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Item 1A. Risk Factors

2026-02-27 compared with 2025-02-28 · 91 added, 104 removed, 576 unchanged (25% of the section changed)

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These risks could materially affect our business, results of operations or financial condition, cause the trading price of our common stock to decline materially or cause our actual results to differ materially from those expected or those expressed in any forward-looking statements made by us or on our behalf.

Statements in this section are based on the Company’s beliefs and opinions regarding matters that could materially adversely affect the Company in the future and are not representations as to whether such matters have or have not occurred previously.

These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Cautionary Note Regarding Forward-Looking Statements” and the risks of our businesses described elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2025.

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• Our risk management programs may not be effective in identifying or adequate in controlling or mitigating the risks we face.

• Interest rates and changes in rates could materially adversely affect our business, results of operations and financial condition.

• Changes in interest rates could materially adversely affect our business, results of operations and financial condition.

• We may be unable to maintain or increase the capital needed in our business in a timely manner, on anticipated terms or at all, including through improved business performance, CRT transactions, securities offerings or otherwise, in each case as and when required.

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Recent home price appreciation coupled with high interest rates has placed pressure on housing affordability.

The pace of existing single-family home sales remains depressed as homeowners are reluctant to sell their house and pay significantly higher mortgage rates for a new one.

The pace of existing single-family home sales remains slow as homeowners are reluctant to sell their house and pay higher mortgage rates for a new one.

Should home values decline, we could experience a higher frequency and severity of defaults.

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In addition, declining housing values may impact the effectiveness of our loss management programs, eroding the value of mortgage collateral and reducing the likelihood that properties with defaulted mortgages can be sold for an amount sufficient to offset unpaid principal and interest losses.

As a result, declines in home values may increase the risk of loss and typically increase the severity of claims we may pay.

Any of these events may have a material adverse effect on our business, results of operations and financial condition.

As a result, declines in home values may increase the risk of loss and typically increase the severity of claims we pay.

The amount of the potential loss depends in part on whether the home of a borrower who defaults on a mortgage can be sold for an amount that will cover the unpaid principal balance, interest and the expenses of the sale.

In previous economic slowdowns in the United States, we experienced a pronounced weakness in the housing market, as well as declines in home prices driving high levels of delinquencies.

Any of the events outlined above may have a material adverse effect on our business, results of operations and financial condition.

When we are notified that an insured loan is in default, we establish loss reserves based on management’s estimate of claim rates and claim sizes, which are subject to uncertainties and are based on assumptions about certain estimation parameters that may be volatile.

As a result, the actual claim payments we make may materially differ from the amount of our corresponding loss reserves.

Our practice, consistent with industry practice and SAP applicable to insurance companies, is to establish loss reserves in our consolidated U.S.

GAAP financial statements based on claim rates and severity for loans that servicers have reported to us as being in default, which is typically after the second

missed payment.

Consistent with industry practice and SAP applicable to insurance companies, we establish loss reserves in our consolidated U.S.

GAAP financial statements based on claim rates and severity for loans that servicers have reported to us as being in default, which is typically after the second missed payment.

We also establish incurred but not reported (“IBNR”) reserves for estimated losses incurred on loans in default that have not yet been reported to us by servicers.

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These models rely on estimates and projections that are inherently uncertain, may use data and/or assumptions that do not adequately reflect recent experience and relevant industry data, and may not operate as intended.

The models require accurate data, including financial statements, credit reports or other financial information, and reliance on inaccurate data could result in unexpected losses, reputational damage or other effects that could have a material adverse effect on our business, results of operations and financial condition.

For example, there are proposals to change the credit score landscape including the implementation of FICO 10T, changes to credit modeling from the GSEs and the elimination of medical debt from credit reporting.

These proposals could limit comparability to historical data used in our models and lead to inaccurate results.

The models require accurate data, including financial statements, credit reports or other financial information, much of which comes from third parties.

Reliance on inaccurate data could result in unexpected losses, reputational damage or other effects that could have a material adverse effect on our business, results of operations and financial condition.

For example, there are proposals to change the credit score landscape including the acceptance of Vantage score in addition to FICO, or the adoption of FICO 10T.

Proposals like this could limit comparability to historical data used in our models and lead to inaccurate results.

In addition, if any of our models contain programming or other errors, are ineffective, use data provided by third parties that is incorrect, or if we are unable to obtain relevant data from third parties, our processes could be negatively affected.

The models may prove to be less predictive than we expect for a variety of reasons, including economic conditions that develop differently than we forecast, unique conditions for which we do not have good historical comparators, unexpected economic and unemployment conditions that arise, changes in the law or in PMIERs, issues arising in the construction, implementation, interpretation or use of the models or other programs, the use of inaccurate assumptions or use of short-term financial metrics that do not reveal long-term trends.

The limitations of our models may be material

and could lead us to make wrong or sub-optimal decisions in aspects of our business, which could have a material adverse effect on our business, results of operations and financial condition.

