What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-02-28 · 260 added, 274 removed, 1348 unchanged (28% of the section changed)

56 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except par value per share amount) 2022 2021

(Amounts in thousands, except per share amounts) 2023 2022

Fixed maturity securities available-for-sale, at fair value (amortized cost $ 5,559,886 and $ 5,371,673 as of December 31, 2023 and 2022, respectively)

5 unchanged sentences

Deferred acquisition costs 25,006 26,121

Premiums receivable (net of allowance for credit losses of $ 873 and $ 893 as of December 31, 2022 and 2021, respectively)

41,738 42,266

Premiums receivable 45,070 41,738

Other assets 88,306 76,391

6 unchanged sentences

Long-term borrowings 745,416 742,830

Deferred tax liability — 1,586

Total liabilities

3 unchanged sentences

159,344 and 162,779 shares issued and outstanding as of December 31, 2023 and 2022, respectively

$ 1,628 $ 1,628

Additional paid-in capital 2,310,891 2,382,068

52 unchanged sentences

$ 1,628 $ 2,368,699 $ 208,378 $ 1,303,106 $ 3,881,811

Cumulative effect of change in accounting, net of taxes — — 281 ( 281 ) —

Comprehensive income:

1 unchanged sentence

Other comprehensive income, net of taxes — — ( 125,078 ) — ( 125,078 )

Stock-based compensation expense and exercises and other — 2,259 — ( 763 ) 1,496

Dividends to Genworth — — — ( 200,294 ) ( 200,294 )

2 unchanged sentences

$ 1,628 $ 2,371,861 $ 83,581 $ 1,648,453 $ 4,105,523

Cumulative effect of change in accounting, net of taxes — — 281 ( 281 ) —

Comprehensive income:

1 unchanged sentence

Other comprehensive income, net of taxes — — ( 466,325 ) — ( 466,325 )

Repurchase of common stock — ( 1,532 ) — — ( 1,532 )

Stock-based compensation expense and exercises and other — 11,739 — ( 1,878 ) 9,861

Dividends to Genworth — — — ( 200,294 ) ( 200,294 )

Capital contributions from Genworth — 903 — — 903

Dividends — — — ( 250,776 ) ( 250,776 )

Balance December 31, 2022

38 unchanged sentences

Change in short-term investments ( 16,651 ) ( 3,077 ) —

Other ( 13,927 ) — —

Net cash used in investing activities ( 229,404 ) ( 220,255 ) ( 398,782 )

Cash flows from financing activities:

Proceeds from the issuance of long-term debt — — 737,651

Repurchase of common stock ( 87,762 ) ( 1,532 ) —

Dividends paid ( 212,964 ) ( 250,776 ) ( 200,294 )

Net cash provided by (used in) financing activities ( 252,308 ) ( 200,294 ) 300,298

Net (decrease) increase in cash and cash equivalents 87,947 ( 26,966 ) ( 132,264 )

Net cash used in financing activities ( 300,726 ) ( 252,308 ) ( 200,294 )

Net increase (decrease) in cash and cash equivalents 101,908 87,947 ( 26,966 )

Cash and cash equivalents at beginning of year 513,775 425,828 452,794

1 unchanged sentence

Supplementary disclosure of cash flow information:

Non-cash contributions of capital from Genworth $ — $ — $ 6,721

Income taxes paid $ 181,972 $ 186,152 $ 145,951

8 unchanged sentences

(“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.

(“Genworth”) since EHI’s incorporation in Delaware in 2012.

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

21 unchanged sentences

Fannie Mae and Freddie Mac are government-sponsored enterprises, and we refer to them collectively as the “GSEs.”

We also perform fee-based contract underwriting services for mortgage lenders.

The provision of underwriting services by mortgage insurers eliminates the duplicative lender and mortgage insurer underwriting activities and expedites the approval process.

We have a broad customer base of mortgage lenders diversified by size, type and geography that includes large money center banks, non-bank lenders, national and local mortgage bankers, community banks and credit unions.

Our largest customer accounted for approximately $ 118 million, or 10 % of our

ENACT HOLDINGS, INC.

1 unchanged sentence

Years Ended December 31, 2023, 2022 and 2021

We operate our business in a single segment, which is how our chief operating decision maker (who is our Chief Executive Officer) reviews our financial performance and allocates resources.

total revenues for the year ended December 31, 2023.

No other customer accounted for 10% or more of total revenues for the year ended December 31, 2023 and no customer accounted for 10% or more of total revenues for the years ended December 31, 2022 and 2021.

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

("Enact Re").

We contributed $ 500 million into Enact Re during 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.

Additionally, we perform fee-based contract underwriting services for mortgage lenders.

The provision of underwriting services by mortgage insurers eliminates the duplicative lender and mortgage insurer underwriting activities and expedites the approval process.

We operate our business in a single segment, which is how our chief operating decision maker (“CODM”), who is our Chief Executive Officer, reviews our financial performance and allocates resources.

Our segment includes a run-off insurance block with reference properties in Mexico (“run-off business”), which is immaterial to our consolidated financial statements.

On July 20, 2020, Genworth reached a settlement agreement with AXA S.A.

(“AXA”) regarding a dispute over payment protection insurance mis-selling claims sold by Genworth’s former lifestyle protection insurance business that was acquired by AXA in 2015.

As part of the settlement agreement, Genworth issued a secured promissory note agreeing to pay AXA in two installments in 2023.

Under the terms of the secured promissory note, as amended, Genworth pledged as collateral to AXA a 19.9 % security interest in our outstanding common stock.

On March 3, 2021, Genworth repaid the first installment payment originally due to AXA in June 2022 and a portion of the second installment payment due to AXA in September 2022 from cash proceeds received from the sale of Genworth Mortgage Insurance Australia Limited.

On September 21, 2021, Genworth used a portion of the net proceeds from our IPO to repay the remaining outstanding balance of the secured promissory note of approximately £ 215 million ($ 296 million), excluding future claims still being processed.

Following the full repayment of the secured promissory note, AXA released its 19.9 % security interest in our outstanding common shares.

(2) Summary of significant accounting policies

19 unchanged sentences

Investment income is recognized when earned.

Income or loss upon call or prepayment of available-for-sale fixed maturity securities is recognized in net investment income, except for hybrid securities

Income or loss upon call or prepayment of available-for-sale fixed maturity securities is recognized in net investment income, except for hybrid securities where the income or loss upon call is recognized in net investment gains and losses.

Investment gains and losses are calculated on the basis of specific identification on the trade date.

ENACT HOLDINGS, INC.

1 unchanged sentence

Years Ended December 31, 2023, 2022 and 2021

where the income or loss upon call is recognized in net investment gains and losses.

Investment gains and losses are calculated on the basis of specific identification on the trade date.

Investment income on asset-backed securities is initially based upon yield, cash flow and prepayment assumptions at the date of purchase.

7 unchanged sentences

Underwriting fee revenue is recognized at the point in time when the service obligation is satisfied.

The investment portfolios of our subsidiaries are managed by Genworth.

The investment portfolios of our insurance subsidiaries are managed by Genworth.

We conduct the purchases, sales and related investment management decisions with the advice of Genworth.

6 unchanged sentences

Changes in the fair value of available-for-sale fixed maturity securities, net of deferred income taxes, are reflected as unrealized investment gains or losses in a separate component of accumulated other comprehensive income (“OCI”).

Allowance for Credit Losses and Impairments on Available-For-Sale Securities

Allowance for Credit Losses on Available-For-Sale Securities

On January 1, 2021, we adopted new accounting guidance related to accounting for credit losses on financial instruments.

6 unchanged sentences

Estimating the cash flows expected to be collected is a quantitative and qualitative process that incorporates information received from third-party sources along with internal assumptions and judgments.

When developing the estimate of cash flows expected to be collected, we utilize an analytical

When developing the estimate of cash flows expected to be collected, we utilize an analytical model that provides for various loss scenarios and consider the industry sector, current levels of subordination, geographic location and other relevant characteristics of the security or underlying assets, as well as reasonable and supportable forecasts.

Losses are written off against the allowance when

ENACT HOLDINGS, INC.

1 unchanged sentence

Years Ended December 31, 2023, 2022 and 2021

model that provides for various loss scenarios and consider the industry sector, current levels of subordination, geographic location and other relevant characteristics of the security or underlying assets, as well as reasonable and supportable forecasts.

