New York Insurance Superintendent Eric Dinallo’s office, while revealing today that troubled bond insurer Financial Guaranty Insurance Corp. has applied to split into two companies, was short on specifics.

The loose outlines of the arrangement, which Mr. Dinallo discussed on CNBC, would see FGIC, the third-biggest bond insurer, divide into two companies with one firm holding FGIC’s more secure municipal bond insurance, and the other acting as a structured finance insurance company holding FGIC’s riskier business involving repackaged mortgages and other debt linked to the subprime market–a so-called good bank/bad bank plan.

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