Between 2008 and early 2011, we added $155 million of new capital to the MI segment and this amounted to about a 13% addition to the capital base of $1.2 billion we had at year-end 2006. And we did this for two basic reasons. First, to maintain the minimum capital requirements of our mortgage guaranty company, so that we could write the better quality business that the marketplace allowed from late 2009 and forward. And second, to boost the particular account of one of our three MI insurance subsidiaries so that it could write new business and allow the other two companies to run off the legacy book.So, with appropriate and necessary regulatory forbearance and market acceptance, we believe this strategy could have worked. But in August of last year, our key state insurance regulator in North Carolina advised that we were no longer permitted to write new business in our flagship MI company. So, the entire legacy book was placed into run-off, meaning that we would simply continue to collect renewal premiums and pay all legitimate claims. And then in January of this year, the North Carolina regulator placed our flagship carrier under its direct supervision and this meant that our MI operating practices generally would be subjected to its supervision pursuant to the order. And concurrent with the issuance of the supervision order, the insurance department established a so-called differing payment obligation plan that we require that all approved claims be paid in cash at the rate of 50%, and that the remaining 50% be capped in a reserve classified as part of the statutory capital of the MI insurance subsidiary.
Old Republic International's CEO Discuss The Decision To Withdraw The Spin-Off Of Its RFIG Subsidiary's Stock To ORI Shareholders Conference (Transcript)
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