A.M. Best Requests Comments on Draft Criteria: A.M. Best’s Perspective on Operating Leverage

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best is requesting comments from market participants in the insurance industry and other interested parties on the draft criteria report, “A.M. Best’s Perspective on Operating Leverage” (updates version dated Jan. 17, 2012).

The proposed changes include the reduction in the maximum operating company threshold to 20% from 50% of reserves on a stand-alone operating company basis; however, the holding company (consolidated view) remains unchanged at 30% of GAAP liabilities. The changes also clarify operating leverage treatment related to redundant reserves (AXX and XXX) while reflecting more recent types of financing and makes a minor change in the definition of qualifying reserves. Additionally, the criteria now will apply to life/health and property/casualty companies. Lastly, the criteria provides additional clarification on the requirements for treating FHLB borrowings as operating leverage.

This draft criteria report is available at ambest.com/ratings/methodology.

These updates are part of A.M. Best’s continual review of its rating methodology and are not expected to affect ratings. Written comments should be submitted by e-mail to [email protected] no later than Nov. 6, 2015. The details of any comments received may be made public unless specifically requested to be kept confidential.

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

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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A.M. Best
Rosemarie Mirabella, 908-439-2200, ext. 5892
Assistant Vice President
[email protected]
or
George Hansen, 908-439-2200, ext. 5469
Assistant Vice President
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or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
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or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best

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