RICHMOND, Va., April 17, 2015 /PRNewswire/ -- Genworth
Financial, Inc. (NYSE: GNW) responded to the final Private Mortgage
Insurer Eligibility Requirements (PMIERs), which were published
today by the Government Sponsored Enterprises (GSEs), Fannie Mae
and Freddie Mac, in conjunction with the Federal Housing Finance
Agency. PMIERs will be used by the GSEs to approve private
mortgage insurers that provide mortgage insurance on loans acquired
by them.
Based on its interpretation of the final PMIERs, the company
still estimates $500 to $700 million
of additional capital will be required to be fully compliant by the
effective date. This estimate is based on a number of factors
including the company's view of market size and dynamics, planned
internal restructuring within U.S. Mortgage Insurance (U.S. MI) and
current affiliate asset valuation. The estimate does not
reflect today's announcement of changes to GSE fees (loan level
pricing adjustments and adverse market fees), the impact of which
the company is still evaluating. The final PMIERs lowered the
level of required capital from that contained in the draft
requirements, primarily benefiting legacy books of business, and
also lowering the benefit from captive reinsurance treaties.
Additionally, this estimate reflects reductions in affiliate asset
valuation due to changes in market value, currency fluctuations and
the finalization of the PMIERs.
The company still intends to comply with the final PMIERs by the
effective date, which is now December
31, 2015. Although the company continues to pursue
reinsurance transactions, the lower capital requirements on legacy
books of business impact the evaluation of the mix of appropriate
sources of capital, which include both reinsurance and holding
company cash. As previously disclosed, the company is
reviewing a broad range of strategic options that it believes will
improve its ability to reduce debt levels, increase capital buffers
and improve/grow earnings.
"The finalization of the eligibility standards is a significant
step toward increasing the financial strength of the U.S. housing
finance system and reinforces the vital role of private mortgage
insurance," said Tom McInerney,
President and CEO. "Our U.S. Mortgage Insurance business is
well positioned to not only build upon its already strong presence
in the private mortgage insurance market but also to expand the
role that private mortgage insurance plays in the housing finance
system."
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500
insurance holding company committed to helping families become more
financially secure, self-reliant and prepared for the future.
Genworth has leadership positions in long term care insurance and
mortgage insurance and competitive offerings in life insurance and
fixed annuities that assist consumers in solving their insurance,
retirement and home ownership needs.
Genworth operates through three divisions: U.S. Life Insurance,
which includes long term care insurance, life insurance and fixed
annuities; Global Mortgage Insurance, containing U.S. Mortgage
Insurance and International Mortgage Insurance segments; and the
Corporate and Other Division, which includes the International
Protection and Runoff segments. Products and services are offered
through financial intermediaries, advisors, independent
distributors and sales specialists. Genworth headquartered in
Richmond, Virginia, traces its
roots back to 1871 and became a public company in 2004. For more
information, visit genworth.com. From time to time, Genworth
releases important information via postings on its corporate
website. Accordingly, investors and other interested parties are
encouraged to enroll to receive automatic email alerts and Really
Simple Syndication (RSS) feeds regarding new postings. Enrollment
information is found under the "Investors" section of genworth.com.
From time to time, Genworth's publicly traded subsidiaries,
Genworth MI Canada Inc. and Genworth Mortgage Insurance Australia
Limited, separately release financial and other information about
their operations. This information can be found at
http://genworth.ca and http://www.genworth.com.au.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements may be identified by words such
as "projects," "expects," "intends," "anticipates," "plans,"
"believes," "seeks," "estimates," "will," "are confident" or words
of similar meaning and include, but are not limited to, statements
regarding the outlook for our future business and financial
performance and our ability to meet revised private mortgage
insurer eligibility requirements established by the GSEs and FHFA.
Forward-looking statements are based on management's current
expectations and assumptions, which are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. Actual outcomes and results may differ
materially due to global political, economic, business,
competitive, market, regulatory and other factors and risks,
including the items identified under "Part I -- Item 1A -- Risk
Factors" of our Annual Report on Form 10-K for the year ended
December 31, 2014, filed with the
Securities and Exchange Commission on March
2, 2015. The amount of additional capital that will be
required by our U.S. mortgage insurance business to meet the
revised GSE eligibility requirements is dependent upon, among other
things: (i) the way the eligibility requirements are applied
and interpreted by the GSEs and FHFA as and after they are
implemented; (ii) the future performance of the U.S. housing
market; (iii) our generating and having expected U.S. mortgage
insurance business earnings, available assets and risk-based
required assets (including as they relate to the value of the
shares of our Canadian mortgage insurance subsidiary that are owned
by our U.S. mortgage insurance business as a result of share price
and foreign exchange movements or otherwise), reducing risk
in-force and reducing delinquencies as anticipated, and writing
anticipated amounts and types of new U.S. mortgage insurance
business; (iv) our ability to complete, in a timely manner, certain
internal restructuring steps within our U.S. Mortgage Insurance
business, some of which require GSE and/or regulatory approvals;
and (v) our projected overall financial performance, capital and
liquidity levels being as anticipated. Our ability to meet the
additional capital requirements is subject to the foregoing factors
and also dependent upon, among other things: (i) our ability to
complete reinsurance transactions on our anticipated terms and
timetable, which are subject to market conditions, third-party
approvals and other actions (including approval by regulators), and
other factors which are outside of our control; (ii) our ability to
successfully develop and execute strategic options currently under
review and the timing and terms of implementation, which may be
subject to market conditions, third-party approvals (including
approval by regulators) and other actions and factors that are
outside of our control; (iii) our ability to contribute holding
company cash or other sources of capital to satisfy the portion of
the additional capital requirements that are not satisfied through
reinsurance transactions; and (iv) the approval by the GSEs of
the company's application to meet the financial requirements by the
conclusion of the transition period, if such application is pursued
by the company. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
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visit:http://www.prnewswire.com/news-releases/genworth-financial-responds-to-final-pmiers-300068067.html
SOURCE Genworth Financial, Inc.