149 We determine the fair value of our derivative instruments primarily using internally-generated models.  We utilize market  observable inputs, such as credit spreads on similar products, whenever they are available.  When one of our transactions  develops characteristics that are inconsistent with the characteristics of transactions that underlie the relevant market-based  index that we use in our credit spread valuation approach, and more relevant inputs or projections become available and would  represent the view of a typical market participant, we change to an approach that is based on that more relevant available  information. This change in approach is generally prompted when the credit component, and not market factors, becomes the  dominant driver of the estimated fair value for a particular transaction.  There is a high degree of uncertainty about our fair value  estimates since our contracts are not traded or exchanged, which makes external validation and corroboration of our estimates  difficult, particularly given the current market environment, in which very few , if any, contracts are being traded or originated.  We define fair value as the current amount that would be exchanged to sell an asset or transfer a liability , other than in a  forced liquidation. In determining an exit market, we consider the fact that most of our derivative contracts are unconditional  and irrevocable and contractually prohibit us from transferring them to other capital market participants.  Accordingly, there is  no principal market for such highly structured insured credit derivatives. In the absence of a principal market, we value these  insured credit derivatives in a hypothetical market where market participants include other monoline mortgage and financial  guaranty insurers with similar credit quality to us, as if the risk of loss on these contracts could be transferred to these other  mortgage and financial guaranty insurance and reinsurance companies.  We believe that in the absence of a principal market, this  hypothetical market provides the most relevant information with respect to fair value estimates. We are responsible for the determination of the value of all investments carried at fair value and the supporting  methodologies and assumptions. To assist us in this responsibility, we utilize independent third-party valuation service  providers to gather, analyze and interpret market information and estimate fair values based upon relevant methodologies and  assumptions for various asset classes and individual securities.  We perform monthly quantitative and qualitative analysis on the  prices received from third parties to determine whether the prices are reasonable estimates of fair value. Our analysis includes:  (i) a review of the methodology used by third party pricing services; (ii) a comparison of pricing services’  valuations to other  independent sources; (iii) a review of month to month price fluctuations; and (iv) a comparison of actual purchase and sale  transactions with valuations received from third parties.  These processes are designed to ensure that our investment values are  accurately recorded, that the data inputs and valuation techniques utilized are appropriate and consistently applied and that the  assumptions are reasonable and consistent with the objective of determining fair value.  Other investments —These securities primarily consist of deposit investments and short-term  certificates of deposit, which  are categorized in Level II and Level III of the fair value hierarchy , and a guaranteed investment contract held by one of our  consolidated VIEs, which is categorized in Level III of the fair value hierarchy . The fair value of the Level III securities is  generally estimated by discounting estimated future cash flows. Equity securities —The fair value of these securities is generally estimated using observable market data in active markets  or bid prices from market makers and broker -dealers. Generally, these securities are categorized in Level I or II of the fair value  hierarchy, as observable market data are readily available.  A small number of our equity securities, however , are categorized in  Level III of the fair value hierarchy due to a lack of market-based transaction data or the use of model-based evaluations. Hybrid securities —These instruments are convertible securities. The estimated fair value is derived, in part, by utilizing  dealer quotes and observed bond and stock prices. For certain securities, the underlying security price may be adjusted to  account for observable changes in the conversion and investment value from the time the quote was obtained.  These securities  are categorized in Level II of the fair value hierarchy .  Other ABS —The fair value of other  ABS is estimated based on prices of comparable securities and spreads and  observable prepayment speeds. These securities are generally categorized in Level II of the fair value hierarchy or in Level III  when market-based transaction activity is unavailable.  The fair value of the Level III securities is generally estimated by  discounting estimated future cash flows. Foreign government securities —The fair value of foreign government securities is estimated using observed market  yields used to create a maturity curve and observed credit spreads from market makers and broker -dealers. These securities are  categorized in Level II of the fair value hierarchy .  CDO —These securities are categorized in Level III of the fair value hierarchy . The fair value of the Level III securities is  generally estimated by discounting estimated future cash flows. Derivative Instruments and Related VIE Assets/Liabilities