Question-and-Answer Session
Operator
(Operator Instructions). Steve Stelmach, your line is open.
Steve Stelmach - FBR Capital Markets
Could you just go over the mechanics of the $92 million capital contribution again? I know you talked about it to some degree, but I'm not exactly clear what's going on there.
Don Lofe
We haven't received final written approval from the particular department, but basically we will contribute the PIC Company or PMI Insurance Company to the PMI Mortgage Insurance Company and we believe that would be effective as of September 30. However, we haven't completed that. If in fact that is done, it will become a downstream subsidiary of the main operating company.
Steve Stelmach - FBR Capital Markets
Got it. It's the value of $92 million?
Don Lofe
That's correct. It would reduce the risk to capital ratio, as Steve and I pointed out, to 16.9-to-1.
Steve Stelmach - FBR Capital Markets
There is no additional opportunities to do something similar in future quarters?
Don Lofe
At this time, we don't believe so. As Steve mentioned and I did, we continue to look at various internal capital initiatives.
Steve Stelmach - FBR Capital Markets
On the reserve per delinquent loan, it looked like it declined quarter-over-quarter. What's the thought process there? What's the mechanics that's driving that?
Don Lofe
Are you talking about how we presented it in the supplement?
Steve Stelmach - FBR Capital Markets
Given all the machination that was going on in the quarter, it seems like it should have been a little bit higher than perhaps quarter-over-quarter. Can you sort of walk through you expect the severity of the delinquent loans to go down or what's going on?
Don Lofe
Could you give a little more articulation to your question here. We're comfortable with what you articulated relative to security and claim rates and size.
Steve Stelmach - FBR Capital Markets
I'm just looking at your reserve for delinquent loan and I'm calculating something in the low $20,000, $22,000 range. Was it like $25,000 prior quarter, $26,000 prior quarter?
Don Lofe
$25,000, you're right and then it has come down.
Steve Stelmach - FBR Capital Markets
I guess the question is if that's lower, yet your average claim size is higher and your delinquent inventory is higher, just wondering what the thought process is.
Don Lofe
Part of that's going to be because of the pool commutations effect. That's really giving a little bit of a, for lack of better term, anomalous effect.
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