A day after sharp criticism from a New York regulator on their decision not to participate in a hearing on ratings services and their impact on the insurance industry, Moody’s Investors Services has said it will attend the gathering.
James J. Wrynn, acting superintendent for the New York State Insurance Department, said the rating service notified his office Sept. 21 that it will attend the hearing sponsored by the National Association of Insurance Commissioners.
The hearing, scheduled for Sept. 24 in National Harbor, Md., will feature testimony from credit ratings agencies, insurers and others to review the current role ratings services play and possible changes, given the national economy. According to the group representing the nation’s 50 state regulators, insurers hold nearly $3 trillion in rated bonds and the insurance industry constitutes the largest sector of the financial services industry to rely on credit ratings to supervise capital asset adequacy.
“Correcting the mistakes that led to the financial crisis is in everyone’s interest, and insurance regulators will benefit from the rating agencies’ insight as we work to keep the insurance industry strong and protect policyholders,” Wrynn said in a statement.
Hampton Finer
Hampton Finer, deputy superintendent under Wrynn, informed Reuters that Moody’s turned down the invitation to answer questions in person at the hearing and could be dropped from a list of acceptable organizations.
“If we don’t feel like we can get answers to our questions,” Finer told Reuters, there is doubt that Moody’s should be included in a list of acceptable ratings organizations.
Fitch, Standard & Poor’s and DBRS Limited have all agreed to answer questions at the hearing, according to Reuters.
Finer said Moody’s had answered most, but not all, questions on a questionnaire sent out by the NAIC, but there were still areas that need clarifying.
“We are a little stunned,” he told Reuters of Moody’s initial decision not to attend. “This is not going to be like a congressional hearing. No one is out to embarrass them.”
The hearing will be chaired by the heads of the NAIC’s Rating Agency Working Group, Wrynn and Illinois Insurance Director Michael T. McRaith. The outcome of the hearing will be a report on any corrective action the group sees relevant regarding ratings services as well as recommendations to the federal government on regulation of its Nationally Recognized Statistical Ratings Organizations (NRSROs).
Moody’s reverses course on testifying at NAIC ratings review via IFAwebnews.com .
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