Good morning, ladies and gentlemen, and welcome to Genworth's Financial Third Quarter 2023 Earnings Conference Call. My name is Lisa, and I will be your coordinator today. [Operator Instructions]. I would now like to turn the presentation over to Brian Johnson, Senior Vice President of Financial Planning and Analysis. Please go ahead.

Thank you, and good morning. Welcome to Genworth's Third Quarter 2023 Earnings Call. The slide presentation that accompanies this call is available on the Investor Relations section of the Genworth's website investor.genworth.com. Our earnings release and financial supplement can also be found there, and we encourage you to review these materials. Speaking today will be Tom McInerney, President and Chief Executive Officer; and Jerome Upton, Chief Financial Officer. Following our prepared remarks, we will open up the call for a question-and-answer period. In addition to our speakers, Brian Haendiges, President of our U.S. Life Insurance business; and Kelly Saltzgaber, Chief Investment Officer, will also be available to take your questions. During the call this morning, we may make various forward-looking statements. Our actual results may differ materially from such statements. We advise you to read the cautionary notes regarding forward-looking statements in our earnings release and related presentation as well as the risk factors of our most recent annual report on Form 10-K as filed with the SEC. This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors. In our investor materials, non-GAAP measures have been reconciled to GAAP where required in accordance with SEC rules. Also, references to statutory results are estimates due to the timing of the filing of the statutory statements. And now I'll turn the call over to our President and CEO, Tom McInerney.

Thank you, Brian. Good morning, everyone, and thank you for joining our third quarter earnings call. Genworth continued to make progress against our strategic priorities in the third quarter as we deliver long-term growth and drive shareholder value. In the third quarter, Genworth reported net income of $29 million or $0.06 per diluted share and adjusted operating income of $42 million or $0.09 per diluted share. Enact again, had a very strong quarter with adjusted operating income of $134 million to Genworth. We are very pleased with Enact continued strong operating performance and capital levels. LTC had an adjusted operating loss of $71 million, driven by a liability remeasurement loss under LDTI. Investors can refer to Slide 20 in our slide presentation and our commentary from last quarter for more details on how differences in our actual to expected experience drive quarterly volatility in this line item. On a statutory accounting basis, pretax income for the U.S. Life Insurance companies is estimated at $30 million, driven by $21 million of pretax earnings in LTC. Complete statutory results for our U.S. Life Insurance companies will be available when we file our third quarter statutory statements later this month. As a reminder, we believe investors should evaluate LTC results under both U.S. GAAP and U.S. statutory accounting to have a more complete understanding of LTC results. Turning to our 3 strategic priorities. We continue to improve the financial condition of our legacy LTC business primarily through our multiyear rate action plan or MYRAP, the most effective tool we have to bring our legacy LTC insurance portfolio to breakeven on a go-forward basis. We achieved a total of $83 million of gross incremental premium approved in the third quarter resulting in a total of $227 million of premium approved year-to-date. This brings our…

Thank you, Tom, and good morning, everyone. I'm pleased with the ongoing value creation delivered by Enact, progress on in-force rate actions as well as our progress on capital optimization and improving financial flexibility. I'll first discuss the quarterly results and drivers in more detail and then provide a preview of our fourth quarter assumption review process. I'll also give an update on our capital position and investment portfolio. In the third quarter, Genworth delivered net income of $29 million or $0.06 per diluted share and adjusted operating income of $42 million or $0.09 per diluted share. These results were primarily driven by Enact, which delivered $134 million in adjusted operating income to Genworth, reflecting ongoing solid business fundamentals and favorable loss performance. Enact results are detailed on Slide 6. Primary insurance in force increased 8% year-over-year to a record $262 billion driven by new insurance written and continued elevated persistency. Slide 7 shows Enact had a favorable $55 million reserve release, which drove a loss ratio of 7%. The reserve release primarily reflects favorable cure performance on 2022 and earlier delinquencies. Both Enact's prior quarter and prior year results included favorable net reserve releases as well totaling $63 million and $80 million, respectively. Enact has a strong estimated PMIER sufficiency ratio of 162%, approximately $2 billion above PMIERs requirements. Enact's quarterly dividend payment of $0.16 per share generated proceeds of $21 million to Genworth in September. Enact recently announced this Board approved a special cash dividend of $113 million payable in December and has reiterated its commitment to return a total of approximately $300 million to its shareholders this year. Based on our 81.6% ownership position, we continue to expect to receive $245 million from Enact through its quarterly dividends, share repurchases and special dividend for the full year.…

[Operator Instructions]. And we'll move to our first question. George with Ardent Financial as our first question.

Yes. So I have like two questions that I wanted to ask. First one is around that [indiscernible] concern, but it seems like you've addressed that. So another question that I wanted to ask was around the negative [indiscernible] at year-end. I think the balance was around $659 million as you're saying that you see this finance you can really have dividend or money being used for some of your life insurance companies. So I wanted to ask how far -- where is that balance at the moment? And are you addressing any -- can you expect to see any changes around like the [indiscernible] from those companies intention?

So you were breaking up a little bit, so I'm not sure I got all of the question, but -- so our plan at this point for excess cash is to invest in our CareScout business to grow that, and we're making good progress on that and to buy back shares. At this point, we do not have -- we don't pay a regular dividend nor do we anticipate doing that in the near future given that when we talk to our shareholders, the overwhelming majority of them would prefer that we return excess cash and share repurchases versus dividends. So that's why we've chosen to return capital through the buyback program.

Okay. And then my second question was just around the negative unassigned surplus. Last year, year end it was around , you have an update in terms of like where is [indiscernible]?

Gordon, this is Jerome Upton. Thank you for the question. Our unassigned surplus in our GLIC, which is our consolidating life insurance company, it's not positive, it's negative, and it's roughly around $700 million. And as you probably know, when you have negative unassigned surplus, it's very difficult to get any type of dividend out of those regulated entities. And I think I would just highlight for you in Tom's prepared remarks, he actually indicated that we would not put capital in the U.S. Life business nor extract capital out of the U.S. Life business. So the numbers that I have are the unassigned surplus is actually negative $700 million.

[Operator Instructions]. Ladies and gentlemen, as there are no further questions, I will now turn the call back over to Mr. McInerney for closing comments.

Thank you very much, Lisa, and thanks to all of you for joining the call today. In closing, we are very pleased with Enact's strong operating performance, our progress with CareScout, the progress we've made on Genworth's 3 strategic priorities, and we are confident in our long-term strategy. I want to thank all of our investors and others on the call for your interest and support to Genworth and we'll see you next quarter. And with that, I'll turn the call back over to Lisa to close the call.

Ladies and gentlemen, this concludes Genworth Financial's third quarter conference call. Thank you for your participation. At this time, the call will end.