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What changed in GENWORTH FINANCIAL INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of GENWORTH FINANCIAL INC's 2022 and 2023 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 2023 report.

+953 added−1376 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-28)

Top changes in GENWORTH FINANCIAL INC's 2023 10-K

953 paragraphs added · 1376 removed · 659 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

189 edited+71 added−194 removed91 unchanged
Biggest changeBest upgraded the credit rating of Genworth Financial and Genworth Holdings to “b+” from “b” with an outlook of stable. On July 21, 2022, Moody’s upgraded the credit rating of Genworth Holdings to “Ba2” from “B1” and provided a Stable outlook, and upgraded the financial strength rating of EMICO to “Baa1” from “Baa2.” S&P, Moody’s, Fitch, A.M.
Biggest changeBest assigned an initial public financial strength rating of “A-” to EMICO, with an outlook of stable. • On April 25, 2023, Fitch upgraded the financial strength rating of EMICO to “A-” from “BBB+” with an outlook of stable. • On March 1, 2023, Moody’s upgraded the credit rating of Genworth Holdings to “Ba1” from “Ba2” and upgraded the financial strength rating of EMICO to “A3” from “Baa1.” The outlooks for the ratings are stable. • On February 16, 2023, S&P upgraded the credit rating of Genworth Financial and Genworth Holdings to “BB-” from “B+” with an outlook of stable and upgraded the financial strength rating of EMICO to “BBB+” from “BBB.” S&P, Moody’s, Fitch, and A.M.
Our investment strategy focuses on: • managing interest rate risk, as appropriate, through monitoring asset durations relative to policyholder and contractholder obligations; 16 Table of Contents • selecting assets based on fundamental, research-driven strategies; • emphasizing fixed-income, low-volatility assets while pursuing active strategies to enhance yield; • maintaining sufficient liquidity to meet financial obligations; • regularly evaluating our asset class mix and pursuing additional investment classes when prudent; and • continuously monitoring asset quality and market conditions that could affect our assets.
Our investment strategy focuses on: • managing interest rate risk, as appropriate, through monitoring asset durations relative to policyholder and contractholder obligations; • selecting assets based on fundamental, research-driven strategies; • emphasizing fixed-income, low-volatility assets while pursuing active strategies to enhance yield; • maintaining sufficient liquidity to meet financial obligations; 16 Table of Contents • regularly evaluating our asset class mix and pursuing additional investment classes when prudent; and • continuously monitoring asset quality and market conditions that could affect our assets.
Insurance and securities regulatory authorities (including state law enforcement agencies and attorneys general or their non-U.S. equivalents) periodically make inquiries regarding compliance with insurance, securities and other laws and regulations, and we cooperate with such inquiries and take corrective action when warranted.
Insurance and securities regulatory authorities (including state law enforcement agencies and attorneys general or their non-U.S. equivalents) periodically make inquiries regarding compliance with insurance, securities and other laws and regulations, and we cooperate with such inquiries and take corrective action when warranted. U.S.
All 50 states and the District of Columbia have adopted the RBC Model Act or a substantially similar law or regulation. The RBC Model Act requires that life insurers annually submit a report to state regulators regarding their RBC based upon four categories of risk: asset risk, insurance risk, interest rate and business risk.
All 50 states and the District of Columbia have adopted the RBC Model Act or a substantially similar law or regulation. The RBC Model Act requires that life insurers annually submit a report to state regulators regarding their RBC based upon four categories of risk: asset risk, insurance risk, interest rate risk and business risk.
In September 2020, subsequent to the issuance of Enact Holdings’ senior notes due in 2025, the GSEs imposed certain restrictions (the “GSE Restrictions”) with respect to capital on Enact.
In September 2020, subsequent to the issuance of Enact Holdings’ senior notes due in 2025, the GSEs imposed certain restrictions (the “GSE Restrictions”) on Enact with respect to capital.
We cannot predict the effect of all the regulations or legislation adopted under the Dodd-Frank Act or the Reform Act on financial markets generally, or on our businesses specifically, the additional costs associated with compliance with such regulations or legislation, or any changes to our operations that may be necessary to comply with the Dodd-Frank Act and the regulations thereunder, any of which could have a material adverse effect on our business, results of operations, cash flows or financial condition.
We cannot predict the effect of all the regulations or legislation adopted under the Dodd-Frank Act on financial markets generally, or on our businesses specifically, the additional costs associated with compliance with such regulations or legislation, or any changes to our operations that may be necessary to comply with the Dodd-Frank Act and the regulations thereunder, any of which could have a material adverse effect on our business, results of operations, cash flows or financial condition.
Regulation of investments Each of our U.S. insurers is subject to Insurance Laws that require diversification of its investment portfolio and which limit the proportion of investments in different asset categories. Assets invested contrary to such regulatory limitations must be treated as non-admitted assets for purposes of measuring surplus, and in some instances, regulations require divestiture of such non-complying investments.
Regulation of investments Each of our U.S. insurers is subject to Insurance Laws that require diversification of its investment portfolio and limit the proportion of investments in different asset categories. Assets invested contrary to such regulatory limitations must be treated as non-admitted assets for purposes of measuring surplus, and in some instances, regulations require divestiture of such non-complying investments.
The GSEs are the largest participants in the secondary mortgage market, buying residential mortgages from banks and other primary lenders as part of their governmental mandate to provide liquidity and stability in the U.S. housing finance system. The GSE charters generally require credit enhancement for low down payment mortgages to be eligible for purchase by the GSEs.
The GSEs are the largest participants in the secondary mortgage market, buying residential mortgages from banks and other primary lenders as part of their governmental mandate to provide access, liquidity and stability in the U.S. housing finance system. The GSE charters generally require credit enhancement for low down payment mortgages to be eligible for purchase by the GSEs.
For additional information related to reinsurance, see note 8 in our consolidated financial statements under “Part II—Item 8—Financial Statements and Supplementary Data.” Ratings Financial Strength Ratings Ratings with respect to the financial strength of operating subsidiaries are an important factor in establishing the competitive position of insurance companies.
For additional information related to reinsurance, see note 9 in our consolidated financial statements under “Part II—Item 8—Financial Statements and Supplementary Data.” Ratings Financial Strength Ratings Ratings with respect to the financial strength of operating subsidiaries are an important factor in establishing the competitive position of insurance companies.
However, based upon information currently available to us, we believe that any costs associated with compliance with environmental laws and regulations, or any remediation of such properties will not have a material adverse effect on our business, financial condition or results of operations.
Based upon information currently available to us, we believe that any costs associated with compliance with environmental laws and regulations, or any remediation of such properties will not have a material adverse effect on our business, financial condition or results of operations.
Enact Through Enact Holdings and its mortgage insurance subsidiaries, we have been providing private mortgage insurance products and services in the United States since 1981 and operate in all 50 states and the District of Columbia. Enact is engaged in the business of writing and assuming residential mortgage guaranty insurance.
Enact Segment Through Enact Holdings and its mortgage insurance subsidiaries, we have been providing private mortgage insurance products and services in the United States since 1981 and operate in all 50 states and the District of Columbia. Enact is engaged in the business of writing and assuming residential mortgage guaranty insurance.
In addition, the PMIERs amendments made permanent revisions to the risk-based required asset amount factor for non-performing loans for properties located in future Federal Emergency Management Agency (“FEMA”) Declared Major Disaster Areas eligible for individual assistance.
In addition, the PMIERs amendments made permanent revisions to the risk-based required asset amount factor for non-performing loans for properties located in future Federal Emergency Management Agency Declared Major Disaster Areas eligible for individual assistance.
The Real Estate Settlement Procedures Act of 1974 (“RESPA”) applies to most residential mortgages insured by private mortgage insurers. Mortgage insurance is considered to be a “settlement service” for purposes of loans subject to RESPA.
The Real Estate Settlement Procedures Act of 1974 (“RESPA”) applies to most residential mortgages insured by private mortgage insurers. Mortgage insurance is considered a “settlement service” for purposes of loans subject to RESPA.
We have an enterprise risk management framework that includes risk management processes relating to strategic priorities and risks (including emerging risks), product development and pricing, management of in-force business, including certain mitigating strategies and claims risk management, credit risk management, asset-liability management, liquidity management, investment activities (including derivatives), model risk management, portfolio diversification, underwriting and loss mitigation, financial databases and information systems, information technology risk management, data security and cybersecurity, business acquisitions and dispositions, operational risk assessment capabilities and overall operational risk management.
We have an enterprise risk management framework that includes risk management processes relating to strategic priorities and risks (including emerging risks), product development and pricing, management of in-force business, including certain mitigating strategies and claims risk management, credit risk management, asset-liability management, liquidity management, investment activities (including derivatives), model risk management, portfolio diversification, underwriting and loss mitigation, information systems, information technology risk management, data security and cybersecurity, business acquisitions and dispositions, operational risk assessment capabilities and overall operational risk management.
Finally, although their presence is a fraction of what it was in the past, there are products designed to eliminate the need for private mortgage insurance, such as “simultaneous seconds,” which combine a first lien loan with a second lien loan in order to meet the 80% loan-to-value threshold required for sale to the GSEs without certain credit protections. U.S.
Finally, although their presence is a fraction of what it was in the past, there are products designed to eliminate the need for private mortgage insurance, such as “simultaneous seconds,” which combine a first lien loan with a second lien loan in order to meet the 80% loan-to-value threshold required for sale to the GSEs without certain credit protections.
Many of the provisions are no longer applicable, but for loans that became non-performing due to a COVID-19 hardship, PMIERs was temporarily amended with respect to each non-performing loan that (i) had an initial missed monthly payment occurring on or after March 1, 2020 and prior to April 1, 2021 or (ii) is subject to a forbearance plan granted in response to a financial hardship related to COVID-19, the terms of which are materially consistent with terms of forbearance plans offered by the GSEs.
Many of the provisions are no longer applicable, but for loans that became non-performing due to a COVID-19 hardship, PMIERs was temporarily amended with respect to each non-performing loan that (i) had an initial missed monthly payment occurring on or after March 1, 2020 and prior to April 1, 2021 or (ii) is subject to a forbearance plan granted in response to a financial hardship related to COVID-19, the terms of which are materially consistent with terms of 23 Table of Contents forbearance plans offered by the GSEs.
We also obtain reinsurance to meet certain capital requirements, including sometimes utilizing intercompany reinsurance agreements to manage our statutory capital positions. However, these intercompany agreements do not have an effect on our consolidated U.S. generally accepted accounting principles (“U.S. GAAP”) financial statements as they eliminate in consolidation.
We also obtain reinsurance to reduce certain capital requirements, including sometimes utilizing intercompany reinsurance agreements to manage our statutory capital positions. However, these intercompany agreements do not have an effect on our consolidated U.S. generally accepted accounting principles (“U.S. GAAP”) financial statements as they eliminate in consolidation.
Insurers are expected to manage these risks by outlining actions that are proportionate to the nature, scale and complexity of their businesses.
Such insurers are expected to manage these risks by outlining actions that are proportionate to the nature, scale and complexity of their businesses.
In addition, insurance regulators may prohibit the payment of ordinary dividends or other payments by our insurers to group affiliates (such as payments under a tax sharing agreement or for employment or other services) if they determine that such payment could be adverse to our policyholders or contractholders.
In addition, insurance regulators may prohibit the payment of ordinary dividends and distributions or other payments by our insurers to group affiliates (such as a payment under a tax sharing agreement or for employment or other services) if they determine that such payment could be adverse to policyholders or contractholders.
Our U.S. life insurance subsidiaries’ reported RBC ratio measures the ratio of TAC to our Company Action Level. As of December 31, 2022, the RBC of each of our U.S. life insurance subsidiaries exceeded the level of RBC that would require any of them to take or become subject to any corrective action in their respective domiciliary state.
Our U.S. life insurance subsidiaries’ reported RBC ratio measures the ratio of TAC to our Company Action Level. As of December 31, 2023, the RBC of each of our U.S. life insurance subsidiaries exceeded the level of RBC that would require any of them to take or become subject to any corrective action in their respective domiciliary state.
This task force is charged with developing a consistent national approach for reviewing rate increase requests that results in actuarially appropriate increases being granted by the states in a timely manner and eliminates cross-state rate subsidization, among others.
This task force was charged with developing a consistent national approach for reviewing rate increase requests that results in actuarially appropriate increases being granted by the states in a timely manner and eliminates cross-state rate subsidization, among others.
Regulation and Agency Qualification Requirements.” Selected financial information and operating performance measures regarding our Enact segment are included under “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Enact segment.” 4 Table of Contents Products and services Enact offers the following mortgage insurance products: Primary mortgage insurance Substantially all of Enact’s policies are primary mortgage insurance, which provides protection on individual loans at specified coverage percentages.
Regulation and Agency Qualification Requirements.” Selected financial information and operating performance measures regarding our Enact segment are included under “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Enact segment.” Products and services Enact offers the following mortgage insurance products: Primary mortgage insurance Substantially all of Enact’s policies are primary mortgage insurance, which provides protection on individual loans at specified coverage percentages.
The CCPA, as amended by the CPRA, grants California residents the right to know what information a business has collected from them and the sourcing and sharing of that information, as well as the right to access and correct their personal information, and (subject to certain exemptions) the right to have a business delete their personal information.
The CCPA, as amended by the CPRA, grants California residents the right to know what information a business has collected about them and the sourcing and sharing of that information, as well as the right to access and correct their personal information, and (subject to certain exemptions) the right to have a business delete their personal information.
The New York State Department of Financial Services (“NYDFS”) issued a circular letter in 2020 to New York domestic and foreign authorized insurers, which applies to certain of our subsidiaries, stating that the NYDFS expects insurers to integrate financial risks related to climate change into their governance frameworks, risk management processes and business strategies, and that insurers should develop their approach to climate related financial disclosure.
The New York State Department of Financial Services (“NYDFS”) issued a circular letter in 2020 to New York domestic and foreign authorized insurers, which applies to certain of our subsidiaries, stating that the 26 Table of Contents NYDFS expects insurers to integrate financial risks related to climate change into their governance frameworks, risk management processes and business strategies, and that insurers should develop their approach to climate related financial disclosure.
For Enact Holdings, in order to facilitate these processes, direct connections have been established with many of its customers and servicers’ systems to enable the selection of its mortgage insurance products and to allow for direct communication.
For Enact Holdings, in order to facilitate these processes, direct connections have been established with many of its customers’ and servicers’ systems to enable the selection of its mortgage insurance products and to allow for direct communication.
The NYDFS also adopted an amendment to the regulation that governs enterprise risk management, effective as of August 13, 2021, that requires an insurance group to include certain additional risks, such as climate change risk, in its enterprise risk management function. In addition, the FIO is authorized to monitor the U.S. insurance industry under the Dodd-Frank Act.
The NYDFS also amended the regulation that governs enterprise risk management, effective as of August 13, 2021, that requires an insurance group to include certain additional risks, such as climate change risk, in its enterprise risk management function. In addition, the FIO is authorized to monitor the U.S. insurance industry under the Dodd-Frank Act.
For instance, the guidance states that an insurer should: (i) incorporate climate risk into its financial risk management, including its ORSA; (ii) manage climate risk through its enterprise risk management functions and ensure that its organizational structure clearly defines roles and responsibilities related to managing such risk; (iii) use scenario analysis when developing business strategies and identifying risks; and (iv) incorporate the management of climate risk into its corporate governance structure at 33 Table of Contents the group or insurer entity level.
For instance, the 2021 Guidance states that an insurer should: (i) incorporate climate risk into its financial risk management, including its ORSA; (ii) manage climate risk through its enterprise risk management functions and ensure that its organizational structure clearly defines roles and responsibilities related to managing such risk; (iii) use scenario analysis when developing business strategies and identifying risks; and (iv) incorporate the management of climate risk into its corporate governance structure at the group or insurer entity level.
Claim activity is not evenly spread across the coverage period of loans Enact insures. The number of delinquencies may not correlate directly with the number of claims received because the rate at which delinquencies are cured is influenced by borrowers’ financial resources and circumstances, as well as regional economic differences.
Claim activity is not evenly spread across the coverage period of loans Enact insures. The number of delinquencies may not correlate directly with the number of claims received because the rate at which 8 Table of Contents delinquencies are cured is influenced by borrowers’ financial resources and circumstances, as well as regional economic differences.
Mortgage insurers and their customers are subject to the possible sanctions of this law, which may be enforced by the CFPB, state insurance departments, state attorneys general and other enforcement authorities. The Equal Credit Opportunity Act (“ECOA”), the Fair Housing Act and the Fair Credit Reporting Act (“FCRA”) also affect the business of mortgage insurance in various ways.
Mortgage insurers and their customers are subject to the possible sanctions of this law, which may be enforced by the CFPB, state insurance departments, state attorneys general and other enforcement authorities. The Fair Housing Act and the Fair Credit Reporting Act (“FCRA”) also affect the business of mortgage insurance in various ways.
Telephone: 866-229-8413; 201-680-6578 (outside the United States and Canada may call collect); and 800-231-5469 (for hearing impaired). 38 Table of Contents
Telephone: 866-229-8413; 201-680-6578 (outside the United States and Canada may call collect); and 800-231-5469 (for hearing impaired). 31 Table of Contents
Since insurance regulators are primarily concerned with ensuring an insurer’s ability to pay its current and future obligations to policyholders, statutory accounting conservatively values the assets and liabilities of insurers, generally in accordance with standards specified by the insurer’s domiciliary jurisdiction.
Since insurance regulators are primarily concerned with 20 Table of Contents ensuring an insurer’s ability to pay its current and future obligations to policyholders, statutory accounting conservatively values the assets and liabilities of insurers, generally in accordance with standards specified by the insurer’s domiciliary jurisdiction.
If such an opinion cannot be provided, the insurer must establish additional reserves by transferring funds from surplus. Our U.S. life insurers submit these opinions annually to their insurance regulatory authorities. Our U.S. life insurance subsidiaries annually conduct a statutory cash flow testing process to support their opinions. Different reserve requirements exist for our U.S. mortgage insurance subsidiaries.
If such an opinion cannot be provided, the insurer must establish additional reserves by transferring funds from surplus. Our U.S. life insurers submit these opinions annually to their insurance regulatory authorities, and each year they conduct a statutory cash flow testing process to support these opinions. Different reserve requirements exist for our U.S. mortgage insurance subsidiaries.
