Financial Guaranty Insurance Co. has stopped writing new financial guaranty business in an effort to preserve capital, joining XL Capital Assurance Inc.

FGIC, the third-largest bond insurer before the recent turmoil and credit downgrades, late Monday reported fourth-quarter and year-end financial results. The bond insurer announced a net loss of $1.89 billion for the fourth quarter, and $1.82 billion for the year-end. The losses reveal mark-to-market valuations on credit derivatives used to insure collateralized debt obligations and additional capital set aside to cover potential losses on CDOs backed by subprime and second-lien residential mortgages.

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