Many changes are afoot for the nation's bond insurers.

On Friday, Financial Guaranty Insurance announced plans to split into two: one company insuring municipal bonds and the other with a troubled structured-finance portfolio.  Ambac Financial is reportedly mulling a split as well as it pursues a plan to raise as much as $2 billion in capital.

Now the biggest bond insurer, MBIA has brought back Joseph Brown as chief executive, replacing Gary Dunton.

Brown will be asked to right MBIA at a time when its stock price has been hammered over worries over the company's exposure to credit derivatives. Last month, the company reported a fourth-quarter loss of $2.3 billion on a $3.5 billion write-down on its credit derivatives.

New York authorities have said that they may force a split of bond insurers.

"I look forward to working with the MBIA team to frame a new model for the financial guarantee business," Brown said in a statement.

"In addition, it is critical that we expedite our communications with the New York State Insurance Department. I have already spoken with Superintendent Eric Dinallo. I believe we can look forward to improved dialogue with the Department. Eric and I had a constructive discussion regarding MBIA's plans and he provided us with helpful guidance. We expect to rebuild confidence in the company and in the industry."

In an interview with the Wall Street Journal, however,  Brown said that a break-up was not among the options. "Split is not a term that's going to be used at MBIA," he told the Journal.

Brown, 59, had been chief executive from 1999 to 2004 and had much experience with state insurance regulators and Wall Street. He has also clashed with Bill Ackman, the hedge fund manager who has bet that MBIA will lose its triple-A rating and collapse.

MBIA, under Brown, complained about the short-selling by Ackman's hedge fund at the time, Gotham Partners. At MBIA's urging, Eliot Spitzer, then attorney general of New York, began an inquiry into possible market manipulation by Gotham.

Jonathan Laing of Barron's  in December 2005 described a meeting between Brown and Ackman in 2002:

As Ackman rose to leave, he recalls reaching out to shake hands with Brown, only to have Brown recoil, awkwardly jerking his right hand up to his shoulder. "I don't think so," he says Brown told him with a look of palpable disgust.