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Some local governments have lost investment insurance

About 1,300 Wisconsin communities, counties and school districts have lost insurance coverage for their investments in a state pool.

The officials who run that pool say the local governments have nothing to worry about because their public funds are in solid investments which are not likely to fail.

Still, those investors have lost their guarantees after the Financial Security Assurance company pulled out of the business amid growing concerns about the nation's credit crunch.

Wisconsin was the company's only customer with a state-run investment pool and the state has not been able to find another provider.

The local and school officials have more than $100 million at risk.

The state's investment fund was started in 1975, and it never suffered a loss in monies covered by insurance.

In the mid-90s, the state did lose $95 million in a higher-risk venture involving international currencies.

Now, though, the fund is overwhelmingly made up of U.S. Treasury notes which are backed by the federal government.