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Loss and Loss Adjustment Expense Reserves | 3 Months Ended
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Mar. 31, 2015
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Loss and Loss Adjustment Expense Reserves | Note 5: Loss and Loss Adjustment Expense Reserves Loss and Loss Adj ustment Expense Process U.S. Public Finance Insurance U.S. public finance insur ed transactions consist of municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, student loan issuers, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. The Company estimates future losses by using probability-weighted scenarios that are customized to each insured transaction. Future loss estimates consider debt service due for each insured transaction, which includes par outstanding and interest due. As of March 31, 2015 and December 31, 2014, the Comp any established loss and loss adjustment expense (“LAE”) reserves totaling $35 million and $45 million, respectively, and insurance loss recoverable of $4 million related to U.S. public finance issues. Certain local go vernments remain under financial and budgetary stress and a few have filed for protection under the United States Bankruptcy Code, or have entered into state statutory proceedings established to assist municipalities in managing through periods of severe f iscal stress. This could lead to an increase in defaults by such entities on the payment of their obligations and losses or impairments on a greater number of the Company’s insured transactions. The Company monitor s and analyze s these situations closely, h owever, the overall extent and duration of such events are uncertain and the filing for protection under the United States Bankruptcy Code or entering state statutory proceedings does not result in a default or indicate that an ultimate loss will occur. As of March 31, 2015 and December 31, 2014, the Company had $92.5 billion and $98.9 billion, respectively, of gross par outstanding on general obligations, of which $83 million and $152 million, respectively, were refle cted on the Company’s “Classified List.” Capital appreciation bonds are reported at the par amount at the time of issuance of the insurance policy. Refer to “Note 6: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statemen ts included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for additional information on the Company’s surveillance categories. International and Structured Finance Insurance T he international and structured finance insurance segment’s case basis reserves and insurance loss recoveries recorded in accordance with GAAP do not include estimates for policies insuring credit derivatives or losses and recoveries on financial guarantee VIEs that are eliminated in consolidati on. Policies insuring credit derivative contracts are accounted for as derivatives and carried at fair value under GAAP. The fair values of insured derivative contracts are influenced by a variety of market and transaction-specific factors that may be unre lated to potential future claim payments under the Company’s insurance policies. In the absence of credit impairments on insured derivative contracts or the early termination of such contracts at a loss, the cumulative unrealized losses recorded from these contracts should reverse before or at the maturity of the contracts. RMBS Case Basis Reserves and Recoveries (Financial Guarantees) The Company’s RMBS reserves and recoveries relate to financial guarantee insurance policies. The Company calculated RMBS ca se basis reserves as of March 31, 2015 for both second and first-lien RMBS transactions using a process called the “Roll Rate Methodology.” The Roll Rate Methodology is a multi-step process using a database of loan level information, a proprietary in ternal cash flow model, and a commercially available model to estimate potential losses and recoveries on insured bonds. “Roll Rate” is defined as the probability that current loans become delinquent and that loans in the delinquent pipeline are charged-of f or liquidated. Generally, Roll Rates are calculated for the previous three months and averaged. The loss reserve estimates are based on a probability-weighted average of three scenarios of loan losses (base case, stress case, and an additional stress cas e). In calculating ultimate cumulative losses for RMBS, the Company estimates the amount of second-lien loans that are expected to be charged-off (deemed uncollectible by servicers of the transactions) or first-lien loans liquidated in the future. Refer to “Note 6: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, for additional information on the Company’s second and first-l ien Roll Rate Methodology. Second-lien RMBS Reserves The Company’s second-lien RMBS case basis reserves as of March 31, 2015 relate to RMBS backed by home e quity lines of credit (“HELOC”) and closed-end second mortgages (“CES”). As of March 31, 2015 and December 31, 2014, the Company established loss and LAE reserves totaling $71 million and $70 million, respectively, related to second-lien RMBS issues after the elimination of $29 million and $21 