The limitations of our models may be material and could lead us to

make wrong or sub-optimal decisions in aspects of our business, which could have a material adverse effect on our business, results of operations and financial condition.

In addition, from time to time we seek to improve our actuarial and financial models, and the conversion process may result in material changes to assumptions and financial results.

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We believe the principal competitive factors in the sale of our products are price, reputation, customer relationships, financial strength ratings and service.

There are currently six active mortgage insurers in the United States, including us.

There are currently six active mortgage insurers in the United States, including us, though additional entrants into the market are possible.

Price remains a leading competitive driver.

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Specifically, such competitive moves could result in a loss of customers, require us to lower premiums, adopt riskier credit guidelines or implement other changes that could lower our revenues, increase the risk of the loans we insure or increase our expenses.

These impacts could also be exacerbated by additional mortgage insurance entrants.

If we are unable to compete effectively against our competitors and attract and retain our target customers, it could adversely impact our financial condition, results of operations and ability to grow our business.

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If individuals take excessive or inappropriate risks, those risks could harm our reputation and have a material adverse effect on our business, results of operations and financial condition.

Interest rates and changes in rates could materially adversely affect our business, results of operations and financial condition.

Changes in interest rates could materially adversely affect our business, results of operations and financial condition.

Rising interest rates generally reduce the volume of new mortgage originations and refinances.

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This impact is offset by higher persistency on our existing insured loans since the prevailing market interest rate is above the loan interest rate of the majority of our portfolio.

This trend continued into 2024, but future rate changes and the impact on our premium and NIW is difficult to predict.

Despite a trend of declining rates during the second half of 2025, future rate changes and the impact on our premium and NIW is difficult to predict.

Declining interest rates historically increase the rate at which borrowers refinance their existing mortgages, thereby resulting in cancellations of the mortgage insurance covering existing loans.

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In addition, interest rate fluctuations could also have an adverse effect on the results of our investment portfolio.

In the current period of elevated interest rates, the market value of our lower yielding instruments has declined, driving substantial unrealized losses in our portfolio.

While we intend to hold these securities until maturity so as to realize their book value, pressure to sell securities in an unrealized loss position could drive realized losses and impact future earnings.

In periods of elevated interest rates, the market value of lower yielding instruments declines, driving substantial unrealized losses in our portfolio.

While we intend to hold securities in an unrealized loss position until maturity so as to realize their book value, pressure to sell securities in an unrealized loss position could drive realized losses and impact future earnings.

This impact is partially offset by higher yields on new securities purchased.

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Despite this, our investment portfolio is subject to credit risks that could lead to realized losses.

As interest rates have risen, this has led to a significant increase in unrealized losses in our investment portfolio.

While we have the intent and ability to hold securities until maturity, changing conditions requiring the sale of these investments and recognition of losses may occur.

Rising interest rates can lead to a significant increase in unrealized losses in our investment portfolio.

While we have the intent and ability to hold securities until maturity, changing conditions could necessitate the sale of certain investments, triggering realized losses.

We report fixed maturity securities at fair value on our consolidated balance sheets.

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In recent years, the number of non-bank mortgage loan servicers has increased as the mortgage lending and servicing industries have come under increasing regulation and scrutiny.

Significant, sustained failures by large servicers or other disruptions in the servicing of mortgage loans may damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny and could have a material adverse effect on our business, results of operations and financial condition.

Inadequate staffing levels or significant transfers of business between servicers could lead to disruptions in the servicing of mortgage loans, which in turn may contribute to a rise in delinquencies and could have a material adverse effect on our business, results of operations and financial condition.

delinquency rates could also strain the resources of servicers, reducing their ability to undertake mitigation efforts that would help limit losses.

Significant, sustained failures by large servicers or other disruptions in the servicing of mortgage loans may damage our reputation, result in a loss of customer business, and subject us to additional regulatory scrutiny.

High delinquency rates could also strain the resources of servicers, reducing their ability to undertake mitigation efforts that would help limit losses.

Furthermore, we have delegated to the GSEs, which have in turn delegated to most of their servicers, the authority to accept modifications, short sales and deeds-in-lieu of foreclosure on loans we insure.

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In some cases, loss mitigation decisions favorable to the GSEs may not be favorable to us and may increase the incidence of paid claims.

Inappropriate delegation protocols or failure of servicers to service in accordance with the protocols may increase the magnitude of our losses and have an adverse effect on our business, results of operations and financial condition.

Inappropriate delegation protocols or failure of servicers to service in accordance with the protocols may increase the magnitude of our losses.

Our delegation of loss mitigation decisions to the GSEs is subject to cancellation, but exercise of our cancellation rights may have an adverse effect on our relationship with the GSEs and customers.

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• changes in government housing policy encouraging loans to FTHBs.

