NEW YORK, January 17, 2006 -- The Association of Financial Guaranty Insurers (AFGI) announced today that Séan W. McCarthy, President and Chief Operating Officer of Financial Security Assurance and Financial Security Assurance Holdings, has been elected to a two-year term as the association's Chair.

Mr. McCarthy succeeds Neil G. Budnick, President of MBIA Insurance Corporation, who has served as AFGI's Chair since 2004.

Also named to two-year terms were Vernon M. Endo, President and Chief Executive Officer of RAM Reinsurance Company, who was elected Vice Chair; Ed Hubbard, President and Chief Operating Officer of XL Capital Assurance, elected Treasurer; and Kate McDonough, Senior Managing Director of Ambac Assurance Corporation, elected Secretary.

"I am pleased to have the opportunity to serve as Chair of AFGI for the next two years," said Mr. McCarthy. "This is a very interesting time for the financial guaranty industry, as the role of bond insurance in the municipal and asset-backed markets continues to grow in volume, geographic scope and applications to new types of financings.

"There are a number of forces driving this expansion -- the globalization of capital markets; privatization of public infrastructure and the anticipated implementation of the Basel II bank capitalization standards, which favor highly rated issues. Overall, AFGI members have an extraordinary record of assisting issuers in lowering their funding costs and providing security and liquidity to investors in insured public infrastructure and asset-backed bonds," he concluded.

Mr. McCarthy has been President and Chief Operating Officer of FSA Holdings since January 2002, and before that was its Executive Vice President. He has been President of FSA since November 2000 and prior to that, from 1997 to 2000, served as FSA's Chief Operating Officer. An active member of AFGI, Mr. McCarthy previously served as AFGI's Treasurer.

About AFGI
AFGI is the trade association representing the eleven highly rated insurers and reinsurers of municipal bonds and asset-backed securities. AFGI members provide an unconditional and irrevocable guarantee of scheduled interest and principal payments of their insured securities. In 2004, the latest year for which aggregated numbers are available, AFGI member companies insured a record $467 billion in par value of municipal bonds and asset-backed securities worldwide.

AFGI members are ACA Financial Guaranty Corporation, Ambac Assurance Corporation, Assured Guaranty Corporation, BluePoint Re Limited, CIFG Guaranty, Financial Guaranty Insurance Company, Financial Security Assurance, MBIA Insurance Corporation, Radian Asset Assurance Inc., RAM Reinsurance Company, and XL Capital Assurance Inc.

All AFGI member firms operate under the strict risk-based capital provisions of Article 69 of the New York Insurance Law. To safeguard the rating of the insured obligations and to protect the interests of insured bond investors, AFGI firms subscribe to a "zero loss" or "remote loss" underwriting standard. Securities insured by AFGI members receive the unconditional guarantee of scheduled principal and interest payments to holders of these obligations. In the 35-year history of the financial guaranty industry, no issue insured by an AFGI member has ever been downgraded, and no member company has ever failed to fulfill its payment obligations to insured bond investors when due.