What changed in this filing

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Item 1. Business

2025-02-28 compared with 2024-02-28 · 440 added, 579 removed, 866 unchanged (54% of the section changed)

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If an obligor defaults on a scheduled payment due on an obligation, including a scheduled principal or interest payment (collectively, debt service), the Company is required under its unconditional and irrevocable financial guaranty to pay the amount of the shortfall to the holder of the obligation.

Until July 1, 2023, the Company served as an investment advisor to primarily collateralized loan obligations (CLOs) and opportunity funds through Assured Investment Management LLC (AssuredIM LLC) and its investment management affiliates (together with AssuredIM LLC, AssuredIM).

Beginning July 1, 2023, the Company participates in the asset management business through its ownership interest in Sound Point Capital Management, LP (Sound Point, LP) and certain of its investment management affiliates (together with Sound Point, LP, Sound Point), as described in greater detail under Item 1.

The Company markets

its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities as well as to investors in such obligations.

The Company guarantees obligations issued principally in the U.S.

and the United Kingdom (U.K.), and also guarantees obligations issued in other countries and regions, including Western Europe.

The Company also provides specialty insurance and reinsurance on transactions with risk profiles similar to those of its structured finance exposures written in financial guaranty form.

The Company participates in the asset management business through its ownership interest in Sound Point Capital Management, LP (Sound Point, LP) and certain of its investment management affiliates (together with Sound Point, LP, Sound Point), as described in greater detail under Item 1.

Business — Asset Management — Strategic Transactions.

On July 1, 2023, Assured Guaranty contributed to Sound Point, LP most of its asset management business, other than that conducted by Assured Healthcare Partners LLC (AssuredIM Contributed Business), as contemplated by the transaction agreement entered into with Sound Point on April 5, 2023 (Transaction Agreement).

As a result, Sound Point now manages CLOs consisting of $35.2 billion in assets under management (AUM) as of December 31, 2023, making Sound Point the fifth largest CLO manager globally by AUM (based on December 31, 2023 CreditFlux CLO manager rankings).

Assured Guaranty received, subject to certain potential post-closing adjustments, approximately 30% of the common interests in Sound Point, LP, and certain other interests in Sound Point.

In July 2023, Assured Guaranty also sold all of its equity interests in AHP, which manages healthcare funds, to an entity owned and controlled by the managing partner of AHP (AHP Transaction).

In connection with the AHP Transaction, the Company agreed to remain a strategic investor in certain AHP managed funds, is retaining its portion of carried interest in certain AHP managed funds and received other consideration.

The Company continually evaluates its key business strategies, which fall into three areas:

(1) insurance;

(2) asset management and alternative investments;

and (3) capital management.

The Company seeks to grow the insurance business through new business production, acquisitions of financial guaranty insurance companies that currently are in runoff and no longer actively writing new business (legacy financial guarantors) or reinsurance of their portfolios, and to continue to mitigate losses in its insured portfolio.

The Company’s ownership interest in Sound Point furthers its strategy of participating in a fee-based earnings stream independent of the risk-based premiums generated by its financial guaranty business.

The Company continually evaluates its key business strategies, which fall into four areas:

(i) insurance;

(ii) asset management, (iii) alternative investments;

and (iv) capital management.

The Company seeks to grow the insurance business through new business production in established sectors and jurisdictions and by entering into new markets and classes of business, and also through acquisitions of financial guaranty insurance companies that currently are in runoff and no longer actively writing new business (legacy financial guarantors) or reinsurance of their portfolios.

The Company also furthers its insurance strategy by mitigating losses in its insured portfolio.

The Company’s ownership interest in Sound Point advances its strategy of participating in a fee-based earnings stream independent of the risk-based premiums generated by its financial guaranty business.

The Company also expects its relationship with Sound Point to enhance its alternative investment opportunities.

Finally, the Company pursues strategies to manage capital within the Assured Guaranty group more efficiently.

Insurance Companies

The Company primarily conducts financial guaranty business on a direct basis from the following companies:

Assured Guaranty Municipal Corp.

(AGM), Assured Guaranty Corp.

(AGC), Assured Guaranty UK Limited (AGUK, formerly known as Assured Guaranty (Europe) plc) and, most recently, Assured Guaranty (Europe) SA (AGE).

It also conducts insurance business through its Bermuda-based reinsurers Assured Guaranty Re Ltd.

(AG Re) and Assured Guaranty Re Overseas Ltd.

The following is a description of the Company’s principal insurance operating subsidiaries:

• Assured Guaranty Municipal Corp .

AGM is located and domiciled in New York, and was organized in 1984 as “Financial Security Assurance Inc.” It provides financial guaranty insurance and reinsurance on debt obligations issued in the U.S.

public finance and infrastructure markets, including bonds issued by U.S.

state or governmental authorities or notes issued to finance infrastructure projects.

• Assured Guaranty Corp.

AGC is located in New York and domiciled in Maryland, was organized in 1985 and commenced operations in 1988.

It provides insurance and reinsurance principally on debt obligations in the U.S and non-U.S.

structured finance market and also offers guaranties on obligations in the U.S.

public finance and infrastructure markets.

• Assured Guaranty UK Limited and Assured Guaranty (Europe) SA.

AGUK and AGE (the European Insurance Subsidiaries) offer financial guaranties in the non-U.S.

public finance, infrastructure and structured finance markets.

AGUK is a United Kingdom (U.K.) incorporated private limited company licensed as a U.K.

insurance company and located in England that writes new business in the U.K.

and certain other countries that are not part of the European Economic Area (EEA).

AGUK was organized in 1990 and issued its first financial guaranty in 1994.

AGE is a French incorporated company located in France and established in 2019 that has been authorized by the French insurance and banking supervisory authority, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), to conduct financial guaranty business.

AGE writes new business in the EEA.

• Assured Guaranty Re Ltd.

and Assured Guaranty Re Overseas Ltd.

AG Re and AGRO underwrite financial guaranty reinsurance, and AGRO also underwrites direct financial guaranty business and specialty business that is in line with the Company’s risk profile.

AG Re and AGRO write business as reinsurers of third-party primary insurers and of certain affiliated companies.

AG Re is incorporated under the laws of Bermuda and is licensed as a Class 3B insurer under the Insurance Act 1978 and related regulations of Bermuda.

AG Re indirectly owns AGRO, which is a Bermuda Class 3A and Class C insurer.

Support of the European Insurance Subsidiaries

AGM and AGC (the U.S.

Insurance Subsidiaries) provide support to the European Insurance Subsidiaries through reinsurance and other agreements.

Support of AGUK

AGM and AGUK implemented in 2011 a co-guarantee structure pursuant to which:

(i) AGUK directly guarantees a specified portion of the public finance obligations issued in a particular transaction rather than guaranteeing 100% of the issued obligations;

(ii) AGM directly guarantees the balance of the guaranteed public finance obligations;

and (iii) AGM also provides a second-to-pay guarantee for AGUK’s portion of the guaranteed public finance obligations (Public Finance Co-Guarantee Structure).

The co-guarantee split for public finance business, which has been in effect since October 2018, is 15% AGUK and 85% AGM.

Effective July 1, 2021, AGC and AGUK implemented a co-guarantee structure for non-public finance business that, other than the covered business, is identical to the AGM/AGUK Public Finance Co-Guarantee Structure (Non-Public Finance Co-Guarantee Structure).

The co-guarantee split for non-public finance business is 15% AGUK and 85% AGC.

Separate and apart from the Public Finance Co-Guarantee Structure and the Non-Public Finance Co-Guarantee Structure, AGM provides support to AGUK through a quota share and excess of loss reinsurance agreement (Reinsurance Agreement) and a net worth maintenance agreement (Net Worth Agreement).

Under the quota share cover of the Reinsurance Agreement, AGM reinsures approximately 95-99% of AGUK’s retention (after cessions to other reinsurers) of most of the outstanding financial guaranties that AGUK wrote prior to the implementation of the Public Finance Co-Guarantee Structure in 2011.

The quota share cover of the Reinsurance Agreement also obligates AGM to reinsure 85% of municipal, utility, project finance or infrastructure risks or similar business that AGUK writes from and after October 2018 without utilizing the co-guarantee structure.

Currently, there is no such outstanding business at AGUK.

AGM secures its quota share reinsurance obligations to AGUK under the Reinsurance Agreement by posting collateral in trust equal to 102% of the sum of AGM’s assumed share of the following in respect of the reinsured AGUK policies:

(i) AGUK’s unearned premium reserve (net of AGUK’s reinsurance premium payable to AGM);

(ii) AGUK’s provisions for unpaid losses and allocated loss adjustment expenses (LAE) (net of any salvage recoverable);

and (iii) any unexpired risk provisions of AGUK, in each case (i) - (iii) as calculated by AGUK in accordance with generally accepted accounting practice in the U.K.

Under the excess of loss cover of the Reinsurance Agreement, AGM is obligated to pay AGUK quarterly the amount (if any) by which (i) the sum of:

(a) AGUK’s incurred losses, calculated in accordance with UK GAAP as reported by AGUK in its financial returns filed with the Prudential Regulation Authority (PRA);

and (b) AGUK’s paid losses and LAE, in both cases net of all other performing reinsurance (including the reinsurance provided by AGM under the quota share cover of the Reinsurance Agreement), exceeds (ii) an amount equal to:

(a) AGUK’s capital resources under U.K.

minus (b) 110% of the greatest of the amounts as may be required by the PRA as a condition for maintaining AGUK’s authorization to carry on a financial guarantee business in the U.K.

The purpose of this excess of loss cover is to ensure that AGUK maintains capital resources equal to at least 110% of the most stringent amount of capital that it may be required to maintain as a condition to carrying on a financial guarantee business in the U.K.

AGUK may terminate the Reinsurance Agreement (i.e., both its quota share and excess of loss covers) upon the occurrence of any of the following events:

(i) AGM’s rating by Moody’s Investors Service, Inc.

(Moody’s) falls below “Aa3” or its rating by S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (S&P), falls below “AA-” (and AGM fails to restore such rating(s) within a prescribed period of time);

(ii) AGM’s insolvency, failure to maintain the minimum capital required under the laws of AGM’s domiciliary jurisdiction, filing a petition in bankruptcy, going into liquidation or rehabilitation, or having a receiver appointed;

or (iii) AGM’s failure to maintain its required collateral described above.

Under the Net Worth Agreement, AGM is obligated to make capital contributions to AGUK in amounts sufficient to ensure that AGUK maintains capital resources equal to 110% of the greatest of the amounts as may be required by the PRA as a condition of AGUK maintaining its authorization to carry on a financial guarantee business in the U.K., provided that such contributions:

(i) do not exceed 35% of AGM’s policyholders’ surplus as determined by the laws of the State of New York;

and (ii) are in compliance with a provision of the New York Insurance Law requiring notice to, or approval by, the New York State Department of Financial Services (the NYDFS) for transactions between affiliates that exceed certain thresholds.

The Net Worth Agreement obligates AGM to provide AGUK with support similar to that which AGM also provides AGUK under the excess of loss cover of the Reinsurance Agreement, except the latter is meant to protect against erosion of AGUK’s capital resources due to insurance and/or reinsurance losses in AGUK’s insured portfolio, while the former is meant to protect against an erosion of AGUK’s capital resources for other reasons (e.g., poor investment performance or origination expenses exceeding premium).

Given this purpose, the Net Worth Agreement clarifies that any amounts due thereunder must take into account all amounts paid, or reasonably expected to be paid, under the Reinsurance Agreement.

The Net Worth Agreement also includes termination provisions substantially similar to those in the Reinsurance Agreement.

AGM has never been required to make any contributions to AGUK’s capital under the current Net Worth Agreement.

Support of AGE

AGE has in place similar reinsurance and capital support agreements as are in place with AGUK.

AGM’s agreements with AGE generally apply to all AGE policies that insure public finance business in EEA jurisdictions.

The agreements consist of:

(i) a quota share reinsurance agreement between AGE and AGM pursuant to which AGM provides the same reinsurance to AGE in respect of business that was transferred to AGE by AGUK effective October 1, 2020 pursuant to Part VII of the Financial Services and Markets Act 2000 (FSMA) (Part VII Transfer) as AGM provided to AGUK prior to such transfer (AGE also has similar agreements in effect with its affiliates, AGC and AG Re);

(ii) a second quota share reinsurance agreement whereby AGM provides AGE with 90% proportional reinsurance for:

certain business transferred to AGE pursuant to the Part VII Transfer that was not reinsured by AGM when such business was part of AGUK's insured portfolio;

certain business originally written by AGUK pursuant to the co-insurance arrangement described above, but which was novated to, and 100% guaranteed by, AGE in connection with the Part VII Transfer;

any new public finance business written by AGE;

(iii) an excess of loss reinsurance agreement, similar to the excess of loss cover of AGM’s Reinsurance Agreement with AGUK, pursuant to which AGM is obligated, effectively, to ensure that AGE maintains capital resources equal to at least 110% of the most stringent amount of capital that AGE may be required to maintain as a condition of it maintaining its authorization to carry on a financial guarantee business in France.

Effective July 1, 2021, AGC and AGE entered into a Non-Public Finance Business Reinsurance Agreement pursuant to which AGC provides AGE with 90% proportional reinsurance for any non-public finance business written by AGE.

AGM and AGC secure their quota share reinsurance obligations to AGE under the agreements described above by depositing collateral in accounts maintained by an EEA financial institution and pledging such accounts to AGE under French law.

The measure of AGM’s and AGC’s required collateral for AGE is generally the same as the measure of AGM’s required collateral for AGUK, except that the former is determined in accordance with French (versus U.K.) GAAP.

AGM also has in place with AGE a net worth maintenance agreement that is similar to AGM’s Net Worth Agreement with AGUK - i.e., the former obligates AGM to ensure that AGE maintains capital resources at least equal to 110% of its most stringent capital requirement for maintaining its authorization to carry on a financial guarantee business in France.

Other Group Support of the European Insurance Subsidiaries for Certain Legacy Business

AGC and AG Re also provide reinsurance support to the European Insurance Subsidiaries for certain legacy business that was insured prior to 2009 by AGUK.

Some of this business continues to reside at AGUK, while some of it was transferred to AGE in October 2020 pursuant to the Part VII Transfer.

AG Re does not currently provide direct reinsurance support for new business being written by AGUK or AGE.

AGC and AG Re secure their reinsurance of this legacy business in essentially the same manner as AGM secures its reinsurance of the European Insurance Subsidiaries - i.e., AGC and AG Re pledge collateral equal to their assumed UK GAAP liabilities for AGUK and equal to their assumed French GAAP liabilities for AGE.

Insurance Acquisitions

The Company has acquired financial guaranty portfolios, including by acquiring legacy financial guarantors or acquiring (through reinsurance) substantial portions of their insured portfolios, and by commuting business that the Company had previously ceded prior to 2009 to various non-affiliated legacy financial guarantors and multiline reinsurers that were active in the financial guaranty reinsurance market.

The Company also has periodically assumed, on a quota share basis, selected insured transactions from certain other legacy financial guarantors.

The Company continues to investigate additional opportunities related to remaining legacy financial guaranty portfolios, but the number and size of the opportunities have decreased and there can be no assurance of whether or when the Company will find suitable opportunities on appropriate terms.

Insurance Portfolio - Financial Guaranty

Insurance Business - Financial Guaranty

Financial guaranty insurance generally provides an unconditional and irrevocable guaranty that protects the holder of a debt instrument or other monetary obligation against non-payment of scheduled principal and interest payments when due.

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The principal benefit to investors is that the Company's guaranty provides increased certainty that scheduled payments will be received when due.

A financial guaranty may also improve the marketability and liquidity of obligations, especially obligations with complex structures or backed by asset classes new to the market.

A financial guaranty may also improve the marketability and liquidity of obligations, especially obligations with complex structures or backed by asset classes new to the

In general, and especially in such instances, investors may be able to sell insured bonds more quickly and at a better price than the comparable uninsured debt.

As an alternative to traditional financial guaranty insurance, the Company also may provide credit protection relating to a particular security or obligor through a credit derivative contract, such as a credit default swap (CDS).

Under the terms of a

CDS, the seller of credit protection agrees to make a specified payment to the buyer of credit protection if one or more specified credit events occurs with respect to a reference obligation or entity.

In general, the Company, as the seller of credit protection, specified as credit events in its CDS failure to pay interest and principal on the reference obligation, but the Company’s rights and remedies under a CDS may be different and more limited than under financial guaranty insurance of an entire issuance.

Under the terms of a CDS, the seller of credit protection agrees to make a specified payment to the buyer of credit protection if one or more specified credit events occurs with respect to a reference obligation or entity.

The Company also offers credit protection through reinsurance, and in the past has provided reinsurance to other financial guaranty insurers with respect to their financial guaranties of public finance, infrastructure and structured finance obligations.

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Public Finance Obligations The Company insures and reinsures a number of different types of non-U.S.

public finance obligations, which consist of both infrastructure projects and other projects essential for municipal function such as regulated utilities.

public finance obligations.

The types of non-U.S.

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structured finance obligations.

Structured finance counterparties and policy beneficiaries use the Company’s financial guaranty for a variety of reasons, including credit enhancement, risk syndication and regulatory capital optimization.

Credit support for the exposures written by the Company may come from a variety of sources, including some combination of subordinated tranches, excess spread, over-collateralization or cash reserves.

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The Company has not provided insurance for RMBS in the primary market since 2008.

Pooled Corporate Obligations are securities primarily backed by various types of corporate debt obligations, such as secured or unsecured bonds, bank loans or loan participations and trust preferred securities.

These securities are often issued in “tranches,” with subordinated tranches providing credit support to the more senior tranches.

The Company’s financial guaranty exposures generally are to the more senior tranches of these issues.

Subscription Finance Facilities are lending facilities provided to closed-end private market funds, most frequently private-equity funds.

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The Company may guarantee new or existing facilities and on a single facility or portfolio basis.

Guaranty’s exposures are generally to facilities with characteristics that include a high-quality fund sponsor with strong historical performance, diverse LP base composed primarily of institutional LPs and experienced bank lenders.

Financial Products Business is the guaranteed investment contracts (GICs) portion of a line of business previously conducted by Assured Guaranty Municipal Holdings Inc.

(AGMH) that the Company did not acquire when it purchased AGMH in 2009 from Dexia SA and that is being run off.

That line of business consisted of AGMH’s GIC business, its medium term notes business and the equity payment agreements associated with AGMH’s leveraged lease business.

Although Dexia SA and certain of its affiliates (Dexia) assumed the liabilities related to such businesses when the Company purchased AGMH, AGM policies related to such businesses remained outstanding.

Assured Guaranty is indemnified by Dexia against loss from the former financial products business.

Until November 2008, AGMH’s former financial products segment had been in the business of borrowing funds through the issuance of GICs insured by AGM and reinvesting the proceeds in investments that met AGMH’s investment criteria.

In June 2009, in connection with the Company’s acquisition of AGMH from Dexia Holdings Inc., Dexia SA, the ultimate parent of Dexia Holdings Inc., and certain of its affiliates, entered into a number of agreements intended to mitigate the credit, interest rate and liquidity risks associated with the GIC business and the related AGM insurance policies.

Some of those agreements have since terminated or expired, or been modified.

As of December 31, 2023, the aggregate accreted GIC balance was approximately $0.5 billion, compared with approximately $10.2 billion as of December 31, 2009.

As of December 31, 2023, the aggregate fair market value of the assets supporting the GIC business plus cash and positive derivative value exceeded by nearly $0.6 billion the aggregate principal amount of all outstanding GICs and certain other business and hedging costs of the GIC business.

AGMH’s financial products business had also issued medium term notes insured by AGM, reinvesting the proceeds in investments that met AGMH’s investment criteria.

As of December 31, 2023, only $244 million of insured medium term notes remain outstanding.

The financial products business included the equity payment undertaking agreement portion of the leveraged lease business.

Assured Guaranty’s exposures are generally to facilities with characteristics that include a high-quality fund sponsor with

strong historical performance, a diverse LP base composed primarily of institutional LPs and experienced bank lenders.

