Enact Holdings, Inc.

Previous wording

The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes for the six months ended June 30, 2025 and 2024, and our audited consolidated financial statements and related notes for the years ended December 31, 2024 and 2023 within our Annual Report on Form 10-K for the fiscal year ending December 31, 2024 (the “Annual Report”).

Current wording

The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes for the nine months ended September 30, 2025 and 2024, and our audited consolidated financial statements and related notes for the years ended December 31, 2024 and 2023, within our Annual Report on Form 10-K for the fiscal year ending December 31, 2024 (the “Annual Report”).

Previous wording

Macroeconomic environment. While inflation remained elevated through the second quarter of 2025, household balance sheets were supported by low rates of unemployment and continued earnings growth. Beginning in April 2025, the United States economy became subject to significant volatility and uncertainty, largely related to changing economic policies, including new and increasing tariffs as well as certain domestic and geopolitical tensions. The ancillary effects of these factors on the domestic and global economies could materially impact the United States housing markets and our business.

Current wording

Macroeconomic environment. Throughout 2025, the United States economy was subject to significant volatility and uncertainty, largely related to changing economic policies, including new and increasing tariffs, continued inflationary pressure, the then impending government shutdown as well as certain domestic and geopolitical tensions. The ancillary effects of these factors on the domestic and global economies could materially impact the United States housing markets and our business.

Previous wording

The Bureau of Labor Statistics reported in June 2025 that Consumer Price Index (“CPI”) inflation was 2.7% year-over-year compared to 2.4% year-over-year in March 2025. Elevated inflation remains a challenge for the Federal Open Market Committee as it navigates heightened uncertainty.

Current wording

The Bureau of Labor Statistics reported in September 2025 that Consumer Price Index (“CPI”) inflation was 3.0% year-over-year compared to 2.7% year-over-year in June 2025 while the unemployment rate has risen to 4.3% in August 2025 from 4.1% in June 2025. Elevated inflation remains a challenge for the Federal Open Market Committee as it navigates heightened uncertainty.

Previous wording

Mortgage origination activity remained slow in the second quarter of 2025 in response to elevated mortgage rates and sustained low housing supply. Over the past few years, housing affordability has deteriorated as elevated mortgage rates and home price appreciation outpaced median family income according to the National Association of Realtors Housing Affordability Index. National house price growth has slowed into 2025 according to the Federal Housing Finance Agency (“FHFA”) Monthly Purchase-Only House Price Index (Seasonally Adjusted).

Current wording

The U.S. mortgage origination market remained relatively slow in response to elevated mortgage rates. Over the past few years, housing affordability has deteriorated as elevated mortgage rates and home price appreciation outpaced median family income according to the National Association of Realtors Housing Affordability Index. Affordability pressures have eased slightly during the quarter as mortgage rates began to decline and national house price growth has slowed according to the Federal Housing Finance Agency (“FHFA”) Monthly Purchase-Only House Price Index (Seasonally Adjusted).

Previous wording

Our portfolio. New insurance written (“NIW”) of $13.3 billion in the second quarter of 2025 decreased 3% compared to the second quarter of 2024. Changes in NIW are primarily impacted by the size of the mortgage insurance market and our market share. Our primary persistency rate was 82% during the second quarter of 2025 and 83% for the second quarter of 2024. The persistency rate continues to remain higher than historical levels driven by a large percentage of our in-force policies with mortgage rates below current mortgage rates.

Current wording

Our portfolio. New insurance written (“NIW”) of $14.0 billion in the third quarter of 2025 increased 3% compared to the third quarter of 2024. Changes in NIW are primarily impacted by the size of the mortgage insurance market and our market share. Our primary persistency rate was 83% during the third quarter of 2025 and 83% for the third quarter of 2024. The persistency rate continues to remain higher than historical averages driven by a large percentage of our in-force policies with mortgage rates below current mortgage rates.

Previous wording

Net earned premiums increased modestly in the second quarter of 2025 compared to the second quarter of 2024 primarily as a result of higher assumed premiums and insurance in-force growth, partially offset by higher ceded premiums.

