What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-02-29 compared with 2023-02-28 · 164 added, 237 removed, 502 unchanged (44% of the section changed)

4 unchanged sentences

We are engaged in the business of writing and assuming residential mortgage guaranty insurance.

The insurance covers a portion of the unpaid principal balance of Low Down Payment Loans and protects lenders and investors against certain losses resulting from nonpayment of loans secured by mortgages, deeds of trust, or other instruments constituting a first lien on residential real estate.

The insurance covers a portion of the unpaid principal balance of Low Down Payment Loans (mortgage loans where the loan amount exceeds 80% of the value of the home) and protects lenders and investors against certain losses resulting from nonpayment of loans secured by mortgages, deeds of trust, or other instruments constituting a first lien on residential real estate.

We facilitate the sale of mortgages to the secondary market, including to private investors as well as the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”).

Fannie Mae and Freddie Mac are government-sponsored enterprises and are collectively referred to as the “GSEs.” Credit protection and liquidity through secondary market sales allow mortgage lenders to increase their lending capacity, manage risk and expand financing access to prospective homeowners, many of whom are first time home buyers (“FTHBs”).

We have a large and diverse customer base maintaining enduring relationships across the mortgage origination market, including with national banks, non-bank mortgage lenders, local mortgage bankers, community banks and credit unions.

In both 2022 and 2021, we provided new insurance coverage to approximately 1,800 customers.

Fannie Mae and Freddie Mac are government-sponsored enterprises (collectively referred to as the “GSEs”).

Credit protection and liquidity through secondary market sales allow mortgage lenders to increase their lending capacity, manage risk and expand financing access to prospective homeowners, many of whom are first time home buyers (“FTHBs”).

We have a large and diverse customer base and maintain enduring relationships across the mortgage origination market, including with national banks, non-bank mortgage lenders, local mortgage bankers, community banks and credit unions.

In 2023, we provided new insurance coverage to over 1,700 customers.

For the full years ended December 31, 2023, 2022 and 2021 we generated new insurance written (“NIW”) of $53.1 billion, $66.5 billion and $97.0 billion, respectively.

5 unchanged sentences

Our CRT program is a material component of our strategy, and we believe it helps to protect future business performance and stockholder capital under stress scenarios by transferring risk from our balance sheet to highly rated counterparties or to investors through collateralized transactions.

As of December 31, 2022, we had a published PMIERs sufficiency ratio of 165%, representing $2,050 million of available assets above the published PMIERs requirement and approximately 89% of our insured portfolio was covered by our CRT program.

Our PMIERs sufficiency ratio, which is based on the published requirements applicable to private mortgage insurers, was above the requirement imposed by the GSE Restrictions of 120% in 2022.

As of December 31, 2023, we had a PMIERs sufficiency ratio of 161%, representing $1,887 million of available assets above the PMIERs requirement and approximately 90% of our insured portfolio was covered by our CRT program.

Our Corporate Information

Enact Holdings, Inc.

(“EHI,” together with its subsidiaries, the “Company,” “we,” “us,” or “our”) (formerly known as Genworth Mortgage Holdings, Inc.) was a wholly owned subsidiary of Genworth Financial, Inc.

(“Genworth” or “Parent”) since EHI’s incorporation in Delaware in 2012 until our initial public offering on September 20, 2021.

(“EHI,” together with its subsidiaries, the “Company,” “we,” “us,” or “our”) was a wholly owned subsidiary of Genworth Financial, Inc.

(“Genworth”) since EHI’s incorporation in Delaware in 2012 until our initial public offering on September 20, 2021.

On May 3, 2021, EHI amended its certificate of incorporation to change its name from Genworth Mortgage Holdings, Inc.

This amendment also authorized EHI to issue 600,000,000 shares of common stock, each having a par value of $0.01 per share.

Concurrently, we entered into a share exchange

agreement with Genworth Holdings, Inc.

Concurrently, we entered into a share exchange agreement with Genworth Holdings, Inc.

(“Genworth Holdings”), pursuant to which Genworth Holdings exchanged the 100 shares of our common stock owned by it, representing all of our issued and outstanding capital stock, for 162,840,000 newly issued shares of common stock, par value $0.01, of EHI.

8 unchanged sentences

EMICO was renamed from Genworth Mortgage Insurance Corporation effective February 7, 2022.

Our operations are all domestic with the exception of a run-off insurance block with reference properties in Mexico (“run-off business”), which is immaterial to our results.

We also offer mortgage-related insurance and reinsurance through our wholly owned Bermuda-based subsidiary, Enact Re Ltd.

("Enact Re").

We contributed $250 million into Enact Re in May 2023 and an additional $250 million in November 2023.

As of December 31, 2023, Enact Re provided excess-of-loss reinsurance relating to GSE risk share and reinsured EMICO’s new and existing insurance in-force under quota share reinsurance agreements.

Our operations also include a run-off insurance block with reference properties in Mexico (“run-off business”), which is immaterial to our results.

Our objective is to support our mission to help people buy a house and keep it their home, while leveraging our competitive strengths to maximize value for our stockholders.

3 unchanged sentences

• Invest to increase differentiation, drive efficiencies, and enhance decision-making.

• Seek to outpace industry average insurance-in-force growth.

Maintain strong capital levels and earnings profile

2 unchanged sentences

Deliver attractive risk-adjusted returns

• Write profitable new business and leverage proprietary risk assessment and pricing tools to target growth and drive increased returns.

• Strive to maximize stockholder value through a disciplined capital allocation policy that supports existing policyholders, grows the business, and returns excess capital to stockholders.

• Write profitable new business that delivers attractive risk-adjusted returns.

• Strive to maximize stockholder value through a disciplined capital allocation policy that supports existing policyholders, invests in attractive new business opportunities and returns excess capital to stockholders.

United States Mortgage Market

4 unchanged sentences

The secondary market includes institutions buying and selling mortgages in the form of whole loans or securitized assets, such as mortgage-backed securities (“MBS”).

The GSEs are the largest participants in the secondary mortgage market, buying residential mortgages from banks and other primary lenders as part of their government mandate to provide liquidity and stability in the United States housing finance system.

According to the companies’ earnings reports, the GSEs held or guaranteed approximately $6.7 trillion as of September 30, 2022, or around 51%, of total United States 1-4 family residential mortgage debt according to most recent data from the Federal Reserve.

The GSEs are the largest participants in the secondary mortgage market, buying residential mortgages from banks and other primary lenders as part of their government mandate to provide access, liquidity and stability in the United States housing finance system.

According to the earnings reports of the GSEs, the GSEs held or guaranteed approximately $7.7 trillion as of September 30, 2023, or around 55%, of total United States 1-4 family residential mortgage debt according to most recent data from the Federal Reserve.

The GSE charters generally require credit enhancement for Low Down Payment Loans to be eligible for purchase by the GSEs.

4 unchanged sentences

For more information about the financial and other requirements of the GSEs, see “Item 1A.

Risk Factors—Risks Relating to Our Business—If we are unable to continue to meet the requirements mandated by PMIERs, the GSE Restrictions and any additional restrictions imposed on us by the GSEs, we may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.”

Risk Factors—Risks Relating to Our Business—If we are unable to continue to meet the requirements mandated by PMIERs, or any additional restrictions which may be imposed on us by the GSEs, we may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.”

Private Mortgage Insurance

11 unchanged sentences

Federal, State and Local Government Agencies

Private mortgage insurers, including us, compete for mortgage insurance business directly with federal government agencies, principally the FHA and the VA, and, to a lesser extent, state and local housing finance agencies.

Private mortgage insurers, including the Company, compete for mortgage insurance business directly with federal government agencies, principally the FHA and the VA, and, to a lesser extent, state and local housing finance agencies.

According to Inside Mortgage Finance , for the first three quarters of 2023, the FHA had a 32% share, and the VA a 22% share, of the mortgage insurance market.

45 unchanged sentences

GSE guidelines generally provide that a borrower meeting certain conditions may require the mortgage servicer to cancel mortgage insurance coverage upon the borrower’s request when the principal balance of the loan is 80% or less of the property’s current value.

In addition to the GSE guidelines, HOPA provides an obligation for lenders to automatically terminate a borrower’s obligation to pay for mortgage insurance coverage once the LTV ratio reaches 78% of the original value, and also provides that a borrower may request cancellation of their obligation to pay for mortgage insurance when the LTV ratio, based on the current value of the property, reaches 80%.

In addition, some states impose their own mortgage insurance notice and cancellation requirements on mortgage loan servicers.

15 unchanged sentences

The majority of our in-force exposures and all of our NIW is considered primary insurance, meaning we insure the loss on each loan up to the coverage amount without any stop loss or deductible for that loss.

Our remaining pool exposures are significantly seasoned and represent less than 0.2% of total risk in-force (“RIF”).

Our remaining pool exposures are significantly seasoned and represent only 0.1% of total risk in-force (“RIF”).

Our primary insurance portfolio is diversified through time.

The distribution of our exposure by book year is influenced by market size opportunities, our commercial strategies and the persistency of our in-force policies.

In 2021 and 2020, our portfolio was impacted by low persistency, a large origination market and commercial success in the market, leading to a concentration in recent years as the 2022, 2021 and 2020 book years represent 25%, 33% and 22%, respectively, of our primary IIF.

