The following table describes the ratings scale we utilize for our internal ratings: (1)  Our internal ratings may be modified by the addition of a “+” or “-” to show the relative standing within a letter  category. When we refer to an obligation as “below investment grade” or “BIG,” it means we believe the obligation has significant  speculative characteristics and is subject to at least substantial credit risk. BIG obligations are internally rated in the BB, B,  CCC, CC, C or D categories. The risk management function in our financial guaranty business is responsible for the identification, analysis,  measurement and surveillance of credit, market, legal and operational risk associated with our financial guaranty transactions.  Risk management is also primarily responsible for claims prevention and loss mitigation strategies.  This discipline is applied  during the ongoing monitoring and surveillance of each exposure in the portfolio, as well as at origination of a transaction. In January 2012, Radian Asset Assurance entered into an administrative services agreement with  Assured that requires  Assured to provide surveillance, risk management, claims administration and claims payment services in connection with the  policies ceded to Assured pursuant to the Assured Cession. Additional information regarding financial guaranty risk management is contained in Notes 2 and 12 of Notes to  Consolidated Financial Statements and in “Management’ s Discussion and Analysis of Financial Condition and Results of  Operations—Critical Accounting Policies—Reserve for Losses—Financial Guaranty .” Internal Rating  (1) Rating is Assigned When our Analysis Indicates : AAA the obligor’s capacity to meet its financial commitment on the obligation is  extremely strong and it is subject to the lowest level of credit risk AA the obligor’s capacity to meet its financial commitment on the obligation is  very strong and it is subject to very low credit risk A the obligor’s capacity to meet its financial commitment on the obligation is  strong, but it is somewhat more susceptible to adverse changes in  circumstances or economic conditions than higher rated obligations and it  is subject to low credit risk BBB the obligor’s capacity to meet its financial commitment on the obligation is  adequate, but adverse changes in circumstances or economic conditions are  more likely to lead to a weakened capacity of the obligor to meet its  financial commitment on the obligation and it is subject to moderate credit  risk BB the obligation faces significant ongoing uncertainties or exposure to  adverse business, financial or economic conditions, which could lead to the  obligor’s inadequate capacity to meet its financial commitment on the  obligation and it is subject to substantial credit risk B adverse business, financial or economic conditions will likely impair the  obligor’s capacity or willingness to meet its financial commitment on the  obligation even though the obligor currently has the capacity to meet its  financial commitments on the obligation and it is subject to high credit risk CCC the obligation is currently vulnerable to nonpayment and is dependent upon  favorable business, financial and economic conditions for the obligor to  meet its financial commitment on the obligation and it is subject to very  high credit risk CC the obligation is currently highly vulnerable to nonpayment, and absent  favorable business, financial and economic conditions, the obligor is highly  likely not to have the financial capacity to meet its financial commitment  on the obligation and it is subject to extremely high credit risk C the obligation is currently extremely vulnerable to nonpayment and payment default is imminent, but the obligation has not yet experienced a payment default D there is currently a payment default on the obligation 38 ____________________