MBIA Inc. (NYSE: MBI) issued the following statement in response to the issuance of FASB Statement No. 163, Accounting for Financial Guarantee Insurance Contracts, by the Financial Accounting Standards Board (FASB) on Friday, May 23, 2008, which clarifies how FASB Statement No. 60, Accounting and Reporting for Insurance Enterprises, applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claim liabilities. The Statement also provides for expanded disclosures of financial guarantee insurance contracts. The Statement will be effective for MBIA as of January 1, 2009, with the exception of enhanced disclosures of risk management activities, which will be effective for MBIA as of July 1, 2008.

“The FASB’s new accounting and disclosure requirements will help standardize the financial guarantors’ approach to premium and claim liabilities recognition, and we expect that the increased disclosure requirements will be welcomed by our investors and good for the industry as a whole,” said C. Edward Chaplin, MBIA Chief Financial Officer. “Other than the effective date for enhanced disclosure of risk management activities, the Statement is not materially different from what we expected and had previously disclosed in our SEC filings and on our Web site. Although the Statement does not apply to financial guarantees written in credit default swap form, we plan to voluntarily provide disclosure on our CDS exposures that will be similar to that we will provide on our financial guarantee insurance policy exposures. As we have historically established case loss reserves based upon a ‘probable and reasonably estimable’ loss reserving standard, which is typically well in advance of a default, we do not expect a material impact on our case loss reserves. In addition, as the impact on our total loss reserves and other aspects of our financial reporting become clearer, we will provide supplemental information to the market.”

As noted above, in its SEC quarterly filings, the Company included commentary on the Exposure Draft which preceded FASB Statement Number 163, which is available in the Investor Relations section of MBIA’s Web site.