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In its suits, it admitted it did virtually no due diligence to assess the quality of the loans it was insuring.
MBIA claims that Countrywide Financial, which Bank of America acquired in what may be the worst merger ever, owes it as much as $5 billion for deceiving it about structured finance products it was insuring.
But given the history, it is easy to see why investors are no longer willing to trust an insurer that did not bother to do any real investigation of the risks it was insuring.
Swiss Re said that the value of the client's portfolio, which it was insuring, had fallen to zero.
At the start of 2008, under the old limit, the government estimated that it was insuring about $4.42 trillion dollars at the $100,000 rate and had set aside a $55.2 billion reserve against potential liability.
" You may recall that AIG, thanks to its non-transparent and heavy investments in derivatives, was almost bankrupt once the mortgage-backed securities it was insuring began to drop in value.
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It was insured by Radian Asset Insurance.
It was insured in Great Britain and had American certification.
Fortunately, it was insured but the sense of loss was still immense.
A spokesman for the neighborhood council said it was insured for nearly $800,000.
He said the knowledge that it was insured did not calm him during the "quite traumatic" night it was missing.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com