Genworth Financial Announces Comprehensive U.S. Mortgage Insurance Capital Plan

  Genworth Financial Announces Comprehensive U.S. Mortgage Insurance Capital

Reduces GMICO Risk-To-Capital By 12 To 15 Points

Ensures Continued Ability To Write New Business

Removes U.S. MI Subsidiaries From Genworth's Senior Notes Indenture

PR Newswire

RICHMOND, Va., Jan. 16, 2013

RICHMOND, Va., Jan. 16, 2013 /PRNewswire/ --Genworth Financial, Inc. (NYSE:
GNW) today announced a comprehensive U.S. Mortgage Insurance capital plan
that, when implemented, will reduce Genworth Mortgage Insurance Company's
(GMICO), the company's main U.S. mortgage insurance subsidiary,
risk-to-capital by 12 to 15 points, decrease the likelihood that the U.S.
mortgage insurance subsidiaries will require additional capital for the
foreseeable future, ensure the continued ability to write new business and
reduce the risk of a default under the indenture governing Genworth's senior

The capital plan consists of several actions, some of which are still subject
to regulatory approval: (1) transferring ownership of the European mortgage
insurance subsidiaries to GMICO; (2) enabling the future option, under certain
adverse conditions, should they occur,to implement a "NewCo" type structure,
for the continued writing of new business in all 50 states; and (3)
implementingan internal legal entity reorganizationwhich createsa new
holding company structure that will removethe U.S. mortgage insurance
subsidiaries from the companies covered by the indenture governing Genworth's
senior notes. Genworth will also contribute $100 million to GMICO as part of
the comprehensive capital plan, anticipated to occur in the second quarter of
2013. The company anticipates the combined risk-to-capital ratio of the U.S.
mortgage insurance subsidiaries will be reduced by 8 to 10 points from this
plan. Cash and highly liquid securities at the holding company totaled
approximately $1.0 billion as of December 31, 2012.

"We are very pleased to announce a comprehensive plan for the U.S. mortgage
insurance business which reduces linkages and dependencies with the holding
company and increases our financial flexibility while bolstering capital in
the business," said Martin P. Klein, chief financial officer. "U.S. mortgage
insurance is a key component of our Global Mortgage Insurance Division, and we
believe implementation of this plan will increase shareholder value by
continuing our ability to write profitable new business while at the same time
reducing uncertainties related to our U.S. mortgage insurance subsidiaries."

Key Components Of Capital Plan

Contribution Of European Mortgage Insurance Subsidiaries

Under the capital plan, ownership of the European mortgage insurance
subsidiaries will be moved under GMICO. These subsidiaries will provide
approximately $200 million in additional statutory capital to GMICO. This
transfer has received regulatory approval and the company anticipates
completing the transfer during the first quarter of 2013.

"NewCo" Option

Genworth also has obtained requisite GSE (Government Sponsored
Enterprise)approvals to implement a "NewCo" type structure which would allow
for the continued writing of new business in all 50 states. The future option
would be implemented if certain unanticipated adverse conditions were to
occur, such as an elevated risk-to-capital level, revocation of the regulatory
risk-to-capital waivers, or reduction in market share thresholds. If a new
U.S. mortgage insurance company is created pursuant to this option, it will
have no legacy obligation to GMICO. At the time of formation, "NewCo" would be
subject to GSE eligibility guidelines and capital requirements and would allow
access to third party funding sources. As part of this plan, Genworthhas
agreed tocontribute $100 million of cash to GMICO. Genworth also agreed to
contribute another $100 million in the event that GMICO were to enter into a
deferred payment order with the North Carolina Department of Insurance or if
projections indicate that GMICO may not have sufficient resources to pay valid
claims. Genworth will also guarantee that, between October 1, 2012 and June
30, 2017, GMICO will receive, in the normal course, $150 million from
dividends from currently owned affiliate securities and deferred tax asset
utilization. Given these obligations are intended to be funded through normal
operations, the guarantee is not expected to have a material impact on
Genworth. GMICO received from affiliates an estimated $60 million in dividends
and tax benefits during 2012. In the event that the "NewCo" option is
implemented, its implementation will require requisite state regulatory
approvals, and is contingent upon Genworth and GMICO meeting their respective
obligations pursuant to the approvals granted by the GSEs. The company
believes the eventsthat would resultin the potential "NewCo" implementation
are unlikely to occur and expects to continue to write new business out of
GMICO for the foreseeable future.

"One of Global Mortgage Insurance's strategic priorities was maintaining the
ability to write new profitable business in U.S. Mortgage Insurance while
focusing on a return to profitability," said Kevin D. Schneider, president of
Genworth's Global Mortgage Insurance Division. "The ability to implement the
"NewCo" option, if necessary,benefits Genworth, our investors and customers
by providing an additional layer, along with our continued GMICO waivers and
use of Genworth Residential Mortgage Assurance Corporation (GRMAC), that
willensure our continued ability to write profitable new business."

