Ratings agency Moody’s has offered a note of hope to global life insurers and life reinsurers, saying the industry is strong and solvent.

The ratings agency has released a stress test on the industry that shows insurers are likely to keep their investment grade ratings.

“Most life insurance companies in our rated universe are believed to be well positioned to manage the liquidity needs at their operating companies, even under very stressful conditions,” Moody’s said.

It says this opinion is founded on the long-term nature of the policyholder obligations of typical life insurers; the asset liability management discipline practiced; the fact that many issuers have established alternative sources of liquidity; and because most insurers have built up their cash and short-term investment positions over the past year.

But Moody’s says the credit crisis and global recession has exposed the vulnerability of life insurers to downside “tail” risk scenarios.