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GUIDE TO BEST’S ISSUER CREDIT RATINGS – (ICR)
A Best’s Issuer Credit Rating (ICR) is an independent opinion of an entity’s ability to meet its ongoing financial obligations
and can be issued on either a long- or short-term basis. A Long-Term ICR is
an opinion of an entity’s ability to meet its ongoing senior financial obligations, while a Short-Term ICR is an opinion of an
entity’s ability to meet its ongoing financial obligations with original maturities
generally less than one year. An ICR is an opinion regarding the relative future credit risk of an entity. Credit risk is the
risk that an entity may not meet its contractual financial obligations as they come
due. An ICR does not address any other risk. In addition, an ICR is not a recommendation to buy, sell or hold any securities, contracts or any other financial obligations, nor does it address the suitability
of any particular financial obligation for a specific purpose or purchaser. An ICR may be displayed with a rating identifier or
modifier that denotes a unique aspect of the opinion.
Best’s Long-Term Issuer Credit Rating (Long-Term ICR) Scale
Rating
Categories
Rating
Symbols
Rating
Notches*
Category
Definitions
Exceptionalaaa-
Assigned to entities that have, in our opinion, an exceptional ability to meet their ongoing senior financial ob
ligations.
Superior aaaa+ / aa-Assigned to entities that have, in our opinion, a superior ability to meet their ongoing senior financial o
bligations.
Excellenta
a+ / a-Assigned to entities that have, in our opinion, an excellent ability to meet their ongoing senior financial ob
ligations.
Good
bbbbbb+ / bbb-Assigned to entities that have, in our opinion, a good ability to meet their ongoing senior financial obligat
ions.
Fair
bbbb+ / bb-
Assigned to entities that have, in our opinion, a fair ability to meet their ongoing senior financial obligations. Credit quality is vulnerable to adverse
changes in industry and economic conditions.
Marginalb
b+ / b-
Assigned to entities that have, in our opinion, a marginal ability to meet their ongoing senior financial obligations. Credit quality is vulnerable to
adverse changes in industry and economic conditions.
Weak
cccccc+ / ccc-
Assigned to entities that have, in our opinion, a weak ability to meet their ongoing senior financial obligations. Credit quality is vulnerable to adverse
changes in industry and economic conditions.
Very Weakcc-
Assigned to entities that have, in our opinion, a very weak ability to meet their ongoing senior financial obligations. Credit quality is very vulnerable
to adverse changes in industry and economic conditions.
Poor
c
-
Assigned to entities that have, in our opinion, a poor ability to meet their ongoing senior financial obligations. Credit quali
ty is extremely vulnerable
to adverse changes in industry and economic conditions.
* Best’s Long-Term Issuer Credit Rating Categories from “aa” to
“ccc” include Rating Notches to reflect a gradation within the
category to indicate whether credit quality is near the top or bottom of a particular
Rating Category. Rating Notches are expressed with a “+” (plus) or “-” (minus).
Best’s Short-Term Issuer Credit Rating (Short-Term ICR) Scale
Rating
Categories
Rating
Symbols
Category
Definitions
StrongestAMB-1+Assigned to entities that have, in our opinion, the strongest ability to repay their short-term financial obliga
tions.
Outstanding AMB-1Assigned to entities that have, in our opinion, an outstanding ability to repay their short-term financial obl
igations.
SatisfactoryAMB-2Assigned to entities that have, in our opinion, a satisfactory ability to repay their short-term financial obl
igations.
AdequateAMB-3
Assigned to entities that have, in our opinion, an adequa
te ability to repay their short-term financial obligations; however, a
dverse industry or economic conditions
likely will reduce their capacity to meet their financial commitments.
QuestionableAMB-4
Assigned to entities that have, in our opinion, questionable credit quality and are vulnerable to adverse economic or other external changes, which could have a
marked impact on their ability to meet their financial commitments.
Long- and Short-Term Issuer Credit Non-Rating Designations
Designation
Symbols
Designation
Definitions
d
Status assigned to entities (excluding insurers) that are in default or when a bankruptcy petition or similar action has been
filed and made public.
e
Status assigned to insurers that are publicly placed, via court
order into conservation or rehabilitation, or the international
equivalent, or in the absence of a court order, clear
regulatory action has been taken to delay or otherwise limit policyholder payments.
f
Status assigned to insurers that are publicly placed via court order into liquidation after a finding of insolvency, or the in
ternational equivalent.
s
Status assigned to rated entities to suspend the outstanding ICR when sudden and significant events impact operations and ratin
g implications cannot be evaluated due to a lack of
timely or adequate information; or in cases where continued
maintenance of the previously published rating opinion is in violat
ion of evolving regulatory requirements.
nr
Status assigned to entities that are not rated; may include previously rated entities or entities that have never been rated
by AM Best.
Rating Disclosure: Use and Limitations
A Best’s Credit Rating (BCR) is a forward-looking independent and objective opinion regarding an insurer’s, issuer’s or financia
l obligation’s relative creditworthiness. The opinion represents a comprehensive
analysis consisting of a quantitative and qualitative evaluation
of balance sheet strength, operating performance, business pro
file and enterprise risk management or, where appropriate, the specific nature
and details of a security. Because a BCR is a forward-looking opinion as of the date it is released, it cannot be considered as
a fact or guarantee of future credit quality and therefore cannot be described
as accurate or inaccurate. A BCR is a relative measure of risk that implies credit quality and is assigned using a scale with
a defined population of categories and notches. Entities or obligations assigned
the same BCR symbol developed using the same scale, should not be viewed as completely identical in terms of credit quality. Al
ternatively, they are alike in category (or notches within a category), but
given there is a prescribed progression of categories (and notches)
used in assigning the ratings of a much larger population of entities or obligations, the categories (notches) cannot mirror the precise
subtleties of risk that are inherent within similarly rated entities or obligations. While a BCR reflects the opinion of A.M. Best Rating Services, Inc. (AM Best) of relative creditworthiness, it is not an indicator
or predictor of defined impairment or default probability with respect to any specific insurer, issuer or financial obligation. A
BCR is not investment advice, nor should it be construed as a consulting or
advisory service, as such; it is not intended to be utilized as a recommendation to purchase, hold or terminate any insurance policy, contract, security or any other financial obligation, nor does it address
the suitability of any particular policy or contract for a specific purpose or purchaser. Users of a BCR should not rely on it in making any investment decision; however, if used, the BCR must be considered
as only one factor. Users must make their own evaluation of each investment decision. A BCR opinion is provided on an “as is”
basis without any expressed or implied warranty. In addition, a BCR may
be changed, suspended or withdrawn at any time for any reason at the sole discretion of AM Best.
For the most current version, visit www.ambest.com/ratings/index.html. BCRs are distributed via the AM Best website at
www.ambest.com
. For additional information regarding the development of a BCR
and other rating-related information and definitions, including outlooks, modifiers, identifiers and affiliation codes, please refer to the report titled “
Guide to Best’
s Credit Ratings
” available at no charge on
the AM Best website. BCRs are proprietary and may not be reproduced without permission.
Copyright © 2023 by A.M. Best Company,
Inc. and/or its affiliates.
ALL RIGHTS RESERVED.
Version 121719
BEST’S REVIEW • FEBRUARY 2023
Best’s Credit Rating Actions