A.M. Best Co. is requesting comments from market participants in
the insurance industry and other interested parties on the draft
criteria report, "Analyzing Insurance Holding Company Liquidity"
(updates version formerly entitled, "Analyzing Commercial Paper
Programs" dated January 13, 2012).
This update expands upon and replaces the criteria, "Analyzing
Commercial Paper Programs" and describes how A.M. Best's analysts review
current and projected sources and uses of cash for the holding company
to evaluate its liquidity profile. An analysis of insurance holding
company liquidity is an integral part of understanding potential
stresses on an insurance operating company, because the key source of
holding company liquidity is generally the dividends received from owned
insurance operating companies. Holding companies possessing a good
liquidity profile genrally are viewed more favorably by A.M. Best's
analysts because of perceived improved financial flexibility. Diverse
sources of funds, including the maintenance of assets identified as cash
equivalents, will assist holding companies in meeting their operating
needs, funding subsidiaries to support growth initiatives, meeting
short-term debt obligations of both principal and interest expense and
potentially returning cash to shareholders in the form of cash dividends
and/or share repurchases.
These changes are part of A.M. Best's continual review of its rating
methodology and are not considered material or expected to affect
to download a PDF copy of each report.
Written comments should be submitted by email to email@example.com
no later than March 22, 2013.
Founded in 1899, 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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS
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