PubFinCriteria_2006_part1_final1.qxp

emphasis in Standard & Poor’s analysis of an insurer’s financial strength rating. Our analytical approach to diversification ...

paying resources. The liquidity analysis reflects the assumption that occasional large losses could occur in a nondepressed econ ...

have presented might not necessarily jeopardize existing ratings. Cash resources include: ■Cash and short-term investments, ■Tre ...

the terms of the engagement, several meetings are held where key topics are discussed in detail. Access to the new insurer’s key ...

304 Standard & Poor’s Public Finance Criteria 2007 Other Criteria —Underlying rating Category— Single-risk Sector¶ CCC B BB ...

http://www.standardandpoors.com 305 Bond Insurance —Underlying rating Category— Single-risk Sector¶ CCC B BB BBB A AA AAA catego ...

a higher risk profile relative to that written by the pri- maries. Subsequently, the following events transpired: ■One reinsurer ...

involves a formal business “relationship” with a pri- mary insurer could lead to a rating higher than ‘AA’. An example of this a ...

Capital charges, which are assigned to all insured transactions, are theoretic worst-case loss estimates for a transaction in th ...

years of the modeling exercise. The second element is the new insured portfolio that is created in con- nection with the new bus ...

Hurricane Katrina, it was assumed that hardest hit credits generated claims immediately. For remaining, severely affected credit ...

http://www.standardandpoors.com 311 margin of safety measurement provides greater insight. The margin of safety expresses ending ...

312 Standard & Poor’s Public Finance Criteria 2007 Other Criteria T he primary objective of a government invest- ment pool ( ...

http://www.standardandpoors.com 313 (NAV) to their participants and are run like money market funds. Standard & Poor’s has a ...

Rating approach and process A stable NAV pool or money market fund rating reflects Standard & Poor’s opinion of the safety o ...

on an overnight or one day basis of 5% for ‘AAm’, 10% for ‘Am’ and 25% for ‘BBBm’. To ensure that repos are properly secured, St ...

Poor’s one-third-concentration policy is a general guideline. Funds with greater concentrations are sub- ject to a WAM adjustmen ...

and $1.005. Because funds can pay out $1.00 on shares that may actually be worth as little as $0.995, the remaining participants ...

dynamic portfolio process consistent with its stated investment goals. Standard & Poor’s believes that these meetings are ce ...

severe interest rate movements. Portfolio testing should stress the fund’s assets in aggregate under the same interest rate scen ...