A report which addresses what regulators maintain is a need for new ratings for regulatory purposes was adopted today by the Rating Agency “E” working group of the National Association of Insurance Commissioners, Kansas City, Mo. The report will be reviewed by the working group’s parent “E” Committee during the spring NAIC meeting next week in Denver. The working group was chaired by Illinois Insurance Director Michael McRaith.
The NAIC as well as some insurers have criticized how vigilant rating agencies were in watching residential mortgage-backed securities and have cited this treatment of ratings as one possible reason for underestimating expected losses. It hired Pacific Investment Management Company to evaluate these securities using methods that regulators developed.
During the spring meeting, the Life & Annuities “A” Committee will consider a new charge concerning the stranger-owned/originated annuity issue, the NAIC announced. The “A” Committee is chaired by Connecticut Insurance Commissioner Tom Sullivan who along with vice-chair, North Dakota Insurance Commissioner Adam Hamm, will examine the issue along with others such as annuity disclosure. A public hearing will be held in New York on May 4.