MBIA guarantees the payment of principal of, and interest or other amounts owing on, municipal, asset-backed, mortgage-backed and other non-municipal securities. Additionally, MBIA Corp. has insured CDS primarily on pools of collateral, which it previously considered part of its core financial guarantee business. The pools of collateral are made up of corporate obligations, but also include commercial and RMBS-related assets. MBIA's insurance in force represents the aggregate amount of the insured principal of, and interest or other amounts owing on, insured obligations. MBIA's ultimate exposure to credit loss in the event of nonperformance by the issuer of the insured obligation is represented by the insurance in force in the tables that follow.

The financial guarantees issued by MBIA provide unconditional and irrevocable guarantees of the payment of the principal of, and interest or other amounts owing on, insured obligations when due. The obligations are generally not subject to acceleration, except that MBIA may have the right, at its discretion, to accelerate insured obligations upon default or otherwise. Certain guaranteed investment contracts written by MBIA Inc. and guaranteed by MBIA Corp. are terminable based upon the credit ratings downgrades of MBIA Corp. and if MBIA Inc. were to have insufficient assets to pay the termination payments, MBIA Corp.'s insurance coverage would be drawn on to make such payments. These amounts have been excluded in the tables that follow.

The creditworthiness of each insured obligation is evaluated prior to the issuance of insurance, and each insured obligation must comply with National's or MBIA Corp.'s underwriting guidelines. Further, the payments to be made by the issuer on the bonds or notes may be backed by a pledge of revenues, reserve funds, letters of credit, investment contracts or collateral in the form of mortgages or other assets. The right to such funds or collateral would typically become National's or MBIA Corp.'s upon the payment of a claim by either National or MBIA Corp.

National and MBIA Corp. maintain underwriting guidelines based on those aspects of credit quality that it deems important for each category of obligation considered for insurance.

As of December 31, 2013, insurance in force, which represents principal and interest or other amounts owing on insured obligations, had an expected maturity range of 1 to 44 years. The distribution of MBIA Corp.'s and National's combined insurance in force by geographic location, excluding $3.5 billion and $4.8 billion relating to transactions guaranteed by MBIA Corp. on behalf of various investment management services affiliated companies as of December 31, 2013 and 2012, respectively, is presented in the following table:

		As of December 31,
In billions		2013			2012
				% of			% of
		Insurance		Insurance	Insurance		Insurance
Geographic Location		in Force		in Force	in Force		in Force
California		$	88.7	16.0%	$	104.7	15.4%
New York			38.1	6.9%		48.7	7.2%
Illinois			29.6	5.3%		33.3	4.9%
Florida			29.2	5.3%		36.8	5.4%
Texas			28.0	5.0%		33.9	5.0%
New Jersey			20.2	3.6%		24.1	3.6%
Michigan			15.3	2.8%		17.6	2.6%
Pennsylvania			11.8	2.1%		14.5	2.1%
Washington			11.5	2.1%		15.9	2.3%
Puerto Rico			10.9	2.0%		9.1	1.4%
	Subtotal		283.3	51.1%		338.6	49.9%
Nationally diversified			53.6	9.7%		80.0	11.8%
Other states			155.8	28.1%		185.7	27.3%
	Total United States		492.7	88.9%		604.3	89.0%
Internationally diversified			12.8	2.3%		18.9	2.8%
Country specific			48.8	8.8%		55.9	8.2%
	Total non-United States		61.6	11.1%		74.8	11.0%
Total		$	554.3	100.0%	$	679.1	100.0%

The insurance in force by type of bond, excluding transactions guaranteed by MBIA Corp. on behalf of various investment management services affiliated companies, is presented in the following table:

