The GSEs have private mortgage insurer eligibility requirements, or PMIERs,"PMIERs", for private mortgage insurers that insure loans delivered to or purchased by the GSEs. The financial requirements of the PMIERs require a mortgage insurer’s Available Assets to equal or exceed its Minimum Required Assets. While on an overall basis,MGIC is in compliance with the amount of Available Assets MGIC must hold in order to continuePMIERs and eligible to insure GSE loans is greaterpurchased by the GSEs. In calculating Minimum Required Assets, we receive significant credit for risk ceded under the PMIERs than the amount state regulation currently requires,our reinsurance transactions. See "Reinsurance" in this Item 1 for information about our reinsurance transactions mitigate the negative effect of the PMIERs on our returns. Seeand "Regulation – Direct Regulation" belowin this Item 1 for information about our compliance with the financial requirements of the PMIERs and about proposed changes to the PMIERs that are being recommended to the FHFA by the GSEs.

The private mortgage insurance industry is greatly impacted by macroeconomic conditions that affect home loan originations and credit performance of home loans, including unemployment rates, home prices, restrictions on mortgage credit due to underwriting standards, interest rates, household formations and homeownership rates. TheDuring the years leading up to the financial crisis andof the downturn in the housing market that began in 2007 had a significant negative impact on the industry and our company. During the last several years preceding the financial crisis,2000s, the mortgage lending industry increasingly made home loans to individuals with higher risk credit profiles, at higher LTV ratios,profiles. In certain sections of this Annual Report, we discuss our insurance written in 2005-2008 separately from our insurance written in earlier and based on less documentation and verification of information regarding the borrower.later years. Beginning in 2007, job creation slowed and the housing markets began slowing in certain areas, with declines in certain other areas. In 2008 and 2009, employment in the U.S. decreased substantially and nearly all geographic areas in the U.S. experienced home price declines. Together, these conditions resulted in significant adverse developments for us and our industry and we reported a net loss in each of 2007 through 2013.industry. The operating environment for private mortgage insurers has materially improved in recent yearsafter the financial crisis, as the economy recovered.

The private mortgage insurance industry also competes with alternatives to mortgage insurance, such as investors using risk mitigation and credit risk transfer techniques other than PMI, including capital market transactions structured to transfer risk of default on residentialentered into by the GSEs and banks; lenders and other investors holding mortgages investors willing to hold credit risk on their own balance sheets without credit enhancement,in portfolio and self-insuring; and “piggyback loans,” which combine a first lien loan with a second lien loan. In 2018, the GSEs initiated secondary mortgage market programs with loan level mortgage default coverage provided by various (re)insurers that are not mortgage insurers governed by PMIERs, and that are not selected by the lenders. While we view these programs as competing with traditional private mortgage insurance, we participate in them through an affiliate of MGIC.

In addition to the FHA, VA, other governmental agencies and the alternatives to mortgage insurance discussed above, we also compete with other mortgage insurers. The level of competition, including price competition, within the private mortgage insurance industry has intensifiedremained intense over the past several years and is not expected to diminish.years. See "Our Products and Services – Sales and Marketing and Competition – Competition" below for more information about the impact on our business of competition in the private mortgage insurance industry.

We are a Wisconsin corporation organized in 1984. Our principal office is located at MGIC Plaza, 250 East Kilbourn Avenue, Milwaukee, Wisconsin 53202 (telephone number (414) 347-6480). As used in this annual report, “we,” “our” and “us” refer to MGIC Investment Corporation’s consolidated operations or to MGIC

The following table shows,charts show, on a direct basis, our primary IIF and primary RIF as of December 31 for the MGIC Book as of the datesyears indicated.

For loans sold to Fannie Mae or Freddie Mac,a GSE, the coverage percentage must comply with the requirements established by the particular GSE to which the loan is delivered. The GSEs have different loan purchase programs that allow different levels of mortgage insurance coverage. Under the “charter coverage” program, on certain loans lenders may choose a mortgage insurance coverage percentage that is less than the GSEs’ “standard coverage” and only the minimum required by the GSEs’ charters, with the GSEs paying a lower price for such loans. In 2017, nearly all2022, a substantial majority of our volume was on loans with GSE standard or higher coverage.

For loans that are not sold to the GSEs, the lender determines the coverage percentage from those that we offer. Higher coverage percentages generally result in increased severity, which is the amount paid on a claim. We charge higher premium rates for higher coverage percentages. However, there can be no assurance that the higher premium rates adequately reflect the risks associated with higher coverage percentages. In accordance with GAAP for the mortgage insurance industry, loss reserves for losses are only established for policies covering delinquent loans. Because, historically,Historically, because relatively few defaultsdelinquencies occur in the early years of a book of business, the higher premium revenue from higher coverage has historically been recognized before any significant higher losses resulting from that higher coverage may be incurred. For more information, see “– Exposure“Exposure to Catastrophic Loss; Defaults;Delinquencies; Claims; Loss Mitigation – Claims.Mitigation.”

In general, mortgage insurance coverage cannot be terminated by the insurer. However, subject to certain restrictions on our rescission rights as are specified in our masterinsurance policy, and our Gold Cert Endorsement, we may terminate or rescind coverage for, among other reasons, non-payment of premium, certain material misrepresentations madeand fraud in connection with the application for the insurance policy or if the loan was never eligible for coverage under our policy. For more information including with regard to our Gold Cert Endorsement, see “– Exposure to Catastrophic Loss; Defaults; Claims; Loss Mitigation — Loss Mitigation.” Mortgage insurance coverage is renewable at the option of the insured lender, at the renewal rate fixed when the loan was initially insured. Lenders may cancel insurance written on a flow basis at any time at their option or because of mortgage repayment, which may be accelerated because of the refinancing of mortgages.

In the case of a loan purchased by Freddie Mac or Fannie Mae,a GSE, a borrower meetingmay request termination of insurance based on the home’s current value if certain conditions may requireLTV ratio and seasoning requirements are met and the mortgage servicerborrowers have an acceptable payment history. For loans seasoned between two and five years, the LTV ratio must be 75% or less, and for loans seasoned more than five years the LTV ratio must be 80% or less. If the borrower has made substantial improvements to cancel insurance upon the borrower’s request whenproperty, the principal balance ofGSEs allow for cancellation once the loan isLTV ratio reaches 80% or less of the home’s current value.

Mortgage insurance for loans secured by one-family, primary residences can be canceled under HOPA.the Homeowners Protection Act (“HOPA”). In general, HOPA requires a servicer to cancel the mortgage insurance if a borrower requests cancellation when the principal balance of the loan is first scheduled to reach 80% of

mortgage insurance is required in connection with the origination of the loan, then the premium is paid by the lender, who may recover the premium through an increase in the note rate on the mortgage or higher origination fees. Our industry refers to the related mortgage insurance as “lender-paid.”“lender-paid” or LPMI. Most of our primary IIF is borrower-paid mortgage insurance.

There are several payment plans available to the borrower, or lender, as the case may be. Under the single premium plan, the borrower or lender pays us in advance a single payment covering a specified term exceeding twelve months. Under the monthly premium plan, the borrower or lender pays us a monthly premium payment to provide only one month of coverage. Under the annual premium plan, an annual premium is paid to us in advance, with annual renewal premiums paid in advance thereafter.

In connection with the GSEs' credit risk transfer programs, we provide insurance subsidiaryand reinsurance covering portions of MGIC has provided an immaterial amountthe credit risk related to certain reference pools of credit insurance whose structure is equivalent to pool insurance. That credit insurance is not included in discussions of pool insurance contained in this annual report.mortgages acquired by the GSEs.