PMI To Stop Writing Business

PMI said the Arizona Department of Insurance placed PMI Mortgage Insurance Co (MIC) and PMI Insurance Co under regulatory supervision. PMI also said PMI Mortgage Assurance Co, a subsidiary of MIC, was no longer eligible to write new insurance, leaving the company with no way to write new business. PMI’s units will now have to work with their regulators to facilitate the run-off of its existing policies. PMI, like other U.S. insurers, has suffered throughout the housing downturn and has extremely high risk-to-capital ratios, causing many to question its survival. PMI said the department may take steps to initiate state court receivership proceedings for the rehabilitation or liquidation of MIC, which will lead to about $735 million of the holding company’s outstanding debts becoming due and payable. The company said it did not have access to enough funds to repay these debts. PMI said it was exploring potential capitalization and restructuring alternatives. Source: Reuters

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