OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. is requesting comments from market participants in the insurance industry and other interested parties on the following draft criteria report:

• “Assessing the Tail Risk of Sidecars” (updates version dated January 19, 2012)

The criteria describes A.M. Best’s approach to evaluating the Tail Risk associated with sidecars. Tail Risk is the chance that the risk of loss thought to be ceded to a sidecar must actually be borne by the sponsor due to inadequate capitalization of the sidecar. Edits to the criteria include the addition of an exhibit that demonstrates how the tail risk is incorporated into the sponsor insurer’s BCAR calculation. This example was formerly contained within the criteria, “Tail Risk and the BCAR,” which has now been combined into the criteria “Assessing the Tail Risk of Sidecars,” to eliminate redundancy.

These updates are part of A.M. Best’s continual review of its rating methodology and are not considered material or expected to affect ratings.

Visit www.ambest.com/ratings/methodology to download a PDF copy of each report.

Written comments should be submitted by email to rating.methodology@ambest.com no later than August 23, 2012.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Duncan McColl, CFA, 908-439-2200, ext. 5826
Manager, Rating Criteria
duncan.mccoll@ambest.com
or
Edward Easop, 908-439-2200, ext. 5781
Group Vice President
edward.easop@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5445
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Source: A.M. Best Co.