Shares of Bermuda-based bond insurer Assured Guaranty Ltd jumped more than 29 percent in morning trading yesterday after the company said Bank of America will pay $1.1 billion to settle the Assured's demands that the lender buy back faulty mortgages.The deal was announced before the start of trading in New York this morning.Assured rose $4.12, or 29 percent, to $18.29 as of 12.31pm Bermuda time today.At the close of trading, the shares were up 24.21 percent at $17.60.The shares were down 20 percent this year through yesterday in New York Stock Exchange trading.“We are pleased to have reached a settlement with Bank of America that puts this legacy issue behind both of us,” said Dominic Frederico, Assured's president and chief executive officer.“This settlement significantly strengthens our balance sheet, allowing us to more effectively assist municipal issuers. We hope that this settlement negotiated outside of litigation encourages other R&W providers including JPMorgan Chase, Deutsche Bank and Flagstar Bank to accelerate the R&W claims settlement process.”The agreement covers $5.2 billion of residential mortgage-backed securities that Assured had guaranteed, the insurer added.The deal also includes a reinsurance arrangement. Bank of America and its Countrywide mortgage-lending unit will reimburse Assured for 80 percent of paid losses on 21 first-lien home-mortgage securities until total losses on the loans in the deals exceed $6.6 billion, according to the statement.The company added that the cash settlement of $1.1 billion will be paid in full by March 31, 2012.