Losses are written off against the allowance when deemed uncollectible or when we intend to sell or expect we will be required to sell a security prior to recovering our amortized cost.

deemed uncollectible or when we intend to sell or expect we will be required to sell a security prior to recovering our amortized cost.

We exclude accrued interest related to available-for-sale fixed maturity securities from the estimate of allowance for credit losses.

3 unchanged sentences

We adopted the guidance related to our available-for-sale fixed maturity securities using the modified retrospective method, which did not have a significant impact on our consolidated financial statements.

Prior to the adoption of new accounting guidance related to credit losses on financial instruments on January 1, 2021, we evaluated securities in an unrealized loss position for other-than-temporary impairment as of each balance sheet date.

For debt securities, we considered all available information relevant to the collectability of the security, including information about past events, current conditions, and reasonable and supportable forecasts, when developing the estimate of cash flows expected to be collected.

More specifically for asset-backed securities, we also utilized performance indicators of the underlying assets including default or delinquency rates, loan to collateral value ratios, third-party credit enhancements, current levels of subordination, vintage and other relevant characteristics of the security or underlying assets to develop our estimate of cash flows.

Estimating the cash flows expected to be collected was a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions and judgments regarding the future performance of the underlying collateral.

Where possible, this data is benchmarked against third-party sources.

We recognized other-than-temporary impairments on debt securities in an unrealized loss position when one of the following circumstances existed:

• we did not expect full recovery of our amortized cost basis when due,

• the present value of cash flows expected to be collected was less than our amortized cost basis,

• we intended to sell a security, or

• it was more likely than not that we would be required to sell a security prior to recovery.

Total other-than-temporary impairments that emerged in the period were calculated as the difference between the amortized cost and fair value.

For other-than-temporarily impaired securities where we did not intend to sell the security and it was not more likely than not that we would be required to sell the security prior to recovery, total other-than-temporary impairments were adjusted by the portion of other-than-temporary impairments recognized in OCI (“non-credit”).

Net other-than-temporary impairments recorded in net income (loss) represented the credit loss on the other-than-temporarily impaired securities with the offset recognized as an adjustment to the amortized cost to determine the new amortized cost basis of the securities.

For securities that were deemed to be other-than-temporarily impaired and a non-credit loss was recorded in OCI, the amount recorded as an unrealized gain (loss) represented the difference between the current fair value and the new amortized cost for each period presented.

The unrealized gain (loss) on an other-than-temporarily impaired security was recorded as a separate component in OCI until the security was sold or until we recorded an other-than-temporary impairment where we intended to sell the security or were required to sell the security prior to recovery.

To estimate the amount of other-than-temporary impairment attributed to credit losses on debt securities where we did not intend to sell the security and it was not more likely than not that we would be

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

required to sell the security prior to recovery, we determined our best estimate of the present value of the cash flows expected to be collected from a security using the effective yield on the security prior to recording any other-than-temporary impairment.

If the present value of the discounted cash flows was lower than the amortized cost of the security, the difference between the present value and amortized cost represented the credit loss associated with the security with the remaining difference between fair value and amortized cost recorded as a non-credit other-than-temporary impairment in OCI.

While the other-than-temporary impairment model for debt securities generally included fixed maturity securities, there were certain hybrid securities that are classified as fixed maturity securities where the application of a debt impairment model depended on whether there has been any evidence of deterioration in credit of the issuer, such as a downgrade to below investment grade.

Under certain circumstances, evidence of deterioration in credit of the issuer may have resulted in the application of the equity securities impairment model where we recognized an impairment charge in the period in which we determined that the security would not recover to book value within a reasonable period of time.

We determined what constitutes a reasonable period on a security-by-security basis based upon consideration of all the evidence available to us, including the magnitude of an unrealized loss and its duration.

In any event, this period did not exceed 15 months.

We measured other-than-temporary impairments based upon the difference between the amortized cost of a security and its fair value.

Equity Method Investments

4 unchanged sentences

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

We have fixed maturity securities, which are carried at fair value, and previously had an investment in an unconsolidated affiliate for which the fair value option had been elected.

We have fixed maturity securities and short-term investments, which are carried at fair value.

Fair value measurements are based upon observable and unobservable inputs.

10 unchanged sentences

These models are primarily industry-standard models that consider various inputs, such as interest rate, credit spread and foreign exchange rates for the underlying financial instruments.

All significant inputs are observable, or derived from observable,

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace.

All significant inputs are observable, or derived from observable, information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace.

Financial instruments in this category primarily include:

5 unchanged sentences

This category primarily consists of certain less liquid fixed maturity securities where we cannot corroborate the significant valuation inputs with market observable data.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

As of each reporting period, all assets and liabilities recorded at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

24 unchanged sentences

The calculation of premium deficiency reserves requires the use of significant judgments and estimates to determine the present value of future premium and present value of expected losses and expenses in our business.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

differences between the actual results and our estimates could vary materially.

The differences between the actual results and our estimates could vary materially.

We completed a PDR analysis as of December 31, 2023 and 2022 and determined that no PDR was required.

2 unchanged sentences

See Note 6 for details.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

Loss Reserves

23 unchanged sentences

Premiums written on single premium policies and annual premium policies are initially deferred as unearned premium reserve and earned over the policy life.

A portion of the revenue from single premium

A portion of the revenue from single premium policies is recognized in premiums earned in the current period, and the remaining portion is deferred as unearned premiums and earned over the estimated expiration of risk of the policy.

If single premium policies are cancelled and the premium is non-refundable, then the remaining unearned premium related to each cancelled policy is recognized to earned premiums upon notification of the cancellation.

For borrower-paid mortgage insurance, coverage ceases at the earlier of prepayment, or when the original principal is amortized to a 78% loan-to-value ratio in accordance with the Homeowners Protection Act of 1998.

ENACT HOLDINGS, INC.

1 unchanged sentence

Years Ended December 31, 2023, 2022 and 2021

policies is recognized in premiums earned in the current period, and the remaining portion is deferred as unearned premiums and earned over the estimated expiration of risk of the policy.

We periodically review our premium earnings recognition models with any adjustments to the estimates reflected as a cumulative adjustment on a retrospective basis in current period net income.

24 unchanged sentences

GAAP, and, accordingly, we evaluate the VIE to determine whether we are the primary beneficiary and are required to consolidate the assets and liabilities of the entity.

The primary beneficiary of a VIE is the enterprise that has the power to direct the activities of a VIE that most significantly impacts the VIE’s economic performance and has the obligation to absorb losses or receive benefits that could

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

potentially be significant to the VIE.

The determination of the primary beneficiary for a VIE can be complex and requires management judgment regarding the expected results of the entity and how those results are absorbed by variable interest holders, as well as which party has the power to direct activities that most significantly impact the performance of the VIEs.

1 unchanged sentence

These entities finance the reinsurance coverage by issuing mortgage insurance-linked notes to unaffiliated investors.

The assets of the VIEs are deposited in reinsurance trusts for our benefit that will be the source of reinsurance claim payments.

The assets of the VIEs are deposited in reinsurance trusts

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

for our benefit that will be the source of reinsurance claim payments.

Our involvement with these VIEs does not result in the unilateral power to direct the activities that most significantly affect the VIEs’ economic performance or result in the obligation to absorb losses or the right to receive benefits.

9 unchanged sentences

The guidance requires entities to recognize an allowance equal to its estimate of lifetime expected credit losses and applies to most debt instruments not measured at fair value.

Discussion of adoption of this guidance in relation to our portfolio of fixed maturity securities is included in the discussion of the allowance for credit losses and impairments of available-for-sale securities, above.

Discussion of adoption of this guidance in relation to our portfolio of fixed maturity securities is included in the discussion of the allowance for credit losses on available-for-sale securities, above.

The new guidance further requires that expected credit losses on premiums receivable are measured in accordance with the credit loss requirements for financial instruments measured at amortized cost.

3 unchanged sentences

We adopted the guidance related to our off-balance sheet credit exposures using the modified retrospective method, which did not have an impact on our consolidated financial statements.

