the fhfa has directed , and is likely to continue to direct , changes to the business operations of the gses in ways that affect the mortgage insurance industry . in addition , it is likely that federal legislation will be necessary to resolve the conservatorship of the gses , and such legislation could materially affect the role and charter of the gses and the operation of the housing finance system . in 2011 , the u.s. department of the treasury recommended options for winding down the gses and using a combination of federal housing policy changes to contract the government 's footprint in housing finance and restore a larger role for private capital . since 2011 , members of congress have introduced several bills intended to reform the secondary market and the role of the gses , although no comprehensive housing finance or gse reform legislation has been enacted to date . see `` businessregulationfederal laws and regulationshousing finance reform `` , `` risk factorsrisks relating to our business legislative or regulatory actions or decisions to change the role of the gses in the u.s. housing market generally , or changes to the charters of the gses with regard to the use of credit enhancements generally and private mortgage insurance specifically , could reduce our revenues or adversely affect our profitability and returns `` , and ``  changes in the business practices of the gses , including actions or decisions to decrease or discontinue the use of mortgage insurance or changes in the gses ' eligibility requirements for mortgage insurers , could reduce our revenues or adversely affect our profitability and returns . `` dodd-frank act various regulatory agencies have produced , and are now in the process of developing additional , new rules under the dodd-frank act that are expected to have a significant impact on the housing finance industry , including the qualified mortgage , or qm , definition and the risk retention requirement and related qualified residential mortgage , or qrm , definition . qm definition under the dodd-frank act , the cfpb is authorized to issue regulations governing a loan originator 's determination that , at the time a loan is originated , the consumer has a reasonable ability to repay the loan . the dodd-frank act provides a statutory presumption that a borrower will have the ability to repay a loan if the loan has characteristics satisfying the qm definition . on january 10 , 2014 , the cfpb implemented a final rule regarding qms , which we refer to as the `` qm rule `` . under the qm rule , a loan is deemed to be a qm if it has certain loan features , satisfies extensive documentation requirements and meets limitations on fees and points and aprs . the qm rule also provides for a second temporary category with more flexible requirements if the loan is eligible to be purchased or guaranteed by the gses while they are in conservatorship , which is the overwhelming majority of our business . this second temporary category still requires that loans satisfy certain criteria , including the requirement that the points and fees represent 3 % or less of the total loan amount . failure to comply with the ability-to-repay requirement exposes a lender to substantial potential liability . as a result , we believe that the qm regulations may cause changes in the lending standards and origination practices of our customers . such changes may include a further tightening of mortgage origination practices and lending standards , which may further improve the credit quality of new mortgages , but may also result in a reduction of the overall volume of mortgage originations . to the extent the use of private mortgage insurance causes a loan not to meet the definition of a qm , the volume of loans originated with mortgage insurance may decline . in addition , the impact of the mortgage insurance premiums on the calculation of points and fees for purposes of qm may influence the use of mortgage insurance , as well as our mix of premium plans and therefore our profitability . see `` factors affecting our results of operationspersistency and business mix . `` finally , to the extent that government agencies that offer mortgage insurance adopt their own definitions of a qualified mortgage and those definitions are more favorable to lenders than those applicable in the market we operate in , our business may be adversely affected . see `` businessregulationfederal laws and 74 regulationdodd-frank actqualified residential mortgage regulationsrisk retention requirements `` and `` risk factorsrisks relating to our business our business prospects and operating results could be adversely impacted if , and to the extent that , the consumer financial protection bureau 's ( `` cfpb `` ) final rule defining a qualified mortgage ( `` qm `` ) reduces the size of the origination market or creates incentives to use government mortgage insurance programs . `` risk retention requirements and qrm definition the dodd-frank act provides for an originator or issuer risk-retention requirement on