We manage our assets to meet diversification, credit quality, yield and liquidity requirements of our policy and contract liabilities by investing primarily in fixed maturity securities, including government, municipal and corporate bonds and mortgage-backed and other asset-backed securities. We also hold commercial real estate mortgage loans, limited partnerships and other invested assets, which include derivatives, bank loans and short-term investments.
We manage our assets to meet diversification, credit quality, yield and liquidity requirements of our policy and contract liabilities by investing primarily in fixed maturity securities, including government, municipal and corporate bonds and mortgage-backed and other asset-backed securities. We also hold commercial mortgage loans, limited partnerships and other invested assets, which includes derivatives, bank loans and short-term investments.
Acquisition of control of a U.S. insurer requires the prior approval of the insurer’s domiciliary state insurance regulator. The domiciliary states of our U.S. insurers also require prior notice of a divestiture of control.
Acquisition or change of control of a U.S. insurer requires the prior approval of the insurer’s domiciliary state insurance regulator. The domiciliary states of our U.S. insurers also require prior notice of a divestiture of control.
Our U.S. life insurance business continues to pursue significant premium rate increases and associated benefit reductions on its long-term care insurance in-force block. In support of this initiative, we have developed processes that include experience studies to analyze emerging experience, reviews of in-force product performance, an assumption review process, and comprehensive monitoring and reporting.
Our long-term care insurance business continues to pursue significant premium rate increases and associated benefit reductions on its insurance in-force. In support of this initiative, we have developed processes that include experience studies to analyze emerging experience, reviews of in-force product performance, an assumption review process, and comprehensive monitoring and reporting.
Insurance Regulation We operate in countries outside the United States, principally including Mexico and India. Generally, our subsidiaries conducting business in these countries must obtain licenses from local regulatory authorities and satisfy local regulatory requirements, including those relating to rates, forms, capital, reserves and financial reporting.
Insurance Regulation We operate in and have certain subsidiaries domiciled in countries outside the United States, principally including Mexico, Bermuda and India. Generally, our subsidiaries conducting business in these countries must obtain licenses from local regulatory authorities and satisfy local regulatory requirements, including those relating to rates, forms, capital, reserves and financial reporting.
Privacy of Consumer Information In the United States, federal and state laws and regulations require financial institutions, including insurance companies, to protect the security and privacy of consumer financial information and to notify consumers about policies and practices relating to the collection, use and disclosure of consumer information, as well as policies relating to protecting the confidentiality, integrity and availability of that information.
Privacy and cybersecurity In the United States, federal and state laws and regulations require financial institutions, including insurance companies, to protect the privacy and security of consumer financial information and to notify consumers about 27 Table of Contents policies and practices relating to the collection, use and disclosure of consumer information, as well as policies relating to protecting the confidentiality, integrity and availability of that information.
We do not provide non-public information to agencies issuing unsolicited ratings and cannot ensure that any agencies that rate our Company or our insurance subsidiaries on an unsolicited basis will continue to do so.
We do not provide non-public information to agencies issuing unsolicited ratings and cannot ensure that any agencies that rate our holding companies or insurance subsidiaries on an unsolicited basis will continue to do so.
Best assign credit ratings to Genworth Financial. These ratings are typically notched lower than the financial strength ratings of our primary operating subsidiaries, reflecting Genworth Holdings’ reliance on dividends from the operating subsidiaries to service its debt obligations.
These ratings are typically notched lower than the financial strength ratings of our primary operating subsidiaries, reflecting Genworth Holdings’ reliance on dividends from the operating subsidiaries to service its debt obligations.
Market conduct regulation The Insurance Laws govern the marketplace activities of insurers, affecting the form and content of disclosure to consumers, product illustrations, advertising, product replacement, sales and underwriting practices, and complaint and claims handling, and these provisions are generally enforced through periodic market conduct examinations.
Insurance Laws also govern the business conduct of insurers, including marketplace activities, affecting the form and content of disclosure to consumers, product illustrations, advertising, product replacement, sales and underwriting practices, and complaint and claims handling, and these provisions are generally enforced through periodic market conduct examinations.
The model assesses the performance of new business under expected and stress scenarios on an individualized loan basis, which is used to determine pricing and inform risk tolerance and seeks to optimize economic value by balancing return and volatility. Enact seeks to charge premium rates commensurate with the underlying risk of each loan insured.
The model assesses the performance of new business under expected and stress scenarios on an individualized loan basis, which is used to determine pricing and inform Enact’s risk selection strategy that seeks to optimize economic value by balancing return and volatility. Enact seeks to charge premium rates commensurate with the underlying risk of each loan insured.
Best and HR Ratings review their ratings periodically and we cannot assure you that we will maintain our current ratings in the future. These and other agencies may also rate our Company or our insurance subsidiaries on a solicited or an unsolicited basis.
Best review their ratings periodically and we cannot assure you that we will maintain our current ratings in the future. These and other agencies may also rate our holding companies or insurance subsidiaries on a solicited or an unsolicited basis.
At present, mortgage insurance products are primarily geared towards secondary market sales to the GSEs. Enact’s mortgage insurance products predominantly insure prime-based, individually underwritten residential mortgage loans. The overall U.S. residential mortgage market encompasses both primary and secondary markets.
At present, mortgage insurance products are primarily geared towards secondary market sales to the GSEs. Enact’s mortgage insurance products predominantly insure prime-based, individually underwritten residential mortgage loans. 5 Table of Contents The overall U.S. residential mortgage market encompasses both primary and secondary markets.
Generally, “A minus” loans are loans where the borrowers have FICO credit scores between 575 and 660 and have a blemished credit history. The weighted average FICO score of Enact’s primary insurance in-force was 743 as of December 31, 2022.
Generally, “A minus” loans are loans where the borrowers have FICO credit scores between 575 and 660 and have a blemished credit history. The weighted average FICO score of Enact’s primary insurance in-force was 744 as of December 31, 2023.
As part of our evaluation of overall in-force product performance, new product initiatives and risk mitigation alternatives, we monitor regulatory and rating agency capital models as well as internal economic capital models to determine the appropriate level of risk-adjusted capital required.
As part of our evaluation of overall in-force product performance, new product initiatives and service offerings, and risk mitigation alternatives, we monitor regulatory and rating agency capital models as well as internal economic capital models to determine the appropriate level of risk-adjusted capital requirements.
Our insurance products and businesses also are affected by U.S. federal, state and local tax laws, and the tax laws of non-U.S. jurisdictions. Our securities operations, including our insurance products that are regulated as securities, such as variable annuities and variable life insurance, also are subject to U.S. federal and state and non-U.S. securities laws and regulations. The U.S.
Our insurance products and businesses are also affected by U.S. federal, state and local tax laws, and the tax laws of non-U.S. jurisdictions. Our securities operations, including our insurance products that are regulated as securities, such as variable annuities, are subject to U.S. federal and state and non-U.S. securities laws and regulations. The U.S. Securities and Exchange Commission (“SEC”), U.S.
The primary purpose of the Insurance Laws regulating our insurance businesses and their equivalents in the other countries in which we operate, and the securities laws affecting our variable annuity products, variable life insurance products and our broker/dealer, is to protect our policyholders, contractholders and clients, not our stockholders.
The primary purpose of the Insurance Laws regulating our insurance businesses and their equivalents in the other countries in which we operate, and the securities laws affecting certain of our products and our broker/dealer, is to protect our policyholders, contractholders and clients, not our stockholders.
Changes in federal housing legislation 26 Table of Contents and other laws and regulations that affect the demand for private mortgage insurance, or the way in which such laws and regulations are interpreted or applied, may have a material effect on private mortgage insurers.
Changes in federal housing legislation and other laws and regulations that affect the demand for private mortgage insurance, or the way in which such laws and regulations are interpreted or applied, may have a material effect on private mortgage insurers.
The FCRA also imposes restrictions on the permissible use of credit report information and requires mortgage insurance companies to provide adverse action notices to consumers in the event an application for mortgage insurance is declined or offered at less than the best available rate for the loan program applied for due to information contained in a consumer’s credit report.
It imposes restrictions on the permissible use of credit report information and requires mortgage insurance companies to provide adverse action notices to consumers in the event an application for mortgage insurance is declined or offered at less than the best available rate for the loan program applied for due to information contained in a consumer’s credit report. Other U.S.
On June 6, 2022, our President and Chief Executive Officer certified to the New York Stock Exchange that he was not aware of any violation by us of the New York Stock Exchange’s corporate governance listing standards. Transfer Agent and Registrar Our Transfer Agent and Registrar is Computershare, P.O. Box 505000, Louisville, KY 40233-5000.
On May 30, 2023, our President and Chief Executive Officer certified to the New York Stock Exchange that he was not aware of any violation by us of the New York Stock Exchange’s corporate governance listing standards. Transfer Agent and Registrar Our transfer agent and registrar is Computershare, P.O. Box 505000, Louisville, KY 40233-5000.
We continue to work closely with state regulators on our in-force long-term care insurance rate action plan (including increased premiums and associated benefit reductions) to achieve a shared goal of assuring Genworth’s U.S. life insurance businesses can honor their policyholder commitments in the future.
We continue to work closely with state regulators on our in-force long-term care insurance rate action plan (including increased premiums and associated benefit reductions) to achieve a shared goal of ensuring that our U.S. life insurance subsidiaries can honor their policyholder commitments in the future.
There was no U.S. federal income tax-related legislation or administrative guidance issued in 2021 that had a significant impact on our results of operations or financial condition.
There was no other U.S. federal income tax-related legislation or administrative guidance issued in 2023 or 2022 that had a significant impact on our results of operations or financial condition.
As of August 15, 2022, insurers should have implemented certain corporate governance changes and developed plans to implement the organizational structure changes. We complied with this requirement and provided our plan to the NYDFS. Insurers are encouraged to work on additional changes that may take longer to implement, although the NYDFS will issue further guidance with more specific timelines.
As of August 15, 2022, insurers were required to implement certain corporate governance changes and develop plans to implement the organizational structure changes. We complied with this requirement and provided our plan to the NYDFS. Insurers are encouraged to work on additional changes that may take longer to implement, although the NYDFS will issue further guidance with more specific timelines.
If Enact agrees with the appeal, it takes the necessary steps to reinstate insurance coverage and reactivate the loan certificate or otherwise address the 7 Table of Contents issues raised in the appeal.
If Enact agrees with the appeal, it takes the necessary steps to reinstate insurance coverage and reactivate the loan certificate or otherwise address the issues raised in the appeal.
The CPRA creates the California Privacy Protection Agency to enforce the CCPA and to promulgate regulations thereunder, imposes additional obligations regarding the privacy notice and service provider contracts, creates new requirements around the protection of sensitive personal information and eliminates certain exemptions for personal information collected in employment or business-to-business contexts.
The CPRA created the California Privacy Protection Agency to enforce the CCPA and to promulgate regulations thereunder, imposed additional obligations regarding the privacy notice and service provider contracts, created new requirements around the protection of sensitive personal information and eliminated certain exemptions for personal information collected in employment or business-to-business contexts.
AG 48 and Updated AG 48 do not affect reinsurance arrangements that were pre-existing as of January 1, 2015, and the changes set forth in Updated AG 48 do not affect reinsurance arrangements that were pre-existing as of January 1, 2017.
AG 48 does not affect reinsurance arrangements that were pre-existing as of January 1, 2015, and the changes set forth in the amended version do not affect reinsurance arrangements that were pre-existing as of January 1, 2017.
In particular, the cybersecurity program must be reasonably designed to protect consumers’ private data and must include robust controls regarding access privileges, application security, policies and procedures for the disposal of nonpublic information, regular cybersecurity awareness training, encryption of nonpublic information, third-party due diligence and an incident response plan.
The regulation requires a company’s cybersecurity program to be reasonably designed to protect consumers’ private data and to include robust controls regarding access privileges, application security, policies and procedures for the disposal of nonpublic information, regular cybersecurity awareness training, encryption of nonpublic information, third-party due diligence and an incident response plan.
Enact Holdings and the U.S. life insurance companies also provide their customers secure access to their web-based portals to facilitate transactions and provide customers with access to their account information.
Enact Holdings and our U.S. life insurance subsidiaries also provide their customers secure access to their web-based portals to facilitate transactions and provide customers with access to their account information.
Although we expect Enact will continue to retain its eligibility status with the GSEs, there can be no assurance these conditions will continue, see “Item 1A—Risk Factors—If Enact is unable to continue to meet the requirements mandated by PMIERs because the GSEs amend them or the GSEs’ interpretation of the financial requirements requires Enact to hold amounts of capital that are higher than planned or otherwise, Enact may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.” Non-U.S.
For additional information, see note 22 in our consolidated financial statements under “Part II—Item 8—Financial Statements and Supplementary Data.” Although we expect Enact will continue to retain its eligibility status with the GSEs, there can be no assurance these conditions will continue, see “Item 1A—Risk Factors—If Enact is unable to continue to meet the requirements mandated by PMIERs because the GSEs amend them or the GSEs’ interpretation of the financial requirements requires Enact to hold amounts of capital that are higher than planned or otherwise, Enact may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.” Non-U.S.
Enact Holdings and the U.S. life insurance companies regularly upgrade and enhance their systems and technology in an effort to achieve their goals of expanding their capabilities, improve productivity and enhance the customer experience. Operating centers We have established scalable, low-cost operating centers in Virginia and North Carolina.
Enact Holdings and our U.S. life insurance subsidiaries regularly upgrade and enhance their systems and technology in an effort to achieve their goals of expanding their capabilities, improve productivity and enhance the customer experience. Operating centers We have established scalable, efficient operating centers for our U.S. life insurance subsidiaries in Virginia and for Enact Holdings in North Carolina.
These laws may discourage potential acquisition proposals and may delay, deter or prevent an investment in or a change of control involving us, or one or more of our regulated subsidiaries, including transactions that our management and some or all of our stockholders might consider desirable. 19 Table of Contents U.S.
Such laws may discourage potential acquisition proposals and may delay, deter or prevent an investment in or a change of control involving us, or one or more of our regulated subsidiaries, including transactions that our management and some or all of our stockholders might consider desirable.
In addition, the NAIC adopted the Insurance Data Security Model Law (the “Cybersecurity Model Law”) on October 24, 2017, which is similar to New York’s cybersecurity regulation and establishes standards for data security and for the investigation of and notification to insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain nonpublic information.
In addition, the NAIC’s Insurance Data Security Model Law (the “Cybersecurity Model Law”), which is similar to New York’s cybersecurity regulation, establishes standards for data security and for the investigation of and notification to insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain nonpublic information.
We are also requesting premium rate increases and associated benefit reductions on newer blocks of business, as needed, some of which will be significant, to help bring their loss ratios back towards their original pricing.
We are also requesting premium rate increases and associated benefit reductions on newer blocks of business, as needed, some of which will be significant, to help bring these blocks closer to their original pricing.
ECOA, for example, prohibits discrimination against certain protected classes in credit transactions. The Fair Housing Act generally prohibits discrimination in the terms, conditions or privileges in residential real estate-related transactions on the basis of race, color, religion, sex, familial status or national origin. Numerous courts have held that the Fair Housing Act prohibits discriminatory insurance practices.
The Fair Housing Act generally prohibits discrimination in the terms, conditions or privileges in residential real estate-related transactions on the basis of race, color, religion, sex, familial status or national origin. Numerous courts have held that the Fair Housing Act prohibits discriminatory insurance practices.
The GCC provides regulators with an additional tool for conducting group-wide supervision and enhances transparency into how capital is allocated. In December 2020, the NAIC adopted amendments to the Holding Company System Model Act and Regulation. The amendments adopt a Group Capital Calculation Template and Instructions (“GCC Template and Instructions”) as well as an annual filing requirement for the GCC.
The GCC provides regulators with an additional tool for conducting group-wide supervision and enhances transparency into how capital is allocated. In December 2020, the NAIC adopted a Group Capital Calculation Template and Instructions, and it amended the Holding Company System Model Act and Regulation to implement an annual GCC filing requirement.
In connection with these processes, our risk management team works closely with the U.S. life insurance business to ensure proper governance and to better align the development of assumptions with the identified risks.
In connection with these processes, our risk management team works closely with our long-term care insurance business to ensure proper governance and to better align the development of assumptions with the identified risks.
Enact and other private mortgage insurers compete for mortgage insurance business directly with U.S. federal agencies, principally the Federal Housing Administration (“FHA”) and the U.S. Department of Veterans Affairs (“VA”), and to a lesser extent, state and local housing finance agencies. Enact’s competition with government agencies is principally on the basis of price and underwriting guidelines.
U.S. federal, state and local government agencies Enact and other private mortgage insurers compete for mortgage insurance business directly with U.S. federal agencies, principally the Federal Housing Administration (“FHA”) and the U.S. Department of Veterans Affairs (“VA”), and to a lesser extent, state and local housing finance agencies.
Securities and Exchange Commission (“SEC”), U.S. Financial Industry Regulatory Authority (“FINRA”), state securities authorities and similar non-U.S. authorities regulate and supervise these products.
Financial Industry Regulatory Authority, state securities authorities and similar non-U.S. authorities regulate and supervise these products.
We have initiated and continue to build upon a multi-phase climate risk management process. In addition, the NYDFS issued final guidance on November 15, 2021, regarding its expectations for New York domestic insurers, applicable to GLICNY, related to the management of financial risks from climate change.
We have initiated and continue to build upon a multi-phase climate risk management process. On November 15, 2021, the NYDFS issued additional guidance for New York domestic insurers (the “2021 Guidance”), applicable to GLICNY, related to the management of financial risks from climate change.
In June 2022, we outsourced operational servicing of our life insurance and fixed annuity blocks to a third-party servicer. In connection with the outsourcing, we will convert certain administrative systems to those used by the third-party servicer over the next three years.
In June 2022, we outsourced operational servicing of our life insurance and fixed annuity blocks to a third-party servicer. In connection with the outsourcing, we will convert certain administrative systems to those used 12 Table of Contents by the third-party servicer over the next few years, with a targeted completion date in 2026.
Enact also competes with mortgage lenders and other investors, the GSEs, portfolio lenders who self-insure, reinsurers, and other capital markets participants who may utilize financial instruments designed to mitigate risk. U.S. federal, state and local government agencies .
