Question

If an insurance company is put under ‘Credit Watch’, and is given a ‘positive’ designation, then what would this mean for that insurance company?

a.

To develop standardized credit rating methodologiesRating of Insurance Company can be raised

b.

To assess the financial health of insurers and reinsurersRating of Insurance Company can be lowered

c.

To provide guidelines for underwriting practicesRating of Insurance Company can be affirmed

d.

To facilitate international cooperation among regulatorsRating of Insurance Company can either be lowered or affirmed

Posted under IC85 Reinsurance Management

Answer: To assess the financial health of insurers and reinsurersRating of Insurance Company can be raised Explanation:When an insurance company is put under 'Credit Watch' and is given a 'positive' designation, it means that there is a possibility that the rating of the insurance company may be raised. The 'positive' designation indicates that the credit rating agency sees potential for an improvement in the rating based on certain factors or developments. However, it does not guarantee an actual rating increase as the final decision will depend on further evaluation by the rating agency.

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Q. If an insurance company is put under ‘Credit Watch’, and is given a ‘positive’ designation, then what would this mean for that insurance company?
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