Radian Group Inc. announced that on January 9, 2013, its financial guaranty insurance subsidiary, Radian Asset Assurance Inc., completed the commutation of its remaining reinsurance risk from Financial Guaranty Insurance Company (FGIC).
According to a release, as previously reported when the companies entered into the agreement, the outstanding par reinsured by Radian Asset from FGIC was $827 million as of September 30.
Radian Asset made the expected commutation payment of $52.4 million to FGIC following approval of the transaction by the Supreme Court of the State of New York. This payment primarily represents existing loss reserves and unearned premium reserves for the portfolio, and therefore will not have a material impact on Radian's consolidated financial statements or Radian Asset's statutory capital position. The commuted portfolio represents 13 percent of Radian Asset's total reinsurance exposure as of September 30.
"We continue to make important strides in reducing Radian's financial guaranty exposure, including many of the riskiest segments of the portfolio," stated Chief Executive Officer S.A. Ibrahim. "We are pleased to successfully complete this latest transaction, which reduces our total reinsurance portfolio by 13 percent and supports our company's capital management strategy."
Radian Group Inc., headquartered in Philadelphia, provides private mortgage insurance and related risk mitigation products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty Inc.
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