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FGIC

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Federal Guarantee Insurance Corporation
A private company providing financial guarantee insurance for different types of transactions. For example, an insurance policy may cover a lender from liability resulting from the failure of the borrower to repay the loan. The FGIC originally provided this insurance exclusively for municipal bonds, but expanded into different transactions, such as IPOs. Clients pay the FGIC the appropriate premium in exchange for a guarantee of repayment in case of default; this increases the bond's credit rating and, usually, decreases its interest rate. The services that the FGIC provides are similar to sureties or co-signed loans.

Financial Guaranty Insurance Corporation
A private company providing financial guarantee insurance for different types of transactions. For example, an insurance policy may cover a lender from liability resulting from the failure of the borrower to repay the loan. FGIC originally provided this insurance exclusively for municipal bonds, but expanded into different transactions such as IPOs. Clients pay FGIC the appropriate premium in exchange for a guarantee of repayment in case of default; this increases the bond's credit rating and usually decreases its interest rate. The services FGIC provides are similar to sureties or co-signed loans.

FGIC


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At the beginning of October, FGIC arranged to sell the bulk of its $200 billion portfolio of guarantees to rival MBIA after months of turmoil in which the company took losses on insurance it had provided for financial products exposed to bad mortgage debt.
A successful capital plan for FGIC would represent the latest effort to shore up a weakened insurance business and avoid a wave of downgrades that could result in billions of dollars in losses, people familiar with the situation reportedly said.
Accordingly, FGIC will immediately suspend all claims payments.
 
 
 
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