These securities are often issued in “tranches,” with subordinated tranches providing credit support to the more senior tranches.

The Company’s financial guaranty exposures generally are to the more senior tranches of these issues.

Financial Products Business is the guarantee of certain business written by financial products companies owned by Dexia SA, which comprised guaranteed investment contracts (GICs), medium term notes (MTNs) and equity payment undertaking agreements associated with leveraged lease business.

This business is being run off with the final maturity due in 2031.

Assured Guaranty is indemnified by Dexia SA and certain of its affiliates against loss from the former financial products business.

Consumer Receivables Securities are obligations backed by non-mortgage consumer receivables, such as student loans, automobile loans and leases, manufactured home loans and other consumer receivables.

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Structured Finance Obligations categories above.

Insurance Portfolio - Specialty Business

Insurance Business - Specialty

The Company also guarantees specialty business with similar risk profiles to its structured finance exposures written in financial guaranty form.

Specialty business includes, for example, excess-of-loss guarantees of minimum amount of billed rent on diversified portfolios of real estate properties, insurance securitizations and aircraft residual value insurance (RVI) transactions.

Exposure Limits, Underwriting Procedures, and Credit Policy

Specialty business includes, for example, diversified real estate, insurance securitizations, pooled corporate obligations and aircraft residual value insurance (RVI) transactions.

Exposure Limits, Underwriting Process, and Credit Policy

Exposure Limits

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Risk exposure limits for single obligors are based on the Company’s capital resources and its assessment of potential frequency and severity of loss as well as other factors, such as historical and stressed collateral performance.

Moreover, these limits are further constrained by both regulatory limits and rating agency requirements.

Moreover, these limits may also be constrained by both regulatory limits or rating agency requirements.

Sector limits are based on the Company’s view of stress losses for the sector and on its assessment of correlation.

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All of the foregoing limits are established in relation to the Company’s capital base.

Underwriting Procedures

Each insurance transaction underwritten by the Company involves persons with different skills and backgrounds across various departments within the Company.

The Company’s insurance underwriting teams include both underwriters and lawyers, who analyze the structure of a potential transaction and the credit and legal issues pertinent to the particular line of business or asset class, and accounting and finance personnel, who review the more complex transactions to determine the appropriate accounting treatment.

Upon completion of the underwriting analysis, the underwriter prepares a formal credit report that is submitted to a credit committee for review.

The Company’s credit committees assess each insurance transaction underwritten by the Company and are composed of senior officers of the Company generally excluding those senior officers responsible for business origination.

The committees are organized by asset class, such as for public finance or structured finance, and by company.

For certain small transactions, the credit decision may be delegated by the credit committee to a sub-committee composed of members of the credit committee.

Upon approval by the credit committee, the underwriter, working with the responsible attorney, is responsible for closing the transaction and issuing the policy.

At policy issuance, the underwriter and the responsible attorney certify that the transaction closed meets the terms and conditions agreed to by the credit committee.

Credit Policy

The Company maintains underwriting manuals that articulate the application of the principles in its risk appetite statement to its financial guaranty business.

For new financial guaranty business, generally a risk must be viewed by the Company as investment grade at the time of underwriting to be eligible for insurance.

In certain cases, however, the Company’s ultimate exposure may exceed its underwriting guidelines (caused by, for example, bond accretion exceeding the risk limitation, acquisitions, reassumptions or other strategic exceptions).

Risk Factors, Risks Related to Economic, Market and Political Conditions and Natural Phenomena captioned “The Company may be subjected to significant risks from large individual or correlated insurance exposures.”

Underwriting Process

The underwriting process for each insurance transaction involves underwriters, credit personnel and lawyers who analyze the structure of a potential transaction and the credit and legal issues pertinent to the particular line of business or asset class.

Some transactions also involve accounting personnel who review the transactions to determine the appropriate accounting treatment.

Formal credit reports for each proposed insurance transaction are assessed and approved by a credit committee composed of senior officers of the Company.

The Company maintains underwriting manuals that articulate the application of the principles in its risk appetite statement to its insurance business.

For new business, generally a risk must be viewed by the Company as investment grade at the time of underwriting to be eligible for insurance.

The underwriting manuals also articulate the Company’s exposure limits and credit policies applicable to specific products.

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and its exposure to derivative contracts and to debt subject to acceleration.

The Company assesses the obligor’s pension and other post-employment benefits obligations and funding policies and evaluates the obligor’s ability to adequately fund such obligations in the future.

The Company assesses the obligor’s pension and other post-employment benefits obligations, if applicable, and funding policies and evaluates the obligor’s ability to adequately fund such obligations in the future.

The Company analyzes other critical risk factors including the type of issue;

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The Company evaluates the impact of environmental and climate change risks, including natural perils, on the ability of the obligor to meet its financial obligations over the life of the insured transaction.

Such risks include rising sea levels, hurricanes, wildfires and earthquakes.

The Company weighs the risk of a rating agency downgrade of an obligation's underlying uninsured rating.

Such risks may include rising sea levels, hurricanes, wildfires and earthquakes.

In cases of not-for-profit institutions, such as healthcare issuers and private higher education issuers, the Company focuses on the financial stability of the institution, its competitive position and its management experience as well as restrictive covenants imposed on the obligor for the benefit of debt holders.

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infrastructure transactions, the Company reviews the type of project (e.g., utility, hospital, road, social housing, transportation or student accommodation) and the source of repayment of the debt.

For certain transactions, debt service and operational expenses are covered by availability payments made by either a governmental entity or a not-for-profit entity.

For certain transactions, debt service and operational expenses are covered by availability payments made by either a governmental or not-for-profit entity.

The availability payments are due if the project is available for use, regardless of whether the project actually is in use.

The principal risks for such transactions are construction risk and operational risk.

For other transactions, notably transactions secured by toll-roads, student accommodation and stadiums, revenues derived from the project must be sufficient to make debt service payments as well as cover operating expenses during the concession period.

For infrastructure transactions, underwriters generally use financial models to evaluate the ability of the transaction to generate adequate cash flow to service the debt under a variety of scenarios.

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a financial and operational review of the developer, the construction companies, and the project operator;

and a financial review of the various providers of operational financial protection for the bondholders (and therefore the insurer), including construction surety providers, letter-of-credit providers, liquidity banks or account banks.

The Company uses outside consultants to review the construction program and to assess whether the project can be completed on time and on budget.

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and execution risk, which is the risk that poor performance by a servicer or collateral manager contributes to a decline in the cash flow available to the transaction.

Each of these risks is addressed through the Company’s underwriting process.

The underwriter is also required to assess the presence of any environmental or climate change risk and, to the extent there are notable environmental or climate change risks, assess the risks and present them to the credit committee.

Each of these risks is addressed through

the Company’s underwriting process.

The underwriter is also required to assess the presence of any environmental or climate change risk and, to the extent there are notable environmental or climate change risks, analyze the potential impact, if any, of these risks on the transaction over its expected life, and present this assessment to the credit committee.

For structured finance transactions, underwriters generally use financial models to evaluate the ability of the transaction to generate adequate cash flow to service the debt under a variety of hypothetical scenarios.

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Financial strength ratings reflect a rating agency’s opinion of an insurer’s ability to pay under its insurance policies and contracts in accordance with their terms.

When the Company insures an obligation, the issuer or another party may request that one or more rating agencies providing financial strength ratings on the relevant insurance operating company assign a

rating equivalent to that insurer’s financial strength rating to the specific obligation it insured.

The ability to obtain such specific ratings is one attribute that makes the Company’s insurance products attractive in the market.

When an insurance subsidiary of the Company guarantees an obligation, the issuer or another party may request that one or more rating agencies providing financial strength ratings on such insurer assign that insurer’s financial strength rating to the specific obligation it guaranteed.

The ability to uplift credit ratings of underlying obligations is one attribute that makes the Company’s insurance products attractive in the market.

An insurer’s financial strength rating itself is not specific to any particular policy or contract;

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Ratings reflect only the views of the respective rating agencies assigning them and are subject to continuous review and revision or withdrawal at any time.

Low financial strength ratings or uncertainty over the Company’s ability to maintain its financial strength ratings for its insurance operating companies would have a negative impact on issuers’ and investors’ perceptions of the value of the Company’s insurance product.

Low financial strength ratings or uncertainty over the Company’s ability to maintain its financial strength ratings for its insurance subsidiaries would have a negative impact on issuers’ and investors’ perceptions of the value of the Company’s insurance product.

Therefore, the Company manages its business with the goal of achieving high financial strength ratings.

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This approach has made predicting the amount of capital required to maintain or attain a certain rating more difficult.

In addition, both S&P and Moody’s have applied other factors, some of which are subjective, such as the insurer's business strategy and franchise value or the anticipated future demand for its product, to justify ratings for the Company’s insurance subsidiaries below the ratings implied by their own capital adequacy models.

Currently, for example, S&P has concluded that Assured Guaranty’ insurance companies have “AAA” capital adequacy under the S&P model (but apply a downward adjustment due to a “largest obligor test” and rate them “AA”) and Moody’s has concluded that AGM has “Aa” capital adequacy under the Moody’s model (but rates it A2 based on other factors including the rating agency’s assessment of competitive profile, future profitability and market share).

In addition, both S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (S&P), and Moody’s Investors Service, Inc.

(Moody’s) have applied other factors, some of which are subjective, such as the insurer's business strategy and

franchise value or the anticipated future demand for its product, to justify ratings for the Company’s insurance subsidiaries below the ratings implied by their own capital adequacy models.

Currently, for example, S&P has concluded that Assured Guaranty’ insurance subsidiaries have “AAA” capital adequacy under the S&P model (but apply a downward adjustment due to a “largest obligor test” and rate them “AA”) and Moody’s has concluded that AG has “Aa” capital adequacy under the Moody’s model (but rates it A1 based on other factors including the rating agency’s assessment of competitive profile, future profitability and market share).

The application of these additional factors make it uncertain whether a rating downgrade could generally be avoided by raising additional capital or otherwise improving capital adequacy under the rating agency’s model.

Despite the unpredictable application of subjective factors that are in addition to a rating agency’s assessment of insurers’ capital adequacy, the Company has been able to maintain strong financial strength ratings.

However, if a substantial downgrade of the financial strength ratings of the Company’s insurance subsidiaries were to occur in the future, such downgrade would adversely affect its business and prospects and, consequently, its results of operations and financial condition.

The Company believes that if the financial strength ratings of any of its insurance subsidiaries were downgraded from their current levels, such downgrade could result in downward pressure on the premium that such insurance subsidiary would be able to charge for its insurance.

The Company believes that so long as its insurance subsidiaries continue to have financial strength ratings in the double-A category from at least one of S&P or Moody’s, they are likely to be able to continue writing financial guaranty business with a credit quality similar to that historically written.

However, if neither S&P nor Moody’s were to maintain financial strength ratings of an insurance subsidiary in the double-A category, or if either S&P or Moody’s were to downgrade an insurance subsidiary below the single-A level, it could be difficult for such insurance subsidiary to originate the current volume of new financial guaranty business with comparable credit characteristics.

However, if neither S&P nor Moody’s were to maintain financial strength ratings of an insurance subsidiary in the double-A category, or if either S&P or Moody’s were to downgrade an insurance subsidiary below the single-A level, it could be extremely difficult or impossible for such insurance subsidiary to originate the current volume of new financial guaranty business with comparable credit characteristics.

The Company periodically assesses the value of each rating assigned to each of its companies and may, as a result of such assessment, request that a rating agency add or drop a rating from certain of its companies.

For example, a Moody’s rating was dropped from AG Re and AGRO in 2015, and was the subject of a rating withdrawal request by AGC (such request was declined by Moody’s).

For example, a Moody’s rating was dropped from Assured Guaranty Re Ltd.

(AG Re) and Assured Guaranty Re Overseas Ltd.

(AGRO) in 2015.

Risk Factors, Strategic Risks, captioned “A downgrade of the financial strength or financial enhancement ratings of any of the Company’s insurance or reinsurance subsidiaries may adversely affect its business and prospects.”

Market Demand and Competition

Assured Guaranty is the market leader in the financial guaranty industry.

The Company’s position in the market benefits from its ability to maintain strong financial strength ratings, its strong claims-paying resources, its proven willingness and ability to make claim payments to policyholders after obligors have defaulted, and its ability to achieve recoveries in respect of the claims that it has paid on insured residential mortgage-backed and other securities and to resolve its troubled municipal exposures.

Assured Guaranty’s principal competition is in the form of obligations that issuers decide to issue on an uninsured basis.

public finance market, when the difference in yield (or the credit spread) between a bond insured by Assured Guaranty and an uninsured bond is narrow, as is often the case in a low interest rate environment, investors may prefer greater yield over insurance protection, and issuers may find the cost savings from insurance less compelling.

The Company’s position in the market benefits from its ability to maintain strong financial strength ratings, its strong claims-paying resources, its proven willingness and ability to make claim payments to policyholders after obligors have defaulted, and its ability to achieve recoveries in respect of the claims that it has paid and to resolve its troubled public finance and structured finance exposures, including residential mortgage-backed securities.

Market demand for financial guaranty insurance in the U.S.

public finance market is generally driven by the difference in yield (or the credit spread) between an insured bond and an uninsured bond.

When the difference in yield (or the credit spread) between a bond insured by Assured Guaranty and an uninsured bond is narrow, as is often the case in a low interest rate environment, investors may prefer greater yield over insurance protection, and issuers may find the cost savings from insurance less compelling.

In contrast, when credit spreads are wider, there is comparatively more room for issuer savings and insurance premium.

However, credit spreads may be narrower in a higher interest rate environment, as occurred in late 2022, and credit spreads may widen in a low interest rate environment, as occurred after the onset of the COVID-19 pandemic as a result of market concerns about the impact of the COVID-19 pandemic on some municipal credits.

See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — Economic Environment.

For a discussion of the economic environment, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — Economic Environment.

In the non-U.S.

infrastructure finance market, demand is a function of whether bonds are sold in the public markets rather than as privately funded transactions with uninsured executions.

public finance market, Assured Guaranty is the only financial guaranty company active before the 2008 financial crisis that has maintained sufficient financial strength to write new business continuously since the crisis began.

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public finance bonds sold with insurance in 2024, the Company insured approximately 58% of the par, while BAM insured approximately 42%.

BAM is effective in competing with the Company for small to medium sized U.S.

public finance transactions in certain sectors.

The Company believes that BAM is effective in competing with it for small to medium sized U.S.

public finance transactions in certain sectors, and may in the future compete for non-U.S.

transactions.

BAM sometimes prices its guaranties for such transactions at levels the Company does not believe produces an adequate rate of return and so does not match, but BAM's pricing and underwriting strategies may have a negative impact on the amount of premium the Company is able to charge for its insurance for such transactions.

However, the Company believes it has competitive advantages over BAM due to:

AGM’s larger capital base;

AGM’s ability to insure larger transactions and issuances in more diverse U.S.

bond sectors;

BAM’s higher leverage ratios than those of AGM;

BAM’s inability to date to generate profits and to increase its statutory capital meaningfully;

and AGM’s strong financial strength ratings from multiple rating agencies (in the case of AGM, AA+ from Kroll Bond Rating Agency (KBRA), AA from S&P and A1 from Moody’s, compared with BAM’s AA solely from S&P).

AG’s larger capital base;

AG’s ability to insure larger transactions and issuances in more diverse bond sectors;

BAM’s higher leverage ratios than those of AG;

and AG’s strong financial strength

ratings from multiple rating agencies (in the case of AG, AA+ from Kroll Bond Rating Agency (KBRA), AA from S&P and A1 from Moody’s, compared with BAM’s AA solely from S&P).

Additionally, as a public company with access to both the equity and debt capital markets, Assured Guaranty may have greater flexibility to raise capital, if needed.

In the non-U.S.

structured finance and non-U.S.

public finance markets, Assured Guaranty is the only financial guaranty insurance company currently writing new guaranties.

structured finance markets, Assured Guaranty is the only financial guaranty insurance company currently writing new guaranties.

Management considers the Company’s greater diversification to be a competitive advantage in the long run because it means the Company is not wholly dependent on conditions in any one market.

In the non-U.S.

infrastructure finance market, the uninsured execution serving as the Company’s principal competition occurs primarily in privately funded transactions where no bonds are sold in the public markets.

In the structured finance market, the majority of our business is represented by bilateral transactions with counterparties (typically insurance companies or banks) where the motivation to buy our product relates to capital savings, and/or single risk or sectoral risk management.

In this sector the Company’s principal competition is from other forms of capital saving or risk syndication available to banks and insurers, including nonpayment insurance.

The majority of the Company’s new structured finance business is represented by bilateral transactions with counterparties (typically insurance companies or banks) where the motivation to buy its product relates to capital savings, and/or single risk or sectoral risk management.

In the securitization markets, uninsured execution occurs in both public and private transactions primarily where bonds are sold with sufficient credit or structural enhancement embedded in transactions, such as through overcollateralization, first loss insurance, excess spread or other terms, to make the bonds attractive to investors without bond insurance.

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However, the Company believes that the presence of additional guarantors might also increase the overall visibility and acceptance of the product by a broadening group of investors, and the fact that investors are willing to commit fresh capital to the industry may promote market confidence in the product.

In addition to financial guaranty insurance companies, Assured Guaranty competes with other forms of credit enhancement such as letters of credit or credit derivatives provided by banks and other financial institutions (some of which are governmental enterprises), nonpayment insurance, or direct guaranties of municipal, structured finance or other debt by federal or state governments or government sponsored or affiliated agencies.

In addition to financial guaranty insurance companies, Assured Guaranty competes with other forms of credit enhancement such as letters of credit or credit derivatives provided by banks and other financial institutions (some of which are governmental enterprises), other forms of capital savings or risk syndication, including nonpayment insurance, and direct guaranties of municipal, structured finance or other debt by federal or state governments or government sponsored or affiliated agencies.

Alternative credit enhancement structures, and in particular federal government credit enhancement or other programs, can interfere with the Company’s new business prospects, particularly if they provide direct government-level guaranties, restrict the use of third-party financial guaranties or reduce the amount of transactions that might qualify for financial guaranties.

The Company believes that issuers and investors in securities will continue to purchase financial guaranty insurance, especially if credit spreads widen.

municipalities have budgetary requirements that are best met through financings in the

fixed income capital markets.

municipalities have budgetary requirements that are best met through financings in the fixed income capital markets.

Historically, smaller municipal issuers have frequently used financial guaranties in order to access the capital markets with new debt offerings at a lower all-in interest rate than on an unguaranteed basis.

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The Company evaluates the amount of capital it requires based on an internal capital model as well as rating agency models and insurance regulations.

The Company believes it has excess capital based on its internal capital model and rating agency models, and, to the extent permitted by insurance regulation or other regulatory authority, has been returning some of its excess capital to shareholders by repurchasing its common shares and paying dividends, and has been deploying some of its excess capital to acquire financial guaranty portfolios and alternative investments.

Insurance Acquisitions

Since 2009, the Company has acquired financial guaranty portfolios, including by acquiring legacy financial guarantors or acquiring (through reinsurance) substantial portions of their insured portfolios, and by commuting business that the Company had previously ceded prior to 2009 to various non-affiliated legacy financial guarantors and multiline reinsurers that were active in the financial guaranty reinsurance market.

The Company also has periodically assumed, on a quota share basis, selected insured transactions from certain other legacy financial guarantors.

Insurance Subsidiaries

The Company conducts financial guaranty business through its insurance subsidiaries:

• Assured Guaranty Inc.

(AG), domiciled in Maryland and formerly known as Assured Guaranty Corp., and its insurance subsidiaries:

▪ Assured Guaranty UK Limited (AGUK), organized in the U.K.;

▪ Assured Guaranty (Europe) SA (AGE), organized in France;

• AG Re, domiciled in Bermuda, and its insurance subsidiary:

▪ Assured Guaranty Re Overseas Ltd.

(AGRO), domiciled in Bermuda.