A decline in the volume of Low Down Payment Loan originations would reduce the demand for mortgage insurance and, therefore, could have a material adverse effect on our business, results of operations and financial condition.

The length of time insurance remains in-force is an important determinant of our mortgage insurance revenues.

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• changes in mortgage insurance cancellation requirements or procedures of the GSEs or under applicable law.

Changes in the methodology by which servicers determine the cancellation dates of mortgage insurance under HOPA, GSE requirements or otherwise, including as a result of changes in law or regulation, GSE rules or guidance, could have a material adverse effect on our business, results of operations and financial condition.

Our persistency rates on primary mortgage insurance were 82%, 83% and 85% for the years ended December 31, 2025, 2024 and 2023, respectively.

Elevated persistency in 2022 through 2024 was primarily a result of the higher interest rate environment in response to inflationary pressures.

A decrease in persistency generally would reduce the amount of our IIF and could have a material adverse effect on our business, results of operations and financial condition.

However, higher persistency on certain higher risk products could have a material adverse effect if claims generated by such products increase.

Elevated persistency since 2022 has primarily been a result of the higher interest rate environment in response to inflationary pressures.

A decrease in persistency generally would reduce the amount of our IIF and earned premium, while higher persistency on certain higher risk products could lead to increased claims generated by such products increase.

A decline in the volume of Low Down Payment Loan originations, changes in the methodology by which servicers determine the cancellation dates of mortgage insurance under HOPA, and changes in persistency could have a material adverse effect on our business, results of operations and financial condition.

We collect, process, store, share, disclose and use consumer information and other data, and an actual or perceived failure to protect such information and data or respect users’ privacy could damage our reputation and brand and adversely affect our business, results of operations and financial condition.

We retain confidential customer information, proprietary information and other data in our information systems, and our information systems may be vulnerable to cybersecurity incidents, such as attacks by malicious actors or breaches due to human error, malfeasance, or other cybersecurity incidents.

Such incidents could potentially result in the unauthorized access, disclosure, misappropriation, alteration, or deletion of information in our systems, including personally identifiable information and proprietary business information.

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Enact Re is subject to Bermudian law and is regulated by the BMA.

Failure to comply with applicable regulations or to obtain or maintain appropriate authorizations or exemptions

under any applicable laws could result in restrictions on our ability to conduct business or engage in activities regulated in one or more jurisdictions in which we operate and could subject us to fines, injunctions and other sanctions that could have a material adverse effect on our business, results of operations and financial condition.

In addition, the nature and extent of regulation could materially change, which may result in additional costs associated with compliance with any such changes, or changes to our operations, either of which may have a material adverse effect on our business.

Failure to comply with applicable regulations or to obtain or maintain appropriate authorizations or exemptions under any applicable laws could result in restrictions on our ability to conduct business or engage in activities regulated in one or more jurisdictions in which we operate and could subject us to fines, injunctions and other sanctions that could have a material adverse effect on our business, results of operations and financial condition.

In addition, the nature and extent of regulation could materially change, which may result in additional costs associated with compliance.

Insurance regulatory authorities have broad administrative powers, which include, but are not limited to:

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The insurance law provisions of many states also prohibit or restrict paying for the referral of insurance business and provide various mechanisms to enforce this prohibition.

In addition, the use of risk-based pricing systems by the private mortgage insurance industry that establish premium rates based on more attributes than previously considered may result in increased state and/or federal scrutiny of premium rates.

The increased use of algorithms, artificial intelligence and data and analytics in the industry may also lead to additional regulatory scrutiny related to other matters such as discrimination in pricing and underwriting, data privacy and access to insurance.

A substantial legal liability or a significant regulatory action against us could have a material adverse effect on our business, results of operations and financial condition.

The increased use of risk-based pricing systems, artificial intelligence and data and analytics in the industry may also lead to additional regulatory scrutiny related to other matters such as discrimination in pricing and underwriting, data privacy and access to insurance.

It is possible that we could become subject to future investigations, regulatory actions, lawsuits, or enforcement actions, which could cause us to incur legal costs and, if we were found to have violated any laws or regulations, require us to pay fines and damages, result in injunctions and incur other sanctions, perhaps in material amounts.

Increased regulatory scrutiny and any resulting investigations or legal proceedings could result in new legal precedents and industry-wide regulations or practices that could have a material adverse effect on our

reputation, business, results of operations and financial condition.

Increased regulatory scrutiny and any resulting investigations or legal proceedings could result in new legal precedents and industry-wide regulations or practices.

We cannot predict the ultimate outcomes of any future investigations, regulatory actions or legal proceedings.

Any of the changes outlined above could have a material adverse effect on our business, results of operations and financial condition.

Inability to maintain sufficient regulatory capital could result in restrictions or prohibitions on our doing business or impact our financial strength ratings, which could have a material adverse impact on our business, results of operations and financial condition.

