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$46 million of securities during 2008. We also collected $177 million of principal repayments consistent with the

expected cash flows during 2008.

Insured Investments As of December 31, 2008, we hold $12.29 billion of fixed income securities that are

insured by bond insurers, including approximately $11.58 billion or 53.0% of our municipal bond portfolio,

$426 million of our ABS RMBS and $252 million of our other asset-backed securities. Additionally, we hold

$4 million of corporate bonds and $(13) million in credit default swaps that were directly issued by these bond

insurers. 53.0% of our municipal bond portfolio is insured by nine bond insurers and 38.4% of these securities

have a Moody’s equivalent rating of Aaa or Aa. Our practices for acquiring and monitoring municipal bonds

primarily are based on the quality of the primary obligor. As of December 31, 2008, we believe the valuations

already reflected a decline in the value of the insurance, and further related declines if any, are not expected to

be material. While the valuation of these holdings may be temporarily impacted by negative and rapidly changing

market developments, we continue to have the intent and ability to hold the bonds and expect to receive all of the

contractual cash flows. As of December 31, 2008, 48.2% of our insured municipal bond portfolio was insured by

MBIA, Inc., 24.7% by Ambac Financial Group, Inc., 19.8% by Financial Security Assurance Inc. and 2.7% by

Financial Guarantee Insurance Company.

Credit ratings without the insurance guarantee are not available in certain cases where the issuer does not

solicit the rating agency to provide the rating without the insurance guarantee and, as a result, the rating agency

does not disclose it. The ratings of our holdings with insurance guarantee generally follow the rating of the bond

insurer. In cases where the rating of the bond insurer is lower than that of the underlying security, the rating

without insurance guarantee could be higher than that with the guarantee.

MD&A