Marc Grandisson commented, “We are very gratified that PMI’s exceptionally strong management team and staff will be joining Arch. Together with our senior executives, they will form an industry leading team with broad capabilities to meet our clients’ needs over the long term. We are also extremely pleased to partner with CUNA Mutual on an ongoing basis. Their access to the credit union marketplace and brand reputation should allow us to secure a strong flow of credit union business.”“The petition being filed for court approval of this agreement is a significant milestone and positive step in the PMI receivership,” said Germaine L. Marks, Director of the Arizona Department of Insurance. “The successful negotiation of this transaction clearly evidences Arch's commitment to the private mortgage insurance market, and the PMI receivership team looks forward to building on that commitment and our relationship with Arch as we move forward.” Additional Transaction Highlights Outlined below are some of the key components of the transaction, all of which are subject to the terms and conditions included in the related agreements:
- At closing, it is currently estimated that Arch U.S. MI and its affiliates will pay to the sellers aggregate consideration of approximately $300 million. Additional amounts may be paid based on the actual results of CMG MI’s pre-closing portfolio over an agreed upon period.
- Arch U.S. MI will acquire all of the capital stock of CMG MI and its affiliates.
- Arch U.S. MI will acquire PMI’s mortgage insurance operating platform and related assets.
- An affiliate of Arch U.S. MI will reinsure the run-off of in-force insurance on current, non-delinquent loans included in the primary mortgage insurance originated by PMI for book years 2009-2011. Other than for the risks assumed by Arch U.S. MI’s affiliate under this reinsurance agreement, the Arch group will not assume any obligation for risks insured under PMI’s existing insurance contracts.
- Arch U.S. MI will also enter into a services agreement with PMI to provide for necessary services to administer the run-off of PMI’s legacy business at the direction of PMI.
- Subject to applicable regulatory and GSE approvals, an affiliate of Arch U.S. MI will provide quota share reinsurance to CMG MI through a reinsurance agreement that will become effective prior to the closing.