NU Online News Service, Nov. 22, 3:43 p.m. EST

Although municipal bonds make up 27 percent of the investmentportfolios of property and casualty insurers, even bond losses of$2 billion to $4 billion that could result from extreme stressscenarios are expected to be manageable, Moody's reported.

"In context, even these estimates from an extreme stress testwould be moderate given that we expect investment income of morethan $10 billion per year from the industry's sizable $370 billionmuni-bond portfolio," said Paul Bauer, an analyst for Moody's.

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