Or at least that’s what appears to be going on.

MBIA has raised a lot of capital lately, and it’s considering not putting the capital it just raised into its monoline insurance division, but it raised the capital for its insurance division.

As Yves Smith puts it:

So why is MBIA hoarding cash at the parent level? Well, executives (along with other corporate charges) are paid out of the parent company’s books. The subsidiaries can dividend cash up only if the are profitable OR get permission from their regulator.

Earth to SEC, we have a problem.