BlackRock subsidiary to judge capital requirements for 7,000 CMBS
BlackRock Solutions, the third-party risk assessment subsidiary of mega money manager BlackRock (BLK), is going to assist state regulators in determining risk-based capital requirements for more than 7,000 commercial mortgage-backed securities (CMBS). The National Association of Insurance Commissioners (NAIC) made the selection and the CMBS is held by US-based insurance companies. According to an email from the NAIC, Blackrock Solutions will coordinate with the NAIC to develop expected losses for each CMBS CUSIP, allowing insurance companies to map their CMBS holdings to the appropriate RBC designation and accompanying solvency requirements. Blackrock Solutions was picked out of a pool of 16 bids. The same selection process was used last year when PIMCO was selected to do the same for U.S. insurer's RMBS. "Expanding this examination to CMBS holdings further enhances our analysis for another 43% of the structured securities owned by the insurance industry," said Jane Cline, the insurance commissioner of West Virginia and president of the NAIC. "These assessments continue to distinguish and supplement the stringent capital requirements of NAIC and state insurance regulators, which are based upon the expected losses and risk-based capital for a particular company," Cline said. Blackrock Solutions will coordinate with insurance regulators to develop a set of price ranges for NAIC designations one through six. These will apply to year-end 2010 statutory financial statements and will determine the risk-based capital charges for each applicable security. Write to Jacob Gaffney. The author holds no relevant investments.