Current wording

Net earned premiums decreased modestly in the third quarter of 2025 compared to the third quarter of 2024 primarily as a result of higher ceded premiums partially offset by insurance in-force growth.

Previous wording

Loss experience. Our loss ratio for the three months ended June 30, 2025, was 10% as compared to (7)% for the three months ended June 30, 2024. Both periods were impacted by favorable reserve development. In the second quarter of 2025, we released $48 million of reserves, driven by cure performance of delinquencies from early 2024 and prior. This compares to the second quarter of 2024, where we recorded a $77 million reserve release primarily driven by cure performance on delinquencies from 2023 and prior. As part of the reserve adjustments in 2024, we also decreased our claim rate assumptions for new and existing delinquencies as a result of sustained favorable cure performance and lessening uncertainty in the economic environment.

Current wording

Loss experience. Our loss ratio for the three months ended September 30, 2025, was 15% as compared to 5% for the three months ended September 30, 2024. Both periods were impacted by favorable reserve development. In the third quarter of 2025, we released $45 million of reserves, driven by cure performance of delinquencies from 2024 and prior. This compares to the third quarter of 2024, where we recorded a $65 million reserve release primarily driven by cure performance on delinquencies from 2023 and prior.

Previous wording

New delinquencies in the second quarter of 2025 increased compared to the second quarter of 2024 due to the normal loss development pattern on newer books. Current period primary delinquencies of 11,567 contributed $69 million of loss expense in the second quarter of 2025. This compares to $60 million of loss expense from 10,461 delinquencies that were reported in the second quarter of 2024. In determining the loss expense estimate, considerations were given to recent cure and claim experience and the prevailing and prospective economic conditions.

Current wording

New delinquencies in the third quarter of 2025 increased slightly compared to the third quarter of 2024 due to the normal loss development pattern on newer books. Current period primary delinquencies of 12,998 contributed $79 million of loss expense in the third quarter of 2025. This compares to $75 million of loss expense from 12,964 primary delinquencies that were reported in the third quarter of 2024. In determining the loss expense estimate, considerations were given to recent cure and claim experience and the prevailing and prospective economic conditions.

Previous wording

Capital requirements and ratings. As of June 30, 2025, EMICO’s estimated risk-to-capital ratio under North Carolina law and enforced by the North Carolina Department of Insurance (“NCDOI”), EMICO’s domestic insurance regulator, was 10.3:1, compared with risk-to-capital ratios of 10.5:1 and 10.8:1 as of December 31, 2024, and June 30, 2024, respectively. EMICO’s risk-to-capital ratio remains below the NCDOI’s maximum risk-to-capital ratio of 25:1. North Carolina’s calculation of risk-to-capital excludes the risk in-force for delinquent loans given the established loss reserves against all delinquencies. EMICO’s ongoing risk-to-capital ratio will depend principally on the magnitude of future losses incurred by EMICO, the effectiveness of ongoing loss mitigation activities, new business volume and profitability, the impact of quota share reinsurance, the amount of policy lapses and the amount of additional capital that is generated or distributed by the business.

Current wording

Capital requirements and ratings. As of September 30, 2025, EMICO’s estimated risk-to-capital ratio under North Carolina law and enforced by the North Carolina Department of Insurance (“NCDOI”), EMICO’s domestic insurance regulator, was 10.2:1, compared with risk-to-capital ratios of 10.5:1 and 10.4:1 as of December 31, 2024, and September 30, 2024, respectively. EMICO’s risk-to-capital ratio remains below the NCDOI’s maximum risk-to-capital ratio of 25:1. North Carolina’s calculation of risk-to-capital excludes the risk in-force for delinquent loans given the established loss reserves against all delinquencies. EMICO’s ongoing risk-to-capital ratio will depend principally on the magnitude of future losses incurred by EMICO, the effectiveness of ongoing loss mitigation activities, new business volume and profitability, the impact of quota share reinsurance, the amount of policy lapses and the amount of additional capital that is generated or distributed by the business.

