Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2015	Oct. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	MGIC INVESTMENT CORP
Entity Central Index Key	0000876437
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		339,656,530
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015

CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2015	Dec. 31, 2014
Securities, available-for-sale, at fair value:
Fixed maturities (amortized cost, 2015 - $4,598,347; 2014 - $4,602,514)	$ 4,588,331	$ 4,609,614
Equity securities	5,634	3,055
Total investment portfolio	4,593,965	4,612,669
Cash and cash equivalents	384,536	197,882
Restricted cash and cash equivalents	0	17,212
Accrued investment income	36,861	30,518
Prepaid reinsurance premiums	187	47,623
Reinsurance recoverable on loss reserves	38,748	57,841
Reinsurance recoverable on paid losses	4,275	6,424
Premiums receivable	51,579	57,442
Home office and equipment, net	29,265	28,693
Deferred insurance policy acquisition costs	14,997	12,240
Profit commission receivable	0	91,500
Deferred income taxes, net	758,851	0
Other assets	94,886	106,390
Total assets	6,008,150	5,266,434
Liabilities:
Loss reserves	1,979,943	2,396,807
Premium deficiency reserve	0	23,751
Unearned premiums	265,119	203,414
Senior notes	61,953	61,918
Convertible senior notes	845,000	845,000
Convertible junior debentures	389,522	389,522
Other liabilities	318,094	309,119
Total liabilities	3,859,631	4,229,531
Contingencies
Shareholders' equity:
Common stock (one dollar par value, shares authorized 1,000,000; shares issued 2015 - 340,091; 2014 - 340,047; shares outstanding 2015 - 339,651; 2014 - 338,560)	340,091	340,047
Paid-in capital	1,667,307	1,663,592
Treasury stock (shares at cost 2015 - 440; 2014 - 1,487)	(3,362)	(32,937)
Accumulated other comprehensive loss, net of tax	(43,147)	(81,341)
Retained earnings (deficit)	187,630	(852,458)
Total shareholders' equity	2,148,519	1,036,903
Total liabilities and shareholders' equity	$ 6,008,150	$ 5,266,434

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Fixed maturities, amortized cost	$ 4,598,347	$ 4,602,514
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	340,091,000	340,047,000
Common stock, shares outstanding (in shares)	339,651,000	338,560,000
Treasury stock, shares at cost (in shares)	440,000	1,487,000

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Premiums written:
Direct	$ 273,803	$ 255,041	$ 800,619	$ 740,479
Assumed	285	400	931	1,281
Ceded	43,897	(32,536)	(22,334)	(87,450)
Net premiums written	317,985	222,905	779,216	654,310
Increase in unearned premiums, net	(78,751)	(13,870)	(109,186)	(23,528)
Net premiums earned	239,234	209,035	670,030	630,782
Investment income, net of expenses	25,939	22,355	75,815	63,691
Net realized investment gains (losses):
Total other-than-temporary impairment losses	0	0	0	0
Portion of losses recognized in comprehensive income, before taxes	0	0	0	0
Net impairment losses recognized in earnings	0	0	0	0
Other realized investment gains	640	632	27,133	923
Net realized investment gains	640	632	27,133	923
Other revenue	3,698	3,093	9,877	6,037
Total revenues	269,511	235,115	782,855	701,433
Losses and expenses:
Losses incurred, net	76,458	115,254	248,481	379,003
Change in premium deficiency reserve	0	(6,744)	(23,751)	(19,750)
Amortization of deferred policy acquisition costs	2,368	2,096	6,191	5,191
Other underwriting and operating expenses, net	46,075	34,882	121,152	105,101
Interest expense	17,362	17,361	52,097	52,274
Total losses and expenses	142,263	162,849	404,170	521,819
Income before tax	127,248	72,266	378,685	179,614
(Benefit from) provision for income taxes	(695,604)	249	(690,897)	2,093
Net income	$ 822,852	$ 72,017	$ 1,069,582	$ 177,521
Income per share
Basic (in dollars per share)	$ 2.42	$ 0.21	$ 3.15	$ 0.52
Diluted (in dollars per share)	$ 1.78	$ 0.18	$ 2.35	$ 0.45
Weighted average shares outstanding - basic and diluted
Weighted average common shares outstanding - basic (in shares)	339,701	338,626	339,504	338,488
Weighted average common shares outstanding - diluted (in shares)	468,149	413,576	468,097	413,473

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 822,852	$ 72,017	$ 1,069,582	$ 177,521
Other comprehensive (loss) income, net of tax:
Change in unrealized investment gains and losses	95,295	(17,301)	51,212	66,798
Benefit plan adjustments	(7,355)	(1,732)	(8,447)	(5,198)
Foreign currency translation adjustment	(2,947)	(2,490)	(4,571)	(650)
Other comprehensive income (loss), net of tax	84,993	(21,523)	38,194	60,950
Comprehensive income	$ 907,845	$ 50,494	$ 1,107,776	$ 238,471

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (USD $) In Thousands, unless otherwise specified	Total	Common stock	Paid-in capital	Treasury stock	Accumulated other comprehensive income (loss)	Retained earnings (deficit)
Balance, beginning of period at Dec. 31, 2013		$ 340,047	$ 1,661,269	$ (64,435)	$ (117,726)	$ (1,074,617)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	177,521					177,521
Net common stock issued under share-based compensation plans		0	0
Reissuance of treasury stock, net			(6,680)	31,498		(29,791)
Tax benefit from share-based compensation			0
Equity compensation			6,472
Other comprehensive income	60,950				60,950
Balance, end of period at Sep. 30, 2014	984,508	340,047	1,661,061	(32,937)	(56,776)	(926,887)
Balance, beginning of period at Dec. 31, 2014	1,036,903	340,047	1,663,592	(32,937)	(81,341)	(852,458)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,069,582					1,069,582
Net common stock issued under share-based compensation plans		44	(446)
Reissuance of treasury stock, net			(6,894)	29,575		(29,494)
Tax benefit from share-based compensation			2,113
Equity compensation			8,942
Other comprehensive income	38,194				38,194
Balance, end of period at Sep. 30, 2015	$ 2,148,519	$ 340,091	$ 1,667,307	$ (3,362)	$ (43,147)	$ 187,630

- Definition

This element represents the amount of recognized equity-based compensation during the period, that is, the amount recognized as expense in the income statement (or as asset if compensation is capitalized). Alternate captions include the words "stock-based compensation".

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- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Value of stock (or other type of equity) issued during the period as a result of any equity-based compensation plan other than an employee stock ownership plan (ESOP), net of stock value of such awards forfeited. Stock issued could result from the issuance of restricted stock, the exercise of stock options, stock issued under employee stock purchase plans, and/or other employee benefit plans.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 1,069,582	$ 177,521
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	38,361	38,229
Deferred tax (benefit) expense	(698,177)	336
Realized investment gains, net	(27,133)	(923)
Loss on repurchases of senior notes	0	837
Excess tax benefits related to share-based compensation	(2,113)	0
Other	(21,795)	19,845
Change in certain assets and liabilities:
Accrued investment income	(6,343)	1,177
Prepaid insurance premium	47,436	(7,987)
Reinsurance recoverable on loss reserves	19,093	6,187
Reinsurance recoverable on paid losses	2,149	3,975
Premium receivable	5,863	1,971
Deferred insurance policy acquisition costs	(2,757)	(1,929)
Profit commission receivable	91,500	(66,584)
Real estate	2,574	(3,285)
Loss reserves	(416,864)	(533,819)
Premium deficiency reserve	(23,751)	(19,750)
Unearned premiums	61,705	31,513
Return premium accrual	(6,400)	16,200
Income taxes payable - current	2,101	(1,180)
Net cash provided by (used in) operating activities	135,031	(337,666)
Purchases of investments:
Fixed maturities	(1,970,402)	(1,549,883)
Equity securities	(2,593)	(59)
Proceeds from sales of fixed maturities	1,527,680	902,660
Proceeds from maturity of fixed maturities	432,328	914,465
Net increase in payable for securities	48,120	7,245
Net decrease in restricted cash	17,212	233
Additions to property and equipment	(2,835)	(3,998)
Net cash provided by investing activities	49,510	270,663
Cash flows from financing activities:
Repayment of long-term debt	0	(21,767)
Excess tax benefits related to share-based compensation	2,113	0
Net cash provided by (used in) financing activities	2,113	(21,767)
Net increase (decrease) in cash and cash equivalents	186,654	(88,770)
Cash and cash equivalents at beginning of period	197,882	332,692
Cash and cash equivalents at end of period	$ 384,536	$ 243,922

Nature of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business and Basis of Presentation

MGIC Investment Corporation is a holding company which, through Mortgage Guaranty Insurance Corporation ("MGIC"), MGIC Indemnity Corporation (“MIC”) 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 to protect against loss from defaults on low down payment residential mortgage loans.

The accompanying unaudited consolidated financial statements of MGIC Investment Corporation and its wholly-owned subsidiaries have been prepared in accordance with the instructions to Form 10-Q as prescribed by the Securities and Exchange Commission (“SEC”) for interim reporting and do not include all of the other information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2014 included in our Annual Report on Form 10-K. As used below, “we,” “our” and “us” refer to MGIC Investment Corporation’s consolidated operations or to MGIC Investment Corporation, as the context requires.

In the opinion of management the accompanying financial statements include all adjustments, consisting primarily of normal recurring accruals, necessary to fairly state our financial position and results of operations for the periods indicated. The results of operations for the interim period may not be indicative of the results that may be expected for the year ending December 31, 2015.

Capital - GSEs

Since 2008, substantially all of our insurance written has been for loans sold to Fannie Mae and Freddie Mac (the “GSEs”). In April 2015, the GSEs each released revised private mortgage insurer eligibility requirements (the “PMIERs”) that become effective December 31, 2015. The PMIERs include revised financial requirements for mortgage insurers under which a mortgage insurer’s “Available Assets” (generally only the most liquid assets of an insurer) must meet or exceed “Minimum Required Assets” (which are based on an insurer’s book and are calculated from tables of factors with several risk dimensions and are subject to a floor amount).

Based on our interpretation of the PMIERs, we expect that MGIC will be in compliance with the PMIERs when they become effective. This expectation reflects, among other things, that the GSEs have allowed full credit under the PMIERs for the risk ceded under our restructured quota share reinsurance transaction. In the third quarter of 2015, the restructured transaction became effective after being approved by each of the GSEs and the Office of the Commissioner of Insurance of the State of Wisconsin (“OCI”). The GSEs’ ongoing approval of the transaction is subject to several conditions and the transaction will be reviewed under the PMIERs at least annually by the GSEs.

We expect to increase our Available Assets in the future by repatriating to MGIC certain assets of MGIC's MIC subsidiary. If additional Available Assets are required in the future, we believe that a portion of our holding company’s cash and investments may be available for future contribution to MGIC.

Factors that may negatively impact MGIC’s ability to comply with the PMIERs after their effective date include the following:


•	The GSEs may reduce the amount of credit they allow under the PMIERs for the risk ceded under our quota share reinsurance transaction.


•	We may not obtain regulatory authorization to repatriate assets from MIC to MGIC to the extent we are assuming because regulators project higher losses than we project or require a level of capital be maintained in MIC higher than we are assuming.


•	MGIC may not receive additional capital contributions from our holding company due to competing demands on the holding company resources, including for repayment of debt.


•	Our future operating results may be negatively impacted by the matters discussed in the rest of these footnotes. Such matters could decrease our revenues, increase our losses or require the use of assets, thereby creating a shortfall in Available Assets.

There can be no assurance that the GSEs will not make the PMIERs more onerous in the future; in this regard, the PMIERs provide that the tables of factors that determine Minimum Required Assets will be updated every two years and may be updated more frequently to reflect changes in macroeconomic conditions or loan performance. The GSEs will provide notice 180 days prior to the effective date of table updates. In addition, the GSEs may amend the PMIERs at any time. If MGIC ceases to be eligible to insure loans purchased by one or both of the GSEs, it would significantly reduce the volume of our new business writings.

While on an overall basis, the amount of Available Assets we must hold in order to continue to insure GSE loans has increased under the PMIERs over what state regulation currently provides, our reinsurance transaction mitigates the negative effect of the PMIERs on our returns. In this regard, see the first bullet point above.

See additional disclosure regarding statutory capital in Note 16 – “Statutory Capital.”

Reclassifications

Certain reclassifications have been made in the accompanying financial statements to 2014 amounts to conform to 2015 presentation. For the nine months ended September 30, 2014 cash used for additions to property and equipment was previously presented as “Other” within cash flows from operating activities and is presented separately as “Additions to property and equipment” within cash flows from investing activities as of September 30, 2015. This revision is not material to amounts reported or disclosed by us in prior periods.

Restricted cash and cash equivalents

During the second quarter of 2013, approximately $60.3 million was placed in escrow in connection with the two agreements we entered into to resolve our dispute with Countrywide Home Loans, Inc. (“CHL”) and its affiliate, Bank of America, N.A., as successor to Countrywide Home Loans Servicing LP (“BANA” and collectively with CHL, “Countrywide”) regarding rescissions. In the fourth quarter of 2013, approximately $42.9 million was released from escrow in connection with the BANA agreement. In the first quarter of 2015, the remaining escrow funds were disbursed to us pursuant to the amended and restated settlement agreement and release entered into with CHL on March 2, 2015. See additional discussion of these settlement agreements in Note 5 – “Litigation and Contingencies.”

Subsequent events

We have considered subsequent events through the date of this filing. As discussed in Note 3 – "Debt" we have repaid our Senior Notes that matured on November 1, 2015 in the amount of $61.9 million.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

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New Accounting Pronouncements	9 Months Ended
New Accounting Pronouncements	Sep. 30, 2015
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, our fee income related to contract underwriting and other fee-based services provided to lenders will be subject to this guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The guidance is effective for reporting periods beginning after December 15, 2017 with early adoption for reporting periods beginning after December 15, 2016 permitted. We are currently evaluating the impact of this update, but it is not expected to have a significant impact on our consolidated financial statements and disclosures. Presentation of Debt Issuance Costs In April 2015, the FASB amended existing guidance related to the presentation of debt issuance costs. The new standard requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on our consolidated financial statements. Disclosures about Short-Duration Contracts In May 2015, the FASB issued guidance requiring expanded disclosures for insurance entities that issue short-duration contracts. The expanded disclosures are designed to provide additional insight into an insurance entity's ability to underwrite and anticipate costs associated with claims. The disclosures include information about incurred and paid claims development by accident year, on a net of reinsurance basis, for the number of years claims incurred typically remain outstanding, not to exceed ten years. Each period presented in the disclosure about claims development that precedes the current reporting periods is considered supplementary information. The expanded disclosures also include more transparent information about significant changes in methodologies and assumptions used to estimate claims, and the timing, frequency, and severity of claims. The disclosures required by this update are effective for annual periods beginning after December 31, 2015, and interim periods within annual periods beginning after December 31, 2016, and is to be applied retrospectively. We are evaluating the impact, if any, of the new disclosure requirements.

Debt

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Debt

Long-term debt as of September 30, 2015 and December 31, 2014 consists of the following obligations.



	September 30, 2015			December 31, 2014
	(In millions)
Senior Notes, interest at 5.375% per annum, due November 2015	$	61.9		$	61.9
Convertible Senior Notes, interest at 5% per annum, due May 2017 (1)	345.0			345.0
Convertible Senior Notes, interest at 2% per annum, due April 2020 (2) (3)	500.0			500.0
Convertible Junior Subordinated Debentures, interest at 9% per annum, due April 2063 (4)	389.5			389.5
Total debt	1,296.4			1,296.4
Less current portion of debt	(61.9		)	(61.9		)
Total long-term debt	$	1,234.5		$	1,234.5


(1)	Convertible at any time prior to maturity at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.4186 shares per $1,000 principal amount, representing an initial conversion price of approximately $13.44 per share.

(2)

Prior to January 1, 2020, the 2% Convertible Senior Notes are convertible only upon satisfaction of one or more conditions. One such condition is that during any calendar quarter commencing after March 31, 2014, the last reported sale price of our common stock for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter be greater than or equal to 130% of the applicable conversion price on each applicable trading day. The 2% Notes are convertible at an initial conversion rate, which is subject to adjustment, of 143.8332 shares per $1,000 principal amount, representing an initial conversion price of approximately $6.95 per share. 130% of such conversion price is $9.03. On or after January 1, 2020, holders may convert their notes irrespective of satisfaction of the conditions. Our common stock price was greater than or equal to 130% of the applicable conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, September 30, 2015.

(3)

Prior to April 10, 2017, the notes will not be redeemable. On any business day on or after April 10, 2017 we may redeem for cash all or part of the notes, at our option, at a redemption rate equal to 100% of the principal amount of the notes 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 notes for each of at least 20 of the 30 consecutive trading days preceding notice of the redemption.

(4)

Convertible at any time prior to maturity at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.0741 shares per $1,000 principal amount, representing 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 lieu of issuing shares of common stock upon conversion of the debentures, we may, at our option, make a cash payment to converting holders for all or some of the shares of our common stock otherwise issuable upon conversion.

Interest payments on our existing debt obligations appear below.



	Nine Months Ended September 30,
	2015		2014
	(In millions)
Senior Notes, interest at 5.375% per annum, due November 2015	$	1.7	$	1.7
Convertible Senior Notes, interest at 5% per annum, due May 2017	8.6		8.6
Convertible Senior Notes, interest at 2% per annum, due April 2020	5.0		5.0
Convertible Junior Subordinated Debentures, interest at 9% per annum, due April 2063	17.5		17.5
Total interest payments	$	32.8	$	32.8

The Senior Notes, Convertible Senior Notes and Convertible Junior Subordinated Debentures are obligations of our holding company, MGIC Investment Corporation, and not of its subsidiaries. We repaid our Senior Notes on November 2, 2015 in the amount of $61.9 million with MGIC Investment Corporation cash on hand. The repayment of our Senior Notes had no significant impact on our liquidity or financial position. As of September 30, 2015, we had approximately $469 million in cash and investments at our holding company. The net unrealized losses on our holding company investment portfolio were approximately $0.4 million as of September 30, 2015. The modified duration of the holding company investment portfolio, excluding cash and cash equivalents, was 2.9 years at September 30, 2015.

Reinsurance

9 Months Ended

Sep. 30, 2015

Reinsurance Disclosures [Abstract]

Reinsurance

Effective July 1, 2015, we settled our 2013 quota share reinsurance agreement ("2013 QSR Transaction") by commutation. The settlement included any premiums, losses, and profit commission. The commutation resulted in an increase in net premiums written and earned of $69.4 million and $11.6 million, respectively, and a decrease in ceding commissions of $11.6 million in the third quarter of 2015. Receipt of our profit commission of $142.5 million, in addition to other premium and loss amounts, was also completed as part of the settlement.

Effective July 1, 2015, we entered into a quota share reinsurance agreement ("2015 QSR Transaction") with a group of unaffiliated reinsurers that are the same as our 2013 QSR Transaction. Each of the reinsurers has an insurer financial strength rating of A- or better by Standard and Poor’s Rating Services, A.M. Best or both. The 2015 QSR Transaction will provide coverage on policies that were in the 2013 QSR Transaction with some exclusions; additional qualifying in force policies as of the agreement effective date which either had no history of defaults, or where a single default has been cured for twelve or more months at the agreement effective date; and all qualifying new insurance written through December 31, 2016. The agreement will provide coverage on losses incurred on or after the effective date with renewal premium through December 31, 2024, at which time the agreement expires. The 2015 QSR Transaction increases the amount of our insurance in force covered by reinsurance and will result in an increase in the amount of premiums and losses ceded. Early termination of the agreement can be elected by us effective December 31, 2018 for a fee, or under specified scenarios for no fee upon prior written notice. Further, at our sole discretion we may elect to terminate the agreement if we will receive less than 90% of the full PMIERs credit amount for the risk ceded under the 2015 QSR Transaction in any required calculation period. The structure of the 2015 QSR Transaction is a 30% quota share for all policies covered, with a 20% ceding commission as well as a profit commission. Generally, under the 2015 QSR Transaction, we will receive a profit commission provided that the loss ratio on the loans covered under the agreement remains below 60%.

A summary of our quota share reinsurance agreements, excluding captive agreements, appears below.



	2013 QSR Transaction
	Three Months Ended September 30,					Nine months ended September 30,
	2015 (1)			2014		2015 (1)			2014
	(In thousands)
Ceded premiums written, net of profit commission	$	(69,410	)	$	27,725	$	(11,355	)	$	72,414

Ceded premiums earned, net of profit commission	(11,568		)	23,736		35,999			64,330

Ceded losses incurred	—			4,689		6,060			10,347



Ceding commissions (2)	(11,568	)	9,922	10,235	27,800

Ceded unearned premiums	—		39,946	—	43,935

Profit commission	11,568		21,887	62,525	66,584

(1) The three and nine months ended September 30, 2015 include the non-recurring impact of commuting our 2013 QSR Transaction in the third quarter. The commutation had no impact on ceded losses incurred.

(2) Ceding commissions are reported within Other underwriting and operating expenses, net on the consolidated statements of operations.



	2015 QSR Transaction
	Three and Nine Months Ended September 30,
	2015
	(In thousands)
Ceded premiums written, net of profit commission (1)	$	22,626

Ceded premiums earned, net of profit commission (1)	22,626

Ceded losses incurred	4,236

Ceding commissions (2)	9,195

Profit commission	23,347

(1) As of July 1, 2015 premiums are ceded on an earned and received basis as defined in our 2015 QSR Transaction.

(2) Ceding commissions are reported within Other underwriting and operating expenses, net on the consolidated statements of

operations.

Under the terms of 2015 QSR Transaction, reinsurance premiums, ceding commission and profit commission are settled net on a quarterly basis. The reinsurance premium due after deducting the related ceding commission and profit commission is reported within "Other liabilities" on the consolidated balance sheet. For periods ending June 30, 2015 and prior, the profit commission accrued has been reported separately on the consolidated balance sheet. As of December 31, 2014, we had accrued a profit commission receivable of $91.5 million.

In the past, MGIC also obtained captive reinsurance. In a captive reinsurance arrangement, the reinsurer is affiliated with the lender for whom MGIC provides mortgage insurance. As part of our settlement with the Consumer Financial Protection Bureau (“CFPB”) in 2013 and with the Minnesota Department of Commerce (the “MN Department”) in June 2015, discussed in Note 5 – “Litigation and Contingencies” MGIC has agreed to not enter into any new captive reinsurance agreement or reinsure any new loans under any existing captive reinsurance agreement for a period of ten years subsequent to the respective settlements. In accordance with the CFPB settlement, all of our active captive arrangements were placed into run-off. In addition, at the time PMIERs become effective on December 31, 2015 the GSEs will not approve any future reinsurance or risk sharing transaction with a mortgage enterprise or an affiliate of a mortgage enterprise.

Captive agreements were generally written on an annual book of business and each captive reinsurer is required to maintain a separate trust account to support its combined reinsured risk on all annual books. MGIC is the sole beneficiary of the trusts, and the trust accounts are made up of capital deposits by the captive reinsurers, premium deposits by MGIC, and investment income earned. These amounts are held in the trust account and are available to pay reinsured losses. The reinsurance recoverable on loss reserves related to captive agreements was $34 million at September 30, 2015 which was supported by $159 million of trust assets, while at December 31, 2014, the reinsurance recoverable on loss reserves related to captive agreements was $45 million, which was supported by $198 million of trust assets.

- Definition

The entire disclosure pertaining to the existence, magnitude and information about insurance that has been ceded to or assumed from another insurance company, including the methodologies and assumptions used in determining recorded amounts.

+ References+ Details

Litigation and Contingencies	9 Months Ended
Litigation and Contingencies	Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Litigation and Contingencies	Litigation and Contingencies Before paying a claim, we review the loan and servicing files to determine the appropriateness of the claim amount. All of our insurance policies provide that we can reduce or deny a claim if the servicer did not comply with its obligations under our insurance policy, including the requirement to mitigate our loss by performing reasonable loss mitigation efforts or, for example, diligently pursuing a foreclosure or bankruptcy relief in a timely manner. We call such reduction of claims submitted to us “curtailments.” In 2014 and the first three quarters of 2015, curtailments reduced our average claim paid by approximately 6.7% and 7.0%, respectively. After we pay a claim, servicers and insureds sometimes object to our curtailments and other adjustments. We review these objections if they are sent to us within 90 days after the claim was paid. When reviewing the loan file associated with a claim, we may determine that we have the right to rescind coverage on the loan. (In our SEC reports, we refer to insurance rescissions and denials of claims collectively as "rescissions" and variations of that term.) In recent quarters, approximately 5% of claims received in a quarter have been resolved by rescissions, down from the peak of approximately 28% in the first half of 2009. We estimate rescissions mitigated our incurred losses by approximately $2.5 billion in 2009 and $0.2 billion in 2010 and have not significantly mitigated our incurred losses since then. Our loss reserving methodology incorporates our estimates of future rescissions and reversals of rescissions. Historically, reversals of rescissions have been immaterial. A variance between ultimate actual rescission and reversal rates and our estimates, as a result of the outcome of litigation, settlements or other factors, could materially affect our losses. If the insured disputes our right to rescind coverage, we generally engage in discussions in an attempt to settle the dispute. As part of those discussions, we may voluntarily suspend rescissions we believe may be part of a settlement. Certain settlements require GSE approval. The GSEs consented to two settlement agreements we entered into with Countrywide Home Loans, Inc. (“CHL”) and its affiliate, Bank of America, N.A., as successor to Countrywide Home Loans Servicing LP (“BANA” and collectively with CHL, “Countrywide”), but there is no guarantee they will approve others. We have reached and implemented settlement agreements that do not require GSE approval, but they have not been material in the aggregate. If we are unable to reach a settlement, the outcome of a dispute ultimately would be determined by legal proceedings. Under our policies in effect prior to October 1, 2014, 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, and under our master policy effective October 1, 2014, such proceedings may be brought up to two years from the date of the notice of rescission. In a few jurisdictions there is a longer time to bring such proceedings. Until a liability associated with a settlement agreement or litigation becomes probable and can be reasonably estimated, we consider our claim payment or rescission resolved for financial reporting purposes even though discussions and legal proceedings may have been initiated and are ongoing. Under ASC 450-20, an estimated loss from such discussions and proceedings is accrued for only if we determine that the loss is probable and can be reasonably estimated. In December 2009, we entered into legal proceedings with Countrywide in which Countrywide alleged that MGIC denied valid mortgage insurance claims. In April 2013, MGIC entered into separate settlement agreements with CHL and BANA, pursuant to which the parties agreed to settle the Countrywide litigation as it relates to MGIC’s rescission practices (as amended from time to time, the “Agreements”). The Agreement with BANA covers loans purchased by the GSEs. That original Agreement was implemented beginning in November 2013 and we resolved all related suspended rescissions in November and December 2013 by paying the associated claim or processing the rescission. On March 2, 2015, the parties to the Agreement with CHL amended and restated that Agreement. The Agreement with CHL covers loans that were purchased by non-GSE investors, including securitization trusts. The original Agreement addressed rescission and denial rights; the amended and restated Agreement also addressed curtailment rights. Implementation of that Agreement occurred in June 2015 with respect to loans for which consent to the Agreement was received. The estimated impact of the Agreements has been recorded in our financial statements. The pending arbitration proceedings concerning the loans covered by the Agreements have been dismissed, the mutual releases regarding loans for which consent was received have become effective and the litigation between the parties regarding loans covered by the Agreements has been dismissed. Consent was received for approximately 89% of the dollar amount of exposure on loans covered by the Agreement with CHL; the holders of loans that did not consent retain their rights to assert claims with respect to such loans. The estimated impact that we have recorded for probable settlements, including those that have been implemented, is our best estimate of our loss from these matters. We estimate that as of September 30, 2015, the maximum exposure above the best estimate provision we recorded is $124.9 million. If we are not able to implement settlements we consider probable that have not yet been implemented, we intend to defend MGIC vigorously against any related legal proceedings. The flow policies at issue with Countrywide are in the same form as the flow policies that we used with all of our customers during the period covered by the Agreements, 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. In addition to the discussions and/or proceedings for which we have recorded a loss, we are involved in other discussions and/or proceedings with insureds with respect to our claims paying practices. In addition, holders of loans covered by our previously disclosed and implemented settlement agreement with CHL that did not consent to that agreement (approximately 11% of the dollar amount of exposure under that agreement) may bring legal proceedings against MGIC with respect to such loans. Although it is reasonably possible that when these matters are resolved we will not prevail in all cases, we are unable to make a reasonable estimate or range of estimates of the potential liability. We estimate the maximum exposure associated with these matters to be approximately $202.5 million, although we believe we will ultimately resolve these matters for significantly less than this amount. The estimates of our maximum exposure referred to above do not include interest or consequential or exemplary damages. Consumers continue to bring lawsuits against home mortgage lenders and settlement service providers. 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’s settlement of class action litigation against it under RESPA became final 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. Beginning in December 2011, MGIC, together with various mortgage lenders and other mortgage insurers, was named as a defendant in twelve lawsuits, alleged to be class actions, filed in various U.S. District Courts. The complaints in all of the cases alleged various causes of action related to the captive mortgage reinsurance arrangements of the mortgage lenders, including that the lenders’ captive reinsurers received excessive premiums in relation to the risk assumed by those captives, thereby violating RESPA. As of the end of the first quarter of 2015, MGIC has been dismissed from all twelve cases. There can be no assurance that we will not be subject to further litigation under RESPA (or FCRA) or that the outcome of any such litigation would not have a material adverse effect on us. In 2013, the U.S. District Court for the Southern District of Florida approved a settlement with the CFPB that resolved a federal investigation of MGIC’s participation in captive reinsurance arrangements in the mortgage insurance industry. The settlement concluded the investigation with respect to MGIC without the CFPB or the court making any findings of wrongdoing. As part of the settlement, MGIC agreed that it would not enter into any new captive reinsurance agreement or reinsure any new loans under any existing captive reinsurance agreement for a period of ten years. MGIC had voluntarily suspended most of its captive arrangements in 2008 in response to market conditions and GSE requests. In connection with the settlement, MGIC paid a civil penalty of $2.65 million and the court issued an injunction prohibiting MGIC from violating any provisions of RESPA. We received requests from the Minnesota Department of Commerce (the “MN Department”) beginning in February 2006 regarding captive mortgage reinsurance and certain other matters in response to which MGIC provided information on several occasions. In June 2015, MGIC executed a Consent Order with the MN Department that resolved the MN Department’s investigation of captive reinsurance matters without making any findings of wrongdoing. The Consent Order provided, among other things, that MGIC is prohibited from entering into any new captive reinsurance agreement or reinsuring any new loans under any existing captive reinsurance agreement for a period of ten years. We also received a request in June 2005 from the New York Department of Financial Services for information regarding captive mortgage reinsurance arrangements and other types of arrangements in which lenders receive compensation. Various regulators, including the CFPB, state insurance commissioners and state attorneys general may bring actions seeking various forms of relief in connection with alleged violations 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 practices are in conformity with applicable laws and regulations, it is not possible to predict the eventual scope, duration or outcome of any such reviews or investigations nor is it possible to predict their effect on us or the mortgage insurance industry. In December 2013, the U.S. Treasury Department’s Federal Insurance Office released a report that calls for federal standards and oversight for mortgage insurers to be developed and implemented. It is uncertain what form the standards and oversight will take and when they will become effective. 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. Through a non-insurance subsidiary, we utilize our underwriting skills to provide an outsourced underwriting service to our customers known as contract underwriting. As part of the contract underwriting activities, that subsidiary is responsible for the quality of the underwriting decisions in accordance with the terms of the contract underwriting agreements with customers. That subsidiary may be required to provide certain remedies to its customers if certain standards relating to the quality of our underwriting work are not met, and we have an established reserve for such future obligations. Claims for remedies may be made a number of years after the underwriting work was performed. Beginning in the second half of 2009, our subsidiary experienced an increase in claims for contract underwriting remedies, which continued throughout 2012. The underwriting remedy expense for 2014 and the first nine months of 2015 was approximately $4 million and $1 million, respectively, but may increase in the future. See Note 11 – “Income Taxes” for a description of federal income tax contingencies.

Earnings per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings per Share

Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common equivalent shares outstanding during the reporting period. We calculate diluted EPS using the treasury stock method for unvested restricted stock, and the if-converted method for convertible debt instruments. For unvested restricted stock, assumed proceeds under the treasury stock method would include unamortized compensation expense and windfall tax benefits or shortfalls. The determination of potentially issuable shares from our convertible debt instruments does not consider satisfaction of the conversion requirements and the shares are included in the determination of diluted EPS as of the beginning of the period, if dilutive. In addition, interest expense, net of tax, related to dilutive convertible debt instruments is added back to earnings in calculating diluted EPS.

The following table reconciles the numerators and denominators used to calculate basic and diluted EPS and also indicates the number of antidilutive securities.



	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(In thousands, except per share data and as otherwise noted)
Basic earnings per share:

Net income	$	822,852	$	72,017	$	1,069,582	$	177,521

Weighted average common shares outstanding	339,701		338,626		339,504		338,488

Basic income per share	$	2.42	$	0.21	$	3.15	$	0.52

Diluted earnings per share:

Net income	$	822,852	$	72,017	$	1,069,582	$	177,521

Interest expense, net of tax (1):
2% Convertible Senior Notes due 2020	1,982		3,049		5,946		9,148
5% Convertible Senior Notes due 2017	3,050		—		9,150		—
9% Convertible Junior Subordinated Debentures due 2063	5,697		—		17,090		—

Diluted income available to common shareholders	$	833,581	$	75,066	$	1,101,768	$	186,669



Weighted average shares - basic	339,701		338,626		339,504		338,488

Effect of dilutive securities:
Unvested restricted stock units	1,983		3,008		2,128		3,043
2% Convertible Senior Notes due 2020	71,942		71,942		71,942		71,942
5% Convertible Senior Notes due 2017	25,670		—		25,670		—
9% Convertible Junior Subordinated Debentures due 2063	28,853		—		28,853		—

Weighted average shares - diluted	468,149		413,576		468,097		413,473

Diluted income per share	$	1.78	$	0.18	$	2.35	$	0.45

Antidilutive securities (in millions)	—		54.5		—		54.5

(1) Due to the valuation allowance recorded against deferred tax assets, the three and nine months ended September 30, 2014 were not tax effected. The three and nine months ended September 30, 2015 have been tax effected at a rate of 35%.

- Definition

The entire disclosure for earnings per share.

+ References+ Details

Investments

9 Months Ended

Sep. 30, 2015

Investments [Abstract]

Investments

The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio at September 30, 2015 and December 31, 2014 are shown below.



September 30, 2015	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	$	104,419	$	2,287	$	(1,740	)	$	104,966
Obligations of U.S. states and political subdivisions	1,595,458		24,306		(7,243		)	1,612,521
Corporate debt securities	2,142,500		7,722		(29,650		)	2,120,572
Asset-backed securities	132,271		346		(80		)	132,537
Residential mortgage-backed securities	278,737		275		(7,541		)	271,471
Commercial mortgage-backed securities	253,143		1,048		(1,504		)	252,687
Collateralized loan obligations	61,342		—		(1,056		)	60,286
Debt securities issued by foreign sovereign governments	30,477		2,876		(62		)	33,291
Total debt securities	4,598,347		38,860		(48,876		)	4,588,331
Equity securities	5,595		52		(13		)	5,634

Total investment portfolio	$	4,603,942	$	38,912	$	(48,889	)	$	4,593,965



December 31, 2014	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	$	349,153	$	2,752	$	(5,130	)	$	346,775
Obligations of U.S. states and political subdivisions	844,942		12,961		(2,761		)	855,142
Corporate debt securities	2,418,991		16,325		(10,035		)	2,425,281
Asset-backed securities	286,260		535		(140		)	286,655
Residential mortgage-backed securities	329,983		254		(9,000		)	321,237
Commercial mortgage-backed securities	276,215		1,221		(2,158		)	275,278
Collateralized loan obligations	61,340		—		(1,264		)	60,076
Debt securities issued by foreign sovereign governments	35,630		3,540		—			39,170
Total debt securities	4,602,514		37,588		(30,488		)	4,609,614
Equity securities	3,003		61		(9		)	3,055

Total investment portfolio	$	4,605,517	$	37,649	$	(30,497	)	$	4,612,669


(1)	At September 30, 2015 and December 31, 2014, there were no other-than-temporary impairment losses recorded in other comprehensive income.

Our foreign investments primarily consist of the investment portfolio supporting our Australian domiciled subsidiary. This portfolio is comprised of Australian government and semi government securities, representing 86% of the market value of our foreign investments with the remainder invested in corporate securities and cash equivalents with allocations of 10% and 4%, respectively. Eighty-seven percent of the Australian portfolio is rated AAA or its equivalent, by one or more of Moody’s, Standard & Poor’s and Fitch Ratings, and the remaining 13% is rated AA or its equivalent.

The amortized cost and fair values of debt securities at September 30, 2015, 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 asset-backed and mortgage-backed securities and collateralized loan obligations provide for periodic payments throughout their lives, they are listed below in separate categories.



September 30, 2015	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	191,371	$	192,007
Due after one year through five years	1,611,819		1,622,178
Due after five years through ten years	1,130,625		1,113,217
Due after ten years	939,039		943,948

	$	3,872,854	$	3,871,350

Asset-backed securities	132,271		132,537
Residential mortgage-backed securities	278,737		271,471
Commercial mortgage-backed securities	253,143		252,687
Collateralized loan obligations	61,342		60,286

Total at September 30, 2015	$	4,598,347	$	4,588,331

At September 30, 2015 and December 31, 2014, the investment portfolio had gross unrealized losses of $48.9 million and $30.5 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
September 30, 2015	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	$	25,781	$	295	$	15,534	$	1,445	$	41,315	$	1,740
Obligations of U.S. states and political subdivisions	231,647		6,626		43,865		617		275,512		7,243
Corporate debt securities	1,045,477		27,190		140,995		2,460		1,186,472		29,650
Asset-backed securities	36,920		64		5,567		16		42,487		80
Residential mortgage-backed securities	39,870		414		201,435		7,127		241,305		7,541
Commercial mortgage-backed securities	74,403		698		79,411		806		153,814		1,504
Collateralized loan obligations	—		—		60,286		1,056		60,286		1,056
Foreign government securities	2,177		62		—		—		2,177		62
Equity securities	319		4		173		9		492		13

Total	$	1,456,594	$	35,353	$	547,266	$	13,536	$	2,003,860	$	48,889



	Less Than 12 Months				12 Months or Greater				Total
December 31, 2014	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	$	58,166	$	138	$	232,351	$	4,992	$	290,517	$	5,130
Obligations of U.S. states and political subdivisions	166,408		1,066		114,465		1,695		280,873		2,761
Corporate debt securities	816,555		5,259		243,208		4,776		1,059,763		10,035
Asset-backed securities	54,491		80		11,895		60		66,386		140
Residential mortgage-backed securities	24,168		34		263,002		8,966		287,170		9,000
Commercial mortgage-backed securities	89,301		810		110,652		1,348		199,953		2,158
Collateralized loan obligations	—		—		60,076		1,264		60,076		1,264
Equity securities	167		1		235		8		402		9

Total	$	1,209,256	$	7,388	$	1,035,884	$	23,109	$	2,245,140	$	30,497

The unrealized losses in all categories of our investments at September 30, 2015 and December 31, 2014 were primarily caused by the difference in interest rates at each respective period, compared to interest rates at the time of purchase. There were 369 and 423 securities in an unrealized loss position at September 30, 2015 and December 31, 2014, respectively.

During each of the three and nine months ended September 30, 2015 and 2014 there were no other-than-temporary impairments (“OTTI”) recognized. The net realized investment gains (losses) on the investment portfolio are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(In thousands)

Realized investment gains (losses) on investments:
Fixed maturities	$	638	$	629	$	27,123	$	755
Equity securities	2		3		10		168
Net realized investment gains	$	640	$	632	$	27,133	$	923



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands)

Realized investment gains (losses) on investments:
Gains on sales	$	720		$	1,161		$	28,711		$	3,273
Losses on sales	(80		)	(529		)	(1,578		)	(2,350		)
Net realized investment gains	$	640		$	632		$	27,133		$	923

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

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+ Details

Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

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 can access. Financial assets utilizing Level 1 inputs primarily include U.S. Treasury securities, equity securities, and Australian government and semi government securities.

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 obligations of U.S. government corporations and agencies and certain municipal and corporate bonds.

Level 3 – Valuations are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable or are par values for equity securities restricted in their ability to be redeemed or sold. 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 primarily include equity securities that can only be redeemed or sold at their par value and only to the security issuer and certain state premium tax credit investments. The state premium tax credit investments have an average maturity of less than 3 years, credit ratings of AA+ or higher, and their balance reflects their remaining scheduled payments discounted at an average annual rate of 7.2%. Our non-financial assets that are classified as Level 3 securities consist of real estate acquired through claim settlement. The fair value of real estate acquired is the lower of our acquisition cost or a percentage of the appraised value. The percentage applied to the appraised value is based upon our historical sales experience adjusted for current trends.

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 by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including data published in 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 by the independent pricing sources 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.

Fair value measurements for assets measured at fair value included the following as of September 30, 2015 and December 31, 2014:



September 30, 2015	Total 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)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	104,966	$	18,418	$	86,548	$	—
Obligations of U.S. states and political subdivisions	1,612,521		—		1,611,134		1,387
Corporate debt securities	2,120,572		—		2,120,572		—
Asset-backed securities	132,537		—		132,537		—
Residential mortgage-backed securities	271,471		—		271,471		—
Commercial mortgage-backed securities	252,687		—		252,687		—
Collateralized loan obligations	60,286		—		60,286		—
Debt securities issued by foreign sovereign governments	33,291		33,291		—		—
Total debt securities	4,588,331		51,709		4,535,235		1,387
Equity securities (1)	5,634		2,778		—		2,856
Total investment portfolio	$	4,593,965	$	54,487	$	4,535,235	$	4,243
Real estate acquired (2)	$	10,084	$	—	$	—	$	10,084



December 31, 2014	Total 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)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	346,775	$	188,824	$	157,951	$	—
Obligations of U.S. states and political subdivisions	855,142		—		853,296		1,846
Corporate debt securities	2,425,281		—		2,425,281		—
Asset-backed securities	286,655		—		286,655		—
Residential mortgage-backed securities	321,237		—		321,237		—
Commercial mortgage-backed securities	275,278		—		275,278		—
Collateralized loan obligations	60,076		—		60,076		—
Debt securities issued by foreign sovereign governments	39,170		39,170		—		—
Total debt securities	4,609,614		227,994		4,379,774		1,846
Equity securities (1)	3,055		2,734		—		321
Total investment portfolio	$	4,612,669	$	230,728	$	4,379,774	$	2,167
Real estate acquired (2)	$	12,658	$	—	$	—	$	12,658


(1)	Equity securities in Level 3 are carried at cost, which approximates fair value.


(2)	Real estate acquired through claim settlement, which is held for sale, is reported in Other assets on the consolidated balance sheets.

There were no transfers of securities between Level 1 and Level 2 during the first nine months of 2015.

For assets measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the three and nine months ended September 30, 2015 and 2014 is as follows:



	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at June 30, 2015	$	1,634		$	321	$	1,955		$	7,995
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(1,031		)
Purchases	—			2,535		2,535			9,632
Sales	(247		)	—		(247		)	(6,512		)
Transfers into Level 3	—			—		—			—
Transfers out of Level 3	—			—		—			—
Balance at September 30, 2015	$	1,387		$	2,856	$	4,243		$	10,084

Amount of total losses included in earnings for the three months ended September 30, 2015 attributable to the change in unrealized losses on assets still held at September 30, 2015	$	—		$	—	$	—		$	—



	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at December 31, 2014	$	1,846		$	321	$	2,167		$	12,658
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(1,503		)
Purchases	7			2,535		2,542			26,346
Sales	(466		)	—		(466		)	(27,417		)
Transfers into Level 3	—			—		—			—
Transfers out of Level 3	—			—		—			—
Balance at September 30, 2015	$	1,387		$	2,856	$	4,243		$	10,084

Amount of total losses included in earnings for the nine months ended September 30, 2015 attributable to the change in unrealized losses on assets still held at September 30, 2015	$	—		$	—	$	—		$	—



	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at June 30, 2014	$	2,231		$	321	$	2,552		$	10,804
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(2,062		)
Purchases	—			—		—			14,107
Sales	(237		)	—		(237		)	(6,284		)
Transfers into Level 3	—			—		—			—
Transfers out of Level 3	—			—		—			—
Balance at September 30, 2014	$	1,994		$	321	$	2,315		$	16,565

Amount of total losses included in earnings for the three months ended September 30, 2014 attributable to the change in unrealized losses on assets still held at September 30, 2014	$	—		$	—	$	—		$	—



	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at December 31, 2013	$	2,423		$	321	$	2,744		$	13,280
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(4,378		)
Purchases	30			—		30			33,484
Sales	(459		)	—		(459		)	(25,821		)
Transfers into Level 3	—			—		—			—
Transfers out of Level 3	—			—		—			—
Balance at September 30, 2014	$	1,994		$	321	$	2,315		$	16,565

Amount of total losses included in earnings for the nine months ended September 30, 2014 attributable to the change in unrealized losses on assets still held at September 30, 2014	$	—		$	—	$	—		$	—

Authoritative guidance over disclosures about the fair value of financial instruments requires additional disclosure for financial instruments not measured at fair value. Certain financial instruments, including insurance contracts, are excluded from these fair value disclosure requirements. The carrying values of cash and cash equivalents (Level 1) and accrued investment income (Level 2) approximated their fair values.

Additional fair value disclosures related to our investment portfolio are included in Note 7 – “Investments.”

We incur financial liabilities in the normal course of our business. The following tables present the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at September 30, 2015 and December 31, 2014, and the level within the fair value hierarchy at which such liabilities are measured on a recurring basis.



September 30, 2015	Par Value		Total 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)
Financial liabilities:
Senior Notes	$	61,953	$	62,027	$	—	$	62,027	$	—
Convertible Senior Notes due 2017	345,000		366,749		—		366,749		—
Convertible Senior Notes due 2020	500,000		719,375		—		719,375		—
Convertible Junior Subordinated Debentures	389,522		485,648		—		485,648		—
Total Debt	$	1,296,475	$	1,633,799	$	—	$	1,633,799	$	—



December 31, 2014	Par Value		Total 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)
Financial liabilities:
Senior Notes	$	61,953	$	63,618	$	—	$	63,618	$	—
Convertible Senior Notes due 2017	345,000		387,997		—		387,997		—
Convertible Senior Notes due 2020	500,000		735,075		—		735,075		—
Convertible Junior Subordinated Debentures	389,522		500,201		—		500,201		—
Total Debt	$	1,296,475	$	1,686,891	$	—	$	1,686,891	$	—

The fair values of our Senior Notes, Convertible Senior Notes and Debentures were determined using available pricing for these notes or debentures and are considered Level 2 securities.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details

Other Comprehensive Income

9 Months Ended

Sep. 30, 2015

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Other Comprehensive Income

The pretax components of our other comprehensive income (loss) and the related income tax (expense) benefit for the three and nine months ended September 30, 2015 and 2014 are included in the tables below.



	Three Months Ended September 30,
	2015			2014
	(In thousands)
Net unrealized holding gains (losses) arising during the period	$	27,271		$	(17,377	)
Income tax (expense) benefit	(9,531		)	6,069
Valuation allowance (1)	77,555			(5,993		)
Net of taxes	95,295			(17,301		)

Net changes in benefit plan assets and obligations	(546		)	(1,732		)
Income tax benefit	192			606
Valuation allowance (1)	(7,001		)	(606		)
Net of taxes	(7,355		)	(1,732		)

Net changes in unrealized foreign currency translation adjustment	(3,724		)	(3,835		)
Income tax benefit	1,306			1,345
Valuation allowance (1)	(529		)	—
Net of taxes	(2,947		)	(2,490		)

Total other comprehensive income (loss)	23,001			(22,944		)
Total income tax benefit, net of valuation allowance	61,992			1,421
Total other comprehensive income (loss), net of tax	$	84,993		$	(21,523	)



	Nine Months Ended September 30,
	2015			2014
	(In thousands)
Net unrealized holding (losses) gains arising during the period	$	(17,126	)	$	67,102
Income tax benefit (expense)	5,955			(23,436		)
Valuation allowance (1)	62,383			23,132
Net of taxes	51,212			66,798

Net changes in benefit plan assets and obligations	(1,638		)	(5,198		)
Income tax benefit	574			1,819
Valuation allowance (1)	(7,383		)	(1,819		)
Net of taxes	(8,447		)	(5,198		)

Net changes in unrealized foreign currency translation adjustment	(6,228		)	(1,000		)
Income tax benefit	2,186			350
Valuation allowance (1)	(529		)	—
Net of taxes	(4,571		)	(650		)

Total other comprehensive (loss) income	(24,992		)	60,904
Total income tax benefit, net of valuation allowance	63,186			46
Total other comprehensive income, net of tax	$	38,194		$	60,950

(1) See Note 11 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets.

The pretax and related income tax (expense) benefit components of the amounts reclassified from our accumulated other comprehensive loss to our consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 are included in the tables below.



	Three Months Ended September 30,
	2015			2014
	(In thousands)
Reclassification adjustment for net realized gains (losses) included in net income	$	(1,120	)	$	(840	)
Income tax benefit	395			299
Valuation allowance	(413		)	(330		)
Net of taxes	(1,138		)	(871		)

Reclassification adjustment related to benefit plan assets and obligations	546			1,732
Income tax expense	(192		)	(606		)
Valuation allowance	192			606
Net of taxes	546			1,732

Total reclassifications	(574		)	892
Total income tax expense, net of valuation allowance	(18		)	(31		)
Total reclassifications, net of tax	$	(592	)	$	861



	Nine Months Ended September 30,
	2015			2014
	(In thousands)
Reclassification adjustment for net realized gains (losses) included in net income (1)	$	10,591		$	(5,725	)
Income tax (expense) benefit	(3,697		)	2,014
Valuation allowance	3,635			(2,075		)
Net of taxes	10,529			(5,786		)

Reclassification adjustment related to benefit plan assets and obligations	1,638			5,198
Income tax expense	(574		)	(1,819		)
Valuation allowance	574			1,819
Net of taxes	1,638			5,198

Total reclassifications	12,229			(527		)
Total income tax expense, net of valuation allowance	(62		)	(61		)
Total reclassifications, net of tax	$	12,167		$	(588	)


(1)	The reclassification adjustment for the nine months ended September 30, 2014 has been recast to conform to the 2015 method for determining amounts included in net income. This revision had no impact to our consolidated financial statements and is not material to amounts disclosed by us in prior periods.

Changes in our accumulated other comprehensive loss (“AOCL”), including amounts reclassified from other comprehensive income (loss), for the nine months ended September 30, 2015 are included in the table below.



	Nine Months Ended September 30, 2015
	Unrealized gains and losses on available-for- sale securities				Defined benefit plans				Foreign currency translation			Total accumulated other comprehensive loss
	(In thousands)
Balance at December 31, 2014, net of tax	$	(57,551	)		$	(28,938	)		$	5,148		$	(81,341	)

Other comprehensive income (loss) before reclassifications	61,741				(6,809		)		(4,571		)	50,361

Less: Amounts reclassified from AOCL	10,529			(1)	1,638			(2)	—			12,167

Balance at September 30, 2015, net of tax	$	(6,339	)		$	(37,385	)		$	577		$	(43,147	)


(1)	Increases Net realized investment gains on the consolidated statements of operations.


(2)	Decreases Other underwriting and operating expenses, net on the consolidated statements of operations.

- Definition

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

+ References

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 220

-SubTopic 10

-Section 45

-Paragraph 14

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-Topic 220

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-Section 45

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

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-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.3-04)

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-Topic 220

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-Name Accounting Standards Codification

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-Name Accounting Standards Codification

-Glossary Reclassification Adjustments

-URI http://asc.fasb.org/extlink&oid=6522872

+ Details

Benefit Plans

9 Months Ended

Sep. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Benefit Plans

The following table provides the components of net periodic benefit cost for the pension, supplemental executive retirement and other postretirement benefit plans:



	Three Months Ended September 30,
	Pension and Supplemental Executive Retirement Plans						Other Postretirement Benefits
	2015			2014			2015			2014
	(In thousands)
Service cost	$	2,564		$	2,142		$	208		$	165
Interest cost	3,962			3,997			174			164
Expected return on plan assets	(5,278		)	(5,258		)	(1,248		)	(1,162		)
Recognized net actuarial loss (gain)	1,372			271			(44		)	(109		)
Amortization of prior service cost	(211		)	(233		)	(1,661		)	(1,663		)

Net periodic benefit cost (benefit)	$	2,409		$	919		$	(2,571	)	$	(2,605	)



	Nine Months Ended September 30,
	Pension and Supplemental Executive Retirement Plans						Other Postretirement Benefits
	2015			2014			2015			2014
	(In thousands)
Service cost	$	7,692		$	6,425		$	624		$	494
Interest cost	11,886			11,991			523			491
Expected return on plan assets	(15,832		)	(15,773		)	(3,743		)	(3,486		)
Recognized net actuarial loss (gain)	4,114			812			(132		)	(326		)
Amortization of prior service cost	(633		)	(698		)	(4,986		)	(4,988		)

Net periodic benefit cost (benefit)	$	7,227		$	2,757		$	(7,714	)	$	(7,815	)

We have made payments totaling $17 million in connection with our qualified pension and supplemental executive retirement plans, completing our annual funding for 2015.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References+ Details

Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Valuation Allowance

We review the need to maintain the deferred tax asset valuation allowance on a quarterly basis. We analyze many factors, among which are the severity and frequency of operating losses, our capacity for the carryback or carryforward of any losses, the existence and current level of taxable operating income, operating results on a three year cumulative basis, the expected occurrence of future income or loss, the expiration dates of the loss carryforwards, the cyclical nature of our operating results, and available tax planning strategies. Based on our analysis, we reduced our benefit from income tax through the recognition of a valuation allowance from the first quarter of 2009 through the second quarter of 2015.

In the third quarter of 2015, based on our analysis, as described more fully below, we concluded that it was more likely than not that our deferred tax assets would be fully realizable and that the valuation allowance was no longer necessary. Therefore, we reversed the valuation allowance under the applicable accounting rules for a reversal in an interim period. Specifically, the portion of the valuation allowance release related to the deferred tax asset that is expected to be realized in the current year is included in the computation of the annual estimated effective tax rate. This amount, which totaled $124.4 million and $25.3 million for the first three quarters and the fourth quarter of 2015, respectively, is or will be applied to net income through a reduction of the tax provision. The portion of the valuation allowance release related to deferred tax assets that are expected to be realized in future years, totaling $758.9 million, is treated as a discrete period item and is recognized as a component of the tax provision in continuing operations in the period of the release. Furthermore, in determining the discrete period impact from the release, we removed the prior period disproportionate tax effects that had arisen in other comprehensive income because of the valuation allowance. This reduced the amount of tax benefit included in net income and resulted in an allocation of tax benefit of $60.8 million to components of other comprehensive income.

For each of the three and nine months ended September 30, 2015, the reversal of our valuation allowance against our net deferred tax assets resulted in a $698.1 million benefit in our provision for income taxes. In addition, we reversed $41.2 million and $124.4 million of our valuation allowance and reduced our tax provision on income for the three and nine months ended September 30, 2015, respectively. The change in valuation allowance that was included in other comprehensive income for the three and nine months ended September 30, 2015 was $70.0 million and $54.5 million, respectively. The total valuation allowance as of December 31, 2014 was $902.3 million.

The following table provides a roll forward of our deferred tax asset valuation allowance for the nine months ended September 30, 2015.



	For the nine months ended September 30, 2015 and period then ended
	(In millions)
Beginning Balance December 31, 2014	$	902.3

Reduction in tax provision for the nine months ended September 30, 2015	(124.4		)
Reduction in tax provision allocated to the three months ended December 31, 2015	(25.3		)
Amounts recorded in other comprehensive income for the nine months ended September 30, 2015	6.3
Change in valuation allowance for deferred tax assets in the current year	(143.4		)

Amounts related to the release of the deferred tax asset valuation allowance recorded in the three months ending September 30, 2015
Reduction in tax provision for amounts to be realized in future years	(698.1		)
Amounts recorded in other comprehensive income to be realized in future years	(60.8		)
Change in valuation allowance for deferred tax assets realizable in future years	(758.9		)

Ending Balance September 30, 2015	$	—

In our analysis we evaluated both subjective and objective evidence and assigned a weight to each one. Significant weight was given to our most recent operating results and our ability to sustain them. We have experienced a significant reduction in losses incurred as our level of default notices received and in inventory has declined, as the effects of the financial crisis continue to ebb. New insurance written in recent years has been of high quality and is expected to be profitable well into the future. Historically, the results of mortgage insurers have been cyclical, where periods of operating losses have been followed by significant amounts of income. All of these factors have had a positive effect on operating results. Our level of income for each of the first three quarters of 2015 exceeded $100 million. We viewed the recurring nature of our income as very important, objectively verifiable evidence and gave it great weight in our analysis. Based on the above, we believe that we will have significant sources of income which will allow for utilization of our deferred tax assets.

Generally, a significant component of any analysis for the recognition of deferred tax assets includes the objective observation of operating results for a period of time. In this regard, we considered the level of cumulative operating income, as adjusted for any permanent tax differences. There is no specific requirement that indicates the time span for this evaluation. In our evaluation, we used a three year period, which, based on our investigation, is commonly used by many publicly held entities. Prior to the third quarter of 2015, this three year cumulative total had been materially negative for an extended period of time, which we considered to be objective, negative evidence which would not support the release of the valuation allowance. In the third quarter, this amount became positive and totaled $194.1 million, which we believe provided additional objective evidence which supports the release of the valuation allowance.

In the fourth quarter of 2013, our net operating loss carryforward (“NOL”) for U.S. federal regular income tax purposes reached $2.6 billion, which was the highest amount it attained. As of September 30, 2015, the estimated remaining NOLs total $2.1 billion, a reduction of approximately $500 million in less than two years. At this rate, and without taking into account any improvement in earnings, we would utilize the NOL in approximately seven years. In addition to this history of the utilization of our NOLs, we considered that the amount of income that we have been generating has been increasing over time. In the first three quarters of 2015, we reduced our NOLs by an average of $120.4 million per quarter, whereas in 2014 that amount was $52.2 million per quarter. At the 2015 rate, we would utilize the NOLs on our return by the end of 2020. The earliest current expiration date for our NOLs is 2029. This recent history of positive earnings trends indicates that it is more likely than not that the NOLs would be utilized well before they expire. Further, we currently have no limitations under the change in control provisions of Internal Revenue Code Section 382, which would reduce our ability to utilize our NOLs. We have taken steps, primarily through our Amended and Restated Rights Agreement, to attempt to prevent any change in control which would limit the utilization of our NOLs.

The effect of the change in valuation allowance on the provision for income taxes was as follows:



	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In thousands)
Provision for income tax	$	43,694		$	25,030		$	131,568		$	65,322
Change in valuation allowance	(739,298		)	(24,781		)	(822,465		)	(63,229		)

(Benefit from) provision for income taxes	$	(695,604	)	$	249		$	(690,897	)	$	2,093

The change in the valuation allowance that was included in other comprehensive income for the three months ended September 30, 2015 and 2014 was a decrease of $70.0 million and an increase of $6.6 million, respectively. The change in the valuation allowance that was included in other comprehensive income for the nine months ended September 30, 2015 and 2014 was a decrease of $54.5 million and a decrease of $21.3 million, respectively.

We have approximately $2.1 billion of NOL carryforwards on a regular tax basis and $1.2 billion of NOL carryforwards for computing the alternative minimum tax as of September 30, 2015. Any unutilized carryforwards are scheduled to expire at the end of tax years 2029 through 2033. In future years with taxable income and until such time as our NOL carryforwards are exhausted or expired, our provision for income tax would likely exceed the amount of cash tax payments.

Tax Contingencies

As previously disclosed, the Internal Revenue Service (“IRS”) completed examinations of our federal income tax returns for the years 2000 through 2007 and issued proposed assessments for taxes, interest and penalties 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”). 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 these assessments within the IRS and in August 2010, we reached a tentative settlement agreement with the IRS which was not finalized.

On September 10, 2014, we received Notices of Deficiency (commonly referred to as “90 day letters”) covering the 2000-2007 tax years. The Notices of Deficiency reflect taxes and penalties related to the REMIC matters of $197.5 million and at September 30, 2015, there would also be interest related to these matters of approximately $179.2 million. In 2007, we made a payment of $65.2 million to the United States Department of the Treasury which will reduce any amounts we would ultimately owe. The Notices of Deficiency also reflect additional amounts due of $261.4 million, which are primarily associated with the disallowance of the carryback of the 2009 net operating loss to the 2004-2007 tax years. We believe the IRS included the carryback adjustments as a precaution to keep open the statute of limitations on collection of the tax that was refunded when this loss was carried back, and not because the IRS actually intends to disallow the carryback permanently.

We filed a petition with the U.S. Tax Court contesting most of the IRS' proposed adjustments reflected in the Notices of Deficiency and the IRS has filed an answer to our petition which continues to assert their claim. Litigation to resolve our dispute with the IRS could be lengthy and costly in terms of legal fees and related expenses. We can provide no assurance regarding the outcome of any such litigation or whether a compromised settlement with the IRS will ultimately be reached and finalized. Depending on the outcome of this matter, additional state income taxes and state interest may become due when a final resolution is reached. As of September 30, 2015, those state taxes and interest would approximate $48.4 million. In addition, there could also be state tax penalties. Our total amount of unrecognized tax benefits as of September 30, 2015 is $106.9 million, which represents the tax benefits generated by the REMIC portfolio included in our tax returns that we have not taken benefit for in our financial statements, including any related interest. We continue to believe that our previously recorded tax provisions and liabilities are appropriate. However, we would need to make appropriate adjustments, which could be material, to our tax provision and liabilities if our view of the probability of success in this matter changes, and the ultimate resolution of this matter could have a material negative impact on our effective tax rate, results of operations, cash flows, available assets and statutory capital. In this regard, see Note 1 – “Nature of Business – Capital-GSEs.”

In October 2014, we received a Revenue Agent’s Report from the IRS related to the examination of our federal income tax returns for the years 2011 and 2012. The result of the examination had no material effect on the financial statements.

The total amount of the unrecognized tax benefits, related to our aforementioned REMIC issue that would affect our effective tax rate is $93.7 million. We recognize interest accrued and penalties related to unrecognized tax benefits in income taxes. As of September 30, 2015 and December 31, 2014, we had accrued $27.6 million and $26.9 million, respectively, for the payment of interest.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References+ Details

Loss Reserves

9 Months Ended

Sep. 30, 2015

Insurance Loss Reserves [Abstract]

Loss Reserves

We establish reserves to recognize the estimated liability for losses and loss adjustment expenses (“LAE”) 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 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. 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 deterioration of regional or national economic conditions, including unemployment, leading to a reduction in borrower income and thus their ability to make mortgage payments, and a drop in housing values which 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 and capital position, even in a stable economic environment.

The following table provides a reconciliation of beginning and ending loss reserves for the nine months ended September 30, 2015 and 2014:



	Nine months ended September 30,
	2015			2014
	(In thousands)

Reserve at beginning of period	$	2,396,807		$	3,061,401
Less reinsurance recoverable	57,841			64,085
Net reserve at beginning of period	2,338,966			2,997,316

Losses incurred:
Losses and LAE incurred in respect of default notices related to:
Current year	338,611			454,390
Prior years (1)	(90,130		)	(75,387		)
Subtotal	248,481			379,003

Losses paid:
Losses and LAE paid in respect of default notices related to:
Current year	9,227			11,574
Prior years	652,465			895,061
Reinsurance terminations (2)	(15,440		)	—
Subtotal	646,252			906,635

Net reserve at end of period	1,941,195			2,469,684
Plus reinsurance recoverables	38,748			57,898

Reserve at end of period	$	1,979,943		$	2,527,582


(1)	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.

(2)

In a termination or commutation, 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 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.

The “Losses incurred” section of the table above shows losses incurred on default notices received in the current year and in prior years. 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 default 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 the 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.

Losses incurred on default notices received in the current year decreased in the first nine months of 2015 compared to the same period in 2014, primarily due to a decrease in the number of new default notices received, net of related cures, as well as a decrease in the estimated claim rate on new delinquencies.

The prior year development of the reserves in the first nine months of 2015 and 2014 is reflected in the table below.



	Nine months ended September 30,
	2015			2014
	(In millions)
Decrease in estimated claim rate on primary defaults	$	(95	)	$	(38	)
Increase in estimated severity on primary defaults	12			(20		)
Change in estimates related to pool reserves, LAE reserves and reinsurance	(7		)	(17		)
Total prior year loss development (1)	$	(90	)	$	(75	)


(1)	A negative number for prior year loss development indicates a redundancy of prior year loss reserves, and a positive number indicates a deficiency of prior year loss reserves.

For the nine months ended September 30, 2015 and 2014 we experienced favorable prior year loss reserve development. This development was primarily due to a lower claim rate on the approximately 52% and 50% of prior year default inventory that was resolved during the nine months ended September 30, 2015 and 2014, respectively. In addition, during the first nine months of 2015, the claim rate development was favorably impacted by $21 million due to re-estimation of previously recorded reserves relating to disputes on our claims paying practices and adjustments to incurred but not reported losses (IBNR). This favorable development was offset, in part, by an increase in the claim rate and severity on prior year defaults remaining in the delinquent inventory.

The “Losses paid” section of the table above shows the breakdown between claims paid on default notices received in the current year and claims paid on default notices received in prior years. Until a few years ago, it took, on average, approximately twelve months for a default that is not cured to develop into a paid claim. Over the past several years, the average time it takes to receive a claim associated with a default has increased. This is, in part, due to new loss mitigation protocols established by servicers and to changes in some state foreclosure laws that may include, for example, a requirement for additional review and/or mediation processes. 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 liability associated with our estimate of premiums to be refunded on expected claim payments is accrued for separately at September 30, 2015 and December 31, 2014 and approximated $105 million and $115 million, respectively. Separate components of this liability are included in “Other liabilities” and, for December 31, 2014, “Premium deficiency reserve” on our consolidated balance sheet. Changes in the liability affect premiums written and earned and change in premium deficiency reserve.

A rollforward of our primary default inventory for the three and nine months ended September 30, 2015 and 2014 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, the number of business days in a month and transfers of servicing between loan servicers.



	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Default inventory at beginning of period	66,357		85,416		79,901		103,328
New notices	19,509		22,927		55,856		67,451
Cures	(17,036	)	(19,582	)	(56,700	)	(68,082	)
Paids (including those charged to a deductible or captive)	(3,958	)	(5,288	)	(12,671	)	(18,420	)
Rescissions and denials	(230	)	(319	)	(623	)	(1,123	)
Items removed from inventory resulting from the Countrywide settlement on GSE loans	—		—		(1,121	)	—
Default inventory at end of period	64,642		83,154		64,642		83,154

Pool insurance notice inventory was 2,950 at September 30, 2015 and 4,525 at September 30, 2014.

The decrease in the primary default inventory experienced during 2015 and 2014 was generally across all markets and primarily in book years 2008 and prior. As of September 30, 2015 the percentage of loans in the inventory that have been in default for 12 or more consecutive months has declined compared with the prior year end and one year prior, as shown in the table below. Historically as a default ages it becomes more likely to result in a claim. The percentage of loans that have been in default for 12 or more consecutive months and the number of loans in our primary claims received inventory have been affected by our suspended rescissions and the resolution of certain of those rescissions discussed below and in Note 5 – “Litigation and Contingencies.”



	September 30, 2015			December 31, 2014			September 30, 2014
Consecutive months in default
3 months or less	13,991	22	%	15,319	19	%	16,209	19	%
4 - 11 months	14,703	23	%	19,710	25	%	18,890	23	%
12 months or more	35,948	55	%	44,872	56	%	48,055	58	%

Total primary default inventory	64,642	100	%	79,901	100	%	83,154	100	%

Primary claims received inventory included in ending default inventory (1)	2,982	5	%	4,746	6	%	5,194	6	%


(1)	Our claims received inventory includes suspended rescissions, as we have voluntarily suspended rescissions of coverage related to loans that we believed would be included in a potential resolution. As of September 30, 2015, rescissions of coverage on approximately 430 loans had been voluntarily suspended compared to 1,425 at December 31, 2014 and 1,575 at September 30, 2014.

The number of months 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.



	September 30, 2015			December 31, 2014			September 30, 2014
Number of payments delinquent
3 payments or less	20,637	32	%	23,253	29	%	23,769	28	%
4 - 11 payments	14,890	23	%	19,427	24	%	18,985	23	%
12 payments or more	29,115	45	%	37,221	47	%	40,400	49	%

Total primary default inventory	64,642	100	%	79,901	100	%	83,154	100	%

Claims paying practices

Our loss reserving methodology incorporates our estimates of future rescissions. A variance between ultimate actual rescission rates and our estimates, as a result of the outcome of litigation, settlements or other factors, could materially affect our losses.

The liability associated with our estimate of premiums to be refunded on expected future rescissions is accrued for separately. At September 30, 2015 and December 31, 2014 the estimate of this liability totaled $7 million and $28 million, respectively. Separate components of this liability are included in “Other liabilities” and, for December 31, 2014, “Premium deficiency reserve” on our consolidated balance sheets. Changes in the liability affect premiums written and earned and change in premium deficiency reserve.

For information about discussions and legal proceedings with customers with respect to our claims paying practices, including settlements that we believe are probable, as defined in ASC 450-20, see Note 5 – “Litigation and Contingencies.”

Shareholders' Equity	9 Months Ended
Shareholders' Equity	Sep. 30, 2015
Stockholders' Equity Note [Abstract]
Shareholders' Equity	Shareholders’ Equity Our Shareholders Rights Agreement dated July 25, 2012, which was approved by shareholders, was amended and restated on July 23, 2015 (the “Agreement”). The Agreement seeks to diminish the risk that our ability to use our net operating losses (“NOLs”) to reduce potential future federal income tax obligations may become substantially limited and to deter certain abusive takeover practices. The benefit of the NOLs would be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, if we were to experience an “ownership change” as defined by Section 382 of the Internal Revenue Code. Under the Agreement each outstanding share of our Common Stock is accompanied by one Right. The Distribution Date occurs on the earlier of ten days after a public announcement that a person has become an Acquiring Person, or ten business days after a person announces or begins a tender offer in which consummation of such offer would result in a person becoming an Acquiring Person. An Acquiring Person is any person that becomes, by itself or together with its affiliates and associates, a beneficial owner of 5% or more of the shares of our Common Stock then outstanding, but excludes, among others, certain exempt and grandfathered persons as defined in the Agreement. The Rights are not exercisable until the Distribution Date. Each Right will initially entitle shareholders to buy one-tenth of one share of our Common Stock at a Purchase Price of $45 per full share (equivalent to $4.50 for each one-tenth share), subject to adjustment. Each exercisable Right (subject to certain limitations) will entitle its holder to purchase, at the Rights’ then-current Purchase Price, a number of our shares of Common Stock (or if after the Shares Acquisition Date, we are acquired in a business combination, common shares of the acquiror) having a market value at the time equal to twice the Purchase Price. The Rights will expire on August 1, 2018, or earlier as described in the Agreement. The Rights are redeemable at a price of $0.001 per Right at any time prior to the time a person becomes an Acquiring Person. Other than certain amendments, the Board of Directors may amend the Rights in any respect without the consent of the holders of the Rights.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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-Name Accounting Standards Codification

-Topic 235

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-Paragraph 1

-Subparagraph (SX 210.4-08.(d),(e))

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-Paragraph 2

-Subparagraph (SAB TOPIC 4.E)

-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707

+ Details

Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

We have an incentive stock plan under which restricted stock units (“RSUs”) were granted to employees. Our annual grant of share-based compensation to employees takes place during the first quarter of each fiscal year. 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 incentive plan generally vest over periods ranging from one to three years. The number of shares granted to employees and the weighted average fair value per share during the periods presented were (shares in thousands):



	Nine months ended September 30,
	2015			2014
	Shares Granted	Weighted Average Share Fair Value		Shares Granted	Weighted Average Share Fair Value

RSUs subject to performance conditions	1,144	$	9.04	1,372	$	8.43
RSUs subject only to service conditions	410	8.99		409	8.43

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details

Statutory Capital	9 Months Ended
Statutory Capital	Sep. 30, 2015
Statutory Capital [Abstract]
Statutory Capital	Statutory Capital Statutory Capital Requirements The insurance laws of 16 jurisdictions, including Wisconsin, our domiciliary state, 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 “State Capital Requirements” and, together with the GSE Financial Requirements, the “Financial Requirements.” While they vary among jurisdictions, the most common State Capital Requirements allow for a maximum risk-to-capital ratio of 25 to 1. A risk-to-capital ratio will increase if (i) the percentage decrease in capital exceeds the percentage decrease in insured risk, or (ii) the percentage increase in capital is less than the percentage increase in insured risk. Wisconsin does not regulate capital by using a risk-to-capital measure but instead requires a minimum policyholder position (“MPP”). The “policyholder position” of a mortgage insurer is its net worth or surplus, contingency reserve and a portion of the reserves for unearned premiums. At September 30, 2015, MGIC’s risk-to-capital ratio was 12.3 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $1.1 billion above the required MPP of $1.1 billion. In calculating our risk-to-capital ratio and MPP, we are allowed full credit for the risk ceded under our reinsurance transaction with a group of unaffiliated reinsurers. It is possible that under the revised State Capital Requirements discussed below, MGIC will not be allowed full credit for the risk ceded to the reinsurers. If MGIC is not allowed an agreed level of credit under either the State Capital Requirements or the PMIERs, MGIC may terminate the reinsurance agreement, without penalty. At this time, we expect MGIC to continue to comply with the current State Capital Requirements; however, you should read the rest of these financial statement footnotes for information about matters that could negatively affect such compliance. At September 30, 2015, the risk-to-capital ratio of our combined insurance operations (which includes reinsurance affiliates) was 13.6 to 1. Reinsurance agreements with affiliates permit MGIC to write insurance with a higher coverage percentage than it could on its own under certain state-specific requirements. A higher risk-to-capital ratio on a combined basis may indicate that, in order for MGIC to continue to utilize reinsurance agreements with its affiliates, unless a waiver of the State Capital Requirements of Wisconsin continues to be effective, additional capital contributions to the reinsurance affiliates could be needed. The NAIC previously announced that it plans to revise the minimum capital and surplus requirements for mortgage insurers that are provided for in its Mortgage Guaranty Insurance Model Act. A working group of state regulators is drafting the revisions, although no date has been established by which the NAIC must propose revisions to such requirements. Depending on the scope of revisions made by the NAIC, MGIC may be prevented from writing new business in the jurisdictions adopting such revisions. If MGIC fails to meet the State Capital Requirements of Wisconsin and is unable to obtain a waiver of them from the OCI, MGIC could be prevented from writing new business in all jurisdictions. If MGIC fails to meet the State Capital Requirements of a jurisdiction other than Wisconsin and is unable to obtain a waiver of them, MGIC could be prevented from writing new business in that particular jurisdiction. It is possible that regulatory action by one or more jurisdictions, including those that do not have specific State Capital Requirements, may prevent MGIC from continuing to write new insurance in such jurisdictions. If we are unable to write business in all jurisdictions, lenders may be unwilling to procure insurance from us anywhere. In addition, a lender’s assessment of the future ability of our insurance operations to meet the Financial Requirements may affect its willingness to procure insurance from us. A possible future failure by MGIC to meet the Financial Requirements will not necessarily mean that MGIC lacks sufficient resources to pay claims on its insurance liabilities. While we believe MGIC has sufficient claims paying resources to meet its claim obligations on its insurance in force on a timely basis, you should read the rest of these financial statement footnotes for information about matters that could negatively affect MGIC’s claims paying resources. Statement of Statutory Accounting Principles No. 101 (“SSAP No. 101”) became effective January 1, 2012 and prescribed new standards for determining the amount of deferred tax assets that can be recognized as admitted assets for determining statutory capital. Under a permitted practice effective September 30, 2012 the OCI approved MGIC to report its net deferred tax asset as an admitted asset in an amount not to exceed 10% of adjusted surplus as regards policyholders, notwithstanding any contrary provisions of SSAP No. 101. Net deferred tax assets of $138 million were included in MGIC’s statutory capital at December 31, 2014. Due to the deferred tax asset valuation allowance reversal as of September 30, 2015, MGIC no longer relies on the permitted practice and the deferred tax asset is admitted according to the stated provisions of SSAP No. 101. Under the stated provisions of SSAP No. 101, the admitted net deferred tax asset is 15% of adjusted surplus as regards policyholders. Net deferred tax assets of $211 million were included in MGIC's statutory capital as of September 30, 2015. See Note 1 – “Nature of Business and Basis of Presentation – Capital” for additional information regarding the capital standards of the GSEs.

New Accounting Pronouncements (Policies)	9 Months Ended
New Accounting Pronouncements (Policies)	Sep. 30, 2015
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
New Accounting Pronouncements	Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, our fee income related to contract underwriting and other fee-based services provided to lenders will be subject to this guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The guidance is effective for reporting periods beginning after December 15, 2017 with early adoption for reporting periods beginning after December 15, 2016 permitted. We are currently evaluating the impact of this update, but it is not expected to have a significant impact on our consolidated financial statements and disclosures. Presentation of Debt Issuance Costs In April 2015, the FASB amended existing guidance related to the presentation of debt issuance costs. The new standard requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on our consolidated financial statements. Disclosures about Short-Duration Contracts In May 2015, the FASB issued guidance requiring expanded disclosures for insurance entities that issue short-duration contracts. The expanded disclosures are designed to provide additional insight into an insurance entity's ability to underwrite and anticipate costs associated with claims. The disclosures include information about incurred and paid claims development by accident year, on a net of reinsurance basis, for the number of years claims incurred typically remain outstanding, not to exceed ten years. Each period presented in the disclosure about claims development that precedes the current reporting periods is considered supplementary information. The expanded disclosures also include more transparent information about significant changes in methodologies and assumptions used to estimate claims, and the timing, frequency, and severity of claims. The disclosures required by this update are effective for annual periods beginning after December 31, 2015, and interim periods within annual periods beginning after December 31, 2016, and is to be applied retrospectively. We are evaluating the impact, if any, of the new disclosure requirements.

Debt (Tables)

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Long-term debt

Long-term debt as of September 30, 2015 and December 31, 2014 consists of the following obligations.



	September 30, 2015			December 31, 2014
	(In millions)
Senior Notes, interest at 5.375% per annum, due November 2015	$	61.9		$	61.9
Convertible Senior Notes, interest at 5% per annum, due May 2017 (1)	345.0			345.0
Convertible Senior Notes, interest at 2% per annum, due April 2020 (2) (3)	500.0			500.0
Convertible Junior Subordinated Debentures, interest at 9% per annum, due April 2063 (4)	389.5			389.5
Total debt	1,296.4			1,296.4
Less current portion of debt	(61.9		)	(61.9		)
Total long-term debt	$	1,234.5		$	1,234.5


(1)	Convertible at any time prior to maturity at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.4186 shares per $1,000 principal amount, representing an initial conversion price of approximately $13.44 per share.

(2)

(3)

(4)

Interest payments made

Interest payments on our existing debt obligations appear below.



	Nine Months Ended September 30,
	2015		2014
	(In millions)
Senior Notes, interest at 5.375% per annum, due November 2015	$	1.7	$	1.7
Convertible Senior Notes, interest at 5% per annum, due May 2017	8.6		8.6
Convertible Senior Notes, interest at 2% per annum, due April 2020	5.0		5.0
Convertible Junior Subordinated Debentures, interest at 9% per annum, due April 2063	17.5		17.5
Total interest payments	$	32.8	$	32.8

Reinsurance (Tables)

9 Months Ended

Sep. 30, 2015

Reinsurance Disclosures [Abstract]

Effect of reinsurance agreement

A summary of our quota share reinsurance agreements, excluding captive agreements, appears below.



	2013 QSR Transaction
	Three Months Ended September 30,					Nine months ended September 30,
	2015 (1)			2014		2015 (1)			2014
	(In thousands)
Ceded premiums written, net of profit commission	$	(69,410	)	$	27,725	$	(11,355	)	$	72,414

Ceded premiums earned, net of profit commission	(11,568		)	23,736		35,999			64,330

Ceded losses incurred	—			4,689		6,060			10,347



Ceding commissions (2)	(11,568	)	9,922	10,235	27,800

Ceded unearned premiums	—		39,946	—	43,935

Profit commission	11,568		21,887	62,525	66,584

(2) Ceding commissions are reported within Other underwriting and operating expenses, net on the consolidated statements of operations.



	2015 QSR Transaction
	Three and Nine Months Ended September 30,
	2015
	(In thousands)
Ceded premiums written, net of profit commission (1)	$	22,626

Ceded premiums earned, net of profit commission (1)	22,626

Ceded losses incurred	4,236

Ceding commissions (2)	9,195

Profit commission	23,347

(1) As of July 1, 2015 premiums are ceded on an earned and received basis as defined in our 2015 QSR Transaction.

(2) Ceding commissions are reported within Other underwriting and operating expenses, net on the consolidated statements of

operations.

Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Calculation of earnings (loss) per share

The following table reconciles the numerators and denominators used to calculate basic and diluted EPS and also indicates the number of antidilutive securities.



	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(In thousands, except per share data and as otherwise noted)
Basic earnings per share:

Net income	$	822,852	$	72,017	$	1,069,582	$	177,521

Weighted average common shares outstanding	339,701		338,626		339,504		338,488

Basic income per share	$	2.42	$	0.21	$	3.15	$	0.52

Diluted earnings per share:

Net income	$	822,852	$	72,017	$	1,069,582	$	177,521

Interest expense, net of tax (1):
2% Convertible Senior Notes due 2020	1,982		3,049		5,946		9,148
5% Convertible Senior Notes due 2017	3,050		—		9,150		—
9% Convertible Junior Subordinated Debentures due 2063	5,697		—		17,090		—

Diluted income available to common shareholders	$	833,581	$	75,066	$	1,101,768	$	186,669



Weighted average shares - basic	339,701		338,626		339,504		338,488

Effect of dilutive securities:
Unvested restricted stock units	1,983		3,008		2,128		3,043
2% Convertible Senior Notes due 2020	71,942		71,942		71,942		71,942
5% Convertible Senior Notes due 2017	25,670		—		25,670		—
9% Convertible Junior Subordinated Debentures due 2063	28,853		—		28,853		—

Weighted average shares - diluted	468,149		413,576		468,097		413,473

Diluted income per share	$	1.78	$	0.18	$	2.35	$	0.45

Antidilutive securities (in millions)	—		54.5		—		54.5

Investments (Tables)

9 Months Ended

Sep. 30, 2015

Investments [Abstract]

Amortized cost, gross unrealized gains and losses and fair value of investments portfolio

The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio at September 30, 2015 and December 31, 2014 are shown below.



September 30, 2015	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	$	104,419	$	2,287	$	(1,740	)	$	104,966
Obligations of U.S. states and political subdivisions	1,595,458		24,306		(7,243		)	1,612,521
Corporate debt securities	2,142,500		7,722		(29,650		)	2,120,572
Asset-backed securities	132,271		346		(80		)	132,537
Residential mortgage-backed securities	278,737		275		(7,541		)	271,471
Commercial mortgage-backed securities	253,143		1,048		(1,504		)	252,687
Collateralized loan obligations	61,342		—		(1,056		)	60,286
Debt securities issued by foreign sovereign governments	30,477		2,876		(62		)	33,291
Total debt securities	4,598,347		38,860		(48,876		)	4,588,331
Equity securities	5,595		52		(13		)	5,634

Total investment portfolio	$	4,603,942	$	38,912	$	(48,889	)	$	4,593,965



December 31, 2014	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	$	349,153	$	2,752	$	(5,130	)	$	346,775
Obligations of U.S. states and political subdivisions	844,942		12,961		(2,761		)	855,142
Corporate debt securities	2,418,991		16,325		(10,035		)	2,425,281
Asset-backed securities	286,260		535		(140		)	286,655
Residential mortgage-backed securities	329,983		254		(9,000		)	321,237
Commercial mortgage-backed securities	276,215		1,221		(2,158		)	275,278
Collateralized loan obligations	61,340		—		(1,264		)	60,076
Debt securities issued by foreign sovereign governments	35,630		3,540		—			39,170
Total debt securities	4,602,514		37,588		(30,488		)	4,609,614
Equity securities	3,003		61		(9		)	3,055

Total investment portfolio	$	4,605,517	$	37,649	$	(30,497	)	$	4,612,669


(1)	At September 30, 2015 and December 31, 2014, there were no other-than-temporary impairment losses recorded in other comprehensive income.

Amortized cost and fair values of debt securities by contractual maturity



September 30, 2015	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	191,371	$	192,007
Due after one year through five years	1,611,819		1,622,178
Due after five years through ten years	1,130,625		1,113,217
Due after ten years	939,039		943,948

	$	3,872,854	$	3,871,350

Asset-backed securities	132,271		132,537
Residential mortgage-backed securities	278,737		271,471
Commercial mortgage-backed securities	253,143		252,687
Collateralized loan obligations	61,342		60,286

Total at September 30, 2015	$	4,598,347	$	4,588,331

Aging of the fair values of securities in an unrealized loss position

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
September 30, 2015	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	$	25,781	$	295	$	15,534	$	1,445	$	41,315	$	1,740
Obligations of U.S. states and political subdivisions	231,647		6,626		43,865		617		275,512		7,243
Corporate debt securities	1,045,477		27,190		140,995		2,460		1,186,472		29,650
Asset-backed securities	36,920		64		5,567		16		42,487		80
Residential mortgage-backed securities	39,870		414		201,435		7,127		241,305		7,541
Commercial mortgage-backed securities	74,403		698		79,411		806		153,814		1,504
Collateralized loan obligations	—		—		60,286		1,056		60,286		1,056
Foreign government securities	2,177		62		—		—		2,177		62
Equity securities	319		4		173		9		492		13

Total	$	1,456,594	$	35,353	$	547,266	$	13,536	$	2,003,860	$	48,889



	Less Than 12 Months				12 Months or Greater				Total
December 31, 2014	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	$	58,166	$	138	$	232,351	$	4,992	$	290,517	$	5,130
Obligations of U.S. states and political subdivisions	166,408		1,066		114,465		1,695		280,873		2,761
Corporate debt securities	816,555		5,259		243,208		4,776		1,059,763		10,035
Asset-backed securities	54,491		80		11,895		60		66,386		140
Residential mortgage-backed securities	24,168		34		263,002		8,966		287,170		9,000
Commercial mortgage-backed securities	89,301		810		110,652		1,348		199,953		2,158
Collateralized loan obligations	—		—		60,076		1,264		60,076		1,264
Equity securities	167		1		235		8		402		9

Total	$	1,209,256	$	7,388	$	1,035,884	$	23,109	$	2,245,140	$	30,497

Net realized investment gains (losses) and OTTI on investments

The net realized investment gains (losses) on the investment portfolio are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(In thousands)

Realized investment gains (losses) on investments:
Fixed maturities	$	638	$	629	$	27,123	$	755
Equity securities	2		3		10		168
Net realized investment gains	$	640	$	632	$	27,133	$	923



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands)

Realized investment gains (losses) on investments:
Gains on sales	$	720		$	1,161		$	28,711		$	3,273
Losses on sales	(80		)	(529		)	(1,578		)	(2,350		)
Net realized investment gains	$	640		$	632		$	27,133		$	923

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair value measurements for items measured at fair value

Fair value measurements for assets measured at fair value included the following as of September 30, 2015 and December 31, 2014:



September 30, 2015	Total 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)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	104,966	$	18,418	$	86,548	$	—
Obligations of U.S. states and political subdivisions	1,612,521		—		1,611,134		1,387
Corporate debt securities	2,120,572		—		2,120,572		—
Asset-backed securities	132,537		—		132,537		—
Residential mortgage-backed securities	271,471		—		271,471		—
Commercial mortgage-backed securities	252,687		—		252,687		—
Collateralized loan obligations	60,286		—		60,286		—
Debt securities issued by foreign sovereign governments	33,291		33,291		—		—
Total debt securities	4,588,331		51,709		4,535,235		1,387
Equity securities (1)	5,634		2,778		—		2,856
Total investment portfolio	$	4,593,965	$	54,487	$	4,535,235	$	4,243
Real estate acquired (2)	$	10,084	$	—	$	—	$	10,084



December 31, 2014	Total 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)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	346,775	$	188,824	$	157,951	$	—
Obligations of U.S. states and political subdivisions	855,142		—		853,296		1,846
Corporate debt securities	2,425,281		—		2,425,281		—
Asset-backed securities	286,655		—		286,655		—
Residential mortgage-backed securities	321,237		—		321,237		—
Commercial mortgage-backed securities	275,278		—		275,278		—
Collateralized loan obligations	60,076		—		60,076		—
Debt securities issued by foreign sovereign governments	39,170		39,170		—		—
Total debt securities	4,609,614		227,994		4,379,774		1,846
Equity securities (1)	3,055		2,734		—		321
Total investment portfolio	$	4,612,669	$	230,728	$	4,379,774	$	2,167
Real estate acquired (2)	$	12,658	$	—	$	—	$	12,658


(1)	Equity securities in Level 3 are carried at cost, which approximates fair value.


(2)	Real estate acquired through claim settlement, which is held for sale, is reported in Other assets on the consolidated balance sheets.

Reconciliation of beginning and ending balance for assets and liabilities measured at fair value with significant unobservable inputs (level 3)



	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at June 30, 2015	$	1,634		$	321	$	1,955		$	7,995
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(1,031		)
Purchases	—			2,535		2,535			9,632
Sales	(247		)	—		(247		)	(6,512		)
Transfers into Level 3	—			—		—			—
Transfers out of Level 3	—			—		—			—
Balance at September 30, 2015	$	1,387		$	2,856	$	4,243		$	10,084

Amount of total losses included in earnings for the three months ended September 30, 2015 attributable to the change in unrealized losses on assets still held at September 30, 2015	$	—		$	—	$	—		$	—



	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at December 31, 2014	$	1,846		$	321	$	2,167		$	12,658
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(1,503		)
Purchases	7			2,535		2,542			26,346
Sales	(466		)	—		(466		)	(27,417		)
Transfers into Level 3	—			—		—			—
Transfers out of Level 3	—			—		—			—
Balance at September 30, 2015	$	1,387		$	2,856	$	4,243		$	10,084

Amount of total losses included in earnings for the nine months ended September 30, 2015 attributable to the change in unrealized losses on assets still held at September 30, 2015	$	—		$	—	$	—		$	—



	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at June 30, 2014	$	2,231		$	321	$	2,552		$	10,804
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(2,062		)
Purchases	—			—		—			14,107
Sales	(237		)	—		(237		)	(6,284		)
Transfers into Level 3	—			—		—			—
Transfers out of Level 3	—			—		—			—
Balance at September 30, 2014	$	1,994		$	321	$	2,315		$	16,565

Amount of total losses included in earnings for the three months ended September 30, 2014 attributable to the change in unrealized losses on assets still held at September 30, 2014	$	—		$	—	$	—		$	—



	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at December 31, 2013	$	2,423		$	321	$	2,744		$	13,280
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(4,378		)
Purchases	30			—		30			33,484
Sales	(459		)	—		(459		)	(25,821		)
Transfers into Level 3	—			—		—			—
Transfers out of Level 3	—			—		—			—
Balance at September 30, 2014	$	1,994		$	321	$	2,315		$	16,565

Amount of total losses included in earnings for the nine months ended September 30, 2014 attributable to the change in unrealized losses on assets still held at September 30, 2014	$	—		$	—	$	—		$	—

Par value and fair value of debt

The following tables present the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at September 30, 2015 and December 31, 2014, and the level within the fair value hierarchy at which such liabilities are measured on a recurring basis.



September 30, 2015	Par Value		Total 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)
Financial liabilities:
Senior Notes	$	61,953	$	62,027	$	—	$	62,027	$	—
Convertible Senior Notes due 2017	345,000		366,749		—		366,749		—
Convertible Senior Notes due 2020	500,000		719,375		—		719,375		—
Convertible Junior Subordinated Debentures	389,522		485,648		—		485,648		—
Total Debt	$	1,296,475	$	1,633,799	$	—	$	1,633,799	$	—



December 31, 2014	Par Value		Total 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)
Financial liabilities:
Senior Notes	$	61,953	$	63,618	$	—	$	63,618	$	—
Convertible Senior Notes due 2017	345,000		387,997		—		387,997		—
Convertible Senior Notes due 2020	500,000		735,075		—		735,075		—
Convertible Junior Subordinated Debentures	389,522		500,201		—		500,201		—
Total Debt	$	1,296,475	$	1,686,891	$	—	$	1,686,891	$	—

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), 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); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References+ Details

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References+ Details

Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2015

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Other comprehensive income



	Three Months Ended September 30,
	2015			2014
	(In thousands)
Net unrealized holding gains (losses) arising during the period	$	27,271		$	(17,377	)
Income tax (expense) benefit	(9,531		)	6,069
Valuation allowance (1)	77,555			(5,993		)
Net of taxes	95,295			(17,301		)

Net changes in benefit plan assets and obligations	(546		)	(1,732		)
Income tax benefit	192			606
Valuation allowance (1)	(7,001		)	(606		)
Net of taxes	(7,355		)	(1,732		)

Net changes in unrealized foreign currency translation adjustment	(3,724		)	(3,835		)
Income tax benefit	1,306			1,345
Valuation allowance (1)	(529		)	—
Net of taxes	(2,947		)	(2,490		)

Total other comprehensive income (loss)	23,001			(22,944		)
Total income tax benefit, net of valuation allowance	61,992			1,421
Total other comprehensive income (loss), net of tax	$	84,993		$	(21,523	)



	Nine Months Ended September 30,
	2015			2014
	(In thousands)
Net unrealized holding (losses) gains arising during the period	$	(17,126	)	$	67,102
Income tax benefit (expense)	5,955			(23,436		)
Valuation allowance (1)	62,383			23,132
Net of taxes	51,212			66,798

Net changes in benefit plan assets and obligations	(1,638		)	(5,198		)
Income tax benefit	574			1,819
Valuation allowance (1)	(7,383		)	(1,819		)
Net of taxes	(8,447		)	(5,198		)

Net changes in unrealized foreign currency translation adjustment	(6,228		)	(1,000		)
Income tax benefit	2,186			350
Valuation allowance (1)	(529		)	—
Net of taxes	(4,571		)	(650		)

Total other comprehensive (loss) income	(24,992		)	60,904
Total income tax benefit, net of valuation allowance	63,186			46
Total other comprehensive income, net of tax	$	38,194		$	60,950

(1) See Note 11 – “Income Taxes” for a discussion of the valuation allowance recorded against deferred tax assets.

Reclassification out of accumulated other comprehensive income



	Three Months Ended September 30,
	2015			2014
	(In thousands)
Reclassification adjustment for net realized gains (losses) included in net income	$	(1,120	)	$	(840	)
Income tax benefit	395			299
Valuation allowance	(413		)	(330		)
Net of taxes	(1,138		)	(871		)

Reclassification adjustment related to benefit plan assets and obligations	546			1,732
Income tax expense	(192		)	(606		)
Valuation allowance	192			606
Net of taxes	546			1,732

Total reclassifications	(574		)	892
Total income tax expense, net of valuation allowance	(18		)	(31		)
Total reclassifications, net of tax	$	(592	)	$	861



	Nine Months Ended September 30,
	2015			2014
	(In thousands)
Reclassification adjustment for net realized gains (losses) included in net income (1)	$	10,591		$	(5,725	)
Income tax (expense) benefit	(3,697		)	2,014
Valuation allowance	3,635			(2,075		)
Net of taxes	10,529			(5,786		)

Reclassification adjustment related to benefit plan assets and obligations	1,638			5,198
Income tax expense	(574		)	(1,819		)
Valuation allowance	574			1,819
Net of taxes	1,638			5,198

Total reclassifications	12,229			(527		)
Total income tax expense, net of valuation allowance	(62		)	(61		)
Total reclassifications, net of tax	$	12,167		$	(588	)


(1)	The reclassification adjustment for the nine months ended September 30, 2014 has been recast to conform to the 2015 method for determining amounts included in net income. This revision had no impact to our consolidated financial statements and is not material to amounts disclosed by us in prior periods.

Accumulated other comprehensive income (loss)



	Nine Months Ended September 30, 2015
	Unrealized gains and losses on available-for- sale securities				Defined benefit plans				Foreign currency translation			Total accumulated other comprehensive loss
	(In thousands)
Balance at December 31, 2014, net of tax	$	(57,551	)		$	(28,938	)		$	5,148		$	(81,341	)

Other comprehensive income (loss) before reclassifications	61,741				(6,809		)		(4,571		)	50,361

Less: Amounts reclassified from AOCL	10,529			(1)	1,638			(2)	—			12,167

Balance at September 30, 2015, net of tax	$	(6,339	)		$	(37,385	)		$	577		$	(43,147	)


(1)	Increases Net realized investment gains on the consolidated statements of operations.


(2)	Decreases Other underwriting and operating expenses, net on the consolidated statements of operations.

Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Components of net periodic benefit cost

The following table provides the components of net periodic benefit cost for the pension, supplemental executive retirement and other postretirement benefit plans:



	Three Months Ended September 30,
	Pension and Supplemental Executive Retirement Plans						Other Postretirement Benefits
	2015			2014			2015			2014
	(In thousands)
Service cost	$	2,564		$	2,142		$	208		$	165
Interest cost	3,962			3,997			174			164
Expected return on plan assets	(5,278		)	(5,258		)	(1,248		)	(1,162		)
Recognized net actuarial loss (gain)	1,372			271			(44		)	(109		)
Amortization of prior service cost	(211		)	(233		)	(1,661		)	(1,663		)

Net periodic benefit cost (benefit)	$	2,409		$	919		$	(2,571	)	$	(2,605	)



	Nine Months Ended September 30,
	Pension and Supplemental Executive Retirement Plans						Other Postretirement Benefits
	2015			2014			2015			2014
	(In thousands)
Service cost	$	7,692		$	6,425		$	624		$	494
Interest cost	11,886			11,991			523			491
Expected return on plan assets	(15,832		)	(15,773		)	(3,743		)	(3,486		)
Recognized net actuarial loss (gain)	4,114			812			(132		)	(326		)
Amortization of prior service cost	(633		)	(698		)	(4,986		)	(4,988		)

Net periodic benefit cost (benefit)	$	7,227		$	2,757		$	(7,714	)	$	(7,815	)

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Schedule of valuation allowance

The following table provides a roll forward of our deferred tax asset valuation allowance for the nine months ended September 30, 2015.



	For the nine months ended September 30, 2015 and period then ended
	(In millions)
Beginning Balance December 31, 2014	$	902.3

Reduction in tax provision for the nine months ended September 30, 2015	(124.4		)
Reduction in tax provision allocated to the three months ended December 31, 2015	(25.3		)
Amounts recorded in other comprehensive income for the nine months ended September 30, 2015	6.3
Change in valuation allowance for deferred tax assets in the current year	(143.4		)

Amounts related to the release of the deferred tax asset valuation allowance recorded in the three months ending September 30, 2015
Reduction in tax provision for amounts to be realized in future years	(698.1		)
Amounts recorded in other comprehensive income to be realized in future years	(60.8		)
Change in valuation allowance for deferred tax assets realizable in future years	(758.9		)

Ending Balance September 30, 2015	$	—

Tax provision (benefit)

The effect of the change in valuation allowance on the provision for income taxes was as follows:



	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In thousands)
Provision for income tax	$	43,694		$	25,030		$	131,568		$	65,322
Change in valuation allowance	(739,298		)	(24,781		)	(822,465		)	(63,229		)

(Benefit from) provision for income taxes	$	(695,604	)	$	249		$	(690,897	)	$	2,093

Loss Reserves (Tables)

9 Months Ended

Sep. 30, 2015

Insurance Loss Reserves [Abstract]

Reconciliation of beginning and ending loss reserves

The following table provides a reconciliation of beginning and ending loss reserves for the nine months ended September 30, 2015 and 2014:



	Nine months ended September 30,
	2015			2014
	(In thousands)

Reserve at beginning of period	$	2,396,807		$	3,061,401
Less reinsurance recoverable	57,841			64,085
Net reserve at beginning of period	2,338,966			2,997,316

Losses incurred:
Losses and LAE incurred in respect of default notices related to:
Current year	338,611			454,390
Prior years (1)	(90,130		)	(75,387		)
Subtotal	248,481			379,003

Losses paid:
Losses and LAE paid in respect of default notices related to:
Current year	9,227			11,574
Prior years	652,465			895,061
Reinsurance terminations (2)	(15,440		)	—
Subtotal	646,252			906,635

Net reserve at end of period	1,941,195			2,469,684
Plus reinsurance recoverables	38,748			57,898

Reserve at end of period	$	1,979,943		$	2,527,582


(1)	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.

(2)

Prior year development of the reserves

The prior year development of the reserves in the first nine months of 2015 and 2014 is reflected in the table below.



	Nine months ended September 30,
	2015			2014
	(In millions)
Decrease in estimated claim rate on primary defaults	$	(95	)	$	(38	)
Increase in estimated severity on primary defaults	12			(20		)
Change in estimates related to pool reserves, LAE reserves and reinsurance	(7		)	(17		)
Total prior year loss development (1)	$	(90	)	$	(75	)


(1)	A negative number for prior year loss development indicates a redundancy of prior year loss reserves, and a positive number indicates a deficiency of prior year loss reserves

Rollforward of primary default inventory



	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Default inventory at beginning of period	66,357		85,416		79,901		103,328
New notices	19,509		22,927		55,856		67,451
Cures	(17,036	)	(19,582	)	(56,700	)	(68,082	)
Paids (including those charged to a deductible or captive)	(3,958	)	(5,288	)	(12,671	)	(18,420	)
Rescissions and denials	(230	)	(319	)	(623	)	(1,123	)
Items removed from inventory resulting from the Countrywide settlement on GSE loans	—		—		(1,121	)	—
Default inventory at end of period	64,642		83,154		64,642		83,154

Aging of the primary default inventory

As of September 30, 2015 the percentage of loans in the inventory that have been in default for 12 or more consecutive months has declined compared with the prior year end and one year prior, as shown in the table below. Historically as a default ages it becomes more likely to result in a claim. The percentage of loans that have been in default for 12 or more consecutive months and the number of loans in our primary claims received inventory have been affected by our suspended rescissions and the resolution of certain of those rescissions discussed below and in Note 5 – “Litigation and Contingencies.”



	September 30, 2015			December 31, 2014			September 30, 2014
Consecutive months in default
3 months or less	13,991	22	%	15,319	19	%	16,209	19	%
4 - 11 months	14,703	23	%	19,710	25	%	18,890	23	%
12 months or more	35,948	55	%	44,872	56	%	48,055	58	%

Total primary default inventory	64,642	100	%	79,901	100	%	83,154	100	%

Primary claims received inventory included in ending default inventory (1)	2,982	5	%	4,746	6	%	5,194	6	%


(1)	Our claims received inventory includes suspended rescissions, as we have voluntarily suspended rescissions of coverage related to loans that we believed would be included in a potential resolution. As of September 30, 2015, rescissions of coverage on approximately 430 loans had been voluntarily suspended compared to 1,425 at December 31, 2014 and 1,575 at September 30, 2014.

Number of payments delinquent

The number of payments that a borrower is delinquent is shown in the table below.



	September 30, 2015			December 31, 2014			September 30, 2014
Number of payments delinquent
3 payments or less	20,637	32	%	23,253	29	%	23,769	28	%
4 - 11 payments	14,890	23	%	19,427	24	%	18,985	23	%
12 payments or more	29,115	45	%	37,221	47	%	40,400	49	%

Total primary default inventory	64,642	100	%	79,901	100	%	83,154	100	%

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of stock-based compensation, activity

The number of shares granted to employees and the weighted average fair value per share during the periods presented were (shares in thousands):



	Nine months ended September 30,
	2015			2014
	Shares Granted	Weighted Average Share Fair Value		Shares Granted	Weighted Average Share Fair Value

RSUs subject to performance conditions	1,144	$	9.04	1,372	$	8.43
RSUs subject only to service conditions	410	8.99		409	8.43

Nature of Business and Basis of Presentation (Details) (USD $)	3 Months Ended		9 Months Ended		0 Months Ended
	Dec. 31, 2013	Jun. 30, 2013 agreement	Sep. 30, 2015	Sep. 30, 2014	Nov. 02, 2015 Senior Notes, interest at 5.375% per annum, due November 2015 Subsequent Event
Organization, Consolidation and Presentation of Financial Statements [Abstract]
PMIERs tables expected review period			2 years
Notice period for updates to PMIERs tables			180 days
(Increase) decrease in restricted cash	$ 42,900,000	$ (60,300,000)	$ 17,212,000	$ 233,000
Number of agreements entered into to resolve disputes		2
Debt Instrument [Line Items]
Repayments of debt					$ 61,900,000

Debt (Details) (USD $)

9 Months Ended

0 Months Ended

9 Months Ended

Sep. 30, 2015

Sep. 30, 2014

Dec. 31, 2014

Sep. 30, 2015

Senior Notes, interest at 5.375% per annum, due November 2015

Sep. 30, 2014

Senior Notes, interest at 5.375% per annum, due November 2015

Dec. 31, 2014

Senior Notes, interest at 5.375% per annum, due November 2015

Nov. 02, 2015

Senior Notes, interest at 5.375% per annum, due November 2015

Subsequent Event

Sep. 30, 2015

Senior Notes, interest at 5.375% per annum, due November 2015

Senior Notes Due 2015

Sep. 30, 2015

Convertible Senior Notes, interest at 5% per annum, due May 2017

Sep. 30, 2014

Convertible Senior Notes, interest at 5% per annum, due May 2017

Dec. 31, 2014

Convertible Senior Notes, interest at 5% per annum, due May 2017

Sep. 30, 2015

Convertible Senior Notes, interest at 2% per annum, due April 2020

Sep. 30, 2014

Convertible Senior Notes, interest at 2% per annum, due April 2020

Dec. 31, 2014

Convertible Senior Notes, interest at 2% per annum, due April 2020

Sep. 30, 2015

Convertible Junior Subordinated Debentures, interest at 9% per annum, due April 2063

Sep. 30, 2014

Convertible Junior Subordinated Debentures, interest at 9% per annum, due April 2063

Dec. 31, 2014

Convertible Junior Subordinated Debentures, interest at 9% per annum, due April 2063

Debt Instrument [Line Items]

Repayments of debt

$ 61,900,000

Total debt

1,296,400,000

61,900,000

345,000,000

^[1]

345,000,000

^[1]

500,000,000

^[2],[3]

500,000,000

^[2],[3]

389,500,000

^[4]

389,500,000

^[4]

Less current portion of debt

(61,900,000)

Total long-term debt

1,234,500,000

Stated interest rate (in hundredths)

5.375%

5.00%

2.00%

9.00%

Maturity date

Nov. 01, 2015

May 01, 2017

Apr. 01, 2020

Apr. 01, 2063

Conversion rate (in shares per $1,000 note)

74.4186

143.8332

74.0741

Principal amount of notes used in determining conversion rate

1,000

Initial conversion price (in dollars per share)

$ 13.44

$ 6.95

$ 13.50

Minimum number of trading days

20 days

Maximum number of trading days

30 days

Percentage of conversion price (in hundredths)

130.00%

Convertible debt, conversion price

$ 9.03

Redemption price, percentage (in hundredths)

100.00%

Period preceding election to convert

5 days

Interest payments made

32,800,000

1,700,000

8,600,000

5,000,000

17,500,000

Holding company cash and investments

469,000,000

Unrealized gain loss on holding company investments

$ 400,000

Modified duration of holding company investments

2 years 10 months 24 days

[1]	Convertible at any time prior to maturity at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.4186 shares per $1,000 principal amount, representing an initial conversion price of approximately $13.44 per share.
[2]	Prior to January 1, 2020, the 2% Convertible Senior Notes are convertible only upon satisfaction of one or more conditions. One such condition is that during any calendar quarter commencing after March 31, 2014, the last reported sale price of our common stock for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter be greater than or equal to 130% of the applicable conversion price on each applicable trading day. The 2% Notes are convertible at an initial conversion rate, which is subject to adjustment, of 143.8332 shares per $1,000 principal amount, representing an initial conversion price of approximately $6.95 per share. 130% of such conversion price is $9.03. On or after January 1, 2020, holders may convert their notes irrespective of satisfaction of the conditions. Our common stock price was greater than or equal to 130% of the applicable conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, September 30, 2015.
[3]	Prior to April 10, 2017, the notes will not be redeemable. On any business day on or after April 10, 2017 we may redeem for cash all or part of the notes, at our option, at a redemption rate equal to 100% of the principal amount of the notes 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 notes for each of at least 20 of the 30 consecutive trading days preceding notice of the redemption.
[4]	Convertible at any time prior to maturity at the holder's option, at an initial conversion rate, which is subject to adjustment, of 74.0741 shares per $1,000 principal amount, representing 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 lieu of issuing shares of common stock upon conversion of the debentures, we may, at our option, make a cash payment to converting holders for all or some of the shares of our common stock otherwise issuable upon conversion.

Reinsurance (Details) (USD $)

3 Months Ended

9 Months Ended

0 Months Ended

3 Months Ended

9 Months Ended

0 Months Ended

3 Months Ended

9 Months Ended

Sep. 30, 2015

Sep. 30, 2014

Sep. 30, 2015

Sep. 30, 2014

Dec. 31, 2014

Jul. 01, 2015