A.M. Best Co. is requesting comments from market participants in
the insurance industry and other interested parties on the new draft
criteria report, "Evaluating U.S. Surplus Notes."
U.S. surplus notes (surplus notes) are unsecured indentures that may be
issued directly by insurance operating companies domiciled in the United
States. Surplus notes are closely regulated and deeply subordinated to
policyholder claims, and therefore are reported as part of
policyholders' surplus despite their debt-like features. The new draft
report, "Evaluating U.S. Surplus Notes," has been created to improve the
transparency of A.M. Best's approach to analyzing surplus notes. The
draft report consolidates into a single document the approach to
determining the equity and debt characteristics of surplus notes, the
teatment afforded to surplus notes in Best's Capital Adequacy Ratio
(BCAR), the treatment of surplus notes in A.M. Best's financial leverage
calculations, and A.M. Best's approach to rating surplus notes issued by
insurance companies. Visit www.ambest.com/ratings/methodology
to download a PDF copy of the draft report.
This new criteria report is part of A.M. Best's continual review of its
rating methodology and is not expected to affect existing ratings.
Written comments should be submitted by email to email@example.com
no later than Feb. 20, 2014. The details of any comments received may be
made public unless specifically requested to be kept confidential.
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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS
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