The following is a description of the Company’s insurance subsidiaries:

• Assured Guaranty Inc.

AG is located in New York and domiciled in Maryland, was organized in 1985 and commenced operations in 1988.

It provides financial guaranty insurance and reinsurance in the U.S., U.K., European Economic Area (EEA) and certain other countries.

Effective August 1, 2024, AG’s U.S.

affiliate, Assured Guaranty Municipal Corp.

(AGM) merged with and into AG, with AG as the surviving company.

Prior to the merger, AGM was an insurance subsidiary of the Company.

• Assured Guaranty UK Limited AGUK provides financial guaranties in the U.K.

and certain other non-EEA countries.

AGUK is a U.K.

incorporated private limited company licensed as a U.K.

insurance company and located in England.

AGUK was organized in 1990 and issued its first financial guaranty in 1994.

• Assured Guaranty (Europe) SA.

AGE (together with AGUK, the European Insurance Subsidiaries) is a French incorporated company located in France and established in 2019 that has been authorized by the French insurance and banking supervisory authority, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), to conduct financial guaranty business.

AGE writes new business in the EEA.

• Assured Guaranty Re Ltd.

AG Re primarily underwrites financial guaranty reinsurance of certain affiliated companies and third-party primary insurers.

AG Re is incorporated under the laws of Bermuda and is licensed as a Class 3B insurer under the Insurance Act 1978 and related regulations of Bermuda.

• Assured Guaranty Re Overseas Ltd.

AGRO underwrites direct and assumed financial guaranty insurance, and also underwrites specialty business.

AGRO is incorporated under the laws of Bermuda and is licensed as a Bermuda Class 3A and Class C insurer.

Support of the European Insurance Subsidiaries

AG Support of AGUK

AG and AGUK have in place a co-guarantee structure pursuant to which each of AG and AGUK directly guarantees a share of certain issued obligations (Co-Guarantee Structure).

Under the current Co-Guarantee Structure:

(i) AGUK directly guarantees 15% of the obligations issued in a particular transaction;

(ii) AG directly guarantees 85% of the guaranteed obligations;

and (iii) AG also provides a second-to-pay guarantee for AGUK’s 15% portion of the guaranteed obligations.

The Co-Guarantee Structure has been in place since 2011 for public finance business and since 2021 for non-public finance business.

Separate and apart from the Co-Guarantee Structure, AG provides support to AGUK through a quota share and excess of loss reinsurance agreement (Reinsurance Agreement) and a net worth maintenance agreement (Net Worth Agreement).

Under the quota share cover of the Reinsurance Agreement, AG reinsures approximately 50-100% of most of the outstanding financial guaranties that AGUK wrote prior to the initial implementation of the Co-Guarantee Structure in 2011.

The quota share cover of the Reinsurance Agreement also obligates AG to reinsure 85% of new business written by AGUK where the Co-Guarantee Structure cannot be utilized;

currently, there is no such outstanding business at AGUK.

Under the excess of loss cover of the Reinsurance Agreement, AG is obligated to pay AGUK quarterly the amount (if any) by which (i) the sum of:

(a) AGUK’s incurred losses, calculated in accordance with generally accepted accounting practice in the U.K.

(UK GAAP) as reported by AGUK in its financial returns filed with the Prudential Regulation Authority (PRA);

and (b) AGUK’s paid losses and loss adjustment expenses (LAE), in both cases net of all other performing reinsurance (including the reinsurance provided by AG under the quota share cover of the Reinsurance Agreement), exceeds (ii) an amount

(a) AGUK’s capital resources under U.K.

minus (b) 110% of the greatest of the amounts as may be required by the PRA as a condition for maintaining AGUK’s authorization to carry on a financial guarantee business in the U.K.

AG secures its quota share reinsurance obligations to AGUK under the Reinsurance Agreement by posting collateral in trust equal to 102% of the sum of AG’s assumed share of the following in respect of the reinsured AGUK policies:

(i) AGUK’s unearned premium reserve (net of AGUK’s reinsurance premium payable to AG);

(ii) AGUK’s provisions for unpaid losses and allocated LAE (net of any salvage recoverable);

and (iii) any unexpired risk provisions of AGUK, in each case (i) - (iii) as calculated by AGUK in accordance with UK GAAP.

AGUK may terminate the Reinsurance Agreement upon the occurrence of any of the following events:

(i) AG’s rating by Moody’s falls below “Aa3” or its rating by S&P falls below “AA-” (and AG fails to restore such rating(s) within a prescribed period of time);

(ii) AG’s insolvency, failure to maintain the minimum capital required under the laws of AG’s domiciliary jurisdiction, filing a petition in bankruptcy, going into liquidation or rehabilitation, or having a receiver appointed;

or (iii) AG’s failure to maintain its required collateral described above.

AGUK has had a right to terminate the Reinsurance Agreement since 2013 when Moody’s downgraded AG below “Aa3”, but has not elected to exercise this right.

AG is currently rated “A1” by Moody’s.

Under the Net Worth Agreement, AG is obligated to make capital contributions to AGUK in amounts sufficient to ensure that AGUK maintains capital resources equal to 110% of the greatest of the amounts as may be required by the PRA as a condition of AGUK maintaining its authorization to carry on a financial guarantee business in the U.K., provided that, except with the express approval (or non-disapproval) of the Maryland Insurance Administration (MIA), (a) no individual contribution by AG to AGUK for such purpose shall exceed $25 million;

(b) AG shall not be permitted to make more than two (2) individual contributions to AGUK under the Net Worth Agreement during any calendar year, which two (2) contributions together shall not exceed $25 million;

and (c) the aggregate contributions by AG to AGUK under the Net Worth Agreement shall not exceed $100 million.

The Net Worth Agreement obligates AG to provide AGUK with support similar to that which AG also provides AGUK under the excess of loss cover of the Reinsurance Agreement, except the latter is meant to protect against erosion of AGUK’s capital resources due to insurance and/or reinsurance losses in AGUK’s insured portfolio, while the former is meant to protect against an erosion of AGUK’s capital resources for other reasons (e.g., poor investment performance or origination expenses exceeding premium).

Given this purpose, the Net Worth Agreement clarifies that any amounts due thereunder must take into account all amounts paid, or reasonably expected to be paid, under the Reinsurance Agreement.

The Net Worth Agreement also includes termination provisions substantially similar to those in the Reinsurance Agreement.

AG has never been required to make any contributions to AGUK’s capital under the current Net Worth Agreement;

however, AG may elect to make, from time to time and subject to MIA approval or non-disapproval, capital contributions to AGUK not required by the net worth maintenance agreement.

AG Support of AGE

AGE has in place similar reinsurance and capital support agreements as are in place with AGUK.

AG’s reinsurance agreements with AGE generally apply to all AGE policies that insure business in EEA jurisdictions.

These agreements consist of:

(i) a quota share reinsurance agreement whereby AG provides AGE with 90% proportional reinsurance for new business written by AGE since its authorization in January 2020;

(ii) a second quota share reinsurance agreement between AGE and AG pursuant to which AG:

reinsures approximately 70-100% of business that was transferred to AGE by AGUK effective October 1, 2020 pursuant to the Part VII of the Financial Services and Markets Act 2000 (FSMA) (Part VII Transfer) (i.e., the same reinsurance to AGE as AGUK received prior to such transfer);

provides 90% proportional reinsurance for certain business transferred to AGE pursuant to the Part VII Transfer that was not reinsured by AG (or its affiliates) when such business was part of AGUK’s insured portfolio;

(iii) an excess of loss reinsurance agreement, similar to the excess of loss cover of AG’s Reinsurance Agreement with AGUK, pursuant to which AG is obligated, effectively, to ensure that AGE maintains capital resources equal to at least 110% of the most stringent amount of capital that AGE may be required to maintain as a condition of it maintaining its authorization to carry on a financial guarantee business in France.

AG secures its quota share reinsurance obligations to AGE under the agreements described above by depositing collateral in accounts maintained by an EEA financial institution and pledging such accounts to AGE under French law.

The measure of AG’s required collateral for AGE is generally the same as the measure of AG’s required collateral for AGUK, except that the former is determined in accordance with generally accepted accounting principles in France (French GAAP).

AG also has in place with AGE a net worth maintenance agreement that is similar to AG’s Net Worth Agreement with AGUK - i.e., the former obligates AG to ensure that AGE maintains capital resources at least equal to 110% of its most stringent capital requirement for maintaining its authorization to carry on a financial guarantee business in France, subject to limitations on the amount of individual and aggregate contributions that AG can make to AGE under the agreement without MIA approval or non-disapproval.

AG may elect to make, from time to time and subject to MIA approval or non-disapproval, capital contributions to AGE not required by the net worth maintenance agreement.

Other Group Support of the European Insurance Subsidiaries for Certain Legacy Business

AG Re also provide reinsurance support to the European Insurance Subsidiaries for certain legacy business that was insured prior to 2009 by AGUK.

Some of this business continues to reside at AGUK, while some of it was transferred to AGE in October 2020 pursuant to the Part VII Transfer.

AG Re does not currently provide direct reinsurance support for new business being written by AGUK or AGE.

AG Re secures its reinsurance of this legacy business in essentially the same manner as AG secures its reinsurance of the European Insurance Subsidiaries - i.e., AG Re pledges collateral equal to its assumed UK GAAP liabilities for AGUK and equal to its assumed French GAAP liabilities for AGE.

Asset Management

Strategic Transactions

Until July 1, 2023, the Company served as an investment advisor to primarily CLOs and opportunity funds, through AssuredIM.

Beginning July 1, 2023, the Company participates in the asset management business through its ownership interest in Sound Point, as described below.

On July 1, 2023, Assured Guaranty contributed to Sound Point, LP the AssuredIM Contributed Business, as contemplated by the Transaction Agreement entered into with Sound Point on April 5, 2023.

As a result, Sound Point now manages CLOs consisting of $35.2 billion in AUM as of December 31, 2023, making Sound Point the fifth largest CLO manager globally by AUM (based on December 31, 2023 CreditFlux CLO manager rankings).

Until July 1, 2023, the Company served as an investment adviser to primarily collateralized loan obligations (CLOs) and opportunity funds, through Assured Investment Management LLC (AssuredIM LLC) and its investment management affiliates (together with AssuredIM LLC, AssuredIM).

Beginning July 1, 2023, the Company participates in the asset management business through its ownership interest in Sound Point, LP and certain of its investment management affiliates (together with Sound Point, LP, Sound Point), as described below.

On July 1, 2023, Assured Guaranty contributed to Sound Point, LP most of its asset management business, other than that conducted by Assured Healthcare Partners LLC (AHP) (AssuredIM Contributed Business), as contemplated by the transaction agreement entered into with Sound Point on April 5, 2023 (Transaction Agreement).

Assured Guaranty received, subject to certain potential post-closing adjustments, approximately 30% of the common interests in Sound Point, LP, and certain other interests in Sound Point.

See Part II, Item 8, Financial Statements and Supplementary Data, Note 1, Business and Basis of Presentation, for additional information.

In addition, in accordance with the terms of a letter agreement (Letter Agreement), effective July 1, 2023, the U.S.

Insurance Subsidiaries, (i) engaged Sound Point as their sole alternative credit manager, and (ii) transitioned to Sound Point the management of certain existing alternative investments and related commitments.

The Letter Agreement also provides that, in the first two years of Sound Point’s engagement, the U.S.

Insurance Subsidiaries, including through their investment subsidiary AG Asset Strategies LLC (AGAS), would, subject to regulatory approval, make new investments in funds, other vehicles and separately managed accounts managed by Sound Point which, when aggregated with the alternative investments and commitments transitioned from AssuredIM and any reinvestments (collectively, Sound Point Investments), and investments made by other Assured Guaranty affiliates, will total $1 billion.

The Letter Agreement contemplates a long-term investment partnership between Sound Point and Assured Guaranty, whereby the U.S.

Insurance Subsidiaries have agreed to reinvest all returns of capital from Sound Point Investments for a period of 15 years, until July 1, 2038.

Similarly, the Letter Agreement provides for reinvestment by the U.S.

Insurance Subsidiaries of all gains and dividends from Sound Point Investments in the first two years of Sound Point’s engagement, and reinvestment of half of all such gains and dividends thereafter until July 1, 2033 (the transactions contemplated under the Transaction Agreement and the Letter Agreement, the Sound Point Transaction).

On July 1, 2028, the U.S.

Insurance Subsidiaries may choose to reduce the amounts invested or required to be reinvested in certain Sound Point Investments under the Letter Agreement, subject to adjustment in Assured Guaranty’s portion of its ownership interest in Sound Point.

To the extent not required to be reinvested by the Letter Agreement, all proceeds from Sound Point Investments received in accordance with their operative investment documents can be distributed to the U.S.

Insurance Subsidiaries.

In addition, in accordance with the terms of a letter agreement (Letter Agreement), effective July 1, 2023, AG (i) engaged Sound Point as its sole alternative credit manager and (ii) transitioned to Sound Point the management of certain existing alternative investments and related commitments.

The Letter Agreement also provides that, within the first two years of Sound Point’s engagement, AG would, subject to regulatory approval, cure terms and other terms of the Letter Agreement, make new investments in funds, other vehicles and separately managed accounts managed by Sound Point which, when aggregated with the alternative investments and commitments transitioned from AssuredIM and any reinvestments (collectively, Sound Point Investments), and investments made by other Assured Guaranty affiliates, will total $1 billion.

The Letter Agreement contemplates a long-term investment partnership between Sound Point and Assured Guaranty, whereby AG has agreed to reinvest all returns of capital from Sound Point Investments for a period of 15 years, until July 1, 2038.

Similarly, the Letter Agreement provides that AG will reinvest all gains and dividends from Sound Point Investments for the first two years of Sound Point’s engagement, and reinvest half of all such gains and dividends thereafter until July 1, 2033 (the transactions contemplated under the Transaction Agreement and the Letter Agreement, the Sound Point Transaction).

On July 1, 2028, AG may choose to reduce the amounts invested or required to be reinvested in certain Sound Point Investments under the Letter Agreement, subject to adjustment of Assured Guaranty’s portion of its ownership interest in Sound Point.

extent not required to be reinvested by the Letter Agreement, all proceeds from Sound Point Investments received in accordance with their operative investment documents can be distributed to the AG.

See Part II, Item 8, Financial Statements and Supplementary Data, Note 7, Investments and Cash.

In July 2023, Assured Guaranty completed the AHP Transaction where it sold all of its equity interests in AHP, which was established in 2020 and managed two healthcare-focused funds, to an entity owned and controlled by the managing partner of AHP.

The Company’s investment in Sound Point and, previously, AssuredIM advance one of the Company’s key strategic initiatives to diversify its sources of earnings into fee-based industries that leverage its core competency in credit while diversifying and expanding the categories and types of its investments.

The Company’s ownership interest in Sound Point advances one of the Company’s key strategic initiatives to diversify its sources of earnings into fee-based industries that leverage its core competency in credit.

In addition, the Company’s alternative investments made under the Letter Agreement with Sound Point furthers the Company’s goal of diversifying and expanding the categories and types of its investments.

In July 2023, Assured Guaranty sold all of its equity interests in AHP, which manages healthcare funds, to an entity owned and controlled by the managing partner of AHP (AHP Transaction), thereby disposing of its remaining asset management business.

In connection with the AHP Transaction, the Company agreed to remain a strategic investor in certain AHP managed funds, retained its portion of carried interest in certain AHP managed funds and received other consideration.

Please see Item 1A.

Risk Factors, Strategic Risks captioned “Competition in the Company’s industries may adversely affect its results of operations, business prospects and share price”, “Strategic transactions may not result in the benefits anticipated”, “The Company’s investments in Sound Point are subject to the risks of Sound Point’s business that may adversely

affect the Company’s financial condition, results of operations, capital, business prospects and share price,” and “From July 1, 2023, the Company’s interest in Sound Point is subject to the risks normally associated with a minority interest.”

Risk Factors, Strategic Risks, captioned “Competition in the Company’s industries may adversely affect its results of operations, business prospects and share price,” “Strategic transactions may not result in the benefits anticipated,” “The Company’s investments in Sound Point are subject to the risks of Sound Point’s business that may adversely affect the Company’s financial condition, results of operations, capital, business prospects and share price,” and “The Company’s interest in Sound Point is subject to the risks normally associated with a minority interest.”

Asset Management Strategies

Until July 1, 2023, the Company managed primarily CLOs and opportunity funds focused on healthcare and asset based investing.

Beginning July 1, 2023, following the Sound Point Transaction, the Company participates in the asset management business through its ownership interest in Sound Point.

Sound Point, LP was founded in 2008 and has credit strategies focusing on CLOs and performing credit, private credit, structured credit, opportunistic credit, commercial real estate credit and co-investments across the foregoing strategies.

The Company invests in certain of these strategies.

These strategies are implemented for clients, including the Company, through funds and customized separately managed accounts and co-investment opportunities as further described below and in Sound Point, LP’s Firm Brochure on Form ADV Part 2A filed with the U.S.

Securities and Exchange Commission.

The Company participates in the asset management business through its ownership interest in Sound Point.

Sound Point, LP was founded in 2008 and has five main credit strategies:

(i) CLOs and performing credit, (ii) private credit, (iii) structured credit, (iv) opportunistic credit, and (v) commercial real estate credit.

Sound Point also makes co-investments across the foregoing strategies.

The Company invests in certain of Sound Point, LP’s credit strategies.

Sound Point, LP’s Firm Brochure and other SEC filings are maintained by Sound Point, LP, which remains solely responsible for their content.

In addition, prior to the Sound Point Transaction, AssuredIM invested in investment grade municipal securities on behalf of the U.S.

Insurance Subsidiaries.

In connection with the Sound Point Transaction, the Company retained management of the strategy internally.

In February 2024, responsibility for the Company’s investment grade municipal securities strategy was transitioned to a third-party asset manager.

Separately, prior to the Sound Point Transaction, AssuredIM also invested in investment grade CLO tranches managed by unaffiliated managers on behalf of the U.S.

Insurance Subsidiaries, and such investments were transitioned to a third-party asset manager in June 2023.

Sound Point, LP’s CLO Strategy focuses on launching and managing CLOs (SP CLOs) whose investment assets primarily include corporate senior-secured bank loans and bonds.

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Sound Point, LP’s Performing Credit Floating Rate Strategy primarily focuses on performing non-investment grade corporate senior-secured bank loans and bonds.

Sound Point, LP’s Private Credit Strategy is comprised of the Direct Lending Strategy, Strategic Capital Strategy and Specialty Finance Strategy.

Direct Lending primarily focuses on privately negotiated, secured loans to U.S.

Sound Point, LP’s Private Credit Strategy is comprised of the following sub-strategies:

Middle Market Direct Lending Capital Solutions and Specialty Finance.

Middle Market Direct Lending primarily focuses on privately negotiated, secured loans to U.S.

middle-market companies.

Strategic Capital Strategy primarily focuses on investments in senior secured debt, junior secured debt, accounts receivable financings, mezzanine debt and equity or equity linked securities and Specialty Finance Strategy which invests in specialty finance assets, financial technology, marketplace lending, consumer finance, structured finance and securitized products related to specialty finance lenders.

Capital Solutions primarily focuses on investments in senior secured debt, junior secured debt, accounts receivable financings, mezzanine debt and equity or equity linked securities and Specialty Finance Strategy which invests in specialty finance assets, financial technology, marketplace lending, consumer finance, structured finance and securitized products related to specialty finance lenders.

Sound Point, LP’s Structured Credit Strategy primarily invests in the equity and debt of Third Party CLOs as well as the residual interests in warehouse facilities for such CLOs.

Sound Point, LP’s Opportunistic Credit Strategy is comprised of both a Credit Opportunity Strategy and a Loan Opportunity Strategy.

The Credit Opportunity Strategy primarily focuses on corporate bonds, senior-secured bank loans and equities and the Loan Opportunity Strategy which primarily focuses on distressed bonds, distressed bank loans, public and private equity, and trade claims.

