AccessMyLibrary provides FREE access to over 30 million articles from top publications available through your library.
Create a link to this page
Copy and paste this link tag into your Web page or blog:
Legal - Watch out for slip-ups.
(From Reinsurance)
Byline: Simon Kilgour.
Some reinsurers believe the recent downgrades are a reaction to concerns that are industry-wide rather than about individual companies.
It has also been suggested that they are an attempt to counter accusations that the failures of companies such as Independent Insurance took the rating agencies by surprise. The rating agencies' methodologies and reliability are being questioned but, as a rating is no more than an opinion, it is difficult to dispute its validity or sustain a case that it is negligent or defamatory.
Cedants rely on rating agencies in as much as their purchase of reinsurance will be subject to minimum security requirements and because reinsurance contracts often incorporate cancellation clauses triggered when a reinsurer's security rating is downgraded. The failure to downgrade a reinsurer in financial difficulty will mean a cedant retains a reinsurer as security, which may ultimately be unable to pay all its claims. This prompts the question as to whether a cedant can sue a rating agency for any loss it suffers as a result of such failure. For a cedant to bring such an action, it would first have to establish that it was owed a duty of care.
Duty of care
The duty owed to third parties for negligent mis-statements is very limited.
- In Brief: Senate Passes Bill On Rating Agencies.(Credit Rating Agency Reform...
- Magazine article from: American Banker Kaper, Stacy September 25, 2006 700+ words
The Senate passed the Credit Rating Agency Reform Act of 2006 unanimously...Commission more authority over rating agencies, allow more companies to apply for designation as national credit rating agencies, and require such agencies to...
- New Competition for Rating Agencies: Recently approved rating agency Egan-Jones...
- Magazine article from: Investment Dealers' Digest Bizouati, Yael February 25, 2008 700+ words
...Haverford, Pa.-based rating agency firm, Egan-Jones...recognized statistical rating agency (NRSRO) designation...issuer-compensated rating agencies weren't working and...passage of The Credit Rating Agency Reform Act of 2006...
- Rating Agencies: Views Mixed On Rating Agency Bill.
- Newspaper article from: High Yield Report Laughlin, Kate July 17, 2006 700+ words
...Representatives. The Credit Rating Agency Duopoly Relief Act...However, both major rating agencies contend that, on...of scrutinizing the rating agency environment, deemed...that with a cast of rating agencies to choose from, issuers...
- Credit-rating agencies.(investors wary of credit rating agency assessments)
- Magazine article from: The Economist (US) May 15, 1999 700+ words
...word for credit-rating agencies are almost as rare...differs from the rating agencies'. But here's...to be the leading rating agency in Europe, revenues...concerns about how the rating agencies assess corporate...
- The Middle East should set up its own rating agency: the two leading rating...
- Magazine article from: MEED Middle East Economic Digest O'Sullivan, Edmund September 24, 2004 700+ words
...activity by US rating agencies in the region...Fitch, the UK rating agency, is now the...role of the rating agencies since the Asian...issues about how rating agencies finance themselves...locally-based rating agency owned by regional...
- Rating Agencies Add To Insurers' Woes: Rating Agency Cites 'Growing Concern'.
- Magazine article from: The Bond Buyer Campbell, Dakin January 18, 2008 700+ words
...s said it did not expect the increased losses to significantly impair the capital positions for those bond insurers the rating agency currently has on negative outlook or credit watch. The projected residential mortgage-backed security related losses at...
- PA State's Bond Rating Upgraded By Wall Street Rating Agency; All Three Major...
- Press release article from: PR Newswire November 6, 1998 700+ words
...today became the final of the three major Wall Street bond-rating agencies to upgrade Pennsylvania's bond rating since the start...Pennsylvania's bond ratings in October 1997. The three rating agencies rank the fiscal health of states. The ratings are used...
- Credit-rating-agency reforms: as an outgrowth of the meltdown in the...
- Magazine article from: Mortgage Banking Richards, Melissa L. April 1, 2009 700+ words
...national credit-rating agencies--Moody's Investors...four other credit rating agencies that ultimately merged...implement the Credit Rating Agency Reform Act of 2006...investigating how credit-rating agencies could have rated...