Internal Legal Entity Reorganization

The proposed legal entity reorganization will involve: (1) the creation of a
new holding company (New Parent) over Genworth; (2) Genworth becoming a
direct, wholly-owned subsidiary of New Parent; (3) the existing Genworth stock
automatically converting into shares of New Parent stock and Genworth
stockholders becoming stockholders of New Parent; and (4) the U.S. mortgage
insurance subsidiaries, including the European mortgage insurance
subsidiaries, becoming wholly-owned subsidiaries of New Parent rather than the
old parent, Genworth. Following completion of the reorganization, Genworth,
the old parent, will continue to own its existing businesses except the U.S.
mortgage insurance subsidiaries and New Parent will own the U.S. mortgage
insurance subsidiaries and Genworth, the old parent. In addition, Genworth's
outstanding senior and subordinated notes will remain obligations of Genworth,
the old parent, and will receive the benefit of a new unconditional guarantee
by New Parent of those obligations and thereby will continue to benefit from
the value of the U.S. mortgage insurance subsidiaries. In connection with the
reorganization, New Parent will be renamed Genworth Financial, Inc., the
shares of New Parent common stock to be issued in connection with the
reorganization will have the same designations, rights, powers and
preferences, qualifications, limitations and restrictions as the current
outstanding Genworth common stock. New Parent common stock will be listed on
The New York Stock Exchange and trade under the symbol "GNW," and the company
expectsGenworth stockholders will not recognize any gain or loss for U.S.
federal income tax purposes in connection with the reorganization.

No vote or consent of, or other action, by Genworth's stockholders or
noteholders is required for the proposed reorganization. The reorganization
plans are subject to approval by various regulators and are currently being
pursued. The plans have been approved by GMICO's domestic regulator, the North
Carolina Department of Insurance. The company anticipates completing the
reorganization in the second quarter of 2013.

Following the reorganization, the U.S. mortgage insurance subsidiaries will no
longer be subsidiaries of Genworth, the old parent, and therefore an
insolvency event relating to the U.S. mortgage insurance subsidiaries will not
cause an event of default under the indenture governing Genworth's senior
notes. The reorganization is intended to provide a structural solution for
such a potential event of default and to reduce the linkages between U.S.
mortgage insurance subsidiaries and Genworth, the old parent, and does not
reflect a change in the company's strategic position regarding the U.S.
mortgage insurance subsidiaries. The U.S. mortgage insurance subsidiaries
remain a key component of the company's Global Mortgage Insurance Division and
overall corporate strategy. Also, it does not reflect any expectation that
the U.S. mortgage insurance subsidiaries will in fact experience any
insolvency related event, enter into a deferred payment order or not be in a
position to pay all valid claims. Given the trends of new delinquencies,
reserves, new insurance written, loss mitigation benefits and mortgage
insurance penetration, and assuming no significant deterioration in the U.S.
housing market or material global economic downturns, the company continues to
believe these trends create the conditions for continued improvement in
earnings for the U.S. mortgage insurance business, with a potential return to
breakeven or modest profitability during one or two quarters in 2013. The
company will provide additional information on this topic during the scheduled
conference call noted below.

Conference Call and Supplemental Information

This press release is now posted on the company's website. Additional
information regarding the comprehensive U.S. Mortgage Insurance capital plan
is also posted on the company's website,
Investors are encouraged to review all of these materials.

Genworth will conduct a conference call on January 16, 2013 at 9 a.m. (ET) to
discuss the comprehensive U.S. Mortgage Insurance capital plan. The
conference call will be accessible via telephone and the Internet. The dial-in
number for the conference call is 866 393.0571 or 206 453.2872 (outside the
U.S.). To participate in the call by webcast, register at at least 15 minutes prior to the webcast to
download and install any necessary software.

Replays of the call will be available through January 30, 2013 at 855 859.2056
or 404 537.3406 (outside the U.S.); the conference ID # for the call is #
89623448. The webcast will also be archived on the company's website.

About Genworth Financial

Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance
holding company dedicated to helping people secure their financial lives,
families and futures. Genworth has leadership positions in offerings that
assist consumers in protecting themselves, investing for the future and
planning for retirement -- including life insurance, long term care insurance,
financial protection coverages, and independent advisor-based wealth
management -- and mortgage insurance that helps consumers achieve home
ownership while assisting lenders in managing their risk and capital.

Genworth has approximately 6,300 employees and operates through three
divisions: Insurance and Wealth Management, which includes U.S. Life
Insurance, Wealth Management and International Protection segments; Global
Mortgage Insurance, which includes U.S. and International Mortgage Insurance
segments; and the Corporate and Runoff division. Its products and services are
offered through financial intermediaries, advisors, independent distributors
and sales specialists. Genworth Financial, Inc., which traces its roots back
to 1871, became a public company in 2004 and is headquartered in Richmond,
Virginia. For more information, visit From time to time,
Genworth Financial, Inc. releases important information via postings on its
corporate website. Accordingly, investors and other interested parties are
encouraged to enroll to receive automatic email alerts and Really Simple
Syndication (RSS) feeds regarding new postings. Enrollment information is
found under the "Investors" section of

