HBOS Australia has opted to dispense with its captive insurance subsidiary, Western Lenders Mortgage Insurance.PMI Mortgage Insurance bought the 49.9 per cent stake in Western LMI held by Bank of Western Australia, the retail banking subsidiary of HBOSA, in March 2007.PMI helped manage Western LMI for BankWest and reinsured the captive.HBOSA elected to sell its stake back to PMI in light of increased capital requirements.