State regulators, possibly within days, will approve the hiring of a firm to reassess the evaluations of 17,600 residential mortgage-backed securities downgraded by the major credit rating firms, an official said.
A request for proposals to evaluate the securities is being prepared by the National Association of Insurance Commissioners, according to Hampton Finer, a New York deputy insurance commissioner. The NAIC is acting on a request by a life insurer trade group.
The American Council of Life Insurers called for the change in September, arguing to the NAIC that current ratings by Nationally Recognized Statistical Rating Organizations (NRSRO) failed to distinguish between securities with a total loss and those projected for minor losses.
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