Relates to mortgage guaranty insurance

Showing the cosponsors who are on Agora, A to Z. The official record may list more.

• Democratic4
• Republican1

This bill has cosponsors from more than one party.

Shown in neutral colors by design; Agora is non-partisan.

◆ The sponsor's argument

Why Jamaal Bailey says this is needed

Mortgage guaranty insurance is a type of insurance coverage that protects banks and other lenders from losses if borrowers default on their residential home loans. Contingency reserves are special reserves that mortgage guaranty insurance companies are required to maintain by statute that are designed to protect policyholders against the effect of losses resulting from adverse economic cycles. insurance companies must contribute to their contingency reserves an amount equal to 50 percent of their het earned premiums (defined as gross premiums minus premiums returned to policyholders). The law also states that withdrawals may be made by mortgage guaranty insurance companies with the prior approval of the DFS Superintendent in any year in which the actual incurred losses exceed 35 percent of the corresponding earned premiums. However, this is the only exception the statute makes that allows for withdrawals from contingency reserves. In recent years, the mortgage guaranty insurance industry has experi- enced a significant and redundant buildup of regulatory capital due to contingency reserve increases. Mortgage guaranty insurance companies are much more resilient to stress scenarios than they were prior to the 2008 financial crisis due to much more stringent underwriting standards, compliance with Federal Private Mortgage Insurer Eligibility Require- ments (PMIERs) and substantial reinsurance including fully collateral- ized mortgage insurance linked notes. This legislation provides the DFS Superintendent with the discretionary authority to release contingency reserves if, in the Superintendent's sole determination, the financial condition of the requesting insurer would warrant such a release. Passage of this legislation will have no negative effect on consumers or the insured lenders and would maintain the existing statute's require- ment to maintain contingency reserves. New York is the only state with a contingency reserve requirement that does not defer to the domiciliary state or provide discretion to state regulators.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.