NMI HOLDINGS, INC. – 10-Q – Management’s Discussion and Analysis of Financial Condition and Results of Operations – InsuranceNewsNet

The following analysis should be read in conjunction with our unaudited
condensed consolidated financial statements and the notes thereto included in
this report and our audited financial statements, notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in our 2021 10-K, for a more complete understanding of our
financial position and results of operations. In addition, investors should
review the "Cautionary Note Regarding Forward-Looking Statements" above and the
"Risk Factors" detailed in Part II, Item 1A of this report and in Part I, Item
1A of our 2021 10-K, as subsequently updated in other reports we file with the
SEC, for a discussion of those risks and uncertainties that have the potential
to affect our business, financial condition, results of operations, cash flows
or prospects in a material and adverse manner. Our results of operations for
interim periods are not necessarily indicative of results to be expected for a
full fiscal year or for any other period.

Insight

We provide private MI through our primary insurance subsidiary, NMIC. NMIC is a
wholly-owned, domiciled in Wisconsin and principally regulated by the Wisconsin
OCI. NMIC is approved as an MI provider by the GSEs and is licensed to write
coverage in all 50 states and D.C. Our subsidiary, NMIS, provides outsourced
loan review services to mortgage loan originators and our subsidiary, Re One,
historically provided reinsurance coverage to NMIC in accordance with certain
statutory risk retention requirements. Such requirements have been repealed and
the reinsurance coverage provided by Re One to NMIC has been commuted. Re One
remains a wholly-owned, licensed insurance subsidiary; however, it does not
currently have active insurance exposures.

MI protects lenders and investors from default-related losses on a portion of
the unpaid principal balance of a covered mortgage. MI plays a critical role in
the U.S. housing market by mitigating mortgage credit risk and facilitating the
secondary market sale of high-loan-to-value (LTV) (i.e., above 80%) residential
loans to the GSEs, who are otherwise restricted by their charters from
purchasing or guaranteeing high-LTV mortgages that are not covered by certain
credit protections. Such credit protection and secondary market sales allow
lenders to increase their capacity for mortgage commitments and expand financing
access to existing and prospective homeowners.

NMIH, a Delaware corporation, was incorporated in May 2011, and we began
start-up operations in 2012 and wrote our first MI policy in 2013. Since
formation, we have sought to establish customer relationships with a broad group
of mortgage lenders and build a diversified, high-quality insured portfolio. As
of June 30, 2022, we had issued master policies with 1,812 customers, including
national and regional mortgage banks, money center banks, credit unions,
community banks, builder-owned mortgage lenders, internet-sourced lenders and
other non-bank lenders. As of June 30, 2022, we had $168.6 billion of primary
insurance-in-force (IIF) and $43.3 billion of primary risk-in-force (RIF).

We believe that our success in acquiring a large and diverse group of lender
customers and growing a portfolio of high-quality IIF traces to our founding
principles, whereby we aim to help qualified individuals achieve their
homeownership goals, ensure that we remain a strong and credible counter-party,
deliver a high-quality customer service experience, establish a differentiated
risk management approach that emphasizes the individual underwriting review or
validation of the vast majority of the loans we insure, utilizing our
proprietary Rate GPS® pricing platform to dynamically evaluate risk and price
our policies, and foster a culture of collaboration and excellence that helps us
attract and retain experienced industry leaders.

Our strategy is to continue to build on our position in the private MI market,
expand our customer base and grow our insured portfolio of high-quality
residential loans by focusing on long-term customer relationships, disciplined
and proactive risk selection and pricing, fair and transparent claim payment
practices, responsive customer service, and financial strength and

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profitability.

Our common stock trades on the Nasdaq under the symbol "NMIH." Our headquarters
is located in Emeryville, California. As of June 30, 2022, we had 246 employees.
Our corporate website is located at www.nationalmi.com. Our website and the
information contained on or accessible through our website are not incorporated
by reference into this report.

We discuss below our results of operations for the periods presented, as well as
the conditions and trends that have impacted or are expected to impact our
business, including new insurance writings, the composition of our insurance
portfolio and other factors that we expect to impact our results.

Conditions and trends affecting our business

COVID-19 and other developments

On January 30, 2020, the World Health Organization (WHO) declared the outbreak
of COVID-19 a global health emergency and subsequently characterized the
outbreak as a global pandemic on March 11, 2020. In an effort to stem contagion
and control the spread of the virus, the population at large severely curtailed
day-to-day activity and local, state and federal regulators imposed a broad set
of restrictions on personal and business conduct nationwide. The COVID-19
pandemic, along with the widespread public and regulatory response, caused a
dramatic slowdown in U.S. and global economic activity.

The global dislocation caused by COVID-19 was unprecedented and the pandemic had
a direct impact on the U.S. housing market, private mortgage insurance industry,
and our business and operating performance for an extended period. More
recently, however, the acute economic impact of COVID-19 has begun to recede.
While the pandemic continues to pose a global risk and affect communities across
the U.S., it is no longer the single dominant driver of our performance that it
had been in earlier periods. COVID-19 is now one of several mosaic factors,
including a range of macroeconomic forces and public policy initiatives that are
influencing our market and business.

Although we are optimistic that the nationwide COVID-19 vaccination effort and
other medical advances will continue to support a normalization of personal and
business activity, the path of the virus remains unknown and subject to risk.
Given this uncertainty, we are not able to fully assess or estimate the impact
the pandemic may have on the mortgage insurance market, our business performance
or our financial position at this time, and it remains possible COVID-19 could
again trigger more severe and adverse outcomes in future periods. It is also
possible that emerging macroeconomic factors, including persistent inflation,
flagging consumer confidence and increasing jobless claims could have a
pronounced impact on the housing market, the mortgage insurance industry and our
business in future periods.

Key Factors Affecting Our Results

New Insurance Purchased (NIW), Insurance in Force and Risk in Force

NIW is the aggregate unpaid principal balance of mortgages underpinning new
policies written during a given period. Our NIW is affected by the overall size
of the mortgage origination market and the volume of high-LTV mortgage
originations. Our NIW is also affected by the percentage of such high-LTV
originations covered by private versus government MI or other alternative credit
enhancement structures and our share of the private MI market. NIW, together
with persistency, drives our IIF. IIF is the aggregate unpaid principal balance
of the mortgages we insure, as reported to us by servicers at a given date, and
represents the sum total of NIW from all prior periods less principal payments
on insured mortgages and policy cancellations (including for prepayment,
nonpayment of premiums, coverage rescission and claim payments). RIF is related
to IIF and represents the aggregate amount of coverage we provide on all
outstanding policies at a given date. RIF is calculated as the sum total of the
coverage percentage of each individual policy in our portfolio applied to the
unpaid principal balance of such insured mortgage. RIF is affected by IIF and
the LTV profile of our insured mortgages, with lower LTV loans generally having
a lower coverage percentage and higher LTV loans having a higher coverage
percentage. Gross RIF represents RIF before consideration of reinsurance. Net
RIF is gross RIF net of ceded reinsurance.

