# Wis. Admin. Code Ins § 3.09: Mortgage guaranty insurance

> Wisconsin · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_WI_ADC_Ins_3_09

## Section

- **Citation:** Wis. Admin. Code Ins § 3.09
- **Heading:** Mortgage guaranty insurance
- **Jurisdiction:** Wisconsin
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Wisconsin Administrative Code / Ins / Chapter Ins 3 / § Ins 3.09

## Text

Mortgage guaranty insurance.
(1) Purpose. This section implements and interprets s. Ins 6.75 (2) (i) and (j) and ss. 601.01 , 601.42 , 611.19 (1) , 611.24 , 618.21 , 620.02 , 623.02 , 623.03 , 623.04 , 623.11 , 627.05 and 628.34 (12) , Stats., for the purpose of establishing minimum requirements for the transaction of mortgage guaranty insurance.
(2) Scope. This rule shall apply to the underwriting, investment, marketing, rating, accounting and reserving activities of insurers which write the type of insurance authorized by s. Ins 6.75 (2) (i) and (j) .
(3) Definitions.
(a) “Amount at risk” means the coverage percentage or the claim settlement option percentage multiplied by the face of amount of a mortgage or by the insured amount of a lease.
(b) “Annual statement” means the fire and casualty annual statement form specified in s. Ins 7.02 , Forms 22-010 and 22-011.
(c) “Contingency reserve” means the reserve established for the protection of policyholders against the effect of losses resulting from adverse economic cycles.
(d) “Equity” means the complement of the Loan-to-Value.
(e) “Face amount” means the entire indebtedness under an insured mortgage before computing any reduction because of an insurer’s option limiting its coverage.
(f) “Loan-to-value” means the ratio of the entire indebtedness to value of the collateral property expressed as a percentage.
(g) “Mortgage guaranty account” means the portion of the Contingency Reserve which complies with 26 USC 832 (e) as amended.
(h) “Mortgage guaranty insurance” means that kind of insurance authorized by s. Ins 6.75 (2) (i) .
(i) “Mortgage guaranty insurer” means an insurer which:
1. Insures pursuant to s. Ins 6.75 (2) (i) , or
2. Insures pursuant to s. Ins 6.75 (2) (j) against loss arising from failure of debtors to meet financial obligations to creditors under evidences of indebtedness secured by a junior lien or charge on real estate.
aranty insurance” means that kind of insurance authorized by s. Ins 6.75 (2) (i) .
(i) “Mortgage guaranty insurer” means an insurer which:
1. Insures pursuant to s. Ins 6.75 (2) (i) , or
2. Insures pursuant to s. Ins 6.75 (2) (j) against loss arising from failure of debtors to meet financial obligations to creditors under evidences of indebtedness secured by a junior lien or charge on real estate.
(j) “Mortgage guaranty insurers report of policyholders position” means the annual supplementary report required by s. Ins 7.02 , Forms 22-090 and 22-091.
(k) “NAIC Ratio—Investment Yield” means net investment income earned after taxes from the annual statement divided by mean invested assets.
(L) “Person” means any individual, corporation, association, partnership or any other legal entity.
(m) “Policyholders position” includes the contingency reserve established under sub. (14) , the deferred risk charge established under sub. (13) (b) and surplus as regards policyholders. “Minimum policyholders position” is calculated as described in sub. (5) .
(n) “Surplus as regards policyholders” means an insurer’s net worth, the difference between its assets and liabilities, as reported in its annual statement.
(4) Discrimination. No mortgage guaranty insurer may discriminate in the issuance or extension of mortgage guaranty insurance on the basis of the geographic location of the property or the applicant’s sex, marital status, race, color, creed or national origin.
(5) Minimum policyholders position.
(a) For the purpose of complying with s. 623.11 , Stats., a mortgage guaranty insurer shall maintain at all times a minimum policyholders position in the amount required by this section. The policyholders position shall be net of reinsurance ceded but shall include reinsurance assumed.
(b) If a mortgage guaranty insurer does not have the minimum amount of policyholders position required by this section it shall cease transacting new business until such time that its policyholders position is in compliance with this section.
yholders position in the amount required by this section. The policyholders position shall be net of reinsurance ceded but shall include reinsurance assumed.
(b) If a mortgage guaranty insurer does not have the minimum amount of policyholders position required by this section it shall cease transacting new business until such time that its policyholders position is in compliance with this section.
(c) If a policy of mortgage guaranty insurance insures individual loans with a percentage claim settlement option on such loans, a mortgage guaranty insurer shall maintain a policyholders position based on: each $100 of the face amount of the mortgage; the percentage coverage; and the loan-to-value category. The minimum amount of policyholders position shall be calculated in the following manner:
1. If the loan-to-value is greater than 75%, the minimum policyholders position per $100 of the face amount of the mortgage for the specific percent coverage shall be as shown in the schedule below:
2. If the loan-to-value is at least 50% and not more than 75%, the minimum amount of the policyholders position shall be 50% of the minimum of the amount calculated under subd. 1.
3. If the loan-to-value is less than 50%, the minimum amount of policyholders position shall be 25% of the amount calculated under subd. 1.
(d) If a policy of mortgage guaranty insurance provides coverage on a group of loans subject to an aggregate loss limit, the policyholders position shall be:
1. If the equity is not more than 50% and is at least 20%, or equity plus prior insurance or a deductible is at least 25% and not more than 55%, the minimum amount of policyholders position shall be calculated as follows:
2. If the equity is less than 20%, or the equity plus prior insurance or a deductible is less than 25%, the minimum amount of policyholders position shall be 200% of the amount required by subd. 1.
