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What changed in NMI Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NMI Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+386 added−457 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-14)

Top changes in NMI Holdings, Inc.'s 2025 10-K

386 paragraphs added · 457 removed · 347 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

107 edited+14 added−15 removed191 unchanged
Biggest changeSince 2016, we have entered into the following types of reinsurance transactions which provide risk protection on both a retrospective and prospective basis: • fully collateralized ILN coverage on mortgage insurance policies that we have already issued with special purpose insurers funding such reinsurance obligations through the issuance of insurance-linked notes; • XOL reinsurance arrangements with third party reinsurers on mortgage insurance policies that we have already issued; and • QSR arrangements in which third party reinsurers agree to prospectively reinsure a portion of the risk on mortgage insurance policies that we write.
Biggest changeWe currently have both quota share and excess of loss reinsurance agreements in place. 14 Since 2016, we have entered into the following types of reinsurance transactions which provide risk protection on both a retrospective and prospective basis: • QSR arrangements in which third-party reinsurers agree to prospectively reinsure a portion of the risk on mortgage insurance policies that we write; • XOL reinsurance arrangements with third-party reinsurers on mortgage insurance policies that we have already issued; and • fully collateralized ILN coverage on mortgage insurance policies that we have already issued with special purpose insurers funding such reinsurance obligations through the issuance of insurance-linked notes.
For further information, see Part II, Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 6, Reinsurance. ” Enterprise Risk Management We have established enterprise wide policies, procedures and processes to allow us to identify, assess, monitor and manage credit market and operational risks in our business, as well as other risks discussed below in Item 1A, " Risk Factors ." Management of these risks is an interdepartmental endeavor including specific operational responsibilities and ongoing senior management and compliance personnel oversight.
For further information, see Part II, Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 6, Reinsurance. ” Enterprise Risk Management We have established enterprise wide policies, procedures and processes to allow us to identify, assess, monitor and manage credit market and operational risks in our business, as well as other risks discussed below in Item 1A, “ Risk Factors .” Management of these risks is an interdepartmental endeavor including specific operational responsibilities and ongoing senior management and compliance personnel oversight.
The risk-based required asset amount is a function of the risk profile of an approved insurer's RIF, assessed on a loan-by-loan basis and considered against certain risk-based factors derived from tables set out in the PMIERs to gross RIF, which is then adjusted on an aggregate basis for reinsurance transactions approved by the GSEs, such as with respect to our ILN Transactions, QSR Transactions and XOL Transactions.
The risk-based required asset amount is a function of the risk profile of an approved insurer's RIF, assessed on a loan-by-loan basis and considered against certain risk-based factors derived from tables set out in the PMIERs to gross RIF, which is then adjusted on an aggregate basis for reinsurance transactions approved by the GSEs, such as with respect to our QSR Transactions, XOL Transactions and ILN Transactions.
Ability-to-Repay and Qualified Mortgage Rules The CFPB issued final regulations, effective in 2014 and subsequently revised, requiring a residential mortgage loan originator to make a good faith determination, at the time a loan is originated, that the consumer has a reasonable ability to repay the loan (ATR).
Ability-to-Repay and Qualified Mortgage Rules The CFPB issued final regulations, effective in 2014 and subsequently revised, requiring a residential mortgage loan originator to make a good faith determination, at the time a loan is originated, that the consumer has a reasonable ATR the loan.
Credit Market Risk We have implemented a complementary range of strategies to actively monitor and manage the credit performance of our insured portfolio, including: • establishing prudential underwriting standards and loan-level eligibility matrices which describe the maximum LTV, minimum FICO, maximum borrower DTI ratio, maximum loan size, property type and occupancy status of loans that we will insure, and memorializing these standards and eligibility matrices in our underwriting guidelines; • conducting diligence of our lender customers before and after we formally engage with them to ensure they have appropriate financial resources, operational capabilities, management experience and a track record of strong origination quality, and subjecting them to well-defined parameters regarding underwriting delegation status, credit guideline requirements and, on a more limited basis, variances; • implementing a quality control process to ensure ongoing adherence with our underwriting guidelines and eligibility criteria, under which our quality control group performs audits of insured loans identified on a random, 13 high risk and targeted basis to measure the quality of the underwriting decision and loan closing process, and specifically assess the accuracy and adequacy of the information and documentation used to underwrite our MI; • setting concentration limits to regulate the aggregation of loan-level risks in our overall portfolio and manage our overall portfolio exposure to certain risk classes that typically experience greater volatility and loss during periods of economic and housing market downturns, such as higher LTV loans, loans with higher borrower DTIs, investor loans, cash-out refinances, certain state concentration levels and several other borrower or loan attributes; • individually underwriting the majority of the loans we insure through our non-delegated platform and DAR validation process, in order to evaluate borrower and loan-level risk characteristics on an individual policy level, and monitor and assess the manufacturing capabilities of our lender customers in order to provide them feedback to help enhance their own production and control processes; • designing, developing and deploying Rate GPS ® , our proprietary risk-based pricing platform, to dynamically consider a granular set of risk attributes in our policy pricing process and assign individualized premium rates based on the relative risk and anticipated performance of each loan we insure; • further utilizing Rate GPS ® to actively manage the flow of business into our portfolio and target loans with higher quality risk characteristics that typically experience lower volatility and loss across market cycles; and • securing reinsurance coverage under quota share and excess-of-loss transactions that are structured to absorb losses in periods of economic and/or housing market stress and, in doing so, mitigate the impact of credit volatility on our financial results.
Credit Market Risk We have implemented a complementary range of strategies to actively monitor and manage the credit performance of our insured portfolio, including: • establishing prudential underwriting standards and loan-level eligibility matrices which describe the maximum LTV, minimum FICO, maximum borrower DTI ratio, maximum loan size, property type and occupancy status of loans that we will insure, and memorializing these standards and eligibility matrices in our underwriting guidelines; • conducting diligence of our lender customers before and after we formally engage with them to ensure they have appropriate financial resources, operational capabilities, management experience and a track record of strong origination quality, and subjecting them to well-defined parameters regarding underwriting delegation status, credit guideline requirements and, on a more limited basis, variances; • implementing a quality control process to ensure ongoing adherence with our underwriting guidelines and eligibility criteria, under which our quality control group performs audits of insured loans identified on a random, high risk and targeted basis to measure the quality of the underwriting decision and loan closing process, and specifically assess the accuracy and adequacy of the information and documentation used to underwrite our MI; • setting concentration limits to regulate the aggregation of loan-level risks in our overall portfolio and manage our overall portfolio exposure to certain risk classes that typically experience greater volatility and loss during periods of economic and housing market downturns, such as higher LTV loans, loans with higher borrower DTIs, investor loans, cash-out refinances, certain state concentration levels and several other borrower or loan attributes; 15 • individually underwriting the majority of the loans we insure through our non-delegated platform and DAR validation process, in order to evaluate borrower and loan-level risk characteristics on an individual policy level, and monitor and assess the manufacturing capabilities of our lender customers in order to provide them feedback to help enhance their own production and control processes; • designing, developing and deploying Rate GPS ® , our proprietary risk-based pricing platform, to dynamically consider a granular set of risk attributes in our policy pricing process and assign individualized premium rates based on the relative risk and anticipated performance of each loan we insure; • further utilizing Rate GPS ® to actively manage the flow of business into our portfolio and target loans with higher-quality risk characteristics that typically experience lower volatility and loss across market cycles; and • securing reinsurance coverage under quota share and excess-of-loss transactions that are structured to absorb losses in periods of economic and/or housing market stress and, in doing so, mitigate the impact of credit volatility on our financial results.
Among other things, these laws and their implementing regulations prohibit payments for referrals of real estate settlement service business, require fairness and non-discrimination in granting or facilitating the granting of credit and insurance, govern the circumstances under which companies may obtain and use consumer credit information, establish standards for cancellation of BPMI, define the manner in which companies may pursue collection activities, require disclosures of the cost of credit and provide for other consumer protections.
Among other things, these laws and their implementing regulations prohibit payments for referrals of real estate settlement service business, require fairness and non-discrimination in granting or facilitating the granting of credit, govern the circumstances under which companies may obtain and use consumer credit information, establish standards for cancellation of BPMI, define the manner in which companies may pursue collection activities, require disclosures of the cost of credit and provide for other consumer protections.
In general, state insurance regulation of our business relates to: • licenses to transact business; • producer licensing; • policy forms; • premium rates; • insurable loans; • annual and quarterly financial reports prepared in accordance with statutory accounting principles; • determination of loss, unearned premium and contingency reserves; • minimum capital levels and adequacy ratios; • affiliate transactions; • reinsurance transactions and related requirements; • limitations on the types of investment instruments which may be held in an investment portfolio; • the size of risks and limits on coverage of individual risks which may be insured; • special deposits of securities; • stockholder dividends; 18 • insurance policy sales practices; • privacy and cybersecurity; • enterprise risk management; • advertising compliance; • restrictions on transactions that have the effect of inducing lenders to place business with NMIC; and • claims handling.
In general, state insurance regulation of our business relates to: • licenses to transact business; • producer licensing; • policy forms; • premium rates; • insurable loans; • annual and quarterly financial reports prepared in accordance with statutory accounting principles; • determination of loss, unearned premium and contingency reserves; • minimum capital levels and adequacy ratios; • affiliate transactions; • reinsurance transactions and related requirements; • limitations on the types of investment instruments which may be held in an investment portfolio; • the size of risks and limits on coverage of individual risks which may be insured; • special deposits of securities; • stockholder dividends; • insurance policy sales practices; 20 • privacy and cybersecurity; • enterprise risk management; • advertising compliance; • restrictions on transactions that have the effect of inducing lenders to place business with NMIC; and • claims handling.
On March 16, 2022, the FHFA adopted the final rule (effective May 16, 2022) (2022 ERCF amendment) that amended the enterprise regulatory capital framework by refining the prescribed leverage buffer amount and credit risk transfer (CRT) securitization framework for the GSEs, which reduced the amount of capital the GSEs are required to hold, including by increasing the capital credit the GSEs receive for the credit risk that they distribute.
On March 16, 2022, the FHFA adopted the final rule (effective May 16, 2022) (2022 ERCF amendment) that amended the enterprise regulatory capital framework by refining the prescribed leverage buffer amount and CRT securitization framework for the GSEs, which reduced the amount of capital the GSEs are required to hold, including by increasing the capital credit the GSEs receive for the credit risk that they distribute.
We intend to continue to promote legislative and regulatory policies that support a viable and competitive private MI industry and a well-functioning U.S. housing finance system. We are a member of U.S. Mortgage Insurers (USMI ® ), an organization formed to promote the use of private MI as a credit risk mitigant in the U.S. residential mortgage market.
We intend to continue to promote legislative and regulatory policies that support a viable and competitive private MI industry and a well-functioning U.S. housing finance system. We are a member of USMI ® , an organization formed to promote the use of private MI as a credit risk mitigant in the U.S. residential mortgage market.
We have adopted certain policies and procedures, and risk management and security practices designed to facilitate our compliance with these federal and state privacy and information security laws. 25 Fair Credit Reporting Act FCRA imposes restrictions on the permissible use of credit report information. The CFPB and FTC each have authority to enforce FCRA.
We have adopted certain policies and procedures, and risk management and security practices designed to facilitate our compliance with these federal and state privacy and information security laws. Fair Credit Reporting Act FCRA imposes restrictions on the permissible use of credit report information. The CFPB and FTC each have authority to enforce FCRA.
We also review the qualifications of each individual underwriter assigned by our USPs to service our account and provide them with NMI specific systems and guideline training to ensure they have the necessary training to render underwriting decisions consistent with our underwriting guidelines and credit policies.
We also review the qualifications of each individual underwriter assigned by our USPs to service our account and 11 provide them with NMI specific systems and guideline training to ensure they have the necessary training to render underwriting decisions consistent with our underwriting guidelines and credit policies.
There are, however, a number of National Account lenders who opt for a decentralized approach and a number of Regional Account lenders who opt for a centralized approach. 8 The GSEs, as major purchasers of conventional mortgage loans in the U.S., are the primary beneficiaries of our mortgage insurance coverage.
There are, however, a number of National Account lenders who opt for a decentralized approach and a number of Regional Account lenders who opt for a centralized approach. The GSEs, as major purchasers of conventional mortgage loans in the U.S., are the primary beneficiaries of our mortgage insurance coverage.
The incidence of default is affected by a variety of factors, many of which are unforeseen, including a borrowers' loss of income, unemployment, divorce, illness or death. Defaults that are not cured result in a claim to us.
The incidence of default is 13 affected by a variety of factors, many of which are unforeseen, including a borrowers' loss of income, unemployment, divorce, illness or death. Defaults that are not cured result in a claim to us.
The amendments also imposed specific conditions required for the GSEs to exit conservatorship, including the resolution or settlement of all material litigation relating to the conservatorship, and each GSE achieving common equity tier 1 capital of at least 3% of its total assets. 21 On September 14, 2021, the FHFA together with the Treasury Department announced the suspension of certain portions of the 2021 PSPA amendments, specifically those limiting certain GSE lending activities, and that would, among other things, reduce the amount of capital the GSEs are required to hold.
The amendments also imposed specific conditions required for the GSEs to exit conservatorship, including the resolution or settlement of all material litigation relating to the conservatorship, and each GSE achieving common equity tier 1 capital of at least 3% of its total assets. 23 On September 14, 2021, the FHFA together with the Treasury Department announced the suspension of certain portions of the 2021 PSPA amendments, specifically those limiting certain GSE lending activities, and that would, among other things, reduce the amount of capital the GSEs are required to hold.
Private industry participants include national and regional mortgage banks, money center banks, mortgage brokers, community banks, builder-owned mortgage lenders, internet-sourced lenders, commercial, regional and investment banks, savings 5 institutions, credit unions, real estate investment trusts and other financial institutions.
Private industry participants include national and regional mortgage banks, money center banks, mortgage brokers, community banks, builder-owned mortgage lenders, internet-sourced lenders, commercial, regional and investment banks, savings institutions, credit unions, real estate investment trusts and other financial institutions.
We understand that the primary purpose underlying this restriction, which is referred to in the industry as a "monoline" requirement, is to make it easier for regulators to assess the overall risk in a mortgage insurer's insurance portfolio, to determine its capital adequacy under varying economic scenarios and to prevent the depletion of capital due to the diversion of financial resources in support of non-MI lines of business.
We understand that the primary purpose underlying this restriction, which is referred to in the industry as a “monoline” requirement, is to make it easier for regulators to assess the overall risk in a mortgage insurer's insurance portfolio, to determine its capital adequacy under varying economic scenarios and to prevent the depletion of capital due to the diversion of financial resources in support of non-MI lines of business.
The passage of FHA reform legislation in either the House or Senate, and how differences in proposed reforms between the House and Senate might be resolved in any final legislation, remain uncertain. 22 The Dodd-Frank Act The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended certain provisions of TILA, RESPA and other statutes that have had a significant impact on our business and the residential mortgage market.
The passage of FHA reform legislation in either the House or Senate, and how differences in proposed reforms between the House and Senate might be resolved in any final legislation, remain uncertain. 24 The Dodd-Frank Act The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended certain provisions of TILA, RESPA and other statutes that have had a significant impact on our business and the residential mortgage market.
Fluctuations in refinancing volume (driven by changes in prevailing mortgage rates) may serve to mute or magnify the seasonal effect of home purchase patterns on mortgage insurance NIW. Independent Validation and Rescission Relief We offer post-close underwriting reviews, which we refer to as "independent validations," for both non-delegated and delegated loans, as described below.
Fluctuations in refinancing volume (driven by changes in prevailing mortgage rates) may serve to mute or magnify the seasonal effect of home purchase patterns on mortgage insurance NIW. Independent Validation and Rescission Relief We offer post-close underwriting reviews, which we refer to as “independent validations,” for both non-delegated and delegated loans, as described below.
An asset charge is calculated for each insured loan based on its risk profile. In general, higher quality loans carry lower charges. 17 Under the PMIERs, approved insurers must maintain available assets that equal or exceed minimum required assets , which is an amount equal to the greater of (i) $400 million or (ii) a total risk-based required asset amount.
An asset charge is calculated for each insured loan based on its risk profile. In general, higher-quality loans carry lower charges. Under the PMIERs, approved insurers must maintain available assets that equal or exceed minimum required assets , 19 which is an amount equal to the greater of (i) $400 million or (ii) a total risk-based required asset amount.
MI plays a critical role in the U.S. housing market by mitigating mortgage credit risk and facilitating the secondary market sale of high loan-to-value (LTV) ( i.e., above 80%) residential loans to the GSEs, who are otherwise restricted by their charters from purchasing or guaranteeing high-LTV mortgages that are not covered by certain credit protections.
MI plays a critical role in the U.S. housing market by mitigating mortgage credit risk and facilitating the secondary market sale of high-LTV ( i.e., above 80%) residential loans to the GSEs, who are otherwise restricted by their charters from purchasing or guaranteeing high-LTV mortgages that are not covered by certain credit protections.
Information contained or referenced on our website is not incorporated by reference into, and does not form a part of, this report. 16 U.S. MORTGAGE INSURANCE REGULATION As discussed below, private mortgage insurers operating in the U.S. are subject to comprehensive state and federal regulation and to significant oversight by the GSEs, the primary beneficiaries of our insurance coverage.
Information contained or referenced on our website is not incorporated by reference into, and does not form a part of, this report. 18 U.S. MORTGAGE INSURANCE REGULATION As discussed below, private mortgage insurers operating in the U.S. are subject to comprehensive state and federal regulation and to significant oversight by the GSEs, the primary beneficiaries of our insurance coverage.
These are typically referred to as “risk-to-capital (RTC) requirements.” While formulations of minimum capital may vary in certain jurisdictions, the most common measure applied allows for a maximum permitted RTC ratio of 25:1. Wisconsin has formula-based limits that generally result in RTC limits slightly higher than the 25:1 ratio. We compute the RTC ratio for NMIC.
These are typically referred to as “RTC requirements.” While formulations of minimum capital may vary in certain jurisdictions, the most common measure applied allows for a maximum permitted RTC ratio of 25:1. Wisconsin has formula-based limits that generally result in RTC limits slightly higher than the 25:1 ratio. We compute the RTC ratio for NMIC.
If BPMI coverage is not canceled at the borrower's request or by the automatic termination provision, the mortgage servicer must terminate such BPMI coverage by the first day of the month following the date that is the midpoint of the loan's amortization, assuming the borrower is current on the required mortgage payments. 24 Section 8 of RESPA Section 8 of RESPA applies to most residential mortgages insured by us.
If BPMI coverage is not canceled at the borrower's request or by the automatic termination provision, the mortgage servicer must terminate such BPMI coverage by the first day of the month following the date that is the midpoint of the loan's amortization, assuming the borrower is current on the required mortgage payments. 26 Section 8 of RESPA Section 8 of RESPA applies to most residential mortgages insured by us.
Government participants include government agencies such as the government MIs ( e.g. , FHA, USDA and VA) and Ginnie Mae, as well as government-sponsored enterprises, such as Fannie Mae and Freddie Mac.
Government participants include 7 government agencies such as the government MIs ( e.g. , FHA, USDA and VA) and Ginnie Mae, as well as government-sponsored enterprises, such as Fannie Mae and Freddie Mac.
We certified to the GSEs by April 15, 2024 that NMIC was in full compliance with the PMIERs as of December 31, 2023. NMIC also has an ongoing obligation to immediately notify the GSEs in writing upon discovery of a failure to meet one or more PMIERs requirements. We continuously monitor NMIC's compliance with the PMIERs.
