The National Flood Insurance Program is a program administered by the Federal Emergency Management Agency whereby the Company sells and services NFIP flood insurance policies on behalf of FEMA and receives fees for its services. Congressional authorization for the NFIP is periodically evaluated and may be subject to potential government shutdowns. The Company sells excess flood policies which are 100% ceded to a highly rated reinsurance carrier. The Company also participates in two Captives for the purpose of facilitating additional underwriting capacity and to participate in a portion of the Company's underwriting results. One Captive participates on a quota share basis for policies placed by certain of our MGU businesses that are currently focused on property insurance for earthquake and wind exposed properties with a portion of premiums ceded to reinsurance companies, limiting, but not fully eliminating the Company's exposure to underwriting losses. The other Captive participates through excess of loss reinsurance layers associated with one of our MGU businesses focused on placements of personal property, excluding flood, primarily in the southeastern United States with one layer of per risk excess reinsurance and three layers of catastrophe ("CAT") per occurrence reinsurance. All four layers have limited reinstatements and therefore, the Captive has capped, maximum aggregate limits. The effects of reinsurance on premiums written and earned are as follows:


	2024						2023
(in millions)	Written			Earned			Written			Earned
Direct premiums - WNFIC	$	1,005		$	946		$	887		$	807
Assumed premiums - WNFIC		—			—			—			—
Ceded premiums - WNFIC		1,005			946			887			807
Net premiums - WNFIC		—			—			—			—
Assumed premiums - Quota share captive and excess of loss layer captive		153			151			113			90
Ceded premiums - Quota share captive		(74	)		(74	)		(52	)		(62	)
Net premiums - Quota share captive and excess loss layer captive		79			77			61			28
Net premiums - Total	$	79		$	77		$	61		$	28

All premiums written by the Company under the NFIP are 100.0% ceded to FEMA, for which WNFIC received a 29.5% gross expense allowance from January 1, 2024 through September 30, 2024 and a 29.1% gross expense allowance from October 1, 2024 through December 31, 2024. As of December 31, 2024 and 2023, the Company ceded $1,001 million and $883 million, respectively, of written premiums to FEMA, and $4 million and $4 million, respectively, ceded to highly rated carriers, for excess flood policies which are not within the NFIP.

As of December 31, 2024, the Consolidated Balance Sheets contained Reinsurance recoverable of $1,525 million and Prepaid reinsurance premiums of $520 million which are related to the WNFIC business. As of December 31, 2023, the Consolidated Balance Sheets contained reinsurance recoverable of $125 million and prepaid reinsurance premiums of $461 million. There was no net activity in the reserve for losses and loss adjustment expense for the years ended December 31, 2024 and 2023, as WNFIC’s direct premiums written were 100.0% ceded to two reinsurers. The balance of the reserve for losses and loss adjustment expense for the WNFIC, excluding related reinsurance recoverable, was $1,525 million as of December 31, 2024 and $125 million as of December 31, 2023.

WNFIC maintains capital in excess of minimum statutory amount of $8 million as required by regulatory authorities. The statutory capital and surplus of WNFIC was $44 million as of December 31, 2024 and $39 million as of December 31, 2023. As of December 31, 2024 and 2023, WNFIC generated statutory net income of $9 million and $8 million, respectively. The maximum amount of ordinary dividends that WNFIC can pay to shareholders in a rolling 12 month period is limited to the greater of 10.0% of statutory adjusted capital and surplus or 100.0% of adjusted net income. On June 10, 2024, WNFIC paid an ordinary dividend of $7 million. The dividend was declared and approved by the WNFIC Board of Directors on May 28, 2024. On April 28, 2023, WNFIC paid an ordinary dividend of $3 million. The dividend was declared and approved by the WNFIC Board of Directors on March 17, 2023. The maximum dividend payout that may be made in 2024 and 2025 without prior approval is $8 million and $9 million, respectively.

In December 2021, the initial funding to capitalize the quota share Captive was $6 million. The prior year equity in addition to the current earnings of $18 million through December 31, 2024 is considered at risk for loss. Assumed net written and net earned premiums for the quota share Captive for the 12 months ended December 31, 2024 were $75 million and $73 million, respectively. For the 12 months ended December 31, 2024, the ultimate loss expense inclusive of incurred but not reported claims was $21 million. As of December 31, 2024 the Consolidated Balance Sheets contained reinsurance recoverable of $2 million, deferred acquisition costs of $53 million, presented within the unearned premiums line item, reinsurance payable of $5 million, and the reserve for losses and loss adjustment expense, excluding related reinsurance recoverable of $14 million. The first collateral release was received in March 2024 and is based on an IBNR factor times earned premium compared to the current collateral balance.

The excess of loss layer Captive was renewed in June 2024 with underlying reinsurance treaties effective from June 1 through May 31, 2025. This Captive’s maximum underwriting exposure is $2 million. Assumed net earned premiums for the captive for the years ended December 31, 2024 and December 31, 2023 were $4 million. As of December 31, 2024 and December 31, 2023, the Consolidated Balance Sheets contained the reserve for losses and loss adjustment expense of $3 million and $2 million, respectively.