million, respectively, as a result of consolidating VIEs. The Company monitors portfolio performance on a monthly basis against projected performance, reviewing delinquencies, Roll Rates, and prepayment rates (including voluntary and involuntary). However, loan performance remains difficult to predict and losses may exceed expectations. In the event of a material deviation in actual performance from projected performance, the Company would increase or decrease the case basis reserves accordingly. If actual performance were to remain at the current levels for six additional month s compared to the pro bability-weighted outcome currently used by the Company, t he addition to the case basis reserves would be approximately $40 million. Second-lien R MBS Recoveries The Company primarily records two types of recoveries related to insured second-lien RMBS exposures: “put-back” claims related to those mortgage loans whose inclusion in insured securitizations failed to comply with representations and warra nties (“ineligible loans”) and excess spread that is generated from performing loans in the insured transactions. Excess Spread As of March 31, 2015 and December 31, 2014, the Company recorded estimated recoveries of $502 million and $523 million, respectively, for the reimbursement of past and future expected claims through excess spread in insured second-lien RMBS transactions after the elimination of $124 million and $137 million, respectively, as a result of consolidating VIEs. As of March 31, 2015, $488 million and $14 million were included in “Insurance loss recoverable” and “Loss and loss adjustment expense reserves” on the Company’s consolidated balance sheets, respectively, after th e elimination of $122 million and $2 million in “Insurance loss recoverable” and in “Loss and loss adjustment expense reserves”, respectively, as a result of consolidating VIEs. As of December 31, 2014, $496 million and $27 million were included in “Ins urance loss recoverable” and “Loss and loss adjustment expense reserves” on the Company’s consolidated balance sheets, respectively, after the elimination of $132 million and $5 million, respectively, as a result of consolidating VIEs. Excess spread is generated by performing loans within insured second-lien RMBS securitizations and is the difference between interest inflows on mortgage loan collateral and interest outflows on insured beneficial interests. The amount of excess spread depends on the futur e loss trends (which include future delinquency trends, average time to charge-off delinquent loans, and the availability of pool mortgage insurance), the future spread between Prime and London Interbank Offered Rate (“LIBOR”) interest rates; and borrower refinancing behavior which results in voluntary prepayments. Minor deviations in loss trends and voluntary prepayments may substantially impact the amounts collected from excess spread. Ineligible Mortgage Loans To date, MBIA has settled the majority of t he Company’s put-back claims. Only its claims against Credit Suisse remain outstanding. Settlement amounts have been consistent with the put-back recoveries previously included in the Company’s financial statements. The contract claim remaining with Credi t Suisse is related to the inclusion of ineligible mortgage loans in the 2007-2 Home Equity Mortgage Trust securitization. Credit Suisse has challenged the Company’s assessment of the ineligibility of individual mortgage loans and the dispute is the subjec t of litigation for which there is no assurance that the Company will prevail. As of March 31, 2015 and December 31, 2014, the Company recorded estimated recoveries of $385 m illion and $379 million, respectively, related to its Cred it Suisse put-back claims, reflected in “Loan repurchase commitments” presented under the heading “Assets of consolidated variable interest entities” on the Company’s consolidated balance sheets. Based on the Company’s assessment of the strength of its contractual put-back rights against Credit Suisse, which it is pursuing through litigation claims, as well as on its prior settlements with other sellers/servicers and success of other monolines in l itigation against other sellers/servicers, the Company believes it will prevail in enforcing its contractual rights and that it is entitled to collect the full amount of its incurred losses, which totaled $418 million through March 31, 2015. The Comp any is also entitled to collect interest on amounts paid; it believes that in context of its put-back litigation, the appropriate rate should be the New York State statutory rate. However, the Company currently calculates its put-back recoveries using the contractual interest rate, which is lower than the New York State statutory rate. Notwithstanding the foregoing, u ncertainty remains with respect to the ultimate outcome of the litigation with Credit Suisse, which is contemplated in the scenario based-mode ling the Company uses. The Credit Suisse recovery scenarios are based on the amount of incurred losses measured against certain probabilities of ultimate resolution of the dispute with Credit Suisse. Most of the probability