MGIC Investment Corporation Contributes $200 Million to Increase the Statutory Capital of Mortgage Guaranty Insurance Corporation
In October 2011, MGIC Investment Corporation (NYSE: MTG) outlined its plan to seek to continue the strategy it had previously implemented to enable it to write new business on a nationwide basis in the event the capital of its principal insurance operation, Mortgage Guaranty Insurance Corporation ("MGIC"), did not meet regulatory requirements. In connection with this plan, Investment last week contributed $200 million to increase the statutory capital of MGIC.
The strategy, which has been in place for about two years, includes a waiver from the Office of the Commissioner of Insurance for the State of Wisconsin ("OCI") of specific capital requirements. The strategy also includes the separate approvals by Fannie Mae and Freddie Mac, given in late 2009 and early 2010, of MGIC's subsidiary MGIC Indemnity Corporation ("MIC") as an eligible insurer for each GSE if MGIC can no longer write new business in specified jurisdictions due to capital requirements. The OCI waiver and Fannie Mae's approval expire tomorrow; Freddie Mac's approval expires at the end of 2012. Additional important information about the waiver and these approvals is included under "Additional Information" below.
Curt S. Culver, CEO and Chairman of the Board of MGIC and Investment, said that the additional capital contribution is an important step in enabling the company to further support its policyholders and the US housing market by continuing to write new insurance on a nationwide basis.
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