After methodically looking through 17 American International Group (AIG)-insured structured transactions, S&P has reached a new ground on defining terminology that may prove to lessen the difference between those policies issued for capital market transactions by multiline insurers and those issued by monoline insurers.

Earlier this year the AIG subsidiary Lexington Insurance refused to honor its insurance policy on two downgraded film-backed deals (see ASR 3/19). On May 21, the Court of Appeal ruled that the policies behind both film deals did not constitute capital markets financial guarantee, a ruling that had, to date, supported AIG's line of defense.

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