WALNUT CREEK, Calif., Oct. 12 /PRNewswire-FirstCall/ -- PMI Mortgage Insurance Co. commented on the enactment of California Senate Bill 291, which Governor Schwarzenegger signed into law today, indicating that the measure could provide regulatory relief to PMI and other mortgage insurers, as well as support the recovery of housing markets in California and nationwide. The measure is similar to legislation enacted by Arizona last month and North Carolina in July 2009.
The new law, which becomes effective on January 1, 2010, grants the Insurance Commissioner discretion to permit a mortgage guaranty insurer to continue to transact new business if its capital falls below statutorily prescribed levels. Prior law required mortgage insurers to automatically cease transacting new business if they failed to meet such statutorily prescribed capital levels.
This change provides the Insurance Commissioner added flexibility in assessing the strength of mortgage guaranty insurers that operate in California and aligns California with similar reforms recently enacted in other states that have mortgage guaranty statues, including Arizona, Wisconsin and North Carolina. PMI believes that the recent reforms enacted by these states signify important support of the mortgage insurance industry and indicate its importance in the housing recovery.
About The PMI Mortgage Insurance Co.
The PMI Mortgage Insurance Co. , is headquartered in Walnut Creek, CA and provides credit enhancement solutions that expand homeownership while supporting our customers and the communities they serve. Through its wholly and partially owned subsidiaries, PMI offers residential mortgage insurance and credit enhancement products. For more information: http://www.pmi-us.com/.
Cautionary Statement: Statements in this press release that are not historical facts, or that relate to future plans, events or performance are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that forward-looking statements by their nature involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements. Such factors include, among others:
-- our expectation that, as a result of continued losses, we will need to raise significant additional capital and that such additional capital may be necessary in 2009; -- the risk that we may be unable to maintain minimum regulatory risk-to-capital and policyholders surplus requirements in Arizona and other states as early as the third or fourth quarters of 2009; -- there is no assurance that the Arizona or California Department of Insurance will exercise its discretion to permit PMI to write new business in the event PMI does not meet the minimum policyholders position required by law. Moreover, even if those Departments of Insurance permit PMI to continue writing new business, it may be unable to write new business in other states in which PMI fails to meet regulatory capital requirements, and regulators in other states could take the position that PMI must suspend writing new business nationwide. In states that do not have capital adequacy requirements, it is not clear what actions the applicable regulators would take if PMI failed to meet the capital adequacy requirement established by another state. Accordingly, if PMI fails to meet the capital adequacy requirements in one or more states, PMI may have to immediately suspend writing business in some or all states in which it does business.
Other risks and uncertainties are discussed in our SEC filings, including in Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, filed August 7, 2009, and in our Annual Report on Form 10-K for the year ended December 31, 2008. We undertake no obligation to update forward-looking statements.
http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com
The PMI Mortgage Insurance Co.
CONTACT: Investors, Bill Horning of The PMI Mortgage Insurance Co.,
+1-925-658-6193, or Media, Tom Taggart of The PMI Mortgage Insurance Co.,
+1-925-658-6511, or Joel Luebkeman of The PMI Mortgage Insurance Co.,
+1-925-658-6818
Web Site: http://www.pmi-us.com/
