Joseph Brown has returned to take over as chief executive officer and chairman at MBIA Inc., following the resignation of former CEO Gary Dunton. The change in leadership is effective immediately, the bond insurer said Tuesday.
Brown returns to MBIA, the parent of financial guarantor MBIA Insurance Corp., where he served as chief executive officer and chairman from 1999 through May 2004.
He takes over at a time when the triple-A rating of MBIA Insurance is in jeopardy, and when market support for the monoline insurance companies is at a historic low. Brown said in a letter to shareholders that MBIA faces “the most serious challenges in its 34-year history.”
Brown said in the letter that he has spoken to New York State Insurance Superintendent Eric Dinallo seeking to find an acceptable solution to the insurer’s woes. Brown was asked to come back by the board of directors at MBIA.
“My objectives in the days, weeks, months, and years ahead are very simple,” Brown said in the letter. “Deal with the current turmoil and position MBIA to sell triple-A financial guarantee insurance and pay claims — albeit at a lower rate — for at least another 34 years.”
MBIA’s announcement comes after a weekend that saw further developments among its bond insurance peers. Reports surfaced that Ambac Financial Group Inc., parent of Ambac Assurance Corp., will look to split itself into two companies or subsidaries. The Wall Street Journal reported this morning that Ambac may also look to sell $2 billion in discounted shares to existing investors.
An Ambac spokesperson did not return calls seeking comment.