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PMI Group Inc. says its primary subsidiary ""PMI Mortgage Insurance Co."":http://www.pmi-us.com could be forced to stop issuing new mortgage insurance policies.
The company alerted investors of the possibility that its business could come to a halt last week, at the same time it reported a company-wide net loss of $134.8 million for the[IMAGE] [COLUMN_BREAK]
second quarter. That follows a net loss of $126.8 million the previous quarter.
PMI Mortgage Insurance's primary regulator is the Arizona Department of Insurance. According to the company's ""filing with the SEC"":http://services.corporate-ir.net/SEC/Document.Service?id=P3VybD1odHRwOi8vaXIuaW50Lndlc3RsYXdidXNpbmVzcy5jb20vZG9jdW1lbnQvdjEvMDAwMTE5MzEyNS0xMS0yMDkxMTEvZG9jL1RoZVBNSUdyb3VwSW5jLnBkZiZ0eXBlPTImZm49VGhlUE1JR3JvdXBJbmMucGRm, the mortgage insurer's capital holdings have slipped to $320 million below the minimum required by Arizona law.
PMI says if the state's Department of Insurance determines that PMI Mortgage Insurance's financial condition is not improving, it could issue an administrative order requiring the subsidiary to suspend writing new business in all states, or go so far as to initiate court receivership proceedings for liquidation.
The company says it is currently “exploring capital alternatives†to either bring PMI Mortgage Insurance into compliance with regulatory requirements or shift business to other insurance subsidiaries so that they may replace PMI Mortgage Insurance as the parent company’s primary writer of new insurance.
