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Q.How much competition is there really in the market? There are some things you insure that CMHC doesn’t, like second homes. But some might point to the fact CMHC increased premiums in May and private competitors were pretty quick to pass on the exact same increase.

A. It’s a fair comment. But you will always see nuances. If you think about it, the government of Canada, through a sandbox, really dictates the type of product offerings in the marketplace. You won’t see a lot of differentiation. You will continue to see some differentiation on some on the peripheral products. The larger question is how does CMHC move from being a dominant player to just a player in the space?

Q.The government backs CMHC insured mortgages 100% but only 90% for the two private companies, how important is that 10 percentage point gap?

A. I believe it’s less of a factor today. There are a number of reasons. One of them is the strength of the ownership team at Canada Guaranty. But the level of capital required [for insured mortgages] continues to increase, so there’s that buffer which is healthy for the housing market. All three mortgage insurers are now regulated by [Office of the Superintendent of Financial Institutions].

Q.Can you ever see a world where the government gets completely out of backing mortgage default insurance for companies like yours?

A. It would be difficult to fathom (as long as the CMHC is still in the marketplace with its government backing). The point I would emphasize is if the private sector competitors take on more of the risk, you are putting private capital in play before the government backstop can be triggered. That’s the important nuance to emphasize, it’s putting private capital at risk instead of public capital.

Q.Can you see mortgage insurance evolving into a more risk-based system where your premium is based more on individual risk factors like your credit score?

A. I don’t anticipate any movement in that direction in the short run. With CMHC being the dominant player, it becomes difficult to have price differentiation in the marketplace.

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