In our financial guaranty business, Assured Guaranty is having our best year for direct new business production in more than a decade based on direct PVP results since 2009 for both the third quarter and first nine months of 2020.
And our Board of Directors has authorized additional share repurchases of $250 million.
Also on October 1st, S&P Dow Jones Indices announced that Assured Guaranty would become a component stock of the S&P SmallCap 600 index on October 7th.
Presumably, because index funds and ETFs attract the S&P 600, as well as actively managed funds benchmark to the index began accumulating positions in our shares.
KBW estimated that has the funds that track the S&P 600 will need to purchase 8.7 million shares.
There are more than 2000 funds in the SmallCap investment category.
Turning to U.S. product public finance production, we wrote $93 million of PVP in the third quarter, more than double our third quarter 2019 PVP and an 11 year record.
In terms of insured par sold, we continue to lead the industry guaranteeing 64% of the $11.9 billion of primary market insured par sold in the third quarter, which was the industry's highest quarterly insured par amount since mid-2009 and 82% higher than in last year's third quarter.
Bond insurance penetration reached 8.3%, up from last year's third quarter penetration of 5.7%.
The 7.7% penetration for the first three quarter, municipal bond insurance industry is likely to see its best annual market penetration in the insured par volume in over a decade and this is still in a very low interest rate environment.
We benefited from credit spreads that are wired than at the beginning of the year, but this is still a market where AAA benchmark yields have been below 2% almost all year.
Driven by the heightened demand for insurance, combined with a 35 [Phonetic] year-over-year increase in quarterly issuance, Assured Guaranty's third quarter originations totaled $7.5 billion of primary market par sold, essentially double the amount during the third quarter of 2019.
One of the new issues sold with our insurance in the third quarter was Assured Guaranty's largest U.S. public finance transactions since 2009, a $726 million of insured par for the Yankee Stadium project.
It refunded $335 million of our previous exposure, so our net exposure to this credit increased by $391 million.
This is one of 19 new issues that utilize $100 million or more of our insurance during the third quarter.
For the first nine months, we provided insurance on $100 million or more of par on 32 individuals issued -- individual new issues, more than in any full year over the past decade.
Actual issuance represented approximately 30% of the muni market's total new issue par volume during the first nine months of 2020 compared with 5% to 10% in recent years.
And 35% of our par insured on new issues sold in the period was taxable.
During those nine months, the par amount we insured on taxable new issues totaled $5.5 billion compared with $1.5 billion in the first nine months of 2019.
In case of credits with underlying S&P or Moody's ratings in the AA category, we insured a total of $806 million of par for the quarter and during the first nine months more than $2 billion of par.
Year-to-date through September, we provided insurance on $15.7 billion municipal new issue par sold, of which $1 billion -- which is $1 billion more than in all of 2019.
Combining primary and secondary market activity for the first nine months, we guaranteed $16.6 billion of municipal par, $6.2 billion more than in the same period last year, a 60% increase.
In international infrastructure finance, we completed the best third quarter origination since 2009's acquisition of AGM, producing $24 million of PVP, 52% more than in last year's third quarter.
The recently announced release of $13 billion in federal assistance helped to improve the conditions for reaching such an agreement.
Assured Investment Management currently manages $1 billion of our insured companies investable assets.
In terms of capital management, year-to-date at September 30th, we have already repurchased 11.4 million shares, which is well over our initial plan of approximately 10 million shares.
As for our third quarter 2020 results, adjusted operating income was $48 million or $0.58 per share.
This consists primarily of $81 million of income from our Insurance segment, a $12 million loss from our Asset Management segment and a $18 million loss from our Corporate division which -- where we reflect our holding company interest expense as well as other corporate income and expense items.
Starting with the Insurance segment, adjusted operating income was $81 million compared to $107 million in the third quarter 2019.
This includes net earned premiums and credit derivative revenues of $113 million compared with the $129 million in the third quarter of 2019.
In total, accelerations of net earned premiums were $18 million in the third quarter 2020 compared with $38 million in the third quarter of 2019.
Net investment income for the Insurance segment was $75 million compared with $89 million in the third quarter of 2019, which do not include mark-to-market gains related to our Assured Investment Management funds and other alternative investments.
As of September 30, 2020, the insurance companies have authorization to invest up to $500 million in funds managed by Assured Investment Management, of which over $350 million had been deployed.
The change in fair value of our investments in Assured Investment Management funds was a $13 million gain in the third quarter 2020 across all strategies.
These gains were recorded in equity and earnings of investees, along with an additional $7 million gain on other non-Assured Investment Management alternative investments with a carrying value of almost $100 million.
This compared to only $1 million in fair value gains in the third quarter of 2019.
Loss expense in the Insurance segment was $76 million in the third quarter 2020 and was primarily related to economic loss development on certain Puerto Rico exposures.
In the third quarter of 2019, loss expense was $37 million also primarily related to Puerto Rico exposures, but was partially offset by a benefit in the U.S. RMBS transactions.
The net economic development in the third quarter 2020 was $70 million, which mostly consisted of $56 million in loss development for the U.S. public finance sector principally Puerto Rico exposures.
The Asset Management segment adjusted operating income was a loss of $12 million.
Additionally, price volatility and down grades have triggered over-collateralization provisions in CLO transactions that resulted in the third quarter 2020 management fee deferrals of approximately $3 million.
Adjusted operating loss for the Corporate division was $18 million for the third quarter of 2020 compared with $28 million for the third quarter of 2019.
It also includes Board of Directors and other corporate expenses and in the third quarter of 2020, it also include a $12 million benefit in connection with the separation of the former Chief Investment Officer and Head of Asset Management from the company.
From a liquidity standpoint, the holding company currently have cash and investment available for liquidity needs and capital management activities of approximately $82 million, of which $20 million reside AGL.
In the third quarter 2020, the effective tax rate was a benefit of 32.7% compared with a provision of 16.3% in the third quarter 2019.
The tax benefit in the third quarter of 2020 was primarily due to a $17 million release of reserves for uncertain tax positions upon the closing of the 2016 audit year.
Turning to our capital management strategy, in the third quarter of 2020, we repurchased 1.9 million shares for $40 million for an average price of $20.72 per share.
Since the end of the quarter, we have purchased an additional 1.7 million shares for $46 million, bringing our year-to-date share repurchases as of today to over 13 million shares.
Since January 2013 our successful capital management program has returned $3.6 billion to shareholders, resulting in a 61% reduction in total shares outstanding.
The cumulative effect of these repurchases was a benefit of approximately $25.43 per share in adjusted operating shareholders' equity and approximately $45.48 in adjusted book value per share, which helped drive these important metrics to new record highs of $73.80 in adjusted operating shareholders' equity per share and over $108 million of adjusted book value per share.

Summary:
As for our third quarter 2020 results, adjusted operating income was $48 million or $0.58 per share.