weight is assigned to partial re covery scenarios and a re discounted using the current risk-free discount rates associated with the underlying transaction’s cash flows. The Company continues to consider all relevant facts and circumstances in developing its assumptions on expected cash i nflows, probability of potential recoveries (including the outcome of litigation) and recovery period. The estimated amount and likelihood of potential recoveries are expected to be revised and supplemented to the extent there are developments in the pendi ng litigation and/or changes to the financial condition of Credit Suisse. While the Company believes it will be successful in realizing its recoveries from its contract claims against Credit Suisse, the ultimate amounts recovered may be materially differen t from those recorded by the Company given the inherent uncertainty of the manner of resolving the claims (e.g., litigation) and the assumptions used in the required estimation process for accounting purposes which are based, in part, on judgments and othe r information that are not easily corroborated by historical data or other relevant benchmarks. First-lien RMBS Reserves The Company’s first-lien RMBS case basis reserves as of March 31, 2015, which primarily relate to RMBS backed by alternative A-pa per and subprime mortgage loans, were determined using the Roll Ra te Methodology. As of March 31, 2015, the Company established loss and LAE reserves totaling $267 million related to first-lien RMBS issues after the elimination of $1 million as a result of consolidating VIEs. As of December 31, 2014, the Company established loss and LAE reserves totaling $263 million related to first-lien RMBS issues. CDO Reserves The Company has established loss and LAE reserves on certain transactions within its collateralized debt obligation (“CDO”) portfolio, including its multi-sector CDO, commercial mortgage-backed securities (“CMBS”), and high-yield corporate CDO asset classes. MBIA’s insured multi-sector CDOs are transactions that include a variety of collateral ranging from corporate bonds to structured finance assets (which includes but are not limited to RMBS related collateral, multi-sector and corporate CDOs). These transactions were insured as either financia l guarantee insurance policies or credit derivatives with the majority currently insured in the form of financial guarantees. MBIA’s insured C MBS transactions comprise structured CMBS pools and commercial real estate (“CRE”) CDOs. The majority of this portfolio is accounted for as insured credit derivatives and carried at fair value in the Company’s consolidated financial statements. Refer to “Note 8: Derivative Instruments” for a further discussion of the Company’s use of de rivatives and their impact on the Company’s consolidated financial statements. Since the Company’s insured credit derivatives have similar terms, conditions, risks, and economic profiles to its financial guarantee insurance policies, the Company evaluates them for impairment in the same way that it estimates loss and LAE for its financial guarantee policies. MBIA’s high yield corporate CDO portfolio c omprises middle-market/special-opportunity corporate loan transactions. These transactions were insured as f inancial guarantee insurance policies. The following discussion provides information about the Company’s process for estimating reserves and credit impairments on these policies, determined as the present value of the probability-weighted potential future losses, net of estimated recoveries, across multiple scenarios. The Company considers several factors when developing the range of potential outcomes and their impact on MBIA. The following approaches require substantial judgments about the future performa nce of each transaction: Each transaction is evaluated for its commutation potential, which is customized by counterparty and considers historical commutation prices, the level of dialogue with the counterparty and the credit quality and payment profile o f the underlying exposure. A range of loss scenarios is considered under different default and severity rates for each transaction’s collateral. The loss es projected by these approaches vary widely. Actual losses will be a function of the proportion of collateral in the pools that default and the loss severities associated with those defaults. As of March 31, 2015 and December 31, 2014, the Company’s l oss and LAE reserves were $113 million and $111 million, respectively, related to the total CDO financial guarantee insurance portfolio after the elimination of $2 33 million and $225 million, respectively, as a result of consolidating VIEs. For the thr ee months ended March 31, 201 5, the Company incurred $2 million of losses and LAE recorded in earnings related to the total CDO financial guarantee insurance portfolio after the elimination of a n $8 million expense as a result of consolidating VIEs. In the event of further deteriorating performance of the collateral referenced or held in the total CDO portfolio, the amount of losses estimated by the Company could increase substant ially. Loss and LAE Activity Financial Guarantee Insurance Losses (Excluding Derivative and Consolidated VIEs) The Company’s financial guarantee insurance losses and LAE, net of reinsurance for the three months ended March 31, 2015 and 2014 are presented in the following table:
|  |  | Three Months Ended March 31, |
| In millions |  | 2015 |  | 2014 |
| U.S. Public Finance Insurance Segment |  | $ | (6) |  | $ | (14) |
| International and Structured Finance Insurance Segment: |  |  |  |  |  |  |
|  | Second-lien RMBS |  |  | (8) |  |  | 25 |
|  | First-lien RMBS |  |  | 9 |  |  | 30 |
|  | Other(1) |  |  | (1) |  |  | 9 |
| Losses and LAE expense (benefit) |  | $ | (6) |  | $ | 50 |
| ________________ |  |  |  |
| (1) - Includes ABS CDOs, CMBS, non-U.S. public finance and other issues. |  |  |  |
The decrease in losses and LAE expense f or the three months ended March 31, 2015 com pa red with the same period of 201 4 primarily related to de creases in expected payments and increases in expected recoveries on insured first and second-lien RMBS securitizations. Costs associated with remediating insured obligations assigned to the Company’s surveillance categories are recorded as LAE and included in “Losses and loss adjustment” expenses on the Company’s consolidated statements of operat ions. For the three months ended March 31, 2015 and 2014, gross LAE related to remediating insured obligations were a benefit of $2 million and an expense of $4 million, respectively. Decreases in LAE are due to lower litigation expenses as a result of settlements. T h e f ol l owin g t abl e p r o v ide s in f o rm a t i o n a bou t t h e f i nan c ia l gu a r a n t e e s an d r el a t e d c la i m li a bili t y i n c lude d i n ea ch of M B I A’s s u rv e i llan ce c a t ego r ie s a s o f March 31, 2015:
|  |  |  |  | Surveillance Categories
|  |  |  |  | Caution |  | Caution |  | Caution |  |  |  |  |  |
|  |  |  |  | List |  | List |  | List |  | Classified |  |  |
$ in millions |  | Low |  | Medium |  | High |  | List |  | Total
Number of policies |  |  | 31 |  |  | 102 |  |  | 5 |  |  | 172 |  |  | 310
Number of issues(1) |  |  | 16 |  |  | 6 |  |  | 4 |  |  | 119 |  |  | 145
Remaining weighted average contract |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| period (in years) |  |  | 6.8 |  |  | 12.1 |  |  | 9.4 |  |  | 6.9 |  |  | 7.6
Gross insured contractual payments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| outstanding:(2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Principal |  | $ | 1,573 |  | $ | 1,375 |  | $ | 156 |  | $ | 7,780 |  | $ | 10,884
|  | Interest |  |  | 593 |  |  | 822 |  |  | 80 |  |  | 2,876 |  |  | 4,371
|  |  | Total |  | $ | 2,166 |  | $ | 2,197 |  | $ | 236 |  | $ | 10,656 |  | $ | 15,255
Gross Claim Liability |  | $ | - |  | $ | - |  | $ | - |  | $ | 791 |  | $ | 791
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Gross Potential Recoveries |  |  | - |  |  | - |  |  | - |  |  | 719 |  |  | 719
| Discount, net(3) |  |  | - |  |  | - |  |  | - |  |  | 96 |  |  | 96
Net claim liability (recoverable) |  | $ | - |  | $ | - |  | $ | - |  | $ | (24) |  | $ | (24)
Unearned premium revenue |  | $ | 60 |  | $ | 17 |  | $ | 5 |  | $ | 76 |  | $ | 158
__________ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.
(2) - Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.
(3) - Represents discount related to Gross Claim Liability and Gross Potential Recoveries.
T h e f ol l owin g t abl e p r o v ide s in f o rm a t i o n a bou t t h e f i nan c ia l gu a r a n t e e s an d r el a t e d c la i m li a bili t y i n c lude d i n ea ch of M B I A’s s u rv e i llan ce c a t ego r ie s a s o f December 31, 2014:
|  |  |  |  | Surveillance Categories
|  |  |  |  | Caution |  | Caution |  | Caution |  |  |  |  |  |
|  |  |  |  | List |  | List |  | List |  | Classified |  |  |
$ in millions |  | Low |  | Medium |  | High |  | List |  | Total
Number of policies |  |  | 38 |  |  | 98 |  |  | 4 |  |  | 175 |  |  | 315
Number of issues(1) |  |  | 18 |  |  | 7 |  |  | 3 |  |  | 119 |  |  | 147
Remaining weighted average contract |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| period (in years) |  |  | 7.2 |  |  | 12.0 |  |  | 10.1 |  |  | 7.0 |  |  | 7.7
Gross insured contractual payments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| outstanding:(2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Principal |  | $ | 1,757 |  | $ | 1,372 |  | $ | 133 |  | $ | 8,001 |  | $ | 11,263
|  | Interest |  |  | 696 |  |  | 819 |  |  | 68 |  |  | 3,037 |  |  | 4,620
|  |  | Total |  | $ | 2,453 |  | $ | 2,191 |  | $ | 201 |  | $ | 11,038 |  | $ | 15,883
Gross Claim Liability |  | $ | - |  | $ | - |  | $ | - |  | $ | 850 |  | $ | 850
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Gross Potential Recoveries |  |  | - |  |  | - |  |  | - |  |  | 860 |  |  | 860
| Discount, net(3) |  |  | - |  |  | - |  |  | - |  |  | 14 |  |  | 14
Net claim liability (recoverable) |  | $ | - |  | $ | - |  | $ | - |  | $ | (24) |  | $ | (24)
Unearned premium revenue |  | $ | 63 |  | $ | 19 |  | $ | 5 |  | $ | 80 |  | $ | 167
__________
(1) - An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments.