In 2021 and 2020, our portfolio was impacted by low persistency, a large origination market and commercial success in the market.

A period of higher persistency in 2022 and 2023 followed, leading to a more balanced concentration of IIF in recent years as the 2023, 2022 and 2021 book years represent 19%, 23% and 27%, respectively, of our primary IIF.

Our primary exposures from legacy books originated prior to 2009 continue to resolve in an orderly fashion and represented 2% of both our primary IIF and primary RIF as of December 31, 2023.

These books continue to represent a larger portion of our delinquencies and reserves driven by the continued aging of those delinquencies.

We measure the credit characteristics of our portfolio as represented in the original commitment for insurance.

1 unchanged sentence

Generally, a higher LTV ratio has a higher likelihood of claim than a lower LTV loan, absent other mitigating loan characteristics, which we consider in our underwriting and pricing.

The weighted average LTV of our IIF as of December 31, 2022 was 93% and the weighted average LTV of our NIW was 92% in 2022 and 2021.

The weighted average LTV of our IIF as of December 31, 2023 was 93% and the weighted average LTV of our NIW was 93% in 2023 and 92% in 2022.

The credit profile of our portfolio as represented by FICO score remains strong.

4 unchanged sentences

As of December 31, 2023, our largest state concentration was in California, which represented 13% of primary RIF.

Our largest MSA/MD is the Chicago-Naperville, IL Metropolitan Division, which represents 3% of primary RIF.

Our long-standing industry presence has enabled us to build active customer relationships with approximately 1,800 mortgage lenders across the United States.

Our largest Metropolitan Statistical Area (“MSA”) or Metro Division (“MD”) is the Phoenix, AZ, MSA, which represents 3% of primary RIF.

Our long-standing industry presence has enabled us to build active customer relationships with over 1,700 mortgage lenders across the United States.

Our customers are broadly diversified by size, type and geography and include large money center banks, non-bank lenders, national and local mortgage bankers, community banks and credit unions.

Our largest customer accounted for 18% of our total NIW in 2022 and our top five customers generated 30% of our NIW in 2022.

One customer accounted for 14% of our total NIW during 2021 and 12% of our NIW during 2020.

Additionally, no customer had earned premiums that accounted for more than 10% of our total revenues for the years ended December 31, 2022, 2021 and 2020.

Our largest customer accounted for 19% of total NIW and 10% of our total revenues for the year ended December 31, 2023.

No other customer accounted for 10% or more of total revenues or NIW for the year ended December 31, 2023.

This customer also accounted for 18% and 14% of our total NIW during the years ended December 31, 2022 and 2021, respectively.

No customer accounted for more than 10% of our total revenues and no other customer accounted for more than 10% of NIW for the years ended December 31, 2022 or 2021.

Our top five customers generated 33% of our NIW in 2023.

We believe that our success in establishing strong, sustained relationships and our ability to capture new customers is attributable to our comprehensive value proposition.

10 unchanged sentences

Finally, our consulting services provide customers with strategy and process consulting to help improve quality, reduce costs and grow their business.

In 2019, we launched a separate mortgage insurance policy underwritten by our wholly owned subsidiary, Enact Mortgage Insurance Corporation of North Carolina (“EMIC-NC”), to insure primary individually underwritten residential mortgage loans as well as portfolios of residential mortgage loans at or after origination that are not intended for sale to the GSEs.

We also offer a separate mortgage insurance policy underwritten by our wholly owned subsidiary, Enact Mortgage Insurance Corporation of North Carolina (“EMIC-NC”), to insure primary individually underwritten residential mortgage loans as well as portfolios of residential mortgage loans at or after origination that are not intended for sale to the GSEs.

Given that EMIC-NC is not a GSE approved insurer, it is not subject to the requirements mandated by PMIERs.

3 unchanged sentences

As an established private mortgage insurance provider, we have long-standing relationships with our customers’ technology organizations, as well as with the key pricing and loan origination/servicing platform providers.

In addition, we have an experienced technology integration team that allows us to quickly customize loan delivery solutions for our customers.

By providing customers an easy way to quote and order our mortgage

insurance products, either through our award-winning ordering and rate quote website or directly within customers’ systems, we believe we make the transaction easy, allowing us to drive repeat volume.

we have an experienced technology integration team that allows us to quickly customize loan delivery solutions for our customers.

By providing customers an easy way to quote and order our mortgage insurance products, either through our award-winning ordering and rate quote website or directly within customers’ systems, we believe we make the transaction easy, allowing us to drive repeat volume.

Risk Management and Oversight

2 unchanged sentences

We believe our risk management framework is appropriately designed to manage volatility in our business performance and protect our balance sheet.

We believe this framework encompasses all major risks to which we are exposed, including credit risk, market risk, insurance risk, housing risk, operational risk, model risk, IT risk and any other risk that poses a material threat to the viability of the Company.

We believe this framework encompasses all major risks to which we are exposed, including credit risk, market risk, insurance risk, housing risk, operational risk, model risk, IT risk, including cybersecurity risk, and any other risk that poses a material threat to the viability of the Company.

Our risk management philosophy is designed to ensure all relevant risks are routinely identified, assessed, managed, monitored and addressed.

2 unchanged sentences

Our risk profile, top risks and any emerging risks are regularly reviewed in our senior management risk committee, chaired by our Chief Risk Officer who has direct reporting obligations to the Risk Committee of our Board.

We believe our risk management and oversight structure is appropriate for our business, but we cannot be assured that it will be adequate in mitigating all our risks.

See “Item 1A.

Risk Factors—Risks Relating to Our Business—Our risk management programs may not be effective in identifying or adequate in controlling or mitigating the risks we face.”

Modeling and Analytics

59 unchanged sentences

Pricing is highly competitive in the mortgage insurance industry, with industry participants competing for market share, customer relationships and overall value.

Recent pricing trends have introduced an increasing number of loan, borrower, lender and property attributes, resulting in expanded granularity in pricing regimes and a shift from traditional published rate cards to dynamic pricing engines that better align price and risk.

To appropriately align price and risk, dynamic pricing engines utilize granular pricing models based on a number of loan, borrower, lender and property risk attributes.

Our risk-based pricing engine was developed to evaluate returns and volatility under both the PMIERs capital framework and our internal economic capital framework, which is sensitive to economic cycles and current housing market conditions.

6 unchanged sentences

Our CRT program also provides capital relief under PMIERs and state insurance capital requirements.

In normal market

conditions, we believe our CRT program also enhances our return profile.

Given the volatility protection and capital relief at attractive terms, CRT enables us to employ an “acquire, manage and distribute” strategy.

In normal market conditions, we believe our CRT program also enhances our return profile.

Given the volatility protection

and capital relief at attractive terms, CRT enables us to employ an “acquire, manage and distribute” strategy.

We believe our CRT program is a material component of our strategy and helps to protect future business performance and stockholder capital under stress scenarios.

Our CRT program distributes risk to both highly rated counterparties through our traditional reinsurance program, as well as to insurance-linked note (“ILN”) investors via fully collateralized special purpose reinsurance vehicles.

Our reinsurance transactions generally cover a subset of loans in a given book year and have been structured as excess of loss (“XOL”) coverage where typically both the attachment and detachment points of the ceded risk tier are within the PMIERs capital requirements at inception, providing both loss volatility protection and PMIERs capital credit.

Our traditional reinsurance program utilizes excess-of-loss (“XOL”) and quota share insurance coverage.

Our XOL reinsurance transactions generally cover a subset of loans in a given book year where typically both the attachment and detachment points of the ceded risk tier are within the PMIERs capital requirements at inception, providing both loss volatility protection and PMIERs capital credit.

Each reinsurance treaty has a term of ten years or more and provides a unilateral right to commute prior to the full term, subject to certain performance triggers.

We select the type and structure of our CRT transactions based on a variety of factors including, but not limited to, capacity, cost, flexibility, sustainability and diversification.

Since 2015, we have executed $4.6 billion of CRT transactions across both traditional reinsurance arrangements and ILN transactions through December 31, 2022, with approximately 89% of our RIF insurance covered under our current CRT program.

We expect to begin transferring losses at an approximate 30 to 35% lifetime book year loss ratio and extend up to an approximate 60 to 70% lifetime book year loss ratio at current pricing assumptions and depending on our co-participation level within the reinsurance tier.

Through our traditional reinsurance transactions, we have executed $2.8 billion of XOL reinsurance coverage with highly rated reinsurers covering the 2009 to 2022 book years.

The Company’s traditional reinsurance coverage is provided by a panel of reinsurance partners each currently rated “A-” or better by Standard & Poor’s (“S&P”) or A.M.

Under our quota share reinsurance agreements, the reinsurer receives a premium in exchange for covering an agreed-upon portion of incurred losses.

Since 2015 and through December 31, 2023, we have executed $5.0 billion of excess of loss transactions across both traditional reinsurance arrangements and ILN transactions and $1.9 billion of ceded RIF through quota share transactions.

Our CRT program provided an estimated aggregate of $1.7 billion of PMIERs capital credit as of December 31, 2023.

The Company’s traditional reinsurance coverage is provided by a panel of reinsurance partners each currently rated “A-” or better by Moody’s, Standard & Poor’s (“S&P”) or A.M.

