MBIA, the worldâ€™s largest bond insurer, said Thursday that it was withdrawing from the Association of Financial Guaranty Insurers, citing disagreement on the future direction of the bond insurance industry.
MBIA, based in Armonk, N.Y., has been struggling to preserve the triple-A credit ratings it needs to keep winning new business, as losses mount from its coverage of debt tied to subprime mortgages.
Joseph W. Brown, who replaced the ousted Gary C. Dunton this week as MBIAâ€™s chief executive, said the industry must split up its business of insuring municipal bonds from the often riskier business of guaranteeing other securities, including those linked to mortgages.
He also said MBIA disagreed with the trade groupâ€™s positions on whether monoline insurance guarantors should cover credit default swaps and reinsure various United States financial guarantee insurance transactions with foreign affiliates without paying American corporate tax rates.
MBIA said it had been affiliated with A.F.G.I. since the trade group was formed in 1986.