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Investments (Tables) | 9 Months Ended
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Sep. 30, 2023
Text Block [Abstract] |
Amortized Cost And Fair Value Of Available-For-Sale And Held-To-Maturity Investment Portfolios | The following tables present the amortized cost, allowance for credit losses, corresponding gross unrealized gains and losses and fair value for AFS investments in the Company’s consolidated investment portfolio as of September 30, 2023 and December 31, 2022:
|  |  |  |  |  | September 30, 2023 |
|  |  |  |  |  |  |  |  | Allowance |  |  | Gross |  |  | Gross |  |  |  |
|  |  |  |  |  | Amortized |  |  | for Credit |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
In millions |  | Cost |  |  | Losses |  |  | Gains |  |  | Losses |  |  | Value |
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| U.S. Treasury and government agency |  | $ | 462 |  |  | $ | - |  |  | $ | 1 |  |  | $ | (41 | ) |  | $ | 422 |
| State and municipal bonds |  |  | 131 |  |  |  | - |  |  |  | 1 |  |  |  | (15 | ) |  |  | 117 |
| Foreign governments |  |  | 25 |  |  |  | - |  |  |  | 1 |  |  |  | (4 | ) |  |  | 22 |
| Corporate obligations |  |  | 884 |  |  |  | - |  |  |  | - |  |  |  | (158 | ) |  |  | 726 |
| Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Residential mortgage-backed agency |  |  | 197 |  |  |  | - |  |  |  | - |  |  |  | (26 | ) |  |  | 171 |
|  | Residential mortgage-backed non-agency |  |  | 33 |  |  |  | - |  |  |  | - |  |  |  | (7 | ) |  |  | 26 |
|  | Commercial mortgage-backed |  |  | 22 |  |  |  | - |  |  |  | - |  |  |  | (1 | ) |  |  | 21 |
| Asset-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Collateralized debt obligations |  |  | 114 |  |  |  | - |  |  |  | 1 |  |  |  | (2 | ) |  |  | 113 |
|  | Other asset-backed |  |  | 46 |  |  |  | - |  |  |  | - |  |  |  | (3 | ) |  |  | 43 |
Total AFS investments |  | $ | 1,914 |  |  | $ | - |  |  | $ | 4 |  |  | $ | (257 | ) |  | $ | 1,661 |
MBIA Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) Note 7: Investments (continued)
|  |  |  |  |  | December 31, 2022 |
|  |  |  |  |  |  |  |  | Allowance |  |  | Gross |  |  | Gross |  |  |  |
|  |  |  |  |  | Amortized |  |  | for Credit |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
In millions |  | Cost |  |  | Losses |  |  | Gains |  |  | Losses |  |  | Value |
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| U.S. Treasury and government agency |  | $ | 541 |  |  | $ | - |  |  | $ | 5 |  |  | $ | (38 | ) |  | $ | 508 |
| State and municipal bonds |  |  | 173 |  |  |  | - |  |  |  | 2 |  |  |  | (11 | ) |  |  | 164 |
| Foreign governments |  |  | 23 |  |  |  | - |  |  |  | - |  |  |  | (3 | ) |  |  | 20 |
| Corporate obligations |  |  | 862 |  |  |  | - |  |  |  | 1 |  |  |  | (148 | ) |  |  | 715 |
| Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Residential mortgage-backed agency |  |  | 217 |  |  |  | - |  |  |  | - |  |  |  | (22 | ) |  |  | 195 |
|  | Residential mortgage-backed non-agency |  |  | 96 |  |  |  | - |  |  |  | 3 |  |  |  | (11 | ) |  |  | 88 |
|  | Commercial mortgage-backed |  |  | 24 |  |  |  | - |  |  |  | - |  |  |  | (1 | ) |  |  | 23 |
| Asset-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Collateralized debt obligations |  |  | 117 |  |  |  | - |  |  |  | - |  |  |  | (5 | ) |  |  | 112 |
|  | Other asset-backed |  |  | 110 |  |  |  | - |  |  |  | - |  |  |  | (4 | ) |  |  | 106 |
Total AFS investments |  | $ | 2,163 |  |  | $ | - |  |  | $ | 11 |  |  | $ | (243 | ) |  | $ | 1,931 |
Distribution By Contractual Maturity Of Available-For-Sale and Held-To-Maturity Investments | The following table presents the distribution by contractual maturity of AFS fixed-maturity securities at amortized cost, net of allowance for credit losses, and fair value as of September 30, 2023. Contractual maturity may differ from expected maturity as borrowers may have the right to call or prepay obligations.
