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After being criticized for turning down an invitation to attend a planned meeting of insurance regulators, Moody's Investors Service, a unit of Moody's Corp. (MCO), changed course and said it will attend a Thursday meeting of the National Association of Insurance Commissioners, or NAIC.

The meeting comes as the NAIC considers alternatives to relying on ratings agency grading of securities. Rival rating agencies Standard & Poor's, Fitch Ratings, and DBRS Ltd. were scheduled to speak at the meeting but, until mid-morning Monday, Moody's had declined the invitation, which prompted two members of the committee to suggest Moody's could suffer as a result.

After Moody's changed course and said it would attend, James J. Wrynn, New York's insurance superintendent and co-chair of the NAIC's rating agency working group, said in a statement that he was pleased by the change of heart.

"Correcting the mistakes that led to the financial crisis is in everyone's interest, and insurance regulators will benefit from the rating agencies' insight as we work to keep the insurance industry strong and protect policyholders," he said in the statement, issued Monday.

Hampton Finer, New York's deputy insurance superintendent, had said over the weekend that Moody's refusal to attend the hearing could result in the company being taken off the acceptable rating organizations list for NAIC, the organization that represents state insurance regulators, Reuters reported Saturday.

Michael McRaith, director of the Illinois Division of Insurance and chair of the rating agency group of the NAIC, said a decision by Moody's not to appear would be considered a "strategic decision" that could have negative repercussions for Moody's.

As of early Monday morning, Moody's had said it wouldn't attend, McRaith said. By mid-morning, he said Moody's changed course and told the group it will appear at the Thursday meeting in Washington D.C.

The rating agency working group has been re-evaluating regulators' reliance on rating agencies after the economic downturn resulted in ratings being slashed for many securities, forcing some insurers to raise more capital to hold against the downgraded securities. Insurance regulators use credit ratings to help determine capital-reserving levels for insurance companies that hold nearly $3 trillion in rated bonds.

The group will evaluate the effect of the use of agency ratings on "public confidence and public perception of regulatory oversight quality of insurance," according to information on the NAIC's Web site.

Shares of Moody's traded down 3.8% recently to $22.69. McGraw-Hill Cos. (MHP), which owns Standard & Poor's, recently traded down 1.6% to $26.37.

-By Lavonne Kuykendall, Dow Jones Newswires; 312-750-4141; lavonne.kuykendall@dowjones.com