Citing increased regulation of credit rating services and heightened competition in information services, A.M. Best has restructured its operations to separate its rating and research services from its publications and other information products.
The reorganization creates a new subsidiary, A.M. Best Rating Services Inc., which includes all rating, research and regulatory services and information, and also a new business unit called Information Services for publications including Bests Review magazine, directories and other financial information products.
The changes at A.M. Best became effective Jan. 1.
The company said the creation of A.M. Best Rating Services Inc. satisfies obligations stemming from the Dodd-Frank Wall Street reform act signed into law in 2010. This law includes provisions to prevent improper conflicts of interest on the part of credit rating agencies that also offer consulting, advisory and other services. The law also requires rating agency company boards to have at least two independent directors.
“This restructuring will enable A.M. Best to better respond to increased regulatory requirements for the independence of rating analytics from other services provided by the company,” said Arthur Snyder III, president and chairman of A.M. Best Co. Inc.
The newly established credit rating agency subsidiary is being headed by Larry G. Mayewski, president and chairman, and will operate A.M. Best’s regulated rating-centric business. In addition, Matthew C. Mosher takes on added responsibilities as executive vice president and chief operating officer, reporting to Mayewski. Mosher and Mayewski also will serve as members of the Rating Services subsidiary’s board of directors.
A.M. Best also has named two new members to the Rating Services subsidiary’s board as independent directors: Shaun P. Flynn and William B. Jenkins. Flynn and Jenkins join the board with numerous years of insurance industry experience in the areas of credit rating analytics, data and risk management, strategic planning and insurance company operations.
The company’s information products and services will remain with the parent company in the separately established business unit, A.M. Best Information Services, which is being headed by Paul C. Tinnirello, executive director, and Karen B. Heine, executive vice president, Global Information Products & Services, who will be reporting to Tinnirello.
A.M. Best was founded in 1899 and published its first rating in 1906. Headquartered in Oldwick, N.J., the company has offices in London, Mexico City, Hong Kong, Singapore and Dubai and issues ratings in more than 80 countries.