Reinsurance

12 Months Ended

Dec. 31, 2024

(7) Reinsurance

We reinsure a portion of our policy risks to other insurance companies in order to reduce our ultimate losses, diversify our exposures and provide capital flexibility. We also assume certain policy risks written by other insurance companies. Reinsurance accounting is followed for ceded transactions when there is adequate insurance risk transfer. Otherwise, the deposit method of accounting is followed.

Reinsurance does not relieve us from our obligations to policyholders. In the event that the reinsurers are unable to meet their obligations, we remain liable for the reinsured claims. We monitor both the financial condition of individual reinsurers and risk concentrations arising from similar geographic regions, activities and economic characteristics of reinsurers to lessen the risk of default by such reinsurers. Other than the relationship discussed below with Union Fidelity Life Insurance Company (“UFLIC”), we do not have significant concentrations of reinsurance with any one reinsurer that could have a material impact on our financial position.

U.S. Life Insurance Subsidiaries

As of December 31, 2024, the maximum amount of individual ordinary life insurance normally retained by us on any one individual life policy was $5 million.

We have several significant reinsurance transactions (“Reinsurance Transactions”) with UFLIC, an affiliate of General Electric Company, which now operates as GE Aerospace (“GE”). In the Reinsurance Transactions, we ceded to UFLIC

in-force

blocks of structured settlements issued prior to 2004, substantially all of our

in-force

blocks of variable annuities issued prior to 2004 and a block of long-term care insurance policies that we reinsured in 2000 from legal entities now a part of Brighthouse Life Insurance Company. Although we remain directly liable under these contracts and policies as the ceding insurer, the Reinsurance Transactions have the effect of transferring the financial results of the reinsured blocks to UFLIC. To secure the payment of its obligations to us under the reinsurance agreements governing the Reinsurance Transactions, UFLIC has established trust accounts to maintain an aggregate amount of assets with a statutory book value at least equal to the statutory general account reserves attributable to the reinsured business less an amount required to be held in certain claims-paying accounts. A trustee administers the trust accounts and we are permitted to withdraw from the trust accounts amounts due to us pursuant to the terms of the reinsurance agreements that are not otherwise paid by UFLIC. In addition, pursuant to a Capital Maintenance Agreement, GE is obligated to maintain sufficient capital in UFLIC to maintain UFLIC’s risk-based capital (“RBC”) at not less than

150

% of its company action level, as defined by the National Association of Insurance Commissioners (“NAIC”).

As of December 31, 2024 and 2023, our reinsurance recoverable related to UFLIC at the

locked-in

discount rate was $12,773 million and $13,020 million, respectively.

Under the terms of certain reinsurance agreements that our life insurance subsidiaries have with external parties, we pledged assets, including cash, in either separate portfolios or trusts for the benefit of external reinsurers. These assets support the reserves ceded to those external reinsurers. We have pledged fixed maturity securities, commercial mortgage loans and cash of $8,337 million, $413 million and $33 million, respectively, as of December 31, 2024 and $9,683 million, $489 million and $39 million, respectively, as of December 31, 2023 in connection with these reinsurance agreements. However, we maintain the ability to substitute these pledged assets for other qualified collateral, and may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level.

The following table sets forth net domestic life insurance

in-force

as of December 31:


(Amounts in millions)	2024			2023			2022
Direct life insurance in-force	$	361,846		$	397,276		$	430,151
Amounts assumed from other companies		425			487			527
Amounts ceded to other companies (1)		(319,192	)		(352,901	)		(383,350	)

Net life insurance in-force	$	43,079		$	44,862		$	47,328

Percentage of amount assumed to net		1	%		1	%		1	%

(1)	Includes amounts accounted for under the deposit method.

Enact

Enact Holdings, through Enact Mortgage Insurance Corporation (“EMICO”), its principal U.S. mortgage insurance subsidiary, engages in various reinsurance transactions. EMICO engages in excess of loss transactions either through a panel of traditional reinsurance providers or through collateralized reinsurance with unaffiliated special purpose insurers that are considered VIEs. During the respective coverage periods of these agreements, EMICO retains the first layer of aggregate loss exposure on covered policies while the reinsurer provides the

second layer of coverage, up to the defined reinsurance coverage amount, and EMICO retains losses in excess of the respective reinsurance coverage amount. Traditional reinsurance providers collateralize a portion of their coverage by holding funds in reinsurance trust accounts, and the VIEs fully collateralize their coverage by issuing mortgage insurance-linked notes to eligible capital market investors in unregistered private offerings. The notes are non-recourse to EMICO, and to Genworth Financial and its affiliates. EMICO has rights to terminate the reinsurance agreements upon the occurrence of certain events.

On January 27, 2025, EMICO executed two excess of loss reinsurance transactions that provide approximately $225 million and $260

million of reinsurance coverage on a portion of expected new insurance written for the 2025 and 2026 book years, respectively.

In 2024, EMICO executed two excess of loss reinsurance transactions with a panel of reinsurers that provide up to $270 million of reinsurance coverage on a portion of new insurance written for the 2024 book year and approximately $90 million of reinsurance coverage on a portion of mortgage insurance written from July 2023 to December 2023.

In 2023, EMICO executed an excess of loss reinsurance transaction with a panel of reinsurers that provides up to $180 million of reinsurance coverage on a portion of new insurance written in 2023. During 2023, EMICO also obtained $248 million of excess of loss reinsurance coverage from certain special purpose insurers.

EMICO also engages in quota share reinsurance agreements with a panel of third-party reinsurers. Under the agreements, EMICO cedes a percentage of premiums earned, claims and claims expenses on eligible policies. The agreements also include a specific ceding commission and a profit commission that is determined based on ceded claims. EMICO has rights to terminate the reinsurance agreements upon the occurrence of certain events.

