On October 20, 2011, the Director of the Arizona Department of Insurance filed a Complaint to place PMI Mortgage Insurance Company (PMI) into receivership in Arizona. In an interim Order, the court required the director, as Receiver, to take possession and control of PMI, which had been under the formal supervision of the insurance department since August 19, 2011. The court also directed that certain related affiliates of PMI be placed under administrative supervision. Reed Smith is forming a group of interested clients to enter an appearance in the Arizona proceedings to ensure that our clients have notice of the proceedings and an opportunity to participate to protect their rights.
PMI was one of a handful of companies writing mortgage insurance coverage, which insures a lender against loss from a borrower's default on a mortgage loan. PMI currently is paying approved mortgage insurance claims at 50 percent of their value and providing a deferred payment obligation for the remaining 50 percent. This resembles the run-off payment structure used by Triad Guaranty Insurance Corporation, an unrelated mortgage insurance company.
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