Old Republic International (ORI) plans to combine its struggling mortgage guaranty and consumer credit insurance divisions under one entity, the company said.
The Chicago-based insurance group said Wednesday both divisions need recapitalization, or a restructure of debt and equity, and said that would best occur separate from the holding company.
The mortgage and consumer credit insurance divisions have been in “run-off mode” since 2008 and August 2011, respectively, and Old Republic said “it has stopped additional capital funding” for them.
The two insurance lines will move under a renamed Republic Financial Indemnity Group, formerly known as Old Republic Mortgage Guaranty Group.
Old Republic posted a profit of $55.2 million in the fourth quarter, but lost $140.5 million for full-year 2011. Its mortgage insurance business hemorrhaged $163.2 million in the fourth quarter.
The restructuring is subject to regulatory approval.
