Dianne Sales of John Hancock Advisers

Dianne Sales, portfolio manager at John Hancock Advisers Inc. in Boston, said she would never say never, but she doubts that the amount of insured paper in the market would soon decrease, and she hasn't changed her portfolio to prepare for such a possibility.

"Since when has anyone ever given up good business they already have?" she asked.

Although Sales thinks insurance companies might change their prices and get pickier about whom they work with, she said they still have a strong interest in keeping issuers happy enough to continue doing business with them.

"The majority of insured product won't be overseas," she said. "It'd take a lot of tremendous growth in the overseas market for it to get to the point where they're saying, 'Sorry, we're not interested in insuring domestic products.' "

Insurance companies might like to diversify by exploring riskier, more profitable markets abroad, but they'll still want to keep some safe triple-A municipal ratings, according to Sales.

"They might direct more capital overseas," she said. "But there would still be capacity."

Sales added that if insurers became pickier about whom they did business with, it could cause a more rational basis for credit spreads than currently exists.