XML 28 R13.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Variable Interest Entities | 12 Months Ended
--- | ---
Dec. 31, 2015
Text Block [Abstract] |
Variable Interest Entities | Note 4: Variable Interest Entities Through MBIA’s international and structured finance insurance segment, the Company provides credit protection to issuers of obligations that may involve issuer-sponsored special purpose entities (“SPEs”). An SPE may be considered a VIE to the extent the SPE’s total equity at risk is not sufficient to permit the SPE to finance its activities without additional subordinated financial support or its equity investors lack any one of the following char acteristics: (i) the power to direct the activities of the SPE that most significantly impact the entity’s economic performance or (ii) the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity. A holder of a variable interest or interests in a VIE is required to assess whether it has a controlling financial interest, and thus is required to consolidate the entity as primary beneficiary. An assessment of a controlling financial interest id entifies the primary beneficiary as the variable interest holder that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to a bsorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. An ongoing reassessment of controlling financial interest is required to be performed based on any substantive changes in facts and circumstances involving the VIE and its variable interests. The Company evaluates issuer-sponsored SPEs initially to determine if an entity is a VIE, and is required to reconsider its initial de termination if certain events occur. For all entities determined to be VIEs, MBIA performs an ongoing reassessment to determine whether its guarantee to provide credit protection on obligations issued by VIEs provides the Company with a controlling financi al interest. Based on its ongoing reassessment of controlling financial interest, the Company determines whether a VIE is required to be consolidated or deconsolidated. The Company makes its determination for consolidation based on a qualitative assessment of the purpose and design of a VIE, the terms and characteristics of variable interests of an entity, and the risks a VIE is designed to create and pass through to holders of variable interests. The Company generally provides credit protection on obligati ons issued by VIEs, and holds certain contractual rights according to the purpose and design of a VIE. The Company may have the ability to direct certain activities of a VIE depending on facts and circumstances, including the occurrence of certain continge nt events, and these activities may be considered the activities of a VIE that most significantly impact the entity’s economic performance. The Company generally considers its guarantee of principal and interest payments of insured obligations, given nonpe rformance by a VIE, to be an obligation to absorb losses of the entity that could potentially be significant to the VIE. At the time the Company determines it has the ability to direct the activities of a VIE that most significantly impact the economic per formance of the entity based on facts and circumstances, MBIA is deemed to have a controlling financial interest in the VIE and is required to consolidate the entity as primary beneficiary. The Company performs an ongoing reassessment of controlling financ ial interest that may result in consolidation or deconsolidation of any VIE. The Company’s advisory services segment provide d asset management and advisory services to VIEs. During 2014, the Company consolidated three VIEs as the primary beneficiary, pursuant to this segment’s activities. As of December 31, 2014, the Company h eld approximately $4 million of the subordinated notes issued by one of the VIEs. The Company ha d no obligation or commitment to provide additional financial support or liquidity to t hese VIEs. Effective January 1, 2015, the Company completed the sale of its Cutwater business and deconsolidated these VIEs. Refer to “Note 1: Business Developments and Risks and Uncertainties” for additional information about the sale of Cutwater. N o n c o n s o l i d a t e d V I Es Insurance T h e f ol l owin g t able s p r e s en t t h e t o t a l a ss e t s o f n o n c on s oli d a t e d V I E s i n whi ch t h e Co m p a n y ho l d s a v a r iab l e i n t e r e s t as o f December 31, 2015 a n d 2014, through its insurance operations. T h e f o l lowi n g t abl e s al so p r e s en t t h e Co m pan y’s m a x i m u m e x po s u re t o l o ss f o r n o n c on s olid a t e d V I Es and carrying v a lu e s o f t h e a s s e t s a n d liab i li t ie s f o r i t s in t e r e st s in t he se V I Es a s o f December 31, 2015 an d 2014. T h e Co m pa n y ha s agg r eg a t e d non c o n s o lida t e d V I Es b a s e d o n t he und e r l y in g c r e di t e x p o s u r e o f t h e in s u r e d ob l iga t ion. T h e na t u re o f t h e C o m p a n y’s v a r i a bl e in t e r e s t s i n non c on s o l ida t ed V I Es i s r el a t e d t o f in a n c ia l gua r an t ee s, i n s u r e d CD S c on t r a c t s an d an y i n v e s t m en t s i n o b liga t io n s i ss ue d by non c o n s o lida t e d V I Es.