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The statutory capital adequacy ratio for our U.S.

mortgage insurers is known as the RTC ratio, of which the numerator consists of RIF and the denominator consists of the sum of (i) statutory surplus and (ii) the statutory contingency reserve.

mortgage insurers is known as the RTC ratio, of which the numerator consists of adjusted RIF and the denominator consists of the sum of

(i) statutory surplus and (ii) the statutory contingency reserve.

In addition, PMIERs include financial requirements for mortgage insurers to do business with the GSEs 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).

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However, there can be no assurance if, and on what terms, such forbearance and approvals may be obtained.

Enact Re could suffer similar restrictions if it breaches Bermudian capital requirements.

Further, the financial strength ratings of our insurance subsidiaries are significantly influenced by their statutory surplus amounts, statutory contingency reserve amounts (if applicable) and capital adequacy ratios.

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• changes to the maximum permissible RTC ratio.

An adverse change in our RTC ratio or our ability to meet other minimum regulatory requirements could cause rating agencies to downgrade our financial strength ratings, which could have an adverse

impact on our ability to write and retain business and could cause regulators to take regulatory or supervisory actions with respect to our business, all of which could have a material adverse effect on our results of operations, financial condition and business.

An adverse change in our RTC ratio or our ability to meet other minimum regulatory requirements could cause rating agencies to downgrade our financial strength ratings, which could have an adverse impact on our ability to write and retain business and could cause regulators to take regulatory or supervisory actions with respect to our business, all of which could have a material adverse effect on our results of operations, financial condition and business.

For further discussion on the importance of ratings, see “—Adverse rating agency actions may result in a loss of business and adversely affect our business, results of operations and financial condition.”

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Any proposed or future legislation or NAIC initiatives, if adopted, may be more restrictive on our ability to conduct business than current regulatory requirements or may result in higher costs or increased statutory capital and reserve requirements.

Further, because laws and regulations can be complex and sometimes inexact, there is also a risk that any particular regulator’s or enforcement authority’s interpretation of a legal, accounting or reserving issue may change over time to our detriment or expose us to different or additional regulatory risks.

Further, because laws and regulations can be complex and sometimes inexact, there is also a risk that any particular regulator’s or enforcement

authority’s interpretation of a legal, accounting or reserving issue may change over time to our detriment or expose us to different or additional regulatory risks.

The application of these regulations and guidelines by insurers involves interpretations and judgments that may differ from those of state insurance departments.

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The Enterprise Capital Framework significantly increases capital requirements and reduces capital credit on CRT transactions as compared to the previous framework.

The final rule could cause the GSEs

to increase their guarantee pricing in order to meet the new capital requirements.

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

If the GSEs increase their guarantee pricing in order to meet the higher capital requirements, that increase could have a negative impact on the private mortgage insurance market and our business.

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This rule could also accelerate the diversification of the GSEs’ risk transfer programs to encompass a broader array of instruments beyond private mortgage insurance, which could adversely impact our business.

As a credit enhancement provider in the residential mortgage lending industry, we are also subject to compliance with or otherwise impacted by various federal and state consumer protection and insurance laws, including RESPA, the Fair Housing Act of 1968 (the “Fair Housing Act”), HOPA, FCRA and others.

laws, including RESPA, the Fair Housing Act of 1968 (the “Fair Housing Act”), HOPA, FCRA and others.

Changes in these laws or regulations, changes in the appropriate regulator’s interpretation of these laws or regulations or heightened enforcement activity could materially adversely affect our business, results of operations and financial condition.

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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.

federal banking regulators are currently in the review process, and with the change in Administration on January 20, 2025, the outcome, content and timing of the final rule are unclear.

As originally proposed, the rule would have eliminated the 50% risk‑based capital benefit for high‑LTV portfolio mortgages with private mortgage insurance for banking organizations with $100 billion or more in total assets, which, if adopted, could reduce demand for mortgage insurance.

Since the Basel III Endgame proposal was issued, U.S.

banking regulators have since withdrawn that proposal and indicated that the standard will be re-proposed with significant revisions.

As a result, the timing, substance, and ultimate impact of the Basel III Endgame on financial institutions, and the mortgage insurance market, remains uncertain.

Risks Relating to Our Continuing Relationship with Genworth

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the sale of all or substantially all of our assets and other decisions affecting our capital structure;

the amendment of our amended and restated certificate of incorporation and our amended and restated bylaws;

the amendment of our amended and restated certificate of incorporation

and our amended and restated bylaws;

and our winding up and dissolution.

This concentration of ownership may delay, deter or prevent acts that would be favored by our other stockholders, including a change in control of us.

The interests of Genworth may not always coincide with our interests or those of our other stockholders.

This concentration of ownership may delay, deter or prevent acts that would be favored by our other stockholders, including a change in control of the Company.

Also, Genworth may seek to cause us to take courses of action that, in its judgment, could enhance its investment in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders.

