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What Are AM Best Ratings & NAIC Numbers?


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Before you decide on a place to eat at (or order take out from) I am sure you check some type of reviews or rankings to make sure that you are getting the best Pad Thai around. No one wants subpar Pad Thai just like no one wants to work with vendors who have subpar insurance carriers. AM Best provides us with a way to check the ratings of our vendors insurance carriers so we can make sure they are credible and reliable.  

The AM Best is an insurance rating company used to measure the strength of insurance companies in the marketplace. This ranking is based off of the insurance carrier’s stability and reputation, because these are strong indicators of the financial health of the company. 

The rating is represented by letters ranging from A to D and roman numerals. The letters are similar to grades used in schools for students.


The rankings are:

  • aaa = Exceptional
  • aa  = Very Strong
  • a = Strong
  • bbb = Adequate
  • bb = Fair
  • b = Marginal
  • c  = Poor
  • d  = In Default


The roman numerals represent the financial size of the company. This number is assigned to each business, anywhere from I (less than $1 million) to XV (greater than $2 trillion).


You should decide which rankings are sufficient for your company. Any service provider you are working with must have a carrier of a certain ranking or higher to be able to work with you. Any vendor you are hiring should be able to provide evidence of insurance through their broker using insurance companies with AM Best ratings.


On the COI, next to the “insurers affording coverage” section you will see a column for an NAIC #. The North American Industry Classification System (NAICS) is the system used by Federal statistical agencies in classifying individual business locations with an NAIC #.

But what is its purpose? This system serves as a way to facilitate the collection of statistical data and its analysis.  Also, this system promotes uniformity since it compares individual business across North America economy according to their statistical data.

Each underwriting company is assigned a unique six-digit code. These codes are used for identification and regulation purposes. One of the NAIC’s main goals is to promote a competitive market and they do this by making sure insurers follow fair practices. If you need to look up an insurance company’s information, you can do this with only their NAIC #.






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