AM Best

A.M. Best Releases Best’s Insurance-Linked Securities & Structures Methodology

 Emmanuel Modu
Managing Director,
Insurance-Linked Securities
+1 908 439 2200, ext. 5356

Stephen Irwin
Vice President
Credit Rating Criteria, Research & Analytics
+1 908 439 2200, ext. 5454

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - AUGUST 16, 2016 03:22 PM (EDT)
A.M. Best today announced the publication of a new methodology, “Best’s Insurance-Linked Securities & Structures Methodology” (BILSM). The publication follows the public comment period that began May 16, 2016, and closed on June 16, 2016. This final document contains just minor changes relative to the version released for comment.

The BILSM provides an outline and summarization of the methodology A.M. Best utilizes to rate insurance-linked securities and insurance-linked structures (ILS) and also will be the ongoing central repository for “Best’s Idealized Issue Default Matrix” and “Best’s Idealized Issuer Default Matrix.” The BILSM offers readers insight into the information requirements, key rating considerations, risk modeling and surveillance activities that are generally applied by A.M. Best to rate ILS transactions, including the rating of ILS funds and their obligations. A.M. Best expects that at least one rating may be impacted by the changes to default tables included within the BILSM.

Concurrent with the release of the BILSM, A.M. Best is retiring two criteria procedures: “Best’s Idealized Default Matrix” and “Securitization of Reinsurance Recoverables.” The default matrices found in BILSM will supersede all existing versions of default matrices in currently published criteria procedures, making the separate criteria procedure, “Best’s Idealized Default Matrix,” redundant.

A.M. Best does not currently have any outstanding ratings utilizing the “Securitization of Reinsurance Recoverables” criteria procedure. Accordingly, no ratings will be impacted by the retirement of this criteria procedure.

The BILSM and related criteria procedures are available at .

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.