PMI Group Promises No Defaults If Seized Unit Is Returned

PMI Group Promises No Defaults If Seized Unit Is Returned The CEO of PMI Group Inc. has pledged that his company will not default on more than $700 million in bonds if it is allowed to regain control of its mortgage insurance unit.

Bloomberg reports that PMI Group CEO L. Stephen Smith has gone to court to regain control of PMI Mortgage Insurance Co., which was seized last month by the Arizona Department of Insurance. Smith has offered a strategy of raising up to $200 million to start writing new policies if the seizure is undone and PMI Group can operate its unit through January.

However, Arizona Director of Insurance Christina Urias has said that the company ‘is insolvent and will be for the foreseeable future,’ and she has directed claims against the seized entity to be paid at 50 cents on the dollar.

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