Bloomberg Launches Regulatory Data Solution Addressing NAIC's Principles-Based Bond Definition Project

New Bloomberg Data License solution to help US insurance companies and impacted asset managers navigate the bond reclassification requirements ahead of the January 2025 compliance deadline

NEW YORK, June 27, 2024 /PRNewswire/ -- Bloomberg today announced the launch of its Bond Classification Regulatory Data Solution which automates the classification of bonds under the new rules of the National Association of Insurance Commissioners' (NAIC) Principles-Based Bond Project (NPBB).

Effective starting January 2025, the new rules will require insurers of all types to classify their bonds as issuer credit obligations, asset-backed securities, or neither in determining whether the security is eligible to be reported as part of Schedule D. To meet this new requirement, insurance firms and asset managers with insurance company exposure will need to quickly and systemically classify these exposures, both before buying, and while holding these securities. The result of these classifications will eventually impact firms' capital requirements as these are based on the proportion of assets that meet the definition of a bond.

"To make these classification decisions effectively and at scale, insurance companies and asset managers would need to source multiple data feeds and develop new manual processes. Our clients approached us looking for an automated solution to help streamline these operational requirements and avoid any year-end congestion or potential costly oversights with inaccurate reclassifications," said Leila Sadiq, Global Head of Enterprise Data Content at Bloomberg. "Our breadth of data and detailed rule engines enabled us to deliver a timely solution, which assists client's accounting, compliance and legal teams in determining which holdings should be categorized as principles-based bonds or other assets. The architecture of this solution is highly flexible so that it can rapidly adapt to changes stemming from any future guidance."

Bloomberg's Bond Classification Data Solution provides indicators that specifically aim to communicate whether a security meets the guidance provided by the NAIC and found in the Statement of Statutory Accounting Principles No. 26. The solution uses a wide variety of data attributes to test bonds and provides both the determination result as well as the specific attribute that qualifies the security for the new classification. Bloomberg additionally provides a data field, in the case of asset-backed exposures, that shows whether the instrument in question represents a financial or non-financial asset for the purposes of statutory reporting. Bloomberg's solution takes a data-driven approach to automate these classifications, helping market participants to save time and resources on appropriately categorizing their assets so they can confidently comply with the new rules.

This regulatory solution is available to Bloomberg Data License customers who may need to integrate it into their compliance workflow. Clients will have the option to obtain this data per security or as part of a bulk subscription for the entire security universe at data.Bloomberg.com and have it delivered via SFTP, REST API or into a cloud environment.

Bloomberg's Enterprise Data business produces high-quality pricing, reference and regulatory datasets, real-time market, event and news data, and liquidity analytics along with data management and distribution technologies. For more information, please visit our website here.

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SOURCE Bloomberg