Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Old Republic International Fourth Quarter 2007 Earnings Conference Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like to remind everyone that this conference is being recorded, and would now like to turn the conference over to Leslie Loyet of the Financial Relations Board. Please go ahead.

Thank you. Good afternoon, and thank you all for joining us today for Old Republic's conference call to discuss fourth quarter and year end 2007 results. This morning, we distributed a copy of the press release and hopefully you’ve all had a chance to review the results. If there is anyone online who did not receive a copy, you may access it at Old Republic's website at www.oldrepublic.com. Before I turn the call over to Al Zucaro, Old Republic's Chairman and Chief Executive Officer, please be advice that this call may involve forward-looking statements as discussed on the Add 6 page of the press release. Risks associated with these statements can be found in the company's latest SEC filings. With that, I'd like to turn the call over to Al for his opening remarks. Please go ahead.

Thank you, Leslie. And as she just said, you've all seen the release this morning. So we'll just spend a few minutes embroidering on a few points and then again open the call to any questions that may be out there. While we've... as we always say in the single business of insurance, we do manage it through three major segments. As you know… as you may know we also have the small Life and Health operation, which does not amount to very much and that is why we limit ourselves to a discussion of three segments. Those three segments as you can see in the release, two of them went south on us, while the largest part of our business, namely our General Insurance business, produced operating profits that were up moderately year-over-year. Leaving aside the degree of over and/or underperformance, these developments of our business in these three segments, as I say, were very much along the lines we had anticipated early in 2007. So going from the bottom up in terms of our capital allocation model and therefore focusing on our title business first, it performed somewhat more poorly in the final quarter of the year than it did in the first three quarters of 2007. And part of the performance lapse as you can see stems… or as you should know… I should say it does stem from the natural seasonality of this line since, as you know, housing transactions begin to slow down in the fall and generally do not pick up steam until late winter or early spring. On the other hand, some of it was due to some very pronounced cyclical downturn issues that we are currently experiencing in the housing and the related mortgage lending industries. And finally, some of it was…

Thank you. [Operator Instruction]. We will take our first question from Ron Bobman [ph] with Capital Returns.

Hi.

Yes, sir.

I had a couple of MI question, guess it is not a surprise. And I appreciate the loss ratio information that you provided sort of where you think you're going to be booking it in the ballpark in the next couple of years and how you are using the late ‘80s as a bit of a guidepost. And I’m curious if you could with respect to the prime book of business that you ensured in the MI operation, where you see whether it’d be '06 vintage or the beginning of '07, if you could you give relative to risk-in-force for that book, what the loss ratio you think will get to, whether that corresponds to where you are going to be booking it and maybe in stress case where you think that might get… where it could conceivably get to in a stress case?

All right. Let me start, and then I am going to ask Chris to add to the comment to the response to your question. On the big picture basis you are focused… and I can understand why you would be on the 2007 book and what kind of expectations we have for it, but as you know, unfortunately that is the book relative to which we have the least knowledge right now so that what we and all other insurance companies deal with when you are dealing with a new book of business is that you try to apply historical data to the current book and try to make judgments about how that new book might differ to come up to a set of expectations as to, let’s say, what loss ratios will look like. What we do obviously on our book of business is to look at the totality of all the policy used since those are in effect from all intents and purposes, continuous policy use in that we tend to do business with the same assureds and all that happens from one year to the next is that we change underwriting standards and what have you, and as I indicated before sometimes there is some price changes, etcetera. Having said that, I will ask Chris to add a little more color to that.

Yes. The first thing I would do is echo what Al said, which is the '07 book, which is a large book today is only on an average of about seven months old. It's very difficult to project a book that is on average six months old at this point. On the other side of that, clearly the market is worried about largely the last quarter of the business written in '05, '06, and from our standpoint largely the first three quarters in '07 we felt like the book started to… the market itself started to improve there in the third quarter of '07. So clearly, thus two books represent a large portion of the risk enforced for any of the MI companies, and likely Al gave you that 150% loss ratio number, we still feel pretty good about that number given the size in the early development out of the '06 and '07 books.

Can you provide a loss figure relative to risk enforced for the prime component of your book, whether it be for the '06 academic year or the portion of the '07… I am trying to sort of--?

