The events of the last few years, particularly those in the global financial crisis that began in 2007, indicate that mortgage insurance (MI)1 is subject to significant stress in the worst tail events. This report examines the interaction of mortgage insurers with mortgage originators and underwriters and makes a set of recommendations directed at policymakers and supervisors which aim at reducing the likelihood of MI stress and failure in such tail events. MI provides additional housing finance flexibility for lenders and consumers by expanding the “underwriting envelope” usually along the loan-to-value (LTV4) dimension (Blood, 2001). Even though MI is available in many countries, it is currently used extensively in only a few: Australia, Canada, France, Hong Kong, the Netherlands, and the United States. In a number of countries, MI is either mandatory for high LTV loans, incentivized by capital requirement relief on the underlying mortgages, or the government participates in its provision.