American mortgage insurer NMI Holdings is taking advantage of Bermuda’s insurance-linked securities framework to acquire more than $200 million worth of reinsurance cover.

NMI said in a regulatory filing with the Securities and Exchange Commission yesterday that its subsidiary National Mortgage Insurance Corporation was buying $211.3 million of excess of loss protection through a Bermudian special purpose insurer, which will simultaneously sell ILS securities of an equal value to third-party capital-market investors.

The reinsurance would cover an existing portfolio of mortgage insurance policies, the filing stated.

“The mortgage insurance-linked note offering launched today and is expected to close in the first week of May 2017, subject to market and other customary conditions,” the filing stated.

ILS market watcher Artemis.bm said NMI will be only the second firm to use an ILS structure to transfer mortgage insurance risk. The first was United Guaranty, when it was a subsidiary of American International Group, through the Bellemeade Re special purpose insurer, in 2015 and 2016.

National Mortgage Insurance Corporation provides private mortgage guaranty insurance services in the US. The company is based in Emeryville, California.