MGIC Delays Capital Injection For MIC Subsidiary

http://www.mgic.com][u]Mortgage Guaranty Insurance Corp.[/u][/link] (MGIC) says that, in connection with discussions to have its wholly owned subsidiary MGIC Indemnity Corp. (MIC) approved as an eligible mortgage insurer by Fannie Mae and Freddie Mac, MGIC has delayed the date on which it plans to make its first contribution of capital to MIC to a date to be determined by MGIC and acceptable to the Office of the Commissioner of Insurance of Wisconsin (OCI). MGIC says the OCI has approved the delay and that the capital expected to be contributed to MIC will be reduced. The company previously announced a plan for MIC to begin writing new mortgage insurance business as of January 1, 2010, for which the OCI allowed MGIC to contribute up to $1 billion to its subsidiary. MGIC's contribution was to be made in two $500 million installments, the first of which was to be made no later than July 31, 2009. The second contribution was to be made within five business days after January 1, 2011, if MIC was then writing new business and the contribution was not disallowed by the OCI. The plan to use MIC to write new business was driven by MGIC's concern that, in the future, MGIC might not meet regulatory capital requirements to continue to write new business. These requirements are present in certain states, while other jurisdictions do not have specific capital requirements. Because MGIC may be able to continue writing new business in jurisdictions that do not have capital requirements, MIC would need less capital, the company says. The amount of capital that MGIC would contribute to MIC will be determined as part of ongoing discussions with Fannie Mae and Freddie Mac upon their approving MIC as an eligible mortgage insurer. SOURCE: [link=http://www.mgic.com]MGIC

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