National Association of Insurance Commissioners hired BlackRock to assess the industry’s potential losses from holding commercial mortgage-backed securities.
BlackRock will review more than 7,000 securities by year-end and calculate loss expectations for the holdings, which will determine how much capital insurers must hold to cushion potential declines, the association said in a statement on its website.
“These assessments continue to distinguish and supplement the stringent capital requirements of NAIC and state insurance regulators,” Jane Cline, NAIC president, said in the statement.
Insurance regulators are searching for an alternative to Moody’s Investors Service and Standard & Poor’s, whose ratings were cited by some as one cause of the financial crisis. Last year, the NAIC named PIMCO to evaluate insurance firms’ home-loan securities.
BlackRock advised financial companies and governments during the credit crisis on how to value mortgage-related assets. It won the NAIC contract from among 16 bidders.
Brian Beades, a spokesman for BlackRock, declined to comment.