WASHINGTON — The Treasury Department’s Federal Insurance office is seeking input from the industry and public for a report it must write and submit to Congress early next year on how to modernize and improve the regulatory system for insurance companies, including monoline bond insurers.
The office published a Federal Register notice on Monday asking industry groups and members of the public and others to submit comments by Dec. 16 on a range of issues, including the feasibility and cost of regulating certain lines of insurance at the federal level.
The office also is asking about the level of systemic risk with regard to insurance and the degree to which there is national uniformity among state insurance regulators or gaps in state regulation.
The report is expected to contain, not only findings, but also legislative and administrative recommendations for how to address various issues.
Prior to 2008, there were at least eight monoline bond insurers and more than 50% of all new muni bond issues were wrapped with insurance.
But the insurers were hard hit in the financial crisis and most of them barely exist now.
Assured Guaranty is the only insurer with a high investment-grade rating that is still actively writing policies for munis. It is rated AA-plus by Standard and Poor’s and its credit rating is set to be updated at the end of November.
Last month Radian Group and its financial guaranty subsidiary, Radian Asset Assurance, announced it has partnered with the National League of Cities to explore the formation of what would be the first-ever public finance mutual bond insurance company.