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Financial Guarantee Insurance Contracts (Tables)
 9 Months Ended
Sep. 30, 2018
Insurance [Line Items]  
Schedule of Loss And Loss Expense Reserves And Subrogation Recoverable Table [Table Text Block] Below are the components of the Loss and loss expense reserves liability and the Subrogation recoverable asset at September 30, 2018 and December 31, 2017:
 
Unpaid Claims
 
Present Value of Expected
Net Cash Flows
 
 
 
 
Balance Sheet Line Item
Claims
 
Accrued
Interest
 
Claims and
Loss Expenses
 
Recoveries
 
Unearned
Premium
Revenue
 
Gross Loss and
Loss Expense
Reserves
September 30, 2018:
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expense reserves
$
—

 
$
—

 
$
2,278,763

 
$
(305,024
)
 
$
(105,255
)
 
$
1,868,484

Subrogation recoverable
—

 
—

 
182,865

 
(2,081,476
)
 
—

 
(1,898,611
)
Totals
$
—

 
$
—

 
$
2,461,628

 
$
(2,386,500
)
 
$
(105,255
)
 
$
(30,127
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017:
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expense reserves
$
2,411,632

 
$
667,988

 
$
2,855,010

 
$
(1,054,113
)
 
$
(135,502
)
 
$
4,745,015

Subrogation recoverable
615,391

 
171,755

 
102,171

 
(1,520,530
)
 
—

 
(631,213
)
Totals
$
3,027,023

 
$
839,743

 
$
2,957,181

 
$
(2,574,643
)
 
$
(135,502
)
 
$
4,113,802
Summary of Gross Premium Receivable Roll-Forward (Direct and Assumed Contracts) Below is the gross premium receivable roll-forward for the affected periods:
 
 
Nine Months Ended September 30,
 
 
2018
 
2017
Beginning premium receivable
 
$
586,312

 
$
661,337

Premium receipts
 
(42,660
)
 
(66,141
)
Adjustments for changes in expected and contractual cash flows (1)
 
(34,088
)
 
(24,407
)
Accretion of premium receivable discount
 
11,211

 
12,326

Changes to uncollectable premiums
 
2,473

 
(103
)
Other adjustments (including foreign exchange)
 
(6,051
)
 
18,745

Ending premium receivable (2)
 
$
517,197

 
$
601,757


(1)
Adjustments for changes in expected and contractual cash flows primarily due to reductions in insured exposure as a result of early policy terminations and unscheduled principal paydowns.
(2)
Premium receivable includes premiums to be received in foreign denominated currencies most notably in British Pounds and Euros. At September 30, 2018 and 2017, premium receivables include British Pounds of $136,925 (£104,988) and $153,964 (£114,847), respectively, and Euros of $32,613 (€28,085) and $36,815 (€31,154), respectively.
Effect of Reinsurance on Premiums Written and Earned The effect of reinsurance on premiums written and earned for the respective periods was as follows:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
 
Written
 
Earned
 
Written
 
Earned
 
Written
 
Earned
 
Written
 
Earned
Direct
$
(22,954
)
 
$
27,559

 
$
(24,696
)
 
$
57,282

 
$
(19,304
)
 
$
87,506

 
$
(12,184
)
 
$
156,582

Assumed
—

 
20

 
—

 
20

 
—

 
59

 
—

 
61

Ceded
(789
)
 
1,939

 
(385
)
 
4,313

 
(1,832
)
 
5,206

 
(1,962
)
 
12,889

Net premiums
$
(22,165
)
 
$
25,640

 
$
(24,311
)
 
$
52,989

 
$
(17,472
)
 
$
82,359

 
$
(10,222
)
 
$
143,754
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] The following table summarizes net premiums earned by location of risk for the respective periods:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
United States
 
