INSURANCE

Mutual Benefit to Halt Muni Bond Payments: Mutual Benefit Life Insurance Co. will stop paying interest Saturday on as much as $600 million in municipal bonds guaranteed by it, the failed insurer said. The decision by Newark, N.J.-based Mutual Benefit may result in losses for investors in many of the 44 tax-exempt bond issues backed by the company, which has $14 billion in assets. The firm was seized by the New Jersey insurance commissioner in July, 1991, after investment losses prompted many of the company’s 395,000 investors to surrender their insurance policies. Under a proposed rehabilitation plan, Mutual Benefit would make no payments to the company’s general unsecured creditors, including municipal bondholders. Policyholders would be paid in full, with 3.5% interest on their investment.