NU Online News Service, Aug. 25, 2:11 p.m.EDT

Fitch Ratings affirmed the 'A' insurer financial strengthratings of Old Republic International Corp.'s (ORI) insurancesubsidiaries and removed the company from Rating Watch Negative, asthe rating agency says it does not anticipate that the runoff ofORI's mortgage insurance subsidiary will have a significant adverseimpact on capital and liquidity.

"Fitch views the potential capital impact of a runoff ofRepublic Mortgage Insurance Company (RMIC) as limited to RMIC's$445.1 million capital base, given management's assertion that itwould be managed within those constraints," the rating agencysays.

In its last ratings action on RMIC on Aug. 9, Fitch downgradedthe mortgage insurer to 'B' from 'BB' and withdrew its coverage ofRMIC. "The company's statutory capital position has deterioratedsignificantly over the last several quarters, given continuedstress in its insured portfolio," Fitch said in an Aug. 9statement.

In an Aug. 3 notice on its website, RMIC says, "We wish toinform you that Republic Mortgage Insurance Company willdiscontinue writing new commitments for insurance effective Aug.31, 2011. RMIC has been operating pursuant to a waiver of minimumstate risk to capital ratio requirements which expire at the end ofAugust."

Earlier this month, Moody's Investors Service also citedtroubles at RMIC, noting that the company's parent, ORI, will notcontribute additional capital to help RMIC. Additionally, Moody'ssays RMIC's two major counterparties, government-sponsored entitiesFannie Mae and Freddie Mac, say the company is no longer an approveinsurer.

But in its latest statement on ORI, Fitch says, "The affirmationof ORI's ratings reflects operating performance of its core[property and casualty] as well as title insurance operations thatremain in line with Fitch's expectations and similar rated peers."Fitch says it is maintaining a negative outlook, though, reflecting"the continued uncertainty of mortgage market exposure on ORI'soperations."