Bond insurer MBIA (NYSE: MBI) announced Monday after the market close it suffered a third quarter loss of $727.8 million or $3.50 a share as insurance losses on mortgage-backed securities saddled the company yet again.  However, the loss is smaller than the $806.5 million MBIA shed in the third quarter a year ago.

According to MBIA, the net loss in the third quarter was driven by an $810.2 million pre-tax unrealized loss on insured credit derivatives, along with $238.8 million in pre-tax loss and loss adjustment expenses primarily related to the company’s insured exposures to second-lien mortgage loan securitizations.

MBIA also incurred $171.4 million in pre-tax losses and other-than-temporary impairments on its investments.

Net investment income tumbled 56 percent in the period to $156.8 million, while premiums earned were off 23 percent in the quarter to $181.2 million, from $234.7 million.

MBIA said that its national insurance unit wrote virtually no new business for the quarter as well as the first nine months of 2009.  However, the existing book of business generated $74.8 million in scheduled premiums earned in the third quarter.

“The third quarter’s loss is a reminder that the impact of this recession continues to be felt throughout the economy,” said President and Chief Financial Officer Chuck Chaplin in a press release. “Incurred losses in our insurance business were above expectations and the same housing-related performance trends drove our asset losses and impairments.”

MBIA Corp. paid a total of $638.4 million in net claims during the third quarter, primarily in connection with its second-lien residential mortgage exposures.

The company did report a slight increase in assets under management by its advisory services business, adding 11 percent since the end of last year to $31.9 billion.

MBIA is headquartered in Armonk, New York and is a holding company with subsidiaries that provide fixed-income asset management and financial guarantee insurance.