Credit ratings are one of the foundations of modern credit markets — and the National Association of Insurance Commissioners wants in on the action.

Several months ago, the regulatory association announced plans to adjust the capital charges for insurance companies investing in CLO debt and equity, by developing an in-house rating methodology instead of relying on the big three agencies.

The plans were already controversial within the CLO industry. But in a recent update, the NAIC has expanded the scope of these new rules, sparking broader outrage from industry observers as well as several Republicans on the House Financial Services committee.

The NAIC says it’s looking to prevent “regulatory arbitrage”, but critics see the rules as a “land grab” for rating fees. For this week’s podcast, Will Caiger-Smith sits down with US deputy editor David Bell to unpack the controversy.