Egan-Jones says it stands by the integrity and rigor of its ratings, even as a lawsuit has been filed by former employees alleging the firm pressured staff to inflate grades. The firm, based in King of Prussia, Pa., has seen its ratings banned by a regulator and scrutinized by the SEC, while a regulator in Bermuda, where insurers park a large amount of capital, has stopped accepting its ratings. The dispute centers on $40 billion of insurer debt that has been privately graded by Egan-Jones, raising concerns about the reliability of credit assessments used to determine capital buffers for life and annuity insurers.

A better rating means insurers can set aside less capital, but if an agency overstates credit quality, policyholders could face losses. Analysts like Piper Sandler’s Paul Newsome warn that lenient ratings can expose insurers to long‑term risk, especially as private‑credit deals have surged in the past decade, leading to more “private‑letter” ratings that lack public transparency.