Financial Guaranty Insurance Co., the bond insurance unit of bankrupt FGIC Corp., said yesterday that the New York State Department of Financial Services had begun a rehabilitation process that will include taking over the business of the bond insurer, Reuters reported yesterday. FGIC filed for bankruptcy in August of 2010 as a result of the financial crisis and a deterioration in the U.S. housing and mortgage markets. It was once the fourth-most active bond insurer. The bond insurance unit stopped writing new financial guaranty insurance policies in January of 2008 in order to preserve capital and also stopped paying dividends to its parent company FGIC, which led to its bankruptcy.