Best Company, Inc.

These reinsurers are contractually required to collateralize a portion (typically 20 to 30%) of the reinsurance exposures consistent with PMIERs.

Through our ILN transactions, we have executed $1.8 billion of XOL reinsurance coverage supported by capital markets investors via fully collateralized special purpose reinsurance vehicles covering a portion of the 2014 to 2021 book years.

The notes are non-recourse to us and our affiliates.

Our CRT program provided an estimated aggregate of $1.6 billion of PMIERs capital credit and $1.8 billion of loss coverage as of December 31, 2022.

Delinquencies, Loss Management and Claims

2 unchanged sentences

The incidence of delinquency is affected by a variety of factors, including housing price appreciation or depreciation, unemployment, the level of borrower income, divorce, illness, interest rate levels, general borrower creditworthiness and macroeconomic conditions.

Risk Factors—Risks Relating to Our Business—A deterioration in economic conditions, a severe recession or a decline in home prices, all of which could be driven by many potential factors, including inflation, may adversely affect our loss experience.” Delinquencies that are not cured result in a claim.

Risk Factors—Risks Relating to Our Business—A deterioration in economic conditions, a severe recession or a decline in home prices may adversely affect our loss experience.” Delinquencies that are not cured result in a claim.

Our loss mitigation and claims area is led by seasoned personnel who are supported by default tracking and claims processing capabilities within our integrated platform.

1 unchanged sentence

We have granted loss mitigation delegation to the GSEs and servicers, whereby they perform certain loss mitigation efforts on our behalf.

Moreover, the CFPB servicing rule obligates servicers to engage in early intervention and loss mitigation efforts with a borrower prior to foreclosure.

Moreover, the Consumer Financial Protection Bureau (“CFPB”) servicing rule obligates servicers to engage in early intervention and loss mitigation efforts with a borrower prior to foreclosure.

These efforts have traditionally involved loan modifications intended to enable qualified borrowers to make restructured loan payments or efforts to sell the property, thereby potentially reducing claim amounts.

With the COVID-19 pandemic, we have experienced unprecedented use of forbearance plans nationwide to assist

borrowers including the ability to extend forbearance beyond 12 months.

With the COVID-19 pandemic, we experienced unprecedented use of forbearance plans nationwide to assist borrowers including the ability to extend forbearance beyond 12 months.

Historically, the use of forbearance plans was limited to 12 months and used for a natural disaster that impacted a region of the country.

At the conclusion of the forbearance term, a borrower may either bring the borrower’s loan current, defer any missed payments until the end of their loan, or the loan can be modified through a repayment plan or extension of the mortgage term.

At the conclusion of the forbearance term, a borrower could either bring the borrower’s loan current, defer any missed payments until the end of their loan, or the loan can be modified through a repayment plan or extension of the mortgage term.

Given the relative success of COVID-19 related forbearance plans, the industry has explored expanding forbearance as a

loss mitigation strategy.

In 2023, the GSEs announced and implemented new loss mitigation programs that allow for six-month payment deferrals for borrowers facing financial hardship.

Our goal is to keep borrowers in their homes.

2 unchanged sentences

Various factors affect the frequency and severity of claims, including LTV at the time of foreclosure, size and coverage percentage of a loan, property values, employment levels and interest rates.

Any delays in foreclosure, including foreclosure moratoriums imposed by state and local governments and the GSEs, such as those due to COVID-19, could cause our losses to increase as expenses accrue for longer periods or if the value of foreclosed homes further decline during such foreclosure delays.

For loans insured on or after October 1, 2014, our mortgage insurance policies limit the number of months of unpaid interest and associated expenses that are included in the mortgage insurance claim amount to a maximum of 36 months.

13 unchanged sentences

We also periodically receive claim notices that request coverage for costs and expenses associated with items not covered under our policies, such as losses resulting from property damage to a covered home.

We actively review claim notices to ensure we

pay only for covered expenses.

We actively review claim notices to ensure we pay only for covered expenses.

We deem a reduction in the claim amount paid relative to the amount requested in the claim notice to be a curtailment.

13 unchanged sentences

We also provide our customers secure access to our web-based portals to facilitate transactions and provide customers with access to their account information.

We have made a number of strategic investments in our technology infrastructure, including our:

• Proprietary underwriting platform;

• Lender and servicer integration capabilities;

• Proprietary risk modeling platform;

• Business rules engine that automatically enforces our eligibility guidelines and pricing rules;

• Management and portfolio reporting capabilities;

• Award-winning rate quote and ordering website.

We are regularly upgrading and enhancing our systems and technology, with an eye towards expanding our capabilities, improving productivity and enhancing our customer experience, including:

6 unchanged sentences

In addition, we have a dedicated “AI, Innovation & Automation” team to ensure that we focus on using the latest technologies to further automate our business and differentiate our products and services.

Cybersecurity

We employ a multi-layered approach to data security and data privacy.

This approach begins with our information security program, which is based on National Institute of Standards and Technology, 800-53.

Our program includes policies and standards that delineate requirements for the implementation and on-going maintenance of our information systems as well as security responsibilities for all personnel.

We review these policies and standards periodically and update as needed.

We take steps to ensure that all information security policies are maintained and enforced and that all personnel are educated on their responsibilities.

We maintain a “defense-in-depth” model, which employs multiple layers of protection for the entire company.

Among other things, we perform external and internal risk assessments, penetration testing, vulnerability scanning, secure code development and monthly security awareness training (including phishing awareness tests) for all personnel.

The chief information officer and chief information security officer, together with our compliance organization, among others, ensure the requirements of our information security program satisfy applicable legal and regulatory requirements.

Our chief information security officer also provides regular updates and reports to our senior leaders, including an annual cybersecurity report to the board that covers, among other topics, the information security organization, material risks, technical threats, information technology security infrastructure, patching and vulnerability management, cyber incidents, an annual cyber tabletop exercise and incident preparedness, supplier management, security awareness training, cybersecurity personnel/staffing and a cyber threat assessment.

The board also reviews the chief compliance officer’s quarterly report, which includes information regarding data security incidents that meet the risk criteria for inclusion in the report.

Through this reporting process, our board oversees our information security program and risks related thereto.

As discussed above, strong risk management is a critical part of our business.

Our Risk Committee of the Board of Directors, in coordination with our management risk committee, has primary responsibility for overseeing cybersecurity, information technology and information security systems, processes, policies and risk management and the effectiveness of security controls.

Ratings with respect to the financial strength of operating subsidiaries are an important factor in establishing the competitive position of insurance companies.

Ratings are important to maintaining public confidence in us and our ability to market our products.

Rating organizations review the financial performance and condition of most insurers and provide opinions regarding financial strength, operating performance and ability to meet obligations to policyholders.

Rating organizations review the financial

performance and condition of most insurers and provide opinions regarding financial strength, operating performance and ability to meet obligations to policyholders.

As of February 29, 2024, EMICO, our principal U.S.

mortgage insurance subsidiary, was rated “BBB+” by S&P, “Baa1” by Moody’s and “BBB+” by Fitch Ratings, Inc.

(“Fitch”) in terms of financial strength.

mortgage insurance subsidiary, was rated “A-” by S&P, “A3” by Moody’s, “A-” by Fitch Ratings, Inc.

(“Fitch”), and “A-” by A.M.

Best in terms of financial strength.

Investment Portfolio

The investment portfolios of our insurance subsidiaries are directed by the Enact Investment Committee, a management-level committee, with Genworth serving as the investment manager.

Under the terms of our investment management agreement, the Company is charged an investment management fee by our Parent.

The total investment expenses paid to our Parent were $5.5 million and

$5.2 million for the years ended December 31, 2022 and 2021, respectively.

Under the terms of our investment management agreement, the Company is charged an investment management fee by Genworth.

The total investment expenses paid to Genworth were $5.7 million and $5.5 million for the years ended December 31, 2023 and 2022, respectively.

See Note 11 to our audited consolidated financial statements for further information.

The investment portfolio of EHI is directed by a separate newly formed management-level EHI Investment Committee with a third-party investment manager.

The investment portfolio of EHI is directed by a separate management-level EHI Investment Committee with a third-party investment manager.

In addition, for certain asset classes, we utilize external asset management.

24 unchanged sentences

• In addition to a competitive compensation program, we offer our employees benefits such as life and health insurance, paid time off, paid parental leave, childcare subsidies, retirement savings plans, financial planning services, an Employee Assistance Program and a broad fitness reimbursement program to support physical and mental health.

Our office building also houses an employee fitness center providing equipment, virtual classes, and massage therapy options on-site.

• We offer a multitude of professional development and career enrichment courses, including in the areas of leadership, professional skills, and industry-specific matters, as well as a mentor program and an extensive training program for future senior leaders.

1 unchanged sentence

We routinely assess talent, engage in deep succession planning at all levels of the organization and provide feedback to our employees through a performance review process.

• Our employee-led Diversity & Inclusion Council helps to build an inclusive culture through company-wide events, participation in our recruitment efforts and by educating our employees on the experiences and perspectives of others.

• Our employee-led Diversity, Equity & Inclusion Council helps to build an inclusive culture through company-wide events, participation in our recruitment efforts and by educating our employees on the experiences and perspectives of others.

We continue to focus on building a pipeline of talent to create more opportunities for workplace diversity and to support greater representation within our Company.

