Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, October 9, 1995 TAG: 9510100026
SECTION: BUSINESS PAGE: 6 EDITION: METRO
SOURCE: JANE BRYANT QUINN WASHINGTON POST WRITERS GROUP
DATELINE: NEW YORK LENGTH: Medium
The vanishing insurers: Connecticut Mutual, which will disappear into Massachusetts Mutual; New England Life, dropping into Metropolitan Life; and North American Life Assurance of Canada, joining Manufacturers Life. The losers' ratings aren't bad, they're just not terrific. And that's not competitive today.
When you ask about an insurer's rating, however, you may not be given the whole picture. You may be offered a single rating, typically from A.M. Best of Oldwick, N.J.
But Best doesn't have a perfect record for spotting trouble in advance. Indeed, no one does. So if you're considering a purchase, you should ask to see every safety rating the insurer has received. The rating companies usually agree on how sound an insurer is. But sometimes they hold differing views, which is something you would want to know.
Five companies offer public ratings. Three - A.M. Best, Standard & Poor's Insurance Rating Services in New York and Weiss Ratings in Palm Beach Garden, Fla. - rate most of the active insurers. The remaining two - Moody's Investors Service in New York and Duff & Phelps Credit Rating Co., in Chicago - rate a shorter list of insurers who ask for the rating and pay for it.
A good insurance agent will give you every rating the insurance company has - including the Weiss rating, which many agents hate because it's reputed to be especially tough. A devious agent, on the other hand, will give you only the higher ratings, hiding any dissenting views.
Even when you get all the ratings, it's hard to know just what they mean. For example, an insurer might brag that it won an A-plus from Standard & Poor's. But that's S&P's fifth rating down (the top rating is AAA). A-plus is ``good,'' S&P reports, but not ``excellent.''
Your agent might also give you a short report on how sound the company is. But it might cover only the high points noted by the rater.
The best roundup I know of comparative ratings for life and health insurers is published from time to time by Joseph Belth, professor emeritus of insurance at Indiana University. (Ask for the ratings issue, $15 from The Insurance Forum, P.O. Box 245-J, Ellettsville, Ind. 47429.)
Belth's current roundup shows how the insurers are viewed by four rating agencies: S&P, Weiss, Moody's and Duff & Phelps. A.M. Best refused to be included and in fact sued Belth to force him to leave Best ratings out. Belth agreed, to avoid the cost of litigation. If you have all the other ratings, however, you probably don't need Best. If you want it, ask your insurance agent.
If you're interested in a single company's ratings, ask your insurance agent. As a double-check call:
Standard & Poor's, 212-208-1527, for free ratings on up to five insurers per call. (S&P, as well as the other raters, will explain what each rating means.)
Moody's, 212-553-0377, for up to three free ratings (on 137 companies).
Duff & Phelps, 312-629-3833, for up to five or six ratings (more if you need them - on 107 companies). For $25 you can also get a written report on the insurers' weaknesses and strengths.
Weiss, 800-289-9222, $15 for each over-the-phone rating (1,770 companies); $25 for a mailed rating plus a brief report on the insurer's weaknesses and strengths.
A.M. Best (1,753 companies). Call 900-555-BEST to bill the cost to your telephone (this will cost you a flat $2.95), or 800-424-BEST to bill it to a credit card. You'll need the insurer's exact name to find its identification number and rating. Cost: $4.95 for each telephone rating and $15 for a written report on the company.
by CNB