We enter into third-party reinsurance transactions to actively manage our risk, ensure compliance with PMIERs, state regulatory and other applicable capital requirements (respectively, as defined therein), and support the growth of our business. The Wisconsin Office of the Commissioner of Insurance (Wisconsin OCI) has approved and the GSEs have indicated their non-objection to all such transactions (subject to certain conditions and ongoing review).


	For the three months ended June 30,				For the six months ended June 30,
	2025		2024		2025		2024
	(In Thousands)
Net premiums written
Direct	$	177,914	$	166,183	$	352,329	$	329,390
Ceded (1)	(33,861)		(32,369)		(64,890)		(65,331)
Net premiums written	$	144,053	$	133,814	$	287,439	$	264,059

Net premiums earned
Direct	$	182,931	$	173,633	$	363,387	$	343,351
Ceded (1)	(33,865)		(32,465)		(64,955)		(65,526)
Net premiums earned	$	149,066	$	141,168	$	298,432	$	277,825

NMIC is party to nine quota share reinsurance treaties – the 2016 QSR Transaction, effective September 1, 2016 and as modified April 1, 2025, the 2018 QSR Transaction, effective January 1, 2018 and as modified April 1, 2025, the 2020 QSR Transaction, effective April 1, 2020 and as amended January 1, 2024, the 2021 QSR Transaction, effective January 1, 2021 and as modified January 1, 2025, the 2022 QSR Transaction, effective October 1, 2021, the 2022 Seasoned QSR Transaction, effective July 1, 2022, the 2023 QSR Transaction, effective January 1, 2023, the 2024 QSR Transaction, effective January 1, 2024, and the 2025 QSR Transaction, effective January 1, 2025 – which we refer to collectively as the QSR Transactions.

Under each of the QSR Transactions, NMIC cedes a proportional share of its risk on eligible policies to panels of third-party reinsurance providers in exchange for reimbursement of ceded claims and claim expenses on covered policies, a ceding commission and a profit commission (up to a contractually defined maximum) that varies directly and inversely with ceded claims.

NMIC may terminate any or all of the QSR Transactions without penalty if, due to a change in PMIERs requirements, it is no longer able to take full PMIERs asset credit for the RIF ceded under the respective agreements. Additionally, under the terms of the QSR Transactions, NMIC may elect to selectively 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.

The following table presents the inception date, covered production period, contractual and optional termination dates, current cession rate, ceding commission and profit commission for each outstanding QSR Transaction. Current amounts are presented as of June 30, 2025.

Inception Date

Covered Production

Contractual Termination date

Optional Termination date

Ceding Percentage

Ceding Commission

Profit Commission

2016 QSR

9/1/2016

1/1/2013 – 12/31/2017

12/31/2027

12/31/2020 (1)

20%

up to 60%

2018 QSR

1/1/2018

1/1/2018 – 12/31/2018

1/1/2019 – 12/31/2019

12/31/2029

12/31/2022 (1)

21% 17% (5)

20%

up to 61%

2020 QSR

4/1/2020

4/1/2020 – 12/31/2020

12/31/2030

12/31/2025 (1)

21%

36%

up to 50%

2021 QSR

1/1/2021

1/1/2021 – 10/30/2021

12/31/2031

12/31/2024 (1)

22%

20%

up to 58%

2022 QSR

10/1/2021

10/30/2021 – 12/31/2022

12/31/2032

12/31/2024 (2)

20%

up to 62%

2022 Seasoned QSR

7/1/2022

1/1/2013 – 12/31/2016

7/1/2019 –3/31/2020

6/30/2032

6/30/2025 (3)

95%

35%

up to 55%

2023 QSR

1/1/2023

1/1/2023 – 12/31/2023

12/31/2033

12/31/2025 (2)

20%

up to 62%

2024 QSR

1/1/2024

1/1/2024 – 12/31/2024

12/31/2034

12/31/2027 (1)

20%

up to 56%

2025 QSR

1/1/2025

1/1/2025 – 12/31/2025

12/31/2035

12/31/2027 (4)

20%

up to 62%

(1) NMIC has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of the optional termination date, or at the end of any calendar quarter thereafter which could result in NMIC recapturing the related risk.

(3) NMIC has the option, based on certain conditions, to terminate the agreement as of June 30, 2025 or quarterly thereafter through December 31, 2027 with the payment of a termination fee, and as of March 31, 2028 or quarterly thereafter without the payment of a termination fee. Such termination could result in NMIC recapturing the related risk.

