RREAG, US Branch must file an annual report of its risk-based capital levels with the NYDFS. If the report shows RREAG, US Branch’s total adjusted capital is below certain levels, RREAG, US Branch may be required to take certain corrective action or the NYDFS may be permitted or required to take certain regulatory action. As of December 31, 2021, we believe RREAG, US Branch’s total adjusted capital exceeded the company action level and regulatory action level thresholds. RREAG, US Branch does not pay ordinary dividends and would need approval from the NYDFS for any return of capital to RREAG. Reinsurance Regulation . The insurance laws of each U.S. state regulate the sale of reinsurance to licensed ceding insurers by non-admitted alien reinsurers acting from locations outside the state. With some exceptions, the sale of insurance within a jurisdiction where the insurer is not admitted to do business is prohibited. Our Bermuda-domiciled insurance operations and joint ventures (principally Renaissance Reinsurance, DaVinci, Top Layer Re, RenaissanceRe Specialty U.S., Upsilon RFO and Vermeer) are all admitted to transact insurance business in Bermuda and do not maintain an office or solicit, advertise, settle claims or conduct other insurance activities in any other jurisdiction where the conduct of such activities would require that any company be so admitted. RenaissanceRe Underwriting Managers U.S. LLC is licensed by the Connecticut Department of Insurance as a reinsurance intermediary broker and is required to maintain its reinsurance intermediary broker license in force in order to conduct its reinsurance operations in Connecticut. Although reinsurance contract terms and rates are generally not subject to regulation by state insurance authorities, a primary U.S. insurer ordinarily will enter into a reinsurance agreement only if it can obtain credit on its statutory financial statements for the reinsurance ceded. State insurance regulators permit U.S. ceding insurers to take credit for reinsurance ceded to non-admitted, non-U.S. (alien) reinsurers if the reinsurance contract contains certain minimum provisions and if the reinsurance obligations of the non-U.S. reinsurer are appropriately collateralized. Qualifying collateral may be established by an alien reinsurer exclusively for a single U.S. ceding company. Alternatively, an alien reinsurer that is accredited by a state may establish a multi-beneficiary trust with qualifying assets equal to its reinsurance obligations to all of its U.S. ceding insurers, plus trusteed surplus. Renaissance Reinsurance, DaVinci and RREAG have all established multi-beneficiary trusts with a qualifying financial institution in New York for the benefit of their respective U.S. cedants. States also permit U.S. ceding insurers to take credit for reinsurance ceded to non-admitted alien reinsurers that post collateral in amounts less than one hundred percent of their reinsurance obligations if the reinsurer (i) has been designated as a “certified reinsurer” and (ii) is domiciled in a country recognized by the state and the NAIC as a “qualified” jurisdiction. A certified reinsurer is a non-U.S. reinsurer that, based on a secure rating assigned by a U.S. state insurance regulator upon an assessment of the reinsurer’s financial condition, financial strength ratings and other factors, may post a reduced collateral amount. Bermuda, the U.K. and Switzerland are listed as qualified jurisdictions by the NAIC, and each of Renaissance Reinsurance, RenaissanceRe Specialty U.S., DaVinci and RREAG has been approved as a “certified reinsurer” eligible for collateral reduction in various states. States also permit U.S. ceding insurers to take credit for reinsurance ceded to non-admitted alien reinsurers that post zero collateral if the reinsurer (i) has been designated as a “reciprocal jurisdiction reinsurer” and (ii) is domiciled in a country recognized by the state and the NAIC as a “qualified” jurisdiction. Bermuda, the U.K. and Switzerland are listed as qualified jurisdictions by the NAIC, and each of Renaissance Reinsurance, RenaissanceRe Specialty U.S., DaVinci and RREAG has been approved as a “reciprocal jurisdiction reinsurer” eligible for zero collateral in various states. NAIC Ratios . The NAIC has established 13 financial ratios to assist state insurance departments in their oversight of the financial condition of licensed property and casualty insurance companies. The NAIC’s Insurance Regulatory Information System calculates these ratios based on information submitted by insurers on an annual basis and shares the information with the applicable state insurance departments. Each ratio has an established “usual range” of results and assists state insurance departments in executing their statutory mandate to oversee the financial condition of insurance companies. A ratio result falling outside the usual range of such ratios is not considered a failing result; rather, unusual values are viewed as part of the regulatory early monitoring system. Furthermore, in some years, it may not be unusual for financially sound companies to have several ratios with results outside the usual ranges. An insurance company may fall outside of the usual range for one or more ratios because of specific transactions that are themselves immaterial. 25