|  | AFS Securities |
|  | Net |  |  |  |
|  | Amortized |  |  | Fair |
In millions |  | Cost |  |  | Value |
Due in one year or less |  | $ | 172 |  |  | $ | 172 |
Due after one year through five years |  |  | 379 |  |  |  | 364 |
Due after five years through ten years |  |  | 280 |  |  |  | 233 |
Due after ten years |  |  | 671 |  |  |  | 518 |
Mortgage-backed and asset-backed |  |  | 412 |  |  |  | 374 |
Total fixed-maturity investments |  | $ | 1,914 |  |  | $ | 1,661 |
Gross Unrealized Losses Related To Available-For-Sale And Held-To-Maturity Investments | The following tables present the non-credit related gross unrealized losses related to AFS investments as of September 30, 2023 and December 31, 2022:
|  |  |  |  |  | September 30, 2023 |
|  |  |  |  |  | Less than 12 Months |  |  | 12 Months or Longer |  |  | Total |
|  |  |  |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
In millions |  | Value |  |  | Losses |  |  | Value |  |  | Losses |  |  | Value |  |  | Losses |
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| U.S. Treasury and government agency |  | $ | 64 |  |  | $ | (3 | ) |  | $ | 196 |  |  | $ | (38 | ) |  | $ | 260 |  |  | $ | (41 | )
| State and municipal bonds |  |  | 48 |  |  |  | (3 | ) |  |  | 54 |  |  |  | (12 | ) |  |  | 102 |  |  |  | (15 | )
| Foreign governments |  |  | 5 |  |  |  | - |  |  |  | 8 |  |  |  | (4 | ) |  |  | 13 |  |  |  | (4 | )
| Corporate obligations |  |  | 192 |  |  |  | (5 | ) |  |  | 500 |  |  |  | (153 | ) |  |  | 692 |  |  |  | (158 | )
| Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Residential mortgage-backed agency |  |  | 13 |  |  |  | - |  |  |  | 132 |  |  |  | (26 | ) |  |  | 145 |  |  |  | (26 | )
|  | Residential mortgage-backed non-agency |  |  | 3 |  |  |  | - |  |  |  | 22 |  |  |  | (7 | ) |  |  | 25 |  |  |  | (7 | )
|  | Commercial mortgage-backed |  |  | 11 |  |  |  | (1 | ) |  |  | 7 |  |  |  | - |  |  |  | 18 |  |  |  | (1 | )
| Asset-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Collateralized debt obligations |  |  | 9 |  |  |  | - |  |  |  | 101 |  |  |  | (2 | ) |  |  | 110 |  |  |  | (2 | )
|  | Other asset-backed |  |  | 3 |  |  |  | - |  |  |  | 34 |  |  |  | (3 | ) |  |  | 37 |  |  |  | (3 | )
Total AFS investments |  | $ | 348 |  |  | $ | (12 | ) |  | $ | 1,054 |  |  | $ | (245 | ) |  | $ | 1,402 |  |  | $ | (257 | )
MBIA Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) Note 7: Investments (continued)
|  |  |  |  |  | December 31, 2022 |
|  |  |  |  |  | Less than 12 Months |  |  | 12 Months or Longer |  |  | Total |
|  |  |  |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
In millions |  | Value |  |  | Losses |  |  | Value |  |  | Losses |  |  | Value |  |  | Losses |