Enact also competes with mortgage lenders and other investors, the GSEs, portfolio lenders who self-insure, reinsurers, and other capital markets participants who may utilize financial instruments designed to mitigate risk.
Directors and Executive Officers See Part III, Item 10 of this Annual Report on Form 10-K for information about our directors and executive officers. 37 Table of Contents Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available, without charge, on our website, www.genworth.com, as soon as reasonably practicable after we file or furnish such reports with the SEC.
Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available, without charge, on our website, www.genworth.com, as soon as reasonably practicable after we file or furnish such reports with the SEC.
Enact’s sales force primarily markets to financial institutions and mortgage originators that impose a requirement for mortgage insurance as part of the borrower’s financing. Enact’s industry presence has enabled it to build active customer relationships with mortgage lenders across the United States.
Enact’s sales force utilizes a digital marketing program designed to expand its customer reach beyond traditional sales. Enact’s sales force primarily markets to financial institutions and mortgage originators that impose a requirement for mortgage insurance as part of the borrower’s financing. Enact’s industry presence has enabled it to build active customer relationships with mortgage lenders across the United States.
Finally, in 2021, the Federal Trade Commission (“FTC”) amended the “Standards for Safeguarding Customer Information Rules” (known as the “Safeguards Rule”) to impose additional requirements on covered financial institutions to implement and maintain certain data security practices in their information security programs.
Finally, effective as of June 2023, the Federal Trade Commission (“FTC”) amended the “Standards for Safeguarding Customer Information Rules” (known as the “Safeguards Rule”) to add requirements for certain covered financial institutions to implement and maintain certain data security practices in their information security programs.
All states have adopted the NAIC Risk Management and Own Risk and Solvency Assessment Model Act which requires an insurer to regularly undertake a confidential internal assessment of material and relevant risks (the “ORSA”) and upon the insurance regulator’s request, submit a confidential high-level summary assessment of the material and relevant risks associated with an insurer or insurance group’s current business plan and the sufficiency of capital and liquidity resources to support those risks (the “ORSA Summary Report”).
The NAIC Risk Management and Own Risk and Solvency Assessment (“ORSA”) Model Act requires an insurer to regularly, and at least annually, undertake a confidential internal assessment of material and relevant 18 Table of Contents risks and upon an insurance regulator’s request, submit a confidential, high-level summary assessment of the material and relevant risks associated with an insurer or insurance group’s current business plan and the sufficiency of capital and liquidity resources to support those risks.
Under contract underwriting agreement terms, Enact agrees to indemnify its customers against losses incurred in the event it makes material errors in determining whether loans underwritten by its contract underwriters meet specified underwriting or purchase criteria, subject to contractual limitations.
Under contract underwriting agreement terms, Enact agrees to indemnify its customers against losses incurred in the event it makes material errors in determining whether loans underwritten by its contract underwriters meet specified underwriting or purchase criteria, subject to contractual limitations. As a result, Enact assumes credit and processing risk in connection with its contract underwriting services.
State insurance departments may also conduct examinations of non-domiciliary insurers licensed in their states. Guaranty associations and similar arrangements Most jurisdictions in which our U.S. insurers are licensed require those insurers to participate in guaranty associations which pay contractual benefits owed under the policies of impaired or insolvent insurers.
Guaranty associations and similar arrangements Most jurisdictions in which our U.S. insurers are licensed require those insurers to participate in guaranty associations which pay contractual benefits owed under the policies of impaired or insolvent insurers.
Genworth will strive to maintain a disciplined approach in its capital allocation strategy going forward, balancing investments in growth initiatives with returning value to shareholders.
We will strive to maintain a disciplined approach in Genworth’s capital allocation strategy, balancing investments in CareScout growth initiatives with returning value to shareholders.
There was no impact to the servicing of our long-term care insurance products because they were not a part of the third-party outsourcing agreement. Reinsurance We reinsure a portion of our annuities, life insurance, long-term care insurance and mortgage insurance with unaffiliated reinsurers.
There was no impact to the servicing of our long-term care insurance products because they were not a part of the third-party outsourcing agreement. Reinsurance We reinsure a portion of our annuities, life insurance, long-term care insurance and mortgage insurance with unaffiliated reinsurers, and beginning in 2023, also established an affiliated reinsurer, Enact Re Ltd. (“Enact Re”).
Failure to comply with the CCPA risks regulatory fines, and the law grants a private right of action 36 Table of Contents for any unauthorized disclosure of certain personal information not subject to an exemption as a result of failure to maintain reasonable security procedures and practices.
The majority of the CPRA provisions went into effect on January 1, 2023. Failure to comply with the CCPA risks regulatory fines, and the law grants a private right of action for any unauthorized disclosure of certain personal information not subject to an exemption as a result of failure to maintain reasonable security procedures and practices.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor further discussion of the importance of financial requirements to Enact Holdings, see “—If Enact is unable to continue to meet the requirements mandated by PMIERs because the GSEs amend them or the GSEs’ interpretation of the financial requirements requires Enact to hold amounts of capital that are higher than planned or otherwise, Enact may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition” and “—Enact Holdings’ U.S. mortgage insurance subsidiaries are subject to minimum statutory capital requirements, which if not met or waived, would result in restrictions or prohibitions on them doing business and could have a material adverse impact on our business, financial condition and results of operations.” An adverse change in our insurance subsidiaries’ RBC, risk-to-capital ratio or our ability to meet other minimum regulatory requirements could cause rating agencies to downgrade the financial strength ratings of our insurance subsidiaries and the credit ratings of Genworth Holdings, which could have an adverse impact on our ability to execute our strategic plan, including stabilizing the legacy long-term care insurance in-force block and advancing Genworth’s senior care growth initiatives, and would further restrict our ability to retain and write new business.
Biggest changeAn adverse change in our U.S. life insurance subsidiaries’ RBC or our ability to meet other minimum regulatory requirements could cause rating agencies to downgrade the financial strength ratings of our insurance subsidiaries and the credit ratings of Genworth Holdings, which could have an adverse impact on our ability to execute our strategic priorities, including stabilizing the legacy long-term care insurance in-force block and advancing CareScout’s new lines of business or new products and services, and would further restrict our ability to retain and write new business.
Risks Relating to Economic and Market Conditions • Interest rates and changes in rates, including changes in monetary policy to combat inflation, could materially adversely affect our business and profitability. • A deterioration in economic conditions, a severe recession or a decline in home prices, all of which could be driven by many potential factors, including inflation, may adversely affect Enact Holdings’ loss experience.
Risks Relating to Economic and Market Conditions • Interest rates and changes in rates, including changes in monetary policy to combat inflation, could materially adversely affect our business and profitability. • A deterioration in economic conditions, a severe recession or a decline in home prices, all of which could be driven by many potential factors, may adversely affect Enact Holdings’ loss experience.
While the terms of recent vintages of adjustable-rate mortgages (“ARMs”) have changed to limit the frequency and severity shocks, rising interest rates can also increase the monthly mortgage payments for homeowners with insured loans that have ARMs that could have the effect of increasing default rates on ARM loans.
While the terms of recent vintages of adjustable-rate mortgages (“ARMs”) have changed to limit the frequency and severity of shocks, rising interest rates can also increase the monthly mortgage payments for homeowners with insured loans that have ARMs that could have the effect of increasing default rates on ARM loans.
Although Enact Holdings actively monitors and develops its relationship with Freddie Mac and Fannie Mae, a deterioration in any of these relationships, or the loss of business or opportunities for new business, could have a material adverse effect on our business, financial condition and results of operations.
Although Enact Holdings actively monitors and develops its relationship with Fannie Mae and Freddie Mac, a deterioration in any of these relationships, or the loss of business or opportunities for new business, could have a material adverse effect on our business, financial condition and results of operations.
Regulatory and Legal Risks • Changes in accounting and reporting standards issued by the Financial Accounting Standards Board or other standard-setting bodies and insurance regulators could materially adversely affect our business, financial condition and results of operations. • Our insurance businesses are extensively regulated and changes in regulation may reduce our profitability and limit our growth. • Litigation and regulatory investigations or other actions are common in the insurance business and may result in financial losses and harm our reputation. • An adverse change in our regulatory requirements, including risk-based capital requirements, could have a material adverse impact on our business, results of operations and financial condition. 40 Table of Contents • The inability to obtain in-force rate action increases (including increased premiums and associated benefit reductions) in our long-term care insurance business could have a material adverse impact on our business, including our results of operations and financial condition. • Changes to the role of the GSEs or to the charters or business practices of the GSEs, including actions or decisions to decrease or discontinue the use of mortgage insurance, could adversely affect our business, financial condition and results of operations. • If Enact is unable to continue to meet the requirements mandated by PMIERs because the GSEs amend them or the GSEs’ interpretation of the financial requirements requires Enact to hold amounts of capital that are higher than planned or otherwise, Enact may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition. • Enact Holdings’ U.S. mortgage insurance subsidiaries are subject to minimum statutory capital requirements, which if not met or waived, would result in restrictions or prohibitions on them doing business and could have a material adverse impact on our business, financial condition and results of operations. • Changes in regulations that adversely affect the mortgage insurance markets in which Enact Holdings operates could affect its operations significantly and could reduce the demand for mortgage insurance. • Our U.S. life insurance subsidiaries may not be able to continue to mitigate the impact of Regulations XXX or AXXX and, therefore, they may incur higher operating costs that could have a material adverse effect on our business, financial condition and results of operations.
Regulatory and Legal Risks • Changes in accounting and reporting standards issued by the Financial Accounting Standards Board or other standard-setting bodies and insurance regulators could materially adversely affect our business, financial condition and results of operations. • The inability to obtain in-force rate action increases (including increased premiums and associated benefit reductions) in our long-term care insurance business could have a material adverse impact on our business, including our results of operations and financial condition. • Our insurance businesses are extensively regulated and changes in regulation may reduce our profitability and limit our growth. • Litigation and regulatory investigations or other actions are common in the insurance business and may result in financial losses and harm our reputation. • An adverse change in the regulatory requirements on our U.S. life insurance subsidiaries, including risk-based capital requirements, could have a material adverse impact on our business, results of operations and financial condition. 33 Table of Contents • Changes to the role of the GSEs or to the charters or business practices of the GSEs, including actions or decisions to decrease or discontinue the use of mortgage insurance, could adversely affect our business, financial condition and results of operations. • If Enact is unable to continue to meet the requirements mandated by PMIERs because the GSEs amend them or the GSEs’ interpretation of the financial requirements requires Enact to hold amounts of capital that are higher than planned or otherwise, Enact may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition. • Enact Holdings’ U.S. mortgage insurance subsidiaries are subject to minimum statutory capital requirements, which if not met or waived, would result in restrictions or prohibitions on them doing business and could have a material adverse impact on our business, financial condition and results of operations. • Changes in regulations that adversely affect the mortgage insurance markets in which Enact Holdings operates could affect its operations significantly and could reduce the demand for mortgage insurance. • Our U.S. life insurance subsidiaries may not be able to continue to mitigate the impact of Regulations XXX or AXXX and, therefore, they may incur higher operating costs that could have a material adverse effect on our business, financial condition and results of operations.
Furthermore, Enact Holdings’ estimates of claims-paying resources and claim obligations are based on various assumptions, including but not limited to, the timing of receipt of claims on delinquent loans, estimates of future claims that will ultimately be received, the ultimate resolution of borrower forbearance plans, including whether borrowers in forbearance cure or result in a claim payment, anticipated loss mitigation activities, premiums, housing prices and unemployment rates.
Furthermore, Enact Holdings’ estimates of claims-paying resources and claim obligations are based on various assumptions, including but not limited to, the timing of receipt of claims on delinquent loans, estimates of future claims that will ultimately be received, the ultimate resolution of borrower forbearance plans, including whether loans in forbearance cure or result in a claim payment, anticipated loss mitigation activities, premiums, housing prices and unemployment rates.
These administrative powers include, but are not limited to: • licensing companies and agents to transact business; • calculating the value of assets and determining the eligibility of assets to determine compliance with statutory requirements; • mandating certain insurance benefits; • regulating certain premium rates; • reviewing and approving policy forms; • regulating discrimination in pricing and coverage terms and unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements; • establishing and revising statutory capital and reserve requirements and solvency standards; • fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts; • approving premium increases and associated benefit reductions; • evaluating enterprise risk to an insurer; • approving changes in control of insurance companies; • restricting the payment of dividends and other transactions between affiliates; • regulating the types, amounts and valuation of investments; • restricting the types of insurance products that may be offered; and • imposing insurance eligibility criteria.
These administrative powers include, but are not limited to: • licensing companies and agents to transact business; • calculating the value of assets and determining the eligibility of assets to determine compliance with statutory requirements; • mandating certain insurance benefits; • regulating certain premium rates; • reviewing and approving policy forms; • regulating discrimination in pricing, coverage terms and other insurance practices, as well as unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements; • establishing and revising statutory capital and reserve requirements and solvency standards; • fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts; • approving premium increases and associated benefit reductions; • evaluating enterprise risk to an insurer; • approving changes in control of insurance companies; • restricting the payment of dividends and other transactions between affiliates; • regulating the types, amounts and valuation of investments; • restricting the types of insurance products that may be offered; and • imposing insurance eligibility criteria.
Relationships with mortgage insurance customers may be adversely affected by the ratings assigned to Genworth Holdings, Enact Holdings or our principal insurance subsidiaries which could have a material adverse effect on our business, financial condition and results of operations. EMICO, our principal U.S. mortgage insurance subsidiary, has financial strength ratings that are relatively consistent with its competitors.
Relationships with mortgage insurance customers may be adversely affected by the ratings assigned to Genworth Holdings or our principal insurance subsidiaries which could have a material adverse effect on our business, financial condition and results of operations. EMICO, our principal U.S. mortgage insurance subsidiary, has financial strength ratings that are relatively consistent with its competitors.
In this event, we would have to increase our long-term care insurance reserves by amounts that would likely be material and would result in a material adverse impact. Moreover, we may not be able to sufficiently mitigate the impact of unexpected adverse experience through premium rate increases and associated benefit reductions.
In this event, we would have to increase our long-term care insurance reserves by amounts that would likely be material and would result in a material adverse impact to earnings. Moreover, we may not be able to sufficiently mitigate the impact of unexpected adverse experience through premium rate increases and associated benefit reductions.
Ratings downgrades that result in the inability of Enact Holdings to insure new mortgage loans sold to the GSEs, or the transfer by the GSEs of its existing policies to an alternative mortgage insurer, would have a material adverse effect on our business, results of operations and financial condition.
Ratings downgrades that result in the inability of Enact to insure new mortgage loans sold to the GSEs, or the transfer by the GSEs of its existing policies to an alternative mortgage insurer, would have a material adverse effect on our business, results of operations and financial condition.
In addition, some states have adopted, or are considering adopting long-term care insurance rate increase laws that would further limit increases in long-term care insurance premium rates beyond the statutes and regulations previously adopted in certain states, which would adversely impact our ability to achieve anticipated rate increases.
In addition, some states have adopted or are considering adopting laws that would further limit increases in long-term care insurance premium rates beyond the statutes and regulations previously adopted in certain states, which would adversely impact our ability to achieve anticipated rate increases.
For additional information on UFLIC reinsurance, see note 8 in our consolidated financial statements under “Part II—Item 8—Financial Statements and Supplementary Data.” Defaults or other events impacting the value of our fixed maturity securities portfolio may reduce our income.
For additional information on UFLIC reinsurance, see note 9 in our consolidated financial statements under “Part II—Item 8—Financial Statements and Supplementary Data.” Defaults or other events impacting the value of our fixed maturity securities portfolio may reduce our income.
Factors that could lead to a decrease in the volume of high loan-to-value mortgage originations include, but are not limited to: • an increase in home mortgage interest rates; • limitations on the tax benefits of homeownership and mortgage interest; • implementation of more rigorous mortgage lending regulation; • a decline in economic conditions generally, or in conditions in regional and local economies; • events outside of Enact Holdings’ control, including natural and man-made disasters and pandemics adversely affecting housing markets and home buying; 72 Table of Contents • the level of consumer confidence, which may be adversely affected by economic instability, war or terrorist events; • an increase in the price of homes relative to income levels; • a lack of housing supply at lower home prices; • adverse population trends, including lower homeownership rates; • high rates of home price appreciation, which for refinancings affect whether refinanced loans have loan-to-value ratios that require mortgage insurance; and • changes in government housing policy encouraging loans to first-time home buyers.
Factors that could lead to a decrease in the volume of high loan-to-value mortgage originations include, but are not limited to: • an increase in home mortgage interest rates; • limitations on the tax benefits of homeownership and mortgage interest; • implementation of more rigorous mortgage lending regulation; • a decline in economic conditions generally, or in conditions in regional and local economies; • events outside of Enact Holdings’ control, including natural and man-made disasters and pandemics adversely affecting housing markets and home buying; • the level of consumer confidence, which may be adversely affected by economic instability, war or terrorist events; • an increase in the price of homes relative to income levels; • a lack of housing supply at lower home prices; • adverse population trends, including lower homeownership rates; • high rates of home price appreciation, which for refinancings affect whether refinanced loans have loan-to-value ratios that require mortgage insurance; and • changes in government housing policy encouraging loans to first-time home buyers.
In our insurance operations, we are, have been, or may become subject to class actions and individual suits alleging, among other things, issues relating to sales or underwriting practices, increases to in-force long-term care insurance premiums, payment of contingent or other sales commissions, claims payments and procedures, product design, product disclosure, product administration, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, charging excessive or impermissible fees on products, recommending unsuitable products to customers, our pricing structures and business practices in our mortgage insurance subsidiaries, such as captive reinsurance arrangements with lenders and contract underwriting services, violations of RESPA or related state anti-inducement laws, mortgage insurance policy rescissions and curtailments, and breaching fiduciary or other duties to customers, including but not limited to breach of customer information.
In our insurance operations, we are, have been, or may become subject to class actions and individual suits alleging, among other things, issues relating to sales or underwriting practices, increases to in-force long-term care insurance premiums, payment of contingent or other sales commissions, claims payments and procedures, product design, product disclosure, product administration, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, charging excessive or impermissible fees on products, recommending unsuitable products to customers, our pricing structures and business practices in our mortgage insurance subsidiaries, such as captive reinsurance arrangements with lenders and contract underwriting services, violations of RESPA or related state anti-inducement laws, mortgage insurance policy rescissions and curtailments, and breaching fiduciary or other duties to customers, including but not limited to cybersecurity breaches of customer information.
