MADISON, Wis. (10/27/11)--CMG Mortgage Insurance Company (CMG MI) responded Friday to the Maricopa County, Ariz., superior court order directing the Arizona Director of the Department of Insurance to take possession and control of PMI Mortgage Insurance Co. (PMI).
PMI currently owns a 50% stake in CMG MI, the other 50% being owned by Madison, Wis.-based CUNA Mutual Group.
CMG MI's executive leadership emphasized that the company's operations remain strong despite this announcement, and that the company's focus on credit unions' mortgage insurance needs is unaffected. CMG MI is a stand-alone, corporate entity with its own capital and dedicated staffing from its shareholders. Arizona's regulatory action with PMI has no impact on CMG MI's operations and claims-paying activities.
"We remain dedicated to providing the same excellent service credit unions have grown to expect from our company," said Kim Shaul, CMG MI senior vice president and co-general manager.
"In addition to the company's solid operating performance and financial strength, CMG MI continues to enjoy the strong support from its joint venture partner CUNA Mutual Group," said Sean Dilweg, CUNA Mutual Group vice president. Dilweg reiterated earlier statements that: "CMG MI will continue to benefit from CUNA Mutual's management and financial strength as well as PMI's ongoing operational services and expertise. The company is committed to serving credit unions over the long term."
The following are key factors supporting CMG MI's solid financial position:
- CUNA Mutual Group's statutory capital, which grew to $1.45 billion through June, up $30 million from year-end 2010. The company holds an "A" (Excellent) A.M. Best financial strength rating with a Stable Outlook.
- As of the last available reporting period, June 30, CMG MI had among the industry's strongest financial and operating ratios, including a risk-to-capital ratio of approximately 19.7:1 and the industry's lowest portfolio delinquency ratio at 5.3%.
- As a separate legal entity, CMG MI's investment grade ratings--BBB from Standard & Poor's (S&P) and BBB from Fitch Ratings (Fitch)--are based primarily on CMG MI's own capital, operating performance and loss mitigation efforts, independent of our shareholders. CMG MI's Standard & Poor's rating was reaffirmed in September, while the Fitch rating was affirmed in July of this year.
- As of June 30, CMG MI enjoyed a strong two-to-one liquidity-to-reserves ratio, one of the highest in the mortgage insurance industry, with claims-paying resources, backed by cash and readily marketable securities of $328 million. This liquidity compares favorably to the company's $171 million in loss reserves for claims as of the end of second quarter 2011.