National Mortgage Insurance reduces cession rate for 2019
National Mortgage Insurance Corporation (NMIC) has reduced its cession rate for its 2019 new insurance written (NIW) for its existing quota share reinsurance treaty (QSR) to 20 percent from 25 percent in 2018.
The QSR provides National MI the option, at its sole discretion, to change the cession rate on its 2019 NIW from 25 percent to a level between 20 percent and 30 percent.
All other terms of the QSR, including the ceding commission and profit commission paid to NMIC, will remain in effect.
NMIC is a subsidiary of NMI Holdings and operates in the US as a private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default.
“We continue to grow our high-quality book of insurance-in-force at an industry-leading rate and value our ongoing engagement with our reinsurance partners,” said NMIC chief financial officer Adam Pollitzer.
“Our election to reduce the 2019 cession rate under the QSR reflects the strength of our capital position, the success we have had in accessing a broad range of alternative funding and risk transfer markets, and the expected performance of business we are writing.
“Going forward, we expect to remain active in our use of traditional reinsurance solutions and alternative risk transfer structures, such as insurance-linked notes, to provide both low-cost growth capital and significant credit risk management benefits,” Pollitzer added.