See “—A deterioration in economic conditions, a severe recession or a decline in home prices, all of which could be driven by many potential factors, including inflation, may adversely affect Enact Holdings’ loss experience.” As seen prior to 2022, declining interest rates historically have increased the rate at which borrowers refinance their existing mortgages, resulting in cancellations of the mortgage insurance covering the refinanced loans.
See “—A deterioration in economic conditions, a severe recession or a decline in home prices, all of which could be driven by many potential factors, may adversely affect Enact Holdings’ loss experience.” As seen prior to 2022, declining interest rates historically have increased the rate at which borrowers refinance their existing mortgages, resulting in cancellations of the mortgage insurance covering the refinanced loans.
Absent the availability and affordability to enter into new credit risk transfer transactions, the ability of Enact Holdings to obtain PMIERs or statutory credit for new transactions would be adversely impacted.
Moreover, absent the availability and affordability to enter into new credit risk transfer transactions, the ability of Enact Holdings to obtain PMIERs or statutory credit for new transactions would be adversely impacted.
The direct or indirect effects of such adverse ratings actions or any future actions could include, but are not limited to: • ceasing and/or reducing new sales of our products or limiting the business opportunities we are presented with; • adversely affecting our relationships with distributors, including the loss of exclusivity under certain agreements with our independent sales intermediaries and distribution partners; • causing us to lose key distributors that have ratings requirements that we may no longer satisfy (or resulting in our renegotiation of new, less favorable arrangements with those distributors); • requiring us to modify some of our existing products or services to remain competitive, including reducing premiums we charge, or introduce new products or services; 52 Table of Contents • materially increasing the number or amount of policy surrenders, withdrawals and loans by contractholders and policyholders; • requiring us to post additional collateral for our derivatives or hedging agreements tied to the credit ratings of our holding companies; • requiring us to provide support, or to arrange for third-party support, in the form of collateral, capital contributions or letters of credit under the terms of certain of our reinsurance and other agreements, or otherwise securing our commercial counterparties for the perceived risk of our financial strength; • adversely affecting our ability to maintain reinsurance or obtain new reinsurance or obtain it on reasonable pricing and other terms; • increasing the capital charge associated with affiliated investments within certain of our U.S. life insurance businesses thereby lowering capital and RBC of these subsidiaries and negatively impacting our financial flexibility; • regulators requiring certain of our subsidiaries to maintain additional capital, limiting thereby our financial flexibility and requiring us to raise additional capital; • adversely affecting our ability to raise capital; • increased scrutiny by the GSEs and/or by customers, potentially resulting in a decrease in the amount of new insurance written; • increasing our cost of borrowing and making it more difficult to borrow in the public debt markets or enter into a credit agreement; and • making it more difficult to execute our strategic priorities.
The direct or indirect effects of such adverse ratings actions or any future actions could include, but are not limited to: • ceasing and/or reducing new sales of our products or limiting the business opportunities we are presented with; 42 Table of Contents • adversely affecting our relationships with distributors, including the loss of exclusivity under certain agreements with our independent sales intermediaries and distribution partners; • causing us to lose key distributors that have ratings requirements that we may no longer satisfy (or resulting in our renegotiation of new, less favorable arrangements with those distributors); • requiring us to modify some of our existing products or services to remain competitive, including reducing premiums we charge, or introduce new products or services; • materially increasing the number or amount of policy surrenders, withdrawals and loans by contractholders and policyholders; • requiring us to post additional collateral for our derivatives or hedging agreements tied to the credit ratings of our holding companies; • requiring us to provide support, or to arrange for third-party support, in the form of collateral, capital contributions or letters of credit under the terms of certain of our reinsurance and other agreements, or otherwise securing our commercial counterparties for the perceived risk of our financial strength; • adversely affecting our ability to maintain reinsurance or obtain new reinsurance or obtain it on reasonable pricing and other terms; • increasing the capital charge associated with affiliated investments within certain of our U.S. life insurance subsidiaries thereby lowering capital and RBC of these subsidiaries and negatively impacting our financial flexibility; • regulators requiring certain of our subsidiaries to maintain additional capital, limiting thereby our financial flexibility and requiring us to raise additional capital; • adversely affecting our ability to raise capital; • increased scrutiny by the GSEs and/or by customers, potentially resulting in a decrease in the amount of new insurance written; • increasing our cost of borrowing and making it more difficult to borrow in the public debt markets or enter into a credit agreement; and • making it more difficult to execute on CareScout initiatives.
Liquidity, Financial Strength and Credit Ratings, and Counterparty and Credit Risks • Genworth Financial and Genworth Holdings depend on the ability of their respective subsidiaries to pay dividends and make other payments and distributions to each of them and to meet their obligations. • Our sources of capital have become more limited, and under certain conditions we may need to seek additional capital on unfavorable terms. • Adverse rating agency actions have resulted in a loss of business and adversely affected our results of operations, financial condition and business and future adverse rating actions could have a further and more significant adverse impact on us. • Defaults by counterparties to our reinsurance arrangements or to derivative instruments we use to hedge our business risks, or defaults by us on agreements we have with these counterparties, may expose us to risks we sought to mitigate, which could have a material adverse effect on our business, results of operations and financial condition. • Defaults or other events impacting the value of our fixed maturity securities portfolio may reduce our income.
Liquidity, Financial Strength and Credit Ratings, and Counterparty and Credit Risks • Genworth Financial and Genworth Holdings depend on the ability of Enact Holdings and its subsidiaries to pay dividends and make other payments and distributions to each of them and to meet their obligations. • Our sources of capital have become more limited, and under certain conditions we may need to seek additional capital on unfavorable terms. • Adverse rating agency actions have in the past resulted in a loss of business and adversely affected our results of operations, financial condition and business, and future adverse rating actions could have a further and more significant adverse impact on us. • Defaults by counterparties to our reinsurance arrangements or to derivative instruments we use to hedge our business risks, or defaults by us on agreements we have with these counterparties, may expose us to risks we sought to mitigate, which could have a material adverse effect on our business, results of operations and financial condition. • Defaults or other events impacting the value of our fixed maturity securities portfolio may reduce our income.
Lower persistency rates result in reduced insurance in-force and earned premiums, which could have a significant adverse impact on our results of operations.
Lower persistency rates can result in reduced insurance in-force and earned premiums, which could have a significant adverse impact on our results of operations.
The failure of our insurance subsidiaries to meet applicable RBC requirements or minimum statutory capital and surplus 60 Table of Contents requirements could subject our insurance subsidiaries to further examination or corrective action imposed by state insurance regulators, including limitations on their ability to write additional business, or the addition of state regulatory supervision, rehabilitation, seizure or liquidation.
The failure of our 50 Table of Contents insurance subsidiaries to meet applicable RBC requirements or minimum statutory capital and surplus requirements could subject our insurance subsidiaries to further examination or corrective action imposed by state insurance regulators, including limitations on their ability to write additional business, or the addition of state regulatory supervision, rehabilitation, seizure or liquidation.
Our ability to retain, attract and motivate experienced and qualified employees and senior management has been more challenging in light of our previous financial difficulties, announcements concerning expense reductions and from the demands being placed on our employees, as well as recruitment challenges due to the current labor shortage and low labor participation rate.
Our ability to retain, attract and motivate experienced and qualified employees and senior management has been more challenging in light of our previous financial difficulties, announcements concerning expense reductions and from the demands being placed on our employees, as well as recruitment challenges due to the ongoing labor shortage and low labor participation rate.
Levels of write-downs or expected credit losses are impacted by our assessment of the financial condition of the issuer, whether or not the issuer is expected to pay its principal and interest obligations, our expected recoveries in the event of a default or circumstances that would require us to sell securities which have declined in value. 54 Table of Contents Risks Relating to Economic and Market Conditions Interest rates and changes in rates, including changes in monetary policy to combat inflation, could materially adversely affect our business and profitability.
Levels of write-downs or expected credit losses are impacted by our assessment of the financial condition of the issuer, whether or not the issuer is expected to pay its principal and interest obligations, and our expected recoveries in the event of a default or circumstances that would require us to sell securities that have declined in value. 44 Table of Contents Risks Relating to Economic and Market Conditions Interest rates and changes in rates, including changes in monetary policy to combat inflation, could materially adversely affect our business and profitability.
For a further discussion of our liquidity, see “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Adverse rating agency actions have resulted in a loss of business and adversely affected our results of operations, financial condition and business and future adverse rating actions could have a further and more significant adverse impact on us.
For a further discussion of our liquidity, see “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Adverse rating agency actions have in the past resulted in a loss of business and adversely affected our results of operations, financial condition and business, and future adverse rating actions could have a further and more significant adverse impact on us.
We are also exposed to the continued threat of terrorism, military actions, cybersecurity breaches and other man-made disasters, which may cause significant volatility in global financial markets and could trigger an economic downturn in the areas directly or indirectly affected by the disaster.
We are also exposed to the continued threat of terrorism, military actions and other man-made disasters, which may cause significant volatility in global financial markets and could trigger an economic downturn in the areas directly or indirectly affected by the disaster.
As part of our cash flow testing process for our U.S. life insurance subsidiaries, we consider incremental benefits from expected future in-force rate actions in our long-term care insurance products that would help mitigate the impact of deteriorating experience.
As part of our cash flow testing process for our U.S. life insurance subsidiaries, we also consider incremental benefits from expected future in-force rate actions in our long-term care insurance products that help mitigate the impact of deteriorating experience.
If the cash Genworth Financial or Genworth Holdings receives from their respective subsidiaries pursuant to dividends and tax sharing and expense reimbursement arrangements is insufficient to fund any of their obligations, or if a subsidiary is unable or unwilling for any reason to pay dividends to either of them, our liquidity would be materially adversely impacted which would likely have a material adverse effect on our financial condition and overall business.
If the cash Genworth Financial or Genworth Holdings receives pursuant to dividends and tax sharing and expense reimbursement arrangements is insufficient to fund any of their obligations, or if a subsidiary is unable or unwilling for any reason to pay dividends to either of them, our liquidity would be materially adversely impacted which would likely have a material adverse effect on our financial condition and overall business.
If one of Enact Holdings’ U.S. mortgage insurance subsidiaries that is writing business in a particular state fails to maintain that state’s required minimum capital level, it would generally be required to immediately stop writing new business in the state until the insurer re-establishes the required level of capital or receives a waiver of the requirement from the state’s insurance regulator, or until it establishes an alternative source of underwriting capacity acceptable to the regulator.
If one of Enact Holdings’ U.S. mortgage insurance subsidiaries that is writing business in a particular state fails to maintain that state’s required minimum capital level, it would generally be required to 53 Table of Contents immediately stop writing new business in the state until the insurer re-establishes the required level of capital or receives a waiver of the requirement from the state’s insurance regulator, or until it establishes an alternative source of underwriting capacity acceptable to the regulator.
Enact Holdings and its U.S. mortgage insurance subsidiaries, as credit enhancement providers in the residential mortgage lending industry, are also subject to compliance with various federal and state consumer 66 Table of Contents protection and insurance laws, including RESPA, the ECOA, the Fair Housing Act, the Dodd-Frank Act (including the adoption of the QM Rule), HOPA, the FCRA and the Fair Debt Collection Practices Act, among others.
Enact Holdings and its U.S. mortgage insurance subsidiaries, as credit enhancement providers in the residential mortgage lending industry, are also subject to compliance with various federal and state consumer protection and insurance laws, including RESPA, the ECOA, the Fair Housing Act, the Dodd-Frank Act (including the adoption of the QM Rule), HOPA, the FCRA and the Fair Debt Collection Practices Act, among others.
As of December 31, 2022, the RBC of each of our U.S. life insurance subsidiaries exceeded the level of RBC that would require any of them to take or become subject to any corrective action in their respective domiciliary state.
As of December 31, 2023, the RBC of each of our U.S. life insurance subsidiaries exceeded the level of RBC that would require any of them to take or become subject to any corrective action in their respective domiciliary state.
As a result of current market conditions and increased regulatory requirements, Enact Holdings’ lending customers may decide to write business only with a limited number of mortgage insurers or only with certain mortgage insurers, based on their views of an insurer’s pricing, service levels, underwriting guidelines, loss mitigation practices, financial strength, ratings or other factors.
As a result of current market conditions and increased regulatory requirements, Enact Holdings’ lending customers may decide to write business only with a limited number of mortgage insurers or only with certain mortgage insurers based on their views of an insurer’s pricing, service levels, underwriting guidelines, loss mitigation practices, financial strength, ratings, mechanisms of credit enhancements or other factors.
The continued viability of our long-term care insurance business, as well as that of GLIC and GLICNY, is based on our ability to obtain significant premium rate increases and associated benefit reductions on our in-force long-term care insurance products.
The continued sustainability of our long-term care insurance business, as well as that of GLIC and GLICNY, is based on our ability to obtain significant premium rate increases and associated benefit reductions on our in-force long-term care insurance products.
The effect of persistency on profitability varies by products. For our deferred annuity products with GMWBs and guaranteed annuitization benefits, actual persistency that is higher than our persistency assumptions could have an adverse impact on profitability because we could be required to make withdrawal or annuitization payments for a longer period of time than the account value would support.
For our deferred annuity products with GMWBs and guaranteed annuitization benefits, actual persistency that is higher than our persistency assumptions could have an adverse impact on profitability because we could be required to make withdrawal or annuitization payments for a longer period of time than the account value would support.
Any significant decline in home values, either due to rising rates or otherwise, particularly if accompanied by increased unemployment in a recessionary environment occasioned by increasing interest rates, could increase delinquencies and foreclosures at Enact Holdings, which could have a material adverse effect on our business, results of operations and financial condition.
Any significant decline in home values, either due to rising rates or otherwise, particularly if accompanied by increased unemployment in a recessionary environment, could increase delinquencies and foreclosures at Enact Holdings, which could have a material adverse effect on our business, results of operations and financial condition.
The 59 Table of Contents result of those potential challenges could require us to increase levels of statutory capital and reserves or incur higher operating costs and/or have implications on certain tax positions. Litigation and regulatory investigations or other actions are common in the insurance business and may result in financial losses and harm our reputation.
The result of those potential challenges could require us to increase levels of statutory capital and reserves or incur higher operating costs and/or have implications on certain tax positions. Litigation and regulatory investigations or other actions are common in the insurance business and may result in financial losses and harm our reputation.
We routinely execute reinsurance and derivative transactions with reinsurers, brokers/dealers, commercial banks, investment banks and other institutional counterparties to mitigate our risks in various circumstances and 53 Table of Contents to hedge various business risks. Many of these transactions expose us to credit risk in the event of default of our counterparty or client or change in collateral value.
We routinely execute reinsurance and derivative transactions with reinsurers, brokers/dealers, commercial banks, investment banks and other institutional counterparties to mitigate our risks in various circumstances and to hedge various business risks. Many of these transactions expose us to credit risk in the event of default of our counterparty or client or change in collateral value.
A deterioration in economic conditions, a severe recession or a decline in home prices, all of which could be driven by many potential factors, including inflation, may adversely affect Enact Holdings’ loss experience.
A deterioration in economic conditions, a severe recession or a decline in home prices, all of which could be driven by many potential factors, may adversely affect Enact Holdings’ loss experience.
Passage and timing of any comprehensive GSE reform or incremental change (legislative or administrative) is uncertain, making the actual impact on Enact Holdings and the private mortgage insurance industry difficult to predict. Any such changes that come to pass could have a significant impact on our business, results of operations and financial condition.
Passage and timing of any comprehensive GSE reform or incremental change (legislative or administrative) is uncertain, making the actual impact on Enact Holdings and the private mortgage insurance industry difficult to predict. Any such changes that occur could have a significant impact on our business, results of operations and financial condition.
Furthermore, the availability of raising additional capital, including through additional minority equity offerings of Enact Holdings or the issuance of debt, could depend on a variety of factors such as 51 Table of Contents market conditions, regulatory considerations, the general availability of credit, the level of activity and availability of reinsurance, our credit ratings and credit capacity and the performance of and outlook for Enact Holdings.
Furthermore, the availability of raising additional capital, including through additional minority equity offerings of Enact Holdings or the issuance of equity or debt, could depend on a variety of factors such as market conditions, regulatory considerations, the general availability of credit, the level of activity and availability of reinsurance, our credit ratings and credit capacity and the performance of and outlook for Enact Holdings.
Loss experience in Enact Holdings generally results from adverse economic events, such as a borrower’s reduction of income, unemployment, underemployment, divorce, illness, inability to manage credit, or a change 56 Table of Contents in interest rate levels or home values, that reduce a borrower’s willingness or ability to continue to make mortgage payments.
Loss experience in Enact Holdings generally results from adverse economic events, such as a borrower’s reduction of income, unemployment, underemployment, divorce, illness, inability to manage credit, or a change in interest rate levels or home values, that reduce a borrower’s willingness or ability to continue to make mortgage payments.
Conversely, higher persistency on certain higher-risk products could have a material adverse effect if claims generated by such products remain elevated or increase. 73 Table of Contents The amount of mortgage insurance written by Enact Holdings could decline significantly if alternatives to private mortgage insurance are used or lower coverage levels of mortgage insurance are selected.
Conversely, higher persistency on certain higher-risk products could have a material adverse effect if claims generated by such products remain elevated or increase. The amount of mortgage insurance written by Enact Holdings could decline significantly if alternatives to private mortgage insurance are used or lower coverage levels of mortgage insurance are selected.
Depending on actual experience, the amount of capital required under PMIERs for Enact Holdings’ subsidiaries may be higher than currently anticipated. In the absence of a premium increase on new business, if Enact Holdings’ subsidiaries hold more capital relative to their insured loans, their returns will be lower.
Depending on actual experience, the amount 52 Table of Contents of capital required under PMIERs for Enact Holdings’ subsidiaries may be higher than currently anticipated. In the absence of a premium increase on new business, if Enact Holdings’ subsidiaries hold more capital relative to their insured loans, their returns will be lower.
We rely upon third-party vendors who may be unable or unwilling to meet their obligations to us. We rely on third-party vendors to efficiently execute in-house processes as well as to provide unique or cost-efficient products or services. We rely on the controls and risk management processes of these third parties.