I'd be uncomfortable projecting out that number today. Again, one it is so new, and two as you know the prime book is obviously effected what else goes on in the real state markets. And if you look at the rate decrease in where rates are today, there a lot of change in could come in the next 12 months with that '07 book. I would give you a number that didn't have any certainty around it.

All right. Well, even your 150% loss ratio doesn’t have any certainty about it, but I’ll move on. I believe that you’ve entered into captive reinsurance agreements. I am curious to know whether those are for the annual calendar year relationships and whether if they are they have sort of been re-negotiated with the terms materially different? I would think there would be cause to do so, but I haven't heard on anything in the marketplace.

Those are calendar year agreements, and on the main there has been meaningful re-negotiation of those terms.

I mean they are no difference than other re-insurance contracts that we have with other reinsures in the property and liability area or what have you. Those contracts run on the year-to-year. They are typically renewed or not renewed as mutually agreed by the parties. But once the term is all set for a particular calendar year book of business or a policy year book of business, the contracts are typically [inaudible] and therefore the terms are not changed.

And those are excessive loss agreements.

Yes, I just would have thought with this sort of the world of pain that the origin years have sort of grained down upon you and us, albeit… you are blind to it, but there has been a world of pain being rained down up you, that the terms of trade, the pricing of the relationship would be, and the structures would be… would want a change, but I guess not.

That has not happened so far. Most of contracts, correct me if I am wrong, Chris, have stayed in place at their original terms. We may have one or two less than the number of the fingers of hand, right, that may have asked us about potentially canceling on a go-forward basis, but certainly not changing the terms retroactively.

Correct.

Is that all right?

Yes.

Okay. And my last question… thanks for your patience. With respect to the MGIC and PMI investments, could you talk a little bit about the ingredients or analysis or thought making as far as making those investments with capital… company capital as opposed to increasing the allocation of buyback of your own stock? Thanks, and that's it from me, and best of luck.

Thank you. I'll address the second point of your question first. Buying back our own stock always involves de-capitalizing the company, reducing its capital. And… whereas making an investment with available investable funds, potentially at least that's what we believe increases the capital of your company if those investments turn out to be good. That's point number one. Point number two, if we were to take the $473 million of investments that we have in our, as I say, P&C companies and title companies, and move that to the... a mortgage guarantee company, we could not on an actively managed basis pick up anywhere close to the 6% of their balanced market share that on a see-through basis we gained through the investments in PMI and MGIC. We obliviously are showing quiet a bit of faith in their management of the business. We think they know what they are doing. We have a pretty good feel since we compete with those companies and the others on a daily basis. We have a good feel. We think about the nature of their book of business. And obviously, just like us we think that they are survivors and are going to do well when this market turns. So those were two of the issues that we focused on when we made those investments.

Thanks again. And again best of luck.

Yes sir.

Thank you. We'll take our next question from Beth Malone with KeyBanc.

Hi, Good afternoon.

Hi. Beth Malone – KeyBanc: Just a couple of questions, when you were talking the time at the beginning of your presentation, you talked about the fact that the insuring bulk and subprime markets are no longer out there. I just want to make sure I understand, are you suggesting that you're not... won't be providing mortgage insurance to subprime loans or did I misunderstand?

Well, let me have Chris tell you and everybody else what it is that we're doing today and what it is that we think is out in the market that can or cannot be done from an underwriting standpoint.

Sure. When we talk about the bulk subprime business, that was largely the business. I'm written to Wall Street firms that then got securitized in the public markets. We largely scaled out of that business in 2000... late 2006, and it has never been a big portion of what we do. And so we haven't written that in a while, and it is the big part of the liquidity that disappeared from the market in '07. So, I think it is suffice it to say that that's not been a very active part of the origination market as a whole, same for the other portion of the bulk insurance business which was the reduced stock business. It again was also a big chunk of the liquidity that disappeared in '07 and I think very little that business is taking place today in the market. Beth Malone – KeyBanc: Okay. Could…. another clarification, so that business that has been phased out, was that a relatively new phenomenon with this recent run-up in mortgage demand for mortgage insurance that wasn't part of the business, if you go back a few years or certainly when the markets had their other problems earlier that you were referencing?

