02.07.23

SEC Worries About Rating Analyst Overload

by: Allison Bell

In a new report on the state of nationally recognized statistical rating organizations (NRSROs), officials at the U.S. Securities and Exchange Commission's Office of Credit Ratings discussed threats facing clients’ life insurance policies and annuity contracts. “Rating surveillance processes came under stress during COVID-19 due to rapidly changing information and declining performance in some sectors, which may have required additional surveillance reviews,” the new report stated. One potential risk is the “possibility that NRSROs may have adjusted assumptions or streamlined surveillance processes without sufficient controls.”

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