We rely upon third-party vendors who may be unable or unwilling to meet their obligations to us. We rely on third-party vendors to efficiently execute in-house processes and other outsourcing arrangements, as well as to provide unique or cost-efficient products or services. We rely on the controls and risk management processes of these third parties.
In the event the premiums Enact Holdings charges do not adequately compensate for the risks and costs associated with the provided coverage, including costs associated with unforeseen higher claims, it may have a material adverse effect on our business, results of operations and financial condition.
In the 39 Table of Contents event the premiums Enact Holdings charges do not adequately compensate for the risks and costs associated with the provided coverage, including costs associated with unforeseen higher claims, it may have a material adverse effect on our business, results of operations and financial condition.
Our U.S. life insurance subsidiaries have executed external reinsurance agreements to reinsure sales of some of their older blocks of long-term care insurance products (10% of new business issued from 2003 to 2008; 20% to 30% of new business issued from 2009 to 2011; and 40% of new business issued from 2011 to early 2013).
Our U.S. life insurance subsidiaries have executed external reinsurance agreements to reinsure sales of some of their older blocks of long-term care insurance products (10% of new business issued from 2003 to 2008; 20% to 30% of new business issued from 2009 to 2011; and 40% of 59 Table of Contents new business issued from 2011 to early 2013).
The amount of capital that may be required in the future to maintain the Minimum Required Assets, as defined in PMIERs, is dependent upon, among other things: (i) the way PMIERs are applied and interpreted by the GSEs and the FHFA; (ii) the future performance of the U.S. housing market; (iii) Enact Holdings’ generation of earnings, available assets and risk-based required assets, reducing risk in-force and reducing delinquencies as anticipated, and writing anticipated amounts and types of new mortgage insurance business; and (iv) Enact Holdings’ overall financial performance, capital and liquidity levels.
Regulation and Agency Qualification Requirements.” The amount of capital that may be required in the future to maintain the Minimum Required Assets, as defined in PMIERs, is dependent upon, among other things: (i) the way PMIERs are applied and interpreted by the GSEs and the FHFA; (ii) the future performance of the U.S. housing market; (iii) Enact Holdings’ generation of earnings, available assets and risk-based required assets, reducing risk in-force and reducing delinquencies as anticipated, and writing anticipated amounts and types of new mortgage insurance business; and (iv) Enact Holdings’ overall financial performance, capital and liquidity levels.
These estimates and actuarial assumptions involve the exercise of significant judgment. Our future financial results depend significantly upon the extent to 44 Table of Contents which our actual future experience is consistent with the assumptions and methodologies we have used in pricing our products and calculating our reserves.
These estimates and actuarial assumptions involve the exercise of significant judgment. Our future financial results depend significantly upon the extent to which our actual future experience is consistent with the assumptions and methodologies we have used in pricing our products and calculating our reserves.
The GSEs may amend or waive PMIERs at their discretion, impose additional conditions or restrictions, and have broad discretion to interpret PMIERs, which could impact the calculation of Available Assets and/or Minimum Required Assets or require an increase in assets held to remain compliant.
The GSEs have in the past and may in the future amend or waive PMIERs at their discretion or impose additional conditions or restrictions, and the GSEs have broad discretion to interpret PMIERs, any of which could impact the calculation of Available Assets and/or Minimum Required Assets or require an increase in assets held to remain compliant.
These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Cautionary note regarding forward-looking statements” and the risks of our businesses described elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2022. 39 Table of Contents Risk Factor Summary The following summarizes material risks to the Company and is qualified by the full description contained below herewith.
These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Cautionary note regarding forward-looking statements” and the risks of our businesses described elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2023. 32 Table of Contents Risk Factor Summary The following summarizes material risks to the Company and is qualified by the full description contained below.
The methodologies, estimates and assumptions we use in valuing 49 Table of Contents our investment securities evolve over time and are subject to different interpretation (including based on developments in relevant accounting literature), all of which can lead to changes in the value of our investment securities.
The methodologies, estimates and assumptions we use in valuing our investment securities evolve over time and are subject to different interpretation (including based on developments in relevant accounting literature), all of which can lead to changes in the value of our investment securities.
In addition, those governmental enterprises typically do not have the same capital requirements that Enact Holdings and other mortgage insurance companies have and therefore may have financial flexibility in their pricing and capacity that could put Enact Holdings at a competitive disadvantage.
In addition, those governmental enterprises typically do not have the same capital requirements or cost of capital that Enact Holdings and other mortgage insurance companies have and therefore may have financial flexibility in their pricing and capacity that could put Enact Holdings at a competitive disadvantage.
Our businesses could be adversely impacted from deficiencies in our disclosure controls and procedures or internal control over financial reporting. The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting, including controls necessary to implement LDTI, may not prevent all errors, misstatements or misrepresentations.
Our businesses could be adversely impacted from deficiencies in our disclosure controls and procedures or internal control over financial reporting. The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting, including incremental controls added to implement LDTI, may not prevent all errors, misstatements or misrepresentations.
Conversely, if mortality rates are higher than our pricing and valuation assumptions, we could be required to make greater payments under our life insurance policies and annuity contracts with guaranteed minimum death benefits (“GMDBs”) than we had projected.
For example, if mortality rates are higher than our pricing and valuation assumptions, we could be required to make greater payments under our life insurance policies and annuity contracts with guaranteed minimum death benefits (“GMDBs”) than we had projected.
Significant increases to our reserves may, among other things, limit our ability to execute our strategic priorities and adversely impact our credit or financial strength ratings. Any of these results could have a material adverse impact on our business, results of operations and financial condition.
Significant increases to our reserves may, among other things, limit our ability to execute on our business initiatives and adversely impact our credit or financial strength ratings. Any of these results could have a material adverse impact on our business, results of operations and financial condition.
Accordingly, we may be forced to incur additional expenses for reinsurance or may not be able to obtain new reinsurance or renew existing reinsurance arrangements on acceptable terms, or at all, which could increase our risk and adversely affect our ability to obtain statutory capital credit for new reinsurance or could require us to make capital contributions to maintain regulatory capital requirements.
Accordingly, we may continue to be forced into incurring additional expenses for reinsurance and/or we may not be able to obtain new reinsurance or renew existing reinsurance arrangements on acceptable terms, or at all, which could increase our risk and adversely affect our ability to obtain statutory capital credit for new reinsurance or could require us to make capital contributions to maintain regulatory capital requirements.
Such a mismatch has the potential to increase product pricing causing a decrease in sales to lower risk individuals resulting in higher risk individuals becoming the more likely buyer. In addition, it is possible that regulators may enforce anti-discrimination provisions even when medical information is available that indicates a purchaser is at higher risk.
Such a mismatch has the potential to increase product pricing causing a decrease in sales to lower risk individuals resulting in higher risk individuals becoming the more likely buyer. In addition, it is possible that regulators may enforce anti-discrimination provisions even 62 Table of Contents when medical information is available that indicates a purchaser is at higher risk.
A significant number of our long-term care insurance policies have experienced higher persistency than we had originally assumed, which has resulted in higher claims and an adverse effect on the profitability of that business.
A significant number of our long-term care insurance policies have experienced higher persistency than we had originally assumed, which has resulted in higher claims and an adverse effect on profitability.
Being able to access and use the medical information (including the results of genetic and diagnostic testing) known to our prospective policyholders is important to ensure that an underwriting risk assessment matches the anticipated risk priced into our life and long-term care insurance products, as well as our annuity products.
Being able to access and use the medical information (including the results of genetic research, diagnostic testing and artificial intelligence methodologies) known to our prospective policyholders is important to ensure that an underwriting risk assessment matches the anticipated risk priced into our life and long-term care insurance products, as well as our annuity products.
Among other things, the amendments to the PSPAs limit the number of certain mortgages the GSEs may acquire with two or more prescribed risk factors, including certain mortgages with combined loan-to-value ratios above 90%.
Among other 51 Table of Contents things, the amendments to the PSPAs limit the number of certain mortgages the GSEs may acquire with two or more prescribed risk factors, including certain mortgages with combined loan-to-value ratios above 90%.
Those competitors may establish pricing terms and business practices that may be influenced by motives such as advancing social housing policy or stabilizing the mortgage lending industry, which may not be consistent with maximizing return on capital or other profitability measures.
Those competitors may establish pricing terms and business practices that may be influenced by 61 Table of Contents motives such as advancing social housing policy or stabilizing the mortgage lending industry, which may not be consistent with maximizing return on capital or other profitability measures.
Our employees, distribution partners and other vendors use portable computers or mobile devices which may contain similar information to that in our computer systems, and these devices have been and can be lost, stolen or damaged, and therefore subject to the same risks as our other computer systems.
Our employees, distribution partners and other vendors use portable computers or mobile devices which may contain similar information to that in our computer 57 Table of Contents systems, and these devices have been and can be lost, stolen or damaged, and therefore subject to the same risks as our other computer systems.
At this time, we cannot predict the outcome of this work, whether any state will adopt the amended MGI Model or any of its specific provisions, the effect changes, if any, will have on the mortgage guaranty insurance market generally, or on our business specifically, the additional costs associated with compliance with any such changes, or any changes to our operations that may be necessary to comply, any of which could have a material adverse effect on our business, results of operations and financial condition.
At this time, we cannot predict which states, if any, will adopt the amended MGI Model Act or any of its specific provisions, the effect changes will have on the mortgage guaranty insurance market generally, or on our business specifically, the additional costs associated with compliance with any such changes, or any changes to our operations that may be necessary to comply, any of which could have a material adverse effect on our business, results of operations and financial condition.
In addition, the impact of inflation on claims could be more pronounced for our long-term care insurance business than our other businesses given the “long tail” nature of this business.
For example, the impact of inflation on claims could be more pronounced for our long-term care insurance business than our other businesses given the “long tail” nature of this business.
If any GSE reform is adopted, whether through legislation or administrative action, it could impact the current role of private mortgage insurance as a credit enhancement, including its reduction or elimination, which would have an adverse effect on our revenue, business, financial condition and results of operations.
The adoption of any GSE reform, whether through legislation or administrative action, could impact the current role of private mortgage insurance as a credit enhancement, including its reduction or elimination, which would have an adverse effect on our business, revenue, results of operations and financial condition.
In the absence of legislation, the FHFA continues to move forward on administrative reform efforts to prepare the GSEs for the end of 62 Table of Contents conservatorship, once fully and adequately capitalized.
In the absence of legislation, the FHFA continues to move forward on administrative reform efforts to prepare the GSEs for the end of conservatorship, once fully and adequately capitalized.
Additionally, compliance with PMIERs requires Enact Holdings to seek the GSEs’ prior approval before taking many actions, including implementing certain new products or services or entering into inter-company agreements among others. PMIERs’ prior approval requirements could prohibit, materially modify or delay our intended course of action.
Additionally, compliance with PMIERs requires Enact Holdings to seek the GSEs’ prior approval before taking many actions, including implementing certain new products or services or entering into intercompany agreements among others. PMIERs’ approval requirements could prohibit, materially modify or delay Enact Holdings’ intended course of action.
If Enact is unable to continue to meet the requirements mandated by PMIERs, the GSE restrictions discussed above or any additional restrictions imposed by the GSEs, whether because the GSEs amend them or the GSEs’ interpretation of the financial requirements requires Enact to hold amounts of capital that are higher than planned or otherwise, Enact may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.
If Enact is unable to continue to meet the requirements mandated by PMIERs or the GSEs, whether because the GSEs amend them or the GSEs’ interpretation of the financial requirements requires Enact to hold amounts of capital that are higher than planned or otherwise, Enact may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.
Genworth Financial and Genworth Holdings each act as a holding company for their respective subsidiaries and do not have business operations of their own. Dividends from their respective subsidiaries, permitted payments to them under tax sharing and expense reimbursement arrangements with their subsidiaries and proceeds from borrowings are their principal sources of cash to meet their obligations.
Genworth Financial and Genworth Holdings each act as a holding company and do not have business operations of their own. Dividends from Enact Holdings and its subsidiaries, permitted payments to Genworth Financial and Genworth Holdings under tax sharing and expense reimbursement arrangements with their subsidiaries and proceeds from borrowings are their principal sources of cash to meet their obligations.
Factors that tend to reduce the length of time our mortgage insurance remains in-force include: • declining interest rates, which may result in the refinancing of the mortgages underlying the insurance policies with new mortgage loans that may not require mortgage insurance or that Enact Holdings does not insure; • customer concentration levels with certain customers that actively market refinancing opportunities to their existing borrowers; • significant appreciation in the value of homes, which causes the unpaid balance of the mortgage to decrease below 80% of the value of the home and enables the borrower to request cancellation of the mortgage insurance; and • changes in mortgage insurance cancellation requirements or procedures under applicable federal law or mortgage insurance cancellation practices by mortgage lenders and investors.
Factors that tend to reduce the length of time our mortgage insurance remains in-force include: • declining interest rates, which may result in the refinancing of the mortgages underlying the insurance policies with new mortgage loans that may not require mortgage insurance or that Enact Holdings does not insure; • customer concentration levels with certain customers that actively market refinancing opportunities to their existing borrowers; 60 Table of Contents • significant appreciation in the value of homes, which causes the unpaid balance of the mortgage to decrease below 80% of the value of the home and enables the borrower to request cancellation of the mortgage insurance; and • changes in mortgage insurance cancellation requirements or procedures of the GSEs or under applicable law.
The amounts of such increases may be significant, and this could materially adversely affect our results of operations and financial condition. Small changes in assumptions or small deviations of actual experience from assumptions can have, and in the past have had, material impacts on our reserves, results of operations and financial condition. U.S.
The amounts of such increases to reserves and charges to earnings may be significant, and this could materially adversely affect our results of operations and financial condition. Small changes in assumptions or small deviations of actual experience from assumptions can have, and in the past have had, material impacts on our reserves, results of operations and financial condition.
We are subject to the risk that the issuers or guarantors of investment securities we own may default on principal or interest payments they owe us. As of December 31, 2022, fixed maturity securities of $46.6 billion in our investment portfolio represented 77% of our total cash, cash equivalents and invested assets.
We are subject to the risk that the issuers or guarantors of investment securities we own may default on principal or interest payments they owe us. As of December 31, 2023, fixed maturity securities of $46.8 billion in our investment portfolio represented 75% of our total cash, cash equivalents and invested assets.
Since 2013, we have seen, and may continue to see, an increase in our benefit costs as policies with reinsurance coverage exhaust their benefits or terminate and policies which are not covered by reinsurance go on claim. Over time, there can be no assurance that affordable, or any, reinsurance will continue to be available.
Since 2013, we have seen, and may continue to see, an increase in our benefit costs as policies with reinsurance coverage exhaust their benefits or terminate and policies which are not covered by reinsurance go on claim. Over time, affordable or any reinsurance may not continue to be available.
Any compromise of the security of our computer systems or those of our partners and third-party service providers that results in the unauthorized disclosure of customer personal information could damage our reputation in the marketplace, deter people from purchasing our products, subject us to significant civil and criminal liability and require us to incur significant technical, legal and other expenses.
Any compromise of the security of our computer systems or those of our partners and third-party service providers that results in the unauthorized disclosure of customer personal information, like the one involving PBI and MOVEit discussed above, could damage our reputation in the marketplace, deter people from purchasing our products, subject us to significant civil and criminal liability and require us to incur significant technical, legal and other expenses.
For example, our U.S. life insurance subsidiaries’ low financial strength ratings may reduce the availability of certain types of reinsurance and make it more costly when it is available, as reinsurers are less willing to take on credit risk in a volatile market.
For example, our U.S. life insurance subsidiaries’ low financial strength ratings may reduce the availability of certain types of reinsurance and have made it more costly when it is available, as reinsurers have been less willing to take on credit risk in the volatile market.
If we conclude that our reserves are insufficient to cover actual or expected policy and contract benefits and claim payments as a result of changes in experience, assumptions or otherwise, we would be required to increase our reserves and incur charges in the period in which we make the determination.
If we conclude that our reserves are insufficient to cover actual or expected policy and contract benefits and claim payments as a result of changes in experience, assumptions or otherwise, we would be required to increase our reserves and record a charge through earnings in the period in which we make the determination.
We employ models to, among other uses, price products, calculate reserves (including in connection with loss recognition testing), value assets, make investment decisions and generate projections used to estimate future pre-tax income, as well as to evaluate risk, determine internal capital requirements and perform stress testing.
We employ models to, among other uses, price products, calculate reserves, value assets, make investment decisions and generate projections used to estimate future pre-tax income, as well as to evaluate risk, determine internal capital requirements and perform stress testing.
Moreover, if Genworth Financial or Genworth Holdings did not receive sufficient funds from their respective subsidiaries to fund their obligations, they may be forced to raise cash through unfavorable arrangements or terms, including but not limited to, the incurrence of debt (including convertible or exchangeable debt), the sale of assets or the issuance of equity.
Moreover, if Genworth Financial or Genworth Holdings do not receive sufficient cash to fund their obligations, they may be forced to raise cash through unfavorable arrangements or terms, including but not limited to, the incurrence of debt (including convertible or exchangeable debt), the sale of assets or the issuance of equity.
In addition, our ability to attract, recruit, retain and motivate current and prospective employees may be adversely impacted due to uncertainty and/or the company changing its strategic direction. Furthermore, as the future of work evolves and work arrangements, such as a remote work environment, become more flexible and commonplace, our ability to compete for qualified employees could be further challenged.
In addition, our ability to attract, recruit, retain and motivate current and prospective employees may be adversely impacted due to uncertainty and/or the Company changing its strategic direction. Furthermore, should work arrangements, such as remote work environments, become more flexible and commonplace, our ability to compete for qualified employees could be further challenged.
Delegated underwriting represented approximately 71% and 65% of Enact Holdings’ total new insurance written by loan count for the years ended December 31, 2022 and 2021, respectively.
Delegated underwriting represented approximately 70% and 71% of Enact Holdings’ total new insurance written by loan count for the years ended December 31, 2023 and 2022, respectively.
Medical advances, such as genetic research and diagnostic imaging, and related legislation could materially adversely affect the financial performance of our life insurance, long-term care insurance and annuity businesses. Genetic testing research and discovery is advancing at a rapid pace.
