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Financial Guarantee Insurance Contracts (Tables)
 12 Months Ended
Dec. 31, 2018
Insurance [Line Items]  
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:
Year Ended
December 31,
 
2018
 
2017
 
2016
United States
 
$
87,539

 
$
134,099

 
$
168,646

United Kingdom
 
18,580

 
32,928

 
24,470

Other international
 
4,970

 
8,250

 
4,171

Total
 
$
111,089

 
$
175,277

 
$
197,287
Summary of Gross Premium Receivable Roll-Forward (Direct and Assumed Contracts)
Below is the gross premium receivable roll-forward (direct and assumed contracts) for the affected periods:
Year Ended
December 31,
2018
 
2017
 
2016
Beginning premium receivable
$
586,312

 
$
661,337

 
$
831,575

Premium receipts
(56,441
)
 
(81,597
)
 
(77,038
)
Adjustments for changes in expected and contractual cash flows
(41,762
)
 
(30,334
)
 
(78,528
)
Accretion of premium receivable discount
14,668

 
16,162

 
18,637

Changes to uncollectable premiums
2,167

 
(141
)
 
6,054

Other adjustments (including foreign exchange)
(9,553
)
 
20,885

 
(39,363
)
Ending premium receivable (1)
$
495,391

 
$
586,312

 
$
661,337


(1)
Gross premium receivable includes premiums to be received in foreign denominated currencies most notably in British Pounds and Euros. At December 31, 2018, 2017 and 2016 premium receivables include British Pounds of $131,458 (£103,088), $151,852 (£112,342) and $177,878 (£144,393), respectively, and Euros of $30,597 (€26,708), $36,001 (€29,976) and $34,866 (€33,108), respectively.
Schedule Of Reinsurance Recoverable And Provision By Category Of Reinsurer [Table Text Block]
The following table represents the percentage ceded to reinsurers and reinsurance recoverable at December 31, 2018 and its rating levels obtained from each reinsurers website as of February 25, 2019:
Reinsurers
 
Percentage Ceded Par
 
Net Unsecured Reinsurance Recoverable (1)
Assured Guaranty Re Ltd
 
60.0%
 
$
—

Build America Mutual Assurance Company (2)
 
28.2
 
18,815

Assured Guaranty Corporation
 
7.1
 
—

Sompo Japan Nipponkoa Insurance, Inc.
 
4.7
 
—

Total
 
100%
 
$
18,815

(1)
Represents reinsurance recoverables on paid and unpaid losses and deferred ceded premiums, net of ceded premium payables due to reinsurers, letters of credit, and collateral posted for the benefit of Ambac Assurance.
(2)
Build America Mutual Assurance Company has an S&P rating of AA.
Effect of Reinsurance on Premiums Written and Earned
The effect of reinsurance on premiums written and earned was as follows:
Year Ended
December 31,
Direct
 
Assumed
 
Ceded
 
Net
Premiums
2018:
 
 
 
 
 
 
 
Written
$
(23,828
)
 
$
—

 
$
16,860

 
$
(40,688
)
Earned
118,977

 
79

 
7,967

 
$
111,089

2017:
 
 
 
 
 
 
 
Written
(14,313
)
 
—

 
(2,104
)
 
$
(12,209
)
Earned
190,496

 
106

 
15,325

 
$
175,277

2016:
 
 
 
 
 
 
 
Written
(53,837
)
 
—

 
(8,772
)
 
$
(45,065
)
Earned
215,564

 
85

 
18,362

 
$
197,287
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 December 31, 2018:
 
Future Premiums
to be
Collected (1)
 
Future
Premiums
to be
Earned Net of
Reinsurance (2)
Three months ended:
 
 
 
March 31, 2019
$
14,616

 
$
12,179

June 30, 2019
11,795

 
12,504

September 30, 2019
12,262

 
12,458

December 31, 2019
12,121

 
12,321

Twelve months ended:
 
 
 
December 31, 2020
48,030

 
47,064

December 31, 2021
41,828

 
43,285

December 31, 2022
39,867

 
40,692

December 31, 2023
38,268

 
37,994

Five years ended:
 
 
 
