Security Capital Assurance, parent of the monoline bond insurer XL Capital Assurance Inc., late Thursday said it will temporarily cease writing new business after rapid deterioration in the subprime mortgage market led the company to report a fourth-quarter loss of $1.2 billion.

The company reported fourth-quarter case loss provisions of $651.5 million for 13 collateralized debt obligations made up of asset-backed securities, as well as unrealized mark-to-market losses of $518.8 million on credit derivative contracts used to provide financial guarantees to various counterparties. For the year, SCA reported a net loss of $1.2 billion.

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