The Credit Opportunity Strategy primarily focuses on corporate bonds, senior-secured bank loans and equities and the Loan Opportunity Strategy primarily focuses on distressed bonds, distressed bank loans, public and private equity, and trade claims.

Sound Point, LP’s Commercial Real Estate Credit Strategy focuses on commercial mortgage loans and debt where commercial real estate properties serve as the underlying collateral.

The Company invests primarily in fixed-maturity securities, short-term investments and various alternative investments (some of which are accounted for as consolidated investment vehicles (CIVs)).

Investment income from the Company’s investments is one of the primary sources of cash flow supporting its claim payments and other operational costs, as well as its capital management objectives.

The Company invests primarily in investment-grade fixed-maturity securities and short-term investments, as well as various alternative investments.

Income from the Company’s investments is one of the primary sources of cash flow supporting

its claim payments and other operational costs, as well as its capital management objectives.

The Company’s principal objectives in managing its investment portfolio are to maintain sufficient liquidity to cover unexpected stress in the insurance portfolio;

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and to preserve the highest possible ratings for each Assured Guaranty subsidiary.

If the Company’s calculations with respect to its insurance subsidiaries liabilities are incorrect or other unanticipated payment obligations arise, or if the Company improperly structures its investments to meet these and other corporate liabilities,

it could have unexpected losses, including losses resulting from forced liquidation of investments.

If the Company’s calculations with respect to its insurance subsidiaries’ liabilities are incorrect or other unanticipated payment obligations arise, or if the Company improperly structures its investments to meet these and other corporate liabilities, it could have unexpected losses, including losses resulting from forced liquidation of investments.

The investment policies of the Company’s insurance subsidiaries are subject to insurance law requirements, and may change depending upon regulatory, economic, rating agency and market conditions and the existing or anticipated financial condition and operating requirements, including the tax position, of the businesses.

The performance of invested assets is subject to the ability of the Company and its investment managers to select and manage appropriate investments.

As of December 31, 2023 and 2022, approximately 91% and 98%, respectively, of the total investments of $9.1 billion and $8.4 billion, respectively, were fixed-maturity securities and short-term investments consisting primarily of the following:

As of December 31, 2024, the investment portfolio had a carrying value of $8.7 billion and consisted primarily of the following:

Fixed-maturity securities and short-term investments:

As of December 31, 2023, other than Loss Mitigation Securities, the Puerto Rico New Recovery Bonds and CVIs (described below), the majority (59%, or $5.4 billion) of the $9.1 billion investment portfolio was managed by Goldman Sachs Asset Management, L.P., Wellington Management Company, LLP, and MacKay Shields LLC.

Each of these three investment managers has discretionary authority over the portion of the investment portfolio it manages, within the limits of the investment guidelines approved by the Company’s Board of Directors.

As of December 31, 2024, approximately $7.7 billion or 89% of the investment portfolio consisted of fixed-maturity securities and short-term investments.

As of December 31, 2024, the majority (70%, or $5.5 billion) of the fixed-maturity securities and short-term investments was managed by Goldman Sachs Asset Management, L.P., Wellington Management Company, LLP, and MacKay Shields LLC.

Each of these investment managers has discretionary authority over the portion of the investment portfolio it manages, within the limits of the investment guidelines approved by the Company’s Board of Directors (the Board or AGL’s Board).

Each manager is compensated based upon a fixed percentage of the market value of the portion of the portfolio being managed by such manager.

Wellington Management Company LLP owns or manages funds that own more than 5% of the Company’s common shares.

As of December 31, 2023, Loss Mitigation Securities represent 5% of the investment portfolio, or $459 million, based on fair value.

After over five years of negotiations, a substantial portion of the Company’s Puerto Rico exposure was resolved in 2022 in accordance with four orders entered by the United States District Court of the District of Puerto Rico (Federal District Court of Puerto Rico) related to the Company’s exposure to all insured Puerto Rico credits experiencing payment default in 2022 except Puerto Rico Electric Power Authority (PREPA) (2022 Puerto Rico Resolutions).

As a result of the 2022 Puerto Rico Resolutions, the Company received substantial amounts of cash and Contingent Value Instruments (CVIs), as well as new general obligation bonds (under the GO/PBA Plan) (New GO Bonds) and new bonds backed by toll revenues (under the HTA Plan) (Toll Bonds, and together with the New GO Bonds, New Recovery Bonds).

On December 28, 2023, all outstanding Toll Bonds were called.

As of December 31, 2023, 4% of the investment portfolio, with a fair value of $332 million, represents New Recovery Bonds and CVIs obtained as part of the 2022 Puerto Rico Resolutions.

See Part II, Item 8, Financial Statements and Supplementary Data, Note 3, Outstanding Exposure.

Other investments:

In addition to its fixed-maturity and short-term investments portfolio, the Company also has other investments which primarily include the Company’s investment in Sound Point and alternative investments including investments across a variety of strategies and asset classes such as CLO equity tranches, direct lending, structured credit, strategic capital, specialty finance, asset-based investing and healthcare-focused private equity.

The Company leverages the knowledge and experience of Sound Point to manage its alternative investments.

As of December 31, 2023 and December 31, 2022, the Company had $829 million and $133 million, respectively, in alternative investments that were reported in other invested assets on the consolidated balance sheets.

The Company also has alternative investments accounted for as consolidated investment vehicles (CIVs).

As of December 31, 2023 and December 31, 2022, CIVs had a combined net asset value (NAV) of $305 million and $569 million, respectively.

Puerto Rico Trust Assets :

In addition to New Recovery Bonds and CVIs described above, for bondholders that elected to receive custody receipts that represent an interest in the legacy insurance policy plus any cash, New Recovery Bonds and CVIs under the 2022 Puerto Rico Resolutions, such assets were reported in consolidated trusts.

As of December 31, 2023, the Company reported $155 million in Puerto Rico Trusts’ assets in financial guaranty VIEs (FG VIEs) assets on the consolidated balance sheets, primarily consisting of cash.

In the fourth quarter of 2023, all of the Toll Bonds in the Puerto Rico Trusts were called, resulting in cash proceeds of $154 million.

Such cash proceeds comprise the vast majority of the assets in the Puerto Rico Trusts as of December 31, 2023.

In January 2024, such proceeds were used to pay down a portion of the liabilities of the Puerto Rico Trusts.

The remaining liabilities of the Puerto Rico Trusts will be paid by the U.S.

Insurance Subsidiaries under their financial guaranty policies and are no longer dependent on the credit of Puerto Rico Highway and Transportation Authority (PRHTA).

See Part II, Item 8, Financial Statements and Supplementary Data, Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles, for information on the Puerto Rico Trusts and the CIVs.

The available-for-sale fixed-maturity securities in the investment portfolio primarily consist of investment-grade obligations of state and political subdivisions, U.S.

government and agencies, corporate securities, mortgage-backed and other asset-backed securities.

In addition, as of December 31, 2024, $479 million (based on fair value) of the available-for-sale fixed maturity securities were Loss Mitigation Securities, and $277 million were CLO equity tranches, most of which were transferred out of the CLO fund in the fourth quarter of 2024.

The Company considers CLO equity tranches to be a component of its alternative investment strategy.

The Company also had $123 million (based on fair value) of Contingent Value Instruments (CVIs), obtained as part of the resolution of the Company’s exposure to insured Puerto Rico credits experiencing payment default other than PREPA (2022 Puerto Rico Resolutions), all of which were classified as trading securities.

See Part II, Item 8, Financial Statements and Supplementary Data, Note 7, Investments and Cash.

Other invested assets and CIVs:

As of December 31, 2024 the carrying value of the Company’s ownership interest in Sound Point was $418 million and is reported in “other invested assets” on the consolidated balance sheets.

The Company also has alternative investments in a variety of investment strategies and asset classes offered by Sound Point as described above in “ - Asset Management Strategies,” as well as alternative investments managed by AHP and other parties.

As of December 31, 2024, the Company’s other invested assets primarily consisted of funds focused on private healthcare investing, asset-based/specialty finance, CLOs, and middle market direct lending.

In 2024 the underlying assets of certain funds were distributed, primarily CLO equity tranches, and were reclassified to available-for-sale fixed-maturity securities.

As of December 31, 2024, one Sound Point managed fund was consolidated and classified as a CIV.

The Company’s interest in that CIV based on net-asset-value was $33 million.

See Part II, Item 8, Financial Statements and Supplementary Data, Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles, for information on the CIVs.

Risk Management

Organizational Structure

The Company’s Board of Directors (the Board or AGL’s Board) oversees the risk management process.

The Board oversees the risk management process.

The Board employs an enterprise-wide approach to risk management that supports the Company’s business plans within a reasonable level of risk.

Risk assessment and risk management are not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for that company.

The Board annually approves the Company’s business plan, taking risk management into account.

Risk assessment and risk management encompass not only understanding the risks the Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company.

The Board annually approves the

Company’s business plan, taking risk management into account.

It also approves the Company’s risk appetite statement, which articulates the Company’s tolerance for risk and describes the general types of risk that the Company accepts or attempts to avoid.

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The Risk Oversight Committee of the Board oversees the standards, controls, limits, underwriting guidelines and policies that the Company establishes and implements in respect of credit underwriting and risk management.

It focuses on management's assessment and management of credit risks as well as other risks, including, but not limited to, market, financial, legal, and operational risks (including cybersecurity and data privacy risks), and risks relating to the Company's reputation and ethical standards.

In addition, the Audit Committee of the Board is responsible for, among other matters, reviewing policies and processes related to risk assessment and risk management, including the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, in coordination with the Risk Oversight Committee, as appropriate.

It also oversees cybersecurity and data privacy as related to financial systems and controls, and reviews compliance with related legal and regulatory requirements.

The Compensation Committee of the Board reviews compensation-related risks to the Company.

It focuses on management's assessment and management of credit risks as well as other risks, including, but not limited to, market, financial, legal, operational risks (including information technology, cybersecurity and data privacy risks), and risks relating to the Company's reputation and ethical standards.

It also oversees information technology, cybersecurity and data privacy as related to financial systems and controls, and reviews compliance with related legal and regulatory requirements.

The Compensation Committee of the Board reviews risks to the Company arising from its compensation program.

The Finance Committee of the Board oversees the Company’s investment portfolio (including alternative investments) and the Company’s capital structure, liquidity, financing arrangements, rating agency matters, and any corporate development activities in support of the Company’s financial plan.

The Nominating and Governance Committee of the Board oversees risk at the Company by developing appropriate corporate governance guidelines and identifying qualified individuals to become board members.

The Environmental and Social Responsibility Committee oversees the Company’s risk and opportunities related to environmental issues, such as climate change, as well as aspects of human capital management, including diversity and inclusion.

The Nominating and Governance Committee of the Board oversees risk at the Company by developing appropriate corporate governance guidelines, identifying qualified individuals to become Board members and, in coordination with the Compensation Committee, making plans for senior management succession.

The board of directors of each of the Company’s insurance subsidiaries has overall responsibility for the system of governance, oversight of the business and affairs and establishment of the key strategic direction and key financial objectives, including risk management, of its respective company.

The AGUK Board and the AGE Board have each delegated, pursuant to written terms of reference, responsibility for risk matters to their respective Risk Oversight Committees.

The AGUK Board and the AGE Board have delegated the day-to-day management of their companies to their Chief Executive Officer and Managing Director respectively, who is in each case supported by a number of management committees.

The Company has established several management committees to develop enterprise level risk management guidelines, policies and procedures for the Company’s insurance and reinsurance subsidiaries that are tailored to their respective businesses, providing multiple levels of review, analysis and control.

The Company has established several management committees to develop enterprise level risk management guidelines, and policies and procedures for the Company’s insurance and reinsurance subsidiaries that are tailored to their respective businesses, providing multiple levels of review, analysis and control.

The Company’s management committees responsible for risk management include:

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It implements specific underwriting procedures and limits for the Company and allocates underwriting capacity among the Company’s subsidiaries.

All transactions in new asset classes or new jurisdictions, or otherwise outside the Company’s Board-approved risk appetite statement or risk limits, must be approved by this committee.

• Risk Management Committees —The U.S., AG Re and AGRO risk management committees and the European Insurance Subsidiaries Surveillance Committees conduct an in-depth review of the insured portfolios of the relevant subsidiaries, focusing on varying portions of the portfolio at each meeting.

They review and may revise internal ratings assigned to the insured transactions and review sector reports, monthly product line surveillance reports and compliance reports.

The European Insurance Subsidiaries Executive Risk Committees are responsible for assisting the risk oversight committees of their respective board of directors in the management of risk and

oversight of their respective company’s risk management framework and processes.

All transactions in new asset classes or new jurisdictions, or otherwise outside the Company’s Board-approved risk appetite statement or its risk limits, must be approved by this committee.

• Risk Management —Each insurance subsidiary has a committee responsible for conducting an in-depth review of the insured portfolios of the relevant subsidiaries, focusing on varying portions of the portfolio at each meeting.

These committees review and may revise internal ratings assigned to the insured transactions and review sector reports, monthly product line surveillance reports and compliance reports, and are responsible for assisting in the management of risk and oversight of their respective company’s risk management framework and processes.

This includes monitoring their respective company’s compliance with risk strategy, risk appetite, risk limits, as well as overseeing and challenging their respective company’s risk management and compliance functions.

In carrying out its responsibilities, each of the risk management committees considers numerous factors that could impact their insured portfolios, including macroeconomic factors, long term trends and climate change.

• Workout Committee —This committee receives reports from surveillance and workout personnel on insurance transactions at AGM and/or AGC that might benefit from active loss mitigation or risk reduction and approves loss mitigation or risk reduction strategies for such transactions.

• Reserve Committees —Oversight of reserving risk is vested in the U.S.

Reserve Committee, the European Insurance Subsidiaries Executive Risk Committees, the AG Re Reserve Committee and the AGRO Reserve Committee.

The committees review the reserve methodology and assumptions for each major asset class or significant below-investment-grade (BIG) transaction, as well as the loss projection scenarios used and the probability weights assigned to those scenarios.

The reserve committees establish reserves for the relevant subsidiaries, taking into consideration supporting information provided by surveillance personnel, and are responsible for approving changes to assumptions that have a significant impact on expected losses.

• Assumptions Committee – The Assumptions Committee is responsible for setting the assumptions, other than assumptions related to BIG exposures that use transaction-specific models within the scope of the Reserve Committees, used to calculate the Company’s probability of default and loss in various portfolio loss scenario and economic capital models.

When setting these assumptions, the committee considers relevant historical internal and external experience and any potential changes to market conditions that could affect these parameters going forward.

• Workout Committee —This committee receives reports from surveillance and workout personnel on transactions insured by the Company that might benefit from active loss mitigation or risk reduction and approves loss mitigation or risk reduction strategies for such transactions.

• Reserve Committees —Each insurance subsidiary has a committee responsible for oversight of reserves for insured obligations.

The reserve committees review the reserve methodology and assumptions for each major asset class

or significant below-investment-grade (BIG) transaction, as well as the loss projection scenarios used and the probability weights assigned to those scenarios.

The reserve committees establish reserves for their respective insurance subsidiaries, taking into consideration supporting information provided by surveillance and portfolio analytics personnel, and are responsible for approving changes to assumptions that have a significant impact on expected losses.

• Assumptions Committees —The insurance subsidiaries have committees responsible for setting the assumptions, other than assumptions related to BIG exposures that use transaction-specific models within the scope of the reserve committees, used to calculate the Company’s probability of default and loss in various portfolio loss scenario and economic capital models.

When setting these assumptions, each committee considers relevant historical internal and external experience and any potential changes to market conditions that could affect these parameters going forward.

In addition, management and the boards of the Company’s subsidiaries evaluate alternative investments prior to committing any funds to such investments.

In the case of the U.S.

Insurance Subsidiaries, the boards have delegated the approval of alternative investments to investment committees consisting of directors who are the insurers’ Chief Investment Officer, Chief Executive Officer, Chief Operating Officer and Chief Financial Officer;

the activities of the investment committees are further reviewed by the insurers’ full board of directors.

In the case of AG, the board has delegated the approval of alternative investments to an investment committee consisting of directors who are the insurer’s Chief Investment Officer, Chief Executive Officer, Chief Operating Officer and Chief Financial Officer;

the activities of the investment committee are further reviewed by the insurer’s full board of directors.

Enterprise Risk Management

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The internal audit function (Internal Audit) provides independent assurance around effective risk management design and control execution.

On a quarterly basis, or more frequently when required, Internal Audit reports its findings directly to the Audit Committee of the Board of Directors and informs the Chief Executive Officer and other senior management of any material issues.

On a quarterly basis, or more frequently when required, Internal Audit reports its findings directly to the Audit Committee of the Board and informs the Chief Executive Officer and other senior management of any material issues identified during their audits.

The Company has established an enterprise level risk appetite statement, approved by the Board, and risk limits, that govern the Company’s risk-taking activities, with similar documents governing the activities of each operating subsidiary.

Risk management personnel monitor a variety of key risk indicators on an ongoing basis and work with the business units to take the appropriate steps to manage the Company’s established risk appetites and tolerances.

Risk management also uses an internally developed economic capital model to project potential ultimate losses in the insured portfolio as well as on alternative investments, and analyze the related capital implications for the Company, and performs stress and scenario testing to both validate model results and assess the potential financial impact of emerging risks and major strategic initiatives such as acquisitions or releases of capital.

Quarterly risk reporting keeps management and the Board and its Risk Oversight Committee, senior management, the business units and functional areas informed about material risk-related developments.

Risk management also performs stress and scenario testing to both validate model results and assess the potential financial impact of emerging risks and major strategic initiatives such as acquisitions or releases of capital.

Quarterly risk reporting keeps the Board, its Risk Oversight Committee and senior management informed about material risk-related developments.

At least once each year, risk management personnel prepare an Own Risk and Solvency Assessment for the Company as a whole and each of the operating companies (Commercial Insurer Solvency Self-Assessment for AG Re and AGRO) which reports the results of capital modeling, the status of key risk indicators and any emerging risks to the Risk Oversight Committee.

In addition, the Company performs in-depth reviews annually of risk topics of interest to management and the Board.

To the extent potentially significant

business activities or operational initiatives are considered, the Chief Risk Officer analyzes the possible impact on the Company’s risk profile and capital adequacy.

To the extent potentially significant business activities or operational initiatives are considered, the Chief Risk Officer analyzes the possible impact on the Company’s risk profile and capital adequacy.

Surveillance of Insured Transactions

The Company’s surveillance personnel are responsible for monitoring and reporting on the performance of each risk in its insured portfolio, including exposures in both the financial guaranty direct and assumed businesses, and tracking aggregation of risk.

The Company’s surveillance personnel are responsible for monitoring and reporting on the performance of each risk in its insured portfolio and tracking aggregation of risk.

The primary objective of the surveillance process is to monitor trends and changes in transaction credit quality, detect any deterioration in credit quality, change or affirm ratings during reviews, and recommend remedial actions to management.

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The Company monitors its insured portfolio and refreshes its internal credit ratings on individual exposures in quarterly, semi-annual or annual review cycles based on the Company’s view of the exposure’s quality, loss potential, volatility and sector.

Ratings on exposures in sectors identified as under the most stress or with the most potential volatility are reviewed every quarter, although the Company may also review a rating in response to developments impacting the credit when a ratings review is not scheduled.

Ratings on exposures in sectors identified as

under the most stress or with the most potential volatility are reviewed every quarter, although the Company may also review a rating in response to developments impacting the credit when a ratings review is not scheduled.

The review cycle and scope vary based upon transaction type and credit quality.

In general, the review process includes the collection and analysis of information from various sources, including trustee and servicer reports, performance reports from Intex (a commercially available structured finance reporting system), financial statements, general industry or sector news and analyses, and rating agency reports.

For public finance risks, the surveillance process includes monitoring general economic trends, developments with respect to state and municipal finances, regulatory changes, environmental trends, and the financial situation of the issuers.

For structured finance transactions, the surveillance process can include monitoring transaction performance data and cash flows, compliance with transaction terms and conditions, and evaluation of servicer or collateral manager performance and their financial condition.