December 31, 2028
168,545

 
156,237

December 31, 2033
127,753

 
104,420

December 31, 2038
64,142

 
54,562

December 31, 2043
24,907

 
20,764

December 31, 2048
11,335

 
10,965

December 31, 2053
2,251

 
3,310

December 31, 2058
31

 
82

Total
$
617,751

 
$
568,837

(1)
Future premiums to be collected are undiscounted and are used to derive the discounted premium receivable asset recorded on Ambac's balance sheet.
(2)
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. 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.
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 December 31, 2018 and 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
December 31, 2018:
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expense reserves
$
—

 
$
—

 
$
2,246,335

 
$
(313,595
)
 
$
(106,662
)
 
$
1,826,078

Subrogation recoverable
—

 
—

 
175,694

 
(2,108,654
)
 
—

 
(1,932,960
)
Totals
$
—

 
$
—

 
$
2,422,029

 
$
(2,422,249
)
 
$
(106,662
)
 
$
(106,882
)
 
 
 
 
 
 
 
 
 
 
 
 
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 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.
Year Ended
December 31,
2018
 
2017
 
2016
Beginning gross loss and loss expense reserves
$
4,113,802

 
$
3,696,038

 
$
2,858,813

Reinsurance recoverable
40,658

 
30,767

 
44,059

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

 
$
3,665,271

 
$
2,814,754

Losses and loss expenses (benefit) incurred:
 
 
 
 
 
Current year
4,884

 
5,691

 
6,675

Prior years (3)
(228,497
)
 
507,495

 
(18,164
)
Total (1)(2)
(223,613
)
 
513,186

 
(11,489
)
Loss and loss expenses (recovered) paid:
 
 
 
 
 
Current year
204

 
825

 
5,371

Prior years (3)
3,963,341

 
133,427

 
(944,955
)
Total
3,963,545

 
134,252

 
(939,584
)
Foreign exchange effect
(15,491
)
 
28,939

 
(77,578
)
Ending net loss and loss expense reserves
$
(129,505
)
 
$
4,073,144

 
$
3,665,271

Reinsurance recoverable (4)
22,623

 
40,658

 
30,767

Ending gross loss and loss expense reserves (5)
$
(106,882
)
 
$
4,113,802

 
$
3,696,038


(1)
Total losses and loss expenses (benefit) includes $1,657, $(20,348) and $5,421 for the years ended December 31, 2018, 2017 and 2016, respectively, related to ceded reinsurance.
(2)
Ambac records the impact of estimated recoveries related to securitized loans in RMBS transactions that breached certain representations and warranties within losses and loss expenses (benefit). The losses and loss expense (benefit) incurred associated with changes in estimated representation and warranty recoveries for the year ended December 31, 2018, 2017 and 2016 was $62,493, $72,003 and $(71,369), respectively.
(3)
2018 loss and loss expenses (recovered) paid includes the settlement of Deferred Amounts and Interest Accrued on Deferred Amounts in the amount of $3,000,158 and $856,834, respectively in connection with the Rehabilitation Exit Transactions through a combination of cash, surplus notes and secured notes. 2018 loss and loss expenses incurred 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 $510, $339 and $(349) as of December 31, 2018, 2017 and 2016, respectively, related to previously presented loss and loss expenses and subrogation.
(5)
Includes Euro denominated gross loss and loss expense reserves of $3,328 (€2,905), $21,116 (€17,582) and $21,375 (€20,297) at December 31, 2018, 2017 and 2016, respectively.
Summary of Information Related to Policies Currently Included in Ambac's Loss Reserves or Subrogation Recoverable
The tables below summarize information related to policies currently included in Ambac’s loss and loss expense reserves or subrogation recoverable at December 31, 2018 and 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 December 31, 2018 and 2017 was 2.8% and 2.5%, respectively.
 
 
Surveillance Categories as of December 31, 2018
 
 
I
 
IA
 
II
 
III
 
IV
 
V
 
Total
Number of policies
 
21

 
28

 
18

 
16

 
145

 
3

 
231

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

 
19

 
9

 
22

 
14

 
3

 
16

Gross insured contractual payments outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
$
916,530

 
$
708,249

 
$
622,820

 
$
1,705,464

 
$
5,407,202

 
$
43,140

 
$
9,403,405

Interest
 
487,702

 
631,708

 
293,293

 
6,979,130

 
2,177,539

 
13,401

 
10,582,773

Total
 
$
1,404,232

 
$
1,339,957

 
$
916,113

 
$
8,684,594

 
$
7,584,741

 
$
56,541

 
$
19,986,178

Gross undiscounted claim liability
 
$
4,019

 
$
63,712

 
$
36,000

 
$
992,019

 
$
2,295,968

 
$
56,510

 
$
3,448,228

Discount, gross claim liability
 
(481
)
 
