Affiliate Guaranty/Indemnification Agreements . We and certain of our subsidiaries have entered into the following  intercompany guarantees: •  Radian Guaranty and RMAI are parties to a cross-guaranty agreement.  This agreement provides that if either party  fails to make a payment to a policyholder , then the other party will step in and make the payment.  The obligations  of both parties are unconditional and irrevocable; however , no payments may be made without prior approval by  the insurance regulatory authority of the payor ’s state of domicile.  •  Radian Guaranty has agreed to maintain Radian Insurance Inc.’ s (“Radian Insurance”) tangible net worth at a  minimum of $30 million and to cause Radian Insurance to at all times have suf ficient liquidity to meet its current  obligations, pursuant to a Net Worth and Liquidity Maintenance Agreement (“NWLMA”) between the two  companies. •  Radian Group has agreed to guarantee, up to a maximum amount of $300 million, Radian Guaranty’ s obligations  to Radian Insurance under the NWLMA  in the event that Radian Guaranty is not able to or permitted by the  Pennsylvania Insurance Department to perform under the agreement. •  Radian Group and Radian Mortgage Insurance Inc. (“Radian Mortgage Insurance”), a subsidiary of Radian  Guaranty, are parties to a guaranty agreement in which Radian Group has agreed for the benefit of Radian  Mortgage Insurance’s creditors to make funds available on demand for the full and complete payment of all due  but unpaid liabilities. •  Radian Group and RMAI are parties to a guaranty agreement, which provides that Radian Group will make  sufficient funds available to RMAI to ensure that RMAI has a minimum of $5 million of statutory surplus every  calendar quarter. RMAI had $18.5 million of statutory capital and no RIF exposure as of  December 31, 2012. •   To allow our mortgage insurance customers to comply with applicable securities regulations for issuers of  ABS  (including MBS), we have been required, depending on the amount of credit enhancement we were providing, to  provide: (1) audited financial statements for the insurance subsidiary participating in these transactions; or  (2) a full and unconditional holding-company level guarantee for our insurance subsidiaries’  obligations in such  transactions. Radian Group has guaranteed two structured transactions for Radian Guaranty with approximately  $152.5 million of remaining credit exposure. •  The Internal Revenue Service (“IRS”) examined Radian Group’ s U.S. Consolidated federal income tax returns for  tax years 2000 through 2007, which include Commonwealth Mortgage  Assurance Company of Texas (“CMAC of  Texas”). We are currently contesting proposed adjustments resulting from the IRS examination of these tax years,  which if sustained, will result in additional income taxes of approximately $128 million plus proposed penalties of  approximately $42 million. Additionally, we would incur interest on any sustained adjustments. Ef fective  December 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. We can provide no assurance regarding the outcome of this IRS matter , which is likely to take  several years in order to resolve. Additionally, there remains significant uncertainty with regard to the amount and  timing of any potential payments under the indemnity agreement described above. See “Part I. Item 1A. Risk  Factors— The IRS is examining our tax returns for the years 2000 through 2007. ” 135