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Certain of these directors may be officers or employees of Genworth or its other subsidiaries.

Because of their current or former positions with Genworth or its other subsidiaries, these directors, as well as a number of our officers, own amounts of Genworth’s common stock and options to purchase Genworth’s common stock.

Ownership interests of our directors or officers in Genworth’s common stock, or service of certain of our directors as officers of Genworth or certain of Genworth’s other subsidiaries, may create, or may create the appearance of, conflicts of interest when such director or officer is faced with a decision that could have different implications for the two companies.

Because of their current or former positions with Genworth or its other subsidiaries, these directors own amounts of Genworth’s common stock and options to purchase Genworth’s common stock.

Ownership interests of our directors or officers in Genworth’s common stock, or service of certain of our directors as officers of Genworth or certain of Genworth’s other subsidiaries, may generate, or create the appearance of, conflicts of interest when such director or officer is faced with a decision that could have different implications for the two companies.

In addition, we have entered into agreements with Genworth and its subsidiaries that provide a framework for our ongoing relationship, including a Master Agreement, a registration rights agreement, a Shared Services Agreement, an intellectual property cross license agreement and a transitional trademark license agreement.

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Interruptions to or problems with services provided under the Shared Services Agreement could result in conflicts between us and Genworth or its other subsidiaries that increase our costs both for the processing of business and the potential remediation of disputes.

Although we believe these agreements contain commercially reasonable terms, the terms of these agreements may prove not to be in the best interests of our future stockholders or may contain terms less favorable than those we could obtain from third parties.

In addition, certain of our officers negotiating these agreements may appear to have conflicts of interest as a result of their ownership of Genworth’s common stock and holdings of Genworth’s equity awards.

Although we believe these agreements contain commercially reasonable terms, the terms of these agreements may prove not to be in the best interests of our future stockholders.

The terms of our arrangements with Genworth may be more favorable than we will be able to obtain from an unaffiliated third party.

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Our Shared Services Agreement with Genworth provides us continued access to certain of these services.

We negotiated these arrangements with Genworth or certain of Genworth’s other

subsidiaries in the context of a parent-subsidiary relationship.

We negotiated these arrangements with Genworth or certain of Genworth’s other subsidiaries in the context of a parent-subsidiary relationship.

We cannot ensure that these services will be sustained at the same levels or that we would be able to replace such services in a timely manner or on comparable terms.

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Other agreements with Genworth or certain of Genworth’s other subsidiaries also govern the relationship between us and Genworth or certain of Genworth’s other subsidiaries and provide for the allocation of certain expenses.

They also contain terms and provisions that may be more favorable than terms and provisions we might have obtained in arm’s length negotiations with unaffiliated third parties.

They also contain terms and provisions that may be more favorable than terms and provisions we might have obtained in arm’s length negotiations with unaffiliated

third parties.

These operational risks could have a material adverse effect on our business, results of operations and financial condition.

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Genworth depends on us as a source of liquidity and to create value for its shareholders.

Genworth’s strategy includes maintaining the self-sustainability of its legacy United States life insurance companies and advancing its aging care growth initiatives.

Genworth’s strategy includes advancing its aging care growth initiatives and maintaining the self-sustainability of its legacy insurance companies.

While Genworth has improved its financial position and made significant progress on its strategic priorities in recent years, it cannot be sure it will be able to successfully execute on its strategic growth initiatives and plans to effectively address its business challenges.

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Any of these events could adversely affect our business, results of operations and financial condition.

Genworth’s challenges in its long-term care insurance business, or other financial or operational difficulties, may also be attributed to us by investors and may have an adverse effect on the perception of our common stock as an investment.

Genworth’s strategic challenges, or other financial or operational difficulties, may also be attributed to us by investors and may have an adverse effect on the perception of our common stock as an investment.

Additionally, any downgrade or negative outlook of Genworth’s ratings may negatively impact our ratings by certain ratings agencies whose rating protocols and group rating methodologies require adverse ratings actions in cases of parent or sister company rating downgrades or adverse rating actions.

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If Genworth is unable to raise sufficient proceeds to satisfy its obligations as they come due, or Genworth were to default on its outstanding indebtedness, or Genworth were to become subject to insolvency or other similar proceedings, we would not expect such events to result directly in an event of default or an insolvency event for us.

However, any such event or the risk (or perceived risk) that any such proceedings could involve us, could negatively affect our ratings, our reputation, our business, our liquidity and results of operations, and could therefore have a negative effect on our ability to repay our own indebtedness, including the $750 million aggregate principal amount Senior Notes due 2029 (the “2029 Notes”), or otherwise could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects.

Genworth’s continued ownership of at least 80% of our common stock may limit our ability to raise additional capital by issuing common stock to third parties.

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As a condition to us remaining a member of the Genworth Consolidated Group, Genworth generally must continue to possess at least 80% of the total voting power and total value of our stock.