(13,008
)
 
(3,069
)
 
(433,709
)
 
(637,548
)
 
(4,143
)
 
(1,091,958
)
Gross claim liability before all subrogation and before reinsurance
 
$
3,538

 
$
50,704

 
$
32,931

 
$
558,310

 
$
1,658,420

 
$
52,367

 
$
2,356,270

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross RMBS subrogation (2)
 
—

 
—

 
—

 
—

 
(1,809,937
)
 
—

 
(1,809,937
)
Discount, RMBS subrogation
 
—

 
—

 
—

 
—

 
39,391

 
—

 
39,391

Discounted RMBS subrogation, before reinsurance
 
—

 
—

 
—

 
—

 
(1,770,546
)
 
—

 
(1,770,546
)
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross other subrogation (3)
 
—

 
(10,816
)
 
—

 
(136,541
)
 
(624,654
)
 
(12,880
)
 
(784,891
)
Discount, other subrogation
 
—

 
7,318

 
—

 
67,008

 
55,088

 
3,774

 
133,188

Discounted other subrogation, before reinsurance
 
—

 
(3,498
)
 
—

 
(69,533
)
 
(569,566
)
 
(9,106
)
 
(651,703
)
Gross claim liability, net of all subrogation and discounts, before reinsurance
 
$
3,538

 
$
47,206

 
$
32,931

 
$
488,777

 
$
(681,692
)
 
$
43,261

 
$
(65,979
)
Less: Unearned premium revenue
 
(943
)
 
(10,073
)
 
(5,085
)
 
(36,365
)
 
(53,987
)
 
(209
)
 
(106,662
)
Plus: Loss expense reserves
 
1,369

 
4,253

 
2,564

 
(5,926
)
 
63,499

 
—

 
65,759

Gross loss and loss expense reserves
 
$
3,964

 
$
41,386

 
$
30,410

 
$
446,486

 
$
(672,180
)
 
$
43,052

 
$
(106,882
)
Reinsurance recoverable reported on Balance Sheet (4)
 
$
367

 
$
7,285

 
$
4,223

 
$
26,096

 
$
(14,838
)
 
$
—

 
$
23,133

(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 Balance Sheet includes reinsurance recoverables of $22,623 related to future loss and loss expenses and $510 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 Rollforward of RMBS Subrogation, by Estimation Approach
Below is the rollforward of RMBS R&W subrogation for the affected periods:
Year ended December 31,
2018
 
2017
 
2016
Discounted RMBS subrogation recovery
(gross of reinsurance) at beginning of year
$
1,834,387

 
$
1,907,035

 
$
2,829,575

Impact of sponsor
actions (1)
—

 
—

 
(995,000
)
All other changes (2)
(63,841
)
 
(72,648
)
 
72,460

Discounted RMBS subrogation recovery (gross of reinsurance) at end of year
$
1,770,546

 
$
1,834,387

 
$
1,907,035

(1)
Sponsor actions include loan repurchases, direct payments to Ambac and other contributions from sponsors. In January 2016, Ambac Assurance settled its RMBS-related disputes and litigation against JP Morgan Chase & Co. and certain of its affiliates (collectively "JP Morgan"). Pursuant to the settlement, JP Morgan paid Ambac Assurance $995,000 in cash in return for releases of all of Ambac Assurance's claims against JP Morgan arising from certain RMBS transactions insured by Ambac Assurance. Ambac Assurance also agreed to withdraw its objections to JP Morgan's global RMBS settlement with RMBS trustees.
(2)
All other changes which may impact RMBS R&W subrogation recoveries include changes in actual or projected collateral performance, changes in the creditworthiness of a sponsor 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 or have been executed but the settlement amounts have not yet been received. 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:
Amortization expense (1)
 
2019
$
63,665

2020
58,755

2021
53,419

2022
49,681

2023
46,342

Thereafter
447,069


(1)  
The insurance intangible asset will be amortized using a level yield method based on par exposure of the related financial guarantee insurance or reinsurance contracts as described in Note 2. Basis of Presentation and Significant Accounting Policies. 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 from the amounts provided in the table above.