Arch MI Secures Over $341 Million of Indemnity Reinsurance from Insurance-linked Security Transaction

2019 MAR 28 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Arch Mortgage Insurance Company (“Arch MI”) announced that it has obtained $341,790,000 of indemnity reinsurance on a pool representing nearly $23 billion of mortgages from Bellemeade Re 2019-1 Ltd., a special purpose reinsurer. This insurance-linked security (ILS) transaction provides Arch MI with collateralized coverage for potential losses on a portion of its mortgage insurance (MI) portfolio.

The reinsurance is for a portfolio of MI policies issued by Arch MI and affiliates through 2015. More than 70% of the policies covered in the transaction were issued prior to 2009. The most senior M-1A class notes received an A- rating from Morningstar Credit Ratings, LLC.

This is Arch’s first 2019 ILS transaction in what has become a programmatic issuance from Arch MI, which conducted three Bellemeade transactions garnering $1.534 billion of reinsurance protection for loans representing more than $136 billion of unpaid principal balance in 2018. This transaction is notable in that nearly half the covered mortgages have been modified under GSE or servicer modification programs.

Bellemeade Re 2019-1 Ltd. is funding its reinsurance obligations through the issuance of four classes of amortizing notes with 10-year legal final maturities.

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