(4) NMIC also holds a clean-up call that provides for termination of the agreement at its election at any time on or after the date the risk on remaining covered policies falls to 10% or less of the risk on covered policies at December 31, 2025.

Effective April 1, 2025, NMIC terminated its engagement with substantially all reinsurers under the 2016 QSR Transaction by mutual agreement on a cut-off basis. Upon termination, NMIC recaptured approximately $180.1 million of previously ceded primary risk-in-force. The cession rate under the 2016 QSR Transaction decreased from 20% to 1% of the remaining at-risk portfolio. Effective July 1, 2025, the remaining coverage under the 2016 QSR Transaction was terminated by mutual agreement on a cut-off basis.

Effective April 1, 2025, NMIC terminated one reinsurer under the 2018 QSR Transaction by mutual agreement on a cut-off basis, resulting in a recapture of approximately $59.7 million of previously ceded primary RIF to that reinsurer. The cession rate under the 2018 QSR Transaction decreased from 24% to 21% on covered policies written in 2018, and from 20% to 17% on covered policies written in 2019.

Effective June 30, 2025, NMIC elected to selectively terminate its engagement with certain reinsurers under the 2021 QSR Transaction and concurrently entered into an amended agreement effective July 1, 2025 (the Amended 2021 QSR Transaction) with the remaining reinsurance participants. Under the Amended 2021 QSR Transaction, NMIC will cede premiums earned related to 20% of the risk on eligible policies. NMIC will receive an enhanced ceding commission under the Amended 2021 QSR Transaction.

Concurrent with the placement of the 2025 QSR Transaction, NMIC entered into two additional sequential quota share reinsurance treaties that will provide coverage for mortgage insurance policies to be written in 2026 and 2027 (the 2026 QSR Transaction and 2027 QSR Transaction). Under the terms of the 2026 QSR Transaction, NMIC will cede premiums earned related to 20% of the risk on eligible policies written between January 1, 2026 and December 31, 2026. Under the terms of the 2027 QSR Transaction, NMIC will cede premiums earned related to 12% of the risk on eligible policies written between January 1, 2027 and December 31, 2027.

The following table shows amounts related to the QSR Transactions:


	As of and for the three months ended				As of and for the six months ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
	(In Thousands)
Ceded risk-in-force	$	12,764,708	$	12,815,434	$	12,764,708	$	12,815,434

Ceded premiums earned	(40,227)		(41,555)		(81,238)		(82,824)
Ceded claims and claim expenses (1)	3,253		(138)		3,776		521

Ceding commission earned	9,669		10,222		19,437		20,514
Profit commission	19,958		24,351		43,356		47,758

Ceded premiums written under the 2016 QSR Transaction are recorded as prepaid reinsurance premiums in “Other Assets” on our consolidated balance sheets and amortized to ceded premiums earned in a manner consistent with the recognition of revenue on direct premiums. Under all other QSR Transactions, premiums are ceded on an earned basis as defined in the agreement. Ceded claims and claim expenses under each of the QSR Transactions reduce the respective profit commission received by NMIC on a dollar-for-dollar basis.

In accordance with the terms of the 2016 QSR Transaction, rather than making a cash payment or transferring investments for ceded premiums written, NMIC established a funds withheld liability, which also includes amounts due to NMIC for ceding and profit commissions. Any loss recoveries and any potential profit commission to NMIC are realized from this account until exhausted. NMIC’s reinsurance recoverable balance is further supported by trust accounts established and maintained by each reinsurer in accordance with the PMIERs funding requirements for risk ceded to non-affiliates. The reinsurance recoverable on loss reserves related to the 2016 QSR Transaction was $0.1 million and $1.1 million as of June 30, 2025 and December 31, 2024, respectively.

In accordance with the terms of the 2018, 2020, 2021, 2022, 2022 Seasoned, 2023, 2024 and 2025 QSR Transactions, cash payments for ceded premiums earned are settled on a quarterly basis, offset by amounts due to NMIC for ceding and profit commissions. Any loss recoveries and any potential profit commission to NMIC are also recognized quarterly. NMIC's reinsurance recoverable balance is supported by trust accounts established and maintained by each reinsurer in accordance with the PMIERs funding requirements for risk ceded to non-affiliates. The aggregate reinsurance recoverable on loss reserves related to the 2018, 2020, 2021, 2022, 2022 Seasoned, 2023, 2024 and 2025 QSR Transactions was $32.7 million and $31.2 million as of June 30, 2025 and December 31, 2024, respectively.

