Mortgage insurance specialist NMI Holdings has announced that its wholly owned subsidiary, National Mortgage Insurance Corporation (National MI), has entered into a new quota share reinsurance arrangement.
Under the new arrangement, National MI will cede 10.5% of its primary business to a broad panel of reinsurers.
The coverage applies to business written from April 1, 2020 through December 31, 2020, and the ceded percentage may be increased with additions to the reinsurance panel,
Additionally, the company will receive a ceding commission equal to 20% of ceded premiums, as well as a profit commission of up to 50% of ceded premiums, reduced by any losses ceded under the agreement.
“We are pleased with our ability to secure additional reinsurance capacity at this time,” said Adam Pollitzer, Chief Financial Officer of National MI. “This transaction builds upon the success we have achieved in the risk transfer markets to date and is particularly valuable in light of the COVID-19 outbreak.”
“Our ability to secure coverage in the current environment broadly demonstrates the durability of reinsurance markets as a source of support for mortgage insurance risk and highlights the confidence that our reinsurance partners have in our front-end pricing and credit risk management approach,” Pollitzer continued.
“This treaty provides us with an expanded ability to pursue incremental, high-quality new business production and support our lender customers and their borrowers in the current market.”