securitized mortgage loans that do not meet the definition of a qrm . federal regulators issued the proposed risk-retention rule in march 2011 , and in response to public comment on such proposed rule , issued a revised proposed-risk retention rule on august 28 , 2013 , including a definition of qrm that generally defines qrm as a mortgage meeting the requirements of qm ( see `` businessregulationfederal laws and regulationsdodd-frank actqualified mortgage regulationsability to repay requirements `` ) . in addition , the regulators also requested public comments on an alternative definition that , among other things , incorporates a maximum ltv standard of 70 % and certain other restrictions selected to reduce the risk of default . neither of the revised proposed definitions of qrm incorporate the use of private mortgage insurance . story_separator_special_tag ) , as well as the profile of new business we write in the future . in addition , the default rate and the average reserve per default will be affected by future macroeconomic factors such as housing prices , interest rates and employment . other underwriting and operating expenses our other underwriting and operating expenses include components that are substantially fixed , as well as expenses that generally increase or decrease in line with the level of niw . our most significant expense is compensation and benefits for our employees , which represented 66 % , 52 % and 49 % of other underwriting and operating expenses for the years ended december 31 , 2013 , 2012 and 2011 , respectively . compensation and benefits expense includes base and incentive cash compensation , stock compensation expense , benefits and payroll taxes . compensation and benefits expense has steadily increased each period as we have increased our staffing from 103 employees at january 1 , 2011 to 289 at december 31 , 2013 , primarily in our business development and operations functions to support the growth of our business . the growth in our sales organization contributed to 79 the growth of our active customers and niw . we also expanded our underwriting and customer service teams to support this new business . depreciation and amortization expense represented 3 % , 25 % and 28 % of other underwriting and operating expenses for the years ended december 31 , 2013 , 2012 and 2011 , respectively . a significant portion of the depreciation expense recorded during 2011 and 2012 related to the assets acquired from triad for $ 30 million in cash and the assumption of certain contractual obligations under that certain asset purchase agreement , dated october 7 , 2009 , among essent guaranty , inc. and triad ( the `` asset purchase agreement `` ) . the purchase price of the assets acquired from triad was allocated primarily to acquired technology ( 94 % ) and workforce-in-place ( 4 % ) and was amortized to expense on a straight-line basis over 36 months and 48 months , respectively , from the date of acquisition . the acquired technology component of the purchase price was fully depreciated as of november 30 , 2012 and the workforce-in-place component of the purchase price was fully amortized as of november 30 , 2013 and , accordingly , depreciation and amortization expense declined in 2013 compared to prior periods . underwriting and other expenses also include legal , consulting , other professional fees , premium taxes , travel , entertainment , marketing , licensing , supplies , hardware , software , rent , utilities and other expenses . we anticipate that as we continue to add customers and increase our iif , our expenses will also continue to increase . in addition , as a result of the increase in our iif , we expect that our net premiums earned will grow faster than our underwriting and other expenses resulting in a decline in our expense ratio . further , we expect to incur incremental costs related to being a public company , including certain operating and compensation expenses . income taxes income taxes are incurred based on the amount of earnings or losses generated in the jurisdictions in which we operate and the applicable tax rates and regulations in those jurisdictions . to date , substantially all of our business activity has been conducted in the united states where we are subject to corporate level federal income taxes . our u.s. insurance subsidiaries are generally not subject to income taxes in the states in which we operate ; however , our non-insurance subsidiaries are subject to state income taxes . in lieu of state income taxes , our insurance subsidiaries pay premium taxes that are recorded in other underwriting and operating expenses . the amount of income tax expense or benefit recorded in future periods will be dependent on the jurisdictions in which we operate and the tax laws and regulations in effect . essent group ltd. and its wholly owned subsidiary , essent reinsurance , ltd. ( `` essent re `` ) , are domiciled in bermuda , which does not have a corporate income tax . to date , these entities have incurred expenses and generated limited