Net premiums written and net premiums earned

We set our premium rates on individual policies based on the risk
characteristics of the underlying mortgage loans and borrowers, and in
accordance with our filed rates and applicable rating rules. On June 4, 2018, we
introduced a proprietary risk-based pricing platform, which we refer to as Rate
GPS. Rate GPS considers a broad range of individual variables, including
property type, type of loan product, borrower credit characteristics, and lender
and market factors, and provides us with the ability to set and charge premium
rates commensurate with the underlying risk of each loan that we insure. We
introduced Rate GPS in June 2018 to replace our previous rate card pricing
system. While most of our new business is priced through Rate GPS, we also

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continue to offer a pricing option to a limited number of lenders
clients who require a rate card for operational reasons. We believe the
the introduction and use of Rate GPS gives us a more granular view and
analytical approach to risk assessment and pricing, and that this approach
enhances our ability to continue to build high quality mortgage insurance
portfolio and offering attractive risk-adjusted returns.

Premiums are generally fixed for the duration of our coverage of the underlying
loans. Net premiums written are equal to gross premiums written minus ceded
premiums written under our reinsurance arrangements, less premium refunds and
premium write-offs. As a result, net premiums written are generally influenced
by:

•NIW;

• premium rates and combination of premium payment types, which are either unique,
monthly or annual premiums, as described below;

•cancellation rates of our insurance policies, which are impacted by payments or
prepayments on mortgages, refinancings (which are affected by prevailing
mortgage interest rates as compared to interest rates on loans underpinning our
in force policies), levels of claim payments and home prices; and

•assignment of premiums under third-party reinsurance contracts.

Premiums are paid either by the borrower (BPMI) or the lender (LPMI) in a single
payment at origination (single premium), on a monthly installment basis (monthly
premium) or on an annual installment basis (annual premium). Our net premiums
written will differ from our net premiums earned due to policy payment type. For
single premiums, we receive a single premium payment at origination, which is
earned over the estimated life of the policy. Substantially all of our single
premium policies in force as of June 30, 2022 were non-refundable under most
cancellation scenarios. If non-refundable single premium policies are canceled,
we immediately recognize the remaining unearned premium balances as earned
premium revenue. Monthly premiums are recognized in the month billed and when
the coverage is effective. Annual premiums are earned on a straight-line basis
over the year of coverage. Substantially all of our policies provide for either
single or monthly premiums.

The percentage of IIF that remains on our books after any twelve-month period is
defined as our persistency rate. Because our insurance premiums are earned over
the life of a policy, higher persistency rates can have a significant impact on
our net premiums earned and profitability. Generally, faster speeds of mortgage
prepayment lead to lower persistency. Prepayment speeds and the relative mix of
business between single and monthly premium policies also impact our
profitability. Our premium rates include certain assumptions regarding repayment
or prepayment speeds of the mortgages underlying our policies. Because premiums
are paid at origination on single premium policies and our single premium
policies are generally non-refundable on cancellation, assuming all other
factors remain constant, if single premium loans are prepaid earlier than
expected, our profitability on these loans is likely to increase and, if loans
are repaid slower than expected, our profitability on these loans is likely to
decrease. By contrast, if monthly premium loans are repaid earlier than
anticipated, we do not earn any more premium with respect to those loans and,
unless we replace the repaid monthly premium loan with a new loan at the same
premium rate or higher, our revenue is likely to decline.

Effect of reinsurance on our results

We utilize third-party reinsurance to actively manage our risk, ensure
compliance with PMIERs, state regulatory and other applicable capital
requirements, and support the growth of our business. We currently have both
quota share and excess-of-loss reinsurance agreements in place, which impact our
results of operations and regulatory capital and PMIERs asset positions. Under a
quota share reinsurance agreement, the reinsurer receives a premium in exchange
for covering an agreed-upon portion of incurred losses. Such a quota share
arrangement reduces premiums written and earned and also reduces RIF, providing
capital relief to the ceding insurance company and reducing incurred claims in
accordance with the terms of the reinsurance agreement. In addition, reinsurers
typically pay ceding commissions as part of quota share transactions, which
offset the ceding company's acquisition and underwriting expenses. Certain quota
share agreements include profit commissions that are earned based on loss
performance and serve to reduce ceded premiums. Under an excess-of-loss
agreement, the ceding insurer is typically responsible for losses up to an
agreed-upon threshold and the reinsurer then provides coverage in excess of such
threshold up to a maximum agreed-upon limit. We expect to continue to evaluate
reinsurance opportunities in the normal course of business.

Quota share reinsurance

NMIC is a party to five active quota share reinsurance treaties - the 2016 QSR
Transaction, effective September 1, 2016, the 2018 QSR Transaction, effective
January 1, 2018, the 2020 QSR Transaction, effective April 1, 2020, the 2021 QSR
Transaction, effective January 1, 2021, and the 2022 QSR Transaction, effective
October 1, 2021 - which we refer to collectively

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as the QSR Transactions. Under each of the QSR Transactions, NMIC cedes a
proportional share of its risk on eligible policies written during a discrete
period to panels of third-party reinsurance providers. Each of the third-party
reinsurance providers has an insurer financial strength rating of A- or better
by Standard & Poor's Rating Service (S&P), A.M. Best Company, Inc. (A.M. Best)
or both.

Under the terms of the 2016 QSR Transaction, NMIC cedes premiums written related
to 25% of the risk on eligible primary policies written for all periods through
December 31, 2017 and 100% of the risk under our pool agreement with Fannie Mae,
in exchange for reimbursement of ceded claims and claim expenses on covered
policies, a 20% ceding commission, and a profit commission of up to 60% that
varies directly and inversely with ceded claims.

Under the terms of the 2018 QSR Transaction, NMIC cedes premiums earned related
to 25% of the risk on eligible policies written in 2018 and 20% of the risk on
eligible policies written in 2019, in exchange for reimbursement of ceded claims
and claim expenses on covered policies, a 20% ceding commission, and a profit
commission of up to 61% that varies directly and inversely with ceded claims.

Under the terms of the 2020 QSR Transaction, NMIC cedes premiums earned related
to 21% of the risk on eligible policies written from April 1, 2020 through
December 31, 2020, in exchange for reimbursement of ceded claims and claim
expenses on covered policies, a 20% ceding commission, and a profit commission
of up to 50% that varies directly and inversely with ceded claims.

Under the terms of the 2021 QSR Transaction, NMIC cedes premiums earned related
to 22.5% of the risk on eligible policies written in 2021 (subject to an
aggregate risk written limit which was exhausted on October 30, 2021), in
exchange for reimbursement of ceded claims and claim expenses on covered
policies, a 20% ceding commission, and a profit commission of up to 57.5% that
varies directly and inversely with ceded claims.