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| U.S. Treasury and government agency |  | $ | 266 |  |  | $ | (34 | ) |  | $ | 29 |  |  | $ | (4 | ) |  | $ | 295 |  |  | $ | (38 | )
| State and municipal bonds |  |  | 92 |  |  |  | (10 | ) |  |  | 1 |  |  |  | (1 | ) |  |  | 93 |  |  |  | (11 | )
| Foreign governments |  |  | 9 |  |  |  | (3 | ) |  |  | - |  |  |  | - |  |  |  | 9 |  |  |  | (3 | )
| Corporate obligations |  |  | 508 |  |  |  | (106 | ) |  |  | 141 |  |  |  | (42 | ) |  |  | 649 |  |  |  | (148 | )
| Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Residential mortgage-backed agency |  |  | 112 |  |  |  | (9 | ) |  |  | 65 |  |  |  | (13 | ) |  |  | 177 |  |  |  | (22 | )
|  | Residential mortgage-backed non-agency |  |  | 65 |  |  |  | (10 | ) |  |  | 2 |  |  |  | (1 | ) |  |  | 67 |  |  |  | (11 | )
|  | Commercial mortgage-backed |  |  | 18 |  |  |  | (1 | ) |  |  | 1 |  |  |  | - |  |  |  | 19 |  |  |  | (1 | )
| Asset-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Collateralized debt obligations |  |  | 51 |  |  |  | (1 | ) |  |  | 60 |  |  |  | (4 | ) |  |  | 111 |  |  |  | (5 | )
|  | Other asset-backed |  |  | 44 |  |  |  | (3 | ) |  |  | 24 |  |  |  | (1 | ) |  |  | 68 |  |  |  | (4 | )
Total AFS investments |  | $ | 1,165 |  |  | $ | (177 | ) |  | $ | 323 |  |  | $ | (66 | ) |  | $ | 1,488 |  |  | $ | (243 | )
Distribution Of Securities By Percentage Of Fair Value Below Book Value By More Than 5% | The following table presents the distribution of securities in an unrealized loss position for a continuous twelve-month period or longer where fair value was below book value by more than 5% as of September 30, 2023:
|  | AFS Securities |
Percentage of Fair Value |  | Number of |  |  | Book Value |  |  | Fair Value |
Below Book Value |  | Securities |  |  | (in millions) |  |  | (in millions) |
> 5% to 15% |  |  | 194 |  |  | $ | 336 |  |  | $ | 304 |
> 15% to 25% |  |  | 153 |  |  |  | 386 |  |  |  | 309 |
> 25% to 50% |  |  | 159 |  |  |  | 373 |  |  |  | 244 |
> 50% |  |  | 3 |  |  |  | 5 |  |  |  | 2 |
Total |  |  | 509 |  |  | $ | 1,100 |  |  | $ | 859 |
Summary of Allowance for Credit Losses on AFS Investments | The following tables present the rollforward of allowance for credit losses on AFS investments for the three and nine months ended September 30, 2022. The additions to the allowance for credit losses for the nine months ended September 30, 2022 were related to concerns on an issuer’s credit deterioration as a result of the Ukraine and Russia conflict. In the third quarter of 2022, these securities were impaired to fair value due to the Company's intent to sell and the credit losses were reversed. The Company did not establish an allowance for credit losses for AFS securities for the three or nine months ended September 30, 2023.
