OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has released updated drafts of Best’s Credit Rating Methodology (BCRM) and the criteria procedure for the U.S. property/casualty (P/C) Best’s Capital Adequacy Ratio (BCAR). A.M. Best has also simultaneously released proposed revisions to the criteria procedures for the U.S. and Canadian Life/Health and Universal BCAR.
A.M. Best is requesting comment from interested parties on these draft documents, which are available in the methodology section of A.M. Best’s website, by no later than March 1, 2017. Written comments should be submitted by e-mail to email@example.com.
The BCRM is a reorganization of the current methodology, utilizing a building block approach to provide greater detail, clarity and transparency to the rating analysis. The BCRM offers a forum for discussion with analytical staff and also will provide greater consistency in the rating process. While the methodology is being updated, the core components of the analytical process — a review of balance sheet strength, operating performance, business profile and enterprise risk management — remain as the key pillars and thus do not represent a fundamental change to the rating analysis.
The three proposed BCAR criteria procedure updates apply to:
- U.S. property/casualty companies;
- U.S. and Canadian life/ health companies;
- Insurance companies domiciled outside of the U.S. or Canada.
All companies that are evaluated using the BCAR model governed by these criteria procedures will receive their new BCAR output. Company management is encouraged to review their BCAR output, when received, in conjunction with the criteria procedure and the BCRM. A.M. Best expects to begin distributing the model output in the coming weeks.
Please see the Nov. 14, 2016, Best’s Briefing titled “Criteria Update: BCRM and BCAR” for a discussion of the most significant changes to the BCRM and U.S. P/C BCAR criteria procedure since the March 10, 2016, initial call for comment. The changes noted in the briefing incorporate A.M. Best’s review of industry feedback received. To access the full copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=255868.
For a more detailed video discussion on this subject with Matthew Mosher, executive vice president and chief operating officer of A.M. Best Rating Services, Inc., please visit http://www.ambest.com/v.asp?v=bcrm1116.
A.M. Best is planning a series of webinars for early December to discuss the proposed revisions to its BCRM and U.S. P/C BCAR, as well as those to its criteria procedures for the U.S. and Canadian Life/Health and Universal BCAR.
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