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The two consultation papers published by the European Commission (Commission) on 31 July 2008 result from the perception that CRAs contributed to current market turmoil by underestimating the credit risk of structured instruments in which sub prime mortgages were embedded. Many investors relied too heavily on the generally favourable ratings given by CRAs to these products instead of assessing the risk characteristics themselves and assessing performance of the underlying assets. …
Read More EU: European Commission Publishes Two Consultation Papers on Regulation of Credit Rating Agencies (CRAs)

On July 29, XL Capital (“XL”) announced plans to raise $2.5 billion through an offering of ordinary shares and equity security units, the proceeds of which were to be used to recapitalize Syncora Holdings, Ltd. (formerly known as Security Capital Assurance) (“Syncora”), a bond insurance company that XL spun off in 2006. …
Read More NY Insurance Department Announces Successful Closing of Agreement to Recapitalize Syncora Holdings, Ltd.

The English High Court provided directions to the liquidators of Whiteley Insurance Consultants (WIC), an insurance intermediary, on how to deal with claims in the liquidation made by creditors to whom insurance policies had been sold by WIC in circumstances where either WIC had no authority from the insurers to place the policies or the insurers did not exist. …
Read More UK: Guidance on the remedies under FSMA – In the matter of Whiteley Insurance Consultants (2008)

On Wednesday, July 23rd and Friday, July 25th, the New York State Insurance Department and the New York Attorney General held the second and third public hearings in a series of three hearings concerning producer compensation and disclosure of fee arrangements to consumers. 

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Read More The New York Insurance Department and New York Attorney General Held their Second and Third Joint-Hearings Regarding Insurance Producer Compensation

The Connecticut Attorney General, Richard Blumenthal, recently filed separate complaints against The McGraw-Hill Companies, Inc. (as the parent of Standard & Poor’s), Moody’s Corp., and Fitch, Inc.  The complaints were filed in the Connecticut Superior Court, Judicial District of Hartford.  Each complaint contains a single count for violation of Connecticut’s Unfair Trade Practices Act (CUTPA). 

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Read More Connecticut Attorney General Files Complaints Against Rating Agencies