This page contains a Flash digital edition of a book.
Insurance Ratings Definitions Insurer Financial Strength Ratings


A Standard & Poor’s Insurer Financial Strength Rating is a current opinion of the financial security characteristics of an insurance organization with respect to its ability to pay under its insurance policies and contracts in accordance with their terms. Insurer Financial Strength Ratings are also assigned to HMOs and similar health plans with respect to their ability to pay under their policies and contracts in accordance with their terms. This opinion is not specific to any particular policy or contract, nor does it address the suitability of a particular policy or contract for a specific purpose or purchaser. Furthermore, the opinion does not take into account deductibles, surrender or cancellation penalties, timeliness of payment, nor the likelihood of the use of a defense such as fraud to deny claims. For organizations with cross- border or multinational operations, including those conducted by subsidiaries or branch offices, the ratings do not take into account potential that may exist for foreign exchange restrictions to prevent financial obligations from being met.


Insurer Financial Strength Ratings are based on information furnished by rated organizations or obtained by Standard & Poor’s from other sources it considers reliable. Standard & Poor’s does not perform an audit in connection with any rating and may on occasion rely on unaudited financial information. Ratings may be changed, suspended, or withdrawn as a result of changes in or unavailability of such information, or based on other circumstances.


Insurer Financial Strength Ratings do not refer to an organization’s ability to meet nonpolicy (i.e. debt) obligations.


Insurer Financial Enhancement Ratings


A Standard & Poor’s Insurer Financial Enhancement Rating is a current opinion of the creditworthiness of an insurer with respect to insurance policies or other financial obligations that are predominantly used as credit enhancement and/or financial guaranties in Standard & Poor’s rated transactions. When assigning an Insurer Financial Enhancement Rating, Standard & Poor’s analysis focuses on capital, liquidity and company commitment necessary to support a credit enhancement or financial guaranty business. The Insurer Financial Enhancement Rating is not a recommendation to purchase, sell, or hold a financial obligation, inasmuch as it does not comment as to market price or suitability for a particular investor.


Insurer Financial Enhancement Ratings are based on information furnished by the insurers or obtained by Standard & Poor’s from other sources it considers reliable. Standard & Poor’s


96


does not perform an audit in connection with any credit rating and may, on occasion, rely on unaudited financial information. Insurer Financial Enhancement Ratings may be changed, suspended, or withdrawn as a result of changes in, or unavailability of, such information or based on other circumstances. Insurer Financial Enhancement Ratings are based, in varying degrees, on all of the following considerations:  Likelihood of payment capacity and willingness of the insurer to meet its financial commitment on an obligation in accordance with the terms of the obligation;


 Nature of and provisions of the obligations; and  Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights.


Global Reinsurance Highlights 2014


Assignment of ratings to debt issued by insurers or to debt issues that are fully or partially supported by insurance policies, contracts, or guaranties is a separate process from the determination of Insurer Financial Strength Ratings, and follows procedures consistent with issue credit rating definitions and practices. Insurer Financial Strength Ratings are not a recommendation to purchase or discontinue any policy or contract issued by an insurer or to buy, hold, or sell any security issued by an insurer. An Insurer Financial Strength Rating is not a guaranty of an insurer’s financial strength or security. ‘pi’ ratings, denoted with a ‘pi’ subscript, are Insurer Financial Strength Ratings based on an analysis of an insurer’s published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer’s management and are therefore based on less comprehensive information than ratings without a ‘pi’ subscript. ‘pi’ ratings are reviewed annually based on a new year’s financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer’s financial security occurs. Ratings with a ‘pi’ subscript are not subject to potential CreditWatch listings. Ratings with a ‘pi’ subscript generally are not modified with ‘+’ or ‘-’ designations. However, such designations may be assigned when the insurer’s financial strength rating is constrained by sovereign risk or the credit quality of a parent company or affiliated group.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100