Rating Service Definitions

A.M. Best and its subsidiaries assign various types of Best's Credit Ratings. These include Financial Strength Ratings, Long Term and Short Term Issuer Credit Ratings, and Long Term and Short Term Debt Ratings on corporate securities and insurance-linked transactions. Best's Credit Ratings (which may be assigned on a public or private basis) are based on a comprehensive quantitative and qualitative evaluation of a company's balance sheet strength, operating performance and business profile, or when appropriate, the specific nature and details of a debt security. The Best Interactive Credit Rating Service does not consider hypothetical scenarios. As part of the interactive credit rating process, the primary source of the information reviewed comes from the entity's (or issuer's) annual (or quarterly, if available) financial statements, as filed with the regulatory agency of the state, province or country in which the company is domiciled. Other sources of information include, but are not limited to: interim management reports on emerging issues; supplemental information requested by A.M. Best and its subsidiaries; information provided through the annual rating meeting and other discussions with management; and information available in the public domain.

The foundation of Best's Interactive Credit Rating Service is an ongoing dialogue with the rated entity's (or issuer's) management, which is facilitated by Best's primary credit analysts. The primary credit analyst is charged with managing the ongoing credit rating relationship with company management and performing the fundamental credit analysis prescribed in our rating criteria. It is the primary credit analyst's responsibility to monitor the financial results and other significant developments for each rated entity, issuer, or security in his/her portfolio, and as appropriate, make recommendations on proposed rating actions to a rating committee. All Best's Credit Ratings are determined and assigned by a rating committee and not by any individual person. A Best's Insurance Report, including a rating rationale, is provided to support Best's rating opinions. The assignment of Best's Credit Ratings is governed by criteria, methodologies, policies and procedures that are overseen and approved by individuals who are independent from those who are responsible for the implementation of the rating process.

A Best's Credit Rating is a forward-looking independent opinion regarding an insurer's, issuer's or financial obligation's relative creditworthiness, which is subject to ongoing monitoring and surveillance. Because Best Credit Ratings are forward-looking, they cannot be considered to be facts or guarantees of future credit quality. Best's Credit Ratings are assigned using a number of simple, straight-forward scales, with each scale representing a rank ordering of our opinion of an insurer's, issuer's or financial obligation's creditworthiness. While Best's Credit Ratings reflect our opinions of relative creditworthiness at the time they are assigned, they are not indicators or predictors of defined impairment or default probabilities with respect to any specific insurer, issuer or financial obligation. Best's Credit Ratings are not investment advice, and as such, they are not intended to be utilized as a recommendation to purchase, hold or terminate any insurance policy, contract, security or any other financial obligation. All Best Credit Rating opinions are provided on a "as is" basis, without any express or implied warranty. A Best Credit Rating may be changed, suspended or withdrawn at any time (and for any reason) at the sole discretion of A.M. Best and its subsidiaries. The service is, neither in nature or content, a consulting or advisory service. A.M. Best Company and its subsidiaries offer no services to suggest or design a strategy on how to achieve a certain rating level or outcome.

The opinion is expressed as a range of rating outcomes which is an indication of a potential Best's Credit Rating, based primarily on key financial indicators and other data provided. The provided information is used by Best to run its proprietary capital model, Best's Capital Adequacy Ratio (BCAR), and perform other quantitative analysis. The analytics performed are heavily quantitative in nature, and as a result, the assessment does not generally involve significant interaction with company management.

Best's opinion is expressed as a range using our traditional credit rating scales, however, the RAS opinion is not a credit rating. All opinions rendered through this service are to be interpreted by the assessed entity as a preliminary indicator of Best's view of that company's rating prospects, including its relative strengths and weaknesses. The determination of all RAS opinions is made by a team of qualified credit analysts. Feedback is provided to support the RAS opinion. The opinions expressed in this service are non-binding as they are not determined by a rating committee, and are based on a point-in-time quantitative analysis that is more limited than the comprehensive qualitative and quantitative analysis performed for an interactive credit rating. Disclosure of the opinion of A.M. Best Company and its subsidiaries is limited to the entity's senior executives and advisors. Best's service is, neither in nature or content, a consulting or advisory service for applicants or related third parties. A.M. Best Company and its subsidiaries offer no services to suggest or design a strategy on how to achieve a certain rating level or outcome.

Hypothetical scenarios include, but are not limited to: mergers and acquisitions; significant asset divestitures or other restructuring of the insurer's invested asset portfolio; entering or exiting a major line of business, which may include an evaluation of the impact of financial projections related to the near-term and long-term profitability and risk-adjusted capital position of the insurer; stock buy-backs; significant capital restructuring, including demutualizations; significant issuance or retirement of debt and other securities that re-positions an insurer's capital structure; re-capitalization strategies; capital relief transactions; creation of a new holding company or operating affiliate.

Best's RES opinion(s) is expressed using our traditional credit rating scales, however, the RES opinion is not a credit rating. All opinions rendered through this service are to be interpreted by the assessed entity as a preliminary indicator of our view of the impact of the communicated hypothetical scenario(s) on the company's creditworthiness, including its relative strengths and weaknesses. The team of analysts responsible for performing this service is normally the same team responsible for supporting all the other rating decisions for the company. The determination and assignment of all RES opinions is made by a rating committee. Feedback is provided to support RES opinion(s). The opinions expressed in this service are non-binding as they are based on the review of hypothetical scenarios at a point-in-time. If the rated entity executes one of the communicated hypothetical scenarios, Best will evaluate the company's creditworthiness at that time and update the public credit rating opinion, if appropriate. Disclosure of the findings of A.M. Best Company and its subsidiaries related to the RES opinion(s) is limited to the entity's senior executives and advisors. Best's opinions relative to the RES service will remain confidential and unpublished. Best's service is, neither in nature or content, a consulting or advisory service for applicants or related third parties. A.M. Best Company and its subsidiaries offer no services to suggest or design a strategy on how to achieve a certain rating level or outcome.