Yeah, I would tell you the bulk businesses probably started to develop in '02 maybe, a lot later '01, but then certainly gained its footing in '03, '04, '05, peaked in at late '05, early '06, and then tapered down from there. Beth Malone – KeyBanc: Okay. And then in terms of where you are seeing the most delinquencies, is it somewhat concentrated on the West Coast or are there certain markets that you are seeing more problems than others?

Well, I think if you look to what you hear largely in the press, it affects us all the same way. I think we all refer to it a little differently. But most people are concerned about the deterioration in Florida and California. Those were sort of the more recent trouble spots and then the ongoing troubles that everybody has had in the upper Midwest, particularly Ohio and Michigan. So, if you look at the recent increases and losses the industry suffered, it's really from the onset of a slow market in Florida, California, and then a little slowness in the other half markets obviously, Nevada and Arizona. Beth Malone – KeyBanc: Okay. All right. Thanks.

Sure. Thank you.

Thank you. And we will take our next question from Dan Johnson from Citadel Investment Group.

Great. Thank you very much for taking my call.

Hi, Dan?

Good afternoon, sir. Question about the outlook when you think about the next two years and how the roll of captives may play in your reported loss ratios? I mean I guess I have my own set of assumptions, but I would be very interested to hear, if you think that those captives will be called upon in '08 and '09, and if that has any impact in '08, the '08 loss ratio on a reported basis will look relative to '09, even if on a gross basis they are sharing similar levels?

All right. Let me just say first of all, before I ask Chris to embroider on that. When we throw out that 150% shorthand loss ratio Dan, that's a net loss ratio. So inherently, it is inclusive of any NOL recoveries that we may get from the captives. In terms of the numbers as they will come through the income statement, I will ask Chris to give us a idea of what our current thinking is as to the timing of those recoveries from the captives.

Sure. What we would anticipate is those captives will begin to support us in a more meaningful way, late in 2008, later this year and then really come online, it’s a claim paying benefit in 2009. It's a little… it can be a little bit tricky to forecast exactly when you will pierce these layers, because each book with each large lender has a little different flavor to it, be it geographically concentrated based on where the lender originated most of their products or the various types of products that lenders do, but again we think they will start to provide more benefit later this year and then come online more meaningfully in '09.

And is there much time lag… I guess this is a liquidity question between when you need to make the payment on a gross basis and when you can draw on the cash.

No.

You mean, from the captives you’re talking about.

Yes

Yeah, yeah, Chris said no.

And then finally, when you look at the performance of the delinquencies within the quarter, can you talk about what you're seeing from the monthly performance, say in December relative to what we were seeing maybe overall on average, other words, are we seeing us exit 2007 on sort of an accelerating basis?

You mean an absolute number of delinquents?

I guess, however you want to put it into. I guess I’d think more in ratios base just to normalize for any growth although maybe that's not that big as a deal on the quarter, but I guess, however you would want to think about answering the question.

Delinquencies, I mean the easy way to answer that is delinquencies have increased throughout the quarter and I will reference back to Beth’s question which was the meaningful part of those increases have come out of the deterioration in Florida and California and then again some continued softness in the upper Midwest. So, why we wouldn't forecast when any of those economies will turn around, certainly they will continue to be weak through the bulk of '08.

And then finally with the outlook that you have, I know there's a lot of sensitivity of this business around unemployment. Can you talk a little bit about what sort of unemployment environment you're using when you think about the loss outlook that you've given to us? Thank you very much for the question.

Yeah, I would tell you that forecast, that it is built on a… not built on a lot of job growth. In fact it's basically in the short run a flat to slightly down job environment that backups those numbers.

Thank you.

Thank you and we will take our next question from [inaudible] with Raymond James. Unidentified Analyst – Raymond James: Hi. I just wanted to have a little bit more color on the mortgage insurance, the net premiums on growth, yet a double-digit growth in '07. Do you think it is going to be like that in '08 as well?

Chris, you want to take it?

