OLDWICK, N.J.--(BUSINESS WIRE)--In this A.M.BestTV episode, Emmanuel Modu, managing director, insurance-linked securities, and Wai Tang, director, insurance-linked securities, A.M. Best, examine how the rating agency evaluates mortgage-related insurance-linked securities (MILS) transactions. Click on http://www.ambest.com/v.asp?v=mortgageils818 to view the entire program.
Mortgage-related insurance-linked securities transactions are relatively new to the market, according to the episode, and are collateralized and used as a substitute for traditional reinsurance.
“One important factor in analyzing mortgage insurance is risk-in-force,” said Modu. “Risk-in-force determines the maximum exposure faced by mortgage insurers to losses. In other words, risk-in-force equals mortgage insurance coverage percentage plus unpaid principal balance.”
“A.M. Best rates mortgage-related insurance-linked securities by using the following information: (1) transactions that will be assigned a Long-Term Issue Credit Rating based on A.M. Best’s 21-point scale; (2) methodology and criteria; (3) information review; and (4) qualitative considerations,” said Tang.
To view this entire webinar visit http://www.ambest.com/webinars/mortgageils18.
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