Document And Entity Information (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Feb. 15, 2011	Jun. 30, 2010
Entity Registrant Name	MGIC INVESTMENT CORP
Entity Central Index Key	0000876437
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,400,000
Entity Common Stock, Shares Outstanding		201,115,257
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2010

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Premiums written:
Direct	$ 1,169,081	$ 1,346,191	$ 1,661,544
Assumed	3,090	3,947	12,221
Ceded (note 11)	(70,376)	(107,111)	(207,718)
Net premiums written	1,101,795	1,243,027	1,466,047
Decrease (increase) in unearned premiums	66,952	59,314	(72,867)
Net premiums earned (note 11)	1,168,747	1,302,341	1,393,180
Investment income, net of expenses (note 6)	247,253	304,678	308,517
Realized investment gains, net (note 6)	102,581	92,874	52,889
Total other-than-temporary impairment losses	(9,644)	(42,704)	(65,375)
Portion of losses recognized in other comprehensive income (loss), before taxes (note 3)	0	1,764	0
Impairment of Investments	9,644	40,940	65,375
Other revenue	11,588	49,573	32,315
Total revenues	1,520,525	1,708,526	1,721,526
Losses and expenses:
Losses incurred, net (notes 9 and 11)	1,607,541	3,379,444	3,071,501
Change in premium deficiency reserves (note 10)	(51,347)	(261,150)	(756,505)
Amortization of deferred policy acquisition costs	7,062	8,204	10,024
Other underwriting and operating expenses, net	218,080	231,408	261,290
Reinsurance fee (note 11)	0	26,407	1,781
Interest expense (note 8)	98,589	89,266	81,074
Total losses and expenses	1,879,925	3,473,579	2,669,165
Loss before tax and joint ventures	(359,400)	(1,765,053)	(947,639)
Provision for (benefit from) income taxes (note 14)	4,335	(442,776)	(397,798)
Income from joint ventures, net of tax (note 12)	0	0	24,486
Net loss	$ (363,735)	$ (1,322,277)	$ (525,355)
Loss per share (notes 3 and 18):
Basic (in dollars per share)	$ (2.06)	$ (10.65)	$ (4.61)
Diluted (in dollars per share)	$ (2.06)	$ (10.65)	$ (4.61)
Weighted average common shares outstanding - basic (shares in thousands, note 3)	176,406	124,209	113,962
Weighted average common shares outstanding - diluted (shares in thousands, note 3)	176,406	124,209	113,962
Dividends per share	$ 0	$ 0	$ 0.075

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Securities, available-for-sale, at fair value:
Fixed maturities (amortized cost, 2010 - $7,366,808; 2009 - $7,091,840)	$ 7,455,238	$ 7,251,574
Equity securities	3,044	2,891
Total investment portfolio	7,458,282	7,254,465
Cash and cash equivalents	1,304,154	1,185,739
Accrued investment income	70,305	79,828
Reinsurance recoverable on loss reserves (note 11)	275,290	332,227
Reinsurance recoverable on paid losses (note 11)	34,160	9,297
Prepaid reinsurance premiums (note 11)	2,637	3,554
Premiums receivable	79,567	90,139
Home office and equipment, net	28,638	29,556
Deferred insurance policy acquisition costs	8,282	9,022
Income taxes recoverable (note 14)	0	275,187
Other assets	72,327	135,405
Total assets	9,333,642	9,404,419
Liabilities:
Loss reserves (notes 9 and 11)	5,884,171	6,704,990
Premium deficiency reserve (note 10)	178,967	193,186
Unearned premiums (note 11)	215,157	280,738
Senior notes (note 8)	376,329	377,098
Convertible senior notes (note 8)	345,000	0
Convertible junior debentures (note 8)	315,626	291,785
Other liabilities	349,337	254,041
Total liabilities	7,664,587	8,101,838
Contingencies (note 20)
Shareholders' equity (note 15):
Common stock, $1 par value, shares authorized 460,000,000; shares issued 2010 - 205,046,780; 2009 - 130,163,060 outstanding 2010 - 200,449,588; 2009 - 125,101,057	205,047	130,163
Paid-in capital	1,138,942	443,294
Treasury stock (shares at cost 2010 - 4,597,192 2009 - 5,062,003)	(222,632)	(269,738)
Accumulated other comprehensive income, net of tax (note 3)	22,136	74,155
Retained earnings	525,562	924,707
Total shareholders' equity	1,669,055	1,302,581
Total liabilities and shareholders' equity	$ 9,333,642	$ 9,404,419

CONSOLIDATED BALANCE SHEETS Parenthetical (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Securities, available-for-sale, at fair value:
Fixed maturities, amortized cost	$ 7,366,808	$ 7,091,840
Shareholders' equity (note 15):
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	460,000,000	460,000,000
Common stock, shares issued (in shares)	205,046,780	130,163,060
Common stock, shares outstanding (in shares)	200,449,588	125,101,057
Treasury stock, shares at cost (in shares)	4,597,192	5,062,003

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) In Thousands	Total	Common stock [Member]	Paid-in capital [Member]	Treasury stock [Member]	Accumulated other comprehensive income (loss) [Member]	Retained earnings [Member]	Comprehensive income (loss) [Member]
Balance at Dec. 31, 2007		$ 123,067	$ 316,649	$ (2,266,364)	$ 70,675	$ 4,350,316
Net loss	(525,355)					(518,914)	(518,914)
Change in unrealized investment gains and losses, net (notes 6 and 7)		0	0	0	(116,939)	0	(116,939)
Dividends declared (note 16)		0	0	0	0	(8,159)
Common stock shares issued (note 15)		7,052	68,706	0	0	0
Reissuance of treasury stock, net (note 15)		0	(41,686)	1,989,491	0	(1,569,567)
Equity compensation (note 18)		0	20,562	0	0	0
Defined benefit plan adjustments, net (note 13)		0	0	0	(44,649)	0	(44,649)
Unrealized foreign currency translation adjustment, net		0	0	0	(16,354)	0	(16,354)
Other		0	2,836	0	478	0	478
Comprehensive loss							(696,378)
Balance at Dec. 31, 2008		130,119	367,067	(276,873)	(106,789)	2,253,676
Cumulative effect of accounting change (convertible debt) at Dec. 31, 2008		0	73,475	0	0	(6,442)
Balance (as adjusted) at Dec. 31, 2008		130,119	440,542	(276,873)	(106,789)	2,247,234
Net loss	(1,322,277)					(1,322,277)	(1,322,277)
Change in unrealized investment gains and losses, net (notes 6 and 7)		0	0	0	154,358	0	154,358
Noncredit component of impairment losses, net (note 6)		0	0	0	(1,764)	0	(1,764)
Common stock shares issued upon debt conversion (note 8)		44	263	0	0	0
Reissuance of treasury stock, net (note 15)		0	(11,613)	7,135	0	(545)
Equity compensation (note 18)		0	14,102	0	0	0
Defined benefit plan adjustments, net (note 13)		0	0	0	10,704	0	10,704
Unrealized foreign currency translation adjustment, net		0	0	0	17,646	0	17,646
Other		0	0	0	0	295
Comprehensive loss							(1,141,333)
Balance at Dec. 31, 2009	1,302,581	130,163	443,294	(269,738)	74,155	924,707
Net loss	(363,735)					(363,735)	(363,735)
Change in unrealized investment gains and losses, net (notes 6 and 7)		0	0	0	(69,074)	0	(69,074)
Common stock shares issued (note 15)		74,884	697,492	0	0	0
Reissuance of treasury stock, net (note 15)		0	(14,425)	47,106	0	(35,410)
Equity compensation (note 18)		0	12,581	0	0	0
Defined benefit plan adjustments, net (note 13)		0	0	0	6,390	0	6,390
Unrealized foreign currency translation adjustment, net		0	0	0	10,665	0	10,665
Comprehensive loss							(415,754)
Balance at Dec. 31, 2010	$ 1,669,055	$ 205,047	$ 1,138,942	$ (222,632)	$ 22,136	$ 525,562

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Cash flows from operating activities:
Net loss	$ (363,735)	$ (1,322,277)	$ (525,355)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Amortization of deferred insurance policy acquisition costs	7,062	8,204	10,024
Capitalized deferred insurance policy acquisition costs	(6,322)	(5,722)	(10,360)
Depreciation and other amortization	60,882	60,349	33,688
Decrease (increase) in accrued investment income	9,523	11,028	(18,027)
Decrease (increase) in reinsurance recoverable on loss reserves	56,937	(99,239)	(197,744)
Decrease in prepaid reinsurance premiums	917	862	4,299
Decrease in premiums receivable	10,572	7,462	9,732
(Increase) decrease in real estate	(2,390)	29,028	112,340
(Decrease) increase in loss reserves	(820,819)	1,929,438	2,133,073
Decrease in premium deficiency reserve	(14,219)	(261,150)	(756,505)
(Decrease) increase in unearned premiums	(65,581)	(55,360)	63,865
Deferred tax (benefit) provision	(75)	176,279	411,683
Decrease (increase) in income taxes recoverable (current)	293,681	(179,006)	140,460
Equity earnings from joint ventures	0	0	(33,794)
Distributions from joint ventures	0	0	22,195
Realized investment gains, net	(102,581)	(92,874)	(52,889)
Net investment impairment losses	9,644	40,940	65,375
Other	51,074	81,992	(47,152)
Net cash (used in) provided by operating activities	(875,430)	329,954	1,364,908
Cash flows from investing activities:
Purchase of equity securities	(156)	(1,387)	(89)
Purchase of fixed maturities	(5,225,794)	(4,147,412)	(3,592,600)
Additional investment in joint ventures	0	0	(546)
Proceeds from sale of investment in joint ventures	0	0	150,316
Proceeds from sale of equity securities	0	1,273	0
Repayment of note receivable from joint ventures	83,500	0	0
Proceeds from sale of fixed maturities	4,287,312	3,663,239	1,724,780
Proceeds from maturity of fixed maturities	740,959	554,980	413,328
Net increase (decrease) in payable for securities	2,275	(17,890)	19,547
Net cash (used in) provided by investing activities	(111,904)	52,803	(1,285,264)
Cash flows from financing activities:
Dividends paid to shareholders	0	0	(8,159)
Repayment of note payable	0	(200,000)	(100,000)
Repayment of long-term debt	(1,000)	(94,352)	0
Net proceeds from convertible debentures	0	0	377,199
Proceeds from reissuance of treasury stock	0	0	383,959
Net proceeds from convertible senior notes	334,373	0	0
Common stock shares issued	772,376	0	75,758
Net cash provided by (used in) financing activities	1,105,749	(294,352)	728,757
Net increase in cash and cash equivalents	118,415	88,405	808,401
Cash and cash equivalents at beginning of year	1,185,739	1,097,334	288,933
Cash and cash equivalents at end of year	$ 1,304,154	$ 1,185,739	$ 1,097,334

Nature of business

12 Months Ended

Dec. 31, 2010

Nature of business [Abstract]

Nature of business [Text Block]

1.	Nature of business

MGIC Investment Corporation is a holding company which, through Mortgage Guaranty Insurance Corporation ("MGIC") and several other subsidiaries, is principally engaged in the mortgage insurance business. We provide mortgage insurance to lenders throughout the United States and to government sponsored entities (“GSEs”) to protect against loss from defaults on low down payment residential mortgage loans. Our principal product is primary mortgage insurance. Primary mortgage insurance may be written through the flow channel, in which loans are insured in individual, loan-by-loan transactions. Primary mortgage insurance may also be written through the bulk channel, in which portfolios of loans are individually insured in single, bulk transactions. Prior to 2008, we wrote significant volume through the bulk channel, substantially all of which was Wall Street bulk business, which we discontinued writing in 2007. We did not write any business through the bulk channel during 2009 or 2010. Prior to 2009, we also wrote pool mortgage insurance. We wrote an insignificant amount of pool business during 2009 and none in 2010. Through certain other non-insurance subsidiaries, we also provide various services for the mortgage finance industry, such as contract underwriting and portfolio analysis and retention. In 2007, we began providing mortgage insurance to lenders in Australia. In view of our need to dedicate capital to our domestic mortgage insurance operations, we have reduced our Australian headcount and are no longer writing new business in Australia. Our Australian operations are included in our consolidated financial statements; however they are not material to our consolidated results.

At December 31, 2010, our direct domestic primary insurance in force (representing the principal balance in our records of all mortgage loans that we insure) and direct domestic primary risk in force (representing the insurance in force multiplied by the insurance coverage percentage) was approximately $191.3 billion and $49.0 billion, respectively. Our direct pool risk in force at December 31, 2010 was approximately $2.7 billion. The $2.7 billion includes $1.5 billion of risk on pool policies with no aggregate loss limits. Prior to December 31, 2010, we disclosed the estimated risk amount that would credit enhance these loans to a ‘AA' level based on a rating agency model. In 2010, we did not renew our subscription to this model and no longer estimate this amount. At December 31, 2009 for $2.0 billion of risk with no aggregate loss limits, risk in force under the model was estimated at $190 million. Our risk in force in Australia at December 31, 2010 was approximately $1.0 billion which represents the risk associated with 100% coverage on the insurance in force. However the mortgage insurance we provided in Australia only covers the unpaid loan balance after the sale of the underlying property.

Capital

The insurance laws or regulations of 17 jurisdictions, including Wisconsin, require a mortgage insurer to maintain a minimum amount of statutory capital relative to the risk in force (or a similar measure) in order for the mortgage insurer to continue to write new business. We refer to these requirements as the risk-to-capital requirement. While formulations of minimum capital may vary in certain jurisdictions, the most common measure applied allows for a maximum permitted risk-to-capital ratio of 25 to 1. At December 31, 2010, MGIC's risk-to-capital ratio was 19.8 to 1 and the risk-to-capital ratio of our combined insurance operations (which includes reinsurance affiliates) was 23.2 to 1. Also, at December 31, 2010, MGIC's policyholders position (policyholders position is the insurer's net worth or surplus, contingency reserve and a portion of the reserves for unearned premiums) exceeded the required regulatory minimum of our domiciliary state by approximately $225 million, and we exceeded the required minimum by approximately $290 million on a combined statutory basis. A high risk-to-capital ratio on a combined basis could affect MGIC's ability to utilize reinsurance arrangements with its subsidiaries or subsidiaries of our holding company, absent a contribution of capital to such subsidiaries. These reinsurance arrangements permit MGIC to write insurance with a higher coverage percentage than it could on its own under certain state-specific requirements. Based upon internal company estimates, MGIC's risk-to-capital ratio over the next few years, after giving effect to any contribution to MGIC of the proceeds from our April 2010 common stock and convertible notes offerings beyond the contribution already made, could reach 40 to 1 or even higher under a stress loss scenario.

In December 2009, the Office of the Commissioner of Insurance of the State of Wisconsin (“OCI”) issued an order waiving, until December 31, 2011, its risk-to-capital requirement. MGIC has also applied for waivers in all other jurisdictions that have risk-to-capital requirements. MGIC has received waivers from some of these jurisdictions which expire at various times. One waiver expired on December 31, 2010 and was not immediately renewed because the need for a waiver was not considered imminent. MGIC may reapply for the waiver. Some jurisdictions have denied the request and others may deny the request. The OCI and insurance departments of other jurisdictions, at their sole discretion, may modify, terminate or extend their waivers. If the OCI or another insurance department modifies or terminates its waiver, or if it fails to renew its waiver after expiration, depending on the circumstances, MGIC could be prevented from writing new business anywhere, in the case of the waiver from the OCI, or in the particular jurisdiction, in the case of the other waivers, if MGIC's risk-to-capital ratio exceeds 25 to 1 unless MGIC obtained additional capital to enable it to comply with the risk-to-capital requirement. New insurance written in the jurisdictions that have risk-to-capital requirements represented approximately 50% of new insurance written in 2010. If we were prevented from writing new business in all jurisdictions, our insurance operations in MGIC would be in run-off (meaning no new loans would be insured but loans previously insured would continue to be covered, with premiums continuing to be received and losses continuing to be paid on those loans) until MGIC either met the applicable risk-to-capital requirement or obtained a necessary waiver to allow it to once again write new business.

We cannot assure you that the OCI or any other jurisdiction that has granted a waiver of its risk-to-capital requirements will not modify or revoke the waiver, that it will renew the waiver when it expires or that MGIC could obtain the additional capital necessary to comply with the risk-to-capital requirement. Depending on the circumstances, the amount of additional capital we might need could be substantial.

We have implemented a plan to write new mortgage insurance in MGIC Indemnity Corporation (“MIC”) in selected jurisdictions in order to address the likelihood that in the future MGIC will not meet the minimum regulatory capital requirements discussed above and may not be able to obtain appropriate waivers of these requirements in all jurisdictions in which minimum requirements are present. MIC has received the necessary approvals, including from the OCI, to write business in all of the jurisdictions in which MGIC would be prohibited from continuing to write new business in the event of MGIC's failure to meet applicable regulatory capital requirements and obtain waivers of those requirements.

In October 2009, we, MGIC and MIC entered into an agreement with Fannie Mae (the “Fannie Mae Agreement”) under which MGIC agreed to contribute $200 million to MIC (which MGIC has done) and Fannie Mae approved MIC as an eligible mortgage insurer through December 31, 2011 subject to the terms of the Fannie Mae Agreement. Under the Fannie Mae Agreement, MIC will be eligible to write mortgage insurance only in those jurisdictions (other than Wisconsin) in which MGIC cannot write new insurance due to MGIC's failure to meet regulatory capital requirements and if MGIC fails to obtain relief from those requirements or a specific waiver of them.

On February 11, 2010, Freddie Mac notified MGIC that it may utilize MIC to write new business in jurisdictions in which MGIC does not meet minimum regulatory capital requirements to write new business and does not obtain appropriate waivers of those requirements. This conditional approval to use MIC as a “Limited Insurer” (the “Freddie Mac Notification”) will expire December 31, 2012. This conditional approval includes terms substantially similar to those in the Fannie Mae Agreement.

Under the Fannie Mae Agreement, Fannie Mae approved MIC as an eligible mortgage insurer only through December 31, 2011. Freddie Mac has approved MIC as a “Limited Insurer” only through December 31, 2012. Whether MIC will continue as an eligible mortgage insurer after these dates will be determined by the applicable GSE's mortgage insurer eligibility requirements then in effect. Further, under the Fannie Mae Agreement and the Freddie Mac Notification, MGIC cannot capitalize MIC with more than the $200 million contribution already made without prior approval from each GSE, which limits the amount of business MIC can write. We believe that the amount of capital that MGIC has contributed to MIC will be sufficient to write business for the term of both the Fannie Mae Agreement and the Freddie Mac Notification in the jurisdictions in which MIC is eligible to do so. Depending on the level of losses that MGIC experiences in the future, however, it is possible that regulatory action by one or more jurisdictions, including those that do not have specific regulatory capital requirements applicable to mortgage insurers, may prevent MGIC from continuing to write new insurance in some or all of the jurisdictions in which MIC is not eligible to write business.

A failure to meet the specific minimum regulatory capital requirements to insure new business does not necessarily mean that MGIC does not have sufficient resources to pay claims on its insurance liabilities. While we believe that MGIC has sufficient claims paying resources to meet its claim obligations on its insurance in force, even in scenarios in which it fails to meet regulatory capital requirements, we cannot assure you that the events that led to MGIC failing to meet regulatory capital requirements would not also result in it not having sufficient claims paying resources. Furthermore, our estimates of MGIC's claims paying resources and claim obligations are based on various assumptions. These assumptions include our anticipated rescission activity, future housing values and future unemployment rates. These assumptions are subject to inherent uncertainty and require judgment by management. Current conditions in the domestic economy make the assumptions about housing values and unemployment rates highly volatile in the sense that there is a wide range of reasonably possible outcomes. Our anticipated rescission activity is also subject to inherent uncertainty due to the difficulty of predicting the amount of claims that will be rescinded and the outcome of any legal proceedings related to rescissions that we make, including those with Countrywide.

