The municipal bond insurance industry has continued its steady march through 1992, with all six major players chalking up big profits for the first nine months.

Profits for the industry as a whole surged 21.4%, to $400.1 million from $329.5 million during the first three quarters of 1991.

Municipal Bond Investors Assurance Corp. took the biggest slice of the pie, with $139.8 million in net income during the period. That compares with $104.4 million during the first nine months of last year, or a jump of 33.9%.

On a statutory basis, the company's net income rose 27.6%, to $135.1 million from $105.9 million.

"MBIA's third-quarter results continue to demonstrate our inherent earnings growth characteristics and also reflect favorable market conditions for municipal bond insurance," said David H. Elliott, the company's president and chief executive officer.

Elliott said MBIA "the emerging national consensus on the importance of long-term investment in our company's infrastructure" to boost the company's future growth prospects.

The MBIA official also said strong premium writings, which jumped nearly 43% during the first nine months, have increased the firm's unearned premium reserve and investment portfolio. The will "contribute to additional earnings for years to come," he said.

But several industry executives and outside analysts have warned against expecting this year's record earnings to continue much longer.

A large portion of the growth comes from refundings prompted by this year's exceptionally low interest rates. Refundings allow insurers to immediately book unearned premiums on the underlying insured issue, causing short-term earnings spikes. But it also means those premiums will not be around in future years to contribute to bottom lines.

Of the $56.9 billion in insured municipal volume through the first three quarters, 66% was for refundings, Securities Data Co. said.

Ann C. Stern, president and chief executive officer of Financial Guaranty Insurance Co., said that "as refunding volume declines in 1993, we do not expect earnings will experience the remarkable growth seen this year."

But Stern said FGIC is prepared for the market change. "The company's mature and profitable book of business, along with current period premiums written, will contribute to solid earnings and to the growth of its long-term capital strength," she said.

FGIC logged the second biggest profit for the January-through-September period, with $100.3 million in net income. That was a 15.4% increase over last year's $86.9 million. On a statutory basis, the firm's net income rose 35.1%, to $89 million from $65.9 million.

AMBAC Indemnity Corp.'s $95.8 million net income was good for a third-place slot in the profit rankings for the first nine months and represented an 11.9% increase over last year's results during the same period. Statutory net income rose 30.6% to $98.1 million from $75.1 million.

Phillip B. Lassiter, AMBAC's chairman and chief executive officer, called the results a "positive sign" as the insurer begins its second year as a publicly held company.

Financial Security Assurance had the third biggest profit gain for the industry, with net income rising 22.4%, to $49.8 million from $40.7 million during the first three quarters of 1991.

On a statutory basis, FSA's profit leapt 49.3%, to $43 million from $28.8 million. The increase came despite a $13 million loss reserve FSA was forced to take on commercial real estate transactions earlier this year.

Robert P. Cochran, president and chief executive officer of FSA, said quarter-to-quarter changes in net income are not considered particularly significant. However, he said the company is pleased with its results.

"Our municipal business now constitutes 42% of our insured portfolio and that is the balance the we have wanted to achieve," Cochran said.

Capital Guaranty Insurance Co. saw net income rise 9.8% during the first nine months, to $10.1 million from $9.2 million. On a statutory basis, however, the firm saw a 7.3% profit decline, to $8.9 million from $9.6 million last year.

Connie Lee Insurance Co., which focuses exclusively on insurance and reinsurance for bonds issued in the education sector, enjoyed the biggest percentage increase in profits in the industry. Connie Lee's profits surged 59.3%, to $4.3 million from $2.7 million during last year's first nine months. Statutory net income rose to $1.7 million from $463.000.

Connie Lee also had the biggest percentage increase in net premiums written, showing a 137.7% jump to $16.4 million from $6.9 million.

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