NAIC recognizes A.M. Best Co. as NRSRO.
In March 2005, A.M. Best received notification that it was recognized as an NRSRO by the Division of Market Regulation of the U.S. Securities and Exchange Commission. As a result of the recognition, Best's Credit Ratings may be used when distinguishing levels of creditworthiness required under numerous federal and state laws.
A.M. Best applied to be added to the list after it was granted NRSRO status, the NAIC said. The NAIC's valuation of securities task force approved the addition of A.M. Best, bringing the NAIC's list to five. A.M. Best joins Moody's, Standard & Poor's, Fitch and Dominion Bond Rating Service.
Insurance regulators allow most securities bought by insurance companies and rated by an NRSRO to qualify as filing exempt, the NAIC said. Filing exempt securities allow insurers to report these holdings to regulators without submitting them to the securities valuation office, the NMC said.
"State regulators continually seek ways to gain efficiencies and leverage the credit assessment work done by others such as the NRSRO to preserve limited SVO resources," Howard Mills, chairman of the valuation of securities task force and New York's insurance superintendent, said in a statement.
A.M. Best began publishing credit ratings in 1999 for corporate debt, preferred stock and commercial paper as an extension of its expertise in providing Financial Strength Ratings and evaluations for insurance companies since its founding in 1899.
The task force also considered the cost of adding A.M. Best to the NAIC computer systems that track and verify how ratings of organizations are converted into the NAIC designations that are reported by insurance companies to state insurance regulators.
"The NAIC has a long-standing and valuable relationship with A.M. Best and issues discussed by the task force had been adequately addressed," Jim Poolman, vice chairman of the task force and North Dakota insurance commissioner, said in a statement.
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|Title Annotation:||Briefing; National Association of Insurance Commissioners; Nationally Recognized Statistical Rating Organizations|
|Author:||Lysiak, Fran Matso|
|Date:||May 1, 2006|
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