Medical advances, such as genetic research and diagnostic imaging, emerging new technology, including artificial intelligence and related legislation, could materially adversely affect the financial performance of our life insurance, long-term care insurance and annuity businesses. Genetic testing research and discovery is advancing at a rapid pace.
GAAP and asset adequacy testing of our statutory long-term care insurance reserves. 61 Table of Contents Although the terms of our long-term care insurance policies permit us to increase premiums under certain circumstances during the premium-paying period, these increases generally require regulatory approval, which can often take a long time to obtain and may not be obtained in all relevant jurisdictions or for the full amounts requested.
Although the terms of our long-term care insurance policies permit us to increase premiums under certain circumstances during the premium-paying period, these increases generally require regulatory approval, which can often take a long time to obtain and may not be obtained in all relevant jurisdictions or for the full amounts requested.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeGenworth has leased other office space in Richmond, Virginia to use as its interim headquarters until the new space is ready. These leases are included in the leasing agreements described above. Genworth plans to sell its campus facility in Richmond, Virginia and is currently evaluating bids on the property.
Biggest changeGenworth has leased and is currently renovating a 174,000 square foot facility in Richmond, Virginia for use as its new headquarters office. Genworth has leased 89,000 square feet of office space in Richmond, Virginia to use as its interim headquarters until the new space is ready.
In addition, Genworth leases office space of approximately 263,000 square feet and 11,000 square feet in Richmond and Lynchburg, Virginia, respectively, and another 66,000 square feet of office space in 4 locations throughout the United States. One of Genworth’s international subsidiaries leases office space in Mexico.
In addition, Genworth leases 11,000 square feet in Lynchburg, Virginia, and another 61,000 square feet of office space in four locations throughout the United States. One of Genworth’s international subsidiaries leases office space in Mexico.
Enact Holdings leases its headquarters facility in Raleigh, North Carolina, which consists of approximately 130,000 square feet, and also leases one other office space of approximately 2,000 square feet in Washington, D.C. Genworth continues to adapt to the changing corporate environment and the future of work.
Enact Holdings leases its headquarters facility in Raleigh, North Carolina, which consists of approximately 130,000 square feet, and also leases one other office space of approximately 2,000 square feet in Washington, D.C. Genworth has entered into a contract to sell its owned campus facility in Richmond, Virginia.
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As part of these efforts, Genworth considered options to redevelop its headquarters campus in Richmond, Virginia.
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The contract purchaser is conducting its due diligence as permitted under the contract. 65 Table of Contents
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Given the challenges associated with new construction in the current economic environment, including supply chain issues, the increased cost of building materials and potential delays inherent in the building process, Genworth decided to lease and renovate a 174,000 square foot facility in Richmond, Virginia for its new headquarters office.
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However, as of December 31, 2022, held-for-sale criteria was not met, and accordingly the assets continue to be classified as held-for-use. We continue to actively market the campus and expect to reach a final classification of the associated assets in the second half of 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder the program, share repurchases may be made at the Company’s discretion from time to time in open market transactions, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. The timing and number of shares repurchased under the program will depend on a variety of factors, including stock price, trading volume, and general business and market conditions.
Biggest changeOn July 31, 2023, Genworth Financial’s Board of Directors authorized an additional $350 million of share repurchases under the existing share repurchase program. Under the program, share repurchases may be made at the Company’s discretion from time to time in open market transactions, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans.
These factors will include, in addition to any other factors that may arise in the future, the receipt of dividends and/or other returns of capital from Enact Holdings, intercompany cash tax payments from operating subsidiaries, Genworth’s operating results and financial condition, the capital requirements of our subsidiaries, legal requirements, regulatory constraints, debt obligations of Genworth Holdings and Enact Holdings, our credit and financial strength ratings, the capital needs of our subsidiaries for future growth and other factors Genworth Financial’s Board of Directors deems relevant.
These factors will include, in addition to any other factors that may arise in the future, the receipt of dividends and/or other returns of capital from Enact Holdings, Genworth’s operating results and financial condition, the capital requirements of our subsidiaries, legal requirements, regulatory constraints, debt obligations of Genworth Holdings and Enact Holdings, our credit and financial strength ratings, the capital needs of our subsidiaries for future growth and other factors Genworth Financial’s Board of Directors deems relevant.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock Our Class A Common Stock is listed on the New York Stock Exchange under the symbol “GNW.” As of February 16, 2023, we had 276 holders of record of our Class A Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock Our Class A Common Stock is listed on the New York Stock Exchange under the symbol “GNW.” As of February 15, 2024, we had 272 holders of record of our Class A Common Stock.
Any amounts used for the purpose of returning capital to Genworth Financial’s shareholders, including share repurchases or dividends if a new dividend policy is ultimately approved, will be dependent on many factors.
In 2022, Genworth Financial’s Board of Directors approved a new share repurchase program. Any amounts used for the purpose of returning capital to Genworth Financial’s shareholders, including share repurchases or dividends if a new dividend policy is ultimately approved, will be dependent on many factors.
Issuer Purchases of Common Stock The following table sets forth information regarding Genworth Financial’s share repurchases during the three months ended December 31, 2022: (Dollar amounts in millions, except per share amounts) Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Approximate dollar amount of shares that may yet be purchased under the program (1) October 1, 2022 through October 31, 2022 6,274,166 $ 4.00 6,274,166 $ 291 November 1, 2022 through November 30, 2022 918,680 $ 4.73 918,680 $ 286 December 1, 2022 through December 31, 2022 — $ — — $ 286 Total 7,192,846 7,192,846 (1) On May 2, 2022, Genworth Financial’s Board of Directors authorized a share repurchase program under which Genworth Financial may repurchase up to $350 million of its outstanding Class A common stock.
Issuer Purchases of Common Stock The following table sets forth information regarding Genworth Financial’s share repurchases during the three months ended December 31, 2023: (Dollar amounts in millions, except per share amounts) Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Approximate dollar amount of shares that may yet be purchased under the program (1) October 1, 2023 through October 31, 2023 1,717,825 $ 5.82 1,717,825 $ 366 November 1, 2023 through November 30, 2023 2,581,077 $ 5.81 2,581,077 $ 351 December 1, 2023 through December 31, 2023 1,600,446 $ 6.14 1,600,446 $ 341 Total 5,899,348 5,899,348 (1) On May 2, 2022, Genworth Financial’s Board of Directors authorized a share repurchase program under which Genworth Financial could repurchase up to $350 million of its outstanding Class A common stock.
The authorization has no expiration date and may be modified, suspended or terminated at any time. For additional information on the share repurchase program, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”
For additional information on the share repurchase program, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”
The following graph compares the cumulative total stockholder return on our Class A Common Stock with the cumulative total stockholder return on the S&P 500 Stock Index, S&P 500 Insurance Index, S&P SmallCap 600 Index and S&P SmallCap 600 Insurance Index. 2017 2018 2019 2020 2021 2022 Genworth Financial, Inc. $ 100.00 $ 149.84 $ 141.48 $ 121.54 $ 130.23 $ 170.10 S&P 500 ® $ 100.00 $ 95.62 $ 125.72 $ 148.85 $ 191.58 $ 156.88 S&P 500 Insurance Index $ 100.00 $ 88.79 $ 114.88 $ 114.38 $ 151.12 $ 166.42 S&P SmallCap 600 Index $ 100.00 $ 91.52 $ 112.37 $ 125.05 $ 158.59 $ 133.06 S&P SmallCap 600 Insurance Index $ 100.00 $ 101.84 $ 117.00 $ 120.06 $ 126.08 $ 105.19 78 Table of Contents Dividends In November 2008, Genworth Financial’s Board of Directors suspended the payment of dividends to its shareholders and the repurchase of common stock under the Company’s stock repurchase program indefinitely.
The following graph compares the cumulative total stockholder return on our Class A Common Stock with the cumulative total stockholder return on the S&P 500 Stock Index, S&P 500 Insurance Index, S&P SmallCap 600 Index and S&P SmallCap 600 Insurance Index. 2018 2019 2020 2021 2022 2023 Genworth Financial, Inc. $ 100.00 $ 94.42 $ 81.12 $ 86.91 $ 113.52 $ 143.35 S&P 500 ® $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 S&P 500 Insurance Index $ 100.00 $ 129.38 $ 128.81 $ 170.19 $ 187.42 $ 204.78 S&P SmallCap 600 Index $ 100.00 $ 122.78 $ 136.64 $ 173.29 $ 145.39 $ 168.73 S&P SmallCap 600 Insurance Index $ 100.00 $ 114.89 $ 117.89 $ 123.81 $ 103.30 $ 112.17 67 Table of Contents Dividends In November 2008, Genworth Financial’s Board of Directors suspended the payment of dividends to its shareholders indefinitely.
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Given the significant improvement in the results of operations and financial position of Genworth Financial and its subsidiaries, and the $2.1 billion of debt reduction in 2021, Genworth Financial’s Board of Directors approved a new share repurchase program in 2022.
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The timing and number of future shares repurchased under the program will depend on a variety of factors, including Genworth Financial’s stock price and trading volume, and general business and market conditions, among other factors. The authorization has no expiration date and may be modified, suspended or terminated at any time.

Item 7. Management's Discussion & Analysis

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

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Biggest changeCorporate and Other Activities Results of operations The following table sets forth the results of operations relating to Corporate and Other activities for the periods indicated: Years ended December 31, Increase (decrease) and percentage change (Amounts in millions) 2022 2021 2020 2022 vs. 2021 Revenues: Premiums $ 6 $ 6 $ 7 $ — — % Net investment income 8 6 6 2 33 % Net investment gains (losses) (15 ) (7 ) 5 (8 ) (114 )% Policy fees and other income — 1 (2 ) (1 ) (100 )% Total revenues (1 ) 6 16 (7 ) (117 )% Benefits and expenses: Benefits and other changes in policy reserves — 1 4 (1 ) (100 )% Acquisition and operating expenses, net of deferrals 24 75 61 (51 ) (68 )% Amortization of deferred acquisition costs and intangibles — 2 1 (2 ) (100 )% Interest expense 54 109 172 (55 ) (50 )% Total benefits and expenses 78 187 238 (109 ) (58 )% Loss from continuing operations before income taxes (79 ) (181 ) (222 ) 102 56 % Benefit for income taxes (15 ) (53 ) (39 ) 38 72 % Loss from continuing operations (64 ) (128 ) (183 ) 64 50 % Adjustments to loss from continuing operations: Net investment (gains) losses 15 7 (5 ) 8 114 % Losses on early extinguishment of debt 6 45 5 (39 ) (87 )% Expenses related to restructuring — 14 2 (14 ) (100 )% Taxes on adjustments (5 ) (14 ) (1 ) 9 64 % Adjusted operating loss available to Genworth Financial Inc.’s common stockholders $ (48 ) $ (76 ) $ (182 ) $ 28 37 % 117 Table of Contents 2022 compared to 2021 Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders The adjusted operating loss decreased primarily related to lower interest expense, partially offset by tax benefits of $21 million in 2021 from a reduction in uncertain tax positions due to the expiration of certain statute of limitations that did not recur.
Biggest changeThe effective tax rate was 18.2% and 19.8% for the years ended December 31, 2022 and 2021, respectively. 103 Table of Contents Life and Annuities selected operating performance measures Life insurance The following table sets forth selected operating performance measures regarding our life insurance products as of the dates indicated: Years ended December 31, Increase (decrease) and percentage change (Amounts in millions) 2023 2022 2021 2023 vs. 2022 Term and whole life insurance Life insurance in-force, net of reinsurance $ 44,121 $ 48,162 $ 47,297 $ (4,041 ) (8)% Life insurance in-force, before reinsurance $ 270,950 $ 300,145 $ 332,793 $ (29,195 ) (10)% Term universal life insurance Life insurance in-force, net of reinsurance $ 90,427 $ 92,719 $ 99,471 $ (2,292 ) (2)% Life insurance in-force, before reinsurance $ 91,024 $ 93,336 $ 100,119 $ (2,312 ) (2)% Universal life insurance Life insurance in-force, net of reinsurance $ 28,710 $ 29,798 $ 31,117 $ (1,088 ) (4)% Life insurance in-force, before reinsurance $ 32,199 $ 33,622 $ 35,228 $ (1,423 ) (4)% The decrease in insurance in-force in our life insurance products reflects the continued runoff of our in-force blocks. 104 Table of Contents Corporate and Other Results of operations The following table sets forth the results of operations relating to Corporate and Other for the periods indicated: Years ended December 31, Increase (decrease) and percentage change (Amounts in millions) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Revenues: Premiums $ 9 $ 6 $ 6 $ 3 50% $ — — % Net investment income 19 8 7 11 138% 1 14% Net investment gains (losses) (28 ) (15 ) (7 ) (13 ) (87)% (8 ) (114)% Policy fees and other income (2 ) — 1 (2 ) NM (1) (1 ) (100)% Total revenues (2 ) (1 ) 7 (1 ) (100)% (8 ) (114)% Benefits and expenses: Benefits and other changes in policy reserves (9 ) (11 ) (6 ) 2 18% (5 ) (83)% Acquisition and operating expenses, net of deferrals 65 41 84 24 59% (43 ) (51)% Amortization of deferred acquisition costs and intangibles 1 — 2 1 NM (1) (2 ) (100)% Interest expense 66 54 109 12 22% (55 ) (50)% Total benefits and expenses 123 84 189 39 46% (105 ) (56)% Loss from continuing operations before income taxes (125 ) (85 ) (182 ) (40 ) (47)% 97 53% Benefit for income taxes (20 ) (16 ) (53 ) (4 ) (25)% 37 70% Loss from continuing operations (105 ) (69 ) (129 ) (36 ) (52)% 60 47% Adjustments to loss from continuing operations: Net investment (gains) losses 28 15 7 13 87% 8 114% (Gains) losses on early extinguishment of debt (2 ) 6 45 (8 ) (133)% (39 ) (87)% Expenses related to restructuring 4 1 14 3 NM (1) (13 ) (93)% Taxes on adjustments (6 ) (5 ) (13 ) (1 ) (20)% 8 62% Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders $ (81 ) $ (52 ) $ (76 ) $ (29 ) (56)% $ 24 32% (1) We define “NM” as not meaningful for increases or decreases greater than 200%. 2023 compared to 2022 Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders The adjusted operating loss increased primarily from higher expenses related to CareScout growth initiatives and higher interest expense attributable to Genworth Holdings’ junior subordinated notes, partially offset by higher net investment income in 2023.
Claim adjustment expenses include costs incurred in the claim settlement process such as legal fees and costs to record, process and adjust claims. Our liability for policy and contract claims is reviewed regularly, with changes in our estimates of future claims recorded through net income (loss).
Loss adjustment expenses include costs incurred in the claim settlement process such as legal fees and costs to record, process and adjust claims. Our liability for policy and contract claims is reviewed regularly, with changes in our estimates of future claims recorded through net income (loss).
Estimates for in-force rate actions reflect certain simplifying assumptions that may vary materially from actual historical results, including but not limited to, a uniform rate of coinsurance and premium taxes in addition to consistent policyholder behavior over time. Actual policyholder behavior may differ significantly from these assumptions.
Estimates for in-force rate actions reflect certain simplifying assumptions that may vary materially from actual results, including but not limited to consistent policyholder behavior over time in addition to a uniform rate of coinsurance and premium taxes. Actual policyholder behavior may differ significantly from these assumptions.
The liquidity requirements of our regulated insurance subsidiaries principally relate to the liabilities associated with their various insurance and investment products, operating costs and expenses, the payment of dividends to us, contributions to their subsidiaries, payment of principal and interest on their outstanding debt obligations and income taxes.
The liquidity requirements of our regulated insurance subsidiaries principally relate to the liabilities associated with their various insurance and investment products, operating costs and expenses, the payment of dividends to us, contributions to their subsidiaries, payments of principal and interest on their outstanding debt obligations and income taxes.
Under the program, share repurchases may be made at Genworth’s discretion from time to time in open market transactions, privately negotiated transactions, or by other means, including through 10b5-1 trading plans.
Under the program, share repurchases may be made at Genworth’s discretion from time to time in open market transactions, privately negotiated transactions, or by other means, including through Rule 10b5-1 trading plans.
Our liquidity at the holding company level is highly dependent on the performance of Enact Holdings and its ability to pay timely dividends and other forms of capital returns to Genworth Holdings as anticipated.
Therefore, our liquidity at the holding company level is highly dependent on the performance of Enact Holdings and its ability to pay timely dividends and other forms of capital returns to Genworth Holdings as anticipated.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included in “Item 8—Financial Statements and Supplementary Data.” Item 7 of our Annual Report on Form 10-K generally discusses year-to-year comparisons between the years ended December 31, 2022 and 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included in “Item 8—Financial Statements and Supplementary Data.” Item 7 of our Annual Report on Form 10-K generally discusses year-to-year comparisons between the years ended December 31, 2023 and 2022.
These costs and expenses are net of amounts that are capitalized and deferred, which are costs and expenses that are related directly to the successful acquisition of new or renewal insurance policies and investment contracts, such as first-year commissions in excess of ultimate renewal commissions and other policy issuance expenses. • Amortization of deferred acquisition costs and intangibles.
These costs and expenses are net of amounts that are capitalized and deferred, which are costs and expenses that are related directly to the successful acquisition of new or renewal insurance policies and investment contracts, such as first-year commissions in excess of ultimate renewal commissions and other policy issuance expenses.
Private mortgage insurance market penetration and overall market size are affected in part by actions that impact housing or housing finance policy taken by the GSEs and the U.S. government, including but not limited to, the FHA and the FHFA.
Regulatory developments Private mortgage insurance market penetration and overall market size are affected in part by actions that impact housing or housing finance policy taken by the GSEs and the U.S. government, including but not limited to, the FHA and the FHFA.
Enact’s PMIERs required assets as of December 31, 2022 and 2021 benefited from the application of a 0.30 multiplier applied to the risk-based required asset amount factor for certain non-performing loans.
Enact’s PMIERs required assets as of December 31, 2023 and 2022 benefited from the application of a 0.30 multiplier applied to the risk-based required asset amount factor for certain non-performing loans.
(2) Investment income for other invested assets includes amortization of terminated cash flow hedges, which have no corresponding book value within the yield calculation. 120 Table of Contents Yields are based on net investment income as reported under U.S. GAAP and are consistent with how we measure our investment performance for management purposes.
