Genworth's MI Agrees to Pay on POA Bulk Coverage

Genworth Financial, Richmond, will take a $65 million provision to settle a $531 million bulk insurance dispute concerning payment option ARMs. In a new filing with the Securities and Exchange Commission, Genworth said it went to arbitration with an undisclosed lender and reached a settlement. The company, which owns the nation's fourth largest MI (in terms of policies-in-force), said "After giving effect to the premiums retained, settlement payments, and other consideration exchanged by the parties, we have made an additional provision for obligations" that will cost it $65 million. Meanwhile, Genworth has commenced a $500 million public offering of common stock in a deal underwritten by Goldman Sachs, Bank of America/Merrill Lynch, and Deutsche Bank. A new research note from Sandler O'Neill says the company is still considering "strategic alternatives" for its MI business.