AM Best has upgraded the financial strength rating (FSR) from B to B+ (good) for AM Best Insurance, Long Term Premium Life, PHL Variable, LTC Premium, and Variable Premium Life. According to the FSR, AM Best's rating is consistent with its peers.
The FSR, issued by Moody's Investors Service, is a semi-annual credit rating for insurance companies. The ratings are based on an independent third party's analysis of risk and credit-worthiness. The following three ratings were downgraded: AM Best's Long Term Premium Life (B-), Nassau Premium Life (A-), and PHL Premium Life (B).
The ratings were first published in November of 2020 and are based on AM Best's financial strength as determined by the company and Moody's. The FSR also considers the company's ability to meet the criteria set forth in its mortgage loan insurance agreement. In insurance cost of AM Best's Long Term Premium Life, the company must maintain the current ratio of mortgage insurance premiums paid by policyholders to mortgage insurance premium income. The mortgage insurance premium income ratio is based on AM Best's total premium income divided by total premium paid.
The mortgage insurance premium income ratio is different from other ratios, which are usually based on AM Best's gross premiums. The ratio is adjusted for AM Best's net premium income or its gross premium income. The mortgage insurance policyholder's loan balance is considered in the ratios. Policyholder debt balances that are higher than ten percent of the total loan balance are also taken into consideration. In Nassau Life Insurance Corporation's Long Term Premium Life, the mortgage insurance premium income ratio is based on the company's gross premium income, but the Mortgagor's Premium Life rating is based on AM Best's net premium income.
The rating for Nassau Premium Life, Long Term Premium Life, and PHL Premium Life was downgraded due to the downgrade of AM Best's rating from A to A. The rating was lowered for AM Best Life Insurance due to its failure to meet the criteria set forth in the mortgage insurance loan agreement.
The PHL Premium Life rating was downgraded because the insurance company had too few policies and it did not have enough cash reserve to pay the premiums on time. The PHL variable insurance company, on the other hand, has high claims ratios that may be a result of inadequate claim management.
The Long Term Premium Life rating was downgraded because it is not a preferred policy. The rating for the Nassau Variable Premium Life has been lowered because of a significant drop in premium collections compared to its predecessor. For its part, the PHL Premium Life rating is being lowered because it did not increase premiums at a steady rate.
The Nassau Premium Life rating was downgraded because the premium collections have declined, even though the company reported a rise in premiums and reported a surplus. The Nassau life insurance policyholder should have an adequate amount of savings to cover premium payments for three to five years. The Nassau Variable Premium Life rating was lowered due to a significant drop in premiums over the past year and, t linkedin .com/pulse/can-i-get-my-own-insurance-18-frank-slater/">here fore, the policyholder could not continue to pay the premium at the same level.
The premium life rating for the PHL Premium Life was downgraded because the company did not have a reserve to pay premium payments. Because of this, PHL Premium Life was not able to generate enough revenues to cover its expenses and was forced to consider selling the policy.
The Nassau Life Insurance Company was downgraded for failing to meet the criteria set forth in the loan agreement. The premium collections were not sufficient enough to cover the costs of maintaining the policy at the average interest rate and were not at the level required for the policy to generate enough income for the premium payments.
The PHL Premium Life rating was downgraded due to the company's inability to meet the criteria set forth in the loan agreement. This rating was lowered because the policyholder was not able to generate enough premiums to pay for the expenses necessary to keep the policy current. In addition, because of a lack of reserves, PHL Life's premiums were not sufficient to make the premium payments on time and, therefore, it could not continue to maintain the policy at the level required for the policy to generate enough income for premium payments on time. The PHL Premium Life rating was lowered due to the policyholder's failure to meet the criteria set forth in the loan agreement.