Sure. The market for private mortgage insurance, I think has benefited strongly by this dislocation in the mortgage market, I think it's shown the value of the primary mortgage insurance market to originators and investors around the world, and that has gone a long way towards increasing the MI penetration rate, which is the amount of loans done in the marketplace that have mortgage insurance on it. Two, closed to record highs, I think it’s the lowest point about 6% of the market had primary insurance on it, and maybe mid-to-late '05 and I think we are running in the mid-to-upper teens today.

Wasn't it around sixteen point something at the end of September 1st.

Yes, it sounds all right. So, we would expect now whether it stays at those record high levels or not is yet to be seen, but we would expect continued good penetration rate in the market because our largest competitor which had been the piggyback business, where the borrower gets a first and second mortgage to avoid mortgage insurance is largely a structure that's not out there in the marketplace any longer. Unidentified Analyst – Raymond James: Okay. And then on to general… the insurance business, do you any combined ratio goals for this year?

We think that as you saw... as you see there for the fourth quarter a little bit of an inching up. We think that most of our coverages are going to show some loss ratio growth for the simple reason that we've had in the last 2.5 years compounded, perhaps we've lost maybe 7%, 8% of the premium rate through rate cuts of one sort or another. So that of itself is going to... should show an increase in the loss ratio for 2008. We don't have our budgets finished yet for '08, but the... I'll stick my neck out and suggest that whereas at the beginning of '07 we were suggesting a 92% to 94% combined ratio, and we came in slightly before... below that 92%, as you can see. That I would... I would say that a 93% to 96% is probably a better range for 2008. Unidentified Analyst – Raymond James: Okay. That's helpful. All right. Thank you.

Thank you. [Operator Instructions] And we will take our next question from Kevin Preloger with Perkins Wolf. Kevin Preloger – Perkins Wolf: Hi, all. How are you?

Hi, Kevin. Good, yourself? Kevin Preloger – Perkins Wolf: I am doing all right.

Good. Kevin Preloger – Perkins Wolf: Well, a few questions and I will ask at a different way, just on the buyback and then I guess, looking at the magic in PMI stakes, and both have losses and I think the scenario that you’re paying out for the next 24 months or so looks to be pretty ugly. And you see the losses mounting there at those two firms and the capital raises probably seem inevitable, and you just wonder what the dilution is going to be there. In addition, book value is going down. Now, look at Old Republic stock and see that you guys have been growing book value through this and buying back stock now, that's 30% discount. The book would seem to be like a pretty good investment at these prices, wouldn't you agree?

Well, as I said before Kevin, when you buy back your own stock you are de-capitalizing the company, and we don't think that this is a time to de-capitalize Old Republic. I mean, as I indicated before we think that given that scenario that we've painted for the mortgage guaranty business of let's say, we've used a shorthand of 150% loss ratio, this is going to be... this is going to have a negative effect on its capital and we may need to do some capital reallocations within the system. Currently, we think based on our understanding of what our customers, rating agencies and so forth, are looking for in the mortgage guaranty area, we think we are going to be allowed to run those businesses at a higher risk to capital ratio, but the question is going to be, how high is high? As you know, as I believe I may have said, from a regulatory standpoint, the bogie is 25 to 1. However, we think that the ratios at which we were operating back in the ‘80s, the last significant stress period of 21 to 1 is probably a max. And if that bears to thought should we achieve them, we are going to need capital. So again, this is not the time when you part with capital. You saw us, in the 3Q buyback small amount of our stock, but then when we saw the developments, they were going, we said to ourselves, we keep our powder dry right now. Kevin Preloger – Perkins Wolf: But I guess dry powder in investment portfolio given what those two companies have done, I mean I guess I look at it as a Old Republic shareholder where, to make my bed in the mortgage insurance space, I put that capital on you guys because I think that you are going to survive because you have the stronger balance sheet and are better underwriters versus those other two because I haven't invested my money with the others because I don't think you know what book value is and I don't think you know if conceivably if they are around if they're going, it's really tough over the last 24 months?