Cautionary Note Regarding Forward-Looking Statements

This press release contains certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by words such as "expects,"
"intends," "anticipates," "plans," "believes," "seeks," "estimates," "will" or
words of similar meaning and include, but are not limited to, statements
regarding the outlook for the company's future business and financial
performance. Forward-looking statements are based on management's current
expectations and assumptions, which are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict. Actual
outcomes and results may differ materially due to global political, economic,
business, competitive, market, regulatory and other factors and risks,
including the following:

  oRisks related to proposed capital plan (including the reorganization),
    including failure to complete the implementation of the capital plan in a
    timely manner or at all for any reason (including failure to obtain
    required insurance regulator and other approvals or relief); failure to
    achieve the anticipated benefits of the capital plan; and unanticipated
    complexities or costs in implementing the capital plan;
  oRisks relating to the company's businesses, including downturns and
    volatility in global economies and equity and credit markets; downgrades
    or potential downgrades in the company's financial strength or credit
    ratings; interest rate fluctuations and levels; adverse capital and credit
    market conditions; the impact of expiration of the company's credit
    facilities; the valuation of fixed maturity, equity and trading
    securities; defaults, downgrades or other events impacting the value of
    the company's fixed maturity securities portfolio; defaults on the
    company's commercial mortgage loans or the mortgage loans underlying the
    company's investments in commercial mortgage-backed securities and
    volatility in performance; goodwill impairments; defaults by
    counterparties to reinsurance arrangements or derivative instruments; an
    adverse change in risk based capital and other regulatory requirements;
    insufficiency of reserves; legal constraints on dividend distributions by
    the company's subsidiaries; competition; availability, affordability and
    adequacy of reinsurance; loss of key distribution partners; regulatory
    restrictions on the company's operations and changes in applicable laws
    and regulations; legal or regulatory investigations or actions; the
    failure of or any compromise of the security of the company's computer
    systems; the occurrence of natural or man-made disasters or a pandemic;
    the effect of the enactment of the Dodd-Frank Wall Street Reform and
    Consumer Protection Act; changes in the accounting standards issued by the
    Financial Accounting Standards Board or other standard-setting bodies;
    impairments of or valuation allowances against the company's deferred tax
    assets; changes in expected morbidity and mortality rate; accelerated
    amortization of deferred acquisition costs and present value of future
    profits; reputational risks as a result of rate increases on certain in
    force long term care insurance products; medical advances, such as genetic
    research and diagnostic imaging, and related legislation; unexpected
    changes in persistency rates; ability to continue to implement actions to
    mitigate the impact of statutory reserve requirements; the failure of
    demand for long term care insurance to increase; political and economic
    instability or changes in government policies; foreign exchange rate
    fluctuations; unexpected changes in unemployment rates; unexpected
    increases in mortgage insurance default rates or severity of defaults; the
    significant portion of high loan to value insured international mortgage
    loans which generally result in more and larger claims than lower
    loan-to-value ratios; competition with government owned and government
    sponsored enterprises offering mortgage insurance; changes in
    international regulations reducing demand for mortgage insurance;
    increases in mortgage insurance default rates; failure to meet, or have
    waived to the extent needed, the minimum statutory capital requirements
    and hazardous financial condition standards; uncertain results of
    continued investigations of insured U.S. mortgage loans; possible
    rescissions of coverage and the results of objections to the company's
    rescissions; the extent to which loan modifications and other similar
    programs may provide benefits to the company; unexpected changes in
    unemployment and underemployment rates in the United States; further
    deterioration in economic conditions or a further decline in home prices
    in the United States; problems associated with foreclosure process defects
    in the United States that may defer claim payments; changes to the role or
    structure of Federal National Mortgage Association (Fannie Mae) and
    Federal Home Loan Mortgage Corporation (Freddie Mac); competition with
    government owned and government sponsored enterprises offering U.S.
    mortgage insurance; changes in regulations that affect the U.S. mortgage
    insurance business; the influence of Fannie Mae, Freddie Mac and a small
    number of large mortgage lenders and investors; decreases in the volume of
    high loan to value mortgage originations or increases in mortgage
    insurance cancellations in the United States; increases in the use of
    alternatives to private mortgage insurance in the United States and
    reductions by lenders in the level of coverage they select; the impact of
    the use of reinsurance with reinsurance companies affiliated with U.S.
    mortgage lending customers; legal actions under the Real Estate Settlement
    Procedures Act of 1974; and potential liabilities in connection with the
    company's U.S. contract underwriting services;
  oOther risks, including the risk that adverse market or other conditions
    might further delay or impede the planned IPO of the company's mortgage
    insurance business in Australia; the possibility that in certain
    circumstances the company will be obligated to make payments to General
    Electric Company (GE) under the tax matters agreement with GE even if the
    company's corresponding tax savings are never realized and payments could
    be accelerated in the event of certain changes in control; and provisions
    of the company's certificate of incorporation and bylaws and the tax
    matters agreement with GE may discourage takeover attempts and business
    combinations that stockholders might consider in their best interests; and
  oRisks relating to the company's common stock, including the suspension of
    dividends and stock price fluctuations.

The company undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future developments or

SOURCE Genworth Financial, Inc.

Contact: Investors: Georgette Nicholas, +1-804-662-2248,, Media: Tom Topinka, +1-804-662-2444,
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