We certified to the GSEs by April 15, 2025 that NMIC was in full compliance with the PMIERs as of December 31, 2024. NMIC also has an ongoing obligation to immediately notify the GSEs in writing upon discovery of a failure to meet one or more PMIERs requirements. We continuously monitor NMIC's compliance with the PMIERs.
Revenues from our customers have been generated in the U.S. only. Customers exceeding 10% of consolidated revenues No individual customer accounted for greater than 10% of our consolidated revenues in 2024. Sales and Marketing Our sales and marketing efforts are designed to help us establish and maintain high-quality customer relationships.
Revenues from our customers have been generated in the U.S. only. 10 Customers exceeding 10% of consolidated revenues No individual customer accounted for greater than 10% of our consolidated revenues in 2025. Sales and Marketing Our sales and marketing efforts are designed to help us establish and maintain high-quality customer relationships.
Policies with premium payments made by the borrower are referred to as borrower-paid mortgage insurance (BPMI) and those with premium payments made by the lender are referred to as lender-paid mortgage insurance (LPMI). Lenders may structure loans to recover LPMI premiums from borrowers, including through increases in mortgage note rates or higher origination fees.
Policies with premium payments made by the borrower are referred to as BPMI and those with premium payments made by the lender are referred to as LPMI. Lenders may structure loans to recover LPMI premiums from borrowers, including through increases in mortgage note rates or higher origination fees.
On September 9, 2022, the U.S. banking regulators announced their intent to revise U.S. 23 regulatory capital requirements to align them with Basel IV. On July 27, 2023, the U.S. banking regulators jointly issued a proposed rule that would revise large bank capital requirements.
On September 9, 2022, the U.S. banking regulators announced their intent to revise U.S. regulatory capital requirements to align them with Basel IV. On July 27, 2023, the U.S. banking regulators jointly issued a 25 proposed rule that would revise large bank capital requirements.
In addition, our insurance subsidiaries may make or 19 pay “extraordinary” stockholder dividends ( i.e. , amounts in excess of ordinary dividends) only with the prior approval of the Wisconsin OCI. In addition to Wisconsin, other states may limit or restrict our insurance subsidiaries' ability to pay stockholder dividends.
In addition, our insurance subsidiaries may make or pay “extraordinary” stockholder dividends ( i.e. , amounts in excess of ordinary dividends) only with the prior approval of the Wisconsin OCI. 21 In addition to Wisconsin, other states may limit or restrict our insurance subsidiaries' ability to pay stockholder dividends.
The Dodd-Frank Act provides for a statutory presumption that a borrower will have the ability to repay a loan if the loan has the characteristics of a qualified mortgage (QM) as defined in the CFPB’s regulations, which has defined several types of QMs.
The Dodd-Frank Act provides for a statutory presumption that a borrower will have the ability to repay a loan if the loan has the characteristics of a QM as defined in the CFPB’s regulations, which has defined several types of QMs.
Our premiums are based on statutory rating rules and rates that we file with various state insurance departments. We establish our premium rates based on models that assess risk across a spectrum of variables, including coverage percentages, LTV ratios, loan and property attributes, borrower debt-to-income (DTI) and credit score profiles, and market and macroeconomic conditions.
Our premiums are based on statutory rating rules and rates that we file with various state insurance departments. We establish our premium rates based on models that assess risk across a spectrum of variables, including coverage percentages, LTV ratios, loan and property attributes, borrower DTI and credit score profiles, and market and macroeconomic conditions.
Such credit protection and secondary market sales allow lenders to increase their capacity for mortgage commitments and expand financing access to existing and prospective homeowners. NMI Holdings, Inc. (NMIH), a Delaware corporation, was incorporated in May 2011, and we began start-up operations in 2012 and wrote our first MI policy in 2013.
Such credit protection and secondary market sales allow lenders to increase their capacity for mortgage commitments and expand financing access to existing and prospective homeowners. NMIH, a Delaware corporation, was incorporated in May 2011, and we began start-up operations in 2012 and wrote our first MI policy in 2013.
Our 2020 Master Policy provides for a "closing document exception," which permits eligible non-delegated lenders to obtain early rescission relief without post-close independent validations of qualifying loans, if the borrower makes the first 12 mortgage payments from their own funds in a timely manner.
Our 2020 Master Policy provides for a “closing document exception,” which permits eligible non-delegated lenders to obtain early rescission relief without post-close independent validations of qualifying loans, if the borrower makes the first 12 mortgage payments from their own funds in a timely manner.
Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (SEC), and can be viewed at sec.gov.
Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC, and can be viewed at sec.gov.
The PMIERs financial requirements prescribe a risk-based methodology whereby the amount of assets required to be held against each insured loan is determined based on certain risk characteristics, such as FICO, vintage (year of origination), performing vs. non-performing ( i.e. , current vs. delinquent), LTV and other risk features.
The PMIERs financial requirements prescribe a risk-based methodology whereby the amount of assets required to be held against each insured loan is determined based on certain risk characteristics, such as credit score, vintage (year of origination), performing vs. non-performing ( i.e. , current vs. delinquent), LTV and other risk features.
The private MI industry is highly competitive and currently consists of six active participants, including us, Arch Capital Group Ltd., Essent Group Ltd. (Essent), Enact Holdings, Inc., MGIC Investment Corporation (MGIC), and Radian Group Inc. (Radian).
The private MI industry is highly competitive and currently consists of six approved participants, including us, Arch Capital Group Ltd., Essent Group Ltd. (Essent), Enact Holdings, Inc., MGIC Investment Corporation (MGIC), and Radian Group Inc. (Radian).
We refer to such accelerated agreement as "early rescission relief." Our Master Policies generally provide us with the ability to rescind coverage of a loan if there are material misrepresentations, significant underwriting defects and/or fraud later identified in the origination process of such loan.
We refer to such accelerated agreement as “early rescission relief.” Our Master Policies generally provide us with the ability to rescind coverage of a loan if there are material misrepresentations, significant underwriting defects and/or fraud later identified in the origination process of such loan.
A borrower who has a "good payment history," as defined by HOPA, may generally request cancellation of BPMI when the LTV is first scheduled to reach 80% of the home's original value or when actual payments reduce the loan balance to 80% of the home's original value, whichever occurs earlier.
A borrower who has a “good payment history,” as defined by HOPA, may generally request cancellation of BPMI when the LTV is first scheduled to reach 80% of the home's original value or when actual payments reduce the loan balance to 80% of the home's original value, whichever occurs earlier.
Since formation, we have sought to establish customer relationships with a broad group of mortgage lenders and build a diversified, high-quality insured portfolio. As of December 31, 2024, we had issued master policies with 2,086 customers, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders and other non-bank lenders.
Since formation, we have sought to establish customer relationships with a broad group of mortgage lenders and build a diversified, high-quality insured portfolio. As of December 31, 2025, we had issued master policies with 2,193 customers, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders and other non-bank lenders.
We deem a reduction in the claim amount to be a "curtailment." Under our Master Policies, insureds, typically through their servicers, must obtain prior approval from us before executing a deed-in-lieu of foreclosure, short sale or loan modification.
We deem a reduction in the claim amount to be a “curtailment.” Under our Master Policies, insureds, typically through their servicers, must obtain prior approval from us before executing a deed-in-lieu of foreclosure, short sale or loan modification.
Competition Our competition includes other private mortgage insurers, government MIs and other alternatives designed to eliminate the need for MI, such as piggy-back loans or front-end risk sharing arrangements that do not require private MI on loans sold to the GSEs.
Competition Our competition includes other private mortgage insurers, government-run MI programs, and other alternatives designed to eliminate the need for MI, such as piggy-back loans or front-end risk sharing arrangements that do not require private MI on loans sold to the GSEs.
We have adopted an investment policy that defines, among other things, eligible and ineligible investments, concentration limits for asset types, industry sectors, single issuers, and certain credit ratings, and includes benchmarks for asset duration. Our investments are rated by one or more nationally recognized statistical rating organizations.
Treasury Bills and commercial paper. We have adopted an investment policy that defines, among other things, eligible and ineligible investments, concentration limits for asset types, industry sectors, single issuers, and certain credit ratings, and includes benchmarks for asset duration. Our investments are rated by one or more nationally recognized statistical rating organizations.
In December 2017, the Basel Committee published final revisions to Basel III (informally known as "Basel IV") with target implementation by each participating country by January 1, 2022, later extended to January 1, 2023 due to the COVID-19 pandemic.
In December 2017, the Basel Committee published final revisions to Basel III (informally known as “Basel IV”) with target implementation by each participating country by January 1, 2022, later extended to January 1, 2023 due to the COVID-19 pandemic.
Great Place to Work ® is a global authority on workplace culture, employee experience and leadership, and partners with FORTUNE magazine to produce the annual FORTUNE "100 Best Companies to Work For” list. 15 Available Information Our principal office is located at 2100 Powell Street, 12th floor, Emeryville, CA 94608.
Great Place to Work ® is a global authority on workplace culture, employee experience and leadership, and partners with FORTUNE magazine to produce the annual FORTUNE “100 Best Companies to Work For” list. 17 Available Information Our principal office is located at 2100 Powell Street, 12th floor, Emeryville, CA 94608.
The GLBA and related state and federal regulations implementing its privacy and safeguarding provisions impose privacy and information security requirements on financial institutions, including obligations to protect and safeguard consumers' non-public personal information. GLBA and its implementing regulations are enforced by state insurance regulators and state attorneys general, and by the U.S. Federal Trade Commission (FTC) and the CFPB.
The GLBA and related state and federal regulations implementing its privacy and safeguarding provisions impose privacy and information security requirements on financial institutions, including obligations to protect and safeguard consumers' non-public personal information. GLBA and its implementing regulations are enforced by state insurance regulators and state attorneys general, and by the FTC and the CFPB.
Since the initial development of AXIS, we have continued to upgrade and enhance our systems and technical capabilities, including: • deploying technology that enables our customers to transact business faster and easier, whether via a secure internet connection or through a secure system-to-system interface; • integrating our platform with third-party technology providers used by our customers in their loan origination process to price and order our MI and in their servicing processes for servicing and maintaining their MI policies; • implementing advanced document and business process management software that focuses on improving our underwriting productivity and that may also be used to improve our quality assurance and loss management functions; 14 • launching our award-winning mobile applications, which enable customers to view and access information through mobile devices, including our premium rate calculators, guideline updates and other resources and information notices; and • designing, developing and deploying Rate GPS ® , our risk-based pricing platform, which allows us to dynamically consider a granular set of risk attributes in our policy pricing process and assign individualized rates based on the relative risk and anticipated performance of each loan we insure.
Since the initial development of AXIS, we have continued to upgrade and enhance our systems and technical capabilities, including: • deploying technology that enables our customers to transact business faster and easier, whether via a secure internet connection or through a secure system-to-system interface; • integrating our platform with third-party technology providers used by our customers in their loan origination process to price and order our MI and in their servicing processes for servicing and maintaining their MI policies; • implementing advanced document and business process management software that focuses on improving our underwriting productivity and that may also be used to improve our quality assurance and loss management functions; • launching our award-winning mobile applications, which enable customers to view and access information through mobile devices, including our premium rate calculators, guideline updates and other resources and information notices; and • designing, developing and deploying Rate GPS ® , our risk-based pricing platform, which allows us to dynamically consider a granular set of risk attributes in our policy pricing process and assign individualized rates based on the relative risk and anticipated performance of each loan we insure. 16 We utilize and develop technology that enhances our current operating capabilities and supports future growth, while allowing us to realize current efficiencies.
We expect that most lenders will continue to be reluctant to make loans that do not qualify as QMs because, absent full compliance with the ATR rule, such loans will not be entitled to a "safe-harbor" presumption of compliance with the ability-to-pay requirements.
We expect that most lenders will continue to be reluctant to make loans that do not qualify as QMs because, absent full compliance with the ATR rule, such loans will not be entitled to a “safe-harbor” presumption of compliance with the ability-to-pay requirements.
Subject to limited exceptions, Section 8 of RESPA prohibits persons from giving or accepting anything of value pursuant to an agreement or understanding to refer a "settlement service." MI generally may be considered to be a "settlement service" for purposes of Section 8 of RESPA under applicable regulations.
Subject to limited exceptions, Section 8 of RESPA prohibits persons from giving or accepting anything of value pursuant to an agreement or understanding to refer a “settlement service.” MI generally may be considered to be a “settlement service” for purposes of Section 8 of RESPA under applicable regulations.
While in conservatorship, each GSE has been subject to the terms of Senior Preferred Stock Purchase Agreements, as amended, with the Treasury Department (PSPAs). Pursuant to the PSPAs, the Treasury Department committed to invest in the GSEs to the extent required for each to maintain a positive net worth.
While in conservatorship, each GSE has been subject to the terms of Senior PSPAs, as amended, with the Treasury Department. Pursuant to the PSPAs, the Treasury Department committed to invest in the GSEs to the extent required for each to maintain a positive net worth.
Our Master Policies require our insureds, typically through their servicers, to regularly provide us with reports regarding the statuses of their insured loans, including information on both current and delinquent loans. Generally, servicers submit reports to us on a monthly basis. We are currently integrated with the two largest third-party mortgage servicing systems, Black Knight Financial Services and FiServ.
Our Master Policies require our insureds, typically through their servicers, to regularly provide us with reports regarding the statuses of their insured loans, including information on both current and delinquent loans. Generally, servicers submit reports to us on a monthly basis. We are currently integrated with the two largest third-party mortgage servicing systems, ICE Mortgage Technology and FiServ.
Federal Reserve, the U.S. residential mortgage market is one of the largest in the world, with approximately $13 trillion of mortgage debt outstanding as of December 31, 2024, and includes both primary and secondary components.
Federal Reserve, the U.S. residential mortgage market is one of the largest in the world, with approximately $14 trillion of mortgage debt outstanding as of December 31, 2025, and includes both primary and secondary components.
Anti-Discrimination Laws ECOA requires creditors and insurers to handle applications for credit and for insurance in accordance with specified requirements and prohibits discrimination in lending or insurance based on prohibited factors such as gender, race, ethnicity, age and familial status.
We provide such notices when required. Anti-Discrimination Laws ECOA requires creditors and insurers to handle applications for credit and for insurance in accordance with specified requirements and prohibits discrimination in lending or insurance based on prohibited factors such as gender, race, ethnicity, age and familial status.
NMIS utilizes third-party service providers to conduct individual loan reviews . NMIS third parties have represented and warranted to NMIS that they comply with the requirements of the federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) in all applicable jurisdictions. See “ Business - U.S. Mortgage Insurance Regulation - Other U.S. Regulation - SAFE Act ,” below.
NMIS utilizes third-party service providers to conduct individual loan reviews . NMIS third parties have represented and warranted to NMIS that they comply with the requirements of the SAFE Act in all applicable jurisdictions. See “ Business - U.S. Mortgage Insurance Regulation - Other U.S. Regulation - SAFE Act ,” below.
Customers Since our inception, we have sought to establish customer relationships with a broad group of mortgage lenders. As of December 31, 2024, we had issued Master Policies with 2,086 customers.
Customers Since our inception, we have sought to establish customer relationships with a broad group of mortgage lenders. As of December 31, 2025, we had issued Master Policies with 2,193 customers.
Human Capital Management As of December 31, 2024, we had 230 full-time and part-time employees, and engaged third-party vendors to provide additional IT, underwriting and other support services.
Human Capital Management As of December 31, 2025, we had 225 full-time and part-time employees, and engaged third-party vendors to provide additional IT, underwriting and other support services.
The federal Homeowners Protection Act of 1998 (HOPA) also requires the automatic termination of BPMI on most current loans when the LTV ratio (based on the original value of the underlying property and original amortization schedule of the loan) is first scheduled to reach 78%.
HOPA also requires the automatic termination of BPMI on most current loans when the LTV ratio (based on the original value of the underlying property and original amortization schedule of the loan) is first scheduled to reach 78%.
We refer to our independent validation of delegated loans as our "Delegated Assurance Review" or "DAR" process. Through DAR, we assess and validate the MI underwriting process and decisions made by our delegated customers on an 10 individual loan level basis.
We refer to our independent validation of delegated loans as our “DAR” process. Through DAR, we assess and validate the MI underwriting process and decisions made by our delegated customers on an individual loan level basis.
Mortgage Insurance Tax Deduction In 2006, Congress enacted a private mortgage insurance tax deduction on a temporary basis through the end of 2011. Upon expiration in 2011, Congress temporarily extended the deduction for each tax year from 2012 through 2021. Congress has not extended the deduction to the 2022 and 2023 tax years.
Mortgage Insurance Tax Deduction In 2006, Congress enacted a private mortgage insurance tax deduction on a temporary basis through the end of 2011. Upon expiration in 2011, Congress temporarily extended the deduction for each tax year from 2012 through 2021. Congress did not extend the deduction to the 2022 to 2025 tax years.
Our investment policies and strategies are subject to change depending upon regulatory, economic and market conditions, and our existing or anticipated financial condition and operating requirements. We engage a third-party investment manager Allspring Global Investments, formerly Wells Capital Management, Inc., to assist with day-to-day management of our portfolio and implementation of our investment policy.
Our investment policies and strategies are subject to change depending upon regulatory, economic and market conditions, and our existing or anticipated financial condition and operating requirements. We engage a third-party investment manager to assist with implementation of our investment policy and day-to-day management of our portfolio.
We are also integrated directly with certain lender customers who manage their own servicing systems. These parties' servicing platforms are used by the majority of our larger servicing accounts to exchange billing, payment and certificate level information on a daily or monthly basis.
We are also integrated directly with certain lender customers who manage their own servicing systems. These parties' servicing platforms are used by the majority of our larger servicing accounts to exchange billing, payment and certificate level information on a daily or monthly basis. Servicers may also use our own external facing servicing website to process their servicing transactions.
FCRA has been interpreted by some FTC staff and federal courts to require mortgage insurers to provide "adverse action" notices to consumers if an application for mortgage insurance is declined or offered at higher than the best available rate for the program applied for on the basis of a review of the consumer's credit. We provide such notices when required.
FCRA has been interpreted by some FTC staff and federal courts to require mortgage insurers to provide “adverse action” notices to consumers if an application for mortgage insurance is declined or offered at higher than the best 27 available rate for the program applied for on the basis of a review of the consumer's credit.
FHA Reform We compete with the single-family MI programs of the FHA, which is part of the U.S. Department of Housing and Urban Development (HUD). During the financial crisis, the FHA captured an increasing share of the high-LTV MI market as incumbent private MIs came under significant financial stress.
FHA Reform We compete with the single-family MI programs of the FHA, which is part of the HUD. During the financial crisis, the FHA captured an increasing share of the high-LTV MI market as incumbent private MIs came under significant financial stress.
We aim to achieve diversification as to type, quality, maturity, industry and issuer. At December 31, 2024, our investment portfolio was comprised of investment grade fixed maturity securities, including U.S. Treasury securities and obligations of U.S. government agencies, municipal debt securities, corporate debt securities, and asset-backed securities. We also held short-term investments, such as U.S. Treasury Bills and commercial paper.
We aim to achieve diversification as to type, quality, maturity, industry and issuer. At December 31, 2025, our investment portfolio was comprised of investment grade fixed maturity securities, including U.S. Treasury securities and obligations of U.S. government agencies, municipal debt securities, corporate debt securities, U.S. agency mortgage-backed securities, and asset-backed securities. We also hold short-term investments, such as U.S.
We value collaboration as a company and believe that different perspectives promote innovation and are crucial to the long-term success of our business. As of December 31, 2024, 83% of our employee population identified as members of a diverse group, including 55% as women and 34% as racial/ethnic minorities.
We value collaboration as a company and believe that different perspectives promote innovation and are crucial to the long-term success of our business. As of December 31, 2025, 71% of our employee population identified as members of a diverse group, including 54% as women and 35% as racial/ethnic minorities.
