FGIC freezes new insurance, plans to split off municipal business

By Laura Lutz

Des Moines, March 17 - FGIC Corp., the parent company of Financial Guaranty Insurance Co., announced a moratorium on new insurance and a restructuring proposal in response to its recent losses.

The company said it is not writing any new insurance for a period of time in order to preserve capital.

As part of the restructuring, FGIC plans to split off its global public finance and infrastructure obligations into a new financial guaranty insurer to be based in New York.

The new company would also write new business in the municipal market.

FGIC said that such a restructuring would require significant capital and regulatory approval.

The New York-based company said it had net losses of $1.89 billion for the quarter ended Dec. 31 and $1.82 billion for the year ended Dec. 31.

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