We remain directly liable for all claim payments if we are unable to collect the recoverables due from our reinsurers and, as such, we actively monitor and manage our counterparty credit exposure to our reinsurance providers. We establish an allowance for expected credit loss against our reinsurance recoverable if we do not expect to recover amounts due from one or more of our reinsurance counterparties, and report our reinsurance recoverable net of such allowance, if any. We actively monitor the counterparty credit profiles of our reinsurers and each is required to partially collateralize its obligations under the terms of the QSR Transactions. The allowance for credit loss established against our reinsurance recoverable was deemed immaterial as of June 30, 2025 and December 31, 2024.

NMIC is party to seven excess-of-loss reinsurance agreements with broad panels of third-party reinsurers – the 2022-1 XOL Transaction, effective April 1, 2022, the 2022-2 XOL Transaction, effective July 1, 2022, the 2022-3 XOL Transaction, effective October 1, 2022, the 2023-1 XOL Transaction, effective January 1, 2023, the 2023-2 XOL Transaction, effective July 1, 2023, the 2024 XOL Transaction, effective January 1, 2024, and the 2025 XOL Transaction, effective January 1, 2025 – which we refer to collectively as the XOL Transactions. Each XOL Transaction provides NMIC with aggregate excess-of-loss reinsurance coverage on a defined portfolio of mortgage insurance policies. Under each agreement, NMIC retains a first layer of aggregate loss exposure on covered policies and the reinsurers then provide second layer loss protection up to a defined reinsurance coverage amount. The reinsurance coverage amount of each XOL Transaction is set to approximate the PMIERs minimum required assets of its reference pool and decreases from its peak over a ten-year period in the event the PMIERs minimum required assets of the pool declines. NMIC retains losses in excess of the outstanding reinsurance coverage amount.

for the outstanding reinsurance coverage amount and ceded aggregate premiums of $10.4 million and $20.5 million during the three and six months ended June 30, 2025, respectively, and $9.4 million and $18.6 million during the three and six months ended June 30, 2024, respectively. NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure under each agreement. NMIC did not cede any incurred losses on covered policies under the XOL Transactions during the three and six months ended June 30, 2025 and 2024, as the aggregate first layer risk retention for each agreement was not exhausted during such periods.

NMIC holds optional termination rights which provide it the discretion to terminate each XOL Transaction on or after a specified date. NMIC may also elect to terminate the XOL Transactions 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 treaties, 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.

The following table presents the inception date, covered production period, initial and current reinsurance coverage amount, and initial and current first layer retained aggregate loss under each outstanding XOL Transaction. Current amounts are presented as of June 30, 2025.


($ values in thousands)	Inception Date	Covered Production	Initial Reinsurance Coverage		Current Reinsurance Coverage		Initial First Layer Retained Loss		Current First Layer Retained Loss (1)
2022-1 XOL	April 1, 2022	10/1/2021 – 3/31/2022 (2)	$	289,741	$	162,837	$	133,366	$	130,834
2022-2 XOL	July 1, 2022	4/1/2022 – 6/30/2022 (3)	154,306		115,311		78,906		75,934
2022-3 XOL	October 1, 2022	7/1/2022 – 9/30/2022	96,779		80,282		106,265		103,453
2023-1 XOL	January 1, 2023	10/1/2022 – 6/30/2023	89,864		68,685		146,513		144,245
2023-2 XOL	July 1, 2023	7/1/2023 – 12/31/2023	100,777		87,871		136,875		136,240
2024 XOL	January 1, 2024	1/1/2024 – 12/31/2024	162,500		162,500		312,172		312,124
2025 XOL(4)	January 1, 2025	1/1/2025 – 12/31/2025	131,306		131,306		147,520		147,520

(1) NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure and cedes reserves for incurred claims and claim expenses to each applicable XOL Transaction and recognizes a reinsurance recoverable if such incurred claims and claim expenses exceed its current first layer retained loss.

(4) The initial reinsurance coverage, current reinsurance coverage, initial first layer retained loss and current first layer retained loss for the 2025 XOL Transaction will increase as incremental covered production is ceded under the transaction through December 31, 2025.

Concurrent with the placement of the 2025 XOL, NMIC entered into an excess-of-loss reinsurance treaty that will provide aggregate coverage for mortgage insurance policies to be written in 2026 (the 2026 XOL Transaction). Under the terms of the agreement, NMIC will retain a first layer of aggregate loss exposure on covered policies and its reinsurance counterparties will then provide second layer loss protection up to a defined reinsurance coverage amount of $164.2 million. NMIC retains losses in excess of the respective reinsurance coverage amounts.

