The structured finance and international insurance segment had an adjusted pre-tax loss of $556 million for the third quarter of 2011 compared with an adjusted pre-tax loss of $6 million for the third quarter of 2010. Premiums earned, net investment income, fees and reimbursements, and premiums and fees on insured derivatives totaled $151 million in the third quarter of 2011. Losses, credit impairments (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) and loss-related expenses on insured exposures totaled $631 million in the third quarter of 2011 while all other line items in the aggregate had a net $76 million negative impact on the adjusted pre-tax loss.The following is a summary of all insured portfolio economic loss activity in the third quarter. Economic losses for a reporting period represent the change in the Company’s estimate of the present value of expected net future claims payments without regard to the manner in which they are presented in the Company’s financial statements.
|3Q 2011 Economic Loss (Benefit)|
|($ in millions)||RMBS||ABS CDOs||CMBS||Other*||Total|
|Change in Expected Payments||$||134||($22)||$||497||$||118||$||727|
|Change in Expected Salvage||(90)||0||0||(6)||(96)|
|Total Economic Losses (Benefit)||$||44||($22)||$||497||$||112||$||631|
|*includes first-lien RMBS|