Posted: Wed Sep 24, 2008 5:13 pm Post subject: Guarantee from Insurance company
Hello, I a need professional consultation and hope you will help me. our company is structuring export deal (with the contract for 4 years) and the buyer is ready to provide advance payment against the guarantee issued by the S&P rated company. Our insurance company has no such rating, but they are able to reinsure it with their partner reinsurance company. however, the buyer hasnt agreed motivating that the contractual relationship between insurer and re-insurer companies are not transparent and it is possible that they will make changes in the contract without their consent. Can you please inform if this is possible in principle?Thanks,Karen [/i]
"...and the buyer is ready to provide advance payment against the guarantee issued by the S&P rated company. Our insurance company has no such rating, but they are able to reinsure it with their partner reinsurance company..."
Well, not all insurance companies pay for EACH and EVERY so-called rating company to rate them.
AIG was an A+ Superior or maybe even an A++ Superior rated company by A.M. Best. So those "ratings" are only rating the financial condition of the company based on the information PROVIDED BY THE COMPANY.
Garbage IN - Garbage OUT
That being said, Standard and Poor's has only been rating insurance companies since 1971.
A. M. Best has been rating insurance companies since 1899 and is considered THE authority in the industry but they do have some black eyes.*
Executive Life out of California and Kentucky Central from Lexington, KY were both A+ Superior rated companies before they went out of business.
In fact, after the Kentucky Central failure rather than A. M. Best lowering any insurance company's "rating" they created a new catagory of A++ Superior. That way all the companies that had the former highest rating of A+ Superior could retain their same rating.
American General Life Insurance Company;
American General Life and Accident Insurance Company;
The United States Life Insurance Company in the City of New York;
AIG Life Insurance Company;
American International Life Assurance Company of New York.
Rating
A.M. Best Company Financial Strength A Excellent 1
FitchRatings Financial Strength AA- Very Strong 2
Moody's Investors Service Financial Strength Aa3 Excellent 3
Standard & Poor's Financial Strength A+ Strong 4
1 Under review with negative implications
2 Rating watch "evolving"
3 On review for possible further downgrade
4 CreditWatch developing
Sorry, kind of hijacked your thread, but I've been fed up with AIG - American General for a loooooooooong time.
Good riddance AIG. _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
That way all the companies that 