|  |  |  |  | December 31, 2015
|  |  |  |  |  |  |  |  |  |  | Carrying Value of Assets |  | Carrying Value of Liabilities
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loss and Loss |  |  |
|  |  |  |  |  |  |  | Maximum |  |  |  |  |  |  |  |  |  | Unearned |  | Adjustment |  |  |
|  |  |  |  | VIE |  | Exposure |  |  |  |  | Premiums |  | Insurance Loss |  | Premium |  | Expense |  | Derivative
In millions |  | Assets |  | to Loss |  | Investments(1) |  | Receivable(2) |  | Recoverable(3) |  | Revenue(4) |  | Reserves(5) |  | Liabilities(6)
Insurance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Global structured finance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Collateralized debt obligations |  | $ | 5,712 |  | $ | 3,046 |  | $ | 51 |  | $ | 9 |  | $ | - |  | $ | 6 |  | $ | 108 |  | $ | 6
|  | Mortgage-backed residential |  |  | 11,524 |  |  | 6,072 |  |  | 23 |  |  | 31 |  |  | 416 |  |  | 30 |  |  | 306 |  |  | -
|  | Mortgage-backed commercial |  |  | 319 |  |  | 219 |  |  | - |  |  | 1 |  |  | - |  |  | 1 |  |  | - |  |  | -
|  | Consumer asset-backed |  |  | 5,538 |  |  | 1,712 |  |  | - |  |  | 13 |  |  | - |  |  | 11 |  |  | 4 |  |  | -
|  | Corporate asset-backed |  |  | 5,218 |  |  | 3,446 |  |  | - |  |  | 26 |  |  | 2 |  |  | 30 |  |  | - |  |  | -
| Total global structured finance |  |  | 28,311 |  |  | 14,495 |  |  | 74 |  |  | 80 |  |  | 418 |  |  | 78 |  |  | 418 |  |  | 6
| Global public finance |  |  | 44,162 |  |  | 14,579 |  |  | - |  |  | 160 |  |  | - |  |  | 186 |  |  | - |  |  | -
Total insurance |  | $ | 72,473 |  | $ | 29,074 |  | $ | 74 |  | $ | 240 |  | $ | 418 |  | $ | 264 |  | $ | 418 |  | $ | 6
__________ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(1) - Reported within "Investments" on MBIA's consolidated balance sheets.
(2) - Reported within "Premiums receivable" on MBIA's consolidated balance sheets.
(3) - Reported within "Insurance loss recoverable" on MBIA's consolidated balance sheets.
(4) - Reported within "Unearned premium revenue" on MBIA's consolidated balance sheets.
(5) - Reported within "Loss and loss adjustment expense reserves" on MBIA's consolidated balance sheets.
(6) - Reported within "Derivative liabilities" on MBIA's consolidated balance sheets.
