NAIC Logo CIPR Logo News Release
 HOME | NEWSROOM NAIC on Facebook NAIC on Twitter NAIC Linked In NAIC News Feed (RSS)

FOR IMMEDIATE RELEASE

NAIC SELECTS BLACKROCK SOLUTIONS TO MODEL COMMERCIAL MORTGAGE-BACKED SECURITIES

WASHINGTON, D.C. (Sept. 2, 2010) — The National Association of Insurance Commissioners (NAIC) has selected Blackrock Solutions to assist state regulators as they determine risk-based capital (RBC) requirements for the commercial mortgage- backed securities (CMBS) held by insurers. As the third-party financial modeler, Blackrock Solutions will assist in the assessment of more than 7,000 CMBS holdings by U.S. insurance companies at the end of 2010, measured in terms of unique Committee on Uniform Security Identification Procedures (CUSIPs). Blackrock Solutions will coordinate with the NAIC to develop expected losses for each CMBS CUSIP, allowing insurance companies to map their CMBS holdings to the appropriate RBC designation and accompanying solvency requirements.

The selection of Blackrock Solutions followed a review of 16 bids received by the NAIC in response to RFP #1403: Assessment of Commercial Mortgage-Backed Securities, posted on the NAIC website July 28, 2010. The review was conducted by NAIC staff and independent financial consulting firm Oliver Wyman using a process similar to last year’s efforts that resulted in the selection of PIMCO as the third-party vendor chosen to assist in the RBC modeling of residential mortgage-backed securities (RMBS). The NAIC employed the same selection criteria used for that process to select a financial modeler for CMBS: 1) sound methodology, 2) ability to process a significant amount of data, 3) policies and procedures in place to address potential conflicts of interest, and 4) a cost-effective price.

"The RMBS assessment process was a very important and successful step in our analysis of expected losses and related risk-based capital requirements for the insurance industry in 2009," said Jane L. Cline, NAIC President and West Virginia Insurance Commissioner. "Expanding this examination to CMBS holdings further enhances our analysis for another 43% of the structured securities owned by the insurance industry. These assessments continue to distinguish and supplement the stringent capital requirements of NAIC and state insurance regulators, which are based upon the expected losses and RBC for a particular company."

Blackrock Solutions will coordinate with insurance regulators to develop a set of price ranges for NAIC designations one through six. These will apply to year-end 2010 statutory financial statements and will determine the RBC charges for each applicable security.

With respect to RMBS designations for year-end 2010, the NAIC will continue its highly successful relationship with PIMCO. The NAIC was pleased with last year’s results and believes consistency of process is important as additional classes of structured securities are modeled.

"We were very pleased with the results of the RMBS assessment and PIMCO's work in 2009 and look forward to benefiting from their continuing efforts this year," said Cline. "We anticipate similar success with the CMBS assessment with the support and expertise we expect to receive from Blackrock Solutions."

The NAIC will next concentrate on the development of macro-economic assumptions with which Blackrock Solutions and PIMCO develop their models. The NAIC will schedule public meetings to discuss these assumptions and other issues important to the designation process.

Further details regarding CMBS and RMBS, will be available on the NAIC’s Structured Securities page as it becomes available.

Click HERE for the NAIC Conference Call Calendar.

About the NAIC

Formed in 1871, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC has three offices: Executive Office, Washington, D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office, New York City. The NAIC serves the needs of consumers and the industry, with an overriding objective of supporting state insurance regulators as they protect consumers and maintain the financial stability of the insurance marketplace. For more information, visit www.naic.org.

You are currently subscribed to the “NAIC News Release” electronic service. For information regarding this service, please contact the NAIC Communications Division, 2301 McGee Street, Kansas City, MO 64106-2197, 816-783-8909.

To unsubscribe from NAIC Electronic Services, send a blank e-mail to
NAIC Opt Out services.

Insure U Get Smart About Insurance

Contacts

Communications Division
(816) 783-8909 news@naic.org

Scott Holeman
Communications
Director

Jeremy Wilkinson
Sr. Electronic Communications
Manager

Miun Gleeson
Sr. Communications
Specialist

Vanessa Sink
Communications
Specialist

Erin Johnson
Communications Specialist

Visit the NEWSROOM to search news releases and for more media information

Join Our E-mail List
Receive the latest news releases and other information from the NAIC Communications Division!



NAIC Web Site | State Insurance Department Sites |
Copyright & Reprint Info | Privacy Statement ]

©2010 National Association of Insurance Commissioners. All rights reserved.