Insurance rating agency Demotech Inc. has become the 10th organization to named a Nationally Recognized Statistical Ratings Organization (NRSRO) by the U.S. Securities and Exchange Commission.
With the new designation, Demotech joins the likes of A.M. Best, Fitch Ratings, S&P Global, and Moody’s Investors Service as NRSROs.
According to an order from the SEC, Demotech filed an application with the SEC’s Office of Credit Ratings in April to become registered as an NRSRO. On July 11 the SEC said Demotech satisfied the requirements, and based on its review, “does not find grounds that would require it to deny registration.”
“The NRSRO registration demonstrates that Demotech has implemented the procedures, processes, protocols and transparency required to secure registration,” said an emailed statement from Demotech to Insurance Journal. “Similarly, our review and analysis process has been revisited to be even more, and well documented. We continue to focus on business models and the execution of those models. While others have a focus on the size of an insurer, we remain focused on an entity’s execution of its strategy.”
Dublin, Ohio-based Demotech was founded in 1985 by Joseph L. Petrelli and Sharon M. Romano Petrelli to serve the financial analysis and actuarial services needs of regional and specialty insurers.
In 1996, the company was contacted by Florida insurance regulators when newly established insurers needed to obtain ratings. Demotech said it developed evaluation procedures to assign financial strength ratings for the new insurers. Since, Demotech’s ratings continue to be relied upon in Florida and elsewhere as it takes an active role recently in urging legislative reform.
Early in 2007 Demotech was designated an official research partner of Insurance Journal. (Insurance Journal is a sister publication of Carrier Management in the Wells Media Publishing Group.)