Fair Value Disclosures

On January 1, 2020, we adopted new accounting guidance related to fair value disclosure requirements as part of the Financial Accounting Standards Board’s (the “FASB”) disclosure framework project.

The guidance adds, eliminates and modifies certain disclosure requirements for fair value measurements.

The guidance includes new disclosure requirements related to changes in unrealized gains and losses included in other comprehensive income (loss) for recurring Level 3 fair value

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

measurements held at the end of the reporting period and the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements.

We adopted this new accounting guidance using the prospective method for disclosures related to changes in unrealized gains and losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period, the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty and the retrospective method for all other disclosures.

This accounting guidance did not impact our consolidated financial statements but impacted our fair value disclosures.

Reference Rate Reform

In March 2020 and January 2021, the FASB issued new accounting guidance related to reference rate reform, which was effective for us on January 1, 2020.

The guidance provides temporary guidance to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform, which includes the transition away from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate.

This new guidance provides optional practical expedients and exceptions for applying generally accepted accounting principles to investments, derivatives or other transactions affected by reference rate reform.

In addition to the optional practical expedients, the guidance includes a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

We adopted this guidance prospectively and it did not have a significant impact on our consolidated financial statements or disclosures.

However, the amendments in this guidance may be elected over time, as reference rate reform activities occur and therefore, this guidance may impact our procedures as we implement measures to transition away from LIBOR.

In December 2019, the FASB issued new accounting guidance related to simplifying the accounting for income taxes.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to simplifying the accounting for income taxes.

The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

1 unchanged sentence

Accounting Pronouncements Not Yet Adopted

No significant new pronouncements.

Segment Reporting

In November 2023, the FASB released guidance under ASC 280 related to segment reporting disclosures.

The update requires incremental disclosure around significant segment expenses, measures of segment profit or loss used by the CODM and the CODM’s use of these metrics.

The guidance also

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

requires segment disclosures for entities with a single reportable segment.

As a result, we will be subject to these requirements for all annual and interim periods beginning as of December 31, 2024.

We are currently evaluating the impact the guidance may have on our processes, controls and disclosures.

Income Tax Disclosure

In December 2023, the FASB issued new accounting guidance to improve income tax disclosures.

The guidance requires annual disclosure of specific categories in the income tax rate reconciliation, separate disclosure of additional information related to reconciling items that meet a quantitative threshold and additional disclosures about income taxes paid, among other qualitative and quantitative disclosure improvements.

This guidance is effective for us for annual reporting periods beginning on January 1, 2025 using the prospective method, with early adoption permitted.

We are currently evaluating the impact the guidance may have on our processes, controls and disclosures.

(3) Investments

7 unchanged sentences

Net investment income $ 207,369 $ 155,311 $ 141,189

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Net Investment Gains (Losses)

5 unchanged sentences

Net realized gains (losses) ( 14,022 ) ( 2,209 ) 206

Other-than-temporary impairments — — ( 1,730 )

Change in allowance for credit losses on fixed maturity securities — 173 ( 2,330 )

9 unchanged sentences

Net unrealized investment gains (losses) $ ( 230,556 ) $ ( 382,896 ) $ 83,588

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

The change in net unrealized gains (losses) on available-for-sale securities reported in accumulated other comprehensive income was as follows as of and for the years ended December 31:

11 unchanged sentences

Amounts reclassified out of accumulated other comprehensive income to net investment gains (losses) include realized gains (losses) on sales of securities, which are determined on a specific identification basis.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Fixed Maturity Securities Available-For-Sale

12 unchanged sentences

Total investments $ 5,580,105 $ 30,317 $ ( 324,062 ) $ 5,286,360

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

As of December 31, 2022, the amortized cost, gross unrealized gains (losses) and fair value of our investment securities were as follows:

6 unchanged sentences

corporate 716,333 158 ( 63,647 ) 652,844

Residential mortgage-backed 11,162 — ( 119 ) 11,043

Other asset-backed 1,185,048 462 ( 85,474 ) 1,100,036

Total fixed maturity securities available-for-sale $ 5,371,673 $ 3,849 $ ( 490,762 ) $ 4,884,760

Short-term investments 3,077 — ( 30 ) 3,047

Total investments

$ 5,374,750 $ 3,849 $ ( 490,792 ) $ 4,887,807

There was no allowance for credit losses recorded on fixed maturity securities classified as available-for-sale as of December 31, 2023 or December 31, 2022.

1 unchanged sentence

The following table presents the gross unrealized losses and fair values of our fixed maturity securities for which an allowance for credit losses has not been recorded, aggregated by investment type and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, as of December 31, 2023:

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Less than 12 months 12 months or more Total

19 unchanged sentences

We do not intend to sell, nor do we expect that we will be required to sell, these securities prior to recovering our amortized cost.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

The following table presents the gross unrealized losses and fair values of our fixed maturity securities, aggregated by investment type and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, as of December 31, 2022:

12 unchanged sentences

corporate 486,117 ( 35,515 ) 125 155,345 ( 28,132 ) 27 641,462 ( 63,647 ) 152

Residential mortgage-backed 11,043 ( 119 ) 6 — — — 11,043 ( 119 ) 6

Other asset-backed 655,525 ( 31,684 ) 217 375,810 ( 53,790 ) 71 1,031,335 ( 85,474 ) 288

Total for fixed maturity securities in an unrealized loss position $ 3,434,023 $ ( 241,056 ) 877 $ 1,305,006 $ ( 249,706 ) 238 $ 4,739,029 $ ( 490,762 ) 1,115

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Contractual Maturities of Fixed Maturity Securities Available-For-Sale

17 unchanged sentences

Equity Method Investments

In November 2021, we completed the acquisition of Genworth Financial Mauritius Holdings Limited from Genworth Financial International Holdings, a subsidiary of Genworth, for $ 27 million, its estimated fair value.

The primary asset of the entity is a minority ownership interest in a mortgage guarantee business in India.

In November 2021, we completed the acquisition of Genworth Financial Mauritius Holdings Limited from Genworth Financial International Holdings, LLC, a subsidiary of Genworth, for $ 27 million, its estimated fair value.

The primary asset of the entity is a minority ownership interest in a mortgage

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

guarantee business in India.

We invested an additional $ 6.5 million during 2022.

9 unchanged sentences

These valuation techniques may change from period to period, based on the relevance and availability of market data.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Further, while we consider the valuations provided by pricing services and broker quotes to be of high quality, management determines the fair value of our investment securities after considering all relevant and available information.

14 unchanged sentences

We classify private securities without an external rating or public bond spread as Level 3.

In general, a significant increase (decrease) in credit spreads would have resulted in a significant decrease (increase) in the fair value for our fixed maturity securities as of December 31, 2022.

In general, a significant increase (decrease) in credit spreads

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

would have resulted in a significant decrease (increase) in the fair value for our fixed maturity securities as of December 31, 2023.

For remaining securities priced using internal models, we determine fair value using an income approach.

7 unchanged sentences

There were no fixed maturity securities classified as Level 1 as of December 31, 2023 and 2022.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Level 2 measurements

11 unchanged sentences

State and political subdivisions $ 438,214 Multi-dimensional attribute-based modeling systems, third-party pricing vendors Trade prices, material event notices, Municipal Market Data benchmark yields, broker quotes

government $ 9,349 Matrix pricing, spread priced to benchmark curves, price quotes from market makers Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

corporate $ 2,246,336 Multi-dimensional attribute-based modeling systems, broker quotes, price quotes from market makers, internal models, OAS-based models Bid side prices to Treasury Curve, Issuer Curve, which includes sector, quality, duration, OAS percentage and change for spread matrix, trade prices, comparative transactions, Trade Reporting and Compliance Engine (“TRACE”) reports

corporate $ 481,706 Multi-dimensional attribute-based modeling systems, OAS-based models, price quotes from market makers Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

ENACT HOLDINGS, INC.