NMIC entered into an additional excess-of-loss reinsurance treaty that will provide aggregate coverage for mortgage insurance policies covered under the existing 2021-1 ILN Transaction from April 1, 2026 (the 2026-2 XOL Transaction), at the time of its early redemption. The treaty incepts on April 1, 2026 and will expire on March 31, 2036. Under the terms of the agreement, NMIC will retain a first layer of aggregate loss exposure on covered policies, and its reinsurance counterparties will then provide second layer loss protection up to a defined reinsurance coverage amount of $160 million subject to adjustment on the date of inception based on the persistency of the underlying reference pool through such date. NMIC retains losses in excess

NMIC is a party to reinsurance agreements with Oaktown Re VI Ltd. and Oaktown Re VII Ltd. (special purpose reinsurance entities collectively referred to as the Oaktown Re Vehicles) effective April 27, 2021 and October 26, 2021, respectively. Each agreement provides NMIC with aggregate excess-of-loss reinsurance coverage on a defined portfolio 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.

NMIC makes risk premium payments to the Oaktown Re Vehicles for the applicable outstanding reinsurance coverage amount and pays an additional amount for anticipated operating expenses (capped at $250 thousand per year). NMIC ceded aggregate premiums to the Oaktown Re Vehicles of $3.2 million and $6.6 million during the three and six months ended June 30, 2025, respectively, and $5.9 million and $11.8 million during the three and six months ended June 30, 2024, respectively.

NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure under each excess-of-loss agreement. NMIC did not cede any incurred losses on covered policies to the Oaktown Re Vehicles during the three and six months ended June 30, 2025 and 2024, as the aggregate first layer risk retention for each applicable agreement was not exhausted during such periods.

Under the terms of each excess-of-loss reinsurance agreement, the Oaktown Re Vehicles are required to fully collateralize their outstanding reinsurance coverage amount to NMIC with funds deposited into segregated reinsurance trusts. Such trust funds are required to be invested in short-term U.S. Treasury money market funds at all times. Each Oaktown Re Vehicle financed its respective collateral requirement through the issuance of mortgage insurance-linked notes to unaffiliated investors. Such insurance-linked notes mature 12.5 years from the inception date of their associated reinsurance agreement. We refer to NMIC’s reinsurance agreements with and the insurance-linked note issuances by Oaktown Re Vehicles individually as the 2021-1 ILN Transaction and 2021-2 ILN Transaction, and collectively as the ILN Transactions.

The respective reinsurance coverage amounts provided by the Oaktown Re Vehicles decrease over a 12.5-year period as the underlying insured mortgages are amortized or repaid, and/or the mortgage insurance coverage is canceled. As the reinsurance coverage decreases, a prescribed amount of collateral held in trust by the Oaktown Re Vehicles is distributed to ILN Transaction noteholders as amortization of the outstanding insurance-linked note principal balances. The outstanding reinsurance coverage amounts stop amortizing, and the distribution of collateral assets to ILN Transaction noteholders 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).

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 noteholders, among others.

The following table presents the inception date, covered production period, initial and current reinsurance coverage amount, and initial and current first layer retained aggregate loss under each outstanding ILN Transaction. Current amounts are presented as of June 30, 2025.


($ values in thousands)	Inception Date	Covered Production	Initial Reinsurance Coverage		Current Reinsurance Coverage		Initial First Layer Retained Loss		Current First Layer Retained Loss (1)





2021-1 ILN	April 27, 2021	10/1/2020 – 3/31/2021 (2)	$	367,238	$	115,702	$	163,708	$	162,547
2021-2 ILN	October 26, 2021	4/1/2021 – 9/30/2021 (3)	363,596		205,070		146,229		144,736

(1) NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure and cedes reserves for incurred claims and claim expenses to each applicable ILN Transaction and recognizes a reinsurance recoverable if such incurred claims and claim expenses exceed its current first layer retained loss.

Under the terms of our ILN Transactions, we are required to maintain a certain level of restricted funds in premium deposit accounts with Bank of New York Mellon until the respective notes have been redeemed in full. “Cash and Cash Equivalents” on our condensed consolidated balance sheets includes a de minimis restricted amount as of June 30, 2025 and $0.1 million as of December 31, 2024.