Genworth Distances Mortgage Unit From Rest of InsurerZachary Tracer
Genworth Financial Inc., the insurer that named a new chief executive officer this month, said it is reorganizing to separate most of the company from the mortgage-guaranty operation that saddled the firm with losses.
The insurer will create a new parent company, and the outstanding senior and subordinated notes will remain obligations of the old parent, Richmond, Virginia-based Genworth said today in a statement distributed by PR Newswire.
The switch will “remove the U.S. mortgage insurance subsidiaries from the companies covered by the indenture governing Genworth’s senior notes,” the insurer said in the statement.
Tom McInerney, who became CEO this month, is working to revamp the insurer after losses from the mortgage unit drained capital. The company also sells life insurance and long-term care coverage.
Genworth said it will contribute $100 million to the mortgage insurer as part of the plan, which the company expects to occur in the second quarter. Parts of its plan are still subject to regulatory approval, the insurer said.