For these purposes, the term “stock” does not include any stock that (i) is not entitled to vote;

(ii) is limited and preferred as to dividends and does not participate in corporate growth to any significant extent;

(iii) has redemption and liquidation rights which do not exceed the issue price of such stock (except for a reasonable redemption or liquidation premium) and (iv) is not convertible into another class of stock.

Accordingly, while we will have the ability to raise additional capital through certain preferred stock or other means, we will be limited in our ability to raise additional capital by issuing common stock to third parties without leaving Genworth’s consolidated group, which Genworth may not permit.

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The ultimate tax outcome may materially differ from the tax amounts recorded in our consolidated financial statements and may materially affect our income tax provision, net income (loss), cash flows or operations.

There was no U.S.

federal income tax-related legislation or administrative guidance issued in 2024 that had a significant impact on our results of operations or financial condition.

Effective January 1, 2023, the U.S.

federal government enacted the Inflation Reduction Act which, among other things, implemented a 15% corporate alternative minimum tax (“CAMT”) based on adjusted financial statement income and imposed a 1% excise tax on corporate stock repurchases.

The enactment of the CAMT did not have a material impact on our financial statements for the year ended December 31, 2024 or 2023.

Excise tax incurred on our share repurchases is recorded as part of the cost basis of the treasury stock acquired and

not reported as part of income tax expense, and it did not have a material impact on our financial position for the years ended December 31, 2024 and 2023.

On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023 ("CIT").

Starting January 1, 2025, the CIT imposed a new 15% corporate income tax on in-scope entities that are resident in Bermuda or that have a Bermuda permanent establishment, without regard to any assurances that had previously been given pursuant to the Exempted Undertakings Tax Protection Act 1966.

Because Enact Re is subject to U.S.

federal income tax on its income we do not anticipate this will have a material impact on the Company’s financial position or results of operations.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), which includes certain tax provisions, was signed into law.

Effective January 1, 2025, the Bermuda Corporate Income Tax Act of 2023 (“CIT”) imposed a new 15% corporate income tax on in-scope entities that are resident in Bermuda or have a Bermuda permanent establishment, without regard to any assurances that had previously been given pursuant to the Exempted Undertakings Tax Protection Act 1966.

The OBBBA tax enactment did not have a material impact on our financial position or results of operations for the year ended December 31, 2025 and neither did the Bermuda CIT, given that Enact Re is subject to U.S.

federal income tax on its income.

There was no other U.S.

federal income tax-related legislation or administrative guidance issued in 2025 or 2024 that had a significant impact on our results of operations or financial condition.

We are jointly and severally liable for any U.S.

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See “—Genworth’s continued ownership of at least 80% of our common stock may limit our ability to raise additional capital by issuing common stock to third parties”.

In the event we were to cease being a member of the Genworth Consolidated Group, we and Genworth would be subject to the application of the “unified loss rules,” which may require us to pay more income tax in the future.

In the event we were to cease being a member of the Genworth Consolidated Group, we and Genworth would be subject to the application of the “unified loss rules,” which may require us to pay more

income tax in the future.

Subject to certain exceptions, if Genworth has higher tax basis in our shares than the fair market value of our shares at the time we left the Genworth Consolidated Group, these rules could require us to reduce certain of our tax attributes, including the tax basis in our assets.

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Our primary subsidiaries are insurance companies that own a large majority of our assets and conduct substantially all of our operations.

Dividends from our subsidiaries and permitted payments to us under arrangements with our

subsidiaries are our principal sources of cash to meet our obligations.

Dividends or other permitted payments from our subsidiaries are our principal sources of cash to meet our obligations.

These obligations include operating expenses and interest and principal on current and any future borrowings.

Our subsidiaries may not be able to, or may not be permitted by regulators to, pay dividends or make distributions to enable us to meet our obligations.

Each subsidiary is a distinct legal entity, which may be subject to legal and contractual restrictions that may also limit our ability to obtain cash from our subsidiaries.

Each subsidiary is a distinct legal entity, which may be subject to legal, regulatory and contractual restrictions that may also limit our ability to obtain cash from our subsidiaries.

If the cash we receive from our subsidiaries pursuant to dividends and other arrangements is insufficient to fund any of these obligations, or if a subsidiary is unable or unwilling to pay future dividends or distributions to us to meet our obligations, we may be required to raise cash through, among other things, incurring debt (including convertible or exchangeable debt), selling assets or issuing equity.

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In general, dividends and distributions are required to be submitted to an insurer’s domiciliary department of insurance for review.

In addition, insurance regulators may prohibit the payment of dividends and distributions, or other payments by the insurance subsidiaries (such as a payment under an agreement or for employee or other services, including expense reimbursements) if they determine that such payment could be adverse to policyholders.

Insurance regulators may prohibit the payment of dividends and distributions, or other payments by the insurance subsidiaries (such as a payment under an agreement or for employee or other services, including expense reimbursements) if they determine that such payment could be adverse to policyholders.