1 unchanged sentence

Years Ended December 31, 2023, 2022 and 2021

government $ 11,467 Matrix pricing, spread priced to benchmark curves, price quotes from market makers Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

corporate $ 2,301,871 Multi-dimensional attribute-based modeling systems, broker quotes, price quotes from market makers, internal models, OAS-based models Bid side prices to Treasury Curve, Issuer Curve, which includes sector, quality, duration, OAS percentage and change for spread matrix, trade prices, comparative transactions, Trade Reporting and Compliance Engine (“TRACE”) reports

corporate $ 530,624 Multi-dimensional attribute-based modeling systems, OAS-based models, price quotes from market makers Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources

Residential mortgage-backed $ 10,755 OAS-based models, single factor binomial models, internally priced Prepayment and default assumptions, aggregation of bonds with similar characteristics, including collateral type, vintage, tranche type, weighted-average life, weighted-average loan age, issuer program and delinquency ratio, pay up and pay down factors, TRACE reports

17 unchanged sentences

The fair value of our Level 3 fixed maturity securities priced by broker quotes was $ 15.4 million as of December 31, 2023.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

Internal models

6 unchanged sentences

Price caps are established using inputs from market participants.

For structured securities, the primary inputs to the valuation include quoted prices for identical assets, or similar assets in markets that are not active, contractual cash flows, weighted-average coupon, weighted-average maturity, issuer rating, structure of the security, expected prepayment speeds and volumes, collateral type, current and forecasted loss severity, average delinquency rates, vintage of the loans, geographic region, debt service coverage

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

ratios, payment priority with the tranche, benchmark yields and credit spreads.

The fair value of our Level 3 fixed maturity securities priced using internal models was $ 316.0 million as of December 31, 2023.

21 unchanged sentences

corporate 652,844 — 557,690 95,154

Residential mortgage-backed 11,043 — 11,043 —

Other asset-backed 1,100,036 — 1,096,555 3,481

Total fixed maturity securities 4,884,760 — 4,565,499 319,261

Short-term investments 3,047 — 3,047 —

Total $ 4,887,807 $ — $ 4,568,546 $ 319,261

33 unchanged sentences

(1) The transfers into and out of Level 3 for fixed maturity securities were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value, such as external ratings or credit spreads.

Total realized and unrealized gains (losses) Balance

Total realized and unrealized gains (losses) Ending

December 31, 2021

30 unchanged sentences

Long-term borrowings $ 745,416 $ 748,785 $ 742,830 $ 739,020

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

(5) Loss reserves

2 unchanged sentences

Loss reserves, beginning of year $ 519,008 $ 641,325 $ 555,679

Run-off reserves ( 681 ) ( 654 ) ( 1,597 )

Reinsurance recoverable, beginning of year

Run-off reserves, beginning of year

( 678 ) ( 681 ) ( 654 )

Net loss reserves, beginning of year 518,330 640,644 555,025

8 unchanged sentences

Net loss reserves, end of year 516,221 518,330 640,644

Run-off reserves 678 681 654

Reinsurance recoverable, end of year

Run-off reserves, end of year

Loss reserves, end of year $ 518,191 $ 519,008 $ 641,325

1 unchanged sentence

(1) Losses and LAE incurred and paid exclude losses related to our run-off business.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

The liability for loss reserves represents our current best estimate;

however, there may be future adjustments to this estimate and related assumptions.

Such adjustments, reflecting any variety of new and adverse trends, could possibly be significant and result in future increases to reserves by amounts that could be material to our results of operations, financial condition and liquidity.

Losses incurred related to insured events of the current accident year relate to defaults that occurred in that year and represent the estimated ultimate amount of losses to be paid on such defaults.

2 unchanged sentences

As a result of the extended period of time that may exist between the reporting of a delinquency and the claim payment, as well as changes in economic conditions and the real estate market, significant uncertainty and variability exist on amounts ultimately paid.

The liability for loss reserves represents our current best estimate;

however, there may be future adjustments to this estimate and related assumptions.

In 2022, losses and LAE incurred of $ 219.5 million related to insured events of the current accident year was primarily attributable to new delinquencies coupled with $ 46 million of reserve strengthening on current year delinquencies.

Due to uncertainty in the current economic environment, we increased the expected claim rate on new delinquencies in 2022, which contributed to these amounts.

A portion of new delinquencies in the periods presented were from borrowers participating in deferred or reduced payments (“forbearance”) as a result of COVID-19.

Through the third quarter of 2022, when establishing loss reserves for borrowers in forbearance, we assumed a lower rate of delinquencies becoming active claims, which has the effect of producing a lower reserve compared to delinquencies that are not in forbearance.

We recorded losses and LAE incurred of $ 275.4 million, $ 219.5 million and $ 141.2 million related to the current accident year for the years ended December 2023, 2022 and 2021, respectively.

Losses related to insured events of the current accident year were primarily attributable to new delinquencies.

Losses in 2022 were impacted by $ 46 million of reserve strengthening on current year delinquencies.

Due to uncertainty in the economic environment, we increased the expected claim rate on new delinquencies beginning in 2022.

A portion of delinquencies in the periods presented were from borrowers participating in deferred or reduced payments (“forbearance”) as a result of COVID-19.

When establishing loss reserves for borrowers in forbearance from 2020 to 2022, we assumed a lower rate of delinquencies becoming active claims, which had the effect of producing a lower reserve compared to delinquencies that were not in forbearance.

Historical experience with localized natural disasters, such as hurricanes, indicates a higher cure rate for borrowers in forbearance.

Unlike a hurricane where the natural disaster occurs at a point in time and the rebuild starts soon after, COVID-19 brought ongoing displacement to the mortgage insurance market, making it more difficult to determine the effectiveness of forbearance and the resulting claim rates for new delinquencies in forbearance plans.

Given this difference, we initially leveraged our prior hurricane experience and have recently layered in cure activity from COVID-19 related delinquencies as considerations in the establishment of an appropriate claim rate estimate for new delinquencies in forbearance plans that have emerged as a result of COVID-19.

Loss reserves recorded on these new delinquencies have a high degree of estimation due to the level of uncertainty regarding whether delinquencies in forbearance will ultimately cure or result in claim payments as well as the timing and severity of those payments.

Loss reserves recorded on these new delinquencies have a high degree of estimation due to the level of uncertainty regarding whether

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

delinquencies in forbearance will ultimately cure or result in claim payments as well as the timing and severity of those payments.

During 2023, we experienced favorable reserve development of $ 248.2 million in incurred losses driven primarily by cure performance of delinquencies from 2022 and earlier, including a portion of those as a result of COVID-19.

During the peak of COVID-19, we experienced elevated new delinquencies subject to forbearance plans.

Those delinquencies have continued to perform at levels above our reserve expectations.

A component of the reserve release also related to delinquencies from 2022, as uncertainty in the economic environment has not negatively impacted cure performance to the extent initially expected.

The change was primarily attributable to $ 241 million in favorable reserves adjustments, which almost exclusively related to prior periods.

During 2022, we experienced favorable reserve development of $ 313.7 million in incurred losses attributable to prior years, primarily from better-than-expected cure performance on COVID-19 delinquencies from 2020 and 2021.

2 unchanged sentences

Included within this decrease to incurred losses attributable to prior years, we recorded $ 22.0 million in favorable reserve adjustments.

In 2020, losses and LAE incurred of $ 364.5 million related to insured events of the current accident year was primarily attributable to a significant increase in the number of new delinquencies driven mostly by borrower forbearance as a result of COVID-19.

During 2020, we experienced unfavorable reserve development of $ 16.2 million in incurred losses attributable to prior years, primarily from higher expected claim rates due to economic conditions occurring in the COVID-19 environment.

Included within this increase to incurred losses attributable to prior years, we recorded $ 28.4 million in unfavorable reserves adjustments, primarily associated with higher expected, future claim rates, partially offset by a $ 12.2 million decrease, primarily due to higher-than-expected delinquency cures.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

The following table sets forth information about incurred claims, as well as cumulative number of reported delinquencies and the total of incurred-but-not-reported (“IBNR”) liabilities plus expected development on reported claims included within the net incurred claims as of December 31, 2023.

21 unchanged sentences

(3) Represents reported and outstanding delinquencies less actual cures as of December 31 for each respective accident year.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

The following table sets forth paid claims development, net of reinsurance, for the year ended December 31, 2023, and a reconciliation to our total loss reserves as of December 31, 2023.

