Genworth’s CEO Stuart Levings says that the Office of the Superintendent of Financial Institutions will require insurers and lenders to hold greater capital reserves to reduce risk to the financial system. That, he says, will cut underwriting profits to unacceptable levels.
Levings forecasts that premiums would need to increase by around 15 per cent to cover the additional costs, although any move would probably track the CMHC’s rates.
Speaking to the Globe and Mail, he said that there could be new opportunity in the market with early talks underway with some mortgage lenders which could see new insurance products available to those not eligible for portfolio insurance.
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Homeowners could be facing mortgage insurance price increases next year according to the boss of Canada’s largest private mortgage insurer.