A Denver-based consulting firm is floating a plan to create a mutual bond insurance company, a modified version of a plan created by the National League of Cities that would be in lieu of the federal reinsurance program proposed by House Financial Services Committee members.

Under the plan, HRF Associates LLC would either create a new company or more likely team up with an existing "shell" insurance company, and request $25 billion of interest-free federal seed money from the Troubled Asset Relief Program. The TARP money would be used to finance the purchase of Treasury securities that in turn would serve as the proposed mutual insurers' initial capital cushion.

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