4 unchanged sentences

• We celebrate our talent by showcasing employee achievements and expertise in industry publications, at events and conferences, and on social media.

By amplifying their reach and ours, in 2022, 10 employees were recognized as award winners by external organizations, and we were recognized as an organization on three occasions.

Enact was recognized as an award winner by external organizations on five occasions throughout 2023.

As the severity of COVID-19 started to unfold at the beginning of 2020, our response included the implementation of policies to protect our employees.

In early March 2020, we closed our offices and implemented a complete work from home policy through March 2022, as well as providing additional financial, health and wellness resources.

We instituted a return to office plan in March 2022 which operates as a hybrid working model for a majority of our Raleigh-based employees.

We instituted a return to office plan in March 2022 that continues to operate as a hybrid working model for a majority of our Raleigh-based employees.

Our insurance operations are generally subject to extensive oversight and a wide variety of laws and regulations.

1 unchanged sentence

Our insurance products and business also are affected by federal, state and local laws, including tax laws.

The primary purpose of the state insurance laws and regulations regulating our insurance business is to protect our insureds, not our stockholders.

These laws and regulations are regularly re-examined by state regulators and any changes to these laws or new laws may be more restrictive or otherwise adversely affect our operations.

Insurance and other regulatory authorities (including state law enforcement agencies and attorneys general) may make inquiries regarding compliance with insurance, securities and other laws and regulations, and we cooperate with such inquiries and take corrective action when warranted.

United States Insurance Regulation

Our Bermuda domiciled insurer, Enact Re, is subject to Bermuda law and is subject to regulation by the Bermuda Monetary Authority (“BMA”).

The primary purpose of the U.S.

and Bermudian insurance laws and regulations regulating our insurance business is to protect our insureds, not our stockholders.

These laws and regulations are regularly re-examined by insurance regulators and any changes to these laws or new laws may be more restrictive or otherwise adversely affect our operations.

Insurance and other regulatory authorities (including state law enforcement agencies and attorneys general and the BMA) may make inquiries regarding compliance with insurance, securities and other laws and regulations, and we cooperate with such inquiries and take corrective action when warranted.

Insurance Company Regulation

Our insurance subsidiaries are licensed and regulated in all jurisdictions in which they conduct insurance business.

3 unchanged sentences

In addition, states may require actuarial justification of rates on the basis of the insurer’s loss experience, expenses and future projections.

Enact Re is subject to a similar Bermudian regulatory regime.

Mortgage guaranty insurance premium rates and policy forms are subject to regulation in every jurisdiction in which our insurance subsidiaries are licensed to transact business in order to protect policyholders against the adverse effects of excessive, inadequate or unfairly discriminatory rates.

21 unchanged sentences

Similarly, with respect to our contract underwriting entity, Enact Financial Services, Inc., prior approval from state banking commissioners is required in some jurisdictions prior to acquiring control of our contract underwriting entity, which is licensed or has an approved license exemption in most states.

Our insurance subsidiaries’ payment of dividends or other distributions to our holding company is regulated by the state insurance laws and regulations of their respective domiciliary states.

domiciled insurance subsidiaries’ payment of dividends or other distributions to our holding company is regulated by the state insurance laws and regulations of their respective domiciliary states.

Our insurance subsidiaries must deliver notice to the Commissioner of any dividend or distribution within 5 business days after declaration of the dividend or distribution, and at least 30 days before payment thereof.

4 unchanged sentences

In addition, insurance regulators may prohibit the payment of ordinary dividends and distributions or other payments by our insurers (such as a payment under a tax sharing agreement, for employment or other services) if they determine that such payment could be adverse to our policyholders or would not be fair and reasonable to the insurer.

Enact Re’s payment of dividends and distributions is subject to Bermudian law and oversight by the BMA.

National Association of Insurance Commissioners

The NAIC is an organization, the mandate of which is to benefit state insurance regulatory authorities and consumers by promulgating model insurance laws and regulations for adoption by the states.

The NAIC’s mandate is to benefit state insurance regulatory authorities and consumers by promulgating model insurance laws and regulations for adoption by the states.

The NAIC also provides standardized insurance industry accounting and reporting guidance through the NAIC Accounting Manual.

However, model insurance laws and regulations are only effective when adopted by the states, and Statutory Accounting Principles (“SAP”) continue to be established by individual state laws, regulations and permitted practices.

However, model insurance laws and regulations are only effective when adopted by the states, and NAIC Statutory Accounting Principles (“SAP”) may be superseded by individual state laws,

regulations and permitted practices.

Changes to the NAIC Accounting Manual or modifications by the various state insurance departments may affect the statutory capital and surplus of our insurance subsidiaries.

The NAIC adopted the Risk Management and Own Risk and Solvency Assessment Model Act (the “ORSA Model Act”).

The ORSA Model Act requires an insurance holding company to, regularly, no less than annually, assess the adequacy of our insurance subsidiaries’ risk management framework, and current and estimated projected future solvency position;

The ORSA Model Act requires an insurance holding company to regularly, and no less than annually, assess the adequacy of our insurance subsidiaries’ risk management framework and current and estimated projected future solvency position;

internally document the process and results of the assessment;

and provide a confidential high-level report annually to the lead state commissioner.

State insurance laws and regulations govern the marketplace for insurers, affecting the form and content of disclosure to insureds, advertising, sales and underwriting practices and complaint and claims handling, and these provisions are generally enforced through periodic or target market conduct examinations.

State insurance laws and regulations govern the marketplace for U.S.

domiciled insurers, affecting the form and content of disclosure to insureds, advertising, sales and underwriting practices and complaint and claims handling, and these provisions are generally enforced through periodic or target market conduct examinations.

State insurance departments may conduct periodic or target detailed examinations of the books, records, accounts and business practices of insurers licensed in their states.

7 unchanged sentences

GAAP are often materially different from those reflected in financial statements prepared under SAP.

Enact Re abides by Bermudian statutory accounting.

Market Conduct

State insurance laws and regulations govern the marketplace activities of insurers, affecting the form and content of disclosure to consumers, advertising, product replacement, sales and underwriting practices and complaint and claims handling, and these provisions are generally enforced through periodic market conduct examinations.

Our insurance subsidiaries are not currently undergoing market conduct reviews in any states.

Our insurance subsidiaries are not currently undergoing market conduct reviews in any states or other jurisdictions.

State insurance laws and regulations require diversification of our insurance subsidiaries’ investment portfolio and limit the proportion of, or in some cases totally prohibit, investments our insurance subsidiaries may hold in different asset categories.

1 unchanged sentence

We believe our insurance subsidiaries’ investments are in compliance with these state insurance laws and regulations or are subject to any applicable waivers.

Enact Re’s investments are in compliance with Bermudian law.

Capital and Surplus Requirements

1 unchanged sentence

We seek to maintain new business and capital management strategies to support meeting related regulatory requirements.

Enact Re is subject to Bermuda’s capital regime.

Mortgage Guaranty Insurance Capital and Surplus Requirements .

Mortgage guaranty insurers are not subject to the NAIC’s risk-based capital (“RBC”) requirements, but certain states impose other forms of capital requirements on mortgage guaranty insurers, requiring maintenance of a RTC ratio not to exceed 25:1.

Policyholder position is defined as surplus as regards policyholders plus contingency reserves, less ceded reinsurance.

In this Annual Report, we show policyholder position as statutory capital.

The NAIC is in the process of considering changes to the Mortgage Guaranty Insurance Model Act (the “MGI Model”) and revisions to Statement of Statutory Accounting Principles No.

In August 2023, the NAIC adopted amendments to the Mortgage Guaranty Insurance Model Act (the “MGI Model”) and is in the process of making conforming revisions to Statement of Statutory Accounting Principles No.

58—Mortgage Guaranty Insurance.

In 2020 the NAIC developed a mortgage guaranty supplemental filing.

In September 2022, the Mortgage Guaranty Insurance Working Group (the “MGIWG”) released its most recent exposure drafts of the revised MGI Model.

The process for developing this framework is ongoing, and the outcome of this process remains uncertain.

At this time, we cannot predict (i) the outcome of this process;

(ii) which states, if any, may adopt the MGI Model;

(iii) the effect changes, if any, will have on the mortgage guaranty insurance market generally, or on our business specifically;

(iv) the additional costs associated with compliance with any such changes;

or (v) any changes to our operations that may be necessary to comply, any of which could have a material adverse effect on our business, results of operations and financial condition.

The revisions to the MGI Model are extensive, including with respect to the risk concentration limits, capital and reserve requirements, reinsurance, underwriting practices and quality assurance.

At this time, we cannot predict (i) which states, if any, may adopt the MGI Model;

(ii) the effect changes in the MGI Model may have on the mortgage guaranty insurance market generally, or on our business specifically;

(iii) the additional costs associated with compliance with any such changes;

or (iv) any changes to our operations that may be necessary to comply, any of which could have a material adverse effect on our business, results of operations and financial condition.

We also cannot predict whether other regulatory initiatives will be adopted and what impact, if any, such initiatives, if adopted as laws, may have on our business, results of operations and financial condition.

5 unchanged sentences

The amendments were adopted by Virginia, Genworth’s insurance holding company group’s lead state, in 2022.

