The unique nature of insurance and insurance regulation havecombined to prevent the federal bankruptcy of an insurance holdingcompany from having any impact on the leading credit union mortgageinsurer, according to an executive with CUNA Mutual Group MortgageInsurance.

The PMI Group, the holding company for PMI Mortgage Insurance,filed for federal bankruptcy protection on Nov. 23. The bankruptcy filing followed after the ArizonaDepartment of Insurance had taken interim control of PMI MortgageInsurance and a federal court affirmed that move.

PMI Mortgage Insurance, along with CUNA Mutual Group, is one ofthe co-owners of CMGMI.

CMGMI's public statements on the bankruptcy so far have stressedits lack of impact on the firm's day-to-day operations andfinancial health.

The fact that the Arizona Department of Insurance stepped in totake control of PMI Mortgage Insurance effectively meant that thefirm was protected from being impacted by a federal bankruptcy,according to Sean Dilweg, a vice president with CUNA Mutual overCMGMI.

Dilweg explained that the 150 years of state preeminence ininsurance regulation meant that it was very unlikely that theArizona Department of Insurance would defer to a federal bankruptcycourt and that this meant PMI Mortgage Insurance was effectivelyisolated from anything, including a liquidation, that might facethe PMI Group.

Dilweg said CMGMI executives were working with the ArizonaDepartment of Insurance to make sure the firm's interests andperspectives were understood and added that the insurance regulatorinterests aligned with those of CMGMI.

“We're the most valuable asset that PMI has right now,” Dilwegobserved. “Our interest and those of the Department of Insuranceare definitely aligned.”