A.M. Best Company announced that, effective January 2, 2007, it is changing the Financial Strength Rating Descriptor for its “B++” and “B+” ratings on insurance companies. “The reason for the changes is to make the Rating Descriptor consistent with the existing Rating Definition across all rating categories,” said the bulletin.
In an excerpt from the “Guide to Best’s Ratings” it highlighted the changes as follows: “A Best’s Financial Strength Rating (FSR) is an opinion as to an insurer’s financial strength and ability to meet its ongoing obligations to policyholders. Old New Rating Descriptor Definition – ‘B++,’ ‘B+’ Very Good Assigned to companies that have, in our opinion, a good ability to meet their ongoing obligations to policyholders.”
“Note: This change in the Rating Descriptor for insurance companies also applies to the corresponding Best’s Long-Term Issuer Credit Rating (ICR) of bbb+, bbb, and bbb-.The changes to the Rating Descriptor do not, in any way, represent a change in A.M. Best’s opinion of the relative financial strength of any insurer or issuer. As such, B++ and B+ FSRs, and bbb+, bbb, and bbb- ICRs on insurers, are still considered secure ratings.”
The updated Financial Strength Rating Descriptors on insurance companies will be reflected in all electronic and print publications released on or after January 2, 2007.