Under the terms of the 2022 QSR Transaction, NMIC cedes premiums earned related
to 20% of the risk on eligible policies written between October 30, 2021 and
December 31, 2022, in exchange for reimbursement of ceded claims and claims
expenses on covered policies, a 20% ceding commission, and a profit commission
of up to 62% that varies directly and inversely with ceded claims.

In connection with the 2022 QSR Transaction, NMIC entered into an additional
back-to-back quota share agreement that is scheduled to incept on January 1,
2023 (the 2023 QSR Transaction). Under the terms of the 2023 QSR Transactions,
NMIC will cede premiums earned related to 20% of the risk on eligible policies
written in 2023, in exchange for reimbursement of ceded claims and claim
expenses on covered policies, a 20% ceding commission, and a profit commission
of up to 62% that varies directly and inversely with ceded claims.

NMIC may elect to terminate its engagement with individual reinsurers on a
run-off basis (i.e., reinsurers continue providing coverage on all risk ceded
prior to the termination date, with no new cessions going forward) or cut-off
basis (i.e., the reinsurance arrangement is completely terminated with NMIC
recapturing all previously ceded risk) under certain circumstances. Such
selective termination rights arise when, among other reasons, a reinsurer
experiences a deterioration in its capital position below a prescribed threshold
and/or a reinsurer breaches (and fails to cure) its collateral posting
obligations under the relevant agreement.

Effective April 1, 2019, NMIC elected to terminate its engagement with one
reinsurer under the 2016 QSR Transaction on a cut-off basis. In connection with
the termination, NMIC recaptured approximately $500 million of previously ceded
primary RIF and stopped ceding new premiums written with respect to the
recaptured risk. With this termination, ceded premiums written under the 2016
QSR Transaction decreased from 25% to 20.5% on eligible policies. The
termination had no effect on the cession of pool risk under the 2016 QSR
Transaction.

Excess of loss reinsurance

Excess of loss reinsurance transactions of insurance-linked notes

NMIC is party to reinsurance agreements with the Oaktown Re Vehicles that
provide it with aggregate excess-of-loss reinsurance coverage on defined
portfolios of mortgage insurance policies. Under each agreement, NMIC retains a
first layer of aggregate loss exposure on covered policies and the respective
Oaktown Re Vehicle then provides second layer loss protection up to a defined
reinsurance coverage amount. NMIC then retains losses in excess of the
respective reinsurance coverage amounts.

The respective reinsurance coverage amounts provided by the Oaktown Re Vehicles
decrease over a ten-year period as the underlying insured mortgages are
amortized or repaid, and/or the mortgage insurance coverage is canceled (except
the coverage provided by Oaktown Re VI Ltd. and Oaktown Re VII Ltd., which
decreases over a 12.5-year period). As the

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reinsurance coverage decreases, a prescribed amount of collateral held in trust
by the Oaktown Re Vehicles is distributed to ILN Transaction note-holders as
amortization of the outstanding insurance-linked note principal balances. The
outstanding reinsurance coverage amounts stop amortizing, and the collateral
distribution to ILN Transaction note-holders and amortization of
insurance-linked note principal is suspended if certain credit enhancement or
delinquency thresholds, as defined in each agreement, are triggered (each, a
Lock-Out Event). As of June 30, 2022, the 2018 and 2019 ILN Transactions were
deemed to be in Lock Out due to the default experience of the underlying
reference pools for each respective transaction and the 2021-2 ILN Transaction
was deemed to be in Lock Out in connection with the initial build of its target
credit enhancement level. As such, the amortization of reinsurance coverage, and
distribution of collateral assets and amortization of insurance-linked notes was
suspended for each ILN Transaction. The amortization of reinsurance coverage,
distribution of collateral assets and amortization of insurance-linked notes
issued in connection with the 2018, 2019 and 2021-2 ILN Transactions will remain
suspended for the duration of the Lock-Out Event for each respective ILN
Transaction, and during such period assets will be preserved in the applicable
reinsurance trust account to collateralize the excess-of-loss reinsurance
coverage provided to NMIC.

NMIC holds optional termination rights under each ILN Transaction, including,
among others, an optional call feature which provides NMIC the discretion to
terminate the transaction on or after a prescribed date, and a clean-up call if
the outstanding reinsurance coverage amount amortizes to 10% or less of the
reinsurance coverage amount at inception or if NMIC reasonably determines that
changes to GSE or rating agency asset requirements would cause a material and
adverse effect on the capital treatment afforded to NMIC under a given
agreement. In addition, there are certain events that trigger mandatory
termination of an agreement, including NMIC's failure to pay premiums or consent
to reductions in a trust account to make principal payments to note-holders,
among others.

Effective March 25, 2022 and April 25, 2022, NMIC exercised its optional
clean-up call to terminate the 2017 and 2020-1 ILN Transactions, respectively.
In connection with the termination of each respective transaction, NMIC's excess
of loss reinsurance agreements with Oaktown Re Ltd. and Oaktown Re IV Ltd. were
commuted and the insurance-linked notes issued by Oaktown Re Ltd. and Oaktown Re
IV Ltd. were redeemed in full with a distribution of remaining collateral
assets.

The following table presents the date of creation, the production period covered,
current reinsurance coverage amount, first layer current retained aggregate loss
and details of the overcollateralization level under each current ILN
Transaction. The current amounts are presented in June 30, 2022.

                                                        2018 ILN       2019 ILN           2020-2 ILN       2021-1 ILN       2021-2 ILN
($ values in thousands)                               Transaction     

Transaction Transaction Transaction Transaction
Creation date

                                       July 25, 2018   July 

30, 2019 October 29, 2020 April 27, 2021 October 26, 2021
Production covered

                                     1/1/2017 -     

01/06/2018 – 01/04/202001/10/2020 – 01/04/2021

                                                       5/31/2018       

06/30/2019 09/30/2020 (1) 03/31/2021 (2) 09/30/2021 (3)

Current ceded RIF                                    $  962,103     $  

1,074,965 $3,902,234 $7,435,648 $7,315,453

Current first layer retained loss                       122,327          122,489             121,177          163,665          146,204
Current reinsurance coverage                            158,489          231,877             127,409          339,756          363,596
Eligible coverage                                    $  280,816     $    

354 366 $248,586 $503,421 $509,800
Subordinate coverage (4)

                                 29.19   %        32.97  %             6.25  %          6.75  %          6.97  %

PMIERs charge on ceded RIF                                 7.81   %         7.51  %             5.38  %          6.08  %          6.57  %
Overcollateralization (5) (6)                        $  158,489     $    231,877       $      38,806    $      51,389    $      28,978

Delinquency Trigger (7)                                        4.0%            4.0%              4.7  %           5.1  %           5.2  %