Previous wording

Under PMIERs, we are subject to operational and financial requirements that private mortgage insurers must meet in order to remain eligible to insure loans that are purchased by the GSEs. As of June 30, 2025, we had estimated available assets of $4,992 million against $3,031 million net required assets under PMIERs compared to available assets of $4,999 million against $3,033 million net required assets as of March 31, 2025. The sufficiency ratio as of June 30, 2025, was 165%, or $1,961 million, above the PMIERs requirements, compared to 165%, or $1,966 million, above the PMIERs requirements as of March 31, 2025. Our PMIERs required assets benefited from a reinsurance credit of $1,870 million and $1,880 million related to third-party reinsurance as of June 30, 2025, and March 31, 2025, respectively.

Current wording

Under PMIERs, we are subject to operational and financial requirements that private mortgage insurers must meet in order to remain eligible to insure loans that are purchased by the GSEs. As of September 30, 2025, we had estimated available assets of $4,974 million against $3,070 million net required assets under PMIERs compared to available assets of $4,992 million against $3,031 million net required assets as of June 30, 2025. The sufficiency ratio as of September 30, 2025, was 162%, or $1,904 million, above the PMIERs requirements, compared to 165%, or $1,961 million, above the PMIERs requirements as of June 30, 2025. Our PMIERs required assets benefited from a reinsurance credit of $1,889 million and $1,870 million related to third-party reinsurance as of September 30, 2025, and June 30, 2025, respectively.

Previous wording

Capital returns. In March and June 2025, our primary mortgage insurance operating company, EMICO, paid dividends to EHI that support our ability to return capital to shareholders. We paid a dividend of $0.185 per common share during the first quarter of 2025. In April 2025, we announced an increase of our quarterly dividend to $0.21 per common share which was paid in June 2025. Future dividend payments are subject to quarterly review and approval by our Board of Directors and Genworth and will be targeted to be paid in the third month of each quarter.

Current wording

Capital returns. In March, June and September 2025, our primary mortgage insurance operating company, EMICO, paid dividends to EHI that support our ability to return capital to shareholders. We paid a dividend of $0.185 per common share during the first quarter of 2025. In April 2025, we announced an increase of our quarterly dividend to $0.21 per common share which was paid in both June and September 2025. Future dividend payments are subject to quarterly review and approval by our Board of Directors and Genworth and will be targeted to be paid in the third month of each quarter.

Previous wording

Premiums increased modestly for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily as a result of higher assumed premiums and insurance in-force growth, partially offset by higher ceded premiums. The net earned premium rate was 0.35% for the three months ended June 30, 2025, down slightly from 0.36% for the three months ended June 30, 2024.

Current wording

Premiums decreased modestly for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily as a result of higher ceded premiums partially offset by insurance in-force growth. The net earned premium rate was 0.35% for the three months ended September 30, 2025, down slightly from 0.36% for the three months ended September 30, 2024.

Previous wording

Net investment income increased for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to higher yields as a result of elevated interest rates and higher average invested assets.

Current wording

Net investment income increased for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to higher yields and higher average invested assets.

Previous wording

Net investment losses in the second quarter of 2025 and 2024 were driven primarily by realized losses on the sale of fixed maturity securities.

Current wording

Net investment losses in the third quarter of 2025 and 2024 were driven primarily by realized losses on the sale of fixed maturity securities.

Previous wording

Losses incurred during the second quarter of 2025 and 2024 were both impacted by prior year development. In the second quarter of 2025, we recorded a reserve release of $48 million, driven by cure performance of delinquencies from early 2024 and prior years. In the second quarter of 2024, we recorded a reserve release of $77 million primarily related to cure performance of delinquencies from 2023 and prior years. As part of the reserve adjustments in 2024, we also decreased our claim rate assumptions for new and existing delinquencies as a result of sustained favorable cure performance and lessening uncertainty in the economic environment. Current period primary delinquencies of 11,567 contributed $69 million of loss expense in the three months ended June 30, 2025. This compares to $60 million of loss expense from 10,461 primary delinquencies in the three months ended June 30, 2024.

