Build Interpreted NAIC Designations for Securities

You can use the Build Interpreted Credit Rating panel to derive interpreted designations based on security attributes and the quality ratings from NRSRO agencies such as Moody's, Standard and Poor's, Fitch, AM Best, Dominion Bond Rating Service (DBRS), Morningstar, Kroll and Egan Jones. This process is executed by SVO company code and month end date and builds interpreted designations with an effective date equal to the process date for securities held or having activity during the month.

The interpreted NAIC designations are posted to the ISTAR.ISTAR_NAIC database table, for potential use during the ISTAR Refresh/Valuation process. You must perform the Interpreted Credit Ratings process prior to ISTAR Refresh/Valuation for the interpreted designations to be assigned to ISTAR positions. You can verify the status of the Interpreted Credit Ratings build process for a client or all clients for an entity, before generating the Interpreted Credit Ratings and NAIC Designation Control reports.

Ratings Translations are required for the Interpreted process to translate NRSRO ratings to the NAIC designation equivalent. These translations can be added via the Create Ratings Translation panel or via Batch Uploader.

On this page

To build designations using the Interpreted Credit Rating process for a SVO Company Code:

In Accounting Center, in the left navigation pane, click Insurance > Processing > Build Insurance Data > Build Interpreted Credit Ratings.
You see the Build Interpreted Credit Ratings panel.
In the Ratings Source list, click Rating Agencies, the default value.
Complete the options on the Build Interpreted Credit Ratings panel.
Click Submit.
Upon execution of the Interpreted process, the system insert a record in the ISTAR.ISTAR_NAIC table for each security where an interpreted designation can be derived. It inserts the record with a Source of 606060606 – indicating that it was interpreted, an Effective Date equal to the date for which the process was run, and a designation with prefix and suffix as appropriate. When the Interpreted process is executed, the system uses PACE holdings data as the source for positions, so PACE is required for building interpreted designations.

Build Interpreted Credit Ratings Panel Options

The following table describes each option on the panel.

Option	Description
Process
Process Run By	Indicates whether to run the process by SVO Company Code or Client. Options include: SVO Company Code Client
SVO Company Code	Specifies the SVO Company Code. Any Client IDs set up with the same SVO company code for which you run the process utilize the interpreted ratings created through the process when you run an ISTAR Refresh/Valuation. This field appears when you set the Process Run By field to SVO Company Code.
Client ID	Remains hidden unless you set Process Run By to Client. Specifies the SVO Company Code to process, by Client ID.
Client Name	Remains hidden unless you set Process Run By to Client. Specifies the SVO Company Code to process, by Client Name.
Ratings Source	Specifies the ratings source. Options include: Rating Agencies (Default) Internal Source AM Best AMBEST
Client Lookup Identification
Identification fields	Displays several identification fields when you set the Selection Type to Client which otherwise remain hidden. When you set Selection Type to Client, enter one or more of the LOOKUP fields above, and the database retrieval is successful, the fields in this section auto-populate to allow you to verify that the panel is updating the correct SVO company code/client. Displayed fields include: Client ID Client Name Client Type SVO Company Code
Process Period
Process As-of Date	Specifies the effective date for the interpreted designations. Designations are derived for securities being held or having activity during the current month, as defined by the Start Date, End Date, and Current Month End Date fields.

About Derivation Logic for Interpreted NAIC Designations

The following table shows the derivation logic for interpreted NAIC designations.

Security Type	Ratings	Derivation Rule
US Government	Not used	Designation of 1 is assigned
Non- US Government	1 rating available	Translated value, using the Ratings/NAIC Designation Translation table.
	2 ratings available	Lower of the 2 translated values, using the Ratings/NAIC Designation Translation table.
	>2 ratings available	Second lowest of the translated values, using the Ratings/NAIC Designation Translation table.

About Derivation Logic for Interpreted NAIC Prefixes Applicable to Preferred Stock

The following table shows the derivation logic used for interpreted NAIC prefixes that applies to preferred stock.

Processing Security Type

Perpetual Flag

Interpreted Prefix

EQCSP%

N

RP

Y

P

About Derivation Logic for Interpreted NAIC Suffixes for Bonds

The following table shows the derivation logic used for interpreted NAIC suffixes for bonds.

Processing Security Type

SVO Category

Federal Agency

Interpreted Suffix

DB%

15, 20, 30, 60,
75, 80

FE

40

Not Y

FE

About Derivation Logic for Interpreted NAIC Suffixes for Equities

The following table shows the derivation logic used for interpreted NAIC suffixes for equities.

Processing Security Type	SVO Category	Exchange	Interpreted Suffix
EQCSP%	60	US Exchanges*	FEL
		Not US Exchange, 'NONE' or null	FEU
		'NONE' or null	FEV
	80	Any	K
EQCSCS, EQEQMF, EQRTXX, EQWRXX	60, 91	US Exchanges*	L
		Not US Exchange, 'NONE' or null	U
		'NONE' or null	V
	80	Any	K
All	92	US Exchanges*	L
		Not US Exchange, 'NONE' or null	U
		'NONE' or null	V

*US Exchanges: NYSE, XNYS, AMEX, XASE, NASD, NASDAQ, XNAS, XNCM, XNGS, XNMS, AT, UR, UQ, UW, UT, UA, UN, NAS, NYS, ASE, AMX, NYSEBOND

About Rating Agency Code Values

The Ratings/NAIC Designation Translation table looks for the Ratings using the code values for the Agencies referenced in the following table.

Rating Agency	Code Value
AM Best	AM BEST or AMBEST
Dominion Bond Rating Service	DBRS
Egan Jones	EGAN JONES
Fitch	FITCH
HR Ratings de Mexico	HR RATINGS MX
Kroll	KROLL
Moody's	MOODY
Morningstar	MORNINGSTAR
Standard & Poor's	SP or S&P