The U.S. public finance insurance segment recorded $163 million of adjusted pre-tax income in the fourth quarter of 2011 compared with $103 million of adjusted pre-tax income in the fourth quarter of 2010. The increase in adjusted pre-tax income resulted primarily from greater net gains on sales of securities and lower loss and loss adjustment expenses, partially offset by a realized loss associated with the write-off of $31 million of goodwill.
Total premiums earned in the U.S. public finance insurance segment were $113 million in the fourth quarter of 2011, essentially flat with total premiums earned in the fourth quarter of 2010, as a decrease in scheduled premiums earned was offset by an increase in refunding premiums earned.
Net investment income for the U.S. public finance insurance segment declined 6 percent to $51 million in the fourth quarter of 2011 from $54 million in the comparable period of 2010 primarily due to a lower asset base.
The U.S. public finance insurance segment’s loss and loss adjustment expenses were a benefit of $1 million in the fourth quarter of 2011 compared with an expense of $31 million in the fourth quarter of 2010.Expenses associated with the amortization of deferred acquisition costs totaled $25 million in the fourth quarter of 2011, up 9 percent from $23 million in the fourth quarter of 2010 and in line with insured portfolio amortization. Operating expenses were $22 million in the fourth quarter of 2011, up 29 percent from $17 million in the comparable period of 2010. The increase in operating expenses was driven by higher compensation, legal and facilities-related expenses. As of December 31, 2011, National’s statutory capital was $2.8 billion and its claims-paying resources (as described in the attached Explanation of Non-GAAP Financial Measures) totaled $5.7 billion. Structured Finance and International Insurance Results The structured finance and international insurance business is primarily conducted through MBIA Corp. and its subsidiaries.
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