The CFPB has brought a number of enforcement actions under Section 8 of RESPA, including settlements with several private mortgage insurers. The CFPB's interpretation and enforcement of Section 8 of RESPA presents regulatory risk for many providers of "settlement services," including private mortgage insurers.
The CFPB has brought a number of enforcement actions under Section 8 of RESPA, including settlements with several private mortgage insurers. Enforcement of Section 8 of RESPA presents regulatory risk for many providers of “settlement services,” including private mortgage insurers.
Our pricing approach targets through-the-cycle returns that exceed our cost of capital. We believe that Rate GPS ® provides us with a more granular and analytical approach to evaluating and pricing risk, and that it enhances our ability to continue building a high-quality mortgage insurance portfolio and delivering attractive risk-adjusted returns.
We believe that Rate GPS ® provides us with a more granular and analytical approach to evaluating and pricing risk, and that it enhances our ability to continue building a high-quality mortgage insurance portfolio and delivering attractive risk-adjusted returns.
Under Wisconsin law, the Wisconsin OCI has substantial flexibility to restructure an insurance company in a receivership proceeding. The Wisconsin OCI is obligated to maximize the value of an insolvent insurer's estate for the benefit of its policyholders. In all insurance receiverships under state insurance law, policyholder claims are prioritized relative to the claims of stockholders. Other U.S.
The Wisconsin OCI is obligated to maximize the value of an insolvent insurer's estate for the benefit of its policyholders. In all insurance receiverships under state insurance law, policyholder claims are prioritized relative to the claims of stockholders. Other U.S.
Rate GPS ® considers a broad range of variables, including property type, type of loan product, borrower credit characteristics, and lender and market factors, and provides us with the ability to set and charge premium rates commensurate with the underlying risk of each loan that we insure.
Rate GPS ® considers a broad range of individual and layered risk variables, including borrower credit, loan-level, product and lender attributes, as well as market and geographic factors, and provides us with the ability to set and charge premium rates commensurate with the underlying risk of each loan that we insure.
Generally, our Master Policies require our insureds to notify us after a loan is two payments in arrears. We include a loan in our default population and establish claim reserves on such loan when we have received notice from the servicer that as of a particular payment date, the borrower has missed the preceding two or more consecutive monthly payments.
We include a loan in our default population and establish claim reserves on such loan when we have received notice from the servicer that as of a particular payment date, the borrower has missed the preceding two or more consecutive monthly payments.
See “ Business - Underwriting ,” below for a description of our underwriting processes. Our MI coverage attaches at a loan level and remains in effect whether a mortgage is retained by the originating lender or sold, assigned or otherwise transferred in the secondary market.
Our MI coverage attaches at a loan level and remains in effect whether a mortgage is retained by the originating lender or sold, assigned or otherwise transferred in the secondary market.
Re One remains a wholly-owned, licensed insurance subsidiary; however, it does not currently have active insurance exposures. MI protects lenders and investors from default-related losses on a portion of the unpaid principal balance of a covered mortgage.
Such requirements have been repealed and the reinsurance coverage provided by Re One to NMIC has been commuted. Re One remains a wholly-owned, licensed insurance subsidiary; however, it does not currently have active insurance exposures. MI protects lenders and investors from default-related losses on a portion of the unpaid principal balance of a covered mortgage.
We have discretion under our rates and rating rules to flex our premium rates to a limited degree, and we may choose 7 to do so for lenders or programs that meet certain criteria. We generally cannot change premium rates on insured loans after coverage is established.
We have discretion under our rates and rating rules to flex our premium rates to a limited degree, and we may choose to do so for lenders or programs that meet certain criteria.
State insurance receivership law, not federal bankruptcy law, would govern any insolvency or financially hazardous condition of our insurance subsidiaries. The Wisconsin OCI has substantial authority to issue orders or seek to control a state insurance receivership proceeding to address the insolvency or financially hazardous condition of an insurance company that it regulates.
The Wisconsin OCI has substantial authority to issue orders or seek to control a state insurance receivership proceeding to address the insolvency or financially hazardous condition of an insurance company that it regulates. Under Wisconsin law, the Wisconsin OCI has substantial flexibility to restructure an insurance company in a receivership proceeding.
For example, Wisconsin prohibits mortgage insurers from allowing any commission, fee, remuneration, or other compensation to be paid to, or received by, any insured lender, including any subsidiary 20 or affiliate, officer, director, or employee of any insured, any member of their immediate family, any corporation, partnership, trust, trade association in which any insured is a member, or other entity in which any insured or any such officer, director, or employee or any member of their immediate family has a financial interest.
For example, Wisconsin prohibits mortgage insurers from allowing any commission, fee, remuneration, or other compensation to be paid to, or received by, any insured lender, including any subsidiary or affiliate, officer, director, or employee of any insured, any member of their immediate family, any corporation, partnership, trust, trade association in which any insured is a member, or other entity in which any insured or any such officer, director, or employee or any member of their immediate family has a financial interest. 22 MI premium rates are subject to prior approval in certain states, which requirement is designed to protect policyholders against rates that are excessive, inadequate or unfairly discriminatory.
Policy Servicing Our Policy Servicing Department is responsible for various servicing activities related to our Master Policies and certificate administration, premium billing and payment processing. Our Policy Servicing Department primarily interfaces with our insureds' mortgage loan servicers. Some insureds retain the servicing rights and responsibilities for their own loan originations, while others transfer such rights and responsibilities to third-party servicers.
Our Policy Servicing Department primarily interfaces with our insureds' mortgage loan servicers. Some insureds retain the servicing rights and responsibilities for their own loan originations, while others transfer such rights and responsibilities to third-party servicers.
Additionally, Wisconsin has also adopted the annual enterprise risk reporting and “Corporate Governance Annual Disclosure” requirements of the National Association of Insurance Commissioners' (NAIC) model laws. Wisconsin has adopted the NAIC’s amendments to the model holding company act that implement the filing requirement for the group capital calculation (GCC).
Additionally, Wisconsin has also adopted the annual enterprise risk reporting and “Corporate Governance Annual Disclosure” requirements of the NAIC model laws. Wisconsin has adopted the NAIC’s amendments to the model holding company act that implement the filing requirement for the GCC. The GCC uses a risk-based capital aggregation methodology for all entities in an insurance holding company system.
If the Basel Committee revises the Basel IV framework to reduce or eliminate the capital benefit banks receive from insuring low down payment loans with private MI, our current and future business may be adversely affected. Mortgage Servicing Rules Residential mortgage servicing rules under RESPA and TILA, promulgated by the CFPB, went into effect in 2014.
If the Basel Committee revises the Basel IV framework to reduce or eliminate the capital benefit banks receive from insuring low down payment loans with private MI, our current and future business may be adversely affected.
We recognize the valuable contributions of key leaders across our organization and engage in regular succession planning efforts in collaboration with the Board of Directors to ensure business continuity and provide ongoing employee development opportunities.
We recognize the valuable contributions of key leaders across our organization and engage in regular succession planning efforts in collaboration with our Board to ensure business continuity and provide ongoing employee development opportunities. In 2025, we continued to focus on our talented, innovative and dedicated people, investing in our culture with a focus on collaboration, performance and employee education.
These state laws obligate us to protect social security numbers, maintain a comprehensive information security program, submit annual compliance certifications regarding such programs (or an exemption thereto) and notify insurance regulators if a security breach results in a reasonable belief that unauthorized persons may have obtained access to consumer non-public personal information.
These state laws obligate us to protect social security numbers, make disclosures regarding our privacy practices, limit the manner in which we share personal information, honor some requests for the deletion of personal data, submit annual compliance certifications regarding such programs (or an exemption thereto) and notify insurance regulators if a security breach results in a reasonable belief that unauthorized persons may have obtained access to consumer non-public personal information.
Our underwriters are located remotely, providing us the ability to efficiently service our customers nationwide across different time zones. We also engage third-party underwriting service providers (USPs) who provide us with incremental underwriting capacity.
Our underwriters are located remotely, providing us the ability to efficiently service our customers nationwide across different time zones. We also engage third-party USPs who provide us with incremental underwriting capacity. We train and require our USPs to follow the same processes and underwriting guidelines that our own employees follow when rendering insurance decisions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Our Holding Company and Capital Structure • Our holding company structure and certain regulatory and other constraints could affect our ability to satisfy our obligations and potentially require us to raise more capital. • Our substantial indebtedness could adversely affect our financial condition. • Our existing, and any future, variable rate indebtedness subjects us to interest rate risk, which could cause our annual debt service obligations to increase significantly. • Despite our substantial level of debt, we may incur more debt, which could exacerbate any or all of the risks described above. • Our current credit ratings may adversely affect our ability to access capital and the cost of such capital, which could have a material adverse effect on our business, financial condition and operating results. 28 General Risks Related to Ownership of Our Common Stock • We do not currently pay any dividends on our common stock and may not do so in the future, and payment of any declared dividends may be delayed. • The market price of our common stock may be volatile, which could cause the value of an investment in our common stock to decline. • The market price of our common stock could decline due to the large number of outstanding shares of our common stock eligible for future sale, and future issuances of our common stock may depress our share price and dilute the book value of our common stock. • Future issuance of debt or preferred stock, which would rank senior to our common stock upon our liquidation, may adversely affect the market value of our common stock. • Provisions contained in our organizational documents, as well as provisions of Delaware law and Wisconsin insurance law, could delay or prevent a change of control of us, which could adversely affect the price of shares of our common stock.
Biggest changeGeneral Risks Related to Ownership of Our Common Stock • We do not currently pay any dividends on our common stock and may not do so in the future, and payment of any declared dividends may be delayed. • The market price of our common stock may be volatile, which could cause the value of an investment in our common stock to decline. 30 • The market price of our common stock could decline due to the large number of outstanding shares of our common stock eligible for future sale, and future issuances of our common stock may depress our share price and dilute the book value of our common stock. • Future issuance of debt or preferred stock, which would rank senior to our common stock upon our liquidation, may adversely affect the market value of our common stock. • Provisions contained in our organizational documents, as well as provisions of Delaware law and Wisconsin insurance law, could delay or prevent a change of control of us, which could adversely affect the price of shares of our common stock.
We use third-party reinsurance, including the ILN Transactions, QSR Transactions, and XOL Transactions, to actively manage our risk, ensure compliance with PMIERs, state regulatory and other applicable capital requirements and support the growth of our business.
We use third-party reinsurance, including the QSR Transactions, XOL Transactions, and ILN Transactions to actively manage our risk, ensure compliance with PMIERs, state regulatory and other applicable capital requirements and support the growth of our business.
Our indebtedness could have significant negative consequences for our business, financial condition and operating results, including: • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of the cash flow from our subsidiaries' operations to service our indebtedness, thereby reducing the amount of cash flow available for other purposes; • making it more difficult for us to retain our existing ratings or to obtain investment-grade credit ratings in the future; • making it more difficult to conduct our business successfully or to grow our business, or limiting our flexibility in planning for, or reacting to, changes in our business; and • placing us at a possible competitive disadvantage with less leveraged competitors and competitors that may have better access to capital resources.
Our indebtedness could have significant negative consequences for our business, financial condition and operating results, including: • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of the cash flow from our subsidiaries' operations to service our indebtedness, thereby reducing the amount of cash flow available for other purposes; • making it more difficult for us to retain our existing ratings or to obtain investment-grade credit ratings in the future; 47 • making it more difficult to conduct our business successfully or to grow our business, or limiting our flexibility in planning for, or reacting to, changes in our business; and • placing us at a possible competitive disadvantage with less leveraged competitors and competitors that may have better access to capital resources.
If these USPs fail to adequately perform their underwriting services or place our coverage on loans we would deem ineligible, we could experience increased claims on loans underwritten by them, and our customer relationships could be negatively impacted. • Our Master Policies contain restrictions on our ability to rescind coverage for certain material misrepresentations (including fraud) and underwriting defects, and if we were to fail to timely discover any such misrepresentations or underwriting defects, our rights of rescission would be significantly limited, and we could suffer increased losses as a result of paying claims on loans with unacceptable risk characteristics. • The mix of business we write affects our revenue stream and the likelihood of losses occurring. • We expect our claims to increase as our insured loan portfolio grows and matures. • Our business depends, in part, on effective and reliable loan servicing. • If the estimates we use in establishing claims reserves are incorrect, the actual claim payments we make may materially exceed the amount of our corresponding claims reserves, resulting in unexpected charges to income, which could be material and adversely affect our results of operations. 27 • The occurrence of natural or man-made disasters or pandemics could adversely affect our business, financial condition and operating results. • Climate change and efforts to manage or regulate climate risk by government agencies could affect our business and operations. • We are exposed to certain risks associated with our third-party reinsurance transactions, including the possibility that our reinsurers will fail to perform their obligations or that we will lose the capital credit we expected to receive when we entered into the transactions as a result of future GSE or Wisconsin OCI action or if any of our reinsurers experiences a downgrade or other adverse business event. • Our operating results depend in large part on our ability to manage the risks related to the growth of our business and on maintaining and enhancing effective operating procedures and internal controls. • We are exposed to operational risk from fraud, malfeasance or error by borrowers, employees and third-party service providers, and any such fraud, malfeasance or error could materially and adversely affect us. • If we do not maintain connectivity with or otherwise meet the technological demands of our customers or are unable to develop, enhance and maintain our proprietary technology platform, our business and financial performance could be adversely affected. • We may not be able to prevent the unauthorized disclosure or misuse of confidential, personal or proprietary information. • Adverse investment performance may affect our financial results and ability to conduct business. • We face regulatory and litigation risks associated with offering loan review services.
If these USPs fail to adequately perform their underwriting services or place our coverage on loans we would deem ineligible, we could experience increased claims on loans underwritten by them, and our customer relationships could be negatively impacted. • Our Master Policies contain restrictions on our ability to rescind coverage for certain material misrepresentations (including fraud) and underwriting defects, and if we were to fail to timely discover any such misrepresentations or underwriting defects, our rights of rescission would be significantly limited, and we could suffer increased losses as a result of paying claims on loans with unacceptable risk characteristics. • The mix of business we write affects our revenue stream and the likelihood of losses occurring. • We expect our claims to increase as our insured loan portfolio grows and matures. • Our business depends, in part, on effective and reliable loan servicing. • If the estimates we use in establishing claims reserves are incorrect, the actual claim payments we make may materially exceed the amount of our corresponding claims reserves, resulting in unexpected charges to income, which could be material and adversely affect our results of operations. • The occurrence of natural or man-made disasters or pandemics could adversely affect our business, financial condition and operating results. 29 • Climate risk and efforts to manage or regulate climate risk by government agencies could affect our business and operations. • We are exposed to certain risks associated with our third-party reinsurance transactions, including the possibility that our reinsurers will fail to perform their obligations or that we will lose the capital credit we expected to receive when we entered into the transactions as a result of future GSE or Wisconsin OCI action or if any of our reinsurers experiences a downgrade or other adverse business event. • Our operating results depend in large part on our ability to manage the risks related to the growth of our business and on maintaining and enhancing effective operating procedures and internal controls. • We are exposed to operational risk from fraud, malfeasance or error by borrowers, employees and third-party service providers, and any such fraud, malfeasance or error could materially and adversely affect us. • If we do not maintain connectivity with or otherwise meet the technological demands of our customers or are unable to develop, enhance and maintain our proprietary technology platform, our business and financial performance could be adversely affected. • We may not be able to prevent the unauthorized disclosure or misuse of confidential, personal or proprietary information. • Adverse investment performance may affect our financial results and ability to conduct business. • We face regulatory and litigation risks associated with offering loan review services.
There is a risk that these transactions will not continue to provide the benefits we expected when we 37 entered into them, including as a result of our counter-parties under the QSR Transactions and XOL Transactions (which are not fully collateralized like the ILN Transactions) not performing their obligations, the GSEs or the Wisconsin OCI not continuing to give us full capital credit as anticipated for the duration of the contracts, or if one or more reinsurers under any of the QSR Transactions or XOL Transactions experiences a downgrade or other adverse business event.
There is a risk that these transactions will not continue to provide the benefits we expected when we entered into them, including as a result of our counter-parties under the QSR Transactions and XOL Transactions (which are not fully collateralized like the ILN Transactions) not performing their obligations, the GSEs or the Wisconsin OCI not continuing to give us full capital credit as anticipated for the duration of the contracts, or if one or more reinsurers under any of the QSR Transactions or XOL Transactions experiences a downgrade or other adverse business event.
Risk Related to Regulation of the Mortgage Insurance Industry • There can be no assurance that the GSEs will continue to treat us as an approved insurer in the future, and changes to, or our failure to maintain compliance with, the GSEs' PMIERs, could adversely impact our business, financial condition and operating results. • Changes in the business practices of the GSEs, including a decision to decrease or discontinue the use of private MI, or changes in the terms on which mortgage insurance coverage may be cancelled, federal legislation that changes their charters or a restructuring of the GSEs or changes in loan delivery pricing imposed by the GSEs could reduce the private MI market opportunity, reduce our revenues or increase our losses. • We are subject to comprehensive state insurance regulations and capital adequacy requirements, which we must satisfy to continue to operate our MI business. • The private MI industry is, and as a participant we are, subject to litigation and regulatory enforcement risk generally. • Our business prospects and operating results could be adversely impacted if, and to the extent that, the Consumer Financial Protection Bureau's ATR Rules defining a QM negatively impact the size of the origination market. • The implementation of the Basel rules may discourage the use of mortgage insurance.
Risk Related to Regulation of the Mortgage Insurance Industry • There can be no assurance that the GSEs will continue to treat us as an approved insurer in the future, and changes to, or our failure to maintain compliance with, the GSEs' PMIERs, could adversely impact our business, financial condition and operating results. • Changes in the business practices of the GSEs, including a decision to decrease or discontinue the use of private MI, or changes in the terms on which mortgage insurance coverage may be canceled, federal legislation that changes their charters or a restructuring of the GSEs or changes in loan delivery pricing imposed by the GSEs could reduce the private MI market opportunity, reduce our revenues or increase our losses. • We are subject to comprehensive state insurance regulations and capital adequacy requirements, which we must satisfy to continue to operate our MI business. • The private MI industry is, and as a participant we are, subject to litigation and regulatory enforcement risk generally. • Our business prospects and operating results could be adversely impacted if, and to the extent that, the Consumer Financial Protection Bureau's ATR Rules defining a QM negatively impact the size of the origination market. • The implementation of the Basel rules may discourage the use of mortgage insurance.
Among others, alternatives to private MI include, but are not limited to: 29 • lenders using government mortgage insurance programs, including those of the FHA, USDA and VA, and state-supported mortgage insurance funds in several states, including Massachusetts and California; • lenders and other investors holding mortgages in their portfolios and self-insuring; • GSEs and other investors using credit enhancements other than MI (including alternative forms of credit risk transfer such as the suspended IMAGIN and EPMI programs that could be relaunched in the future), using other credit enhancements in conjunction with reduced levels of MI coverage, or accepting credit risk without credit enhancement; • lenders originating mortgages using “piggy-back” or other structures to avoid MI, such as a first mortgage with an 80% LTV and a second mortgage with a 10%, 15% or 20% LTV (referred to as 80-10-10, 80-15-5 or 80-20 loans, respectively) rather than a first mortgage with an LTV above 80% that has MI; • lender retention program; and • borrowers paying cash or making large down payments versus securing mortgage financing.