Additionally, the Company uses various quantitative tools, scorecards and models to assess transaction performance and identify situations where there may have been a change in credit quality.

Surveillance activities may include discussions with or site visits to issuers, servicers, collateral managers or other parties to a transaction.

Surveillance may adopt augmented procedures in response to various events, as it has done in response to the COVID-19 pandemic, major hurricanes or floods, and the transition away from the London Interbank Offered Rate (LIBOR) as a reference rate.

Surveillance may adopt augmented procedures in response to various events, as it has done in response to the COVID-19 pandemic, major natural disasters, and the transition away from the London Interbank Offered Rate as a reference rate.

For transactions that the Company has assumed, the ceding insurers are generally responsible for conducting ongoing surveillance of the exposures that have been ceded to the Company.

The Company’s surveillance personnel monitor the ceding insurer’s surveillance activities on exposures ceded to the Company through a variety of means, including reviews of surveillance reports provided by the ceding insurers, and meetings and discussions with their analysts.

For public finance risks, the Company’s surveillance personnel independently review assumed exposure utilizing the same procedures as applied to the Company’s direct exposures.

The Company’s surveillance personnel also monitor transaction performance (for structured finance and infrastructure transactions), general news and information, industry trends and rating agency reports to help focus surveillance activities on sectors or exposures of particular concern.

For certain assumed exposures, the Company provides surveillance and, in such cases, does so in a manner consistent with its own direct portfolio, including by undertaking an independent analysis and remodeling of the exposure.

The Company’s surveillance personnel also take steps to ensure that the ceding insurer is managing the risk pursuant to the terms of the applicable reinsurance agreement.

The Company has personnel drawn from its surveillance, risk management, legal and other functions who are responsible for managing workout, loss mitigation and risk reduction situations.

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They also engage in negotiation discussions with transaction participants and, when necessary, manage (along with legal personnel) the Company’s litigation proceedings.

They may also make open market or negotiated purchases of securities that the Company has insured, or negotiate or otherwise implement consensual terminations of insurance coverage prior to contractual maturity.

They may also make open market or negotiated purchases of securities that the Company has insured, negotiate or otherwise implement consensual terminations of insurance coverage prior to contractual maturity, or engage in other loss mitigation strategies.

In addition, the Company’s surveillance personnel work with servicers of RMBS transactions to enhance their performance.

Asset Management and Alternative Investments

Until July 1, 2023, the Company’s Asset Management segment personnel were responsible for quantifying, analyzing and reporting the risks of each asset management fund and ensuring adherence to agreed investor mandates.

retained certain former Asset Management personnel to work with other risk personnel (together the investment team) to monitor the Company's investment in Sound Point, Sound Point funds and other alternative investments.

Investment team personnel are responsible for the evaluation and due diligence processes for proposed new investments, and submit recommended investment actions to management or the Investment Committee in accordance with the Company's investment procedures.

Investment team members monitor existing investments and provide periodic reporting at least quarterly to senior management, the AGL Board and the AGL Board's Risk Oversight and Finance Committees .

The Company’s investment management personnel and other risk personnel (together the investment team) monitor the Company's ownership interest in Sound Point, and investments in Sound Point funds and other alternative investments.

Investment team personnel are responsible for the evaluation and due diligence processes for proposed new investments, and submit recommended investment actions to management, the boards of directors of the insurance subsidiaries, or AG’s investment committee in accordance with the Company's investment procedures.

Investment team members monitor existing investments and provide periodic reporting at least quarterly to senior management, AGL’s Board and the Board's Risk Oversight and Finance Committees .

Data Protection

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jurisdictions that require financial institutions and other businesses to protect personal and other sensitive information and provide notice of their privacy and security practices relating to the collection, disclosure and other processing of personal information.

The Company is also subject to local, state, and national laws and regulations in the U.S., U.K., EEA, and other non-U.S.

jurisdictions that require notification to affected individuals and regulators regarding data security breaches.

The Company is also subject to local, state, and national laws and regulations in various jurisdictions in which it does business that require notification to affected individuals and regulators regarding data security breaches.

To address these requirements, the Company has established and implemented policies and procedures that are intended to protect the privacy and security of personal information that comes into the Company’s possession or control, and to comply with applicable laws and regulations.

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The Company has imposed similar requirements, as applicable, on third parties with whom it shares personal information including through a rigorous vendor selection and management process.

The Company engages its personnel and strives to enhance data privacy and security awareness through Company training, which is mandatory for all employees globally on an annual basis.

Climate Change Risk

The Company engages its

personnel and strives to enhance data privacy and security awareness through Company training, which is mandatory for all employees globally on an annual basis.

Cybersecurity.

Changing Climate Risks

The Company has long considered environmental impacts as part of its underwriting process, in particular with regard to U.S.

public finance transactions.

Global awareness of climate change has drawn greater attention to the financial implications and long-term consequences of frequent or severe natural disaster perils (e.g., storms and wildfires).

As a financial guarantor of municipal and structured finance transactions, the Company does not have direct insurance exposure to natural perils but does face the risk that its obligors’ ability to pay debt service may be impacted as a result of such perils and the exacerbating effect climate change may have on them.

Global awareness of changing climate conditions and weather patterns has drawn greater attention to the financial implications and long-term consequences of frequent or severe natural disaster perils (e.g., storms and wildfires).

The Company continues to enhance its approach to the consideration of climate risk in the origination, underwriting, credit approval, and surveillance of its insured exposures and has integrated climate risk into its risk management and control functions.

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Specifically, the vulnerability of obligors is evaluated with respect to climatic changes (e.g., sea level rise, droughts), extreme weather events (e.g., hurricanes, tornadoes, floods) or geological events (e.g., earthquakes, volcanic activity) as well as resilience factors (e.g., mitigation capabilities, adaptation capacity) to determine if such environmental issues could materially impact an obligor’s expected performance.

The Company’s assessment of how climate change-driven risks may impact a prospective obligor’s ability to pay debt service is informed by its extensive experience in municipal finance coupled with proprietary analytics and third-party data and insights.

To improve the Company’s understanding of climate change and to develop the analytical tools needed to measure and manage the related financial risks, the Company has been investing in both talent and technology.

The Company’s assessment of how climate risks may impact a prospective obligor’s ability to pay debt service is informed by its extensive experience in municipal finance coupled with proprietary analytics and third-party data and insights.

To improve the Company’s understanding of changing climate conditions and to develop the analytical tools needed to measure and manage the related financial risks, the Company has been investing in both talent and technology.

The Company’s risk management resources include climate science expertise.

In addition, a dedicated internal team works with a geospatial data analytics company specializing in climate change/risk analysis and its effect on cities, counties, and states, to develop analytical capabilities to evaluate climate risk and assess potential negative impacts that climate change could have on the proposed obligor’s ability to pay debt service.

The Company is also exposed indirectly to climate change trends and events that might impair the performance of securities in its investment portfolio.

In addition, a dedicated internal team works with a data analytics company specializing in climate risk analysis and the impact of extreme weather events on cities, counties, and states to develop analytical capabilities to evaluate climate risk and assess potential negative impacts that climate change could have on the proposed obligor’s ability to pay debt service.

The Company is also exposed indirectly to climate trends and extreme weather events that might impair the performance of securities in its investment portfolio.

The portfolio consists predominantly of fixed-maturity securities.

Nevertheless, environmental issues, including regulatory changes, changes in supply or demand characteristics of fuels, and extreme weather events, may impact the value of certain securities.

In 2016, the Company determined not to make any new investments in thermal coal enterprises.

In fourth quarter of 2019, the Company revised its investment guidelines to incorporate material environmental factors into its investment analysis to enhance the quality of investment decisions.

On an annual basis, the

Company requests and reviews reports from its primary investment managers on any material non-financial risks (including vulnerability to climate change risks or exposure to extreme weather events) that may adversely impact returns.

The investment guidelines incorporate material environmental factors into the investment analysis to enhance the quality of investment decisions.

On an annual basis, the Company requests and reviews reports from its primary investment managers on any material non-financial risks (including vulnerability to climate risks or exposure to extreme weather events) that may adversely impact returns.

The Company believes that the physical effects of climate change on the Company’s business operations are not likely to be material and the Company does not anticipate capital expenditures for climate related projects.

Regulatory Reporting .

As the global community moves to address and mitigate the effects of climate change, regulators across jurisdictions have taken steps to require climate change risk management and related reporting.

Several of the Company’s subsidiaries are subject to regulatory reporting with respect to managing and disclosing the impact of climate change and the related financial risks.

As the global community moves to address and mitigate the effects of climate change, regulators across jurisdictions have taken steps to require climate risk management and related reporting.

Several of the Company’s subsidiaries are subject to regulatory reporting with respect to managing and disclosing the impact of changing climate conditions and the related financial risks.

The Company continues to monitor regulatory developments and meet requirements applicable to its subsidiaries.

To date, the costs associated with complying with regulatory reporting obligations have not had a material impact on the Company’s business, financial condition, and results of operations.

The Environmental and Social Responsibility Committee and the Risk Oversight Committee of AGL’s Board of Directors, each consisting solely of independent directors, provide oversight of the Company's approach to addressing climate change risk in accordance with their respective charters.

The Environmental and Social Responsibility Committee and the Risk Oversight Committee of AGL’s Board, each consisting solely of independent directors, provide oversight of the Company's approach to addressing climate change risk in accordance with their respective charters.

The Environmental and Social Responsibility Committee reviews updates on the consideration of environmental risks in the Company’s insurance risk management and its investment portfolio, as well as legislative and regulatory developments of significance to the Company’s environmental initiatives and related oversight.

The Risk Oversight Committee reviews the establishment and implementation of enterprise risk management policies and practices.

At the operating company level, the AGM, AGC, AG Re and AGRO boards of directors review environmental risk reports at each of their quarterly meetings.

The Chief Risk Officer is designated as the AGM, AGC, AG Re and AGRO board member and member of senior management responsible for overseeing the management of climate risks.

In addition, the boards of AGUK and AGE have responsibility for overseeing the management of climate risks and compliance with environmental laws and regulations in those jurisdictions.

The Company has also formed an environmental risk working group composed of senior members of the Company’s credit, underwriting, surveillance, and risk management departments, to review the impact of environmental risk on the Company, including the development of objective risk measures, metrics and methodologies needed to evaluate the financial impact of climate change on obligors in its insured portfolio on both aggregate and individual risk levels.

The Company’s operations and significant investments are regulated by various regulatory authorities, including insurance, securities, derivatives and investment advisory.

The insurance and financial services industries generally have been subject to heightened regulatory scrutiny and supervision since the financial crisis that began in 2008.

The Company and other significant investments are subject to insurance-related and asset management-related statutes, regulations and supervision by the U.S.

The Company has also formed an environmental risk working group composed of senior members of the Company’s credit, underwriting, surveillance, and risk management departments to review the impact of environmental risk on the Company, including the development of objective risk measures, metrics and methodologies needed to evaluate the financial impact of evolving climate conditions and extreme weather events on obligors in its insured portfolio on both aggregate and individual risk levels.

The Company is a public company subject to SEC rules and regulations, and is also subject to insurance-related statutes, regulations and supervision by the U.S.

states and territories and the non-U.S.

jurisdictions in which they do business.

jurisdictions in which it does business.

The degree and type of regulation varies from one jurisdiction to another.

We expect that the U.S.

regulations applicable to the Company and its regulated entities will continue to evolve for the foreseeable future.

In addition, from July 1, 2023, following the Sound Point Transaction, the Company participates in the asset management business through its ownership interest in Sound Point, which is a registered investment adviser with the SEC and subject to asset management-related statutes and regulations.

The Company expects that the statutes and regulations applicable to the Company and to Sound Point will continue to evolve for the foreseeable future.

United States Regulation

Insurance and Financial Services Regulation

AGL has two operating insurance subsidiaries domiciled in the U.S., which the Company refers to collectively as the U.S.

Insurance Subsidiaries.

• AGM is a New York domiciled insurance company licensed to write financial guaranty insurance and reinsurance in 50 U.S.

states, the District of Columbia, Guam, Puerto Rico and the U.S.

Virgin Islands.

• AGC is a Maryland domiciled insurance company licensed to write financial guaranty insurance and reinsurance in 50 U.S.

AGL has one insurance subsidiary domiciled in the U.S., AG, a Maryland domiciled insurance company licensed to write financial guaranty insurance and reinsurance in 50 U.S.

states, the District of Columbia and Puerto Rico.

Insurance Holding Company Regulation

Insurance Subsidiaries are subject to the insurance holding company laws of their respective jurisdictions of domicile, as well as other jurisdictions where these insurers are licensed to do insurance business.

These laws generally require each of the U.S.

Insurance Subsidiaries to register with its domestic state insurance department and annually to furnish financial and other information about the operations of companies within its holding company system.

Generally, all transactions among companies in the holding company system to which any of the U.S.

Insurance Subsidiaries is a party (including sales, loans, reinsurance agreements and service agreements) must be fair, reasonable and equitable, and, if material or of a specified category, such as reinsurance or service agreements, require prior notice to and approval or non-disapproval by the insurance department where the applicable subsidiary is domiciled.

AG is subject to the insurance holding company laws of Maryland, its domiciliary jurisdiction, as well as other jurisdictions where it is licensed to do insurance business.

These laws generally require AG to register with MIA and annually to furnish financial and other information about the operations of companies within its holding company system.

Generally, all transactions among companies in the holding company system to which AG is a party (including sales, loans, reinsurance agreements and service agreements) must be fair, reasonable and equitable, and, if material or of a specified category, such as reinsurance or service agreements, require prior notice to and approval or non-disapproval by the MIA.

Change of Control

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Generally, state statutes provide that control over a domestic insurer is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more of the voting securities of such insurer.

Because a person acquiring 10% or more of AGL’s common shares would indirectly control the same percentage of the stock of our U.S.

Insurance Subsidiaries, the insurance change of control laws of Maryland and New York would likely apply to such acquisition.

Accordingly, a person acquiring 10% or more of AGL’s common shares must either file disclaimers of control of our U.S.

Insurance Subsidiaries with the insurance commissioners of the States of Maryland and New York or apply to acquire control of such subsidiaries with such insurance commissioners.

Because a person acquiring 10% or more of AGL’s common shares would indirectly control the same percentage of the stock of AG, the insurance change of control laws of Maryland would likely apply to such acquisition.

Accordingly, a person acquiring 10% or more of AGL’s common shares must either file a disclaimer of control of AG with the insurance commissioner of the State of Maryland (the Maryland Commissioner) or apply to acquire control of AG with the Maryland Commissioner.

However, this presumption does not create a safe harbor for acquisitions below the 10% threshold, which may still result in a control determination.

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Moreover, a control relationship can arise from a contract or other factors, in the absence of any ownership of voting securities of an insurer.

Prior to approving an application to acquire control of a domestic insurer, each state insurance commissioner will consider factors such as the financial strength of the applicant, the integrity and management of the applicant’s board of directors and executive officers, the applicant's plans for the management of the board of directors and executive officers of the insurer, the applicant’s plans for the future operations of the insurer and any anti-competitive results that may arise from the consummation of the acquisition of control.

These laws may discourage potential acquisition proposals and may delay, deter or prevent a change of control involving AGL that some or all of AGL’s shareholders might consider to be desirable, including, in particular, unsolicited transactions.

Prior to approving an application to acquire control of a domestic insurer, the Maryland Commissioner will consider factors such as the financial strength of the applicant, the integrity and management of the applicant’s board of directors and executive officers, the applicant's plans for the management of the board of directors and executive officers of the insurer, the applicant’s plans for the future operations of the insurer and any anti-competitive results that may arise from the consummation of the acquisition of control.

These review requirements may discourage potential acquisition proposals and may delay, deter or prevent a change of control involving AGL that some or all of AGL’s shareholders might consider to be desirable, including, in particular, unsolicited transactions.

Other State Insurance Regulations

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insurance companies, including licensing these companies to transact business, “accrediting” reinsurers, determining whether assets are “admitted” and counted in statutory surplus, prohibiting unfair trade and claims practices, establishing reserve requirements and solvency standards, regulating investments and dividends and, in certain instances, approving policy forms and related materials and approving premium rates.

State insurance laws and regulations require the U.S.

Insurance Subsidiaries to file financial statements with insurance departments in every U.S.

state or jurisdiction where they are licensed, authorized or accredited to conduct insurance business, and their operations are subject to examination by those departments at any time.

Insurance Subsidiaries prepare statutory financial statements in accordance with Statutory Accounting Principles, or SAP, and procedures prescribed or permitted by these departments.

State insurance laws and regulations require AG to file financial statements with insurance departments in every U.S.

state or jurisdiction where it is licensed, authorized or accredited to conduct insurance business, and its operations are subject to examination by those departments at any time.

AG prepares statutory financial statements in accordance with Statutory Accounting Principles, or SAP, and procedures prescribed or permitted by these departments.

State insurance departments conduct periodic examinations of the books and records, financial reporting, policy filings and market conduct of insurance companies domiciled in their states, generally once every three to five years.

The NYDFS, the regulatory authority of the domiciliary jurisdiction of AGM, and the Maryland Insurance Administration, the regulatory authority of the domiciliary jurisdiction of AGC, each conducts a periodic financial examination of insurance companies domiciled in New York and Maryland, respectively, usually at five-year intervals.

In 2023, the NYDFS and the MIA last completed their joint examination of AGM and AGC.

The examinations of AGM and AGC were for the five-year period ending December 31, 2021.

The examination reports from the NYDFS and the MIA did not note any significant regulatory issues.

The MIA, the regulatory authority of the domiciliary jurisdiction of AG, conducts a periodic financial examination of insurance companies domiciled in Maryland, usually at five-year intervals.

In 2023, the MIA last completed an examination of AG.

The examination was for the five-year period ending December 31, 2021 and was a joint examination of both AG and its former affiliate, AGM, by the MIA and AGM’s domiciliary regulator, the New York State Department of Financial Services (NYDFS).

The examination reports from the MIA and the NYDFS did not note any significant regulatory issues.

State Dividend Limitations

One of the primary sources of cash for repurchases of shares and the payment of debt service and dividends by the Company is the receipt of dividends from AGM.

Under the New York Insurance Law, AGM may only pay dividends out of “earned surplus,” which is the portion of an insurer’s surplus that represents the net earnings, gains or profits (after deduction of all losses) that have not been distributed to the insurer’s shareholders as dividends, transferred to stated capital or capital surplus, or applied to other purposes permitted by law, but does not include unrealized appreciation of assets.

AGM may pay dividends without the prior approval of the NYDFS in an amount that, together with all dividends declared or distributed by it during the preceding 12 months, does not exceed the lesser of 10% of its policyholders' surplus (as of its last annual or quarterly statement filed with the NYDFS) or 100% of its adjusted net investment income during that period.

See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Insurance Subsidiaries, for the maximum amount of dividends that can be paid without regulatory approval, recent dividend history and other recent capital movements.

Another primary source of cash for repurchases of shares and the payment of debt service and dividends by the Company is the receipt of dividends from AGC.

Under Maryland’s insurance law, AGC may, with prior notice to the MIA, pay an ordinary dividend in an amount that, together with all dividends paid in the prior 12 months, does not exceed the lesser of 10% of its policyholders’ surplus (as of the prior December 31) or 100% of its adjusted net investment income during that period.

A dividend or distribution to a shareholder of AGC in excess of this limitation would constitute an “extraordinary dividend,” which must be paid out of AGC’s “earned surplus” and reported to, and approved by, the MIA prior to payment.

"Earned surplus" is that portion of AGC's surplus that represents the net earnings, gains or profits (after deduction of all losses) that have not been distributed to its shareholders as dividends or transferred to stated capital or capital surplus, or applied to other purposes permitted by law, but does not include unrealized capital gains and appreciation of assets.

AGC may not pay any dividend or make any distribution, including ordinary dividends, unless it notifies the MIA Insurance Commissioner (the Maryland Commissioner) of the proposed payment within five business days following declaration and at least ten days before payment.

