FGIC to be Split into Two

FGIC is expected file an application with the New York State Insurance Department to separate into two companies, dividing up its municipal bond business and structured finance business. While FGIC has not submitted any details on the suggested plan, the insurance department is expecting a formal application soon, according to published reports. Congress has been concerned that a municipality downgrade would make it more expensive for cities and states to borrow money and is encouraging FGIC to file for a separation, reports said.