In what New York's superintendent is calling a precedent-setting agreement, the insurance department has approved a $2 billion infusion of cash to XL Capital Assurance (XLCA) Inc.. ensuring the bond insurer's solvency.
"It's a good agreement for everyone--for the Main Street municipal bond holders, for Wall Street policy or CDS [credit default swap] holders, for the bond insurance industry," said Insurance Superintendent Eric Dinallo.
During a telephone news conference, Mr. Dinallo said Security Capital Assurance Ltd., the parent company of XL Capital Assurance, has gone from being close to insolvent, to a solvent company with more than $1 billion in surplus.
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