Current wording

Losses incurred during the third quarter of 2025 and 2024 were both impacted by prior year development. In the third quarter of 2025, we recorded a reserve release of $45 million, driven by cure performance of delinquencies from 2024 and prior years. In the third quarter of 2024, we recorded a reserve release of $65 million primarily related to cure performance of delinquencies from 2023 and prior years. Current period primary delinquencies of 12,998 contributed $79 million of loss expense in the three months ended September 30, 2025. This compares to $75 million of loss expense from 12,964 primary delinquencies in the three months ended September 30, 2024.

Previous wording

Acquisition and operating expenses, net of deferrals, decreased for the three months ended June 30, 2025, primarily due to severance expenses as a part of restructuring activities in 2024.

Current wording

Acquisition and operating expenses, net of deferrals, decreased for the three months ended September 30, 2025, primarily due to restructuring activities in 2024 and higher ceding commissions.

Previous wording

The effective tax rate was 21.8% and 21.8% for the three months ended June 30, 2025 and 2024, respectively, consistent with the United States corporate federal income tax rate.

Current wording

The effective tax rate was 22.1% and 21.3% for the three months ended September 30, 2025 and 2024, respectively, consistent with the United States corporate federal income tax rate.

Previous wording

Premiums increased for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily attributable to insurance in-force growth and higher assumed premiums, partially offset by higher ceded premiums. The net earned premium rate was 0.35% for the six months ended June 30, 2025, down slightly from 0.36% for the six months ended June 30, 2024.

Current wording

Premiums were flat for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, as insurance in-force growth and higher assumed premiums were offset by higher ceded premiums and slightly lower average premium rates. The net earned premium rate was 0.35% for the nine months ended September 30, 2025, down slightly from 0.36% for the nine months ended September 30, 2024.

Previous wording

Net investment income increased for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily attributable to an increase in investment yields and higher average invested assets.

Current wording

Net investment income increased for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily attributable to an increase in investment yields and higher average invested assets.

Previous wording

Losses incurred during the first six months of 2025 and 2024 were both impacted by favorable reserve adjustments. During the first six months of 2025, we released reserves of $95 million primarily on prior accident year reserves driven by cure performance of delinquencies from early 2024 and prior years. During the first six months of 2024, we released reserves of $131 million primarily due to better than expected cure performance on delinquencies from 2023 and prior years. As part of the reserve adjustments in 2024, we also decreased our claim rate assumptions for new and existing delinquencies as a result of sustained favorable cure performance and lessening uncertainty in the economic environment. New primary delinquencies of 23,804 contributed $144 million of loss expense in the first six months of 2025. This compares to $134 million of loss expense from 21,856 new primary delinquencies in the first six months of 2024.

Current wording

Losses incurred during the first nine months of 2025 and 2024 were both impacted by favorable reserve adjustments. During the first nine months of 2025, we released reserves of $140 million primarily on prior accident year reserves driven by cure performance of delinquencies from 2024 and prior years. During the first nine months of 2024, we released reserves of $196 million primarily due to better than expected cure performance on delinquencies from 2023 and prior years. As part of the reserve adjustments in 2024, we also decreased our claim rate assumptions for new and existing delinquencies as a result of sustained favorable cure performance and lessening uncertainty in the economic environment. New primary delinquencies of 36,802 contributed $223 million of loss expense in the first nine months of 2025. This compares to $209 million of loss expense from 34,820 new primary delinquencies in the first nine months of 2024.

Previous wording

The loss on debt extinguishment for the three months ended June 30, 2024, relates to the expenses incurred associated with the redemption of our 2025 Notes.

Current wording

The loss on debt extinguishment for the nine months ended September 30, 2024, relates to the expenses incurred associated with the redemption of our 2025 Notes.

Previous wording

Interest expense primarily relates to our 2025 Notes and 2029 Notes. For additional details see Note 7 to our unaudited condensed consolidated financial statements.

Current wording

Interest expense for the nine months ended September 30, 2025, primarily relates to our 2029 Notes, while interest expense for the nine months ended September 30, 2024, primarily relates to 2025 Notes and 2029 Notes. For additional details see Note 7 to our unaudited condensed consolidated financial statements.

