Genworth USMI Statement on Settlement with Consumer Financial Protection
Bureau of Previously Disclosed Review of Arrangements with Lender-Affiliated
RICHMOND, Va., April 4, 2013
RICHMOND, Va., April 4, 2013 /PRNewswire/ --Genworth U.S. Mortgage Insurance
(USMI), a unit of Genworth Financial, Inc. (NYSE: GNW), today announced it has
agreed to settle with the Consumer Financial Protection Bureau (CFPB) to end
the agency's review of industry captive reinsurance arrangements. As part of
the settlement, Genworth will pay $4.5 million and, along with other mortgage
insurance companies, refrain from certain reinsurance arrangements for a
period of 10 years. The settlement will be recorded in the first quarter of
2013, and is not anticipated to have a significant impact on Genworth USMI
financial results. With this settlement, the CFPB did not make any findings or
determinations that Genworth or any other company violated any law.
Genworth USMI issued the following statement on reaching the agreement:
"Genworth USMI agreed to settle this review so we can focus our resources on
working with customers to help borrowers responsibly achieve and maintain
homeownership, and to resolve the uncertainties inherent in such a review and
any possible resulting litigation," said Rohit Gupta, president and chief
executive officer of USMI.
"When Genworth USMI developed its captive reinsurance arrangements, it
received guidance from the Department of Housing and Urban Development (HUD),
which previously had responsibility for this area. HUD indicated that these
arrangements are permissible if certain requirements are met. Genworth
followed the guidance, and had the arrangements tested by independent third
parties to verify that the HUD requirements were met. Further, consumers paid
the same amount for the underlying insurance whether or not their loan was
part of a captive reinsurance arrangement."
"Private mortgage insurers paid more than $40 billion, several billion of
which came from lender-affiliated reinsurance companies, to offset losses from
defaulted mortgage loans during and after the financial crisis, providing
much-needed liquidity and capital to help support the housing industry during
the most severe crisis since the Great Depression," Gupta said.
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: U.S. Life Insurance, which includes life insurance, long term care
insurance and fixed annuities; Global Mortgage Insurance, containing U.S.
Mortgage Insurance and International Mortgage Insurance segments; and the
Corporate and Other division, which includes the International Protection,
Wealth Management and Runoff segments. Products and services are offered
through financial intermediaries, advisors, independent distributors and sales
specialists. Genworth Financial, Inc., headquartered in Richmond, Virginia,
traces its roots back to 1871 and became a public company in 2004. For more
information, visitgenworth.com. 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
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SOURCE Genworth Financial, Inc.
Contact: Media - Alfred King (Genworth U.S. Mortgage Insurance),
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