UPDATE 1-FASB changes accounting rules for US bond insurers
(Adds detail, background)
NEW YORK, May 23 (Reuters) - In a move that could hurt U.S. bond insurers, the U.S. accounting rulemaker on Friday said it is changing standards for when the insurers have to set aside money for expected losses.
Under the new rule by the Financial Accounting Standards Board, insurers that have guaranteed bonds must boost their claims liabilities, or funds set aside to cover expected losses, when the bonds' credit quality has deteriorated.
At least some bond insurers currently set aside reserves only when they believe they can estimate the losses, and the losses are likely to take place. The new rule would force those insurers to set aside money sooner.
The two biggest U.S. bond insurers, MBIA Inc (MBI.N) and Ambac Financial Group (ABK.N), were not immediately available for comment.
The Financial Accounting Standards Board said the new rules are effective for periods starting after Dec. 15, 2008, which for most major bond insurers is the first quarter of 2009.
The new rule, called FASB Statement No. 163, also changes standards for recognizing revenue for financial guarantors. (Reporting by Dan Wilchins and Emily Chasan; Editing by Leslie Adler)
© Thomson Reuters 2009 All rights reserved
Green Shoots / Brown Weeds
Jobless claims drop steeply
The number of U.S. workers filing new claims for jobless benefits fell sharply last week, although the data was distorted by an unusual pattern of layoffs in the automotive industry. Full Article
Bad weather hurts retail sales
Sales fell at many U.S. apparel retailers and warehouse club stores in June as the weak economy and cool, rainy weather dashed interest in summer shopping for consumers across the country. Full Article
