NEW YORK, July 9 (Reuters) - Insolvency risk is low for most bond insurers, making it unlikely that they would have to make large payments to terminate credit default swap contracts, Moody's Investors Service said on Wednesday.

Most bond insurers have capital cushions well above minimum levels, and for struggling insurers, regulators are unlikely to take preemptory action that might worsen their financial condition, Moody's said in a report.

Investors have fretted that bond insurers at risk of falling below minimum capital requirements could be seized by regulators, triggering payments on credit derivatives, which could wipe out their claims-paying ability at the expense of holders of municipal bond insurance.

Moody's has cut its ratings on bond insurers FGIC, CIFG and XL Capital Assurance, part of Security Capital Assurance SCA.N, into junk territory because their cash cushions have dwindled to levels close to the regulatory minimums they are required to hold.

FGIC's owners include mortgage insurer PMI Group Inc (PMI.N: Quote, Profile, Research) and private equity firms Blackstone, Cypress Group and CIVC Partners LP. CIFG is owned by Banque Populaire and Caisse d'Epargne, which together own French bank Natixis (CNAT.PA: Quote, Profile, Research)

"While there could be differing views about what constitutes insolvency, Moody's believes that regulators - and regulatory action - could be expected to play a significant role in that determination," Moody's said.

"Moody's believes that a regulator would be reluctant to take preemptory action that might have the effect of worsening the financial condition of the insurer and reducing resources available for prospective claimants," the rating agency said in a report.

The ability of bond insurers to raise new capital has been constrained by their plummeting share prices and soaring debt yields, due to concerns about losses the companies are expected to take from insurance they sold on risky mortgage-backed debt with credit default swaps.

The companies are required to record the value of the credit default swap insurance to their market value, which has plunged, leaving bond insurers with large losses on paper.