HCC INSURANCE HOLDINGS, INC.
ENTERS
INTO REINSURANCE AGREEMENT WITH MGIC
HOUSTON (June 17, 2008) . . .
HCC Insurance Holdings, Inc. (NYSE: HCC) announced today that its
subsidiary, HCC Reinsurance Company Limited (HCC Re), has entered into a
reinsurance agreement with a subsidiary of MGIC Investment Corporation
(NYSE: MTG).
Under the terms of the agreement, which covers qualifying new mortgages
originated from April 1, 2008 through December 31, 2010, HCC Re will
reinsure up to 20 percent of covered business as defined in the reinsurance
agreement. HCC Indemnity Guaranty Agency (HCCIG), the Company’s New York
based financial products underwriting unit, will also receive a five percent
reinsurance commission of all premiums paid by MGIC under the reinsurance
agreement.
Based upon HCC’s assessment that this reinsurance contract does not pass
risk transfer accounting guidelines, HCC expects to account for this
transaction utilizing deposit accounting rules. HCC expects to recognize the
related net underwriting effect of this transaction as Other Operating
Income.
“With new, strengthened underwriting and pricing guidelines being
implemented by MGIC, combined with the expertise of HCCIG’s personnel and
their successful track record in the mortgage guaranty business, we viewed
this transaction as a compelling opportunity to enter the U.S. mortgage
guaranty reinsurance business. This risk-remote transaction is consistent
with the book of miscellaneous financial products developed by our
exceptional team in New York,” HCC Chief Executive Officer Frank J. Bramanti
said.
Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. (HCC) is a
leading international specialty insurance group with offices across the
United States and in Belgium, Bermuda, Ireland, Spain and the United
Kingdom. HCC has assets of nearly $8.2 billion, shareholders’ equity in
excess of $2.5 billion and is rated AA (Very Strong) by Standard & Poor’s
and AA (Very Strong) by Fitch Ratings. In addition, HCC’s domestic property
and casualty insurance companies are rated A+ (Superior) by A.M. Best
Company.
For more information, visit our website at
www.hcc.com.
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Contact:
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Barney White, HCC Vice President of
Investor Relations
Telephone: (713) 744-3719
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Forward-looking statements contained in this press
release are made under “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995 and involve a number of
risks and uncertainties. The types of risks and uncertainties which
may affect the Company are set forth in its periodic reports filed
with the Securities and Exchange Commission. |
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