Statement: SEC Final Securities Act Rule 192 Prohibiting Conflicts of Interest in Certain Securitizations

November 27, 2023

WASHINGTONSeth Appleton, President of U.S. Mortgage Insurers (USMI), the association representing the nation’s leading private mortgage insurance (MI) companies, issued the following statement on the Securities and Exchange Commission’s (SEC) finalized Securities Act Rule 192, which regulates the prohibition against conflicts of interest in certain securitizations.

“USMI applauds SEC Chairman Gensler, the commissioners, and staff for their responsiveness to comments from USMI, federal policymakers, and other market participants by issuing a final rule that reflects the value of input from key stakeholders. With today’s final Rule 192, the U.S. housing finance system remains on steady and robust footing as it is confirmed that mortgage insurance-linked note (MILN) transactions, used by private mortgage insurers to source capital markets-based reinsurance, are not impaired in any way by this rulemaking. Since 2015, MILN transactions have been an integral aspect of the private MI industry’s programmatic use of credit risk transfer, allowing USMI member companies to manage capital and risk and, therefore, continue expanding access to homeownership while adding stability to the housing finance system.

“MILNs help the private MI industry maintain robust capital positions, protect the taxpayers, and are a significant part of the enhancements undertaken after the 2008 financial crisis to ensure stability regardless of broader market characteristics. The private MI industry looks forward to continuing to work together with policymakers to ensure that the housing finance industry remains strong and protected from undue risk.”

On March 27, the U.S. private MI industry submitted a comment letter to the SEC in response to the Proposed Rule 192, outlining concerns about its potential impact on MILN transactions. On October 27, the industry submitted a supplemental comment letter proposing a new, limited safe harbor to the list of excepted activities to ensure that MILNs are not restricted or prohibited. Recently, USMI released a new report detailing the critical enhancements the private MI industry has undertaken over the past 15 years, allowing it to better support the housing finance system. Among the enhancements are the credit risk transfer (CRT) structures, including MILN transactions. Since 2015, private MIs have issued 56 ILN transactions, transferring nearly $22.3 billion of risk on more than $2.3 trillion of notional mortgages.


U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to affordable and sustainable housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at