Genworth Benefits From Implementation of Government Guarantee Legislative Framework In Canada
RICHMOND, Va., Dec. 20, 2012 /PRNewswire/ -- Today, Genworth Financial, Inc.'s (NYSE: GNW) Canadian subsidiary, Genworth MI Canada Inc. (TSX: MIC) reported the anticipated financial impact, under International Financial Reporting Standards ("IFRS"), from the implementation of the Protection of Residential Mortgage or Hypothecary Insurance Act (Canada) ("PRMHIA"), effective on January 1, 2013. PRMHIA establishes a legislative framework that replaces the current Government Guarantee Agreement. For additional details, a copy of the press release issued by MIC is posted on its website at www.genworth.ca.
While there is no change in the level of the Government Guarantee to MIC under PRMHIA, it does eliminate the Government Guarantee Fund and related exit fees in favor of a higher regulatory capital target set by Canada's Minister of Finance. When PRMHIA is implemented, the elimination of the Government Guarantee Fund will increase MIC's regulatory capital available, which is expected to be predominately offset by an increase in its required capital. The implementation of this legislation is positive and will strengthen Genworth MI Canada's claim paying ability.
Under U.S. Generally Accepted Accounting Principles (GAAP), Genworth Financial expects a benefit of approximately $80 million in the fourth quarter of 2012 to its net income(1) from the reversal of the accrued liability for exit fees associated with this change to the Government Guarantee Agreement. Genworth Financial's current year portion of the exit fee accrual for the business through September 30, 2012 was approximately $8 million. There are no other significant impacts anticipated on GAAP results or U.S. statutory capital levels.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company dedicated to helping people secure their financial lives, families and futures. Genworth has leadership positions in offerings that assist consumers in protecting themselves, investing for the future and planning for retirement -- including life insurance, long term care insurance, financial protection coverages, and independent advisor-based wealth management -- and mortgage insurance that helps consumers achieve home ownership while assisting lenders in managing their risk and capital.
Genworth has approximately 6,300 employees and operates through three divisions: Insurance and Wealth Management, which includes U.S. Life Insurance, Wealth Management and International Protection segments; Global Mortgage Insurance, which includes U.S. and International Mortgage Insurance segments; and the Corporate and Runoff division. Its products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth Financial, Inc., which traces its roots back to 1871, became a public company in 2004 and is headquartered in Richmond, Virginia. For more information, visit genworth.com. From time to time, Genworth Financial, Inc. releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of genworth.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "will" or words of similar meaning and include, but are not limited to, statements regarding the outlook for the company's future business and financial performance. Forward-looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, including risks disclosed in the company's reports on Form 10-K and Form 10-Q. The amount of the company's anticipated financial impact from the implementation of the PRMHIA is estimated and preliminary and may change after the completion of the fourth quarter of 2012 when the company finalizes its financial reporting for the quarter. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
(1) Unless otherwise stated, all references in this press release to net income should be read as net income available to Genworth's common stockholders.
SOURCE Genworth Financial, Inc.