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Insurance Regulations and Dividends | 12 Months Ended
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Dec. 31, 2018
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 domicile) 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 financial 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. MBIA Corp.’s Spanish Branch is subject to local regulation in Spain. The extent of insurance regulation and supervision varies by ju risdiction, 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, some insurance laws and regulations req uire 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, 2018 and 2017, National h ad statutory net loss es of $27 million and $321 million, respectively. As of December 31, 2018, Nation al’s statutory capital was $2.5 billion, consisting of policyholders’ surplus of $2.0 billion a nd contingency r eserves of $522 m illion. As of December 31, 2017, National had statutory capital of $2.8 billion. MBIA Insurance Corporation As of December 31, 2018, MBIA Insurance Corp oration’s statut ory capital was $555 m illion, consisting of policyholders’ surplus of $356 m illion and contingency reserve of $199 million. As of December 31, 2017, MBIA Insurance Corp oration had statutory capital of $464 m il lion. F or the years ended December 31, 2018 and 2017, MBIA Insurance Corporation had statutory net income of $134 million and $107 million, respectively. MBIA Insurance Corporation’s policyholders’ surplus as of December 31, 2018 and 2017 included negative unassigned surplus of $1.7 billion and $1.8 billion, respectively. MBIA Insurance Corporation’s policyholders’ surplus may be further negatively impacted if future additional insured losses are incurred. As of December 31, 2018 and 2017, 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 respect 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 i nsured 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, 2018, MBIA Insurance Corporation 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 cert ain stipulated conditions, subject to the approval of the Superintendent of the NYSDFS. If MBIA Insurance Corporation does not compl y with the above mentioned requirements, the NYSDFS may prevent MBIA Insurance Corporation from transacting any new financial guarantee insurance business until it no longer exceeds the limitations. Dividends NYIL regulates the payment of dividends by fina ncial guarantee insurance companies and provides that such companies 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 pe riod and (ii) the dividend to be declared may not exceed the lesser 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 period 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 a pproves a greater dividend distribution based upon a finding that the insurer will retain sufficient surplus to support its obligations. In 2018 and 2017, National declared and paid dividends of $108 million and $118 mi llion, respectively, to its ultimate parent, MBIA Inc. In 2018, 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, 2018 and is not expected to have any statutory capacity to pay any dividends in the near term. In connect ion with MBIA Insurance Corp oration obtaining approval from the NYSDFS to release excess contingency reserves in previous periods, MBIA Insurance Corp oration agreed that it would not pay any dividends without prior approval from the NYSDFS.

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