Lawyers applaud bond insurer disclosure

July 01, 2008


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Lawyers applaud bond insurer disclosure

Bond insurers won't be able to bury any details any more

The release of the US Financial Accounting Standard Board's (Fasb) new standards has lawyers embracing the idea of more disclosure and transparency among bond insurers.

Fasb Statement 163, Accounting for Financial Guarantee Insurance Contracts, enforces the idea of written financial guarantees where the insurers must report if there is a suspicion that a bond may eventually default due to poor credit.

"From a lawyer's perspective, transparency is always very good," said Howard Kleinman, partner at White & Case.

Lawyers hope that this new measure, along with an increase in disclosure of risk management activities, will cut back on possible litigation.

"Good disclosure makes it better and will make less litigation possible," said Kleinman. "People can't hide anything."

Besides transparency and disclosure, lawyers are also happy that the rules will make standards more consistent. The new...



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