NRA Reports Renaming of Insurance Companies Ratings

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National Rating Agency LLC (hereinafter – 'the Agency') officially notifies all the interested parties that, in order to comply with the requirements of the Federal Law №222-FZ dated July 13, 2015, 'On the activities of credit rating agencies in the Russian Federation, on the amendment of Article 76.1 of the Federal Law 'On the Central Bank of the Russian Federation (Bank of Russia)' and invalidating of certain parts of legislative acts of the Russian Federation', changes in the names of insurance companies ratings are made.

In accordance with the requirements of the Federal Law №222, reliability ratings and credit ratings of insurance companies and life insurance companies are being renamed into financial strength ratings. Renaming applies to both national scale ratings (previously – reliability ratings) and global scale ratings (previously – credit ratings). Renaming of ratings is carried out due to the requirements of the Law №222-FZ on the names and characteristics of credit ratings. Renaming of ratings has the sole purpose to define insurance companies ratings as credit, as opposed to reliability ratings of other types of objects that are not regarded by the Agency as credit ratings.

Please be informed that:

  • the ratings of insurance companies and life insurance companies are always interpreted by the Agency as credit;
  • these ratings directly estimate the probability of default on financial obligations of insurance companies;
  • these ratings fully comparable with credit ratings of other objects;
  • for these ratings historical probabilities of default and rating transition matrices are published;
  • renaming of ratings is not associated with a change in the methodology of its assignment and will not lead to a revision of the existing insurance companies ratings.

In order to comply with the legislation the Agency determines that the following types of its ratings are credit ratings:

Credit rating;

Financial strength rating.

Credit ratings can be assigned exclusively by accredited rating agencies, which are subjects to the regulation. In Russia, registering of credit rating agencies and regulation of credit rating assignments is within the competence of the Central Bank of the Russian Federation – the Bank of Russia.

The following types of the Agency's ratings are derivative ratings:

Reliability rating;

Risk management quality rating;

Service quality rating;

Corporate management quality rating;

Rating of pension savings management quality;

Sharia compliance rating;

State forest management quality rating;

Environmental responsibility rating of oil and gas companies;

Investment attractiveness rating;

Rating of football development in Russian regions.

Assignment and use of derivative ratings are not currently regulated by law.

Read more about the kinds of ratings, rating actions and the rating procedure of the Agency here: http://www.ra-national.ru/ru/products