The National Association of Insurance Commissioners
's selection of Pimco
to assess risk for residential mortgage bonds has
raised conflict-of-interest concerns, the Wall Street Journal reported
Pimco won the job of estimating losses in insurers' holdings of mortgage-back securities on Tuesday. The mandate, however, has come under scrutiny from outsiders fearing a conflict of interest. The Newport Beach, California-based bond fund giant, whose money-management business has some insurers as clients, is itself owned by international insurer Allianz
, which also owns a Minneapolis-based life insurance firm.
"The selection of Pimco to perform this assessment was conducted in an accelerated time frame that was designed to be extremely thorough," a NAIC press release
A spokeswoman for the Allianz life-insurance unit said that well under one percent of the company's investments were involved in the NAIC review.
Aside from the NAIC assignment, Pimco is also purchasing mortgages for the Federal Reserve. It also managed its emergency
commercial paper program.
Separately, the Journal reported Thursday that ING Investment Management
is optimistic about the economy and its own future financial success.
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