Genworth Spins Mortgage Insurance Unit Into Separate Company

13112_e012813 Genworth Spins Mortgage Insurance Unit Into Separate Company Richmond, Va.-based Genworth Financial Inc. has announced that it has begun to spin off Genworth Mortgage Insurance Co. (GMICO), the company's main U.S. mortgage insurance subsidiary, into a stand-alone company.

As part of the plan, Genworth has obtained government-sponsored enterprise approvals to implement a ‘NewCo’ type structure that would allow for the continued writing of new business in all 50 states. Ownership of Genworth's European mortgage insurance subsidiaries will be moved under GMICO.

Furthermore, Genworth is implementing an internal legal entity reorganization which creates a new holding company structure that will remove the U.S. mortgage insurance subsidiaries from the companies covered by the indenture governing Genworth's senior notes. Genworth will also contribute $100 million to GMICO as part of the comprehensive capital plan.

The plans have been approved by GMICO's domestic regulator, the North Carolina Department of Insurance, and the company anticipates completing the reorganization in the second quarter.

‘We are very pleased to announce a comprehensive plan for the U.S. mortgage insurance business which reduces linkages and dependencies with the holding company and increases our financial flexibility while bolstering capital in the business,’ says Martin P. Klein, chief financial officer. ‘U.S. mortgage insurance is a key component of our global mortgage insurance division, and we believe implementation of this plan will increase shareholder value by continuing our ability to write profitable new business while at the same time reducing uncertainties related to our U.S. mortgage insurance subsidiaries.’


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