OLDWICK, N.J.--(BUSINESS WIRE)--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 email@example.com no later than June 2, 2014.
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