Among others, alternatives to private MI include, but are not limited to: • lenders using government mortgage insurance programs, including those of the FHA, USDA and VA, and state-supported mortgage insurance funds in several states, including Massachusetts and California; • lenders and other investors holding mortgages in their portfolios and self-insuring; • GSEs and other investors using credit enhancements other than MI (including alternative forms of credit risk transfer such as the suspended IMAGIN and EPMI programs that could be relaunched in the future), using other credit enhancements in conjunction with reduced levels of MI coverage, or accepting credit risk without credit enhancement; 31 • lenders originating mortgages using “piggy-back” or other structures to avoid MI, such as a first mortgage with an 80% LTV and a second mortgage with a 10%, 15% or 20% LTV (referred to as 80-10-10, 80-15-5 or 80-20 loans, respectively) rather than a first mortgage with an LTV above 80% that has MI; • lender retention program; and • borrowers paying cash or making large down payments versus securing mortgage financing.
In addition, the value of the assets in our investment portfolio could be adversely affected if such an event affects companies' ability to pay us principal or interest on their securities. We insure mortgages for homes in areas that have been impacted by natural disasters, including from earthquakes, wildfires, hurricanes, floods and tornadoes.
In addition, the value of the assets in our investment portfolio could be adversely affected if such an event affects companies' ability to pay us principal or interest on their securities. 38 We insure mortgages for homes in areas that have been impacted by natural disasters, including from earthquakes, wildfires, hurricanes, floods and tornadoes.
It is difficult to predict the impact of any other current or potential alternative credit risk transfer products, if any, that are developed to meet the goals established by the FHFA. 42 We are subject to comprehensive state insurance regulations and capital adequacy requirements, which we must satisfy to continue to operate our MI business. The U.S.
It is difficult to predict the impact of any other current or potential alternative credit risk transfer products, if any, that are developed to meet the goals established by the FHFA. We are subject to comprehensive state insurance regulations and capital adequacy requirements, which we must satisfy to continue to operate our MI business. The U.S.
If any indebtedness under the senior unsecured credit facilities or our senior notes is accelerated, we cannot assure you that our assets would be sufficient to repay such amounts in full, and the lenders and/or noteholders could foreclose on the collateral securing the obligations under the senior unsecured credit facilities and the senior 46 notes, including, subject to regulatory approval, the stock of NMIC and Re One.
If any indebtedness under the senior unsecured credit facilities or our senior notes is accelerated, we cannot assure you that our assets would be sufficient to repay such amounts in full, and the lenders and/or noteholders could foreclose on the collateral securing the obligations under the senior unsecured credit facilities and the senior notes, including, subject to regulatory approval, the stock of NMIC and Re One.
A decline in the volume of high-LTV loan originations could decrease demand for MI, decrease our NIW and therefore reduce our revenues and have a material adverse effect on our operating results. 31 Our underwriting and credit risk management policies and practices may not anticipate all risks and/or the magnitude of potential for loss as the result of unforeseen risks.
A decline in the volume of high-LTV loan originations could decrease demand for MI, decrease our NIW and therefore reduce our revenues and have a material adverse effect on our operating results. Our underwriting and credit risk management policies and practices may not anticipate all risks and/or the magnitude of potential for loss as the result of unforeseen risks.
If our controls are not effective or not properly implemented, we could suffer financial or other loss, disruption of our business, 38 regulatory sanctions or damage to our reputation. Losses resulting from these failures can vary significantly in size, scope and scale and may have a material adverse effect on our business, financial condition and operating results.
If our controls are not effective or not properly implemented, we could suffer financial or other loss, disruption of our business, regulatory sanctions or damage to our reputation. Losses resulting from these failures can vary significantly in size, scope and scale and may have a material adverse effect on our business, financial condition and operating results.
By April 15th of each year, NMIC must certify it met all PMIERs requirements as of December 31st of the prior year. NMIC also has an ongoing obligation to immediately notify the GSEs in writing upon discovery of its failure to meet one or more of the PMIERs requirements, some of which do not have materiality thresholds.
By April 15th of each year, NMIC must certify it met all PMIERs requirements as of December 31st of the prior year. NMIC also has an ongoing obligation to immediately notify the GSEs in writing upon discovery of its failure to meet 42 one or more of the PMIERs requirements, some of which do not have materiality thresholds.
Risk Related to Our Business Operations • We face intense competition for business in our industry, and if we are unable to compete effectively, we may not be able to achieve our business goals, which would adversely affect our business, financial condition and operating results. • Our NIW volumes could be adversely affected if lenders and investors select alternatives to private MI. • If we are unable to continue to attract and retain the most significant mortgage originators as customers, our ability to achieve our business goals could be negatively impacted. • If the volume of high-LTV loan originations declines, our NIW volume could decline, which would reduce our revenues. • Our underwriting and credit risk management policies and practices may not anticipate all risks and/or the magnitude of potential for loss as the result of unforeseen risks. • Unexpected material increases in borrower defaults could cause our actual losses to materially exceed our expected loss rates, including in certain geographic regions in which our business may be concentrated and more susceptible to downturns. • The premiums we charge may be insufficient to cover claim payments and our operating costs. • Changes in factors that impact the length of time that our policies remain in force may adversely affect our future revenues and claims experience. • Changes in inflation, interest rates and mortgage interest rates may have adverse impact on our business, future revenue and financial condition. • We outsource the underwriting of our mortgage insurance on certain loans to third-party underwriting service providers (USPs).
Risk Related to Our Business Operations • We face intense competition for business in our industry, and if we are unable to compete effectively, we may not be able to achieve our business goals, which would adversely affect our business, financial condition and operating results. • Our NIW volumes could be adversely affected if lenders and investors select alternatives to private MI. • If we are unable to continue to attract and retain the most significant mortgage originators as customers, our ability to achieve our business goals could be negatively impacted. • If the volume of high-LTV loan originations declines, our NIW volume could decline, which would reduce our revenues. • Our underwriting and credit risk management policies and practices may not anticipate all risks and/or the magnitude of potential for loss as the result of unforeseen risks. • Unexpected material increases in borrower defaults could cause our actual losses to materially exceed our expected loss rates, including in certain geographic regions in which our business may be concentrated and more susceptible to downturns. • The premiums we charge may be insufficient to cover claim payments and our operating costs. • Changes in factors that impact the length of time that our policies remain in force may adversely affect our future revenues and claims experience. • Changes in inflation, interest rates and mortgage interest rates may have an adverse impact on our business, future revenue and financial condition. • We outsource the underwriting of our mortgage insurance on certain loans to third-party USPs.
These factors include, among others, borrower and loan-level risk characteristics, lender origination practices and macroeconomic variables that influence the housing market. The presence of multiple higher-risk characteristics ( i.e., layered risk) in a loan materially increases the likelihood of a default on such a loan unless, and to the extent, there are other characteristics to mitigate the layered risk.
These factors include, among others, borrower and loan-level risk characteristics, lender origination practices and macroeconomic variables that influence the housing market. The presence of multiple higher-risk characteristics ( i.e., layered 33 risk) in a loan materially increases the likelihood of a default on such a loan unless, and to the extent, there are other characteristics to mitigate the layered risk.
Our delegation of loss management decisions to the GSEs is subject to cancellation; however, exercise of these rights may have an adverse effect on our relationship with the GSEs and servicers. The COVID-19 pandemic demonstrated that government actions in response to a national pandemic could create strains on servicers in connection with the remittance of premiums.
Our delegation of loss management decisions to the GSEs is subject to cancellation; however, exercise of these rights may have an adverse effect on our relationship with the GSEs and servicers. 37 The COVID-19 pandemic demonstrated that government actions in response to a national pandemic could create strains on servicers in connection with the remittance of premiums.
To mitigate this risk, there are certain contractual protections that establish sources from which we may directly obtain our reinsurance recoverables under the QSR Transactions or XOL Transactions. The ILN Transactions are fully collateralized with funds deposited into trust accounts to secure the obligations of the reinsurers to NMIC under the respective reinsurance agreement.
To mitigate this risk, there are certain contractual protections that establish sources from which we may directly obtain our reinsurance recoverables under the QSR Transactions or XOL Transactions. The ILN Transactions are fully 39 collateralized with funds deposited into trust accounts to secure the obligations of the reinsurers to NMIC under the respective reinsurance agreement.
The GSEs could be directed to make such changes by the FHFA, which was appointed as their conservator in September 2008 and has the authority to control and direct the operations of the GSEs. 41 With the GSEs in a prolonged conservatorship, there has been ongoing debate over the future role and purpose of the GSEs in the U.S. housing market.
The GSEs could be directed to make such changes by the FHFA, which was appointed as their conservator in September 2008 and has the authority to control and direct the operations of the GSEs. With the GSEs in a prolonged conservatorship, there has been ongoing debate over the future role and purpose of the GSEs in the U.S. housing market.
In particular, in the current remote and hybrid working arrangements environment, our employees and vendors rely on the use of portable computers and mobile devices, which can be 39 stolen, lost or misused, making information accessible through such devices more vulnerable to unauthorized access, including by employee malfeasance.
In particular, in the current remote and hybrid working arrangements environment, our employees and vendors rely on the use of portable computers and mobile devices, which can be stolen, lost or misused, making information accessible through such devices more vulnerable to unauthorized access, including by employee malfeasance.
If the GSEs and other mortgage investors change their view on the timing of cancellation of mortgage insurance due to house price appreciation, policy goals, other risk appetite decisions or otherwise, we could experience increased and unexpected turnover in our IIF, which could negatively impact our future revenues.
If the GSEs and other mortgage investors change their view on the timing of cancellation of mortgage 35 insurance due to house price appreciation, policy goals, other risk appetite decisions or otherwise, we could experience increased and unexpected turnover in our IIF, which could negatively impact our future revenues.
Mortgage Insurance Regulation ." In the past, other mortgage insurers (not including us) have been involved in litigation and regulatory enforcement actions alleging violations of Section 8 of RESPA. Among other things, Section 8 of RESPA generally precludes mortgage insurers from paying referral fees to mortgage lenders for the referral of MI business.
Mortgage Insurance Regulation .” In the past, other mortgage insurers (not including us) have been involved in litigation and regulatory enforcement actions alleging violations of Section 8 of RESPA. Among other things, Section 8 of RESPA generally precludes mortgage insurers from paying referral fees to mortgage lenders for the referral of MI business.
The degree to which lenders or borrowers may select these alternatives now, or in the future, is difficult to predict. As one or more of the alternatives described above, or new alternatives that may enter the market, are chosen over MI, our revenues 30 could be adversely impacted.
The degree to which lenders or borrowers may select these alternatives now, or in the future, is difficult to predict. As one or more of the alternatives described above, or new alternatives that may enter the market, are chosen over MI, our revenues could be adversely impacted.
For example, a 36 natural disaster event could lead to unexpected changes in persistency rates as policyholders and borrowers who are affected by the disaster may be unable to meet their contractual obligations, such as mortgage payments on loans we insure.
For example, a natural disaster event could lead to unexpected changes in persistency rates as policyholders and borrowers who are affected by the disaster may be unable to meet their contractual obligations, such as mortgage payments on loans we insure.
See Item 1C, " Cybersecurity ." Our IT systems and networks, including those functions that we may outsource, are vulnerable to unauthorized access, interruptions or failures due to events that are often beyond our control, including cyber-attacks, natural disasters, theft, terrorist attacks and general technology failures.
See Item 1C, “ Cybersecurity .” Our IT systems and networks, including those functions that we may outsource, are vulnerable to unauthorized access, interruptions or failures due to events that are often beyond our control, including cyber-attacks, natural disasters, theft, terrorist attacks and general technology failures.
However, the outcome of litigation and other legal 43 and regulatory matters is inherently uncertain, and it is possible that one or more of any such matters in the future could have an unanticipated material adverse effect on our liquidity, financial position and operating results.
However, the outcome of litigation and other legal and regulatory matters is inherently uncertain, and it is possible that one or more of any such matters in the future could have an unanticipated material adverse effect on our liquidity, financial position and operating results.
While we believe our capital, premiums and investment earnings will provide a pool of resources sufficient to cover expected loss payments and we have made estimates regarding loss payments and potential claims, we cannot predict with certainty the ultimate number and magnitude of claims we experience.
While we believe our capital, premiums and investment earnings will provide a pool of resources sufficient to cover expected loss payments and we have made estimates regarding loss payments and 34 potential claims, we cannot predict with certainty the ultimate number and magnitude of claims we experience.
After a loan meets the conditions for rescission relief, we are contractually prohibited from exercising our rights of rescission for material underwriting defects and certain misrepresentations (including borrower fraud) made in connection with the origination of the insured loan and placement of our mortgage insurance.
After a loan meets the conditions for rescission relief, we are contractually prohibited from exercising our 36 rights of rescission for material underwriting defects and certain misrepresentations (including borrower fraud) made in connection with the origination of the insured loan and placement of our mortgage insurance.
Climate change and efforts to manage climate risk by government agencies could affect our business and operations. We do not directly insure climate-related risks. Our insurance policies also generally exclude losses resulting from physical damage to the properties securing the loans we insure.
Climate risk and efforts to manage climate risk by government agencies could affect our business and operations. We do not directly insure climate-related risks. Our insurance policies also generally exclude losses resulting from physical damage to the properties securing the loans we insure.
These state insurance regulatory authorities could take actions that could materially impact the types of products and services we and our industry are permitted to offer, including requiring us (and other MI companies) to modify current pricing and business practices.
These state insurance regulatory authorities could take actions that could materially impact the types of products and services we and our industry are permitted to offer, including requiring us (and other MI companies) to modify 44 current pricing and business practices.
Our business prospects and operating results could be adversely impacted if, and to the extent that, the QM regulations or the CFPB's actions negatively impact the size of the origination market. 44 The implementation of the Basel rules may discourage the use of mortgage insurance.
Our business prospects and operating results could be adversely impacted if, and to the extent that, the QM regulations or the CFPB's actions negatively impact the size of the origination market. The implementation of the Basel rules may discourage the use of mortgage insurance.
As a result of their size and market share, these entities originate a significant majority of high-LTV mortgages in the U.S. and, therefore, influence the size and pricing of the MI market. We are currently doing business with a majority of these lenders.
As a result of their size and market share, these entities originate a 32 significant majority of high-LTV mortgages in the U.S. and, therefore, influence the size and pricing of the MI market. We are currently doing business with a majority of these lenders.
In addition, the private MI industry, including NMIC, may be affected by changes in the laws and regulations to which we are subject or the way they are interpreted or applied. See " Item 1 - Business - U.S.
In addition, the private MI industry, including NMIC, may be affected by changes in the laws and regulations to which we are subject or the way they are interpreted or applied. See “ Item 1 - Business - U.S.
As a result of the higher mortgage interest rates in 2022 and 2023, we observed lower refinancing activities in the mortgage market compared to what we had 33 observed in recent years prior to 2022, and therefore decreased turnover in our IIF.
As a result of the higher mortgage interest rates in 2022 and 2023, we observed lower refinancing activities in the mortgage market compared to what we had observed in recent years prior to 2022, and therefore decreased turnover in our IIF.
In December 2020, the FHFA published a final rule (2020 ERCF rule) establishing a new enterprise regulatory capital framework (ERCF) for the GSEs, which included provisions governing the capital relief allowed to the GSEs for loans with private MI.
In December 2020, the FHFA published a final rule (2020 ERCF rule) establishing a new enterprise regulatory capital framework (ERCF) for the GSEs, which included provisions governing the capital 43 relief allowed to the GSEs for loans with private MI.
Third parties with whom we do business also could be sources of operational risk to us, including breakdowns or failures of such parties' own systems or employees.
Third parties 40 with whom we do business also could be sources of operational risk to us, including breakdowns or failures of such parties' own systems or employees.
Any provision of our certificate of incorporation or bylaws or Delaware law or under the Wisconsin insurance regulations that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of common stock, and could also affect the price that some investors are willing to pay for shares of our common stock. 49 Item 1B.
Any provision of our certificate of incorporation or bylaws or Delaware law or under the Wisconsin insurance regulations that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of common stock, and could also affect the price that some investors are willing to pay for shares of our common stock. 51 Item 1B.
Changes in the business practices of the GSEs, including a decision to decrease or discontinue the use of private MI, or changes in the terms on which mortgage insurance coverage may be cancelled, federal legislation that changes their charters or a restructuring of the GSEs or changes in loan delivery pricing imposed by the GSEs could reduce the private MI market opportunity, reduce our revenues or increase our losses.
Changes in the business practices of the GSEs, including a decision to decrease or discontinue the use of private MI, or changes in the terms on which mortgage insurance coverage may be canceled, federal legislation that changes their charters or a restructuring of the GSEs or changes in loan delivery pricing imposed by the GSEs could reduce the private MI market opportunity, reduce our revenues or increase our losses.
The Dodd-Frank Act also gave statutory authority to the HUD, the VA, and the USDA to develop their own definitions of "QM," which those agencies have completed. To the extent lenders find that the HUD definition of QM is more favorable to certain segments of their borrowers, they may choose FHA products over private MI products.
The Dodd-Frank Act also gave statutory authority to the HUD, the VA, and the USDA to develop their own definitions of “QM,” which those agencies have completed. To the extent lenders find that the HUD definition of QM is more favorable to certain segments of their borrowers, they may choose FHA products over private MI products.
Rising unemployment rates and deterioration in economic conditions for extended periods of time, across the U.S. or in specific regional economies, generally increases the likelihood of borrower defaults. As inflation has lowered housing affordability, the use of adjustable-rate mortgages (ARMs) and interest rate buydown transactions have become more common.
Rising unemployment rates and deterioration in economic conditions for extended periods of time, across the U.S. or in specific regional economies, generally increases the likelihood of borrower defaults. As inflation has lowered housing affordability, the use of ARMs and interest rate buydown transactions have become more common.
We outsource the underwriting of our mortgage insurance on certain loans to third-party underwriting service providers (USPs). If these USPs fail to adequately perform their underwriting services or place our coverage on loans we would deem ineligible, we could experience increased claims on loans underwritten by them, and our customer relationships could be negatively impacted.
We outsource the underwriting of our mortgage insurance on certain loans to third-party USPs. If these USPs fail to adequately perform their underwriting services or place our coverage on loans we would deem ineligible, we could experience increased claims on loans underwritten by them, and our customer relationships could be negatively impacted.
Since 2020, the FHFA has been increasingly vocal about climate and natural disasters and their impact on the GSEs and the Federal Home Loan Banks (together, the regulated entities) and the national housing market, and has designated climate change as a priority concern and instructed the GSEs to actively consider its effects in their decision making.
Since 2020, the FHFA has been increasingly vocal about climate and natural disasters and their impact on the GSEs and the Federal Home Loan Banks (together, the regulated entities) and the national housing market, and has designated climate risk as a priority concern and instructed the GSEs to actively consider its effects in their decision making.
Under the terms of our service agreements and subject to such agreements' contractual limitations on liability, we provide limited indemnity rights for "material errors," if such errors materially impair the saleability of a reviewed loan, results in a material reduction in the value of such loan or results in the customer being required to repurchase such loan.
Under the terms of our service agreements and subject to such agreements' contractual limitations on liability, we provide limited indemnity rights for “material errors,” if such errors materially impair the saleability of a reviewed loan, results in a material reduction in the value of such loan or results in the customer being required to repurchase such loan.
Mortgage Insurance Regulation - Other U.S. Regulation - Housing Finance Reform " above for a summary of the GSEs final rules related to QMs. The long-term effects of the expiration of the QM Patch and implementation of the General QM and Seasoned QM final rules could affect the residential mortgage market and demand for private mortgage insurance.
Mortgage Insurance Regulation - Other U.S. Regulation - Housing Finance Reform” above for a summary of the GSEs final rules related to QMs. The long-term effects of the expiration of the QM Patch and implementation of the General QM and Seasoned QM final rules could affect the residential mortgage market and demand for private mortgage insurance.
See Part II, Item 8, " Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 6, Reinsurance ," below.
