Insurance Regulator Waives MGIC's Capital Requirement
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. (MTG) -- 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 (FNM) previously approved MIC as an eligible insurer through Dec. 31, 2011. MGIC said it is still working with Freddie Mac (FRE) to obtain approval of MIC as an eligible insurer. Write to Diana Golobay.