A rating of the ability of the insurance company sponsoring the variable policy to pay its claims. Because a policy'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 policy's fixed account goes into the general account of the insurance company and may consequently be withheld from the investor.
Highest claims-paying ability. Risk factors are negligible.
Very high claims-paying ability. Protection factors are strong. Risk is modest, but may vary slightly over time due to economic and/or underwriting conditions.
High claims-paying ability. Protection factors are average and there is an expectation of volatility in risk over time due to economic and/or underwriting conditions.
Below average claims-paying ability. Protection factors are average. However, there is considerable variability in risk over time due to economic and/or underwriting conditions.
Uncertain claims-paying ability and less than investment-grade quality. However, the company is deemed likely to meet these obligations when due. Protection factors will vary widely with changes in economic and/or underwriting conditions.
Possessing risk that policy-holder and contract-holder obligations will not be paid when due. Protection factors will vary widely with changes in economic and underwriting conditions, or company fortunes.
There is substantial risk that policy-holder and contract-holder obligations will not be paid when due. Company has been or is likely to be placed under state department insurance supervision.