See Part II, Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 6, Reinsurance ,” below.
We certified to the GSEs by April 15, 2024 that NMIC was in full compliance with the PMIERs as of December 31, 2023. There can be no assurance, however, that NMIC will continue to comply with the PMIERs financial requirements.
We certified to the GSEs by April 15, 2025 that NMIC was in full compliance with the PMIERs as of December 31, 2024. There can be no assurance, however, that NMIC will continue to comply with the PMIERs financial requirements.
We establish reserves for loans that have been reported to us as in default by servicers, referred to as case reserves, and additional loans that we estimate (based on actuarial review and other factors) to be in default that have not yet been reported to us by servicers, referred to as "IBNR." We also establish reserves for claim expenses, which represent the estimated cost of the claim administration process, including legal and other fees and other general expenses of administering the claim settlement process.
We establish reserves for loans that have been reported to us as in default by servicers, referred to as case reserves, and additional loans that we estimate (based on actuarial review and other factors) to be in default that have not yet been reported to us by servicers, referred to as “IBNR.” We also establish reserves for claim expenses, which represent the estimated cost of the claim administration process, including legal and other fees and other general expenses of administering the claim settlement process.
If payments to NMIH were curtailed or limited, there is a risk that NMIH would be unable to satisfy its financial obligations. 45 NMIH's dividend income is limited to upstream dividend payments from our subsidiaries. With respect to our insurance subsidiaries, under Wisconsin law, dividends in excess of prescribed limits are deemed "extraordinary" and require approval of the Wisconsin OCI.
If payments to NMIH were curtailed or limited, there is a risk that NMIH would be unable to satisfy its financial obligations. NMIH's dividend income is limited to upstream dividend payments from our subsidiaries. With respect to our insurance subsidiaries, under Wisconsin law, dividends in excess of prescribed limits are deemed “extraordinary” and require approval of the Wisconsin OCI.
The General QM final rule was effective on March 1, 2021 with an extended mandatory compliance date of October 1, 2022. However, the GSEs announced on April 8, 2021 that, for loan applications received on or after July 1, 2021, they will only purchase loans satisfying the New General QM Definition. See "Item 1, " Business - U.S.
The General QM final rule was effective on March 1, 2021 with an extended mandatory compliance date of October 1, 2022. However, the GSEs announced on April 8, 2021 that, for loan applications received on or after July 1, 2021, they will only purchase loans satisfying the New General QM Definition. See “Item 1, “ Business - U.S.
To that end, the FHFA established a new Conservatorship Scorecard which would hold the GSEs accountable for ensuring resiliency to climate and disaster risks, and also enhanced its monitoring and supervision of climate change issues.
To that end, the FHFA established a new Conservatorship Scorecard which would hold the GSEs accountable for ensuring resiliency to climate and disaster risks, and also enhanced its monitoring and supervision of climate risk issues.
There are many factors that impact the market price of our common stock, including, without limitation: • general market conditions, including price levels and volume and changes in interest rates and rising inflation; • national, regional and local economic or business conditions; • the effects of, and changes in, trade, tax, monetary and fiscal policies, including the interest rate policies of the Federal Reserve; • changes in U.S. housing and housing finance policy, including changes to the GSEs and the role of government MIs; • our actual or projected financial condition, liquidity, operating results, cash flows and capital levels; 47 • changes in, or failure to meet, our publicly disclosed expectations as to our future financial and operating performance; • publication of research reports about us, our competitors or the financial services industry generally, or changes in, or failure to meet, securities analysts' estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage; • market valuations, as well as the financial and operating performance and prospects, of similar companies; • future issuances or sales, or anticipated issuances or sales, of our common stock or other securities convertible into or exchangeable or exercisable for our common stock; • additional indebtedness we may incur in the future; • expenses incurred in connection with changes in our stock price, such as changes in the value of the liability reflected on our financial statements associated with outstanding warrants; • the potential failure to establish and maintain effective internal controls over financial reporting; • additions or departures of key personnel and management; • our failure to satisfy the continued listing requirements of the Nasdaq; and • our failure to comply with the Sarbanes-Oxley Act of 2002.
There are many factors that impact the market price of our common stock, including, without limitation: • general market conditions, including price levels and volume and changes in interest rates and rising inflation; • national, regional and local economic or business conditions; • the effects of, and changes in, trade, tax, monetary and fiscal policies, including the interest rate policies of the Federal Reserve; • changes in U.S. housing and housing finance policy, including changes to the GSEs and the role of government MIs; • our actual or projected financial condition, liquidity, operating results, cash flows and capital levels; • changes in, or failure to meet, our publicly disclosed expectations as to our future financial and operating performance; • publication of research reports about us, our competitors or the financial services industry generally, or changes in, or failure to meet, securities analysts' estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage; • market valuations, as well as the financial and operating performance and prospects, of similar companies; • future issuances or sales, or anticipated issuances or sales, of our common stock or other securities convertible into or exchangeable or exercisable for our common stock; • additional indebtedness we may incur in the future; • expenses incurred in connection with changes in our stock price; • the potential failure to establish and maintain effective internal controls over financial reporting; • additions or departures of key personnel and management; • our failure to satisfy the continued listing requirements of the Nasdaq; and • our failure to comply with the Sarbanes-Oxley Act of 2002.
As a Delaware corporation, we are also subject to anti-takeover provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which, subject to certain exceptions, prohibits a public Delaware corporation from engaging in a business combination (as defined in such section) with an "interested stockholder" (defined generally as any person who beneficially owns 15% or more of the outstanding voting stock of such corporation or any person affiliated with such person) for a period of three years following the time that such stockholder became an interested stockholder, unless (i) prior to such time, the board of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan); or (iii) on or subsequent to such time the business combination is approved by the board of such corporation and authorized at a meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.
Additionally, cumulative voting in the election of our directors is not allowed. 50 As a Delaware corporation, we are also subject to anti-takeover provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which, subject to certain exceptions, prohibits a public Delaware corporation from engaging in a business combination (as defined in such section) with an “interested stockholder” (defined generally as any person who beneficially owns 15% or more of the outstanding voting stock of such corporation or any person affiliated with such person) for a period of three years following the time that such stockholder became an interested stockholder, unless (i) prior to such time, the board of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan); or (iii) on or subsequent to such time the business combination is approved by the board of such corporation and authorized at a meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.
The CFPB's interpretation and enforcement of Section 8 of RESPA presents regulatory risk for many providers of "settlement services," including mortgage insurers. We currently are not a party to any federal or state regulatory enforcement actions; however, such proceedings could arise in the future.
The CFPB's interpretation and enforcement of Section 8 of RESPA presents regulatory risk for many providers of “settlement services,” including mortgage insurers. We currently are not a party to any federal or state regulatory enforcement actions; however, such proceedings could arise in the future.
While climate-related risks such as flood, wildfire, wind, and earthquake do not directly cause losses to our business, we are indirectly exposed to risks of climate change.
While climate-related risks such as flood, wildfire, wind, and earthquake do not directly cause losses to our business, we are indirectly exposed to climate risks.
In addition, our 2024 Revolving Credit Facility and indenture does not prevent us from incurring certain obligations that do not constitute "indebtedness" as defined therein.
In addition, our 2024 Revolving Credit Facility and indenture does not prevent us from incurring certain obligations that do not constitute “indebtedness” as defined therein.
A lower level of persistency could reduce our future revenues from our monthly-paid premium products, which constituted about 91% of our primary IIF at year-end 2024. Higher than expected persistency rates could negatively impact our future profitability on monthly premium policies if market and economic conditions change significantly from those we expected when we established the premium rates.
A lower level of persistency could reduce our future revenues from our monthly-paid premium products, which constituted about 93% of our primary IIF at year-end 2025. Higher than expected persistency rates could negatively impact our future profitability on monthly premium policies if market and economic conditions change significantly from those we expected when we established the premium rates.
See Part II, Item 7, " Management's Discussion and Analysis of Financial Condition and Results of Operations - Insurance Claims and Claim Expenses." Incurred losses and claims may exceed our expectations in the event of general economic weakness or decreases in housing values.
See Part II, Item 7, “ Management's Discussion and Analysis of Financial Condition and Results of Operations – Key Factors Affecting Our Results – Insurance Claims and Claim Expenses.” Incurred losses and claims may exceed our expectations in the event of general economic weakness or decreases in housing values.
In the fourth quarter of 2020, the CFPB released a series of final rules to (i) eliminate the temporary QM category, typically referred to as the "QM Patch", (ii) amend the definition of a General QM, and (iii) provide for a new, Seasoned QM category.
In the fourth quarter of 2020, the CFPB released a series of final rules to (i) eliminate the temporary QM category, typically referred to as the “QM Patch”, (ii) 45 amend the definition of a General QM, and (iii) provide for a new, Seasoned QM category.
If we cannot obtain adequate capital, our business, financial condition and operating results could be adversely affected. Our substantial indebtedness could adversely affect our financial condition. We currently have and will continue to have a substantial amount of indebtedness. As of December 31, 2024 our debt totaled approximately $415.1 million.
If we cannot obtain adequate capital, our business, financial condition and operating results could be adversely affected. Our substantial indebtedness could adversely affect our financial condition. We currently have and will continue to have a substantial amount of indebtedness. As of December 31, 2025 our debt totaled approximately $417.0 million.
Any deterioration in housing prices, housing markets or economic conditions in regions in which we have a significant concentration of IIF and which adversely affects the ability of borrowers to make payments on their insured loans may increase the likelihood and severity of our losses, which could have a material adverse effect on our financial condition and operating results. 32 The premiums we charge may be insufficient to cover claim payments and our operating costs.
Any deterioration in housing prices, housing markets or economic conditions in regions in which we have a significant concentration of IIF and which adversely affects the ability of borrowers to make payments on their insured loans may increase the likelihood and severity of our losses, which could have a material adverse effect on our financial condition and operating results.
The Basel Committee developed t he Basel Capital Accord in 1988 to set out international benchmarks for assessing banks' capital adequacy requirements. See Item 1, " U.S. Mortgage Insurance Regulations - Basel Rules.
The Basel Committee developed t he Basel Capital Accord in 1988 to set out international benchmarks for assessing banks' capital adequacy requirements. See Item 1, “ U.S.
As a result, until we otherwise declare and pay dividends on our common stock, only appreciation in the price of our common stock, which may not occur, will provide a return to investors.
We have not declared or paid dividends in the past, and we may not pay dividends in the future. As a result, until we otherwise declare and pay dividends on our common stock, only appreciation in the price of our common stock, which may not occur, will provide a return to investors.
In addition, after a loan attains rescission relief, our rights to conduct investigations of potential fraud or misrepresentation are significantly curtailed and the evidentiary standards we must meet to pursue rescission for fraud are more stringent. See Item 1, " Business - Underwriting - Independent Validation and Rescission Relief.
In addition, after a loan attains rescission relief, our rights to conduct investigations of potential fraud or misrepresentation are significantly curtailed and the evidentiary standards we must meet to pursue rescission for fraud are more stringent.
Mortgage insurance issued by private companies would not meet this test. Therefore, under Basel IV, mortgage insurance could not mitigate credit and lower the capital charge under the standardized approach. On September 9, 2022, the U.S. banking regulators announced their intent to revise U.S. regulatory capital requirements to align them with Basel IV.
Therefore, under Basel IV, mortgage insurance could not mitigate credit and lower the capital charge under the standardized approach. On September 9, 2022, the U.S. banking regulators announced their intent to revise U.S. regulatory capital requirements to align them with Basel IV.
A natural disaster event could be triggered by climate change and could lead to unexpected changes in persistency rates as policyholders and borrowers who are affected by the disaster may be unable to meet their contractual obligations, such as mortgage payments on loans we insure.
A natural disaster event could lead to unexpected changes in persistency rates as policyholders and borrowers who are affected by the disaster may be unable to meet their contractual obligations, such as mortgage payments on loans we insure. A natural disaster could also trigger an economic downturn in the areas directly or indirectly affected by the natural disaster.
We cannot estimate how the rise of new variants and government actions in response to them could affect our servicers in the future.
We cannot estimate the impact of future pandemics and government actions in response to them could affect our servicers in the future.
See " The private MI industry is, and as a participant we are, subject to litigation and regulatory enforcement risk generally ," below. 40 Risks Related to Regulation of the Mortgage Insurance Industry There can be no assurance that the GSEs will continue to treat us as an approved insurer in the future, and changes to, or our failure to maintain compliance with the GSEs' PMIERs, could adversely impact our business, financial condition and operating results.
Risks Related to Regulation of the Mortgage Insurance Industry There can be no assurance that the GSEs will continue to treat us as an approved insurer in the future, and changes to, or our failure to maintain compliance with the GSEs' PMIERs, could adversely impact our business, financial condition and operating results.
If servicers of our insured loans fail to adhere to applicable requirements, procedures and standards, our losses may unexpectedly increase. 35 We have delegated the authority to implement certain loss mitigation options on loans we insure ( e.g. , modifications, short sales and deeds-in-lieu) to the GSEs, who have in turn delegated such authority to most of their approved servicers, pursuant to the delegation agreements.
We have delegated the authority to implement certain loss mitigation options on loans we insure ( e.g. , modifications, short sales and deeds-in-lieu) to the GSEs, who have in turn delegated such authority to most of their approved servicers, pursuant to the delegation agreements.
Holders of our common stock bear the risk of such future issuances of debt or preferred stock reducing the market value of our common stock. 48 Provisions contained in our organizational documents, as well as provisions of Delaware law and Wisconsin insurance law, could delay or prevent a change of control of us, which could adversely affect the price of shares of our common stock.
Provisions contained in our organizational documents, as well as provisions of Delaware law and Wisconsin insurance law, could delay or prevent a change of control of us, which could adversely affect the price of shares of our common stock.
The mix of business we write affects our revenue stream and the likelihood of losses occurring. Even when housing values are stable or rising, mortgages with certain characteristics have higher probabilities of claims.
As a result, we could suffer unexpected losses, which could adversely impact our business, financial condition and operating results. The mix of business we write affects our revenue stream and the likelihood of losses occurring. Even when housing values are stable or rising, mortgages with certain characteristics have higher probabilities of claims.
These provisions, alone or together, could delay hostile takeovers and changes of control of the Company or changes in our management. Additionally, cumulative voting in the election of our directors is not allowed.
These provisions, alone or together, could delay hostile takeovers and changes of control of the Company or changes in our management.
Our mortgage insurance premiums may not be adequate to cover our future claim payments. We set premiums at the time a policy is issued based on our expectations regarding likely performance over the term of the policy. Our premium rates are developed based on certain expectations that may ultimately prove to be inaccurate.
The premiums we charge may be insufficient to cover claim payments and our operating costs. Our mortgage insurance premiums may not be adequate to cover our future claim payments. We set premiums at the time a policy is issued based on our expectations regarding likely performance over the term of the policy.
As of December 31, 2024, we had 87,902,626 shares of our common stock issued and 78,600,726 shares outstanding. Sales of substantial amounts of our common stock in the public market in the future, or the perception that these sales could occur, could cause the market price of our common stock to decline.
As of December 31, 2025, we had 88,371,465 shares of our common stock issued and 76,285,242 shares outstanding. Sales of substantial amounts of our common stock in the public market in the future, or the perception that these sales could occur, could cause the market price of our common stock to decline.
Servicers are required to comply with a multitude of legal, regulatory and GSE requirements, procedures and standards for servicing residential mortgage loans.
Servicers are required to comply with a multitude of legal, regulatory and GSE requirements, procedures and standards for servicing residential mortgage loans. If servicers of our insured loans fail to adhere to applicable requirements, procedures and standards, our losses may unexpectedly increase.
If these USPs fail to perform their services as expected, we could experience increased claims on loans underwritten by them, and our customer relationships could be negatively impacted, which would have an adverse impact on our business, financial condition and operating results. 34 Our Master Policies contain restrictions on our ability to rescind coverage for certain material misrepresentations (including fraud) and underwriting defects, and if we were to fail to timely discover any such misrepresentations or underwriting defects, our rights of rescission would be significantly limited, and we could suffer increased losses as a result of paying claims on loans with unacceptable risk characteristics.
Our Master Policies contain restrictions on our ability to rescind coverage for certain material misrepresentations (including fraud) and underwriting defects, and if we were to fail to timely discover any such misrepresentations or underwriting defects, our rights of rescission would be significantly limited, and we could suffer increased losses as a result of paying claims on loans with unacceptable risk characteristics.
If the Basel Committee revises the Basel IV framework to reduce or eliminate the capital benefit banks receive from insuring low down payment loans with private MI, our current and future business may be adversely affected.
If the Basel Committee revises the Basel IV framework to reduce or eliminate the capital benefit banks receive from insuring low down payment loans with private MI, our current and future business may be adversely affected. 46 Risks Related to Our Holding Company and Capital Structure Our holding company structure and certain regulatory and other constraints could affect our ability to satisfy our obligations and potentially require us to raise more capital.
" The capital adequacy requirements, among other factors, govern the capital treatment of MI purchased and held on balance sheet by domestic and international banks in respect of their residential mortgage loan origination and securitization activities. In July 2013, U.S. banking regulators promulgated regulations to implement significant elements of the Basel framework, which we refer to as Basel III.
Mortgage Insurance Regulations - Basel Rules.” The capital adequacy requirements, among other factors, govern the capital treatment of MI purchased and held on balance sheet by domestic and international banks in respect of their residential mortgage loan origination and securitization activities.
" With these provisions in our Master Policies, we may be obligated to pay claims on certain loans with unacceptable risk characteristics or which failed to meet our underwriting guidelines at the time of origination. As a result, we could suffer unexpected losses, which could adversely impact our business, financial condition and operating results.
See Item 1, “ Business - Underwriting - Independent Validation and Rescission Relief.” With these provisions in our Master Policies, we may be obligated to pay claims on certain loans with unacceptable risk characteristics or which failed to meet our underwriting guidelines at the time of origination.
An inability to access reinsurance, capital and credit markets when needed to continue to grow our business, refinance our existing debt or raise new debt or equity could have a material adverse effect on our business, financial condition, operating results and liquidity.
An inability to access reinsurance, capital and credit markets when needed to continue to grow our business, refinance our existing debt or raise new debt or equity could have a material adverse effect on our business, financial condition, operating results and liquidity. 48 Risks Related to Ownership of Our Common Stock We do not currently pay any dividends on our common stock and may not pay any dividends on our common stock in the future, and payment of any declared dividends may be delayed.
Our premiums are subject to approval by certain state insurance regulators, which can delay or limit our ability to increase our premiums. Generally, we will not be able to cancel the MI coverage or adjust renewal premiums during the life of an MI policy to mitigate adverse development.
Generally, we will not be able to cancel the MI coverage or adjust renewal premiums during the life of an MI policy to mitigate adverse development.
If our technology platforms fail to perform in the manner we expect, our business, financial condition and operating results may be significantly harmed. Further, our business would be negatively impacted if we are unable to enhance our platform when necessary to support our primary business functions, including to match or exceed the technological capabilities of our competitors over time.
Further, our business would be negatively impacted if we are unable to enhance our platform when necessary to support our primary business functions, including to match or exceed the technological capabilities of our competitors over time (including with respect to new and complex information technology such as artificial intelligence).

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity program is aligned with industry standards, such as the National Institute of Standards and Technology (NIST) Cybersecurity Framework, and we periodically engage third parties as part of our continuing efforts to evaluate, enhance and test the adequacy and effectiveness of our security measures and controls.
Biggest changeOur cybersecurity program is aligned with industry standards, such as the NIST Cybersecurity Framework, and we periodically engage third parties as part of our continuing efforts to evaluate, enhance and test the adequacy and effectiveness of our security measures and controls.
