
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, July 1, 1993                   TAG: 9307010120
SECTION: VIRGINIA                    PAGE: C4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: NEWPORT NEWS                                LENGTH: Medium

5 LEGISLATORS LOOKING TO PROFITABLE NEW FIRM

A new mortgage insurance company being launched by five Virginia lawmakers, including Vinton Del. Richard Cranwell, could be making big profits within months of getting state approval to operate, according to its financing statement.

International Guaranty Insurance Corp., whose directors and major stakeholders include Democratic leaders of the General Assembly and the head of the committee that writes Virginia insurance law, forecasts a profit of between $400,000 and $950,000 next year, said the financing statement offered to potential investors.

The company could make that much by collecting almost $5 million in premiums for mortgage insurance. The financing statement is on file at the North Carolina secretary of state's office, which provided a copy to the Daily Press of Newport News.

Senate Majority Leader Hunter Andrews, D-Hampton; House Majority Leader Cranwell, D-Vinton; House Corporations, Insurance and Banking Committee Chairman Lewis Parker, D-South Hill; and Del. Alan Diamonstein, D-Newport News, each own 2,500 shares in the company.

They also have the right to buy 10,000 more shares at $1 a share, according to the financing statement.

Del. Alson Smith, D-Winchester, has 3,700 shares and rights to buy an additional 12,400 shares.

All five are directors of the company. Cranwell, Parker and Smith are members of the company's executive committee, an inner circle of directors responsible for running the company, according to the financing statement.

Smith also is treasurer of the company, the statement said.

Mortgage insurance companies repay banks when homeowners default on their loans. Homeowners actually pay the premiums, however.

The financing statement does not disclose how much each legislator paid for shares, but the newspaper's calculations from figures in the statement show that Andrews, Diamonstein, Cranwell and Parker each invested $25,000. Smith invested $37,000.

The company wants to raise as much as $14 million of capital from investors who will be required to invest a minimum of $25,000 each. As of March, the company's capital stood at $486,000.

by CNB