MBIA Inc. provides financial guarantee insurance to the United States’ public finance markets through its indirect, wholly-owned subsidiary, National Public Finance Guarantee Corporation (National). National’s financial guarantee insurance policy provides investors with unconditional and irrevocable guarantees of the payment of the principal, interest or other amounts owing on insured obligations when due. The company also provides financial guarantee insurance in the international and structured finance markets. MBIA Insurance Corporation (MBIA Corp.) owns MBIA UK Insurance Limited (MBIA UK) and MBIA Mexico S.A. de C.V. (MBIA Mexico), and together, the three companies manage the company’s legacy global structured finance and non-U.S. public finance financial guarantee insurance portfolios. MBIA UK is a financial guarantee insurance company located in the United Kingdom, which wrote structured and public finance debt obligations in selected international markets. MBIA Mexico is a financial guarantee insurance company located in Mexico, which wrote a limited number of structured finance policies in Mexico. The company also owns MBIA Services Corporation (MBIA Services), a service company, which provides support services, such as surveillance, risk management, legal, accounting, treasury and information technology, among others, to the company’s businesses on a fee-for-service basis. Insurance Operations The company’s U.S. public finance insurance business is conducted through National, and the company’s international and structured finance insurance portfolios are managed through MBIA Corp. The company is compensated for its insurance policies by insurance premiums paid upfront or on an installment basis. The company’s financial guarantee insurance is offered in both the new issue and secondary markets. Transactions in the new issue market might be sold either through negotiated offerings or competitive bidding. The company also issues insurance policies to guarantee the payment of principal and interest on municipal obligations being traded in the secondary market upon the request of a broker or an existing holder of uninsured bonds, where the premium is generally paid by the owner of the obligation. In addition, the company has provided financial guarantees or sureties to debt service reserve funds. The primary risk in the company’s insurance operations is that of adverse credit performance in the insured portfolio. The company’s payment obligations after a default vary by deal and by insurance type. The company’s public finance insurance generally insures scheduled interest and principal. With respect to the insurance of credit default swap (CDS) contracts written in the international and structured finance insurance segment, in certain circumstances, including the occurrence of certain insolvency or payment defaults under the CDS contracts, the CDS contracts might be subject to termination by the counterparty, triggering a claim for the fair value of the contract. National Insured Portfolio National’s insured portfolio consists of municipal bonds, including tax-exempt and taxable indebtedness of the U.S. political subdivisions and territories, as well as utilities, airports, health care institutions, higher educational facilities, student loan issuers, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. Municipal bonds and privately issued bonds used for the financing of public purpose projects are generally supported by taxes, assessments, user fees or tariffs related to the use of these projects, lease payments or other similar types of revenue streams. National’s portfolio primarily includes MBIA Corp.’s U.S. public finance financial guarantee policies ceded by MBIA Corp. to National pursuant to the quota share reinsurance agreement, effective January 1, 2009, executed in connection with Transformation; and certain public finance financial guarantee policies of Financial Guaranty Insurance Company (FGIC), which were originally reinsured by MBIA Corp. pursuant to the FGIC reinsuranc
mbia inc (MBI:New York)
1 Manhattanville Road
Purchase, NY 10577
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