Previous wording

The effective tax rate was 21.7% and 21.8% for the six months ended June 30, 2025 and 2024, respectively, consistent with the United States corporate federal income tax rate.

Current wording

The effective tax rate was 21.8% and 21.6% for the nine months ended September 30, 2025 and 2024, respectively, consistent with the United States corporate federal income tax rate.

Previous wording

“Adjusted operating income” is defined as U.S. GAAP net income excluding the effects of (i) net investment gains (losses), (ii) restructuring costs and infrequent or unusual non-operating items, and (iii) gains (losses) on the extinguishment of debt.

Current wording

“Adjusted operating income” is defined as U.S. GAAP net income excluding the effects of (i) net investment gains (losses), (ii) reorganization or restructuring costs and infrequent or unusual non-operating items, and (iii) gains (losses) on the extinguishment of debt.

Previous wording

(ii)Restructuring costs and infrequent or unusual non-operating items are also excluded from adjusted operating income if, in our opinion, they are not indicative of overall operating trends.

Current wording

(ii)Reorganization or restructuring costs and infrequent or unusual non-operating items are also excluded from adjusted operating income if, in our opinion, they are not indicative of overall operating trends.

Previous wording

Adjusted operating income decreased for the six months ended June 30, 2025, as compared to June 30, 2024, primarily due to higher losses, partially offset by higher net investment income and premiums.

Current wording

Adjusted operating income decreased for the nine months ended September 30, 2025, as compared to September 30, 2024, primarily due to higher losses, partially offset by higher net investment income and lower expenses.

Previous wording

IIF increased since December 31, 2024, as NIW outpaced policy lapse and cancellations. The primary persistency rate was 82% and 83% for the three months ended June 30, 2025 and 2024, respectively. RIF increased since December 31, 2024 primarily as a result of higher IIF.

Current wording

IIF increased since December 31, 2024, as NIW outpaced policy lapse and cancellations. The primary persistency rate was 83% for the three months ended September 30, 2025 and 2024. RIF increased since December 31, 2024 primarily as a result of higher IIF.

Previous wording

Our delinquency management process begins with notification by the loan servicer of a delinquency on an insured loan. “Delinquency” is defined in our master policies as the borrower’s failure to pay when due an amount equal to the scheduled monthly mortgage payment under the terms of the mortgage. Generally, our master policies require an insured to notify us of a delinquency if the borrower fails to make two consecutive monthly mortgage payments prior to the due date of the next mortgage payment. We generally consider a loan to be delinquent and establish required reserves after the insured notifies us that the borrower has failed to make two scheduled mortgage payments. Borrowers default for a variety of reasons, including but not limited to a reduction of income, unemployment, divorce, illness/death, inability to manage credit, falling home prices and interest rate levels. Borrowers may cure delinquencies by making all of the delinquent loan payments, agreeing to a loan modification, or by selling the property in full satisfaction of all amounts due under the mortgage. In most cases, delinquencies that are not cured result in a claim under our policy.

Current wording

Our delinquency management process begins with notification by the loan servicer of a delinquency on an insured loan. “Delinquency” is defined in our master policies as the borrower’s failure to pay when due an amount equal to the scheduled monthly mortgage payment under the terms of the mortgage. Generally, our master policies require an insured to notify us of a delinquency if the borrower fails to make two consecutive monthly mortgage payments prior to the due date of the next mortgage payment. Borrowers default for a variety of reasons, including but not limited to a reduction of income, unemployment, divorce, illness/death, inability to manage credit, falling home prices and interest rate levels. Borrowers may cure delinquencies by making all of the delinquent loan payments, agreeing to a loan modification, or by selling the property in full satisfaction of all amounts due under the mortgage. In most cases, delinquencies that are not cured result in a claim under our policy.

Previous wording

Loss reserves in policy years 2008 and prior are outsized compared to their representation of RIF. The size of these policy years at origination, particularly 2005 through 2008, combined with the significant decline in home prices led to significant losses in policy years prior to 2009. Although uncertainty remains with respect to the ultimate losses we will experience on these policy years, they have become a smaller percentage of our total mortgage insurance portfolio. The concentration of loss reserves has shifted to newer book years in line with changes in RIF. As of June 30, 2025, our 2018 and newer policy years represented approximately 95% of our primary RIF and 83% of our total direct primary case reserves.

