Our rating process involves a comprehensive quantitative and qualitative analysis of a company's balance sheet strength, operating performance and business profile. This includes comparisons to peers and industry standards as well as assessments of an insurer's operating plans, philosophy and management. Read Best's Rating Scale and Related Definitions for complete details on Financial Strength or Issuer Credit and Debt Ratings.

Special Notice: Updated Terrorism-related SRQ Questions
In an effort to provide more time to all parties associated with the completion of A.M. Best's Supplemental Rating Questionnaire (SRQ), this subset of updated terrorism related questions is available ahead of the February 2008 release. For more information, or if you have questions, please contact your analyst.

Financial Strength Methodologies
The following methodologies offer an explanation of Best's Rating System and Procedures for assigning financial strength ratings. They cover Industry/Regional specific topics in detail such as the Objective of Best's Rating System, Best's Rating Scale, the Release and Assignment of Best's Ratings, Definitions and more.

• Property/Casualty (Non-Life) (July 23, 2007)
• Life, Health and HMO (July 17, 2007)
• Non-U.S. Domiciled Companies (October 26, 2007)
• U.K. Domiciled Companies (October 26, 2007)

Other Methodologies
Additional relevant methodologies published by A.M. Best are listed below. Please contact us if you have questions regarding these publications or cannot locate information on a specific topic.

• Best's Impairment Rate and Rating Transition Study - 1977 to 2007 (April 21, 2008) - This is the fifth study conducted by A.M. Best Co. on the long-term impairment of A.M. Best-related, U.S.-domiciled insurance companies.

• Update to BCAR for Life & Health Insurers (April 3, 2008) - A.M. Best has modified its Best's Capital Adequacy Ratio model for life and health insurers effective with year-end 2007 to enhance its accuracy in measuring balance sheet strength and operating risk.

• Life Settlement Securitization (March 24, 2008) - Read how A.M. Best Co. rates securities backed by life settlements (i.e. insurance policies bought in the secondary market).
  
  
• Rating Protected Cell Companies (March 4, 2008) - The purpose of this special report is to discuss how existing captive methodologies or other A.M. Best rating methodologies would apply to the rating analysis of some forms of protected cell companies.

• Takaful (Shari'a Compliant) Insurance Companies (February 11, 2008) - This report highlights the main issues arising when applying A.M. Best's rating methodology to takaful insurance companies. Takaful is clearly on the rise, particularly in the Middle East and Malaysia, but A.M. Best's main principles remain unchanged, regardless of the type of company analyzed.

• Risk Management and the Rating Process for Insurance Companies (January 25, 2008) - In this paper, A.M. Best explores the key risk management trends in the insurance industry and describes how risk management impacts the overall rating process and the development of capital requirements.

• Rating Natural Catastrophe Bonds (January 22, 2008) - Read our Quick Reference for a concise overview of Best's Rating Methodology on these structured debt instruments that transfer risks associated with low-frequency/high-severity events to investors.

• BCAR For Title Insurance Companies (December 6, 2007) - A.M. Best's interactive rating process for title insurance companies is intended to provide an opinion on a company's ability to meet its ongoing obligations to policyholders. The evaluation of a company's financial strength is based on an in-depth analysis of its balance sheet strength, operating performance and business profile.

• Best's Idealized Default Matrix (December 5, 2007) - provides the default table used by A.M. Best's Structured Finance Group for rating securities in structured transactions.
  
  

• Rating European Mutual Insurers (September 3, 2007) - This report outlines how A.M. Best applies its rating methodology to European mutual insurance companies. Throughout this methodology, the term "mutuals" will indicate any insurance company without capital stock and for which the ultimate control is vested in the policyholders.

• Securitization of Reinsurance Recoverables (August 20, 2007) - Read A.M. Best's methodology on how it rates securities collateralized by reinsurance obligations.

• Evaluating Health-Care Systems (June 19, 2007) - This report describes A.M. Best's methodology to evaluate a nonprofit health-care system's ("the system") overall creditworthiness, as well as the ability of the system to financially and strategically support its owned or affiliated health and captive insurance company(ies) and to potentially enhance the stand-alone issuer credit and financial strength ratings of these regulated subsidiaries.