The Maryland Commissioner may declare that such dividend not be paid if it finds that AGC’s policyholders’ surplus would be inadequate after payment of the dividend or the dividend could lead AGC to a hazardous financial condition.

One of the primary sources of cash for the payment of debt service by Assured Guaranty Municipal Holdings Inc.

(AGMH) and Assured Guaranty US Holdings Inc.

(AGUS) and for repurchases of shares and dividends by AGL is the receipt of dividends from AG.

Under Maryland’s insurance law, AG may pay any dividend or other distribution in an amount that, together with any other dividends or distributions paid in the prior 12 months, does not exceed the lesser of (i) 10% of its policyholders’ surplus (as of the prior December 31);

or (ii) 100% of its adjusted net investment income;

provided, that, AG notifies the Maryland Commissioner of the proposed payment within five business days following declaration and at least ten days before payment.

The Maryland Commissioner may declare that such dividend or distribution not be paid if it finds that AG’s policyholders’ surplus would be inadequate after payment or if payment could lead AG to a hazardous financial condition.

“Adjusted net investment income” means the sum of (x) AG’s net investment income during the 12-month period ending December 31 of the preceding year (excluding realized capital gains and pro rata distributions of its own securities), and (y) AG’s net investment income (excluding realized capital gains) from the three calendar years prior to the preceding calendar year that has not already been paid out as dividends.

A dividend or distribution to a shareholder of AG in excess of the foregoing limitation would constitute an “extraordinary dividend” or “extraordinary distribution,” which must be paid out of AG’s “earned surplus” and reported to, and approved by, the MIA prior to payment.

"Earned surplus" is that portion of AG’s surplus that represents the net earnings, gains or profits (after deduction of all losses) that have not been distributed to its shareholders as dividends or transferred to stated capital or capital surplus, or applied to other purposes permitted by law, but does not include unrealized capital gains and appreciation of assets.

See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Insurance Subsidiaries, for the maximum amount of dividends or other distributions that can be paid without regulatory approval, recent dividend and distribution history and other recent capital movements.

Contingency Reserves

Each of AGM, under the New York Insurance Law, and AGC, under Maryland insurance law and regulations, must establish a contingency reserve, as reported on its statutory financial statements, to protect policyholders.

The New York Insurance Law and Maryland insurance laws and regulations, as applicable, determine the calculation of the contingency reserve and the period of time over which it must be established and, subsequently, can be released.

In both New York and Maryland, releases from the insurer’s contingency reserve may be permitted under specified circumstances in the event that actual loss experience exceeds certain thresholds or if the reserve accumulated is deemed excessive in relation to the insurer's outstanding insured obligations.

From time to time, the U.S.

Insurance Subsidiaries have obtained the approval of their regulators to release contingency reserves based on losses or because the accumulated reserve is deemed excessive in relation to the insurer’s outstanding insured obligations.

In 2023, the U.S.

Insurance Subsidiaries each requested a release of accumulated contingency reserve which were deemed excessive in relation to the Company’s outstanding insured obligations.

AGM obtained the NYDFS’s approval for a contingency reserve release of approximately $54.8 million and AGC obtained the MIA’s approval for a contingency reserve release of approximately $1.2 million, which represented the assumed contingency reserves maintained by AGC, as a reinsurer of AGM, in connection with the same insured obligations that were the subject of AGM’s $54.8 million release.

Both AGM’s and AGC’s release were recorded in 2023.

Applicable New York and Maryland laws and regulations require regular, quarterly contributions to contingency reserves, but such laws and regulations permit the discontinuation of such quarterly contributions to an insurer's contingency reserves when such insurer’s aggregate contingency reserves for a particular line of business (i.e., municipal or non-municipal) exceed the sum of the insurer’s outstanding principal for each specified category of obligations within the particular line of business multiplied by the specified contingency reserve factor for each such category.

In accordance with such laws and regulations, and with the approval of the NYDFS and the MIA, respectively, AGM ceased making regular quarterly contributions to its contingency reserves for all of its non-municipal business and AGC ceased making quarterly contributions to its contingency reserves for both municipal and non-municipal business, in each case beginning in the fourth quarter of 2014.

Such cessations are expected to continue for as long as AGM and AGC satisfy the foregoing condition for their applicable line(s) of business.

AG, under Maryland insurance law and regulations, must establish a contingency reserve, as reported on its statutory financial statements, to protect policyholders.

The Maryland insurance laws and regulations determine the calculation of the contingency reserve and the period of time over which it must be established and, subsequently, can be released.

In Maryland, releases from the insurer’s contingency reserve may be permitted under specified circumstances in the event that actual loss experience exceeds certain thresholds or if the reserve accumulated is deemed excessive in relation to the insurer's outstanding insured obligations.

From time to time, AG has obtained the approval of the Maryland Commissioner to release contingency reserves based on losses or because the accumulated reserve is deemed excessive in relation to the insurer’s outstanding insured obligations.

Maryland laws and regulations require regular, quarterly contributions to contingency reserves, but such laws and regulations permit the discontinuation of such quarterly contributions to an insurer's contingency reserves when such insurer’s aggregate contingency reserves for a particular line of business (i.e., municipal or non-municipal) exceed the sum of the insurer’s outstanding principal for each specified category of obligations within the particular line of business multiplied by the

specified contingency reserve factor for each such category.

In accordance with such laws and regulations, and with the approval of the MIA, AG ceased making quarterly contributions to its contingency reserves for both municipal and non-municipal business beginning in the fourth quarter of 2014, but AG resumed its quarterly contributions to its contingency reserves for municipal business in the third quarter of 2024 due to the merger on August 1, 2024 of AGM with and into AG, with AG surviving.

The ongoing cessation of quarterly contributions to AG’s contingency reserves for non-municipal business is expected to continue for as long as AG satisfies the foregoing condition for such line of business.

Single and Aggregate Risk Limits

The New York Insurance Law and the Code of Maryland Regulations establish single risk limits for financial guaranty insurers applicable to all obligations insured by a financial guaranty insurer that are issued by a single entity and backed by a single revenue source.

The Code of Maryland Regulations establishes single risk limits for financial guaranty insurers applicable to all obligations insured by a financial guaranty insurer that are issued by a single entity and backed by a single revenue source.

For example, under the limit applicable to municipal obligations, the insured average annual debt service for a single risk, net of qualifying reinsurance and collateral, may not exceed 10% of the sum of the insurer's policyholders’ surplus and contingency reserves.

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For example, “triple-X” and “future flow” securitizations, as well as unsecured corporate obligations and unsecured investor-owned utility obligations, are generally subject to this catch-all or “other” single-risk limit.

The New York Insurance Law and the Code of Maryland Regulations also establish an aggregate risk limit on the basis of the aggregate net liability insured by a financial guaranty insurer as compared with its statutory capital.

The Code of Maryland Regulations also establishes an aggregate risk limit on the basis of the aggregate net liability insured by a financial guaranty insurer as compared with its statutory capital.

“Aggregate net liability” is defined for this purpose as the outstanding principal and interest of guaranteed obligations insured, net of qualifying reinsurance and collateral.

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The percentage varies from 0.3333% for certain municipal obligations to 4.0% for certain non-investment-grade obligations.

As of December 31, 2023, the aggregate net liability of each of AGM and AGC utilized approximately 30% and 12% of their respective policyholders’ surplus and contingency reserves.

The NYDFS Superintendent (New York Superintendent) and the Maryland Commissioner each have broad discretion to order a financial guaranty insurer to cease new business originations if the insurer fails to comply with single or aggregate risk limits.

In the Company’s experience in New York, the New York Superintendent has shown a willingness to work with insurers to address these concerns.

Insurance Subsidiaries are subject to laws and regulations that require diversification of their investment portfolios and limit the amount of investments in certain asset categories, such as BIG fixed-maturity securities, real estate, equity investments, and derivatives.

As of December 31, 2024, the aggregate net liability of AG utilized approximately 27% of its policyholders’ surplus and contingency reserves.

The Maryland Commissioner has broad discretion to order a financial guaranty insurer to cease new business originations if the insurer fails to comply with single or aggregate risk limits, but, based on the Company’s experience, is likely to show a willingness to work with AG for isolated instances of non-compliance.

AG is subject to laws and regulations that require diversification of its investment portfolio and limit the amount of investments in certain asset categories, such as BIG fixed-maturity securities, foreign investments, real estate, equity investments, and derivatives.

Failure to comply with these laws and regulations would cause investments exceeding regulatory limitations to be treated as non-admitted assets for purposes of measuring surplus, and, in some instances, would require divestiture of such non-qualifying investments.

In addition, any investment by a U.S.

Insurance Subsidiary must be authorized or approved by that insurance company’s board of directors or a committee thereof that is responsible for supervising or making such investment.

In addition, any investment by AG must be authorized or approved by its board of directors or a committee thereof that is responsible for supervising or making such investment.

Group Regulation

In connection with AGL’s establishment of tax residence in the U.K., as discussed in greater detail under “Tax Matters” below, the NYDFS has been designated as group-wide supervisor for the Assured Guaranty group.

Group-wide supervision by the NYDFS results in additional regulatory oversight over Assured Guaranty, particularly with respect to group-wide enterprise risk, and may subject Assured Guaranty to new regulatory requirements and constraints.

In connection with AGL’s establishment of tax residence in the U.K., as discussed in greater detail under “Tax Matters” below, the MIA has been designated as group-wide supervisor for the Assured Guaranty group.

Group-wide supervision by the MIA results in additional regulatory oversight over Assured Guaranty, particularly with respect to group-wide enterprise risk, and may subject Assured Guaranty to new regulatory requirements and constraints.

Credit for Reinsurance Requirements for Non-U.S.

Reinsurance Subsidiaries

The Company’s Bermuda reinsurance subsidiaries, AG Re and AGRO, are affected by regulatory requirements in various U.S.

states governing the ability of a ceding company domiciled in the state to receive credit on its statutory financial statements for reinsurance provided by a reinsurer.

In general, under such requirements, a ceding company that obtains reinsurance from a reinsurer that is licensed, accredited or approved by the ceding company’s state of domicile is permitted to reflect in its statutory financial statements a credit in an aggregate amount equal to the ceding company's liability for unearned premiums (which are that portion of premiums written which applies to the unexpired portion of the policy period), and loss and LAE reserves ceded to the reinsurer.

The substantial majority of states, however, also permit a credit on the statutory financial statements of a ceding insurer for reinsurance obtained from a non-licensed or non-accredited reinsurer to the extent that the reinsurer secures its reinsurance obligations to the ceding insurer by providing collateral in the form of a letter of credit, trust fund or other acceptable security arrangement.

Certain of those states also permit such non-licensed/non-accredited reinsurers that meet certain specified requirements to apply for “certified reinsurer” status.

If granted, such status allows the certified reinsurer to post less than 100% collateral (the exact percentage depends on the certifying state's view of the reinsurer's financial strength) and the applicable ceding company will still qualify, on the basis of such reduced collateral, for full credit for reinsurance on its statutory financial statements with respect to reinsurance contracts renewed or entered into with the certified reinsurer on or after the date the reinsurer becomes certified.

Certain states have eliminated the reinsurance collateral requirements for unauthorized reinsurers in certain qualifying jurisdictions that (i) meet specified requirements, such as minimum capital and surplus amounts and minimum solvency or capital ratios, and (ii) provide certain commitments to the ceding insurer’s domiciliary state, such as submission to such state’s jurisdiction and the filing of annual audited financial statements with the state.

A few states do not allow credit for reinsurance ceded to non-licensed reinsurers except in certain limited circumstances and others impose additional requirements that make it difficult to become accredited.

The Company’s Bermuda reinsurance subsidiaries, AG Re and AGRO, may be affected by regulatory requirements in the 50 U.S.

states, District of Columbia, American Samoa, Guam, Northern Marianas, Puerto Rico, and U.S.

Virgin Islands (collectively, NAIC Jurisdictions) governing the ability of a ceding company to receive credit on its statutory financial statements for reinsurance provided by a reinsurer.

In general, under such requirements, a ceding company that obtains reinsurance from a reinsurer that is licensed, accredited or approved by the ceding company’s state jurisdiction of domicile is permitted to reflect in its statutory financial statements a credit in an aggregate amount equal to the ceding company's liability for unearned premiums (which are that portion of premiums written which applies to the unexpired portion of the policy period), and loss and LAE reserves ceded to the reinsurer.

NAIC Jurisdictions, however, generally also permit a credit on the statutory financial statements of a ceding insurer for reinsurance obtained from a non-licensed or non-accredited reinsurer to the extent that the reinsurer secures its reinsurance obligations to the ceding insurer by providing collateral in the form of a letter of credit, trust fund or other acceptable security arrangement.

Certain of those jurisdictions also permit such non-licensed/non-accredited reinsurers that meet certain specified requirements to apply for “certified reinsurer” status.

If granted, such status allows the certified reinsurer to post less than 100% collateral (the exact percentage depends on the certifying jurisdiction’s view of the reinsurer's financial strength) and the applicable ceding company will still qualify, on the basis of such reduced collateral, for full credit for reinsurance on its statutory financial statements with respect to reinsurance contracts renewed or entered into with the certified reinsurer on or after the date the reinsurer becomes certified.

Each NAIC Jurisdiction has adopted laws and regulations allowing for the elimination of reinsurance collateral requirements for unauthorized reinsurers in qualifying non-U.S.

jurisdictions that (i) meet specified requirements, such as minimum capital and surplus amounts and minimum solvency or capital ratios, and (ii) provide certain commitments to the ceding insurer’s domiciliary regulator, such as submission to jurisdiction and the filing of annual audited financial statements.

AG Re and AGRO are not licensed, accredited or approved in any state and have established trusts to secure their reinsurance obligations.

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Regulation of Swap Transactions Under Dodd-Frank

The Company’s U.S.

insurance businesses are subject to direct and indirect regulation under U.S.

In particular, their derivatives activities are directly and indirectly subject to a variety of regulatory requirements under the Dodd- Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

Based on the size of its U.S.

Insurance Subsidiaries’ derivatives portfolios, AGL does not believe any of the U.S.

subsidiaries are required to register with the Commodity Futures Trading Commission (CFTC) as a “major swap participant” or with the SEC as a “major securities-based swap participant.” Certain of the Company's subsidiaries may be subject to Dodd-Frank Act requirements to post margin for, or to clear on a regulated execution facility, future swap transactions or with respect to certain amendments to legacy swap transactions, if they enter into such transactions.

AG is subject to direct and indirect regulation under U.S.

In particular, its derivatives activities are directly and indirectly subject to a variety of regulatory requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

Based on the size of AG’s derivatives portfolios, AGL does not believe AG is required to register with the Commodity Futures Trading Commission as a “major swap participant” or with the SEC as a “major securities-based swap participant.” Certain of the Company's subsidiaries may be subject to Dodd-Frank Act requirements to post margin for, or to clear on a regulated execution facility, future swap transactions or with respect to certain amendments to legacy swap transactions, if they enter into such transactions.

Regulation of U.S.

Asset Management Business

Prior to July 2023, AGL had two principal operating asset management subsidiaries domiciled in the U.S.:

AssuredIM LLC (now known as Sound Point Luna LLC) and AHP.

AssuredIM LLC is registered as an investment adviser with the SEC and is currently owned by Sound Point, LP.

AssuredIM LLC was also previously registered with the CFTC as a commodity pool operator and was a member of the National Futures Association, and deregistered in June 2023, shortly prior to the Sound Point Transaction.

AHP was launched in 2020 as a relying adviser of AssuredIM LLC and became independently registered with the SEC in March 2023.

AHP is now independently owned by an entity owned and controlled by its managing partner.

Beginning July 1, 2023, following the Sound Point Transaction, the Company participates in the asset management business through its ownership interest in Sound Point, which is registered as an investment adviser with the SEC.

Registered investment advisers are subject to the requirements and regulations of the U.S.

Investment Advisers Act of 1940, as amended

(the Advisers Act).

Since July 1, 2023, following the Sound Point Transaction, the Company participates in the asset management business through its ownership interest in Sound Point.

The Company is an approximately 30% owner of Sound Point, does not control the business, management or policies of Sound Point and relies upon Sound Point to make appropriate decisions and operate in a manner consistent with applicable rules and regulations.

Sound Point is registered as an investment adviser with the SEC and is subject to the requirements and regulations of the U.S.

Investment Advisers Act of 1940, as amended (the Advisers Act).

As a registered investment adviser, Sound Point, LP and certain other Sound Point entities must submit periodic filings with the SEC on Forms ADV, which are publicly available.

The Advisers Act also imposes additional requirements on registered advisers, including the maintenance of a Code of Ethics addressing potential conflicts of interest, an effective compliance program, recordkeeping and reporting, disclosure, limitations on cross and principal transactions between an adviser and its advisory clients and general anti-fraud prohibitions.

In addition, private funds advised by Sound Point rely on exemptions from various requirements of the Securities Act, the Exchange Act, the U.S.

Investment Company Act of 1940, as amended, the Commodity Exchange Act and the U.S.

Employee Retirement Income Security Act of 1974, as amended.

Furthermore, private funds advised by Sound Point rely on exemptions from various requirements of the Securities Act, the Exchange Act, the U.S.

Investment Company Act of 1940, as

amended (the Investment Company Act), the Commodity Exchange Act and the U.S.

Employee Retirement Income Security Act of 1974, as amended (ERISA).

In addition, registered investment companies advised by Sound Point are subject to the requirements of the Securities Act, the Exchange Act and the Investment Company Act and rely on exemptions from the Commodity Exchange Act and ERISA.

A portion of the Company’s business is conducted in non-U.S.

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AGL, as a Bermuda-domiciled holding company, is also subject to shareholding restrictions.

Such shareholding restrictions of AGL and restrictions on changes in control of our foreign operations may discourage potential acquisition proposals and may delay, deter or prevent a change of control of AGL, including through transactions, and, in particular, unsolicited transactions, that some or all of its shareholders might consider to be desirable.

Risk Factors, Risks Related to GAAP, Applicable Law and Regulations captioned “Applicable insurance laws may make it difficult to effect a change of control of AGL.”

Such shareholding restrictions of AGL and restrictions on changes in control of our non-U.S.

operations may discourage potential acquisition proposals and may delay, deter or prevent a change of control of AGL, including through transactions, and, in particular, unsolicited transactions, that some or all of its shareholders might consider to be desirable.

Risk Factors, Risks Related to Applicable Law, Litigation and GAAP, captioned “Applicable insurance laws may make it difficult to effect a change of control of AGL.”

The Bermuda Monetary Authority (the Authority) regulates the Company’s operating insurance and reinsurance subsidiaries in Bermuda.

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AG Re is registered and licensed as a Class 3B insurer and is authorized to carry on general insurance business (as understood under the Insurance Act), subject to any conditions attached to its license and to compliance with the requirements imposed by the Insurance Act.

AGRO is registered and licensed as both a Class 3A insurer and a Class C long-term insurer, and therefore carries on both general and long-term business (as understood under the Insurance Act), subject to any conditions attached to its license.

In particular, AGRO must keep its accounts in respect of its general business and its long-term business separate in respect of any other business.

AGRO is required to maintain both a general business fund and a long-term business fund (as defined in the Insurance Act.)

AGRO is registered and licensed as both a Class 3A insurer and a Class C long-term (life) insurer, and therefore carries on both general and long-term (life) business (as understood under the Insurance Act), subject to any conditions attached to its license.

In particular, AGRO must keep its accounts in respect of its general business and its long-term (life) business separate in respect of any other business.

AGRO is required to maintain both a general business fund and a long-term (life) business fund (as defined in the Insurance Act.)

Bermuda Insurance Regulation

The Insurance Act, as enforced by the Authority, imposes on AG Re and AGRO a variety of requirements and restrictions, including the filing of annual GAAP financial statements and audited statutory financial statements;

The Insurance Act, as enforced by the Authority, imposes on AG Re and AGRO a variety of requirements and restrictions, including the filing of annual U.S.

