MGIC Contributes $200 Million to Raise Statutory Capital at Principal Insurance Operation (MTG)

By / / Business News


MGIC Investment Corporation (NYSE: MTG), a Milwaukee, Wisconsin-based provider of private mortgage insurance in the U.S., on Friday outlined its plan to seek to continue the strategy it had earlier implemented to allow it to write new business on a nationwide basis in case the capital of its principal insurance operation, Mortgage Guaranty Insurance Corporation (MGIC) did not meet regulatory requirements.

MGIC said that in relation with the plan, it has contributed $200 million to increase the statutory capital of its principal insurance operation.


The company had implemented the strategy two years ago. The strategy includes a waiver from the Office of the Commissioner of Insurance for the State of Wisconsin (OCI) of specific capital requirements. It also includes the separate approvals by Fannie Mae and Freddie Mac, which were given back in late 2009 and early 2010, of Mortgage Guaranty Insurance Corporation’s subsidiary MGIC Indemnity Corporation (MIC) as an eligible insurer for each GSE of Mortgage Guaranty can no longer write new business in specified jurisdictions due to capital requirements.

Curt S. Culver, Chairman and CEO of MGIC, said that the additional capital contribution is a crucial step in enabling the company to further support its policyholders and the U.S. housing market by continuing to write new insurance on a nationwide basis.

MGIC Investment shares had risen sharply in Friday’s trading session. The stock had ended the final trading session of 2011 5.07% higher at $3.73 on volume of 3.93 million.

MGIC Investment shares fell 63.4% in 2011.

 

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Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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