(1)   Approximately 1% of the production covered by the 2020-2 ILN Transaction
has coverage reporting dates between July 1, 2019 and March 31, 2020.
(2)  Approximately 1% of the production covered by the 2021-1 ILN Transaction
has coverage reporting dates between July 1, 2019 and September 30, 2020.
(3)  Approximately 2% of the production covered by the 2021-2 ILN Transaction
has coverage reporting dates between July 1, 2019 and March 31, 2021.
(4)   Absent a delinquency trigger, the subordinated coverage is capped at
6.25%, 6.75% and 7.45% for the 2020-2, 2021-1 and 2021-2 ILN Transactions,
respectively.
(5)  Overcollateralization for each of the 2018 and 2019 ILN Transactions is
equal to their current reinsurance coverage as the PMIERs required asset amount
on RIF ceded under each transaction is currently below its remaining first layer
retained loss.
(6)  May not be replicated based on the rounded figures presented in the table.
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(7)  Delinquency triggers for the 2018 and 2019 ILN Transactions are set at a
fixed 4.0% and assessed on a discrete monthly basis; delinquency triggers for
the 2020-2, 2021-1 and 2021-2 ILN Transactions are equal to seventy-five percent
of the subordinated coverage level and assessed on the basis of a three-month
rolling average.

Traditional excess of loss reinsurance operation

Effective April 1, 2022, NMIC secured $289.7 million of aggregate excess-of-loss
reinsurance coverage at inception on a defined portfolio of mortgage insurance
policies primarily written between October 1, 2021, and March 31, 2022 from a
broad panel of highly rated reinsurers (the 2022-1 XOL Transaction). Under the
agreement, NMIC retains $133.4 million of first layer aggregate loss exposure on
covered policies, of which all remained as of June 30, 2022, and the reinsurers
then provide second layer loss protection up to a defined reinsurance coverage
amount. The reinsurance coverage amount decreases from $289.7 million at
inception over a ten-year period as the PMIERs minimum required assets of the
underlying covered mortgages declines and was $286.6 million as of June 30,
2022. NMIC retains losses in excess of the outstanding reinsurance coverage
amount.

NMIC holds optional termination rights under the 2022-1 XOL Transaction,
including, among others, an option to terminate the transaction on or after
April 1, 2027 at its discretion. NMIC may also elect to terminate the
transaction at any point if the outstanding reinsurance coverage amount
amortizes to 10% or less of the reinsurance coverage amount provided at
inception, or if it determines that it will no longer be able to take full
PMIERs asset credit for the coverage. Additionally, under the terms of the
treaty, NMIC may selectively terminate its engagement with individual reinsurers
under certain circumstances. Such selective termination rights arise when, among
other reasons, a reinsurer experiences a deterioration in its capital position
below a prescribed threshold, and/or a reinsurer breaches (and fails to cure)
its collateral posting obligation.

Each of the third-party reinsurance providers that is party to the 2022-1 XOL
Transaction has an insurer financial strength rating of A- or better by S&P,
A.M. Best or both.

See Item 1, "Financial Statements - Notes to Condensed Consolidated Financial
Statements - Note 5, Reinsurance" for further discussion of these third-party
reinsurance arrangements.

Portfolio Data

The following table presents primary and pool NIW and IIF as of the dates and
for the periods indicated. Unless otherwise noted, the tables below do not
include the effects of our third-party reinsurance arrangements described above.

Primary and pool IIF and
NIW                                       As of and for the three months ended                                For the six months ended
                                   June 30, 2022                         June 30, 2021                 June 30, 2022           June 30, 2021
                               IIF                 NIW               IIF                NIW                             NIW
                                                                             (In Millions)
Monthly                   $   148,488          $ 15,695          $ 117,629          $ 19,422          $      28,789          $       43,186
Single                         20,151               916             18,969             3,329                  1,987                   5,962
Primary                       168,639            16,611            136,598            22,751                 30,776                  49,148

Pool                            1,114                 -              1,460                 -                      -                       -
Total                     $   169,753          $ 16,611          $ 138,058          $ 22,751          $      30,776          $       49,148



NIW for the three and six months ended June 30, 2022 was $16.6 billion and $30.8
billion compared to $22.8 billion and $49.1 billion for the three and six months
ended June 30, 2021. NIW decreased year-on-year primarily due to a decline in
the size of the total mortgage insurance market.

Total IIF increased 23% at June 30, 2022 compared to June 30, 2021, primarily
due to the NIW generated between such measurement dates, partially offset by the
run-off of in-force policies. Our persistency rate improved to 76.0% at June 30,
2022 from 53.9% at June 30, 2021, reflecting a slowdown in the pace of
refinancing activity during the intervening twelve month period driven by an
increase in interest and mortgage note rates.

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The following table shows the net premiums written and earned for the periods
noted:

Primary and pool premiums written
and earned                                  For the three months ended                         For the six months ended
                                       June 30, 2022           June 30, 2021             June 30, 2022             June 30, 2021
                                                                            (In Thousands)
Net premiums written                 $      118,457          $      126,642          $     234,491               $      242,457
Net premiums earned                         120,870                 110,888                237,365                      216,767


For the three and six months ended June 30, 2022, net premium written decreased
6% and 3%, respectively, while net premiums earned increased 9% and 10%,
respectively, compared to the three and six months ended June 30, 2021. The
decreases in net premium written were primarily driven by a decrease in single
premium policy production from period to period, partially offset by growth in
our monthly IIF and monthly pay policy premium receipts. The increases in the
net premium earned were primarily due to the growth of our IIF, partially offset
by a decrease in the contribution from single premium policy cancellations and
an increase in total premiums ceded under our reinsurance transactions.

Pool premiums written and earned for the three and six months ended June 30,
2022 and 2021, were $0.3 million and $0.6 million, and $0.4 million and
$0.9 million, respectively, before giving effect to the 2016 QSR Transaction,
under which all of our written and earned pool premiums are ceded. A portion of
our ceded pool premiums written and earned are recouped through profit
commission.

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Wallet statistics

Unless otherwise noted, the portfolio statistics tables presented below do not
include the effects of our third-party reinsurance arrangements described above.
The table below highlights trends in our primary portfolio as of the dates and
for the periods indicated.