$
19,539

 
$
31,929

 
$
64,009

 
$
108,556

United Kingdom
 
4,523

 
17,273

 
14,337

 
28,094

Other international
 
1,578

 
3,787

 
4,013

 
7,104

Total
 
$
25,640

 
$
52,989

 
$
82,359

 
$
143,754
Summarized Future Gross Undiscounted Premiums Expected to be Collected and Future Expected Premiums Earned, Net of Reinsurance The table below summarizes the future gross undiscounted premiums to be collected and future premiums earned, net of reinsurance at September 30, 2018:
 
Future Premiums
to be Collected (1)
 
Future
Premiums to
be Earned Net of
Reinsurance (1)
Three months ended:
 
 
 
December 31, 2018
$
14,031

 
$
14,672

Twelve months ended:
 
 
 
December 31, 2019
52,211

 
55,831

December 31, 2020
49,314

 
52,205

December 31, 2021
42,999

 
47,630

December 31, 2022
41,004

 
44,441

Five years ended:
 
 
 
December 31, 2027
181,091

 
180,584

December 31, 2032
140,309

 
120,582

December 31, 2037
79,454

 
67,135

December 31, 2042
28,784

 
23,960

December 31, 2047
13,631

 
12,632

December 31, 2052
3,621

 
4,647

December 31, 2057
91

 
297

Total
$
646,540

 
$
624,616

(1)
Future premiums to be collected are undiscounted and are used to derive the discounted premium receivable asset recorded on Ambac's balance sheet. Future premiums to be earned, net of reinsurance relate to the unearned premiums liability and deferred ceded premium asset recorded on Ambac’s balance sheet. The use of contractual lives for many bond types which do not have homogeneous pools of underlying collateral is required in the calculation of the premium receivable, as further described in Note 2. Basis of Presentation and Significant Accounting Policies in the Notes to Consolidated Financial Statements included in Ambac's Annual Report on Form 10-K for the year ended December 31, 2017. This results in a different premium receivable balance than if expected lives were considered. If installment paying policies are retired or prepay early, premiums reflected in the premium receivable asset and amounts reported in the above table for such policies may not be collected. Future premiums to be earned also considers the use of contractual lives for many bond types which do not have homogeneous pools of underlying collateral, which may result in different unearned premium than if expected lives were considered. If those bonds types are retired early, premium earnings may be negative in the period of call or refinancing.
Summary of Loss Reserve Roll-Forward, Net of Subrogation Recoverable and Reinsurance Below is the loss and loss expense reserve roll-forward, net of subrogation recoverable and reinsurance, for the affected periods:
 
Nine Months Ended September 30,
 
2018
 
2017
Beginning gross loss and loss expense reserves
$
4,113,802

 
$
3,696,038

Reinsurance recoverable
40,658

 
30,767

Beginning balance of net loss and loss expense reserves
4,073,144

 
3,665,271

Losses and loss expenses (benefit):
 
 
 
Current year
976

 
5,328

Prior years
(182,291
)
 
405,589

Total (1) (2) (3)
(181,315
)
 
410,917

Loss and loss expenses paid (recovered):
 
 
 
Current year
143

 
330

Prior years (3)
3,937,561

 
148,082

Total
3,937,704

 
148,412

Foreign exchange effect
(9,578
)
 
26,556

Ending net loss and loss expense reserves
(55,453
)
 
3,954,332

Reinsurance recoverable (4)
25,326

 
46,023

Ending gross loss and loss expense reserves (5)
$
(30,127
)
 
