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Insurance Regulations and Dividends | 12 Months Ended
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Dec. 31, 2017
Insurance Regulations And Dividends [Abstract] |
Insurance Regulations And Dividends | Note 14: Insurance Regulations and Dividends National and MBIA Insurance Corp oration are subject to insurance regulations and supervision of the State of New York (their state of incorporation) and all U.S. and non-U.S. jurisdictions in which they are licensed to conduct insurance business. In order to maintain their New York State financi al guarantee insurance license, National and MBIA Insurance Corporation are required to maintain a minimum of $65 million of policyholders’ surplus. MBIA Mexico is regulated by the Comisión Nacional de Seguros y Fianzas in Mexico. The extent of insurance r egulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing minimum standards of solvency and business conduct, which must be maintained by insurance companies. Among other things, these laws prescribe permitted classes and concentrations of investments and limit both the aggregate and individual securities risks that National and MBIA Insurance Corp oration may insure on a net basis based on the type of obligations insured. In addition, s ome insurance laws and regulations require the approval or filing of policy forms and rates. National and MBIA Insurance Corp oration are required to file detailed annual financial statements with the NYSDFS. The operations and accounts of National and MBIA Insurance Corp oration are subject to examination by regulatory agencies at regular intervals. Statutory Capital and Regulations National For the years ended December 31, 2017 and 2016, National h ad a statutory net loss of $321 million and statutory net income of $192 million, respectively. As of December 31, 2017, Nation al’s statutory capital was $2.8 billion, consisting of policyholders’ surplus of $2.2 billion a nd contingency reserves of $594 m illion. As of December 31, 2016, National had statutory capital of $3.5 billion. MBIA Insurance Corporation As of December 31, 2017, MBIA Insurance Corp oration’s statut ory capital was $464 m illion, consisting of policyholders’ surplus of $237 m illion and contingency reserve of $227 million. As of December 31, 2016, MBIA Insurance Corp oration had statutory capital of $492 m illion. As of December 31, 2017 and 2016, MBIA Insurance Corporation was in compliance with its aggregate risk limits under the NYIL, but was not in compliance with certain of its single risk limits. If new overages occur with resp ect to its single risk limits, MBIA Insurance Corporation will report them to the NYSDFS. Under NYIL, MBIA Insurance Corporation is also required to establish a contingency reserve to provide protection to policyholders in the event of extreme losses in adverse economic events. The amount of the reserve is based on the percentage of principal insured or premiums earned, depending on the type of obligation (net of collateral, reinsurance, refunding, refinancings and certain insured securities). Under NYIL, MBIA Insurance Corporation is required to invest its minimum surplus and contingency reserves, and 50% of its loss reserves and unearned premium reserves, in certain qualifying assets. As of December 31, 2017, MBIA Insurance Corpo ration maintained its minimum requirement of policyholders’ surplus but did not have enough qualifying assets to support its contingency reserves and 50% of its loss reserves and unearned premium reserves. Not having enough qualifying as sets to support its contingency reserves limits the amount of earned surplus that might otherwise be available for the payment of dividends. R eductions in the contingency reserve may be recognized based on excess reserves and under certain stipulated condition s, subject to the approval of the Superintendent of the NYSDFS. Under NYIL, MBIA Insurance Corporation is required to maintain admitted assets greater than the aggregate amount of liabilities and outstanding capital stock. As of December 31,2017, MBIA Insurance Corporation’s admitted assets did not exceed the aggregate amount of its liabilities and outstanding capital stock. If MBIA Insurance Corporation is not in compliance with the above mentioned requirements, the NYSDFS may prevent MBIA Insurance Co rporation from transacting any new financial guarantee insurance business until it no longer exceeds the limitations. R esults of operations for MBIA Insurance Corp oration determined in accordance with statutory accounting practices for the years ended December 31, 2017 and 2016 were statutory net income of $107 million and a statutory net loss of $323 million, respectively. For the year ended December 31, 2016, MBIA Insurance Corporation recorded a loss of $114 million to adjust the carrying value of MBIA UK to its estimated fair value less costs to sell. In addition, MBIA Insurance Corporation’s policyholders’ surplus was negatively impacted as of December 31, 2016 by $112 milli on, as it was not permitted to treat the portion of its investment in subsidiaries in excess of 60% of net admitted assets less the par value of common and preferred stock and liabilities as an admitted asset, as required under NYI L. MBIA Insurance Corporation’s policyholders’ su rplus as of December 31, 2017 and 2016 included negative unassigned surplus of $1.8 billion. MBIA Insurance Corporation’s policyholders’ surplus may be further negatively imp acted if future additional insured losses are incurred. Dividends NYIL regulates the payment of dividends by financial guarantee insurance companies and provides that such comp anies may not declare or distribute dividends except out of statutory earned surplus. Under N YIL, the sum of (i) the amount of dividends declared or distributed during the preceding 12-month period and (ii) the dividend to be declared may not exceed the le sser of (a) 10% of policyholders’ surplus, as reported in the latest statutory financial statements or (b) 100% of adjusted net investment income for such 12-month period (the net investment income for such 12-month peri od plus the excess, if any, of net investment income over dividends declared or distributed during the two-year period preceding such 12-month period), unless the Superintendent of the NYSDFS approves a greater dividend distribution based upon a finding th at the insurer will retain sufficient surplus to support its obligations. In 2017 and 2016, National declared and paid dividends of $118 million to its ultimate parent, MBIA Inc. In 2017, MBIA Insurance Corp oration did not declare or pay any dividends to MBIA Inc. or the holders of its preferred stock. MBIA Insurance Corp oration is currently unable to pay dividends, including those related to its preferred stock, as a result of its earned surplus deficit as of December 31, 2017 and is not expected to have any statutory capacity to pay any dividends in the near term. In connection with MBIA Insurance Corp oration obtaining approval from the NYSDFS to release excess contingency reserves in previous periods, MBIA Insurance Corp oratio n agreed that it would not pay any dividends without prior approval from the NYSDFS.

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