Current wording

Loss reserves in policy years 2008 and prior are outsized compared to their representation of RIF. The size of these policy years at origination, particularly 2005 through 2008, combined with the significant decline in home prices led to significant losses in policy years prior to 2009. Although uncertainty remains with respect to the ultimate losses we will experience on these policy years, they have become a smaller percentage of our total mortgage insurance portfolio. The concentration of loss reserves has shifted to newer book years in line with changes in RIF. As of September 30, 2025, our 2018 and newer policy years represented approximately 95% of our primary RIF and 85% of our total direct primary case reserves.

Previous wording

Our most significant source of operating cash flows is premiums received from our insurance policies, while our most significant uses of operating cash flows are generally for claims paid on our insured policies and our operating expenses. Net cash provided by operating activities increased largely due to higher net investment income and premiums. Cash flows from operations were also impacted by net investment losses and changes in reserves and unearned premiums.

Current wording

Our most significant source of operating cash flows is premiums received from our insurance policies, while our most significant uses of operating cash flows are generally for claims paid on our insured policies and our operating expenses. Net cash provided by operating activities increased largely due to higher net investment income and premiums. Cash flows from operations were also impacted by net investment losses, changes in reserves and the timing of tax payments.

Previous wording

During the six months ended June 30, 2025, our cash flows from financing activities included dividends paid of $60 million and share repurchases of $150 million. The amount and timing of future dividends is discussed within “—Trends and Conditions” as well as below. During the six months ended June 30, 2024, our cash flows from financing activities included dividends paid of $55 million and share repurchases of $98 million. Our cash flows from financing activities during the six months ended June 30, 2024 also included the issuance of our 2029 Notes and the redemption of our 2025 Notes.

Current wording

During the nine months ended September 30, 2025, our cash flows from financing activities included dividends paid of $91 million and share repurchases of $255 million. The amount and timing of future dividends is discussed within “—Trends and Conditions” as well as below. During the nine months ended September 30, 2024, our cash flows from financing activities included dividends paid of $83 million and share repurchases of $169 million. Our cash flows from financing activities during the nine months ended September 30, 2024 also included the issuance of our 2029 Notes and the redemption of our 2025 Notes.

Previous wording

On June 30, 2022, we entered into a credit agreement with a syndicate of lenders that provides for a five-year, unsecured revolving credit facility (the “Facility”) in the initial aggregate principal amount of $200 million. The Facility matures in June 2027, but under certain conditions EHI may need to repay any outstanding amounts and terminate the Facility earlier than the maturity date. We may use borrowings under the Facility for working capital needs and general corporate purposes, including the execution of dividends to our shareholders and capital contributions to our insurance subsidiaries. The Facility contains several covenants, including financial covenants relating to minimum net worth, capital and liquidity levels, maximum debt to capitalization level and PMIERs compliance. We are in compliance with all covenants of the Facility and the Facility has remained undrawn through June 30, 2025.

Current wording

On September 30, 2025, we entered into a credit agreement with a syndicate of lenders that provides for a five-year, unsecured revolving credit facility (the “2025 Revolving Credit Facility”) in the initial aggregate principal amount of $435 million, which replaces the previous $200 million senior unsecured revolving credit facility. The 2025 Revolving Credit Facility matures in September 2030, but under certain conditions EHI may need to repay any outstanding amounts and terminate the 2025 Revolving Credit Facility earlier than the maturity date. We may use borrowings under the 2025 Revolving Credit Facility for working capital needs and general corporate purposes, including the execution of dividends to our shareholders and capital contributions to our insurance subsidiaries. The 2025 Revolving Credit Facility contains several covenants, including financial covenants relating to minimum net worth, maximum debt to capitalization level and PMIERs compliance. We are in compliance with all covenants of the 2025 Revolving Credit Facility and the 2025 Revolving Credit Facility has remained undrawn through September 30, 2025.