During 2021, certain insurance groups agreed to voluntarily submit data to lead states using the newly adopted template as part of a trial implementation phase.

Based on the trial results and feedback from these insurance groups, the NAIC implemented changes to the GCC Template and Instructions.

In May 2022, the Group Capital Calculation Working Group of the NAIC adopted the 2022 GCC Instructions and Template, which will be used by a number of states, including Delaware and Virginia, for year end 2022 filings.

In May 2022, the Group Capital Calculation Working Group of the NAIC adopted the 2022 GCC Instructions and Template, which is used by a number of states, including Delaware and Virginia, for year end 2022 filings.

The GCC also adopted guidance for insurance regulators to use in reviewing GCC submissions in the form of changes to the NAIC Financial Analysis Handbook.

1 unchanged sentence

insurance companies.

State insurance laws and regulations require our insurance subsidiaries to establish a special statutory contingency reserve reflected in their statutory financial statements to provide for payable claims and other expenses and purposes in the event of significant economic declines.

State insurance laws and regulations require our U.S.

mortgage insurance subsidiaries to establish a special statutory contingency reserve reflected in their statutory financial statements to provide for payable claims and other expenses and purposes in the event of significant economic declines.

Annual additions to the statutory contingency reserve must be at least 50% of net earned premiums as defined by state insurance laws and regulations.

1 unchanged sentence

However, approval by the NCDOI is required for contingency reserve releases when loss ratios exceed 35%.

The establishment of the statutory contingency reserve is funded by premiums that would otherwise generate net earnings that would be reflected in policyholder surplus.

This deferral of premiums into the contingency reserve limits our insurance subsidiaries’ ability to pay dividends to stockholders until those contingency reserves are released back into surplus.

Our insurance subsidiaries’ statutory contingency reserve was approximately $3,551 million and $3,042 million as of December 31, 2022 and 2021, respectively.

The establishment of the statutory

contingency reserve is funded by premiums that would otherwise generate net earnings that would be reflected in policyholder surplus.

This deferral of premiums into the contingency reserve limits our mortgage insurance subsidiaries’ ability to pay dividends to stockholders until those contingency reserves are released back into surplus.

Our mortgage insurance subsidiaries’ statutory contingency reserve was approximately $3,960 million and $3,551 million as of December 31, 2023 and 2022, respectively.

Dodd-Frank Act

Although the federal government generally does not directly regulate the insurance business, federal initiatives often have an impact on our business in a variety of ways.

From time to time, federal measures

are proposed that may significantly affect the insurance business.

From time to time, federal measures are proposed that may significantly affect the insurance business.

These areas include financial services regulation, securities regulation, derivatives regulation, money laundering, privacy regulation and taxation.

2 unchanged sentences

The Dodd-Frank Act prohibits a creditor from making a residential mortgage loan unless the creditor makes a reasonable and good faith determination that, at the time the loan is consummated, the consumer has a reasonable ability to repay the loan.

In addition, the Dodd-Frank Act created the Consumer Financial Protection Bureau (“CFPB”), which regulates certain aspects of the offering and provision of consumer financial products or services but not the business of insurance.

In addition, the Dodd-Frank Act created the CFPB, which regulates certain aspects of the offering and provision of consumer financial products or services but not the business of insurance.

Certain rules and regulations established by the CFPB require mortgage lenders to demonstrate that they have effectively considered the consumer’s ability to repay a mortgage loan, establish when a mortgage may be classified as a Qualified Mortgage (“QM”) and determine when a lender is eligible for a safe harbor as a presumption that the lender has complied with the ability-to-repay requirements.

The regulations include the QM Patch for mortgages that comply with certain prohibitions and limitations and meet the GSE underwriting and product guidelines.

Mortgages that meet these requirements are deemed to be QMs.

The QM Patch permits loans that exceed a DTI ratio of 43% to be eligible for QM status.

Many of the loans that qualify under the QM Patch require credit enhancement, of which private mortgage insurance is the predominate form of coverage.

On December 29, 2020, the CFPB promulgated two final rules amending the QM Rule:

(i) the Amended QM Rule and (ii) the Seasoned QM Final Rule.

The effective date of both rules was March 1, 2021, with a mandatory compliance date for the Amended QM Rule of July 1, 2021.

However, April 27, 2021, the CFPB promulgated a final rule delaying the mandatory compliance date of the Amended QM Rule until October 1, 2022 and noting that the Amended QM Rule and Seasoned QM Final Rule would be reconsidered at a later time.

As provided under the final rule, the prior 43% DTI-based QM Rule definition, the new price-based Average Prime Offer Rate (“APOR”) definition and the QM Patch all remained available to lenders for loan applications received prior to October 1, 2022.

However, on April 8, 2021, Fannie Mae issued Lender Letter 2021-09 and Freddie Mac issued Bulletin 2021-13 stating that due to the requirements of the Preferred Stock Purchase Agreements (“PSPAs”) between the Treasury Department and each of the GSEs they would only acquire loans that meet the new price-based (APOR) definition set forth under the Amended QM Rule for applications received on or after July 1, 2021.

We believe that loans which previously qualified under the 43% DTI-based QM Rule definition and the QM Patch will continue to qualify under the new price-based (APOR) definition and therefore we expect little impact from this change.

In October 2022, the SEC adopted final rules requiring the recovery of erroneously awarded compensation as mandated by the Dodd-Frank Act.

The rules will, among other things, require national securities exchanges to establish listing standards that would require listed companies to adopt and comply with a compensation recovery policy, often known as a clawback policy, and require listed companies to provide disclosure about such policies and how they are being implemented.

In the event a company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the company must recover from any current or former executive officers incentive-based compensation that was erroneously awarded during the three years preceding the date such a restatement was required.

The recoverable amount would be the amount of incentive-based compensation received in excess of the amount that otherwise would have been received had it been determined based on the restated financial measure.

The updated listing standards related to clawback policies will become effective no later than November 28, 2023.

Listed companies will be required to adopt a clawback policy no later than 60 days following the applicable listing standards effective date and make the required disclosure in proxy and information statements, as well as annual reports filed after the adoption of their clawback policy.

We are currently awaiting the finalization of the relevant listing standards and are evaluating our existing clawback policy to determine if any updates are required.

On August 25, 2022, the SEC adopted final rules implementing the pay versus performance requirement as mandated by the Dodd-Frank Act.

The rules require public companies to disclose the relationship between their executive compensation and financial performance in proxy or information statements in which executive compensation disclosures are required.

Under the new rules, companies will be required to provide a table disclosing specified executive compensation and financial performance measures for the five most recently completed fiscal years after an initial phase-in period.

Companies are also required to describe the relationship between the actual executive compensation paid, as defined by the new rules, and each of the financial performance measures in the table, as well as the company’s total shareholder return (“TSR”) and the TSR of its selected peer group.

In addition, companies are required to disclose three to seven financial performance measures they determine to be the most important performance measures for linking executive compensation actually paid to company performance.

These final rules are effective in proxy and information statements for fiscal years ending on or after December 16, 2022 and will be reflected in our proxy statement for the year ended December 31, 2022.

Agency Qualification Requirements

5 unchanged sentences

In addition, the PMIERs require private mortgage insurers to obtain the prior consent of the GSEs before taking certain actions, which may include entering into various intercompany agreements and commuting or reinsuring risk, among others.

As of December 31, 2022, we met the PMIERs financial and operational requirements and currently hold a reasonable amount in excess of the financial requirements.

As of December 31, 2023, we met the PMIERs financial and operational requirements and currently hold capital in excess of the financial requirements.

The PMIERs include financial requirements for mortgage insurers under which a mortgage insurer’s “Available Assets” (generally only the most liquid assets of an insurer) must meet or exceed “Minimum Required Assets” (which are based on an insurer’s RIF and are calculated from tables of factors with several risk dimensions and are subject to a floor amount) and otherwise generally establish when a mortgage insurer is qualified to issue coverage that will be acceptable to the respective GSE for acquisition of high LTV mortgages.

1 unchanged sentence

The operational PMIERs requirements include standards that govern the relationship between the GSEs and approved insurers and are designed to ensure that approved insurers operate under uniform guidelines, such as claim processing timelines.

They include quality control requirements that are designed to ensure that approved insurers have a strong internal risk management infrastructure and senior management oversight.

They include quality control requirements that are

designed to ensure that approved insurers have a strong internal risk management infrastructure and senior management oversight.

During 2020 and 2021, the GSEs issued several amendments to PMIERs.

Many of the provisions are no longer applicable but for loans that became non-performing due to a COVID-19 hardship, PMIERs was temporarily amended with respect to each non-performing loan that (i) had an initial missed monthly payment occurring on or after March 1, 2020 and prior to April 1, 2021 or (ii) is subject to a forbearance plan granted in response to a financial hardship related to COVID-19, the terms of which are materially consistent with terms of forbearance plans offered by the GSEs.

The risk-based required asset amount factor for the non-performing loan is the greater of (a) the applicable risk-based required asset amount factor for a performing loan were it not delinquent, and (b) the product of a 0.30 multiplier and the

applicable risk-based required asset amount factor for a non-performing loan.

In the case of (i) above, absent the loan being subject to a forbearance plan described in (ii) above, the 0.30 multiplier is applicable for no longer than three calendar months beginning with the month in which the loan became a non-performing loan due to having missed two monthly payments.

