Days after announcing a three-part strategy to fix the ailing New York bond insurance market, the state’s top regulator said any plan to deal with the issues facing insurers would take time.
“These are complicated issues involving a number of parties and any effective plan will take some time to finalize,” Superintendent Eric R. Dinallo said in a statement e-mailed to the media.
“We believe it is important that the goals of market stability, protection for policyholders and a healthy and competitive bond insurance market be realized in the near future,” Dinallo added.
Earlier in the week, Dinallo said his department would work to strengthen the state’s bond insurance market by actively seeking out more capital investment and additional companies that could write bond insurance – particularly for municipalities.
That plan was announced amid mounting concerns over two key bond insurers – MBIA and Ambac – which have posted significant quarterly losses. Some fear the companies’ financial problems would make them unable to guarantee bonds.
Regulators across the country are paying close attention to what happens with the two firms. Massachusetts Secretary of State William Galvin has demanded information from the firms about risks posed to the companies by securities they hold.
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