Radian Group Inc. Notes to Consolidated Financial Statements - (Continued) 247 Radian Asset Assurance’s ability to pay dividends to its parent, Radian Guaranty , is restricted by certain provisions of the  insurance laws of New York, its state of domicile. Under the New  York insurance laws, Radian Asset Assurance may only pay  dividends from statutory earned surplus.  Without the prior approval from the NYSDFS, Radian  Asset Assurance can only pay a  dividend, which when totaled with all other dividends declared or distributed by it during the preceding 12 months, is the lesser  of 10% of its statutory surplus to policyholders, as shown by its last statement on file with the NYSDFS, or  100% of statutory  adjusted net investment income. In July 2012, June 2011 and June 2010, Radian Asset Assurance paid dividends of $54.0  million, $53.4 million and $69.2 million, respectively, to Radian Guaranty. We expect that Radian Asset Assurance will have  the capacity to pay another ordinary dividend to Radian Guaranty in the third quarter of 2013 of approximately  $35 million. As  of December 31, 2012, Radian Asset Assurance maintained claims paying resources of  $1.8 billion, which for our financial  guaranty business includes statutory surplus of  $1.1 billion, plus contingency reserves, unearned premium reserves, the present  value of installment premiums and loss and LAE reserves.  CMAC of Texas had no contingency reserves at December 31, 2012, 2011 or 2010. CMAC of Texas’s statutory net  income (loss) and statutory policyholders’ surplus as of and for the years ended  December 31, 2012, 2011 and 2010 were as  follows:  Radian Group’s U.S. Consolidated federal income tax returns, which include CMAC of  Texas’s federal tax returns, were  under examination by the IRS for tax years 2000 through 2007.  We are currently contesting proposed adjustments resulting  from the IRS examination of these tax years. Ef fective December 31, 2011, Radian Group and CMAC of Texas entered into an  Assumption and Indemnification  Agreement with regard to these proposed adjustments.  Through this agreement, Radian Group  agreed to indemnify CMAC of  Texas for any tax payments ultimately due to the IRS for the proposed adjustments, which relate  to the recognition of certain tax losses and deductions that were generated through our investment in a portfolio of non- economic REMIC residual interests currently held by CMAC of  Texas. This indemnification was in lieu of an immediate  capital contribution that otherwise would have been needed from Radian Group to CMAC of  Texas, based on an estimate for  this potential liability, in order for CMAC of Texas to maintain its minimum statutory surplus requirements.  There remains  significant uncertainty with regard to the amount and timing of any resolution with the IRS. See Note 15 for further information  regarding the examination by the IRS for the 2000 through 2007 tax years. CMAC of Texas is required to maintain a minimum statutory surplus of  $20 million to remain an authorized reinsurer in  all states.  CMAC of Texas’ ability to declare dividends on its common stock is restricted by certain provisions of the insurance laws  of the State of Texas, its state of domicile. The insurance laws of the State of  Texas limit the maximum amount of dividends  that may be paid from positive unassigned surplus by an insurer without prior approval by the  Texas Insurance Commissioner.  Under such test, CMAC of Texas may pay dividends during any 12-month period in an amount equal to the greater of: (i)  10%  of the preceding year-end statutory policyholders’ unassigned surplus; or (ii) the preceding year-end statutory net income. In  accordance with such restrictions, no dividends may be paid by CMAC of Texas in 2013, without prior regulatory approval.  Radian Mortgage Insurance is required to maintain a minimum statutory surplus of  $20 million to remain an authorized  reinsurer in all states. Radian Mortgage Insurance received capital contributions totaling  $60 million in 2012 to improve its  risk-to-capital position in conjunction with the transfer of risk under the intercompany reinsurance agreement executed in 2012.  Radian Mortgage Insurance had no contingency reserves at December 31, 2012, 2011 or 2010. Radian Mortgage Insurance’s  statutory net income (loss) and statutory policyholders’  surplus as of and for the years ended  December 31, 2012, 2011 and  2010 were as follows:  December 31, (In millions) 2012 2011 2010 Statutory net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.7 $ (11.1) $ (60.6) Statutory policyholders’ surplus. . . . . . . . . . . . . . . . . . . . . . . 81.8 20.0 10.1 December 31, (In millions) 2012 2011 2010 Statutory net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . $ 16.0 $ (46.6) $ (194.7) Statutory policyholders’ surplus. . . . . . . . . . . . . . . . . . . . . . 42.3 26.2 40.8