Citing differences of opinion over the direction bond insurers should be taking, MBIA Inc. said it has withdrawn from membership in the Association of Financial Guaranty Insurers (AFGI).
“It has become clear that MBIA and the other members of AFGI no longer share a common vision for the industry,” Jay Brown, chairman and chief executive officer of the Armonk, N.Y.-based carrier, said in a statement.
“For one thing, we believe that the industry must over time separate its business of insuring municipal bonds from the often riskier business of guaranteeing other types of securities, such as those linked to mortgages,” he noted. “Additionally, we disagree with AFGI's positions on the appropriateness of monoline financial guarantors insuring credit default swaps and the ability of U.S. financial guarantors to reinsure U.S. domestic financial guarantee insurance transactions with foreign affiliates without paying U.S. corporate tax rates.”
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