Previous wording

The ability of our regulated insurance operating subsidiaries to pay dividends and distributions to us is restricted by certain provisions of North Carolina insurance laws. Our insurance subsidiaries may pay dividends only from unassigned surplus; payments made from sources other than unassigned surplus, such as paid-in and contributed surplus, are categorized as distributions. Notice of all dividends must be submitted to the Commissioner of the NCDOI (the “Commissioner”) within 5 business days after declaration of the dividend, and at least 30 days before payment thereof. No dividend may be paid until 30 days after the Commissioner has received notice of the declaration thereof and (i) has not within that period disapproved the payment or (ii) has approved the payment within the 30-day period. Any distribution, regardless of amount, requires that same 30-day notice to the Commissioner, but also requires the Commissioner’s affirmative approval before being paid. Based on our estimated statutory results and in accordance with applicable dividend restrictions, our insurance subsidiaries have the capacity to pay dividends from unassigned surplus of $64 million as of June 30, 2025, with 30-day advance notice to the Commissioner of the intent to pay. In addition to dividends and distributions, alternative mechanisms, such as share repurchases, subject to any requisite regulatory approvals, may be utilized from time to time to upstream surplus.

Current wording

The ability of our regulated insurance operating subsidiaries to pay dividends and distributions to us is restricted by certain provisions of North Carolina insurance laws. Our insurance subsidiaries may pay dividends only from unassigned surplus; payments made from sources other than unassigned surplus, such as paid-in and contributed surplus, are categorized as distributions. Notice of all dividends must be submitted to the Commissioner of the NCDOI (the “Commissioner”) within 5 business days after declaration of the dividend, and at least 30 days before payment thereof. No dividend may be paid until 30 days after the Commissioner has received notice of the declaration thereof and (i) has not within that period disapproved the payment or (ii) has approved the payment within the 30-day period. Any distribution, regardless of amount, requires that same 30-day notice to the Commissioner, but also requires the Commissioner’s affirmative approval before being paid. Based on our estimated statutory results and in accordance with applicable dividend restrictions, our insurance subsidiaries have the capacity to pay dividends from unassigned surplus of $3 million as of September 30, 2025, with 30-day advance notice to the Commissioner of the intent to pay. In addition to dividends and distributions, alternative mechanisms, such as share repurchases, subject to any requisite regulatory approvals, may be utilized from time to time to upstream surplus.

Previous wording

EMICO paid dividends of approximately $130 million and $200 million in June 2025 and March 2025, respectively, that will primarily be used to support our ability to return capital to shareholders and bolster financial flexibility. We intend to continue to use future EMICO dividends and distributions for these purposes.

Current wording

EMICO paid dividends of approximately $130 million, $130 million and $200 million in September 2025, June 2025 and March 2025, respectively, that will primarily be used to support our ability to return capital to shareholders and bolster financial flexibility. We intend to continue to use future EMICO dividends and distributions for these purposes.

Previous wording

The credit agreement requires EHI to maintain the following financial covenants: a minimum consolidated net worth equal to the sum of (i) 72.5% of EHI’s consolidated net worth as of June 30, 2022 (“the Closing Date”), (ii) 50% of EHI’s positive consolidated net income for each fiscal quarter after the Closing Date and (iii) 50% of any increase in EHI’s consolidated net worth after the Closing Date resulting from equity issuances or capital contributions; in respect of EMICO, a minimum total adjusted capital amount equal to 72.5% of EMICO’s total adjusted capital as of the Closing Date; a maximum debt-to-total capitalization ratio of 0.35 to 1.00; a minimum liquidity level of $25,000,000; and compliance with all applicable financial requirements under the Private Mortgage Insurer Eligibility Requirements published by the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association. For purposes of determining EHI’s compliance with the foregoing financial covenants, the consolidated net worth metric, total adjusted capital metric, debt-to-capitalization ratio and liquidity metric (including, in each case, any component thereof) are each calculated as set forth in the credit agreement.