Yeah, well again I think we could have pretty good argument as to what they are going to do and not do and I don't know any more than you do about that, but the assumption we are going on now Kevin is that we're all going to be allowed at least the rating agencies are not making noises about cutting back on ratings that we are going to be allowed to write more business at a higher risk-to-capital ratio. And the very fact that we have made what we... for us are significant investments in those companies should tell you that at least we believe that they are going to be survivors and that if they do issue more capital of one sort or another that we don't think it's going to dilute us below the cost at which we acquired those stocks. Kevin Preloger – Perkins Wolf: Well I guess just one final point now. I'll leave it alone, but I think that clearly there is... there has been and continues to be some crisis of confidence here and in the mortgage insurance space and I think it does send a pretty good signal. I know you do have a balance sheet better than the rest of the industry, but that buying back stock would send a good signal that you're committed to your business as well and feel pretty good about your book of business while maintaining I think significant capital, you will be able to write new business, when it comes on the pipe.

Right. Well I'll just add one point Kevin and you've been around Old Republic as you say for a long time now. And I think you understand how we think. If it came back to getting rid of capital, you know that we have strong feelings that that capital should be given back to all the shareholders not just a few which is what happens when you buyback your own stock because again you de-capitalize the company and you are just making it easier for others to exit the stock. If we have money burning a hole in our pocket, we say okay, we will give it to all the shareholders as we did back in when was it? 2003 and we did again in 2005. But at this point in time, we think that the combination of potentially or fully increasing our dividend steadily, the regular dividend steadily and keeping some of our powder dry is the right thing to do in terms of the long-term interests of our shareholders. Kevin Preloger – Perkins Wolf: Great, thanks Al.

Yes sir.

Thank you. And we are going to take our next question from Bill Laemmel with Divine Capital Markets.

Hello. Bill Laemmel. Bill Laemmel – Divine Capital Markets: Hello. How are you Chris?

Hey, Bill. Bill Laemmel – Divine Capital Markets: Good to hear your voices. Well, what you are telling me is that your market share is going to go up, is that going to be your assumption in MI?

Well, this is what we try to do all the time provided we can grow it in the right spaces in areas where we think we can make a buck. Bill Laemmel – Divine Capital Markets: Okay. So that's a possibility here. Also, ultimately, can you just quickly trace the 178 claims ratio in the MI, how it affects prices going forward?

The 178, I am not sure.

Yeah, what do you mean by affects prices, Bill? Affects insurance prices? Bill Laemmel – Divine Capital Markets: Yes, [inaudible] prices.

Yeah, well, I think as Al mentioned earlier, we really are attacking the terms of trade on several dimensions, one obviously being guidelines. So, first off, take out of the mix, the products that are affecting us negatively that we don't see alike, you could really price at any level, and as we mentioned, what you see being chased as a marketplace today is a lot of the subprime, a lot of the reduced stock and the very high LTVs. Then the next dimension we would tackle at on is price. Now one thing I think about is we file rates with the various states and they have to be approved, you have to justify the rate increases on the bulk of the business. So, the rate increases that we have put in place are largely on the higher risk products that still remain in the marketplace. On the lower LTVs, higher credit products where the performance is still pretty stable those are largely still priced down as they were last year. Bill Laemmel – Divine Capital Markets: All right. Thank you. And are your inflation assumptions in your loss reserves over general insurance business, are they going up or down?

They have been pretty stable the last few years, Bill, including the medical portion because inflation, general inflation, as you know, has been under maps [ph], and we have not seen the effect of inflation to a much more significant degree than we did let's say back in the 1990s and even the early part of the 2000s. Bill Laemmel – Divine Capital Markets: And thank you very much. And Chris, one last question. Now you get a claim and then you reserve it in MI, and then you are paying a loss course, is there a general time lag between that event?

Yeah, it takes about eight… I’ll put it to you the whole time line. It takes about generally 18 months or so between the notification of delinquency to us and the ultimate payment of the claim. Bill Laemmel – Divine Capital Markets: Okay.

Of all the claims. Bill Laemmel – Divine Capital Markets: Yes, and thank you very much. I appreciate it.

All right.

Thanks, Bill.

Thank you, and we will take our next question from Stephen Mead with Anchor Capital Advisors.

Hi, Stephen. Hello? Stephen.

