Insurers that invest heavily in common equities and write long-tailed lines of insurance may see their capital charges increase in an updated capital model that Standard & Poor's announced today.
But the capital model is only one element of the rating, S&P analysts stressed during a conference call intended to fill in details behind a report released to insurers this morning.
"The capital model itself does not define a rating," said Grace Osborne, managing director of North American insurance ratings for S&P, detailing changes to the structure of the S&P's methodology and to the capital factors--or charges that are applied to various balance sheet and income statement items--proposed under the new capital component of S&P's rating analysis.
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