$
4,000,355


(1)
Total losses and loss expenses (benefit) includes $(123) and $(21,189) for the nine months ended September 30, 2018 and 2017, respectively, related to ceded reinsurance.
(2)
Ambac records the impact of estimated recoveries related to securitized loans in RMBS transactions that breached certain R&Ws within losses and loss expenses (benefit). The losses and loss expense (benefit) incurred associated with changes in estimated representation and warranties for the nine months ended September 30, 2018 and 2017 was $56,928 and $62,451, respectively.
(3)
On February 12, 2018, Deferred Amounts and Interest Accrued on Deferred Amounts in the amount of $3,000,158 and $856,834, respectively were settled in connection with the Rehabilitation Exit Transactions. 2018 includes a $288,204 loss and loss expense benefit on these settled Deferred Amounts.
(4)
Represents reinsurance recoverable on future loss and loss expenses. Additionally, the Balance Sheet line "Reinsurance recoverable on paid and unpaid losses" includes reinsurance recoverables (payables) of $185 and $(47) as of September 30, 2018 and 2017, respectively, related to previously presented loss and loss expenses and subrogation.
(5)
Includes Euro denominated gross loss and loss expense reserves of $2,475 (€2,131) and $21,142 (€17,891) at September 30, 2018 and 2017, respectively.
Summary of Information Related to Policies Currently Included in Ambac's Loss Reserves or Subrogation Recoverable For 2017, the net adverse development was primarily the result of negative development in certain public finance transactions, including Puerto Rico, and interest accrued on Deferred Amounts partially offset by positive development in certain Ambac UK transactions.
The tables below summarize information related to policies currently included in Ambac’s loss and loss expense reserves or subrogation recoverable at September 30, 2018 and December 31, 2017. Gross par exposures include capital appreciation bonds which are reported at the par amount at the time of issuance of the insurance policy as opposed to the current accreted value of the bond. The weighted average risk-free rate used to discount loss reserves at September 30, 2018 and December 31, 2017 was 3.1% and 2.5%, respectively.
Surveillance Categories as of September 30, 2018
 
I
 
IA
 
II
 
III
 
IV
 
V
 
Total
Number of policies
33

 
25

 
11

 
18

 
148

 
3

 
238

Remaining weighted-average contract period (in years) (1)
9

 
22

 
7

 
22

 
13

 
3

 
16

Gross insured contractual payments outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
$
1,058,679

 
$
535,358

 
$
356,714

 
$
1,744,554

 
$
5,609,816

 
$
43,926

 
$
9,349,047

Interest
493,847

 
558,077

 
151,446

 
6,980,654

 
2,209,528

 
15,229

 
10,408,781

Total
$
1,552,526

 
$
1,093,435

 
$
508,160

 
$
8,725,208

 
$
7,819,344

 
$
59,155

 
$
19,757,828

Gross undiscounted claim liability
$
4,130

 
$
55,554

 
$
37,858

 
$
1,101,833

 
$
2,359,788

 
$
59,123

 
$
3,618,286

Discount, gross claim liability
(552
)
 
(14,667
)
 
(3,450
)
 
(513,413
)
 
(724,685
)
 
(5,110
)
 
(1,261,877
)
Gross claim liability before all subrogation and before reinsurance
3,578

 
40,887

 
34,408

 
588,420

 
1,635,103

 
54,013

 
2,356,409

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross RMBS subrogation (2)
—

 
—

 
—

 
—

 
(1,814,915
)
 
—

 
(1,814,915
)
Discount, RMBS subrogation
—

 
—

 
—

 
—

 
38,667

 
—

 
38,667

Discounted RMBS subrogation, before reinsurance
—

 
—

 
—

 
—

 
(1,776,248
)
 
—

 
(1,776,248
)
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross other subrogation (3)
—

 
(9,585
)
 
(23
)
 
(123,326
)
 
(597,581
)
 
(13,003
)
 
(743,518
)
Discount, other subrogation
—

 
6,716

 
—

 
59,749

 
62,645

 
4,156

 
133,266

Discounted other subrogation, before reinsurance
—

 
(2,869
)
 
(23
)
 
(63,577
)
 
(534,936
)
 
(8,847
)
 
(610,252
)
Gross claim liability, net of all subrogation and discounts, before reinsurance
3,578

 
38,018

 
34,385

 
524,843

 
(676,081
)
 
45,166

 
(30,091
)
Less: Unearned premium revenue
(1,302
)
 
(9,656
)
 
(1,688
)
 
(36,993
)
 
(55,391
)
 
(225
)
 
(105,255
)
Plus: Loss expense reserves
2,117

 
3,240

 
2,256

 
12,101

 
85,505

 
—

 
105,219

Gross loss and loss expense reserves
$
4,393

 
$
31,602

 
$
34,953

 
$
499,951

 
$
(645,967
)
 
