Our overall ceded reinsurance premiums in 2005 were lower than those in 2004. During 2005, we discontinued our professional liability per risk treaty. Underwriting actions we have taken in recent years have resulted in lower average limits on those large risks we write, which we believe made this treaty no longer economical. On our casualty clash treaty, which operates like a catastrophe treaty, we increased our retention from $50 million to $75 million. We did not renew a high excess surety per risk treaty as we believe the cost was not justified. On our commercial property per risk treaty, our retention remained at $15 million. Our property catastrophe treaty for events in the United States was modified to increase the coverage in the northeastern part of the country by $100 million. Our property catastrophe treaty for events outside the United States was modified to increase our retention from $25 million to $50 million.
Hurricane Katrina may change in the future, we do not expect that any such change would have a material effect on the Corporation’s results of operations, financial condition or liquidity.
A number of states have implemented legislative and judicial reforms that focus the courts’ attention on the claims of the most seriously injured. Legislation that sets medical criteria that must be met for plaintiffs to proceed with their claims has been enacted in several states and is pending in others. Similarly, judicial reforms such as inactive dockets, which preserve the right to sue for those who do not currently meet the specific medical criteria, have been established in several jurisdictions.
the possibility, however remote, of federal legislation that would address the asbestos problem.
Reinsurance Recoverable. Reinsurance recoverable is the estimated amount recoverable from reinsurers related to the losses we have incurred. At December 31, 2006, reinsurance recoverable included $621 million recoverable with respect to paid losses and loss expenses, which is included in other assets, and $2.6 billion recoverable on unpaid losses and loss expenses.
We experienced favorable development of $80 million due to a reduction of loss reserves related to the September 11 attack.
The notional amount of CFS’s remaining credit default swaps was $1.1 billion at December 31, 2006. Our realistic loss exposure is a very small portion of the $1.1 billion notional amount as our position is senior to subordinated interests of about $600 million in the aggregate. In addition, using our internal ratings models, we estimate that the credit ratings of the remaining individual portfolio credit default swaps at December 31, 2006 were AAA.
Capital resources provide protection for policyholders, furnish the financial strength to support the business of underwriting insurance risks and facilitate continued business growth. At December 31, 2006, the Corporation had shareholders’ equity of $13.9 billion and total debt of $2.5 billion.
Our strong underwriting results continued to generate substantial new cash in 2006. New cash from operations available for investment by the property and casualty subsidiaries was approximately $2.7 billion in 2006 compared with $3.4 billion in 2005 and $3.8 billion in 2004. New cash available was lower in 2006 than in 2005 due primarily to substantially higher income tax payments and lower premium receipts. New cash available in 2005 was lower than in 2004 due to a significant increase in paid losses in 2005 whereas premium receipts were only modestly higher compared with 2004. The increase in paid losses in 2005 was due primarily to directors and officers liability payments related to accident years 2002 and prior, payments related to Hurricane Katrina and payments related to two surety claims.