Outpouring of insured munis justifies close look at insurers. (insured municipal bonds) (Basis Points) (Column)

Barry's company just installed electronic answering. I hate it! Whatever number I dial, I get the same lady with the IQ of a ladybug. We talk so often, you'd think she would remember me. But no, she repeats the same litany of options each time. My greatest frustrations result from being forced to leave great offerings on voice mail and watching clients miss good deals because they can't respond quickly enough.

But this time Barry called me. "What do you know about insured municipal bonds?" he wanted to know. "Municipal bond insurance has been around for some time," I explained to him. The first policy was issued more than two decades ago. They surged in popularity during the mid 1980s. In 1986, for example, 18.4% of all new muni issues were insured--double the insured rate of just four years earlier.

"Well, I'm sure seeing quite a few insured issues now. Why?"

"I imagine it is because investors want safety, even if it means taking a lower yield, and issuers are looking to satisfy the market. While insurance is not intended …