Loans subject to a forbearance plan described in (ii) above include those that are either in a repayment plan or loan modification trial period following the forbearance plan unless reported to the approved insurer that the loan is no longer in such forbearance plan, repayment plan, or loan modification trial period.

In addition, the PMIERs Amendment made permanent revisions to the risk-based required asset amount factor for non-performing loans for properties located in future FEMA-Declared Major Disaster Areas eligible for individual assistance.

In addition, the PMIERs Amendment made permanent revisions to the risk-based required asset amount factor for non-performing loans for properties located in future Federal Emergency Management Agency (“FEMA”) Declared Major Disaster Areas eligible for individual assistance.

Under PMIERs, we are subject to these operational and financial requirements.

Each approved mortgage insurer is required to provide the GSEs with an annual certification and a quarterly report as to its compliance with PMIERs.

As of December 31, 2022, we had estimated available assets of $5,206 million against $3,156 million net required assets under PMIERs compared to available assets of $5,077 million against $3,074 million net required assets as of December 31, 2021.

The sufficiency ratio as of December 31, 2022 was 165% or $2,050 million above the published PMIERs requirements, compared to 165% or $2,003 million above the published PMIERs requirements as of December 31, 2021.

Sufficiency was above the requirements imposed by the GSE Restrictions that require us to maintain a PMIERs sufficiency ratio of 120% in 2022 and 115% in 2021.

For information with respect to higher PMIERs sufficiency ratios in future periods as a result of the GSE Restrictions, see “Item 1A.

Risk Factors —Risks Relating to Our Business— If we are unable to continue to meet the requirements mandated by PMIERs, the GSE Restrictions and any additional restrictions imposed on us by the GSEs, we may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.”

In addition, our PMIERs required assets as of December 31, 2022 benefited from the application of a 0.30 multiplier applied to the risk-based required asset amount factor for certain non-performing loans.

In their respective letters approving credit for reinsurance against PMIERs financial requirements, the GSEs require our mortgage insurance subsidiary not to exceed a maximum statutory RTC ratio of 18:1 or they reserve the right to reevaluate the amount of PMIERs credit for reinsurance and other CRT transactions available under PMIERs indicated in their approval letters.

1 unchanged sentence

Both GSEs reserved the right to periodically review the reinsurance transactions for treatment under PMIERs.

In September 2020, subsequent to the issuance of our 2025 Senior Notes, the GSEs imposed the GSE Restrictions with respect to capital on our business.

In May 2021, in connection with their conditional approval of the consummation of our IPO, the GSEs confirmed the GSE Restrictions will remain in effect until the following collective GSE Conditions are met:

(i) EMICO obtains a “BBB+”/“Baa1” (or higher) rating from Standard & Poor’s, Moody’s or Fitch for two consecutive quarters and (ii) our Parent achieves a debt leverage ratio (excluding U.S.

life business equity) that is less than 25% and a cash coverage ratio that is at least 2.5 for two consecutive quarters.

Prior to the satisfaction of the GSE Conditions, the GSE Restrictions require (a) EMICO to maintain 115% of PMIERs Minimum Required Assets through 2021, 120% during 2022 and 125% thereafter, (b) the Company to retain available liquidity the greater of either 13.5% of outstanding EHI debt or $300 million of its holding company cash that can be drawn down exclusively for Company debt service or to contribute to EMICO to meet its regulatory capital needs including PMIERs and (c) prior written approval must be received from the GSEs before any additional debt issuance by either EMICO or the Company.

In addition, EMICO is not permitted to make any dividends or distributions that would cause the PMIERs Available Assets to fall below the PMIERs Minimum Required Assets percentages set forth in clause (a) above.

In addition, in calculating PMIERs Available Assets relative to any dividend or distribution, PMIERs Available Assets shall be calculated consistent with the capital preservation provisions of the PMIERs Amendment, and any amendments thereto.

Our Parent expects to continue own at least 80% of EHI common stock.

However, if our Parent no longer owns directly or indirectly 50% or more of our common stock, Fannie Mae agreed to reconsider the GSE Restrictions.

In addition, in the event that the Parent were to hold less than 80% of our common

stock by either voting power or value, we would cease to be a member of the Genworth Consolidated Group and may be required to make a payment to the Parent in respect of tax benefits for which we received credit under the Tax Allocation Agreement, but which had not been utilized by the Genworth Consolidated Group at such time.

These tax benefits would be available to reduce our tax liabilities in periods after we leave the Genworth Consolidated Group, subject to any applicable limitation that may apply with respect to such period or tax benefit.

EHI maintained the requisite ratings for two consecutive quarters prior to the end of 2022.

As of December 31, 2022, Genworth believes that they achieved their financial metrics for the quarters ended September 30, 2022 and December 31, 2022.

Once confirmed by the GSEs, EHI will no longer be subject to GSE Restrictions and Conditions.

Although we expect we will continue to retain our eligibility status with the GSEs, there can be no assurance these conditions will continue.

See “Item 1A.

In September 2020, subsequent to the issuance of our 2025 Senior Notes, the GSEs imposed incremental restrictions (“GSE Restrictions”) with respect to capital on our business.

In May 2021, in connection with their conditional approval of the consummation of our IPO, the GSEs confirmed the GSE Restrictions would remain in effect until certain conditions (“GSE Conditions”) were met.

These conditions included required upgrades in EMICO’s ratings, certain liquidity requirements, restrictions on debt issuance and the use of proceeds from our debt, and limitations on dividends and distributions.

EMICO was also required to maintain 115% of PMIERs Minimum Required Assets through 2021, 120% during 2022 and 125% thereafter.

EMICO maintained the requisite ratings for two consecutive quarters prior to the end of 2022.

Beginning in 2023, we are no longer subject to the GSE Restrictions and Conditions.

As of December 31, 2023, we had estimated available assets of $5,006 million against $3,119 million net required assets under PMIERs compared to available assets of $5,206 million against $3,156 million net required assets as of December 31, 2022.

The sufficiency ratio as of December 31, 2023, was 161% or $1,887 million above the published PMIERs requirements, compared to 165% or $2,050 million above the published PMIERs requirements as of December 31, 2022.

Sufficiency was above the requirements imposed by the incremental GSE Restrictions that required us to maintain a PMIERs sufficiency ratio of 120% in 2022 and 115% in 2021.

In addition, our PMIERs required assets as of December 31, 2023, benefited from the application of a 0.30 multiplier applied to the risk-based required asset amount factor for certain non-performing loans.

Other Federal Regulation

We and other private mortgage insurers are impacted by federal regulation of residential mortgage transactions with respect to mortgage originators and lenders, purchasers of mortgage loans such as Fannie Mae and Freddie Mac and governmental insurers such as the FHA and the VA.

Mortgage origination and servicing transactions are subject to compliance with various state and federal laws, including RESPA, HOPA, Fair Credit Reporting Act (“FCRA”), the Fair Housing Act, the Truth In Lending Act, the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”), the Dodd-Frank Act and others, including those discussed in this section.

Mortgage origination and servicing transactions are subject to compliance with various state and federal laws, including the Real Estate Settlement Procedures Act of 1974 (“RESPA”), HOPA, Fair Credit Reporting Act (“FCRA”), the Fair Housing Act, the Truth In Lending Act, the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”), the Dodd-Frank Act and others, including those discussed in this section.

Among other things, these laws and their implementing regulations prohibit payments for referrals of settlement service business, require fairness and non-discrimination in granting or facilitating the granting of insurance, govern the circumstances under which companies may obtain and use consumer credit information, and provide for other consumer protections.

3 unchanged sentences

The final rule could cause the GSEs to increase their guarantee pricing in order to meet the new capital requirements.

On December 14, 2022, the SEC adopted amendments to Rule 10b5-1 under the Securities Exchange Act of 1934 and added new disclosure requirements to enhance investor protections against insider trading.

The amendments add new conditions to the availability of the affirmative defense to insider trading provided by Rule 10b5-1(c), including cooling-off periods for directors, officers and persons other than issuers.

The amendments create new disclosure requirements regarding a company’s insider trading policies and procedures and the adoption and termination (including modification) of Rule 10b5-1 and certain other trading arrangements by directors and officers.

The amendments also create new disclosure requirements for executive and director compensation regarding certain equity compensation awards granted in close proximity to a company’s disclosure of material nonpublic information.

Companies must also identify transactions made pursuant to a plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

Beneficial ownership reports filed on or after April 1, 2023 will be required to comply with the amendments and public companies will be required to comply with the new disclosure requirements in periodic reports and any proxy or information statements for full fiscal periods beginning on or after April 1, 2023.

The Real Estate Settlement Procedures Act of 1974 (“RESPA”) applies to most residential mortgages insured by private mortgage insurers.

RESPA applies to most residential mortgages insured by private mortgage insurers.

Mortgage insurance is considered a “settlement service” for purposes of loans subject to RESPA.

11 unchanged sentences

The Fair Housing Act generally prohibits discrimination in the terms, conditions or privileges in residential real estate-related transactions on the basis of race, color, religion, sex, familial status, or national origin.

Numerous courts have held that the Fair Housing Act prohibits discriminatory insurance practices.