18 unchanged sentences

All outstanding liabilities before 2014, net of reinsurance 14,744

Run-off reserves 678

Total loss reserves $ 519,008

Net loss reserves (excluding run-off) $ 516,221

_______________

1 unchanged sentence

(2) Excludes cumulative paid claims and allocated claim adjustment expenses related to run-off business.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

The following table provides a reconciliation of the net incurred losses and paid claims development tables above to loss reserves at December 31, 2023:

(In thousands) December 31, 2023

Net loss reserves (excluding run-off)

Reinsurance recoverable

Run-off reserves

Loss reserves $ 518,191

The following table sets forth our average payout of incurred claims by age as of December 31, 2023:

5 unchanged sentences

(6) Reinsurance

We reinsure a portion of our policy risks to other companies in order to reduce our ultimate losses, diversify our exposures and comply with regulatory requirements.

We reinsure a portion of our policy risks to third parties in order to reduce our ultimate losses, diversify our exposures and comply with regulatory requirements.

We also assume certain policy risks written by other companies.

1 unchanged sentence

In the event that the reinsurers are unable to meet their obligations, we remain liable for the reinsured claims.

We monitor both the financial condition of individual reinsurers and risk concentrations arising from similar geographic regions, activities and economic characteristics of reinsurers to lessen the risk of default by such reinsurers.

We monitor both the

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

financial condition of individual reinsurers and risk concentrations arising from similar geographic regions, activities and economic characteristics of reinsurers to lessen the risk of default by such reinsurers.

The following table sets forth the effects of reinsurance on premiums written and earned for the years ended December 31:

11 unchanged sentences

The difference of $ 53.4 million between written premiums of $ 903.7 million and earned premiums of $ 957.1 million represents the decrease in unearned premiums for the year ended December 31, 2023.

The decrease in unearned premiums was mainly the result of policy cancellations in our single premium mortgage insurance product.

Assumed premium as a percentage of net premium earned is 0.0 % for the years ended December 31, 2022, 2021 and 2020.

The decrease in unearned premiums was mainly the result of premiums recognized via the earnings curve and low originations related to our single-premium product.

Assumed premium as a percentage of net premium earned is 0.2 % for the year ended December 31, 2023 and 0.0 % for the years ended December 31, 2022 and 2021.

Excess-of-loss reinsurance

4 unchanged sentences

Traditional reinsurance providers collateralize a portion of their coverage by holding funds in trust.

We believe that the risk transfer

We believe that the risk transfer requirements for reinsurance accounting were met as these excess-of-loss insurance transactions assume significant insurance risk and a reasonable possibility of significant loss.

EMICO has rights to terminate the ILN or traditional XOL reinsurance agreements upon the occurrence of certain events.

ENACT HOLDINGS, INC.

1 unchanged sentence

Years Ended December 31, 2023, 2022 and 2021

requirements for reinsurance accounting were met as these excess of loss insurance transactions assume significant insurance risk and a reasonable possibility of significant loss.

EMICO has rights to terminate the ILNs or traditional XOL reinsurance agreements upon the occurrence of certain events.

The following table presents the issue date, policy dates, initial and current first layer retained aggregate loss and initial and current reinsurance coverage amount under each reinsurance transaction.

19 unchanged sentences

2022-5 XOL 9/15/2022 1/01/2022 - 6/30/2022 $ 256 $ 256 $ 201 $ 193

2023-1 XOL 3/08/2023 1/01/2023 - 12/31/2023 $ 360 $ 360 $ 180 $ 164

Subsequent to year end, on January 30, 2024, we executed an excess-of-loss reinsurance transaction with a panel of reinsurers, which provides up to $ 255 million of reinsurance coverage on a portion of current and expected new insurance written for the 2024 book year, effective January 1, 2024.

Quota Share Reinsurance

On June 30, 2023, EMICO engaged in a quota share reinsurance agreement with a panel of third-party reinsurers.

Under the agreement, we cede premiums earned on all eligible policies in exchange for reimbursement of ceded claims and claims expenses on covered policies, a specific ceding commission and profit commission determined based on ceded claims.

EMICO has rights to terminate the reinsurance agreement upon the occurrence of certain events.

Reinsurance recoverables are recorded in Other assets on the consolidated balance sheets.

Agreement Issue date Policy dates Ceding percentage Ceding commission Profit commission

QS 2023-1 6/30/2023 1/01/2023 - 12/31/2023 16.125 % 20 % up to 55 %

Subsequent to year end, on January 3, 2024, we entered into a quota share reinsurance agreement with a panel of third-party reinsurers.

Under the agreement, EMICO will cede approximately 21 % of a portion of its new insurance written from January 1, 2024 through December 31, 2024.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

(7) Borrowings

8 unchanged sentences

The notes contain customary events of default which, subject to certain notice and cure conditions, can result in the acceleration of the principal and accrued interest on the outstanding notes if we breach the terms of the indenture.

We committed to retain $ 300 million of the net proceeds from the issuance of these notes that can be drawn down exclusively for our debt service or to contribute to EMICO to meet its regulatory capital needs.

As of December 31, 2022, the balance of the 2025 Senior Notes proceeds required to be held by the holding company was approximately $ 203 million.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Revolving Credit Agreement

2 unchanged sentences

The applicable margins are based on the ratings established by certain debt rating agencies for EHI’s senior unsecured debt.

The Facility matures in June 2027, but under certain conditions EHI may need to repay any outstanding amounts and terminate the Facility earlier than the maturity date.

We may use borrowings under the Facility for working capital needs and general corporate purposes, including the execution of dividends to our shareholders and capital contributions to our insurance subsidiaries.

The Facility contains several covenants, including financial covenants relating to minimum net worth, capital and liquidity levels, maximum debt to capitalization level and PMIERs compliance.

We are in compliance of all covenants of the Facility and the Facility remained undrawn as of December 31, 2022.

We are in compliance of all covenants of the Facility and the Facility has remained undrawn through December 31, 2023.

(8) Income taxes

9 unchanged sentences

Total provision for income taxes $ 185,998 $ 194,065 $ 148,531

We had current income taxes payable of $ 9.1 million as of December 31, 2022 which was recorded in other liabilities.

We had current income taxes receivable of $ 1.1 million as of December 31, 2021 which was recorded in other assets.

We had current income taxes payable of $ 14.9 million and $ 9.1 million as of December 31, 2023 and 2022, respectively, which were recorded in other liabilities.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

We paid federal taxes of $ 176.7 million and state taxes of $ 5.3 million for the year ended December 31, 2023;

11 unchanged sentences

(1) “Other, net” is comprised primarily of nondeductible expenses, prior year true-ups and tax-exempt income.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

The components of the deferred income taxes were as follows as of December 31:

1 unchanged sentence

Accrued commissions and general expenses $ 12,658 $ 12,162

Capital loss carry forwards 2,723 —

Net unrealized losses on investment securities 63,189 104,047

6 unchanged sentences

Deferred acquisition costs 5,218 5,460

Net unrealized gains on investment securities — 22,577

Investments 18,893 17,512

2 unchanged sentences

Net deferred income tax asset (liability) $ 88,489 $ 127,473

The above valuation allowances of $ 7.3 million and $ 6.3 million as of December 31, 2022 and 2021, respectively, related to state deferred tax assets.

The valuation allowances above, $ 7.8 million and $ 7.3 million as of December 31, 2023 and 2022, respectively, related to state deferred tax assets.

The state deferred tax assets related primarily to the future deductions associated with non-insurance and insurance net operating loss (“NOL”) carryforwards.

As of December 31, 2022, there were no U.S.

As of December 31, 2023, the capital loss carryforward was $ 12.9 million and, if unused, will expire in 2028.

There were no U.S.

federal NOL carryforwards.

Except as discussed above with regard to our state deferred tax assets, we have not established a valuation allowance with respect to any other deferred tax assets as of December 31, 2022, based primarily upon projections of future taxable income.

Except as discussed above, we have not established a valuation allowance with respect to any other deferred tax assets as of December 31, 2023, based primarily upon projections of future taxable income.

With respect to deferred tax assets associated with unrealized losses on investment securities, management has the ability and intent to execute tax planning strategies, including to hold those investment assets to recovery or maturity.

We have determined that such strategies are prudent and feasible, and would be implemented, if necessary, to ensure recognition of the deferred tax asset.

After consideration of all available evidence, we concluded that it is more likely than not that these deferred tax assets will be realized.

After consideration of all available evidence, we concluded that it is more likely than not that these deferred tax

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

assets will be realized.