Historically, rescissions of policies for which claims have been submitted to us were not a material portion of our claims resolved during a year. However, beginning in 2008, our rescissions of policies have materially mitigated our paid losses. In 2008, 2009 and 2010, rescissions mitigated our paid losses by approximately $0.2 billion, $1.2 billion and $1.2 billion, respectively, (in each case, the figure includes amounts that would have either resulted in a claim payment or been charged to a deductible or aggregate loss limit under a bulk or pool policy, and may have been charged to a captive reinsurer). While we have a substantial pipeline of claims investigations that we expect will eventually result in future rescissions, we expect that rescissions will not continue at the same rates (as a percentage of claims received) we have previously experienced.

In addition, our loss reserving methodology incorporates the effects we expect rescission activity to have on the losses we will pay on our delinquent inventory. A variance between ultimate actual rescission rates and these estimates, as a result of the outcome of claims investigations, litigation, settlements or other factors, could materially affect our losses. We estimate rescissions mitigated our incurred losses by approximately $0.4 billion in 2008, $2.5 billion in 2009 and $0.2 billion in 2010. All of these figures include the benefit of claims not paid in the period as well as the impact of changes in our estimated expected rescission activity on our loss reserves in the period. In recent quarters, between 20% and 28% of claims received in a quarter have been resolved by rescissions. At December 31, 2010, we had 214,724 loans in our primary delinquency inventory; the resolution of a significant portion of these loans will not involve paid claims.

If the insured disputes our right to rescind coverage, the outcome of the dispute ultimately would be determined by legal proceedings. Legal proceedings disputing our right to rescind coverage may be brought up to three years after the lender has obtained title to the property (typically through a foreclosure) or the property was sold in a sale that we approved, whichever is applicable, although in a few jurisdictions there is a longer time to bring such an action. We consider a rescission resolved for reporting purposes even though legal proceedings have been initiated and are ongoing. Although it is reasonably possible that, when the proceedings are completed, there will be a determination that we were not entitled to rescind, we are unable to make a reasonable estimate or range of estimates of the potential liability. Under ASC 450-20, an estimated loss from such proceedings is accrued for only if we determine that the loss is probable and can be reasonably estimated. Therefore, when establishing our loss reserves, we do not include additional loss reserves that would reflect an adverse outcome from ongoing legal proceedings, including those with Countrywide. Countrywide has filed a lawsuit against MGIC alleging that MGIC has denied, and continues to deny, valid mortgage insurance claims. MGIC has filed an arbitration case against Countrywide regarding rescissions and Countrywide has responded seeking damages, including exemplary damages. For more information about this lawsuit and arbitration case, see Note 20 – “Litigation and contingencies.”

In the second quarter of 2010, we entered into a settlement agreement with a lender-customer regarding our rescission practices. Loans covered by this settlement agreement represented fewer than 10% of our policies in force as well as our delinquent inventory. Under this agreement, we waived certain of our rescission rights on loans subject to the agreement and the customer agreed to contribute to the cost of claims that we pay on those loans. The rescission rights we waived are for matters related to loan origination, which historically have been the basis for substantially all of our rescissions. In addition, under the agreement we reversed certain rescissions and the customer waived claims regarding certain other past rescissions. This agreement did not have a significant impact on our established loss reserves. We continue to discuss with other lenders their objections to material rescissions and/or the possibility of entering into a settlement agreement. In addition to the proceedings involving Countrywide, we are involved in legal proceedings with respect to rescissions that we do not consider to be collectively material in amount. Although it is reasonably possible that, when these discussions or legal proceedings are completed, there will be a conclusion or determination that we were not entitled to rescind, we are unable to make a reasonable estimate or range of estimates of the potential liability.

See additional disclosure regarding statutory capital in Note 17 – “Statutory capital.”

Basis of presentation

12 Months Ended

Dec. 31, 2010

Basis of presentation [Abstract]

Basis of presentation [Text Block]

2.	Basis of presentation

The accompanying financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (GAAP), as codified in the Accounting Standards Codification (“ASC”). In accordance with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Principles of consolidation

The consolidated financial statements include the accounts of MGIC Investment Corporation and its majority-owned subsidiaries. All intercompany transactions have been eliminated. Historically, our investments in joint ventures and related loss or income from joint ventures principally consisted of our investment and related earnings in two less than majority owned joint ventures, Credit-Based Asset Servicing and Securitization LLC (C-BASS), and Sherman Financial Group LLC (Sherman). In 2007, we reduced the carrying value of C-BASS to zero. As a result, beginning in 2008, our joint venture income principally consisted of income from Sherman. In August of 2008, we sold our entire interest in Sherman to Sherman. Our equity in the earnings of joint ventures is shown separately, net of tax, on the statement of operations. (See Note 12 – “Investments in joint ventures”)

- Definition

Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References+ Details

Summary of significant accounting policies

12 Months Ended

Dec. 31, 2010

Summary of significant accounting policies [Abstract]

Summary of significant accounting policies [Text Block]

3.	Summary of significant accounting policies

Fair Value Measurements

In accordance with fair value guidance, we applied the following fair value hierarchy in order to measure fair value for assets and liabilities:

Level 1 – Quoted prices for identical instruments in active markets that we have the ability to access. Financial assets utilizing Level 1 inputs primarily include certain U.S. Treasury securities and obligations of the U.S. government.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and inputs, other than quoted prices, that are observable in the marketplace for the financial instrument. The observable inputs are used in valuation models to calculate the fair value of the financial instruments. Financial assets utilizing Level 2 inputs primarily include certain municipal and corporate bonds.

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. Level 3 inputs reflect our own assumptions about the assumptions a market participant would use in pricing an asset or liability. Financial assets utilizing Level 3 inputs include certain state and auction rate (backed by student loans) securities. Non-financial assets which utilize Level 3 inputs include real estate acquired through claim settlement.

To determine the fair value of securities available-for-sale in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. Quality controls are performed throughout this process, which include reviewing tolerance reports, trading information and data changes, and directional moves compared to market moves. This model combines all inputs to arrive at a value assigned to each security. In addition, on a quarterly basis, we perform quality controls over values received from the pricing sources which include reviewing tolerance reports, trading information and data changes, and directional moves compared to market moves. We have not made any adjustments to the prices obtained from the independent pricing sources.

Assets classified as Level 3 are as follows:

Securities available-for-sale classified in Level 3 are not readily marketable and are valued using internally developed models based on the present value of expected cash flows. Our Level 3 securities primarily consist of auction rate securities as observable inputs or value drivers are unavailable due to events described in Note 6 – “Investments”. Due to limited market information, we utilized a discounted cash flow (“DCF”) model to derive an estimate of fair value of these assets at December 31, 2010 and 2009. The assumptions used in preparing the DCF model included estimates with respect to the amount and timing of future interest and principal payments, the probability of full repayment of the principal considering the credit quality and guarantees in place, and the rate of return required by investors to own such securities given the current liquidity risk associated with them. The DCF model is based on the following key assumptions:

Nominal credit risk as substantially all of the underlying collateral of these securities is ultimately guaranteed by the United States Department of Education;

Liquidity by December 31, 2012 through December 31, 2014;

Continued receipt of contractual interest; and

Discount rates ranging from 2.26% to 3.26%, which include a spread for liquidity risk.

Real estate acquired through claim settlement is fair valued at the lower of our acquisition cost or a percentage of appraised value. The percentage applied to appraised value is based upon our historical sales experience adjusted for current trends.

Investments

Our entire investment portfolio is classified as available-for-sale and is reported at fair value. The related unrealized gains or losses are, after considering the related tax expense or benefit, recognized as a component of accumulated other comprehensive income in shareholders' equity. Realized investment gains and losses are reported in income based upon specific identification of securities sold. (See Note 6 – “Investments”)

In April 2009, new accounting guidance regarding the recognition and presentation of other-than-temporary impairments was issued. This guidance was effective beginning with the quarter ending June 30, 2009. The guidance required us to separate an other-than-temporary impairment (“OTTI”) of a debt security into two components when there are credit related losses associated with the impaired debt security; we assert that we do not have the intent to sell the security, and it is more likely than not that we will not be required to sell the security before recovery of our cost basis. Under this guidance the amount of the OTTI related to a credit loss is recognized in earnings, and the amount of the OTTI related to other factors (such as changes in interest rates or market conditions) is recorded as a component of other comprehensive income (loss). In instances where no credit loss exists but it is more likely than not that we will have to sell the debt security prior to the anticipated recovery, the decline in fair value below amortized cost is recognized as an OTTI in earnings. In periods after recognition of an OTTI on debt securities, we account for such securities as if they had been purchased on the measurement date of the OTTI at an amortized cost basis equal to the previous amortized cost basis less the OTTI recognized in earnings. For debt securities for which OTTI were recognized in earnings, the difference between the new amortized cost basis and the cash flows expected to be collected will be accreted into net investment income.

Each quarter we perform reviews of our investments in order to determine whether declines in fair value below amortized cost were considered other-than-temporary in accordance with applicable guidance. In evaluating whether a decline in fair value is other-than-temporary, we consider several factors including, but not limited to:

our intent to sell the security or whether it is more likely than not that we will be required to sell the security before recovery;

extent and duration of the decline;

failure of the issuer to make scheduled interest or principal payments;

change in rating below investment grade; and

adverse conditions specifically related to the security, an industry, or a geographic area.

Under the current guidance a debt security impairment is deemed other than temporary if (1) we either intend to sell the security, or it is more likely than not that we will be required to sell the security before recovery or (2) we do not expect to collect cash flows sufficient to recover the amortized cost basis of the security.

Home office and equipment

Home office and equipment is carried at cost net of depreciation. For financial statement reporting purposes, depreciation is determined on a straight-line basis for the home office, equipment and data processing hardware over estimated lives of 45, 5 and 3 years, respectively. For income tax purposes, we use accelerated depreciation methods.

Home office and equipment is shown net of accumulated depreciation of $62.9 million, $60.1 million and $56.3 million at December 31, 2010, 2009 and 2008, respectively. Depreciation expense for the years ended December 31, 2010, 2009 and 2008 was $2.9 million, $4.3 million and $4.5 million, respectively.

Deferred insurance policy acquisition costs

Costs associated with the acquisition of mortgage insurance business, consisting of employee compensation and other policy issuance and underwriting expenses, are initially deferred and reported as deferred insurance policy acquisition costs ("DAC"). For each underwriting year of business, these costs are amortized to income in proportion to estimated gross profits over the estimated life of the policies. We utilize anticipated investment income in our calculation. This includes accruing interest on the unamortized balance of DAC. The estimates for each underwriting year are reviewed quarterly and updated when necessary to reflect actual experience and any changes to key variables such as persistency or loss development. If a premium deficiency exists, we reduce the related DAC by the amount of the deficiency or to zero through a charge to current period earnings. If the deficiency is more than the related DAC balance, we then establish a premium deficiency reserve equal to the excess, by means of a charge to current period earnings.

Loss reserves

Reserves are established for reported insurance losses and loss adjustment expenses based on when we receive notices of default on insured mortgage loans. We define a default as an insured loan with a mortgage payment that is 45 days or more past due. Reserves are also established for estimated losses incurred on notices of default not yet reported to us. Even though the accounting standard, ASC 944, regarding accounting and reporting by insurance entities specifically excludes mortgage insurance from its guidance relating to loss reserves, we establish loss reserves using the general principles contained in the insurance standard. However, consistent with industry standards for mortgage insurers, we do not establish loss reserves for future claims on insured loans which are not currently in default. Loss reserves are established by estimating the number of loans in our inventory of delinquent loans that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity. Our loss estimates are established based upon historical experience, including rescission and loan modification activity. Amounts for salvage recoverable are considered in the determination of the reserve estimates. Adjustments to reserve estimates are reflected in the financial statements in the years in which the adjustments are made. The liability for reinsurance assumed is based on information provided by the ceding companies.

The incurred but not reported ("IBNR") reserves result from defaults occurring prior to the close of an accounting period, but which have not been reported to us. Consistent with reserves for reported defaults, IBNR reserves are established using estimated claim rates and claim amounts for the estimated number of defaults not reported.

Reserves also provide for the estimated costs of settling claims, including legal and other expenses and general expenses of administering the claims settlement process. (See Note 9 – “Loss reserves”)

Premium deficiency reserves

After our loss reserves are initially established, we perform premium deficiency tests using our best estimate assumptions as of the testing date. Premium deficiency reserves are established, if necessary, when the present value of expected future losses and expenses exceeds the present value of expected future premium and already established reserves. The discount rate used in the calculation of the premium deficiency reserve was based upon our pre-tax investment yield at year-end. Products are grouped for premium deficiency purposes based on similarities in the way the products are acquired, serviced and measured for profitability.

Calculations of premium deficiency reserves require the use of significant judgments and estimates to determine the present value of future premium and present value of expected losses and expenses on our business. The present value of future premium relies on, among other factors, assumptions about persistency and repayment patterns on underlying loans. The present value of expected losses and expenses depends on assumptions relating to severity of claims and claim rates on current defaults, and expected defaults in future periods. These assumptions also include an estimate of expected rescission activity. Assumptions used in calculating the deficiency reserves can be affected by volatility in the current housing and mortgage lending industries and these effects could be material. To the extent premium patterns and actual loss experience differ from the assumptions used in calculating the premium deficiency reserves, the differences between the actual results and our estimate will affect future period earnings. (See Note 10 - “Premium deficiency reserve”)

Revenue recognition

We write policies which are guaranteed renewable contracts at the insured's option on a single, annual or monthly premium basis. We have no ability to reunderwrite or reprice these contracts. Premiums written on a single premium basis and an annual premium basis are initially deferred as unearned premium reserve and earned over the policy term. Premiums written on policies covering more than one year are amortized over the policy life in accordance with the expiration of risk which is the anticipated claim payment pattern based on historical experience. Premiums written on annual policies are earned on a monthly pro rata basis. Premiums written on monthly policies are earned as coverage is provided. When a policy is cancelled, all premium that is non-refundable is immediately earned. Any refundable premium is returned to the lender. Cancellations include rescissions and policies cancelled due to claim payment. When a policy is rescinded, all previously collected premium is returned to the lender and when a claim is paid we return any premium received since the date of default. The liability associated with our estimate of premium to be returned is accrued for separately and separate components of this liability are included in “Other liabilities” and “Premium deficiency reserves” on our consolidated balance sheet. Changes in these liabilities affect premiums written and earned and change in premium deficiency reserve, respectively. In periods prior to 2010, the liability associated with premium to be returned on claim payments is included in loss reserves and changes to this estimate affect losses incurred. This policy did not have a significant impact on premiums written and earned or losses incurred in periods prior to 2010. The actual return of premium for all periods affects premiums written and earned. Policy cancellations also lower the persistency rate which is a variable used in calculating the rate of amortization of deferred insurance policy acquisition costs.

Fee income of our non-insurance subsidiaries is earned and recognized as the services are provided and the customer is obligated to pay. Fee income consists primarily of contract underwriting and related fee-based services provided to lenders and is included in “Other revenue” on the statement of operations.

Income taxes

Federal tax law permits mortgage guaranty insurance companies to deduct from taxable income, subject to certain limitations, the amounts added to contingency loss reserves, which are recorded for regulatory purposes. Generally, the amounts so deducted must be included in taxable income in the tenth subsequent year. However, to the extent incurred losses exceed 35% of net premiums earned in a calendar year, early withdrawals may be made from the contingency reserves with regulatory approval, which would lead to amounts being included in taxable income earlier than the tenth year. The deduction is allowed only to the extent that U.S. government non-interest bearing tax and loss bonds are purchased and held in an amount equal to the tax benefit attributable to such deduction. We account for these purchases as a payment of current federal income taxes. There were no purchases of tax and loss bonds in 2008, 2009 or 2010. The last tax and loss bonds we held were redeemed in 2009.

Deferred income taxes are provided under the liability method, which recognizes the future tax effects of temporary differences between amounts reported in the financial statements and the tax bases of these items. The expected tax effects are computed at the current federal tax rate. We review the need to establish a deferred tax asset valuation allowance on a quarterly basis. We analyze several factors, among which are the severity and frequency of operating losses, our capacity for the carryback or carryforward of any losses, the expected occurrence of future income or loss and available tax planning alternatives. As discussed in Note 14 –“Income Taxes”, beginning in 2009, we have reduced our benefit from income tax by establishing a valuation allowance.

We provide for uncertain tax positions and the related interest and penalties based on our assessment of whether a tax benefit is more likely than not to be sustained under any examination by taxing authorities.

Benefit plans

We have a non-contributory defined benefit pension plan covering substantially all employees, as well as a supplemental executive retirement plan. Retirement benefits are based on compensation and years of service. We recognize these retirement benefit costs over the period during which employees render the service that qualifies them for benefits. Our policy is to fund pension cost as required under the Employee Retirement Income Security Act of 1974.

We offer both medical and dental benefits for retired domestic employees, their spouses and eligible dependents until the retiree reaches the age of 65. Under the plan retirees pay a premium for these benefits. We accrue the estimated costs of retiree medical and dental benefits over the period during which employees render the service that qualifies them for benefits. Historically benefits were generally funded as they were due, however beginning in 2009 some benefits have been paid from the fund. The cost to us has not been significant. (See Note 13 – “Benefit plans”)

Reinsurance

Loss reserves and unearned premiums are reported before taking credit for amounts ceded under reinsurance treaties. Ceded loss reserves are reflected as "Reinsurance recoverable on loss reserves". Ceded unearned premiums are reflected as "Prepaid reinsurance premiums". Ceded losses paid are reflected as “Reinsurance recoverable on paid losses”. Ceded premiums payable are included in “Other liabilities”. We remain liable for all reinsurance ceded. (See Note 11 – “Reinsurance”)

Foreign Currency Translation

Assets and liabilities denominated in a foreign currency are translated at the year-end exchange rates. Operating results are translated at average rates of exchange prevailing during the year. Unrealized gains and losses, net of deferred taxes, resulting from translation are included in accumulated other comprehensive income in stockholders' equity. Gains and losses resulting from transactions in a foreign currency are recorded in current period net income at the rate on the transaction date.

Share-Based Compensation

We have certain share-based compensation plans. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period which generally corresponds to the vesting period. Awards under our plans generally vest over periods ranging from one to five years. (See Note 18 – “Share-based compensation plans”)

Earnings per share

Our basic EPS is based on the weighted average number of common shares outstanding, which excludes participating securities with non-forfeitable rights to dividends of 1.8 million, 1.9 million and 1.5 million, respectively, for the years ended December 31, 2010, 2009 and 2008 because they were anti-dilutive due to our reported net loss. Typically, diluted EPS is based on the weighted average number of common shares outstanding plus common stock equivalents which include certain stock awards, stock options and the dilutive effect of our convertible debt. In accordance with accounting guidance, if we report a net loss from continuing operations, then our diluted EPS is computed in the same manner as the basic EPS. In addition, if any common stock equivalents are anti-dilutive they are always excluded from the calculation. The following is a reconciliation of the weighted average number of shares; however for the years ended December 31, 2010, 2009 and 2008, common stock equivalents of 47.4 million, 37.6 million and 22.8 million, respectively, were not included because they were anti-dilutive.

	Years Ended December 31,

	2010			2009			2008
	(In thousands, except per share data)

Basic (loss) earnings per share:
Average common shares outstanding		176,406			124,209			113,962
Net loss	$	(363,735	)	$	(1,322,277	)	$	(525,355	)
Basic (loss) earnings per share	$	(2.06	)	$	(10.65	)	$	(4.61	)


Diluted (loss) earnings per share:

Weighted-average shares - Basic		176,406			124,209			113,962
Common stock equivalents		-			-			-

Weighted-average shares - Diluted		176,406			124,209			113,962

Net loss	$	(363,735	)	$	(1,322,277	)	$	(525,355	)
Diluted (loss) earnings per share	$	(2.06	)	$	(10.65	)	$	(4.61	)

Other comprehensive income

Our total other comprehensive income was as follows:

	Years Ended December 31,

	2010			2009			2008
	(In thousands)

Net loss	$	(363,735	)	$	(1,322,277	)	$	(525,355	)
Other comprehensive (loss) income		(52,019	)		180,944			(177,464	)

Total other comprehensive loss	$	(415,754	)	$	(1,141,333	)	$	(702,819	)

Other comprehensive income (loss) (net of tax):
Change in unrealized gains and losses on investments	$	(69,074	)	$	154,358		$	(116,939	)
Noncredit component of impairment loss		-			(1,764	)		-
Amortization related to benefit plans		6,390			10,704			(44,649	)
Unrealized foreign currency translation adjustment		10,665			17,646			(16,354	)
Other		-			-			478

Other comprehensive (loss) income	$	(52,019	)	$	180,944		$	(177,464	)

The tax expense (benefit) on other comprehensive income was $5.9 million (adjusted for the valuation allowance, see Note 14 – “Income taxes”), $98.1 million and ($96.3) million for the years ended December 31, 2010, 2009 and 2008, respectively.

At December 31, 2010, accumulated other comprehensive income of $22.1 million included $32.5 million of net unrealized gains on investments, ($30.8) million relating to defined benefit plans and $20.4 million related to foreign currency translation adjustment. At December 31, 2009, accumulated other comprehensive income of $74.2 million included $101.6 million of net unrealized gains on investments, ($37.2) million relating to defined benefit plans and $9.8 million related to foreign currency translation adjustment.

Cash and cash equivalents

We consider cash equivalents to be money market funds and investments with original maturities of three months or less.

Subsequent events

We have considered subsequent events through the date of this filing.

New accounting policies

12 Months Ended

Dec. 31, 2010

New accounting policies [Abstract]

New accounting policies [Text Block]

4.	New accounting policies

In October 2010, new guidance was issued on accounting for costs associated with acquiring or renewing insurance contracts. The new guidance will likely change how insurance companies account for acquisition costs, particularly in determining what costs are deferrable. The new requirements are effective for fiscal years beginning after December 15, 2011, either prospectively or by retrospective adjustment. We are currently evaluating the provisions of this guidance and the impact on our financial statements and disclosures.

In January 2010, new accounting guidance was issued that expanded the required disclosures on fair value measurements. The guidance will require the disclosure of transfers in and out of Levels 1 and 2 of the fair value hierarchy and the reasons for those transfers and separate presentation of purchases, sales, issuances and settlements for Level 3 securities, on a gross basis rather than as one net number. The new guidance also clarifies the level of disaggregation required to be disclosed for each class of assets and liabilities and provides clarification on the appropriate disclosures of inputs and valuation techniques used to measure fair value for both recurring and non recurring measurements in Levels 2 and 3. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements for the Level 3 securities. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We have evaluated the provisions of this guidance and there is no significant impact on our financial statement disclosures.

Related party transactions

12 Months Ended

Dec. 31, 2010

Related party transactions [Text Block]

5.	Related party transactions

C-BASS provided certain services to us during 2009 and 2008 in exchange for fees. The impact of these transactions was not material to us.

- Definition

This element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References+ Details

Investments

12 Months Ended

Dec. 31, 2010

Investments [Abstract]

Investments [Text Block]

6.	Investments

The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio at December 31, 2010 and 2009 are shown below.

December 31, 2010:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses (1)			Fair Value
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	1,092,890	$	16,718	$	(6,822	)	$	1,102,786
Obligations of U.S. states and political subdivisions		3,549,355		85,085		(54,374	)		3,580,066
Corporate debt securities		2,521,275		54,975		(11,291	)		2,564,959
Residential mortgage-backed securities		53,845		3,255		-			57,100
Debt securities issued by foreign sovereign governments		149,443		1,915		(1,031	)		150,327
Total debt securities		7,366,808		161,948		(73,518	)		7,455,238
Equity securities		3,049		40		(45	)		3,044

Total investment portfolio	$	7,369,857	$	161,988	$	(73,563	)	$	7,458,282

(1) There were no other-than-temporary impairment losses recorded in other comprehensive income at December 31, 2010.

December 31, 2009:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses (1)			Fair Value
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	736,668	$	4,877	$	(6,357	)	$	735,188
Obligations of U.S. states and political subdivisions		4,607,936		187,540		(59,875	)		4,735,601
Corporate debt securities		1,532,571		40,328		(9,158	)		1,563,741
Residential mortgage-backed securities		102,062		3,976		(1,986	)		104,052
Debt securities issued by foreign sovereign governments		112,603		1,447		(1,058	)		112,992
Total debt securities		7,091,840		238,168		(78,434	)		7,251,574
Equity securities		2,892		3		(4	)		2,891

Total investment portfolio	$	7,094,732	$	238,171	$	(78,438	)	$	7,254,465

(1) Gross unrealized losses for residential mortgage-backed securities included $1.8 million in other-than-temporary impairment losses recorded in other comprehensive income at December 31, 2009.

The amortized cost and fair values of debt securities at December 31, 2010, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most auction rate and mortgage-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories.

December 31, 2010	Amortized Cost		Fair Value
	(In thousands)

Due in one year or less	$	1,228,536	$	1,233,290
Due after one year through five years		2,907,310		2,965,004
Due after five years through ten years		1,391,744		1,422,631
Due after ten years		1,413,000		1,418,736
		6,940,590		7,039,661

Residential mortgage-backed securities		53,845		57,100
Auction rate securities (1)		372,373		358,477

Total at December 31, 2010	$	7,366,808	$	7,455,238

(1) At December 31, 2010, 97% of auction rate securities had a contractual maturity greater than 10 years.

At December 31, 2010 and 2009, the investment portfolio had gross unrealized losses of $73.6 million and $78.4 million, respectively. For those securities in an unrealized loss position, the length of time the securities were in such a position, as measured by their month-end fair values, is as follows:

	Less Than 12 Months				12 Months or Greater				Total
December 31, 2010	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	258,235	$	6,822	$	-	$	-	$	258,235	$	6,822
Obligations of U.S. states and political subdivisions		1,160,877		32,415		359,629		21,959		1,520,506		54,374
Corporate debt securities		817,471		9,921		28,630		1,370		846,101		11,291
Residential mortgage- backed securities		-		-		-		-		-		-
Debt issued by foreign sovereign governments		105,724		1,031		-		-		105,724		1,031
Equity securities		2,723		45		-		-		2,723		45
Total investment portfolio	$	2,345,030	$	50,234	$	388,259	$	23,329	$	2,733,289	$	73,563

	Less Than 12 Months				12 Months or Greater				Total
December 31, 2009	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	434,362	$	6,357	$	-	$	-	$	434,362	$	6,357
Obligations of U.S. states and political subdivisions		926,860		29,390		398,859		30,485		1,325,719		59,875
Corporate debt securities		453,804		9,158		-		-		453,804		9,158
Residential mortgage- backed securities		8,743		1,764		870		222		9,613		1,986
Debt issued by foreign sovereign governments		56,122		1,058		-		-		56,122		1,058
Equity securities		2,398		4		-		-		2,398		4
Total investment portfolio	$	1,882,289	$	47,731	$	399,729	$	30,707	$	2,282,018	$	78,438

There were 487 securities in an unrealized loss position at December 31, 2010. The unrealized losses in all categories of our investments were primarily caused by the difference in interest rates at December 31, 2010 and 2009, compared to the interest rates at the time of purchase, as well as the discount rate applied in our auction rate securities discounted cash flow model. The municipal market experienced a significant increase in unrealized losses during the fourth quarter of 2010 due to widening of credit spreads. One security was in an unrealized loss position greater than 12 months at December, 2010, with a fair value less than 80% of amortized cost.

Under the current guidance a debt security impairment is deemed other than temporary if we either intend to sell the security, or it is more likely than not that we will be required to sell the security before recovery or we do not expect to collect cash flows sufficient to recover the amortized cost basis of the security. During 2010 we recognized OTTI losses in earnings of $9.6 million. During 2009 we recognized OTTI losses in earnings of $40.9 million and an additional $1.8 million of OTTI losses in other comprehensive income. During 2008 we recognized OTTI losses in earnings of approximately $65.4 million. In 2010, our OTTI losses were primarily related to a few securities for which the expected cash flows are not sufficient to recover the amortized cost. In 2009 and 2008, our OTTI losses were primarily related to securities for which we had the intent to sell.

The following table provides a rollforward of the amount related to credit losses recognized in earnings for which a portion of an OTTI loss was recognized in accumulated other comprehensive income (loss) for the years ended December 31, 2010 and 2009.

	2010			2009
	(In thousands)

Beginning balance	$	1,021		$	-
Addition for the amount related to the credit loss for which an OTTI was not previously recognized		-			1,021
Additional increases to the amount related to the credit loss for which an OTTI was previously recognized		-			-
Reductions for securities sold during the period (realized)		(1,021	)		-
Ending balance	$	-		$	1,021

We held approximately $358 million and $490 million in auction rate securities (“ARS”) backed by student loans at December 31, 2010 and 2009, respectively. ARS are intended to behave like short-term debt instruments because their interest rates are reset periodically through an auction process, most commonly at intervals of 7, 28 and 35 days. The same auction process has historically provided a means by which we may rollover the investment or sell these securities at par in order to provide us with liquidity as needed. The ARS we hold are collateralized by portfolios of student loans, substantially all of which are ultimately 97% guaranteed by the United States Department of Education. At December 31, 2010, our ARS portfolio was 90% AAA/Aaa-rated by one or more of the following major rating agencies: Moody's, Standard & Poor's and Fitch Ratings.

In mid-February 2008, auctions began to fail due to insufficient buyers, as the amount of securities submitted for sale in auctions exceeded the aggregate amount of the bids. For each failed auction, the interest rate on the security moves to a maximum rate specified for each security, and generally resets at a level higher than specified short-term interest rate benchmarks. At December 31, 2010, our entire ARS portfolio, consisting of 34 investments, was subject to failed auctions; however, from the period when the auctions began to fail through December 31, 2010, $165.5 million in par value of ARS was either sold or called, with the average amount we received being approximately 98% of par which approximated the aggregate fair value prior to redemption. To date, we have collected all interest due on our ARS.

As a result of the persistent failed auctions, and the uncertainty of when these investments could be liquidated at par, the investment principal associated with failed auctions will not be accessible until successful auctions occur, a buyer is found outside of the auction process, the issuers establish a different form of financing to replace these securities, or final payments come due according to the contractual maturities of the debt issues. However, we continue to believe we will have liquidity to our ARS portfolio by December 31, 2014.

Net investment income is comprised of the following:

	2010			2009			2008
	(In thousands)

Fixed maturities	$	236,734		$	291,304		$	287,869
Equity securities		315			819			2,162
Cash equivalents		1,526			3,056			15,487
Interest on Sherman note		10,796			11,323			4,601
Other		1,081			1,389			1,951

Investment income		250,452			307,891			312,070
Investment expenses		(3,199	)		(3,213	)		(3,553	)

Net investment income	$	247,253		$	304,678		$	308,517

The net realized investment gains (losses), including impairment losses, and change in net unrealized appreciation (depreciation) of investments are as follows:

	2010			2009			2008
	(In thousands)
Net realized investment gains (losses) on investments:
Fixed maturities	$	93,017		$	51,109		$	(76,397	)
Equity securities		151			116			107
Joint ventures		(466	)		-			61,877
Other		235			709			1,927

	$	92,937		$	51,934		$	(12,486	)


Change in net unrealized appreciation (depreciation):
Fixed maturities	$	(71,304	)	$	237,521		$	(179,816	)
Equity securities		(4	)		144			(98	)
Other		-			(2,263	)		(710	)

	$	(71,308	)	$	235,402		$	(180,624	)

The reclassification adjustment relating to the change in investment gains and losses is as follows:

	2010			2009		2008
	(In thousands)

Unrealized holding gains (losses) arising during the period, net of tax	$	(156,463	)	$	132,083	$	(75,464	)
Less: reclassification adjustment for net gains (losses) included in net income, net of tax		87,389			20,511		(41,475	)
Change in unrealized investment gains (losses), net of tax	$	(69,074	)	$	152,594	$	(116,939	)

The tax expense (benefit) related to the changes in net unrealized (depreciation) appreciation was $1.0 million (adjusted for the valuation allowance, see Note 14 – “Income taxes”), $82.8 million and ($63.7) million for 2010, 2009 and 2008, respectively.

The gross realized gains, gross realized losses and impairment losses are as follows:

	2010			2009			2008
	(In thousands)


Gross realized gains	$	119,325		$	112,148		$	22,537
Gross realized losses		(16,278	)		(19,274	)		(31,525	)
Impairment losses		(9,644	)		(40,940	)		(65,375	)

Net realized gains (losses) on securities	$	93,403		$	51,934		$	(74,363	)

(Loss) gain from joint ventures		(466	)		-			61,877
Total net realized gains (losses)	$	92,937		$	51,934		$	(12,486	)

We had $21.8 million of investments on deposit with various states at December 31, 2010 and 2009 due to regulatory requirements of those state insurance departments.

- Definition

This item represents the entire disclosure related to Available-for-sale Securities which consist of all investments in certain debt and equity securities neither classified as trading or held-to-maturity securities. A debt security represents a creditor relationship with an enterprise. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities which are categorized as Available-for-sale.

+ References+ Details

Fair value measurements

12 Months Ended

Dec. 31, 2010

Fair value measurements [Abstract]

Fair value measurements [Text Block]

7.	Fair value measurements

Fair value measurements for items measured at fair value included the following as of December 31, 2010 and 2009:

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
December 31, 2010
Assets
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	1,102,786	$	1,102,786	$	-	$	-
Obligations of U.S. states and political subdivisions		3,580,066		-		3,284,376		295,690
Corporate debt securities		2,564,959		2,563		2,492,343		70,053
Residential mortgage-backed securities		57,100		-		57,100		-
Debt securities issued by foreign sovereign governments		150,327		135,457		14,870		-
Total debt securities		7,455,238		1,240,806		5,848,689		365,743
Equity securities		3,044		2,723		-		321
Total investments	$	7,458,282	$	1,243,529	$	5,848,689	$	366,064
Real estate acquired (1)		6,220		-		-		6,220


December 31, 2009
Assets
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	735,188	$	735,188	$	-	$	-
Obligations of U.S. states and political subdivisions		4,735,601		-		4,365,260		370,341
Corporate debt securities		1,563,741		2,559		1,431,844		129,338
Residential mortgage-backed securities		104,052		23,613		80,439		-
Debt securities issued by foreign sovereign governments		112,992		101,983		11,009		-
Total debt securities		7,251,574		863,343		5,888,552		499,679
Equity securities		2,891		2,570		-		321
Total investments	$	7,254,465	$	865,913	$	5,888,552	$	500,000
Real estate acquired (1)		3,830		-		-		3,830

(1)	Real estate acquired through claim settlement, which is held for sale, is reported in Other Assets on the consolidated balance sheet.

There were no transfers of securities between Level 1 and Level 2 during 2010.

For assets and liabilities measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the years ended December 31, 2010 and 2009 is as follows:

	Obligations of U.S. States and Political Subdivisions			Corporate Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at December 31, 2009	$	370,341		$	129,338		$	321	$	500,000		$	3,830
Total realized/unrealized losses:
Included in earnings and reported as realized investment losses, net		-			(2,880	)		-		(2,880	)		-
Included in earnings and reported as net impairment losses recognized in earnings		-			(2,677	)		-		(2,677	)		-
Included in earnings and reported as losses incurred, net		-			-			-		-			(1,926	)
Included in other comprehensive income		4,913			5,342			-		10,255			-
Purchases, issuances, sales and settlements		(79,564	)		(59,070	)		-		(138,634	)		4,316
Transfers in and/or out of Level 3		-			-			-		-			-
Balance at December 31, 2010	$	295,690		$	70,053		$	321	$	366,064		$	6,220

Amount of total losses included in earnings for the year ended December 31, 2010 attributable to the change in unrealized losses on assets still held at December 31, 2010	$	-		$	-		$	-	$	-		$	-

	Obligations of U.S. States and Political Subdivisions			Corporate Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousand of dollars)
Balance at December 31, 2008	$	395,388		$	150,241		$	321	$	545,950		$	32,858
Total realized/unrealized losses:
Included in earnings and reported as realized investment losses, net		-			(10,107	)		-		(10,107	)		-
Included in earnings and reported as losses incurred, net		-			-			-		-			(2,534	)
Included in other comprehensive income		(17,439	)		(5,961	)		-		(23,400	)		-
Purchases, issuances, sales and settlements		(7,608	)		(4,835	)		-		(12,443	)		(26,494	)
Transfers in and/or out of Level 3		-			-			-		-			-
Balance at December 31, 2009	$	370,341		$	129,338		$	321	$	500,000		$	3,830

Amount of total losses included in earnings for the year ended December 31, 2009 attributable to the change in unrealized losses on assets still held at December 31, 2009	$	-		$	-		$	-	$	-		$	-

Additional fair value disclosures related to our investment portfolio are included in Note 6 – “Investments”. Fair value disclosures related to our debt are included in Note 8 – “Debt”.

- Definition

This element represents the disclosure related to the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods.

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Debt

12 Months Ended

Dec. 31, 2010

Debt [Abstract]

Debt [Text Block]

Debt

Senior Notes

At December 31, 2010 we had outstanding $77.4 million, 5.625% Senior Notes due in September 2011 and $300 million, 5.375% Senior Notes due in November 2015. At December 31, 2009 we had outstanding $78.4 million, 5.625% Senior Notes due in September 2011 and $300 million, 5.375% Senior Notes due in November 2015. Covenants in the Senior Notes include the requirement that there be no liens on the stock of the designated subsidiaries unless the Senior Notes are equally and ratably secured; that there be no disposition of the stock of designated subsidiaries unless all of the stock is disposed of for consideration equal to the fair market value of the stock; and that we and the designated subsidiaries preserve our corporate existence, rights and franchises unless we or such subsidiary determines that such preservation is no longer necessary in the conduct of its business and that the loss thereof is not disadvantageous to the Senior Notes. A designated subsidiary is any of our consolidated subsidiaries which has shareholders' equity of at least 15% of our consolidated shareholders' equity. We were in compliance with all covenants at December 31, 2010.

If we fail to meet any of the covenants of the Senior Notes discussed above; there is a failure to pay when due at maturity, or a default results in the acceleration of maturity of, any of our other debt in an aggregate amount of $40 million or more; or we fail to make a payment of principal of the Senior Notes when due or a payment of interest on the Senior Notes within thirty days after due and we are not successful in obtaining an agreement from holders of a majority of the applicable series of Senior Notes to change (or waive) the applicable requirement or payment default, then the holders of 25% or more of either series of our Senior Notes each would have the right to accelerate the maturity of that series. In addition, the trustee, U.S. Bank National Association, of these two issues of Senior Notes could, independent of any action by holders of Senior Notes, accelerate the maturity of the Senior Notes.

At December 31, 2010 and 2009, the fair value of the amount outstanding under our Senior Notes was $355.6 million and $293.2 million, respectively. The fair value was determined using publicly available trade information.

Interest payments on the Senior Notes were $20.5 million, $24.4 million and $27.4 million for the years ended December 31, 2010, 2009, and 2008, respectively.

Convertible Senior Notes

In April 2010 we completed the sale of $345 million principal amount of 5% Convertible Senior Notes due in 2017. We received net proceeds of approximately $334.4 million after deducting underwriting discount and offering expenses. Interest on the Convertible Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2010. We do not have the right to defer interest payments on the Convertible Senior Notes. The Convertible Senior Notes will mature on May 1, 2017, unless earlier converted by the holders or repurchased by us. Covenants in the Convertible Senior Notes include a requirement to notify holders in advance of certain events and that we and the designated subsidiaries (defined above) preserve our corporate existence, rights and franchises unless we or such subsidiary determines that such preservation is no longer necessary in the conduct of its business and that the loss thereof is not disadvantageous to the Convertible Senior Notes.

If we fail to meet any of the covenants of the Convertible Senior Notes; there is a failure to pay when due at maturity, or a default results in the acceleration of maturity of, any of our other debt in an aggregate amount of $40 million or more; a final judgment for the payment of $40 million or more (excluding any amounts covered by insurance) is rendered against us or any of our subsidiaries which judgment is not discharged or stayed within certain time limits; or we fail to make a payment of principal of the Convertible Senior Notes when due or a payment of interest on the Convertible Senior Notes within thirty days after due and we are not successful in obtaining an agreement from holders of a majority of the Convertible Senior Notes to change (or waive) the applicable requirement or payment default, then the holders of 25% or more of the Convertible Senior Notes would have the right to accelerate the maturity of those notes. In addition, the trustee of the Convertible Senior Notes could, independent of any action by holders, accelerate the maturity of the Convertible Senior Notes.

The Convertible Senior Notes are convertible, at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.4186 shares per $1,000 principal amount at any time prior to the maturity date. This represents an initial conversion price of approximately $13.44 per share. The initial conversion price represents a 25% conversion premium based on the $10.75 per share price to the public in our concurrent common stock offering as discussed in Note 15 – “Shareholders' equity.” These Convertible Senior Notes will be equal in right of payment to our existing Senior Notes, discussed above, and will be senior in right of payment to our existing Convertible Junior Debentures, discussed below. Debt issuance costs will be amortized to interest expense over the contractual life of the Convertible Senior Notes. The provisions of the Convertible Senior Notes are complex. The description above is not intended to be complete in all respects. Moreover, that description is qualified in its entirety by the terms of the notes, which are contained in the Supplemental Indenture, dated as of April 26, 2010, between us and U.S. Bank National Association, as trustee, and the Indenture dated as of October 15, 2000, between us and the trustee.

At December 31, 2010, the fair value of the amount outstanding under our Convertible Senior Notes was $400.5 million. The fair value was determined using publicly available trade information.

Interest payments on the Convertible Senior Notes were $8.9 million for the year ended December 31, 2010.

Convertible Junior Subordinated Debentures

At December 31, 2010 and 2009 we had outstanding $389.5 million principal amount of 9% Convertible Junior Subordinated Debentures due in 2063 (the “debentures”). The debentures have an effective interest rate of 19% that reflects our non-convertible debt borrowing rate at the time of issuance. At December 31, 2010 and 2009 the amortized value of the principal amount of the debentures is reflected as a liability on our consolidated balance sheet of $315.6 million and $291.8 million, respectively, with the unamortized discount reflected in equity. At December 31, 2009 we also had $35.8 million of deferred interest outstanding on the debentures which is included in other liabilities on the consolidated balance sheet. The debentures rank junior to all of our existing and future senior indebtedness.

Interest on the debentures is payable semi-annually in arrears on April 1 and October 1 of each year. As long as no event of default with respect to the debentures has occurred and is continuing, we may defer interest, under an optional deferral provision, for one or more consecutive interest periods up to ten years without giving rise to an event of default. Deferred interest will accrue additional interest at the rate then applicable to the debentures. During an optional deferral period we may not pay or declare dividends on our common stock. Violations of the covenants under the Indenture governing the debentures, including covenants to provide certain documents to the trustee, are not events of default under the Indenture and would not allow the acceleration of amounts that we owe under the debentures. Similarly, events of default under, or acceleration of, any of our other obligations, including those described above, would not allow the acceleration of amounts that we owe under the debentures. However, violations of the events of default under the Indenture, including a failure to pay principal when due under the debentures and certain events of bankruptcy, insolvency or receivership involving our holding company would allow acceleration of amounts that we owe under the debentures.

Interest on the debentures that would have been payable on the scheduled interest payment dates of April 1, 2009, October 1, 2009 and April 1, 2010 had been deferred for up to 10 years past the scheduled payment date. During this deferral period the deferred interest continued to accrue and compound semi-annually at an annual rate of 9%.

On October 1, 2010 we paid each of those deferred interest payments, including the compound interest on each. The interest payments, totaling approximately $57.5 million, were made from the net proceeds of our April 2010 common stock offering. We also paid the regular October 1, 2010 interest payment due on the debentures of approximately $17.5 million. We continue to have the right to defer interest that is payable on subsequent scheduled interest payment dates if we give the required 15 day notice. Any deferral of such interest would be on terms equivalent to those described above.

When interest on the debentures is deferred, we are required, not later than a specified time, to use reasonable commercial efforts to begin selling qualifying securities to persons who are not our affiliates. The specified time is one business day after we pay interest on the debentures that was not deferred, or if earlier, the fifth anniversary of the scheduled interest payment date on which the deferral started. Qualifying securities are common stock, certain warrants and certain non-cumulative perpetual preferred stock. The requirement to use such efforts to sell such securities is called the Alternative Payment Mechanism. Although there was no requirement to begin the Alternative Payment Mechanism, with respect to the deferral of interest described above, the common shares issued in April 2010, discussed in Note 15 – “Shareholders' equity”, were qualifying securities. We had 180 days from the date of issuance of those shares to elect to use the proceeds to pay deferred interest and we elected to do so as described above.

The net proceeds of Alternative Payment Mechanism sales are to be applied to the payment of deferred interest, including the compound portion. We cannot pay deferred interest other than from the net proceeds of Alternative Payment Mechanism sales, except at the final maturity of the debentures or at the tenth anniversary of the start of the interest deferral. The Alternative Payment Mechanism does not require us to sell common stock or warrants before the fifth anniversary of the interest payment date on which that deferral started if the net proceeds (counting any net proceeds of those securities previously sold under the Alternative Payment Mechanism) would exceed the 2% cap. The 2% cap is 2% of the average closing price of our common stock times the number of our outstanding shares of common stock. The average price is determined over a specified period ending before the issuance of the common stock or warrants being sold, and the number of outstanding shares is determined as of the date of our most recent publicly released financial statements.

We are not required to issue under the Alternative Payment Mechanism a total of more than 10 million shares of common stock, including shares underlying qualifying warrants. In addition, we may not issue under the Alternative Payment Mechanism qualifying preferred stock if the total net proceeds of all issuances would exceed 25% of the aggregate principal amount of the debentures.

The Alternative Payment Mechanism does not apply during any period between scheduled interest payment dates if there is a “market disruption event” that occurs over a specified portion of such period. Market disruption events include any material adverse change in domestic or international economic or financial conditions.

The provisions of the Alternative Payment Mechanism are complex. The description above is not intended to be complete in all respects. Moreover, that description is qualified in its entirety by the terms of the debentures, which are contained in the Indenture, dated as of March 28, 2008, between us and U.S. Bank National Association, as trustee.

We may redeem the debentures prior to April 6, 2013, in whole but not in part, only in the event of a specified tax or rating agency event, as defined in the Indenture. In any such event, the redemption price will be equal to the greater of (1) 100% of the principal amount of the debentures being redeemed and (2) the applicable make-whole amount, as defined in the Indenture, in each case plus any accrued but unpaid interest. On or after April 6, 2013, we may redeem the debentures in whole or in part from time to time, at our option, at a redemption price equal to 100% of the principal amount of the debentures being redeemed, plus any accrued and unpaid interest, if the closing sale price of our common stock exceeds 130% of the then prevailing conversion price of the debentures for at least 20 of the 30 trading days preceding notice of the redemption. We will not be able to redeem the debentures, other than in the event of a specified tax event or rating agency event, during an optional deferral period.

The debentures are currently convertible, at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.0741 common shares per $1,000 principal amount of debentures at any time prior to the maturity date. This represents an initial conversion price of approximately $13.50 per share. If a holder elects to convert their debentures, deferred interest owed on the debentures being converted is also converted into shares of our common stock. The conversion rate for any deferred interest is based on the average price that our shares traded at during a 5-day period immediately prior to the election to convert. In 2009, we issued 44,316 shares of our common stock on conversion of $478,000 principal amount of our convertible debentures and related deferred interest. In lieu of issuing shares of common stock upon conversion of the debentures occurring after April 6, 2013, we may, at our option, make a cash payment to converting holders equal to the value of all or some of the shares of our common stock otherwise issuable upon conversion.

The fair value of the debentures was approximately $432.4 million and $254.3 million, respectively, at December 31, 2010 and 2009, as determined using available pricing for these debentures or similar instruments.

Interest payments on the debentures were $75.0 million and $17.8 million for the years ended December 31, 2010 and 2008 respectively. There were no interest payments made on the debentures in 2009.

Other debt

In June 2009, we repaid the $200 million that was then outstanding under our bank revolving credit facility and terminated the facility. Interest payments related to that facility were $6.4 million and $13.1 million for the years ended December 31, 2009 and 2008, respectively.

Loss reserves

12 Months Ended

Dec. 31, 2010

Loss reserves [Abstract]

Loss reserves [Text Block]

Loss reserves

As described in Note 3 – “Summary of significant accounting policies”, we establish reserves to recognize the estimated liability for losses and loss adjustment expenses related to defaults on insured mortgage loans. Loss reserves are established by estimating the number of loans in our inventory of delinquent loans that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity.

Estimation of losses that we will pay in the future is inherently judgmental. The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy, including unemployment, and the current and future strength of local housing markets. Current conditions in the housing and mortgage industries make these assumptions more volatile than they would otherwise be. The actual amount of the claim payments may be substantially different than our loss reserve estimates. Our estimates could be adversely affected by several factors, including a further deterioration of regional or national economic conditions, including unemployment, leading to a reduction in borrowers' income and thus their ability to make mortgage payments, and a further drop in housing values, which expose us to greater losses on resale of properties obtained through the claim settlement process and may affect borrower willingness to continue to make mortgage payments when the value of the home is below the mortgage balance. Changes to our estimates could result in a material impact to our results of operations, even in a stable economic environment.

The following table provides a reconciliation of beginning and ending loss reserves for each of the past three years:

	2010			2009			2008
	(In thousands)

Reserve at beginning of year	$	6,704,990		$	4,775,552		$	2,642,479
Less reinsurance recoverable		332,227			232,988			35,244
Net reserve at beginning of year (1)		6,372,763			4,542,564			2,607,235
Adjustment to reserves (2)		(92,000	)		-			-
Adjusted beginning reserves		6,280,763			4,542,564			2,607,235

Losses incurred:
Losses and LAE incurred in respect of default notices received in:
Current year		1,874,449			2,912,679			2,684,397
Prior years (3)		(266,908	)		466,765			387,104
Subtotal (4)		1,607,541			3,379,444			3,071,501

Losses paid:
Losses and LAE paid in respect of default notices received in:
Current year		60,897			62,491			68,397
Prior years		2,256,206			1,605,668			1,332,579
Reinsurance terminations (5)		(37,680	)		(118,914	)		(264,804	)
Subtotal (6)		2,279,423			1,549,245			1,136,172
Net reserve at end of year (7)		5,608,881			6,372,763			4,542,564
Plus reinsurance recoverables		275,290			332,227			232,988

Reserve at end of year	$	5,884,171		$	6,704,990		$	4,775,552

(1)

At December 31, 2009, 2008 and 2007 the estimated reduction in loss reserves related to rescissions approximated $2.1 billion, $0.5 billion and $0.2 billion, respectively.

(2)

In periods prior to 2010 an estimate of premium to be refunded in conjunction with claim payments was included in Loss Reserves. In 2010, we separately stated portions of this liability in Other liabilities and Premium deficiency reserve on the consolidated balance sheet.

(3)

A negative number for prior year losses incurred indicates a redundancy of prior year loss reserves, and a positive number for prior year losses incurred indicates a deficiency of prior year loss reserves.

(4)

Rescissions mitigated our incurred losses by an estimated $0.2 billion, $2.5 billion and $0.4 billion in 2010, 2009 and 2008, respectively.

(5)

In a termination, the reinsurance agreement is cancelled, with no future premium ceded and funds for any incurred but unpaid losses transferred to us. The transferred funds result in an increase in our investment portfolio (including cash and cash equivalents) and a decrease in net losses paid (reduction to losses incurred). In addition, there is an offsetting decrease in the reinsurance recoverable (increase in losses incurred), and thus there is no net impact to losses incurred. (See Note 11 – “Reinsurance”)

(6)

Rescission mitigated our paid losses by an estimated $1.0 billion, $0.9 billion and $0.1 billion in 2010, 2009 and 2008, respectively, which excludes amounts that may have been applied to a deductible.

(7)

At December 31, 2010, 2009 and 2008 the estimated reduction in loss reserves related to rescissions approximated $1.3 billion, $2.1 billion and $0.5 billion, respectively.

The “Losses incurred” section of the table above shows losses incurred on default notices received in the current year and in prior years, respectively. The amount of losses incurred relating to default notices received in the current year represents the estimated amount to be ultimately paid on such default notices. The amount of losses incurred relating to default notices received in prior years represents the actual claim rate and severity associated with those defaults notices resolved in the current year differing from the estimated liability at the prior year-end, as well as a re-estimation of amounts to be ultimately paid on defaults remaining in inventory from the end of the prior year. This re-estimation of the estimated claim rate and estimated severity is the result of our review of current trends in default inventory, such as percentages of defaults that have resulted in a claim, the amount of the claims, changes in the relative level of defaults by geography and changes in average loan exposure.

Current year losses incurred decreased in 2010 compared to 2009 primarily due to a decrease in the number of new notices received, from 259,876 in 2009 to 205,069 in 2010, as well as an increase in the percentage of new notices that cured from delinquency, which decreases the claim rate on new notices. These factors were somewhat offset by a smaller benefit from captive arrangements. Current year losses incurred increased in 2009 compared to 2008 primarily due to an increase in claim rates and a smaller benefit from captive arrangements, offset by a decrease in severity. The increase in claim rates experienced during 2009 was likely due to general economic conditions, including the unemployment rate, as well as further decreases in home values which may affect borrower willingness to continue to make mortgage payments when the value of the home is below the mortgage balance. The increase in 2009 claim rates was significantly mitigated by an increase in expected rescission levels. The smaller benefit from captive arrangements is due to captive terminations in late 2008 and 2009. The decrease in severity, compared to an increase in 2008, was primarily due to an increase in expected rescission levels. The average exposure on policies rescinded in 2009 was higher than the average exposure on claims paid.

The development of the reserves in 2010, 2009 and 2008 is reflected in the “Prior years” line in the table above. The $266.9 million decrease in losses incurred in 2010 related to prior years was primarily related to a decrease in the expected claim rate on the defaults that occurred in prior periods which accounted for a decrease of approximately $432 million. The decrease in the claim rate is based on the resolution of approximately 55% of the prior year default inventory, as well as a re-estimation of amounts to be ultimately paid on defaults remaining in inventory from the end of the prior year. The decrease in the claim rate was due to greater cures experienced during 2010, a portion of which resulted from loan modifications. The decrease in the expected claim rate on prior defaults was partially offset by an increase in severity on pool defaults that occurred in prior periods which approximated $185 million. The increase in pool severity was based on the resolution of defaults that occurred in prior periods with higher claim amounts, which in part, were applied to remaining deductibles on certain pool policies. The remaining decrease in losses incurred related to prior years of approximately $20 million related to LAE reserves and reinsurance. Of the 250,440 primary defaults in our December 31, 2009 inventory, 109,920 primary defaults, approximately 44%, remained in our default inventory one year later at December 31, 2010. These defaults have a higher estimated claim rate when compared to a year ago because our experience is that as a default ages it become more likely to result in a claim payment (see further discussion below). Historically, approximately 75% of our default inventory was resolved in one year.

The $466.8 million increase in losses incurred in 2009 related to prior years was primarily related to an increase in the claim rate on defaults that occurred in prior periods which accounted for approximately $337 million of the increase. The increase in the claim rate is based on the resolution of approximately 50% of the prior year default inventory, as well as a re-estimation of amounts to be ultimately paid on defaults remaining in inventory from the end of the prior year. The increase in the claim rate was likely due to general economic conditions, including the unemployment rate, as well as further decreases in home values which may affect borrower willingness to continue to make mortgage payments. The increase in losses incurred in 2009 related to prior years was also due to an increase in severity on defaults that occurred in prior periods which accounted for approximately $137 million of the increase. The increase in severity was related to the weakening of the housing and mortgage markets which resulted in adverse claim sizes. The offsetting decrease in losses incurred related to prior years of approximately $7 million related to LAE reserves and reinsurance. The $387.1 million increase in losses incurred in 2008 related to prior years was primarily related to the significant increase in severity during the year, as compared to our estimates when originally establishing the reserves at December 31, 2007.

The “Losses paid” section of the table above shows the breakdown between claims paid on default notices received in the current year and default notices received in prior years. It has historically taken, on average, approximately twelve months for a default which is not cured to develop into a paid claim, therefore, most losses paid relate to default notices received in prior years. Due to a combination of reasons that have slowed the rate at which claims are received and paid, including foreclosure moratoriums and suspensions, servicing delays, court delays, loan modifications, our fraud investigations and our claim rescissions and denials for misrepresentation, it is difficult to estimate how long it may take for current and future defaults that do not cure to develop into paid claims. The “Losses paid” section of the table also includes a decrease in losses paid related to terminated reinsurance agreements as noted in footnote (2) of the table above.

The liability associated with our estimate of premiums to be refunded on expected claim payments is accrued for separately at December 31, 2010 and approximated $113 million. Separate components of this liability are included in “Other liabilities” and “Premium deficiency reserve” on our consolidated balance sheet. (See Note 3 – “Summary of significant accounting policies – Revenue recognition”)

The decrease in the primary default inventory experienced during 2010 was generally across all markets and all book years. However the number of consecutive months a loan remains in the primary default inventory (the age of the item in default) has continued to increase, as shown in the table below. Historically as a default ages it becomes more likely to result in a claim. The impact of the decrease in the primary default inventory and estimated severity on losses incurred was partially offset by the impact of the increased age of the primary default inventory.

Aging of the Primary Default Inventory

	December 31,				December 31,				December 31,
	2010				2009				2008

Consecutive months in the default inventory
3 months or less		37,640	18	%		48,252	19	%		60,113	33	%
4 - 11 months		58,701	27	%		98,210	39	%		75,476	41	%
12 months or more		118,383	55	%		103,978	42	%		46,599	26	%

Total primary default inventory		214,724	100	%		250,440	100	%		182,188	100	%

Loans in default in our claims received inventory		20,898	10	%		16,389	7	%		13,275	7	%

The length of time a loan is in the default inventory can differ from the number of payments that the borrower has not made or is considered delinquent. These differences typically result from a borrower making monthly payments that do not result in the loan becoming fully current. The number of payments that a borrower is delinquent is shown in the table below.

Number of Payments Delinquent

	December 31,				December 31,				December 31,
	2010				2009				2008


3 payments or less		51,003	24	%		60,970	24	%		68,010	37	%
4 - 11 payments		65,797	31	%		105,208	42	%		76,194	42	%
12 payments or more		97,924	45	%		84,262	34	%		37,984	21	%

Total primary default inventory		214,724	100	%		250,440	100	%		182,188	100	%

Before paying a claim, we can review the loan file to determine whether we are required, under the applicable insurance policy, to pay the claim or whether we are entitled to reduce the amount of the claim. For example, all of our insurance policies provide that we can reduce or deny a claim if the servicer did not comply with its obligation to mitigate our loss by performing reasonable loss mitigation efforts or diligently pursuing a foreclosure or bankruptcy relief in a timely manner. We also do not cover losses resulting from property damage that has not been repaired. We are currently reviewing the loan files for the majority of the claims submitted to us.

In addition, subject to rescission caps in certain of our Wall Street bulk transactions, all of our insurance policies allow us to rescind coverage under certain circumstances. Because we can review the loan origination documents and information as part of our normal processing when a claim is submitted to us, rescissions occur on a loan by loan basis most often after we have received a claim. Historically, claim rescissions and denials, which we collectively refer to as rescissions, were not a material portion of our claims resolved during a year. However, beginning in 2008 our rescissions of policies have materially mitigated our paid and incurred losses. While we have a substantial pipeline of claims investigations that we expect will eventually result in future rescissions, we expect that rescissions will not continue to mitigate paid and incurred losses at the same level we have recently experienced. In addition, if an insured disputes our right to rescind coverage, the outcome of the dispute ultimately would be determined by legal proceedings. In each of 2009 and 2010, rescissions mitigated our paid losses by approximately $1.2 billion. These figures include amounts that would have resulted in either a claim payment or been charged to a deductible or aggregate loss limit under a bulk or pool policy, and may have been charged to a captive reinsurer, as shown in the table below. The amounts that would have been applied to a deductible do not take into account previous rescissions that may have been applied to a deductible.

Our loss reserving methodology incorporates the effect that rescission activity is expected to have on the losses we will pay on our delinquent inventory. We do not utilize an explicit rescission rate in our reserving methodology, but rather our reserving methodology incorporates the effects rescission activity has had on our historical claim rate and claim severities. A variance between ultimate actual rescission rates and these estimates could materially affect our losses incurred. Our estimation process does not include a direct correlation between claim rates and severities to projected rescission activity or other economic conditions such as changes in unemployment rates, interest rates or housing values. Our experience is that analysis of that nature would not produce reliable results, as the change in one condition cannot be isolated to determine its sole effect on our ultimate paid losses as our ultimate paid losses are also influenced at the same time by other economic conditions. The estimation of the impact of rescissions on incurred losses, as shown in the table below, must be considered together with the various other factors impacting incurred losses and not in isolation.

The table below represents our estimate of the impact rescissions have had on reducing our loss reserves, paid losses and losses incurred.

	2010			2009			2008
	(In billions)

Estimated rescission reduction - beginning reserve	$	2.1		$	0.5		$	0.2

Estimated rescission reduction - losses incurred		0.2			2.5			0.4

Rescission reduction - paid claims		1.2			1.2			0.2
Amounts that may have been applied to a deductible		(0.2	)		(0.3	)		(0.1	)
Net rescission reduction - paid claims		1.0			0.9			0.1

Estimated rescission reduction - ending reserve	$	1.3		$	2.1		$	0.5

The $2.5 billion estimated mitigation of incurred losses during 2009 represents both the claims not paid in the period due to rescissions, as well as an increasing default inventory and an increasing expected rescission rate for those loans in default. Even though rescissions mitigated our paid losses by a similar amount in 2010 as compared to 2009, the estimated mitigation of incurred losses declined to $0.2 billion for 2010. This decrease was caused by a decline in our default inventory in 2010, compared to an increase in 2009, as well as a modest decline in the expected rescission rate for loans in our default inventory during 2010, compared to a significantly increasing expected rescission rate during 2009 and a decrease in exposure on expected rescissions.

At December 31, 2010, our loss reserves continued to be significantly impacted by expected rescission activity. We expect that the reduction of our loss reserves due to rescissions will continue to decline because our recent experience indicates new notices in our default inventory have a lower likelihood of being rescinded than those already in the inventory due to their product mix, geographic location and vintage.

The liability associated with our estimate of premiums to be refunded on expected future rescissions is accrued for separately. At December 31, 2010 and 2009 the estimate of this liability totaled $101 million and $88 million, respectively. Separate components of this liability are included in “Other liabilities” and “Premium deficiency reserve” on our consolidated balance sheet. Changes in the liability affect premiums written and earned and change in premium deficiency reserve, respectively.

In the second quarter of 2010, we entered into a settlement agreement with a lender-customer regarding our rescission practices. Loans covered by this settlement agreement represented fewer than 10% of our policies in force as well as our delinquent inventory. Under this agreement, we waived certain of our rescission rights on loans subject to the agreement and the customer agreed to contribute to the cost of claims that we pay on those loans. The rescission rights we waived are for matters related to loan origination, which historically have been the basis for substantially all of our rescissions. In addition, under the agreement we reversed certain rescissions and the customer waived claims regarding certain other past rescissions. We continue to discuss with other lenders their objections to material rescissions and/or the possibility of entering into a settlement agreement. In addition to the proceedings involving Countrywide, we are involved in legal proceedings with respect to rescissions that we do not consider to be collectively material in amount. Although it is reasonably possible that, when these discussions or legal proceedings are completed, there will be a conclusion or determination that we were not entitled to rescind, we are unable to make a reasonable estimate or range of estimates of the potential liability.

A rollforward of our primary default inventory for the years ended December 31, 2010, 2009 and 2008 appears in the table below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report and by transfers of servicing between loan servicers.

	2010			2009			2008


Default inventory at beginning of period		250,440			182,188			107,120
Plus: New Notices		205,069			259,876			263,603
Less: Cures		(183,017	)		(149,251	)		(161,069	)
Less: Paids (including those charged to a deductible or captive)		(43,826	)		(29,732	)		(25,318	)
Less: Rescissions and denials		(13,942	)		(12,641	)		(2,148	)
Default inventory at end of period		214,724			250,440			182,188

Pool insurance notice inventory decreased from 44,231 at December 31, 2009 to 43,329 at December 31, 2010. The pool insurance notice inventory was 33,884 at December 31, 2008.

Premium deficiency reserves

12 Months Ended

Dec. 31, 2010

Premium deficiency reserves [Abstract]

Premium deficiency reserves [Text Block]

10.	Premium deficiency reserves

Beginning in 2007, when we stopped writing Wall Street bulk business, we began to separately measure the performance of these transactions and established a premium deficiency reserve related to this business. During 2010 the premium deficiency reserve on Wall Street bulk transactions declined by $14 million from $193 million, as of December 31, 2009, to $179 million as of December 31, 2010. The $179 million premium deficiency reserve as of December 31, 2010 reflects the present value of expected future losses and expenses that exceeded the present value of expected future premium and already established loss reserves. The discount rate used in the calculation of the premium deficiency reserve at December 31, 2010 was 2.5%. During 2009 the premium deficiency reserve on Wall Street bulk transactions declined by $261 million from $454 million, as of December 31, 2008, to $193 million as of December 31, 2009. The discount rate used in the calculation of the premium deficiency reserve at December 31, 2009 was 3.6%.

The components of the premium deficiency reserve at December 31, 2010, 2009 and 2008 appear in the table below.

	December 31,			December 31,			December 31,
	2010			2009			2008
	(In millions)
Present value of expected future premium	$	506		$	427		$	712

Present value of expected future paid losses and expenses		(1,760	)		(2,157	)		(3,063	)

Net present value of future cash flows		(1,254	)		(1,730	)		(2,351	)

Established loss reserves		1,075			1,537			1,897

Net deficiency	$	(179	)	$	(193	)	$	(454	)

Each quarter, we re-estimate the premium deficiency reserve on the remaining Wall Street bulk insurance in force. The premium deficiency reserve primarily changes from quarter to quarter as a result of two factors. First, it changes as the actual premiums, losses and expenses that were previously estimated are recognized. Each period such items are reflected in our financial statements as earned premium, losses incurred and expenses. The difference between the amount and timing of actual earned premiums, losses incurred and expenses and our previous estimates used to establish the premium deficiency reserves has an effect (either positive or negative) on that period's results. Second, the premium deficiency reserve changes as our assumptions relating to the present value of expected future premiums, losses and expenses on the remaining Wall Street bulk insurance in force change. Changes to these assumptions also have an effect on that period's results.

The decrease in the premium deficiency reserve for the years ended December 31, 2010 and 2009 was $14 million and $261 million, respectively, as shown in the charts below, which represents the net result of actual premiums, losses and expenses as well as a net change in assumptions for these periods. The change in assumptions for 2010 is primarily related to higher estimated ultimate premiums, which is principally related to an increase in the projected persistency rate. The change in assumptions for 2009 primarily related to lower estimated ultimate losses, offset by lower estimated ultimate premiums. The lower estimated ultimate losses and lower estimated ultimate premiums were primarily due to higher expected rates of rescissions.

	Year ended December 31,
	2010						2009
	(In millions)

Premium Deficiency Reserve at beginning of period				$	(193	)				$	(454	)
Adjustment to premium deficiency reserve (1)					(37	)					-
Adjusted premium deficiency reserve at beginning of period					(230	)					(454	)

Paid claims and loss adjustment expenses	$	426					$	584
Decrease in loss reserves		(425	)					(360	)
Premium earned		(128	)					(156	)
Effects of present valuing on future premiums, losses and expenses		(25	)					21

Change in premium deficiency reserve to reflect actual premium, losses and expenses recognized					(152	)					89

Change in premium deficiency reserve to reflect change in assumptions relating to future premiums, losses expenses and discount rate (2)					203						172

Premium Deficiency Reserve at end of period				$	(179	)				$	(193	)

(1) In periods prior to 2010 an estimate of premium to be refunded in conjunction with claim payments was included in Loss Reserves. In 2010, we separately stated this liability in Premium deficency reserve on the consolidated balance sheet. (See Note 3 - "Summary of significant accounting policies - Revenue recognition")

(2) A positive number for changes in assumptions relating to premiums, losses, expenses and discount rate indicates a redundancy of prior premium deficiency reserves.

Each quarter we perform a premium deficiency analysis on the portion of our book of business not covered by the premium deficiency described above. As of December 31, 2010, the analysis concluded that there was no premium deficiency on such portion of our book of business. For the reasons discussed below, our analysis of any potential deficiency reserve is subject to inherent uncertainty and requires significant judgment by management. To the extent, in a future period, expected losses are higher or expected premiums are lower than the assumptions we used in our analysis, we could be required to record a premium deficiency reserve on this portion of our book of business in such period.

The calculation of premium deficiency reserves requires the use of significant judgments and estimates to determine the present value of future premium and present value of expected losses and expenses on our business. The present value of future premium relies on, among other things, assumptions about persistency and repayment patterns on underlying loans. The present value of expected losses and expenses depends on assumptions relating to severity of claims and claim rates on current defaults, and expected defaults in future periods. These assumptions also include an estimate of expected rescission activity. Similar to our loss reserve estimates, our estimates for premium deficiency reserves could be adversely affected by several factors, including a deterioration of regional or economic conditions leading to a reduction in borrowers' income and thus their ability to make mortgage payments, and a drop in housing values that could expose us to greater losses. Assumptions used in calculating the deficiency reserves can also be affected by volatility in the current housing and mortgage lending industries. To the extent premium patterns and actual loss experience differ from the assumptions used in calculating the premium deficiency reserves, the differences between the actual results and our estimates will affect future period earnings and could be material.

Reinsurance

12 Months Ended

Dec. 31, 2010

Reinsurance [Abstract]

Reinsurance [Text Block]

11.	Reinsurance

We cede a portion of our business to reinsurers and record assets for reinsurance recoverable on loss reserves and prepaid reinsurance premiums. We cede primary business to reinsurance subsidiaries of certain mortgage lenders (“captives”). The majority of ceded premiums relates to these agreements. Historically, most of these reinsurance arrangements are aggregate excess of loss reinsurance agreements, and the remainder have been quota share agreements. Under the aggregate excess of loss agreements, we are responsible for the first aggregate layer of loss (typically 4% or 5%), the captives are responsible for the second aggregate layer of loss (typically 5% or 10%) and we are responsible for any remaining loss. The layers are typically expressed as a percentage of the original risk on an annual book of business reinsured by the captive. The premium cessions on these agreements typically range from 25% to 40% of the direct premium. Under a quota share arrangement premiums and losses are shared on a pro-rata basis between us and the captives, with the captive's portion of both premiums and losses typically ranging from 25% to 50%. Effective January 1, 2009, we are no longer ceding new business under excess of loss reinsurance treaties with lender captive reinsurers. Loans reinsured on an excess of loss basis through December 31, 2008 will run off pursuant to the terms of the particular captive arrangement. New business remains eligible to be ceded under quota share reinsurance arrangements, limited to a 25% cede rate. During 2009 and 2010, many of our captive arrangements have either been terminated or placed into run-off.

Under these agreements the captives are required to maintain a separate trust account, of which we are the sole beneficiary. Premiums ceded to a captive are deposited into the applicable trust account to support the captive's layer of insured risk. These amounts are held in the trust account and are available to pay reinsured losses. The trust assets are primarily invested in money market funds and government issued securities. The captive's ultimate liability is limited to the assets in the trust account. When specific time periods are met and the individual trust account balance has reached a required level, then the individual captive may make authorized withdrawals from its applicable trust account. In most cases, the captives are also allowed to withdraw funds from the trust account to pay verifiable federal income taxes and operational expenses. Conversely, if the account balance falls below certain thresholds, the individual captive may be required to contribute funds to the trust account. However, in most cases, our sole remedy if a captive does not contribute such funds is to put the captive into run-off (in a run-off, no new loans are reinsured by the captive but loans previously reinsured continue to be covered, with premium and losses continuing to be ceded on those loans). In the event that the captive's incurred but unpaid losses exceed the funds in the trust account, and the captive does not deposit adequate funds, we may also be allowed to terminate the captive agreement, assume the captive's obligations, transfer the assets in the trust accounts to us, and retain all future premium payments.

The reinsurance recoverable on loss reserves related to captive agreements was approximately $248 million and $297 million at December 31, 2010 and 2009, respectively. The total fair value of the trust fund assets under our captive agreements at December 31, 2010 and 2009 was approximately $510 million and $547 million, respectively. During 2010 and 2009, $38 million and $119 million, respectively, of trust fund assets were transferred to us as a result of captive terminations. The transferred funds resulted in an increase in our investment portfolio (including cash and cash equivalents) and a decrease in our net losses paid (reduction in losses incurred). In addition, there is an offsetting decrease in the reinsurance recoverable (increase in losses incurred), and thus there is no net impact to losses incurred.

Since 2005, we have entered into three separate aggregate excess of loss reinsurance agreements under which we ceded approximately $130 million of risk in force in the aggregate to three special purpose reinsurance companies. In 2008, we terminated one of these excess of loss reinsurance agreements. The remaining amount of ceded risk in force at December 31, 2010 was approximately $45.9 million. Additionally, certain pool polices written by us have been reinsured with one domestic reinsurer. We receive a ceding commission under certain reinsurance agreements.

Generally, reinsurance recoverables on primary loss reserves, paid losses and prepaid reinsurance premiums are supported by trust funds or letters of credit. As such, we have not established an allowance against these recoverables.

The effect of these agreements on premiums earned and losses incurred is as follows:

	2010			2009			2008
	(In thousands)
Premiums earned:
Direct	$	1,236,949		$	1,406,977		$	1,601,610
Assumed		3,091			3,339			3,588
Ceded		(71,293	)		(107,975	)		(212,018	)

Net premiums earned	$	1,168,747		$	1,302,341		$	1,393,180

Losses incurred:
Direct	$	1,716,538		$	3,637,706		$	3,553,029
Assumed		4,128			4,290			1,456
Ceded		(113,125	)		(262,552	)		(482,984	)

Net losses incurred	$	1,607,541		$	3,379,444		$	3,071,501

In June 2008 we entered into a reinsurance agreement that was effective on the risk associated with up to $50 billion of qualifying new insurance written each calendar year. The term of the reinsurance agreement began April 1, 2008 and was scheduled to end on December 31, 2010, subject to two one-year extensions that could have been exercised by the reinsurer. Effective March 20, 2009, we terminated this reinsurance agreement. The termination resulted in a reinsurance fee of $26.4 million as reflected in our results of operations for the year ended December 31, 2009. There are no further obligations under this reinsurance agreement.

Investments in joint ventures

12 Months Ended

Dec. 31, 2010

Investments in joint ventures [Abstract]

Investments in joint ventures [Text Block]

12.	Investments in joint ventures

C-BASS

C-BASS, a limited liability company, is an unconsolidated, less than 50%-owned investment of ours that is not controlled by us. Historically, C-BASS was principally engaged in the business of investing in the credit risk of subprime single-family residential mortgages. In 2007, C-BASS ceased its operations and was managing its portfolio pursuant to a consensual, non-bankruptcy restructuring, under which its assets are to be paid out over time to its secured and unsecured creditors. In November 2010, C-BASS filed for Chapter 11 bankruptcy protection. In the third quarter of 2007, we concluded that our total equity interest in C-BASS was impaired. In addition, during the fourth quarter of 2007 due to additional losses incurred by C-BASS, we reduced the carrying value of our $50 million note from C-BASS to zero. At December 31, 2010 and 2009 our current book value of C-BASS, including our note receivable from C-BASS, remains at zero.

Sherman

During the period in which we held an equity interest in Sherman, Sherman was principally engaged in the business of purchasing and collecting for its own account delinquent consumer assets which were primarily unsecured, and in originating and servicing subprime credit card receivables. The borrowings used to finance these activities were included in Sherman's balance sheet. A substantial portion of Sherman's consolidated assets were investments in consumer receivable portfolios that do not have readily ascertainable market values. Sherman's results of operations were sensitive to estimates by Sherman's management of ultimate collections on these portfolios.

In August 2008 we sold our entire interest in Sherman to Sherman. Our interest sold represented approximately 24.25% of Sherman's equity. The sale price paid was $124.5 million in cash and by delivery of Sherman's unsecured promissory note in the principal amount of $85 million (the “Note”). The scheduled maturity of the Note was February 13, 2011 and it paid interest, monthly, at the annual rate equal to three-month LIBOR plus 500 basis points. The Note was issued under a Credit Agreement, dated August 13, 2008, between Sherman and MGIC. Sherman repaid the Note in December 2010 for approximately $83.5 million. The carrying value of the Note at the time of repayment was approximately $84.0 million. The loss recognized on the repayment of $0.5 million is included in net realized investment gains on the statement of operations for the year ended December 31, 2010.

At the time of sale the Note had a fair value of $69.5 million (18.25% discount to par). The fair value was determined by comparing the terms of the Note to the discounts and yields on comparable bonds. The fair value was also discounted for illiquidity and lack of ratings. The discount was amortized to interest income over the life of the Note. The gain recognized on the sale was $62.8 million, and is included in realized investment gains (losses) on the statement of operations for the year ended December 31, 2008. The value of the Sherman Note and related interest receivable at December 31, 2009 was $78.1 million and was included in Other assets on our consolidated balance sheet.

In connection with the sale of our interest in Sherman, we waived, effective at the time at which the Note was paid in full, our right to any contingent consideration for the sale of the interests in Sherman that we sold in September 2008 to an entity owned by the management of Sherman. Upon such a sale, we would have been entitled to an additional cash payment if the purchaser's after-tax rate of return on the interests purchased exceeded a threshold that equated to an annual return of 16%.

A Sherman summary income statement for the seven months ended July 31, 2008 appears below. Prior to the sale of our interest, we did not consolidate Sherman with us for financial reporting purposes, and we did not control Sherman. Sherman's internal controls over its financial reporting were not part of our internal controls over our financial reporting. However, our internal controls over our financial reporting included processes to assess the effectiveness of our financial reporting as it pertained to Sherman. We believe those processes were effective in the context of our overall internal controls.

Sherman Summary Income Statement:

	Seven Months Ended

	July 31, 2008*
	(unaudited)
	(In millions)

Revenues from receivable portfolios	$	660.3
Portfolio amortization		264.8
Revenues, net of amortization		395.5

Credit card interest income and fees		475.6
Other revenue		35.3
Total revenues		906.4

Total expenses		740.1

Income before tax	$	166.3


Company's income from Sherman	$	35.6

*The income statement only reflects Sherman's results and our income from Sherman through July 31, 2008 as a result of the sale of our remaining interest in August 2008.

The “Company's income from Sherman” line item in the table above includes $3.6 million of additional amortization expense in 2009 above Sherman's actual amortization expense, related to additional interests in Sherman that we purchased during the third quarter of 2006 at a price in excess of book value.

- Definition

Equity investment disclosure, or group of investments for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20% of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

+ References+ Details

Benefit plans

12 Months Ended

Dec. 31, 2010

Benefit plans [Abstract]

Benefit plans [Text Block]

13.	Benefit plans

We have a non-contributory defined benefit pension plan covering substantially all domestic employees, as well as a supplemental executive retirement plan. We also offer both medical and dental benefits for retired domestic employees and their spouses under a postretirement benefit plan. In October 2008 we amended our postretirement benefit plan. The amendment, which was effective January 1, 2009, terminated the benefits provided to retirees once they reach the age of 65. This amendment reduced our accumulated postretirement benefit obligation as of December 31, 2008. The benefit from this amendment was amortized to net periodic benefit cost in 2009 and future periods. The following tables provide the components of aggregate annual net periodic benefit cost, the amounts recognized in the consolidated balance sheet, changes in the benefit obligation and the funded status of the pension, supplemental executive retirement and other postretirement benefit plans:

			Pension and Supplemental Executive Retirement Plans									Other Postretirement Benefits
Components of Net Periodic Benefit Cost for fiscal year ending
			12/31/2010			12/31/2009			12/31/2008			12/31/2010			12/31/2009			12/31/2008
			(In thousands)
	1.	Company Service Cost	$	8,531		$	8,154		$	8,677		$	1,126		$	1,280		$	3,886
	2.	Interest Cost		15,535			14,300			13,950			1,183			1,463			4,966
	3.	Expected Return on Assets		(14,502	)		(15,340	)		(19,348	)		(2,891	)		(2,229	)		(3,766	)
	4.	Other Adjustments		-			-			-			-			-			-
		Subtotal		9,564			7,114			3,279			(582	)		514			5,086
	5.	Amortization of :
		a. Net Transition Obligation/(Asset)		-			-			-			-			-			283
		b. Net Prior Service Cost/(Credit)		650			716			684			(6,138	)		(6,059	)		-
		c. Net Losses/(Gains)		5,924			6,330			510			764			1,704			-
		Total Amortization		6,574			7,046			1,194			(5,374	)		(4,355	)		283
	6.	Net Periodic Benefit Cost		16,138			14,160			4,473			(5,956	)		(3,841	)		5,369
	7.	Cost of settlements or curtailments		-			-			-			-			-			-
	8.	Total Expense for Year	$	16,138		$	14,160		$	4,473		$	(5,956	)	$	(3,841	)	$	5,369

Development of Funded Status
			Pension and Supplemental Executive Retirement Plans						Other Postretirement Benefits
			12/31/2010			12/31/2009			12/31/2010			12/31/2009
			(In thousands)

Actuarial Value of Benefit Obligations
	1.	Measurement Date	12/31/2010			12/31/2009			12/31/2010			12/31/2009
	2.	Accumulated Benefit Obligation		270,684			237,257			26,200			24,144

Funded Status
	1.	Projected Accumulated Benefit Obligation		(291,456	)		(258,592	)		(26,200	)		(24,144	)
	2.	Plan Assets at Fair Value		284,080			243,369			44,362			38,920
	3.	Funded Status - Overfunded		N/A			N/A			18,162			14,776
	4.	Funded Status - Underfunded		(7,376	)		(15,223	)		N/A			N/A

Accumulated Other Comprehensive Income

		12/31/2010		12/31/2009		12/31/2010			12/31/2009
		(In thousands)
1.	Net Actuarial (Gain)/Loss	$	81,802	$	90,655	$	13,463		$	16,517
2.	Net Prior Service Cost/(Credit)		2,847		2,748		(47,290	)		(52,707	)
3.	Net Transition Obligation/(Asset)		-		-		-			-
4.	Total at Year End		84,649		93,403		(33,827	)		(36,190	)

The changes in the projected benefit obligation are as follows:

			Pension and Supplemental Executive Retirement Plans						Other Postretirement Benefits
Change in Projected Benefit Obligation
			12/31/2010			12/31/2009			12/31/2010			12/31/2009
			(In thousands)
	1.	Benefit Obligation at Beginning of Year	$	258,592		$	229,039		$	24,144		$	25,282
	2.	Company Service Cost		8,531			8,154			1,126			1,280
	3.	Interest Cost		15,535			14,300			1,183			1,463
	4.	Plan Participants' Contributions		-			-			327			281
	5.	Net Actuarial (Gain)/Loss due to Assumption Changes		10,425			17,428			(2,925	)		359
	6.	Net Actuarial (Gain)/Loss due to Plan Experience		3,624			(5,800	)		3,695			(2,490	)
	7.	Benefit Payments from Fund		(5,769	)		(4,988	)		(510	)		(467	)
	8.	Benefit Payments Directly by Company		(231	)		(231	)		(120	)		(738	)
	9.	Plan Amendments		749			690			(720	)		(721	)
	10.	Other Adjustment		-			-			-			(105	)
	11.	Benefit Obligation at End of Year	$	291,456		$	258,592		$	26,200		$	24,144

The changes in the fair value of the net assets available for plan benefits are as follows:

Change in Plan Assets
			12/31/2010			12/31/2009			12/31/2010			12/31/2009
			(In thousands)
	1.	Fair Value of Plan Assets at Beginning of Year	$	243,369		$	206,729		$	38,920		$	30,190
	2.	Company Contributions		15,231			10,231			-			-
	3.	Plan Participants' Contributions		-			-			327			281
	4.	Benefit Payments from Fund		(5,769	)		(4,988	)		(510	)		(467	)
	5.	Benefit Payments paid directly by Company		(231	)		(231	)		(120	)		(738	)
	6.	Actual Return on Assets		31,480			31,628			5,951			9,197
	11.	Other Adjustment		-			-			(207	)		457
	12.	Fair Value of Plan Assets at End of Year		284,080			243,369			44,361			38,920

			Pension and Supplemental Executive Retirement Plans						Other Postretirement Benefits
Change in Accumulated Other Comprehensive Income (AOCI)
			12/31/2010			12/31/2009			12/31/2010			12/31/2009
			(In thousands)
	1.	AOCI in Prior Year	$	93,403		$	104,420		$	(36,190	)	$	(30,726	)
	2.	Increase/(Decrease) in AOCI
		a. Recognized during year - Prior Service (Cost)/Credit		(650	)		(716	)		6,138			6,059
		b. Recognized during year - Net Actuarial (Losses)/Gains		(5,924	)		(6,330	)		(764	)		(1,704	)
		c. Occurring during year - Prior Service Cost		749			690			(720	)		(721	)
		d. Occurring during year - Net Actuarial Losses/(Gains)		(2,929	)		(4,661	)		(2,291	)		(9,098	)
	3.	AOCI in Current Year	$	84,649		$	93,403		$	(33,827	)	$	(36,190	)

Amortizations Expected to be Recognized During Next Fiscal Year
			12/31/2010		12/31/2009		12/31/2010			12/31/2009
			(In thousands)
	1.	Amortization of Net Transition
		Obligation/(Asset)	$	-	$	-	$	-		$	-
	2.	Amortization of Prior Service Cost/(Credit)		650		559		(6,217	)		(6,138	)
	3.	Amortization of Net Losses/(Gains)		4,868		5,754		750			1,025

The projected benefit obligations, net periodic benefit costs and accumulated postretirement benefit obligation for the plans were determined using the following weighted average assumptions.

			Pension and Supplemental Executive Retirement Plans						Other Postretirement Benefits
Actuarial Assumptions
			12/31/2010			12/31/2009			12/31/2010			12/31/2009
Weighted-Average Assumptions Used to Determine
		Benefit Obligations at year end
	1.	Discount Rate		5.75	%		6.00	%		5.50	%		5.75	%
	2.	Rate of Compensation Increase		3.00	%		3.00	%		N/A			N/A

Weighted-Average Assumptions Used to Determine
		Net Periodic Benefit Cost for Year
	1.	Discount Rate		6.00	%		6.50	%		5.75	%		6.50	%
	2.	Expected Long-term Return on Plan Assets		6.00	%		7.50	%		7.50	%		7.50	%
	3.	Rate of Compensation Increase		3.00	%		3.00	%		N/A			N/A

		Assumed Health Care Cost Trend Rates at year end
	1.	Health Care Cost Trend Rate Assumed for Next Year		N/A			N/A			8.50	%		8.50	%
	2.	Rate to Which the Cost Trend Rate is Assumed to Decline (Ultimate Trend Rate)		N/A			N/A			5.00	%		5.00	%
	3.	Year That the Rate Reaches the Ultimate Trend Rate		N/A			N/A			2018			2017

In selecting a discount rate, we performed a hypothetical cash flow bond matching exercise, matching our expected pension plan and postretirement medical plan cash flows, respectively, against a selected portfolio of high quality corporate bonds. The modeling was performed using a bond portfolio of noncallable bonds with at least $25 million outstanding. The average yield of these hypothetical bond portfolios was used as the benchmark for determining the discount rate. In selecting the expected long-term rate of return on assets, we considered the average rate of earnings expected on the classes of funds invested or to be invested to provide for the benefits of these plans. This included considering the trusts' targeted asset allocation for the year and the expected returns likely to be earned over the next 20 years.

The weighted-average asset allocations of the plans are as follows:

			Pension Plan						Other Postretirement Benefits
Plan Assets
			12/31/2010			12/31/2009			12/31/2010			12/31/2009
		Allocation of Assets at year end
	1.	Equity Securities		38	%		30	%		100	%		100	%
	2.	Debt Securities		62	%		70	%		0	%		0	%
	3.	Other		0	%		0	%		0	%		0	%
	4.	Total		100	%		100	%		100	%		100	%

		Target Allocation of Assets
	1.	Equity Securities		30	%		30	%		100	%		100	%
	2.	Debt Securities		70	%		70	%		0	%		0	%
	3.	Other		0	%		0	%		0	%		0	%
	4.	Total		100	%		100	%		100	%		100	%

In accordance with fair value guidance, we applied the following fair value hierarchy in order to measure fair value of our benefit plan assets:

Level 1 – Quoted prices for identical instruments in active markets that we have the ability to access. Financial assets utilizing Level 1 inputs include equity securities, mutual funds, money market funds and certain U.S. Treasury securities and obligations of the U.S. government.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and inputs, other than quoted prices, that are observable in the marketplace for the financial instrument. The observable inputs are used in valuation models to calculate the fair value of the financial instruments. Financial assets utilizing Level 2 inputs include certain municipal, corporate and foreign bonds.

To determine the fair value of securities in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model.

The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31 2010.

Assets at Fair Value as of December 31, 2010

Pension Plan	Level 1		Level 2		Level 3		Total
	(In thousands)
Mutual Funds	$	80,556	$	-	$	-	$	80,556
Common Stocks		45,774		-		-		45,774
Corporate Bonds		-		127,116		-		127,116
U.S. Government Securities		5,318		-		-		5,318
Municipals		-		9,105		-		9,105
Foreign Bonds		-		13,525		-		13,525
Foreign Stocks		2,686		-		-		2,686
Total Assets at fair value	$	134,334	$	149,746	$	-	$	284,080

Our pension plan portfolio returns are expected to achieve the following objectives over each market cycle and for at least 5 years:

Fixed income allocation

Protect actuarial benefit payment stream through asset liability matching

Reduce volatility of investment returns compared to actuarial benefit liability

Equity allocation

Protect long tailed liabilities through the use of equity portfolio

Achieve competitive investment results

The primary focus in developing asset allocation ranges for the portfolio is the assessment of the portfolio's investment objectives and the level of risk that is acceptable to obtain those objectives. To achieve these goals the minimum and maximum allocation ranges for fixed income securities and equity securities are:

	Minimum			Maximum

Fixed income		40	%		100	%
Equity		0	%		60	%
Cash equivalents		0	%		10	%

Investment in international oriented funds is limited to a maximum of 25% of the equity range.

The following table sets forth by level, within the fair value hierarchy, the postretirement plan assets at fair value as of December 31 2010.

Assets at Fair Value as of December 31, 2010

Postretirement Plan	Level 1		Level 2		Level 3		Total
	(In thousands)
Mutual Funds	$	44,362	$	-	$	-	$	44,362
Total Assets at fair value	$	44,362	$	-	$	-	$	44,362

Our postretirement plan portfolio returns are expected to achieve the following objectives over each market cycle and for at least 5 years:

Total return should exceed growth in the Consumer Price Index

Achieve competitive investment results

	Minimum			Maximum
Fixed income		0	%		10	%
Equity		90	%		100	%

Given the long term nature of this portfolio and the lack of any immediate need for significant cash flow, it is anticipated that the equity investments will consist of growth stocks and will typically be at the higher end of the allocation ranges above. Investment in international oriented funds is limited to a maximum of 25% of the portfolio.

The following tables show the actual and estimated future contributions and actual and estimated future benefit payments.

			Pension and Supplemental Executive Retirement Plans				Other Postretirement Benefits
Company Contributions
			12/31/2010		12/31/2009		12/31/2010		12/31/2009
			(In thousands)
		Company Contributions for the Year Ending:
	1.	Current		15,231		10,231		-		-
	2.	Current + 1		10,530		10,575		-		-

Benefit Payments (Total)
			12/31/2010		12/31/2009		12/31/2010		12/31/2009
			(In thousands)
		Actual Benefit Payments for the Year Ending:
	1.	Current		6,000		5,218		303		923
		Expected Benefit Payments for the Year Ending:
	2.	Current + 1		9,457		7,734		924		1,018
	3.	Current + 2		10,846		8,827		1,160		1,238
	4.	Current + 3		11,942		10,287		1,268		1,454
	5.	Current + 4		14,204		11,500		1,464		1,567
	6.	Current + 5		14,710		13,892		1,548		1,824
	7.	Current + 6 - 10		91,135		83,034		10,496		11,926

Health care sensitivities

For measurement purposes, an 8.5% health care trend rate was used for pre-65 benefits for 2010. In 2011, the rate is assumed to be 8.5%, decreasing to 5.0% by 2018 and remaining at this level beyond.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A 1% change in the health care trend rate assumption would have the following effects on other postretirement benefits:

	1-Percentage Point Increase			1-Percentage Point Decrease
	(In thousands)

Effect on total service and interest cost components		$	289		$	(250	)
Effect on postretirement benefit obligation			2,411			(2,115	)

We have a profit sharing and 401(k) savings plan for employees. At the discretion of the Board of Directors, we may make a profit sharing contribution of up to 5% of each participant's eligible compensation. We provide a matching 401(k) savings contribution on employees' before-tax contributions at a rate of 80% of the first $1,000 contributed and 40% of the next $2,000 contributed. We recognized profit sharing expense and 401(k) savings plan expense of $3.7 million, $3.1 million and $4.5 million in 2010, 2009 and 2008, respectively.

- Definition

Description containing the entire pension and other postretirement benefits disclosure as a single block of text.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 158

-Paragraph 7, 21, 22

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5, 6, 7, 8

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 8

-Subparagraph m

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 106

-Paragraph 518

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 87

-Paragraph 264

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph b

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph a

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph h

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph q

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name FASB Staff Position (FSP)

-Number FAS106-2

-Paragraph 20, 21, 22

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Emerging Issues Task Force (EITF)

-Number 03-2

-Paragraph 8

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Accounting Principles Board Opinion (APB)

-Number 30

-Paragraph 26

Reference 13: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Implementation Guide (Q and A)

-Number FAS88

-Paragraph 63

+ Details

Income taxes

12 Months Ended

Dec. 31, 2010

Income taxes [Abstract]

Income taxes [Text Block]

14.	Income taxes

Net deferred tax assets and liabilities as of December 31, 2010 and 2009 are as follows:

	2010			2009
	(In thousands)

Total deferred tax assets	$	651,568		$	558,445
Total deferred tax liabilities		(249,989	)		(323,126	)

Net deferred tax asset before valuation allowance		401,579			235,319
Valuation allowance		(410,333	)		(238,490	)
Net deferred tax liability	$	(8,754	)	$	(3,171	)

The components of the net deferred tax liability as of December 31, 2010 and 2009 are as follows:

	2010			2009
	(In thousands)

Unearned premium reserves	$	14,313		$	18,668
Convertible debentures		(25,864	)		(34,208	)
Net operating loss		432,827			299,582
Loss reserves		85,425			101,550
Unrealized (appreciation) depreciation in investments		(31,379	)		(55,840	)
Mortgage investments		17,934			19,073
Deferred compensation		19,080			19,621
Investments in joint ventures		(165,598	)		(208,787	)
Premium deficiency reserves		49,644			67,615
Loss due to "other than temporary" impairments		14,160			16,858
Other, net		(8,963	)		(8,813	)

Net deferred tax asset before valuation allowance		401,579			235,319
Valuation allowance		(410,333	)		(238,490	)
Net deferred tax liability	$	(8,754	)	$	(3,171	)

We review the need to establish a deferred tax asset valuation allowance on a quarterly basis. We analyze several factors, among which are the severity and frequency of operating losses, our capacity for the carryback or carryforward of any losses, the expected occurrence of future income or loss and available tax planning alternatives. As discussed below, we have reduced our benefit from income tax by establishing a valuation allowance during 2010.

In periods prior to 2008, we deducted significant amounts of statutory contingency reserves on our federal income tax returns. The reserves were deducted to the extent we purchased tax and loss bonds in an amount equal to the tax benefit of the deduction. The reserves are included in taxable income in future years when they are released for statutory accounting purposes or when the taxpayer elects to redeem the tax and loss bonds that were purchased in connection with the deduction for the reserves. Since the tax effect on these reserves exceeded the gross deferred tax assets less deferred tax liabilities, we believe that all gross deferred tax assets recorded in periods prior to the quarter ended March 31, 2009 were fully realizable. Therefore, we established no valuation reserve.

In the first quarter of 2009, we redeemed the remaining balance of our tax and loss bonds of $431.5 million. Therefore, the remaining contingency reserves were released and are no longer available to support any net deferred tax assets. Beginning with the first quarter of 2009, any benefit from income taxes, relating to operating losses, has been reduced or eliminated by the establishment of a valuation allowance. During 2009, our deferred tax asset valuation allowance was reduced by the deferred tax liability related to $159.5 million of unrealized gains on investments that were recorded to equity. During 2010, our deferred tax valuation allowance was increased by the change in the deferred tax liability related to $69.9 million of unrealized losses on investments that were recorded to equity. In the event of future operating losses, it is likely that the valuation allowance will be adjusted by any taxes recorded to equity for changes in unrealized gains or losses or other items in other comprehensive income.

	2010			2009
	(In millions)

Benefit from income taxes	$	(145.3	)	$	(681.3	)
Change in valuation allowance		149.6			238.5

Tax provision (benefit)	$	4.3		$	(442.8	)

The increase in the valuation allowance that was included in other comprehensive income was $22.2 million and zero for the years ended December 31, 2010 and 2009, respectively. The total valuation allowance as of December 31, 2010 and December 31, 2009 was $410.3 million and $238.5 million, respectively.

Legislation enacted in 2009 expanded the carryback period for certain net operating losses from 2 years to 5 years. A total benefit for income taxes of $282.0 million was recorded during 2009 in the Consolidated Statement of Operations for the carryback of 2009 losses. The refund related to these benefits was received in the second quarter of 2010.

Giving full effect to the carryback of net operating losses for federal income tax purposes, we have approximately $1,237 million of net operating loss carryforwards on a regular tax basis and $428 million of net operating loss carryforwards for computing the alternative minimum tax as of December 31, 2010. Any unutilized carryforwards are scheduled to expire at the end of tax years 2029 and 2030.

The following summarizes the components of the provision for (benefit from) income taxes:

	2010			2009			2008
	(In thousands)

Current	$	1,618		$	(621,170	)	$	(654,245	)
Deferred		(19	)		175,194			250,940
Other		2,736			3,200			5,507

Provision for (benefit from) income taxes	$	4,335		$	(442,776	)	$	(397,798	)

We received $289.1 million, $437.5 million and $938.1 million in federal income tax in 2010, 2009 and 2008, respectively. Proceeds received in 2010 were primarily from the carryback of 2009 losses. Proceeds received in 2009 and 2008 were primarily from the redemption of tax and loss bonds. At December 31, 2008, we owned $431.5 million of tax and loss bonds. We did not own any tax and loss bonds at December 31, 2010 or 2009.

The reconciliation of the federal statutory income tax benefit rate to the effective income tax (benefit) rate is as follows:

	2010			2009			2008


Federal statutory income tax benefit rate		(35.0	) %		(35.0	) %		(35.0	) %
Valuation allowance		41.6			13.5			-
Tax exempt municipal bond interest		(10.5	)		(3.6	)		(7.5	)
Other, net		5.1			-			0.5

Effective income tax (benefit) rate		1.2	%		(25.1	) %		(42.0	) %

The Internal Revenue Service (“IRS”) completed separate examinations of our federal income tax returns for the years 2000 through 2004 and 2005 through 2007 and issued assessments for unpaid taxes, interest and penalties. The primary adjustment in both examinations related to our treatment of the flow-through income and loss from an investment in a portfolio of residual interests of Real Estate Mortgage Investment Conduits (“REMICS”). This portfolio has been managed and maintained during years prior to, during and subsequent to the examination period. The IRS indicated that it did not believe that, for various reasons, we had established sufficient tax basis in the REMIC residual interests to deduct the losses from taxable income. We appealed those adjustments and, in August 2010, we reached a tentative settlement agreement with the IRS. The settlement agreement is subject to review by the Joint Committee on Taxation of Congress because net operating losses incurred in 2009 were carried back to taxable years that were included in the agreement. A final agreement is expected to be entered into when the review is complete, although we do not expect there will be any substantive change in the terms of a final agreement from those in the tentative agreement. We adjusted our tax provision and liabilities for the effects of this agreement in the third quarter of 2010 and believe that they accurately reflect our exposure in regard to this issue.

Under current guidance, when evaluating a tax position for recognition and measurement, an entity shall presume that the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. The interpretation adopts a benefit recognition model with a two-step approach, a more-likely-than-not threshold for recognition and derecognition, and a measurement attribute that is the greatest amount of benefit that is cumulatively greater than 50% likely of being realized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Unrecognized tax benefits
	2010		2009		2008
	(In millions)

Balance at beginning of year	$	91.1	$	87.9	$	86.1
Additions based on tax positions related to the current year		-		0.3		0.7
Additions for tax positions of prior years		18.2		2.9		1.1
Reductions for tax positions of prior years		-		-		-
Settlements		-		-		-
Balance at end of year	$	109.3	$	91.1	$	87.9

The total amount of the unrecognized tax benefits that would affect our effective tax rate is $96.7 million. We recognize interest accrued and penalties related to unrecognized tax benefits in income taxes. During 2010, we recognized $3.3 million in interest. As of December 31, 2010 and 2009, we had $25.9 million and $22.6 million of accrued interest related to uncertain tax positions, respectively. The statute of limitations related to the consolidated federal income tax return is closed for all years prior to 2000. Based on our tentative agreement with the IRS, we expect our total amount of unrecognized tax benefits to be reduced by $103.5 million during 2011, while after taking into account prior payments and the effect of available NOL carrybacks, we expect net cash outflows to equal approximately $22 million.

Shareholders' equity

12 Months Ended

Dec. 31, 2010

Shareholders' equity [Abstract]

Shareholders' equity [Text Block]

15.	Shareholders' equity

In April 2010 we completed the public offering and sale of 74,883,720 shares of our common stock at a price of $10.75 per share. We received net proceeds of approximately $772.4 million, after deducting underwriting discount and offering expenses. The shares of common stock sold were newly issued shares.

We have 28.9 million authorized shares reserved for conversion under our convertible debentures and 25.7 million authorized shares reserved for conversion under our convertible senior notes. (See Note 8 – “Debt”)

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References+ Details

Dividend restrictions

12 Months Ended

Dec. 31, 2010

Dividend restrictions [Abstract]

Dividend restrictions [Text Block]

16.	Dividend restrictions

Our insurance subsidiaries are subject to statutory regulations as to maintenance of policyholders' surplus and payment of dividends. The maximum amount of dividends that the insurance subsidiaries may pay in any twelve-month period without regulatory approval by the Office of the Commissioner of Insurance of the State of Wisconsin is the lesser of adjusted statutory net income or 10% of statutory policyholders' surplus as of the preceding calendar year end. Adjusted statutory net income is defined for this purpose to be the greater of statutory net income, net of realized investment gains, for the calendar year preceding the date of the dividend or statutory net income, net of realized investment gains, for the three calendar years preceding the date of the dividend less dividends paid within the first two of the preceding three calendar years.

The senior notes, convertible senior notes and convertible debentures, discussed in Note 8 – “Debt”, are obligations of MGIC Investment Corporation, our holding company, and not of its subsidiaries. We are a holding company and the payment of dividends from our insurance subsidiaries, which prior to raising capital in the public markets in 2008 and 2010 had been the principal source of our holding company cash inflow, is restricted by insurance regulation. MGIC is the principal source of dividend-paying capacity. In 2009 and 2010, MGIC has not paid any dividends to our holding company. Through 2011, MGIC and our other insurance subsidiaries cannot pay any dividends to our holding company without approval from the OCI.

In 2008, we paid dividends of $8.2 million or $0.075 per share. In the fourth quarter of 2008, we suspended the payment of dividends.

Statutory capital

12 Months Ended

Dec. 31, 2010

Statutory capital [Abstract]

Statutory capital [Text Block]

17.	Statutory capital

Accounting Principles

The accounting principles used in determining statutory financial amounts differ from GAAP, primarily for the following reasons:

Under statutory accounting practices, mortgage guaranty insurance companies are required to maintain contingency loss reserves equal to 50% of premiums earned. Such amounts cannot be withdrawn for a period of ten years except as permitted by insurance regulations. With regulatory approval a mortgage guaranty insurance company may make early withdrawals from the contingency reserve when incurred losses exceed 35% of net premiums earned in a calendar year. Changes in contingency loss reserves impact the statutory statement of operations. Contingency loss reserves are not reflected as liabilities under GAAP and changes in contingency loss reserves do not impact GAAP operations. A premium deficiency reserve that may be recorded on a GAAP basis when present value of expected future losses and expenses exceeds the present value of expected future premiums and already established loss reserves, may not be recorded on a statutory basis if the present value of expected future premiums and already established loss reserves and statutory contingency reserves, exceeds the present value of expected future losses and expenses.

Under statutory accounting practices, insurance policy acquisition costs are charged against operations in the year incurred. Under GAAP, these costs are deferred and amortized as the related premiums are earned commensurate with the expiration of risk.

Under statutory accounting practices, purchases of tax and loss bonds are accounted for as investments. Under GAAP, purchases of tax and loss bonds are recorded as payments of current income taxes.

Under statutory accounting practices, changes in deferred tax assets and liabilities are recognized as a separate component of gains and losses in statutory surplus. Under GAAP, changes in deferred tax assets and liabilities are recorded on the statement of operations as a component of the (benefit) provision for income tax.

Under statutory accounting practices, fixed maturity investments are generally valued at amortized cost. Under GAAP, those investments which we do not have the ability and intent to hold to maturity are considered to be available-for-sale and are recorded at fair value, with the unrealized gain or loss recognized, net of tax, as an increase or decrease to shareholders' equity.

Under statutory accounting practices, certain assets, designated as non-admitted assets, are charged directly against statutory surplus. Such assets are reflected on the GAAP financial statements.

Under statutory accounting practices, our share of the net income or loss of our investments in joint ventures is credited directly to statutory surplus. Under GAAP, income from joint ventures is shown separately, net of tax, on the statement of operations.

The statutory net income, surplus and the contingency reserve liability of the insurance subsidiaries (excluding the non-insurance companies), as well as the surplus contributions made to MGIC and other insurance subsidiaries and dividends paid by MGIC to us, are as follows:

Year Ended December 31,	Net (loss)Income			Surplus		Contingency Reserve
	(In thousands)

2010	$	113,651		$	1,692,392	$	5,480
2009		(44,669	)		1,442,407		417,587
2008		(172,196	)		1,612,953		2,087,265

Year Ended December 31,	Surplus contributions made to MGIC by the parent company		Surplus contributions made to other insurance subsidiaries by the parent company		Dividends paid by MGIC to the parent company
	(In thousands)

2010	$	200,000	$	-	$	-
2009		-		-		-
2008		550,000		175,000		170,000

Statutory capital

The Office of the Commissioner of Insurance of Wisconsin is MGIC's principal insurance regulator. To assess a mortgage guaranty insurer's capital adequacy, Wisconsin's insurance regulations require that a mortgage guaranty insurance company maintain “policyholders position” of not less than a minimum computed under a formula. Policyholders position is the insurer's net worth or surplus, contingency reserve and a portion of the reserves for unearned premiums, with credit given for authorized reinsurance. The minimum required by the formula (“MPP”) depends on the insurance in force and whether the loans insured are primary insurance or pool insurance and further depends on the LTV ratio of the individual loans and their coverage percentage (and in the case of pool insurance, the amount of any deductible). If a mortgage guaranty insurer does not meet MPP it may be prohibited from writing new business until its policyholders position meets the minimum.

Some states that regulate us have provisions that limit the risk-to-capital ratio of a mortgage guaranty insurance company to 25 to 1. This ratio is computed on a statutory basis for our insurance entities and is our net risk in force divided by our policyholders' position. Policyholders' position consists primarily of statutory policyholders' surplus, plus the statutory contingency reserve. The statutory contingency reserve is reported as a liability on the statutory balance sheet. A mortgage insurance company is required to make annual contributions to the contingency reserve of approximately 50% of net earned premiums. These contributions must generally be maintained for a period of ten years. However, with regulatory approval a mortgage insurance company may make early withdrawals from the contingency reserve when incurred losses exceed 35% of net earned premium in a calendar year. If an insurance company's risk-to-capital ratio exceeds the limit applicable in a state, it may be prohibited from writing new business in that state until its risk-to-capital ratio falls below the limit.

At December 31, 2010, MGIC exceeded MPP by approximately $225 million, and we exceeded MPP by approximately $290 million on a combined basis. At December 31, 2010 MGIC's risk-to-capital was 19.8 to 1 and was 23.2 to 1 on a combined basis. See Note 1 – “Nature of business – Capital” for a discussion of our capital plans.

Share-based compensation plans

12 Months Ended

Dec. 31, 2010

Share-based compensation plans [Abstract]

Share-based compensation plans [Text Block]

18.	Share-based compensation plans

The compensation cost that has been charged against income for the share-based plans was $13.7 million, $15.2 million and $17.4 million for the years ended December 31, 2010, 2009 and 2008, respectively. The related income tax benefit, before valuation allowance, recognized for the share-based compensation plans was $1.5 million, $5.3 million and $6.1 million for the years ended December 31, 2010, 2009 and 2008, respectively.

We have stock incentive plans that were adopted in 1991 and 2002. When the 2002 plan was adopted, no further awards could be made under the 1991 plan. The maximum number of shares covered by awards under the 2002 plan is the total of 7.1 million shares plus the number of shares that must be purchased at a purchase price of not less than the fair market value of the shares as a condition to the award of restricted stock under the 2002 plan. The maximum number of shares of restricted stock that can be awarded under the 2002 plan is 5.9 million shares. Both plans provide for the award of stock options with maximum terms of 10 years and for the grant of restricted stock or restricted stock units. The 2002 plan also provides for the grant of stock appreciation rights. The exercise price of options is the closing price of the common stock on the New York Stock Exchange on the date of grant. The vesting provisions of options, restricted stock and restricted stock units are determined at the time of grant. Newly issued shares are used for exercises under the 1991 plan and treasury shares are used for exercises under the 2002 plan. Directors may receive awards under the 2002 plan and were eligible for awards of restricted stock under the 1991 plan.

A summary of option activity in the stock incentive plans during 2010 is as follows:

	Weighted Average Exercise Price		Shares Subject to Option

Outstanding, December 31, 2009	$	56.78		2,298,400

Granted		-		-
Exercised		-		-
Forfeited or expired		46.26		(548,700	)

Outstanding, December 31, 2010	$	60.08		1,749,700

There were no options granted or exercised in 2010, 2009 or 2008.

The following is a summary of stock options outstanding, all of which are exercisable, at December 31, 2010:

	Options Outstanding and Exercisable
Exercise Price Range	Shares		Remaining Average Life (years)		Weighted Average Exercise Price

$43.70 - 43.70		350,500		2.1	$	43.70

$53.70 - 68.20		1,399,200		1.6	$	64.19

Total		1,749,700		1.7	$	60.08

The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2010 was zero. The aggregate intrinsic value represents the total pre-tax intrinsic value based on our closing stock price of $10.19 as of December 31, 2010 which would have been received by the option holders had all option holders exercised their options on that date. Because our closing stock price at December 31, 2010 was below all exercise prices, none of the outstanding options had any intrinsic value.

A summary of restricted stock or restricted stock unit activity during 2010 is as follows:

	Weighted Average Grant Date Fair Market Value		Shares

Restricted stock outstanding at December 31, 2009	$	21.27		3,315,310


Granted		6.82		1,649,350
Vested		14.75		(1,376,923	)
Forfeited		63.63		(130,471	)

Restricted stock outstanding at December 31, 2010	$	14.69		3,457,266

At December 31, 2010, the 3.5 million shares of restricted stock outstanding consisted of 2.3 million shares that are subject to performance conditions (“performance shares”) and 1.2 million shares that are subject only to service conditions (“time vested shares”). The weighted-average grant date fair value of restricted stock granted during 2009 and 2008 was $3.11 and $15.38, respectively. The fair value of restricted stock granted is the closing price of the common stock on the New York Stock Exchange on the date of grant. At December 31, 2010, 649,463 shares were available for future grant under the 2002 stock incentive plan. Of the shares available for future grant, 504,593 are available for restricted stock awards. The total fair value of restricted stock vested during 2010, 2009 and 2008 was $8.5 million, $1.3 million and $3.3 million, respectively.

As of December 31, 2010, there was $30.6 million of total unrecognized compensation cost related to nonvested share-based compensation agreements granted under the 2002 Plan. Of this total, $26.7 million of unrecognized compensation costs relate to performance shares and $3.9 million relates to time vested shares. The unrecognized costs associated with the performance shares may or may not be recognized in future periods, depending upon whether or not the performance conditions are met. The cost associated with the time vested shares is expected to be recognized over a weighted-average period of 0.7 years.

Leases

12 Months Ended

Dec. 31, 2010

Leases [Abstract]

Leases [Text Block]

19.

Leases

We lease certain office space as well as data processing equipment and autos under operating leases that expire during the next six years. Generally, rental payments are fixed.

Total rental expense under operating leases was $6.3 million, $6.8 million and $8.1 million in 2010, 2009 and 2008, respectively.

At December 31, 2010, minimum future operating lease payments are as follows (in thousands):

2011	$	2,991
2012		1,847
2013		718
2014		554
2015 and thereafter		173

Total (1)	$	6,283

(1) Minimum payments have not been reduced by minimum sublease rentals of $555 thousand due in the future under noncancelable subleases.

- Definition

General description of lessee's leasing arrangements including: (1) The basis on which contingent rental payments are determined, (2) The existence and terms of renewal or purchase options and escalation clauses, (3) Restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) Rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

+ References+ Details

Litigation and contingencies

12 Months Ended

Dec. 31, 2010

Litigation and contingencies [Abstract]

Litigation and contingencies [Text Block]

20.	Litigation and contingencies

Consumers are bringing a growing number of lawsuits against home mortgage lenders and settlement service providers. Seven mortgage insurers, including MGIC, have been involved in litigation alleging violations of the anti-referral fee provisions of the Real Estate Settlement Procedures Act, which is commonly known as RESPA, and the notice provisions of the Fair Credit Reporting Act, which is commonly known as FCRA. MGIC settled class action litigation against it under RESPA in October 2003. MGIC settled the named plaintiffs' claims in litigation against it under FCRA in December 2004 following denial of class certification in June 2004. Since December 2006, class action litigation has been brought against a number of large lenders alleging that their captive mortgage reinsurance arrangements violated RESPA. On November 29, 2010, six mortgage insurers (including MGIC) and a large mortgage lender (which was the plaintiffs' lender) were named as defendants in a complaint, alleged to be a class action, filed in Federal District Court for the District of Columbia. The complaint alleges various causes of action related to the captive mortgage reinsurance arrangements of this mortgage lender, including that the defendants violated RESPA by paying the lender's captive reinsurer excessive premiums in relation to the risk assumed by that captive. The named plaintiffs' loan was not insured by MGIC and it is our understanding that it was not reinsured by this mortgage lender's captive reinsurance affiliates. We intend to defend MGIC against this complaint vigorously but we are unable to predict the outcome of the litigation or its effect on us. While we are only a defendant in this RESPA case, there can be no assurance that we will not be subject to future litigation under RESPA (or FCRA) or that the outcome of any such litigation would not have a material adverse effect on us.

We are subject to comprehensive, detailed regulation by state insurance departments. These regulations are principally designed for the protection of our insured policyholders, rather than for the benefit of investors. Although their scope varies, state insurance laws generally grant broad supervisory powers to agencies or officials to examine insurance companies and enforce rules or exercise discretion affecting almost every significant aspect of the insurance business. Given the recent significant losses incurred by many insurers in the mortgage and financial guaranty industries, our insurance subsidiaries have been subject to heightened scrutiny by insurance regulators. State insurance regulatory authorities could take actions, including changes in capital requirements or termination of waivers of capital requirements, that could have a material adverse effect on us. In addition, the Dodd-Frank Act, the financial reform legislation that was passed in July 2010, establishes the Bureau of Consumer Financial Protection to regulate the offering and provision of consumer financial products or services under federal law. We are uncertain whether this Bureau will issue any rules or regulations that affect our business. Such rules and regulations could have a material adverse effect on us.

In June 2005, in response to a letter from the New York Insurance Department, we provided information regarding captive mortgage reinsurance arrangements and other types of arrangements in which lenders receive compensation. In February 2006, the New York Insurance Department requested MGIC to review its premium rates in New York and to file adjusted rates based on recent years' experience or to explain why such experience would not alter rates. In March 2006, MGIC advised the New York Insurance Department that it believes its premium rates are reasonable and that, given the nature of mortgage insurance risk, premium rates should not be determined only by the experience of recent years. In February 2006, in response to an administrative subpoena from the Minnesota Department of Commerce (the “MN Department”), which regulates insurance, we provided the MN Department with information about captive mortgage reinsurance and certain other matters. We subsequently provided additional information to the MN Department, and beginning in March 2008 the MN Department has sought additional information as well as answers to questions regarding captive mortgage reinsurance on several occasions. In addition, beginning in June 2008, we have received subpoenas from the Department of Housing and Urban Development, commonly referred to as HUD, seeking information about captive mortgage reinsurance similar to that requested by the MN Department, but not limited in scope to the state of Minnesota. Other insurance departments or other officials, including attorneys general, may also seek information about or investigate captive mortgage reinsurance.

The anti-referral fee provisions of RESPA provide that HUD as well as the insurance commissioner or attorney general of any state may bring an action to enjoin violations of these provisions of RESPA. The insurance law provisions of many states prohibit paying for the referral of insurance business and provide various mechanisms to enforce this prohibition. While we believe our captive reinsurance arrangements are in conformity with applicable laws and regulations, it is not possible to predict the outcome of any such reviews or investigations nor is it possible to predict their effect on us or the mortgage insurance industry.

Since October 2007 we had been involved in an investigation conducted by the Division of Enforcement of the SEC. The investigation had focused on disclosure and financial reporting by us and by a co-investor in 2007 regarding our respective investments in our C-BASS joint venture. We have provided documents to the SEC and a number of our executive officers, as well as other employees, have testified. On January 18, 2011, the staff of the Division of Enforcement issued a formal closing letter advising us that the investigation has been terminated against us, our executive officers and other employees, and that it did not intend to recommend any enforcement action by the SEC.

Five previously-filed purported class action complaints filed against us and several of our executive officers were consolidated in March 2009 in the United States District Court for the Eastern District of Wisconsin and Fulton County Employees' Retirement System was appointed as the lead plaintiff. The lead plaintiff filed a Consolidated Class Action Complaint (the “Complaint”) on June 22, 2009. Due in part to its length and structure, it is difficult to summarize briefly the allegations in the Complaint but it appears the allegations are that we and our officers named in the Complaint violated the federal securities laws by misrepresenting or failing to disclose material information about (i) loss development in our insurance in force, and (ii) C-BASS, including its liquidity. Our motion to dismiss the Complaint was granted on February 18, 2010. On March 18, 2010, plaintiffs filed a motion for leave to file an amended complaint. Attached to this motion was a proposed Amended Complaint (the “Amended Complaint”). The Amended Complaint alleged that we and two of our officers named in the Amended Complaint violated the federal securities laws by misrepresenting or failing to disclose material information about C-BASS, including its liquidity, and by failing to properly account for our investment in C-BASS. The Amended Complaint also named two officers of C-BASS with respect to the Amended Complaint's allegations regarding C-BASS. The purported class period covered by the Amended Complaint began on February 6, 2007 and ended on August 13, 2007. The Amended Complaint sought damages based on purchases of our stock during this time period at prices that were allegedly inflated as a result of the purported violations of federal securities laws. On April 12, 2010, we filed a motion in opposition to the plaintiff's motion for leave to amend its complaint. On December 8, 2010, the plaintiff's motion to file an amended complaint was denied and the Complaint was dismissed with prejudice. On January 6, 2011, the plaintiff appealed the February 18, 2010 and December 8, 2010 decisions to the United States Court of Appeals for the Seventh Circuit. We are unable to predict the outcome of these consolidated cases or estimate our associated expenses or possible losses. Other lawsuits alleging violations of the securities laws could be brought against us

Several law firms have issued press releases to the effect that they are investigating us, including whether the fiduciaries of our 401(k) plan breached their fiduciary duties regarding the plan's investment in or holding of our common stock or whether we breached other legal or fiduciary obligations to our shareholders. We intend to defend vigorously any proceedings that may result from these investigations.

With limited exceptions, our bylaws provide that our officers and 401(k) plan fiduciaries are entitled to indemnification from us for claims against them.

On December 17, 2009, Countrywide filed a complaint for declaratory relief in the Superior Court of the State of California in San Francisco (the “California State Court”) against MGIC. This complaint alleges that MGIC has denied, and continues to deny, valid mortgage insurance claims submitted by Countrywide and says it seeks declaratory relief regarding the proper interpretation of the insurance policies at issue. On January 19, 2010, we removed this case to the United States District Court for the Northern District of California (the “District Court”). On March 30, 2010, the District Court ordered the case remanded to the California State Court. We have appealed this decision to the United States Court of Appeals for the Ninth Circuit (the “Court of Appeals”) and asked the Court of Appeals to vacate the remand and stay proceedings in the District Court. On May 17, 2010, the Court of Appeals denied a stay of the District Court's remand order. On May 28, 2010, Countrywide filed an amended complaint substantially similar to the original complaint in the California State Court. On July 2, 2010, we filed a petition in the California State Court to compel arbitration and stay the litigation in that court. On August 26, 2010, Countrywide filed an opposition to our petition. Countrywide's opposition states that there are thousands of loans for which it disputes MGIC's interpretation of the flow insurance policies at issue. On September 16, 2010, we filed a reply to Countrywide's opposition. On October 1, 2010, the California State Court stayed the litigation in that court pending a final ruling on our appeal

In connection with the Countrywide dispute discussed above, on February 24, 2010, we commenced an arbitration action against Countrywide seeking a determination that MGIC was entitled to deny and/or rescind coverage on the loans involved in the arbitration action, which were insured through the flow channel and numbered more than 1,400 loans as of the filing of the action. On March 16, 2010, Countrywide filed a response to our arbitration action objecting to the arbitrator's jurisdiction in view of the case initiated by Countrywide in the California State Court and asserting various defenses to the relief sought by MGIC in the arbitration. On December 20, 2010, we filed an amended demand in the arbitration proceeding. This amended demand increased the number of loans for which we denied and/or rescinded coverage and which were insured through the flow channel to more than 3,300. We continue to rescind insurance coverage on additional Countrywide loans. On December 20, 2010 Countrywide filed an amended response. In the amended response, Countrywide is seeking relief for rescissions on loans insured by MGIC through the flow channel and more than 30 bulk insurance policies. In correspondence with MGIC, Countrywide has indicated that it believes MGIC has improperly rescinded coverage on approximately 4,700 loans. The amended response also seeks damages as a result of purported breaches of insurance policies issued by MGIC and additional damages, including exemplary damages, on account of MGIC's purported breach of an implied covenant of good faith and fair dealing. The amended response states that Countrywide seeks damages “well-exceeding” $150 million; the original response sought damages of at least $150 million. On January 17, 2011, Countrywide filed an answer to MGIC's amended demand and MGIC filed an answer to Countrywide's amended response. Countrywide and MGIC have each selected 12 loans for which a three-member arbitration panel will determine coverage. While the panel's determination will not be binding on the other loans at issue, the panel will identify the issues for these 24 “bellwether” loans and strive to set forth findings of fact and conclusions of law in such a way as to aid the parties to apply them to the other loans at issue. The hearing before the panel on the bellwether loans is scheduled to begin in October 2011.

During 2008-2010, rescissions of Countrywide-related loans mitigated our paid losses on the order of $315 million. This amount is the amount we estimate we would have paid had the loans not been rescinded. On a per loan basis, the average amount that we would have paid had the loans not been rescinded was approximately $72 thousand. At December 31, 2010, 44,838 loans in our primary delinquency inventory were Countrywide-related loans (approximately 21% of our primary delinquency inventory). Of these 44,838 loans, some will cure their delinquency and the remainder will either become paid claims or will be rescinded. During 2008-2010, of the claims on Countrywide-related loans that were resolved (a claim is resolved when it is paid or rescinded; claims that are submitted but which are under review are not resolved until one of these two outcomes occurs), approximately 72% were paid and the remaining 28% were rescinded.

The flow policies at issue with Countrywide are in the same form as the flow policies that we use with all of our customers, and the bulk policies at issue vary from one another, but are generally similar to those used in the majority of our Wall Street bulk transactions. Because our rescission practices with Countrywide do not differ from our practices with other servicers, an adverse result in the Countrywide proceeding may adversely affect the ultimate result of rescissions involving other servicers and lenders. As discussed in Note 9 – “Loss reserves”, during 2008-2010 we estimated that total rescissions mitigated our incurred losses by approximately $3.1 billion, which included approximately $2.0 billion of mitigation on paid losses, excluding amounts that would have been applied to a deductible. At December 31, 2010 we estimate that our total loss reserves were benefited from rescissions by approximately $1.3 billion.

We intend to defend MGIC against Countrywide's complaint and arbitration response, and to pursue MGIC's claims in the arbitration, vigorously. However, we are unable to predict the outcome of these proceedings or their effect on us. Also, although it is reasonably possible that, when the proceedings are completed, there will be a determination that we were not entitled to rescind, we are unable to make a reasonable estimate or range of estimates of the potential liability. Under ASC 450-20, an estimated loss is accrued for only if we determine that the loss is probable and can be reasonably estimated. Therefore, we have not accrued any reserves that would reflect an adverse outcome in this proceeding.

In addition to the rescissions at issue with Countrywide, we have a substantial pipeline of claims investigations (including investigations involving loans related to Countrywide) that we expect will eventually result in future rescissions. In the second quarter of 2010, we entered into a settlement agreement with a lender-customer regarding our rescission practices. We continue to discuss with other lenders their objections to material rescissions. In addition to the proceedings involving Countrywide, we are involved in legal proceedings with respect to rescissions that we do not consider to be collectively material in amount. Because our rescission practices with Countrywide do not differ from our practices with other servicers, an adverse result in the Countrywide proceeding may adversely affect the ultimate result of rescissions involving other servicers and lenders. For additional information about rescissions as well as this settlement agreement, see Note 9 – “Loss reserves”.

In addition to the matters described above, we are involved in other legal proceedings in the ordinary course of business. In our opinion, based on the facts known at this time, the ultimate resolution of these ordinary course legal proceedings will not have a material adverse effect on our financial position or results of operations.

Our mortgage insurance business utilizes its underwriting skills to provide an outsourced underwriting service to our customers known as contract underwriting. As part of our contract underwriting activities, we are responsible for the quality of our underwriting decisions in accordance with the terms of the contract underwriting agreements with customers. We may be required to provide certain remedies to our customers if certain standards relating to the quality of our underwriting work are not met, and we have an established reserve for such obligations. Through December 31, 2010, the cost of remedies provided by us to customers for failing to meet the standards of the contracts has not been material. However, a generally positive economic environment for residential real estate that continued until approximately 2007 may have mitigated the effect of some of these costs, and claims for remedies may be made a number of years after the underwriting work was performed. A material portion of our new insurance written through the flow channel in recent years, including for 2006 and 2007, has involved loans for which we provided contract underwriting services. We believe the rescission of mortgage insurance coverage on loans for which we provided contract underwriting services may make a claim for a contract underwriting remedy more likely to occur. Beginning in the second half of 2009, we experienced an increase in claims for contract underwriting remedies, which continued into 2010. Hence, there can be no assurance that contract underwriting remedies will not be material in the future.

See Note 14 – “Income taxes” for a description of federal income tax contingencies.

Unaudited quarterly financial data

12 Months Ended

Dec. 31, 2010

Unaudited quarterly financial data [Abstract]

Unaudited quarterly financial data [Text Block]

21.	Unaudited quarterly financial data

	Quarter
2010	First			Second			Third			Fourth		(b)	2010 Year
	(In thousands, except share data)

Net premiums written	$	256,058			295,346			278,982			271,409			1,101,795
Net premiums earned		271,952			309,174			296,496			291,125			1,168,747
Investment income, net of expenses		68,859			62,868			58,465			57,061			247,253
Loss incurred, net		454,511			320,077			384,578			448,375			1,607,541
Change in premium deficiency reserves		(13,566	)		(10,619	)		(8,887	)		(18,275	)		(51,347	)
Underwriting and other operating expenses		59,945			54,050			57,606			53,541			225,142
Interest expense		21,018			25,099			26,702			25,770			98,589
Net income (loss)		(150,091	)		24,551			(51,528	)		(186,667	)		(363,735	)
Income (loss) per share (a):
Basic		(1.20	)		0.14			(0.26	)		(0.93	)		(2.06	)
Diluted		(1.20	)		0.13			(0.26	)		(0.93	)		(2.06	)

	Quarter
2009	First			Second			Third			Fourth			2009 Year
	(In thousands, except share data)

Net premiums written	$	347,513			330,383			278,254			286,877			1,243,027
Net premiums earned		355,830			347,132			293,515			305,864			1,302,341
Investment income, net of expenses		77,173			78,036			75,528			73,941			304,678
Loss incurred, net		757,893			769,631			971,043			880,877			3,379,444
Change in premium deficiency reserves		(164,801	)		(62,386	)		(19,346	)		(14,617	)		(261,150	)
Underwriting and other operating expenses		62,549			61,721			59,133			56,209			239,612
Interest expense		23,926			23,930			20,586			20,824			89,266
Net loss		(184,560	)		(339,835	)		(517,768	)		(280,114	)		(1,322,277	)
Loss per share (a):
Basic		(1.49	)		(2.74	)		(4.17	)		(2.25	)		(10.65	)
Diluted		(1.49	)		(2.74	)		(4.17	)		(2.25	)		(10.65	)

(a)	Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of the quarterly per share data may not equal the per share data for the year.

(b)	In prior periods, the liability associated with premium to be returned on claim payments is included in loss reserves and changes to this estimate affect losses incurred. See Note 3 – "Summary of significant accounting policies - Revenue recognition."

- Definition

This element can be used to disclose the entire quarterly financial data disclosure in the annual financial statements as a single block of text. The disclosure includes a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income (loss) before extraordinary items and cumulative effect of a change in accounting principle and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished. Alternatively, the details of this disclosure can be reported using the elements in this group, or by using other taxonomy elements and applying the appropriate quarterly date and period contexts when creating an instance document. For example, the element for "Interest and Dividend Income, Operating" may be used by financial institutions from the Statement of Income, applying the appropriate quarterly date and period context when creating an instance document.

+ References+ Details

Schedule I Summary of Investments Other than Investments in Related Parties

12 Months Ended

Dec. 31, 2010

Schedule I - Summary of Investments - Other than Investments in Related Parties [Abstract]

Schedule I - Summary of Investments - Other than Investments in Related Parties [Text Block]

MGIC INVESTMENT CORPORATION

SCHEDULE I - SUMMARY OF INVESTMENTS -

OTHER THAN INVESTMENTS IN RELATED PARTIES

December 31, 2010

Type of Investment	Amortized Cost		Fair Value			Amount at which shown in the balance sheet
	(In thousands)
Fixed maturities:
Bonds:
United States Government and government agencies and authorities	$	1,092,890		$	1,102,786		$	1,102,786
States, municipalities and political subdivisions		3,549,355			3,580,066			3,580,066
Foreign governments		149,443			150,327			150,327
Public utilities		-			-			-
All other corporate bonds		2,575,120			2,622,059			2,622,059

Total fixed maturities		7,366,808			7,455,238			7,455,238
Equity securities:
Common stocks:
Industrial, miscellaneous and all other		3,049			3,044			3,044

Total equity securities		3,049			3,044			3,044

Total investments	$	7,369,857		$	7,458,282		$	7,458,282

- Definition

This element represents the schedule applicable to insurance companies summarizing investments held as of the most recent audited balance sheet. At a minimum, such summary is by three major categories of investments including: (1) fixed maturities primarily consisting of bonds, including convertibles and bonds with warrants, and redeemable preferred stocks, (2) equity securities primarily consisting of common stocks and nonredeemable preferred stocks, and (3) other investments including mortgage loans on real estate, real estate held for investment, real estate acquired in satisfaction of debt, policy loans, other long-term investments, and short-term investments not otherwise categorized. The information provided with respect to each item within each category includes: (A) the original cost of equity securities and, as to fixed maturity securities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts, (B) fair value as of the reporting date, and (C) the amount at which the item within each category is shown in the statement of financial position; with respect to (C), if the amount at which shown in the statement of financial position is different from the items original [amortized] cost or fair value, an explanation of the difference may be included herein.

+ References+ Details

Schedule II Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2010

Schedule II - Condensed Financial Information of Registrant [Abstract]

Schedule II - Condensed Financial Information of Registrant [Text Block]

SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED BALANCE SHEETS

PARENT COMPANY ONLY

December 31, 2010 and December 31, 2009

	2010			2009
	(In thousands of dollars)
ASSETS

Fixed maturities (amortized cost, 2010-$844,383; 2009-$5,220)	$	832,484		$	5,280
Cash and cash equivalents		58,380			79,160
Investment in subsidiaries, at equity in net assets		1,786,522			1,897,427
Accounts receivable - affiliates		686			1,344
Income taxes receivable		21,412			27,742
Accrued investment income		5,610			136
Other assets		16,530			9,799
Total assets	$	2,721,624		$	2,020,888

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Senior notes	$	376,329		$	377,098
Convertible senior notes		345,000			-
Convertible junior debentures		315,626			291,785
Accrued interest		15,609			49,404
Other liabilities		5			20
Total liabilities		1,052,569			718,307

Shareholders' equity
Common stock, $1 par value, shares authorized 460,000,000; shares issued 2010 - 205,046,780; 2009 - 130,163,060; shares outstanding 2010 - 200,449,588 ; 2009 - 125,101,057		205,047			130,163
Paid-in capital		1,138,942			443,294
Treasury stock (shares at cost, 2010 - 4,597,192; 2009 - 5,062,003)		(222,632	)		(269,738	)
Accumulated other comprehensive income, net of tax		22,136			74,155
Retained earnings		525,562			924,707
Total shareholders' equity		1,669,055			1,302,581
Total liabilities and shareholders' equity	$	2,721,624		$	2,020,888

See accompanying supplementary notes to Parent Company condensed financial statements.

SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF OPERATIONS

PARENT COMPANY ONLY

For the Years Ended December 31, 2010, 2009 and 2008

	2010			2009			2008
	(In thousands of dollars)
Revenues:
Equity in undistributed net loss of subsidiaries	$	(270,844	)	$	(1,326,671	)	$	(617,813	)
Dividends received from subsidiaries		-			-			170,000
Investment income, net of expenses		5,573			1,026			10,136
Realized investment gains (losses), net		163			(38	)		113
Other income		-			27,378			1,740

Total revenues (losses)		(265,108	)		(1,298,305	)		(435,824	)

Expenses:
Operating expenses		2,116			350			515
Interest expense		98,589			89,266			81,074

Total expenses		100,705			89,616			81,589

Loss before tax		(365,813	)		(1,387,921	)		(517,413	)

(Credit) provision for income tax		(2,078	)		(65,644	)		7,942

Net loss		(363,735	)		(1,322,277	)		(525,355	)

Other comprehensive (loss) income, net		(52,019	)		180,944			(177,464	)

Comprehensive loss	$	(415,754	)	$	(1,141,333	)	$	(702,819	)

See accompanying supplementary notes to Parent Company condensed financial statements.

SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF CASH FLOWS

PARENT COMPANY ONLY

For the Years Ended December 31, 2010, 2009 and 2008

	2010			2009			2008
	(In thousands of dollars)
Cash flows from operating activities:
Net loss	$	(363,735	)	$	(1,322,277	)	$	(525,355	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Equity in undistributed net loss of subsidiaries		270,844			1,326,671			617,813
Decrease (increase) in accounts receivable - affiliates		658			(41	)		496
Decrease (increase) in income taxes receivable		6,330			(54,755	)		37,858
(Increase) decrease in accrued investment income		(5,474	)		267			560
(Decrease) increase in accrued interest		(33,795	)		33,286			7,882
Other		40,638			1,842			(16,480	)
Net cash (used in) provided by operating activities		(84,534	)		(15,007	)		122,774

Cash flows from investing activities:
Transactions with subsidiaries		(200,000	)		(1,050	)		(745,784	)
Purchase of fixed maturities		(977,408	)		(6,618	)		(37,200	)
Sale of fixed maturities		135,413			2,336			299,038
Net cash used in investing activities		(1,041,995	)		(5,332	)		(483,946	)

Cash flows from financing activities:
Net proceeds from convertible senior notes		334,373			-			-
Repayment of long-term debt		(1,000	)		(94,352	)		-
Common stock shares issued		772,376			-			75,758
Dividends paid to shareholders		-			-			(8,159	)
Repayment of note payable		-			(200,000	)		(100,000	)
Net proceeds from convertible debentures		-			-			377,199
Proceeds from reissuance of treasury stock		-			-			383,959
Net cash provided by (used in) financing activities		1,105,749			(294,352	)		728,757

Net (decrease) increase in cash and cash equivalents		(20,780	)		(314,691	)		367,585
Cash and cash equivalents at beginning of year		79,160			393,851			26,266
Cash and cash equivalents at end of period	$	58,380		$	79,160		$	393,851

See accompanying supplementary notes to Parent Company condensed financial statements.

PARENT COMPANY ONLY

SUPPLEMENTARY NOTES

Note A

The accompanying Parent Company financial statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements appearing in Item 8 of this annual report. Certain amounts in the 2008 financial statements have been retrospectively adjusted to reflect the adoption of a new accounting standard regarding convertible debt. See Note 4 – “New accounting policies” to our consolidated financial statements in Item 8.

Note B

The senior notes, convertible senior notes and convertible debentures, discussed in Note 8 – “Debt” to our consolidated financial statements in Item 8, are obligations of MGIC Investment Corporation, our holding company, and not of its subsidiaries. We are a holding company and the payment of dividends from our insurance subsidiaries, which prior to raising capital in the public markets in 2008 and 2010 had been the principal source of our holding company cash inflow, is restricted by insurance regulation. MGIC is the principal source of dividend-paying capacity. In 2009 and 2010, MGIC has not paid any dividends to our holding company. Through 2011, MGIC and our other insurance subsidiaries cannot pay any dividends to our holding company without approval from the OCI.

In 2008, we paid cash dividends of $8.2 million, or $0.075 per share. In the fourth quarter of 2008, we suspended the payment of dividends.

- Definition

This element can be used to encapsulate the entire condensed financial information disclosure, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References+ Details

Schedule IV Reinsurance

12 Months Ended

Dec. 31, 2010

Schedule IV - Reinsurance [Abstract]

Schedule IV - Reinsurance [Text Block]

MGIC INVESTMENT CORPORATION

SCHEDULE IV - REINSURANCE

MORTGAGE INSURANCE PREMIUMS EARNED

Years Ended December 31, 2010, 2009 and 2008

	Gross Amount			Ceded to Other Companies		Assumed From Other Companies		Net Amount		Percentage of Amount Assumed to Net
	(In thousands)
Year ended December 31,
2010		$	1,236,949		71,293		3,091		1,168,747		0.3	%

2009		$	1,406,977		107,975		3,339		1,302,341		0.3	%

2008		$	1,601,610		212,018		3,588		1,393,180		0.3	%