Print this pageBenefits of Finalizing a Financial Stability Rating®

Once an insurance company finalizes a Financial Stability Rating® (FSR) they become eligible to take part in the benefits and acceptances of FSRs. Specifically, your company their insureds have access to the insurance agents of your choice, acceptance by mortgage lenders, availability of umbrella insurance markets and premium financing opportunities. The following are the available to a company that finalizes an FSR.


Acceptance by Mortgage Lenders

Since 1989, FSRs of A or better have been acceptable to the secondary mortgage marketplace and virtually all mortgage lenders. If your agent, insured or underwriter is made aware of a situation in which your company's homeowners insurance policy is not immediately accepted by a lender, contact us and we will address of the situation.


Access to Agent's Errors and Omissions Insurance Coverage

Insurers earning a Financial Stability Rating® (FSR) of A or better have access to many insurance agent's errors and omissions insurance carriers extending coverage for insolvency:

Regarding other carriers offering insurance agent's errors and omissions insurance coverage, your agents should be encouraged to contact us so we can approach a specific underwriter on your agent's behalf.


Insolvency Gap Coverage

The insolvency gap coverage was created by Demotech, Inc. to mitigate the impact of the insolvency exclusion that has crept into insurance agent's errors and omissions insurance.


Since the early 2000's, most of the carriers writing insurance agent's errors and omissions insurance have inserted an insolvency exclusion. This insolvency exclusion requires that the markets utilized by an agent have a rating at a certain level or higher from a specific rating agency.


To assist unrated carriers of these specific rating agencies respond to the challenge created by this insolvency exclusion, Demotech contacted Westport, Utica Mutual and other errors and omissions insurance carriers to secure exceptions on behalf of a particular insurer or agent.


Although we have had success securing exceptions on behalf of insurers and agents, this approach is time-consuming as well as agent-specific. In contrast, insolvency gap coverage provides an insurer with the opportunity to address the insolvency exclusion on behalf of all of its agents.


The sole covered peril in the insolvency gap coverage is the insolvency of the designated insurance company. In the event of insolvency, the insolvency gap coverage policy will pay or defend claims. The policy authorizes payment of the claim or defense on behalf of a covered agent. Insureds of the designated insurance company have their claim paid or defended, thereby avoiding litigation with the producer or agent.


Availability of Umbrella Insurance Markets

Insurers receiving a Financial Stability Rating® of A or better have access to several stand-alone umbrella insurance markets. Protect your account and your preferred customers by offering stand-alone personal, commercial and farm umbrella insurance policies. Some of these markets are:


Oak Street Funding

Oak Street Funding can lend against commissions from insurance carriers earning a Financial Stability Rating® of A or better from Demotech. This enables your agents to borrow money for acquisitions, organic growth, investing in technology, working capital, paying off business debt and much more.


Premium Financing Opportunities

If your agent or insured needs to avail themself of a premium financing service, Premium Financing Specialists, Inc. (PFS) will extend premium financing to the insured of insurance companies rated A or better by Demotech.


PFS was founded in 1977 and has become the third largest premium finance company in the United States based on premium dollars financed, and is number one in the number of accounts financed. Premium Financing Specialists has distinguished itself by meeting the needs of agencies. PFS welcomes accounts under $2,000. Their size and financial strength also enables them to be extremely competitive on large accounts. For specific information on PFS, please contact Mike Keegan at (800) 255-6316 or email here.


Similarly, US Premium Finance will extend financing when the insurer is rated A or better by Demotech. US Premium Finance offers extraordinary service, carrier direct billing program, flexible terms and rates, user friendly software and multiple payment options.


Promotional and Marketing Materials for the FSR

Demotech offers a variety of complimentary, as well as premium, services in an effort to aid promotion of your duly earned FSR.


Press release service
Agent Awareness Mailing
FSR seal image for your website
Print marketing material


Solutions as Unique as Your Company

Innovative thinking, strategic analysis, commitment, insight and on-going involvement with the insurance industry allow us to provide solutions as unique as your company.


Demotech encourages you to contact us with any current needs or problems you are experiencing. We are confident we can provide a solution.