GAAP financial statements and audited statutory financial statements;

compliance with minimum enhanced capital requirements;

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The Insurance Act limits the declaration and payment of dividends by AG Re and AGRO, including by prohibiting each company from declaring or paying any dividends during any financial year if it is in breach of its prescribed minimum solvency margin, minimum liquidity ratio or enhanced capital requirement, or if the declaration or payment of such dividends would cause such a breach.

Dividends are paid out of each insurer's statutory surplus and, therefore, dividends cannot exceed such surplus.

Dividends cannot exceed an insurer’s current outstanding statutory surplus.

In accordance with the Insurance Act, AG Re and AGRO may declare or pay in any financial year dividends of up to 25% of its total statutory capital and surplus (as shown on its previous financial year’s statutory balance sheet) without seeking prior approval from the Authority.

AG Re and AGRO dividend declarations or payments in excess of this 25% threshold in any financial year are prohibited without certification to the Authority that the Company will continue to meet its relevant margins.

The Insurance Act also prohibits AGRO, as a Class C licensed insurer writing long-term (life) business, from declaring or paying any dividends to any person other than a policyholder unless its approved actuary certifies that the proposed amount of the dividend would not exceed the excess of funds available to satisfy its long-term (life) business obligations.

Further, AG Re and AGRO are permitted to make capital distributions of up to 15% of its prior year statutory capital (as shown in its previous financial year statutory balance sheet).

AG Re and AGRO must obtain the Authority’s prior approval before making capital distributions in excess of the 15% threshold.

See “Minimum Solvency Margin and Enhanced Capital Requirements” above and “Minimum Liquidity Ratio” below.

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Although AGL is incorporated in Bermuda, it is classified as a non-resident of Bermuda for exchange control purposes by the Authority.

Pursuant to its non-resident status, AGL may engage in transactions in currencies other than Bermuda dollars and there are no restrictions on its ability to transfer funds (other than funds denominated in Bermuda dollars) in and out of Bermuda or to pay dividends to U.S.

Pursuant to its non-resident status, AGL may engage in transactions in currencies other than Bermuda dollars

and there are no restrictions on its ability to transfer funds (other than funds denominated in Bermuda dollars) in and out of Bermuda or to pay dividends to U.S.

residents who are holders of its common shares.

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AGFOL, as an insurance intermediary, is regulated by the FCA.

AGFOL’s permissions from the FCA allow it to introduce business to the U.S.

Insurance Subsidiaries, so that AGFOL can arrange financial guaranties underwritten by the U.S.

Insurance Subsidiaries.

AGFOL’s permissions from the FCA allow it to introduce business to AG, so that AGFOL can arrange financial guaranties underwritten by AG.

AGFOL is not authorized as an insurer and does not itself take risk in the transactions it arranges or places.

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Its risk assessment framework looks at the insurer’s risk context, the potential impact of failure of the insurer and mitigating factors.

AGUK calculates its minimum required capital according to the Solvency II criteria and is in compliance.

AGUK calculates its minimum required capital according to the solvency criteria applicable in the UK and is in compliance.

Regulatory Requirements

In 2010, it was agreed between AGUK’s management and its then regulator, the Financial Services Authority (now the PRA), that new business written by AGUK would be guaranteed using a co-insurance structure pursuant to which AGUK would co-insure municipal and infrastructure transactions with AGM and structured finance transactions with AGC.

AGUK's financial guaranty for each transaction covers a proportionate share (currently fixed from 2018 at 15%) of the total exposure, and AGM or AGC, as the case may be, guarantees the remaining exposure under the transaction.

AGM or AGC, as the case may be, will also provide a second-to-pay guaranty to cover AGUK’s financial guaranty.

Solvency II and Solvency Requirements

In 2010, it was agreed between AGUK’s management and its then regulator, the Financial Services Authority (now the PRA), that new business written by AGUK would be guaranteed using a co-guarantee structure pursuant to which AGUK would co-guarantee municipal and infrastructure transactions with AGM and structured finance transactions with AG.

result of the merger on August 1, 2024 of AGM with and into AG, with AG surviving, the co-guarantor for both types of transactions is now AG.

AGUK’s financial guaranty for each transaction covers a proportionate share (currently fixed from 2018 at 15%) of the total exposure, and AG guarantees the remaining exposure under the transaction.

AG will also provide a second-to-pay guaranty to cover AGUK’s financial guaranty.

See “—Business—Insurance—Support of the European Insurance Subsidiaries.”

Solvency UK and Solvency Requirements

Solvency II took effect from January 1, 2016 in the U.K.

and remains in effect as part of the U.K.’s retained EU law after the withdrawal of the U.K.

from the EU (Brexit).

The reform of Solvency II as it applies in the U.K.

is currently under

consideration by the U.K.

Solvency II provides rules on capital adequacy, governance and risk management and regulatory reporting and public disclosure.

Under Solvency II, AGUK is subject to certain limits and requirements, including the maintenance of a minimum solvency capital requirement (which depends on the type and amount of insurance business a company writes and the other risks to which it is exposed) and the establishment of technical provisions, which include projected losses and premium earnings.

Failure to maintain capital at least equal to the capital requirements under Solvency II is one of the grounds on which the wide powers of intervention conferred upon the PRA may be exercised.

Among other things, Solvency II introduced a revised risk-based prudential regime which includes the following features:

(1) assets and liabilities are generally to be valued at their market value;

(2) the amount of required economic capital is intended to ensure, with a probability of 99.5%, that regulated insurance firms are able to meet their obligations to policyholders and beneficiaries over the following 12 months;

and (3) reinsurance recoveries are treated as a separate asset (rather than being netted off the underlying insurance liabilities).

AGUK calculates its solvency capital requirements using the Standard Formula under Solvency II and is in compliance.

and remained in effect as part of the U.K.’s retained EU law after the withdrawal of the U.K.

See “- Solvency II and Solvency Requirements,” below.

On December 31, 2024, as part of Brexit reform, the U.K.

government revoked Solvency II in the U.K and the prudential regime provisions for insurers were moved and assimilated into the PRA’s Rulebook and policy material (Solvency UK).

Solvency UK provides rules on capital adequacy, governance and risk management and regulatory reporting and public disclosure.

Under Solvency UK, AGUK is subject to certain limits and requirements, including the maintenance of a minimum solvency capital requirement (which depends on the type and amount of insurance business a company writes and the other risks to which it is exposed) and the establishment of technical provisions, which include projected losses and premium earnings.

Failure to maintain capital at least equal to the capital requirements under Solvency UK is one of the grounds on which the wide powers of intervention conferred upon the PRA may be exercised.

AGUK calculates its solvency capital requirements using the Standard Formula under Solvency UK which establishes capital requirements for underwriting risk, market risk, counterparty default risk and operational risk.

Restrictions on Dividend Payments

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authorized firm or its parent undertaking is considered to “acquire control” of the authorized firm.

Broadly speaking, the 10% threshold applies to banks, insurers and reinsurers (but not brokers) and Markets in Financial Instruments Directive (MiFID) investment firms, and the 20% threshold to insurance brokers and certain other firms that are Non-Directive firms for the purposes of the Solvency II Directive.

Withdrawal from the European Union

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and certain other non-EEA countries.

Regulation of U.K.

Asset Management Business

AssuredIM London is domiciled in the U.K.

and had been authorized by the FCA as an investment manager in the U.K.

with certain permissions.

Prior to July 1, 2023, AssuredIM London acted as a subadvisor to AssuredIM LLC and was a relying adviser of AssuredIM LLC for U.S.

regulatory purposes.

As part of the Sound Point Transaction on July 1, 2023, AssuredIM London sold its business to a Sound Point affiliate and ceased business operations.

AssuredIM London cancelled its FCA authorization as of October 2, 2023.

As an insurance company licensed in France, AGE is regulated by the ACPR and is subject to the provisions of Solvency II as well as related EU delegated regulations as implemented in France, and by the French Insurance Code and the Monetary and Financial Code, both of which set out the primary rules governing the insurance industry in France.

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Solvency II and Solvency Requirements

Solvency II came into effect in France on January 1, 2016, and is the legal and regulatory basis for the supervision of insurance firms in France.

Solvency II is the legal and regulatory basis for the supervision of insurance firms in France.

It provides rules on capital adequacy, governance, risk management, and regulatory reporting and public disclosure.

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The Company recognizes that its workforce, as a key driver of long-term performance, is among its most valued assets.

Accordingly, the Company’s key human capital management objectives are to attract, hire, retain, develop, and support a diverse group of the highest quality employees, including talented and experienced business leaders who drive its corporate strategies and build long-term shareholder value.

Accordingly, the Company’s key human capital management objectives are to attract, hire, retain, develop, and support the highest quality employees, including talented and experienced business leaders who drive its corporate strategies and build long-term shareholder value.

To promote these objectives, the Company’s human capital management programs are designed to reward and support employees with competitive compensation and benefit packages in each of its locations around the globe, and with professional development opportunities to cultivate talented employees and prepare them for critical roles and future leadership positions.

As of December 31, 2023, the Company employed 350 people world wide;

approximately 88% of employees are based in the U.S.

and Bermuda and approximately 12% are based in the U.K.

As of December 31, 2024, the Company employed 361 people worldwide.

Approximately 40% of the Company’s workforce is female and 60% is male.

The average tenure is approximately 13 years.

Other than in EEA, none of the Company’s employees are subject to collective bargaining agreements.

Other than in the EEA, none of the Company’s employees are subject to collective bargaining agreements.

The Company believes its employee relations are satisfactory.

Talent Acquisition, Development and Retention

The Company employs a number of talent acquisition strategies as part of its recruiting practices, including casting a wide net in order to deliberately reach and attract the best and broadest applicant pool, while at the same time ensuring all employment decisions are made in compliance with applicable law.

Learning and Development .

The Company invests in the professional development of its workforce because it believes that encouraging employees to realize their full capabilities enhances job satisfaction, leads to increased performance, and enables the Company to cultivate a pipeline of internal talent for succession planning.

To support the advancement of its employees, the Company endeavors to strengthen their knowledge and skills by providing equitable access to training, including in leadership, management and effective communication skills, mentoring opportunities, as well as tuition reimbursement assistance.

To support the advancement of its employees, the Company endeavors to strengthen their knowledge and skills by providing access to training, including in leadership, management and effective communication skills, mentoring opportunities, as well as tuition reimbursement assistance.

The Company believes its culture is collegial and collaborative and this fosters informal mentoring and learning.

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The Company offers a benefits package designed to promote and support the physical and mental health of its employees as well as financial security.

Benefits include life and health (medical, dental and vision) insurance, retirement savings plans (including Company matches of employee contributions), an employee stock purchase plan, hybrid work schedules, paid time off, paid family leave, an employee assistance program, commuter benefits, tuition reimbursement, and emergency backup child, elder and pet care.

Assured Guaranty employs a number of practices to help ensure that its compensation program is competitive, and aligns with the Company's goals.

The Company provides to its managers training on completing and delivering employee performance evaluations and compensation considerations.

To promote consistency and fairness, the Company's compensation function is centralized.

In addition, the Company conducts periodic reviews of its compensation program and works with independent compensation and benefits consultants to help ensure that its compensation program reflects best practices and current market standards.

The AGL Board's Compensation Committee is updated quarterly on different aspects of the Company' s compensation program, practices, and progress.

The Board's Compensation Committee is updated quarterly on different aspects of the Company' s compensation program, practices, and progress.

Ethical and Respectful Conduct.

The Company seeks to foster and maintain strong ethical standards and a reputation as a business that conducts itself professionally and with a high degree of integrity.

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The Company believes education and awareness are critical components in promoting the Company's cultural values across the organization.

Upon onboarding and annually, the Company requires all employees to complete training in the Company's Global Code of Ethics as well as its policies on the

prevention of sexual harassment and discrimination.

Upon onboarding and annually, the Company requires all employees to complete training in the Company's Global Code of Ethics as well as its policies on the prevention of sexual harassment and discrimination.

The Company also provides additional targeted training and guidance to specific personnel regarding anti-fraud, anti-bribery and anti-corruption related matters.

Employee Engagement;

The Company utilizes employee engagement surveys, conducted by a third-party provider to foster confidentiality, to gauge the effectiveness of its efforts to enhance the employee experience and to gain insight into employee perceptions about various aspects of the work environment.

Diversity and Inclusion .

Assured Guaranty is committed to building and sustaining at all levels of the organization a diverse workforce that is representative of its communities, in a manner consistent with its business needs, scale and resources, and fostering an inclusive workplace culture that embraces the differences within its staff and effectively utilizes the many and varied talents of its employees.

Implementing the goals of diversity and inclusion is a collective responsibility shared by board members, who participate in Company events, senior management, who serve as mentors and executive sponsors of employee resource groups (ERGs) (described below) and the global workforce, who serve on the Diversity and Inclusion Committee (D&I Committee) (described below) and run the ERGs.

The Company employs a number of talent acquisition strategies as part of its recruiting practices, including casting a wide net in order to deliberately reach and attract the largest pool of diverse and qualified candidates.

The Company does not utilize screening tools involving artificial intelligence or other similar software to screen applicants.

Employee-led Diversity and Inclusion Committee.

The Company’s employee-led D&I Committee is a critical ally in the Company's commitment to promote diversity, foster inclusion, and encourage cultural awareness.

The D&I Committee is composed of dedicated employees with different backgrounds, points of view, levels of seniority and tenure with the Company, who provide input into the Company's approach for achieving a diverse workforce and sustaining an inclusive culture.

Employee Resource Groups .

In an effort to create community and encourage employees to engage with and support one another, Assured Guaranty established five ERGs, selected based on employee feedback.

Membership in the ERGs is voluntary and open to all employees .

In an effort to create community and encourage employees to engage with and support one another, Assured Guaranty established five employee resource groups (ERGs), selected based on employee feedback.

Membership in the ERGs is voluntary and open to all employees, regardless of whether they identify with the group’s characteristics.

Because the ERGs are employee-led, they provide additional opportunities for employees to develop and demonstrate their leadership and organizational skills.

The ERGs also provide mentorship, career development training , and as s ist the Company in it s efforts to retain, develop and promote its employees and to foster a more inclusive culture .

Each ERG is supported by two executive sponsors, a member and an ally, who offer guidance and advocate on behalf of the group.

Board and Workforce Demographic Data .

The demographic composition of the AGL Board of Directors is included in the Company’s definitive proxy statement for the Annual General Meeting of Shareholders filed with the SEC pursuant to regulation 14A.

The Company discloses on its public website its most recent EEO-1 Report, detailing the demographic composition of its U.S, workforce (using categories based on the Equal Employment Opportunity Commission).

Information contained on the Company’s website is not incorporated by reference herein and is not part of this Form 10-K.

The AGL Board’s Environmental and Social Responsibility Committee and Compensation Committee, pursuant to their respective charters, provide oversight of the Company’s human capital management strategies, policies, and initiatives, including attracting, developing and retaining personnel, promoting diversity, and fostering an inclusive culture.

The Environmental and Social Responsibility Committee is periodically updated on employee engagement, learning and development programs, workforce demographics (including turnover and tenure), culture and workplace safety, and initiatives of the employee-led D&I Committee, Corporate Philanthropy Committee and ERGs.

The ERGs prepare strategic plans that incorporate the Company’s business objectives into their programming.

The ERGs align with the Company’s initiatives by providing mentorship, career development training, and assisting the Company in its efforts to retain, develop and promote its employees and to foster a more collaborative and collegial culture.

Employee-led Diversity and Inclusion Committee.

The Company’s employee-led Diversity and Inclusion Committee (D&I Committee) is a critical ally in the Company's efforts to encourage cultural awareness, support a diverse workforce, and foster inclusion.

The D&I Committee is composed of dedicated employees with different backgrounds, points of view, levels of seniority and tenure with the Company, who provide input into the Company's initiatives supporting its long-standing commitment to anti-discrimination and equal opportunity in the workplace.

Employee Engagement;

The Board’s Environmental and Social Responsibility Committee and Compensation Committee, pursuant to their respective charters, provide oversight of the Company’s human capital management strategies, policies, and initiatives.

The Environmental and Social Responsibility Committee is periodically updated on employee engagement, learning and development programs, culture and workplace safety, and initiatives of the employee-led D&I Committee, Corporate Philanthropy Committee and ERGs.

The Compensation Committee, which is advised by an independent compensation consultant, is responsible for the oversight of management development and evaluation of succession planning for senior management, and a review of the Company’s senior management compensation benchmarked against a comparison group.

Board members also support the Company’s programming by participating in events sponsored by the Company’s ERGs and D&I Committee.

AGL’s Board members also support the Company’s programming by participating in events sponsored by the Company’s ERGs and D&I Committee.

United States Tax Reform

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In the context of the taxation of U.S.

property/casualty insurance companies such as

the Company, the TCJA also modifies the loss reserve discounting rules and the proration rules that apply to reduce reserve deductions to reflect the lower corporate income tax rate.

property/casualty insurance companies such as the Company, the TCJA also modifies the loss reserve discounting rules and the proration rules that apply to reduce reserve deductions to reflect the lower corporate income tax rate.

In addition, the TCJA included certain provisions intended to eliminate certain perceived tax advantages of companies (including insurance companies) that have legal domiciles outside the U.S.

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persons investing in such companies.

For example, the TCJA includes a base erosion and anti-abuse tax (BEAT) that could make affiliate reinsurance between U.S.

For example, the TCJA includes a base erosion and anti-abuse tax that could make affiliate reinsurance between U.S.

members of the Company’s group economically unfeasible.

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trade or business or whether a company is a CFC or a PFIC or has related person insurance income (RPII) are subject to change, possibly on a retroactive basis.

The Treasury Department recently issued final and proposed regulations intended to clarify the application of the insurance income exception to the classification of a non-U.S.

insurer as a PFIC and provide guidance on a range of issues relating to PFICs, and recently issued proposed regulations that would expand the scope of the RPII rules.

Department of the Treasury issued final and proposed regulations intended to clarify the application of the insurance income exception to the classification of a non-U.S.

insurer as a PFIC and provide guidance on a range of issues relating to PFICs, and issued proposed regulations that would expand the scope of the RPII rules.

New regulations or pronouncements interpreting or clarifying such rules may be forthcoming.

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Taxation of AGL and Subsidiaries

Under Bermuda law, there was no Bermuda income, corporate or profits tax or withholding tax, capital gains tax or capital transfer tax payable by AGL or its Bermuda Subsidiaries in 2023.

AGL, AG Re and AGRO have each obtained from the Minister of Finance under the Exempted Undertakings Tax Protection Act 1966, as amended, an assurance that, in the event that Bermuda enacts legislation imposing tax computed on profits, income, any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance, then the imposition of any such tax shall not be applicable to AGL, AG Re or AGRO or to any of their operations or their shares, debentures or other obligations, until March 31, 2035.

This assurance is subject to the provision that it is not to be construed so as to prevent the application of any tax or duty to such persons as are ordinarily resident in Bermuda, or to prevent the application of any tax payable in accordance with the provisions of the Land Tax Act 1967 or otherwise payable in relation to any land leased to AGL, AG Re or AGRO.

AGL, AG Re and AGRO each pays annual Bermuda government fees, and AG Re and AGRO pay annual insurance license fees.

In addition, all entities employing individuals in Bermuda are required to pay a payroll tax and there are other sundry taxes payable, directly or indirectly, to the Bermuda government.

On December 27, 2023 the Bermuda government enacted a corporate income tax at the rate of 15% which will apply for accounting periods starting on or after January 1, 2025.

The Bermuda corporate income tax applies to Bermuda resident entities of multinational groups that have annual revenues of €750 million or greater for at least two of the last four fiscal years.

However, the Corporate Income Tax Act 2023 of Bermuda includes certain economic transition adjustments (ETA) which, broadly, afford Bermuda resident entities certain deferred tax assets to be utilized against future liabilities as a result of a step-up in the tax basis of assets and liabilities as of September 30, 2023.

