The New York State Insurance Department expedited the licensing of a new bond insurer owned and operated by Warren Buffetts Berkshire Hathaway, anticipating that it will be completed by today or Monday. The license will have been processed and approved in a month, much quicker than the usual three to nine months, insurance regulators said.
The approval comes amid turmoil for other bond insurers whose credit ratings are being closely watched or downgraded by rating agencies because of their exposure to the embattled credit markets.
Under the license, the company, to be called Berkshire Hathaway Assurance Corp., will be licensed to write financial guaranty insurance policies for municipal bonds, including bonds issued by not-for-profit hospitals.
Having new entrants in the market to provide municipalities with options to enhance the credit of new bonds or to potentially provide enhanced credit for outstanding downgraded bonds is a very positive development. That is why the department expedited the licensing of Berkshire Hathaway Assurance, said Superintendent of Insurance Eric Dinallo in a written statement. We have been very supportive of capital raising efforts by the existing financial guarantors and have been working to facilitate any regulatory approvals needed. In that same vein, we will work with new entrants to ensure a vibrant competitive market. -- by Cinda Becker