Standard & Poor’s Ratings Services is requesting comments on proposed benchmarks for rating mortgage insurers, including criteria for analyzing their capital adequacy.

The criteria would apply to all global-scale foreign and local currency, long-term issuer credit, financial strength and financial enhancement ratings on mortgage insurers and insurers for which mortgage insurance is a material part of the business, the company said in a statement.

S&P believes the following factors warrant specific consideration when it comes to mortgage insurers:

  • Insurance industry and country risk assessment (IICRA), reflecting the structural aspects of the mortgage sector, the regulatory environment and the types of products available.
  • Competitive position, taking into account the monoline nature of the industry and the limited number of writers.
  • Capital and earnings.
  • Liquidity.

S&P credit analyst Hardeep Manku said that “regional considerations—such as market structural features, legal regime, borrower recourse and funding—generally play a role in determining mortgage performance and, by extension, have a bearing on the capitalization of a mortgage insurer.”

S&P expects the proposed criteria to result in few, if any, rating changes.

Interested market participants may submit their written comments on the proposed criteria to The deadline is Sept. 30, 2014.