Under the Corporate Income Tax Act 2023 of Bermuda, any liability to the tax will apply regardless of any assurances previously provided under the Exempted Undertakings Tax Protection Act 1966 of Bermuda.

On December 27, 2023, the Bermuda government enacted the Corporate Income Tax Act 2023 (the CIT Act), which imposes a corporate income tax at the rate of 15% to in-scope entities for accounting periods starting on or after January 1, 2025.

Entities subject to tax under the CIT Act are the Bermuda tax resident entities of multinational groups that have annual revenues of €750 million or greater for at least two of the last four fiscal years.

However, a Bermuda tax resident’s entity’s liability under the CIT Act is subject to the application of any foreign tax credits (FTC) that may arise if the entity’s income is taxed in a jurisdiction outside Bermuda.

The CIT Act also contains a number of adjustments to an entity’s net income for tax purposes, including transitional adjustments such as the economic transition adjustment (ETA) which, broadly, permits certain deferred tax assets to be utilized against future liabilities as a result of a step-up in the tax basis of assets and liabilities as of September 30, 2023 for those entities that are (or will be) subject to the CIT Act but were Bermuda tax resident as of the step-up date.

Under the CIT Act of Bermuda, any liability for the tax will apply regardless of any assurances previously provided under the Exempted Undertakings Tax Protection Act 1966 of Bermuda.

United States

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AGL, AG Re and certain of the other non-U.S.

subsidiaries have and will continue to file protective U.S.

subsidiaries have filed and will continue to file protective U.S.

federal income tax returns on a timely basis in order to preserve the right to claim income tax deductions and credits if it is ever determined that they are subject to U.S.

federal income tax.

The highest marginal

federal income tax rates currently are 21% for a corporation’s effectively connected income and 30% for the “branch profits” tax.

The highest marginal federal income tax rates currently are 21% for a corporation’s effectively connected income and 30% for the “branch profits” tax.

Under the income tax treaty between Bermuda and the U.S.

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If AG Re or another of the Company’s Bermuda subsidiaries is considered to be engaged in the conduct of an insurance business in the U.S.

and is not entitled to the benefits of the Bermuda Treaty in general (because it fails to satisfy one of the limitations on treaty benefits discussed above), the Internal Revenue Code of 1986, as amended (the Code), could subject a significant portion of AG Re’s or another of the Company’s Bermuda subsidiary’s investment income to U.S.

and is not entitled to the benefits of the Bermuda Treaty in general (because it fails to satisfy one of the limitations on treaty benefits discussed above), the Internal Revenue Code of 1986,

as amended (the Code), could subject a significant portion of AG Re’s or another of the Company’s Bermuda subsidiary’s investment income to U.S.

AGL, as a U.K.

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Central management and control constitutes the highest level of control of a company’s affairs.

From November 6, 2013, the AGL Board began to manage the affairs of AGL in such a way as to maintain its status as a company that is tax resident in the U.K.

From November 6, 2013, AGL’s Board began to manage the affairs of AGL in such a way as to maintain its status as a company that is tax resident in the U.K.

tax resident company, AGL is subject to the tax rules applicable to companies resident in the U.K., including the benefits afforded by the U.K.’s tax treaties.

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The current standard rate of VAT is 20%.

Further, with effect for accounting periods starting on or after December 31, 2023, AGL may be liable to charges under the U.K.’s multinational top-up tax to the extent that any member (or members) of the group are resident in a territory other than the U.K.

and that member (or those members, collectively), have an effective tax rate of less than 15% in that territory.

and that member (or those members, collectively) has an effective tax rate of less than 15% in that territory.

Alternatively, AGL may be liable to charges under the U.K.’s domestic top-up tax if profits arising in the U.K.

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In 2013, Assured Guaranty obtained clearance from HMRC confirming this on the basis of the facts and intentions as they were at the time.

enacted legislation in July 2023 and February 2024, and HMRC published guidance in respect of such legislation, which, broadly, implements the Organization for Economic Co-operation and Development (OECD) Model Rules for Pillar Two into U.K.

domestic legislation for accounting periods starting on or after December 31, 2023.

Pillar Two comprises rules granting jurisdictions additional taxing rights where other relevant jurisdictions have either not taxed relevant profits or those profits have been subject to a rate of tax below 15%.

The rules apply to multinational groups with consolidated group revenue of €750 million or more in at least two out of the preceding four fiscal years.

Through a series of complex interlocking rules, the intended effect is that low or no taxed profits would be subject to tax at an overall rate of at least 15%.

Risk Factors, Risks Related to Taxation captioned “AGL may, and AG Re and AGRO will, become subject to taxes in Bermuda, which may adversely affect the Company’s future results of operations and an investment in the Company” and “Assured Guaranty’s financial results may be affected by measures taken in response to the OECD BEPS project.”

Taxation of Shareholders

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For example, special rules apply to certain shareholders, such as partnerships, insurance companies, regulated investment companies, real estate investment trusts, dealers or traders in securities, tax exempt organizations, expatriates, persons liable for alternative minimum tax, U.S.

accrual method taxpayers subject to special tax accounting rules as a result of any item of gross income with respect to AGL’s shares being taken into account in an applicable financial statement as described in 451(b) of the Code, persons that do not hold their securities in the U.S.

accrual method taxpayers subject to special tax accounting rules as a result of any item of gross income with respect to AGL’s shares being taken into account in an applicable financial statement as described in section 451(b) of the Code, persons that do not hold their securities in the U.S.

dollar, persons who are considered with respect to AGL or any of its non-U.S.

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Person who owns the Company's shares will not be characterized as a 10% U.S.

In addition, the direct and indirect subsidiaries of Assured Guaranty US Holdings Inc.

(AGUS) are characterized as CFCs and any subpart F income generated will be included in the gross income of the applicable domestic subsidiaries in the AGL group.

In addition, the direct and indirect subsidiaries of AGUS are characterized as CFCs and any subpart F income generated will be included in the gross income of the applicable domestic subsidiaries in the AGL group.

The RPII CFC Provisions.

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Control is measured by either more than 50% in value or more than 50% in voting power of stock applying certain constructive ownership principles.

A Foreign Insurance Subsidiary will be treated as a CFC under the RPII provisions if

RPII shareholders are treated as owning (directly, indirectly through non-U.S.

A Foreign Insurance Subsidiary will be treated as a CFC under the RPII provisions if RPII shareholders are treated as owning (directly, indirectly through non-U.S.

entities or constructively) 25% or more of the shares of AGL by vote or value.

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regulations interpreting the RPII provisions of the Code exist only in proposed form.

Further, recently proposed regulations could, if finalized in their current form, substantially expand the definition of RPII to include insurance income of our Foreign Insurance Subsidiaries related to affiliate reinsurance transactions.

Further, proposed regulations could, if finalized in their current form, substantially expand the definition of RPII to include insurance income of our Foreign Insurance Subsidiaries related to affiliate reinsurance transactions.

These regulations would apply to taxable years beginning after the date the regulations are finalized.

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For any taxable year in which AGL determines that neither the 20% Gross Income Exception nor the 20% Ownership Exception applies, AGL will provide to all U.S.

Persons registered as shareholders of its shares a completed IRS Form 5471 or the relevant information necessary to complete the form.

Persons registered as shareholders of its shares a completed IRS Form 5471 or

the relevant information necessary to complete the form.

Failure to file IRS Form 5471 may result in penalties.

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In general, a shareholder receives an "excess distribution" if the amount of the distribution is more than 125% of the average distribution with respect to the common shares during the three preceding taxable years (or shorter period during which the taxpayer held common shares).

In general, the penalty tax is equivalent to an interest charge on taxes that are deemed due during the period the shareholder owned the common shares, computed by assuming that the excess distribution or gain (in the case of a sale) with respect to the common shares was taken in equal portion at the highest applicable tax rate on ordinary income throughout the shareholder's period of ownership.

In general, the penalty tax is

equivalent to an interest charge on taxes that are deemed due during the period the shareholder owned the common shares, computed by assuming that the excess distribution or gain (in the case of a sale) with respect to the common shares was taken in equal portion at the highest applicable tax rate on ordinary income throughout the shareholder's period of ownership.

The interest charge is equal to the applicable rate imposed on underpayments of U.S.

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Further, the U.S.

Treasury Department and the IRS recently issued final and proposed regulations (the 2020 Regulations) intended to clarify the application of the PFIC provisions to a non-U.S.

Treasury Department and the IRS issued final and proposed regulations (the 2020 Regulations) intended to clarify the application of the PFIC provisions to a non-U.S.

insurance company and provide guidance on a range of issues relating to PFICs, including the application of the look-through rule, the treatment of income and assets of certain U.S.

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insurance company with no or a nominal number of employees that relies exclusively or almost exclusively upon independent contractors (other than certain related entities) to perform its core functions will not be treated as engaged in the active conduct of an insurance business.

The Company believes that, based on the application of the PFIC look-through

rules described above and the Company's plan of operations for the current and future years, AGL should not be characterized as a PFIC.

The Company believes that, based on the application of the PFIC look-through rules described above and the Company's plan of operations for the current and future years, AGL should not be characterized as a PFIC.

However, as the Company cannot predict the likelihood of finalization of the proposed 2020 Regulations or the scope, nature or impact of the 2020 Regulations on us, or whether the Company’s non-U.S.

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Foreign tax credit.

Persons own a majority of AGL’s common shares, only a portion of the current income inclusions, if any, under the CFC, RPII and PFIC rules and of dividends paid by AGL (including any gain from the sale of common shares that is treated as a dividend under section 1248 of the Code) will be treated as foreign source income for purposes of computing a shareholder’s U.S.

purposes of computing a shareholder’s U.S.

foreign tax credit limitations.

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It is also likely that substantially all of the “subpart F income,” RPII and dividends that are foreign source income will constitute either “passive” or “general” income.

Thus, it may not be possible for most shareholders to utilize excess foreign tax credits to reduce U.S.

Thus, it may not be possible for most shareholders to utilize excess FTC to reduce U.S.

tax on such income.

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AGL’s Tax Residency.

AGL is not incorporated in the U.K., but from November 6, 2013, the AGL Board has managed its affairs with the intent to maintain its status as a company that is tax resident in the U.K.

AGL is not incorporated in the U.K., but from November 6, 2013, AGL’s Board has managed its affairs with the intent to maintain its status as a company that is tax resident in the U.K.

Under current U.K.

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and does not relate to any property situated, or any matter or thing done, or to be done, in the U.K.

Description of Share Capital

The following summary of AGL’s share capital is qualified in its entirety by the provisions of Bermuda law, AGL’s memorandum of association and its Bye-Laws, copies of which are incorporated by reference as exhibits to this Annual Report on Form 10-K.

AGL’s authorized share capital of $5,000,000 is divided into 500,000,000 shares, par value U.S.

$0.01 per share, of which 55,422,098 common shares were issued and outstanding as of February 26, 2024.

Except as described below, AGL’s common shares have no preemptive rights or other rights to subscribe for additional common shares, no rights of redemption, conversion or exchange and no sinking fund rights.

In the event of liquidation, dissolution or winding-up, the holders of AGL’s common shares are entitled to share equally, in proportion to the number of common shares held by such holder, in AGL's assets, if any remain after the payment of all AGL’s debts and liabilities and the liquidation preference of any outstanding preferred shares.

Under certain circumstances, AGL has the right to purchase all or a portion of the shares held by a shareholder.

See “Acquisition of Common Shares by AGL” below.

Voting Rights and Adjustments

In general, and except as provided below, shareholders have one vote for each common share held by them and are entitled to vote with respect to their fully paid shares at all meetings of shareholders.

However, if, and so long as, the common shares (and other of AGL’s shares) of a shareholder are treated as “controlled shares” (as determined pursuant to section 958 of the Code) of any U.S.

Person and such controlled shares constitute 9.5% or more of the votes conferred by AGL’s issued and outstanding shares, the voting rights with respect to the controlled shares owned by such U.S.

Person shall be limited, in the aggregate, to a voting power of less than 9.5% of the voting power of all issued and outstanding shares, under a formula specified in AGL’s Bye-Laws.

The formula is applied repeatedly until there is no U.S.

Person whose controlled shares constitute 9.5% or more of the voting power of all issued and outstanding shares and who generally would be required to recognize income with respect to AGL under the Code if AGL were a CFC as defined in the Code and if the ownership threshold under the Code were 9.5% (as defined in AGL’s Bye-Laws as a 9.5% U.S.

Shareholder).

In addition, AGL’s Board may determine that shares held carry different voting rights when it deems it appropriate to do so to:

(i) avoid the existence of any 9.5% U.S.

and (ii) avoid adverse tax, legal or regulatory consequences to AGL or any of its subsidiaries or any direct or indirect holder of shares or its affiliates.

“Controlled shares” includes, among other things, all shares of AGL that such U.S.

Person is deemed to own directly, indirectly or constructively (within the meaning of section 958 of the Code).

Further, these provisions do not apply in the event one shareholder owns greater than 75% of the voting power of all issued and outstanding shares.

Under these provisions, certain shareholders may have their voting rights limited to less than one vote per share, while other shareholders may have voting rights in excess of one vote per share.

Moreover, these provisions could have the effect of reducing the votes of certain shareholders who would not otherwise be subject to the 9.5% limitation by virtue of their direct share ownership.

AGL’s Bye-Laws provide that it will use its best efforts to notify shareholders of their voting interests prior to any vote to be taken by them.

AGL’s Board is authorized to require any shareholder to provide information for purposes of determining whether any holder’s voting rights are to be adjusted, which may be information on beneficial share ownership, the names of persons having beneficial ownership of the shareholder’s shares, relationships with other shareholders or any other facts AGL’s Board may deem relevant.

If any holder fails to respond to this request or submits incomplete or inaccurate information, AGL’s Board may eliminate the shareholder’s voting rights.

All information provided by the shareholder will be treated by AGL as confidential information and shall be used by AGL solely for the purpose of establishing whether any 9.5% U.S.

Shareholder exists and applying the adjustments to voting power (except as otherwise required by applicable law or regulation).

Restrictions on Transfer of Common Shares

AGL’s Board may decline to register a transfer of any common shares under certain circumstances, including if they have reason to believe that any adverse tax, regulatory or legal consequences to the Company, any of its subsidiaries or any of its shareholders or indirect holders of shares or its affiliates may occur as a result of such transfer (other than such as AGL’s Board considers de minimis).

Transfers must be by instrument unless otherwise permitted by the Companies Act.

The restrictions on transfer and voting restrictions described above may have the effect of delaying, deferring or preventing a change in control of Assured Guaranty.

Acquisition of Common Shares by AGL

Under AGL’s Bye-Laws and subject to Bermuda law, if AGL’s Board determines that any ownership of AGL’s shares may result in adverse tax, legal or regulatory consequences to the Company, any of the Company’s subsidiaries or any of AGL’s shareholders or indirect holders of shares or its affiliates (other than such as AGL’s Board considers de minimis), the Company has the option, but not the obligation, to require such shareholder to sell to AGL or to a third party to whom AGL assigns the repurchase right the minimum number of common shares necessary to avoid or cure any such adverse consequences at a price determined in the discretion of the Board to represent the shares’ fair market value (as defined in AGL’s Bye-Laws).

Other Provisions of AGL’s Bye-Laws

AGL’s Board and Corporate Action

AGL’s Bye-Laws provide that AGL’s Board shall consist of not less than three and not more than 21 directors, the exact number as determined by the Board.

AGL’s Board currently consists of 12 persons who are elected for annual terms.

Shareholders may only remove a director for cause (as defined in AGL’s Bye-Laws) at a general meeting, provided that the notice of any such meeting convened for the purpose of removing a director shall contain a statement of the intention to do so and shall be provided to that director at least two weeks before the meeting.

Vacancies on the Board can be filled by the Board if the vacancy occurs in those events set out in AGL’s Bye-Laws as a result of death, disability, disqualification or resignation of a director, or from an increase in the size of the Board.

Generally under AGL’s Bye-Laws, the affirmative votes of a majority of the votes cast at any meeting at which a quorum is present is required to authorize a resolution put to vote at a meeting of the Board, including one relating to a merger, acquisition or business combination.

Corporate action may also be taken by a unanimous written resolution of the Board without a meeting.

A quorum shall be at least one-half of directors then in office present in person or represented by a duly authorized representative, provided that at least two directors are present in person.

Shareholder Action

At the commencement of any general meeting, two or more persons present in person and representing, in person or by proxy, more than 50% of the issued and outstanding shares entitled to vote at the meeting shall constitute a quorum for the transaction of business.

In general, any questions proposed for the consideration of the shareholders at any general meeting shall be decided by the affirmative votes of a majority of the votes cast in accordance with the Bye-Laws.

The Bye-Laws contain advance notice requirements for shareholder proposals and nominations for directors, including when proposals and nominations must be received and the information to be included.

The Bye-Laws may be amended only by both a resolution adopted by the Board and by a resolution adopted by the shareholders.

Voting of Non-U.S.

Subsidiary Shares

When AGL is required or entitled to vote at a general meeting (for example, an annual meeting) of any of AG Re, AGFOL or any other of its directly held non-U.S.

subsidiaries, AGL’s Board is required to refer the subject matter of the vote to AGL’s shareholders and seek direction from such shareholders as to how they should vote on the resolution proposed by the non-U.S.

AGL’s Board in its discretion shall require that substantially similar provisions are or will be contained in the Bye-Laws (or equivalent governing documents) of any direct or indirect non-U.S.

subsidiaries other than AGRO and subsidiaries incorporated in the U.K.

Available Information

The Company maintains an Internet web site at www.assuredguaranty.com .

The Company makes available, free of charge, on its web site (under www.assuredguaranty.com/sec-filings ) the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13 (a) or 15 (d) of the Exchange Act as soon as reasonably practicable after the Company files such material with, or furnishes it to, the SEC.

The Company also makes available, free of charge, through its web site (under

www.assuredguaranty.com/governance ) links to the Company’s Corporate Governance Guidelines, its Global Code of Ethics, AGL's Bye-Laws and the charters for its Board committees, as well as certain of the Company's environmental and social policies and statements.

In addition, the SEC maintains an Internet site (at www.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The Company routinely posts important information for investors on its web site (under www.assuredguaranty.com/company-statements and, more generally, under the Investor Information tab at www.assuredguaranty.com/investor-information and Businesses tab at www.assuredguaranty.com/businesses ).

The Company also maintains a social media account on LinkedIn ( www.linkedin.com/company/assured-guaranty/ ).

The Company uses its web site and may use its social media account as a means of disclosing material information and for complying with its disclosure obligations under SEC Regulation FD (Fair Disclosure).

Accordingly, investors should monitor the Company Statements, Investor Information and Businesses portions of the Company’s web site as well as the Company’s social media account on LinkedIn, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company’s web site is not incorporated by reference into, and is not a part of, this report.

The Company maintains a website at assuredguaranty.com .

The Company makes available, free of charge, on its website (under assuredguaranty.com/sec-filings ) the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13 (a) or 15 (d) of the Exchange Act as soon as reasonably practicable after the Company files such material with, or furnishes it to, the SEC.

The Company also makes available, free of charge, through its website (under assuredguaranty.com/governance ) links to the Company’s Corporate Governance Guidelines, its Global Code of Ethics, AGL's Bye-Laws and the charters for its Board committees, as well as certain of the Company's environmental and social policies and statements.

In addition, the SEC

maintains an Internet site (at sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The Company routinely posts important information for investors on its website (under assuredguaranty.com/company-statements and, more generally, under the Investor Information tab at assuredguaranty.com/investor-information and Businesses tab at assuredguaranty.com/businesses ).

The Company also maintains a social media account on LinkedIn ( linkedin.com/company/assured-guaranty/ ).

The Company uses its website and may use its social media account as a means of disclosing material information and for complying with its disclosure obligations under SEC Regulation FD (Fair Disclosure).

Accordingly, investors should monitor the Company Statements, Investor Information and Businesses portions of the Company’s website as well as the Company’s social media account on LinkedIn, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company’s website is not incorporated by reference into, and is not a part of, this report.

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

What changed 10-K

Item 1. Business