Bond insurers could withstand downgrades of reinsurers.

• Position: News Briefs - Brief Article

According to a recent report by Standard & Poor's, the four major bond insurers would be able to pay claims in the event of an economic depression resulting in a one-category downgrade of their reinsurers. The catalyst for the report was the March adjustment of the outlooks for monoline reinsurers to negative from stable. "We're assuring the investor that in a worst-case economic environment, all the bond insurers will be able to meet their claims at a certain level," said David Veno, the author of the study. The report concludes that as long as the reinsurers...