Dec. 30 (Bloomberg) -- MGIC Investment Corp., the largest U.S. insurer of home loans, put $200 million of capital into an underwriting subsidiary to continue writing new policies nationwide.
The contribution helps the company fund new business as a capital waiver from the Office of the Commissioner of Insurance for the State of Wisconsin is scheduled to expire tomorrow, MGIC said today in a statement distributed by PR Newswire. A separate deal with Fannie Mae and Freddie Mac, the U.S.-owned mortgage finance companies, is also set to end tomorrow, MGIC said.
“Because MGIC is able to write new business on a nationwide basis without the need for any waiver of capital requirements, there is no immediate need to extend the OCI’s waiver” or the deal with Fannie and Freddie, the Milwaukee, Wisconsin-based insurer said. “However, we expect MGIC’s capital to diminish in 2012 and thereafter. Thus, we remain in discussions with OCI, Fannie Mae and Freddie Mac regarding the terms under which this strategy may be continued.”
MGIC has dropped more than 90 percent from its high before the 2008 housing slump. The company has posted four straight annual losses on a wave of mortgage defaults that pushed rivals including Triad Guaranty Inc. out of business.
--Editors: Dan Reichl, Maura Reynolds
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