Old Republic International Corp. announced that the North Carolina Department of Insurance (NCDOI) issued a final order approving the Amended and Restated Corrective Plan by its North Carolina domiciled mortgage guaranty insurance subsidiaries – Republic Mortgage Insurance Co. (RMIC) and Republic Mortgage Insurance Co. of North Carolina (RMICNC).
Old Republic cancels recapitalization plans
RMIC and RMICNC ceased writing new business in 2011 and began running off their in force business. They were placed under the NCDOI's administrative supervision the following year and ordered to defer the payment (DPO) of 50 percent of all settled claims. The rate of deferred payment obligations was subsequently reduced to 40 percent later that year by the NCDOI.
Under the amended plan, RMIC and RMICNC will pay off 100 percent of their DPOs accrued as of June 30, 2014 and will settle all subsequent valid claims entirely in cash, without incurring any DPOs. ORI will contribute $125 million in cash and securities to RMIC. Both subsidiaries will remain under the supervision of the NCDOI as they continue to operate in run-off mode.
The final order approving the amended plan followed an administrative hearing held on June 11, 2014 by the NCDOI for consideration of the plan. At the hearing the amended plan was admitted into evidence and supported by the testimonies of NCDOI representatives and a senior RMIC executive. Interveners representing major stakeholders in mortgage guaranty subsidiaries' policies also attended the hearing.
The approval of the amended plan notwithstanding, the NCDOI retains its regulatory supervisory powers to review and amend the terms of the amended plan in the future as circumstances may warrant.
A. C. Zucaro, Old Republic's chairman and chief executive officer, stated, "The approval of the Amended Plan affords necessary stability and support for an orderly and economically effective run-off of the mortgage guaranty book of business. We have a very good operating platform and, most importantly, a highly qualified group of associates dedicated to achieving the run-off objectives. Moreover, the continuity of ownership for an extended future period will lend further support to those objectives, and be conducive to the stable management of Old Republic's consolidated capitalization."
The complete final order and the approved amended plan have been posted on ORI's (www.oldrepublic.com) and RMIC's (www.rmic.com) websites.
Old Republic International announces plan to recapitalize its RMIC Mortgage Guaranty Subsidiary