A group of 13 finance executives are organizing what they hope will be the municipal bond industry's fourth major player in the reinsurance field.
The executives have dubbed their creation MuniRe, or the Municipal Insurers Reserve Corp., according to a legal notice they published last week in The Journal of Commerce.
The notice, which New York State law requires of any group attempting to form an insurance company, says the company will be licensed and domiciled in New York State, with principal offices in New York City.
Several of the players involved with the new reinsurer are former employees of the College Construction Loan Insurance Association, or Connie Lee, which has seen numerous personnel and management changes over the past year. The firm, which was founded in 1986 as an education bond reinsurer, became active in the primary market late last year.
Former Connie Lee executives now embarking on another reinsurance venture include Eugenia T. Burzynski, of Washington, D. C., and Lawrence L. Singer, formerly the director of public finance for New Jersey and currently a vice president at Fairmount Capital Advisors in Philadelphia.
Other players include Michael H. Lobb, a co-founder of Financial Guaranty Insurance Co. in 1983, and Thomas E. Oechsler, who has previously acted as legal counsel for FGIC, Connie Lee, and Bond Investors Guaranty.
Patricia A. Doyle, formerly the executive director of the Massachusetts Health and Education Facilities Authority, is also part of the effort.
The legal notice lists Harry P. Haderis, David A. Kirschenbaum, Charles Pryles, Anne Ciliberti, Dean H. Reiter, James J. Ferry, Norene Streicher, and N. Matthew Streicher as the other principals.
MuniRe intends to reinsure "fidelity and surety, credit, residual value, and financial guaranty insurance risks," according to the notice, which was apparently published only in The Journal of Commerce.
The company has $2.5 million of initial paid-in-capital and total policyholders' surplus of about $75 million.
If successful, MuniRe will join Capital Reinsurance Co., Enhance Reinsurance Co., and Connie Lee as the municipal bond industry's only reinsurers.
Capital Re and Enhance are the major players in the market, with Connie Lee focusing predominantly on education issues.
Primary insurers in the municipal market rely on relationships with reinsurers to cede certain business. The practice allows insurers to write more business for issuers in which capacity would otherwise be too constrained to allow additional coverage from the same company.
Speculation of a new monoline insurer has made the rounds in the market for several months. Some market sources have predicted that a separate effort, involving a consortium of international reinsurers focusing on asset-backed transactions, may take share soon as well.