Enact Holdings, Inc. (ACT) is a private mortgage insurance (PMI) monoline operating through EMICO, regulated under North Carolina insurance law. Under a liquidation lens, the balance sheet presents a highly unusual recovery profile for an insurance holding company: total assets of $6.96B against total liabilities of $1.62B yield reported GAAP equity of $5.34B. However, the liquidation analysis must account for the nature of those assets and the contingent liability structure of a mortgage insurer. The primary asset is $6.13B in AFS fixed maturity securities carried at fair value, with a net unrealized loss position of $96M embedded in AOCI (-$82.7M net of tax in AOCI). Under the liquidation lens, AFS securities are already at fair value; applying no additional haircut, this is a high-quality, 99% investment-grade portfolio with 4.9-year effective duration. Cash and equivalents stand at $549M (100% recovery). The investment portfolio is subject to a 100bp rate shift sensitivity of approximately 4.9%, implying roughly $300M mark-to-market exposure — not a balance-sheet haircut already taken, but a risk to exit values in forced liquidation. On the liability side, the key obligations are: $744.9M in long-term debt (6.25% Senior Notes due 2029, carried net of $5.1M deferred issuance costs, face value $750M), $590.4M in loss reserves (LiabilityForClaimsAndClaimsAdjustmentExpense), $85.3M in unearned premiums, and $198M in other liabilities. In a wind-down, loss reserves do not extinguish — the insured-in-force portfolio carries 24,670 active delinquencies and $532M in direct primary case reserves against $1.81B RIF from that delinquent pool (reserve/RIF ratio 29%). Claims paid in Q1 2026 were $19.7M, nearly double the $10M in Q1 2025, signaling rising claims velocity. The statutory capital structure is robust: combined statutory capital of $5.34B (policyholders' surplus $785M plus contingency reserves $4.55B) against adjusted RIF of $53.4B yields an RTC ratio of 10.0:1, well inside the 25:1 regulatory cap. The contingency reserve ($4.55B statutory) is a liability on the statutory balance sheet and does not accrue to GAAP equity holders in a regulated wind-down without regulatory approval. EMICO paid a $150M dividend to EHI in March 2026. The $435M revolving credit facility remains undrawn. MFFAIS reports CLV/LLV/OLV all at -$196M, reflecting the negative net of haircut assets vs. face-value liabilities when traditional liquidation mechanics are applied to an insurance enterprise where the investment portfolio is already marked to market, intangibles are minimal, but insurance claim obligations survive wind-down. The -$196M figure likely reflects the debt face value ($750M) plus reserve and other liabilities exceeding adjusted liquid asset recovery. No goodwill or material intangible assets are present. Filing discusses delinquency trends and claims velocity in MD&A but does not separately XBRL-tag primary delinquency counts or RIF as balance-sheet items.
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