A or B Rated

[Newby]

There are way more limits on the state guarantees than FDIC. If the insured ever moves out of Indiana or if they were not a resident of Indiana when they bought the policy, they are not covered by our state guarantee program. For instance, I'm right on the state lines and my main office is in Indiana. I've had Kentucky residents come to my Indiana office to buy life insurance since that's where they shop and go to restaurants, movies, etc.

If they do that they are not covered by Indiana's or Kentucky's state guarantee if I understand it right.

 

[TwiLight]

People also forget that the FDIC insurance can take a long time to pay under their 'As Soon As Possible' definition. So, what if there is a financial collapse, it will effect the FDIC's ability to pay just as the insurance companies ability to get money from the Guarantee Association..... So, a B rating and up should not be an issue.

Remember, some of the largest insurers are the BLUES for health insurance and most of them have "C" ratings with AM Best.

Ratings from Best are heavily skewed based on the products they sell. If a company sells mainly annuities, it will be tough for it to get higher than an A- rating unless it is diversified into fixed premium life contracts (UL and WL). If a company is only concentrating on FE it will also have a hard time with maintaining an A- rating or better. FE is not a persistent business and heavy dependence will scare the rating companies. We all know the RNA situation. That was a direct result of a company pulling back the rapid growth in FE.

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[Larry Tew]

Ratings from Best are heavily skewed based on the products they sell. If a company sells mainly annuities, it will be tough for it to get higher than an A- rating unless it is diversified into fixed premium life contracts (UL and WL).

Jackson is all annuity now and has strong ratings (A+ Best) as well as their S&P.

 

[rousemark]

I know many of the agents here were not around in the 70s and 80s when companies were failing left and right. It seems there were as many companies with A and A+ (there was no A++ when I started) than there were companies with lower ratings. The largest of those was Mutual Benefit, an old line, Blue Chip mutual company ranked right up there with NYL and NWM.

Kentucky Central is another that comes to mind. A staid old home service company with a sterling reputation for years.

Another company was Settlers Life, an A rated company that was forced into receivership due to the fraud perpetrated upon it by Martin Frankle. They reopened under the NGL banner have only recently regained their A rating but I was never uncomfortable writing for them when their rating was B. They are still the same company with the same philosophy and the same product.

I was contracted with a couple of the companies in addition to Settlers that closed during the 80s (one was a Jack Londen Comapny, Legacy Life) but none of my life clients ever lost a dime.(fortunately they did not have UL polices) In every case, the policies were taken over by another company. And, when it comes to FE WL policies you can almost guarantee that would continue to be true. FE companies seldom get into trouble because the product is not profitable, it is usually because of their investment strategy. In Settlers case, it involved a health line and not thier FE product.

Another issue is ratings are all over the place. Weiss, Best, Standard Analytical, Dunn and Bradstreet.. whose ratings are you going to accept? Weiss has a better record than Best but most agents never heard of them.

A company can have an A rating one day and a B rating the next. So are you going to go back to your clients and replace the business you wrote when the company was A or are you going to leave them "at risk" (others description, not mine) with a dreaded B rated company?

On the other hand, a company can go from B to A overnight. Are you now going to run out and write tons of business with the company tomorrow that you refused to rep yesterday?

Newby asked about a non rated company and I think I know the company he has ion mind. Personally, I would have no problems placing business with them. They are a publicly traded company and seem to have a good track record.

The state departments of insurance have the responsibility to regulate the companies they approve and they made the determination a company is financially stable at the time of the company's admittance into the state.






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[Jerard]

I know many of the agents here were not around in the 70s and 80s when companies were failing left and right. It seems there were as many companies with A and A+ (there was no A++ when I started) than there were companies with lower ratings. The largest of those was Mutual Benefit, an old line, Blue Chip mutual company ranked right up there with NYL and NWM.

Kentucky Central is another that comes to mind. A staid old home service company with a sterling reputation for years.

Another company was Settlers Life, an A rated company that was forced into receivership due to the fraud perpetrated upon it by Martin Frankle. They reopened under the NGL banner have only recently regained their A rating but I was never uncomfortable writing for them when their rating was B. They are still the same company with the same philosophy and the same product.

I was contracted with a couple of the companies in addition to Settlers that closed during the 80s (one was a Jack Londen Comapny, Legacy Life) but none of my life clients ever lost a dime.(fortunately they did not have UL polices) In every case, the policies were taken over by another company. And, when it comes to FE WL policies you can almost guarantee that would continue to be true. FE companies seldom get into trouble because the product is not profitable, it is usually because of their investment strategy. In Settlers case, it involved a health line and not thier FE product.

Another issue is ratings are all over the place. Weiss, Best, Standard Analytical, Dunn and Bradstreet.. whose ratings are you going to accept? Weiss has a better record than Best but most agents never heard of them.

A company can have an A rating one day and a B rating the next. So are you going to go back to your clients and replace the business you wrote when the company was A or are you going to leave them "at risk" (others description, not mine) with a dreaded B rated company?

On the other hand, a company can go from B to A overnight. Are you now going to run out and write tons of business with the company tomorrow that you refused to rep yesterday?

Newby asked about a non rated company and I think I know the company he has ion mind. Personally, I would have no problems placing business with them. They are a publicly traded company and seem to have a good track record.

The state departments of insurance have the responsibility to regulate the companies they approve and they made the determination a company is financially stable at the time of the company's admittance into the state.​

I couldn't have said it better myself. Well...I could...but you beat me to it.
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[rousemark]

I couldn't have said it better myself. Well...I could...but you beat me to it.

Got to be quick!

Here are two excerpts from an article published a few days after Mutual Benefits was seized.

Mutual Benefit's woes also cast a harsh light on an insurance company rating system that is supposed to guide consumers toward the soundest underwriters. Until 11 days ago, Mutual Benefit enjoyed a top A+ rating from A.M. Best Co., the industry's oldest and most respected rating agency.


Part of the problem, too, is that many of these seized insurers, including Executive Life, received high marks from the nation's best known insurance rating firms until right before they collapsed.
Mutual Benefit was no exception. Indeed, though recently downgraded, the company still carries a "Contingent A" rating from A.M. Best Co. .
Note: They STILL maintained an A rating AFTER they failed.

 

[donamese]

Oxford Life I believe went from an A to a C because Uhaul filed bankruptcy. Had nothing to do with their finances but because the 2 are sister companies, they took a hit.

While I look at the ratings, I don't believe they are as telling as many believe.

 

[TwiLight]

Jackson is all annuity now and has strong ratings (A+ Best) as well as their S&P.

I know, there is always the exception.....AIG....A++ = Bailout.

 

[VolAgent]

Jackson is all annuity now and has strong ratings (A+ Best) as well as their S&P.

Aren't they also buying books of life insurance to service?

 

[rousemark]

I know, there is always the exception.....AIG....A++ = Bailout.

During my career, there have been enough A rated comppanies fail that you couldn't really really call them exceptions relative to failures. Of course, any company failing, no matter the rating, is an exception as they are relativly few when you consider how many companies do not fail.