If our actual results do not validate the current projections of pre-tax income, we may be required to record an additional valuation allowance which could have a material impact on our consolidated financial statements in future periods.

8 unchanged sentences

We are part of the 2022 Amended and Restated Tax Allocation Agreement (“TAA”) between Genworth and certain of our subsidiaries.

The TAA was approved by state insurance regulators and our

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Board of Directors.

The TAA was approved by state insurance regulators and our Board of Directors.

The tax allocation methodology is based on the separate return liabilities with offsets for losses and credits utilized to reduce the current consolidated tax liability as allowed by applicable law and regulation.

13 unchanged sentences

Our obligation results from an allocation of our share of expenses from Genworth’s plans based on benefits eligible earnings.

Benefits eligible earnings includes base pay, overtime, annual incentives and sales commissions.

Benefits eligible earnings include base pay, overtime, annual incentives and sales commissions.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

We account for such Shared Plans as multiemployer benefit plans.

10 unchanged sentences

Expenses allocated to us for qualified and non-qualified defined benefit pension plans were $ 0.3 million, $ 0.3 million, and $ 0.4 million in 2023, 2022 and 2021, respectively.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Genworth provides retiree health benefits to our employees hired prior to January 1, 2005, who meet certain service requirements.

16 unchanged sentences

Our long-term care insurance is provided through Genworth’s long-term care insurance products.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

(10) Share-based compensation

4 unchanged sentences

Under the 2021 Omnibus incentive Plan, EHI was authorized to grant a maximum number of shares of Common Stock for issuance not to exceed 4 million shares.

Share-based compensation expense under the 2021 Omnibus Plan was $ 9.9 million and $ 1.5 million, for the years ended December 31, 2022 and 2021, respectively, and is recorded with acquisition and operating expenses, net of deferrals in the consolidated statement of income.

Share-based compensation expense under the 2021 Omnibus Plan was $ 15.3 million, $ 9.9 million, $ 1.5 million for the years ended December 31, 2023, 2022 and 2021, respectively, and is recorded with acquisition and operating expenses, net of deferrals in the consolidated statement of income.

Stock-based compensation expense was recognized evenly on a straight-line attribution method over the awards’ respective vesting period.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

During 2023, 2022, and 2021 the Company issued RSUs to our employees with average restriction periods of three years and a weighted average fair value of $ 24.26 , $ 22.18 , and $ 19.02 , respectively.

Each grant was measured at the fair value of a share of the Company’s Class A Common Stock on the grant date.

The PSUs granted in 2022 have a three-year measurement period starting on January 1, 2022, going through December 31, 2024.

The performance metrics are based on Enact’s consolidated book value per share growth at the end of the performance period, calculated as the increase in book value divided by the number of shares outstanding from January 1, 2022 to December 31, 2024.

The PSUs granted in 2023 and 2022 have a three-year measurement period starting on January 1, 2023 and 2022, respectively, going through December 31, 2025 and 2024, respectively.

The performance metrics are based on Enact’s consolidated book value per share growth at the end of the performance period, calculated as the increase in book value divided by the average number of shares outstanding during the measurement period.

The PSUs were granted at fair value as of the approval date by Enact Holdings’ Board of Directors.

1 unchanged sentence

The declaration and payment of future dividends to holders of our common stock will be at the discretion of our board of directors.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

The following table summarizes the status of the equity-based awards as of December 31, 2023:

Awards in thousands

Balance as of January 1, 2021 — $ — — $ — — $ —

Granted 628 $ 19.02 — $ — 17 $ 20.87

Dividend equivalents 36 $ 21.25 — $ — — $ —

Terminated ( 10 ) $ 19.00 — $ — — $ —

Balance as of December 31, 2021 654 $ 19.02 — $ — 17 $ 20.87

1 unchanged sentence

Dividend equivalents 62 $ 24.00 10 $ 24.00 5 $ 23.98

Exercised ( 3 ) $ 19.00 — $ — — $ —

Terminated ( 26 ) $ 19.73 — $ — — $ —

7 unchanged sentences

This expense is expected to be recognized over a weighted-average period of approximately two years .

The actual tax benefit realized for the tax deductions from the exercise of EHI share-based awards was $ 0.4 million for the year ended December 31, 2023.

Genworth share-based compensation

8 unchanged sentences

The 2004 Omnibus Incentive Plan together with the 2012 Omnibus Incentive Plan and the 2018 Omnibus Incentive Plan are referred to collectively as the “Omnibus Incentive Plans.”

Share-based compensation expense under the Omnibus Incentive Plans was $ 3.9 million, $ 5.5 million and $ 4.4 million for the years ended December 31, 2022, 2021 and 2020, respectively, and was

Share-based compensation expense under the Omnibus Incentive Plans was $ 2.6 million, $ 3.9 million and $ 5.5 million for the years ended December 31, 2023, 2022 and 2021, respectively, and was included within acquisition and operating expenses, net of deferrals in the consolidated statements of income.

For awards issued prior to January 1, 2006, share-based compensation expense was recognized on a graded vesting attribution method over the awards’ respective vesting schedule.

For awards issued after January 1, 2006, share-based compensation expense was recognized evenly on a straight-line attribution method over the awards’ respective vesting period.

ENACT HOLDINGS, INC.

1 unchanged sentence

Years Ended December 31, 2023, 2022 and 2021

included within acquisition and operating expenses, net of deferrals in the consolidated statements of income.

For awards issued prior to January 1, 2006, share-based compensation expense was recognized on a graded vesting attribution method over the awards’ respective vesting schedule.

For awards issued after January 1, 2006, share-based compensation expense was recognized evenly on a straight-line attribution method over the awards’ respective vesting period.

For purposes of determining the fair value of share-based payment awards on the date of grant, Genworth has historically used the Black-Scholes Model.

However, no SARs or stock options were granted during 2022, 2021 or 2020 and therefore the Black-Scholes Model was not used in those respective years.

The Black-Scholes Model requires the input of certain assumptions that involve judgment.

Circumstances may change, and additional data may become available over time, which could result in changes to these assumptions and methodologies.

During 2021 and 2020, Genworth issued RSUs to our employees with average restriction periods of three years , with a fair value of $ 3.31 and $ 3.53 , respectively, which were measured at the market price of a share of Genworth’s Class A Common Stock on the grant date.

During 2021 and 2020, we granted PSUs with a weighted-average fair value of $ 3.45 and $ 3.03 , respectively.

During 2021, Genworth issued RSUs to our employees with average restriction periods of three years , with a fair value of $ 3.31 , which were measured at the market price of a share of Genworth’s Class A Common Stock on the grant date.

During 2021, Genworth granted PSUs with a weighted-average fair value of $ 3.45 .

The PSUs were granted at market price as of the approval date by Genworth’s Board of Directors.

2 unchanged sentences

The performance metrics are based on Genworth’s consolidated adjusted operating income and its stockholder return relative to certain of its peer companies as of the grant date.

The PSUs granted in 2020 have a three-year measurement period starting on January 1, 2020, going through December 31, 2022.

The performance metrics are based on adjusted operating income of Genworth’s U.S.

Mortgage Insurance and Australia Mortgage Insurance segments and gross incremental annual premiums in Genworth’s long-term care insurance business, defined as approved weighted-average premium rate increases multiplied by the annualized in-force premiums.

For all PSU awards granted, the compensation committee of Genworth’s Board of Directors determines and approves no later than March 15, following the end of the three-year performance period for each applicable performance period, the number of units earned and vested for each distinct performance period.

Expense associated with our PSUs was less than $ 1.0 million in 2022, $ 1.3 million in 2021 and less than $ 1.0 million in 2020.

In 2021 and 2020, Genworth granted cash awards with a fair value of $ 1.00 .

Expense associated with our PSUs was less than $ 1.0 million in 2023 and 2022, and $ 1.3 million in 2021.

In 2021, Genworth granted cash awards with a fair value of $ 1.00 .

Genworth has performance-based cash awards, which vested and paid out in 2021.

Genworth also has time-based cash awards, which vest over three years , with a third of the payout occurring per year as determined by the

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

vesting period, beginning on the first anniversary of the grant date.

Genworth also has time-based cash awards, which vest over three years , with a third of the payout occurring per year as determined by the vesting period, beginning on the first anniversary of the grant date.

