Essent Group Ltd. (“Essent” or the “Company”) recognizes that a Related Person Transaction (as defined below) can
present potential or actual conflicts of interest between the interests of the Related Person (as defined below) and the
interests of the Company and its subsidiaries. The Company’s Code of Business Conduct and Ethics provides that
all conflicts of interest should be avoided. It is the Company’s policy to review any Related Person Transaction. The
Company’s Board of Directors (the “Board”), acting through the Audit Committee (the “Committee”) or as otherwise
described herein, shall review the Related Person Transaction in question to determine whether the Related Person
Transaction is in, or is not inconsistent with, the best interests of the Company, including but not limited to situations
where the Company may obtain products or services of a nature, quantity or quality, or on other terms, that are not readily
available from alternative sources or when the Company provides products or services to Related Persons (as defined
below) on an arm’s length basis on terms comparable to those provided to unrelated third parties or on terms comparable
to those provided to associates generally. If, after any such review, a Related Person Transaction is determined to be in, or
not inconsistent with, the best interests of the Company, then the Related Person Transaction may be approved or ratified
as set forth in the procedures below.
The Committee will review and may amend this policy from time to time.
For purposes of this policy, a “Related Person Transaction” is:
For purposes hereof, a “Related Person” is:
An “immediate family member” includes the spouse, parents, stepparents, children, stepchildren, siblings, mothers- and
fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and any person (other than a tenant or employee)
sharing the household of a director, executive officer, director nominee or greater than 5% security holder of the Company.
An “affiliate” of a person or an immediate family member means any firm, corporation or other entity in which such person
is employed or is an officer, partner or principal or in a similar position or in which such person has a 5% or greater
beneficial ownership interest and any charitable or non-profit organization for which such person is actively involved in
fundraising or otherwise serves as a director, trustee or in a similar capacity.
Before entering into the Related Person Transaction, (i) the Related Person, (ii) the director, executive officer, nominee
or beneficial owner who is an immediate family member of the Related Person, and/or (iii) the business unit or function/
department leader responsible for the potential Related Person Transaction will provide notice to the Chief Legal Officer of
the facts and circumstances of the potential transaction. The notice should include the following information:
If the Chief Legal Officer determines that the proposed transaction is a Related Person Transaction, the proposed Related
Person Transaction shall be submitted to the Committee for consideration at the next regularly scheduled Committee
meeting or, in those instances in which the Chief Legal Officer, in consultation with the Chief Executive Officer or the Chief
Financial Officer, determines that it is not practicable or desirable for the Company to wait until the next regularly scheduled
Committee meeting, to the Chair of the Committee (who shall possess delegated authority to act between Committee
The Committee, or where submitted to the Chair, the Chair, shall consider all of the relevant facts and circumstances
available to the Committee or the Chair, including (if applicable) but not limited to: the benefits to the Company; the
impact on a director’s independence in the event the Related Person is a director, an immediately family member of a
director or an entity in which a director is a partner, shareholder or executive officer; the availability of other sources for
comparable products or services; the terms of the transaction; and the terms available to unrelated third parties or to
associates generally. The Committee (or the Chair) shall approve only those Related Person Transactions that are in, or
are not inconsistent with, the best interests of the Company, as the Committee (or the Chair) determines in good faith. The
Committee or Chair, as applicable, shall convey the decision to the Chief Legal Officer, who shall convey the decision to
the appropriate persons within the Company.
The Chair of the Committee shall report to the Committee at the next Committee meeting any approval under this policy
pursuant to delegated authority.
If a member of the Committee, or his or her immediate family member or affiliate, is involved in the Related Person
Transaction, that member shall not participate or vote in determining whether the Related Person Transaction shall be
approved or ratified by the Committee; however, such director shall provide all material information concerning the Related
Person Transaction to the Committee, and such director may be counted in determining the presence of a quorum at a
meeting of the Committee acting on the transaction.
If the Related Person Transaction will be ongoing, the Committee may establish guidelines for the Company’s management
to follow in its ongoing dealings with the Related Person.
In the event the Company becomes aware of a Related Person Transaction with a Related Person that has not been
approved under this policy prior to the consummation of the Related Person Transaction, the matter shall be promptly
reviewed by the Committee. The Committee shall consider all of the relevant facts and circumstances regarding the
Related Person Transaction, including the items listed above, and shall evaluate all options available to the Company,
including ratification, revision or termination of the Related Person Transaction. The Committee shall also examine the facts
and circumstances pertaining to the failure of reporting such Related Person Transaction to the Committee under this
policy, and shall take any such action it deems appropriate.
The Committee will, on at least an annual basis, review and consider any previously approved or ratified Related Person
Transactions that remain ongoing to determine, based on the then-existing facts and circumstances, including the
Company’s existing contractual or other obligations, if it is in the best interests of the Company to continue, modify or
terminate the ongoing Related Person Transactions.
The Committee shall have the authority to approve in advance categories of Related Person Transactions that (unless
the Committee determines otherwise in a particular instance) need not be individually reported to, reviewed by, and/or
approved or ratified by the Committee but may instead be reported to and reviewed by the Committee collectively on a
periodic basis, which shall be at least annually.
The Committee has determined that each of the types of Related Person Transactions listed below shall be deemed to be
pre-approved or ratified, even if the aggregate amount involved exceeds $120,000 and shall not require review or approval
by the Committee:
All Related Person Ttransactions are to be disclosed to the extent and in the manner required by all applicable legal,
regulatory and listing requirements including the Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, and the related rules and regulations promulgated thereunder.
This policy has been approved by the Board and shall become effective upon the closing of the initial public
offering of the Company’s common shares.
Last Updated: October 30, 2013