Primary portfolio trends                                                    

From and for the three months ended

                                                                                             December 31,       September 30,
                                                June 30, 2022          March 31, 2022            2021               2021             June 30, 2021
                                                                           ($ Values In Millions, except as noted below)
New insurance written                          $      16,611          $      14,165          $  18,342          $  18,084           $      22,751
Percentage of monthly premium                             94  %                  92  %              93  %              93   %                  85  %
Percentage of single premium                               6  %                   8  %               7  %               7   %                  15  %
New risk written                               $       4,386          $       3,721          $   4,786          $   4,640           $       5,650
Insurance-in-force (1)                               168,639                158,877            152,343            143,618                 136,598
Percentage of monthly premium                             88  %                  88  %              87  %              87   %                  86  %
Percentage of single premium                              12  %                  12  %              13  %              13   %                  14  %
Risk-in-force (1)                              $      43,260          $      40,522          $  38,661          $  36,253           $      34,366
Policies in force (count) (1)                        551,543                526,976            512,316            490,714                 471,794

Average loan size (value in thousands of dollars) (1) $ $306

     301          $     297          $     293           $         290
Coverage percentage (2)                                 25.7  %                25.5  %            25.4  %            25.2   %                25.2  %
Loans in default (count) (1)                           4,271                  5,238              6,227              7,670                   8,764
Default rate (1)                                        0.77  %                0.99  %            1.22  %            1.56   %                1.86  %
Risk-in-force on defaulted loans (1)           $         295          $         362          $     435          $     546           $         625
Net premium yield (3)                                   0.30  %                0.30  %            0.31  %            0.32   %                0.34  %
Earnings from cancellations                    $         2.2          $         2.9          $     5.1          $     7.7           $         7.0
Annual persistency (4)                                  76.0  %                71.5  %            63.8  %            58.1   %                53.9  %
Quarterly run-off (5)                                    4.3  %                 5.0  %             6.7  %             8.1   %                 8.0  %


(1)  Reported as of the end of the period.
(2)  Calculated as end of period RIF divided by end of period IIF.
(3)  Calculated as net premiums earned divided by average primary IIF for the
period, annualized.
(4)  Defined as the percentage of IIF that remains on our books after a given
twelve-month period.
(5)  Defined as the percentage of IIF that is no longer on our books after a
given three-month period.

The table below presents a summary of the change in total primary IIF for the
dates and periods indicated.
Primary IIF                                  As of and for the three months ended         As of and for the six months ended
                                             June 30, 2022         June 30, 2021         June 30, 2022         June 30, 2021
                                                                               (In Millions)
IIF, beginning of period                     $  158,877          $      123,777          $  152,343          $      111,252
NIW                                              16,611                  22,751              30,776                  49,148
Cancellations, principal repayments and
other reductions                                 (6,849)                 (9,930)            (14,480)                (23,802)
IIF, end of period                           $  168,639          $      136,598          $  168,639          $      136,598


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We consider a "book" to be a collective pool of policies insured during a
particular period, normally a calendar year. In general, the majority of
underwriting profit, calculated as earned premium revenue minus claims and
underwriting and operating expenses, generated by a particular book year emerges
in the years immediately following origination. This pattern generally occurs
because relatively few of the claims that a book will ultimately experience
typically occur in the first few years following origination, when premium
revenue is highest, while subsequent years are affected by declining premium
revenues, as the number of insured loans decreases (primarily due to loan
prepayments), and by increasing losses.

The table below presents a summary of our primary IIF and RIF by book year as of
the dates indicated.

Primary IIF and RIF         As of June 30, 2022            As of June 30, 2021
                             IIF            RIF             IIF            RIF
                                              (In Millions)
June 30, 2022           $    30,249      $  7,972      $         -      $      -
2021                         76,657        19,522           48,314        11,986
2020                         39,154         9,928           51,100        12,792
2019                         10,248         2,688           17,279         4,527
2018                          4,021         1,030            6,745         1,719
2017 and before               8,310         2,120           13,160         3,342

Total                   $   168,639      $ 43,260      $   136,598      $ 34,366


We utilize certain risk principles that form the basis of how we underwrite and
originate NIW. We have established prudential underwriting standards and
loan-level eligibility matrices which prescribe the maximum LTV, minimum
borrower FICO score, maximum borrower DTI ratio, maximum loan size, property
type, loan type, loan term and occupancy status of loans that we will insure and
memorialized these standards and eligibility matrices in our Underwriting
Guideline Manual that is publicly available on our website. Our underwriting
standards and eligibility criteria are designed to limit the layering of risk in
a single insurance policy. "Layered risk" refers to the accumulation of
borrower, loan and property risk. For example, we have higher credit score and
lower maximum allowed LTV requirements for investor-owned properties, compared
to owner-occupied properties. We monitor the concentrations of various risk
attributes in our insurance portfolio, which may change over time, in part, as a
result of regional conditions or public policy shifts.

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The tables below present our primary NIW by FICO, LTV and purchase/refinance mix
for the periods indicated. We calculate the LTV of a loan as the percentage of
the original loan amount to the original purchase value of the property securing
the loan.

Primary NIW by FICO                                For the three months ended                       For the six months ended
                                              June 30, 2022           June 30, 2021          June 30, 2022           June 30, 2021
                                                                                 (In Millions)
>= 760                                      $        7,990          $       11,390          $      14,362          $       24,304
740-759                                              2,900                   4,246                  5,288                   9,558
720-739                                              2,056                   3,152                  3,993                   7,115
700-719                                              1,650                   1,798                  3,289                   4,156
680-699                                              1,277                   1,292                  2,521                   2,652
<=679                                                  738                     873                  1,323                   1,363
Total                                       $       16,611          $       22,751          $      30,776          $       49,148
Weighted average FICO                                  751                     754                    750                     755


Primary NIW by LTV                                For the three months ended                        For the six months ended
                                             June 30, 2022          June 30, 2021          June 30, 2022               June 30, 2021
                                                                                  (In Millions)
95.01% and above                           $       1,577           $       2,177          $      2,943                $       4,628
90.01% to 95.00%                                   8,253                   9,941                15,308                       20,992
85.01% to 90.00%                                   4,772                   6,262                 8,640                       14,110
85.00% and below                                   2,009                   4,371                 3,885                        9,418
Total                                      $      16,611           $      22,751          $     30,776                $      49,148
Weighted average LTV                                92.2   %                91.3  %               92.1   %                     91.1  %


Primary NIW by purchase/refinance mix            For the three months ended                       For the six months ended
                                            June 30, 2022           June 30, 2021          June 30, 2022           June 30, 2021
                                                                               (In Millions)
Purchase                                  $       16,203          $       18,911          $      29,601          $       36,820
Refinance                                            408                   3,840                  1,175                  12,328
Total                                     $       16,611          $       22,751          $      30,776          $       49,148



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The tables below show our total primary IIF and RIF by FICO and LTV, and
Total Primary FRR by loan type on the dates indicated.

