MBIA Inc, through its subsidiaries, is a financial guarantor and a provider of specialized financial services. The Company provides products and services that meet the credit enhancement, financial, and investment needs of its public and private clients worldwide. On March 8, 2005 MBIA announced that it would restate its financials for 1998 and subsequent years to correct the accounting treatment for two reinsurance agreements that MBIA entered into in 1998 with Converium Re (previously known as Zurich Reinsurance North America). As a result of this restatement, MBIA's financial results for 1998 will reflect a third quarter incurred loss of $70 million related to $265 million of bonds insured by MBIA that were issued by Allegheny Health, Education and Research Foundation (AHERF). The after-tax loss will be approximately $47 million, resulting in net income for the year of approximately $386 million, or $2.57 per share, down 11% from $433 million or $2.88 per share as originally reported.
On March 30, 2005 MBIA announced that today it received additional requests from the New York Attorney General's Office (NYAG) and the Securities and Exchange Commission (SEC) that supplement the subpoenas it received in late 2004. The requests seek documents relating to the Company's accounting treatment of advisory fees; its methodology for determining loss reserves and case reserves; instances of purchase of credit default protection on itself; and documents relating to Channel Reinsurance Ltd., a reinsurance company of which MBIA is part owner. The requests cover the period January 1, 2000 to the present. MBIA is cooperating fully with the NYAG and the SEC.