Last month I cheered the news that the National Association of Insurance Commissioners wanted to wean insurance regulators off of the rating agencies. Today, there's more news that I would also like to applaud: one of the chief contenders to evaluate insurance investment risk is BlackRock Inc. The Wall Street Journal reports that the firm is in talks with regulators for job. I'd love to see this happen.

Here's some detail from the Journal:

A switch away from the raters -- which a key group of regulators is expected to vote on next week -- would mark yet another power shift on Wall Street in the wake of last fall's market swoon, as regulators and others continue to pinpoint culprits even as times have improved.



And in this case:

Regulators have relied on ratings agencies to determine how much capital insurers need to hold to back up their bonds. They maintain that, by seeking a new method, they are looking not for inflated valuations but for a more reliable process. At NAIC hearings last month, investment pros and even the ratings firms said insurance regulators shouldn't rely on the residential-mortgage-bond ratings as heavily as they do.



Now don't get me wrong: BlackRock could have some desire to inflate valuations or push for lower capital requirements. But I think that regulators would quickly smell a rat in such a scenario. In the meantime, I can't think of many firms better qualified to evaluate risk than BlackRock. I've noted its brilliance in the past, so I'd like to see it compete with the current rating oligopoly. I have little doubt that its talent far exceeds that found at the rating agencies.

I also like the list of the other names in the mix:

In addition to BlackRock, the insurance regulators also recently have talked to Pimco Advisory, part of Newport Beach, Calif., bond-powerhouse Pacific Investment Management Co., a unit of Allianz SE; Promontory Financial Group, a Washington, D.C., firm founded and headed by Eugene Ludwig, a former U.S. comptroller of the currency; and Andrew Davidson & Co., a 17-year-old New York firm that also has a specialty in evaluating complex structured securities, according to the regulators.



Investors and independent research firms evaluating risk. I could almost cry from happiness. Let's hope the NAIC's experiment is a successful one and that the broader market notices. Only then can we really start celebrating.

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