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PIA National Document: Financial Rating Agencies and PIA Members

One byproduct of the financial crisis is the possibility that there will be federal action to restructure the financial rating industry. Congress and several...
April 21, 2009

One byproduct of the financial crisis is the possibility that there will be federal action to restructure the financial rating industry.  Congress and several federal government financial agencies are considering such changes. In addition, in the fourth quarter of 2008, NAIC announced it is developing an entity in the NAIC that would function as a new financial rating agency. At this writing, it is still very unclear exactly what NAIC meant in December for such a new NAIC entity to address. At the same time, the FDIC and TARP each decided that they would financially evaluate and rate insurance entities and instruments.

Overlooked in this debate is the Main Street independent agency and the independent insurance producer community, with their standing obligations of due diligent care to their insurance customers in matters directly related to these issues. To educate and assist in this public policy debate, the PIA National Business Issues Committee (BIC) has compiled a summary (PDF) of current law and practice concerning ratings, as applied to independent insurance producers in all 55 U.S. insurance jurisdictions.

Our goal is to maintain a clear, stable and legally reliable due diligence process.  Doing so benefits the insurance buying public by providing clear guidance and practices upon which consumers may rely. It would also bring reasonable legal clarity and certainty to PIA members as they conduct their insurance producer operations.

Financial Rating Agencies and U.S. Insurance Markets and PIA Members (PDF file, PIA National Business Issues Committee, February 2009)

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