|  |  |  |  | December 31, 2014
|  |  |  |  |  |  |  |  |  |  | Carrying Value of Assets |  | Carrying Value of Liabilities
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loss and Loss |  |  |
|  |  |  |  |  |  |  | Maximum |  |  |  |  |  |  |  |  |  | Unearned |  | Adjustment |  |  |
|  |  |  |  | VIE |  | Exposure |  |  |  |  | Premiums |  | Insurance Loss |  | Premium |  | Expense |  | Derivative
In millions |  | Assets |  | to Loss |  | Investments(1) |  | Receivable(2) |  | Recoverable(3) |  | Revenue(4) |  | Reserves(5) |  | Liabilities(6)
Insurance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Global structured finance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Collateralized debt obligations |  | $ | 8,613 |  | $ | 5,623 |  | $ | 110 |  | $ | 24 |  | $ | - |  | $ | 20 |  | $ | 70 |  | $ | 102
|  | Mortgage-backed residential |  |  | 14,136 |  |  | 7,459 |  |  | 9 |  |  | 41 |  |  | 518 |  |  | 39 |  |  | 307 |  |  | -
|  | Mortgage-backed commercial |  |  | 571 |  |  | 279 |  |  | - |  |  | 1 |  |  | - |  |  | 1 |  |  | - |  |  | -
|  | Consumer asset-backed |  |  | 6,008 |  |  | 1,989 |  |  | - |  |  | 16 |  |  | - |  |  | 14 |  |  | 12 |  |  | -
|  | Corporate asset-backed |  |  | 6,612 |  |  | 4,608 |  |  | - |  |  | 41 |  |  | 6 |  |  | 47 |  |  | - |  |  | -
| Total global structured finance |  |  | 35,940 |  |  | 19,958 |  |  | 119 |  |  | 123 |  |  | 524 |  |  | 121 |  |  | 389 |  |  | 102
| Global public finance |  |  | 49,686 |  |  | 16,698 |  |  | - |  |  | 179 |  |  | - |  |  | 211 |  |  | - |  |  | -
Total insurance |  | $ | 85,626 |  | $ | 36,656 |  | $ | 119 |  | $ | 302 |  | $ | 524 |  | $ | 332 |  | $ | 389 |  | $ | 102
__________ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(1) - Reported within "Investments" on MBIA's consolidated balance sheets.
(2) - Reported within "Premiums receivable" on MBIA's consolidated balance sheets.
(3) - Reported within "Insurance loss recoverable" on MBIA's consolidated balance sheets.
(4) - Reported within "Unearned premium revenue" on MBIA's consolidated balance sheets.
(5) - Reported within "Loss and loss adjustment expense reserves" on MBIA's consolidated balance sheets.
(6) - Reported within "Derivative liabilities" on MBIA's consolidated balance sheets.
T he maximum exposure to loss as a result of MBIA’s variable interests in VIEs is represented by insurance in force. Insurance in force is the maximum future payments of princip a l a nd i n te r est whic h ma y be r e qu i r ed und e r c o mmitment s t o ma ke p a y me n t s on i n s ur e d ob li g atio ns iss u e d by n on co n s o li d ate d V I E s. Consolidated VIEs The carrying amounts of assets and liabilities of consolidated VIEs were $5.4 billion and $5.1 billion, respectively, as of December 31, 2015, and $5.0 billion and $4.8 billion, respectively, as of December 31, 2014. The carrying amounts of assets and liabilities are presented separately in “Assets of consolidated variable interest entities” and “Liabilities of consolidated variable interest entities” o n the Company’s consolidated balance sheets. The carrying amounts of assets and liabilities of consolidated VIEs in the Company’s advisory services segment were $751 million and $754 million, respectively, as of December 31, 2014, and are presented separat ely in “Assets held for sale” and “Liabilities held for sale” on the Company’s consolidated balance sheets. VIEs are consolidated or deconsolidated based on an ongoing reassessment of controlling financial interest, when events occur or circumstances arise, and whether the ability to exercise rights that constitute power to direct activities of any VIEs are present according to the design and characteristics of these entities. One additional VIE was consolidated during the year ended December 31, 2015 and three additional VIE s w ere consolidated during the year ended December 31, 2014. Holders of insured obligations of issuer-sponsored VIEs related to the Company’s international and structured finance insurance segment do not have recourse to th e general assets of MBIA. In the event of nonpayment of an insured obligation issued by a consolidated VIE, the Company is obligated to pay principal and interest, when due, on the respective insured obligation only. The Company’s exposure to consolidated VIEs is limited to the credit protection provided on insured obligations and any additional variable interests held by MBIA.

X
- Definition Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=28200181&loc=d3e5747-111685 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=28200181&loc=SL6228884-111685 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=28200181&loc=d3e5728-111685 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Variable Interest Entity -URI http://asc.fasb.org/extlink&oid=6528138 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=28200181&loc=SL6759159-111685 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=28200181&loc=d3e5710-111685 + Details
Name: | us-gaap_ScheduleOfVariableInterestEntitiesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_TextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration