MBIA (MBI)2025-02-27 21:19Portfolio and Insurance - As of December 31, 2024, MBIA's insured portfolio consists of 2.3 billion as of December 31, 2024, with insurance in force amounting to 3.9 billion[37]. - National's ten largest insured U.S. public finance credits totaled 0.3 billion[41]. - The company has third-party reinsurance agreements covering approximately 2.4% of its insured par outstanding, with no current plans to reduce insured exposure through reinsurance[68]. - As of December 31, 2024, National had 137 million due to defaults[110]. - On January 1, 2025, PREPA defaulted on scheduled debt service for National insured bonds, resulting in an additional 42 million, a significant decrease from 483 million, compared to 447 million, compared to a loss of (184) million, compared to 32 million in 2024 compared to 2023, primarily due to a lower average asset base[186]. - Adjusted net income for 2024 was (169) million in 2023 and (3.90) for 2024[195]. - The U.S. public finance insurance segment reported net premiums earned of 47 million in 2022[205]. - Net investment income decreased to 93 million in 2023, primarily due to a lower average invested asset base[205]. Risk Management - National's risk mitigation strategy includes proactive portfolio management and early detection of stress in its insured portfolio[26]. - The company's credit risk management is overseen by various committees, including the Risk Oversight Committee, which reviews material transactions and policies related to credit, market, operational, legal, financial, and business risks[43][44]. - The Audit Committee monitors the integrity of financial statements and compliance with legal and regulatory requirements, including cybersecurity risks, receiving semi-annual briefings on the implementation of the Cybersecurity Policy[46]. - The company has identified climate change as an emerging risk to its insured portfolio, particularly affecting U.S. municipalities, which face direct and indirect impacts from severe weather events[57][58]. - The majority of MBIA's insured exposure is to U.S. municipalities, with potential financial strain due to costs associated with climate risk mitigation[58]. - The company continues to monitor financial and budgetary stress among state and local governments, which could lead to increased defaults on insured obligations[203]. - The company’s risk management policies may not adequately prevent future losses, particularly in transactions with large notional exposures[118]. Shareholder Actions - In 2023, National declared and paid dividends of 550 million to MBIA Inc.[24]. - The company has a share repurchase program authorized for up to 71 million remaining as of December 31, 2024[21]. - The Board of Directors declared an extraordinary cash dividend of 100 million, with 3.6 million shares repurchased in 2023 at an average price of 71 million remaining as of December 31, 2024[166]. Regulatory Compliance - The company is subject to regulation under New York Insurance Law, which prescribes minimum standards of solvency and requires detailed annual financial statements to be filed[71]. - As of December 31, 2024, National and MBIA Insurance Corporation were in compliance with their aggregate risk limits, despite reporting single risk limit overages due to changes in statutory capital[79]. - The Superintendent of Financial Services may impose remedial actions if the company's insurance subsidiaries do not meet regulatory requirements[122]. - The company is required to contribute 50% of premiums as they are earned to contingency reserves for policies written prior to July 1, 1989, and must make contributions over 15 or 20 years for policies written after that date[75]. Operational Risks - The company relies heavily on information technology systems, facing risks of operational failures and cybersecurity threats that could adversely affect business operations[146]. - The company has implemented a comprehensive cybersecurity program to safeguard critical information assets, including regular assessments and third-party monitoring[152]. - The company has a succession plan for key executives, but the loss of any key personnel could adversely affect its business strategy[149]. - Ineffective internal controls could result in material misstatements in financial statements, affecting investor confidence and the company's ability to raise capital[128]. Loss Reserves and Claims - As of December 31, 2024, the company's loss and loss adjustment expense reserves are based on case basis reserves and estimates for LAE, reflecting expected losses net of potential recoveries[66]. - Loss reserve estimates and credit impairments are subject to uncertainties, and there is no assurance that future net claims will not exceed loss reserves[113]. - The increase in loss and LAE reserves as of December 31, 2024, was primarily due to PREPA claims, with specific reserve adjustments related to a leased-back transaction[213]. - The company made claim payments for PREPA in January and July 2024, which partially offset the increase in reserves[213]. - Insurance loss recoverable increased by 9% to 152 million in 2023[212]. - Loss and loss adjustment expenses increased to 170 million in 2023, reflecting changes in PREPA reserves[211].