A.M. Best Releases New Criteria: Rating Reinsurance/Insurance Transformer Vehicles

A.M. Best has released the new criteria report, “Rating Reinsurance/Insurance Transformer Vehicles.”

The criteria report describes A.M. Best’s rating approach and highlights rating considerations unique to the evaluation of transformer vehicles and the process by which the transformer vehicles act as an intermediary to transfer insurance risks to various counterparties (i.e., reinsurance and non-insurance entities). A 30-day public consultation for this new criteria report was opened on Aug. 1, 2014, and no comments were received. No changes have been made to the final version of this criteria report as a result of the public consultation.

This new criteria generally applies to the rating of various types of insurers/reinsurers that are licensed or designated as special purpose insurers/vehicles in various regulatory jurisdictions that primarily assume and cede insurance exposures funded by various capital-market instruments.

Because insurance transformer vehicles are corporate legal entities that have characteristics and features similar to insurance companies, Best’s Credit Rating Methodology (BCRM) remains the governing document that provides a comprehensive explanation of A.M. Best’s general rating process including the complete set of rating criteria employed.

Visit www.ambest.com/ratings/methodology to download a copy of the report.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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