Letter: Mortgage Insurers Submit Supplemental Comment Letter to SEC’s Proposed Rule 192

October 20, 2023

On October 20, 2023, the U.S. private mortgage insurance (MI) industry submitted a supplemental comment letter to the Securities and Exchange Commission (SEC) in response to its Proposed Rule concerning “Prohibition Against Conflicts of Interest in Certain Securitizations.” The industry proposed adding a new, limited safe-harbor to the list of excepted activities to ensure that mortgage insurance-linked notes (“MILNs”) are not restricted or prohibited. This letter is in addition to the March 27, 2023 letter from the U.S. private MI industry explaining the mechanics and purpose of MILNs, as well as the role of private MI in mitigating mortgage credit risk and supporting low down payment borrowers. Importantly, federal lawmakers have weighed in on several occasions, including October 31, 2023 and May 23, 2023 bipartisan letters to urge the SEC to tailor the final rule such that the regulation appropriately protects investors and does not impact consumers’ access to financial products.