The unique nature of insurance and insurance regulation have combined to prevent the federal bankruptcy of an insurance holding company from having any impact on the leading credit union mortgage insurer, according to an executive with CUNA Mutual Group Mortgage Insurance.
The PMI Group, the holding company for PMI Mortgage Insurance, filed for federal bankruptcy protection on Nov. 23. The bankruptcy filing followed after the Arizona Department of Insurance had taken interim control of PMI Mortgage Insurance and a federal court affirmed that move.
PMI Mortgage Insurance, along with CUNA Mutual Group, is one of the co-owners of CMGMI.
CMGMI's public statements on the bankruptcy so far have stressed its lack of impact on the firm's day-to-day operations and financial health.
The fact that the Arizona Department of Insurance stepped in to take control of PMI Mortgage Insurance effectively meant that the firm was protected from being impacted by a federal bankruptcy, according to Sean Dilweg, a vice president with CUNA Mutual over CMGMI.
Dilweg explained that the 150 years of state preeminence in insurance regulation meant that it was very unlikely that the Arizona Department of Insurance would defer to a federal bankruptcy court and that this meant PMI Mortgage Insurance was effectively isolated from anything, including a liquidation, that might face the PMI Group.
Dilweg said CMGMI executives were working with the Arizona Department of Insurance to make sure the firm's interests and perspectives were understood and added that the insurance regulator interests aligned with those of CMGMI.
“We're the most valuable asset that PMI has right now,” Dilweg observed. “Our interest and those of the Department of Insurance are definitely aligned.”