Build Interpreted NAIC Designations for Securities
- Nancy Cohn (Deactivated)
- Kinga Huszno
- Pamela Totas (Deactivated)
- Jacob Mathews (Deactivated)
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
- 1 Build Interpreted Credit Ratings Panel Options
- 2 About Derivation Logic for Interpreted NAIC Designations
- 3 About Derivation Logic for Interpreted NAIC Prefixes Applicable to Preferred Stock
- 4 About Derivation Logic for Interpreted NAIC Suffixes for Bonds
- 5 About Derivation Logic for Interpreted NAIC Suffixes for Equities
- 6 About Rating Agency Code Values
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 | 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:
|
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:
|
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 |
|---|---|---|
| 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 |
|---|---|---|---|
 | 15, 20, 30, 60, | 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 |
|---|---|---|---|
|
| US Exchanges* | FEL |
Not US Exchange, 'NONE' or null | FEU | ||
'NONE' or null | FEV | ||
80 | Any | K | |
EQCSCS, |
| US Exchanges* | L |
Not US Exchange, 'NONE' or null | U | ||
'NONE' or null | V | ||
80 | Any | K | |
|
 | 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 |
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