					As of December 31,
In billions					2013			2012
							% of			% of
					Insurance		Insurance	Insurance		Insurance
Bond type					in Force		in Force	in Force		in Force
Global public finance¾United States:
	General obligation				$	153.5	27.7%	$	187.5	27.6%
	General obligation¾lease					34.1	6.2%		41.7	6.1%
	Municipal utilities					78.0	14.1%		97.1	14.3%
	Tax-backed					66.1	11.9%		71.9	10.6%
	Transportation					46.2	8.3%		52.1	7.7%
	Higher education					24.1	4.3%		30.3	4.5%
	Health care					9.5	1.7%		12.1	1.8%
	Military housing					19.2	3.5%		19.0	2.8%
	Investor-owned utilities⁽¹⁾					7.2	1.3%		8.7	1.3%
	Municipal housing					4.8	0.9%		7.2	1.0%
	Student loans					0.6	0.1%		0.7	0.1%
	Other⁽²⁾					2.4	0.4%		2.6	0.4%
			Total United States			445.7	80.4%		530.9	78.2%
Global public finance¾non-United States:
		International utilities				15.9	2.9%		16.2	2.4%
		Sovereign-related and sub-sovereign⁽³⁾				17.3	3.1%		18.4	2.7%
		Transportation				12.2	2.2%		14.2	2.1%
		Local governments⁽⁴⁾				0.4	0.1%		0.5	0.1%
		Health care				0.0	0.0%		0.1	0.0%
		Tax-backed				0.2	0.0%		0.2	0.0%
			Total non-United States			46.0	8.3%		49.6	7.3%
				Total global public finance		491.7	88.7%		580.5	85.5%

Global structured finance:
	Collateralized debt obligations⁽⁵⁾					31.7	5.7%		57.6	8.5%
	Mortgage-backed residential					12.4	2.2%		17.1	2.5%
	Mortgage-backed commercial					1.6	0.3%		3.8	0.6%
	Consumer asset-backed:
		Student loans				1.1	0.2%		1.2	0.2%
		Manufactured housing				1.7	0.3%		2.0	0.3%
		Other consumer asset-backed				0.0	0.0%		0.1	0.0%
	Corporate asset-backed:
		Operating assets:
			Aircraft portfolio lease securitizations			1.8	0.3%		2.5	0.4%
			Secured airline equipment securitizations			1.8	0.3%		2.4	0.3%
			Other operating assets			0.2	0.1%		0.5	0.1%
		Structured insurance securitizations				5.5	1.0%		6.1	0.9%
		Franchise assets				0.8	0.2%		0.9	0.1%
		Future flow				0.1	0.0%		0.2	0.0%
		Other corporate asset-backed				3.9	0.7%		4.2	0.6%
				Total global structured finance		62.6	11.3%		98.6	14.5%
				Total	$	554.3	100.0%	$	679.1	100.0%
___________________
(1) - Includes investor owned utilities, industrial development and pollution control revenue bonds.
(2) - Includes certain non-profit enterprises and stadium related financing.
(3) - Includes regions, departments or their equivalent in each jurisdiction as well as sovereign owned entities that are supported by a sovereign state, region or department.
(4) - Includes municipal owned entities backed by sponsoring local government.
(5) - Includes transactions (represented by structured pools of primarily investment grade corporate credit risks or CRE assets) that do not include typical CDO structuring
	characteristics, such as tranched credit risk, cash flow waterfalls, or interest and over-collateralization coverage tests.

The insurance operations have entered into certain guarantees of derivative contracts, included in the preceding tables, which are accounted for as derivative instruments. MBIA generally guarantees the timely payment of principal and interest related to these derivatives upon the occurrence of a credit event with respect to a referenced obligation. The maximum amount of future payments that MBIA may be required to make under these guarantees is $25.1 billion. MBIA's guarantees of derivative contracts have a legal maximum maturity range of 1 to 69 years. A small number of insured credit derivative contracts have long-dated maturities, which comprise the longest maturity dates of the underlying collateral. However, the expected maturities of such contracts are much shorter due to amortizations and prepayments in the underlying collateral pools. The fair values of these guarantees as of December 31, 2013 and 2012 are recorded on the consolidated balance sheets as derivative liabilities, representing gross losses, of $1.2 billion and $2.9 billion, respectively.

