Moody's Investors Service plans to announce a 5% capital charge against bond insurers' guaranteed investment contracts, a level significantly higher than company executives had counted on when they began writing such business two years ago.

The rating agency has not made any official announcement, but insurance executives privately confirmed that they have received notice from Moody's that the charge will be 5%. The rating agency had never officially stated its criterion, but the industry had been writing the contracts, known as muni GICs, under the assumption that Moody's charge was 1%, market sources said.

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