• Assigning Public Data Ratings to U.K. Companies (May 21, 2007) - The purpose of this report is to provide transparency regarding A.M. Best Co.'s criteria for assigning Public Data Ratings to both life and non-life companies in the United Kingdom.

• A.M. Best's Liquidity Model for U.S. Life Insurers (April 20, 2007) - As part of its standard analytical review of all companies, A.M. Best has detailed discussions about management of liquidity risk. A.M. Best believes that the measurement of a company's liquidity is one of the most important factors in determining a life insurer's financial strength.

• Canadian Public Data Ratings, Property/Casualty (March 26, 2007) - A.M. Best Co. has been assigning Public Data Ratings to Canadian property and casualty companies since 2000. While the Canadian property and casualty industry has been more stable than the U.S. industry, there still have been some issues that have challenged the financial strength of individual companies.

• A.M. Best's Title Insurance Rating Methodology (March 19, 2007) - A.M. Best's rating process for title insurance companies is intended to evaluate a company's ability to meet its ongoing obligations to policyholders. The criteria to evaluate a company are based on in-depth analysis of both quantitative and qualitative measures, including balance-sheet strength, operating performance and business profile.

• Understanding Universal BCAR - A.M. Best's Capital Adequacy Ratio for Insurers (March 19, 2007) - The purpose of this report is to document the existing criteria and methodology related to A.M. Best's Universal BCAR model. The objective of A.M. Best's rating system is to provide an opinion of an insurer's financial strength and ability to meet ongoing obligations to policyholders.

• Rating Methodology for Banks (February 27, 2007) - The bank rating methodology outlines the principles and analytical criteria underpinning A.M. Best's rating opinion on a bank, its parent holding company and other affiliated banking entities as may be necessary as part of A.M. Best's ratings on a banking group.
  
  
• Rating Implications of Recent Florida Legislation (February 26, 2007) - In response to the recently passed insurance legislation in Florida and in the ongoing effort to maintain rating transparency, A.M. Best Co. comments on both the near-term and longer-term impact of this legislation on the financial strength ratings of primary and reinsurance companies.

• Frequently Asked Questions: Rating Start Up Reinsurers (November 15, 2006) - In response to the many questions we have received regarding the rating of start-up reinsurers, the following Frequently Asked Questions report has been prepared. This FAQ should be used in conjunction with other A.M. Best sources of information on start-ups.

• Review of BCAR Treatment for XXX Captives (November 13, 2006) - Over the past several years, direct writers have been searching for effective capital solutions to fund reserves for level premium term products subject to the reserve requirements of the Valuation of Life Insurance Policies Model Regulation, more commonly known as Regulation XXX.

• A.M. Best's Perspective on Operating Leverage (November 3, 2006) - In forming an overall opinion of a company's balance sheet strength --- the most important area in determining a company's ability to meet its current and ongoing obligations to policyholders --- A.M. Best Co. reviews the organization's financial leverage

• Assessing the "Tail Risk" of Sidecars (October 9, 2006) - Read how A.M. Best determines the amount of "tail risk" that is associated with sidecars. Tail risk is the risk that will be borne by the ceding insurer/reinsurer if the sidecar is not sufficiently capitalized.

• Gauging the Basis Risk of Catastrophe Bonds (September 25, 2006) - Read how A.M. Best determines the basis risk inherent in parametric catastrophe bonds. Read our Quick Reference, Rating Natural Catastrophe Bonds, for a concise overview of Best's Rating Methodology on these structured debt instruments.

• Rating Health Insurance Companies (September 8, 2006) - The purpose of this report is to provide transparency regarding A.M. Best Co.'s criteria for assigning financial strength ratings (FSR) to health insurance carriers, including traditional life/health insurance companies, health maintenance organizations (HMOs) and Blue Cross and Blue Shield plans. This methodology also updates A.M. Best's previously published health-care rating methodology to reflect changes in the marketplace.

• Rating Sidecars (June 28, 2006) - Read our Quick Reference for a concise overview of Best's Rating Methodology on property and casualty "sidecars" and their use as an attractive alternative to traditional retrocession.

