CUNA Mutual Group and the Arizona Department of Insurance (DOI), Receiver for PMI Mortgage Insurance Company (PMI) has announced an agreement that will support the future growth of CMG Mortgage Insurance Company (CMG MI). Under the business arrangement, Arch Capital Group Ltd., through its U.S.-based subsidiaries (Arch U.S. MI), will acquire all outstanding equity interests in CMG MI from PMI and CUNA Mutual Group.
CUNA Mutual Group will enter into distribution and reinsurance agreements with CMG MI, continuing CMG MI's private mortgage insurance offerings to credit unions. The transactions with Arch U.S. MI are expected to close within 12 months, subject to approval of the Arizona receivership court, regulatory approvals and satisfying other customary closing conditions.
"Our goals have been consistent from the start of this process: Protect policyholders, deliver strong service to customers, and aim for a long-term, viable solution for credit unions to have a private mortgage insurer that is sensitive to, and understands their unique mission," said Jeff Post, president & CEO, CUNA Mutual Group. "Through its significant financial resources and risk management expertise, the agreement with Arch supports the stability and future growth of CMG MI."
"We are confident that, following the purchase of CMG MI by Arch, CMG MI will continue to provide the customer-focused products and services that have made CMG MI the long-standing market leader in meeting the mortgage insurance needs of credit unions."
Arch U.S. MI will purchase PMI's information technology platform and systems and, as a result, CMG MI is expected to enjoy uninterrupted delivery of technology support for its operations. With the proposed distribution arrangement, CUNA Mutual Group mortgage insurance sales staff will continue to serve credit union customers on behalf of CMG MI.
"In order to ensure uninterrupted access to a best-in-class origination and servicing platform, talented underwriting and back-office support, we wanted to find a buyer who had the capability and expertise to continue investing in this unique business," said Sean Dilweg , CUNA Mutual Group vice president and product executive for CMG MI. "We are confident Arch U.S. MI more than fulfills all of these requirements."
"Similar to our successful partnerships with Liberty Mutual and State National Companies, CUNA Mutual Group will use its marketplace knowledge and distribution strengths, combined with Arch's financial strength and commitment to mortgage insurance, to bring a stronger product solution to its credit union customers. We look forward to a strong partnership with Arch."
Arch Capital Group Ltd. (ACGL) is a financially strong international insurer and reinsurer. ACGL's principal operating insurance and reinsurance subsidiaries have been issued the following financial strength ratings: "A+" (Superior) by A.M. Best, "A+" (Strong) by Standard & Poor's, "A1" (Good) by Moody's, and "A+" by Fitch Ratings.
For Arch Capital Group Ltd., the agreement allows the company to enter the rapidly improving U.S. mortgage insurance marketplace and broaden its existing mortgage insurance and reinsurance capabilities.
"We are very gratified that this 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," said Marc Grandisson , chairman and CEO of Arch Worldwide Reinsurance Group. "We are also extremely pleased to partner with CUNA Mutual Group 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."