$
44,941

 
$
(30,127
)
Reinsurance recoverable reported on Balance Sheet (4)
$
275

 
$
4,279

 
$
8,736

 
$
27,837

 
$
(15,616
)
 
$
—

 
$
25,511

 
(1)
Remaining weighted-average contract period is weighted based on projected gross claims over the lives of the respective policies.
(2)
RMBS subrogation represents Ambac’s estimate of subrogation recoveries from RMBS transaction sponsors for representation and warranty ("R&W") breaches.
(3)
Other subrogation represents subrogation related to excess spread and other contractual cash flows on public finance and structured finance transactions, including RMBS.
(4)
Reinsurance recoverable reported on the Balance Sheet includes reinsurance recoverables of $25,326 related to future loss and loss expenses and $185 related to presented loss and loss expenses and subrogation.
Surveillance Categories as of December 31, 2017
 
I
 
IA
 
II
 
III
 
IV
 
V
 
Total
Number of policies
26

 
20

 
26

 
22

 
179

 
4

 
277

Remaining weighted-average contract period (in years) (1)
10

 
23

 
10

 
24

 
13

 
4

 
17

Gross insured contractual payments outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
$
1,046,267

 
$
531,190

 
$
1,199,909

 
$
1,998,861

 
$
6,862,281

 
$
48,562

 
$
11,687,070

Interest
531,657

 
584,098

 
413,045

 
7,182,715

 
2,469,765

 
16,332

 
11,197,612

Total
$
1,577,924

 
$
1,115,288

 
$
1,612,954

 
$
9,181,576

 
$
9,332,046

 
$
64,894

 
$
22,884,682

Gross undiscounted claim liability (2)
$
4,434

 
$
56,659

 
$
77,289

 
$
1,412,976

 
$
6,409,340

 
$
64,863

 
$
8,025,561

Discount, gross claim liability
(465
)
 
(13,095
)
 
(12,250
)
 
(643,897
)
 
(616,559
)
 
(4,739
)
 
(1,291,005
)
Gross claim liability before all subrogation and before reinsurance
3,969

 
43,564

 
65,039

 
769,079

 
5,792,781

 
60,124

 
6,734,556

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross RMBS subrogation (3)
—

 
—

 
—

 
—

 
(1,857,502
)
 
—

 
(1,857,502
)
Discount, RMBS subrogation
—

 
—

 
—

 
—

 
23,115

 
—

 
23,115

Discounted RMBS subrogation, before reinsurance
—

 
—

 
—

 
—

 
(1,834,387
)
 
—

 
(1,834,387
)
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross other subrogation (4)
—

 
(7,990
)
 
(9,371
)
 
(53,070
)
 
(743,456
)
 
(13,191
)
 
(827,078
)
Discount, other subrogation
—

 
5,169

 
2,550

 
8,349

 
67,045

 
3,709

 
86,822

Discounted other subrogation, before reinsurance
—

 
(2,821
)
 
(6,821
)
 
(44,721
)
 
(676,411
)
 
(9,482
)
 
(740,256
)
Gross claim liability, net of all subrogation and discounts, before reinsurance
3,969

 
40,743

 
58,218

 
724,358

 
3,281,983

 
50,642

 
4,159,913

Less: Unearned premium revenue
(2,126
)
 
(9,990
)
 
(12,238
)
 
(46,086
)
 
(64,786
)
 
(276
)
 
(135,502
)
Plus: Loss expense reserves
16,116

 
3,242

 
665

 
13,331

 
56,037

 
—

 
89,391

Gross loss and loss expense reserves
$
17,959

 
$
33,995

 
$
46,645

 
$
691,603

 
$
3,273,234

 
$
50,366

 
$
4,113,802

Reinsurance recoverable reported on Balance Sheet (5)
$
202

 
$
4,894

 
$
9,424

 
$
38,465

 
$
(11,988
)
 