(2) Investment income for other invested assets includes amortization of terminated cash flow hedges, which have no corresponding book value within the yield calculation. Yields are based on net investment income as reported under U.S. GAAP and are consistent with how we measure our investment performance for management purposes.
As of December 31, 2022, approximately 7% of our investment holdings recorded at fair value was based on significant inputs that were not market observable and were classified as Level 3 measurements.
As of December 31, 2023, approximately 7% of our investment holdings recorded at fair value was based on significant inputs that were not market observable and were classified as Level 3 measurements.
When Enact receives notice of a delinquency, it uses its proprietary model to determine whether a delinquent loan is a candidate for a modification. When the model identifies such a candidate, Enact’s loan workout specialists prioritize cases for loss mitigation based upon the likelihood that the loan will result in a claim.
When Enact receives notice of a delinquency, it uses its proprietary model to determine whether a delinquent loan is a candidate for a modification. When the model identifies such a candidate, Enact’s loan workout 89 Table of Contents specialists prioritize cases for loss mitigation based upon the likelihood that the loan will result in a claim.
Because these assumptions relate to factors that are not known in advance, change over time, are difficult to accurately predict and are inherently uncertain, we cannot determine with precision the ultimate amounts we will pay for actual claims or the timing of those payments.
Because these assumptions relate to factors that are not known in advance, change over time, are difficult to accurately predict and are inherently uncertain, Enact cannot determine with precision the ultimate amounts it will pay for actual claims or the timing of those payments.
We believe this insurance subsidiary has adequate reserves to cover its underlying obligations. Genworth Holdings provided an unlimited guarantee for the benefit of policyholders for the payment of valid claims by our European mortgage insurance subsidiary prior to its sale in May 2016.
We believe this insurance subsidiary has adequate reserves to cover its underlying obligations. 124 Table of Contents Genworth Holdings provided an unlimited guarantee for the benefit of policyholders for the payment of valid claims by our European mortgage insurance subsidiary prior to its sale in May 2016.
For our 2022 assumption updates, we generally did not include data after 2019 in setting any long-term assumptions, as we do not yet have sufficient information around longer term effects of the pandemic, which is consistent with the approach for our 2021 assumptions.
For our 2023 assumption updates, we generally did not include data after 2019 in setting any long-term assumptions, as we do not have sufficient information around longer-term effects of the pandemic, which is consistent with the approach for our 2022 assumptions.
Genworth—holding company liquidity In consideration of our liquidity, it is important to separate the needs of our holding companies from the needs of their respective subsidiaries. Genworth Financial and Genworth Holdings each act as a holding 139 Table of Contents company for their respective subsidiaries and do not have any significant operations of their own.
Genworth—holding company liquidity In consideration of our liquidity, it is important to separate the needs of our holding companies from the needs of their respective subsidiaries. Genworth Financial and Genworth Holdings each act as a holding company for their respective subsidiaries and do not have any significant operations of their own.
For example, widening credit spreads will generally result in a decrease, while tightening of credit spreads will generally result in an increase, in the fair value of our fixed maturity securities. As well, during periods of increasing interest rates, the market values of lower-yielding assets will decline.
For example, widening credit spreads will generally result in a decrease, while tightening credit spreads will generally result in an increase, in the fair value of our fixed maturity securities. Additionally, during periods of increasing interest rates, the market values of lower-yielding assets will decline.
We may from time to time seek to repurchase or redeem outstanding notes for cash (with cash on hand, proceeds from the issuance of new debt and/or the proceeds from asset or stock sales) in open market purchases, tender offers, privately negotiated transactions or otherwise.
We may also from time to time seek to repurchase or redeem outstanding debt (with cash on hand, proceeds from the issuance of new debt and/or the proceeds from asset or stock sales) in open market purchases, tender offers, privately negotiated transactions or otherwise.
However, for GMWB embedded derivatives, fixed index annuity embedded derivatives and indexed universal life embedded derivatives, the change between periods is best illustrated by the number of policies.
However, for fixed indexed annuity and indexed universal life embedded derivatives, the change between periods is best illustrated by the number of policies.
We believe Genworth Holdings’ unrestricted cash, cash equivalents and liquid assets provide sufficient liquidity to meet its financial obligations over the next twelve months.
We believe Genworth Holdings’ unrestricted cash and cash equivalents provide sufficient liquidity to meet its financial obligations over the next twelve months.
Given the maximum length of forbearance plans, the resolution of a delinquency in a plan may not be known for several quarters. Enact continues to monitor regulatory and government actions and the resolution of forbearance delinquencies.
Given the maximum length of forbearance plans, the resolution of a delinquency in a plan still may not be known for several quarters or longer. Enact continues to monitor regulatory and government actions and the resolution of forbearance delinquencies.
For a discussion of certain risks associated with our liquidity and dependency on dividends paid by Enact Holdings, see “Item 1A—Risk Factors—Genworth Financial and Genworth Holdings depend on the ability of their respective subsidiaries to pay dividends and make other payments and distributions to each of them and to meet their obligations,” and “—Risk Factors—Our sources of capital have become more limited, and under certain conditions we may need to seek additional capital on unfavorable terms.” These risks may be exacerbated by the economic impact of current elevated interest rates and the affordability of homes.
For a discussion of certain risks associated with our liquidity and dependency on dividends paid by Enact Holdings, see “Item 1A—Risk Factors—Genworth Financial and Genworth Holdings depend on the ability of Enact Holdings and its subsidiaries to pay dividends and make other payments and distributions to each of them and to meet their obligations,” and “Item 1A—Risk Factors—Our sources of capital have become more limited, and under certain conditions we may need to seek additional capital on unfavorable terms.” These risks may be exacerbated by the economic impact of current elevated interest rates and overall housing trends.
Enact segment Trends and conditions Results of our Enact segment are affected primarily by the following factors: competitor actions; unemployment or underemployment levels; other economic and housing market trends, including interest rates, home prices, the number of first-time homebuyers, and mortgage origination volume mix and practices; the levels and aging of mortgage delinquencies; the effect of seasonal variations; the inventory of unsold homes; loan modification and other servicing efforts; and litigation, among other items.
Enact segment Trends and conditions Results of our Enact segment are affected primarily by the following factors: competitor actions; unemployment or underemployment levels; other economic and housing market trends, including interest rates, home prices, the number of first-time homebuyers, and mortgage origination volume mix and practices; the size of the overall private mortgage insurance market and the effect of regulatory actions thereon; the levels and aging of mortgage delinquencies; the effect of seasonal variations; the inventory of unsold homes; loan modification and other servicing efforts; and litigation, among other items.
EMICO’s ongoing risk-to-capital ratio will depend principally on the magnitude of future losses incurred by EMICO, the effectiveness of ongoing loss mitigation activities, new business volume and profitability, the amount of policy lapses and the amount of additional capital that is generated or distributed by the business.
EMICO’s ongoing risk-to-capital ratio will depend principally on the magnitude of future losses incurred by EMICO, the effectiveness of ongoing loss mitigation activities, new business volume and profitability, the impact of quota share reinsurance, the amount of policy lapses and the amount of additional capital that is generated or distributed by the business.
Because obtaining actuarially justified rate increases and associated benefit reductions is important to our ability to pay future claims, we will consider litigation against states that decline to approve those actuarially 106 Table of Contents justified rate increases. In January 2022, we began litigation with two states that have refused to approve actuarially justified rate increases.
Because obtaining actuarially justified rate increases and associated benefit reductions is important to our ability to pay future claims, we will consider litigation against states that decline to approve those actuarially justified rate increases. In January 2022, we began litigation with two states that have refused to approve actuarially justified rate increases.
Derivatives As of December 31, 2022, $1.4 billion notional of our derivatives portfolio was cleared through the Chicago Mercantile Exchange (“CME”). The customer swap agreements that govern our cleared derivatives contain provisions that enable our clearing agents to request initial margin in excess of CME requirements.
Derivatives • As of December 31, 2023, $1.3 billion notional of our derivatives portfolio was cleared through the Chicago Mercantile Exchange (“CME”). • The customer swap agreements that govern our cleared derivatives contain provisions that enable our clearing agents to request initial margin in excess of CME requirements.
Based on estimated statutory results as of December 31, 2022, in accordance with applicable dividend restrictions, Enact Holdings’ U.S. mortgage insurance subsidiaries could pay dividends from unassigned surplus of approximately $292 million in 2023 without affirmative regulatory approval.
Based on estimated statutory results as of December 31, 2023, in accordance with applicable dividend restrictions, Enact Holdings’ U.S. mortgage insurance subsidiaries could pay dividends from unassigned surplus of approximately $336 million in 2024 without affirmative regulatory approval.
Small changes in assumptions or small deviations of actual experience from assumptions can have, and in the past have had, material impacts on our reserve levels, results of operations and financial condition.
Even small changes in assumptions or small deviations of actual experience from assumptions could have, and in the past have had, material impacts on our reserve levels, results of operations and financial condition.
The application of the 0.30 multiplier to all eligible delinquencies provided $132 million and $390 million of benefit to Enact’s PMIERs required assets as of December 31, 2022 and 2021, respectively. These amounts are gross of any incremental reinsurance benefit from the elimination of the 0.30 multiplier.
The application of the 0.30 multiplier to all eligible delinquencies provided $73 million and $132 million of benefit to Enact’s PMIERs required assets as of December 31, 2023 and 2022, respectively. These amounts are gross of any incremental reinsurance benefit from the elimination of the 0.30 multiplier.
Pre-foreclosure sales, acquisitions and other early workout and claim administration actions help to reduce overall claim severity. Enact’s average primary mortgage insurance claim severity was 94%, 103% and 106% for the years ended December 31, 2022, 2021 and 2020, respectively.
Pre-foreclosure sales, acquisitions and other early workout and claim administration actions help to reduce overall claim severity. Enact’s average primary mortgage insurance claim severity was 97%, 94% and 103% for the years ended December 31, 2023, 2022 and 2021, respectively.
EMICO’s risk-to-capital ratio under the current regulatory framework as established under North Carolina law and enforced by the NCDOI, EMICO’s domestic insurance regulator, was approximately 12.9:1 as of December 31, 2022 compared with a risk-to-capital ratio of 12.3:1 as of December 31, 2021. EMICO’s risk-to-capital ratio remains below the NCDOI’s maximum risk-to-capital ratio of 25:1.
Capital requirements As of December 31, 2023, EMICO’s risk-to-capital ratio under the current regulatory framework as established under North Carolina law and enforced by the NCDOI, EMICO’s domestic insurance regulator, was approximately 11.6:1, compared with a risk-to-capital ratio of 12.9:1 as of December 31, 2022. EMICO’s risk-to-capital ratio remains below the NCDOI’s maximum risk-to-capital ratio of 25:1.
We will continue to monitor our experience and assumptions closely and make changes to our assumptions and methodologies, as appropriate, for our U.S. life insurance products.
We will continue to monitor our experience and assumptions closely and make changes to our assumptions and methodologies, as appropriate, for our life insurance and annuity products.
The average claim severity for the year ended December 31, 2022 was impacted by low claim volumes and lifetime home price appreciation. The average claim severities do not include the effects of agreements on non-performing loans. U.S.
The average claim severity for the years ended December 31, 2023 and 2022 was impacted by low claim volumes and lifetime home price appreciation. The average claim severities do not include the effects of agreements on non-performing loans.
Our valuation techniques maximize the use of observable inputs. However, for certain less liquid securities, categorized as Level 3, the valuation inputs and assumptions cannot be corroborated with observable market data and require greater estimation, resulting in values that are less certain.
However, for certain less liquid securities, categorized as Level 3, the valuation inputs and assumptions cannot be corroborated with observable market data and require greater estimation, resulting in values that are less certain.
The availability of additional capital resources will depend on a variety of factors such as market conditions, regulatory considerations, the general availability of credit, credit ratings and the performance of and outlook for Enact Holdings and the payment of dividends therefrom.
The availability of additional capital resources will depend on a variety of factors such as market 122 Table of Contents conditions, regulatory considerations, the general availability of credit, credit ratings and the performance of and outlook for Enact Holdings and the payment of dividends and other returns of capital therefrom.
Genworth Financial’s U.S. life insurance subsidiaries offer long-term care insurance and also manage in-force blocks of life insurance and annuity products which are no longer sold. We report our business results through three operating business segments: Enact; U.S. Life Insurance; and Runoff. We also have Corporate and Other activities. Our U.S.
Genworth Financial’s U.S. life insurance subsidiaries offer long-term care insurance and also manage in-force blocks of life insurance and annuity products which are no longer sold. We report our business results through three operating business segments: Enact; Long-Term Care Insurance; and Life and Annuities.
Genworth Financial and certain of its holding companies also provide guarantees to third parties for the performance of certain obligations of their subsidiaries. We estimate that our potential obligations under such guarantees were $69 million and $10 million as of December 31, 2022 and 2021, respectively.
Genworth Financial and certain of its holding company subsidiaries also provide guarantees to third parties for the performance of certain obligations of their subsidiaries. We estimate that our potential obligations under such guarantees were $67 million and $69 million as of December 31, 2023 and 2022, respectively.
Loss and expense ratios The following table sets forth the loss and expense ratios for Enact for the dates indicated: Years ended December 31, Increase (decrease) 2022 2021 2020 2022 vs. 2021 Loss ratio (10 )% 13 % 39 % (23 )% Expense ratio 25 % 25 % 23 % — % The loss ratio is the ratio of benefits and other changes in policy reserves to net earned premiums.
Loss and expense ratios The following table sets forth the loss and expense ratios for Enact for the dates indicated: Years ended December 31, Increase (decrease) 2023 2022 2021 2023 vs. 2022 Loss ratio 3 % (10 )% 13 % 13 % Expense ratio 23 % 25 % 25 % (2 )% 85 Table of Contents The loss ratio is the ratio of benefits and other changes in policy reserves to net earned premiums.
Management regularly monitors and reports insurance in-force and risk in-force for our Enact segment. Insurance in-force is a measure of the aggregate unpaid principal balance as of the respective reporting date for loans insured by our U.S. mortgage insurance subsidiaries. Risk in-force is based on the coverage percentage applied to the estimated current outstanding loan balance.
Insurance in-force is a measure of the aggregate unpaid principal balance as of the respective reporting date for loans insured by our U.S. mortgage insurance subsidiaries. Risk in-force is based on the coverage percentage applied to the estimated current outstanding loan balance.
For loans insured on or after October 1, 2014, Enact’s mortgage insurance policies limit the number of months of unpaid interest and associated expenses that are included in the mortgage insurance claim amount to a maximum of 36 months. New primary delinquencies in 2022 increased compared to 2021.
For loans insured on or after October 1, 2014, Enact’s mortgage insurance policies limit the number of months of unpaid interest and associated expenses that are included in the mortgage insurance claim amount to a maximum of 36 months. New primary delinquencies in 2023 increased compared to 2022 primarily due to the aging of large, new books of business.
Also, average claim reserves for new claims are trending higher over time as the mix of claims continues to evolve, with an increasing number of policies with higher daily benefit amounts and higher inflation factors going on claim.
For example, average claim reserves for new claims have trended higher over time as the mix of claims continues to evolve, with an increasing number of policies with higher daily benefit amounts and higher inflation factors going on claim.
As of December 31, 2022, 6% of our total fixed maturity securities related to Level 3 private fixed maturities valued using internal pricing models.
As of December 31, 2023, 6% of our total fixed maturity securities related to Level 3 fixed maturity securities valued using internal pricing models.
Moreover, we may not be able to mitigate the impact of unexpected adverse experience by increasing premiums and/or other charges to policyholders (where we have the right to do so) or by offering benefit reductions as an alternative to increasing premiums.
Moreover, for our long-term care insurance products, we may not be able to mitigate the impact of unexpected adverse experience by increasing premiums and/or other charges to policyholders (where we have the right to do so) or by offering benefit reductions as an alternative to increasing premiums.
While the associated risks have moderated and delinquencies have declined, it is possible that COVID-19 related forbearance programs could have an adverse impact on Enact’s future results of operations and financial condition.
While the associated risks have moderated and delinquencies related to COVID-19 have declined, it is possible that ancillary economic effects of COVID-19 could have an adverse impact on Enact’s future results of operations and financial condition.
Net earned premiums decreased in 2022 compared to 2021 primarily from the lapse of older, higher priced policies and from lower single premium policy cancellations, partially offset by insurance in-force growth in 2022.
Net earned premiums increased in 2023 compared to 2022 primarily driven by insurance in-force growth, partially offset by the lapse of older, higher priced policies and lower single premium policy cancellations in 2023.
Benefits and expenses Acquisition and operating expenses, net of deferrals, decreased mainly driven by $24 million of lower make-whole premiums on the early redemption of Genworth Holdings’ senior notes and $15 million of lower net losses related to the repurchase of Genworth Holdings’ senior notes in 2022, as well as $14 million of restructuring costs in 2021 that did not recur.
Acquisition and operating expenses, net of deferrals, decreased mainly driven by $24 million of lower make-whole premiums on the early redemption of Genworth Holdings’ senior notes and $15 million of lower net losses related to the repurchase of Genworth Holdings’ senior notes in 2022, as well as $13 million of lower restructuring costs.
Net income from continuing operations attributable to noncontrolling interests represents the portion of income from continuing operations in a subsidiary attributable to third parties. The effective tax rates disclosed herein are calculated using whole numbers. As a result, the percentages shown may differ from an effective tax rate calculated using rounded numbers.
The effective tax rates disclosed herein are calculated using whole numbers. As a result, the percentages shown may differ from an effective tax rate calculated using rounded numbers. • Net income from continuing operations attributable to noncontrolling interests.
The increase in persistency was primarily driven by a decline in the percentage of in-force policies with mortgage rates above current interest rates and offset the decline in new insurance written in 2022, leading to an increase in insurance in-force of $21.7 billion during 2022.
The increase in persistency was primarily driven by a decline in the percentage of in-force policies with mortgage rates above current mortgage rates and offset the decline in new insurance written in 2023, contributing to an increase in insurance in-force of $14.7 billion during 2023.