amounts of investment income . since inception and prior to june 30 , 2013 , we recorded a valuation allowance against deferred tax assets , and , as such , we generally did not record a benefit associated with the losses incurred in prior periods or other income tax benefits . the income tax provision or benefit recognized in prior periods related to changes in our valuation allowance associated with changes in deferred tax liabilities resulting from the increase or decrease in the unrealized gain on our investment portfolio . at june 30 , 2013 , after weighing all the evidence , we concluded that it was more likely than not that our deferred tax assets would be realized . as a result , through december 31 , 2013 , we have released the valuation allowance on our deferred tax assets . the release of the valuation allowance resulted in the recognition of a net $ 7.4 million benefit for federal income taxes in the year ended december 31 , 2013. starting in 2014 , we expect that our effective tax rate will approach the statutory tax rate . 80 mortgage insurance earnings and cash flow cycle in general , the majority of any underwriting profit ( premium revenue minus losses ) that a book generates occurs in the early years of the book , with the largest portion of any underwriting profit realized in the first year . subsequent years of a book generally result in modest underwriting profit or underwriting losses . this pattern generally occurs because relatively few of the claims that a book will ultimately experience typically occur in

liquidity and capital resources overview our sources of funds consist primarily of : our investment portfolio and interest income on the portfolio ; net premiums that we will receive from our existing iif as well as policies that we write in the future ; and issuance of capital shares . our obligations consist primarily of : claim payments under our policies ; and 92 the other costs and operating expenses of our business . as of december 31 , 2013 , we had substantial liquidity in addition to our investment portfolio , with $ 477.7 million of cash , which includes $ 244.2 million at the holding company . our cash position increased during the year ended december 31 , 2013 primarily as a result of net proceeds of $ 313.7 million from our initial public offering of common shares which was completed in november 2013 , $ 123.9 million in net capital contributions received from our initial investors plus cash flows from operations , net of amounts invested in our fixed income portfolio . as of december 31 , 2013 , we have $ 810.2 million in cash and investments and no debt . management believes that the company has sufficient liquidity available both at the holding company and in its insurance and other operating subsidiaries to meet its operating cash needs and obligations and committed capital expenditures for the next 12 months . while the company and all of its subsidiaries are expected to have sufficient liquidity to meet all their expected obligations , additional capital may be required to meet any new capital requirements that are adopted by regulatory authorities or the gses , or to provide additional capital related to the growth of our risk in force in our insurance portfolio , or to fund new business initiatives .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources overview our sources of funds consist primarily of : our investment portfolio and interest income on the portfolio ; net premiums that we will receive from our existing iif as well as policies that we write in the future ; and issuance of capital shares . our obligations consist primarily of : claim payments under our policies ; and 92 the other costs and operating expenses of our business . as of december 31 , 2013 , we had substantial liquidity in addition to our investment portfolio , with $ 477.7 million of cash , which includes $ 244.2 million at the holding company . our cash position increased during the year ended december 31 , 2013 primarily as a result of net proceeds of $ 313.7 million from our initial public offering of common shares which was completed in november 2013 , $ 123.9 million in net capital contributions received from our initial investors plus cash flows from operations , net of amounts invested in our fixed income portfolio . as of december 31 , 2013 , we have $ 810.2 million in cash and investments and no debt . management believes that the company has sufficient liquidity available both at the holding company and in its insurance and other operating subsidiaries to meet its operating cash needs and obligations and committed capital expenditures for the next 12 months . while the company and all of its subsidiaries are expected to have sufficient liquidity to meet all their expected obligations , additional capital may be required to meet any new capital requirements that are adopted by regulatory authorities or the gses , or to provide additional capital related to the growth of our risk in force in our insurance portfolio , or to fund new business initiatives .