In 2024, EMICO entered into quota share reinsurance agreements under which it ceded

21.225%

of a portion of new insurance written for its 2024 book year, and will cede, subject to certain conditions,

27.15% and 27.00%

of a portion of expected new insurance written for its 2025 and 2026 book years, respectively. EMICO executed a quota share reinsurance agreement in 2023 under which it ceded

16.125%

of a portion of new insurance written for its 2023 book year.

In connection with its reinsurance activities, Enact Holdings maintained assets in trust of $142 million and $78

million as of December 31, 2024 and 2023, respectively, for the benefit of its contractual counterparties.

Premiums Written and Earned

The following table sets forth the effects of reinsurance on premiums written and earned for the years ended December 31:


	Written									Earned
(Amounts in millions)	2024			2023			2022			2024			2023			2022
Direct:
Life insurance	$	656		$	699		$	738		$	656		$	699		$	738
Accident and health insurance (1)		2,545			2,712			2,739			2,545			2,712			2,739
Mortgage insurance		1,050			995			979			1,085			1,049			1,023

Total direct		4,251			4,406			4,456			4,286			4,460			4,500

Assumed:
Life insurance		1			1			1			1			1			1
Accident and health insurance (1)		277			288			294			277			288			294
Mortgage insurance		21			4			3			21			4			3

Total assumed		299			293			298			299			293			298

Ceded:
Life insurance		(478	)		(493	)		(505	)		(478	)		(493	)		(505	)
Accident and health insurance (1)		(512	)		(537	)		(533	)		(512	)		(537	)		(533	)
Mortgage insurance		(115	)		(87	)		(80	)		(115	)		(87	)		(80	)

Total ceded		(1,105	)		(1,117	)		(1,118	)		(1,105	)		(1,117	)		(1,118	)

Net premiums	$	3,445		$	3,582		$	3,636		$	3,480		$	3,636		$	3,680

Percentage of amount assumed to net											9	%		8	%		8	%

(1)	Accident and health insurance is comprised of our long-term care insurance products.

Reinsurance recoveries recognized as a reduction of benefits and other changes in policy reserves amounted to $2,812 million, $2,702 million and $2,746 million during 2024, 2023 and 2022, respectively.

Allowance for Credit Losses on Reinsurance Recoverables

The following table sets forth the changes in the allowance for credit losses related to reinsurance recoverables as of and for the years ended December 31:


(Amounts in millions)	2024			2023			2022
Allowance for credit losses:
Beginning balance	$	29		$	63		$	58
Provision		(5	)		35			5
Write-offs		—			(69	)		—
Recoveries		—			—			—

Ending balance	$	24		$	29		$	63

Our policy for evaluating and measuring the allowance for credit losses related to reinsurance recoverables utilizes the reinsurer’s credit rating, updated quarterly, to assess the credit quality of reinsurance recoverables. The following tables set forth A.M. Best Company, Inc.’s credit ratings related to our reinsurance recoverables at the

locked-in

discount rate, gross of the allowance for credit losses, as of December 31:


	2024
(Amounts in millions)	Collateralized		Non-collateralized		Total

Credit rating:
A++	$	—	$	686	$	686
A+		1,465		1,691		3,156
A		33		325		358
Not rated (1)		12,775		11		12,786

Total reinsurance recoverable	$	14,273	$	2,713	$	16,986


	2023
(Amounts in millions)	Collateralized		Non-collateralized		Total

Credit rating:
A++	$	—	$	666	$	666
A+		1,322		1,719		3,041
A		33		350		383
Not rated (1)		13,021		16		13,037

Total reinsurance recoverable	$	14,376	$	2,751	$	17,127

(1)

Primarily relates to amounts associated with UFLIC, which is not rated. However, UFLIC has trust accounts and a guarantee from its parent, as discussed above, and is sufficiently collateralized and fully collectible; accordingly, no allowance for credit losses was recorded as of December 31, 2024 and 2023.

Reinsurance recoverables are considered past due when contractual payments have not been received from the reinsurer by the required payment date. Claims submitted for payment are generally due in less than one year. As of December 31, 2024, we had less than $1 million of reinsurance recoverables past due and no reinsurance recoverables past due as of December 31, 2023.

We previously established an allowance for credit losses of $36 million related to a prior reinsurance recoverable associated with Scottish Re US Inc. (“Scottish Re”), a reinsurance company domiciled in Delaware that was ordered into receivership for the purposes of rehabilitation in 2019. In 2023, the receiver concluded that Scottish Re should be liquidated based upon adverse changes in its financial condition subsequent to the filing of the proposed and subsequently amended plan of rehabilitation. Scottish Re’s board of directors consented to the liquidation order, which was made final by the court shortly thereafter. In addition, the court’s liquidation order mandated all reinsurance agreements

in-force

with Scottish Re be terminated (or expire) by no later than September 30, 2023. In 2023, we determined that the reinsurance recoverable was uncollectible. As a result, we recorded an additional credit loss of $33 million and wrote off the entire reinsurance recoverable of $69 million against the allowance for credit losses. We also recaptured all our life insurance policies from Scottish Re in 2023, which did not have a significant impact on our earnings for the year ended December 31, 2023, as the credit loss recognized during 2023 was offset by the derecognition of ceded premiums payable of approximately $33 million where we had the right of offset for the amounts owed to us by Scottish Re.

Effective December 31, 2023, we executed treaties with a third party to cede, on a yearly renewable term basis, certain term and universal life insurance products recaptured from Scottish Re, as well as some smaller blocks. This transaction resulted in a gain of $34 million that was deferred as cost of reinsurance and recorded as part of the reinsurance recoverable balance as of December 31, 2023; therefore, there was no impact to net income (loss).