MGIC Investment Corp.'s principal subsidiary, Mortgage Guaranty Insurance Corp. (MGIC), says the Office of the Commissioner of Insurance for the State of Wisconsin (OCI) has waived, until Dec. 31, 2011, the requirement that MGIC maintain a specific level of minimum regulatory capital to write new mortgage guaranty policies.
The waiver is a further step in implementing the company's plan to continue to write new business through a combination of MGIC and its wholly owned subsidiary, MGIC Indemnity Corp. (MIC), the company says.
The OCI also approved a change in MIC's business plan under which MIC will write new business only in jurisdictions where MGIC does not meet minimum capital requirements similar to those waived by the OCI and does not obtain a waiver of those requirements from that jurisdiction's regulatory authority. In addition to Wisconsin, 16 other jurisdictions have such minimum capital requirements while the remaining jurisdictions in which MGIC does business do not have specific capital requirements applicable to mortgage insurers.
As previously disclosed, Fannie Mae approved MIC as an eligible insurer through Dec. 31, 2011,in the jurisdictions in which MIC may write insurance under its changed business plan approved by the OCI. Fannie Mae's approval was subject to certain conditions, including the OCI waiving the minimum regulatory capital requirement for MGIC to continue to write new business.
MIC, which was recently capitalized by MGIC with $200 million, will insure new loans under the same policy terms and conditions as MGIC and will utilize MGIC's resources for sales, operational and other services. MGIC is still working with Freddie Mac to obtain approval of MIC as an eligible insurer.