The MAC Choice

MAC is an Assured Guaranty company owned jointly by its affiliates Assured Guaranty Municipal Corp. (AGM) and Assured Guaranty Corp. (AGC).  AGM and AGC are the two bond insurers that proved their resilience and reliability over the last three decades, including through the Great Recession.  MAC shares their:

  • seasoned executive officers and senior managers
  • proven risk management and underwriting discipline
  • experience in surveillance and remediation
  • industry relationships, and
  • established accounting, legal and information technology infrastructure.

MAC’s impressive credentials include its strong capital base and conservative portfolio of insured risks which together provide the financial strength to protect investors and reduce municipalities’ financing costs.

A Proven Business Model and $1.4 Billion in Claims-Paying Resources

MAC was initially capitalized to $800 million through contributions from AGM and AGC in 2013, and unlike a typical start-up, it began with significant investment income and predictable future earned revenue built in.  At inception, it assumed a $111 billion book of high-quality insured U.S. municipal business from AGM and AGC and immediately began earning its share of the premiums from those insured transactions.  This is because, under the well-established business model for bond insurers, the insurance premiums are collected from the bond proceeds when the bonds are issued, but the insurer earns them over the life of the transaction.  The combination of this $709 million unearned premium reserve with MAC’s initial capital base gave MAC $1.5 billion of initial claims-paying resources -- far more than any other U.S. muni-only bond insurer writing business at the time -- to support a 100% investment grade credit quality portfolio.  With its subsequent participation in an excess-of-loss reinsurance facility shared with AGM and AGC, its claims-paying resources now exceed $1.9 billion.


Simplicity and Transparency

By focusing on a narrow range of U.S. municipal bond sectors, MAC’s portfolio of insured risks can be readily understood by anyone familiar with municipal debt.  We make extensive information available about our insured portfolio in the What We Insure section of this website.

In accordance with Article 69 of the insurance law of the State of New York, where MAC is domiciled, and similar regulation in other jurisdictions, financial guaranty insurance companies like MAC are restricted to offering only financial guarantees (such as bond insurance policies and sureties for reserve funds).   MAC must satisfy the insurance regulatory requirements of every state where it is licensed.

Among other things, these regulations set reporting requirements, mandate minimum capital levels and prohibit MAC from writing insurance contracts under which it could be forced to make payments more rapidly than originally scheduled in the bond documents.  This protects MAC from unexpected drains on its liquidity.

Additionally, unlike a mutual insurance company, MAC is also a unit of a publicly traded company which is held to the high financial transparency standards of the Securities and Exchange Commission and New York Stock Exchange.  It also benefits from Assured Guaranty’s access to capital in both the equity and debt capital markets.