Republic Financial Indemnity Group, a subsidiary of Old Republic International (ORI), became the latest company linked to mortgage insurance to restructure under the pressures of depleted capital funding.
Old Republic announced that its RFIG division sold a 20.6% common equity interest in its individual unit to a group of investors and agreed to spin off the remaining shares of RFIG to company shareholders.
In addition, the company said Christopher Nard, president of RFIG, will become CEO and president of RFIG after the spinoff. Scott Rager was selected to succeed Nard as president.
Old Republic Mortgage Guaranty Group was re-named Republic Financial Indemnity Group earlier this year after Old Republic combined its consumer credit indemnity division with its mortgage insurance segment. The end result of the transition was the creation of RFIG, a division that includes three mortgage insurers, four service-related companies and a credit indemnity insurer.
Old Republic made it known back in March that both the mortgage and consumer credit indemnity businesses were operating in run-off mode and struggling with losses as well as a need for additional capital. At the time, the company said the best way to recapitalize the businesses would be to separate the two operations from the ORI parent company.
Rob Haines, a mortgage insurance analyst with CreditSights, has been warning about changes in the MI space as companies finally search for ways to derail risks and raise capital.
Mortgage insurer Radian Group also ended up in the headlines after one of its investors publicly advocated for the potential sale of the firm.