Fitch Affirms Republic Mortgage Insurance Co.'s 'AA' IFS Rating.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the 'AA' insurer financial strength (IFS) ratings of Republic Mortgage Insurance Company (RMIC RMIC Republic Mortgage Insurance Company RMIC Republican Majority Issues Committee RMIC Remote Memory in Cassette RMIC Rmi Compiler ), the mortgage insurance subsidiary of Old Republic International Corp (ORI, issuer default rating 'AA-', senior debt rating 'A+', commercial paper rating 'F1'). ORI's ratings are unaffected by this action. The Rating Outlook remains Stable. The 'AA' IFS rating for RMIC, reflects the company's strong excess capital given the current rating, good credit performance of the insured portfolio, and solid financial returns over an extended period of time. Additionally, ORI, a diversified parent company that is also engaged in property/casualty and title insurance, provides RMIC with the flexibility to not engage in aggressive business practices to the extent of other industry participants. Concerns center on significant competitive threats impacting the entire mortgage insurance industry and lower returns in the mortgage insurance industry. With $1,404.7 million of capital at Sept. 30, 2005, including $50.2 million of policyholders' surplus and $1,354.5 million of contingency reserves, RMIC maintains healthy excess capital on a stand-alone basis. Under Fitch's proprietary mortgage insurance capital model, these capital resources easily supported the $16.9 billion of risk in force within the mortgage insurance operation at an 'AA' IFS rating. RMIC, a major operating company operating company A business that engages in transactions with outsiders. of ORI, contributed 35.2% of ORI's $535.9 million consolidated pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. as of Sept. 30, 2005. Like the majority of the U.S. mortgage insurance industry, earnings growth at RMIC has been negatively impacted in the past few years by lessened demand for insurance as a result of the proliferation of 'mortgage avoidance' products being offered in the marketplace, the majority of which are being provided by RMIC's primary customer base. Reflecting the strong real estate markets in the U.S. over the past few years, losses within the mortgage guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. insurance portfolio continue to remain below expected levels. Given the competitive environment, however, within the mortgage guaranty insurance industry, RMIC, like many of its competitors, has been forced to explore new venues for growth opportunities which generally entail greater risk, such as sub-prime mortgages, second-lien mortgages, and reduced documentation mortgages. Based in Winston-Salem, NC, RMIC is under the umbrella of ORI, an insurance holding company with operations focused in commercial property/casualty, mortgage and title insurance. At Sept. 30, 2005, ORI maintained assets of $11.3 billion and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $4.1 billion. Republic Mortgage Insurance Co. -- Insurer financial strength rating Affirm 'AA'/Stable. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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