Press Release Summary: New York\'s insurance regulator, which last month granted an expedited license for a new bond insurer owned by Warren Buffett\'s Berkshire Hathaway, on Tuesday said he was holding talks with \"other parties about possible future capital investments\" in troubled insurers.
Press Release Body: NEW YORK, Jan 22 (Reuters) - New York\'s insurance regulator, which last month granted an expedited license for a new bond insurer owned by Warren Buffett\'s Berkshire Hathaway, on Tuesday said he was holding talks with \"other parties about possible future capital investments\" in troubled insurers.
New York Insurance Superintendent Eric Dinallo said in a statement that the talks with unnamed parties are part of a three-part strategy to help battered bond insurers raise fresh capital and protect their policy holders in wake of the subprime-mortgage related write-downs.
The list of insurers that might benefit includes Ambac Financial Group (ABK.N: Quote, Profile, Research) and MBIA Inc (MBI.N: Quote, Profile, Research), the top two U.S. bond insurers. Both have faced concern from investors that they might be unable to cover losses on investments they guarantee.
Dinallo, who noted he had gotten Berkshire Hathaway (BRKa.N: Quote, Profile, Research) (BRKb.N: Quote, Profile, Research) to open a new bond insurance arm, said his department was monitoring developments.
The department is also working with insurers, banks, financial advisers, credit agencies, regulators, government officials and other stakeholders to devise ways to \"help stabilize\" the market, he said.
Dinallo said his department also is drafting new regulations for bond insurers that will \"redefine\" their future activities.
Dinallo\'s spokesman said he could not comment beyond the statement. On Friday, Dinallo had said he would be willing to help broker cash infusions or deals to keep bond insurers afloat.
Ambac on Tuesday announced a quarterly loss of $3.3 billion after recording massive credit derivative write-downs, but its shares surged after Ambac said it could be close to raising much-needed capital.
Fitch Ratings on Friday cut its rating on Ambac\'s insurance arm to \"AA\" from \"AAA.\" Financial analysts have repeatedly said it would be hard for any insurer to gain new business unless it has the top rating of \"AAA.\"
Standard & Poor\'s Ratings Service and Moody\'s Investors Service have both warned they also might cut Ambac from \"AAA.\"
MBIA could also lose its \"AAA\" rating from Moody\'s Investors Service and Standard & Poor\'s Ratings Service.
Moody\'s, for example, has said it is concerned about \"the potential volatility in ultimate performance of mortgage and mortgage-related credit default obligation risks, and the corresponding implications for MBIA\'s risk-adjusted capital adequacy.\"
The insurer, which has raised new capital, plans to release its fourth-quarter results on Jan. 30 and hold a conference call on the results on Jan. 31. (Reporting by Joan Gralla; Editing by Leslie Adler)
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