$
—

 
$
40,997

(1)
Remaining weighted-average contract period is weighted based on projected gross claims over the lives of the respective policies.
(2)
Gross undiscounted claim liability includes unpaid claims, including accrued interest on Deferred Amounts, on policies allocated to the Segregated Account and Ambac's estimate of expected future claims.
(3)
RMBS subrogation represents Ambac’s estimate of subrogation recoveries from RMBS transaction sponsors for R&W breaches.
(4)
Other subrogation represents subrogation related to excess spread and other contractual cash flows on public finance and structured finance transactions, including RMBS.
(5)
Reinsurance recoverable reported on Balance Sheet includes reinsurance recoverables of $40,658 related to future loss and loss expenses and $339 related to presented loss and loss expenses and subrogation.
Summary of Balance of Subrogation Recoveries and Related Claim Liabilities, by Estimation Approach The balance of R&W subrogation recoveries and the related loss reserves at September 30, 2018 and December 31, 2017, are as follows:
 
 
Gross Loss
Reserves Before
Subrogation
Recoveries (1)
 
Subrogation
Recoveries (2)(3)
 
Gross Loss
Reserves After
Subrogation
Recoveries
At September 30, 2018
 
$
131,245

 
$
(1,776,248
)
 
$
(1,645,003
)
 
 
 
 
 
 
 
At December 31, 2017
 
$
1,366,483

 
$
(1,834,387
)
 
$
(467,904
)
(1)
Amount represents gross loss reserves for policies that have established a representation and warranty subrogation recovery. December 31, 2017 includes unpaid RMBS claims (including accrued interest thereon) on policies allocated to the Segregated Account, such balances have been settled via the Rehabilitation Exit Transactions.
(2)
The amount of recorded subrogation recoveries related to each securitization is limited to ever-to-date paid and unpaid losses plus the present value of expected future cash flows for each policy. To the extent losses have been paid but not yet fully recovered, the recorded amount of R&W subrogation recoveries may exceed the sum of the unpaid claims and the present value of expected cash out flows for a given policy. The net cash inflow for these policies is recorded as a “Subrogation recoverable” asset. For those transactions where the subrogation recovery is less than the sum of unpaid claims and the present value of expected cash flows, the net cash outflow for these policies is recorded as a “Loss and loss expense reserves” liability.
(3)
The sponsor’s repurchase obligation may differ depending on the terms of the particular transaction and the status of the specific loan, such as whether it is performing or has been liquidated or charged off.
Summary of Rollforward of RMBS Subrogation, by Estimation Approach Below is the rollforward of R&W subrogation for the affected periods:
 
Nine Months Ended September 30,
 
2018
 
2017
Discounted R&W subrogation (gross of reinsurance) at beginning of period
$
1,834,387

 
$
1,907,035

Changes recognized during the period:
 
 
 
Impact of sponsor actions
—

 
—

All other changes (1)
(58,139
)
 
(62,919
)
Discounted R&W subrogation (gross of reinsurance) at end of period
$
1,776,248

 
$
1,844,116

(1)
All other changes which may impact R&W subrogation recoveries include changes in actual or projected collateral performance, changes in the creditworthiness of a sponsor, changes in discount rates and/or the projected timing of recoveries. All other changes may also include estimates of potential sponsor settlements that may not have been subject to a sampling approach. Those that have not been subject to a sampling approach are not material to Ambac’s financial results and therefore are included in this table.
Insurance Intangible Asset [Member]  
Insurance [Line Items]  
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] The estimated future amortization expense for the net insurance intangible asset is as follows:
 
 
2018
 
2019
 
2020
 
2021
 
2022
 
Thereafter
Amortization expense (1)
 
$
17,243

 
$
65,216

 
$
60,350

 
$
54,975

 
$
51,132

 
$
506,818

(1)  
Future amortization considers the use of contractual lives for many bond types which do not have homogeneous pools of underlying collateral. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay certain obligations. If those bonds types are retired early, amortization expense may differ in the period of call or refinancing.