A rating of the ability of the insurance company sponsoring the variable contract to pay its claims. Because a contract's subaccounts are invested in a separate account from that of the general insurance company, a low rating does not necessarily imply that investors are likely to lose money if the company is unable to pay its claims. In most cases, however, money invested in a contract's fixed account goes into the general account of the insurance company and may consequently be withheld from the investor.
Benefits
The ratings are useful to both investors concerned about the ability of a sponsor to pay annuitization benefits, and to contractholders who put money into fixed accounts.
Origin
The Best Ratings reproduced herein appear under license from A.M. Best. They do not constitute, either expressly or implicitly, an endorsement of Morningstar, nor of Morningstar's recommendations, formulas, criteria, comparisons or relationships to any other ratings, rating scales, or rating organizations that are simultaneously published herein. A.M. Best is not responsible for transcription errors made in presenting Best Ratings.