Credit quality

Insurance company ratings, explained

Every payment stream we list depends on one thing above all: the issuing insurance carrier's ability to pay on schedule for years or decades. Financial-strength ratings are the shorthand the industry uses for that ability. Here is how to read them — and why they deserve more of your attention here than almost anywhere else.

Meet the Carriers

The agencies

Four scales, one question

Four agencies dominate insurance financial-strength ratings: AM Best (the insurance specialist, and the scale you will see most often on our listings), S&P Global, Moody's, and Fitch. Each answers the same question — how able is this insurer to meet its obligations — on its own lettering system, so a rating only means something alongside the agency that issued it.

The AM Best scale, from strongest down: A++ and A+ (Superior), A and A- (Excellent), B++ and B+ (Good), then B and below (Fair and weaker). Most established structured settlement issuers hold ratings in the A range; where an issuer sits lower, the market prices its paper at a higher estimated yield — compensation you should accept knowingly, not by accident.

Swipe sideways for the full table →

AM Best rating	Category	What it signals
A++ / A+	Superior	Strongest capacity to meet obligations
A / A-	Excellent	Where most major settlement issuers sit
B++ / B+	Good	Adequate, with less cushion
B / B- and below	Fair and weaker	Priced accordingly — expect a higher estimated yield

The AM Best financial-strength scale, summarized. Categories are AM Best's; the plain-English signal column is ours.

Why it matters more here

The rating is the protection

A bank deposit has the FDIC behind it. A new annuity has a state guaranty association behind it, within limits. A secondary market payment right generally has neither— what it has is the issuing carrier's obligation, full stop. That is why the carrier's financial strength deserves more scrutiny here than in almost any other fixed-income purchase, and why we place only carriers whose strength we are prepared to stand behind.

It is also why every listing states the issuer's current rating as of the listing date, rather than this page printing a table of standing ratings that would quietly go stale. Read the rating on the listing, note the agency, and weigh it against the estimated yield: more yield on lower-rated paper is the market telling you something.

For the history and lineage of each issuer behind our inventory, see the carrier profiles: Berkshire Hathaway · New York Life · MetLife · Prudential · American General · Pacific Life · John Hancock · Genworth · Allstate · Everlake · WILCAC · Talcott · Symetra · Transamerica · Brighthouse · Integrity Life · Mutual of Omaha.

Rating questions

What is a good insurance company rating?

On the AM Best scale, A++ and A+ are Superior and A and A- are Excellent — most established structured settlement issuers sit in that A range. Ratings of B++ and below signal progressively weaker capacity, and pricing on such paper typically compensates with a higher estimated yield. The scales differ by agency, so always note which agency a rating comes from.

Why does the carrier's rating matter more for a secondary market annuity?

Because the scheduled payments are the issuing carrier's obligation and these payment rights are not FDIC-insured and generally are not covered by a state guaranty association. The carrier's ability to pay is the protection, which is why every listing states the issuer's rating as of the listing date.

Do ratings change?

Yes — agencies upgrade and downgrade carriers as their finances evolve, which is why we do not print standing ratings on carrier pages. Each listing shows the current rating at the time it is listed; confirm it as part of your review before committing.

What these assets are, and what they are not

Guaranteed and life-contingent structured settlement payment rights, and lottery payment rights, represent the right to receive factored payments that Pacific Structured Assets purchases and assigns to investors through a court-approved process. They are purchased at a discount to their total scheduled payments.

These payment rights are NOT annuities, NOT insurance products, and NOT securities registered with the U.S. Securities and Exchange Commission. They are not bank deposits, are not FDIC-insured, and are not protected by any state insurance guaranty association. The industry term “secondary market annuity” refers to these payment rights and does not mean you are purchasing an insurance annuity contract.

You acquire the right to receive the payments, not the underlying annuity. The annuity itself does not change hands. Unlike the original structured settlement annuity, which may be shielded from creditors under applicable law, the assigned payment rights you purchase generally do not carry that creditor or bankruptcy protection.

Assigned annuities, offered as a separate product line, are existing insurance annuity contracts reassigned to a new owner through a change of ownership or an irrevocable change of payee.

These are long-term holdings with limited liquidity, and may not be suitable for every investor. There is no public trading market and no daily price. Resale or reassignment of a payment stream to another buyer may be possible, and Pacific Structured Assets can assist, but a resale is not guaranteed and the price it would bring is not guaranteed. Because the payments are fixed, that resale value moves with prevailing interest rates: an investor could realize a gain if rates have fallen since purchase, or a loss if rates have risen. These holdings are best suited to capital an investor can commit for the long term. Nothing on this website is tax, legal, financial, or investment advice. Consult your own advisors before investing.

Pacific Structured Assets, Inc. does not provide tax, legal, financial or accounting advice. The material on this website has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial or accounting advisors before engaging in any transaction, including the acquisition of factored structured settlement payments. Pacific Structured Assets is not registered with the Securities and Exchange Commission and is not licensed to sell insurance in any state.

Pacific Structured Assets

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