The following table summarizes cash award activity as of December 31, 2023, 2022 and 2021:

6 unchanged sentences

Forfeited — ( 685 )

Balance as of January 1, 2021

Granted — 4,330

Performance adjustment 449 83

Balance as of December 31, 2021

Employee transfer

Vested — ( 3,600 )

5 unchanged sentences

Balance as of December 31, 2023

The following table summarizes stock option activity as of December 31, 2020:

(Shares in thousands) Shares subject

to option Weighted-average

exercise price

Balance as of January 1, 2020

Granted — $ —

Exercised — $ —

Expired and forfeited ( 78 ) $ 14.18

Balance as of December 31, 2020 — $ —

There was no stock option activity for the periods ended December 31, 2022 and 2021 and no stock options outstanding as of December 31, 2022.

ENACT HOLDINGS, INC.

12 unchanged sentences

Granted 316 $ 3.31 303 $ 3.45 — $ —

Employee transfer — $ — — $ — 18 $ 2.77

Exercised ( 90 ) $ 3.44 — $ — — $ —

Terminated — $ — — $ — ( 87 ) $ 3.12

Balance as of January 1, 2021

Balance as of December 31, 2021

450 $ 3.36 572 $ 3.63 476 $ 2.70

Granted — $ — — $ — — $ —

Performance adjustment — $ — 135 $ 4.61 — $ —

Employee transfer 32 $ 5.13 — $ — 49 $ 2.71

10 unchanged sentences

126 $ 3.78 303 $ 3.45 185 $ 3.06

As of December 31, 2022, and 2021, total unrecognized share-based compensation expense related to non-vested awards not yet recognized was $ 1.1 million and $ 2.5 million, respectively.

This expense is expected to be recognized over a weighted-average period of approximately one year and less than one year , respectively.

In 2022 and 2021, there was no cash received from stock options exercised in each year.

As of December 31, 2023, and 2022, total unrecognized share-based compensation expense related to non-vested awards not yet recognized was $ 1.1 million and is expected to be recognized over a weighted-average period of approximately one year , for each period.

In 2023, there was no cash received from stock options exercised.

New shares were issued to settle all exercised awards.

The actual tax benefit realized for the tax deductions from the exercise of share-based awards was $ 0.7 million and $ 0.7 million as of December 31, 2022 and 2021, respectively.

The actual tax benefit realized for the tax deductions from the exercise of Genworth share-based awards was $ 0.5 million as of December 31, 2023.

(11) Related party transactions

14 unchanged sentences

We charged Genworth $ 0.5 million, $ 0.7 million and $ 0.3 million for these services in 2023, 2022 and 2021, respectively.

In November 2021, we completed the acquisition of Genworth Financial Mauritius Holdings Limited from Genworth Financial International Holdings.

In November 2021, we completed the acquisition of Genworth Financial Mauritius Holdings Limited from Genworth Financial International Holdings, LLC.

Refer to Note 3 for further details.

40 unchanged sentences

On November 1, 2022, our board of directors approved a share repurchase program authorizing the Company to spend up to $ 75 million, excluding commissions, to repurchase EHI common stock in the open market or in privately negotiated transactions, based on market and business conditions, stock price and other factors.

On August 1, 2023, we announced a new share repurchase authorization which allows for the purchase of an additional $ 100 million of EHI common stock.

EHI generally operates its share repurchase programs pursuant to a trading plan under Rule 10b5-1 of the Exchange Act, which permits the Company to purchase shares, at predetermined price targets, when it may otherwise be precluded from doing so.

During the year ended December 31, 2022, the Company purchased 63,571 shares at an average price of $ 24.10 per share, including commissions.

As of December 31, 2022, $ 73.5 million remained available under this program.

All treasury stock has been constructively retired as of December 31, 2022.

Subsequent to year end, the Company purchased 253,689 shares at an average price of $ 24.13 through January 31, 2023.

During the year ended December 31, 2023, the Company purchased 3,520,052 shares at an average price of $ 24.89 per share, excluding commissions, compared to 63,571 shares at an average price of $ 24.10 per share for the year ended December 31, 2022.

As of December 31, 2023, $ 85.9 million

ENACT HOLDINGS, INC.

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Years Ended December 31, 2023, 2022 and 2021

remained available under this program.

All treasury stock has been retired or constructively retired as of December 31, 2023.

Subsequent to year end, the Company purchased 133,307 shares at an average price of $ 27.75 per share through January 31, 2024.

Cash Dividends

We paid a quarterly cash dividend of $ 0.16 per share in the fourth, third, and second quarters of 2023, and $ 0.14 per share in the first quarter of 2023.

In the second, third, and fourth quarters of 2022, we paid quarterly cash dividends of $ 0.14 per share.

On December 6, 2022, we paid a special cash dividend of $ 1.12 per share, totaling approximately $ 183 million.

On December 5, 2023, we paid a special cash dividend of $ 0.71 per share or approximately $ 113 million.

This compared to a dividend of $ 1.12 per share, or approximately $ 183 million on December 6, 2022.

Subsequent to year end, in February 2024, we announced our first quarter dividend of $ 0.16 per share.

(14) Accumulated other comprehensive income (loss)

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$ 208,378 $ — $ 208,378

Cumulative effect of changes in accounting 281 — 281

Other comprehensive income (loss) before reclassifications ( 124,908 ) ( 7 ) ( 124,915 )

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Total other comprehensive income (loss) ( 124,790 ) ( 7 ) ( 124,797 )

Balance January 1, 2021, net of tax

Balance December 31, 2021, net of tax

83,588 ( 7 ) 83,581

Cumulative effect of changes in accounting 281 — 281

Other comprehensive income (loss) before reclassifications ( 468,229 ) 159 ( 468,070 )

8 unchanged sentences

$ ( 230,556 ) $ 156 $ ( 230,400 )

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

The following table presents the effect of the reclassification of significant items out of accumulated other comprehensive income (loss) on the respective line items of the consolidated statements of income:

5 unchanged sentences

Benefit (expense) for income taxes 2,945 464 ( 43 ) Provision for income taxes

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

(15) Statutory information

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GAAP, our fixed maturity securities are classified as available-for-sale and are recorded at fair value, with the unrealized gain or loss recognized, net of tax, as an increase or decrease to accumulated other comprehensive income.

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2023, 2022 and 2021

(e) Under SSAP, certain assets, designated as non-admitted assets, are charged directly against statutory surplus.

6 unchanged sentences

Contingency reserve $ 3,959,716 $ 3,551,022 $ 3,042,117

ENACT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2022, 2021 and 2020

Statutory Capital Requirements

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Our inability to increase the capital as required in the anticipated timeframes and on the anticipated terms, and to realize the anticipated benefits, could have a material adverse impact on our business, results of operations and financial condition.

More particularly, our ability to continue to meet the PMIERs financial requirements and maintain a prudent amount of capital in excess of those requirements, given the dynamic nature of asset valuations and requirement changes over time, is dependent upon, among other things:

(i) our ability to complete credit risk transfer (“CRT”) transactions on our anticipated terms and timetable, which, as applicable, are subject to market conditions, third-party approvals and other actions (including approval by the GSEs), and other factors that are outside of our control and (ii) our ability to contribute holding company cash or other sources of capital to satisfy the portion of the financial requirements that are not satisfied through these transactions.

The PMIERs Amendment implemented both permanent and temporary revisions to PMIERs.

For loans that became non-performing due to a COVID-19 hardship, PMIERs was 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

ENACT HOLDINGS, INC.

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Years Ended December 31, 2023, 2022 and 2021

plans offered by the GSEs.

The PMIERs Amendment implemented both permanent and temporary revisions to PMIERs.

The risk-based required asset amount factor for a 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.

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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.

The PMIERs Amendment additionally 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.

Our assessment of PMIERs compliance is based on a number of factors, including our understanding of the GSEs’ interpretation of the PMIERs financial requirements.

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

If we are unable to continue to meet the requirements mandated by PMIERs, the GSE Restrictions (as defined herein) 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.

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.

We have met all PMIERs reporting requirements as required by the GSEs.

