Print this pageProcess for start-up Title underwriters to be assigned a Financial Stability Rating®

Step 1: Submit Required Information

The 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:



Step 2: Financial Ratio Calculation

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 underwriter 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.


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 Title underwriter 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 Title underwriter 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 lenders, agents, insureds and prospective insureds.