Moody’s Ratings is urging the National Association of Insurance Commissioners (NAIC) to implement stricter oversight of private credit ratings used by insurers. US life insurers have accumulated approximately $807 billion in private credit, representing roughly 20% of their $4 trillion total fixed-income portfolio. The rating agency is concerned that borrowers may shop around for the most favorable rating, undermining the integrity of capital requirements for insurers. The NAIC has already introduced new transparency requirements, including mandatory submission of rating rationale reports within 90 days and a formal challenge process for ratings that diverge significantly from internal assessments.
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