Print this pageProcess for start-up Health insurers to be assigned a Financial Stability Rating®

Step 1: Submit Required Information

The review and analysis process applicable to relatively new carriers permits the carrier to leverage information that it has prepared and submitted to the respective departments of insurance, including the state of domicile. Demotech, Inc. receives and reviews:



Step 2: Financial Ratio Calculation

A major determinant of the financial stability of a Health insurer is our evaluation of critical financial stability ratios benchmarked against our financial stability tests and the representative historical operating results of the insurer. The calculations underlying our review process have been verified and substantiated by subjecting a series of solvent and insolvent insurers to our battery of ratios and tests to assess the predictability and reliability of our analysis process.


When reviewing a start-up situation or relatively new carrier, our financial analysis criteria will be applied to the limited historical data available with a focus on the pro forma financial information in the corporate business plan. Any information relating to the acquisition of existing books of business would be helpful.


Step 3: Review PFSR

The Health insurer has an opportunity to review the assignment of its Preliminary Financial Stability Rating® (PFSR).


The first draft of our review and report will be submitted to you so that your personnel can review it. All modifications, corrections and errata would be directed to the attention of your primary analyst. Your analyst will review the comments and reflect appropriate revisions in the final draft.


We will not present proprietary information that you have shared with us. We will not share the final report with third parties unless we have your express permission to do so.


Step 4: Finalize assigned FSR

The Health insurer agrees with the assignment of FSR as well as other terms and conditions.


Step 5: Additional Information and Quarterly Reviews

Financial Stability Ratings® are reviewed quarterly and reassigned annually. The process includes our initial review, quarterly monitoring and twelve months of support related to inquiries from agents, insureds and prospective insureds.


Other services include a mailing to producers to introduce Demotech to them, intervention to address obstacles created due to sole reliance on the ratings of another organization and other reasonable activities required to level the playing field.