Insurance Europe Raises Concerns over Misunderstanding of Ultimate Forward Rate

On April 21, 2016, Insurance Europe, the European insurance and reinsurance federation, released a press releaseraising concerns over how Solvency II liabilities are currently calculated, including discount rates. This press release was published in response to the consultation carried out by the European Insurance and Occupational Pensions Authority and it discusses whether the Ultimate Forward Rate should be calculated by reference to the discount rate, or whether it may be adjusted to reflect changes in long-term expectations.

Assured Sues OneWest Bank in Connection with RMBS Insurance

On August 9, Assured Guaranty filed suit in California state court against OneWest Bank FSB, claiming that the company’s loan servicing was to blame for $335 million it has paid in insurance claims related to residential mortgage-backed securities.  Assured alleges that when OneWest acquired IndyMac Bank FSB’s role as servicer in 2009 of the mortgage loans, the loans began to experience significant delinquencies and defaults.  Assured alleges that PricewaterhouseCoopers conducted an independent audit and found that OneWest was materially noncompliant with several loan servicing requirements.  Assured also alleges that the Office of Thrift Supervisions has brought an enforcement action against OneWest for unsafe and unsound practices regarding its handling of servicing and foreclosure proceedings.  Assured asserts claims for breach of contract and for specific performance and declaratory relief seeking to terminate OneWest as servicer.  Complaint.

Rating Agency Developments

On March 31, DBRS released its European CMBS rating methodology. DBRS Release.

On March 31, Fitch updated its criteria for rating non-life (property/casualty), life, U.S. health/managed care, and title insurance companies. Fitch Release.

On March 28, Fitch updated is criteria on rating U.S. public power systems. Fitch Report.

On March 25, S&P revised its loss projections for U.S. RMBS backed by prime, subprime, and Alt-A collateral issued in 2005, 2006, and 2007. S&P Release.

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