Numerous courts have held that the Fair Housing Act prohibits discriminatory insurance

In addition, both the Department of Justice (the “DOJ”) and the CFPB have pursued claims under the Fair Housing Act on a disparate impact theory as well.

4 unchanged sentences

Since 2014, the CFPB has clarified those rules through subsequent rule makings and provided guidance on how servicers must apply them in certain circumstances, including recent clarifications as a result of COVID-19.

On March 27, 2020, the CARES Act was signed into law.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law.

On April 3, 2020, the CFPB, the National Credit Union Administration, the Federal Banking Agencies and the Conference of State Bank Supervisors issued a joint statement to clarify existing flexibility in the mortgage servicing rules that services can use to help consumers during the COVID-19 emergency, including those applicable to mortgage forbearance options under the CARES Act.

The joint statement addressed flexibility around required notices from servicers and the existing requirements related to continuity of contact and reasonable diligence steps required when the forbearance ends.

This guidance could reduce claims and

mitigate losses but may also contribute to delays in foreclosure and have an adverse impact on resolution of claims with respect to the servicing of mortgage loans covered by our insurance policies.

The CARES Act provides financial assistance for businesses and individuals and targeted regulatory relief for financial institutions.

This guidance could reduce claims and mitigate losses but may also contribute to delays in foreclosure and have an adverse impact on resolution of claims with respect to the servicing of mortgage loans covered by our insurance policies.

The CARES Act provided financial assistance for businesses and individuals and targeted regulatory relief for financial institutions.

Among many other things, for up to 120 days after the termination date of the national emergency concerning COVID-19 declared by the Trump Administration on March 13, 2020 under the National Emergencies Act, the CARES Act required mortgage servicers to provide up to 180 days of forbearance for borrowers with a federally backed mortgage loan who asserted they had experienced a financial hardship related to COVID-19.

The forbearance could be extended for an additional 180 days, up to a year in total, or shortened at the request of the borrower.

In addition, on February 25, 2021, the FHFA announced that borrowers with a mortgage backed by the GSEs who are in an active COVID-19 forbearance plan as of February 28, 2021 may request up to two additional forbearance extensions for a maximum of 18 months of total forbearance relief.

In addition, the CARES Act provides that furnishers of credit reporting information, including servicers, should continue to report a loan as current to credit reporting agencies if the loan is subject to a payment accommodation, such as forbearance, so long as the borrower abides by the terms of the accommodation.

Many servicers have updated and improved their reporting to private mortgage insurers for when a loan is covered by forbearance.

The foreclosure moratorium for mortgages that are purchased by the GSEs expired on July 31, 2021.

However, on June 28, 2021 the CFPB issued a final rule to amend Regulation X of the Real Estate Settlement Procedures Act effective August 31, 2021 to assist mortgage borrowers affected by the COVID-19 emergency.

The final rule established temporary procedural changes that require a loss mitigation review prior to a servicer’s first notice or foreclosure filing on certain mortgages.

On June 29, 2021, the FHFA announced that servicers were immediately prohibited from making a first notice or foreclosure filing for mortgages backed by the GSEs that would be prohibited by the CFPB Regulation X Final Rule before it took effect on August 31, 2021.

These announcements generally prohibited servicers from starting foreclosures on mortgages purchased by the GSEs until after December 31, 2021.

In addition, on February 25, 2021, the FHFA announced that borrowers with a mortgage backed by the GSEs who were in an active COVID-19 forbearance plan as of February 28, 2021, could request up to two additional forbearance extensions for a maximum of 18 months of total forbearance relief.

In addition, the CARES Act provided that furnishers of credit reporting information, including servicers, should report a loan as current to credit reporting agencies if the loan is subject to a payment accommodation, such as forbearance, so long as the borrower abided by the terms of the accommodation.

Many servicers updated and improved their reporting to private mortgage insurers for when a loan is covered by forbearance.

The Biden Administration ended the national emergency for COVID-19 in April 2023, so the deadline for requesting a COVID-19 related forbearance under the CARES Act ended in August of 2023.

Regulation of Mortgage Origination

2 unchanged sentences

ATR and QM Rules

The Dodd-Frank Act ATR Requirement prohibits a creditor from making a residential mortgage loan unless the creditor makes a reasonable and good faith determination that, at the time the loan is consummated, the consumer has a reasonable ability to repay the loan.

In addition, the Dodd-Frank Act created the CFPB, which regulates certain aspects of the offering and provision of consumer financial products or services but not the business of insurance.

Certain rules and regulations established by the CFPB require mortgage lenders to demonstrate that they have effectively considered the consumer’s ability to repay a mortgage loan, establish when a mortgage may be classified as a QM and determine when a lender is eligible for a safe harbor as a presumption that the lender has complied with the ability-to-repay requirements.

The regulations include the QM Patch for mortgages that comply with certain prohibitions and limitations and meet the GSE underwriting and product guidelines.

Mortgages that meet these requirements are deemed to be QMs.

The QM Patch permits loans that exceed a DTI ratio of 43% to be eligible for QM status.

Many of the loans that qualify under the QM Patch require credit enhancement, of which private mortgage insurance is the predominate form of coverage.

In addition, on December 29, 2020, the CFPB promulgated two final rules amending the QM Rule:

(i) the Amended QM Rule and (ii) the Seasoned QM Final Rule.

The effective date of both rules was March 1, 2021, with a mandatory compliance date for the Amended QM Rule of July 1, 2021.

On April 27, 2021, the CFPB promulgated a final rule delaying the mandatory compliance date of the Amended QM Rule until October

1, 2022 and noting that the Amended QM Rule and Seasoned QM Final Rule would be reconsidered at a later time.

As provided under the final rule, the prior 43% DTI-based QM Rule definition, the new price-based (APOR) definition and the QM Patch will all remain available to lenders for loan applications received prior to October 1, 2022.

However, on April 8, 2021, Fannie Mae issued Lender Letter 2021-09 and Freddie Mac issued Bulletin 2021-13 stating that due to the requirements of the PSPAs they would only acquire loans that meet the new price-based (APOR) definition set forth under the Amended QM Rule for applications received on or after July 1, 2021.

The Dodd-Frank Act separately granted statutory authority to the United States Department of Housing and Urban Development (“HUD”) (for FHA-insured loans), the VA (for VA-guaranteed loans), the United States Department of Agriculture (“USDA”) and Rural Housing Service (“RHS”) to develop their own definitions of a QM in consultation with the CFPB.

In addition to the QM rules discussed above, the Dodd-Frank Act separately granted statutory authority to the United States Department of Housing and Urban Development (“HUD”) (for FHA-insured loans), the VA (for VA-guaranteed loans), the United States Department of Agriculture (“USDA”) and Rural Housing Service (“RHS”) to develop their own definitions of a QM in consultation with the CFPB.

In December 2013, HUD adopted a separate definition of a QM for loans insured by the FHA.

HUD’s QM definition is less restrictive than the CFPB QM Rule in certain respects.

To the extent that other government agencies guaranteeing residential mortgage loans may adopt definitions of a QM that are more favorable to lenders and mortgage holders than the CFPB QM Rule, our mortgage insurance business could also be negatively impacted.

To the extent that other

government agencies guaranteeing residential mortgage loans may adopt definitions of a QM that are more favorable to lenders and mortgage holders than the CFPB QM Rule, our mortgage insurance business could also be negatively impacted.

The Dodd-Frank Act requires an originator or issuer to retain a specified percentage of the credit risk exposure on securitized mortgages that do not meet the definition of a QRM.

4 unchanged sentences

If the QRM definition is changed in a manner that is unfavorable to us, such as to require a large down payment for a loan to qualify as a QRM, without giving consideration to mortgage insurance in computing LTV ratios, the attractiveness of originating and securitizing loans with lower down payments may be reduced, which may adversely affect the future demand for mortgage insurance.

In 1988, the Basel Committee developed Basel I which set out international benchmarks for assessing banks’ capital adequacy requirements.

Since 1988, the Basel Committee has worked to develop international benchmarks for assessing banks’ capital adequacy requirements.

In 2005, the Basel Committee issued Basel II, which, among other things, sets forth capital treatment of mortgage insurance purchased and held on balance sheet by banks in respect of their origination and securitization activities (including in bank regulation, the standards for a prudentially underwritten mortgage, with 50% risk weighting for high loan-to-value mortgages covered with mortgage insurance).

Following the financial crisis of 2008, the Basel Committee issued Basel III that established RBC and leverage capital requirements for most United States banking organizations (although banking organizations with less than $10 billion in total assets may now choose to comply with an alternative community bank leverage ratio framework established by the Federal Banking Agencies in 2019).

In December 2017, the Basel Committee published the 2017 Basel III Revisions that were generally targeted for implementation by each participating country by January 1, 2023.

Under these revisions to the international framework, banks using the standardized approach to determine their credit risk may consider mortgage insurance in calculating the exposure amount for real estate but will determine the risk-weight for residential mortgages based on the LTV ratio at loan origination, without consideration of mortgage insurance.

Under the standardized approach, after the appropriate risk-weight is determined, the existence of mortgage insurance could be considered, but only if the company issuing the insurance has a lower risk-weight than the underlying exposure.

Mortgage insurance issued by private companies would not meet this test.

Therefore, under the 2017 Basel III Revisions, mortgage insurance could not mitigate credit and lower the capital charge under the standardized approach.

