The New York Times-20080129-Berkshire Hathaway to Expand Bond Insurer Nationwide

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Berkshire Hathaway to Expand Bond Insurer Nationwide

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Berkshire Hathaway Inc., the holding company for the billionaire investor Warren E. Buffett, agreed to expand its new bond insurer nationwide in exchange for faster licensing, a group of state regulators said Monday.

Catherine J. Weatherford, chief executive of the National Association of Insurance Commissioners, offered to help speed approvals if Mr. Buffett's company agreed to apply to all states with a uniform application, an association spokesman, Scott Holeman, said Monday.

Berkshire has committed, Mr. Holeman said.

Also on Monday, the New York insurance regulator said it had hired the advisory firm Perella Weinberg Partners for guidance on a plan to assist bond insurers struggling to maintain their top credit ratings.

Perella will advise on the financial health of the bond guarantors and ways to protect policyholders, said David Neustadt, a spokesman for the New York insurance superintendent, Eric R. Dinallo.

Mr. Dinallo led a meeting with bankers last week to enlist their help in averting a downgrade or failure of bond insurers, including MBIA Inc. and the Ambac Financial Group, the two largest.

Berkshire's bond insurer may help stabilize debt markets, which have been roiled by the prospect that MBIA and Ambac may lose their top credit rankings. A downgrading may affect $2.4 trillion in assets industrywide; Fitch Ratings has already stripped its AAA rating from Ambac after losses tied to subprime loans.

Ajit Jain, head of the Berkshire insurance unit in charge of the new division, Berkshire Hathaway Assurance, declined to comment Monday. He previously said he would first seek licenses in the larger states, including California, Texas and Florida. Berkshire's bond insurer began operating in New York last month.

To induce Berkshire to submit the application to all states, the association proposed a program waiving a requirement that an insurer using a uniform application have a track record in the type of insurance for which it wants new licenses, Mr. Holeman said.