NEW YORK, Jan 27 (Reuters) - New York legislators have set a hearing for mid-February on the relationship between financial companies and bond insurers, and whether the insurers may have been defrauded by banks selling structured financial products.
An aide to Joseph Morelle, chairman of the state Assembly's insurance committee, said on Thursday the hearing would be held in New York City on Feb. 16.
The hearing is to investigate whether any of the insurers were deceived about the quality of the bonds they were insuring. The voluntary invitation list has not been finalized, so it was not clear who would participate, Morelle said.
The bond insurance industry, which once stuck solely to underwriting debt sales by local governments, was decimated by exposure to mortgage-backed securities and other structured products during the financial crisis.
Many insurers ended up in rehabilitation or bankruptcy, and the few left operating have diminished credit ratings and are writing relatively little business.
The two largest bond insurers still operating and seeking new municipal bond business are MBIA Inc and Assured Guaranty Ltd.
(Reporting by Ben Berkowitz) Keywords: INSURANCE/BONDS (ben.berkowitz@thomsonreuters.com; +1-646-223-6132; Reuters Messaging: ben.berkowitz.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
An aide to Joseph Morelle, chairman of the state Assembly's insurance committee, said on Thursday the hearing would be held in New York City on Feb. 16.
The hearing is to investigate whether any of the insurers were deceived about the quality of the bonds they were insuring. The voluntary invitation list has not been finalized, so it was not clear who would participate, Morelle said.
The bond insurance industry, which once stuck solely to underwriting debt sales by local governments, was decimated by exposure to mortgage-backed securities and other structured products during the financial crisis.
Many insurers ended up in rehabilitation or bankruptcy, and the few left operating have diminished credit ratings and are writing relatively little business.
The two largest bond insurers still operating and seeking new municipal bond business are MBIA Inc and Assured Guaranty Ltd.
(Reporting by Ben Berkowitz) Keywords: INSURANCE/BONDS (ben.berkowitz@thomsonreuters.com; +1-646-223-6132; Reuters Messaging: ben.berkowitz.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.