Valuation Office To Recognize Canadian Rating Agency

By Jim Connolly

October 21, 2003 at 08:00 PM

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NU Online News Service, Oct. 21, 2003, 5:49 p.m. EDT – Regulators at the National Association of Insurance Commissioners, Kansas City, Mo., have decided to recommend that the Securities Valuation Office recognize Dominion Bond Rating Service Ltd., Toronto, as a rating organization for purposes of rating bonds filed with the SVO.

The SVO, a New York-based arm of the NAIC, rates the risk level of the securities that insurers buy for their investment portfolios.

Dominion is a credit rating agency established in 1976.

Dominion would receive the status of Nationally Recognized Securities Rating Organization, similar to the status accorded to other rating agencies, including Fitch Ratings, Standard & Poor's Ratings Services and Moody's Investors Service.

The NAIC's SVO oversight working group agreed that the status should become effective immediately. The working group plans to develop wording for the NAIC's Purposes and Procedures Manual later this year, and the SVO will adjust its systems in 2004 to reflect the change, officials said.

If the SVO system did not automatically provide the Dominion rating of a particular bond in an insurer's investment portfolio, a financial examiner interested in the risk classification of that bond could simply request verification of the Dominion rating from the insurer, officials said.

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