A.M. Best Requests Comments on Draft Criteria: Rating Surety Companies

OLDWICK, N.J.--()--A.M. Best is requesting comments from market participants in the insurance industry and other interested parties on the draft criteria report “Rating Surety Companies.”

On January 18, 2013, A.M. Best requested comments on the draft criteria report with the same title. This current draft criteria report reflects revisions A.M. Best has made to the original draft criteria report after receiving comments and additional information from market participants. The revisions were extensive enough to warrant a re-issuance of a new draft criteria report.

The changes include a revised process for rating surety companies that are bail bond insurers or contract surety insurers. The draft provides more detail on the qualitative factors that will require greater focus in the rating evaluation of surety insurers. For bail bond insurers, premiums net of commission will become the basis for pricing risk in Best’s Capital Adequacy Ratio (BCAR), a potential net loss from a large agent will be used in the published BCAR and a stress test will be performed assuming another potential loss from a second large agent. For contract surety insurers, a potential net loss from a large principal will be used in the published BCAR, and a stress test will be performed assuming another potential loss from a second large principal.

Written comments should be submitted by email to rating.methodology@ambest.com no later than June 2, 2014.

Visit www.ambest.com/ratings/methodology to download a PDF copy of each report.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Gerard Altonji, 908-439-2200, ext. 5626
Assistant Vice President
gerard.altonji@ambest.com
or
Robert Valenta, 908-439-2200, ext. 5291
Senior Financial Analyst
robert.valenta@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Gerard Altonji, 908-439-2200, ext. 5626
Assistant Vice President
gerard.altonji@ambest.com
or
Robert Valenta, 908-439-2200, ext. 5291
Senior Financial Analyst
robert.valenta@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com