```    
 Suspicious Activity Report : the fhfa has directed , and is likely to continue to direct , changes to the business operations of the gses in ways that affect the mortgage insurance industry . in addition , it is likely that federal legislation will be necessary to resolve the conservatorship of the gses , and such legislation could materially affect the role and charter of the gses and the operation of the housing finance system . in 2011 , the u.s. department of the treasury recommended options for winding down the gses and using a combination of federal housing policy changes to contract the government 's footprint in housing finance and restore a larger role for private capital . since 2011 , members of congress have introduced several bills intended to reform the secondary market and the role of the gses , although no comprehensive housing finance or gse reform legislation has been enacted to date . see `` businessregulationfederal laws and regulationshousing finance reform `` , `` risk factorsrisks relating to our business legislative or regulatory actions or decisions to change the role of the gses in the u.s. housing market generally , or changes to the charters of the gses with regard to the use of credit enhancements generally and private mortgage insurance specifically , could reduce our revenues or adversely affect our profitability and returns `` , and ``  changes in the business practices of the gses , including actions or decisions to decrease or discontinue the use of mortgage insurance or changes in the gses ' eligibility requirements for mortgage insurers , could reduce our revenues or adversely affect our profitability and returns . `` dodd-frank act various regulatory agencies have produced , and are now in the process of developing additional , new rules under the dodd-frank act that are expected to have a significant impact on the housing finance industry , including the qualified mortgage , or qm , definition and the risk retention requirement and related qualified residential mortgage , or qrm , definition . qm definition under the dodd-frank act , the cfpb is authorized to issue regulations governing a loan originator 's determination that , at the time a loan is originated , the consumer has a reasonable ability to repay the loan . the dodd-frank act provides a statutory presumption that a borrower will have the ability to repay a loan if the loan has characteristics satisfying the qm definition . on january 10 , 2014 , the cfpb implemented a final rule regarding qms , which we refer to as the `` qm rule `` . under the qm rule , a loan is deemed to be a qm if it has certain loan features , satisfies extensive documentation requirements and meets limitations on fees and points and aprs . the qm rule also provides for a second temporary category with more flexible requirements if the loan is eligible to be purchased or guaranteed by the gses while they are in conservatorship , which is the overwhelming majority of our business . this second temporary category still requires that loans satisfy certain criteria , including the requirement that the points and fees represent 3 % or less of the total loan amount . failure to comply with the ability-to-repay requirement exposes a lender to substantial potential liability . as a result , we believe that the qm regulations may cause changes in the lending standards and origination practices of our customers . such changes may include a further tightening of mortgage origination practices and lending standards , which may further improve the credit quality of new mortgages , but may also result in a reduction of the overall volume of mortgage originations . to the extent the use of private mortgage insurance causes a loan not to meet the definition of a qm , the volume of loans originated with mortgage insurance may decline . in addition , the impact of the mortgage insurance premiums on the calculation of points and fees for purposes of qm may influence the use of mortgage insurance , as well as our mix of premium plans and therefore our profitability . see `` factors affecting our results of operationspersistency and business mix . `` finally , to the extent that government agencies that offer mortgage insurance adopt their own definitions of a qualified mortgage and those definitions are more favorable to lenders than those applicable in the market we operate in , our business may be adversely affected . see `` businessregulationfederal laws and 74 regulationdodd-frank actqualified residential mortgage regulationsrisk retention requirements `` and `` risk factorsrisks relating to our business our business prospects and operating results could be adversely impacted if , and to the extent that , the consumer financial protection bureau 's ( `` cfpb `` ) final rule defining a qualified mortgage ( `` qm `` ) reduces the size of the origination market or creates incentives to use government mortgage insurance programs . `` risk retention requirements and qrm definition the dodd-frank act provides for an originator or issuer risk-retention requirement on securitized mortgage loans that do not meet the definition of a qrm . federal regulators issued the proposed risk-retention rule in march 2011 , and in response to public comment on such proposed rule , issued a revised proposed-risk retention rule on august 28 , 2013 , including a definition of qrm that generally defines qrm as a mortgage meeting the requirements of qm ( see `` businessregulationfederal laws and regulationsdodd-frank actqualified mortgage regulationsability to repay requirements `` ) . in addition , the regulators also requested public comments on an alternative definition that , among other things , incorporates a maximum ltv standard of 70 % and certain other restrictions selected to reduce the risk of default . neither of the revised