Insurance Company Rating Systems
A.M. Best
| Grade | |
|---|---|
| A++/A+ | |
| Interpretation | Superior. Very strong ability to meet obligations. |
| A/A- | |
| Interpretation | Excellent. Strong ability ot meet obligations. |
| B++/B+ | |
| Interpretation | Good. Good ability to meet obligations. |
| B/B- | |
| Interpretation | Fair. Adequate ability to meet obligations. |
| C++/C+ | |
| Interpretation | Marginal. Reasonable ability to meet obligations. |
| C/C- | |
| Interpretation | Weak. Currently has the ability to meet obligations. |
| D | |
| Interpretation | Poor. Below minimum standards. |
| E | |
| Interpretation | Under regulatory supervision. |
| F | |
| Interpretation | In liquidation. |
| S | |
| Interpretation | Rating Suspended - usually due to insufficient information. |
| Grade | Interpretation |
|---|---|
| A++/A+ | Superior. Very strong ability to meet obligations. |
| A/A- | Excellent. Strong ability ot meet obligations. |
| B++/B+ | Good. Good ability to meet obligations. |
| B/B- | Fair. Adequate ability to meet obligations. |
| C++/C+ | Marginal. Reasonable ability to meet obligations. |
| C/C- | Weak. Currently has the ability to meet obligations. |
| D | Poor. Below minimum standards. |
| E | Under regulatory supervision. |
| F | In liquidation. |
| S | Rating Suspended - usually due to insufficient information. |
Standard and Poor's
| Grade | |
|---|---|
| AAA | |
| Interpretation | Extremely strong financial security. Highest safety. |
| AA+/AA/AA- | |
| Interpretation | Very strong financial security. Highly safe. |
| A+/A/A- | |
| Interpretation | Strong financial security. More susceptible to economic change that highly rated companies. |
| BBB+/BBB/BBB- | |
| Interpretation | Good financial security. More vulnerable to economic change than highly rated companies. |
| BB+/BB/BB- | |
| Interpretation | Marginal financial security. Ability to meet obligations may not be adequate for long-term policies. |
| B+/B/B- | |
| Interpretation | Week financial security. An unfavorable business environment will probably reduce its ability to meet obligations. |
| CCC+/CCC/CCC- | |
| Interpretation | Very weak. Currently able to meet obligations. Highly vulnerable to adverse economic conditions. |
| CC | |
| Interpretation | Extremely weak. Questionable ability to meet obligations. |
| R | |
| Interpretation | Regulatory action. Under supervision of insurance regulators. |
| NR | |
| Interpretation | Not rated. No opinion is expressed about the firm's financial condition. |
| Grade | Interpretation |
|---|---|
| AAA | Extremely strong financial security. Highest safety. |
| AA+/AA/AA- | Very strong financial security. Highly safe. |
| A+/A/A- | Strong financial security. More susceptible to economic change that highly rated companies. |
| BBB+/BBB/BBB- | Good financial security. More vulnerable to economic change than highly rated companies. |
| BB+/BB/BB- | Marginal financial security. Ability to meet obligations may not be adequate for long-term policies. |
| B+/B/B- | Week financial security. An unfavorable business environment will probably reduce its ability to meet obligations. |
| CCC+/CCC/CCC- | Very weak. Currently able to meet obligations. Highly vulnerable to adverse economic conditions. |
| CC | Extremely weak. Questionable ability to meet obligations. |
| R | Regulatory action. Under supervision of insurance regulators. |
| NR | Not rated. No opinion is expressed about the firm's financial condition. |
Standard and Poor's
| Grade | |
|---|---|
| AAA | |
| Interpretation | Extremely strong financial security. Highest safety. |
| AA+/AA/AA- | |
| Interpretation | Very strong financial security. Highly safe. |
| A+/A/A- | |
| Interpretation | Strong financial security. More susceptible to economic change that highly rated companies. |
| BBB+/BBB/BBB- | |
| Interpretation | Good financial security. More vulnerable to economic change than highly rated companies. |
| BB+/BB/BB- | |
| Interpretation | Marginal financial security. Ability to meet obligations may not be adequate for long-term policies. |
| B+/B/B- | |
| Interpretation | Week financial security. An unfavorable business environment will probably reduce its ability to meet obligations. |
| CCC+/CCC/CCC- | |
| Interpretation | Very weak. Currently able to meet obligations. Highly vulnerable to adverse economic conditions. |
| CC | |
| Interpretation | Extremely weak. Questionable ability to meet obligations. |
| R | |
| Interpretation | Regulatory action. Under supervision of insurance regulators. |
| NR | |
| Interpretation | Not rated. No opinion is expressed about the firm's financial condition. |
| Grade | Interpretation |
|---|---|
| AAA | Extremely strong financial security. Highest safety. |
| AA+/AA/AA- | Very strong financial security. Highly safe. |
| A+/A/A- | Strong financial security. More susceptible to economic change that highly rated companies. |
| BBB+/BBB/BBB- | Good financial security. More vulnerable to economic change than highly rated companies. |
| BB+/BB/BB- | Marginal financial security. Ability to meet obligations may not be adequate for long-term policies. |
| B+/B/B- | Week financial security. An unfavorable business environment will probably reduce its ability to meet obligations. |