3
ot more than 50% and is at least 20%, or equity plus prior insurance or a deductible is at least 25% and not more than 55%, the minimum amount of policyholders position shall be calculated as follows:
2. If the equity is less than 20%, or the equity plus prior insurance or a deductible is less than 25%, the minimum amount of policyholders position shall be 200% of the amount required by subd. 1.
3. If the equity is more than 50%, or the equity plus prior insurance or a deductible is more than 55%, the minimum amount of policyholders position shall be 50% of the amount required by subd. 1.
(e) If a policy of mortgage guaranty insurance provides for layers of coverage, deductibles or excess reinsurance, the minimum amount of policyholders position shall be computed by subtraction of the minimum position for the lower percentage coverage limit from the minimum position for the upper or greater coverage limit.
(f) If a policy of mortgage guaranty insurance provides for coverage on loans secured by junior liens, the policyholders position shall be:
1. If the policy provides coverage on individual loans, the minimum amount of policyholders position shall be calculated as in par. (c) as follows:
a. The loan-to-value percent is the entire loan indebtedness on the property divided by the value of the property;
b. The percent coverage is the insured portion of the junior loan divided by the entire loan indebtedness on the collateral property; and
c. The face amount of the insured mortgage is the entire loan indebtedness on the property.
2. If the policy provides coverage on a group of loans subject to an aggregate loss limit, the policyholders position shall be calculated according to par. (d) as follows:
a. The equity is the complement of the loan-to-value percent calculated as in subd. 1. ;
b. The percent coverage is calculated as in subd. 1. ; and
c. The face amount of the insured mortgage is the entire loan indebtedness on the property.
olicy provides coverage on a group of loans subject to an aggregate loss limit, the policyholders position shall be calculated according to par. (d) as follows:
a. The equity is the complement of the loan-to-value percent calculated as in subd. 1. ;
b. The percent coverage is calculated as in subd. 1. ; and
c. The face amount of the insured mortgage is the entire loan indebtedness on the property.
(g) If a policy of mortgage guaranty insurance provides for coverage on leases, the policyholders position shall be $4 for each $100 of the insured amount of the lease.
(h) If a policy of mortgage guaranty insurance insures loans with a percentage loss settlement option coverage between any of the entries in the schedules in this subsection, then the factor for policyholders position per $100 of the face amount of the mortgage shall be prorated between the factors for the nearest Percent Coverage listed.
(6) Limitation on investment. A mortgage guaranty insurer shall not invest in notes or other evidences of indebtedness secured by mortgage or other lien upon real property. This section shall not apply to obligations secured by real property, or contracts for the sale of real property, which obligations or contracts of sale are acquired in the course of the good faith settlement of claims under policies of insurance issued by the mortgage guaranty insurer, or in the good faith disposition of real property so acquired.
(7) Limitation on assumption of risks.
property. This section shall not apply to obligations secured by real property, or contracts for the sale of real property, which obligations or contracts of sale are acquired in the course of the good faith settlement of claims under policies of insurance issued by the mortgage guaranty insurer, or in the good faith disposition of real property so acquired.
(7) Limitation on assumption of risks.
(a) A mortgage guaranty insurer shall not insure loans secured by properties in a single or contiguous housing or commercial tract in excess of 10% of the insurer’s admitted assets. A mortgage guaranty insurer shall not insure a loan secured by a single risk in excess of 10% of the insurer’s admitted assets. In determining the amount of such risk or risks, the insurer’s liability shall be computed on the basis of its election to limit coverage and net of reinsurance ceded to an insurer authorized to transact such reinsurance in this state. “Contiguous” for the purpose of this subsection means not separated by more than one-half mile.
(b) A mortgage guaranty insurer shall not insure loans with balloon payment provisions unless the policy provides:
1. That liability for the balloon payment is specifically excluded; or
2. That at the time the lender calls the loan, the lender will offer new or extended financing at the then market rates; or
3. The scheduled maturity date of the balloon payment.
(7m) Segregated trust requirements. A segregated trust established under this section shall be established by a reinsurer for the benefit of a mortgage guaranty insurer and shall satisfy all of the following requirements:
(a) Has a trustee domiciled in the mortgage guaranty insurer’s state of domicile, domiciled in Wisconsin or approved by the commissioner.
(b) Meets the criteria in sub. (12) (g) and (h) .
(c) Invests in the type of assets permitted by s. Ins 6.20 (5) , or, for the reserves required by subs. (13) and (15) , in funds as defined by ch. Ins 52 .
rer and shall satisfy all of the following requirements:
(a) Has a trustee domiciled in the mortgage guaranty insurer’s state of domicile, domiciled in Wisconsin or approved by the commissioner.
(b) Meets the criteria in sub. (12) (g) and (h) .
(c) Invests in the type of assets permitted by s. Ins 6.20 (5) , or, for the reserves required by subs. (13) and (15) , in funds as defined by ch. Ins 52 .
(d) Makes quarterly and annual reports as required by the commissioner.
(e) Is subject to withdrawals only by and under the control of the ceding mortgage guaranty insurer.
(f) Permits examinations by the commissioner.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_WI_ADC_Ins_3_09. Check the current official text before relying on it. Not legal advice.