Primary IIF by FICO                              As of
                              June 30, 2022                 June 30, 2021
                                         ($ Values In Millions)
>= 760                  $      83,769        50  %    $      70,583        51  %
740-759                        29,195        17              23,175        17
720-739                        23,240        14              18,857        14
700-719                        16,221        10              12,230         9
680-699                        11,160         6               7,927         6
<=679                           5,054         3               3,826         3
Total                   $     168,639       100  %    $     136,598       100  %


Primary RIF by FICO                              As of
                              June 30, 2022                 June 30, 2021
                                         ($ Values In Millions)
>= 760                  $      21,159        49  %    $      17,531        51  %
740-759                         7,564        17               5,873        17
720-739                         6,044        14               4,798        14
700-719                         4,289        10               3,161         9
680-699                         2,936         7               2,047         6
<=679                           1,268         3                 956         3
Total                   $      43,260       100  %    $      34,366       100  %


Primary IIF by LTV                            As of
                           June 30, 2022                 June 30, 2021
                                      ($ Values In Millions)
95.01% and above     $      16,068        10  %    $      12,026         9  %
90.01% to 95.00%            77,804        46              60,358        44
85.01% to 90.00%            51,029        30              43,064        32
85.00% and below            23,738        14              21,150        15
Total                $     168,639       100  %    $     136,598       100  %


Primary RIF by LTV                            As of
                           June 30, 2022                 June 30, 2021
                                      ($ Values In Millions)
95.01% and above     $       4,914        11  %    $       3,552        10  %
90.01% to 95.00%            22,974        53              17,774        52
85.01% to 90.00%            12,553        29              10,555        31
85.00% and below             2,819         7               2,485         7
Total                $      43,260       100  %    $      34,366       100  %


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Primary RIF by Loan Type                       As of
                                 June 30, 2022          June 30, 2021

Fixed                                         99  %              99  %
Adjustable rate mortgages:
Less than five years                           -                  -
Five years and longer                          1                  1
Total                                        100  %             100  %


The table below presents selected primary portfolio statistics, by book year, as
of June 30, 2022.
                                                                                                                     As of June 30, 2022
                  Original             Remaining           % Remaining of                                                                                                                             Incurred Loss
                 Insurance           Insurance in             Original                                              Number of Policies in         Number of Loans                                    Ratio (Inception        Cumulative Default       Current Default
Book Year         Written                Force                Insurance             Policies Ever in Force                  Force                   in Default             # of Claims Paid            to Date) (1)               Rate (2)               Rate (3)
                                                                                                                               ($ Values in Millions)
2013           $       162          $          6                       3  %                    655                                 40                       1                       1                           0.6  %                   0.3  %                2.5  %
2014                 3,451                   235                       7  %                 14,786                              1,455                      29                      50                           4.0  %                   0.5  %                2.0  %
2015                12,422                 1,440                      12  %                 52,548                              7,941                     170                     121                           3.0  %                   0.6  %                2.1  %
2016                21,187                 3,145                      15  %                 83,626                             16,073                     343                     138                           2.7  %                   0.6  %                2.1  %
2017                21,582                 3,484                      16  %                 85,897                             18,205                     607                     112                           3.9  %                   0.8  %                3.3  %
2018                27,295                 4,021                      15  %                104,043                             20,359                     785                     100                           6.6  %                   0.9  %                3.9  %
2019                45,141                10,248                      23  %                148,423                             42,491                     812                      25                           8.5  %                   0.6  %                1.9  %
2020                62,702                39,154                      62  %                186,174                            125,400                     696                       2                           4.6  %                   0.4  %                0.6  %
2021                85,574                76,657                      90  %                257,972                            236,705                     811                       1                           4.3  %                   0.3  %                0.3  %
2022                30,776                30,249                      98  %                 84,034                             82,874                      17                       -                           1.0  %                     -  %                  -  %
Total          $   310,292          $    168,639                                         1,018,158                            551,543                   4,271                     550


(1)  Calculated as total claims incurred (paid and reserved) divided by
cumulative premiums earned, net of reinsurance.
(2)  Calculated as the sum of the number of claims paid ever to date and number
of loans in default divided by policies ever in force.
(3)  Calculated as the number of loans in default divided by number of policies
in force.

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Geographical dispersion

The following table shows the distribution by state of our primary RIF as of the
dates indicated. The distribution of our primary RIF as of June 30, 2022 is not
necessarily representative of the geographic distribution we expect in the
future.

Top 10 primary RIF by state                     As of
                                  June 30, 2022          June 30, 2021
California                                   10.8  %            10.3  %
Texas                                         9.0                9.8
Florida                                       8.3                8.3
Virginia                                      4.3                5.0
Georgia                                       4.0                3.5
Illinois                                      3.9                3.8
Washington                                    3.9                3.6
Colorado                                      3.7                4.1
Maryland                                      3.5                3.9
Pennsylvania                                  3.3                3.2

Total                                        54.7  %            55.5  %


Insurance claims and claim costs

Insurance claims and claim expenses incurred represent estimated future payments
on newly defaulted insured loans and any change in our claim estimates for
previously existing defaults. Claims incurred are generally affected by a
variety of factors, including the macroeconomic environment, national and
regional unemployment trends, changes in housing values, borrower risk
characteristics, LTV ratios and other loan level risk attributes, the size and
type of loans insured, the percentage of coverage on insured loans, and the
level of reinsurance coverage maintained against insured exposures.

Reserves for claims and claim expenses are established for mortgage loans that
are in default. A loan is considered to be in default as of the payment date at
which a borrower has missed the preceding two or more consecutive monthly
payments. We establish reserves for loans that have been reported to us in
default by servicers, referred to as case reserves, and additional loans that we
estimate (based on actuarial review and other factors) to be in default that
have not yet been reported to us by servicers, referred to as IBNR. We also
establish reserves for claim expenses, which represent the estimated cost of the
claim administration process, including legal and other fees and other general
expenses of administering the claim settlement process. Reserves are not
established for future claims on insured loans which are not currently reported
or which we estimate are not currently in default.

Reserves are established by estimating the number of loans in default that will
result in a claim payment, which is referred to as claim frequency, and the
amount of the claim payment expected to be paid on each such loan in default,
which is referred to as claim severity. Claim frequency and severity estimates
are established based on historical observed experience regarding certain loan
factors, such as age of the default, cure rates, size of the loan and estimated
change in property value. Reserves are released the month in which a loan in
default is brought current by the borrower, which is referred to as a cure.
Adjustments to reserve estimates are reflected in the period in which the
adjustment is made. Reserves are also ceded to reinsurers under the QSR
Transactions and ILN Transactions, as applicable under each treaty. We have not
yet ceded any reserves under the ILN Transactions as incurred claims and claim
expenses on each respective reference pool remain within our retained coverage
layer of each transaction. Our pool insurance agreement with Fannie Mae contains
a claim deductible through which Fannie Mae absorbs specified losses before we
are obligated to pay any claims. We have not established any claims or claim
expense reserves for pool exposure to date.

The actual claims we incur as our portfolio matures are difficult to predict and
depend on the specific characteristics of our current in-force book (including
the credit score and DTI of the borrower, the LTV ratio of the mortgage and
geographic concentrations, among others), as well as the risk profile of new
business we write in the future. In addition, claims experience will be affected
by macroeconomic factors such as housing prices, interest rates, unemployment
rates and other events, such as natural disasters or global pandemics, and any
federal, state or local governmental response thereto.

