The Office of the Commissioner of Insurance (OCI) in Wisconsin waived until Dec. 31, 2011 a requirement that Mortgage Guaranty Insurance Corp. (MGIC) -- subsidiary of MGIC Investment Corp. ($4.37 0.0207%) -- maintain a certain minimum regulatory capital to write new mortgage guaranty policies.

It's part of MGIC's plan to continue to write new business partly through wholly-owned subsidiary MGIC Indemnity Corp. (MIC), which was recently capitalized by MGIC with $200m.

Insurance regulators are exercising more discretion in permitting mortgage insurers to continue with new business despite capital shortfalls below required levels.

The Wisconsin OCI also approved a change to MIC's business plan that involves MIC writing new business only in jurisdictions where MGIC does not meet minimum capital requirements or does not obtain a waiver of those requirements from the appropriate regulatory authority.

These actions by the OCI will help MGIC continue to write new insurance on a nationwide basis through MIC, according to a statement by MGIC chairman and CEO Curt Culver.

Mortgage giant Fannie Mae ($0.00 0%) previously approved MIC as an eligible insurer through Dec. 31, 2011. MGIC said it is still working with Freddie Mac ($0.00 0%) to obtain approval of MIC as an eligible insurer.

Write to Diana Golobay.