(2) - Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA.
(3) - Represents discount related to Gross Claim Liability and Gross Potential Recoveries.
The gross claim liability in the preceding tables represents the Company’s estimate of undiscounted probability-weighted future claim payments. A s of March 31, 2015 and December 31, 2014, the gross claim liability primarily related to insured first and second-lien RMBS issues, high yield corporate CDOs and an international road transaction. The gross potent ial recoveries represent the Company’s estimate of undiscounted probability-weighted recoveries of actual claim payments and recoveries of estimated future claim payments. As of March 31, 2015 and December 31, 2014, the gross potential recoveries principally relate d to insured second-lien RMBS and U.S. public finance issues. The Company’s recoveries have been, and remain based on either salvage rights, the rights conferred to MBIA through the transactional documents (inclusive of the insurance agre ement), or subrogation rights embedded within financial guarantee insurance policies. Expected salvage and subrogation recoveries, as well as recoveries from other remediation efforts, reduce the Company’s claim liability. Once a claim payment has been mad e, the claim liability has been satisfied and MBIA’s right to recovery is no longer considered an offset to future expected claim payments, it is recorded as a salvage asset. The amount of recoveries recorded by the Company is limited to paid claims plus t he present value of projected future claim payments. As claim payments are made, the recorded amount of potential recoveries may exceed the remaining amount of the claim liability for a given policy. The gross claim liability and gross potential recoveries reflect the elimination of claim liabilities and potential recoveries related to VIEs consolidated by the Company. The following table presents the components of the Company’s loss and LAE reserves and insurance loss recoverable as reported on the Company’s consolidated balance sheets as of March 31, 2015 and December 31, 2014 for insured obligations within MBIA’s “Classified List.” The loss reserves (claim liability) and insurance claim loss recoverable included in the following table represent t he present value of the probability-weighted future claim payments and recoveries reported in the preceding tables.
|  |  |  | As of |  | As of |
| In millions |  | March 31, 2015 |  | December 31, 2014 |
| Loss reserves (claim liability) |  | $ | 464 |  | $ | 464 |
| LAE reserves |  |  | 35 |  |  | 42 |
|  | Loss and LAE reserves |  | $ | 499 |  | $ | 506 |
| Insurance claim loss recoverable |  | $ | (527) |  | $ | (533) |
| LAE insurance loss recoverable |  |  | - |  |  | - |
|  | Insurance loss recoverable |  | $ | (527) |  | $ | (533) |
| Reinsurance recoverable on unpaid losses |  | $ | 6 |  | $ | 6 |
| Reinsurance recoverable on unpaid LAE reserves |  |  | 1 |  |  | 1 |
|  | Reinsurance recoverable on paid and unpaid losses |  | $ | 7 |  | $ | 7 |
As of March 31, 2015, loss and LAE reserves include $609 m illion of reserves for expected future payments, partially offset by expected recoveries of such future payments of $110 million. As of December 31, 2014, loss and LAE reserves include $653 m illion of reserves for expected future payments, partially offset by expected recoveries of such future payments of $147 million. As of March 31, 2015 and December 31, 2014, the insura nce loss recoverable primarily related to expected future recoveries on second-lien RMBS transactions resulting from excess spread generated by performing loans in such transactions. The decrease in i ns u rance loss recoverable was primarily due to decreases in projected collections from excess spread within insured second-lien RMBS securitizations. The following table presents changes in the Company’s loss and LAE reserves for the three months ended March 31, 2015. Changes in loss and LAE reserves attributable to the accretion of the claim liability discount, changes in discount rates, changes in amount and timing of estimated payments and recoveries, changes in assumptions and changes in LAE reserves are recorded in “Losses and loss adjus tment” expenses in the Company’s consolidated statements of operations. As of March 31, 2015, the weighted average risk-free rate used to discount the Company’s loss reserves (claim liability) was 1.49%. LAE reserves are generally expected to be settled within a one-year period and are not discounted.
