A group of state insurance regulators is beginning to provide substitute credit ratings for municipal bonds held by insurance companies and is pitching the ratings to financial advisers and other market participants as a way to improve the marketability of issuers’ bonds to these companies.

In letters to market participants last week, the National Association of Insurance Commissioners said that during the past three months its securities valuation office has provided “credit designations” to more than 200 munis held by mostly property and casualty insurance companies, which are incentivized under the tax code to buy munis.

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