To write new mortgage guaranty policies
MGIC Investment Corporation’s principal subsidiary Mortgage Guaranty Insurance Corporation (MGIC) has revealed that the Office of the Commissioner of Insurance for the state of Wisconsin (OCI) has waived, until December 31, 2011, the requirement that MGIC maintain a specific level of minimum regulatory capital to write new mortgage guaranty policies.
The waiver is a further step in implementing the company’s plan to continue to write new business through a combination of MGIC and its wholly owned subsidiary, MGIC Indemnity Corporation (MIC). The OCI has also approved a change in MIC’s business plan under which MIC will write new business only in jurisdictions where MGIC does not meet minimum capital requirements similar to those waived by the OCI and does not obtain a waiver of those requirements from that jurisdiction’s regulatory authority.
Apart from Wisconsin, 16 other jurisdictions have such minimum capital requirements while the remaining jurisdictions in which MGIC does business do not have specific capital requirements applicable to mortgage insurers. The waiver may be modified, terminated, or extended by the OCI in its sole discretion.
Fannie Mae approved MIC as an eligible insurer through December 31, 2011in the jurisdictions in which MIC may write insurance under its changed business plan approved by the OCI. MIC, which was recently capitalized by MGIC with $200m, will insure new loans under the same policy terms and conditions as MGIC and will utilize MGIC’s resources for sales, operational and other services. MGIC is still working with Freddie Mac to obtain approval of MIC as an eligible insurer.