ALBANY, N.Y. -- New York'sDepartment of Financial Services says it has licensed a new company to operate as the first mutual insurer serving the U.S. municipal bond market.
A mutual insurance company is owned by its policyholders, in this case the cities, towns or municipal entities issuing bonds.
According to state regulators, Build America Mutual Assurance Company has been established to insure the small and mid-sized municipal bond market.
Its focus is bonds up to $75 million.
State officials say it will insure only investment-grade general obligation bonds or other revenue bonds to fund essential governmental facilities and services.
It has received $600 million in initial financing and AA rating from Standard & Poor's.