As of December 31, 2023, we had 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 above the published PMIERs financial requirements as of December 31, 2022, was $ 2,050 million, compared to $ 2,003 million above the published PMIERs requirements as of December 31, 2021, resulting in a PMIERs sufficiency ratio of 165 % as of both December 31, 2022 and 2021, which in each case, was above the requirement imposed by the 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, 2022 and December 31, 2021, benefited from the application of a 0.30 multiplier applied to the risk-based required asset amount factor for certain non-performing loans.

The application of the 0.30 multiplier to all eligible delinquencies provided $ 132 million of benefit to our December 31, 2022 PMIERs required assets and $ 390 million to our December 31, 2021 required assets.

Our CRT transactions provided an estimated aggregate of $ 1,578 million of PMIERs capital credit as of December 31, 2022 compared to $ 1,404 million on as of December 31, 2021.

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

The sufficiency as of December 31, 2023, was above the requirement imposed by the GSE Restrictions that required us to maintain a PMIERs sufficiency ratio of 120 % in 2022.

The GSE Restrictions are no longer relevant to us, beginning in 2023.

Dividend Restrictions

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mortgage insurance subsidiaries are required to maintain minimum capital on a statutory basis, as well as pursuant to the PMIERs promulgated by the GSEs.

Moreover, even where such dividends or distributions would not cause capital to fall below the minimum levels required by state insurance regulators and the GSEs, all proposed dividends or distributions, regardless of amount and source, by our U.S.

mortgage insurance subsidiaries are subject to review and potential disapproval by the North Carolina Commissioner of Insurance (the “Commissioner”).

Within that general regulatory right of review process, there are three (3) minor procedural variances depending on (i) the amount of the dividend or distribution as well as (ii) the source

Moreover, even where such dividends or distributions would not cause capital to fall below the minimum levels required by state insurance regulators and the GSEs, the ability of our regulated insurance operating subsidiaries to pay dividends and distributions to us is restricted by certain provisions of North Carolina insurance laws.

Our insurance subsidiaries may pay dividends only from unassigned surplus;

payments made from sources other than unassigned surplus, such as paid-in and contributed surplus, are categorized as distributions.

Notice of all dividends must be submitted to the Commissioner

ENACT HOLDINGS, INC.

1 unchanged sentence

Years Ended December 31, 2023, 2022 and 2021

As regards amount, dividends and distributions may be classified as either “ordinary” or “extraordinary.” (1) The review standard for an “ordinary” dividend or distribution is that notice must be given to the Commissioner 30 days in advance of the proposed payment date, during which period the Commissioner may disapprove the proposed dividend or distribution.

An “extraordinary dividend or distribution” is defined by statute as one, which combined with all others made in the preceding 12 months, exceeds the greater of (i) 10% of the insurer’s surplus as regards policyholders as of the preceding December 31, or (ii) net income, excluding realized capital gains, for the 12-month period ending the preceding December 31.

(2) The review standard for an “extraordinary” dividend or distribution is effectively the same as that for an “ordinary” dividend or distribution that the insurer must give 30 days’ notice and the Commissioner has not disapproved the proposal in that 30-day period.

For both “ordinary” and “extraordinary” dividends, the Commissioner has the option to affirmatively grant approval prior to the expiration of the 30-day notice period.

(3) Finally, as regards source of funds, the payment of any dividend or distribution from any source other than unassigned surplus, regardless of the amount, requires prior written approval of the Commissioner.

In each of the three (3) instances, approval or non-disapproval of any dividend or distribution is based upon the reasonableness of the insurer’s surplus in relation to its outstanding liabilities and the adequacy of its surplus relative to its financial needs.

of the NCDOI (the “Commissioner”) within 5 business days after declaration of the dividend, and at least 30 days before payment thereof.

No dividend may be paid until 30 days after the Commissioner has received notice of the declaration thereof and (i) has not within that period disapproved the payment or (ii) has approved the payment within the 30-day period.

Any distribution, regardless of amount, requires that same 30-day notice to the Commissioner, but also requires the Commissioner’s affirmative approval before being paid.

Based on estimated statutory results as of December 31, 2023, in accordance with applicable dividend restrictions, our insurance subsidiaries could pay dividends of approximately $ 336 million from unassigned surplus in 2024 without obtaining prior regulatory approval, although notice of the intent to pay must be provided to the Commissioner 30 days in advance thereof during which period the Commissioner may review the dividend pursuant to statutory standards.

1 unchanged sentence

The basic earnings per share computation is based on the weighted average number of shares of common stock outstanding.

For the years ended December 31, 2022 and December 31, 2021, the calculation of dilutive weighted average shares considers the impact of restricted stock units and performance stock units issued to employees as well deferred stock units issued to our directors.

For the year ended December 31, 2020, we had no instruments outstanding that would be dilutive to earnings per share.

For the years ended December 31, 2023, 2022 and 2021, the calculation of dilutive weighted average shares considers the impact of restricted stock units and performance stock units issued to employees as well deferred stock units issued to our directors.

The following table presents the computation of earnings per share for the years ended December 31:

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Investments in subsidiaries $ 4,935,514 $ 4,402,529

Fixed maturity securities available-for-sale, at fair value (amortized cost $ 246,680 as of December 31, 2022)

Fixed maturity securities available-for-sale, at fair value (amortized cost of $ 291,962 and $ 246,680 as of December 31, 2023 and 2022, respectively)

293,589 243,568

Short-term investments 10,326 3,047

23 unchanged sentences

Net investment income $ 23,998 $ 8,412 $ 43

Net investment gains (losses)

Total revenues 23,760 8,412 43

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Adjustments to reconcile net income to net cash provided by operating activities:

Net (gains) losses on investments

Equity in income from subsidiaries ( 696,684 ) ( 746,633 ) ( 590,468 )

12 unchanged sentences

Purchase of equity interest — — ( 27,304 )

Proceeds from maturities of fixed maturity securities 3,612 — —

Proceeds from sales of fixed maturity securities available-for-sale 23,382 — —

Maturities of fixed maturity securities available-for-sale 30,709 3,612 —

Change in short-term investments ( 6,758 ) ( 3,077 ) —

2 unchanged sentences

Cash flows from financing activities:

Proceeds from the issuance of long-term debt — — 737,651

Repurchase of common stock ( 87,762 ) ( 1,532 ) —

Dividends paid ( 212,964 ) ( 250,776 ) ( 200,294 )

Net cash provided by (used in) financing activities ( 252,308 ) ( 200,294 ) 300,298

Net cash used in financing activities ( 300,726 ) ( 252,308 ) ( 200,294 )

Net increase (decrease) in cash and cash equivalents ( 54,817 ) ( 57,779 ) ( 36,111 )

17 unchanged sentences

All of the share and per share information presented in the consolidated financial statements, notes to the consolidated financial statements and supplemental schedules to the financial statements has been adjusted to reflect the share exchange on a retroactive basis for all periods and as of all dates presented.

In November 2021, we completed the acquisition of Genworth Financial Mauritius Holdings Limited from Genworth Financial International Holdings.

During 2023, EHI contributed $ 225 thousand into Enact Re Ltd.

and subsequently contributed the Enact Re Ltd.

legal entity to EMICO.

In November 2021, we completed the acquisition of Genworth Financial Mauritius Holdings Limited from Genworth Financial International Holdings, LLC.

Refer to Note 3 in our audited consolidated financial statements for further details.

14 unchanged sentences

Per the GSE Restrictions, EHI committed to retain $ 300 million of the net proceeds from the issuance of these notes that can be drawn down exclusively for its debt service or to contribute to EMICO to meet its regulatory capital needs.

As of December 31, 2022, the balance of the 2025 Senior Notes proceeds required to be held by the holding company was approximately $ 203 million.

ENACT HOLDINGS, INC.

4 unchanged sentences

The applicable margins are based on the ratings established by certain debt rating agencies for EHI’s senior unsecured debt.

The Facility matures in June 2027, but under certain conditions EHI may need to repay any outstanding amounts and terminate the Facility earlier than the maturity date.

The Facility contains several covenants, including financial covenants relating to minimum net worth, capital and liquidity levels, maximum debt to capitalization level and PMIERs compliance.

We are in compliance of all covenants of the Facility and the Facility remained undrawn as of December 31, 2022.

We are in compliance of all covenants of the Facility and the Facility has remained undrawn through December 31, 2023.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data