Insurance and financial guarantees


Bates White’s experts have extensive experience analyzing issues regarding insurance contracts and financial guarantees. The breadth of our work includes valuing corporate insurance contracts and financial insurance guarantees and assessing risk from the perspective of those making the financial guarantees. We also have extensive experience with analyzing the models, policies, and procedures of monoline insurers guaranteeing structured products and in evaluating the additional risk these insurers may have taken on because of alleged breach of contract by mortgage originators. Our knowledge and experience allow us to deliver rigorous, tailored analyses and to provide strategic insights in consulting or litigation contexts.

  • Submitted an expert report in state court on damages alleged to have been caused by various employees leaving one corporation for a competitor. Estimated potential damages after controlling for appropriate business and economic factors and analyzed issues related to economic causation.
  • Submitted expert reports in federal court on the value of various transactions proposed in the reorganization of a bankrupt entity. Analyzed the economic substance of the transactions and valued financial securities that would be created as part of the reorganization including equity, options, and fixed-income securities.
  • Retained as a testifying expert by multiple financial institutions in disputes over the quality of mortgages pooled into various mortgage-backed securities. Providing statistical analysis to estimate the fraction of mortgage loans in the securitized pools that failed to meet the originator’s stated guidelines. Analyzing the underlying risk of the pools and securities, examining loss causation issues, and estimating current damages and future losses.
  • Assisted a major monoline insurer in a dispute with a mortgage originator. Retained to assist the insurer in determining whether the originator followed its stated underwriting process when it made certain loans that were ultimately sold and packaged into asset-backed securities. Work involved analysis of representations and warranties made by the originator concerning its underwriting process for loans that were later used to create asset-backed securities. Generated a random sample of loans to be re-underwritten. Analyzed the results to estimate the fraction of loans in the portfolio that were defective as well as to determine whether the defective loans had a material impact on portfolio performance.
  • Provided consulting services for outside counsel representing a special committee formed to evaluate allegations in a shareholder derivative action involving a monoline insurer. Evaluated the insurer’s processes and procedures including its deal origination, underwriting, pricing, cash flow modeling, risk modeling, and surveillance activities. Analysis focused on insurer’s policies for and models related to underwriting financial guarantees on subprime RMBS, closed-end second and HELOC ABS and multisector CDO securities.
  • Submitted an expert report and provided testimony in federal court on behalf of a Fortune 100 company. Estimated the value of insurance and other financial assets that were proposed to be transferred to a 524(g) trust for a bankrupt subsidiary of a Fortune 100 company. Evaluated an analysis of the parent company’s ability to pay current and future claims as well as the post-reorganization ability of the subsidiary to continue as a going concern.
  • Submitted an expert report for and provided testimony on behalf of an insurance company in a dispute with the policy holder. Demonstrated how the value of not being able to access certain policies to pay future asbestos-related liabilities could be estimated using an option-based approach.