Our Financial Stability Analysis Model involves a tactile review of financial statements in addition to computation and analysis of critical financial ratios. Our goal is to assess current and future financial stability. Demotech, Inc. receives and reviews:
A major determinant of the financial stability of a Title underwriter 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 underwriters to our battery of ratios and tests to assess the predictability and reliability of our analysis process. Our Financial Stability Analysis Model identified virtually all underwriters that became insolvent at least one year in advance of formal regulatory action.
The Title underwriter has an opportunity to review the assignment of its Preliminary Financial Stability Rating® (PFSR).
The Title underwriter agrees with the assignment of FSR as well as other terms and conditions.
Financial Stability Ratings® are reviewed quarterly and reassigned as verified. The process includes our initial review, quarterly monitoring and twelve months of support related to inquiries from lenders, agents, insureds and prospective insureds.