Regulators may delist Moody’s: US official

An official in the New York insurance department says insurance regulators from across the country are expected to discuss dropping Moody’s Investors Service from a list of acceptable rating organisations at a meeting later this week.

Mr Hampton Finer, the deputy superintendent of insurance for New York, said in an interview late Saturday that concerns about Moody’s arose after the credit-rating firm turned down an invitation to attend a regulatory hearing on Thursday, where it was to be questioned about its ratings process, particularly in light of the financial crisis.

“If we don’t feel like we can get answers to our questions, the question is if we should put them on our ARO (acceptable rating organisations) list,” said Mr Finer. Mr Finer added that Moody’s had been cooperative in answering most, but not all, questions in a regulatory questionnaire earlier in the year.

“We are a little stunned,” that Moody’s refused to attend the hearing, he said. “This is not going to be like a congressional hearing. No one is out to embarrass them.”

A spokesman for Moody’s did not immediately resp-ond to a request for comment.

With nearly $3 trillion of rated bonds, the insurance industry is the largest sector of the US financial services industry to rely on capital ratings, according to the National Association of Insurance Commissioners (NAIC).

The three leading ratings firms — Moody’s, Fitch and Standard & Poor’s — have been criticised for fuelling the financial crisis by assigning and maintaining high ratings on mortgage-backed securities, even as concerns about the health of the US home market grew.

The NAIC, which represents state insurance regulators, wants to lessen its reliance on the ratings firms, according to a March report.

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