Despite robust controls and safeguards in place, no system can guarantee complete security from internal and external threats. See Item 1A, " Risk Factors - We may not be able to prevent the unauthorized disclosure or misuse of confidential, personal or proprietary information. "
Despite robust controls and safeguards in place, no system can guarantee complete security from internal and external threats. See Item 1A, “ Risk Factors - We may not be able to prevent the unauthorized disclosure or misuse of confidential, personal or proprietary information.”
Our cybersecurity program is fully integrated into our overall risk management framework and is regularly evaluated by internal and external experts. Our information security program is managed by a dedicated Chief Information Security Officer (CISO), who has over 25 years of relevant experience.
Our cybersecurity program is fully integrated into our overall risk management framework and is regularly evaluated by internal and external experts. Our information security program is managed by a dedicated CISO, who has over 25 years of relevant experience.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We lease approximately 36,983 square feet of office space in Emeryville, California pursuant to an office facility lease that we initially entered into in 2012 (as amended, the Lease). The term of the Lease extends through March 2030. 50
Biggest changeItem 2. Properties We lease approximately 36,983 square feet of office space in Emeryville, California pursuant to an office facility lease that we initially entered into in 2012 (as amended, the Lease). The term of the Lease extends through March 2030. 52

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 51 PART II
Biggest changeMine Safety Disclosures Not applicable. 53 PART II
Removed
As we have previously disclosed, we were named as a defendant in one litigation case that involves refunds of mortgage insurance premiums under the Homeowners Protection Act. In September 2023, the United States District Court for the Eastern District of Virginia granted our motion to dismiss the case.
Removed
Subsequently, the plaintiff filed a notice of appeal in October 2023, appealing the District Court’s decision to the United States Court of Appeals for the Fourth Circuit. The appeal is currently pending.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change($ In Thousands, except for per share data) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Repurchased Under the Plans or Program (1) Period: 10/1/2024 to 10/31/2024 209,301 $ 40.36 209,301 $ 99,609 11/1/2024 to 11/30/2024 210,716 38.03 210,716 91,596 12/1/2024 to 12/31/2024 301,521 38.06 301,521 80,120 Total 721,538 721,538 (1) On February 10, 2022, our Board of Directors approved a $125 million share repurchase program effective through December 31, 2023, excluding associated costs and applicable taxes.
Biggest change($ In Thousands, except for per share data) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Repurchased Under the Plans or Program (1) Period: 10/1/2025 to 10/31/2025 263,420 $ 36.35 263,420 $ 246,871 11/1/2025 to 11/30/2025 242,659 37.29 242,659 237,821 12/1/2025 to 12/31/2025 304,550 39.24 304,550 225,872 Total 810,629 810,629 (1) On July 31, 2023, our Board of Directors authorized a $200 million share repurchase program (the 2023 Repurchase Program), effective through December 31, 2025.
For information on our ability to pay dividends, see Item 7, “ Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” and Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 17, Regulatory Information - Dividend Restrictions.” Issuer Purchases of Equity Securities The following table provides information about purchases of NMI Holdings, Inc. common stock by us during the three months ended December 31, 2024.
For information on our ability to pay dividends, see Item 7, “ Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” and Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 17, Regulatory Information - Dividend Restrictions.” Issuer Purchases of Equity Securities The following table provides information about purchases of NMI Holdings, Inc. common stock by us during the three months ended December 31, 2025.
See Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 16, Common Stock,” and “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 18, Subsequent Events,” for additional information. 52 Common Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock from December 31, 2019 until December 31, 2024, with the cumulative total stockholder return on the Russell 2000 Index, S&P Small Cap 600 Index and an index of selected mortgage insurance companies (Peer Index).
See Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 16, Common Stock,” for additional information. 54 Common Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock from December 31, 2020 until December 31, 2025, with the cumulative total stockholder return on the Russell 2000 Index, S&P Small Cap 600 Index and an index of selected mortgage insurance companies (Peer Index).
The closing price of our common stock on Nasdaq on February 10, 2025 was $36.48. No dividends on our common stock have previously been declared or paid, and we may not declare or pay dividends in the future.
The closing price of our common stock on Nasdaq on February 6, 2026 was $41.05. No dividends on our common stock have previously been declared or paid, and we may not declare or pay dividends in the future.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the Nasdaq stock exchange under the symbol “NMIH.” On February 10, 2025, there were 78,452,097 shares of our common stock outstanding and approximately ten holders of record.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the Nasdaq stock exchange under the symbol “NMIH.” On February 6, 2026, there were 76,032,627 shares of our common stock outstanding and approximately seven holders of record.
On February 5, 2025, our Board of Directors authorized a new $250 million share repurchase program (excluding associated costs and applicable taxes) effective through December 31, 2027 and an extension of our existing share repurchase programs through December 31, 2027 to align its remaining tenor with that of the new $250 million program.
On February 5, 2025, our Board of Directors authorized an additional $250 million repurchase program (the 2025 Repurchase Program), effective through December 31, 2027, and extended the effectiveness of the 2023 Repurchase Program through December 31, 2027 to align its remaining tenor with that of the 2025 Repurchase Program.
Information contained or referenced in the stock performance graph below is being furnished with this report and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 NMI Holdings, Inc. $ 100 $ 68 $ 66 $ 63 $ 89 $ 111 Russell 2000 Index 100 120 138 110 128 143 S&P Small Cap 600 100 111 141 118 137 149 Peer Index (ESNT, MTG, RDN) 100 86 91 80 112 120 Item 6. [Reserved] 53
Information contained or referenced in the stock performance graph below is being furnished with this report and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act. 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 NMI Holdings, Inc. $ 100 $ 96 $ 92 $ 131 $ 162 $ 180 Russell 2000 Index 100 115 91 107 119 134 S&P Small Cap 600 100 127 106 123 134 142 Peer Index (ESNT, MTG, RDN) 100 106 93 130 140 166 Item 6. [Reserved] 55
Removed
On July 31, 2023, our Board of Directors approved an extension of the $125 million repurchase program through December 31, 2025, and also approved a $200 million share repurchase program (excluding associated costs and applicable taxes) effective through December 31, 2025.
Removed
As of December 31, 2024, no repurchase authority remained available under the February 2022 share repurchase program and $80.1 million repurchase authority remained under the July 2023 share repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor further information, see Part I, Item 1C, “ Cybersecurity. ” 69 Consolidated Results of Operations Consolidated statements of operations For the years ended December 31, $ Change % Change $ Change % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Revenues ($ In Thousands, except for per share data) Net premiums earned $ 564,688 $ 510,768 $ 475,266 $ 53,920 11 % $ 35,502 7 % Net investment income 85,316 67,512 46,406 17,804 26 21,106 45 Net realized investment gains (losses) 23 (33) 481 56 (170) (514) (107) Other revenues 944 756 1,192 188 25 (436) (37) Total revenues 650,971 579,003 523,345 71,968 12 55,658 11 Expenses Insurance claims and claim expenses (benefits) 31,544 22,618 (3,594) 8,926 39 26,212 (729) Underwriting and operating expenses 118,397 110,699 117,490 7,698 7 (6,791) (6) Service expenses 723 771 1,094 (48) (6) (323) (30) Interest expense 36,896 32,212 32,163 4,684 15 49 — Gain from change in fair value of warrant liability — — (1,113) — NM (4) 1,113 NM (4) Total expenses 187,560 166,300 146,040 21,260 13 20,260 14 Income before income taxes 463,411 412,703 377,305 50,708 12 35,398 9 Income tax expense 103,305 90,593 84,403 12,712 14 6,190 7 Net income $ 360,106 $ 322,110 $ 292,902 $ 37,996 12 % $ 29,208 10 % Earnings per share - Basic $ 4.51 $ 3.91 $ 3.45 $ 0.60 15 % $ 0.46 13 % Earnings per share - Diluted $ 4.43 $ 3.84 $ 3.39 $ 0.59 15 % $ 0.45 13 % Loss ratio (1) 5.6 % 4.4 % (0.8) % Expense ratio (2) 21.0 % 21.7 % 24.7 % Combined ratio (3) 26.6 % 26.1 % 24.0 % For the years ended December 31, $ Change % Change $ Change % Change Non-GAAP financial measures (5) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 ($ In Thousands, except for per share data) Adjusted income before tax $ 470,354 $ 412,736 $ 375,916 $ 57,618 14 % $ 36,820 10 % Adjusted net income 365,591 322,136 291,571 43,455 13 30,565 10 Adjusted diluted EPS 4.50 3.84 3.39 0.66 17 0.45 13 (1) Loss ratio is calculated by dividing insurance claims and claim expenses (benefits) by net premiums earned.
Biggest changeConsolidated statements of operations For the years ended December 31, $ Change % Change 2025 2024 2025 vs. 2024 Revenues ($ In Thousands, except for per share data) Net premiums earned $ 602,212 $ 564,688 $ 37,524 7 % Net investment income 102,937 85,316 17,621 21 Net realized investment gains 432 23 409 NM (4) Other revenues 859 944 (85) (9) Total revenues 706,440 650,971 55,469 9 Expenses Insurance claims and claim expenses 57,649 31,544 26,105 83 Underwriting and operating expenses 119,908 118,397 1,511 1 Service expenses 601 723 (122) (17) Interest expense 28,478 36,896 (8,418) (23) Total expenses 206,636 187,560 19,076 10 Income before income taxes 499,804 463,411 36,393 8 Income tax expense 110,878 103,305 7,573 7 Net income $ 388,926 $ 360,106 $ 28,820 8 % Earnings per share - Basic $ 5.01 $ 4.51 $ 0.50 11 % Earnings per share - Diluted $ 4.92 $ 4.43 $ 0.49 11 % Loss ratio (1) 9.6 % 5.6 % Expense ratio (2) 19.9 % 21.0 % Combined ratio (3) 29.5 % 26.6 % For the years ended December 31, $ Change % Change Non-GAAP financial measures (5) 2025 2024 2025 vs. 2024 ($ In Thousands, except for per share data) Adjusted income before tax $ 499,372 $ 470,354 $ 29,018 6 % Adjusted net income 388,584 365,591 22,993 6 Adjusted diluted EPS 4.92 4.50 0.42 9 (1) Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
Adjustments to reserve estimates are reflected in the period in which the adjustment is made. Reserves are also ceded to reinsurers under the QSR Transactions, ILN Transactions and XOL Transactions as applicable under each treaty.
Adjustments to reserve estimates are reflected in the period in which the adjustment is made. Reserves are also ceded to reinsurers under the QSR Transactions, XOL Transactions and ILN Transactions as applicable under each treaty.
We have not yet ceded reserves under any of the ILN Transactions or XOL Transactions as incurred claims and claim expenses on each respective reference pool remain within our retained coverage layer for each transaction. Our reserve setting process considers the beneficial impact of forbearance, foreclosure moratorium and other assistance programs that may be made available to certain defaulted borrowers.
We have not yet ceded reserves under any of the XOL Transactions or ILN Transactions as incurred claims and claim expenses on each respective reference pool remain within our retained coverage layer for each transaction. Our reserve setting process considers the beneficial impact of forbearance, foreclosure moratorium and other assistance programs that may be made available to certain defaulted borrowers.
The risk-based required asset amount is a function of the risk profile of an approved insurer's RIF, assessed on a loan-by-loan basis and considered against certain risk-based factors derived from tables set out in the PMIERs, which is then adjusted on an aggregate basis for reinsurance transactions approved by the GSEs, such as with respect to our ILN Transactions, XOL Transactions and QSR Transactions.
The risk-based required asset amount is a function of the risk profile of an approved insurer's RIF, assessed on a loan-by-loan basis and considered against certain risk-based factors derived from tables set out in the PMIERs, which is then adjusted on an aggregate basis for reinsurance transactions approved by the GSEs, such as with respect to our QSR Transactions, XOL Transactions and ILN Transactions.
Claims incurred are generally affected by a variety of factors, including: • future macroeconomic factors, including national and regional unemployment rates, which affect the likelihood that borrowers may default on their loans and probability of claims, and interest rates, which tend to drive increased persistency as they rise, thereby extending the average life of our insured portfolio and increasing expected future claims and decrease persistency as they fall, thereby shortening the average life of our insured portfolio and moderating future expected claims; • changes in housing values, as such changes affect loss mitigation opportunities (available to us and a borrower) on loans in default, as well as borrowers' behaviors and willingness to default if the values of their homes are below or perceived to be below the balance of their mortgage; • borrowers' FICO scores, with lower FICO scores tending to have a higher probability of claims; • borrowers' DTI ratios, with higher DTI ratios tending to have a higher probability of claims; • LTV ratios, with higher average LTV ratios tending to increase the probability of claims; • the size of loans insured, with higher loan amounts tending to result in higher incurred claim amounts than smaller loan amounts; • the percentage of coverage on insured loans, with higher percentages of insurance coverage tending to result in higher incurred claim amounts than lower percentages of insurance coverage; • other borrower, property-type and loan level risk characteristics, such as cash-out refinancings, second homes or investment properties; and • the level and amount of reinsurance coverage maintained with third parties.
Claims incurred are generally affected by a variety of factors, including: • future macroeconomic factors, including national and regional unemployment rates, which affect the likelihood that borrowers may default on their loans and probability of claims, and interest rates, which tend to drive increased persistency as they rise, thereby extending the average life of our insured portfolio and increasing expected future claims and decrease persistency as they fall, thereby shortening the average life of our insured portfolio and moderating future expected claims; 63 • changes in housing values, as such changes affect loss mitigation opportunities (available to us and a borrower) on loans in default, as well as borrowers' behaviors and willingness to default if the values of their homes are below or perceived to be below the balance of their mortgage; • borrowers' FICO scores, with lower FICO scores tending to have a higher probability of claims; • borrowers' DTI ratios, with higher DTI ratios tending to have a higher probability of claims; • LTV ratios, with higher average LTV ratios tending to increase the probability of claims; • the size of loans insured, with higher loan amounts tending to result in higher incurred claim amounts than smaller loan amounts; • the percentage of coverage on insured loans, with higher percentages of insurance coverage tending to result in higher incurred claim amounts than lower percentages of insurance coverage; • other borrower, property-type and loan level risk characteristics, such as cash-out refinancings, second homes or investment properties; and • the level and amount of reinsurance coverage maintained with third parties.
NMIC's principal liquidity demands include funds for the payment of (i) reimbursable holding company expenses, (ii) premiums ceded under our reinsurance transactions (iii) claims payments, and (iv) taxes as due or otherwise 77 deferred through the purchase of tax and loss bonds. NMIC’s cash inflow is generally significantly in excess of its cash outflow in any given period.
NMIC's principal liquidity demands include funds for the payment of (i) reimbursable holding company expenses, (ii) premiums ceded under our reinsurance transactions, (iii) claims payments, and (iv) taxes as due or otherwise deferred through the purchase of tax and loss bonds. NMIC’s cash inflow is generally significantly in excess of its cash outflow in any given period.
Past adjustments under this category include infrequent, unusual or non-operating adjustments related to severance, restricted stock modification and other expenses incurred in connection with the CEO transition announced in September 2021 and the effects of the release of the valuation allowance recorded against our net federal and certain state net deferred tax assets in 2016 and the re-measurement of our net deferred tax assets in connection with tax reform in 2017.
Past adjustments under this category include infrequent, unusual or non-operating adjustments related to severance, restricted stock modification and other expenses incurred in connection with the CEO transition announced in 2021, effects of the release of the valuation allowance recorded against our net federal and certain state net deferred tax assets in 2016 and the re-measurement of our net deferred tax assets in connection with tax reform in 2017.
We believe the introduction and utilization of Rate GPS ® provides us with a more granular and analytical approach to evaluating and pricing risk, and that this approach enhances our ability to continue building a high-quality mortgage insurance portfolio and delivering attractive risk-adjusted returns. Premiums are generally fixed for the duration of our coverage of the underlying loans.
We believe that the utilization of Rate GPS ® provides us with a more granular and analytical approach to evaluating and pricing risk, and that this approach enhances our ability to continue building a high-quality mortgage insurance portfolio and delivering attractive risk-adjusted returns. Premiums are generally fixed for the duration of our coverage of the underlying loans.
NMIC is not a party to any contracts (derivative or otherwise) that require it to post an increasing amount of collateral to any counterparty and NMIC’s principal liquidity demands (other than claims payments) generally develop along a scheduled path ( i.e. , are of a contractually predetermined amount and due at a contractually predetermined date).
NMIC is not a party to any contracts (derivative or otherwise) that require it to post an increasing amount of collateral to any counterparty and NMIC’s principal liquidity demands (other than claims payments) generally develop along a 75 scheduled path ( i.e. , are of a contractually predetermined amount and due at a contractually predetermined date).
The actual claims we incur as our portfolio matures are difficult to predict and depend on the specific characteristics of our current in-force book (including the credit score and DTI ratio of the borrower, the LTV ratio of the mortgage and geographic 65 concentrations, among others), as well as the risk profile of new business we write in the future.
The actual claims we incur as our portfolio matures are difficult to predict and depend on the specific characteristics of our current in-force book (including the credit score and DTI ratio of the borrower, the LTV ratio of the mortgage and geographic concentrations, among others), as well as the risk profile of new business we write in the future.
(5) Defined as the percentage of IIF that is no longer on our books after a given three-month period. Figures shown represent fourth quarter values for the respective years. The table below presents a summary of the change in total primary IIF for the dates and periods indicated.
(5) Defined as the percentage of IIF that is no longer on our books after a given three-month period. Figures shown represent fourth quarter values for the respective years. 59 The table below presents a summary of the change in total primary IIF for the dates and periods indicated.
We monitor the concentrations of various risk attributes in our insurance portfolio, which may change over time, in part, as a result of regional conditions or public policy shifts. The tables below present our primary NIW by FICO, LTV and purchase/refinance mix for the periods indicated.
We monitor the concentrations of various risk attributes in our insurance portfolio, which may change over time, in part, as a result of regional conditions or public policy shifts. The tables below present our NIW by FICO, LTV and purchase/refinance mix for the periods indicated.
The aggregate gross risk-based required asset amount for performing, primary insurance is subject to a floor of 5.6% of performing primary adjusted RIF . By April 15th of each year, NMIC must certify it met all PMIERs requirements as of December 31st of the prior year.
The aggregate gross risk-based required asset amount for performing, primary insurance is subject to a floor of 5.6% of performing primary adjusted RIF . 67 By April 15th of each year, NMIC must certify it met all PMIERs requirements as of December 31st of the prior year.
Adjustments to components of pre-tax income are tax effected using the applicable federal statutory tax rate for the respective periods. 72 Adjusted diluted EPS is defined as adjusted net income divided by adjusted weighted average diluted shares outstanding.
Adjustments to components of pre-tax income are tax effected using the applicable federal statutory tax rate for the respective periods. Adjusted diluted EPS is defined as adjusted net income divided by adjusted weighted average diluted shares outstanding.
It is possible that a relatively small change in our estimates for claim frequency or claim severity could have a material impact on our reserve position and our consolidated results of operations, even in a stable macroeconomic environment.
It is possible that a relatively small change in our estimates of claim frequency or claim severity could have a material impact on our reserve position and our consolidated results of operations, even in a stable macroeconomic environment.
We discuss below our results of operations for the periods presented, as well as the conditions and trends that have impacted or are expected to impact our business, including new insurance writings, the composition of our insurance portfolio and other factors that we expect to impact our results. 54 Conditions and Trends Affecting Our Business Macroeconomic Developments Macroeconomic factors, including persistent inflation, elevated interest rates, flagging consumer confidence and increasing jobless claims could have a pronounced impact on the housing market, the mortgage insurance industry and our business in future periods.
