While all proposed dividends and distributions to shareholders must be filed with the Pennsylvania Insurance Department  prior to payment, if a Pennsylvania domiciled insurer had positive unassigned surplus as of the end of the prior fiscal year , then  without the prior approval of the Pennsylvania Insurance Commissioner , such insurer could only pay dividends or other  distributions during any 12-month period in an aggregate amount less than or equal to the greater of: (i) 10% of the preceding  year-end statutory policyholders’ surplus; or (ii) the preceding year’s statutory net income. Neither Radian Guaranty , Radian  Insurance, RMAI nor Radian Mortgage Insurance paid any dividends in  2012. Radian Asset Assurance . Under New York insurance laws, Radian Asset Assurance may only pay dividends from  statutory earned surplus. While all proposed dividends and distributions to shareholders must be filed with the NYSDFS prior  to payment, Radian Asset Assurance may pay “ordinary dividends” without prior approval of the NYSDFS when the total of all  other dividends declared or distributed by it during the preceding 12 months, is the lesser of 10% of its statutory surplus to  policyholders, as shown on its last statement on file with the NYSDFS, or 100% of statutory adjusted net investment income. In  the third quarter of 2012, Radian Asset Assurance paid an ordinary dividend of  $54.0 million to Radian Guaranty. We expect  that Radian Asset Assurance will next have the capacity to pay an ordinary dividend, of approximately $35 million, to Radian  Guaranty in the third quarter of  2013. CMAC of Texas . Under Texas insurance laws, dividends and other distributions to shareholders may only be paid out of  an insurer’s surplus profits arising from its insurance business.  While all proposed dividends and distributions to shareholders  must be filed with the Texas Insurance Department prior to payment, the approval of the  Texas Insurance Department is  required for any proposed dividends or distributions within any 12-month period that exceed the greater of: (i) 10% of  policyholder surplus as of the immediately prior December 31; or (ii) the insurer ’s net income as stated in its immediately prior  annual statutory statement. No dividends were paid by CMAC of  Texas in 2012 and we do not expect CMAC of Texas to pay  any dividends in 2013. Under state insurance regulations, Radian Guaranty is required to maintain minimum surplus levels and, in  certain  states, a minimum amount of statutory capital relative to the level of net RIF , or “risk-to-capital.”Sixteen states (the “RBC  States”) currently impose a statutory or regulatory risk-based capital requirement ( the “Statutory RBC Requirement”). The most  common Statutory RBC Requirement is that a mortgage insurer ’s risk-to-capital ratio not exceed 25 to 1. In some of the RBC  States, the Statutory RBC Requirement is that Radian Guaranty must maintain a minimum policyholder position, which is  based on both risk and surplus levels (the “MPP Requirement”). Unless an RBC State grants a waiver or other form of relief, if  a mortgage insurer is not in compliance with the Statutory RBC Requirement of such RBC State, it may be prohibited from  writing new mortgage insurance business in that state.Radian Guaranty’s domiciliary state, Pennsylvania, is not one of the  RBC States. In 2012 and 2011, the RBC States accounted for approximately 54.3% and 50.5%, respectively , of Radian  Guaranty’s total primary NIW.   As of December 31, 2012, Radian Guaranty’ s risk-to-capital ratio was to 20.8 to 1. We intend to maintain Radian  Guaranty’s risk-to-capital below 25 to 1 throughout 2013, including if necessary , by making contributions to Radian Guaranty  from Radian Group’s remaining available liquidity. Based on our current projections, in the absence of these contributions or  other risk-to-capital support, we anticipate that Radian Guaranty will exceed the 25 to 1 risk-to-capital ratio requirement during  2013. As of December 31, 2012, Radian Guaranty was operating under waivers in two RBC States with MPP  Requirements for  which Radian Guaranty’s minimum policyholder position was below the applicable requirements. Each of these RBC States  has issued to Radian Guaranty a waiver of its MPP  requirement that allows Radian Guaranty to continue writing new business  in these states regardless of whether the MPP  Requirement has been met. One of these waivers has no specified expiration date  and the other expires on December 31, 2013.  3.  Risk-to-Capital 45