Correcting and Replacing previous Amerin announcement.
Amerin chairman and chief executive officer Gerald L. Friedman said: "We were surprised to receive the department's letter. In designing the captive reinsurance concept, we took extraordinary steps to ensure that it complies with all applicable federal and state regulations. In fact, more than a year ago, we met with both federal and state regulators, including the New York Insurance Department, to discuss a specific captive reinsurance program. Until we received the letter, the department had voiced no objections to the concept. Obviously, we are anxious to meet with the department to discuss their opinion and clarify the issues."
Although it is a relatively new concept, captive reinsurance has been approved by the Office of the Comptroller of the Currency and by various mortgage agencies. It is being studied or implemented by several major commercial banks and mortgage companies, Friedman noted, and Amerin does not believe that the issues raised by the department regarding captive mortgage reinsurance will have a material adverse effect on Amerin's business.
Amerin provides private mortgage insurance to leading mortgage originators. The company's products are discount Borrower-Paid Mortgage Insurance and Lender-Paid Mortgage Insurance. Amerin's approach to sales and underwriting reduces the cost of its insurance and offers operating efficiencies to mortgage lenders and their borrowers. Home buyers who make down payments of less than 20 percent of the value of the home are usually required by the mortgage lender to qualify and pay for mortgage insurance on their mortgage loans. If the homeowner defaults on the loan, mortgage insurance pays the lender or the owner of the loan for its losses up to a specified coverage amount.
CONTACT: Amerin Corp., New York
Bill Campbell, 212/254-6670
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|Date:||Mar 25, 1997|
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