Percent of primary risk in-force as of December 31, 2022 Percent of direct primary case reserves as of December 31, 2022 (1) Delinquency rate as of December 31, 2022 2021 2020 By State: California 12 % 10 % 2.09 % 3.17 % 6.20 % Texas 8 % 7 % 2.12 % 2.89 % 5.82 % Florida (2) 8 % 8 % 2.54 % 2.97 % 6.92 % New York (2) 5 % 13 % 2.95 % 3.80 % 6.92 % Illinois (2) 5 % 6 % 2.54 % 3.09 % 5.21 % Arizona 4 % 2 % 1.78 % 2.31 % 4.54 % Michigan 4 % 3 % 1.79 % 1.87 % 2.93 % North Carolina 3 % 3 % 1.59 % 2.18 % 3.84 % Georgia 3 % 3 % 2.23 % 2.94 % 5.89 % Washington 3 % 3 % 1.92 % 2.98 % 5.37 % (1) Direct primary case reserves exclude loss adjustment expenses, pool, IBNR and reinsurance reserves.
Percent of primary risk in-force as of December 31, 2023 Percent of direct primary case reserves as of December 31, 2023 (1) Delinquency rate as of December 31, 2023 2022 2021 By State: California 13 % 12 % 2.22 % 2.09 % 3.17 % Texas 8 % 8 % 2.22 % 2.12 % 2.89 % Florida (2) 8 % 9 % 2.39 % 2.54 % 2.97 % New York (2) 5 % 12 % 3.05 % 2.95 % 3.80 % Illinois (2) 4 % 6 % 2.61 % 2.54 % 3.09 % Arizona 4 % 3 % 1.93 % 1.78 % 2.31 % Michigan 4 % 3 % 1.94 % 1.79 % 1.87 % Georgia 3 % 4 % 2.23 % 2.23 % 2.94 % North Carolina 3 % 2 % 1.56 % 1.59 % 2.18 % Washington 3 % 2 % 1.77 % 1.92 % 2.98 % (1) Direct primary case reserves exclude loss adjustment expenses, pool, IBNR and reinsurance reserves.
Genworth Financial has the right to appoint a majority of directors to the board of directors of Enact Holdings; however, actions taken by Enact Holdings and its board of directors (including in the case of the payment of dividends to us, the approval of Enact Holdings’ independent capital committee) are subject to and may be limited by the interests of Enact Holdings, including but not limited to, its use of capital for growth opportunities and regulatory requirements.
Genworth Financial has the right to appoint a majority of directors to the board of directors of Enact Holdings; however, actions taken by Enact Holdings and its board of directors are subject to and may be limited by the interests of Enact Holdings, including but not limited to, its use of capital for growth opportunities and regulatory requirements.
Interest expense decreased largely driven by the early redemption and repurchase of Genworth Holdings’ senior notes due in September 2021, August 2023 and February 2024, partially offset by a higher floating rate of interest on Genworth Holdings’ junior subordinated notes in 2022.
These decreases were partially offset by higher expenses related to CareScout growth initiatives in 2022. Interest expense decreased largely driven by the early redemption and repurchase of Genworth Holdings’ senior notes due in September 2021, August 2023 and February 2024, partially offset by a higher floating rate of interest on Genworth Holdings’ junior subordinated notes in 2022.
Even small changes in assumptions or small deviations of actual experience from assumptions can have, and in the past have had, material impacts on our DAC amortization, reserve levels, results of operations and financial condition.
Even small changes in assumptions or small deviations of actual experience from assumptions could have, and in the 97 Table of Contents past have had, material impacts on our reserve levels, results of operations and financial condition.
The fee reductions went into effect in the fourth quarter of 2022 while the new fees on cash-out refinance loans began February 1, 2023. Enact expects these price changes to have a net positive impact to the private mortgage insurance market.
The fee reductions went into effect in the fourth quarter of 2022 while the new fees on cash-out refinance loans began February 1, 2023. Enact has seen a limited impact from these price changes on the private mortgage insurance market.
We are also required to establish additional benefit reserves for guarantees or product features in addition to the contract value where the additional benefit reserves are calculated by applying a benefit ratio to accumulated contractholder assessments, and then deducting accumulated paid claims.
We are also required to establish additional benefit reserves for guarantees or product 116 Table of Contents features in addition to the contract value where the additional benefit reserves are calculated by applying a benefit ratio to accumulated contractholder assessments, and then deducting accumulated paid claims, commonly referred to as the additional insurance liability.
The methodologies, estimates and assumptions used in valuing our fixed maturity securities evolve over time and are subject to different interpretations, all of which can lead to materially different estimates of fair value.
Valuation of fixed maturity securities. Our portfolio of fixed maturity securities comprises primarily investment grade securities, which are carried at fair value. The methodologies, estimates and assumptions used in valuing our fixed maturity securities evolve over time and are subject to different interpretations, all of which can lead to materially different estimates of fair value.
Runoff segment Trends and conditions Results of our Runoff segment are affected primarily by investment performance, interest rate levels, net interest spreads, equity market conditions, mortality, surrenders and scheduled maturities. In addition, the results of our Runoff segment can significantly impact our regulatory capital requirements, distributable earnings and liquidity.
Variable annuities Results of our variable annuity products are affected primarily by investment performance, interest rate levels, the slope of the interest rate yield curve, net interest spreads, equity market conditions, mortality, surrenders and scheduled maturities. In addition, the results of our variable annuity products can significantly impact our regulatory capital requirements, distributable earnings and liquidity.
Supplemental Condensed Consolidating Financial Information Genworth Financial provides a full and unconditional guarantee to the trustee of Genworth Holdings’ outstanding senior and subordinated notes and the holders of the senior and subordinated notes, on an unsecured unsubordinated and subordinated basis, respectively, of the full and punctual payment of the principal of, premium, if any, and interest on, and all other amounts payable under, the outstanding senior and subordinated notes, and the full and punctual payment of all other amounts payable by Genworth Holdings under the senior and subordinated notes indentures in respect of such senior and subordinated notes.
Genworth Financial provides a full and unconditional guarantee to the trustee and holders of Genworth Holdings’ outstanding senior and subordinated notes, on an unsecured unsubordinated and subordinated basis, respectively, of the full and punctual payment of the principal of, premium, if any and interest on, and all other amounts payable under, the outstanding senior and subordinated notes and their respective indentures.
As an insurance business, we typically generate positive cash flows from operating activities, as premiums collected from our insurance products and income received from our investments typically exceed policy acquisition costs, benefits paid, redemptions and operating expenses. Our cash flows from operating activities are affected by the timing of premiums, fees and investment income received and benefits and expenses paid.
As an insurance business, we typically generate positive cash flows from operating activities, as premiums collected from our insurance products and income received from our investments typically exceed policy acquisition costs, benefits and claims paid, redemptions and operating expenses.
Policy fees and other income consists primarily of fees assessed against policyholder and contractholder account values, surrender charges, cost of insurance assessed on universal and term universal life insurance policies, advisory and administration service fees assessed on investment contractholder account values, broker/dealer commission revenues, fee revenue from contract underwriting services and other fees.
Policy fees and other income consists primarily of fees assessed against policyholder and contractholder account values, surrender charges, cost of insurance assessed on universal and term universal life insurance policies, advisory and administration service fees assessed on investment contractholder account values, broker/dealer commission revenues, fee revenue from contract underwriting services and other fees. 69 Table of Contents Our expenses consist primarily of the following: • Benefits and other changes in policy reserves.
We define adjusted operating income (loss) as income (loss) from continuing operations excluding the after-tax effects of income (loss) from continuing operations attributable to noncontrolling interests, net investment gains (losses), gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items.
We define adjusted operating income (loss) as income (loss) from continuing operations excluding the after-tax effects of income (loss) from continuing operations attributable to noncontrolling interests, net investment gains (losses), changes in fair value of market risk benefits and associated hedges, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, restructuring costs and infrequent or unusual non-operating items.
While we expect renewal premiums to decline over time, the settlements could accelerate that decline if policyholders continue to elect non-forfeiture and reduced benefit options, which have predominantly been the most prevalent policyholder elections for these legal settlements.
While we expect renewal premiums to decline over time, the settlements could accelerate that decline if policyholders continue to elect non-forfeiture and reduced benefit options, which have predominantly been the most prevalent policyholder elections for these legal settlements and which entitle the policyholder to reduced benefits in exchange for premiums already paid or a lower level of future premiums.
We also recorded $35 million of net unrealized losses on equity securities during 2022 driven by unfavorable equity market performance. 121 Table of Contents Investment portfolio The following table sets forth our cash, cash equivalents and invested assets as of December 31: 2022 2021 (Amounts in millions) Carrying value % of total Carrying value % of total Available-for-sale fixed maturity securities: Public $ 31,757 53 % $ 42,501 58 % Private 14,826 24 17,979 24 Equity securities 319 1 198 — Commercial mortgage loans, net 7,010 11 6,830 9 Policy loans 2,139 3 2,050 3 Limited partnerships 2,331 4 1,900 3 Other invested assets 566 1 820 1 Cash, cash equivalents and restricted cash 1,799 3 1,571 2 Total cash, cash equivalents and invested assets $ 60,747 100 % $ 73,849 100 % For a discussion of the change in cash, cash equivalents and invested assets, see the comparison for this line item under “—Consolidated Balance Sheets.” See note 4 to our consolidated financial statements under “Item 8—Financial Statements and Supplementary Data” for additional information related to our investment portfolio.
We also recorded $35 million of net unrealized losses on equity securities during 2022 driven by unfavorable equity market performance. 109 Table of Contents Investment portfolio The following table sets forth our cash, cash equivalents and invested assets as of December 31: 2023 2022 (Amounts in millions) Carrying value % of total Carrying value % of total Available-for-sale fixed maturity securities: Public $ 32,189 51 % $ 31,757 53 % Private 14,592 24 14,826 24 Equity securities 396 1 319 1 Commercial mortgage loans, net 6,802 10 7,010 11 Policy loans 2,220 4 2,139 3 Limited partnerships 2,821 5 2,331 4 Other invested assets 731 1 566 1 Cash, cash equivalents and restricted cash 2,215 4 1,799 3 Total cash, cash equivalents and invested assets $ 61,966 100 % $ 60,747 100 % For a discussion of the change in cash, cash equivalents and invested assets, see the comparison for these line items under “—Consolidated Balance Sheets.” See note 5 to our consolidated financial statements under “Item 8—Financial Statements and Supplementary Data” for additional information related to our investment portfolio.
The primary uses of funds at Genworth Financial and Genworth Holdings include payment of principal, interest and other expenses on current and any future borrowings or other obligations (including payments to AXA associated with a settlement agreement reported as discontinued operations, payment of holding company general operating expenses (including employee benefits and taxes), payments under current and any future guarantees (including guarantees of certain subsidiary obligations), payment of amounts previously owed to GE under the Tax Matters Agreement, payments to subsidiaries (and, in the case of Genworth Holdings, to Genworth Financial) under tax sharing agreements, contributions to subsidiaries, repurchases of debt securities, repurchases of Genworth Financial’s common stock and, in the case of Genworth Holdings, loans, dividends or other distributions to Genworth Financial.
The primary uses of funds at Genworth Financial and Genworth Holdings include payments of principal, interest and other expenses on borrowings or other obligations, payment of holding company general operating expenses (including employee benefits and taxes), payments under guarantees (including guarantees of certain subsidiary obligations), payments to subsidiaries (and, in the case of Genworth Holdings, to Genworth Financial) under tax sharing agreements, contributions to subsidiaries, repurchases of debt securities, repurchases of Genworth Financial’s common stock and, in the case of Genworth Holdings, loans, dividends or other distributions to Genworth Financial.
Net investment income represents the income earned on our investments. For discussion of the change in net investment income, see the comparison for this line item under “—Investments and Derivative Instruments.” • Net investment gains (losses).
Net investment gains (losses) . For a discussion of the change in net investment gains (losses), see the comparison for this line item under “—Investments and Derivative Instruments.” Policy fees and other income.
Use of non-GAAP measures Reconciliation of net income (loss) to adjusted operating income (loss) We use non-GAAP financial measures entitled “adjusted operating income (loss)” and “adjusted operating income (loss) per share.” Adjusted operating income (loss) per share is derived from adjusted operating income (loss).
Use of non-GAAP measures Reconciliation of net income (loss) to adjusted operating income (loss) Management uses non-GAAP financial measures entitled “adjusted operating income (loss)” and “adjusted operating income (loss) per share” to evaluate performance and allocate resources. Adjusted operating income (loss) per share is derived from adjusted operating income (loss).
Long-term care insurance The long-term profitability of our long-term care insurance business depends upon how our actual experience compares with our valuation assumptions, including but not limited to morbidity, mortality and persistency.
Long-Term Care Insurance segment Trends and conditions The long-term profitability of our long-term care insurance business depends upon how our actual experience compares with our valuation assumptions, including but not limited to in-force rate actions, 90 Table of Contents morbidity, mortality and persistency.
Although the business performance and financial results of our principal U.S. life insurance subsidiaries have improved significantly, as of December 31, 2022, they had negative unassigned surplus of approximately $849 million under statutory accounting and as a result, we do not expect these subsidiaries to pay dividends for the foreseeable future.
As of December 31, 2023, our principal U.S. life insurance subsidiaries had negative unassigned surplus of approximately $563 million under statutory accounting, and as a result, we do not expect these subsidiaries to pay dividends for the foreseeable future.
Sales refer to new insurance written for mortgage insurance products included in our Enact segment. We consider new insurance written to be a measure of our Enact segment’s operating performance because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of revenues or profitability during that period.
We consider new insurance written to be a measure of our Enact segment’s operating performance because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of revenues or profitability during that period. Management also regularly monitors and reports insurance in-force and risk in-force for our Enact segment.
In addition, we have reached certain legal settlements regarding alleged disclosure deficiencies in premium increases for long-term care insurance policies. The first legal settlement related to certain of our long-term care insurance policies, which represents approximately 20% of our block, was implemented beginning in 2021 and its implementation was materially completed in the second quarter of 2022.
The first legal settlement related to certain of our long-term care insurance policies, which represents approximately 20% of our block, was implemented beginning in 2021 and its implementation was materially completed in the second quarter of 2022.
New primary delinquencies of 35,996 contributed $171 million of loss expense in 2022, while Enact incurred $144 million of losses from 32,624 new primary delinquencies in 2021. In determining the loss expense estimate, considerations were given to forbearance and non-forbearance delinquencies, recent cure and claim experience and the prevailing and prospective economic conditions.
New primary delinquencies of 41,617 contributed $265 million of loss expense in 2023, while Enact incurred $171 million of losses from 35,996 new primary delinquencies in 2022. In determining the loss expense estimate, considerations were given to recent cure and claim experience and the prevailing and 81 Table of Contents prospective economic conditions.
In considering the potential sensitivity of the factors underlying Enact Holdings’ best estimate of its mortgage insurance reserves for losses, it is possible that even a relatively small change in estimated delinquency-to-claim rate (“frequency”) or a relatively small percentage change in estimated claim amount (“severity”) could have a significant impact on reserves and, correspondingly, on results of operations.
In considering the potential sensitivity of the factors underlying Enact’s best estimate of its mortgage insurance reserves, it is possible that even a relatively small change in the estimated claim or severity rate could have a significant impact on loss reserves and, correspondingly, on our results of operations.
Although new claim counts on our older long-term care insurance blocks of business will continue to decrease as the blocks run off, we are gaining more experience on our larger new blocks of business and expect continued growth in new claims on these blocks as policyholders reach older attained ages with higher likelihood of going on claim.
Although new claim counts on our oldest long-term care insurance blocks of business will continue to decrease as the blocks run off, we are gaining more experience on our larger new blocks of business and fully expect continued overall growth in new claims as policyholders reach their peak claim years.
See note 12 in our consolidated financial statements under “Item 8—Financial Statements and Supplementary Data” for additional details. Total equity .
See note 2 in our consolidated financial statements under “Item 8—Financial Statements and Supplementary Data” for additional information.
This price reduction is expected to have a negative impact on the U.S. private mortgage insurance market but will be partially offset by the effects of the recent FHFA pricing changes referenced above. Enact does not expect the net impact to be material. The U.S. private mortgage insurance industry is highly competitive.
This price reduction, which went into effect on March 20, 2023, is expected to have a negative impact on the U.S. private mortgage insurance market but will be partially offset by the effects of the recent FHFA pricing changes referenced above. Enact does not believe this net impact has been or will be material.
Genworth Financial’s and Genworth Holdings’ principal sources of cash are derived from dividends from their respective subsidiaries, subsidiary payments to them under tax sharing and expense reimbursement arrangements and proceeds from borrowings or securities issuances.
Genworth Financial’s and Genworth Holdings’ principal sources of cash are derived from dividends and other returns of capital from Enact Holdings. Additional sources of cash have included subsidiary payments to them under tax sharing and expense reimbursement arrangements and proceeds from borrowings or securities issuances.
Executive Summary of Consolidated Financial Results Below is an executive summary of our consolidated financial results for the periods indicated. Amounts included within this “Executive Summary of Consolidated Financial Results” are net of taxes, unless otherwise indicated. After-tax amounts assume a tax rate of 21%.
Amounts included within this “Executive Summary of Consolidated Financial Results” are net of taxes, unless otherwise indicated. After-tax amounts assume a tax rate of 21%.
The expense ratio is the ratio of general expenses to net earned premiums. In Enact, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. 2022 compared to 2021 The loss ratio decreased largely from net favorable reserve adjustments of $268 million, as discussed above, partially offset by higher new delinquencies in 2022.
The expense ratio is the ratio of general expenses to net earned premiums. Enact’s general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. 2023 compared to 2022 The loss ratio increased largely from higher losses on new delinquencies and lower favorable reserve adjustments in 2023, as discussed above.
Our investments in privately placed fixed maturity securities, commercial mortgage loans, policy loans, bank loans, limited partnership investments and select mortgage-backed and asset-backed securities are relatively illiquid. These asset classes represented approximately 44% of the carrying value of our total cash, cash equivalents and invested assets as of December 31, 2022.
As of December 31, 2023, our total cash, cash equivalents and invested assets were $62.0 billion. Our investments in privately placed fixed maturity securities, commercial mortgage loans, policy loans, bank loans, limited partnership investments and select mortgage-backed and asset-backed securities are relatively illiquid.
However, Enact Holdings may not pay dividends in 2023 at this level as they may need to retain capital for regulatory purposes and preserve capital for future growth or to meet capital requirements.
However, Enact Holdings may choose not to pay dividends in 2024 at this level as it may retain capital for future growth or to meet regulatory or other capital requirements.

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