Fitch Assigns Negative Outlook to United Guaranty

Citing the uncertainty of its strategic direction, as well as overall concerns about the mortgage insurance business, Fitch Ratings, New York, has assigned United Guaranty Residential Insurance Co., Greensboro, N.C., a negative outlook. Fitch has affirmed the "BBB" insurer financial strength rating of the company, saying it reflects its view on UGRIC's risk profile and capitalization, including existing support agreements and a recently executed reinsurance agreement with MG Reinsurance. The statement from Fitch also noted that Eric Martinez — who United Guranty Corp.'s ultimate corporate parent AIG recently appointed as chief executive of UGC — "is part of the management team tasked with restructuring and/or disposing of businesses and assets as part of AIG's effort to repay U.S. government funds. For the past two months, [Mr.] Martinez has led a comprehensive strategic review for UGC. Should UGC be placed into run-off and/or if steps are taken to reduce current levels of capital and/or capital support, then additional negative rating action may result."