery in the FEMA Designated Areas. See Note 1 for additional information on the elevated risks and uncertainties resulting from the COVID-19 pandemic to our business. Claims Paid Total claims paid decreased for the nine months ended September 30, 2021 compared to the same period in 2020. The decrease in claims paid is primarily attributable to COVID-19-related hardship forbearance plans and suspensions of foreclosures and evictions. Claims paid in 2021 include payments made to settle certain previously disclosed legal proceedings. See Note 13 for additional information about these legal proceedings. For additional information about our Reserve for Losses and LAE, including our accounting policies, see Notes 2 and 11 of Notes to Consolidated Financial Statements in our 2020 Form 10-K.

X
- References No definition available. + Details
Name: | us-gaap_InsuranceLossReservesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for liabilities related to future policy benefits and unpaid claims and claim adjustments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -URI http://asc.fasb.org/subtopic&trid=2560295 + Details
Name: | us-gaap_LiabilityForFuturePolicyBenefitsAndUnpaidClaimsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration