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When you invest in a policy you're preparing
for the future: therefor it's important the company you
place a contract with be there should the need arise to
make a claim.
There
are primarily six companies which rate the financial strength
of insurance companies: AM Best, Demotech, Fitch, Moody's,
Standard & Poor's, Weiss. Ratings are based on
a variety of factors such as the company's earnings, assets,
liabilities, liquidity, investment performance and so forth.
While the rating may be relied upon as an independent assessment,
it should should not be considered as a recommendation
nor as a judgement of customer satisfaction. Rating
companies offer no warranty attached to a rating.
The typical rating is based upon an alpha-numeric system,
and may include positive or negative indicators such as
+ or -. AM Best describes it's ratings in a press
release as: (dated 07-15-03)
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A++ |
A+ |
Superior |
AM Best has provided a free search engine tool
for quick reference. Please, try it now
...
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A |
A- |
Excellent |
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B++ |
B+ |
Very
Good |
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B |
B- |
Fair |
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C++ |
C+ |
Marginal |
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C |
C- |
Weak |
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D |
Poor |
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E |
Under
Regulatory Supervision |
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F |
In
Liquidation |
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S |
Suspended |
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D |
Payment
default on financial commitments |
Standard & Poor's describes it's ratings in a press release
as: (dated 10-10-03)
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AAA |
Extremely
strong capacity to meet financial commitments. Highest
rating.
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AA |
Very
strong capacity to meet financial commitments.
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A |
Strong
capacity to meet financial commitments, but somewhat
susceptible
to adverse economic conditions and changes in circumstances.
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BBB |
Adequate
capacity to meet financial commitments, but more subject
to adverse economic conditions
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BBB- |
this is the
lowest rating before non-investment grade.
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BB |
Less
vulnerable in the near-term but faces major ongoing
uncertainties to adverse business, financial and economic
conditions
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B |
More
vulnerable to adverse business, financial and economic
conditions but currently has the capacity to meet financial
commitments
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CCC |
Currently
vulnerable and dependent on favorable business, financial
and economic conditions to meet financial commitments
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CC |
Currently
highly vulnerable
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C |
A
bankruptcy petition has been filed or similar action
taken but payments or financial commitments are continued
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D |
Payment
default on financial commitments |
Ratings
in the 'AAA,' 'AA,' 'A' and 'BBB' categories are regarded
by the market as investment grade. Ratings in the 'BB,'
'B,' 'CCC,' 'CC' and 'C' categories are regarded as having
significant speculative characteristics. Ratings from 'AA'
to 'CCC' may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major
rating categories.
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