November 8, 1995
INSURANCE INFORMATION NOTICE NO. 95-4A
SUBJECT: INSURANCE COMPANY A. M. BEST RATING RECOMMENDATIONS
The Office of Risk Management (ORM) developed the Procedures Manual for Insurance Requirements in Contracts and Indemnification Agreement (Hold-Harmless) to provide recommendations or guidelines of appropriate coverages and limits in contract/lease agreements. ORM recommended that insurance be placed with insurers with an A. M. Best's rating of no less than "A VI".
If your office uses these recommendations, please make the following change. In future contracts/leases, ORM recommends insurers have an A. M. Best's rating of "A- VI or higher". A. M. Best currently has four ratings of A++, A+, A, and A-. Any of these four categories are acceptable ratings. Please note that this is only a recommendation and each agency must determine what rating should be required in various contracts.
ORM will revise the Procedures Manual for Insurance Requirements in Contracts and Indemnification Agreement (Hold-Harmless) to reflect this change. If you have any questions, please contact Bridgette Anderson at (504) 342-8416.
IF YOU ARE CURRENTLY USING ORM'S RECOMMENDED LANGUAGE IN BID/LEASE DOCUMENTS, PLEASE MAKE THIS CHANGE IMMEDIATELY.
THESE RECOMMENDATIONS DO NOT SUPERSEDE ANY STATE OR FEDERAL STATUTE WHICH REQUIRES A HIGHER RATING.