| CCC+/CCC/CCC- | Very weak. Currently able to meet obligations. Highly vulnerable to adverse economic conditions. |
| CC | Extremely weak. Questionable ability to meet obligations. |
| R | Regulatory action. Under supervision of insurance regulators. |
| NR | Not rated. No opinion is expressed about the firm's financial condition. |
Moody's
| Grade | |
|---|---|
| Aaa | |
| Interpretation | Exceptional security. Unlikely to be affected by change. |
| Aa1/Aa2/Aa3 | |
| Interpretation | Excellent security. Lower than Aaa because long-term risks appear somewhat larger. |
| A1/A2/A3 | |
| Interpretation | Good security. Possibly susceptible to future impairment. |
| Baa1/Baa2/Baa3 | |
| Interpretation | Adequate security. Certain protective elements may be lacking. |
| Ba1/Ba2/Ba3 | |
| Interpretation | Questionable security. Ability to meet obligations may be moderate. |
| B1/B2/B3 | |
| Interpretation | Poor security. Assurance of punctual payment of obligations is small over the long run. |
| Caa | |
| Interpretation | Very poor security. There may be elements of danger regarding the payment of obligations. |
| Ca | |
| Interpretation | Extremely poor security. Companies are often in default. |
| C | |
| Interpretation | Lowest security. Extremely poor prospects of offering financial security. |
| Grade | Interpretation |
|---|---|
| Aaa | Exceptional security. Unlikely to be affected by change. |
| Aa1/Aa2/Aa3 | Excellent security. Lower than Aaa because long-term risks appear somewhat larger. |
| A1/A2/A3 | Good security. Possibly susceptible to future impairment. |
| Baa1/Baa2/Baa3 | Adequate security. Certain protective elements may be lacking. |
| Ba1/Ba2/Ba3 | Questionable security. Ability to meet obligations may be moderate. |
| B1/B2/B3 | Poor security. Assurance of punctual payment of obligations is small over the long run. |
| Caa | Very poor security. There may be elements of danger regarding the payment of obligations. |
| Ca | Extremely poor security. Companies are often in default. |
| C | Lowest security. Extremely poor prospects of offering financial security. |
Fitch
| Grade | |
|---|---|
| AAA | |
| Interpretation | Exceptionally strong. Unlikely to be affected by change. |
| AA+/AA/AA- | |
| Interpretation | Very strong. Moderate risk factors. Very strong ability to meet obligations. |
| A+/A/A- | |
| Interpretation | Strong. Moderate risk factors. Strong ability to meet obligations. |
| BBB+/BBB/BBB- | |
| Interpretation | Good. Risk factors may be somewhat high. Good ability to meet obligations. |
| BB+/BB/BB- | |
| Interpretation | Moderately weak. Uncertain ability to meeto obligations. |
| B+/B/B- | |
| Interpretation | Weak. Poor ability to meet obligations. |
| CCC+/CCC/CCC-/CC+/C/C- | |
| Interpretation | Very weak. Insurers in any of these ratings viewed as having poor ability to meet obligations. |
| DDD/DD/D | |
| Interpretation | Distressed. Insurers have either failed to meet obligations or are under regulatory supervision/intervention. |
| NR | |
| Interpretation | Not rated. |
| Grade | Interpretation |
|---|---|
| AAA | Exceptionally strong. Unlikely to be affected by change. |
| AA+/AA/AA- | Very strong. Moderate risk factors. Very strong ability to meet obligations. |
| A+/A/A- | Strong. Moderate risk factors. Strong ability to meet obligations. |
| BBB+/BBB/BBB- | Good. Risk factors may be somewhat high. Good ability to meet obligations. |
| BB+/BB/BB- | Moderately weak. Uncertain ability to meeto obligations. |
| B+/B/B- | Weak. Poor ability to meet obligations. |
| CCC+/CCC/CCC-/CC+/C/C- | Very weak. Insurers in any of these ratings viewed as having poor ability to meet obligations. |
| DDD/DD/D | Distressed. Insurers have either failed to meet obligations or are under regulatory supervision/intervention. |
| NR | Not rated. |
TheStreet.com Ratings, Inc.
| Grade | |
|---|---|
| A+/A/A- | |
| Interpretation | Excellent financial security. Strong ability to deal with economic adversity. |
| B+/B/B- | |
| Interpretation | Good financial security. Severe economic conditions may effect this company. |
| C+/C/C- | |
| Interpretation | Fair financial security. Susceptible to downturns in the economy. |
| D+/D/D- | |
| Interpretation | Weak financial security. Could impact policyholders. |
| E+/E | |
| Interpretation | Very weak financial security. Significant risk, even in a stable economy. |
| F | |
| Interpretation | Failed. Under supervision of state insurance commissioners. |
| U | |
| Interpretation | Unrated. |
| Grade | Interpretation |
|---|---|
| A+/A/A- | Excellent financial security. Strong ability to deal with economic adversity. |
| B+/B/B- | Good financial security. Severe economic conditions may effect this company. |
| C+/C/C- | Fair financial security. Susceptible to downturns in the economy. |
| D+/D/D- | Weak financial security. Could impact policyholders. |
| E+/E | Very weak financial security. Significant risk, even in a stable economy. |
| F | Failed. Under supervision of state insurance commissioners. |
| U | Unrated. |
Note: Some of the classifications of the above rating companies are broken down into more levels than illustrated. The financial strength of an insurance company is a very important factor to consider in purchasing life insurance or annuities .
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