In millions |  | Changes in Loss and LAE Reserves for the Three Months Ended March 31, 2015 |  |  |
Gross Loss |  | Loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Gross Loss
and LAE |  | Payments |  | Accretion |  |  |  |  |  |  |  | Changes in |  |  |  |  |  |  |  | and LAE
Reserves as of |  | for Cases |  | of Claim |  | Changes in |  |  |  | Unearned |  | Changes in |  |  |  | Reserves as of
December 31, |  | with |  | Liability |  | Discount |  | Changes in |  | Premium |  | LAE |  |  |  | March 31,
2014 |  | Reserves |  | Discount |  | Rates |  | Assumptions |  | Revenue |  | Reserves |  | Other(1) |  | 2015
$ | 506 |  | $ | (11) |  | $ | 2 |  | $ | 3 |  | $ | 8 |  | $ | 5 |  | $ | (7) |  | $ | (7) |  | $ | 499
____________
(1) - Primarily changes in amount and timing of payments.
The decrease in the Company’s gross loss and LAE reserves reflected in the preceding table was primarily related to loss payments and changes in amount and timing of payments on insured first and second-lien RMBS issues and decreases in reserves due to changes in discount rates on U.S. public finance issues. These were partially offset by changes in assumptions and increases in reserves due to changes in discount rates on insured first and second-lien RMBS issues. C u rr en t pe r io d ch a nge s i n th e C o m pan y’s est i mat e o f p o tent i a l r e c o v e r i e s ma y be r e c o r de d a s a n in s u r an c e l oss r e c ove r a bl e as s et, net t e d a g ain s t th e g r os s l o s s an d L A E r e se r v e l i abi l i t y, or bo t h. The following table present s ch anges in the Company’s insurance loss recoverable and changes in recoveries on unpaid losses reported within the Company’s claim liability for the three months ended March 31, 2015. Changes in insurance loss recoverable attributable to the a ccretion of the discount on the recoverable, changes in discount rates, changes in amount and timing of estimated collections, changes in assumptions and changes in LAE recoveries are recorded in “Losses and loss adjustment” expenses in the Company’s conso lidated statements of operations.
|  |  |  |  |  | Changes in Insurance Loss Recoverable and Recoveries on Unpaid Losses |  |  |
|  |  |  |  |  | for the Three Months Ended March 31, 2015 |  |  |
|  |  |  |  | Collections |  |  |  |  |  |  |  |  |  |  |
|  |  | As of |  | for Cases |  | Accretion |  | Changes in |  |  |  |  | Changes in |  |  |  | As of
|  |  | December 31, |  | with |  | of |  | Discount |  | Changes in |  | LAE |  |  |  | March 31,
In millions |  | 2014 |  | Recoveries |  | Recoveries |  | Rates |  | Assumptions |  | Recoveries |  | Other(1) |  | 2015
Insurance loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| recoverable |  | $ | 533 |  | $ | (21) |  | $ | 2 |  | $ | 5 |  | $ | 14 |  | $ | - |  | $ | (6) |  | $ | 527
Recoveries on unpaid |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| losses |  |  | 147 |  |  | - |  |  | 1 |  |  | 3 |  |  | (40) |  |  | (1) |  |  | - |  |  | 110
Total |  | $ | 680 |  | $ | (21) |  | $ | 3 |  | $ | 8 |  | $ | (26) |  | $ | (1) |  | $ | (6) |  | $ | 637
____________
(1) Primarily changes in amount and timing of collections.
Th e decrease in the C ompan y’s i n s uran ce l o ss re c overabl e and recoveries on unpaid losses durin g 2015 was pr i mar ily du e to collections a ss o ci ate d with first and second-lien RMBS i ss ue s out s tandin g a s o f December 31, 2014 and changes in assumptions on an international road transaction.

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- 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/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 13 -Article 7 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6482485&loc=d3e14764-158437 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6482852&loc=d3e14931-158439 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6482485&loc=d3e14754-158437 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03.13(a)(1),(b)) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 + Details
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