Mr. Mead, your line is open, please check your mute function. Thank you, and we will take our next question from Brian Hagler with Kennedy Capital. Brian Hagler – Kennedy Capital: Good afternoon.

Yes, sir. Brian Hagler – Kennedy Capital: Maybe to switch gears a little bit to the title business, I guess looking at your direct orders open, they were down 25% year-over-year. Can you just kind of talk about what you have seen kind of in January was it a drop in the ten-year or maybe what you would expect to see if the ten-year stays in 350, 360 range?

As I think, I tried to say briefly in my opening comments, there's no question that as these lower interest rates take hold and you that you start seeing the primary come down etcetera, etcetera, that you should have a greater opening for refunding its activity and hopefully even greater activity ultimately in the extension of mortgage loans, which certainly make the mortgages, the cost of the more affordable to more people. Have we seen that yet? There is indications here and there that some people are getting a little more excited and after moving down the road with commitments, but no, nothing hard yet. But I mean the... let's put at this way, the lowering of interest rates is a positive thing ultimately for the Title Insurance business at an earlier date than it is for the mortgage guaranty business. Brian Hagler – Kennedy Capital: Sure. Okay thanks. I appreciate it.

Thank you. And we will take our next question from Bill Clark at KBW. Bill Clark – KBW: Good afternoon.

Hi Bill. Bill Clark – KBW: Speaking with the Title business, I know you mentioned in your opening comments about sector-limited opportunities to reduce expenses going forward. Can you give any perspective for the expenses in the fourth quarter, the kind of breakout what’s variable and what's the fixed cost? Is there anything you can kind of give us any indication there?

I don't have those numbers in front of me Bill, but basically as you know we've got roughly still about 65%... excuse me of our Title business written through independent agents, so the lion share of the cost, the tendon to that is variable. The rest of it is where, we have the issues with cost cutting and so forth. But as I say, I'll have to get back to you with an indication of what percentage of our total cost is variable versus fixed. Bill Clark – KBW: Okay, thank you.

Yes. Operator: Thank you. And we'll take our next question a follow-up from Beth Malone of KeyBanc. Beth Malone – KeyBanc: Okay, thank you. Yeah, just a follow-up question on the Title. There was an uptick in the loss ratio on the Title, would you anticipate as we work through this that that’s going to be the case going forward in 2008 that we can anticipate that will continue to have that higher loss ratio?

Beth, if you go back to our numbers quarter-to-quarter or even year-to-year over the last five years, you will see that the loss ratio ended up around 3.5%, 4%, couple or three years ago. And at that time we said that lower loss ratio could not be sustained and that we expected loss ratios to uptick in the 5% to 6% range over time and we did that in effect between '05 and '06, and between '06 and '07, it has gone even further up as you have noticed to what was it 7.2% I think for the latest period. My gut for it's worth tells me that it might enchant [ph] a little bit more than that, let's say 7.5%, I would be very surprised if it goes to 8%. And that will be a reflection of the markets we were in where when they were claims, when there are problems with the loan, people start looking around to see if there is a scapegoat around and title companies will get growing. And so I think some of it... some of that is what's driving up the loss ratio currently and maybe for the current year 2008, but I think it should revert back to 6% of thereabout area. Beth Malone – KeyBanc: Okay. Does that suggest then that this kick-up in the loss ratio in not so much an underwriting issue as it is a change in claims or claim severity?

I think it’s a change in the economic circumstances, which is what I was trying to say before when the housing etcetera hits the skids, it tends to be a little more claims, and other thing that happened to a significant degree in Title Insurance, and I have to say in mortgage guaranty as well is that when… we went through a period of high refinance activity, and a lot of problems that may have been there with loans or with the Titles, it got swap by the continual refinancing of some of the product. And when the music stops, then the people have got to own up to some of the problems that maybe genetically imbued into and some of these loans. So I think that's what we are seeing now. We’ve had the same experience in prior downturns whether it is as a result of frauds or now fees and so one sort or another, and it will blow over. The other thing we’ve had going for us in the Title business for many years has been the fact that we re-priced and re-reserved that business back in the late ‘80s and benefited from that throughout the 1990s. And of course we’re not getting as much of a benefit from that because now the business has leveled out... leveled off sort to speak and so the experience is leveling off as well from a loss ratio standpoint. Beth Malone – KeyBanc: Okay. Thank you.