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Our reserve setting process considers the beneficial impact of forbearance,
foreclosure moratorium and other assistance programs available to defaulted
borrowers. We generally observe that forbearance programs are an effective tool
to bridge dislocated borrowers from a time of acute stress to a future date when
they can resume timely payment of their mortgage obligations. The effectiveness
of forbearance programs is enhanced by the availability of various repayment and
loan modification options which allow borrowers to amortize or, in certain
instances, outright defer payments otherwise due during the forbearance period
over an extended length of time.

In response to the COVID-19 pandemic, politicians, regulators, lenders, loan
servicers and others have offered extraordinary assistance to dislocated
borrowers through, among other programs, the forbearance, foreclosure moratorium
and other assistance programs codified under the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act). The FHFA and GSEs have offered further
assistance by introducing new repayment and loan modification options to assist
borrowers with their transition out of forbearance programs and default status.
We generally observe that forbearance, repayment and modification, and other
assistance programs aid affected borrowers and drive higher cure rates on
defaults than would otherwise be expected on similarly situated loans that did
not benefit from broad-based assistance programs.

The following table provides a reconciliation of the beginning and ending gross
reserve balances for primary insurance claims and claim (benefits) expenses:

                                                  For the three months ended                         For the six months ended
                                             June 30, 2022           June 30, 2021             June 30, 2022             June 30, 2021
                                                                                  (In Thousands)
Beginning balance                          $      102,372          $       96,103          $     103,551               $       90,567
Less reinsurance recoverables (1)                 (20,080)                (18,686)               (20,320)                     (17,608)
Beginning balance, net of reinsurance
recoverables                                       82,292                  77,417                 83,231                       72,959

Add claims incurred:
Claims and claim (benefits) expenses
incurred:
Current year (2)                                    8,707                   5,069                 18,787                       15,626
Prior years (3)                                   (11,743)                   (429)               (22,442)                      (6,024)
Total claims and claim (benefits) expenses
incurred                                           (3,036)                  4,640                 (3,655)                       9,602

Less claims paid:
Claims and claim expenses paid:
Current year (2)                                       26                       -                     26                           12
Prior years (3)                                       356                     548                    676                        1,040

Total claims and claim expenses paid                  382                     548                    702                        1,052

Reserve at end of period, net of
reinsurance recoverables                           78,874                  81,509                 78,874                       81,509
Add reinsurance recoverables (1)                   19,588                  19,726                 19,588                       19,726
Ending balance                             $       98,462          $      101,235          $      98,462               $      101,235


(1)  Related to ceded losses recoverable under the QSR Transactions. See Item 1,
"Financial Statements - Notes to Condensed Consolidated Financial Statements -
Note 5, Reinsurance" for additional information.
(2) Related to insured loans with their most recent defaults occurring in the
current year. For example, if a loan defaulted in a prior year and subsequently
cured and later re-defaulted in the current year, the default would be included
in the current year. Amounts are presented net of reinsurance and included
$14.0 million attributed to net case reserves and $4.5 million attributed to net
IBNR reserves for the six months ended June 30, 2022 and $9.8 million attributed
to net case reserves and $5.6 million attributed to net IBNR reserves for the
six months ended June 30, 2021.
(3) Related to insured loans with defaults occurring in prior years, which have
been continuously in default before the start of the current year. Amounts are
presented net of reinsurance and included $17.0 million attributed to net case
reserves and $4.7 million attributed to net IBNR reserves for the six months
ended June 30, 2022 and $1.1 million attributed to net case reserves and
$5.0 million attributed to net IBNR reserves for the six months ended June 30,
2021.
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The "claims incurred" section of the table above shows claims and claim
(benefits) expenses incurred on defaults occurring in current and prior years,
including IBNR reserves and is presented net of reinsurance. We may increase or
decrease our claim estimates and reserves as we learn additional information
about individual defaulted loans, and continue to observe and analyze loss
development trends in our portfolio. Gross reserves of $74.9 million related to
prior year defaults remained as of June 30, 2022.

The following table provides a reconciliation of the beginning and ending count
of loans in default:

                                                    For the three months ended                               For the six months ended
                                           June 30, 2022                  June 30, 2021            June 30, 2022                  June 30, 2021
Beginning default inventory                      5,238                         11,090                    6,227                           12,209
Plus: new defaults                               1,069                          1,095                    2,232                            2,862
Less: cures                                     (2,011)                        (3,402)                  (4,143)                          (6,270)
Less: claims paid                                  (24)                           (19)                     (43)                             (35)
Less: rescission and claims denied                  (1)                             -                       (2)                              (2)

Ending default inventory                         4,271                          8,764                    4,271                            8,764


Ending default inventory declined from June 30, 2021 to June 30, 2022 as an
increased number of borrowers initially impacted by the COVID-19 pandemic cured
their delinquencies, and fewer new defaults emerged as the acute economic stress
of the pandemic crisis continued to recede. While our default population
declined from June 30, 2021 to June 30, 2022, our default inventory remains
elevated compared to historical experience due to the continued challenges
certain borrowers are facing related to the COVID-19 pandemic and their decision
to access the forbearance program for federally backed loans codified under the
CARES Act or similar programs made available by private lenders. As of June 30,
2022, 2,400 of our 4,271 defaulted loans were in a COVID-19 related forbearance
program.

The following table provides details of our claims paid, before giving effect to
claims ceded under the QSR Transactions and ILN Transactions, for the periods
indicated:

                                              For the three months ended                     For the six months ended
                                          June 30, 2022          June 30, 2021         June 30, 2022          June 30, 2021
                                                                          ($ In Thousands)
Number of claims paid (1)                         24                      19                    43                     35
Total amount paid for claims            $        471            $        702          $        873           $      1,308
Average amount paid per claim           $         20            $         37          $         20           $         37
Severity (2)                                      46    %                 66  %                 43   %                 64  %


(1)  Count includes 10 and 16 claims settled without payment during the three
and six months ended June 30, 2022, respectively, and three and four claims
settled without payment during the three and six months ended June 30, 2021,
respectively.
(2)  Severity represents the total amount of claims paid including claim
expenses divided by the related RIF on the loan at the time the claim is
perfected, and is calculated including claims settled without payment.

We paid 24 and 43 claims during the three and six months ended June 30, 2022,
respectively, and 19 and 35 claims during the three and six months ended
June 30, 2021, respectively. The number of claims paid was modest relative to
the size of our insured portfolio and number of defaulted loans we reported in
each period, primarily due to the forbearance program and foreclosure moratorium
implemented by the GSEs in response to the COVID-19 pandemic and codified under
the CARES Act. Such forbearance and foreclosure programs have extended, and may
ultimately interrupt, the timeline over which loans would otherwise progress
through the default cycle to a paid claim. Our claims paid experience for the
three and six months ended June 30, 2022 and 2021, further benefited from the
resiliency of the housing market and broad national house price appreciation. An
increase in the value of the homes collateralizing the mortgages we insure
provides defaulted borrowers with alternative paths and incentives to cure their
loan prior to the development of a claim.

