About NMI Holdings

NMI Holdings, Inc. operates as a mortgage guaranty insurance company. The company provides mortgage insurance (referred to as mortgage insurance or MI) through the company’s wholly-owned insurance subsidiaries, National Mortgage Insurance Corporation (NMIC) and National Mortgage Reinsurance Inc One (Re One). NMIC and Re One are domiciled in Wisconsin and principally regulated by the Wisconsin Office of the Commissioner of Insurance (Wisconsin OCI). NMIC is the company’s primary insurance subsidiary, and is approved as an MI provider by the GSEs and is licensed to write MI coverage in all 50 states and D.C. The company’s subsidiary, NMI Services, Inc. (NMIS), provides outsourced loan review services to mortgage loan originators and the company’s 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 Such requirements have been repealed and the reinsurance coverage provided by Re One to NMIC has been commuted.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 have active insurance exposures. As of December 31, 2023, the company had issued master policies with 1,974 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. Strategy The company’s strategy is to continue to build on the company’s position in the private MI market, expand the company’s customer base and grow the company’s insured portfolio of high-quality residential loans by focusing on long-term customer relationships, disciplined and proactive risk selection and pricing, fair and transparent claims payment practices, responsive customer service, and financial strength and profitability. Products and Services Mortgage Insurance Products The company offers two principal types of MI coverage, primary and pool. Primary Mortgage Insurance Primary MI provides default protection on individual mortgage loans at specified coverage percentages. Primary MI is typically written on a flow basis, whereby mortgages are insured on an individual, loan-by-loan basis at the time of origination. Primary MI can also be written on an aggregated basis, whereby each mortgage in a given loan portfolio is individually insured in a single transaction after the point of origination. All of the company’s primary insurance is written on first-lien mortgage loans, with nearly all secured by owner occupied single-family homes (defined as one-to-four family homes and condominiums). The company also writes a small amount of primary insurance on first-lien mortgages secured by vacation properties, second homes and investment properties, although the company has formal risk policies in place to limit the amount of such business the company underwrites. The company’s premiums are based on statutory rating rules and rates that the company files with various state insurance departments. The company establishes its premium rates based on models that assess risk across a spectrum of variables, including coverage percentages, LTV ratios, loan and property attributes, borrower debt-to-income (DTI) and credit score profiles, and market and macroeconomic conditions. The company has four premium plans: Single — Entire premium is paid upfront at the time the coverage is placed; Annual — Premiums are paid in advance for a subsequent twelve-month period over the life of a policy; Monthly — Premiums are paid in advance on a monthly basis over the life of the policy; and Monthly Advantage — Premiums are billed upon the company’s receipt of notice of a mortgage close and then paid in arrears on a monthly basis over the life of the policy. Loan Review Services The company offers outsourced loan review services to mortgage originators through NMIS. In connection with these services, NMIS reviews loan data and documentation and assesses whether individual loan applications comply with the originator's and/or GSEs' underwriting guidelines. The company provides loan review services for mortgages that require MI and those that do not. Under the terms of its loan review agreements, NMIS provides customers with limited indemnification against losses for certain material loan review errors. The indemnification may be in the form of monetary or other remedies, subject to per loan and annual limits. NMIS utilizes third-party service providers to conduct individual loan reviews. NMIS third parties have represented and warranted to NMIS that they comply with the requirements of the federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) in all applicable jurisdictions. Customers As of December 31, 2023, the company had issued Master Policies with 1,974 customers. The company classifies its customers into two primary categories, which the company refers to as ‘National Accounts’ and ‘Regional Accounts.’ The company considers National Accounts to be the most significant residential mortgage originators as determined by the combined volume of their own ‘retail’ originations and insured business they acquire from ‘correspondents,’ or other smaller mortgage originators. National Account lenders primarily sell their loans to the GSEs or, less frequently, to private label secondary markets. National Account lenders may also retain loans they originate or purchase in their portfolios. Regional Account lenders typically originate loans on a local or regional level. The company further defines customers as ‘centralized’ or ‘decentralized’ based on how they manage their mortgage insurance purchasing decisions across each of their MI providers. Centralized lenders make decisions about the placement and choice of private mortgage insurance at a centralized, corporate level. Decentralized lenders make decisions about the placement and choice of private mortgage insurance at a loan level by loan production personnel, such as loan officers, processors, and underwriters. National Account lenders primarily utilize the centralized decision model and Regional Account lenders primarily utilize the decentralized decision model. The GSEs, as major purchasers of conventional mortgage loans in the U.S., are the primary beneficiaries of the company’s mortgage insurance coverage. Revenues from the company’s customers have been generated in the U.S. only. Sales and Marketing The company’s sales and marketing efforts are designed to help the company establish and maintain high-quality customer relationships. The company’s sales force consists of qualified mortgage professionals that generally have well-established relationships with industry leading lenders and significant experience in both MI and mortgage lending. The company structures its sales force into National Accounts that focus on relationships with national or large regional lenders, and Regional Accounts that focus on relationships with regional lenders, such as community banks, credit unions and mortgage bankers. The company also maintains a dedicated customer service team, which the company refers to as the Solution Center, which offers support in loan submission and underwriting services, as well as risk management and technology to support the company’s sales efforts. The company also has a product development and marketing department that has primary responsibility for the creation, launch and management of its MI products and technological offerings, and coordination of the company’s marketing strategy. The company’s marketing efforts seek to raise brand awareness through advertising and marketing campaigns, customer training programs, sponsorship of industry and educational events, and the company’s web-based presence and proprietary mobile technology. Information Technology Systems and Intellectual Property The company underwrites and services its MI portfolio within this proprietary insurance management platform, which the company refers to as AXIS. Effective March 31, 2020, the company entered into an agreement with Tata Consultancy Services (TCS), under which TCS provides IT services over a seven-year period across such functions as application development and support, infrastructure support and information security. The company’s engagement with TCS has enhanced the company’s ability to provide innovative IT solutions for the company’s internal and external constituents, while allowing the company to realize cost efficiencies by leveraging TCS's global platform. Investment Portfolio As of December 31, 2023, the company’s investment portfolio was consisted of investment grade fixed maturity securities, including the U.S. Treasury securities and obligations of the U.S. government agencies, municipal debt securities, corporate debt securities, and asset-backed securities. The company also held short-term investments, such as the U.S. Treasury Bills and commercial paper. The company engages a third-party investment manager Allspring Global Investments, formerly Wells Capital Management, Inc., to assist with day-to-day management of the company’s portfolio and implementation of its investment policy. The U.S. Mortgage Insurance Regulation NMIC and Re One are principally regulated by the company’s domiciliary and primary regulator, the Wisconsin OCI and by state insurance departments in each state in which these companies are licensed. The company routinely meets with regulatory agencies, including its state insurance regulators and the FHFA, the GSEs, the company’s customers and other industry participants to promote the role and value of private MI and exchange views on the U.S. housing finance system. The company is a member of U.S. Mortgage Insurers (USMI), an organization formed to promote the use of private MI as a credit risk mitigant in the U.S. residential mortgage market. As an approved insurer, NMIC is subject to ongoing compliance with the PMIERs. NMIC holds a certificate of authority, or insurance license, in all 50 states and D.C. As a licensed insurer in these jurisdictions, NMIC is subject to ongoing financial reporting, examination and disclosure requirements relating to its business, operations, management and affiliate arrangements. As the ultimate controlling parent of an insurance holding company system, NMIH is registered with the Wisconsin OCI, which is NMIC and Re One's primary regulator, and must provide insurance holding company annual audited consolidated financial statements and other information to the Wisconsin OCI on an ongoing basis. The company, as an insurance holding company, and each of the company’s affiliates, are prohibited from engaging in certain transactions with the company’s insurance subsidiaries without disclosure to, and in some instances, prior approval by, the Wisconsin OCI. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended certain provisions of TILA, RESPA and other statutes that have had a significant impact on the company’s business and the residential mortgage market. Section 8 of RESPA applies to most residential mortgages insured by the company. History NMI Holdings, Inc. was founded in 2011. The company, a Delaware corporation, was incorporated in 2011.