Standard & Poor’s wants comments on its proposed revised methodology for assessing lenders’ mortgage insurance as a form of credit enhancement in global residential mortgage-backed securities, global covered bonds and debt ratings in the US municipal housing sector.

It has also called for comments on its planned framework for rating non-bank financial institutions. This draws on the ratings agency’s bank criteria, placing heightened emphasis on economic risk and industry risk in setting the start point – or “anchor” – for rating an institution.

Analytical Manager Australia and New Zealand Peter Sikora says the agency will then “add to or subtract notches from the anchor for entity-specific factors, such as business position, capital, leverage and earnings, risk position and funding and liquidity, to determine the group credit profile or stand-alone credit profile”.

Mr Sikora told insuranceNEWS.com.au making draft revisions available to the market is an opportunity to take feedback and keep the industry informed. “We genuinely want to know what the market thinks, but we also want people to understand our methodology and ratings criteria.”