RICHMOND, Va., Dec. 20, 2012 /PRNewswire/ -- Today, Genworth Financial, Inc.'s (NYSE: GNW) Canadian subsidiary, Genworth MI Canada Inc. (TSX: MIC) reported the anticipated financial impact, under International Financial Reporting Standards ("IFRS"), from the implementation of the Protection of Residential Mortgage or Hypothecary Insurance Act ( Canada) ("PRMHIA"), effective on January 1, 2013. PRMHIA establishes a legislative framework that replaces the current Government Guarantee Agreement. For additional details, a copy of the press release issued by MIC is posted on its website at www.genworth.ca .
While there is no change in the level of the Government Guarantee to MIC under PRMHIA, it does eliminate the Government Guarantee Fund and related exit fees in favor of a higher regulatory capital target set by Canada's Minister of Finance. When PRMHIA is implemented, the elimination of the Government Guarantee Fund will increase MIC's regulatory capital available, which is expected to be predominately offset by an increase in its required capital. The implementation of this legislation is positive and will strengthen Genworth MI Canada's claim paying ability.
Under U.S. Generally Accepted Accounting Principles (GAAP), Genworth Financial expects a benefit of approximately $80 million in the fourth quarter of 2012 to its net income(1) from the reversal of the accrued liability for exit fees associated with this change to the Government Guarantee Agreement. Genworth Financial's current year portion of the exit fee accrual for the business through September 30, 2012 was approximately $8 million. There are no other significant impacts anticipated on GAAP results or U.S. statutory capital levels.
About Genworth FinancialGenworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company dedicated to helping people secure their financial lives, families and futures. Genworth has leadership positions in offerings that assist consumers in protecting themselves, investing for the future and planning for retirement -- including life insurance, long term care insurance, financial protection coverages, and independent advisor-based wealth management -- and mortgage insurance that helps consumers achieve home ownership while assisting lenders in managing their risk and capital.