4. Derivative Instruments The following table sets forth our gross unrealized gains and gross unrealized losses on derivative assets and liabilities as  of the dates indicated. Certain contracts are in an asset position because the net present value of the contractual premium we  receive exceeds the net present value of our estimate of the expected future premiums that a financial guarantor of similar credit  quality to us would charge to provide the same credit protection, assuming a transfer of our obligation to such financial  guarantor as of the measurement date. (1) As a result of the CDO Commutation  Transactions described in Note 1, we established a VIE. See Note 6 for further  details. The notional value of our derivative contracts at  December 31, 2012 and 2011 was $19.2 billion and $36.5 billion,  respectively. The components of the (losses) gains included in change in fair value of derivative instruments are as follows: The valuation of derivative instruments may result in significant volatility from period to period in gains and losses as  reported on our consolidated statements of operations. Generally , these gains and losses result, in part, from changes in  corporate credit or asset-backed spreads and changes in the creditworthiness of underlying corporate entities or the credit  performance of the underlying assets.  Additionally, when determining the fair value of our liabilities, we are required to  incorporate into the fair value of those liabilities an adjustment that reflects our own non-performance risk, and consequently ,  changes in the market’s perception of our non-performance risk also result in gains and losses on our derivative instruments.  Any incurred gains or losses (which include any claim payments) on our financial guaranty contracts that are accounted for as  derivatives are recognized as a change in fair value of derivative instruments. Because our fair value determinations for  derivative and other financial instruments in our mortgage insurance and financial guaranty businesses are based on  assumptions and estimates that are inherently subject to risk and uncertainty , our fair value amounts could vary significantly  from period to period. See Note 5 for information on our fair value of financial instruments.  191 ________________ December 31, (In thousands) 2012 2011 Balance Sheets Derivative assets: Financial Guaranty credit derivative assets . . . . . . . $ 12,024 $ 15,432 NIMS related and other . . . . . . . . . . . . . . . . . . . . . . 1,585 1,780 Total derivative assets . . . . . . . . . . . . . . . . . . . . . 13,609 17,212 Derivative liabilities: Financial Guaranty credit derivative liabilities . . . . 196,406 106,505 Financial Guaranty VIE derivative liabilities . . . . . 70,467 (1) 19,501 Total derivative liabilities . . . . . . . . . . . . . . . . . . 266,873 126,006 Total derivative liabilities, net . . . . . . . . . . . . . . . . . . . . $ 253,264 $ 108,794 Year Ended December 31, (In thousands) 2012 2011 2010 Statements of Operations Net premiums earned—derivatives . . . . . . . . . . . . . . . . $ 28,693 $ 41,753 $ 47,123 Financial Guaranty credit derivatives . . . . . . . . . . . . . . (173,610 ) 597,969 (583,235 ) Financial Guaranty VIE derivatives . . . . . . . . . . . . . . . . 1,189 (10,696 ) (14,523 ) NIMS related and other . . . . . . . . . . . . . . . . . . . . . . . . . (297 ) (631 ) (1,937 ) Put Options on Money Market Committed Preferred  Custodial Trust Securities (“CPS”) . . . . . . . . . . . . . . . . — — (6,140 ) Change in fair value of derivative instruments . . . . $ (144,025 ) $ 628,395 $ (558,712 ) Radian Group Inc. Notes to Consolidated Financial Statements - (Continued)