PMI Group Places Lender Services in New Subsidiary.

The PMI Group Inc. here has created a new subsidiary, PMI Capital Corp., where all of its "diversification" businesses will reside.

This includes the company's international mortgage insurance units in Europe, Australia and New Zealand, its lender services businesses such as Fairbanks Capital, Truman Fund and American Pioneer Title Insurance Co. and its financial guaranty business.

Bradley M. Shuster, most recently president, international and strategic investments for PMI, has been named as president of PMICC.

The primary reason PMI has put these businesses together, Mr. Shuster said, is to bring focus to the company in terms of its diversification strategy. In addition, the company was looking to bring transparency to investors.

PMI "reached a critical mass in terms of the capital we deploy and in terms of earnings" so it established a management group to watch these businesses.

There are no balance sheet implications for PMI Group at this time, but there could be in the future if PMICC were to become the legal owner of the various units in the future.

While it might seem logical to keep the international mortgage insurance businesses with the U.S. mortgage insurance businesses (which includes CMG, a joint venture with CUNA Mutual), the international insurers are considered to be part of the diversification efforts and putting them into PMICC would not divert focus from the company's core business, he said. Another issue is that mortgage insurance in other countries takes a different form than it does in the U.S.