We discuss below our results of operations for the periods presented, as well as the conditions and trends that have impacted or are expected to impact our business, including new insurance writings, the composition of our insurance portfolio and other factors that we expect to impact our results. 56 Conditions and Trends Affecting Our Business Macroeconomic Developments Macroeconomic factors, including persistent inflation, elevated interest rates, flagging consumer confidence and increasing jobless claims could have a pronounced impact on the housing market, the mortgage insurance industry and our business in future periods.
As a result, net premiums written are generally influenced by: • NIW; • premium rates and the mix of premium payment type, which are either single, monthly or annual premiums, as described below; 55 • cancellation rates of our insurance policies, which are impacted by payments or prepayments on mortgages, refinancings (which are affected by prevailing mortgage interest rates as compared to interest rates on loans underpinning our in force policies), levels of claim payments and home prices; and • cession of premiums under third-party reinsurance arrangements.
As a result, net premiums written are generally influenced by: • NIW; • premium rates and the mix of premium payment type, which are either single, monthly or annual premiums, as described below; • cancellation rates of our insurance policies, which are impacted by payments or prepayments on mortgages, refinancings (which are affected by prevailing mortgage interest rates as compared to interest rates on loans underpinning our in force policies), levels of claim payments and home prices; and 57 • cession of premiums under third-party reinsurance arrangements.
For single premiums, we receive a single premium payment at origination, which is earned over the estimated life of the policy. Substantially all of our single premium policies in force as of December 31, 2024 were non-refundable under most cancellation scenarios. If non-refundable single premium policies are canceled, we immediately recognize the remaining unearned premium balances as earned premium revenue.
For single premiums, we receive a single premium payment at origination, which is earned over the estimated life of the policy. Substantially all of our single premium policies in force as of December 31, 2025 were non-refundable under most cancellation scenarios. If non-refundable single premium policies are canceled, we immediately recognize the remaining unearned premium balances as earned premium revenue.
(2) Includes short-term securities rated A-1+. (3) Includes +/– ratings. (4) We held one security with a BB+ rating at December 31, 2024 and 2023, which is not identifiable in the table due to rounding. All of our investments are rated by one or more nationally recognized statistical rating organizations.
(2) Includes short-term securities rated A-1+. (3) Includes +/– ratings. (4) We held one security with a BB rating at December 31, 2024, which is not identifiable in the table due to rounding. All of our investments are rated by one or more nationally recognized statistical rating organizations.
Rather, the unrealized losses on securities held as of December 31, 2024 were primarily driven by fluctuations in interest rates, and to a lesser extent, movements in credit spreads following the purchase of those securities. Taxes We are a U.S. taxpayer and are subject to a statutory U.S. federal corporate income tax rate of 21%.
Rather, the unrealized losses on securities held as of December 31, 2025 were primarily driven by fluctuations in interest rates, and to a lesser extent, movements in credit spreads following the purchase of those securities. Taxes We are a U.S. taxpayer and are subject to a statutory U.S. federal corporate income tax rate of 21%.
The increase in the reserves for insurance claims and claim expenses was partially offset by the release of a portion of the reserves we established for anticipated claims payments in prior periods (in connection with cure activity and ongoing analysis of recent loss development trends), as well as the payment of previously reserved claims during the period.
The increase in the reserves for insurance claims and claim expenses was partially offset by the release of a portion of the reserves we established for anticipated claims payments in prior periods (in connection with cure activity and ongoing analysis of recent loss development trends), as well as the payment of previously reserved claims during the year.
Premiums are paid either by the borrower (borrower-paid mortgage insurance or BPMI) or the lender (lender-paid mortgage insurance or LPMI) in a single payment at origination (single premium), on a monthly installment basis (monthly premium) or on an annual installment basis (annual premium). Our net premiums written will differ from our net premiums earned due to policy payment type.
Premiums are paid either by the borrower (BPMI) or the lender (LPMI) in a single payment at origination (single premium), on a monthly installment basis (monthly premium) or on an annual installment basis (annual premium). Our net premiums written will differ from our net premiums earned due to policy payment type.
Based upon our assessment of the amount and timing of cash flows to be collected over the remaining life of each instrument, we believe the unrealized losses as of December 31, 2024 are not indicative of the ultimate collectability of the current amortized cost of the securities.
Based upon our assessment of the amount and timing of cash flows to be collected over the remaining life of each instrument, we believe the unrealized losses as of December 31, 2025 are not indicative of the ultimate collectability of the current amortized cost of the securities.
See Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 6, Reinsurance ” for further discussion of these third-party reinsurance arrangements. 59 Portfolio Data The following table presents NIW and IIF as of the dates and for the periods indicated.
See Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 6, Reinsurance ” for further discussion of these third-party reinsurance arrangements. Portfolio Data The following table presents NIW and primary IIF as of the dates and for the periods indicated.
We continue to evaluate the realizability of our state net deferred tax asset position, and our examination of results through December 31, 2024 and review of future expectations support the continued application of a valuation allowance against such state net deferred tax assets.
We continue to evaluate the realizability of our state net deferred tax asset position, and our examination of results through December 31, 2025 and review of future expectations support the continued application of a valuation allowance against such state net deferred tax assets.
We establish reserves for loans that have been reported to us in default by servicers, referred to as case reserves, and additional loans that we estimate (based on actuarial review and other factors) to be in default that have not yet been reported to us by servicers, referred to as incurred but not reported (IBNR).
We establish reserves for loans that have been reported to us in default by servicers, referred to as case reserves, and additional loans that we estimate (based on actuarial review and other factors) to be in default that have not yet been reported to us by servicers, referred to as IBNR.
On August 21, 2024, the GSEs and FHFA updated PMIERs to revise the Available Asset credit mortgage insurers will receive for certain assets based on several factors, including asset class and credit rating. The updated PMIERs will take effect on a phased basis beginning March 31, 2025 and will be fully implemented on September 30, 2026.
On August 21, 2024, the GSEs and FHFA updated PMIERs to revise the Available Asset credit mortgage insurers will receive for certain assets based on several factors, including asset class and credit rating. The updated PMIERs took effect on a phased basis on March 31, 2025 and will be fully implemented on September 30, 2026.
Geographic Dispersion The following table shows the distribution by state of our primary RIF as of the dates indicated. The distribution of our primary RIF as of December 31, 2024 is not necessarily representative of the geographic distribution we expect in the future.
Geographic Dispersion The following table shows the distribution by state of our primary RIF as of the dates indicated. The distribution of our primary RIF as of December 31, 2025 is not necessarily representative of the geographic distribution we expect in the future.
Our ability to utilize our remaining federal net operating loss carryforward is restricted by Section 382 of the Internal Revenue Code (IRC), which imposes annual limitations if there is an “ownership change.” As a result of the acquisition of our insurance subsidiaries in 2012, $7.3 million of federal net operating losses were subject to annual limitations of $0.8 million through 2016, $0.5 million in 2017 and $0.3 million, thereafter, through 2028.
Our ability to utilize our remaining federal net operating loss carryforward is restricted by Section 382 of the Internal Revenue Code (IRC), which imposes annual utilization limitations in the event of an “ownership change.” As a result of the acquisition of our insurance subsidiaries in 2012, $7.3 million of federal net operating losses were subject to annual utilization limitations of $0.8 million through 2016, $0.5 million in 2017 and $0.3 million, thereafter through 2028.
We evaluated the securities in an unrealized loss position as of December 31, 2024, assessing their credit ratings as well as any adverse conditions specifically related to the security.
We evaluated the securities in an unrealized loss position as of December 31, 2025, assessing their credit ratings as well as any adverse conditions specifically related to the security.
Since formation, we have sought to establish customer relationships with a broad group of mortgage lenders and build a diversified, high-quality insured portfolio. As of December 31, 2024, we had issued master policies with 2,086 customers, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders and other non-bank lenders.
Since formation, we have sought to establish customer relationships with a broad group of mortgage lenders and build a diversified, high-quality insured portfolio. As of December 31, 2025, we had issued master policies with 2,193 customers, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders and other non-bank lenders.
Our common stock trades on the Nasdaq under the symbol “NMIH.” Our headquarters is located in Emeryville, California. As of December 31, 2024, we had 230 employees. Our corporate website is located at www.nationalmi.com . Our website and the information contained on or accessible through our website are not incorporated by reference into this report.
Our common stock trades on the Nasdaq under the symbol “NMIH.” Our headquarters is located in Emeryville, California. As of December 31, 2025, we had 225 employees. Our corporate website is located at www.nationalmi.com . Our website and the information contained on or accessible through our website are not incorporated by reference into this report.
We consider an activation to be the point at which we have signed a Master Policy, established IT connectivity and generated a first application or first dollar of NIW from a customer. During the year ended December 31, 2024, we activated 118 lenders, compared to 70 and 120 for the years ended December 31, 2023 and 2022, respectively.
We consider an activation to be the point at which we have signed a Master Policy, established IT connectivity and generated a first application or first dollar of NIW from a customer. During the year ended December 31, 2025, we activated 90 lenders, compared to 118 and 70 for the years ended December 31, 2024 and 2023, respectively.
An increase in the value of the homes collateralizing the mortgages we insure provides defaulted borrowers with alternative paths and incentives to cure their loan prior to the development of a claim. Our claims severity for the years ended December 31, 2024, 2023 and 2022 was 61%, 55% and 49%, respectively.
An increase in the value of the homes collateralizing the mortgages we insure provides defaulted borrowers with alternative paths and incentives to cure their loan prior to the development of a claim. Our claims severity for the years ended December 31, 2025, 2024 and 2023 was 76%, 61% and 55%, respectively.
The number of claims paid and our severity experience in future periods may be impacted if developing economic cycles impose financial strain on borrowers, and each could increase if house price declines serve to limit the alternative paths and incentives to cure delinquencies that are available to defaulted borrowers or erode the equity value of the homes collateralizing the mortgages we insure. 67 The following table provides detail on our average reserve per default, before giving effect to reserves ceded under the QSR Transactions, as of the dates indicated: Average reserve per default: As of December 31, 2024 2023 2022 (In Thousands) Case (1) $ 21.0 $ 22.4 $ 20.8 IBNR (1) (2) 1.9 1.9 1.6 Total $ 22.9 $ 24.3 $ 22.4 (1) Defined as the gross reserve per insured loan in default.
The number of claims paid and our severity experience in future periods may be impacted if developing economic cycles impose financial strain on borrowers, and each could increase if house price declines serve to limit the alternative paths and incentives to cure delinquencies that are available to defaulted borrowers or erode the equity value of the homes collateralizing the mortgages we insure. 66 The following table provides detail on our average reserve per default, before giving effect to reserves ceded under the QSR Transactions, as of the dates indicated: Average reserve per default: As of December 31, 2025 2024 2023 (In Thousands) Case (1) $ 23.5 $ 21.0 $ 22.4 IBNR (1) (2) 2.1 1.9 1.9 Total $ 25.6 $ 22.9 $ 24.3 (1) Defined as the gross reserve per insured loan in default.
Reserve for insurance claims and claim expenses increased in connection with the establishment of initial reserves on newly defaulted loans during the year ended December 31, 2024, as well as an increase in the average case reserve held against previously defaulted loans that have aged in their delinquency status.
Reserve for insurance claims and claim expenses increased at December 31, 2025 in connection with the establishment of initial reserves on newly defaulted loans, as well as an increase in the average case reserve held against previously defaulted loans that aged in their delinquency status during the year ended December 31, 2025.
Re One has no risk in force remaining and no longer reports a RTC ratio. NMIC’s principal sources of liquidity include (i) premium receipts on its insured portfolio and new business production, (ii) interest income on its investment portfolio and principal repayments on maturities therein, and (iii) existing cash and cash equivalent holdings.
Re One has no RIF remaining and no longer reports a RTC ratio. NMIC’s principal sources of liquidity include (i) premium receipts on its insured portfolio and new business production, (ii) interest income on its investment portfolio and principal repayments on maturities therein, and (iii) existing cash and cash equivalent holdings.
(2) Severity represents the total amount of claims paid including claim expenses divided by the related RIF on the loan at the time the claim is perfected, and is calculated including claims settled without payment. We paid 276, 199 and 81 claims during the years ended December 31, 2024, 2023 and 2022, respectively.
(2) Severity represents the total amount of claims paid including claim expenses divided by the related RIF on the loan at the time the claim is perfected, and is calculated including claims settled without payment. We paid 445, 276 and 199 claims during the years ended December 31, 2025, 2024 and 2023, respectively.
Net risk-based required assets were $1.8 billion at December 31, 2024, compared to $1.5 billion at December 31, 2023 and $1.2 billion at December 31, 2022.
Net risk-based required assets were $2.1 billion at December 31, 2025, compared to $1.8 billion at December 31, 2024 and $1.5 billion at December 31, 2023.
Our holding company files a consolidated U.S. federal and various state income tax returns on behalf of itself and its subsidiaries. Our effective income tax rate on pre-tax income was 22.3%, 22.0% and 22.4% for the years ended December 31, 2024, 2023 and 2022, respectively.
Our holding company files a consolidated U.S. federal and various state income tax returns on behalf of itself and its subsidiaries. Our effective income tax rate on pre-tax income was 22.2%, 22.3% and 22.0% for the years ended December 31, 2025, 2024 and 2023, respectively.
Under Wisconsin insurance laws, an extraordinary dividend is defined as any payment or distribution that, together with other dividends and distributions made within the preceding twelve months, exceeds the lesser of (i) 10% of the insurer's statutory policyholders' surplus as of the preceding December 31 or (ii) adjusted statutory net income for the twelve-month period ending the preceding December 31.
Under Wisconsin insurance laws, an ordinary dividend is defined as any payment or distribution that, together with other dividends and distributions made within the preceding twelve months, is less than the lesser of (i) 10% of the insurer's statutory policyholders' surplus as of the preceding December 31 or (ii) adjusted statutory net income for the twelve-month period ending the preceding December 31.
(2) Not meaningful. Explanation and Reconciliation of Our Use of Non-GAAP Financial Measures We believe the use of the non-GAAP measures of adjusted income before tax, adjusted net income and adjusted diluted EPS enhances the comparability of our fundamental financial performance between periods, and provides relevant information to investors.
(2) Not meaningful. Explanation and Reconciliation of Our Use of Non-GAAP Financial Measures We believe the use of the non-GAAP measures of adjusted income before tax, adjusted net income and adjusted diluted EPS enhance the comparability of our fundamental financial performance between periods, and provide relevant information to investors.
We certified to the GSEs by April 15, 2024 that NMIC was in full compliance with the PMIERs as of December 31, 2023. NMIC also has an ongoing obligation to immediately notify the GSEs in writing upon discovery of a failure to meet one or more of the PMIERs requirements.
We certified to the GSEs by April 15, 2025 that NMIC was in full compliance with the PMIERs as of December 31, 2024. NMIC also has an ongoing obligation to immediately notify the GSEs in writing upon discovery of a failure to meet one or more of the PMIERs requirements. We continuously monitor NMIC's compliance with the PMIERs.
Cash and investments at December 31, 2024 included $132.2 million held by NMIH. Net premiums receivable represents premiums due on our mortgage insurance policies and may fluctuate based on changes in our monthly premium policies in force, where premiums are generally paid one month in arrears, and the pace of settlement of previously outstanding receivables.
Cash and investments at December 31, 2025 included $130.6 million held by NMIH. Net premiums receivable represents premiums due on our mortgage insurance policies and may fluctuate based on changes in our monthly premium policies in force, where premiums are generally paid one month in arrears, and the pace of settlement of previously outstanding receivables.
Top 10 primary RIF by state As of December 31, 2024 2023 2022 California 10.1 % 10.2 % 10.6 % Texas 8.6 8.7 8.7 Florida 7.3 7.6 8.2 Georgia 4.1 4.1 4.1 Washington 3.9 4.0 3.9 Illinois 3.8 4.0 3.9 Virginia 3.7 3.9 4.1 Pennsylvania 3.4 3.4 3.4 Ohio 3.3 3.0 2.7 North Carolina 3.2 3.0 3.0 Total 51.4 % 51.9 % 52.6 % 64 Insurance Claims and Claim Expenses Insurance claims and claim expenses incurred represent estimated future payments on newly defaulted insured loans and any change in our claim estimates for previously existing defaults.
Top 10 primary RIF by state As of December 31, 2025 2024 2023 California 10.1 % 10.1 % 10.2 % Texas 8.3 8.6 8.7 Florida 7.2 7.3 7.6 Georgia 4.0 4.1 4.1 Illinois 4.0 3.8 4.0 Virginia 3.7 3.7 3.9 Washington 3.6 3.9 4.0 Pennsylvania 3.5 3.4 3.4 Ohio 3.5 3.3 3.0 New York 3.3 3.2 3.1 Total 51.2 % 51.4 % 52.0 % Insurance Claims and Claim Expenses Insurance claims and claim expenses incurred represent estimated future payments on newly defaulted insured loans and any change in our claim estimates for previously existing defaults.
We do not expect the updated PMIERs to have a material impact on our available assets and risk-based required assets , and we expect to remain in full compliance with the existing and updated PMIERs, as applicable, prior to, on and after March 31, 2025. NMIC is also subject to state regulatory minimum capital requirements based on its RIF.
We do not expect the updated PMIERs to have a material impact on our available assets and risk-based required assets , and we expect to remain in full compliance with the existing and updated PMIERs, as applicable, prior to, on and after September 30, 2026. NMIC is also subject to state regulatory minimum capital requirements based on its RIF.
Our NIW is affected by the overall size of the mortgage origination market and the volume of high-LTV mortgage originations. Our NIW is also affected by the percentage of such high-LTV originations covered by private versus government MI or other alternative credit enhancement structures and our share of the private MI market. NIW, together with persistency, drives our IIF.
Our NIW is also affected by the percentage of such high-LTV originations covered by private versus government MI or other alternative credit enhancement structures and our share of the private MI market. NIW, together with persistency, drives our IIF.
Premiums written at origination for single premium policies are initially deferred as unearned premiums and amortized into earnings over the estimated policy life in accordance with the anticipated expiration of risk, which is primarily derived from the term of the mortgage loans, original LTV and the interest rate for each individual policy.
Premiums written at origination for single premium policies are initially deferred as unearned premiums and amortized into earnings over the estimated policy life in accordance with the anticipated expiration of risk, which is derived on an individual policy basis primarily from the term, original LTV and interest rate of the underlying insured mortgage.
Under the 2024 Revolving Credit Facility, NMIH is required to pay a quarterly commitment fee on the average daily undrawn amount of 0.175% to 0.525%, based on the applicable corporate credit rating at the time. As of December 31, 2024, the applicable commitment fee was 0.225%. We are subject to certain covenants under the 2024 Revolving Credit Facility.
Under the 2024 Revolving Credit Facility, NMIH is required to pay a quarterly commitment fee on the average daily undrawn amount of 0.175% to 0.525%, based on the applicable corporate credit rating at the time. As of December 31, 2025, the applicable commitment fee was 0.225%.
Net Premiums Written and Net Premiums Earned We set our premium rates on individual policies based on the risk characteristics of the underlying mortgage loans and borrowers, and in accordance with our filed rates and applicable rating rules. On June 4, 2018, we introduced a proprietary risk-based pricing platform, which we refer to as Rate GPS ® .
Net Premiums Written and Net Premiums Earned We set our premium rates on individual policies based on the risk characteristics of the underlying mortgage loans and borrowers, and in accordance with our filed rates and applicable rating rules. We primarily price our policies through a proprietary risk-based pricing platform, which we refer to as Rate GPS ® .
NMIH is not subject to any limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in Delaware. Delaware law provides that dividends are only payable out of a corporation's surplus or recent net profits (subject to certain limitations). 75 As of December 31, 2024, NMIH had $132.2 million of cash and investments.
