PMI Mortgage Insurance Co. (PMI) and PMI Insurance Co. (PIC) have been taken into conservatorship by the Arizona Department of Insurance.
PMI announced on its website that there will not be a moratorium on claim payments. The director of the Arizona Department of Insurance will make claim payments at 50 percent. The other half of the claim will be deferred as a policy holder claim, according to PMI.
The action occurs after an August 19 announcement that the regulator was prohibiting the insurance company from writing new insurance policies. The company was permitted to issue new mortgage policies under pending contracts until the end of the day September 16.
Following the decision by the Arizona Department of Insurance, Fannie Mae and Freddie Mac announced that PMI and its affiliates were no longer approved mortgage insurers.
PMI was previously one of the largest issuers of mortgage insurance, but according to the director of the Arizona Department of Insurance, PMI and its affiliates have been experiencing losses since 2007 and have been under close monitor since that time.
As of June 30, PMI has been unable to meet its required minimum policyholder position.
“We will continue to support our customers’ ongoing policy servicing needs and loss mitigation programs,” stated a notice on the company’s website.
“PMI will maintain all systems, processes, and contact points for policy servicing, loss mitigation, and claims operations just as we do today,” the notice continued.