Accordingly, there can be no assurances that insurance regulators will approve payment of a dividend or distribution or other transfers of assets to us by our insurance subsidiaries.

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Our business could be adversely impacted from deficiencies in our disclosure controls and procedures or internal control over financial reporting.

The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations.

While management continually reviews the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in fully accomplishing our control objectives.

Additionally, in order to comply with new accounting guidance or disclosure requirements from our regulators, we are required to interpret the rules, develop new processes and potentially generate new data, which could expose us to incremental risk.

Any material weaknesses in internal control over financial reporting or any other failure to maintain effective disclosure controls and procedures could result in material errors or restatements in our historical financial statements or untimely filings, which could cause investors to lose confidence in our reported financial information, and a decline in our share price.

The design and effectiveness of our disclosure controls and procedures or internal control over financial reporting may not prevent all errors, misstatements or misrepresentations.

While management continually reviews the effectiveness of internal controls, there can be no guarantee that we will be effective in fully accomplishing our control objectives.

Additionally, in order to comply with new accounting guidance or disclosure requirements from our regulators, we are required to interpret the rules, develop

new processes and potentially generate new data, which could expose us to incremental risk.

Any material weaknesses in internal control over financial reporting or failure to maintain effective disclosure controls and procedures could result in material errors or restatements in our historical financial statements or untimely filings, which could cause investors to lose confidence in our reported financial information, and a decline in our share price.

We may suffer losses in connection with litigation, regulatory proceedings or other actions.

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We face intense competition in our industry and local job market for key employees with demonstrated ability, including actuarial, finance, legal, investment, risk, compliance, information technology and other professionals.

We cannot be sure we will be able to on-board, attract, retain and motivate the desired workforce, and our failure to do so could have a material adverse effect on business, results of operations and financial condition.

The inability to on-board, attract, retain and motivate the desired workforce, could result in failure to meet our business goals.

In addition, we may not be able to meet regulatory requirements relating to required expertise in various professional positions.

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We also have arrangements in place with our customers and other third-party service providers through which we share and receive information.

Despite the implementation of security controls and back-up measures, our computer systems and those of our customers and third-party service providers have been and may be in the future vulnerable to system failures, physical or electronic intrusions, computer malware or other attacks, programming errors and similar disruptive problems.

The failure of these systems for any reason could cause significant interruptions to our operations, which could result in a material adverse effect on our business, results of operations and financial condition.

Despite the implementation of security controls and back-up measures, our computer systems and those of our customers and third-party service providers have been and may in the future be vulnerable to system failures, physical or electronic intrusions, computer malware or other attacks, programming errors and similar disruptive problems.

The failure of these systems for any reason could cause significant interruptions to our operations.

While it is our goal to safeguard information assets from physical theft and cybersecurity threats, there can be no assurance that our information security will detect and protect information assets from ever-increasing risks.

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Further, cybersecurity threats have continued to grow in sophistication, in part through the deployment of artificial intelligence technologies.

Although we have implemented controls and continue to train our employees, a

cybersecurity event could still occur that would cause damage to our reputation with our customers and other stakeholders and could have a material adverse effect on our business, results of operations and financial condition.

Although we have implemented controls and continue to train our employees, a cybersecurity event could still occur that would cause damage to our reputation with our customers and other stakeholders.

We rely on technologies to provide services to our customers.

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In addition, if our information technology systems are inferior to our competitors’, existing and potential customers may choose our competitors’ products over ours.

Our business would be negatively impacted if we are unable to enhance our platform when necessary to support our primary business functions, including to match or exceed the technological capabilities of our competitors.

We cannot predict with certainty the cost of maintaining and improving our platform, but failure to make necessary improvements and any significant shortfall in technology enhancements or negative variance in the timeline in which system enhancements are delivered could have an adverse effect on our business, results of operations and financial condition.

In addition, a natural or man-made disaster or a pandemic could disrupt public and private infrastructure, including our information technology systems.

See “—The occurrence of natural or man-made disasters or public health emergencies, including pandemics and disasters caused or exacerbated by climate change, could materially adversely affect our business, results of operations and financial condition.” Unanticipated problems with, or failures of, our disaster recovery systems and business continuity plans could have a material adverse impact on our ability to conduct business and on our results of operations and financial condition.

See “—The occurrence of natural or man-made disasters or public health emergencies, including pandemics and disasters caused or exacerbated by climate change, could materially adversely affect our business, results of operations and financial condition.” This could also lead to unanticipated problems with, or failures of, our disaster recovery systems and business continuity.

Any of the above factors could have a material adverse impact on our ability to conduct business and on our results of operations and financial condition.

Risks related to emerging and changing technology, including artificial intelligence, could impact our results of operations or financial condition.

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These may include new applications or insurance-related services based on artificial intelligence, machine learning, robotic process automation, blockchain or new approaches to data mining.

