While it assured members three other monoline insurers will continue to meet future obligations, Southwest Corporate recorded OTTIs on mortgage-backed securities guaranteed by two insurers in its newly released April 2009 financial statements.

The New York-based Financial Guaranty Insurance Co., which represents about 22% of Southwest's insured investments, had its external ratings recalled by the three major agencies. Even though FGIC is currently timely paying 100 percent of all principal and interest claims, Southwest said it recorded only 70% reliance on FGIC-backed investments.

A second insurer that enhances much less of Southwest's investment portfolio, Syncora Holdings, was instructed by the New York Insurance Department to suspend claim payments, effective April 29, unless it restored regulatory surplus by May 29. That deadline was extended to tonight according to Syncora's Web site. (www.syncora.com)

Like other corporates, Southwest decided to adopt FASB rules that require investors to record higher impairment charges, resulting in a $480 million OTTI on mortgage-backed securities as of 2008 year end. However, per FASB rules, Southwest reversed $300 million worth as of March 1, which represents noncredit losses or unrealized losses.

The corporate also recorded a $127 million U.S. Central capital loss as of 2008 year end, which represents an almost 50% hit.