Investment agreement contracts and MTNs issued by the Company's asset/liability products segment are insured by MBIA Corp. and are not included in the previous tables. If MBIA Inc. or these subsidiaries were to have insufficient assets to pay amounts due, MBIA Corp. would make such payments under its insurance policies. As of December 31, 2013, the maximum amount of future payments that MBIA Corp. could be required to make under these guarantees is $3.5 billion. These guarantees, which have a maximum maturity range of 1 to 29 years, were entered into on an arm's length basis. MBIA Corp. has both direct recourse provisions and subrogation rights in these transactions. If MBIA Corp. is required to make a payment under any of these affiliate guarantees, it would have the right to seek reimbursement from such affiliate and to liquidate any collateral to recover amounts paid under the guarantee.

Reinsurance enables the Company to cede exposure for purposes of syndicating risk and increasing its capacity to write new business while complying with its single risk and credit guidelines. When a reinsurer is downgraded by one or more of the rating agencies, less capital credit is given to MBIA under rating agency models and the overall value of the reinsurance to MBIA is reduced. The Company generally retains the right to reassume the business ceded to reinsurers under certain circumstances, including a reinsurer's rating downgrade below specified thresholds. As of December 31, 2013, the use of reinsurance was immaterial to the insurance operations business and the Company expects that it will continue to be immaterial in the future.

MBIA requires certain unauthorized reinsurers to maintain bank letters of credit or establish trust accounts to cover liabilities ceded to such reinsurers under reinsurance contracts. As of December 31, 2013, the total amount available under these letters of credit and trust arrangements was $32 million. The Company remains liable on a primary basis for all reinsured risk, and although MBIA believes that its reinsurers remain capable of meeting their obligations, there can be no assurance of such in the future.

The aggregate amount of insurance in force ceded by MBIA to reinsurers was $12.7 billion and $6.0 billion as of December 31, 2013 and 2012, respectively.

As of December 31, 2013, the aggregate amount of insured par outstanding ceded by MBIA to reinsurers under reinsurance agreements was $7.1 billion compared with $3.4 billion as of December 31, 2012. The following table presents information about the Company's reinsurance agreements as of December 31, 2013 for its U.S. public finance and structured finance and international insurance operations.

In millions

Standard &

Letters of

Poor's Rating

Moody's Rating

Ceded Par

Credit/ Trust

Reinsurance

Reinsurers

(Status)

Outstanding

Accounts

Recoverable⁽¹⁾

Assured Guaranty Re Ltd.

AA-

Baa1

4,052

(Stable Outlook)

Assured Guaranty Corp.

AA-

2,630

(Stable Outlook)

Overseas Private

AA+

Aaa

324

Investment Corporation

(Stable Outlook)

Others

A+ or above

A2 or above

126

Total

7,132

_______________

(1) - Total reinsurance recoverable is primarily related to recoverables on unpaid losses.

In August of 2013, the novation agreement between the Financial Guaranty Insurance Company (“FGIC”) and National, whereby FGIC transfers, by novation, to National all the rights and liabilities under each of the policies covered under a reinsurance agreement with FGIC, became effective. This novation agreement includes covered policies that previously benefited from the reinsurance agreement and second-to-pay policies entered into by MBIA Insurance Corporation in 2008 that were subsequently assigned to and reinsured by National in 2009. As a result of this novation, National is now the primary insurer under these policies. The amount of third-party reinsurance available to National via the novation agreement totals $4.3 billion.

The components of financial guarantee net premiums earned, including premiums assumed from and ceded to other companies, are presented in the following table:

For the years ended December 31, 2013, 2012 and 2011, recoveries received on claims for financial guarantee policies under reinsurance contracts totaled $4 million, $4 million and $10 million, respectively. Ceding commissions from reinsurance, before deferrals and net of returned ceding commissions, were $2 million, $3 million and $3 million for the years ended December 31, 2013, 2012, and 2011, respectively.