PMI Mortgage Insurance announces regulatory reform

The PMI Mortgage Insurance Company has announced the passage of a legislation that could provide regulatory relief to PMI and other mortgage insurers by granting Arizona's Department of Insurance discretionary authority over mortgage insurance companies in the event that they do not meet the state's required minimum policyholder position to write new business.

The regulatory reform is effective November 2009. PMI is domiciled in Arizona and regulated by the Arizona Department of Insurance (DOI).

The bill, which garnered support including the Arizona DOI, was designed to provide the insurance regulator discretion in working with mortgage insurers that fall below the required minimum policyholder position (MPP).

Legislators and the DOI recognized that MPP is one factor, but should not be the sole determinant in evaluating mortgage insurers' ability to write new business. The reform can provide necessary relief as mortgage insurers pursue restructuring of portfolios and rebuilding capital levels.

Steve Smith, chairman and CEO of The PMI Group, said: "Broad support of this regulatory reform reflects the confidence in Arizona's DOI as well as the current realities of the housing crisis and its impact on mortgage insurance companies. A guiding principal of the mortgage insurance industry is supporting sustainable homeownership and the ability to write new business is a critical factor in the recovery of the US housing market."