Current wording

The revolving credit agreement requires EHI to maintain the following financial covenants: a minimum consolidated net worth equal to the sum of (i) $3,729,000,000, (ii) 50% of cumulative consolidated net income of the Company for each fiscal quarter of the Company (beginning with the fiscal quarter ending September 30, 2025) for which consolidated net income is positive, and (iii) 50% of any increase in the consolidated net worth of the Company after September 30, 2025 resulting from the issuance of capital stock by or capital contributions to, in each case, the Company or any of its subsidiaries; a maximum debt-to-total capitalization ratio of 0.35 to 1.00; and compliance with all applicable financial requirements under the Private Mortgage Insurer Eligibility Requirements published by the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association. For purposes of determining EHI’s compliance with the foregoing financial covenants, the consolidated net worth metric and debt-to-capitalization ratio (including, in each case, any component thereof) are each calculated as set forth in the credit agreement.

Previous wording

As of June 30, 2025, we maintained liquidity in the form of cash and cash equivalents of $613 million compared to $599 million as of December 31, 2024, and we also held significant levels of investment-grade fixed maturity securities and short-term investments that can be monetized should our cash and cash equivalents be insufficient to meet our obligations.

Current wording

As of September 30, 2025, we maintained liquidity in the form of cash and cash equivalents of $544 million compared to $599 million as of December 31, 2024, and we also held significant levels of investment-grade fixed maturity securities and short-term investments that can be monetized should our cash and cash equivalents be insufficient to meet our obligations.

Previous wording

On June 30, 2022, we entered into a five-year, unsecured revolving credit facility with a syndicate of lenders in the initial aggregate principal amount of $200 million. The Facility matures in June 2027, but under certain conditions EHI may need to repay any outstanding amounts and terminate the Facility earlier than the maturity date. The Facility may be used for working capital needs and general corporate purposes, including the execution of dividends to our shareholders and capital contributions to our insurance subsidiaries. The Facility has remained undrawn through June 30, 2025.

Current wording

On September 30, 2025, we entered into a five-year, unsecured revolving credit facility with a syndicate of lenders in the initial aggregate principal amount of $435 million. The 2025 Revolving Credit Facility matures in September 2030, but under certain conditions EHI may need to repay any outstanding amounts and terminate the 2025 Revolving Credit Facility earlier than the maturity date. The 2025 Revolving Credit Facility may be used for working capital needs and general corporate purposes, including the execution of dividends to our shareholders and capital contributions to our insurance subsidiaries. The 2025 Revolving Credit Facility has remained undrawn through September 30, 2025.

Previous wording

The principal sources of liquidity in our business currently include insurance premiums, net investment income and cash flows from investment sales and maturities. We believe that our assets and the operating cash flows generated by our mortgage insurance subsidiary will provide the funds necessary to satisfy our claim payments, operating expenses and taxes in both the short term and long term. However, our subsidiaries are subject to regulatory and other capital restrictions with respect to the payment of dividends. We currently have no material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity, other than the 2029 Notes and the Facility.

Current wording

The principal sources of liquidity in our business currently include insurance premiums, net investment income and cash flows from investment sales and maturities. We believe that our assets and the operating cash flows generated by our mortgage insurance subsidiary will provide the funds necessary to satisfy our claim payments, operating expenses and taxes in both the short term and long term. However, our subsidiaries are subject to regulatory and other capital restrictions with respect to the payment of dividends. We currently have no material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity, other than the 2029 Notes and the 2025 Revolving Credit Facility.

Previous wording

In August 2023, Enact Re was independently assigned a rating of A- by third-party rating organization A.M. Best. In August 2024, Enact Re was independently assigned a rating of A- by S&P Global Ratings.

Current wording

Enact Re is currently assigned a rating of A- by A.M. Best and a rating of A- by S&P Global Ratings.

Previous wording

Refer to Note 2 in our unaudited condensed consolidated financial statements for the six months ended June 30, 2025 and 2024, and in our audited consolidated financial statements for the years ended December 31, 2024 and 2023, for a discussion of recently adopted and not yet adopted accounting standards.

Current wording

Refer to Note 2 in our unaudited condensed consolidated financial statements for the nine months ended September 30, 2025 and 2024, and in our audited consolidated financial statements for the years ended December 31, 2024 and 2023, for a discussion of recently adopted and not yet adopted accounting standards.