It is possible that the Federal Banking Agencies could determine that their current capital rules are at least as stringent as the

2017 Basel III Revisions, in which case no change would be mandated.

However, if the Federal Banking Agencies decide to implement the 2017 Basel III Revisions as specifically drafted by the Basel Committee, mortgage insurance would not lower the LTV ratio of residential loans for capital purposes, and therefore may decrease the demand for mortgage insurance.

It remains unclear whether new guidelines will be proposed or finalized in the United States in response to the most recent 2017 Basel III Revisions.

In 2013, the US federal banking regulators confirmed the role of mortgage insurance as a component of prudential bank regulation for high loan to value mortgages.

More recently, in July of 2023, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency proposed for comment the Basel III Endgame rule.

Under the proposed rule, commercial banks with total assets greater than $100 billion would no longer receive the 50% capital relief for high loan-to-value portfolio loans with mortgage insurance.

If adopted as proposed, this rule could decrease the demand for mortgage insurance.

The federal banking regulators are currently in the review process, and it remains unclear whether there will be changes to the final rule ahead of its planned implementation in 2025.

Privacy of Consumer Information and Cybersecurity

Federal and state laws and regulations require financial institutions, including insurance companies, to protect, among other things, the security and confidentiality of consumer financial information and to notify consumers about policies and practices relating to the collection and disclosure of consumer information and policies relating to protecting the security and confidentiality of that information and to notify regulators and consumers in the event of certain data breaches affecting personal information.

Federal and state laws and regulations require financial institutions, including insurance companies, to protect the security and confidentiality of consumer financial information and to notify consumers about policies and practices relating to the collection, use, disclosure, security, and confidentiality of their personally identifiable information.

Additionally, there are federal and state obligations to notify regulators and consumers in the event of certain data breaches affecting personal information.

Federal and state lawmakers and regulatory bodies may consider additional or more detailed regulations regarding these subjects and the privacy and security of nonpublic personal information, confidential business information, information security systems, and vendors and other third parties that may have access to sensitive data or systems.

Furthermore, the issues surrounding data security and the safeguarding of consumers’ protected information are under increasing regulatory scrutiny by state and federal regulators, particularly in light of the number and severity of recent United States companies’ data breaches.

The Federal Trade Commission, the DOJ, the New York State Department of Financial Services (“NYDFS”), the SEC and the NAIC have undertaken various studies, reports and actions regarding privacy and data security for entities under their respective supervision.

Some states have recently enacted new privacy and information security requirements and new insurance laws that require certain regulated entities to implement and maintain comprehensive information security programs to safeguard the personal information of insureds and enrollees.

The Federal Trade Commission, the DOJ, the New York State Department of Financial

Services (“NYDFS”), the SEC and the NAIC have undertaken various studies, reports and actions regarding privacy and data security for entities under their respective supervision.

Several states have recently enacted new privacy and information security requirements and new insurance laws that require certain regulated entities to implement and maintain comprehensive information security programs to safeguard the personal information of insureds and enrollees.

The GLB Act and the FCRA impose privacy and information security requirements on financial institutions, including obligations to protect and safeguard consumers’ nonpublic personal information and creditworthiness information, respectively, and limitations on the use and sharing of such information.

7 unchanged sentences

Many states have enacted privacy and data security laws that impose compliance obligations beyond those imposed by the GLB Act, including obligations to protect sensitive personal information.

On July 25, 2019, New York enacted the Stop Hacks and Improve Electronic Data Security Act to increase information security requirements regarding New York residents’ personal information.

This law became effective March 21, 2020.

All fifty states also require entities to provide notification to affected state residents and, in certain instances, state regulators, such as state attorneys general or state insurance

commissions, in the event of certain security breaches affecting personal information, though some of these laws include exemptions for entities regulated by the GLB Act.

The NYDFS published initial cybersecurity regulation effective on March 1, 2017, which, along with subsequent guidance, requires all banks, insurance companies, and other financial services institutions and licensees regulated by the NYDFS, including several of our subsidiaries, to establish a cybersecurity program.

The NYDFS cybersecurity regulation includes specific technical safeguards as well as requirements regarding governance, incident planning, training, data management, system testing and regulator notification in the event of certain cybersecurity events.

In addition, on March 2, 2021, Virginia enacted the Virginia Consumer Data Protection Act (“VCDPA”) which became effective on January 1, 2023.

The VCDPA borrows heavily from the California Consumer Privacy Act of 2018 (the “CCPA”) and the European Union General Data Protection Regulation (“EU GDPR”) and includes exemptions that may be broader than the CCPA in certain respects, including an exemption for any data or financial institution subject to the GLB Act.

Other states are also working on legislation related to consumer data privacy similar to the CCPA.

In October 2017, the NAIC adopted a new Insurance Data Security Model Law, which establishes model standards for states to adopt regarding data security and notification of data breaches applicable to insurance licensees in states adopting such law, with provisions that are generally consistent with the NYDFS cybersecurity regulation discussed above.

All fifty states also require entities to provide notification to affected state residents and, in certain instances, state regulators, such as state attorneys general or state insurance commissions, in the event of certain security breaches affecting personal information, though some of these laws include exemptions for entities regulated by the GLB Act.

The California Consumer Privacy Act of 2018 (the “CCPA”) was amended significantly by the California Privacy Rights Act of 2020 (“CPRA”).

The CCPA, as amended by the CPRA, grants California residents the right to know what information a business has collected about them and the sourcing and sharing of that information, as well as the right to access and correct their personal information, and (subject to certain exemptions) the right to have a business delete their personal information.

The CPRA created the California Privacy Protection Agency to enforce the CCPA and to promulgate regulations thereunder, imposed additional obligations regarding the privacy notice and service provider contracts, created new requirements around the protection of sensitive personal information and eliminated certain exemptions for personal information collected in employment or business-to-business contexts.

The majority of the CPRA provisions went into effect on January 1, 2023.

Failure to comply with the CCPA risks regulatory fines, and the law grants a private right of action for any unauthorized disclosure of certain personal information not subject to an exemption as a result of failure to maintain reasonable security procedures and practices.

Virginia, Colorado, Connecticut, and Utah enacted comprehensive data privacy laws that went into effect in 2023.

These laws generally impose similar requirements as the CCPA but do not apply to employee or contractor data or business-to-business information.

Each of these laws has entity-wide exemptions for financial institutions subject to the GLB Act.

Additionally, other states have enacted privacy laws that will become effective in 2024 and beyond.

Adapting our data privacy practices to forthcoming applicable laws and regulations may increase our compliance costs and increase the risk of noncompliance.

Cybersecurity continues to be an area of significant and increasing focus of legislatures and regulators.

The NYDFS amended its cybersecurity regulation effective November 1, 2023, which,

along with subsequent guidance, requires all banks, insurance companies, and other financial services institutions and licensees regulated by the NYDFS, including several of our subsidiaries, to establish a cybersecurity program.

The NYDFS cybersecurity regulation includes specific technical safeguards as well as requirements regarding governance, incident planning, training, encryption of nonpublic information, data management, system testing and regulator notification in the event of certain cybersecurity events.

The amendments expand requirements for notification to the NYDFS of cybersecurity events and expand technical requirements around system penetration testing, vulnerability assessments, risk assessments and audits.

The amendments also add new requirements related to cybersecurity plans and expand cybersecurity governance requirements, among other things.

We are required to file an annual certification of compliance with the NYDFS regarding our cybersecurity program.

In addition, the NAIC’s Insurance Data Security Model Law establishes model standards for states to adopt regarding data security and notification of data breaches applicable to insurance licensees in states adopting such law, with provisions that are generally consistent with the NYDFS cybersecurity regulation discussed above.

As with all NAIC model laws, this Insurance Data Security Model Law must be adopted by a state before becoming law in such state.

The Insurance Data Security Model Law has not been adopted by a majority of the states.

A version of the Insurance Data Security Model Law has been adopted by over twenty states.

North Carolina has not adopted a version of the Insurance Data Security Model Law.

2 unchanged sentences

We expect cybersecurity risk management, prioritization and reporting to continue to be an area of significant regulatory focus by such regulatory bodies and self-regulatory organizations.

The CCPA, effective as of January 1, 2020, affords California residents expanded privacy protections and control over the collection, use and sharing of their personal information.

The CCPA has been amended, and it is possible it will be amended again by other pending legislative initiatives or by popular referendum.

The CCPA requires certain companies doing business in California to disclose to California consumers information regarding the companies’ privacy practices and the privacy rights that businesses must offer to California residents to access and delete their personal information.

As noted above, state governments, Congress and agencies may consider and enact additional legislation or promulgate regulations governing privacy, cybersecurity and data breach reporting requirements.

As noted above, state governments, Congress, and federal and state agencies may consider and enact additional legislation or promulgate regulations governing privacy, cybersecurity, and data breach reporting requirements.

We cannot predict whether such legislation will be enacted, or what impact, if any, such legislation may have on our business practices, results of operations or financial condition.

5 unchanged sentences

Copies of these materials also are available, without charge, from Enact Investor Relations at the address above.

The information found on our website is not incorporated by reference into this report or in any other report or document we submit to the SEC, and any references to our website are intended to be inactive textual references only.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business