New rating agency being considered

Main credit ratingsImage via WikipediaAccording to a story in the National Underwriter, the National Association of Insurance Commissioners, NAIC, is considering forming a new rating agency, which would perform much of the same functions as the current 3 longstanding private agencies. The association states that this was being considered prior to the current situation, in which the 3 longstanding agencies responsible for issueing ratings are being criticized for failing to not properly assess companies that have run into trouble due to their sub prime mortgage investment exposures. I would think, with the current slow response in downgrading those companies that ran into trouble, coupled with the high ratings these companies enjoyed prior to the current financial mess, that a serious self audit by the rating agencies currently providing these ratings would be in order. The whole premise behind the existence of the rating agencies is to provide guidance to investors and clients alike when choosing to do business with an insurance company. The NAIC states that they are currently in the very beginning phase of researching the viability of such an agency and will provide further information as they continue develop the concept. The NAIC states that the new proposed agency would be similar to the current Interstate Insurance Product Regulation Commission.
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