The transfer of the business to PMI is subject to regulatory and UK Court approval which is anticipated to take around 6 months. Co-operation agreements are in place to provide R&SA’s clients with access to PMI’s products during this interim period and following the transfer.
PMI’s acquisition of R&SA’s LMI business reflects a mortgage insurance portfolio that consists of UK mortgage loans originated in 1993 and subsequent years. R&SA will continue to manage the existing portfolio of pre-1993 contracts and the excess of loss contracts, though R&SA agreed to discontinue writing or renewing LMI business.
PMI is a member of The PMI Group, Inc., one of the largest LMI providers in the United States.
Tony Porter, PMI Europe Executive Managing Director said: “We are delighted to be acquiring R&SA’s Lenders’ Mortgage Insurance business in the UK. PMI has been serving the UK market since 2001 with capital relief tools (via credit default swaps), but this is a significant step forward in our participation in the primary market. PMI is a top player in every market in which it operates and we look forward to building on this R&SA book of business to achieve the same position in the UK.
“This acquisition of R&SAs Lenders Mortgage Insurance provides us with an exceptional opportunity in the UK primary market moving forward. Our approach is consultative. In the coming weeks we will be meeting and working with lenders throughout the UK alongside R&SA, to understand their special issues and how PMI’s capabilities, can help them improve or secure their profitability.”
The portfolio covers approximately £9 billion of original insured principal value, approximately £1 billion of remaining risk exposure.
