Released on: January 23, 2008, 9:11 am

Press Release Author: Don Francis

Industry: Financial

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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