Nation's Smallest MI Says It May Not Survive

Triad Guaranty Inc., the parent of the nation's smallest mortgage insurer, said in a new public filing that it may not continue as a going concern.Its MI affiliate, Triad Guaranty Insurance Corp., has been in run-off since last July, and as a result, the company has been operating under a regulatory corrective order with the Illinois Department of Financial and Professional Regulation, Division of Insurance. "This uncertainty is based on the ability of Triad to comply with the run-off provisions of the corrective order, the company's recurring losses from operations and a deficit in assets at Dec. 31, 2008," it says in a new SEC filing. Triad has a deficit in assets of $136.7 million as of Dec. 31, 2008. It expects to report a deficiency in policyholders' surplus starting with the first quarter 2009 and running through 2011. "Management is currently working with the Division to structure a revised corrective plan in a manner that is expected to provide for a solvent run-off. If the revised corrective plan is unsuccessful, the Division may be forced to place (the mortgage insurance subsidiary) into receivership which would effectively compel the parent, Triad Guaranty Inc., to declare bankruptcy," it says.