Radian Group Inc. Notes to Consolidated Financial Statements - (Continued) •  During 2012, we improved the risk-to-capital ratio for Radian Guaranty , which had a risk-to-capital ratio of  20.8 to 1  as of December 31, 2012, through a number of actions we have taken to preserve and maintain Radian Guaranty’ s  capital position, including: (1) affiliates and third-party reinsurance arrangements; (2) reductions and commutations of  risk exposure; and (3) realization of statutory investment gains. •  Throughout 2012, Radian Asset Assurance continued to reduce its financial guaranty portfolio through a series of risk  commutations, transaction settlements and terminations. Since it stopped writing business in June 2008, Radian  Asset  Assurance’s net par exposure has been reduced by 70.7% to $33.7 billion. From 2008 through the end of 2012, Radian  Asset Assurance has released financial guaranty contingency reserves of  $357.0 million (which has increased Radian  Guaranty’s statutory capital surplus by an equal amount) and paid  $383.8 million in dividends to Radian Guaranty .  -  On November 9, 2012, Radian Asset Assurance entered into an agreement with Financial Guaranty Insurance  Company (“FGIC”) to commute the remaining $822.2 million of outstanding par reinsured by Radian  Asset  Assurance from FGIC as of December 31, 2012 (the “FGIC Commutation”) in consideration of a commutation  payment of $52.4 million. This transaction was completed on January 9, 2013.  The amount of this commutation  payment was determined primarily based on existing loss reserves and unearned premium reserves, and therefore  did not have a material impact on our consolidated financial statements or Radian  Asset Assurance’s statutory  capital position.  -  In the second quarter of 2012, Radian  Asset Assurance entered into a commutation with  one of its derivative  counterparties (the “Counterparty”) to commute: (1) exposure to a directly insured tranche of an extremely  distressed collateralized debt obligation (“CDO”) of asset-backed securities (“ABS”) transaction (the “CDO of  ABS Transaction”), for which we had expected to pay claims on substantially all of the  $450.2 million net par that  was outstanding at the time of the commutation; and (2) credit protection through CDS on  six directly insured  trust preferred securities (“T ruPs”) CDO transactions, representing $699.0 million of net par outstanding at the  time of the commutation (the “T erminated TruPs CDOs”). In consideration for these commutations, Radian  Asset  Assurance paid $210.0 million, a significant portion of which (the “LPV  Initial Capital”) was deposited with a  limited purpose vehicle (an “LPV”) to cover the Counterparty’ s potential future losses on the TruPs bonds  underlying the Terminated TruPs CDOs (the “Terminated TruPs Bonds”). The commutations described in this  paragraph are referred to herein as the “CDO Commutation  Transactions.” See Note 6 for further information  regarding the accounting treatment of the  Terminated TruPs Bonds. - In January 2012, we made progress in our strategic objective of continuing to reduce our financial guaranty risk  by entering into a three-part transaction (the “Assured  Transaction”) with subsidiaries of  Assured Guaranty Ltd.  (collectively, “Assured”) that included the commutation of  $13.8 billion of financial guaranty net par outstanding  that Radian Asset Assurance reinsured from  Assured, the cession of $1.8 billion of direct public finance business  to Assured and the sale of Municipal and Infrastructure  Assurance Corporation (the “FG Insurance Shell”), a New  York domiciled financial guaranty insurance company licensed to conduct business in  37 states and the District of  Columbia that Radian Asset Assurance had acquired in 2011. The Assured Transaction reduced our financial  guaranty net par outstanding by 22.5% and provided an aggregate statutory capital benefit to Radian  Asset  Assurance and Radian Guaranty of  $100.7 million in 2012. -  In February 2013, the New York State Department of Financial Services (the “NYSDFS”) approved the release of  an additional $61.1 million of contingency reserves. -  In January 2013, $6.7 million of contingency reserves were released due to the FGIC Commutation, as discussed  below. -  In July 2012, Radian Asset Assurance paid an ordinary dividend of  $54.0 million to Radian Guaranty. -  In the second quarter of 2012, Radian  Asset Assurance released $54.5 million of contingency reserves, which  benefited Radian Guaranty’ s statutory surplus by an equal amount. -  On April 1, 2012, Radian Guaranty entered into a quota share reinsurance agreement with a third-party  reinsurance provider (the “Initial Quota Share Reinsurance  Transaction”). In the fourth quarter of 2012, Radian  Guaranty and the same third-party reinsurance provider agreed to the terms of a second quota share reinsurance  agreement (the “Second Quota Share Reinsurance  Transaction” and, together with the Initial Quota Share  Reinsurance Transaction, the “Reinsurance Transactions”) that provide for additional ceded risk. See Note 9 for  further details. 170