US insurance regulators have scaled back demands for information about credit rating providers after industry pushback. The National Association of Insurance Commissioners (NAIC) initially sought confidential assessments from rating firms, but has now walked back these demands following protests. The retreat reflects the NAIC's limited enforcement tools and concerns over its independence.
The changes come as regulators seek greater insight into credit ratings used to set capital requirements for insurers. The NAIC's revised framework will still allow it to review information from credit-rating regulators, but has removed a request for individual reports on each rating agency. This follows concerns that some insurers may be 'shopping' for more favourable ratings on their investments.
Two insurers controlled by billionaire Mark Walter recently revealed they had misclassified over $20bn in private investments, raising questions about the reliability of ratings from Egan-Jones, a small agency that had previously come under scrutiny.
Source: Financial Times Companies · Summarized by HeadlinesBriefing