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Do Insurance Company Ratings Matter?

They should. Clients need to be aware of the ramifications of disclosing ratings information to clients and prospects.

Here are three key ratings issues to consider:

  • Legal Requirements. Most courts assert your obligation as a client to advise clients regarding potential financial problems with a carrier – including low ratings.
  • E&O Exposure. If a client you placed with an unrated or undercapitalized carrier names you in a lawsuit, your E&O carrier may not pay on your behalf. Don’t bank on your E&O carrier being there if your client’s carrier goes under.
  • PPACA Potential Mandates. The Patient Protection and Affordable Care Act (Obamacare) may mandate that malpractice insurance be placed with a rated or admitted carrier. With the future so uncertain, why take the chance of alternative risk placements – including RRGs, captives and trusts – when there are admitted, A rated alternatives?

For more information on the impact of financial ratings and how to report them to clients, contact us directly.

Randy Tate
Vice President of Sales
801-990-2400 X 162
© 2012 The MGIS Companies, Inc.
800.969.6447 | 1849 W. North Temple, Salt Lake City, Utah 84116-3067

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