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The bill, which garnered broad support including the Arizona DOI, was designed to provide the insurance regulator discretion in working with mortgage insurers that fall below the required MPP. Legislators and the DOI recognized that MPP is one factor, but should not be the sole determinant in evaluating mortgage insurers' ability to write new business. The reform can provide necessary relief as mortgage insurers pursue restructuring of portfolios and rebuilding capital levels. Presently, 16 states have mortgage insurance statutes or regulations that prescribe either a maximum risk-to-capital ratio or MPP. The remaining 34 states do not have explicit minimum capital requirements.
"Broad support of this regulatory reform reflects the confidence in Arizona's Department of Insurance as well as the current realities of the housing crisis and its impact on mortgage insurance companies," said Steve Smith, Chairman and CEO of The PMI Group, Inc. "A guiding principal of the mortgage insurance industry is supporting sustainable homeownership and the ability to write new business is a critical factor in the recovery of the U.S. housing market."
About The PMI Mortgage Insurance Co.
The PMI Mortgage Insurance Co. (NYSE: PMI), is headquartered in Walnut Creek, CA and provides credit enhancement solutions that expand homeownership while supporting our customers and the communities they serve. Through its wholly and partially owned subsidiaries, PMI offers residential mortgage insurance and credit enhancement products. For more information: www.pmi-us.com.
Cautionary Statement: Statements in this press release that are not historical facts, or that relate to future plans, events or performance are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that forward-looking statements by their nature involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements. Such factors include, among others:
-- our expectation that, as a result of continued losses, we will need to
raise significant additional capital and that such additional capital
may be necessary in 2009;
-- the risk that we may be unable to maintain minimum regulatory
risk-to-capital and policyholders surplus requirements in Arizona and
other states as early as the third or fourth quarters of 2009;
-- there is no assurance that the Arizona Department of Insurance will
exercise its discretion to permit PMI to write new business in the event
PMI does not meet the minimum policyholders position required by Arizona
law. Moreover, even if the Arizona Department of Insurance permits PMI
to continue writing new business, it may be unable to write new business
in other states in which PMI fails to meet regulatory capital
requirements, and regulators in other states could take the position
that PMI must suspend writing new business nationwide. In states that
do not have capital adequacy requirements, it is not clear what actions
the applicable regulators would take if PMI failed to meet the capital
adequacy requirement established by another state. Accordingly, if PMI
fails to meet the capital adequacy requirements in one or more states,
PMI may have to immediately suspend writing business in some or all
states in which it does business.
Other risks and uncertainties are discussed in our SEC filings, including in Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, filed August 7, 2009, and of our Annual Report on Form 10-K for the year ended December 31, 2008. We undertake no obligation to update forward-looking statements.
SOURCE The PMI Mortgage Insurance Co.
http://www.pmi-us.com
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