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MBIA, Swiss Re come under scruitiny

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New York Attorney General Elliott Spitzer has turned his sights on the financial insurance business, as Swiss RE and MBIA were issued subpoenas from both the Attorney General’s office as well as the Securities and Exchange Commission. Specifically, the SEC and Attorney General inquired about “nontraditional or loss mitigation insurance products developed, offered, or sold by MBIA to third parties from January 1, 1998 to the present,” according to a release. Fitch Ratings speculated in a report issued following the announcement that the inquiries were due to finite risk reinsurance, used for deferring losses into future periods for earnings management purposes.

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