MBIA Inc.'s former top executive is being investigated by federal prosecutors in connection with reinsurance agreements that caused the world's biggest bond insurer to restate seven years of earnings, according to published reports.

The U.S. Attorney in Manhattan is probing whether David H. Elliott approved secret deals to cover losses that were supposed to be paid by another insurer. Elliott became MBIA's chief executive in 1992, and chairman in 1994, and retired from both positions in 1999.

Reinsurer MBIA Inc. recently announced it had received a Wells notice from the Securities and Exchange Commission that it may face civil charges over past reinsurance transactions.

In March, MBIA restated six years of financial statements as an investigation over controversial reinsurance transactions by federal agencies and the New York Attorney General's Office continued. Reinsurance contracts are essentially insurance for insurance companies, and MBIA said that the Wells notice covered a deal it improperly reported in 1998 and clarified in the spring restatements.

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