Dinallo Resigns From N.Y. Insurance Dept.

Eric Dinallo will resign from the position of superintendent of the New York State Insurance Department in July as a possible precursor to a run for New York attorney general.

Dinallo, appointed to the position in January 2007, made headlines last year when he worked on a massive rescue plan for embattled bond insurers, including MBIA (MBI Quote) and Ambac Financial (ABK Quote). Dinallo also worked closely with the Treasury Department and the Federal Reserve after the collapse of AIG (AIG Quote).

Dinallo's resignation is effective July 3, and he will become the Henry Kaufman Visiting Professor of Finance at New York University's Stern School of Business.

"Under Superintendent Dinallo's leadership, the Department effectuated the largest regulatory settlement in the U.S., played an integral part in the reform of the workers' compensation system and facilitated more than $15 billion in new capital for the bond insurance industry," New York Governor David Paterson said in a statement.

A CNBC reporter said that there are reports Dinallo would run for New York attorney general, a position currently held by Andrew Cuomo, if Cuomo were to seek the position of governor of New York in 2010.

Prior to joining New York's insurance department, Dinallo was head of regulatory matters for Morgan Stanley (MS Quote). Dinallo accepted the position in September 2004 after spending four years as a key aide for former New York Attorney General Eliot Spitzer during his investigations into conflicts of interest at Wall Street investment banks.