Republic Mortgage Insurance Co. has been placed under supervision by the North Carolina Department of Insurance, its parent company Old Republic International Corp. announced.
ORI added that under the Department's order, RMIC can only pay $0.50 of each $1 on all claims starting Jan. 19 and continuing for at least the next year.
The remaining 50% is to be included in RMIC's statutory capital to be paid at a future date as and when funds are available.
A statement from ORI said "While the order remains in effect, the run-off of the business in these circumstances renders a collateral event of default with respect to ORI's existing debt obligations less likely due to any future impairment of the regulatory capital and concomitant receivership of RMIC."
RMIC was placed by ORI into runoff at the end of August last year after failing to get an extension from NCDOI on the risk-to-capital requirement. In ORI's third quarter 2011 earnings press release, the company said the $155 million of capital committed to RMIC is likely to be fully depleted "in relatively short order" as the company pays claims. As a result, ORI said it is looking at "alternative run-off approaches."
NCDOI has not yet responded to a request for more information.
