MGIC Enters Reinsurance Pact With HCC

Mortgage Guaranty Insurance Corp., Milwaukee, has entered into a reinsurance agreement with an affiliate of HCC Insurance Holdings Inc., Houston. The agreement covers up to $50 billion of insurance written after April 1, 2008. It is scheduled to end on Dec. 31, 2010, subject to two one-year extensions at HCC's option. In its statement, MGIC said it believes that substantially all the insurance it writes qualifies to be reinsured by HCC. MGIC Investment Corp. chairman and chief executive Curt Culver said the agreement is another step in the company's capital plan and is expected to provide claims-paying resources in catastrophic loss environments for insurance written after April 1. This transaction is being accounted for under deposit accounting rather than reinsurance accounting, and the premium ceded and the brokerage commission will be recorded as an expense by MGIC. MGIC can be found on the Internet at http://www.mgic.com.