Businessweek

MBIA Inc. provides financial guarantee insurance, as well as related reinsurance, advisory, and portfolio services for the public and structured finance markets; and asset management advisory services in the United States and internationally. FINANCIAL GUARANTEE BUSINESS The company’s financial guarantee insurance provides investors with an unconditional and irrevocable guarantee of the payment of the principal, interest or other amounts owing on insured obligations when due or, in the event that the company has the right at its discretion to accelerate insured obligations upon default or otherwise, upon its election to accelerate. The company conducts its financial guarantee business, as well as related reinsurance, advisory and portfolio services, through its wholly-owned subsidiaries National Public Finance Guarantee Corporation (National), its United States (U.S.) public finance only financial guarantee company, and MBIA Insurance Corporation (MBIA Corp.), which together with its subsidiaries writes global structured finance and non-U.S. public finance financial guarantee insurance. Related advisory and portfolio services are provided by Optinuity Alliance Resources Corporation (Optinuity), a service company, which provides support services, such as surveillance, risk management, legal, accounting, treasury, and information technology to its businesses on a fee basis. MBIA Corp. also owns MBIA UK Insurance Limited (MBIA UK), a financial guarantee insurance company that is regulated and supervised by the Financial Services Authority (FSA) in the United Kingdom and is authorized to carry out insurance business in the United Kingdom and in the European Economic Area on a cross border services basis. MBIA UK’s principal line of business is the guarantee of both structured finance and public finance debt obligations in selected international markets. In addition, MBIA Corp. writes financial guarantee insurance in Mexico through MBIA Mexico, S.A. de C.V. (MBIA Mexico). Insurance Operations The company’s U.S. public finance insurance business is conducted through National, and its structured finance and international insurance operations are conducted through MBIA Corp. and its subsidiaries. National Insured Portfolio: Through its reinsurance of U.S. public finance financial guarantees from MBIA Corp. and FGIC, National’s insurance portfolio consists of municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, student loan issuers, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. As of December 31, 2011, National had 21,272 policies and diversified among 9,199 credits. MBIA Corp. Insured Portfolio: MBIA Corp. has insured and reinsured structured finance and international financial obligations which are sold in the new issue and secondary markets, including structured finance and asset-backed obligations, including obligations collateralized by various pools of loans or secured by or payable from a specific pool of assets having an identified future cash flow, including pools of bonds or other debt obligations; payments due under credit and other derivatives, including termination payments that may become due upon the occurrence of certain events, as further described below; privately issued bonds used for the financing of public purpose projects or entities located outside of the U.S. and that include toll roads, bridges, airports, public transportation facilities, utilities, hospitals, military housing, and other types of infrastructure projects serving a substantial public purpose; and obligations of sovereign-related and sub-sovereign issuers, which includes regions, departments or their equivalent in each jurisdiction, as well as sovereign owned entities that are supported by a sovereign state, region or department. As of December 31, 2011, MBIA Corp. had 1,047 policies outstanding in its insured portfolio. In addition, MBIA Corp. had 233 insurance policies outstandi