New Private Mortgage Insurer Starts Up In Pa.

Essent's entry comes in a marketplace that has been battered by the explosion of mortgage defaults, foreclosures and collapse of the subprime market. Insurers in the sector pay lending institutions when there is a default not covered by foreclosure.

Essent said it seeking approvals from other state insurance departments and anticipates that it will become licensed as a mortgage insurance company throughout the United States "in the near future."

Approvals by the Pennsylvania Insurance Department and NAIC are "critical milestones in the development of Essent's mortgage insurance business," Mark A. Casale, Essent's president and chief executive officer, said in a statement.

"Our entry into the market re-affirms the valuable role mortgage insurance can play in helping home buyers who cannot afford large down payments to achieve homeownership, while also providing significant support for the American housing finance system," he added.

The announcement quoted Pennsylvania Insurance Commissioner Joel Ario as stating that his state "recognized the need for a new, well-capitalized mortgage insurance company to help our citizens achieve homeownership."

"We are pleased that we were able to complete our review of Essent and issue our approval in a time of real need in the mortgage market," Mr. Ario said. "In addition, as a member of the NAIC, we support Essent's efforts to serve home buyers nationwide through the expedited licensing pilot,"

As part of its expedited licensing pilot, the NAIC seeks to streamline state-specific application requirements, including the need for hard copies of forms and supplemental information involved in Uniform Certificate of Authority Applications (UCAA). This is intended to facilitate the efficient regulatory review of new entrants in insurance industry sectors deemed of national importance, the NAIC explained

"As part of its decision to accept Essent's licensing as part of the streamlined pilot program, NAIC's working group recognized the significant need for another mortgage insurance company with experienced management and the capability to provide support for more home buyers nationwide," said Jill Jacobi, of the California Insurance Department, who co-chairs the NAIC's National Treatment and Coordination Working Group.

Ms. Jacobi said the NAIC looks forward to working with Essent "and our insurance regulators to facilitate this process."

Essent said it will provide coverage for borrowers who can afford a home, but not a large down payment, by insuring mortgage lenders and investors from credit losses.

The company said it will provide private capital to take mortgage credit risk, working as a risk management partner with lenders and other mortgage investors.