Our claims severity for the three and six months ended June 30, 2022 was 46% and
43%, respectively, compared to 66% and 64% for the three and six months ended
June 30, 2021, respectively. Claims severity for the three and six months ended
June 30, 2022 and 2021 benefited from the same resiliency of the housing market
and broad national house price appreciation as

                                       43
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our claims paid. An increase in the value of the homes collateralizing the
mortgages we insure provides additional equity support to our risk exposure and
raises the prospect of a third-party sale of a foreclosed property, which can
mitigate the severity of our settled claims.

The following table provides detail on our average reserve per default, before
giving effect to reserves ceded under the QSR Transactions, as of the dates
indicated:

Average reserve per default:      As of June 30, 2022       As of June 30, 2021
                                                  (In Thousands)
Case (1)                         $               21.3      $               10.6
IBNR (1)(2)                                       1.8                       1.0
Total                            $               23.1      $               11.6

(1) Defined as the gross provision per insured loan in default.
(2) The amount includes claims settlement costs.

Average reserve per default increased from June 30, 2021 to June 30, 2022
primarily due to the "aging" of early COVID-related defaults. While we have
generally established lower reserves for defaults that we consider to be
connected to the COVID-19 pandemic given our expectation that forbearance,
repayment and modification, and other assistance programs will aid affected
borrowers and drive higher cure rates on such defaults than we would otherwise
expect to experience on similarly situated loans that did not benefit from
broad-based assistance programs, we have increased such reserves over time as
individual defaults remain outstanding or "age." Our average reserve per default
at June 30, 2022 also reflects an incrementally conservative set of assumptions
about future macroeconomic and housing market conditions compared to those
assumed at June 30, 2021.

While average reserve per default increased from June 30, 2021 to June 30, 2022,
our aggregate gross reserve position declined in the intervening period due to
the significant decline in our total default inventory.

GSE supervision

As an approved insurer, NMIC is subject to ongoing compliance with the PMIERs
established by each of the GSEs (italicized terms have the same meaning that
such terms have in the PMIERs, as described below). The PMIERs establish
operational, business, remedial and financial requirements applicable to
approved insurers. The PMIERs financial requirements prescribe a risk-based
methodology whereby the amount of assets required to be held against each
insured loan is determined based on certain loan-level risk characteristics,
such as FICO, vintage (year of origination), performing vs. non-performing
(i.e., current vs. delinquent), LTV ratio and other risk features. In general,
higher quality loans carry lower asset charges.

Under the PMIERs, approved insurers must maintain available assets that equal or
exceed minimum required assets, which is an amount equal to the greater of (i)
$400 million or (ii) a total risk-based required asset amount. The risk-based
required asset amount is a function of the risk profile of an approved insurer's
RIF, assessed on a loan-by-loan basis and considered against certain risk-based
factors derived from tables set out in the PMIERs, which is then adjusted on an
aggregate basis for reinsurance transactions approved by the GSEs, such as with
respect to our ILN Transactions and QSR Transactions. The aggregate gross
risk-based required asset amount for performing, primary insurance is subject to
a floor of 5.6% of performing primary adjusted RIF, and the risk-based required
asset amount for pool insurance considers both factors in the PMIERs tables and
the net remaining stop loss for each pool insurance policy.

By April 15th of each year, NMIC must certify it met all PMIERs requirements as
of December 31st of the prior year. We certified to the GSEs by April 15, 2022
that NMIC was in full compliance with the PMIERs as of December 31, 2021. NMIC
also has an ongoing obligation to immediately notify the GSEs in writing upon
discovery of a failure to meet one or more of the PMIERs requirements. We
continuously monitor NMIC's compliance with the PMIERs.

The following table presents a comparison of available assets of SMIERs and
amount of assets required according to the risk as declared by NMIC on the dates indicated:

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                                             As of
                               June 30, 2022       June 30, 2021
                                         (In Thousands)
Available assets              $    2,169,388      $    1,886,993
Risk-based required assets         1,240,143           1,170,854



Available assets were $2.2 billion at June 30, 2022, compared to $1.9 billion at
June 30, 2021. The $282 million increase in available assets between the dates
presented was primarily driven by NMIC's positive cash flow from operations
during the intervening period, partially offset by the ordinary course dividend
paid by NMIC to NMIH in April 2022 and the extraordinary dividend paid by Re One
to NMIH following the termination and commutation of the reinsurance agreement
between NMIC and Re One in December 2021.

The increase in the risk-based required asset amount between the dates presented
was primarily due to the growth of our gross RIF, largely offset by an increase
in the risk ceded under our third-party reinsurance agreements.

Competition

The MI industry is highly competitive and currently consists of six private
mortgage insurers, including NMIC, as well as government MIs such as the FHA,
USDA or VA. Private MI companies compete based on service, customer
relationships, underwriting and other factors, including price, credit risk
tolerance and IT capabilities. We expect the private MI market to remain
competitive, with pressure for industry participants to maintain or grow their
market share.

The private MI industry overall competes more broadly with government MIs who
significantly increased their share in the MI market following the 2008
Financial Crisis. Although there has been broad policy consensus toward the need
for increasing private capital participation and decreasing government exposure
to credit risk in the U.S. housing finance system, it remains difficult to
predict whether the combined market share of government MIs will recede to
pre-2008 levels. A range of factors influence a lender's and borrower's decision
to choose private over government MI, including among others, premium rates and
other charges, loan eligibility requirements, the cancelability of private
coverage, loan size limits and the relative ease of use of private MI products
compared to government MI alternatives.

LIBOR Transition

On March 5, 2021, ICE Benchmark Administration Limited ("IBA"), the
administrator for LIBOR, confirmed it would permanently cease the publication of
overnight, one-month, three-month, six-month and twelve-month USD LIBOR settings
in their current form after June 30, 2023. The U.K. Financial Conduct Authority,
the regulator of IBA, announced on the same day that it intends to stop
requiring panel banks to continue to submit to LIBOR and all USD LIBOR settings
in their current form will either cease to be provided by any administrator or
no longer be representative after June 30, 2023. We have exposure to USD
LIBOR-based financial instruments, such as LIBOR-based securities held in our
investment portfolio and certain ILN Transactions that require LIBOR-based
payments. We are in the process of reviewing our LIBOR-based contracts and
transitioning, as necessary and applicable, to a set of alternative reference
rates. We will continue to monitor, assess and plan for the phase out of LIBOR;
however, we do not expect the impact of such transition to be material to our
operations or financial results.


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About Mike Crayton

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