Mortgage insurance companies are rejecting or reducing claims from lenders in more than 10 per cent of cases, a survey of the specialist insurance sector by Standard & Poor's has disclosed.S&P did not provide any comparative data on this trend, but noted that these "denials and adjustments" were confined to loans financed through securitisation pools with high loan-to-valuation ratios and were "generally substantiated by incidences of fraud".The credit ratings agency also noted that rejection of claims was "a legitimate industry practice".S&P painted a positive picture of the LMI sector in its review, an analysis likely to find more readers as the initial public offer of Genworth Australia nears."Margins should remain stable over the near to medium term," S&P wrote, noting that Genworth and QBE LMI account for more than 72 per cent of the market based on risk in force. This percentage would be much higher based on new business levels, though S&P did not offer an estimate of this market share.S&P said it expected an increase in the number of lenders' mortgage insurance firms, given that MGIC Australia and The Mortgage Insurance Company continue to seek buyers for their licences (these businesses are in run-off).On the other hand, these businesses have been on the market for two years or more.