Mark H.S. Cohen is leaving Fitch Investors Service to join Financial Guaranty Insurance Co. as managing director of strategic planning and business development, the bond insurer said Friday.

The move surprised many industry observers, coming as it did less than five months after Cohen, an executive vice president and a member of Fitch's executive committee, was given additional duties as head of public finance.

"It will be very difficult to leave Fitch, but it's a unique opportunity," Cohen said. "A diversification effort is always an attractive thing and I'm thrilled to be part of that initiative" at FGIC. Bond insurance is "a highly competitive environment," he said, "and I think that a company like FGIC that can develop new products and services to serve their clients will be the ones to prosper."

With bond insurers approaching the saturation point in the tax-exempt market, the industry has become increasingly focused on expanding into other businesses, like swaps and cash management services.

Citing his "extensive experience as an analyst and participant of our industry," Ann C. Stern, FGIC's president and chief executive officer, said Cohen's "abilities will truly be an asset for us as FGIC moves forward in its efforts to develop new products and services."

Cohen's position is newly created and marks the first time FGIC will have an executive focused solely on expansion possibilities, a spokeswoman for the firm said.

Richard A. Price, managing director of FGIC Capital Markets Service Group, was involved in developing new business opportunities in his former role as managing director of marketing and corporate development, but that was not his prime responsibility, the spokeswoman said.

FGIC Capital Markets Services, a subsidiary of FGIC's ultimate parent, GE Capital Co., provides short-term liquidity, municipal reinvestment products, and municipal cash management.

In addition to looking for expansion opportunities, Cohen will serve as a member of FGIC's "leadership team," which develops the firm's long-term strategy. In a sense, Cohen is returning to his roots.

He joined Fitch as head of the financial guaranty group in 1990, moving from Bond Investors Guaranty Insurance Co., an insurance firm he helped found in 1984. Cohen was chief financial officer and treasurer at BIG when the firm was acquired by MBIA Inc. in 1990. At Fitch, he was promoted to executive managing director in October 1992 and was named execulive vice president and head of market management in 1993.

Upon Cohen's departure, slated for later this month, Fitch president Stephen Joynt will work with the department heads to manage the public finance group until a replacement is named, a spokesman for the rating agency said.

As head of the financial guaranty group, Cohen, along with senior vice president David Litvack and vice president Brady Tournillon helped elevate Fitch from a second-tier player to one Of the most visible overseers of the bond insurance industry. Fitch has rated FGIC's claimspaying ability AAA since 1991 and assigned the same rating to AMBAC Indemnity Corp.'s claims paying ability last May.

In addition, the rating agency issued a series of reports on the industry in the last three and a half years that examined a variety of often controversial issues and highlighted challenges facing bond insurers.

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