6. FINANCIAL GUARANTEES IN FORCE

Financial guarantees outstanding includes the exposures of policies that insure variable interest entities (“VIEs”) consolidated in accordance with ASC Topic 810, Consolidation. Financial guarantees outstanding includes the exposure of policies that insure 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 bonds. Financial guarantees outstanding exclude the exposures of policies that insure bonds which have been called, pre-refunded or refunded. The gross par amount of financial guarantees outstanding was $52,055,000 and $67,140,000 at December 31, 2018 and 2017, respectively. The par amount of financial guarantees outstanding, net of reinsurance, was $46,927,000 and $62,716,000 at December 31, 2018 and 2017, respectively.

As of December 31, 2018 and 2017, the guarantee portfolio was diversified by type of guaranteed bond as shown in the following table:



Net Par Outstanding December 31,	2018		2017
Public Finance:
Lease and tax-backed revenue	$	7,565,000	$	11,893,000
Housing revenue⁽¹⁾	6,159,000		6,312,000
General obligation	4,214,000		6,257,000
Transportation revenue	1,754,000		2,002,000
Utility revenue	1,178,000		2,212,000
Higher education	1,168,000		1,642,000
Health care revenue	459,000		807,000
Other	945,000		963,000
Total Public Finance	23,442,000		32,088,000
Structured Finance:
Mortgage-backed and home equity	5,510,000		7,267,000
Investor-owned utilities	1,754,000		3,274,000
Structured Insurance	1,365,000		1,420,000
Student loan	934,000		1,238,000
Asset-backed ⁽²⁾	237,000		443,000
Other	147,000		174,000
Total Structured Finance	9,947,000		13,816,000
International Finance:
Sovereign/sub-sovereign	5,250,000		5,664,000
Investor-owned and public utilities	4,499,000		5,696,000
Transportation	1,613,000		1,777,000
Asset-backed ⁽²⁾	1,550,000		2,609,000
Mortgage-backed and home equity	—		246,000
Other	626,000		820,000
Total International Finance	13,538,000		16,812,000
Total	$	46,927,000	$	62,716,000


(1)	Includes $5,759,000 and $5,829,000 of Military Housing net par at December 31, 2018 and 2017, respectively.


(2)	At December 31, 2018 and 2017, all asset-backed net par amounts outstanding relate to commercial asset-based transactions.

As of December 31, 2018 and 2017, the International Finance guaranteed portfolio by location of risk was as outlined in the table below:



Net Par Outstanding December 31,	2018		2017
United Kingdom	$	10,965,000	$	13,554,000
Italy	811,000		877,000
Austria	712,000		770,000
Australia	384,000		608,000
France	312,000		329,000
Internationally diversified ⁽¹⁾	213,000		368,000
Other international	141,000		306,000
Total International Finance	$	13,538,000	$	16,812,000


(1)	Internationally diversified obligations represent pools of geographically diversified exposures which may include components of U.S. exposure.

Gross financial guarantees in force (principal and interest) were $87,543,000 and $108,550,000 at December 31, 2018 and 2017, respectively. Net financial guarantees in force (after giving effect to reinsurance) were $77,972,000 and $101,223,000 as of December 31, 2018 and 2017, respectively.

In the United States, California, New York and Colorado were the states with the highest aggregate net par amounts in force, accounting for 7.9%, 5.5% and 5.2% of the total at December 31, 2018, respectively. No other state accounted for more than 5.0%. The highest single insured risk represented 2.8% of the aggregate net par amount guaranteed.