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A.M. BEST INSTITUTES 'SECURE' AND 'VULNERABLE' RATING CATEGORIES; DESIGNATES 'FINANCIAL PERFORMANCE RATING'

 OLDWICK, N.J., April 18 /PRNewswire/ -- A.M. Best Company has introduced a new plan of assessing the financial strength of an insurance company by classifying insurers' Best's Ratings as either "Secure" or "Vulnerable." "Secure" ratings range from "A++" and "A+" (Superior) to "B++" and "B+" (Very Good), while "Vulnerable" ratings range from "B" and "B-" (Adequate) to "F" (In Liquidation). The new designations take effect with the 1994 rating season.
 The new classifications will provide a user with an immediate gauge of how A.M. Best views a company's financial ability to meet its obligations to policyholders. The designations also will allow for easier comparison of a company's claims-paying ability between the various rating agencies. For a more complete understanding of how A.M. Best views a company's financial strength, the user should refer to the complete definition of the company's assigned rating, its rating rationale and its full report.
 In addition, A.M. Best has changed the description of the "B" and "B-" ratings category from "Good" to "Adequate," as well as modified the "D" (Below Minimum Standards) rating category to "Very Vulnerable." These changes provide for greater clarity and consistency with our new "Secure" and "Vulnerable" rating designations.
 Also, the Financial Performance Index, or FPI, has been renamed the Financial Performance Rating, or FPR. The FPR was introduced in 1989 as an opinion of the financial strength of a company designated either "NA-2" (Less than Minimum Size) or "NA-3" (Insufficient Operating Experience). The FPR also has been endorsed by secondary mortgage market lenders, Fannie Mae and Freddie Mac, as an acceptable financial strength rating for homeowner insurance policies. Since its introduction, over 100 FPR-rated companies have subsequently been given a Best's letter rating. As companies graduate to a Best's letter rating, a very high correlation exists between "Strong" (8 & 9) and "Above Average" (6 & 7) FPR ratings to our "Secure" rating levels of "A++" (Superior) to "B+" (Very Good).
 For a copy of the new "Explanations of Best's Ratings," contact Rhonda J. Ruch at 908-439-2200, x5684.
 -0- 4/18/94
 /CONTACT: Larry G. Mayewski, 908-439-2200, x5643, or John H. Snyder, 908-439-2200, x5449, both of A.M. Best/


CO: A.M. Best Company ST: New Jersey IN: INS SU: PDT

CB -- NY058 -- 7639 04/18/94 11:40 EDT
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Publication:PR Newswire
Date:Apr 18, 1994
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