Yeah.

Thank you. And we'll take our next question from Kevin Shields from Deephaven. Kevin Shields – Deephaven: Thank you. I had two quick questions. My first question was, what percentage of risk in-force in delinquencies now come from California, Arizona, Nevada, and Florida in aggregate?

Do you have those numbers broken down, Chris or--?

Yeah, I have got the third quarter 10-Q in front of me, if you looked at our primary traditional, primary risk in-force, which is the bulk of our risk in-force, Florida, third quarter '07 was about little less than nine, California was about 3.5 and then the other states don't hit our top ten risk in-force states.

And those are nine theory numbers, but we don't expect those to change significantly.

No, those risk in-force moves are more glacially where as new insurance written can move pretty well quarter-to-quarter. Kevin Shields – Deephaven: And in the delinquency category for those states would they equal or be still under the market share?

Again we've reported for that same period third quarter '07 total delinquents for the top ten states, Florida is in a 5% range, little over 5% and California is about 5%. Kevin Shields – Deephaven: Okay.

Again those are the ones don’t rate in the top ten states. Kevin Shields – Deephaven: My second question real quickly if the GSE conforming loan limits was increased to something like 600,000 and assuming that it was temporary in nature, would you guys participate and follow Fannie and Freddie, it seems to me that temporary nature that’s been proposed would be problematic?

Well, we don't have, I am not exactly sure in this question, we don't a loan limit per se that follows the GSE limits. So, we ensure what we call conforming loans under the GSE limit and we also ensure jumbo loans although it’s a small percentage of the book. An increase in the GSE loan limits will certainly bring more liquidity back into the marketplace and we would support that either temporarily or on a long-term basis. Kevin Shields – Deephaven: Thank you.

Thank you. And we will take a follow-up question from [inaudible] from Raymond James. Unidentified Analyst – Raymond James: Hi, I just have a quick investment question. Looking at the investment section, you have maybe slightly over a billion of munibonds, what percentage of that is insured, and what's the underlying credit qualities?

Yeah, I don't have the answer to your first question, although I have to say that, maybe I can be corrected on this that most of the munibonds that we buy nowadays tend to have some sort of insurance on them from MBIA in particular. As to the quality of the portfolio, that's shown in one of the tables in either on annual review or the fall -- analysts review that’s posted on our website. And that call the mix of securities whether it’d be munis or corporate has not changed dramatically for us for many years. It's still AA average rated portfolio. Unidentified Analyst – Raymond James: Okay, thank you.

Thank you, and we will take our final question from Rob Bobman [ph] at Capital Returns.

Hi, thanks a lot. What's the, I am sorry if I missed it, the average cost on the PMI and magic investments?

We didn't give the cost on each, we gave the cost on both of them combined and that was $473 million I believe I said and that we further indicated that it was about evenly split among the companies, and both companies as I say we have 15% or something shy of that.

Is there any sort of or you… I mean are you sort of effectively at a limit here as far as how much appetite you have and capital you have to buy more any sort of practical constraint that's been a sort of--

On those two companies?

Yeah, on those two.

Well, we are very respectful of the fact that there is a shareholders right plan in place in both companies at the 15% level. And therefore we would be... we would not being inclined to exceed that percentage.

Solely for that reason?

Yes, sir. They would be immediately dilutive to us, and I would say... kind of counterproductive.

Right, right, right.

Again we are happy with the amount of money, I mean $400 million, almost $500 million for us, even though we have got a very good balance sheet and a great investment portfolio, there is still a lot of money. And therefore... we're happy with what we've got there.

Okay. Thanks a lot.

Okay.

Thank you. And that concludes today's question-and-answer session. I would like to turn the conference back over to Mr. Al Zucaro for any additional or closing remarks.

Well, thank you. I don't have any more comments to make. I again appreciate Chris’ input as always in this and certainly appreciate yours inviting... being coming to visit with us on this fourth quarter call as you have in the past. And with that I will say good afternoon to you all.

That concludes today's conference. Thank you for your participation. You may now disconnect.