|  | Three Months Ended September 30, 2022 |
|  | Balance |  |  | Additions |  |  | Additions |  |  | Reductions |  |  | Reductions- |  |  |  | Change in |  |  |  |  |  |  |  |  | Balance |
|  | as of |  |  | not |  |  | arising |  |  | from |  |  | Intent |  |  |  | Allowance |  |  |  |  |  |  |  |  | as of |
|  | June 30, |  |  | previously |  |  | from PCD |  |  | Securities |  |  | to sell |  |  |  | Previously |  |  | Write |  |  |  |  |  | September 30, |
In millions |  | 2022 |  |  | recorded |  |  | Assets |  |  | Sold |  |  | or MLTN |  |  |  | Recorded |  |  | Offs |  |  | Recoveries |  |  | 2022 |
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate obligations |  | $ | 3 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 3 |  |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Total Allowance on AFS investments |  | $ | 3 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 3 |  |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
|  | Nine Months Ended September 30, 2022 |
|  | Balance |  |  | Additions |  |  | Additions |  |  | Reductions |  |  | Reductions- |  |  |  | Change in |  |  |  |  |  |  |  |  | Balance |
|  | as of |  |  | not |  |  | arising |  |  | from |  |  | Intent |  |  |  | Allowance |  |  |  |  |  |  |  |  | as of |
|  | December 31, |  |  | previously |  |  | from PCD |  |  | Securities |  |  | to sell |  |  |  | Previously |  |  | Write |  |  |  |  |  | September 30, |
In millions |  | 2021 |  |  | recorded |  |  | Assets |  |  | Sold |  |  | or MLTN |  |  |  | Recorded |  |  | Offs |  |  | Recoveries |  |  | 2022 |
AFS Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-maturity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate obligations |  | $ | - |  |  | $ | 3 |  |  | $ | - |  |  | $ | - |  |  | $ | 3 |  |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Total Allowance on AFS investments |  | $ | - |  |  | $ | 3 |  |  | $ | - |  |  | $ | - |  |  | $ | 3 |  |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Securities Held In Unrealized Loss Position And Insured By Financial Guarantor and The Related Insurance Loss Reserve On Company Insured Investments | The following table provides information about securities held by the Company as of September 30, 2023 that were in an unrealized loss position and insured by a financial guarantor, along with the amount of insurance loss reserves corresponding to the par amount owned by the Company. The Company did not hold any securities in an unrealized loss position that were insured by a third-party financial guarantor as of September 30, 2023. MBIA Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) Note 7: Investments (continued)
|  |  |  |  |  |  | Unrealized |  |  | Insurance Loss |
In millions |  | Fair Value |  |  | Loss |  |  | Reserve (1) |
Mortgage-backed |  | $ | 16 |  |  | $ | (5 | ) |  | $ | 20 |
Corporate obligations |  |  | 77 |  |  |  | (42 | ) |  |  | - |
Other |  |  | 7 |  |  |  | - |  |  |  | - |
Total |  | $ | 100 |  |  | $ | (47 | ) |  | $ | 20 |
(1) - Insurance loss reserve estimates are based on the proportion of par value owned to the total amount of par value insured and are discounted using a discount rate equal to the risk-free rate applicable to the currency and weighted average remaining life of the insurance contract and may differ from the fair value.
Gross Realized Gains and Losses From Sales Of Available-For-Sale Securities | The proceeds and the gross realized gains and losses from sales of fixed-maturity securities held as AFS for the three and nine months ended September 30, 2023 and 2022 are as follows:
|  |  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
In millions |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Proceeds from sales |  | $ | 108 |  |  | $ | 339 |  |  | $ | 380 |  |  | $ | 859 |
Gross realized gains |  | $ | - |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | 3 |
Gross realized losses |  | $ | (13 | ) |  | $ | (17 | ) |  | $ | (24 | ) |  | $ | (42 | )
Portion Of Unrealized Gains Losses Recognized On Equity Investments |
|  |  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
In millions |  | 2023 |  | 2022 |  |  | 2023 |  |  | 2022 |
Net gains (losses) recognized during the period on equity and trading securities |  | $ | (1 | ) |  | $ | (3 | ) |  | $ | 2 |  |  | $ | (31 | )
Less: |  |  |  |  |  |  |  |  |  |  |  |
| Net gains (losses) recognized during the period on equity and trading securities sold during the period |  |  | (1 | ) |  |  | (6 | ) |  |  | (1 | ) |  |  | (6 | )
Unrealized gains (losses) recognized during the period on equity and trading securities still held at the reporting date |  | $ | - |  |  | $ | 3 |  |  | $ | 3 |  |  | $ | (25 | )

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