A Bermuda insurer could be on the hook for more than $10 billion as part of the fallout from the crisis with UK water utilities.

The British Government has this summer been leading emergency talks over the uncertain future of the country's biggest water supplier, Thames Water, and even offered temporary state ownership, as the company buckled under huge debts.

Thames Water CEO Sarah Bentley has just abruptly resigned after being on the job for three years.

She was just two years into an eight-year turnaround plan to address the facilities ageing infrastructure, tackle leakage and reduce pollution in rivers, after complaints of a legacy of underinvestment.

The supplier of water to more than a quarter of Britain’s population, Thames Water sought to raise more than a billion dollars in fresh equity to remain a going concern.

Meanwhile, The Financial Times and Reuters are reporting that Assured Guaranty has more than $10 billion of exposure to some of the more troubled UK water utilities, including Thames Water, and could end up paying lenders in the case of defaults.

Reuters reported: “Thames Water had amassed a debt pile of 14 billion pounds ($18.14 billion), casting a shadow over the entire sector, which needs to upgrade.

“Assured Guaranty has built about $1.9 billion in exposure to Thames Water, with Southern Water being its largest non-US exposure at $2.2 billion, the FT said, citing results published in March.

“However, a senior managing director at Assured Guaranty told the FT that the insurer feels these water companies have a strong debt profile.”

The newspaper quoted AG manager Nick Proud: "We feel the UK water company debt we have insured has a strong credit profile, as it provides an essential public service and is in a well-regulated industry where we guarantee the senior level debt."

Assured Guaranty Limited is a Bermudian-based holding company, publicly traded on the New York Stock Exchange.

Through its subsidiaries, Assured Guaranty provides credit enhancement products to the US and international public finance, infrastructure and structured finance markets and also provides asset management services.

Thames Water provides waste water services and supplies drinking water to 15 million customers in London and the southeast of England.

Shareholders contributed an additional £500 million ($635 million) four months ago, but the company is now saying it needs more.