GEMICO Downgraded

The insurer financial strength rating of GE Mortgage Insurance Corp., Raleigh, N.C., has been downgraded from AAA to AA by Fitch Ratings in the wake of an announcement by GEMICO that it would reduce its capital levels.The rating "reflects an assessment of GEMICO on a stand-alone basis and assumes that capital in excess of that required to meet Fitch's 'AA' stress test requirements will ultimately be dividended out of the company," the rating agency said. GEMICO said it decided to operate its domestic business at capital levels consistent with double-A credit ratings after a strategic review and analysis of its business and capital structure. "In today's competitive market, it simply makes sense for us to use our capital as efficiently as possible," said Tom Mann, president and chief executive officer of GEMICO. "By operating at the 'AA/Aa2' capital levels that prevail in the industry, we can free excess capital to improve our return on equity while aggressively filling the needs of our lenders, investors, and the low-downpayment market." The move will leave United Guaranty Corp., Greensboro, N.C., as the industry's only triple-A rated mortgage insurer. GEMICO can be found online at http://www.gemortgageinsurance.com.