In our opinion, Opportunities Exist to Improve Controls1
surrounding the credit granting and
underwriting process for TFO policies. Specifically, we found that the standard types of transactions to be
insured under the TFO program had not been clearly defined nor had approval levels been defined for
non-standard deals. In addition, effective controls were not in place to ensure the accuracy of obligor
credit ratings and reported exposures. Our opinion reflects the fact that significant steps have already
being taken by management to address these matters.