proposed definitions of qrm incorporate the use of private mortgage insurance . story_separator_special_tag ) , as well as the profile of new business we write in the future . in addition , the default rate and the average reserve per default will be affected by future macroeconomic factors such as housing prices , interest rates and employment . other underwriting and operating expenses our other underwriting and operating expenses include components that are substantially fixed , as well as expenses that generally increase or decrease in line with the level of niw . our most significant expense is compensation and benefits for our employees , which represented 66 % , 52 % and 49 % of other underwriting and operating expenses for the years ended december 31 , 2013 , 2012 and 2011 , respectively . compensation and benefits expense includes base and incentive cash compensation , stock compensation expense , benefits and payroll taxes . compensation and benefits expense has steadily increased each period as we have increased our staffing from 103 employees at january 1 , 2011 to 289 at december 31 , 2013 , primarily in our business development and operations functions to support the growth of our business . the growth in our sales organization contributed to 79 the growth of our active customers and niw . we also expanded our underwriting and customer service teams to support this new business . depreciation and amortization expense represented 3 % , 25 % and 28 % of other underwriting and operating expenses for the years ended december 31 , 2013 , 2012 and 2011 , respectively . a significant portion of the depreciation expense recorded during 2011 and 2012 related to the assets acquired from triad for $ 30 million in cash and the assumption of certain contractual obligations under that certain asset purchase agreement , dated october 7 , 2009 , among essent guaranty , inc. and triad ( the `` asset purchase agreement `` ) . the purchase price of the assets acquired from triad was allocated primarily to acquired technology ( 94 % ) and workforce-in-place ( 4 % ) and was amortized to expense on a straight-line basis over 36 months and 48 months , respectively , from the date of acquisition . the acquired technology component of the purchase price was fully depreciated as of november 30 , 2012 and the workforce-in-place component of the purchase price was fully amortized as of november 30 , 2013 and , accordingly , depreciation and amortization expense declined in 2013 compared to prior periods . underwriting and other expenses also include legal , consulting , other professional fees , premium taxes , travel , entertainment , marketing , licensing , supplies , hardware , software , rent , utilities and other expenses . we anticipate that as we continue to add customers and increase our iif , our expenses will also continue to increase . in addition , as a result of the increase in our iif , we expect that our net premiums earned will grow faster than our underwriting and other expenses resulting in a decline in our expense ratio . further , we expect to incur incremental costs related to being a public company , including certain operating and compensation expenses . income taxes income taxes are incurred based on the amount of earnings or losses generated in the jurisdictions in which we operate and the applicable tax rates and regulations in those jurisdictions . to date , substantially all of our business activity has been conducted in the united states where we are subject to corporate level federal income taxes . our u.s. insurance subsidiaries are generally not subject to income taxes in the states in which we operate ; however , our non-insurance subsidiaries are subject to state income taxes . in lieu of state income taxes , our insurance subsidiaries pay premium taxes that are recorded in other underwriting and operating expenses . the amount of income tax expense or benefit recorded in future periods will be dependent on the jurisdictions in which we operate and the tax laws and regulations in effect . essent group ltd. and its wholly owned subsidiary , essent reinsurance , ltd. ( `` essent re `` ) , are domiciled in bermuda , which does not have a corporate income tax . to date , these entities have incurred expenses and generated limited amounts of investment income . since inception and prior to june 30 , 2013 , we recorded a valuation allowance against deferred tax assets , and , as such , we generally did not record a benefit associated with the losses incurred in prior periods or other income tax benefits . the income tax provision or benefit recognized in prior periods related to changes in our valuation allowance associated with changes in deferred tax liabilities resulting from the increase or decrease in the unrealized gain on our investment portfolio . at june 30 , 2013 , after weighing all the evidence , we concluded that it was more likely than not that our deferred tax assets would be realized . as a result , through december 31 , 2013 , we have released the valuation allowance on our deferred tax assets . the release of the valuation allowance resulted in the recognition of a net $ 7.4 million benefit for federal income taxes in the year ended december 31 , 2013. starting in 2014 , we expect that our effective tax rate will approach the statutory tax rate . 80 mortgage insurance earnings and cash flow cycle in general , the majority of any underwriting profit ( premium revenue minus losses ) that a book generates occurs in the early years of the book , with the largest portion of any underwriting profit realized in the first year . subsequent years of a book generally result in modest underwriting profit or underwriting losses . this pattern generally occurs because relatively few of the claims that a book will ultimately experience typically occur in

