Thank you, Mr. Chairman and honourable members.
My name is Andy Charles. I'm the chief executive officer of AIG United Guaranty Canada. We are part of AIG, one of the world's leading insurers. AIG conducts business in over 130 countries. We've been in Canada since the early 1960s; we currently employ more than 850 Canadians.
Mr. Chairman, we believe that increased competition in mortgage insurance will benefit consumers, financial institutions, and the Canadian economy. At the same time it will make the government-backed insurance system safer by diversifying risk among more participants.
Allow me to highlight a few points. First, AIG has a rock-solid commitment to provide insurance to the entire Canadian market, urban and rural. We intend to provide innovative insurance across all segments.
Second, we are undergoing a rigorous examination process. OSFI is ensuring that we have adequate capitalization to serve the market through all parts of the economic cycle. The requirements for upfront capitalization are stringent, and we will meet them. We are backed by our parent, a company with $800 billion in assets and ranked by Forbes magazine as the fourth-largest corporation in the world.
Third, fostering competition, with well-capitalized insurers creating more choice, will reinforce the strength of our marketplace. New insured mortgages have a value of over $50 billion a year, and the total value of outstanding mortgages is more than $615 billion.
Fourth, as Budget 2006 states clearly, the provisioning change to $200 billion is due to the expansion of the mortgage market, not because another competitor is entering the market. Adding another well-capitalized insurer will diversify the taxpayer's risk.
Finally, increased competition benefits consumers. The entry of the existing private mortgage insurance company generated new products and better service for Canadians. We ask for the same opportunity.
Mr. Chairman, I would like to close with a quotation from a few years ago: “We applaud the government's intention to promote competition in mortgage insurance by levelling the playing field. Healthy competition clearly benefits consumers, lenders, and taxpayers.”
The speaker then was Peter Vukanovich, the president of Genworth Financial Canada. We applaud his sentiments and think what was true then is true today.
Thank you, Mr. Chairman.