• Catastrophe Risk Management Incorporated Within Rating Analysis (May 12, 2006) - A.M. The tumultuous storm seasons of 2004 and 2005 have heightened the importance of catastrophe risk management. Most companies had modeled their catastrophe exposures, but some didn't consider the quality of the data used in the model or the parameters of the model that can greatly change the output.
  
  
• Catastrophe Analysis in A.M. Best Ratings (April 12, 2006) - A.M. Best considers catastrophic loss, both natural and man-made, to be the No.1 threat to the financial strength and credit quality of property and casualty insurers due to the significant, rapid and unexpected impact that can occur.
  
  
• A.M. Best Comments on Enterprise Risk Management and Capital Models (February 3, 2006) - Enterprise risk management is the broad description of the further integration of risk management across an organization's operations, along with greater sophistication in the modeling of the organization's risk.
  
  
• A.M. Best's Rating Methodology for Captive Insurance Companies (November 2005) - Read how the monitoring of current developments as they may affect a captive company are critical to the value and efficacy of the A.M. Best rating process
  
  
• Rating Surplus Note And Insurance Trust-Preferred CDOs (July 25, 2005) - Read how A.M. Best rates securities backed by Surplus Notes and Insurance Trust-Preferreds (Securitization of surplus notes and insurance trust-preferreds).
  
  
• Analyzing Finance Companies (June 3, 2005) - The analytical framework for assessing finance companies highlights special issues particular to the finance industry, according to A.M. Best Co.'s latest rating methodology, Analyzing Finance Companies.
  
  
• Equity Credit for Hybrid Securities (April 4, 2005) - A.M. Best has released its methodology for the treatment of equity credit for hybrid securities issued by insurance-related entities, which highlights the importance of debt-service capabilities.
  
  
• Understanding BCAR for Canadian Property/Casualty Insurers (April 4, 2005) - A.M. Best Co. has released a rating methodology addressing the quantitative and qualitative factors affecting ratings of Canadian property/casualty companies.
  
  
• Analyzing Commercial Banking Operations (March 28, 2005) - Globally, increasing numbers of banks and insurers have expanded operations into each other's industry. Based on this growing trend, A.M. Best Co. has released a methodology for evaluating the financial health of the banking operations of insurance-related enterprises.
  
  
• Rating Members of Insurance Groups (January 31, 2005) - read how the dynamic within insurance groups and the relationships between affiliates continues to evolve.
  
  
• Evaluating Health-Care Systems (January 24, 2005) - A.M. Best Co. evaluates the ability of not-for-profit U.S. hospitals and health-care systems to support their health maintenance organizations and captive insurance company subsidiaries.
  
  
• A.M. Best's Ratings & the Treatment of Debt (October 11, 2004) - provides specific information outlining the relationship between Best's Financial Strength Ratings and Best's Debt Ratings.
  
  
• Rating Funding Agreement-Backed Securities (October 4, 2004) - Read how A.M. Best Co. approaches the rating of securities and related programs that are backed by funding agreements issued by U.S. life insurers.
  
  
• Rating New Company Formations (March 8, 2004) - read our rating methodology for new insurance and reinsurance companies as A.M. Best strives to meet the demand for financial information on these and other risk-assuming vehicles.
  
  
• Understanding BCAR for Life/Health (February 9, 2004) - read what's behind Best's Capital Adequacy Ratio for Life/Health insurers and its implication for ratings.
  
  
• Rating Closed Block Monetizations (December 15, 2003) - find out how and why some publicly traded life insurance companies are exploring this option.
  
  
• Understanding BCAR (November 24, 2003) - read what's behind Best's Capital Adequacy Ratio for Property/Casualty insurers and its implication for ratings.
  
  
• Country Risk Methodology (November 18, 2002) - find out how A.M. Best uses country risk analysis to determine how the factors outside an insurer's control affect its ability to meet its obligations to its policyholders.
  
  
• A.M. Best Rating Methodology for Lloyds Syndicates (November 11, 2001) - provides an overview for Best's Rating of Lloyd's and helps in understanding the unique structure of Lloyd's.
  
  
• Commercial Paper Methodology (August, 2001) - read our analysis on the rating process behind short-term debt obligations.