The GSEs released the revised PMIERs ("PMIERs 2.0") on September 27, 2018 and have indicated that the PMIERs 2.0 framework will take effect on March 31, 2019. Essent expects to remain in full compliance with the existing and revised PMIERs, as applicable, prior to and after March 31, 2019.
insurance companies is computed based on accounting practices prescribed or permitted by the Pennsylvania Insurance Department. See additional discussion in "-Liquidity and Capital Resources-Insurance Company Capital."
Net premiums earned increased in the year ended December 31, 2018 by 23% compared to the year ended December 31, 2017 due to the increase in our average IIF from $96.0 billion in 2017 to $123.4 billion in 2018, partially offset by the decrease in the average net premium rate from 0.53% for the year ended December 31, 2017 to 0.50% for the year ended December 31, 2018. The decrease in the average net premium rate during the year ended December 31, 2018 is primarily due to premiums
Compensation and benefits decreased primarily due to a decrease in stock compensation expense associated with the full vesting of grants issued in 2013 and 2014, partially offset by an increase in payroll taxes associated with the vesting of these grants and increases in salaries, wages and bonus. Compensation and benefits includes salaries, wages and bonus, stock compensation expense, benefits and payroll taxes.
As of December 31, 2018, we had substantial liquidity with cash of $64.9 million, short-term investments of $154.4 million and fixed maturity investments of $2.6 billion. We also had $275 million available capacity under the revolving credit component of our Credit Facility, with $225 million of term borrowings outstanding under our Credit Facility. Borrowings under the Credit Facility contractually mature on May 17, 2021. At December 31, 2018, net cash and investments at the holding company were $78.4 million.
Cash flow used in financing activities totaled $57.0 million for the year ended December 31, 2018 and primarily related to treasury stock acquired from employees to satisfy tax withholding obligations and net repayments of borrowings under the Credit Facility. Cash flow provided by financing activities totaled $337.6 million for the year ended December 31, 2017 and primarily related to proceeds from the public offering of common shares completed in August 2017 and $150 million of net increased borrowings under the Credit Facility, partially offset by treasury stock acquired from employees to satisfy tax withholding obligations. Cash flow provided by financing activities totaled $93.7 million for the year ended December 31, 2016 and primarily related to the $100 million borrowing under the Credit Facility. The proceeds of this borrowing were contributed to Essent Re to support new business.
The following tables includes municipal securities for states that represent more than 10% of the total municipal bond position as of December 31, 2018:
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update is intended to provide a consistent approach in recognizing revenue. In accordance with the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In December 2016, the FASB clarified that all contracts that are within the scope of Topic 944, Financial Services-Insurance, are excluded from the scope of ASU 2014-09. The Company adopted this ASU effective January 1, 2018. The adoption of this ASU did not have a material effect on the Company's consolidated operating results or financial position.