New York State
Eric R. Dinallo Superintendent of Insurance 25 Beaver Street New York, N.Y. 10004
|ISSUED 01/22/2008||FOR IMMEDIATE RELEASE|
NEW YORK INSURANCE DEPARTMENT IMPLEMENTING THREE-POINT PLAN ON BOND INSURANCE
New York State Insurance Superintendent Eric Dinallo issued the following statement today about the bond insurance companies and current market conditions in response to many inquiries:
“The New York State Insurance Department is continuing to actively monitor the major bond insurance companies and to work with those companies and others to help stabilize the market, continue protecting policyholders, assist in the continued availability of bond insurance and seek private sector solutions.
“A key role of the regulator is to be a facilitator to help speed transactions. We are in constant dialogue with the bond insurers and regularly gather information from them. In particular, we are closely monitoring and discussing with the companies and their financial advisors their efforts to explore alternatives. We are also conferring daily with federal regulators, the National Association of Insurance Commissioners and other state insurance regulators.
“The Department has implemented a three-part plan:
1. Attract more capital and increase capacity to protect policyholders and ensure continued availability of bond insurance, especially for municipal issuers. Specifically, the Department successfully invited Berkshire Hathaway to open a new bond insurance company in New York and quickly approved the capital-raising plan for MBIA. The Department is currently in discussions with other parties about possible future capital investments.
2. Facilitate solutions to current market challenges. The Department is engaged with insurers, banks, financial advisors, credit rating agencies, other regulators and government officials, and other stakeholders in examining and developing measures to help stabilize the market.
3. Develop stronger regulation for bond insurance. Since it is clearly time to develop new rules for the road, the Department is drafting new regulations that would redefine the future activities of bond insurers. The Department welcomes any input on this project.
“As a regulator, our primary responsibility is to protect policyholders and safeguard the solvency of insurance companies so they can pay any claims. Additionally, we work to ensure that consumers, businesses and governments have access to the insurance products they need from a healthy, competitive market. Our activities in the bond insurance market are aimed at achieving those goals. As we demonstrated with the invitation to Berkshire Hathaway, the Department has a proactive approach to dealing with market problems, and we will continue to implement measures we believe are appropriate in response to the current issues facing the bond insurance market.”
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