Commitments and Contingencies

12 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

13. COMMITMENTS AND CONTINGENCIES

We are a defendant in various litigation matters arising in the ordinary course of business, some of which involve claims for damages that are substantial in amount. Many of these litigation matters are covered by insurance (including insurance provided through a consolidated captive insurance company as further discussed below), but they may nevertheless be subject to large deductibles and the amounts being claimed may exceed the available insurance. Although we cannot determine the ultimate liability for these matters, based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.

Professional Indemnity Insurance

To better manage our global insurance program and support our risk management efforts, we supplement our traditional insurance coverage for certain types of claims by using a wholly-owned captive insurance company. The level of risk retained by us, including our captive insurance company, with respect to professional indemnity claims, is up to $10.0 million per claim. We contract third-party insurance companies to provide coverage of risk in excess of this amount. When a potential loss event occurs, we estimate the ultimate cost of the claim and accrue the amount in Other current and long-term liabilities on our Consolidated Balance Sheets when probable and estimable. In addition, we have established receivables from third-party insurance providers for claim amounts in excess of the risk retained by our captive insurance company. As of December 31, 2024 and 2023, these receivables were $0.5 million and $2.5 million, respectively, and are included in Notes and other receivables on our Consolidated Balance Sheets.

The following table shows the professional indemnity accrual activity and related payments.


(in millions)
December 31, 2021	$	1.2
New claims	1.3
Prior year claims adjustments (including foreign currency changes)	(0.1)
Claims paid	(0.2)
December 31, 2022	2.2
New claims	7.0
Prior year claims adjustments (including foreign currency changes)	5.2
Claims paid	(5.0)
December 31, 2023	9.4
New claims	1.0
Prior year claims adjustments (including foreign currency changes)	1.0
Claims paid	(7.2)
December 31, 2024	$	4.2

DUS Program Loan Loss-Sharing

As a participant in the DUS program, we retain a portion of the risk of loss for loans that are originated and sold under the DUS program. Net losses on defaulted loans are shared with Fannie Mae based upon established loss-sharing ratios. Generally, we share approximately one-third of incurred losses, subject to a cap of 20% of the principal balance of the mortgage at origination. As of December 31, 2024 and 2023, we had loans, funded and sold, subject to loss-sharing arrangements with an aggregate UPB of $23.0 billion and $20.8 billion, respectively. We incurred $0.4 million in loan losses for the year ended December 31, 2024. There were no loan losses incurred for the years ended December 31, 2023 and 2022. See "Financial Guarantees" section of Note 2, Summary of Significant Accounting Policies, for additional information.

Loan Repurchase

In August of 2024, we repurchased a loan, which we originated and sold to Fannie Mae, with an UPB of $74.25 million. For the twelve months ended December 31, 2024, we recognized net expense of $19.5 million within Operating, administrative and other expenses, for the estimated loss associated with the repurchase. This amount primarily reflected the difference between our estimate of the current fair value of the repurchased loan and the repurchase price, including amounts in excess of the UPB for items such as unpaid interest. The acquired asset is not held for investment and is included in Restricted cash, prepaid and other on our Consolidated Balance Sheets.