In particular, generative artificial intelligence is accelerating the speed at which companies are implementing new technology and process changes.

We may be exposed to competitive risks related to the adoption and application of new technologies by established market participants or new entrants.

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Investments in technology systems and data analytics capabilities may not deliver the benefits or perform as expected or may be replaced or become obsolete more quickly than expected, which could result in operational difficulties or additional costs.

If we cannot offer new technologies or data analytics solutions as quickly as our competitors, or if our competitors develop more cost-effective technologies, data analytics solutions or other product offerings, we could experience a material adverse effect on our operating results, customer relationships, growth and compliance programs.

If we cannot offer new technologies or data analytics solutions as quickly as our competitors, or if

our competitors develop more cost-effective technologies, data analytics solutions or other product offerings, we could experience a material adverse effect on our operating results, customer relationships, growth and compliance programs.

Poor implementation of new technologies, including artificial intelligence, by us or our third-party service providers, could subject us to additional risks we do not understand or cannot adequately mitigate, which could have an impact on our results of operations and financial condition.

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The frequency and severity of extreme weather events and natural disasters may be increased by the effects of climate change.

While mortgage insurance does not cover property damage, a natural or man-made

disaster or public health emergency could disrupt our computer systems and our ability to conduct or process business (including as a result of widespread absences of our employees) as well as lead to higher delinquency rates as borrowers who are affected by the disaster may be unable to meet their contractual obligations, such as mortgage payments on loans insured under our mortgage insurance coverage.

While mortgage insurance does not cover property damage, a natural or man-made disaster or public health emergency could disrupt our computer systems and our ability to conduct or process business (including as a result of widespread absences of our employees) as well as lead to higher delinquency rates as borrowers who are affected by the disaster may be unable to meet their contractual obligations, such as mortgage payments on loans insured under our mortgage insurance coverage.

The consequences of these events and actions taken by governmental authorities, the GSEs, our customers or others in connection therewith could lead to disruption of the economy, which may erode consumer and investor confidence levels or lead to increased volatility in the financial and housing markets.

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A natural or man-made disaster or a public health emergency could also disrupt public and private infrastructure, including communications and financial services, any of which could disrupt our normal business operations, and could adversely affect the value of the assets in our investment portfolio if it affects companies’ ability to pay principal or interest on their securities or the value of the underlying collateral of structured securities.

Natural or man-made disasters or pandemics or public health emergencies could also disrupt the operations of our counterparties and third-party suppliers or result in increased prices for the products and services they provide to us, which could lead to increased reinsurance rates, less favorable terms and conditions and reduced availability of reinsurance.

This could also lead to increased reinsurance rates, less favorable terms and conditions and reduced availability of reinsurance.

Our amended and restated certificate of incorporation contains exclusive forum provisions, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) owed by any of our current or former directors, officers, stockholders, employees or agents to us or our stockholders, (iii) any action asserting a claim against us or any of our current or former directors, officers, stockholders, employees or agents arising out of or relating to any provision of the Delaware General Corporation Law (“DGCL”) or our amended and restated certificate of incorporation or our amended and restated bylaws (each, as in effect from time to time), or (iv) any action asserting a claim against us or any of our current or former directors, officers, stockholders, employees or agents governed by the internal affairs doctrine of the State of Delaware;

provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for most actions relating to the Company, our current or former directors, officers, stockholders, employees or agents to us or our stockholders.

Unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”).

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This exclusive-forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees.

If a court were to find the exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur

additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations.

If a court were to find the exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations.

No assurance can be given that we will be able to return capital to our shareholders via dividends or share repurchases in the future at current levels or at all.

In 2022, we announced the initiation of a quarterly dividend for our common shareholders as well as the first of our Stock Repurchase Plans that allow for repurchases of our common stock.

Our ability to return capital to our shareholders is dependent on our business results and the macroeconomic environment and may be materially and adversely affected by the risk factors discussed herein.

We typically return capital to shareholders through our quarterly dividend and repurchases of our common stock.

This ability to return capital to our shareholders is dependent on our business results and the macroeconomic environment and may be materially and adversely affected by the risk factors discussed herein.

Although we anticipate continuing to pay quarterly dividends and repurchase common stock, future dividend payments and share repurchase authorizations are subject to review and approval by our Board of Directors after considering, among other factors, economic and regulatory constraints, current risks to the Company, and subsidiary performance.

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See “—Genworth’s continued ownership of at least 80% of our common stock may limit our ability to raise additional capital by issuing common stock to third parties.”

As a result, no assurance can be given that we will be able to continue to pay dividends to our shareholders, repurchase our common stock, or return capital through other means, in the future or that the level of any future return of capital will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our common stock.

As a result, no assurance can be given that we will be able to continue to return capital to our shareholders in the future or that the level of any future return of capital will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our common stock.

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 1A. Risk Factors