Importance of A rated carriers for stop loss insurance

What is an A rated carrier?   A rated carriers include carriers with ratings A- and above.  A carrier’s rating is a measure of the insurer’s financial strength and therefore its ability to meet its ongoing contract and policyholder obligations.  To determine an insurer’s rating, a complete evaluation is conducted including its finances, operations, and reputation.

Who rates insurance carriers?  Carrier ratings are assigned by an independent rating organization such as A.M. Best, Fitch, Moody’s and Standard & Poor’s

Why is it important to work with an A rated carrier or higher?  Particularly for self-funded plans that pay their own members’ claims, a carrier’s reputation and financial ability to pay unexpected high value or catastrophic claims is essential.