NMIH is not subject to any limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in Delaware. Delaware law provides that dividends are only payable out of a corporation's surplus or recent net profits (subject to certain limitations). As of December 31, 2025, NMIH had $130.6 million of cash, cash equivalents and investments.
We have adopted an investment policy that defines, among other things, eligible and ineligible investments; concentration limits for asset types, industry sectors, single issuers, and certain credit ratings; and benchmarks for asset duration. Our investment portfolio is comprised entirely of fixed maturity instruments.
We aim to achieve diversification by type, quality, maturity, and industry. We have adopted an investment policy that defines, among other things, eligible and ineligible investments; concentration limits for asset types, industry sectors, single issuers, and certain credit ratings; and benchmarks for asset duration. Our investment portfolio is comprised entirely of fixed maturity instruments.
Cash used in investing activities for the years ended December 31, 2024, 2023 and 2022 reflects the purchase of fixed and short-term maturities with cash provided by operating activities, and the reinvestment of coupon payments, maturities and redemption proceeds within our investment portfolio.
Cash used in investing activities for the years ended December 31, 2025 and 2024 reflects the purchase of fixed and short-term maturities with cash provided by operating activities, and the reinvestment of coupon payments, maturities, redemptions and sales proceeds within our investment portfolio.
For further information regarding income taxes and their impact on our results of operations and financial position, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 11, Income Taxes. ” Net Income Net income and adjusted net income increased in each successive year primarily due to growth in our total revenues, partially offset by increases in our insurance claims and claim expenses and income tax expenses.
For further information regarding income taxes and their impact on our results of operations and financial position, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 11, Income Taxes. ” Net Income Net income and adjusted net income increased during the year ended December 31, 2025 primarily due to the growth in our total revenues, partially offset by increases in our insurance claims and claim expenses and income tax expense.
Amounts are presented net of reinsurance and included $54.1 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2024, $50.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2023, and $42.5 million attributed to net case reserves and $4.7 million attributed to net IBNR reserves for the year ended December 31, 2022.
Amounts are presented net of reinsurance and included $48.4 million attributed to net case reserves and $8.1 million attributed to net IBNR reserves for the year ended December 31, 2025, $54.1 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2024, and $50.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2023.
Insurance claims and claim expenses increased during each successive year, primarily driven by an increase in the number of newly defaulted loans that emerged in each successive period and the establishment of initial reserves against such loans, as well as an increase in the average case reserve held against previously defaulted loans that aged in their delinquency status through the periods, and was partially offset by the release of a portion of the reserves we established for anticipated claims payments in prior periods in connection with cure activity and ongoing analysis of recent loss development trends.
Insurance claims and claim expenses increased during the year ended December 31, 2025 primarily due to an increase in the number of newly defaulted loans that emerged during the year and the establishment of initial reserves against such loans, as well as an increase in the average case reserve held against previously defaulted loans that aged in their delinquency status, partially offset by the release of a portion of the reserves we established for anticipated claims payments in prior periods in connection with cure activity and the ongoing analysis of recent loss development trends.
Adjusted income before tax is defined as GAAP income before tax, excluding the pre-tax effects of net realized gains or losses from our investment portfolio, the gain or loss related to the change in fair value of our warrant liability, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.
Adjusted income before tax is defined as GAAP income before tax, excluding the pre-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.
Adjusted net income is defined as GAAP net income, excluding the after-tax effects of net realized gains or losses from our investment portfolio, the gain or loss related to the change in fair value of our warrant liability, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.
Adjusted net income is defined as GAAP net income, excluding the after-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.
The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions for the periods indicated: For the years ended December 31, 2024 2023 2022 ($ Values In Thousands) Number of claims paid (1) 276 199 81 Total amount paid for claims $ 10,491 $ 5,192 $ 1,741 Average amount paid per claim $ 38 $ 26 $ 21 Severity (2) 61 % 55 % 49 % (1) Count includes 88, 70 and 30 claims settled without payment during the years ended December 31, 2024, 2023 and 2022, respectively.
The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions for the periods indicated: For the years ended December 31, 2025 2024 2023 ($ Values In Thousands) Number of claims paid (1) 445 276 199 Total amount paid for claims $ 25,873 $ 10,491 $ 5,192 Average amount paid per claim $ 58 $ 38 $ 26 Severity (2) 76 % 61 % 55 % (1) Count includes 71, 88 and 70 claims settled without payment during the years ended December 31, 2025, 2024 and 2023, respectively.
The authorization provides us the flexibility, based on market and business conditions, stock price and other factors, to repurchase stock from time to time through open market repurchases, privately negotiated transactions, or other means, including pursuant to Rule 10b5-1 trading plans.
The authorizations provide NMIH with the flexibility, based on market and business conditions, stock price and other factors, to repurchase stock, from time to time, through open market repurchases, privately negotiated transactions, or other means, including pursuant to Rule 10b5-1 trading plans.
As of December 31, 2023, the investment portfolio had gross unrealized losses of $184.3 million, of which $183.1 million were associated with securities that had been in an unrealized loss position for a period of twelve months or longer.
As of December 31, 2025, the investment portfolio had gross unrealized losses of $86.3 million, of which $84.3 million were associated with securities that had been in an unrealized loss position for a period of twelve months or longer.
Gross reserves of $35.0 million related to prior year defaults remained as of December 31, 2024. 66 The following table provides a reconciliation of the beginning and ending count of loans in default: For the years ended December 31, 2024 2023 2022 Beginning default inventory 5,099 4,449 6,227 Plus: new defaults 8,757 6,758 5,225 Less: cures (6,899) (5,892) (6,916) Less: claims paid (276) (199) (81) Less: rescission and claims denied (39) (17) (6) Ending default inventory 6,642 5,099 4,449 The sequential increase in ending default inventory at each successive year end was primarily due to the growth and seasoning of our insured portfolio, partially offset by cure activity within our default population during the intervening periods.
Gross reserves of $55.7 million related to prior year defaults remained as of December 31, 2025. 65 The following table provides a reconciliation of the beginning and ending count of loans in default: For the years ended December 31, 2025 2024 2023 Beginning default inventory 6,642 5,099 4,449 Plus: new defaults 9,940 8,757 6,758 Less: cures (8,427) (6,899) (5,892) Less: claims paid (445) (276) (199) Less: rescission and claims denied (49) (39) (17) Ending default inventory 7,661 6,642 5,099 The sequential increase in ending default inventory at each successive year end was primarily due to the growth and seasoning of our insured portfolio, partially offset by cure activity within our default population during the intervening periods.
For further information, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 11, Income Taxes. ” Other assets increased primarily driven by an increase in accrued investment income and the capitalization of deferred debt issuance costs incurred in connection with the establishment of the 2024 Revolving Credit Facility, partially offset by a reduction in our right-of-use (ROU) assets tied to the amortization of the operating lease for our corporate headquarters.
For further information, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 11, Income Taxes. ” Other assets increased at December 31, 2025 primarily due to an increase in accrued investment income and income taxes receivable, partially offset by a reduction in our ROU assets tied to the amortization of the operating lease for our corporate headquarters and the amortization of deferred debt issuance costs incurred in connection with the establishment of the 2024 Revolving Credit Facility during the year ended December 31, 2025.
The following tables present a breakdown of our investment portfolio and cash and cash equivalents by investment type and credit rating: Percentage of portfolio's fair value December 31, 2024 December 31, 2023 Corporate debt securities 67 % 61 % Municipal debt securities 23 25 Cash, cash equivalents, and short-term investments 5 5 U.S. treasury securities and obligations of U.S. government agencies 4 7 Asset-backed securities 1 2 Total 100 % 100 % Investment portfolio ratings at fair value (1) December 31, 2024 December 31, 2023 AAA (2) 8 % 9 % AA (3) 35 34 A (3) 46 44 BBB (3) 11 13 BB (4) — — Total 100 % 100 % (1) Excluding certain operating cash accounts.
The following tables present a breakdown of our investment portfolio and cash and cash equivalents by investment type and credit rating: Percentage of portfolio's fair value December 31, 2025 December 31, 2024 Corporate debt securities 64 % 67 % Municipal debt securities 19 23 U.S. treasury securities and obligations of U.S. government agencies 10 4 Cash, cash equivalents, and short-term investments 4 5 Asset-backed securities 2 1 U.S agency mortgage-backed securities 1 — Total 100 % 100 % Investment portfolio ratings at fair value (1) December 31, 2025 December 31, 2024 AAA (2) 7 % 8 % AA (3) 37 35 A (3) 48 46 BBB (3) 8 11 BB (4) — — Total 100 % 100 % (1) Excluding certain operating cash accounts.
Primary IIF As of and for the years ended December 31, 2024 2023 2022 (In Millions) IIF, beginning of period $ 197,029 $ 183,968 $ 152,343 NIW 46,044 40,473 58,734 Cancellations, principal repayments and other reductions (32,890) (27,412) (27,109) IIF, end of period $ 210,183 $ 197,029 $ 183,968 We consider a “book” to be a collective pool of policies insured during a particular period, normally a calendar year.
Primary IIF As of and for the years ended December 31, 2025 2024 2023 (In Millions) IIF, beginning of period $ 210,183 $ 197,029 $ 183,968 NIW 48,900 46,044 40,473 Cancellations, principal repayments and other reductions (37,635) (32,890) (27,412) IIF, end of period $ 221,448 $ 210,183 $ 197,029 We consider a “book” to be a collective pool of policies insured during a particular period, normally a calendar year.
This pattern generally occurs because relatively few of the claims that a book will ultimately experience typically occur in the first few years following origination, when premium revenue is highest, while subsequent years are affected by declining premium revenues, as the number of insured loans decreases (primarily due to loan prepayments), and by increasing losses. 61 The table below presents a summary of our primary IIF and RIF by book year as of the dates indicated.
This pattern generally occurs because relatively few of the claims that a book will ultimately experience typically occur in the first few years following origination, when premium revenue is highest, while subsequent years are affected by declining premium revenues, as the number of insured loans decreases (primarily due to loan prepayments), and by increasing losses.
The recognition of net realized investment gains or losses can vary significantly across periods as the timing is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results. • Change in fair value of warrant liability .
The recognition of net realized investment gains or losses can vary significantly across periods as the timing is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results. 71 • Capital markets transaction costs .
At December 31, 2024, we had a federal net operating loss carryforward of $1.0 million, which expire in varying amounts in 2030 and 2031, and state net operating loss carryforwards of $135.2 million, which begin to expire in varying amounts in 2032.
At December 31, 2025, we had a federal net operating loss carryforward of $0.7 million, which expires in varying amounts in 2030 and 2031, and state net operating loss carryforwards of $133.1 million, which begin to expire in varying amounts in 2032.
For further information, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 5, Debt. ” Income tax expense increased sequentially during each successive year and was primarily driven by the growth in our pre-tax income. As a U.S. taxpayer, we are subject to a U.S. federal corporate income tax rate of 21%.
For further information, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 5, Debt. ” Income tax expense increased during the year ended December 31, 2025 primarily due to the growth in our pre-tax income. As a U.S. taxpayer, we are subject to a U.S. federal corporate income tax rate of 21%.
Rate GPS ® considers a broad range of individual variables, including property type, type of loan product, borrower credit characteristics, and lender and market factors, and provides us with the ability to set and charge premium rates commensurate with the underlying risk of each loan that we insure.
Rate GPS ® considers a broad range of individual and layered risk variables, including borrower credit, loan-level, product and lender attributes, as well as market and geographic factors, and provides us with the ability to set and charge premium rates commensurate with the underlying risk of each loan that we insure.
As of December 31, 2024, we held $322.2 million of tax and loss bonds in “ Prepaid Federal Income Taxes” on our consolidated balance sheets.
As of December 31, 2025, we held $400.3 million of tax and loss bonds in “ Prepaid Federal Income Taxes” on our consolidated balance sheets.
Amounts are presented net of reinsurance and included $83.5 million attributed to net case reserves and $8.1 million attributed to net IBNR reserves for the year ended December 31, 2024, $70.6 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2023, and $39.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2022.
Amounts are presented net of reinsurance and included $102.0 million attributed to net case reserves and $10.8 million attributed to net IBNR reserves for the year ended December 31, 2025, $83.5 million attributed to net case reserves and $8.1 million attributed to net IBNR reserves for the year ended December 31, 2024, and $70.6 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2023.
Our claims severity for each year was below long-term industry norms and benefited from the same broad national house price appreciation that supported our claims paid experience.
Our claims severity was still below long-term industry norms and benefited from the same house price appreciation that supported our claims paid experience.
At December 31, 2024, assuming all other estimates remain constant, a one percentage point increase/decrease in our average claim severity factor would cause approximately a +/- $1.4 million change in our reserve position, and a one percentage point increase/decrease in our average claim frequency factor cause approximately a +/- $4.8 million change in our reserve position.
At December 31, 2025, assuming all other estimates remain constant, a one percentage point increase/decrease in our average claim frequency factor would have caused approximately a +/- $6.3 million change in our reserve position and a one percentage point increase/decrease in our average claim severity factor would have caused approximately a +/- $1.8 million change in our reserve position. 78
The outlook for all ratings provided by Moody’s and S&P is stable. Consolidated Investment Portfolio The primary objectives of our investment activity are to generate investment income and preserve capital, while maintaining sufficient liquidity to cover our operating needs. We aim to achieve diversification by type, quality, maturity, and industry.
The outlook for all ratings provided by Moody’s is positive and the outlook for all ratings provided by Fitch and S&P is stable. Consolidated Investment Portfolio The primary objectives of our investment activity are to generate investment income and preserve capital, while maintaining sufficient liquidity to cover our operating needs.
Non-performing loans are treated the same as performing loans under the RTC framework. As such, the PMIERs generally imposes a stricter financial requirement than the state RTC standard. As of December 31, 2024, NMIC had a RTC ratio of 12.7:1 with $36.6 billion of performing primary RIF, net of reinsurance, and $2.9 billion of total statutory capital, including contingency reserves.
Non-performing loans are treated the same as performing loans under the RTC framework. As such, the PMIERs generally imposes a stricter financial requirement than the state RTC standard. As of December 31, 2025, NMIC had a RTC ratio of 13.0:1 with $42.4 billion of primary RIF, net of reinsurance, and $3.3 billion of total statutory capital, including contingency reserves.
As of December 31, 2024, the fair value of our investment portfolio was $2.7 billion and we held an additional $54.3 million of cash and cash equivalents. Pre-tax book yield on the investment portfolio for the year ended December 31, 2024 was 3.0%.
As of December 31, 2025, the fair value of our investment portfolio was $3.1 billion and we held an additional $43.9 million of cash and cash equivalents. Pre-tax book yield on the investment portfolio for the year ended December 31, 2025 was 3.3%.
Our effective income tax rate on pre-tax income was 22.3%, 22.0% and 22.4% for the years ended December 31, 2024, 2023 and 2022, respectively.
Our effective income tax rate on pre-tax income was 22.2% and 22.3% for the years ended December 31, 2025 and 2024, respectively.
Primary portfolio trends As of and for the years ended December 31, 2024 2023 2022 ($ Values In Millions, except as noted below) New insurance written $ 46,044 $ 40,473 $ 58,734 Percentage of monthly premium 98 % 98 % 95 % Percentage of single premium 2 % 2 % 5 % New risk written $ 12,200 $ 10,661 $ 15,520 Insurance-in-force (1) $ 210,183 $ 197,029 $ 183,968 Percentage of monthly premium 91 % 90 % 89 % Percentage of single premium 9 % 10 % 11 % Risk-in-force (1) $ 56,113 $ 51,796 $ 47,648 Policies in force (count) (1) 659,567 629,690 594,142 Average loan size ( $ value in thousands ) (1) $ 319 $ 313 $ 310 Coverage percentage (2) 27 % 26 % 26 % Loans in default (count) (1) 6,642 5,099 4,449 Default rate (1) 1.01 % 0.81 % 0.75 % Risk-in-force on defaulted loans (1) $ 545 $ 408 $ 323 Average net premium yield (3) 0.28 % 0.27 % 0.28 % Earnings from cancellations $ 3 $ 4 $ 8 Annual persistency (4) 85 % 86 % 84 % Quarterly run-off (5) 4.5 % 3.4 % 3.3 % (1) Reported as of the end of the period.
Primary portfolio trends As of and for the years ended December 31, 2025 2024 2023 ($ Values In Millions, except as noted below) New insurance written $ 48,900 $ 46,044 $ 40,473 Percentage of monthly premium 98 % 98 % 98 % Percentage of single premium 2 % 2 % 2 % New risk written $ 12,718 $ 12,200 $ 10,661 Insurance-in-force (1) $ 221,448 $ 210,183 $ 197,029 Percentage of monthly premium 93 % 91 % 90 % Percentage of single premium 7 % 9 % 10 % Risk-in-force (1) $ 59,313 $ 56,113 $ 51,796 Policies in force (count) (1) 684,058 659,567 629,690 Average loan size ( $ value in thousands ) (1) $ 324 $ 319 $ 313 Coverage percentage (2) 27 % 27 % 26 % Loans in default (count) (1) 7,661 6,642 5,099 Default rate (1) 1.12 % 1.01 % 0.81 % Risk-in-force on defaulted loans (1) $ 656 $ 545 $ 408 Average net premium yield (3) 0.28 % 0.28 % 0.27 % Earnings from cancellations $ 3 $ 3 $ 4 Annual persistency (4) 83.4 % 84.6 % 86.1 % Quarterly run-off (5) 5.1 % 4.5 % 3.4 % (1) Reported as of the end of the period.
Service expenses represent third-party costs incurred by NMIS in connection with the services it provides. Changes in service expenses primarily reflect changes in NMIS' outsourced loan review volume. Amounts incurred as service expenses generally correspond with amounts recognized in other revenues in the same periods. Interest expense primarily reflects the carrying costs of the notes.
Changes in service expenses primarily reflect changes in NMIS' outsourced loan review volume. Amounts incurred as service expenses generally correspond with amounts recognized in other revenues in the same periods. Interest expense primarily reflects the carrying costs of the 2024 Notes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe carrying value of our investment portfolio as of December 31, 2024 and 2023 was $2.7 billion and $2.4 billion, respectively, of which 100% was invested in fixed maturity securities. The primary market risk to our investment portfolio is interest rate risk associated with investments in fixed maturity securities.
Biggest changeThe carrying value of our investment portfolio as of December 31, 2025 and 2024 was $3.1 billion and $2.7 billion, respectively, of which 100% was invested in fixed maturity securities. The primary market risk to our investment portfolio is interest rate risk associated with investments in fixed maturity securities.
Excluding cash, our fixed income portfolio duration was 3.57 years, which means that an instantaneous parallel shift (movement up or down) in the yield curve of 100 basis points would result in a change of 3.57% in fair value of our fixed income portfolio.
Excluding cash, our fixed income portfolio duration was 3.68 years, which means that an instantaneous parallel shift (movement up or down) in the yield curve of 100 basis points would result in a change of 3.68% in fair value of our fixed income portfolio.
Although we expect the two rates to move in tandem, to the extent they do not, it could increase or decrease the risk premium payments that otherwise would be due. 82
Although we expect the two rates to move in tandem, to the extent they do not, it could increase or decrease the risk premium payments that otherwise would be due. 79
As of December 31, 2024, the duration of our fixed income portfolio, including cash and cash equivalents, was 3.57 years, which means that an instantaneous parallel shift (movement up or down) in the yield curve of 100 basis points would result in a change of 3.57% in fair value of our fixed income portfolio.
As of December 31, 2025, the duration of our fixed income portfolio, including cash and cash equivalents, was 3.66 years, which means that an instantaneous parallel shift (movement up or down) in the yield curve of 100 basis points would result in a change of 3.66% in fair value of our fixed income portfolio.

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