ACA Financial Guaranty Corp. named a chief executive officer and a new board of directors as it reorganizes following the global settlement it signed last month with the 29 structured credit counterparties that now control the company.

Raymond J. Brooks Jr. - a former managing director with Alvarez & Marsal - will serve as chief executive officer and join the board of directors, while Willis King - executive chairman of First Protective Insurance Co. and Fidelity Fire and Casualty Insurance Co. - will chair the board, the company announced earlier this week.

ACA entered runoff following the agreement, in which it agreed to pay $209 million and nearly $1 billion in surplus notes to the counterparties to terminate $65 billion worth of exposure. The reorganized company will focus on its existing polices and not write any new business.

ACA has 683 outstanding policies with a par value of $7.008 billion, much of it on municipal debt. Of those policies, 674 with a par value of $6.67 billion relate to public finance.

Maryland insurance commissioner Ralph S. Tyler said last month in an order approving the settlement that ACA has enough assets to meet its outstanding obligations. Holding the surplus notes, the counterparties will share any dividends and any excess assets following the runoff.

"The recent plan approved by the Maryland Insurance Administration provides a long-term solution to ACA's recent challenges," King said in a statement. "As a result of the perseverance of many, ACA is now well-positioned to move forward."

Other new directors include Richard J. Caplan, Roger D. Cunningham, Bradley I. Dietz, Dwight Lacey, Paul D. McFarlane, Andrew Rothseid, and John B. Sprung.

ACA's downfall grew from its exposure to structured products, which it first began to guarantee in 2002. When the assets underlying the structures began to deteriorate, it exposed the insurer to potential claims.

ACA began to tumble last December when Standard & Poor's downgraded it to CCC from A, triggering collateral provisions on many of its structured finance products. Before signing the settlement, ACA had signed six forbearance agreements with counterparties because it did not have the capital required to post the collateral.

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