MBIA breaks ties with trade association

MBIA Inc. has pulled away from the Association of Financial Guaranty Insurers. The Armonk, N.Y.-based bond insurer said that it no longer shared the trade association’s view on the direction the bond insurance industry should take going forward. Jay Brown, newly appointed chairman and chief executive of MBIA, said in a statement that the insurer disagreed with the Albany, N.Y. lobbying group’s positions on the appropriateness of monoline financial guarantors insuring credit default swaps and guarantors’ ability to reinsure U.S. domestic financial guarantee insurance transactions with foreign affiliates without paying U.S. corporate tax rates. “It has become clear that MBIA and the other members of AFGI no longer share a common vision for the industry,” he said. Sean McCarthy, chair of AFGI, responded to MBIA’s departure in a statement: “AFGI has not taken a position on member firm’s organizational structures, lines of business or execution formats, such as credit default swaps or policy forms.” MBIA has been associated with AFGI since the group’s formation in 1986.